Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of HEART’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about HEART’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
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To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 5-9 and 33-34 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise HEART’s basic financial statements. The status of funds schedule is presented for purposes of additional analysis and is not a required part of the basic financial statements.
The status of funds schedule is the responsibility of management and is derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the status of funds schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 31, 2025 on our consideration of HEART’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering HEART’s internal control over financial reporting and compliance.
Badawi and Associates, CPAs
Emeryville, California
August 31, 2025
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
As management of the Housing Endowment and Regional Trust of San Mateo County (HEART), we offer our readers of HEART’s financial statements this narrative overview and analysis of its financial activities for the fiscal year ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with the basic financial statements and related notes.
Financial Highlights
• HEART’s total net position as of June 30, 2023 amounted to $19,627,530, an increase of $2,480,997 from the prior year. This increase was the result of receiving $1.8 million in grants to assist in the development of affordable housing, an increase of $354,000 in accrued interest , and the balance from operations.
• Consistent with prior year s, HEART’s net position primarily made up of $14.5 million in outstanding interest and loan receivables from affordable housing developers.
• Cash and cash equivalents are $ 9.68 million. This amount is largely c omprised of $2, 000,000 in borrowed funds from the County of San Mateo Measure-K loan, $7,258,787 in HEART Trust Funds, and $421,359 in restricted funds. Of the total $9.68 million in cash and cash equivalents, $8.5 million can only be used to develop or preserve affordable housing.
• During the fiscal year HEART made two loans totaling $6 million dollars to support the development of affordable housing. During the year, HEART received one loan repayment in the amount of $3 million.
• Total operating and program revenue for the year amounted to $2,580,071 comprised of $2 million in grants restricted for affordable housing, $236,363 in contributions from member agencies and the balance of $262,225 from loan origination fees and charges to cities for HEART’s City staffing program.
Overview of the Financial Statements
HEART’s basic financial statements consist of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide the reader with a broad overview of HEART’s finances, in a manner similar to a private-sector business.
The statements of net positions present information on HEART’s assets and liabilities, with the difference reported as net positions. Over time, increases or decreases in net positions may serve as a useful indicator of whether the financial position of HEART is improving or deteriorati ng.
The statements of activities report how HEART’s net positions changed during the most recent two fiscal years. Changes in net positions are reported as soon as underlying events occur, regardless of the timing of the related cash flows. Thus, some revenues and expenses reported in this statement may result in cash flows only in future periods. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
The government-wide financial statements can be found on pages 13 and 14 of this report.
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Fund Financial Statements
A fund is a group of related accounts that is used to control resources that have been segregated for specific activities or objectives. HEART uses fund accounting to ensure compliance with various legal requirements, such as the annually adopted budget. Accordingly, a budgetary comparison schedule has been included in the supplementary information section of the financial statements to demonstrate compliance with budget.
Fund financial statements report essentially the same information as the government -wide financial statements. However, unlike the government -wide financial statements, fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year.
As required by accounting principles, the financial transactions of HEART are accounted for in a Special Revenue Fund, a governmental fund, as monies received by it are legally restricted to specific use. Monies allocated and disbursed to HEART can be expended only for purposes authorized under the Agreement.
The fund financial statements can be found on pages 17 through 18 of this report.
Notes to the Financial Statements
The notes to the financial statements on pages 21 through 30 provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements.
Other information
This report also presents certain required supplementary information concerning compliance with HEART’s annual budget. This information, as well as associated notes, immediately follows the basic financial statements and the accompanying notes.
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Financial Analysis – Government-Wide Financial Statements
Assets
Cash and cash equivalents
Receivables, net:
Interest
Loans
Accounts
Restricted assets:
Temporarily restricted:
Cash and cash equivalents
Total Assets
Liabilities
Accounts payable
Long-term liabilities
San Mateo County Measure-K Loan
Paycheck Protection Program Loan
Total Liabilities
Net Position
Restricted for:
Homebuyer Assistance Loan Program – pledge
account
Unrestricted
Total Net Positions
2024
$ 9,680,146
1,665,692
12,834,489
104,754
421,359
24,706,440
78,910
5,000,000
0 5,078,910
421,359
19,206,171
$ 19,627,530
2023
$ 10,130,466
1,311,665
9,809,489
162,343
414,960
21,828,923
62,390
4,620,000
0 4,620,000
411,960
16,731,573
$ 17,146,533
• HEART’s total assets are $24,706,440, an increase of $2,877,517 from the previous year. This is an increase of 11.6% compared to the prior year. A $1.7 million grant from the California Department of Housing and Community Development and a $1.3 million grant from the City of Daly City are largely responsible for the net $2.9 million asset increase from the previous year.
• Cash and cash equivalents decreased from $10.1 million to approximately $ 9.7 million. HEART experienced large cash inflow and outflows during the fiscal year. This included receiving $3 million in grants, making $6 million in loans, receiving $3 million in loan repayments and drawing down a $380,000 loan from the County of San Mateo. The net effect of these flows and total operations was a net decrease of $450,300 in cash and cash equivalents.
• Loans outstanding increased by a net amount of approximately $3 million due to a new loan to CRP The Ridge at Ralston for a development project in the City of Belmont.
• Total liabilities for the current year are $ 5,078,910. This re presents an increase of $ 458,920 from the previous year. The increase is largely due to drawing $380,000 from HEART’s Measure-K loan from the County of San Mateo, bringing the total loan from the County to $5 million. The remaining 7 6.5
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
$78,910 in liabilities includes $65,923 in payroll liabilities for accrued vacation and payroll taxes, and $12,987 in accounts payable to consultants and miscellaneous vendors.
• Net position of governmental activities is $ 17,146,533, an increase of $ 1,716,882, or 11% more compared to the previous fiscal year . The increase in net position was due to a $ 1.7 million grant from the California Department of Housing and Community Development for the development of Colibri Commons, and affordable housing development in the City of East Palo Alto.
Changes in Net Positions
Changes in Net Positions
Revenues:
Program Revenues:
Operating grants and contributions
Member Agencies
Donors
Charges for Services
Total Program Revenues
Expenses:
General management and admin support
Legal services
Interest on long-term debt
Miscellaneous
Total Expenses
Net Program Revenue
General Revenues – Investment Earnings
Change in Net Positions
Net positions – beginning
Net positions – ending
2024
$ 236,363
2,081,483
262,225
2,580,071
993,913
1,069
92,748
201
1,027,941
1,552,130
928,867
2,480,997
17,146,533
$ 19,627,530
2023
$ 236,286
1,823,882
4,800
2,064,968
669,638
11,274
83,212
135
764,259
1,300,709
416,173
1,716,882
15,429,651
$ 17,146,533
• Total operating and program revenue during the current period was $2,580,071, higher than the prior year’s amount of $ 2,064,968. This is an increase of 25% or $519,1033. The increase is due to an increase of $257,601 in contributions received and an increase of $257,425 in charges for services .
Grants of $1.7 million the previous year and a similar amount the current year for the Colibri Commons development in East Palo Alto round out the total program revenue .
• The $257,601 in contribution noted above is the result of two contributions from the County of San Mateo: a contribution of $85,436 to HEART’s Trust Fund from the County’s impact fees and a contribution of $114,949 from the County to support the HEART’s City Staffing Program. 8 6.5
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
• The increase of $257, 425 in charges for services is largely comprised of $171,000 in fees charged to cities for HEART’s City Staffing Program, and $90,069 in developer loan fees.
• Total expenses incurred during the current period amounted to $1,027,941, an increase of $263,682, or 24.5% more, than the previous year. Most of the increase in expenses is due to the addition of more staff at HEART to meet the increased program work load of HEART’s City Staffing Program.
Budgetary Analysis
Total Revenues and Other
Financing Sources
Total Expenditures and Other
Financing Uses
Net Change in Fund Balance
Budgeted Amount
Final
$ 1,336,253
1,446,392
$ (110,139)
x
Actual Amount –
Budgetary Basis
$ 2,966,132
1,027,941
$ 2,318,191
Variance -Positive
(Negative)
$ 1,629,879
418,451
$ 2,428,330
• Actual revenues wer e higher than budget ed by $1,629,879. While HEART’s individual revenue sources fluctuated and differed from the budgeted amounts, the $1.7 million grant awarded to HEART for affordable housing development w as responsible for generating the large positive variance.
• Operating expenses were lower than budgeted by $418,451 . Expenses were lower largely due the lower utilization than expected of outside contract and consulting services.
Beyond FY 2024
In 2025 HEART is planning to continue making loans to affordable housing developers with its Trust Fund.
Currently, is planning on making $3 million in loans two affordable housing projects. Additional funds will be available to make more loans through out 2025. These loans will help HEART achieve its mission of creating more affordable housing units, while increasing its revenue from developer loan origination fees.
Over the next year HEART will also expend significant resources creating new programs to create and preserve affordable housing by financing the acquisition of privately owned, existing apartment buildings and by providing staffing help to cities to assist them with carrying out their affordable housing programs .
HEART has also developed a loan program to help mobile homeowners replace their units with new ones and anticipates making $1 million in loans to mobile homeowners in 2025.
Due to continuing high interest rates, it is likely HEART’s first-time homebuyer down payment loan program, “Opening Doors,” will continue to see low demand for its loans. HEART will continue to present community workshops for first time homebuyers and work with realtors and cities to help buyers prepare for a time when homebuying becomes feasible again.
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Requests for Information
This financial report is designed to provide a general overview of HEART’s finances for all those interested.
Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to Housing Endowment and Regional Trust of San Mateo County, Attn:
Executive Director, 2905 S. El Camino Real, San Mateo, CA 94403. 10 6.5
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BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
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Housing Endowment and Regional Trust of San Mateo County Statements of Net Position
June 30, 2024 and 2023
2024 2023
Assets
Cash and investments 9,680,146$ 10,130,466$
Receivables, net:
Interest 1,665,692 1,311,665
Loans 12,834,489 9,809,489
Accounts 104,754 162,343
Restricted assets:
Temporarily restricted:
Cash and cash equivalents 421,359 414,960
Total Assets 24,706,440 21,828,923
Liabilities
Accounts payable 78,910 62,390
Long-term liabilities:
San Mateo County Measure K loan 5,000,000 4,620,000
Total Liabilities 5,078,910 4,682,390
Net Position
Restricted for:
Home Buyer Assistance Loan Program -
pledge account 421,359 414,960
Unrestricted 19,206,171 16,731,573
Total Net Position 19,627,530$ 17,146,533$
Governmental Activities
The notes to the financial statements are an integral part of this statement. 13 6.5
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2024 2023
Expenses
General management and administrative support 933,913 669,638$ Legal services 1,069 11,274
Interest on long-term debt 92,758 83,212
Miscellaneous 201 135
Total Expenses 1,027,941 764,259
Program Revenues
Operating grants and contributions:
Member agencies 236,363 236,286
Donors 2,081,483 1,823,882
Charges for Services 262,225 4,800
Total Program Revenues 2,580,071 2,064,968
Net Program Revenue (Expenses) 1,552,130 1,300,709 General Revenues
Investment earnings 928,867 416,173
PPP Loan forgiveness - -
Total General Revenues 928,867 416,173
Change in Net Positions 2,480,997 1,716,882
Net Positions - beginning 17,146,533 15,429,651
Net Positions - ending 19,627,530$ 17,146,533$
Housing Endowment and Regional Trust of San Mateo County Statements of Activities
For the Years Ended June 30, 2024 and 2023
Governmental Activities
The notes to the financial statements are an integral part of this statement. 14 6.5
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BASIC FINANCIAL STATEMENTS
Fund Financial Statements
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2024 2023
Assets
Cash and investments 9,680,146$ 10,130,466$
Receivables, net:
Interest 1,665,692 1,311,665
Loans 12,834,489 9,809,489
Accounts 104,754 162,343
Cash - restricted 421,359 414,960
Total Assets 24,706,440$ 21,828,923$
Liabilities, Deferred Inflows of
Resources, and Fund Balance
Liabilities
Accounts payable 78,910$ 62,390$
Total Liabilities 78,910 62,390
Deferred Inflows of Resources
Unavailable revenues 1,665,692 1,311,665
Total Deferred Inflows of Resources 1,665,692 1,311,665 Fund Balance
Nonspendable 12,834,489 9,809,489
Restricted 421,359 414,960
Unassigned 9,705,990 10,230,419
Total Fund Balance 22,961,838 20,454,868
Total Liabilities, Deferred Inflows of Resources, and Fund Balance 24,706,440$ 21,828,923$ Reconciliation of Fund Balance Sheets to the Statements of Net Position:
Total Fund Balance - Governmental Fund 22,961,838$ 20,454,868$ Long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the fund
Interest receivable 1,665,692 1,311,665
Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Fund Balance Sheet County of San Mateo-Measure-K loan (5,000,000) (4,620,000) Net position of governmental activities 19,627,530$ 17,146,533$ Housing Endowment and Regional Trust of San Mateo County Balance Sheets - Governmental Fund
June 30, 2024 and 2023
The notes to the financial statements are an integral part of this statement. 17 6.5
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Housing Endowment and Regional Trust of San Mateo County Statements of Revenues, Expenditures, and Changes in Fund Balance For the Years Ended June 30, 2024 and 2023
2024 2023
Revenues
Member agency contributions 236,363$ 236,286$
Donor contributions 2,081,483 1,823,882
Charges for services 262,225 4,800
Investment earnings 574,840 223,415
Total Revenues 3,154,911 2,288,383
Expenditures
General management and administrative support 933,913 669,638 Legal services 1,069 11,274
Miscellaneous 201 135
Debt service:
Interest and fiscal charges 92,758 83,212
Total Expenditures 1,027,941 764,259
Excess (Deficit) of Revenues Over Expenditures 2,126,970 1,524,124 Other Financing Sources (Uses)
Loan proceeds 380,000 -
Total Other Financing Sources (Uses) 380,000 - Net Change in Fund Balance 2,506,970 1,524,124
Fund Balance - Beginning 20,454,868 18,930,744
Fund Balance - Ending 22,961,838$ 20,454,868$
Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balance of Governmental Fund to the Statements of Activities (page 14)
Net change in fund balance - governmental fund 2,506,970$ 1,524,124$ Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 354,027 192,758 Loan proceeds provided current financial resources to governmental funds, but increased long-term liabilities in the government-wide statemem of net position. (380,000) -
Change in net positions of governmental activities 2,480,997$ 1,716,882$ The notes to the financial statements are an integral part of this statement. 18 6.5
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Notes to the Basic Financial Statements
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HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(b) Reporting Entity
On February 26, 2002, the County of San Mateo (County) approved establishment of a housing trust fund for the County and set aside $3 Million from reserves to be used as the initial capitalization for the fund.
A Joint Powers Agreement (Agreement) between the County and certain cities and towns within the County (Member Agencies) established the Housing Endowment and Regional Trust (HEART) in 2003 under the Joint Exercise of Powers Act per California Government Code Sections 6500 et seq. T he Agreement was in effect at least until March 30, 2013 and can be terminated thereafter according to the terms specified in the Agreement. HEART’s general purpose is to support and generate funding that will result in permanent additions to workforce housing needs in San Mateo County. HEART obtained a determination from the Internal Revenue Service of its tax-exempt status and classification as a public charity under Section 501(c)(3) of the Internal Revenue Code (Code), effective January 8, 2008.
Contributions to HEART are tax deductible under Section 170 of the Code.
HEART is an entity separate from each participating entity and is under the direction of a Board of Directors (Board). The Board is comprised of 11 elected officials from the County and Member Agencies and 10 at-large members who are not publicly elected officials. The Board appoints a managing agent who is responsible for the day-to-day administration of HEART under its direction.
The County also made an initial allocation of $75,000 for administrative costs in addition to the $3 Million initial capitalization. HEART received $2.075 Million in fiscal year 2004 and the remaining $1 Millionwas paid in equal installments from fiscal years 2005 through 2009. The Member Agencies support HEART by contributing annual dues. The dues were assessed annually through fiscal year 2009 based upon Member Agency’s population information used by City/County Association of Governments of San Mateo County (C/CAG). The dues remained fixed from fiscal years 2009 through 2011. The dues were reduced by 10% annually in FY 2012, and remained fixed in FY 2014 through FY 2024 at the lower rate.
Monies allocated and disbursed to HEART can be expended only for purposes authorized under the Agreement.
(c) Measurement Focus, Basis of accounting, and Financial Statement Presentation Under the new financial reporting model, governments are required to present government-wide and fund financial statements along with reconciliation from the fund financial statements to the government- wide statements. The government-wide financial statements are reported on a basis of accounting similar to a commercial enterprise, which is different from the traditional basis of accounting used for the fund financial statements.
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred regardless of when the related cash flows take place. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 21 6.5
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HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Measurement Focus, Basis of accounting, and Financial Statement Presentation (continued) Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. R evenues from reimbursement type programs are considered to be available when they are collectible within two months of the end of the current fiscal period in order to properly match revenues with related expenditures. Expenditures are recognized in the accounting period in which the liability is incurred.
Cash and Cash Equivalents: Cash and cash equivalents include all monies held in banks, highly liquid investments with maturities of less than three months and cash held in the San Mateo County Investment Pool (County Pool). A portion of the cash balance is pooled with other funds of the County to earn a higher rate of return than could be earned by investing the funds individually. HEART considers its equity in the County’s investment pool to be cash equivalents.
Receivables: All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible.
Restricted Assets: Amounts maintained in separate bank accounts are classified as restricted assets on the balance sheet because uses of the funds are externally restricted by the lending agencies to maintain a minimum balance in the Pledge Account for financing eligible housing developers and homeowners.
Long-term Obligations: Long-term debts are reported as liabilities in the government-wide financial statements. In the fund financial statements, governmental fund types report the face amount of the debt issued as other financing sources and interest and principal payments made in the current period are reported as debt service expenditures.
(d) Use of Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results based on subsequent events could differ from those estimates.
(e) Budgetary Information
HEART adopts an annual budget that can be amended throughout the year. The basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures except that unrealized gains and losses are not included in the budget. See Note 1 of the notes to the required supplementary information for detail.
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HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) New Pronouncements
In fiscal year 2022-23, HEART adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements:
GASB Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62 – The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.
2. CASH AND INVESTMENTS
(a) Cash and Investments
As of June 30, 2024 and 2023, HEART’s cash and investments consisted of:
Cash Deposits
The carrying amount of HEART’s cash deposits were a total of $3,752,129. Bank balances before reconciling items were a positive amount of $3,752,129 as of June 30, 2024. The carrying amount of HEART’s cash deposits were a total of $3,752,129. Bank balances before reconciling items were a positive amount of $3,752,129 as of June 30, 2023.
The California Government Code requires California banks and savings and loan associations to secure HEART’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in HEART’s name. The fair value of pledged securities must equal at least 110% of HEART’s cash deposits. California law also allows institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the total cash deposits. HEART’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was not collateralized FY 23-24 FY 22-23
Cash and investments:
Cash on hand -$ -$
Wells Fargo Checking and Savings Accounts 3,501,846 1,833,816 Meriwest Committed Account 250,283 88,145 San Mateo County Investment Pool 5,928,017 8,208,505 Total unrestricted cash and investments 9,680,146 10,130,466 Meriwest Restricted Account 421,359 414,960 Total cash and investments 10,101,505$ 10,545,426$ 23 6.5
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HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
2. CASH AND INVESTMENTS (CONTINUED)
(a) Cash and Investments, Continued
San Mateo County Investment Pool
Investment in the County Pool is reported at fair value. The change in fair value for the year is recorded as unrealized gain or loss and reported as part of investment earnings. Fair value is based on information provided by the County Treasurer. T he fair value in HEART's investment in the County Pool as of June 30, 2024 and 2023 was $5,928,017 and $8,208,505 respectively. The fair value factor of 0.9913 and
0.9715 was used to calculate the fair value of the investments in the County Pool for fiscal year 2024 and fiscal year June 30, 2023.
HEART does not have a formally adopted investment policy. (b) Risk Disclosures
Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates.
It is mitigated by limiting the average maturity of HEART’s portfolio. Investments held in HEART grouped by maturity date as of June 30, 2024 and 2023 are shown below:
Credit Risk: Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of an issuer to repay its debt. As of June 30, 2024, HEART’s deposits and investments were rated as follow:
Custodial Credit Risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside.
FY2024
Investment Type Total 1 year or Less 1 - 2 years 2- 3 years San Mateo County Investment Pool 5,928,017$ 5,928,017$ $ - $ - Total Investments 5,928,017$ 5,928,017$ $ - $ - FY2023
Investment Type Total 1 year or Less 1 - 2 years 2- 3 years San Mateo County Investment Pool 8,208,505$ 8,208,505$ $ - $ - Total Investments 8,208,505$ 8,208,505$ $ - $ - Investment Maturities (in years)
Investment Maturities (in years)
Moody's S&P % of Portfolio Moody's S&P % of Portfolio
San Mateo County Investment Pool Not Rated Not Rated 100% Not Rated Not Rated 100% Total 100% 100%
FY2024C redit Q uality Ratings FY2023 C redit Q uality Ratings 24 6.5
Attachment 3 - Proposal from HEART
186
HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
3. RECEIVABLES
(a) Interest Receivable
The interest receivable balance reported at June 30, 2024and 2023 of $1,665,692 and $1,311,665 respectively represent uncollected interest on loans receivable and fourth quarter interest due from the County Treasurer on investments made by HEART in the County Pool. (b) Loans Receivable
Loans receivable as of June 30, 2024and 2023 consist of the following:
2024 2023
In September 2006, HEART loaned $1,730,000 of program funds to The Crossings Phase II, L.P. for the development of the 113-unit The Village at the Crossing project in San Bruno, CA, which will provide housing for very-low and extremely-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and bears interest at a rate of 3% per annum. The Certificate of Occupancy was issued on January 10, 2008. 1,709,866$ 1,709,866$ In June 2006, HEART signed a loan ag reement with Hillcrest Senior Housing Corporation (HSHC) for $510,000 to assist with construction financing of the 39-unit Hillcrest Gardens project in Daly City, CA, which will provide housing for very-low and extremely-low income seniors. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and/or Notice of Completion for the development, whichever is earlier, and bears interest at a rate of 3% per annum. The Notice of Completion was issued on December 11, 2008.
510,000 510,000
In February 2015, HEART signed a loan agreement with Habitat for Humanity for $500, 000 to assist in the acquisition of the land and improvements located at 612 Jefferson Avenue, Redwood City (“Property”) to build a multifamily development. The loan is secured by a Deed of Trust recorded against the property. The loan has a term of 5 years with an option to extending for a term of one year and bears interest at a rate 0% for the first five years and at a rate of 3% if the borrower fails to achieve the project completion milestone at maturity. 462,500 487,500 In December 2007, HEART signed a loan agreement with Trestle Glen Associates for $1,760,000 to assist with the development of a 119-unit rental housing project in Colma, CA, which will provide housing for very-low and extremely-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and/or Notice of Completion for the development, whichever is later, and bears interest at a rate of 3% per annum. The Certificate of Occupancy was issued on December 30, 2009. 1,760,000 1,760,000 Sub-total carried forward 4,442,366$ 4,467,366$
25 6.5
Attachment 3 - Proposal from HEART
187
HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
3. RECEIVABLES (CONTINUED)
(b) Loans Receivable
2024 2023
Sub-total carried forward 4,442,366$ 4,467,366$
In October 2015, Bridge Housing Ventures assumed National Church Residences loan including accrued interest for the amount of $542, 123, to assist with the one hundred units of rental housing affordable to low-income households, commonly known as Ocean View Senior Apartments, located at 555 Crespi Drive in Pacifica, California. The loan has a term of 57 years from the date of the modification agreement, which bears interest at a rate of 3% per annum commencing on October 16, 2016. 542,123 542,123 In March 2011, HEART signed aloan agreement with Mid-Peninsula South City, L.P. for $600, 000, which was funded by the Genetech Foundation South Francisco Fund to assist with the development of 62-units of a 109-unit rental housing project in South San Francisco, CA, which will provide housing for low and very-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy, which evidences project completion and bears interest at a rate of 3% per annum commencing upon project completion. The Certificate of Occupancy was issued on October 19, 2012. 600,000 600,000 In March 2011, HEART signed aloan agreement with Mid-Peninsula South City II, L.P. for $400, 000, which was funded by the Genetech Foundation South Francisco Fund to assist with the development of 47-units of a 109-unit rental housing project in South San Francisco, CA, which will provide housing for low and very-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy, which evidences project completion and bears interest at a rate of 3% per annum commencing upon project completion. The Certificate of Occupancy was issued on October 19, 2012. 400,000 400,000 In December 2021, HEART signed a Deveopment Loan Agreement with MP Downtown San Mateo Associates, L.P. to provide $3,800,000 for the development of 225 rental homes for extremely low- very low- and low-income individuals and families. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 3% commencing in March 2022. 3,800,000 3,800,000 In February 2024, HEART signed a Deveopment Loan Agreement with CRP Affordable Housing and Community Development CA LLC. to provide $3,000,000 for the development of 65 rental homes for low-income persons and households. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 5%. 3,000,000 -
In July 2024, HEART signed a Deveopment Loan Agreement with HEART-SV, a California Joint Powers Authority. to provide $450, 000 for the development of 8 rental homes for low-income persons and households. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 3%. 50,000 - Total Loans Receivable 12,834,489$ 9,809,489$
26 6.5
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188
HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
4. ACCOUNTS PAYABLE
Accounts payable comprises of the following:
5. NON-CURRENT LIABILITIES
The following is summary of non-current liability activity of HEART:
San Mateo County: Measure-K loan
On August 1, 2017 HEART entered into a loan agreement with the County of San Mateo for an amount of $5,000,000 with a maturity date of July 31, 2024. Interest rate will be paid annually based on the amount of interest that the loan would have earned had it been invested in the San Mateo County Pooled Investment rate starting twelve months from the date of the initial disbursement. The proceeds of the loan will to be used to make predevelopment, acquisition, construction and bridge loans that are consistent with the terms of HEART’s Quick Start Loan Program. As of June 30, 2024 HEART drawn an amount of $5,000,000 from the total loan agreement of $5,000,000. 2024 2023
Payable for contractor service 12,986$ 4,598$ Accrued payroll 65,924 57,792
Total Accounts payable 78,910$ 62,390$
Balance at Balance at
July 1, 2023 Additions Deletions June 30, 2024
San Mateo County:Measure-K 4,620,000$ 380,000$ -$ 5,000,000$ Total 4,620,000$ 380,000$ -$ 5,000,000$ Balance at Balance at
July 1, 2022 Additions Deletions June 30, 2023
San Mateo County:Measure-K 4,620,000$ -$ -$ 4,620,000$ Total 4,620,000$ -$ -$ 4,620,000$ 27 6.5
Attachment 3 - Proposal from HEART
189
HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
6. REVENUES
(a) Operating Grants and Contributions
Operating grants and contributions consist of the following:
Member Agencies Dues
Member Agencies are billed annually for dues to cover administrative expenses.
