Agenda packet, regular meeting — Healdsburg City Council, April 4, 2022 (part 2 of 2)

KENDAL DA Amdt v.1

ACKNOWLEDGMENT
State of California )
) ss
County of Sonoma )
On ,20__, before me,___________________________________________, (Name of Notary)
notary public, personally appeared _________________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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Packet Pg. 136 Attachment: 2. Ordinance-1st Amendment to North Village DA (Enso) [Revision 1] (3533 : Enso DA Amendment 1) Ordinance No. ___

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KENDAL DA Amdt v.1
(Notary Signature)

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
The real property situated in the City of Healdsburg, County of Sonoma, State of California, described as follows:

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Packet Pg. 137 Attachment: 2. Ordinance-1st Amendment to North Village DA (Enso) [Revision 1] (3533 : Enso DA Amendment 1)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 4, 2022
SUBJECT: An Ordinance Amending the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC for the North Village Project
PREPARED BY: Linda Ruffing,
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):

By motion, introduce for first reading, by title only and waiving the full reading of the text, an ordinance amending the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC for the North Village Project.

COMMUNITY ENGAGEMENT/OUTREACH:

On January 7, 2019, the City Council received a report regarding the Healdsburg Fire Substation project, received public input, and directed staff to engage a consultant to prepare a Fire Services Impact Assessment.

On December 2, 2019, the City Council received a report on the findings of the "Fire Services Development Impact Assessment" prepared by the Municipal Resource Group and directed staff to continue planning for construction of the Fire Substation project.

On April 6, 2020, the City Council approved a Development Agreement ("DA) by and between the City of Healdsburg and CCS Healdsburg LLC ("Comstock") for the North Village Project.

The DA required the Developer to construct the Healdsburg Fire Substation using private funds from the remaining balance of the Saggio Hills Project’s $1,750,000 contribution plus a Comstock Developer contribution capped at $2,000,000, subject to increases based on the Consumer Price Index.

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On January 19, 2021, the City Council approved the Third Amendment to the Development Agreement between the City of Healdsburg and Sonoma Luxury Resort LLC ("SLR") for the Saggio Hills Project which, in part, removed the SLR's obligation to construct the Fire Substation, since the obligation was assigned to Comstock in the North Village DA.

On February 23, 2022, the Planning Commission conducted a public hearing on the proposed Second Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg LLC ("Second Amendment") and reviewed the proposed Second Amendment for consistency with the General Plan, North Village Area Plan and the Land Use Code. The Commission adopted Resolution No. 2022-04 (Attachment 1) recommending that the Healdsburg City Council approve the Second Amendment.

Notices of City Council's April 4, 2022, public hearing on the Second Amendment were published in a newspaper of local publication and mailed to property owners within 300' of the property boundaries.

BACKGROUND:

The Fire Substation originally was intended to be designed and constructed in conjunction with the Saggio Hills Project (now known as "Montage Healdsburg"). In 2011, when the Saggio DA was approved, SLR's capped contribution of $1.75M was expected to be sufficient to cover design and construction costs for the Fire Substation. SLR completed the conceptual design process for the Fire Substation in 2018, but further work was delayed after preliminary cost estimates came in at about $3.5M and it became evident that the City would need to identify additional funding sources. In 2019, the City Council directed that a formal needs assessment be prepared for the Fire Substation. The assessment, performed by Municipal Resource Group ("MRG"), evaluated the need for the Fire Substation and reviewed potential alternatives for the facility. The review found that:
- The proposed Fire Substation will not improve response times as, generally, it will be unstaffed. However, if reserve firefighters are staged at the Substation during "red flag warnings," response times will be enhanced.
- The alternative of expending funds set aside for the Fire Substation to purchase fire equipment and make improvements to the main Fire Station would not provide the overall improvement in service to the north Healdsburg area that would be provided by the Fire Substation.
- The Fire Substation would have the following positive benefits to fire services:
o It could be upstaffed during "red flag" warnings and other emergency situations, thus improving response times;
o It would serve as a back-up facility if the main Fire Station floods; o It could accommodate regional trainings and help meet future needs should consolidation of regional fire agencies occur;
o It would provide additional storage for emergency response vehicles and training equipment;
o It would implement General Plan and Saggio Hills Area Plan policies regarding the Fire Substation.

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Upon receiving the MRG assessment in January 2020, the Council directed staff to identify potential revenue sources for the funding shortfall in order for the Fire Substation to be constructed. In April 2020, the City entered into a Development Agreement with Comstock for the North Village Project. The DA requires Comstock to construct the Fire Substation and caps their developer contribution at $2M with an annual Consumer Price Index adjustment. The remaining balance of SLR's $1.75M developer contribution would be passed through to Comstock.

Subsequently, the Third Amendment to the Saggio Hills Development Agreement removed SLR's obligation to construct the Fire Substation. SLR is required to place the balance of their $1.75M developer contribution ($1,599,586) into escrow to be released to the City when a notice to proceed has been issued for construction of the Fire Substation. Per the North Village Development Agreement, if design and construction costs for the Fire Substation exceed the combined funds from SLR and Comstock, the City is obligated to fund the shortfall. It is estimated that Comstock’s costs for preparation of construction documents will total $500,000 leaving approximately $3.1M of the total developer’s contributions for construction of the Fire Substation.

In compliance with the North Village Development Agreement, Comstock completed the Design Development plans for the Fire Substation last fall and the 50% Construction Documents in January 2022. The 100% Construction Documents are nearing completion. Once the Construction Documents are complete, they will go through the plan check process and then the public bid and contracting process will occur. At this time, it is anticipated that construction of the Fire Substation will commence later this year.

DISCUSSION/ANALYSIS:

When the North Village Development Agreement was negotiated in 2019, it was thought that the funding from SLR and Comstock would be sufficient to complete construction. At the time, it was believed that the remaining design and construction work could be completed using private funds, which would allow Comstock to use its construction team to complete the work while already mobilized on the North Village Project.

Unfortunately, construction costs have sky-rocketed in the past two years due to pandemicrelated inflation, escalation of labor costs, and supply chain issues. The most recent cost estimate for the Fire Substation, prepared last fall, projected costs at roughly $4.76M plus an additional $1.26M in construction contingency and construction management/inspection costs. Because the City will make up the shortfall using public funds, State law will require the Fire Substation project to undergo public bidding and contracting processes, which precludes the strategy of obtaining efficiencies by having Comstock construct the Fire Substation itself.

Over the last several months, City staff and Comstock have discussed the cost estimates and the public bidding, contracting and construction process for the Fire Substation. The City and the design team engaged in a lengthy process of "value-engineering" the project while ensuring that the end result will be a high-quality Fire Substation that meets the City's needs. An updated cost

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estimate will be prepared based on the 100% Construction Documents, prior to soliciting bids for construction of the Fire Substation.

The City and Comstock discussed the possibility of phasing construction of the Fire Substation so that Comstock could build a "cold shell" with the available developer contributions and then the City could complete the interior of the Fire Substation with additional public funds. In the end, it was determined that a phased approach is not feasible. Furthermore, such an arrangement would increase the risk of construction-related disputes, result in added costs, and ultimately could result in the delivery of an inferior product.

City staff has identified challenges inherent in controlling cost overruns with a third party (Comstock) overseeing the construction management of the Fire Substation given that the City is obligated to cover costs beyond the capped developer contributions. Staff concluded that the most efficient and effective means of managing the construction process will be for the City's Public Works Department to oversee construction of the Fire Substation. This will avoid unnecessary duplication of effort for construction management and will allow the City to exercise close control over costs, provide quality assurance, and oversee an efficient and smooth delivery of the project.

The Second Amendment is proposed to modify the responsibilities of the parties. As presented in the Ordinance in Attachment 2, the Second Amendment reflects City staff's recommendations and agreements negotiated with Comstock. Specifically, the Amendment would allow Comstock to fulfill its obligation through a cash payment to the City equaling the maximum amount of construction costs Comstock would have been responsible for under the DA. The City would then use the contributions from Comstock and SLR in combination with other funding sources to complete construction of the Fire Substation.

ENVIRONMENTAL STEWARDSHIP:

Development of the Fire Substation project will be required to comply with mitigation measures for the Saggio Hills Development Project as contained in and required by the Final Environmental Impact Report for the Saggio Hills Project, including all mitigation monitoring and reporting.

ALTERNATIVES:

It is recommended that the City Council introduce for first reading, by title only and waiving reading of the text, an Ordinance approving the Second Amendment to the Development Agreement for the North Village Project as recommended by the Planning Commission.

Alternatively, the City Council could consider the following actions:
1) Approve the Ordinance with further minor revisions to the Second Amendment, 2) Direct that significant changes be made to the Second Amendment and refer the matter back to the Planning Commission for review of those changes, or 3) Deny the Second Amendment in which case the provisions of the existing DA would remain intact.

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FISCAL IMPACT:

The Fire Substation Project will be partially funded by developer contributions from SLR and Comstock and the remaining funds will be provided by the City. The following table provides a breakdown of construction costs estimated last fall by Leyland Saylor Associates based on the 100% Design Development Plans. An updated cost estimate will be prepared based on the 100% Construction Documents prior to initiating the public bid process for the Fire Substation.

City staff are currently exploring funding options for the City portion of costs. Options currently include using the General Fund, Measure T, and Fire Facilities Development Impact Fees. Staff will bring a funding recommendation to Council at the Budget workshop scheduled for May 9th.

