Los Altos Hills City Council
March 17, 2022

B.4 Applicant Ranking of Subapplications
Applicants must rank each subapplication included in their grant application in order of their priority for funding. Each subapplication must be assigned a unique rank in eGrants. Applicants must provide an explanation for the rank given to each subapplication and demonstrate how it is consistent with their State or Tribal (Standard or Enhanced) Mitigation Plan.

B.5 Selection
FEMA will consider subapplications for further review based on Applicant rank. FEMA may identify a subapplication for further review out of rank order based on considerations such as program priorities, available funds, and policy factors.

FEMA will notify Applicants whose subapplications are identified for further review. However, this notification and the Applicant’s compliance with FEMA-requested pre-award activities is not considered notification or guarantee of an award.

Part VIII. Additional Program Guidance: Pre-Disaster Mitigation Program 115

C. Flood Mitigation Assistance Program
Most of the information that an Applicant or subapplicant needs to apply for an FMA award or that a Recipient or subrecipient needs to manage an FMA award is provided in Parts I through VII. This section contains supplemental guidance specific to FMA.

C.1 Eligible Properties
Properties included in a project subapplication for FMA funding must be NFIP-insured at the time of the application submittal and prior to the period of availability or application start date.

Flood insurance must be maintained through completion of the mitigation activity and for the life of the structure.

To receive an increased Federal cost share, properties must meet one of the definitions below (consistent with the legislative changes made in the Biggert-Waters Flood Insurance Reform Act of 2012):
♦ A severe repetitive loss property is a structure that:
(a) Is covered under a contract for flood insurance made available under the NFIP (b) Has incurred flood related damage –
(i) For which 4 or more separate claims payments (includes building and contents) have been made under flood insurance coverage with the amount of each such claim exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000
or
(ii) For which at least 2 separate claims payments (includes only building) have been made under such coverage, with the cumulative amount of such claims exceeding the market value of the insured structure
♦ A repetitive loss property is a structure covered by a contract for flood insurance made available under the NFIP that:
(a) Has incurred flood-related damage on 2 occasions, in which the cost of the repair, on the average, equaled or exceeded 25 percent of the market value of the structure at the time of each such flood event
and
(b) At the time of the second incidence of flood-related damage, the contract for flood insurance contains increased cost of compliance coverage The Biggert-Waters Flood Insurance Reform Act of 2012 cites the repetitive loss structure definition located in Section 1370 of the Flood Insurance Act. This is the definition that communities typically reference when trying to determine eligibility for ICC when a property has sustained multiple losses that cumulatively equal or exceed 50 percent of the structure’s Part VIII. Additional Program Guidance: Flood Mitigation Assistance Program 116

value. For a structure to be eligible for the increased Federal cost share of 90 percent, a property must meet the FMA repetitive loss definition in the Biggert-Waters Flood Insurance Reform Act of 2012.

C.2 Repetitive Loss Strategy
To be eligible for an increased Federal cost share, a FEMA-approved State or Tribal (Standard or Enhanced) Mitigation Plan that addresses repetitive loss properties must be in effect at the time of Federal award and the property that is being submitted for consideration must be a repetitive loss property. Guidance on addressing repetitive loss properties can be found in the State MultiHazard Mitigation Planning Guidance and in 44 CFR Section 201.4(c)(3)(v). The Repetitive Loss Strategy must identify the specific actions the State has taken to reduce the number of repetitive loss properties, which must include severe repetitive loss properties, and specify how the State intends to reduce the number of such repetitive loss properties. In addition, the hazard mitigation plan must describe the State’s strategy to ensure that local jurisdictions with severe repetitive loss properties take actions to reduce the number of these properties, including the development of local or Tribal Mitigation Plans. For information about the Repetitive Loss Database, see Part VI, F.2.2.

C.3 Cost Sharing
Consistent with the legislative changes made in the Biggert-Waters Flood Insurance Reform Act of 2012, cost-share availability under FMA depends on the type of properties included in the subapplication. For example, severe repetitive loss properties may receive up to 100 percent Federal funding and repetitive loss properties may receive up to 90 percent Federal funding.

FEMA contributions to the Federal share are as follows:
♦ In the case of mitigation activities to severe repetitive loss structures:
− FEMA may contribute up to 100 percent Federal funding of all eligible costs, if the activities are technically feasible and cost effective. − The expected savings to the NFIF from expected avoided damage through acquisition or relocation activities, if the activities will eliminate future payments from the NFIF for severe repetitive loss structures through an acquisition or relocation activity. − Under FMA, acquisition or relocation projects may utilize the GSTF as an alternative when projects are not cost effective using other techniques (i.e., BCA, pre-calculated benefits). This means property owners may voluntarily elect to accept the GSTF calculation in lieu of the market value of the structure, not to exceed the GSTF value, as the Federal cost share contribution. For example, if a severe repetitive loss property has a GSTF of $75,000 and a BCR of 0.52 using the FEMA BCA Toolkit ($100,000 in future losses avoided and $189,000 in project costs), they may choose to accept the GSTF value of $75,000 even though the project is not cost effective.

Part VIII. Additional Program Guidance: Flood Mitigation Assistance Program 117

− Additional information on GSTF is available in Part IV, I.5. ♦ In the case of mitigation activities to repetitive loss structures, FEMA may contribute up to 90 percent Federal funding of all eligible costs.
♦ In the case of all other mitigation activities, FEMA may contribute up to 75 percent Federal funding of all eligible costs.

Structures with varying cost-share requirements can be submitted in one application. Applicants must provide documentation in the project application showing how the final cost share was derived. The final cost share will be entered into the eGrants system and documentation showing how the final cost share was derived must be attached to the application.

C.4 Applicant Ranking of Subapplications
Applicants must rank each subapplication included in their grant application in order of priority for funding. Each subapplication must be assigned a unique rank in eGrants. Applicants must provide an explanation for the rank given to each subapplication and demonstrate how it is consistent with their State or Tribal (Standard or Enhanced) Mitigation Plan.

C.5 Selection
FEMA will identify subapplications for further review based on a number of criteria, including but not limited to savings to the NFIF, Applicant rank, and property status (e.g., repetitive loss property, severe repetitive loss property). FEMA also may identify a subapplication for further review out of rank order based on considerations such as program priorities, available funds, and other factors.

FEMA will notify Applicants whose subapplications are identified for further review. However, this notification and the Applicant’s compliance with FEMA-requested pre-award activities is not considered notification or guarantee of an award.

C.6 Failure to Make Federal Award within 5 Years
Any subapplication not awarded within 5 years of the date of the application is considered to be denied. Any funding amounts allocated for such applications will remain in the NFIF and will be made available for future awards.

Part VIII. Additional Program Guidance: Flood Mitigation Assistance Program 118

PART IX. APPENDICES
A. Acronyms
ASCE American Society of Civil Engineers
BCA
BCEGS
BCR
BFE
CBRA
CBRS
CFDA
CFR
CRS
CWA
DHS
DOB
DOP
EHP
EO
EOC
ESA
FAR
FCO
FEMA
FF
FFE
FFR
FIMA
FIRM
FMA
GAR
Benefit-Cost Analysis
Building Code Effectiveness Grading Schedule
Benefit-Cost Ratio
Base Flood Elevation
Coastal Barrier Resources Act
Coastal Barrier Resources System
Catalog of Federal Domestic Assistance
Code of Federal Regulations
Community Rating System
Clean Water Act
Department of Homeland Security
Duplication of Benefits
Duplication of Programs
Environmental Planning and Historic Preservation
Executive Order
Emergency Operation Center
Endangered Species Act
Federal Acquisition Regulations
Federal Coordinating Officer
Federal Emergency Management Agency
FEMA Form
Finished Floor Elevation
Federal Financial Report
Federal Insurance and Mitigation Administration
Flood Insurance Rate Map
Flood Mitigation Assistance
Governor’s Authorized Representative
Part IX. Appendix A: Acronyms 119

GIS Geographic Information System
GSTF Greatest Savings to the Fund
HMA Hazard Mitigation Assistance
HMGP Hazard Mitigation Grant Program
IA Individual Assistance
ICC Increased Cost of Compliance
IDEA Individuals with Disabilities Education Act
IRS Internal Revenue Service
NEMIS National Emergency Management Information System
NEPA National Environmental Policy Act
NFIA National Flood Insurance Act
NFIF National Flood Insurance Fund
NFIP National Flood Insurance Program
NFPA National Fire Protection Association
NHPA National Historic Preservation Act
OCFO Office of the Chief Financial Officer
OMB Office of Management and Budget
OPA Otherwise Protected Area
PA Public Assistance
PAS Program Administration by States
PARS Payment and Reporting System
PDM Pre-Disaster Mitigation
PNP Private Nonprofit
PPD-8 Presidential Policy Directive 8
POC Point of Contact
POP Period of Performance
QPR Quarterly Progress Reporting
RFI Request for Information
Risk MAP Risk Mapping, Assessment, and Planning
SEI Structural Engineering Institute
SF Standard Form
SFHA Special Flood Hazard Area
Part IX. Appendix A: Acronyms 120

SFM Strategic Funds Management
SF-PPR Standard Form Performance Progress Report
SHMO State Hazard Mitigation Officer
SLR Sea Level Rise
SOW Scope of Work
SRIA Sandy Recovery Improvement Act of 2013
Stafford Act Robert T. Stafford Disaster Relief and Emergency Assistance Act TB Technical Bulletin
URA Uniform Relocation Assistance
U.S.C. United States Code
Part IX. Appendix A: Acronyms 121

B. Glossary
Access and Functional Needs: Circumstances that are met for providing physical, programmatic, and effective communication access to the whole community by accommodating individual requirements through universal accessibility and/or specific modifications. Access and functional needs include assistance, accommodation, or modification for mobility, communication, transportation, safety, health maintenance, etc.; and assistance, accommodation, or modification due to any situation (temporary or permanent) that limits an individual’s ability to take action in an emergency.

Adverse Impact: In general terms related to Environmental Planning and Historic Preservation (EHP) laws, a negative impact (e.g., loss, destruction, modification) to an environmental or historic resource that can have a direct, indirect, or cumulative effect on that resource. Impacts may be short term or long term in duration.

Applicant: The entity, such as a State, territory, or federally-recognized tribe, applying to the Federal Emergency Management Agency (FEMA) for a Federal award that will be accountable for the use of the funds. Once funds are awarded, the Applicant becomes the Recipient or passthrough entity or both.

Approximate Zone A: An area subject to inundation by the 1-percent-annual-chance flood event. Because detailed hydraulic analyses have not been performed, no Base Flood Elevations (BFEs) or flood depths are shown.

Award: A grant of financial assistance for a specified purpose by the Federal government to an eligible Recipient.

Base flood: A flood having a 1 percent chance of being equaled or exceeded in any given year.

Base Flood Elevation (BFE): The elevation shown on the Flood Insurance Rate Map (FIRM) for Zones AE, AH, A1–A30, AR, AR/A, AR/AE, AR/A1–A30, AR/AH, AR/AO, V1–V30, and VE that indicates the water surface elevation resulting from a flood that has a 1 percent chance of equaling or exceeding that level in any given year.

Benefit-Cost Analysis (BCA): A quantitative procedure that assesses the cost-effectiveness of a hazard mitigation measure by taking a long-term view of avoided future damage as compared to the cost of a project.

Benefit-Cost Ratio (BCR): A numerical expression of the cost-effectiveness of a project calculated as the net present value of total project benefits divided by the net present value of total project costs.

Biomass: Biological material derived from living or recently living organisms.

Part IX. Appendix B: Glossary 122

Building: A structure with two or more outside rigid walls and a fully secured roof that is affixed to a permanent site; a manufactured home or a mobile home without wheels, built on a chassis and affixed to a permanent foundation, that is regulated under the community’s floodplain management and building ordinances or laws. “Building” does not mean a gas or liquid storage tank or a recreational vehicle, park trailer, or other similar vehicle.

Clean-site certification: A letter from the appropriate local, State, territory, federally-recognized tribe, or Federal entity determining that no further remedial action is required to protect human health or the environment.

Coastal Barrier Resources Act (CBRA): This Act passed in 1982 and amended in 1990 aims to remove the Federal incentive to allow for development within coastal barrier areas within the United States, Puerto Rico, and the U.S. Virgin Islands, as well as preserve the ecological integrity of areas that serve as storm buffers. The Act designates Coastal Barrier Resources System (CBRS) units and made these areas ineligible for most Federal expenditures and financial assistance, including Federal flood insurance; the law does provide for funding exceptions within Section 6. The law also designates Otherwise Protected Areas (OPAs) for which only flood insurance is prohibited.

Coastal Barrier Resources System (CBRS): A geographic unit designated to serve as a protective barrier against forces of wind and tidal action caused by coastal storms and serving as habitat for aquatic species. Congress restricted Federal spending and assistance for development-related activities within CBRS units to protect them from further development.

Flood insurance is unavailable in these areas unless exceptions of Section 6 of CBRA apply.

CBRS units are identified on FEMA Flood Insurance Rate Maps (FIRMs).

Coastal High Hazard Area: An area of special flood hazard extending from offshore to the inland limit of a primary frontal dune along an open coast and any other area subject to high velocity wave action from storms or seismic sources.

Combustible material: Any material that, in the form in which it is used and under the conditions anticipated, will ignite and burn or will add appreciable heat to an ambient fire.

Community Rating System (CRS): A program developed by FEMA to provide incentives for those communities in the National Flood Insurance Program (NFIP) that have gone beyond the minimum floodplain management requirements to develop extra measures to provide protection from flooding.

Cost-effectiveness: Determined by a systematic quantitative method for comparing the costs of alternative means of achieving the same stream of benefits for a given objective. The benefits in the context of hazard mitigation are avoided future damage and losses. Cost-effectiveness is determined by performing a BCA.

Part IX. Appendix B: Glossary 123

Critical action: An action for which even a slight chance of flooding is too great. The minimum floodplain of concern for critical actions is the 500-year floodplain, i.e., critical action floodplain.

Critical actions include, but are not limited to, those which create or extend the useful life of structures or facilities such as:
♦ Those which produce, use, or store highly volatile, flammable, explosive, toxic, or waterreactive materials ♦ Hospitals and nursing homes, and housing for the elderly, which are likely to contain occupants who may not be sufficiently mobile to avoid the loss of life or injury during flood and storm events
♦ Emergency Operation Centers (EOCs) or data storage centers, which contain records or services that may become lost or inoperative during flood and storm events ♦ Generating plants and other principal points of utility lines Critical facilities: Structures and institutions necessary, in the community’s opinion, for response to and recovery from emergencies. Critical facilities must continue to operate during and following a disaster to reduce the severity of impacts and accelerate recovery. These would include, but not be limited to:
♦ Structures or facilities that produce, use, or store highly volatile, flammable, explosive, toxic, and/or chemically-reactive materials
♦ Hospitals, nursing homes, and housing likely to have occupants who may not be sufficiently mobile to avoid injury or death during an emergency
♦ Police stations, fire stations, vehicle and equipment storage facilities, and EOCs that are needed for emergency response activities before, during, and after the event ♦ Public and private utility facilities that are vital to maintaining or restoring normal services to affected areas before, during, and after the event
♦ Other structures or facilities the community identifies as meeting the general criteria above This definition is for HMA program use and clarification and is not meant to provide a definition for use under other programs or supersede any FEMA regulation.

Defensible space: An area that is either natural or manmade, where material capable of allowing a fire to spread unchecked has been treated, cleared, or modified to slow the rate and intensity of an advancing wildfire and to create an area for fire-suppression operations to occur.

Direct costs: Costs that can be identified specifically with a particular final cost objective, such as a Federal award or cost that can be linked to a specific project.

Dwelling: A building designed for use as a residence for no more than four families or a singlefamily unit in a building under a condominium form of ownership.

Part IX. Appendix B: Glossary 124

Elevated building: A building that has no basement and a lowest floor that is elevated to or above the BFE by foundation walls, shear walls, posts, piers, pilings, or columns. Solid perimeter foundations walls are not an acceptable means of elevating buildings in Zones V and VE.

Environmental benefits: Direct or indirect contributions that ecosystems make to the environment and human populations. For FEMA BCA, certain types of environmental benefits may be realized when homes are removed and land is returned to open space uses. Benefits may include flood hazard reduction; an increase in recreation and tourism; enhanced aesthetic value; and improved erosion control, air quality, and water filtration.

