Agenda packet, regular meeting — Orinda City Council, March 12, 2024 (part 1 of 2)

MEMBERS OF THE PUBLIC MAY PARTICIPATE IN THIS MEETING

IN PERSON, OR VIEW ON ZOOM OR YOUTUBE AS LISTED BELOW
https://www.youtube.com/@cityoforinda9535/streams
Zoom Webinar:
https://tinyurl.com/OrindaCityCouncil
Phone:669 444 9171
Webinar ID:
810 2271 2723
In Person:

Orinda Library Auditorium
26 Orinda Way
Orinda, CA 94563
(925) 351-6676

CITY COUNCIL
AGENDA
Tuesday, March 12, 2024
7:00 PM - REGULAR MEETING
City Council
Agenda Page 1 03.12.24
How to follow and/or participate in the meeting:

IN PERSON SPEAKER CARDS: If you would like to speak during the public forum or on an item listed on the agenda, you are invited to submit a speaker card to the City Clerk. You will be permitted to speak even if you elect not to submit a speaker card or decline to provide information requested on the card. After the City Council has heard from everyone who submitted speaker cards, anyone electing not to submit a speaker card may form a line at the lectern. Public comment is generally limited to 3 minutes per speaker per agenda item.

WRITTEN COMMENTS: You may also submit a public comment in advance of the meeting by following instructions below:

Deliver to City Hall at 22 Orinda Way or send an e-mail to [email protected] by 3pm on the day of the meeting. Those comments will be forwarded to the City Council. They will also be made a part of the public record and be available to view in the public review binder at Orinda City Hall, 22 Orinda Way. In addition, they will be available electronically by 5pm on the day of the meeting by selecting the date of the meeting in this Box account link:
https://tinyurl.com/Orinda-Public-Comments
REMOTE COMMENTS: Remote Public Comments have been discontinued for the foreseeable future.
7:00 PM - REGULAR SESSION
A. CALL TO ORDER / ROLL CALL
Councilmembers: Brandyn Iverson, Inga Miller, Janet Riley Vice Mayor Latika Malkani, Mayor Darlene Gee
B. PLEDGE OF ALLEGIANCE
City Council
Agenda Page 2 03.12.24
C. ADOPTION OF AGENDA
The City Council may take action on any item listed on the agenda.

D. ITEMS FOR THE GOOD OF THE CITY
D.1. Proclamation Declaring March, 2024 as American Red Cross Month E. PUBLIC FORUM
The public forum provides an opportunity for members of the public to speak on any item within the jurisdiction of the City Council that is not on the agenda.

Additionally, a speaker has the option of addressing the Council on an item listed on the agenda, if the speaker will not be present when that agenda item is taken up. When an item is not listed on the agenda, State law prohibits Council discussion or action. Councilmembers may only “briefly respond” to statements made and questions posed. For example, State law allows Councilmembers to ask questions for clarification and provide a reference to staff or other resources for factual information. Additionally, consistent with the “Matters Initiated” rule contained in its Policies and Procedures Manual, the Council may also direct staff to report back and/or place a matter on a future agenda for discussion.

F. CONSENT CALENDAR
F.1. Consider any Amendments and Adopt City Council Policy & Procedures Manual
Recommendation:

Adopt Resolution No. 08-24 adopting an amendment to the City Council Policies and Procedures Manual
F.2. Appointment to the Traffic Safety Advisory Committee Recommendation:

Consider appointment of Molly Doctors Rajashekhar to the vacant position on the Traffic Safety Advisory Committee, or set interview date.

F.3. Establishing the Rate per Equivalent Runoff Unit (ERU) for Fiscal Year 2024-25 and requesting the Contra Costa County Flood Control and Water Conservation District to Adopt an Annual Parcel Assessment for Drainage Maintenance and the National Pollutant Discharge Elimination System (NPDES) Program
Recommendation:

Staff recommends adoption of Resolution No. 03-24, establishing the Equivalent Runoff Unit (ERU) for Fiscal Year 2024-25 for the National Pollutant Discharge Elimination System (NPDES) Program at the same rate as was levied in the current year.

F.4. Accept contract with McGuire-Pacific Construction for the Red Flag Parking Sign Project #4197
City Council
Agenda Page 3 03.12.24
Recommendation:

Staff recommends that the City Council adopt Resolution 09-24, "Acceptance of Work for the Red Flag Parking Sign Project No. 4197 by McGuire-Pacific Constructors and authorize the City Clerk to sign and file the Notice of Completion with the Contra Costa County Clerk-Recorder.

F.5. Award Construction Contract to Hardiman Construction Inc. for the Group 2 Stormdrain Lining Project (CIP Project Nos. 3101 & 3102) Recommendation:

Staff recommends that the City Council award the Construction Contract to Hardiman Construction Inc. of Larkspur, California for the bid amount of $582,150; authorize program expenditure up to $670,000 (includes a 15% contingency); authorize the City Manager to execute the contract on behalf of the City, and approve plans for the project.

F.6. Acceptance of 2023 Annual Pavement Rehabilitation Contract (CIP No. 4171)
Recommendation:

Staff recommends that the City Council adopt Resolution No.06-24 Acceptance of Contract for the 2023 Annual Pavement Rehabilitation Project (CIP No 4171) with Goodfellow Bros. LLC. and authorize the City Clerk to sign and file the Notice of Completion with the Contra Costa County Clerk-Recorder.

F.7. Authorize Contract Amendment No.2 with Wildland Corporation for services related to Chipper Services.

Recommendation:

Staff recommends that the City Council approve a Contract Amendment Wildland Corp to increase the not to exceed contract value from $225,000 to 400,000.

G. PUBLIC HEARING
H. POLICY MATTERS
H.1. Quarterly Financial Report (2nd Qtr FY 2023-24) and Mid-Year Budget Adjustments
Recommendation:

Receive the report and authorize Staff to record the Budget adjustments as described in Attachment F (Budget Change Form).

H.2. Follow-Up Report on Inclusionary Housing Ordinance Options Recommendation:

Receive Report regarding Inclusionary Housing Ordinances, Discuss Key Parameters, and Direct Staff to Prepare an Ordinance for Review and Consideration.

H.3. Annual Review and Update on Council Strategic Priorities City Council
Agenda Page 4 03.12.24
Recommendation:

Receive Report, Discuss, and Provide Direction, if any.

H.4. Measure R (Orinda Essential Services Measure, Approved by the Voters November 2020): Priorities and Alignment Discussion and Follow-Up, including possible joint meeting of the City Council and Supplemental Sales Tax Oversight Commission (SSTOC)
Recommendation:

Receive Report, Discuss, and Provide Direction, if any.

I. COUNCILMEMBERS' REPORTS
J. CITY MANAGER'S REPORT
K. MATTERS INITIATED
L. CLOSED SESSION

1. OPEN SESSION IDENTIFICATION of Closed Session Matters

2. PUBLIC COMMENTS of Closed Session Matters

3. CLOSED SESSION

4. REPORT OUT OF CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL -- EXISTING LITIGATION. Pursuant to Government Code Section 54956.9(d)(1), conference with Legal Counsel regarding existing litigation: ORINDANS FOR SAFE EMERGENCY EVACUATION v. City of Orinda, Contra Costa County Superior Court Case No.

N23-0579.

M. ADJOURNMENT
The next meeting of the Orinda City Council will be held on Tuesday, April 16, 2024 at 7:00 PM.

Please visit the City’s website at www.cityoforinda.org to view the City Council Calendar.

I, Sheri Marie Smith, City Clerk, declare under penalty of perjury under the laws of the State of California that this special meeting agenda has been posted at least 24 hours in advance at the Orinda City Hall, 22 Orinda Way and the Orinda Library, 26 Orinda Way.

Additional copies are available at the Orinda Library, 26 Orinda Way, and at the City’s website at www.cityoforinda.org. At least 24 hours in advance of the meeting, this agenda was also delivered to and received by each member of the City Council as well as each local newspaper, radio station and television station requesting written notice of special meetings.

I, Sheri Marie Smith, City Clerk, declare under penalty of perjury under the laws of the State of California that this regular meeting agenda has been posted at least 72 hours in advance at the Orinda City Hall, 22 Orinda Way and the Orinda Library, 26 Orinda Way. Additional copies are available at the Orinda Library, 26 Orinda Way, and at the City’s website at www.cityoforinda.org
City Council
Agenda Page 5 03.12.24
~ Notices ~
There is a 90-day limit for the filing of a challenge in Court to certain City decisions that require a hearing by law, the receipt of evidence, and the exercise of discretion. The 90-day limit begins on the date the decision is final (Code of Civil Procedure §1094.6). Further, if you file a challenge in Court, you may be limited by California law, including but not limited to Government Code §65009, to those issues raised in connection with the public hearing. The City Council may be requested to reconsider a decision if the request is made prior to the next City Council meeting. For information on the next City Council meeting, please call 925.253.4221 or visit the website at www.cityoforinda.org. Unless otherwise noted, City Council actions include a determination that the California Environmental Quality Act (CEQA) does not apply. ~ Accessible Public Meetings ~
The City of Orinda will provide special assistance for disabled citizens to participate in public meetings upon advance notice. If you need auxiliary hearing aid or sign language assistance at least two (2) working days advanced notice is necessary. Please contact the City Clerk’s Office, 22 Orinda Way, Orinda, Ca 94563 or 925.253.4221 or [email protected] with the following information: name, mailing address, phone number and type of assistance requested.

D.1
Packet Pg. 6
Communication: Proclamation Declaring March, 2024 as American Red Cross Month (ITEMS FOR THE GOOD OF THE CITY) City Council
Staff Report
Agenda Item: F.1
Date: March 12, 2024
Department: City Clerk
AGENDA TITLE: Consider any Amendments and Adopt City Council Policy & Procedures Manual
RECOMMENDATION:

Adopt Resolution No. 08-24 adopting an amendment to the City Council Policies and Procedures Manual
BACKGROUND:

The City Council reviews its Policy and Procedures Manual on an annual basis. It was last reviewed on March 20, 2024. Revisions were made at that meeting Council directed staff to review the proposed revisions in Section 11 and come back with alternate language based on the feedback provided at the meeting.

DISCUSSION:

Staff is proposing to the following redlined language to Sections 11 and to delete the following two paragraphs. These changes are proposed as they are consistent with current practices.

11. Administrative Matters

11.1 Correspondence

11.1.1 Electronic Correspondence
Council members shall use accounts issued to them by the City for all electronic correspondence (e.g., email) regarding City business. Council members shall not use accounts issued to them by the City for personal correspondence.

Emails sent by members of the public to Council members are public records. When these emails are related to a City Council Meeting agenda item, they are forwarded to the City Clerk to include in the staff report for the relevant agenda item or in the late public communication packet, depending on whether the communication is received before or after the agenda packet is published.

Council members may elect to forward copies of emails they receive to the City Clerk, who will include such emails in the staff reports for relevant agenda items and/or forward the emails to the whole City Council, if doing so would not violate the Brown Act.

F.1
Packet Pg. 7
Emails sent to the whole City Council via a general City email address will be reviewed by the City Manager or his/her designee and forwarded to all Council members, if doing so would not violate the Brown Act.

FISCAL IMPACT:

None.

ATTACHMENTS:

A. Resolution 08-24 Amending Policies Procedures Manual B. City Council Policies Procedures Manual (March 12, 2024 proposed updates) Respectfully Submitted by:

Sheri Smith
City Clerk
Prepared By: Sheri Smith, City Clerk
Approved by:

F.1
Packet Pg. 8
1 BEFORE THE CITY COUNCIL OF THE CITY OF ORINDA
IN THE MATTER OF:

Amending and Adopting the
City Council Policies and
Procedures Manual
_________________________
)
)
)
)
Resolution No. 08-24
WHEREAS, the City Council reviews its Policies and Procedures Manual annually to determine if it needs any updates; and
WHEREAS, at the City Council Meeting of February 20, 2024, the City Council reviewed and determined it appropriate to amend its Policies and Procedures Manual.

Several amendments were made and others were continued to a future meeting pending staff review; and
WHEREAS, further amendments were considered at the City Council Meeting of March 12, 2024, the City Council reviewed and determined it appropriate to further amend its Policies and Procedures Manual.

NOW, THEREFORE, BE IT RESOLVED that the Orinda City Council does hereby amend the Orinda City Council Policies and Procedures Manual as shown in Exhibit A and as amended at the City Council Meeting of March 12, 2024.

BE IT FURTHER RESOLVED: that the Orinda City Council does hereby adopt the Orinda City Council Policies and Procedures Manual as amended.

Adopted by the City Council of the City of Orinda at a regular meeting on March 12, 2024, by the following vote:

AYES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:
_________________________________
Darlene Gee, Mayor
ATTEST:
____________________________
Sheri Marie Smith, City Clerk
F.1.a
Packet Pg. 9
Attachment: Resolution 08-24 Amending Policies Procedures Manual (3316 : Adoption of Updated Policy & Procedures Manual) 1 CITY COUNCIL, CITY OF ORINDA

POLICIES AND PROCEDURES MANUAL
Section Page
l. Authority 2

2. Meetings 2

3. Agenda 5

4. Public Participation 7

5. Conducting Meetings 8

6. Quasi-Judicial Hearings 12

7. Voting 14

8. Officers 15

9. Boards, Commissions, and Committees 16

10. Ordinances 16

11. Administrative Matters 17

12. Emergency Procedures 18

13. Suspension, Amendment of These Rules 19
Adopted: Effective November 1, 2005
Amended Effective March 6, 2007 (Resolution No. 11-07)
Amended Effective April 10, 2007 (Resolution No. 14-07) Amended Effective March 2, 2010 (Resolution No. 14-10)
Amended Effective May 7, 2013 (Resolution No. 28-13)
Amended Effective February 18, 2014 (Resolution No. 11-14) Amended Effective February 3, 2015 (Resolution No. 09-15) Amended Effective March 15, 2016 (Resolution No. 20-16) Amended Effective August 2, 2016 (Resolution No. 44-16) Amended Effective February 6, 2018 (Resolution No. 04-18) Amended Effective March 16, 2021 (Resolution No. 14-21) Amended Effective February 1, 2022 (Resolution No. 05-22) Amended Effective March 21, 2023 (Resolution No. 20-23) Amended Effective February 20, 2024 (Resolution No. 01-24) F.1.b
Packet Pg. 10
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 2 l. Authority
The City Council establishes these Rules of Procedure for the conduct of meetings. The following Rules shall be in effect upon their adoption by the City Council and until such time as they are amended or new Rules are adopted in the manner provided by these Rules.

2. Meetings

2.1 Meeting Dates and Times

2.1.1. Dates. Regular meetings will be held on the first and third Tuesday of each month or as set by calendar adopted by the City Council. Adjourned regular, workshop or special meetings may be called by the Mayor or a majority of the Council. If the meeting date should fall on a legal holiday, the Council shall meet at an alternate time and date designated by the Council.

2.1.2. Starting Time. All regular meetings will convene at 7:00 p.m.

Meetings will be held at the Library Auditorium at 26 Orinda Way, Orinda, unless stated otherwise in the notice. Meetings may be preceded or followed by special meetings, including closed sessions.

2.1.3. Ending Time. Meetings will adjourn at or before 10:00 p.m. A majority vote of the City Council will be required to continue the meeting past 10:00 p.m.

A unanimous vote of the City Council will be required to continue meetings beyond 11:00 p.m. A continuance beyond 11:30 shall specify time of adjournment. More than one such continuance may be adopted.

2.2 Closed Sessions
A closed session may be held at any regular or special meeting for any purpose authorized by the Brown Act. It is a violation of the Brown Act to disclose information obtained or presented in anticipation of or during a closed session, which shall be confidential. Public comment shall be received in open session prior to a closed session.

The City Council will report out in open session any actions taken in closed session consistent with the requirements of the Brown Act.

2.3 Special Meetings
Special meetings may be called by the Mayor or by a majority of the Council members.

The City Attorney or the City Manager is authorized to call a special meeting when it is to be held immediately before or after a regular meeting and is to discuss a matter in closed session. The call for a special meeting must specify the day, hour, and place and shall specify the subject(s) to be considered. Twenty-four hours notice must be received prior to a special meeting by each Council member, the local newspaper of general circulation, and radio and television stations which have requested notice. Only matters specified in the notice may be discussed at special meetings. The public shall be given an F.1.b
Packet Pg. 11
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 3 opportunity to address the Council before or during consideration of any matter described in the notice for the special meeting.

2.4 Quorum
Three members of the Council shall constitute a quorum necessary to transact business.

In the event a quorum is not in attendance, those attending will be named in the minutes, and they shall adjourn the meeting to a later set time.

2.5 Adjournment
The Council may adjourn any regular, adjourned regular, special or adjourned special meeting to a time and place specified in the order of adjournment. If all Council members are absent from any regular or adjourned regular meeting, the City Clerk may declare the meeting adjourned to a stated time and place. The City Clerk shall post a copy of the order or notice of adjournment as required by the Brown Act and other places designated by the Council within twenty-four (24) hours after the time of adjournment.

Whenever a regular or adjourned regular meeting is adjourned as provided in this section, the resulting adjourned regular meeting is a regular meeting for all purposes. When an order of adjournment of any meeting fails to state the hour at which the adjournment meeting shall be held, it shall be held at the hour specified for regular meetings.

2.6 Attendance
Council members must request that the Mayor issue an "excused absence" when they are unable to attend, or it will be noted in the minutes as an unexcused absence. The Mayor shall announce excused absences and reasons for such absences (if publicly known) during the roll call at the beginning of a meeting.

2.7 Minutes of Proceedings
An account of all public proceedings of the City Council shall be recorded by the City Clerk and entered into official minute books of the Council following approval by the Council. Unless the Council directs otherwise in a specific instance, detailed (but not verbatim) minutes shall be prepared for regular meetings of the full Council, and summary action minutes shall be prepared for special meetings of the full Council.

2.8 City Manager
The City Manager shall attend all meetings of the Council unless excused. The City Manager’s designee shall substitute when the City Manager is absent.

2.9 City Attorney
The City Attorney shall attend all meetings of the Council unless excused. The Deputy City Attorney shall attend in the City Attorney’s absence. The City Attorney shall act as the Council's parliamentarian.

F.1.b
Packet Pg. 12
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 4 2.10 City Clerk
The City Clerk shall attend all regular meetings of the Council unless excused, and in her/his absence, the City Clerk designee shall substitute. The City Clerk shall record, prepare and maintain the official record of the Council and perform other related duties as prescribed by the Council or the City Manager, or both.

2.11 Department Heads/Employees
Department heads and employees shall attend Council meetings as directed by the City Manager.

2.12 Public May Attend and Record Meetings
All meetings of the City Council (except closed sessions) shall be open to the public, including the news media. Meetings may be recorded by any means by anyone, provided such recording does not constitute disruptive conduct under Rule 4.4.

2.13 Virtual/Teleconference Meetings
The Council may use teleconference technology and hold virtual meetings consistent with State Law, including the Brown Act and Executive Orders issued by the Governor.

2.14 Recordings
All Regular Meetings of the City Council shall, to the extent feasible, be recorded by the City Clerk. Recordings are kept consistent with the City of Orinda Records Retention Program and are available from the City Clerk’s office.

2.15 Avoiding Brown Act Violations Relating to Meeting Attendance Members of the Council shall comply fully with the requirements of the Brown Act, including those in Government Code section 54952.2 to avoid potential violations relating to attendance at meetings such as conferences, meetings conducted by City staff/consultants, meetings presented by organizations other than the City, and meetings of other legislative bodies.

F.1.b
Packet Pg. 13
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 5 3. Agenda

3.1 Order of Business
The business for a Regular meeting shall generally be shown on the agenda in the following order, but this sequence may be modified on a case-by-case basis by the City Manager in consultation with the Mayor:

A. Call to Order/Roll Call
B. Pledge of Allegiance
C. Closed Session Report (when applicable)
D. Adoption of Agenda
E. Items for the Good of the City
F. Public Forum
G. Consent Calendar
H. Public Hearings
I. Policy Matters
J. Council Reports
K. City Manager’s Report
L. Matters Initiated
M. Adjournment
Closed Session (may be held before or after the meeting, or both)

3.2 Agenda Preparation
Agendas for regular and special meetings shall be established by the City Manager, who shall consult with the Mayor concerning the sequence of agenda items and other procedural matters. The agenda shall be delivered to the Mayor and Council members and made available to members of the public consistent with the requirements of the Brown Act. The agenda shall specify the time and location of the meeting and contain a brief general description of each item of business to be transacted or discussed at the meeting, including items to be discussed in closed session, if any. The descriptions of agenda items may include the action recommended by the preparer of the report for the agenda item.

3.3 Matters Initiated
To place an item on a future agenda, a Council member (including the Mayor) may make a motion to that effect during the Matters Initiated agenda item. In addition, a Council member (including the Mayor) may, at any time during a meeting, make a motion to place an item on a future agenda, if the item proposed for future consideration arises in relation to an item on the current agenda.

If the motion to place an item on a future agenda is seconded and approved by a majority vote of those Council members present, the proposed item will be placed on a future agenda. If the motion is silent regarding timing, the proposed item will be placed on a future agenda at the earliest appropriate time, as determined by the City Manager and F.1.b
Packet Pg. 14
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 6 Mayor. If the motion provides specific direction regarding timing, the proposed item will be placed on a future agenda consistent with that direction. No discussion of the subject of the motion may occur except to explain the general nature of the item, including the issue of timing for Council’s consideration of the item.

3.4 Agenda Posting
The City Clerk shall post the agenda at least 72 hours before a regular meeting and at least 24 hours before a special meeting in the following locations, which are freely accessible to members of the public: Orinda Community Center, Orinda Library, and Orinda City Hall. Agendas shall also be posted on the City’s website prior to meetings as required by the Brown Act. See Government Code section 54954.2.

3.5 Agenda Materials

3.5.1 Documents. A staff report shall be prepared for each agenda item except in unusual circumstances. Attached to the staff report shall be documents received by or developed by staff that are pertinent to the staff report. Anyone may submit documents pertinent to an agenda item to the City Clerk; such documents shall be included in the agenda materials if they are received in time for inclusion in the packet and if multiple copies of voluminous documents are provided.

3.5.2 Copies of agenda materials. Copies of the agenda materials and other documents distributed to Council members before a meeting (excluding documents subject to attorney-client confidentiality and documents distributed in connection with a closed session) shall be available for public inspection when released to the City Council.

The public can view materials before the meeting at the office of the City Clerk, the Orinda Library and, on the City website. At the meeting, a public copy will be available for review. Copies of materials distributed by City staff and others at the meeting shall be made available to members of the public as soon as practicable. Changes and additions to staff reports and late correspondence will be provided to Council members and made available to the public before the meeting when possible.

3.6 Consent Calendar
Items listed on the Consent Calendar are those items likely not to require Council discussion. At the meeting, any item may be pulled by a Council member or member of the public for separate discussion or clarification and vote.

3.7 Public Hearings
A matter shall be set for public hearing in the following situations:
a. A quasi-judicial land use decision (e.g., an appeal of a Planning Commission decision)
F.1.b
Packet Pg. 15
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 7 b. Any other matter for which a public hearing is required by law or for which a hearing would be in the public interest.

4. Public Participation

4.1 Addressing the Council
Each person wishing to address the Council will be asked to so indicate (e.g., by submitting a speaker slip to the City Clerk or using similar method available during virtual meetings). Each person addressing the Council shall do so from the lectern or its equivalent during virtual meetings. Providing a name, address, and other information is voluntary. Any document presented by a speaker shall be provided to the City Clerk for distribution to the Council and public. All remarks shall be directed to the Mayor and Council as a body and not to any particular Council member. No person other than members of the Council and the person having the floor shall be permitted to enter into the discussion.

4.2 Public Forum
During Public Forum any person may address the Council on an item that is (1) within the subject matter jurisdiction of the Council and (2) not otherwise on the agenda, except that if a speaker will not be present during an agenda item later in the calendar for that meeting, the speaker may address that agenda item during Public Forum but not later.

When an item is not listed on the agenda, State law prohibits Council discussion or action. Councilmembers may only “briefly respond” to statements made and questions posed. For example, State law allows Councilmembers to ask questions for clarification and provide a reference to staff or other resources for factual information. Additionally, consistent with the “Matters Initiated” rule, the Council may also direct staff to report back and/or place a matter on a future agenda for discussion.

4.3 Speech Content & Civility
Statements by a member of the public shall be related to the agenda item at hand, except during Public Forum. The City Council shall not prohibit lawful public criticism of the policies, procedures, programs, staff, and services of the City or the acts or omissions of the City Council. Members of the Council, staff, and the public are encouraged to communicate in a manner that is civil, not hostile or threatening.

4.4 Disruptive Conduct
Conduct, including applauding and booing, which substantially disrupts a City Council meeting is prohibited. If a meeting is disrupted, the Council may elect to recess per Section 5.4.7 (b). Disrupting a meeting may, in certain situations, be cause for removal from the meeting.

4.5 [Reserved]
F.1.b
Packet Pg. 16
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 8 4.6 Written Communications
Correspondence, including communications relating to a specific matter on a Council agenda, will be handled as described in Section 11.1. If correspondence is received too late to be included in the agenda packet, the City Clerk will, to the extent feasible, endeavor to distribute the late correspondence at the Council meeting. Anyone submitting voluminous late correspondence and/or submitting late correspondence to the City Clerk less than four (4) hours before a Council meeting should bring at least fifteen (15) copies to the meeting. After receiving late correspondence, the Council may elect to continue the item to a future meeting if it determines the late correspondence is too voluminous to consider fully. Alternatively, the Council may elect to consider the matter if it has had adequate time to consider all of the information presented. Such a determination may, but need not, be made by formal motion during the meeting.

4.7 Time Limits
Public comment shall generally be limited to 3 minutes per individual speaker per agenda item, except that the Mayor, with the concurrence of the City Council, may set a different time limit based upon the number of persons wishing to speak, the complexity of the item, the length of the agenda, the hour, and other factors. If a speaker continues to speak after their allotted time has expired, the Mayor may allow them a short time (e.g., 30 seconds) to wrap up their comments. When a speaker has completed their comments, Councilmembers may ask clarifying questions of the speaker and receive brief answers, notwithstanding the time limits described in this section. Speakers are not required to answer questions posed by Councilmembers.

5. Conducting Meetings

5.1 Presiding Officer
The Mayor or Vice Mayor shall preside and call the meeting to order at the hour appointed. In the absence of both, the meeting shall be called to order by the City Clerk and those Council members present shall proceed to elect a temporary Presiding Officer.

Before proceeding with the business of the Council, the City Clerk shall perform a formal roll call. The Presiding Officer may move, second, and debate from the Chair, and shall not be deprived of any rights and privileges of a Council member.

5.2 Actions Limited to Posted Agenda
The City Council may take action on any item listed on the agenda. The City Council shall not take action on any item not appearing on the posted agenda except when there is an emergency, there is a need for immediate action, or the item was posted for a prior meeting less then 5 days before and was continued, as prescribed more fully in Gov.

Code §54954.2.

5.3 Continuance of an Item
F.1.b
Packet Pg. 17
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 9 An agenda item may be continued by the City Council by a majority vote. (See section

5.4.6.c.)

5.4 Discussion
When an agenda item is addressed, the Mayor shall first ask for any staff comments or additions to the written staff report. Next, the Mayor shall ask for questions from the Council of staff. After that, the Council shall receive public comment (see section 4.7, time limits). After public comments, the Mayor shall close the public comment portion and open the item for discussion by the Council, which shall be subject to the following rules. During Council deliberations, the Mayor, with the consent of the City Council, may reopen public comment.

5.4.1. Getting the Floor. Every Council member desiring to speak shall address the Mayor and, when recognized by the Mayor, shall limit discussion to the questions under debate.

5.4.2. Interruptions. A Council member, once recognized, shall not be interrupted when speaking except to be called to order, or as otherwise provided. If a Council member, while speaking, is called to order, the Council member shall cease speaking until the question of order is determined; if determined to be in order, the Council member shall be permitted to proceed.

5.4.3. Privilege of Closing Debate. The Council member making a motion for adoption of an ordinance or resolution shall have the privilege of closing the debate on that motion, subject to other motions which may be before the Council.

5.4.4. Motion to Be Stated. The Mayor shall state all motions submitted for a vote and announce the result. A roll call vote shall be taken upon the request of any Council member. No action shall be taken by secret ballot.

5.4.5. Appeals. Any ruling of the Mayor may be appealed at the request of a Council member. The Mayor shall call for a roll call vote to determine if the ruling is upheld.

5.4.6. Precedence of Motions. When a motion is before the Council, no other motion shall be entertained except:
a. Motion to Amend. A motion to amend, which modifies the original motion, is in order but is debatable only as it relates to the amendment.

Amendments are voted on first; the main motion vote is last. A motion may be amended more than once with each amendment being voted on separately. There shall only be one amending motion on the floor at any one time.
b. Substitute Motions. A substitute motion is in order for the purpose of taking out the main motion altogether and replacing it with a new and F.1.b
Packet Pg. 18
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 10 different motion. A substitute motion must be voted on before an amendment of the main motion, since if the substitute motion is adopted the main motion dies and so does any amendment of the main motion.
c. Motion to Postpone. A motion to postpone to a definite time is subject to debate and amendment as it relates to propriety of the postponement and time set. A motion to postpone a quasi-judicial hearing must set a definite date for the hearing. If a motion to postpone indefinitely is adopted, the agenda item shall be carried forward on the City Clerk’s Future Agenda Items list for up to one year, then dropped if not reinstated to the agenda.
d. Motion to Table. A motion to table is not debatable and not subject to amendment. The purpose of a motion to table is to suspend the item for an indefinite time.

5.4.7. Motions Not Subject to Debate. All motions are debatable except for the following, which shall be put to an immediate vote:
a. Motion to adjourn, which requires a simple majority. b. Motion to recess, which requires a simple majority.
c. Motion to table, which requires a simple majority.
d. Motion to limit debate (“I move the question” or “I move to limit debate of this item to __ minutes”), which requires a 2/3 vote.

5.4.8. Reconsideration. A request for reconsideration may be made during a meeting in which a decision has been made or at the next regularly-scheduled Council meeting. A request for reconsideration may be made only by a Council member who voted in the majority on the original decision. Reconsideration of a matter involves three decisions, which must occur in the following order:
a. First, the Council must decide whether or not to consider the request on a future agenda. (No discussion is permitted at this point on the validity of the request or the merits of the underlying action to be reconsidered.) b. Second, if a majority of the Council votes to place the issue on a future agenda, there are two agenda items:
i. Whether to allow reconsideration or not and
ii. If reconsideration is permitted, whether the original decision should be changed or affirmed.

F.1.b
Packet Pg. 19
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 11 c. A decision not to reconsider a matter under (b)(i) will be deemed to automatically include removal of the agenda item for reconsideration of the merits under (b)(ii).
d. Unless a subject is reconsidered and a majority of the City Council votes to change the original decision, the original action stands and is final.

However, the subject of the original decision (other than a quasi-judicial hearing such as a land use appeal) may be placed on a future agenda at any time as provided in these rules.
e. Reconsideration of a decision on a land use appeal is governed by Orinda Municipal Code section 17.43.8.

5.4.9. Conflict of Interest and Bias. A conflict of interest or even the appearance of a conflict of interest can diminish the public’s confidence in the integrity of the governmental process. Therefore, a Council member who has a conflict of interest under the Political Reform Act or Government Code §1090 may not participate in the agenda item causing the conflict. The Council member must make a statement substantially as follows:
“I am unable to participate in this matter as a public official because I have a financial interest in the subject which creates a conflict of interest. The financial interest is [describe the conflict with particularity].” The public official must leave the room for the duration of the discussion of the item. If the discussion relates to the public official’s real property or business (owned or controlled solely by the public official/and spouse/domestic partner), the public official may speak as a member of the general public and remain in the audience.

In addition, if a Council member’s personal bias compromises the Council member’s ability to act impartially with the interests of the City as a whole in mind, the Council member must leave the room and not participate in the agenda item. Bias may exist because of a Council member’s (1) substantial involvement or familiarity with the subject of an agenda matter or (2) close association with the persons involved, a connection which may or may not be known by the public or the other members of the Council.

Even if the Council member believes s/he is not biased, in the interests of open government, it is advisable at the very least to disclose that association, involvement, or experience prior to participating in the agenda item. See Rule 6.5.

5.4.10. Protests. A Council member shall have the right to enter into public record reasons for dissent or protests against any motion carried by the majority.

5.4.11. Limits on speech and conduct. See sections 4.3 and 4.4, which apply also to the speech and conduct of City Council members.

5.4.12. Rules of Order. Except as otherwise provided in these Rules, the current edition of “Roberts Rules of Order” shall govern the conduct of the meetings of the City Council.

F.1.b
Packet Pg. 20
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 12 6. Quasi-Judicial Hearings
When a public hearing is required for an agenda item, the Mayor shall first ask for any staff comments or additions to the written staff report for the hearing. Next, the Mayor shall ask for questions from the Council of staff. Next, Council members shall disclose ex parte communications as described below. After that, the Council shall receive public comment, as outlined below.

6.1 Ex Parte Communications
A Council member shall disclose on the record all communication (e.g., email, other written correspondence, conversations, and site visits) occurring outside the hearing that relate to the subject of the hearing. The Council member shall identify with whom s/he communicated, what was communicated, and for site visits, where on the site the Council member went and what the Council member looked at and observed. Council members may also elect to forward copies of written ex parte communication to the City Clerk, who will include such correspondence in the staff reports for relevant agenda items and/or forward it to the whole City Council, if doing so would not violate the Brown Act.

6.2 Testimony

6.2.1. The purpose of this portion of the public hearing is to provide an opportunity for persons interested in the subject of the hearing to testify in support of or opposition to the matter being heard.

6.2.2. Each person wishing to testify may do so as described in section

4.1. 6.2.3. The order of testimony shall be as follows:
a. The applicant (and the applicant’s design professional, attorney, and other representatives, if any) shall speak first and together shall have a total of 15 minutes to present the project. A portion of this time may be reserved by the applicant for final remarks after public testimony has concluded. b. The appellant, if not the applicant, (and the appellant’s design professional, attorney, and other representatives, if any) shall also have a total of 15 minutes to present the basis for the appeal.
c. Those persons other than the applicant and the appellant (and their representatives) shall have a total of 3 minutes each to present testimony, except that to preserve order and eliminate repetitious testimony from a large group, the Mayor may ask a like-minded group to appoint a spokesperson to represent the point of view of the group. At the Mayor’s discretion, speakers favoring the project may be asked F.1.b
Packet Pg. 21
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 13 to so indicate and may be asked to present their testimony consecutively and likewise those opposed.
d. Regardless of the time limits stated above, the time limit per individual speaker may be set by the Mayor, with the concurrence of the City Council, at the beginning of a public hearing, based upon the number of persons wishing to speak, the complexity of the item, the length of the agenda, the hour, and other factors.

6.2.4. Questions by speakers may be noted and addressed prior to Council deliberation.

6.3 Council Deliberation

6.3.l. After the Mayor has determined that no other member of the audience wishes to speak, the Mayor shall close the public testimony portion of the hearing and the matter shall be taken up by the City Council.

6.3.2. The Council may ask questions of speakers for clarification during the public testimony portion and during deliberations.

6.4 Council Action

6.4.1. Council may, at this time, continue a matter to a specific future date to obtain additional information. Continuing a public hearing to a specific date does not require additional notice.

6.4.2. The Council may vote on the item, making findings of fact as required by law

6.5 Due Process
A quasi-judicial hearing that involves property rights (a land use matter or a personnel matter) must incorporate the standards of constitutional due process. This type of hearing must be fair and open, subject to employee privacy rights. The elements of due process are adequate notice, an opportunity to be heard, an impartial decision-maker, a decision based on substantial evidence, and findings to document the basis of the decision.

6.5.1. Impartiality
a. Rule. A public official must perform the duties of office free from any personal or pecuniary interest. If there is an actual bias or financial interest that could interfere with a Council member’s judgment, the Council member should not participate in the agenda item and should leave the Council chambers for the duration of the agenda item.
b. Open Mind. A Council member must have an open mind
and receive all evidence presented at the hearing. In addition, a Council member shall F.1.b
Packet Pg. 22
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 14 disclose ex parte communications (see §6.1 above) before making a determination on the merits. If the Council member has a fixed position on a matter prior to the hearing or if the Council member will be influenced by information not in the evidence, the Council member shall not participate in the hearing.
c. Staying Neutral. In order to assure that a Council member has not become so embroiled or otherwise involved in a matter that s/he cannot be impartial, the following rules shall apply:
i. Staff Contacts. A Council member shall refrain
from contact outside the public meeting context with City staff concerning the merits of matters which will or may come to the City Council for a quasi-judicial hearing.

Regardless of the above, a Council member may obtain factual information from staff relating to the hearing.
ii. Commissions and Committees. A Council member
must not express opinions on the merits of an item that is or will be the subject of a quasijudicial hearing within the subject matter jurisdiction of the Planning Commission to a Planning Commissioner prior to or during the hearing. In case such communications have occurred, any such communication from a Council member to a Planning Commissioner prior to a decision of the Commission on the matter shall be disclosed by the Commissioner in the course of the hearing of the subject by the Planning Commission.
iii. Interested Parties. A Council member shall refrain from becoming involved in discussions, negotiations, and other activities relating to a matter that is likely to be subject to a hearing by the City Council, unless the full scope of the Council member’s involvement and conversations is disclosed during the Council’s consideration of the matter and there is no bias that has resulted from those activities. d. Involvement or Bias. A Council member may be involved in a matter before the City Council due to a number of factors, including but not limited to an ongoing personal acquaintance, the proximity of real property, a business relationship, or community activities. In such a situation, where the Council member is unable to make an impartial decision, the Council member should recuse himself or herself, make a brief explanation of the facts behind recusal, and leave the room.

6.5.2 Absence During a Quasi-Judicial Hearing. A Council member otherwise qualified to vote may not vote on a matter if the Council member was absent from all or part of the hearing, unless the Council member both (1) reviews the minutes and the staff report or listens to the audiotape of the entire portion of the hearing s/he missed, if the minutes are not available, and (2) reviews all physical and written evidence introduced at the hearing before the meeting at which the decision is to be rendered.

7. Voting

7.1. Majority Vote Required
F.1.b
Packet Pg. 23
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 15 An affirmative vote of at least three Council members of the Council is required by law to adopt an ordinance, a resolution, and an order for the payment of money. An urgency (emergency) ordinance must be adopted by at least a 4/5 vote. Other matters may be adopted by the majority present.

7.2 Roll Call Votes
When required by state law, a roll call vote shall be taken on each motion before the Council. Additionally, on demand by any Council member, made before the "Noes" are called for, a roll call vote shall be taken on a motion before the Council. The Mayor's name shall be called last with other Council members' names called at random by the City Clerk. Council members shall not give explanations for their vote during roll call.

7.3 Silence
During a collective vote (ayes and noes), silence of any Council member denotes an affirmative vote.

7.4 Tie Vote
A tie vote means that a motion fails. In the context of a public hearing on a land use matter, a tie vote means denial of the project.

7.5 Abstention
Abstaining from a vote (other than due to recusal) constitutes a vote with the majority, except that where there is a tie vote, an abstention constitutes a vote for the motion.

8. Officers

8.1 Mayor
The Council shall elect a Mayor at the first regular meeting of December of each year, or as soon thereafter as possible following the confirmation of the canvass of ballots by the County Clerk; or at the first regular meeting after the office of Mayor becomes vacant for any reason. The term of office of the Mayor is one year. An election to fill a vacancy occurring in mid-term shall be for the remaining portion of the one-year term. The election or removal of Mayor requires three affirmative votes.