ENVIRONMENTAL ANALYSIS:

Any environmental impacts related to the Development Agreement for the North Village project have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act. On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the Second Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

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ATTACHMENT(S):

1. PC Reso 2022-04 Second Amendment to North Village DA 2 . Ordinance-2nd Amendment to North Village DA(Fire Substation)

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PC Resolution 2022-04 1
EXHIBIT 1
Planning Commission Resolution 2022-04

A RESOLUTION OF THE PLANNING COMMISSION OF THE

CITY OF HEALDSBURG RECOMMENDING THAT THE CITY

COUNCIL APPROVE THE SECOND AMENDMENT TO THE

DEVELOPMENT AGREEMENT FOR THE NORTH VILLAGE
PROJECT (DA 2020-01.02)
WHEREAS, the City of Healdsburg, a California municipal corporation (the “City”) and CCS Healdsburg, LLC, a Delaware limited liability company (“Developer”) are Parties to that certain Development Agreement, dated May 6, 2020; a Memorandum of Development Agreement was recorded in the Official Records of Sonoma County on June 1, 2020, as Document No. 2020041464 (“Development Agreement”); and
WHEREAS, City staff and Developer have prepared a proposed Second Amendment to the Development Agreement ("Second Amendment") for consideration by the Healdsburg Planning Commission and the Healdsburg City Council; and WHEREAS, the Second Amendment is intended to provide for efficient and cost-effective completion of construction of the Healdsburg Fire Substation project; and WHEREAS, in accordance with Sections 65864 through 65869.5 of the California Government Code (“State Development Agreement Law”), the City adopted Ordinance No. 1097 to add Chapter 17.20 to the Healdsburg Municipal Code authorizing the use of, and imposing additional requirements on, development agreements; and WHEREAS, Chapter 17.20.060 requires the Planning Commission to conduct a public hearing on an amendment to a development agreement; and WHEREAS, pursuant to the California Environmental Quality Act (Pub. Res. Code § 21000, et seq.) ("CEQA"), the City prepared and, on May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448; and WHEREAS, the Planning Commission held a noticed public hearing on February 23, 2022, for the purpose of receiving oral testimony on the proposed Second Amendment, reviewed written and oral staff reports, and received into the record all pertinent documents related to the Second Amendment, before making its decision.

NOW, THEREFORE BE IT RESOLVED that the Healdsburg Planning Commission hereby recommends to the City Council that the Second Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg LLC (DA 2020-01.02) be approved as presented in Attachment A to this resolution based upon the facts and findings as set forth below:

1. The Development Agreement and its Second Amendment are consistent with the Healdsburg 2030 General Plan, the North Entry Area Plan, and the Land Use Code. The City Council made findings of consistency in its action to adopt Ordinance No. 1202,

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Packet Pg. 144 Attachment: 1. PC Reso 2022-04 Second Amendment to North Village DA (3541 : Enso 2nd DA amendment) PC Resolution 2022-04 2
approving the Development Agreement and the Second Amendment does not modify the Development Agreement in any way that would conflict with the goals and policies of the Healdsburg 2030 General Plan and the North Entry Area Plan, and requirements of the City's Land Use Code.

2. The Development Agreement and its Second Amendment will provide Healdsburg with tangible benefits including: 105 units of Affordable and Middle Income Housing; a $2,000,000 contribution for construction of a Fire Substation; contribution of $250,000 to the City for connectivity improvements; annual payments to the City of approximately $334,000 per year from the Senior Living Community for lost tax revenue and increased demands for services; remittance of a 1/2% Hotel Add-On Fee (beginning 10 years after issuance of a certificate of occupancy for the hotel); and other improvements.

3. Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act. On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the Second Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

DULY AND REGULARLY ADOPTED by the Healdsburg Planning Commission on the 23rd day of February 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
____________________________ _____________________________ Jerry Eddinger, CHAIR Scott Duiven, SECRETARY

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Packet Pg. 145 Attachment: 1. PC Reso 2022-04 Second Amendment to North Village DA (3541 : Enso 2nd DA amendment) PC Resolution 2022-04 3

ATTACHMENT A

SECOND AMENDMENT TO DEVELOPMENT AGREEMENT
THIS SECOND AMENDMENT TO DEVELOPMENT AGREEMENT (the
“Amendment”) is made and entered into as of [the 30th day following final adoption of the ordinance approving it] ("Second Amendment Effective Date") by and between the CITY OF HEALDSBURG, a California municipal corporation ("City") and CCS HEALDSBURG, LLC, a Delaware limited liability company (“Comstock” or “Developer”). City and Developer may each be referred to as a “Party,” and collectively as the “Parties.”

RECITALS
A. On May 6, 2020, the Parties entered into that certain Development Agreement ("Development Agreement") concerning the development of an approximately 32-acre parcel of land at 16977 Healdsburg Avenue in the City of Healdsburg, defined as the "Property" in the Development Agreement, and shown on Exhibit A attached thereto. The Development Agreement was recorded against Property on June 1, 2020 in the Official Records of Sonoma County as Document No. 2020041464.

B. The parties agree to modify the Development Agreement pursuant to Government Code Sections 65867 and 65868, and Healdsburg Municipal Code Section 17.20.060, in order to modify the terms related to the delivery of a new fire substation as provided below.

C. On _____________, 2022, the Planning Commission, after duly noticed public hearing, recommended approval of this Second Amendment. On ______________, after duly noticed public hearing, the City Council introduced its Ordinance _________ approving this Second Amendment and authorizing its execution and adopted that Ordinance __________ on ____________. Ordinance ____________ became effective on _____________.

AGREEMENT
NOW, THEREFORE, with reference to the foregoing recitals and in consideration of the mutual promises, obligations and covenants contained herein, Parties consent to this Second Amendment as follows:

1. Defined Terms. All capitalized terms used herein shall have the meanings given in the Development Agreement, except as expressly otherwise defined herein.

2. Enumeration of Specific Deletions and Amendments. The Development Agreement is hereby revised to incorporate the following amendments. (a) Replace and restate Section 5.6 in its entirety as follows:

5.6(a) The Montage Healdsburg Development Agreement includes approximately 0.85 acres located within the boundaries of the Saggio Hills Area

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Plan that is required to be used for the development of a Healdsburg Fire Department substation (“Fire Substation”) which site has been or will be conveyed to the City (the “Fire Substation Site”).

5.6(b) Developer will prepare construction drawings (the “Fire Substation Construction Plans”) for an approximately 4,162 square‐foot Fire Substation on the Fire Substation Site, and shall submit the Fire Substation Construction Plans to the City for review and approval in accordance with the City's plan check process. Plans shall be revised, as necessary, until such time as the City has determined that the Fire Substation Construction Plans are ready for issuance of construction permits, such that it would be possible to obtain a building permit for the Fire Substation, but without Developer actually obtaining any building permits for the Fire Substation (“Developer Fire Substation Design Completion”). The Fire Substation Construction Plans shall be substantially consistent with the conceptual plans approved by the Planning Commission on April 24, 2018 (Design Review DR 2018-02), as amended by the Design Review Amendment approved by the Planning Commission on August 24, 2021 (Design Review DR 2021-11). Subject to the Developer Fire Substation Contribution limit as set forth below with respect to such costs and expenses, the Developer shall pay any and all amounts due with respect to design work for the Fire Substation Construction Plans, as contemplated by this Section 5.6 as and when they become due and payable.

5.6(c) The City shall cause the Fire Substation Construction Plans to be reviewed by City promptly, and provide comments and responses to the submittals made by Developer within 30 days after the City’s receipt of each submittal of a plan set by Developer. Upon any disapproval by the City of the Fire Substation Construction Plans, the Developer shall cause the architect selected by Developer to revise the Fire Substation Construction Plans and then submit the revised plans to the City for review and approval or disapproval until Developer Fire Substation Design Completion is obtained.

5.6(d) Developer shall complete the Fire Substation Construction Plans work as described above at its sole cost and expense (“Developer’s Fire Substation Costs”); provided, however, that Developer’s total out-of-pocket cost shall not exceed Two Million Seventy-Six Thousand Dollars ($2,076,000) (“Developer Fire Substation Contribution”). On April 1, 2022, or as soon thereafter as the Index is available, the Developer Fire Substation Contribution shall be increased by a percentage equal to the percent increase of the Consumer Price Index for All Urban Consumers (CPI-U San Francisco-Oakland-Hayward) (the “Index”), or an equivalent index if the Index is no longer available, calculated from April of the previous year to April of the current year. If the Index shows a decrease for the year, the Developer Fire Substation Contribution will not change.

5.6(e) As of December 31, 2021, the Developer has incurred [________] in out-of-pocket costs for the preparation of the Fire Substation Completion Plans,

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which costs are a portion of Developer Fire Substation Contribution.

Notwithstanding that Developer shall pay directly the additional Developer Fire Substation Costs incurred to the extent of the Developer Fire Substation Contribution as described immediately above. Within 60 days of satisfaction of the Developer Fire Substation Design Completion, Developer shall provide invoices and other evidence satisfactory to City to demonstrate the amount of Developer’s Fire Substation Costs that have been incurred and that such work has been paid for by Developer, including bills, invoices, lien waivers and other supporting documentation submitted by the design professionals selected by Developer to complete the Fire Substation Construction Plans. Developer shall indemnify the City against any claims for payment of work to prepare the Fire Substation Construction Plans within the limit of the Developer Fire Substation Contribution by the design professionals selected by Developer and performed prior to the Developer Fire Substation Design Completion.

5.6(f) The City shall review and approve or disapprove the amount of the Developer’s Fire Substation Costs already paid by Developer as set forth in the submission by Developer within 30 days following the City’s receipt thereof, provided that such request includes the documentation described above in form and content satisfactory to City. Any failure by the City to give such a notice of approval or disapproval within 30-day period shall be deemed approval. Any disapproval shall include a statement setting forth the particular basis for the City’s disapproval in reasonable detail.

5.6(g) Developer shall assign to City all contracts, plans, warranties, and other intangible property rights obtained with respect to the Fire Substation Plans (the “Fire Substation Work Product”) and pay the City the balance of the Developer Fire Substation Contribution to the City within 30 days of City giving notice of approval of the Developer's Fire Substation Costs.

5.6(h) Notwithstanding anything to the contrary contained in this Agreement, if the Developer Fire Substation Design Completion has not occurred on or before the first to occur of December 31, 2022 or the date of issuance of the first certificate of occupancy by the City with respect to the Project, notwithstanding that Developer has submitted three sets of Fire Substation Plan sets to the City and responded to the City comments with revisions to each prior set of City comments, which have resulted in City approval as of the date set forth immediately above, then Developer may submit a final set of Fire Substation Construction Plans to City, together with notice to City that such plan set is the final plan set to be submitted to City pursuant to the requirements of this Agreement, and thereafter Developer shall assign to City all Fire Substation Work Product as of such date, and upon such assignment Developer shall be deemed to have satisfied all of its obligations under the provisions of the Development Agreement related to the Fire Substation, except for the accounting for costs already incurred and payment of the remaining balance of the Developer Fire Substation Contribution, as provided in Sections 5.6(e) through (g) above, which shall be completed as provided in those sections.

