Agenda — Pacifica City Council, September 28, 2026 (part 1 of 3)

CITY OF PACIFICA

CITY COUNCIL AGENDA
Council Chambers
2212 Beach Blvd
Pacifica, CA 94044
Mayor Christine Boles
Vice Mayor Greg Wright
Councilmember Sue Beckmeyer
Councilmember Mary Bier
Councilmember Mayra Espinosa
City Council Regular Meeting 1 September 28, 2026
September 28, 2026 (MONDAY)
www.cityofpacifica.org
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BEFORE THE MEETING: Written public comments may be submitted in advance by 12:00 p.m. on the meeting date by email to: [email protected]. Written public comments submitted by email should adhere to the following:
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Written public comments received by 12:00 p.m. on the meeting date will be provided in their entirety to the City Council and posted to the City’s website prior to the meeting but will not be read verbally at the meeting.

AT THE MEETING: Materials in writing provided at the meeting should provide seven (7) copies to provide for each Councilmember, City Clerk and City staff.

NOTE: Anyone requiring assistance or reasonable accommodations pursuant to the Americans with Disabilities Act for access to the meeting, related materials and/or ability City Council Regular Meeting 2 September 28, 2026
to comment should provide at least 24 hours advance notice to the City Manager’s Office (650) 738-7409, or send request via email to: [email protected]. All meeting rooms are accessible to the disabled.
6:00 PM - CLOSED SESSION
00a. CONFERENCE WITH REAL PROPERTY NEGOTIATORS. Property: 2212 Beach Boulevard, Pacifica, California 94044. Agency negotiator: Sean Charpentier, City Manager and Michelle Marchetta Kenyon, City Attorney. Negotiating parties: Pravin Punjiya for Paramount Investor Group. Under negotiation: Price and terms of payment. 00b. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION. Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) and paragraph (1) of subdivision (e) of Government Code section 54956.9. One Potential Case. 7:00 PM OPEN SESSION
Call to Order
Roll Call
Reading of Land Acknowledgment
The City of Pacifica acknowledges that we occupy the unceded ancestral homeland of the Ramaytush Ohlone peoples, who are the original inhabitants of the San Francisco Peninsula. We honor the Ramaytush Ohlone peoples for their enduring commitment to Mother Earth. As the Indigenous protectors of this land and in accordance with their traditions, the Ramaytush Ohlone have never ceded, lost, nor forgotten their responsibilities as the caretakers of this place, as well as for all peoples who reside in their traditional territory. We affirm their sovereign rights as First Peoples and wish to pay our respects to the ancestors, elders, and relatives of the Ramaytush Ohlone peoples.

Salute to the Flag led by Mayor Boles
Closed Session Report

SPECIAL PRESENTATIONS
A. Proclamation: Domestic Violence Awareness Month - October 2026 B. Proclamation: Arlene Patton for service on Open Space & Parkland Advisory Committee C. Proclamation: Fire Prevention Month - October 2026

CONSENT CALENDAR
Persons wishing to address the Council on any Consent Calendar item may do so at this time. Each speaker will be allotted three minutes. Those wishing to address the Council on any item listed on the agenda should submit a speaker card to the City Clerk.

City Council Regular Meeting 3 September 28, 2026
Public meetings are a limited public forum, meaning that there are rules for commenting at these meetings. Comments on consent agenda items must relate to that specific item.

If comments do not relate to a specific agenda item, then City will provide you with an initial warning to stay on topic. If the warning is not followed, the Mayor will direct the City Clerk to cut off the microphone.

Items on the consent calendar will be adopted by one motion unless a Councilmember requests, before the vote on the motion, to have an item discussed. Time limit on comments is three minutes or less.

1. Continuation of Proclamation of Local Emergency at the Pacifica Municipal Pier and the Order of Director of Emergency Services Relating to Temporary Closure of the Pier PROPOSED ACTION:

1. Accept report and by motion, make a determination that conditions of a local emergency continue to exist at the Pacifica Municipal Pier.

2. Determine, by at least a four-fifths vote, that there is a need to continue the emergency action taken pursuant to Public Contract Code section 22050 for the emergency investigation and stabilization of the Pacifica Municipal Pier.

2. Adopt Resolution Amending the City's Conflict of Interest Code to Revise the List of Designated Employees
PROPOSED ACTION: Adopt the resolution amending the Administrative Policy No. 26 and the City of Pacifica Conflict of Interest Code to revise the list of Designated Employees and repealing Resolution No. 86-2024.

3. Quarterly Financial Report for the quarter ending June 30, 2026 PROPOSED ACTION: Review and accept the Quarterly Financial Report for the quarter ending June 30, 2026

4. Quarterly Treasurer’s Report for the quarter ending June 30, 2026 PROPOSED ACTION: Review and accept the Quarterly Treasurer’s Report for the quarter ending June 30, 2026

5. Resolution Authorizing Amendment 1, Task Order 4 and Task Order 5 with DHI Water and Environment Inc. for consulting services in the amount of $54,560 for the CCWRP Process Optimization Projects
PROPOSED ACTION: Adopt a Resolution approving Amendment 1, Task Orders 4 and 5 with DHI Water and Environment Inc. (DHI) for consulting services in the amount of $49,600 for the CCWRP Process Optimization Projects; Increase the value of the Master Consultant Services Agreement to $129,560; Approve budget authorization in the amount of $54,560 which includes a 10% contingency in the amount of $4,960; and Authorize the City Manager to execute all documents related to the project.

6. Proposition 1, the Veterans and Affordable Housing Bond Act of 2026 PROPOSED ACTION: Consider a resolution of support for Proposition 1, the Veterans and Affordable Housing Bond Act of 2026.

7. Adoption of an Ordinance to repeal and replace Article 41 Density Bonus Program and Article 47 City of Pacifica Below Market Rate (Inclusionary) Program of the City of Pacifica Zoning Regulations (Title 9, Chapter 4 of the Pacifica Municipal Code) relating City Council Regular Meeting 4 September 28, 2026
to the implementation of state density bonus law and regulations for inclusionary housing and below market rate units, respectively.

PROPOSED ACTION: Adopt an Ordinance of the City Council or the City of Pacifica to repeal and replace Article 41 (“Density Bonus Program”) and Article 47 (“City of Pacifica Below Market Rate (Inclusionary) Program”) of Chapter 4, Title 9, of the Pacifica Municipal Code; and find adoption of the Ordinance exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3), “General Rule”.

PUBLIC COMMENTS ON ITEMS NOT ON THE POSTED AGENDA
This portion of the Agenda is available for the public to address the City Council on any issue that is not on the Agenda. Any person wishing to address the Council shall be recognized by the Mayor during this time, provided, however, that only items not on the Agenda for that meeting may be addressed. Comments on non-agendized items must address matters within the subject matter jurisdiction of the City. If comments do not address matters within the subject matter jurisdiction of the City, the City will provide you with an initial warning to stay within the subject matter jurisdiction of the City. If the warning is not followed, the Mayor will direct the City Clerk to cut off the microphone.

Councilmembers shall not enter into debate with speakers under Public Comments on Items Not on the Posted Agenda. A maximum of three minutes will be allowed for any speaker.

PUBLIC HEARINGS

8. Consideration of an appeal of the Planning Commission’s August 3, 2026, denial of an appeal of the Final Inconsistency Letter determinations by the Community Development Director that the Coastal Crest project is subject to (1) Ordinance 391-CS (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the project site); and (2) the 2025 Local Coastal Land Use Plan. The Coastal Crest project is an application for a Coastal Development Permit (CDP-477-25), Site Development Permit (PSD-876-25), Development Plan (DP-92-25), Specific Plan (SP-192-25), Tree Permit (TP-14-25), and Sign Permit (S-138-25) for development of 1,225 rental dwelling units in 20 apartment buildings and 26 townhomes on an approximately 86.39-acre site comprised of three undeveloped parcels (APNs 018-150-110, 018-150-120, 018-150- 150) known as Coastal Crest Residences (File No. 2025-036).

PROPOSED ACTION: Adopt the attached resolution denying the appeal, affirming the Planning Commission’s August 3, 2026, decision, and upholding the Community Development Director’s determinations that the project is subject to (1) Ordinance 391- CS, and (2) the 2025 Local Coastal Land Use Plan, as set forth in the Final Inconsistency Letter dated June 5, 2026

9. Resolution of the City Council of the City of Pacifica to revise the schedule for payments in lieu of providing Below Market Rate Units under the Inclusionary Housing Program and establishing annual adjustments based on the Consumer Price Index for San Franscico-Oakland-Hayward, CA
PROPOSED ACTION: Adopt a Resolution of the City Council of the City of Pacifica to revise the schedule for payments in lieu of providing Below Market Rate Units under the Inclusionary Housing Program and establishing annual adjustments based on the Consumer Price Index for San Franscico-Oakland-Hayward, CA; and Find the fee adoption exempt from California Environmental Quality Act.

City Council Regular Meeting 5 September 28, 2026
CONSIDERATION - NONE.

COUNCIL COMMUNICATIONS
The purpose of Council Communications is for Councilmembers to inform each other of items of potential interest to other Councilmembers, such as interagency meetings.

STAFF COMMUNICATIONS
The purpose of Staff Communications is for the City Manager to offer announcements as appropriate.

ADJOURN
NOTICE: If you challenge a city's zoning, planning or other decision in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Judicial review of any city administrative decision may be had only if a petition is filed with the court not later than the 90th day following the date upon which the decision becomes final. Judicial review of environmental determinations may be subject to a shorter time period for litigation, in certain cases 30 days following the date of the final decision The Pacifica Municipal Code is available online at the City’s website (www.cityofpacifica.org/municode);

HOW TO OBTAIN CITY COUNCIL AGENDAS
Posted agendas:

Agendas are posted no later than Friday prior to the City Council meeting date, at the entrance to the City Hall location at 170 Santa Maria Avenue, Pacifica.

View on the Internet:

Follow the link to Council agenda, at www.cityofpacifica.org E-mail subscription:

Send a request to Sarah Coffey, at [email protected] City Clerk’s Office/City Manager’s Office
City Hall, 170 Santa Maria Ave.

Council meetings:

Agendas are available at the City Council meeting

HOW TO REACH YOUR GOVERNMENT OFFICIALS
• San Mateo County Supervisor Ray Mueller, District 3, 500 County Center, Redwood City CA 94063 (650) 363-4569
• Governor Gavin Newsom, State Capitol Building, Sacramento CA 95814 (916) 445-2841 • State Senator Josh Becker, 1528 So. El Camino Real, Suite 303, San Mateo CA 94402 (650) 212-3313 • Assembly Member Marc Berman, 721 Colorado Ave, Suite 101, Palo Alto CA 94303 (650) 324-0224 • Congressman Sam Liccardo, 1117 Longworth House Office Building, Washington DC 20515 (202) 225-8104
• Senator Alex Padilla, 331 Hart Senate Office Building, Washington DC 20510 (202) 224-3553 • Senator Adam Schiff, SD-B40B Dirksen Senate Office Building, Washington DC 20510 (202) 224-3841 • President Donald J. Trump, 1600 Pennsylvania Ave. NW, Washington DC 20500 City Council Regular Meeting 6 September 28, 2026

CITY COUNCIL
• Mayor Christine Boles, [email protected]
• Vice Mayor Greg Wright, [email protected]
• Councilmember Sue Beckmeyer, [email protected]
• Councilmember Mary Bier, [email protected]
• Councilmember Mayra Espinosa, [email protected]

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Continuation of Proclamation of Local Emergency at the Pacifica Municipal Pier and the Order of Director of Emergency Services Relating to Temporary Closure of the Pier RECOMMENDED ACTION:

1. Accept report and by motion, make a determination that conditions of a local emergency continue to exist at the Pacifica Municipal Pier.

STAFF CONTACT:

Sean Charpentier, City Manager
(650) 738-7409
[email protected]
Jim Porter, Interim Director of Public Works
(650) 738-3767
[email protected]
BACKGROUND/DISCUSSION:

On June 5, 2026, the City Manager, acting in his capacity as Director of Emergency Services, proclaimed the existence of a local emergency pursuant to PMC 4-2.05(a) and executed the "Proclamation of the Existence of a Local Emergency at the Pacifica Municipal Pier ("Proclamation"). On June 8, 2026, the City Council of the City of Pacifica adopted Resolution No. 33-2026 to ratify the Proclamation of local emergency regarding the Pacifica Municipal Pier (Attachment 1). The City’s Proclamation was sent to the San Mateo County Office of Emergency Services and the California Governor’s Office of Emergency Services (CalOES) and allows the City to seek state and federal funds relating to the emergency. Pursuant to Government Code section 8630, the City Council must review the need for continuing the local emergency at least once every 60 days until the City Council terminates the local emergency, and must proclaim the termination of the local emergency at the earliest date that conditions warrant. This review of the local emergency proclamation is separate from, and in addition to, the City Council's review of the emergency contracting action described below under Public Contract Code section 22050.

This proclamation of local emergency was based on the following findings. On Thursday, June 4, 2026, Public Works staff were notified of damages to the Pacifica Municipal Pier. Public Works Engineering and Field Services staff responded to the notification and inspected the Pacifica Municipal Pier and found cracking, separation, and displacement of the concrete walkway and structural elements near the abutment and Chit Chat Café (“Conditions”). 1 Packet Pg. 7
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Public Works Field Services staff closed off the Pier and abutment area from public access due to the unstable and unsafe Conditions. The City’s Chief Building Official also issued a “red-tag” for the Chit Chat Café, as the restaurant is unsafe for occupancy. The utilities to Chit Chat Café have been cut and capped off. The preliminary structural engineering assessment from the City’s consultants revealed there is extensive damage which will likely require major reconstruction of the abutment. On June 9, 2026, the City demolished the Chit Chat Café due to the continued settling of the abutment to prevent the structure from falling into the ocean, resulting in significant environmental cleanup costs.

The City completed short-term stabilization by placing rock revetment around the abutment. The City is awaiting a design from its structural engineers for a temporary brace around the first deck to stabilize the Pier until a permanent solution can be identified. The Pier will remain closed until it can be determined that the facility is safe for public use.

Since declaring the local emergency, the City has taken the following steps to stabilize the Pier:

The City completed placement of temporary rock revetment around the pier abutment to provide support and slow its continued settlement. The City continues to monitor the condition of the Pier and is pursuing additional emergency stabilization measures intended to provide interim support for the abutment and first deck of the Pier.

The abutment and first deck of the Pier remain structurally unstable, and the Pier continues to be unsafe for public access. Additional emergency stabilization work remains necessary to reduce the risk of further structural movement.

As part of the emergency stabilization efforts, the City issued an emergency Request for Proposals (RFP) for emergency stabilization work at the Pacifica Municipal Pier. Following the City’s evaluation of the proposal received in response to the RFP, the City selected a qualified contractor and the City Council ratified the resulting emergency agreement on August 24,2026, as described below
Since the previous continuation of the local emergency on September 14, 2026, Power Engineering Construction Co. has continued the investigation and design work authorized under the Phase 2 Task Order and Limited Notice to Proceed (LNTP) that the City fully executed on September 3, 2026. Power Engineering is currently developing designs for the emergency stabilization work. Construction is not authorized under the current LNTP and will require separate authorization from the City.

The emergency investigation and stabilization work is being performed under the City's emergency contracting authority pursuant to Public Contract Code sections 20168 and 22050, which authorized the City to procure this work without giving notice for competitive bids. Under Public Contract Code section 22050, the City Council must review the emergency action at its next regularly scheduled meeting after the action is taken, and at every regularly scheduled meeting thereafter until the action is terminated, and must determine, by a four-fifths vote, that there is a need to continue the emergency action. Consistent with that requirement, the City Council reviewed and ratified the emergency contracting action on August 24, 2026, and on September 14, 2026, determined that there was a need to continue the emergency action. Staff recommends that the City Council again determine that there is a need to continue the emergency action. As with the local emergency proclamation, the City Council must terminate the emergency action at the earliest date that conditions warrant so that any remaining work may be completed through competitive bidding.

The conditions that caused the local emergency continue to exist and therefore Staff and the City Manager (Director of Emergency Services) recommend continuance of the local emergency and continuation of the emergency contracting action under Public Contract Code section 1 Packet Pg. 8
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22050.

FISCAL IMPACT:

The fiscal impacts associated with the emergency are covered under the Disaster Accounting Fund and no additional budget authority is necessary as sufficient funds have been previously approved in the Disaster Accounting Fund to pay for the demolition and other associated projects. The continuation of the local emergency will facilitate the ability for the City to request resources including financial support and reimbursement from the California Governor’s Office of Emergency Services (CalOES) and Federal Emergency Management Agency (FEMA) for costs incurred in preparation and/or response to the emergency.

ORIGINATED BY:

Public Works
ATTACHMENT LIST:

Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (PDF)
1 Packet Pg. 9
ATTACHMENT 1 1.a
Packet Pg. 10
Attachment: Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (6303 :

1.a
Packet Pg. 11
Attachment: Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (6303 :

1.a
Packet Pg. 12
Attachment: Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (6303 :

1.a
Packet Pg. 13
Attachment: Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (6303 :

1.a
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Attachment: Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (6303 :

1.a
Packet Pg. 15
Attachment: Attachment A: Resolution No.33-2026 and Proclamation of Local Emergency Regarding the Pacifica Municipal Pier (6303 :

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Adopt Resolution Amending the City's Conflict of Interest Code to Revise the List of Designated Employees
RECOMMENDED ACTION:

Adopt the resolution amending the Administrative Policy No. 26 and the City of Pacifica Conflict of Interest Code to revise the list of Designated Employees and repealing Resolution No. 86- 2024.

STAFF CONTACT:

Sarah Coffey, City Clerk
650-738-7307
[email protected]
BACKGROUND/DISCUSSION:

California Government Code 87306.5 requires that each local agency review and, if necessary, revise its Conflict of Interest Code in even-numbered years. The City is required to review and, if necessary, revise its list of "Designated Employees" when the City creates new positions, revises job titles, eliminates positions or conducts a structural reorganization within City departments. Public officials designated in Government Code section 87200 must file Statements of Economic Interest (Form 700s). Additionally, pursuant to the City's Conflict of Interest Code, certain designated City employees and certain consultants who hold positions that involve making or participating in the making of decisions which may foreseeably have a material effect on the holder’s financial interests must file Statements of Economic Interest (Form 700s). A Conflict of Interest Code was first approved by Resolution No. 16-79, which has been amended periodically as noted below.

In order to comply with State law, the City must now amend and update its Conflict of Interest Code. Staff has reviewed new positions created and revised job descriptions that have been adopted subsequent to the update to the Conflict of Interest Code in September 2024.

Accordingly, staff recommends adoption of a resolution amending the City's Conflict of Interest Code to revise the list of designated employees to reflect current positions. Exhibit A of Administrative Policy No. 26, attached to the resolution included with this report reflects these changes, and is intended to supersede and repeal Resolution No. 86-2024, which approved the last Conflict of Interest amendment on September 23, 2024.

Subsequent to the update of the Conflict of Interest Code by Resolution No. 86-2024, the City completed a Comprehensive Classification Study in 2025 and adopted an updated Classification Plan through the adoption of Resolution No. 39-2025 on May 27, 2025.

Subsequent to the adoption of the Classification Plan, Resolution No. 42-2025 was adopted by the City Council on June 23, 2025, approving a Job Classification update from “Economic 2 Packet Pg. 16
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Development Manager” to “Economic and Housing Development Manager” and adding a job classification for “Economic and Housing Development Specialist”. Proposed amendments to the Designated Employees listed in Exhibit A reflect updated Job Classification Titles, including changing the title of Economic Development Manager to Economic and Housing Development Manager and remove positions that are no longer reflected in the current Classification Plan.

Senate Bill 852 (SB 852) enacted in 2025 and effective January 1, 2026 does not alter the Form 700 filing mandate for specific public officials, but modifies where and how their Form 700’s must be filed. SB 852 amends Government Code Section 87500 to require that public officials who manage public investments, as defined by Regulation 18700.3(b), file Form 700’s using the Fair Political Practices Commission (FPPC)’s electronic filing system instead of filing the Form 700 with the local filing officer / City Clerk. Government Code Section 87200 lists this category with other statutory filers. Staff review of job classifications identifies the Assistant City Manager, the Finance and Administrative Services Director / City Treasurer and the Deputy Finance Director as public officials who manage public investments. Therefore, the amendments to Exhibit A reorganizes the listing to note that these positions constitute public officials who manage public investments and they are required to file Form 700 under Government Code Section 87200.

With the amendments to the list of Designated Employees (Exhibit A) the City's Conflict of Interest Code accurately reflects those positions that may make or participate in making decisions which may foreseeably have a material effect on the holder’s financial interests.

Making a decision may include voting on a matter, approving the budget, adopting policy, making purchasing decisions and/or entering into contracts. Participating in a decision includes negotiating the terms or a contract, writing the specifications of a bid and/or advising or making recommendations to a decision-maker or governing body without significant intervening substantive review.

Notable amendments to the list of Designated Employees based on these criteria and the review of new and revised job classifications are summarized in the following tables:

Amended Position Titles:

Existing Title Updated Title Reason for Amendment Disclosure Category
Economic Development
Manager
Economic and Housing
Development Manager
reclassification and title
change adopted by
Resolution No. 42-2025
1 Community Development
Director
Director of Community
Development
consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
1 Community Development
Deputy Director
Deputy Director of
Community Development
consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
1 Director of Public Works Director of Public Works /
City Engineer
consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
1 Deputy Director of Public Deputy Director of Public consistency with the current 1 2 Packet Pg. 17
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Works / City Engineer - Field
Services & Engineering
Works - Field Services &
Engineering
Classification Plan adopted
by Resolution No. 39-2025
Engineering Manager -
Wastewater
Engineering Manager consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
1 Wastewater Treatment Plant
Operations Manager
Wastewater Plant
Operations Manager
consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
4(a)
Public Works Superintendent
- Streets, Parks, Facilities &
Motor Pool
Public Works
Superintendent
consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
4(a)
Motor Pool Supervisor Public Works Supervisor
(Motor Pool)
consistency with the current
Classification Plan adopted
by Resolution No. 39-2025
4(a)
Paramedic Coordinator EMS Chief consistency with the current Classification Plan adopted
by Resolution No. 39-2025
4(a)
Added Position to Exhibit A:

Position Added Reason for Addition Disclosure
Category
Deputy Director of Parks
Beaches & Recreation
Position was added subsequent to 2024 Conflict
of Interest Code Update and is now included in
the Classification Plan adopted by Resolution No.
39-2025; position includes participation in
governmental decisions that may foreseeably
have a material financial effect, negotiates terms
of contracts, and acts as Director in the Director’s
absence
1 Removed Positions from Exhibit A:

Position RemovedReason
for RemovalDisclosure
Category
Management Analyst II performs work under the general supervision of the assigned Department Head or other
management staff member
1 Principal Civil Engineer this job classification is no longer referenced in the current Classification Plan
1 Assistant Civil Engineer this position is an entry-level position that performs work under close supervision of the
Engineering Manager
4(a)
Senior Project Engineer -
Wastewater
this job classification is no longer referenced in
the current Classification Plan
4(a)
The Disclosure Categories listed in Exhibit B and referenced in the above tables summarizing the amendments to Exhibit A include the following:
1 = Full Disclosure - All interests in real property located within the jurisdiction, as well as 2 Packet Pg. 18
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investments, business positions and sources of income, including gifts, loans and travel payments.
2 = Full Disclosure (excluding interests in real property) - All investments, business positions and sources of income, including gifts, loans and travel payments. 3 = Interests in Real Property - All interests in real property located in the jurisdiction. 4(a) = General Contracting Category (a) for individuals who contract for the entire agency - All investments, business positions and income, including gifts, loans and travel payments, from sources that provide leased facilities, goods, equipment, vehicles, machinery or services, including training or consulting services, of the type utilized by the City of Pacifica.
4(b) = General Contracting Category (a) for individuals have contracting authority for a specific department - All investments, business positions and income, including gifts, loans and travel payments, from sources that provide leased facilities, goods, equipment, vehicles, machinery or services, including training or consulting services, of the type utilized by the employee’s department or area of authority. 5 = Regulatory, Permit or Licensing Agency - All investments, business positions and income, including gifts, loans and travel payments, from sources that either contract to provide education or training required by the City of Pacifica to qualify for or maintain a license, or entities that provide education or training services which courses or curricula are approved by the City of Pacifica.
6 = Grant/Service Providers/Agencies that Oversee Programs - All investments, business positions and income, including gifts, loans and travel payments, or income from a nonprofit organization, if the source is of the type to receive grants or other monies from or through the City of Pacifica.

Generally, the Disclosure Categories (1), (4a) and (4b) apply to the designated positions of City of Pacifica employees as indicated in Exhibit A. The additional Disclosure Categories defined would be reviewed for applicability to new positions created and/or Consultants whose contractual obligations include participating in making governmental decisions and/or decisions that may have a material financial effect on real property within the jurisdiction. The various Disclosure Categories are defined to allow for flexibility to limit the disclosure requirements to the scope of duties the position is contracted to perform.

Staff recommends the adoption of the resolution amending Administrative Policy No. 26 and the attached updated Conflict of Interest Code incorporating Exhibit A (Designated Positions).

Exhibit B defines the Disclosure Categories and is attached for reference. No changes have been made to Exhibit B - Disclosure Categories.

FISCAL IMPACT:

None.

ORIGINATED BY:

City Clerk
ATTACHMENT LIST:
2 Packet Pg. 19
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Exhibit A: Conflict of Interest Code - Designated Positions Redline and Clean Versions (PDF) Exhibit B: Disclosure Categories (PDF)
Attachment C: 2026 Conflict of Interest Code Instructions to Local Agencies - Biennial Update (PDF)
2 Packet Pg. 20
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RESOLUTION NO. ______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AMENDING ADMINISTRATIVE POLICY NO. 26 THE CITY OF PACIFICA’S CONFLICT OF INTEREST CODE FOR DESIGNATED EMPLOYEES AND REPEALING RESOLUTION NO. 86-2024 WHEREAS, pursuant to California Government Code commencing with Section 87300, the City Council is required to adopt and promulgate a Conflict of Interest Code; and WHEREAS, pursuant to Government Code Section 87302, the Conflict of Interest Code shall provide for specific enumeration of the positions within the City, other than those specified in Government Code Section 87200, which involve the making or participation in the making of decisions which may foreseeably have material effect on any financial interest and for each such enumerated position, the specific types of investments, business position interests in real property and sources of income which must be reported; and WHEREAS, the Political Reform Act of 1974, (Government Code Section 8100 et seq.) requires state and local government agencies to adopt a Conflict of Interest Code and the Fair Political Practices Commission (FPPC) has adopted a regulation (2 Cal. Code of Regs. Sections 18730) that contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency’s code. After public notice and a hearing the standard code may be amended by the FPPC to conform to amendments in the Political Reform Act. The terms of 2 California Code of Regulations section 18730, and any amendments to it duly adopted by the FPPC, may be incorporated by reference into a local agency’s conflict of interest code; and
WHEREAS, the City Council approved a Conflict of Interest Code by Resolution No. 16-79 which has been amended from time to time to conform to amendments by approving Exhibit “A” and disclosure categories for certain designated positions with the City of Pacifica; and
WHEREAS, approval of this resolution supersedes and repeals Resolution No. 86- 2024 which approved the last Conflict of Interest amendment; and WHEREAS, it has been determined that the attached Exhibit A accurately sets forth those positions which should be designated, and Exhibit B the categories of financial interests which should be made reportable for each position; and WHEREAS, the Political Reform Act requires review of the Conflict of Interest Code every two (2) years to determine whether it is accurate or whether it should be amended; and
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WHEREAS, the City desires to update its current Conflict of Interest Code to revise the list of designated positions and disclosure categories and to update references to accurately reflect current positions in Administrative Policy No. 26.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pacifica that Administrative Policy No. 26, including Exhibit A and Exhibit B attached hereto and incorporated by reference and the terms of 2 California Code of Regulations section 18730, as may be amended, shall constitute the City of Pacifica’s Conflict of Interest Code.