The Mayor shall be recognized as the official head of the City for all ceremonial purposes. The Mayor shall sign all Ordinances and Resolutions adopted by the Council when the Mayor is presiding.

8.2 Vice Mayor
The Council shall elect a Vice Mayor at the first regular meeting of December of each year, or as soon thereafter as possible following the confirmation of the canvass of ballots F.1.b
Packet Pg. 24
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 16 by the County Clerk; or at the first regular meeting after the office of Vice Mayor becomes vacant for any reason. The term of office of the Vice Mayor is one year. An election to fill a vacancy occurring in mid-term shall be for the remaining portion of the one-year term. The election or removal of Vice Mayor requires three affirmative votes.

The Vice Mayor shall serve all functions of the Mayor when the Mayor is unable or unavailable to fulfill those functions.

9. Boards, Commissions, and Committees

9.1 Council Appointments
As soon as practicable following the annual December reorganization meeting, the Mayor shall announce nominations of Council members to serve in various roles requiring a Council representative; the nominations are subject to the review and approval of the City Council.

9.2 City Advisory Bodies, Regional Boards, and Commissions The City Council may create commissions, committees, and other groups to advise the Council. The Council shall appoint the members of those subordinate bodies as well as City representatives to Regional Boards and Commissions.

10. Ordinances

10.1 Document Preparation and Approval
All ordinances must be drafted by or approved by the City Attorney before being placed on the agenda.

10.2 Ordinance Introduction/Adoption
The title of a proposed ordinance will be considered to be read, unless a Council member requests a full reading. Ordinances shall not be adopted within five days of their introduction, or at other than regular Council meetings. However, an urgency ordinance may be passed immediately upon introduction, at either a regular or a special meeting, if a resolution substantiating the urgency has been adopted first.

10.3 Ordinance Preservation
Following adoption of an ordinance, the City Clerk shall assign a number to the ordinance, publish a summary and post the full text according to law. The ordinance shall be filed and preserved in the City Clerk's office.

11. Administrative Matters

11.1 Correspondence
F.1.b
Packet Pg. 25
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 17 11.1.1 Electronic Correspondence
Council members shall use accounts issued to them by the City for all electronic correspondence (e.g., email) regarding City business. Council members shall not use accounts issued to them by the City for personal correspondence.

Emails sent to the whole City Council via a general City email address will be reviewed by the City Manager or his/her designee and forwarded to all Council members, if doing so would not violate the Brown Act.

11.1.2 Other Correspondence
Written correspondence received by a Council member at City Hall by postal service, personal delivery, and messenger service shall be opened by staff and handled consistent with the City of Orinda Records Retention Program, which may require the City to retain a copy. Council members may elect to forward copies of written correspondence they receive to the City Clerk, who will include such correspondence in the staff reports for relevant agenda items and/or forward it to the whole City Council, if doing so would not violate the Brown Act.

11.1.3 Website Privacy Notice
The City’s website privacy notice should explain that the public is encouraged to communicate with Council members by email and other means, but that the public should be aware that email and other written correspondence, including messages intended to be confidential, may be subject to disclosure under the California Public Records Act.

Additionally, the privacy notice should explain that such correspondence may be forwarded to other Council members, City staff and/or the public generally.

11.1.4 Compliance with State Law
The City retains electronic and other correspondence in accordance with State law and the City’s adopted Records Retention Program, which is available from the City Clerk.

For public records, the City complies with the State Public Records Act.

11.2 Confidentiality
F.1.b
Packet Pg. 26
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 18 Matters discussed in closed session and matters contained in City Attorney confidential memoranda are confidential and shall not be disclosed to anyone without prior authorization from the City Council acting together (closed session information) or from the City Attorney (confidential communications from the City Attorney).

11.3 Communications with the Public
Council members shall be clear in communications with the public when the opinions and positions they convey are their own individual positions and when they have been authorized by the Council to speak for the Council as a whole.

11.4 Relations with Staff
As required by OMC §2.08.080, Council members of the City Council shall deal with employees of the City through the City Manager, except to obtain information as necessary, in a limited manner.

12. Emergency Procedures

12.1 Emergency Special Meetings
Emergency special meetings may be called by the Mayor, a majority of the Council members, or the City Manager only in accordance with state law (see Government Code section 54956.5), which defines qualifying emergencies narrowly (e.g., work stoppage, crippling activity, or other activity that severely impairs public health and/or safety, crippling disaster, mass destruction, terrorist act, threatened terrorist activity).

12.2 Emergency Special Closed Session
During an emergency meeting, the City Council may meet in closed session pursuant to Government Code section 54957 (threat to public security) if agreed to by a two-thirds vote of the members of the City Council present, or, if less than two-thirds of the members are present, by a unanimous vote of the members present.

12.3 Emergency and Urgent Amendments to Regular Agendas Items may be added to a regular meeting agenda on an emergency or urgency basis only in accordance with state law (see Government Code section 54954.2(b)). a. The Council may add an emergency item to its agenda at a regular meeting if, by majority vote, it determines that the matter in question constitutes an emergency situation pursuant to Government Code section 54956.5 (e.g., work stoppage, crippling activity, or other activity that severely impairs public health and/or safety, crippling disaster, mass destruction, terrorist act, threatened terrorist activity).

F.1.b
Packet Pg. 27
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 19 b. The Council may add an urgent item to its agenda at a regular meeting if it makes findings that: (1) there is a need to take immediate action, and (2) the need for action came to the attention of the City subsequent to the agenda being posted.

Those findings must be approved by two-thirds of the members of the City Council present, or, if less than two-thirds of the members are present, a unanimous vote of those members present.

12.4 Emergency Declarations and Findings
In the event of an emergency, the Council may declare a local state of emergency and/or confirm an emergency declaration made by the City Manager. The Council may also make findings as appropriate to determine that normally-applicable procedures do not apply. Examples include the California Environmental Quality Act (see CEQA Guidelines sections 15269 & 15359) and the Public Contact Code (see Govt. Code sections 1102 & 22050). The Council may also, consistent with state and federal law, impose local curfews and other restrictions to safeguard life and property during an emergency.

12.5 Councilmembers Unavailable During Emergency
a. The City Council has designated the individuals serving in the following capacities to also serve as stand-by Councilmembers according to the ranked order in which they appear:

1. Planning Commission, Chair

2. Supplemental Sales Tax Oversight Commission, Chair

3. Finance Advisory Committee, Chair

4. Parks & Recreation Commission, Chair

5. Transportation Safety Advisory Committee, Chair

6. Planning Commission, Vice Chair

7. Supplemental Sales Tax Oversight Commission, Vice Chair

8. Finance Advisory Committee, Vice Chair

9. Parks & Recreation Commission, Vice Chair

10. Transportation Safety Advisory Committee, Vice Chair Stand-by Councilmembers shall have the duties prescribed by State law. See Government Code section 8641.
b. If an insufficient number of the members of the Council are available to conduct necessary business at an emergency meeting, one or more stand-by Council members shall, following the ranked order above, be authorized to serve as Council members, for purposes of that emergency meeting only. The number of stand-by Councilmembers authorized to serve shall be the minimum number needed to conduct business at that emergency meeting of the City Council.

13. Suspension and Amendment of These Rules
F.1.b
Packet Pg. 28
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures 20 13.1 Suspension
Any provision of these rules not required by state law or the Orinda Municipal Code may be temporarily suspended by the Council.

13.2 Amendment
These rules may be amended by resolution of the Council.

13.3 Rules Available for Public Review
A copy of these rules shall be available on the City’s website and at all meetings of the Council for review by the public.
************************************************************************ 1733730.1
F.1.b
Packet Pg. 29
Attachment: City Council Policies Procedures Manual (March 12, 2024 proposed updates) (3316 : Adoption of Updated Policy & Procedures City Council
Staff Report
Agenda Item: F.2
Date: March 12, 2024
Department: City Clerk
AGENDA TITLE: Appointment to the Traffic Safety Advisory Committee RECOMMENDATION:

Consider appointment of Molly Doctors Rajashekhar to the vacant position on the Traffic Safety Advisory Committee, or set interview date.

BACKGROUND:

On February 24, 2024, the City Council conducted its annual interviews to fill upcoming term expirations and vacancies on the City’s various Commissions and Committees.

DISCUSSION:

After the interviews and various appointments were made, a vacancy remained on the Traffic Safety Advisory Committee due to the lack of applicants.

On Monday, February 26, 2024, a Statement of Interest was received from Molly Doctors Rajashekhar stating her interest in serving on the Traffic Safety Advisory Committee.

Her Statement of Interest is attached to this staff report for consideration. The Council may choose to appoint her by application only or set a date for an interview with either the full Council, the Mayor, or a Council Subcommittee.

ATTACHMENTS:

A. Statement of Interest from Molly Doctors Rajashekhar Respectfully Submitted by:

Sheri Smith
City Clerk
Prepared By: Sheri Smith, City Clerk
Approved by:

F.2
Packet Pg. 30
F.2
Packet Pg. 31
F.2.a
Packet Pg. 32
Attachment: Statement of Interest from Molly Doctors Rajashekhar (3315 : Consider appointment to Traffic Safety Advisory Committee TSAC) F.2.a
Packet Pg. 33
Attachment: Statement of Interest from Molly Doctors Rajashekhar (3315 : Consider appointment to Traffic Safety Advisory Committee TSAC) F.2.a
Packet Pg. 34
Attachment: Statement of Interest from Molly Doctors Rajashekhar (3315 : Consider appointment to Traffic Safety Advisory Committee TSAC) City Council
Staff Report
Agenda Item: F.3
Date: March 12, 2024
Department:

Public Works and
Engineering Services
AGENDA TITLE: Establishing the Rate per Equivalent Runoff Unit (ERU) for Fiscal Year 2024-25 and requesting the Contra Costa County Flood Control and Water Conservation District to Adopt an Annual Parcel Assessment for Drainage Maintenance and the National Pollutant Discharge Elimination System (NPDES) Program RECOMMENDATION:

BACKGROUND:

In the spring of each year, the Council sets the upcoming fiscal year's stormwater utility assessment (SUA) fee. This fee is a parcel based assessment that is calculated using an Equivalent Runoff Units (ERU) rate that is set each year by City Council.

The fees provide funding for activities that are necessary for the City to comply with the National Pollution Discharge Elimination System (NPDES) stormwater program. The NPDES Program is regulated under a State regional municipal NPDES permit issued by the State to the Contra Costa County Clean Water Program (CCCWP), of which the City of Orinda is a member. The SUA fees fund some of the City’s costs in complying with the NPDES permit, and also fund Orinda's share of the CCCWP required activities. This report addresses how the ERU rate is set and how the fees are used for the City's NPDES activities and the City’s share of the CCCWP costs.

The collection of these fees is subject to provisions in the State Constitution related to property related fees and assessments (Proposition 218). The fees cannot be increased above the maximum rate established in 1993 without a property owner ballot measure.

The amount of the recommended fee proposed for Fiscal Year 2024-25 is the same amount as has been levied since 2002-03.

DISCUSSION:

NPDES Program Description
The NPDES is a federally mandated program, the objectives of which are to eliminate the discharge of all types of pollutants into the nation's waterways. This objective is accomplished by requiring dischargers, such as industrial facilities, construction contractors, water treatment plants, cities, and counties, to obtain permits specifying ways in which they will eliminate the discharge of pollutants into waterways. For municipalities, the type of pollution that must be eliminated or reduced to the maximum extent practicable is called "non-point" pollution, consisting of all types of substances F.3
Packet Pg. 35
generated as a result of urbanization (e.g. pesticides, fertilizers, PCB’s, Mercury, automobile fluids, sewage, litter, etc.).

In order to achieve compliance with the NPDES permit, the City of Orinda has been participating in the CCCWP with Contra Costa County, other Contra Costa cities, and the Contra Costa Flood Control and Water Conservation District since 1993. Orinda and the other member’s participation and funding the CCCWP are authorized under an agreement executed by all member agencies.

The State’s San Francisco Bay Regional Water Quality Control Board (RWQCB) is the regulatory agency that issues NPDES permits. The current municipal permit is a Municipal Regional Permit (MRP) covering 76 municipalities in the San Francisco Bay Area. The current permit is the second MRP permit “MRP 3.0” (Order R2-2022-0018, NPDES Permit No. CAS612008) which went into effect on July 1, 2022 and has a fiveyear term, set to expire on June 30, 2027.

CCCWP Program Budget
The CCCWP is managed by staff under direction of the Management Committee, which consists of representatives of the member cities and the county. CCCWP staff administers the various “Group” activities that are required under the NPDES permit, including technical studies, monitoring, compiling the annual report, conducting committee meetings and managing the various consultants required to perform technical work. The activities are carried out under the following permit provisions:
• municipal operations (provision c.2)
• new development /redevelopment (provision c.3)
• industrial /commercial controls, including business inspections (provision c.4) • illicit discharge control (provision c.5)
• construction site controls (provision c.6)
• public information and participation (provision c.7)
• water quality monitoring (provision c.8)
• pesticide toxicity control (provision c.9)
• trash load reduction (provision c.10)
• Mercury controls (provision c.11)
• PCB controls (provision c.12)
The current MRP requirements such as water quality monitoring, trash reduction, Mercury and PCB control, and green infrastructure plans, have resulted in increases in CCCWP costs. Reserve funds at the CCCWP have been used to keep CCCWP costs at a reasonable level but are being depleted. In 2012, the CCCWP sought additional funding to supplement the SUA fees by conducting a Proposition 218 election for a “Clean Water Initiative” fee, which did not pass.

The new MRP has significant additional requirements and unfunded mandates, which will cost cities more to comply with, which translates to a higher budget for the upcoming fiscal year. At the February 2024 CCCWP Management Committee meeting, a draft FY 2024-25 CCCWP budget was presented in the amount of approximately $5.4 million. (The final budget will be voted on at the March 20, 2024 F.3
Packet Pg. 36
Management Committee meeting.) This amount would be funded by the SUA’s from the member cities and county, and by drawing down some reserve funds held by the CCCWP.

Current Program Costs to be Funded from the Fee
Participation in the CCCWP by the City of Orinda, and other local agencies in Contra Costa County, is funded by a stormwater utility assessment fee (SUA). Contra Costa County Flood Control and Water Conservation District administers and collects the SUA fees on behalf of the City. This parcel-based fee is levied on properties within the City and collected with property tax bills. In addition to CCCWP programs and projects, the SUA also provides funding directly to the City for local stormwater program activities.

For the current fiscal year (FY 2023-24), the County estimates SUA fees to be collected from Orinda properties to be $389,900 (this is gross revenue, after both corrections and adjustments). From this amount, deductions are made by the County for approximately $84,000 for the following programs:
• Funding the CCCWP: Orinda’s pro-rata share, based on the population, is 1.68% of the CCCWP budget of approximately $4.0 million, and amounts to approximately $67,000.
• Payments to Central Contra Costa Sanitary District to perform required business facility clean water inspections. The City of Orinda (and most of the other cities in the CCCWP) contract with the District for these services, which are estimated to cost approximately $9,200 for the current year.
• Collecting/County Auditor fees: Approximately $6,200
• SUA administration shared costs, based on parcel count share for Orinda,

2.37%, approximately $1,400
The remaining, net amount of approximately $306,000 (for FY 2023-24) would be remitted to the City to fund budgeted local program costs. The City records the receipt and use of these funds in the Stormwater Fund #514. The primary use of these funds is for a portion of staff labor costs (public works engineering and maintenance) related to the City’s drainage programs. This staff work generally consists of administering the NPDES program work, participating in meetings and CCCWP activities, preparing the annual report, responding to regulatory and other inquiries (State Water Board, County Grand Jury, etc.), drainage plan review, managing storm drain pipes and related assets and their repair plans, implementing Best Management Practices (e.g. street sweeping, cleaning catch basins) and ongoing field maintenance work related to drainage.

For the upcoming subject fiscal year (2024-25), the City’s share of the CCCWP budget is indirectly going up: the pro-rated share at 1.68% of the draft CCCWP budget of $5.4 million amounts to approximately $90,000; however, as noted above, in order to fund the additional expected costs of MRP 3.0, CCCWP reserves will be used and therefore the net share contributed by Orinda will be similar to last year at $67,000.

While the SUA funds can be used to fund other stormwater and drainage expenses, the City has generally limited its use for staff labor costs as noted above. This allows a positive Stormwater Fund balance, which varies during the year depending on when the F.3
Packet Pg. 37
3 disbursements of the SUA revenue are received from the County during the year.

Staff estimates that in recent years $500,000 to $750,000 (per year) have been spent on stormwater maintenance, repairs, administration and related NPDES activities, such as implementing GIS for storm drain assets and preparing a Green Infrastructure Plan.

Beginning with the current two-year Budget, the expenditures for stormwater activities were aligned with the funding available. With future Budgets and Capital projects, Staff will evaluate the opportunity to utilize fund balance to address needed activities. Since the amount of the assessment revenue is fixed and will not change without voter approval, the focus will be on one-time expenditures. The expenditures to date exclude capital improvement projects that include storm drainpipe rehabilitation or replacements.

Other funding sources expended by the City for stormwater activities include Drainage Impact Fees (Fund 210) and General Fund (100).

An example of costs related to NPDES permit requirements that are paid by fund sources other than Stormwater Fund #514 are Green Infrastructure (GI) facilities costs.

The City approved the required GI Plan in 2019, which laid out plans for such facilities over the next 20 years which treat public road stormwater runoff using bioswales or other “green” treatment methods. The City completed the first project listed in the GI Plan in December 2020, the Lavenida Dr. bioswale. This project was performed under the 2020 Paving Project and included design ($6,500) and construction ($45,000).

Annual operations and maintenance for this one facility are estimated at $2,000. These costs were borne by the project funding (Gas Tax and other road funds). More such facilities are required in the future, and the costs will likely increase.

Annual Setting of Fee
The City Council action requested as part of this report is to levy the assessment for the upcoming fiscal year at the ERU rate specified in the subject proposed Resolution.

The maximum annual SUA fee for the City of Orinda was reached in FY 2002-03, as approved by Resolution No. 19-02 on April 2, 2002, at a rate of $35.00 per equivalent runoff unit (ERU). One ERU is equal to a single-family residence with a lot size of under 20,000 square feet; the per-parcel fee for larger lot sizes is calculated in multiples of the ERU. An attorney for Contra Costa County has made the determination that the levy of the SUA is exempt from voting requirements of Proposition 218 as long as the ERU rate remains at or below the maximum of $35.00 established by each City in 1993.

The following is the history of the amount levied for this fee since 1993 including the proposal for next year:

Time Period Amount Levied / ERU
July 1, 1993 – June 30, 1998
Fiscal Years 1993-94 to 1997-98
$23.00
July 1, 1998 – June 30, 1999
Fiscal Year 1998-99
$25.00
July 1, 1999 – June 30, 2002
Fiscal Years 1999-00 to 2001-02
$30.00
F.3
Packet Pg. 38
July 1, 2002 – June 30, 2023
Fiscal Years 2002-03 – 2022-23
$35.00
PROPOSED FY 2023-024
July 1, 2023 – June 30, 2024
$35.00
The costs to comply with the NPDES permits have increased since 2002 (when the SUA was last raised). Drainage Impact Fees and General Fund have been utilized to cover any shortfalls. Furthermore, NPDES permit requirements have increased over time and the compliance costs have likewise increased. These requirements are essentially unfunded mandates that impact the City finances.

The County Stormwater Program is currently reviewing the need to possible pursue additional funding through a revision and renewal of the existing SUA fees, or alternative mechanisms, in order to meet longer term funding needs imposed by the new NPDES permit. There are a series of upcoming presentations and workshops on this need which will be undertaken over the next few months, including those which will involve elected officials and other stakeholders.

NEXT STEPS:

Three certified copies of the subject Resolution will be submitted to the Contra Costa County Flood Control and Water Conservation District, who administers the SUA. They have requested the copies be submitted no later than April 1, 2024.

FISCAL IMPACT:

The adoption of the subject Resolution will result in charges to Orinda property owners in the aggregate amount of approximately $389,000 to pay for the costs as described above. The City’s share of the CCCWP budget, assessor fees, administrative fees, and inspection fees, as described above, amount to an estimated $84,000 for upcoming fiscal year, which is paid for by these funds. The net distributions after these charges, would be deposited to Stormwater Fund #514.

ATTACHMENTS:

A. Resolution 03-24 NPDES SUA Reso FY 24-25
Respectfully Submitted by:

Scott Christie
Public Works Director
Prepared By: Kevin McCourt, Assistant Engineer
Approved by:

F.3
Packet Pg. 39
F.3
Packet Pg. 40

BEFORE THE CITY COUNCIL OF THE CITY OF ORINDA
In the Matter of:

Establishing the Rate per
Equivalent Runoff Unit (ERU) for
Fiscal Year 2024/2025 and
requesting the Contra Costa
County Flood Control and Water
Conservation District to Adopt an
Annual Parcel Assessment for
Drainage Maintenance and the
National Pollutant Discharge
Elimination System (NPDES)
Program
)
) Resolution No. 03-24
)
)
)
)
)
)
)
)
WHEREAS, under the Federal Water Pollution Control Act, prescribed discharges of Stormwater require a permit from the appropriate California regional water quality control board, under the National Pollutant Discharge Elimination System (NPDES) program; and
WHEREAS, the City of Orinda, as a member of the Contra Costa County Clean Water Program, did apply for, and did receive, a NPDES permit which requires implementing and operating various programs and activities, including selected Best Management Practices (BMPs) to minimize or eliminate pollutants from entering storm waters; and
WHEREAS, it is the intent of the City of Orinda to utilize funds received from its Stormwater Utility Area (SUA) for implementation of the NPDES program and drainage maintenance activities; and
WHEREAS, at the request of the City of Orinda, the Contra Costa County Flood Control and Water Conservation District ("District") has completed the process as required in order to form an SUA, including the adoption of the Stormwater Utility Assessment Drainage Ordinance No. 93-47; and WHEREAS, the SUA and Program Group Costs Payment Agreement between the City of Orinda and the District requires that the City of Orinda annually, by May 1, determine the rate to be assessed to a single Equivalent Runoff Unit (ERU) for the forthcoming fiscal year.

F.3.a
Packet Pg. 41
Attachment: Resolution 03-24 NPDES SUA Reso FY 24-25 (3304 : Stormwater Utility Assessment Fee FY 24-25) NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Orinda does hereby determine that the rate to be assigned to a single ERU for FY 2024-2025 shall be set at $35.00.

BE IT FURTHER RESOLVED that the City of Orinda does hereby request the District to adopt SUA levies based on said amount.

ADOPTED by the City Council of the City of Orinda at a regular meeting of said Council held on March 12, 2024, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Darlene Gee, Mayor
ATTEST:

Sheri Marie Smith, City Clerk
F.3.a
Packet Pg. 42
Attachment: Resolution 03-24 NPDES SUA Reso FY 24-25 (3304 : Stormwater Utility Assessment Fee FY 24-25) City Council
Staff Report
Agenda Item: F.4
Date: March 12, 2024
Department:

Public Works and
Engineering Services
AGENDA TITLE: Accept contract with McGuire-Pacific Construction for the Red Flag Parking Sign Project #4197
RECOMMENDATION:

BACKGROUND:

The Red Flag Parking Project #4197 consisted of the installation of informational flip signs notifying residents that the parking restrictions are in effect and “No Parking” during Red Flag Days signage.

On July 19, 2022, City Council adopted Resolution 36-22 Traffic Order No. 216 expanding the existing Red Flag Parking Restrictions from El Toyonal to the following locations:
• Monte Vista Road from Camino Pablo to Monte Vista Ridge Road • Claremont Ave from Camino Pablo to the second western Holly Lane intersection
• Manzanita Drive from Camino Pablo to Bobolink Road
• The entire length Vista Del Mar
• The eastern portion of Camino Don Miguel from Miner Road to Vista del Mar
• The western leg of Sleepy Hollow Lane from Lombardy Lane to the Normandy Lane and Washington Lane intersection
• Lombardy Lane from Miner Road to Tarry Lane
• Dalewood Drive from Lombardy Lane to Sundown Terrace
• Honey Hill Road from Miner Road to Charles Hill Road
• Charles Hill Road from Honey Hill Road to El Nido Ranch Road • Sundown Terrace from Happy Valley Toad to Silver Oak Terrace On December 5, 2023, City Council approve Resolution 65-23 and Traffic Order No. 225 to add Miner Rd., from Camino Pablo to Ranch Rd. which was inadvertently left off the Traffic Order No. 216.

F.4
Packet Pg. 43
The Red Flag Parking Project #4197 (Project) was advertised for bids in May 2023. Bids for the construction contract were received and opened on Tuesday June 6, 2023.

There were three contractors that provided bids for the sign installation project.

On June 20, 2023, the City Council awarded a construction contract to McGuire-Pacific Constructors, for an amount of $197,596 using Fund #106 Add-On Sales Tax Measure R.

DISCUSSION:

The project was substantially complete on November 11, 2023. No liquidated damages were assessed to the Contractor upon substantial completion of the project. The total contract cost was $164,146 which was under the original contract amount of $197,596.

Both the quantity of installed signs and the anticipated extra work was below the quantity specified in the original plans. There were no change orders.

Project acceptance by the City Council is necessary for the City Clerk to sign and file the Certificate of Completion with the Contra Costa County Clerk-Recorder, which will allow the release of project retention to McGuire-Pacific Constructors.

As a separate matter, the City Council has asked staff to review the Red Flag designation criteria for possible modifications, and that is a matter that will be returning to the Council. It is separate and distinct from the acceptance of the contract as complete.

NEXT STEPS:

Upon City Council approval, the City Engineer will sign the Certificate of Completion and the City Clerk will record it with the Contra Costa County Clerk-Recorder’s Office. The contract retention ($8,207.30) will be paid to McGuire-Pacific Constructors thirty-five (35) days after recordation of the Certificate of Completion, provided that no stop notices exist.

FISCAL IMPACT:

The construction work associated with this project was funded from Fund #106 Add-On Sales Tax Measure R. All project expenditures are within the current authorized budget.

Any remaining unused construction funds will be available for future appropriation by the City Council.

ATTACHMENTS:

A. Resolution 09-24 Acceptance of The Red Flag Parking Sign Project 4197 B. NOC - The Red Flag Parking Sign Project
Respectfully Submitted by:

Scott Christie
Public Works Director
F.4
Packet Pg. 44
Prepared By: Kevin McCourt, Assistant Engineer
Approved by:

F.4
Packet Pg. 45

BEFORE THE CITY COUNCIL OF THE CITY OF ORINDA
In the Matter of:

Acceptance of Work for the Red Flag
Parking Sign Project #4197, in the City
of Orinda and Authorizing the City Clerk
to sign and file the Certificate of
Completion with the Contra Costa
County Clerk-Recorder
)
) Resolution No. 09-24
)
)
)
)
WHEREAS, McGuire-Pacific Constructors, has completed the work in accordance with the construction contract documents for the Red Flag Parking Sign Project No. 4197; and
WHEREAS, the Director of Public Works has recommended that the work be accepted as complete.

NOW THEREFORE BE IT RESOLVED that the work accomplished by McGuirePacific Constructors, under the terms and conditions of the above-referenced construction contract documents is hereby accepted.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to sign and file the Certificate of Completion with the Contra Costa County Clerk-Recorder.

BE IT FURTHER RESOLVED that the Director of Finance is hereby authorized to release all withheld project retention thirty-five (35) days after recordation of the Certificate of Completion, provided that no stop notices are outstanding.

Adopted by the City Council of the City of Orinda at a regular meeting on March 12, 2024, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Darlene K. Gee, Mayor
ATTEST:

Sheri Smith, City Clerk
F.4.a
Packet Pg. 46
Attachment: Resolution 09-24 Acceptance of The Red Flag Parking Sign Project 4197 (3305 : Accept The Red Flag Parking Sign Project #4197) WHEN RECORDED, RETURN TO:

City Clerk/Public Works Dept.

City of Orinda
22 Orinda Way
Orinda, CA 94563

NO FEE DOCUMENT
(Government Code section 27383)
TITLE:

Notice of Completion for
Red Flag Parking Sign Project No. 4197
(Contractor: McGuire-Pacific Constructors)
NOTICE IS HEREBY GIVEN by the undersigned, those certain improvements, to wit:

Red Flag Parking Sign Project No. 4197
Project location: In the City of Orinda, Contra Costa County, California on the following streets:
• Monte Vista Road from Camino Pablo to Monte Vista Ridge Road • Claremont Ave from Camino Pablo to the second western Holly Lane intersection • Manzanita Drive from Camino Pablo to Bobolink Road
• The entire length Vista Del Mar
• The eastern portion of Camino Don Miguel from Miner Road to Vista del Mar • The western leg of Sleepy Hollow Lane from Lombardy Lane to the Normandy Lane and Washington Lane intersection
• Miner Road from Camino Pablo to Ranch Road
• Lombardy Lane from Miner Road to Tarry Lane
• Dalewood Drive from Lombardy Lane to Sundown Terrace
• Honey Hill Road from Miner Road to Charles Hill Road
• Charles Hill Road from Honey Hill Road to El Nido Ranch Road • Sundown Terrace from Happy Valley Toad to Silver Oak Terrace Property Owner: Interest in Property or Right of Way is owned by City of Orinda (a municipal corporation, 22 Orinda Way, Orinda CA 94563)
The contract which has heretofore been let to McGuire-Pacific Constructors, and which contract was filed for record in the City Clerk’s office in the City of Orinda, Contra Costa County, California, was actually completed in accordance with the plans and specifications, and the work was completed and accepted by the City of Orinda, on 3/12/2024 Information pertaining to the estimate of cost, names of bidders with prices bid, changes in adopted and approved plans and specifications, and the total cost of work is on file at the City Clerks’ office of the City of Orinda.

F.4.b
Packet Pg. 47
Attachment: NOC - The Red Flag Parking Sign Project (3305 : Accept The Red Flag Parking Sign Project #4197)

CITY OF ORINDA,
a municipal corporation
Date: ________________ By: ____________________________________ Sivakumar Natarajan, City Engineer,
R.C.E. #74789
City of Orinda
22 Orinda Way
Orinda, CA 94563
I hereby certify, under penalty of perjury, that the above Notice of Completion was duly accepted by the City Council of the City of Orinda at a regular meeting thereof held on 3/12/2024. ______________________________
Sheri Smith, City Clerk
F.4.b
Packet Pg. 48
Attachment: NOC - The Red Flag Parking Sign Project (3305 : Accept The Red Flag Parking Sign Project #4197) City Council
Staff Report
Agenda Item: F.5
Date: March 12, 2024
Department:

Public Works and
Engineering Services
AGENDA TITLE: Award Construction Contract to Hardiman Construction Inc. for the Group 2 Stormdrain Lining Project (CIP Project Nos. 3101 & 3102) RECOMMENDATION:

BACKGROUND:

The current adopted CIP includes the subject project, which is part of the ongoing effort to address the high priority “Category A” public storm drain pipes identified in the 2019 Storm Drain Repair Plan. The two CIP projects in this package will address deteriorated corrugated metal pipes that will be repaired (lined):
• CIP Project #3101 (Orchard Storm Drain Repairs), which will repair two pipes:
o PL-409, 96” pipe crossing Moraga Way (at Orchard Rd.) o PL-513, 60” pipe crossing Orchard Rd. (just west of Great Oaks Cr.) • CIP Project #3102 (Ivy Dr. Storm Drain Repairs) will repair three:
o PL-958 & PL-959, twin 42”x72” arch pipes crossing Ivy Dr. (just south of Ramona Dr.)
o PL-864, 96” crossing El Camino Moraga (just north of Dos Encinas) At its December 14, 2021, meeting, City Council awarded a design contract to Harris & Associates for an estimated budget of $325,246. The work included environmental work related to acquiring regulatory permits. To date approximately $125,000 has been expended on design and regulatory permit acquisition efforts.

The construction work to be done generally consists of installing coffer dams and creek diversion to allow for invert paving, spot repairs as necessary and applying geopolymer lining. The plans for the project are included as Attachment A.

With respect to CEQA guidelines, the project was determined to be Categorically Exempt under section 15301, class 1, and a Notice of Exemption was filed with the County Clerk on 12-20-2022.

F.5
Packet Pg. 49
DISCUSSION:

1. Award Construction Contract
The Project was advertised for bids on January 11. 2024. Seven bids were received on February 13, 2024, with results as shown below. The Engineer’s Estimate for the project was $ 805,000.

Bidder Bid Amount, $
Hardiman Construction 582,150
Pipe & Plant Solutions 697,500
Ashlar Structural 725,900
Mark Lee & Yong Kay Construction 729100
National Plant Services, Inc 744,749
Kerex Engineering 799,000
Valentine Corporation 813,369
The apparent low bidder, Hardiman Construction Inc. submitted a bid of $582,150. Staff has reviewed the bid documents and found Hardiman Construction to be responsive and responsible and therefore is recommending that the contract be awarded to them.

In addition, Staff is recommending that a contingency of 15% ($87,850) be authorized to accommodate potential changes in estimated quantities, and for unforeseen changes in conditions.

2. Approve Plans for the Project
City Council approval of the construction plans (Attachment A) is recommended, in accordance with the design immunity defense requirements listed under California Government Code Section 830.6.

NEXT STEPS:

Upon approval of the award of the construction contract, the contract (standard city construction contract, as provided in the bid documents) will be delivered to the contractor for signature and evidence of insurance preparation. Once the signatures and evidence of insurance have been reviewed and approved by the City, the construction contract will be reviewed by the City Attorney and then executed by the City Manager. Project construction is estimated to begin in mid-June 2024 FISCAL IMPACT:

The total estimated cost of the current construction contract, including contingencies, is $670,000. The sources of funding are Drainage Impact fees (Fund #210) and the American Rescue Plan Act (ARPA) Grant (Fund #256). As noted above, the subject Project consists of two approved CIP projects, which have authorized budgets for construction in Fiscal Year 2023-24 as shown below:

F.5
Packet Pg. 50
Projects Budget 2023-24
#3101 $950,000
#3102 950,000
Total construction budget $1,900,000
As shown, the adopted construction budgets for the work are ample for the proposed contract value and the contingency. At the conclusion of the work and acceptance of the contract, excess budget amounts will be returned to the respective fund balances and be available for future City Council appopriation.

ATTACHMENTS:

A. Plans, Group 2 Stormdrain Lining Project
Respectfully Submitted by:

Scott Christie
Public Works Director
Prepared By: Scott Christie, Public Works Director
Approved by:

F.5
Packet Pg. 51
City Council
Staff Report
Agenda Item: F.6
Date: March 12, 2024
Department:

Public Works and
Engineering Services
AGENDA TITLE: Acceptance of 2023 Annual Pavement Rehabilitation Contract (CIP No. 4171)
RECOMMENDATION:

BACKGROUND:

On August 15, 2023, the City Council awarded a construction contract to Goodfellow Bros. LLC. of Livermore, California, in the amount of $4,032,028.80 (Base Bid plus Bid Alternate 1) for performance of the 2023 Annual Pavement Rehabilitation Project and authorized a 15% contingency fund for a total construction budget of $4,636,832. The Contractor entered into a construction contract with the City subsequent to review and approval by the City Attorney.

A Notice to Proceed was issued to the Contractor on September 7, 2023, with all performance to be accomplished within 70 working days. The project was completed within the required number of working days and no liquidated damages were assessed to the Contractor.

DISCUSSION:

The project was substantially completed in December 2023. During the course of construction, three (3) Contract Change Orders (CCO) were incorporated into the project. The combination of these CCOs resulted in reducing the contract amount by $117,571.72, due to removal of certain bid items, bringing the total contract value to $3,914,457.08. Additional quantity adjustments made to various bid items during construction resulted in total project construction cost to $3,457,084.80.

The contractor, Goodfellow Bros. LLC filed various Potential Claim forms related to construction on the project. A total of 5 potential claims were originally submitted, of which potential claim no. 5 has been resolved. Potential claims no. 1, 2, 3 & 4 are still pending, and Staff are reviewing the claims with assistance from both the City Attorney’s office and an outside counsel to determine whether the Contractor’s claims have merit. Depending on the progress of negotiations with the contractor, Staff will inform the City Council of any updates to the potential claims and seek Council direction in a future closed session meeting.

F.6
Packet Pg. 52
Other Project Costs:

The City hired BSK Associates to perform material testing and quality assurance for the project. The total cost for this task was $39,526.25.

The contract included repairing various stormdrain pipes that are within the pavement project limits. While the contractor did complete several of these, they were not able to rehabilitate 3 of these stormdrain pipes due to the partially failed condition of these pipes. City staff therefore removed that scope of work from the contract, and contacted specialty contractors who were able to individually assess repair methods and then repaired with an alternate rehabilitation. The cost of the 3 stormdrain pipe repairs was approximately $125,000; this was lower than price in the subject contract, had the contractor been able to perform the work.

FISCAL IMPACT:

The following is a summary of the Project Construction/Improvement costs, excluding design costs:

Authorized Value (Contract Award plus Contingency)
Contract – (Based on estimated quantities on unit priced bid items) $4,032,028.80 Contingency at Time of Award for Changes in Quantities / Scope 604,803.20 Total Authorized Amount $4,636,832.00
Contract Base Bid Plus Alternate 1
$4,032,028.80
Net Change by Change orders (#1 - #3) (117,571.00)
____________
Revised Contract Sum to date $3,914,457.08

Total Completed Work by Goodfellow $3,457,084.80
Alternate SD rehabilitation 125,251.00
BSK Associates (materials testing) 39,526.25
Other Professional Services 7,464.79
______________________
Total Construction Cost $3,629,326.84
In connection with this project, the City of Orinda and East Bay Municipal Utility District (EBMUD) signed a Gate Valve Adjustment Agreement for which the City’s contractor replaced fifty-one (51) gate valves on behalf of EBMUD. EBMUD inspected and approved the new gate valves and authorized $45,900 in reimbursement to the City.

In the interest of cost efficiency, Central Contra Costa Sanitary District (CCCSD) allowed the City’s contactor to adjust the Sanitary Sewer Structures throughout the City for the 2023 Annual Pavement Rehabilitation Project; CCCSD then reimbursed the City $98,400.

F.6
Packet Pg. 53
AT&T reimbursed the City $9,600 for adjusting four (4) AT&T manholes.

Total reimbursement from the above utilities is $153,900.

The reduced contract amount, and the unused contingency, results in returning a total of up to $1,161,405.16 to the respective fund balances.

Due to the ongoing discussion with the contractor the final total construction cost and the resulting balance of funds will be less following resolution of claims with the Contractor.

NEXT STEPS:

Upon City Council approval, the City Engineer or the Director of Public Works and Engineering Services will sign the Notice of Completion and the City Clerk will record it with the Contra Costa County Clerk-Recorder’s Office.

Pursuant to Public Contract Code 7107(c), the contractor has requested all retention funds be released. The Director of Finance is authorized to release $172,845.24 in withheld retention to Goodfellow Bros. LLC. 60 days after the date of completion or 35 days after recordation of the Notice of Completion, provided that no Stop Notices are outstanding.