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5.6(i) At Developer’s sole option, for a period not to exceed ten (10) years after the issuance of a certificate of occupancy for the hotel, Developer may collect the Hotel Community Benefit Fee described in Section 5.9 of this Agreement and keep the proceeds to offset a portion of the Fire Substation costs. (b) Exhibit D of the Agreement is hereby deleted in its entirety.

3. Interpretation. This Agreement shall be interpreted to give each of the provisions their plain and fair meaning. The Recitals set forth above are incorporated into this Agreement. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since all have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its plain and fair meaning as a whole, as if all Parties had prepared it.

4. Integration. This Agreement contains the entire agreement between the Parties with respect to its subject matter and supersedes whatever oral or written understanding they may have had prior to the execution of this Agreement. This Agreement shall not be amended or modified except by a written agreement executed by each of the Parties.

5. Inconsistencies. The Development Agreement shall be construed as having been modified by this Second Amendment. Except as expressly modified by this Second Amendment. The Development Agreement remains in full force and effect. In the case of conflict between the provisions hereof and the terms of the Development Agreement, the provisions of this Second Amendment shall control.

6. Severability. If any term, provision, condition or covenant of this Agreement or its application to any Party or circumstances shall be held by a court of competent jurisdiction, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition, or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law unless the rights and obligations of the Parties have been materially altered or abridged thereby.

7. Counterparts. This Agreement may be signed in counterparts by the Parties hereto and shall be the binding agreement of the Parties upon execution by each of them of one or more copies hereof.

8. Recording of Memorandum. Approximately concurrent with the Second Amendment Effective Date, the Parties shall execute, acknowledge and record a Memorandum of Agreement in the official records of Sonoma County.

9. Authority. Each of the persons signing this Agreement hereby represents and warrants that he or she is fully authorized to sign this Agreement on behalf of the Party for which he or she is signing.
[signature page follows]

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IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

CITY
City of Healdsburg, a California municipal corporation
By: _________________________
Jeff Kay
City Manager
APPROVED AS TO FORM:

By: __________________________
Samantha Zutler, Esq. City Attorney
ATTEST:

By: __________________________
Raina Allan, City Clerk

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-048

DEVELOPER
CCS Healdsburg, LLC, a
Delaware limited liability
company
By:
_________________________
Robert Comstock
Title:
________________________

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Packet Pg. 151 Attachment: 1. PC Reso 2022-04 Second Amendment to North Village DA (3541 : Enso 2nd DA amendment) 11134.00028/1226557v2 1

CITY OF HEALDSBURG
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE

CITY OF HEALDSBURG APPROVING A SECOND

AMENDMENT TO THE DEVELOPMENT AGREEMENT

BY AND BETWEEN THE CITY OF HEALDSBURG AND

CCS HEALDSBURG, LLC FOR THE NORTH VILLAGE
PROJECT (DA 2020-01.02)
WHEREAS, under the authority of Ordinance No. 1202, the City of Healdsburg, a California municipal corporation (“City”) and CCS Healdsburg, LLC, a Delaware limited liability company ("Developer") entered into a Development Agreement, dated May 6, 2020; and a Memorandum of Development Agreement was recorded in the Official Records of Sonoma County on June 1, 2020, as Instrument No. 2020-041464 (“Development Agreement”); and WHEREAS, the Development Agreement governs the development of an approximately 32-acre property located at 16977 Healdsburg Avenue with a Senior Living Community with 221 independent living units, ancillary facilities including dining facilities, meeting rooms, administrative offices, and a total of 54 assisted living and memory care beds; 30 multi-family apartments; a 108-key hotel with a restaurant/bar, fitness facility and spa, meetings rooms and other amenities; and 45 multi-family units, five live-work units, and 12,000 square feet of commercial/retail space in a mixed use development ("Project"); and WHEREAS, City staff and Developer have prepared a proposed Second Amendment to the Development Agreement ("Second Amendment") for consideration by the Healdsburg Planning Commission and the Healdsburg City Council; and WHEREAS, the Second Amendment is intended to provide for efficient and cost-effective completion of construction of the Healdsburg Fire Substation project given changesin construction costs, materials, and other factors that have occurred since the City originally approved the Development Agreement; and
WHEREAS, in accordance with Sections 65864 through 65869.5 of the California Government Code (“State Development Agreement Law”), the City adopted Ordinance No. 1097 to add Chapter 17.20 to the Healdsburg Municipal Code authorizing the use of, and imposing additional requirements on, development agreements; and WHEREAS, pursuant to the California Environmental Quality Act (Pub. Res. Code § 21000, et seq.), the City prepared and, on May 20, 2019, the City Council certified the Final Environmental Impact Report for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448; and

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WHEREAS, pursuant to Chapter 17.20.060 of the Healdsburg Municipal Code, the Planning Commission held a noticed public hearing on February 23, 2022, for the purpose of receiving oral testimony on, deliberating, and making a recommendation regarding the proposed Second Amendment. The Commission considered all public comments received and all pertinent documents, including the Staff Report dated February 23, 2022, regarding the proposed Second Amendment, and by Resolution No. 2022-04, recommended approval of the Second Amendment; and
WHEREAS, the Healdsburg City Council held a duly noticed public hearing on the Second Amendment on March 21, 2022, reviewed the written and verbal staff reports, took testimony, and received into the record all pertinent documents related to the Project.

NOW, THEREFORE BE IT ORDAINED that the Healdsburg City Council hereby approves the Second Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC, as presented in Exhibit 1 to this ordinance and based upon the facts and findings as set forth below:

Section 1. Findings.

1. The foregoing Recitals are true and correct and by this reference are made a part hereof.

2. The Development Agreement and its Second Amendment are consistent with the Healdsburg 2030 General Plan, the North Entry Area Plan, and the Land Use Code.

The City Council made findings of consistency in its action to adopt Ordinance No. 1202, approving the Development Agreement, and the Second Amendment does not modify the Development Agreement in any way that would conflict with the goals and policies of the Healdsburg 2030 General Plan and the North Entry Area Plan, and requirements of the City's Land Use Code.

3. The Development Agreement and its Second Amendment will provide Healdsburg with tangible benefits including: a 221-unit Senior Living Community with 30 units of Affordable Housing; 80 additional units of Affordable and Middle Income Housing; a $2,000,000 contribution for construction of a Fire Substation; contribution of $250,000 to the City for connectivity improvements; annual payments to the City of approximately $334,000 per year from the Senior Living Community for lost tax revenue and increased demands for services; remittance of a 1/2% Hotel Add-On Fee (beginning 10 years after issuance of a certificate of occupancy for the hotel); and other improvements.

4. Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act. On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the

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Second Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

Section 2. Approval and Execution. The City Council hereby approves the Second Amendment to the Development Agreement, substantially in the form attached hereto as Exhibit 1, subject to such minor and clarifying changes consistent with the terms thereof as may be approved by the City Attorney prior to execution hereof. The City Council further authorizes the City Manager to execute the Second Amendment on behalf of the City.

Section 3. Severability. If any section, subsection, sentence, clause or phrase or word of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed and adopted this Ordinance and each and all provisions thereof irrespective of the fact that any one or more of said provisions may be declared unconstitutional, unlawful or otherwise invalid.

Section 4. Effective and Operative Dates. This Ordinance of the City of Healdsburg shall be effective thirty (30) days after the date of its passage. Before expiration of fifteen days after its passage, this ordinance or a summary thereof as provided in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Healdsburg, along with the names of the City Council voting for and against its passage.

This ordinance was introduced by the City Council of the City of Healdsburg, County of Sonoma, at a regular meeting thereof on the 4th day of April, 2022, and passed and adopted on the __ day of ____, 2022 by the following roll call vote:

AYES: Councilmembers:

NOES: Councilmembers:

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ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED ATTEST
__________________________________ _____________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk
Dated: ___________________________

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EXHIBIT 1

SECOND AMENDMENT TO DEVELOPMENT AGREEMENT
THIS SECOND AMENDMENT TO DEVELOPMENT AGREEMENT (the
“Amendment”) is made and entered into as of [the 30th day following final adoption of the ordinance approving it] ("Second Amendment Effective Date") by and between the City of Healdsburg, a California municipal corporation ("City") and CCS Healdsburg, LLC, a Delaware limited liability company (“Comstock” or “Developer”). City and Developer may each be referred to as a “Party,” and collectively as the “Parties.”

C. On February 23, 2022, the Planning Commission, after duly noticed public hearing, recommended approval of this Second Amendment.

D. On ______________, after duly noticed public hearing, the City Council introduced its Ordinance _________ approving this Second Amendment and authorizing its execution and adopted that Ordinance __________ on ____________. Ordinance ____________ became effective on _____________.

1. Defined Terms. All capitalized terms used herein shall have the meanings given in the Development Agreement, except as expressly otherwise defined herein.

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5.6(a) The Montage Healdsburg Development Agreement includes approximately 0.85 acres located within the boundaries of the Saggio Hills Area Plan that is required to be used for the development of a Healdsburg Fire Department substation (“Fire Substation”) which site has been or will be conveyed to the City (the “Fire Substation Site”).

Plans shall be revised, as necessary, until such time as the City has determined that the Fire Substation Construction Plans are ready for issuance of construction permits, such that it would be possible to obtain a building permit for the Fire Substation, but without Developer actually obtaining any building permits for the Fire Substation (“Developer Fire Substation Design Completion”). The Fire Substation Construction Plans shall be substantially consistent with the conceptual plans approved by the Planning Commission on April 24, 2018 (Design Review DR 2018-02), as amended by the Design Review Amendment approved by the Planning Commission on August 24, 2021 (Design Review DR 2021-11). Subject to the Developer Fire Substation Fire Substation Contribution limit as set forth below with respect to such costs and expenses, the Developer shall pay any and all amounts due with respect to design work for the Fire Substation Construction Plans, as contemplated by this Section 5.6 as and when they become due and payable.