BE IT FURTHER RESOLVED that individuals holding designated positions identified in Exhibit A shall file Statements of Economic Interests (Form 700) with the City Clerk, to whom the City Council hereby designates the authority to carry out the duties of the Filing Officer, in the manner identified by the City Clerk. Statements of Economic Interest shall be made in a form prescribed by the Fair Political Practices Commission and supplied by the City of Pacifica and those noted as required to file under Government Code Section 87200 shall file the required Statement of Economic Interests (Form 700) electronically to the Fair Political Practices Commission (FPPC) through the FPPC’s electronic filing system.

BE IT FURTHER RESOLVED that the effective date of this amendment shall be the date this Resolution is adopted by the City Council and approval of this Resolution supersedes and repeals Resolution No. 86-2024, which approved the last Conflict of Interest amendment.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 28th day of September 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

Christine Boles, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney 2 Packet Pg. 22
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September 28, 2026

CITY OF PACIFICA

ADMINISTRATIVE POLICY
No.
26 STATEMENT OF ACTIVITIES THAT ARE

INCONSISTENT, INCOMPATIBLE OR IN

CONFLICT WITH DUTIES AS A CITY EMPLOYEE
DATES REVISED:
09/28/2026;
09/23/2024;
09/26/2022
DATE ISSUED:
11/1998
PURPOSE:

It is the purpose of this policy to set forth the minimum ethical standards that are to be followed by all City employees. These standards are intended to avoid activities that may result in using a public office or employment for private gain, to maintain public confidence in the City by prohibiting activities that might permit opportunity for personal gain, and to identify activities which are inconsistent, incompatible, or in conflict with the duties of a City employee pursuant to Government Code Section 1126.

POLICY:

1. General Standards of Conduct
No official or employee of the City of Pacifica shall engage in any employment, activity or enterprise for compensation which is inconsistent, incompatible, in conflict with, or inimical to his or her duties as a City officer or employee. The following activities are deemed inconsistent, incompatible, or in conflict with the duties of an official or employee of the City of Pacifica:

A. Using the prestige, influence, business card, peace officer powers, badge or uniform of the City of Pacifica for the employee’s or officer’s private gain or for the private gain of another.

B. Using City time, facilities, equipment or supplies for private gain.

C. Using confidential or inside information available by virtue of one’s City employment or office for private gain or for the private gain of another.

D. Receiving money or other consideration from anyone other than the City of Pacifica for performing an act that the officer or employee would be required or expected to render in the regular course or hours of his or her City employment, or as part of his or her duties as a City officer or employee.

E. Engaging in outside employment or activities which involve time demands which prevent the employee from devoting his or her full-time attention and efforts to his or her City employment during his or her hours of duty.
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F. Receiving or accepting, directly or indirectly, any gift, including money, discount in price or value, service, gratuity, favor, entertainment, loan or any other thing of value, from anyone who is doing business with, or which may reasonably be expected to do business with, the City of Pacifica under circumstances from which it reasonable could be substantiated that the gift was intended to influence the officer or employee in his or her official duties or was intended as a reward for any official actions performed by the officer or employee.

2. Specific Prohibited Activities
A. Real Estate Investment
One of the major functions of the City is the review and inspection of current development projects in the City. Certain City staff develop an intimate knowledge of development standards and processes in their role as a City employee reviewing private development projects and issuing development permits. These employees also develop a special knowledge of property in the City because of their duties and responsibilities in this program area.

The involvement of certain employees in certain property investment and transactions in the City could provide them with an unfair advantage over the general public in such matters because of their specialized knowledge and development review role. Although there may not be any legal conflict of interest, these employees may have a special advantage in such matters. Their involvement is also complicated by their role in the review and approval of development permits.

In order to insure that City employees do not use their positions to unfair advantage in property investments or transactions in the City, it shall be the policy of the City to prohibit designated employees from engaging in such activities while employed by the City. Employees prohibited from investment or property transactions in the City shall be the City Manager, the City Attorney, the Director of Community Development & Services, the Fire Marshal, the Director of the Department of Public Safety Police Chief, the Fire Chief, the Deputy Chief of the Fire Services Division of the Department of Public Safety, Deputy Fire Chief, the Deputy Chief of Police Services of the Department of Public Safety, the Crime Prevention Officer, and planning, engineering and inspection staff involved in the development, review and inspection of development projects. All other City employees shall be prohibited from attempting to use City Staff to give them special information or an unfair advantage in private acquisition, rental or improvement of an employee’s personal residence shall be excluded from this policy prohibition. An individual real estate investment or transaction by a designated employee may be permitted only with permission of the City Manager, or, in the case of the City Manager, with permission of the City Council, after a determination that such an investment or transaction is not incompatible or in conflict with the employee’s official duties.

3. Cause for Discipline
Violation of any of the provisions of this policy may result in such disciplinary action as is warranted, which can include termination.

4. Appeal Procedure
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Employees and Department Directors are encouraged to resolve any differences of interpretation of this policy at the lowest level. Employees are encouraged to discuss prospective outside employment with their Department Director prior to accepting such employment. Employees bear full responsibility for assuring that they comply with Administrative Policy No. 26.

In the event an employee is notified that he or she has violated any provision of this policy, or that any outside employment is in violation of this policy, the employee may appeal in writing to the City Manager.

5. Scope of this Policy
The standards of conduct in this policy are in addition to any prescribed by state or local law, including the City of Pacifica’s Personnel Rules, departmental rules and regulations, and any applicable Memorandum of Understanding (“MOU”). In the event of any conflict between this policy and an MOU, the provisions of the MOU shall govern.

EXHIBIT A: Conflict of Interest Code
EXHIBIT B: Disclosure Categories
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Attachment: Exhibit A: Conflict of Interest Code - Designated Positions Redline and Clean Versions (6306 : Biennial Conflict of Interest Code

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Attachment: Exhibit A: Conflict of Interest Code - Designated Positions Redline and Clean Versions (6306 : Biennial Conflict of Interest Code

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Attachment: Exhibit A: Conflict of Interest Code - Designated Positions Redline and Clean Versions (6306 : Biennial Conflict of Interest Code

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Attachment: Exhibit A: Conflict of Interest Code - Designated Positions Redline and Clean Versions (6306 : Biennial Conflict of Interest Code

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Attachment: Exhibit A: Conflict of Interest Code - Designated Positions Redline and Clean Versions (6306 : Biennial Conflict of Interest Code 1 EXHIBIT B

DISCLOSURE CATEGORIES
1) Full Disclosure
All interests in real property located within the jurisdiction, as well as investments, business positions and sources of income, including gifts, loans and travel payments. 2) Full Disclosure (excluding interests in real property) All investments, business positions and sources of income, including gifts, loans and travel payments.
3) Interests in Real Property
All interests in real property located in the jurisdiction. 4) General Contracting Categories (Two models)
Note: The first model can be used for an individual who contracts for the entire agency.

The second model is for an individual who has contracting authority for a specific department.
(a) All investments, business positions and income, including gifts, loans and travel payments, from sources that provide leased facilities, goods, equipment, vehicles, machinery or services, including training or consulting services, of the type utilized by the City of Pacifica.
(b) All investments, business positions and income, including gifts, loans and travel payments, from sources that provide leased facilities, goods, equipment, vehicles, machinery or services, including training or consulting services, of the type utilized by the employee’s department or area of authority. 5) Regulatory, Permit or Licensing Agency
All investments, business positions and income, including gifts, loans and travel payments, from sources that either contract to provide education or training required by the City of Pacifica to qualify for or maintain a license, or entities that provide education or training services which courses or curricula are approved by the City of Pacifica. 6) Grant/Service Providers/Agencies that Oversee Programs All investments, business positions and income, including gifts, loans and travel payments, or income from a nonprofit organization, if the source is of the type to receive grants or other monies from or through the City of Pacifica.

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Attachment: Exhibit B: Disclosure Categories (6306 : Biennial Conflict of Interest Code Update) [email protected] 1.866.275.3772 or 916.322.5660
www.fppc.ca.gov FPPC • 076-04.2026 • Page 1 of 1

FAIR POLITICAL PRACTICES COMMISSION
2026 Conflict of Interest Code
Biennial Notice Instructions for Local Agencies
The Political Reform Act requires every local government agency to review its conflict of interest code biennially. A conflict of interest code tells public officials, governmental employees, and consultants what financial interests they must disclose on their Statement of Economic Interests (Form 700).

By July 1, 2026: The code reviewing body must notify agencies and special districts within its jurisdiction to review their conflict of interest codes.

By October 1, 2026: The biennial notice must be filed with the agency’s code reviewing body.

The FPPC has prepared a 2026 Local Agency Biennial Notice form for local agencies to complete or send to agencies within its jurisdiction to complete before submitting to the code reviewing body. The City Council is the code reviewing body for city agencies. The County Board of Supervisors is the code reviewing body for county agencies and any other local government agency whose jurisdiction is determined to be solely within the county (e.g., school districts, including certain charter schools). The FPPC is the code reviewing body for any agency with jurisdiction in more than one county and will contact them.

The Local Agency Biennial Notice is not forwarded to the FPPC.

If amendments to an agency’s conflict of interest code are necessary, the amended code must be forwarded to the code reviewing body for approval within 90 days. An agency’s amended code is not effective until it has been approved by the code reviewing body.

If you answer yes, to any of the questions below, your agency’s code probably needs to be amended.
• Is the current code more than five years old?
• Have there been any substantial changes to the agency’s organizational structure since the last code was approved?
• Have any positions been eliminated or re-named since the last code was approved? • Have any new positions been added since the last code was approved? • Have there been any substantial changes in duties or responsibilities for any positions since the last code was approved?
If you have any questions or are still not sure if you should amend your agency’s conflict of interest code, please contact the FPPC. Additional information including an online webinar regarding how to amend a conflict of interest code is available on FPPC’s website.

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Attachment: Attachment C: 2026 Conflict of Interest Code Instructions to Local Agencies - Biennial Update (6306 : Biennial Conflict of Interest

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Quarterly Financial Report for the quarter ending June 30, 2026 RECOMMENDED ACTION:

Review and accept the Quarterly Financial Report for the quarter ending June 30, 2026 STAFF CONTACT:

Marisol Gómez, Director of Finance and Administrative Services (650) 501-0257
[email protected]
Lucy Xie, Deputy Finance Director
(650) 501-6014
[email protected]
BACKGROUND/DISCUSSION:

Fiscal sustainability remains one of the City Council strategic priorities, which includes planning for and implementing long-term financial health and stability. A key component of this goal includes preparing a quarterly financial report that would provide readers with an executive summary of the City’s current economic conditions related to the annual operating budget.

On June 23, 2025, the City Council adopted the FY 2025-2026 Budget.

The Quarterly Financial Report summarizes the City’s General Fund and is not meant to be inclusive of all finance and accounting transactions. This report intends to provide the Council and the public with a broad overview of the City’s operations and fiscal condition. This report provides an update on the financial status of the City’s General Fund by outlining the revenues and expenditures for the quarter ending June 30, 2026.

General Fund is the City’s primary operating fund and is used to account for day-to-day activities. It receives unrestricted revenues and provides the City’s general administrative services, law enforcement, fire, public works, parks, beaches and recreation, and community development-related activities such as planning, building, and engineering. Revenue sources include but are not limited to Property Tax, Sales Tax, Transient Occupancy Tax (TOT), business registration, and current fees for services such as parking charges, engineering, planning, building permit fees, and recreation services.

The Fourth Quarter Financial Report provides an update on the financial status of the City’s General Fund, outlining revenues and expenditures as of June 30, 2026.

The General Fund financial report is generally prepared on a cash basis, under which revenues are recognized when received and expenditures are recorded when payments are made.

However, the First and Fourth Quarter reports are typically prepared on a modified cash basis to account for the fiscal year-end close.
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The First Quarter report reflects certain revenues and expenditures received or paid during the quarter that pertain to the prior fiscal year and are therefore accrued back to that year. Similarly, the Fourth Quarter report includes revenues earned and expenditures incurred during the fiscal year that may not be received or paid until after year-end. These adjustments ensure that financial activity is reported in the appropriate fiscal year and provide for more accurate budget monitoring and year-over-year comparability.

Summary of the Q4 Financial Report
With the completion of the Fourth Quarter, General Fund Revenues & Transfers In were $56.42 million (105% of budget), and Expenditures & Transfers Out were $51.48 million (93% of budget). Attachment 1 provides additional information on the City’s financial condition as of the end of the Fourth Quarter of the FY 2025-26. Overall, the FY 2025-26 General Fund is currently projecting a favorable year-end variance.

It is important to note, however, that these figures remain preliminary and will continue to change as year-end closing entries are completed. In addition, the favorable variance should not be interpreted as an equivalent amount of ongoing available revenue or structural budget improvement, as the results reflect a combination of one-time revenues, expenditure savings, timing differences, vacancies, and other factors that may not recur in future years.

The City is still completing fiscal year-end close, including final accruals and other audit-related entries, as well as identifying purchase order and other authorized expenditure carryforwards into FY 2026-27. These adjustments may reduce or otherwise change the projected year-end result. Final General Fund results will be reported following completion of the year-end closing and audit process.

ALTERNATIVE ACTION:

There is no reasonable alternative to this informational item, as not accepting the Quarter Financial Reports will not change the City’s financial condition at the end of each quarter.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Approval of the Fourth Quarter Financial Report is consistent with the following Council adopted Goals:
• Enhance organizational and fiscal stability: Preparation and presentation of the Quarterly Financial Report support sound budget monitoring, fiscal oversight, and adherence to the City’s adopted financial policies and controls by tracking revenues and expenditures against the approved budget.
• Broaden public communications and collaboration: Filing of the Quarterly Financial Report promotes transparency and accountability by providing the City Council and community with the City’s revenue performance, expenditure trends, and overall fiscal position.

FISCAL IMPACT:

There is no fiscal impact associated with this report, as it is retrospective in nature and reflects prior-period activity; however, the Quarterly Financial Report summarizes revenues and expenditures that directly affect the City’s overall fiscal condition. 3 Packet Pg. 34
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ORIGINATED BY:

Administrative Services
ATTACHMENT LIST:

Attachment 1 - Q4 FY2025-26 Quarterly Financial Report (PDF) 3 Packet Pg. 35
City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
1 OVERVIEW
This Fourth Quarterly Financial Report is an analysis of the unaudited financial status of the City’s General Fund from July 1, 2025 through June 30, 2026. The City of Pacifica has completed the Fourth Quarter of the Fiscal Year 2025‐26.

The Fourth Quarter Financial Report will summarize the City’s General Fund and is not meant to be inclusive of all finance and accounting transactions that are yet to come subject to final audit. This report intends to provide the Council and the public with a broad overview of the City’s fiscal condition, as the General Fund is the City’s primary operating fund and is used to account for most operational activities. Information presented in this report is unaudited, and additional adjustments may occur during year-end and audit process.

GENERAL FUND
General Fund Financial Condition: This first table provides a snapshot of General Fund Expenditures by department for Q4 FY 2024-25 and Q4 FY 2025-26, comparing the year-over-year changes and the percentage of the FY 2025-26 Amended Budget spent as of Q4.

With twelves months data in, General Fund Revenues & Transfers In are at 105% of the FY 2025-26 Budget. General Fund Expenditures & Transfers Out are at 93% of projections. At this time, actual revenues exceed actual expenditures by $4,933,455. This amount is preliminary and should not yet be considered a final addition to General Fund balance.

This quarter’s revenues showed a 16% increase compared to the prior year’s fourth quarter revenues. This quarter’s expenditures show an 8% increase compared to the prior year’s fourth quarter.

Table 1: General Fund Quarterly Summary as of June 30, 2026

The General Fund Balance as of June 30, 2026, is estimated to be $27,569,102, based on the audited General Fund balance of $22,635,647 as of the end of FY 2025-26 and factoring in year-to-date net change of $4,933,455 as of the end of the fourth quarter. This amount is preliminary and should not yet be considered a final addition to General Fund balance.

The City is still completing fiscal year-end close, including final accruals and other audit-related entries, as well as General Fund Qtr 4
FY2024-25
Qtr 4
FY2025-26
FY2025-26
Amended
Budget
% Change
Qtr 4 FY24-25
vs
Qtr 4 FY25-26
Qtr 4
% Budget
Revenues $ 47,523,059 $ 54,941,440 $ 52,200,100 16% 105% Transfer in 1,422,000 1,478,800 1,478,800 4% 100% 105%
Expenditures 44,226,412 47,680,385 51,559,921 8% 92%
Transfer Out 2,584,600 3,806,400 3,806,400 47% 100% 93% Net Change in Fund $ 2,134,048 $ 4,933,455 $ (1,687,421)

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Attachment: Attachment 1 - Q4 FY2025-26 Quarterly Financial Report [Revision 1] (6309 : FY2026 Q4 General Fund Financial Report) City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
2 identifying purchase order and other authorized expenditure carryforwards into FY 2026-27. These adjustments may reduce or otherwise change the projected year-end result. Final General Fund results will be reported following completion of the year-end closing and audit process.

Expenditures Highlights: Table 2 presents General Fund Expenditures by Department for Quarter 4 (Q4) of Fiscal Year (FY) 2024-25 and FY 2025-26, alongside the amended budget for FY 2025-26. It also includes the percentage change in expenditures between Q4 of both fiscal years and the percentage of the budget spent in Q4 of FY 2025-26.

Table 2: General Fund Quarterly Expenditures as of June 30, 2026

General Fund expenditures increased $4,675,773 from $46,811,012 in Q4 FY24-25 to $51,486,785 in Q4 FY25-26. At the end of June 30, 2026, 93% of the Amended Budget has been spent suggesting that all departments are on track or slightly under budget for the year. At the end of the Fourth Quarter, there is an increase of 10% year-over-year for expenditures and transfer out.

General Government is about 89% of the budget at Q4 review, and a 21% increase year-over-year. This is mostly due to lower expenditures from the contractual services category from Administrative Services department and City Manager’s offices than the amended budget. The 21% increase over the previous year is largely due to rising payroll expenditures as the Administrative Services Department reached full staffing capacity in FY 2025-26.

Police Department expenditure stands at 92% of the budget. Actual expenditures represent a 3% year-over-year increase, largely due to salaries and benefits, namely the unfunded actuarial liability pension allocation.

Fire Department expenditure stands at 99% of the budget, representing a 2% year-over-year reduction that is primarily driven by lower reimbursable overtime costs due to a reduction in mutual aid fire incidents.

Community Development expenditures stand at 88% of the amended budget. On a year-over-year basis, actual spending increased by 28% (approximately $1.2 million). This growth is primarily driven by professional services for outside planning consultants, reimbursable legal fees, increased staffing, and pension liability allocations.

General Fund Expenditures by
Department
Qtr 4
FY2024-25
Qtr 4
FY2025-26
FY2025-26
Amended
Budget
% Change
Qtr 4 FY24-25
vs
Qtr 4 FY25-26
Qtr 4
% Budget
General Government $ 6,177,583 $ 7,472,255 $ 8,381,005 21% 89% Police Department 12,442,735 12,877,617 13,972,728 3% 92% Fire Department 8,724,444 8,554,566 8,680,659 -2% 99%
Community Development 4,198,937 5,361,412 6,106,335 28% 88% Public Works 4,788,583 5,459,202 5,587,474 14% 98%
PB&R 6,098,322 6,642,292 7,133,895 9% 93%
Non-Departmental 1,795,809 1,313,042 1,697,824 -27% 77% Transfer Out 2,584,600 3,806,400 3,806,400 47% 100%
Total General Fund
Expenditures&TransferOut $ 46,811,012 $ 51,486,785 $ 55,366,321 10% 93%

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Attachment: Attachment 1 - Q4 FY2025-26 Quarterly Financial Report [Revision 1] (6309 : FY2026 Q4 General Fund Financial Report) City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
3 The Public Works Department has utilized 98% of its amended budget, with the small variance attributable to personell costs. On a year-over-year basis, actual expenditures have risen by 14%. This annual growth is mainly driven by an increase in utility expenses combined with rising employee salaries and benefits.

The Parks, Beach & Recreation (PB&R) Expenditures increased by 9% (approximately $0.5 million) year-overyear. This increase is mainly driven by the Unfunded Actuarial Liability (UAL) pension allocations and rising employee health benefit expenditures compared to the previous year. Department remains under budget at 93% of its amended budget. The main contributor of the budget variance is personnel costsfor the Child Care division coming in lower than budget due to staffing vacancies.

Non-Departmental expenditure stands at 77% of the amended budget, representing a 27% year-over-year reduction.

The year-over-year decrease is primarily attributable to a one-time $600,000 legal settlement recorded in June 2025.

Excluding this prior-year one-time expense, the year-over-year change in Non-Departmental expenditures would be significantly smaller. However, additional transactions may still be recorded as part of the year-end adjustments.Transfer Out expenditure stands at 100% of the amended budget, confirming that Council approved transfer entries were recorded appropriately.

Overall, the expenditures in General Fund at this time represent 93% of the amended budget, information presented in this report is unaudited, and additional adjustments may occur during year-end process.

Revenues Highlights: Table 3 outlines General Fund Revenues by Type for Q4 FY2024-25 and Q4 FY2025-26, alongside the FY2025-26 Amended Budget and percentage changes.

Table 3: General Fund Quarterly Revenues as of June 30, 2026

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Attachment: Attachment 1 - Q4 FY2025-26 Quarterly Financial Report [Revision 1] (6309 : FY2026 Q4 General Fund Financial Report) City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
4 The following is a summary of revenues as of the end of the 4th Quarter:

General Fund revenues (including transfers in) increased $7,475,181 from $48,945,059 in Q4 FY2024-25 to $56,420,240 in Q4 FY2025-26, an 15% increase year-over-year. 105% of the Amended Budget has been collected or accrued, indicating strong revenue performance. Information presented in this report is unaudited, and additional adjustments may occur during the year-end and audit process.

Property Tax: Property Tax continues to serve as the City’s primary revenue source, currently outperforming the amended budget projections. The County of San Mateo remitted the two scheduled property tax installments to the City in December 2025 and April 2026, respectively. On a year-over-year basis, revenue increased by 10% ($1,645,125).

This robust growth is partially attributable to property reevaluations triggered by real estate sales, which substantially expanded the City's total assessed valuation base.

Sales Tax and Measure Y: The City has received and accrued 103% of budgeted Sales Tax and 104% of Measure Y sales tax revenues, which includes the recording of July and August receipts from the State of California that are attributable to FY 2025-26. Both revenue sources finished the year modestly (3%) above budget. On a year-over-year basis, Sales Tax grew by $667,000 (26%) and Measure Y by $551,000 (26%), indicating a combination of stronger taxable sales activity compared to the prior year, as well as the impact of higher prices on taxable purchases. Because sales tax revenues can fluctuate based on consumer spending, business activity, inflation, and the timing of State allocations and adjustments, the year-over-year increase should not necessarily be viewed as an indication of a comparable ongoing growth rate.

Transient Occupancy Taxes (TOT): TOT revenue increased 21% year-over-year, with both STR and hotel revenues exceeding the annual budget. STR revenue exceeded budget by approximately $523,000, while hotel revenue exceeded budget by approximately $260,000. The increase was influenced significantly by implementation of the City's new STR ordinance and related changes. STR revenues increased largely due to the one-time collection of taxes attributable to prior periods, as well as implementation of a voluntary compliance agreement with Vrbo that enabled the City to collect TOT directly from STR activity on the platform. Hotel TOT also increased, driven in part by higher hotel occupancy following a substantial reduction in the number of operating STRs after the new ordinance's stricter requirements took effect.

TOT is an economy-sensitive revenue source and can fluctuate based on tourism, lodging demand, and available inventory. TOT is generally remitted approximately 30 days after month-end. Because July receipts attributable to FY 2026 were accrued back to the prior fiscal year, the Fourth Quarter results reflect a full year of TOT activity.

Other Taxes: These include five categories: Franchise tax, Business License, Utility Users Tax, Vehicle License Fee, and Cannabis Operations Tax. Payments for most of these taxes are remitted 30 days after the end of the month. 104% of the Budget has been received as of June 30, 2026.

Franchise Tax declined by 2% year-over-year and will be closely monitored to determine the underlying cause.

However, total collections have already reached 114% of the amended budget, demonstrating that conservative revenue projections accounted for this potential trend.

Business License Tax revenue is tracking well ahead of target, with collections reaching 114% of the budgeted amount and representing a 17% increase year-over-year. This strong performance highlights the diligent collection and compliance review efforts of HdL, the City’s contracted revenue administration partner.

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Attachment: Attachment 1 - Q4 FY2025-26 Quarterly Financial Report [Revision 1] (6309 : FY2026 Q4 General Fund Financial Report) City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
5 Utility Users Tax (UUT) is the second-largest revenue source within the Other Taxes category achieved a 78% collection rate of the $3.6 million budget. With year-over-year growth remaining completely flat, this performance indicates that the collections are not indicative of growth in gas and electric prices. Staff will be embarking on further assessments of remittance and compliance within this category.

Vehicle License Fee (VLF) The Vehicle License Fee (VLF) Property Tax In-Lieu revenue is the premier funding source within the Other Taxes category, currently performing at 109% of its budget with a 5% year-over-year increase.

Accurate forecasting for this revenue remains structurally challenging due to ongoing State budget constraints, constant funding shortfalls, and irregular backfill allocations. In response, San Mateo County—in collaboration with Mono and Alpine counties—is actively engaging with their elected officials and state representatives to advocate for legislative remedies and ensure the local jurisdictions are made whole as soon as possible Cannabis Tax collections currently track at 96% of budgeted projections, experiencing a minor 3% decline year-overyear. Cannabis operators undergo an annual revenue review, however this softening is more indicative of Statewide trends of reduced cannabis revenue.

Excess ERAF (Educational Revenue Augmentation Fund) collections are performing slightly above target at 105% as compared to budget. For background, the year-over-year comparison is unusual as the FY 2024–25 General Fund budget only included $145,000 to support the Council's community nonprofit grant program, as the bulk of those funds were accounted for in the Disaster Accounting Fund and Housing Action Fund. To insulate the General Fund against a projected deficit, the Council approved recording the FY 2025–26 Excess ERAF allocation in the General Fund.

Grants Revenues, which encompass Police grants, Fire OES reimbursements, PB&R child care and senior grants, reached 130% of their total budgeted target, despite posting a 37% decrease year-over-year. The primary driver behind outperforming the budget is the Child Care program, which generated $2.8 million in revenue against a $1.8 million projection, this revenue is due from previous years contracts. The decline as compared to the quarter last year is in other categories of grants receipts, attributed to reduced Fire OES reimbursements, with a difference of approximately $800k.

