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DATE: June 15, 2026
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager
FROM: Thai-Chau Le, Interim Community Development Director Nori Jabba, Housing and Sustainability Manager
DEPARTMENT: Community Development Department
SUBJECT: SECOND AMENDMENT TO COUNTY OF SAN MATEO
COOPERATION AGREEMENT OF SEPTEMBER 20, 2017 FOR
THE CONTINUED PARTICIPATION IN THE FEDERALLY-
FUNDED HOUSING AND COMMUNITY DEVELOPMENT
PROGRAMS
RECOMMENDATION
It is recommended that the City Council adopt a Resolution authorizing the City Manager to execute a Second Amendment to the Cooperation Agreement dated September 20, 2017, with the County of San Mateo, for continued participation in the County’s federally-funded Housing and Community Development Programs in fiscal years 2027, 2028, and 2029 with an automatic renewal for fiscal years 2030, 2031, and 2032 (Attachment 1).
EXECUTIVE SUMMARY
The proposed Second Amendment to the 2017 Cooperation Agreement with the County of San Mateo (“Agreement”) (see Exhibit 1-A of Attachment 1) continues the participation by City of Foster City in the Urban County designation for San Mateo County, which allows smaller cities of less than 50,000 in population the opportunity to access services throughout the County funded through federal programs, including Community Development Block Grant (CDBG), Home Investment Partnerships Program (HOME), and Emergency Solutions Grants (ESG) Programs. Currently, organizations funded by these programs and providing services to the City of Foster City through the Agreement include Project Sentinel, which provides fair housing support and training; Rebuilding
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Together Peninsula, which provides home repair services to lower income residents and seniors (this is in addition to the City of Foster City’s Minor Home Repair Program through this same organization), and a variety of additional public services, such as meals, legal, and shelter services for the county’s most vulnerable residents. Without the Cooperation Agreement, the City of Foster City would not be eligible to receive the federally-funded services provided by these organizations.
The 2017 Agreement, executed September 20, 2017, was a three (3)-year agreement for participation (Attachment 2). The Agreement was amended in July 2023 to continue Foster City’s participation through the 2026 fiscal year (Attachment 2, First Amendment).
The proposed Second Amendment to the Agreement has 13 new provisions related to the City's responsibilities that are now required by U.S. Department of Housing and Urban Development (HUD), as summarized below:
Fair Housing. The Agreement requires the City to comply with applicable fair housing and anti-discrimination laws and to affirmatively further fair housing within its own jurisdiction.
Prohibition on Transfer of Funds. The City may not transfer CDBG funds that it receives.
ESG Program. The City may only participate in the ESG Program through the Urban County.
The Cooperation Agreement continues to have the following key provisions, summarized below:
The City and County will cooperate in participation in CDBG, HOME, and ESG Programs.
The term of the Cooperation Agreement is three (3) years (fiscal years 2027, 2028, and 2029).
Any funds coming to the City will be subject to an individual agreement with program requirements.
The City has a policy prohibiting the use of excessive force by law enforcement against individuals engaged in non-violent civil rights demonstrations. (This provision has been part of the Cooperation Agreement since at least 1996.) The existing Foster City Police Department Policy on Standards of Conduct has a general prohibition on the use of excessive force.
The City may not apply for grant funds from CDBG, HOME, and ESG programs except through the County.
The City agrees to abide by affirmative action requirements. The City shall use the funds only for the purpose granted. If there is any program income, it must be reported to the County.
It should be noted that there is no cost to the City of Foster City for participating in the Urban County Cooperation Agreement.
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The Second Amendment also requires authorization by both the governing body and the chief executive officer. In addition, the Second Amendment includes an acknowledgement of a court case involving HUD, to which the County of San Mateo is a party. Details regarding the case are included below.
BACKGROUND
As a city with a population of less than 50,000, the City of Foster City is not large enough to be entitled to receive its own CDBG, HOME, or ESG funding from HUD. The City has participated with San Mateo County via a Cooperation Agreement to receive funding as part of an "Urban County" since 1975. In 2017, HUD required that the County and participating cities execute a new Cooperation Agreement, instead of renewing the previous agreement. Participation in the Urban County Cooperation Agreement provides smaller cities the opportunity to access programs funded by CDBG, HOME, and ESG funds through the County of San Mateo. As stated above, these funds are used for a variety of programs, including fair housing support and training, home repairs, and a variety of community services.