5.6(d) Developer shall complete the Fire Substation Construction Plans work as described above at its sole cost and expense (“Developer’s Fire Substation Costs”); provided, however, that Developer’s total out-of-pocket cost shall not exceed Two Million Seventy-Six Thousand Dollars ($2,076,000) (“Developer Fire Substation Contribution”). On April 1, 2022or as soon thereafter as the Index is available, the Developer Fire Substation Contribution shall be increased by a percentage equal to the percent increase of the Consumer Price Index for All Urban Consumers (CPI-U San Francisco-Oakland-Hayward) (the “Index”), or an equivalent index if the Index is no longer available, calculated from April of the previous year to April of the current year. If the Index shows a decrease for the year, the Developer Fire Substation Contribution will not change.

5.6(e) As of December 31, 2021, the Developer has paid Two Hundred Twenty Two Thousand Ninety Nine Dollars and Eighty-Two Cents ($222,099.82)

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in out-of-pocket costs for the preparation of the Fire Substation Completion Plans, which costs are a portion of Developer Fire Substation Contribution.

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as provided in Sections 5.6(e) through (g) above, which shall be completed as provided in those sections.

7. Counterparts. This Agreement may be signed in counterparts by the Parties hereto and shall be the binding agreement of the Parties upon execution by each of them of one or more copies hereof.

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IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

CITY
City of Healdsburg, a California municipal corporation
By: _________________________
Jeff Kay
City Manager
APPROVED AS TO FORM:

By: __________________________
Samantha Zutler, Esq. City Attorney
ATTEST:

By: __________________________
Raina Allan, City Clerk

DEVELOPER
CCS Healdsburg, LLC, a
Delaware limited liability company
By: _________________________
Robert Comstock
Title: ________________________

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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 4, 2022
SUBJECT: First Amendment to the Franchise Agreement between the City of Healdsburg and Recology Sonoma Marin
PREPARED BY: Larry Zimmer, Public Works Director
STRATEGIC INITIATIVE(S):

Provide Effective Governance
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):

Adopt a Resolution approving the First Amendment to the Franchise Agreement for Solid Waste, Recyclable Materials, Compostable Materials, Construction Demolition Debris, and Street Sweeping Services between the City of Healdsburg and Recology Sonoma Marin.

COMMUNITY ENGAGEMENT/OUTREACH:

Senate Bill 1383 requirements and impacts has been presented to City Council at two public presentations. The resultant rate increase from this amendment was anticipated and discussed several times at prior public meetings.

BACKGROUND:

Senate Bill 1383, the Short-lived Climate Pollutant: Organic Waste Methane Emissions Reduction Act of 2016 (SB 1383) required CalRecycle to develop regulations to reduce organics in landfills as a source of methane by 2030. SB 1383 contains numerous requirements which have already begun to go into effect. The bill, which can be summed up as a requirement to divert food waste from being landfilled, is necessitating operational changes and capital improvements including where solid waste is hauled, expansion and modification of existing facilities, and new programs such as food waste recovery, education, and enforcement. The new regulations require that the City update its municipal code, and further implementation of programs be facilitated by an amendment to the Franchise Agreement between the City and its solid waste hauler, Recology Sonoma Marin (Recology), and memorandum of understanding (MOU) with ZWS.

On November 15, 2021, City Council adopted the changes to its municipal code for compliance with SB 1383 and approved the MOU with ZWS.

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DISCUSSION/ANALYSIS:

Staff will provide the City Council with an oral presentation on the proposed amendment, which is provided in a format ready for adoption (Attachment 1).

The proposed amendments to the City’s franchise agreement with Recology require the City’s haulers to offer organic waste collection service to all customers, perform route reviews, contamination monitoring, noticing, education and outreach, and reporting services. The amendment includes the following scope added to City services:

1. Expansion of Three-Container Organic Waste Collection Services a. Organic collection routes are to be expanded to several commercial and multifamily customers. Part of this effort involves new collection trucks and properly labeled and colored waste containers to satisfy the requirements of the SB-1383 regulations.

2. Route Reviews
a. At least once annually, beginning in 2022, Recology must conduct a route review for each route in the City and issue a Notice of Contamination to any customer that has prohibited materials in the organic bins. The notice is a way to correct and educate the users about items that may be in the incorrect bin.

3. Compliance Reviews
a. At least once annually, beginning in 2022, Recology must review the records of its commercial and multi-family customers to determine whether such customers are subscribed for organic collection service or have an applicable waiver and report the results to the City.

4. Education and Outreach
a. Recology must assist in an education program to provide customers the information needed to properly separate their food waste, such as:
i. Information on the requirements to properly separate materials in appropriate containers.
ii. Information on methods for: prevention of organic material generation, recycling organic material on-site, sending organic material to community composting, and any other local requirements regarding organic material. iii. Information regarding the methane reduction benefits of reducing the landfill disposal of organic material and the methods of organic material recovery contemplated by the Agreement.
iv. Information regarding methods for recovering organic material. v. Information related to the public health and safety and environmental impacts associated with landfill disposal of organic material.

5. Reporting
a. Beginning January 1, 2022, Recology must provide the following information to the City as part of the regularly scheduled quarterly reports under the Agreement:
i. Copies of all such information related to education and outreach including the date(s) the outreach activities were conducted as well as the type and number of accounts that received the information.

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ii. Route and Compliance Review information including descriptions and results of each review.
iii. Documentation relating to observed prohibited container contaminants, whether observed during route reviews or otherwise including copies of Notice of Contamination issued to customers.

In order for Recology to perform these required actions, a special adjustment to the regularly scheduled 2023 rate increase must be adopted to account for the additional annual expenses incurred and capital resources needed by Recology. The special adjustment would increase rates sufficient to cover all costs of the organics collection and diversion program mandated under SB 1383 and would be applied January 1, 2023 in addition to the regularly scheduled annual rate adjustment. The proposed rate increase for these additional services is 3.30%.

Staff and the City’s consultant have reviewed the proposed amendment to the Franchise Agreement between the City and Recology as well as the subsequent rate increase and determined the changes to be justified. Staff is recommending City Council adopt a resolution authorizing the City Manager to sign the First Amendment to the Franchise Agreement for Solid Waste, Recyclable Materials, Compostable Materials, Construction and Demolition Debris, and Street Sweeping Services between the City of Healdsburg and Recology Sonoma Marin.

ENVIRONMENTAL STEWARDSHIP:

SB 1383 will reduce harmful emissions of short-lived climate pollutants. City staff is committed to meeting the requirements of this law at a minimum and will exceed these requirements whenever and wherever possible.

ALTERNATIVES:

Council could not adopt the proposed amendment. As a result, the City is responsible for implementing all requirements as defined under SB 1383. The City may be fined by CalRecycle for non-compliance with SB 1383 for failure to implement the requirements of SB 1383.

FISCAL IMPACT:

There will be no fiscal impact to the City’s operating funds. The current Agreement requires Recology to provide garbage service to all City facilities at no cost to the City, including the disposal of bio-solids generated at the treatment plant.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is not a “project” and is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Resolution
Franchise Amendment - Final

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CITY OF HEALDSBURG
RESOLUTION NO. __-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING THE FIRST AMENDEMENT TO

THE FRANCHISE AGREEMENT FOR SOLID WASTE,

RECYCLABLE MATERIALS, COMPOSTABLE MATERIALS,

CONSTRUCITON AND DEMOLITION DEBRIS, AND STREET

SWEEPING SERVICES BETWEEN THE CITY OF

HEALDSBURG AND RECOLOGY SONOMA MARIN
WHEREAS, City and Recology are parties to the Franchise Agreement for Solid Waste, Recyclable Materials, Compostable Materials, Construction and Demolition Debris, and Street Sweeping Services dated January 1, 2021; and
WHEREAS, the Parties wish to amend the Agreement to enable the City to comply with the SB 1383 Regulations; and
WHEREAS, the needs of City to comply with SB 1383 can be best served by passing on certain responsibilities to the franchise holder, rather than attempting to directly implement SB1383 compliant programs with additional services; and WHEREAS, the additional responsibilities added to the franchise agreement include container requirements imposed by law, route reviews, outreach and education, implementation of a 3 container collection system including source separated organics collection, and additional reporting requirements, as required by law; and
WHEREAS, said additional responsibilities are not currently accounted for in the franchise rates, and the amendment would authorize Recology to impose rate increases for to recover the additional costs of providing such services.

NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Healdsburg hereby:

1. Finds that approving this amendment is an administrative activity that will not result in direct or indirect physical changes to the environment.

2. Approves the First Amendment to the Franchise agreement for Solid Waste, Recyclable Materials, Compostable Materials, Construction and Demolition Debris, and Street Sweeping Services Between The City of Healdsburg and Recology Sonoma Marin.

PASSED AND ADOPTED by the City Council of the City of Healdsburg, this 4th day of April 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

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Page 2 ends

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
_________________________________ _________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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FIRST AMENDMENT TO THE FRANCHISE AGREEMENT FOR SOLID WASTE,

RECYCLABLE MATERIALS, COMPOSTABLE MATERIALS, CONSTRUCTION AND

DEMOLITION DEBRIS, AND STREET SWEEPING SERVICES BETWEEN THE CITY OF

HEALDSBURG AND RECOLOGY SONOMA MARIN
This First Amendment to the Franchise Agreement for Solid Waste, Recyclable Materials, Compostable Materials, Construction and Demolition Debris, and Street Sweeping Services (this “Amendment”) is entered into as of [_____], 2022 between the City of Healdsburg (“City”) and Recology Sonoma Marin (“Recology”).

WHEREAS, City and Recology are parties to the Franchise Agreement for Solid Waste, Recyclable Materials, Compostable Materials, Construction and Demolition Debris, and Street Sweeping Services dated January 1, 2021 (such agreement as amended, the “Agreement”); WHEREAS, the Parties wish to amend the Agreement to assist City in complying with the SB 1383 Regulations (as defined in Exhibit A);
WHEREAS, City intends to implement a 3-container Compostable Materials collection service as contemplated by Section 18984.1 of the SB 1383 Regulations.

NOW, THEREFORE, the parties agree as follows:

1. Effective Date. This Amendment shall take effect January 1, 2022 or the date that the agreement is executed, whichever is sooner.

2. Definitions. For purposes of this Amendment, the terms set forth in Exhibit A, attached hereto and incorporated herein, shall have the meanings given to them in such exhibit.