Investment Earnings including interest income and Parks facility rentals, continue to exhibit strong performance. This year receipts are at 162% of amended budget, and show an 110% increase year-over-year. Driven by proactive staff management of bank deposits, the City has successfully maximized returns within a favorable interest rate environment. Concurrently, facility rentals yielded outstanding results, more than doubling year-over-year with $214,000 recorded this period compared to $102,000 during the same period last year.

Department/Programs: These include building permits, engineering and planning fees, fees related to Parks, Beaches & Recreation programs, and rentals. As of June 30, 2026, the City received 99% of the budget. The year-over-year shows a slight decrease of 1% in these revenues. Overall, permits and planning fees tend to fluctuate based on the timing of projects.

Transfers In consist of indirect cost reimbursements from the NPDES Stormwater Fund (Fund 216), the Gas Tax Fund (Fund 210), and the Sewer Utility Fund (Fund 518). Because the four scheduled quarterly transfer entries are executed in strict accordance with the budgeted allocations, these revenue streams routinely track exactly on target.

SUMMARY

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Attachment: Attachment 1 - Q4 FY2025-26 Quarterly Financial Report [Revision 1] (6309 : FY2026 Q4 General Fund Financial Report) City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
6 The City’s total General Fund expenditures are at approximately 93% of the amended budget at the end of the fourth quarter, while the City’s total General Fund revenues are at 105% of the budget. Overall, staff is pleased to report that preliminary year-to-year results are favorable compared with budget projections.

It is important to note that the figures presented in this report are preliminary, as additional booking entries may be recorded during year-end closing. In addition, the favorable variance should not be interpreted as an equivalent amount of ongoing available revenue or structural budget improvement, as the results reflect a combination of onetime revenues, expenditure savings, timing differences, vacancies, and other factors that may not recur in future years.

Nonetheless, it is encouraging to observe that the budget remains on track as of the end of the fourth quarter.

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Attachment: Attachment 1 - Q4 FY2025-26 Quarterly Financial Report [Revision 1] (6309 : FY2026 Q4 General Fund Financial Report)

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Quarterly Treasurer’s Report for the quarter ending June 30, 2026 RECOMMENDED ACTION:

Review and accept the Quarterly Treasurer’s Report for the quarter ending June 30, 2026 STAFF CONTACT:

Marisol Gómez, Director of Finance and Administrative Services (650) 501-0257
[email protected] <mailto:[email protected]>
Lucy Xie, Deputy Finance Director
(650) 501-6014
[email protected] <mailto:[email protected]>
BACKGROUND/DISCUSSION:

The City Council adopted Administrative Policy 39 - Investment Policy to reflect current law and best practices in accordance with Government Code Section 53600 et seq. The policy provides guidelines for prudent investments and efficient cash management and requires the City to provide the governing body a report regarding the City’s investment activities on a quarterly basis to ensure “compliance” with the statement of investment policy.

The investment policies and practices of the City of Pacifica are strictly based on state law and prudent money management. The investment of funds for the City is directed to the goals of safety, liquidity, and yield, while meeting the cash flow needs of the City through prudent investment of unexpended cash.

Cash and investments held by the City and the trustees are invested in accordance with the City’s Investment Policy and the authority governing investments set forth in the California Government Code, Sections 53601 through 53659. The investment policy for bond proceeds is contained in the relevant bond documents approved by the City Council at the time of the issuance of the debt.

The total cash and investment portfolio book value (cost) held by the City as of June 30, 2026 was $62,726,066. In accordance with GASB 31, the State provides a factor that can be multiplied by the City’s share of the LAIF pool to determine the market value each quarter. Other than LAIF, the fair market value of all other investments is equal to the book and par value.

The City’s current cash and investment holdings include the following components: Managed Investment Portfolio ($0), State of CA Local Agency Investment Fund ($49,610,511), California Asset Management Program (CAMP) Pooled Investment Fund ($0), Cash/Time Deposits ($8,646,972), and accrued interest on investments ($0). Earned interest is the interest generated by an investment over a specific time period. Accrued interest is interest that has 4 Packet Pg. 42
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been earned but not yet been received, while paid interest is interest that has already been received by the City.

The City’s cash and investment portfolio increased by $8,342,825 from $54,383,241 reported for the previous quarter ending March 31, 2026. The increase reflects approximately $23.9 million in cash receipts from various revenue sources, including the second installment of property taxes received in April, offset by approximately $15.6 million of cash disbursements. These disbursements included $7.7 million for payroll and benefits, and $7.9 million for other payments. At the end of the quarter, the City maintained sufficient liquidity to meet its anticipated expenditures for the next six months.

As of June 30, 2026, the City did not hold investments in its Managed Investment Portfolio; therefore, the Weighted Yield to Maturity and Weighted Average Maturity measures have not been applicable for this and prior reporting periods, as the majority of City funds were held in liquid accounts, and no investments matured or were purchased during the quarter.

In May 2026, the City retained Optimized Investment Partners to assist with investment portfolio management, with the goals of improving investment returns while maintaining the safety of principal, sufficient liquidity for City operations, and compliance with the City’s Investment Policy and applicable California Government Code requirements. Finance staff is currently working with Optimized Investment Partners to establish the necessary accounts and begin diversifying the City’s investments.

Going forward, investment activity will be managed in coordination with Optimized Investment Partners, the City Manager, and the Administrative Services Director. As investments are made, future quarterly investment reports will include applicable portfolio performance measures, including yield and maturity statistics.

Federal Reserve and Interest Rate Environment:

At its June 17, 2026 meeting, the Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 3.50% to 3.75%. The Federal Reserve noted that economic activity continued to expand at a solid pace and unemployment remained relatively stable, while inflation remained above the Federal Reserve’s 2% target.

During the quarter, the yield on two-year U.S. Treasury securities increased from approximately

3.79% at the beginning of the quarter to 4.14% at quarter-end, an increase of 35 basis points.

Treasury yields serve as an important benchmark for the returns available on high-quality fixedincome investments and provide context for evaluating the City’s investment performance and opportunities. The increase in yields during the quarter generally improved the return available on newly purchased short-term investments. As the City begins diversifying its investment holdings, staff and the City’s investment advisor will continue to evaluate available investment opportunities consistent with the City’s priorities of safety, liquidity, and yield.

ALTERNATIVE ACTION:

There is no reasonable alternative to this informational item, as not accepting the 4th Quarter Treasurer’s Report will not change the City’s cash position as of the end of the quarter ending June 30, 2026.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Approval of the 4th Quarter Treasurer’s Report is consistent with the following Council adopted Goals:
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• Enhance organizational and fiscal stability: Preparation and presentation of the Quarterly Treasurer’s Report support prudent cash management, financial oversight, and adherence to the City’s adopted Investment Policy and fiscal controls. • Broaden public communications and collaboration: Filing of the Quarterly Treasurer’s Report promotes transparency and accountability by providing the City Council and community with timely information regarding the City’s cash position and investment activity.

FISCAL IMPACT:

There is no fiscal impact associated with this report, as it is retrospective in nature and reflects prior-period activity; however, the Quarterly Treasurer’s Report outlines fiscal transactions that directly affect the City’s financial standing.

ORIGINATED BY:

Administrative Services
ATTACHMENT LIST:

Attachment 1 - Summary of Cash and Investments as of June 30, 2026 (PDF) Attachment 2 - Portfolio Summary and Key Statistics for the Quarter Ended June 30, 2026 (PDF)
Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (PDF) 4 Packet Pg. 44
Par Value (1) Market Value (2) Book Value (3)
Cash & Investments Held by City
Investment Portfolio
Managed Investments
U.S. Bank Custodial Cash Account - $ - $ - $ 0.00%
U.S. Treasury Bill/ Note - - - 0.00%
Federal Agency Bond - - - 0.00%
Certificate of Deposit - - - 0.00%
Managed Investments Subtotal $ - - $ $0 0.00%
Pooled Investments
State of CA Local Agency Investment Fund 49,610,511 $ 49,554,569 $ 49,610,511 $ 85.16% CAMP - $ - $ - $ 0.00%
Pooled Investments Subtotal $ 49,554,569 49,610,511 $ $49,610,511 85.16% Investment Portfolio Subtotal $ 49,554,569 49,610,511 $ $49,610,511 85.16% Cash/Time Deposits $ 8,646,972 8,646,972 $ $8,646,972 14.84% Funds Available for Investment $ 58,201,541 58,257,483 $ $58,257,483 100.00% Accrued Interest $ - - $ - $
Additional Investments (Non-surplus funds)
City National Bank-Roy Davies Trust 2,501,909 $ 2,501,909 $ 2,501,909 $ PARS PENSION** 896,061 $ 896,061 $ 896,061 $
Bank of New York Mellon-RDA 2004 Bonds 240,300 $ 240,300 $ 240,300 $ US Bank - Money Market Fund 830,312 $ 830,312 $ 830,312 $ Additional Investments (Non-surplus funds) Subtotal $ 4,468,583 4,468,583 $ 4,468,583 $ Total Cash & Investments Held by City 62,726,066 $ 62,670,124 $ 62,726,066 $ Notes:

1. Par value is the principal amount of the investment on maturity.

2. Market values contained herein are received from sources we believe are reliable; however, we do not guarantee their accuracy.

3. Book value is par value of the security plus or minus any premium or discount on the security. ** PARS TRUST - PUBLIC AGENCY RETIREMENT SERVICES - INVESTS IN CAPITAL APPRECIATION FUNDS FOR THE CITY'S OPEB TRUST AND MODERATE INDEX FUNDS Summary of Cash and Investments for the Quarter Ended June 30, 2026 Portfolio Assets % of Portfolio
City of Pacifica

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Attachment: Attachment 1 - Summary of Cash and Investments as of June 30, 2026 (6307 : FY2026 Q4 *Note: Cash/time deposits not included in WYTM and WAM
*No current investments other than liquid accounts*
Excludes Pooled Investments and U.S. Bank Custodial Cash Account *No current investments other than liquid accounts*
Maturity Jun 2026 Mar 2026 Change
3-Month 3.87% 3.70% 0.17% Under 1 Year
1-Year 3.98% 3.68% 0.30% 1 - 2 Years
2-Year 4.14% 3.79% 0.35% 2 - 3 Years
3-Year 4.15% 3.81% 0.34% 3 - 4 Years
5-Year 4.19% 3.92% 0.27% 4 - 5 Years
10-Year 4.44% 4.30% 0.14% Total
*No current investments other than liquid accounts*
Jun 2026 Jun 2025 Jun 2024 Jun 2023 Apr

4.14% 3.72% 4.71% 4.87% May
Jun
Total for Quarter
Note: Interest Earnings figures do not include capital gains or losses Investment Report for the Quarter Ended June 30, 2026
City of Pacifica
U.S. Treasury Yields - Quarterly Comparison
Investment Portfolio Summary and Key Statistics
Portfolio Key Statistics
PAR Value
$ - 0%
$49,610,511
Weighted Yield to Maturity* 0.00%
$ - 0%
Book Value (COST) $49,610,511
Market Value $49,554,569
Weighted Average Maturity (in years) -
Portfolio Maturity PAR Maturing % Maturing
$ - 0%
$ - 0%
2-Year U.S. Treasury Yield - Historical Data Interest Earnings FY 24-25 $ - 0%
$ - 0%
FY 25-26 Change
$ - $ 524,806 $ 524,806
$ 177,352 $ 177,352
$ 172,398 $ 172,398
$ -
$ -
$ - $ 175,057 $ 175,057

85.19%

14.81%

0.00% 0.00%

0.00%

0.00% LOCAL AGENCY INVESTMENT FUND 85.19%
CASH/TIME DEPOSITS 14.81%
CAMP 0.00%
INVESTMENT CASH ACCOUNT 0.00%
FEDERAL AGENCY BOND/NOTE 0.00%
CERTIFICATE OF DEPOSIT 0.00%
U.S. TREASURY BILL/NOTE 0.00% 0%
1%
2%
3%
4%
5%
Under 1 Year 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years 0% 0% 0% 0% 0%
Portfolio Maturity Distribution

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Attachment: Attachment 2 - Portfolio Summary and Key Statistics for the Quarter Ended June 30, 2026 1 | P a g e
City of Pacifica
Glossary of Cash and Investment Terms
Agency: Federal agency securities and /or Government-sponsored enterprises.

Annual Comprehensive Financial Report (ACFR): The official annual financial report for the City of Pacifica. It includes a combined set of statements for each individual fund and account group prepared with the accounting requirements established by the Governmental Accounting Standards Board (GASB) and in conformity with Generally Accepted Accounting Principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section.

Bankers’ Acceptance (BA): A draft or bill or exchange accepted by a bank or trust company.

The accepting institution guarantees payment of the bill, as well as the issuer.

Book Value: The value at which a security or investment is carried on the financial records of its owner. This value may be the original cost of acquisition of the security or original cost adjusted by amortization of a premium or accretion of a discount. The book value may differ from the security’s current market value.

Broker: A broker brings buyers and sellers together for a commission.

California Local Government Debt: Is bonds, notes, warrants, or other evidences of indebtedness of any local agency within California. California local government debt is a permitted investment under the California Government Code. The Government Code does not specify minimum credit ratings for local government debt in which local agencies may invest.

Certificate of Deposit (CD): A time deposit with a specific maturity evidenced by a certificate.

Large-denomination CD’s are typically negotiable.

Collateral: Securities, evidence of deposit of other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.

Coupon: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date.

Dealer: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.

Debenture: A bond secured only by the general credit of the issuer.

Delivery versus Payment: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an

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Attachment: Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (6307 : FY2026 Q4 Treasurer's Report) 2 | P a g e
exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.

Derivatives: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities).

Discount: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount.

Diversification: Dividing investment funds among a variety of securities offering independent returns.

Federal Credit Agencies: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L’s, small business firms, students, farmers, farm cooperatives, and exporters.

Federal Deposit Insurance Corporation (FDIC): A federal agency that insures bank deposits, currently up to $250,000 per deposit.

Federal Funds Rate: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations.

Federal Home Loan Banks (FHLB): Government sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLB is to liquefy the housing related assets of its members who must purchase stock in their district Bank.

Federal National Mortgage Association (FNMA): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages.

FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.

Federal Open Market Committee (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve and Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.

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Attachment: Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (6307 : FY2026 Q4 Treasurer's Report) 3 | P a g e
Federal Reserve System: The central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.

Government National Mortgage Association (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA or FmHA mortgages. The term “pass-throughs” is often used to describe Ginnie Maes.

Issuer: Any corporation, government unit or financial institution which borrows money through the sale of securities.

Liquidity: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.

Local Agency Investment Fund (LAIF): A special fund in the State Treasury which local agencies may use to deposit funds for investment. All interest is distributed to those agencies participating on a proportionate share determined by the amounts deposited and the length of time they are deposited. Interest is paid quarterly via direct deposit to the LAIF account. The State keeps an amount for reasonable costs of making the investments, not to exceed one-quarter of one per cent of the earnings.

Local Government Investment Pool (LGIP): The aggregate of all funds from political subdivisions that are pooled together for investment and reinvestment.

Market Value: The price at which a security is trading and could presumably be purchased or sold.

Master Repurchase Agreement: A written contract covering all future transactions between the parties to repurchase – reverse repurchase agreements that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyerlender to liquidate the underlying securities in the event of default by the seller-borrower.

Maturity: The date upon which the principal or stated value of an investment becomes due and payable.

Money Market: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.

Mutual Funds: Referred to in the Government Code, Section 53601(l) as “shares of beneficial interest issued by diversified management companies.” The Mutual Fund must be restricted by its by-laws to the same investments as the local agency by the Government Code. These investments are Treasury issues, Federal Agency issues, State of California and City (within California) debt obligations, Bankers Acceptances, Commercial Paper, Certificates of Deposit, Negotiable Certificates of Deposit, Repurchase Agreements, Reverse Repurchase Agreements,

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Attachment: Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (6307 : FY2026 Q4 Treasurer's Report) 4 | P a g e
and Medium Term Corporate Notes. The quality rating and percentage restrictions in each investment category applicable to the local agency also apply to the Mutual Fund.

Negotiable: Term used to designate a security, the title to which is transferable by delivery.

Offer: The price asked by a seller of securities. (When you are buying securities, you ask for an offer). See Asked and Bid.

Open Market Operations: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve’s most important and most flexible monetary policy tool.

Par Value: The amount of principal of a security that must be paid at maturity. The par value may also be referred to as the “face amount” of a security.

Portfolio: Collection of securities held by an investor.

Primary Dealer: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers included Securities and Exchange Commission (SEC) – registered securities broker-dealers, banks, and a few unregulated firms.

Principal: Describes the original cost of a security. It represents the amount of capital or money which the investor pays for the investment.

Prudent Person Rule: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state – the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.

Qualified Public Depositories: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the State to hold public deposits.

Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return.

Repurchase Agreement (RP or Repo): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money, that is, increasing bank services.

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Attachment: Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (6307 : FY2026 Q4 Treasurer's Report) 5 | P a g e
Safekeeping: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection.

Secondary Market: A market made for the purchase and sale of outstanding issues following the initial distribution.

Security: An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity.

Securities & Exchange Commission: Agency created by Congress to protect investors in securities transactions by administering securities legislation.

SEC Rule 15C3-1: See Uniform Net Capital Rule.

Structured Notes: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, SLMA, etc.) and Corporations which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.

Treasury Bills: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.

Treasury Notes: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to ten years.

Uniform Net Capital Rule: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio.

Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among member of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

Yield: The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price for the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

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Attachment: Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (6307 : FY2026 Q4 Treasurer's Report)

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Resolution Authorizing Amendment 1, Task Order 4 and Task Order 5 with DHI Water and Environment Inc. for consulting services in the amount of $54,560 for the CCWRP Process Optimization Projects
RECOMMENDED ACTION:

Adopt a Resolution: 1) approving Amendment 1, Task Orders 4 and 5 with DHI Water and Environment Inc. (DHI) for consulting services in the amount of $49,600 for the CCWRP Process Optimization Projects; 2) Increasing the total value of the Master Consultant Services Agreement to $129,560; 3) approving budget authority of $54,560, including a 10% contingency of $4,960; and 4) authorizing the City Manager to execute all documents related to the project.

STAFF CONTACT:

Daniel Patten, P.E., Engineering Manager (Wastewater)
(650) 922-7248
[email protected]
Jim Porter, P.E., Director of Public Works
[email protected]
BACKGROUND/DISCUSSION:

On May 11, 2026, during the FY 2025-26 Capital Improvements Program (CIP) budget approval process, the Council approved funding for the CCWRP Process Optimization Projects.

The City entered into an agreement, Task Order 1 and Task Order 2 with DHI on February 5, 2025, to begin an operational review of the Calera Creek Water Recycling Plant (CCWRP). Task Order 2 included the development of DHI’s digital model of the CCWRP and holding workshops to identify future operational strategies.

On October 10, 2025, City Council approved Task Order 3 that included further development of the digital model and an operational report outlining process improvements as follows:
• A control strategy based on concentrations of various nitrogen compounds in the wastewater treatment process. DHI estimates that this strategy may reduce aeration demands by up to 40%, potentially saving the City approximately $177,000 per year in energy costs, increasing the Plant’s treatment capacity while reducing its carbon footprint. • Implementation of a Sludge Residence Time (SRT) Controller to improve biological treatment and solids operations.

Task Orders 4 and 5 continue to build on these findings. Task Order 4 will include sampling of the wastewater process throughout the CCWRP to calibrate the model developed in Tasks 2 and 3 and refine the conclusions and recommendations of the report provided in Task 3. Task Order 5 will provide controller designs in the form of detailed control diagrams and a written control narrative describing the methods to be used for future scripting and integration. The 5 Packet Pg. 52
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controllers will be implemented through a future design scope to add the necessary instrumentation, control hardware, and software.

DHI has unique experience analyzing CCWRP processes and developing a digital mass balance model of the plant. Procuring consulting services from a separate vendor would require the development of a new digital model and additional data collection. City of Pacifica Administrative Policy #76, Purchasing Policy, section 7.4, authorizes the City Manager to waive bidding requirements for sole source purchases if the City Manager determines sufficient justification exists.

The following table summarizes the schedule anticipated for the CCWRP Process Optimization Projects:

Description Date
Council Approval of Task 4 and 5 September 28, 2026
Task Order 4 Completion 2
nd Quarter, 2027
Task Order 5 Completion 4
th Quarter, 2027
ALTERNATIVE ACTION:

Council may choose not to approve Amendment 1, Task Orders No. 4 and 5; however, doing so would delay the project and the potential realization of wastewater treatment capacity increases and energy-efficiency benefits including cost savings and carbon footprint reduction.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

Approval of these Task Orders is consistent with the following Council adopted Goals:

Stewardship of City Infrastructure, street, and facilities:

The Project will help reduce energy usage at the Calera Creek Water Recycling Plant and potentially increase treatment capacity.

FISCAL IMPACT:

The combined cost of Task Orders No. 4 and 5 is $49,600, which aligns with the $50,000 budgeted for the CCWRP Process Optimization Projects under account 518452-51206 -P0036 this year. City Manager recommends including a 10% contingency of $4,960 (to be utilized if and only if necessary) for additional work that may be required due to the complexity of the project, resulting in the total requested budget authority of $54,560. Once approved, the variance will be included in the FY26-27 Wastewater Fund Budget at midyear. There are sufficient reserves in the Unassigned Wastewater Fund Balance (approx. $12.4 million) to accommodate this request.

The Source and Use of Funds spreadsheet is shown below.

Use of Funds
Previously
Approved
Fiscal Year 26-27
Budget
Additional
Budget
Requests
Revised
Totals
Previously Approved Task
Orders 1 - 3
$75,000 $75,000
5 Packet Pg. 53
Pacifica City Council 3
September 28, 2026
Task Order No. 4 -
Advanced SBR Modeling $24,800 $24,800
Task Order No. 5 - SBR
Controller Design $24,800 $24,800
Contingency (10%) $400 $4,560 $4,960
Task Orders 4 and 5, plus
Contingency $54,560
Total Use of Funds $129,560
Project Fund Source
Enterprise Fund (Fund
518) $75,000 $50,000 $4,560 $129,560
518452-51206 -P0036
Total Project Fund
Source $75,000 $50,000 $4,560 $129,560
ORIGINATED BY:

Public Works - Wastewater Division
ATTACHMENT LIST:

Agreement_Amendment_DHI Water Environment Inc_09_28_26_CCWRP RR Project Value Engr_DHI signed_260901 (PDF)
Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (PDF)
Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (PDF)
5 Packet Pg. 54
Pacifica City Council 4
September 28, 2026
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA APPROVING AMENDMENT 1, TASK ORDER 4 AND TASK ORDER 5 WITH DHI WATER AND ENVIRONMENT INC. FOR CONSULTING SERVICES IN THE AMOUNT OF $49,600 FOR THE CCWRP PROCESS OPTIMIZATION PROJECTS; INCREASING THE TOTAL VALUE OF THE MASTER CONSULTANT SERVICES AGREEMENT TO $129,560; APPROVING BUDGET AUTHORITY OF $54,560 WHICH INCLUDES 10% CONTINGENCY IN THE AMOUNT OF $4,960; AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS RELATED TO THE PROJECT.

WHEREAS, during the FY 2026-27 Capital Improvements Program (CIP) budget approval process, the Council approved funding for the CCWRP Process Optimization Projects; and;
WHEREAS, the City has previously entered into a Master Services agreement, Task Orders 1, 2, and 3 with DHI Water and Environment Incorporated for operational review and process optimization at the Calera Creek Water Recycling Plant; and WHEREAS, authorizing Amendment 1, Task Orders 4 and 5 will provide a calibrated digital model of the Calera Creek Water Recycling Plant and new control designs for the Calera Creek Water Recycling Plant’s Sequencing Batch Reactors; and WHEREAS, DHI Inc. has unique experience analyzing the Calera Creek Water Recycling Plant processes and City of Pacifica Administrative Policy #76, Purchasing Policy, section 7.4, authorizes the City Manager to waive bidding requirements for sole source purchases if e/she determines sufficient justification exists; and WHEREAS, an additional $4,960 in budget authorization is requested as contingency for the Calera Creek Water Recycling Plant Process Optimization Projects, with appropriations of $4,960 from the reserves of Fund 518; and
WHEREAS, the City Council has considered the City Manager’s recommendation to authorize Amendment 1, Task Orders No. 4 and 5 with DHI Water and Environment Inc.; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pacifica authorizes the City Manager to execute Amendment 1, Task Order 4, and Task Order 5 with DHI Water and Environment Inc. for consulting services in the amount of $49,600 for the CCWRP Process Optimization Projects; Increasing the total value of the Master Consultant Services Agreement to $129,560; approving budget authority in the amount of $54,560 which includes 10% contingency of $4,960; and authorizing the City Manager to execute all documents related to the Project.
• • • • •
5 Packet Pg. 55
Pacifica City Council 5
September 28, 2026
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 28
th day of September 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
_________________________________
Christine Boles, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney 5 Packet Pg. 56
4884-9513-0360 v1

MASTER AGREEMENT FOR CONSULTANT SERVICES
AMENDMENT NO. 1
This AMENDMENT NUMBER 1 is entered into as of the 28th day of September, 2026 (“Amendment No. 1”), by and between the CITY OF PACIFICA, herein called the “City,” and DHI Water and Environment Inc. hereinafter called the “Consultant.” City and Consultant may be referred to individually as “Party” and collectively as “Parties”.

RECITALS
A. WHEREAS, City and Consultant entered into a Master Agreement for Consultant Services on January 24, 2025, for value-engineering and model-driven solutions to minimize energy consumption and optimize wastewater treatment plant operations services (“Original Master Agreement”); and
B. WHEREAS the Original Master Agreement identified an end of term date in Section 3.1 as December 31, 2026; and
C. WHEREAS, the Parties desire to extend that date to December 31, 2027.

AGREEMENT
A. Amendment. The Parties agree that the Original Master Agreement shall be amended as set forth below.

1. Section 3.1 “Effective Date”. This Agreement shall become effective upon execution of the second signature and shall remain in full force and effect until December 31, 2027 (the “Term”). Notwithstanding the foregoing, this Agreement may be extended for successive one-year term(s) upon mutual, written approval by the City Manager or his/her designee and Consultant. Work authorized by a Task Order shall be performed in accordance with the schedule set forth in the Task Order.

2. Agreement in Effect. All other provisions of the Original Master Agreement, except as amended herein, shall remain in full force and effect. [Signatures on Next Page]

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Attachment: Agreement_Amendment_DHI Water Environment Inc_09_28_26_CCWRP RR Project Value Engr_DHI signed_260901 (6287 :
4884-9513-0360 v1
IN WITNESS WHEREOF, the City and Consultant have executed this Amendment No.___ as of the date first written above.

CITY OF PACIFICA
By:
______________________________ Date
Sean Charpentier, City Manager
Attest:

By:
______________________________ Date
Sarah Coffey, City Clerk
Approved As To Form:

By: ______________________________ Date
Michelle Marchetta Kenyon, City Attorney
CONSULTANT: DHI Inc.

By: _____________________________ Date
Thomas L. Johnson, COO
1 September 2026

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Attachment: Agreement_Amendment_DHI Water Environment Inc_09_28_26_CCWRP RR Project Value Engr_DHI signed_260901 (6287 :

TASK ORDER NO. 4

CITY OF PACIFICA
AND
DHI WATER & ENVIRONMENT, INC.