Equipment: Tangible personal property (including information technology systems) having a useful life of more than 1 year and a per-unit acquisition cost that equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes or $5,000.

Federal agency: Any department, independent establishment, Government corporation, or other agency of the executive branch of the Federal Government, including the U.S. Postal Service, but not the American National Red Cross.

Federal award: The Federal financial assistance that a non-Federal entity receives directly from FEMA or indirectly from a pass-through entity or the instrument such as the FEMA-State Agreement, cooperative agreement, or other agreement setting forth the terms and conditions of the financial assistance.

Federal awarding agency: The Federal agency that provides a Federal award directly to a nonFederal entity.

Federal award date: The date when the Federal award is signed by the authorized official of the Federal awarding agency.

Federally-recognized tribe: The governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian tribe under the Federally Recognized Tribe List Act of 1994 (25 U.S.C. 479a et seq.

This does not include Alaska Native corporations, the ownership of which is vested in private individuals.

Firebreak: A strip of cleared land that provides a gap in vegetation or other combustible material that is expected to slow or stop the progress of a wildfire.

Fire-proofing: Removal or treatment of fuels to reduce the danger of fires igniting or spreading (e.g., fire-proofing roadsides, campsites, structural timber).

Fire-resistant material: Material that has a property that prevents or retards the passage of excessive heat, hot gases, or flames under conditions of use.

Part IX. Appendix B: Glossary 125

Fire retardant: A chemical applied to lumber or other wood products to slow combustion and flame spread.

Fire Severity Zone: Three concentric zones around a building used to determine the most effective design for defensible space.

Flammability: The relative ease with which fuels ignite and burn regardless of the quantity of the fuels.

Flood Insurance Rate Map (FIRM): Official map of a community on which FEMA has delineated both the special hazard areas and the risk premium zones applicable to the community.

Floodplain: Any land area that FEMA has determined has at least a 1 percent chance in any given year of being inundated by floodwaters from any source.

Floodplain management: The operation of an overall program of corrective and preventive measures for reducing flood damage, including but not limited to, emergency preparedness plans, flood control works, and floodplain management regulations.

Floodway: The channel of a river or other watercourse and the adjacent land areas that must be reserved in order to discharge the base flood without cumulatively increasing the water surface elevation more than a designated height. Communities regulate development in these floodways to ensure that there are no increases in upstream flood elevations.

Freeboard: Freeboard is a factor of safety usually expressed in feet above a flood level for purposes of floodplain management. “Freeboard” tends to compensate for the many unknown factors that could contribute to flood heights greater than the height calculated for a selected size flood and floodway conditions, such as wave action, bridge openings, and the hydrological effect of urbanization of the watershed.

Fuel break: A natural or manmade change in fuel characteristics that affects fire behavior so that fires burning into them can be more readily controlled.

Fuel condition: Relative flammability of fuel as determined by fuel type and environmental conditions.

Governor’s Authorized Representative (GAR): The individual, designated by the Governor, who serves as the grant administrator for all funds provided under the Hazard Mitigation Grant Program (HMGP); the person empowered by the Governor to execute, on behalf of the State, all necessary documents for disaster assistance.

Green open space: Green open space is land that does not directly touch a natural body of water, such as a river, lake, stream, creek, or coastal body of water.

Part IX. Appendix B: Glossary 126

Hazardous fuels reduction: An activity in an area strategically located in relation to predicted fire hazard and occurrence for which the vegetation has been permanently modified or replaced so that fires burning into it can be more easily controlled (e.g., vegetation management activities).

Hazard mitigation planning: A process used by governments to identify risks, assess vulnerabilities, and develop long-term strategies for protecting people and property from the effects of future natural hazard events.

HMGP lock-in ceiling: The level of HMGP funding available to a Recipient for a particular Presidential major disaster declaration.

Identified for further review: Subapplications identified for further review contain sufficient information for a preliminary determination of cost-effectiveness and feasibility. In certain instances, FEMA may work with Applicants to confirm cost-effectiveness and feasibility.

Identification for further review is not a notification of award.

Ignition-resistant construction: Construction standards based on use of fire-resistant materials, non-combustible materials, and 1-hour fire-rated assemblies.

Increased Cost of Compliance (ICC): Coverage for expenses a property owner must incur, above and beyond the cost to repair the physical damage the structure actually sustained from a flooding event, to comply with mitigation requirements of State or local floodplain management ordinances or laws; acceptable mitigation measures are structure elevation, dry floodproofing, structure relocation, structure demolition, or any combination thereof.

Indian tribe: The governing body of any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601, et seq.), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians (25 U.S.C. 450b(e)). This definition is for HMA program use and clarification and is not meant to provide a definition for use under other programs or supersede any FEMA regulations.

Indirect cost: Costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefited, without effort disproportionate to the results achieved.

Indirect cost rate: Percentage established by a Federal department or agency for a non-Federal entity to use in computing the dollar amount it charges to the award to reimburse itself for indirect costs incurred in doing the work of the award activity.

Part IX. Appendix B: Glossary 127

Local government: Per 44 CFR 201.2, Local government is any county, municipality, city, town, township, public authority, school district, special district, intrastate district, council of governments (regardless of whether the council of governments is incorporated as a nonprofit corporation under State law), regional or interstate government entity, or agency or instrumentality of a local government; any Indian tribe or authorized tribal organization, or Alaska Native village or organization that is not a federally-recognized tribe; and any rural community, unincorporated town or village, or other public entity.

Management costs: Any indirect costs, administrative expenses, and any other expenses not directly chargeable to a specific project that are reasonably incurred by a Recipient or subrecipient in administering and managing an award or subaward award. For HMGP, management cost funding is provided outside of Federal assistance limits defined at 44 CFR Section 206.432(b).

Manufactured (mobile) home: A structure, transportable in one or more sections, that is built on a permanent chassis and designed for use with or without a permanent foundation when attached to the required utilities.

Mitigation: Any sustained action taken to reduce or eliminate long-term risk to life and property from a hazard event.

Mitigation activity: A mitigation measure, project, plan, or action proposed to reduce risk of future damage, hardship, loss, or suffering from disasters. The term “measure” is used interchangeably with the term “project” in this program.

National Flood Insurance Program (NFIP): Federal program that provides the availability of flood insurance in exchange for the adoption of a minimum local floodplain management ordinance that regulates new and Substantially Improved development in identified flood hazard areas.

Non-combustible material: Material of which no part will ignite and burn when subjected to fire, such as any material conforming to ASTM International Standard E136.

Nonflammable: Material unlikely to burn when exposed to flame under most conditions.

Non-Federal cost share: The portion of the costs of a federally assisted project or program not borne by the Federal Government.

Non-Federal entity: A State, local government, federally-recognized tribe, or private nonprofit organization that carries out a Federal award as a Recipient or subrecipient (or a grantee or subgrantee as referenced in the previous guidance).

Part IX. Appendix B: Glossary 128

Non-Federal funds: Financial resources provided by sources other than the Federal Government. The term does not include funds provided to a State or local government through a Federal grant unless the authorizing statute for that grant explicitly allows the funds to be used as cost share for other Federal grants.

Non-residential structure: Includes, but is not limited to small business concerns, places of worship, schools, farm buildings (including grain bins and silos), pool houses, clubhouses, recreational buildings, mercantile structures, agricultural and industrial structures, warehouses, hotels and motels with normal room rentals for less than 6 months’ duration, and nursing homes.

Office of Environmental Planning and Historic Preservation: A FEMA office that integrates the protection and enhancement of environmental, historic, and cultural resources into the FEMA mission and FEMA programs and activities; ensures that FEMA activities and programs related to disaster response and recovery, hazard mitigation, and emergency preparedness comply with Federal EHP laws and Executive Orders; and provides EHP technical assistance to FEMA staff, local, State, and Federal partners, and Recipients and subrecipients.

Otherwise Protected Areas (OPAs): Designation created by the Coastal Barrier Improvement Act. Flood insurance is restricted in OPAs even though they are not in the CBRS and may receive other forms of Federal assistance. OPAs are identified on FEMA FIRMs.

Pass-through entity: A non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.

Period of performance (POP): The time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the POP in the Federal award.

Pile burning: Piling removed vegetation into manageable piles and burning the individual piles during safe and approved burning conditions.

Post-FIRM Building: A building for which construction or Substantial Improvement occurred after December 31, 1974, or on or after the effective date of an initial FIRM, whichever is later.

Practicable: An action that is capable of being done within existing constraints. The test of what is practicable depends upon the situation and includes consideration of all pertinent factors, such as environment, cost, and technology.

Pre-FIRM Building: A building for which construction or Substantial Improvement occurred on or before December 31, 1974, or before the effective date of an initial FIRM.

Prescribed burning: The deliberate and managed use of fire ignited by management actions to meet specific fuels management objectives.

Part IX. Appendix B: Glossary 129

Presidentially declared major disaster: Any natural catastrophe (including any hurricane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought) or, regardless of cause, any fire, flood, or explosion, in any part of the United States that, in the determination of the President, causes damage of sufficient severity and magnitude to warrant disaster assistance under the Stafford Act to supplement the efforts and available resources of States, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby.

Private nonprofit (PNP): Any nongovernmental agency or entity that currently has (i) an effective ruling letter from the Internal Revenue Service granting tax exemption under section 501(c), (d), or (e) of the Internal Revenue Code of 1954, or (ii) satisfactory evidence from the State that the organization or entity is a nonprofit one organized or doing business under State law.

Project: Any mitigation measure or action proposed to reduce risk of future damage, hardship, loss, or suffering from disasters.

Public Assistance (PA): Supplementary Federal assistance provided under the Stafford Act to State and local governments or certain PNP organizations other than assistance for the direct benefit of individuals and families. For further information, see 44 CFR Part 206, Subparts G and H. Fire Management Assistance Grants under section 420 of the Stafford Act are also considered PA.

Recipient: A non-Federal entity that receives a Federal award directly from a Federal awarding agency to carry out an activity under a Federal program. The term Recipient does not include subrecipients.

Replacement cost value: The cost to replace property with materials of like kind and quality, without any deduction for depreciation.

Riparian area: The land that directly abuts a natural body of water, such as a river, lake, stream, creek, or coastal body of water.

Slash: The accumulation of vegetative materials such as tops, limbs, branches, brush, and miscellaneous residue results from forest management activities such as thinning, pruning, timber harvesting, and wildfire hazard mitigation.

Special Flood Hazard Area (SFHA): The land in the floodplain within a community subject to a 1 percent or greater chance of flooding in any given year. An area having special flood, mudflow, or flood-related erosion hazards, and shown on a Flood Hazard Boundary Map or a FIRM as Zone A, AO, A1–A30, AE, A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1– A30, V1–V30, VE, or V.

Part IX. Appendix B: Glossary 130

State Hazard Mitigation Officer (SHMO): The representative of a State government who is the primary point of contact with FEMA, other Federal agencies, and local units of government in the planning and implementation of pre- and post-disaster mitigation activities.

Structural fire protection: The protection of homes or other buildings from wildland fire.

Subapplicant: The entity, such as a community/local government, federally-recognized tribe, or PNP, that submits a subapplication to the Applicant for FEMA assistance. Once funding is awarded, the subapplicant becomes the “subrecipient.”
Subaward: An award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program.

A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.

Subrecipient: A non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a Recipient of other Federal awards directly from a Federal awarding agency.

Substantial Damage: Damage of any origin sustained by a building whereby the cost of restoring the building to its before-damaged condition would equal or exceed 50 percent of the market value of the building before the damage occurred.

Substantial Improvement: Any reconstruction, rehabilitation, addition, or other improvement of a structure, the cost of which equals or exceeds 50 percent of the market value of the structure before the “start of construction” of the improvement. This term includes structures that have incurred “Substantial Damage,” regardless of the actual repair work performed.

Termination: The Federal award may be terminated, in whole or in part, by the Federal awarding agency or pass-through entity, if a non-Federal entity fails to comply with the terms and conditions of the award:
♦ For cause
♦ With the consent of the non-Federal entity, in which case the two parties must agree to the terms and conditions
♦ By the non-Federal entity, upon sending to the Federal awarding agency or pass-through entity written notification setting forth the reasons for termination, the effective date, and the portion to be terminated in the case of partial termination. The award may be wholly terminated where the Federal awarding agency or pass-through entity determines an award modified by a partial termination will not accomplish the purposes for which it was made.

Part IX. Appendix B: Glossary 131

Whole Community: The National Mitigation Framework addresses individuals, nonprofit entities and nongovernmental organizations, the private sector, communities, critical infrastructure interests, governments, and the Nation as a whole. Engaging the whole community is critical to success, and individual and community preparedness is a key component. The whole community includes children; individuals with disabilities and others with access and functional needs; those from religious, racial, and ethnically diverse backgrounds; and people with limited English proficiency. Their contributions must be integrated into mitigation/resilience efforts, and their needs must be incorporated as the whole community plans and executes its core capabilities.

Wildfire: An uncontrolled fire spreading through vegetative fuels, exposing and possibly consuming structures.

Wildland-Urban Interface Area: That geographical area where structures and other human development meet or intermingle with wildland or vegetative fuels.

All terms not listed above are used consistent with the term definitions used in 44 CFR unless otherwise specified.

Part IX. Appendix B: Glossary 132

C. Additional Resources
Description Web Link or Contact Information

1. National Flood Insurance Program (NFIP) http://www.floodsmart.gov Floodplain Management http://www.fema.gov/national-flood-insurance-program Map Service Center http://msc.fema.gov
Telephone: (877) FEMA-MAP (336-2627)
Flood Insurance Rate Maps (FIRMs) https://www.fema.gov/floodplain-management/flood-insurancerate-map-firm Flood Insurance Studies (FISs) https://www.fema.gov/floodplain-management/flood-insurancestudy FEMA NFIP Repetitive Loss Update
Worksheet, Form AW-501
http://www.fema.gov/national-flood-insurance-program1/mitigated-properties-updates

2. Hazard Mitigation Planning Overview http://www.fema.gov/hazard-mitigation-planning-overview Local Mitigation Planning Handbook
(FR302-094-1)
http://www.fema.gov/library/viewRecord.do?id=7209
Local Mitigation Plan Review Guide http://www.fema.gov/library/viewRecord.do?fromSearch=fromse arch&id=4859
Mitigation Planning Laws, Regulations,
& Guidance
http://www.fema.gov/mitigation-planning-laws-regulationsguidance Tribal Multi-Hazard Mitigation Planning
Guidance
https://www.fema.gov/media-library/assets/documents/18355 Mitigation Ideas: A Resource for Reducing
Risk to Natural Hazards
http://www.fema.gov/library/viewRecord.do?id=6938
Integrating Hazard Mitigation Into Local
Planning: Case Studies and Tools for
Community Officials
http://www.fema.gov/library/viewRecord.do?id=7130
Mitigation Planning How-To Guides (FEMA) https://www.fema.gov/media-library/resourcesdocuments/collections/6 Hazard Mitigation Planning Risk Assessment http://www.fema.gov/hazard-mitigation-planning-riskassessment IS-318: Mitigation Planning for Local and
Tribal Communities
http://training.fema.gov/EMIWeb/IS/courseOverview.aspx?code =is-318
IS-328: Plan Review for Local Mitigation
Plans
http://training.fema.gov/EMIWeb/IS/courseOverview.aspx?code =IS-328
Hazus http://www.fema.gov/hazus
U.S. Geological Survey National Map http://nationalmap.gov/ U.S. Geological Survey Natural Hazards http://www.usgs.gov/natural_hazards/ Part IX. Appendix C: Additional Resources 133

1. National Flood Insurance Program Resources

2. Mitigation Planning and Risk Assessment Resources

Description Web Link or Contact Information

3. Benefit-Cost Analysis Resources
BCA Software and Helpline Telephone: 1-855-540-6744
Email: [email protected]
Program Guidelines, Methodologies, Software
Modules, and Training Materials
http://www.fema.gov/benefit-cost-analysis
BCA Policies http://www.fema.gov/benefit-cost-analysis

