Agenda packet, regular meeting — Foster City City Council, May 4, 2026 (part 1 of 3)

CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
MEMBERS OF THE PUBLIC THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO SO IN PERSON OR BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY ORG.ZOOM.US/J/82592136594 PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND VIA ZOOM MEETING. ANY EMAILS SENT TO [email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

Members of the public wishing to speak will be asked to fill out a Request to Speak Form. Forms will be accepted until the staff presentation on an agenda item ends, or until the public comment period on non agenda items is closed. For special meetings, public comment is limited to item(s) on the agenda only.

To Observe the Meeting via Teleconference/Video Conference:

To access the meeting by computer / smartphone, go to: https://fostercityorg.zoom.us/j/82592136594 To dialin via phone:
16694449171 or
14086380968
And enter Webinar ID: 825 9213 6594
To Participate in the Meeting by Providing Public Comment via Teleconference/Video Conference:

During the Meeting: Live verbal public comments may be made by members of the public joining the meeting via Zoom. Zoom access information is provided above. Use the “raise hand” feature (for those joining by phone, press *9 to “raise hand”) during the public comment period for the agenda item you wish to address. The Zoom Host will call on people to speak by name provided or last 4 digits of phone number for dialin attendees. Please clearly state your full name for the record at the start of your public comment.

Before the Meeting: Written public comments for the record may be submitted in advance by 4:00 p.m. the day of the meeting by email to: [email protected] and will be made part of the written record but will not be read verbally at the meeting. Written public comments submitted by email should adhere to the following:

Clearly indicate the Agenda Item No. or specify “Public” in the Subject Line for items not on the agenda Include the submitter’s full name (Recommended but not required) Written public comments received by 4:00 p.m. the day of the meeting will be provided in their entirety to the City Council prior to the meeting and will be made part of the written record but will not be read verbally at the meeting.

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, May 04, 2026 6:30 PM
REGULAR MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel

4. SPECIAL PRESENTATIONS

4.1. A Proclamation Recognizing May 2026 as "Asian American, Native Hawaiian, and Pacific Islander Heritage Month"

4.2. A Proclamation Recognizing May 2026 as "Jewish American Heritage Month"

4.3. A Proclamation Declaring May 4, 2026 – May 8, 2026 as “Public Service Recognition Week”

4.4. A Proclamation Declaring the Week of May 1016, 2026 as "National Police Week" and May 15, 2026 as "Peace Officers' Memorial Day”

5. PUBLIC
Government Code Section 54954.2 E (3) precludes the City Council from discussing or acting upon any topic initially presented during the “Public” portion of the agenda.

Information may be received, placed on a future agenda, or referred to the appropriate City staff. FCMC 2.08.240 Addressing the Council. "...Each person desiring to address the Council shall step up to the public rostrum after being recognized to speak by the presiding officer, shall state his/her name and address for the record, state the subject he/she wishes to discuss, state who he/she is representing if he/she represents an organization or other persons and, unless further time is granted by majority vote of the Council, shall limit his/her remarks to three minutes. The City Council may vary the time limit for any speaker, if it deems this necessary." Speakers may join the Zoom meeting via the meeting link and using the “raise hand” feature and the Zoom host will call on people.

6. CITY/EMID CONSENT CALENDAR
All matters listed under Consent Calendar are considered to be routine by the City Council/EMID Board of Directors and will be enacted by one motion unless removed by a member of the Council/Board, staff, or public. There will be no separate discussion on these items unless a citizen or a Council/Board member so requests.

This section includes minutes, ordinances for adoption, resolutions for adoption, and other business as needed. If discussion is required, that item will be removed from the Consent Calendar and will be considered separately after approval of the remaining items on the Consent Calendar. Vote may be by roll call.

6.1. City/EMID Special Meeting Minutes of April 20, 2026

6.2. City/EMID Regular Meeting Minutes of April 20, 2026

6.3. A Resolution of the City Council of the City of Foster City Authorizing the Mayor to Execute a School Crossing Guard Agreement With the San Mateo– Foster City School District for the 20262027 School Year in the Amount of $21,600
a) Staff Report
b) Adopt Resolution

6.4. A Resolution of the City Council of the City of Foster City Renewing Ordinance No. 647 Regarding Police Department Acquisition and Use of Military Equipment Pursuant to Assembly Bill 481 and Government Code Section 7070 ET Seq. and Approving the Military Equipment Use Policy a) Staff Report
b) Adopt Resolution

6.5. A Resolution of the City Council of the City of Foster City Authorizing the Mayor to Execute an Agreement With HEART of San Mateo County (“HEART”) to Administer the Affordable ADU Loan Program in an Amount Not to Exceed $1,160,510 for the Implementation of Housing Element Program HD4B ADU/JADU Financial Incentive Program; Approve an Appropriation of $1,160,510 From the Commercial Linkage Fee Fund (Fund 137) to 13708474194251, and Find the Agreement and Program Exempt From Review Under the California Environmental Quality Act (CEQA) Because (I) the Affordable ADU Loan Program Was Analyzed as Part of the Environment Impact Report (EIR) for the 6th Cycle Housing Element (2023 2031) and Safety Element Update (SCH 2022010509); (II) Certain ADU Approvals Are Categorically Exempt Pursuant to Public Resources Code § 21080(B)(1) and CEQA Guidelines § 15268; And (III) Certain ADUs That Are Not Approved Ministerially Are Exempt From CEQA Pursuant to CEQA Guidelines Section 15301(Class 1Existing Facilities)
a) Staff Report
b) Adopt Resolution

6.6. a) 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 MateoFoster City School District To Extend the Term Through June 30, 2026; and
b) 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 MateoFoster City School District to Extend the Term Through June 30, 2026
c) Staff Report
d) Adopt Resolutions

7. REPORTS

7.1. Update on the Utility Box Art Program
a) Staff Report
b) Action – By Minute Order, Receive and Accept Report and Provide Policy Direction

8. RESOLUTIONS FOR ADOPTION

8.1. 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
a) Staff Report
b) Action Adopt Resolution

8.2. Consideration of Authorizing the 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
a) Staff Report
b) Action – Adopt 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 c) Action – Adopt 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

8.3. Consideration of Reinstating the Deputy City Manager Position Responsible for Economic Development and Oversight of Community Development Department
a) Staff Report
b) Action – Adopt A Resolution of the City Council of the City of Foster City Reinstating the Deputy City Manager Position Responsible for Economic Development and Oversight of the Community Development Department, Authorizing a Salary Change to the Current Deputy City Manager Position, Authorizing City Manager to Hire a Deputy City Manager During the Current Fiscal Year 20252026 and Adopting the Amended Pay Plan for Fiscal Year 20252026
c) Action Adopt A Resolution of the Board of Directors of the Estero Municipal Improvement District Reinstating the Deputy City Manager Position Responsible for Economic Development and Oversight of the Community Development Department, Authorizing a Salary Change to the Current Deputy City Manager Position, Authorizing District Manager to Hire a Deputy City Manager During the Current Fiscal Year 20252026 and Adopting the Amended Pay Plan for Fiscal Year 20252026

9. COMMUNICATIONS

9.1. City/District Warrants of Demands were Processed and Issued on March 17, 2026, and March 31, 2026
a) Information Item Only
b) No Action Required

10. CITY/DISTRICT MANAGER REPORTS, COUNCIL/BOARD STATEMENTS AND REQUESTS, AND COUNCIL LIAISON REPORTS
City/District Manager and Council/EMID Board Members report on their various assignments and liaison roles and Council/EMID Board requests for scheduling future items.

11. CLOSED SESSION

11.1. Threat to Public Services or Facilities
Consultation with: (Cory Call, Chief of Police, Caitlin Smith and Pasha Sternberg, Polsinelli PC)

11.2. Conference with Labor Negotiators (Government Code Section 54957.6) Agency Designated Representatives: Diane Pitman, Cory Call and Austris Rungis
Employee Organization: FCPOA

11.3. Report Out from Closed Session

12. ADJOURNMENT
The public is invited to attend.

Any attendee wishing special accommodations at the meeting should contact the City Clerk’s Department at (650) 2863250 or [email protected] at least 48 hours in advance of the meeting. The City has a procedure for receiving and swiftly resolving requests for reasonable accommodation for individuals with disabilities, consistent with the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and resolving any doubt in favor of accessibility.

That procedure for receiving and resolving requests for accommodation is available at the City Clerk’s Office. All meetings are conducted in a manner consistent with applicable civil rights and nondiscrimination laws.

Any writings or documents provided to a majority of the City Council or EMID Board regarding any item on this agenda after the agenda packet was distributed will be made available for public inspection in the City Clerk Department at City Hall located at 610 Foster City Boulevard during normal business hours and at the meeting.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

LIVE every 1st and 3rd Monday of the month
REPLAY next day at 1:00 pm (that week only)
REPLAY Saturday at 5:00 pm (only on Saturday the week the actual meeting occurs) City Council meetings on https://www.fostercity.org/community/page/fctvlivestream:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

1 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
MEMBERS OF THE PUBLIC THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO SO IN PERSON OR BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY ORG.ZOOM.US/J/82592136594 PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND VIA ZOOM MEETING. ANY EMAILS SENT TO [email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, May 04, 2026 6:30 PM
REGULAR MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel

4. SPECIAL PRESENTATIONS

4.1. A Proclamation Recognizing May 2026 as "Asian American, Native Hawaiian, and Pacific Islander Heritage Month"

4.2. A Proclamation Recognizing May 2026 as "Jewish American Heritage Month"

4.3. A Proclamation Declaring May 4, 2026 – May 8, 2026 as “Public Service Recognition Week”

4.4. A Proclamation Declaring the Week of May 1016, 2026 as "National Police Week" and May 15, 2026 as "Peace Officers' Memorial Day”

5. PUBLIC
Government Code Section 54954.2 E (3) precludes the City Council from discussing or acting upon any topic initially presented during the “Public” portion of the agenda.

6.1. City/EMID Special Meeting Minutes of April 20, 2026

6.2. City/EMID Regular Meeting Minutes of April 20, 2026

7. REPORTS

7.1. Update on the Utility Box Art Program
a) Staff Report
b) Action – By Minute Order, Receive and Accept Report and Provide Policy Direction

8. RESOLUTIONS FOR ADOPTION

9. COMMUNICATIONS

9.1. City/District Warrants of Demands were Processed and Issued on March 17, 2026, and March 31, 2026
a) Information Item Only
b) No Action Required

11. CLOSED SESSION

11.1. Threat to Public Services or Facilities
Consultation with: (Cory Call, Chief of Police, Caitlin Smith and Pasha Sternberg, Polsinelli PC)

11.2. Conference with Labor Negotiators (Government Code Section 54957.6) Agency Designated Representatives: Diane Pitman, Cory Call and Austris Rungis
Employee Organization: FCPOA

11.3. Report Out from Closed Session

12. ADJOURNMENT
The public is invited to attend.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

2 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
MEMBERS OF THE PUBLIC THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO SO IN PERSON OR BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY ORG.ZOOM.US/J/82592136594 PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND VIA ZOOM MEETING. ANY EMAILS SENT TO [email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, May 04, 2026 6:30 PM
REGULAR MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel

4. SPECIAL PRESENTATIONS

4.1. A Proclamation Recognizing May 2026 as "Asian American, Native Hawaiian, and Pacific Islander Heritage Month"

4.2. A Proclamation Recognizing May 2026 as "Jewish American Heritage Month"

4.3. A Proclamation Declaring May 4, 2026 – May 8, 2026 as “Public Service Recognition Week”

4.4. A Proclamation Declaring the Week of May 1016, 2026 as "National Police Week" and May 15, 2026 as "Peace Officers' Memorial Day”

5. PUBLIC
Government Code Section 54954.2 E (3) precludes the City Council from discussing or acting upon any topic initially presented during the “Public” portion of the agenda.

6.1. City/EMID Special Meeting Minutes of April 20, 2026

6.2. City/EMID Regular Meeting Minutes of April 20, 2026

7. REPORTS

7.1. Update on the Utility Box Art Program
a) Staff Report
b) Action – By Minute Order, Receive and Accept Report and Provide Policy Direction

8. RESOLUTIONS FOR ADOPTION

9. COMMUNICATIONS

9.1. City/District Warrants of Demands were Processed and Issued on March 17, 2026, and March 31, 2026
a) Information Item Only
b) No Action Required

11. CLOSED SESSION

11.1. Threat to Public Services or Facilities
Consultation with: (Cory Call, Chief of Police, Caitlin Smith and Pasha Sternberg, Polsinelli PC)

11.2. Conference with Labor Negotiators (Government Code Section 54957.6) Agency Designated Representatives: Diane Pitman, Cory Call and Austris Rungis
Employee Organization: FCPOA

11.3. Report Out from Closed Session

12. ADJOURNMENT
The public is invited to attend.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

3 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
MEMBERS OF THE PUBLIC THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO SO IN PERSON OR BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY ORG.ZOOM.US/J/82592136594 PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND VIA ZOOM MEETING. ANY EMAILS SENT TO [email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, May 04, 2026 6:30 PM
REGULAR MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel

4. SPECIAL PRESENTATIONS

4.1. A Proclamation Recognizing May 2026 as "Asian American, Native Hawaiian, and Pacific Islander Heritage Month"

4.2. A Proclamation Recognizing May 2026 as "Jewish American Heritage Month"

4.3. A Proclamation Declaring May 4, 2026 – May 8, 2026 as “Public Service Recognition Week”

4.4. A Proclamation Declaring the Week of May 1016, 2026 as "National Police Week" and May 15, 2026 as "Peace Officers' Memorial Day”

5. PUBLIC
Government Code Section 54954.2 E (3) precludes the City Council from discussing or acting upon any topic initially presented during the “Public” portion of the agenda.

6.1. City/EMID Special Meeting Minutes of April 20, 2026

6.2. City/EMID Regular Meeting Minutes of April 20, 2026

7. REPORTS

7.1. Update on the Utility Box Art Program
a) Staff Report
b) Action – By Minute Order, Receive and Accept Report and Provide Policy Direction

8. RESOLUTIONS FOR ADOPTION

9. COMMUNICATIONS

9.1. City/District Warrants of Demands were Processed and Issued on March 17, 2026, and March 31, 2026
a) Information Item Only
b) No Action Required

11. CLOSED SESSION

11.1. Threat to Public Services or Facilities
Consultation with: (Cory Call, Chief of Police, Caitlin Smith and Pasha Sternberg, Polsinelli PC)

11.2. Conference with Labor Negotiators (Government Code Section 54957.6) Agency Designated Representatives: Diane Pitman, Cory Call and Austris Rungis
Employee Organization: FCPOA

11.3. Report Out from Closed Session

12. ADJOURNMENT
The public is invited to attend.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

4 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
MEMBERS OF THE PUBLIC THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO SO IN PERSON OR BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY ORG.ZOOM.US/J/82592136594 PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND VIA ZOOM MEETING. ANY EMAILS SENT TO [email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, May 04, 2026 6:30 PM
REGULAR MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel

4. SPECIAL PRESENTATIONS

4.1. A Proclamation Recognizing May 2026 as "Asian American, Native Hawaiian, and Pacific Islander Heritage Month"

4.2. A Proclamation Recognizing May 2026 as "Jewish American Heritage Month"

4.3. A Proclamation Declaring May 4, 2026 – May 8, 2026 as “Public Service Recognition Week”

4.4. A Proclamation Declaring the Week of May 1016, 2026 as "National Police Week" and May 15, 2026 as "Peace Officers' Memorial Day”

5. PUBLIC
Government Code Section 54954.2 E (3) precludes the City Council from discussing or acting upon any topic initially presented during the “Public” portion of the agenda.

6.1. City/EMID Special Meeting Minutes of April 20, 2026

6.2. City/EMID Regular Meeting Minutes of April 20, 2026

7. REPORTS

7.1. Update on the Utility Box Art Program
a) Staff Report
b) Action – By Minute Order, Receive and Accept Report and Provide Policy Direction

8. RESOLUTIONS FOR ADOPTION

9. COMMUNICATIONS

9.1. City/District Warrants of Demands were Processed and Issued on March 17, 2026, and March 31, 2026
a) Information Item Only
b) No Action Required

11. CLOSED SESSION

11.1. Threat to Public Services or Facilities
Consultation with: (Cory Call, Chief of Police, Caitlin Smith and Pasha Sternberg, Polsinelli PC)

11.2. Conference with Labor Negotiators (Government Code Section 54957.6) Agency Designated Representatives: Diane Pitman, Cory Call and Austris Rungis
Employee Organization: FCPOA

11.3. Report Out from Closed Session

12. ADJOURNMENT
The public is invited to attend.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

5 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
MEMBERS OF THE PUBLIC THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO SO IN PERSON OR BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY ORG.ZOOM.US/J/82592136594 PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND VIA ZOOM MEETING. ANY EMAILS SENT TO [email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, May 04, 2026 6:30 PM
REGULAR MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel

4. SPECIAL PRESENTATIONS

4.1. A Proclamation Recognizing May 2026 as "Asian American, Native Hawaiian, and Pacific Islander Heritage Month"

4.2. A Proclamation Recognizing May 2026 as "Jewish American Heritage Month"

4.3. A Proclamation Declaring May 4, 2026 – May 8, 2026 as “Public Service Recognition Week”

4.4. A Proclamation Declaring the Week of May 1016, 2026 as "National Police Week" and May 15, 2026 as "Peace Officers' Memorial Day”

5. PUBLIC
Government Code Section 54954.2 E (3) precludes the City Council from discussing or acting upon any topic initially presented during the “Public” portion of the agenda.

6.1. City/EMID Special Meeting Minutes of April 20, 2026

6.2. City/EMID Regular Meeting Minutes of April 20, 2026

7. REPORTS

7.1. Update on the Utility Box Art Program
a) Staff Report
b) Action – By Minute Order, Receive and Accept Report and Provide Policy Direction

8. RESOLUTIONS FOR ADOPTION

9. COMMUNICATIONS

9.1. City/District Warrants of Demands were Processed and Issued on March 17, 2026, and March 31, 2026
a) Information Item Only
b) No Action Required

11. CLOSED SESSION

11.1. Threat to Public Services or Facilities
Consultation with: (Cory Call, Chief of Police, Caitlin Smith and Pasha Sternberg, Polsinelli PC)

11.2. Conference with Labor Negotiators (Government Code Section 54957.6) Agency Designated Representatives: Diane Pitman, Cory Call and Austris Rungis
Employee Organization: FCPOA

11.3. Report Out from Closed Session

12. ADJOURNMENT
The public is invited to attend.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

6 4.1

4.1 Proclamation

7 4.2

4.2 Proclamation

8 4.3

4.3 Proclamation

9 CITY OF FOSTER CI
ORPORATED 191
Proclamation
of the City of Foster City, California
"National Police Week" May 10-16, 2026 and
"Peace Officers' Memorial Day" May 15, 2026
WHEREAS, the Congress and President of the United States have designated May 15 as Peace Officers' Memorial Day, and the week of which it falls as National Police Week; and WHEREAS, the members of the Foster City Police Department play an essential role in safeguarding the rights and freedoms of the citizens of Foster City; and WHEREAS, it is important that all residents know and understand the problems, duties and responsibilities of their police department, and that members of our police department recognize their duty to serve the people by safeguarding life and property, by protecting them against violence or disorder, and by protecting the innocent against deception and the weak against oppression or intimidation; and
WHEREAS, the Foster City Police Department has grown to be a progressive law enforcement agency which unceasingly provides a vital public service; and WHEREAS, in 2025 the Foster City Police Department received 26,514 calls for service, handled 26,461 incidents, made 473 arrests, and saw a combined 41% decrease in violent & property crimes; and

NOW, THEREFORE, I, ART KIESEL, MAYOR OF THE CITY OF FOSTER CITY, ON BEHALF OF THE CITY COUNCIL, call upon all residents of Foster City and upon all patriotic, civic and educational organizations to observe the week of May 10-16, 2026, as "National Police Week" with appropriate recognition commemorating police officers, past and present, who by their faithful and loyal devotion to their responsibilities have rendered a dedicated service to their communities and, in doing so, have established for themselves an enviable and enduring reputation for preserving the rights and security of all citizens.

I FURTHER call upon the Foster City community to observe Thursday, May 15, 2026, as "Peace Officers' Memorial Day" in honor of those peace officers who, through their courageous deeds, have lost their lives or have become disabled in the performance of duty.

IN WITNESS WHEREOF, I have hereunto set my
hand and have caused the official seal of the City of
Foster City to be affixed this 4th day of May, two
thousand twenty-six, A.D.

ART KIESEL, MAYOR

4.4 4.4 Proclamation

10 CITY OF FOSTER CITY/

ESTERO MUNICIPAL IMPROVEMENT DISTRICT
SPECIAL MEETING OF APRIL 20, 2026

MINUTES

CALL TO ORDER OF CITY COUNCIL/EMID BOARD OF DIRECTORS
The Special Meeting of April 20, 2026 of the City Council of the City of Foster City, sitting as said Council and as ex officio the Board of Directors of the Estero Municipal Improvement District (EMID), was called to order at 5:02 p.m. in the Emergency Operations Center (EOC), 1040 E. Hillsdale Blvd., Foster City, San Mateo County, California, by Vice Mayor/Vice President Suzy Niederhofer.

ROLL CALL
The Communications Director/City Clerk/District Secretary called the roll:

PRESENT: Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel.

Mayor/President Art Kiesel arrived at 5:08 p.m.

ABSENT: None.

STAFF PRESENT: Stefan Chatwin, City/District Manager; Benjamin Stock, City Attorney/District Legal Counsel; Marlene Subhashini, Assistant City/District Manager; Nate Cruz, Finance Director; Derek Schweigart, Parks and Recreation Director; Tiffany Oren, Recreation Manager; Rob Lasky, IT Manager; Chris Dolberg, Senior System Analyst; Aaron Siu, Senior System Analyst; Shuli Chen, Video Technician; and Priscilla Schaus, Communications Director/City Clerk/District Secretary.

STUDY SESSION
Vice Mayor Niederhofer recessed the meeting into Study Session.

CHANGES TO THE PARKS AND RECREATION DEPARTMENT MASTER FEES AND SERVICE CHARGES SCHEDULE FOR FY 2026-2027 AND FY 2027-2028. MINUTE ORDER NO. 2071.

Parks and Recreation Director Schweigart presented the staff report.

Discussion ensued.

6.1 6.1 Minutes

11 Motion by Councilmember Jimenez, seconded by Vice Mayor Niederhofer, and carried unanimously, 5-0-0, adopting Minute Order No. 2071, receiving and accepting the report and providing the following policy direction:

1. Review the 5-hour minimum a la carte weekend rental pricing strategy and re- evaluate after 6 months of implementation;

2. Continue to provide special non-profit rates to legacy groups at a reduced rate of 50% for one weekday event per year;

3. Maintain a 25% non-resident differential across facilities;

4. Reduce the number of proposed rental tier levels, and define the criteria for each tier level;

5. Explore how other cities engage with their local service organizations for their facility rental fee structures;

6. Continue to charge the standard nonprofit rates for nonprofit fundraising events;

7. Proceed with the use of both bundled (package) and hourly pricing for the Lagoon Event Hall; and

8. Proceed with the overall pricing strategy for the new Community Center and Community Center Annex.

Meeting recessed into study session at 5:03 and reconvened at 6:10 p.m.

ADJOURNMENT
Hearing no objection from the City Council/EMID Board, Vice Mayor/Vice President Kiesel adjourned the meeting. Meeting adjourned at 6:10 p.m.

6.1 6.1 Minutes

12 CITY OF FOSTER CITY/

ESTERO MUNICIPAL IMPROVEMENT DISTRICT
REGULAR MEETING OF APRIL 20, 2026

MINUTES

CALL TO ORDER OF CITY COUNCIL/EMID BOARD OF DIRECTORS
The Regular Meeting of April 20, 2026 of the City Council of the City of Foster City, sitting as said Council and as ex officio the Board of Directors of the Estero Municipal Improvement District (EMID), was called to order at 6:30 p.m. in the Council Chambers, 620 Foster City Boulevard, Foster City, San Mateo County, California, by Mayor/President Art Kiesel.

This meeting was held as a hybrid meeting.

ROLL CALL
The Communications Director/City Clerk/District Secretary called the roll:

PRESENT: Councilmembers/ex officio EMID Directors Stacy Jimenez, Suzy Niederhofer, Patrick Sullivan, Phoebe Venkat, and Mayor/President Art Kiesel.

ABSENT: None.

STAFF PRESENT: Stefan Chatwin, City/District Manager; Benjamin Stock, City Attorney/District Legal Counsel; Marlene Subhashini, Assistant City/District Manager; Diane Pitman, Administrative Services Director; Andrew Brozyna, Public Works Director; Derek Schweigart, Parks and Recreation Director; Sofia Mangalam, Community Development Director; Cory Call, Police Chief; Rob Lasky, IT Manager; Yelena Capello, Principal Management Analyst; Laura Galli, Engineering Manager; Francine Magno, Senior Civil Engineer; Ryan Marquez, Senior Civil Engineer; Vuong Phan, Police Seargent; Lyly Mai, Police Officer; Cathy Lau, Police Corporal; Kristina Muratori, Dispatch Supervisor; Veronica Gutierrez, Dispatcher; Shuli Chen, Video Technician; and Priscilla Schaus, Communications Director/City Clerk/District Secretary.

SPECIAL PRESENTATIONS
PROCLAMATION RECOGNIZING APRIL 2026 AS PARKINSON’S AWARENESS MONTH

6.2 6.2 Minutes

13 Vice Mayor Niederhofer presented the proclamation recognizing April 2026 as Parkinson’s Awareness Month to Debbie Lucchesi, representing the Parkinson’s Foundation and Foster City Resident Paul Norton.

PROCLAMATION DECLARING THE WEEK OF APRIL 12-18, 2026 AS “NATIONAL PUBLIC SAFETY TELECOMMUNICATORS WEEK”
Councilmember Jimenez presented the proclamation declaring the week of April 12-18, 2026 as “National Public Safety Telecommunicators Week” to Dispatch Supervisor Kristina Muratori and Dispatcher Veronica Gutierrez.

PROCLAMATION DECLARING THE WEEK OF APRIL 19-25, 2026 AS “VOLUNTEER APPRECIATION WEEK”
Mayor Kiesel presented the proclamation declaring the week of April 19-25, 2026 as “Volunteer Appreciation Week” to Police Chief Call on behalf of the Foster City Police Department volunteers.

PUBLIC
Ken Bauco, representing Infraday, addressed the City Council via email regarding Infraday California.

CONSENT CALENDAR
Motion by Vice Mayor/Vice President Niederhofer, seconded by Councilmember/Director Venkat, and carried unanimously, 5-0-0, approving the following items on the City/District Consent Calendar:

City/EMID Consent Calendar

1. City and Planning Commission Joint Special Meeting Minutes of February 24, 2026;

2. City/EMID Regular Meeting Minutes of March 16, 2026;

3. City/EMID Regular Meeting Minutes of April 6, 2026;

4. City/EMID Special Meeting Minutes of April 13, 2026;

5. City Resolution No. 2026-033, “A Resolution of the City Council of the City of Foster City Authorizing Award of an Agreement with Moffatt & Nichol in the Amount of $130,007 for Professional Engineering Services for the Lagoon Dredge Survey, Approval of an Agreement Contingency in the Amount of $20,000, Authorizing the Mayor to execute the Agreement, and Finding the Project Exempt From CEQA Under Section 15306 - Information Collection;”

6. City Resolution No. 2026-034, “A Resolution of the City Council of the City of Foster City Revising the Building/Fleet Maintenance Superintendent Job Description;”

6.2 6.2 Minutes

14 7. EMID Resolution No. 3842, “A Resolution of the Board of Directors of the Estero Municipal Improvement District Revising the Building/Fleet Maintenance Superintendent Job Description”; and

8. EMID Resolution No. 3843, “A Resolution of the Board of Directors of the Estero Municipal Improvement District Approving the Plans and Specifications, Authorizing the Call for Bids for Phase I of the Emergency Generator Replacement Project (CIP 455-705); And Finding the Project Exempt From CEQA Under Section 15301(B) – Existing Facilities.”

ITEMS REMOVED FROM CONSENT CALENDAR
APPROPRIATION IN THE AMOUNT OF $21,000 FROM THE GENERAL PLAN MAINTENANCE FUND (FUND 128) TO ACCOUNT 128-0838-419-42-51; AUTHORIZING CONTRACT AMENDMENT NO. THREE (3) TO THE AGREEMENT WITH FEHR AND PEERS IN THE AMOUNT OF $24,278 FOR THE FOSTER CITY BICYCLE AND PEDESTRIAN MASTER PLAN; AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT NO. 3; AND FINDING PROJECT EXEMPT FROM REVIEW

UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO PUBLIC RESOURCES CODE SECTION 21000. CITY RESOLUTION NO. 2026-035.

Without objection from the City Council, Mayor Kiesel removed this item from the Consent Calendar.

Yiming Luo addressed the City Council via teleconference.

Discussion ensued.

Motion by Councilmember Jimenez, seconded by Vice Mayor Niederhofer, and carried unanimously, 5-0-0, adopting City Resolution No. 2026-035, “A Resolution of the City Council of the City of Foster City Authorizing An Appropriation in the Amount of $21,000 From the General Plan Maintenance Fund (Fund 128) to Account 128-0838-419-42-51; Authorizing Contract Amendment No. Three (3) to the Agreement With Fehr and Peers in the Amount of $24,278 for the Foster City Bicycle and Pedestrian Master Plan; Authorizing the Mayor to execute Amendment No. 3; and Finding Project Exempt From Review Under the California Environmental Quality Act (CEQA) Pursuant to Public Resources Code Section 21000.”

PUBLIC HEARING

REVISIONS TO THE CITY/DISTRICT MASTER FEES AND SERVICE CHARGES SCHEDULE FOR FY 2026-2027 AND FY 2027-2028 (NOT INCLUDING PARKS AND RECREATION FEES). CITY RESOLUTION NO. 2026-036. EMID RESOLUTION NO. 3844.

Finance Director Cruz presented the staff report.

6.2 6.2 Minutes

15 Mayor/President Kiesel opened a public hearing to hear and consider comments regarding revisions to the City/District Master Fees and Service Charges Schedule for FY 2026-2027 and FY 2027-2028 (not including Parks and Recreation Fees).

No public testimony was received.

Without objection from the City Council/Board of Directors Mayor/President Kiesel closed the public hearing.

Discussion ensued.

Motion by Councilmember/Director Jimenez, seconded by Councilmember/Director Venkat, and carried unanimously, 5-0-0, adopting City Resolution No. 2026-036, “A Resolution of the City Council of the City of Foster City Amending the Master Fees and Service Charges Schedule for FY 2026-2027 and FY 2027-2028” and EMID Resolution No. 3844, “A Resolution of the Board of Directors of the Estero Municipal Improvement District Amending the Master Fees and Service Charges Schedule for FY 2026-2027 and FY 2027-2028.”

REPORTS
REAL ESTATE MARKET ANALYSIS. MINUTE ORDER NO. 2072.

Community Development Director Mangalam and Ken Hira, representing Kosmont Companies, presented the report.

The following people addressed the City Council via teleconference:

1. Yiming Luo;

2. Crystal Tilton; and

3. Evan Adams.

Discussion ensued.

Motion by Councilmember Jimenez, seconded by Vice Mayor Niederhofer, and carried unanimously, 5-0-0, adopting Minute Order No. 2072, receiving and accepting the report and directing staff to:

1. Examine trends such as ghost kitchens, food halls, and office-to-housing conversions;

2. Identify strategies to retain and support existing businesses;

3. Assess impacts of current noise ordinance on restaurants/cafés and evaluate feasibility of extending hours to support businesses;

4. Identify city policies that may create barriers to businesses;

5. Analyze City-owned and other opportunity sites, including Golf course, Sea Cloud II, state-owned parcel and vacant buildings/parcels that could benefit from redevelopment;

6.2 6.2 Minutes

16 6. Explore ideal location for downtown core and possibility to establish a local high school;

7. Study the effect of redevelopment of Hillsdale mall on Foster City; and

8. Include Beach Park Plaza shopping center in the analysis of the shopping centers.

PREVIOUSLY ADOPTED WASTEWATER RATES EFFECTIVE JULY 1, 2025 WITH ANNUAL ADJUSTMENTS EACH JULY 1 THOUGH JULY 1, 2029. NO ACTION TAKEN.

Public Works Director Brozyna and Principal Management Analyst Capello presented the staff report.

No action was taken.

PREVIOUSLY ADOPTED WATER RATES EFFECTIVE JULY 1, 2025 WITH ANNUAL ADJUSTMENTS EACH JULY 1 THROUGH JULY 1, 2029. NO ACTION TAKEN.

Public Works Director Brozyna and Principal Management Analyst Capello presented the staff report.

No action was taken.

RESOLUTIONS FOR ADOPTION

COMMITMENT TO ENFORCEMENT OF STATE LAW AND CITY POLICIES IN

RESPONSE TO FEDERAL IMMIGRATION ENFORCEMENT ACTIONS THAT DO NOT COMPLY WITH THOSE LAWS AND POLICIES. CITY RESOLUTION NO. 2026-037.

City Attorney Stock presented the staff report.

The following people addressed the City Council via email:

1. Nancy Goodban;

2. Taylor Kwan;

3. Maxwell Kwan;

4. Janet Kwan;

5. Linda Adler;

6. Seona Srivastava; and

7. Noelia Corzo, San Mateo County Supervisor of District 2.

Jim Lawrence addressed the City Council in person.

The following people addressed the City Council via teleconference:

1. Sara Matlin;

2. Yiming Luo; and

3. Kalimah Salahuddin.

6.2 6.2 Minutes

17 Discussion ensued.

Motion by Councilmember Sullivan, seconded by Councilmember Venkat, and carried unanimously, 5-0-0, adopting City Resolution No. 2026-037, “A Resolution of the City Council of the City of Foster City’s Commitment to Enforcement of State Law and City Policies in Response to Federal Immigration Enforcement Actions That Do Not Comply With Those Laws and Policies.”

COMMUNICATIONS
CITY/DISTRICT WARRANT OF DEMANDS. NO ACTION TAKEN.

City/District Warrants of Demands were Processed and Issued on February 26, 2026, and ACH were processed on March 5, 2026.

