Pleasanton City Council
November 19, 2024

CITY COUNCIL

REGULAR MEETING AGENDA
Tuesday, November 19, 2024
7:00 PM

City Council Chamber
200 Old Bernal Avenue
Pleasanton, CA 94566

The meeting will be held in-person, broadcast live on Channel 29 and at https://www.tri- valleytv.org and streamed at https://www.youtube.com/user/TheCityofPleasanton.

Public participation: It is requested that members of the public wishing to address the City Council submit a speaker card. When public comment is opened on an agenda item, individuals may speak once per agenda item.

To submit written public comment regarding an open session item on this meeting agenda visit https://forms.cityofpleasantonca.gov/f/writtenpubliccomment. Comments will be accepted by the City Clerk’s Office until 12:00 p.m. on the day of the Council meeting.

In Person at Council Chamber:
• Submit a physical speaker card to the City Clerk at the meeting. When your name is called, please provide comment at the podium.

CALL TO ORDER
• Pledge of Allegiance
• Remarks by Councilmember Arkin
• Roll Call
Resolution No. 2024-068
Ordinance No. 2287

AGENDA AMENDMENTS

CONSENT CALENDAR
Items listed on the consent calendar are considered routine in nature and may be enacted by one motion. If discussion is required, that particular item will be removed from the consent calendar and will be considered separately.

City Council

1. Approve the First Amendment to the Amended and Restated Employment Contract of City Manager Gerry Beaudin to provide for twelve months severance pay/benefits
City Manager

2. Approve meeting minutes of October 1, 2024 and October 15, 2024

City Council Agenda Page 2 of 4 November 19, 2024

3. Ratify Economic Vitality Committee Appointment

4. Public Hearing: Adopt a resolution levying the Downtown Pleasanton Business Improvement District assessment for 2025
Community Development

5. Actions of the Zoning Administrator and Planning Commission

6. Adopt Ordinance No. 2286 approving amendments to Chapters 17.38, 18.08, and

18.88 of the Pleasanton Municipal Code regarding density bonus and major transit stop as identified in State law [Case P24-0334]

7. Introduce an Ordinance approving amendments to Pleasanton Municipal Code Chapters 17.44 (Inclusionary Zoning), 17.40 (Affordable Housing Fee) and 18.38 (Housing Opportunity Zone District); and adopt a resolution approving amendments to the Objective Standards for Housing Element Sites (Case No. P24-0505) Finance

8. Accept the monthly disbursement and investment report for September 2024

9. Adopt a resolution approving the revised investment policy documents for the City's PARS Section 115 Pension Trust Fund
Library and Recreation

10. Approve first amendment to the services agreement with Folger Graphics for Activities Guide, City Newsletter, and City Annual Report printing services in an amount not to exceed $76,238 from December 1, 2024 to November 30, 2025 Public Works

11. Approve Amendment No. 1 to Agreement between the City of Pleasanton and Zone 7 Water Agency to perform Phase I Feasibility review for the Regional Groundwater Facilities Project for a Revised Total Not-To-Exceed Amount of $2,733,178

12. Approve a purchase order with Shape Incorporated in the amount of $1,170,000 and authorize a $117,000 contingency for the purchase of a pre-packaged booster station for Turnout No. 4 Pre-Packaged Booster Station Procurement, CIP No. 24181

MEETING OPEN TO THE PUBLIC

13. Presentation of a proclamation recognizing November 2024 as Native American Heritage month

14. Public Comment regarding items not listed on the agenda – Speakers are limited to

City Council Agenda Page 3 of 4 November 19, 2024

3 minutes.

PUBLIC HEARINGS AND OTHER MATTERS
If necessary to ensure completion of the following items, the Mayor may alter time limits.

15. Adopt a resolution to accept the FY 2023/24 Year-End Operating Budget Report, approve budget amendments in multiple funds, and designate the General Fund balance

16. Adopt a resolution to accept the FY 2023/24 Year-end Financial and Program Delivery Report for the Capital Improvement Program (CIP)

17. Receive presentation on Draft Impact Fee Nexus Studies and provide input on recommended Capital Facilities Fee, Transportation Impact Fee, Commercial Linkage Fee, Affordable Housing Fee, and Sewer and Water Connection Fee amounts

18. Accept the Final Water System Management Plan dated October 2024

MATTERS INITIATED BY COUNCIL

COUNCIL REPORTS
Brief reports on conferences, seminars, and meetings attended by the Council

ADJOURNMENT

Notice
Under Government Code §54957.5, any writings/documents regarding an open session item on this agenda and items received by the City Clerk’s Office by 12:00 p.m. on the day of the meeting provided to a majority of the City Council after distribution of the agenda packet will be available for public inspection on the City’s website https://www.cityofpleasantonca.gov/ and also at the Pleasanton Library located at 400 Old Bernal Ave., Pleasanton, CA 94566.

There is a 90-day limit for the filing of a challenge in the Superior Court to certain City administrative decisions and orders, which require a hearing by law, the receipt of evidence, and the exercise of discretion. The 90-day limit begins on the date the decision is final (Code of Civil Procedure § 1094.6). Further, if you challenge an action taken by the City Council in court, you may be limited, by California law, including but not limited to Government Code §65009, to raising only those issues you or someone else raised in the public hearing, or in written correspondence delivered to the City Council prior to or at the public hearing. The City Council may be requested to reconsider a decision if the request is made prior to the next City Council meeting, regardless of whether it is a regular or special meeting.

Accessible Public Meetings

City Council Agenda Page 4 of 4 November 19, 2024

The City of Pleasanton can provide special assistance for persons with disabilities to participate in public meetings. To make a request for a disability-related modification or accommodation (e.g., an assistive listening device), please contact the City Clerk’s Office at 123 Main Street, Pleasanton, CA 94566 or (925) 931-5027 at the earliest possible time. If you need sign language assistance, please provide at least two working days’ notice prior to the meeting date.

Item #1

ATTACHMENT 1

FIRST AMENDMENT TO AMENDED AND RESTATED

EMPLOYMENT CONTRACT CITY MANAGER

This First Amendment to Amended and Restated Employment Contract City Manager (“First Amendment”) is made and entered into _____________, 2024, between the City of Pleasanton and Girard “Gerry” Beaudin (“Beaudin”).

RECITALS

A. City and Beaudin entered into an Employment Contract on April 19 , 2022,
amended by the First Amendment dated December 20, 2022, and an Amended and Restated Employment Contract City Manager on October 17, 2023 (“Contract”); and

B. The Mayor and City Council reviewed his performance on July 16, 2024.

NOW, THEREFORE, in exchange for valuable consideration, the parties agree as follows:

Section 1. Section 14 of the Contract is amended to read as follows:

14. Severance Pay/Benefits. If City decides to terminate this Contract, City shall provide Beaudin with salary and medical/dental insurance benefits for a period of twelve months after the date of the notice of termination. This paragraph will not apply if the City terminates this Contract for conduct which is a felony.

Section 2. Except as provided in this First Amendment, all other terms and conditions of the Contract shall remain in full force and effect.

Executed as of the date first written above.

CITY OF PLEASANTON

_____________________________ _____________________________ Karla Brown, Mayor Girard “Gerry” Beaudin

Attest:

_____________________________
Jocelyn Kwong, City Clerk

Approved as to form:

_____________________________
Daniel G. Sodergren, City Attorney

City Council Minutes Page 1 of 4 October 1, 2024

CITY OF PLEASANTON

CITY COUNCIL

MINUTES
Tuesday, October 1, 2024
7:00 PM

CALL TO ORDER
Mayor Brown called the Regular Meeting of the City Council to order at the hour of 7:01 p.m. from the Council Chamber located at 200 Old Bernal Avenue.

Councilmember Nibert provided opening remarks.

ROLL CALL

Present: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown

Absent: None.

AGENDA AMENDMENTS
None.

CONSENT CALENDAR
Mayor Brown opened public comment. There being no speakers, Mayor Brown closed the public comment.

MOTION: It was m/s by Arkin/Testa to approve the consent calendar as recommended.

Motion passed by the following vote:

Ayes: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Noes: None

Absent: None

1. Ratify Commission and Committee appointments
Recommendation: Ratify Commission and Committee appointments to the Energy and Environment Commission, Economic Vitality Committee, Human Services Commission, Library Commission, Youth Commission.

City Manager

2. Approve meeting minutes of September 3, 2024
Item #2

City Council Minutes Page 2 of 4 October 1, 2024
Recommendation: Approve meeting minutes of September 3, 2024.

Community Development

3. Actions of the Zoning Administrator and Planning Commission Recommendation: Approve actions of the Zoning Administrator and Planning Commission.

Public Works

4. Accept Public Improvements performed by Villalobos & Associates, Inc. for the Annual Curb and Gutter for Street Resurfacing Project, CIP No. 24509 and approve a budget amendment to return $21,412 to the Gas Tax Fund Recommendation:

1. Accept the project as complete and authorize the City Clerk to file a Notice of Completion.

2. Authorize release of the retention in the amount of $39,396 to Villalobos & Associates, Inc., 30 days after the recordation of the Notice of Completion.

3. Approve a budget amendment to return the project’s unused balance of $21,412 to the Gas Tax fund balance (Fund 160).

5. Accept public improvements performed by Golden State Construction & Utility, Inc., approve an amendment to the professional services agreement with Alta Archaeological Consulting LLC for the Annual Sewer Collection System Improvements Project, CIP No. 24278, and approve a budget amendment in the Sewer Replacement Fund
Recommendation:

1. Accept the project as complete and authorize the City Clerk to file a Notice of Completion.

2. Authorize release of the retention in the amount of $35,795 to Golden State Construction & Utility, Inc. 30 days after recordation of the Notice of Completion.

3. Approve a budget amendment to return the project’s balance of $754,426 to the fund balance in the Sewer Replacement Fund (Fund 431).

4. Approve an amendment with Alta Archaeological Consulting LLC, extending the term through September 30, 2024, and increasing the total contract amount to $24,345, an increase of $7,545 from the initial $16,800.

6. Approve a professional services agreement with SCI Consulting Group, Inc. in the

City Council Minutes Page 3 of 4 October 1, 2024
amount of $64,690 to provide Engineer's Reports and Proposition 218 balloting procedures for the Moller Ranch and Ponderosa-Del Prado Landscape Maintenance Districts
Recommendation:

1. Approve the professional services agreement with SCI Consulting Group, Inc. in the amount of $64,690 to provide engineers reports and Proposition 218 balloting procedures for the Moller Ranch and Ponderosa-Del Prado Landscape Maintenance Districts and authorize the City Manager to execute the agreement.

2. Authorize the Director of Public Works to execute amendments to the professional service agreement up to a not-to-exceed amount of $6,500 (approximately 10 percent) for unforeseen yet necessary related work.

7. Approve an approximately three-year maintenance services agreement to the lowest responsive and responsible bidder, Best Quality Tree Service, for median mulch replenishment in the not-to-exceed contract amount of $304,152, inclusive of a 15 percent contingency per year, with the option to extend two additional one- year extensions with satisfactory performance
Recommendation:

1. Approve an approximately three-year agreement with Best Quality Tree Service from November 1, 2024, to June 30, 2027, in the not-to-exceed amount of $304,152, inclusive of a 15 percent contingency per year.

2. Authorize the City Manager to exercise optional two additional one-year contract extensions provided upon satisfactory performance at the end of the three-year term contract.

8. Approve a professional services agreement with West Yost & Associates, Inc., in the not-to-exceed amount of $123,790 to provide assistance with a Cross- Connection Control Plan Development and Hazard Assessments in compliance with the Cross-Connection Control Policy Handbook
Recommendation: Approve a professional services agreement with West Yost & Associates, Inc., in the not-to-exceed amount of $123,790 to provide assistance with a cross-connection control plan development and hazard assessments in compliance with the Cross-Connection Control Policy Handbook.

MEETING OPEN TO THE PUBLIC

9. Oath of Office to new commission and committee members Mayor Brown introduced all newly appointed commission and committee members.

City Council Minutes Page 4 of 4 October 1, 2024
City Clerk Jocelyn Kwong administered the oath of office.

10. Public Comment regarding items not listed on the agenda Mayor Brown opened public comment. The following individuals provided comment: Craig Freeman, Advaith Krishnakumar, Matthew Gray, Vicki LaBarge, Brian Bourg, Christine Bourg, Jan Batcheller, Linda Garbarino.

Mayor Brown closed the public comment.

PUBLIC HEARINGS AND OTHER MATTERS
Workshop

11. Receive information and discuss options and opportunities for a program to support affordable housing project(s) in Pleasanton
Recommendation: Receive information and discuss options and opportunities for a program to support affordable housing project(s) in Pleasanton.

Presentation by Steve Hernandez, Housing Manager, and Ellen Clark, Community Development Director.

Mayor Brown opened public comment. There being no speakers, Mayor Brown closed the public comment.

The City Council provided feedback regarding target populations, construction types, and funding opportunities, including partnerships.

MATTERS INITIATED BY COUNCIL
Mayor Brown requested additional information about flying the Pleasanton City flag.

COUNCIL REPORTS
Councilmembers reported on regional and local meetings attended.

ADJOURNMENT
Mayor Brown adjourned the meeting at 10:03 p.m.
______________________
Jocelyn Kwong, City Clerk

City Council Minutes Page 1 of 5 October 15, 2024

CITY OF PLEASANTON

CITY COUNCIL

MINUTES
Tuesday, October 15, 2024
7:00 PM

CALL TO ORDER
Mayor Brown called the Regular Meeting of the City Council to order at the hour of 7:00 p.m. from the Council Chamber located at 200 Old Bernal Avenue.

Councilmember Testa provided opening remarks.

ROLL CALL

Present: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown

Absent: None

AGENDA AMENDMENTS
Mayor Brown pulled agenda item 11 from the consent calendar for further discussion.

CONSENT CALENDAR
Mayor Brown
opened public comment. The following individuals provided comment:

Sharon Piekarski.

Mayor Brown closed the public comment.

MOTION: It was m/s by Arkin/Testa to approve the consent calendar as recommended except for item 11 which was removed from the consent calendar. Motion passed by the following vote:

Ayes: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Noes:

None

Absent: None
City Manager

1. Approve meeting minutes of September 12, 2024 and September 17, 2024 Recomme
ndation: Approve meeting minutes of September 12, 2024 and September 17, 2024.

2. Adopt a resolution accepting and approving the Downtown Pleasanton Business Improvement District 2024 Annual Report and 2025 Budget and declaring the

City Council Minutes Page 2 of 5 October 15, 2024
intent to levy the annual assessment for 2025
Recommendation: Adopt Resolution No. 2024-062 accepting and approving the Downtown Pleasanton Business Improvement District 2024 annual report and 2025 budget as prepared by the Advisory Board, and setting the public hearing date for November 19, 2024, to levy the annual assessment.

Community Development

3. Actions of the Zoning Administrator and Planning Commission Recommendation: Approve actions of the Zoning Administrator and Planning Commission.

4. Approve and authorize the City Manager to execute the funding agreement with the Federal Highway Administration for the Safe Streets and Roads for All - Planning and Demonstration Grant to develop the Pleasanton Travel Action Plan and approve budget amendments in the Miscellaneous CIP Grants Fund and General Fund
Recomme
ndation:
• Approve and authorize the City Manager to execute the funding agreement with the Federal Highway Administration for the Safe Streets and Roads for All - Planning and Demonstration Grant to develop the Pleasanton Travel Action Plan
• Approve budget amendments in the Miscellaneous CIP Grants Fund to appropriate $240,000 in grant revenue and appropriate a corresponding $240,000 in expenditures to the Pleasanton Travel Action Plan Project • Approve a budget amendment in the General Fund to reallocate $60,000 in existing Professional Services budget to the Pleasanton Travel Action Plan Project.

5. Adopt resolutions of local support and authorize staff to submit three applications to the Alameda County Transportation Commission for a total of $5,875,000 in funding from the 2026 Comprehensive Investment Plan for the West Las Positas Boulevard Multimodal Reconstruction Project, CIP No. 11514, the I-580 Overcrossing Bicycle and Pedestrian Improvements Project, CIP No. 22570, and the Santa Rita Road at Valley Avenue Intersection Improvement Project, CIP No. 20569
Recomme
ndation: Adopt Resolution Nos. 2024-063, 2024-064, and 2024-065 of local support and authorize staff to submit three applications to the Alameda County Transportation Commission for a total of $5,875,000 in funding from the 2026 Comprehensive Investment Plan for the West Las Positas Boulevard Multimodal Reconstruction Project, CIP No. 11514, the I-580 Overcrossing Bicycle

City Council Minutes Page 3 of 5 October 15, 2024
and Pedestrian Improvements Project, CIP No. 22570, and the Santa Rita Road at Valley Avenue Intersection Improvement Project, CIP No. 20569.

6. Public Hearing: Introduce an ordinance approving amendments to Chapters

17.38, 18.08, and 18.88 of the Pleasanton Municipal Code regarding density bonus and major transit stop as identified in State law [Case P24-0334] Recomme
ndation: Introduce Ordinance No. 2286 approving amendments to Chapters 17.38, 18.08, and 18.88 of the Pleasanton Municipal Code regarding density bonus and major transit stop as identified in State law [Case P24-0334].

Finance

7. Accept the monthly disbursement and investment report for August 2024 Recomme
ndation: Accept claim disbursements in the amount of $20,231,058 and the investment report for the month of August 2024.

8. Adopt a resolution to 1) Establish a convenience surcharge for credit card payments made to the City and 2) Update the indirect cost rate Recommendation: Adopt Resolution No. 2024-066 to:

1. Establish a 2.50 percent convenience surcharge on all payments made to the City using a credit card, effective January 1, 2025, and

2. Update the City’s indirect cost rate to 27.03 percent, effective November 18, 2024.

Library and Recreation

9. Adopt a resolution accepting $42,948 in grant funding for Adult Literacy Services from the California State Library for FY 2024/25
Recommendation: Adopt Resolution No. 2024-067 accepting $42,948 in grant funding for Adult Literacy Services from the California State Library for FY 2024/25.

Public Works

10. Approve a professional services agreement with Pakpour Consulting Group, Inc. for construction management services for the not-to-exceed amount of $186,624 for the Near-Term Water Improvements Project, CIP No. 24172 Recomme
ndation: Approve a professional services agreement with Pakpour Consulting Group, Inc. under the on-call general civil engineering contract for a not-

City Council Minutes Page 4 of 5 October 15, 2024
to-exceed amount of $186,624 for the Near-Term Water Improvements Project, CIP No. 24171, per the June 1, 2021, City Council resolution.

MEETING OPEN TO THE PUBLIC

12. Business Anniversary Recognition
Lisa Adamos, Economic Development Manager, introduced the businesses celebrating anniversaries this year.

13. Presentation of a proclamation recognizing November 1, 2024 as Diwali Vice Mayor Testa presented the proclamation to recipient Association of Indo- Americans.

14. Presentation of a proclamation recognizing October 2024 as Domestic Violence Awareness Month
Vice Mayor Testa presented the proclamation to recipient Tri-Valley Haven.

15. Public Comment regarding items not listed on the agenda.

Mayor Brown opened public comment. The following individuals provided comment:

Kelly Cousins, Sandra Yamaoda, Christine Bourg, Erin Sharpe, Sean Fogarty, Jan Batcheller, Brad Hirst,
Linda Garbarino, Linda Kelly, Vicki LaBarge, Matthew Gray, Craig Freeman, Doug Miller.

Mayor Brown closed the public comment.

PUBLIC HEARINGS AND OTHER MATTERS

16. PG&E presentation on service reliability
PG&E representatives, Sarah Yoell and Jake Zigelman, presented on the service areas within the city including a summary of outage history, reliability and ongoing improvements in the five different circuit areas.

Mayor Brown opened public comment. The following individuals provided comment: Laura Danielson.

Mayor Brown closed the public comment.

Mayor Brown called a recess at 9:15 p.m. and reconvened at 9:23 p.m.

17. Receive a presentation and provide input on Draft Amendments to Pleasanton

City Council Minutes Page 5 of 5 October 15, 2024
Municipal Code (PMC) Chapter 17.44 - Inclusionary Zoning Amendments and Related Amendments to PMC Chapter 17.40 - Affordable Housing Fee, Chapter

18.38 - Housing Opportunity Zone District, and the Objective Design Standards for Housing Element Sites
Recomme
ndation: Receive a presentation and provide input on Draft Amendments to Pleasanton Municipal Code (PMC) Chapter 17.44 - Inclusionary Zoning Amendments and Related Amendments to PMC Chapter 17.40 - Affordable Housing Fee, Chapter 18.38 - Housing Opportunity Zone District, and the Objective Design Standards for Housing Element Sites.

Presentation by Ellen Clark, Community Development Director.

18. Receive Economic Development Strategic Plan Implementation Update Recomme
ndation: Receive Economic Development Strategic Plan implementation update.

Presentation by Lisa Adamos, Economic Development Manager.

11. Receive an update on Water System Activities
Recommendation: Receive an update on Water System Activities.

MOTION: It was m/s by Nibert/Brown to accept the report as recommended. Motion passed by the following vote:

Ayes: Coun
cilmembers Arkin, Balch, Nibert, Testa, Mayor Brown
Noes: None

Absent:

None

MATTERS INITIATED BY COUNCIL
Councilmember Balch inquired if there was a designated representative for the United States semiquincentennial in 2026. City Manager Beaudin stated staff resources have not been identified, but hopes to be able to coordinate with a community group to support the project.

COUNCIL REPORTS

The City Council reported on regional and local meetings attended.