4. Feasibility and Effectiveness Resources
Helpline for guidance on FEMA Building
Science publications
Email: [email protected]
Helpline for guidance on FEMA Safe Room
publications
Email: [email protected]
Building Science https://www.fema.gov/building-science
Engineering Case Studies http://www.fema.gov/grant-applicant-resources Property Acquisition Projects http://www.fema.gov/library/viewRecord.do?id=1861 Structure Elevation Projects http://www.fema.gov/library/viewRecord.do?id=1862 Minor Localized Flood Reduction Projects http://www.fema.gov/library/viewRecord.do?id=1863 Non-structural Seismic Retrofit http://www.fema.gov/library/viewRecord.do?id=1865 Structural Seismic Retrofit http://www.fema.gov/library/viewRecord.do?id=1866 Wind Shutters http://www.fema.gov/library/viewRecord.do?id=1864

5. Environmental Planning and Historic Preservation Resources PPD-8 (Definition of Resilience) http://www.dhs.gov/presidential-policy-directive-8-nationalpreparedness President’s Climate Action Plan http://www.whitehouse.gov/sites/default/files/image/president27 sclimateactionplan.pdf
Environmental Planning and Historic
Preservation (EHP) Program
http://www.fema.gov/environmental-planning-and-historicpreservation-program EHP Helpline Telephone: (866) 222-3580
Email: [email protected]
EHP Guidance for FEMA Grant Applicants http://www.fema.gov/environmental-planning-and-historicpreservation-program/environmental-historic-preservation-1 EHP eLearning Tool http://www.fema.gov/environmental-planning-and-historicpreservation-program/elearning-tool-fema-grant-applicants-45 EHP Policies http://www.fema.gov/hazard-mitigation-assistance-policy IS-253.A: Overview of FEMA’s EHP Review http://training.fema.gov/EMIWeb/IS/IS253a.asp EHP Resources At-a-Glance: Laws, Rules
and Tools
http://www.fema.gov/media-library/assets/documents/30805 EHP at-a-Glance Guide for Project Planning http://www.fema.gov/media-library/assets/documents/26621 Historic Properties and Hazard Mitigation
Planning
http://www.fema.gov/environmental-planning-and-historicpreservation-program/integrating-historic-property-cultural NFIP and Historic Properties http://www.fema.gov/media-library/assets/documents/13411 Part IX. Appendix C: Additional Resources 134

Description Web Link or Contact Information
National Register of Historic Places http://www.nps.gov/nr/

6. eGrants and NEMIS (HMGP) Resources
FEMA Enterprise Service Desk – for HMGP
(NEMIS-MT) issues
Telephone: (888) HLP-FEMA (1-888-457-3362)
Email: [email protected]
FEMA eGrants Helpdesk Telephone: (877) 611-4700
eGrants Applicant Resources http://www.fema.gov/application-development-process/grantapplicants-resources eGrants Subapplicant Resources http://www.fema.gov/subgrant-applicants-resources eGrants Applicant Quick Reference Guide http://www.fema.gov/library/viewRecord.do?id=3266 eGrants Subapplicant Quick Reference Guide http://www.fema.gov/library/viewRecord.do?id=3267 eGrants System for Grant Applicants online
course (IS-31)
http://training.fema.gov/EMIWeb/IS/is31a.asp
eGrants System for Subgrant Applicants
online course (IS-30)
http://training.fema.gov/EMIWeb/IS/is30a.asp
eGrants Internal System online course (IS-32) http://training.fema.gov/EMIWeb/IS/courseOverview.aspx?code =is-32
MT eGrants Internal Quick Reference Guide http://www.fema.gov/library/viewRecord.do?fromSearch=fromse arch&id=5885
NEMIS-MT Frequently Asked Questions: http://www.fema.gov/library/viewRecord.do?id=4913 NEMIS-MT User Manual http://www.fema.gov/library/viewRecord.do?id=4909

7. HMA Application and Award Resources
HMA Overview http://www.fema.gov/hazard-mitigation-assistance HMA Helpline Telephone: (866) 222-3580
Email: [email protected]
HMA Policies http://www.fema.gov/hazard-mitigation-assistance-policy

8. Acquisition Project Resources
Model Deed Restriction http://www.fema.gov/library/viewRecord.do?id=6327 Model Acknowledgement of Conditions for
Mitigation in Special Flood Hazard Area
http://www.fema.gov/library/viewRecord.do?id=3592
Model Statement of Assurances http://www.fema.gov/library/viewRecord.do?id=6365 Notice of Voluntary Interest http://www.fema.gov/library/viewRecord.do?id=3595 http://www.fema.gov/library/viewRecord.do?id=3596
Statement of Voluntary Participation http://www.fema.gov/library/viewRecord.do?id=3333 Part IX. Appendix C: Additional Resources 135

Description Web Link or Contact Information

9. Mitigation Reconstruction References
• ASCE/SEI 24-14, Flood Resistant Design and Construction, 2014 • ASCE/SEI 7-10, Minimum Design Loads for Buildings and Other Structures, 2010 • International Building Code (IBC), 2015 edition
• International Code Council, Reducing Flood Losses Through the International Codes, 4th Edition, 2014 • FEMA P-55, Coastal Construction Manual, 4th Edition, August 2011 • FEMA P-424, Design Guide for Improving School Safety in Earthquakes, Floods and High Winds, December 2010
• FEMA 489, Mitigation Assessment Team Report: Hurricane Ivan in Alabama and Florida, August 2005 • FEMA P-499, Home Builder’s Guide to Coastal Construction Technical Fact Sheet Series, December 2010 • FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds, January 2007 • FEMA 549, Mitigation Assessment Team Report: Hurricane Katrina in the Gulf Coast, July 2006 • FEMA P-550, Recommended Residential Construction for Coastal Areas: Building on Strong and Safe Foundations, 2nd Edition, December 2009
• FEMA 551, Selecting Appropriate Mitigation Measures for Floodprone Structures, March 2007 • FEMA 577, Design Guide for Improving Hospital Safety in Earthquakes, Floods, and High Winds: Providing Protection to People and Buildings, June 2007
• Guidance for Applying ASCE 24 Engineering Standards to HMA Flood Retrofitting and Reconstruction Projects, November 2013

10. Structure Elevation References
• ASCE/SEI 24-14, Flood Resistant Design and Construction, 2014 • FEMA P-55, Coastal Construction Manual, 4th Edition, August 2011 • FEMA P-259, Engineering Principles and Practices of Retrofitting Floodprone Residential Structures, 3rd Edition, January 2012
• FEMA P-312, Homeowners Guide to Retrofitting, 3rd Edition, June 2014 • FEMA 347, Above the Flood: Elevating Your Flood Prone House, May 2000 • FEMA P-499, Home Builder’s Guide to Coastal Construction Technical Fact Sheet Series, December 2010 • FEMA Technical Bulletin TB-1, Openings in Foundation Walls and Walls of Enclosures, 2008 • FEMA Technical Bulletin TB-5, Free-of-Obstruction Requirements, 2008 • FEMA Technical Bulletin TB-9, Design and Construction Guidance for Breakaway Walls, 2008 • FEMA Form 81-31, NFIP Elevation Certificate, February 2013 • Guidance for Applying ASCE 24 Engineering Standards to HMA Flood Retrofitting and Reconstruction Projects, November 2013
• Hurricane Sandy Recovery Advisory #7, Reducing Flood Risk and Flood Insurance Premiums for Existing Residential Buildings in Zone A

11. Dry Floodproofing, Non-residential References
• FEMA P-936, Floodproofing Non-Residential Buildings, July 2013 • Guidance for Applying ASCE 24 Engineering Standards to HMA Flood Retrofitting and Reconstruction Projects, November 2013
• FEMA P-312, Homeowner's Guide to Retrofitting, 3rd Edition, June 2014 • NFIP Technical Bulletin (TB) 3-93, Non-Residential Floodproofing—Requirements and Certification Part IX. Appendix C: Additional Resources 136

Description Web Link or Contact Information

12. HMA Job Aids
• Homeowner’s Guide to the Hazard Mitigation Grant Program • Strategic Funds Management Toolkit
• Program Administration by States (PAS) Pilot FAQs
• HMGP Advance Assistance Pilot Optional Application
• Federally-Recognized Tribes and Hazard Mitigation Grant Program – Option to Submit as an Applicant or Subapplicant
• NEPA Flow Chart for HMA Projects
• Section 106 Process under the National Historic Preservation Act • 8-Step Decision Making Process for Floodplain Management Considerations and Protection of Wetlands • ICC Fact Sheet
• ICC Assignment of Coverage D Form, National Flood Insurance Program • Safe Room Project Application Using Pre-Calculated Benefits • Eligibility of Generators (HMGP and PDM)
• HMGP Second Appeals Process
• Quarterly Progress Report FAQs
• Cost Effectiveness Determination for Residential Hurricane Wind Retrofit • Closeout Toolkit
• HMA Procurement Standards
• Climate Change Adaptation
Part IX. Appendix C: Additional Resources 137

D. Referenced Regulations, Statutes, Directives, and Guidance Reference Description
2 CFR Part 200 Subparts A to F, Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards
The Office of Management and Budget (OMB) has developed regulations that streamline language from eight existing OMB Circulars (A-21 [2 CFR Part 220], A-87 [2 CFR Part 225], A-89, A102 [45 CFR Part 92], A-110 [2 CFR Part 215], A-122 [2 CFR Part 230], A-133, and A-50) concerning Federal financial assistance, cost principals, and audit and administrative requirements into one document called the SuperCircular (2 CFR Part 200 Subparts A to F).
26 CFR Section 1.170A-14, Qualified
Conservation Contributions
Discusses deductions allowable for charitable contributions of interests in properties.
40 CFR Part 312, Innocent Landowners,
Standards for Conducting All Appropriate
Inquiries
Provides standards and practices for “all appropriate inquiries” for the purposes of the Comprehensive Environmental Response, Compensation, and Liability Act Sections 101(35)(B)(i)(I) and 101(35)(B)(ii) and (iii).
44 CFR Part 9, Floodplain Management
and Protection of Wetlands
Sets forth policy, procedure, and responsibilities to implement and enforce Executive Order (EO) 11988, Floodplain Management, and EO 11990, Protection of Wetlands.
44 CFR Part 10, Environmental
Considerations
FEMA procedures for implementing the National Environmental Policy Act (NEPA). Provides policy and procedures to enable FEMA officials to account for environmental considerations when authorizing/approving major actions that have a significant impact on the environment.
44 CFR Section 59.1, General Provisions,
Definitions
Defines terms used in the Emergency Management and Assistance Federal Regulations.
44 CFR Part 60, Criteria for Land
Management and Use
Contains regulations for sale of flood insurance, criteria to determine the adequacy of a community’s floodplain management regulations, and the minimum standards for the adoption of floodplain management regulations in flood-prone areas.
44 CFR Sections 60.3(b)(5) and (c)(4),
Criteria for Land Management and Use and
Floodplain Management Criteria for
Floodprone Areas
Regulations regarding obtaining the elevation of residential and nonresidential structures. 44 CFR Part 79, Flood Mitigation Grants Prescribes actions, procedures, and requirements for the administration the Flood Mitigation Assistance (FMA) program. 44 CFR Part 80, Property Acquisition and
Relocation for Open Space
Provides actions, procedures, and requirements for the
administration of FEMA mitigation assistance for projects to acquire property for open space purposes under all Hazard Mitigation Assistance (HMA) programs.
44 CFR Part 201, Mitigation Planning Provides information on requirements and procedures for mitigation planning as required by the Stafford Act, specifically Section 201.4 Standard State Mitigation Plans, Section 201.5 Enhanced State Mitigation Plans, Section 201.6 Local Mitigation Plans, and Section 201.7 Tribal Mitigation Plans.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 138

REGULATIONS

Reference Description
44 CFR Part 206, Federal Disaster
Assistance for Disasters Declared On or
After November 23, 1988
Prescribes policies and procedures for implementing the sections of Public Law 93-288 (the Stafford Act) that are delegated to the director of FEMA, including the administration of the Hazard Mitigation Grant Program (HMGP).
44 CFR Part 207, Management Costs Implements Section 324, Management Costs, of the Stafford Act, providing actions, procedures, and policies for HMGP management costs.
49 CFR Part 24, URA and Real Property
Acquisition for Federal and Federally
Assisted Programs
Promulgates rules to ensure that owners of real property displaced or acquired by Federal or federally assisted programs are treated fairly, consistently, and equitably, and that agencies who implement these regulations do so efficiently and cost effectively. 49 CFR Part 29, Governmentwide
Debarment and Suspension
(Nonprocurement)
This part adopts a government-wide system of debarment and suspension for nonprocurement activities.

Federal Acquisition Regulations (FAR)
Subpart 31.2
The FAR codify and publish uniform policies and procedures for acquisition by all executive agencies. Subpart 31.2 refers to Contracts with Commercial Organizations.

Internal Revenue Code of 1954, as
amended, Sections 170(h) (3) and (4)
Provides definitions for qualified conservation organizations and conservation purposes, including specific information regarding historic structure certification.

Internal Revenue Code of 1954, as
amended, Sections 501(c), (d), and (e)
Provides criteria for tax-exempt organizations.

Immigration and Nationality Act Provides a definition for the term “National of the United States.” Americans With Disabilities Act of 1990
(Public Law 101-336, as amended by
Public Law 110-325 [September 25, 2008];
104 Stat. 327)
Prohibits discrimination against people with disabilities in employment, transportation, public accommodation,
communications, and governmental activities.

Appalachian Regional Commission Funds,
40 U.S.C. 14321(a)(3), Grants and other
assistance
Provides information on the authority of the Appalachian Regional Commission to make grants for administrative expenses and lists what those expenses may and may not include. Also provides information on what the local development district’s contributions should be.

Architectural Barriers Act of 1968 (Public
Law 94-541; 42 U.S.C. 4151 et seq.)
Requires that certain buildings financed with Federal funds be designed and constructed to be accessible to the physically handicapped.

Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 (Public Law
108-264), Part 102
A bill to amend the National Flood Insurance Act of 1968 to reduce losses to properties for which repetitive flood insurance claim payments have been made.

Biggert-Waters Flood Insurance Reform Act
(Public Law 112-141) July 6, 2012
Flood Insurance Reform and Modernization Act that proposed changes to Mitigation Assistance Grants related to flood mitigation.

Civil Rights Act of 1964, 42 U.S.C. 2000d et
seq., Title VI of the Civil Rights Act
Prohibits discrimination on the basis of race, color, and national origin in programs and activities receiving Federal financial assistance.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 139

STATUTES

Reference Description
Coastal Barrier Resources Act (CBRA)
(Public Law 97-348; 16 U.S.C. 3501 et
seq.)
Designated various undeveloped coastal barrier islands, depicted by specific maps, for inclusion in the Coastal Barrier Resources System (CBRS). Areas so designated were made ineligible for direct or indirect Federal financial assistance that might support development, including flood insurance, except for emergency lifesaving activities.

Endangered Species Act (ESA) (Public Law
93-205; 16 U.S.C. 1531–1544)
Prohibits Federal agencies from funding actions that would jeopardize the continued existence of endangered or threatened species or adversely modify critical habitat.

Fair Housing Amendments Act 1988 (42
U.S.C. 3601; Title VIII of the Civil Rights
Act)
Prohibits housing discrimination on the basis of race, color, religion, sex, disability, familial status, and national origin.

Federal Crop Insurance Act, as amended, 7
U.S.C. 1501 et seq.

Promotes the national welfare by improving the economic stability of agriculture through a sound system of crop insurance.

Individuals with Disabilities Education Act
(IDEA) of 1975 (Public Law 94-142; 20 U.S.

C. 1400 et seq.)
The Education for All Handicapped Children Act of 1975 is now called Individuals with Disabilities Education Act. Guarantees a free appropriate public education to each child with a disability.

National Environmental Policy Act (NEPA)
(Public Law 91–190; 42 U.S.C. 4321 and
4331–4335)
Declares a national policy that encourages productive and enjoyable harmony between man and his environment; promotes efforts that will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man; enriches the understanding of the ecological systems and natural resources important to the Nation; and establishes a Council on Environmental Quality.

National Flood Insurance Act of 1968, as
amended (NFIA), 42 U.S.C. 4001 et seq.

The NFIA created the Federal Insurance Administration and made flood insurance available for the first time. The Flood Disaster Protection Act of 1973 made the purchase of flood insurance mandatory for the protection of property located in the Special Flood Hazard Area.