CITY/DISTRICT MANAGER REPORTS, COUNCIL/BOARD STATEMENTS AND

REQUESTS, AND COUNCIL LIAISON REPORTS

Vice Mayor/Vice President Niederhofer stated she attended the Planning Commission meeting on April 16. She thanked Pacific Beach Coalition for organizing their Earth Day Cleanup event on April 18.

Councilmember/Director Sullivan stated he attended the Chamber San Mateo County Progress Seminar on April 17-19.

Councilmember/Director Venkat stated she attended the Commute.org Board meeting on April 16 and the Citizens Sustainability Advisory Committee meeting on April 8. She shared that they will be tabling for Earth Day at the Off the Grid event on Wednesday, April 22.

Mayor/President Kiesel stated he addressed the residents of Atria at Foster Square regarding local, state, and federal issues on April 13. On April 17-19, he attended the Chamber San Mateo County Progress Seminar.

CLOSED SESSION
Mayor Kiesel recessed the meeting into Closed Session for:

1. Conference with Labor Negotiators
Agency designated representative: (Mayor)
Unrepresented employee: (City Manager); and

2. Report Out of Closed Session.

Meeting recessed into Closed Session at 8:45 and reconvened at 10:38 p.m.

6.2 6.2 Minutes

18 City Attorney/District Legal Counsel Stock reported that no action was taken in Closed Session.

ADJOURNMENT
Hearing no objection from the City Council/EMID Board, Mayor/President Kiesel adjourned the meeting. Meeting adjourned at 10:38 p.m.

6.2 6.2 Minutes

19 DATE: May 4, 2026

TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager

FROM: Cory Call, Police Chief
DEPARTMENT: Police
SUBJECT: SCHOOL CROSSING GUARD AGREEMENT WITH THE SAN

MATEO-FOSTER CITY SCHOOL DISTRICT IN THE AMOUNT OF
$21,600 FOR THE 2026-2027 SCHOOL YEAR

RECOMMENDATION
It is recommended that the City Council adopt the attached resolution authorizing the Mayor to sign the attached School Crossing Guard Agreement with the San Mateo- Foster City School District in the amount of $21,600 for the 2026-2027 school year.

EXECUTIVE SUMMARY
The City in collaboration with the San Mateo-Foster City School District (School District) discussed the renewal of an agreement to provide school crossing guard services for the school year. The funding level authorized for Fiscal Year (FY) 2025-2026 was $21,600 towards helping the School District provide this service, and no change is recommended for FY 2026-2027.

BACKGROUND/ANALYSIS
For over a decade, the San Mateo–Foster City School District and the City of Foster City have provided school crossing guard services through a cooperative agreement.

The agreement requires the School District to manage the hiring of guards and the day- to-day operation of the Crossing Guard Program (Program). The City of Foster City has

6.3 6.3 Staff Report

20 been responsible for providing partial funding to the District for the administration of the Program and payment of the guards.

During FY 2009-2010, the City increased its contribution to the current level of $21,600 to fund the Crossing Guard Program. Both the District and the Foster City Police Department monitor the Program for effectiveness, and staffing reductions have been made in the past when warranted.

Subcommittees of the City Council and School Board have met in the past to explore alternative sources of funding for crossing guards (e.g., donations from individuals, organizations, businesses, grants, etc.). To the extent funding does come from these alternative sources, it will reduce the cost of the Program and the payment made by the City to the School District. Through the School District’s outreach to the parents of students by placing donation information in the “back-to-school” packets, it has raised funds for the Program in past years. The School District has agreed to include donation information again in the “back-to-school” packets for FY 2026-2027.

The San Mateo-Foster City School District will continue to manage the School Crossing Guard Program. The School District currently employs up to seven (7) guards who staff crosswalks throughout the school day at the following locations:
Gull Avenue in front of Audubon School
Beach Park Boulevard and Edgewater Boulevard
Beach Park Boulevard and Castor Street
Polynesia Drive and Niantic Drive
Shell Boulevard and Beach Park Boulevard
California Environmental Quality Act
This agreement 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.

FISCAL IMPACT
The fiscal impact is $21,600, which has been allocated in Fund Account Number 001- 0650-421-4251 in the FY 2026-2027 budget for this purpose.

6.3 6.3 Staff Report

21 CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA Public Safety and Social Equity
ATTACHMENTS:

Attachment 1 — Resolution
Attachment 2 — Agreement

6.3 6.3 Staff Report

22 4
5 8
0 RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY

AUTHORIZING THE MAYOR TO EXECUTE A SCHOOL CROSSING GUARD AGREEMENT WITH THE SAN MATEO–FOSTER CITY SCHOOL DISTRICT FOR THE 2026-2027 SCHOOL YEAR IN THE AMOUNT OF $21,600

CITY OF FOSTER CITY
WHEREAS, the City of Foster City wants to provide protection for the school children who are required to cross heavily traveled streets in the City; and WHEREAS, some protection can be afforded by placing crossing guards at specific locations in the City; and
WHEREAS, the San Mateo–Foster City School District wishes to cooperate in providing protection for school pupils pursuant to Education Code section 45450 et seq.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby authorize the Mayor to sign a school crossing guard agreement with the San Mateo–Foster City School District for the 2026-2027 school year in the amount of $21,600.

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

6.3 Attachment 1 - Resolution

23 SCHOOL CROSSING GUARD AGREEMENT
For the 2026-2027 School Year

BETWEEN

THE CITY OF FOSTER CITY
&

THE SAN MATEO-FOSTER CITY SCHOOL DISTRICT

This agreement is made and entered into on the 4th day of May 2026 by and between the City of Foster City, hereinafter "City," and the San Mateo-Foster City School District, hereinafter "District."

WHEREAS, the City wants to provide protection for the school children who are required to cross heavily traveled streets in the City; and

WHEREAS, some protection can be afforded by placing crossing guards at specific locations in the City; and

WHEREAS, the District wishes to cooperate in providing protection for school pupils pursuant to Education Code section 45450 et seq.,

NOW, THEREFORE, it is agreed as follows:

1. The District shall select, hire, and supervise crossing guards and reliefs for the crossing guards as necessary for each of the locations and hours as prescribed in Exhibit "A" for all instructional school days of the school year. The crossing guards and their reliefs shall be considered and shall in fact be employees of the District for all purposes.

2. The City agrees to reimburse the District for wages and any related benefits paid by the District to the crossing guards and their reliefs based on a minimum of two (2) hours per day, per crossing guard, per location (except for the Edgewater and Beach Park Boulevards location which should be designated as a critical intersection and paid on a minimum of four (4) hours per day basis) and for daily administrative costs incurred in providing the crossing guards and their reliefs, so long as the total reimbursement does not exceed that figure agreed to pursuant to paragraph 6 below.

3. The District agrees to prioritize the staffing of crossing guard locations as follows:

A. Beach Park Blvd. and Edgewater Blvd.

B. Gull Avenue @ Audubon Elementary School
C. Polynesia Drive and Niantic Drive
D. Beach Park Blvd. and Castor St.

E. Shell Blvd. and Beach Park Blvd.

This order recognizes the critical nature of the first intersection and the desire to have at least one manually controlled crossing at each school.

6.3 Attachment 2 - Agreement

24 4. Not later than thirty (30) days after the close of each calendar quarter, the District shall bill the City for reimbursement of the costs described in paragraph 2 above. The City shall pay the bill within thirty (30) days of receipt.

5. The City shall provide the District crossing guard signs and the District shall provide the signs to the crossing guards.

6. The City agrees to reimburse the District up to a maximum of $21,600 for the period July 1, 2026, through June 30, 2027, for crossing guard services as prescribed in Exhibit "A," attached hereto and incorporated herein.

7. At any time during the term of this agreement, the District or the City may request that the list attached as Exhibit "A" hereto be amended by deleting or adding one or more locations.

If after consideration of such request the City determines that a location either should or should not have a crossing guard, the City Council may, by resolution, amend the list attached as Exhibit "A." If a location is added, the District shall promptly provide a crossing guard at that location pursuant to this agreement. If the location is deleted, the District shall promptly remove the crossing guard and immediately cease billing for that location.

8. District hereby agrees to defend, indemnify, and save harmless City, its Council, boards, commissions, officers, employees and agents, from and against any and all claims, suits, actions liability, loss, damage, expense, cost (including, without limitation , costs and fees of litigation) of every nature, kind or description, which may be brought against, or suffered or sustained by, City, its Council, boards, commissions, officers, employees or agents caused by, or alleged to have been caused by, the neglige nce, intentional tortuous act or omission, or willful misconduct of District, its officers, employees or agents in the performance of any services or work pursuant to this Agreement.

The duty of District to indemnify and save harmless, as set forth herein, shall include the duty to defend as set forth in Section 2778 of the California Civil Code; provided, however, that nothing herein contained shall be construed to require District to indemnify City, its Council, boards, commissions, officers, employees and agents against any responsibility or liability in contravention of Section 2782 of the California Civil Code.

9. Insurance. District shall acquire and maintain Workers' Compensation, employer's liability, commercial general liability, owned and non-owned and hired automobile liability, and professional liability insurance coverage relating to District's services to be performed hereunder covering City's risks in form subj ect to the approval of the City Attorney and/or City's Risk Manager. The minimum amounts of coverage corresponding to the aforesaid categories of insurance per insurable event shall be as follows:

Insurance Category
Workers' Compensation
Minimum Limits
statutory minimum

6.3 Attachment 2 - Agreement

25 Employer's Liability $1,000,000 per accident for bodily injury or disease

Commercial General Liability

Automobile Liability
$1,000,000 per occurrence and $2,000,000
aggregate for bodily injury, personal injury
and property damage

$1,000,000 per accident for bodily injury and
property damage (coverage required to the
extent applicable to District's vehicle usage in
performing services hereunder)

Concurrently with the execution of this Agreement, District shall, on the Insurance Coverage form provided in Exhibit B, furnish City with certificates and copies of information or declaration pages of the insurance required hereunder and, with respect to evidence of commercial general liability and automobile liability insurance coverage, original endorsements:

(a) Precluding cancellation or reduction in per occurrence limits before the expiration of thirty (30) days (10 days for nonpayment) after City shall have received written notification of cancellation in coverage or reduction in per occurrence limits by first class mail;

(b) Naming the City of Foster City and Estero Municipal Improvement District, its Council, officers, boards, commissions, employees, and agents, as additional insureds; and

(c) Providing that District's insurance coverage shall be primary insurance with respect to City of Foster City and Estero Municipal Improvement District, its Council, officers, boards, commissions, employees, and agents, and any insurance or self-insurance maintained by City for itself, its Council, officers, boards, commissions, employees, or agents shall be in excess of District's insurance and not contributory with it.

10. WORKERS' COMPENSATION. District certifies that they are aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and District certifies that he will comply with such provisions before commencing the performance of the work of this agreement.

11. The terms of this agreement shall expire on June 30, 2027.

6.3 Attachment 2 - Agreement

26 12. The City and District shall meet during the term of this agreement to evaluate the need for crossing guards for the next school year and to negotiate a successor agreement.

13. Notices sent pursuant to this agreement shall be addressed as follows:

To the City:

To the District:

City Manager
City of Foster City
610 Foster City Boulevard
Foster City, CA 94404

Superintendent
San Mateo-Foster City School District
1170 Chess Drive
Foster City, CA 94404

14. This agreement may only be amended by mutual agreement in writing.

[Signatures on Next Page]

6.3 Attachment 2 - Agreement

27 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

Dated:

Art Kiesel, Mayor
ATTEST:

Dated:

Priscilla Schaus, City Clerk

APPROVED AS TO FORM

Dated:

City Attorney

SAN MATEO-FOSTER CITY SCHOOL

DISTRICT

Dated:

President, Board of Trustees

ATTEST:

Clerk of the Board of Trustees

6.3 Attachment 2 - Agreement

28 San Mateo-Foster City School District
Foster City Crossing guards 2026-2027
Exhibit A
Foster City Crossing Guards - 9713

SITE STREETS LAST FIRST WK DAYS HRS/DAY PAY RATE
ANNUAL
EARNINGS PERS FICA MEDICARE SUI WC GASB 45 CIL DIF1 H&W TOTAL COST AUDUBON GULL Paskett Jodie 180 1 $18.60 $3,348.00 $897.60 $207.58 $48.55 $1.67 $58.49 $4,561.88 AUDUBON GULL Liberty Valerie 180 1 $18.60 $3,348.00 $897.60 $207.58 $48.55 $1.67 $58.49 $4,561.88 BEACH PARK SHELL / PARK Substitute 180 2 $18.60 $6,696.00 $1,795.20 $415.15 $97.09 $3.35 $116.98 $9,123.77 BREWER ISLPOLYNESIA/NIANTICHermosa PetelAvi 180 2 $18.60 $6,696.00 $1,795.20 $415.15 $97.09 $3.35 $116.98 $9,123.77 FOSTER CITYEDGEWATER/BEACH PARKFerrari Susan 180 4 $18.60 $13,392.00 $3,590.40 $830.30 $194.18 $6.70 $233.96 $18,247.54 FOSTER CITYBEACH PARK BLVD/CASTORLarmey John 180 2 $18.60 $6,696.00 $1,795.20 $415.15 $97.09 $3.35 $116.98 $9,123.77 HR Reyes SanchezMadeline 260 0.75 $49.88 $9,726.60 $2,607.70 $603.05 $141.04 $4.86 $169.92 $243.17 $0.00 $28.80 $1,391.85 $14,916.99 TOTAL EST. COST: $69,659.60
Contracted Employee with Benefits

6.3 Attachment 2 - Agreement

29 1

EXHIBIT B

INSURANCE FORMS

District shall provide, in addition to the Certificates of Insurance, original Endorsement affecting the coverages specified in Section 9 – INSURANCE of the Agreement on the attached form. No substitute form will be accepted.

ATTACHED

1. Insurance Coverage Form

6.3 Attachment 2 - Agreement

30 1 Updated 1/18/2022

This INSURANCE COVERAGE FORM modifies or documents insurance provided under the following:

Named Insured: Effective Work Date(s):

Description of Work/Locations/Vehicles:

ADDITIONAL INSURED: City of Foster City/Estero Municipal Improvement District (CITY) 610 Foster City Boulevard, Foster City, CA 94404
Attention: _________________________________
Contract Administrator
Endorsement and Certificates of Insurance Required
The Additional Insured, its elected or appointed officers, officials, employees and volunteers are included as insureds with regard to damages and defense of claims arising from: (Check all that apply)
Insurer Policy
No.

MEETS OR EXCEEDS ISO Form # CG 20 10 11 85}

Auto Liability : the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Named Insured, regardless of whether liability is attributable to the Named Insured or a combination of the Named Insured and the Additional Insured, its elected or appointed officers, officials, employees or volunteers.

Other: [Cyber Liability, Installation Floater, etc.]
Certificates of Insurance Required (no endorsement needed) (Check all that apply) Insurer Policy No.

Workers Compensation : work performed by employees of the Named Insured while those employees are engaged in work under the simultaneous directions and control of the Named Insured and the Additional Insured.

Professional Liability:

PRIMARY/NON-CONTRIBUTORY: This insurance is primary and is not additional to or contributing with any other insurance carried by or for the benefit of Additional Insureds.

SEVERABILITY OF INTEREST: The insurance afforded by this policy applies separately to each insured who is seeking coverage or against whom a claim is made or a suit is brought, except with respect to the insurer’s limit of liability.

PROVISIONS REGARDING THE INSURED'S DUTIES AFTER ACCIDENT OR LOSS: Any failure to comply with reporting provisions of the policy shall not affect coverage provided to the Additional Insured, its elected or appointed officers, officials, employees, or volunteers.

CANCELLATION NOTICE. The insurance afforded by this policy shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days' prior written notice (ten (10) days if canceled due to non-payment) by regular mail return receipt requested has been given to the Additional Insured. Such notice shall be addressed as shown above.

WAIVER OF SUBROGATION: The insurer(s) named above agree to waive all rights of subrogation against the CITY, its elected or appointed officers, officials, agents, volunteers and employees for losses paid under the terms of this policy which arise from work performed by the Named Insured for the CITY.

Nothing herein contained shall vary, alter or extend any provision or condition of the Policy other than as above stated.

SIGNATURE OF INSURER OR AUTHORIZED REPRESENTATIVE OF THE INSURER

I, ___________________________________________________________(print/type name), warrant that I have authority to bind the above-named insurance company and by my signature hereon do so bind this company.

SIGNATURE OF AUTHORIZED REPRESENTATIVE (original signature required)

ORGANIZATION: TITLE:

ADDRESS:

TELEPHONE: ( ) DATE ISSUED:

6.3 Attachment 2 - Agreement

31 DATE: May 4, 2026

TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager

FROM: Cory Call, Police Chief
DEPARTMENT: Police
SUBJECT: AB 481 MILITARY EQUIPMENT USE ANNUAL REPORT FOR 2025

RECOMMENDATION
It is recommended that the City Council receive and review the Foster City Police Department's 2025 Military Equipment Use Annual Report (Attachment 2) and adopt a resolution renewing Ordinance No. 647 regarding the Police Department’s acquisition and use of military equipment pursuant to Assembly Bill 481 and Government Code Section 7070 et seq. and approving the Military Equipment Use Policy ("Policy 709").

EXECUTIVE SUMMARY
California Assembly Bill 481 (AB 481) and the California Government Code requires a law enforcement agency that receives approval for a military equipment use policy pursuant to Gov. Code Section 7071 to submit to the governing body an annual military equipment report for each type of military equipment approved by the governing body within one year of approval, and annually thereafter for as long as the military equipment is available for use.

In addition, Government Code section 7071(e)(1) requires that the legislative body review the ordinance that adopted Policy 709 and vote on whether to renew it annually.

6.4 6.4 Staff Report

32 BACKGROUND
On September 30, 2021, AB 481 was signed into law. Subsequently, Cal. Gov. Code Sections 7070, 7071, and 7072 were adopted to codify the requirements set forth in AB 481. The text of AB 481 and the above-mentioned Cal. Gov. Codes are attached to this Staff Report for reference.

AB 481 requires a law enforcement agency to obtain the approval of its governing body, through the adoption of a Military Equipment Use Policy, by ordinance at a regular meeting held pursuant to specified open meeting laws, prior to taking certain actions relating to the funding, acquisition, or use of military equipment, as defined. The bill allows the governing body to approve the funding, acquisition, or use of military equipment within its jurisdiction only if it determines that the military equipment meets specified standards. On April 18, 2022, the City Council reviewed and voted to approve the Military Equipment Use Policy (Policy 709) by Ordinance. A second reading was held on May 2, 2022, and Ordinance No. 647 was adopted. AB 481 also requires the governing body to annually review the ordinance and to either approve or disapprove a renewal of the authorization for a type of military equipment or amend the military equipment use policy if it determines, based on a Military Equipment Annual Report prepared by the law enforcement agency, that the military equipment does not comply with the above-described standards for approval.

Cal. Gov. Code Section 7070 provides a list of types of equipment that are to be considered "Military Equipment" for purposes of compliance with AB 481 and the Government Code. While the Foster City Police Department does not possess any tactical equipment that it has obtained from the military, nor does it possess any equipment that was designed for military use, it does possess some types of equipment that are listed in Gov. Code Section 7070. Additionally, the Foster City Police Department participates in a regional Special Weapons and Tactics (SWAT) team, which possesses and utilizes additional types of equipment that qualify as "Military Equipment" according to the Government Code.

ANALYSIS
Cal. Gov. Code Section 7070(d) defines a Military Equipment Use Policy as:
"Military equipment use policy” means a publicly released, written document governing the use of military equipment by a law enforcement agency or a state agency that addresses, at a minimum, all of the following:

1. A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment.

2. The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of military equipment.

6.4 6.4 Staff Report

33 3. The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.

4. The legal and procedural rules that govern each authorized use.

5. The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of military equipment to ensure the full protection of the public's welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy.

6. The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.

7. For a law enforcement agency, the procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment, and how the law enforcement agency will ensure that each complaint, concern, or question receives a response in a timely manner.

Cal. Gov. Code Section 7071(b) requires that the Police Department post to its website the Military Equipment Use Policy that it plans to propose to the City Council at least 30 days prior to any public hearing concerning the policy. The Police Department complied with this requirement by posting the policy being proposed tonight, to its public website, on February 23, 2026.

Cal. Government Code Section 7071(d) stipulates that the City Council shall only approve the Military Equipment Use Policy if it determines all of the following:

1. The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

2. The proposed military equipment use policy will safeguard the public's welfare, safety, civil rights, and civil liberties.

3. If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.

4. Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.

Cal. Gov. Code Section 7070(e) establishes that the Police Department is responsible for delivering to the City Council an Annual Military Equipment Report, which the City Council can utilize to confirm compliance with the Military Equipment Use Policy and the accompanying Military Equipment Use Ordinance.

6.4 6.4 Staff Report

34 The Foster City Police Department has not obtained any equipment from military surplus programs, known as 1033 Programs, it does not possess any tactical equipment that it has obtained from the military, and it does not possess any equipment that was designed for military use.

That said, Cal. Gov. Code Section 7070 provides a list of sixteen (16) types of equipment that are to be considered "Military Equipment" for the purpose of compliance with AB 481 and the associated Government Codes, and the Police Department does possess and use some of these listed types of equipment. Of the sixteen (16) types of equipment specified, the Police Department possesses only three (3) types. The list of the sixteen (16) types of Military Equipment per Cal. Gov. Code Section 7070 is included below. Equipment types that the Police Department possesses are noted in bold type.

1. Unmanned, remotely piloted, powered aerial or ground vehicles. a. UAS/Drones may be utilized to enhance the Department's mission of protecting lives and property when other means and resources are not available or are less effective. Uses may include but are not limited to:
search and rescue; suspect apprehension; crime scene documentation; tactical operations; scene security; hazard monitoring, identification and mitigation; response to emergency calls; crisis communications; legally authorized surveillance. This equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

2. Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this subdivision.

3. High mobility multipurpose wheeled vehicles (HMMWV), commonly referred to as Humvees, two and one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. However, unarmored all- terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this subdivision.

4. Tracked armored vehicles that provide ballistic protection to their occupants and utilize a tracked system instead of wheels for forward motion.

5. Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. a. The Police Department possesses a Mobile Command Vehicle (MCV).

This vehicle is not armored or weaponized in any way and is used to facilitate unified command during critical and planned incidents. This equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

6. Weaponized aircraft, vessels, or vehicles of any kind.

7. Battering rams, slugs, and breaching apparatuses that are explosive in nature.

However, items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person, are specifically excluded from this subdivision.

6.4 6.4 Staff Report

35 8. Firearms of .50 caliber or greater. However, standard issue shotguns are specifically excluded from this subdivision.\

9. Ammunition of .50 caliber or greater. However, standard issue shotgun ammunition is specifically excluded from this subdivision.

10.Specialized firearms and ammunition of less than .50 caliber, including assault weapons as defined in Sections 30510 and 30515 of the Penal Code, with the exception of standard issue service weapons and ammunition of less than .50 caliber that are issued to officers, agents, or employees of a law enforcement agency or a state agency. a.The Police Department possesses 18 semi-automatic rifles. 14 of these rifles are standard-issue duty weapons that are for all Peace Officers, which actually exempts them from this policy per California Government Code Section 7070{c){10). We have nonetheless included them in this policy in the interests of full transparency. The remaining bolt action rifle was issued to our SWAT Sniper. Officers may deploy the patrol rifle in any circumstance where the officer can articulate a reasonable expectation that the rifle may be needed.

Examples of some general guidelines for deploying the patrol rifle may include but are not limited to: Situations where the officer reasonably anticipates an armed encounter; When an officer is faced with a situation that may require accurate and effective fire at long range; Situations where an officer reasonably expects the need to meet or exceed a suspect's firepower; When an officer reasonably believes that there may be a need to fire on a barricaded person or a person with a hostage; When an officer reasonably believes that a suspect may be wearing body armor; When authorized or requested by a supervisor. This equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

11.Any firearm or firearm accessory that is designed to launch explosive projectiles.

12."Flashbang" grenades and explosive breaching tools, "tear gas," and "pepper balls," excluding standard, service-issued handheld pepper spray.

13.Taser Shockwave, microwave weapons, water cannons, and the Long Range Acoustic Device (LRAD).

14.The following projectile launch platforms and their associated munitions:
40mm projectile launchers, "bean bag," rubber bullet, and specialty impact munition (SIM) weapons.
a.The Police Department possesses twelve (12) 40mm less lethal projectile launchers. The 40mm Less Lethal Launchers and Kinetic Energy Munitions are intended for use as a less lethal use of force option. This equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

15.Any other equipment as determined by a governing body or a state agency to require additional oversight.

6.4 6.4 Staff Report

36 16. Notwithstanding paragraphs (1) through (15), "Military Equipment" does not include general equipment not designated as prohibited or controlled by the federal Defense Logistics Agency.

Additionally, the Foster City Police Department participates in a regional SWAT team (NCR SWAT), which possesses and utilizes additional types of equipment that qualify as "Military Equipment" according to Cal. Gov. Code Section 7070. While the equipment possessed by NCR SWAT is not purchased, owned, or maintained by the Police Department, it could be used in the City of Foster City if NCR SWAT is deployed, and is therefore included in the proposed Military Equipment Use Policy. It is important to note that NCR SWAT is generally only deployed in extreme circumstances such as active shooter incidents, hostage situations, and the execution of high-risk search and arrest warrants. The equipment NCR SWAT possesses is rarely deployed but could prove essential to emergency operations when needed.

The list of the sixteen (16) types of Military Equipment per Cal. Gov. Code Section 7070 is included below. Equipment types that the NCR SWAT Team possesses are noted in bold type.

1.Unmanned, remotely piloted, powered aerial or ground vehicles.

2.Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this subdivision.

However, unarmored all-terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this subdivision.

4. Tracked armored vehicles that provide ballistic protection to their occupants and utilize a tracked system instead of wheels for forward motion.

5.Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units.

6. Weaponized aircraft, vessels, or vehicles of any kind.

7.Battering rams, slugs, and breaching apparatuses that are explosive in nature. However, items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person, are specifically excluded from this subdivision.

8. Firearms of .50 caliber or greater. However, standard issue shotguns are specifically excluded from this subdivision.

9. Ammunition of .50 caliber or greater. However, standard issue shotgun ammunition is specifically excluded from this subdivision.

6.4 6.4 Staff Report

37 11.Any firearm or firearm accessory that is designed to launch explosive projectiles.

12."Flashbang" grenades and explosive breaching tools, "tear gas," and "pepper balls," excluding standard, service-issued handheld pepper spray.

13.Taser Shockwave, microwave weapons, water cannons, and the Long Range Acoustic Device (LRAD).

14.The following projectile launch platforms and their associated munitions:
40mm projectile launchers, "bean bag," rubber bullet, and specialty impact munition (SIM) weapons.

15.Any other equipment as determined by a governing body or a state agency to require additional oversight.

16.Notwithstanding paragraphs (1) through (15), "Military Equipment" does not include general equipment not designated as prohibited or controlled by the federal Defense Logistics Agency.

The Military Equipment Use Annual Report presented by staff includes detailed information for each type of Military Equipment listed, as required by Cal. Gov. Code Section 7070. This information includes the equipment's capabilities, its purpose/authorized uses, the legal/procedural rules governing its use, and the training required of staff prior to its use.

During the 2025 calendar year, no complaints related to military equipment were received by the Police Department. There were no violations of department policy related to the deployment of military equipment by department personnel. In the current 2026 calendar year, the Police Department intends to replace all 12 of its 40mm less lethal launchers including necessary munitions with similar updated versions. Currently, the Police Department's less lethal launchers are over 25 years old and have been fully funded through the Equipment Replacement Fund since Fiscal Year 2023. Upon receipt of the new less lethal launchers, the Military Equipment Use Policy will be updated to reflect those items in the inventory. The less lethal launchers being replaced will be disposed of upon receipt of the new equipment.

Staff have drafted the attached 2025 Military Equipment Use Annual Report, as required by state law, for City Council's review and acceptance.

As noted previously, Government Code section 7071(e)(1) requires that the City Council shall review any ordinance that it adopted approving the funding, acquisition, or use of military equipment at least annually, and vote on whether to renew the ordinance at a regular meeting. In considering whether to renew the Ordinance, the City Council shall determine based on the annual military equipment report submitted pursuant to Section 7072, whether each type of military equipment identified in that report has complied with the standards for approval. If the governing body determines that a type of military equipment identified in that annual military equipment report has not complied with the standards for approval, the governing body shall either disapprove a renewal of the authorization for that type of military equipment or require modifications to the military equipment use policy in a manner that will resolve the lack of compliance.

6.4 6.4 Staff Report

38 As detailed in the Annual Report, and above, the Department met the standards for use of the military equipment established in Policy 709. Although the Department did not deploy any such equipment, nor did NCR SWAT, continuing to have access to such equipment is vital to the Department in the event exigent circumstances occur. In such situations, there is sometimes need to deploy military equipment to promote safety and security of the community. The Department has exhibited its ability to judiciously utilize such equipment. As such, staff is recommending that the City Council vote to renew Ordinance No. 647.

California Environmental Quality Act
This item 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.

FISCAL IMPACT
There is no fiscal impact associated with this item.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Public Safety and Social Equity
ATTACHMENTS:

Attachment 1 - Resolution
Attachment 2 - Military Equipment Use Annual Report
Attachment 3 - Ordinance No. 647
Attachment 4 - Foster City Police Department Policy 709 Attachment 5 - Foster City Police Department Equipment List

6.4 6.4 Staff Report

39 4
5 8
2 RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY RENEWING ORDINANCE NO. 647 REGARDING POLICE DEPARTMENT ACQUISITION AND USE OF MILITARY EQUIPMENT PURSUANT TO ASSEMBLY BILL 481 AND GOVERNMENT CODE SECTION 7070 ET SEQ. AND APPROVING THE MILITARY EQUIPMENT USE POLICY

CITY OF FOSTER CITY
WHEREAS, effective January 1, 2022, Assembly Bill 481 (AB 481) (Government Code sections 7071 et. seq.) sets forth a process by which law enforcement agencies are to obtain approval from their governing bodies of a military equipment use policy through the adoption of an ordinance; and
WHEREAS, AB 481 added California Government Code Sections 7070 et seq. to codify the requirements set forth in AB 481 including that the City Council of Foster City annually review its Military Equipment and Use policy; and WHEREAS, the Foster City Police Department currently has military equipment (as that term is defined in Government Code section 7070(c)) in its inventory; and WHEREAS, the Foster City Police Department works closely with other local, county, state and federal law enforcement agencies within San Mateo County on police related matters, including safeguarding the public's welfare and safety, working on regional task forces, conducting training exercises, providing mutual aid and responding to emergencies; and
WHEREAS, in exigent circumstances, there is sometimes the need to deploy military equipment from or lend military equipment to outside entities to promote the safety and security of community members; and
WHEREAS, the continued collaboration with other law enforcement agencies in the deployment or other use of military equipment within the City is necessary to safeguard the public's welfare, safety, civil rights and civil liberties and there is no reasonable alternative that can achieve the same objective of officer and civilian safety; and WHEREAS, on April 18, 2022 and May 2, 2022, the City Council of the City of Foster City held a first and second reading, respectively, of Ordinance No. 647 Regarding Police Department Acquisition and Use of Military Equipment Pursuant to Assembly Bill 481 and

6.4 Attachment 1 - Resolution

40 4
5 8
2 Government Code Section 7070 Et Seq. and Approving The Military Equipment Use Policy; and
WHEREAS, Foster City Police Policy 709 sets forth a military equipment use policy that is consistent with the Police Department's current practices, has been posted on the Department's website since its adoption and complies with all the requirements of AB 481, and will ensure ongoing regulation and compliance with the law going forward and will provide a means of community engagement and transparency regarding use of military equipment by the Department; and
WHEREAS, Government Code section 7072 requires the Foster City Police Department to submit to the governing body an annual military equipment report for each type of military equipment approved by the governing body, as well as make such report available on its website. And further that within 30 days of publicly releasing the annual report, the law enforcement agency shall hold a well-publicized and conveniently located community engagement meeting; and
WHEREAS, the Foster City Police Department did submit an annual report to the City Council and make it publicly available on its website on February 23, 2026. Further, the Foster City Police Department did publicize that the Department would present the annual report at the May 4, 2026 City Council Meeting where members of the community would be allowed to discuss and ask questions regarding the annual report; and WHEREAS, on April 1, 2026, the Foster City Police Department did host a Coffee with a Cop event where the public was provided opportunity to discuss and ask questions regarding the annual report; and
WHEREAS, on May 4, 2026, the Foster City Police Department did present the annual report, where public comment and comments from the City Council were made, and the annual report was discussed; and
WHEREAS, on May 4, 2026, the City Council reviewed Ordinance No. 647, Regarding Police Department Acquisition and Use of Military Equipment Pursuant to Assembly Bill 481 And Government Code Section 7070 Et Seq,Approving the Military Equipment Use Policy; and
WHEREAS, the City Council has accepted the annual report and desires to renew Ordinance No. 647 in compliance with AB 481.

6.4 Attachment 1 - Resolution

41 4
5 8
2 NOW, THEREFORE, the City Council of the City of Foster City, California, DOES HEREBY RESOLVE as follows:

Section 1. The City Council of the City of Foster City finds and determines as follows:

A. The facts set forth in the recitals are true and correct and incorporated herein by this reference. The recitals constitute findings in this matter and, together with the staff report, other written reports, public testimony and other information contained in the record, are an adequate and appropriate evidentiary basis for the actions taken in this ordinance.

B. That based on the annual military equipment report submitted pursuant to Section 7072, that each type of military equipment identified in that report has complied with the standards for approval set forth in Government Code section 7071(d).

C. The City Council has reviewed Ordinance No. 647 Regarding Police Department Acquisition and Use of Military Equipment Pursuant to Assembly Bill 481 And Government Code Section 7070 et Seq. Approving The Military Equipment Use Policy, and wishes to renew that ordinance for an additional year, as the Council continues to find the following:
a. Authorizing the use of military equipment as set forth in Ordinance No. 647 and Foster City Police Policy 709 is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. The acquisition and use of the military equipment as set forth in Foster City Police Policy 709 is part of the Police Department's overall approach to Critical Incident Management, Use of Force, De-Escalation and public safety. The equipment will enable department members to properly respond to both planned and unplanned events efficiently and effectively. b. Ordinance No. 647 and Foster City Police Policy 709 will safeguard the public's welfare, safety, civil rights, and civil liberties by ensuring required reporting out, the opportunity for community engagement and feedback, and transparency and oversight regarding the acquisition and use of the specified military equipment in the City of Foster City. c. The Foster City Police Department is not proposing to purchase any military equipment, as defined in AB 481, at this time.
d. Prior military equipment use, as defined by AB 481, by the Foster City Police Department complied with applicable policies in effect at the time of the use. e. Ordinance No. 647 and Foster City Police Policy 709 comply with the requirements of AB 481.