ADJOURNMENT
Mayor Brown adjourned the meeting at 11:15 p.m.
______________________
Jocelyn Kwong, City Clerk

Item #3

CITY COUNCIL AGENDA REPORT

November 19, 2024
City Clerk

TITLE: RATIFY ECONOMIC VITALITY COMMITTEE APPOINTMENT

SUMMARY
The City solicited applications for unfilled commission and committee vacancies that were not filled during the recent fall recruitment. One application was received by Brian Wilson for the Commercial Real Estate position on the Economic Vitality Committee. The application was screened for eligibility, and reviewed by the Mayor.

RECOMMENDATION
Ratify Economic Vitality Committee Appointment.
• Brian Wilson: November 19, 2024 - September 30, 2028

BACKGROUND
In accordance with commission/committee appointment policies, the City solicits applications from interested Pleasanton residents and those who work in Pleasanton to serve on the City's standing commissions and committees. Generally, recruitment is conducted in the spring and fall of each year, unless there is an unscheduled vacancy.

DISCUSSION
After the fall commission and committee recruitment was completed, there were several vacant positions remaining, one of which was the Commercial Real Estate position on the Economic Vitality Committee. The recruitment for this position remained open as an unfilled vacancy. On October 4, 2024, the City received one application from Brian Wilson for the vacant Commercial Real Estate position. The applicant was a former member of the Economic Vitality Committee, and in good standing. The applicant was qualified on the basis of their application which was reviewed by the Mayor.

EQUITY AND SUSTAINABILITY
The City encourages all eligible and interested community members to participate in committees and commissions, with the intent of including diverse voices from throughout the Pleasanton community. The recruitment process is structured to optimize opportunities for participation.

OUTREACH
Recruitment was open for 30 days in accordance with City policy. Staff liaisons to commissions notified members who may have been impacted by the spring commission and committee restructure of their need to reapply during the fall recruitment cycle if they were eligible and interested in continuing to serve on their respective boards. After the close of the fall

recruitment, unfilled positions were listed on the City website for interested parties.

STRATEGIC PLAN ALIGNMENT
Approval of this action advances the Citywide strategic goal of Optimizing Our Organization, Strategy 4 - Evaluate the organization’s structure of community engagement opportunities such as commissions and committees to improve information sharing, optimize staff efficiency, and provide greater service to the community.

FISCAL IMPACT
None.

Prepared by: Submitted by: Approved by:

Danielle Diaz, Deputy City
Clerk
Jocelyn Kwong, City Clerk

Gerry Beaudin, City
Manager

Attachments:

None

Item #4

CITY COUNCIL AGENDA REPORT

November 19, 2024
City Manager

TITLE: PUBLIC HEARING: ADOPT A RESOLUTION LEVYING THE DOWNTOWN PLEASANTON BUSINESS IMPROVEMENT DISTRICT ASSESSMENT FOR 2025

SUMMARY
The Downtown Pleasanton Business Improvement District (BID) assessment is collected annually as part of a three-step process described under State law. The City Council approved the first step on August 20, 2024, appointing an advisory board to prepare an annual budget and report describing the programs and activities of the BID. The City Council completed the second step on October 15, 2024, by adopting a resolution accepting and approving the 2024 Annual Report and 2025 Budget and declaring the intent to levy the annual assessment for 2025. The final step is to hold a public hearing and adopt a resolution levying the Downtown Pleasanton BID assessment for 2025. This action will levy funds to be used by the Pleasanton Downtown Association (PDA), as the manager of the Downtown Pleasanton BID, to conduct promotions, programs and activities that benefit downtown Pleasanton.

RECOMMENDATION
Hold a public hearing and adopt a resolution levying the Downtown Pleasanton Business Improvement District assessment for 2025.

BACKGROUND
Several decades ago, in 1989, the City established a Downtown Pleasanton Business Improvement District (BID) with the purpose and boundaries of which are set forth in Chapter

5.28 of the Pleasanton Municipal Code. The Pleasanton Downtown Association (PDA) serves as the manager of the Downtown Pleasanton BID. At its November 19, 2019, meeting, the City Council approved renewal of a five-year agreement between the City and the PDA by which the City contributes funds to match the annual BID assessment revenue. These City funds are remitted to the PDA and used to conduct promotions, programs and activities that benefit downtown Pleasanton. The agreement requires the PDA to submit an annual budget to the City Council for review and consideration. The Downtown Pleasanton BID annual assessment revenue in 2025 is provisionally projected by City staff to be approximately $80,000.

The assessment formula determined with the formation of the BID - and not materially amended since then - is based on the annual business license payment and is calculated as follows:
• businesses located curbside and downstairs on Main Street are assessed at two times (2X) their business license;
• businesses with a Main Street address located upstairs, or not curbside, are assessed at a rate of one and a half times (1½X) their business license; • all other businesses (those located off Main Street) pay an amount equal to one times

(1X) their business license.

The minimum assessment is $50 and the maximum is $350. Non-profit businesses within the district are not assessed. For 2025, there are no proposed boundary changes or proposed changes in the method of levying the assessment.

Under the current agreement between the PDA and the City, the City is required to match the annual BID assessment, estimated at an additional $80,000. The full amount of the City's matching funds will be considered based on future financial constraints. An updated agreement will be presented for the City Council's consideration in early 2025 in alignment with the Property-based Business Improvement District (PBID) feasibility study results.

In the interim, the PDA provided a provisional budget which considers potential budget reductions, including the possibility of no City match of assessments, which would result in a PDA budget reduction of $80,000. This scenario would necessitate the elimination of one position, a savings of $61,000, plus additional reductions totaling $16,850. The PDA budget includes events planned during the year, which are projected to generate approximately 62 percent of the total 2025 revenue, up from 55 percent last year. Remaining income from the BID assessments, farmer’s market, corporate sponsors and miscellaneous sources generate the remaining 38 percent of the total 2025 revenue.

DISCUSSION
Per Chapter 3, Section 36530 of the Parking and Business Improvement Area Law of 1989, the City Council must complete the following three steps to levy the annual assessment for the Downtown Pleasanton BID:

1. Appoint an advisory board to prepare the annual budget with a report describing the programs and activities of the downtown business improvement district and the related funding sources (completed on August 20, 2024);

2. Accept the annual report and budget and set a public hearing to levy the assessments (completed on October 15, 2024); and

3. Open and close a public hearing and adopt by resolution the assessments (to be completed on November 19, 2024).

As the first two steps in the process have been completed, the final step is to hold a public hearing to hear any protest to the levy of the Downtown Pleasanton Business Improvement District assessment for 2025 and to adopt a resolution levying the Downtown Pleasanton Business Improvement District assessment for 2025 (Exhibit A).

Next Steps with Property-based Business Improvement District (PBID) Evaluation For numerous years, it has become apparent that the funding generated through the current annual BID assessment – approximately $80,000, which the City has historically matched – does not provide sufficient revenue to support the PDA in meeting the PDA’s and City’s shared expectations to augment the vitality and economic health of the downtown district through the implementation of contemporary activities and best practices. A restructure of the BID assessment has been a priority of the PDA and was included in the previous City Council Priorities annual work plan.

City staff, with input from the PDA, is working with Civitas Advisors to evaluate the feasibility of a Property-based Business Improvement District (PBID) as Phase I of the project. It is anticipated that creating a PBID would generate significantly more revenue than the approximately $80,000 provided through the current assessment. The process consists of several steps including the establishment of a steering committee to determine district parameters and build consensus among property owners, database and boundary map development, property owner outreach, district service plan and assessment scenario development, and financial analysis and recommendation. A property owner open house is planned on November 18, 2024, and feedback from a survey is currently being collected for consideration of the draft district service plan.

Staff will present the feasibility study results to the Economic Vitality Committee, followed by a recommendation to be considered by the City Council in early 2025. If directed by the City Council to proceed with a Property-based Business Improvement District, Phase II of the project will begin with formation, which could take approximately 9 months. If it is not approved to proceed with a Property-based Business Improvement District, staff will begin to transition the current business improvement district from the Parking and Business Improvement Area Law of 1989 to the 1994 law, as the 1994 law allows the district term to be formed for up to five years, which is intended to align with the five-year term of the City-PDA agreement. The 1994 law initiation process would be based on the submission of petitions signed by businesses that will pay at least 50% + 1 of the proposed assessment rather than by resolution adopted by the City Council. Calendar year 2026 would be the target for implementing a new or updated structure.

EQUITY AND SUSTAINABILITY
Not applicable, as this item is a routine matter of City business.

OUTREACH
No outreach was conducted, as this item is a routine matter of City business.

STRATEGIC PLAN ALIGNMENT
Approval of this action advances the ONE Pleasanton strategic plan goal of Building a Community Where Everyone Belongs by ensuring the vibrancy of Pleasanton’s downtown as prioritized in the City's Economic Development Strategic Plan.

FISCAL IMPACT
The current agreement between the Downtown Pleasanton Business Improvement District and the City requires the City to match the annual assessments paid by businesses in the BID. In 2024, the City match from the General Fund is estimated to be approximately $80,000. While staff anticipates the 2025 annual assessments will similarly be around $80,000, the full amount of the City's matching funds will be considered based on future financial constraints. The current agreement expires on December 31, 2024; an updated agreement will be presented for the City Council's consideration in early 2025 in alignment with the property and business improvement district (PBID) feasibility study results.

Prepared by: Submitted by: Approved by:

Lisa Adamos, Economic
Development Manager
Pamela Ott, Assistant City Manager

Gerry Beaudin, City
Manager

Attachments:

1. Resolution to Levy 2025 Downtown Pleasanton BID Assessment

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON, LEVYING THE 2025 ANNUAL ASSESSMENT FOR THE DOWNTOWN PLEASANTON

BUSINESS IMPROVEMENT DISTRICT
WHEREAS, the City of Pleasanton has heretofore established a Pleasanton Downtown Business Improvement District, the purposes and boundaries of which are set forth in Chapter

5.28, Pleasanton Municipal Code; and
WHEREAS, the City of Pleasanton has heretofore appointed an Advisory Board for the Pleasanton Downtown Business Improvement District; and
WHEREAS, said Advisory Board has prepared an annual report and budget in accordance with the statutory requirements of the Streets and Highways Code, §36534; and WHEREAS, the City Council at its meeting on October 15, 2024, accepted and approved the 2024 Annual Report and 2025 Budget of the Downtown Pleasanton Business Improvement District, in accordance with the Streets and Highways Code, §36533; and WHEREAS, a duly noticed public hearing, as provided in §36534 of the Streets and Highways Code was held before the City Council on November 19, 2024, to consider the levy of the proposed annual assessment; and
WHEREAS, there were no majority protest regarding the proposed assessment.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:

SECTION 1. The City Council hereby levies the 2025 annual assessment for the Downtown Pleasanton Business Improvement District.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on November 19, 2024.

I, Jocelyn Kwong, City Clerk of the City of Pleasanton, California, certify that the foregoing resolution was adopted by the City Council at a regular meeting held on the 19th day of November 2024 by the following vote:

Ayes:

Noes:

Absent:

Abstain:
_____________________________
Jocelyn Kwong, City Clerk
APPROVED AS TO FORM:
___________________________
Daniel G. Sodergren, City Attorney

Item #5

CITY COUNCIL AGENDA REPORT
November 19, 2024
Community Development
TITLE: ADOPT ORDINANCE NO. 2286 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLEASANTON APPROVING AMENDMENTS TO CHAPTERS 17.38 AND

18.08, AND 18.88 OF THE PLEASANTON MUNICIPAL CODE REGARDING DENSITY

BONUS AND MAJOR TRANSIT STOP AS IDENTIFIED IN STATE LAW, AS FILED UNDER CASE P24-0334
The foregoing Ordinance No. 2286 was introduced at a regular meeting of the City Council on October 15, 2024, by the following vote:

Ayes: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Noes: None

Absent: None
Abstain: None

Ordinance No. 2286

ORDINANCE NO. 2286

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLEASANTON APPROVING AMENDMENTS TO CHAPTERS 17.38 AND 18.08, AND 18.88 OF THE

PLEASANTON MUNICIPAL CODE REGARDING DENSITY BONUS AND MAJOR TRANSIT STOP AS IDENTIFIED IN STATE LAW, AS FILED UNDER CASE P24-0334 WHEREAS, the City’s Housing Element, which was adopted by City Council on January 26, 2023, was found in compliance with housing element law on August 25, 2023, by the California Department of Housing and Community Development and subsequently re-adopted by City Council on September 19, 2023, provides that the City will amend the affordable housing density bonus provisions to align with State Density Bonus Law, as stated in Program 2.7; and WHEREAS, Sections 65915 et seq. of the California Government Code, known as State Density Bonus Law, require a city to provide a developer that proposes a housing development within the jurisdictional boundaries of that city containing affordable and other types of housing with a density bonus and other incentives; and WHEREAS, California Government Code Section 65915(a) requires that all jurisdictions within the state adopt an ordinance that specifies how compliance with State Density Bonus Law will be implemented; and
WHEREAS, since adoption of the City’s density bonus ordinance, the State Legislature has passed, and the Governor has signed into law, numerous changes to State Density Bonus Law; and
WHEREAS, the City proposes to codify a method to measurement from a major transit stop for purposes of implementing various sections of State law; and WHEREAS, on September 11, 2024, the Planning Commission following notification to the public in the prescribed manner, conducted a public hearing, considered the written agenda report, public testimony, related project materials, and staff recommendations, and has reviewed the proposed amendments to the Pleasanton Municipal Code, has found that the proposed amendments are consistent with goals and policies of the City’s General Plan and recommended that the City Council adopt the municipal code amendments.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Finds that the amendments to the Pleasanton Municipal Code are within the scope of the 2023-2031 (6th Cycle) Housing Element Update Environmental Impact Report (State Clearinghouse No. 2022040091) certified by the City Council on January 26, 2023 by Reso No. 23-1357. The proposed amendments do not result in new significant effects beyond those analyzed in the Final EIR. The City Council further finds that the proposed amendments are exempt from CEQA review pursuant to: CEQA Guidelines Section 15268 in that the amendments are necessary to conform to and implement the ministerial approval processes mandated by State law (e.g., Government Code Section 65915; Public Resources Code Section 21155); CEQA Guidelines Section 15061(b)(3) in that there is no possibility the activity will have a significant effect on the environment.

SECTION 2. Approves amendments to Chapters 17.38 and 18.08, and 18.88 of the Pleasanton Municipal Code regarding density bonus and major transit stop as identified in State

Ordinance No. 2286

law, as filed under Case P24-0334 and attached to this ordinance as Exhibit A.

SECTION 3. A summary of this ordinance shall be published once within fifteen (15) days after its adoption in “The Valley Times,” a newspaper of general circulation published in the City of Pleasanton, and the complete ordinance shall be posted for fifteen (15) days in the City Clerk’s office within fifteen (15) days after its adoption.

SECTION 4. This ordinance shall be effective thirty (30) days after its passage and adoption.

The foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Pleasanton, California, on October 15, 2024, and adopted on November 19, 2024, by the following vote:

Ayes:

Noes:

Absent:

Abstain:
______________________________
Karla Brown, Mayor

ATTEST:

____________________________
Jocelyn Kwong, City Clerk

APPROVED AS TO FORM:

____________________________
Daniel G. Sodergren, City Attorney

Ordinance No. 2286

EXHIBIT A
TITLE 17

PLANNING AND RELATED MATTERS
Chapter 17.38

AFFORDABLE HOUSING DENSITY BONUS
Sections

17.38.010 Purpose.

17.38.020 Definitions.

17.38.030 Application requirements.

17.38.040 Review process.

17.38.050 Affordability requirements.

17.38.060 Density bonus calculations.

17.38.070 Development standards.

17.38.080 Density bonus for commercial development.

17.38.090 Conflict of interest.

17.38.100 Interpretation.

17.38.010 Purpose.

In accordance with Government Code Sections 65915, et seq., this chapter specifies how compliance with state density bonus law will be implemented. Specifically, the purpose of this chapter 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 state law. In enacting this chapter, it is also the intent of the city to implement the goals, objectives, and policies of the city’s housing element of the general plan.

17.38.020 Definitions.

The definitions found in state density bonus law shall apply to the terms contained in this chapter. “Incentives” include “concessions” as defined in state density bonus law.

The following terms are defined for purpose of this chapter:

A. "Affordable units” means the proposed housing units available for rent or sale to households pursuant to the state density bonus law, as set forth in Government Code section 65915 subdivision (b), as may be amended.

B. “Base units” means the total number of units in a housing development, not including units added through a density bonus pursuant to this chapter.

C. "Child care facility" means a child day care facility that provides nonmedical care to children under 18 years of age in need of personal services, supervision, or assistance essential for sustaining the activities of

Ordinance No. 2286

daily living or for the protection of the individual on less than a 24-hour basis. Child day care facility includes day care centers, employer-sponsored child care centers, and family day care homes.

D. “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.

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. “Identifiable and actual cost reduction to provide for affordable housing cost” means a reasonably quantifiable cost reduction that would be achieved for a housing development through a concession.

H. “Reasonable documentation to establish eligibility for a concession” means a credible written explanation or other documentation demonstrating to the reasonable satisfaction of the Planning Director or designee that a concession will achieve an identifiable and actual cost reduction to provide for affordable housing cost.

I. "Senior citizen housing development" means a residential development developed, substantially rehabilitated, or substantially renovated for, senior citizens that has at least 35 dwelling units, as defined in the Civil Code Section 51.3, or a mobile home park that limits residency based on age requirements for housing for older persons pursuant to Civil Code Sections 798.76 or 799.5.

J. “State density bonus law” means Government Code Section 65915, et seq, as the same may be renumbered or amended.

17.38.030 Application Requirements.

A.An applicant for a “housing development” as defined in state density bonus law 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 65915.5, or successor provisions. The density bonus calculations shall be made in accordance with state density bonus law.

B.The granting of a density bonus, incentive, or concession, pursuant to this chapter, shall not be interpreted, in and of itself, to require a general plan amendment, development code amendment, zone change, other discretionary approval, or the waiver of a city ordinance or provisions of a city ordinance unrelated to development standards.

C.All requests for density bonuses, incentives, parking reductions, and waivers for a housing development shall be filed with and on a form provided by the Director of Community Development, or their designee, concurrently with the filing of the planning application for the first discretionary or ministerial permit required for the housing development, whichever permit is earliest. The applicant shall be informed whether the application is complete consistent with Government Code Section 65943.

Ordinance No. 2286

D.The application shall include the required fee and the following minimum information:

1. For a requested density bonus.
a. A project summary table demonstrating the basis under the state density bonus law on which the applicant is requesting a density bonus, including the maximum allowable density permitted by the zoning and general plan designations excluding any density bonus; base units; proposed number of affordable units by income level; proposed bonus percentage; total number of dwelling units; residential gross floor area and total gross floor area proposed; density per acre; proposed number of parking spaces; and unit and bedroom counts and unit types for the purpose of calculating parking requirements;
b. A preliminary site plan, drawn to scale, showing the number and location of all proposed units;
c. A legal description of the site;
d. A boundary survey;
e. An identification of the maximum density bonus to which the housing development is entitled on the basis requested;
f. An identification of any concession(s) sought and reasonable documentation consisting of a detailed written statement to establish eligibility for the concession(s); g. An identification of any waiver(s) sought and a detailed written explanation of why the development standard from which any waiver is sought would have the effect of physically precluding the construction of the housing development at the density and with any concession(s) or parking ratio reduction sought. h. If the housing development is proposed on any property that includes a parcel or parcels with existing dwelling units or dwelling units that have been vacated or demolished in the five-year period preceding the application, an explanation of how the project meets the state density bonus law’s replacement housing requirements, if applicable, set forth in Government Code section 65915 subdivision (c)(3), as may be amended.
i. If the density bonus or concession requested is based all or in part on the inclusion of a child-care facility, a written summary addressing the eligibility requirements pursuant to state density bonus law, as set forth in Government Code section 65915 subdivision (h), as may be amended, have been met.
j. If the density bonus or concession is based all or in part on the inclusion of affordable units as part of a condominium conversion, written summary addressing the eligibility

Ordinance No. 2286

requirements pursuant to state density bonus law, set forth in Government Code section 65915.5, as may be amended, have been met.
k. If the density bonus is requested for a land donation, the location of the land to be dedicated, proof of site control and reasonable documentation that each of the requirements pursuant to state density bonus law, set forth in Government Code section 65915 subdivision (g), as may be amended, can be met. l. A marketing plan for the affordable housing units, as well as an explanation of the methods to be used to verify tenant and/or buyer incomes and to maintain affordability of the affordable housing units. For a housing development with 15 dwelling units or more, the density bonus housing plan shall specify a financing mechanism for ongoing administration and monitoring of the affordable housing units.

2.Requested incentives. Incentives are those defined by state density bonus law. The number of incentives that may be requested shall be based upon the number the applicant is entitled to pursuant to state density bonus law. The application shall include the following minimum information for each incentive requested, shown on a site plan (if appropriate):
a. The city usual regulation and the requested regulatory incentive or concession. b. Except where mixed-use zoning is proposed as a concession or incentive, reasonable documentation to show that any requested incentive will result in identifiable and actual cost reductions to provide for affordable housing costs or rents. c. If approval of mixed-use zoning is proposed, reasonable documentation that nonresidential land uses will reduce the costs of the housing development, that the nonresidential land uses are compatible with the housing development and the existing or planned development in the area where the proposed housing development will be located, and that mixed-use zoning will provide for affordable housing costs and rents.

3.Requested waivers. For each waiver requested, the applicant shall include, shown on a site plan, and shown for each existing or proposed parcel (if applicable), the city required development standard and the requested 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 ratio specified in Government Code Section 65915(p). An applicant may request this parking reduction in addition to the incentives 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, 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 incentive for a child care 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.

Ordinance No. 2286

6.Density bonus or incentive 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.