Donors
Other operating grants and contributions include contributions from private donors. (b) Charges for Services
Charges for services are loan processing fees collected from home buyers upon close of escrow on each home loan.
(c) Investment Earnings
Investment earnings reported in the government fund statements of revenues, expenditures, and changes in fund balance comprise of quarterly interest received from the County Treasurer on investments made by HEART in the County Pool and interest collected from developers on cumulative interest receivable accrued. Interest is recorded in the year it is earned and is available to pay current liabilities.
Investment earnings reported in the government-wide statements of activities includes earnings from the County investments noted above plus interest earned in the current year on loans made to developers.
7. FUND BALANCES / NET POSITION
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which HEART is bound to honor constraints on the specific purpose for which amount in the fund can be spent. As of June 30, 2024 and 2023, fund balance for the governmental fund consists of the following classifications respectively:
(a) Nonspendable Fund Balance – includes amounts that cannot be spent because they are not in spendable form, such as prepaid items and loans receivable. (b) Restricted Fund Balance – includes amounts that can be spent only for specific purposes stipulated by external resources providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. (c) Unassigned Fund Balance – is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.
In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted and then unassigned. 28 6.5
Attachment 3 - Proposal from HEART
190
HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023
7. FUND BALANCES / NET POSITION (CONTINUED)
At fiscal year-end, fund balance reported on the balance sheets on page 17 includes:
The amount shown as restricted above is also reported as restricted net position on the statement of net positions on page 13.
8. RISK MANAGEMENT
HEART is exposed to various risks of losses related to assets having a current or future benefit to HEART.
HEART has insurance coverage provided by the Hartford. In addition, HEART has special excess liability insurance coverage provided as part of the County's insurance coverage. The existing insurance policies are current as of the issuance of this report. Under an agreement with the County, the Department of Housing (DOH) of San Mateo County provides fiscal and program services to HEART. Agents of the DOH are covered by the County’s insurance provider. The County Counsel provides legal representation for any claims or litigation of HEART under a contract. For the years ended June 30, 2024 and 2023, the annual amount contracted with County Counsel for legal representation was $1,069 and $9,773 respectively.
2024 2023
Nonspendable 12,834,489$ 9,809,489$
Restricted:
Home Buyer Assistance Loan Program - pledge account
see Note 2(a) 421,359 414,960
Unassigne d 9,705,990 10,230,419
Total Fund Balance 22,961,838$ 20,454,868$
29 6.5
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REQUIRED SUPPLEMENTARY INFORMATION
31 6.5
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Actual
Amount Variance with
Budgeted Budgeted Budgetary Final Budget
Amount Amount Basis Positive
Original Final (Note 1) (Negative)
Revenues
Member Agency contributions 236,286$ 236,286$ 236,363$ 77$ Other contributions 355,000 355,000 2,081,483 1,726,483 Investment earnings 157,166 157,166 386,061 228,895 Charges for services and other 587,801 587,801 262,225 (325,576) administrative support 1,336,253 1,336,253 2,966,132 1,629,879 Expenditures
General management and
administrative support 1,274,392 1,274,392 933,913 340,479 Legal services 72,000 72,000 1,069 70,931 Debt services
Interest and fiscal charges 100,000 100,000 92,758 7,242 Contingency - - 201 (201) Total Expenditures 1,446,392 1,446,392 1,027,941 418,451 Net Change in Fund Balance (110,139)$ (110,139)$ 2,318,191 2,428,330 Fund Balance - beginning 20,695,673
Fund Balance - ending 23,013,864$
Housing Endowment and Regional Trust of San Mateo County Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2024
33 6.5
Attachment 3 - Proposal from HEART
195
HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024 and 2023
1. BUDGETS, BUDGETARY PROCESS, AND ENCUMBRANCES
HEART uses two funding sources to manage operations: Administrative Funds and Program Funds. The Board adopts an annual operating budget, which can be amended by the Board throughout the year. Actual revenues and expenditures presented reflect activity in both funds during the year. As discussed in Note 1(d) of the notes to the basic financial statements, the basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures, except for unrealized gains and losses under GASB 31. The financial statements record unrealized gains and losses as required by Generally Accepted Accounting Principles (GAAP). Adjustments were made to certain budgeted accounts to reflect changes made in financial statement presentation.
HEART uses an encumbrance system to assist in controlling expenditures. Purchase orders, contracts, and other commitments for the expenditures of monies are recorded under this system in order to reserve applicable appropriations. Any encumbrances outstanding at year-end are recorded as reservations of fund balance as they do not constitute expenditures or liabilities.
The actual net change in fund balance under the budgetary basis on page 33 is reconciled to the change in fund balance under GAAP on page 18 as follows:
Explanation of difference between budgetary basis and GAAP basis:
FY 23-24
Net Change in Fund Balance - budgetary basis 2,318,191$ Cash on hand - Net unrealized loss on cash in County Investment Pool
under GASB 31 188,779
Change in Fund Balance - GAAP basis 2,506,970$
Fund Balance - budgetary basis 23,013,864$
Unrealized loss on cash in County Investment Pool
under GASB 31 as of June 30, 2024 (52,026)
Fund Balance - GAAP basis 22,961,838$
34 6.5
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196
SUPPLEMENTARY INFORMATION
35 6.5
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Program Administrative
Funds Funds Total
Revenues
Member agency contributions -$ 236,363$ 236,363$ Donor contributions 1,938,375 143,108 2,081,483 Investment earnings - 386,061 386,061 Loan origination fees 217,156 45,069 262,225 Total Revenues 2,155,531 810,601 2,966,132 Expenditures
General management and
administrative support 768,541 165,372 933,913 Legal services 553 516 1,069 Debt services
Interest and fiscal charges 92,758 - 92,758 Total Expenditures 861,852 166,089 1,027,941 Excess (Deficiency) of Revenues Over
(Under) Expenditures 1,293,679 644,512 1,938,191 Other Financing Sources (Uses)
Loan proceeds:
- San Mateo County Measure K Loan 380,000 - 380,000 Total Other Financing Sources (Uses) 380,000 - 380,000 Net Change in Fund Balance 1,673,679 644,512 2,318,191 Fund Balance - beginning 19,353,909 1,341,764 20,695,673 Fund Balance - ending 21,027,588$ 1,986,276$ 23,013,864$ required by generally accepted accounting principles.
Housing Endowment and Regional Trust of San Mateo County Status of Funds
For the Year Ended June 30, 2024
Notes:
(1) All income received from investment earnings is categorized to Program Funds (2) The above schedule does not include adjustments made for GASB No. 31 as 37 6.5
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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and major fund of the Housing Endowment and Regional Trust of San Mateo County (HEART) as of and for the years ended June 30, 2024 and 2023, and the related notes to the financial statements, which collectively comprise HEART’s basic financial statements, and have issued our report thereon dated August 31 , 2025.
Report on
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered HEART’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of HEART’s internal control. Accordingly, we do not express an opinion on the effectiveness of HEART’s internal control.
A
deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our
consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 39 6.5
Attachment 3 - Proposal from HEART
201
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether HEART’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi & Associates, CPAs
Emeryville
, California
August 31, 2025
40 6.5
Attachment 3 - Proposal from HEART
202
Attachment 3, Scoring Summary for RFP
Foster City Affordable ADU Program - RFP Due February 20, 2026 Type A (Loan
Admin)
Type B or C
(Loan +
Construction
or sales/
Installation)
Item Criterion Max Points Max Points Scoring Guidelines HEART HGSF TMO HEART HGSF TMO Notes 1 Demonstrates understanding of the requested work and responsiveness to the scope of services; 5 5 5=excellent; 4=very good; 3=
good; 2=fair; 1=poor 5 5 3 5 5 2
2 Quality, feasibility, and completeness of the proposal; 5 5 5=excellent; 4=very good; 3=
good; 2=fair; 1= poor or
incomplete
5 5 1 5 5 1
Both HEART and HGSF had complete, excellent proposals. TMO's proposal was incomplete and included a statement that the proposal is really for a software system intended to be used by the selected vendor or by the City should the City manage the program in house. 3 Additional costs to the City; 3 3
ranked based on cost; if no costs
provided, score is 0. Lowest cost
=3, next lowest = 2, no cost
provided = 0
3 1 2 3 1 2
HEART=$60,510; HGSF=$0; TMO=$21,240 per year x 3 years = $63,720. See item 8 for HGSF regarding gap funding required. Gap funding would need to fund the full cost of an ADU and could be as much as $200K per ADU, adding an additional $1.6 million to the program.
4 Quality of construction products, associated warranties, energy efficiency and sustainability features, supply chain logistics, and customer service for homeowners.
0 5
5=excellent; 4=very good; 3=
good; 2=fair; 1=poor; 0=no
response or does not apply;This
item does not apply for
respondents for loan
administration responses.
0 5 0 0 5 0 Not applicable to HEART and TMO
5 Experience: a) related experience in the Bay Area and California in building or selling/installing, ADUs, if applicable for the type of program for which Responder is applying; b) related experience partnering with municipalities to implement residential building/financing programs; c) related experience in providing financing products for residential construction projects; d) expertise and experience of the project team members and in-house expertise; and 6 9
for a, b, and c individually:
3=excellent; 2=good; 1=fair or
limited information provided;
0=no response. Max score is 3 for
each section. Max score is 9 for
this item.
6 9 1 6 9 0
Item (a) does not apply to HEART or TMO; for Item (b), HEART partners with all 20 San Mateo County jurisdictions and Habitat has substantial experience in Bay Area Cities; for TMO, the firm has substantial experience with cities but did not specify any Bay Area cities in their proposal. For item (c) HEART and HGSF demonstrated this experience but TMO did not respond to this item.
6 Agency financial stability; 5 5
5=excellent; 4=very good; 3=
good; 2=fair; 1=poor; 0=no
response
5 5 0 5 5 0 All three respondents appear to have excellent financial stability. 7 Impact of proposal on cost and timeline; 2 2
2=meets city's cost and timeline
goals; 1=does not meet city's cost
and timeline goals; 0=no response
2 1 0 2 1 0
HGSF's proposal will require development and implementation of a secondary gap funding loan program, which will add several months to the program timeline.
8 Impact of/feasibility of exceptions/changes to the Program Guidelines; and 5 5 5=no exceptions or all exceptions
acceptable and in compliance
with with HE Program H-D-4-b
requirements; 3=exceptions could
be acceptable but create cost
and/or administrative burden to
the City; 1=exceptions result in
non-compliance with H-D-4-b;
0=no response.
5 3 0 5 3 0
HEART: exceptions are acceptable and minor; HGSF: exceptions include 1) adding a <120% AMI requirement for homeowner loan applicants which could deter homeowners from applying and limit the pool of qualified applicants; 2) reduction of program funding to $1,000,000 from $1.1 million and removal the $150K loan amount and incentive for special needs; all loans would be for $125K; 3) proposal requires the City to provide gap funding through a different program to fund ADUs at 100% of project cost. Could be as much as $200K per ADU or $1.6 million total.
9 Acceptance of the City’s Standard Agreement for Professional Services and insurance requirements, including any proposed changes to the agreement or insurance coverages (See Attachment);
3 3
3 = no exceptions; 2 = minor
exceptions; 1 = substantial
exceptions;
2 2 0 2 2 0 HEART and HGSF requested minor changes. No response from TMO. 10 References and portfolio review; 5 5
5=excellent; 4=very good; 3=
good; 2=fair; 1=poor; 0=no
response
5 5 0 5 5 0
Both HEART and HGSF included excellent references and both have related experience for the type of program proposed. TMO did not include this item in their proposal.
11 Portion of City funds to be spent on Proposer’s administrative costs or other Proposer fees rather than on loans to borrowers. 3 3 Ranked in order of % from 3 to 1; 0=no response 3 2 0 3 2 0 HEART=5%; HGSF=9%; no response from TMO Total possible score 42 50
Total Score of Respondent 41 43 7 41 43 5
Percentage of Possible Score 98% 86% 17% 98% 86% 12%
Rank based on percentage of Possible Score 1 2 3 1 2 3
Type A
NJ Scores VB Scores
1=highest ranking proposal; 2=next hightest; 3=lowest rank.
6.5 Attachment 4 - RFP Response Scoring Sheet
203
RFP Title: Below Market Rate Accessory Dwelling Unit Loan Program “Foster City Affordable ADU Program”
Firm Name: Habitat for Humanity Greater San Francisco
Primary Contact: Ashley Spooner-Choi, Director of Public Funding & Grants (415) 625-1015 | [email protected]
Mailing Address: 300 Montgomery Street, Suite 450, San Francisco, CA 94104 Contractor’s License Number: # 728481
Submission Date: February 20, 2026
6.5 Attachment 5 - Additional RFP Responses
204
Organization & Project Overview
Habitat for Humanity Greater San Francisco (HGSF), a 501(c)(3) organization and one of approximately 1,000+ registered U.S. affiliates of Habitat for Humanity International, was formed in August 2008 through the merger of Peninsula Habitat for Humanity and Habitat for Humanity San Francisco. Prior to the merger, Peninsula Habitat served the community since 1989, and Habitat San Francisco served the community since 1992. HGSF has provided homeownership opportunities for 306 local families in the past 35+ years and remains one of very few providers of affordable homeownership opportunities in Marin, San Francisco, and San Mateo counties serving households that earn below 80% of the Area Median Income (AMI). HGSF has built 286 homes in these three geographic areas with zero homes foreclosed.
Our affiliate takes a multi-disciplinary approach to homeownership, serving as the homebuilder, mortgage company, educator, and long-term partner. For over 35 years our teams have been developing new affordable housing opportunities, and more recently refurbishing existing homes to address low-income household displacement in our tri- County service area through our Home Preservation Program. This program focuses on repairs that address safety, accessibility, and health for homeowners on limited incomes.
From upgrading windows, to installing insulation to replacing stairs, this work helps keep longstanding homeowners in their homes.
Company Background and Experience
Habitat brings extensive experience in affordable housing finance, modular/manufactured housing development, construction lending, loan underwriting, and program administration.
We have served as a lender for Home Preservation (HP) loans in Marin, San Mateo, and San Francisco Counties. This work includes originating, underwriting, and servicing loans designed to support low-income homeowners and requires income‑qualification, compliance with State and local guidelines, and long‑term monitoring, servicing, and reporting requirements.
We have also provided home purchase mortgage lending for decades, including financing of manufactured units. Most recently, we closed home purchase loans in San Francisco and Bolinas. References for these or additional programs are available upon selection.
We repurchase deed-restricted units that we’ve previously built or acquired and resell them to income‑qualified households. This experience directly aligns with the needs of ADU financing programs.
6.5 Attachment 5 - Additional RFP Responses
205
Project Team and Key Personnel
The Home Preservation program is supported by a dedicated team of full-time professionals with extensive experience in affordable housing and residential rehabilitation. Jen Wilds, Chief Financial Officer and Chief Operating Officer, oversees the organization’s financial strategy and management. Jen has more than 25 years of financial and operations experience and has previously served in leadership roles at Hotel Tonight and CBS Interactive. Lidia Vieyra, our Senior Loan Officer, is responsible for underwriting loans, ensuring applicant eligibility, preparing loan documents, and closing loans.
Proposed Program
HGSF is interested in providing a Financing Only program, serving as the lender only. If approved, Foster City will grant HGSF $1,100,000 up front to be used to lend to homeowners and cover associated costs incurred by HGSF. HGSF will provide a 0% interest, deferred payment (deferred 20 years) loan of up to $125,000 to each borrower who will install an ADU for the purpose of renting to a low-income tenant for greater or equal to 10 years. The borrower will have an AMI no greater than 120%, with the renter’s AMI capped at 80%. This loan will cover part of the cost of an estimated $300,000+ unit.
Foster City will fund the balance of the ADU cost from other sources not tied to the loan the household gets from HGSF.
No Conflict of Interest & Acknowledgements
Conflict of Interest
There is no conflict of interest relative to the services to be provided pursuant to this RFP.
Habitat for Humanity Greater San Francisco, Inc. (“HHGSF”) and its leadership and staff are subject to legal requirements relating to conflicts of interest. Our Conflict of Interest Policy - adopted by our Board of Directors - is available upon request.
Acknowledgments
Habitat for Humanity Greater San Francisco will have a valid business license in Foster City during the term of the award.
Habitat for Humanity Greater San Francisco acknowledges of Attachment A that we can enter into the City’s standard Professional Services Agreement, including Exhibits A, B, and C.
Habitat for Humanity Greater San Francisco acknowledges additional requirements, including:
a. Maintain a filing system that meets all requirements of the funding sources.
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b. Participate in any program reviews or audits.
c. Maintain accounting of available project funds and process clients based on funding availability.
d. Provide data for any required quarterly and annual funding reports. e. Manage program workflow to ensure the timely completion of work. f. Confer with the City to review any proposed revisions of program guidelines as necessary.
Contract Exceptions
Habitat will furnish redlined Sample Agreement and Program Guidelines upon grant selection.
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Scope of Work
Task 1: Project Initiation and Project Management
Present a proposed schedule showing milestones and timelines for all phases of work over the contract period. For example: plan pre-review period, marketing, selection of applicants, loan issuance, construction of ADUs. ADUs may be built/installed concurrently or sequentially.
• At the start of the project, the consultant will participate in a kick-off meeting with City staff to review objectives, roles, communication procedures, and reporting expectations.
• The Contractor will work with staff to refine and confirm the project timeline. • Ongoing project management responsibilities include regular check-ins, progress updates, coordination, budget tracking, and responsive communication.
Habitat agrees to the deliverables mentioned in the above bullets. Below is a high-level schedule showing milestones and timelines.
Milestone Completion Date
Work Commences July 1, 2026
Program Set Up December 31, 2026
Originate 2 Loans July 1, 2027
Originate 3 Loans July 1, 2028
Originate 3 Loans June 30, 2029
Contract Expiration June 30, 2029
Task 2: Program Administration and Homeowner Intake
To the extent applicable, outline the firm’s approach to homeowner intake, feasibility review, and, as applicable to the program type, permitting, installation, project communication, and support. Identify platforms or systems used to manage applications and communications.
• The Contractor will manage all Program administration tasks, including homeowner intake, and selection of eligible applicants on a first-come, first-served basis. • The Contractor shall schedule feasibility consultations, prepare feasibility reports, and assist homeowners in selecting an eligible ADU model, as applicable.
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• The Contractor is responsible for developing and maintaining all loan applications, coordinating documentation, and managing the applicant process from initial inquiry through project completion.
Habitat will be responsible for applicant selection and approval, with marketing support from Foster City. In addition to the above bullets, HGSF will provide an application that describes income eligibility requirements and lists the documents necessary to prove household income. Typically, to be considered for a Habitat program, an applicant must submit employment income for all eligible household members using one or more of the following methods: year-to-date income from paystubs; two years of federal tax returns; YTD profit and loss statements if self-employed; rental income (as reported or not reported on tax returns); alimony or child support; payments in lieu of earnings, such as unemployment compensation; government income award letters; and zero income affidavits. The applicant will also submit statements for assets, including savings and checking accounts, stocks, bonds, and certificates of deposit. HGSF’s Lending Services department will review all documents to verify sources of income and use a standard income calculation worksheet to ensure that the maximum household income is at or below 80% of AMI for the potential renter and 120% for the borrower applicant.
Task 3: Loan Origination, Underwriting, and Servicing
Explain how private financing and City-funded loans will be administered, including underwriting criteria, loan servicing, documentation, and management of the loan re-use account.
• The Contractor will originate, underwrite, and administer no-interest loans. • The Contractor will use funds received from City pursuant to the Contractor’s agreement with City to fund the loans.
• The Contractor will provide or secure supplemental private financing as needed for each project and must manage the loan documentation and processing in accordance with Program guidelines.
• The Contractor will establish and manage a loan re-use account, collect payments from homeowners, enforce repayment using commercially reasonable practices up to and including foreclosure, and track repayment events. • At the conclusion of an initial three-year term, during which at least eight (8) Affordable ADU loans will be made, the City will have the option to renew the
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parties’ existing agreement for an additional three-year term, during which at least an additional eight (8) ADU loans would be made.
Habitat agrees to the above loan origination, underwriting, and servicing terms. Please note, “The Contractor will provide or secure supplemental private financing as needed for each project” has been struck from the third bullet. Foster City will be responsible for securing supplemental funding.
Task 4: Affordability Compliance and Reporting
Explain how the firm will ensure tenant income qualification, rent-limit compliance, annual reporting, and adherence to BMR Guidelines, or if the proposal includes a request for compliance services to be provided separately by the City or its designated agent . • The Contractor will either
o a) ensure that all homeowners and ADU projects comply with the Program’s requirements regarding eligibility, affordability, occupancy, and rental restrictions and include a cost for this service in their proposal, or
o b) request that the City provide compliance services. • The Contractor will also support the City’s compliance monitoring process by maintaining accurate records, providing annual reporting, and assisting with income verification and rental-rate compliance.
• The Contractor must coordinate with City staff to address any issues of non- compliance and enforcement of the Program’s affordability requirements.
Habitat agrees to the information outlined above.
Task 5: Reporting and Records Management
Explain the records management approach and communication with City staff. • The Contractor will maintain accurate and complete records of all Program activities, including loan servicing, homeowner eligibility determinations, project budgets, construction schedules, and compliance documentation. • The Contractor will provide the City with annual reports summarizing Program activity and loan administration.
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• All reporting must comply with local, state, and federal regulatory requirements, as well as the City’s contract terms.
Habitat agrees to the information outlined above.
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Cost Proposal
CATEGORY DESCRIPTION AMOUNT PER LOAN TOTAL – 8 Loans
Loan Funds Anticipating ADU to cost
at least $300K
Minimum of $75,000 and
Maximum of $125,000
$1,000,000
($125,000 per
loan)
Administration Outreach, marketing,
project management
5% or a maximum of
$6,250 per loan $50,000
Lending,
Servicing, & Loan
Administration
Underwriting, loan
origination, and servicing
5% or a maximum of
$6,250per loan $50,000
Total Contract Amount $1,100,000
Interest Rates & Terms
0% interest and deferred payment for 20 years
Costs Charged to the Homeowner
Homeowners would only incur a loan fee once the loan is repaid (currently a $215 recording fee, a $45 reconveyance fee, and a $30 demand statement fee for each loan) ADU Pricing Structure
N/A
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FY2024 Habitat for Humanity Greater San Francisco
Annual Report
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Hello supporters,
When people ask why support Habitat for
Humanity Greater San Francisco (Habitat
GSF), our answer is simple: because affordable
housing is the number one challenge in the
Bay Area and Habitat’s unique affordable
homeownership model transforms families’
lives. This isn’t just about homes—it’s about
building communities where families can thrive,
and that benefits everyone. Homeownership
creates a strong ripple effect, positively
impacting everything from educational
outcomes for children to increased public
safety. When people own their homes, they
invest in the success of their neighborhoods.