ATTACHMENTS:

A. Resolution 06-24 Acceptance of 2023 Annual Pavement Rehabilitation B. Notice of Completion
Respectfully Submitted by:

Scott Christie
Public Works Director
Prepared By: Sivakumar Natarajan, City Engineer
Approved by:

F.6
Packet Pg. 54

BEFORE THE CITY COUNCIL OF THE CITY OF ORINDA
In the Matter of:

Acceptance of Work for the 2023 Annual
Pavement Rehabilitation Project (CIP
No. 4171), in the City of Orinda and
Authorizing the City Clerk to sign and file
the Certificate of Completion with the
Contra Costa County Clerk-Recorder
)
) Resolution No. 06-24
)
)
)
)
)

WHEREAS, Goodfellow Bros. LLC., has completed the work in accordance with the construction contract documents for the 2023 Annual Pavement Rehabilitation Project (CIP No. 4171); and
WHEREAS, the Director of Public Works has recommended that the work be accepted as complete.

NOW THEREFORE BE IT RESOLVED that the work accomplished by Goodfellow Bros. LLC., under the terms and conditions of the above-referenced construction contract documents is hereby accepted.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to sign and file the Certificate of Completion with the Contra Costa County Clerk-Recorder.

Adopted by the City Council of the City of Orinda at a regular meeting on March 12, 2024, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Darlene K. Gee, Mayor
ATTEST:

Sheri M. Smith, City Clerk
F.6.a
Packet Pg. 55
Attachment: Resolution 06-24 Acceptance of 2023 Annual Pavement Rehabilitation (3317 : Acceptance of 2023 Annual Pavement Rehabilitation

RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:

City Clerk/Public Works Dept.

City of Orinda
22 Orinda Way
Orinda, CA 94563

NO FEE DOCUMENT
(Government Code section 27383)
TITLE:

Notice of Completion for
2023 Annual Pavement Rehabilitation Project (CIP No. 4171) (Contractor: Goodfellow Bros. LLC.)
NOTICE IS HEREBY GIVEN by the undersigned, those certain improvements, to wit:
2023 Annual Pavement Rehabilitation Project (CIP No.4171), on various streets throughout Orinda.

Project location is in the City of Orinda, Contra Costa County, California:

Property Owner: Interest in Property or Right of Way is owned by City of Orinda (a municipal corporation, 22 Orinda Way, Orinda CA 94563) as right-of-way.

The contract which has heretofore been let to Goodfellow Bros. LLC., and which contract was filed for record in the City Clerk’s office in the City of Orinda, Contra Costa County, California, was completed in accordance with the plans and specifications, and the work was completed and accepted by the City of Orinda, on 3/12/2024
Information pertaining to the estimate of cost, names of bidders with prices bid, changes in adopted and approved plans and specifications, and the total cost of work is on file at the City Clerks’ office of the City of Orinda.

CITY OF ORINDA,
a municipal corporation
Date: ________________ By: ____________________________________ Scott Christie, PW Director
City of Orinda
22 Orinda Way
Orinda, CA 94563
I hereby certify, under penalty of perjury, that the above Notice of Completion was duly accepted by the City Council of the City of Orinda at a regular meeting thereof held on 3/12/2024. ______________________________
Sheri Smith, City Clerk
F.6.b
Packet Pg. 56
Attachment: Notice of Completion (3317 : Acceptance of 2023 Annual Pavement Rehabilitation Project) City Council
Staff Report
Agenda Item: F.7
Date: March 12, 2024
Department: City Council
AGENDA TITLE: Authorize Contract Amendment No.2 with Wildland Corporation for services related to Chipper Services.

RECOMMENDATION:

Staff recommends that the City Council approve a Contract Amendment Wildland Corp to increase the not to exceed contract value from $225,000 to 400,000.

BACKGROUND:

As of July 1, 2021, the City has had an ongoing contract with Wildland Corporation (formerly Thorn Hauling). The services are to provide a two-person crew to operate the City’s truck and chipper and to dispose of the vegetation regularly.

At the time of the original contract, it was unclear how the community would respond to the chipper services. In the summer of 2022, as the volume of requests were increasing, MOFD asked the City to assist in the administering and scheduling of the chipper truck for Orinda residents so that MOFD could move on to property inspections.

To handle the demand the City quickly transitioned to an easy-to-use scheduling software with online registration for residents and efficient scheduling for the crew.

Currently, the program has a high resident satisfaction rate (4.8 out of 5) and the program participation and removal of fire fuels has more than doubled.

In addition to the successful Measure R chipper program, Wildland Corporation has, in part, helped the City bring all City-owned properties up to code by removing dead or dying trees, assisting with mitigating vegetation on streets, medians, at the Community Center, Orinda Oaks Park, and Wilder. Additionally, Wildland Corp has done specific Public Works or Parks and Recreation work outside of Measure R for general landscaping and/or tree services.

With the demand for chipper services increasing, and the additional use by City departments, the expenditure limit under the existing contract has already been exceeded. The recommended increase in the contract limit is designed to allow for those already incurred costs to be covered, and to allow for the chipper to continue in service for the 2024 Fire Season.

NEXT STEPS:

As this contract is for an ongoing service, in future years it will be treated as an annual contract and addressed as part of the budget process in order to allow for adjustments based on annual use and to avoid the inadvertent exceedance of the contract limits which has occurred and which this item addresses. We will also address any needed adjustments in compensation such as requested or necessary CPI adjustments.

F.7
Packet Pg. 57
FISCAL IMPACT:

There is adequate funding in Measure R and other funding sources used to pay for chipper services to accommodate the subject Amendment.

ATTACHMENTS:

A. Wildland (Thorn Hauling) Original Contract 2021
B. Wildland (Thorn Hauling) Amendment No.1 July 2021
Respectfully Submitted by:

Micki Cronin
Senior Management Analyst
Prepared By: Micki Cronin, Senior Management Analyst
Approved by:

F.7
Packet Pg. 58
F.7.a
Packet Pg. 59
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 60
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 61
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 62
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 63
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 64
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 65
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 66
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 67
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 68
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 69
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 70
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 71
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.a
Packet Pg. 72
Attachment: Wildland (Thorn Hauling) Original Contract 2021 (3321 : Wildland Contract Amendment) F.7.b
Packet Pg. 73
Attachment: Wildland (Thorn Hauling) Amendment No.1 July 2021 (3321 : Wildland Contract Amendment) City Council
Staff Report
Agenda Item: H.1
Date: March 12, 2024
Department: City Council
AGENDA TITLE: Quarterly Financial Report (2nd Qtr FY 2023-24) and Mid-Year Budget Adjustments
RECOMMENDATION:

Receive the report and authorize Staff to record the Budget adjustments as described in Attachment F (Budget Change Form).

BACKGROUND:

This report provides information based on the results of the first six months of the Fiscal Year (July 1, 2023 – December 31, 2023). It includes a detailed analysis of General Fund performance compared to the Budget as well as a discussion of proposed budget adjustments. The good news is that the General Fund appears to be performing as anticipated when the budget was adopted in June of 2023, and only minor adjustments are being proposed as part of this process. As discussed in this report, the City has a practice of adopting a balanced General Fund budget and making minor modifications to address unanticipated items and or changing trends as needed.

Financial Planning Cycle
The City Council establishes a Budget on a two-year cycle. The Fiscal Year begins on July 1st and ends on June 30th. Fiscal Year 2023-24 is the first year of the two-year cycle. Since the Budget is based on estimates and forecasts, a periodic review of budget to actual performance is appropriate to identify deviations in the financial plan.

Typically, with a full six months of data available, the mid-year Budget Report also includes any recommended budget adjustments to the adopted financial plan. The adjustments are proposed based on historical trends as well as actual results.

General Fund
The General Fund is the primary operating fund for the City, and it also allows for the most discretionary use of funds. As the core support for City operations, the General Fund is the focus of the initial portion of this report (Including Attachments A – D).

The General Fund activity presented includes both the Local ½ Cent Add-On Measure L Sales Tax and the Local 1 Cent Add-on Measure R Sales Tax revenues and expenditures used primarily for street & drainage projects and fire mitigation programs.

For Annual Comprehensive Financial Reporting (ACFR) purposes, these funds are also reported as part of the General Fund. However, the City also tracks these activities in separate sub-funds (#105 & #106) for fiscal management purposes. In the more detailed sections of the attachments to this report, Revenue and Expense associated with the Add-On Sales Taxes are identified separately (Attachment E).

H.1
Packet Pg. 74
High Level Revenue & Expenditure Summary – Attachment A The first attachment to the Report provides a high-level summary of General Fund Revenue and Expenditures (See Attachment A.) The revenues are broken down by major “types” and expenditures are shown by Department. As shown on Attachment A, as of December 31, 2023, in the General Purpose portion of the General Fund (excludes both Add-On Sales Taxes), the City recorded collection of approximately

41.2% of the Budgeted Revenue and spent 44.5% of the Budgeted Expenditures.

Revenue
The following summarizes the total revenue collected in the first six months of the current fiscal year (a detailed breakdown is shown in Attachment B). As shown below, total revenue is roughly 5.4% higher than the previous year when looking at the total amount. The increase in the “General Purpose” component will be discussed in more detail later in the report. The 1/2 Cent Add-On Sales Tax variance is primarily due to project reimbursements from our utility partners. The Measure R 1 Cent Add-On Sales Tax is primarily a function of increased interest income.

Revenue Collected First 6 Months Fiscal Year (2023 vs 2024) The Chart on the following page compares the actual revenue collected in the first six months based on type. As will be discussed in more detail, Taxes exceed the prior year comparison as does revenue generated by Parks and Recreation, but proportionately speaking, Rents & Interest is experiencing the largest percentage increase. The Revenue Detail Narrative section of Attachment B provides detailed analysis on significant variance items.

H.1
Packet Pg. 75
General Fund Revenue by Type (July – December)
FY2022-23 Compared to FY2023-24
Expenditures
The following table summarizes the total General Fund expenditures in the first six months (a detailed breakdown by type of expense is shown in Attachment C; and a breakdown by Department is contained in Attachment D). As shown below the total expended from July 2023 – December 2023 was approximately $9.1 million. The “General Purpose” component was $0.4 million less than the prior year due primarily to $900,000 of Transfers Out which occurred in December 2022, while total “Add-On” Sales Tax (combined #105 & #106) expenditures decreased from the prior year amount by approximately $1.1 million. The “Add-On” Sales Tax expenditures are primarily associated with Capital Project expenditures which do not always follow a consistent pattern from year to year.

Six Month Expenditure Comparison
Fiscal Year 2022-23 vs Fiscal Year 2023-24
The chart on the following page compares the actual General Fund expenditures in the first six months based on the type of expense. The increase in most spending categories for the first six months of the fiscal year was anticipated and underscores the H.1
Packet Pg. 76
increased cost of service delivery and higher activity levels across programs. The decrease in Add-On Sales Tax expenditures were primarily the result of timing associated with Capital Project expenditures.

General Fund Expenditures by Type (July – December)
FY2022-23 Compared to FY2023-24
Budget To Actual Performance
The Budget serves as a Fiscal Plan for the City. Given that budgets are based on estimates and forecasts, it is very important to evaluate how the first six months of actual activity compares to the planned Revenue and Expenditures. The following highlevel analysis will focus on the General Purpose General Fund Budget to Actual.

Revenue Compared to Budget
Revenue collected as of December 31, 2023, was approximately 41% of the Budget. ($6.7 million received compared to $16.3 million budget). By comparison for the same period in the prior fiscal year, the City had collected 37% of the Fiscal Year 2022-2023 actual revenue.

H.1
Packet Pg. 77
FISCAL YEAR 2023-24 GENERAL FUND ACTUAL REVENUE (FUND #100)

COMPARED TO BUDGET
Although some revenue items are trailing forecasts, others are outperforming expectations. Staff is not recommending adjustments (up or down) to any revenue items during this mid-year review as there is no significant event or trend which warrants such treatment.

Expenditures Compared to Budget
General Purpose General Fund operating expenditures as of December 31, 2023, were approximately 44.5% of the Budget. ($7.3 million actual expense compared to the $16.3 million budget). By comparison for the same period in 2022, the City had recorded expenditures totaling 48.0% of the Fiscal Year 2022-23 actual expenditures.

The following Chart displays the December 31, 2023, expenditures by Department compared to the current Budget. Attachment D provides a detailed line-item view of the Budget Compared to Actual Expense. The majority of Departments are at or below 50% of the budget, which would be expected halfway through the fiscal year. The most significant deviations are:
• Parks & Recreation/ Facilities (53.9% Budget) is trending high due to the continued increase in demand for recreation services and the associated costs of providing those services, primarily the additional cost of contract instructors. As a point of reference, revenue from recreation classes is outpacing prior year revenue by almost $100,000 during the first six months of the year.
• Police Services (40.6% Budget) and City Attorney Services (18.2% of Budget) are provided under contract. There is a billing lag (services provided in December typically billed in January) which results in less H.1
Packet Pg. 78
than 50% of the budget spent as of December 31st. These expenses are tracking as expected, barring unanticipated litigation. • Non- Departmental Services (91% Budget) includes the semi-annual City Hall Debt Service payments which was made as of December 31, 2023.

GENERAL FUND (FUND #100) ACTUAL EXPENDITURES COMPARED TO BUDGET By Department as of December 31, 2023
Revenue Detail (Including Comparison to Prior Year) Attachment B Attachment B provides a detailed breakdown of the revenue collected in the first six months of the year compared to the Budget. Given the uneven distribution throughout the year, it is helpful to examine the actual revenue collected in the first six months of the previous fiscal year. Included with the detailed financial information provided on Attachment B is additional narrative analysis of key areas of deviation.

Expense Detail by Type (Including Comparison to Prior Year) Attachment C Attachment C provides a breakdown of all General Fund expenditures by “type”. For Example, Salaries & Benefits, Contractors, Materials & Supplies, Vehicle Expense, Special Department Expense, and Add-On Sales Tax Expense. Similar to the Revenue Detail, this schedule also provides a comparison to actual activity in the first six months of the previous Fiscal Year. As shown in the Chart on the following page, over 56% of the expenditures as of December 2023 were in the Salaries & Benefits and Contract Services categories, which is reflective of the service-oriented nature of local municipal government. Measure L and Measure R account for 21% of the overall General Fund spend, with a majority (roughly 75%) of that being Capital Projects.

H.1
Packet Pg. 79
Comparison of Major Expenses by Type as of December 31, 2023 DISCUSSION:

As shown on Attachment A, the current General Fund (Fund #100 only) Budget projections show expenditures and net transfers are in excess of revenues by $3,083,824. Of this amount, over $3 million of Transfers Out and $200,000 of operating expense are of a one-time nature and are appropriately intended to utilize accumulated fund balance as discussed at the June 20, 2023, City Council meeting when the Biennial Budget for Fiscal Years 2023-24 and 2024-25 were adopted. Factoring these one-time items (which come from available accumulated Fund Balance) out of the equation, the City is expecting an operating surplus of $145,000 before any proposed adjustments.

Proposed Budget Adjustments
Based on the performance to date, Staff is recommending no budget adjustments in the General Fund (Fund #100) operating budget.

The City of Orinda received roughly $4,767,000 of American Rescue Plan Act (ARPA) grant funds by the end of Fiscal Year 2022-23. These funds were deposited into Fund #256, Federal Grants ARPA, and based upon council direction, the grant was allocated as follows:

1. Local Roads Safety Plan Implementation - $150,000

2. Facility Maintenance Major Components - $560,955

3. Assessment of Technology Deployment and Enhancements - $500,000 H.1
Packet Pg. 80

4. Underfunded/Unfunded Capital Projects - $556,767

5. Storm Water Infrastructure - $3,000,000
Appropriations were programed into Fund #256 reflecting these allocations when the Biennial Budget for FY2023-24 and 2024-25 was adopted in June 2023. City staff have made some progress utilizing the funding as initially allocated. However, there has been discussion at the Federal level about clawing back the unexpended funds earlier than the original 2026 expenditure deadline.

In the time period since the initial grant award was made, final guidance for spending ARPA funds was issued, and this guidance allows for recipients of less than $10 million to utilize the “loss of revenue” provision”. Utilizing the loss of revenue provision allows the City greater flexibility in fulfilling its obligations under the grant by offsetting the revenue with general governmental services expenditures from fiscal year 2022-23, thus fully expending the grant funds and avoiding the claw back issue. Once the Federal Single Audit compliance report for FY 2022-23 is filed by the March 31st deadline, the cash balance remaining in Fund #256 should be considered earned and therefore transferred to the General Fund as reimbursement. Staff is recommending a series of appropriation adjustments to allow for this transfer to the General Fund and to reprogram the existing appropriations into the most appropriate Fund as detailed below:

The resulting transactions do not change the amount of operating or CIP appropriations, but rather, reprograms them from Fund #256 to the most appropraite location and creates a financal audit trail.

Additionally, at the March 5, 2024 City Council meeting, while discussion agenda item H.2 - Possible Locations for a Dedicated Off-Leash Dog Area and for Dedicated Pickleball Courts in Orinda, Council indicated interest in allocating resources from the Capital Improvement Fund (#700) to move these efforts forward. In order to facilitate this interest, staff recomends City Council formally establish a project for the Off-Leash Dog Area and a project for development of Pickleball Courts and provide appropriations totaling $30,000 ($20,000 for Pickleball and $10,000 for Off-Leash Dog Area) from Fund #700 for this purpose.

H.1
Packet Pg. 81
Looking Forward
Staff is beginning the process for development of the City’s Mid-Cycle Budget Update which will be for the 2024-25 fiscal year which will be presented to City Council in June 2024 for adoption. The 2023-24 Mid-Year update also represents an initial opportunity for the City Council to identify any ideas which they might like staff to consider as part of the development of the next two-year budget.

FISCAL IMPACT:

The details of the Fiscal Impact have already been discussed above. The proposed adjustments to the Budget include increases and decreases of both revenue and expenditures.

ATTACHMENTS:

A. Summary of General Fund Rev & Exp Jul-Dec
B. General Fund Revenue Summary Jul-Dec
C. General Fund Expenditure Summary Jul-Dec
D. General Fund Expenditure by Department Jul-Dec
E. Detail Add-On Tax Expenditures (Measure L and R Sales Tax) F. Budget Adjustment Change Form #004-24
Respectfully Submitted by:

Doug Alessio
Administrative Services Director
Prepared By: Doug Alessio, Administrative Services Director Approved by:

H.1
Packet Pg. 82
City of Orinda
SUMMARY - General Fund* Revenue And Expenditures
(*Including Add-On Sales Tax Funds)
From 7/1/2023 Through 12/31/2023
FY 2023-24
Actual
Jul-Dec 2023
FY 2023-24
Original
Budget
Budget to Actual
Variance
% YTD OF
BUDGET
REVENUES - Fund #100- General Fund
Taxes 4,823,504 $ 12,115,000 $ 7,291,496 $ 39.8%
Rents & Interest 314,872 298,000 (16,872) 105.7%
Miscellaneous 22,238 173,100 150,862 12.8%
Police - Fees & Fines 28,047 60,500 32,453 46.4%
Engineering Permits - Fees 118,481 360,400 241,919 32.9% Recreation Fees & Rentals 1,033,319 2,291,000 1,257,681 45.1% Development Services Fees 350,508 960,200 609,692 36.5% TOTAL REVENUE 6,690,970 $ 16,258,200 $ 9,567,230 $ 41.2% EXPENDITURES - Fund #100 - General Fund
00 - Non-Departmental (Excl Transfers) $ 564,146 $ 619,919 $ 55,773 91.0% 10 - City Management 233,170 586,934 353,764 39.7%
12 - City Attorney 106,520 585,000 478,480 18.2%
15 - City Clerk 197,164 345,122 147,958 57.1%
17 - Administrative Services 590,816 1,168,331 577,515 50.6% 20 - Police Services 2,005,364 4,939,404 2,934,040 40.6% 35 - Public Works 1,121,013 2,978,313 1,857,300 37.6%
40 - Parks & Recreation / Facilities 1,934,712 3,587,564 1,652,852 53.9% 47 - Library 30,069 53,712 23,643 56.0%
55 - Planning 476,913 1,448,641 971,728 32.9%
TOTAL EXPENDITURES Fund #100 $ 7,259,886 $ 16,312,940 $ 9,053,054 44.5% *Administrative Services = (Finance / Human Resources / Information Tech / General Services / Risk Management) OTHER SOURCES / USES GENERAL FUND (Inter-fund Transfers) Transfer IN Fund #100 $ - $ 17,340 17,340 0.0%
Transfer OUT Fund #100 - (3,101,164) (3,101,164) 0.0%
TOTAL OTHER SOURCES (Net) $ - $ (3,083,824) $ (3,083,824) 0.0%

GENERAL PURPOSE GENERAL FUND
NET CHANGE IN FUND BALANCE TO DATE $ (568,916) $ (3,138,564) (Revenue - Expenditures + Other Uses)

SUMMARY REVENUE / EXPENDITURES - ATTACHMENT A
H.1.a
Packet Pg. 83
Attachment: Summary of General Fund Rev & Exp Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
SUMMARY - General Fund* Revenue And Expenditures
(*Including Add-On Sales Tax Funds)
From 7/1/2023 Through 12/31/2023
FY 2023-24
Actual
Jul-Dec 2023
FY 2023-24
Original
Budget
Budget to Actual
Variance
% YTD OF
BUDGET
MEASURE L (Voter Approved Nov 2012 Collected Until March 31, 2021) REVENUES - Fund #105- 1/2 Cent Add-On Sales Tax
Taxes 1,253 $ - $ (1,253) $ 0.0%
Interest 6,489 - (6,489) 0.0%
Project Reimbursement Utilities 153,900 - (153,900) 0.0% TOTAL REVENUE FUND #105 $ 161,642 $ - $ (161,642) 0.0%
EXPENDITURES - Fund #105 - 1/2 Cent Add-On Sales Tax
Capital Project Measure L (Add-On Sales Tax) - $ - $ - $ 0.0% TOTAL EXPENDITURES FUND #105 $ - $ - $ - 0.0%
Measure L Add-On Sales Tax (1/2 Cent)
NET CHANGE IN FUND BALANCE TO DATE $ 161,642 $ -
(Revenue - Expenditures + Other Uses)
MEASURE R (Voter Approved November 2020 Replaced Measure L Beginning April 1, 2021) REVENUES - Fund #106- 1 Cent Add-On Sales Tax
Taxes 1,188,118 $ 3,700,000 $ 2,511,882 $ 32.1%
Interest 63,738 36,000 (27,738) 177.1%
TOTAL REVENUE FUND #106 $ 1,251,856 $ 3,736,000 $ 2,484,144 33.5% EXPENDITURES - Fund #106 - 1 Cent Add-On Sales Tax
Capital Project Measure L (Add-On Sales Tax) 1,885,585 $ 4,722,242 $ 2,836,657 $ 39.9% TOTAL EXPENDITURES FUND #106 $ 1,885,585 $ 4,722,242 $ 2,836,657 39.9% Add-On Sales Tax (1/2 Cent and 1 Cent)
NET CHANGE IN FUND BALANCE TO DATE $ (633,729) $ (986,242) (Revenue - Expenditures + Other Uses)
COMBINING SUMMARY GENERAL FUND #100 PLUS ADD-ON SALES TAX FUNDS (#105 AND #106) COMBINED TOTAL REVENUE $ 8,104,468 $ 19,994,200 $ 11,889,732 COMBINED TOTAL EXPENDITURES 9,145,471 21,035,182 11,889,711 OTHER USES NET - (3,083,824) (3,083,824)
REVENUE OVER / (UNDER) EXPENSE & USES (1,041,003) $ (4,124,806) $ (3,083,803) $

SUMMARY REVENUE / EXPENDITURES - ATTACHMENT A
H.1.a
Packet Pg. 84
Attachment: Summary of General Fund Rev & Exp Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget

CITY OF ORINDA
REVENUE SUMMARY- GENERAL FUND*
Quarter 2 (July - December 2023)
(*General Fund = General Fund #100 ; Add-On Sales Tax(Measures L & R Funds #105 & #106) CURRENT FISCAL YEAR (FY 2023-24)
Acct
Actual
Jul-Dec 2023
Budget
Original % Budget
Actual
Jul-Dec 2022
Actual
Fiscal Year % Actual
GENERAL FUND #100
Property Taxes
Property Tax 4100 $ 3,896,913 $ 6,530,000 60% $ 3,671,083 $ 6,775,738 54% Homeowners' Relief Tax 4101 - 30,000 0% - 31,370 0%
Documentary Transfer Tax 4102 100,831 200,000 50% 125,282 271,662 46% Property Tax in lieu of VLF 4103 - 2,725,000 0% - 2,720,853 0% Subtotal - Property Taxes 3,997,744 9,485,000 42% 3,796,365 9,799,623 39% Sales Taxes
Sales Tax 4105 452,411 1,360,000 33% 472,901 1,411,983 33% Subtotal - Sales Taxes 452,411 1,360,000 33% 472,901 1,411,983 33% Other Taxes - TOT / Franchise
Transient Occupancy Tax 4106 5,407 20,000 27% 6,211 27,958 22% Franchise Taxes 4107 367,942 1,250,000 29% 352,777 1,257,849 28% Subtotal - Other Taxes 373,349 1,270,000 29% 358,989 1,285,807 28% Rents & Interest
Excl. Yr End Unrealized gain (loss)*
Interest Revenue 4110 276,829 220,000 126% 74,317 355,389 21% Lease Agreements 4111 11,865 24,000 49% 12,589 24,157 52% Library Lease 4112 26,178 54,000 48% 29,058 57,923 50%
Subtotal - Rents and Interest 314,872 298,000 106% 115,964 437,469 27% Miscellaneous Revenue
State Mandate Reimb 4120 - - 100% - - 100%
Miscellaneous Revenue 4190 2,179 19,100 11% 2,352 4,542 52% Other Revenue 4999 - - 100% - - 100%
Grants - Federal CARES ACT 4357 - - 100% - - 100%
Reimbursements Admin 4790 20,059 154,000 13% 108,303 161,404 67% Subtotal - Miscellaneous 22,238 173,100 13% 110,654 165,947 67% Police - Fees and Fines
Miscellaneous Fees 4199 15 - >100% 200 200 100%
Fingerprinting Fees 4200 6,461 10,000 65% 5,718 11,415 50% Impound Recovery Fees 4203 1,240 2,500 50% 930 2,937 32% Vehicle Abatement Fees 4231 6,086 8,000 76% 2,715 12,545 22% Vehicle Court Fines 4235 4,320 20,000 22% 9,072 24,500 37% Parking Fines - Payment 4236 9,925 20,000 50% 9,758 20,261 48% Donations 4420 0% 0%
Reimbursements 4790 - - 0% 0%
Subtotal - Police 28,047 60,500 46% 28,393 71,858 40%
Engineering Permits - Fees
Miscellaneous Revenue 4190 - 400 0% 378 378 100%
Encroachment Permits 4330 54,314 150,000 36% 94,592 172,704 55% Engineering Fees 4333 16,294 60,000 27% 20,207 34,158 59% Project Reimbursement 4790 47,874 150,000 32% 61,896 126,795 49% Subtotal - Engineering 118,481 360,400 33% 177,073 334,034 53% PRIOR FISCAL YEAR (FY 2022-23)

ATTACHMENT B - REVENUE DETAIL
H.1.b
Packet Pg. 85
Attachment: General Fund Revenue Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment)

CITY OF ORINDA
REVENUE SUMMARY- GENERAL FUND*
Quarter 2 (July - December 2023)
(*General Fund = General Fund #100 ; Add-On Sales Tax(Measures L & R Funds #105 & #106) CURRENT FISCAL YEAR (FY 2023-24)
Acct
Actual
Jul-Dec 2023
Budget
Original % Budget
Actual
Jul-Dec 2022
Actual
Fiscal Year % Actual
PRIOR FISCAL YEAR (FY 2022-23)
Recreation Fees and Rentals
Miscellaneous Revenue 4190 500 - >100% 275.00 - 0%
Recreation Classes 4400 463,401 1,200,000 39% 377,814 1,276,901 30% Community Center Rentals 4410 148,326 200,000 74% 118,976 275,402 43% Sports Field Rentals 4415 182,319 500,000 36% 167,712 696,937 24% Miscellaneous Recreation Fees 4419 920 1,000 92% 785 1,980 40% Donations 4420 25,070 20,000 125% 2,515 26,193 10%
Wagner Gym Rentals 4481 8,647 60,000 14% 31,877 84,778 38% Youth Sports Programs 4490 190,227 250,000 76% 202,970 407,180 50% Project Reimbursement 4790 13,908 60,000 23% 21,332 52,591 41% Subtotal - Receation 1,033,319 2,291,000 45% 923,981 2,822,236 33% Development Services Fees
Building Inspection Fees 4500 278,192 630,000 44% 281,741 809,818 35% Planning Fees 4501 58,521 300,000 20% 132,374 243,942 54% Construction Debris Recycling 4502 568 - >100% - - 0%
Business Registration 4504 12,154 28,000 43% 12,776 29,377 43% Business Reg State Surchg 4505 1,073 2,200 49% 1,091 2,250 48% Planning Permit Surcharge 4506 - - 0% - 298 0%
Project Reimb. - Legal 4790 100% 100%
Project Reimb. - Planning 4790 100% 100%
Subtotal - Development Svcs 350,508 960,200 37% 427,981 1,085,685 39% Transfers In 5101 - - 0% - 17,100 0%
TOTAL REV. GENERAL FUND $ 6,690,970 $ 16,258,200 41% $ 6,412,300 $ 17,431,741 37% Fund #105- Add-On Sales Tax (1/2 cent Replaced 3/31/2021) Sales Tax - Local Add-On 4105 1,253 - >100% 9,538 10,708 89% Interest Add-On Sales Tax 4110 6,489 - >100% 12,194 32,514 38% Project Reimb. - Utilities 4790 153,900 - >100% 35,700 - >100% TOTAL #105 Add-On Sales Tax $ 161,642 $ - 100% $ 57,432 $ 43,221 133% Fund #106- Measure R Add-On Sales Tax (1 cent Effective 4/1/2021) Sales Tax - Local Add-On 4105 1,188,118 3,700,000 32% 1,206,911 3,803,247 32% Interest Add-On Sales Tax 4110 63,738 36,000 177% 12,643 60,209 21% TOTAL #106 Add-On Sales Tax $ 1,251,856 $ 3,736,000 34% $ 1,219,554 $ 3,863,457 32% COMBINING GENERAL FUND (#100, #105, and #106)
GRAND TOTAL $ 8,104,468 $ 19,994,200 41% $ 7,689,285 $ 21,338,419 36%

OTHER SOURCES OF FUNDING
Transfer In From Other Funds 5101 136,785 225,660 61% - 223,213 0% Adj. Unrealized Gain / (Loss) - - - -
GRAND TOTAL FUNDING AVAILABLE $ 6,827,754 $ 16,483,860 41% $ 6,412,300 $ 17,654,954 36%

ATTACHMENT B - REVENUE DETAIL
H.1.b
Packet Pg. 86
Attachment: General Fund Revenue Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment) Narrative Analysis Accompanying Attachment B
General Fund Detailed Revenue
Fiscal Year 2023-2024 As of December 31, 2023
Revenue Detail (Including Comparison To Prior Year) Attachment B This report provides a narrative description of the key variances in General Fund Revenue as of December 31, 2023. The preceding tables provided a detailed line-item breakdown of the revenue collected in the first six months of the year compared to the Budget. This section adds an additional explanation of key variances in each category of revenue.

Property Tax: Amounts collected are more than the previous Fiscal Year. Compared to the Budget the current year is running on par with the prior year. Although property values remain high, as illustrated by the $200,000+ increase in Property Tax, Documentary Transfer Tax continues to decline, reflecting the state of the residential real estate market which has slowed considerably due to the current interest rate environment.

Sales Tax: Based on the first six months, the Sales Tax is tracking Budget estimates, and no change is recommended. The current projection is based on one quarter of actual sales (July – September) and estimates moving forward. The City uses the firm “HdL Companies” to assist with sales tax monitoring.

A significant portion of the projected year-over-year decreases are related to decreased gasoline prices and an decrease in the portion of the tax allocated through the County pool. Amounts allocated through the pool have benefitted from legislation implemented in the last several years to collect taxes from out of state on-line transactions, but on-line retailers are changing their reporting strategies as reflected by the placement and reporting related to fulfillment centers.

Other Taxes:

This category is tracking very similar to last year and the largest component is Franchise Fees (Gas, Electric, Cable, Garbage). There is a lag in the collection timing since Gas and Electric franchise fees are paid annually in April. The increase in Franchise Taxes is due to the timing of payment of garbage franchise taxes. A small component of this category is Transient Occupancy Tax (TOT) collected from short-term rentals. This year collection has dropped down to $5,407. This reflects the chaotic state of the travel industry which is still trying to normalize after the pandemic. The Mid-Year Budget recommends no changes in the Other Taxes category.

Rents and Interest:

This category of revenue is exceeding expectations with the amount budgeted in the General Fund which is reflective of the current interest rate climate. This category bears monitoring, and the timing of any interest rate changes has the potential to impact this revenue when the investments are marked to market value at the end of the year, creating either a gain or loss which is required to be reported even though the City’s policy is to hold investments to maturity (non-speculative).

Police Fees and Fines:

Overall, this revenue budget appears to have stabilized after several years of reductions. The previous year’s reductions are primarily due to reduced parking demand induced by the pandemic resulting in less parking fines.

H.1.b
Packet Pg. 87
Attachment: General Fund Revenue Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment) Narrative Analysis Accompanying Attachment B
General Fund Detailed Revenue
Fiscal Year 2023-2024 As of December 31, 2023
Recreation Fees & Rentals:

It appears that there is a healthy demand for recreation services post-COVID as Recreation Fees and Rentals continue to grow beyond pre-COVID levels.

Add-On Sales Tax ½ Cent (Fund #105): To date this tax has been expended on roads and drains. No tax revenue was programmed for Fund #105 since the tax was discontinued in April of 2021. Although some revenue continued to be received as deferments, late payments, and corrections are processed by the State. We expect that these tax payments have worked their way through the system and no future tax payments should occur. Fund #105 has received a healthy amount of Project Reimbursement associated with the 2022 Pavement Rehab CIP project. These reimbursements are made by various utilities (PG&E, EBMUD, Central Contra Costa Sanitation District) for improvements and repairs made on their behalf as part of the paving program.

Add-On Sales Tax 1 Cent (Fund #106):

Revenue generated from the 1 Cent Add-on Sales Tax is on track to meet original projections and no adjustment is being recommended at this time.

