Hollister City Council
June 22, 2026

www.raftelis.com

PROTEST FORM

To protest the proposed water rate increase, you may complete this Protest Form and mail, or hand deliver to:

City of Hollister, City Clerk
375 Fifth Street
Hollister, CA 95023

To be counted, the City must receive a mailed written protest no later than 5:00 PM JANUARY 20, 2026. Protests may be hand-delivered up until the end of the Public Hearing. Only one protest is allowed per water account.

Parcel APN or Address: ________________________________________________________ ☐ I protest the proposed water rate increase to fund operation, maintenance and replacement costs related to providing water service to properties within the City of Hollister. ☐ I hereby declare under penalty of perjury that I am the owner or account holder of the above- listed property or the authorized representative of the owner of the above listed property.

Please sign here: ___________________________
___________________________
Please print the property owner/account holder name(s) here: __________________________________

CONTENIDO PARA NOTIFICACIÓN DE PROPOSICIÓN 218

AUDIENCIA PUBLICA SOBRE LAS TARIFAS DE AGUA

Se notifica que se considerarán las propuestas de aumentos de las tarifas y cargos de agua de la ciudad de Hollister.

20 de enero de 2026, a las 6:30 PM en 375 Fifth Street, Hollister, CA 95023

Los aumentos de tarifas propuestos serán efectivos para los servicios proporcionados a partir de el 16 de febrero de 2026, si son aprobados por el Ayuntamiento.

Historial:

La ciudad de Hollister (la Ciudad) está sujeta a la Proposición 218 y requerida bajo la ley a cobrarle a sus clientes solo lo necesario para proporcionar el servicio de agua. El sistema de agua de la Ciudad suministra agua potable segura de manera fiable a más de 7500 cuentas de clientes. Para hacer esto, la Ciudad mantiene cinco pozos de agua subterránea, gestiona dos plantas de tratamiento de agua en colaboración con otras empresas de servicios públicos y opera 260 millas de tuberías principales de agua.

La Ciudad no ha aumentado sus tarifas de agua desde 2018. La inflación ha subido 25% desde entonces, incrementando sustancialmente el costo del mantenimiento de la infraestructura de agua de la Ciudad, los materiales de tratamiento y el agua comprada. Actualmente, la Ciudad mantiene las tarifas de agua más bajas entre ocho comunidades vecinas. La Ciudad está proponiendo tarifas de agua aumentadas para garantizar la inversión continua en la infraestructura de agua que sirve a nuestra comunidad, para cubrir las compras de agua necesarias y suministrar agua que usted puede confiar.

Acerca de los cambios propuestos:

El fondo de agua de la Ciudad opera actualmente con un déficit, lo que plantea desafíos para el sistema de agua. La Ciudad contrató a Raftelis, un consultor independiente, para realizar un estudio de tarifas de agua. El estudio incluyó una revisión comprensiva de los ingresos futuros proyectados, los gastos de operación y mantenimiento (O&M) y los gastos de proyecto de capital (Estudio de Tarifas de Agua) de la Ciudad. El Estudio de Tarifas de Agua recomienda aumentos de tarifa para que el fondo de agua pueda seguir suministrando servicio de agua confiable.

Audiencia pública y procedimiento de protesta:

De conformidad con la ley estatal, protestas pueden ser proveídas por cualquier cliente de la Ciudad o propietario sujeto a los aumentos de tarifa propuestos, en contra cualquiera o todos los aumentos de tarifa descritos en este aviso. Las protestas por escrito pueden ser presentados personalmente ante el Ayuntamiento en la audiencia pública. También se pueden enviar por correo a la siguiente dirección:

Ciudad de Hollister, Oficina de la Secretaria Municipal
375 Fifth Street, Hollister, CA 95023

Ambas protestas, en persona y por correo, deben recibirse antes de la finalización de la Audiencia Pública a las 6:30 PM, el 20 de enero de 2026. Cada protesta escrita debe identificar claramente la propiedad o cuenta, hacer referencia a las tarifas propuestas, y debe incluir la firma del propietario o titular de la cuenta, según corresponda. Debido a la imposibilidad de verificar la autenticidad de cada protesta individua, no se aceptarán las protestas recibidas por teléfono, correo electrónico, o a través de redes sociales, incluidas, pero no limitado a, Facebook o X. Se invita a todas las personas interesadas a asistir a la Audiencia Pública y presentar protestas escritas y/o comentarios orales sobre los cambios de tarifas propuestos referenciado aquí. Se permite solo una protesta por cuenta de agua de la Ciudad. Los comentarios orales realizados en la audiencia pública se considerarán protestas formales de los aumentos de tarifas propuestos si van acompañados de una protesta escrita estableciendo la información requerida (como se indicó anteriormente). Si protestas por escrito son presentadas por la mayoría de los propietarios o titulares de cuentas afectados, no se aplicarán los aumentos de tarifas propuestos.

Tarifas de agua propuestas:

Los resultados del estudio de tarifas dieron como resultado aumentos propuestos en las tarifas de agua.

La tabla abajo describe las tarifas fijas (un cargo mensual basado en el tamaño del medidor, independientemente del consumo de agua) y los cargos por consumo (un cargo basado en el consumo de agua). El cargo por consumo para clientes residenciales sigue una estructura escalonada, donde el cargo aumenta con el consumo de agua.

Información adicional
El estudio tarifario del servicio de agua, cual detalla el sistema de agua, su presupuesto y la derivación de las tarifas, está disponible en el sitio web de la Ciudad: www.hollister.ca.gov .

Si tiene alguna pregunta, comuníquese con Cassandra Orozco al (831) 636-4370 o [email protected].

FORMA DE PROTESTA

Para protestar los aumentos de tarifas propuestos, usted puede completar esta Forma de Protesta y envirar por correo, o entregar en mano a:

Ciudad de Hollister, Oficina de la Secretaria Municipal
375 Fifth Street
Hollister, CA 95023

Para que se cuente, la Ciudad debe recibir la protesta por escrito enviada por correo, no mas tardar a las 5:00 PM, el 20 de enero de 2026. Protestas pueden ser entregadas en mano hasta el final de la Audiencia Pública. Solo una protesta es permitida por cuenta de agua.

Numero de Parcela o Dirección:
______________________________________________________________________________ ☐ Yo protesto contra el aumento propuesto de tarifas de aguas para financiar los costos de operación, mantenimiento, y reemplazos relacionados con suministro del servicio de agua a las propiedades dentro de la ciudad de Hollister.
☐ Por la presente yo declaro bajo pena de perjurio que soy el propietario o el titular de cuenta de la propiedad mencionada arriba, o el representante autorizado del propietario de la propiedad mencionada arriba.

Por favor firme aquí: ________________________________________________________________ ____________________________________________________________________________________ Por favor imprime el nombre del propietario/titular de cuenta aquí:
____________________________________________________________________________________

1 City of Hollister
Water Rate Study
Public Hearing
January 20, 2026

What is a Rate Study?
A financial planning and rate setting process that:

Community Objectives:

Conservation, Affordability
Fairness & Equity
Rate and Revenue Stability
Promotes a Utility Financial
Viability by Recovering
Costs:

O&M
Capital
Reserves
Debt Service
Derives Legally
Defensible Rates &
Charges
2 Page 194 of 275

Rate Study Process
04 What is important?
Identify financial goals and pricing objectives01
02 03
05 Financial Plan –How much $?
Evaluate operating and capital costs; conduct cash
flow and scenario analysis
Rate Design –How will customers pay?
Conduct rate calculations and customer impact analyses
Study Documentation
Rate study report; review of rates by legal
counsel
Rate Adoption
Notice customers, host Public
Hearing, collect and count protests,
consider adoption of rates / charges
Stakeholder Engagement
(start early and often)3 Page 195 of 275

Why Would the City do a Water
Rate Study?
•Rates must keep up with the City’s
costs to operate the utilities
•Utility service is not like other government
services (Police, Fire, Libraries, Parks)
that are funded by tax dollars from the
General Fund
•The water utilities are primarily funded by
customer rate revenue
›It’s a non-profit business
•By law (Proposition 218), rates must be
based on the cost to serve water
4 Page 196 of 275

Water Utility is Not Covering Expenses
An Increase is long overdue: City has not raised rates/charges since 2018! Deficit: Water fund is currently operating at a deficit Lowest charges: It has the lowest water rates/charge out of 8 surrounding agencies Inflation: Post Covid-19 inflation reached highest rate since 1981 and has impacted operational and capital project costs
Inflation up 25% since 2018 (Bureau of Labor Statistics Data) Rain: FY 2023 and 2024 were wet years; selling 12% less water than in 2021 while most of your costs are fixed
Wholesale Water Costs:

Urban JPA costs up 48% since 2018
SBCWD groundwater costs up 175% since 2018
Aging Infrastructure / Deferred Maintenance5
Why Rate
Increases are
Needed:

Water Rate Survey
6 Page 198 of 275

Water & Sewer
Compared to
Other Goods
7 Page 199 of 275

Revenue must be
used to cover the
costs for which
the charge was
imposed
The charge must
be for a service
that is actually
used or
immediately
available
The fee may not
exceed the
proportional cost
to serve the
parcel
Proposition 218
Requirements –
Paraphrased
Cannot collect
more than what
you need
Must send a
written notice to
customers no less
than 45 days
before a public
hearing
8 Page 200 of 275

Financial Planning
Assumptions
9 Page 201 of 275

Reserve Target Approximate $ Value over
Study Period
Operating 20% of O&M Expenses $2.2M
Capital 2% of Asset Value $2M
Total $4.2M
10 Assumptions / Reserve Targets