National Flood Insurance Reform Act of
1994 (Public Law 103-325)
Amended the Flood Disaster Protection Act of 1973, providing tools to make the NFIP more effective in achieving its goals of reducing the risk of flood damage to properties and reducing Federal expenditures for uninsured properties that are damaged by floods.

National Historic Preservation Act (NHPA)
(Public Law 89-665; 16 U.S.C. 470 et seq.)
Establishes a program for the preservation of historic and prehistoric resources deemed important to our understanding of prehistory and U.S. history and created the National Register of Historic Places.

National Register of Historic Places The official list of the Nation’s historic places worthy of preservation.

It is part of a national program to support public and private efforts to identify, evaluate, and protect our historic and archeological resources.

Non-Insured Crop Disaster Assistance
Program, 7 U.S.C. 7333
Provides financial assistance to producers of non-insurable crops when low yields, loss of inventory, or prevented planting occur due to natural disasters.

Post-Katrina Emergency Management
Reform Act of 2006 (PKEMRA) (Public Law
109-295:120 Stat. 1357)
Significantly reorganized FEMA, provided it with substantial new authority to remedy gaps in response, and established a more robust preparedness mission for FEMA.

Privacy Act of 1974 (5 U.S.C. 552a) Regulates the collection, maintenance, use, and dissemination of personal information by Federal executive branch agencies.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 140

Reference Description
Public Health and Welfare, 42 U.S.C. 5133,
Pre-Disaster Hazard Mitigation
Authorizes the Pre-Disaster Mitigation Program (PDM).

Public Health and Welfare, 42 U.S.C. 5154
(a), Insurance
Contains information on compliance with certain regulations and maintaining insurance in regard to Applicants and subapplicants requesting assistance to repair, restore, or replace damaged facilities under this code.

Refugee Education Assistance Act of 1980,
(Public Law 96-422) Part 501(e)
Allows the President to exercise authorities over Cuban and Haitian immigrants identical to the authorities exercised in the Immigration and Nationality Act, 8 U.S.C. 1158.

Rehabilitation Act of 1973 (Public Law 93-
112; 29 U.S.C. 701 et seq.)
Replaces the Vocational Rehabilitation Act. Prohibits discrimination on the basis of disability in programs conducted by Federal agencies, in programs receiving Federal financial assistance, in Federal employment, and in the employment practices of Federal contractors.

Stafford Disaster Relief and Emergency
Assistance Act (Public Law 93-288, 88 Stat.
143-164, as amended, 42 U.S.C. 5121 et
seq.)
This Act constitutes the statutory authority for most Federal disaster response activities, especially as they pertain to FEMA and FEMA programs.

Secure Rural Schools and Community SelfDetermination Act of 2000, 16 U.S.C. 500 Contains information regarding payment and evaluation of receipts to a State or territory for schools and roads, moneys received, projections of revenues, and estimated payments.

Telecommunications Act of 1996 (Public
Law 104-104; Stat. 110-56)
Promotes competition and reduces regulation in order to secure lower prices and higher quality services for American
telecommunications consumers and encourages the rapid
deployment of new telecommunications technologies.

Twenty-first Century Communications and
Video Accessibility Act of 2010 (Public Law
111-260; 124 Stat. 2751)
Increases the access of persons with disabilities to modern communication. Amends the Communications Act of 1934 to require the Federal Communications Commission to require that customer premises equipment provide internal means for effective use with hearing aids that are designed to be compatible with telephones that meet established technical standards for hearing aid compatibility.

Uniform Relocation Assistance (URA) and
Real Property Acquisition Act of 1970
(Public Law 91-646)
Ensures that people whose real property is acquired, or who move as a result of projects receiving Federal funds, will be treated fairly and equitably and will receive assistance in moving from the property they occupy.

EO 11988, Floodplain Management Requires Federal agencies to avoid, to the extent possible, the longand short-term adverse impacts associated with the occupancy and modification of floodplains and to avoid direct and indirect support of floodplain development wherever there is a practicable alternative.

EO 11990, Protection of Wetlands Requires Federal agencies, in planning their actions, to consider alternatives to wetland sites and limit potential damage if an activity affecting a wetland cannot be avoided.

EO 12898, Environmental Justice for LowIncome and Minority Populations Directs Federal agencies “to make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority and lowincome populations in the United States.” Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 141

DIRECTIVES

Reference Description
EO 12372, July 14, 1982,
Intergovernmental Review of Federal
Programs
Fosters an intergovernmental partnership and strengthens federalism by relying on State and local processes for State and local coordination and review of proposed Federal financial assistance.

EO 12416, April 8, 1983, Intergovernmental
Review of Federal Programs
Amends Section 8 of EO 12372 regarding the content of the Director of the Office of Management and Budget’s report and to whom the report is submitted.

EO 12699, January 5, 1990, Seismic Safety
of Federal and Federally assisted or
Regulated New Building Construction
Requires that each Federal agency responsible for the design and construction of each new Federal building shall ensure that the building is designed and constructed in accordance with appropriate seismic design and construction standards.

FEMA P-85, Protecting Manufactured
Homes from Floods and Other Hazards
(2nd Edition, November 2009)
Provides a best practices approach in reducing damage from natural hazards to assist in protecting manufactured homes from floods and other hazards.

FEMA 317, Property Acquisition Handbook
for Local Communities (October 1998)
A “How-To” guide to help communities work through one
specific hazard mitigation alternative known as property acquisition (also referred to as “buyout”).

FEMA P-320, Taking Shelter from the
Storm: Building a Safe Room for Your
Home or Small Business (4th Edition, 2014)
Guide to help homeowners decide if they should build a safe room in their house; provides various safe room designs that can be given to a contractor/builder.

FEMA P-361, Safe Rooms for Tornadoes
and Hurricanes: Guidance for Community
and Residential Safe Rooms (3rd Edition,
2015)
A guidance manual for engineers, architects, building officials, and prospective safe room owners that presents important information about the design and construction of residential and community safe rooms that protect people during tornado and hurricane events.

FEMA P-424, Design Guide for Improving
School Safety in Earthquakes, Floods, and
High Winds (December 2010)
This manual is intended to provide guidance for the protection of school buildings from natural disasters. This volume concentrates on grade schools, K-12. FEMA P-424 covers earthquakes, floods, and high winds. Its intended audience is design professionals and school officials involved in the technical and financial decisions of school construction, repair, and renovations.

FEMA 489, Mitigation Assessment Team
Report: Hurricane Ivan in Alabama and
Florida (August 2005)
Summarizes the observations, conclusions, and recommendations that resulted from post-disaster assessments sponsored by FEMA in response to Florida’s 2004 hurricane season.

FEMA P-499, Home Builder’s Guide to
Coastal Construction Technical Fact Sheet
Series (December 2010)
Presents information aimed at improving the performance of buildings subject to flood and wind forces in coastal environments.

FEMA 543, Design Guide for Improving
Critical Facility Safety from Flooding and
High Winds: Providing Protection for People
and Buildings (January 2007)
Provides building professionals and decision-makers with information and guidelines for implementing a variety of mitigation measures to reduce the vulnerability to damage and disruption of operations during severe flooding and high-wind events. It concentrates on critical facilities (hospitals, schools, fire and police stations, and emergency operation centers).

FEMA 549, Mitigation Assessment Team
Report: Hurricane Katrina in the Gulf Coast
(July 2006)
Evaluates and assesses damage from the hurricane and provides observations, conclusions, and recommendations on the
performance of buildings and other structures impacted by wind and flood forces.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 142

GUIDANCE

Reference Description
FEMA P-55, Coastal Construction Manual,
(4th Edition, August 2011)
Provides a comprehensive approach to sensible development in coastal areas based on guidance from over 200 experts in building science, coastal hazard mitigation, and building codes and regulatory requirements.

FEMA P-550, Recommended Residential
Construction for Coastal Areas: Building on
Strong and Safe Foundations (2nd Edition,
December 2009)
Provides recommended designs and guidance for rebuilding homes destroyed by hurricanes in the Gulf Coast. The manual also provides guidance in designing and building less vulnerable new homes that reduce the risk to life and property.

FEMA 551, Selecting Appropriate Mitigation
Measures for Floodprone Structures (March
2007)
This manual is intended to provide guidance to community officials for developing mitigation projects that reduce or eliminate identified risks for floodprone structures.

FEMA 577, Design Guide for Improving
Hospital Safety in Earthquakes, Floods, and
High Winds: Providing Protection to People
and Buildings (June 2007)
The intent of the Design Guide is to provide its audience with stateof-the-art knowledge on the variety of vulnerabilities faced by hospitals exposed to earthquakes, flooding, and high-winds risks, as well as the best ways to mitigate the risk of damage and disruption of hospital operations caused by these events.

FEMA P-804, Wind Retrofit Guide for
Residential Buildings (December 2010)
The purpose of this Guide is to provide guidance on how to improve the wind resistance of existing residential buildings. The content of this document should serve as guidance on retrofitting existing buildings for improved performance during high-wind events in all coastal regions.

Mitigation Planning Guidance This guidance provides information on preparing and updating mitigation plans in compliance with the mitigation planning regulations found at 44 CFR Part 201.

Mitigation Planning How-To Guides (FEMA) These guides focus on initiating and maintaining a planning process that will result in safer communities and are applicable to jurisdictions of all sizes and all resource and capability levels.

Uniform Standards of Professional
Appraisal Practice (2012–2013)
The generally accepted standards for professional appraisal practice in North America. Standards are included for real estate, personal property, business, and mass appraisal.

Hazard Mitigation Assistance Tool for
Identifying Duplication of Benefits (January
2013)
This guide provides instruction on what constitutes Duplication of Benefits (DOB) in the use of HMA funds for property mitigation. It gives direction regarding verification processes and actions that can be taken to ensure that DOB does not occur.

Government-to-Government Relations with
American Indian and Alaska Native Tribal
Governments. January 12, 1999 (Federal
Register vol. 64 no. 7)
Guides FEMA interactions with American Indian and Alaska Native Tribal governments.

OMB Circular A-94, Guidelines and
Discount Rates for Benefit-Cost Analysis of
Federal Programs (October 29, 1992)
Specifies certain discount rates that will be updated annually when the interest rate and inflation assumptions in the budget are changed.

ASCE/SEI 24-14, Flood Resistant Design
and Construction (2014)
Provides minimum requirements for flood-resistant design and construction of structures located in flood hazard areas.

ASCE/SEI 7-05, Minimum Design Loads for
Buildings and Other Structures (2005)
Provides requirements for general structural design and includes means for determining dead, live, soil, flood, wind, snow, rain, atmospheric ice, and earthquake loads, and their combinations that are suitable for inclusion in building codes and other documents.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 143

OTHER RESOURCES

Reference Description
ASTM International Standard E1527-05,
Standard Practice for Environmental Site
Assessments: Phase I Environmental Site
Assessment Process (2005)
Defines good commercial and customary practices for conducting an environmental site assessment of a parcel of commercial real estate.

ASTM International Standard E2247-08,
Standard Practice for Environmental Site
Assessments: Phase I Environmental Site
Assessment Process for Forestland or
Rural Property (2008)
This practice is intended for use on a voluntary basis by parties who wish to assess the environmental condition of forestland or rural property of 120 acres or greater taking into account commonly known and reasonably ascertainable information.

International Building Code (International
Code Council)
The scope of this code covers all buildings except three-story, and one- and two-family dwellings and townhomes. This comprehensive code features time-tested safety concepts, structural, and fire and life-safety provisions covering means of egress, interior finish requirements, comprehensive roof provisions, seismic engineering provisions, innovative construction technology, occupancy classifications, and the latest industry standards in material design.

International Residential Code for One- and
Two- Family Dwellings (International Code
Council)
A comprehensive code for homebuilding that brings together all building, plumbing, mechanical, and electrical provisions for oneand two-family residences.

International Wildland-Urban Interface
Code (International Code Council; 2012)
Contains provisions addressing fire spread, accessibility, defensible space, water supply, and more for buildings constructed near wildland areas.

International Code Council, Reducing Flood
Losses through the International Codes (4th
Edition, 2014)
This guide is intended to help community officials decide how to integrate the 2012 edition of the International Codes (I-Codes) into their current floodplain development and regulatory processes in order to meet the requirements to participate in the NFIP.

National Fire Protection Association (NFPA)
225, Model Manufactured Home Installation
Standard (2009 Edition)
Includes updated criteria covering the anchoring of the home and protection against seismic events, floods, and wind. Rules apply to single- and multi-section units.

NFPA 703, Standard for Fire-Retardant
Treated Wood and Fire-Retardant Coatings
for Building Materials
Provides enforcers, engineers, and architects with the industry’s most advanced criteria for defining and identifying fire retardanttreated wood and fire-retardant coatings for building materials.

NFPA 914, Code for Fire Protection of
Historic Structures
Intended to improve or upgrade the fire protection features in a wide range of historic buildings and address ongoing operations as well as renovation and restoration projects.

NFPA 1141, Standard for Fire Protection
Infrastructure for Land Development in
Suburban and Rural Areas
Provides recommendations for planning and installing fire protection infrastructure for new developments in a community.

NFPA 1144, Standard for Reducing
Structure Ignition Hazards for Land
Development in Suburban and Rural Areas
Covers minimum design, construction, and landscaping elements for structures in the wildland/urban interface.

NFPA 5000 Code, Building Construction
and Safety Code (2012 Edition)
Combines regulations controlling design, construction, quality of materials, use and occupancy, location, and maintenance of buildings and structures, with fire and life-safety requirements found in NFPA codes and standards.

Firewise Communities A multi-agency effort designed to reach beyond the fire service by involving homeowners, community leaders, planners, developers, and others in the effort to protect people, property, and natural resources from the risk of wildland fire—before a fire starts.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 144

Reference Description
National Flood Insurance Program (NFIP)
Technical Bulletin 3-93, Non-Residential
Floodproofing – Requirements and
Certification
Provides guidance on the NFIP regulations concerning watertight construction and the required certification for floodproofed nonresidential buildings in Zones A, AE, A1–A30, AR, AO, and AH, whose lowest floors are below the Base Flood Elevation.

U.S. Department of Commerce, Bureau of
Economic Analysis
Produces economic account statistics that enable government and business decision-makers, researchers, and the American public to follow and understand the performance of the Nation’s economy.

U.S. Bureau of Labor and Statistics An independent national statistical agency that collects, processes, analyzes, and disseminates essential statistical data to the American public, the U.S. Congress, other Federal agencies, State and local governments, business, and labor.

Part IX. Appendix D: Referenced Regulations, Statutes, Directives, and Guidance 145

E. EHP Checklist
“Yes” indicates that the environmental regulation or statute may apply to your project. Please provide relevant information and/or documentation to support your answers. This list is not allinclusive.

Environmental Regulation or Statute Yes No

1.A Would the proposed project affect, or is the proposed project in close proximity to, any buildings or structures 50 years or more in age?

1.B Will the proposed project involve disturbance of ground?

2.A Are federally listed or endangered species, or their critical habitat, present in or near the project area and, if so, which species are present?

2.B Will the proposed project remove or affect vegetation?

2.C Is the proposed project in or near (within 200 feet), or likely to affect, any type of waterbody or body of water?

3.A Will the proposed project involve dredging or disposal of dredged material, excavation, the addition of fill material, or result in any modification to water bodies or wetlands designated as “waters of the United States” as identified by the U.S. Army Corps of Engineers or on the National Wetland Inventory?

4.A Does a Flood Insurance Rate Map, Flood Hazard Boundary Map, hydrological study, or some other source indicate that the project is located in, or will affect, a 100-year floodplain, a 500-year floodplain (if a critical action), an identified regulatory floodway, or an area prone to flooding?

4.B Is the proposed project located in, or will it affect, a wetland as listed in the National Wetland Inventory?

4.C Will the proposed project alter a watercourse, water flow patterns, or a drainage way, regardless of its floodplain designation?

4.D Is the proposed project located in, or will it affect, a floodplain or wetland? If yes, the 8-step process summarized in HMA Job Aids must be completed.

5.A Is the proposed project located in the State’s designated coastal zone?

5.B Is the proposed project located in a Coastal Barrier Resources System Unit or Otherwise Protected Area?