6.4 Attachment 1 - Resolution

42 4
5 8
2 Section 2. The City Council finds that renewal of Ordinance No. 647 and Foster City Police Policy 709 are exempt from the provisions of the California Environmental Quality Act ("CEQA") because they will not result in a direct or reasonably foreseeable indirect physical change in the environment and is not a "project," as defined in Section 15378 of the CEQA Guidelines.

Section 3. The City Council further directs staff to continue its annual review procedure to review and provide for approval of any renewal of the military equipment use policy, in accordance with Government Code section 7072, to occur before May 1st of each subsequent year.

Section 4. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases of this ordinance, or its application to any other person or circumstance. The City Council declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

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

6.4 Attachment 1 - Resolution

43 Outside
Agency FCPD
Matrice 210 N/A 1
Mavic ll Enterprise N/A 1
Sky Hero Loki Mkll N/A 2
Robotex Avatar ll N/A 3 N/A
iRobot packbot 510 N/A 1 N/A
Recon robotics recon scout N/A 1 N/A
Armored Vehicles
International Armor Group
Sentinel
The purpose of the armored vehicle is to provide for the safe transport, security, and rescue of agency personnel and citizens in high-risk incidents, and the equipment was used in this manner, for law enforcement purposes. N/A

NCR SWAT
(outside agency) None 1 N/A
Braun Northwest Mobile
Command Vehicle N/A 1 N/A
Ford F53 Motorhome Command
Post N/A
FC Open House
Display 1 N/A
Colt M4 Carbine LE 6921 EPR 14.5" Training 1,200.00$
Field Operations
Budget 14 N/A
Colt M4 Carbine LE 6933 EPR 11.5" Training 1,400.00$
Field Operations
Budget 4 N/A
.308 Bolt Action Remington 700 win Training 1,000.00$
Field Operations
Budget 1 N/A
SPEER GOLD DOT .223 CALIBER 62 GRAIN RIFLE
ROUND Training 2,600.00$
Field Operations
Budget 3200 N/A
FEDERAL AMERICAN EAGLE .223 CALIBER 55
GRAIN RIFLE ROUND Training 2,000.00$
Field Operations
Budget 4800 N/A
Remington Disintegrator .223 CALIBER
FRANGIBLE RIFLE ROUND Training 1,500.00$
Field Operations
Budget 980 N/A
FEDERAL AMERICAN EAGLE 9MM LUGER Training 2,500.00$
Field Operations
Budget 4800 N/A
FEDERAL TACTICAL HST 9MM LUGER Training 1,500.00$
Field Operations
Budget 590 N/A
RUAG .308 STYX 167 grain Training 435.00$
Field Operations
Budget 80 N/A
AR-15 semi-auto rifles and ammunition

N/A NCR SWAT
(outside agency)
TD Multiport Plus Distraction Device
N/A

52.00$
Varies, depending
on usage 5 N/A
Defense Technology- Training safe smoke
grenade N/A N/A 32.00$ 0 2 N/A
Detonating Cord N/A 0 feet N/A
Blasting Cap N/A 0 N/A
Remington 870 Breaching Shotgun N/A 5 N/A
Defense Technology- Frangible Breaching
Round N/A 50 N/A
CTS 7290M N/A N/A
CTS 5230 N/A N/A
CTS 6330 and 6340 N/A N/A
CTS 5230B N/A N/A
CTS 8210 N/A N/A
Long Range Acoustical DeviceLong Range Acoustical Device (LRAD) The purpose of the equipment is to issue dispersal orders during crowd and riot control situations or to address the public in civil emergencies, natural disasters, evacuations, and police incidents. In the last year this was deployed to give direction during high-risk situations.

N/A NCR SWAT
(outside agency)
None
N/A-Maintained and
operated by another
agency
N/A-Maintained
and operated by
another agency
N/A-Maintained and
operated by another
agency
1 N/A
CTS Launching cup Combined Systems LC5 40MM Launching Cup The purpose of the equipment is to limit the escalation of conflict where employment of lethal force is prohibited or undesirable such as self-destructive, dangerous, and/or combative individuals; barricaded suspects; riot/crowd control and civil unrest incidents; and training exercises. This equipment was not used last year

N/A NCR SWAT
(outside agency)
None
N/A-Maintained and
operated by another
agency
N/A-Maintained
and operated by
another agency
N/A-Maintained and
operated by another
agency
N/A
Defense Technologies 40MM Launcher
Training
1,000.00$ 0
Field Operations
Budget 12 N/A
Funding source
for following
calendar year
QTY
possessed
of each
type of
equipment
If we intend to acquire
additional military
equipment in the next
year, the quantity sought
Rifles & Ammunition
The purpose of equipment is to address a threat with more precision and/or greater distances than a handgun, if present and feasible, and this is the manner in which it was deployed, including training.

Possessed by
Summary of
complaints
received
Result of any internal
audits or violations of
military equipment use
policy Acquisition Costs Annual Costs
Where equipment was
used
Equipment Category Description Summary of how equipment was used and purpose of use SMPD Intends to acquire three
(3) additional UAS devices during
the next year
Unmanned Aircraft System (UAS)
UAS/Drones may be utilized to enhance the Department’s mission of protecting lives and property when other means and resources are not available or are less effective. Uses may include but are not limited to: (a) search and rescue; (b) suspect apprehension; (c) crime scene documentation; (d) tactical operations; (e) scene security; (f) hazard monitoring, (g) identification and mitigation; (h) response to emergency calls; (i) crisis communications; (j) legally authorized surveillance.

NCR SWAT
(outside agency)
None
N/A-Maintained
and operated by
another agency
N/A-Maintained and
operated by another
agency
N/A-Maintained and
operated by another
agency
Command and Control Vehicles The equipment was utilized as a mobile command post during any incidents that required command and control beyond a static dispatch center and included official law enforcement purposes, pre-planned evens and training exercises.

NCR SWAT
(outside agency)
None
None
Robots NCR SWAT
(outside agency)
Robots were utilized to remotely gain visual/audio intelligence, deliver equipment, open doors, and clear buildings ahead of a search team, for official law enforcement purposes, including search and rescue; suspect apprehension; tactical operations; scene security; hazard monitoring, identification and mitigation; response to emergency calls; crisis communications; and legally authorized surveillance.

Annual
maintenance is
$25.00/rifle.

Ammunition costs
are typically
$11,000/year
Distraction Devices FCPD
None
FCPD
None

NCR SWAT
(outside agency)
None
N/A-Maintained and
operated by another
agency
N/A-Maintained
and operated by
another agency
N/A-Maintained and
operated by another
agency
N/A-Maintained and
operated by another
agency
The purpose of the equipment is to limit the escalation of conflict where employment of lethal force is prohibited or undesirable such as self-destructive, dangerous, and/or combative individuals; barricaded suspects; riot/crowd control and civil unrest incidents; and training exercises.

The purpose of the equipment is to limit the escalation of conflict where employment of We assess and monitor after any
deployment or use of equipment to
ensure the equipment is being utilized
in a manner which is consistent with
Department Policy and there were no
violations
Chemical Agents NCR SWAT
(outside agency)
None
N/A-Maintained and
operated by another
agency
N/A-Maintained
and operated by
another agency
Field Operations
Budget
Distraction devices were deployed to distract dangerous suspects to allow tactical teams to complete a dangerous mission or task. Distraction devices were only used during high- risk situations where their use would enhance officer safety; and during training exercises.

Explosive Breaching Tools
The purpose of the equipment is to safely create a positive breach and enter structures for official law enforcement purposes and in accordance with State and Federal Law; and during training exercises. This equipment was not used last year.

6.4 Attachment 2 - Military Equipment Use Annual Report

44 Direct Impact 40MM Reloadable Training
Sponge Round
Training
1,102.00$
Varies, depending
on usage
Field Operations
Budget 254 N/A
Combined Systems 40MM Sponge, smokeless,
spin stabilized N/A 924.00$ 0
Field Operations
Budget 44 N/A
40mm Launchers and Rounds
The purpose of the equipment is to limit the escalation of conflict where employment of lethal force is prohibited or undesirable such as self-destructive, dangerous, and/or combative individuals; barricaded suspects; riot/crowd control and civil unrest incidents; and training exercises. This equipment was not used last year FCPD
None

6.4 Attachment 2 - Military Equipment Use Annual Report

45 ORDINANCE NO. 647

AN ORDINANCE OF THE CITY OF FOSTER CITY REGARDING POLICE

DEPARTMENT ACQUISITION AND USE OF MILITARY EQUIPMENT PURSUANT TO ASSEMBLY BILL 481 AND GOVERNMENT CODE SECTION 7070 ET SEQ. AND

APPROVING THE MILITARY EQUIPMENT USE POLICY

CITY OF FOSTER CITY

The City Council of the City of Foster City does ordain as follows:

WHEREAS, effective January 1, 2022, Assembly Bill 481 (AB 481) (Government Code sections 7071 et. seq.) sets forth a process by which law enforcement agencies are to obtain approval from their governing bodies of a military equipment use policy through the adoption of an ordinance; and

WHEREAS, AB 481 added California Government Code Sections 7070, 7071, and 7072 to codify the requirements set forth in AB 481 includin g that the City Council of Foster City approve a Military Equipment and Use policy by Ordinance;

WHEREAS, pursuant to Government Code Section 7071(a)(1), requires that an ordinance must be timely adopted before a law enforcement agency may acquire or use new or existing military equipment and engage in other specified activities; and

WHEREAS, the Foster City Police Department currently has military equipment (as that term is defined in Government Code section 7070(c)) in its inventory; and

WHEREAS, the Foster City Police Department works closely with other local, county, state and federal law enforcement agencies within San Mateo County on police related matters, including safeguarding the public’s welfare and safety, working on regional task forces, conducting training exercises, providing mutual aid and responding to emergencies; and

WHEREAS, in exigent circumstances, there is sometimes the need to deploy military equipment from or lend military equipment to outside entities to promote the safety and security of community members; and

WHEREAS, the continued collaboration with other law enforcement agencies in the deployment or other use of military equipment within the City is necessary to safeguard the public’s welfare, safety, civil rights and c ivil liberties and there is no reasonable alternative that can achieve the same objective of officer and civilian safety; and
DocuSign Envelope ID: 152901D7-7F7E-410C-8BC2-4BD936F62DBA

6.4 Attachment 3 - Ordinance No. 647

46 City Ordinance No. 647
WHEREAS, Foster City Police Policy 709 sets forth a military equipment use policy that is consistent with the Police Department’s current practices, has been posted on the Department’s website for at least thirty (30) days, complies with all the requirements of AB 481, will ensure ongoing regulation and compliance with the law going forward and will provide a means of community engag ement and transparency regarding use of military equipment by the Department; and

WHEREAS, public notice has been provided in accordance with applicable law;
and

WHEREAS, the City Council desires to approve a military use policy in compliance with AB 481.

NOW, THEREFORE, the City Council of the City of Foster City, California, DOES HEREBY ORDAIN as follows:

SECTION 1. The City Council of the City of Foster City finds and determines as follows:

B. Authorizing the use of military equipment as set forth in this ordinance and Foster City Police Policy 709 is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. The acquisition and use of the military equipment as set forth in Foster City Police Policy 709 is part of the Police Department’s overall approach to Critical Incident Management, Use of Force, De-Escalation and public safety. The equipment will enable department members to properly respond to both planned and unplanned events efficiently and effectively.

C. This ordinance and Foster City Police Policy 709 will safeguard the public’s welfare, safety, civil rights, and civil liberties by ensuring required reporting out, the opportunity for community engagement and feedback, and transparency and oversight regarding the acquisition and use of the specified military equipment in the City of Foster City.

D. The Foster City Pol ice Department is not proposing to purchase any military equipment, as defined in AB 481, at this time.

E. Prior military equipment use, as defined by AB 481, by the Foster City Police DocuSign Envelope ID: 152901D7-7F7E-410C-8BC2-4BD936F62DBA

6.4 Attachment 3 - Ordinance No. 647

47 City Ordinance No. 647
Department complied with applicable policies in effect at the time of the use.

F. This ordinance and Foster City Police Policy 709 comply with the requirements of AB 481.

Section 2. The City Council finds that this ordinance and Foster City Police Policy 709 are exempt from the provisions of the California Environmental Quality Act (“CEQA”) because they will not result in a direct or reasonably foreseeable indirect physical change in the environment and is not a “project,” as defined in Section 15378 of the CEQA Guidelines.

Section 3. Approval of Military Equipment Policy. The City Council adopts the 2022-2023 Military Equipment Use Policy, as set forth in Exhibit A. The City Council further directs staff to establish an annual review procedure to review and provide for approval of any renewal of the military equipment use policy, in accordance with Government Code section 7072, to occur before May 1st of each subsequent year.

Section 4 . Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of thi s ordinance, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases of this ordinance, or its application to any other person or circumstance. The City Council declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

Section 5. Effective Date. This ordinance shall be effective thirty (30) days after its adoption. Within fifteen (15) days after its adoption, the City Clerk of the City of Foster City shall cause this ordinance to be published pursuant to the provisions of Government Code Section 36933.

DocuSign Envelope ID: 152901D7-7F7E-410C-8BC2-4BD936F62DBA

6.4 Attachment 3 - Ordinance No. 647

48 City Ordinance No. 647
This Ordinance was introduced and read on the 16th day of April, 2022, and passed and adopted on the 2nd day of May 2022, by the following vote:

AYES: Councilmembers Froomin, Gehani, Hindi, Sullivan, and Mayor Awasthi NOES: None

ABSENT: None

ABSTAIN: None

____________________________________

RICHA AWASTHI, MAYOR

ATTEST:

______________________________

PRISCILLA SCHAUS, CITY CLERK

DocuSign Envelope ID: 152901D7-7F7E-410C-8BC2-4BD936F62DBA

6.4 Attachment 3 - Ordinance No. 647

49 Policy
709
Foster City Police Department
Foster City PD Policy Manual
Copyright Lexipol, LLC 2026/02/10, All Rights Reserved.

Published with permission by Foster City Police Department Military Equipment - 1
Military Equipment
709.1 PURPOSE AND SCOPE
California Government Code section 7071(b) requires that law enforcement agencies submit a proposed Military Equipment Use Policy to their governing body for approval.

California Government Code §7070(c) provides a list of equipment types that are considered to be "military equipment" for purposes of this policy requirement, and this Military Equipment Use Policy includes information for any such equipment types that are possessed by the Foster City Police Department, or reasonably likely to be deployed in Foster City by its law enforcement partners. 709.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body – The elected or appointed body that oversees the Department.

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• Area denial electroshock devices, microwave weapons, water cannons, long-range acoustic devices (LRADs), acoustic hailing devices, and sound cannons.

6.4 Attachment 4 - Foster City Police Department Policy 709

50 Foster City Police Department
Foster City PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2026/02/10, All Rights Reserved.

Published with permission by Foster City Police Department Military Equipment - 2
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.
709.2 POLICY
It is the policy of the Foster City Police Department that members of this department comply with the provisions of California Government Code § 7071 with respect to military equipment. 709.3 ANNUAL MILITARY EQUIPMENT REPORT
Pursuant to California Government Code §7070(d)(6), and in accordance with California Government Code §7072, the Foster City Police Department will submit to the Foster City City Council an Annual Military Equipment Report and will make that report publicly available on its internet website. The Annual Military Equipment Report required by this section will remain publicly available on the City's internet website for as long as the military equipment is available for use.

In addition, within 30 days of submitting and publicly releasing an Annual Military Equipment Report pursuant to this section, the Police Department shall hold at least one well-publicized and conveniently located community engagement meeting. The Annual Military Equipment Report will include the following information for the immediately preceding calendar year for each type of military equipment:
(a) A summary of how the military equipment was used and the purpose of its use. (b) A summary of any complaints or concerns received concerning the military equipment. (c) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. (d) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. (e) The quantity possessed for each type of military equipment. (f) If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.

The Foster City City Council will use the Annual Military Equipment Report as a mechanism to ensure the Foster City Police Department's compliance with this Military Equipment Use Policy, and to help it determine whether to approve, revise, or revoke components of the Military Equipment Use Policy for the subsequent year.
709.4 COLLABORATION OR COORDINATION WITH OTHER AGENCIES Law enforcement agencies responding to a call for mutual aid or who participate in collaboration with Foster City Police Department within the City of Foster City shall adhere to their own policies on the use of military equipment.

6.4 Attachment 4 - Foster City Police Department Policy 709

51 Foster City Police Department
Foster City PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2026/02/10, All Rights Reserved.

Published with permission by Foster City Police Department Military Equipment - 3
709.5 POLICY COMPLIANCE
Government Code section 7070 requires that this policy specify the mechanisms to be used by the Department to ensure compliance with this policy. Complaints regarding violations of this policy are subject to investigation and discipline in accordance with Policy 1020, and other policies of the Department related to officer discipline. Complaints, questions, or other inquiries can be made as described below in the Public Involvement section. Further, The Chief will designate a Military Equipment Coordinator, whose responsibilities are described herein, which will include assisting with ensuring compliance with this policy.
709.6 PUBLIC INVOLVEMENT
Pursuant to California Government Code §7070(d)(7), members of the public may register complaints or concerns or submit questions about the use of each specific type of Military Equipment in this policy by any of the following means:
(a) Via email to: [email protected]
(b) Via phone call to: 650-286-3300
(c) Via mail sent to: Foster City Police Department Attn: Military Equipment Coordinator 1030 E. Hillsdale Blvd. Foster City Ca 94404
The Foster City Police Department is committed to responding to complaints, concerns and/or questions received through any of the above methods in a timely manner. 709.7 MILITARY EQUIPMENT COORDINATOR
The Chief of Police shall designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Foster City Police Department (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:
(a) Publicizing the details of the meeting.
(b) Preparing for public questions regarding the department's funding, acquisition, and use of equipment.

6.4 Attachment 4 - Foster City Police Department Policy 709

52 Foster City Police Department
Foster City PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2026/02/10, All Rights Reserved.

Published with permission by Foster City Police Department Military Equipment - 4
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
709.8 MILITARY EQUIPMENT INVENTORY
Pursuant to Government Code section 7070(d), the AB481 FCPD Equipment list and Military Equipment use annual report (See website for detailed lists) provides a description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment. This section will include the purposes and authorized uses, the fiscal impact, the legal and procedural rules that govern the use, and the training required, for each type of military equipment.This section of the Military Equipment Use Policy is divided into two sections.

Section One lists qualifying equipment that is owned and/or utilized by the Foster City Police Department.

Section Two lists qualifying equipment not previously listed in this policy, that is not owned or regularly utilized by the Foster City Police Department, but which is known to be owned and/ or utilized by the North Central Regional SWAT (NCR SWAT) Team, for which the Foster City Police Department is a participating agency. While the equipment in Section Two is not purchased, owned, or maintained by the Foster City Police Department, it could be used in the City of Foster City if NCR SWAT is deployed, and is therefore included in this Military Equipment Use Policy. It is important to note that NCR SWAT is generally only deployed in extreme circumstances such as active shooter incidents, hostage situations, and the execution of high risk search and arrest warrants. The equipment NCR SWAT possesses is rarely deployed but could prove essential to emergency operations when needed.

6.4 Attachment 4 - Foster City Police Department Policy 709

53 4
5 8
6 Section One: Qualifying Equipment Owned/Utilized by the Foster City Police Department Equipment Name: 5.56 mm Semiautomatic Rifles and ammo - CA Gov’t Code §7070(c)(10) Quantity Owned/Sought: 18 owned
(14- 14.5” / 4 -11.5”)
Lifespan: 15 years
Equipment Capabilities: The Colt AR15 semiautomatic rifle is capable of firing 5.56 mm projectile bullet.

Manufacturer Product Description:

Colt Carbine LE 6921 EPR Series (14). 14.5”
Throughout the world today, Colt's reliability, performance, and accuracy provide our Armed Forces the confidence required to accomplish any mission. Colt's LE6921 EPR series shares many features of its combat-proven brother, the Colt M4.
(Description source: https://www.colt.com/detail-page/enh-patrol-rif-556mm-16-301) Colt M4 Carbine LE 6933 EPR (4). 11.5”
Built for the demanding use of those who protect our communities every day, the Colt Enhanced Patrol Rifle (EPR) is the next evolution in the world's most dependable, thoroughly field-tested patrol rifle.

Featuring an extended handguard that accepts modular rail segments for mounting a wide variety of pro-grade optics, lighting, and ergonomics-enhancing accessories, as well as the highly durable Magpul MBUS Pro Series front and rear back up sights and B5 Bravo buttstock. The Colt EPR reestablishes the Colt AR-15 as the finest tool for local, regional, and national law enforcement agencies.

The Colt AR15 semiautomatic rifle is capable of firing 5.56mm projectile bullet. i. SPEER GOLD DOT .223 CALIBER 62 GRAIN RIFLE ROUND, cost: $260 per case of 500, quantity: 3200 rounds. Remington ammunition made by Speer is reloadable, features nickel- plated brass cases and Boxer primers, and this is a non-corrosive round. The Gold Dot LE ammunition goes through a process of joining the jacket and core one molecule at a time, thanks to this, Speer eradicates the potential for the leading cause of bullet failure (jacket/core separation). This process will guarantee extraordinary weight retention through barriers as strong as auto-glass. In addition to its remarkable strength, Gold Dot rifle ammunition asserts remarkable accuracy. With exact tolerances and unparalleled bullet uniformity of jacket thickness.
ii. FEDERAL AMERICAN EAGLE AMMUNITION .223 55 GRAIN FULL METAL JACKET, cost: $219.76 per case of 500, quantity: 4800 rounds. Federal American Eagle Ammunition is designed specifically for target shooting, training and practice. This ammo is loaded to the same specifications as Federal's Premium loads, but at a more practical price for economical practicing. This ammunition is new production in reloadable brass cases. iii. FEDERAL 9MM AMERICAN EAGLE 147 GRAIN FMJ TRAINING AMMUNITION, cost:
$229.85 per case of 500, quantity: 4800 rounds. Whether you’re looking for contemporary calibers or a couple of classics, our American Eagle line has what you’re looking for. Loaded with clean-burning powders, Federal grade primers and brass, and a choice of bullet styles, shooters know they get quality and affordability with American Eagle. Hit your target and train harder with the proven line of American Eagle® handgun ammunition. It provides

6.4 Attachment 5 - Foster City Police Department Equipment List

54 4
5 8
6 performance similar to self-defense and competition loads for a familiar feel and realistic practice.
iv.FEDERAL TACTICAL HST 9MM LUGER DUTY AMMUNITION. Quantity 590 rounds, Cost: $1,500.00: Effective self-defense requires ammunition that provides consistent expansion, optimum penetration and superior terminal performance. And HST® delivers.

That’s why it’s already the duty load of choice for law enforcement officers throughout the world. Its specially designed hollow point won't plug while passing through a variety of barriers, and the bullet jacket and core hold together to provide nearly 100 percent weight retention through even the toughest materials.
v. REMINGTON DISINTEGRATOR .223 CALIBER FRANGIBLE RIFLE ROUND. Quantity 980 rounds, Cost: $1,600.00: Disintegrator Jacketed frangible ammo is a totally lead-free and heavy-metal-free, frangible training load for realistic, safe and cost-effective training and qualification programs. Bullet construction is a high strength metal particle core sealed in a jacket that instantly breaks up when impacting steel targets or backstops, leaving harmless metal particles and small pieces of thin jacket.

Purpose/Authorized Uses:

Members may deploy the patrol rifle in any circumstance where the member can articulate a reasonable expectation that the rifle may be needed. Examples of some general guidelines for deploying the patrol rifle may include but are not limited to: (a) situations where the member reasonably anticipates an armed encounter, (b) when a member is faced with a situation that may require accurate and effective fire at long range, (c) situations where a member reasonably expects the need to meet or exceed a suspect's firepower, (d) when a member reasonably believes that there may be a need to fire on a barricaded person or a person with a hostage, (e) when a member reasonably believes that a suspect may be wearing body armor, (f) when authorized or requested by a supervisor, and (g) when needed to euthanize an animal.

Fiscal Impacts: The initial cost of equipment was approximately $23,000. The ongoing costs for ammunition will vary and maintenance is conducted by departmental staff.

Legal/Procedural Rules Governing Use: All applicable State, Federal and Local laws governing police use of force. Various Foster City Police Department Policies on Use of Force and Firearms.

Training Required: Officers must successfully complete a CA POST certified 16-hour patrol rifle course as well as regular department firearms training and qualifications as required by law and policy.

Other Notes:

6.4 Attachment 5 - Foster City Police Department Equipment List

55 4
5 8
6 Equipment Name: .308 Bolt Action Rifle – Remington 700 win and ammo Quantity Owned/Sought: 1 owned Lifespan:Barrel life rated for approximately 5,000 rounds.

Equipment Capabilities: A bolt-action shoulder-fired rifle with precision optics that fires a .308 Winchester cartridge.

Manufacturer Product Description:

It's the number one bolt-action of all time, proudly made in the U.S.A. For over 50 years, more Model 700s have been sold than any other bolt-action rifle before or since. The legendary strength of its 3- rings-of-steel receiver paired with a hammer-forged barrel, combine to yield the most popular bolt- action rifle in history.

Top choice of elite military snipers, the Model 700 is unequalled in tactical precision. Whether defending freedom or pursuing big game, its out-of-the-box accuracy is unmatched. (Description source: https://www.remarms.com/rifles/bolt-action/model-700/) The Remington 700 Bolt Action Rifle is capable of firing a .308 projectile bullet. i. RUAG .308 STYX 167 grain SWS P 200 Hornady 308, quantity 80 rounds, cost $435.00: The hyper expanding hollow point bullet immediately deposits its energy within a very short distance providing excellent stopping power on soft targets and is direction stable. The sophisticated bullet tip provides an absolutely reliable hyper expansion to approximately twice the original diameter. Tight production tolerances and small production batches ensure constant ballistic values and stringent quality controls guarantee identical trajectory from batch to batch. A wide range of special purpose bullets provide the desired terminal effect on hard and soft targets on every mission. All .308 Win. SWISS P rounds have an identical point of impact at 100 m which allows the shooter to instantly change the bullet type.

Purpose/Authorized Uses:
308 bolt action Sniper rifles are to be used exclusively by officers assigned to the SWAT Sniper Team.

These rifles are typically deployed with the SWAT Sniper Team during high risk SWAT operations and special events or instances wherein Sniper Over Watch Teams are needed.

The use of this weapons system is also governed under Lexipol Policy 300 - Use of Force, and Lexipol Policy 312 – Firearms.

Fiscal Impacts: The initial cost of equipment was approximately $1,000. The ongoing costs for ammunition will vary and maintenance is conducted by departmental staff.

Legal/Procedural Rules Governing Use: All applicable State, Federal and Local laws governing police use of force. Various Foster City Police Department Policies on Use of Force and Firearms.

Training Required: SWAT Snipers must successfully complete a month-long SWAT Academy and have at least two years’ experience on the SWAT Team prior to being eligible for Sniper selection.

SWAT Snipers must attend a 40-hour POST approved Basic Sniper School, and regularly train and qualify with various weapons systems including the .308 bolt action Sniper rifle to maintain proficiency.

Other Notes:

6.4 Attachment 5 - Foster City Police Department Equipment List

56 4
5 8
6 Equipment Name: Flashbang grenades, tear gas and pepper balls - CA Gov’t Code §7070(c)(12)
Quantity Owned/Sought: 6 Lifespan: Upon use
Equipment Capabilities: A distraction device is ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations.

Manufacturer Product Description:
i. ALS09NR (Flashbang) / TD Multiport Plus Distraction Device, cost $51.92 each, quantity 5: The Multi-Port™ II Distraction Device® Non-Reloadable is a new addition to the Defense Technology® product line. This device continues to provide the customer with the same historical performance as the Low Roll II™ Non-Reloadable Distraction Device but incorporates a round body and a water-resistant charge tube. • Single use, non-reloadable device • Delivers a sound and light output which are noticeable in day or night conditions • Produces 175 dB of sound output at 5 ft.
• Produces 6–8 million Candela light output
• Water-resistant charge tube for high humidity environments ii. DEFENSE TECHNLOGY- Safe-Smoke training white smoke grenade cost $31.65 each, quantity

2. Purpose/Authorized Uses:

Distraction devices are ideal for distracting dangerous suspects to allow tactical teams to complete a dangerous mission or task. Distraction devices shall only be used by officers trained in the proper use and deployment. Diversionary Devices shall only be used: (a) by officers who have been trained in their proper use, (b) in hostage and barricaded subject situations, (c) in high risk warrant (search/arrest) services where there may be extreme hazards to officers, (d) during other high-risk situations where their use would enhance officer safety, and € during training exercises.

Fiscal Impacts: Varies depending on use.

Legal/Procedural Rules Governing Use: It is the policy of the FCPD to utilize diversion devices only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.

Training Required: Officers must attend training hosted by certified POST instructors which is followed by annual refresher training.

Other Notes:

6.4 Attachment 5 - Foster City Police Department Equipment List

57 4
5 8
6 Equipment Name: 40mm Launchers and rounds
Quantity Owned/Sought: 12 Lifespan: 20 years
Equipment Capabilities: 40mm Launchers are utilized by department personnel as a less lethal tool to launch less lethal impact rounds. The 40mm Less Lethal Launcher is capable of firing 40mm Kinetic Energy Munitions, which are essentially rubber projectiles.

Manufacturer Product Description:

Defense Technologies 40mm launcher, cost $1,000.00 ea. Manufactured exclusively for Defense Technology®, the 40LMTS is a tactical single shot launcher with light rail. The ambidextrous Lateral Sling Mount (LSM) and QD mounting systems allow both a single and two point sling attachment. The 40LMTS will fire standard 40mm less lethal ammunition, up to 4.8 inches in cartridge length. The Picatinny Rail Mounting System will accept a wide array of enhanced optics/sighting systems. i.Direct Impact 40mm reloadable training Sponge Round – Model 6530 Defense Technology.

Approx. 254 rounds. 6530LE-50 40mm Reloadable Training Round provides the same point of impact accuracy as the 40mm munitions it simulates and is the most cost effective way to conduct training. Reloading the munitions takes seconds and one hex key. Product for use on inanimate targets.
ii. 40mm sponge, smokeless, spin stabilized/Combined Systems. Approx. 44 rounds. Sponge Baton is a spin-stabilized projectile delivering blunt trauma effect. Although it is extremely accurate and consistent, accuracy is dependent on the launcher, using open sights vs. an improved sight, environmental conditions, and the operator. Effectiveness depends on many variables, such as distance, clothing, stature, and the point where the projectile impacts.

Purpose/Authorized Uses:

The 40mm Less Lethal Launchers and Kinetic Energy Munitions are intended for use as a less lethal use of force option. To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use may include, but are not limited to: (a) self-destructive, dangerous, and/or combative individuals; (b) barricaded suspects; and (c) training exercises.

Fiscal Impacts: The initial cost of this equipment was approximately $12,000. The ongoing costs for munitions will vary and maintenance is conducted by departmental staff.

Legal/Procedural Rules Governing Use: All applicable State, Federal and Local laws governing police use of force. Various Foster City Police Department Policies on Use of Force and Crowd Control.

Training Required: Officers must complete a department certified 40mm course as well as regular training and qualifications as required by law and policy.

Other Notes:

6.4 Attachment 5 - Foster City Police Department Equipment List

58 4
5 8
6 Section Two: Qualifying Equipment known to be owned and/or utilized by law enforcement units with which the Foster City Police Department collaborates and/or participates for law enforcement purposes
Equipment Name: Unmanned Aircraft Systems (UAS/Drones) – CA Gov’t Code §7070(c)(1) Quantity Owned/Sought: 24 (not owned by FCPD) Lifespan: All UAS equipment, 5-7 years.

Equipment Capabilities: Remotely piloted aerial vehicle capable of providing live and recorded video images captured from aerial positions, including images enhanced by Forward Looking Infrared (FLIR) and optical zoom lenses.

Manufacturer Product Description:
i. DJI Matrice 30 cost $15,000, quantity 1: The DJI Matrice 30 is a powerful, industrial-grade fight platform with world-class agility and speed, two barometers, and redundant IMUs for maximum reliability, and new smart flight features that make capturing complex shots easy.

The aircraft’s visual sensors enable enhanced hovering precision even when flying indoors or in environments where GNSS is unavailable. The drone’s new airframe design gives it an IP43 Ingress Protection Rating, in accordance with the global IEC 60529 standard. The M210/M210 RTK’s mechanical design, along with quick release landing gears and mounted folding arms, makes it easy to transport, store, and prepare for flight. ii. Mavik II Enterprise, cost $6,500.00, quantity 6: The DJI Mavic II Enterprise features omnidirectional Vision Systems and Infrared Sensing Systems, and comes with a fully stabilized 3-axis gimbal camera with an equivalent 24-48 mm 2x optical enterprise lens capable of shooting 4k videos and 12 megapixel photos that support up to 6x FHD zoom. DJI signature technologies such as Obstacle Sensing and the Advanced Pilot Assistance System, help you capture complex shots effortlessly. Additional features like the built in AirSense make you aware of your surrounding airspace, and password protection helps you maintain secure access to your aircraft and protect your data.
iii. Skydio X10, quantity $22,000, quantity 5: The Skydio X10 combines new, cutting-edge data capture cameras, unparalled autonomy, and versatile hardware to searve a range of industries, inlicing public safety. The Skedio X10 boasts an impressive array of features and capabilities that have never before existed in a single platform, including high-resolutino cameras, versatile airframe, AI-Powered autonomy, and unmatched portability. Its compact size and ease of use enable distribution to every officer on patrol.
iv. Sky Hero Loki MkII, quantity 2, cost $10,000.00 (for kit of 2): The Loki MkII is the most incredible indoor small tactical UAV system in the world, fully purpose built for close quarter, under roof, tactical scouting missions. Operating in congested and dark environment, its purpose is to place a microphone and a camera practically anywhere to collect critical life- saving intelligence of immediate threats ahead of a team. It enables reliable and rapid situational awareness for precise decision making, while maximizing the team’s safety. v. DJI Mavic Mini, quantity 4, cost $1,200: The DJI Mavic Mini is a lightweight, foldable drone designed for ease of use and portability, boasting a maximum flight time of 30 minutes and capable of capturing 2.7K video and 12MP photos with a stabilized 3-axis gimbal. vi. DJI Avata, quantity 5, cost $1,200: The DJI Avata 2 is a compact, first-person view (FPV) drone designed for immersive, agile flying and capturing ultra-wide 4K stabilized video, featuring built-in propeller guards for safety and a 1/1.7" CMOS sensor. Small, lightweight design allows for indoor and outdoor use.
vii. DJI Neo, quantity 1, cost $400:

6.4 Attachment 5 - Foster City Police Department Equipment List

59 4
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6 Purpose/Authorized Uses:

UAS/Drones may be utilized to enhance the Department’s mission of protecting lives and property when other means and resources are not available or are less effective. Uses may include but are not limited to: (a) search and rescue; (b) suspect apprehension; (c) crime scene documentation; (d) tactical operations; (e) scene security; (f) hazard monitoring, (g) identification and mitigation; (h) response to emergency calls; (i) crisis communications; (j) legally authorized surveillance.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use:

Any use of a UAS will be in strict accordance with constitutional and privacy rights and Federal Aviation Administration (FAA) regulations. The use of the UAS potentially involves privacy considerations. Absent a warrant or exigent circumstances, operators and observers shall adhere to FAA altitude regulations and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure). Operators and observers shall take reasonable precautions to avoid inadvertently recording or transmitting images of areas where there is a reasonable expectation of privacy. Reasonable precautions can include, for example, deactivating or turning imaging devices away from such areas or persons during UAS operations.