11 O&M Expenses
Expenses Summary FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Expenses by Category
Personnel $2,495,056 $2,628,097 $2,725,879 $2,827,542 $2,933,249 $3,043,171 Services and Supplies $1,816,957 $1,675,072 $1,743,589 $1,814,914 $1,889,163 $1,966,457 Contractual $645,435 $664,608 $691,192 $718,840 $747,594 $777,497 Water Supply Costs $5,330,000 $5,070,000 $5,472,800 $5,907,712 $6,377,300 $6,884,335 Minor Capital $375,200 $52,300 $54,392 $56,024 $57,704 $59,436 Unfunded Accrued Liability $343,071 $323,973 $336,932 $350,409 $364,426 $379,003 Other Expenses $346,340 $350,000 $364,000 $378,560 $393,702 $409,450 Total Expenses $11,352,059 $10,764,050 $11,388,784 $12,054,001 $12,763,139 $13,519,349

City Council Selected Alternative 2
•Revenue increases do not exactly equate to customer bill impacts 12 Alternative FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
1 Revenue
Increase
95%17%3%3%2%
Capital
Execution
60%60%60%60%60%
Loan $9M
2 Revenue
Increase
60%40%2%2%2%
Capital
Execution
15%15%20%65%75%
Loan $7M

13 Capital Improvement Projects
Capital - Inflated FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Alternative 1 $0 $1,840,601 $1,840,601 $1,840,601 $1,840,601 $7,362,404 Alternative 2 $0 $460,150 $460,150 $613,534 $1,993,984 $3,527,818

Alternative 2 –Projected Reserve Balances
14 Page 206 of 275

First Year Bill Impacts
15 Page 207 of 275

Five Year Rate Schedule
16 Line No.Monthly Fixed Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 5/8"$13.29 $23.98 $33.33 $34.00 $34.68 $35.37
2 3/4"$13.29 $23.98 $33.33 $34.00 $34.68 $35.37
3 1"$28.16 $37.52 $52.15 $53.19 $54.25 $55.34
4 1 1/2"$52.68 $71.37 $99.20 $101.18 $103.20 $105.26
5 2"$78.95 $111.98 $155.65 $158.76 $161.94 $165.18
6 3"$155.53 $240.61 $334.45 $341.14 $347.96 $354.92
7 4"$232.13 $430.17 $597.94 $609.90 $622.10 $634.54
8 6"$461.93 $1,086.85 $1,510.72 $1,540.93 $1,571.75 $1,603.19 9 8"$713.61 $1,899.23 $2,639.93 $2,692.73 $2,746.58 $2,801.51 Line No.Commodity Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 Single Family Residential
2 Tier 1 $3.38 $5.81 $8.08 $8.24 $8.40 $8.57
3 Tier 2 $5.54 $7.79 $10.83 $11.05 $11.27 $11.50
4 Tier 3 $6.34 $8.85 $12.30 $12.55 $12.80 $13.06
5 Multi-Family/Industrial $4.39 $6.74 $9.37 $9.56 $9.75 $9.95 6 Commercial $4.39 $6.58 $9.15 $9.33 $9.52 $9.71
7 Landscape $4.39 $7.42 $10.31 $10.52 $10.73 $10.94 Page 208 of 275

Summary
•The City has not increased water rates in 7 years and is long overdue for a rate increase
•It has the lowest rates around for an old water systems which need reinvestment
•These rate increase will allow the water fund to get out of a deficit and continue to provide reliable water service
17 Page 209 of 275

Thank you
Contacts
Steve Gagnon, P.E./ [email protected]
Lindsay Roth / [email protected]
Journ Galvan / [email protected]
18 Page 210 of 275

Back-up Slides
19 Page 211 of 275

Alternative 1 –Projected Reserve Balances
20 Page 212 of 275

Rate Derivation
•The City gets groundwater from San Benito County Water District and surface water from the Hollister Urban Area JPA
•Groundwater is less expensive
•City aims to use less ground water due to water quality concerns •This increases the tier 1 rate because it is based on the cost of groundwater
•Therefore, revenue increases are not the same as single family residential bill impacts
21 Page 213 of 275

First Year Bill Impacts
22 Page 214 of 275

Alternative 1 Five Year Rates
23 Line No.Monthly Fixed Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 5/8"$13.29 $29.10 $34.05 $35.07 $36.12 $36.84
2 3/4"$13.29 $29.10 $34.05 $35.07 $36.12 $36.84
3 1"$28.16 $45.50 $53.24 $54.84 $56.49 $57.62
4 1 1/2"$52.68 $86.49 $101.19 $104.23 $107.36 $109.51
5 2"$78.95 $135.68 $158.75 $163.51 $168.42 $171.79
6 3"$155.53 $291.46 $341.01 $351.24 $361.78 $369.02
7 4"$232.13 $521.02 $609.59 $627.88 $646.72 $659.65
8 6"$461.93 $1,316.30 $1,540.07 $1,586.27 $1,633.86 $1,666.54 9 8"$713.61 $2,300.14 $2,691.16 $2,771.89 $2,855.05 $2,912.15 Line No.Commodity Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 Single Family Residential
2 Tier 1 $3.38 $7.09 $8.30 $8.55 $8.81 $8.99
3 Tier 2 $5.54 $9.51 $11.13 $11.46 $11.80 $12.04
4 Tier 3 $6.34 $10.80 $12.64 $13.02 $13.41 $13.68
5 Multi-Family/Industrial $4.39 $8.23 $9.63 $9.92 $10.22 $10.42 6 Commercial $4.39 $8.04 $9.41 $9.69 $9.98 $10.18
7 Landscape $4.39 $9.05 $10.59 $10.91 $11.24 $11.46 Page 215 of 275

•Introduction
•Why rate increases are needed
•Water
›Assumptions
›Financial Plan Alternatives
›Bill Impacts
24 Agenda

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: October 20, 2025
REPORT # Public Works-2025-50

AGENDA ITEM: WATER RATE STUDY PRESENTATION

DEPARTMENT: Public Works
DEPARTMENT HEAD: William Via, Public Works Director
STAFF CONTACT: William Via, Public Works Director

RECOMMENDED ACTION: Receive the presentation and provide direction to staff.

DISCUSSION: Raftelis Financial Consultants, Inc. (RFC) is in the process of completing a study of the City's water rates. The study recommends a phased increase in water rates and charges over the next 5-year period beginning on or about January 1, 2026. The proposed water rates are necessary to meet the cost of operation and maintenance of the City's water enterprise program, and to provide adequate revenue to finance Capital Improvement Projects.

The last rate study was completed in 2013 with the last rate increase taking effect on January 1, 2019. Since that time, the cost of operating the water system and delivering potable water to the City’s customers has increased and the revenue collected is not keeping pace with the expenses.

The presentation will briefly discuss the process, the financial position of the Water Enterprise Fund, the proposed rates, the next steps in the process, and will include a comparison of the City’s current rates and proposed rates with other surrounding jurisdictions.

FISCAL IMPACT: Neutral. The proposed rate increase is sufficient to address increased costs to the City's water enterprise program.

PREVIOUS COUNCIL OR COMMISSION ACTION: Last rate study and rate adoption on August 19, 2013, Resolution No. 2013-122.

CEQA: This activity is not a project pursuant to California Environmental Quality Act Statute Section 21065 and Guidelines Section 15378(b)(5), as it is an administrative activity of government that will not result in direct or a reasonably foreseeable indirect physical change in the environment.

ATTACHMENTS:

None

1 City of Hollister
Water Rate Study
Financial Plan and Rate Presentation
October 20th, 2025

•Introduction
•Why rate increases needed
•Water
›Assumptions
›Financial Plan Alternatives
›Bill Impacts
2 Agenda

What is a Rate Study?
A financial planning and rate setting process that considers:

Community Objectives:

Conservation, Affordability
Fairness & Equity
Rate and Revenue Stability
Promotes Utility Financial
Viability by Recovering
Costs:

O&M
Capital
Reserves
Debt Service
Legally Defensible
3 Page 351 of 481Page 220 of 275

Rate Study Process
04 Rate Setting Framework –What is important?
Identify financial goals and pricing objectives01
02 03
05 Financial Plan –How much $?
Evaluate operating and capital costs; conduct cash
flow and scenario analysis
Rate Design –How will customers pay?
Conduct rate calculations and customer impact analyses
Study Documentation
Rate study report; review of rates by legal
counsel
Rate Adoption
Notice customers, host Public
Hearing, collect and count protests,
consider adoption of rates / charges
Stakeholder Engagement
(start early and often)4 Page 352 of 481Page 221 of 275

Why Would the City do a Water
Rate Study?
•Rates must keep up with the City’s
costs to operate the utilities
•Utility service is not like other government
services (Police, Fire, Libraries, Parks)
that are funded by tax dollars from the
General Fund
•The water utilities are primarily funded by
customer rate revenue
›It’s a non-profit business
•By law (Proposition 218), rates must be
based on the cost to serve water
5 Page 353 of 481Page 222 of 275

Water and Sewer Utilities Are Not Covering Expenses
An Increase is long overdue: City has not raised rates/charges since 2018! Deficit: Water fund is currently operating at a deficit Lowest charges: It has the lowest water rates/charge out of 8 surrounding agencies Inflation: Post Covid-19 inflation reached highest rate since 1981 and has impacted operational and capital project costs
Inflation up 25% since 2018 (Bureau of Labor Statistics Data) Rain: FY 2023 and 2024 were wet years; selling 12% less water than in 2021 while most of your costs are fixed
Wholesale Water Costs:

Urban JPA costs up 48% since 2018
SBCWD groundwater costs up 175% since 2018
Aging Infrastructure / Deferred Maintenance6
Why Rate
Increases are
Needed:

Water Rate Survey
7 Page 355 of 481Page 224 of 275

Water & Sewer
Compared to
Other Goods
8 Page 356 of 481Page 225 of 275

Revenue must be
used to cover the
costs for which
the charge was
imposed
The charge must
be for a service
that is actually
used or
immediately
available
The fee may not
exceed the
proportional cost
to serve the
parcel
Proposition 218
Requirements –
Paraphrased
Cannot collect
more than what
you need
Must send a
written notice to
customers no less
than 45 days
before a public
hearing
9 Page 357 of 481Page 226 of 275

Water
10 Page 358 of 481Page 227 of 275

Reserve Target Approximate $ Value over
Study Period
Operating 20% of O&M Expenses $2.2M
Capital 2% of Asset Value $2M
Total $4.2M
11 Assumptions / Reserve Targets

12 O&M Expenses
Expenses Summary FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Expenses by Category
Personnel $2,495,056 $2,628,097 $2,725,879 $2,827,542 $2,933,249 $3,043,171 Services and Supplies $1,816,957 $1,675,072 $1,743,589 $1,814,914 $1,889,163 $1,966,457 Contractual $645,435 $664,608 $691,192 $718,840 $747,594 $777,497 Water Supply Costs $5,330,000 $5,070,000 $5,472,800 $5,907,712 $6,377,300 $6,884,335 Minor Capital $375,200 $52,300 $54,392 $56,024 $57,704 $59,436 Unfunded Accrued Liability $343,071 $323,973 $336,932 $350,409 $364,426 $379,003 Other Expenses $346,340 $350,000 $364,000 $378,560 $393,702 $409,450 Total Expenses $11,352,059 $10,764,050 $11,388,784 $12,054,001 $12,763,139 $13,519,349

Financial Plan Alternatives
•Revenue increases do not exactly equate to customer bill impacts 13 Alternative FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
1 Revenue
Increase
95%17%3%3%2%
Capital
Execution
60%60%60%60%60%
Loan $9M
2 Revenue
Increase
60%40%2%2%2%
Capital
Execution
15%15%20%65%75%
Loan $7M

14 Capital Improvement Projects
Capital - Inflated FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Alternative 1 $0 $1,840,601 $1,840,601 $1,840,601 $1,840,601 $7,362,404 Alternative 2 $0 $460,150 $460,150 $613,534 $1,993,984 $3,527,818

Alternative 1
15 Page 363 of 481Page 232 of 275

Alternative 1 –Projected Reserve Balances
16 Page 364 of 481Page 233 of 275

Rate Derivation
•The City gets groundwater from San Benito County Water District and surface water from the Hollister Urban Area JPA
•Groundwater is less expensive
•City aims to use less ground water due to water quality concerns •This especially increases the tier 1 rate because it is based on the cost of groundwater
•Therefore, revenue increases are not the same as single family residential bill impacts
17 Page 365 of 481Page 234 of 275

First Year Bill Impacts
18 Page 366 of 481Page 235 of 275

Alternative 1 Five Year Rates
19 Line No.Monthly Fixed Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 5/8"$13.29 $29.10 $34.05 $35.07 $36.12 $36.84
2 3/4"$13.29 $29.10 $34.05 $35.07 $36.12 $36.84
3 1"$28.16 $45.50 $53.24 $54.84 $56.49 $57.62
4 1 1/2"$52.68 $86.49 $101.19 $104.23 $107.36 $109.51
5 2"$78.95 $135.68 $158.75 $163.51 $168.42 $171.79
6 3"$155.53 $291.46 $341.01 $351.24 $361.78 $369.02
7 4"$232.13 $521.02 $609.59 $627.88 $646.72 $659.65
8 6"$461.93 $1,316.30 $1,540.07 $1,586.27 $1,633.86 $1,666.54 9 8"$713.61 $2,300.14 $2,691.16 $2,771.89 $2,855.05 $2,912.15 Line No.Commodity Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 Single Family Residential
2 Tier 1 $3.38 $7.09 $8.30 $8.55 $8.81 $8.99
3 Tier 2 $5.54 $9.51 $11.13 $11.46 $11.80 $12.04
4 Tier 3 $6.34 $10.80 $12.64 $13.02 $13.41 $13.68
5 Multi-Family/Industrial $4.39 $8.23 $9.63 $9.92 $10.22 $10.42 6 Commercial $4.39 $8.04 $9.41 $9.69 $9.98 $10.18
7 Landscape $4.39 $9.05 $10.59 $10.91 $11.24 $11.46 Page 367 of 481Page 236 of 275

Alternative 2
20 Page 368 of 481Page 237 of 275

Alternative 2 –Projected Reserve Balances
21 Page 369 of 481Page 238 of 275

First Year Bill Impacts
22 Page 370 of 481Page 239 of 275

Alternative 2 Five Year Rates
23 Line No.Monthly Fixed Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 5/8"$13.29 $23.98 $33.33 $34.00 $34.68 $35.37
2 3/4"$13.29 $23.98 $33.33 $34.00 $34.68 $35.37
3 1"$28.16 $37.52 $52.15 $53.19 $54.25 $55.34
4 1 1/2"$52.68 $71.37 $99.20 $101.18 $103.20 $105.26
5 2"$78.95 $111.98 $155.65 $158.76 $161.94 $165.18
6 3"$155.53 $240.61 $334.45 $341.14 $347.96 $354.92
7 4"$232.13 $430.17 $597.94 $609.90 $622.10 $634.54
8 6"$461.93 $1,086.85 $1,510.72 $1,540.93 $1,571.75 $1,603.19 9 8"$713.61 $1,899.23 $2,639.93 $2,692.73 $2,746.58 $2,801.51 Line No.Commodity Charges Current
Proposed FY
2026
Proposed FY
2027
Proposed FY
2028
Proposed FY
2029
Proposed FY
2030
1 Single Family Residential
2 Tier 1 $3.38 $5.81 $8.08 $8.24 $8.40 $8.57
3 Tier 2 $5.54 $7.79 $10.83 $11.05 $11.27 $11.50
4 Tier 3 $6.34 $8.85 $12.30 $12.55 $12.80 $13.06
5 Multi-Family/Industrial $4.39 $6.74 $9.37 $9.56 $9.75 $9.95 6 Commercial $4.39 $6.58 $9.15 $9.33 $9.52 $9.71
7 Landscape $4.39 $7.42 $10.31 $10.52 $10.73 $10.94 Page 371 of 481Page 240 of 275

Thank you
Contacts
Steve Gagnon, P.E./ [email protected]
Lindsay Roth / [email protected]
Journ Galvan / [email protected]
24 Page 372 of 481Page 241 of 275

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: June 22, 2026
REPORT # Finance-2026-20

AGENDA ITEM: A RESOLUTION CONFIRMING AND APPROVING THE HOUSING TRUST GUIDELINES AND A FY2026-27 BUDGET ADJUSTMENT OF $300,000 FROM GENERAL FUND 101 TO THE HOME PROGRAM REVOLVING LOAN FUND 809

DEPARTMENT: Finance Department
DEPARTMENT HEAD: Jessica O'Connell, Finance Director

COUNCIL NEXT STEPS: Adopt a resolution approving the Housing Trust Guidelines with the Budget Adjustment and submit to Housing Community Development (HCD) for review.

DISCUSSION:

On Thursday, March 26, 2026, California Attorney General Rob Bonta, California Governor Gavin Newsom, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez announced an agreed settlement with the City of Hollister to transition the City of Hollister into compliance with the state’s Housing Element Law.

One of the requirements in the stipulated agreement is the City of Hollister is required to establish a housing trust fund and deposit $300,000 to support housing for extremely low-, very low-, and low-income households. Any funds remaining in the trust fund five years after the date of deposit must be transferred to the State Building Homes and Jobs Trust Fund.

As part of the Housing Trust Program, staff developed guidelines to establish clear rules for eligible project types and fund administration, ensuring that resources are distributed transparently, efficiently, and in alignment with local housing needs. Staff established accounting procedures within the Home Program Revolving Loan Fund (Fund 809), including separate project tracking and restricted fund accounting, to administer the Housing Trust Fund in accordance with the stipulated judgment.

The stipulated agreement indicates within 30 days from when HCD finds the housing element in substantial compliance, the City must submit the draft housing trust fund program to HCD and deposit a total sum of $300,000 in the trust fund. Based on the timeline established in the stipulated agreement the anticipated date of substantial compliance for the Housing Element is June 19, 2026. To meet these stipulated deadlines, staff is seeking council to review and approve the draft Housing Trust guidelines to submit to HCD.

In addition, staff is seeking council to complete a FY2026-27 budget adjustment of $300,000 from General Fund 101 to the HOME Program Revolving Loan Fund 809. The City Council authorizes the Finance Department to make the necessary budget adjustments, interfund transfers, accounting entries, and related financial record

changes required to implement this Resolution.

FISCAL IMPACT: $300,000 transfer from General Fund 101 to the HOME Program Revolving Loan Fund 809.

PREVIOUS COUNCIL OR COMMISSION ACTION: City Manager Ana Cortez reported in closed session, the City Council voted 4-0 (Councilmember Morales absent) to enter into a stipulated judgement with the California Department of Housing & Community Development.

CEQA: This action does not constitute a project under the California Environmental Quality Act (CEQA) and review under CEQA is not required.