H.1.b
Packet Pg. 88
Attachment: General Fund Revenue Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment)

CITY OF ORINDA
EXPENDITURE SUMMARY- GENERAL FUND*
*General Purpose Fund #100, #105 1/2 Cent Add -On Sales Tax, and 106 Measure R CURRENT FISCAL YEAR (FY 2023-24) PRIOR FISCAL YEAR (FY 2022-23) Expenditures Acct
Actual
Jul-Dec 2023
Budget
Original
%
Budget
Actual
Jul-Dec 2022
Actual
Fiscal Year
%
Actual
Salaries & Benefits
Salaries & Wages 7055 $ 1,742,885 $ 4,255,255 41% $ 1,624,370 $ 3,548,781 46% Leave/Float Holiday Payout 7057 30,291 33,050 92% 13,607 26,626 51% Standby Compensation 7060 7,308 18,000 41% 6,992 18,068 39% Overtime 7061 1,919 15,000 13% 3,816 13,275 29%
Accrued Comp Time 7062 - - 0% - (2,949) 0%
Accrued General Leave 7063 - - 0% - 70,069 0%
Temporary - Other 7079 139,989 247,400 57% 93,898 193,823 48% Medicare 7080 28,387 58,885 48% 25,841 56,163 46%
Unemployment Insurance 7081 1,713 10,000 17% 3,002 6,034 50% Worker's Compensation Ins 7082 104,338 116,000 90% 93,016 93,016 100% Medical & Dental Insurance 7083 239,277 545,751 44% 201,016 467,997 43% LTD & Life Insurance 7084 7,187 20,268 35% 6,659 16,586 40% Cash In Lieu 7085 21,503 51,577 42% 26,999 56,173 48%
Retiree Medical 7086 2,120 5,000 42% 1,823 3,662 50%
Vehicle Allowance 7088 2,750 6,000 46% 2,768 6,018 46%
Retirement Plan 7089 286,178 625,926 46% 264,274 580,831 45% Subtotal - Salary & Benefits 2,615,845 6,008,112 44% 2,368,080 5,154,172 46% Contractors
Attorney - City General 7131 50,362 340,000 15% 74,086 193,152 38% Attorney - City Litigation 7132 34,197 60,000 57% 855 111,542 1% Attorney - Billed Services 7133 20,059 180,000 11% 129,427 174,240 74% Attorney - H R 7134 1,392 5,000 28% 1,769 2,813 63%
Software System Support 7135 110,983 130,200 85% 80,632 101,732 79% Audit - General 7138 8,985 39,000 23% 10,714 35,337 30% Contract Sheriff 7150 1,387,355 3,505,578 40% 905,106 3,039,675 30% Contract Sheriff - CSO 7152 - 183,000 0% - - 0%
Contract Sheriff - Overtime 7154 163,251 377,303 43% 111,020 332,397 33% Contract Sheriff - Dispatch 7157 31,808 125,000 25% 30,445 121,378 25% CCC Animal Control Contract 7165 83,529 177,455 47% 76,026 152,052 50% Temp Contract Staff 7170 - - 0% 13,676 13,676 100%
Contracts (Cost Recovery) 7171 47,726 150,000 32% 59,020 136,905 43% Adult Enrichment Instructors 7172 54,255 120,000 45% 41,978 114,443 37% Program Instructors - Youth 7173 328,892 450,000 73% 232,234 490,683 47% IT/Network Consulting Services 7176 111 - >100% - - 0%
Minutes - Contractor 7178 3,840 13,000 30% 5,820 12,630 46% Cleaning Services 7179 34,609 79,500 44% 38,227 92,557 41% Professional Services 7180 62,606 551,000 11% 110,040 337,603 33% Volunteer Center 7181 1,875 5,000 38% 2,250 4,500 50%
Graphic Design 7182 10,545 25,000 42% 5,445 14,304 38%
Printing Costs 7183 8,000 27,500 29% - 9,150 0%
Guardrail Repair / Replace 7188 - 40,000 0% 27,223 8,813 309% Drainage 7191 16,507 55,000 30% 1,117 111,478 1%
Hydrauger Cleaning 7192 - 15,000 0% - - 0%
Tree Trimming 7196 - 80,000 0% 17,735 39,660 45%
Landscaping 7197 70,232 158,500 44% 93,864 199,712 47%
Pavement/Shoulder Repair 7198 - 60,000 0% - 15,385 0%
Striping/Marking 7199 - 10,000 0% 132 132 100%
Maintenance Right of Way 7534 784 12,000 7% 2,746 5,511 50% Repairs & Improvements 7540 33,478 102,500 33% 85,649 318,487 27% Total Contractors 2,565,380 7,076,536 36% 2,157,235 6,189,948 35%

ATTACHMENT C - EXPENDITURES BY TYPE
H.1.c
Packet Pg. 89
Attachment: General Fund Expenditure Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment) CURRENT FISCAL YEAR (FY 2023-24) PRIOR FISCAL YEAR (FY 2022-23) Expenditures Acct
Actual
Jul-Dec 2023
Budget
Original
%
Budget
Actual
Jul-Dec 2022
Actual
Fiscal Year
%
Actual
Materials & Supplies
Permit Fees 7129 - 5,000 0% - 4,725 0%
Supplies - Office 7200 6,030 14,300 42% 6,117 12,848 48% Supplies - General 7203 93,655 180,200 52% 82,266 226,916 36% Postage 7230 6,822 10,650 64% 5,086 8,017 63%
Maintenance - Office Equip 7290 33 - >100% - - 0%
Maintenance - Other Equip 7291 157 3,400 5% 1,003 1,003 100% Maintenance - Copier 7292 1,661 7,000 24% 1,840 6,595 28% Maintenance - Building 7297 92,687 120,000 77% 49,508 137,794 36% Maintenance - Fields 7298 21,804 30,000 73% 12,971 70,310 18% Telephone Service 7300 73 800 9% 88 208 42%
Utilities - Gas 7302 10,857 23,000 47% 9,646 25,445 38% Utilities - Electric 7303 73,876 184,500 40% 78,987 211,448 37% Utilities - Water 7304 76,800 113,000 68% 75,064 135,767 55% Utilities - Sewer 7305 15,733 9,350 168% 14,023 7,839 179% Utilities - Garbage -Landfill 7309 - - 0% - - 0%
Taxes/Assessments 7310 1,600 2,000 80% 1,529 1,529 100% Cable Service 7312 - - 0% - (69) 0%
Cellular Service 7313 6,831 24,600 28% 9,787 23,323 42% Administrative Fees 7499 38,069 142,500 27% 48,511 177,376 27% Miscellaneous 7550 - - 0% - 75 0%
FF&E (Less than $5,000) 7998 8,000 20,000 40% 4,013 - >100% FF&E (More than $5,000) 7999 7,629 - 0% - - 0%
Total Materials & Supplies 462,316 890,300 52% 400,440 1,051,150 38% Special Department Expense
Construction Costs 7127 - - 0% - 32,625 0%
Insurance - Property 7503 2,898 3,312 87% 2,330 2,882 81% Election Costs 7504 - - 0% - 22,108 0%
Off-Site Storage 7506 3,409 8,000 43% 3,447 6,816 51%
Code/Legal Updates 7507 - 3,000 0% - - 0%
Legal Notices 7508 1,745 57,000 3% 2,965 11,982 25%
Payroll/Benefit Fees 7511 1,122 3,000 37% 903 2,779 32% Communication 7517 650 4,500 14% 4,523 4,523 100%
Recruitment Expenses 7519 1,066 28,000 4% 3,256 7,561 43% Investigation Costs 7520 14,890 45,000 33% 14,696 61,595 24% Traffic Control Signs 7532 5,481 10,000 55% 3,134 9,906 32% Street Name Signs 7535 359 1,500 24% 1,066 1,066 100%
Uniforms/Equipment 7541 32,239 73,900 44% 26,119 87,660 30% Referees/Clinics 7543 21,346 25,000 85% 18,001 26,177 69% Publicity / Promotion 7545 - 500 0% - - 0%
Contingency 7599 - 250,000 0% 50,742 50,742 100%
Rental - Equipment 7610 12,198 16,000 76% 10,700 19,268 56% Rental - Transportation 7611 7,342 12,000 61% 9,604 13,548 71% Rental - Facilities 7612 - 40,000 0% - 20,082 0%
Memberships 7700 23,242 51,500 45% 23,778 52,117 46%
Training & Conferences 7710 8,103 26,500 31% 9,820 17,110 57% Mayor's Conference Host 7713 - - 0% - 5,950 0%
Council Expenses 7719 4,122 12,000 34% 3,560 12,449 29% Meetings 7720 - 1,150 0% - 130 0%
Interest - City Hall (COP) 7802 204,919 204,919 100% 215,419 215,419 100% Principal - City Hall (COP) 7810 355,000 355,000 100% 345,000 345,000 100% Indirect Cost Alloc-Fleet 7895 132,910 132,910 100% 117,570 117,570 100% Indirect Cost Alloc-Bldg Svcs 7896 129,900 129,900 100% 183,420 183,420 100% Indirect Cost Allocation-IT 7897 204,204 284,204 72% 229,935 229,935 100% Indirect Cost Allocation-Ins. 7898 362,697 362,697 100% 441,030 441,030 100% Total Special Department Expenses 1,529,841 2,141,492 71% 1,721,018 2,001,449 86%

ATTACHMENT C - EXPENDITURES BY TYPE
H.1.c
Packet Pg. 90
Attachment: General Fund Expenditure Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment) CURRENT FISCAL YEAR (FY 2023-24) PRIOR FISCAL YEAR (FY 2022-23) Expenditures Acct
Actual
Jul-Dec 2023
Budget
Original
%
Budget
Actual
Jul-Dec 2022
Actual
Fiscal Year
%
Actual
Vehicle Expenses
Maintenance - Vehicle 7400 31,218 86,750 36% 39,399 77,822 51% Gasoline 7401 54,439 107,150 51% 55,732 122,684 45%
Mileage 7411 846 2,600 33% 804 3,193 25%
Total Vehicle Expenses 86,503 196,500 44% 95,935 203,699 47% TRANSFERS/OTHER USES-General Fund
Transfers Out (LLD) 8502 - 51,164 0% - 52,593 0%
Transfers Out -Other 8700 - 3,050,000 0% 900,000 1,220,144 74% Total Transfers - 3,101,164 0% 900,000 1,272,737 71%

TOTAL GENERAL FUND
(General Purpose) 7,259,886 19,414,104 37% 7,642,708 15,873,155 48% Add-On Sales Tax Expenditures - Measure L 1/2 Cent
Contractors - - 205,310 397,071 52%
Special Dept Expenses - - 573,454 1,848,473 31%
Total Add-On Sales Tax Expenses - - 778,764 2,245,545 35% Add-On Sales Tax Expenditures - Measure R 1 Cent
Salaries & Benefits / Insurance 117,638 255,062 46% 63,082 191,956 33% Contractors 220,453 527,000 42% 250,444 469,295 53%
Materials & Supplies 8,668 12,600 69% 756 7,465 10%
Special Dept Expenses 1,525,638 3,917,230 39% 1,889,091 1,885,133 100% Vehicle Op Expense 13,189 10,350 127% 5,361 13,426 40%
Total Add-On Sales Tax Expenses 1,885,585 4,722,242 40% 2,208,735 2,567,276 86%

GRAND TOTAL GENERAL FUND
(General purpose + add-on sales tax) 9,145,471 24,136,346 38% 10,630,207 20,685,975 51%

ATTACHMENT C - EXPENDITURES BY TYPE
H.1.c
Packet Pg. 91
Attachment: General Fund Expenditure Summary Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment) City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
00 - Non-Departmental
Other Expenditures
Unemployment Insurance 7081 $ 10,000 1,713 $ $ 8,287
Medical & Dental Insurance 7083 - 678 (678)
Retiree-Med City Portion 7086 5,000 1,836 3,164
Legal Notices 7508 45,000 - 45,000
Contingency 7599 - - -
Interest Expense Debt COP 7802 204,919 204,919 0
Principal - Debt COP 7810 355,000 355,000 -
Transfers Out to LLD Districts 8502 51,164 - 51,164
Transfers Out 8700 3,050,000 - 3,050,000
Total Non-Departmental Expense $ 564,146 $ 3,721,083 $ 3,156,937 15% 10 - City Management
Personnel Services
Salaries & Wages 7055 $ 302,143 130,984 $ 171,159
Accrued General Leave 7063 - - -
Temporary - Other 7079 1,280 - (1,280)
Total Personnel Services 132,264 302,143 169,879 44%
Benefits
Medicare 7080 4,484 1,954 2,530
Worker's Compensation Ins 7082 9,090 7,211 1,879
Medical & Dental Insurance 7083 23,728 10,697 13,031
LTD & Life Insurance 7084 960 364 596
Cash In Lieu 7085 1,142 522 620
Vehicle Allowance 7088 6,000 2,750 3,250
Retirement Plan 7089 48,527 21,041 27,486
Total Benefits 44,539 93,931 49,392 47%
-
Contractors
Systems/Software Support 7135 - - -
Professional Services 7180 93,000 1,669 91,331
Volunteer Center 7181 5,000 1,875 3,125
Printing Costs 7183 2,500 - 2,500
Total Contractors 3,544 100,500 96,956 4%
Materials & Supplies
Supplies - Office 7200 100 41 59
Supplies - General 7203 2,600 686 1,914
Postage 7230 550 287 263
Maintenance - Copier 7292 300 105 195
Cellular Service 7313 500 50 450
Total Materials & Supplies 1,169 4,050 2,881 29%
Special Department Expenses
Communication 7517 4,500 650 3,850
Publicity/Promotion 7545 - - -
Contingency 7599 - - -
Membership & Subscriptions 7700 25,000 9,502 15,498
Training & Conferences 7710 5,000 2,533 2,467
Meetings 7720 150 - 150
Mayor's Conference - Host 7713 - - -
Council Expenses 7719 12,000 4,122 7,878
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 92
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
Indirect Cost Alloc-Building 7896 4,250 4,250 -
Indirect Cost Allocation-IT 7897 10,344 5,544 4,800
Indirect Cost Allocation-Ins. 7898 25,066 25,066 -
Total Special Department Expenses 51,668 86,310 34,642 60% Vehicle Expenses
Mileage 7411 - (14) 14
Total Vehicle Expenses (14) - 14
TOTAL CITY MANAGEMENT $ 233,170 $ 586,934 $ 353,764 40% Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 93
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
12 - City Attorney
Contractors
Attorney - City General 7131 $ 50,362 $ 340,000 $ 289,638 Attorney - City Litigation 7132 60,000 34,197 25,803
Attorney - Billed Services 7133 180,000 20,059 159,941
Attorney - Human Resources 7134 5,000 1,392 3,608
Professional Services 7180 - 510 (510)
Total Contractors 106,520 585,000 478,480 18%
TOTAL CITY ATTORNEY $ 106,520 $ 585,000 $ 478,480 18%
15 - City Clerk
Personnel Services
Salaries & Wages 7055 $ 100,359 $ 206,131 $ 105,772
Overtime 7061 - - -
Temporary - Other 7079 - - -
Total Personnel Services 100,359 206,131 105,772 49%
Benefits
Medicare 7080 3,165 1,558 1,607
Worker's Compensation Ins 7082 5,640 4,474 1,166
Medical & Dental Insurance 7083 2,345 1,075 1,270
LTD & Life Insurance 7084 1,167 421 746
Cash In Lieu 7085 11,398 5,224 6,174
Retirement Plan 7089 34,805 16,594 18,211
Total Benefits 29,347 58,520 29,173 50%
Contractors
Systems/Software Support 7135 13,500 28,280 (14,780)
IT/Network Consulting Services 7176 - 111 (111)
Minutes Contractor 7178 13,000 3,840 9,160
Professional Services 7180 - 50 (50)
Total Contractors 32,281 26,500 (5,781) 122%
Materials & Supplies
Supplies - Office 7200 200 - 200
Supplies - General 7203 800 929 (129)
Postage 7230 500 361 139
Maintenance - Copier 7292 1,000 325 675
Cellular Service 7313 600 42 558
Total Materials & Supplies 1,657 3,100 1,443 53%
Special Department Expenses
Election Costs 7504 - - -
Off-Site Storage 7506 8,000 3,409 4,591
Code/Legal Updates 7507 3,000 - 3,000
Legal Notices 7508 5,000 - 5,000
Publicity / Promotion 7545 500 - 500
Membership & Subscriptions 7700 1,200 460 740
Training & Conferences 7710 1,000 681 319
Indirect Cost Allocation Bldg Svcs 7896 4,180 4,180 -
Indirect Cost Alloc-Info Tech 7897 12,440 9,240 3,200
Indirect Cost Allocation-Ins. 7898 15,551 15,551 -
Total Special Department Expenses 33,521 50,871 17,350 66% Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 94
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
Vehicle Expenses
Mileage 7411 - - -
Total Vehicle Expenses - - -
TOTAL CITY CLERK $ 197,164 $ 345,122 $ 147,958 57%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 95
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
17 - Administrative Services (Finance / Human Resources / Information Tech / General Services) Personnel Services
Salaries & Wages 7055 663,892 310,156 $ 353,736
Leave/Float Holiday Payout 7057 3,000 29,156 (26,156)
Overtime 7061 - - -
Accrued General Leave 7063 - - -
Temporary - Part-Time 7079 - 2,145 (2,145)
Total Personnel Services 341,457 666,892 325,435 51%
Benefits
Medicare 7080 9,589 4,884 4,705
Worker's Compensation Ins 7082 18,059 14,328 3,731
Medical & Dental Insurance 7083 112,497 51,021 61,476
LTD & Life Insurance 7084 3,411 1,198 2,214
Cash In Lieu 7085 - - -
Retiree-Med City Portion 7086 - 284 (284)
Retirement Plan 7089 105,551 55,138 50,413
Total Benefits 126,851 249,107 122,256 51%
Contractors
Systems/Software Support 7135 8,000 3,975 4,025
Audit - General 7138 39,000 8,985 30,015
Professional Services 7180 44,000 16,641 27,359
Total Contractors 29,601 91,000 61,399 33%
Materials & Supplies
Supplies - Office 7200 4,500 671 3,829
Supplies - General 7203 8,000 5,262 2,738
Postage 7230 5,000 2,224 2,776
Maintenance - Copier 7292 1,000 210 790
Cellular Service 7313 1,000 42 958
Administrative Fees 7499 20,000 3,574 16,426
FF&E (less than $5,000) 7998 - - -
Total Materials & Supplies 11,983 39,500 27,517 30%
Special Department Expenses
Payroll/Benefit Fees 7511 3,000 1,122 1,878
Recruitment Expenses 7519 28,000 1,066 26,934
Membership & Subscriptions 7700 1,800 380 1,420
Training & Conferences 7710 2,500 624 1,876
Indirect Cost Allocation Bldg Svcs 7896 4,820 4,820 -
Indirect Cost Alloc-Info Tech 7897 31,900 23,100 8,800
Indirect Cost Allocation-Ins. 7898 49,812 49,812 -
Total Special Department Expenses 80,924 121,832 40,908 66% Vehicle Expenses
Mileage 7411 - - -
Total Vehicle Expenses - - - #DIV/0!
TOTAL ADMINISTRATIVE SERVICES $ 590,816 $ 1,168,331 $ 577,515 51% Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 96
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
20 - Police Services
Personnel Services
Salaries & Wages 7055 70,475 32,534 $ 37,941
Leave Pay-Out 7057 - - -
Overtime 7061 - - -
Temporary - Part-Time 7079 25,000 7,218 17,783
Total Personnel Services 39,752 95,475 55,723 42%
Benefits
Medicare 7080 1,467 630 837
Worker's Compensation Ins 7082 3,343 2,868 475
Medical & Dental Insurance 7083 1,626 745 881
LTD & Life Insurance 7084 433 153 280
Cash In Lieu Medical Ins. 7085 5,699 2,612 3,087
Retirement Plan 7089 12,188 5,623 6,565
Total Benefits 12,632 24,756 12,124 51%
Contractors
Systems/Software Support 7135 60,000 44,876 15,125
Contract Sheriff 7150 3,505,578 1,387,355 2,118,223
Contract Sheriff - CSO 7152 183,000 - 183,000
Contract Sheriff - Overtime 7154 377,303 163,251 214,052 Contract Sheriff - Dispatch 7157 125,000 31,808 93,192
CCC Animal Control Contract 7165 177,455 83,529 93,926
Professional Services 7180 - - -
Total Contractors 1,710,818 4,428,336 2,717,518 39%
Materials & Supplies
Supplies - Office 7200 1,500 2,219 (719)
Supplies - General 7203 10,700 1,336 9,364
Postage 7230 350 303 47
Maintenance - Other Equipment 7291 3,400 157 3,243
Maintenance - Copier 7292 500 - 500
Cellular Service 7313 11,000 5,743 5,257
Administrative Fees 7499 14,500 6,920 7,580
FF&E (less than $5,000) 7998 20,000 - 20,000
FF&E (more than $5,000) 7999 - - -
Total Materials & Supplies 16,678 61,950 45,272 27%
Special Department Expenses
Insurance - Liability 7501 - - -
Investigation Costs 7520 45,000 14,890 30,110
Reserve Program 7528 - - -
Uniforms / Equipment 7541 4,300 - 4,300
Membership & Subscriptions 7700 5,000 4,912 89
Training & Conferences 7710 4,500 1,690 2,810
Indirect Cost Alloc. - Fleet 7895 91,130 91,130 -
Indirect Cost Allocation-Bldg Svcs 7896 15,370 15,370 - Indirect Cost Allocation-IT 7897 38,120 27,720 10,400
Indirect Cost Allocation-Ins. 7898 9,967 9,967 -
Total Special Department Expenses 165,678 213,387 47,709 78% Vehicle Expenses
Maintenance - Vehicle 7400 43,000 25,441 17,559
Gasoline 7401 72,500 34,365 38,135
Mileage 7411 - - -
Total Vehicle Expenses 59,806 115,500 55,694 52%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 97
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
TOTAL POLICE $ 2,005,364 $ 4,939,404 $ 2,934,040 41%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 98
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
35 - Public Works
Personnel Services
Salaries & Wages 7055 1,371,234 549,626 $ 821,608
Comptime Payout 7056 - - -
Leave/Float Holiday Payout 7057 13,250 1,135 12,115
Standby Compensation 7060 18,000 7,308 10,692
Overtime 7061 12,000 1,601 10,399
Temporary - Other 7079 20,800 5,723 15,078
Total Personnel Services 565,393 1,435,284 869,891 39%
Benefits
Medicare 7080 16,953 8,494 8,459
Worker's Compensation Ins 7082 34,156 27,294 6,862
Medical & Dental Insurance 7083 135,914 66,799 69,115
LTD & Life Insurance 7084 6,268 2,312 3,956
Cash In Lieu 7085 21,942 10,057 11,885
Retirement Plan 7089 186,767 88,633 98,134
Total Benefits 203,588 402,000 198,412 51%
Contractors
Systems/Software Support 7135 3,000 2,495 505
Temp Contract Staff 7170 - - -
Contracts (Cost Recovery) 7171 120,000 47,039 72,961
Professional Services 7180 155,000 33,510 121,490
Guardrail Repair / Replace 7188 40,000 - 40,000
Drainage 7191 55,000 16,507 38,493
Hydrauger Cleaning 7192 15,000 - 15,000
Tree Trimming 7196 30,000 - 30,000
Pavement/Shoulder Repair 7198 60,000 - 60,000
Striping/Marking 7199 10,000 - 10,000
Maint. Right-of-Way 7534 12,000 784 11,216
Repairs & Improvements 7540 5,000 - 5,000
Total Contractors 100,334 505,000 404,666 20%
Materials & Supplies
Permit Fees 7129 5,000 - 5,000
Supplies - Office 7200 2,500 1,724 776
Supplies - General 7203 20,000 11,563 8,437
Postage 7230 1,000 574 426
Maintenance - Copier 7292 1,200 346 854
Utilities - Electric 7303 35,000 7,481 27,519
Utilities - Water 7304 3,000 578 2,422
Utilities - Garbage -Landfill 7309 - - -
Cellular Service 7313 5,000 319 4,681
FF&E (less than $5,000) 7998 - - -
Total Materials & Supplies 22,584 72,700 50,116 31%
Special Department Expenses
Legal Notices 7508 - - -
Safety Program Expenses 7515 - - -
Maintenance Signals 7531 - - -
Traffic Control Signs 7532 10,000 5,481 4,519
Street Name Signs 7535 1,500 359 1,141
Uniforms / Equipment 7541 6,000 2,139 3,861
Contingency 7599 250,000 - 250,000
Rental - Equipment 7610 5,000 6,060 (1,060)
Membership & Subscriptions 7700 9,000 3,490 5,510
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 99
Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
Training & Conferences 7710 3,500 258 3,242
Indirect Cost Alloc. - Fleet 7895 31,450 31,450 -
Indirect Cost Allocation-Bldg Svcs 7896 15,700 15,700 - Indirect Cost Allocation-IT 7897 63,800 46,200 17,600
Indirect Cost Allocation-Ins. 7898 94,879 94,879 -
Total Special Department Expenses 206,015 490,829 284,814 42% 35 - Public Works
Vehicle Expenses
Maintenance - Vehicle 7400 40,000 4,531 35,469
Gasoline 7401 30,000 17,707 12,293
Mileage 7411 2,500 860 1,640
Total Vehicle Expenses 23,098 72,500 49,402 32%
TOTAL PUBLIC WORKS $ 1,121,013 $ 2,978,313 $ 1,857,300 38% 40 - Parks & Recreation / Facilities
Personnel Services
Salaries & Wages 7055 909,648 395,820 $ 513,828
Leave/Float Holiday Payout 7057 8,800 - 8,800
Overtime 7061 - 30 (30)
Temporary - Other 7079 160,000 89,879 70,121
Total Personnel Services 485,729 1,078,448 592,719 45%
Benefits
Medicare 7080 13,341 7,091 6,250
Worker's Compensation Ins 7082 27,640 33,694 (6,054)
Medical & Dental Insurance 7083 209,323 81,901 127,422
LTD & Life Insurance 7084 4,899 1,801 3,098
Cash In Lieu 7085 5,697 3,087 2,610
Retirement Plan 7089 146,771 63,607 83,164
Total Benefits 191,181 407,671 216,490 47%
Contractors
Systems/Software Support 7135 33,200 25,875 7,325
Adult Enrichment Instructors 7172 120,000 54,255 65,745 Program Instructors - Youth 7173 450,000 328,892 121,108 Cleaning Services 7179 74,000 32,336 41,664
Professional Services 7180 37,000 7,321 29,679
Graphic Design 7182 25,000 10,545 14,455
Printing Costs 7183 25,000 8,000 17,000
Tree Trimming 7196 50,000 - 50,000
Landscaping 7197 158,500 70,232 88,268
Repairs & Improvements 7540 90,000 32,985 57,015
Total Contractors 570,441 1,062,700 492,259 54%
Materials & Supplies
Supplies - Office 7200 3,000 1,076 1,924
Supplies - General 7203 135,000 73,527 61,473
Postage 7230 2,500 2,500 -
Maintenance - Office Equipment 7290 - 33 (33)
Maintenance - Copier 7292 1,000 330 670
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 100 Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
Maintenance - Building 7297 112,000 89,740 22,260
Maintenance - Fields 7298 30,000 21,804 8,196
Utilities - Gas 7302 15,000 7,412 7,588
Utilities - Electric 7303 135,000 59,064 75,936
Utilities - Water 7304 106,000 74,164 31,836
Utilities - Sewer 7305 8,000 7,989 11
Taxes/Assessments 7310 2,000 1,600 400
Cellular Service 7313 4,000 317 3,683
Administrative Fees 7499 60,000 22,876 37,124
FF&E (less than $5,000) 7998 - 8,000 (8,000)
FF&E (more than $5,000) 7999 - 7,629 (7,629)
Total Materials & Supplies 378,059 613,500 235,441 62%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 101 Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
40 - Parks & Recreation / Facilities
Special Department Expenses
Insurance - Property 7503 - 136 (136)
Uniforms/Equipment 7541 63,600 29,512 34,088
Referees 7543 25,000 21,346 3,655
Teen Activities 7547 - - -
Rental - Equipment 7610 11,000 6,139 4,861
Rental - Transportation 7611 12,000 7,342 4,658
Rental - Rooms/Fields/Pool/Gym 7612 40,000 - 40,000
Membership & Subscriptions 7700 6,500 2,143 4,357
Training & Conferences 7710 3,000 700 2,300
Meetings 7720 - - -
Indirect Cost Alloc-Fleet 7895 6,580 6,580 -
Indirect Cost Allocation-Bldg Svcs 7896 69,040 69,040 - Indirect Cost Allocation-IT 7897 63,800 46,200 17,600
Indirect Cost Allocation-Ins. 7898 117,125 117,125 -
Total Special Department Expenses 306,262 417,645 111,383 73% Vehicle Expenses
Maintenance - Vehicle 7400 3,500 1,100 2,400
Gasoline 7401 4,000 1,940 2,060
Mileage 7411 100 - 100
Total Vehicle Expenses 3,039 7,600 4,561 40%
TOTAL PARKS & REC / FACILITIES $ 1,934,712 $ 3,587,564 $ 1,652,852 54% 47 - Library
Contractors
Systems/Software Support 7135 - - $ -
Cleaning Services 7179 5,500 2,273 3,227
Landscaping 7197 - - -
Repairs & Improvements 7540 7,500 494 7,006
Total Contractors 2,767 13,000 10,233 21%
Materials & Supplies
Supplies - General 7203 750 353 397
Maintenance - Building 7297 8,000 2,948 5,052
Telephone 7300 800 73 727
Utilities - Gas 7302 8,000 3,445 4,555
Utilities - Electric 7303 14,500 7,331 7,169
Utilities - Water 7304 4,000 2,058 1,942
Utilities - Sewer 7305 1,350 7,744 (6,394)
Total Materials & Supplies 23,952 37,400 13,448 64%
Special Department Expenses
Uniforms/Equipment 7541 - 588 (588)
Insurance - Property 7503 3,312 2,762 550
Total Special Department Expenses 3,350 3,312 (38) 101% TOTAL LIBRARY $ 30,069 $ 53,712 $ 23,643 56%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 102 Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended
55 - Planning
Personnel Services
Salaries & Wages 7055 731,732 223,406 $ 508,326
Leave/Float Holiday Payout 7057 8,000 - 8,000
Overtime 7061 3,000 288 2,712
Temporary - Other 7079 41,600 33,745 7,855
Total Personnel Services 257,439 784,332 526,893 33%
Benefits
Medicare 7080 9,886 3,776 6,110
Worker's Compensation Ins 7082 18,072 14,469 3,603
Medical & Dental Insurance 7083 60,318 26,362 33,956
LTD & Life Insurance 7084 3,130 940 2,190
Cash In Lieu 7085 5,699 - 5,699
Retirement Plan 7089 91,317 35,541 55,776
Total Benefits 81,088 188,422 107,334 43%
Contractors
Systems/Software Support 7135 12,500 5,482 7,018
Temp Contract Staff 7170 - - -
Contracts (Cost Recovery) 7171 30,000 688 29,313
Minutes Contractor 7178 - - -
Professional Services 7180 222,000 2,905 219,095
Total Contractors 9,074 264,500 255,426 3%
Materials & Supplies
Supplies - Office 7200 2,500 299 2,201
Supplies - General 7203 2,350 - 2,350
Postage 7230 750 574 176
Maintenance - Office Equipment 7290 - - -
Maintenance - Copier 7292 2,000 346 1,654
Cellular Service 7313 2,500 317 2,183
Administrative Fees 7499 48,000 4,698 43,302
FF&E (Less than $5,000) 7998 - - -
Total Materials & Supplies 6,234 58,100 51,866 11%
Special Department Expenses
Legal Notices 7508 7,000 1,745 5,255
Membership & Subscriptions 7700 3,000 2,355 645
Training & Conferences 7710 7,000 1,617 5,383
Meetings 7720 1,000 - 1,000
Indirect Cost Alloc-Fleet 7895 3,750 3,750 -
Indirect Cost Alloc-Bldg Svcs 7896 16,540 16,540 -
Indirect Cost Allocation-IT 7897 63,800 46,200 17,600
Indirect Cost Allocation-Ins. 7898 50,297 50,297 -
Total Special Department Expenses 122,504 152,387 29,883 80% Vehicle Expenses
Maintenance - Vehicle 7400 250 146 104
Gasoline 7401 650 427 223
Mileage 7411 - - -
Total Vehicle Expenses 574 900 326 64%
TOTAL PLANNING $ 476,913 $ 1,448,641 $ 971,728 33%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 103 Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
General Fund Expenditures By Department
From 7/1/2023 Through 12/31/2023
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
%
Budget
Expended

TOTAL GENERAL FUND
(GENERAL PURPOSE) Includes Transfers $ 7,259,886 $ 19,414,104 $ 12,154,218 37% 7,259,885.71 19,414,104.00
- -

FOR DETAIL SEE ADD-ON TAXES DETAIL SCHEDULE
Measure L Add-On Sales Tax - Fund #105
(Measure L - 1/2 Cent Sales Tax )
TOTAL Measure L Add-On Sales Tax $ - $ - $ - #DIV/0!
Measure R Add-On Sales Tax - Fund #106
(Measure R - 1 Cent Sales Tax )
TOTAL Measure R Add-On Sales Tax $ 1,885,585 $ 4,722,242 $ 2,836,657 40% GRAND TOTAL GENERAL PURPOSE +
ADD-ON SALES TAXES (Measure L &
Measure R)
$ 9,145,471 $ 24,136,346 $ 14,990,875 38%
Expenditure Detail By Department - Attachment D
H.1.d
Packet Pg. 104 Attachment: General Fund Expenditure by Department Jul-Dec (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget City of Orinda
Detail Add-On Tax Expenditures (Measure L and R Sales Tax) From 7/1/2022 Through 12/31/2022
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
% Budget
Expended
Add-On Sales Tax - Fund #105 (measure L Discontinued Revenue 4/1/21) Contractors
Design Contracts 7125 - - -
Project/Construction Manage 7126 - - -
Permit Fees 7129 - - -
Professional Services 7180 - - -
Total Contrators Expenses - - -
Materials & Supplies
Supplies 7130 - - -
Total Materials & Supplies - - -
Special Department Expenses
Construction Costs 7127 - - -
Legal Notices 7508 - - -
Total Special Department Expenses - - -
GRAND TOTAL MEASRE L (1/2 Cent Tax) - - -
Add-On Sales Tax Detail - Attachment E
H.1.e
Packet Pg. 105 Attachment: Detail Add-On Tax Expenditures (Measure L and R Sales Tax) (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year City of Orinda
Detail Add-On Tax Expenditures (Measure L and R Sales Tax) From 7/1/2022 Through 12/31/2022
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
% Budget
Expended
Add-On Sales Tax - Fund #106 (Measure R )
City Manager Dept
Sr. Admin Analyst Allocated Costs
Salaries & Wages 7055 $ 92,801 $ 201,964 $ 109,163
Medicare 7080 1,414 3,077 1,663
Workers Compensation 7082 1,687 2,126 439
Medical & Dental Insurance 7083 1,014 2,474 1,460
LTD & Life Insurance 7084 419 1,206 787
Cash In Lieu 7085 4,702 10,259 5,557
Retirement 7089 15,601 33,956 18,356
Sub-Total Allocated Staff Expenses 117,638 255,062 137,424 46% Other Non-Staff Expenses In City Mgr Dept
System/Software Support 7135 1,116 5,000 3,884
Minutes Contractor 7178 1,658 6,000 4,343
Professional Services 7180 30,000 60,000 30,000
Graphic Design 7182 - 2,000 2,000
Printing Costs 7183 6,880 600 (6,280)
Supplies - Office 7200 - 2,000 2,000
Supplies - General 7203 - - -
Postage 7230 1,788 4,500 2,712
Cellular Service 7313 - 500 500
Maintenance - Vehicle 7400 1,624 - (1,624)
Mileage 7411 - 350 350
Fire Fuel Reduction Incentive 7514 32,147 390,000 357,853 Communication 7517 382 3,000 2,618
Publicity / Promotion 7545 26,225 100,000 73,775
Contingency 7599 - - -
Training & Conferences 7710 - 3,000 3,000
Meetings 7720 - 1,100 1,100
Indirect Cost Allocation-IT 7897 8,316 8,316 -
Indirect Cost Allocation-Insurance 7898 5,864 5,864 -
Sub-Total Non-Staff Costs City Mgr Dep 115,999 592,230 476,231 20% Total City Mgr Dept Measure R 233,636 847,292 613,656 28% City Attorney
Legal Counsel 7131 - 5,000 5,000
Total Legal City Attorney - 5,000 5,000 0%
Administrative Services - Finance
Sales Tax Services 7180 - 4,000 4,000
Total Administrative Services - 4,000 4,000 0%
Police
Professional Services - Disaster Plan 7180 - 40,000 40,000 Supplies 7203 - 5,000 5,000
Total Police - 45,000 45,000 0%
Public Works
Professional Services 7180 75 - (75)
Hazard Reduction - Chipper Svcs 7186 77,070 125,000 47,930 Tree Trim / Clearance - Right of Way 7196 10,550 40,000 29,450 Disposal - Landfill 7309 10,191 15,000 4,809
Maintenance - Vehicle 7400 7,604 2,500 (5,104)
Mileage 7411 17 - (17)
Gasoline / Fuel 7401 3,943 7,500 3,557
Traffic Control Signs 7532 5,063 25,000 19,937
Rental Equipment 7610 5,800 - (5,800)
Indirect Cost Alloc-Fleet 7895 25,950 25,950 -
Total Public Works 146,264 240,950 94,686 61%
Add-On Sales Tax Detail - Attachment E
H.1.e
Packet Pg. 106 Attachment: Detail Add-On Tax Expenditures (Measure L and R Sales Tax) (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year City of Orinda
Detail Add-On Tax Expenditures (Measure L and R Sales Tax) From 7/1/2022 Through 12/31/2022
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
% Budget
Expended
Parks & Recreation
IT/Network Consulting Services 7176 13,800 - (13,800)
Hazard Reduction - Fire Breaks 7186 29,000 150,000 121,000 Tree Trimming - Parks 7196 41,930 50,000 8,070
Total Parks & Recreation 84,730 200,000 115,270 42%
TOTAL MEASURE R OPERATING BUDGET 464,630 1,342,242 877,612 35% Add-On Sales Tax Detail - Attachment E
H.1.e
Packet Pg. 107 Attachment: Detail Add-On Tax Expenditures (Measure L and R Sales Tax) (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year City of Orinda
Detail Add-On Tax Expenditures (Measure L and R Sales Tax) From 7/1/2022 Through 12/31/2022
FY 2023-24 Actual
July - Dec 2023
FY 2023-24
Budget
YTD Budget
Variance
% Budget
Expended

MEASURE R PROJECTS
#3101 - Orchard SD Repair PL 409 &
513
597 - (597)
#3102 - Ivy SD Repair PL958- 597 - (597)
#4166 - Annual Pavement Rehab - 1,300,000 1,300,000
#4171 - Annual Pavement Rehab 1,273,254 - (1,273,254)
#4186 - Brookwood Rd ROW 845 (845)
#4187 - San Pablo Creek Culvert 5,635 1,750,000 1,744,365 #4197 - Red Flag Day No
ParkingSigns Program (Phase 2)
140,026 295,000 154,974
#5008 - 2024 Annual Stormdrain
Repair (Cat. B)
- 35,000 35,000
#5501 - Housing Element
Sub-Total Projects 1,420,955 3,380,000 1,959,045 42%
GRAND TOTAL MEASURE R EXPENSES $ 1,885,585 $ 4,722,242 $ 2,836,657 40% Add-On Sales Tax Detail - Attachment E
H.1.e
Packet Pg. 108 Attachment: Detail Add-On Tax Expenditures (Measure L and R Sales Tax) (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year

CITY OF ORINDA
BUDGET CHANGE FORM FISCAL YEAR 2023-24
Funds Appropriated Yr 1 of Biennial Budget Adopted 6/20/2023 CHANGE FORM # 004-24
New Appropriations (City Council Approval Required): Budget Transfers:

From Un-Appropriated Reserves From Budgeted Contingent Reserve (Approval Req’d) _ _ Reduction To Adopted Budget Between Departments (City Council Approval Req’d) X Other: Proposed Mid-Year Budget Adjustments

BUDGET ACCOUNT
(Revenue / Expense)
#################(Finance Use Only)###################
Posted By: Date:

REASON FOR BUDGET CHANGE ENTRY: At the City Council meeting on March 12, 2024, the City Council was presented with changes to the adopted Budget as part of the mid-year budget review H.1.f
Packet Pg. 109 Attachment: Budget Adjustment Change Form #004-24 (3325 : Quarterly Financial Report (2nd Qtr FY 2023-24) Mid Year Budget Adjustment) City Council
Staff Report
Agenda Item: H.2
Date: March 12, 2024
Department: Administration
AGENDA TITLE: Follow-Up Report on Inclusionary Housing Ordinance Options RECOMMENDATION:

Receive Report regarding Inclusionary Housing Ordinances, Discuss Key Parameters, and Direct Staff to Prepare an Ordinance for Review and Consideration.

BACKGROUND: On October 3, 2023, staff returned to Council with additional information on inclusionary housing following the Council’s May 5, 2023, initial review.

The October 3, 2023, staff report and attachments, which include that initial staff report and attachments are provided as Attachment 1. The October City Council discussion focused on two areas in which the Council requested additional information. First, the relationship between any City inclusionary ordinance and State Density Bonus Law; and, second, the type and nature of any in-lieu fees that might be considered. In addition, staff will provide additional updates and perspectives on Inclusionary Housing and emerging requirements for cities to offer such a program. In addition, this staff report will touch upon other questions raised. To assist the Council in recalling the points raised, Attachment 2 is an excerpt from the minutes of the October 3, 2023, Council meeting.

DISCUSSION:

In order to assist the Council in its continuing consideration of a possible Inclusionary Housing Ordinance, staff has been able to provide additional resource information, including:
• The previously provided Contra Costa County Collaborative (C4) summary of Contra Costa Inclusionary Housing Programs has been updated and is provided as Attachment 3.
• Under the auspices of ABAG/MTC, a matrix of Inclusionary Housing programs in the nine County Bay Area region is in development. While that effort has not been finalized, we have been provided with the draft matrix for each County, which can serve as a resource, and they are provided as Attachment 4. • The relationship between inclusionary housing programs and State requirements including Density Bonus law, is a topic being navigated by many agencies. The following link takes you to an ABAG presentation which may be of interest:
https://abag.ca.gov/sites/default/files/documents/2023-10/ZFA-Session-4- Presentation.pdf
H.2
Packet Pg. 110
State Density Bonus Law
The City Council’s prior discussion focused on the interaction between State Density Bonus Law and any Inclusionary Ordinance. As previously shared, projects meeting the City’s Inclusionary Ordinance requirements could qualify for the State’s Density Bonus provisions so long as they met those requirements as to affordability level and mix.

Provided below is an excerpt from the staff report for the Vista Verde project here in Orinda as it provides a good background on the State Density Bonus program and one example of how it applied:

Section 7: Density Bonus. As described in detail below, the proposed project takes advantage of the “concession” provisions of California density bonus law (Government Code sections 65915-65918). The applicant is not using the density bonus law to increase density because the project would comply with the allowable density if the proposed general plan and zoning designations are approved by the City Council.

As described by the Department of Housing and Community Development (HCD):
“State law requires jurisdictions to provide density bonuses and development incentives to all developers who propose to construct affordable housing on a sliding scale, where the amount of density bonus and number of incentives vary according to the amount of affordable housing units provided.

Specifically, state law requires the provision of total units to be affordable to lower- and moderate-income households. Under state law, a development of more than five units is eligible to receive density bonuses if it meets at least one of the following:
• Very Low-Income Units: Five percent of the total units of the housing development as target units affordable to very low-income households; or
• Low-Income Units: Ten percent of the total units of the housing development as target units affordable to low-income households; or • Moderate-Income Units: Ten percent of the total units of a newly constructed condominium project or planned development as target units affordable to moderate-income households, provided all the units are offered for purchase; or
• Senior Units: A senior citizen housing development of 35 units or more.

If no density bonus ordinance is adopted by the jurisdiction, a programmatic action must be included to adopt density bonus provisions.” (HCD website)
The proposed project qualifies under the density bonus provisions because 51 of the 52 units would be deed restricted for very-low to moderate income seniors.

H.2
Packet Pg. 111
In addition to allowing added density, state law also requires other incentives for qualifying projects:
“Density Bonus Law incentivizes the construction of affordable housing by allowing a developer to add additional housing units to a project beyond the zoned capacity and secure other “incentives” in exchange for a commitment from the developer to include deed-restricted affordable units in the project.