17.38.040 Application review process.

A. All requests under state density bonus law shall be part of the planning application and shall be applied for, reviewed, and acted upon concurrently with the planning application by the approval body with authority to approve the development, within the timelines prescribed by Government Code Section 65950 et seq. or other statute. Appeals of the planning application in accordance with the requirements of chapter 18.144 of this code and shall include all requests under state density bonus law if appeals are authorized for the discretionary or ministerial permit applied for.

B. To ensure that an application for a housing development conforms with the provisions of state density bonus law, the staff report presented to the decision-making body shall state whether the application conforms to the following requirements of state density bonus law, as applicable:

1. The housing development provides the housing required by state density bonus law to be eligible for a density bonus and any incentives, parking reduction, or waivers requested, including housing required to replace units rented or formerly rented to very low- and low-income households as required by Government Code Section 65915(c)(3).

2. If applicable, 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 an incentive is requested, reasonable documentation has been presented showing that any requested incentive will result in identifiable and actual cost reductions to provide for affordable housing or costs or rents; except that, if a mixed-use development is requested, the application must instead meet all of the requirements of Government Code Section 65915(k)(2).

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 incentives permitted.

5. 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 incentive is based all or in part on the inclusion of a child care facility or condominium conversion, the requirements included in Government Code Section 65915(h) or 65915.5, as appropriate, have been met.

C. The decision-making body shall grant an incentive requested by the applicant unless it makes a written finding, based upon substantial evidence, of any of the following:

Ordinance No. 2286

1. The proposed incentive does not result in identifiable and actual cost reductions to provide for affordable housing costs, as defined in Health and Safety Code Section 50052.5; or for affordable rents, as defined in Health and Safety Code Section 50053; or

2. The proposed incentive would be contrary to state or federal law; or

3. The proposed incentive 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.

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 the public health or safety, 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.

E. If a child care center complies with the requirements of Government Code Section 65915(h), the decision- making body may deny a density bonus or incentive 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 minor modification of an approved density bonus may be granted by the Director of Community Development, or their designee, if the modification substantially complies with the original density bonus housing plan and conditions of approval. Other modifications to the density bonus housing plan shall be processed in the same manner as the original plan.

17.38.050 Affordability requirements.

A. Affordable rental units provided by a housing development to meet state density bonus law requirements shall be subject to an affordable housing agreement recorded against the housing development for at least a 55-year term or as required by chapter 17.44, commencing upon the issuance of certificates of occupancy.

The form of the affordable housing agreement shall be approved by the city attorney.

Ordinance No. 2286

B. For-sale affordable units provided by a housing development to meet state density bonus requirements shall be subject to a recorded affordable housing agreement approved as to form by the city attorney commencing upon the issuance of certificates of occupancy. The affordable housing agreement shall, at a minimum, require that:

1.Each for-sale affordable unit shall be sold to an income qualified household at an affordable housing cost, as defined in the affordable housing agreement; and

2.Each for-sale affordable unit shall be sold to the initial purchaser subject to a recorded resale restriction agreement approved as to form by the city attorney, which shall:
a. Have no less than a 45-year term or as required by chapter 17.44 of this title if required by another public financing source or law;
b. Restrict the resale price of the unit to an affordable housing cost, as defined in the resale restriction agreement; and
c. Require that if the unit is sold to a subsequent purchaser during the term of the agreement, the purchaser shall purchase the unit subject to a resale restriction agreement approved as to form by the city attorney with a new 45-year term or longer if required by another public financing source or law.

17.38.060 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, units added by a density bonus are not included in the calculations. Any on-site units shall satisfy the city’s inclusionary housing requirements in chapter 17.44.

Payment of fees in lieu of providing affordable units under chapter 17.44 does not qualify a housing development for a density bonus.

E. 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.

Ordinance No. 2286

F. Nothing in this chapter requires the provision of direct financial incentives from the city for the housing development, including, but not limited to, the provision of financial subsidies, publicly owned land, fee waivers, or waiver of dedication requirements. The city, at its sole discretion, may choose to provide such direct financial incentives.

17.38.070 Development standards.

A. Building permits and final inspections or certificates of occupancy shall be issued concurrently for the market rate units and for any affordable units that qualified the project for a density bonus, incentive, waiver, or parking reduction, so that the affordable units comprise the required percentage of total units.

B. All units provided as density bonus units shall comply with the development standards set forth in Section

17.44.050 of this code.

17.38.080 Density bonus for commercial development.

A. The following definitions shall apply to this Section 17.38.080:

1. “Commercial development” means a development project for nonresidential and nonindustrial uses.

2. “Commercial development bonus” means modification of development standards mutually agreed upon by the city and a commercial developer and provided to a commercial development eligible for such a bonus under subparagraph 17.38.080(C). Examples of a commercial development bonus include an increase in floor area ratio, increased building height, or reduced parking.

3. “Partnered housing agreement” means an agreement approved by the city between a commercial developer and a housing developer identifying how the commercial development will provide housing available at an affordable ownership cost or affordable rent consisted with subparagraph (h)(3). A partnered housing agreement may consist of the formation of a partnership, limited liability company, corporation, or other entity recognized by the state in which the commercial develop and the housing developer are each partners, members, shareholders, or other participants, or a contract between the commercial developer and the housing developer for the development of both the commercial developer and the housing development.

B. When an applicant proposes to construct a commercial development and has entered into a partnered housing agreement approved by the city, the city shall grant a commercial development bonus mutually agreed upon by the developer and the city. The commercial development bonus shall not include a reduction or waiver in fees imposed on the commercial development to provide for affordable housing.

C. The partnered housing agreement shall include all of the following provisions:

1. The housing development shall be located either: (i) on the site of the commercial development; or (ii) on a site within the city that is within one-half mile of a major transit stop, as defined in Public Resources Code Section 21155, and is in close proximity to public amenities, including schools and employment centers.

Ordinance No. 2286

2. At least thirty percent (30%) of the total units in the housing development shall be made available at an affordable ownership cost or affordable rent to low-income households, or at least fifteen percent (15%) of the total units in the housing development shall be made available at an affordable ownership cost or affordable rent to very low-income households.

3. The commercial development must agree either to directly build the affordable housing units, donate a site consistent with the requirements of Government Code Section 65915(g) for the development of the affordable housing units, or make a cash payment to the housing developer for the development of the affordable housing units.

D. An approved partnered housing agreement shall be described in the city Housing Element annual report as required by Government Code Section 65915.7(k).

17.38.090. Conflict of interest.

The following individuals are ineligible to purchase or rent an affordable unit: (A) city employees and officials who have policy making authority or influence regarding city housing programs, and their immediate family members; (B) the project applicant and its officers and employees and their immediate family members; and (C) the project owner and its officers and employees and their immediate family members.

17.38.100 Interpretation.

If any portion of this chapter conflicts with state density bonus law or other applicable state law, state law shall supersede this chapter. Any ambiguities in this chapter shall be interpreted to be consistent with state density bonus law. Statutory references in this ordinance include successor provisions.

TITLE 18
ZONING
CHAPTER 18.08 DEFINITIONS

18.08.332 Major transit stop.
“Major transit stop” means a site containing either of the following, or as amended by state law:

A. An existing public rail or public bus rapid transit station.

B. The intersection of two or more major public bus routes with a frequency of service interval of 20 minutes or less during the morning and afternoon peak commute periods.

Unless otherwise defined by state law, a distance or radius from the major transit stop shall be measured from a single point at the center of the stop or station. Where a station/stop includes infrastructure, such as platforms, bus transfer facilities, and/or parking areas, a single centroid shall be used. If a project site is partially within the radius measurement from the single point, a project shall be considered to be within the radius if: (1) all parcels within the project have no more than 25 percent of their area farther than the specified distance from the major transit stop; and (2) if residential units are proposed, not more than 10

Ordinance No. 2286

percent of the residential units or 100 units, whichever is less, in the project are farther than the specified distance from the major transit stop.

CHAPTER 18.88 OFF-STREET PARKING FACILITIES

18.88.020 Basic Requirements.

A. Unless otherwise provided in state law or this chapter, at the time of initial occupancy, major alteration, or enlargement of sites, or of completion of construction of a structure or of a major alteration or enlargement of a structure, there shall be provided off-street parking facilities for automobiles in accordance with the schedule of off-street parking space requirements prescribed in Section 18.88.030 of this chapter. Except as modified in subsection D of this section, the terms "major alteration" or "enlargement" shall mean a change of use or an addition which would increase the number of parking spaces required by not less than 10 percent of the total number required. The number of parking spaces provided for a major alteration or enlargement of a site or structure shall be in addition to the number existing prior to the alteration or enlargement, unless the preexisting number is greater than the number prescribed in Section 18.88.030 of this chapter, in which instance the number in excess of the prescribed minimum shall be counted in calculating the number provided to serve the major alteration or enlargement.

Item #6

CITY COUNCIL AGENDA REPORT
November 19, 2024
Community Development
TITLE: ACTIONS OF THE ZONING ADMINISTRATOR AND PLANNING

COMMISSION
P24-0500, Yung Chen / Heng Su
Application for Administrative Design Review approval to construct an approximately 160-square-foot single-story addition on the northwest side of the home located at 4190 Garatti Court.

Project Information:

Existing floor area: 1,473 square feet
Total floor area with addition: 1,633 square feet
Lot size: 8,051 square feet
Existing floor area ratio: 18.29 percent
Total floor area ratio with addition: 20.28 percent
Approved. (9 days)
P24-0589, Yao Chen Architecture Studio
Application for Administrative Design Review approval to construct an approximately 663-square-foot, single-story detached accessory structure (pool house) on the southside of the lot at 9472 Blessing Drive.

Project Information:

Existing floor area: 6,175 square feet
Total floor area with addition: 6,838 square feet
Lot size: 55,382 square feet
Existing floor area ratio: 11.15 percent
Total floor area ratio with addition: 12.35 percent
Approved. (9 days)
P24-0566, Linda Hoig
Application for Administrative Design Review approval to construct an approximately 78-square-foot addition to an existing residence located at 1462 Groth Circle.

Project Information:

Existing floor area: 1,345 square feet
Total floor area with addition: 1,423 square feet

Lot size: 6,209 square feet
Existing floor area ratio: 21.66 percent
Total floor area ratio with addition: 22.92 percent
Approved. (10 days)
P24-0568, Leon Sullivan
Application for Administrative Design Review approval to construct an approximately 657-square-foot single-story addition to an existing residence located at 4380 Dorman Court.

Project Information:

Existing floor area: 1,822 square feet
Total floor area with addition: 2,479 square feet
Lot size: 10,001 square feet
Existing floor area ratio: 18.22 percent
Total floor area ratio with addition: 24.79 percent
Approved. (10 days)
P24-0567, Ashok Bhayal
Application for Administrative Design Review approval to construct an approximately 445-square-foot single-story addition to an existing residence located at 7609 Fairoaks Drive.

Project Information:

Existing floor area: 1,357 square feet
Total floor area with addition: 1,802 square feet
Lot size: 7,405 square feet
Existing floor area ratio: 18.33 percent
Total floor area ratio with addition: 24.33 percent
Approved. (10 days)
P24-0527, Kevin Stracner / Greenberg Farrow
Application for Design Review approval to construct an approximately 140-square-foot pump room addition to the existing building and associated site improvements located at 6000 Johnson Drive.

Approved. (0 days)
P24-0564, Nikhl Chandrika Jayakumar
Application for Administrative Design Review approval for the construction of the following: 1) an approximately 495-square-foot addition on the first floor at the front of the existing residence; 2) a new front entry porch, and 3) an approximately 58-square- foot storage area on the second floor located at 3657 Shenandoah Court.

Project Information:

Existing floor area: 1,744 square feet
Total floor area with addition: 2,312 square feet
Lot size: 6,534 square feet
Existing floor area ratio: 26.69 percent
Total floor area ratio with addition: 34.04 percent
Approved. (8 days)
P24-0581, Doug Harward
Application for Administrative Design Review approval for the construction of an approximately 105-square-foot addition and an approximately 342-square-foot covered porch at the rear of the existing residence located at 3125 Berkshire Court.

Project Information:

Existing floor area: 2,985 square feet
Total floor area with addition: 3,090 square feet
Lot size: 11,307 square feet
Existing floor area ratio: 26.4 percent
Total floor area ratio with addition: 27.33 percent
Approved. (8 days)
P24-0590, Daniel Vargas / AKD Homes
Application for Administrative Design Review approval to remove the existing attached patio cover and construct a new approximately 13-foot-tall, 625-square-foot patio cover attached to the rear of the house located at 1466 Ridgewood Road.

Approved. (8 days)
Project Information: No Change.

P24-0584, Laura Cuda
Application for Administrative Design Review approval for the construction of an approximately 244-square-foot addition at the rear of the existing residence located at 1970 Harvest Road.

Project Information:

Existing floor area: 2,047 square feet
Total floor area with addition: 2,291 square feet
Lot size: 6,500 square feet
Existing floor area ratio: 31.49 percent
Total floor area ratio with addition: 35.25 percent
Approved. (12 days)

P24-0563, Kamran Dadgari
Application for Administrative Design Review approval to construct an approximately 863-square-foot single-story addition and second-story balcony to an existing home located at 3404 Vermont Place.

Project Information:

Existing floor area: 2,209 square feet
Total floor area with addition: 3,072 square feet
Lot size: 7,512 square feet
Existing floor area ratio: 29.41 percent
Total floor area ratio with addition: 40.89 percent
Approved. (14 days)
P24-0588, Tejpal Singh / Kiran Bal
Application for Administrative Design Review approval to construct an approximately 14'-4" high cabana in the rear yard located at 3553 Villero Court.

Approved. (16 days)
P24-0587, Parmdeep Singh
Application for Administrative Design Review approval to construct an approximately 448-square-foot pavilion at 1587 Germano Way.

Approved. (19 days)
P24-0632, Hereld & Ayres Architects
Application for Administrative Design Review approval to include five clearstory windows on the northeast side of the previously approved addition currently under construction (filed under P23-0862) at 4348 Second Street.

Approved. (9 days)
P24-0646, Fan Xiong
Application for Cottage Food Operation approval to prepare baked goods with direct sales to customers at 3892 Stanley Boulevard.

Approved. (7 days)
P24-0659, Leanne Cavellini
Application for Cottage Food Operation approval to prepare baked goods with direct sales to customers at 4587 Black Avenue.

Approved. (2 days)

Planning Commission, October 23, 2024

Commissioners Present: Anurag Jain, Vivek Mohan, Ken Morgan, Stephanie Wedge and Chair Matt Gaidos

Commissioners Absent: Brandon Pace
P21-1173, PUD-146 and TRACT 8631/Robson Homes
Consideration of recommendations to the City Council for: (1) the adoption of an addendum to the Downtown Specific Plan Final Environmental Impact Report; (2) approval of applications for: (a) rezoning (P21-1173) two parcels totaling approximately

2.3-acres in area from C-C (Central-Commercial) to PUD-MU (Planned Unit Development-Mixed-Use) District; (b) a certificate of appropriateness to demolish structures; (c) PUD-MU development plan (PUD-146) approval to: (1) retain the two- story single-family home and construct an approximately 1,360-square-foot two-story addition to the north side of the home; (2) demolish the detached accessory dwelling unit, Barone’s restaurant, and all other structures and site modifications; and (3) construct; i) an approximately 676-square-foot single-story detached accessory dwelling unit; ii) 14 detached single-family homes, iii) two commercial buildings totaling approximately 3,125 square feet in area with a public courtyard, new private streets, and related site improvements; and (4) a Vesting Tentative Tract Map (Tract 8631) to subdivide the 2.3 acres into 15 single-family lots, one commercial lot, and three private common space parcels.

Action Recommended: 1. Find the addendum to the Downtown Specific Plan Final Environmental Impact Report satisfies the requirements of CEQA and adopt a resolution recommending adoption of the addendum to the Downtown Specific Plan Final Environmental Impact Report (FEIR). 2. Adopt a resolution recommending approval of: (1) Rezoning (P21-1173) two parcels totaling approximately 2.3-acres in area from C-C (Central-Commercial) to PUD-MU (Planned Unit Development-Mixed- Use) District; (b) a certificate of appropriateness to demolish structures; (c) PUD-MU development plan (PUD-146) approval to: (1) retain the two-story single-family home and construct an approximately 1,360-square-foot two-story addition to the north side of the home; (2) demolish the detached accessory dwelling unit, Barone’s restaurant, and all other structures and site modifications; and (3) construct; i) an approximately 676- square-foot single-story detached accessory dwelling unit; ii) 14 detached single-family homes, iii) two commercial buildings totaling approximately 3,125 square feet in area with a public courtyard, new private streets, and related site improvements; and (4) a Vesting Tentative Tract Map (Tract 8631) to subdivide the 2.3 acres into 15 single- family lots, one commercial lot, and three private common space parcels.

Action Taken: Approve as recommended with additional recommendations that: (1) The City Council review the proposed PUD-MU permitted and conditionally permitted uses and list specific allowable uses for the commercial property; and (2) The Developer consider adding a second story or roof deck to the commercial buildings if feasible and

3) City Council consider addition of a condition of approval for a maintenance agreement for the on-site common areas .

Vote: 5-0
P24-0585, City of Pleasanton, Work Session to review and discuss draft amendments to the Objective Design Standards for Housing sites and Pleasanton Municipal Code
Work session to review and discuss amendments to the Objective Design Standards for Housing Sites and Chapter 18.84 of the Pleasanton Municipal Code.

Action Recommended: Receive presentation, review and discuss draft amendments to the Objective Design Standards for Housing Sites and Pleasanton Municipal Code.

Action Taken: Receive staff presentation, review and discuss draft amendments to Objective Design Standards for Housing Sites and Pleasanton Municipal Code.

Vote: N/A
P24-0633, Steve Elliot
Application for Administrative Design Review approval to construct an approximately 35-square-foot second-story balcony with French doors to the rear of an existing residence located at 3121 Tokay Court.

Project Information:

Existing floor area: 2,795 square feet
Total floor area with addition: 2,795 square feet
Lot size: 9,234 square feet
Existing floor area ratio: 30.27 percent
Total floor area ratio with addition: 30.27 percent

Approved. (7 days)
Prepared by: Submitted by: Approved by:

Melinda Denis
Zoning Administrator
Ellen Clark
Director of Community
Development
Gerry Beaudin
City Manager

Item #7

CITY COUNCIL AGENDA REPORT

November 19, 2024
Community Development

TITLE: INTRODUCE AN ORDINANCE APPROVING AMENDMENTS TO PLEASANTON MUNICIPAL CODE CHAPTERS 17.44 (INCLUSIONARY ZONING), 17.40 (AFFORDABLE HOUSING FEE) AND 18.38 (HOUSING OPPORTUNITY ZONE DISTRICT); AND ADOPT A RESOLUTION APPROVING AMENDMENTS TO THE OBJECTIVE STANDARDS FOR HOUSING ELEMENT SITES (CASE NO. P24- 0505)

SUMMARY
Since early 2024, the City has undertaken a comprehensive update of the Inclusionary Zoning Ordinance (IZO), Chapter 17.44 of the Pleasanton Municipal Code (PMC). In addition to updating the IZO with respect to the inclusionary rate and target affordability levels, the amendments provide much greater specificity and increased objectivity related to design and development standards for inclusionary units, and also clarify and improve the procedures, findings and requirements for projects seeking approval of alternative means to comply with the IZO. Following three City Council workshops to discuss aspects of the IZO, including review of a redline draft ordinance on October 15, 2024, and a recommendation by the Planning Commission on September 11, 2024, the amended IZO is presented to the City Council for adoption. With the IZO amendments, several related chapters of the Pleasanton Municipal Code (PMC 17.40, 18.48), and the Objective Design Standards for Housing Element Sites, are also proposed to be amended to update and align them to the amended IZO.

RECOMMENDATION
Introduce an Ordinance approving amendments to Pleasanton Municipal Code Chapters 17.44 (Inclusionary Zoning), 17.40 (Affordable Housing Fee) and 18.38 (Housing Opportunity Zone District); and adopt a resolution approving amendments to the Objective Standards for Housing Element Sites (Case No. P24-0505).

BACKGROUND
Since early 2024, City staff and a professional services team led by Economic & Planning Systems (EPS) have undertaken work to update the City’s Development Impact Fees and Affordable Housing Fees, and to update the existing Inclusionary Zoning Ordinance.

The process to update the City's Affordable Housing fee has to date been conducted in tandem with discussion of potential changes to the IZO. In particular, these discussions have focused on the inclusionary rate reflected in the IZO (i.e., the proportion of affordable units required as part of market-rate projects), and the required minimum affordability levels for inclusionary units, since those factors influence the recommended affordable housing fee amount. Amendments are also proposed to PMC Chapter 17.40 (Affordable Housing Fee), Chapter 18.38 (Housing Opportunity Zone District), and the Objective Design Standards for Housing Element Sites, to align with the amendments to the IZO and make other clarifying changes.

Three workshops have been held with the City Council to review and provide direction to staff on the content of the amended IZO on May 7, 2024, August 20, 2024, and most recently, October 15, 2024. See the October 15, 2024, Agenda Report for more information on the content and outcomes of those meetings (Attachment 3).

PLANNING COMMISSION ACTION
The Planning Commission held a public hearing on September 11, 2024, to review and provide a recommendation to City Council for adoption of the updated IZO (PMC Chapter 17.44) and related amendments to PMC Chapters 17.40 and18.38, and the 2023 Objective Design Standards for Housing Element Sites. By a 4-1 vote (Mohan voting “no”), the Planning Commission recommended that the City Council approve the amendments as recommended by staff. As described below, the Planning Commission suggested more information be provided to City Council to support recommendations concerning minimum unit sizes. This information was provided to the City Council at its October 15, 2024 meeting, along with recommended adjustments to the minimum unit sizes as reflected in the draft ordinance.