They care and they matter in fulfilling the vision
of resiliant, strong and vibrant communities.
Becoming a homeowner should not be just a
dream—it’s something people are willing to
work hard for, something they believe they
deserve. When we have over 500 applicants
for eight homes, our answer isn’t to stop—
it’s that we need to do more, and we need
to do it now. This urgency drives us, and it’s
the reason we push forward, even when the
challenge feels immense. It takes time, effort,
and a community-wide commitment to build
and achieve this reality. At Habitat GSF, we are
financially strong and strategically positioned,
with a robust pipeline of new homes and
preservation projects to drive the impactful,
sustainable change our community needs.
At Habitat GSF, we see the impact of this
change every day. Affordable homeownership
transforms lives: more kids go to college,
families build savings, and people become
more active and engaged in their communities.
It’s not just about building homes—it’s about
creating opportunities for people to take pride
in their accomplishments, and that sense of
pride radiates throughout the community.
Of the thousands of volunteers who come
through our doors each year, many share
the same feeling: “I’m doing something that
matters.” That’s what Habitat is all about—
bringing people together to make a lasting
impact. Whether you volunteer your time,
donate, or advocate for change, you are a part
of this movement to address the Bay Area’s
housing crisis. Together, we can move beyond
recognizing the problem and work toward real
solutions, one home at a time.
Thank you for being a vital part of this work.
In community,
Maureen Sedonaen
CEO, Habitat for Humanity
Greater San Francisco
Dameon Philpotts
Board Chair, Habitat for Humanity
Greater San Francisco
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This Past Year
Growing Our Impact Welcome Home
13 families
moved in
≈11,000
volunteer hours
Community ImpactStemming Displacement
26 homes preserved
108 homes
prepping for construction
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Financial Performance
Net Assets $30,928,020
Revenue
Public
Support
Expenses
* Includes: gain on disposal of property and equipment, and other income. ** Includes: bequests, faith organizations and other non-profit organizations.
Public Support $12,178,751
Sales of Homes $8,671,812
Land Donation $5,000,000
Contributions & Grants $1,842,692
Mortgage Revenue $584,483
Other* $338,134
Government Grants $5,625,195
Individuals $3,512,681
Foundations $1,704,717
Corporations $1,154,120
Other Support** $182,038
Programs $22,904,499
Administration $2,880,102
Fundraising $2,256,091
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Forever Affordable Homes
Our affordable homeownership mod
el is unique in that our homes are
permanently affordable, meaning once
the home is built it will remain affordable
for future families. When a homeowner
is ready to move, we purchase the home
back and sell it for an affordable price
to a new family. We celebrated two such
‘resale’ homeowners this year, one in
Redwood City and one in East Palo Alto.
Unprecedented Scale
In early 2024, we closed escrow on a
13.6-acre property in Novato that was
generously donated by Pacific Gas and
Electric Company. The land transfer
marked a major milestone in making the
largest 100% affordable homeownership
development in the state a reality.
Featuring 80 homes set amongst 10 acres
of open space and communal areas, the
project will provide much-needed housing
for more than 300 low- and moderate-
income individuals.
Advocating for Change
In early 2024, we closed escrow on a
13.6-acre property in Novato that was
generously donated by Pacific Gas and
Electric Company. The land transfer
marked a major milestone in making the
largest 100% affordable homeownership
development in the state a reality.
Featuring 80 homes set amongst 10 acres
of open space and communal areas, the
project will provide much-needed housing
for more than 300 low- and moderate-
income individuals.
Expanding Our Impact
In the Bay Area, over 40% of lower-
income households risk displacement. To
achieve greater impact with our Home
Preservation Program, we have focused
resources and expanded our remit. This
enables us to help more homeowners and
perform a broader scope of repairs that
impact those with the greatest need.
Partnering with local municipalities, we
have now rolled out the program in SF
County, Marin County, Redwood City, Daly
City, Belle Haven and more to come!
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Championing Affordable Homebuilding
Looking ahead we are crafting an ambitious agenda to push for more resources for affordable housing production both locally, statewide and on a national scale with a federal housing accelerator fund. This work will push forward
a bi-partisan solution to build more starter homes and
responds to the much-needed demand for these homes in
every community.
Preserving Affordable Homeownership
In addition to expanding our Home Preservation into more communities in our region, we are also expanding our remit to meet the need. In the year ahead, we are embarking on a partnership in San Mateo County to provide critical rehabs or replacement for manufactured homes. These homes are
a naturally occuring form of affordable housing, by making repairs or replacements, families will be able to remain in their communities, and vitally, do so in healthier and safer homes.
Forever Affordable Homes
There are a total of four resales currently in our pipeline for fiscal year 2025. That means four more families who can experience the joy and stability of homeownership.
Plus, more families who are ready to move onto market
rate homes, after getting their foot on the ladder through Habitat homeownership. These forever affordable homes
show us the power of access to homeownership.
More Affordable Homeownership in Bolinas
Our latest development in partnership with Bolinas
Community Land Trust (BCLT) is on Wharf Road inthe
heart of the town of Bolinas. The development will include two buildings with six three-bedroom townhomes, two
two-bedroom townhomes. In addition, BCLT will have their permanent office onsite within the approx. 1,500 square feet of ground floor commercial space.
Largest 100% Affordable Homeownership
Development in CA
Habitat GSF continues to make progress toward our largest 100% affordable homeownership project in Novato. We
are currently finalizing design plans and deepening our community outreach and partnerships across the county.
Construction is slated to start in the first half of 2025.
One Day. Day One
We have ambitious goals for the year ahead and a strong pipeline of projects to support this growth. Many of the homeowners we speak with talk about how they wished for the security and stability of homeownership, how it was something they hoped they could work towards one day. Together with our supporters, we are determined to expand our efforts, so we can turn one day into today.
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In the Bay Area in particular, the need for housing is great yet the barriers to getting new homes built can be overwhelming, costs alone can be an insurmountable factor. When faced with such headwinds, we pivot and innovate to continuously achieve mission impact. Over the past year we have invested in two partnerships which help us continue our affordable homeownership mission despite the unique red tape we are faced with.
Canal Alliance is a long-standing San Rafael-based nonprofit dedicated to the advancement of Latino immigrants and their families. In the spring of 2024, we announced a formal strategic partnership with them aimed at creating more affordable homeownership opportunities for first-time, low-income families in Marin County.
This partnership comes at a critical time as the area continues to grapple with housing disparities and affordability challenges. Latino families account for only 5% of the homes owned in Marin County, and in San Rafael where the majority of Latino families in Marin County live, housing expenses exceed the national average by 145%. The high cost of housing coupled with an extremely limited housing stock is displacing working families at an alarming rate. The majority of Marin’s workforce now live outside county lines.
Our partnership with Bolinas Community Land Trust is unique, we are the only affiliate in the state currently undertaking such a partnership.
It is one way in which we are seeking out innovative approaches to bringing more affordable homeownership to our region, in ways that fit each community. Currently, the cost of housing in Bolinas exceeds the national average by 176%. To help combat this, through the partnership with BCLT, we have created four new affordable homes for ownership in the town of Bolinas, with another eight in our pipeline.
Innovating Around Constraints
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“What I try to create
for my kids is that
sense of stability and
that sense of home and
a place they can come
back to. Seeing them
thrive and flourish is
really all I’m hoping
they can do.”
- Kristen, homeowner
Creating Legacy
Along with her two middle-school aged sons, both fifth- generation San Franciscans, Kristen moved into her new
home in early 2024. Becoming a first-time homeowner was special, as Kristen put it, “It’s the first. It has my full name on it. It’s all mine. It’s that feeling of pride.” The theme of pride of ownership is a common one that comes up when
we talk with the homeowners we partner with. Whether
it’s feeling more comfortable hosting family, having friends over or simply decorating to make your home feel like your own. These seemingly small acts, that many of us may take for granted, can have meaningful and long-lasting impacts.
For Kristen, who moved around as a child and did not
have the security of a home that her family owned, she is trying to drive more stability for her family. As she explains it, “We moved around so much [growing up] that what I
try to create for my kids is that sense of stability and that sense of home and a place they can come back to. Seeing them thrive and flourish is really all I’m hoping they can do.”
Kristen is helping create her community in Diamond
Heights with her Habitat GSF neighbors, as well as beyond, through her volunteering. As she explains, “I try to instill that we have to give back because we’re very lucky in
life. My happy is to see other people happy too.” Kristen explained that within their development of eight homes a true community has developed, where the homeowners
look out for one another and kids can get together to play. “I’m hoping that other people can get into a program such as mine and be able to have this feeling of comfort, home and community.”
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Support our work:
habitatgsf.org/donate
300 Montgomery Street Suite 450
San Francisco, CA 94104
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Habitat for Humanity Greater San Francisco, Inc.
and Subsidiary
Financial Statements
and Single Audit Reports and Schedules
June 30, 2025
(With Comparative Totals for 2024)
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TABLE OF CONTENTS
Page No.
Independent Auditor's Report 1 - 3
Statement of Financial Position 4 - 5
Statement of Activities 6
Statement of Functional Expenses 7
Statement of Cash Flows 8 - 9
Notes to Financial Statements 10 - 32
Single Audit Reports and Schedules
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 34 - 35 Independent Auditor's Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 36 - 38 Schedule of Expenditures of Federal Awards 39
Notes to Schedule of Expenditures of Federal Awards 40
Schedule of Findings and Questioned Costs 41 - 42
Summary Schedule of Prior Audit Findings 43
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INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Opinion
We have audited the accompanying financial statements of Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the ''Organization''), which comprise the statement of financial position as of June 30, 2025, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the financial statements.
In our opinion, the financial statements r eferred to above present f airly, in all material respects, the financial position o f Habitat for Humanity Greater San Francisco, Inc. and Subsidiary a s of June 30, 2025, and the changes in its net assets and its cash flows f or the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Habitat for Humanity Greater San Francisco, Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements i n accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements t hat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Habitat for Humanity Greater San Francisco, Inc.'s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
1 6.5
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Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may i nvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. M isstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Habitat for Humanity Greater San Francisco, Inc.'s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Habitat for Humanity Greater San Francisco, Inc.'s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole.
The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. T he information has been subjected to the auditing procedures applied in the audit of the financial statements a nd certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. 2 6.5
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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 1, 2025, on our consideration of the Organization's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards i n considering the Organization's internal control over financial reporting and compliance.
Report on Summarized Comparative Information
We have previously audited Habitat for Humanity Greater San Francisco, Inc.'s 2024 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated November 21, 2024. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2024, is consistent, in all material respects, with the audited financial statements from which it has been derived.
San Jose, California
December 1, 2025
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Financial Position
June 30, 2025
(With Comparative Totals for 2024)
2025 2024
ASSETS
Current assets
Cash and cash equivalents $ 11,625,024 $ 12,438,365
Restricted cash 2,264,037 5,209,031
Accounts receivable 96,902 73,500
Current portion of grants and contributions receivable 3,601,319 2,560,660 Current portion of mortgage notes receivable 1,390,078 1,354,792 Inventory of homes 1,396,661 1,489,959
Prepaid expenses and other current assets 22,150 169,376 Total current assets 20,396,171 23,295,683
Other assets
Property and equipment, net 85,296 154,756
Grants and contributions receivable, net 1,123,753 326,209 Mortgage notes receivable, net 10,203,512 9,831,699
Construction in progress 12,403,854 8,852,304
Deposits 34,375 34,375
Operating lease right-of-use assets 4,866,702 5,622,810 Total other assets 28,717,492 24,822,153
Total assets $ 49,113,663 $ 48,117,836
The accompanying notes are an integral part of these financial statements. 4 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Financial Position
June 30, 2025
(With Comparative Totals for 2024)
2025 2024
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable $ 720,944 $ 768,801
Accrued liabilities 687,130 649,689
Unearned revenue 9,839 5,000
Current portion of notes payable 400,096 379,856
Current portion of operating lease liabilities 750,580 711,083 Total current liabilities 2,568,589 2,514,429
Long-term liabilities
Line of credit 1,100,000 -
Notes payable, net of current portion and unamortized discount 6,994,836 7,428,427 Refundable advances - governmental grants 2,757,919 2,097,696 Operating lease liabilities, net of current 4,392,683 5,149,264 Total long-term liabilities 15,245,438 14,675,387
Total liabilities 17,814,027 17,189,816
Net assets
Without donor restrictions
Undesignated 12,722,535 13,524,661
Board designated operating reserve 5,311,858 5,456,746
Total without donor restrictions 18,034,393 18,981,407
With donor restrictions 13,265,243 11,946,613
Total net assets 31,299,636 30,928,020
Total liabilities and net assets $ 49,113,663 $ 48,117,836 The accompanying notes are an integral part of these financial statements. 5 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Activities
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
Without
Donor
Restrictions
With Donor
Restrictions
2025
Total
2024
Total
Support, revenues, and gains
Support
Grants and contributions $ 5,410,076 $ 7,563,670 $ 12,973,746 $ 11,646,946 Special events 454,071 15,000 469,071 531,805
Contribution from discount on note payable
issued (Note 9) - - - 1,656,992
In-kind contributions 147,797 197,063 344,860 5,185,700 Net assets released from restriction 6,457,103 (6,457,103) - - Total support 12,469,047 1,318,630 13,787,677 19,021,443 Mortgage discount amortization 666,317 - 666,317 584,483 Sale of homes 2,651,964 - 2,651,964 8,671,812
Other income 781,471 - 781,471 338,134
Total support, revenues, and gains 16,568,799 1,318,630 17,887,429 28,615,872 Functional expenses
Program services
Housing Development 6,638,557 - 6,638,557 17,897,224
Homeowner Development, Volunteers,
Home Preservation 5,148,069 - 5,148,069 5,007,275
Total program services 11,786,626 - 11,786,626 22,904,499 Support services
General and administrative 3,150,326 - 3,150,326 2,880,102 Fundraising 2,578,861 - 2,578,861 2,256,091
Total support services 5,729,187 - 5,729,187 5,136,193
Total functional expenses 17,515,813 - 17,515,813 28,040,692 Change in net assets (947,014) 1,318,630 371,616 575,180 Net assets, beginning of year 18,981,407 11,946,613 30,928,020 30,352,840 Net assets, end of year $ 18,034,393 $ 13,265,243 $ 31,299,636 $ 30,928,020 The accompanying notes are an integral part of these financial statements. 6 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Functional Expenses
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
Housing
Development
Homeowner
Development,
Volunteers,
Home
Preservation
Total Program
Services
General and
Administrative Fundraising
Total Support
Services
2025
Total
2024
Total
Direct housing expenses
Cost of sales - homes $ 1,965,950 $ - $ 1,965,950 $ - $ - $ - $ 1,965,950 $ 12,688,913 Total direct housing expenses 1,965,950 - 1,965,950 - - - 1,965,950 12,688,913 Salaries and benefits
Salaries and wages 1,211,910 2,484,938 3,696,848 1,623,691 756,408 2,380,099 6,076,947 6,144,033 Employee benefits 133,247 309,325 442,572 210,692 76,616 287,308 729,880 722,287 Payroll taxes 87,079 194,979 282,058 116,396 57,448 173,844 455,902 457,674 Workers' compensation insurance 6,511 37,886 44,397 5,124 2,789 7,913 52,310 66,729 Total salaries and benefits 1,438,747 3,027,128 4,465,875 1,955,903 893,261 2,849,164 7,315,039 7,390,723 Professional services 39,008 71,067 110,075 517,946 871,099 1,389,045 1,499,120 1,051,771 Construction project expenses 33,213 1,378,059 1,411,272 - 5,409 5,409 1,416,681 1,388,820 Discount on mortgage issued 1,199,307 - 1,199,307 - - - 1,199,307 2,914,875 Rent 191,440 342,286 533,726 219,511 138,685 358,196 891,922 836,171 Habitat network dues and fees 561,238 3,000 564,238 5,500 1,500 7,000 571,238 12,000 Interest 349,960 - 349,960 29,912 - 29,912 379,872 166,166 Tithe 225,000 - 225,000 - - - 225,000 225,000
Communications 44,651 60,523 105,174 145,282 44,280 189,562 294,736 224,402 Computer software/hardware 26,386 82,539 108,925 77,150 51,605 128,755 237,680 179,855 Bank fees 65 33,308 33,373 18,427 138,762 157,189 190,562 156,351 Office expenses 32,087 60,665 92,752 53,918 19,692 73,610 166,362 132,672 Special events - 45 45 1,241 245,825 247,066 247,111 216,425 Postage and printing 956 (5,053) (4,097) 5,257 122,368 127,625 123,528 123,970 Depreciation 20,085 16,902 36,987 26,781 10,042 36,823 73,810 85,489 Insurance 20,502 24,258 44,760 17,485 8,230 25,715 70,475 67,063 Travel and training 42,931 25,480 68,411 45,566 4,621 50,187 118,598 58,677 Discontinued construction expense 433,362 - 433,362 - - - 433,362 - Taxes and licenses 10,459 11,023 21,482 10,530 5,585 16,115 37,597 18,657 Advertising - - - 16,591 - 16,591 16,591 56,564
Equipment rental and maintenance 3,210 3,326 6,536 2,611 1,619 4,230 10,766 13,022 Promotions and supplies - 13,513 13,513 715 16,278 16,993 30,506 33,106 $ 6,638,557 $ 5,148,069 $ 11,786,626 $ 3,150,326 $ 2,578,861 $ 5,729,187 $ 17,515,813 $ 28,040,692 The accompanying notes are an integral part of these financial statements. 7 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Cash Flows
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
2025 2024
Cash flows from operating activities
Change in net assets $ 371,616 $ 575,180
Adjustments to reconcile change in net assets to net cash used in operating activities
Depreciation 73,810 85,489
Amortization of operating leases right-of-use asset 756,108 736,866 Home sales revenue through issuance of home mortgage notes (2,014,268) (5,259,608) Home sales revenue through refundable advances reconveyed to homebuyer mortgages fund (637,696) (2,923,204)
Home sales revenue through reconveyed notes payable - (489,000) Amortization of mortgage notes receivable discount (666,317) (584,483) Discount on mortgage notes issued 1,199,307 2,914,875
Contribution from discount on note payable issued - (1,656,992) Amortization of notes payable discount 352,052 136,374
Donated land - (5,000,000)
Changes in operating assets and liabilities
Accounts receivable (23,402) (3,799)
Grants and contributions receivable, net (1,838,203) (2,789,014) Inventory of homes 93,298 (815,201)
Construction in progress (3,551,550) 8,698,987
Prepaid expenses and other current assets 147,226 (48,138) Accounts payable (47,857) 111,748
Accrued liabilities 31,440 (87,466)
Unearned revenue 4,839 (45,520)
Refundable advances 328,663 2,097,696
Operating lease liabilities (711,083) (664,458)
Net cash used in operating activities (6,132,017) (5,009,668) Cash flows from investing activities
Purchase of property and equipment (4,350) (7,394)
Payments received on mortgage notes receivable 1,405,739 1,286,796 Net cash provided by investing activities 1,401,389 1,279,402 Cash flows from financing activities
Refundable advances converted to home sale revenue 600,000 2,923,204 Payments on notes payable (727,707) (637,891)
Proceeds from notes payable - 3,082,911
Proceeds from line of credit 1,100,000 -
Net cash provided by financing activities 972,293 5,368,224 Net increase (decrease) in cash (3,758,335) 1,637,958
Cash, cash equivalents and restricted cash, beginning of year 17,647,396 16,009,438 Cash, cash equivalents and restricted cash, end of year $ 13,889,061 $ 17,647,396 The accompanying notes are an integral part of these financial statements. 8 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Statement of Cash Flows
For the Year Ended June 30, 2025
(With Comparative Totals for 2024)
2025 2024
Cash, cash equivalents and restricted cash consisted of the following:
Cash and cash equivalents $ 11,625,024 $ 12,438,365
Restricted cash 2,264,037 5,209,031
$ 13,889,061 $ 17,647,396
Supplemental schedule of noncash investing and financing activities Mortgage notes receivable assumed under loan servicing agreement $ 341,189 $ - The accompanying notes are an integral part of these financial statements. 9 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
1. ORGANIZATION
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the "Organization" or "Habitat"), is a nonprofit public benefit corporation incorporated in California in 1988 (originally as Peninsula Habitat for Humanity). E ffective August 1, 2008, Habitat for Humanity San Francisco merged into Peninsula Habitat for Humanity and the combined entity was named Habitat for Humanity Greater San Francisco, Inc. The new Organization serves San Francisco, San Mateo, and Marin Counties. T he Organization is affiliated with Habitat for Humanity International, Inc.
HFHGSF Funding Company, LLC (the "Company"), a limited liability company incorporated in California in July 2019, is a wholly-owned subsidiary of the Organization. T he Company acquired from the Organization all of its rights, title and interest in 9 mortgage notes in May 2019, 15 mortgage notes in August 2020, 20 mortgage notes in December 2021, 3 mortgage notes in May 2022, 7 mortgage notes in March 2023, and 7 mortgage notes in June 2024. T he Company pledged these mortgage notes as collateral to secure 6 notes payable to the Northern Trust Company (see Note 9).
The Organization partners with working families and the community to develop affordable homes for first-time home ownership. The Organization builds homes by engaging volunteers to work alongside carefully selected candidate families. T he candidate families invest up to approximately 500 hours of "sweat equity" in the home in lieu of a down payment. T he Organization provides financing for the homes at zero percent interest.
The following is a brief description of the Organization's program services:
Housing development
Land acquisition - Fosters relationships with Marin, San Francisco and San Mateo Counties and their municipalities; locates and acquires land for home construction; obtains funding from multiple affordable housing sources.
Construction - B uilds and rehabilitates homes; trains, organizes, and supervises on-site volunteers.
Tithe - C ontributes a portion of undesignated donated funds annually to Habitat for Humanity International, Inc. for the construction of homes outside the United States.
Programs
Homeowner development - Selects, qualifies, and mentors candidate families, and provides them financial and home ownership education; manages long-term homeowner relationships.
Volunteer services - R ecruits, trains, schedules, and supports volunteers for work at the construction sites, Home Preservation projects, in the office, and on committees. 10 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
1. ORGANIZATION (continued)
Programs (continued)
Home Preservation ("HP") - Delivers critical home repairs and provides zero-to-low interest rate home repair loans to improve health, safety, and well-being of residents in San Francisco, Menlo Park, East Palo Alto, Daly City, and the County of Marin.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting and financial statement presentation The Organization's financial statements are presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") on an accrual basis.
Consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.
The Organization reports its financial position and operating activities in two classes of net assets:
Net assets without donor restrictions - i nclude those assets that are not subject to donor- imposed restrictions and can be used for the general operations of the Organization. T he Board of Directors has discretionary control in carrying out the operations of the Organization.
Net assets with donor restrictions - include those assets which are subject to donor restriction and for which the applicable restriction was not met as of the year end of the current reporting period. O ther donor-imposed restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity. T here were no net assets restricted in perpetuity as of June 30, 2025 and 2024.
Basis of consolidation
The consolidated financial statements include the accounts of the Organization a nd its wholly- owned subsidiary - HFHGSF Funding Company, LLC. A ll significant intercompany balances and transactions have been eliminated.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Accordingly, actual results could differ from those estimates. 11 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and cash equivalents
Cash and cash equivalents include investments with an original maturity of three months or less and exclude donor-restricted receipts and amounts designated for long-term purposes. T he Organization considers all highly liquid investments readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, such as Treasury bills, as cash equivalents.
The Organization m aintains its cash in bank deposit accounts which, at times, may e xceed federally insured limits. T he Organization h as not experienced any losses in such accounts.
Management believes it is not exposed to any significant risk on cash accounts.
Restricted cash
Restricted cash consists of cash held for the Home Repair program and for mortgage assistance grants for future homeowners.
Fair value measurements
The Organization r eports certain assets and liabilities at fair value in the financial statements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Accounting standards set a framework for measuring fair value using a three tier hierarchy based on observable and non-observable inputs. Observable inputs consist of data obtained from independent sources. Non-observable inputs reflect industry assumptions. These two types of inputs are used to create the fair value hierarchy, giving preference to observable inputs.
The three-tier hierarchy categorizes the inputs as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and market-corroborated inputs.
Level 3: Unobservable inputs for the asset or liability. I n these situations, the Organization develops inputs using the best information available in the circumstances. 12 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Inventory of homes
The Organization c lassifies inventory as the following: completed new construction homes; homes purchased for resale program in which rehabilitation is substantially complete; and Habitat built homes that are bought back from the homeowner (resale homes). C ompleted new construction homes and purchased or repurchased homes are stated at the lower of cost or market using the specific identification method. Habitat resale homes are stated at repurchase cost (the original sales price plus appreciation).