ATTACHMENTS:

1. Resolution

2. Petition for Writ of Mandate and Complaint

3. Ex. B - Stipulated Judgment (3.26.26)

4. Draft Housing Trust Guidelines (HCD Review)

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER APPROVING THE HOUSING TRUST GUIDELINES AND A FY2026-27
BUDGET ADJUSTMENT OF $300,000 FROM GENERAL FUND 101 TO
THE HOME PROGRAM REVOLVING LOAN FUND 809

WHEREAS, Under the State’s Housing Element Law, every city and county in California must periodically update its housing plan to meet its Regional Housing Needs Allocation (RHNA); and

WHEREAS, Hollister submitted an initial draft housing element in March 2024 and did not meet the statutory deadline of December 15, 2023. Over the next two years, the City of Hollister received feedback from HCD, but the City of Hollister did not adopt a substantially compliant housing element and failed to complete necessary rezoning in accordance with the Housing Element Law in a timely manner; and

WHEREAS, On Thursday, March 26, 2026, California Attorney General Rob Bonta, California Governor Gavin Newsom, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez announced an agreed settlement with the City of Hollister to transition the City of Hollister into compliance with the state’s Housing Element Law; and

WHEREAS, The stipulated agreement indicates within 30 days from when HCD finds the housing element in substantial compliance, the City must submit the draft housing trust fund program to HCD and deposit a total sum of $300,000 in the trust fund; and

WHEREAS, Based on the timeline established in the stipulated agreement the anticipated date of substantial compliance for the Housing Element is June 19, 2026 ; and

WHEREAS, To meet these stipulated deadlines, staff is seeking council to review and approve the draft Housing Trust guidelines to submit to HCD. In addition, staff is seeking council to complete the budget adjustment of $300,000 from General Fund 101 to the HOME Program Revolving Loan Fund 809.

NOW, THEREFORE, BE IT RESOLVED, that the City Council approves the Housing Trust Fund Administrative Guidelines for submission to the California Dep artment of Housing and Community Development (HCD), approves a FY2026-27 budget adjustment transferring $300,000 from General Fund 101 to the Home Program Revolving Loan Fund 809, and authorizes the Finance Department to make the necessary budget adjustments, interfund transfers, accounting entries, and related financial record changes required to implement this Resolution and the Housing Trust Fund Program.

Resolution No. 2026-XX

PASSED AND ADOPTED, by the City Council of the City of Hollister at a special meeting held on June 22, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Angie Gonzalez, MMC, Acting City Clerk Jennifer P. Thompson, City Attorney

I, Angie Gonzalez, MMC, Acting City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a special meeting held on June 22, 2026, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on June 22, 2026.

Angie Gonzalez, MMC
Acting City Clerk of the City of Hollister

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1 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

ROB BONTA Attorney General of California DAVID PAI Supervising Deputy Attorney General JOHN NATALIZIO Deputy Attorney General State Bar No. 311482 300 South Spring Street, Suite 1702 Los Angeles, CA 90013-1230 Telephone: (213) 269-6597 E-mail: [email protected] Attorneys for Petitioners and Plaintiffs People of California ex rel. Rob Bonta, and the California Department of Housing and Community Development EXEMPT FROM FILING FEES PER GOV. CODE § 6103

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN BENITO

PEOPLE OF THE STATE OF CALIFORNIA; CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, Petitioners and Plaintiffs,
v.

CITY OF HOLLISTER,
Respondent and Defendant.

Case No.

PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

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2 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

INTRODUCTION

1. Californians continue to suffer under a housing affordability crisis. As the Legislature has found, “[t]he lack of housing . . . is a critical problem that threatens the economic, environmental, and social quality of life in California.” (Gov. Code, § 65589.5, subd. (a)(1)(A), (B).)
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1 This crisis is “hurting millions of Californians, robbing future generations of the chance to call California home, stifling economic opportunities for workers and businesses, worsening poverty and homelessness, and undermining the state’s environmental and climate objectives.” (Id., subd. (a)(2)(A).)

2. A key contributor to this crisis is the failure of local governments to plan for the necessary housing supply. To remedy this, the Legislature requires local governments to include housing elements in their general plans. A housing element must include, among other things, an assessment of housing needs, an inventory of resources and constraints relevant to meeting those needs, and a program to implement the policies, goals, and objectives of the housing element. (§ 65580 et seq.)

3. Petitioners and Plaintiffs, PEOPLE OF THE STATE OF CALIFORNIA, acting by and through ROB BONTA, Attorney General of the State of California, and the CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (collectively, the “State”) bring this action against and Respondent and Defendant CITY OF HOLLISTER (“City” or “Hollister”) to remedy Hollister’s violation of State law. The State requests that this Court issue a writ ordering the City to bring its housing element into compliance with State law, issue a declaration that the City has failed to fulfill its planning obligations, and impose all fines, penalties, and other relief required by law and that the Court may deem appropriate.

PARTIES

4. The Attorney General, as the chief law officer of the State of California, brings this action, on behalf of the People of the State of California, under his broad independent powers to enforce state laws. (Cal. Const., Art. V, section 13; § 65585, subd. (j).) 1 Unless specified otherwise, all further statutory references are to the Government Code.

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3 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

5. The California Department of Housing and Community Development (“HCD”) is a public agency of the State of California. (§ 12804.) Among other duties, HCD is responsible for developing housing policy and building codes, for regulating manufactured homes and mobile home parks, and for enforcing state housing laws, including the Housing Element Law (§ 65580 et seq.).

6. The City of Hollister is a political subdivision of the State of California. The City is a local governmental agency charged with regulating and controlling land use and development within the City’s boundaries, including but not limited to complying with all applicable provisions of state law, such as the Housing Element Law.

VENUE AND JURISDICTION

7. This Court has jurisdiction over this action pursuant to Code of Civil Procedure sections 187, 1060, and 1085.

8. Venue is proper in this Court because the City is located in San Benito County and the violations of law alleged herein occurred in San Benito County.

LEGAL BACKGROUND

9. The Legislature has declared that “[t]he availability of housing is of vital statewide importance, and the early attainment of decent housing and a suitable living environment for every Californian . . . is a priority of the highest order.” (§ 65580, subd. (a).) California law requires that all local governments adequately plan to meet the housing needs of everyone in the community, at all economic levels.

10. To meet this requirement, every city and county must adopt and periodically update a housing element as part of its general plan. (See §§ 65302, subd. (c), 65580, et seq.) The law mandating this adoption and periodic update is known as the “Housing Element Law.” (§ 65580, et seq.) The Housing Element Law requires local governments to adopt plans and regulatory systems that provide opportunities for, and do not unduly constrain, housing development, especially for a locality’s lower-income households and workforce. As a result, housing policy in California rests largely on the effective implementation of the housing element contained in the local general plan.

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4 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

11. The housing element is a roadmap for housing development in a given community. The housing element must identify and analyze existing and projected housing needs, and must include “a statement of goals, policies, quantified objectives, financial resources, and scheduled programs for the preservation, improvement, and development of housing.” (§ 65583.) The housing element must also “identify adequate sites for housing” and “make adequate provision for the existing and projected needs of all economic segments of the community.” (Ibid.) Each housing element is also subject to review by HCD, as discussed below.

12. A local jurisdiction’s housing element must be frequently updated to ensure compliance with the Housing Element Law. (§ 65588.) Each eight-year update cycle is known as a “planning period.” (See id., subd. (f)(1).)

13. The process of updating a housing element begins with HCD’s determination of a Regional Housing Need Allocation (“RHNA”) for the region for a given planning period. (§ 65584, subd. (a)(1).) The RHNA sets goals for housing affordable to various income levels. To arrive at the RHNA, HCD starts with demographic population information from the California Department of Finance and uses a formula to calculate a figure for each region’s planning body, known as a “council of governments” (“COG”). Each COG (in this case, the San Benito Council of Governments) also uses its own demographic figures to calculate the regional housing need. Each COG coordinates with HCD to arrive at a final figure, taking into account factors not captured in the calculations. This final figure is the RHNA. (See § 65584.01.)

14. Once the RHNA is set, the COG is responsible for allocating the housing need among all of the cities and counties within that region. (§ 65584, subd. (b).) Each local government must then prepare a housing element that identifies adequate sites to accommodate that jurisdiction’s fair share of the RHNA at each income level. (§§ 65583, 65583.2.) Sites must be suitable for residential development and must be made available during the planning period. (§ 65583.2, subd. (a).) If a sufficient quantity of adequate sites is not currently available, the housing element must commit to identifying and rezoning additional sites within three years from the date of adoption. (§§ 65583, subd. (c)(1), 65583.2, subd. (h).) The housing element must also accommodate any unmet portion of the RHNA from the prior planning period. (§ 65584.09, subd. (a).)

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5 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

15. Each housing element must also evaluate governmental constraints on the development of housing for all income levels, and must show local efforts to remove governmental constraints that impede the local government’s ability to meet its share of the RHNA. (§ 65583, subd. (a)(5).)

16. Each local government must submit a draft housing element to HCD before adoption. (§ 65585, subd. (b)(1).) HCD must review the draft element and issue findings as to whether the draft substantially complies with the Housing Element Law. (Id., subds. (b)(3), (d).) After adopting the final housing element, the local government must again submit the element to HCD, and HCD must again review and report its findings to the local government. (Id., subds. (g), (h).)

17. Under Chapter 370, Statutes of 2017 (“AB 72”), codified at Government Code section 65585, subdivisions (i) and (j), HCD has authority to review any action or failure to act by a local government that it determines is inconsistent with an adopted housing element or Section 65583 of the Housing Element Law. This includes failure to implement program actions included in the housing element. HCD may revoke housing element compliance if the local government’s actions do not comply with state law.