When a developer meets the requirements of the Density Bonus Law, a local government is obligated to permit increased building density, grant incentives, and waive any conflicting local development standards (e.g., height, parking requirements) unless certain limited exceptions apply.” (HCD website) State law also requires each California jurisdictions to adopt a local ordinance to “comprehensively address all parts of the law (e.g., eligibility, bonus percentages, etc.) or simply indicate that the Density Bonus Law will be implemented directly from State statute.” Orinda’s density bonus provisions are contained in OMC Section 17.4.31 (Affordable housing incentive program and density bonus). This section also contains language that directs the Planning Commission to “make recommendations to the City Council regarding the proposed density bonus and incentive(s) or concession(s).”
Eligibility for Density Bonus and Concessions
The Project is eligible for a density bonus pursuant to State Density Bonus Law based on the percentage of affordable units it will provide (Government Code section 65915 and OMC section 17.4.31). The applicant has not proposed that the Project include any increase in density over the otherwise maximum allowable gross residential density. This is allowed under Government Code section 65915(f). The applicant has instead focused on the concessions available to qualifying projects under State Density Bonus Law. The Project qualifies for three incentives or concessions because it includes at least 24 percent of the total units for lower income households pursuant to Government Code section 65915(d)(2)(C).

The Applicant is seeking the following density bonus concessions:

1. Increase the maximum number of stories from two and a half (2.5) to five (5).

2. Increase the maximum building height from 27 feet to 53 feet.

3. Reduce the amount of private open space required under the RM/SH-O zoning, from 100 square feet to either 63 or 77 square feet, depending on the unit type.

Concessions related to height and story limits
The RM/SH-O zoning at this location includes a height limit of 27 to 35 feet and a story limit of 2.5 stories. The applicant proposes that part of the building in the lower level of the property will have a height of 53 feet and transition from three to five stories. Thus, the applicant has requested two concessions—one to exceed the height limit and one to exceed the story limit. The applicant has H.2
Packet Pg. 112
supported its conclusion that the requested concessions result in identifiable and actual cost reductions to provide for affordable housing costs or rents. Reducing the Project’s height while retaining the same number of units would, according to the applicant, require a larger footprint and would be more expensive than a taller building on a smaller footprint. The builder retained by the applicant described how the larger footprint would require an additional 13,000 square feet of ground floor, and this expansion would add $3,835,000 to the Project budget due to increased grading. Reducing construction costs reduces the overall cost per unit and provides for affordable housing costs or rents. Thus, there is substantial evidence that the requested concessions result in identifiable and actual cost reductions to provide for affordable housing costs or rents.

Concession related to private open space
The RM/SH-O zoning requires 100 square feet of private open space per unit.

The applicant requests a concession to reduce the amount of required private open space to provide just 77 square feet with decks/balconies for the 32 onebedroom units and just 63 square feet with decks/balconies for the 20 twobedroom units. The applicant has supported its conclusion that the requested concession results in identifiable and actual cost reductions to provide for affordable housing costs. The builder retained by the applicant described how the costs to expand the decks and balconies to meet the City’s standard would result in additional costs in the range of $350,000-$450,000 based on the cost of materials. The applicant’s builder also described that increasing the size of the decks and balconies would result in additional costs due to structural impacts of increasing the size of the cantilever to support the balconies. Thus, there is substantial evidence that the requested concession results in identifiable and actual cost reductions to provide for affordable housing costs due to the reduced construction costs.

Findings Required to Deny Concessions
If a concession is justified because it would result in identifiable and actual cost reductions to provide for affordable housing costs, the decision-making body may deny the concession only if it makes one of the following written findings, supported by substantial evidence:

1. That the concession would have an adverse impact on real property listed in the California Register of Historic Resources.

2. That the concession would have a specific, adverse impact upon health or safety, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete.

3. That the concession is contrary to State or Federal law.

In accordance with Government Code section 65915(d)(1), Staff has not identified substantial evidence to support the denial of the requested concessions H.2
Packet Pg. 113
or to support any of the denial findings listed above. Presented with this information, the Planning Commission recommended approval of the project. The findings for approval of the Density Bonus concessions are detailed in Resolution 41-22 (Attachment C).

Staff believes that while there may be overlap, not all projects would elect to take advantage of the State Density Bonus Program, and any Inclusionary Ordinance would ensure that, depending upon the parameters ultimately incorporated, all residential development would contribute towards the provision of affordable housing.

In-Lieu Fees
In-Lieu fees are an increasingly common element in Inclusionary Housing programs in the Bay Area. The threshold to which the fees would apply and if there would be a fractional fee seem to be the main areas in which various programs are differentiated.

The Bay Area wide summary of programs provided from ABAG/MTC provides an additional number of examples which may help to inform the Council’s discussion.

Emerging & Related Issues
Coincidentally with the City’s consideration of a possible Inclusionary Housing Ordinance as called for in the City’s State Certified Housing Element, staff have been engaging with ABAG/MTC on their recently adopted Transit Oriented Development requirements which will apply to Orinda. Not complying with the new TOD provisions would make the City ineligible for regional grants and funds like One Bay Area Grant (OBAG). A summary of the TOD requirements is provided as Attachment 5 which is a PowerPoint presentation MTC staff shared with City staff in a recent meeting about the program and compliance.

The City’s Downtown Precise Plan and Housing Element related proposed rezonings would meet the basic requirements for TOD compliance. However, there are also Housing Supportive Requirements that that City will need to meet for other housing related issues such as affordability and access:

H.2
Packet Pg. 114
Over time, the City will need to adopt at least two programmatic elements in each of the three categories set forth in the TOD policy options. One of these categories, Production, has an inclusionary housing ordinance as the possible means to meet the requirements and the staff’s initial review is that is one of the most feasible options for Orinda. Any Inclusionary Ordinance then must also meet the requirements of the MTC TOD policies to ensure acceptance by MTC. Those requirements include that the inclusionary housing program has a 15% requirement unless specific findings are made.

An excerpt from the MTC adopted TOD policy which provides additional information is provided as Attachment 6. In addition, the inclusionary ordinance must provide for alternative means of compliance, which would include the possibility of in-lieu fees.

During the Council meeting, two other related items were raised:

The first was a point regarding looking to Danville as a successful model. While the basic parameters of the Danville program are summarized in the attachments, staff did reach out to Danville staff to get a high-level sense of how their program operates. The main take-ways for staff from that consultation were the following points:
• The Danville program has been in existence for approximately 30 years; • It is integral to how their community has developed and developers understand the requirement;
• Most projects are subject to a minimum 15% inclusionary requirement; • The program is compatible with the State’s Density Bonus laws.

H.2
Packet Pg. 115
The second point was regarding a need for a program or requirements for retail space to be included in Downtown projects was also identified as being desirable, perhaps structured as an incentive of some type. The adopted Downtown Precise Plan does prioritize ground floor retail, and once that is institutionalized into the City’s zoning code, projects will be obligated to meet those requirements. As noted, it is possible that a mixed-use project taking advantage of the Density Bonus laws could conceivably request a waiver or concession in regard to that requirement. As a previous Matters Initiated approved by the City Council, staff has been looking at options in regard to how such an incentive could be structured, and options will be presented during the future Downtown Precise Plan codification process, staff agree that such an incentive or other approaches which may be identified should be implemented.

Council Direction Sought
As with the prior discussion, following Council review of the additional information provided, if the Council wishes to proceed with the development of a draft inclusionary housing ordinance, staff would be seeking guidance as to the key parameters identified in the May 2, 2023, staff report, which are set forth here again for ease of reference, with Parameter 5 updated from the original staff report per a supplemental communication with that substitute language italicized and one other update also italicized:

Parameters for Consideration

1. Size of development to which the inclusionary housing ordinance would apply.

A high-level review of inclusionary ordinances indicates that 10 units or more is an often-used threshold. The Moraga ordinance exempts projects of 5 units or less from the on-site requirement, though a fractional in-lieu fee is established.

Given the densities contemplated on the opportunity sites in the Downtown and other areas, the 10-unit threshold is what staff would be proposing.

2. Percentage of units required to be set aside as affordable and at what target levels of affordability.

A 10% to 15% level of inclusionary seems to be most common. As an initial target, City staff suggest that 10% would be the desirable target level given we have numerous housing opportunity sites which are slated for affordable housing development. The City is looking to facilitate or encourage the development of housing affordable in three categories – Very Low, Low and Moderate income.

Having projects producing inclusionary units at a mix of 50% Very/Low and 50% Moderate would be recommended. It is anticipated that some sites developed in conjunction with an affordable housing developer would be 100% affordable to the Very Low/Low categories.

H.2
Packet Pg. 116

3. Should the mix of on-site affordable units be proportionate to the unit mix for the market rate components?
While staff anticipates that the affordable units can vary in size and amenity levels from the market rate units, any on-site units should be proportionate to the overall mix of the market rate units. For example, if there are 80 market rates units in a mix of 20 studio, 40 one-bedroom and 20 two-bedroom, the affordable units should match that mix with 2 studios, 4 one-bedroom, and 2 two-bedroom units for a total of 8 units at a 10% requirement. Some flexibility may be desirable, so a factor like a 10% variation could be allowed or some other goal established or required.

5. What, if any, development incentives should be considered? A key consideration of HCD is how an inclusionary ordinance would interact with State laws like the Density Bonus provisions for affordable housing. For instance, under State law, any units required by an inclusionary ordinance that meet State Density Bonus criteria would also count toward Density Bonus provisions such as a concession, waiver and, per the State formula, an increase in allowable density based on the affordability of the units and the overall proportion of affordable units in a housing project.

NEXT STEPS: If so desired, Staff will develop a draft inclusionary ordinance to present to the Planning Commission as the next step in the consideration process.

FISCAL IMPACT: None because of this item. There will be costs both direct and indirect, including staff time needed to develop an inclusionary housing ordinance, and after adoption to further implement and administer the program on an on-going basis.

ATTACHMENTS:

A. Tuesday, October 3, 2023 Inclusionary Housing SR
B. Minutes Excerpt - 10032023
C. C4 Inclusionary Ord In-Lieu Fee Table 10.10.2023 Update D. Attachment 3 - Bay Area Inclusionary Summary Matrixes E. MTC Powerpoint
F. MTC TOD Policies Excerpt - Inclusionary Housing
H.2
Packet Pg. 117
Respectfully Submitted by:

David Biggs
City Manager
Prepared By: Sheri Smith, City Clerk
Approved by:

H.2
Packet Pg. 118
City Council
Staff Report
Agenda Item: H.3
Date: October 3, 2023
Department: Administration
AGENDA TITLE: Follow-Up Report on Inclusionary Housing Ordinance Options RECOMMENDATION:

Receive Report regarding Inclusionary Housing Ordinances, Discuss Key Parameters, and Direct Staff to Prepare an Ordinance for Review and Consideration.

BACKGROUND:

On May 2, 2023, the City Council received a report from staff on the possibility of the development of an inclusionary housing ordinance for future consideration and the parameters of such a draft ordinance. The staff report from that meeting and attachments are included in Attachment A. At that meeting, the City Council asked staff to provide more information on the range of existing inclusionary housing programs in Contra Costa County and to return with information.

Since that time, a Planning Technical Assistance Committee of Contra Costa County Planning staff, operating under the auspices of ABAG called C4, has completed a summary of all existing Contra Costa County inclusionary housing programs. That information is provided in Attachment B.

DISCUSSION:

Following Council review of the additional information provided, if the Council wishes to proceed with the development of a draft inclusionary housing ordinance, staff would be seeking, as with the prior agenda item, guidance as to the key parameters identified in the May 2, 2023, staff report, which are set forth here again for ease of reference:

Parameters for Consideration

1. Size of development to which the inclusionary housing ordinance would apply.

Given the densities contemplated on the opportunity sites in the Downtown and other areas, the 10-unit threshold is what staff would be proposing.

2. Percentage of units required to be set aside as affordable and at what target levels of affordability.

A 10% to 15% level of inclusionary seems to be most common. As an initial target, City staff suggest that 10% would be the desirable target level given we H.3
Packet Pg. 204
H.2.a
Packet Pg. 119 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) have numerous housing opportunity sites that are slated for affordable housing development. The City is looking to facilitate or encourage the development of housing affordable to three categories – Very Low, Low, and Moderate income.

3. Should the mix of on-site affordable units be proportionate to the unit mix for the market rate components?
While staff anticipates that the affordable units can vary in size and amenity levels from the market rate units, any on-site units should be proportionate to the overall mix of the market rate units. For example, if there are 80 market rates units in a mix of 10 studio, 20 one-bedroom and 10 two-bedroom, the affordable units should match that mix with 2 studios, 4 one-bedroom, and 2 two-bedroom units for a total of 8 units at a 10% requirement. Some flexibility may be desirable, so a factor like a 10% variation could be allowed or some other goal established or required.

4. Should an in-lieu fee be considered for projects below the on-site requirement minimum?
An in-lieu fee should be established to ensure all development is contributing to the production of affordable units. There are some broader policy questions such as should the in-lieu fee apply to projects under threshold requiring on-site production of housing like in Moraga where a fractional fee is levied, or are their situations where a developer could “buy” their way out of on-site production by perhaps paying the in-lieu at a higher level, say 150% of the standard in-lieu fee.

This may on occasion also be desirable if the City is working to facilitate housing at the lower income levels with the fees collected being able to help assist in that effort.

5. What, if any, development incentives should be considered? As noted, while many developments are anticipated to utilize the State’s density bonus law for additional density in exchange for providing a level of affordability, they are also entitled under State law to additional concessions and waivers.

H.3
Packet Pg. 205
H.2.a
Packet Pg. 120 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) FISCAL IMPACT: None because of this item. There will be costs both direct and staff time to develop an inclusionary housing ordinance and after adoption to further implement and administer the program on an ongoing basis.

ATTACHMENTS:

A. May 2, 2023 Staff Report with Attachments
B. C4 Summary of Contra Costa County Inclusionary Ordinances Respectfully Submitted by:

David Biggs
City Manager
Prepared By: Sheri Smith, City Clerk
Approved by:

H.3
Packet Pg. 206
H.2.a
Packet Pg. 121 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) City Council
Staff Report
Agenda Item: H.3
Date: May 2, 2023
Department: Administration
AGENDA TITLE: Inclusionary Housing Ordinance
RECOMMENDATION:

Receive Report regarding Inclusionary Housing Ordinances, Discuss Key Parameters, and Direct Staff to Prepare an Ordinance for Review and Consideration.

BACKGROUND: On January 31, 2023, the City Council approved an updated Housing Element for the City’s General Plan. Since that time, the State Department of Housing and Community Development has deemed the City’s Housing Element to be in substantial compliance with State law and our attention has turned to implementation activities. As discussed during the consideration of the Housing Element, one of the first action items which the City Manager and staff committed to bring back for consideration is a possible inclusionary housing ordinance. This report is the first step in that process.

An Action Item on page 222 of the adopted Housing Element regarding an inclusionary ordinance provides:
“Action 3.G: Inclusionary Housing Ordinance. The City will research an inclusionary housing ordinance. This ordinance will identify acceptable methods to provide affordable housing such as: a) construction of housing on- site, b) construction of housing off-site, c) dedication of land for housing, and d) payment of an in-lieu fee. Development of this ordinance requires an analysis of the following variables:
● Limiting the application of the ordinance to developments exceeding a certain size.
● Percentage of housing units required to be set aside as affordable. ● Design and building requirements.
● Timing of affordable unit construction.
● Determination of a fee in lieu of developing affordable units. ● Developer incentives, such as fee deferrals and waivers. ● Administration of affordability control.

Responsible Agency: Planning Department
Timeframe: Determine the appropriateness of an inclusionary ordinance within two years after adoption of the Housing Element. If determined appropriate, adopt an inclusionary ordinance within one year of making the determination.

Funding Source: General Fund
Quantified Objective: 145 lower income units in high opportunity areas to promote access to resources and mobility for target households.” H.3
Packet Pg. 71
H.3.a
Packet Pg. 207 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 122 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) DISCUSSION: Any consideration of an inclusionary ordinance in Orinda should reflect the goals in the recently approved Housing Element and diverse range of tools and programs to be put in place to encourage the development of housing, especially affordable housing including the higher densities to be implemented in parts of the community. It is anticipated that many market-rate developments will take advantage of the bonus density laws which provide for additional density and waivers/concessions in exchange for including affordable housing in new development. As such, the staff has approached the development of an inclusionary ordinance as mainly being the tool to ensure what would otherwise be 100% market projects also do their fair share and contribute towards the provision of affordable units.

Inclusionary housing ordinances have been utilized in many communities across the State for many years. They became more important after the elimination of Redevelopment Agencies in 2011-12 as redevelopment project areas had a mandate that 15% of all housing be affordable, plus 20% of any property tax increment received by a Redevelopment Agency was set aside for affordable housing. It should be noted that Orinda did not have a Redevelopment Agency.

Attached is publication of the Local Government Commission and others from 2018 entitled: Meeting California’s Housing Needs: Best Practices for Inclusionary Housing (Attachment A). While this is slightly dated, it does provide a good overview on inclusionary housing and the main approaches and considerations.

Another resource is the California Coalition for Rural Housing website on which inclusionary housing programs from many jurisdictions across the State are catalogued.

The link below provides access to that website as an additional resource:
https://experience.arcgis.com/experience/ccee391adbe9461cbe32c6b3423939be?org= ucdavis
Welcome to the California Inclusionary Housing Programs Searchable Database, created by the California Coalition for Rural Housing in June 2021. This database includes all of California’s Inclusionary Housing programs and allows stakeholders to filter programs by various characteristics, see where the programs are located within California, and discover and download more detailed information.

Click on the information icon on the Filter Inclusionary Housing label for brief instructions on how to use the database, and see the Inclusionary Housing User Manual for more detailed information.

An additional resource is a publication on from the Western Center on Law and Poverty which is attached: Inclusionary Housing in California – The Legal Landscape (Attachment B). This publication explains some of the legal constraints regarding inclusionary housing and its evolution due to legislation and case law. As discussed in this publication, a few years after we have an inclusionary ordinance in place, the State Department of Housing and Community Development (HCD) will require an economic H.3
Packet Pg. 72
H.3.a
Packet Pg. 208 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 123 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) study demonstrating that the ordinance is not an impediment to new housing construction. In addition, we should be mindful that the legal landscape can change, and a current example is a bill which has been introduced in the State Legislature this year. SB 423 would make, if passed, inclusionary ordinances unenforceable if their income limits don’t match those in SB 35, an existing piece of housing legislation.

Finally, two neighboring communities have local inclusionary ordinance. the Town of Moraga considered and adopted an inclusionary housing ordinance in December of 2022, a very recent local example. The staff report and final adopted ordinance is provided as an additional touchstone (Attachment C). Plus, in conjunction with their new inclusionary housing ordinance, the Town of Moraga has embarked on the establishment of an in-lieu fee for inclusionary units, or fractional units. That staff report and study may also be of interest (Attachment D). The Council may also consider the City of Lafayette’s inclusionary Ordinance which was originally adopted in 2016 and which has been amended since. A summary of the Lafayette Ordinance is excerpted from their Housing Element is provided as Attachment D and the text of the Ordinance is provided as Attachment E. These communities’ inclusionary ordinances can inform the Orinda City Council discussion of options.

Parameters for Consideration
As staff begins work on a draft inclusionary housing ordinance, it would be helpful to get some initial feedback from the City Council on a number of parameters.

1. Size of development to which the inclusionary housing ordinance would apply.

A high-level review of inclusionary ordinances indicates that 10 units or more is a often used threshold. The Moraga ordinance exempts projects of 5 units or less from the on-site requirement, though a fractional in-lieu fee is established. Given the densities contemplated on the opportunity sites in the Downtown and other areas, the 10-unit threshold is what staff would be proposing.

2. Percentage of units required to be set aside as affordable and at what target levels of affordability.

Having projects producing inclusionary units at a mix of 50% Very Low/Low and 50% Moderate would be recommended. It is anticipated that some sites developed in conjunction with an affordable housing developer would be 100% affordable to the Very Low/Low categories.

3. Should the mix of on-site affordable units be proportionate to the unit mix for the market rate components?
H.3
Packet Pg. 73
H.3.a
Packet Pg. 209 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 124 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) While staff anticipates that the affordable units can vary in size and amenity levels from the market rate units, any on-site units should be proportionate to the overall mix of the market rate units. For example, if there are 80 market rates units in a mix of 10 studio, 20 one-bedroom and 10 two-bedroom, the affordable units should match that mix with 2 studios, 4 one-bedroom, and 2 two-bedroom units for a total of 8 units at a 10% requirement. Some flexibility may be desirable, so a factor like a 10% variation could be allowed or some other goal established or required.

4. Should an in-lieu fee be considered for projects below the on-site requirement minimum?
An in-lieu fee should be established to ensure all development is contributing to the production of affordable units. There are some broader policy questions such as should the in-lieu fee apply to projects under threshold requiring on-site production of housing like in Moraga where a fractional fee is levied or are their situations where a developer could “buy” their way out of on-site production by perhaps paying the in-lieu at a higher level, say 150% of the standard in-lieu fee.

This may on occasion also be desirable if the City is working to facilitate housing at the lower income levels with the fees collected being able to help assist in that effort.

While we don’t expect that the City’s inclusionary housing ordinance would be applicable to the projects already taking advantage of the State’s density bonus law, should market rate projects subject to the inclusionary housing ordinance also be afforded some incentives to off-set the cost for providing the affordable units?
NEXT STEPS: Staff will utilize the initial feedback received as part of this agenda item to develop a draft inclusionary ordinance to present to the Planning Commission as the next step in the consideration process. If additional feedback is desirable prior to that step, staff could work with the City Council’s Downtown Planning & Housing Element Subcommittee to refine the proposed components.

FISCAL IMPACT: None because of this item. There will be costs both direct and staff time to develop an inclusionary housing ordinance, and after adoption to further implement and administer the program on an on-going basis.

ATTACHMENTS:

A. Attachment A - Inclusionary Factsheet
H.3
Packet Pg. 74
H.3.a
Packet Pg. 210 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 125 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) B. Attachment B - Inclusionary Housing in California - The Legal Landscape C. Attachment C - Moraga Affordable Housing Ord
D. Attachment D - Moraga Inclusionary Zoning In-Lieu Fee E. Attachment E -Lafayette Inclusionary Program Summary - Excerpt from Housing Element Contraints Analysis
F. Attachment f - Lafayette Inclusionary Ordinance
Respectfully Submitted by:

David Biggs
City Manager
Prepared By: Sheri Smith, City Clerk
Approved by:

H.3
Packet Pg. 75
H.3.a
Packet Pg. 211 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 126 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) I
nclusionary housing is used in hundreds of communities across the country tocreate units that are affordable to lower-income households in new market-rate residential developments. More than 170 cities and counties in California have used inclusionary-housing policies to help address affordable-housing needs while advancing equitable-development goals.

Inclusionary policies capture some of the value of rising real-estate prices to provide community benefits byusing local land-use controls to ensure that muchneeded affordable-housing units are produced along with market-rate units and that the limited supply of developable land is put to work in a way that serves households atall income levels.

Inclusionary housing – also referred to as “inclusionary zoning”– is a flexible tool that can be tailored to local circumstances. There is no one “model” inclusionary-housing policy, but rather a number of best practices to consider when adopting or amending an ordinance.

This factsheet explores the range of policy options to consider when designing a local inclusionary ordinance and highlights best practices that maximize community benefits and fulfill policy goals.

An inclusionary-housing ordinance is one part of an equitable-development strategy, and should not be viewed as the sole way to address affordable-housing needs. In most communities, building the needed amount of housing for lower-income families will still require public subsidies and must be integrated with other strategies.

Following a period of legal
uncertainty around inclusionary
ordinances, a 2015 Supreme
Court decision affirmed city
and county authority to impose
inclusionary requirements
based on local government’s
broad police powers.

And passage of Assembly Bill
1505 in 2017 reinstated the
authority to apply inclusionary
policies for rental housing.

Meeting California’s Housing Needs:

Best Practices for Inclusionary Housing
■ November 2018
Produced by Local Government Commission,
Western Center on Law and Poverty and
California Rural Legal Assistance Foundation,
with funding from the Climate, Land Use,
and Transportation program of
the Resources Legacy Fund.

H.3.a
Packet Pg. 76
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 212 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 127 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 2 MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING Awell-designed ordinance can generate numerous benefits for communities seeking to increase housing affordability and develop diverse, inclusive neighborhoods. These include:
✦ More choices for lower-income households about where to live. ✦ Reduced opposition to affordable housing by producing affordable units within communities as they develop, not after.
✦ Support for compact infill development, reduced sprawl and achievement of local Regional Housing Needs Assessment
(RHNA) targets for all income levels.
✦ Reduced vehicle miles traveled (VMT) and greenhouse gas emissions byproviding people at all income levels more opportunities to live closer to work and in transit-rich areas.
✦ Ensuring that the entire community benefits from a growing economy.

Public and private investments help create economic growth that raises property values. Inclusionary housing helps capture some of the value created by these investments to ensure that the benefits do not accrue solely to property owners and helps buffer against displacement pressures byensuring that lower-income residents can remain in the community. ✦ Reduced segregation and concentration of poverty.

Benefits of an Inclusionary Housing Ordinance
Keys to a Successful Ordinance
Adopting a detailed inclusionary ordinance with input from a wide range of community stakeholders is the best method for implementing effective and legally defensible inclusionary requirements.

The ordinance’s language should provide clarity and certainty for the development community, and be structured to realistically achieve its goals. It should be backed by data and research that establishes both the need for the policy and the feasibility of the requirement.

The key elements of a well-crafted inclusionary ordinance include:

1. State the need.

Local governments have broad discretion under the police powergranted by the state constitution to regulate the use of land within their borders, so long as the regulation is reasonably related to advancing the general welfare.

A local inclusionary ordinance, then, should start with a statement of findings related to the need for the policy to improve the community’s well-being.

Most California jurisdictions have a severe shortage of housing units affordable to low- and very low-income households.The need to address that shortage provides a strong basis for inclusionary zoning, as does the need to meet the jurisdiction’s share of the region’s ongoing housing need at the lower-income levels (which is nearly impossible to do with subsidy alone).

Jurisdictions also frequently point to the need to address past patterns of racial and economic segregation in their community,ensure the preservation and development of diverse neighborhoods, meet fair-housing mandates, and make the best use of a limited supply of developable land.

The ordinance should be directly tied to the findings establishing the need for the policy. For example, if the findings cite the shortage of low- and very low-income housing units in the community, then one of the policy’s goals should be to ensure that those units get produced. A well-crafted ordinance will start with findings that support the policy choices reflected in the design of the ordinance.
“Lower-income” households refers to those making 80% or less of area median income (AMI). The term encompasses households that are “low-income” (those making 50-80% of AMI) and “very low-income” (those making less than 50% of AMI).

Mogavero Architects
H.3.a
Packet Pg. 77
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 213 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 128 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options)

2. Get the numbers right: how many, where,
when and for how long?
How many affordable units should be required
and to whom should they be affordable?
An inclusionary ordinance should clearly define how many affordable units must be included in a project and at which income levels. The vast majority of ordinances set the requirement as a percentage of the total number of units in the project, while a few communities use a square-footage metric.

LOW AND VERY-LOW: The requirement will typically be split between lowand very low-income households (for example, 15% of the total are affordable units, with 10% low and 5% very low). Some laws also include a target for extremely low-income households.

MODERATE: Some communities also require moderate-income units, but this should be based on a careful analysis of the market and its ability to serve moderate-income households. If the market is producing moderate-income units on its own, there would be no rationale for having a inclusionary requirement for moderate-income units.

Whatpercentage a community establishes will be dependent on its affordable housing needs, local market conditions, the financial incentives available to developers, and the mix of affordability levels required.

FIXED: Some communities require fixed percentages at each designated income level, whereas others may provide some flexibility (for example, allowing for a lower percentage of inclusionary units overall when the units are provided at a deeper affordability level).

FLEXIBLE: Some jurisdictions structure their inclusionary policies to involve a sliding scale, so that projects that include higher percentages of affordable units also qualify for more incentives, such as greater density increases.

While there may be reasons to build flexibility for the required number of affordable units into an ordinance,too much flexibility can undermine the creation of new housing at the income levels needed most and cannot be produced by the market alone.

Which projects should have to comply with
the inclusionary requirement?
While it may be tempting to carve out various exceptions to an inclusionary requirement, the best practice is to apply the requirement to all housingdevelopment projects throughout a community or the geographic area covered by the policy. This is the best way to ensure that the policy is In California, the requirements in most inclusionary policies adopted so far have fallen within the 10-20% range –
15% being the most common.

MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING 3 implemented equitably and serves the overall goal of ensuring that all neighborhoods – single-family and multi-family, lower-density and higherdensity – incorporate housing options at a range of income levels.

SMALL PROJECTS: Many jurisdictions choose to exempt small projects from complying with an inclusionary requirement. The rationale is often to ensure that smaller development projects are financially feasible. While a smallproject exemption may be well-intended, it can be difficult to reconcile an exemption with the ordinance’s overall goals and create potential legal issues.

It can also be a challenge to settle on a definition of “small”that doesn’t simply encourage projects that come in just under the threshold, thus frustrating the goal of ensuring that all new housing development contributes to meeting the community’s affordable-housing needs.

Rather exempting these projects altogether,a better practice is to provide small projects with the option to pay an in-lieu fee as an alternative tocompliance with on-site production requirements. This is particularly true in areas where a high proportion of development activity occurs on smaller projects.

Should inclusionary requirements be different for
for-sale projects and rental projects?
In most jurisdictions, the most defensible ordinance will be one that imposes an inclusionary requirement equally on rental and for-sale housing. Requirements that treat the two differently may have fairhousing implications and, much like exemptions for small projects, can be challenging to reconcile with the ordinance’s goals.

For example, an ordinance that requires the inclusion of low- and very lowincome units in rental developments, but only moderate-income units in for-sale developments, could run counter to the goal of ensuring that all neighborhoods have a mix of housing at all income levels in cities where rental and for-sale development generally happen in different neighborhoods.

Furthermore,depending on local demographics, such policies may lead to disparate impacts on certain protected classes,potentially violating legal requirements. In weighing whether to impose the same or different requirements on rental and for-sale housing, it’s crucial to consult with an attorney with expertise in fair-housing laws.

RENTAL/FOR-SALE MIX: One way to maximize the production of affordable units and increase flexibility is to allow developers of single-family projects the option of meeting the inclusionary requirement by including affordable multi-family rental units within the development rather than affordable for-sale, single-family homes.

However, this option should be crafted carefully to ensure consistency with the ordinance’s overall goals and fair-housing obligations. Rental units can generally be produced more cost-effectively than for-sale units, so this option should reflect that by requiring that a higher percentage of rental units be produced.

H.3.a
Packet Pg. 78
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 214 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 129 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 4 MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING Under California law, if the inclusionary requirement is adopted through a program in the jurisdiction’s housing element, the program must provide developers with this option. However, nothing requires a jurisdiction to adopt an inclusionary requirement through its housing element, and this approach is not ideal.

Should inclusionary requirements be structured
differently in different neighborhoods?
Inclusionary requirements most typically apply jurisdiction-wide. While different neighborhoods within a city may have differing development markets, a well-designed policy already adjusts for those differences.

For example, in a neighborhood where the development market is especially hot and land costs are high, the value of an increase in allowable density is also much higher, making a higher inclusionary requirement feasible.

SPECIFIC PLANS: However, in large cities, it may make sense to consider areaspecific increases in an inclusionary requirement because some parts of town may be much hotter development markets than others. An effective way to accomplish this is through the adoption of a specific plan that lays out the land-use controls that apply within a designated geographic area.

TRANSIT AREAS: Some jurisdictions have also crafted specific inclusionary policies that apply to areas adjacent to transit stations, recognizing the wide body of research demonstrating how crucial it is to build affordability into transit-oriented development and the resulting benefits that increase transit ridership, reduce greenhouse gas emissions, and strengthen community stability.

How long should inclusionary units remain
affordable?
Given the time and resources that go into developing housing, an inclusionary ordinance should aim to set the affordability term – how many years a unit must remain “affordable”– for the longest period of time that is feasible.

One important thing to consider in determining the affordability term is the cost of maintaining a unit’s affordability over time compared to the cost of having to provide a new affordable unit to replace it when the deed-restriction period ends. In most cases, the former will be far more cost-effective than the latter.

BUILDING WEALTH: One advantage of homeownership is the ability to build wealth through the ownership of an appreciable asset. Strict resale controls that require the home to be resold at an affordable price to another lowincome homeowner significantly restrict the wealth-building advantages of homeownership.On the other hand, the program should protect against the owner of a for-sale inclusionary home quickly reselling the home at a significant profit.

SHARING EQUITY: The most common way of balancing these interests is an equity-sharing policy in which any appreciation is split between the selling homeowner and the jurisdiction. The jurisdiction then uses its share to assist in future homeownership opportunities for low-income buyers.

Some policies have initial limits on resale (such as 10 years) that require the home to be resold only to a low-income buyer at an affordable price during that period.

Other ordinances have a sliding-scale, equity-sharing provision that states that no proceeds to a homeowner who sells during the initial years, but provides a greater share of the proceeds to the homeowner closer toward the end of the 45-year term.

Should the inclusionary requirement change
over time?
Housing markets are constantly changing, and it would be a challenge to amend an inclusionary requirement in response to every rise and dip in local conditions. However, building in a set review period can be useful for a number of reasons. Periodic review can help determine whether the percentage of units required remains appropriate for local conditions so that the community is not losing out on affordable units that could feasibly be achieved with a higher inclusionary requirement.

It can also help in assessing whether changes to income targeting are necessary. For example, if a community has steadily produced low-income units but not very low-income units, it may be necessary to increase the percentage of very low-income units required by the ordinance and adjust available incentives accordingly to account for the higher cost of providing these units. Every five years is a reasonable review period.

SYNC WITH HOUSING ELEMENT: Another option is to review the ordinance concurrent with the housing-element adoption process every eight years. (While most local jurisdictions in California must update their housing element every eight years, some rural jurisdictions remain on a five-year cycle.) For rental units, 55 years is a common affordability term required by many affordable-housing funding programs in California. An inclusionary ordinance should require at least as long a period, although it’s not uncommon for jurisdictions to require longer periods – or even to mandate that inclusionary rental units be deed restricted in perpetuity, as West Hollywood does.

The typical term with for-sale units is 45 years. Affordability restrictions for these units present some additional policy considerations about the sale of the home during the affordability term.

H.3.a
Packet Pg. 79
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 215 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 130 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING 5

3. Couple with incentives and concessions.

From both a legal and a practical standpoint, an inclusionary-housing policy should include incentives and concessions for developers to help offset the cost of providing the affordable units. Common concessions and incentives include:
✦ Density increases, including the option of greater density increases in exchange for higher percentages of affordable units. ✦ Waivers of development standards, such as height and setback requirements.
✦ Reduction in or a waiver of minimum parking requirements, especially for projects located in transit areas.
✦ Expedited permit processing or ministerial approval.
✦ Waiver, reduction or deferral of development fees, either on the inclusionary units or the entire project.
✦ Direct financial subsidies.

California law requires that developers who comply with an on-site inclusionary requirement that meets the affordable-housing requirements of the state Density Bonus Law must receive all of the benefits to which they are entitled under that law. These benefits include a density increase, concessions and incentives, waivers of development standards and reduced parking requirements. For example, a project that includes 20% of units affordable to low-income households is entitled to a 35% density bonus, two concessions or incentives and various other benefits provided under the state law.

4. Establish clear development standards.

In addition to specifying the percentage of affordable units and at which income levels, an ordinance should establish clear standards for the inclusionary units. Among such best practices:
✦ The affordable units must be indistinguishable from the market-rate units in the development, at least outwardly.
✦ The project includes a similar mix of unit types. For example, if a multifamily rental development will have an equal number of 1-, 2- and 3-bedroom units, the affordable units should also incorporate an equal mix of 1-, 2- and 3-bedroom units. Many ordinances also require that inclusionary units be the same square footage as the market-rate units, although in some cases jurisdictions have built in flexibility to reduce square footage while including the same number of bedrooms to reduce project costs.
✦ Inclusionary units must be located throughout the development rather than clustered in one area.
✦ Residents of the affordable units must have access to all amenities – such as a pool, a fitness center and parking – that market-rate residents have.
✦ The affordable units must be completed either prior to or concurrent with the market-rate units, and prior to issuance of a certificate of occupancy.

ACCESSORY DWELLING UNITS: For single-family for-sale developments, some jurisdictions have allowed accessory dwelling units (ADUs) as a way tofulfill an inclusionary requirement. This is not considered a best practice and should be avoided. While cities and counties should encourage the construction of ADUs, which can be a land- and cost-efficient way of expanding a community’s housing supply, they are problematic from an inclusionary standpoint.

ADUs are readily distinguishable from the other units in a for-sale development, and may raise equity and fair-housing concerns if used as the means for achieving compliance with an inclusionary policy.

ADUs are also typically studios or 1-bedrooms rather than a match of the bedroom mix of the primary development, and are often designed as “micro” or “efficiency” units without similar amenities as the primary development.

They are challenging to deed-restrict and monitor, and are unlikely to provide the long-term affordability that an inclusionary ordinance should require.

Mogavero Architects
H.3.a
Packet Pg. 80
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 216 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 131 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 6 MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING If properly designed, an in-lieu fee option can have advantages in certain jurisdictions. In-lieu fees can enable a jurisdiction to leverage state and federal funds that may not have otherwise been available, allowing for more affordable units to be built than would have been created on-site.

IN-LIEU ADVANTAGES: It can also provide flexibility to produce needed units that the inclusionary requirement is not producing, such as extremely lowincome units; use funds to preserve existing affordable housing with expiring deed restrictions; produce rental units in places where the inclusionary requirement is primarily creating for-sale units (or vice versa); or develop affordable units in parts of the city where development isn’t happening and thus the inclusionary requirement is having no impact.

If allowed, the fee amount should be set at a level comparable to the cost of producing a similar unit to the one that otherwise would have been provided on-site. One of the most common methods for determining the fee amount is to base it on the gap between the affordable-housing and market-rate costs. For example, if it costs $300,000 to produce a low-income unit but the rent only covers the financing on $230,000, then the in-lieu fee would be set at $70,000 to cover the difference.

The amount of an in-lieu fee will need to change over time to reflect changes in construction costs, inflation and other market factors. Therefore, it is better to put the formula for determining the fee amount into an ordinance rather than state the amount itself,since amending an ordinance on a regular basis can be time-consuming, costly and potentially controversial.

ADJUSTING THE FEE: The ordinance should specify the mechanism for adjusting the fee over time, such as tying it to increases in the local Construction Cost Index, as San Francisco does. If an ordinance distinguishes between rental and for-sale units in its inclusionary requirements, in-lieu fees should also be distinguished in the same manner to ensure they are an adequate substitute for the provision of on-site units.

Off-site construction
Allowing construction of inclusionary units off-site can have advantages.

For example, a developer may be able to build affordable units more costeffectively off-site, thus enabling more units to be produced. However, there are also pitfalls that jurisdictions should work to avoid.

5. Provide alternative methods of compliance.

Because one of the primary goals of an inclusionary requirement is to make affordable units available in all housing developments, ordinances should require on-site construction of the inclusionary units to the maximum extent possible. However, most jurisdictions have chosen to allow alternatives to on-site production of inclusionary units under certain circumstances.