DISCUSSION
The City Council reviewed a redline draft of the proposed amendments at a workshop on October 15, 2024, at which there was discussion with staff with respect to the details of the proposed amendments, although no changes were directed by City Council. As such, please refer to the October 15, 2024, agenda report, which discusses and outlines in detail, the proposed amendments and substantive changes, including revisions made following the Planning Commission meeting and action. It should be mentioned that since the City Council reviewed the proposed amendments on October 15, 2024, minor edits were made for formatting, referencing the appropriate section under state law, and use of consistent terms and definitions in the proposed amendments.

Attachment 1 includes the text of the draft ordinance, inclusive of changes to Chapters 17.40,

17.44, and 18.38. Attachment 2 includes the resolution to amend the Objective Design Standards for Housing Element Sites document, consistent with the proposed amendments to the PMC.

In brief, amendments include the following key changes:

IZO: Modifications to Inclusionary Rate and Target Affordability For Sale / Single-Family Projects (attached and detached) • Establishes a 15% Inclusionary Rate, at 120% AMI (moderate income). This is a reduction from the current, 20% inclusionary rate.

Rental / Multifamily Projects
• Retain 15% Inclusionary requirement, at 50% AMI (very-low income) and 60% AMI (low-income).

For all residential projects, modify minimum threshold project size required to construct on-site affordable units from 15+ units to 10+ units.

IZO: Other Amendments

• Improved/more objective requirements and standards for dispersal/clustering of units • Provisions intended to provide flexibility to meet on-site affordable requirements for single-family projects with smaller and clustered units • Provisions to disallow Accessory Dwelling Units and Junior Accessory Dwelling Units from being “counted” towards IZO requirements
• Specifications for minimum unit sizes and specified bedroom mix • Improved/more objective design standards for unit comparability and design quality respective to market-rate units
• Alternative Compliance Procedure
o Alternatives to strict compliance with IZO may be allowed subject to City Council approval
o Different clustering/configuration (most preferred)
o Off-site construction
o Land dedication
o Payment of fees (least preferred)
• Improved and strengthened criteria for approval of alternative compliance proposals • Simplified approval process for projects fully compliant with requirements of the IZO, and not seeking alternative compliance.

Amendments to PMC Chapters 17.40, 18.38 and ODS for Housing Element Sites Amendments to these chapters are less substantial than those proposed to Chapter 17.44, but variously include revisions to delete redundant/overlapping requirements, modernize language, and align the PMC text to current State law and City practices (see October 15 Agenda Report for additional information).

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
The adoption of this ordinance and the amendments to the Objective Design Standards for the Housing Sites are not a project within the meaning of Section 15378 of the California Environmental Quality Act (CEQA) Guidelines because there is no potential for them to result in a physical change in the environment, either directly or indirectly. Additionally, the ordinance and amendments to the Objective Design Standards are exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility of a significant effect on the environment and they contain no provisions that will directly or indirectly result in a physical change in the environment.

EQUITY AND SUSTAINABILITY
Adopting the updated Inclusionary Zoning Ordinance and related PMC amendments helps to advance equity and sustainability goals, by improving and strengthening the ordinance and its implementing procedures to encourage the maximum production of affordable housing units, and ensure that the housing needs of Pleasanton's lower-income households are met.

OUTREACH
Notice of this public hearing was placed in The Valley Times, and interested parties requesting notification were also sent notices. Prior to this public hearing, staff provided an update to the Chamber of Commerce Economic Development and Government Relations (EDGR)

Committee on October 22; and to the Economic Vitality Committee (EVC) on October 17, 2024, regarding both the IZO and the Impact Fee update. Email notice of this November 19 meeting was also sent to a list of residential developers (both local and national firms) which was developed during the Housing Element process, and includes approximately 48 individual contacts.

STRATEGIC PLAN ALIGNMENT
Completion of these updates is consistent with the ONE Pleasanton Strategic Plan goal of Building a Community Where Everyone Belongs, Strategy 6 – Implement the Housing Element and develop a plan to end homelessness, and the 6th Cycle Housing Element Program 2.1 – Continue to implement the Inclusionary Zoning Ordinance and actively pursue strategies to improve its effectiveness in producing affordable housing units in conjunction with new development.

FISCAL IMPACT
Adopting the IZO and related Code and ODS amendments would not have a direct fiscal impact, since its provisions are intended to better align the City's requirements and standards with respect to provision of affordable housing with the City's broader housing policy goals, while ensuring those requirements are not an impediment to overall residential development that may contribute future property tax and other revenues.

Prepared by: Submitted by: Approved by:

Ellen Clark, Director of
Community Development
Ellen Clark, Director of Community
Development

Gerry Beaudin, City
Manager

Attachments:

1. Ordinance

2. Resolution

3. October 15, 2024 - Agenda Report

ORDINANCE NO.

AN O

RDINANCE OF THE CITY COUNCIL OF THE CITY OF PLEASANTON APPROVING AMENDMENTS TO CHAPTERS 17.40 (AFFORDABLE HOUSING FEE), 17.44 (INCLUSIONARY ZONING), AND 18. 38 (HOUSING OPPORTUNITY ZONE DISTRICT) OF THE PLEASANTON MUNICIPAL CODE, AS FILED UNDER CASE P24-0334
WHEREAS, on November 6, 1990, the City Council adopted Ordinance 1488, to establish Chapter 17.40 Lower-Income Housing Fee of the Pleasanton Municipal Code, which chapter was retitled in 2019 to Chapter 17.40 Affordable Housing Fee; and WHE
REAS, on November 7, 2000, the City Council of the City of Pleasanton adopted Ordinance 1818, adding Chapter 17.44 Inclusionary Zoning to the Pleasanton Municipal Code, in order to enhance the City’s ability to mitigate the effect of new market-rate development on the demand for affordable housing; and
WH
EREAS, in 2017, AB 1505 amended California Government Code Section 65850 and added Section 65850.1, to "reaffirm the authority of local jurisdictions to include within these inclusionary housing ordinances requirements related to the provision of rental units" and "does not modify or in any way change or affect the authority of local jurisdictions to require, as a condition of the development of residential units, that the development include a certain percentage of residential for -sale units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate-income, lower-income, very-low income, or extremely-low income households;" and
WHE
REAS, on December 19, 2023, the City Council adopted Ordinance 2272 to create Chapter 18.38 Housing Opportunity Zone District of the Pleasanton Municipal Code, with this chapter reflecting similar standards to those in the Objective Design Standards for Housing Element Sites; and
WHE
REAS, California Government Code Section 65580(d) states that all cities have a responsibility to use the powers vested in them to facilitate the improvement and development of housing to make adequate provision for the housing needs of all economic segments of the community; and
WHE
REAS, Program 2.1 of the 2023-2031 6th Cycle Housing Element calls for the City to continue to implement the Inclusionary Zoning Ordinance, and actively pursue strategies to improve its effectiveness in producing affordable housing in conjunction with new development, including study of potential changes to the proportion of inclusionary units required in multi- family developments, identification of a target mix of affordable units and unit size standards, and monitoring the effectiveness of the ordinance in delivering affordable units, with modifications to be evaluated to better achieve that goal; and WHE
REAS, since its adoption, the Inclusionary Zoning Ordinance has resulted in the production of hundreds of below-market-rate housing units in Pleasanton and contributed a ATTACHMENT 1

valuable source of funding to support the production of affordable housing and programs that preserve access to and support affordable housing for Pleasanton households; and W
HEREAS, in January 2024, the City retained professional services firm Economic and Planning Systems (EPS) to provide analysis and recommendations with respect to modification to the inclusionary rate and target affordability limits, and in particular to evaluate the feasibility of such changes with respect to the overall production of market-rate residential units; and W
HEREAS, the City Council held public workshops on May 7, 2024 and August 20, 2024, studied potential amendments to the inclusionary rate and required affordability levels as stated in the IZO, and provided direction on various potential amendments to the IZO; and W
HEREAS, on September 11, 2024, the Planning Commission held a duly-noticed public hearing and considered the written agenda report, relevant exhibits, direction from City Council and recommendations from City staff concerning the proposed amendments, and received testimony from interested parties, and recommended City Council approve the proposed amendments; and
NO

W, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES HEREBY ORDAIN AS FOLLOWS:

S
ection 1: Findings Pursuant to the California Environmental Quality Act (CEQA) The City Council finds the adoption of this ordinance is not a project within the meaning of Section 15378 of the California Environmental Quality Act (CEQA) Guidelines because there is no potential for it to result in a physical change in the environment, either directly or indirectly.

Additionally, the ordinance is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility of a significant effect on the environment and contains no provisions that will directly or indirectly result in a physical change in the environment.

S
ection 2: Approves Case No. P24-0334 for amendments to Pleasanton Municipal Code (PMC) Chapters 17.44 (Inclusionary Zoning), 17.40 (Affordable Housing Fee),18.38 (Housing Opportunity Zone District).

S
ection 3: This ordinance shall become effective 30 days following its passage.

The foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Pleasanton on November 19, 2024, by the following vote:

Ayes:

Noes:

Absent:

Abstain:
______________________________

Karla Brown, Mayor
AT
TEST:
____________________________

Jocelyn Kwong, City Clerk
APPR
OVED AS TO FORM:
____________________________

Daniel G. Sodergren, City Attorney

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 1

EXHIBIT A
TI
TLE 17

PLANNING AND RELATED MATTERS
Chapter 17.40

AFFORDABLE HOUSING FEES
§ 17.40.010. Purpose.

A
n affordable housing fee (previously known as the lower -income housing fee) is established as set forth in this chapter in order to assist in meeting the affordable and moderate -income housing goals as established in the general plan.
(Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)
§ 17.40.020. Definitions.

As used in this chapter:
"Commercial office or industrial development project" means any construction of a new commercial, office or industrial structure, the addition to any existing commercial, office or industrial structure, or the conversion of an existing commercial, office or industrial structure to a use classification capable of employing additional employees. "Household of moderate-income" means a household comprised of those individual or families with incomes greater than 80 percent, but less than 120 percent, of the median family income for the Standard Metropolitan Statistical Area, defined as Alameda and Contra Costa Counties for a family of four persons, adjusted up or down for larger or smaller household sizes (PMSA Median).
"Household of lower-income" means a household composed of those individuals or families with incomes no greater than 80 percent of the median family income for the Standard Metropolitan Statistical Area, defined as Alameda and Contra Costa Counties for a family of four persons, adjusted up or down for larger or smaller household sizes (PMSA Median). "Lower-income housing units" means new or rehabilitated units to be used by households of lower-income for at least 25 years and the total housing cost for each unit shall not exceed 30 percent of household income.
"Moderate-income housing units" means new or rehabilitated units to be used by households of moderate-income for at least 25 years and the total housing cost for each unit shall not exceed 30 percent of household income.
“Housing Unit, Lower-Income” means a new or rehabilitated unit to be made available at a sales price or rental cost affordable to a household whose income does not exceed 80 percent of the Area Median Income, as those terms are defined in Chapter 17.44.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 2
“Housing Unit, Moderate-Income” means a new or rehabilitated unit to be made available at a sales price or rental cost affordable to a household whose income is more than 80 percent of the Area Median Income, but does not exceed 120 percent of the Area Median Income, as those terms are defined in Chapter 17.44.
"Rehabilitated unit" means any housing unit not meeting Uniform Building Code requirements for occupancy which is improved so as to meet those requirements. "Residential development project" means the construction of a new housing unit. (Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)
§ 17.40.030. Affordable housing fee required.

A. A
ll residential and commercial office or industrial development projects not otherwise exempt shall pay a n affordable housing fee as established by separate city council resolution and which fee shall be set forth in the city's fees and charges appendix, master fee schedule, as amended.

If additional floor area is constructed for, or converted to, commercial, industrial or office use, the fee shall be applicable only to the square footage of the floor area added or to that portion of the square footage of the floor area converted for which the fee has not been paid.

B. T
he city council may adjust the fee in consideration of on-site programs promoting lower- income housing such as the dedication of land suitable for lower -income housing, or in conjunction with an alternative compliance proposal made as part of an affordable housing proposal in accordance with Chapter 17.44.
(Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)
§ 17.40.040. Exemptions.

A. T
he following are exempt from the affordable housing fee:

1. All units within a residential development project when the project has a minimum of 15 percent deed-restricted lower-income housing units;

2. Those lower-income housing units in a residential development project with less than 15 percent deed-restricted lower-income housing units;

3. Deed-restricted Moderate moderate-income housing units in residential development projects;

4. Second units and accessory dwelling units and junior accessory dwelling units as those terms are used in Section 66313 of the Government Code and Chapter 18.106;

5. Reconstruction or other new development on a site when such reconstruction replaces an equal number of square feet of floor area, as defined in the Uniform Building Code, when the use is similar, and when such reconstruction occurs within two years from the time the previous structure on the site was demolished;

6. Churches Facilities used exclusively for religious purposes as defined in California Revenue and Taxation Code Section 207.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 3
B. The project developer shall enter into a regulatory agreement with the city in order for a project to qualify for an exemption by the inclusion of lower -income or moderate-income housing units.
(Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)
§ 17.40.050. Reduction of fee—Commercial, office or industrial project.

A. The city council may reduce the required fee for a commercial, office or industrial development project when the project developer can demonstrate: (1) that the proposed use will generate substantially fewer workers than the uses which have established the fee; and (2) that the building design is unable to house another use without substantial renovation.

Examples of such uses are public utility facilities, exclusive storage buildings, etc.

B. In the event such buildings are renovated to house another use, the fee then applicable shall be due at that time.
§ 17.40.060. Commercial, office or industrial projects—Construction of lower- income housing.

Commercial, office or industrial development projects may construct lower-income housing to fulfill the requirements of this chapter in accordance with this section, and with the applicable provisions of Section 17.44.040.

A. Lower-income housing proposed to offset the requirements of this chapter must be proposed in conjunction with the commercial, office or industrial development project which would give rise to the fee and must be approved by the city council in offsetting otherwise required affordable housing fees.

B. For lower -income housing constructed on lands designated for other than residential development in the general plan as of the effective date of the ordinance codified in this chapter, the project developer shall be given a credit, for purposes of offsetting the affordable housing fee otherwise required, in an amount established by separate city council resolution and which credit amount shall be set forth in the city's master fee schedule, as amended.fees and charges appendix.

C. For lower-income housing constructed on lands designated for residential development in the general plan as of the effective date of the ordinance codified in this chapter, for each lower- income housing unit constructed beyond 15 percent of the residentia l development project, the project developer shall be given a credit for purposes of off -setting the affordable housing fee otherwise required, in an amount established by separate city council resolution and which credit amount shall be set forth in the c ity's master fee schedule, as amended. fees and charges appendix.

D. In the event the lower-income housing constructed by the developer of a commercial, office or industrial development project creates an offset of the affordable housing fee greater than the total fee required by the development project, the developer may a pply the difference to other sites then owned by the developer. This transfer shall be so noted in the regulatory agreement accompanying the project.
(Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 4
§ 17.40.070. Annual adjustment of the fee.

The affordable housing fee shall annually be revised effective January 1st of each year, commencing on January 1, 1992, by the percentage increase or decrease in the Engineering News Record Consumer Construction Price Cost Index for the San Francisco San Francisco/Oakland region Bay Area.
(Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)
§ 17.40.080. Establishment of affordable housing fund.

A. All fees generated pursuant to this chapter shall be deposited into the affordable housing fund, and any property interest or other value contributed, including interest earned by the fund, shall be segregated and used exclusively for the purposes provided for herein.

B. The city manager shall make a written annual report to the city council regarding the administration of the affordable housing fund, and shall present such annual report at a regular meeting of the city council.

C. Pursuant to Government Code Section 66000, et seq., the city shall make findings once each fiscal year with respect to any portion of the fees remaining unexpended or uncommitted in its account five or more years after the deposit of the fees to identify t he purpose to which the fee is to be put and to demonstrate a reasonable relationship between the fee and the purpose for which it was charged. The findings required by this section need only be made for moneys in the possession of the city and need not be made with respect to letters of credit, bonds or other instruments taken to secure payment of the fee at a future date.

D. Any refunds shall be made pursuant to Government Code Section 66001. (Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)

§ 17.40.090. Use of affordable housing fund.

A. Any moneys monies generated by this chapter shall be used in accordance with and in support of activities to administer and implement the city's adopted housing element and other policies and programs specifically related to affordable housing as may be approved or authorized by the city council . Activities may include, but are not limited to, land acquisition, construction, rehabilitation, subsidization, and counseling or assistance to other governmental entities, private organizations, or individuals to expand housing opportunities to lower-income households.

B. Moneys Monies in the affordable housing fund may be disbursed, hypothecated, collateralized, or otherwise employed for the purposes set forth herein. These purposes include, but are not limited to, assistance to housing development corporations, equity participation loans, grants, development loan funds, participation leases, loans to develop affordable housing or other public/private partnership arrangements. The affordable housing fund may be used for the benefit of both rental or owner-occupied housing.

C. When the city uses affordable housing fund monies eys to construct or assist in the construction of lower -income units, the city may establish the rules which will apply to

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 5
occupancy of said units. It is the intention of this chapter and the general plan that such units be made available on a priority basis to Pleasanton residents and workers.

D. The city council may use affordable housing fund moneys monies for moderate-income housing as determined necessary and desirable to meet general plan goals and policies. (Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)
§ 17.40.10

0. Time of payment.

Affordable housing fees shall be paid at the time of issuance of a building permit for the residential unit and/or for the commercial, office or industrial development project giving rise to the fee, unless otherwise determined by the city.
(Ord. 1488 § 1, 1990; Ord. 2192 § 2, 2019)

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 6
Chapter 17.44

INCLUSIONARY ZONING

Article I
General Provisions
§ 17.44.010. Title.

This chapter shall be called the "Inclusionary Zoning Ordinance of the City of Pleasanton." (Ord. 1818 § 1, 2000)
§ 17.44.020. Purpose.

The purpose of this chapter is to enhance the public welfare, to and assure that market-rate further housing development mitigates its impacts on the demand for affordable housing, and to attain attains the city's affordable housing goals by increasing the production of residential units affordable to households of very low, low, and moderate income, and by providing funds for the development of very low, low, and moderate income ownership and/or rental housing and for housing-related programs that benefit very-low, low, and moderate income households. In order to assure that the remaining developable land is utilized in a manner consistent with the city's housing policies and needs, 15 percent of the total number of units of all new multiple-family residential projects containing 15 or more units, constructed within the city as it now exists and as may be altered by annexation, shall be affordable to very low and low income households. For all new single-family residential projects of 15 units or more, at least 20 percent of the project's dwelling units shall be affordable to very low, low, and/or moderate income households. These requirements shall apply to both ownership and rental projects.
(Ord. 1818 § 1, 2000)
§ 17.44.030. Definitions.