18. AB 72 also authorizes HCD to notify the Office of the Attorney General of California that the local jurisdiction is in violation of state law for noncompliance with, among other statutes, the Housing Element Law.

19. Pursuant to Section 65585, subdivision (i)(1)(A), HCD may take any of the actions authorized by AB 72 after issuing written findings to the local government “as to whether the action or failure to act substantially complies with [Housing Element Law],” and providing a reasonable time, no longer than 30 days, for the local government to respond. (§ 65585, subd. (i)(1)(A).) Prior to an enforcement action brought by the Attorney General’s Office, HCD must also offer the City the opportunity for two in-person or telephone meetings to discuss the violation, and provide the City with written findings regarding the violation. (§ 65585, subd. (k).) As stated below, HCD has satisfied this requirement here.

FACTUAL ALLEGATIONS

20. The City is currently in the middle of its 2023-2031 Planning Period (also known as the “Sixth Cycle”).

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6 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

21. The City’s deadline to adopt a compliant Sixth Cycle housing element was December 15, 2023. To date, the City has not adopted a compliant housing element nor has it completed any required rezoning actions. Additionally, HCD has not found the City’s housing element in substantial compliance with the Housing Element Law.

22. In 2020, the City Council initiated preparation of a comprehensive update to the City’s general plan. Over the next four years, the City engaged in public participation for the preparation of its draft 2040 General Plan, including public workshops, committee/commission meetings, study sessions, and various promotional activities.

23. On March 13, 2024, the City submitted an initial draft housing element to HCD for review.

24. On June 11, 2024, HCD issued a findings letter to the City noting multiple revisions necessary for the housing element to be substantially complaint with the Housing Element Law.

25. On December 3, 2024, the City submitted a subsequent draft to HCD for review. The City also held a City Council meeting in which the City Council adopted Resolution 2024-201, adopting the 2040 General Plan and certifying the Final Environmental Impact Report.

26. On January 21, 2025, a referendum petition was filed regarding Resolution 2024-201.

27. On January 31, 2025, HCD issued a second findings letter to the City noting further revisions were necessary for the housing element to be compliant with the Housing Element Law.

28. On March 3, 2025, the City held a City Council meeting where the Council repealed the adoption of the 2040 General Plan. The effect of that repeal reinstated the City’s 2005 General Plan as the operative general plan. HCD believes the repeal also impacted both private and public development projects which were based upon the 2040 General Plan.

29. On September 9, 2025, HCD issued a letter of inquiry to the City requesting a status update on the housing element.
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2 The letter noted the City had not submitted any subsequent drafts since HCD’s second findings letter. Additionally, HCD requested that by October 9, 2025, the City 2 Available at: City of Hollister Failure to Adopt a Compliant 6th Cycle Housing Element – Letter of Inquiry.

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7 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

provide a specific timeline for submitting an updated draft housing element and obtaining compliance with the Housing Element Law.

30. On October 9, 2025, the City responded to HCD and provided a proposed timeline which would not achieve compliance with the Housing Element Law until late 2026. That same day, HCD responded that the proposed timeline was unacceptable, and demanded that a new timeline must be proposed.

31. On October 20, 2025, the City issued a further response to HCD. The City’s response failed to address the issue of timing as requested by HCD.

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3 33. On December 17, 2025, the City submitted a revised version of its draft housing element to HCD for review.

34. On February 13, 2026, HCD determined the revised draft element met the statutory requirements but could not be found in substantial compliance until the City completed and submitted the necessary rezones.

FIRST CAUSE OF ACTION
Writ of Mandate
(Code of Civ. Proc. § 1085; Gov. Code §§ 65585, 65588, 65751, 65754) [Against All Defendants]

35. The State incorporates by reference each and every allegation of the preceding paragraphs as though fully set forth herein.

36. Under the Housing Element Law, the City must ensure that its general plan contains a legally compliant housing element.

37. The City’s Sixth Cycle Housing Element was due December 15, 2023. (Gov. Code, § 65588, subd. (e).)

38. Hollister has failed to carry out its duty. The City has not adopted a legally compliant Sixth Cycle housing element and has not completed any required rezoning actions. Additionally, 3 Available at : City of Hollister Failure to Adopt a Compliant 6th Cycle Housing Element – Notice of Violation

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8 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

HCD has not found the City’s housing element in substantial compliance with the Housing Element Law.

39. The City’s failure to act is arbitrary, capricious, entirely lacking in evidentiary support, contrary to established public policy, unlawful, procedurally unfair, an abuse of discretion, and a failure to act as required by law.

40. Accordingly, a writ of mandate should issue ordering the City to adopt a compliant housing element and complete necessary rezoning (compliant with the Housing Element Law) within 120 days and to ensure, inter alia, that the City’s Sixth Cycle housing element meets the City’s RHNA goals, as determined by HCD.

41. The State has a beneficial interest in the issuance of such a writ, given their authority and mandate to enforce substantial compliance with Housing Element Law.

42. The State has exhausted all required administrative remedies or is excused from exhausting its remedies due to the futility of pursuing such remedies, among other things.

43. The State has no plain, speedy, or adequate remedy in the ordinary course of law. The only remedy provided by law for the State to obtain relief is this Petition for Writ of Mandate pursuant to Code of Civil Procedure section 1085.

SECOND CAUSE OF ACTION
Declaratory Relief
(Code of Civ. Proc. § 1060)
[Against All Defendants]

44. The State incorporates by reference each and every allegation of the preceding paragraphs as though fully set forth herein.

45. There is an actual, present controversy between the State and the City as to whether the City has complied with the Housing Element Law. The City is aware that it is not substantially compliant with the Housing Element Law, even though its Sixth Cycle housing element is now over two years overdue.

46. It is necessary and appropriate for the Court to render a declaratory judgment that sets forth the parties’ legal rights and obligations with respect to whether Hollister is substantially compliant with the Housing Element Law. Among other things, such a judgment would inform the

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9 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

parties’ conduct in connection with future contemplated amendments to the City’s housing element, including those that occur routinely at the beginning of each housing cycle.

47. The State therefore requests a declaration that the City is not substantially compliant with the Housing Element Law.

PRAYER FOR RELIEF
WHEREFORE, the State requests the Court enter judgment in favor of the State and against the City and prays as follows:

1. For a writ of mandate ordering the City of Hollister to adopt and submit to HCD a housing element, together with proof that it has completed the required rezoning, which substantially complies with the Housing Element Law, including meeting the City’s RHNA obligations for the planning period, within 120 days. (Code of Civ. Proc. § 1085; Gov. Code §§ 65585, 65751, 65754.)

2. For a declaration that the City has not substantially complied with the Housing Element Law. (Code of Civ. Proc. § 1060.)

3. For penalties, costs of investigating and prosecuting this action, and all other relief the Court deems appropriate pursuant to Government Code section 65009.1.

4. For temporary relief, including but not limited to the suspension of the City’s nonresidential permitting authority, and mandating the approval of certain residential developments. (Gov. Code §§ 65755, 65757.)

5. For statutory fines, levies and penalties.

6. For costs and reasonable attorneys’ fees.

7. For any other relief the Court may deem appropriate.

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10 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Dated: March 25, 2026 Respectfully submitted, ROB BONTA Attorney General of California DAVID PAI Supervising Deputy Attorney General JOHN M. NATALIZIO Deputy Attorney General Attorneys for Petitioners and Plaintiffs People of California ex rel. Rob Bonta, and the California Department of Housing and Community Development

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1 [PROPOSED] STIPULATED FINAL JUDGMENT AND ORDER

ROB BONTA
Attorney General of California

DAVID PAI
Supervising Deputy Attorney General
JOHN M. NATALIZIO
Deputy Attorney General
State Bar No. 311482
300 South Spring Street, Suite 1702
Los Angeles, CA 90013-1230
Telephone: (213) 269-6597
E-mail: [email protected]

Attorneys for Petitioners and Plaintiffs People
of California ex rel. Rob Bonta, and the California
Department of Housing and Community Development

EXEMPT FROM FILING FEES PER
GOV. CODE § 6103

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN BENITO

PEOPLE OF THE STATE OF
CALIFORNIA; CALIFORNIA

DEPARTMENT OF HOUSING AND

COMMUNITY DEVELOPMENT,

Petitioners and Plaintiffs,

v.

CITY OF HOLLISTER,

Respondent and Defendant.

Case No.

[PROPOSED] STIPULATED FINAL

JUDGMENT AND ORDER

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2 [PROPOSED] STIPULATED FINAL JUDGMENT AND ORDER

Petitioners and Plaintiffs, PEOPLE OF THE STATE OF CALIFORNIA, acting by and through ROB BONTA, Attorney General of the State of California, and the CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, and Respondent and Defendant CITY OF HOLLISTER (collectively, the “Parties”), having stipulated to the entry of this Stipulated Final Judgment and Order (“Judgment”) without the taking of proof and without trial or adjudication of any fact or law herein, and with all Parties having waived the right to appeal; and the Court having considered the pleadings and good cause appearing:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:

PARTIES

1. Petitioners and Plaintiffs, the PEOPLE OF THE STATE OF CALIFORNIA, by and through its Attorney General, ROB BONTA, and the DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (“HCD”) (collectively, “the State”) are charged with the enforcement of, among other things, the “Housing Element Law” (Gov. Code § 65580 et seq.)1

2. Respondent and Defendant CITY OF HOLLISTER is a political subdivision of the State of California (the “City” or “Hollister”). The City is a local governmental agency charged with regulating and controlling land use and development within the City’s boundaries, including but not limited to complying with all applicable provisions of state law, such as the Housing Element Law.