3. Three-Container Compostable Materials Collection Services.

3.1. Phased Implementation. City and Contractor acknowledge that Contractor’s Compostable Materials Collection routes must be expanded to satisfy the requirements of the SB 1383 Regulations, and that new collection trucks must be procured by Contractor in order to provide such services. As soon as practicable, Contractor shall provide Compostable Materials collection service to all of its customers within City who are subscribed to and pay for Solid Waste collection service, unless (i) the customer is not required under City’s municipal code to subscribe for Compostable Materials collection service, or (ii) the customer qualifies for a State- or locally-issued waiver, or (iii) the customer refuses to accept such service.

4. Container Colors.

4.1. General Requirement. Contractor shall ensure that each Container that it newly purchases after January 1, 2022 and provides to a Generator serviced under the Agreement conforms to the following color scheme: Gray Containers for collection of Solid Waste, Blue Containers for collection of Recyclable Materials, and Green Containers for collection of Compostable Materials. In addition, Contractor shall ensure that all Containers it uses to provide such services to Generators serviced under the Agreement conform to such color scheme by January 1, 2036.

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4.2. Specific Material Types. Paper products and printing and writing paper, each as defined in the SB 1383 Regulations, may be placed in either the Blue Container or the Green Container. Carpet and textiles may not be placed in either the Blue Container or the Green Container.

5. Container Labels.

5.1. General Requirement. Contractor shall ensure that each Container (or Container lid) that it newly purchases after January 1, 2022 and provides to a Generator serviced under the Agreement shall be labeled or imprinted with language and/or graphics that clearly indicates the primary items accepted and the primary items that are Prohibited Container Contaminants for that Container type. Contractor may comply with this section by using model labeling provided by CalRecycle.

6. Route Reviews.

6.1. General Requirement. At least once annually, beginning in 2022, Contractor shall conduct a Route Review for each Hauler Route. For each Route Review of a Hauler Route, Contractor shall inspect at least the following minimum number of Containers, but may inspect more if Contractor wishes. Each inspection shall involve lifting the Container lid and observing the contents, but shall not require Contractor to disturb the contents or open any bags. Contractor may select the Containers to be inspected at random, or (if mutually agreed with City) by any other method not prohibited under the SB 1383 Regulations. For the avoidance of doubt, Contractor shall not be required to annually inspect every Container on a Hauler Route. Contractor shall include the results of each Route Review in its next regularly scheduled report to City, as required by Section 9.

Route Size (# accounts) Minimum Number of Containers
Less than 1,500 25
1,500-3,999 30
4,000-6,999 35
7,000 or more 40

6.2. Notice of Contamination. If Contractor finds Prohibited Container Contaminants in a Container during a Route Review, Contractor shall notify the Generator of the violation in writing. The written notice shall include information regarding the Generator’s requirement to properly separate materials into the appropriate Containers. The notice may be left on the Generator’s Container, gate, or door at the time the violation is discovered, and/or be mailed, e-mailed, electronically messaged or delivered personally to the Generator.

Contractor may dispose of the contents of any Container found to contain Prohibited Container Contaminants. The notice shall be provided in English and Spanish.

7. Compliance Reviews.

7.1. General Requirement. At least once annually, beginning in 2022, Contractor shall review the records of its Commercial and Multi-Family customers in City that are subscribed for at least two (2) cubic yards per week of combined Solid Waste, Compostable Materials and Recyclable Materials service, to determine whether such customers are subscribed for Compostable Materials collection service or have an applicable waiver. Contractor

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shall include the results of each compliance review in its next regularly scheduled report to City, as required by Section 9.

8. Education & Outreach.

8.1. In 2022, and annually thereafter, Contractor shall provide the following to all its customers under the Agreement:

8.1.1. Information on the Compostable Materials Generator’s requirements to properly separate materials in appropriate containers.

8.1.2. Information on methods for: the prevention of Compostable Materials generation, recycling Compostable Materials on-site, sending Compostable Materials to community composting, and any other local requirements regarding Compostable Materials.

8.1.3. Information regarding the methane reduction benefits of reducing the landfill disposal of Compostable Materials, and the methods of Compostable Materials recovery contemplated by the Agreement.

8.1.4. Information regarding how to recover Compostable Materials.

8.1.5. Information related to the public health and safety and environmental impacts associated with the landfill disposal of Compostable Materials.

8.2. The above information will be provided, at a minimum, through print and/or electronic media, and may also be provided through workshops, meetings and/or on-site visits.

8.3. Educational materials provided pursuant to the above shall be translated into Spanish.

9. Reporting.

9.1. Beginning on the date of this agreement, Contractor shall provide the following information to City as part of Contractor’s regularly scheduled quarterly reports under the Agreement:

9.1.1. For information provided by Contractor pursuant to Section 8 above:
(a) Copies of all such information (including flyers, brochures, newsletters, invoice messaging, website and social media postings, emails, and other electronic messages).
(b) The date the information was disseminated or the direct contact made. For website and social media postings, this shall be the date posted. (c) To whom the information was disseminated or the direct contact made. For mass distributions such as mailings or bill inserts, Contractor may provide the type and number of accounts receiving the information, rather than listing each recipient individually.

9.1.2. For Route Reviews and Compliance Reviews:

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(a) The date the review was conducted.
(b) The name and title of each person conducting the review. (c) A list of the account names and addresses covered by the review. (d) For Route Reviews, a description of each Hauler Route reviewed, including Contractor’s route number and a description of the Hauler Route area. (e) For Route Reviews, the results of such review (i.e. the addresses where any Prohibited Container Contaminants were found), and any photographs taken. (f) For Compliance Reviews, the results of such review (i.e. Contractor’s findings as to whether the customers reviewed are subscribed for Compostable Materials collection service, have an applicable waiver, or neither), and any relevant evidence supporting such findings (e.g. account records). (g) Copies of any educational materials issued pursuant to such reviews.

9.1.3. Documentation relating to observed Prohibited Container Contaminants, whether observed during Route Reviews or otherwise:
(a) Copies of the form of each notice issued to generators for Prohibited Container Contaminants, as well as, for each such form, a list of the Generators to which such notice was issued, the date of issuance, the Generator’s name and service address, and the reason for issuance (if the form is used for multiple reasons). This information will also be provided monthly to Zero Waste Sonoma if City requests.
(b) The number of times notices were issued to Generators for Prohibited Container Contaminants.
(c) The number of Containers where the contents were disposed due to observation of Prohibited Container Contaminants.

9.1.4. A description of Contractor’s process for determining the level of Container contamination under the Agreement.

10. The Rates effective January 1, 2023 shall be adjusted as provided in the Agreement, with the following modifications:

Step 1. Increase the Disposal Tipping Fee Component of each Rate by 2.86%, over and above the adjustment required by Section 7.3.B of the Agreement.

Step 2. Calculate the Rates as provided in Sections 7.3.A through 7.3.E of the Agreement, but including the adjustment to the Disposal Tipping Fee Component required by Step 1.

Step 3: Increase the Rates as calculated in Step 2 by an additional 3.3% to arrive at the Rates effective January 1, 2023.

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Step 4: Reallocate the components of each Rate as follows: (A) Take the Rate as calculated in Step 3. (B) Subtract the Retroactive Disposal Tipping Fee Component and the Retroactive Compostable Processing Fee Component. (C) Allocate the remainder among the Collection Component, the Disposal Tipping Fee Component and the Compostable Processing Fee Component, in the same proportion that those components had to each other in the Rates as calculated in Step 2.

For clarity, the above adjustments shall not affect calculation of the Retroactive Disposal Tipping Fee Component or the Retroactive Compostable Processing Fee Component for 2023 or subsequent years, or changes to the Disposal Tipping Fee Component after 2023, all of which shall be calculated based on changes in the applicable tipping fees.

This Section 10 assumes that no other adjustments under the Agreement will apply to the Rates effective January 1, 2023 (e.g. due to a change in City fees). If other adjustments do apply, appropriate additional adjustments shall be made as provided under the Agreement.

11. Section 18988.1 and 18988.2 Compliance. Contractor hereby notifies City that Compostable Materials collected pursuant to the Agreement is currently being delivered to the following facility(ies), either directly or after transfer at County facilities: Waste Management EarthCare Compost in Novato; Cold Creek Compost in Ukiah; West Contra Costa Landfill Composting Facility in Richmond . City hereby approves delivery of Compostable Materials to such facility(ies). Contractor shall comply with its obligations under this Amendment and the obligations that by operation of law are imposed upon it directly pursuant to Chapter 12 of the SB 1383 Regulations.

12. Future Changes. The parties acknowledge that future changes to this Amendment or the Agreement may be desirable to assist the parties with their respective compliance obligations under the SB 1383 Regulations or subsequent amendments thereto or interpretations thereof.

The parties agree to negotiate any such proposed changes in good faith. The foregoing shall not be deemed to limit either party’s rights or remedies under the Agreement.

13. Miscellaneous. In the event of any conflict between this Amendment and the Agreement, this Amendment shall govern. Section headings in this Amendment are for convenience only and shall not be used in the interpretation of this Amendment. This Amendment may be executed in counterparts and/or by electronic signature (e.g. DocuSign). As used in this Amendment, “including” and its variants mean “including without limitation.” [Remainder of this page intentionally left blank]

8.A.b
Packet Pg. 171 Attachment: Franchise Amendment - Final (3542 : First amendment to the Franchise Agreement) 6 OAK #4871-2333-2884 v2
IN WITNESS WHEREOF, this Amendment is entered into as of the date first written above.

City of Healdsburg
By:

Name:

Title:

Date:____________________________
APPROVED AS TO FORM:
________________________________
City Attorney
ATTEST:
________________________________
City Clerk
Recology Sonoma Marin
By:

Name: Salvatore M. Coniglio
Title: Chief Executive Officer
Date:____________________________

8.A.b
Packet Pg. 172 Attachment: Franchise Amendment - Final (3542 : First amendment to the Franchise Agreement) 7 OAK #4871-2333-2884 v2
Exhibit A

DEFINITIONS
“Blue Container” means a Container colored as follows: (a) the lid shall be blue, or (b) the body shall be blue and the lid shall be either blue, gray, or black. Hardware such as hinges and wheels may be any color.
“Container” means any Cart, Bin or Debris Box.
“Gray Container” means a Container colored as follows: (a) the lid shall be gray or black, or (b) the body shall be gray or black and the lid shall be gray or black. Hardware such as hinges and wheels may be any color.
“Green Container” means a Container colored as follows: (a) the lid shall be green, or (b) the body shall be green and the lid shall be green, gray, or black. Hardware such as hinges and wheels may be any color.
“Hauler Route” means the designated weekly itinerary or sequence of stops scheduled to be performed by one collection vehicle providing regularly scheduled Solid Waste, Recyclable Material or Compostable Materials collection services (not on-call or Bulky Item/Abandoned Waste) within the Contractor’s collection service area under the Agreement. “Compostable Materials” means wastes comprising material originated from living organisms and their metabolic waste products, including food, green material, landscape and pruning waste, clean unpainted/untreated wood (with no nails, wire, etc.), paper products, and printing and writing paper, but excluding textiles and carpets, manure, biosolids, digestate, sludges, non-compostable paper, Construction & Demolition Debris, and Hazardous Waste. No material shall be considered Compostable Materials unless it has been segregated by the Generator for separate collection.