SECTION 1 – PURPOSE
The purpose of this Task Order is to authorize and direct DHI WATER & ENVIRONMENT, INC. to proceed with the work specified in SECTION 2 below, in accordance with the provisions of the Master Agreement for Consultant Services between the City of Pacifica (“CITY”) and DHI WATER & ENVIRONMENT, INC. (“CONSULTANT”) hereto dated JANUARY 24, 2025 (“MASTER AGREEMENT”)
SECTION 2 – SCOPE OF WORK
The items authorized by this Task Order are presented in Attachment “A” – Scope of Services, which is attached hereto and incorporated by this reference.

SECTION 3 – COMPENSATION AND PAYMENT
Compensation shall be as provided in the MASTER AGREEMENT. Compensation for services as set forth in SECTION 2 shall be as set forth in Attachment “B” – Compensation, which is attached hereto and incorporated by this reference. Total compensation for all services provided under this Task Order shall not exceed Twenty-Four Thousand Eight-Hundred Dollars ($24,800.00) (“Cost Ceiling”).

SECTION 4 – TIME OF PERFORMANCE
The services described in SECTION 2 of this Task Order shall be completed by December 31, 2027 or as extended in writing by the City Manager.

SECTION 5 – ITEMS AND CONDITIONS
All terms and conditions contained in the MASTER AGREEMENT are incorporated by reference and remain in full force and effect.

Approved this ___24th__ day of _January_, __2025_.
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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process

CITY OF PACIFICA
By: Date
Kevin Woodhouse, City Manager
Approved As To Form
By: Date
Michelle Marchetta Kenyon, City Attorney

CONSULTANT
DHI WATER & ENVIRONMENT, INC.

By: Date
Thomas L. Johnson, COO
1 September 2026

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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process ATTACHMENT “A”

SCOPE OF SERVICES

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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process 4 TO4: Advanced SBR Process Modeling
Objective: Develop a robust, dynamic, customized SBR model to validate initial aeration optimization simulation findings with special sampling data and support ongoing modeling initiatives for the CCWRP.

The SBR model supporting TO2 and TO3 was limited by the lack of data required to characterize influent diurnal flows, SBR cycle profile date, and the inputs for dynamically changing phase durations. The identified opportunities require validation and control strategy design to prepare for implementation and to inform sensor requirements.

For example, the SBR model was calibrated and used to identify where aeration could have been stopped without impacting effluent quality, indicating the 40% aeration reduction. However, the airflow could not be stopped at that point with the model. Customizing an SBR model to allow the proposed control while validating the calibration with special sampling data will allow for virtual testing of expected activated sludge impacts.

The TO4 scope is centered around developing a robust SBR model to simulate dynamic conditions and operating modes, addressing the limitations of the current SBR model. Further, the recommended special sampling regime will be used to validate the model results during each stage of SBR operation.

The following subtasks describe DHI’s proposed workflow for TO4.

Custom Model Design
DHI and CCWRP operations staff will collaborate to confirm understandings of the SBR operating cycles and the various operator inputs available. This will form the basis for the model parameters to be included in the custom model and how they impact the mass balance.

SBR operating cycles with annotation denoting recommended nitrogen sampling timing.

DHI will then collaborate internally with the WEST model development team to write a custom model script with relevant parameters, timers, level indicators, and mode selectors. This is intended to incorporate operational limits that are not currently feasible to simulate such as the top water level, air slope controller, and variable idle times.

Model Testing & Documentation
Any new model requires rigorous testing to assess if it responds as intended and evaluation of areas for defensive coding and potential errors (e.g., avoid the potential to divide by zero, or plan for proper

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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process 5 initialization). DHI will test the custom SBR under the conditions of the baseline model calibration from 2025-2026 DHI modeling exercises and document the custom model configuration for both internal reference and CCWRP process team review. Note that such an advancement in SBR modeling would likely be a candidate for presentation at various modeling and wastewater treatment conferences.

Validate with Nitrogen Sampling
DHI and CCWRP operations staff collaborated to develop a sampling plan that would support model validation for rates of nitrification and denitrification during various stages of the SBR operation. DHI will use these data to validate the updated SBR model calibration. The results may require several iterations of the model testing step, depending on the reliability of the dataset. This is a critical task to develop trust in the predictive capabilities of the SBR models for operational decision making and controller design.

Update Optimization Scenarios
DHI will update the optimization scenarios tested in the 2025-2026 optimization study. While the documented results indicated significant benefits for the CCWRP, the dynamic impacts of the optimization scenarios could not be fully evaluated given the SBR model limitations. The updated SBR model will be used to test:
• Different fill fractions with varying the number of SBRs in operation • Influent equalization via a 1 MG equalization tank to balance diurnal flows • Advanced aeration cycle length control methods using simulated ORP, pH, DO, and NH3 sensors.

The results will be documented as an addendum to the 2025-2026 technical memorandum describing similar scenarios assessed with the limited SBR model, highlighting any differences.

Example result from previous study showing the point (red x) where aeration could have been stopped during a cycle.

While this indicates potential for significant aeration energy savings, TO4 will assess the impact to activated sludge if aeration were repeatedly stopped at that point.

Ad-hoc Modeling Support
As the City of Pacifica continues to assess process requirements with other consultants, DHI will support other modeling efforts as needed. This ad-hoc support as an advisor for the City of Pacifica and peer reviewer for relevant modeling initiatives may include, for example, reviewing consultant modeling results and approaches, sharing input files, and collaborating regarding simulation findings and interpretations.

DHI will plan a 2-day site visit to collaborate with operations staff throughout TO4 and may tailor the site visit to support ongoing project efforts.

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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process ATTACHMENT “B”

COMPENSATION

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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process Project Cost
The estimated project costs, to be invoiced as a lump sum upon delivery of each Task Order, are tabulated below. The project terms and conditions are outlined in the Master Agreement for Consultant Services between DHI and the City of Pacifica dated January 24, 2025.

Advanced SBR Modeling and Controller Design
DHI Cost Estimate
TO4 Advanced SBR Process Modeling $ 24,800

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Attachment: Agreement_DHI Water Environment Inc_TO4_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process TASK ORDER NO. 5

CITY OF PACIFICA
AND
DHI WATER & ENVIRONMENT, INC.

SECTION 4 – TIME OF PERFORMANCE
The services described in SECTION 2 of this Task Order shall be completed by December 31, 2027 or as extended in writing by the City Manager.

SECTION 5 – ITEMS AND CONDITIONS
All terms and conditions contained in the MASTER AGREEMENT are incorporated by reference and remain in full force and effect.

Approved this ___24th__ day of _January_, __2025_.
[Signatures on Next Page]
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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process

CITY OF PACIFICA
By: Date
Kevin Woodhouse, City Manager
Approved As To Form
By: Date
Michelle Marchetta Kenyon, City Attorney

CONSULTANT
DHI WATER & ENVIRONMENT, INC.

By: Date
Thomas L. Johnson, COO
1 September 2026

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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process ATTACHMENT “A”

SCOPE OF SERVICES

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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process TO5: Custom SBR Controller Design
Objective: Consolidate the findings from the modeling exercises into an SBR control narrative that could be scripted and implemented at the CCWRP.

The TO5 scope is designed to convert preferred scenarios from the simulations into practical control methods that can then be implemented at the CCWRP to optimize the SBRs in real-time. While DHI offers controller implementation technology and services for WRPs, the intent of this TO5 is to design and outline recommended control methods to be implemented at the City of Pacifica’s discretion.

The following subtasks describe DHI’s proposed workflow for TO5.

Combined Scenario Analysis
DHI will execute a simulation combining the recommendations from all previous scenarios into a single operating strategy. The results can be used by CCWRP process staff to evaluate the value of implementing advanced controllers and to guide the following controller design tasks.

Aeration Cycle Length Control
The aeration cycle length is the main driver for aeration energy savings and process optimization of the CCWRP. The method for determining when to stop aeration in an SBR determines the sensors requirements impacts further operation of the SBRs such that the method will be isolated and prioritized.

DHI will draft a control narrative for determining the aeration cycle length, likely based on a combination of ORP, pH, DO, and NH4 sensors in one or more SBRs. This control narrative will be customized and presented to CCWRP operations staff to assess feasibility, practicality, and necessary limits or interlocks.

Fill Fraction Optimization
From the simulation exercise, the SBR fill fraction was determined to have a high impact on overall plant capacity. The more the SBR are decanted, the more volume available for the next cycle. However, the decant level depends on the sludge settleability. The control method may rely on a comparison of realtime sludge blanket level calculations based on SVI and MLSS data to sludge blanket level meters for realtime monitoring of settling to safeguard against sludge carryover. The settling characteristics may also be impacted by additional considerations discussed in the following Aerobic SRT Control section. DHI will develop a control method to automatically determine the optimal decant level and present the resulting control narrative to CCWRP process and operations staff.

Aerobic SRT Control
The required aerobic SRT for nitrification in a specific activate sludge is governed by the wastewater temperature. Too high of aerobic SRT results in unnecessarily high total SRT, sludge hydrolysis, and additional aeration requirements while too low of aerobic SRT is likely to washout nitrifiers. The cyclic nature of SBRs along with dynamic aeration cycle lengths and fill fractions indicate a need for automated control of solids wasting rate (waste activated sludge, WAS) to maintain a steady aerobic SRT. A data preprocessing methodology and aerobic SRT calculation will be designed to allow for dynamic WAS settings to maintain a stable aerobic SRT.

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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process Example dashboard for an aerobic SRT controller designed and implemented by DHI for a WRP with both hydrocyclone- and RAS-base wasting.

Sensor Network Evaluation
DHI will combine the relevant control methods in a holistic SBR optimizer method for review. These control narratives and diagrams will be used to list sensor requirements with the objective of minimizing online sensors to be installed. While sensors are critical for advanced control, data quality is equally critical and can deteriorate when too many sensors are installed and maintenance costs are underestimated.

DHI will deliver a final controller design including recommended sensors and next steps to implementation.

This task will be aided by a site visit with operations and controls workshops to train operations staff in the intent of the control methods, evaluate feasibility and practicalities, and plan for implementation and integration with existing control structures.

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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process ATTACHMENT “B”

COMPENSATION

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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process Project Cost
The estimated project costs, to be invoiced as a lump sum upon delivery of each Task Order, are tabulated below. The project terms and conditions are outlined in the Master Agreement for Consultant Services between DHI and the City of Pacifica dated January 24, 2025.

Advanced SBR Modeling and Controller Design
DHI Cost Estimate
TO5 Custom SBR Controller Design $ 24,800

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Attachment: Agreement_DHI Water Environment Inc_TO5_09_28_26_CCWRP RR Project Value Engr_DHI signed (6287 : CCWRP Process

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Proposition 1, the Veterans and Affordable Housing Bond Act of 2026 RECOMMENDED ACTION:

Consider a resolution of support for Proposition 1, the Veterans and Affordable Housing Bond Act of 2026.

STAFF CONTACT:

Sean Charpentier, City Manager
(650) 738-7409
[email protected] <mailto:[email protected]> BACKGROUND/DISCUSSION:

Proposition 1, the Veterans and Affordable Housing Bond Act of 2026, is a measure placed on the November 3, 2026 ballot by the California Legislature that would replenish existing housing programs for the development, preservation, and rehabilitation of affordable housing projects.

Proposition 1 would allow the state to sell $11.25 billion in general obligation bonds for housing purposes. This amount consists of (1) a $10 billion bond for a variety of housing programs that would be repaid by the State’s General Fund and (2) a $1.25 billion bond that would be repaid by veterans’ payments on their home loans.

The League of California Cities which has long supported investments that increase the supply of affordable housing also supports Prop. 1. Cal Cities maintains that, if approved by the voters, Prop. 1 would replenish funding for several successful state programs used by cities to support affordable housing and infrastructure. Prop. 1 could also fund innovative local programs like regional housing trusts and support cities in meeting their Regional Housing Need Assessment (RHNA) goals for current and future cycles.

The full text of the measure is available at: Bill Text - SB-417 The Veterans and Affordable Housing Bond Act of 2026.
<https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260SB417> The Legislative Analyst Office Analysis is available at: Proposition 1 [Ballot] <https://lao.ca.gov/BallotAnalysis/Proposition?number=1&year=2026> ALTERNATIVE ACTION:

The City could take no position or take a position to oppose Proposition 1.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

This is related to the following City Council Goals:

03. Prioritize protection and development of affordable housing. 6 Packet Pg. 73
Pacifica City Council 2
September 28, 2026

05. Broaden public communications and collaboration
5D. Improve coordination and collaboration between the City Council and local regional commissions, boards, and committees.

ORIGINATED BY:

City Manager’s Office at the request of League of California Cities.

FISCAL IMPACT:

There is no local fiscal impact.

ORIGINATED BY:

City Manager's Office
ATTACHMENT LIST:
6 Packet Pg. 74
Pacifica City Council 3
September 28, 2026
RESOLUTION NO. ___

PACIFICA RESOLUTION FOR
PROPOSITION 1: THE VETERANS AND AFFORDABLE HOUSING BOND ACT OF 2026 WHEREAS, Cal Cities and its member cities advocate for secure investments to increase the supply of affordable housing; and
WHEREAS, Proposition 1, the Veterans and Affordable Housing Bond Act of 2026, will appear on the November 3, 2026 statewide ballot and authorize the state to issue $11.25 billion in state general obligation bonds to provide funding to build and preserve affordable homes and expand homeownership opportunities across California; and WHEREAS, Proposition 1 is anticipated to provide funding to fast-track numerous already-approved, shovel-ready affordable homes, turning stalled projects into homes for families who need them; and
WHEREAS, Proposition 1 is anticipated to provide funding to build homes working families can afford, so that the teachers, firefighters, and nurses who serve the City of Pacifica can afford to live in the community they serve; and
WHEREAS, Proposition 1 honors our veterans by dedicating $1.25 billion solely to veterans' housing and homeownership opportunities, including the CalVet Home Loan Program, which has already helped almost a million veterans and their families; and WHEREAS, Proposition 1 helps our most vulnerable neighbors by providing funding to create and preserve housing for low-income residents, seniors, those who are homeless or at risk of homelessness, foster youth experiencing homelessness, and people with disabilities; and WHEREAS, Proposition 1 does not raise taxes, but may unlock matching federal funds, bringing tax dollars Californians send to Washington back home to California; and WHEREAS, Proposition 1 comes with strict accountability, public reporting, and clear requirements, so that voters can see how many homes get built, where, and at what cost; and WHEREAS, Proposition 1 benefits veterans, seniors, low- and middle-income Californians, persons with disabilities, working families, farmworkers, students, first-time homebuyers, and our youth; and
WHEREAS, the City of Pacifica finds that the safe, affordable homes and veteran housing investments made possible by Proposition 1 are in the best interest of the residents of the City of Pacifica;
NOW, THEREFORE, BE IT RESOLVED, that the City of Pacifica supports Proposition 1, the Veterans and Affordable Housing Bond Act of 2026. 6 Packet Pg. 75
Pacifica City Council 4
September 28, 2026
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 28th day of September, 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Adoption of an Ordinance to repeal and replace Article 41 Density Bonus Program and Article 47 City of Pacifica Below Market Rate (Inclusionary) Program of the City of Pacifica Zoning Regulations (Title 9, Chapter 4 of the Pacifica Municipal Code) relating to the implementation of state density bonus law and regulations for inclusionary housing and below market rate units, respectively.

RECOMMENDED ACTION
Adopt an Ordinance of the City Council or the City of Pacifica to repeal and replace Article 41 (“Density Bonus Program”) and Article 47 (“City of Pacifica Below Market Rate (Inclusionary) Program”) of Chapter 4, Title 9, of the Pacifica Municipal Code; and find adoption of the Ordinance exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3), “General Rule” (Attachment A)

STAFF CONTACT
Samantha Updegrave, Community Development Director
(650) 738-7341
[email protected]
BACKGROUND/DISCUSSION:

The Density Bonus (DBO) and Inclusionary and Below Market Rate Program of the City of Pacifica (IHO) ordinances are separate but related ordinances that dictate the provision of affordable housing in the City of Pacifica. The Density Bonus Ordinance is based on and implements California State Density Bonus law, which allows developers to receive increased density, waivers of development standards and concessions or incentives for residential, residential mixed-use, and commercial developments in exchange for the provision of restricted affordable housing units. The Inclusionary and Below Market Rate Housing Program1 Ordinance is a local regulation that mandates affordable housing in each residential and residential mixeduse development with more than eight units, and the policies and procedures related to that affordable housing.

On October 6, 2025, the City Council and Planning Commission held a Joint Study Session2to discuss potential updates to the DBO and IHO based on state laws and best practices. The Council then directed the City Manager to prepare a draft ordinance and return to the Planning Commission for consideration and a recommendation.
1 City of Pacifica Below Market Rate (Inclusionary) Program of the City of Pacifica to be renamed “Inclusionary and Below Market Rate Housing Program” to remove redundancy, and for ease of use, and clarity.
2 Joint City Council and Planning Commission Study Session, October 6, 2025:
• Agenda: https://pacificacityca.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1730 • Video: PCC & PPC 10/6/25 - Pacifica Joint Study Session - October 6, 2025 7 Packet Pg. 77
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September 28, 2026
Staff prepared one ordinance repealing, reorganizing, and replacing the entire DBO and IHO articles. As discussed during the Joint Study Session, while these changes may represent a major update to the ordinances, most of the changes incorporate current state housing and planning law, including density bonus law, or best practices, and are not substantive.

The City of Pacifica Planning Commission held three public hearings to consider the draft ordinances.
• May 4, 2026:
3 The Planning Commission held a public hearing, provided comments on the draft ordinance, and continued the item to a future meeting to allow staff additional time to coordinate the Local Coastal Program (LCP) provisions with Coastal Commission staff as well as incorporate Planning Commission edits. • June 1, 2026:
4 City and Coastal Commission staff had not reached a resolution on the LCP provisions, so a placeholder was included in the draft. The Planning Commission adopted PC Resolution No. 2026-005 recommending approval of the draft ordinance. Staff planned to come back later in the year with additional revisions to the DBO in the Coastal Zone.
• July 20, 2026:
5 After working with the Coastal Commission, City staff found language that satisfied the requirements of the Coastal Commission for the Density Bonus Ordinance. The Planning Commission adopted PC Resolution No. 2026-006 with revisions to the text amendments incorporating the LCP provisions. The draft ordinance provided for Council’s consideration combines the PC recommendations from June 1 and July 20, 2026.

The City Council held a public hearing and introduced the Ordinance on September 14, 2026.6 At the hearing, Council discussed the code provisions, including, for Article 47 “Inclusionary Housing and BMR Housing Program” the “opt in” provisions for vested projects and approval authority for alternatives to onsite construction of BMR units. The Council accepted the opt-in provisions and the PC recommendation to require City Council approval for any alternatives and made the following revisions to PMC Section 9-4.4705(a) and 9-4.4705(f), shown below where underline text indicates an addition and strikethrough indicates deletion. Council then voted unanimously to introduce the Ordinance.
“Sec. 9-4.4705. – Alternatives to onsite affordable residential units. (a) General - An Applicant may comply with this Article through one or a combination of the alternatives set forth in subsections (b) through (e) below, which shall be considered by the City Council approved in accordance with this section. (1) Unless otherwise provided in this section, the use of an alternative or combination of alternatives shall be subject to approval by the City Council.

The alternative will be considered by the City Council as set forth below. (2) Alternatives shall be based on a minimum of 20 percent of all units, lots, or 3 Planning Commission Agenda Packet, May 4, 2026:
https://pacificacityca.iqm2.com/Citizens/FileOpen.aspx?Type=14&ID=1640&Inline=True 4 Planning Commission Agenda packet, June 1, 2026:
https://pacificacityca.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=1643&Inline=True 5 Planning Commission Agenda packet, July 20, 2026:
https://pacificacityca.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=1647&Inline=True 6 City Council Agenda Packet, September 14, 2026:
https://pacificacityca.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=1656&Inline=True 7 Packet Pg. 78
Pacifica City Council 3
September 28, 2026
parcels in a residential development project seeking alternative compliance.

For purposes of determining the total number of BMR units required, density bonus units, accessory dwelling units, and junior accessory dwelling units are not included.
(1) In accordance with state density bonus law, these alternatives are not available for BMR units that serve to qualify for a density bonus under Government Code Section 65915(g), unless the dedication of land conforms to the provisions of Government Code Section 65915(g).
(b) In-Lieu Fee Payment
(1) Payment in lieu of providing a unit. The Applicant may propose to pay the City an amount of money in lieu of providing a BMR unit, which shall be based on 20 percent of the residential development project’s units. The in-lieu payment for each BMR unit shall be set forth in a resolution adopted by the City Council.
(2) In-Lieu Fees shall be paid prior to the issuance of the first building permit for the residential development project at the rate in effect at time of payment.

Where an applicant will be creating custom lot subdivisions and selling the lots to individual purchasers, the applicant shall pay the in-lieu fee prior to the sale of the first lot.
(3) In-lieu payments collected under this article shall be deposited into the City’s Housing In-Lieu Fund and shall be used only for the purpose of providing funding assistance for the provision of affordable housing, inclusionary monitoring costs, and administration costs. Administration costs shall not exceed 15 percent of any deposits into the Housing In-Lieu Fund. Such funds may also be used for a homebuyer's assistance program for eligible households.
(4) The City Council shall approve the in-lieu fee alternative if all of the above requirements are satisfied. In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements.
(c) Off-site construction. When this off-site option is allowed, the Applicant must provide 20 percent of the residential unit floor area of the residential development project as BMR units, at affordability levels that meet or exceed the applicable onsite requirements in this article. (1) Off-site BMR units shall be constructed within the City of Pacifica and shall receive Certificate of Occupancy prior to the issuance of any Certificate of Occupancy of the residential development project, unless being built in phases, in proportion to the phasing of the residential development project, as set forth in the Affordable Housing Agreement.
(2) Off-site BMR units shall be consistent and comply with the standards and requirements specified in this Article, except that the size and number of BMR units may differ from what the Applicant would have provided on-site. (3) BMR units shall be located on sites that are designated in the general plan for the intended residential development, have access to similar availability of services to the on-site units, and be accessible by paved roads. (4) The City Council shall approve the off-site construction alternative provided all of the above requirements are satisfied. In the event of approval, the 7 Packet Pg. 79
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residential development project shall be conditioned to require compliance with all of the above requirements.
(d) Off-site preservation. In lieu of building BMR units, the Applicant may request to create off-site BMR units through the purchase and conversion of existing marketrate units to affordable units, either by the Applicant or by a not-for-profit entity.

When this off-site option is allowed, the Applicant must provide 20 percent of the residential unit floor area of the residential housing development as BMR units, at affordability levels that meet or exceed the applicable on-site requirements of this article.
(1) The off-site preservation units must be located within the City of Pacifica. (2) The size and number of BMR units may differ from what the Applicant would have provided on-site.
(3) If a not-for-profit is involved, they must be approved by the City Manager. (4) The off-site preservation units used to qualify for this alternative must be purchased prior to the issuance of a building permit for the residential development project. The Community Development Director may set out requirements related to the rehabilitation and condition of the property and the protection and/or temporary relocation of existing tenants. The Community Development Director may require that rehabilitation of the property and/or temporary relocation of existing tenants be completed before the issuance of a building permit for the residential development project. (5) For five years prior to the preservation of the off-site units, the average market rents must have been higher than 100 percent of area median income rent limits.
(6) The City Council shall approve the off-site preservation alternative provided all of the above requirements are satisfied. In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements.
(e) Land dedication. In lieu of building BMR units, the Applicant may propose to dedicate land to the City or to an affordable housing developer. (1) This land must be of equivalent or greater value than the amount of the required in-lieu fee. The valuation of any land offered in-lieu shall be determined by an appraisal made by an appraiser mutually agreed upon by the City and the Applicant. Costs associated with the appraisal shall be borne by the Applicant.
(2) The timing of the land dedication shall be at or before issuance of a building permit of the. Marketable title to the site is transferred to the City, or an affordable housing developer approved by the City, prior to issuance of building permit of the residential development project pursuant to an agreement between the Applicant and the City.
(3) Approval of land dedication.
i. Land proposed to be dedicated to the City requires approval of the City Council, at its sole discretion. Factors considered for the approval may include, but are not limited to, general location, access to transit, buildability, current General Plan and zoning designations, availability utilities and other services, the number of units that could be built at the location, and the availability of a proposed affordable housing developer. 7 Packet Pg. 80
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ii. Land dedicated to an affordable housing developer must meet the following requirements:
a. The site has a General Plan designation that authorizes residential uses and is zoned for residential development at a density to accommodate at least the number of affordable units that would otherwise be required.
b. The site is suitable for development of the BMR units, taking into consideration its configuration, physical characteristics, location, access, adjacent uses, and applicable development standards and other relevant planning and development criteria including, but not limited to, factors such as the cost of construction or development arising from the nature, condition, or location of the site. c. Infrastructure to serve the dedicated site, including, but not limited to, streets and public utilities, are available at the property line and have adequate capacity to serve the maximum allowable
residential density permitted under zoning regulations. d. The site has been evaluated for the presence of hazardous materials and for the presence of geological hazards and all such hazards are or will be mitigated to the satisfaction of the City prior to acceptance of the site by the City.
e. The value of the site upon the date of dedication is equal to or greater than the in-lieu fee that would otherwise be required under Subsection (b) above. The value of the site shall be determined pursuant to the program guidelines approved by the City Manager or their designee.
(4) Transfer of the property. At the time the land is transferred to the City or to an affordable housing developer, the Applicant must have paid any outstanding property taxes, and the property must be free of any liens or encumbrances, unless otherwise approved by the City.
(5) In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements, and any other applicable conditions as determined by the City Council.
(f) Combination. The Applicant may propose any combination of on-site construction, in-lieu payments, off-site construction, off-site preservation, and/or land dedication.”
The City Council also discussed the proposed updates to City Council Resolution No. 24-20077 for in-lieu fees. Adoption of the resolution will be voted on separately at the September 28, 2026, Council meeting. Please refer to the staff report included in the agenda for this meeting.8

CALIFORNIA ENVIRONMENTAL QUALITY ACT
Staff recommend that the Planning Commission find the proposed zoning text amendment in 7 City Council Resolution No. 24-
2007: https://pacificacityca.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1730 8 City Council agendas are available here, by date: https://pacificacityca.iqm2.com/Citizens/Default.aspx 7 Packet Pg. 81
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the Draft Ordinance to be exempt from the California Environmental Quality Act (CEQA). The text amendment would be exempt from CEQA pursuant to the “General Rule” exemption in CEQA Guidelines Section 15061(b)(3). The General Rule exemption provides that “the activity is covered by the commonsense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.”
The text amendment would make amendments to the existing Density Bonus Program and Inclusionary Housing Ordinances to, among other things, establish provisions related to the implementation of sate density bonus law and regulations for inclusionary housing, in accordance with state law and incorporating best practices. The amendments and regulations governing density bonus and inclusionary housing would not have a significant effect on the environment.

ALTERNATIVE ACTION
Council could take no action on updating the DBO and IHO. Given that this work stems from programs adopted in the Housing Element, staff do not recommend this option.

RELATION TO CITY COUNCIL GOALS AND WORKPLAN
Updates to the Density Bonus and Inclusionary Housing Ordinance directly address City Council’s Strategic Plan goals and strategies, and Community Development’s workplan.