Training Required: Prior to piloting any UAS/Drone staff members must secure an FAA Remote Pilot License and complete all training required by our FAA certificate or authorization. For the ground vehicles agency-authored orientation course with annual refresher training.

Other Notes: The Foster City Police Department participates in the North Central Regional SWAT Team (NCR SWAT). This equipment is owned and operated by NCR SWAT through neighboring cities which could result in its deployment and/or use in the City.

6.4 Attachment 5 - Foster City Police Department Equipment List

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6 Equipment Name: Robots
Quantity Owned/Sought: 4 (not owned by FCPD) Lifespan: All robots and associated equipment, 8-10 years.

Equipment Capabilities: Robots are capable of being remotely navigated to provide scene information and intelligence in the form of video and still images transmitted to first responders.

Manufacturer Product Description: This equipment is not owned by the Foster City Police Department. Transcend Robotics (Qty: 2), iRobot packbot 510 (Qty:1), and Recon robotics recon scout (Qty: 1).

Purpose/Authorized Uses:

To enhance the safety of potentially dangerous situations by providing first responders with the ability to capture video and still images of hazardous areas prior to, or in lieu of, sending in personnel.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use:

The use of unmanned, remotely piloted, powered ground vehicles potentially involves privacy considerations. Absent a warrant or exigent circumstances, operators and observers shall adhere to all applicable privacy laws and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure).

Training Required: The North County Regional SWAT Team provides internal training for staff members prior to allowing them to pilot these vehicles.

Equipment Name: Armored Vehicles (Wheeled vehicles that have a breaching apparatus attached - CA Gov’t Code §7070(c)(3))
Quantity Owned/Sought: 1 (not owned by FCPD) Lifespan: 12-15 years depending on use Equipment Capabilities:

Capable of transporting personnel and equipment while providing them with armored protection from gunfire. Capable of breaching doors, gates, and other points of entry.

Manufacturer Product Description:

International Armor Group Sentinel, cost $0.00, quantity 1: The all new IAG Sentinel ARV is an armored rescue vehicle re-designed specifically for tactical response teams, with added interior space and overall functionality in the event of a rapid deployment. Standard vehicle armoring is available in NIJ III/CEN B6, .50 cal and NIJ IV/CEN B7 that is rated to withstand multiple impacts from armor piercing 7.62x51mm rifle ammunition. The armoring system on the Sentinel Armored Rescue Vehicle protects the entire cabin with blast protection underneath the vehicle. The engine bay and fuel tank are also armored to prevent the vehicle from being disabled from ballistic threats or shrapnel. High payload wheels and tire package features an integrated run-flat and bead lock system to prevent the tires from dismounting from the wheel, as well as enables the vehicle to continue operating in the event of tire punctures. The vehicle can be outfitted with a large variety of equipment such as hydraulic ram, gas insertion equipment, 360-degree surveillance system, thermal and night vision capability, LRAD, ATF approved storage and much more. The interior layout can be completely customized to suit the specific mission requirements/application and allows for loading of a standard medical stretcher in emergency rescue situations. The dual rear doors are designed to lock into place at both 45° and 90° while built-in steps provide access to the no-slip roof. The oversized rear step and platform ensure ease of entry and exit while also providing plenty of space for operators to utilize the outside of the vehicle for rapid deployment.

6.4 Attachment 5 - Foster City Police Department Equipment List

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6 Purpose/Authorized Uses: To provide for the safe transport, security, and rescue of agency personnel and citizens in high-risk incidents. Any use of the armored rescue vehicle will be for official law enforcement purposes. Examples of uses include breaching doors, gates, and other points of entry.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency. Purchased on a grant
Legal/Procedural Rules Governing Use: Use shall be in accordance with California State law regarding the operation of motor vehicles. Breaching vehicles can be deployed any time tactical operators determine that it is necessary to complete a lawful breaching. For a breaching to be lawful, it will generally need to be supported by a search or arrest warrant, or exigent circumstances.

Training Required: SMPD-authored orientation course; annual refresher. The North County Regional SWAT Team provides internal training for staff members prior to allowing them to drive this vehicle.

Equipment Name: Command and control vehicles
Quantity Owned/Sought: 2 (not owned by FCPD) Lifespan: 12-15 years depending on use Equipment Capabilities: The Mobile Command Vehicle (MCV) provides mobile, remote access to radio, internet, planning and other resources to assist with management of major incidents and planned operations.

Manufacturer Product Description:
i. Braun Northwest mobile command vehicle, cost $0.00, quantity 1: The MCV is built on a Ford F550 chassis and can be utilized for SWAT/CNT and other critical incidents, pre-planned large events, searching for missing persons, natural disasters, and community events. Effective, reliable communication is critical in an emergency or crisis situation. To meet this important need, Braun Northwest custom-builds are durable, functional command/communication units. ii. Ford motor vehicle F53 motorhome command post, cost $100,000.00, quantity 1: The F53 command vehicle can be utilized for SWAT/CNT and other critical incidents, preplanned large events, searching for missing persons, natural disasters, and community events. This vehicle can also be used as a mobile office that provides shelter, access to the Police Department computer systems, and restroom facilities on extended events.

Purpose/Authorized Uses: To serve as a mobile command post during any incident that requires command and control beyond a static dispatch center. Any use of the MCV vehicle will be for official law enforcement purposes, pre-planned events, or training exercises.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency. Purchased on a grant.

Legal/Procedural Rules Governing Use: Use shall be in accordance with California State law regarding the operation of motor vehicles.

Training Required: SMPD: Users must complete an authored orientation course and an annual refresher.

Other Notes: The Foster City Police Department participates in the North Central Regional SWAT Team (NCR SWAT). This equipment is owned and operated by NCR SWAT through the San Mateo Police Department, which could result in its deployment and/or use in the City.

6.4 Attachment 5 - Foster City Police Department Equipment List

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6 Equipment Name: Battering rams, slugs, and breaching apparatus that are explosive in nature - CA Gov’t Code §7070(c)(7). Explosive Breaching tools
Quantity Owned/Sought: Unknown (Not owned by
FCPD)
Lifespan: Unknown
Equipment Capabilities: Capable of breaching doors, gates, windows, and other points of entry.

Tools that are used to conduct a positive breach using kinetic energy.

Manufacturer Product Description:
i. DETONATING CORD, cost: $1 per foot, quantity: 0 feet. The detonating cord is a thin, flexible plastic tube usually filled with pentaerythritol tetranitrate (PETN, pentrite). With the PETN exploding at a rate of approximately 6400 m/s, any common length of detonation cord appears to explode instantaneously. It is a high-speed fuse which explodes, rather than burns, and is suitable for detonating high explosives.
ii. BLASTING CAP, cost: $12, quantity: 0. A blasting cap is a small sensitive primary explosive device generally used to detonate a larger, more powerful, and less sensitive secondary explosive such as TNT, dynamite, or plastic explosive. Blasting caps come in a variety of types, including non-electric caps, electric caps, and fuse caps. iii. REMINGTON 870 BREACHING SHOTGUN, cost: $500, quantity: 5. This weapon allows for breachers to safely utilize shotgun breaching rounds to destroy deadbolts, locks, and hinges.

The stand-off that is attached to the end of the barrel allows for positive placement of the gun into the correct position and vents gases to prevent overpressure. This weapon can also defeat windows and sliding glass doors with a flash bang round. A less lethal 2.4-inch 12-gauge shotgun round firing a ballistic fiber bag filled with 40 grams of lead shot at a velocity of 270- 290 feet per second (FPS).
iv. DEFENSE TECHNOLOGY FRANGILBE BREACHING ROUND, cost: $5 per round, quantity: 50. The round is fired from a breaching shotgun and is used to destroy deadbolts, locks and hinges.

Purpose/Authorized Uses: To safely create a positive breach and enter a structure. Kinetic and shotgun breaching may only occur after authorization by the Incident Commander or SWAT Commander in the field, and during training exercises.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use: Breaching apparatus that are explosive in nature can be deployed any time tactical operators determine that it is necessary to complete a lawful breaching, and non-explosive breaching methods are not tactically practicable. For a breaching to be lawful, it will generally need to be supported by a search or arrest warrant, or exigent circumstances.

Training Required: The North County Regional SWAT Team provides internal training for staff members prior to allowing them to use explosive breaching apparatus.

6.4 Attachment 5 - Foster City Police Department Equipment List

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5 8
6 Equipment Name: Long Range Acoustic Device (LRAD) - CA Gov’t Code §7070(c)(13) Quantity Owned/Sought: 1 (Not owned by FCPD) Lifespan: Unknown Equipment Capabilities: LRAD systems are a type of Acoustic Hailing Device (AHD) used to send messages over long distances. LRAD systems produce much higher sound levels (volume) than normal loudspeakers or megaphones. Over shorter distances, LRAD signals are loud enough to cause pain in the ears of people in their path.

Manufacturer Product Description: Long Range Acoustical Device (LRAD), cost $0.00 (purchased on a grant), quantity 1: is a high intensity directional acoustical array for long range, crystal clear hailing, notification, and an unmistakable warning tone. The LRAD is primarily used as a communication device.

Purpose/Authorized Uses: To be used to issue dispersal orders during crowd and riot control situations or to address the public in the event of civil emergencies, natural disasters, evacuations, and police incidents (e.g., missing persons, perimeters for wanted suspects/ K9 deployments, etc.). The LRAD may also be used to issue a warning tone. The LRAD shall only be used by officers trained in its deployment and used in a manner consistent with department policy and training.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use: LRADs can only be deployed in accordance with all applicable State, Federal and Local laws governing police use of force, crowd control, etc.

Training Required: The North County Regional SWAT Team provides internal training for staff members prior to allowing them to use any of these items.

6.4 Attachment 5 - Foster City Police Department Equipment List

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6 Equipment Name: Chemical Agents, CTS Launching CUP
Quantity Owned/Sought: Unknown (not owned by
FCPD)
Lifespan: 5 years from date of manufacture.

Equipment Capabilities: Canisters that contain OC and CS chemical agents that are released when deployed. Has the capability to launch an OC or CS cannister from a 12 gauge less lethal shotgun.

Manufacturer Product Description:
i. CTS 7290M, cost $35.00 each, quantity 20: The CTS 7290M Mini Flash-Bang is the newest generation in the evolution of the Flash-Bang. Our Model 7290M Flash-Bang exhibits all the same attributes of its larger counterpart but in a smaller and lighter package. Weighing in at just 15 ounces the new 7290M is approximately 30% lighter than the 7290 but still has the same 175db output of the 7290 and produces 6-8 million candelas of light. The patented design of the 7290M, incorporates a porting system that eliminates movement of the body at detonation even if the top or bottom of the device should be in contact with a hard surface. In addition, internal adjustments have greatly reduced smoke output. ii. CTS 5230, cost $30.00 each, quantity 20: 5230 JL large diameter burning grenade designed to discharge a high volume of smoke and chemical agent rapidly through multiple emission ports.

The smoke composition is formulated to burn rapidly decreasing the possibility that the grenade can be picked up and thrown back at crowd management officers. iii. CTS 6330 and 6340, cost $25.00 each, quantity 12: 6330 / 6340 A unique grenade delivering an invisible vapor and rendering an intense respiratory effect. Provides best results when used indoors and requires no personal decontamination.
iv. CTS 5230B, cost $35.00 each, quantity 10: 5230B Pyrotechnic grenade designed for indoor use delivering a maximum amount of irritant smoke throughout multiple rooms with minimal risk of fire.
v.CTS 8210, cost $25.00 each, quantity 10: 8210 Small diameter pyrotechnic irritant smoke grenade for outdoor use to disperse crowds. Emits smoke for up to 30 seconds and is small enough to carry in a pocket. Can be hand thrown or launched. vi.COMBINED SYSTEMS LC5 40MM LAUNCHING CUP, cost: $302, quantity: 2. The LC5 Launching Cups are designed for the 5200 series grenades. The cups can be attached to virtually any 12gauge shotgun and the munition launched with our model 2600 launching cartridge.

Purpose/Authorized Uses:
a. To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use may include, but are not limited to: (a) self-destructive, dangerous, and/or combative individuals; (b) barricaded suspects; (c) riot/crowd control and civil unrest incidents; and (d) training exercises.

Fiscal Impacts: Unknown.

Legal/Procedural Rules Governing Use:

Individual agency policies permitting the use of chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.

Training Required: The North County Regional SWAT Team provides internal training for staff members prior to allowing them to use any of these items.

6.4 Attachment 5 - Foster City Police Department Equipment List

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6 Other Notes: The Foster City Police Department participates in the North Central Regional SWAT Team (NCR SWAT). This equipment is owned and operated by NCR SWAT through the San Mateo Police Department, which could result in its deployment and/or use in the City.

Equipment Name: AR-15 Style Semiautomatic Rifle and Ammunition - CA Gov’t Code §7070(c)(10) Quantity Owned/Sought: 60 (not owned by FCPD) Lifespan: Approximately 15 years Equipment Capabilities: The AR15 style firearm can fire a .223, .556, .308 or .300 caliber projectile accurately at over 100 yards.

Manufacturer Product Description: The AR15 style firearm features M-LOK attachment technology with the Daniel Defense MFR 15.0 rail. Built around a Cold Hammer Forged, 16 inch barrel, the V7 has a DD improved Flash Suppressor to reduce flash signature. The mid-length gas system provides smooth and reliable cycling under any condition and reduces both perceived recoil and wear on moving parts.

With the M-LOK attachment points that run along 7 positions and an uninterrupted 1913 Picatinny rail on top, the V7 has plenty of room for the sights, optics, and accessories the user may require . The independently ambi GRIP-N-RIP Charging Handle accommodates left- and right-handed shooters. This rifle also comes with the ergonomic Daniel Defense Buttstock and Pistol Grip.

Purpose/Authorized Uses:

Officers may deploy the patrol rifle in any circumstance where the officer can articulate a reasonable expectation that the rifle may be needed. Examples of some general guidelines for deploying the patrol rifle may include but are not limited to: (a) situations where the officer reasonably anticipates an armed encounter; (b) when an officer is faced with a situation that may require accurate and effective fire at long range; (c) situations where an officer reasonably expects the need to meet or exceed a suspect's firepower; (d) when an officer reasonably believes that there may be a need to fire on a barricaded person or a person with a hostage; (e) when an officer reasonably believes that a suspect may be wearing body armor; and (f) when authorized or requested by a supervisor.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use: All applicable State, Federal and Local laws governing police use of force. Various Foster City Police Department Policies on Use of Force and Firearms.

Training Required: In addition to patrol rifle and standard SWAT Operator training, SWAT Operators must successfully complete a CA POST certified SWAT course as well as regular SWAT training and qualifications as required by law and policy.

Other Notes:

6.4 Attachment 5 - Foster City Police Department Equipment List

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9 DATE: May 4, 2026

TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager

FROM: Nori Jabba, Housing and Sustainability Manager
Sofia Mangalam, Community Development Director
DEPARTMENT: Community Development
SUBJECT: AGREEMENT WITH THE HOUSING ENDOWMENT AND

REGIONAL TRUST (HEART) OF SAN MATEO COUNTY FOR

ADMINISTRATION OF THE AFFORDABLE ACCESSORY

DWELLING UNIT (ADU) LOAN PROGRAM FOR

IMPLEMENTATION OF HOUSING ELEMENT PROGRAM

RECOMMENDATION
It is recommended that the City Council adopt the attached Resolution (Attachment 1) authorizing the Mayor to execute an Agreement with HEART of San Mateo County (“HEART”) to administer the Affordable ADU Loan Program in an amount not to exceed $1,160,510 for the implementation of Housing Element program H-D-4-b ADU/JADU Financial Incentive Program; approve an appropriation of $1,160,510 from the Commercial Linkage Fee Fund (Fund 137) to 137-0847-419-42-51, and find the Agreement and Program exempt from review under the California Environmental Quality Act (CEQA) because (i) the Affordable ADU Loan Program was analyzed as part of the Environment Impact Report (EIR) for the 6th Cycle Housing Element (2023-2031) and Safety Element Update (SCH 2022010509); (ii) certain ADU approvals are categorically exempt pursuant to Public Resources Code § 21080(b)(1) and CEQA Guidelines § 15268; and (iii) certain ADUs that are not approved ministerially are exempt from CEQA pursuant to CEQA Guidelines section 15301(Class 1-Existing Facilities).

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9 EXECUTIVE SUMMARY
The Housing Element is an integral part of the Foster City General Plan, which identifies the City’s housing needs, states the City’s goals, and objectives regarding housing production, rehabilitation, preservation, and conservation to meet those needs, and defines the policies and programs necessary to achieve them. The Housing Element Program relevant to this staff report is H-D-4-b, ADU/JADU Financial Incentive Program (HE-94 of adopted 2023-31 Housing Element):

Provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct an ADU/JADU that is restricted for lower-income households for 10-15 years, with an additional incentive amount for units subject to a preference for identified categories of special needs people who would benefit from coordinated onsite services, including but not limited to people with developmental disabilities.

The program calls for eight (8) income-restricted ADU units to be financed by 2031.

Government Code Section 65400 requires each jurisdiction to prepare an annual progress report (APR) on the jurisdiction’s status and progress in implementing its housing element. Each jurisdiction’s APR must be submitted to HCD and the Governor’s Office of Land Use and Climate Innovation (LCI) (previously known as OPR) by April 1 of each year (covering the previous calendar year). HCD also created the Housing Accountability Unit to enforce Housing Elements and ensure that jurisdictions follow through with their Housing Element commitments by implementing their goals, policies, and programs.

In order to stay on track for the timely implementation of the program mentioned above, staff issued a Request for Proposal (RFP) for vendors and, after reviewing the responses, recommends that the City Council adopt the attached Resolution authorizing the Mayor to execute an agreement with HEART of San Mateo, in an amount not to exceed $1,160,510.

BACKGROUND/ANALYSIS
Chapter 2, Housing Needs Assessment of the Housing Element, discusses various housing need issues, contributing factors, and meaningful actions to be taken by the City, including targets and a timeline for the actions (Table 1).

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9 Table 1. Housing Needs Assessment (Excerpt)
Housing Need Issue Contributing Factors Meaningful Actions Targets and Timelines
Housing Need Issue
Contributing Factors
Meaningful Actions
Targets and Timelines
About 32.6% of renters
and 32.9% of owners are
cost burdened or
severely cost burdened.

Growth in rents and sales
prices have outpaced
income growth.

Lack of adequate supply of
housing has increased
demand and prices.

Persons with disabilities
face additional housing
challenges
Difficulties are compounded
with low income, racial
discrimination, need for
supportive services, and/or
other factors.

Persons with disabilities
often need extremely low-
income housing.

H-D-4-b: ADU/JADU
Financial Incentive
Program
Implement program
by December 2024
Provide 8 income-
restricted ADU units
by 2031
The primary goal of the City’s Affordable ADU Loan Program is to create a unique, substantial financial incentive for Foster City Homeowners to build or install ADUs that are rent-restricted for low-income and special needs households for a period of 10 years. The program includes funding for eight (8) loans to Foster City homeowners who agree to rent their ADUs at below market rates to eligible low-income tenants for a period of 10 years and an additional incentive to those who agree to rent their ADUs with a preference for those with special needs. Homeowners who income-qualify can elect to live in the ADU unit and rent out the main home.

On July 9, 2024, the HCD issued a Notice of Funding Availability (NOFA) for the 2024 Local Housing Trust Fund (LHTF) Program for $53 million in matching grants to established LHTFs. LHTF Program requirements included that the funds be used to provide construction loans and/or permanent financing loans to pay for the construction or rehabilitation of affordable rental housing projects, emergency shelters, transitional housing, or affordable homebuyer/homeowner projects as well as to construct, convert, rehabilitate, and/or repair Accessory Dwelling Units (ADUs) or Junior ADUs (JADUs).

Subsequently, staff prepared for the application and loan programs outline for the implementation of three (3) Housing Element programs for HCD NOFA, including:
H-A-5-e: NOFAs for Affordable Housing.
H-D-4-b: ADU/JADU Financial Incentive Program.
H-B-2-a: Lower-Income Homeowner Rehabilitation Loans.

On September 3, 2024, the City Council authorized the application for the HCD NOFA and approved the Foster City LHTF specific underwriting guidelines for the three (3) loan

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9 programs noted above, including transfer of funds from Commercial Linkage Fee Fund (Fund 137) to LHTF (Fund 145) as matching funds, contingent upon the City being awarded the HCD LHTF funding; and in the event that the grant is not awarded, approve the use of funds from Fund 137 and authorize the City Manager or his designee to make amendments to loan programs as needed, including loan amounts, and others for the implementation of the three (3) Housing Element programs. However, the City was not granted the NOFA.

Similar ADU Affordable ADU loan programs are included in the Housing Elements of several jurisdictions throughout San Mateo County. In response to this, 21 Elements added development of an affordable ADU loan program to their work plan for 2025 and created an ADU Working Group to explore development of the program.

The ADU Working Group spent several months developing the program. In December 2025, 21 Elements determined that the program would require program administration costs (estimated at $180,000) to be split evenly among partnering jurisdictions (three (3) or four (4) jurisdictions), excluding loan administration fees. However, a few features of the 21 Elements program were not in alignment with the City’s requirements as stated in its Housing Element, Program H-D-4-b.

Staff then began researching potential opportunities for third parties to help administer the ADU loan program and issued an RFP to identify potential entities to administer the program that better meets the City’s specific program requirements.

Request for Proposals

On December 23, 2025, staff issued an RFP seeking proposals from qualified firms interested in administering and delivering the City’s Below Market Rate (BMR) Accessory Dwelling Unit (ADU) Loan Program (see link).

To provide flexibility for respondents, and due to interest from ADU builders and manufacturers in potentially partnering with the City for the program, respondents were asked to select one of the following options:
Loan Administration Only: Contractor will provide and manage financing only – homeowners find their own ADU general contractor/provider. Loan Administration and ADU Construction Services: Contractor will serve as both the general contractor for custom-built ADUs and provide and manager of financing of the ADUs for the homeowners. Contractor may partner with general contractor, and/or financing entity to form a team for this RFP. Loan Administration and ADU Sales and Installation: Contractor will serve as the seller for pre-manufactured or pre-fabricated ADUs, manager of installation, and manager of the financing of the ADUs for the homeowners. Contractor may partner with general contractor, and/or financing entity to form a team for this RFP.

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9 Draft guidelines were provided in the RFP and included all requirements as stated in the Housing Element, including an additional incentive for renting to those with special needs.

To ensure that the program offered significant incentives that would be appealing to homeowners who might not otherwise consider renting their ADU at below market rates, the program guidelines included deferred loan payments during the first 10 years of the loan term, and no interest loans, with the ability to rent the ADU at market rate after the first 10 years.

The RFP was posted on the City’s website, and an email soliciting proposals was sent to multiple recipients, including the Housing Endowment and Regional Trust of San Mateo County (”HEART”), Meriwest Credit Union, Habitat for Humanity Greater San Francisco (HGSF), Housing Leadership Council of San Mateo County, and several Bay Area ADU builders/developers and ADU sales and installation companies.

Responses to RFP
Staff received three (3) responses to the RFP: HEART for loan administration only; Habitat for Humanity Greater San Francisco (”HGSF”), for loan administration and construction services: and the Mortgage Office, for loan administration services only. No responses were received from ADU builders or ADU sales and installation companies. The proposals were evaluated using 11 criteria, including completeness of proposal, fees, experience, ability to meet program objectives, and other factors. The Mortgage Office’s proposal was not complete for several required items included in the RFP.

The proposal from HGSF included three (3) substantial changes to the program guidelines, including
an income restriction requiring the homeowners loan applicants to have household incomes of less than 120% of area median income. This provision is a requirement for HGSF‘s loan programs;
decreased loan funding from $1,100,000 to $1,000,000 with all eight (8) loans at $125,000 and removal of loans for $150,000 for homeowners who agree to rent to those with special needs; and,
a requirement for the City to provide gap funding from another source for the homeowner so that 100% of the ADU project is financed.

Staff determined that the proposal from HEART met all program requirements as described in Program H-D-4-b of the 2023-2031 Housing Element and as specified in the RFP.

The complete list of criteria is included in the RFP, and a scoring sheet is included as Attachment 4. Table 2 shows the rankings of each proposal and associated program costs.

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9 Table 2. RFP Response Summaries
Response
Ranking
Respondent Loan Fees Contractor Fees Total Program
Cost
1 HEART (Note 1) $1,100,000 $60,510 $1,160,510
2 HGSF (Note 2) $1,000,000 $100,000 $1,100,000
3 The Mortgage Office (Note 3) $1,100,000 $106,200 $1,206,200 Notes:

1.HEART: assumes four (4) loans for $125,000 and four (4) loans at $150,000 for special needs households. Proposal includes loan administration, loan servicing, and income and rent compliance for ADU occupants.

2.HGSF: assumes all eight (8) loans are $125,000; no additional funding for special needs households. Proposal requires homeowner to be income-restricted to <120% of AMI and requires the City of Foster City to fund the balance of the ADU cost from other sources.

3.The Mortgage Office: assumes four (4) loans for $125,000 and four (4) loans at $150,000 for special needs households. The proposal stated that the company provides a technology solution to support the ADU Loan Program as a loan management platform to be used by the selected contractor to originate, administer, and service the loans issued to homeowners or as the direct loan management platform to be used by the City of Foster City should the City elect to administer the loan portfolio internally. Costs are $21,240 per year, or $106,200 for 2026-2031.

Selected Vendor
Staff recommends the proposal from HEART due to its competitive fees for program administration and offering the lowest total cost for program implementation, HEART’s experience as a housing loan administrator, expertise in the process of ADU development in San Mateo County through HEART‘s ADU Center, and HEART’s ability to meet all of the City’s program objectives.

HEART is a 501(c)(3) organization founded in 2003 as a Joint Powers Authority and public/private partnership among the cities in San Mateo County, the County, and the business, nonprofit, education, and labor communities to create more affordable housing in San Mateo County. To date, HEART has invested over $27 million to fund 1,632 affordable homes. HEART offers four (4) programs: first-time homebuyer loans, developer loans, an ADU center, and housing consulting services for San Mateo County jurisdictions. The proposed Affordable ADU Loan Program would be administered by HEART through its ADU Center, which offers pre-reviewed ADU designs through its GLADUR program. The City of Foster City has been a contributing member jurisdiction of HEART since its formation and uses the GLADUR designs for the pre-approved ADU program (HE Program H-D-4-c, Preapproved ADU/JADU Designs and expedited permitting).

HEART reviewed the City’s draft program guidelines and provided input with requests for minor revisions. The attached Agreement (see Exhibit 1-A of Attachment 2) includes

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9 Program Guidelines in the Scope of Work (See Attachment 2, Exhibit 1- A). Table 3 shows the vendor costs to manage the loan program.

Table 3. Proposed Vendor Fees for Eight (8) Loans
Vendor Fees (HEART) Total for
8 Loans
Loan Fund: includes Loans for low-income ADUs and loans for special needs ADUs and assumes four (4) loans of each type. However, there is flexibility in the number of each type of loan as long as there are eight (8) loans in total and the total amount funded does not exceed $1,100,000. $1,100,000
Vendor Administration $51,070
Loan Servicing Fees ($440 per loan for setup and up to $1,800 for any non-compliant loans)
$2,240
Affordable Monitoring Services ($500 per initial certification x 8 loans and $200 per recertification up to 8 loans per year for the remaining two years of the contract)
$7,200
Total Agreement $1,160,510

Table 4 provides an overview of the vendor agreement and program provisions.

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9 Table 4: Summary of the Affordable ADU Loan Program
Program
Provision
Summary
Housing Element
Program
H-D-4-b, ADU/JADU Financial Incentive Program
Housing Element
Goal
Eight (8) income-restricted ADUs financed by 2031
Vendor
Agreement
Name: HEART of San Mateo County
Contract Maximum: $1,160,510
Term of Agreement: July 1, 2026, to December 1, 2031, with a three (3)-year renewal option for continued loan administration and ADU compliance
Scope of work: Develop program documents and marketing materials; conduct program outreach in conjunction with the City of Foster City; perform loan origination, underwriting, and servicing; establish and manage re-use account program funds;
provide compliance services for ADU occupants; provide required reporting to City.

Loan Terms $125,000 for the standard loan option or $150,000 for the special needs loan option. Loans are for a term of 20 years with 0% interest, no application fee, and no down payment, and payments deferred for the first 10 years. Payments would then be monthly for ten (10) years.

Qualifying
Repayment
Events
Examples include missed loan payments; sale of the house or ADU, and other provisions as outlined in the Program Guidelines.

Affordability
Restriction
ADUs are rent and income-restricted for lower income households earning <80% of Area Median Income for a period of 10 years. After the 10-year restriction period, the ADU units can be rented at market rates.

Program Outreach The City and HEART will work together to promote the program through both organizations’ websites, an ad in the Islander, on social media platforms, the City’s electronic marquee and newsletter, through listserv updates, and posting of flyers in public locations at City Hall and other locations. In addition, flyers will be provided to HOAs.

Homeowner/
Applicant
Requirements
The homeowner must live in the primary unit or in the ADU (if income-eligible), during the entirety of the loan term. The homeowner must agree to rent the unit only to a qualified lower income household at below market rates during the affordability restriction period.
Homeowners who select the Special Needs Loan option agree to rent the unit with a preference for low-income households with special needs during affordability restriction period. Special needs populations are defined in the program guidelines.
The homeowner must enter into a lease agreement with an ADU tenant for a period of at least 12 months for the initial term, and the lease must include an affordability addendum that explains the income requirements and initial and annual certification requirements.

6.5 6.5 Staff Report

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9 Staff recommends that the proposed Agreement with HEART be for three (3) years: July 1, 2026, to June 30, 2029, with a renewal option for an additional three-year period. Prior to the expiration of the Agreement, staff will re-evaluate the need for funding additional loans and vendor fees, performance, and community needs, and propose any necessary adjustments for the potential renewal of the Agreement to ensure that all issued loans are properly managed throughout the terms of the loans and that ADU rents and renters remain in compliance with program requirements for the restricted periods.

Next Steps
If approved by the City Council, the next steps include executing the Agreement, developing loan documents for the Affordable ADU Loan Program, and preparing promotional materials. Applications will be made available to eligible applicants within approximately three (3) months to allow time for HEART and the City to prepare program documents and marketing materials. Outreach will be a joint effort by the City and HEART.

California Environmental Quality Act
The Affordable ADU Loan Program will enable a homeowner to finance their ADU project to build or install a new ADU. This program was analyzed as part of the Environment Impact Report (EIR)) for the 6th Cycle Housing Element (2023-2031) and Safety Element Update, adopted environmental findings, and adopted a Standard Conditions of Approval and Mitigation Monitoring and Reporting Program (SCH 2022010509). No further environmental review for the program is necessary because no substantial changes are proposed and no new information is known that would warrant a subsequent EIR pursuant to CEQA Guidelines section 15162, or an addendum pursuant to CEQA Guidelines section 15164. This program would facilitate the construction of ADUs. Certain ADU approvals would be categorically exempt pursuant to Public Resources Code § 21080(b)(1) and CEQA Guidelines § 15268 because the projects would be approved ministerially. Ministerial projects are exempt from the requirements of CEQA. Additionally, certain ADUs that are not approved ministerially would be exempt from CEQA pursuant to CEQA Guidelines section 15301(Class 1-Existing Facilities) as an addition to an existing structure and 15303 (Class 3-New Construction or Conversion of Small Structures) as construction of new, small facilities or structures.

FISCAL IMPACT
Staff is requesting a total appropriation of $1,160,510 in Fiscal Year 2025-2026 to account number 137-0847-419-42-51 to fully fund the Affordable ADU Loan Program.

Currently, there is $10,174,993.56 million available in the fund balance, which is sufficient to absorb this supplemental appropriation.