The list of materials may be changed upon mutual agreement and as authorized by the operating permit of the Designated Compostable Materials Facility. “Prohibited Container Contaminants” means any of the following:
(a) Non-Compostable Materials placed in the Green Container, including but not limited to textiles and carpets, manure, biosolids, digestate, sludges, non-compostable paper, Construction & Demolition Debris, and Hazardous Waste;
(b) Materials placed in the Gray Container that are specifically identified under the Agreement for collection in the Green Container or Blue Container; (c) Non-Recyclable Materials placed in the Blue Container. Paper products and printing and writing paper may be considered acceptable and not considered Prohibited Container Contaminants if they are placed in the Blue Container.
“Route Review” means a visual inspection of Containers along a Hauler Route for the purpose of identifying Prohibited Container Contaminants, which may include mechanical inspection methods such as use of cameras.

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Packet Pg. 173 Attachment: Franchise Amendment - Final (3542 : First amendment to the Franchise Agreement) 8 OAK #4871-2333-2884 v2
“SB 1383 Regulations” means the Short-lived Climate Pollutants (SLCP): Organic Waste Reductions regulations adopted by the California Department of Resources Recycling and Recovery (“CalRecycle”) in 2020.

For purposes of this Amendment, the following terms (whether or not capitalized) shall have the meanings given to them in the SB 1383 Regulations, unless the context indicates a different meaning was intended: biosolids, digestate, food, non-compostable paper, paper products, printing and writing paper, sludges.

8.A.b
Packet Pg. 174 Attachment: Franchise Amendment - Final (3542 : First amendment to the Franchise Agreement)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 4, 2022
SUBJECT: Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement
PREPARED BY: Larry Zimmer, Public Works Director
STRATEGIC INITIATIVE(S):

Provide Effective Governance
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):

Adopt a Resolution approving an Omnibus Amendment to the Waste Delivery Agreement and the Franchise Hauler Agreement to be Bound by City's Waste Deliver Commitment.

COMMUNITY ENGAGEMENT/OUTREACH:

BACKGROUND:

On January 18, 2011, the City Council entered into a franchise agreement with Redwood Empire Disposal, Inc. (RED), for the exclusive right to provide refuse collection, including construction and demolition debris, in the City of Healdsburg (City). RED was owned by The Ratto Group.

On December 23, 2017, Recology Sonoma Marin (Recology) officially purchased Ratto’s assets and took over the remainder of the Franchise Agreement with the City of Healdsburg. The City entered into an updated Franchise Agreement (Franchise Agreement) with Recology beginning January 1, 2021 and expiring on December 31, 2035.

The cities of Healdsburg, Cloverdale, Cotati, Rohnert Park, Santa Rosa, and Sebastopol are all party to a Waste Delivery Agreement with Republic Services (WDA) which commits each city to bring specific wastes to the County’s Central Landfill, and each city is also party to a Franchised Hauler Agreement to be Bound by City’s Waste Delivery Commitment with Republic Services (Republic) and Recology (FHA). Republic and Recology are parties to an Agreement for Operations of Sonoma County Transfer Stations and Materials Recovery Facility (Prime Subcontract), pursuant to which Republic subcontracted to Recology certain of

8.B
Packet Pg. 175
Republic’s obligations under the Amended and Restated Agreement for Operation of the Central Landfill and County Transfer Stations between the County of Sonoma and Republic.

Historically, Republic Services has been obligated through the Master Operating Agreement (MOA) to provide a Commercial Food Waste program to urban areas, including incorporated areas, as reasonably necessary to meet the diversion goals of the MOA. Such programs are paid for by gate fees imposed at the Central Landfill. Republic subcontracts with Recology, to deliver these programs, which are delivered only as cost considerations allow. The MOA and the Prime Subcontract do not require Republic or Recology to perform all duties required by SB 1383 (i.e., route reviews, contamination monitoring, etc.), thus requiring an amendment.

DISCUSSION/ANALYSIS:

Staff will provide the City Council with an oral presentation on the Omnibus Amendment to the WDA and FHA, which is provided in a format ready for adoption and attached to this report.

The Omnibus Amendment amends the WDA and the FHA with respect to Commercial Food Waste and Commercial Mixed Waste recycling and related fees.

Senate Bill 1383 (SB 1383) requires changes to the City’s solid waste program by imposing broad requirements on organic waste collection and diversion. The scale and quality of the programs required by SB 1383 are greater than what the existing WDA and FHA contemplated and as such, the City cannot rely exclusively on the MOA-based program to achieve SB 1383 compliance. In lieu of attempting compliance through a patchwork of agreements managed independently by all the cities, the County, Recology, and Republic have negotiated amendments to the MOA and Prime Subcontract to eliminate the existing commercial food waste program historically delivered by Republic through Recology. Instead, broader programs are required by SB 1383 and compliant programs will instead be delivered directly by Recology for the City under the terms of the City’s Franchise Agreement through an amendment to be presented separately.

The proposed amendments to the MOA and Prime Subcontract agreements retire the existing commercial food waste/dry waste program and eliminate the associated $4.21/ton gate fee that funds this program. The $4.21/ton rate will instead be funded on the City’s rates and annually reviewed and adjusted via the City’s Refuse Rate Index (RRI) process as provided under the Franchise Agreement. There is no direct increase in rates due to the gate fee change. Retirement of the existing program under the MOA will allow all jurisdictions to manage their SB 1383 obligations directly with the haulers through their franchise agreements. In addition, the MOA diversion goal has been adjusted to reflect that commercial food waste and dry commercial diversion will be accomplished through the franchise agreement with the City.

Staff have reviewed and recommend the City Council approve the proposed Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement.

ENVIRONMENTAL STEWARDSHIP:

8.B
Packet Pg. 176
ALTERNATIVES:

The City could not adopt the changes to the WDA and FHA in the proposed Omnibus Amendment, however, the City would need to open negotiations with Recology, Republic and the County of Sonoma to determine how a SB 1383 compliant organic waste program would be provided and funded.

FISCAL IMPACT:

There are no fiscal impacts to the City by adopting the Omnibus Amendment.

ENVIRONMENTAL ANALYSIS:

ATTACHMENT(S):

Resolution
Omnibus Amendment

8.B
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CITY OF HEALDSBURG
RESOLUTION NO. __-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING AN OMNIBUS AMENDMENT

TO THE WASTE DELIVERY AGREEMENT AND FRANCHISE
HAULER AGREEMENT TO BE BOUND BY THE CITY’S

WASTE DELIVERY COMMITMENT
WHEREAS, the City of Healdsburg is party to a Waste Delivery Agreement between the City and Republic (WDA), and also party to a Franchised Hauler’s Agreement to Be Bound by City’s Waste Delivery Commitment, between the City, Republic, and Recology (FHA); and WHEREAS, Republic and Recology are parties to an Agreement for Operations of Sonoma County Transfer Stations and Materials Recovery Facility (the “Prime Subcontract”), pursuant to which Republic subcontracted to Recology certain of Republic’s obligations under the Amended and Restated Agreement for Operation of the Central Landfill and County Transfer Stations (the “MOA”) between the County of Sonoma and Republic; and
WHEREAS, the MOA, Prime Subcontract, WDAs and FHAs (collectively, the “County Agreements”) contemplate that Recology will provide a limited program for collection of Commercial Food Waste and Dry Commercial Mixed Waste within urban areas of City (Programs), to be compensated solely through a portion of the Facility Operations Service Fee that Recology receives under the Prime Subcontract; and
WHEREAS, the Programs and related compensation contemplated by the County Agreements do not meet the requirements of SB 1383, including provision of organics service to all residential and commercial generators, periodic route reviews to monitor contamination, periodic compliance reviews to monitor participation, and detailed reporting related to the foregoing; and
WHEREAS, the needs of City to comply with SB 1383 can be best served by having City’s organic waste and Dry Commercial Mixed Waste programs fully funded under its franchise agreement with Recology, rather than attempting to implement an SB1383 compliant program by supplementing the existing (noncompliant with SB1383) Programs with additional services under City’s franchise agreement;
WHEREAS, eliminating the funding for the Programs under the Prime Subcontract will allow the Gate Rates charged to Recology (as City’s franchised hauler) on Committed City Waste delivered to the County facilities to be reduced (compared to what the Gate Rates would otherwise be) by the portion that previously funded the Programs; NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Healdsburg hereby:

1. Finds that approving this amendment is an administrative activity that will not result in direct or indirect physical changes to the environment.

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Packet Pg. 178 Attachment: Resolution (3529 : Omnibus Amendment Regarding Waste Services) Resolution No. -2022

Page 2 ends

2. Approves the Omnibus Amendment which amends both the Waste Delivery Agreement and the Franchise Hauler Agreement to be Bound by City’s Waste Delivery Commitment.

PASSED AND ADOPTED by the City Council of the City of Healdsburg, this 4th day of April 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
_________________________________ _________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

8.B.a
Packet Pg. 179 Attachment: Resolution (3529 : Omnibus Amendment Regarding Waste Services) 1 OAK #4888-0521-5254 v1

OMNIBUS AMENDMENT TO WASTE DELIVERY AGREEMENT AND
FRANCHISED HAULER’S AGREEMENT TO BE BOUND BY CITY’S WASTE DELIVERY

COMMITMENT
This Omnibus Amendment to Waste Delivery Agreement and Franchised Hauler Agreement (this “Amendment”) is entered into as of January 1, 2022, by and among the City of Healdsburg (“City”), Republic Services of Sonoma County, Inc. (“Republic”), and Recology Sonoma Marin (“Recology”).