Strategic Plan Goal No. 3: Prioritize protection and development of affordable housing Strategy C: Prioritize Housing Element program implementation and interim housing solutions .
• Housing Element Programs:
o HE-I-2 Zoning Modernization and Streamlining: Advances zoning modernization and streamlining by restructuring Articles 41 and 47, aligning them with current best practices and state laws, and clarifying application and review processes o HE-I-5 Fund a Housing Action Fund: Updates to the inclusionary requirements, including requiring in-lieu payment for fractional units and updating the current fees, will provide opportunities for contributions to the City’s Housing In-Lieu Fund, which is a restricted fund to be used for purpose of providing funding assistance for the provision of affordable housing and inclusionary monitoring costs, as well as reasonable administration costs
o HE-I-6 Strengthen Inclusionary Housing: Ensures alignment with state law and best practices, increases the length of time affordable units must remain affordable, adds provisions for 110% Annual Mean Income households, and increases and clarifies requirements for alternatives to on-site construction o HE-I-14 State and Federal Law Compliance: Updates ordinances to comply with state housing and planning laws, including State Density Bonus Law FISCAL IMPACT:

Updates to the Density Bonus and Inclusionary Housing Ordinances is expected to have no significant immediate fiscal impact, as these are part of the Zoning Ordinance and are implemented through standard development review which is primarily cost recovery. However, the updates to align with state law and best practices, establish application and review requirements will increase predictability, transparency, and efficiency during review, which is 7 Packet Pg. 82
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expected to save staff time which has a positive impact on department and staff resources.

Additionally, the changes to in lieu fees are expected to increase contributions to the City’s Housing In-Lieu Fund, improving the City’s ability to invest in affordable housing development and preservation.

ORIGINATED BY:

Community Development Department
ATTACHMENT LIST:
7 Packet Pg. 83
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ORDINANCE NO. (ID # 6301)
ORDINANCE NO. ______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PACIFICA REPEALING AND REPLACING ARTICLE 41 (“DENSITY BONUS
PROGRAM”) OF CHAPTER 4, TITLE 9 OF THE PACIFICA MUNICIPAL CODE AND ARTICLE 47 (“CITY OF PACIFICA BELOW MARKET RATE (INCLUSIONARY) PROGRAM”) OF CHAPTER 4, TITLE 9 OF THE PACIFICA

MUNICIPAL CODE, AND FINDING THE ORDINANCE EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
________________________________________________________________________ Initiated by: City of Pacifica
WHEREAS, the City’s Density Bonus Ordinance, codified as Article 41 of Chapter 4 of Title 9 of the Pacifica Municipal Code and based on California State Density Bonus law, was adopted on May 23, 1984, repealed and replaced on December 10, 1986, and last updated on February 12, 1992; and
WHEREAS, the City of Pacifica adopted a below market rate (“BMR”) inclusionary program pursuant to the General Plan and the City’s Five-Year Vision Statement, adding Article 47 to Title 9, Chapter 4 of the Pacifica Municipal Code on May 9, 2007, which has not been amended since; and
WHEREAS, significant changes to state housing and planning laws, federal requirements, and best practices have occurred since these updates, and amendments are needed to bring the City of Pacifica’s ordinances into alignment with these changes; and WHEREAS, the City’s adopted and certified 2023-2031 Housing Element includes three implementation programs related to the current density bonus and inclusionary requirements in the Zoning Ordinance that represent commitments to action by the City: HE-I-5 Fund a Housing Action Fund; HE-I-6 Strengthen Inclusionary Housing; and HE-I-14 State and Federal Law Conformance; and
WHEREAS, on May 4, 2026, the City Council and Planning Commission held a hearing to receive a presentation from The Housing Endowment and Regional Trust of San Mateo County (“HEART”) and City staff regarding the Density Bonus Ordinance and Inclusionary Housing Ordinance; and
WHEREAS, during that hearing HEART and City Staff identified several amendments necessary to bring the Density Bonus Ordinance and Inclusionary Housing Ordinance into alignment with current state housing and planning law requirements and regional best practices; and
WHEREAS, at the conclusion of that study session, the City Council provided direction on amendments and directed the City Manager to prepare draft ordinances for consideration; and 7 Packet Pg. 84
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WHEREAS, on May 4, 2026, the Planning Commission held a duly noticed public hearing on the proposed amendments contained in Text Amendment TA-129-26 (File No. 2026- 006) and at the conclusion of that hearing, the Planning Commission continued the hearing to June 1, 2026, and directed staff to make a number of revisions to the ordinance and address comments submitted by the California Coastal Commission; and WHEREAS, on June 1, 2026, the Planning Commission held a duly noticed public hearing on the revised proposed amendments and adopted Resolution No. 2026-005 by a vote of 6 to 0 with 1 absence, initiating Text Amendment TA-129-26 (File No. 2026-006) and recommending adoption of the proposed ordinance; and
WHEREAS, on July 20, 2026, the Planning Commission held a duly noticed public hearing to consider revisions to the proposed amendments to Sections 9-4.4102 (“Applicability”) and 9-4.4104 (“Local Coastal Program consistency”) contained in Text Amendment TA-129-26 (File No. 2026-005) that address density bonus projects in the Coastal Zone (“Coastal Zone Density Bonus Amendments”); and
WHEREAS, at that same meeting on July 20, 2026, the Planning Commission approved incorporation of the Coastal Zone Density Bonus Amendments into the draft ordinance and adopted Resolution No. 2026-006 by a vote of 5 to 1 with 1 absence, initiating Text Amendment TA-129-26 and recommending adoption of the proposed ordinance, with the Coastal Zone Density Bonus Amendments; and
WHEREAS, on August 24, 2026, the City Council held a duly noticed public hearing on the proposed ordinance and continued the item, at staff’s request, to September 14, 2026; and WHEREAS, the City Council held the continued public hearing at their regular meeting on September 14, 2026, and introduced Ordinance No. ###-C.S..

NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Pacifica does ordain as follows:

Section 1. Recitals. The City Council of the City of Pacifica does hereby find that the above referenced recitals are true and correct and material to the adoption of this Ordinance. 7 Packet Pg. 85
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Section 2. Amendment. Article 41 (“Density Bonus Program”) of Chapter 4, “Zoning” within Title 9, “Planning and Zoning” is repealed and replaced in its entirety to read as follows:

Article 41. - Density Bonus Program
Sec. 9-4.4100. – Purpose and Intent.

Sec. 9-4.4101. – Applicability.

Sec. 9-4.4102. – Definitions.

Sec. 9-4.4103. – Application Requirements
Sec. 9-4.4104. – Local coastal program consistency.

Sec 9-4.4105 – Application review process.

Sec. 9-4.4106. – Density Bonus Housing Agreement.

Sec. 9-4.4107. – Density Bonus Calculations.

Sec. 9-4.4108. – Density Bonus Delivery and Design Standards.

Sec 9-4.4109. – Commercial Density Bonus
Sec 9-4.4110. – Interpretation.

Sec. 9-4.4100. – Purpose and Intent.

In accordance with California Government Code Sections 65915, et seq., this Article specifies how compliance with state density bonus law will be implemented. Specifically, the purpose of this Article is to provide density bonuses, incentives, concessions, and waivers of development standards for the production of housing for very low-, low-, and moderate-income households, senior households, provision of daycare facilities, student housing, and donations of land, and for other housing types as provided by and consistent with state law. In enacting this Article, it is also the intent of the City of Pacifica to implement the goals, objectives, and policies of the City of Pacifica’s Housing Element of the General Plan. In the event of a conflict with this article and state law, state law shall govern.

Sec. 9-4.4101 Applicability.
(a) A housing development shall be eligible for a density bonus and other regulatory benefits that are provided by state density bonus law when the applicant seeks and agrees to provide housing as specified in Government Code Section 65915(b), (c), (f), (g), (h) and (v) or in Government Code Section 65195.5, or successor provisions. The density bonus calculations shall be made in accordance with state density bonus law. (b) The granting of a density bonus, concession or incentive, waiver, or parking reduction pursuant to this Article, shall not be interpreted, in and of itself, to require a general plan amendment, zoning ordinance text amendment, zoning change, or other 7 Packet Pg. 86
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discretionary approval, or any additional CEQA studies for bonus units above the site's maximum density.
(c) For any housing development project located within the coastal zone that utilizes density bonus, the provisions of Section 9-4.4104 also apply.
(d) Application of this Article does not waive application of other provisions of the City of Pacifica Municipal Code.

Sec. 9-4.4102 - Definitions.

The following terms are defined for purpose of this Article. In the event of a conflict between the words and phrases defined in this article and the words and phrases defined in Title 9 "Planning and Zoning,” Chapter 4 "Zoning," Article 2 "Definitions," the definitions in this Article shall prevail.
(a) "Base units" means the total number of units in a housing development, not including units added through a density bonus pursuant to this Article. (b) "Below Market Rate (BMR) unit" means any income-restricted dwelling unit created pursuant to and meeting the requirements of this Article. (c) "Concession" shall have the same meaning as the term "concession or incentive" pursuant to the state density bonus law, as defined in Government Code section 65915 subdivision (k), as may be amended.
(d) "Cost reduction" means a cost reduction that would be achieved for a housing development through a concession.
(e) "Density bonus" means a density increase over the otherwise maximum allowable residential density for a housing development as of the date the application is deemed complete, as prescribed by Government Code section 65915, as may be amended, or, if elected by the applicant, a lesser percentage of density increase, including, but not limited to, no increase in density.
(f) "Housing development" shall have the same meaning as the term "housing development" pursuant to the state density bonus law, as defined in Government Code section 65915 subdivision (i), as may be amended.
(g) "Maximum allowable residential density" means the maximum residential density allowed for a residential housing development under the Zoning Chapter and the land use element of the general plan. If the density allowed under the Zoning Chapter is inconsistent with the density allowed under the land use element of the general plan, the general plan density shall prevail. For purposes of this definition, residential density shall be calculated based upon the gross acreage of a residential housing development. (h) "State Density Bonus Law" means California Government Code Section 65915, et seq, as the same may be renumbered or amended.
(i) “Waiver” is a reduction or modification of any “development standards” and other regulations when those requirements potentially make the construction of the project physically infeasible if not approved, pursuant to state density bonus law, as defined in Government Code section 65915 subdivision (e).
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Sec. 9-4.4103 Application Requirements.
(a) All requests for density bonuses, concessions, and waivers for a housing development shall be submitted as part of the application for approval of the housing development. No application for a housing project seeking a density bonus, concession or waiver may be deemed complete unless an affordable housing plan is submitted in accordance with the provisions of this Article.
(b) An application for a density bonus shall include any required fees and the following minimum information as part of the Affordable Housing Plan required under Section 9-

4.4706 of the Municipal Code:
(1) For a requested density bonus, the following information shall be required, in addition to any information required under Article 47, Section 9-4.4706 of the Municipal Code:
i. Summary table showing the maximum number of dwelling units permitted by the zoning and general plan excluding any density bonus units, proposed number of BMR units and income level, proposed bonus percentage, number of density bonus units proposed, total number of dwelling units proposed on the site, and resulting density in units per acre. ii. The Subparagraph of Government Code Section 65915(b)(1) under which the housing development qualifies for a density bonus and reasonable documentation demonstrating that the housing development is eligible for a bonus under that subparagraph.
iii. Where the housing development is seeking an additional bonus, the subparagraph of Government Code Section 65915(v)(1) under which the housing development qualifies for an additional density bonus and reasonable documentation demonstrating that the housing development is eligible for the additional bonus under that subparagraph. iv. A description of all dwelling units existing on the site in the five-year period preceding the date of submittal of the application, including number of bedrooms, and identification of any units rented in the five-year period; and whether any are/were subject to any form of rent control through a public entity’s valid exercise of its police power; or subject to a recorded covenant ordinance, or law restricting rents to levels affordable to households of lower or very low income.

1. number of bedrooms; and

2. identification of any units rented in the five-year period; and

3. whether any of the units are/were subject to any form of rent control through a public entity’s valid exercise of its police power;, or subject to a recorded covenant ordinance, or law restricting rents to levels affordable to households of lower or very low income. v. If dwelling units on the site are currently rented, income and household size of all residents of currently occupied units, if known. If any dwelling units on the site were rented in the five-year period but are not currently rented, the income and household size of residents occupying the dwelling units when the site contained the maximum number of dwelling units, if known.
vi. If a density bonus is requested for a land donation, the location of the land to be dedicated, proof of site control, and reasonable documentation that 7 Packet Pg. 88
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each of the requirements included in Government Code Section 65915 (g) can be met.
(2) Concessions. The number of concessions that may be requested shall be the number the applicant is entitled to pursuant to state density bonus law. The application shall include the following minimum information for each concession requested:
i. The regulation from which the applicant is requesting a concession and the description of the proposed cost reduction.
(3) Waivers. For each waiver requested the applicant shall describe each waiver requested and how the requested waiver deviates from the City of Pacifica’s required development standard.
(4) Parking reductions. If a housing development is eligible for a density bonus pursuant to state density bonus law, the applicant may request an on-site vehicular parking reduction specified in Government Code Section 65915(p). An applicant may request this parking reduction in addition to the concessions and waivers permitted by paragraphs (2) and (3) of this subsection. The application shall include a table showing parking required by the zoning regulations, parking proposed under state density bonus law, the paragraph under Government Code Section 65915(p) (or other statute) under which the project qualifies for the parking reduction, and reasonable documentation that the project is eligible for the requested parking reduction
(5) Density bonus or concession for a childcare facility in a housing development.

The application shall include reasonable documentation that all of the requirements included in Government Code Section 65915(h) can be met. (6) Density bonus or concession for a condominium conversion. The application shall include reasonable documentation that all of the requirements included in Government Code Section 65915.5 can be met.

Sec. 9-4.4104 – Local Coastal Program Consistency.
(a) State Density Bonus Law provides that it shall not be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976 (Cal.

Public Resources Code § 30000 et seq.) and further provides that the granting of a density bonus, concession or incentive, waiver, or parking reduction shall not be interpreted, in and of itself, to require a local coastal plan amendment. (b) For development within the coastal zone, any requested density bonus, concession or incentive, waiver, or parking reduction shall be consistent with all applicable requirements of the certified Local Coastal Program, with the exception of density, including without limitation regulations to ensure coastal resources are not significantly impacted, and shall be consistent with State Density Bonus law (Government Code section 65915 et seq.) so long as it doesn’t lead to significant coastal resource impacts.

Sec 9-4.4105 – Application review process.
(a) All requests under state density bonus law shall be reviewed and acted upon concurrently with the housing development planning application by the approval body with authority to approve the housing development, within the timelines prescribed by California 7 Packet Pg. 89
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Government Code Section 65950. Appeals of any decision on planning application shall include the appeal of all requests under state density bonus law. (b) To ensure that an application for a housing development conforms with the provisions of state density bonus law and the Coastal Act, if applicable, the decision-making body must make the following findings, as applicable, to approve a requested density bonus:
(1) The housing development provides the housing required by state density bonus law to be eligible for a density bonus and any concessions, parking reduction, or waivers requested
(2) If an additional bonus is requested, the housing development provides the housing required by state density bonus law to be eligible for an additional density bonus under Government Code Section 65915(v)(1).
(3) If the housing development requires the demolition of one or more residential dwelling units, the housing development will create replacement units as required by California Government Code Sections 65915(c)(3) and 66300.6(a). (4) If a waiver is requested, the development standards for which a waiver is requested would have the effect of physically precluding the construction of the housing development at the densities or with the concessions permitted. (5) If a parking reduction is requested, the housing development is eligible for any requested parking reductions under Government Code Section 65915(p) or other statute.
(6) If the density bonus is based all or in part on donation of land, the requirements of Government Code Section 65915(g) have been met.
(7) If the density bonus or concession is based all or in part on the inclusion of a childcare facility or condominium conversion, the requirements included in Government Code Section 65915(h) or 65915.5, as appropriate, have been met. (8) If the housing development is in the coastal zone, the requested density bonus and any requested concession, waiver or parking reduction is consistent with all applicable requirements of the certified Local Coastal Program. (c) The decision-making body shall grant a concession requested by the applicant unless it makes a written finding, based upon substantial evidence, of any of the following:
(1) The proposed concession would be contrary to state or federal law; or (2) The proposed concession would have a specific, adverse impact upon the public health or safety or on any real property that is listed in the California Register of Historic Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the housing development unaffordable to low- and moderate-income households. For the purpose of this subsection, “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 that the application for the housing development was deemed complete as defined in Government Code Section 65589.5. (3) The concession would not result in a cost reduction. (d) The decision-making body shall grant the waiver of development standards requested by the applicant unless it makes a written finding, based upon substantial evidence, of any of the following:
(1) The proposed waiver would be contrary to state or federal law; or (2) The proposed waiver would have an adverse impact on any real property listed in the California Register of Historic Resources; or
(3) The proposed waiver would have a specific, adverse impact upon public health or safety, and there is no feasible method to satisfactorily mitigate or avoid the specific 7 Packet Pg. 90
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adverse impact without rendering the housing development unaffordable to low- and moderate-income households. For the purpose of this subsection, “specific, adverse impact” means a significant, quantifiable, direct and unavoidable impact, based on objective written public health or safety standards, policies or conditions as they existed on the date that the application for the housing development was deemed complete as defined in Government Code Section 65589.5
(e) If a child care center complies with the requirements of the Government Code Section 65915 (h), the decision-making body may deny a density bonus or concession that is based on the provision of child care facilities only if it makes a written finding, based on substantial evidence, that the City already has adequate child care facilities (f) A request for a minor modification of an approved density bonus housing plan may be granted by the Community Development Director, or their designee, if the modification substantially complies with the original density bonus plan and conditions of approval.

Other modifications to the density bonus housing plan shall be approved in the same manner as the original plan
9-4.4106 Density Bonus Housing Agreement.
(a) If a density bonus, concession, parking reduction, or waiver is approved pursuant to this Article, the applicant shall enter into a affordable housing agreement, as outlined in Article 47 Section 9-4.4710, with the following additional provisions for density bonus projects, which sets forth the conditions and guidelines to be met in the implementation of the state density bonus law and that ensures compliance with all provisions of this Article. The agreement will also establish specific compliance standards and remedies available to the City of Pacifica upon failure to comply with state density bonus law, this Article, or the affordable housing agreement.
(1) For for-sale projects, the applicant shall enter into an affordable housing agreement with the City of Pacifica, running with the land, in a form approved by the City Attorney or their designee, to be executed by the City Manager, or their designee. The agreement shall require that the initial purchasers of those for-sale units that qualified the applicant for the receipt of the density bonus, waiver, or parking reduction are persons and families of lower or moderate income, as applicable, or if any for-sale unit is not purchased by an income-qualified household within 180 days after the issuance of the certificate of occupancy, then the unit(s) must be sold pursuant to a contract that satisfies the requirements of the Revenue and Taxation Code Section 402.1(a)(10) to a qualified non-profit housing corporation as defined in state density bonus law, unless otherwise allowed by the City, and that the units are offered at an affordable housing cost, as that cost is defined in state density bonus law and that the units are offered at an affordable housing cost, as that cost is defined in Health and Safety Code Section 50052.5l; and shall contain other relevant provisions approved by the City Attorney. The City of Pacifica shall enforce an equity sharing agreement consistent with state density bonus law unless it is in conflict with the requirements of another public funding source or law. The affordable housing agreement shall require the continued affordability of the for-sale units for 45 years, resetting for each purchase or transfer to a new owner.
(2) For rental projects, the applicant shall enter into an affordable housing agreement with the City of Pacifica, running with the land, in a form approved by the City Attorney or their designee, to be executed by the City Manager, or their designee. The agreement shall require the continued affordability of all rental units that qualified the 7 Packet Pg. 91
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applicant for the receipt of the density bonus, waiver, or parking reduction for 55 years or a different period of time if required by Article 47 regarding the City’s Inclusionary and Below Market Rate Program or the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. The agreement shall identify the type, size, and location of each affordable unit; shall specify the eligible occupants; shall specify phasing of the affordable units in relation to the market-rate units; and shall contain other relevant provisions approved by the City Attorney. Rents for the lower income density bonus units shall be set at an affordable rent as defined in state density bonus law. (c) Where a density bonus, waiver or parking reduction is provided for a market-rate senior housing development, the applicant shall enter into an affordable housing agreement with the City of Pacifica, running with the land, in a form approved by the City Attorney or their designee, to be executed by the City Manager, or their designee, to require the housing development to be operated as “housing for older persons” consistent with state and federal fair housing laws.
(d) The executed affordable housing agreement or restrictive covenant shall be recorded against the housing development prior to issuance of building permit for any structure in a residential development project required to meet the provisions of this Article. The affordable housing agreement shall run with the land and bind all future owners and successors in interest for the period of time set forth in this Article. 9-4.4107. Density Bonus Calculations.
(a) In determining the total number of units to be granted, each component of any density calculation, including base density and bonus density, resulting in fractional units shall be separately rounded up to the next whole number.
(b) When calculating the number of affordable units needed to qualify for a given density bonus, any fractions of affordable dwelling units shall be rounded up to the next whole number.
(c) Except where a housing development is eligible for an additional bonus pursuant to Government Code Section 65915(v), each housing development is entitled to only one density bonus. If a housing development qualifies for a density bonus under more than one category, the applicant shall identify the category under which the density bonus is requested to be granted.
(d) In determining the number of affordable units required to qualify a housing development for a density bonus pursuant to state density bonus law, only base units are included in the calculations. Any on-site units that satisfy the City of Pacifica’s inclusionary housing requirements in Article 47 of the Code and are required to be constructed concurrently with the housing development may qualify the housing development for a density bonus if those units meet or exceed the requirements of state density bonus law. (e) Payment of fees in lieu of providing affordable units under Article 47 of the Code does not qualify a housing development for a density bonus.
(f) The applicant may elect to accept a lesser percentage of density bonus than the housing development is entitled to, or no density bonus, but no reduction will be permitted in the percentages of affordable units required by state density bonus law. Regardless of the number of affordable units, no housing development shall be entitled to a density bonus greater than what is authorized under state density bonus law. (g) Nothing in this Article requires the provision of direct financial incentives from the City of Pacifica for the housing development, including, but not limited to, the provision of 7 Packet Pg. 92
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financial subsidies, publicly owned land, no-interest or below market rate loans, fee waivers, or waiver of dedication requirements. The City of Pacifica, at its sole discretion, may choose to provide such direct financial incentives. 9-4.4108 Density Bonus Delivery and Design Standards.

Any BMR Units created as a result of this Article shall be completed in accordance with the unit size, design, and proportional construction phasing, set out in Section 9-4.4704 of the Code, and the implementation requirements set out in Section 9-4.4713 of the Code. 9-4.4109 Commercial Development Bonus
(a) A commercial development may be eligible for a development bonus where the commercial developer partners with an affordable housing developer to construct affordable housing on the commercial project site, or offsite elsewhere in the City of Pacifica located near schools and employment centers and within one-half mile of a major transit stop.
(b) The commercial developer may participate through the donation of land or funds for the affordable housing, or through direct construction of the housing units. (c) To be eligible for a development bonus, at least 30 percent of the housing units must be set aside for lower-income households or 15 percent of the housing units must be set aside for very low-income households.

Sec 9-4.4110 Interpretation.

If any portion of this Article conflicts with state density bonus law or other applicable state law, state law shall supersede this Article. Any ambiguities in this Article shall be interpreted to be consistent with state density bonus law. Statutory references in this ordinance include successor provisions.
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Section 3. Amendment. Article 47 (“City of Pacifica Below Market Rate (Inclusionary) Program”) of Chapter 4, “Zoning” within Title 9, “Planning and Zoning” is repealed and replaced in its entirety to read as follows:

Article 47. - Inclusionary and Below Market Rate Housing Program Sec. 9-4.4700. – Purpose and Intent.

Sec. 9-4.4701. – Applicability.

Sec. 9-4.4702. – Definitions.

Sec. 9-4.4703. – Inclusionary housing requirements—Onsite Construction of BMR Units Required.

Sec. 9-4.4704. – BMR unit size and design; construction phasing.

Sec. 9-4.4705. – Alternatives to onsite affordable residential units.

Sec. 9-4.4706. – Affordable housing plan for BMR units.

Sec. 9-4.4707. – For-sale BMR units.

Sec. 9-4.4708. – Rental BMR units.

Sec. 9-4.4709. – Eligibility requirements.

Sec. 9-4.4710. – Affordable housing agreement.

Sec. 9-4.4711. – Adjustments, waivers.

Sec. 9-4.4712. – Hillside preservation and B-Lot size overlay districts.

Sec. 9-4.4713. – Implementation.

Sec. 9-4.4714. – Enforcement.

Sec. 9-4.4700. – Purpose and Intent.

The purpose of this Article is to enhance the public welfare by establishing policies which require the development of housing affordable to households with very low, low, median, and moderate incomes to assure that residents have a diversity of housing options, to help meet the City's regional share of housing needs, and implement the goals and objectives of the general plan and housing element.

It is the intent of this article to establish requirements for the provision of income restricted housing units in residential and mixed-use residential development projects of a certain size, 7 Packet Pg. 94
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encourage construction of on-site affordable units, and provide alternatives to constructing inclusionary units on the same site as the market rate residential development project.

Sec. 9-4.4701 Applicability.
(a) Applicability. The requirements of this article shall apply to all residential development projects and mixed-use residential development projects of eight or more residential units, lots, or parcels, including any of the following:
(1) New construction of residential units;
(2) Addition of residential units to existing projects; (3) Addition of residential units to an existing multifamily dwelling; (4) Creation of residential lots;
(5) Conversion of existing dwelling units to condominium ownership; and (6) Conversion of an existing nonresidential building or floor area to residential use (b) For purposes of determining the total number of units for applicability, accessory dwelling units and junior accessory dwelling units are not included. (c) Contemporaneous construction of eight (8) or more primary dwelling units on a lot, or on contiguous lots for which there is evidence of common ownership or control, even though not covered by the same city land use approval, shall also be considered a single residential development. Construction shall be considered contemporaneous if any building permits are issued within five (5) years following the date of completion of any earlier construction.
(d) An applicant for a residential development project vested by a preliminary application submitted under California Government Code section 65941.1(a) may opt-in to the provisions of a subsequently adopted version of this article by submitting a written notice to the Community Development Director and including an affordable housing plan, as required under Sec. 9-4.4706.
(e) Exemptions. The requirements of this article do not apply to:
(1) The reconstruction of any structures that have been destroyed by fire, flood, earthquake, or other act of nature provided that the reconstruction takes place within three years of the date the structures were destroyed. (2) Residential development projects that will contain sufficient BMR units to meet or exceed the requirements of this article.

Sec. 9-4.4702. - Definitions.