6.5 6.5 Staff Report

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9 CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA Smart Planning, Development, and the Local Economy
ATTACHMENTS:

Attachment 1 – Resolution
Attachment 2 – Exhibit 1-A - Agreement with HEART of San Mateo County Attachment 3 – Proposal from HEART of San Mateo County
Attachment 4 – RFP Response Scoring Sheet
Attachment 5 – Additional RFP Responses

6.5 6.5 Staff Report

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1 RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY

AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH HEART OF SAN MATEO COUNTY (“HEART”) TO ADMINISTER THE AFFORDABLE ADU LOAN PROGRAM IN AN AMOUNT NOT TO EXCEED $1,160,510 FOR THE
IMPLEMENTATION OF HOUSING ELEMENT PROGRAM H-D-4-B ADU/JADU FINANCIAL INCENTIVE PROGRAM; APPROVE AN APPROPRIATION OF $1,160,510 FROM THE COMMERCIAL LINKAGE FEE FUND (FUND 137) TO 137-0847-419-42-51,

AND FIND THE AGREEMENT AND PROGRAM EXEMPT FROM REVIEW UNDER THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) BECAUSE (I) THE

AFFORDABLE ADU LOAN PROGRAM WAS ANALYZED AS PART OF THE ENVIRONMENT IMPACT REPORT (EIR) FOR THE 6TH CYCLE HOUSING ELEMENT (2023-2031) AND SAFETY ELEMENT UPDATE (SCH 2022010509); (II) CERTAIN ADU

APPROVALS ARE CATEGORICALLY EXEMPT PURSUANT TO PUBLIC RESOURCES CODE § 21080(B)(1) AND CEQA GUIDELINES § 15268; AND (III) CERTAIN ADUS

THAT ARE NOT APPROVED MINISTERIALLY ARE EXEMPT FROM CEQA PURSUANT TO CEQA GUIDELINES SECTION 15301(CLASS 1-EXISTING

FACILITIES)

CITY OF FOSTER CITY
WHEREAS, the Housing Element is an integral part of the Foster City General Plan that identifies the City’s housing needs, states the City’s goals and objectives regarding housing production, rehabilitation, preservation, and conservation to meet those needs, and defines the policies and programs; and WHEREAS, Government Code Section 65400 requires each jurisdiction to prepare an annual progress report (APR), due to the California Department of Housing Community Development (HCD) by April 1, on the jurisdiction’s status and progress in implementing its housing element; and
WHEREAS, the Housing Element includes Program H-D-4-b, ADU/JADU Financial Incentive Program, to provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct an ADU/JADU that is restricted for lower income households for 10-15 years, with an additional incentive amount for units subject to a preference for identified categories of special need people who would benefit from coordinated onsite services, including but not limited to people with disabilities, and a quantified objective to finance eight (8) ADUs by 2031; and WHEREAS, the Program has been named as the Affordable ADU Loan Program (“Program”); and
WHEREAS, the implementation of the program allows for collaboration with third parties; and
WHEREAS, on December 23, 2025 staff issued a request for proposals for an Affordable ADU Program, posted it on the City’s website, and an email soliciting proposals

6.5 Attachment 1 - Resolution

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1 was sent to multiple recipients, including the Housing Endowment and Regional Trust (HEART) of San Mateo County (”HEART”), Meriwest Credit Union, Habitat for Humanity Greater San Francisco (HGSF), Housing Leadership Council of San Mateo County, and several Bay Area ADU builders/developers and ADU sales and installation companies; and
WHEREAS, the Program includes three (3) incentives, including a) the opportunity for Foster City homeowners to obtain interest-free 20-year loans of $125,000 to build or purchase and install an Accessory Dwelling Unit (ADU) with deferred payments for 10 years, provided the homeowner agrees to a 10-year deed restriction on the ADU requiring the ADU to be rented at low income rates to lower income occupants earning less than 80% of Area Median Income during the deed restriction period; and b) a higher loan amount of $150,000 for homeowners who rent their ADUs with a preference for those with special needs during the deed restricted period, and other provisions as set forth in the Program and Underwriting Guidelines attached hereto; and c) expedited permitting for the ADUs; and the Program includes additional requirements as set forth in the Program Guidelines; and
WHEREAS, staff received three responses, from HEART, Habitat For Humanity Greater San Francisco, and The Mortgage Office; and
WHEREAS, staff reviewed the proposals and selected HEART due to the proposed cost of program implementation, experience managing similar loan programs; and submittal of a proposal that meets all required program objectives; and WHEREAS, staff is proposing a three (3)-year agreement with HEART, with a maximum amount of $1,160,510, including loan funds of $1,100,000 for eight (8) loans and program administration fees of $60,510, and a renewal option for an additional three (3) years for program administration; and
WHEREAS, there is approximately $10,174,993.56 million available in the fund balance for Fund 137, which is sufficient to absorb this supplemental appropriation.

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

1. Authorize the Mayor to execute an Agreement with Housing Endowment and Regional Trust of San Mateo County for a three (3) year term in an amount not to exceed $1,160,510 for the Affordable ADU Loan Program to issue and manage eight (8) loans for eligible Foster City homeowners to build or purchase and install below market rate ADUs with 10-year deed restrictions that require the homeowner to rent the ADU at low income rates to eligible lower income households earning less than 80% of Area Median Income, in the form attached hereto with minor amendments that may be approved by the City Attorney.

2. Approve the appropriation of $1,160,510 from Fund 137 to account number 137-0847-419-42-51.

3.The Council finds the Agreement exempt from the CEQA as the Affordable ADU Loan Program was analyzed as part of the Environment Impact Report

6.5 Attachment 1 - Resolution

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1 (EIR) for the 6th Cycle Housing Element (2023-2031) and Safety Element Update, adopted environmental findings, and adopted a Standard Conditions of Approval and Mitigation Monitoring and Reporting Program (SCH 2022010509), and no further environmental review for the program is necessary because no substantial changes are proposed and no new information is known that would warrant a subsequent EIR pursuant to CEQA Guidelines section 15162, or an addendum pursuant to CEQA Guidelines section 15164; and, this program would facilitate the construction of ADUs. Certain ADU approvals would be categorically exempt pursuant to Public Resources Code § 21080(b)(1) and CEQA Guidelines § 15268 because the projects would be approved ministerially. Ministerial projects are exempt from the requirements of CEQA. Additionally, certain ADUs that are not approved ministerially would be exempt from CEQA pursuant to CEQA Guidelines section 15301(Class 1-Existing Facilities) as an addition to an existing structure and 15303 (Class 3-New Construction or Conversion of Small Structures) as construction of new, small facilities or structures.

PASSED AND ADOPTED as a Resolution by 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

6.5 Attachment 1 - Resolution

79 PROFESSIONAL SERVICES AGREEMENT
FOR

CONTRACTOR SERVICES
FOR

CITY OF FOSTER CITY AFFORDABLE ADU PROGRAM
This Agreement is made and entered into as of the _____ day of ____________, 2026 by and between the City of Foster City hereinafter called "CITY" and THE HOUSING ENDOWMENT AND REGIONAL TRUST (HEART) OF SAN MATEO COUNTY, hereinafter called "CONTRACTOR".

RECITALS
This Agreement is entered into with reference to the following facts and circumstances:

WHEREAS, CITY desires to engage CONTRACTOR to provide professional services in the CITY;
WHEREAS, CONTRACTOR is qualified to provide such services to the CITY and; NOW, THEREFORE, in consideration of the mutual promises, covenants, terms and conditions hereinafter contained, the parties hereby agree as follows:

TERMS AND CONDITIONS

1. Services. The services to be performed by CONTRACTOR under this Agreement shall include those services set forth in Exhibit A, which is, by this reference, incorporated herein and made a part hereof as though it were fully set forth herein.

Performance of the work specified in said Exhibit A is hereby made an obligation of CONTRACTOR under this Agreement, subject to any changes that may be made subsequently hereto upon the mutual written agreement of the said parties.

Where in conflict, the terms of this Agreement supersede and prevail over any terms set forth in Exhibit A.

2. Term; Termination. (a) The term of this Agreement shall commence July 1, 2026 and shall expire on June 30, 2029, with an option to renew the contractor for one (1) additional three-(3)-year term to expire at the City’s sole discretion. (b) Notwithstanding the provisions of (a) above, CITY may with or without cause, direct CONTRACTOR to suspend, delay or interrupt Services, in whole or in part without cause

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

80 City of Foster City Affordable ADU Loan Program Agreement 1 4
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1 of time as CITY may determine in its sole discretion. (c) CITY may terminate performance of the Services under this Agreement in whole, or from time to time in part, for default, should CONTRACTOR commit a material breach of this Agreement, or part thereof, and not cure such breach within ten (10) calendar days of the date of CITY’s written notice to CONTRACTOR demanding such cure, in which case CONTRACTOR shall be liable to CITY for all loss, cost, expense, damage and liability resulting from such breach and termination. (d) CITY may terminate performance of the Services under this Agreement in whole, or from time to time in part, for convenience, whenever CITY determines that such termination is in CITY’s best interests, in which case CONTRACTOR shall be entitled to recover its costs expended up to the termination date plus reasonable profit thereon to the termination date as this Agreement would otherwise provide, but may recover no other cost, damage or expense. CONTRACTOR shall continue its work throughout the course of any dispute, and CONTRACTOR’s failure to continue work during a dispute shall be a material breach of this Agreement.

Should City elect to exercise its option to renew the Agreement for a second three-year term, CONTRACTOR will perform the Services with respect to an additional eight projects during the second three-year period. CONTRACTOR’s compensation during the second three-year period shall be the same as set forth below in Section 3 below, subject only to an adjustment for inflation (or deflation, if applicable) based on changes in the consumer price index for the San Francisco-Oakland-Hayward region during the initial three-year term.

3. Compensation; Expenses; Payment. CITY shall compensate CONTRACTOR for all services performed by CONTRACTOR hereunder within 30 days of receipt of an invoice in an amount as set forth in Exhibit “B” hereof, attached hereto, for which services hereunder shall be diligently performed as set forth in Exhibit “A” hereof, attached hereto and by this reference incorporated herein.

Notwithstanding the foregoing, the combined total of compensation and reimbursement of costs payable hereunder shall not exceed the sum ONE MILLION ONE HUNDRED SIXTY THOUSAND FIVE HUNDRED TEN DOLLARS ($1,160,510) for loans and administrative fees as set forth in Exhibit “B”. Invoices for amounts in excess of ONE

MILLION ONE HUNDRED SIXTY THOUSAND FIVE HUNDRED TEN DOLLARS ($1,160,510) shall not be paid unless the performance of services and/or reimbursement of costs and expenses in excess of said amounts have been approved in advance of performing such services or incurring such costs and expenses by the City Manager (for contracts less than $50,000) or City Council (for contracts $50,000 or more) evidenced by motion duly made and carried and a written contract amendment having been executed.

CITY shall not be liable for, and CONTRACTOR shall not be entitled to, any payment for Services performed before this Agreement's execution.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

81 City of Foster City Affordable ADU Loan Program Agreement 2 4
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1 4. Additional Services. In the event CITY desires the performance of additional services not otherwise included within the services described in Exhibit A, such services shall be authorized in advance of the performance thereof by the City Manager (for contracts less than $50,000) or City Council (for contracts $50,000 or more) by motion duly made and carried. Such amendment to this Agreement shall include a description of the services to be performed thereunder, the maximum compensation and reimbursement of costs and expenses payable therefor, the time of performance thereof, and such other matters as the parties deem appropriate for the accomplishment of such services. Except to the extent modified by written amendment, all other terms and conditions of this Agreement shall be deemed incorporated in each such amendment.

5. Records. CONTRACTOR shall keep and maintain accurate records of all time expended and costs and expenses incurred relating to services to be performed by CONTRACTOR hereunder. Said records shall be available to CITY for review and copying during regular business hours at CONTRACTOR’s place of business or as otherwise agreed upon by the parties.

6. Authorization. This Agreement becomes effective when endorsed by both parties in the space provided below.

7. Reliance on Professional Skill of CONTRACTOR. CONTRACTOR represents that it has the necessary professional skills to perform the services required and the CITY shall rely on such skills of the CONTRACTOR to do and perform the work. In performing services hereunder CONTRACTOR shall adhere to the standards generally prevailing for the performance of expert consulting services similar to those to be performed by CONTRACTOR hereunder.

CONTRACTOR represents that it has reviewed Exhibit A and that in its professional judgment the Services to be performed under this Agreement can be performed for a fee within the maximum amount set forth in the Compensation Schedule established in Exhibit A and within the times specified for each individual Project.

CONTRACTOR represents that it possesses all necessary training, licenses and permits to perform the Services and that its performance of the Services will conform to the standards of practice of a professional having experience and expertise in performing professional services of like nature and complexity of the Services working on similar, successfully completed projects.

The granting of any progress payment by CITY, or the receipt thereof by CONTRACTOR, or any inspection, review, approval or oral statement by any representative of CITY or any other governmental entity, shall in no way waive or limit the obligations in this Paragraph 7 or lessen the liability of CONTRACTOR for unsatisfactory Services, including but not limited to cases where the defective or below standard Services may not have been apparent or detected at the time of such payment, inspection, review or approval.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

82 City of Foster City Affordable ADU Loan Program Agreement 3 4
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1 8. Documents. All documents, plans, drawings, renderings, and other papers, or copies thereof, as finally rendered, prepared by CONTRACTOR pursuant to the terms of this Agreement, shall, upon preparation and delivery to CITY, become the property of CITY.

9. Relationship of Parties. CONTRACTOR is an independent Contractor and does not act as City’s agent in any capacity, whatsoever. CONTRACTOR is not entitled to any benefits that CITY provides to CITY employees, including, without limitation, worker’s compensation benefits or payments, pension benefits, health benefits or insurance benefits. Terms within this Agreement regarding direction apply to and concern the result of the CONTRACTOR’s provision of Services, not the means, methods, or scheduling of the CONTRACTOR’s work. CONTRACTOR shall be solely responsible for the means, methods, techniques, sequences and procedures with respect to its provision of Services under this Agreement. CONTRACTOR shall pay all payroll taxes imposed by any governmental entity and shall pay all other taxes not specifically identified in this Agreement as CITY’s responsibility.

10. Schedule. CONTRACTOR shall adhere to the schedule set forth in Exhibit A; provided, that CITY shall grant reasonable extensions of time for the performance of such services occasioned by governmental reviews of CONTRACTOR’s work product or other unavoidable delays; provided, further, that such unavoidable delay shall not include strikes, lockouts, work stoppages, or other labor disturbances conducted by, or on behalf of, CONTRACTOR’s officers or employees.

CONTRACTOR acknowledges the importance to CITY of CITY’s Project schedule and agrees to put forth its best professional efforts to perform its services under this Agreement in a manner consistent with that schedule.

11. Compliance with Laws; Prevailing Wage. CONTRACTOR shall carry out, and shall use its best efforts to ensure that its employees, volunteers, contractors and subcontractors carry out, the design and construction of all Project activities funded hereunder in conformity with all applicable State of California Labor Code requirements; the City zoning and development standards; building, plumbing, mechanical and electrical codes; all other provisions of the City of Foster City Municipal Code (“Code”); all applicable disabled and handicapped access requirements, including the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.; that all contractors or subcontractors hired by CONTRACTOR are licensed in the State of California; and that all activities funded hereunder are only performed on property located within the CITY’s corporate limits.

In the performance of its obligations set forth in this Agreement, CONTRACTOR shall have the status of an independent contractor and shall not be deemed to be an employee, agent or officer of the CITY. To the extent State prevailing wage laws apply to the Project, CONTRACTOR shall ensure that it complies with prevailing wage requirements in

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

83 City of Foster City Affordable ADU Loan Program Agreement 4 4
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1 connection with the design, construction, and/or installation contemplated hereunder (the “Work”), that no less than the general prevailing rate of per diem wages, and not less than the general prevailing rate of per diem wages for holidays and overtime work, for each craft, classification or type of worker needed to execute the Work shall be paid to all workers, laborers and mechanics employed in the execution of the Work by CONTRACTOR, contractors and subcontractors doing or contracting to do any part of the Work. Copies of such prevailing rate of per diem wages are available at:
https://www.dir.ca.gov/OPRL/DPreWageDetermination.htm.

To the extent applicable, CONTRACTOR, its contractors and subcontractors, shall comply with all requirements of the California Labor Code, including but not limited to, Labor Code sections: 1773.2 (regarding posting wage determinations at each job site); section 1776 (regarding the certification, maintenance, and availability for inspection of payroll records); section 1777.5 (regarding employment of apprentices); section 1810 (regarding a legal day’s work as 8 hours of labor); and section 1775 (regarding penalties for violations).

CONTRACTOR shall defend, with counsel reasonably acceptable to CITY, indemnify and hold harmless Indemnitees from and against any Claims arising out of CONTRACTOR’s failure to comply with State of California Labor Code requirements pertaining to the design and construction of the Work. Further, CONTRACTOR shall indemnify and hold harmless the Indemnitees with respect to all final judgments or settlements in actions brought by any “contractor” in which City is (i) determined to be an “awarding body” and (ii) damages are awarded, pursuant to Labor Code sections 1726 or 1781. CONTRACTOR’s defense, indemnity and hold harmless obligations under this section shall survive expiration or termination of this Agreement.

CONTRACTOR hereby waives, releases and discharges the Indemnitees from any and all present and future Claims arising out of or in any way connected with CONTRACTOR’s obligation to comply with all State of California Labor Code requirements pertaining to the design and construction of the Work. This release applies to all potential future claims by CONTRACTOR on behalf of itself and its agents, representatives, assigns, heirs, spouses, successors-in-interest, executors, administrators, employees, contractors, subcontractors, material suppliers and vendors (“Releasors”), agrees to waive any and all rights pursuant to Section 1542 of the California Civil Code, which reads as follows:

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

CONTRACTOR shall include within each of its contracts, subcontracts, and within any other agreements with Releasors involved in the Work, a release in favor of the Indemnitees substantially identical to this Section 11.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

84 City of Foster City Affordable ADU Loan Program Agreement 5 4
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1 12. Indemnity. To the fullest extent allowed by law, CONTRACTOR hereby agrees to defend, indemnify, and save harmless CITY, its Council, boards, commissions, officers, employees, directors, volunteers and agents, from and against any and all claims, suits, actions liability, loss, damage, expense, injury (including, without limitation, economic harm, injury to or death of any person, including an employee of CONTRACTOR or its Subconsultants), cost (including, without limitation, costs and fees of litigation) of every nature, kind or description, at law or equity, which may be brought against, or suffered or sustained by, City of Foster City, its Council, boards, commissions, officers, employees, directors, volunteers or agents that arise out of, pertain to, or relate to any negligence, recklessness, or willful misconduct of CONTRACTOR, any Subconsultant, anyone directly or indirectly employed or retained by them, or anyone that they control. In the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, the CONTRACTOR shall meet and confer with other parties regarding unpaid defense costs.

The duty of CONTRACTOR to indemnify and save harmless, as set forth herein, shall include the duty to defend as set forth in Section 2778 of the California Civil Code; provided, however, that nothing herein contained shall be construed to require CONTRACTOR to indemnify City of Foster City, its Council, boards, commissions, officers, employees and agents against any responsibility or liability in contravention of Section 2782 of the California Civil Code.

CONTRACTOR’s responsibility for such defense and indemnity obligations shall survive the termination or completion of this Agreement for the full period of time allowed by law.

The defense and indemnification obligations of this agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained within this Agreement.

If CONTRACTOR is a “design professional,” as defined in California Civil Code Section 2782.8(c), CONTRACTOR shall indemnify, defend, and hold the Indemnitees harmless against Liability only to the extent such Liability arises out of, pertains to, or relates to CONTRACTOR’s negligence, recklessness, or willful misconduct. In such an event, the cost to defend charged to CONTRACTOR shall not exceed CONTRACTOR’s proportionate percentage of fault.

13. Insurance. Prior to execution of this Agreement, CONTRACTOR shall furnish to CITY Certificates of Insurance showing satisfactory proof that it maintains the insurance required by this Contract as set forth in EXHIBIT C, Insurance, which are attached and made a part of this Agreement. CONTRACTOR shall maintain all required insurance throughout the term of this Agreement and as otherwise provided in EXHIBIT C. In the event CONTRACTOR fails to maintain any required insurance, and notwithstanding Paragraph 3 above, CITY may (but is not obligated to) purchase such insurance and deduct or retain premium amounts from any sums due CONTRACTOR under this

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

85 City of Foster City Affordable ADU Loan Program Agreement 6 4
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1 Agreement (or CONTRACTOR shall promptly reimburse CITY for such expense).

CONTRACTOR shall maintain insurance as required by this Agreement to the fullest amount allowed by law and shall maintain insurance for a minimum of five (5) years following completion of this project or service. In the event CONTRACTOR fails to obtain or maintain completed operations coverage as required by this Agreement, the CITY at its sole discretion may purchase the coverage required and the cost will be paid by CONTRACTOR.

14. WORKERS' COMPENSATION. CONTRACTOR certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and CONTRACTOR certifies that it will comply with such provisions before commencing the performance of the work of this agreement.

15. NON-DISCRIMINATION. The CONTRACTOR will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. The CONTRACTOR will take affirmative action to ensure that applicants are employed and the employees are treated during employment without regard to their race, color, religion, sex or national origin. Such action shall include, but not be limited to the following:
employment, advancement, demotion, transfer, recruitment, or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONTRACTOR shall at all times be in compliance with the requirements of the Federal Americans With Disabilities Act (Public Law 101- 336) which prohibits discrimination on the basis of disability by public entities. The CONTRACTOR agrees to post in conspicuous places available to employees and applicants for employment any notices provided by the CITY setting forth the provisions of this non-discrimination clause.

16. Notice. All notices required by this Agreement shall be given to the CITY and CONTRACTOR in writing, by first class mail, postage prepaid, addressed as follows:

CITY:

City of Foster City
610 Foster City Boulevard
Foster City, CA 94404-2299
Attention: Sofia Mangalam, Community Development Director Tel: 650-286-3239
Email: [email protected]
CONTRACTOR:

HEART of San Mateo County
2905 S. El Camino Real
San Mateo, CA 94303

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

86 City of Foster City Affordable ADU Loan Program Agreement 7 4
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1 Attention: Tim Davis, Director, Housing Consulting Services Tel. 650-204-0958
Email: [email protected]

17. Non-Assignment. CONTRACTOR may not assign its rights or obligations under this Agreement without the express written consent of the City, which may be granted or denied in its sole discretion. Subject to the foregoing restrictions on assignment, all of the terms, covenants and conditions of this Agreement shall be binding upon CITY and CONTRACTOR and their respective permitted successors and assigns.

18. Amendments. This Agreement may be amended or modified only by written agreement signed by both parties.

19. 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.

20. Governing Law. This Agreement shall be deemed to have been executed in the County of San Mateo, California. The formation, interpretation and performance of this Agreement shall be governed by the laws of the State of California, excluding its conflict of laws rules. Any suit or action initiated by either party shall be brought in the County of San Mateo, California unless the parties agree otherwise in a written amendment to this Agreement. 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.

21. 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.

22. Conflict of Interest. CONTRACTOR represents and warrants that it presently has no interest, and shall not have any interest, direct or indirect, which would conflict in any manner with the performance of work and services required under this Agreement.

Without limitation, CONTRACTOR represents to and agrees with CITY that CONTRACTOR has disclosed any potential conflict of interest, and will have no future conflict of interest, in providing CITY services hereunder, including but not limited to, any interest (financial, share ownership, shared management, shared directors, or reporting responsibilities) CONTRACTOR may presently have, or will have in the future, with respect to any other person or entity (including but not limited to potential suppliers, vendors, consultants, contractors, or regulatory agency) which may have an interest in the subject matter of the Services.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

87 City of Foster City Affordable ADU Loan Program Agreement 8 4
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1 23. Liability of CITY. Except as provided in Exhibit A, Services to be Provided by CONTRACTOR and Exhibit C, Insurance, CITY's obligations under this Agreement shall be limited to the payment of the compensation provided for in Paragraphs 1, 3, and 4 of this Agreement,
Notwithstanding any other provision of this Agreement, in no event shall CITY be liable, regardless of whether any claim is based on contract, tort or otherwise, for any special, consequential, indirect or incidental damages, lost profits or revenue, arising out of or in connection with this Agreement, the Services, or the Project.

CITY shall not be responsible for any damage to persons or property as a result of the use, misuse or failure of any equipment used by CONTRACTOR, or by any of its employees, even though such equipment be furnished, rented or loaned to CONTRACTOR by CITY. The acceptance or use of such equipment by CONTRACTOR or any of its employees shall be construed to mean that CONTRACTOR accepts full responsibility for and shall exonerate, indemnify, defend and save harmless CITY from and against any and all claims for any damage or injury of any type, including attorneys' fees, arising from the use, misuse or failure of such equipment, whether such damage be to the CONTRACTOR, its employees, CITY employees or third parties, or to property belonging to any of the above.

Nothing in this Agreement shall constitute a waiver or limitation of any right or remedy, whether in equity or at law, which CITY or CONTRACTOR may have under this Agreement or any applicable law. All rights and remedies of CITY or CONTRACTOR, whether under this Agreement or other applicable law, shall be cumulative.

24. Waiver of Default. Waiver of any default by either party to this Agreement shall not be deemed to be waiver of any subsequent default. Waiver or breach of any provision of this Agreement shall not be deemed to be a waiver of any other or subsequent breach, and shall not be construed to be a modification of the terms of this Agreement unless this Agreement is modified as provided below.

25. Force Majeure. Except for defaults of subconsultants at any tier, neither party shall be liable for any excess costs if the party’s failure to perform the Agreement arises from causes beyond the party’s control and without the fault or negligence of the party who failed to perform, including without limitation failure to reasonably mitigate any adverse impacts (Force Majeure), provided the other party receives written notice of such force majeure event no later than five (5) calendar days after commencement of such force majeure event. Force majeure events include the following:

Acts of God, fires, floods, earthquake, other natural disasters, epidemics and pandemics (other than COVID-19 or variants), wars, abnormal weather conditions, nuclear accidents, strikes, lockouts, freight embargos, interruptions in service by a regulated utility, or

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

88 City of Foster City Affordable ADU Loan Program Agreement 9 4
5 9
1 governmental statutes or regulations enacted or imposed after the fact (together, “force majeure events”). The spread or effects of Covid-19, and any variants thereof, can be reasonably anticipated and do not constitute a force majeure event. Tariffs imposed by the US government, and any resulting supply disruptions do not constitute a force majeure event.

Any force majeure event with a duration in excess of 30 days entitles either party to terminate this Agreement with written notice to the other party, without further penalty or compensation.

26. No Third-Party Beneficiary. It is the intention of the parties that under no circumstances are any rights created for persons or entities who are not parties to this Agreement under a third- party beneficiary theory or under any other theory of law.

27. Attorney’s Fees. 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.

28. Authority. The parties each represent that the signatory has the authority to bind each respective entity, and assents to each and every term contained within this Agreement.

29. No Joint Venture. It is expressly understood and agreed that neither party shall become as a result of this Agreement a partner of the other nor a joint venturer with the other party in the conduct of such party’s business or otherwise. This Agreement is not intended, and shall not be construed, to create the relationship of principal and agent, partnership, joint venture, or association as between CITY and CONTRACTOR.

30. Severability. Should any provision of any of this Agreement be found invalid by a court or other body of competent jurisdiction, said invalidity or ineffectiveness shall not affect the validity of the remaining provisions of this Agreement which shall remain in force to the maximum extent possible.

31. Further Assurances. From and after the Effective Date of this Agreement, the parties agree to do such things, perform such acts, and make, execute, acknowledge and deliver such documents as may be reasonably necessary or proper and usual to timely complete the actions contemplated by this Agreement.

32. Interpretation. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any document executed and delivered by either party in connection with this Agreement. The captions in this Agreement are for convenience of reference only and shall not be used to interpret such Agreement. The defined terms in this Agreement shall apply equally to both the singular and the plural forms of the terms

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

89 City of Foster City Affordable ADU Loan Program Agreement 10 4
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1 defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include” and “including” shall be deemed to be followed by the phrase “without limitation.” The words “approval,” “consent” and “notice” shall be deemed to be preceded by the word “written.”

33. Entire Agreement. This Agreement, including Exhibits A, B, and C, comprises the entire Agreement.

34. Counterparts. This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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:

Dated: _________________________________ Art Kiesel, Mayor
ATTEST:

Dated: ________________________________ Priscilla Schaus, City Clerk
APPROVED AS TO FORM:

Dated:

Benjamin Stock, City Attorney
CONTRACTOR:

Dated:

Armando Sanchez, Executive Director

HEART OF SAN MATEO COUNTY
Email: [email protected]

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

90 City of Foster City Affordable ADU Loan Program Agreement 11 4
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1 EXHIBIT A

SCOPE OF WORK AND PROGRAM GUIDELINES
FOR

CITY OF FOSTER CITY AFFORDABLE ADU PROGRAM
This Exhibit A describes the Scope of Work and Program Guidelines for Foster City’s Affordable ADU Program (“Program”) to be administered by HEART OF SAN MATEO COUNTY (“HEART”), pursuant to the Agreement dated ____________________.

A. SCOPE OF WORK
HEART will fulfill the scope of work for tasks 1-5 according to the schedule below. Actual loan closings may not occur until year two, given the time it will take applicants to secure a General Contractor and permits.

Task 1: Project Initiation and Project Management
At the start of the project, HEART will participate in a kick-off meeting with City staff to review objectives, roles, communication procedures, and reporting expectations. HEART 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.

Task 2: Program Administration and Homeowner Intake
HEART will create a process for outreach, intake, and selection of homeowners based on City guidelines and relevant state and federal law to create an efficient equitable, and responsive process. HEART will draft clear process documents for intake, selection, and loan signing as well as an outreach strategy with sample documents. HEART will use its Mobile Home Loan Program as the model.

Task 3: Loan Origination, Underwriting, and Servicing
Eligibility will focus on the type of property and suitability for construction of an ADU; current monetary encumbrances on the property; the use of funds; the type, size, and design of the accessory dwelling unit (ADU) proposed; and the owner’s commitment to lease the ADU to a qualified low-income tenant. HEART will develop all loan documents as well as affordability agreements for the 10-year affordability restriction period. HEART will manage loan repayments made to the re-use account balance. HEART, as a housing endowment trust, is well positioned to manage the funds.

Task 4: Affordability Compliance and Reporting
HEART will develop compliance and reporting forms and procedures through its web-based system. Income certification shall take place upon lease up of the ADU and once annually thereafter. It is understood that the City shall provide a standard lease agreement for homeowners to use and that a 12-month initial lease is required. Maximum rental rates shall be issued annually by the City. HEART will report no less than quarterly on the status of

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

91 City of Foster City Affordable ADU Loan Program Agreement 12 4
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1 loans, ADU construction status, and regular monitoring. HEART will contact the City promptly to address any program or compliance concerns.

Task 5: Reporting and Records Management
HEART has a secure and reliable records management systems through RentManager, which has separate records for each homeowner and their tenants. HEART will store and retain all relevant records for easy access as necessary. HEART will meet with City staff quarterly to update the status of the program, discuss progress, and resolve any issues.

Further, HEART will submit an annual report with relevant details, challenges, and successes of the program. All records shall be retained for a period of time consistent with the City’s records retention policy.

Schedule for the Scope of Work
Task Year one Year Two Year Three
Project
Initiation and
Project
Management
Q1: Complete kickoff
meeting; review
objectives, roles,
communication
procedures, and
reporting expectations.

Refine project timeline
Ongoing project
management
Ongoing project
management
Program
Administration
and
Homeowner
Intake
Q1: Develop loan
applications; draft
outreach materials.

Q2: Finalize outreach
materials; being
program outreach.

Q3: Work with initial
applicants to complete
applications.

Q4: Continue working
with applicants.

Ongoing outreach.

Check in at end of
year two on
program
progress/need for
changes
Ongoing outreach.

If changes are
proposed, roll out
changes
Loan
Origination,
Underwriting,
and Servicing
Q1: Draft loan
documents,
underwriting
procedures, and criteria;
identify private financing
options; evaluate
program guidelines.

Q2: Finalize loan
documents,
underwriting
procedures, and criteria.

Finalize program
Continue
underwriting.

Close first loan
(early in 2nd year).

Begin Servicing
first loan. As part
of year two check
ink, examine, and,
if needed, change
loan terms.

Continue
underwriting,
closings, and
servicing of loans.

Roll out any
changes in
underwriting

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

92 City of Foster City Affordable ADU Loan Program Agreement 13 4
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1 Task Year one Year Two Year Three
guidelines. Establish
loan re-use account.

Q3: Underwrite initial
applications; make initial
loan commitments.

Q4: Continue
underwriting and loan
commitments
Affordability
Compliance
and Reporting
Q1: Draft affordable
housing agreements.

Q2: finalize affordable
housing agreements.

Finalize first
tenant income
certifications.

Ongoing: income
certifications and
recertifications.

Reporting and
Records
Management
Q1: Establish systems
for tracking loans and
affordable housing
agreements.

Q4: Prepare year-end
progress report and
status of any loan
commitments
Prepare quarterly
reports for City on
spending and fund
availability, semi-
annual reports on
more general
activities.

Prepare quarterly
reports for City on
spending and fund
availability, semi-
annual reports on
more general
activities.

B. PROGRAM AND LOAN UNDERWRITING GUIDELINES
These Program and Loan Underwriting Guidelines (“Guidelines”) may be revised from time to time as mutually agreed by both the Contractor and the City.

1. PROGRAM SUMMARY
The City of Foster City’s (“City”) Below Market Rate Accessory Dwelling Unit Loan Program, known as the Affordable ADU Program (“Program”) provides financial incentives for Foster City Homeowners to build an affordable ADU on their property if they agree to rent the ADU at below market rates to lower income households for a period of 10 years.1 Pursuant to Agreement dated ____________________, the City shall fund the Program as stated in Exhibit B of this Agreement to provide financing for eight (8) ADU projects at no interest to the homeowner for eligible projects within Foster City. Eligible homeowners will be selected on a first-come, first-served basis.

HEART provides and manages loan financing only and compliance services as described in 1 See program rules. ADU may be rented to Homeowner’s family member(s) or may be owner-occupied provided the occupants of the ADU are income qualified. Lower income is defined as earning less than 80% of Area Median Income.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

93 City of Foster City Affordable ADU Loan Program Agreement 14 4
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1 this Exhibit A. Homeowners find their own ADU general contractor/provider and are responsible for securing any additional needed financing for the ADU project.

Eligible projects include single story detached or attached ADU, garage conversion ADUs or junior accessory dwelling units (JADUs) on the homeowner’s property. For the purposes of these Guidelines, ADU shall refer also refer to both JADUs and ADUs of all eligible types.

Through this Program, the City provides Program funding to HEART, subject to oversight provisions and other terms and conditions specified in the Agreement, that HEART will use to issue no-interest interest loans for 20-year terms for up to $125,000 at no interest to Foster City Homeowners toward the cost of building/installing the ADU. The City financing incentive increases to $150,000 if the Homeowner agrees to rent their ADU with a preference for those with special needs (as defined in the program guidelines). In addition, the program provides expedited permitting and reduced permit fees.