For the purposes of this chapter, certain words and phrases shall be interpreted as set forth in this section unless it is apparent from the context that a different meaning is intended. “Affordable Housing Fee.” A fee paid to the city by an applicant for a project in the city in accordance with Chapter 17.40, in lieu of providing the inclusionary units required by this chapter.
"Affordable housing proposal." A proposal submitted by the project owner as part of the city development application (e.g., design review, planned unit development, etc.) stating the method by which the requirements of this chapter are proposed to be met. "Affordable rent." A monthly rent (including utilities as determined by a schedule prepared by the city) which does not exceed a maximum rent that will be affordable to the specified household at the specified income level, calculated in accordance with California Health and

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 7
Safety Code section 50053, as amended.one-twelfth of 30 percent of the maximum annual income for a household of the applicable income level.
"Affordable sales price." A sales price that which results in a monthly housing costs, mortgage payment (including principal and interest) which may include taxes, insurance, homeowners association dues (if any), and utility costs as determined by the city, which does not exceed a maximum sales price that will be affordable to the specified household at the specified income level, calculated in accordance with California Health & Safety Code section 50052.5, as amended. one-twelfth of 35 percent of the maximum annual income for a household of the applicable income level.
"Amenities, Interior." Interior features which are not essential to the health and safety of the resident, but provide visual or aesthetic appeal, or are provided as conveniences rather than as necessities. Interior amenities may include, but are not limited to, fireplaces, garbage disposals, dishwashers, cabinet and storage space and bathrooms in excess of one. Amenities shall in no way include items required by city building codes or other ordinances that are necessary to ensure the safety of the building and its residents. “Amenities, Shared.” Facilities and amenities within the project that are available for the shared and/or general use of residents of the project, including but not limited to shared recreation and other facilities (e.g. gym or pool, clubhouse, meeting room, co-working space, laundry, barbeque area, etc.).
."Applicant." Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which seeks city permits and approvals for a project. “Area Median Income (AMI).” Median income for Alameda County, adjusted for household size, as published pursuant to California Code of Regulations, Title 25, Section 6932 and California Health and Safety Code section 50093 as may be amended. "City." The city of Pleasanton or its designee or any entity with which the city contracts to administer this chapter.
"Commercial, office, and industrial project." For the purposes of this chapter, any new nonresidential (commercial, office, or industrial) development or redevelopment greater than 10 gross acres or 250,000 square feet of gross building area, whichever is less. "Dwelling unit." A dwelling designed for occupancy by one household. "HUD." The United States department of housing and urban development or its successor. "Household." One person living alone; or two or more persons sharing residency whose income is considered for housing payments.
"Household, low income." A household whose annual income is more than 50 percent but does not exceed 80 percent of the AMI annual median income for Alameda County, based upon the annual income figures provided by the U.S. department of housing and urban development (HUD), as defined by this chapter. adjusted for household size.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 8
"Household, moderate income." A household whose annual income is more than 80 percent but does notnote exceed 120 percent of the AMIannual median income for Alameda County, based upon the annual income figures provided by HUD, as defined by this chapter. "Household, very low income." A household whose annual income does not exceed 50 percent of the AMI annual median income for Alameda County, based upon the annual income figures provided by HUD, as defined by this chapter.
"Inclusionary unit." A dwelling unit as required by this chapter which is rented or sold at affordable rents and/or affordable sales prices (as defined by this chapter) to very low, low, or moderate income households.
"Inclusionary unit credits." Credits approved by the city council in the event a project exceeds the total number of inclusionary units required in this chapter. Inclusionary unit credits may be used by the project owner to meet the affordable housing requirements of another project subject to approval by the city council.
"Income." The gross annual household income as defined by HUD. "Life of the inclusionary unit." The term during which the affordability provisions for inclusionary units shall remain applicable. The affordability provisions for inclusionary units shall apply in perpetuity from the date of occupancy, which shall be the date the city of Pleasanton performsapproves final inspection for the building permit. "Lower income housing fee." A fee paid to the city by an applicant for a project in the city, in lieu of providing the inclusionary units required by this chapter. “Market-rate units.” means new living units in residential projects which are not rented or sold at affordable rents or affordable sales prices, as defined in this chapter. "Median income for Alameda County." The median gross annual income in Alameda County as determined by HUD, adjusted for household size.
"Off-site inclusionary units." Inclusionary units constructed within the city of Pleasanton on a site other than the site where the applicant intends to construct market rate units. "Ownership units." Inclusionary units developed as part of a residential development which the applicant intends will be sold, or which are customarily offered for individual sale. "Project." A residential housing development at one or more location(s) or site(s) includingall dwelling units for which permits have been applied for or approved. "Project owner." Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which holds fee title to the land on which the project is located.
"Property owner." The owner of an inclusionary unit, excepting a "project owner." "Recapture mechanisms." Legal programs and restrictions by which subsidies provided to inclusionary units will be controlled and repaid to the city and/or other entity upon resale, to ensure the ongoing preservation of affordability of inclusionary units or to ensure funds for inclusionary units remain within the city's affordable housing program.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 9
"Rental units." Inclusionary units which the applicant intends will be rented or leased, or which are customarily offered for lease or rent.
“Residential project, rental.” A residential project or portion thereof, that creates one or more units that cannot be sold individually, except that construction of any accessory dwelling unit shall not be considered a rental project.
“Residential project, for sale.” A residential project, or portion thereof, that includes the creation of one or more residential living units that may be sold individually, including a condominium, stock cooperative, community apartment, or attached or detached single-family home. A for-sale project also includes a residential condominium conversion project and the creation of residential living units that may be sold individually, but are initially rented rather than sold.
"Resale restrictions." Legal restrictions which restrict the price of inclusionary units to ensure that they remain affordable to very low, low, and moderate income households on resale. "Residential project, multiple-family." A residential project consisting of condominiums, apartments, and similar dwellings attached in groups of four or more units per structure and including multiple units located on a single parcel of land under common ownership. "Residential project, single-family." A residential project consisting of detached and attached single-family homes, including paired single-family, duets, duplexes, townhomes, and similar unit types where each unit is located on a separate parcel of land. "Unit type." Various dwelling units within a project which are distinguished by number of bedrooms and/or the type of construction (e.g., detached single-family, duets, townhomes, condominiums, apartments).
(Ord. 1818 § 1, 2000)

Article II
Zoning Requirements
§ 17.44.040. General requirements/applicability.

A. Applicability. The Inclusionary Housing Requirements of this chapter shall apply to all new residential for-sale and rental projects, including mixed residential and non-residential projects, consisting of ten (10) or more residential units or parcels. The project unit count used to determine applicability of this chapter shall be exclusive of any Accessory Dwelling Units or Junior Accessory Dwelling Units.

A. Residential Development. For all new multiple-family residential projects of 15 units or more, at least 15 percent of the project's dwelling units shall be affordable to very low, and/ or low income households. For all new single- family residential projects of 15 units or more, at least 20 percent of the project's dwelling units shall be affordable to very low, low, and/or moderate income

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 10
households. These dwelling units shall be referred to as "Inclusionary Units".

Special consideration will be given to projects in which a significant percentage of the inclusionary units are for very low and low income households. The specific mix of units within the three affordability categories shall be subject to approval by the city.

The inclusionary units shall be reserved for rent or purchase by eligible very low, low, and moderate income households, as applicable. Projects subject to these requirements include, but are not limited to, single-family detached dwellings, townhomes, apartments, condominiums, or cooperatives provided through new construction projects, and/or through conversion of rentals to ownership units.

The percentage of inclusionary units required for a particular project shall be determined only once on a given project, at the time of tentative map approval, or, for projects not processing a map, prior to issuance of building permit. If the projectsubdivision design changes, which results in a change in the number of inclusionary unitsunit types required, the number of inclusionary units required shall be recalculated to coincide with the final approved project. In applying and calculating the number of inclusionary units required based on the specified percentage15 percent requirement, any decimal fraction less than or equal to

0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be construed as one unit.

B. Residential For-Sale Projects. For all new for-sale residential project, and where the project would include 10 residential units or more, at least fifteen (15) percent of the project's dwelling units shall be affordable to very-low, low- or moderate- income households as specified. These units shall be referred to as “Inclusionary Units.” The applicant shall not be prohibited from deepening the level of affordability in the project listed in subsection 1 below. The Inclusionary Units shall be reserved for purchase by eligible households, in the following proportions. The applicant shall not be prohibited from deepening the level of affordability in the project:

1. 100 percent of the inclusionary units at a sales price affordable to a household whose income is no more than 120% of the Area Median Income.

C. Residential Rental Projects. For all new residential rental projects, including where the rental units are part of a mixed use projects, and where the project would include 10 residential units or more, at least 15 percent of the project’s dwelling units shall be affordable to very-low [and/] or low-income households as specified. These units shall be referred to as “Inclusionary Units.” The applicant is not precluded from deepening the level of affordability in the project listed in subsection 1 and 2 below. The Inclusionary Units shall be reserved for rent to eligible households within each income category as specified, in the following proportions. The applicant is not precluded from deepening the level of affordability in the project:

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 11

1. 50 percent of the inclusionary units at a sales price affordable to a household whose income is no more than 50% of the Area Median Income.

2. 50 percent of the inclusionary units at a sales price affordable to a household whose income is no more than 60% of the Area Median Income

D. Commercial, Office, and Industrial (COI) Development. COI projects shall be subject to the affordable housing In lieu of paying the lower income fee as set forth in Chapter 17.40. In lieu of paying the affordable housing fee, COI developments as defined in this chapter city Ordinance No. 1488, COI development may provide rental or for-sale affordable housing consistent with this chapter, and with the requirements of Section 17.40.060. A COI development proposing to provide affordable housing in lieu of paying the fee shall . As a result, new COI developments are strongly encouraged to submit an affordable housing proposal as set forth in Section 17.44.090 of this chapter.

Upon submittal of the affordable housing proposal, city staff will meet with the developer to discuss the potential for providing incentives to encourage on-site construction of affordable housing units and alternatives to constructing affordable units as set forth in this chapter. In the event a developer requests incentives or alternatives as a means of providing affordable housing in connection with a COI development, the affordable housing proposal will be reviewed as set forth in Section 17.44.090 of this chapter. COI development not pursuing the inclusion of affordable housing shall be subject to the lower income fees as set forth in city ordinance 1488.

E. Residential projects with fewer than ten (10) dwelling units shall be subject to the affordable housing fee as set forth in Chapter 17.40.
(Ord. 1818 § 1, 2000)
§ 17.44.050. Inclusionary unit provisions and specifications.

A. For those projects with both market-rate and inclusionary units, the inclusionary units shall be dispersed throughout the project so as not to concentrate inclusionary units in a specific geographic area (including a floor) of the project, except as provided in this section. The inclusionary units shall be located in comparable locations to the market- rate units, and shall be located on each floor, and throughout the site such that a) a proportionate number of inclusionary units are located on each floor of a multi-story apartment or condominium building, and that within such buildings no more than 20 percent of units are located adjacent to one another; b) no more than 20 percent of the units are located adjacent to one another in a single-family detached project and c) in developments containing more than one multi-unit structure, including groups of attached townhomes, condominiums or apartments, no more than 50 percent of the proposed inclusionary units are consolidated into one structure.

1. For a project where the market rate units are proposed to be detached single- family homes, it is permitted for the inclusionary units to be paired single-family,

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 12
duets, duplexes, or townhomes. In such case, the townhomes, duets, or duplexes shall be dispersed throughout the project.

2. For a project where the market rate units are proposed to be attached or detached single-family homes, duets, or duplexes (or a combination thereof), it is permitted for the inclusionary units to be ownership condominiums or rental apartments, with such units also dispersed throughout the project. This provision shall not apply to affordable units that are financed with low-income tax credits.

3. Clustering of inclusionary units in a manner other than that specified in this section may be allowed subject to City Council approval, as specified in Section

17.44.080, Alternative Means of Compliance.

B. Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) shall not be permitted to satisfy the requirements of this Inclusionary Zoning Ordinance. This provision shall not be construed to discourage, prohibit or disallow the provision of ADUs and JADUs as a component of a market-rate residential project, in addition to any required inclusionary units.

C. Inclusionary units shall be equivalent in exterior appearance and overall quality of construction to market-rate units in the housing development.

A. Inclusionary units shall be dispersed throughout the project unless otherwise approved by the city.

B. Inclusionary units shall be constructed with identical exterior materials and an exterior architectural design that is consistent with the market rate units in the project.

D. Inclusionary units may be of smaller size than the market-rate units in the project, subject to the following limitations:

1. For for-sale units, the living area of each inclusionary units may be up to 50 percent smaller than the size of the average market rate unit in the project.

2. For rental units, the living area of each inclusionary unit shall be as follows: (1) a studio shall be at least 450 net square feet; (2) a one-bedroom unit shall be at least 550 net square feet; (3) a two-bedroom unit shall be at least 750 net square feet; (4) a three bedroom unit shall be at least 1,000 net square feet; and (5) for units with more than three bedrooms an additional 200 net square feet for each additional bedroom.

E. Inclusionary units . Inclusionary units addition, inclusionary units may have fewer interior amenities than the market rate units in the project, except that inclusionary units shall have air-conditioning, enclosed garages, and laundry facilities to the extent the market-rate units have those amenities. Interior finishes and amenities must be equivalent to those provided in the base model market-rate units.

F. The residents of the inclusionary units shall have the same access to shared common areas, open space, parking, storage and other amenities as the market-rate residents when located in the same building or on the same site.

G. Bedroom Mix:

H. The project shall comply with the following . However, the city may require that the inclusionary units meet certain minimum standards with respect to the bedroom mix of

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 13
. These standards shall be set forth in the affordable/inclusionary units: housing agreement for the project.
i. For for-sale projects, the average number of bedrooms per unit for all affordable units in the project shall equal the average number of bedrooms for all other units in the project, up to a limit of three bedrooms per unit; ii. For rental projects, a minimum of 10 percent of the total affordable units shall be three-bedroom units; a minimum of 40 percent of the total affordable units shall be two-bedroom units; and the remaining affordable units shall be studio or one-bedroom units except that no more than 10% of units may be studios. Age-restricted projects shall not be required to provide three-bedroom units, and may instead provide additional studio, one- or two-bedroom units in lieu of the required three-bedroom units.

This provision shall not apply to affordable units that are financed with low-income tax credits. The director of community development may approve deviations from the specified bedroom mix for projects with 10 or fewer inclusionary units, except that at least 50 percent of units shall have at least two bedrooms if the market rate project also provides units of that size.

I. Inclusionary units shall remain affordable in perpetuity from the date of occupancy, which shall be the date the city of Pleasanton approves performs final inspection for the building permit, through recordation of an affordable housing agreement as described in Section 17.44.060 of this chapter.

J. All inclusionary units in a project shall be constructed concurrently with, within or prior to, the construction of the project's market rate units, unless an alternative schedule for construction is approved by the city council in accordance with Section

17.44.080 below. “Concurrently” means that all inclusionary units shall be built prior to the full build-out of market rate units in the same residential development project. In phased developments, inclusionary units shall be constructed and occupied in proportion to the number of market rate units constructed and occupied in each phase as follows:.

1. A building permit may not be issued for any market rate unit unless a proportional number of building permits has been issued for inclusionary units; and

2. A certificate of occupancy or final inspection may not be issued for market rate units unless a proportional number of certificates of occupancy or final inspections have been issued for inclusionary units.

K. For purposes of calculating the affordable rent or affordable sales price of an inclusionary unit, the following household size assumptions shall be used for each applicable dwelling unit type:

Unit Size
HUD Income Category by
Household Size
Studio unit 1 person
1 bedroom unit 2 persons

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 14
2 bedroom unit 3 persons
3 bedroom unit 4 persons
4 or more bedroom unit 5 or more persons
L. The city's adopted preference and priority system shall be used for determining eligibility among prospective beneficiaries for affordable housing units created through this inclusionary zoning ordinance.
(Ord. 1818 § 1, 2000)
§ 17.44.060. Affordable housing agreement.

An affordable housing agreement shall be entered into by the city and the project owner. The agreement shall record the method and terms by which a project owner shall comply with the requirements of this chapter. The approval and/or recordation of this agreement shall take place prior to final map approval or, where a map is not being processed, prior to the issuance of building permits for such lots or units.

The affordable housing agreement shall state the methodology for determining a unit's initial and ongoing rent or sales and resale price(s), any resale restrictions, occupancy requirements, eligibility requirements, city incentives including second mortgages, recapture mechanisms, the administrative process for monitoring unit management to assure ongoing affordability and other matters related to the development and retention of the inclusionary units.

In addition to the above, the affordable housing agreement shall set forth any waiver of the affordable lower income housing fee. For projects which meet the affordability threshold with very low and/or low-income units, all units in the project shall be eligible for a waiver of the affordablelower income housing fee. For single-family ownership residential projects which meet the affordability threshold with moderate income units, or multiple-family residential projects which do not meet the affordability threshold, only the inclusionary units shall be eligible for a waiver of the affordable lower income housing fee except as otherwise approved by the city council.

To assure affordability in accordance with the terms of this chapter and over the life of the unit (i.e. in perpetuity), the affordable housing agreement shall be recorded with the property deed or other method approved by the city attorney. In the event an inclusionary unit is affordable by design the affordable housing agreement shall stipulate the method for assuring that the units retain their affordability as the housing market changes.

The community development director may waive the requirement for an affordable housing agreement for projects approved prior to the effective hereof and/or for projects that have their affordable housing requirements included in a development agreement or other city document. (Ord. 1818 § 1, 2000; Ord. 2000 § 1, 2009)
If a project is permitted to pay the affordable housing fee to meet the requirements of this Chapter, pursuant to Sections 17.44.040.D, 17.44.040.E, or Section 17.44.080, an affordable housing agreement shall not be required. In the case of approval pursuant to Section 17.44.080, such provision shall be includedreflected in a resolution for approval adopted by city council.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 15
(Ord. 1818 § 1, 2000; Ord. 2000 § 1, 2009)
§ 17.44.070. Incentives to encourage on- site construction of inclusionary units.

The city shall consider making available to the applicant incentives to increase the feasibility of residential projects to provide inclusionary units. Incentives or financial assistance will be offered only to the extent resources for this purpose are available and approved for such use by the city council or city manager, as defined below, and to the extent that the project, with the use of incentives or financial assistance, assists in achieving the city's housing goals. However, nothing in this chapter establishes, directly or through implication, a right of an applicant to receive any assistance or incentive from the city.

Any incentives provided by the city shall be set out in the affordable housing agreement pursuant to Section 17.44.060 of this chapter. The granting of the additional incentives shall require demonstration of exceptional circumstances that necessitate assistance from the city, as well as documentation of how such incentives increase the feasibility of providing affordable housing.

The following incentives may be approved for applicants who construct inclusionary units on- site:

A. Fee Waiver or Deferral. The city council, by resolution, may waive or defer payment of city development impact fees and/or building permit fees applicable to the inclusionary units or the project of which they are a part. Fee waivers shall meet the criteria included in the city's adopted policy for evaluating waivers of city fees for affordable housing projects. The affordable housing agreement shall include the terms of the fee waiver.

B. Design Modifications. The granting of design modifications relative to the inclusionary requirement shall require the approval of the city council and shall meet all applicable zoning requirements of the city of Pleasanton. Modifications to typical design standards may include the following:

1. Reduced setbacks;

2. Reduction in infrastructure requirements;

3. Reduced open space requirements;

4. Reduced landscaping requirements;

5. Reduced interior or exterior amenities;

6. Reduction in parking requirements;

7. Height restriction waivers.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 16
C. Second Mortgages. The city may utilize available affordable lower income housing funds for the purpose of providing second mortgages to prospective unit owners or to subsidize the cost of a unit to establish an affordable rent or an affordable sales price. Terms of the second mortgage or subsidy shall be stated in the affordable housing agreement. The utilization of these incentives shall not be the sole source of providing the inclusionary units and they are intended to augment the developer's proposal.

D. Priority Processing. After receiving its discretionary approvals, a project that provides inclusionary units may be entitled to priority processing of building and engineering approvals subject to the approval of the city manager. A project eligible for priority processing shall be assigned to city engineering and/or building staff and processed in advance of all nonpriority items.
(Ord. 1818 § 1, 2000)

§ 17.44.080. Alternative Means of Compliance Alternatives to constructing inclusionary units on-site.

In general, and where specified by this chapter, projects shall be required to construct inclusionary units on-site andThe primary emphasis of this inclusionary zoning ordinance is to achieve the inclusion of affordable housing units to be constructed in conjunction with market rate units within the same project in all new residential projects.

However, pursuant to state law and in the interests of avoiding undue impediments to housing production, the city acknowledges that it may be beneficial to provide alternative means of compliance with this chapter. not always be practical to require that every project satisfy its affordable housing requirement through

A. Provisions Applicable to All Alternatives

1. Approval of any alternative proposal is subject to city council review and approval, based on the criteria and findings set forth in subsections B through H as applicable.

2. The applicant shall bear the burden of providing substantial evidence to support the findings set forth in this section, and to support the feasibility of any proposed alternative. The applicant shall set forth the factual and legal basis for any request under this section.

3. Any request under this section shall be submitted to the director of community development together with an economic analysis, if required, or other supporting documentation.

4. The city council may approve or conditionally approve any alternative set forth in this section if it makes all of the following findings and any additional findings required for the selected alternative:
a. It is not feasible or desirable to accommodate the inclusionary units on site, or to otherwise construct the units in strict accordance with the requirements of this chapter, due to specific site conditions or constraints, project location, or other unique characteristics of the project or project site.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 17
b. The number of affordable units provided by the alternative equals or exceeds that provided by the on-site units or by the payment of the Affordable Housing Fee, as applicable to the project;
c. The level of affordability provided by the alternative is the same or lower (i.e. has “deeper” affordability) as provided by on-site units or the payment of fees, as applicable;
d. The alternative is consistent with the general plan and housing element, and the provisions of this chapter.

B. Alternative Proposals
If the provision of on-site affordable units under Section 17.44.040.B. or C. is financially or otherwise infeasible, an applicant for a residential project may request, in order of priority: 1) alternative on-site unit type, size, configuration or clustering of units in a manner other than that specified in subsection 17.44.050, as provided in Subsection C below; 2) provide off-site units as provided in subsection D, below; 3) dedicate land for affordable housing as provided in subsection E, below; 4) pay the affordable housing fee as set forth in Chapter 17.40 and in Subsection F, below. The applicant must demonstrate, through provision of substantial evidence as described in Section A, above, that each of the higher priority options is infeasible before the city will consider a lower-priority option.

1. Notwithstanding Section 17.44.080 A.4., the city council may accept fees in lieu of the alternatives in Subsection B., above, provided it makes a finding that special circumstances justify payment of fees over provision of units.

C. Alternative unit type, size, configuration or clustering of units.

1. An applicant may propose alternatives for the on-site units that deviate from the strict standards of this chapter with respect to unit size, bedroom mix, clustering, unit type, and interior amenities of the affordable units.

2. Proposed units shall comply with requirements of the Building Code and Fire Code, and in no circumstance shall otherwise required amenities be waived that are necessary to ensure the health, safety and welfare of the building and its residents.

3. Alternative on-site locations or clustering of affordable units shall provide equivalent access to shared amenities within the project, unless the affordable units would have suitable alternative shared amenities available for the exclusive use of the residents of the affordable units.

D. Off-Site Projects. Upon approval by the city council, Inclusionary inclusionary units required pursuant to this chapter may be permitted to be constructed at a location within the city other than the project site. Any off-site inclusionary units must meet the following criteria:

1. The off-site inclusionary units must be determined to be consistent with the city's goal of creating, preserving, maintaining, and protecting housing for very low, low, and moderate income households.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 18

1. The off-site inclusionary units must not result in a significant concentration of inclusionary units in any one particular neighborhood or tend to cause residential segregation.

2. The off-site location is suitable for the proposed affordable housing, and the off-site inclusionary units shall conform to the requirements of all applicable city ordinances and standards, and the provisions of this chapter.

2. The occupancy and rents of the off-site inclusionary units shall be governed by the terms of a deed restriction, and if applicable, a declaration of covenants, conditions and restrictions similar to that used for the on-site inclusionary units.

3. The affordable housing agreement shall stipulate the terms by whichof the off -site inclusionary units will be built. Construction of the off-site affordable units shall occur concurrently with construction of the market-rate units in the residential project, unless otherwise approved by the city council. If the construction does not take place at the same time as construction of the market-rate unitsproject development, the agreement shall require the units to be produced constructed within a specified time frame, but in no event longer than fivetwo years after the first building permit is issued for the market-rate project. A cash deposit, or bond or other financial security may be required by the city, refundable upon construction, as assurance that the units will be built.

