CITY COUNCIL STAFF REPORT
Meeting Date: January 22, 2024
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-24 AUTHORIZING BORROWING $60,000 FROM THE CITY OF PLEASANT HILL GENERAL FUND TO
PAY FOR THE CONTRACT TO COMPLETE THE UPDATE TO THE
CITY OF PLEASANT HILL GENERAL PLAN, 2023-2031 HOUSING
ELEMENT AND RELATED ZONING ORDINANCE AMENDMENTS
SYNOPSIS
The City currently has a Professional Services Agreement with Mintier Harnish to perform planning and environmental consulting services for the update to the City of Pleasant Hill General Plan, the preparation of the 2023-2031 Housing Element, a comprehensive update of the zoning ordinance and associated environmental clearance (Project). City staff anticipated the General Plan Update Fee Fund would cover the cost of this work. However, funds collected from the General Plan Update Fee have not kept pace with Project costs and cannot fully fund the project; thus, staff is requesting the City Council authorize the borrowing of funds from the City General Fund to pay for this work.
BACKGROUND/DISCUSSION
In February 2019, the City approved a Professional Services Agreement with Mintier Harnish to provide planning and environmental consulting services for the preparation of an update of the City of Pleasant Hill General Plan. Subsequently in January 2021, the City approved an amendment to the original agreement. This amendment included the addition of the 2023-2031 Housing Element and the necessary comprehensive zoning ordinance update. Since the amendment was approved, the consultant, in coordination with staff, has successfully completed the update of the General Plan and more recently received certification from HCD for the 2023- 2031 Housing Element. Other completed components of the agreement included the creation of Objective Design Standards and the necessary zoning ordinance amendments for the rezoning of Housing Opportunity sites, as required by State Law for the 2023-2031 Housing Element.
The current source of funding for the Project is the General Plan Update Fee that is collected with building permits. This fee is collected whenever a building permit fee is paid to the City, and thereby generates revenue on a recurring basis. It has now been determined that the rate of revenue collection is not keeping pace with Project expenditures.
To minimize impacts to the City General Fund balance and allow remaining Project work to continue, staff proposed that the City borrow from the General Fund and repay the loan over a two-year period of time. This proposal was presented to the City Council General Plan Subcommittee in October 2023, at which point the recommended borrowing amount was $172,000. The Subcommittee reviewed the request and recommended approval to the City Council last October.
The continued replenishment of the General Plan Update Fee Fund and the recent receipt of State grant funds have reduced the amount required to borrow. City staff now proposes to borrow far less, only $60,000. Repayment would occur over the next one to two years with an interest rate of one percent. Thus, based on the borrowing of $60,000, it is expected that the amount to be repaid would be $60,600 if paid back in one year or $61,200 if paid back in two years, which would fully replenish the amount borrowed.
FISCAL IMPACT
The request to borrow $60,000 from the General Fund also includes a payback provision over two years. Staff expects two sources for loan repayment: the General Plan Update Fee collected upon issuance of all building permits, and a portion of a previously approved State of California Local Early Action Planning (LEAP) Grant ($113,000), which the State awarded to the City for the preparation of the Housing Element, which is a required element of the General Plan.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Adopt the resolution to borrow $60,000 from the City General Fund at an interest of one percent over a two-year period.
ALTERNATIVES TO RECOMMENDED ACTION
Do not adopt resolution and provide input and feedback to Staff.
ATTACHMENT(S):
Proposed Resolution
Prepared by: Troy Fujimoto, City Planner
Approved by: Ethan Bindernagel, City Manager