WHEREAS, each of the cities of Cloverdale, Cotati, Healdsburg, Rohnert Park, Santa Rosa and Sebastopol (the “Committed Cities” or “Cities”) is party to a Waste Delivery Agreement between the City and Republic (each, a “WDA”), and also party to a Franchised Hauler’s Agreement To Be Bound by City’s Waste Delivery Commitment, between the City, Republic, and Recology (each, an “FHA”);
WHEREAS, Republic and Recology are parties to an Agreement for Operations of Sonoma County Transfer Stations and Materials Recovery Facility (the “Prime Subcontract”), pursuant to which Republic subcontracted to Recology certain of Republic’s obligations under the Amended and Restated Agreement for Operation of the Central Landfill and County Transfer Stations (the “MOA”) between the County of Sonoma and Republic;
WHEREAS, the MOA, Prime Subcontract, WDAs and FHAs (collectively, the “County Agreements”) contemplate that Recology will provide a limited program for collection of Commercial Food Waste and Dry Commercial Mixed Waste within urban areas of City (the “Programs”), to be compensated solely through a portion of the Facility Operations Service Fee that Recology receives under the Prime Subcontract;
WHEREAS, the Programs and related compensation contemplated by the County Agreements do not meet the requirements of SB 1383, including provision of organics service to all residential and commercial generators (not just urban customers), periodic route reviews to monitor contamination, periodic compliance reviews to monitor participation, and detailed reporting related to the foregoing;
WHEREAS, the parties believe that the needs of City to comply with SB 1383 can be best served by having City’s organic waste and Dry Commercial Mixed Waste programs fully funded under its franchise agreement with Recology, rather than attempting to implement an SB-1383 compliant program by supplementing the existing (noncompliant with SB1383) Programs with additional services under City’s franchise agreement;
WHEREAS, eliminating the funding for the Programs under the Prime Subcontract will allow the Gate Rates charged to Recology (as City’s franchised hauler) on Committed City Waste delivered to the County facilities to be reduced (compared to what the Gate Rates would otherwise be) by the portion that previously funded the Programs; NOW, THEREFORE, the parties agree as follows:

1. Effective as of April 1, 2022, and subject to Section 3 below, Section 2.3 of City’s WDA, and Sections 3 and 4 of City’s FHA (and of Exhibit C to City’s WDA, which sets forth the form of the FHA), are hereby deleted and of no further force or effect.

8.B.b
Packet Pg. 180 Attachment: Omnibus Amendment (3529 : Omnibus Amendment Regarding Waste Services) 2 OAK #4888-0521-5254 v1

2. Effective as of April 1, 2022, and subject to Section 3 below, City’s FHA is hereby amended to add the following as Section 1(a) thereof:
“To maximize route efficiency under its franchise agreement with City, Recology may collect Commercial Food Waste in its residential collection vehicles, commingled with residential organics, provided that the tonnage of Commercial Food Waste so collected in City, the other cities that are party to a Waste Delivery Agreement with Republic where Recology is the franchised hauler, and the unincorporated County combined, does not exceed 15% of the total tonnage of Commercial Food Waste collected by Recology from such jurisdictions (calculated on an aggregate (combined) basis, not jurisdiction by jurisdiction by jurisdiction), and provided further that Recology compensates Republic Services of Sonoma County, Inc. (“Republic”) appropriately for such commingled Commercial Food Waste, in a manner to be mutually agreed by County, Republic and Recology. Compliance with the preceding sentence is intended as an alternative means of complying with City’s and Recology’s obligations to deliver Committed Waste to Republic and shall not be deemed a violation thereof.”

3. The effectiveness of Sections 1 and 2 is subject to satisfaction of all of the following conditions:
(a) The MOA and Prime Subcontract are amended to, among other things: (i) adjust the Gate Rate and the Facility Operations Service Fee to eliminate the portion that funds the Programs (currently $4.21 per ton), on all tons on which such portion is included, (ii) revise Republic’s diversion tonnage goal in Section 9.2 of the MOA and Section 5.4 of the Prime Subcontract from 67,000 to 44,735 tons per year, and Recology’s diversion tonnage goal in Section 5.4 of the Prime Subcontract from 46,173 to 23,908 tons per year; (iii) delete the second sentence of the first paragraph of Section 9.7 of the MOA, and (iv) delete Section 5.16 of the Prime Subcontract, all such amendments to be effective as of April 1, 2022;
(b) On or before April 1, 2022, (i) each of County and the Committed Cities enters into a written amendment to its respective franchise agreement with Recology that includes a rate adjustment as negotiated between the City and Recology, to fund the Commercial Food Waste program (and, if continued, the Dry Commercial Mixed Waste program) provided by Recology in such jurisdiction pursuant to the franchise agreement, and (ii) each other of the Committed Cities enters into an omnibus amendment to its WDA and FHA that is identical in all material respects to this Amendment. Any of the conditions set forth in this subsection (b) may be waived by Recology in writing to the other parties hereto.

4. In the event of any conflict between this Amendment and City’s WDA or FHA, this Amendment shall govern. This Amendment may be executed in counterparts and/or by electronic signature (e.g. DocuSign). As used in this Amendment, “including” and its variants mean “including without limitation.”

5. Nothing contained herein shall change the definition of Committed Waste within the WDA. More specifically, Commercial Food Waste and Dry Commercial Mixed Waste are and shall continue to be considered Committed Wastes. This Amendment does not modify the categories of Waste exempt from payment of the Facility Operations Fee in Section 8.3 of the Prime Subcontract.

8.B.b
Packet Pg. 181 Attachment: Omnibus Amendment (3529 : Omnibus Amendment Regarding Waste Services) 3 OAK #4888-0521-5254 v1

6. Except as expressly amended herein, each of the County Agreements shall remain in full force and effect.

IN WITNESS WHEREOF, this Amendment is entered into as of the date first written above.

City of Healdsburg
By:

Name:

Title:

Date:____________________________
APPROVED AS TO FORM:
________________________________
City Attorney
ATTEST:

City Clerk
Republic Services of Sonoma County, Inc.

By:

Name:

Title:

Date:

Recology Sonoma Marin
By:

Name:

Title:

Date:

ACKNOWLEDGED:

County of Sonoma
By:

Name:

Title:

Date:____________________________

8.B.b
Packet Pg. 182 Attachment: Omnibus Amendment (3529 : Omnibus Amendment Regarding Waste Services)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 4, 2022
SUBJECT: Report on the Housing Land Trust of Sonoma County PREPARED BY: Stephen Sotomayor, Housing Administrator
STRATEGIC INITIATIVE(S):

Expand Affordable Housing Opportunities
Provide Effective Governance
RECOMMENDED ACTION(S):

Receive a Report from the Housing Land Trust of Sonoma County.

COMMUNITY ENGAGEMENT
This item will be heard by the City Council in a public meeting noticed in the timeframes setforth by California Government Code §54950 et. seq. in which time for public comment will be provided.

BACKGROUND:

The Housing Land Trust of Sonoma County (HLTSC) is a private, non-profit corporation that was established in 2002 and works in partnership with private developers and cities throughout Sonoma County to successfully provide homeownership opportunities for low-to-moderate income families.

In September 2014, the City contracted with the HLTSC to provide specialized professional services to facilitate affordable homeownership oversight. HLTSC provides essential services in qualifying homeowners and providing stewardship of the City’s housing stock, especially in ensuring that once created, the City’s housing stock remains affordable in perpetuity.

During the January 3, 2022 Regular City Council meeting, the City Council approved a Professional Services Agreement with the HLTSC to continue services in the oversight of the City’s affordable for-sale housing stock. During the Council’s discussion of this item, it was requested that the HLTSC return to the Council with a presentation on the activities of the HLTSC, how HLTSC markets available housing, and the process they use to qualify potential homeowners.

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DISCUSSION/ANALYSIS:

This item serves to provide the report back requested by the City Council on January 3, 2022. No action is requested of the Council at this time.

The Housing Land Trust of Sonoma County currently manages inclusionary for sale units spanning the Sonata, Sorrento, Chiquita, and Arden subdivisions. Additionally, the HLTSC will also provide stewardship of the inclusionary units scheduled to be built as a part of the Farmstand Subdivision.

As a part of their services, the HLTSC provides administrative support to City staff. This includes affordability monitoring, maintaining a list of potential buyers for affordable homes, conducting outreach, overseeing the selection of potential buyers to ensure they meet eligibility requirements, the development of agreements between the involved parties, and managing unit resale and refinancing.

The services of HLTSC are also included in the City’s adopted Housing Element:

H-C-10: Support the Community Land Trust model of providing affordable homeownership for the local workforce; and
Program H-10: Contract with the Housing Land Trust of Sonoma County or another suitable organization or consulting firm if needed to administer affordable housing programs within the City.

HLTSC has prepared a presentation for the City Council (Attachment A) and will be available for any questions the Council may have.

ENVIRONMENTAL STEWARDSHIP:

There is no correlation between this report and environmental stewardship.

ALTERNATIVES:

This item is informational only and therefore no alternatives are provided.

FISCAL IMPACT:

The City Council approved a $41,000 Professional Services Agreement with the HLTSC on January 3, 2022. There are no additional fiscal considerations as a part of this item.

ENVIRONMENTAL ANALYSIS:

The Professional Services Agreement is not a “project” pursuant to California Environmental Quality Act (CEQA) Guidelines 15378. (b)(4) because the contract is for professional services that do not involve commitment to any specific project that may impact the environment; therefore, no environmental review is required.

ATTACHMENT(S):

Attachement_A_HLT

9.A
Packet Pg. 184
Healdsburg Workforce Housing
Sonata, Sorrento Sq.,
Chiquita Grove & Arden

9.A.a
Packet Pg. 185 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Partnerships
City
Housing
Land Trust Developer

9.A.a
Packet Pg. 186 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Process – City – HLT - Developer

1.Developer
approaches City
with Project

2. City directs
Developer to
contact HLT re:
workforce units

3. MOU is written
outlining # of
workforce units in
project

4. Regulatory
Agreements
Drafted

5. Developer puts
in an application

6. Entitlement
process/City
project approval

7. Buyers qualified.

Regulatory docs
signed between the
partners for
workforce

8. Developer
Builds Workforce
Units

9. All parties
prepare for COE

9.A.a
Packet Pg. 187 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Developer donates land
to the City
City deeds land for
housing to Land
Trust
Land Trust holds
land in trust as
community benefit
Land Trust Leases
land to Family
Developer sells
house to the Family
• Family enters a 99-year renewable ground
lease
• has exclusive rights to the property, like
ownership.
• agrees to sell to same income level to keep
the home affordable in perpetuity.