Property and equipment
Furniture, equipment, leasehold improvements, and vehicles are carried at cost or, if donated, at their fair value at the date of donation. The Organization capitalizes all acquisitions of property and equipment in excess of $3,000. D epreciation is provided on a straight-line basis over the estimated useful lives of the respective assets, which range from three to ten years.
Impairment of long-lived assets
The Organization reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of the property and equipment may n ot be recoverable. Recoverability is measured by a comparison of the carrying amount of the asset to future net cash flows, undiscounted and without interest, expected to be generated by the asset. If assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For the years ended June 30, 2025 and 2024, there were no events or changes in circumstances indicating that the carrying amount of the property and equipment may not be recoverable.
Construction in progress
Construction in progress is stated at the lower of cost or market using the specific identification method. C onstruction in progress consists of new home building projects under construction, purchased or repurchased homes undergoing rehabilitation, pre-development costs of future projects, and personnel costs (see Note 7).
Mortgage notes receivable
The Organization records home sale mortgages at the gross amount of payments to be received over the lives of the mortgages. The mortgage notes receivable bear no interest and, accordingly, the notes are discounted to reflect imputed interest over the lives of the mortgages. The discount rates used to impute interest are based on the Freddie Mac 30-year fixed-rate mortgage rates for the years ended June 30, 2025 and 2024. Prior to July 1, 2018, the rates were based on estimated interest rates by Habitat for Humanity International.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Mortgage notes receivable (continued)
Mortgage notes receivable are reported net of unamortized discount. Prior to July 1, 2018, the amortization was calculated using the effective interest method; from July 1, 2018, forward, the straight-line method was used. Management estimates that the difference between amortization calculated using the straight-line method and amortization calculated using the effective interest method is not material. D iscount amortization is recognized as revenue on the statement of activities.
The Organization estimates an allowance for credit losses for uncollectible mortgage notes receivable. The estimation of the allowance is based on an analysis of historical loss experience, current receivables aging, and management's assessment of current conditions and reasonable and supportable expectation of future conditions, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. M anagement does not believe an allowance for credit losses is necessary because the mortgage notes receivable are secured by the properties.
CalHome deferred loans
On February 28, 2022, the Organization entered into an agreement with California Department of Housing and Community Development ("HCD"), through its CalHome program, to provide Owner-Occupied Rehabilitation Assistance ("OOR") to San Francisco homeowners which consist of 0% interest, 30-year deferred loans to households at or below 80 percent of AMI or at or below 120 percent of AMI for households who were victims of disaster in return for home repairs performed by the organization. The 0% interest, 30-year deferred loan requires no periodic interest payment and the unpaid principal balance is due 30 years from the date of the note.
Per Accounting Standards Codification ("ASC") 450-30, Contingencies, "a contingency that might result in a gain usually should not be reflected in the financial statements because to do so might be to recognize revenue before its realization." S ince a note receivable payment to be received 30 years from the date of the note is highly uncertain, management decides to adopt the conservative approach of ASC 450 to record the home repair revenue and associated notes receivable in the 30th year when principal is due or the year when cash payment is first received, whichever date is earlier.
Although the Organization has not recorded home repair revenue and associated notes receivable in its financial statements, the Organization tracks all such notes receivable via a third-party loan servicer. As of June 30, 2025, these 0% interest, 30-year deferred loans have a total unpaid principal balance of $641,583.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Grants and contributions receivable
Grants and contributions receivable that are expected to be collected in more than one year are recorded at fair value, which is measured as the present value of their future cash flows. The discounts on those amounts are computed using risk-adjusted interest rates applicable to the years in which the promises are received. A mortization of the discounts is included in grants and contributions income.
The Organization evaluates grants and contributions receivable for collectability based upon economic situation, historical collection information and any relevant factors. No allowance for doubtful accounts was considered necessary for the years ended June 30, 2025 and 2024 because the Organization believed all grants and contributions receivable to be fully collectible.
Grants and contributions
Grants and contributions are recorded at their fair value and are recognized as revenue when the donor makes an unconditional promise to give to the Organization. Donor-restricted grants and contributions are reported as increases in net assets with donor restrictions depending on the nature of the restrictions. W hen a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statement of activities as net assets released from restriction. Net assets released from restriction represent the satisfaction of donor restrictions or the passage of time. Contributions restricted for the purchase of long- lived assets are reported as without donor restriction when the assets are placed into service, unless continuing use restrictions apply.
Conditional promises to give with a measurable performance or other barrier and a right of return are not recognized until the conditions on which they depend are substantially met. A mounts received prior to incurring qualifying expenditures are recorded as refundable advances in the statement of financial position.
In-kind contributions
The Organization records various types of in-kind contributions, including professional services, materials and properties. C ontributed services and materials are recorded at fair value. T he Organization also receives donated services that do not require specific expertise, but which are nonetheless central to the Organization's operations, which are not reflected in the financial statements. Brochures, items for silent auctions at events, or other program-related resources may also be considered a contribution if there is a direct connection to the project or event being funded.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Home sales
Home sales revenue is recognized when a home is sold. At the time of the home sale, certain government refundable advances are transferred to the buyers and forgiven over varying time periods. The Organization r ecognizes the revenue from the sale of homes upon the transfer of these liabilities to the homeowners.
Discount on notes payable
U.S. GAAP requires that notes payable bearing no interest are discounted to reflect imputed interest over the lives of the loan if the financial statement impact is material. The Organization records the discount as a contribution in the statement of activities when the notes are issued. The unamortized discount is recorded against the balance of notes payable and amortized over the term of the notes. Notes payable to governmental entities are exempt from the imputed interest requirement.
Advertising
The Organization's policy is to expense advertising costs as the costs are incurred. Advertising expenses for the years ended June 30, 2025 and 2024, were $16,591 and $56,564, respectively.
Leases
The Organization determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities on the statement of financial position. Finance leases are included in property and equipment and other long-term liabilities on the statement of financial position.
ROU assets represent the Organization's right to use an underlying asset for the lease term and lease liabilities represent the Organization's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Organization's lease does not provide an implicit rate, the Organization uses a risk-free rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Organization has elected to recognize ROU and lease liabilities for short-term leases instead of recording them in a manner similar to operating leases under legacy leasing guidelines. A short-term lease is one with a maximum lease term of 12 months or fewer and does not include a purchase option that the lessee is reasonably certain to exercise. 16 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Expense allocation
The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities and the statement of functional expenses.
Accordingly, certain costs have been allocated among the programs and support services benefited based on a time study analysis and other reasonable methods.
Income taxes
The Organization i s exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. In addition, the Organization qualifies for the charitable contribution deduction under Section 170(b)(1)(A) and has been classified as an organization other than a private foundation under Section 509(a)(2). T he Organization i s also exempt from state income tax under Section 23701d of the California Revenue and Taxation Code.
No income tax provision has been included in the financial statements for HFHGSF Funding Company, LLC which is generally considered a disregarded entity. The income and loss of this company is included in the tax returns of the Organization. Only the annual California limited liability company minimum tax and the annual fee appear as expense in the consolidated financial statements.
U.S. GAAP provides accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain. M anagement has considered its tax positions and believes that all of the positions taken by the Organization in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination.
Reclassifications
Certain reclassifications have been made to the consolidated financial statements for the year ended June 30, 2024 f or comparative purposes to conform with the presentation in the current year consolidated financial statements.
Subsequent events
The Organization h as evaluated subsequent events through December 1, 2025, the date the financial statements were available to be issued. See Note 19 for subsequent events that have a material impact on the presentation of the Organization's consolidated financial statements. 17 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
3. MORTGAGE NOTES RECEIVABLE
As of June 30, 2025, the Organization holds 132 mortgage notes receivable, totaling $24,564,291 at gross value with maturities of 38 to 480 months. The notes are non-interest bearing mortgages, payable in equal monthly installments, and are secured by deeds of trust on the properties.
According to an agreement with Habitat for Humanity International, Inc., the majority of collections on these notes receivable is to be used to construct additional homes. New notes were discounted at a rate of 6.77% and 6.86% for mortgages issued during the year ended June 30, 2025 a nd 2024, respectively using the straight-line method to amortize unamortized discount over the lives of the mortgages. Mortgages are reported net of unamortized discount.
The Organization became the operator of a residential rehabilitation loan program for the County of Marin in 2022. As part of that program, the Organization assumed 134 home repair loans from the Marin Housing Authority on September 10, 2024. The outstanding balance consisted of 17 amortized loans totaling $331,560 and 117 deferred loans totaling $5,643,456 as of June 30, 2025. Due to the uncertainty of collection of the deferred loans, an allowance for credit losses has been recorded for the full amount due on these loans.
Mortgage notes receivable consisted of the following:
2025 2024
Home acquisition loans $ 24,564,291 $ 23,955,762
Residential rehabilitation loans 5,975,016 -
30,539,307 23,955,762
Less: unamortized discount (13,302,261) (12,769,271)
Less: allowance for credit losses (5,643,456) -
$ 11,593,590 $ 11,186,491
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
3. MORTGAGE NOTES RECEIVABLE (continued)
Principal payments due on mortgage notes receivable are as follows:
Year ending June 30,
Home
Acquisition
Residential
Rehabilitation Total
2026 $ 1,370,090 $ 19,988 $ 1,390,078
2027 1,345,745 20,943 1,366,688
2028 1,292,760 21,400 1,314,160
2029 1,236,863 19,646 1,256,509
2030 1,191,770 14,825 1,206,595
Thereafter 18,127,063 5,878,214 24,005,277
24,564,291 5,975,016 30,539,307
Less: unamortized discount (13,302,261) - (13,302,261)
Less: allowance for credit losses - (5,643,456) (5,643,456) Net present value of mortgage notes 11,262,030 331,560 11,593,590 Less current portion (1,370,090) (19,988) (1,390,078)
$ 9,891,940 $ 311,572 $ 10,203,512
4. GRANTS AND CONTRIBUTIONS RECEIVABLE
Grants and contributions receivable consisted of the following:
2025 2024
Receivable in less than one year $ 3,601,319 $ 2,560,660 Receivable in one to five years 1,200,000 400,000
4,801,319 2,960,660
Less discounts to net present value (see Note 2) (76,247) (73,791) (76,247) (73,791)
Less current portion (3,601,319) (2,560,660)
$ 1,123,753 $ 326,209
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
5. INVENTORY OF HOMES
Inventory of homes consisted of the following:
2025 2024
Newly constructed homes $ 8,304 $ 1,181,612
Home repurchased from Habitat homeowners 1,388,357 308,347 $ 1,396,661 $ 1,489,959
6. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
2025 2024
Furniture and equipment $ 347,343 $ 347,343
Vehicles 49,741 49,741
Leasehold improvements 126,775 134,164
523,859 531,248
Accumulated depreciation (438,563) (376,492)
$ 85,296 $ 154,756
Depreciation expense for the years ended June 30, 2025 and 2024, was $73,810 a nd $85,489, respectively.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
7. CONSTRUCTION IN PROGRESS
Construction in progress consisted of the following:
2025 2024
Pre-development
Novato: Redwood Boulevard (80 homes)
Land acquisition completed December 2023 $ 8,761,985 $ 8,283,327 Menlo Park: Pierce Road (8 homes)
Land acquisition completed June 2025 3,073,201 -
Bolinas (8 homes)
Joint development agreement signed September 2025 550,734 18,438 Menlo Park: Independence Drive (18 homes)
Master Developer working on development permits and
agreements with the City of Menlo Park 17,934 17,177
12,403,854 8,318,942
Terminated
Redwood City: Arguello Street (33 homes) - 533,362
- 533,362
$ 12,403,854 $ 8,852,304
8. LINES OF CREDIT
In July 2019, the Organization entered into a revolving line of credit agreement (loan #110274) with the Bank of San Francisco ("Bank"). T he line of credit was for a maximum amount of $2,000,000 and was secured by the Organization's assets. Interest accrued monthly at an annual variable rate. Interest was due monthly on the fifteenth calendar day of the following month.
Any unpaid interest would be added to principal amount due. The line of credit matured on July 25, 2025. There were no amounts outstanding on this line of credit as of June 30, 2025 and 2024.
In July 2019, the Organization e ntered into a non-revolving line of credit agreement (loan #120429) with the Bank. T he line of credit is for a maximum amount of $3,000,000 and is secured by the Organization's assets. Interest is due monthly on the fifteenth calendar day of the following month. Any unpaid interest will be added to the principal amount due. On September 20, 2023, the Organization renewed the line of credit agreement and the maturity was extended to September 20, 2028, with an interest rate of 8.5%. There were no amounts outstanding on this line of credit as of June 30, 2025 and 2024.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
8. LINES OF CREDIT (continued)
In June 2025, the Organization entered into a revolving line of credit agreement with Habitat Capital, LLC. The line of credit is for a maximum amount of $1,100,000 and is unsecured, with an interest rate of 4.5%. Interest is payable quarterly on the last business day of each quarter.
Outstanding principal plus any accrued and unpaid interest and any other amounts owed are due and payable in equal quarterly installments beginning in the final year of the term concluding on June 30, 2028. Financial covenants include the requirement to maintain a total balance of cash, cash equivalents and receivables equal to or greater than the outstanding loan amount and to maintain a positive average change in net assets for the past three years. Outstanding amounts on this line of credit totaled $1,100,000 as of June 30, 2025.
9. NOTES PAYABLE
Notes payable are detailed as follows:
2025 2024
Payable to the County of San Mateo (LTNHFB) - Home
Program federal funds used for site construction costs of two housing units, secured by individual deeds of trust on property located in Brisbane, California, due in semi-annual non-interest bearing payments of $698 through June 2037. $ 16,284 $ 17,679 Payable to the County of San Mateo (LTNHBC) - Home
Program federal funds used for site construction costs of five housing units, secured by individual deeds of trust on property located in Brisbane, California, due in semi-annual non-interest bearing payments of $2,111 through June 2032. 28,211 32,434 Payable to the County of San Mateo (LTNHFS) - Home
Program federal funds used for site construction of four housing units, secured by individual deeds of trust on
property located in South San Francisco, California, due in semi-annual non-interest bearing payments of $7,261
through December 2025. 3,130 17,652
Payable to the Northern Trust Company (LTNNT1) - 0%
interest, secured by deeds of 9 mortgage loans. D ue in various monthly installments through July 2047. T he
Organization recognized a contribution from the discount totaling $1,032,778 in the consolidated statement of
activities during the year ended June 30, 2019. T he
discount is amortized using the straight-line method in the term of the loan. 1,418,525 1,515,885
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
9. NOTES PAYABLE (continued)
2025 2024
Payable to the Northern Trust Company (LTNNT2) - 0%
interest, secured by deeds of 15 mortgage loans. D ue in various monthly installments through January 2048. T he Organization recognized a contribution from the discount totaling $1,054,545 in the consolidated statement of
activities during the year ended June 30, 2021. T he
discount is amortized using the straight-line method in the term of the loan. 1,782,128 1,916,958
Payable to the Northern Trust Company (LTNNT3) - 0%
interest, secured by deeds of 20 mortgage loans. D ue in various monthly installments through January 2051. T he Organization recognized a contribution from the discount totaling $1,242,830 in the consolidated statement of
activities during the year ended June 30, 2022. T he
discount is amortized using the straight-line method in the term of the loan. 2,048,044 2,238,474
Payable to the Northern Trust Company (LTNNT4) - 0%
interest, secured by deeds of 3 mortgage loans. D ue in various monthly installments through June 2052. The
Organization recognized a contribution from the discount totaling $393,788 in the consolidated statement of activities during the year ended June 30, 2022. T he discount is
amortized using the straight-line method in the term of the loan. 611,960 646,575
Payable to the Northern Trust Company (LTNNT5) - 0%
interest, secured by deeds of 7 mortgage loans. D ue in various monthly installments through October 2052. T he Organization recognized a contribution from the discount totaling $2,148,690 in the consolidated statement of
activities during the year ended June 30, 2023. T he
discount is amortized using the straight-line method in the term of the loan. 3,671,374 3,806,890
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
9. NOTES PAYABLE (continued)
2025 2024
Payable to the Northern Trust Company (LTNNT6) - 0%
interest, secured by deeds of 7 mortgage loans. D ue in various monthly installments through December 2053. The Organization recognized a contribution from the discount totaling $1,656,992 in the consolidated statement of
activities during the year ended June 30, 2024. T he
discount is amortized using the straight-line method in the term of the loan. 2,955,399 3,082,911
Payable to Housing Endowment and Regional Trust of San
Mateo County (LTNHRT) - used to acquire real property at 612 Jefferson Avenue, Redwood City, California. I n
September 2022, 19 homes on Jefferson Avenue were sold, and the balance was reclassified from refundable advance to a loan that is secured by individual deeds of trust on
properties on Jefferson Avenue (see Note 12). T he loan bears no interest, and payment of $12,500 is due monthly through September 2042. 437,500 462,500
Payable to Habitat for Humanity International, Inc.
(LTNHHI) - In October 2022, the Organization signed a
$1,000,000 unsecured loan from Habitat for Humanity
International. On June 30, 2023, the Organization signed an amendment updating the interest rate from 3.75% to 2.75%, effective July 1, 2023. T he loan's automatic option was amended to automatically extend 4 times by one-year terms based on request of the Organization, or to be called by Habitat for Humanity International, Inc. at the end of
December 31, 2023. T he loan is used for general
development and homebuilding efforts. 1,000,000 1,000,000 13,972,555 14,737,958
Less discount on notes payable (6,577,623) (6,929,675)
7,394,932 7,808,283
Current portion (400,096) (379,856)
$ 6,994,836 $ 7,428,427
The discount rates on the notes payable range from 3.33% to 8.06% based on an annual simple average using rates published by Habitat for Humanity International, Inc. and the Federal Home Loan Mortgage Corporation. Amortization of these discounts on the notes payable for the years ended June 30, 2025 and 2024 was $352,052 and $136,374 respectively. 24 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
9. NOTES PAYABLE (continued)
Future principal payments on notes payable are as follows:
Year ending June 30,
2026 $ 754,011
2027 750,881
2028 1,750,881
2029 750,881
2030 750,881
Thereafter 9,215,020
13,972,555
Less: debt discount (6,577,623)
Term loan, net of discount 7,394,932
Current portion, presented at discounted amounts (400,096) $ 6,994,836
10. REFUNDABLE ADVANCES - GOVERNMENTAL GRANTS
The Organization r eceives funds from governmental agencies for the purpose of constructing homes and ultimately lowering the mortgage of the prospective homeowners. A t the time of homes sale, the loans are transferred to the buyers and forgiven over varying time periods. The Organization recognizes revenue from the sale of homes upon the transfer of their liabilities to the homeowners. See Note 13.
The Organization received $2,000,000 from the County of Marin for an owner-occupied home repair loan fund for low-income borrowers in 2023. A ny bank interest earned on the Marin County CDBG Home Preservation Loan Fund is considered program revenue to be remitted annually to the federal government via Marin County.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
10. REFUNDABLE ADVANCES - GOVERNMENTAL GRANTS (continued) Refundable advances - governmental grants consisted of the following:
2025 2024
County of Marin Community Development Agency Loan
Program $ 2,000,000 $ 2,000,000
County of Marin Community Development Agency Loan
Program Revolving Loan Fund 748,439 -
CalHome Owner-Occupied Rehabilitation Reuse Funds 9,480 - CalHome Mortgage Assistance Reuse Funds - 60,000
City of Novato Mortgage Assistance Funds - 37,696
$ 2,757,919 $ 2,097,696
11. NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions include those assets which are subject to donor imposed stipulations. Those restrictions may involve purpose (i.e. the donation is restricted to a specific use) or time (i.e. the assets are used in a future period). In some cases, both a time and purpose restriction may apply.
The Organization's net assets with donor restrictions for the year ended June 30, 2025, consisted of the following:
Beginning of
Year Contributions Releases End of Year
Contribution from discount
on note payable issued $ 6,916,329 $ - $ (338,706) $ 6,577,623 Low-income housing
acquisition and
construction 5,030,284 7,578,670 (5,921,334) 6,687,620
In-kind contributions - 197,063 (197,063) -
$ 11,946,613 $ 7,775,733 $ (6,457,103) $ 13,265,243
12. CONDITIONAL PROMISES TO GIVE
Conditional grants are recognized as revenue when the Organization meets or substantially meets the terms and conditions of the grants.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
12. CONDITIONAL PROMISES TO GIVE (continued)
Conditional promises to give consisted of the following:
2025 2024
Residential rehabilitation program within the County of Marin $ 2,797,570 $ 2,000,000
Wharf project 673,672 -
Rehabilitation of two homes within the City of Daly City 273,794 - $ 3,745,036 $ 2,000,000
13. SALE OF HOMES
During the year ended June 30, 2025, the Organization s old 3 homes, including 2 homes on Aspen Drive and 1 resale on Burdell Place, with a total cost of $1,965,950 and sales revenue of $2,651,964. During the year ended June 30, 2024, the Organization sold 13 homes, including 8 homes on Amber Drive, 1 home on Jefferson Avenue, 1 resale on Rolison Road, 2 homes on Overlook Drive and 1 resale on Gloria Way, with a total cost of $12,688,913 and sales revenue of $8,671,812.
14. IN-KIND CONTRIBUTIONS
Donated materials
Donated materials and equipment include materials physically incorporated into a project or the use of equipment to carry out project activities. T ypically, these consist of materials or equipment used for the construction of a project. Donated materials and equipment are recorded at fair value based on invoices, price sheets, and quotations from third parties.
Donated services
Donated services which require a specialized skill and which the Organization would have paid for if not donated, are recorded in the consolidated financial statements as in-kind contributions revenue at the estimated fair value at the time the services are rendered, based on the costs provided by professionals at their standard rates.
The Organization a lso receives significant donated services of an unskilled nature, primarily volunteers who work on the construction and rehabilitation of homes, as well as in the office.
During the years ended June 30, 2025 and 2024, volunteers donated 11,148 and 10,692 hours, respectively, whose value management has estimated at $468,141 and $415,057, respectively.
The value of the donated hours were not recorded in the consolidated financial statements. 27 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
14. IN-KIND CONTRIBUTIONS (continued)
Donated land
The Organization r eceived donated land in Novato, California, during the year ended June 30, 2024. The Organization intends to develop the land into an affordable housing project. The donation was recorded in the consolidated financial statements as in-kind contribution revenue at the market value of $5 million on the date of valuation, based on an appraisal performed by a commercial real estate appraiser.
In-kind contributions are summarized as follows:
2025 2024
Donated materials $ 1,953 $ -
Donated services 342,907 185,700
Donated land - 5,000,000
$ 344,860 $ 5,185,700
15. RETIREMENT PLAN
The Organization h as a 403(b) retirement plan in which the employer matches employee contributions up to 5% of gross salary. The plan covers all employees with one year of service or more and who are at least 21 years of age. Employer contributions to the employee accounts for the years ended June 30, 2025 and 2024, were $185,235 and $200,649, respectively.
16. RELATED PARTY TRANSACTIONS
HFHI Tithe
The Organization donates to Habitat for Humanity International, Inc. ("HFHI") annually for the construction of homes outside of the United States, as determined by the Organization's Board of Directors. These funds are used to construct homes in economically depressed areas around the world. For both the years ended June 30, 2025 and 2024, the amount contributed was $225,000 and is included in Tithe expense under program services in the consolidated statement of functional expenses.
Insurance policy
The Organization h as a blanket policy for auto, general and builder's risk insurance through Habitat for Humanity International, Inc. F or the years ended June 30, 2025 a nd 2024, the insurance expense was $70,475 and $67,063, respectively. 28 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
17. COMMITMENTS
Right of first purchase
Upon the acquisition of land granted to the Organization f or construction, various agreements require the Organization to maintain the properties as affordable housing for a certain period of time. T hese affordability restrictions vary from 45 to 99 years. A r ight of first purchase is recorded at the time of sale giving the Organization the right to purchase the property should the homeowner decide to sell. The Organization resells purchased Habitat-built homes to qualified first-time homebuyers at an updated price, at which time the required affordability term restarts.
Office and warehouse leases
In October 2021, the Organization s igned a non-cancelable lease for office space in San Francisco, expiring on December 31, 2031. T he monthly rent of $57,195 was payable commencing in January 2022, with annual increases on each anniversary as stated in the lease agreement.
On July 28, 2022, the Organization signed a non-cancelable lease for a new commercial warehouse space in San Francisco, expiring on July 31, 2027. The monthly rent of $9,375 was payable commencing on November 1, 2022, with annual increases on each anniversary as stated in the lease agreement. The Organization has an option to extend the lease for another 5-year term when the lease expires.