In California,state law requires that alternative methods of compliance be provided to developers of inclusionary rental housing,although what those alternatives are, and when each alternative is available, is left up to individual jurisdictions. The law doesn’t require alternatives for developers of forsale housing. Common alternatives include in-lieu fees, off-site construction, land donation, and the acquisition and rehabilitation of existing units.

When weighing how to offer to provide some flexibility, alternatives should be appropriately limited to maximize on-site construction. Alternatives should be available where on-site production of units is less feasible, rather than as a default option for all developments. Common mistakes that can lead to inadequate production of actual housing units include setting in-lieu fees too low and failing to establish adequate standards for land donation.

Timing is also a crucial factor in the structure of alternatives. For example, some jurisdictions have required that off-site inclusionary units be completed concurrent with or prior to the development that triggered the inclusionary requirement, or before a certificate of occupancy for that development is issued. Ideally, alternatives should be used only when they will lead to the production of more affordable units than would otherwise be provided on-site, while still being consistent with the ordinance’s other goals.

In-lieu fees
One common alternative is in-lieu fees, which are paid instead of constructing the required affordable units. In-lieu fees are generally paid into a local affordable-housing trust fund that finances the construction of affordable housing at other locations within the community. Of all the alternatives, in-lieu fees provide the greatest challenge to achieving inclusionary goals and therefore should be considered carefully and sparingly.

Unlike off-site construction and land-dedication alternatives, in-lieu fees don’t guarantee a site for the construction of the affordable units. If the amount of the fee is not sufficiently high, the payment may also not produce enough revenue to help produce new affordable units. Without adequate funding and identified locations for their use, the fee revenue could sit unused.

TRUE COST: Furthermore, if in-lieu fees don’t reflect the true cost of producing on-site units, this may drive most developers to opt for paying the fee rather than producing an affordable unit on-site. Over time, this can frustrate the policy and lead to an insufficient proportion of affordable units being developed.

H.3.a
Packet Pg. 81
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 217 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 132 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING 7 One important consideration with off-site construction is the allowable geography – how far from the development site. Given that the inclusionary requirement seeks to foster mixed-income neighborhoods and reduce segregation, even if inclusionary units can’t be produced on-site in a new development, they should be produced nearby. In cases where that isn’t possible, the jurisdiction should ensure that they are dispersed equitably throughout the community and not clustered in lower-income neighborhoods.

Jurisdictions also typically require more units to be built off-site than would be required on-site. This means the value of the cost savings over on-site construction is captured and translated into a community benefit, and that the policy properly expresses an appropriate preference for on-site units.

Ensuring on-site and off-site construction have similar costs incentivizes on-site construction (which should be the norm), while still providing a meaningful alternative for those projects that can’t feasibly accommodate on-site affordable units.

Another best practice is to require that the off-site units be constructed before or concurrent with the market-rate units,which can be achieved byhaving the off-site units finished before building permits are issued for the market-rate development site. That way an off-site alternative doesn’t simply become an escape hatch to avoid complying with the site’s inclusionary requirement.

Land donation
Land donation can be a useful option where affordable-housing developers have difficulty finding building sites. Paired with in-lieu fees or other sources of affordable-housing funding,dedicated land can be used to produce needed types of housing that might not otherwise get built,such as homes for people with special needs or permanent supportive housing.

However, jurisdictions must establish clear parameters for exercising this alternative. Donated land should be equivalent or greater in value to the affordable units that otherwise would have been produced on-site, and should be ready for development at the time it is donated. It is also important here to consider the allowable geography to make sure that the required affordable units are not concentrated in certain neighborhoods.

6. Include procedure for requesting waivers
or reductions.

An inclusionary requirement may not withstand legal scrutiny if it doesn’t include a process by which a developer can request a waiver or reduction of the requirement. Much like the inclusionary requirement itself,the waiver process should be as clear and specific as possible,detailing both the procedures for requesting the waiver – process, timeline, appeal procedure – and the standards by which the request will be evaluated.

The waiver or reduction process should be carefully structured so that it functions as the exception and not the rule, and is only used in rare cases.

The City of Napa’s inclusionary requirement withstood a constitutional challenge in part because it included a waiver-request provision. The City used a constitutional test todetermine whether a waiver would be approved, under which the developer had to show that the requirement as applied would be unconstitutional.

Other jurisdictions apply a hardship standard,allowing for a waiver or reduction if the developer can show that the requirement would deprive them of all economically viable use of the land. An economic-hardship standard should not be about the level of profit, but about whether any profit can be made.

Feasibility Studies
While not required by state law in California, preparing a feasibility study in support of an inclusionary requirement helps ensure that the requirement is right-sized for local conditions. It’s important not to set an inclusionary requirement so high that it stops development, and equally crucial not to set it too low and miss out on affordable units.

A feasibility study is an opportunity to analyze local market conditions and the economics and tradeoffs of various policy options – affordability percentages and levels, incentives – to make sure the ordinance delivers the number and type of affordable units that a community needs.

It also provides a data-driven foundation for the requirement, which can help overcome opposition by showing that it can be implemented without impeding the developers’ability to earn a profit.

The California Department of Housing and Community Development generally requires local jurisdictions to analyze inclusionary requirements as a potential constraint on development in their housing elements. A feasibility study can help demonstrate that the requirement isn’t a barrier.

NEXUS STUDIES: Feasibility studies should not be confused with nexus studies. A jurisdiction must prepare a nexus study to impose an exaction.

A nexus study would be required if a jurisdiction wanted to adopt a commercial linkage fee, for example, where it must show that the amount of the fee is roughly proportional to the need for affordable housing generated by new commercial development.

An inclusionary requirement is not an exaction but rather a land-use regulation, much like a density requirement or a height restriction, and need only be related to advancing a legitimate purpose. A nexus study is not required when adopting a traditional inclusionary ordinance.

For more information about the preparation of feasibility studies for inclusionary studies: inclusionaryhousing.org/resources/#feasibility H.3.a
Packet Pg. 82
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 218 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 133 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 8 MEETING CALIFORNIA’S HOUSING NEEDS: BEST PRACTICES FOR INCLUSIONARY HOUSING Some jurisdictions require that tenants move at the end of the lease term as soon as their household income exceeds the income limit for the unit. Others allow a tenant to remain until their household income exceeds the income limit by a set amount or percentage.

The policy should be tied to the cost of market-rate housing in the community and ensure that tenants are aware of requirements and receive adequate notice when they exceed income limits and must vacate the unit. To avoid displacement, consider allowing tenants to stay in a unit after their income exceeds allowable limits but convert that unit rent to market rate. The next comparable unit in the development that becomes vacant would then be offered as affordable to replace that “lost”unit. ✦ State how sales of for-sale units will be handled, including the referral of potential buyers and how funds derived from equity-sharing agreements will be used. Also, if the jurisdiction has an option to purchase a unit upon resale or at the end of the regulatory period, it should have a mechanism in place for handling those options.

A strong monitoring program can have the added benefit of providing clear data about the success of the ordinance. This information can then be used to establish that the inclusionary requirement is not a constraint on development for purposes of the housing-element review process,and for potential future discussions about amendments to the inclusionary requirement.

MORE RESOURCES
✦ inclusionaryhousing.org
✦ lgc.org/advancing-inclusionary-housing-policy
While “inclusionary housing”usually refers to mandatory land-use policies designed to construct affordable housing within market-rate developments, other tools can also capture land value to produce needed affordable units.

Voluntary inclusionary requirements
California has a statewide, voluntary inclusionary method in the form of Density Bonus Law, with which all cities and counties must comply.

Under this law, developers who include affordable units in their projects are entitled to a density increase and other incentives.

Local governments can offer density increases above those specified in the state law in exchange for higher levels of affordability (units for households at the lower AMI levels).

Linkage fees
A linkage fee can be imposed on commercial and residential development togenerate funds for affordable housing. The amount of this fee is set based on the community’s need for affordable housing generated by new development. A growing number of California cities have adopted commercial linkage fees, including Los Angeles, Oakland, Sacramento and San Diego.

While linkage fees can be a crucial revenue source, a linkage fee for affordable housing doesn’t produce the other community-wide benefits of a traditional inclusionary requirement, such as economically integrated neighborhoods, and may also not be as economically valuable. Pairing a commercial linkage fee with a traditional inclusionary requirement is one way for a community to maximize the production of affordable housing while also advancing other important policy goals.

Ad hoc inclusionary requirements
Some jurisdictions have tried to negotiate inclusionary requirements on a project-by-project basis, often on larger projects. These ad hoc requirements are problematic from a legal standpoint and don’t ensure that all new residential development includes housing affordable at a range of income levels.

Other Value-Capture Tools to Produce Affordable Housing in Development

7. Monitor implementation and compliance.

A jurisdiction that chooses to adopt an inclusionary ordinance should be prepared to devote staff time and resources to ongoing monitoring and other administrative tasks needed to implement the ordinance effectively.

In addition to ensuring that deed restrictions and covenants are recorded in time and that affordability is maintained for the required time period, it is important to ensure that units are occupied by households at the appropriate income levels over time and that resale provisions are enforced.

To maximize the program’s effectiveness, a jurisdiction should adopt procedures that:
✦ Establish whether the jurisdiction, property managers or a designated third party will be responsible for verifying tenant or homebuyer eligibility, income recertification and other occupancy factors.

The best practice is to have the jurisdiction perform these tasks, although smaller jurisdictions may find it more cost-effective to pool resources with other neighboring jurisdictions and contract with a third party. Having property managers perform these tasks can prove overly burdensome due to the training required. ✦ Ensure that a list of available units is up-to-date and readily accessible to households in the targeted income categories, and that the list is maintained in a way that ensures compliance with fair-housing obligations. ✦ Determine which qualified applicants (those meeting household-income restrictions) are chosen to rent or buy inclusionary units. ✦ Recertify tenant income annually and determine when a tenant household no longer qualifies for residency in the inclusionary unit.

H.3.a
Packet Pg. 83
Attachment: Attachment A - Inclusionary Factsheet (3098 : Inclusionary Housing Ordinance Options) Packet Pg. 219 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 134 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 1 Inclusionary Housing in California: The Legal Landscape With the signing of 2017’s landmark housing package, California restored local governments’ ability to apply locally adopted inclusionary housing requirements—which generally mandate that private housing developers include affordable units in their projects—to rental housing.
1 The legislation, combined with recent court decisions upholding the validity of local inclusionary requirements, creates a powerful tool for local governments to wield when crafting policies to promote development that benefits all segments of their community.

A Brief History of Inclusionary Housing
Inclusionary housing ordinances in California “were instituted as a response to . . . exclusionary zoning[], to severe shortages of affordable housing combined with a reduction of federal housing subsidies, and to legal pressures in California and New Jersey.”2 Those legal pressures included the seminal lawsuit filed in New Jersey when a group of low-income African-American and Puerto Rican residents sought to build affordable housing in the Township of Mount Laurel, which maintained exclusionary single-family zoning practices. After that group mounted a legal challenge to the township’s exclusionary practices, the Supreme Court of New Jersey declared that municipalities had an “affirmative obligation” to meet their “fair share” of the regional need for low- and moderate-income housing.3 Later, in enforcing its prior decision, the court found that an affirmative obligation to provide housing opportunities for families of all social strata can sometimes only be satisfied though the use of inclusionary policies.
4 These principles became a blueprint for numerous municipalities across the country, including in California, to promote economic and racial integration within their jurisdictions.

California declared an affirmative legal obligation to meet fair share housing requirements in the state Housing Element Law, enacted in 1969.5 Under the law, “[l]ocal and state governments have a responsibility to use the powers vested in them to facilitate the improvement and development of housing to make adequate provision 1 AB 1505 (Bloom), Chapter 376, Statutes of 2017. 2 Barbara Erlich Kautz, In Defense of Inclusionary Zoning: Successfully Creating Affordable Housing, 36 U.S.F. L. REV. 971, 972 (2002). 3 S. Burlington County N.A.A.C.P. et al. v. Township of Mount Laurel, 336 A.2d 713, 727-8. (N.J. 1975) (Mt.

Laurel I). 4 S. Burlington Cnty. N.A.A.C.P. v. Mount Laurel Twp., 456 A.2d 390, 449 (N.J. 1983) (Mt. Laurel II). 5 Cal. Gov't Code §§ 65580 et seq.

H.3.b
Packet Pg. 84
Attachment: Attachment B - Inclusionary Housing in California - The Legal Landscape (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 220 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 135 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 2 for the housing needs of all economic segments of the community.”6 Local jurisdictions that receive federal funding similarly have a duty to reverse the harmful effects of exclusionary zoning under the federal duty to affirmatively further fair housing.7 In addition, California law now requires cities and counties to affirmatively further fair housing in the administration of their housing and community development activities.8 These issues continue to be pressing to this day, and as the New Jersey Supreme Court noted, inclusionary housing policies remain one of the only ways for cities and counties to address them.

The Problem with 2009: Palmer and Patterson
By 2007, over 170 California jurisdictions had adopted inclusionary housing policies, encompassing mandates for rental, for-sale, or a combination of rental and for-sale units.9 Then, in 2009, two Court of Appeal decisions created uncertainty around inclusionary ordinances: Palmer/Sixth St. Properties, L.P. v. City of Los Angeles, 175 Cal.

App. 4th 1396 (2009) and Building Industry Assn. of Central California v. City of Patterson, 171 Cal.App.4th 886 (2009).

The Palmer Decision
In Palmer/Sixth St. Properties, L.P. v. City of Los Angeles, a developer challenged a mandatory rental inclusionary requirement included in a specific plan governing development in a portion of Los Angeles. He argued that the Costa-Hawkins Rental Housing Act, a law that limits rent control in residential tenancies, prohibited the imposition of mandatory inclusionary policies in rental housing. Costa-Hawkins, in relevant part, states “’[n]otwithstanding any other provision of law,’ all residential landlords may, except in specified situations, ‘establish the initial rental rate for a dwelling or unit.’”10 Though the Legislature never considered or addressed inclusionary ordinances when passing Costa-Hawkins, the Court of Appeal agreed with the developer.11 The court’s decision effectively made invalid local inclusionary requirements imposed on rental housing and any in lieu fees associated with them.

Importantly, local for-sale inclusionary requirements remained valid. 6 Cal. Gov't Code § 65580(d). 7 42 U.S.C. §3608.
8 AB 686 (Santiago), Chapter 958, Statutes of 2018
9 Non-Profit Housing Association of Northern California, Affordable by Choice: Trends in California Inclusionary Housing Programs (2007). 10 Palmer/Sixth St. Properties, L.P. v. City of Los Angeles, 175 Cal. App. 4th 1396, 1410–11, 96 Cal. Rptr. 3d 875, 886 (2009). 11 Id. at 886-87.

H.3.b
Packet Pg. 85
Attachment: Attachment B - Inclusionary Housing in California - The Legal Landscape (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 221 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 136 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 3 The Patterson Decision
In a much narrower holding, another Court of Appeal determined that an in lieu fee associated with the City of Patterson’s inclusionary ordinance was not “‘reasonably justified’ as required by the development agreement for the project at issue unless there [was] a reasonable relationship between the amount of the fee, as increased, and ‘the deleterious public impact of the development.’”12 The court’s decision was based on the language of the development agreement, the unusual formula the city used to determine the in lieu fee, and the failure of the City of Patterson to articulate an alternative formula. The decision created some uncertainty, temporarily, as to what standard of review courts would use when assessing the validity of an inclusionary ordinance, whether applicable to for sale or rental units.

The combination of the Palmer and Patterson decisions created some uncertainty in the landscape of the law applicable to inclusionary housing ordinances for several years.

Fortunately, recent legislation and court decisions have clarified the law and affirmed the continuing validity and importance of such local measures.

Present Opportunities
Two critical changes in the law related to inclusionary housing have occurred in the last several years. First, the California Supreme Court has clarified that the validity of inclusionary housing ordinances should be judged by the traditional standard applicable to a locality’s exercise of its police powers: whether they are “reasonably related to the broad general welfare purposes for which the ordinance was enacted.”13 Second, the Governor signed AB 1505, which reinstated a municipality’s right to apply inclusionary requirements to rental housing.

The CBIA Decision
Two main issues in CBIA v. City of San Jose were: 1) whether San Jose’s local inclusionary ordinance was an unconstitutional exaction as outlined in the United States Supreme Court’s Nollan/Dolan line of cases; and 2) whether the City’s inclusionary ordinance was subject to the San Remo standard that the ordinance be “reasonably related to the impact of a particular development to which the ordinance applies.”14 12 Bldg. Indus. Assn. of Cent. California v. City of Patterson, 171 Cal. App. 4th 886, 898 (2009) (disapproved of by California Bldg. Indus. Assn. v. City of San Jose, 61 Cal. 4th 435 (2015)). 13 California Bldg. Indus. Assn. v. City of San Jose, 61 Cal. 4th 435, 474 (2015). 14 San Remo Hotel v. City and County of San Francisco, 27 Cal.4th 643, 663–664 (2002), relating to the Mitigation Fee Act.

H.3.b
Packet Pg. 86
Attachment: Attachment B - Inclusionary Housing in California - The Legal Landscape (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 222 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 137 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 4 First, the court held that the ordinance was not an exaction. To constitute an exaction, the ordinance would have had to “require a developer to give up a property interest for which the government would have been required to pay just compensation under the takings clause outside of the permit process.” 15 The court reasoned that the law was akin to land use regulations that restrict usage of the property (i.e., setbacks, density requirements, etc.) and price controls (i.e., rent stabilization), which have been held to be constitutional and do not require just compensation. 16 Accordingly, restricting the
amount for which a developer can sell or rent a unit is subject only to the same review as any other land use regulation.

Second, the court held that the city need only show that the ordinance is reasonably related to the broad general welfare purposes for which it was enacted, meaning the San Remo standard did not apply. This decision expressly overturned Patterson “to the extent it indicates that the conditions imposed by an inclusionary housing ordinance are valid only if they are reasonably related to the need for affordable housing attributable to the projects to which the ordinance applies.”17 The court found that the higher standard found in San Remo is intended to apply “to permit conditions that require the payment of monetary fees,” not land use regulations.18 Even more narrowly, the court found that the San Remo standard only applies to development mitigation fees.19 In distinguishing San Remo and overturning Patterson, the court noted that San Jose’s law was passed in order to allow the city to meet its affordable housing goals and to ensure that new economically diverse affordable housing was spread throughout the city. In short, pursuant to CBIA, cities and counties are free to impose inclusionary requirements based on their broad police powers.

The Palmer Fix: AB1505
In 2017, Governor Brown signed the long-awaited Palmer fix, once again allowing municipalities to apply inclusionary requirements to rental housing. However, the fix imposes some new standards for the imposition of those restrictions.

Government Code §65850(g) states that cities may:
“Require, as a condition of the development of residential rental units, that the development include a certain percentage of residential rental units affordable to, and 15 California Bldg. Indus. Assn. v. City of San Jose, 61 Cal. 4th 435, 461 (2015). 16 Id. at 461-464. 17 Id. at 479
18 Id. at 472
19 Id. at 473
H.3.b
Packet Pg. 87
Attachment: Attachment B - Inclusionary Housing in California - The Legal Landscape (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 223 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 138 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 5 occupied by, households with incomes that do not exceed the limits for moderateincome, lower income, very low income, or extremely low income households. . .” This first section reinstates the law as it was prior to Palmer. However, it continues:
“The ordinance shall provide alternative means of compliance that may include, but are not limited to, in-lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units.”
By that language, the fix creates a new requirement that a municipality’s local inclusionary ordinance, as applied to rental housing, must include alternative means of compliance other than the construction of affordable rental units on site in a housing development. While the statute provides examples of alternatives, it does not provide an exhaustive list of what those alternatives could be or when they must be granted, leaving it up to cities and counties to decide. As a practical matter, nearly all inclusionary ordinances adopted in California prior to the passage of AB 1505 had already included alternative means of compliance under certain circumstances.

The second portion of AB 1505 allows the Department of Housing and Community Development (HCD) to review local inclusionary ordinances in specific, limited circumstances. Specifically, Government Code §65850.01 authorizes HCD to review a local inclusionary ordinance if all of the following apply:

1. The ordinance was adopted or amended after September 15, 2017, and no more than 10 years have passed since the adoption or most recent amendment of the ordinance.

2. The ordinance requires that more than 15% of the total units in a residential rental development be affordable to occupants at or below 80% of area median income (i.e, lower-income households).

3. The jurisdiction, according to its annual housing element report, has not met at least 75% of its above-moderate share of the regional housing need over at least a five-year period (prorated based on the length of time within the planning period pursuant to Gov’t Code 65588(f)(1)), or the jurisdiction has not submitted the annual housing element report for at least two consecutive years.

If all of these conditions apply, then HCD may request, and the local jurisdiction must provide within 180 days, an economic feasibility study demonstrating that “the ordinance does not unduly constrain the production of housing.”20 Leaving aside best 20 Gov’t Code §65850.01(b).

H.3.b
Packet Pg. 88
Attachment: Attachment B - Inclusionary Housing in California - The Legal Landscape (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 224 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 139 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 6 practices, the feasibility study is only required if HCD has requested it pursuant to its aforementioned authority; it is not required in order to pass a valid ordinance.

Once a jurisdiction submits a requested economic feasibility analysis, HCD can only review it to determine the following:

1. The preparer of the study is a qualified entity with demonstrated expertise in the area.

2. The study was available on the jurisdiction’s website for at least 30 days and then considered at a regularly scheduled legislative meeting prior to approval.

3. The study was sufficiently rigorous and followed best professional practices.

Importantly, HCD’s authority does not extend to imposing its own analysis of economic feasibility. Once a jurisdiction has submitted the study, HCD has 90 days to determine whether the study meets the requirements described above. If HCD finds that it does not and the jurisdiction disagrees with HCD’s negative determination, it may appeal to the Director of HCD or his or her designee. The Director or designee must then make a decision within 90 days of receipt of the appeal.

If a jurisdiction fails to submit the required feasibility study within 180 days or HCD makes a final determination that the study does not meet the prescribed requirements, the ordinance is still valid. However, until the jurisdiction submits a feasibility study that HCD determines meets the prescribed requirements, it may not impose a requirement to include units affordable to households at 80% of area median income in excess of 15%.

With the resolution of several outstanding legal issues that have clouded the policy choices on inclusionary housing in recent years, local governments once again have clear authority to enact these policies for both rental and for-sale housing. Inclusionary housing policies remain an important local tool for increasing the supply of affordable housing and building equitable, inclusive communities.

For questions, contact:

Brian Augusta, California Rural Legal Assistance Foundation, [email protected]
Navneet Grewal, Western Center on Law and Poverty, [email protected] Anya Lawler, Western Center on Law and Poverty, [email protected] H.3.b
Packet Pg. 89
Attachment: Attachment B - Inclusionary Housing in California - The Legal Landscape (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 225 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 140 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 1 1 2 Meeting Date: December 7, 2022
3 4
5 TOWN OF MORAGA STAFF REPORT
6 7 To: Honorable Mayor and Councilmembers
8 9 From: Afshan Hamid, AICP, Planning Director
10 Barry Miller, FAICP, Planning Consultant
11 12 Subject: Conduct a Public Hearing and Consider Waiving the First Reading and 13 Introducing by Title Only an Ordinance Adding Chapter 8.180 to the 14 Moraga Municipal Code Creating an Affordable Housing Requirement 15 for New Residential Development; and Provide Direction to Staff on 16 the Proposed Development Incentives Policy for Projects Meeting the 17 Town’s Affordable Housing Requirements On-site (California 18 Environmental Quality Act (CEQA) - Exempt Pursuant to CEQA 19 Guidelines Section 15061(b)(3)
20 21 Request
22 23 The Town Council is being asked to consider waiving the first reading and introducing by 24 title only an Ordinance adding Chapter 8.180 to the Moraga Municipal Code creating 25 requirements for affordable housing in new residential development of six units or more. 26 The Planning Commission held a study session on November 7 and conducted a public 27 hearing on November 14, to consider the proposed Chapter 8.180. On November 14, the 28 Commission voted 6-1 in support of a Resolution recommending Council adoption. 29 30 The Council is also being asked to provide direction on the proposed Development 31 Incentives Policy for Projects Meeting the Town’s Affordable Housing Requirements On32 site which is tentatively scheduled for adoption on December 14, 2022. 33 34 Background
35 36 The Town is in the process of undertaking a Comprehensive Advanced Planning Initiative, 37 including a State-mandated update of the Moraga Housing Element, and related General 38 Plan and zoning amendments. As part of the Housing Element, the Town is required to 39 demonstrate to the State Department of Housing and Community Development (HCD) 40 that it has the capacity to add at least 1,118 new housing units by 2031, including 673 41 units that are potentially affordable to lower- and moderate-income households. The 42 1,118-unit assignment is commonly referred to as the Town’s “RHNA”—or Regional 43 Housing Needs Allocation.

Town of Moraga Agenda Item
Public Hearing 8. A.

H.3.c
Packet Pg. 90
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 226 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 141 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 2 1
2 While the Town is proactively rezoning property to accommodate its RHNA, additional 3 measures are needed to ensure that a substantial share of the housing built is actually 4 affordable to lower- and moderate-income households. Without Town intervention, 5 housing developers would likely produce only market rate units on designated housing 6 opportunity sites. Some of these units might meet affordability guidelines for moderate7 income households but few, if any, would be considered affordable to lower-income households.1 8 In the last two Housing Element cycles, the Town did not produce any of 9 the RHNA-required low- or very low-income housing units. HCD has classified Moraga 10 as a “High Resource Area” and is requiring such areas to meet a larger share of the 11 region’s affordable housing needs than they have in the past. 12 13 On November 10, 2022, the Town received the 90-day letter on the Working Draft 14 Housing Element. A common thread throughout the letter is that the Element must 15 demonstrate that the sites identified to meet the Regional Housing Needs Allocation 16 (RHNA) are distributed throughout the community in a manner that Affirmatively Furthers 17 Fair Housing (AFFH). HCD has provided Affirmatively Furthering Fair Housing (AFFH) 18 Guidance for All Public Entities and for Housing Elements, see AFFH link. As of January 19 1, 2019, AB 686 creates a state mandate requiring public agencies and jurisdictions to 20 “take meaningful actions that overcome patterns of segregation and foster inclusive 21 communities free from barriers that restrict access to opportunity based on protected 22 characteristics.” The AFFH Guidance covers a wide range of locally-based solutions for 23 jurisdictions State wide, and also provides Examples of Affirmatively Furthering Fair 24 Housing Actions (page 72). The actions include Housing Mobility Strategies, New 25 Housing Choices and Affordability in Areas of Opportunity, Place-based Strategies to 26 Encourage Community Conservation and Revitalization, Protecting Existing Residents 27 from Displacement.
28 29 One of the tools commonly used and recommended by HCD to ensure that at least some 30 of the units in new developments are “affordable” is inclusionary housing (also called 31 inclusionary zoning). Inclusionary housing ordinances require developers to provide a 32 percentage of new residential units at a price that is considered affordable to very low-, 33 low-, or moderate-income households. The “Inclusionary” units have deed restrictions 34 that limit the rent (or sales price) that may be charged, as well as the annual income of 35 the tenant (or purchaser). Inclusionary Housing is an Affordable Housing tool to help the 36 Town meet its RHNA goal. Over 60 percent of the Town’s RHNA goal is comprised of 37 housing units that are affordable to lower- and moderate-income households. State 38 Density Bonus Law provides an additional tool to meet these targets; however, it is 39 voluntary while the proposed Inclusionary Zoning Ordinance would be mandatory. 40 41 Staff provided an overview on housing implementation tools, including inclusionary 42 housing, at a Joint Planning Commission and Town Council meeting on May 4, 2022. 43 After receiving the report, Council provided direction to staff for a more detailed 1 In 2022, the upper income limit for a “lower income” household was $76,750 for a one-person household, $87,700 for a two-person household, $98,650 for a three-person household, and $109,600 for a four-person household. The equivalent “affordable” monthly housing costs were $1,919 (1 pp), $2,193 (2 pp), $2,466 (3 pp), and $2,740 (4 pp).

For “moderate-income” households, affordable monthly housing costs were $2,999 (1 pp), $3,428 (2 pp), $3,855 (3 pp), and $4,283 (4 pp).

H.3.c
Packet Pg. 91
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 227 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 142 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 3 1 presentation at a future Town Council meeting. On August 24, 2022, staff provided a 2 focused discussion on Inclusionary Housing requesting feedback on policy prior to 3 developing an ordinance. The staff reports for these study sessions provide more context 4 and may be consulted for additional detail. Hyperlinks are provided below:
5 6 • The May 4, 2022 staff report may be accessed here. (see pages 13-18) 7 • The August 24, 2022 staff report may be accessed here. 8 9 The policy areas discussed at the August 24th meeting and the direction provided by 10 Council were as follows:
11 12 • The percentage of units that must be affordable. Council direction was to include 13 a 10% affordability requirement.
14 • The depth of affordability required (i.e., of the BMR units, what percentage need 15 to be very low, low, and moderate?) Council direction was 10% low-income 16 affordability for rental units and 10% moderate affordability for for-sale units. 17 • Exemptions (small projects may be exempt from the ordinance). Council direction 18 was to provide an exemption for projects with five or fewer units. 19 • Treatment of “fractional” units (when the total number of units is multiplied by the 20 percentage requirement, the product is usually not a round number). Council 21 direction was to collect an in-lieu fee for fractional units. 22 • Applicability to rental vs ownership units (most ordinances apply to both). Council 23 direction was to apply the affordable requirement to both rental and ownership 24 units.
25 • Alternatives for developers who wish to meet the requirement without providing the 26 unit(s) on-site (this allowance is required by State law). Council provided direction 27 that the off-site affordable unit requirement should be 50 percent higher than the 28 percent required for on-site construction. Council also provided direction that if the 29 affordable requirement was met through acquisition and rehabilitation of existing 30 multi-family housing, at least two units shall be rehabilitated for each affordable 31 unit required.
32 • Design of inclusionary units (do they need to look the same as the market rate 33 units?) Council provided direction on the following:
34 o The units should be dispersed through the project
35 o The units should be comparable in terms of bedroom count, however, the 36 units may be smaller
37 o The exterior design and character should be consistent with the market rate 38 units
39 o The interior finishes may be different but they must be good quality 40 o The affordable units must have access to all amenities. 41 • Calculation of in-lieu fees. Council directed staff to provide additional information 42 on a recommended methodology.
43 • Length of affordability. Council direction was that for-sale units should be 44 affordable for 45 years, while rental units should be affordable for 55 years.

H.3.c
Packet Pg. 92
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 228 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 143 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 4 1 • Jurisdiction-wide vs applicability in specific areas only. Council direction was that 2 the ordinance should apply townwide.
3 • Incentives that offset the economic impact of the inclusionary units. Council 4 direction was to take into consideration the concerns of developers. 5 6 The Town Council also requested that staff solicit feedback from developers prior to 7 developing an Inclusionary Housing Ordinance. Staff convened a “Developer 8 Roundtable” on October 20 to receive input on potential Inclusionary Housing 9 requirements. A link to the video of the Developer Roundtable can be found here. 10 11 Staff has developed a Draft Affordable Housing Ordinance based on the input and 12 feedback received from Town Council, at the Developer Roundtable, and from 13 stakeholders. The Planning Commission received a presentation on the proposed 14 Affordable Housing Ordinance on November 7. The Planning Commission held a public 15 hearing to consider the proposed Ordinance on November 14, 2022. 16 17 The Commission approved a resolution recommending adoption of the Ordinance by a 18 6:1 vote at its November 14 meeting. Of the six Commissioners voting in favor, three 19 supported the proposed Ordinance “as is” and three supported a modification to avoid 20 encouraging additional housing units in wildland-urban interface areas. The 21 Commission’s specific concern was that the proposal to allow developers in lower-density 22 zones to meet affordable housing requirements through Accessory Dwelling Units (ADUs) 23 would potentially increase the number of households in high fire hazard areas. The 24 Commissioner casting the “no” vote on the Ordinance indicated his support for the 25 concept of inclusionary zoning but expressed that it should apply only in the Town’s two 26 commercial centers.
27 28 On November 16, the Town Council received a briefing on the proposed Ordinance. The 29 following points were raised:
30 31 • The Town Council was generally supportive of Planning Commission direction to avoid 32 creating incentives for additional housing units in wildland-urban interface areas. A 33 distinction was made between the Town’s ADU regulations, which are guided by State 34 law, and the proposed affordable housing provisions, which are set by the Town. 35 • The Council reiterated the desire to ensure the Ordinance is flexible and responsive 36 to the real estate market.
37 • The issue of expanding public awareness of the proposed ordinance and soliciting 38 community input to the extent possible was raised. Staff explained that public input 39 had been solicited at meetings throughout 2022.
40 • The alternative of using market-rate ADUs rather than deed-restricted units (either for41 sale or for-rent) was generally supported. Councilmembers expressed differing views 42 on the proposed alternative, and discussion occurred regarding the 500 square foot 43 minimum, the 25 percent threshold, and the potential applicability of the ADU 44 alternative to higher density districts.
45 46 Local developer and property-owner David Bruzzone spoke at the November 16 meeting 47 and provided correspondence on the Draft Ordinance. Mr. Bruzzone expressed his view 48 that the Affordable Housing requirement should be voluntary rather than mandatory, that H.3.c
Packet Pg. 93
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 229 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 144 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 5 1 there should be no size limit on ADUs for developers using the ADU option, that the ADU 2 option be available in all residential zoning districts, and that the Town allow “banking” or 3 “transfer” of affordable housing credits for developers building market rate housing in one 4 location while providing ADUs in another. Mr. Bruzzone further expressed that fees for 5 fractional units should be required at the time of occupancy rather than Final Map 6 approval or building permit issuance, that the “25 percent ADU option” be reduced to 10 7 percent, and that “off-site alternatives” require the same number of affordable units as the 8 “on-site” requirements. As directed by Council, Staff met with Mr. Bruzzone on November 9 22 to further discuss his concerns about the Ordinance. 10 11 The next section of this report provides an overview of the Draft Ordinance (Attachment 12 “A”). The Ordinance refers to a Policy Resolution (Attachment “B”) which will be adopted 13 by the Town Council separately, rather than as part of the Municipal Code Amendment. 14 The Policy Resolution includes development incentives. Because the incentives require 15 a greater degree of flexibility and potentially amendments in the future, they are not 16 included as part of the proposed Ordinance.
17 18 Discussion
19 20 The proposed Chapter 8.180 (Affordable Housing) is included as Attachment “A” to this 21 Report and is summarized as follows:
22 23 Sections 8.180.010 and .020 indicate the title and purpose of the Ordinance, respectively. 24 The purpose statement explains the importance of the Ordinance to meeting the Town’s 25 RHNA and providing a tool for affirmatively furthering fair housing and creating housing 26 for the Moraga workforce, seniors, students, and other special needs groups in the 27 community.
28 29 Section 8.180.030 provides definitions of key terms used in the Ordinance. All of the 30 terms referenced in the definition appear in later sections of the Ordinance. 31 32 Section 8.180.040 identifies the General Requirements for the program, including the 33 types of projects that are covered (and exemptions), and the percentage of affordable 34 units that are required. Recognizing economic considerations, the Ordinance has 35 different requirements for for-rent and for-sale housing and allows flexibility in the 36 percentages of affordable units to be provided based on the depth of affordability. This 37 section also addresses “fractional” units.
38 39 Section 8.180.050 addresses Administration of the program, including requirements for 40 inclusionary housing plans and agreements. The agreements establish resale restrictions 41 for inclusionary for-sale units, and rental restrictions for rental units, as well as provisions 42 to monitor compliance once units are created. This section also gives the Council the 43 authority to adopt in-lieu fees for fractional units, Very High Fire Hazard Severity Zones 44 and for developers who cannot feasibly provide the inclusionary housing units on-site. 45 The basis for the fee is the gap between the value of a market-rate unit and an affordable 46 unit, which will be established through a future fee resolution. 47 H.3.c
Packet Pg. 94
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 230 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 145 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 6 1 Section 8.180.060 identifies alternative means of compliance. In each case, the Town 2 Council must find that on-site provision of affordable units is infeasible or that greater 3 public benefit will result from the units being off-site. The alternative options include 4 building the units off-site, partnering with a non-profit for off-site construction, acquiring 5 and rehabilitating existing multi-family housing in Moraga and making it affordable, or 6 paying an in-lieu fee. The Ordinance also allows applicants to propose other creative 7 concepts for meeting the requirements of the chapter. 8 9 Section 8.180.070 indicates the standards for inclusionary units. This includes the 10 required length of affordability (45 years if for-sale, 55 years if for-rent), requirements for 11 the design of affordable units, and requirements for timing (i.e., when the inclusionary 12 units become available relative to the market rate units). 13 14 Section 8.180.080 identifies incentives to offset the profit loss associated with limiting 15 rents and sales prices for the inclusionary units. These incentives include fee deferral (at 16 the discretion of the Town Council), density bonuses, and modified development 17 standards that support the development of additional units. The incentives are designed 18 to work in tandem with the State density bonus program. The bonuses and incentives 19 themselves are not quantified in the Municipal Code, but a separate document (to be 20 adopted by Resolution) would establish a schedule for use in future applications. 21 22 Section 8.180.090 provides further detail for applicants who choose to comply with the 23 Inclusionary Ordinance by providing accessory dwelling units (ADUs) rather than deed 24 restricted affordable units. This option is only available to for-sale development in lower25 density zoning districts. Projects choosing this option are not eligible for density bonuses 26 but also are not subject to limitations on occupancy, income, or rent of the ADUs. 27 28 Section 8.180.100 includes provisions for applicants requesting waivers or adjustments 29 to the requirements. These are only available in limited circumstances and are subject 30 to approval by the Town Council. Section 8.180.110 addresses enforcement and includes 31 provisions for appeal.
32 33 The sections below highlight how specific issues are addressed by the proposed 34 Ordinance.
35 36 Exemptions/ Applicability
37 38 The Ordinance would apply to all residential projects with six or more units. Projects with 39 five or fewer units would be exempt. The Ordinance would apply Town-wide, but projects 40 in lower density zones would have the option of meeting the inclusionary requirement 41 through ADUs, as described below.
42 43 Percentage of Units Required and Depth of Affordability 44 45 In rental projects, applicants would meet the requirement by dedicating 10 percent of the 46 units for low-income households. Consistent with the RHNA, low income is defined as 47 80% of areawide median income (AMI) and very low income is defined as 50% of AMI.