5. Off-site construction of affordable units does not qualify the residential project for a density bonus or other regulatory incentives allowed by Government Code Section 65915 unless the off-site development includes the dedication of land conforming to the provisions of Section 65915(g). No off-site alternative may be approved by the city if a density bonus or other regulatory incentive is requested for the site on which the affordable housing is to be built. Any off-site alternative must comply with the density, intensity and other development standards that are permitted under the zone for the site.

E. Land Dedication. Upon approval by the city council An, an applicant may dedicate land to the city or a qualifiedlocal nonprofit housing developer in place of actual construction of inclusionary units upon approval of the city council. The intent of allowing a land dedication option is to provide the city or a local nonprofit housing developer the free land needed to make an inclusionary unit development feasible, thus furthering the intent of this chapter. The following criteria shall be met for any dedication of land:

1. The dedicated land must be appropriately zoned, buildable, free of toxic substances, and contaminated soils, or geologic or other physical constraints that make it unsuitable for residential development.

2. The developable area of the site isand large enough to accommodate the number of inclusionary units required for the project. The city's acceptance of land dedication shall require that the lots be fully improved, with infrastructure, adjacent utilities, grading, and fees paid.

3. The land is appraised by the c ity at a value equal to or greater than the in-lieu-fee in place at time of the market-rate project application, multiplied by the number of required inclusionary units that would be satisfied by construction of units on the land to be

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 19
dedicated. If the appraised value is less than the in-lieu fee, the developer shall be subject to payment of the difference as a cash contribution to the Affordable Housing Fund.

F. Affordable Housing Fee. In lieu of providing inclusionary units in a project, the city council may approve payment of the city's affordable housing fee, as set forth in Chapter

17.40 of this title. Such alternative shall only be approved if the city council determines that:

1. The proposal would be consistent with and further the purpose of this chapter, as set forth in Section 17.44.020.

2. Greater benefit would accrue to the City’s with respect to furthering affordable housing and the ability to provide housing affordable to all segments of the community through payment of the fee, versus requiring construction of the units on-site.

3. Projects requesting a density bonus, incentive or concession, waiver, or parking ratio under Government Code Section 65915 or Chapter 17.38 of the Pleasanton Municipal Code shall not be permitted to pay in-lieu fees as an alternative to satisfying the affordable housing requirements of this Chapter. Payment of fees in lieu of providing affordable units under Chapter 17.44 of the Code does not qualify a housing development for a density bonus.

G. Credit Transfers. In the event a project exceeds the total number of inclusionary units required in this chapter, the project owner may request inclusionary unit credits which may be used to meet the affordable housing requirements of another project. Inclusionary unit credits are issued to and become the possession of the project owner and may not be transferred to another project owner without approval by the city council. The number of inclusionary unit credits awarded for any project is subject to approval by the city council.

H. Other Alternate Methods of Compliance. Applicants may propose other creative concepts for meeting the requirements of this chapter, in order to bring down the cost of providing inclusionary units, whether on- or off-site. The city council may approve such alternate methods of compliance with this chapter if the applicant demonstrates that such alternate method meets the purpose of this chapter (as set forth in Section 17.44.020 of this chapter).

I. Lower Income Housing Fee Option. In lieu of providing inclusionary units in a project, an applicant may pay the city's lower income housing fee as set forth in Chapter 17.40 of this title.
(Ord. 1818 § 1, 2000)

Article III
Miscellaneous
§ 17.44.090. Administration.

An applicant of a project subject to this chapter shall submit an affordable housing proposal stating the method by which it will meet the requirements of this chapter. The affordable

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 20
housing proposal shall be submitted as part of the applicant's city development application (e.g., design review, planned unit development, etc.) to the planning division in a form approved by the city manager. The community development director may waive the requirement for submittal of an affordable housing proposal for projects approved prior to the effective date hereof and/or for projects that have undergone considerable public review during which affordable housing issues were addressed.

A. R
eview and approval of the affordable housing proposal shall occur as follows: A proposal that is fully compliant with the requirements of this chapter, and does not include any request for alternative compliance, shall be subject to review and approval by the body responsible for review and approval of the related residential development application. Where the zoning administrator or planning commission is are the approving body, such action shall be subject to appeal in accordance with the provisions of Chapter 18.144.

B. Any affordable housing proposal that includes an alternative compliance method, or that deviates from the standards set forth in this chapter, shall be subject to city council review and approval. In such cases tThe affordable housing proposal shall be reviewed by the city's planninghousing commission at a properly noticed meeting open to the public. The planninghousing commission shall make recommendations to the city council either accepting, rejecting or modifying the developer's proposal and/or the utilization of any incentives as outlined in this chapter. The planninghousing commission may also make recommendations to the city council planning commission regarding the proposalproject as necessary to assure conformance with this chapter.

C. The approving body, as applicable,Acceptance of the applicant's affordable housing proposal is subject to approval by the city council, which may direct the city manager to execute an affordable housing agreement in a form approved by the city attorney. The city manager, or his or her designee, shall be responsible for monitoring the sale, occupancy and resale of inclusionary units.

D. Amendment. Minor modifications to an approved affordable housing agreement may be granted by the director of community development, if the modifications substantially comply with the original affordable housing agreement. All oOther modifications to the affordable housing agreement shall be processed in the same manner as the original affordable housing proposal.
(Ord. 1818 § 1, 2000; Ord. 2000 § 1, 2009)
§ 17.44.100. Conflict of interest.

The following individuals are ineligible to purchase or rent an inclusionary unit: (a) city employees and officials (and their immediate family members) who have policymaking authority or influence regarding city housing programs; (b) the project applicant and its officers and employees (and their immediate family members); and (c) the project owner and its officers and employees (and their immediate family members). (Ord. 1818 § 1, 2000)

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 21
§ 17.44.110. Enforcement.

The city manager is designated as the enforcing authority. The city manager may suspend or revoke any building permit or approval upon finding a violation of any provision of this chapter. The provisions of this chapter shall apply to all agents, successors and assigns of an applicant. No building permit or final inspection shall be issued, nor any development approval be granted which does not meet the requirements of this chapter. In the event that it is determined that rents in excess of those allowed by operation of this chapter have been charged to a tenant residing in an inclusionary unit, the city may take appropriate legal action to recover, and the project owner shall be obligated to pay to the tenant, or to the city in the event the tenant cannot be located, any excess rents charged. (Ord. 1818 § 1, 2000)

§ 17.44.120. Appeals.

Any person aggrieved by any action or determination of the city manager under this chapter, may appeal such action or determination to the city council in the manner provided in Chapter

18.144 of this code.
(Ord. 1818 § 1, 2000)

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 22
TITLE 18
ZONING

CHAPTER 18.38 HOZ HOUSING OPPORTUNITY ZONE DISTRICT

Article I General Provisions
§ 18.38.010 Title.
§ 18.38.020 Purpose.
§ 18.38.030 Definitions.

Article II Requirements
§ 18.38.040030 General applicability and development standards. § 18.38.045 Inclusionary unit provisions and specifications. § 18.38.050 Affordable housing agreement.

Article III Miscellaneous
§ 18.38.060 Administration.
§ 18.38.070 Enforcement.
§ 18.38.080040 Appeals.

Article I
General Provisions

§ 18.38.010. Title.

This chapter shall be called the "Housing Opportunity Zone (HOZ) District" ordinance of the city of Pleasanton.
(Ord. 2272, 12/19/2023)
§ 18.38.020. Purpose.

The purpose of this chapter is to enhance the public welfare and ensure further housing development attains the city's housing goals, including affordable housing, by increasing the production of residential units for all income levels. To ensure the remaining developable land is utilized in a manner consistent with the city's housing policies and needs, this HOZ district is created to allow new or expanded affordable housing development opportunities to all applicable parcels as specified in the city's Housing Element of the General Plan. These new or expanded opportunities shall apply to both ownership and rental projects.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 23
(Ord. 2272, 12/19/2023)
§ 18.38.030. Definitions.

For the purposes of this chapter, certain words and phrases shall be interpreted as set forth in this section unless it is apparent from the context that a different meaning is intended. "Affordable housing fee" means the fee set forth in Chapter 17.40 paid to the city by an applicant for a project in lieu of providing the inclusionary units required by this chapter. "Affordable housing proposal" means a proposal submitted by the project owner as part of the city development application (e.g., housing site compliance review, design review, planned unit development, etc.) stating the method by which the requirements of this chapter are proposed to be met. This information may be provided as part of an affordable housing agreement as provided in Section 18.38.050.
"Applicant" means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which seeks city permits and approvals for a project. "City" means the city of Pleasanton or its designee or any entity with which the city contracts to administer this chapter.
"HUD" means the United States Department of Housing and Urban Development or its successor. "Household" means one person living alone, or two or more persons sharing residency whose income is considered for housing payments.
"Inclusionary unit" means a dwelling unit as required by this chapter which is rented or sold at affordable rents and/or affordable sales prices (as defined by this chapter) to very low-, low-, or moderate-income households.

"Income" means the gross annual household income as defined by HUD.

Income Levels.

1. "Household, low income" means a household whose annual income is more than 50% but does not exceed 80% of the area median income (AMI) for San Francisco- Oakland- Fremont Metropolitan Statistical Area, based upon the annual income figures provided by HUD, as adjusted for household size.

2. "Household, moderate income" means a household whose annual income is more than 80% but does not exceed 120% of the area median income (AMI) for San Francisco- Oakland-Fremont Metropolitan Statistical Area, based upon the annual income figures provided by HUD, as adjusted for household size.

3. "Household, very low income" means a household whose annual income does not exceed 50% of the area median income (AMI) for San Francisco -Oakland-Fremont Metropolitan Statistical Area, based upon the annual income figures provided by HUD, as adjusted for household size.
"Life of the inclusionary unit" means the term during which the affordability provisions for inclusionary units shall remain applicable. The affordability provisions for inclusionary units

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 24
shall apply in perpetuity from the date of occupancy, which shall be the date the city performs final inspection for the building permit.
"Living area" means the gross area of all floors of a residential structure excluding: basement or cellar areas used for storage only; space used for off -street parking (i.e., garages) or loading, steps, patios, decks, terraces, porches, and exterior balconies, if not enclosed on more than three sides.
"Median income for San Francisco-Oakland-Fremont Metropolitan Statistical Area" means the median gross annual income in San Francisco -Oakland-Fremont Metropolitan Statistical Area as determined by HUD, adjusted for household size.
"Ownership units" means inclusionary units developed as part of a residential development which the applicant intends to be sold, or which are customarily offered for individual sale. "Project" means a residential housing development at one location or site including all dwelling units for which permits have been applied for or approved. "Project owner" means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which holds fee title to the land on which the project is located.
"Property owner" means the owner of an inclusionary unit, excepting a "project owner." "Rental units" means inclusionary units which the applicant intends to be rented or leased, or which are customarily offered for lease or rent.
"Resale restrictions" means legal restrictions which restrict the price of inclusionary units to ensure that they remain affordable to very low -, low -, and moderate -income households on resale.
"Residential project, multiple-family" means a residential project consisting of condominiums, apartments, and similar dwellings attached in groups of four or more units per structure and including multiple units located on a single parcel of land under common ownership.

"Residential project, single -family" means a residential project consisting of detached and attached single-family homes, including paired single-family, duets, duplexes, townhomes, and similar unit types where each unit is located on a separate parcel of land. "Unit type" means various dwelling units within a project which are distinguished by number of bedrooms and/or the type of construction (e.g., detached single -family, duets, townhomes, condominiums).
(Ord. 2272, 12/19/2023)

Article II
Requirements
§ 18.38.040030. General applicability and development standards.

A. General Applicability.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 25

1. Parcels shall be identified in the city's Housing Element as a housing opportunity site, meaning sites designated in the Housing Element to be zoned to allow residential development or mixed-use (i.e., mixed residential and nonresidential use, whether in the same building or on the same site) and designated in the General Plan Land Use Map as Housing Element Overlay.

2. Parcels identified in the Housing Element as accommodating the city's share of the lower income Regional Housing Needs Allocation, including the following housing opportunity sites, identified with reference to the 2023- 2031 6th Cycle Housing Element, as follows: Site 2 - Stoneridge Shopping Center; Site 5 - Laborer's Council; Site 6 - Signature Center; Site 7 - Hacienda Terrace; Site 9 - Metro 580; Site 12 - Pimlico Area (North Side); Site 20 - Boulder Street; Site 21a (Kiewit High Density); Site 23 - Sunol Boulevard; Site 29 - Oracle; and the Dublin/Pleasanton BART Station parking lot. These sites shall:
a. Permit owner-occupied and/or rental single -family and/or multi-family uses by right pursuant to California Government Code Section 65583.2(h) and (i) for projects with affordable housing proposals in which 20% or more of the units are affordable to lower-income households.
b. Be allowed 100% residential uses regardless of any other applicable zoning district's permitted and conditionally permitted uses for the site; and c. Have all residential uses either: (i) occupy at least 50% of the floor area for a new construction mixed-use project; or (ii) occupy at least 50% of the new floor area proposed on a housing opportunity site with pre-existing commercial/office floor area to be preserved as part of the project. In no case shall the provisions of this district preclude a commercial/office project with no residential uses, assuming those uses are allowed by the base zoning, to be proposed on a housing opportunity site.

B. Development Standards.

1. Nonresidential uses, including modification and expansion of existing uses, shall be permitted and conditionally permitted as specified in the underlying zoning district, the city's Objective Design Standards (ODS) and/or applicable provisions of this title thereto.

2. Residential uses shall be allowed consistent with the densities set forth on a site - specific basis in the Housing Element and the city's Objective Design Standards, and the applicable development standards as specified in the city's Objective Design Standards and/or applicable provisions of this title , and the requirements of Chapter

17.44 (Inclusionary Zoning) and other applicable provisions of Title 17, thereto. (
Ord. 2272, 12/19/2023)
§ 18.38.045. Inclusionary unit provisions and specifications.

A. Required Inclusionary Units.

1. For all new multiple -family residential projects of 15 units or more, at least 15% of the project's dwelling units shall be affordable as provided in this chapter.

2. For all new single-family residential projects of 15 units or more, at least 20% of the project's dwelling units shall be affordable as provided in this chapter.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 26

3. For all new mixed-use projects with 15 residential units or more, at least 15% of the project's dwelling units shall be affordable as provided in this chapter.

4. Any commercial, office or industrial development will be subject to the affordable housing fee set forth in Chapter 17.40 or may provide inclusionary housing as provided in Section 17.44.040.B.

5. The percentage of inclusionary units required for a particular project shall be determined only once on a given project, at the time of tentative map approval, or, for projects not processing a map, prior to issuance of building permit. If the subdivision design changes, which results in a change in the number of unit types required, the number of inclusionary units required shall be recalculated to coincide with the final approved project. In applying and calculating the 15% requirement, any decimal fraction less than or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be construed as one unit.

B. Rental Units. For rental units, the following affordability mix shall be met among the required inclusionary units:

1. A minimum of 25% of inclusionary units shall have rents set at no more than 30% of 50% area median income (AMI) for households with incomes up to 50% AMI (very low-income units).

2. A minimum of 25% of inclusionary units shall have rent set at no more than 30% of 60% AMI for households with incomes of 51% to 60% AMI (low-income units).

3. No more than 50% of inclusionary units shall have rent set at no more than 30% of 80% AMI for households with incomes of 61% to 80% AMI (low-income units).

C. Ownership Units. For affordable ownership units, initial sales prices shall be set at the following limits to result in a monthly mortgage payment (principal and interest) which does not exceed one-twelfth of 35% of the stated AMI, for household size per subsection F, below:

1. One bedroom units to be restricted at 100% AMI.

2. Two bedroom condominium units to be restricted at 100% AMI.

3. Two bedroom townhome units/single -family units AND three bedroom and larger units to be restricted at 120% AMI.

D. Bedroom Mix. For each project, a minimum of 10% of the total inclusionary units will be three-bedroom units; a minimum of 45% of the total inclusionary units will be two - bedroom units; and the remaining inclusionary units will be studio or one -bedroom units except that no more than 10% of the units may be studios. This requirement shall not apply to age-restricted senior housing or single-family projects.

E. Minimum Size. Inclusionary units may be of smaller size than the market rate units in the project, subject to the following limitations: the living area of ownership units may be up to 50% smaller than the size of the average market rate unit in the project; for rental units the living area of each unit shall be as follows: (1) a studio shall be at least 700 square feet; (2) a one-bedroom unit shall be at least 850 square feet; (3) a two-bedroom unit shall be at least 1,000 square feet; (4) a three bedroom unit shall be at least 1,250 square feet; and (5) for units with more than three bedrooms an additional 250 square feet for each additional bedroom.

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 27
F. Household Size. For the purposes of calculating affordable rental or affordable sales price of an inclusionary units, the following household size assumptions shall be used for each applicable dwelling unit types:

Unit Size HUD Household Size
Studio units 1 person
1 bedroom unit 2 persons
2 bedroom unit 3 persons
3 bedroom unit 4 persons
4 or more bedroom unit 5 or more persons
G. Materials. Inclusionary units shall be constructed with identical exterior materials and an exterior architectural design that is consistent with the market rate units in the project.

H. Construction Timing. All inclusionary units in a project shall be constructed concurrently with or prior to the construction of the project's market rate units.

I. Accessory Units. Accessory dwelling units and junior accessory dwelling units shall not count towards meeting inclusionary requirements.

J. Projects with Different Unit Types. For those projects with both market rate units and inclusionary units:

1. Inclusionary units shall be dispersed throughout the project so as not to concentrate inclusionary units in a specific geographic area (including a floor) of the project. a. For a project where the market rate units are proposed to be detached single- family homes, it is permitted for the inclusionary units be paired single -family, duets, duplexes, or townhomes. In such case, the townhomes can be concentrated in one or more areas of the project. The residents of both the market rate and the inclusionary units must be provided equivalent project amenities. b. For a project where the market rate units are proposed to be attached or detached single-family homes, duets, or duplexes, it is permitted for the inclusionary units to be ownership condominiums or rental apartments. In such case, and where the number of i nclusionary unis exceed 15 units, the condominiums or apartments can be concentrated in an area of the project. The residents of both the market rate and the inclusionary units must be provided equivalent project amenities.

K. Requirements. The affordability requirements are as set forth in this chapter and the applicable Objective Design Standards (ODS); and for sites for which there are no ODS, then the requirements in Chapter 17.44. In the event of any conflict, the more restrictive provisions that provide more inclusionary units and deeper affordability shall apply.

L. Perpetuity. Inclusionary units shall remain affordable in perpetuity through the recordation of an affordable housing agreement described in Section 18.38.050 of this chapter.

M. Eligibility. The city's adopted preference and priority system shall be used for determining eligibility among prospective beneficiaries for affordable housing units created by this chapter, unless superseded by federal or state law.
(Ord. 2272, 12/19/2023)

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 28
§ 18.38.050. Affordable housing agreement.

All projects subject to this chapter shall enter into an affordable housing agreement. The agreement shall record the method and terms by which a project owner shall comply with the requirements of this chapter or by alternatives as generally provided in C alifornia Government Code Section 65850(g) acceptable in the determination of the city based on analysis of equivalent financial value; which analysis may be required by the city to be done by a third party at the owner's expense. The approval and/or recordation of this agreement shall take place prior to final map approval or, where a map is not being processed, prior to the issuance of building permits for such lots or units.

The affordable housing agreement shall state the methodology for determining a unit's initial and ongoing rent or sales and resale price(s), any resale restrictions, occupancy requirements, eligibility requirements, city incentives including second mortgages, recapture mechanisms, the administrative process for monitoring unit management to ensure ongoing affordability and other matters related to the development and retention of the inclusionary units.

In addition to the above, the affordable housing agreement shall set forth any waiver of the affordable housing fee. For projects which meet the affordability threshold with very low- and/or low-income units, all units in the project shall be eligible for a waiver of the affordable housing fee. For single-family residential projects which meet the affordability threshold with moderate income units, or multiple -family residential projects which do not meet the affordability threshold, only the inclusionary units shall be eligible for a waiver of the affordable housing fee.

To ensure affordability of the unit in perpetuity, the affordable housing agreement shall be recorded with the property deed or other method approved by the city attorney. (Ord. 2272, 12/19/2023)

Article III
Miscellaneous
§ 18.38.060. Administration.

Approval of residential projects within the district shall be as specified in this title, which may include, but is not limited to, a housing site compliance review pursuant to Chapter 18.22, subdivision map, etc. An applicant of a project subject to this chapter shall submit an affordable housing proposal stating the method by which it will meet the requirements of this chapter. The affordable housing proposal shall be submitted as part of the applicant's city development application to the planning division in a form approved by the director of community development or designee.

The affordable housing proposal shall be reviewed by the city's commission with purview over affordable housing agreements at a properly noticed meeting open to the public. The commission shall make recommendations to the city council either accepting, rej ecting or modifying the developer's proposal and the utilization of any incentives described in Section

Ordinance No.

P24-0505, Pleasanton Municipal Code Amendments City Council, November 17, 2024 Exhibit A, PMC Amendments, Page 29

17.44.070 and Housing Element Policy 2.6. The commission may also make recommendations to the city council regarding the project as necessary to ensure conformance with this chapter.

Acceptance of the applicant's affordable housing proposal is subject to approval by the city council, which may direct the city manager to execute an affordable housing agreement in a form approved by the city attorney. The city manager or his or her designee shall be responsible for monitoring the sale, occupancy and resale of inclusionary units. (Ord. 2272, 12/19/2023)
§ 18.38.070. Enforcement.

A. In the event of conflict between this chapter and Chapter 17.40 or 17.44, or other adopted city requirement, the more specific provision shall prevail.

B. The city manager is designated as the enforcing authority. The city manager may suspend or revoke any building permit or approval upon finding a violation of any provision of this chapter. The provisions of this chapter shall apply to all agents, successors and assigns of an applicant. No building permit or final inspection shall be issued, nor any development approval be granted which does not meet the requirements of this chapter. (Ord. 2272, 12/19/2023)
§ 18.38.080040. Appeals.