The City entered into a new Agreement with the County in 2017 for participation in the CDBG, HOME HOME, and the ESG programs managed by the HUD. The Agreement allows the County to serve as the lead agency to receive funds through these programs and disburse funds to serve partnering cities with populations of less than 50,000. Cities with populations of less than 50,000 do not qualify to receive allocations of funding for these HUD programs directly.
CDBG funds are used for community improvement projects that meet one of three National Objectives: (1) benefiting low- and moderate-income persons; (2) aiding in the prevention or elimination of slums or blight; or (3) meeting an urgent community need.
CDBG funds cover a variety of services and activities, including Acquisition/disposition of real property
Public improvements and facilities (e.g., senior citizens center, recreation center, daycare center)
Public services (e.g., childcare, health care, job training/education programs, recreation programs, drug abuse counseling/treatment, and services for homeless persons)
Interim assistance; relocation payments/assistance
Rehabilitation of residential, commercial/industrial, or other nonprofit-owned, nonresidential buildings
Historic preservation
Lead-based paint hazard evaluation and reduction
Code enforcement
Special economic development
Assistance to microenterprises
Homeownership assistance
Urban renewal completion
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Technical assistance to increase the capacity of public/private nonprofits Assistance to institutions of higher education and program administration costs related to planning and execution of CDBG-assisted activities The HOME program is a federal block grant administered by HUD that provides funding to states and localities to create and sustain affordable housing for low-income households. HOME provides formula grants to states and localities that communities use - often in partnership with local nonprofit groups - to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. It is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households.
The ESG program assists people with quickly regaining stability in permanent housing after experiencing a housing crisis and/or homelessness. ESG provides funding to engage homeless individuals and families living on the street; improve the number and quality of emergency shelters for homeless individuals and families; help operate shelters; provide essential services to shelter residents; rapidly re-house homeless individuals and families; and prevent families and individuals from becoming homeless.
Please note that in this qualification period, HUD updated the processing requirements to mandate Amendment approval by the governing body and execution (signature) by the chief executive officer. Even though the HUD-required updates to the Cooperative Agreement are minor, the two levels of authorization are now required and will be mandatory henceforth. (See Letter from County, Attachment 3).
In addition, the Second Amendment includes a provision acknowledging that San Mateo County is a plaintiff in King County et al. v. Turner et al., 2:25-cv-00814-BJR (W.D.
Wash.) and clarifying that, to the extent this Agreement purports to impose any terms or conditions that are enjoined under the Preliminary Injunction issued in that case, San Mateo County is not bound by those enjoined terms or conditions. On July 10, 2025, San Mateo County joined ongoing litigation against multiple federal agencies, including HUD, challenging certain new and unlawful terms and conditions imposed on federal grant awards. On August 12, 2025, the court issued a Preliminary Injunction (Attachment 4) prohibiting HUD from enforcing those terms and conditions against San Mateo County in connection with any HUD grants awarded to the County. Accordingly, the County has included this provision in the Second Amendment to remind HUD that the King County Preliminary Injunction extends to the Cooperative Agreement. This term should not affect any party’s obligations under this Agreement.
ANALYSIS
For FY 2023 through 2026, the City executed a First Amendment to the Cooperation Agreement. This Second Amendment extends the 2017 Cooperation Agreement for another three (3) years (fiscal years 2027, 2028, and 2029) with an automatic renewal, 1 1
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unless the City opts out, for 2030, 2031, and 2032, and includes 10 changes to the Cooperation Agreement as follows:
1. Adds the following emboldened, italicized phrase: “WHEREAS, the County of San Mateo has heretofore qualified as an urban county under the Act, the County again solicits the cooperation and co-participation of public entities such as the City in its application for federal assistance under the Act for Federal Fiscal Years 2027, 2028 and 2029 and one subsequent three-year period thereafter.”