6.A Will the proposed project convert more than 5 acres of “prime or unique” farmland outside city limits to a non-agricultural use?
Part IX. Appendix E: EHP Checklist 146
National Historic Preservation Act (NHPA)
Endangered Species Act (ESA)
Clean Water Act (CWA) and Rivers and Harbors Act
Executive Order 11988 (Protection of Floodplains) and Executive Order 11990 (Protection of Wetlands) Coastal Zone Management Act (CZMA) and Coastal Barrier Resources Act (CBRA) Farmland Protection Policy Act (FPPA)

Environmental Regulation or Statute Yes No
Resource Conservation Recovery Act (RCRA) and Comprehensive Environmental Response, Compensation, and Liability Act

7.A Is there reason to suspect there are contaminants from a current or past use on the property associated with the proposed project?

7.B Are there are any studies, investigations, or enforcement actions related to the property associated with the proposed project?

7.C Will any project construction or operation activities involve the use of hazardous or toxic materials?

7.D Are any of the current or past land uses of the property associated with the proposed project or are any of the adjacent properties associated with hazardous or toxic materials?
Executive Order 12898 (Environmental Justice for Low Income and Minority Populations)

8.A Are there any low-income or minority populations in the project’s area of effect or adjacent to the project area?
Other Environmental/Historic Preservation Laws (including applicable State laws) or Issues

9.A Are other environmental/historic preservation requirements associated with this project?

9.B Are any controversial issues associated with this project?

9.C Have any public meetings been conducted, public notices been circulated, or public comments been solicited on the proposed project?
Part IX. Appendix E: EHP Checklist 147

F. Minimum Criteria Checklist for Project Subapplications Subapplications submitted to FEMA that do not contain at least the basic components listed below may be immediately denied because there is no method to determine eligibility without these data. Additional information may be requested during FEMA review. This information is required for all submittals, including potential substitutions, but further details may be requested to complete the subapplication.

Subapplication Component Yes No Comment
Are the Applicant and subapplicant eligible?
Does the project conform to the State and Local Mitigation Plan under 44 CFR Part 201?
Does the project conform to the Tribal Mitigation Plan under 44 CFR Section 201.7?
Does the project address a problem that has been repetitive or a problem that poses a significant risk to public health and safety if left unsolved?
Does the project consider long-term changes to the areas and entities it protects?
Does the project have manageable future maintenance and modifications requirements?
Does the project contribute to the extent practicable to a long term solution to the problem it is intended to address? Does the project include site location, maps, and GPS
coordinates?
Does the project solve a problem independently or constitute a functional portion of a solution and is there assurance that the project as a whole will be completed? (Projects that merely identify or analyze hazards or problems are not eligible.) Does the project include a detailed budget?
Does the project identify information on cost-share and match sources?
Does the project include a work schedule for 3 years or less that conforms to period of performance requirements?
Part IX. Appendix F: Minimum Criteria Checklist for Project Subapplications 148 Applicant and Subapplicant
Plan Requirement
Scope of Work
Cost Review
Schedule

Subapplication Component Yes No Comment
Cost-Effectiveness
Does the project include a benefit-cost analysis, or alternate cost-effectiveness documentation, such as Substantial Damage verification, and located in a riverine floodplain; or a narrative supporting cost-effectiveness and request for consideration under 5 percent HMGP discretionary funding?
Is the project cost effective and does it substantially reduce the risk of future damage, hardship, loss, or suffering?
Does the project cost more than the anticipated value of the reduction in both direct damages and subsequent negative impacts to the area if future disasters were to occur?
Environmental and Historical Preservation
Project includes information to demonstrate conformance with 44 CFR Part 9 and Part 10 (or FEMA Directive Number: FD 108- 1, Environmental and Historic Preservation Planning,
Responsibilities and Program Requirements)
Project includes information and documentation required by the EHP Checklist, including all available information relating to known historic, archaeological, or environmentally sensitive areas (e.g., Coastal Barrier Resources System Units or
Otherwise Protected Areas)
Project includes EHP information for each property identified in the subapplication, including the construction date for each property
Project demonstrates and documents consideration of
alternatives that avoid or minimize harm to the environment or historic resources
Project includes documentation of all coordination,
correspondence, consultation, or previous EHP reviews with appropriate Federal, State, and local agencies
Project includes all known EHP costs
Acquisition / Demolition / Relocation Information
Does the project confirm compliance with timelines and all other criteria set forth in 44 CFR Part 80 requirements?
Does the project include Voluntary Interest documentation for each property?
For relocated projects, will the structure be relocated outside of the Special Flood Hazard Area?
Elevation Information
Does the project identify the Base Flood Elevation or Advisory Base Flood Elevation?
Does the project include finished floor elevation (Elevation Certificate is preferred)?
Does the project include proposed elevation height of the structure?
Part IX. Appendix F: Minimum Criteria Checklist for Project Subapplications 149

Subapplication Component Yes No Comment
Is the project consistent with the design and implementation of ASCE 24-14?
Safe Room Information
Does the project include the population size to be protected? Is the project consistent with the design and implementation criteria of FEMA P-320 or FEMA P-361?
Wind Retrofit Information
Does the project include the proposed level of protection as per FEMA P-804?
Is the project consistent with the design and implementation criteria of FEMA P-804?
Drainage Information
Does the project include initial technical information to support size, costs, and local permitting requirements?
Part IX. Appendix F: Minimum Criteria Checklist for Project Subapplications 150

G. Minimum Criteria Checklist for Planning Subapplications Subapplications submitted to FEMA that do not contain at least the basic components listed below may be immediately denied because there is no method to determine eligibility without these data. Additional information may be requested during FEMA review prior to award if selected.

Subapplication Component Yes No Comment
Is the proposed mitigation planning activity, as described in the SOW, eligible for the program?
Is the proposed planning activity described, including whether it will result in a new or updated hazard mitigation plan or enhance an existing mitigation plan in accordance with the FEMA Mitigation Planning regulation at 44 CFR Part 201 and HMA Guidance?
Are participating jurisdiction(s) and private nonprofits, if applicable, identified and described?
Does the narrative describe procedures to engage stakeholders and participating jurisdictions?
Does the SOW discuss approaches, outcomes, and level of effort, including key milestones and schedule, and the
relationship of each activity to the cost estimate?
Subapplication Number and Title
Scope of Work (SOW)
Does the SOW describe the process that each jurisdiction will complete to review each section of the previous plan and address gaps, as needed; new information (including hazard, land use, and development trends); how the previous plan was implemented; and what process will be used?
Mitigation Plan Updates
Does the application include a work schedule for 3 years or less that conforms to POP requirements and allows sufficient time for State or tribal and FEMA reviews; preparation of required revisions, if needed; formal adoption by the
jurisdiction(s); and FEMA approval?
Does the application include a detailed cost estimate that supports the SOW and is reasonable for the jurisdiction(s) participating?
Lump-sum cost estimates are not eligible and will be NOT be accepted.

Cost Review
Schedule
Does the application or subapplication identify information on the required non-Federal cost share and contribution sources? Part IX. Appendix G: Minimum Criteria Checklist for Planning Subapplications 151

TOWN OF LOS ALTOS HILLS March 17, 2022
Staff Report to the City Council
________________________________________________________________________ SUBJECT: RESOLUTION DECLARING THE INTENTION TO INCREASE

SEWER SERVICE CHARGES IN BOTH PALO ALTO AND LOS

ALTOS SEWER BASINS, SETTING A PUBLIC HEARING AND

DIRECTING STAFF TO MAIL NOTICES TO ALL SEWER USERS
FROM: Oscar Antillon/Public Works Director
APPROVED: Peter Pirnejad, City Manager
_______________________________________________________________________ RECOMMENDATION: That the City Council:

1. Approve the Sewer Service Charges Study prepared by HF&H Consultants.

2. Adopt the attached resolution setting the Public Hearing on proposed increase of Sewer Service Charges and authorize the mailing of Proposition 218 notices.

BACKGROUND:

The Town of Los Altos Hills (Town) provides sewer service to over 1,800 residential units within the Town and eleven commercial and institutional customers. The Town manages a sewer collection system that comprises approximately 56 miles of gravity sewer pipelines, 4 miles of pressurized force mains, and 2 pumping stations. Wastewater is collected and conveyed through the Cities of Los Altos and Palo Alto to the Palo Alto Regional Water Quality Control Plant for treatment. The Town has a long-term agreement with City of Palo Alto that requires the Town to funds its share of operating and capital costs based on the wastewater flows to City of Palo Alto’s facility. The Town’s sewer utility is supported primarily by utility service charges. Sewer rates must be adequate to fund sewer utility’s operation, maintenance and repair costs, as-need obligations, and ongoing capital improvement needs.

DISCUSSION:

The Town’s sewer service charge rates were last adjusted in FY 2019-20. Since that time capital needs for town infrastructure have substantially increase necessitating a rate increase. Additionally, projected treatment costs at the Palo Alto facility are higher than previous years as the facility requires significant capital improvements and upgrades to maintain regulatory compliance. Treatment costs allocated to the Town are expected to increase to $1,156,500 in FY 2022-23. Thereafter, Palo Alto facility treatment costs are projected to increase an average of 3.9% annually for the remainder of the planning period, which also reflects additional debt issuances to complete the upgrades.

In 2020, HF&H was retained by the Town to update the Town’s sewer service charge.

HF&H conducted the last rate study which recommended rates for a five-year period from FY 2020-21 through FY 2024-25. In that study, HF&H recommended no rate AGENDA ITEM #11.B
Revised and Posted 3/16/22
O.A.

P.P.

change for the first year followed by a series of 2.0% rates increases for the remaining four years.

Subsequently, in 2021, the Town hired HF&H to determine if the recommended 2.0% rate increase for FY 2021-22 was necessary. It was determined that the Town could forgo the 2.0% rate increase but required 3% rate increases for FY 2022-23 through FY 2025-26. The purpose of this study is to revisit the recommendations for a five-year period from FY 2022-23 through FY 2026-27.

The consultant’s rate model was presented to the Finance and Investment Committee on February 7, 2022. Staff and consultant’s recommendation on the proposed rate structure, designed to enable the Town to meet its long-term sewer enterprise funding needs, while at the same time minimizing the need for a large one-time increase.

It is recommended that the Town adopt five years of future rate increases pursuant to the procedural requirements of Proposition 218. This will eliminate the need for the Town to go through the process each year. The Town will still have the flexibility to revise the recommended rate increases as long as they do not exceed the maximum rates adopted under the Proposition 218 procedures.

Proposition 218 requires a minimum 45-day notice to all affected homeowners before the public hearing to approve the rates. They are subject to the protest proceedings wherein rate changes cannot be implemented if there is a majority protest. The proposed public hearing date is the May 19, 2022, City Council meeting following the 45-day notice period. The draft notice is attached for Council review and approval.

FISCAL IMPACT:

The proposed increases address the rising cost of sewage treatment, maintaining and operating sewer collection systems and meeting the increasing mandates from regulatory agencies. Failure to adopt a rate increase would likely result in lower than desirable reserves eventually leading to the inability to adequately operate and maintain the sewer system. Adoption of the proposed sewer service charge rates will be presented to the City Council at the public hearing.

The rate study was completed over a period of three years, the HF&H contract was awarded in 2019 for $32,430 to complete the study and a second agreement for $14,840 signed in 2021 to update the study. If the council approved this proposed rate increase staff does not expect the need for another rate study until 2026.

To prevent maintenance cost increases the town plans to address deferred maintenance of our system by spending an average of $1.17M for the next five years and on year 6 that will go down to less than $500K..

ATTACHMENTS

1. Resolution

2. Sewer Service Charges Study

3. Draft Notice of Public Hearing

RESOLUTION NO.__________

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS

HILLS DECLARING THE INTENTION TO INCREASE SEWER SERVICE

CHARGES IN BOTH PALO ALTO AND LOS ALTOS SEWER BASINS,

SETTING A PUBIC HEARING AND DIRECTING STAFF TO MAIL NOTICES

TO ALL SEWER USERS
WHEREAS the Town of Los Altos Hills Municipal Code provides for sewer service charges to users of the Town’s public wastewater collection, transmission and disposal system; and
WHEREAS the Town retained the services of HF&H Consultants, an independent public finance consultant, to prepare an analysis of the adequacy of the Town’s existing sewer service charges.

WHEREAS HF&H Consultants completed a study recommending increases in the Town’s existing sewer service charges in order to cover the Town’s obligations, costs, and expenses relating to the wastewater collection system; and WHEREAS these rate increases will help ensure the health and safety of the community while protecting the City’s financial stability; and WHEREAS the City Council intends to consider the proposed rate increases recommended in the Study by following procedures required under Article XIII D, section 6 of the California Constitution.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the Town of Los Altos Hills that:

1. The City Council hereby fixes the 19 day of May, 2022 at 6:00 p.m., in the Council Chambers, 26379 Fremont Road, Los Altos Hills, California as the time and place for a public hearing (Public Hearing) on the proposed sewer service charge increases.

2. At the time of the Public Hearing the City Council will hear and consider all protests and objections to the proposed sewer service charge increases, and any person shall be permitted to present written or oral testimony. Although oral comments at the Public Hearing will not qualify as a formal protest, the City Council welcomes community input during the Public Hearing.

3. Staff is hereby directed to provide notice of the Public Hearing and the proposed sewer service charge increases in conformity with section 6 of Article XIII D of the California Constitution.

4. At the conclusion of the Public Hearing, all valid written protests submitted will be tabulated in conformity with the City’s tabulation guidelines. No electronic submittals will be accepted. All written protests must be delivered to the Town Clerk (either in person or by mail) before the close of the public hearing.

Attachment 1

5. A majority protest for the sewer service charge increase exists if protests are submitted in opposition to that adjustment by a majority (50% plus 1) of those sewer users.

6. If there is a majority protest against the imposition of the sewer service charge increase, the City Council shall not adopt that adjustment.

PASSED AND ADOPTED this day of , 2022.

By:

Mayor
ATTEST:

City Clerk
2418162.1

HF&H CONSULTANTS, LLC
Managing Tomorrow’s Resources Today
201 North Civic Drive, Suite 230 Robert D. Hilton, Emeritus Walnut Creek, California 94596 John W. Farnkopf, PE
Tel: (925) 977-6950 Laith B. Ezzet, CMC
Fax: (925) 977-6955 Richard J. Simonson, CMC
hfh-consultants.com Marva M. Sheehan, CPA
Rob C. Hilton, CMC
March 16, 2022
Oscar Antillon
Public Works Director
Town of Los Altos Hills
26379 Fremont Road
Los Altos Hills, CA, 94022
Subject: REVISED Sewer Rate Update
Oscar Antillon:

HF&H Consultants (HF&H) is pleased to submit this sewer rate update letter report. The report summarizes the projected revenue requirements and proposed rates over the next five fiscal years, starting July 1, 2022.

STUDY PURPOSE
This study was authorized by the Town of Los Altos Hill’s (Town) staff in recognition of the need to update the Town’s sewer rates. The purpose of the study was to determine the amount to adjust rates to generate sufficient revenue to cover operating and capital expenditures. This report describes the rate analysis and provides the documentation required to satisfy the Town’s administrative and legal requirements. This report begins with a description of the relevant background and a summary of the evaluation of revenue and expense trends. This report then describes the derivation of the rates reflected in the financial planning model. The appendix contains a copy of the financial planning model.

BACKGROUND
The Town provides sewer services to a population of more than 8,500 in Santa Clara County. The Town is primarily residential as it serves over 1,800 single family connections, four schools, and four other miscellaneous nonresidential connections. The Town contracts with West Bay Sanitary District to provide maintenance services to the Town’s collection system. Roughly half of the connections’ wastewater flows directly to a regional treatment plant in the City of Palo Alto and the other half of the connections’ wastewater flows through the City of Los Altos and eventually conveyed to the same Attachment 2

Town of Los Altos Hills
March 16, 2022

regional treatment plant in Palo Alto. As such, the Town has separate agreements with Palo Alto and Los Altos to treat the respective volumes of wastewater.

In 2015, the Town adopted a 5-year rate schedule that increased sewer service charges from $733 per year in FY 2014-15 to $1,550 in FY 2019-20. The Town’s sewer service charges have not increased since FY 2019-20.

In 2020, HF&H was retained by the Town to update the Town’s sewer service charge.