Close of Escrow: HOW DOES IT WORK?
Family owns the home and has a 30-year
fixed mortgage

9.A.a
Packet Pg. 188 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Qualifying information compiled by Lender and HLT:
Date of Application
Name of Applicants
AMI %
Number of people in household
FICO Score
Annual Income
Qualifying ratios: % of housing costs to income and % of debt to income Purchase price
Down payment
Employer
1st Time homebuyer: Yes/No
Live or work in City: Yes/No*
*Preference given to qualified applicants who have lived or worked in the City, application open to all

9.A.a
Packet Pg. 189 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Connect with HLT
www.housinglandtrust.org
707-766-8875
Download application
from website and submit
application to HLT
HLT will contact applicant
to confirm application has
been received
HLT informs applicant
that a letter will be sent
with application status
once it is reviewed
Team reviews application
adhering to qualifying
information checklist
A letter is sent to the
applicant with the status
of the application
The letter may ask for
additional information
Additional information is
reviewed and the lender
may contact the applicant
Qualified applicant will be
given preference as
determined by the City
Once lender pre-approves
the applicant for a home
loan then HLT is informed
HLT meets with applicant
to deliver homebuyer
education
Applicant enters into a
purchase contract with
the builder who will sell
the home
Open escrow to close on
the property, and enter
into a ground lease with
resale restrictions
HLT manages the close of
escrow, explaining the
steps and attending the
signing
HLT stays in touch with
homeowner throughout
ownership period
providing ongoing
stewardship
At resale, HLT manages
the process, repeating all
the steps for qualifying
the next buyer

APPLICATION PROCESS FOR HOMEOWNERSHIP PROGRAM

WITH HOUSING LAND TRUST (HLT)

9.A.a
Packet Pg. 190 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Sonoma County, California
FY 2021 Median Household Income Schedule

HOUSEHOLD
SIZE
Extremely LOW
30%

VERY LOW
50%
LOW
80%
MEDIAN
100%

MODERATE
120%
1 24,450 40,750 65,150 72,300 86,750
2 27,950 46,550 74,450 82,650 99,150
3 31,450 52,350 83,750 92,950 111,550
4 34.900 58,150 93,050 103,330 123,950
5 37,700 62,850 100,500 111,550 133,850
6 40,500 67,500 107,950 119,850 143,800
7 43,300 72,150 115,400 128,100 153,700
8 46,100 76,800 122,850 136,350 163,600
This median income schedule is based on the FY 2021 median household income for Sonoma County as determined by the California Department of Housing and Community Development ("HCD"). Household income is adjusted for family size in accordance with HCD standard adjustment factors. The current median income became effective on April 26, 2021.

9.A.a
Packet Pg. 191 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) 8 Very Low Income Occupations (<$40,750 annual wage)*
 Home Health Aides  Telemarketers
 Childcare Workers  Waiters/Waitresses
 Farmworkers  Retail Salesperson
 Cashiers  Hairstylists
 Janitors  Bartenders
Low Income Occupations ($40,751 – 65,150 annual wage)*
 Preschool Teachers  Office and Administrative Support  Truck Drivers  Massage Therapists
 Bookkeeping, Accounting Clerks  Medical Assistants
 Bus Drivers  Construction Laborers
 Pest Control Workers  Clerks
Median/Moderate Income Occupations ($65,151 – $86,750 annual wage)*  Family/School Social Workers  Social Workers
 Kindergarten Teachers  Librarians
 Paralegals/Legal Assistants  Graphic Designers
 Biological Technicians  Advertising Sales Agents
 Landscape Architects  Carpenters
*Based on a single person living alone
Source: Occupational Employment Statistics (2021 – 1st Quarter) for Sonoma County, www.labormarketinfo.edd.ca.gov; HUD 2021 Income Limits.

Who is “Lower-Income”?

9.A.a
Packet Pg. 192 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) The price of the home is tied to income, so it remains
affordable in perpetuity.

The land is a community asset with homes on it set
aside for the workforce.

HOUSING OUR WORKFORCE - IT IS ALL ABOUT THE PAYCHECK

9.A.a
Packet Pg. 193 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Workforce Housing to Date
20 affordable homes at 4 subdivisions:
• Sonata 2013
• Sorrento Square 2016-2018
• Chiquita Grove 2017
• Arden 2021-2022
2 preserved homes:
• Palomino Court
All homes will be affordable in perpetuity

9.A.a
Packet Pg. 194 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Sonata Subdivision
6 Homes
• 6 Homes
• 3 Bedrooms, 2.5 baths & garage
• Serving very low and low income households
• Prices range from $158,000 to $253,000
• Homes occupied in 2013
• Builder: DR Horton, America’s Builder
• Have had 2 resales so 6 homes have now served 8 families!

9.A.a
Packet Pg. 195 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

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Packet Pg. 196 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) One house in the community can be home to family after family because the home stays affordable.

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Packet Pg. 197 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

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Packet Pg. 198 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) • 6 Homes
• 2-3 Bedrooms, 2.5 baths & garage
• Serving low to moderate income households
• Prices range from $250,000 to $350,000
• Builder: elecora by Comstock Homes
Sorrento Square

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Packet Pg. 199 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

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Packet Pg. 200 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

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Packet Pg. 201 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Chiquita Grove
4 Homes
• 4 Townhomes
• 2 Bedrooms, 2.5 baths & garage
• Serving very low, low and moderate income households
• Prices range from $160,000 to $350,000
• Homes occupied in 2017
• Builder: Barry Swenson Builders

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Packet Pg. 202 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

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Packet Pg. 203 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) HOME

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Packet Pg. 204 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Arden
• 4 Homes
• 2 currently occupied, 2 in contract
• 3 Bedrooms, 2.5 baths & garage
• Serving low and moderate income households
• Prices range from $263,000 to $385,000
• Builder: Vanguard Properties

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Packet Pg. 205 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

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Packet Pg. 206 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Why Does Subsidy Retention Matter?
Protecting the Public Investment
• Eliminate the need for government & private subsidies in future years as units are resold
• Ties subsidy to the unit, not the family
• Maintaining income targeted workforce housing stock
• Creating community wealth and personal wealth while
maintaining future affordability

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Packet Pg. 207 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Challenges
• There are not enough units available for all of the applicants needing housing. There simply are not enough units available to serve the current demand. • Low Income Households are more likely to qualify than Very Low; the debt to income ratio is sometimes too high, or a qualified applicant may decline to accept the opportunity to purchase a house as the mortgage is a long time commitment and there are fears of job security to guarantee paying off a long term loan. • Challenges that can be resolved with City and HLT collaboration:

Continue to encourage employers to view workforce housing as an opportunity to provide an employee benefit same as information on retirement and health plans.

Sharing housing information in the form of an announcement, posted, in a meeting or newsletter will result in employee applications. The benefit of housing to employees will directly affect employers.

Creating a fund that will be ready to be used for preserving Healdsburg’s existing affordable housing stock.

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Packet Pg. 208 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) What are we accomplishing?
• Making homeownership a reality for the workforce in our community, allowing for preference for qualified applicants who have live or work in Healdsburg
• Strengthening the fabric of our community by providing our workforce a secure place to live
• Investing in a permanent subsidy that will help generation after generation by partnering with a non-profit in HLT to steward the land that is a finite resource
• Deliver stewardship to families to ensure successful
homeownership
• Creating community wealth in perpetuity by preserving land that will benefit the community forever

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Packet Pg. 209 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) Thank You!
THANK YOU!
Thank You!

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Packet Pg. 210 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report) THANK YOU!
THANK YOU! 9.A.a
Packet Pg. 211 Attachment: Attachement_A_HLT (3561 : HLT Sonoma County Report)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 4, 2022
SUBJECT: Appointments of the City Selection Committee and Mayors' and Councilmembers' Association Board of Directors
PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Review letters of interest for the various Boards and Commissions and by motion, direct the Mayor or his Alternate on how to vote at the City Selection Committee and Sonoma County Mayors’ and Councilmembers’ Association Board meeting on April 14, 2022.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

The City of Healdsburg is a member of the Sonoma County City Selection Committee and the Sonoma County Mayors’ and Councilmembers’ Association. Each body appoints members to various regional Boards and Commissions.

DISCUSSION/ANALYSIS:

At the April 14, 2022 meeting, the City Selection Committee and the Mayors’ and Councilmembers’ Board of Directors will be considering filling vacancies on various boards and commissions. The vacancies and interested persons are as follows:

City Selection Committee Appointments:

1. Airport Land Use Commission – To fill the vacated seat of Jack Tibbetts (Santa Rosa) 4-year term.

No letters were received for this specific opening.

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Packet Pg. 212

2. Local Agency Formation Commission – One position, to fill expiring term of Councilmember Pam Stafford (Rohnert Park), 4-year term.

One letter received – Pam Stafford, Rohnert Park

3. Remote Access Network (RAN), one position, must be filled by a Mayor. *Note: The RAN appointment has been vacant for two years. Their next meeting is on April 14th. The board has been advised that this position remains vacant. Meetings are as needed and listed as annual but it is anticipated RAN may have several meetings this year.

No letters were received for this specific opening.

Copies of the letters of interest are attached.

It is also recommended that if late nominations are received or if the City Selection Committee or MC Board recommends alternates, that the City Council authorize the Mayor or his designated representative, the authority to vote on these late nominations or recommendations at the City Selection Meeting or MC board meeting.

ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

ALTERNATIVES:

No alternatives are proposed.

FISCAL IMPACT:

There is no fiscal impact related to the proposed action.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Stafford - Letter of Interest

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Packet Pg. 214 Attachment: Stafford - Letter of Interest (3557 : Mayors and Councilmembers appointments 4.04.2022)

Healdsburg City CouncilApril 4, 2022

Healdsburg City Council
April 4, 2022