2.Adds the following as a new Whereas provision: “WHEREAS, the City Executive of the City is authorized to execute this Amendment on the City’s behalf, and the County Executive is authorized to execute this Amendment on the County’s behalf.”
3. Amends Section 1 (Purpose) as follows: replaces the first sentence with the following emboldened, italicized phrase: “The County and City agree to cooperate to undertake, or assist in undertaking, essential community development and housing assistance activities in and for the benefit of the City, as approved or authorized between the parties in the CDBG Agreements, including the Consolidated Plan. This Agreement includes...”
4. Amends Section 2 (Term), 1 as follows: amends and restates the first paragraph in its entirety as follows: “This Agreement shall remain in effect for the three-year program period of Federal Fiscal Years 2027, 2028 and 2029, and until funds granted and program income received during the three-year program period are expended and the funded activities completed. Neither the County nor the Municipality may terminate, withdraw, or be removed from the program during the three-year program period. The Agreement will renew automatically for participation in one successive three-year Urban County qualification period (Federal Fiscal Years 2030, 2031, and 2032), unless the Municipality or the County provide written notice to the other party that it elects not to participate in a new qualification period. The terminating party shall send a copy of the notice of termination to the HUD field office by the date specified on the HUD Exchange Urban Counties website. The County will notify the Municipality in writing of the Municipality’s right to make this election. A copy of the County’s notification must be sent to the HUD field office by the date specified on the HUD Exchange Urban Counties website.”
5. Amends Section 3 (County’s Responsibilities as Applicant) as follows: amends and restates Paragraphs 4 and 5 of Subsection a. in their entirety as follows:
“Therefore, the County and City agree to cooperate to undertake, or assist in undertaking, essential community development and housing assistance activities in and for the benefit of the City, as approved or authorized between the parties in the CDBG Agreements, including the Consolidated Plan. The County and City will also strictly adhere to the Consolidated Plan as approved and to all assurances and certifications provided to HUD, including taking all actions necessary to 1 1
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comply with the Urban County’s certifications under Section 104(b) of Title I of the Housing and Community Development Act of 1974, as amended, that the grant will be conducted and administered in conformity with:
• Title VI of the Civil Rights Act of 1964, implementing regulations at 24 CFR Part 1; and
• the Fair Housing Act, and implementing regulations at 24 CFR Part 100 and will comply with the obligation to affirmatively further fair housing; and • Section 109 of Title I of the Housing and Community Development Act of 1974, and the implementing regulations at 24 CFR Part 6, which incorporates: Section 504 of the Rehabilitation Act of 1973, and the • implementing regulations at 24 CFR Part 8; and
• Title II of the Americans with Disabilities Act of 1974, and the implementing regulations at 28 CFR Part 35; and
• the Age Discrimination Act of 1975, and the implementing regulations at 24 CFR Part 146; and
• Section 3 of the Housing and Urban Development Act of 1968; and • Uniform Relocation and Real Property Policies Act of 1970 and the implementing regulations at 49 CFR Part 24; and
• Section 104(d) of the Housing and Community Development Act of 1974 and the implementing regulations at 24 CFR Part 42; and • all other applicable laws and regulations.
6. Amends Section 3 (County’s Responsibilities as Applicant as follows: amends and restates Subsection c. in its entirety as follows: “Parties to this Agreement understand and agree that they may not sell, trade, or otherwise transfer all or any portion of CDBG funds to a Metropolitan City, Urban County, unit of general local government, or insular area that directly or indirectly receives CDBG funds in exchange for any funds, credits, or non Federal considerations, but must use such funds for activities eligible under Title I of the Housing and Community Development Act of 1974, as amended.”
7. Amends Section 5 as follows: adds the following italicized and underlined language: The City and County have each adopted and enforcing: a. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction against any individuals engaged in non-violent civil rights demonstrations; b. A policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within jurisdictions.
8. Adds Section 8 (County’s Responsibility to City) as follows: adds the following new Subsection d.: “d. The Urban County agrees that the CDBG funds that the Municipality is entitled to will be utilized to benefit the Municipality.”