In return for the no-cost financing and accelerated permitting, participating homeowners must agree to rent their ADU at below market rates to income-qualified occupants or for a period of 10 consecutive years and agree to Program terms and conditions3. Low-income homeowners have the option of occupying their ADU and renting out their home, provided their household income meets the low-income requirements and they agree to initial income and occupancy certification and annual recertification. Under this program, homeowners are not permitted to create a two-unit condominium and sell the ADU or the single-family home separately.

The program is provided to implement the City’s 2023-2031 Housing Element, Program H-D- 4-b, ADU/JADU Financial Incentive Program (page HE-94), which calls for the City to provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct ADUs that are restricted for lower-income households for 10-15 years, with an additional incentive amount for units subject to a preference for identified categories of special needs people who would benefit from coordinated onsite services, including but not limited to people with developmental disabilities

2. PROGRAM GOAL
The goal of the Program is to facilitate financing of a minimum of eight (8) affordable ADUs to support the City’s 2023-2031 Housing Element Program H-D-4-b, which calls for eight (8) income-restricted ADU units to be financed by 2031 as part of the City’s goal of 24 ADUs constructed by 2031.

From the 2023-2031 Housing Element, page HE-94: H-D-4-b ADU/JADU Financial Incentive Program. Provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct an ADU/JADU that is restricted for lower-income households for 10- 3 The homeowner may occupy the ADU themselves for any period of time during the 20-year restriction period, provided their household income is below the low-income limit. No rent is required for owner-occupied units.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

94 City of Foster City Affordable ADU Loan Program Agreement 15 4
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1 15 years, with an additional incentive amount for units subject to a preference for identified categories of special needs people who would benefit from coordinated onsite services, including but not limited to people with developmental disabilities.

3. PROGRAM PARTICIPANTS
HEART (“Contractor”) – manages the loan applicant selection and approval process, prepares loan documents, underwrites loans, issues and manages loans; performs initial income and occupancy certification compliance and annual recertifications of ADU occupants. HEART finances the project through their own financing Program using funds received from the City.
City of Foster City – issues funds for the Program; conducts oversight; approves Program guidelines and program documents, and marketing materials. The City also provides lease templates for homeowners.
Homeowner – agrees to lease ADU at below market rental rates to income-qualified occupants for 10 consecutive years and all Program rules. Occupants may include family members or the homeowner provided they are income qualified. Homeowners must qualify as stated in the underwriting guidelines below and agree to Program terms and conditions.
General Contractor – builds and/or installs the ADU.

4. PROGRAM INCENTIVES
Incentive 1: $125,000 loan at 0% interest. Approved Foster City Homeowners (“Homeowner” or “Applicant”) commit to renting their ADU to qualified low-income tenant(s) for a period of 10 years (“Restricted Period”) at below market rental rates. In exchange, the homeowner receives a no-interest loan to finance up to $125,000 of the cost to purchase and install their ADU.
Incentive 2: $150,000 loan at 0% interest. Eligible Homeowners who agree to rent their ADU with a preference for identified categories of households with special needs receive a no-interest loan to finance up to $150,000 of purchase and installation costs of their ADU. The homeowner must agree to rent to a special needs household using a preference program for the duration of the Restricted Period. Preference means that the homeowner makes a diligent effort to rent the unit to a household with special needs as evidenced by documented outreach to at least one target population group, as defined below, for at least 90 days.
Incentive 3: The City provides accelerated permit processing and for the building permit through the pre-reviewed plans.

5. PROGRAM AND LOAN UNDERWRITING GUIDELINES

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

95 City of Foster City Affordable ADU Loan Program Agreement 16 4
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1 These Program and Underwriting Guidelines (“Guidelines”) may be revised from time to time if mutually agreed upon by both parties.

5.1 HOMEOWNER-APPLICANT QUALIFICATIONS

1. Applicant must be an owner or be a trustee of a trust which owns the property for which applicant is applying.

2. Only one loan per Applicant through the Program.

3. Applicant understands that the Program is limited to eight (8) loans in total unless funds remain available for additional loans.

4. Applicants must commit to renting at below market rental rates for 10 years (“Restricted Period”).

5. Applicants must agree to complete Fair Housing training prior to completion of construction of the ADU.

6. Applicants must comply with Foster City’s Anti-Displacement Strategy and Municipal Code Section 17.90 once the ADU is constructed and rented.

7. Applicants must not have any liens or levies on title (court ordered judgements, tax liens, credit card, medical debt, etc.) of the Property.

8. Applicant is responsible for securing any additional financing to cover the project cost, if needed, and disclosing all financing partners to HEART prior to final issuance of the HEART Affordable ADU Loan.

9. Applicant must submit project plans and project budget to HEART as part of the application process.

10.Before reviewing if the Applicant meets the qualifications for the Program, a preliminary title report will be obtained to confirm ownership of the Property, identify any relevant encumbrances, and confirm and there is no lien or levy from creditors or other parties on the Property. If the preliminary title report shows any liens or levies from creditors, or encumbrances which would interfere with the project or create added risks for lender, the application filed by the Applicant will be denied.

However, they will be invited to re-apply if the Applicant satisfactorily resolves the issue and funds are still available.

11.Homeowner agrees to comply with the following ADU occupancy requirements:
a. Homeowner must submit a report to the City annually by June 30 through the City’s BMR Rental Registry providing information on the unit, including rental rate, rental rate increase, occupancy, and lease terms. b. Homeowner must rent to an income qualified renter and enter into a 12-month initial lease using a lease form approved by the City.
c. Homeowner must rent the unit for a minimum of $100 per month (minimum rent requirement does not apply to owner-occupied units) and a maximum of the published rate as issued by the City of Foster City annually. d. Rental rates of occupied units are limited to a 5% rental rate increase per 12- month period. Vacant units are not subject to the 5% rate increase cap. e. All occupants of a rented ADU must be on the lease.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

96 City of Foster City Affordable ADU Loan Program Agreement 17 4
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1 f. Occupants of the ADU are subject to the City’s occupancy standards as specified in the BMR Guidelines.
g. Units cannot be vacant for more than 90 days in a calendar year unless owner can demonstrate a continuous good faith effort to rent the unit during the vacancy period.
h. ADUs in the Program can be owner-occupied if the owner is income-qualified to occupy the unit and agrees to initial income and occupancy certification and annual recertification.
i. For rented ADUs, Homeowner must comply with the City’s minimum and maximum rental rates issued annually and effective July 1 of each year. j. Homeowner must comply with the City’s BMR Guidelines. k. The Homeowner must maintain the ADU in good condition and ensure that all repairs are performed according to State building codes and the City’s municipal code.
l. Homeowner may rent the unit to an income-qualified family member or friend provided a lease is issued and all requirements are complied with. m. For Homeowners agreeing to rent the unit with a preference for a household member with special needs, special needs is defined as supportive housing as stated in the City’s Municipal Code, Chapter 17.04.020:

Municipal Code, Chapter 17.04.020
“Supportive housing” means housing with no limit on length of stay, that is occupied by the target population as defined in Section 65582 of the California Government Code, and that is linked to on- or off-site services that assist the supportive housing residents in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community.

Target population, as defined in Section 65582 (p) as follows:
“Target population” means persons with low incomes who have one or more disabilities, including mental illness, HIV or AIDS, substance abuse, or other chronic health condition, or individuals eligible for services provided pursuant to the Lanterman Developmental Disabilities Services Act (Division 4.5 (commencing with Section 4500) of the Welfare and Institutions Code) and may include, among other populations, adults, emancipated minors, families with children, elderly persons, young adults aging out of the foster care system, individuals exiting from institutional settings, veterans, and homeless people.

Preference for the purpose of these Guidelines means that the Homeowner shall make a diligent effort for at least 90 days to rent the unit to an eligible household as described in Table 1 and, if unsuccessful in finding an eligible household to occupy the ADU, the homeowner shall a) provide evidence that they have reached out to at least one (1) target population and/or at least one agency

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

97 City of Foster City Affordable ADU Loan Program Agreement 18 4
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1 providing services to the target population during the 90-day period, and b) they have notified both HEART and the City of such attempts and submitted required documentation. After the 90-day period, and notification to HEART, the Homeowner may rent the ADU to a non-special needs household without triggering a repayment event. Upon vacancy of the ADU unit during the Restricted Period of 10 years, the Homeowner must implement the preference requirements as stated above.

Onsite services are not specifically required for the ADU household to be eligible for the Special Needs Incentive. However, those homeowners who agree to rent to a household with special needs must commit to renting the ADU to a household using a preference for a household with at least one (1) special needs member and that household member must provide evidence that have used services, either onsite, offsite, or coordinated by an agency to help retain their housing, and/or improve their health status, and/or maximize their ability to live, and when possible, work in the community. The preference continues for the duration of the Restricted Period.

Table 1. Special Needs Eligibility Requirements
Program
Requirement
Criteria
ADU Household
member must have
a disability
oThose receiving SSDI
oThose receiving SSI
oThose with an assigned IHSS worker
oThose covered by the Lanterman
Development Disabilities Services Act
oOther disability documentation provided by a
healthcare professional. Nature of disability is
not required to be disclosed.

Income Restriction oLow Income (<80% AMI), or
overy low income (<50% AMI), or
oExtremely low income (<30% AMI)
Member of one or
more target
Populations
oSenior (aged 62 or over)
oAdult 18+
oAdult with child or children
oEmancipated minor under age 18
oVeteran of US Armed Services
oHomeless (or formerly homeless)
oYoung adult aging out of Foster Care System
(ages 21 to 25)
oIndividuals exiting institutional settings
Supportive Services Services must be ongoing during the prior 12- month period and anticipated for next 12 months
for certification purposes:

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

98 City of Foster City Affordable ADU Loan Program Agreement 19 4
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1 Program
Requirement
Criteria
oOnsite services
oOffsite services
oonsite or offsite services coordinated through
an agency
Examples include, but are not limited to:
Classes for life skills management, including
financial management
Job or job skills training through NOVAWorks
or other job training agency
Ongoing healthcare relating to special needs
such as occupational or physical therapy,
neuroskills, rehabilitation, behavioral therapy,
mental health, support group for disability or
chronic health condition, etc.
Regular health monitoring
County or agency support such as paratransit
services, Meals on Wheels, case
management, etc.
Court-provided services such as case
management

5.2 ADU PROJECT ELIGIBILITY
a) Eligible Properties
Single dwelling unit property located in Foster City where an ADU can be constructed and comply with the requirements of City Municipal Code section 17.78 (“Property”).
The homeowner’s property shall not have more than two other loans (including a mortgage) and a loan-to-value that is no higher than 90% for all loans, excluding the ADU.
Project must meet all City codes.
Work must be guaranteed for a standard period of time subject to current industry standards for work and workmanship, following completion of construction as evidenced by Temporary Certificate of Occupancy issued by the City of Foster City.
General Contractor must obtain all required permits.
b) Eligible Uses of Loan Funds
Loan funds may be used for construction, purchase, and/or installation of the ADU, site preparation, foundation construction, associated materials, demolition, installation, site work and labor of a new legal and feasible

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

99 City of Foster City Affordable ADU Loan Program Agreement 20 4
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1 ADUs, including lot maximums, zoning, permitting, and any other requirements in Foster City Municipal Code section 17.78 for the Project (up to a maximum amount of $150,000 for the City’s loan for the project).

This amount includes any applicable building permit fees or other fees charged by a public agency or utility as a result of the Project. Only one loan incentive per property. Those homeowners building multiple ADUs on their property are eligible for only one incentive loan under this program.
Construction may be a prefabricated detached or attached ADU, a garage conversion ADU, or a junior accessory dwelling unit (JADU) that meets all City and State requirements and building codes and complies with the City’s zoning code. See Foster City Municipal Code Chapter

17.78, Accessory Dwelling Units.
Eligible costs include:
oPurchase cost of the ADU, if applicable
oConstruction materials, fixtures, and labor
oProject management
oDemolition necessary for the construction of the foundation for the ADU
oSite work, such as water/sewer/septic connections, utility improvements, or site leveling as is necessary for the construction of an ADU
oInstallation of the ADU
oOther hard or soft costs approved at the discretion of the City c) Ineligible Projects/Uses of Funds
Legalization of an unpermitted existing ADU, JADU or conversion ADU.

5.3 ADU PROJECT REQUIREMENTS
a) Project Size
ADU size shall be limited to requirements as stated in Foster City Municipal Code Chapter 17.78.
b) General Contractor Requirements
General Contractor must be licensed, bonded, and insured. General Contractor must maintain a Foster City Business License during the term of the project.
General Contractor must have five (5) or more years’ experience building ADUs in San Mateo County.
General Contractor must provide warranties for their work that are approved by HEART.
General Contractor must comply with all applicable local, state, and federal laws.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

100

City of Foster City Affordable ADU Loan Program Agreement 21 4
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1 c) Design
ADU must conform to any homeowner association (HOA) requirements, if applicable.
ADU must meet all building codes comply with Foster City Municipal Code Chapter 17.78.
All permits and approvals are required.
Project must be submitted through the Foster City Planning Department’s TRAKiT Program.
d) Additional Financing Rules
If the homeowner requires additional financing of their ADU project in addition to funds provided by this Program, the project cannot include any additional public funding (e.g. HOME or CDBG). Additional financing must be provided through a private financing agency such as a bank or credit union.
Additional financing must be secured prior to issuance of the Affordable ADU financing and is subject to approval by HEART.

5.4 ADU AFFORDABILITY REQUIREMENTS
a) Rent Restriction
Rent of the ADU unit shall be restricted to households earning less than 80% of AMI, using income limits established by the State of California Department of Housing and Community Development (HCD) adjusted for household size as follows: studio: one (1) person, one-bedroom: two (2) people; two bedroom: three (3) people; three bedroom: four (4) people. The rental restriction shall be for a minimum of 10 consecutive years after the issuance of the temporary occupancy certificate. Rent increases shall be limited to 5% per year and cannot occur more than once in a 12-month period.
Rent charged by Homeowner cannot exceed the maximum amount established by the City and issued annually by July 1. Rental amount, if any, shall be determined by the Homeowner, subject to the maximum rental rate issued by the City.
Minimum rent is $100 per month, except for owner-occupied units. b) Lease Requirements
Minimum lease term is 12 months for initial lease.
The lease form must comply with all applicable local, state, and federal regulations and other requirements as specified in the City’s BMR Guidelines, available online at Landlord/Property Manager Resources | Foster City California. The City must approve the lease form.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 22 4
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1 The lease must include an affordable housing addendum explaining the provisions of the Program and obligations regarding occupancy standards and rental rate restrictions and initial certification and annual recertification.

The lease addendum must state that the unit is a below market rate unit regulated by the City of Foster City and include length of the affordability restriction, ongoing tenant obligations, occupancy standards, and other provisions as specified in the City’s BMR Guidelines.
c) Loan Applicant-Homeowner Obligations (“Homeowner”)
Homeowner must acknowledge that HEART and/or the City shall have the right to audit tenant files and complete annual unit inspections subject to state notice regulations.
Homeowner must acknowledge the unit is a regulated below market rate (BMR) unit regulated by the City and subject to Municipal Code 17.90 and the City’s BMR Guidelines. This includes submittal of an annual report in the City’s BMR Rental Registry by June 30 annually. The City provides training for using the rental registry software.
Homeowner agrees to notify City through the BMR Rental Registry of any of the following occurs:
oNew tenant
oLease renewal or new lease with current tenant
oNew rental rate as approved by the Housing Authority
oTenant notification to move out
oNotice to pay or quit or eviction notice issued to tenant oChange in tenant’s voucher status, if applicable
oChanges in property management providers and/or homeowner contact information
oTenant/occupant that no longer qualifies for eligibility due to being over the income limit
Homeowner must enter into a loan agreement with the lender and repay the loan per the payment schedule with any accrued interest at the time of a qualifying repayment event or upon Homeowner’s decision to exit the Program.
Homeowner must maintain hazard insurance for the ADU that names City as loss payee annually for the term of the loan.
Homeowner hall keep all buildings located on the Property insured against loss by fire.
Subject to the rights of any senior lienholder, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Borrower; provided however, if Borrower is not in default under the Loan Documents, the proceeds shall be released to Borrower to repair or rebuild the Improvements provided that sufficient additional sources

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 23 4
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1 of financing to complete such repair or rebuilding are available to complete such work. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
Homeowner must adhere to Fair Housing regulations and complete Fair Housing training prior to execution of the first lease and every three (3) years thereafter. The City will post links to Fair Housing Training on the City’s website. Training is available at no cost through the State of California Civil Rights Department or through the City’s Fair Housing Workshop held annually.
Homeowner understands that a vacant ADU unit cannot be vacant for more than 90 days and must be rented to an income-qualified tenant to remain in the Program. Exceptions are granted by the City for documented repair and maintenance work or other reasons, such as pending unlawful detainer action which Homeowner continues to diligently prosecute, on a case-by- case basis.
Homeowner is responsible for managing the Tenant-Landlord relationship and enforcing the Lease Terms. City and HEART will not be parties to the lease, and will not be responsible for selecting a tenant, or enforcing the lease terms. These are the sole obligation of Homeowner. For example, if a tenant moves in and does not pay rent, it will be Homeowner’s sole responsibility to address the situation at Applicant’s own expense. Homeowner is responsible for reviewing the City’s Municipal Code, BMR Guidelines, and related ordinances.
d) Tenant Household Obligations to be included in the Lease (“Tenant”)
If Tenant is a voucher holder, Tenant must agree to Housing Authority terms of their voucher.
Tenant household size must comply with the City’s standard occupancy standards. Tenants that do not meet occupancy standards will be given 90 days’ notice to vacate.
Homeowner’s family members are allowed to occupy the ADU if they are otherwise qualified and added to the lease.
All occupants of the ADU must be on the lease.
Tenants found to be over the income limit upon annual income recertification will have 90 days to vacate the unit.
Tenant must comply with the terms of their lease in order to remain in the unit.
e) General Contractor’s Obligations “General Contractor” Homeowner must use a licensed General Contractor.
General Contractor must obtain all required local approvals, permits, and entitlements for the Project.

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City of Foster City Affordable ADU Loan Program Agreement 24 4
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1 General Contractor must use construction materials, finishes and fixtures shall be of good quality and manufacture and design.
Homeowner and General Contractor must indemnify and hold the City and HEART harmless throughout the contract term, and for construction defects during and after the contract term.
General Contractor must provide a construction warranty for materials, parts, and labor for each ADU that meets state standards under California’s Right to Repair Act (SB 800)
General Contractor must hold a valid general contractor’s license in the State of California.
General Contractor must hold a valid business license with the City of Foster City during the term of the project.
f) HEART’s Obligations for Loan Administration
HEART must provide the City with annual reports on loan administration. HEART must make payments to the City as required by the executed Agreement with the City to repay the City-funded portion of the loans. HEART must maintain records per local, state and federal laws.

5.5 LOAN PROVISIONS AND TERMS
a) Affordability Restriction Term
10 years.
Affordability is included in a recorded covenant that runs with the property until the end of the 10-year affordability restriction term.
HEART shall notify applicants concerning the terms of the restrictive covenant, including that it will run with the land, and be binding regardless of sale or early loan repayment, and shall provide a copy of the restrictive covenant for them to review prior to the closing date so that they have time to review it and understand it before signing.
b) Loan Terms for City Financing
Loan of up to $125,000 per Project ($150,000 for homeowners who agree to rent the ADU with a preference for supportive housing). Loan term: 20 years.
No downpayment required.
No interest (0%).
Interest payments may be deferred for the first 10 years of the loan term, at the election of the Borrower.
Payment schedule shall be determined by HEART and specified in loan documents.
Contractor shall collect payments for City-funded portion of loan and repay City on a schedule as agreed to in Exhibit B of this Agreement.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 25 4
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1 Upon termination of the Agreement any funds remaining in the re-use account shall be reimbursed to the City within 30 days or as specified in Exhibit B. The City may elect to transfer loans still in effect to a loan servicing provider. The lump sum of the balance due on the loan is due to Re-Use Account upon a qualifying Repayment Event.
c) Qualifying Repayment Events
Change in Property title.
Expiration of the loan term.
The lot is split.
Homeowner sells the single-family home or the ADU separately. The ADU is no longer approved for occupancy.
The ADU is vacant or no longer rented to a Qualified Tenant for 90 or more days (exceptions for repairs or lack of qualified candidates provided by homeowner, or unlawful detainer action, or other reasons on a case-by-case basis with City approval).
Borrower’s breach of any other provisions of the Loan Documents that remains uncured for more than 60 days.
Homeowner fails to comply with Municipal Code 17.90 or the BMR Guidelines. Tenant is no longer qualified, and Homeowner allows tenant to remain in the BMR ADU during the 10-year affordability restriction period of the loan term. Homeowners perform unpermitted work on the Property, and the City issues a Stop Work Order on the property after the Project is completed. Homeowner files for bankruptcy.
A mortgage holder repossesses the property for auction. A Homeowner receiving the incentive for renting an ADU to a household with Special Needs fails to follow the preference rules as stated in this Exhibit A.

d) Subordination
Subordination to the property’s primary mortgage and home equity loan/line of credit is acceptable. Other situations are subject to written approval by the City.

However, in the event of bankruptcy or foreclosure by the senior lender(s), the affordability requirements built into the deed of Trust between the Homeowner and HEART will not survive and the unit will be removed from the City’s Affordable ADU Program. The lien would be on the whole property, not just the ADU.
e) Completion of Project
Construction of the Project is required to be completed within 12 months following loan approval.
ADU is complete upon issuance of the Certificate of Occupancy by the City.

The Homeowner may begin the process of leasing the unit at that time.

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City of Foster City Affordable ADU Loan Program Agreement 26 4
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1 f) Funding Process
City will pay HEART to administer the Affordable ADU Program the lump sum of the amount as stated in Exhibit B within 30 days of receipt of an invoice. HEART will establish the loan fund and re-use account to disburse payments for issuing loans and for administration and lending fees.

6. APPLICATION AND SELECTION PROCESS

6.1 Application Process
Any Foster City homeowner can apply for the program through HEART as a Loan Applicant. (“Loan Applicant”). HEART determines methods for application and selection of applicants and issuing loans.
The City shall promote the program on its website, at City Hall, through the City’s electronic newsletter, and through the Foster City Islander. HEART shall issue loans to qualified Loan Applicants on a first-come, first-served basis until all eight (8) loans are issued.

6.2 Pre-Loan Application Steps
After a Loan Applicant is notified by HEART that they have been selected from the waitlist:
a) HEART shall schedule a Feasibility Consultation with Loan Applicant. During this consultation, Loan Applicant will meet with HEART to determine feasibility and help the Loan Applicant identify additional financing options for the project if needed. Initial consultation may be held virtually or by phone, or in person.

Consultation is provided at no cost to homeowners.
b) HEART its sole discretion, shall determine the feasibility and validity of additional project financing and approval of General Contractor and notify the Loan Applicant. Projects determined to be infeasible will be denied.

6.3 Application Steps
Upon completion of an approved feasibility report and cost estimate, Loan Applicant shall:
a) Submit a complete loan application to HEART. Loan application materials shall be developed by HEART
b) Execute an intent to commit to a ten-year affordability covenant on the ADU. c) Upload a signed feasibility report and project budget. d) HEART staff will review and provide pre-approval authorization, reserving available Loan funds for the individual project for a period of 90 days. e) During the 90-day Pre-Approval period, Loan Applicant shall secure additional financing, if needed, and obtain final project approval from HEART.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 27 4
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1 f) HEART shall conduct underwriting of the Loan Application. Underwriting shall include review of a title report for applicant’s property. The cost of the title report shall be included in the project cost and financing provided by HEART.

6.4 Review and Consideration of Applications
a) HEART shall manage the application process to select eligible Applicants pursuant to these Guidelines.
b) HEART shall submit copies of all application documents and form templates to the City prior to launching the Program.

END OF EXHIBIT A

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 28 4
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1 EXHIBIT B

FEE SCHEDULE
Foster City Affordable ADU Loan Program
This Exhibit B of the Agreement between HOUSING ENDOWMENT AND REGIONAL TRUST (HEART) OF SAN MATEO COUNTY (“Contractor”) and THE CITY OF FOSTER CITY (“City of Foster City”), dated __________________ shall be subject to the following fee schedule.

1.Fee Schedule. The total program funding shall be issued to the Contractor within 30 days of receipt of an invoice submitted by the Contractor to the City of Foster City.

Program Item Description Amount for
Term of
Contract*
Affordable ADU Loan Fund $1,100,000**
Contractor Fees $51,070
Loan Servicing Fees $2,240
Compliance Service Fees
$500 per lease-up for 8 loans = $4,000 for first year; $200 for annual recertification cost per loan for up to 8 loans for an additional 2 years
$7,200
Total Contractor Fees and Services $60,510
Total Program Funding $1,160,510
*The amounts shown are for a three (3)-year contract term and exclude any renewals. A renewal will exclude the loan fund and contractor fees, unless additional funding for additional loans to be issued is approved and appropriated by the City Council. A renewal will be for continuing compliance servicing and loan servicing only. ** Loan fund amount assumes four loans at $125,000 and four loans at $150,000 however, there is flexibility in the number of loans at each funding level, provided the total of all loans does not exceed $1,100,000.

2.Re-Use Fund. The Total Program Funding shall be deposited in a Re-Use Account within 30 days of receipt of funds. The Re-Use Fund that shall be established and managed by HEART for distribution of funds. Loan payments made by loan recipients shall be deposited into the Re-Use Account during the terms of the loans.

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 29 4
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1 3.Reimbursement of Re-Use Fund Upon Termination of Agreement. Upon termination of this Agreement if the Agreement is not subject to a renewal, and within 30 days following termination, the Re-Use Account shall be reimbursed in full to the City of Foster City, less any Contractor Fees, Loan Servicing Fees, or Compliance Service Fees due to the Contractor.

END OF EXHIBIT B

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City of Foster City Affordable ADU Loan Program Agreement 30 4
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1 EXHIBIT C

INSURANCE REQUIREMENTS
CONTRACTOR shall provide, in addition to the Certificates of Insurance, original Endorsement affecting the coverages specified in herein on the attached form. No substitute form will be accepted.

This is an Exhibit to, and made a part of and incorporated by reference to the Agreement dated Date of Agreement, by and between Consultant Name, hereinafter referred to as "Consultant”, and the City of Foster City, hereinafter referred to as "City", providing for professional services.

Upon request, Consultant shall supply proof that such person is an authorized representative thereof, and is authorized to bind the named underwriter(s) and their company to the coverage, limits and termination provisions shown thereon, Consultant shall promptly deliver to ITS a certificate of insurance, and all required endorsements, with respect to each renewal policy, as necessary to demonstrate the maintenance of the required insurance coverage for the term specified herein. Such certificates and endorsements shall be delivered to ITS prior to the expiration date of any policy and bear a notation evidencing payment of the premium thereof if so requested. Consultant shall immediately pay any deductibles and self-insured retentions under all required insurance policies upon the submission of any claim by Consultant or City as an additional insured.

1.1Insurance Requirements
☒ Commercial General Liability Insurance
Commercial General Liability Insurance including, but not limited to, Contractual Liability Insurance (specifically concerning the indemnity provisions of this Agreement with the City ), Products-Completed Operations Hazard, liability for slander, false arrest and invasion of privacy arising out of professional services rendered hereunder, Personal Injury (including bodily injury and death), and Property Damage for liability arising out of Consultant's performance of services under this Agreement. The Commercial General Liability insurance shall contain

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 31 4
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1 no exclusions or limitation for independent contractors working on the behalf of the named insured. Consultant shall maintain the Products-Completed Operations Hazard coverage for the longest period allowed by law following termination of this Agreement. The amount of said insurance coverage required by this Agreement shall be the policy limits, which shall be at least two million dollars ($2,000,000) each occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate. *Please note, the City will require a separate additional insured endorsement for the Commercial General Liability policy, listing the “City of Foster City, its Council members, officials, agents, officers, and employees”.
☒ Business Automobile Liability Insurance
Automobile Liability Insurance against claims of Personal Injury (including bodily injury and death) and Property Damage covering any vehicle and/or all owned, leased, hired and non-owned vehicles used in the performance of Services pursuant to this Agreement with coverage equal to the policy limits, which shall be at least two million dollars ($2,000,000) each occurrence. ☒ Workers' Compensation Insurance
Consultant shall submit written proof that Consultant is insured against liability for workers' compensation in accordance with the provisions of section 3700 of the California Labor Code. Consultant shall require any Subconsultants to provide workers' compensation for all of the Subconsultants' employees, unless the Subconsultants' employees are covered by the insurance afforded by Consultant.

If any class of employees engaged in work or services performed under this Agreement is not covered by California Labor Code section 3700, Consultant shall provide and/or require each Subconsultant to provide adequate insurance for the coverage of employees not otherwise covered. Consultant shall also maintain employer's liability insurance with limits of one million dollars ($1,000,000) for bodily injury or disease.
☒ Professional Liability Insurance
Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, all negligent acts, errors or omissions in connection with services to be provided under this Agreement, with no exclusion for claims of one insured against another insured, with coverage equal to the policy limits, which shall not be less than TWO MILLION DOLLARS ($2,000,000) per occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate.
□Installation Floater
Installation Floater, covering the work performed under this Contract, against all risks of direct physical loss. The policy shall cover the Contractor’s labor, materials and equipment, including materials and equipment in transit or away from the

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 32 4
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1 project site, to be installed in the existing structure(s). The coverage shall be written for an amount equal to the initial contract amount plus the value of any subsequent change orders, subject to a deductible of not more than [$10,000] payable by Contractor.
□ Cyber Liability Insurance
Cyber Liability Insurance, covering network risk and cyber liability (including coverage for unauthorized access, failure of security, breach of privacy perils, as well at notification costs and regulatory defense) in an amount of not less than $1,000,000. Such insurance shall be maintained in force at all times during the term of the Contract and for a period of two years thereafter for services completed during the term of the Contract.

1.2Self-Insured Retention
Any self-insured retentions in excess of $100,000 must be declared on the Certificate of insurance or other documentation provided to City and must be approved by the City Risk Manager.

1.3Claims-Made Basis Coverage
If any of the insurance coverages required under this Agreement is written on a claims- made basis, Consultant, at Consultant's option, shall either (i) maintain said coverage for at least five (5) years following the termination of this Agreement with coverage extending back to the effective date of this Agreement; (ii) purchase an extended reporting period of not less than five (5) years following the termination of this Agreement; or (iii) acquire a full prior acts provision on any renewal or replacement policy.

2.City as Additional Insured
On Consultant's Commercial General Liability and Automobile policies, the City, its Council members, officers, directors, agents, employees, and volunteers, shall be named as additional insured's, but only with respect to liability arising out of the activities of the named insured. Any endorsement shall be provided using one of the following three options: (i) on ISO form CG 20 10 1 1 85; or (ii) on ISO form CG 20 37 10 01 plus either ISO form CG 20 10 10 01 or CG 20 33 10 01; or (iii) on such other forms which provide coverage at least equal to or better than form CG 20 10 1 1 85.

3.Insurance terms and conditions:

3.1Cancellation of Insurance
The above stated insurance coverages required to be maintained by Consultant shall be maintained until the completion of all of Consultant's obligations under this Agreement

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City of Foster City Affordable ADU Loan Program Agreement 33 4
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1 except as otherwise indicated herein. Each insurance policy supplied by Consultant shall not be suspended, voided, cancelled or reduced in coverage or in limits except after ten (10) days written notice by Consultant in the case of non-payment of premiums, or thirty (30) days written notice in all other cases. This notice requirement does not waive the insurance requirements stated herein. Consultant shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits have been exhausted or upon insolvency of the insurer that issued the policy.

3.2All insurance shall be issued by a company or companies admitted to do business in California and listed in the current "Best's Key Rating Guide" publication with a minimum rating of A-; VII Any exception to these requirements must be approved by the City Risk Manager.

3.3If Consultant is, or becomes during the term of this Agreement, self-insured or a member of a self-insurance pool, Consultant shall provide coverage equivalent to the insurance coverages and endorsements required above. The City will not accept such coverage unless the City determines, in its sole discretion and by written acceptance, that the coverage proposed to be provided by Consultant is equivalent to the above-required coverages.

3.4For any claims related to the Agreement, the Consultant’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City , its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Consultant’s insurance and shall not contribute with it.

3.5Insurance coverages in the minimum amounts set forth herein shall not be construed to relieve Consultant for any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the City from taking such other actions as are available to it under any other provision of this Agreement or otherwise in law.

3.6Failure by Consultant to maintain all such insurance in effect at all times required by this Agreement shall be a material breach of this Agreement by Consultant. City, at its sole option, may terminate this Agreement and obtain damages from Consultant resulting from said breach. Alternatively, City may purchase such required insurance coverage, and without further notice to Consultant, City shall deduct from sums due to Consultant any premiums and associated costs advanced or paid by City for such insurance. If the balance of monies obligated to Consultant pursuant to this Agreement are insufficient to reimburse City for the premiums and any associated costs, Consultant agrees to reimburse City for the premiums and pay for all costs associated with the purchase of said insurance. Any failure by City to take this alternative action shall not relieve Consultant of its obligation to obtain and maintain the insurance coverages required by this Agreement.

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City of Foster City Affordable ADU Loan Program Agreement 34 4
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1 3.7Should any of the required insurance (other than errors and omissions insurance) be provided under a form of coverage that includes a general annual aggregate limit or provides that claims investigation or legal defenses costs be included in such general aggregate limit, such general annual aggregate limit shall be double the occurrence or claims limit specified above.

Consultant's fees under this Agreement (and the fee of its subconsultants under subconsultant agreements) shall be reduced by the amount of insurance premiums that may be avoided by Consultant and its subconsultants by virtue of the City's obtaining the project-specific insurance, wrap-up insurance or administering an OCIP, and the exclusion of this project from coverage of Consultant's and subconsultants policies.

Construction Manager and its subconsultants shall afford City access to their books and records and cooperate with City in verifying the amount of savings realized.

ATTACHED

1. Insurance Coverage Form

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City Affordable ADU Loan Program Agreement 35 4
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1 Attachment 1 to Exhibit C
Insurance coverage Form
This INSURANCE COVERAGE FORM modifies or documents insurance provided under the following:

Named Insured: ____________________________________
Effective Work Date(s): ______________________________
Description of Work/Locations/Vehicles:
__________________________________________________________________________________ ADDITIONAL INSURED: City of Foster City (CITY)
610 Foster City Boulevard, Foster City, CA 94404
Attention: _________________________________
Contract Administrator
Endorsement and Certificates of Insurance Required
The Additional Insured, its elected or appointed officers, officials, employees and volunteers are included as insureds with regard to damages and defense of claims arising from: (Check all that apply)
Insurer Policy No.