Additional information related to leases is as follows:
2025 2024
Weighted-average discount rate - operating leases %2.77 %2.77 Weighted-average lease term - operating leases 5.25 years 6.25 years Cash paid on operating leases $ 860,246 $ 833,128
Operating lease liabilities $ 5,143,263 $ 5,845,020
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
17. COMMITMENTS (continued)
Office and warehouse leases (continued)
The scheduled minimum lease payments under the lease terms are as follows:
Year ending June 30,
2026 $ 888,477
2027 917,676
2028 818,769
2029 831,819
2030 856,773
Thereafter 1,330,236
5,643,750
Less: discount to present value (500,487)
$ 5,143,263
18. LIQUIDITY AND FINANCIAL ASSETS
As part of the Organization's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due.
To meet liquidity needs, the Organization maintains adequate levels of cash and cash equivalents available. A ccounts receivable, current portion of mortgage notes receivable and unrestricted grants and contributions receivable will be collected within one year. U nrestricted short-term grants and contributions receivable will be available to support general operations of the Organization.
The Board requires that the Organization maintains a minimum of six months of operating reserve at all times. As of June 30, 2025, the balance of the reserve was $5,311,858. However, the fund can be undesignated by the Board for operational needs at any time. 30 6.5
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
18. LIQUIDITY AND FINANCIAL ASSETS (continued)
The following is a quantitative disclosure which describes financial assets that are available as of June 30, 2025 and 2024 to fund general expenditures and other obligations when they become due for one year:
2025 2024
Financial assets
Cash and cash equivalents $ 11,625,024 $ 12,438,365
Accounts receivable 96,902 73,500
Current portion of grants and contributions receivable 3,601,319 2,560,660 Current portion of mortgage notes receivable 1,390,078 1,354,792 16,713,323 16,427,317
Less: amounts unavailable for general expenditure within one year:
Net assets with purpose restrictions (6,687,620) (5,030,284) (6,687,620) (5,030,284)
$ 10,025,703 $ 11,397,033
19. SUBSEQUENT EVENTS
On July 25, 2025, the Organization extended its line of credit with the Bank (loan#110274) to August 25, 2025. On September 20, 2025, this line of credit was renewed, and the maturity was extended to July 25, 2027, with an interest rate set at the Prime Rate (7.25% upon extension).
On August 29, 2025, the Organization sold a home in East Palo Alto for $188,100 in sales revenue.
On September 16, 2025, the Organization received conditional approval from the County of Marin for the following grants: $286,057 PLHA loan, two CDBG grants of $391,590 and $38,796, and a Home Investment Partnership Program (HOME) grant of $430,440.
On September 19, 2025, the Organization made a deposit into escrow of $46,659 for the purchase of a manufactured home for $93,317.
On September 20, 2025, the Organization extended its line of credit with the Bank (loan#120429) to September 20, 2030, with an interest rate set at the Prime Rate (7.25% upon extension).
On October 16, 2025, the Organization purchased a building in San Francisco for $900,000.
In October 2025, the Organization exercised its option to repurchase a home on Amber Drive and a home on Oakdale Avenue in San Francisco.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Financial Statements
June 30, 2025
(With Comparative Totals for 2024)
19. SUBSEQUENT EVENTS (continued)
In October 2025, the Organization received approval of a $2.4 million loan from Marin Community Foundation.
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SINGLE AUDIT REPORTS AND SCHEDULES
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INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Habitat for Humanity Greater San Francisco, Inc. and Subsidiary ( the ''Organization''), which comprise the statement of financial position as of June 30, 2025, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the financial statements, and have issued our report thereon dated December 1, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Organization's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.
A deficiency in internal control e xists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness i s a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
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Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Organization's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards i n considering the Organization's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
San Jose, California
December 1, 2025
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INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
THE UNIFORM GUIDANCE
To the Board of Directors
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the ''Organization'')'s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the Organization's major federal programs for the year ended June 30, 2025. The Organization's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
In our opinion, the Organization c omplied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the Organization and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the Organization’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Organization’s federal programs.
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Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Organization’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may i nvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Organization’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. S uch procedures include examining, on a test basis, evidence regarding the Organization’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. Obtain an understanding of the Organization’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance i s a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
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Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. G iven these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. H owever, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
San Jose, California
December 1, 2025
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2025
Pass-Through
Entity
Federal Grantor/Pass-Through Grantor/ Assistance Identifying Total Federal Program or Cluster Title Listing Number Number Expenditures Expenditures of Federal Awards
US Department of Housing and Urban Development
Community Development Block Grant Program
Pass-through program from:
County of San Mateo 14.218 N/A $ 1,000,000
County of Marin Community Development Agency 14.218 N/A 172,705 City of Redwood City 14.218 N/A 44,647
City of Daly City 14.218 N/A 290,488
Total Community Development Block Grant Program 1,507,840 Total Expenditures of Federal Awards $ 1,507,840
The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Notes to Schedule of Expenditures of Federal Awards
June 30, 2025
1. BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Habitat for Humanity Greater San Francisco, Inc. and Subsidiary (the "Organization") under programs of the federal government for the year ended June 30, 2025. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.
Code of Federal Regulations P art 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or limited as to reimbursement. P ass- through entity identifying numbers are presented where available and applicable.
Grant periods for certain of the grants included in the Schedule may be different from the fiscal year of the Organization.
3. FEDERAL LOAN PROGRAMS
The accompanying schedule of expenditures of federal awards includes loan balances for which continuing compliance is required. The balances of the loans which continuing compliance was required as of June 30, 2025 amounted to $1,000,000.
4. INDIRECT COSTS
The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiency(ies) identified that are not considered to be material weaknesses? None reported
Noncompliance material to financial statements noted? No Federal Awards
Internal control over major programs:
Material weakness(es) identified? No
Significant deficiency(ies) identified that are not considered to be material weaknesses? None reported
Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No
Identification of major programs:
Name of Federal Program or Cluster Assistance Listing Number Community Development Block Grant Program 14.218
Dollar threshold used to distinguish between Type A and Type B programs $750,000
Auditee qualified as low-risk auditee? Yes
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Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
SECTION II - SUMMARY OF FINANCIAL STATEMENT FINDINGS
There are no financial statement findings to be reported.
SECTION III - SUMMARY OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS There are no federal award findings to be reported.
42 6.5
Attachment 5 - Additional RFP Responses
265
Habitat for Humanity Greater San Francisco, Inc. and Subsidiary Summary Schedule of Prior Audit Findings
For the Year Ended June 30, 2025
There were no prior year findings.
43 6.5
Attachment 5 - Additional RFP Responses
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Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 1
UNSOLICITED PROPOSAL
Affordable Housing Loan Servicing Software
Prepared for the City of Foster City | Community Development Department April 2026
SUBMITTED BY
Applied Business Software, Inc.
The Mortgage Office® (TMO)
7755 Center Ave.
Huntington Beach, CA, 92647
www.themortgageoffice.com
SUBMITTED TO
Nori Jabba
Housing and Sustainability Manager
City of Foster City
Community Development Department
610 E. Hillsdale Blvd., Foster City, CA 94404
EXECUTIVE SUMMARY
Applied Business Software, Inc. is pleased to present this unsolicited proposal to the City of Foster City on behalf of The Mortgage Office® (TMO), a purpose-built loan servicing and portfolio management platform designed specifically for government agencies, housing finance authorities, and community development lenders administering affordable housing programs.
Foster City’s expanding commitment to affordable housing, as reflected in its 2023–2031 Housing Element and the newly launched Supportive and Special Needs Housing Program, requires not only strong program administration and supportive services, but also rigorous, long-term management of the loan and financial instruments that fund these programs. As the City’s affordable housing portfolio grows through programs funded by CDBG, HOME, the Affordable Housing Fund, and other sources, the administrative burden of tracking deferred loans, forgivable notes, compliance reporting, and income recertification will grow accordingly.
This proposal suggests a cost-efficient alternative to outsourced subservicing: implementing an in-house loan servicing software platform that allows the City to directly manage its affordable housing loan data, simplify HUD compliance reporting, and lower long-term servicing expenses. Alternatively, TMO can be used by a loan servicer or subservicer as a management tool for loan servicing operations. Currently, over 400 government agencies, CDFIs, and housing finance organizations throughout the United States—including many cities and counties in California overseeing HOME and CDBG portfolios—use TMO.
“The City of Foster City manages a growing portfolio of affordable housing investments. TMO gives your team a single system of record for every loan, covenant, and compliance obligation — purpose-built for the way government lenders work.”
THE OPPORTUNITY: MANAGING FOSTER CITY’S AFFORDABLE HOUSING PORTFOLIO Cities administering affordable housing programs funded through federal, state, and local sources face a layered compliance environment. Deferred payment loans, forgivable notes, covenant-restricted units, and income-based repayment structures all require careful tracking across multi-year terms — often spanning 15, 20, or 30 years. Without purpose-built software, these portfolios are commonly managed in spreadsheets or general-purpose databases that were never designed to handle the nuances of affordable housing compliance.
Foster City’s Affordable Housing Fund, Existing Unit Purchase Program (EUPP), and any HOME or CDBG-funded loan activity represent exactly the kind of portfolio that benefits most from a dedicated loan servicing platform. Common pain points for cities at this stage include:
• Manually tracking affordability covenants and loan maturity dates across a growing portfolio • Assembling HUD IDIS or CAPER data from disparate spreadsheets and files • Managing annual income recertifications and occupancy compliance without an automated workflow
6.5 Attachment 5 - Additional RFP Responses
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Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 2 • Limited audit trail and version control when loan terms are modified or deferred • High cost and loss of control when relying on a third-party subservicer for portfolio data
WHY THE MORTGAGE OFFICE
The Mortgage Office is the leading loan servicing software platform for government and mission-driven lenders. It is not a general-purpose loan origination system or a consumer mortgage platform — it was architected from the ground up to serve the exact use case Foster City needs: portfolio lenders who hold loans in-house and must manage them for compliance, affordability, and long-term program integrity.
Portfolio Types Supported
CDBG rehabilitation loans, HOME down payment assistance, deferred payment loans, forgivable notes, Section 108, revolving loan funds, and affordability covenant tracking
HUD Compliance Tools IDIS-compatible data exports, CAPER report support, income limit tracking, and AMI-based payment calculations
Automated Workflows Payment processing, late notices, annual recertification reminders, maturity alerts, and covenant expiration tracking Document Management Centralized storage for loan files, recorded documents, income certifications, and correspondence with full audit history Reporting & Analytics Pre-built and custom reports for portfolio performance, compliance status, delinquency, and program activity summaries
Security & Access Control Role-based user permissions, full audit log, and SOC 2-compliant data handling suitable for government environments
IN-HOUSE SOFTWARE VS. OUTSOURCED SUBSERVICING
Foster City is seeking a supportive housing program administrator, which suits the services and placement aspect. For affordable housing loans and financial instruments—like deferred loans, forgivable notes, and covenants—the City must decide whether to keep outsourcing subservicing or develop an in-house system.
The chosen program administrator could also use TMO to handle loan servicing operations.
Outsourced Subservicer TMO In-House Platform
Data Ownership Data held by vendor; export can be
difficult or costly
City owns all data; full export and
access at any time
Long-Term Cost Per-loan or per-transaction fees
compound over time
Flat annual software subscription
scales efficiently
Reporting Flexibility Reports generated on vendor’s
schedule and format
Run any report on demand, in real time
Compliance Control City relies on vendor accuracy for HUD submissions
City staff verify and control all
compliance data
Staff Continuity Institutional knowledge lives with the vendor
City builds internal expertise and
reduces third-party dependency
Scalability Costs increase as portfolio grows Same platform serves 5 loans or 500 loans
6.5 Attachment 5 - Additional RFP Responses
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Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 3
A FLEXIBLE PARTNERSHIP MODEL
Applied Business Software recognizes that smaller municipal housing programs benefit from a phased, supported approach to in-house loan servicing. Rather than requiring the City to stand up a full loan administration operation immediately, we propose the following engagement model:
Phase 1 — Discovery and Portfolio Assessment. A complimentary 60-minute working session with your housing staff to map your current loan portfolio, data sources, and compliance reporting requirements. No obligation, and no sales pressure — the goal is to determine whether TMO is the right fit for Foster City at this stage.
Phase 2 — Proof of Concept / Pilot. For cities new to loan servicing software, we offer a structured pilot engagement in which we load a sample of your portfolio data into TMO and demonstrate live reporting, compliance workflows, and document management with your actual data.
Phase 3 — Implementation and Onboarding. Full platform implementation includes data migration, staff training, and dedicated onboarding support. Our government clients typically reach full operational confidence within 60 to 90 days of kickoff.
THE MORTGAGE OFFICE SOLUTON PRICING
The Mortgage Office is offered as an annual software subscription priced based on active loan volume, making it a predictable, scalable investment that grows with your portfolio rather than compounding per- transaction costs over time. For a municipal affordable housing portfolio of Foster City's current size, the annual licensing cost is a fraction of what a comparable subservicing arrangement would cost over the life of the same loans. Included in the subscription are platform access for all authorized users, standard implementation and data migration support, ongoing software updates, and access to our government client support team. A detailed fee schedule is provided below for your review.
Please note that the pricing outlined here is provided for illustrative purposes. We would welcome the opportunity to connect with your team to better understand your specific portfolio, program structure, and servicing needs before providing a formal cost estimate tailored to the City of Foster City.
PARTNERSHIP WITH QUALIFIED PROGRAM CONSULTANTS
Applied Business Software works alongside a network of affordable housing consultants and program administrators throughout California. If the City of Foster City is interested in a combined solution that addresses both the supportive housing program administration needs described in your current RFP and the loan servicing platform component introduced in this proposal, we welcome the opportunity to connect you with qualified program administration firms that have experience working with TMO as the back-office servicing platform.
This approach allows the City to retain full control and visibility over its loan and financial instrument data through TMO, while partnering with a specialized nonprofit or housing services agency to handle program Loan Servicing Yearly Cost Per User Per Year Monthly Cost Per User Package Details 1 - 3 Users $9,000.00 $750.00
4-10 Users $7,800.00 $650.00
Const & Draw Mgr. Yearly Cost Per User Per Year Monthly Cost Per User Package Details 1-3 Users $2,640.00 $220.00
4-10 Users $2,100.00 $175.00
Loan Origination Yearly Cost Per User Per Year Monthly Cost Per User Package Details 1-3 Users $3,600.00 $300.00 User Subscription Tier of Public Sector Loan Origination Module. Application 4-10 Users $3,000.00 $250.00
Services Bundle Yearly Cost Per User Per Year Monthly Cost Package Details < 200 loans $6,000.00 $500.00
201-500 loans $12,000.00 $1,000.00
501-2,000 loans $24,000.00 $2,000.00
The Mortgage Office - Public Sector Package Pricing Options User Subscription Tier of Public Sector Loan Servicing Package. Core Loan Servicing System (LS, TA, ACH) + CCR/CDFI/EA modules
Construction Module and Draw Manager Module
Bundle required per loan tier. Services include Borrower Portals, Texting, eSign, Tax eFiling, Miniter Insurance Tracking, access to Usio and Geomapping
6.5 Attachment 5 - Additional RFP Responses
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Unsolicited Proposal: City of Foster City, Affordable Housing Loan Servicing Software with The Mortgage Office Applied Business Software, Inc. | The Mortgage Office® Page: 4 administration, household placement, and supportive services under the terms of the RFP. The two scopes are complementary and can be structured as separate agreements to preserve procurement clarity.
TMO is currently used by cities, counties, CDFIs, and housing finance agencies across California and the country to manage affordable housing loan portfolios ranging from fewer than 50 loans to more than 10,000 active accounts. Our government clients include CDBG and HOME program administrators, state housing finance agencies, and community development departments with portfolios similar in size and structure to Foster City’s.
PROPOSED NEXT STEPS
• Schedule a 30-minute introductory call with The Mortgage Office to discuss Foster City’s current affordable housing portfolio and any loan servicing needs • Arrange a live demonstration of The Mortgage Office for Housing and Community Development staff • Receive a no-obligation portfolio assessment and pricing proposal tailored to the City’s program structure and volume
CONTACT
Applied Business Software, Inc. | The Mortgage Office® Adam Loughran, State & Local Government Division
7755 Center Ave, Huntington Beach, CA 92647
www.themortgageoffice.com | [email protected]
This is an unsolicited proposal submitted for informational purposes. Applied Business Software, Inc. is not responding to the City’s active RFP for the Supportive and Special Needs Housing Program, which seeks a program administrator and supportive services provider. TMO is a loan servicing software platform and this proposal addresses a complementary but distinct program need.
6.5 Attachment 5 - Additional RFP Responses
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DATE: May 4, 2026
TO: Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
Marlene Subhashini, Assistant City/District Manager
FROM: Derek Schweigart, Parks and Recreation Director
Tiffany Oren, Recreation Manager
DEPARTMENT: Parks and Recreation
SUBJECT: AMENDMENT TO EXTEND JOINT USE AGREEMENT WITH SAN
MATEO-FOSTER CITY SCHOOL DISTRICT
RECOMMENDATION
It is recommended that the City Council adopt a resolution approving an amendment to the Joint Use Agreement (JUA) between the City of Foster City/Estero Municipal Improvement District (CITY/EMID) and the San Mateo-Foster City School District (SCHOOL DISTRICT) to extend the term of the agreement through June 30, 2026.
EXECUTIVE SUMMARY
The existing JUA between CITY/EMID and the SCHOOL DISTRICT is set to expire on April 30, 2026. Staff recommend approval of a short-term, two-month extension through June 30, 2026. This extension will allow both agencies sufficient time to finalize updates to the agreement and return with a new multi-year agreement aligned with both agencies’ fiscal years (July through June).
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BACKGROUND/ ANALYSIS
The CITY/EMID has had a JUA with the SCHOOL DISTRICT since 1991 for the joint use of Audubon, Foster City, and Brewer Island School facilities. On April 23, 2023, CITY/EMID and the SCHOOL DISTRICT entered a JUA for shared use of facilities, with a term from May 1, 2023, through April 30, 2026. The JUA supports collaborative use of public facilities and promotes efficient use of community resources. As the current agreement approaches expiration, both CITY/EMID and the SCHOOL DISTRICT have identified the need to update and refine certain provisions within the JUA. Additionally, both parties desire to align the agreement term with their respective fiscal years, which run from July 1 through June 30.
To facilitate this transition, staff recommend extending the current JUA for an additional two months, through June 30, 2026. This extension will provide the necessary time to:
Incorporate recommended edits and updates to the JUA
Ensure consistency with current operational practices
Align the agreement term with both agencies’ fiscal year cycles Prepare and present a new three-year JUA for formal approval Staff anticipate returning to the City Council in June 2026 with a new JUA for consideration and approval.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
There is no direct fiscal impact associated with this short-term extension. The amendment maintains the existing terms and conditions of the current agreement.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 - City Resolution
Attachment 2 - EMID Resolution
Attachment 3 - Agreement Amendment
Attachment 4 - Joint Use Agreement
6.6 6.6 Staff Report
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4 5
8 8
RESOLUTION NO.________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY
AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE JOINT USE
AGREEMENT WITH THE SAN MATEO-FOSTER CITY SCHOOL DISTRICT TO EXTEND THE TERM THROUGH JUNE 30, 2026
CITY OF FOSTER CITY
WHEREAS, the City of Foster City/Estero Municipal Improvement District (“CITY/EMID”) and the San Mateo-Foster City School District (“SCHOOL DISTRICT”) entered into a Joint Use Agreement dated April 23, 2023, for the shared use of facilities, with a term from May 1, 2023 through April 30, 2026; and WHEREAS, the CITY/EMID and the SCHOOL DISTRICT desire to extend the current agreement for a limited period to allow time to update the agreement and align its term with both agencies’ fiscal years (July 1 through June 30); and WHEREAS, the proposed amendment extends the term of the existing agreement by two (2) months, through June 30, 2026; and
WHEREAS, during this extension period, staff from both agencies will finalize revisions and return with a new multi-year Joint Use Agreement for consideration and approval; and
WHEREAS, City staff recommend adoption of the Joint Use Agreement Amendment for Joint Use Facilities.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby authorize the Mayor to execute the Amendment to the Joint Use Agreement between the City of Foster City/Estero Municipal Improvement District and the San Mateo-Foster City School District, extending the term through June 30, 2026.
6.6 Attachment 1 - City Resolution
273
4 5
8 8
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the regular meeting held on the 4th day of May, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_______________________________________
ART KIESEL, MAYOR
ATTEST:
_______________________________________
PRISCILLA SCHAUS, CITY CLERK
6.6 Attachment 1 - City Resolution
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4 5
8 9
RESOLUTION NO.________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT AUTHORIZING THE PRESIDENT TO EXECUTE AN
AMENDMENT TO THE JOINT USE AGREEMENT WITH THE SAN MATEO-FOSTER CITY SCHOOL DISTRICT TO EXTEND THE TERM THROUGH JUNE 30, 2026
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, the City of Foster City/Estero Municipal Improvement District (“CITY/EMID”) and the San Mateo-Foster City School District (“SCHOOL DISTRICT”) entered into a Joint Use Agreement dated April 23, 2023, for the shared use of facilities, with a term from May 1, 2023 through April 30, 2026; and WHEREAS, the CITY/EMID and the SCHOOL DISTRICT desire to extend the current agreement for a limited period to allow time to update the agreement and align its term with both agencies’ fiscal years (July through June); and WHEREAS, the proposed amendment extends the term of the existing agreement by two (2) months, through June 30, 2026; and
WHEREAS, during this extension period, staff from both agencies will finalize revisions and return with a new multi-year Joint Use Agreement for consideration and approval; and
WHEREAS, City/District staff recommends adoption of the Joint Use Agreement Amendment for Joint Use Facilities.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal Improvement District does hereby authorize the President to execute the Amendment to the Joint Use Agreement between the City of Foster City/Estero Municipal Improvement District and the San Mateo-Foster City School District, extending the term through June 30, 2026.
6.6 Attachment 2 - EMID Resolution
275
4 5
8 9
PASSED AND ADOPTED as a resolution of the Board of Directors of the Estero Municipal Improvement District at the regular meeting held on the 4th day of May, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_______________________________________
ART KIESEL, PRESIDENT
ATTEST:
_______________________________________
PRISCILLA SCHAUS, DISTRICT SECRETARY
6.6 Attachment 2 - EMID Resolution
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JOINT USE AGREEMENT FOR JOINT USE FACILITIES AMENDMENT
THIS AMENDMENT is made and entered into this day of May 4, 2026, by and between the CITY OF FOSTER CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT, hereinafter called “CITY/EMID”, and the SAN MATEO FOSTER CITY SCHOOL DISTRICT, hereinafter called “SCHOOL DISTRICT.”
The CITY and SCHOOL DISTRICT entered into a joint use agreement dated April 23, 2023, with a term from May 1, 2023 through April 30, 2026.
The CITY and SCHOOL DISTRICT agree to extend the term of the April 23, 2023 agreement by two months through June 30, 2026. In June 2026, a new agreement will be brought forward to both the CITY and SCHOOL DISTRICT. The CITY and SCHOOL DISTRICT intend to extend the Joint Use Agreement by another three years and have the new agreement aligned with both the CITY’s and SCHOOL DISTRICT’s fiscal years of July to June. Approving this amendment enables the CITY and SCHOOL DISTRICT to complete suggested edits to the Joint Use Agreement and enables the agreement to be aligned with our respective fiscal years.
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT to be executed on the date first above written by their respective officers duly authorized in that behalf.
CITY OF FOSTER CITY
BY: ______________________________
ART KIESEL, Mayor
Dated: _______________
ATTEST:
__________________________________
PRISCILLA SCHAUS, City Clerk
ESTERO MUNICIPAL IMPROVEMENT
DISTRICT
BY: ______________________________
ART KIESEL, President
ATTEST:
__________________________________
PRISCILLA SCHAUS, District Secretary
6.6 Attachment 3 - Agreement Amendment
277
SAN MATEO-FOSTER CITY SCHOOL
DISTRICT
BY:
____________________________________
Maggie Trinh,
President of the Board of Trustees
ATTEST:
____________________________________
Stacey Ho,
Clerk of the Board of Trustees
APPROVED AS TO FORM
BY: _____________________________
BENJAMIN STOCK,
City Attorney/District Legal Counsel
for CITY/EMID
_
6.6 Attachment 3 - Agreement Amendment
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JOINT USE AGREEMENT FOR JOINT USE FACILITIES
THIS AGREEMENT is made and entered into on this day of May 1, 2023, by and between the CITY OF FOSTER CITY/ ESTERO MUNICIPAL IMPROVEMENT DISTRICT, hereinafter called " CITY/ EMID", and the SAN MATEO/ FOSTER CITY SCHOOL DISTRICT, hereinafter called " SCHOOL DISTRICT."