9.Amends Section 10 (Program Income) as follows: amends and restates Subsection e. in its entirety as follows: “e. The County and Municipality shall not 1 1
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terminate or withdraw from the Agreement while it remains in effect. The County may transfer the program income to the Metropolitan City, upon its termination of Urban County participation, provided that the Municipality begins participating as an independent CDBG Entitlement grantee and agrees to use the program income in its own CDBG Entitlement program.”
10.Amends Section 13 (Minor Amendments to the Agreement) as follows: amends and restates Section 13 in its entirety as follows: “13. Amendments to the Agreement. “The Parties agree to adopt amendment(s) to this Agreement as may be required by HUD to meet any new Urban County Qualification requirement(s), when applicable. Failure by either Party to adopt any such amendment, and to submit such amendment to HUD, will void the Agreement for such qualification period.”
While Foster City does not receive funds through the Cooperation Agreement directly from the County, the County has awarded CDBG, HOME, and ESG funds to agencies to provide services countywide. Currently, agencies funded throughout the County include:
1. Project Sentinel
Project Sentinel provides support and training for fair housing and anti- discrimination to renters. Founded in 1976, Project Sentinel is one of the largest Northern California agencies providing comprehensive housing services. The organization is dedicated to safeguarding the availability and stability of housing through developing and promote fairness and equality of housing for all people and advocate peaceful resolution of disputes for community welfare and harmony.
Project Sentinel provides fair housing advocacy and counseling, dispute resolution and enforcement, and outreach and education services.
In addition, Project Sentinel provides the City of Foster City’s annual fair housing and anti-discrimination training, as required by Housing Element Program H-G-2- b: Fair Housing Training for Landlords and Tenants (page HE-110), which requires the City of Foster City to conduct at least one fair housing training for tenants and landlords annually, beginning in 2024.
2. Rebuilding Together Peninsula
Rebuilding Together Peninsula (RTP) has provided a home repair program at no cost for low-income homeowners since 1989. The program serves low-income homeowners, including seniors, veterans, individuals with disabilities, and multigenerational households. In addition, RTP provides services for a range of community facilities.
The RTP program is in addition to Foster City’s recently launched Minor Home Repair Program, which provides an additional $30,000 (up to $5,000 for each home) for very low-income homeowners needing minor home repairs. This program, administered by RTP implements Housing Element Program H-B-2-b:
Facilitate Non-Profit Rehabilitation/Maintenance Assistance. (page HE-85). The 1 1
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program Agreement was executed earlier this year and has recently been launched.
The combination of the two programs, the County funding for RTP and Foster City’s Minor Home Repair Program, maximizes the opportunity for low-income Foster City homeowners to preserve their homes.
3. Public Services
The County invested about $350,000 in CDBG funds to support public services grants, which provide meals, legal services, and operate local shelters last year.
Staff recommends approval of the Second Amendment to enable the City of Foster City to continue receiving the services provided by the County through the Cooperation Agreement.
Staff has confirmed with the County, that, if the City of Foster City opts out of the Cooperation Agreement, and, therefore elects not to continue with the Urban County program, agencies that use the County’s CDGB, HOME, and/or ESG funds, will not be authorized to provide specifically funded services to Foster City residents. This will likely result in the City of Foster City needing to fund the agencies directly for specific services, such as the annual training and counseling provided by Project Sentinel.
Participation in the Cooperation Agreement is at no cost to the City of Foster City.
Therefore, by staying in the Urban County program, Foster City residents can continue to use services through entities that receive those CDBG-funded services.
CEQA
The approval of the Second Amendment to the Agreement dated September 20, 2017 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
Authorization of the Cooperation Agreement will have a positive fiscal impact by preserving Foster City’s eligibility to access additional funding for local housing programs and projects while also increasing amount of funding available to San Mateo County to address housing issues county-wide.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 – Resolution
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Exhibit A – Second Amendment to County Cooperation Agreement Attachment 2 – First Amendment and 2017 Original Agreement Attachment 3 – Letter from County dated June 5, 2026
Attachment 4 – King County Plaintiff Preliminary Injunction Order