General Liability: (a) activities performed by or on behalf of the Named Insured, (b) products and completed operations of the Named Insured, (c) premises owned, leased occupied or used by the Named Insured, and/or (d) permits issued for operations performed by the Named Insured. {Note: MEETS OR EXCEEDS ISO Form # CG 20 10 11 85}
Auto Liability: the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Named Insured, regardless of whether liability is attributable to the Named Insured or a combination of the Named Insured and the Additional Insured, its elected or appointed officers, officials, employees or volunteers.

Other: [Cyber Liability, Installation Floater, etc.]
Certificates of Insurance Required (no endorsement needed) (Check all that apply)
Insurer Policy No.

Workers Compensation: work performed by employees of the Named Insured while those employees are engaged in work under the simultaneous directions and control of the Named Insured and the Additional Insured.

Professional Liability: Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, all negligent acts, errors or omissions in connection with services to be provided under this Agreement, with no exclusion for claims of one insured against another insured.

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City of Foster City Affordable ADU Loan Program Agreement 36 4
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1 PRIMARY/NON-CONTRIBUTORY: This insurance is primary and is not additional to or contributing with any other insurance carried by or for the benefit of Additional Insureds.

Nothing herein contained shall vary, alter or extend any provision or condition of the Policy other than as above stated.

SIGNATURE OF INSURER OR AUTHORIZED REPRESENTATIVE OF THE INSURER I, ______________________________________________________________(print/type name), warrant that I have authority to bind the above-named insurance company and by my signature hereon do so bind this company.
_________________________________________________
SIGNATURE OF AUTHORIZED REPRESENTATIVE (original signature required) NAME: ARMANDO SANCHEZ, EXECUTIVE DIRECTOR
ORGANIZATION: HEART OF SAN MATEO COUNTY
ADDRESS: 2905 S. EL CAMINO REAL, SAN MATEO, CA 94303
TELEPHONE: (650) 204-0958 DATE ISSUED: ___________________________

END OF EXHIBIT C

6.5 Attachment 2 - Exhibit 1A - Agreement with HEART of San Mateo County

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City of Foster City
RFP Title: Below Market Rate Accessory Dwelling
Unit Loan Program
“Foster City Affordable ADU Program”
Loan Administration Only
Submission Date: Feb 20, 2026
Attn:

Nori Jabba, City of Foster City
Community Development
610 E. Hillsdale Blvd.

Foster City, CA 94404
650-286-3230
[email protected]
Firm Name: HEART of San Mateo County
Principle Contact Person: Tim Davis, Director,
Housing Consulting Services
Mailing Address: 2905 S. El Camino Real,
San Mateo, CA 94303
Phone Number: (650) 204-0958
Email Address: [email protected]

6.5 Attachment 3 - Proposal from HEART

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B
Cover Letter
Company Background and Experience
Project Team and Key Personnel
Conflict of Interest
C
D
E
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ A _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 3
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 5 Acknowledgement of Business License
Requirement
Acknowledgment of Attachment A, Agreement
F
G
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 6
_ _ _ _ _ _ _ _ _ 6
Acknowledgement of Attachment B, Program
Guidelines
H
_ _ _ _ _ _ _ _ _ _ _ 6
Acknowledgement of Additional Requirements
I
_ _ _ _ _ _ _ _ 6
Scope of Work
J _________________________________________7
Cost Proposal
K
Contract Exceptions
L
_________________________________________12
__________________________________13
Appendix
M __________________________________14

6.5 Attachment 3 - Proposal from HEART

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February 18, 2026
Nori Jabba, City of Foster City
Community Development
610 E. Hillsdale Blvd.

Foster City, CA 94404
RE: Proposal Submission – Below Market Rate Accessory Dwelling Unit Loan Program “Foster City Affordable ADU Program”
Dear Nori,
The Housing Endowment and Regional Trust of San Mateo County (“HEART”) is pleased to submit this response to the Request for Proposals (“RFP”) for the management of Foster City’s Affordable ADU Program. HEART is interested in supporting the City of Foster City in providing “Loan Administration Only” program, Program Type A.

HEART is a 501(c)(3) and Joint Powers Authority, created by the County of San Mateo and the county’s 20 municipal jurisdictions. HEART is located at 2905 S El Camino Real San Mateo, CA 94403, where all services will be performed.

Founded over 20 years ago, HEART has been chiefly known for its role as lender to 100% affordable projects within San Mateo County. In late 2023, HEART created the Housing Consulting Services Program (“HCS”), which contracts with local jurisdictions.

Under the HCS program, HEART is contracted to eight cities under a retainer model, and we are now expanding some of our services to other Cities, including loan administration. Our relevant experience includes:

Working with the County of San Mateo to launch and manage the Mobile Home Loan Program. In this program we administer loan amounts of up to $100,000. We drafted and implemented eligibility and underwriting terms and conducted community outreach that resulted in 40+ inquiries and the installation of 18 new units in a span of a year. We provided extensive technical assistance as they selected a vendor for their new home, and HEART staff spent a significant number of hours working with park owners to ensure that the new homes met park specifications. 2905 S. El Camino Real San Mateo, CA 94303 | (650) 204-0958. | www.heartofsmc.org A

6.5 Attachment 3 - Proposal from HEART

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Working with the City of Brisbane to oversee a HUD funded home repair program.

This program provides grants of up to $25,000 each for 20 low-income homeowners to make health and safety repairs and/or energy upgrades to their homes. While Good City served as the direct contact for homeowners, HEART reviewed eligibility and workplans, and as Good City’s contract expires, HEART will be taking on the efforts to work with homeowners to complete the repairs and close out the program.

Worked with 21 Elements and its Housing Managers working group to create a model BMR Manual that includes best practices for ADU’s, which we are now implementing with our contracted cities.

HEART is building its capacity to become a leader in the Bay Area on BMR unit management. In some cities, we are taking on a role that has been held by more established firms, working with developers on initial sales and lease ups of units, eligibility determinations, and annual recertifications. To manage this growth, HEART is acquiring the software and web capabilities needed to streamline the application and income certification process for BMR applicants and property managers. This technology will allow us to perform credit checks and income verifications. which we will also use for loan administration.

HEART is committed to assisting its member jurisdictions to fulfill their housing goals and create effective housing policies and programs. As such, HEART Is well positioned to be a reliable partner for the City of Foster City, as it launches this affordable ADU program.

Sincerely,
Armando Sanchez
Executive Director
2905 S. El Camino Real San Mateo, CA 94303 | (650) 204-0958. | www.heartofsmc.org B

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HEART is a 501(c)(3) that was founded in 2003 as a Joint Powers Authority and public/private partnership among the cities in San Mateo County, the County, and the business, nonprofit, education, and labor communities to create more affordable housing in San Mateo County. To date, HEART has invested over $27 million to fund 1,632 affordable homes. To operate this loan program, HEART staff maintain expertise in affordable housing lending.

HEART’s ADU, Housing Consulting Services, and Mobile Home Loan Program are all relevant to work Foster City is hoping to accomplish through the Affordable ADU program. In 2018, through an award for climate protection funding from the Bay Area Air Quality Management District, HEART launched its ADU Program (“GLADUR”).

Through a 2-year intensive process, including 4 Open Houses, a specialized Ad Hoc Committee made up of key public and industry leaders, and a robust RFP process, HEART partnered with Open Scope Studios to create 4 green, all-electric, ADU designs that could be downloaded by the public at no cost. The goal was to remove the early obstacles of creating designs from scratch, which cost up to $30,000 and took several months, which would not only incentivize the development of green, all-electric ADUs.

In addition, HEART created a comprehensive online, green ADU handbook that provides key information and resources, and HEART partnered with local jurisdictions to pre-review the designs, to streamline the permitting process.

In late 2023, HEART launched its Housing Consulting Services (“HCS”) program, with the mission of providing housing policy and program services for cities in San Mateo County. Now entering its third year, the program has ongoing contracts with eight cities and is ready to take on work for other San Mateo County communities. HCS provides a full range of assistance to cities in their efforts to implement their Housing Elements and address the housing needs in their community. As part of this work, HCS is building its capacity to manage BMR units, from entitlement through to marketing, lease up/sale, and monitoring.

In cooperation with the County of San Mateo, HEART launched the Mobile Home Loan Program in late 2024 and has now completed 18 loans under this program.

C o m p a n y B a c k g r o u n d a n d E x p e r i e n c e C
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For the Mobile Home Loan Program:

Nila Kim
Housing & Community Development Specialist
County of San Mateo Department of Housing
Office: 650.802.5002
[email protected]

For the Brisbane Home Repair Program & Housing
Consulting Services:

Julia Ayres
Acting Director, Community Development
City of Brisbane
Direct: (415) 508-2129 | Cell: (415) 519-0165
Email: [email protected]

For Housing Consulting Services:

Karen Camacho
Housing & Economic Development Manager
Phone (650) 853-3195
Email [email protected]
References
The following references are provided because the following individuals are most familiar with HEART’s efforts, like the work being proposed here.

C o m p a n y B a c k g r o u n d a n d E x p e r i e n c e :

R e f e r e n c e s
C
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The HEART Team
HEART’s project team brings together seasoned leadership, experienced program managers, and dedicated administrative support to ensure high-quality, compliant, and responsive BMR program administration for the City of Foster City.

Armando Sanchez, Executive Director, HEART of SMC
Armando joined HEART in 2016. He is a recognized housing professional with over 30 years of experience in real estate development, finance, management, and marketing. His background includes extensive consulting for government and non-profit agencies in the housing field, including BMR Administration for cities across California. He holds a BA from the University of California, Berkeley, and an MBA from the University of Washington, Seattle.

Project Role: Armando will provide Contract-Level Oversight, serving as HEART’s authorized representative for contractual decisions. He will be available to resolve high-level issues, support coordination with City leadership, and ensure that the services delivered meet the City’s expectations and contractual requirements.

Tim Davis, Director of Housing Consultant Services, HEART of SMC Tim joined HEART in 2023, having recently moved to the Bay Area from Boston, Massachusetts, where he served as the Deputy Director for Policy Development & Research at the City of Boston Mayor’s Office of Housing.

With over 30 years of experience working in housing across a range of organizations including non-profits, local government, a large community foundation, and as a consultant, Tim has been engaged in a range of programs and issues including homebuyer initiatives, affordable housing development, inclusionary housing requirements, affirmatively furthering fair housing, and housing policy development and implementation. Tim holds a BA from Macalester College (St. Paul, MN), and an MPA from the Harvard Kennedy School of Government (Cambridge, MA). Tim currently oversees all of HEART’s housing consulting services and BMR administration efforts.

Project Role: Tim will provide program oversight and policy direction while supervising the Program Manager and reviewing complex eligibility or compliance cases. Tim will ensure that all ADUs comply with Foster City Municipal Code Chapter 17.78 and the City’s Below Market Rate Housing Program Requirements.
3 P r o j e c t T e a m a n d K e y P e r s o n n e l D

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Boris Vatkin, Director, Housing Programs
Boris joined HEART in 2017 to help manage and grow HEART’s housing programs. Boris currently directs all of HEART’s housing programs. He also works with the Executive Director to develop the organization’s corporate and program strategy and in the development of long-range programs, including the Mobile Home Loan Program. He has a background in real estate law and has worked in residential and commercial real estate, including for a Fortune 500 company. He holds a BS from the University of California, Berkeley, and a JD from Brooklyn Law School. Relevant to this RFP, Boris has overseen HEART’s efforts to provide owners with free ADU construction plans and is currently overseeing the Mobile Home Loan Program.

Project Role: Given Boris’s prior experience with HEART’s ADU program, as well as the leadership he provides to the Mobile Home Loan Program, Boris will advise on the terms of the ADU loan program, as well as where necessary during the loan underwriting process.

Alex Waggoner, Project Manager of Housing Consultant Services, HEART of SMC
Alex joined HEART in late 2024. Alex is an experienced housing policy professional, working at the Oakland Housing Authority, Los Angeles City Council, and many other government agencies and nonprofits. During his time with the Oakland Housing Authority, Alex worked on income certifications for a variety of different HUD programs, including HCVs, PBVs, and other housing related programs. He also worked with property managers to certify annual occupancy and eligibility reports and ensure adequate record keeping and resident satisfaction. Alex has worked on various topics including policy development and implementation, operations, language services, and data analysis. Alex holds a BA and master's in public administration from the University of Southern California. Relevant to this RFP, Alex currently oversees the day-to-day activities of HEART’s Mobile Home Loan Program.

Project Role: Alex will lead HEART’s efforts in this program, and will complete many of the same tasks that he had undertaken for the Mobile Home Loan Program, including outreach efforts, processing loan applications (including determining eligibility and underwriting the loans), managing loan closings, providing assistance to borrowers during the contracting and construction/installation process, and overseeing loan repayments.
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C o n f l i c t o f I n t e r e s t
No Conflict of Interest
HEART presently has no interest and will not acquire any interest—direct or indirect, financial or otherwise—that would conflict in any way with the performance of the services described in this Request for Proposals (RFP) and will not employ any person having such an interest.

HEART agrees to advise the City immediately if any conflict arises. HEART further understands that the agency and their staff must abide by all applicable statutes, rules, and regulations regarding conflicts of interest, including the Political Reform Act, Government Code Section 1090, and all implementing regulations, including Title 2, Division 6, Section 18700 of the California Code of Regulations.

Enclosed are the most recent annual report and audited financial statements.

E
5 A c k n o w l e d g e m e n t o f B u s i n e s s L i c e n s e R e q u i r e m e n t
HEART will maintain a Foster City business license for the term of the contract.

F
A c k n o w l e d g m e n t o f A t t a c h m e n t A , A g r e e m e n t HEART hereby acknowledges and agrees that it has reviewed the City’s standard Professional Services Agreement, including Exhibits A, B, and C. HEART is suggesting the following changes to the insurance requirements:

Pg. 24: Under General Liability Insurance, HEART has insurance of $2 million per occurrence and $4 million aggregate, which is higher than the $5 million required.

Pg. 25: HEART seeks a lower level of professional liability insurance, at $2 million (down from $5 million).

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6 After reviewing the program guidelines, HEART, if selected, would like to address the following in the program guidelines.

1. Homeowner Applicant Qualifications
The program allows an income eligible homeowner to occupy the ADU. Is the intent here that the owner of the entire property would be allowed to live in the ADU and rent out their main house? This should be clarified. (pg 35).

AB 1033 allows a city to opt into allowing an owner of a home and ADU to create a two-unit condominium and sell the ADU, as a condominium unit. We assume that this is not an intended use of the program. If so, this prohibition should be included. (ADD TO PAGE 35)

3. Project Requirements (PG 39)
e) Applicant/Homeowner Obligations
It appears the landlord is responsible for certifying/recertifying tenant eligibility.

Given that these are not traditional landlords, HEART recommends that the City or its designee (which could be HEART) will take on this task.

Application and Selection Process (PG 41)

2. Pre-Loan Application Steps
As HEART is taking on the loan administration aspects of the program, and not the construction aspects, HEART will need to discuss with the City and any additional partners what HEART’s role will be in assessing feasibility of a particular site for an ADU, especially if the program is one in which the homeowner, on their own, is selecting an ADU model and contractor/vendor.

A c k n o w l e d g e m e n t o f A t t a c h m e n t B , P r o g r a m G u i d e l i n e s
H
A c k n o w l e d g e m e n t o f A d d i t i o n a l R e q u i r e m e n t s HEART acknowledges the following requirements and will:

1.Maintain a filing system that meets the funding sources’ requirements.

2.Participate in any program reviews or audits.

3.Maintain accounting of available project funds and process clients based on funding availability.

4.Provide data for any required quarterly and annual funding reports.

5.Manage program workflow to ensure the timely completion of work.

6.Confer with the City to review any proposed revisions of program guidelines as necessary.

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HEART will fulfill the scope of work for tasks 1-5, according to the schedule below. It is anticipated that all guidelines and documentation will be completed before the end of the second quarter. Outreach and program marketing would begin in the last part of the second quarter. While the initial applicants may be reviewed as early as the third quarter, actual loan closings may not occur until year two, given the time it will take for applicants to secure a contractor and permits.

S c o p e o f W o r k
J
7 J e s u s a n d G r i s e l d a L o p e z s t a n d i n f r o n t o f t h e i r n e w m o b i l e h o m e , w h i c h w a s r e p l a c e d u s i n g a s u b s i d i z e d l o a n f r o m t h e H E A R T o f S a n M a t e o C o u n t y ’ s M o b i l e H o m e L o a n P r o g r a m . ( P h o t o c o u r t e s y o f H E A R T o f S a n M a t e o C o u n t y ) a s s e e n i n T h e M e r c u r y N e w s : h t t p s : / / w w w . m e r c u r y n e w s . c o m / 2 0 2 5 / 1 2 / 0 4 / s u b s i d i z e d - m o b i l e - h o m e - l o a n s - s a n - m a t e o - c o u n t y /

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YEAR 1
Task Quarter 1 Quarter 2 Quarter 3 Quarter 4
Project Initiation
and Project
Management
Complete kick-off
meeting;
Review objectives,
roles,
communication
procedures, and
reporting
expectations.

Refine project
timeline
Task completed
Program
Administration
and
Homeowner
Intake
Develop loan
applications.

Draft outreach
materials
Finalize outreach
materials

Begin program
outreach
Work with initial
applicants to
complete
applications
Continue work with
applicants
Loan Origination,
Underwriting and
Servicing
Draft loan
documents,
underwriting
procedures, and
criteria,

Identify private
financing options

Evaluate program
guidelines
Finalize loan
documents,
underwriting
procedures, and
criteria.

Finalize program
guidelines

Establish loan re-
use account
Underwrite initial
applications

Make initial loan
commitments
Continue
underwriting and
loan commitments
Affordability
Compliance and
Reporting
Draft affordable
housing
agreements
Finalize
affordable
housing
agreements
Reporting and
Records
Management
Establish systems
for tracking loans
and affordable
housing
agreements
Prepare year-end
report on progress
and status of any
loan commitments
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Task YEAR 2 YEAR 3
Program Administration
and Homeowner Intake
Ongoing outreach

Check in at end of year two on
program progress/need for
changes
Ongoing outreach

If changes are proposed, roll
out changes
Loan Origination,
Underwriting and Servicing
Continue underwriting

Close first loan (early in 2nd year)

Begin servicing of first loan

As part of year two check in,
examine and, if needed, change
loan terms
Continue underwriting,
closings, and servicing of loans

Rollout any changes in
underwriting
Affordability Compliance
and Reporting
Finalize first tenant income
certifications
Ongoing: income certifications
and recertifications
Reporting and Records
Management
Prepare quarterly reports for City
on spending and fund
availability, semi-annual reports
on more general activities.

Prepare quarterly reports for
City on spending and fund
availability, semi-annual reports
on more general activities.

During years two and three, the work will focus on maintaining and overseeing the program, while also providing opportunities for HEART and the City to check in on whether changes should be made to the program.
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The individual tasks are outlined in more detail below.

Task 1: Project Initiation and Project Management
HEART will undertake the scope of work related to Task 1, which is outlined in the RFP as:

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.

Task 2: Program Administration and Homeowner Intake
HEART will create a process for outreach, intake, and selection of homeowners based on City guidelines and relevant state and federal law to create an efficient, equitable, and responsive process. HEART will draft clear process documents for intake, selection, and loan signing, as well as an outreach strategy with sample documents. The Mobile Home Loan Program is the model we will use, and which required regular communication with the County of San Mateo, while also working closely with vendors monitoring the installation of new units housing units.

Additionally, HEART has contracted with RentManager as a secure database for income verification, loan documents, and communication with applicants.

Task 3: Loan Origination, Underwriting, and Servicing

The loan sizes anticipated under this program (up to $150,000) are similar to those HEART underwrote for the Mobile Home Loan Program (MHLP). As with the MHLP, HEART determined eligibility and underwrote the loan for each participant. In the case of this ADU loan program, it is understood that determining eligibility will focus on:

The type of property and suitability for the construction of an ADU, Current monetary encumbrances on the property,
The use of funds,
The type, size, and design of ADU proposed, and
The owner’s commitment to lease the ADU to a low-income tenant.

HEART staff are familiar with the legal documents required to secure the loan on the property and place a 10-year rent restriction on the ADU.

HEART will manage loan repayments made to the re-use account and provide reports to the City no less than annually on loan payments and the re-use account balance. HEART, as a housing endowment trust, is well positioned to manage these funds, as it has done for the funds it loans out to affordable development projects. 1 0

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Task 4: Affordability Compliance and Reporting
HEART Through the Housing Consulting Services and Mobile Home Loan Programs, HEART has gained experience certifying program eligibility and monitoring annual compliance, for both homeowner and rental units, as well as for homeowners in the Brisbane Home Repair Program and for participants in the Mobile Home Loan Program.

Based on this experience, HEART is launching new web-based systems which will be used to track both homeowners and their ADU tenants, securely store certification and program documentation, and create compliance reports, as needed. HEART will report no less than quarterly on the status of loans, ADU construction status, and regular monitoring. HEART will contact the City promptly to address any program or compliance concerns.

Task 5: Reporting and Records Management
HEART has a secure and reliable records management system through RentManager, which has separate records for each homeowner and their tenants, where we will store and retain all relevant records for easy access as necessary. HEART will meet with staff quarterly to update on the status of the program, discuss progress, and any issues.

Further, HEART will submit an annual report with relevant details, challenges, and successes.
1 1

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C o s t P r o p o s a l
K
1 2
Expense Cost Notes
Homeowner Loans $1,100,000 Assumes four loans at $125,000 and four loans at $150,000
Contractor Fees
Marketing
Vendor Relations (if
needed)
Applicant Outreach/
Assistance
Application Review
Pre-Closing
Closing
Installation/Inspections
Meetings and Reports
Contingency
Total 370 Hours $51,070
25 Hours $3,225
60 hours $7,740

70 Hours $9,030

80 Hours $10,320
30 Hours $3,870
30 Hours $3,870
50 Hours $6,450
25 Hours $3,225
7% $3,340
Include the applicant selection and
approval process, preparing loan
documents, underwriting and
closing loans, and managing loan
disbursements during the
construction process.

Loan Servicing Fees
Total: $2,240
Loan Set Up: $440
Loan Monitoring (est):

Up to $1,800
Loan monitoring only needed for
non-compliant loans
Affordable Monitoring
Services
Total: $4,800
$500 per lease up (8) $4,000
$200 – recerts (4) $800
Assumes HEART will complete
tenant certifications and
recertifications
TOTAL: $1,158,110 Total, inclusive of homeowner
loans

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Contract Exceptions
Upon review of the Professional Service Agreement, HEART is suggesting the following changes to the insurance requirements:

Pg. 24: Under General Liability Insurance, HEART has insurance of $2 million per occurrence and $4 million aggregate, which is higher than the $5 million required.

Pg. 25: HEART seeks a lower level of professional liability insurance, at $2 million (down from $5 million).

After reviewing the program guidelines, HEART, if selected, would like to address the following in the program guidelines.

AB 1033 allows a city to opt into allowing an owner of a home and ADU to create a two-unit condominium and sell the ADU, as a condominium unit.

We assume that this is not an intended use of the program. If so, this prohibition should be included. (ADD TO PAGE 35)

3. Project Requirements (PG 39)
e) Applicant/Homeowner Obligations
It appears the landlord is responsible for certifying/recertifying tenant eligibility. Given that these are not traditional landlords, HEART recommends that the City or its designee (which could be HEART) will take on this task.

Application and Selection Process (PG 41)

C o n t r a c t E x c e p t i o n s
L
1 3

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2 EXHIBIT C

SAMPLE INSURANCE REQUIREMENTS

CONTRACTOR shall provide, in addition to the Ce rtificates of Insurance, original Endorsement affecting the coverages specified in herein on the attached form. No substitute form will be accepted.

This is an Exhibit to, and made a part of and incorporated by reference to the Agreement dated Date of Agreement, by and between Consultant Name , hereinafter referred to as " Consultant”, and the City of Foster City, hereinafter referred to as " City", providing for professional services.

1. Consultant's Duty to Show Proof of Insurance. Consultant, in order to protect City and its Council members, officials, agents, officers, and employees against all claims and liability for death, injury, loss and damage as a result of Consultant's acts, errors, or omissions in connection with the performance of Consultant's obligat ions, as required in this Agreement, shall secure and maintain insurance as described below. Co nsultant shall not perform any work under this Agreement until Consultant has obtained all insurance required unde r this section and the required certificates of insurance and all required endorsements have been filed with the City's authorized insurance representative, insurance Tracking Services Inc. (ITS ). Receipt of evidence of insurance that does not comply with all applicable insurance requirements shall not constitute a waiver of the insurance requirements set forth herein. The required do cuments must be signed by the authorized representative of the insurance company shown on the certificate. Upon re quest, Consultant shall supply proof that such person is an authorized repr esentative thereof, and is authorized to bind the named underwriter(s) and their company to the co verage, limits and termin ation provisions shown thereon, Consultant shall prompt ly deliver to ITS a certificate of insurance, and all required endorsements, with respect to each renewal policy, as necessary to demonstrate the maintenance of the required insurance coverage for the term sp ecified herein. Such certificates and endorsements shall be delivered to ITS prior to the expiration da te of any policy and bear a notation evidencing payment of the premium thereof if so requested. Consultant shall immediately pay any deductibles and self-insured retentions under all required in surance policies upon the submission of any claim by Consultant or City as an additional insured.

1.1 Insurance Requirements

Commercial General Liability Insurance

Commercial General Liability Insurance including, but not limited to, Contractual Liability Insurance (specifically concerning the indemn ity provisions of this Agreement with the City ), Products-Completed Operations Haza rd, liability for slander, false arrest and invasion of privacy arising out of professi onal services rendere d hereunder, Personal Injury (including bodily injury and death), and Property Damage for liability arising out of Consultant's performance of services under this Agreement. The Commercial General Liability insurance shall contain no exclusions or limitation for independent contractors working on the behalf of the named insured. Consultant shall ma intain the Products- Completed Operations Hazard coverage for the longest period allowed by law following

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3 termination of this Agreement. The amount of said insurance coverage required by this Agreement shall be the policy limits, which shall be at least two million dollars ($2,000,000) each occurrence and fourfive million dollars ($45,000,000) aggregate.

*Please note, the City will require a separate additional insured endorsement for the Commercial General Liability policy, listing the “City of Foster City, its Council members, officials, agents, officers, and employees”.

☒ Business Automobile Liability Insurance

Automobile Liability Insurance ag ainst claims of Personal Inju ry (including bodily injury and death) and Property Damage covering any vehicle and/or all owned, leased, hired and non-owned vehicles used in the performance of Services pursuant to this Agreement with coverage equal to the policy limits, which shall be at least two million dollars ($2,000,000) each occurrence.

☒ Workers' Compensation Insurance

Consultant shall submit written proof that Consultant is insured against liability for workers' compensation in accordance with th e provisions of section 3700 of the California Labor Code. Consultant shall require an y Subconsultants to provide workers' compensation for all of the Subconsultan ts' employees, unless the Subconsultants' employees are covered by the insurance afforded by Consultant. If any class of employees engaged in work or services performed under this Agreement is not covered by California Labor Code section 3700, Consultant shall prov ide and/or require each Subconsultant to provide adequate insurance for the covera ge of employees not otherwise covered.

Consultant shall also maintain employer's liability insu rance with limits of one million dollars ($1,000,000) for bodily injury or disease.

☒ Professional Liability Insurance

Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, all negligent ac ts, errors or omissions in co nnection with services to be provided under this Agreement, with no exclusion for claims of one insured against another insured, with coverage equal to the poli cy limits, which shall not be less than twofive million dollars ($ 52,000,000) per occurrence and twofive million dollars ($ 52,000,000) aggregate.

☒ Installation Floater

Installation Floater, covering the work perf ormed under this Contract , against all risks of direct physical loss. The policy shall cover the Contractor’s labor, materials and equipment, including materials and equipment in transit or away from the project site, to be installed in the existing structure(s). The coverage shall be writte n for an amount equal to the initial contract amount plus the value of any subsequent change orders, subject to

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4 a deductible of not more than [$10,000] payable by Contractor.

□ Cyber Liability Insurance

Cyber Liability Insurance, covering network risk and cyber liability (including coverage for unauthorized access, failure of security, breach of privacy perils, as well at notification costs and regulatory defense) in an amount of not less than $1,000,000. Such insurance shall be maintained in force at all times during the term of the Contract and for a period of two years thereafter for services comple ted during the term of the Contract.

1.2 Self-Insured Retention

Any self-insured retentions in excess of $100 ,000 must be declared on the Certificate of insurance or other docume ntation provided to City and must be approved by the City Risk Manager.

1.3 Claims-Made Basis Coverage

If any of the insurance coverages required under this Agreement is written on a claims-made basis, Consultant, at Consultant's option, shall either (i) maintain said coverage for at least five (5) years following the termination of this Agreement with coverage extending back to the effective date of this Agreement; (ii) purchase an extended reporting period of not less than five (5) years following the term ination of this Agreement; or (iii) acquire a full prior acts provision on any renewal or replacement policy.

2. City as Additional Insured

On Consultant's Commercial General Liability a nd Automobile policies, the City, its Council members, officers, directors, agents, empl oyees, and volunteers , shall be named as additional insured's, but only with respect to liability arising out of the activities of the named insured. Any endorsement shall be provided using one of the following three options:
(i) on ISO form CG 20 10 1 1 85; or (ii) on IS O form CG 20 37 10 01 plus either ISO form CG 20 10 10 01 or CG 20 33 10 01; or (iii) on such other forms which provide coverage at least equal to or better than form CG 20 10 1 1 85.

3. Insurance terms and conditions:

3.1 Cancellation of Insurance

The above stated insurance coverages required to be maintained by Consultant shall be maintained until the completion of all of Co nsultant's obligations under this Agreement except as otherwise indicated herein. Each in surance policy supplied by Consultant shall not be suspended, voided, cancelled or reduced in coverage or in limits except after ten (10) days written notice by Consultant in the case of non-payment of premiums, or thirty (30) days written notice in all other ca ses. This notice requirement does not waive the insurance

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5 requirements stated herein. Consultant shall immediately obtain replacement coverage for any insurance policy that is terminated, cancel ed, non-renewed, or whose policy limits have been exhausted or upon insolvency of the insurer that issued the policy.

3.2 All insurance shall be issued by a company or companies admitted to do business in California and listed in the current "Best's Ke y Rating Guide" publication with a minimum rating of A-; VII Any exception to these requi rements must be approv ed by the City Risk Manager.

3.3 If Consultant is, or becomes during the te rm of this Agreement, self-insured or a member of a self-insurance pool, Consultant shall provide coverage equivalent to the insurance coverages and endorsements required above. The City will not accept such coverage unless the City determines, in its sole discretion and by written acceptance, that t h e c o v e r a g e p r o p o s e d t o b e p r o v i d e d b y C o n sultant is equivalent to the above-required coverages.

3.4 For any claims related to the Agreement, the Consultant’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City , its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Consultant’s insurance and shall not contribute with it.

3.5 Insurance coverages in the minimum amounts set forth herein shall not be construed to relieve Consultant for any liability, whether wi thin, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the City from taking such other ac tions as are available to it under any other provision of this Agreement or otherwise in law.

3.6 Failure by Consultant to maintain all such insurance in effect at all times required by this Agreement shall be a material breach of th is Agreement by Consulta nt. City, at its sole option, may terminate this Agreement and obtain damages from Consultant resulting from said breach. Alternatively, City may purchase such required insurance coverage, and without further notice to Consultant, City shall deduc t from sums due to Consultant any premiums and associated costs advanced or paid by City for such insurance. If the balance of monies obligated to Consultant pursuant to this Agreement are insufficient to reimburse City for the premiums and any associated co sts, Consultant agrees to reimburse City for the premiums and pay for all costs associated with the purchase of said insurance. Any failure by City to take this alternative action shall not relieve Consultant of its obligation to obtain and maintain the insurance coverages requ ired by this Agreement.

3.7 Should any of the required insurance (other than errors and omis sions insurance) be provided under a form of coverage that includes a general annual aggregate limit or provides that claims investigation or legal defenses co sts be included in such general aggregate limit,

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6 such general annual aggregate limit shall be double the occurrence or claims limit specified above.

3.8 City may (but is under no obligation to) se cure project-specific insurance, wrap-up insurance, or administer an owner controlled insurance program ("OCIP"), in which case Consultant and its subconsultan ts shall communicate this fact to their insurance carriers and request that the risk of this project be excluded from their practice policies. Consultant's fees under this Agreement (and the fee of its subconsultants under subconsultant agreements) shall be reduced by the amount of insurance premiums that may be avoided by Consultant and its subconsultants by virtue of the City's obtaining the project-specific insurance, wrap-up insurance or administering an OCIP, and the exclusion of this project from coverage of Consultant's and subconsultants policies. Construction Manager and its subconsultants shall afford City access to their books and records and cooperate with City in verifying the amount of savings realized.

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7 DRAFT PROGRAM GUIDELINES

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8 CITY OF FOSTER City of Foster City

BELOW MARKET RATE ACCESSORY DWELLING UNIT LOAN PROGRAM
“FOSTER CITY AFFORDABLE ADU PROGRAM”

DRAFT PROGRAM AND LOAN UNDERWRITING GUIDELINES

PROGRAM SUMMARY
The City of Foster City’s (“City”) Below Market Rate Accessory Dwelling Unit Loan Program, known as the Affordable ADU Program (“Program”) provides financial incentives for Foster City Homeowners to build an affordable Accessory Dwelling Unit on their property if they agree to rent the ADU at below market rates to lower income households for a period of 10 years.1

The City will enter into an agreement with a third-party contractor (“Contractor”) pursuant to which the City will provide a portion of financing for a minimum of eight (8) ADU projects at no interest to the homeowner for eligible projects within Foster City. E ligible homeowners will be selected on a first-come, first-served basis.

The Contractor will serve in one of the following roles:

A. Provide and manage financing only – homeowners find their own ADU general contractor/provider (“Program A”)
B. Contractor will serve as both the general contractor for custom-built ADUs and provide and manager of financing of the ADUs for the homeowners (“Program B”), or C. Contractor will serve as the seller for pre-manufactured or prefabricated ADUs, manager of installation, and manager of the financing of the ADUs for the home owners (“Program C”).