RECITALS
WHEREAS, on or about December 16, 1991, CITY/ EMID, and SCHOOL DISTRICT, hereinafter referred to collectively as the " PARTIES," executed an agreement in writing by the terms of which they settled between themselves a lawsuit concerning the exchange of real property; and the revision of a 1981 agreement between the COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF FOSTER CITY, hereinafter called " AGENCY" and SCHOOL DISTRICT; and
WHEREAS, said Agreement provided for the joint use of the CITY/ EMID and SCHOOL DISTRICT of certain facilities and the joint financing of the cost of maintenance and improvements; and
WHEREAS, the Agreement was amended on November 4, 1993 (" First Amendment"), August 18, 1994 (" Second Amendment"), March 1, 1999 (" Third Amendment"), March 21, 2011 (" Fourth Amendment") and September 19, 2016 (“ Fifth Amendment”); and
WHEREAS, on May 1, 2020, the PARTIES further amended the Agreement, adopting an Amended and Restated Agreement containing all of the agreed- upon provisions; and
WHEREAS, the Amended and Restated Agreement dated May 1, 2020 expires on April 30, 2023 and the PARTIES now wish to enter into a new Agreement." TERMS
Based upon the above- referenced Recitals, the PARTIES agree as follows:
1. Term of Agreement. The term of this Agreement shall be for three ( 3) years from the date above written. SCHOOL DISTRICT AND CITY/ EMID shall have the option to renew the Agreement for an additional three ( 3) year term. In order to exercise this option, SCHOOL DISTRICT AND CITY/ EMID shall meet and confer no later than six ( 6) months before the end of the initial three ( 3) year term of this Agreement. SCHOOL DISTRICT AND CITY/ EMID shall give written notice of confirmation of extension in order to renew the Agreement.
DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
6.6 Attachment 4 - Joint Use Agreement
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2. SCHOOL DISTRICT Facilities Subject to This Agreement. The SCHOOL DISTRICT agrees that shared usage of Audubon, Beach Park, Brewer Island, Bowditch, and Foster City School, hereinafter " FACILITIES", shall be allowed under the terms and conditions enumerated herein.
a. Audubon. CITY/ EMID is authorized to use the multipurpose room, men' s/boys’ and women' s/girls’ bathrooms located adjacent thereto, by scheduling such use as provided below in Paragraph 3.
b. Beach Park. CITY/ EMID is authorized to use the multipurpose room, men’s/boys’ and women’s/girls bathrooms located adjacent thereto, by scheduling as provide below in Paragraph 3.
c. Brewer Island. CITY/ EMID is authorized to use the gymnasium, men' s/boys’ and women' s/girls’ bathrooms located adjacent thereto, by scheduling such use as provided below in Paragraph 3.
d. Bowditch. CITY/ EMID is authorized to use the gymnasium, men' s/boys’ and women' s/girls’ bathrooms located adjacent thereto during the SCHOOL DISTRICT' s summer recess.
e. Foster City School. CITY/ EMID is authorized to use the multipurpose room, men' s/boys’ and women' s/girls’ bathrooms located adjacent thereto, by scheduling such use as provided below in Paragraph 3.
f. No later than September 30 of each year, the above -referenced school sites shall provide to the CITY/ EMID their planned school year event calendar.
After September 30, SCHOOL DISTRICT will attempt to not exceed 25 changes for the remainder of the school year.
g. Storage space of at least 150 square feet shall be provided to CITY/ EMID at Audubon and Brewer Island schools. CITY/ EMID shall have the option of installing temporary storage containers after the release of students for the summer recess at Foster City School and Bowditch School in areas authorized by the SCHOOL DISTRICT. If CITY/ EMID installs temporary storage containers, the containers shall be removed prior to the commencement of the next school year.
3. Access to FACILITIES
a. CITY/ EMID shall schedule all use of DISTRICT facilities through the online civic permits process at www. smfc. civicpermits. com for each proposed use of FACILITIES. If CITY/ EMID arranges access for recreation department sponsored programs or community non/ profit organizations, then CITY/ EMID will designate such organizations in the Civic Permits platform.
CITY/ EMID arranges appropriate liability coverage for such organizations.
DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
6.6 Attachment 4 - Joint Use Agreement
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b. The SCHOOL DISTRICT shall issue one set of keys, a fob key ( only at Brewer Island School), and entry codes to CITY/ EMID for access to the above- referenced FACILITIES. CITY/ EMID will not be charged for issuance of the initial keys or fob key, but the SCHOOL DISTRICT shall charge a lost key fee of $ 75.00 and lost fob key fee of $ 100. 00. Additional keys and fob key may be obtained for an additional cost of $ 10 per key and $ 50 per fob key.
c. The SCHOOL DISTRICT will not issue to FACILITIES' renters, users or the public, keys which would allow access to the CITY/ EMlD' s storage areas located at the FACILITIES.
d. Prior to using the facilities for summer use, CITY/ EMID shall schedule a site walk through with District Facilities and Maintenance/ Operations staff at least 30 days prior to the requested date of use.
4. Time Period for Usage of FACILITIES
a. For the Audubon, Beach Park and Foster City School FACILITIES, CITY/ EMID shall be entitled to access from 4:30 PM to 11:00 PM daily and from 8:00 AM to 11:00 PM, Saturday and Sunday.
b. At Brewer Island, the access time shall be from 4:00 PM to 11 :00 PM daily except on Tuesdays. CITY/ EMlD shall leave the facility clean and ready for SCHOOL DISTRICT use by 7:00 AM on school days.
c. The Bowditch site will be made available for CITY/ EMID use during summers when any one of the other four sites ( Audubon, Beach Park, Brewer Island or Foster City School) is not available.
5. Maintenance and Janitorial Service of FACILITIES
a. Routine maintenance and janitorial service of the FACILITIES shall be performed by SCHOOL DISTRICT. CITY/ EMID shall be billed for its share of the costs on a quarterly basis. These costs shall include cost of routine maintenance of the floors, equipment, lighting, heating/ air conditioning, bathrooms in the FACILITIES and costs for janitorial, personnel, consumable supplies, interior painting, and utilities calculated as a percentage of the square footage used by the CITY/ EMID compared to the FACILITIES total building square footage.
b. The above- referenced maintenance and janitorial service shall be provided by SCHOOL DISTRICT at Audubon, Beach Park, Bowditch, Brewer Island, and Foster City School so that the FACILITIES are clean and ready for use DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
6.6 Attachment 4 - Joint Use Agreement
281
by the CITY/ EMID at 4:30 PM, Monday through Friday or, in the case of Brewer Island, 4:00 PM, and at 8:00 AM Saturday and Sunday for all sites.
It is the responsibility of SCHOOL DISTRICT to provide a clean and ready for use facility at Bowditch during the summer months when CITY/ EMID uses Bowditch. It is CITY/ EMlD' s responsibility to provide a clean and ready for use Bowditch facility prior to its reopening at the end of summer recess if CITY/ EMID has made use of the site.
c. Specifically excluded from maintenance and janitorial service costs to be shared are capital replacement costs associated with the building, exterior painting, roof work, landscaping, sidewalk pathways and parking lot repairs.
SCHOOL DISTRICT is solely responsible for the cost of these items unless damage to these items or fixtures results from CITY/ EMID use. d. SCHOOL DISTRICT shall provide CITY/ EMID with one set of keys to all custodial dispensing equipment such as paper towel holders, toilet paper holders, and soap dispensers at the FACILITIES for re -supply purposes. e. CITY/ EMID shall leave the FACILITIES in a clean condition after use as specified in Exhibit A, a copy of which is attached hereto and incorporated by this reference. SCHOOL DISTRICT and CITY/ EMID jointly developed the standards for cleanliness of the FACILITIES as enumerated and restated in Exhibit A.
If CITY/ EMID fails to make the Facilities clean and ready for use as required by this paragraph, SCHOOL DISTRICT may undertake work needed to make the Facilities clean and ready for use and thereafter bill CITY/ EMID for the actual cost incurred in this process.
If SCHOOL DISTRICT fails to make the Facilities cle an and ready for use as required by this paragraph, CITY/ EMID may undertake work needed to make the Facilities clean and ready for use and thereafter bill SCHOOL DISTRICT for the actual cost incurred in this process.
f. No later than November 30th of each year of this Agreement, the SCHOOL DISTRICT shall meet with the City to review anticipated projects and provide a budget estimate to the CITY/ EMID of utility, maintenance, and janitorial service costs itemized and broken out by facility for review by the CITY/ EMID.
6. Scheduling Use of FACILITIES
a. No later than November 30th of each year of this Agreement, CITY/ EMID and SCHOOL DISTRICT will meet to review the SCHOOL DISTRICT' s construction and major maintenance projects which are scheduled to be DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
6.6 Attachment 4 - Joint Use Agreement
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performed during the SCHOOL DISTRICT' s Fall, Winter, Spring, and Summer breaks with the goal of coordinating this work and with ongoing City programs. The PARTIES, as needed, will have additional meetings if additional time is required by SCHOOL DISTRICT for cleaning and repairs in order to determine the timing and scope of those repairs and the resulting need to reschedule events by CITY/ EMID to accommodate District' s schedule.
b. Unless an emergency occurs, SCHOOL DISTRICT will notify CITY/ EMID no later than March 1 each year regarding construction or major maintenance projects which are scheduled to be performed during the next year' s summer recess.
7. Operational Issues and Emergencies
a. CITY/ EMID shall provide security, supervision, and control during its use of the FACILITY.
b. CITY/ EMID shall assign a staff member, or contracted user group, to lock and unlock the FACILITIES for its use.
c. SCHOOL DISTRICT and CITY/ EMID shall provide at least two phone numbers for notification in the event of an emergency and a site contact for CITY/ EMID and SCHOOL DISTRICT users. Both a CITY/ EMID and SCHOOL DISTRICT emergency contact list will be posted at the FACILITIES for all users to access.
d. CITY/ EMID shall be entitled to make temporary emergency repairs if during its use of the FACILITIES vandalism occurs, bathroom fixtures or athletic equipment becomes inoperative. The CITY/ EMID shall then give SCHOOL DISTRICT immediate telephone, email or fax notice of its response to the emergency and the need for the SCHOOL DISTRICT to perfo rm emergency repairs. SCHOOL DISTRICT shall respond and commence necessary repairs within 72 hours. Major repairs may require more than 72 hours to complete.
8. Insurance
a. SCHOOL DISTRICT shall maintain property damage insurance in an amount equal to the replacement cost of each of the FACILITIES governed by this Agreement. CITY/ EMID will provide the SCHOOL DISTRICT with proof of property and liability insurance on an annual basis. b. CITY/ EMID shall indemnify, save and hold harmless SCHOOL DISTRICT, its officers, Board members, agents and employees against any and all DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
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claims, causes of action, suits or judgments, including expenses incurred therewith for death or injury to persons, or loss of or damage to property, resulting from negligent acts of CITY/ EMID, its officers, agents, employees or invitees in the performance of this Agreement. In the event of any such claims made, or suits filed, SCHOOL DISTRICT shall give CITY/ EMID prompt written notice thereof, and CITY/ EMID shall have the right to defend or settle the same to the extent of its interest hereunder. c. SCHOOL DISTRICT shall indemnify, save and hold harmless CITY/ EMID, its officers, Board members, agents and employees against any and all claims, causes of action, suits or judgments, including expenses incurred therewith for death or injury to persons, or loss of or damage to property, resulting from negligent acts of SCHOOL DISTRICT, its officers, agents or employees in the performance of this Agreement. In the event of any such claims made, or suits filed, CITY/ EMID shall give SCHOOL DISTRICT prompt written notice thereof, and SCHOOL DISTRICT shall have the right to defend or settle the same to the extent of its interest hereunder. d. CITY/ EMID and SCHOOL DISTRICT shall each maintain public liability insurance of not less than $ 1,000, 000 per person and $ 1,000, 000 per occurrence and aggregate coverage of $ 2,000, 000 insuring against all liability of CITY/ EMID and SCHOOL DISTRICT and their authorized representatives arising out of and in connection with CITY/ EMlD' s and SCHOOL DISTRICT' s use of the multipurpose rooms, gymnasium facilities, classrooms, and any other District facility. CITY/ EMID and SCHOOL DISTRICT shall each name the other as named insured on their insurance policies. The public liability insurance shall insure performance by each party of the indemnity provisions of paragraph 8 b) and c) above. For non- CITY/ EMID sponsored users, the CITY/ EMID will require the user applicant to provide a Certificate of Insurance providing hold harmless coverage for both the CITY/ EMID and the SCHOOL DISTRICT.
9. Notices. All notices, payments, reports, requests, demands and other communications to be made or given under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally or on the second day after mailing if mailed to the party to whom notice is to be given by first class mail, registered or certified, postage prepaid and prope rly addressed as follows:
CITY/ EMID City Manager/ Parks and Recreation Director
City of Foster City
610 Foster City Boulevard
Foster City, CA 94404- 2299
SCHOOL DISTRICT Chief Business Official
San Mateo- Foster City School District
DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
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1170 Chess Drive
Foster City, CA 94404
The PARTIES may change the address to which notices are to be sent by notice in writing of the new address.
10. Non- Assignment. Neither party may assign, either in whole or in part, its duty to perform or its right to receive performance of any obligation created by this Agreement.
11. Amendments. This Agreement may be amended or modified only by written agreement signed by both parties.
12. Validity. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement.
13. Governing Law. This Agreement shall be governed by the laws of the State of California and any suit or action initiated by either party shall be brought in the County of San Mateo, California. In the event of litigation between the parties hereto to enforce any provision of the Agreement, the unsuccessful party will pay the reasonable attorney' s fees and expenses of litigation of the successful party.
14. Mediation. Should any dispute arise out of this Agreement, the parties shall meet in mediation and attempt to reach a resolution with the assistance of a mutually acceptable mediator. Neither party shall be permitted to file legal action without first meeting in mediation and making a good faith attempt to reach a mediated resolution. The costs of the mediator, if any, shall be paid equally by the parties. If a mediated settlement is reached neither party shall be deemed the prevailing party for purposes of the settlement, and each party shall bear its own legal costs.
15. Entire Agreement. This agreement contains the entire understanding and agreement.
DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written by their respective officers duly authorized in that behalf.
CITY OF FOSTER CITY
BY: ______________________________
JON FROOMIN, Mayor
Dated: _______________
ATTEST:
PRISCILLA SCHAUS, City Clerk
ESTERO MUNICIPAL IMPROVEMENT
DISTRICT
BY: ______________________________
JON FROOMIN, President
ATTEST:
PRISCILLA SCHAUS, District Secretary
DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC 5/ 3/ 2023 | 9: 46 PM PDT
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SAN MATEO- FOSTER CITY SCHOOL
DISTRICT
BY: _______________________________
SHARA WATKINS,
President of the Board of Trustees
ATTEST:
LATISA BROOKS,
Clerk of the Board of Trustees
APPROVED AS TO FORM
BY: _______________________________
BENJAMIN STOCK,
City Attorney/ District Legal Counsel for
CITY/ EMID
DocuSign Envelope ID: FECEAC1B- AD7D- 4EAA- A8BF- 98E97A9632DC
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DATE:May 4, 2026
TO:Mayor and Members of the City Council
VIA:Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager
FROM:Derek Schweigart, Parks and Recreation Director
Tiffany Oren, Recreation Manager
SUBJECT:UPDATE ON THE UTILITY BOX ART PILOT PROGRAM
RECOMMENDATION
It is recommended that the City Council, by Minute Order, receive and accept an update on the Utility Box Art Pilot Program and provide direction on whether to support the continuation and expansion of the program for Fiscal Years 2026-2027 and 2027-2028.
EXECUTIVE SUMMARY
Following the successful implementation of the Utility Box Art Pilot Program (“program or pilot program”), staff is providing an overview of the pilot program and seeking City Council direction on whether to continue and expand the program.
The pilot program has transformed ordinary utility boxes into community-driven art installations, enhancing the visual landscape while serving as a deterrent to vandalism.
The program was well received by the community and aligned with the City’s goals of beautification, community engagement, and crime prevention.
Based on these successful outcomes, staff recommends continuation and expansion of the program and is seeking City Council direction on whether to move forward with this recommendation including identifying current and future funding sources.
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BACKGROUND
In 2023, the City Council approved a pilot Utility Box Art Pilot Program to address increasing incidents of vandalism on City-owned utility boxes while enhancing public spaces through art.
The program was developed collaboratively between the Parks and Recreation Department and the Foster City Police Department following Crime Prevention Through Environmental Design (CPTED) strategies, which identify public art as an effective deterrent to graffiti and vandalism.
As part of the pilot program, four (4) City-owned traffic signal utility boxes were selected in high-visibility locations and treated with a combination of painted and vinyl-wrapped artwork. The pilot also included a formal artist application and selection process, with priority given to local artists.
The pilot program allowed staff to evaluate program effectiveness, community interest, and overall feasibility prior to returning to City Council for direction on future implementation.
ANALYSIS
The Utility Box Art Pilot Program has proven to be an effective and well-received initiative that advances several City goals, including beautification, community engagement, and crime reduction.
1. Strong Local Artist Interest – The pilot program generated meaningful interest from local artists, including residents, students, and community members, demonstrating a desire for more public art opportunities within Foster City. The structured application process supported high-quality, locally relevant artwork while fostering community participation.
2. Positive Community Feedback – Feedback from residents has been overwhelmingly positive, with community members expressing appreciation for the added color, creativity, and vibrancy throughout the City. The artwork has contributed to a stronger sense of place and community pride.
3. Beautification & Vibrancy – Utility boxes are transformed into unique works of art that enhance the City’s visual character and contribute to a more vibrant public realm.
4. Community Pride & Engagement – The program provides opportunities for local artists to contribute to the community and reflect Foster City’s identity, culture, and diversity.
5. Crime Reduction – Consistent with CPTED principles and outcomes in neighboring cities, utility boxes with artwork experience reduced vandalism, as
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individuals are less likely to deface public art.
6. Operational Insights for Future Phases – The pilot also provided insight to inform future implementation. Staff identified opportunities to refine the program moving forward, including providing clearer guidance on application methods and design expectations, refining criteria for utility box selection based on visibility and need, providing notification to the neighborhood prior to the art installation, and streamlining coordination between artist selection and installation. Staff also evaluated application methods, noting that painted installations are generally more cost-effective, while vinyl-wrapped installations offer a faster installation timeline.
Given the strong artist interest and positive community response to the program, staff recommends its continuation and expansion to additional utility boxes throughout the City. Staff is seeking City Council input and direction on the pilot program including:
1. Does the City Council have any feedback or recommendations for improvements to the program?
2. Does the City Council support the continuation and expansion of the program beyond the first-year pilot?
3. If the City Council supports continuing the program, will the City Council support funding Fiscal Years 2026-2027 and 2027-2028 using the Community Benefit Fund Account (005-0110-413-4251) while staff identify alternative funding sources through arts grants, donations, and sponsorships by individuals, businesses or organizations?
California Environmental Quality Act
This program is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.
FISCAL IMPACT
The fiscal impact of the Utility Box Art Program is $13,704 per year in FY 2026-27 and FY 2027-28 for a total of $27,408, to be paid from the Community Benefits Program Fund (Fund 005) which has a current balance of $960,000. These costs will be included in the proposed biennial budget to be presented to Council on May 19, 2026.
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Funding will support:
Artist stipends for painted and vinyl-wrapped utility boxes Vinyl fabrication and installation
Paint, materials, and anti-graffiti coatings
Over the next two years of program implementation, staff will explore potential sponsorship or partnership opportunities to help offset program costs and expand the number of utility boxes included in future phases. This may include individual, business, and nonprofit sponsorship of utility boxes or the program. Any such opportunities would be brought forward to the City Council in accordance with the City’s Sponsorship Policy and would supplement future funding considerations. Identifying additional funding sources will help support the long-term sustainability of the program.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Innovation
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DATE: May 4, 2026
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Priscilla Schaus, Communications Director/City Clerk DEPARTMENT: Communications/City Clerk
SUBJECT: RESOLUTION ESTABLISHING POLICY ON HOW TO ADDRESS
DISRUPTION OF REMOTE ACCESS DURING PUBLIC OPEN
MEETINGS OF CITY COUNCIL IN COMPLIANCE WITH SB 707
RECOMMENDATION
It is recommended that the City Council adopt a resolution (Attachment 1) establishing a Disruption Policy that will establish steps on how to address disruption of telephonic or internet service connection during public open meetings of City Council in compliance with Senate Bill 707 (“SB 707”).
EXECUTIVE SUMMARY
SB 707 requires the City to establish a policy on how to address disruption of telephonic or internet service connection during a public open meeting of City Council (Government Code section 54953.8). The policy must be implemented by July 1, 2026.
BACKGROUND/ANALYSIS
On October 3, 2025, Governor Gavin Newsom signed SB 707 into law with the intent to strengthen open meeting laws, promote governmental transparency, and increase public participation during local government meetings. SB 707 requires all “eligible legislative bodies” to comply with additional meeting requirements for public open meetings to be accessible for public viewing and participation. The City meets the statutory definition under SB 707 to be an “eligible legislative body” because the City population exceeds 30,000 residents.
As an “eligible legislative body,” the City is required to offer remote public access to open public meetings by either (1) two-way telephonic service or (2) two-way audiovisual
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platforms (Government Code section 54953.8). The City already complies with this SB 707 requirement of conducting City Council open session meetings in a hybrid format via Zoom, which meets the definition of a two-way audiovisual platform 1. Additionally, to ensure public access and participation, the two-way audiovisual platform shall provide the public with an opportunity to provide public comment with the same time allotment as a person attending a meeting in person. Furthermore, SB 707 requires all “eligible legislative bodies” to establish a policy on how to address disruption of telephonic or internet service connection that occurs during public open meetings. The City Council is the City’s only “eligible legislative body” for purposes of this policy.
By July 1, 2026, the City Council will need to formally adopt a policy that establishes the City’s procedures on how to address disruption of remote public access to open session meetings of City Council. Staff prepared a policy to comply with the new Brown Act provisions and the policy meets the statutory requirements under SB 707. Specifically, the policy outlines the procedural steps for Council to follow if the hybrid Zoom platform is disrupted which will include Council to decide whether to adjourn the open session or recess from open session for one hour or until remote access services are restored. If remote access services cannot be restored within one hour and Council intends to continue with open session, then Council must conduct a roll-call vote confirming that good faith efforts were made and that the public interest in continuing the meeting outweighs the need for remote access (Government Code Section 54953.4(b)(1)).
Members of the public will still be able to view City Council meetings using any of the resources listed below if the hybrid Zoom platform services cannot be restored:
• Web stream; or
• Meeting in-person location
Upon adoption, the requirements under the policy would take effect immediately.
California Environmental Quality Act
The adoption of the policy not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment.
FISCAL IMPACT
There is no fiscal impact on the City associated with the adoption of the Disruption Policy. 1 “Two-way audiovisual platform” means an online platform that provides participants with the ability to participate in a meeting via both an interactive video conference and a two-way telephonic service. A two-way audiovisual platform may be structured to disable the use of video for the public participants. (Government Code Section 54957.96 (b)(1)).
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CITY COUNCIL VISION, MISSION, and VALUE/PRIORITY AREA
City Council Operations and Improved Community Engagement ATTACHMENTS:
Attachment 1 — Resolution
Attachment 2 — Disruption Policy
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RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY ADOPTING
POLICY FOR DISRUPTION OF REMOTE ACCESS DURING PUBLIC OPEN MEETINGS OF CITY COUNCIL CONSISTENT WITH SB 707
CITY OF FOSTER CITY
WHEREAS, pursuant to Senate Bill 707, Government Code section 54953.4 requires that, beginning July 1, 2026, eligible legislative bodies provide members of the public an opportunity to attend open and public meetings through a two-way telephonic service or a two-way audiovisual platform, subject to the exceptions stated in that section; and
WHEREAS, Government Code section 54953.4, subdivision (b)(1)(A)(i)(I)(ib), requires an eligible legislative body, on or before July 1, 2026, to approve at a noticed public meeting in open session a policy addressing disruption of telephonic or internet service occurring during meetings where remote access is required; and WHEREAS, Government Code section 54953.4, subdivision (b)(1)(A)(i)(I)(ib)–(Ic), establishes requirements for recessing and reconvening a meeting and for making good faith efforts to restore service if a disruption prevents members of the public from attending or observing the meeting remotely; and
WHEREAS, the City Council is the City’s only “eligible legislative body” for purposes of Government Code section 54953.4; and
WHEREAS, the City Council desires to adopt a policy that implements, and does not expand upon, the requirements of Government Code section 54953.4.
NOW, THEREFORE BE IT RESOLVED, that the City of Foster City, acting by and through its City Council, having considered and been fully advised in the matter and good cause appearing therefore do hereby as follows:
SECTION 1. Incorporation of Recitals
The recitals above are true and correct and incorporated into the body of this Resolution by reference.