Any person aggrieved by any action or determination of the city manager under this chapter, may appeal such action or determination to the city council in the manner provided in Chapter

18.144 of this code.
(Ord. 2272, 12/19/2023)

1 ATTACHMENT 2
RESOLUTION NO. 2024-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON

APPROVING AMENDMENTS TO THE OBJECTIVE DESIGN STANDARDS FOR HOUSING ELEMENT SITES (CASE NO. P24-0505)
WHEREAS, on January 26, 2023, and with amendments in May, 2023, the City Council adopted Resolution 23-1360, adopting the Objective Design Standards (ODS) for Housing Element sites, which included among other standards, provisions with respect to affordable inclusionary units; and
WHEREAS, California Government Code Section 65580(d) states that all cities have a responsibility to use the powers vested in them to facilitate the improvement and development of housing to make adequate provision for the housing needs of all economic segments of the community; and
WHEREAS, in 2017, AB 1505 amended California Government Code Section 65850 and added Section 65850.1, to "reaffirm the authority of local jurisdictions to include within these inclusionary housing ordinances requirements related to the provision of rental units" and "does not modify or in any way change or affect the authority of local jurisdictions to require, as a condition of the development of residential units, that the development include a certain percentage of residential for -sale units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate-income, lower-income, very-low income, or extremely-low income households;" and
WHEREAS, Program 2.1 of the 2023-2031 6th Cycle Housing Element calls for the City to continue to implement the Inclusionary Zoning Ordinance (IZO), and actively pursue strategies to improve its effectiveness in producing affordable housing in conjunction with new development, including study of potential changes to the proportion of inclusionary units required in multi-family developments, identification of a target mix of affordable units and unit size standards, and monitoring the effectiveness of the ordinance in delivering affordable units, with modifications to be evaluated to better achieve that goal; and
WHEREAS, since its adoption, the IZOhas resulted in the production of hundreds of below-market-rate housing units in Pleasanton and contributed a valuable source of funding to support the production of affordable housing and programs that preserve access to and support affordable housing for Pleasanton households; and WHEREAS, in January 2024, the City retained professional services firm Economic and Planning Systems (EPS) to provide analysis and recommendations with respect to modification to the inclusionary rate and target affordability limits, and in this particular respect to evaluate the feasibility of such changes with respect to the overall production of market-rate residential units; and

2 WHE
REAS, the City Council held public workshops on May 7, 2024 and August 20, 2024, to study potential amendments to the inclusionary rate and required affordability levels as stated in the IZO, and consider and provide direction on various potential amendments to the IZO; and
WHE
REAS, on September 11, 2024, the Planning Commission held a duly- noticed public hearing and considered the written agenda report, relevant exhibits, direction from City Council and recommendations from City staff concerning this application, and received testimony from interested parties, and recommended the City Council approve the updated IZO and related amendments to the Pleasanton Municipal Code and ODS for Housing Element Sites to align with the amended IZO, with recommended amendments to the ODS comprising deletion of specific provisions that would become redundant with adoption of the IZO; and
WHE
REAS, on October 15, 2024, the City Council held a study session to review and provide input on the Draft Amendments to Pleasanton Municipal Code Chapters

17.40, 17.44 and 18.38 and the ODS for Housing Element Sites as recommended by the Planning Commission, with minor amendments based on Planning Commission comments; and
WHE
REAS, on November 19, 2024, the City Council adopted Ordinance No. ____ approving amendments to PMC Chapters 17.40, 17.44 and 17.38.

NO
W, THEREFORE BE IT RESOLVED by the City Council of the City of Pleasanton, based on the entire record of proceedings, including the oral and written staff reports and all public comment and testimony:

Sect
ion 1: Findings Pursuant to the California Environmental Quality Act (CEQA) The adoption of the amendments to the Objective Design Standards for Housing Element Sites is not a project within the meaning of Section 15378 of the California Environmental Quality Act (CEQA) Guidelines because there is no potential for it to result in a physical change in the environment, either directly or indirectly. Additionally, the amendments to the Objective Design Standards for Housing Element Sites are exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility of a significant effect on the environment, and they contain no provisions that will directly or indirectly result in a physical change in the environment.

Se
ction 2: The City Council hereby adopts the amendments to the Objective Design Standards for Housing Element Sites as more particularly described in Exhibit A.

Sect
ion 3: This resolution shall become effective as of the effective date of Ordinance No.____.

PASSED,
APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on November 19, 2024, by the following vote:

3 Ayes:

Noes:

Absent:

Abstain:
______________________________

Karla Brown, Mayor
AT
TEST:
____________________________

Jocelyn Kwong, City Clerk
APPR
OVED AS TO FORM:
____________________________

Daniel G. Sodergren, City Attorney

P24-0505, Amendments to Pleasanton Municipal Code and ODS City Council, November 19, 2024 Exhibit A, ODS Amendments, Page 1

EXHIBIT A

P24-0505, Amendments to Pleasanton Municipal Code and ODS City Council, November 19, 2024 Exhibit A, ODS Amendments, Page 2

OBJECTIVE DESIGN STANDARDS
O

BJECTIVE DESIGN STANDARDS

CITY OF PLEASANTON
Objective Design Standards for Housing Sites
Adopted January 26, 2023, Revised May 2, 2023, and
November 19, 2024
CO

MMUNITY DEVELOPMENT DEPARTMENT

P24-0505, Amendments to Pleasanton Municipal Code and ODS City Council, November 19, 2024 Exhibit A, ODS Amendments, Page 3
PART 2

DEVELOPMENT STANDARDS
T
he following regulations establish quantitative standards in order to realize the desired building, open space, and street character contained in the Design Standards.

I
n addition to the Design Standards described below; all multifamily residential development shall satisfy other standards in this document relating to:
• The provision of pedestrian and bicycle connections (both private and public)
• Group Usable Open Space (Development Standards)
• Landscaped Paseos (A.6)
• Open Space, Landscaping and Lighting (A8, A9, and A10) And shall also incorporate residential amenities such as play/activity areas, pools, water features, fitness facilities, and community rooms.

Density: Each site has been identified for a range of density expressed in units per acre (see Table 2.1 Housing Sites, for details). These densities are in addition to the on-site retail or service uses that the City may approve as part of a mixed-use project, if such additional development was anticipated in the 2012 Housing Element and Climate Action Plan General Plan Amendment and Rezonings Supplemental EIR, or the 2023-2031 (6
th Cycle) Housing Element
Update Program EIR, or as approved through any subsequent tiered environmental review.

Note: The City interprets the minimum residential density to be an average minimum density to be met over the entirety of the project site (i.e., different portions of the site may have densities that are either higher or lower, but the minimum density is met cumulatively across the entire site).

Permitted and Conditionally Permitted Uses: In addition to residential uses at the densities assigned in Table 2.1, mixed-use development (commercial uses in conjunction with residential uses) is allowed as follows on sites where such additional development was anticipated in the 2012 Housing Element and Climate Action Plan General Plan Amendment and Rezonings Supplemental EIR, or the 2023-2031 (6
th Cycle) Housing Element Update Program EIR, or as
approved through any subsequent tiered environmental review. • Appendix C lists permitted and conditionally permitted uses for designated 5
th Cycle (Carryover Sites)
• 6th Cycle Housing Element Sites 18 (Valley Plaza) and Site 2 (Stoneridge Shopping Center), permitted and conditionally permitted uses shall be allowed as specified by their underlying zoning, within mixed use projects on these sites. Vertical mixed use (mixed uses within

P24-0505, Amendments to Pleasanton Municipal Code and ODS City Council, November 19, 2024 Exhibit A, ODS Amendments, Page 4
the same building) or horizontal mixed use (mixed uses within different buildings on the same site) is allowed.

Affordability: All development shall comply with the City’s Inclusionary Zoning Ordinance (IZO), Chapter 17.44 of the Pleasanton Municipal Code.. through Affordable Housing Agreements entered into between the City and each developer; the agreements will be recorded and will run with the land.

Inclusionary units shall be deed-restricted to be affordable in perpetuity.

Accessory Dwelling Units or Junior Accessory Dwelling Units shall not be permitted to count towards meeting the IZO’s minimum inclusionary requirements.

F
or rental units, the following affordability mix shall be met, reflecting the rent maximums that may be set among any required inclusionary units:
• A minimum of 25 percent of inclusionary units shall have rents set at no more than 30% of 50% Area Median Income (AMI) for
households with incomes up to 50% AMI (Very Low Income Units) • A minimum of 25 percent of inclusionary units shall have rent set at no more than 30% of 60% AMI for households with incomes of 51% to 60% AMI (Low-Income Units)
• No more than 50 percent of inclusionary units shall have rent set at no more than 30% of 80% AMI for households with incomes of 61% to 80% AMI (Low-Income units)
Actual rents charged shall follow the published schedule of maximum monthly rents, by size and type of units, as provided and updated annually by the City.

Qualifying incomes shall be set at the same levels as those described above (i.e., a qualifying household for a 50% AMI rent-restricted unit shall have a maximum annual income of no more than 50% AMI), with such income limits based on the schedule of income limits based on household size published annually by the City and consistent with the U.S. Department of Housing and Urban Development (HUD) annual adjustment in the AMI for the San Francisco-Oakland-Fremont Metropolitan Statistical Area.

In instances where a project proposes to make use of State or Federal programs (e.g., State Housing Density Bonus Law, Low-Income Tax Credits, etc.) then the most restrictive requirements of any applicable income and rent limits established by such programs shall prevail; and for purposes of Density Bonus Law, for low-income households earning 61-80% AMI, the City shall allow, at the applicant’s request, rents to be set at 30% of actual income of such qualifying low-income households.

F
or ownership units, prices shall be set at the following limits to result in a monthly mortgage payment (principal and interest) which does not exceed one- twelfth of 35% of the stated AMI, per Municipal Code Section 17.44.050.F:

P24-0505, Amendments to Pleasanton Municipal Code and ODS City Council, November 19, 2024 Exhibit A, ODS Amendments, Page 5
• 1 be
droom units to be restricted at 100% AMI
• 2 bedroom condominium units to be restricted at 100% AMI • 2 be droom townhome units/single-family units AND 3 bedroom and larger units to be restricted at 120% AMI[1]
S
ection 8 Rental Assistance Vouchers: Through the affordable housing agreements entered into between the City and each developer, the developments will generally be required to accept HUD Section 8 Rental Vouchers as a means of assisting qualified applicants.

Bedroom Mix of Affordable Units: For each project, a minimum of 10% of the total affordable units will be three-bedroom units; a minimum of 45% of the total affordable units will be two-bedroom units; and the remaining affordable units will be studio or one-bedroom units except that no more than 10% of units may be studios. This requirement shall not apply to age-restricted senior housing or single-family projects.
[1] Household sizes for units shall be calculated based upon two persons in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, as generally set forth in Cal. Health and Safety Code section 50052.5(h).

Item #17

CITY COUNCIL AGENDA REPORT
October 15, 2024
Community Development
TITLE: RECEIVE A PRESENTATION AND PROVIDE INPUT ON DRAFT AMENDMENTS TO PLEASANTON MUNICIPAL CODE (PMC) CHAPTER 17.44 - INCLUSIONARY

ZONING AMENDMENTS AND RELATED AMENDMENTS TO PMC CHAPTER

17.40 - AFFORDABLE HOUSING FEE, CHAPTER 18.38 - HOUSING

OPPORTUNITY ZONE DISTRICT, AND THE OBJECTIVE DESIGN STANDARDS

FOR HOUSING ELEMENT SITES

SUMMARY
This study session is to present draft revisions to the Inclusionary Zoning Ordinance (IZO), Chapter 17.44 of the Pleasanton Municipal Code, and related chapters of the Municipal Code (PMC 17.40, 18.48), and the Objective Design Standards for Housing Element Sites, for initial City Council review and input. The draft revisions reflect input from the two study sessions held with City Council in May and August 2024, and the recommendation of the Planning Commission for adoption of the amendments, which was provided on September 11, 2024. In addition to updating the IZO with respect to the inclusionary rate, and target affordability levels, the amendments provide much greater specificity and increased objectivity related to design and development standards for inclusionary units, and also clarify and improve the procedures, findings and requirements for projects seeking approval of alternative means to comply with the IZO. Following City Council's input and direction, the various PMC and ODS amendments would be presented to the City Council for adoption in November. Also in November, staff will provide an update and introduction to the Draft Nexus Fee studies, including the Affordable Housing In-Lieu Fee, for City Council review and input.

RECOMMENDATION
Receive a presentation and provide input on Draft Amendments to Pleasanton Municipal Code (PMC) Chapter 17.44 - Inclusionary Zoning Amendments and Related Amendments to PMC Chapter 17.40 - Affordable Housing Fee, Chapter 18.38 - Housing Opportunity Zone District, and the Objective Design Standards for Housing Element Sites.

BACKGROUND
Since early 2024, City staff and a professional services team led by Economic & Planning Systems (EPS) have undertaken work to update the City’s Development Impact Fees and Affordable Housing Fees, and to update the existing Inclusionary Zoning Ordinance (IZO).

The process to update the City's Affordable Housing fee has to date been conducted in tandem with discussion of potential changes to the IZO. In particular, these discussions have focused on the inclusionary rate reflected in the IZO (i.e., the proportion of affordable units required as part of market-rate projects), and the required minimum affordability levels for inclusionary units, since those factors influence the recommended affordable housing fee amount. Amendments are also proposed to PMC Chapter 17.40 - Affordable Housing Fee, Chapter 18.38 – Housing Opportunity Zone District, and the Objective Design Standards for ATTACHMENT 3

Housing Element Sites, to align with the amendments to the IZO and make other clarifying changes.

The City Council held workshops in May and August as part of the study process.

May 7, 2024 Workshop
At an introductory workshop on May 7, 2024, City Council reviewed and discussed the results of EPS' initial analysis, including an evaluation of potential changes to the affordable housing inclusionary rate, along with other initial findings and recommendations with respect to impact fees more generally. The latter discussion focused on seeking a balance between establishing fees at a rate that would appropriately mitigate development impacts, while being mindful of potentially negative impacts on development feasibility that could impede other City financial and policy goals. EPS evaluated various inclusionary scenarios, including some scenarios that would increase the current inclusionary rate, and others that would retain or reduce those rates. EPS also looked at the resultant equivalent in-lieu fee, if set at a level reflecting the equivalent cost to subsidize those same affordable units constructed elsewhere, and the overall feasibility of setting fees at those equivalent rates. Based on the analysis, staff’s initial recommendation was to set the inclusionary rate for all types of residential projects at 15% (i.e., decrease the current single-family/ownership rate and retain the existing multi-family rate). Additional detail and supporting analysis is provided in the May 7, 2024 Agenda Report and attachments; minutes of the May 7 workshop are included in Attachment 2 to this report.

August 20, 2024 Workshop
The City Council held a follow-up workshop on August 20, 2024, focused on the Inclusionary Zoning Ordinance. At this meeting, EPS provided additional analysis and refined scenarios for the inclusionary rate and in-lieu affordable housing fee; staff also provided analysis and requested City Council direction on several key policy questions for the update of the IZO.

Consensus direction was provided based on a straw-poll vote by a majority of the City Council on each of the policy items, although it is noted there was not unanimity on every point. (See Attachment 2, Minutes from the May 7 and August 20, 2024 City Council Workshops). The outcomes and recommendations made by the City Council are outlined further in the analysis and discussion of the amendments to the IZO, in the Disucssion section below. With respect to the inclusionary rate and affordability levels, the City Council supported staff's recommendation to establish the rate at 15% for both rental and ownership projects, with a moderate-income target affordability for ownership units, and lower-income affordability for rental units.

Additional detail and supporting analysis is provided in the August 20, 2024 Agenda Report and attachments.

PLANNING COMMISSION ACTION
The Planning Commission held a public hearing on September 11, 2024, to review and provide a recommendation to City Council for adoption of the updated IZO and related amendments to PMC 17.40, 18.38, and the 2023 Objective Design Standards for Housing Element Sites. By a 4-1 vote (Mohan voting “no”) the Planning Commission recommended the City Council approve the amendments as recommended by staff. As described below, the Planning Commission suggested more information be provided to City Council to support recommendations concerning minimum unit sizes.

DISCUSSION

As noted, staff has incorporated the various points of City Council direction at the August 20 workshop into a comprehensively revised and updated IZO. Attachment 1 includes the text of the draft IZO Amendments (Chapter 17.44, starting on page 8 of Attachment 1) in redline/strikeout format. In addition to items on which the City Council provided specific direction, the proposed revisions include various other updates, clarifications and improvements to the IZO, principally intended to provide more clear and objective standards, clarify procedures, and align the ordinance with more standard language in definitions and other terms. Substantive changes to the IZO are outlined below.

Inclusionary Rate and Affordability Levels (17.44.040.B. and C.) The amended IZO establishes the inclusionary rate and affordability levels for ownership and rental projects. As described above, consistent with majority City Council direction, it includes:
• For-Sale Projects (attached and detached): 15% inclusionary; units affordable to households making up to a maximum of 120% Area Median Income (AMI) – i.e., moderate income
• Rental Projects: 15% inclusionary; units affordable to households making a maximum of 50% and 60% Area Median Income (AMI) – i.e., very-low and low-income. (This split affordability is recommended, based on further analysis by EPS, in support of a City Council request to study this option).

The proposed 15% rate and recommended affordability levels provide an appropriate balance between achieving the City's affordable housing goals, while representing a more feasible rate for attached and detached single-family projects. While there is potentially a significant developer cost to subsidize inclusionary for-sale units due to the large gap between affordable and market sales prices, other proposed amendments to the IZO would provide projects with significantly more flexibility to meet the requirements of the IZO on-site, and thus improve feasibility. Furthermore, staff's analysis found there would be a minimal future number of large, single-family detached projects subject to the IZO, and the change from a 20% inclusionary rate to a 15% rate will not meaningfully affect inclusionary unit production.

With respect to multi-family projects, as previously presented to City Council, it is currently an extremely challenging environment for multi-family construction, and few, if any, projects are likely to be feasible under current economic conditions, even if the inclusionary rate were to be substantially reduced. However, since the current 15% rate has been feasible in the past, and anticipating there will be improvement in the multi-family construction market over time, staff recommended, and City Council supported, retaining the multi-family rental inclusionary rate at 15%, which will also help the City meet it's affordable housing goals.

The August 20 report also suggested the City Council could consider other near-term tools to help stimulate multi-family rental housing production, which comprises the largest share of the remaining units that could be zoned and built under the Housing Element, such as temporarily permitting projects to “fee out” of up to a third of their inclusionary requirement. The City Council will have the opportunity to consider this concept as part of the discussion and adoption of the Affordable Housing fee.

Threshold Project Size
As recommended by City Council, the IZO has been amended to reduce the minimum project

size subject to inclusionary requirements (i.e., required to provide units on site) from 15 to 10 units.

Inclusionary Unit Standards (Section 17.44.040)
Numerous changes are proposed to Section 17.44.040, principally to create more objective standards for the evaluation of inclusionary housing proposals, and in some instances to provide more flexibility in how the inclusionary requirements can be met. Major changes include:
• Clustering and dispersal of units (17.44.050.A): The revisions include additional,l but limited, exceptions to permit clustering of units. For example, within single-family detached developments the IZO would have provisions to allow attached units such as duets or townhomes, or where a project is able to use Lower Income Housing Tax Credits (LIHTC) to achieve a multi-family project that would satisfy its inclusionary requirements for those units to be clustered, as a practical matter. The amended IZO allows other exceptions to the clustering/dispersal requirements to be allowed, subject to City Council allowance through an “alternative compliance” approval (see below) and subject to specific findings.

• ADUs and JADUs disallowed from counting toward inclusionary requirements (17.44.050.B): The revised IZO explicitly states that ADUs and JADUs may not count toward the IZO. This new requirement is staff’s recommendation, as legally (pursuant to the Ellis Act) the City cannot require a homeowner to rent an ADU (at all), and even if rented, there are significant practical challenges to monitoring and ensuring the unit is rented to an income-qualified household. This provision is not intended to construe that the City does not support or encourage ADUs in general, which could still be used to provide an increment of housing above and beyond the IZO, that is “affordable by design.” Language has been included in the draft amended IZO to that effect.

The City Council unanimously supported not allowing JADUs to count toward meeting the IZO but requested additional analysis regarding ADUs. In addition to the above- stated reasons, there are negative reports from staff of cities whose ordinances have allowed ADUs to satisfy their respective IZO only to see virtually all single-family projects elect this option and then face significant challenges with monitoring and enforcement. As such, staff continues to strongly recommend against allowing for ADUs to be used to satisfy the IZO requirements. In particular, it is the intent of the IZO and numerous policies of the Housing Element to secure units that provide housing opportunities for lower-income households in need of those units. The lack of certainty that the unit will actually provide the affordable housing opportunity intended to be secured by the IZO is a compelling reason in support of the staff and Planning Commission recommendation, consistent with the City's stated policy goals.

• Unit Size. The proposed amendments allow for:
o For-sale inclusionary units: Living area to be up to 50 percent of the size of the average of the market-rate units.
o Rental inclusionary units: Minimum unit sizes are specified based on number of bedrooms. (1) a studio shall be at least 450 net square feet; (2) a one-bedroom

unit shall be at least 550 net square feet; (3) a two-bedroom unit shall be at least 750 net square feet; (4) a three bedroom unit shall be at least 1,000 net square feet; and (5) for units with more than three bedrooms an additional 200 net square feet for each additional bedroom.