H.3.c
Packet Pg. 95
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 231 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 146 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 7 1 “Affordable” rents may represent no more than 30 percent of monthly income for 2 households in these units.
3 4 In for-sale projects, applicants are required to dedicate 10 percent of the units for 5 purchase by moderate income households. However, in zones with densities of R-6 or 6 lower (e.g., R-6, 3 DUA, 2 DUA, 1 DUA, and Rural Residential), developers may meet the 7 requirement by including ADUs in 25 percent of all new housing units. No deed 8 restrictions or occupancy limitations would apply to the ADUs. 9 10 The Ordinance is written in a flexible manner so that developers may propose alternative 11 percentages upon demonstration that they are of equivalent value to the Town. For 12 instance, a developer may propose a smaller inclusionary percentage in a rental project 13 if the inclusionary units serve very low-income households rather than low-income 14 households.
15 16 Fractional Units and In-lieu Fees
17 18 The Ordinance gives the Town Council the authority to adopt an in-lieu fee. The primary 19 purpose of the fee would be to calculate the amount due for fractional units. In other 20 words, if an applicant proposed a 24-unit rental project, they would be required to include 21 2.4 lower income units in their project (or a smaller number of very low-income units 22 equivalent in value). Since dwelling units are counted in whole numbers, the “fractional” 23 remainder would be converted to a fee. The amount of the fee has not been established 24 and would be determined by the Town Council. The basis for the fee is included in the 25 Ordinance. It represents the gap between the market-rate price (sales or rent) and the 26 affordable price (sales or rent) of the inclusionary unit. 27 28 Alternate Means of Compliance
29 30 AB 1505 requires that at least one alternate means of compliance is provided in 31 inclusionary housing ordinances. Some developers may find it infeasible to include 32 affordable units in their projects, and request relief through such alternate means. As 33 noted above, the alternatives are off-site construction, acquisition/rehabilitation of existing 34 units, and partnership with a non-profit developer. In the latter case, the partnership could 35 include land donation and financial assistance to facilitate off-site construction of 36 affordable units. The off-site alternatives require higher ratios of affordable units to 37 market rate units. The goal is to assist the Town in meeting AFFH requirements and 38 prioritize units built on site.
39 40 For off-site construction (or assistance to a non-profit), a ratio of 1.5:1 is applied so that 41 the applicant must build 50% more units than would otherwise be required. For 42 developers choosing acquisition/rehab in lieu of building the units off-site (or assistance 43 to a non-profit for this purpose), the applicant must rehabilitate twice the number of units 44 that would otherwise be required. The higher ratios are intended to disincentivize the 45 alternatives and encourage applicants to build the units on-site. 46 H.3.c
Packet Pg. 96
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 232 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 147 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 8 1 As noted earlier, another alternate means of compliance is provided for lower-density 2 residential projects (R-6 or lower). This refers to the provision to include ADUs in 25 3 percent of the units rather than dedicating deed-restricted affordable units. 4 5 Based on Planning Commission and Town Council input, staff has added a new 6 alternative that provides developers in Very High Fire Hazard Severity Zones with the 7 option to pay an in-lieu fee rather than developing the 10% affordable units. 8 9 The Ordinance also allows developers to propose other “creative concepts” for meeting 10 the intent of the requirement, subject to Town Council approval. 11 12 Length of Affordability
13 14 The Ordinance proposes that for-sale units are deed restricted for 45 years, and for-rent 15 units are deed restricted for 55 years. These affordability terms are consistent with State 16 Density Bonus Law.
17 18 Timing of Construction
19 20 The Ordinance requires inclusionary units to be constructed prior to or concurrently with 21 construction of the market rate units. In general, construction of affordable units may not 22 be deferred to a future date after the market rate units are completed. However, the 23 Ordinance does establish limited opportunities for a deferral of up to three years where 24 an Agreement has been signed between the market-rate developer and an affordable 25 housing developer. This is in response to comments by developers at the roundtable 26 meeting.
27 28 Design
29 30 The Ordinance requires that the inclusionary units be reasonably dispersed around the 31 project, comparable in bedroom count, compatible in exterior design and character, and 32 have access to all amenities in the project. However, inclusionary rental units may be 33 20% smaller than market-rate units, and inclusionary for-sale units may be 30% smaller 34 than market-rate units. The inclusionary units may have different interior finishes than 35 the market rate units, provided they are durable and of high quality. 36 37 Policy Resolution: Development Incentives for Projects Meeting the Town’s Affordable 38 Housing Requirements On-Site
39 40 Attachment “B” to this Staff Report is a Policy Resolution with specific bonuses and 41 incentives available to developers providing inclusionary units on-site. Developers are 42 entitled to the bonuses provided by the State of California under State Density Bonus Law 43 (SDBL), and an additional local bonus that allows construction of 30 to 36 units per acre. 44 Developers are further entitled to incentives comparable to those offered through the 45 SDBL.
46 47 The Policy Resolution is proposed for adoption at the December 14 Council meeting, 48 following the Second Reading of the Ordinance. The incentives can be adopted by H.3.c
Packet Pg. 97
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 233 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 148 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 9 1 resolution rather than by ordinance so that they can be more easily amended in the future. 2 The incentives respond to feedback from the developer roundtable that multi-family 3 projects may not be economically viable at the proposed General Plan and zoning density 4 of 24 units per acre. Additional incentives have been proposed on top of those already 5 allowed by the State, enabling densities of up to 30 units per acre for projects complying 6 with the Ordinance, and up to 36 units per acre for projects providing student or senior 7 housing.
8 9 The incentives would allow some of the provisions of SDBL for lower-income households 10 to apply to projects with affordable housing units serving households earning up to 80 11 percent of AMI. Current SDBL defines low-income households as earning up to 60 12 percent of AMI, so the broader definition (which is consistent with the RHNA definition) 13 would provide an expansion of potential incentives. More specifically, projects meeting 14 the inclusionary requirements on-site would be eligible for the SDBL parking standards, 15 which are lower than the Town’s standards, plus one development incentive, such as 16 reduced setbacks, additional height, or increased lot coverage. 17 18 Next Steps
19 20 The December 7 meeting is the first reading of the Ordinance. A second reading is 21 scheduled for December 14. The Council is scheduled to adopt the Policy Resolution 22 concurrently with the second reading on December 14. The Ordinance will become 23 effective on January 13, 2023, 30 days after the second reading. Once adopted, the 24 effectiveness of the Ordinance and policy resolution will be periodically evaluated, with 25 modifications made as needed based on results.
26 27 The Town Council has retained Keyser Marston, an economics consulting firm, to develop 28 the in-lieu fee/ fractional fee required to implement the Affordable Housing Ordinance. 29 The Council is scheduled to consider a resolution at the January 11, 2023 meeting to 30 adopt the fee.
31 32 CEQA
33 34 The proposed Municipal Code Amendments are exempt from the provisions of the 35 California Environmental Quality Act (CEQA) (Public Resources Code Section 2100, et 36 seq.) pursuant to CEQA Guidelines Section 15061(b)(3). Adoption and implementation 37 of the proposed Ordinance does not constitute a “project” as defined by CEQA because 38 the Ordinance by itself would not result in a direct physical change to the environment or 39 a reasonably foreseeable indirect change.
40 41 The Code Amendments are occurring within the context of a broader planning initiative 42 that is subject to CEQA. A Draft EIR has been prepared for the Comprehensive Advanced 43 Planning Initiative and was published on October 27. The comment period for the 44 Planning Initiative EIR ends on December 12, 2022 at 5:00 p.m. 45 46
H.3.c
Packet Pg. 98
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 234 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 149 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 10 1 Fiscal Impact
2 3 Adoption of affordable housing requirements will require the collection of fees for 4 fractional units. A dedicated Affordable Housing Fund would be created by the Town as 5 a repository for these fees. As they accrue, the fees would be used to support Housing 6 Element programs and potentially provide a supplemental funding source for non-profit 7 affordable housing developers. There would be additional costs associated with 8 administering affordable housing requirements, reviewing affordable housing plans and 9 Agreements, and monitoring compliance with the program. Some of these functions 10 could be carried out by third parties, as the Town has limited staff capacity. 11 12 Recommendations
13 14 1. Find the proposed Municipal Code Amendments to be exempt from CEQA pursuant 15 to CEQA Guidelines Section 15061(b)(3) and Adopt Ordinance ___ Amending the 16 Moraga Municipal Code to create Chapter 8.180 – Affordable Housing (first reading). 17 2. Provide feedback to staff on the proposed Development Incentives Policy for Projects 18 Meeting the Town’s Affordable Housing Requirements On-site. 19 20 Report reviewed by: Cynthia Battenberg, Town Manager 21 Karen Murphy, Assistant Town Attorney
22 23 Attachments:
24 25 A. Draft Ordinance Amending the Moraga Municipal Code to Add Chapter 8.180:
26 Affordable Housing
27 B. Draft Development Incentives Policy for Projects Meeting the Town’s Affordable 28 Housing Requirements On-Site
H.3.c
Packet Pg. 99
Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 235 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 150 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options)

ATTACHMENT A
Draft Ordinance Amending the Moraga Municipal Code to
Add Chapter 8.180: Affordable Housing
H.3.c
Packet Pg. 100 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 236 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 151 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-1 December 7, 2022

BEFORE THE TOWN COUNCIL OF THE TOWN OF MORAGA
In the Matter of:

An Ordinance Adding )
Chapter 8.180 to the Moraga )
Municipal Code to Create an )
Affordable Housing Requirement for )
New Residential Development )
Ordinance No. -2022
Affordable Housing
WHEREAS, the State of California has found that local governments have a responsibility to facilitate the development of housing for all economic segments of the community (Government Code Section 65580(d)); and
WHEREAS, the Regional Housing Needs Allocation (RHNA) assigned to the Town of Moraga by the Association of Bay Area Governments requires that the Town plan for 1,118 units of new housing between 2023 and 2031, including 673 units affordable to very low-, low-, and moderate-income households; and
WHEREAS, the Town of Moraga has not produced a sufficient number of affordable units to meet its RHNA in prior Housing Element cycles; and WHEREAS, the State of California has provided limited funding for affordable housing construction, thereby requiring the private sector to participate in meeting the Town’s RHNA; WHEREAS, the Town currently does not have mechanisms in place to compel developers to include housing affordable to very low-, low-, and moderate-income households in future projects; and
WHEREAS the median sales price of a home in Moraga exceeded $1.5 million in 2022, and the median rent for a two-bedroom apartment was $2,900, prices that are not affordable to lower-income households; and
WHEREAS, the shortage of affordable housing in Moraga has resulted in many households overpaying for their housing, including 23 percent of the town’s renters paying more than 50 percent of their incomes on housing and over 60 percent of the town’s very low-income households paying more than 50 percent of their incomes on housing; and Attachment A: Draft Ordinance.

NOTE: Changes from the version provided on November 16 are identified in redlined text.

H.3.c
Packet Pg. 101 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 237 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 152 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-2 December 7, 2022
WHEREAS, the shortage of affordable housing in the town has also led to insufficient supply of housing for the local workforce and student population, leading to overcrowding in some units, and long commutes as workers seek affordable housing in other communities; and WHEREAS, a stated Goal of the Moraga Housing Element is to achieve a balanced supply of housing for all income groups; and
WHEREAS, legislation adopted in 2017 (AB 1505; Government Code Sections 65850(g) and 65850.01) authorizes cities to adopt inclusionary requirements for rental residential developments, provided that such ordinances provides alternative means of compliance, and the proposed Ordinance provides such alternative means of compliance; and WHEREAS, additional legislation adopted in 2017 (SB 686) requires that every jurisdiction in California affirmatively further fair housing by distributing opportunities for very low-, low-, and moderate-income housing in multiple locations rather than concentrating it in a single location, an outcome that is supported by this Ordinance; and WHEREAS, the Town has drafted a 2023-2031 Housing Element in compliance with State law that includes a program to adopt an Inclusionary Zoning Ordinance; and WHEREAS, the Moraga Town Council convened a public meeting on May 4, 2022 to discuss tools for implementing affordable housing policies and expressed support for an inclusionary housing requirement; and
WHEREAS, the Moraga Town Council convened a public meeting on August 24, 2022 to discuss a framework for inclusionary housing and to provide direction to staff on the specific components of an Ordinance; and
WHEREAS, the Town of Moraga convened a developer roundtable on October 20, 2022 to solicit input from the development community on ways to mitigate the economic effects of an inclusionary housing requirement; and
WHEREAS, the Town finds that the housing shortage for persons of very low, low, and moderate incomes is detrimental to the public health, safety and welfare and that it is a public purpose of the Town, and a public policy of the State of California, to make an adequate supply of housing available for persons of all income groups; and WHEREAS, on November 14, 2022, the Planning Commission held a duly noticed public hearing to consider the proposed amendments related to affordable housing, received the staff report and staff presentation, received comments from the public and interested parties, and after closing the public comments portion discussed the matter; and WHEREAS, following the November 14, 2022 public hearing, the Moraga Planning Commission adopted Resolution No.##-2022, recommending that the Town Council adopt proposed amendments to Town of Moraga Municipal Code to add Chapter 8.180, Affordable Housing, as contained herein; and
WHEREAS, the Town Council received a briefing on the proposed Ordinance at its regularly scheduled meeting on November 16; and
WHEREAS, the Town Council introduced this Ordinance on
H.3.c
Packet Pg. 102 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 238 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 153 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-3 December 7, 2022
December 7, 2022, after a duly noticed public hearing and adopted the Ordinance on December 14, 2022;

NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF MORAGA
DOES ORDAIN AS FOLLOWS:

SECTION 1. The City Council finds that the proposed Municipal Code amendments are exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) in that they do not constitute a “project” as defined by CEQA since they do not have the potential to result in either a direct physical change to the environment or a reasonably foreseeable indirect physical change to the environment.

SECTION 2. Amendment. Title 8 of the Moraga Municipal Code, Planning and Zoning, is hereby amended to add Chapter 8.180 “Affordable Housing” as follows:

CHAPTER 8.180: AFFORDABLE HOUSING

8.180.010 – Title
This chapter shall be entitled the Affordable Housing Ordinance.

8.180.020 - Purpose
The purpose of this Chapter is to establish standards and procedures to facilitate the development and availability of housing for all economic segments of the community, as required by State law. The Chapter is one of several tools to implement the Town’s Housing Element and fulfill the Town’s obligation to provide housing for very low-, low-, and moderateincome households. It is also a tool for providing housing for the Moraga workforce as well as groups with special housing needs such as college students, persons with disabilities, and older adults. This Chapter supports the State mandate to affirmatively further fair housing by ensuring that housing for lower income households is geographically dispersed and not concentrated in a single location within the Town.

8.180.030 - Definitions
For the purposes of this Chapter, the words and phrases below shall be interpreted as set forth in this section, unless it is apparent from the context that a different meaning is intended.
"Accessory Dwelling Unit," or "ADU," is defined in Chapter 8.124.020. “Affordable Housing Agreement” means a legally binding, written agreement between a Developer and the Town, in form and substance satisfactory to the Planning Director and Town Attorney, setting forth those provisions necessary to ensure that the requirements of this Chapter, whether through the provision of Inclusionary Units or through an alternative method, are satisfied.
“Affordable Housing Fund” is a separate fund of the Town into which all monies collected pursuant to this Chapter shall be deposited. Additional monies from other sources also may be deposited in the Affordable Housing Fund.

H.3.c
Packet Pg. 103 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 239 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 154 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-4 December 7, 2022
“Affordable Housing Plan” means a plan demonstrating how an Applicant will comply with the requirements of this Chapter and containing the components listed in Section

8.180.050(B).
“Affordable Rent” means monthly rent and utility allowance, which does not exceed onetwelfth of 30 percent of the maximum annual income for a household of the applicable income level.
“Affordable Sales Price” means a sales price which results in a monthly mortgage (including principal and interest), property taxes, utilities, and homeowner association fees, where applicable, which do not exceed one-twelfth of 35 percent of the maximum annual income for a household of the applicable income level.
“Amenities” means and includes features which are not essential to the health and safety of the resident, but provide visual or aesthetic appeal, or are provided as conveniences rather than as necessities. Interior amenities may include, but are not limited to, fireplaces, garbage disposals, dishwashers, cabinet and storage space and bathrooms in excess of one. Exterior amenities include features such as patios and balconies, and common facilities accessible to a development such as fitness centers, play areas, resident community rooms, gardens, bike storage facilities or similar conveniences provided for residents of the development. Amenities do not include items required by building codes or other ordinances that are necessary to ensure the safety of the building and its residents.
“Applicant” means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which seeks Town real property development permits and approvals.
“Area Median Income” means the Area Median Income for Contra Costa County, adjusted for household size, as published by the State Department of Housing and Community Development.
“Developer” means the same as "Applicant" (see above definition). "Dwelling Unit" means a building of portion thereof that is designed, intended, or used as a home, residence, or sleeping place by one person who maintains a household or by two or more persons who maintain a common household. For purposes of this Chapter, "Dwelling Unit" does not include an Accessory Dwelling Unit. Dwelling Units include “For-Sale Units” and Rental Units” as defined elsewhere in this section.
"For-Sale Units” means a single-family detached Dwelling Unit or a Dwelling Unit in a multifamily Residential Development that will be offered for sale, not for rent. “Fractional Unit” is a numeric equivalent that is less than one Dwelling Unit. It is the product of the affordable housing percentage requirement multiplied by the number of units in a Residential Development and expressed to one decimal point, minus the nearest whole number below that product.
“Household” means one person living alone or two or more persons sharing residency.

H.3.c
Packet Pg. 104 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 240 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 155 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-5 December 7, 2022
“Incentive” means a benefit offered by the Town to facilitate construction of Residential Developments which include Inclusionary Units. Among others, Incentives may include fee reductions for Inclusionary Units, density bonuses beyond State requirements, and flexibility and/or relaxation of development regulations. Incentives are adopted through a Policy Resolution.
“Inclusionary Unit” means a Dwelling Unit developed pursuant to an Affordable Housing Agreement that will be offered For-Sale or rent to Very Low-, Low- and Moderate- Income Households, at an Affordable Rent or Affordable Sales Price, as applicable, pursuant to this Chapter.
“In-Lieu Fee” means a fee paid to the Town by an Applicant for a Residential Development in the Town in lieu of providing the Inclusionary Units required by Section

8.180.040. It includes fees for Fractional Units, as defined in this Section. “Low-Income Household” means a household with an annual income between 50 percent and 80 percent of Area Median Income limits applicable to Contra Costa County, adjusted for household size, as published by the State Department of Housing and Community Development for Contra Costa County.
“Market-Rate Units” mean those Dwelling Units in a Residential Development that are not Inclusionary Units or otherwise subject to deed restrictions and income limits. “Moderate-Income Household,” means a household with an annual income between 80 percent and 120 percent of Area Median Income limits applicable to Contra Costa County, adjusted for household size, as published by the State Department of Housing and Community Development for Contra Costa County.
"Rental Unit" means a single-family detached Dwelling Unit or a Dwelling Unit in a multifamily Residential Development that will be offered for rent, not for sale. “Residential Development” means a development of six (6) or more residential units or lots for, without limitation, detached single family dwellings, multiple dwelling structures, groups of dwellings, condominium conversions, cooperative developments and land subdivisions. “Town” means the Town of Moraga or its designee, or any entity with which the Town contracts with to administer this section.
“Very Low-Income Household” means a household whose income does not exceed 50 percent of the Area Median Income limits applicable to Contra Costa County, adjusted for household size, as published by the State Department of Housing and Community Development for Contra Costa County.

8.180.040 General Requirements
Each Residential Development shall be subject to the requirements set forth in this Section.

Developments with five or fewer Dwelling Units are exempt from this Chapter.

A. For-Rent Residential Developments:
(1) At least ten (10) percent of the Rental Units shall be Inclusionary Units for occupancy by Low-Income Households; or
H.3.c
Packet Pg. 105 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 241 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 156 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-6 December 7, 2022
(2) The Developer may propose alternate percentages of Low- and Very Low-income Rental Units to meet this requirement upon demonstration that they are of equivalent value. Satisfying the requirement with moderate-income Rental Units is not permitted.

B. For-Sale Residential Developments:
(1) At least ten (10) percent of the Dwelling Units shall be Inclusionary Units for occupancy by Moderate-Income Households. These units may be either Rental or For-Sale Units, or a combination of both. Any Rental Units that are provided shall be subject to an agreement prepared by the Applicant and approved by the Town, including provisions ensuring the long-term affordability of the units and their occupancy by a qualifying Household; or
(2) For Residential Developments in zoning districts of R-6 densities or lower, at least 25 percent of the Dwelling Units shall include Accessory Dwelling Units. These units are subject to the provisions defined in Section 8.180.090 and shall have no restrictions on income or occupancy.

C. Incentives, as specified in Section 8.180.080 shall be available to Applicants meeting the inclusionary requirements on-site.

D. Residential Developments with six (6), seven (7), eight (8), or nine (9) units shall have the option of providing one full Inclusionary Unit or paying the In-Lieu Fee in an amount equal to the following schedule for the fractional unit multiplied by the In-Lieu Fee as authorized in Section 8.180.050(D)(4).

Total Units in Project Fractional Inclusionary Unit Required 6 0.20
7 0.40
8 0.60
9 0.80
E. Applicants proposing ten (10) or more units shall calculate the required number of Inclusionary Units. In the event this calculation results in a Fractional Unit, the Developer shall have the option of either: (i) providing a full Inclusionary Unit; or (ii) paying an InLieu Fee in an amount equal to the percentage represented by the fractional unit multiplied by the In-Lieu Fee, as authorized in Section 8.180.050(D)(4).

F. Additional units authorized through a density bonus under California Government Code Section 65915(b)(1) or (b)(2) will not be counted in determining the required number of Inclusionary Units. Inclusionary requirements apply to the initial base number of units proposed.

H.3.c
Packet Pg. 106 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 242 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 157 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-7 December 7, 2022

8.180.050 Administration
A. Applicability. Any Town action approving a Residential Development subject to this Chapter shall contain conditions sufficient to ensure compliance with the provisions of this Chapter. No building permit or final inspection shall be issued, nor any development approval granted which does not meet the requirements of this Chapter.

B. Affordable Housing Plan. Developers subject to the provisions of this Chapter shall prepare a draft Affordable Housing Plan setting forth in detail the manner in which the requirements shall be implemented as part of their development application. No discretionary approval, Town approval or building permit shall be issued until the Affordable Housing Plan has been finalized and approved by the entity approving the underlying approval or permit. The Affordable Housing Plan shall be submitted as part of the initial application and include:
(1) The location, tenure (rental or ownership) and size of the proposed Market-Rate and Inclusionary Units;
(2) The calculations used to determine the number of Inclusionary Units; (3) A floor plan or site plan depicting the location of the Inclusionary Units; (4) The affordability level for each Inclusionary Unit; (5) The term of affordability;
(6) A phasing plan for the Inclusionary Units, in the event the project includes phases; (7) A description and details of any requested density bonuses, Incentives, waivers or exemptions;
(8) The process by which eligibility of qualified Households will be reviewed and selected to rent or purchase affordable units;
(9) An annual reporting schedule; and
(10) Additional information that may be requested by the Planning Director.

C. Affordable Housing Agreement. The Developer shall execute and cause to be recorded an Affordable Housing Agreement with the Town prior to the earlier of the issuance of the first building permit or final map approval. The form of the Affordable Housing Agreement will vary depending on the manner in which the provisions of this Chapter are satisfied for a particular development and whether an Alternative is proposed and approved. All Affordable Housing Agreements for Residential Developments providing Inclusionary Units on-site must include, at a minimum, the following:
(1) Description of the development, including whether the Inclusionary Units will be rented or owner-occupied;
(2) The number, size and location of Very Low-, Low- or Moderate-income Units; (3) Inclusionary Incentives offered by the Town that are being requested, including the nature and amount of any local public funding;
(4) Provisions and/or documents for resale and/ or rental restrictions, rights of first refusal, and/or rental restrictions, and performance deeds of trust, as appropriate; H.3.c
Packet Pg. 107 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 243 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 158 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-8 December 7, 2022
(5) A deed restriction or other enforceable obligation approved by the Town Attorney ensuring the ongoing affordability requirements (this requirement shall not apply to Developers of For-Sale Units using the Accessory Dwelling Unit option described in Section 8.180.90); and
(6) Provisions for monitoring the ongoing affordability of the units and the process for qualifying prospective resident Households for income eligibility.

D. In-Lieu Fees. The Town Council shall, by resolution or other action, establish an Affordable Housing In-Lieu Fee. Fees may be based on a fee per Market-Rate unit, fee per square foot, or any other reasonable basis. The fees may be periodically adjusted based on the annual percentage increase or decrease in the construction cost index since the last update.
(1) For-Sale Units. The fee amount should represent a reasonable portion of the gap between the Affordable Sales Price at the corresponding income level and the Market-Rate sales price of for-sale housing of a similar product type. (2) Rental Units, the fee amount should represent a reasonable portion of the gap between the Affordable Rent at the corresponding income level and the market-rate rent for a similar product type over the lifetime of the affordability term. (3) Affordable Housing Fund. All fees collected shall be deposited in an Affordable Housing Fund. The monies deposited in the Affordable Housing Fund must be used to increase or maintain the supply of housing affordable to very low-, low-, and moderate-income Households, including reasonable administrative or related expenses.
(4) Applicability to Fractional Units. The In-Lieu Fee shall be applied to Fractional Units that result when the inclusionary requirements are applied to Residential Development when the Applicant chooses not to build an additional Inclusionary Unit.
(5) Timing of Payment. Payment of In-Lieu Fees is due as follows:
a. For custom lot subdivisions where lots will be sold and homes will be constructed a future date, the In-Lieu Fee shall be paid at time of Final Map approval.
b. For all other Dwelling Units, the fee shall be paid to prior to building permit issuance for the project.

8.180.060 Alternatives
In lieu of including the Inclusionary Units in the Residential Development pursuant to Section

8.180.040, the requirements of this Chapter may be satisfied through the alternatives listed below. In each case, the Town Council must first find that on-site production of the Inclusionary Units is infeasible or that greater public benefit will result from the proposed alternative.

A. Off-Site Alternatives for Developer. As an alternative to providing all or a portion of the Inclusionary Units on the same site as the Residential Development, the Developer may H.3.c
Packet Pg. 108 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 244 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 159 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-9 December 7, 2022
elect to construct the units off-site elsewhere in the Town of Moraga, subject to the following requirements:
(1) At least 1.5 units shall be provided for each Inclusionary Unit required. (2) The following provisions shall apply to the off-site development:
a. The off-site development shall be governed by the terms of a deed restriction limiting occupancy of the required number of units to qualified Low- or Very LowIncome households and establishing rents meeting affordability criteria for Low or Very Low-Income households.
b. Environmental review shall have been completed, including provisions to mitigate any hazardous materials or geologic conditions, to the satisfaction of the Town . c. If applicable, the off-site units shall include a declaration of covenants, conditions, and restrictions similar to that required for on-site Inclusionary Units. d. Construction of the off-site Inclusionary Units shall be completed prior to the issuance of the first certificate of occupancy of the Residential Development, e. The off-site parcel shall have General Plan and zoning densities equivalent to R6 or higher.

B. Agreement with Non-Profit Developer. As an alternative to providing all or a portion of the Inclusionary Units on the same site as the Residential Development, the Developer may enter into an agreement with a non-profit developer to (i) fund a portion of a proposed affordable housing project in Moraga; or (ii) to provide a land donation for the construction of affordable housing units on an alternative site in the Town of Moraga, subject to the following requirements:
(1) At least 1.5 units shall be provided for each Inclusionary Unit required. (2) The value of the land donation and/or funding shall be approximately equivalent to or greater than the Developer cost associated with Alternative (A) described above. (3) The Developer and the Non-Profit Housing Developer shall enter into a signed written agreement to construct the required Inclusionary Units at the time of project entitlement.
(4) The following provisions shall apply to the off-site residential development:
a. The off-site development shall be governed by the terms of a deed restriction limiting occupancy of the required number of units to qualified Low or Very Lowincome households and establishing rents meeting affordability criteria for Low or Very Low-income households.
b. If applicable, the off-site units shall include a declaration of covenants, conditions and restrictions similar to that required for on-site Inclusionary Units. c. In the event that off-site construction is used, the Affordable Housing Agreement shall include a construction schedule which ensures the off-site units will be available for occupancy concurrently with the Market-Rate Units. Where concurrent construction cannot be guaranteed, an alternate method may be used to ensure construction within three years of occupancy of the Residential Development.

H.3.c
Packet Pg. 109 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 245 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 160 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-10 December 7, 2022
d. The off-site parcel shall have General Plan and zoning densities equivalent to R6 or higher.

C. Acquisition, Rehabilitation, and Deed Restriction of Existing Multi-Family Housing Units.

As an alternative to providing all or a portion of the Inclusionary Units on the same site as the Residential Development, the Developer may acquire housing units on an alternative site in Moraga and rehabilitate and deed restrict the units as affordable units, subject to the following requirements:
(1) At least 2.0 rehabilitated units shall be provided for each Inclusionary Unit required. (2) The following provisions shall apply:
a. The off-site development shall be governed by the terms of a deed restriction limiting occupancy of the required number of units to qualified Low or Very Lowincome households and establishing rents meeting affordability criteria for Low or Very Low-income households.
b. If applicable, the off-site units shall include a declaration of covenants, conditions and restrictions similar to that required for on-site Inclusionary Units. c. The Affordable Housing Agreement shall include a schedule which ensures the off-site units will be available for occupancy concurrently with the Market-Rate project. Where concurrent implementation cannot be guaranteed, an alternate method may be used to ensure implementation within three years of occupancy of the Residential Development.
d. With respect to rehabilitation, a tenant displacement reduction plan shall be prepared by the Developer, including relocation assistance and first right of return for impacted tenants.

D. In-Lieu Fee for Projects in Very High Fire Severity Zones (VHFSZ). Applicants of projects in a VHFSZ as determined by CAL FIRE may at their discretion, select to pay an in-lieu fee as an alternative to constructing the affordable units on-site, off-site, or through Accessory Dwelling Units (ADUs). Nothing in this provision precludes the owner from including ADUs in their project, as permitted by State law.

E. Alternate Methods of Compliance. Applicants may propose creative concepts for meeting the requirements of this Chapter, whether on or off-site. The Town Council may approve such alternate methods if the Applicant demonstrates that the purpose of this Chapter (as set forth in Section 8.18.020) has been met.

H.3.c
Packet Pg. 110 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 246 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 161 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-11 December 7, 2022

8.180.070 Standards
A. Term of Affordability. For-Sale Inclusionary Units shall be deed restricted pursuant to this Chapter for a period not less than 45 years. Rental Inclusionary Units shall be deed restricted pursuant to this Chapter for a period not less than 55 years.

B. Design. The following requirements shall apply:
(1) Inclusionary Units should be reasonably dispersed throughout the entirety of the Residential Development.
(2) Inclusionary Units should be comparable in terms of bedroom count to the MarketRate units, excluding ADUs. However, on-site Rental Units may be up to 20% smaller than the Market-Rate Units in the Residential Development project and onsite For-Sale Units may be up to 30% smaller than the Market-Rate Units in the Residential Development.
(3) The exterior design and character of the Inclusionary Units shall be substantially consistent with that of the Market-Rate Units in the Residential Development. (4) Interior Finishes. Inclusionary Units may have different interior finishes than Market Rate units so long as the interior finishes are durable, of good quality and consistent with current State building code standards for new housing. (5) The Inclusionary Units must have access to all Amenities available to the MarketRate Units.

C. Timing. Inclusionary Units must be constructed prior to or concurrently with the construction of the Market-Rate Units. In the event the Town approves a phased project, the Inclusionary Units required by this Chapter shall be constructed and occupied in proportion to the number of units in each phase of the Residential Development. In no case shall an Affordable Housing Unit be the final Dwelling Unit issued a Certificate of Occupancy of a Residential Development or its approved phase(s).

D. Segmentation. Segmentation of a project to avoid the requirements of this Chapter is not permitted. Construction of proximate Dwelling Units within any five-year period for which there is evidence of common ownership, control or interest, whether or not covered by the same land use entitlements, shall be subject to the regulations of this Chapter. However, nothing herein shall prohibit the phased development of a project, as approved by the Town.

8.180.080 Incentives
The Town shall make available to the Applicant Incentives to increase the feasibility of Residential Developments to provide Inclusionary Units. These Incentives shall only be available to Applicants who construct the Inclusionary Units on-site:

A. Fee Deferral. The Town Council, by resolution, may defer payment of Town of Moraga development impact fees (e.g. General Government, Public Safety, Park Development, Storm Drain, Parkland Development, the Lamorinda Fee and Finance Authority Fee, H.3.c
Packet Pg. 111 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 247 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 162 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-12 December 7, 2022
etc.) applicable to the Residential Development of which they are a part. Development impact fees for each unit shall be paid no later than the time of transfer of the unit to the first occupant, or at the time a certificate of occupancy is issued for Rental Units. The Developer and Town shall enter into a fee deferral agreement to be recorded against the real property prior to building permit issuance that restricts the transfer of any Dwelling Unit until all development fees for that parcel have been paid in full.

B. Incentives. Density bonuses and reduced parking requirements shall be available to projects meeting the requirements of this Chapter by providing Inclusionary Units onsite, in accordance with a schedule of Incentives to be adopted through a Moraga Affordable Housing Incentive Policy Resolution by the Town. Incentives shall be consistent with and may exceed the concessions and waivers available through State Density Bonus Law. Such Incentives may include but are not limited to:
(1) Increased height/stories
(2) Reduced setbacks or stepbacks
(3) Reduced private open space requirements
(4) Increased floor area ratio, where applicable
(5) Increased lot coverage

8.180.090 Accessory Dwelling Unit (ADU) Alternative Means of Compliance As indicated in Section 8.180.040(B)(2), an Applicant constructing a For-Sale Residential Development in any zoning district with densities equivalent to R-6 or lower may fulfill a development’s inclusionary housing requirements with the development of Accessory Dwelling Units, as set forth in this section.

A. Applicability. The provisions of this section shall apply to all new For-Sale Residential Developments with six or more units in the RR, R-1 DUA, R-2 DUA, R-3 DUA, and R-6 zoning districts.

B. Scope. Developers shall include Accessory Dwelling Units (ADUs) in a minimum of 25 percent of all primary units in the Residential Development. Such ADUs shall be at least 500 square feet in floor area, or no less than the maximum allowable size of Junior ADUs established by State law, whichever is less. Junior Accessory Dwelling Units (Junior ADUs) shall be ineligible to meet this requirement. In the event the number of required ADUs is not a whole number, the number of units shall be rounded up to the nearest whole number regardless of the fractional amount. No restrictions on occupancy or the income of occupants shall be required.

C. Ineligibility for Density Bonus. Developers providing ADUs as provided in this Section to meet their affordable housing requirements shall be ineligible for density bonuses or Incentives.

D. Design Parameters. Any ADUs constructed pursuant to this Section shall meet the design and development standards at Chapter 8.124 of the Municipal Code (Accessory Dwelling Units).

H.3.c
Packet Pg. 112 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 248 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 163 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-13 December 7, 2022
E. Reporting. The Town may, from time to time, request that the owner of each unit ADU subject to this Section report the occupancy status of the ADU using a Town-supplied reporting form.

8.180.100 Waivers
A. The requirements of this Chapter may be waived, adjusted, or reduced if a Developer shows, based on substantial evidence, that there is no reasonable relationship between the impact of a proposed Residential Development and the requirements of this Chapter, or that applying the requirements of this Chapter would take property in violation of the United States or California Constitutions.

B. Any request for a waiver, adjustment, or reduction under this section shall be submitted to the Town concurrently with the Affordable Housing Plan required by Section

8.180.050(B). The request for a waiver, adjustment, or reduction shall set forth in detail the factual and legal basis for the claim.

C. The request for a waiver, adjustment, or reduction shall be reviewed and considered in the same manner and at the same time as the Affordable Housing Plan.

D. In making a determination on an application for waiver, adjustment, or reduction, the Developer shall bear the burden of presenting substantial evidence to support the claim.

The waiver, adjustment or reduction may be approved only to the extent necessary to avoid an unconstitutional result, after adoption of written findings, based on substantial evidence, supporting the determinations required by this section.

8.180.110 Enforcement
A. Applicability. The provisions of this Chapter shall apply to all agents, successors and assigns of an Applicant.

Enforcing Authority. The Town Manager or their designee is the enforcing authority for this Chapter. The Town Manager may suspend or revoke any building permit or approval upon finding a violation of any provision of this Chapter.

C. Excessive Sales Price and Rents/Legal Action. It is unlawful, a public nuisance and a misdemeanor for any person to sell or rent an Inclusionary Unit at a price or rent exceeding the maximum allowed under this Chapter or to a household not qualified under this Chapter. If the Town determines that the sales price or rents in excess of those allowed by operation of this Chapter have been charged to a household residing in an affordable unit, the Town may take appropriate legal action.

SECTION 3. Effective Date. This Ordinance becomes effective thirty (30) days after its final passage and adoption.

H.3.c
Packet Pg. 113 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 249 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 164 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Ordinance No. XX-2022 A-14 December 7, 2022
SECTION 4. Severability. If any provision of the Ordinance or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the Ordinance which can be given effect without the invalid provisions or applications of the Ordinance. To this end, the provisions of this Ordinance are severable. This Town Council hereby declares that it would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof.

SECTION 6. Publication. The Town Clerk shall cause this Ordinance to be published in accordance with State law.

The foregoing Ordinance was introduced at a regular meeting of the Town Council of the Town of Moraga, California, held on December 7, 2022, and was adopted and ordered published at a regular meeting of the Town Council held on December 14, 2022 by the following vote:

Ayes:

Noes:

Abstain:

Absent:

Recused:
____________________________
Steve Woehleke, Mayor
ATTEST:
___________________________________
Yashin Abbas, Interim Town Clerk
H.3.c
Packet Pg. 114 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 250 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 165 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options)

ATTACHMENT B
Draft Development Incentives Policy Resolution for Projects Meeting the Town’s Affordable Housing Requirements On-Site H.3.c
Packet Pg. 115 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 251 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 166 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) B-2
Development Incentives Policy
Developers meeting the Town’s affordable housing requirements on-site shall be eligible for the density bonuses listed below. Developers meeting the requirements through an Alternative means of compliance as defined in Section 8.180.060 of the Moraga Municipal Code shall not be eligible for local bonuses. Projects with five units or fewer shall likewise be ineligible for local bonuses.

State Density Bonus Law (SDBL) requires that projects receiving low-income housing density bonuses must be affordable to households earning 60 percent of Areawide Median Income (AMI) or lower. As an incentive, the Town of Moraga will award equivalent density bonuses for projects serving households earning 80 percent of AMI or less. In addition, the Town will offer a supplemental local density bonus which may be added to the State bonus for projects providing on-site inclusionary units. The tables below represent the aggregate of the State Density Bonus and an additional Town of Moraga bonus for various housing types. As the table indicates, higher bonuses are provided for housing types identified in the 2023-2031 Housing Element as being particularly important to the Town.

R-24 Zoning District:

Housing Type Base
Density
(General
Plan and
Zoning)
State Density
Bonus
Available to
Projects
providing
10% low
income (*)
State
Density
Bonus
Available to
Projects
providing
10%
moderate(*)
Town of Moraga
Supplemental
Bonus for
Projects
meeting the
inclusionary
requirement onsite
Total
Bonus
Allowable
Density
with
Local
Bonus
Rental Housing,
General
24 DUA 20% N/A 5% 25% 30 DUA
Rental Housing,
Senior
30 DUA 20% N/A N/A (**) 20% 36 DUA
Rental Housing,
Student
24 DUA 35% N/A 15% 50% 36 DUA
For-Sale
Housing, Senior
30 DUA N/A 15% 5% 20% 36 DUA
DUA= Dwelling Units Per Acre
Attachment B
H.3.c
Packet Pg. 116 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 252 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 167 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) B-3
MSCP MU-RR, MSCP MU-OR zoning districts, and for the Rheem Center Commercial/Residential (RM-CR), and Rheem Center Office/Residential (RM-OR) zoning districts once established:

Housing Type Base
Density
(General
Plan and
Zoning)
State Density
Bonus
Available to
Projects
providing
10% low
income (*)
State
Density
Bonus
Available to
Projects
providing
10%
moderate(*)
Town of Moraga
Supplemental
Bonus for
Projects
meeting the
inclusionary
requirement onsite
Total
Bonus
Allowable
Density
with
Local
Bonus
Rental Housing,
General
20 DUA 20% N/A 5% 25% 25 DUA
Rental Housing,
Senior
30 DUA 20% N/A N/A (**) 20% 36 DUA
Rental Housing,
Student
20 DUA 35% N/A 15% 50% 30 DUA
For-Sale
Housing, Senior
30 DUA N/A 15% 5% 20% 36 DUA
H.3.c
Packet Pg. 117 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 253 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 168 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) B-4
R-12 Zoning District:

Housing Type Base
Density
(General
Plan and
Zoning)
State Density
Bonus
Available to
Projects
providing
10% low
income (*)
State
Density
Bonus
Available to
Projects
providing
10%
moderate(*)
Town of Moraga
Supplemental
Bonus for
Projects
meeting the
inclusionary
requirement onsite
Total
Bonus
Allowable
Density
with
Local
Bonus
Rental Housing,
General
6 DUA 20% N/A 13.4% 33.4% 8 DUA
Rental Housing,
Senior
6 DUA 20% N/A 13.4% 33.4% 8 DUA
Rental Housing,
Student
6 DUA 35% N/A 0% 35% 8 DUA
For-Sale
Housing, Senior
6 DUA N/A 15% 18.4% 33.4% 8 DUA
(*) For the purposes of these tables, low-Income is defined as 80% of AMI and moderate-income is defined as 120% of AMI, adjusted for household size.
(**) For senior housing in the R-20 and R24 zoning districts, the Town’s zoning already establishes a base density of 30 DUA, which is higher than the density allowed for other housing types. Thus, a supplemental local bonus is not provided for senior housing. Such projects may use the State Density Bonus of 20 percent to achieve 36 DUA.