For the purposes of this article, unless otherwise apparent from the context, the following words and phrases are defined as set forth below. In the event of a conflict between the words and phrases defined in this article and the words and phrases defined Article 2 "Definitions" of this article the definitions in this article shall prevail with respect to implementation of this article. (a) "Affordable housing agreement" means an agreement, running with the land that assures that a BMR unit will be maintained and sold or leased at an affordable housing cost as required by this Article and City policies. It may include a covenant, resale restriction and refinance limitation agreement, deed restriction, performance deed of trust, or such other document or documents as are satisfactory to the City Attorney. (b) "Affordable housing cost" means an "affordable housing cost" as defined in Section 50052.5 of the California Health and Safety Code.
(c) "Affordable rent" means "affordable rent" as defined in Section 50053 of the California Health and Safety Code.
(d) "Applicant” means the applicant for a residential development project, as set forth on the City’s General Planning Application form.
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(e) "Area median income" (AMI) means the median household income for the San Francisco Primary Metropolitan Statistical Area (PMSA) as determined annually by the California Department of Housing and Community Development (“HCD”) and published by the County of San Mateo.
(f) "Below Market Rate (BMR) unit" means any income-restricted dwelling unit created pursuant to and consistent with this Article.
(1) " BMR unit, For-sale " means a BMR unit offered for sale, including, but not limited to, single-family homes, condominiums, other common interest developments, and mutual housing associations.
(2) "BMR unit, Rental" means a BMR unit offered for lease or rent. (g) "Density bonus" shall have the meaning as specified in Section 9-4.4102 of the Code. (h) "Eligible household" means a very low-, lower-, 110% of AMI-, or moderate-income household approved by the City in accordance with this article. (i) “First Approval” means the first of the following approvals to occur with respect to a residential development project: any planning entitlement, discretionary or ministerial, or approval under the Zoning Ordinance, subdivision approval, or building permit for construction.
(j) “Group living accommodation” means a residential development project that is occupied by individuals of separate households and are characterized by separate sleeping rooms without individual kitchen facilities, and containing congregate bath and/or dining facilities or rooms.
(k) "Household" means one person living alone or two or more persons sharing residency, regardless of relationship or dependent status, whose income is considered for housing payments.
(l) “Household Income” shall be the gross income of the household as calculated pursuant to Section 50079.5 of the California Health and Safety Code, as amended, or its successor.

The household income categories addressed in this Article shall be defined as follows:
(1) "Very low-income household" means a household whose annual income does not exceed the qualifying limits set for "very low-income households" and is generally understood to be approximately 50 percent of area median income, as defined by HCD.
(2) “Lower-Income Household” means a household whose annual income does not exceed the qualifying limits set for "lower income households" and is generally understood to be approximately 80 percent of area median income, as defined by HCD.
(3) “110% of Area Median Income Household” means a household whose annual income does not exceed 110 percent of area median income, based on HCD published income limits.
(4) "Moderate-income household" means a household whose annual income does not exceed the qualifying limits set for "persons and families of low or moderate income" and is generally understood to be approximately 120 percent of area median income, as defined by HCD.
(m)"Market rate unit" means a dwelling unit where the rental rate or sales price is not restricted by this article.
(n) "Off-site" means located outside or in a location other than site of the residential development project.
(o) "On-site" means located within the residential development project. (p) "Residential development project" means any new construction of dwelling units, subdivision of property for housing development, conversion of rental projects to 7 Packet Pg. 96
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condominium or other common interest ownership under Article 24.5, conversion of nonresidential buildings or floor area to residential, or any other creation of dwelling units or lots for housing that is authorized by a ministerial or discretionary land use. Residential development projects include those that are part of a mixed-use residential project. (q) “Residential unit" means any dwelling unit, live/work unit, or any bedroom of a group living accommodation in a residential development project. (r) "Residential Unit Floor Area" means, for the purpose of this article, the floor area of the residential unit(s) of a residential development project. (1) Residential Unit Floor Area shall be measured from the interior of the walls of each unit. The residential unit floor area shall exclude areas that are not habitable residential square footage such as:
i. Balconies, whether private or open to all residents
ii. Storage lockers not located within residential units iii. Vehicular (e.g., automobile or motorcycle) and bicycle parking areas that are separate areas from the residential unit
iv. Other qualifying areas that are not associated with residential units, upon approval of the Zoning Administrator.
(2) For residential units consisting of group living accommodations, residential unit floor area shall also include common rooms/lounges and supporting facilities such as kitchens and restrooms.

Sec. 9-4.4703. - Inclusionary housing requirements—Onsite Construction of BMR Units Required.
(a) Requirement to Construct Onsite BMR Units. Unless an alternative pursuant Sec 9-

4.4704 is approved, and as otherwise provided in this section for fractional units, all BMR units must be constructed onsite.
(b) General
(1) Fractional Units. In determining the number of BMR units required, any decimal fraction below 0.5 shall be paid as an in-lieu fee, in accordance with section 9-

4.4705(b) and the in-lieu fee schedule. Any decimal fraction of 0.5 or above shall be rounded up to the nearest whole number.
(c) On-Site BMR Units
(1) Number of BMR units required. A minimum of 15 percent of all units, lots, or parcels in a residential development project subject to this article shall be on-site BMR units restricted for occupancy by, and affordable to, very low-, lower-, 110 percent of AMI, or moderate-income households.
(2) A BMR Unit that is constructed to qualify for a density bonus under Government Code section 65915 that otherwise meets these inclusionary housing requirements shall also qualify as inclusionary housing and a density bonus unit. (3) For projects with for sale units:
i. At least 50 percent of the required BMR units shall be restricted to occupancy by lower-income households; and
ii. The remaining BMR units required shall be restricted to occupancy by moderate-income households.
iii. The Applicant has the right, but is not required, to increase the percentage of lower-income household BMR units.
(4) For projects with rental units:
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i. At least 33.3 percent of the required BMR units shall be restricted to occupancy by very low-income households. Where there is only one BMR unit required, this unit shall be a very low-income unit; and ii. 33.3 percent of the required BMR units shall be restricted to occupancy by lower income households; and
iii. The remaining required BMR units shall be restricted to occupancy by 110 percent of AMI households.
iv. The Applicant has the right, but is not required, to increase the percentage of very low- and lower-income household BMR units.

Sec. 9-4.4704. - BMR unit size and design; construction phasing. (a) BMR units shall meet the following requirements:
(1) Be distributed throughout the residential development project; (2) Have exterior design and appearance compatible with and substantially the same as market rate units within the residential development project, including landscaping; (3) Have similar access from the exterior as market rate units; (4) Have access to all on-site common areas and amenities; (5) Have interior finishes, fixtures, and appliances that are comparable with the standard market rate units;
i. An Applicant may propose the use of different interior unit amenities, such as floor covering, appliances, and other fixtures, but these differences shall be specified within the affordable housing plan submitted at the time of planning application, as required by Section 9-4.4706(a), but all amenities must at a minimum be Underwriters Laboratories (UL) or American Gas Association (AGA) listed; ii. The Zoning Administrator shall approve the proposed use of different interior unit amenities provided the proposal meets the requirements of this section. (6) Have the same proportion of units by number of bedrooms and average size as the market rate units;
i. An Applicant may propose an alternative mix of unit-types to comply with this section by providing BMR Units that comprise at least 15 percent of the total residential unit floor area of the residential development project where the alternative mix benefits the City by meeting either of the two following conditions:
a. the Applicant is creating units greater than 2,000 square feet, and by creating smaller units, more BMR units will be created; or
b. the Applicant is creating mostly studio and one-bedroom units, and by providing BMR units with two or three bedrooms, fewer units are created, but meet the needs of families.
ii. The Zoning Administrator shall approve the proposed alternative mix of unit types that meet the requirements of this section.
(7) That a proportionate number of units be constructed prior to or concurrently with market rate units in the residential development project or applicable phase of the residential development project.

Sec. 9-4.4705. – Alternatives to onsite affordable residential units. (a) General - An Applicant may comply with this Article through one or a combination of the alternatives set forth in subsections (b) through (e) below, which shall be considered by the City Council in accordance with this section.
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(1) Unless otherwise provided in this section, the use of an alternative or combination of alternatives shall be subject to approval by the City Council. The alternative will be considered by the City Council as set forth below. (2) Alternatives shall be based on a minimum of 20 percent of all units, lots, or parcels in a residential development project seeking alternative compliance. For purposes of determining the total number of BMR units required, density bonus units, accessory dwelling units, and junior accessory dwelling units are not included.
(3) In accordance with state density bonus law, these alternatives are not available for BMR units that serve to qualify for a density bonus under Government Code Section 65915(g), unless the dedication of land conforms to the provisions of Government Code Section 65915(g).
(b) In-Lieu Fee Payment
(1) Payment in lieu of providing a unit. The Applicant may propose to pay the City an amount of money in lieu of providing a BMR unit, which shall be based on 20 percent of the residential development project’s units. The in-lieu payment for each BMR unit shall be set forth in a resolution adopted by the City Council. (2) In-Lieu Fees shall be paid prior to the issuance of the first building permit for the residential development project at the rate in effect at time of payment. Where an applicant will be creating custom lot subdivisions and selling the lots to individual purchasers, the applicant shall pay the in-lieu fee prior to the sale of the first lot. (3) In-lieu payments collected under this article shall be deposited into the City’s Housing In-Lieu Fund and shall be used only for the purpose of providing funding assistance for the provision of affordable housing, inclusionary monitoring costs, and administration costs. Administration costs shall not exceed 15 percent of any deposits into the Housing In-Lieu Fund. Such funds may also be used for a homebuyer's assistance program for eligible households. (4) The City Council shall approve the in-lieu fee alternative if all of the above requirements are satisfied. In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements.
(c) Off-site construction. When this off-site option is allowed, the Applicant must provide 20 percent of the residential unit floor area of the residential development project as BMR units, at affordability levels that meet or exceed the applicable on-site requirements in this article.
(1) Off-site BMR units shall be constructed within the City of Pacifica and shall receive Certificate of Occupancy prior to the issuance of any Certificate of Occupancy of the residential development project, unless being built in phases, in proportion to the phasing of the residential development project, as set forth in the Affordable Housing Agreement.
(2) Off-site BMR units shall be consistent and comply with the standards and requirements specified in this Article, except that the size and number of BMR units may differ from what the Applicant would have provided on-site. (3) BMR units shall be located on sites that are designated in the general plan for the intended residential development, have access to similar availability of services to the on-site units, and be accessible by paved roads.
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(4) The City Council shall approve the off-site construction alternative provided all of the above requirements are satisfied. In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements.
(d) Off-site preservation. In lieu of building BMR units, the Applicant may request to create off-site BMR units through the purchase and conversion of existing market-rate units to affordable units, either by the Applicant or by a not-for-profit entity. When this off-site option is allowed, the Applicant must provide 20 percent of the residential unit floor area of the residential housing development as BMR units, at affordability levels that meet or exceed the applicable on-site requirements of this article. (1) The off-site preservation units must be located within the City of Pacifica. (2) The size and number of BMR units may differ from what the Applicant would have provided on-site.
(3) If a not-for-profit is involved, they must be approved by the City Manager. (4) The off-site preservation units used to qualify for this alternative must be purchased prior to the issuance of a building permit for the residential development project. The Community Development Director may set out requirements related to the rehabilitation and condition of the property and the protection and/or temporary relocation of existing tenants. The Community Development Director may require that rehabilitation of the property and/or temporary relocation of existing tenants be completed before the issuance of a building permit for the residential development project. (5) For five years prior to the preservation of the off-site units, the average market rents must have been higher than 100 percent of area median income rent limits. (6) The City Council shall approve the off-site preservation alternative provided all of the above requirements are satisfied. In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements.
(e) Land dedication. In lieu of building BMR units, the Applicant may propose to dedicate land to the City or to an affordable housing developer. (1) This land must be of equivalent or greater value than the amount of the required in-lieu fee. The valuation of any land offered in-lieu shall be determined by an appraisal made by an appraiser mutually agreed upon by the City and the Applicant. Costs associated with the appraisal shall be borne by the Applicant. (2) The timing of the land dedication shall be at or before issuance of a building permit of the. Marketable title to the site is transferred to the City, or an affordable housing developer approved by the City, prior to issuance of building permit of the residential development project pursuant to an agreement between the Applicant and the City.
(3) Approval of land dedication.
i. Land proposed to be dedicated to the City requires approval of the City Council, at its sole discretion. Factors considered for the approval may include, but are not limited to, general location, access to transit, buildability, current General Plan and zoning designations, availability utilities and other services, the number of units that could be built at the location, and the availability of a proposed affordable housing developer. 7 Packet Pg. 100
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ii. Land dedicated to an affordable housing developer must meet the following requirements:
a. The site has a General Plan designation that authorizes residential uses and is zoned for residential development at a density to accommodate at least the number of affordable units that would otherwise be required.
b. The site is suitable for development of the BMR units, taking into consideration its configuration, physical characteristics, location, access, adjacent uses, and applicable development standards and other relevant planning and development criteria including, but not limited to, factors such as the cost of construction or development arising from the nature, condition, or location of the site. c. Infrastructure to serve the dedicated site, including, but not limited to, streets and public utilities, are available at the property line and have adequate capacity to serve the maximum allowable residential density permitted under zoning regulations.
d. The site has been evaluated for the presence of hazardous materials and for the presence of geological hazards and all such hazards are or will be mitigated to the satisfaction of the City prior to acceptance of the site by the City.
e. The value of the site upon the date of dedication is equal to or greater than the in-lieu fee that would otherwise be required under Subsection (b) above. The value of the site shall be determined pursuant to the program guidelines approved by the City Manager or their designee.
(4) Transfer of the property. At the time the land is transferred to the City or to an affordable housing developer, the Applicant must have paid any outstanding property taxes, and the property must be free of any liens or encumbrances, unless otherwise approved by the City.
(5) In the event of approval, the residential development project shall be conditioned to require compliance with all of the above requirements, and any other applicable conditions as determined by the City Council.

Sec. 9-4.4706. - Affordable housing plan for BMR units. (a) An affordable housing plan for BMR units shall be submitted as part of the application for first approval of any residential housing development. An application cannot be deemed complete unless an affordable housing plan conforming to the provisions of this article is submitted.
(b) If the applicant has requested a density bonus pursuant to Article 41 of this Code, the affordable housing plan required under this Section shall be combined with the affordable housing plan for BMR units required pursuant to Article 41 of this Code. (c) The affordable housing plan for BMR units shall include the following information:
(1) For residential housing development projects proposing to construct the BMR units onsite within the development, the affordable housing plan shall specify, at the same level of detail as the application for the residential development project:
i. Calculations for compliance with this Article. This includes the number of required and proposed BMR units, calculation of in-lieu fee, if applicable, and/or residential unit floor area, based on the specifics of the proposed residential development project. 7 Packet Pg. 101
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ii. The number, type, tenure, household income categories, number of bedrooms and baths, approximate location, size, and design (including finishes and features) of all BMR units.
iii. A tentative map or preliminary site plan, drawn to scale, showing the number and location of all proposed units, and designating the location of proposed BMR units. iv. The zoning and general plan designations and assessor’s parcel number(s) of the residential development project site.
v. If the residential development project is to be constructed in phases, an outline of the proposed phases and how the Applicant intends to construct the BMR units concurrently with the market-rate units.
vi. A preliminary marketing plan indicating the general approach to marketing BMR units, including the manner in which the BMR units will be offered to the public in a nondiscriminatory and equitable manner. The final marketing plan must be approved prior to first building permit issuance and shall be subject to approval by the Community Development Director or their designee.
vii. If the applicant requests the use of different finishes and features than market-rate units as addressed in Section 9-4.4704, the affordable housing plan shall describe this request.
(2) If an Applicant requests approval of alternatives to constructing the BMR units within a residential development project pursuant to subsection Section 9-4.4705 of this Article, the affordable housing plan shall describe the requested alternatives, and any in-lieu fee calculations.
(d) The affordable housing plan for BMR units shall be reviewed simultaneously with any other applications associated with the first approval of the residential housing development.

Sec. 9-4.4707. - For-sale BMR units.
(a) Price of units. The maximum sales price of a for-sale BMR unit shall be set by the City, based on the affordable housing cost, as defined in Section 9-4.4702, for each income category, and as established in guidelines approved by the Community Development Director.
(b) Deed and resale restrictions.
(1) For-sale BMR units shall remain available at an affordable housing cost to an eligible household for 45 years, which shall reset upon transfer or resale. Resale controls shall be by affordable housing agreements approved as to form by the City Attorney or their designee. Such documents shall provide that the City has an option to purchase the for-sale BMR unit(s), for the maximum resale price, as defined below. The City's option to purchase may be assigned to a qualifying eligible household, a nonprofit housing organization, other government entity, or other entity that will ensure the continuation of the affordability of the BMR units.
(2) Occupancy restrictions. For-sale BMR units shall only be occupied by their owners.

Renting, leasing, subleasing, or subletting shall not be permitted for more than two months in any year. Violation of these occupancy restrictions will be grounds for termination of the occupancy.
(3) Resale price. The resale agreement shall establish the following. In order to maintain the affordability of the for-sale BMR units constructed pursuant to this article, the maximum purchase price paid by each subsequent purchaser shall be limited to the original purchase price, increased by the percentage increase in area median income from the date of original purchase, plus the depreciated cost of any capital 7 Packet Pg. 102
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improvement expenditures greater than one percent of the original purchase price, minus any costs necessary to bring the unit into conformity with City building regulations in the event that the occupant has allowed the unit to deteriorate due to deferred maintenance.
i. Formula for Maximum Purchase Price: Original Maximum Purchase Price + Percentage Increase in area median income from date of Original Purchase + Depreciated Cost of any Capital Improvement Expenditures > 1 Percent of Original Purchase Price – Any Costs Necessary to bring the unit into City building regulations due to deferred maintenance
(c) Administration. The City may contract with an outside agency, which shall be responsible for selection and qualification of buyers in accordance with City-approved policies. The Applicant or subsequent seller shall pay all costs associated with this service for the for-sale BMR unit. The City also may contract with an outside agency to assist with monitoring the ongoing compliance of for-sale BMR units.

Sec. 9-4.4708. - Rental BMR units.
(a) Rental rates. The maximum rent of a rental BMR unit shall be an affordable rent approved by the City based on CA Health & Safety Code § 50052.5 or County of San Mateo County published rents. These rents shall include a utility allowance, in accordance with the utility allowance schedule published by the County of San Mateo Department of Housing. (b) Rental restrictions. Rental BMR units shall remain available at an affordable rent to an eligible household for 99 years. The rents shall be regulated by affordable housing agreements approved as to form by the City Attorney or their designee. (c) Administration. The rental of rental BMR units shall be administered according to Cityapproved policies by the Applicant or a nonprofit housing organization, government entity, or other entity approved by the City. The City may charge fees to cover the costs of administration of this program, in an amount set from time to time by City Council resolution.

Sec. 9-4.4709. - Eligibility requirements.

Only eligible households may occupy BMR units. No household may occupy a BMR unit unless the City or its designee has approved the household's eligibility in accordance with Cityapproved policies. Preference shall be given to persons residing or working within Pacifica, in accordance with federal and state fair housing and other applicable laws. Eligibility requirements may be further defined in guidelines approved by the Community Development Director.

Sec. 9-4.4710. - Affordable housing agreement.
(a) Applicability. Recordation of an affordable housing agreement shall be made prior to issuance of a building permit for any structure in a residential housing development. The affordable housing agreement shall run with the land and bind all future owners and successors in interest.
(b) The affordable housing agreement shall be in a form approved by the City Attorney or their designee and shall include the following, without limitation:
(1) All information provided in the affordable housing plan pursuant to Section 9-4.4706 of this Article.
(2) The household income categories of the BMR units, consistent with the requirements of Section 9-4.4702 of this Article or any alternative requirements pursuant to Section 9-4.4705 of this Article.
(3) Continued affordability of the BMR units, as follows:
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i. For-Sale Inclusionary Units. The affordable housing agreement shall require that a resale restriction agreement, in a form approved by the City Attorney or their designee, be recorded against each for-sale BMR unit when the unit is first transferred to an eligible purchaser. The resale restriction agreement shall provide that BMR units in for-sale housing developments shall remain affordable for 45 years, to be reset upon resale, and that the affordability provisions be applicable to any subsequent transferees or successors in interest. The resale restriction agreement shall also provide that the for-sale BMR unit shall not be rented, except as allowed in Section 9-4.4707 of this Article.
ii. Rental BMR Units. The affordable housing agreement, in a form approved by the City Attorney or their designee, shall be recorded against each residential housing development containing rental units to ensure that the BMR units remain affordable for 99 years. Rental BMR units that are later converted to for-sale units, e.g., converted to condominiums, and then sold shall be sold as for-sale BMR units, in accordance with Chapter 4, Article 24.5 of the Municipal Code and any regulations implementing this section approved by the Community Development Director.
(4) The affordable housing agreement shall specify that no household shall be permitted to begin occupancy of a BMR unit unless the City Community Development Director, or the City Community Development Director’s designee, has approved the household’s eligibility.
(5) Affordable housing agreements for residential Development projects intended to be occupied by special populations or households with special needs, such as those with a physical or mental disability, or for those who were formerly unhoused, or with one or more members who are 62 years of age or older shall provide that dwelling units in the residential development project shall be occupied by persons eligible to reside in such a project.
(6) The affordable housing agreement shall include provisions requiring maintenance of records to demonstrate compliance with this Article.
(7) The affordable housing agreement shall include a description of remedies for breach of the agreement by either party. The City may identify tenant households or qualified purchaser households as third party beneficiaries under the agreement. (8) The affordable housing agreement shall include any other provisions determined necessary by the City Attorney or their designee to ensure implementation and compliance with this Article.

Sec. 9-4.4711. - Adjustments, waivers.
(a) Process. The requirements of this article may be waived, adjusted, or reduced if the Applicant shows that applying the requirements of this article would take property in violation of the United States or California Constitutions. Such a request shall be made in writing and filed with the City Manager at the time of submittal of an initial application for approval of the residential development project and/or as part of any appeal that the city provides as part of the process of approval. The request shall state completely and in detail: (i) the requested waiver, adjustment, or reduction of the requirements, (ii) the factual basis for the request, and (iii) the legal basis of this request. In making a determination on an application for waiver, adjustment, or reduction, the Applicant shall bear the burden of presenting substantial evidence to support the claim. The City Manager, in consultation with the City Attorney, shall consider the request and render a decision in writing within 30 days. If the City Manager determines that those 7 Packet Pg. 104
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requirements constitute a taking in violation of the United States or California Constitutions, the requirements of this article shall be modified, adjusted, or waived to the extent necessary to avoid an unconstitutional result or illegal outcome. If the City Manager determines that no violation of the United States or California Constitutions would occur through application of this article, the requirements of this article shall remain applicable unless the City Manager's determination is overruled or modified by the City Council on appeal.
(b) Appeal procedure. A decision of the City Manager on a request for a reduction or waiver pursuant to subsection (a) above shall be appealable in accordance with this section. A person seeking judicial review of a decision shall first complete an appeal under this section. Any person wishing to appeal a decision of the City Manager shall file an appeal to the City Council in writing with the City Clerk not later than ten days from the date of the written decision of the City Manager. The written appeal shall state completely and in detail the factual and legal grounds for the appeal. The City Council shall consider the appeal at a public hearing within sixty days after the filing of the request. The decision of the City Council is final.
(c) Fee for adjustment request or appeal. The cost of the request for adjustment or waiver of the requirements of this article and appeal shall be borne by the applicant in an amount set forth in a resolution adopted by the City Council.

Sec. 9-4.4712. - Hillside preservation and B-Lot size overlay districts.

Nothing in this article is intended to nor shall it supersede the provisions of the Hillside Preservation District (HPD) or B-lot size overlay district (B-district). Residential development projects located within HPD and/or B-district land that provide BMR units in accordance with this article shall be subject to all regulations and standards of Article 22.5, regarding the HPD district, including applicable lot coverage limitations, and Article 20, regarding the B-district.

Sec. 9-4.4713. - Implementation.
(a) No building permit shall be issued for any market-rate unit until the permittee has obtained permits for a proportionate number of the BMR units required by this article. No final inspection for occupancy for any market-rate unit shall be completed until final inspection has been completed for a proportionate number of the BMR units required by this article.
(b) The time requirements set forth in this Section for issuance of building permits for market-rate units and for final inspections for occupancy for market-rate units may be modified to accommodate phasing schedules, model variations, or other factors in a residential development project within the submitted affordable housing plan pursuant to Section 9-4.4707 of this Article, if the City determines this will provide greater public benefit and an affordable housing agreement pursuant to Section 9-4.4710 of this Article has been accepted by the approval body with the authority to approve the development. (c) Conditions to carry out the purposes of this Article shall be imposed on the first approval for a residential development project and any subsequent approvals. (d) The City Manager is authorized to execute the affordable housing agreements following approval by the Community Development Director and the City Attorney or their designee.
(e) The Community Development Director shall promulgate guidelines to further implement this ordinance. These guidelines shall include, but are not limited to, the following:
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(1) The form and contents of the affordable housing agreements, including provisions for successors in interest and other ownership transfers; (2) The form and contents of the final marketing plan and resident selection process; (3) Procedures for setting rents and sales prices for the BMR units in accordance with this article and with state law;
(4) Procedures for qualifying tenant households and prospective purchaser households of BMR units, including any preferences;
(5) Compliance and monitoring procedures to assure that affordability restrictions are maintained; and
(6) Resale and subordination procedures for BMR for-sale units. (f) The City Council, as part of its master fee schedule, may establish fees to recover the City’s costs for the ongoing administration and monitoring of the affordability provisions of the BMR units, except where prohibited by State law.

Sec. 9-4.4714 - Enforcement.
(a) The City is authorized to enforce the provisions of this Article and all affordable housing agreements, including without limitation, regulatory agreements, resale controls, deeds of trust, or similar documents placed on the BMR units, by civil action and any other proceeding or method permitted by law.
(b) Failure of any official or agency to fulfill the requirements of this Article shall not excuse any applicant or owner from the requirements of this Article. (c) The remedies provided for herein shall be cumulative and not exclusive and shall not preclude the City from any other remedy or relief to which it otherwise would be entitled under law or equity.
(d) Legal action. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this article. Failure of any official or agency to fulfill the requirements of this article shall not excuse any person, owner, household, or other party from the requirements of this article.

Section 4. Compliance with CEQA. The City Council hereby finds that the action to adopt this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA), pursuant to the CEQA Guidelines (14 Cal. Code Regs. 15000 et seq.), including without limitation under Section 15061(b)(3) of the CEQA Guidelines because it can be seen with certainty that there is no possibility the adoption of this Ordinance may have a significant effect on the environment. The City Clerk shall file a Notice of Exemption with the San Mateo County Clerk.

Section 5. Severability. If any section, subsection, sentence, clause, or phase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentence, clauses or phrases be declared unconstitutional.

Section 6. Publication. The City Clerk is hereby ordered and directed to certify to the passage of this Ordinance by the City Council of the City of Pacifica, California, and cause the same to be published in accordance with State law.
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Section 7. Effective Date. This Ordinance shall be in full force and effective 30 days after its adoption and shall be published and posted as required by law. For areas within the Coastal Zone, this Ordinance shall not become effective until the California Coastal Commission certifies an amendment to the City’s local coastal program pursuant to Section 30514 of the Public Resources Code.

Section 8. PASSED AND ADOPTED this 28th day of September, 2026 by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
______________________________
Christine Boles, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney 7 Packet Pg. 107
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* * * * *
(ID # 6301) at 9/28/2026 6:00 PM City Council Regular Meeting 7 Packet Pg. 108

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
9/28/2026
1 SUBJECT:

Consideration of an appeal of the Planning Commission’s August 3, 2026, denial of an appeal of the Final Inconsistency Letter determinations by the Community Development Director that the Coastal Crest project is subject to (1) Ordinance 391-CS (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the project site); and (2) the 2025 Local Coastal Land Use Plan. The Coastal Crest project is an application for a Coastal Development Permit (CDP-477-25), Site Development Permit (PSD-876-25), Development Plan (DP-92-25), Specific Plan (SP-192-25), Tree Permit (TP-14-25), and Sign Permit (S-138-25) for development of 1,225 rental dwelling units in 20 apartment buildings and 26 townhomes on an approximately 86.39-acre site comprised of three undeveloped parcels (APNs 018-150-110, 018-150-120, 018-150-150) known as Coastal Crest Residences (File No. 2025-036).