DESCRIPTION OF ACTION

3. The Housing Element Law requires the City to adopt a housing element to the City’s General Plan that substantially complies with the Housing Element Law’s terms for the 2023-2031 Planning Period (also known as the “Sixth Cycle”). (§ 65580 et seq.)

4. Any housing element adopted by the City must substantially comply with specific statutory requirements, including ensuring that the City’s planning, programs, and ordinances do not unduly constrain or impede its obligation to meet its Regional Housing Needs Allocation (“RHNA”).

1 Unless specified otherwise, all further statutory references are to the Government Code.

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5. The City’s deadline to adopt a housing element complaint with the Housing Element Law was December 15, 2023.

6. The City failed to meet the deadline to adopt a Sixth Cycle housing element that substantially complied with state law. To date, the City has not adopted a compliant housing element.

7. In 2020, the City Council initiated preparation of a comprehensive update to the City’s general plan. Over the next four years, the City engaged in public participation for the preparation of its draft 2040 General Plan, including public workshops, committee/commission meetings, study sessions, and various promotional activities.

8. On March 13, 2024, the City submitted an initial draft housing element to HCD for review.

9. On June 11, 2024, HCD issued a findings letter to the City noting multiple revisions necessary for the housing element to be substantially complaint with the Housing Element Law.

10. On December 3, 2024, the City submitted a subsequent draft to HCD for review. The City also held a City Council meeting in which the City Council adopted Resolution 2024-201, adopting the 2040 General Plan and certifying the Final Environmental Impact Report.

11. On January 21, 2025, a referendum petition was filed regarding Resolution 2024-201.

12. On January 31, 2025, HCD issued a second findings letter to the City noting further revisions were necessary for the housing element to be compliant with the Housing Element Law.

13. On March 3, 2025, the City held a City Council meeting where the Council repealed the adoption of the 2040 General Plan. The effect of that repeal reinstated the City’s 2005 General Plan as the operative general plan. HCD believes the repeal also impacted both private and public development projects which were based upon the 2040 General Plan.

14. On September 9, 2025, HCD issued a letter of inquiry to the City requesting a status update on the housing element. The letter noted the City had not submitted any subsequent drafts since HCD’s second findings letter. Additionally, HCD requested that by October 9, 2025, the City provide a specific timeline for submitting an updated draft housing element and obtaining compliance with the Housing Element Law.

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15. On October 9, 2025, the City responded to HCD and provided a proposed timeline which would not achieve compliance with the Housing Element Law until late 2026. That same day, HCD responded that the proposed timeline was unacceptable, and demanded that a new timeline must be proposed.

16. On October 20, 2025, the City issued a further response to HCD. The City’s response failed to address the issue of timing as requested by HCD.

17. On November 10, 2025, HCD issued a notice of violation.

18. On December 17, 2025, the City submitted a revised version of its draft housing element (“Revised Housing Element”) to HCD for review.

19. On February 13, 2026, HCD determined the Revised Housing Element met the statutory requirements but could not be found in substantial compliance until the City completed and submitted the necessary rezones.

20. On March 26, 2026, the State filed this action.

21. The City acknowledges that it has not timely adopted a Sixth Cycle housing element and that its housing element is therefore not currently in substantial compliance with state law.

22. This Judgment is entered to fully resolve the claims and allegations brought by the State. The State alleges that the City violated the Housing Element Law by failing to perform its statutory duty to timely adopt a legally compliant housing element to its General Plan, in substantial compliance with California laws governing a local jurisdiction’s obligations to do so, for the 2023- 2031 planning period. This Judgment is entered to fully resolve the claims and allegations made by the State.

23. The Parties agree, solely for purposes of entry of this Judgment, that this Court has jurisdiction of the subject matter hereof and over the Parties, venue is proper in this County, and this Court has jurisdiction to enter this Judgment.

24. This Judgment is made without trial or adjudication of any issue of fact or law. The Parties voluntarily enter into this Judgment in order to avoid the time, expense, and uncertainty of litigation. This Judgment shall not be used by any third party as evidence or ground for claim or suit.

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25. The Parties agree to resolve all claims and allegations pertaining to this action through this Judgment.

APPLICABILITY

26. All provisions of this Judgment shall be binding upon, and apply to the Parties, including their agents acting within the scope of their agency as well as its successors and assigns with respect to the conduct described in this Judgment.

27. The City has and will maintain the full power and authority to undertake the duties and obligations set forth in this Judgment.

28. The City shall use reasonable efforts to notify its City Councilmembers, elected officials, officers, directors, employees, and agents responsible for carrying out and effecting the terms of this Judgment and the requirements therein.

29. If a separate entity is established or reorganized so that its functions include overseeing or otherwise reviewing the operations of the City or any aspect thereof, the City agrees to ensure these functions and entities are consistent with the terms of this Judgment and will incorporate the terms of this Judgment into the oversight or review functions of the entity as necessary to ensure consistency.

THE CITY’S OBLIGATIONS

30. Adoption of a Housing Element Revision Found to be Substantially Compliant by HCD. In order to achieve substantial compliance with the Housing Element Law, the City shall adopt a compliant housing element no later than April 20, 2026, for the Sixth Cycle 2023-2031 planning period that substantially complies with the Housing Element Law, as determined in good faith by HCD in accordance with Section 65585. The City shall submit its adopted revised Housing Element to HCD for a finding of substantial compliance (“certification”) by HCD as set forth in in this Judgment. The City acknowledges that HCD’s certification will not be final until all of the following actions are completed: (1) the City adopts the Adopted Housing Element; (2) the City adopts all necessary general plan and zoning ordinance amendments; (3) the City, consistent with Government Code section 65588, subd. (e)(4)(C), completes all required rezoning; (4) the City

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transmits all adopted documents to HCD; and, (5) HCD finds the Adopted Housing Element substantially compliant with the Housing Element Law and all rezones completed.

31. Until the adoption and finding of substantial compliance of a Seventh Cycle Housing Element, the City agrees that to the extent there is any conflict or inconsistency between the housing element adopted pursuant to this Judgment and any provision in any other general plan element, the provisions of the housing element adopted pursuant to this Judgment shall supersede the conflicting or inconsistent provisions of any other general plan element, regardless of the order in which the elements are adopted.

32. Milestones and Conditions to Ensure Adoption of a Compliant Housing Element. The Parties agree that the City shall take the following required actions to complete and adopt its Sixth Cycle housing element:
c. By March 26, 2026, the City’s Planning Commission shall hold a hearing on the Revised Housing Element.
d. By April 20, 2026, the City Council shall hold a hearing to adopt the Revised Housing Element (the “Adopted Housing Element”) and conduct a first reading on the required rezoning in compliance with the Adopted Housing Element (“Rezoning Action”). e. By May 4, 2026, the City Council shall hold a public meeting to conduct a second reading and adopt the Rezoning Action.
f. By May 5, 2026, the City shall submit all documents required by HCD for certification of the Housing Element and the required rezoning. HCD shall conduct a 45-day review.
g. By June 19, 2026, after reviewing all necessary documentation and confirming completion of the Rezoning Action, HCD shall certify the Adopted Housing Element.

33. Public Participation Requirement. The City shall comply with all statutory requirements with regard to its public participation efforts including provisions to make a diligent effort to reach all economic segments of the community pursuant to Section 65583, subd. (c)(9) and public noticing pursuant to Section 65585, subd. (b)(1). Nothing in this provision precludes

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HCD from receiving and/or considering public comments as required pursuant to Section 65585, subd. (c).

34. Housing Trust Fund Program. The City shall create its own local housing trust fund as a mandatory program of its housing element for the development of housing affordable to extremely low, very low, and low-income households, migrant housing, emergency shelters, supportive housing, single-room occupancy, and transitional housing. The program must include procedures, approved by HCD, by which interested parties may apply for and receive funding from the trust fund. Within 30 days from when HCD finds the housing element in substantial compliance, the City must submit the draft housing trust fund program to HCD and deposit a total sum of $300,000 in the trust fund. Unless HCD agrees otherwise, any funds remaining in the trust fund five years after the date of deposit must be transferred to the state Building Homes and Jobs Trust Fund. The parties agree that timely implementation of this paragraph is a requirement of Policy Action H5.12:

Housing for Extremely Low-, Very Low-, and Low-Income Residents.

35. Projects During the Sixth Cycle.
a. For the duration of the Sixth Cycle, when the City receives a preliminary application or full project application for a housing development project (as defined in Section 65589.5, subd. (h)(2)) that includes affordable housing, migrant housing, emergency shelters, supportive housing, single-room occupancy, or transitional housing, it shall notify HCD of the application and include a copy of the preliminary or full project application.
b. For the duration of the Sixth Cycle, whenever the City disapproves (as defined in Section 65589.5, subd. (h)(6)) any application for housing development project that would include affordable housing, migrant housing, emergency shelters, supportive housing, single-room occupancy, or transitional housing, the zoning administrator, Planning Commission and/or City Council must make factual findings, with analysis, that the disapproval is not materially inconsistent with the City’s obligation to affirmatively further fair housing pursuant to Section 8899.50 and that it is consistent with the City’s strategy to affirmatively further fair housing pursuant to

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Section 65583. If there is disagreement regarding the sufficiency of the findings, the Parties agree to meet and confer in good faith for a period of not less than 30 days to resolve the matters set forth in this Section prior to seeking judicial relief.