SECTION 2. Adoption
The City Council adopts the Disruption Policy attached hereto as Exhibit “A.”
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SECTION 3. Implementation
This resolution implements Government Code section 54953.4. It does not create rights beyond those required by state law and does not expand the obligations imposed by that section.
SECTION 4. Effective Date
This resolution takes effect immediately upon adoption.
SECTION 5. Severability
The City Council hereby declares every section, paragraph, sentence, cause, and phrase of this resolution is severable. If any section, paragraph, sentence, clause, or phrase of this resolution is for any reason found to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining sections, paragraphs, sentences, clauses or phrases.
SECTION 6. Certification
The City Clerk shall attest and certify to the adoption of this resolution.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the regular meeting held on the 4th day of May 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
___________________________
ART KIESEL, MAYOR
ATTEST:
__________________________________
PRISCILLA SCHAUS, CITY CLERK
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5 9
9 CITY OF FOSTER CITY
DISRUPTION POLICY
1. PURPOSE
The purpose of this policy is to establish procedures for responding to disruption(s) of telephonic or internet services that provide two-way remote access for the public to attend and participate during open and public meetings of City Council. Pursuant to Government Code Section 54953.4, the City Council adopts this policy to ensure statutory compliance, transparency, and continuity of public participation and government operation during technological disruptions a public open meetings of City Council.
2. BACKGROUND
Senate Bill 707 (2025) (“SB 707”) requires all “eligible legislative bodies” to offer remote public participation for City Council meetings through either (1) two-way telephonic service or (2) two-way audiovisual platforms. Pursuant to SB 707 definition, the City of Foster City is an “eligible legislative body.” Additionally, SB 707 amended the Brown Act to require all “eligible legislative bodies” to adopt, on or before July 1, 2026, a policy on how to address telephonic or internet service connection disruption that inhibits the public from accessing or observing a public open meeting of City Council.
3. DEFINITIONS
For purposes of this policy:
• “Disruption” means any failure, outage, or other interruption in the City’s telephonic or internet service that prevents members of the public from attending or participating in public open meetings of City Council.
• “Remote Access Services” means the two-way telephonic service and/or two-way audiovisual platform used to provide real-time remote public attendance and observation of public open meetings of City Council.
4. APPLICABILITY
This policy applies to all open and public meetings of City Council at which remote public participation is required per Government Code section 54953.4(b)(1)(A)(i)(I)(ia) but does not apply in those circumstances where the Brown Act provides that remote public access is not required.
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2 4
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9 5. DISRUPTION PROCEDURES
5.1. Response to Disruption of Remote Access Services
If Remote Access Services are disrupted during an public open meeting for City Council then the following steps must take place:
A. City Council shall immediately announce the disruption to the public; B. City Council must either adjourn the open session or recess from open session for at least one (1) hour to make a good faith effort to restore the Remote Access Services;
C. During recess, City Council may meet in closed session as permitted by Government Code section 54953.4;
D. If following recess of the meeting, Remote Access Services have not been restored within (1) hour, then City Council may reconvene the meeting if it adopts, by rollcall vote, a finding that it made good faith efforts to restore the Remote Access Services and that the public interest in continuing the meeting outweighs the public interest in remote public access.
5.2. Efforts to Restore Remote Access Services
City Council shall make good faith efforts to restore Remote Access Services, which may include:
A. Troubleshooting platform or teleconferencing software; B. Resetting or replacing audiovisual equipment;
C. Attempting alternative connection methods;
D. Contacting necessary support staff or service providers; or E. Switching to back-up equipment or platforms, if available.
Pursuant to the Recordkeeping section of this policy, the City Clerk shall make a record and enter into the meeting minutes the disruption and restoration efforts undertaken by City Council.
6. RECONVENE OPEN SESSION
6.1. Timing
Open session may reconvene upon restoration of Remote Access Services or if after one (1) hour has elapsed from the time of disruption, the finding required by Section 6.2 of this policy has been adopted by the Council.
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9 6.2. Inability to Restore Remote Access Services
If Remote Access Services have not been restored after one (1) hour, the City Council may reconvene the meeting in open session only after the following, or a substantially similar, finding is adopted by a roll call vote of the Council:
“The City Council of Foster City has made good faith efforts to restore telephonic or internet service in accordance with its adopted policy and the public interest in continuing the meeting outweighs the public interest in remote public access.”
7. RECORDKEEPING
If Remote Access Services were disrupted, then the City Clerk shall make a record and enter into the meeting minutes the following:
A. The nature and time of the disruption;
B. Whether open session was adjourned or City Council complied to the procedures pursuant to Section 5.1;
C. The restoration efforts undertaken;
D. The time the meeting was reconvened (if applicable); and E. The finding adopted pursuant to Section 6.2 (if applicable).
8. REVIEW AND UPDATES
This policy like other City Council policies, may be reviewed and amended from time-to- time by the City Council. As expressly required by the Brown Act, amendments to this policy must be approved at a properly noticed public meeting in open session, and may not be approved on the consent calendar.
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DATE: May 4, 2026
TO: Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
Marlene Suhashini, Assistant City/District Manager
FROM: Bejamin Stock, City Attorney/District Legal Counsel Andrew Brozyna, Public Works Director
DEPARTMENT: City Attorney
Public Works
SUBJECT: AUTHORIZING EXECUTION OF A PROJECT LABOR
AGREEMENT (PLA) BETWEEN THE CITY OF FOSTER
CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT AND
THE SAN MATEO COUNTY BUILDING AND CONSTRUCTION
TRADES COUNCIL FOR THREE (3) CITY/DISTRICT PUBLIC
WORKS PROJECTS
RECOMMENDATION
It is recommended that City Council/EMID Board of Directors adopt the attached resolution authorizing the Mayor/President to enter into a Project Labor Agreement (PLA) with the San Mateo County Building and Construction Trades Council for three (3) City/District Public Works Projects.
EXECUTIVE SUMMARY
At its November 4, 2024 meeting the City Council directed staff to negotiate a PLA with the San Mateo Building Trades Council. The proposed agreement is a result of negotiations between representatives of local labor Unions and the San Mateo Building and Trades Council and City Staff. It establishes various requirements for the employment of union labor on three (3) City/District Projects over the next five (5)
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years. The purpose of the agreement is to promote the efficiency of construction operations for the City/EMID through the use of skilled labor resulting in quality construction outcomes. It establishes a framework for resolving labor disputes and grievances without strikes or lockouts, thereby supporting the public interest in the timely and cost-effective completion of each Project covered by this Agreement.
BACKGROUND/ANALYSIS
A PLA is a pre-hire collective bargaining agreement between one or more labor organizations and a public agency that establishes the terms and conditions of work for the construction of select capital projects. PLAs are also known as project stabilization agreements, labor stabilization agreements, community workforce agreements, or may take another similar name.
Construction projects can involve multiple contractors and trades, have critical timelines for completion, and require a skilled and properly trained workforce to ensure successful and timely completion. Local governments can require that recipients of government funding for a construction project use PLAs to help manage the uncertainty and delays that can come from having so many contractors and trades involved. If that local government requires PLAs, the local government entity can enter into an agreement with a union or group of unions, such as an area trade union council, prior to soliciting bids from contractors to do the work. The PLA would then be included into the bid specifications – ensuring that any prospective bidder or contractor interested in submitting a bid understands that the job will require union labor.
A PLA typically includes the following provisions:
• Standards for wages and benefits;
• Provisions that prohibit workers from engaging in strikes, work stoppages, slowdowns, and other dispute mechanisms;
• Requirements that contractors hire workers who are referred from union hiring halls; and
• Dispute and grievance resolution procedures.
At the City Council meeting on August 19, 2024, former Councilmember Hindi requested, and a majority of the Council supported, a future agenda item to discuss union labor agreements (or PLA) for large projects. On November 4, 2024 City Council provided direction via a 3-1-1 vote, to negotiate a PLA with the San Mateo Building Trades Council to have a 5-year term duration minimum and priority for local workforce hires in Foster City, San Mateo County, and the greater Bay Area.
In accordance with Council’s direction, staff (City Manager, Assistant City Manager, Public Works Director and the City Attorney) met with labor union representatives to discuss and negotiate a PLA. The proposed PLA would be executed between the City of City/District and the San Mateo County Building and Construction Trades Council.
Contractors and subcontractors would be required to agree to be bound to the PLA as a condition of performing work on select projects.
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The proposed agreement includes:
Provisions related to the use of skilled labor, union referral procedures, wages and benefits
Support for the employment of skilled construction workers from Foster City and San Mateo County
The establishment of a consistent labor relations framework for covered projects, including common procedures for referrals, pre-job conferences, and work assignments
Job creation through the incorporation of apprenticeship, pre-apprenticeship, local hire, and veteran’s workforce provisions
Provisions related to labor dispute resolution, no-strike and no-lockout requirements
To obtain the highest impact of the benefits of a PLA, including minimizing labor disruptions and local job creation, staff recommends three (3) projects in the five-year Capital Improvement Program estimated to total approximately $38.9 million to be included in the PLA due to their size, complexity, and potential for multiple trades to be involved. The agreement would remain in effect through the completion of each covered project. If it is anticipated that if any of the three (3) projects identified will not be advertised for bid by the City/EMID within five (5) years of the effective date of this Agreement, the City/EMID and the Building and Construction Trades Council will meet and confer in good faith to identify a replacement project of comparable type and value to serve as a substitute for that project. If a substitute project is identified, the parties will formalize the substitution through a written amendment to the Agreement. If no substitute project is identified, the City Council will determine whether the Agreement should continue to apply to the original project or whether an alternative project should be designated.
The agreement will cover all construction phases of the following projects (see Addendum B of the agreement):
1. (CIP 301-717) Lagoon Pump Station Seismic Rehabilitation and Capacity Enhancement Project
2. (CIP 455-719) Sanitary Sewer Lift Station Improvements – Phase 6
3. (CIP 301-698) Transportation Safety Signalization Upgrades
FISCAL IMPACT
There is no direct fiscal impact associated with this report. However, the PLA establishes various requirements for the employment of labor on the named projects in the agreement. Costs associated with compliance of these requirements will be borne by each project.
The effect of a PLA on overall project costs varies across studies; some suggest potential cost increases—sometimes estimated in the range of 10 to 20 percent—while
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others find no significant impact. As a result, actual fiscal impact may vary depending on project and market conditions and cannot be precisely determined at this time.
California Environmental Quality Act
This is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Public Safety and Social Equity
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution
Attachment 3 – Agreement
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RESOLUTION NO.____________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY
APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A PROJECT LABOR
AGREEMENT WITH THE SAN MATEO COUNTY BUILDING AND CONSTRUCTION
TRADES COUNCIL
CITY OF FOSTER CITY
WHEREAS, at its November 4, 2024 meeting the City Council directed staff to negotiate a Project Labor Agreement with the San Mateo Building Trades Council to have a 5-year term duration minimum and priority for local workforce hires in Foster City, San Mateo County, and the greater Bay Area; and
WHEREAS, the proposed agreement is a result of negotiations between representatives of local labor Unions and the San Mateo Building and Trades Council and City Staff and establishes various requirements for the employment of union labor on three City Projects over the next 5 years; and
WHEREAS, the purpose of the agreement is to promote the efficiency of construction operations for the City/EMID through the use of skilled labor resulting in quality construction outcomes, and to provide for the peaceful settlement of labor disputes and grievances without strikes or lockouts, thereby promoting the public interest in assuring the timely and economical completion of each Project covered by this Agreement; and
WHEREAS, the agreement will cover all construction phases of the following projects:
1. (CIP 301-717) Lagoon Pump Station Seismic Rehabilitation and Capacity Enhancement Project
2. (CIP 455-719) Sanitary Sewer Lift Station Improvements – Phase 6
3. (CIP 301-698) Transportation Safety Signalization Upgrades NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby authorize the Mayor to execute the Project Labor Agreement with the San Mateo County Building and Construction Trades Council ands finds the agreement exempt from review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that that may cause a direct, or reasonably foreseeable indirect, physical change in the environment.
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PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the regular meeting held on the 4th day of May, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ART KIESEL, MAYOR
ATTEST:
PRISCILLA SCHAUS, CITY CLERK
8.2 Attachment 1 - City Resolution
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RESOLUTION NO.____________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT APPROVING AND AUTHORIZING THE PRESIDENT TO
EXECUTE A PROJECT LABOR AGREEMENT WITH THE SAN MATEO COUNTY
BUILDING AND CONSTRUCTION TRADES COUNCIL
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, at its November 4, 2024 meeting the Board of Directors directed staff to negotiate a Project Labor Agreement with the San Mateo Building Trades Council to have a 5-year term duration minimum and priority for local workforce hires in Foster City, San Mateo County, and the greater Bay Area; and
WHEREAS, the proposed agreement is a result of negotiations between representatives of local labor Unions and the San Mateo Building and Trades Council and City Staff and establishes various requirements for the employment of union labor on three City Projects over the next 5 years; and
WHEREAS, the purpose of the agreement is to promote the efficiency of construction operations for the City/EMID through the use of skilled labor resulting in quality construction outcomes, and to provide for the peaceful settlement of labor disputes and grievances without strikes or lockouts, thereby promoting the public interest in assuring the timely and economical completion of each Project covered by this Agreement; and
WHEREAS, the agreement will cover all construction phases of the following projects:
1. (CIP 301-717) Lagoon Pump Station Seismic Rehabilitation and Capacity Enhancement Project
2. (CIP 455-719) Sanitary Sewer Lift Station Improvements – Phase 6
3. (CIP 301-698) Transportation Safety Signalization Upgrades NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal Improvement District does hereby authorize the President to execute the Project Labor Agreement with the San Mateo County Building and Construction Trades Council ands finds the agreement exempt from review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that that may cause a direct, or reasonably foreseeable indirect, physical change in the environment.
8.2 Attachment 2 - EMID Resolution
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PASSED AND ADOPTED as a resolution of the Board of Directors of the Estero Municipal Improvement District at the regular meeting held on the 4th day of May, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ART KIESEL, PRESIDENT
ATTEST:
PRISCILLA SCHAUS, DISTRICT SECRETARY
8.2 Attachment 2 - EMID Resolution
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Project Labor Agreement for the City of Foster City/Estero Municipal Improvement District
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CITY OF FOSTER CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT
PROJECT LABOR AGREEMENT
This Project Labor Agreement is entered into this __ day of ____________, 2026 by and between the City of Foster City/Estero Municipal Improvement District (referred to herein as the “City/EMID”), together with contractors and subcontractors of all tiers, who shall become signatory to this Agreement by signing the “Agreement to be Bound” (Addendum A) (referred to herein as “Contractor(s)/Employer(s)”), and the San Mateo County Building and Construction Trades Council (referred to herein as the “Trades Council”) and the local Unions that have executed this Agreement (referred to collectively herein as the “Union(s)”).
The purpose of this Agreement is to promote the efficiency of construction operations for the City/EMID through the use of skilled labor resulting in quality construction outcomes, and to provide for the peaceful settlement of labor disputes and grievances without strikes or lockouts, thereby promoting the public interest in assuring the timely and economical completion of each Project covered by this Agreement.
WHEREAS, the timely and successful completion of each Project is of the utmost importance to meet the needs of the City/EMID and avoid increased costs resulting from delays in construction; and
WHEREAS, this Agreement will facilitate the use of skilled labor to enhance the City’s/EMID’s quality construction outcomes and promote the public interest in assuring the timely and economical completion of each Project; and
WHEREAS, given that large numbers of workers of various skills will be required in the performance of construction of each Project, this Agreement will facilitate harmonious labor relations; and
WHEREAS, the interests of the general public, the City/EMID, the Unions, and the Contractors/Employers would be best served if the construction work proceeded in an orderly manner without disruption because of strikes, sympathy strikes, work stoppages, picketing, lockouts, slowdowns or other interferences with work; and WHEREAS, the Contractors/Employers and the Unions desire to mutually establish and stabilize wages, hours and working conditions for the workers employed on each Project and to encourage close cooperation among the Contractors/Employers and the Unions so that a satisfactory, continuous and harmonious relationship will exist; and WHEREAS, the parties agree that one of the primary purposes of this Agreement is to avoid the tensions that might arise on the Projects if Union and non-union workers of different employers were to work side by side on the Projects, potentially leading to labor disputes that could delay completion of the Projects; and
WHEREAS, this Agreement is not intended to replace, interfere with, abrogate, diminish or modify existing local or national collective bargaining agreements in effect during the
8.2 Attachment 3 - Agreement
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Project Labor Agreement for the City of Foster City/Estero Municipal Improvement District
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duration of the Projects, insofar as a legally binding agreement exists between the Contractors/Employers and the Unions, except to the extent that the provisions of this Agreement are inconsistent with said collective bargaining agreements, in which event the provisions of this Agreement shall prevail; and
WHEREAS, the contract(s) for construction work on each Project will be awarded in accordance with the applicable provisions of the California State Public Contract Code and all state, local and federal laws; and
WHEREAS, the parties to this Agreement pledge their full good faith and trust to work toward the mutually satisfactory completion of each Project;
NOW, THEREFORE, IT IS AGREED BETWEEN AND AMONG THE PARTIES HERETO, AS FOLLOWS:
ARTICLE I
DEFINITIONS
1.1 “Agreement” means this Project Labor Agreement.
1.2 “Agreement to be Bound” means the agreement (attached hereto as Addendum A) that shall be executed by each and every Contractor/Employer as a condition of working on each Project.
1.3 “City” means the City of Foster City and its governing board, officers, agents and employees, including managerial personnel.
1.4 “Completion” means that point at which there is Final Acceptance by the City/EMID of a Construction Contract, and the City/EMID has filed a Notice of Completion. For purposes of this definition, “Final Acceptance” means that point in time at which the City/EMID has determined upon final inspection that the work has been completed in all respects and all required contract documents, contract drawings, warranties, certificates, manuals and data have been submitted and training completed in accordance with the contract documents and the City/EMID has executed a written acceptance of the work.
1.5 “Construction Contract” means the public works or improvement contract(s) (including design-bid, design-build, lease-leaseback or other contracts under which construction of each Project is done) awarded by the City/EMID that are necessary to complete each Project.
1.6 “Contractor(s)/Employer(s)” or “Contractor(s)” or “Employer(s)” means any individual, firm, partnership or corporation (including the prime contractor, general contractor, design-build entity, lease-leaseback entity or equivalent entity), or combination thereof, including joint ventures, and their successors and assigns, that is an independent business enterprise and enters into a contract with the City/EMID with respect to the construction of any part of each Project, and all contractors and subcontractors of any tier.
1.7 “Council” or “Trades Council” means the San Mateo County Building and Construction Trades Council.
8.2 Attachment 3 - Agreement
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Project Labor Agreement for the City of Foster City/Estero Municipal Improvement District
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1.8 “EMID” means Estero Municipal Improvement District.
1.9 “Master Agreement” means the Master Collective Bargaining Agreement of each craft Union signatory hereto.
1.10 “Project” means the projects identified on Addendum B attached hereto. Multiple Construction Contracts may be required to complete an integrated Project. The City/EMID and the Trades Council may mutually agree in writing to add additional projects or components to be covered by this Agreement. The term “Project” applies to each, and all projects as defined in this section, whether used in the singular or plural herein.
1.11 “Union” or “Unions” means the San Mateo County Building and Construction Trades Council and the labor organizations identified on the attached Union Signatures page that become signatory to this Agreement, acting on their own behalf and on behalf of their respective affiliates and member organizations whose names are subscribed hereto and who have through their officers executed this Agreement.
ARTICLE II
SCOPE OF AGREEMENT
2.1 Parties: This Agreement applies to and is limited to all Contractors/Employers performing work under a Construction Contract on each Project (including subcontractors at any tier), and their successors and assigns, the City/EMID, the Trades Council, and the Unions signatory to this Agreement.
2.2 Applicability: This Agreement governs all Construction Contracts awarded on each Project. For purposes of this Agreement, Construction Contracts shall be considered Completed as set forth in Section 1.4, except when the City directs a Contractor to engage in repairs, warranty work, modifications, or punch list work under a Construction Contract or when a Contractor performs work under a change order for a Construction Contract.
2.3 Covered Work: This Agreement covers, without limitation, all site preparation, surveying, construction, alteration, demolition, installation, improvement, remediation, retrofit, painting or repair of buildings, structures and other works, and related activities for each Project that is within the craft jurisdiction of one of the Unions and that is directly or indirectly part of each Project, including, without limitation to the following examples, landscaping and temporary fencing, temporary HVAC, geotechnical and exploratory drilling, soils and materials testing and inspection, pipelines (including those in linear corridors built to serve each Project), pumps, pump stations, start-up, modular furniture installation, jobsite access/traffic control and clean-up.
This Agreement covers work done for each Project in temporary yards, dedicated sites, or areas adjacent to each Project, and at any on-site or off-site batch plant constructed to supply materials to each Project.
2.3.1 This Agreement applies to any start-up, calibration, commissioning, performance testing, repair, maintenance, and operational revisions to systems and/or subsystems
8.2 Attachment 3 - Agreement
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for the Project performed after Completion pursuant to a Construction Contract, unless performed by City employees.
2.3.2 This Agreement covers all on-site fabrication work over which the City/EMID, Contractor(s)/Employer(s) or subcontractor(s) possess the right of control (including work done for the Project in any temporary yard or area established for the Project). This Agreement also covers any off-site work, including fabrication, that is traditionally performed by the Unions and is directly or indirectly part of the Project, provided such work is covered by a Master Agreement or local addenda to a national agreement of the applicable Union(s).
2.3.3 This Agreement covers any 3D BIM modeling and mechanical computer aided drafted and/or hand detailing of shop and field drawings used for fabrication/coordination or erection, provided such work is covered by a Master Agreement or local addenda to a national agreement of the applicable Union(s).
2.3.4 Except for the delivery of supplies, equipment or materials that are stockpiled for later use, this Agreement covers all construction trucking work, including the hauling and delivery of ready-mix, asphalt, aggregate, sand, soil or other fill or similar material that is directly incorporated into the construction process as well as the off hauling of soil, sand, gravel, rocks, concrete, asphalt, excavation materials, construction debris and excess fill, material and/or mud. Contractor(s)/Employer(s), including brokers, of persons providing construction trucking work shall provide certified payroll records to the City/EMID within ten (10) days of written request or as required by the bid specifications.
2.3.5 Work covered by this Agreement within the following craft jurisdictions shall be performed under the terms of their National Agreements as follows: the National Transient Lodge (NTL) Articles of Agreement, the National Stack/Chimney Agreement, the National Cooling Tower Agreement, the National Agreement of Elevator Constructors, and any instrument calibration work and loop checking shall be performed under the terms of the UA/IBEW Joint National Agreement for Instrument and Control Systems Technicians, with the exception that Articles IV, XII and XIII of this Agreement shall apply to such work.
2.4 Exclusions: The following shall be excluded from the scope of this Agreement.
2.4.1 This Agreement shall not apply to work performed by the City’s own employees as permitted by the Public Contract Code.
2.4.2 This Agreement shall not apply to a Contractor/Employer’s non-construction craft executives, managerial employees, administrative personnel, and supervisors above the level of general foreman, unless covered by a Master Agreement.
2.4.3 This Agreement shall not apply to any non-Project work performed on or near or leading to the site of work covered by this Agreement that is undertaken by state, county,
8.2 Attachment 3 - Agreement
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city, or other governmental bodies or their contractors. Work performed by public or private utilities including all electrical utility, voice-data-video, and security installation work ahead of and up to the electrical service entry connection or the main point of entry into the building shall be excluded. All electrical utility, voice-data-video, and security installation work performed after the electrical utility service entrance, or the main point of entry shall be Covered Work.
Additionally, all contracted work performed ahead of the service entrance connection and main point of entry that is inside the property line and provides for access to the building via a conduit or series of conduits shall be Covered Work.
2.4.4 This Agreement shall not apply to the off-site maintenance of leased equipment and on-site supervision of such work.
2.4.5 This Agreement shall not apply to a professional services contract entered into by the City/EMID for design services prior to solicitation of the general contract for the Project.
2.4.6 This Agreement shall not apply to the District’s purchase of Project-related equipment and/or materials unless said purchase includes Covered Work, in which case the Covered Work itself shall be covered by this Agreement.
2.5 Award of Contracts: It is understood and agreed that the City/EMID has the right to select any qualified bidder for the award of Construction Contracts under this Agreement. The bidder need only be willing, ready and able to execute and comply with this Agreement. It is further agreed that this Agreement shall be included in all invitations to bid or solicitations for proposals from contractors or subcontractors for work on each Project. A copy of all invitations to bid shall be provided to the Trades Council at the time of issuance. The Trades Council and Unions shall work cooperatively with the City/EMID to facilitate competitive bidding and encourage multiple bids for Projects covered by this Agreement. To that end, the Trades Council and the Unions will use their best efforts to conduct outreach to interested contractors and provide information to those contractors to support bidding the work, and take any other reasonable steps to encourage submission of bids to the City/EMID for Projects covered by this Agreement.