RECOMMENDED ACTION:

Adopt the attached resolution denying the appeal, affirming the Planning Commission’s August 3, 2026, decision, and upholding the Community Development Director’s determinations that the project is subject to (1) Ordinance 391-CS, and (2) the 2025 Local Coastal Land Use Plan, as set forth in the Final Inconsistency Letter dated June 5, 2026 (Attachment A).

STAFF CONTACT:

Michael Christensen, Community Development Deputy Director (650) 738-7341
[email protected]
Samantha Updegrave, Community Development Director
(650) 738-7341
[email protected]
BACKGROUND/DISCUSSION:

Project Description
The proposed residential housing project includes development of 1,225 below market rate (BMR) units and reclamation of the former quarry site pursuant to the approved 1996 Reclamation Plan.

As set forth above, this hearing is not on the project itself, but rather on the legal determinations that the project is subject to (1) Ordinance 391-CS (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the project site), and (2) the 2025 Local Coastal Land Use Plan.

Application History
The project site (commonly referred to as the “Rockaway Quarry”) was originally a limestone quarry for which operations ceased in 1987. In accordance with the Surface Mining and Reclamation Act (“SMARA”), the City approved a reclamation plan for the project site in 1996. 8 Packet Pg. 109
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Since 1996, several proposals for alternative reclamation plans have been proposed, none of which were approved by the City. Most recently, the property owner proposed a revised Quarry Reclamation Plan, dated October 2023, and a subsequent Reduced Fill Alternative, dated August 2024. A Draft Environmental Impact Report (EIR) was prepared for that proposed project scope, but was never certified. The application for the revised Quarry Reclamation Plan was denied by the Planning Commission. The applicant appealed the Planning Commission’s denial to the City Council, and the City Council denied the appeal and upheld the Planning Commission’s denial. The applicant appealed the City Council’s decision to the State Mining and Geology Board, which rejected the appeal.

On April 8, 2025, the property owner filed a preliminary application for the residential project that is the subject of these appealed inconsistency determinations. The property owner also invoked the “Builder’s Remedy,” which provides that if a city does not have a certified Housing Element, it cannot deny or condition approval of a “housing development project” in a manner that renders the project infeasible, even if it is inconsistent with the City’s general plan and zoning ordinance, except in limited circumstances. This effectively allows certain housing projects to move forward even if not compliant with the City ’s general plan and zoning designations. Table 1 and Table 2 below provides a specific timeline of the current application history.

Application files that can be viewed online are available at:
https://www.cityofpacifica.org/departments/community-development/planning-division/quarrysite-sb-330-preliminary-application Table 1: SB 330 Preliminary Application Project Timeline Date Milestone
April 8, 2025 Preliminary SB 330 Application Submitted
May 5, 2025 Preliminary SB 330 Application Deemed Not Submitted May 7, 2025 Revised Preliminary Application deemed submitted under Gov’t Code Section 65941.1 vesting the laws in effect on that date Table 2: Formal Development Application Project Timeline Date Milestone
October 6, 2025 Submission of Formal SB 330 Application (Submittal #1) November 5, 2025 Determination of Incomplete Application (Submittal #1) February 2, 2026 Resubmission of Formal SB 330 Application (Submittal #2) February 27, 2026 Determination of Incomplete Application (Submittal #2) March 5, 2026 Applicant filed an appeal to the City Planning Commission regarding the Second Completeness determination.

March 25, 2026 Resubmission of Formal SB 330 Application (Submittal #3) April 7, 2026 Formal SB 330 Application Deemed Complete; Start of 60-Day Consistency Review of SB 330 Formal Application
April 28, 2026 Initial Inconsistency Determination Letter Issued (Attachment F)
May 12, 2026 Applicant withdrew appeal of the Completeness determination June 5, 2026 Final Determination of Project Inconsistency Letter Issued (Attachment C)
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Table 2: Formal Development Application Project Timeline Date Milestone
June 15, 2026 Applicant submitted Application to Appeal determinations that the Voter Initiative and 2025 LCLUP apply to project
(Attachment B)
August 3, 2026 Planning Commission public hearing on appeal; The Planning Commission adopted Resolution No. 2026-007 denying the
appeal (Attachment H)
August 12, 2026 Applicant filed appeal of the Planning Commission’s decision to the City Council (Attachment B)
September 28, 2026 Appeal of Planning Commission Decision to City Council (Subject of this staff report)
Inconsistency Review
After the application was deemed complete on April 7, 2026, the City underwent the legally required consistency review. Under the Housing Accountability Act ("HAA"), Government Code section 65589.5(j)(2)(A), a city must provide an applicant with written notice identifying any inconsistency between a proposed housing development and "an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision." The City was required to issue this inconsistency notice within 60 days of the date the application was determined to be complete which was June 6, 2026. (Gov. Code section 65589.5(j)(2)(A)(ii).) As a general rule, failure to issue the required notice within this period results in the project being deemed consistent with applicable local standards. The City satisfied this obligation through two letters:
an Initial Inconsistencies Letter dated April 28, 2026 (Attachment F), and a subsequent Final Inconsistency Letter dated June 5, 2026 (Attachment C). Both letters were issued in advance of the June 6, 2026, statutory deadline.

Initial Inconsistencies Letter (April 28, 2026)
The Initial Inconsistencies Letter provided the applicant with 1) early notice of fundamental project inconsistencies pursuant to the HAA in advance of the 60-day statutory deadline; 2) a description of the City's approach to compliance with the California Environmental Quality Act (CEQA); and 3) an outline of the procedural next steps in the review of the application.

Substantively, the initial letter presented an inconsistency analysis organized by type of land use policy implicated. The letter identified fundamental project inconsistencies with 1) Ordinance No. 391-C.S. (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the Project site, Attachment D); and 2) the 2025 Local Coastal Land Use Plan (LCLUP). The letter also noted that a final inconsistency review would be forthcoming.

Final Inconsistency Letter (June 05, 2026)
The Final Inconsistency Letter completed the City's inconsistency analysis within the statutory 60-day window and performed a number of functions. First, and most relevant to the proposed appeal, the Final Inconsistency Letter constituted the City's formal decision regarding the project inconsistencies and underlying land use policies applicable to the Project. Specifically, the letter provided the determination that the Project is subject to both Ordinance No. 391-C.S. and the City's Local Coastal Land Use Plan adopted May 8, 2025 (the "2025 LCLUP"). The letter expressly identified this determination as an appealable decision pursuant to Section 9-4.3804 8 Packet Pg. 111
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of the Pacifica Municipal Code. It is these determinations that are the subject of the appeal now before the City Council.

In addition, the Final Inconsistency Letter supplemented and incorporated by reference the Initial Inconsistencies Letter, reaffirming all items identified therein as though fully set forth in the final letter. Further, it identified additional specific project inconsistencies, beyond those noted in the initial letter. The letter also noted that, notwithstanding the applicant's invocation of the Builder's Remedy, the analysis addressed consistency with all City plans, ordinances, and policies.

The Initial Inconsistencies Letter and the Final Inconsistency Letter are referred to collectively herein as the “Inconsistency Letter.”
Appeal to Planning Commission and Planning Commission Action On June 15, 2026, Buchalter LLP, on behalf of the applicant, Preserve @ Pacifica, LLC ("Appellant"), filed a timely appeal of the following two determinations in the Inconsistency Letter pursuant to PMC Section 9-4.3804 (Attachment G):
(1) The City’s determination that the Project is subject to Ordinance No. 391-C.S. (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the Project site) (the “Voter Initiative”); and
(2) The City’s determination that the Project is subject to the 2025 LCLUP rather than the 1980 LCLUP.

The appeal did not include the remaining inconsistency items in the Inconsistency Letter, which the City indicated were not final appealable determinations.

On August 3, 2026, the Planning Commission held a duly noticed public hearing on the Appeal.

After receiving the staff report, testimony from the Appellant, and public comment, the Planning Commission adopted Resolution No. 2026-007 by a vote of 4-0 with 2 absences denying the Appeal and upholding the Community Development Director’s determinations that the Project is subject to (1) the Voter Initiative and (2) the 2025 LCLUP. The August 3, 2026, Planning Commission resolution and staff report are included as Attachments H and I, respectively.

CITY COUNCIL APPEAL:

On August 12, 2026, Buchalter LLP, on behalf of the Appellant, Preserve @ Pacifica, LLC ("Appellant"), filed a timely appeal of the Planning Commission’s decision to deny the appeal and uphold the Community Development Director’s decision, pursuant to PMC Section 9-

4.3804. The Appeal contests the two determinations in the Inconsistency Letter ("Appeal"):
(1) The City’s determination that the Project is subject to Ordinance No. 391-C.S. (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the Project site) (the “Voter Initiative”); and
(2) The City’s determination that the Project is subject to the 2025 LCLUP rather than the 1980 LCLUP.

The Appeal issues and arguments are summarized with a staff response below. Please note that the Appellant makes a number of arguments that apply to both of the City’s determinations 8 Packet Pg. 112
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being appealed, which are addressed under both of the appealed determinations set forth below. For the complete contents of the appeal, please refer to Attachment B.

Appeal No. 1 – Determination Regarding Voter Initiative As noted above, the City’s Inconsistency Letter determined that Ordinance No. 391-C.S. applies to the proposed project. Ordinance No. 391-C.S., adopted as a voter initiative, requires a vote of the electorate to allow residential development at the project site (“Voter Initiative”). The Voter Initiative was adopted by Pacifica voters in 1983 and designated the quarry site as C-3 Service Commercial. No residential uses are listed as permitted or conditional uses in C-3 Service Commercial (PMC Sec. 9-4.1201). The C-3 Service Commercial explicitly provides that no residential uses are authorized (PMC Sec. 9- 4.1201(b)(8)). Of critical importance, the Voter Initiative reserves in the electorate the exclusive power to authorize any residential uses at the site and states as follows:
“The following parcels of land: A.P. #018-150-050 & -070, commonly known as the quarry, are hereby rezoned from A/B-5 and M-1 to C-3 with the provision that no further public vote be required for any future rezonings except that any residential development of the property, including residential development permitted under the C-3 designation, shall require a vote of the people. This rezoning does not remove the HPD overlay.” The voters’ right of initiative and referendum is a reserved and inherent power of the people to make legislative decisions, which the courts “liberally construe” and “jealously guard.” (See California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 930, 934.) The California Supreme Court has, for example, upheld the enactment of an ordinance by voter initiative that prohibited issuance of building permits for residential projects until certain development-related standards were met. (Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 588.) The Court further explained that when the voters’ exercise of their power of initiative, e.g., with respect to zoning legislation, they are not subject to procedural requirements imposed on city governments with respect to such legislative acts. (Id. at 592, 594-596.) The Inconsistency Letter noted that State law does not allow development in contravention of voter initiatives and that courts will preserve the electorate’s power of initiative in the absence of clear authority and intent from the Legislature to limit or abrogate it. The Inconsistency Letter further noted that neither the HAA nor its Builder ’s Remedy provision contain express language indicating that the Legislature intended to weaken or override the electorate’s initiative power.

To the contrary, the HAA expressly requires a City to identify and notify an applicant about inconsistencies with applicable ordinances, such as the Voter Initiative, once an application is deemed complete. Government Code section 65589.5(j)(2)(A) provides that the City must give an applicant written documentation identifying any inconsistency with an applicable plan, program, policy, ordinance, standard, requirement, or similar provision, along with the reason the City considers the project inconsistent.

Accordingly, the Inconsistency Letter concluded that the Voter Initiative requirement for a vote of the electorate to develop residential uses on the Project site continues to be enforceable, and residential development on the site will require a vote of the people irrespective of the invocation of the Builder ’s Remedy.

The Appeal of the City's determination that the project is subject to the Voter Initiative makes a number of unsupported arguments, as set forth below.

Appeal Argument #1-A – Preserve Appeals the City Determination that the Project is Subject to Ordinance No. 391-C.S. (Page 3 of the Appeal) 8 Packet Pg. 113
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Appellant appeals the City’s determination that the Project is subject to the Voter Initiative.

Appellant maintains that the HAA prohibits the City from requiring a general plan amendment or rezoning, citing Government Code Section 65589.5(f)(6)(D)(i). Appellant further argues that housing projects are not subject to initiative as state law preempts local ordinances where the power of initiative violates the HAA.

Staff Response: With respect to Appellant’s argument that HAA prohibits the City from requiring a general plan amendment or rezoning, the City is not requiring the Appellant to pursue a rezoning or general plan amendment. Government Code section 65589.5(f)(6)(D)(i) provides that Builder’s Remedy projects “shall not be required to apply for, or receive approval of, a general plan amendment, specific plan amendment, rezoning, or other legislative approval.” The City is not requiring the Appellant to apply for a general plan amendment or rezoning. The City deemed the application complete for processing without a general plan amendment or rezoning application. Thus, no violation of the HAA exists due to this claim.

With respect to Appellant’s argument that housing projects are not subject to initiative as state law preempts local ordinances where the power of initiative violates the HAA, the HAA does not prohibit the applicability of voter approved initiatives, which has been upheld by the courts. As mentioned above, Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 591-592, 594-596, held that municipal growth-control ordinances enacted by initiative are valid, and not subject to procedural requirements imposed in city government with respect to such legislative acts. As also noted above and as set forth in the Inconsistency Letter, neither the HAA, nor its Builder’s Remedy provision, contain language indicating that the Legislature intended to limit or abridge the electorate ’s initiative power, or to subject the voters to rules imposed on city governments. To the contrary, the HAA expressly requires a City to identify and notify the Applicant about inconsistencies with applicable ordinances once an application is deemed complete and the Builder’s Remedy requires housing development projects to comply with state law—including the power of initiative reserved to the electorate and included in the California Constitution. (See Gov. Code §§ 65589.5(j)(2)(A), 65589.5(d)(3); New Commune DTLA LLC v. City of Redondo Beach (2026) 122 Cal.App.5th 99 (denying builder’s remedy project that proposed uncertified land use in violation of state law).) Therefore, a developer cannot invoke the Builder’s Remedy to avoid compliance with the Voter Initiative, and the Voter Initiative requirement that voter approval is required prior to any residential development remains in effect and must be considered as the processing of the application proceeds.

Moreover, the purpose and effect of the Builder’s Remedy is to limit local governments’ land use authority over project applications where the local government had not timely satisfied its obligations to approve a certified Housing Element to plan for housing, as opposed to limiting the electorate’s power of imitative with respect to approval of a zoning change to allow residential use. Thus, whereas the Builder’s Remedy limits City’s authority, it does not limit the voters’ authority pursuant to the Voter Initiative. (See California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924 (Proposition 218 addressed local governments’ authority to adopt taxes, it did not address or affect the voters’ power of initiative to propose and adopt taxes).

Further, the court cases cited by the Applicant do not support Appellant’s position. These cases address challenges to initiatives; they do not address, nor invalidate, the applicability of a longstanding voter-adopted initiative. For example, Building Industry Association v. City of Oceanside, cited by Appellant, stands for the proposition that a voter initiative that directly conflicts with an existing general plan is void ab initio (invalid upon adoption) because the law conflicted with the city ’s general plan and provisions of state law at the time it was adopted by voters. Here, the Voter Initiative has been lawfully in effect since 1983. (Ordinance No. 391- C.S.)
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With regard to Oak Hill Park Company v. City of Antioch, it is an unpublished decision which carries no weight in a court of law. Moreover, similar to Building Industry Association v. City of Oceanside, this case involves a challenge to a measure prior to its taking effect. The developer challenged Antioch’s voter approved Measure T, which, among other things, restricted growth in portions of the City. The court struck down portions of Measure T because the measure conflicted with State law in effect at the time of adoption.

Contrary to the Appellant’s argument, there is nothing in the law that prohibits the City from enforcing a valid voter initiative adopted in compliance with the law.

Appeal Argument #1-B - The Planning Commission’s Denial of Preserve’s Appeal of the City’s Determinations that the Project is Subject to a Vote and the 2025 LCLUP Constitute Project Denial. (Page 6 of the Appeal)
Appellant contends that the Planning Commission’s denial of the Appeal and upholding of the determinations that the Project is subject to a vote constitutes project denial. To support its argument, Appellant argues that the City effectively denied the Project because the City deemed the application complete but later indicated that the Project could not proceed without the voters approving residential use and compliance with the 2025 LCLUP. Appellant further contends that the voters would refuse to exercise their rights under the Voter Initiative to allow residential use.

Staff Response: As an initial matter, the very existence of this Appeal to the City Council refutes Appellant’s contention that the Project was denied upon the Planning Commission’s denial of the Appeal. Appellant has exercised their right to appeal the Planning Commission’s decision, demonstrating that the Planning Commission’s action was not final. Further, the Planning Commission did not take any action on the Project itself. Rather, the Planning Commission only took action on the Appellant’s filed appeal of two determinations in the Inconsistency Letter.

Appellant is also incorrect that the City effectively denied the Project by determining that the application is complete and issuing the Inconsistency Letter. The City took no action to deny the Project, but rather followed State law procedures in conducting appropriate completeness and inconsistency review. Appellant correctly notes and cites to authority that provides that the City must “process” a Builder’s Remedy application, which is exactly what the City has done here.

Appellant also makes a speculative argument that the voters would deny the Project if it moved forward to a vote. First, how voters may respond to an initiative is not relevant to the City’s position that the Voter Initiative is applicable. Further, this contention is speculative on its face.

Courts have repeatedly recognized that parties and courts cannot presume to know how voters will ultimately decide issues when presented on the ballot, whether land uses, taxes and fees, or other matters are at issue. (See, e.g., Milagra Ridge Partners, Ltd. v. City of Pacifica (1998) 62 Cal.App.4th 108, 118-120 (Pacifica voters’ rejection of an iteration of development project did not mean voters’ would never allow development); Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, 220 (voters’ approval of initiative reducing rates for water service did not mean voters would thereafter reject higher water rates).

Appeal Argument #1-C – The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Determination Renders the Project Infeasible. (Page 7 of the Appeal)
Appellant argues that City Council denial of the Appeal would constitute a disapproval of the housing development project because it would render the project infeasible. Appellant maintains that, pursuant to the Builder’s Remedy provisions of the HAA, a local agency shall not apply an individual or combination of objective quantifiable, written development standards, conditions 8 Packet Pg. 115
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and policies to the project that attempt to “deny, reduce the density for, or render infeasible housing development projects.” (Gov. Code, § 65589.5(a)(2)(K).) Appellant further argues that if the City Council denies the Appeal, the City will have prevented reclamation from proceeding under the 1996 Reclamation Plan and denied the Builder’s Remedy project in violation of the Housing Crisis Act.

Staff Response: Appellant’s arguments are unsubstantiated. First, Appellant cites to the findings of the HAA, not operative provisions of the HAA. Second, as set forth in detail above in the Staff Response to Appeal Argument #1-A, the City has complied with the HAA by setting forth the Project inconsistencies as required under State law. Lastly, as discussed in the Staff Response to Appeal Argument #1-A, the HAA does not supersede voter initiatives.

Regarding Appellant’s argument that the City is preventing reclamation of the site, the City has never indicated that the Appellant cannot proceed with reclamation. This Appeal is of the City’s determination that the Voter Initiative and the 2025 LCLUP apply to the Project. This issue does not impact the Appellant’s ability to reclaim the site in any manner. The City, in fact, approved the 1996 Reclamation Plan thirty years ago. However, the Appellant has never implemented its approved plan. The Appellant can move forward with that approved reclamation plan or an amended plan and is in no way restricted from pursuing reclamation of the Project site.

Further, Appellant’s argument that the prior reclamation plan was approved based on consistency with the City’s prior General Plan and the 1983 LCLUP, which Appellant argues allows residential uses, is not relevant to this Appeal. While this Project includes implementation of the 1996 Reclamation Plan, it also includes a housing development project which was not considered in 1996. Thus, this Project must be processed under the current applicable law.

Appeal Argument No. #1-D - The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Final Inconsistency is a Course of Conduct Undertaken for an Improper Purpose. (Page 8 of the Appeal)
Appellant maintains that City Council denial of the Appeal would constitute disapproval of the Project because the determinations are a “course of conduct undertaken for an improper cause.” Appellant argues that the Project cannot proceed in light of the City’s inconsistent administrative stances of deeming the Project application complete and noting Project inconsistencies with the City’s land use plans and zoning. Appellant further maintains that requiring the Project to proceed with the Voter Initiative is contrary to case authority declaring that the HAA supersedes local initiative and would render the Project economically infeasible.

Staff Response: Appellant is reiterating arguments addressed earlier in the Appeal, namely that the City has not followed the HAA in processing the Project application and that the HAA supersedes local initiative. As noted above in the Staff Response to Appeal Argument #1-B, the City followed all legal requirements in processing the Project application and did not take any inconsistent actions. City staff reviewed the Project application against its completeness checklist and determined the application included all items in the checklist and was thus complete. Then, as required by the HAA, City staff reviewed the Project application for inconsistencies and properly notified Appellant of those inconsistencies. The City’s determinations are proper and necessary to ensure consistency with the will of the voters as expressed in the Voter Initiative and the 2025 LCLUP adopted as required by the Coastal Act.

Further, as set forth in the Staff Response to Appeal Argument #1-A, the HAA does not supersede local initiatives, including the Voter Initiative. Further, Appellant’s argument that the City’s actions would render the Project economically infeasible are irrelevant to this Appeal. 8 Packet Pg. 116
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There is nothing in the law, or cited in the Appeal, that requires cities to ignore local initiatives if they would render a non-compliant project economically infeasible.

Appeal Argument #1-E – The City’s Determination that the Project Cannot Proceed Without a Vote Constitutes a Denial. (Page 9 of the Appeal) Appellant maintains that the City’s determination that the Project cannot proceed without a vote constitutes a denial of the Project. Appellant argues that a City Council vote to deny the Appeal and uphold the Planning Commission’s approval of the City’s Final Inconsistency Determination “pushes the Project into an immovable object, because it forecloses reclamation of the Property under the 1996 Reclamation Plan and repudiates the Builder’s Remedy project in violation of the HAA and the Housing Crisis Act.” Appellant contends that the City risks liability for a takings (inverse condemnation) if the City Council does not grant the appeal, on the theory that denial; would “result in the conversion of private property into the equivalent of a habitat preserve, even though prior permits and agreements in effect on the Property since the 1990s contemplated that the landowner would be able to proceed with future development.” Staff Response: This argument basically reiterates previous arguments raised that the denial of the Appeal would foreclose reclamation and repudiate the Builder’s Remedy. As discussed above in the Staff Response to Appeal Argument #1-C, the City has not foreclosed reclamation.

Further, as discussed throughout this staff report, the City has not violated the HAA or the Housing Crisis Act.

Further, denial of the Appeal does not constitute denial of the Project. And even if denial of the Appeal arguably constituted denial of the Project, Appellant would still have a whole host of potential development options, including options that do not require voter approval to allow for residential use. The state and federal courts have repeatedly explained that where the denial of an application (or multiple applications) leaves open the possibility of development (e.g., by approval of a revised application that addresses concerns or problems associated with the prior application), the government has neither reached a firm, final administrative decision as to the scope of development nor precluded development. (See, e.g., MacDonald, Sommer & Frates v.

Yolo County (1986) 477 U.S. 340; Lake Nacimiento Ranch Co. v. San Luis Obispo County (9th Cir. 1987) 841 F.2d 872; N. Mill St., LLC v. City of Aspen (10th Cir. 2021) 6 F.4th 1216; Toigo v.

Town of Ross (1998) 70 Cal.App.4th 309.) Moreover, this holds true irrespective of the developer’s or property owner’s preferences as to what to develop. (See, e.g., County of Alameda v. Superior Court (2005) 133 Cal.App.4th 558; City and County of San Francisco v.

Golden Gate Heights Investments (1993) 14 Cal.App.4th 1203.) Conclusion
For the reasons set forth above, staff recommend that the City Council deny the appeal as to the Voter Initiative, affirm the Planning Commission’s decision, and uphold the Community Development Director’s determination that the Voter Initiative applies to the project.

Appeal No. 2 - Determination Regarding 2025 Local Coastal Land Use Plan (LCLUP) In its Inconsistency Letter, the City determined that the 2025 LCLUP applies to the project because the Housing Crisis Act does not vest Local Coastal Land Use Plans. (Government Code sections 65589.5(o)(1), 65589.5(o)(4).) The Inconsistency Letter noted that the list of regulations that become vested as a result of a preliminary application is defined in the Housing Crisis Act, and only includes a general plan, specific plan, zoning, design review and subdivision standards, and impact fees, and does not list a Local Coastal Plan as one of the eligible regulations (Government Code § 65589.5(o)(4)). In addition, the Coastal Act mandates that a 8 Packet Pg. 117
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Coastal Development Permit (CDP) can only be issued if the project is consistent with the adopted LCLUP (Pub. Res. Code § 30604(b)).

The Inconsistency Determination further noted that case law supports the conclusion that housing-related laws, including the HAA, cannot be construed to relieve local agencies from complying with the Coastal Act, which means that the 2025 LCLUP applies. (See e.g., Kalnel Gardens, LLC v. City of Los Angeles (2016) 3 Cal.App.5th 927; see also New Commune DTLA LLC v. City of Redondo Beach (2026) 122 Cal.App.5th 99.) Moreover, the Coastal Commission confirmed its agreement with this interpretation in a letter dated February 18, 2026. In that letter, the Coastal Commission confirmed that the 2025 LCLUP applies even though the 1980 LCLUP was in effect on the date the preliminary application was deemed submitted.

The Appellant appealed this determination maintaining that the 2025 LCLUP is not applicable.

Appeal Argument #2-A – Preserve Appeals the Determination that the Project is Subject to the 2025 LCLUP (Page 4 of the Appeal)
Appellant appeals the determination that the Project is subject to the 2025 LCLUP. Appellant contends that its preliminary application vested the project with the ordinances, policies, and standards in effect on May 7, 2025, the date the preliminary application was deemed submitted.

Moreover, they claim that because the 2025 LCLUP was not certified by the California Coastal Commission until May 8, 2025, one day later, project consistency must be measured against the coastal land use plan and policies in effect before the 2025 LCLUP update was adopted.

Appellant further maintains that case law does not support the City’s position that the Project is subject to the 2025, rather than the 1980, LCLUP.

Staff Response: Appellant’s argument that the Project is subject to the 1980 LCLUP is incorrect.

As noted above, the HAA does not include the Coastal Act among the list of regulations vested by a preliminary application (Government Code Section 65589.5(o)(4)). Further, both the HAA and the Housing Crisis Act explicitly state that nothing in those provisions supersedes, limits, or otherwise modifies the requirements of the California Coastal Act of 1976. Specifically, Government Code Section 65589.5(e) specifically states that: "Nothing in this section shall be construed to relieve [a] local agency from complying with … the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of the Public Resources Code)." (emphasis added.) As the Court of Appeal recently explained when rejecting an applicant’s claim that another city’s Local Coastal Land Use Plan was inapplicable to its Builder’s Remedy application, Local Coastal Land Use Plans effectuate provisions and obligations of the California Coastal Act. (New Commune DTLA LLC v. City of Redondo Beach (2026) 122 Cal.App.5th 99.) Although the New Commune DTLA LLC case did not directly address the issue of the vesting of an LCLUP, it upholds the requirement that projects must comply with the Coastal Act and a City’s LCLUP. Here, to properly effectuate and implement the Coastal Act, the City thus must apply the 2025 LCLUP to the project. The Coastal Commission also confirmed that the updated 2025 LCLUP applies to this project regardless of the date of the preliminary SB 330 submittal as set forth in its letter to the City dated February 18, 2026 (Attachment E).