ADDITIONAL PROVISIONS

36. Technical Assistance from HCD. HCD shall provide the City with technical assistance with its Sixth Cycle Housing Element Revision as follows:
a. HCD staff will commit to at least 2.5 hours per month in technical assistance telephone calls with the City, with additional time provided as capacity permits. In connection with these technical assistance telephone calls, the City agrees to make good faith, reasonable progress on the housing element revision process between these calls.
b. In order to ensure efficiency in the technical assistance provided by HCD during the housing element review process, the City agrees to make all revisions and edits to its housing element in track changes, or to devise some other method of highlighting all revisions and edits to the housing element, such that HCD can quickly identify and review the City’s revisions and edits
c. In order to allow the City to make timely and efficient revisions to its housing element in response to HCD comments, HCD agrees each formal written findings letter will consist of a single set of consolidated comments that identify specific deficiencies in the City’s draft housing element and that explains why these sections are deficient and what specific analysis or text HCD expects the City to provide to remedy the deficiency. HCD will provide the City with informal technical assistance, including sample language from other certified housing elements, as applicable, under separate cover from its formal written findings letters. Moreover, HCD agrees that each written findings letter shall be exhaustive at the time of their submission, meaning that it will not identify comments for the first time in subsequent reviews that it could have raised in earlier reviews but did not identify, for whatever reason. This provision does not preclude HCD from identifying new

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comments on subsequent reviews based on information not previously available to HCD in its prior review. This information includes, but is not limited to, third party comments, revisions to the housing element, and information from the City itself. d. To the extent that HCD is unable to meet its specific deadlines set forth herein, the deadlines for the City’s performance shall be extended to account for delays attributable to HCD’s failure to meet a specific deadline

37. Compliance with No Net Loss. The City shall maintain sites sufficient to accommodate Regional Housing Needs Allocation throughout the Sixth Cycle planning period consistent with Section 65863.

38. Compliance with Duty to Affirmatively Further Fair Housing. The City shall administer its programs and activities relating to housing and community development in a manner to affirmatively further fair housing, and to take no action that is materially inconsistent with its obligation to affirmatively further fair housing, consistent with Section 8899.50.

39. Compliance with Permit Streamlining Act for Preliminary Applications. The City shall timely process and take action on all applications submitted pursuant Section 65941.1.

40. CEQA. Consistent with Section 65759, the City shall be exempt from compliance with CEQA in connection with all of the actions it is required to undertake pursuant to the preceding paragraphs, if it complies with the requirements of Section 65759, including an environmental assessment.

41. Because the City has not had an adopted sixth cycle housing element by December 15, 2023, the City shall not use the provisions in subdivision (d)(1) or (d)(5) of Section 65589.5 to disapprove a housing development project that qualifies for approval under those provisions—that is, a housing development project under section 65589.5, subdivision (h)(2) with housing for lower income households, mixed-income households, or moderate-income households under Section 65589.5, subdivision (h)(3)—or to condition the approval of such a project in a manner that renders it infeasible for development for the use of very low, low-, or moderate-income households, or an emergency shelter, including through the use of design review standards, until such time as the City has a certified Sixth Cycle Housing Element.

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ENFORCEMENT OF JUDGMENT AND REMEDIES

42. Failure to Comply with Agreed-Upon Terms. The City’s failure to comply with the terms of this Judgment subject it to the provisions set forth under Section 65755, sub. (a) (or any other remedy available at law), in accordance with the terms herein.

43. Remedies Upon Violation. Immediately upon the City’s failure to comply with any of the terms of this Judgment, following notice and an opportunity to cure, the State may file an order to show cause on an ex parte basis with the Court. Following a hearing on the matter and upon a finding by the Court that the City failed to comply with any of the terms in this Judgment, the Court shall elect any or all provision(s) set forth under Section 65755, subdivision (a) (or any other remedy available at law), as remedies for the City’s violation(s). Should the City continue to fail to comply with any of the terms of this Judgment within a reasonable period following a court order, the State may then file a renewed order to show cause seeking any additional remedy under Section 65755, and any other remedy available at law.

44. Opportunity to Cure. Prior to enforcing this Judgment, the State shall provide written notice identifying the terms with which the City has failed to comply. The State shall allow a reasonable time to cure of 15 business days after the City’s receipt of written notice before seeking enforcement of this Judgment. To the extent the City must call a special session of its governing bodies (including the City Council) to timely cure any failure to comply with this Judgment, the City shall call such special session.

45. Civil Penalties Held in Abeyance. The City acknowledges and agrees that civil penalties set forth in Section 65009.1, subdivision (a) shall be assessed on the City beginning from January 1, 2025. These penalties shall be assessed at the statutory minimum of $10,000 per month for all months from January 1, 2025, until the City’s housing element has been certified by HCD.

These civil penalties shall be held in abeyance unless and until, after the cure period, the City fails to comply with any of its obligations contained herein. For each successive month after May 4, 2026 in which the City fails to comply with the terms of this Judgment, the Court shall modify this judgment pursuant to Government Code section 65009.1, subdivision (d)(2). If the City

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successfully satisfies the terms of the Judgment, the City will not be liable for fines under Section 65009.1.

46. Additional Remedies Upon Wrongful Denial or Imposition of Conditions on Housing Development Projects. In the event the City is found by a court of competent jurisdiction to have wrongfully denied or imposed improper conditions on any housing development projects (as defined in Section 65589.5, subdivision (h)(2)) before satisfying the Judgment, the Court shall immediately impose the fine set forth under Section 65589.5, subdivision (k)(1)(B), and shall escalate those penalties pursuant to subdivisions (k)(1)(C) and (l), until the City has complied with the terms of the Judgment.

47. Statutory Penalty Pursuant to Government Code 65585. In the event that the City does not adopt a Sixth Cycle Housing Element that HCD or the Court determines substantially complies with the law within 12 months of entry of this Judgment and after the Court conducts the required status conference and makes the findings required, the statutory penalties under Section 65585, subdivision (l)(1), shall apply. The parties agree that the terms of Section 65585, subdivision (m) shall apply here. The City agrees that nothing that has occurred before the entry into force of this Judgment shall constitute the sole basis for any claim for mitigation under Subdivision (m) of Section 65585. Continued failure by the City to bring its Sixth Cycle Housing Element into substantial compliance with the Housing Element Law will entitle the State to pursue further penalties in accordance with, subdivision (l) of Section 65585.

48. Nothing in this Judgment shall be construed to preclude the City from seeking a judicial determination on whether the City’s housing element substantially complies with the Housing Element Law in the event that HCD, pursuant to Section 65585, subdivision (h), does not find the adopted housing element substantially compliant with the Housing Element Law. If the City seeks a judicial determination on whether the City’s housing element substantially complies with the Housing Element Law, the City may file a motion staying enforcement of this judgment. The State reserves the right to oppose such a request on any basis

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Satisfaction of Judgment and Release

49. Execution of this Judgment shall constitute full and final resolution of all disputes related to this action.

50. Nothing in this Judgment shall be construed to limit the authority or ability of the Attorney General to assert its right to protect the interests of the State of California or the people of the State of California. This Judgment shall not bar the Attorney General or HCD from investigating and enforcing laws, regulations, or rules against the City for conduct not covered by this Judgment. Further, nothing in this Judgment precludes or affects the Attorney General’s right to determine and ensure compliance with this Judgment.

51. This Judgment shall be deemed satisfied once all obligations under the provisions of this Judgment are fulfilled. Upon mutual written agreement between the Parties that all obligations of this Judgment have been satisfied, the City shall file with the Court, and serve, an “Acknowledgement of Satisfaction of Judgment.” If not before then, this Judgment shall be deemed satisfied upon a finding of substantial compliance by HCD of City’s Seventh Cycle housing element, provided that all funds from the Housing Trust Fund established per Paragraph 34 has been expended or transferred to the State Building Homes and Trust Fund.

52. With the exception of the provisions on enforcement and remedies set forth in this Judgment, this Judgment releases and forever discharges any civil claim for damages, costs, attorneys’ fees, or penalties of any kind against the City by HCD and the People related to the City’s Sixth Cycle Planning Period.

53. The Attorney General, representing both the People and HCD in this action, executes this release in their official capacity and releases only claims belonging to the Attorney General and HCD.

54. The Parties shall bear their own fees and costs.

55. This Judgment may be enforced only by the Parties hereto.

Miscellaneous Provisions

56. Nothing in this Judgment shall be construed as relieving the City of the obligation to comply with all applicable local, state, and federal laws, regulations, or rules.

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57. If any portion of this Judgment is held invalid by operation of law, the remaining terms of this Judgment shall not be affected and shall remain in full force and effect.

58. The terms of this Judgment shall be governed by the laws of the State of California.

59. This Judgment contains the complete agreement entered into by the Attorney General, HCD, and the City related to the conduct at issue. No promises, representations, or warranties other than those set forth in this Judgment have been made by the Attorney General, HCD, or by the City.

This Judgment supersedes all prior communications, discussions, or understandings regarding the City’s alleged conduct.

60. This Judgment may be modified by a stipulation of the Parties as approved by the Court, or by court proceedings resulting in a modified judgment of the Court.

61. Any failure by any party to this Judgment to insist upon the strict performance by any other party of any of the provisions of this Judgment shall not be deemed a waiver of any of the provisions of this Judgment, and such party, notwithstanding such failure, shall have the right thereafter to insist upon the specific performance of any and all of the provisions of this Judgment.

62. The use of headings in this Judgment is only for ease of reference, and the headings have no legal effect and are not to be considered part of this Judgment.

63. Jurisdiction is retained by the Court, under Code of Civil Procedure section 664.6, for the purpose of enabling any party to this Judgment to apply to the Court at any time for such further orders and directions as may be necessary or appropriate for the construction or carrying out of this Judgment for enforcement of compliance herewith, and for the punishment of violations hereof, if any.