H.3.c
Packet Pg. 118 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 254 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 169 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) B-5
Parking
In addition to the density bonus, such projects shall be entitled to use State Density Bonus parking requirements for lower income housing for projects serving households up to 80 % of AMI, rather than the 60% AMI required by the State. The parking requirements are:
• Studio and One-Bedroom: 1 space
• Two or Three Bedrooms: 1.5 space
• Four Bedrooms: 2.5 spaces
Concession or Incentive
Consistent with State Density Bonus Law, applicants who meet the 10% affordable housing requirement on-site are also automatically eligible for one concession or incentive. Only one incentive may be requested unless deeper levels of affordability are provided. Developers seeking relief from other development standards may request waivers as allowed by State Density Bonus Law.

Examples of desired incentives include but are not limited to:
(1) Increased height/ stories
(2) Reduced setbacks or stepbacks
(3) Reduced private open space requirements
(4) Increased floor area ratio, where applicable
(5) Increased lot coverage
H.3.c
Packet Pg. 119 Attachment: Attachment C - Moraga Affordable Housing Ord (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 255 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 170 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 1 1 2 Meeting Date: February 22, 2022
3 4
5 TOWN OF MORAGA STAFF REPORT
6 7 To: Honorable Mayor and Councilmembers
8 9 From: Afshan Hamid, AICP, Planning Director
10 Barry Miller, FAICP, Planning Consultant
11 David Doezema, Keyser Marston Associates, Inc
12 13 Subject: Study Session on Establishing a Fractional In Lieu Fee in Accordance 14 with the Town’s Affordable Housing Ordinance
15 16 CEQA: The project is consistent with the previously certified Environmental 17 Impact Report for the Comprehensive Advanced Planning Initiative and is 18 categorically exempt under the California Environmental Quality Act 19 Guidelines 15061(b)(3) and is covered by the commonsense exemption. 20 21 Request
22 23 Receive an informational report on the proposed Affordable Housing Fractional In Lieu 24 Fees pursuant to the adopted Affordable Housing Chapter 8.180 in the Moraga Municipal 25 Code, which created requirements for affordable housing in new residential development 26 of six units or more. The Town Council adopted Chapter 8.180 on December 14, 2022, 27 and it went into effect on January 13, 2023.
28 29 Background
30 31 On December 14, the Town Council adopted an Affordable Housing Ordinance 32 (Ordinance) to increase affordable housing production and meet a new State requirement 33 to Affirmatively Furthering Fair Housing (AFFH). The Ordinance requires developers to 34 provide a percentage of new residential units at a price that is considered affordable to 35 very low-, low-, or moderate-income households. The “Inclusionary” units will have deed 36 restrictions that limit the rent (or sales price) that may be charged, as well as the annual 37 income of the tenant (or purchaser). Inclusionary Housing is a tool to help the Town meet 38 its Regional Housing Needs Allocation (RHNA) goal of 1,118 new units. Over 60 percent 39 of the Town’s RHNA goal is comprised of housing units that are affordable to lower- and 40 moderate-income households. The detailed December 7, 2022 staff report for the 41 Affordable Housing Ordinance may be accessed here.
42 43 The Ordinance gives the Town Council the authority to adopt a fractional in-lieu fee. The 44 primary purpose is to address situations where the inclusionary requirement does not Town of Moraga Agenda Item
Ordinances,
Resolutions,
Requests for Action

10.C
H.3.d
Packet Pg. 120 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 256 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 171 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 2 1 result in a whole number of affordable units that are required. Projects with a fractional 2 inclusionary unit requirement are eligible to either pay an in-lieu fee for the fractional unit 3 or provide a whole inclusionary unit. For example, if an applicant proposed a 24-unit rental 4 project, the 10% inclusionary requirement represents 2.4 lower income units. Since 5 dwelling units are counted in whole numbers, the “fractional” remainder of 0.4 units could 6 either be satisfied through payment of an the proposed fractional in-lieu fee or the 7 applicant could choose to round up and provide 3 affordable units within the project. In 8 this instance, the requirement for 2.4 units would mean two affordable units would be 9 provided and the applicant would pay a fee equal to four-tenths of a dwelling unit. 10 11 The amount of the fee has not yet been established and must be determined by the Town 12 Council. The basis for the fee is included in the Ordinance. It represents the gap between 13 the market-rate price (sales or rent) and the affordable price (sales or rent) of the 14 inclusionary unit. At the December 7 meeting, staff shared that a study is required for the 15 in lieu fees and it would be brought to Council as a future separate action. Since the 16 December meeting, staff contracted with Keyser Marston Associates, Inc. (KMA) on an 17 Inclusionary Housing Fee Calculation memorandum (see Attachment B). 18 19 Section 8.180.040 identifies the General Requirements for the program, including the 20 types of projects that are covered (and exemptions), and the percentage of affordable 21 units that are required. Recognizing economic considerations, the Ordinance has 22 different requirements for for-rent and for-sale housing and allows flexibility in the 23 percentages of affordable units to be provided based on the depth of affordability. This 24 section also addresses “fractional” units.
25 26 Section 8.180.050 addresses Administration of the program, including requirements for 27 inclusionary housing plans and agreements. The agreements establish resale restrictions 28 for inclusionary for-sale units, and rental restrictions for rental units, as well as provisions 29 to monitor compliance once units are created. A summary of the Ordinance specific to In 30 Lieu Fees is as follows:
31 32 1. Applicability to rental vs ownership units (most ordinances apply to both). Council 33 direction was to apply the affordable requirement to both rental and ownership 34 units.
35 2. Exemptions (small projects may be exempt from the ordinance). Council direction 36 was to provide an exemption for projects with five or fewer units for inclusionary 37 units, with no fee collected for these projects.
38 3. Residential Developments with 6 (six), 7 (seven), 8 (eight), or 9 (nine) units shall 39 have the option of providing one full Inclusionary Unit or paying the In-Lieu Fee in 40 an amount equal to the following schedule:
41 42 Total Units in Project Fractional Inclusionary Unit Required 43 6 0.20
44 7 0.40
45 8 0.60
46 9 0.80
47 4. Applicants proposing ten (10) or more units shall calculate the required number 48 of Inclusionary Units. In the event this calculation results in a Fractional Unit, the H.3.d
Packet Pg. 121 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 257 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 172 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 3 1 Developer shall have the option or either: (i) providing a full Inclusionary Unit; or 2 (ii) paying an In Lieu Fee in an amount equal to the percentage represented by 3 the fractional unit multiplied by the In Lieu Fee
4 5. For-Sale Units. The fee amount should represent a reasonable portion of the gap 5 between the Affordable Sales Price at the corresponding income level and the 6 Market-Rate sales price of for-sale housing of a similar product type. 7 6. Rental Units. The fee amount should represent a reasonable portion of the gap 8 between the Affordable Rent at the corresponding income level and the market9 rate rent for a similar product type over the lifetime of the affordability term. 10 7. In Lieu Fee for Projects in Very High Fire Severity Zones (VHFSZ). Applicants of 11 projects in a VHFSZ as determined by CALFIRE may at their discretion, select to 12 pay an in-lieu fee as an alternative to constructing the affordable units on -site, off13 site, or through Accessory Dwelling Units (ADUs). Nothing in this provision 14 precludes the owner from including ADUs in their project, as permitted by State 15 Law.
16 17 Exemptions/ Applicability
18 19 Per the Ordinance, inclusionary requirements and in-lieu fees do not apply to projects of 20 five or fewer units. The Ordinance applies Town-wide, but projects in lower density zones 21 would have the option of meeting the inclusionary requirement through 25% Accessory 22 Dwelling Units (ADUs). No rent or income restrictions would apply to the ADUs and they 23 may be used at the owner’s discretion (rental of the ADUs is not required). 24 25 The focus of this report is the methodology and fee calculation as set forth in the KMA 26 memorandum (Attachment B).
27 28 Discussion
29 30 Based on a review of inclusionary housing fees in other communities, there are two 31 primary ways of calculating the fee—on a square foot basis or on a dwelling unit basis. 32 The square foot basis was used in this case, as it is more equitable and places a lower 33 burden on smaller units. A 1,000 square foot condominium would be subject to a much 34 lower fee than 3,000 square foot home; this would not be the case if the fee was based 35 on the number of dwelling units in the project. This square foot basis allows the fee to 36 scale with the size of the market rate units and avoids creating a disincentive for smaller 37 more affordable market rate units.
38 39 The KMA memo and appendix is extensive and provides a comprehensive methodology 40 and calculations to determine an in-lieu fee consistent with the requirements of the 41 Ordinance. The KMA overall basis for the affordable housing in-lieu fee was calculated to 42 be $39.00 per square foot for for-sale projects and $25.00 per square foot for rental 43 projects. These figures represent the gross per square foot in-lieu that would apply if no 44 affordable units were provided by the project. The gross in-lieu fee amounts are adjusted 45 downward based on the portion of the overall inclusionary requirement to be satisfied with 46 fractional unit in-lieu fees. Gross in-lieu fees are also adjusted downward for smaller six 47 to nine unit projects based on the fractional unit requirements specified in the Ordinance.

H.3.d
Packet Pg. 122 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 258 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 173 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 4 1 The basis for the fee is described below, first for for-sale projects and then for rental 2 projects.
3 4 For-Sale Projects Gross in-lieu fee
5 6 a. The methodology is as follows: Estimate the average market rate sales 7 price for Moraga.
8 b. Determine the average square footage for new units in Moraga 9 c. Determine the sales price that would be considered “affordable” to a 10 moderate income household
11 d. Calculate the for-sale affordability gap by subtracting the (c) affordable 12 sales price from the (a) market rates sales price
13 e. Apply the required inclusionary percentage (10%) to (d) affordability 14 gap and divide the result by (b) average unit square feet to calculate the 15 gross-lieu fee applied to for sale projects
16 17 The data points for (a) through (e) are shown below:
18 Gross In-Lieu Fee Calculation, For Sale
a. Average sales price for newer units in Moraga $1,798,000 b. Average net square footage 3,040 sq. ft.
c. Affordable sales price (Moderate) $612,000
d. Affordability Gap (a. – c.) $1,186,000
e. Gross In-Lieu Fee, For-Sale = affordability gap
(d.) x inclusionary % (10%) ÷ avg unit sq. ft. (b.)
$39 per sq. ft.
19 20
21 Rental Projects Gross in-lieu fee
22 23 a. The methodology is as follows: Determine average unit square feet for 24 rental apartments in Moraga
b. Identify market rents for existing apartments in Moraga1 25 , which are 26 primarily built in 1960s and 1970s
27 c. Estimate market rents for newly built apartments in Moraga 28 • Rents for new apartments are estimated based on applying a 50% 29 premium to rents for older existing units in Moraga. This premium 30 is estimated based on a comparison of rents for older and newly 31 built units in Walnut Creek. This step is necessary because no 32 recently built market rate apartments were identified in Moraga 33 d. Determine the rent that would be considered “affordable” to a lower 34 income household (assuming 30% of income set aside for housing costs). 35 e. Calculate the annual rent difference by subtracting the monthly affordable 36 rent from the monthly market rate rent, and then multiplying by 12 37 f. Calculate the rental affordability gap as the forgone project value 38 associated with setting aside an affordable housing unit. 39 The calculation is based on:
1 Nearly all Moraga apartments were built in the 1960s and 1970s. Used market rates for new apartments in Walnut Creek to estimate rent premium for new apartments built in Moraga H.3.d
Packet Pg. 123 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 259 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 174 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 5 1 dividing the annual rent difference by a 4% capitalization rate 2 based on averages reported for the submarket
3 g. Multiply the affordability gap by the inclusionary percentage (10%) and 4 divide by (a) average unit per square feet to determine the gross in-lieu 5 fee for rental projects
6 7 The data points for (a) through (g) are shown below:
8 Gross In-Lieu Fee Calculation, For Rent
a. Average rental unit square feet 1,028 sq. ft.
b. Identify market rate rents for current apartments in Moraga.
$2,110
c. Apply a 50% premium to current rents to determine
market rates for new apartments ($2,110 x 50%)
$3,165
d. Calculate affordable monthly rent for a low-income
household (per 30% of monthly income, etc.)
$2,300
e. Subtract monthly affordable rent ($2,300) from market rate rent ($3,165)
$865
f. Multiply monthly difference ($865) x 12 to calculate annual rent difference
$10,382
g. Divide annual rent difference ($10,382) by capitalization rate (4%)2 to determine the capitalized value of rent
difference
$260,000
h. Multiply affordability gap ($260,000) x inclusionary percentage (10%) ÷ average unit square feet (1,028 sq.
ft.) =Gross In-lieu for rental projects
$25 per sq. ft.
9 10 Fee Calculation for Typical Projects
11 12 A number of examples are provided below to explain how the fees would apply to actual 13 projects. The examples used are a 24-unit townhome project (average unit size of 2,200 14 SF), a 42-unit rental project (average unit size of 1,200 SF), and a 66-unit rental apartment 15 project (average unit size of 900 SF).
16 17 Case Study: 24 unit for-sale townhome project (2,200 SF each, or total net area of 52,800 18 square feet in the entire project)
19 20 The applicant is obligated to provide 2.4 units affordable to moderate income households 21 (10 percent). The applicant could meet this obligation by rounding the 2.4 up to three 22 affordable units or by providing two affordable units and paying an in-lieu fee equivalent 23 to 0.4 units. The affordable units would be sold to qualifying buyers at moderate income 24 prices (roughly $612,000) and the remaining units would sell at market rates. 25 26 Assuming the developer chose to pay the in-lieu fee, the fee amount would be $343,200. 27 This is essentially four-tenths of the “gap” between one market-rate unit and one 2 4% average capitalization rate reported by Costar for apartment properties sold in the prior one-year period within the Walnut Creek submarket.

H.3.d
Packet Pg. 124 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 260 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 175 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 6 1 subsidized unit in the project. The cost is calculated by applying the unit cost of $39 per 2 square foot as follows:
3 4 0.4/2.4 x $39 x 52,800 = $343,200
5 (Fractional amount / Total requirement) x in-lieu fee x project area 6 7 Case Study: 42-unit apartment project (1,200 SF each, or total net area of 50,400 SF in 8 the entire project)
9 10 The applicant is obligated to provide 4.2 units affordable to lower income households (10 11 percent). The applicant could meet this obligation by rounding the 4.2 up to five affordable 12 units or by providing four affordable units and paying an in-lieu fee equivalent to 0.2 units. 13 The affordable units would be rented to qualifying buyers at lower-income rents (roughly 14 $2,300) and the remaining units would rent at market rates. 15 16 Assuming the developer chose to pay the in-lieu fee, the amount would be $60,000. This 17 is essentially two-tenths of the “gap” between one market-rate unit and one subsidized 18 unit in the project. The cost is calculated by applying the unit cost of $25 per square foot 19 as follows:
20 21 0.2/4.2 x $25 x 50,400 = $60,000
22 (Fractional amount / Total requirement) x in-lieu fee x project area 23 24 Case Study: 66-unit apartment project (900 SF each, or total net area of 59,400 SF in the 25 entire project)
26 27 The applicant is obligated to provide 6.6 units affordable to lower income households (10 28 percent). The applicant could meet this obligation by rounding the 6.6 up to seven 29 affordable units or by providing six affordable units and paying an in-lieu fee equivalent 30 to 0.6 units. The affordable units would be rented to qualifying buyers at lower-income 31 rents (roughly $2,300) and the remaining units would rent at market rates. 32 33 Assuming the developer chose to pay the in-lieu fee, the amount would be $135,000. 34 This is essentially six-tenths of the “gap” between one market-rate unit and one 35 subsidized unit in the project. The cost is calculated by applying the unit cost of $25 per 36 square foot as follows:
37 38 0.6/6.6 x $25 x 59,400 = $135,000
39 (Fractional amount / Total requirement) x in-lieu fee x project area 40 41 Six to Nine Unit Projects
42 For projects with six (6) to nine (9) units either a full inclusionary unit is required or an in 43 lieu fee may be paid. Based on Table 1 in the KMA memorandum (see Attachment B, 44 page 2), the fees for rental units would range from $8.30 per square foot in a 6-unit project 45 to $22.20 per square foot in a 9-unit project. The fees for for-sale units would range from 46 $13.00 per square foot in a 6-unit project to $34.70 per square foot in a 9-unit project. 47 These requirements would primarily only be applied in the event small multi-family 48 projects or townhomes are proposed. It is expected that single family detached projects 49 of six to nine units will generally provide ADUs in lieu of meeting these requirements. The H.3.d
Packet Pg. 125 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 261 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 176 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 7 1 Town is not expecting many projects in this range to be submitted based on past 2 submittals.
3 4 Custom Lot / Single Family Subdivision
5 For a subdivision in a zoning district that is RR, R-1, R-2, R-3, or R-6, an alternate means 6 of compliance provision has been provided to applicants. This alternate is to include 7 ADUs in 25 percent of the units rather than dedicating deed-restricted affordable units. 8 Based on cost, the ADU option is expected to be more attractive than dedicating 9 moderate-income for-sale units within the subdivision. 10 11 In subdivisions affordable housing is applicable in two scenarios, by providing 25% ADUs 12 of residences in a custom lot subdivision or in a Very High Fire Severity Zone (VHFSZ). 13 Recent CAL FIRE maps have been updated for the State responsibility areas. Moraga 14 Orinda Fire District (MOFD) will use the existing maps until local maps are adopted. 15 16 The developer does have the option of paying a fractional in-lieu fee, should they choose 17 to dedicate affordable units within their project. In such instances, the fees are due at 18 Final Map. The method and amount of the fee calculation is the same as was described 19 in the examples above. The fee represents a reasonable portion of the gap between the 20 Affordable Sale Price at the corresponding income level and the Market-Rate sales price 21 of For-Sale Housing.
22 23 The fractional fee option is not available to developers meeting the requirement through 24 ADUs. In other words, a 21-lot subdivision would need to include ADUs in six of the 25 homes, even though the 25 percent requirement yields 5.25 units. 26 27 Comparison of Other Cities
28 Staff conducted an analysis of in lieu fees and fractional in lieu fees for 21 East Bay 29 jurisdictions. Each jurisdiction varies in how it applies fees and at the threshold of how it 30 applies fees. Due to the sixth cycle, Housing Element, many jurisdictions are either re31 visiting or establishing in-lieu policies and fees. Clayton, Orinda, Lafayette and Danville 32 are currently in the process of updating or establishing the in lieu fees. Antioch, Hercules, 33 Martinez, Oakley, Pinole and Pittsburg are still working on their Housing Elements so the 34 in lieu policy and fees are not known at this time. San Pablo does not have in lieu fees as 35 the City meets affordable housing goals and most projects that are submitted have 36 affordable housing included. The remaining Cities that have inclusionary in lieu fees 37 adopted as first generation of fees are now in the process of updating, and re-considering 38 the approach to affordable housing fees. The information is in the table below. 39 40
For Sale For Rent sq. ft.

Brentwood $22.88 sq. ft. $28.72
Concord $ 9.00 sq. ft. Only when 600 or more units
are built
Contra Costa
County
$6,600.06 per market rate
unit
$24,200.55 per market rate unit
El Cerrito $22.88 sq. ft. $28.72 sq. ft.

Fremont $44.00 sq. ft. $27.00
H.3.d
Packet Pg. 126 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 262 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 177 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 8 $27 sq. ft. for stacked flat
does not include additional
impact fees
$8.75 (up to 700 sq. ft.)
Pleasant Hill $271,350 for each unit
Note these have not been
updated for some time
Fractional is from the amount
listed,
Note these have not been
updated for some time
Richmond $12.00 sq. ft.

San Ramon 15% of units have to be
affordable. Don’t allow for
fees, only allow buildouts.

Most projects are 30 units
and more. Currently updating
fees with KMA and will adjust.

Most future projects
anticipated for MF, and will
ask for a higher fee.
15% of units have to be
affordable. Currently updating
fees
Walnut Creek $26.86 sq. ft.

Includes commercial linkage
fees
Needs to be updated
$26.86 sq. ft.

Includes commercial linkage
fees
Needs to be updated
1 2 Next Steps
3 4 Staff is requesting input and feedback at the February 22 meeting. Staff will continue to 5 reach out to developers for input. Once direction is provided, staff will bring the revised 6 report, recommendation and Resolution for Council adoption. 7 8 California Environmental Quality Act
9 10 The project is consistent with the previously certified Environmental Impact Report for the 11 Comprehensive Advanced Planning Initiative and is categorically exempt under the 12 California Environmental Quality Act Guidelines15061(b)(3) and is covered by the 13 common sense exemption.
14 15 Fiscal Impact
16 17 Adoption of affordable housing requirements will require the collection of fees for 18 fractional units and the adoption of an in-lieu fee. A dedicated Affordable Housing Fund 19 (Fund 791) would be created by the Town as a repository for these fees. As they accrue, 20 the fees would be used to support Housing Element programs and potentially provide a 21 supplemental funding source for non-profit affordable housing developers. There would 22 be additional costs associated with administering affordable housing requirements, 23 reviewing affordable housing plans and Agreements, and monitoring compliance with the 24 program. Some of these functions could be carried out by third parties, as the Town has 25 limited staff capacity.
26 27 Recommendations
H.3.d
Packet Pg. 127 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 263 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 178 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 9 1
2 Accept the informational report and provide guidance and feedback to staff. This feedback 3 will inform the proposed resolution, which is scheduled to be brought to the Council in 4 March/April timeframe.
5 6 Report reviewed by: Brian Dolan, Interim Town Manager 7 Karen Murphy, Assistant City Attorney
8 9 Attachments:
10 11 A. Keyser Marston Associates, Inc. (KMA) on an Inclusionary Housing Fee 12 Calculation memorandum
13 H.3.d
Packet Pg. 128 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 264 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 179 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options)

ATTACHMENT A
Keyser Marston Associates, Inc. (KMA) on an Inclusionary Housing Fee Calculation memorandum
H.3.d
Packet Pg. 129 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 265 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 180 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) 2040 BANCROFT WAY, SUITE 302  BERKELEY, CALIFORNIA 94704  PHONE: 415 398 3050  FAX: 415 397 5065 001-002.docx; jf
WWW.KEYSERMARSTON.COM 16034.002
ADVISORS IN:

REAL ESTATE

AFFORDABLE HOUSING

ECONOMIC DEVELOPMENT

BERKELEY
A. JERRY KEYSER
TIMOTHY C. KELLY
DEBBIE M. KERN

DAVID DOEZEMA

LOS ANGELES
KATHLEEN H. HEAD
JAMES A. RABE
GREGORY D. SOO-HOO
KEVIN E. ENGSTROM
JULIE L. ROMEY

TIM BRETZ

SAN DIEGO
PAUL C. MARRA

LINNIE GAVINO

MEMORANDUM
To: Cynthia Battenberg
Town of Moraga
From: Keyser Marston Associates, Inc.

Date: December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations
The following memorandum has been prepared for the Town of Moraga (Town) by Keyser Marston Associates, Inc. (KMA) to calculate an in-lieu fee pursuant to the Town’s proposed Affordable Housing Ordinance (AHO). Moraga Municipal Code (MMC) Section

8.180.050 D (proposed) provides for adoption of in-lieu fees for fractional inclusionary unit obligations. Projects with a fractional inclusionary unit requirement are eligible to either pay an in-lieu fee for the fractional unit or provide a whole inclusionary unit.

SUMMARY OF IN-LIEU FEE CALCULATION
In-lieu fees are calculated based on the gap between market-rate and affordable sales prices and rents pursuant to MMC 8.180.050 D. In-lieu fees are expressed per habitable square foot within the project. Applying in-lieu fees on a per square foot basis is permitted under the AHO, is a well-established approach used in many jurisdictions throughout the region and allows the amount of the fee to scale with unit size.

A. Projects from Six to Nine Units
Table 1 presents calculated in-lieu fees for projects from six to nine units in size. In-lieu fees reflect the gap between market and affordable prices and rents and the schedule of fractional inclusionary unit obligations for projects with six to nine units under MMC

8.180.040 (D), which phases in requirements for smaller projects.

H.3.d
Packet Pg. 130 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 266 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 181 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) To: Cynthia Battenberg December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations Page 2
001-002.docx; jf
16034.002
Table 1. In-Lieu Fees for Six to Nine-Unit Projects
Per Habitable Square Foot (1) in Project
For-Sale Units Rental Units
6-unit projects $13.00 /SF $8.30 /SF
7-unit projects $22.30 /SF $14.30 /SF
8-unit projects $29.30 /SF $18.80 /SF
9-unit projects $34.70 /SF $22.20 /SF
(1) Excludes garages, parking area, common areas and common amenities, and other non-livable space.

B. Fractional Inclusionary Unit In-Lieu Fees for Larger Projects.

For projects with more than ten units that choose to meet fractional unit inclusionary requirements by paying an in-lieu fee, the amount is determined based on a “gross per square foot in-lieu fee” multiplied by the share of the inclusionary unit requirement to be satisfied with in-lieu fee payment, as shown in Table 2. The gross in-lieu fee reflects the full affordability gap, assuming no inclusionary units are provided within the project, and was calculated at $39 per square foot for for-sale units and $25 per square foot for rental units. This gross amount must be reduced to reflect the share of the inclusionary requirement to be satisfied with in-lieu fee payment, as shown in Table 2.

Table 2. Fractional Unit In-Lieu Fees, Projects with More Than Ten Units ForSale
Units
$39 𝑃𝑃𝑃𝑃𝑃𝑃 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑓𝑓𝑓𝑓𝑓𝑓 ×
𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝐹𝐹𝐹𝐹𝐹𝐹 𝐼𝐼 𝐼𝐼 𝐼𝐼 𝑈𝑈 𝑂𝑂𝑂𝑂 𝑂𝑂
𝑇𝑇 𝐼𝐼 𝐼𝐼 𝐼𝐼 𝑈𝑈 𝑅𝑅 𝑅𝑅
× 𝐻𝐻 𝐻𝐻 𝐻𝐻 𝐹𝐹 = 𝑇𝑇 𝐷𝐷
Rental
Units $25 𝑃𝑃𝑃𝑃𝑃𝑃 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑓𝑓𝑓𝑓𝑓𝑓 ×
𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝐹𝐹𝐹𝐹𝐹𝐹 𝐼𝐼 𝐼𝐼 𝐼𝐼 𝑈𝑈 𝑂𝑂𝑂𝑂 𝑂𝑂
𝑇𝑇 𝐼𝐼 𝑈𝑈 𝑅𝑅 𝑅𝑅
× 𝐻𝐻 𝐻𝐻 𝐻𝐻 𝐹𝐹 = 𝑇𝑇 𝐷𝐷
Appendix Table 1 provides an example calculation.

C. Custom Lot Subdivisions
For custom lot subdivisions, in-lieu fees are due at Final Map, while homes are built later. In this case, the in-lieu fee must be calculated based on an assumed habitable square footage. KMA recommends use of an estimated or assumed average square footage, as described in Table 3.

H.3.d
Packet Pg. 131 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 267 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 182 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) To: Cynthia Battenberg December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations Page 3
001-002.docx; jf
16034.002
Table 3. Custom Lot Subdivisions
If the total habitable square footage in the development can reasonably be estimated at the time of Final Map, such reasonable estimate shall be used for the in-lieu fee calculation. Otherwise, the total habitable square footage shall be calculated based on the average unit size used for purposes of establishing the in-lieu fee multiplied by the number of buildable lots. Average unit sizes, based on the supporting market data used for establishing in-lieu fees, are:

For-Sale: 3,040 sq ft
Rental: 1,028 sq ft

SUPPORTING ANALYSIS
The following sections walk through the calculation of in-lieu fees.

Gross In-Lieu Fee Calculation for For-Sale Projects
The AHO specifies that the in-lieu fee for for-sale units “…should represent a reasonable portion of the gap between the Affordable Sales Price at the corresponding income level and the Market-Rate sales price of For-Sale housing….” KMA calculated this gap based on a review of market rate sales and an estimate of the affordable sales prices for comparable units. The analysis is summarized below.

To estimate the market rate sales price of a new unit in Moraga, KMA calculated the average sales price of units built since 2010 and sold since January 2019, using data from CoreLogic. There were 72 units that fit these criteria in Moraga, representing a mix of single family detached and attached or duplex units. The average number of bedrooms, unit size and sales prices are shown in Table 4.

Table 4. Average Price of Newer Units in Moraga Built Since 2010, Sold Last 4 Years (1/2019 - 11/2022)
Average Sales Price, Newer Units in Moraga $1,798,000
Average Number of Bedrooms, Newer Units in Moraga 3.96
Average Net Square Footage, Newer Units in Moraga 3,040 sq ft Source: CoreLogic
Average market rate sales prices for for-sale housing in Moraga is the first component of the for-sale affordability gap calculation.

KMA estimated the affordable sales price for a comparable unit based on AHO requirements. The pricing is set to be affordable to households earning the Moderate H.3.d
Packet Pg. 132 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 268 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 183 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) To: Cynthia Battenberg December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations Page 4
001-002.docx; jf
16034.002
Income Limit for Contra Costa County with 35% of income set aside for housing costs including mortgage payments, property taxes, insurance, HOA dues, and utilities. Table 5 presents the affordable sales prices. Appendix Table 4 provides the supporting calculation.

Table 5. Moderate Income Affordable Sales Price
3 Bedroom
Aff Price
4 Bedroom
Aff Price
Weighted
Average (1)
Affordable Price $571,300 $613,400 $612,000
(1) Weighted to reflect the average of 3.96 bedrooms in the market rate unit sales data summarized in Table 4.

The for-sale affordability gap is the difference between the market rate sales price (Table 4) and the weighted average affordable sales prices (Table 5). The affordability gap represents the forgone revenue to the developer from setting aside a unit as affordable.

The calculation is shown in Table 6.

Table 6. For-Sale Affordability Gap
Market Price $1,798,000
Less: Affordable Price ($612,000)
Affordability Gap $1,186,000
Using the affordability gap, KMA calculated a per-square-foot in-lieu fee. The fee is calculated based on the onsite requirement (10% of units) and the average size of the market rate units (3,040 square feet). The calculation is shown in Table 7.

Table 7. Calculation of Gross For-Sale In-Lieu Fee, Before Phase-In Affordability
Gap
Inclusionary
Percentage
Average Unit
Square Feet
Gross In-Lieu
Fee before
phase-in
Gross For-Sale In-Lieu
Fee Before Phase-In
$1,186,000 x 10% ÷ 3,040 sq ft = $39 /SF
In-lieu fees for projects from six to nine units in size presented in Table 1 are based on the gross in-lieu fee per square foot in Table 7, adjusted for the phase in of the inclusionary unit requirement pursuant to MMC 8.180.040 (D). The supporting calculation of this phase in is provided in Appendix Table 1.

H.3.d
Packet Pg. 133 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 269 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 184 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) To: Cynthia Battenberg December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations Page 5
001-002.docx; jf
16034.002
Gross In-Lieu Fee Calculation for Rental Projects
The AHO specifies that the in-lieu fee for rental units “should represent a reasonable portion of the gap between the Affordable Rent at the corresponding income level and the market-rate rent for a similar product type over the lifetime of the affordability term.” KMA calculated this gap based on a review of market rate rents and an estimate of the affordable rents for comparable units. Appendix Table 3 presents the calculations. The analysis is summarized below.

KMA reviewed current market rate rents in Moraga. Costar data indicate that nearly all Moraga apartment units were built in the 1960s and 1970s. The in-lieu fee analysis should be based on the estimated rental rates of newly built units that would be subject to the inclusionary requirement. To estimate the rent premium for new units with modern finishes and amenities, KMA compared market rents for new and old apartments in Walnut Creek, where this data is available. KMA calculated the percentage difference in rents between new and old units from the 1960s and 1970s and estimated that new units rent for approximately 50% more than the older units. KMA estimated rents for new market rate units in Moraga based on applying this 50% premium to existing rents for older units, as shown in Table 8.

Table 8. Estimated Market Rate Rents for New Units in Moraga Avg Number
of BRs
Avg
Unit SF
Avg Effective
Rent Per Month
Averages for Rental Unit in Moraga (older units) 1.83 1,028 $2,110 Estimated Rent Premium for New Construction 50%
Estimated Market Rent for New Rental Units in Moraga 1.83 1,028 $3,165 Source: CoStar
The estimated market rate rents for new apartments in Moraga presented in Table 8 is the first component of the rental affordability gap calculation.

KMA calculated the affordable rent for a comparable unit using the average number of bedrooms from the market data and the requirements of the AHO. The rent is set to be affordable to households earning the maximum income limit for Low Income households in Contra Costa County, with 30% of income set aside for housing costs including rent and utilities. The results are summarized in Table 9.

H.3.d
Packet Pg. 134 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 270 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 185 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) To: Cynthia Battenberg December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations Page 6
001-002.docx; jf
16034.002
Table 9. Affordable Monthly Rent
1 BR/
2-p HH
2 BR/
3-p HH
Weighted
Average (1)
Contra Costa County Low Income Limit, 2022 $87,700 $98,650 Affordable Housing Cost per Month $2,193 $2,466 $2,420
Less: Utilities (2) ($95) ($125) ($120)
Affordable Rent $2,098 $2,341 $2,300
(1) Weighted to reflect the average of 1.83 bedrooms in the market rate rental units. (2) Assumes gas heat, hot water and cooking, air conditioning, electricity and water.

The difference between market rate rents (Table 8) and the affordable rents (Table 9) is shown in Table 10.

Table 10. Net Difference: Market vs. Affordable Rents
Market
Rent
Affordable
Rent
Rent Difference
Per Month
Rent Difference
Per Year
Net Difference:

Market and Affordable Rents $3,165 $2,300 $865 $10,382

The rental affordability gap is calculated based on annual difference between market rate and affordable rents in Table 10, divided by a capitalization rate of 4%, to identify forgone project value associated with setting aside a unit as affordable. The cap rate is based on the average for 2022 year-to-date for the Walnut Creek submarket, according to CoStar. The calculation is shown in Table 11.

Table 11. Rental Affordability Gap (Capitalized value of rent difference) Rent Difference
Per Year
Capitalization
Rate (1)
Capitalized Value
of Rent Difference
Affordability Gap $10,382 ÷ 4.00% = $260,000
(1) Costar Walnut Creek area submarket cap rate for 2022YTD.

Using the affordability gap, KMA calculated the gross in-lieu fee. The fee is calculated based on the affordability gap, the onsite requirement (10% of units), and the average size of the market rate units (1,028 square feet). The calculation is shown in Table 12.

H.3.d
Packet Pg. 135 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 271 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 186 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) To: Cynthia Battenberg December 21, 2022
Subject: Inclusionary In-Lieu Fee Calculations Page 7
001-002.docx; jf
16034.002
Table 12. Calculation of Gross Rental In-Lieu Fee, Before Phase-In Affordability
Gap
Inclusionary
Percentage
Average Unit
Square Feet
Gross In-Lieu
Fee Before
Phase-In
Gross Rental In-Lieu
Fee Before Phase-In $260,000 x 10% ÷ 1,028 sq ft = $25.00 /SF In-lieu fees for projects from six to nine units in size are based on the gross in-lieu fee per square foot in Table 12 plus an adjustment for the phase in of the inclusionary unit requirement pursuant to MMC 8.180.040 (D). The supporting calculation is provided in Appendix Table 1.

See also, Appendix Tables 1 through 4, attached, for supporting calculations.

H.3.d
Packet Pg. 136 Attachment: Attachment D - Moraga Inclusionary Zoning In-Lieu Fee (3098 : Inclusionary Housing Ordinance Options) H.3.a
Packet Pg. 272 Attachment: May 2, 2023 Staff Report with Attachments (3218 : Inclusionary Housing) H.2.a
Packet Pg. 187 Attachment: Tuesday, October 3, 2023 Inclusionary Housing SR (3323 : Follow-Up Report on Inclusionary Housing Ordinance Options) Appendix Table 1
In-Lieu Fee Calculations
In Lieu Fee Analysis
Town of Moraga, CA
A. B. C. D. E.

Project Size Rental For-Sale
per Ordinance = 10% x No. units = A. / B.

Gross In-Lieu Fee Before Phase-In $25 /SF $39 /SF
Appendix Table 3ppendix Table 2
=C x gross fee =C x gross fee
6-unit projects 0.2 0.6 33% $8.30 /SF $13.00 /SF
7-unit projects 0.4 0.7 57% $14.30 /SF $22.30 /SF
8-unit projects 0.6 0.8 75% $18.80 /SF $29.30 /SF
9-unit projects 0.8 0.9 89% $22.20 /SF $34.70 /SF
(1) Excludes garages, parking area, common areas and common amenities, and other non-livable space.

Example Fractional Unit In-Lieu Fee Calculation (For Sale Project) 1) Habitable Square Footage in Project 92,400
2) Total Units in Project 42
3) Inclusionary Units Required = 10% X Total Units 4.20 4) Whole Inclusionary Units Due 4.00
5) Fractional Inclusionary Units Due 0.20
6) Gross In-Lieu Fee Before Phase In $39 /SF Appendix Table 2 7) Fractional Unit In-Lieu Fee $171,600
B. Fractional Unit In-Lieu Fees for Projects of Eleven or More Units Formula for Fractional Unit In-lieu Fees
= Fractional Units Owed / Total Inclusionary Unit Requirement x Gross Per Square Foot In-Lieu Fee x Total Habitable Square Footage in the Project.
= 0.2 fractional units /

4.2 inclusionary units x
$39/SF x 92,400 SF
In-Lieu Fee
Per Habitable
Square Foot (1)
A. In-Lieu Fees for Six to Nine-Unit Projects
Phase-in of
Inclusionary
Requirement
per Ordinance

8.180.040 (D)
Inclusionary
Units With Full
10%
Requirement
In-Lieu Fee
Phase In
Percentage
(project either pays this amount or
rounds up to five whole inclusionary
units)
_________________________________________________
Prepared by: Keyser Marston Associates, Inc.

Filename: \\SF-FS2\wp\16\16034\002\In-Lieu Fee Analysis Town of Moraga 12-21-22.xlsx; Summary

Page 8 ends

Orinda City CouncilMarch 12, 2024

Orinda City Council
March 12, 2024