Further, the Legislature has included express savings clauses in the HAA preserving the Coastal Act in full (Government Code Section 65589.5(e)). Harmonizing the Coastal Act and the HAA requires the City to apply the vesting protections of the preliminary application to the City's general plan, zoning, design review standards and criteria, and subdivision standards and criteria, while applying the Coastal Act, and the certified LCLUP that implements it (Government Code Section 65589.5(o)(4)). The provisions, however, must be those in effect at the time of coastal development review, namely the 2025 LCLUP. Applying the 2025 LCLUP does not limit the applicability of State housing laws and ensures compliance with the Coastal Act. 8 Packet Pg. 118
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Appeal Argument #2-B - The Planning Commission’s Denial of Preserve’s Appeal of the City’s Determinations that the Project is Subject to a Vote and the 2025 LCLUP Constitute Project Denial. (Page 6 of the Appeal)
Appellant contends that the Planning Commission’s denial of the Appeal and upholding of the determinations that the Project is subject to the 2025 LCLUP constitutes project denial.

Staff Response: Please see the Staff Response to Appeal Argument #1-B.

Appeal Argument #2-C -The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Determination Renders the Project Infeasible. (Page 7 of the Appeal)
Appellant argues that City Council denial of the Appeal would constitute a disapproval of the housing development project because it would render the project infeasible. Appellant maintains that, pursuant to the Builder’s Remedy provisions of the HAA, a local agency shall not apply an individual or combination of objective quantifiable, written development standards, conditions and policies to the project that attempt to “deny, reduce the density for, or render infeasible housing development projects.” (Gov. Code, § 65589.5(a)(2)(K).) Appellant further argues that if the City Council denies the Appeal, the City will have prevented reclamation from proceeding under the 1996 Reclamation Plan and denied the Builder’s Remedy project in violation of the Housing Crisis Act.

Staff Response: Please see the Staff Response to Appeal Argument #1-C.

Appeal Argument No. #2-D - The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Final Inconsistency is a Course of Conduct Undertaken for an Improper Purpose. (Page 8 of the Appeal)
Appellant maintains that City Council denial of the Appeal would constitute disapproval of the Project because the determinations are a “course of conduct undertaken for an improper cause.” Appellant argues that the Project cannot proceed in light of the City’s inconsistent administrative stances of deeming the Project application complete and noting Project inconsistencies with the City’s land use plans and zoning.

Staff Response: Please see the Staff Response to Appeal Argument #1-D.

Conclusion
For the reasons set forth above, staff recommend that the City Council deny the appeal as to the 2025 LCLUP, affirm the Planning Commission’s decision, and uphold the Community Development Director’s determination that the 2025 LCLUP applies to the Project.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA):

The City Council's action on this appeal item is not subject to CEQA. A determination on an appeal of a consistency analysis determination does not constitute approval of a "project" as defined under CEQA as it will not cause a physical change or reasonably foreseeable indirect physical change in the environment. (Public Resources Code Section 21065). For reference, and as it relates to the formal development application submitted, the applicant has requested that the City initiate preparation of an Environmental Impact Report (EIR), and the City is 8 Packet Pg. 119
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working on moving forward with contracting a CEQA Consultant to prepare an EIR for the proposed project.

ALTERNATIVE ACTION:

The City Council's action on this appeal is limited to the two inconsistency determinations. The following alternatives to the recommended action to deny the appeal are available:

1. Grant the appeal in its entirety. The City Council may grant the appeal and reverse the Planning Commission's decision, determining that the Project is subject to neither the Voter Initiative nor the 2025 LCLUP. Because the proposed resolution contains findings supporting denial of the appeal, this action would require the City Council to make and adopt findings supporting that determination, and for staff to return at a subsequent meeting with a resolution containing those findings. Staff has not identified legal authority supporting such findings, and notes that a determination that the 2025 LCLUP does not apply would be inconsistent with the California Coastal Commission's letter to the City dated February 18, 2026.

2. Grant the appeal in part. The two determinations are independent of one another, and the City Council may act on each separately, upholding one determination while reversing the other. As with Alternative 2, this action would require staff to return with a revised resolution containing Council’s supporting findings.

None of the actions above approves or denies the Project or any of the associated permit applications. The City will continue to process the application, including coordination of CEQA review, regardless of the action taken on this appeal.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

This appeal is not a specific item in the City Council's Fiscal Year 2026-2027 Strategic Plan and Priority Workplan. Processing development applications, including appeals of administrative determinations, is a standard course of business function of the Community Development Department.

FISCAL IMPACT:

There is no direct fiscal impact associated with the City Council's action on this appeal. The hearing is on the inconsistency determinations rather than on the Project itself.

MOTION FOR APPROVAL: Move to ADOPT the proposed resolution denying the appeal, affirming the Planning Commission’s August 3, 2026, decision, and upholding the Community Development Director’s determinations that the project is subject to (1) Ordinance 391-CS, and (2) the 2025 Local Coastal Land Use Plan, as set forth in the Final Inconsistency Letter dated June 5, 2026.

ORIGINATED BY:

Community Development Department
ATTACHMENT LIST:

ATT B - Appeal to City Council 206-08-12-CC (PDF)
ATT C - 2026-06-05_Final Project Inconsistencies-Coastal Crest_File No 2025-036-CC (PDF) 8 Packet Pg. 120
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ATT D - OrdinanceNo391-CS_RezoneQuarry_1983-11-08-CC (PDF) ATT E - 2026-02-18_Coastal Crest Residences - Coastal Commission Comment Letter-CC (PDF)
ATT F - 2026-04-28_Initial Project Inconsistencies-Coastal Crest_File No 2025-036-CC (PDF) ATT G - Letter Appeal to Planning Commission Re Coastal Crest Residences_2026-06-15-CC (PDF)
ATT H - PC Resolution 2026-007_2026-08-03-CC (PDF)
ATT I - Planning Commission Staff Report,_ 2026-08-03-CC (DOCX) 8 Packet Pg. 121
Pacifica City Council 14 September 28, 2026
RESOLUTION NO. __________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA DENYING THE APPEAL FILED BY PRESERVE @ PACIFICA, AFFIRMING THE PLANNING COMMISSION’S AUGUST 3, 2026 DECISION, AND UPHOLDING THE FINAL INCONSISTENCY LETTER

DETERMINATIONS BY THE COMMUNITY DEVELOPMENT DIRECTOR THAT THE COASTAL CREST PROJECT IS SUBJECT TO (1) ORDINANCE 391-CS (THE CITY'S

VOTER-ADOPTED INITIATIVE REQUIRING A VOTE OF THE ELECTORATE TO DEVELOP HOUSING ON THE PROJECT SITE), AND (2) THE 2025 LOCAL COASTAL LAND USE PLAN (FILE NO. 2025-036; APPLICATION FOR COASTAL DEVELOPMENT PERMIT (CDP477-25), SITE DEVELOPMENT PERMIT (PSD-876-25), DEVELOPMENT PLAN (DP-92-25), SPECIFIC PLAN (SP-192-25), TREE PERMIT (TP-14-25), AND SIGN PERMIT (S-138-25) FOR DEVELOPMENT OF 1,225 RENTAL DWELLING UNITS ON APPROXIMATELY 86.39- ACRE VACANT PARCELS (APNs 018-150-110, -120, -150) KNOWN AS COASTAL CREST RESIDENCES.)
____________________________________________________________________________ WHEREAS, Preserve @ Pacifica, LLC ("Appellant"), represented by Buchalter LLP, has submitted applications for a Coastal Development Permit (CDP-477-25), Site Development Permit (PSD-876-25), Development Plan (DP-92-25), Specific Plan (SP-192-25), Tree Permit (TP-14-25), and Sign Permit (S-138-25) for the development of 1,225 rental dwelling units in 20 apartment buildings and 26 townhomes on approximately 86.39 acres comprising three vacant parcels (APNs 018-150-110, -120, and -150), known as Coastal Crest Residences, Pacifica Planning File Number 2025-036 (the "Project"); and
WHEREAS, a preliminary application for the Project pursuant to Senate Bill 330 (SB 330) was submitted on May 7, 2025, and deemed to meet the statutory requirements; and WHEREAS, the City received the first formal application submittal for the Project on October 6, 2025, and issued a Determination of Incompleteness on November 5, 2025; and WHEREAS, the City received the second formal application submittal for the Project on February 2, 2026, and issued a Determination of Incompleteness on February 27, 2026; and WHEREAS, the City received the third formal application submittal for the Project on March 25, 2026, and issued a Notice of Complete Application on April 7, 2026; and WHEREAS, the City’s Notice of Complete Application initiated its Consistency review of the project application pursuant to California Government Code 65589.5; and WHEREAS, the City was required to complete its inconsistency analysis within 60-days of the date that the project application was deemed complete, pursuant to California Government Code 65589.5(j)(2)(A)(ii); and
WHEREAS, as the Project application was deemed complete on April 7, 2026, the City was required to complete its inconsistency analysis within 60-days of this date, which is June 6, 2026; and
WHEREAS, the City issued an Initial Determination of Inconsistency Letter on April 28, 2026, and a Final Determination of Inconsistency Letter on June 5, 2026, both within the required 60 day time-frame (collectively the “Inconsistency Letter”); and 8 Packet Pg. 122
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WHEREAS, the Inconsistency Letter, identified inconsistencies between the Project and applicable City plans, programs, policies, ordinances, standards, requirements, and other similar provisions; and
WHEREAS, the Inconsistency Letter determined that the Project is subject to both Ordinance No. 391-C.S. (the City's voter-adopted initiative requiring a vote of the electorate to develop housing on the project site) and the City's 2025 Local Coastal Land Use Plan ("2025 LCLUP"), adopted on May 8, 2025, and expressly identified these decisions as appealable decisions pursuant to Section 9-4.3804 of the Pacifica Municipal Code; and WHEREAS, the California Coastal Commission, in its letter to the City dated February 18, 2026, confirmed that the Project must comply with the policies of the City's certified 2025 LCLUP; and
WHEREAS, on June 15, 2026, Buchalter LLP, on behalf of Preserve @ Pacifica, LLC, timely filed a written appeal of the determinations that Ordinance No. 391-C.S. (the City's voteradopted initiative requiring a vote of the electorate to develop housing on the project site) and the City's 2025 2025 LCLUP (the "Planning Commission Appeal"); and WHEREAS, the Planning Commission of the City of Pacifica held a duly noticed public hearing on August 3, 2026, at which time it considered all oral and documentary evidence presented relating to the Planning Commission Appeal, including the Inconsistency Letter, the Appeal letter and attachments, the California Coastal Commission correspondence, and the Staff Report, and incorporated all testimony and documents into the record by reference; and WHEREAS, on August 3, 2026, the Planning Commission adopted Resolution No. 2026- 007 by a vote of 5-0 with 2 absences denying the Planning Commission Appeal and upholding the Community Development Director’s determinations that the Project is subject to Ordinance No. 391-C.S. and the 2025 LCLUP; and
WHEREAS, on August 12, 2026, Buchalter LLP, on behalf of Preserve @ Pacifica, LLC, timely filed a written appeal of the Planning Commission’s August 3, 2026, decision to the City Council pursuant to Section 9-4.3804 of the Pacifica Municipal Code (the “Appeal”); and WHEREAS, the City Council of the City of Pacifica held a duly noticed public hearing on September 28, 2026, at which time it considered all oral and documentary evidence presented relating to the Appeal, including the Inconsistency Letter, the Appeal letter and attachments, the California Coastal Commission correspondence, the record of the August 3, 2026, Planning Commission hearing, and the Staff Report, and incorporated all testimony and documents into the record by reference.

NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Pacifica as follows:

1. Recitals. The above recitals are true and correct and material to this Resolution.

2. Incorporation of Record. In making its findings, the City Council relied upon and hereby incorporates by reference all correspondence, staff reports, oral and written comments and testimony, and other related materials in the record at the September 28, 2026, City Council public hearing.

3. CEQA Review. The City Council of the City of Pacifica finds that its action on this Appeal is not subject to the California Environmental Quality Act (CEQA) as it will not cause a physical change or reasonably foreseeable indirect physical change in the environment. 8 Packet Pg. 123
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The determination on an appeal of an inconsistency determination is an administrative action and does not constitute approval of a "project" as defined under CEQA (Public Resources Code Section 21065).

4. Findings on Appeal. The City Council of the City of Pacifica does hereby make the following findings regarding the Appeal:
a. With respect to Appeal No. 1 - Determination Regarding Voter Initiative, the City Council finds as follows:
i. Appeal Argument #1-A - Preserve Appeals the City Determination that the Project is Subject to Ordinance No. 391-C.S. (Page 3 of the Appeal).

The HAA prohibits the City from requiring a general plan amendment or rezoning. Further, housing projects are not subject to initiative as state law preempts local ordinances where the power of initiative violates the HAA.

Finding: The City is not requiring the Appellant to pursue a rezoning or general plan amendment. The City deemed the application complete for processing without a general plan amendment or rezoning application.

More importantly, the HAA does not prohibit the applicability of voter approved initiatives, which have been upheld by the courts. Neither the HAA, nor its Builder’s Remedy provision, contain language indicating that the Legislature intended to weaken or override the electorate’s initiative power. Thus, the Voter Initiative requirement that voter approval is required prior to any residential development, remains in effect.
ii. Appeal Argument #1-B: - The Planning Commission’s Denial of Preserve’s Appeal of the City’s Determinations that the Project is Subject to a Vote and the 2025 LCLUP Constitute Project Denial. (Page 6 of the Appeal).

The City effectively denied the Project because the City deemed the application complete but later indicated that the Project could not proceed without the voters approving residential use and compliance with the 2025 LCLUP. The voters would refuse to exercise their rights under the Voter Initiative to allow residential use
Finding: The Planning Commission did not take any action on the Project itself. Rather, the Planning Commission only took action on the Appellant’s filed appeal of two determinations in the Inconsistency Letter.

Further, the City has taken no action to deny the Project, but rather followed State law procedures in conducting appropriate completeness and inconsistency review. Lastly, the argument that the voters would deny the Project if it moved forward to a vote is speculative and not relevant to the City’s position that the Voter Initiative is applicable. iii. Appeal Argument #1-C: – The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Determination Renders the Project Infeasible. (Page 7 of the Appeal).
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Pursuant to the Builder’s Remedy provisions of the HAA, a local agency shall not apply an individual or combination of objective quantifiable, written development standards, conditions and policies to the project that attempt to “deny, reduce the density for, or render infeasible housing development projects.” (Gov. Code, § 65589.5(a)(2)(K).) Further, if the City Council denies the Appeal, the City will have prevented reclamation from proceeding under the 1996 Reclamation Plan and denied the Builder’s Remedy project in violation of the Housing Crisis Act
Finding: The City has complied with the HAA by setting forth the Project inconsistencies as required under State law. Lastly, as discussed in the Finding to Appeal Argument #1-A, the HAA does not supersede voter initiatives. Lastly, the City has never indicated that the Appellant cannot proceed with reclamation. The City, in fact, approved the 1996 Reclamation Plan thirty years ago. However, Appellant has never implemented its approved plan. Appellant can move forward with that approved reclamation plan or an amended plan and is in no way restricted from pursuing reclamation of the Project site. iv. Appeal Argument No. #1-D - The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Final Inconsistency is a Course of Conduct Undertaken for an Improper Purpose. (Page 8 of the Appeal).

The Project cannot proceed in light of the City’s inconsistent administrative stances of deeming the Project application complete and noting Project inconsistencies with the City’s land use plans and zoning.

Further, requiring the Project to proceed with the Voter Initiative is contrary to case authority declaring that the HAA supersedes local initiative and would render the Project economically infeasible.

Finding: As found above in the Finding to Appeal Argument #1-B, the City followed all legal requirements in processing the Project application and did not take any inconsistent actions. The City’s determinations are proper and necessary to ensure consistency with the will of the voters as expressed in the Voter Initiative and the 2025 LCLUP adopted as required by the Coastal Act. Further, as set forth in the Finding to Appeal Argument #1-A, the HAA does not supersede local initiatives, including the Voter Initiative. Further, Appellant’s argument that the City’s actions would render the Project economically infeasible are irrelevant to this Appeal.
v. Appeal Argument #1-E – The City’s Determination that the Project Cannot Proceed Without a Vote Constitutes a Denial. (Page 9 of the Appeal).

A City Council vote to deny the Appeal and uphold the Planning Commission’s approval of the City’s Final Inconsistency Determination forecloses reclamation of the Property under the 1996 Reclamation Plan and repudiates the Builder’s Remedy project in violation of the HAA and the Housing Crisis Act. Further, the City risks liability for a takings (inverse condemnation) if the City Council does not grant the Appeal.
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Finding: As found above in the Finding to Appeal Argument #1-C, the City has not foreclosed reclamation. Further, the City has not violated the HAA or the Housing Crisis Act, as found above in the Finding to Appeal Argument #1-A. Further, denial of the Appeal does not constitute denial of the Project. And even if denial of the Appeal arguably constituted denial of the Project, Appellant would still have a whole host of potential development options, including options that do not require voter approval to allow for residential use. Thus, there is no risk of a taking.
b. With respect to Appeal No. 2 - Determination Regarding 2025 Local Coastal Land Use Plan (LCLUP), the City Council finds as follows:
i. Appeal Argument #2-A – Preserve Appeals the Determination that the Project is Subject to the 2025 LCLUP (Page 4 of the Appeal).

The Project preliminary application vested the project with the ordinances, policies, and standards in effect on May 7, 2025, the date the preliminary application was deemed submitted. Because the 2025 LCLUP was not certified by the California Coastal Commission until May 8, 2025, one day later, project consistency must be measured against the coastal land use plan and policies in effect before the 2025 LCLUP update was adopted. Further, case law does not support the City’s position that the Project is subject to the 2025, rather than the 1980, LCLUP
Finding: The HAA does not include the Coastal Act among the list of regulations vested by a preliminary application. Further, both the HAA and the Housing Crisis Act explicitly state that nothing in those provisions supersedes, limits, or otherwise modifies the requirements of the California Coastal Act of 1976. Local Coastal Land Use Plans effectuate provisions and obligations of the California Coastal Act, which the City accomplishes pursuant to tis 2025 LCLUP. The Coastal Commission further confirmed that the updated 2025 LCLUP applies to this project regardless of the date of the preliminary SB 330 submittal as set forth in its letter to the City dated February 18, 2026. ii. Appeal Argument #2-B: - The Planning Commission’s Denial of Preserve’s Appeal of the City’s Determinations that the Project is Subject to a Vote and the 2025 LCLUP Constitute Project Denial. (Page 6 of the Appeal).

Finding: The Planning Commission did not take any action on the Project itself. Rather, the Planning Commission only took action on the Appellant’s filed appeal of two determinations in the Inconsistency Letter.
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Further, the City has taken no action to deny the Project, but rather followed State law procedures in conducting appropriate completeness and inconsistency review.
iii. Appeal Argument #2-C: – The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Determination Renders the Project Infeasible. (Page 7 of the Appeal).

Pursuant to the Builder’s Remedy provisions of the HAA, a local agency shall not apply an individual or combination of objective quantifiable, written development standards, conditions and policies to the project that attempt to “deny, reduce the density for, or render infeasible housing development projects.” (Gov. Code, § 65589.5(a)(2)(K).) Further, if the City Council denies the Appeal, the City will have prevented reclamation from proceeding under the 1996 Reclamation Plan and denied the Builder’s Remedy project in violation of the Housing Crisis Act
Finding: The City has complied with the HAA by setting forth the Project inconsistencies as required under State law. Lastly, as discussed in the Finding to Appeal Argument #1-A, the HAA does not supersede voter initiatives. Lastly, the City has never indicated that the Appellant cannot proceed with reclamation. The City, in fact, approved the 1996 Reclamation Plan thirty years ago. However, Appellant has never implemented its approved plan. Appellant can move forward with that approved reclamation plan or an amended plan and is in no way restricted from pursuing reclamation of the Project site. iv. Appeal Argument No. #2-D - The City Council’s Denial of the Appeal is a “Disapproval of the Housing Project” within the meaning of 65589.5 because the City’s Final Inconsistency is a Course of Conduct Undertaken for an Improper Purpose. (Page 8 of the Appeal).

5. Denial of Appeal. The City Council of the City of Pacifica does hereby deny the Appeal, affirm the Planning Commission’s August 3, 2026, decision, and uphold the Community Development Director’s determinations that the Project is subject to: (1) Ordinance No. 391-C.S., and (2) the 2025 Local Coastal Land Use Plan, based on the record of the Planning Commission Appeal and the Appeal, and the findings set forth above. * * * * *
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Pacifica City Council 20 September 28, 2026
Passed and adopted at a regular meeting of the City Council of the City of Pacifica, California, held on the 28th day of September 2026.

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
______________________________
Christine Boles
Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey Michelle Marchetta Kenyon
City Clerk City Attorney
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Packet Pg. 150 Attachment: ATT B - Appeal to City Council 206-08-12-CC (6305 : CC Appeal of Inconsistency Determinations-Resolution(Quarry / Coastal Crest June 5, 2026
Paul Heule
231 Fulton St. W
Grand Rapids, MI 49503
Matt Larson
M Larson Incorporated
San Francisco, CA 94124
Sent via email: [email protected]
[email protected]
Subject: File No. 2025-036 – Inconsistencies under the Housing Accountability Act and Next Steps for Coastal Development Permit (CDP-477-25), Development Plan (DP-92-25), Specific Plan (SP-192-25), Tree Permit (TP-14-25), and Sign Permit (S-138-25) for Development of 1,225 rental dwelling units in 20 apartment buildings and 26 townhomes (17 apartment buildings on the East Parcel (APN 018-150-150), and 3 apartment buildings and the townhome units on the West Parcel (018-150-110, 018-150-120)), and 1,259 parking spaces on approximately 86.39 acre vacant parcels (APN 018-150-110, -120, -150) known as Coastal Crest Residences.

Dear Paul Heule & Matt Larson,
This final inconsistency letter includes the City’s decision regarding applicable requirements for the project, identifies project inconsistencies pursuant to the Housing Accountability Act (“HAA”), Government Code Section 65589.5(j)(2)(A), and outlines next steps (“Final Inconsistency Letter”). This Final Inconsistency Letter supplements and incorporates by reference the City’s prior letter dated April 28, 2026, setting forth initial project inconsistencies (“Initial Inconsistencies Letter”). All items contained in the Initial Inconsistencies Letter are reaffirmed and incorporated herein as though fully set forth in this Final Inconsistency Letter.

You submitted a valid Preliminary Application for the Coastal Crest Residences project (“project”) pursuant to Government Code section 65941.1 on May 7, 2025. You subsequently submitted your regular application for a Coastal Development Permit (CDP-477-25), Development Plan (DP-92-25), Specific Plan (SP-192-25), Tree Permit (TP-14-25), and Sign Permit (S-138-25) for the project, on October 6, 2025. The application was deemed incomplete on November 5, 2025. You resubmitted your regular application on February 2, 2026, which was deemed incomplete on February 27, 2026. You resubmitted your regular application again on March 25, 2026, was this third submittal was deemed complete on April 7, 2026.

CITY OF PACIFICA
Community Development Department
170 Santa Maria Avenue • Pacifica, California 94044-2506 www.cityofpacifica.org
MAYOR
Christine Boles

VICE MAYOR
Greg Wright

COUNCIL
Sue Beckmeyer
Mary Bier
Mayra Espinosa
Scenic Pacifica
Incorporated Nov. 22, 1957

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Packet Pg. 151 Attachment: ATT C - 2026-06-05_Final Project Inconsistencies-Coastal Crest_File No 2025-036-CC (6305 : CC Appeal of Inconsistency File No. 2025-036
Coastal Crest Residences
June 5, 2026

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Decision Regarding Voter Initiative and Local Coastal Land Use Plan The Initial Inconsistencies Letter, incorporated herein, noted issues with Ordinance No. 391-C.S. (the City’s voter initiative requiring a vote of the people to develop housing on the project site) and applicability of the City’s Local Coastal Land Use Plan adopted on May 8, 2025. This Final Inconsistency Letter constitutes a decision that your project is subject to both Ordinance No. 391-C.S. (the City’s voter initiative requiring a vote of the people to develop housing on the project site) and the City’s 2025 Local Coastal Land Use Plan (LCLUP).
1 The decision that your project application issubject to Ordinance No. 391-C.S. and the 2025 Local Coastal Land Use Plan is an appealable decision pursuant to Section 9-4.3804 of the Pacifica Municipal Code.

Inconsistency Analysis
California Government Code 65589.5(j)(2)(A) requires a city to provide notice to developers of a proposed housing development’s inconsistency with “an applicable plan, program, policy, ordinance, standard, requirement, or other similar provision …“ within 60 days of the date that the application is determined to be complete, if the project contains more than 150 units. As your proposed project proposes 1,225 rental dwelling units, the inconsistency analysis is due 60 days after the application for the project was deemed complete (See Gov. Code Section 65589.5(j)(2)(A)(ii)). As your application was deemed complete on April 7, 2026, the City’s inconsistency analysis is due by June 6, 2026.

Pursuant to Government Code section 65589.5(o)(1), City staff are reviewing your application for consistency under the law in effect, on May 7, 2025, the date your preliminary application was deemed submitted. Please note that although you have invoked the Builder’s Remedy, the inconsistency analysis below includes analysis of consistency with all City plans, ordinances and policies.

In addition to the inconsistencies noted in the Initial Inconsistencies Letter, the proposed project is inconsistent with the following City plans, programs, policies, ordinances, standards, requirements, and other similar provisions.

A. 1980 Local Coastal Land Use Plan
The City has determined that the 2025 LCLUP applies to your project and continues to hold this position. However, as you have indicated that you believe the 1980 LCLUP applies to your project, we are providing the project’s inconsistencies with the 1980 LCLUP in addition to the applicable 2025 LCLUP inconsistencies provided in the Initial Inconsistencies Letter. The project is inconsistent with the 1980 Local Coastal Plan (“1980 LCP”) as set forth below:

1. Special Area Status. The project site is located within the “Sharp Park Municipal Golf Course – West Fairway Park – Mori Point - Rockaway Beach” Neighborhood in the 1980 LCP. Further, the 1980 LCP designates the site as “Special Area – to be developed as a unit – to include Commercial, Residential, City Hall and Marina Uses”. See Land Use Map excerpt below. 1 As discussed in the Initial Inconsistencies Letter and this letter, your application is inconsistent with Ordinance No. 391-C.S. and the 2025 LCLUP. But those inconsistency determinations are not final decisions and not subject to administrative appeal at this time.

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Packet Pg. 152 Attachment: ATT C - 2026-06-05_Final Project Inconsistencies-Coastal Crest_File No 2025-036-CC (6305 : CC Appeal of Inconsistency File No. 2025-036
Coastal Crest Residences
June 5, 2026

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Pacifica City CouncilSeptember 28, 2026

Pacifica City Council
September 28, 2026