64. All notices shall be provided in writing to the following email and overnight mail.

For the City:

City of Hollister
ATTN: Office of the City Manager
375 5th Street,
Hollister, CA 95025
Email:

With a Copy to:

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Jennifer P. Thompson
Lozano Smith, Attorneys at Law
733 Marsh Street, Suite 200
San Luis Obispo, CA 93401
[email protected]
For the State:

Department of Housing and Community Development
ATTN: Melinda Coy
651 Bannon Street, Suite 400
Sacramento, CA 95811
[email protected]
With a Copy to:

David Pai
California Department of Justice, Office of the Attorney General 1515 Clay Street, Fl. 20
Oakland, CA 94612
[email protected]

John M. Natalizio
California Department of Justice, Office of the Attorney General 300 S. Spring Street, Ste. 1702
Los Angeles, CA 90013
[email protected]

65. The Clerk is ordered to enter this Judgment forthwith.

APPROVAL BY COURT

APPROVED FOR FILING and SO ORDERED this ___ day of ________________, 2026.

________________________________________
Judge of the Superior Court

CITY OF HOLLISTER

HOUSING TRUST FUND
2026

Administrative Guidelines

FINANCE DEPARTMENT

2 City Of Hollister Housing Trust Fund Administrative Guidelines

TABLE OF CONTENTS
Hollister Housing Trust Fund Overview 3
Definitions 3
Establishment of Hollister Housing Trust Fund 4
Distribution and Use of Hollister Housing Trust Fund Assets 5 Annual Evaluation and Reporting 5
Conflict of Interest 6

3 City Of Hollister Housing Trust Fund Administrative Guidelines

CITY OF HOLLISTER

HOUSING TRUST FUND ADMINISTRATIVE GUIDELINES

I. HOLLISTER HOUSING TRUST FUND OVERVIEW

A. Purpose
The purpose of the Hollister Housing Trust Fund (HHTF) is to help achieve the City of Hollister (City) General Plan goals, including those in the Housing Element, by preserving affordable housing in the City of Hollister for a specific affordability period.

To achieve this purpose, HHTF resources shall be used to provide forgivable, 1% fixed interest loans to qualified developers, public entities, groups, and individuals to undertake activities that preserve existing affordable housing and maintain long-term affordability within the City of Hollister and its Sphere of Influence.

B. Funding Source & Timeline
Within 30 days from when the Department of Housing and Community Development (HCD) finds the housing element in substantial compliance with State Housing Element law, the City must submit this draft HHTF to HCD and deposit a total sum of $300,000 in the trust fund.

C. Management of Hollister Housing Trust Fund
The HHTF shall be maintained within the City’s fund structure and separately tracked through accounting records, project accounting, and restricted fund balance classifications. The City shall maintain separate accounting records sufficient to identify all Housing Trust Fund revenues, expenditures, and remaining balances. THe HHTF shall be implemented by the City’s Finance Department.

The City's Finance Director or their designee shall serve as Administrator of the HHTF.

In accordance with City Municipal Code and financial management and budget policies, the City’s Finance Director, or designee, shall be responsible for the disbursement of HHTF funds, maintaining financial records for the HHTF, and maintaining and managing a separate account or accounts for the HHTF.

II. DEFINITIONS

A. Affordable Housing: Housing that is affordable to households with gross incomes determined to be at or below the limit for “low-income,” as defined by the U.S.

Department of Housing and Urban Development (HUD). See Section II.C.3 below.

B. Preservation of Affordable Housing: Activities that maintain the long-term affordability and habitability of existing affordable housing units, including acquisition, rehabilitation, recapitalization, extension of affordability restrictions, replacement of major building systems, and other actions necessary to prevent the loss of affordable housing serving extremely low-, very low-, and low-income households.

C. Affordability Period: 60 years.

D. Project Area: City and its sphere of influence as defined in the 2026 General Plan.

4 City Of Hollister Housing Trust Fund Administrative Guidelines E. Area Median Income or “AMI:” established for metropolitan areas or non-metropolitan counties by HUD, pursuant to 42
U.S.C. Chapter 1437 et seq., to establish local income classification levels. These classifications are also used in California housing law with respect to income eligibility limits. For current income limits, please refer to this web address:
https://www.huduser.gov/portal/datasets/il.html . Income designations, along with descriptions, are below.

1. Extremely-Low Income Household: a household having an income not exceeding thirty percent (30%) of area median income (AMI) adjusted for household size and as defined by HUD.

2. Very Low-Income Household: A household having an income not exceeding fifty percent (50%) of AMI adjusted for household size and as defined by HUD.

3. Low-Income Household: a household having an income not exceeding eighty percent (80%) of the AMI adjusted for household size and as defined by HUD

III. Establishment of Hollister Housing Trust Fund
Based on the stipulated judgment between the City and HCD the City is required to establish the HHTF and deposit $300,000 to support housing for extremely low-, very low- , and low-income households. Any funds remaining in the trust fund five years after the date of deposit must be transferred to the State Building Homes and Jobs Trust Fund.

Additionally, any interest earnings will remain in the fund and be used for eligible Housing Trust Fund purposes.

A. Notices of Funding Availability
The Housing Division of the Finance Department shall release a Notice of Funding Availability (NOFA). At a minimum, the NOFA will outline eligible activities, amount of funding available, evaluation criteria, and any community objectives.

B. Project Selection
The purpose of the NOFA is to ensure the City's ability to choose projects that will maximize the use of HHTF resources and the City's ability to meet its Housing Element goals. During a NOFA competitive process, applications will be evaluated based on how well they meet the key factors identified below:

1. Affordable Housing Preservation objectives;

2. Conformance with adopted plans and policies and current local priorities;

3. Applicant qualifications and experience;

4. Cost effectiveness and feasibility;

5. The number of affordable units preserved and period of affordability.

All applications shall be subject to an evaluation process as stated in the NOFA and final approval by the City Council.

C. Department Administration and Monitoring
The Finance Department shall administer and monitor the affordability of units with affordability covenants.

5 City Of Hollister Housing Trust Fund Administrative Guidelines D. Committed Use of HHTF
All resources remaining in the HHTF five years after the date of deposit must be transferred to the State Building Homes and Jobs Trust Fund.

IV. DISTRIBUTION AND USE OF HOLLISTER HOUSING TRUST FUND ASSETS In accordance with all City codes, regulations, policies, and any other relevant state or federal statutes and regulations, distributions may be made to private or public, for-profit, or not-for-profit entities in the form of a loan.

A. Project Types
HHTF funding shall be awarded exclusively for the preservation of existing affordable housing.

B. Funding Priorities
Priority in all distributions shall be given first to housing projects seeking to preserve existing affordable units that guarantee perpetual affordability of such housing, and second, to housing projects seeking to preserve existing affordable units that guarantee the desired affordability period or greater.

C. Eligible Costs
The City shall use HHTF resources to rehabilitate, preserve, and extend affordability restrictions on existing affordable housing developments; preserve naturally occurring affordable housing; prevent displacement of lower-income households; and maintain affordability for extremely low-, very low-, and low-income households throughout the Sixth Cycle Housing Element planning period. See section VII for specific eligible activities.

V. ANNUAL EVALUATION AND REPORTING
After the end of each fiscal year or as soon as reasonably expected thereafter, the Administrator will report to the City Council on the status and performance of the HHTF. The report shall include:

A. Annual Evaluation

1. A general evaluation of the use of the HHTF and its effectiveness at meeting stated objectives and Housing Element goals; and

2. The degree to which funded projects have helped meet the City’s regional housing needs allocation.

B. Performance Report

1. A summary statement of all HHTF activity, including a summary of uses;

2. The number of units assisted with HHTF funds, broken down by household income categories;

3. The per unit expenditure amount for the HHTF and by project;

4. The monthly rent of HHTF-assisted units or the sales prices of homeownership units.

VI. CONFLICT OF INTEREST
Government Code Section 87100 of the Political Reform Act (the “Act”)1 prohibits a public official at any level of state or local government from making, participating in making, or attempting to use the official’s position to influence a governmental decision in which the official knows or has reason to know the official has a financial interest. Government Code

6 City Of Hollister Housing Trust Fund Administrative Guidelines Section 87103 provides that an official has a “financial interest” within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect on one or more of the official’s interests as identified and distinguishable from the decision’s effect on the public generally. Taken together, these provisions of the Act prohibit an official from taking part in a decision if it is reasonably foreseeable that the decision would have a material financial effect on one or more of the official’s financial interests identified in Section 87103 distinguishable from the decision’s effect on the public generally.

VII. ELIGIBLE ACTIVITIES
A. Preservation of Existing Affordable Housing

1. Rehabilitate naturally occurring affordable housing (NOAH) to prevent conversion to market-rate housing.

2. Provide funding for rehabilitation of deed-restricted affordable housing nearing the end of its affordability term.

3. Preserve expiring affordability covenants through refinancing, acquisition, or extension agreements.

4. Support nonprofit housing acquisition programs that purchase and preserve affordable rental properties.

5. Fund capital improvements for affordable housing developments to maintain habitability, financial viability and comply with health and safety codes.

B. Affordability Extension Programs

1. Offer incentives for property owners to renew affordability restrictions beyond their original term.

2. Provide gap financing to preserve affordability in projects undergoing refinancing.

C. Homeownership Preservation

1. Provide home repair assistance to low-income homeowners to prevent loss of housing.

2. Fund accessibility modifications allowing seniors and persons with disabilities to age in place.

3. Support foreclosure prevention counseling and assistance.

4. Assist owners of deed-restricted affordable homes with rehabilitation while maintaining affordability controls.