ARTICLE III
EFFECT OF AGREEMENT
3.1 By executing this Agreement, the Trades Council, the Unions and the City/EMID agree to be bound by each and all the provisions of the Agreement.
3.2 By accepting the award of work under a Construction Contract for each Project, whether as a Contractor or subcontractor thereunder, all Contractors/Employers agree to be bound by every provision of this Agreement and agree to evidence their acceptance prior to the
8.2 Attachment 3 - Agreement
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commencement of work by executing the Agreement to be Bound in the form attached hereto as Addendum A.
3.3 At the time that any Contractor/Employer enters into a subcontract with any subcontractor providing for the performance of work under a Construction Contract, the Contractor/Employer shall provide a copy of this Agreement to said subcontractor and shall require the subcontractor, as a condition of accepting the award of a construction subcontract, to agree in writing, by executing the Agreement to be Bound, to be bound by each and every provision of this Agreement prior to the commencement of work. The obligations of a Contractor may not be evaded by subcontracting. If the subcontractor refuses to execute the Agreement to be Bound, then such subcontractor shall not be awarded a Construction Contract on any Project.
3.4 This Agreement shall only be binding on the signatory parties hereto, and their successors and assigns, and shall not apply to the parents, affiliates, subsidiaries, or other ventures of any such party. Each Contractor shall alone be liable and responsible for its own individual acts and conduct and for any breach or alleged breach of this Agreement, except as otherwise provided by law or the applicable Master Agreement. Any dispute between the Union(s) and the Contractor(s) with respect to compliance with this Agreement shall not affect the rights, liabilities, obligations and duties between the Union(s) and other Contractor(s) party to this Agreement.
3.5 It is mutually agreed by the parties that any liability by a Union signatory to this Agreement shall be several and not joint. Any alleged breach of this Agreement by a Union shall not affect the rights, liabilities, obligations and duties between the Contractor(s) and the other Union(s) party to this Agreement.
3.6 The provisions of this Agreement, including the Master Agreements incorporated herein by reference, shall apply to the work covered by this Agreement, notwithstanding the provisions of any other local, area and/or national agreements which may conflict with or differ from the terms of this Agreement. To the extent a provision of this Agreement conflicts with a Master Agreement, the provision of this Agreement shall prevail. Where a provision of a Master Agreement does not conflict with this Agreement, the provision of the Master Agreement shall apply.
ARTICLE IV
WORK STOPPAGES, STRIKES, SYMPATHY STRIKES AND LOCKOUTS
4.1. The Unions, the City/EMID, and the Contractor(s)/Employer(s) covered by this Agreement agree that for the duration of each Project:
4.1.1 There shall be no strikes, sympathy strikes, work stoppages, picketing, hand billing or otherwise advising the public that a labor dispute exists, or slowdowns of any kind, for any reason, by the Unions or employees employed on the Project, at the job site of the
8.2 Attachment 3 - Agreement
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Project or any other City/EMID facility because of a dispute on the Project. Disputes arising between the Unions and Contractor(s)/ Employer(s) on other City/EMID projects are not governed by the terms of the Agreement or this Article.
4.1.2 There shall be no lockout of any kind by a Contractor/Employer of workers employed on each Project.
4.1.3 If a Master Agreement expires before the Contractor/Employer completes the performance of work under a Construction Contract and the Union or Contractor/Employer gives notice of a demand for a new or modified Master Agreement, the Union agrees that it will not strike on work covered by this Agreement and the Union and the Contractor/Employer agree that the expired Master Agreement will continue in full force and effect for work covered under this Agreement until a new or modified Master Agreement is reached. If the new or modified Master Agreement provides that any terms of the Master Agreement shall be retroactive, the Contractor/ Employer agrees to comply with any retroactive terms of the new or modified Master Agreement that are applicable to any employee(s) on the Project during the interim, with retroactive payment due within seven (7) calendar days of the effective date of the new or modified Master Agreement.
4.1.4 In the case of nonpayment of wages or trust fund contributions on the Project, the Union shall give the City/EMID and the Contractor/Employer three (3) business days’ notice when nonpayment of trust fund contributions has occurred, and one (1) business days’ notice when nonpayment of wages has occurred or when paychecks being tendered to a financial institution normally recognized to honor such paychecks will not honor such paycheck, of the intent to withhold labor from the Contractor/Employers’ or their subcontractor’s workforce, during which time the Contractor/Employer may correct the default. In this instance, a Union’s withholding of labor (but not picketing) from a Contractor/Employer who has failed to pay its fringe benefit contributions or failed to meet its weekly payroll shall not be considered a violation of this Article.
4.1.5 Notification: If the City/EMID or any Contractor contends that any Union has violated this Article, it will so notify in writing the Senior Executive of the Trades Council and the Senior Executive of the Union, setting forth the facts alleged to violate the Article, prior to instituting the expedited arbitration procedure set forth below. The Trades Council will immediately use its best efforts to cause the cessation of any violation of this Article. The leadership of the Union will immediately inform the workers of their obligations under this Article. A Union complying with this obligation shall not be held responsible for the unauthorized acts of employees it represents.
4.2 Expedited Arbitration: Any party to this Agreement shall institute the following procedure, prior to initiating any other action at law or equity, when a breach of this Article IV is alleged to have occurred.
8.2 Attachment 3 - Agreement
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4.2.1 A party invoking this procedure shall notify Robert Hirsch, as the permanent arbitrator, or Barry Winograd, as the alternate arbitrator, under this procedure. In the event the permanent arbitrator is unavailable at any time, the alternate will be contacted. If neither is available, the parties shall select the arbitrator from the list in Section 12.4. Notice to the arbitrator shall be by the most expeditious means available, with notice by email and telephone to the City/EMID, the involved Contractor, and the party alleged to be in violation, and to the Trades Council and involved local Union if a Union is alleged to be in violation.
4.2.2 Upon receipt of said notice, the City/EMID will contact the permanent arbitrator named above, or the alternate if the permanent arbitrator is not available, who will attempt to convene a hearing within twenty-four (24) hours if it is contended that the violation still exists.
4.2.3 The arbitrator shall notify the parties by email and telephone of the place and time for the hearing. Said hearing shall be completed in one session, which, with appropriate recesses at the arbitrator’s discretion, shall not exceed twenty-four (24) hours unless otherwise agreed upon by all parties. The failure of any party to attend said hearings shall not delay the hearing of evidence or the issuance of an award by the arbitrator.
4.2.4 The sole issue at the hearing shall be whether a violation of Section 4.1 of the Agreement has occurred. The arbitrator shall have no authority to consider any matter of justification, explanation or mitigation of such violation or to award damages, which issue is reserved for court proceedings, if any. The award shall be issued in writing within three (3) hours after the close of the hearing and may be issued without a written opinion. If any party desires a written opinion, one shall be issued within fifteen (15) calendar days, but the parties shall not delay compliance with or enforcement of the award due to the issuance of a written opinion. The arbitrator may order cessation of the violation of this Article, and the arbitrator’s award shall be served on all parties by hand or registered mail upon issuance. Should a party found in violation of this Article fail to comply with the arbitrator’s award ordering the party to cease the violation, the party in violation shall pay to the affected party as liquidated damages the sum of ten thousand dollars ($10,000.00) per shift for which it failed to comply, or portion thereof, until such violation is ceased. The arbitrator shall retain jurisdiction to resolve any disputes regarding the liquidated damages claimed under this section.
4.2.5 The arbitrator’s award may be enforced by any court of competent jurisdiction upon the filing of this Agreement and all other relevant documents referred to above in the following manner. The party filing such enforcement proceedings shall give written notice to the other party. In a proceeding to obtain a temporary order enforcing the arbitrator’s award as issued under this Article, all parties waive the right to a hearing and agree that such proceeding may be ex parte. However, such an agreement does not waive any party’s right to seek or participate in a hearing for a final order of enforcement. Any court order enforcing the arbitrator’s award shall be served on all parties by hand or delivered by certified mail.
8.2 Attachment 3 - Agreement
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4.2.6 Any rights created by statute or law governing arbitration proceedings inconsistent with the above procedure, or which interfere with compliance with the above procedure, are waived by the parties.
4.2.7 The fees and expenses of the arbitrator shall be divided equally between the party instituting the arbitration proceedings provided in this Article and the party alleged to be in breach of its obligation under this Article.
4.2.8 Should either the permanent or the alternate arbitrator identified above no longer work as a labor arbitrator, the City/EMID and the Trades Council shall mutually agree to a replacement.
ARTICLE V
PRE-JOB CONFERENCES
5.1 Timing: The City and the Trades Council shall convene a pre-job conference at a mutually agreeable location and time, with the Unions and the representatives of all involved Contractors/Employers, who shall be prepared to announce craft assignments and discuss in detail the scope of work and the other issues set forth below, at least fourteen (14) calendar days prior to:
(a) The commencement of any Project work, and
(b) The commencement of Project work on any subsequently awarded Construction Contract.
5.2 The pre-job conference shall be conducted by the Trades Council and shall be attended by a representative of each participating Contractor and each affected Union, and the City/EMID may attend at its discretion.
5.3 The pre-job conference shall include but not be limited to the following subjects:
(a) A listing of each Contractor’s scope of work.
(b) The craft assignments.
(c) The estimated number of craft workers required to perform the work. (d) Transportation arrangements.
(e) The estimated start and completion dates of the work; and (f) Discussion of prefabricated materials.
5.4 Joint Administrative Committee: In order to ensure the terms of this Agreement are being fulfilled and concerns pertaining to the operation of this Agreement are addressed, the City/EMID and Trades Council shall establish a Joint Administrative Committee comprised of two (2) representatives designated by the City/EMID and two (2) representatives designated by the Trades Council. The Joint Administrative Committee shall meet on a periodic basis during the term of construction, at least semi-annually, to assess the implementation of this Agreement, review the progress of the Projects, and facilitate harmonious relations between the parties. Both
8.2 Attachment 3 - Agreement
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the City/EMID and the Trades Council shall have the right to call a meeting of the Joint Administrative Committee.
5.4.1 In the event the City/EMID is concerned about receiving an adequate number of competitive bids for a Project, the City/EMID may call a meeting of the Joint Administrative Committee to discuss the scope of work and potential interested contractors, and the Trades Council and Unions shall conduct outreach upon request by the City/EMID consistent with Section 2.5 herein.
ARTICLE VI
NO DISCRIMINATION
6.1 The Contractors/Employers and the Unions agree to comply with all anti- discrimination provisions of federal, state, and local law, to protect employees and applicants for employment, on each Project.
ARTICLE VII
UNION REPRESENTATION AND REFERRAL
7.1 The Contractors/Employers recognize the Unions as the sole bargaining representative of all craft employees performing Covered Work under this Agreement, and all such employees must be represented by a Union for the duration of their employment on each Project.
7.2 The Contractors/Employers shall make and transmit all deductions for Union dues, fees, and assessments that have been authorized by employees in writing in accordance with the applicable Master Agreement. This Agreement does not require any employee of a non-Union contractor to join a Union or to pay dues or fees to a Union as a condition of working on each Project; however, nothing in this Article is intended to supersede the requirements of the applicable Master Agreements as to Contractors/Employers signatory to such Master Agreements and as to employees of those Contractors/Employers who are performing Covered Work.
7.3 Authorized representatives of the Unions shall have access to each Project whenever work covered by this Agreement is being, has been, or will be performed on the Project.
7.4 Contractor(s)/Employer(s) performing construction work on each Project shall, in filling craft job requirements, utilize and be bound by the registration facilities and referral systems established or authorized by the Unions signatory hereto. The Contractor(s)/Employer(s) shall have the right to reject any applicant referred to by the Union(s), in accordance with the applicable Master Agreement.
8.2 Attachment 3 - Agreement
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7.5 Contractor(s)/Employer(s) shall have the unqualified right to select and hire directly all supervisors above the level of general foreman it considers necessary and desirable, without such persons being referred by the Union(s), unless such craft construction employee is covered by a Master Agreement.
7.6 In the event that referral facilities maintained by the Union(s) are unable to fill the requisition of a Contractor/Employer for employees within a forty-eight (48) hour period (Saturdays, Sundays and Holidays excluded) after such requisition is made by the Contractor/Employer, the Contractor/Employer shall be free to obtain the worker(s) from any source. A Contractor/Employer who hires a worker(s) to perform Covered Work on each Project pursuant to this section shall immediately provide the appropriate Union with the name and address of such worker(s) and shall immediately refer such worker(s) to the appropriate Union to satisfy the requirements of this Article.
7.7 Local Hire: The parties to this Agreement support the employment of skilled construction workers from the City of Foster City and San Mateo County (the “Local Area”) and wish to facilitate employment of Local Area residents and use resources in the Local Area in the construction of each Project. To the extent allowed by law, and consistent with the Unions’ hiring hall provisions, as long as they possess the requisite skills and qualifications, residents of the Local Area, including journeymen and apprentices, shall be referred by the Unions for Project work covered by this Agreement.
ARTICLE VIII
WAGES AND BENEFITS
8.1 The Contractors/Employers agree to pay all benefit contributions required by the applicable Master Agreement(s), including but not limited to vacation, pension and/or other deferred compensation, apprenticeship, worker protection and assistance, health benefit and any other funds established by the applicable Master Agreement(s) for each hour worked on each Project, in the amounts designated in the applicable Master Agreement(s).
8.2 By signing this Agreement, the Contractors/Employers adopt and agree to be bound by the written terms of the legally established Trust Agreements for the benefit funds described in Section 8.1, which may from time to time be amended, specifying the detailed basis upon which payments are to be made into, and benefits paid out of, such Trust Funds. The Contractors/Employers authorize the parties to such local Trust Agreements to appoint trustees and successor trustees to administer the Trust Funds and hereby ratify and accept the trustees so appointed as if they were appointed by the Contractors/Employers. The Contractors/Employers agree to execute a separate subscription agreement(s) when such Trust Fund(s) requires such document(s).
8.3 Wages, Hours, Terms and Conditions of Employment: The wages, hours and other terms and conditions of employment on each Project shall be governed by the Master Agreement
8.2 Attachment 3 - Agreement
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of the respective craft, to the extent such Master Agreement is not inconsistent with this Agreement. Where a subject is covered by the Master Agreement and not covered by this Agreement, the Master Agreement will prevail. When a subject is covered by both the Master Agreement and this Agreement, to the extent there is any inconsistency, this Agreement will prevail.
8.4 Holidays: Holidays shall be as set forth in the applicable Master Agreement, and any additional City/EMID recognized holidays.
ARTICLE IX
APPRENTICES
9.1 Recognizing the need to develop adequate numbers of competent workers in the construction industry, including on public works projects, the Contractors/Employers shall employ apprentices from a California state-approved Joint Apprenticeship Training Program in their respective crafts, to perform such work as is within their capabilities and that is customarily performed by the craft in which they are indentured.
9.2 Apprentice ratios will be in compliance with the provisions of the California Labor Code and the applicable state prevailing wage determination.
9.3 Consistent with the Master Agreements, there shall be no restriction on the utilization of apprentices in performing the work of their craft provided they are properly indentured and supervised.
9.4 Pre-Apprenticeship Program: Recognizing that the Bay Area Apprenticeship Coordinators Association, the San Mateo Workforce Investment Board, the San Mateo County Union Community Alliance, and the California Division of Apprenticeship Standards have established a countywide Pre-Apprenticeship Program – the Trades Introduction Program (“TIP San Mateo”) – to prepare students to become apprentices to work in construction-related trades, the parties agree to provide opportunities for employment on each Project for students who have completed the TIP San Mateo or another pre-apprenticeship program that utilizes Multi-Craft Core Curriculum (“MC3”). As such, Contractors on each Project shall endeavor to employ a minimum of two (2) TIP graduates or graduates of another MC3 pre-apprenticeship program who meet local Union requirements for admittance into a California state-approved Joint Apprenticeship Training Program.
ARTICLE X
HELMETS TO HARDHATS
10.1 The Contractors/Employers and Unions recognize a desire to facilitate the entry into the building and construction trades of veterans who are interested in careers in the building and construction industry. The Contractors/Employers and Unions agree to utilize the services of the
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Center for Military Recruitment, Assessment and Veterans Employment (hereinafter “Center”) and the Center’s “Helmets to Hardhats” program to serve as a resource for preliminary orientation, assessment of construction aptitude, referral to apprenticeship programs or hiring halls, counseling and mentoring, support network, employment opportunities and other needs as identified by the parties.
10.2 The Unions and Contractors/Employers agree to coordinate with the Center to participate in an integrated database of veterans interested in working on each Project and of apprenticeship and employment opportunities for each Project. To the extent permitted by law, the Unions will give credit to such veterans for bona fide, provable past experience.
ARTICLE XI
COMPLIANCE
11.1 It shall be the responsibility of the Contractors/Employers and Unions to investigate and monitor compliance with the provisions of Article VIII of this Agreement. Nothing in this Agreement shall be construed to interfere with or supersede the usual and customary legal remedies available to the Unions and/or employee benefit Trust Funds to collect delinquent wages or Trust Fund contributions from Contractors/Employers on each Project.
ARTICLE XII
GRIEVANCE ARBITRATION PROCEDURE
12.1 Project Labor Disputes: All disputes involving the application or interpretation of a Master Agreement to which a Contractor/Employer and a Union are parties shall be resolved pursuant to the resolution procedures of the Master Agreement. All disputes relating to the interpretation or application of this Agreement, other than disputes under Article IV and Article XIII, shall be subject to resolution by the grievance arbitration procedures set forth in this Article.
12.2 Employee Discipline: All disputes involving the discipline and/or discharge of an employee working on each Project shall be resolved through the grievance and arbitration provisions contained in the Master Agreement for the craft of the affected employee. No employee working on any Project shall be disciplined or discharged without just cause.
12.3 No grievance shall be recognized unless the grieving party (Union on its own behalf, or on behalf of an employee whom it represents, or a Contractor/Employer on its own behalf) provides notice in writing to the party with whom it has a dispute within five (5) business days after becoming aware of the dispute but in no event more than thirty (30) business days after it reasonably should have become aware of the event giving rise to the dispute. Time limits may be extended by mutual agreement of the parties.
12.4 Grievances shall be settled according to the following procedures:
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Step 1: Within five (5) business days after the receipt of the written notice of the grievance, the representative of the involved Union, or his/her designee, and the representative of the involved Contractor/Employer, shall confer and attempt to resolve the grievance.
Step 2: If the grievance is not resolved at Step 1, within five (5) business days of the Step 1 meeting or the conclusion of efforts to resolve the grievance at Step 1, the alleged grievance may be referred in writing by either involved party to the Business Manager(s) of the affected Union(s) involved and the Labor Relations Manager of the Contractor/Employer, or the Contractor/Employer’s designated representative, for discussion and resolution. This time limit may be extended by mutual consent of both parties. Regardless of which party has initiated the grievance, the Union shall notify its International Union representative prior to the Step 2 meeting, and the International Union representative shall advise if it intends to participate in the Step 2 meeting. The City/EMID and the Trades Council shall have the right to participate in any efforts to resolve the dispute in Step 2.
Step 3: If the grievance is not resolved at Step 2, either party may request the dispute be submitted to arbitration within five (5) business days of the Step 2 meeting or the conclusion of efforts to resolve the grievance at Step 2. This time limit may be extended by mutual consent of both parties. Within five (5) business days after referral of a dispute to arbitration, the representatives shall notify the permanent arbitrator designated in Article IV, or if not available, the alternate arbitrator designated in Article IV, for final and binding arbitration. If the permanent arbitrator or the alternate is not available, an arbitrator shall be selected by the alternate striking method from the list of three (3) below. The order of striking names from the list of arbitrators shall be determined by a coin toss, the winner of which shall decide whether they wish to strike first or second.
1. William Riker
2. Carol Vendrillo
3. Morris Davis
12.5 The decision of the arbitrator shall be final and binding on all parties. The arbitrator shall have no authority to change, amend, add to or detract from any of the provisions of the Agreement. The expense of the arbitrator shall be borne equally by both parties. The arbitrator shall arrange for a hearing on the earliest available date from the date of his/her selection. A decision shall be given to the parties within five (5) calendar days after completion of the hearing unless such time is extended by mutual agreement. A written opinion may be requested by a party from the presiding arbitrator.
12.6 The time limits specified at any step of the grievance procedure may be extended by mutual agreement of the parties. However, failure to process a grievance, or failure to respond in writing within the time limits provided above, without an agreed upon extension of time, shall be
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deemed a waiver of such grievance without prejudice, or without precedent to the processing and/or resolution of like or similar grievances or disputes.
12.7 In order to encourage the resolution of disputes and grievances at Steps 1 and 2 of this grievance procedure, the parties agree that such settlements shall not be precedent setting.
12.8 Retention: At the time a grievance is submitted under this Agreement or any Master Agreement, the Union(s) may request that the City/EMID withhold and retain an amount from what is due and owing to the Contractor(s) against whom the grievance is filed, or its higher-tier Contractor, sufficient to cover the damages alleged in the grievance, should the Union(s) prevail.
The amount shall be retained by the City/EMID until such time as the underlying grievance giving rise to the retention is withdrawn, settled, or otherwise resolved, and the retained amount shall be paid to whomever the parties to the grievance shall decide, or to whomever an arbitrator shall so order.
12.9 Should any of the arbitrators listed in this Article XII or Article IV no longer work as a labor arbitrator, the City/EMID and the Trades Council shall mutually agree to a replacement.
ARTICLE XIII
WORK ASSIGNMENTS AND JURISDICTIONAL DISPUTES
13.1 The assignment of Covered Work will be solely the responsibility of the Employer performing the work involved; and such work assignments will be in accordance with the Plan for the Settlement of the Jurisdictional Disputes in the Construction Industry (the “Plan”) or any successor Plan.
13.2 All jurisdictional disputes on this Project between or among the building and construction trades Unions and the Employers parties to this Agreement, shall be settled and adjusted according to the present Plan established by the Building and Construction Trades Department or any other plan or method of procedure that may be adopted in the future by the Building and Construction Trades Department. Decisions rendered shall be final, binding and conclusive on the Employers and Unions parties to this Agreement.
13.3If a dispute arising under this Article involves the North Coast States Carpenters Regional Council or any of its subordinate bodies, an arbitrator shall be chosen by the procedures specified in Article V, Section 5 of the Plan from a list composed of John Kagel, Andrea Dooley, Robert Hirsch and Thomas Pagan, and the arbitrator’s hearing on the dispute shall be held at the offices of the California State Building and Construction Trades Council in Sacramento, California within fourteen (14) calendar days of the selection of the arbitrator. All other procedures shall be as specified in the Plan.
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13.4 All jurisdictional disputes shall be resolved without the occurrence of any strike, work stoppage, or slow-down of any nature, and the Employer’s assignment shall be adhered to until the dispute is resolved. Individual employees violating this section shall be subject to immediate discharge.
13.5 Each Employer will conduct a pre-job conference with the Trades Council prior to commencing work. The City/EMID will be advised in advance of all such conferences and may participate if they wish. Pre-job conferences for different Employers may be held together.
ARTICLE XIV
MANAGEMENT RIGHTS
14.1 Consistent with the Master Agreements, the Contractor(s)/Employer(s) shall retain full and exclusive authority for the management of their operations, including the right to direct their work force in their sole discretion. No rules, customs or practices shall be permitted or observed which limit or restrict production, or limit or restrict the working efforts of employees, except that all lawful manning provisions in the Master Agreement shall be recognized.
ARTICLE XV
DRUG AND ALCOHOL TESTING
15.1 The use, sale, transfer, purchase and/or possession of a controlled substance, alcohol and/or firearms at any time on the Project site is prohibited.
15.2 Drug and alcohol testing shall be conducted in accordance with the substance abuse prevention policies set forth in the applicable Master Agreement.
ARTICLE XVI
SAVINGS CLAUSE
16.1 If any article, provision, clause, sentence or word of this Agreement is determined to be illegal or void as being in contravention of any applicable law, by a court of competent jurisdiction, the remainder of the Agreement shall remain in full force and effect. The parties further agree that if any article, provision, clause, sentence or word of the Agreement is determined to be illegal or void, by a court of competent jurisdiction, the parties shall substitute, by mutual agreement, in its place and stead, an article, provision, clause, sentence or word that will meet the objections to its validity and will be in accordance with its original intent.
16.2 In the event a decision of a court of competent jurisdiction materially alters the terms of this Agreement such that the intent of the parties is defeated, then the entire Agreement shall be null and void.
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