HF&H conducted the last rate study which recommended rates for a five-year period from FY 2020-21 through FY 2024-25. In that study, HF&H recommended no rate change for the first year followed by a series of 2.0% rates increases for the remaining four years.

Subsequently, in 2021, the Town hired HF&H to determine if the recommended 2.0% rate increase for FY 2021-22 was necessary. It was determined that the Town could forgo the

2.0% rate increase but required 3% rate increases for FY 2022-23 through FY 2025-26. The purpose of this study is to revisit the recommendations for a five-year period from FY 2022-23 through FY 2026-27.

CURRENT RATES & MEASUREMENTS OF SERVICE
The Town’s ratepayers pay a single annual charge for sewer service on a per Equivalent Dwelling Unit (EDU) basis. Each EDU is assessed $1,550 per year and collected on the County tax rolls. Single family residential connections are charged 1 EDU and Accessory Dwelling Units1(ADU’s) are charged 0.5 EDU’s each. Non-residential connections are charged 1.0 EDU per 300 gallons of water use per day or 28 plumbing fixtures. Schools are charged 1.0 EDU for each 68 students, faculty, and staff of its average daily attendance. Figure 1 summarizes the measurements of service. 1 An ADU is defined as “an attached or a detached residential dwelling unit that provides complete independent living facilities for one or more persons and is located on a lot with a proposed or existing primary residence.”

Town of Los Altos Hills
March 16, 2022

Figure 1. Measurements of Service

GENERAL RATE MAKING OBJECTIVES
The derivation of future rates builds on the trend analysis described below. In setting future rates, expenses, revenues, and reserve balances are forecasted. This projection should reflect the Town’s rate-making objectives. The financial planning model that was developed to make these projections reflects the current understanding of the Town’s objectives, which are summarized below:

1. Revenue increases should never be higher than necessary to achieve the Town’s rate-making objectives.

2. The revenue from rates should be as stable and predictable as possible.

3. Rates should be set to generate sufficient revenue to meet the current costs of operations and capital improvements, as well as the long-term financing commitments.

4. The revenue from rates should be sufficient to maintain adequate reserves for operations and capital projects so that the general fund is not burdened by cash flow constraints.

5. The revenue from rates should provide adequate funds so that construction of capital projects and the acquisition of equipment are not delayed because of cash flow constraints.

6. The rate-making process should be as simple as possible to promote understanding and customer acceptance and to facilitate on-going administration. Any changes in these objectives could affect the financial projections.

REVENUE REQUIREMENT PROJECTIONS Customer Class
Single Family Residential
without ADU
with ADU
Non-Residential
Schools

1.00 EDUs

1.50 EDUs

1.00 EDU per 300 gallons per day
or 28 plumbing fixture with 1.00
EDU minimum per location

1.00 EDU for each 68 students +
faculties + staff of Average Daily
Attendence
Measurement of Service

Town of Los Altos Hills
March 16, 2022

To determine whether additional rate revenue is required, projected operating and capital expenses are compared with projected revenue from current rates. Annual surpluses and deficits are then applied to the reserve funds. Rates are then adjusted so that the expenses are covered and operating and capital reserves targets are met.

A spreadsheet model was developed to derive revenue requirements for a 10-year planning period, FY 2022-23 through FY 2031-32. The revenue requirements represent the costs that must be covered by revenue from rates and other sources. The Town’s budget for FY 2021-22 served as the starting point for projecting the Town’s expenses and revenues.

Figure 2 summarizes the assumptions that were used to project expenses through FY 2031-32, based on input from Town staff.

Figure 2. Key Modeling Assumptions
The application of these assumptions to the District’s operating expenses is summarized graphically in Figure 3, and described in more detail following the figure.

Budget
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Annual EDU Growth Rate 0.60% 0.60% 0.59% 0.59% 0.59% 0.58% 0.58% 0.58% 0.57% 0.57% Annual Additional EDUs 12 12 12 12 12 12 12 12 12 12 12 Total EDUs, End of Year 2,000 2,012 2,024 2,036 2,048 2,060 2,072 2,084 2,096 2,108 2,120 General Inflation Budgeted 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Salaries & Wages Budgeted 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Benefits Budgeted 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Construction Cost Inflation Budgeted 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% Interest on Fund Balance 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Annual SFR conservation reduction Budgeted 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Connection Fee $7,950 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 ADU Factor 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%
Projected

Town of Los Altos Hills
March 16, 2022

Figure 3. Sewer Enterprise Annual Projected Expenses

EXPENSE PROJECTIONS

1. Budgeting Practices. The Town develops its sewer budget on a consolidated basis, that is, it compiles the costs for all categories (e.g., salaries and benefits, utilities, maintenance, etc.) for the entire sewer enterprise.

2. O&M Expenses. Operating and Maintenance (O&M) expenses (e.g. salaries and benefits, utilities, maintenance, etc.) will generally increase at the rate of inflation with an average annual increase of 3.1% from FY 2022-23 to FY 2031-

32. 3. Wastewater Treatment Expenses. The Town contracts with the City of Palo Alto to treat its wastewater and the City of Los Altos for conveyance services to send wastewater to the Palo Alto treatment facility. The Town’s costs are anticipated to be $1,050,000 for FY 2021-22 for services provided by the City of Palo Alto.

Projected treatment costs at the Palo Alto facility are higher than previous years as the facility requires significant capital improvements and upgrades to maintain regulatory compliance. Treatment costs allocated to the Town are expected to increase to $1,156,500 in FY 2022-23. Thereafter, Palo Alto facility treatment costs are projected to increase an average of 3.9% annually for the remainder of the planning period, which also reflects additional debt issuances to complete the upgrades. These cost projections are based on the November 2021 Partners’ Meeting of the Regional Wastewater Quality Control Plant.

FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Salaries & Benefits $239,064 $247,455 $256,159 $265,188 $274,555 $284,274 $294,358 $304,823 $315,683 $326,955 $338,655 Treatment Costs $1,595,197 $1,718,053 $1,791,899 $1,830,251 $1,885,624 $2,126,033 $2,171,994 $2,263,524 $2,313,639 $2,361,358 $2,405,199 Other Operations $619,350 $637,931 $657,068 $676,780 $697,084 $717,996 $739,536 $761,722 $784,574 $808,111 $832,355 Capital Projects $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $518,710 $518,710 $518,710 $518,710 $518,710 Net Non-Op Expenses $234,131 $241,155 $248,390 $255,842 $263,517 $271,423 $279,565 $287,952 $296,591 $305,488 $314,653 $3,863,320 $4,020,171 $4,129,094 $4,203,639 $4,296,357 $4,575,303 $4,004,163 $4,136,731 $4,229,197 $4,320,623 $4,409,572 $0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Capital Projects Net Non-Op Expenses Other Operations Salaries & Benefits Treatment Costs Total Revenue with Current Rates Total Revenue with Rate Increases

Town of Los Altos Hills
March 16, 2022

The Town’s costs for FY 2021-22 are anticipated to be $545,197 for conveyance services provided by the City of Los Altos, which are in line with previous actual expenses. Future cost increases will mirror the increases in the charges imposed by the City of Palo Alto.

4. Capital Improvement Costs. At this time, the District does not have a formal Capital Improvement Plan (CIP). The Town has estimated capital costs of $316,830 in FY 2021-22 which is in line with recent years. For FY 2022-23 through FY 2026-27, an engineering consultant identified an average of $1,067,400 in current year dollars necessary to maintain the collection system.

These costs are escalated annually by the ENR CCI resulting in an average of $1,175,577 in each of the next five years. This value will serve as the basis for the capital reserve target. Beginning in FY 2027-28, capital spending will drop to $400k per year in current year dollars.

5. Outstanding Debt. The Town’s sewer enterprise does not have any debt and does not plan on issuing any debt.

6. Reserves. In addition to covering annual expenses, rates need to generate sufficient revenue to maintain adequate operations and capital reserves. To determine what constitutes adequate reserve amounts for rate making purposes, we determine separate operating and capital reserve targets. The Operations Reserve provides working capital for monthly O&M expenses. We recommend an operating reserve of nine months of O&M expenses, which is adequate to cover potential cash flow lags between when the Town incurs expenses and when it receives revenue from billings. Furthermore, nine months will accommodate uneven expense and revenues throughout the year.

Just as working capital is needed to pay O&M expenses, working capital is also needed to fund construction of cash-funded (as opposed to debt-funded) capital projects. For purposes of this study, the average annual capital improvement cost for the next five years is recommended for the capital reserve target.

7. Projections. Costs beyond FY 2026-27 are difficult to project and are shown for informational purposes only. Another study should be conducted prior to FY 2026-27.

REVENUE INCREASES
The required revenue increases are determined by comparing the revenue from existing rates with the revenue requirements described above and summarized in Figure 2. Rate revenue is then increased to reduce or eliminate deficits, provide adequate debt coverage, and maintain reserves. Figure 4 indicates the annual revenue increases that are projected.

Town of Los Altos Hills
March 16, 2022

6.0% annual increases beginning in FY 2022-23 through FY 2025-26 followed by a 4% increase in FY 2026-27 are required to fund projected operating and capital needs and maintain an adequate reserve balance for cash flow purposes and unexpected major repairs. No rate adjustments for the remainder of the planning period appear necessary to maintain reserves. Projected rate adjustments beyond FY 2026-27 are shown for informational purposes. In FY 2026-27, the City of Palo Alto anticipates issuing new debt for needed treatment plant improvements. Another study should be conducted prior to FY 2026-27 as Palo Alto gets closer to issuing additional debt for upgrades at the treatment facility.

Figure 4. Sewer Enterprise Projected Rate Revenues

RESERVE FUNDS
The rate revenue increases (shown in Figure 4) are required to cover O&M and capital expenses. In addition to covering annual expenses, rates need to generate revenue to maintain adequate operations and capital reserves. To determine what constitutes adequate reserve amounts, the reserve balance was subdivided into operations and capital reserves. In this way, it is possible to set recommended target balances for each purpose.

Figure 5 shows the minimum fund balances that are recommended. The minimum fund balances represents the working capital that is needed to meet month-to-month cash flow for O&M expenses. Figure 5 also show the target balances that are recommended. The target balance is derived by adding a contingency for capital improvements to the minimum fund balances. With this contingency, the Town should have sufficient cash on hand to fund its cash-funded capital improvements without cash flow constraints.

Months
Increase
In Effect FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Rate Revenue - Service Charges
Current Service Charge Revenue $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 Revenue due to Growth $0 $18,600 $37,200 $55,800 $74,400 $93,000 $111,600 $130,200 $148,800 $167,400 $186,000 Total Current Revenue - Svc Charge $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Increase in Rate Revenue 0.0% 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% cumulative 0.0% 6.0% 12.4% 19.1% 26.2% 31.3% 31.3% 31.3% 31.3% 31.3% 31.3% Revenue from Current Rates $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Revenue from Rate Increases
FY 2022-23 (eff. Jul 1, 2022) 12 $185,662 $186,778 $187,894 $189,010 $190,126 $191,242 $192,358 $193,474 $194,590 $195,706 FY 2023-24 (eff. Jul 1, 2023) 12 $197,985 $199,168 $200,351 $201,534 $202,717 $203,900 $205,083 $206,266 $207,449 FY 2024-25 (eff. Jul 1, 2024) 12 $211,118 $212,372 $213,626 $214,880 $216,134 $217,388 $218,642 $219,896 FY 2025-26 (eff. Jul 1, 2025) 12 $225,114 $226,444 $227,773 $229,102 $230,431 $231,760 $233,089 FY 2026-27 (eff. Jul 1, 2026) 12 $160,020 $160,959 $161,899 $162,838 $163,777 $164,717 FY 2027-28 (eff. Jul 1, 2027) 12 $0 $0 $0 $0 $0
FY 2028-29 (eff. Jul 1, 2028) 12 $0 $0 $0 $0
FY 2029-30 (eff. Jul 1, 2029) 12 $0 $0 $0
FY 2030-31 (eff. Jul 1, 2030) 12 $0 $0
FY 2031-32 (eff. Jul 1, 2031) 12 $0
Total Revenue from Rate Increases $0 $185,662 $384,764 $598,181 $826,848 $991,750 $997,572 $1,003,393 $1,009,214 $1,015,036 $1,020,857 Total Current Revenue $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Total Revenue with Rate Increases $3,075,774 $3,280,036 $3,497,737 $3,729,754 $3,977,021 $4,160,524 $4,184,945 $4,209,366 $4,233,788 $4,258,209 $4,282,630 Total Revenue Requirement $3,863,320 $4,020,171 $4,129,094 $4,203,639 $4,296,357 $4,575,303 $4,004,163 $4,136,731 $4,229,197 $4,320,623 $4,409,572 Operating Surplus/(Shortfalls) ($787,546) ($740,135) ($631,357) ($473,885) ($319,336) ($414,779) $180,782 $72,636 $4,591 ($62,414) ($126,941) Projected

Town of Los Altos Hills
March 16, 2022

This contingency is also available to help fund short-term deficits such as emergency expenditures or revenue shortfalls.

Figure 5 shows the combined balances for the operating and capital reserves that is projected based on the projected revenue shown in Figure 4. With the proposed rate adjustments, the Town’s sewer enterprise’s total reserve fund balance (solid green line) will end above the minimum balance (solid red line), which covers the enterprise’s operating reserve requirements and the target balance (operating and capital reserve requirements) by the end of the planning period.

Although it is typical to try to reach the target reserve balance at the end of the planning period, achieving a fund balance higher than the target may be acceptable due to the uncertainty of projected costs. Treatment costs have been projected to increase an average of 4% annually over the planning period but these are pass-through costs for the Town. As discussed earlier, other the City of Palo Alto operates the treatment plant that the Town’s sewage flows to. Therefore, the costs of operating the plants are outside of the Town’s control. Furthermore, the City of Palo Alto is considering issuing debt to pay for future capital projects. If interest rates increase more than expected prior to issuing the debt, the Town may be responsible for a higher annual payment. If actual reserves are indeed above the target balance in future years, the Town may consider using the “excess” reserves to reduce their debt obligation to the City of Palo Alto.

Figure 5. Projected Year-End Reserve Balances

RECOMMENDED RATES

Town of Los Altos Hills
March 16, 2022

Figure 6 shows the recommended rate per EDU over the next ten years. These rates are predicated on the assumptions outlined in this technical memorandum. If any of these assumptions are substantially different, the recommended rates should be revisited.