If Contractor provides both management of financ ing and serving as the general contractor for the ADU project, Contractor may construct custom-built or pre-manufactured ADUs through its sales division or general contracting division or have or will have an agreement with an ADU builder or manufacturer to construct/install ADUs.

Eligible projects include single story detached or garage conversion accessory dwelling units (ADUs) on the homeowner’s property purchased through the Contractor. Junior (inter ior) ADUs are not eligible for the program at this time.

Through this Program, the City provides funding to the Contractor, subject to oversight provisions and other terms and conditions specified in the Agreement, that the Contractor will then use to issue no-interest interest loans for terms up to 20 years for up to $125,000 at no interest to Foster City Homeowners Figure 1. Example of a pre-
manufactured ADU for illustrative
purposes only
toward the cost of building/installing the ADU. The City financing incentive increases to $150,000 if the Homeowner agrees to rent their ADU with a preference for those with special needs (as defined in the

1 See program rules. ADU may be rented to Homeowner’s family member(s) or may be owner-occupied provided the occupants of the ADU are income qualified. Lower income is defined as earning less than 80% of Area Median Income.

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City of Foster City Affordable ADU Program RFP
9 From the 2023-2031 Housing Element, page HE-94: H-D-4-b ADU/JADU Financial Incentive Program. Provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct an ADU/JADU that is restricted for lower-income households for 10-15 years, with an additional incentive amount for units subject to a preference for identified categories of special needs people who would benefit from coordinated onsite services, including but not limited to people with developmental disabilities. program guidelines). In addition, the program provid es expedited permitting and reduced permit fees.

The applicant will be able to select from a variety of quality ADU designs available from the Contractor.

The selected Contractor’s ADU designs for this program will be pre-reviewed by the City to accelerate permitting.

2. Low-income homeowners have the option of
occupying their ADU and renting out their home.

The program is provided to implement the City’s 2023-2031 Housing Element, Program H-D-4-b, ADU/JADU Financial Incentive Program (page HE-94), which calls for the City to provide or partner with another organization to provide a financial incentive program for single-family homeowners to construct ADUs that are restricted for lower-income households for 10-15 years, with an additional incentive amount for units subject to a preference for identified categories of special needs people who would benefit from coordinated onsite services, including but not limited to people with developmental disabilities

PROGRAM GOAL
The goal of the Program is to facilitate financing of a minimum of eight (8) affordable ADUs to support the City’s 2023-2031 Housing Element Program H-D-4-b, which calls for eight (8) income-restricted ADU units to be financed by 2031 as part of the City’s goal of 24 ADUs constructed by 2031.

PROGRAM PARTICIPANTS
 Contractor: For programs A, B, and C, the Contractor manages the applicant selection and approval process, prepares loan documents, underwrites loans, issues and manages loans and manages the projects Contractor finances the project through their own financing Program using funds received from the City. For program B and C, the Contractor also provides construction of custom or installation of manufactured ADUs. Contractor team may consist of a team including but not limited to a) a licensed contractor and sub-contractors, b) a manufactured ADU manufacturer and/or seller, c) a loan servicing and/or loan underwriting service provider, d) a financing entity that provides loans. The type(s) of ADUs provided may be more limited than as specified in these Program Guidelines.

2 The homeowner may occupy the ADU themselves for any period of time during the 10-year periods, provided their household income is below the low-income limit. No rent is required for owner-occupied units.

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City of Foster City Affordable ADU Program RFP
10  City of Foster City – issues funds for the Program; conducts oversight; provides annual ADU compliance
services to ensure ADU occupants meet low-income
requirements and rent of the ADU is set at affordable
rates for the 10-year period through a third-party or City staff.

 Homeowner – agrees to lease ADU at below market
rental rates to income-qualified occupants for 10 years.

Occupants may include family members or the
homeowner provided they are income qualified.

Homeowners must qualify as stated in the underwriting
guidelines below and agree to Program terms and
conditions.

PROGRAM INCENTIVES
 Incentive 1: Approved Foster City Homeowners
(“Homeowner” or “Applicant”) commit to renting their
ADU to qualified low-income tenant(s) for a period of 10 years at below market rental rates. In exchange, the
homeowner receives a no-interest loan to finance up to
$125,000 of the cost to purchase and install their ADU.  Incentive 2: Eligible Homeowners who agree to rent
their ADU with a preference for identified categories of special needs people who would benefit from
coordinated onsite services, including but not limited to people with developmental disabilities, will receive a no- interest loan to finance up to $150,000 of purchase and installation costs of their ADU. This additional incentive is provided to support the City’s approved 2023-2031
Housing Element, Program H-D-4-b.
 Incentive 3: The city provides accelerated permit
processing and for the building permit through the pre- reviewed plans.

PROGRAM AND LOAN UNDERWRITING GUIDELINES

1. HOMEOWNER APPLICANT QUALIFICATIONS

SAMPLE $300,000 PRE-

FABRICATEDADU

PROJECT

 Applicant must be an owner or be a trustee of a trust which owns the property for which applicant is applying.
 Only one loan per Applicant through the Program.

City Financing: $125,000, 0%
interest, loan term up to 20
years. Payments may be
deferred up to 10 years.

Contractor Financing:
$175,000, 6% financing, 20
years.

Homeowner buys ADU from
Contractor.

Contractor prepares
foundation, manages permits,
and installs ADU.

Homeowner agrees to rent
ADU only to qualified, low-
income renters for 10 years.

Tenants can be family
members or owner-occupied
as long as the occupant
income qualifies.

ADU Rent must be under the
maximum chargeable rent for
a low-income unit.

The City regulates the unit
under the City’s Below Market
Rate Housing Program.

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City of Foster City Affordable ADU Program RFP
11  Applicant understands that the Program is limited to eight (8) loans in total unless funds remain available for additional loans.
 Applicants must commit to renting at below market rental rates for 10 years.  Applicants must commit to using Contractor to purchase and install or build the ADU, if the City’s program combines the City’s financing and ADU general contractor services.  Applicants must agree to complete Fair Housing training prior to completion of construction of the ADU.
 Applicants must comply with Foster City’s Anti-Displacement Strategy and Municipal Code Section 17.90 once the ADU is constructed and rented.
 Applicants must not have any liens or levies on title (court ordered judgements, tax liens, credit card, medical debt, etc.) of the Property.
 Before reviewing if the Applicant meets the qualifications for the Program, a preliminary title report will be obtained to confirm ownership of the Property, identify any relevant encumbrances, and confirm and there is no lien or levy from creditors or other parties on the Property. If the preliminary title report show s any liens or levies from creditors, or encumbrances which would interfere with the project or create added risks for lender, the application filed by the Applicant will be denied. However, they will be invited to re-apply if the Applicant satisfactorily resolves the issue and funds are still available.  Homeowner agrees to comply with the following ADU occupancy requirements:
o Homeowner must submit a report to the City annually by June 30 through the City’s BMR Rental Registry providing information on the unit, including rental rate, rental rate increase, occupancy, and lease terms.
o Homeowner must rent to an income qualified renter and enter into a 12-month initial lease.
o Homeowner must rent the unit for a minimum of $100 per month (except for owner- occupied units) and a maximum of the published rate as issued by the City of Foster City annually.
o Rental rates of occupied units are limited to a 5% rental rate increase per 12-month period. Vacant units are not subject to the 5% rate increase cap. o All occupants of a rented ADU must be on the lease.
o Occupants of the ADU are subject to the City’s occupancy standards as specified in the BMR Guidelines.
o Units cannot be vacant for more than 90 days in a calendar year unless owner can demonstrate a continuous good faith effort to rent the unit during the vacancy period. o ADUs in the Program can be owner-occupied if the owner is income-qualified to occupy the unit.
o For rented ADUs, Homeowner must agree to comply with the City’s minimum and maximum rental rates issued annually and effective July 1 of each year. o Homeowner must comply with the City’s BMR Guidelines. o Homeowner may rent the unit to an income-qualified family member or friend provided a lease is issued and all requirements are complied with. o For Homeowners agreeing to rent the unit with a preference for a household member with special needs, special needs is defined as supportive housing as stated in the City’s Municipal Code, Chapter 17.04.020:

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City of Foster City Affordable ADU Program RFP
12 AB 1033 allows a city to opt into allowing an owner of a home and ADU to create a two-unit condominium and sell the ADU, as a condominium unit. We assume that this is not an intended use of the program. If so, this prohibition should be included

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City of Foster City Affordable ADU Program RFP
13 Additional information about supportive housing is available from the City.

2. ADU PROJECT ELIGIBILITY

a) Eligible Properties
 Single dwelling unit or duplex property located in Foster City where an ADU can be constructed and comply with the requirements of City Municipal Code section 17.78 (“Property”).
 The homeowner’s property shall not have more than two other loans (including a mortgage) and a loan-to-value that is no higher than 90% for all loans, excluding the ADU.  Property must meet Contractor’s eligibility requirements for the property and the project.

b) Eligible Uses of Loan Funds
 Loan funds may be used for construction, purchase, and/or installation of the ADU, site preparation, foundation construction, associated materials, demolition, installation, site work and labor of a new legal and feasible ADUs, including lot maximums, zoning, permitting, and any other requirements in Foster City Municipal Code section 17.78 for the Project (up to a maximum amount of $150,000 for the City’s loan for the project). This amount includes any applicable building permit fees or other fees charged by a public agency or utility as a result of the Project.
 Construction may be a prefabricated studio, one, or two-bedroom detached ADU that meets all City and State requirements and building codes and complies with the City’s zoning code.

See Foster City Municipal Code Chapter 17.78, Accessory Dwelling Units.  Eligible costs include:
o Purchase cost of the ADU
o Construction materials and labor
Municipal Code, Chapter 17.04.020
“Supportive housing” means housing with no limit on length of stay, that is occupied by the target population as defined in Section 65582 of the California Government Code, and that is linked to on- or off-site services that assist the supportive housing residents in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community.

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City of Foster City Affordable ADU Program RFP
14 o Project management
o Demolition necessary for the construction of the foundation for the ADU o Site work, such as water/sewer/septic connections, utility improvements, or site leveling as is necessary for the construction of an ADU o Installation of the ADU
o Other hard or soft costs approved at the discretion of the City

c) Ineligible Projects/Uses of Funds
 Legalization of an existing ADU, JADU or conversion ADU.  Installation of an ADU not associated with the Contractor.  Interior home ADU (called a JADU) such as conversion of a bedroom to an ADU.

3. PROJECT REQUIREMENTS

a) Project Size
 ADU size shall be limited to requirements as stated in Foster City Municipal Code Chapter

17.78.

b) Design
 ADU must conform to any homeowner association (HOA) requirements, if applicable.  Applicant shall agree to Contractor’s design parameters, with the ability to select from a limited range of choices for certain aspects of the project such as floor plans, paint colors and interior and exterior finishes.
 ADU must meet all building codes comply with Foster City Municipal Code Chapter 17.78.  All permits and approvals are required.
 Project must be submitted through the Foster City Planning Department’s TRAKiT Program.

c) Rent Restriction
 Rent of the ADU unit shall be restricted to households earning less than 80% of AMI, using income limits established by the State of California Department of Housing and Community Development (HCD) adjusted for household size as follows: studio: 1 person, one-bedroom: 2 people; two bedroom: 3 people. The rental restriction shall be for a minimum of 10 consecutive years after the issuance of the temporary occupancy certificate.  Rent increases limited to 5% per year and cannot occur more than once in a 12-month period.
 Rent charged by Homeowner cannot exceed the maximum amount established by the City and issued annually by July 1. Rental amount, if any, shall be determined by the Applicant, subject to the maximum rental rate issued by the City.  Minimum rent is $100 per month, except for owner-occupied units.

d) Lease Requirements
 Minimum lease term is 12 months for initial lease.

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City of Foster City Affordable ADU Program RFP
15  The lease form must comply with all applicable local, state, and federal regulations and other requirements as specified in the City’s BMR Guidelines, available online at Landlord/Property Manager Resources | Foster City California. The City must approve the lease form.  The lease must include an affordable housing addendum explaining the provisions of the Program and obligations regarding occupancy standards and rental rate restrictions. The lease addendum must state that the unit is a below market rate unit regulated by the City of Foster City and include length of the affordability restriction, ongoing tenant obligations, occupancy standards, and other provisions as specified in the City’s BMR Guidelines.

e) Applicant/Homeowner Obligations
 It appears the landlord is responsible for certifying/recertifying tenant eligibility. Given that these are not traditional landlords, HEART recommends that the City or its designee (which could be HEART) will take on this task. 
 Applicant must acknowledge that Contractor and/or the City shall have the right to audit tenant files and complete annual unit inspections subject to state notice regulations.  Applicant must acknowledge the unit is a regulated below market rate (BMR) unit regulated by the City and subject to Municipal Code 17.90 and the City’s BMR Guidelines. This includes submittal of an annual report in the City’s BMR Rental Registry by June 30 annually. The City provides training for using the rental registry software.  Applicant agrees to notify City through the BMR Rental Registry of any of the following occurs:
o New tenant
o Lease renewal or new lease with current tenant
o New rental rate as approved by the Housing Authority
o Tenant notification to move out
o Notice to pay or quit or eviction notice issued to tenant o Change in tenant’s voucher status, if applicable
o Changes in property management providers and/or homeowner contact information o Tenant/occupant that no longer qualifies for eligibility due to being over the income limit
 Applicant must enter into a loan agreement with the lender and repay the loan per the payment schedule with any accrued interest at the time of a qualifying repayment event or upon Applicant’s decision to exit the Program.
 Applicant must maintain hazard insurance that names City as loss payee annually for the term of the loan.
 Applicant shall keep all buildings located on the Property insured against loss by fire.  Subject to the rights of any senior lienholder, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Borrower; provided however, if Borrower is not in default under the Loan Documents, the proceeds shall be released to Borrower to repair or rebuild the Improvements provided that sufficient additional sources of financing to complete such repair or rebuilding are available to complete such work. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

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City of Foster City Affordable ADU Program RFP
16  Applicant must adhere to Fair Housing regulations and complete Fair Housing training prior to execution of the first lease and every three (3) years thereafter. The City will post links to Fair Housing Training on the City’s website. Training is available at no cost through the State of California Civil Rights Department or through the City’s Fair Housing Workshop held annually.
 Applicant understands that a vacant ADU unit cannot be vacant for more than 90 days and must be rented to an income-qualified tenant to remain in the Program. Exceptions are granted by the City for documented repair and maintenance work or other reasons on a case- by-case basis.
 Homeowner is responsible for managing the Tenant-Landlord relationship and enforcing the Lease Terms. City and Contractor will not be parties to the lease, and will not be responsible for selecting a tenant, or enforcing the lease terms. These are the sole obligation of  Applicant. For example, if a tenant moves in and does not pay rent, it will be Applicant’s sole responsibility to address the situation at Applicant’s own expense.  Homeowner is responsible for reviewing the City’s Municipal Code, BMR Guidelines, and related ordinances.

f) Tenant Household Obligations to be included in the Lease  If Tenant is a voucher holder, Tenant must agree to Housing Authority terms of their voucher.  Tenant household size must comply with the City’s standard occupancy standards. Tenants that do not meet occupancy standards will be given 90 days’ notice to vacate.  Family members are allowed to occupy the ADU if they are otherwise qualified and added to the lease.
 Tenants found to be over the income limit upon annual income recertification will have 90 days to vacate the unit.
 Tenant must comply with the terms of their lease in order to remain in the unit.

g) General Contractor’s Obligations for ADU Projects, if applicable  Must follow all local, state, and federal laws, including but not limited to lending, building, licensing, and prevailing wage laws, as applicable.
 Must obtain all required local approvals, permits, and entitlements for the Project.  Must use construction materials, finishes and fixtures shall be of good quality and manufacture and design.
 Must hold the City harmless throughout the contract term, and for construction defects during and after the contract term.
 Contractor must provide a construction warranty of a minimum of ten years for materials, parts, and labor for each ADU.
 Must maintain records per local, state and federal laws. 
 Must hold a valid general contractor’s license in the State of California.  Must hold a valid business license with the City of Foster City during the term of the project.

h) Contractor’s Obligations for Loan Administration
 Must provide the City with annual reports on loan administration.  Must make payments to the City as required by the executed Agreement with the City to repay the City-funded portion of the loans.

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City of Foster City Affordable ADU Program RFP
17  Must maintain records per local, state and federal laws.  Must hold a valid business license with the City of Foster City during the term of the project.

4. LOAN PROVISIONS AND TERMS

a) Affordability Restriction Term
 10 years
 Affordability is included in a recorded covenant that runs with the property until the end of the affordability restriction term.

b) Loan Terms for City Financing
 Loan of up to $125,000 per Project ($150,000 for homeowners who agree to rent the ADU with a preference for supportive housing).
 Loan term: up to 20 years.
 No downpayment required.
 No interest (0%).
 Interest payments, if applicable, may be waived, and principal payments deferred, during the 10-year affordability restriction period, at the election of the Borrower.  Payment schedule shall be determined by Contractor and specified in loan documents.  Contractor shall collect payments for City-funded portion of loan and repay City on a schedule as agreed to in executed Agreement with Contractor, accounting for deferred payments during the affordability restriction period, if elected by Borrower. During the term of the Agreement with the Contractor, loan payments from homeowners shall be paid into a re-use account established by the Contractor.
 Upon termination of the Agreement with the Contractor any funds remaining in the re-use account shall be reimbursed to the City within 30 days. The City may elect to transfer loans still in effect to a loan servicing provider.
 The lump sum of the balance due on the loan is due to the City upon a qualifying Repayment Event.

c) Qualifying Repayment Events
 Change in Property title.
 Expiration of the loan term.
 The lot is split.
 The ADU is no longer approved for occupancy.
 The ADU is vacant or no longer rented to a Qualified Tenant for 90 or more days (exceptions for repairs or lack of qualified candidates provided by homeowner).  Borrower’s breach of any other provisions of the Loan Documents that remains uncured for more than 60 days.
 Homeowner fails to comply with Municipal Code 17.90 or the BMR Guidelines.  Tenant is no longer qualified, and Homeowner allows tenant to remain in the BMR ADU during the 10-year affordability restriction period of the loan term.  Homeowner performs unpermitted work on the Property, and the City issues a Stop Work Order on the property after the Project is completed.
 Homeowner files for bankruptcy.

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City of Foster City Affordable ADU Program RFP
18  A mortgage holder repossesses the property for auction.

d) Subordination
 Subordination to the property’s primary mortgage and home equity loan/line of credit is acceptable. Other situations are subject to written approval by the City. However, in the event of bankruptcy or foreclosure by the senior lender(s), the affordability requirements built into the deed of Trust between the Homeowner and Contractor will not survive and the unit will be removed from the City’s Affordable ADU Program. The lien would be on the whole property, not just the ADU.

e) Completion of Project
 Construction of the Project is required to be completed within 12 months following loan approval.
 ADU is complete upon issuance of the Certificate of Occupancy by the City. The Homeowner may begin the process of leasing the unit at that time.

f) Funding Process
 City will pay the Contractor engaged by the City to administer the Affordable ADU Program the lump sum of the contractor amount within 30 days of receipt of an invoice.  The Contractor will establish the loan fund and re-use account to disburse payments for issuing loans and for administration and lending fees.

APPLICATION AND SELECTION PROCESS

1. Application Process
 Any Foster City homeowner can apply for the program through the Contractor as a Loan Applicant. (“Loan Applicant”). Contractor determines methods for application and selection of applicants and issuing loans.
 The City shall promote the program on its website, at City Hall, through the City’s electronic newsletter, and through the Foster City Islander.
 Contractor shall issue loans to qualified Loan Applicants on a first-come, first-served basis.

After a Loan Applicant is notified by Contractor that they have been selected from the waitlist:

1. Contractor shall schedule a Feasibility Consultation with Loan Applicant. During this consultation, Loan Applicant will meet with Contractor to determine feasibility and initial cost estimate of the project. Initial consultation may be virtually or by phone, but Contractor must visit the property before approving a feasibility report. Consultation is provided at no cost to homeowners.

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City of Foster City Affordable ADU Program RFP
19 2. Contractor, in its sole discretion, shall determine the feasibility and estimated cost of the project and notify the Loan Applicant. Projects that are not feasible will be denied.

3. Application Steps
Upon completion of an approved feasibility report and cost estimate, Loan Applicant shall:

1. Submit a complete loan application to Contractor. Loan application materials shall be developed by Contractor.

2. Execute an intent to commit to a ten-year affordability covenant on the ADU.

3. Upload a signed feasibility report and project budget.

4. Contractor staff will review and provide pre-approval authorization, reserving available Loan funds for the individual project for a period of 90 days.

5. During the 90-day Pre-Approval period, Contractor shall confirm feasibility, approve the final project budget, and conduct underwriting of the Loan Application. Underwriting shall include review of a title report for applicant’s property.

6. Homeowners will also have access to no-cost “office hours” with a Contractor Technical Assistance advisor to answer any questions about their ADU project.

4. Review and Consideration of Applications

1. Contractor shall manage the applicatio n process to select eligible Applicants.

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A p p e n d i x
M

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ANNUAL REPORT
FY 2023-24
The Housing Endowment and Regional Trust of San Mateo County

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Dear Friends,When the cities and County of San Mateo established HEART, they granted theorganization a powerful mandate: to lead the way in fundraising, planning,financing, and overseeing workforce and affordable housing initiatives acrossthe county.

Since our founding, HEART has been dedicated to raising funds to support thedevelopment of new affordable housing. We are proud of our impact—havinginvested over $35 million to help develop and preserve 1,743 housing units.

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SummerHill Apartment
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John Matthews Architects
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Armando F. Sanchez
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2 HEART of San Mateo County Annual Report FY 2023-24
James Coleman
Councilmember
City of South San Francisco
Lisa Gauthier
Supervisor
County of San Mateo
However, the vision for HEART has always been broader. Our founders envisioned an organization thatwould not only finance housing but also acquire, hold, and lease property; issue bonds and notes forhousing initiatives; advise member agencies on housing policies; and educate the public on housingchallenges and solutions.

In 2023-24, we took bold steps toward realizing that greater vision. As you will read in this report,HEART acquired its first property—an eight-unit apartment building—to pilot innovative housingpreservation strategies. We are also providing consulting services to eight cities to support theirhousing programs and, in partnership with the County of San Mateo, have begun developing a low-costloan program to help mobile homeowners replace aging, unsafe units with modern, secure models.

We are excited about this new chapter, and we hope you are too. Thank you for your continued supportin making this important work possible.

Armando F. Sanchez
Executive Director
Warm regards,
Glenn R. Sylvester, Treasurer
Vice Mayor
City of Daly City
Lisa Diaz Nash
Councilmember
City of San Mateo

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154

To honor the legacy of Don Horsley, a dedicated advocate for young people and affordable housing, HEART established the Don Horsley Housing Fellowship.“
This program aims to inspire and equip the next generation of housing professionals, addressing the growing need for skilled experts in the field while making a meaningful impact on the community. This year, we are proud to welcome two fellows who will contribute to the future of affordable housing.” ARMANDO SANCHEZ, EXECUTIVE DIRECTOR Alex Waggoner joined HEART in October 2024 after previously working with the Oakland Housing Authority and in Los Angeles local government.

He has extensive experience in affordable housing, legislative research, and in policy and administrative support for housing related programs. He has successfully developed and implemented many housing related policies, such as a Language Assistance Policy for the Oakland Housing Authority and other long form policy documents for federal approval.

HEART of San Mateo County Annual Report FY 2023-24 3
Audrey Washington graduated from Stanford University with a degree in Urban Studies and joined HEART in September 2024. Before joining HEART, she worked in renewable energy development, heavy-duty trucking electrification, and community engagement. These experiences have shaped Audrey’s interest in urbanism—how we live in and build urban centers. Housing is a vital component of any urban area.

While discriminatory housing policies have contributed to inequities, the Bay Area has a unique opportunity to promote equity through the built environment by providing quality, affordable housing.

DON HORSLEY AFFORDABLE HOUSING FELLOWS
Audrey Washington
Alex Waggoner
Audrey Washington on a site visit at
Colibri Commons in East Palo Alto.

He also brings experience working with elected officials at the city, state, and federal level. He holds a master’s degree in public administration as well as a BA in International Relations from the University of Southern California. Alex was inspired to work in housing in San Mateo County by his family’s story. His family moved to San Mateo County as new immigrants to this country and found economic and social mobility to reach their goals and develop a community.

Audrey joined HEART to work with an organization actively advancing these opportunities by increasing access to
affordable housing for low- and moderate-income residents in San Mateo County.

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155

SIZE
8 units
Seven 1-bedroom
One 2-bedroom
HIGHLIGHTS OF HEART’S WORK THROUGH JUNE 2024 INCLUDE:

In July 2024, HEART completed its first NOAH acquisition. This mixed-income development serves families earning between 30% and 120% of the Area Median Income (AMI) and was made possible through a combination of public and private funding.

Preserving Naturally Occurring Affordable Housing
(NOAH) properties can be both costly and complex. To
address this challenge, HEART has leveraged its
extensive expertise in commercial brokerage, property
acquisition, project underwriting, and construction
management to launch a NOAH Preservation Program.

Preservation Program

HEART PROGRAMS
HEART’s goal is to raise capital and acquire more buildings in 2025. 4 HEART of San Mateo County Annual Report FY 2023-24
Authored and secured City Council passage of an Affordable Housing Strategy Completed the Below Market Rate homeowner monitoring for cities Worked with a city to create an anti-displacement housing strategy Designed the Mobile Home Loan Program with the County, which will provide 20 mobile homeowners with very low-cost loans to replace their aging mobile homes Created a user-friendly guide to housing resources and worked with cities to improve their housing resource web pages
Housing Consulting Services Program
HEART launched the Housing Consulting Services
Program in January of 2024 to meet the need for
housing staff support across the county. Eight
communities are contracted with HEART to provide a
range of housing program and policy services.

Cities and towns in San Mateo County are
experiencing increasing demand on their
housing staff due to new housing legislation
and a surge in developments.

PURCHASE DATE
July 29, 2024

ACQUISITION COST
$2,850,000
$356,000 per unit
Stambaugh
Project Details

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156

DEVELOPER
TOTAL
30% AMI*
50% AMI
DEVELOPERS HEART-SV, a HEART affiliate organization
TOTAL
1 Ridge at Ralston
* Area Median Income
678 Ralston Avenue, Belmont, CA
CRP Affordable Housing and
Community Development
STATUS Predevelopment
64 1-BEDROOM
30 2-BEDROOM
19 ACQUISITION LOAN$3,000,000
PREDEVELOPMENT LOAN $1,000,000
HEART contributions:
17 35

AVERAGE AMI

49.54%units units
Stambaugh Street, Redwood City, CA
Stambaugh
BRIDGE LOAN $450,000
AVG. AMI
65%
30% AMI*
1unit
60% AMI
3units
80% AMI
1unit
120% AMI
3unitsRent Levels
Affordable Units 8
1-BEDROOM
7 2-BEDROOM
Rent Levels
Affordable Units
HEART of San Mateo County Annual Report FY 2023-24 5

HEART PROGRAMS
Developer Loan Program
3-BEDROOM
16 80% AMI
12units
HEART contributions:
and the California Department of Housing and Community
Development (HCD) Local Housing Trust Fund (LHTF) Program PERMANENT FUNDING $1,900,000from HEART Trust Fund

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157

It was a pleasure connecting with the housing community in San Mateo County and reflecting on HEART’s accomplishments over food and drinks. We hope to see everyone again in 2025!
Photos: Scott Buschman6 HEART of San Mateo County Annual Report FY 2023-24 Thank you to our
generous sponsors!
Platinum $10,000
Primavera Partners
Bronze $1,500
IBEW Local Union 617
Intero Real Estate
MidPen Housing
Plumbers Local 467
Recology
Robert and Christine Morehead
Signature Realty
Community Bank of the Bay
All of our work is made
possible by your support.

THANK YOU to all the sponsors, community members, and
volunteers who joined us for HEART’s Annual Event on
October 10, 2024, at Devil’s Canyon Brewing Company.

MEDIA SPONSOR San Mateo Daily Journal
LOCATION SPONSOR Devil‘s Canyon Brewery

ANNUAL EVENT
Silver $2,500
PG&E
CORE
SummerHill HomesGold $5,000
Brookwood Group/Brookwood
Partners
Citizens Bank
Kaiser Permanente
SC Properties
Your contributions are helping to advance affordable housing options for residents of San Mateo County, whether through loans to build new affordable housing, consulting services for one of our contracted cities, or health and safety improvements to existing affordable units.

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158

Connect With Us
(650) 204-5640
[email protected]
heartofsmc.org
heart-of-smc
@HeartofSMC
@HeartofSMC
ASSETS 2024 2023
Cash and Cash Equivalents $9,732,172 $10,130,466
Receivables (net)
Interest $1,665,692 $1,311,665
Loans $12,834,504 $9,809,489
Accounts $104,739 $162,343
Temporarily Restricted
Cash and Cash Equivalents $421,359 $414,960
TOTAL ASSETS $24,758,467 $21,828,923
REVENUES 2024 2023
Operating Grants and Contributions
Member Agencies $236,363 $236,286
Donors $2,081,483 $1,823,882
Charges for Services $663,162 $4,800
General Revenues
Investment Earnings $320,583 $416,173
TOTAL REVENUES $3,301,591 $2,481,141
Thank you to our member cities, towns,
and the County for your partnership.

Armando Sanchez
Executive Director
Boris Vatkin Director,
Housing Programs
For the Years Ended June 30, 2024 and 2023*For the Years Ended June 30, 2024 and 2023*

STATEMENT OF NET POSITIONSSTATEMENT OF ACTIVITIES
NET POSITION 2024 2023
HEART Staff
Town of Atherton
City of Belmont
City of Brisbane
City of Burlingame
Town of Colma
City of Daly City
City of East Palo Alto
City of Foster City
City of Half Moon Bay
Town of Hillsborough
City of Menlo Park
City of Millbrae
City of Pacifica
Town of Portola Valley
City of Redwood City
City of San Bruno
City of San Carlos
City of San Mateo
City of South San Francisco
Town of Woodside
County of San Mateo
LIABIILITIES 2024 2023
Accounts Payable $78,910 $63,390
Long-Term Liabilities $5,000,000 $4,620,000
TOTAL LIABILITIES $5,078,910 $4,683,390
NET POSITION 2024 2023
Restricted Pledge Account $421,359 $411,960
Unrestricted $19,258,198 $16,731,573
TOTAL NET POSITION $19,679,557 $17,143,533
EXPENSES 2024 2023
General Management and Programs $933,913 $671,139
Legal Services $1,069 $9,773
Interest on Long-Term Debt $92,758 $83,212
Miscellaneous $201 $135
TOTAL EXPENSES $1,027,941 $764,259
Change in Net Positions $2,533,024 $1,716,882
Net Positions - Beginning $17,146,533 $15,429,651
Net Positions - Ending $19,679,557 $17,146,533
* 2024 Unaudited Financial Statements

FINANCIAL STATEMENT

MEMBER AGENCIES
HEART is a non-profit organization and joint-powers
authority (JPA). The County and all twenty cities and
towns in San Mateo County are members of HEART.

Tim Davis Director, Housing
Consulting Services
Mac Hart Program Manager,
Preservation Program
Audrey Washington Don Horsley
Affordable Housing Fellow
Alex Waggoner Don Horsley
Affordable Housing Fellow
HEART of San Mateo County Annual Report FY 2023-24 7

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159

The Housing Endowment and Regional Trust of San Mateo County 2905 S. El Camino Real, San Mateo, CA 94403
Provided significant funding for HEART
Quickstart Developer Loan Program
Provided significant funding for
HEART’s Preservation Program
© 2025 HEART of San Mateo
County All Rights Reserved
HEART proudly serves as a 501(c)(3) nonprofit organization.

Federal ID: 72-1589835
$1,000-$2,500
Up to $250 Heather Peters
Jack Matthews
Jean-Marie Houston
Jeff Schmidt
Jeffrey Smith
John Matthews Architects
Joshua Abrams
Karon Knox Franzella
Karyl Eldridge
Larisa Ocanada
Lee Ginsburg
Mark Moulton
Mary Bier
Melissa Lukin
Nila Kim
Paul Krupka
Perez, Cecilia
Rick Bonilla
Ronald Collins
Sailesh Mehra
Sandra Council
Sara McDowell
Sarah Veeser
Serena Ip
Tim Hood Davis
Timothy Clark
2023-24 DONORS
General Support
Laura Peterhans
Robert and Cristine Morehead
Alexander Kobayashi
Andrew Buhrmann
Anna Alekseyeva
Chris Sturken
Christine Boles
Christopher O'Connor
Diana Reddy
Diane Dittmar
Diane Howard
Donna Colson
Dulce Fernandez
Fred Hansson
Harvey Rarback

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160

HOUSING ENDOWMENT AND REGIONAL TRUST

OF SAN MATEO COUNTY
Financial Statements and
Independent Auditors’ Report
June 30, 2024 and 2023

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161

HOUSING ENDOWMENT AND REGIONAL TRUST

OF SAN MATEO COUNTY
JUNE 30, 2024 and 2023

TABLE OF CONTENTS
Independent Auditors’ Report 1 - 4
Management’s Discussion and Analysis 5 - 10
Basic Financial Statements:

Government-Wide Financial Statements
Statements of Net Positions 13
Statements of Activities 14
Fund Financial Statements
Balance Sheets – governmental fund 17
Statements of Revenues, Expenditures and
Changes in Fund Balance – governmental fund 18
Reconciliation of the Statements of Revenues,
Expenditures and Changes in Fund Balance of
Governmental Fund to the Statements of Activities 18
Notes to the Financial Statements 21 - 30
Required Supplementary Information:

Schedule of Revenues, Expenditures and
Changes in Fund Balance – Budget and Actual
Governmental Fund 33
Notes to the Required Supplementary Information 34
Supplementary Information:

Status of Funds 37
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 ............................................................. 39-41

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INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Housing Endowment and Regional Trust of San Mateo County, California (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 as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of HEART, as of June 30, 2024 and 2023, and the respective changes in financial position thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) 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 HEART 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 opinions.

Responsibilities of Management for the Financial Statements HEART’s management is responsible for the preparation and fair presentation of the financial statements in 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 that 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 HEART’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 6.5
Attachment 3 - Proposal from HEART

163

To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Page 2 ends

Foster City City CouncilMay 4, 2026

Foster City City Council
May 4, 2026