Figure 6. Projected Increase in Service Charge per EDU
Sincerely,

HF&H CONSULTANTS, LLC
Rick Simonson, Senior Vice President
Geoff Michalczyk, Senior Associate
Year % Change
Sewer Charge
per EDU
FY 2021/22 n/a $1,550
FY 2022/23 6.0% $1,643
FY 2023/24 6.0% $1,742
FY 2024/25 6.0% $1,846
FY 2025/26 6.0% $1,957
FY 2026/27 4.0% $2,035
FY 2027/28 0.0% $2,035
FY 2028/29 0.0% $2,035
FY 2029/30 0.0% $2,035
FY 2030/31 0.0% $2,035
FY 2031/32 0.0% $2,035 Page 527 of 551

APPENDIX

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A B C D E F G H I J K L M N
Town of Los Altos Hills
Sewer Model
Summary
Current
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Eff. Date 7/1/2021 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 7/1/2031 Annual Rate Increase 0.0% 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% per EDU ($/year) $1,550 $1,643 $1,742 $1,846 $1,957 $2,035 $2,035 $2,035 $2,035 $2,035 $2,035 $ Change $93 $99 $104 $111 $78 $0 $0 $0 $0 $0
Recommended Projected
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
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$5.0
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Rev Adj. % 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% Projected Reserves Balances
(Millions)
Balance with Rate Increases
Balance w/o Rate Increases
Total Target Reserves
Operating Fund Target
Projected Fund Balance
with Rate Adjustments
Projected Fund Balance
without Rate Adjustments
HF&H Consultants, LLC
3/16/2022 10:44 AM 1 of 7
LAH Sewer Model
Summary

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Town of Los Altos Hills
Sewer Model
Tab 1 - Assumptions
Inflation Factor Assumptions used for projections:

Budget
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Notes a Annual EDU Growth Rate 0.60% 0.60% 0.59% 0.59% 0.59% 0.58% 0.58% 0.58% 0.57% 0.57% Estimate; To Tables 3, 4 Annual Additional EDUs 12 12 12 12 12 12 12 12 12 12 12 Total EDUs, End of Year 2,000 2,012 2,024 2,036 2,048 2,060 2,072 2,084 2,096 2,108 2,120 b General Inflation Budgeted 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% c Salaries & Wages Budgeted 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% d Benefits Budgeted 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% e Construction Cost Inflation Budgeted 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% 3.29% SF Average YoY change 2013 - 2021 f Interest on Fund Balance 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% City Estimate; To Table 4 g Annual SFR conservation reduction Budgeted 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% h Connection Fee $7,950 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 $11,236 To Table 4 i ADU Factor 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Projected
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1 - Assumptions

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Town of Los Altos Hills
Sewer Model
Tab 2 - Revenue Requirements
Source: Town Budget
Inflation Budgeted
Factor FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Operating Expenses
Regular Salaries c $169,103 $174,176 $179,401 $184,783 $190,327 $196,036 $201,917 $207,975 $214,214 $220,641 $227,260 Hourly Salaries c $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Overtime Salaries c $9,000 $9,270 $9,548 $9,835 $10,130 $10,433 $10,746 $11,069 $11,401 $11,743 $12,095 Health Insurance Opt Out d $1,440 $1,512 $1,588 $1,667 $1,750 $1,838 $1,930 $2,026 $2,128 $2,234 $2,346 Retirement-City Share d $22,804 $23,944 $25,142 $26,399 $27,719 $29,105 $30,560 $32,088 $33,692 $35,377 $37,146 Retirement-Employee Share d $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Medicare Matching d $2,555 $2,683 $2,817 $2,958 $3,106 $3,261 $3,425 $3,596 $3,776 $3,964 $4,163 FICA Matching Expense d $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Life Insurance d $622 $653 $685 $720 $756 $793 $833 $875 $918 $964 $1,013 Long Term Disability d $913 $958 $1,006 $1,057 $1,110 $1,165 $1,223 $1,284 $1,349 $1,416 $1,487 Health Insurance Premium Paid d $23,265 $24,428 $25,650 $26,932 $28,279 $29,693 $31,177 $32,736 $34,373 $36,092 $37,896 Dental Insurance Premium d $4,570 $4,798 $5,038 $5,290 $5,555 $5,832 $6,124 $6,430 $6,752 $7,089 $7,444 Vision Care Plan d $504 $530 $556 $584 $613 $644 $676 $710 $745 $782 $822 Benefits Allocation d $4,288 $4,503 $4,728 $4,964 $5,212 $5,473 $5,747 $6,034 $6,336 $6,653 $6,985 Facility Maint & Security b $500 $515 $530 $546 $563 $580 $597 $615 $633 $652 $672 Los Altos Treatment Plant b $545,197 $561,553 $578,399 $595,751 $613,624 $632,033 $650,994 $670,524 $690,639 $711,358 $732,699 Regional WQTP Water Treatment $700,000 $771,000 $809,000 $823,000 $848,000 $996,000 $1,014,000 $1,062,000 $1,082,000 $1,100,000 $1,115,000 Regional WQTP Water Treatment 50% surcharge $350,000 $385,500 $404,500 $411,500 $424,000 $498,000 $507,000 $531,000 $541,000 $550,000 $557,500 Sewer Maintenance Work b $550,000 $566,500 $583,495 $601,000 $619,030 $637,601 $656,729 $676,431 $696,724 $717,625 $739,154 Sewer Main Repairs b $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Engineering Chrgs - Billable b $10,000 $10,300 $10,609 $10,927 $11,255 $11,593 $11,941 $12,299 $12,668 $13,048 $13,439 Other Contract Services b $10,000 $10,300 $10,609 $10,927 $11,255 $11,593 $11,941 $12,299 $12,668 $13,048 $13,439 Legal - City Attorney b $10,000 $10,300 $10,609 $10,927 $11,255 $11,593 $11,941 $12,299 $12,668 $13,048 $13,439 Engineering Consultants b $20,000 $20,600 $21,218 $21,855 $22,510 $23,185 $23,881 $24,597 $25,335 $26,095 $26,878 Advertising/Publishing b $500 $515 $530 $546 $563 $580 $597 $615 $633 $652 $672 City Membership b $500 $515 $530 $546 $563 $580 $597 $615 $633 $652 $672 Permits for Operation b $3,500 $3,605 $3,713 $3,825 $3,939 $4,057 $4,179 $4,305 $4,434 $4,567 $4,704 Data Service Subscriptions b $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267 $1,305 $1,344 Auto & Equipment Parts b $5,000 $5,150 $5,305 $5,464 $5,628 $5,796 $5,970 $6,149 $6,334 $6,524 $6,720 Telephone b $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267 $1,305 $1,344 Electric b $5,000 $5,150 $5,305 $5,464 $5,628 $5,796 $5,970 $6,149 $6,334 $6,524 $6,720 Water b $350 $361 $371 $382 $394 $406 $418 $430 $443 $457 $470 Other General Expense b $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267 $1,305 $1,344 Other Supplies/Materials b $1,000 $1,030 $1,061 $1,093 $1,126 $1,159 $1,194 $1,230 $1,267 $1,305 $1,344 Total O&M $2,453,611 $2,603,439 $2,705,127 $2,772,220 $2,857,263 $3,128,303 $3,205,888 $3,330,069 $3,413,896 $3,496,425 $3,576,209

10.14% 4.93% 1.73% 3.04% 17.45% 1.81% 4.73% 1.88% 1.66% 1.36% Non-Operating Expenses
Overhead Cost Allocation b $186,745 $192,347 $198,118 $204,061 $210,183 $216,488 $222,983 $229,673 $236,563 $243,660 $250,969 Corp Yard Allocation b $26,378 $27,169 $27,984 $28,824 $29,688 $30,579 $31,496 $32,441 $33,415 $34,417 $35,450 Town Center Allocation b $14,306 $14,735 $15,177 $15,632 $16,101 $16,584 $17,082 $17,594 $18,122 $18,666 $19,226 Vehical Equip Operations Alloc b $6,703 $6,904 $7,111 $7,325 $7,544 $7,771 $8,004 $8,244 $8,491 $8,746 $9,009 Total Non-Operating Expenses $234,131 $241,155 $248,390 $255,842 $263,517 $271,423 $279,565 $287,952 $296,591 $305,488 $314,653 Non-Rate Revenue
Miscellaneous b $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Non-Rate Revenue $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal $2,687,743 $2,844,594 $2,953,517 $3,028,062 $3,120,780 $3,399,726 $3,485,453 $3,618,021 $3,710,487 $3,801,913 $3,890,862

5.84% 3.83% 2.52% 3.06% 8.94% 2.52% 3.80% 2.56% 2.46% 2.34% Debt Service
Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Transfers to/(from):

Operating Reserves $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Reserves $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $518,710 $518,710 $518,710 $518,710 $518,710 Total Transfers $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $518,710 $518,710 $518,710 $518,710 $518,710 Total Revenue Requirement $3,863,320 $4,020,171 $4,129,094 $4,203,639 $4,296,357 $4,575,303 $4,004,163 $4,136,731 $4,229,197 $4,320,623 $4,409,572 Annual Change 4.1% 2.7% 1.8% 2.2% 6.5% -12.5% 3.3% 2.2% 2.2% 2.1% Projected
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LAH Sewer Model
2 - Rev Reqmts

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Sewer Model
Tab 3A - Revenue Increases
Months
Increase
In Effect FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Rate Revenue - Service Charges
Current Service Charge Revenue $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 $3,075,774 Revenue due to Growth $0 $18,600 $37,200 $55,800 $74,400 $93,000 $111,600 $130,200 $148,800 $167,400 $186,000 Total Current Revenue - Svc Charge $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Increase in Rate Revenue 0.0% 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% cumulative 0.0% 6.0% 12.4% 19.1% 26.2% 31.3% 31.3% 31.3% 31.3% 31.3% 31.3% Revenue from Current Rates $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Revenue from Rate Increases
FY 2022-23 (eff. Jul 1, 2022) 12 $185,662 $186,778 $187,894 $189,010 $190,126 $191,242 $192,358 $193,474 $194,590 $195,706 FY 2023-24 (eff. Jul 1, 2023) 12 $197,985 $199,168 $200,351 $201,534 $202,717 $203,900 $205,083 $206,266 $207,449 FY 2024-25 (eff. Jul 1, 2024) 12 $211,118 $212,372 $213,626 $214,880 $216,134 $217,388 $218,642 $219,896 FY 2025-26 (eff. Jul 1, 2025) 12 $225,114 $226,444 $227,773 $229,102 $230,431 $231,760 $233,089 FY 2026-27 (eff. Jul 1, 2026) 12 $160,020 $160,959 $161,899 $162,838 $163,777 $164,717 FY 2027-28 (eff. Jul 1, 2027) 12 $0 $0 $0 $0 $0
FY 2028-29 (eff. Jul 1, 2028) 12 $0 $0 $0 $0
FY 2029-30 (eff. Jul 1, 2029) 12 $0 $0 $0
FY 2030-31 (eff. Jul 1, 2030) 12 $0 $0
FY 2031-32 (eff. Jul 1, 2031) 12 $0
Total Revenue from Rate Increases $0 $185,662 $384,764 $598,181 $826,848 $991,750 $997,572 $1,003,393 $1,009,214 $1,015,036 $1,020,857 Total Current Revenue $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Total Revenue with Rate Increases $3,075,774 $3,280,036 $3,497,737 $3,729,754 $3,977,021 $4,160,524 $4,184,945 $4,209,366 $4,233,788 $4,258,209 $4,282,630 Total Revenue Requirement $3,863,320 $4,020,171 $4,129,094 $4,203,639 $4,296,357 $4,575,303 $4,004,163 $4,136,731 $4,229,197 $4,320,623 $4,409,572 Operating Surplus/(Shortfalls) ($787,546) ($740,135) ($631,357) ($473,885) ($319,336) ($414,779) $180,782 $72,636 $4,591 ($62,414) ($126,941) Projected
HF&H Consultants, LLC
3/16/2022 10:44 AM 4 of 7
LAH Sewer Model
3A - Rev Increases

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A B C D E F G H I J K L M
Town of Los Altos Hills
Sewer Model
Tab 3B - Rev at Current Rates
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Residential
Residential Units w/o ADUs
# of Units 1,724 1,724 1,736 1,748 1,760 1,772 1,784 1,796 1,808 1,820 1,832 Growth 0 12 12 12 12 12 12 12 12 12 12
# of Units end of year 1,724 1,736 1,748 1,760 1,772 1,784 1,796 1,808 1,820 1,832 1,844 Annual Rate $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 Annual Revenue $2,672,200 $2,690,800 $2,709,400 $2,728,000 $2,746,600 $2,765,200 $2,783,800 $2,802,400 $2,821,000 $2,839,600 $2,858,200 Residential Units w/ ADUs
# of Units 152 152 152 152 152 152 152 152 152 152 152
Growth in ADUs 0 0 0 0 0 0 0 0 0 0 0
# of Units end of year 152 152 152 152 152 152 152 152 152 152 152 Annual Rate (150% of non ADU rate) $2,325 $2,325 $2,325 $2,325 $2,325 $2,325 $2,325 $2,325 $2,325 $2,325 $2,325 Annual Revenue $353,400 $353,400 $353,400 $353,400 $353,400 $353,400 $353,400 $353,400 $353,400 $353,400 $353,400 Annual Residential Revenue $3,025,600 $3,044,200 $3,062,800 $3,081,400 $3,100,000 $3,118,600 $3,137,200 $3,155,800 $3,174,400 $3,193,000 $3,211,600 Schools
Gardner Bullis 4 4 4 4 4 4 4 4 4 4 4
Pinewood 4 4 4 4 4 4 4 4 4 4 4
St. Nicholas School 3 3 3 3 3 3 3 3 3 3 3
Waldorf Peninsula 2 2 2 2 2 2 2 2 2 2 2
13 13 13 13 13 13 13 13 13 13 13
Annual Rate $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 Annual Revenue from Schools $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 Purissima Hills Water District
Units of Service 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Annual Rate $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 Annual Revenue from Water District $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 Other Commercial
EDUs
Congregation Beth Am 2.33 2.33 2.33 2.33 2.33 2.33 2.33 2.33 2.33 2.33 2.33 Fremont Hills Country Club 8.07 8.07 8.07 8.07 8.07 8.07 8.07 8.07 8.07 8.07 8.07 Seton Provincialate 7.97 7.97 7.97 7.97 7.97 7.97 7.97 7.97 7.97 7.97 7.97 Total EDUs 18.37 18.37 18.37 18.37 18.37 18.37 18.37 18.37 18.37 18.37 18.37 Annual Rate per EDU $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 Annual Revenue $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 Revenue Recap
Annual Revenue from Residential $3,025,600 $3,044,200 $3,062,800 $3,081,400 $3,100,000 $3,118,600 $3,137,200 $3,155,800 $3,174,400 $3,193,000 $3,211,600 Annual Revenue from Schools $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 $20,150 Annual Revenue from Water District $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 Annual Revenue from Other Commercial $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 $28,474 Total Revenue with Current Rates $3,075,774 $3,094,374 $3,112,974 $3,131,574 $3,150,174 $3,168,774 $3,187,374 $3,205,974 $3,224,574 $3,243,174 $3,261,774 Annual Change $18,600 $18,600 $18,600 $18,600 $18,600 $18,600 $18,600 $18,600 $18,600 $18,600 Revenue from Growth $0 $18,600 $37,200 $55,800 $74,400 $93,000 $111,600 $130,200 $148,800 $167,400 $186,000

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Town of Los Altos Hills
Sewer Model
Tab 4 - Reserve Funds
Rev Adj. % 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Operating Reserve
With Rate Increases
Increase in Rate Revenue: 0.0% 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% Beginning Balance $3,297,719 $2,568,252 $1,872,080 $1,271,851 $818,664 $512,509 $103,832 $288,499 $367,631 $379,620 $324,175 Transfer to/(from) Operating Fund ($787,546) ($740,135) ($631,357) ($473,885) ($319,336) ($414,779) $180,782 $72,636 $4,591 ($62,414) ($126,941) Transfers (to)/from:

Revenue Requirements
Capital Reserve $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Fund Subtotal $2,510,173 $1,828,117 $1,240,723 $797,966 $499,329 $97,730 $284,614 $361,134 $372,222 $317,206 $197,234 Estimated Interest Earnings $58,079 $43,964 $31,128 $20,698 $13,180 $6,102 $3,884 $6,496 $7,399 $6,968 $5,214 Ending Balance with Rate Increase $3,297,719 $2,568,252 $1,872,080 $1,271,851 $818,664 $512,509 $103,832 $288,499 $367,631 $379,620 $324,175 $202,448 Target Balance $2,015,807 $2,015,807 $2,133,446 $2,215,138 $2,271,046 $2,340,585 $2,549,794 $2,614,090 $2,713,516 $2,782,865 $2,851,435 $2,918,146 Fund Balance Compared to Minimum 127% 88% 57% 36% 22% 4% 11% 14% 14% 11% 7% Capital Reserve
Beginning Balance $532,937 $1,507,284 $1,570,490 $1,794,020 $2,096,113 $2,369,480 $2,374,934 $2,591,953 $2,797,182 $2,989,854 $3,169,170 Connection Fee Revenue $95,400 $134,832 $134,832 $134,832 $134,832 $134,832 $134,832 $134,832 $134,832 $134,832 $134,832 Capital Projects Expenditures ($316,830) ($1,277,677) ($1,120,190) ($1,046,833) ($1,081,256) ($1,351,929) ($485,699) ($501,671) ($518,167) ($535,206) ($552,806) Transfers (to)/from:

Revenue Requirements $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $1,175,577 $518,710 $518,710 $518,710 $518,710 $518,710 Operating Fund $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Fund Subtotal $1,487,084 $1,540,017 $1,760,708 $2,057,597 $2,325,266 $2,327,959 $2,542,776 $2,743,824 $2,932,557 $3,108,190 $3,269,906 Estimated interest earnings $20,200 $30,473 $33,312 $38,516 $44,214 $46,974 $49,177 $53,358 $57,297 $60,980 $64,391 Ending Balance $532,937 $1,507,284 $1,570,490 $1,794,020 $2,096,113 $2,369,480 $2,374,934 $2,591,953 $2,797,182 $2,989,854 $3,169,170 $3,334,297 Target Balance $968,557 $968,557 $1,175,577 $1,017,182 $893,478 $787,744 $678,535 $518,710 $518,710 $518,710 $518,710 $518,710 Fund Balance Compared to Target 156% 134% 176% 235% 301% 350% 500% 539% 576% 611% 643% Operating Fund
Without Rate Increases
Increase in Rate Revenue: 0.0% 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% Beginning Balance $3,297,719 $2,568,252 $1,684,561 $691,970 ($376,976) ($1,523,160) ($2,929,689) ($3,746,478) ($4,677,236) ($5,681,859) ($6,759,308) Transfer to/(from) Operating Fund ($787,546) ($925,798) ($1,016,121) ($1,072,065) ($1,146,184) ($1,406,529) ($816,790) ($930,757) ($1,004,623) ($1,077,449) ($1,147,798) Transfers (to)/from:

Revenue Requirements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Reserve $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Fund Subtotal $2,510,173 $1,642,454 $668,440 ($380,095) ($1,523,160) ($2,929,689) ($3,746,478) ($4,677,236) ($5,681,859) ($6,759,308) ($7,907,106) Estimated Interest Earnings $58,079 $42,107 $23,530 $3,119 $0 $0 $0 $0 $0 $0 $0 Ending Balance with Rate Increase $3,297,719 $2,568,252 $1,684,561 $691,970 ($376,976) ($1,523,160) ($2,929,689) ($3,746,478) ($4,677,236) ($5,681,859) ($6,759,308) ($7,907,106) Target Balance $2,015,807 $2,015,807 $2,133,446 $2,215,138 $2,271,046 $2,340,585 $2,549,794 $2,614,090 $2,713,516 $2,782,865 $2,851,435 $2,918,146 Fund Balance Compared to Minimum 127% 79% 31% -17% -65% -115% -143% -172% -204% -237% -271% Reserve Funds
Balance with Rate Increases $3,830,656 $4,075,536 $3,442,570 $3,065,872 $2,914,777 $2,881,988 $2,478,766 $2,880,452 $3,164,813 $3,369,474 $3,493,345 $3,536,745 Balance w/o Rate Increases $3,830,656 $4,075,536 $3,255,051 $2,485,991 $1,719,137 $846,320 ($554,755) ($1,154,525) ($1,880,054) ($2,692,005) ($3,590,138) ($4,572,809) Operating Fund Target $2,015,807 $2,015,807 $2,133,446 $2,215,138 $2,271,046 $2,340,585 $2,549,794 $2,614,090 $2,713,516 $2,782,865 $2,851,435 $2,918,146 Capital Reserve Target $968,557 $968,557 $1,175,577 $1,017,182 $893,478 $787,744 $678,535 $518,710 $518,710 $518,710 $518,710 $518,710 Total Target Reserves $2,984,364 $2,984,364 $3,309,023 $3,232,319 $3,164,524 $3,128,330 $3,228,329 $3,132,800 $3,232,225 $3,301,575 $3,370,145 $3,436,856 Fund Balance Compared to Target 137% 104% 95% 92% 92% 77% 92% 98% 102% 104% 103% Estimated Interest Earnings $78,279 $74,437 $64,440 $59,214 $57,394 $53,077 $53,062 $59,854 $64,696 $67,949 $69,605 Net Change in Reserves $244,880 ($632,966) ($376,698) ($151,094) ($32,789) ($403,223) $401,686 $284,361 $204,661 $123,871 $43,400 HF&H Consultants, LLC
3/16/2022 10:44 AM 6 of 7
LAH Sewer Model
4 - Reserves

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Town of Los Altos Hills
Sewer Model
Tab 5 - Capital Improvement Program
Total
Project Description FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Project Cost Capital Outlay $316,830 $1,237,000 $1,050,000 $950,000 $950,000 $1,150,000 $400,000 $400,000 $400,000 $400,000 $400,000 $7,653,830 $0
$0
Total Project Costs $316,830 $1,237,000 $1,050,000 $950,000 $950,000 $1,150,000 $400,000 $400,000 $400,000 $400,000 $400,000 $7,653,830 ENR CCI 100% 103.3% 106.7% 110.2% 113.8% 117.6% 121.4% 125.4% 129.5% 133.8% 138.2% 142.7% $316,830 $1,277,677 $1,120,190 $1,046,833 $1,081,256 $1,351,929 $485,699 $501,671 $518,167 $535,206 $552,806 $8,788,264 Average Annual Cash-Funded Projects (FY 2022-23 to FY 2026-27) $1,175,577 HF&H Consultants, LLC
3/16/2022 10:44 AM 7 of 7
LAH Sewer Model
5 - LAH CIP

The Town of Los Altos Hills (Town) provides sewer service to over 1,800 residential units in the Town and eight commercial and institutional customers. The Town’s sewer utility is supported primarily by sewer service charges billed to residents connected to the public sewer system on their property tax bill. The current annual cost for a typical single family residential unit is $1,550. Revenue from sewer rates must be adequate to fund sewer utility’s operation and maintenance costs, as-needed obligations, and ongoing capital improvement needs.

The Town is proposing to implement a series of sewer rate increases over the next five years to keep revenues aligned with long-term funding needs for operations, maintenance, capital improvements, treatment plant improvements, and associated work. The proposed rate adjustments are based on analysis by an independent firm and are being phased in to help minimize the annual impact on customers. Proposed rates were developed with input from the Town’s Finance and Investment Committee, a town volunteer group with financial background appointed by the City Council to provide input and advice to the Town on financial and investment matters.

Sewer System Overview
The Town manages a sewer collection system that comprises approximately 56 miles of gravity sewer pipelines, 4 miles of pressurized force mains, and 2 pumping stations. Wastewater is collected and conveyed through the Cities of Los Altos and Palo Alto to the Palo Alto Regional Water Quality Control Plant for treatment. The Town has a long-term agreement with City of Palo Alto that requires the Town to funds its share of operating and capital costs based on the wastewater flows to City of Palo Alto’s facility.

What is the Rate Increasing?
The Town has an aging sewer collection system. Funds are needed to repair and replace the aging system and avoid overflows. Furthermore, projected treatment costs at the Palo Alto treatment facility are higher than previous years as the facility requires significant capital improvements and upgrades to maintain regulatory compliance.

The proposed rate adjustments are designed to enable the Town to meet its long-term sewer enterprise funding needs with a series of 6% rate adjustments followed by a 4% in FY 2026-27. The proposed rates are needed to:
• Operate and maintain the collection system.
• Fund a projected increase in costs for wastewater treatment and transmission services from the Cities of Los Altos and Palo Alto. In addition to higher operating costs, there will be capital improvement costs in the Palo Alto Regional Water Quality Control Plant. The Town is responsible for funding its share of these capital costs.
• Provide adequate funding for a long-term, sustainable capital improvement program for Town’s aging sewer infrastructure.
• Maintain sufficient sewer fund reserves.

Proposed Sewer Rate
The Town’s current sewer service charge for a single-family residential unit is $1,550 per year per equivalent dwelling unit (EDU). All customers are billed on the annual property tax rolls.

The Sewer Fund is an Enterprise Fund that is a self-supporting activity which provides service on a user charge basis to residences and businesses. Sewer Service Charges are set to recover revenues sufficient to adequately fund sewer utility operations, maintenance, and capital replacement expenditures while keeping rates as competitive as possible and maintaining a prudent level of reserves.

Sewer Service Rate Increase Notice
To Certain Town Property Owners
Attachment 3

Sewer Service Charges were calculated as shown below in Figure 1 to provide the annual revenue requirements needed for FY 2022-23 through FY 2026-27. The charge is per equivalent dwelling unit (EDU). Measurements of service are show below in Figure 2.

Figure 1. Proposed Sewer Service Charges
Service Charges
(Annual) Current FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 Sewer charge per EDU $1,550 $1,643 $1,742 $1,846 $1,957 $2,035 Change $ 0 $93 $99 $104 $111 $78
Figure 2. Measurements of Service
Public Hearing and Written Protests
The City Council will hold a public hearing at the following time and place to consider the proposed increase in sewer service charge rates and to receive protests against the proposal.

Date: Thursday, May 19, 2022
Time: 6:00 p.m.

Place: Town Hall, Council Chambers
26379 Fremont Road
Los Altos Hills, CA
At the time of the hearing, all interested persons will be entitled to address the City Council concerning the proposal. Property owners may submit written protests, against the proposed sewer rates at or before the meeting to the City Clerk at the address shown above.

Written protests shall include name, address, and signature of the property owner(s) and the Assessor’s Parcel Number of the property or properties, which can be found on the annual property tax roll. No electronic submittals will be accepted. All written protests must be delivered to the City Clerk (either in person or by mail) before the close of the public hearing. If written protests against the proposed sewer service charge rates are presented by a majority of owners of parcels affected, the proposed rates will not be adopted. However, if the proposed rates are not adopted at this time, the Town’s sewer service could be significantly compromised and/or substantially greater rate increases will be needed in subsequent years.

Written protest shall be sent to the City Clerk at:

Town of Los Altos Hills
26379 Fremont Road
Los Altos Hills, CA 94022
Customer Class
Single Family Residential
without ADU
with ADU
Non-Residential
Schools

1.00 EDUs

1.50 EDUs

1.00 EDU per 300 gallons per day
or 28 plumbing fixture with 1.00
EDU minimum per location

1.00 EDU for each 68 students +
faculties + staff of Average Daily
Attendence
Measurement of Service

10-Year Financial Plan Projections
Town of Los Altos Hills Sewer Rate Study March 2022
Current
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Eff. Date 7/1/2021 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 7/1/2031 Annual Rate Increase 0.0% 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% per EDU ($/year) $1,550 $1,643 $1,742 $1,846 $1,957 $2,035 $2,035 $2,035 $2,035 $2,035 $2,035 $ Change $93 $99 $104 $111 $78 $0 $0 $0 $0 $0
Recommended Projected
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Rev Adj. % 6.0% 6.0% 6.0% 6.0% 4.0% 0.0% 0.0% 0.0% 0.0% 0.0% Projected Reserves Balances
(Millions)
Propjected Year-End Unrestricted Cash Balance
Balance with Rate Increases
Balance w/o Rate Increases
Total Target Reserves
Operating Fund Target
Projected Fund Balance withRate
Adjustments (solid)
Projected Fund Balance without
Rate Adjustments (dashed)

AGENDA ITEM #12.A

12. REPORTS FROM COMMITTEES, SUB-COMMITTEES, AND

COUNCILMEMBERS ON OUTSIDE AGENCIES
A. Report by the Undergrounding Subcommittee (Vice Mayor Tyson) A presentation may be posted on or before March 17, 2022

Safety Committee Update
Responsibilities:
• identifying safety concerns
• proposing possible solutions
• working to mitigate hazards
• planning for disaster response
• communicating during emergencies
Committee will include interested members of the community, liaisons from ECC and other committees (open space, technology, CERT, others?), town staff and LAHCFD staff.

AGENDA ITEM #12.B
Distributed 3/16/22

AGENDA ITEM #12.C

12. REPORTS FROM COMMITTEES, SUB-COMMITTEES, AND

COUNCILMEMBERS ON OUTSIDE AGENCIES
C. Report from the Council Subcommittee on Community Surveys (Councilmember Schmidt) There is no report for this item.

From:

To: City Council; Peter Pirnejad
Cc: ; Deborah Padovan
Subject: Public Comments on Agenda Item 12.C for the March 17, 2022 City Council Meeting Date: Sunday, March 13, 2022 2:15:37 PM
Mayor, Vice Mayor, Council Members and City Manager,
Regarding Agenda Item 12.C,

12.C-Report on Community Surveys
I assume the effort to launch a resident survey was a result of the January 2022 priority goal setting discussions for LAH resulting in the formation of a new Ad Hoc committee. That committee's mission is to:

Establish a City Council Ad Hoc Town Hall Committee to
Evaluate Parks and Recreation Program Space, Staffing Needs, and Facilities that will be needed over the next 10 years.

Engage
with residents and staff to brainstorm how to meet and best fund those needs.

The purpose of my comments here is to make sure we avoid the pitfalls of earlier surveys concerning needs to create more space for the community and for staff. The Town needs to review lessons learned from mistakes in performing previous Town Surveys.

Has the Town reached out to our Parks and Recreation Committee (PRC) for their input before proceeding with the surveys? In 2016 there was a survey of residents that was conducted concerning many of these same issues. Unfortunately, this effort proved to be a waste of time and money. The questions generated for the survey were skewed resulting in flawed results.

Misguided plans for the expansion of Town Hall resulted from that survey. The Phase 2 expansion plan for our Town Hall was recently defeated. Spending more than $3,500 per square foot for an expansion of Town Hall resulting in an increase of only 1000+/- square feet made no sense to many residents. With current building costs, estimates are that the total costs for Phase 2 now would be over $6,000,000. It would Supplemental No. 1
AGENDA ITEM #12.C
Distributed 3/14/22

have been a huge waste of taxpayer dollars.

In the previous survey, building a community center/park space ended up being a low priority even though there was (and still is) a strong community interest in creating more park space and communityenhancing venues. How surveys are worded can affect the outcome.

The survey should also mention that plans are underway to solicit taxdeductible donations from residents to help pay for the park/community center. Great care must be taken in the way the questions are worded.

Parks and Rec has been involved in efforts to create a community center in the past. Unfortunately, in the 2016-2021 efforts to look at space needs, the PRC's concepts for community spaces and parks were disregarded, even though they were the group that first identified the need for more park and community-building space. With new Council Members and Town staff leadership, this effort can be more productive and include the creative ideas and vision identified before.

The PRC envisions a bolder, totally different location for a Community Park/Community Center concept. The current town hall site doesn't have the land needed to support a town wide community park and modest community center. It is unclear from this agenda item how the Ad Hoc committee will be populated by residents and how options for a totally new park and community center will be considered.

I would propose that you delay your survey until the PRC helps formulate the survey. Do not repeat the mistakes of the past.

Thanks for your consideration.

Best Regards,
John Swan

AGENDA ITEM #12.D

12. REPORTS FROM COMMITTEES, SUB-COMMITTEES, AND

COUNCILMEMBERS ON OUTSIDE AGENCIES
D. Status Reports from All Councilmembers on Subcommittee and Outside Agencies Activities
There is no presentation for this item.

in creating more park space and community-enhancing venues.

The Parks and Recreation Committee (PRC) has been promoting both the Legacy Giving concept and the Community Park/Community Center for years. In the past, the PRC's concepts for community spaces and parks were disregarded. The Parks and Recreation Committee (PRC) involvement in that 2016 process was completely undermined, even though they were the group that first identified the need for more park and community-building space. With new Council Members and Town staff leadership, these two Ad Hoc committees can be more productive and include the creative ideas and vision identified before.

The PRC envisions a bolder, totally different location for a Community Park/Community Center concept. The current town hall site doesn't have the land needed to support a town wide community park and modest community center. It is unclear from the Ad Hoc committee's missions how options for a totally new park and community center will be considered.

I also would propose that the FIC take a lead role to help formulate the new Legacy Giving process. If implemented and promoted correctly, we should be able to build a new park that also has a multi-use community center on the campus that is significantly underwritten by residents who want to give back. Even though we have roughly $18,000,000 in reserves, we should leverage that money with a Legacy Giving program that can be patterned after successful efforts executed by Portola Valley and Atherton, to name just two.

Also, let’s be very creative with exploring options. For example, what about a joint venture with Foothill College to leverage off of their location and existing infrastructure to build these assets very cost effectively? What about looking at Fremont Hills Country Club or Purissima Park Fields? The Town Hall site should not be the only option for expansion for many reasons.

A more detailed definition of the Ad Hoc committees' missions and identification of how you will include resident input is needed.

Thanks for your consideration.

Best Regards,
John Swan

Administrative Services Staff Report

CITY COUNCIL MEETING
MARCH 17, 2022
AGENDA ITEM #13.E

LICENSE AND PERMITS

CHARGE FOR SERVICES

AGENDA ITEM #14.A

14. COUNCIL INITIATED
A. Possible Action on Hosting a Roundtable with the Community on Public Safety (Councilmember Tankha)
There is no presentation for this item.