Regarding the size of inclusionary rental units, in response to Planning Commission comments, the above recommendations include some minor adjustments to the minimum square footage, reducing them slightly from the initially proposed unit sizes by 50-100 square feet, to help improve the feasibility of these units for new development. The revisions also now specify that unit sizes are net (i.e., "paint to paint") so that the thickness of walls is not included in the unit size calculation. In developing the recommendations, staff consulted with Van Meter Williams Pollack (VMWP), the City's consultant who has extensive experience developing both market-rate and affordable projects throughout the Bay Area. The recommended unit sizes are based on considerations of livability (adequate living space for the typical household size that would be occupying a unit) and ability to include features such as storage and additional bathrooms as bedroom counts increase. VMWP noted that in Pleasanton, market-rate unit sizes tend to be larger than in more urban areas such as Oakland and San Francisco, so ensuring relative equity between the affordable and market-rate units means that affordable units should also be somewhat larger than in those other locations. • Bedroom Mix (17.44.050.G.) The IZO has been amended to include new requirements for the bedroom mix (i.e., the number of units that are studios, one-, two-, or three- bedrooms) of the affordable units.
o For-sale projects inclusionary units must reflect a similar average number of bedrooms as the market-rate units
o In rental projects, a mix that includes at least 10% three-bedroom units is required, with a limitation set on studio units (no more than 10% studio units are allowed), and the remainder one- and two-bedroom units.

This mix is the same as that included and approved in the ODS, and matching average bedroom counts in for-sale projects is a commonly used approach that retains equivalency between the market-rate and affordable units.

Alternative Means of Compliance (17.44.040.080)
Consistent with direction provided by City Council on August 20, recommended amendments to the alternative compliance section (17.44.080) include:
• More detailed findings for approval of alternative compliance proposals, and clearly placing the burden of proof to support the basis of requests on the applicant. • Establishing the City Council as the approving body for all alternative compliance requests.
• Establishing a clear priority among acceptable forms of alternative compliance, with (from most to least preferred): 1) Alternative configurations, unit types or clustering of units on site; 2) Constructing units off-site; 3) Dedicating land for an affordable housing project; and 4) Paying the Affordable Housing fee. As proposed in the text amendments, applicants are required to demonstrate that a higher-priority option is infeasible, before consideration is made of a lower-priority option.

• Strengthened, and where possible, objective criteria for each of the alternative compliance options to ensure that the alternative will continue to meet the purpose of the IZO and policy priorities of the City.

In addition, the amendments would remove the option to allow transfer of excess units as credits to help maximize the production of affordable units and avoid administrative complexities in terms of the timing, coordination and approvals required between the “sending” and “receiving” sites.

Procedures for Review
Among other clarifying provisions, the proposed IZO amendments would allow for affordable housing proposals/agreements in full compliance with the Ordinance (i.e., not requesting alternative compliance or otherwise deviating from the standard) to be approved by the same body responsible for approval of the underlying project. For example, if the project was subject to Planning Commission approval, then a fully compliant affordable housing agreement could also be reviewed and approved by the Planning Commission. Such actions would be subject to the typical appeal or “call-up” procedures allowed by the municipal code. Any affordable housing agreement proposal involving an alternative compliance request would be subject to City Council review and approval.

Other Revisions
Other more minor revisions are included throughout the Ordinance and reflected in the redline draft in Attachment 1. These generally aim to improve or clarify the language of the ordinance, reduce ambiguity, and/or create more objectivity. Additional revisions beyond those noted in the prior section include:
• 17.44.020 – Purpose: Revisions to remove reference to regulatory provisions more appropriately stated elsewhere in the Ordinance.
• 17.44.030 – Definitions: Revisions to the definitions section to align and update the definitions to terms used in the Ordinance, current practices, and other related regulatory requirements.
• 17.44.050 – Inclusionary Unit Provisions and Specifications: In addition to the changes described above, other revisions in this section would add more specificity or measurable standards.
• 17.44.060 – Affordable Housing Agreement: Clarifying that where a project is permitted by City Council to pay affordable housing fees such project does not require a separate affordable housing agreement, and the requirement would instead be memorialized in a City Council resolution for approval.
• 17.44.070 – Incentives to Encourage On-Site Construction of Inclusionary Units:

Deletion of the incentive for “priority processing” since this requirement may conflict with project review timelines mandated by State law.
• 17.44.080 – Alternative Means of Compliance. Other minor revisions to clarify/strengthen requirements and criteria for approval of alternative compliance requests.
• 17.44.090 – Administration. Addition of a provision regarding amendment of affordable housing agreements to allow administrative approval of minor, non-substantive changes, with other amendments subject to approval by the original approving body.

Related Amendments to PMC Chapters 17.40, 18.38, and Objective Design Standards In addition to the various amendments to Chapter 17.44, various amendments are proposed to other chapters of the PMC and to the 2023 Objective Design Standards to align with the IZO amendments and to make other limited updates to align with State law. In summary, these include:

Chapter 17.40 – Affordable Housing Fee
Minor revisions have been made to this chapter, including:
• Clarification of the purposes for which affordable housing funds may be used, to include affordable housing programs as well as construction of affordable housing units. • Modernizing/update terminology (e.g., referencing facilities for religious purposes as being exempt from the affordable housing fee) and/or align it to existing regulations (e.g., adding a reference to Junior ADUs, as well as ADUs as being exempt from the affordable housing fee.) Since the Planning Commission review, an additional update has been made to definitions of Lower- and Moderate-Income Housing Units, to align them with the definitions used in the IZO.
• Amending the method by which annual increases to the fee are made to be indexed to the Construction Cost Index (CCI), rather than the Consumer Price Index (CPI), since provision of affordable/inclusionary housing is a construction-related cost. • Deletion of references to annual reporting and other requirements pursuant to AB1600 (Mitigation Fee Act) since the affordable housing fee is not considered an impact fee subject to AB1600.

Chapter 18.38 – Housing Opportunity Zone District
As part of implementation of the 2023-2031 (6th Cycle) Housing Element, the City rezoned sites and created the Housing Opportunity Zone District. Since the IZO was pending update, some more detailed standards for inclusionary housing were included in this chapter. Because those provisions would be redundant with the updated IZO, this chapter of the PMC would be amended to delete them.

Objective Design Standards for Housing Element Sites
Similar to Chapter 18.38, the ODS were adopted prior to this update of the IZO, and so detailed standards were included in the ODS for required affordable housing units. Similarly, those standards are proposed to be deleted from the ODS, and instead the ODS would defer to the IZO for affordable housing requirements.

EQUITY AND SUSTAINABILITY
Adopting the updated Inclusionary Zoning Ordinance and related PMC amendments helps to advance equity and sustainability goals, by improving and strengthening the ordinance and its implementing procedures to encourage the maximum production of affordable housing units, and ensure that the housing needs of Pleasanton's lower-income households are met.

OUTREACH
Notice of this meeting was placed in The Valley Times, and interested parties requesting notification were also sent notices. Following this meeting and with direction from City Council,

staff is scheduled to present the key findings and recommendations to meetings of the Chamber of Commerce Economic Development and Government Relations (EDGR) Committee; the Business Organization Partners (BOP), and the Economic Vitality Committee (EVC).

STRATEGIC PLAN ALIGNMENT
Completion of these updates is consistent with the ONE Pleasanton Strategic Plan goal of Building a Community Where Everyone Belongs, Strategy – Implement the Housing Element and develop a plan to end homelessness, and the 6th Cycle Housing Element Program 2.1 – Continue to implement the Inclusionary Zoning Ordinance and actively pursue strategies to improve its effectiveness in producing affordable housing units in conjunction with new development.

FISCAL IMPACT
Adopting the IZO and related Code amendments would not have a direct fiscal impact, since its provisions are intended to better align the City's requirements and standards with respect to provision of affordable housing with the City's broader housing policy goals, while ensuring those requirements are not an impediment to overall residential development that may contribute future property tax and other revenues.

Prepared by: Submitted by: Approved by:

Ellen Clark, Director of
Community Development
Ellen Clark, Director of Community
Development

Gerry Beaudin, City
Manager

Attachments:

1. Redline Amendments, PMC Chapters 17.40, 17.44, 18.38 and Objective Design Standards

2. May 7 and August 20, 2024 City Council Workshop Minutes

3. Presentation

Item #8

CITY COUNCIL AGENDA REPORT

November 19, 2024
Finance

TITLE: ACCEPT THE MONTHLY DISBURSEMENT AND INVESTMENT REPORT FOR SEPTEMBER 2024

SUMMARY
Attached is the City of Pleasanton monthly disbursement and investment report for September 2024.

RECOMMENDATION
Accept claim disbursements in the amount of $18,037,004 and the investment report for the month of September 2024.

BACKGROUND
The City's Investment Policy requires the Director of Finance to submit a monthly transaction report to the City Council within 60 days of the end of the reporting period in accordance with California Government Code Section 53607.

The Investment Policy also requires the Director of Finance to submit a quarterly report to the City Council on the status of the City's investment portfolio no later than 45 days after the end of each month. This report shall include the types of investments, the amount of money invested with various institutions, purchase and maturity dates, and yield on investments. The Director of Finance certifies that the investment portfolio complies with the investment policy and will meet cash flow needs for the next six months. This report also includes check and electronic payment information for September 2024.

DISCUSSION
The book value of the City of Pleasanton primary investment portfolio decreased by $31.1 million from $257.9 million to $226.8 million during the quarter ending September 30, 2024.

This decrease was primarily due to large disbursements to various vendors related to the new fiscal year (liability insurance premium, prepayment for unfunded pension liability, etc.). The fiscal year-to-date effective rate of return on the portfolio was 1.87 percent. The average days to maturity (ADM) decreased from 443 days on June 30, 2024, to 428 days on September 30, 2024.

Local Agency Investment Fund
The City's investment in the Local Agency Investment Fund (LAIF) decreased to $39.3 million from $69.5 million during the quarter ending September 30, 2024. The quarterly LAIF apportionment interest rate was 4.71 percent with ADM of 231 days. The average monthly effective yield was 4.58 percent in September, 4.58 percent in August, and 4.52 percent in July.

During the quarter, two medium-term notes matured, Paccar Inc. on August 15, 2024, for

approximately $1.3 million, and Apple Inc. on September 11, 2024, for approximately $1.0 million, including interest. The certificate of deposit with Fremont Bank matured and was reinvested. As of September 30, 2024, approximately 70.7 percent of the total portfolio consisted of federal agency securities, while the LAIF investment was 17.9 percent of the portfolio. Corporate notes accounted for 10.1 percent of the portfolio, Government Money Market 0.7 percent, supranationals 0.4 percent, and certificates of deposit 0.2 percent. • Fair Market Value of total portfolio - $218,916,144
• Fiscal year-to-date effective rate of return - 1.87 percent • Weighted average days to maturity – 428 days
• Fiscal year-to-date net interest earnings - $1,115,785

Asset Composition

Sector Allocation

As of September 30, 2024, the effective rate of return is 1.87 percent.

The effective fiscal year rate of return on the portfolio was 1.87 percent, an increase of 0.21 percent from 1.66 percent from last quarter and an increase of 0.35 percent from 1.52 percent reported at the same time last year. As reported previously, the Federal Reserve (the Fed) raised interest rates since March 2022 and halted increases in July 2023, resulting in the highest federal funds rate in 25 years. This September, the Fed announced a new target rate of 4.75 percent to 5.00 percent, down from 5.25 percent to 5.50 percent. Most of the City's investment portfolio was purchased before rate hikes, and the overall investment return is expected to be lower than the market rates in the near term. As securities mature and funds are reinvested, the City will be able to achieve higher investment returns. The Fed has further trimmed rates by 0.25 at the meeting this November.

As of September 30, 2024, the entire portfolio, exclusive of money market accounts and LAIF was held in third-party safekeeping for the benefit of the City of Pleasanton at Bank of New York Mellon. Bank of New York Mellon is a contractual agent for the City.

As of September 30, 2024, all investments in the portfolio are authorized by State of California Government Section 53600 et. Seq. and the City's investment policy.

Securities rated below "AA-/AA3"

Noe the medium term note with 3M Company is rated at A by Moody's and rated at BBB+ by S&P. A rating of A indicates the investment grade is very high and a rating of BBB+ indicates the investment grade is good. When this investment was purchased in 2019, it met the A rating category required by the City's investment policy. This investment is scheduled to mature in February 2025; staff has been monitoring this investment and will take action, such as selling the security before maturity, if warranted.

Purchases and Maturities
No securities were purchased during the quarter; two securities matured, one in August and one in September; and one certificate of deposit matured in September and was renewed.

Staff continued to be conservative on investment. Staff will continue to monitor cash inflows

and outflows, taking into consideration anticipated construction costs for large capital projects and unexpected events.

Section 115 Trust Fund
In September 2018, the City Council approved the investment of $28.0 million of various reserves into a Section 115 Trust Fund to help smooth the pension liabilities which are expected to grow in the long run. The investment is made into two separate portfolios, the first for $6.7 million into a Conservative portfolio which is available to pay the annual unfunded liabilities if necessary, and the second for $21.3 million into a long-term Capital Growth portfolio.

In February 2020, the City Council authorized Finance staff to deposit to, and withdraw from, the Conservative portfolio an additional amount up to the total annual required CalPERS payment. In March and September 2020, two additional $5.0 million contributions were deposited into the Conservative portfolio for a total of $16.7 million deposited into the Conservative portfolio.

As presented in the chart below, the Conservative portfolio balance was $20.2 million at the end of September 30, 2024, an increase of $0.7 million from the prior quarter. The Conservative portfolio investment return for the quarter ended September 30, 2024, was 3.63 percent, and the five-year annualized return was 3.99 percent.

The second portfolio (Capital Growth) addresses the longer-term pension liabilities with an initial investment of $21.3 million. The focus of this portfolio is to earn a higher rate of return over the next 10 years or so before the City needs to draw upon it.

The Capital Growth portfolio balance was $33.7 million at the end of September 30, 2024, an increase of $2.1 million from the prior quarter. The Capital Growth portfolio quarterly investment return was 6.90 percent, and the five-year annualized return was 8.91 percent.

The two portfolios total $53.9 million, which are held by a third party for the benefit of the City of Pleasanton at US Bank. US Bank is the contractual agent for PARS trust investments that are managed by PFM Asset Management (formerly Highmark Capital Management).

EQUITY AND SUSTAINABILITY
Not applicable, as this item is a routine administrative matter of City business.

OUTREACH
No outreach was conducted, as this item is a routine administrative matter of City business.

STRATEGIC PLAN ALIGNMENT
Not applicable, as this item is a routine administrative matter of City business.

FISCAL IMPACT
There is no fiscal impact associated with this action.

Prepared by: Submitted by: Approved by:

Dawn DeMarcus, Senior
Budget and Finance Analyst
Susan Hsieh, Director of Finance

Gerry Beaudin, City
Manager

Attachments:

1. September 2024 Disbursements and Investment Report

SEPTEMBER 2024 DISBURSEMENTS
CHECK REGISTER*

DATE CHECK NUMBER AMOUNT
9/5/2024 64287-64387 1,930,935$
9/6/2024 64388-64399 370,771
9/12/2024 64400-64470 4,603,456
9/19/2024 64475-64566 1,089,548
9/20/2024 64584-64610 508,282
9/23/2024 64613 13,368
9/25/2024 64614 30,000
9/26/2024 64615-64733 590,673
9,137,033$

ACH PAYMENTS

DATE CHECK NUMBER AMOUNT
9/5/2024 64279-64286 241,838$
9/12/2024 64471-64474 426,136
9/19/2024 64567-64583 3,146,779
9/20/2024 64611-64612 398,919
9/26/2024 64734-64736 113,344
Payroll & Tax related ACH Payments 997,358
5,324,375$

WIRE TRANSFERS AMOUNT
-$

PAYROLL TRANSFERS

DATE AMOUNT
9/5/2024 1,831,770 $
9/19/2024 1,743,827
3,575,597$
TOTAL DISBURSEMENTS 18,037,004$
* Detailed registers available upon request.

$218,916,144

1.87%
428
*Based on Market value
Total Market Value
Effective Rate of Return
Portfolio Snapshot
Average Days to Maturity
Portfolio Characteristics
September 30, 2024

0.2%17.9%0.7%10.1%1.3%69.4%0.4%Sector Allocation
Certificates of Deposit - Bank
LAIF
Government Money Market
Medium Term Notes
Federal Agency Issues - Coupon
Federal Agency Issues - Callable
Supranationals
- 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,0000-1 Yrs 1-2 Yrs 2-3 Yrs 3-4 Yrs 4-5 Yrs36%52%11%Maturity Distribution17.9%0.2%0.7%4.2%75.7%0.4%0.9%Assigned Credit Ratings of InvestmentsLAIFFDICDRYFUSAAAAAABBB

CITY OF PLEASANTON
Portfolio Management
September 30, 2024
City of Pleasanton
Portfolio Summary
% of
Portfolio
Book
ValueInvestments
Market
Value
Par
Value
Days to
MaturityTerm
YTM
360 Equiv.

YTM
365 Equiv.

Certificates of Deposit - Bank 480,000.00 2330.21 4.483139480,000.00480,000.00 4.545 LAIF 39,305,517.89 117.33 4.419139,160,718.0139,305,517.89 4.480 Gov't Money Market 1,465,257.44 10.65 4.50711,465,257.441,465,257.44 4.570 Medium Term Notes 23,170,318.68 1,81410.22 1.39732422,069,294.0022,600,000.00 1.417 Federal Agency Issues - Coupon 2,995,657.09 1,8251.32 1.2628112,844,060.003,000,000.00 1.280 Federal Agency Issues - Callable 158,420,440.80 1,82269.84 0.903546151,941,614.85158,630,000.00 0.916 Supranationals 980,200.00 1,7040.43 0.922513955,200.001,000,000.00 0.935 226,817,391.90 100.00%
Investments
218,916,144.30226,480,775.33 1,490 428 1.599 1.621
Current Year
September 30
329,659.30
Fiscal Year To Date
1,115,784.52
Average Daily Balance
Effective Rate of Return
229,828,688.26 237,184,108.41

1.87%1.75%
Total Earnings Month Ending
I hereby certify that, to the best of my knowledge, this report includes all investments in the cash management program, is in accordance with the City's current investment policy dated June 18, 2024 and will meet the City's cash flow needs for the next six months. Market value amounts are from Bank of New York Mellon (safekeeping bank) month-end statements. Book value amounts include premiums or discounts and are adjusted at year end on the general ledger. __________________________________________________ ____________________

SUSAN HSIEH, DIRECTOR OF FINANCE
Portfolio PLST
CC
Reporting period 09/01/2024-09/30/2024
Run Date: 11/01/2024 - 11:05 PM (PRF_PM1) 7.3.11
Report Ver. 7.3.11
11/7/2024

YTM
365

Par Value Book Value
Maturity
Date
Stated
RateMarket Value
September 30, 2024
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management

CITY OF PLEASANTON
Days to
Maturity
YTM
360CUSIP Investment #
Purchase
Date
Certificates of Deposit - Bank

4.170Fremont Bank1093-3 230,000.00 230,000.00 12/21/20244.17009/22/2024 230,000.00 4.113SYS-1093 81

4.890United Business Bank1091-2 250,000.00 250,000.00 04/11/20254.89004/11/2024 250,000.00 4.823SYS 1091 192 480,000.00 4.483480,000.00480,000.00478,496.80Subtotal and Average 4.545 139 LAIF

4.480LOCAL AGENCY INVESTMENT FUND5 39,305,517.89 39,305,517.89 4.48039,160,718.01 4.419SYS5 1 39,305,517.89 4.41939,160,718.0139,305,517.8942,472,184.56Subtotal and Average 4.480 1 Gov't Money Market

4.570Dryfus Govt Cash Mgmt 6727 1,465,257.44 1,465,257.44 4.57008/23/2024 1,465,257.44 4.507X9USDCRGO 1 1,465,257.44 4.5071,465,257.441,465,257.44964,723.66Subtotal and Average 4.570 1 Medium Term Notes

2.000Toyota Motor Credit Corp6046 1,600,000.00 1,599,984.00 10/07/20242.00010/24/2019 1,599,184.00 1.97389236TGL3 6

1.965Apple Inc.6049 1,000,000.00 1,037,212.20 01/13/20252.75001/13/2020 994,710.00 1.938037833DF4 104

1.8233M Company6053 2,000,000.00 2,016,869.48 02/14/20252.00002/14/2020 1,977,820.00 1.79888579YBH3 136

1.690EXXON MOBIL CORPORATION6056 3,000,000.00 3,145,587.00 03/06/20252.70903/11/2020 2,973,900.00 1.66730231GAF9 156

1.821Truist Bank6058 2,000,000.00 1,969,486.00 03/10/20251.50003/13/2020 1,971,160.00 1.79689788JAA7 160

1.777EXXON MOBIL CORPORATION6064 2,000,000.00 2,113,800.00 03/19/20252.99204/20/2020 1,984,960.00 1.75330231GBH4 169

1.090Toyota Motor Credit Corp6067 3,000,000.00 2,959,140.00 01/09/20260.80003/09/2021 2,878,050.00 1.07589236THW8 465

0.732Apple Inc.6065 2,000,000.00 1,996,860.00 02/08/20260.70002/08/2021 1,917,180.00 0.722037833EB2 495

0.981Apple Inc.6066 3,000,000.00 3,331,380.00 02/23/20263.25002/23/2021 2,973,150.00 0.967037833BY5 510

1.100JPMorgan Chase Bank NA6068 3,000,000.00 3,000,000.00 06/22/20261.10006/22/2021 2,799,180.00 1.08546632FSCO 629 23,170,318.68 1.39722,069,294.0022,600,000.0023,516,985.35Subtotal and Average 1.417 324 Federal Agency Issues - Coupon

1.280FEDERAL HOME LOAN BANK3576 3,000,000.00 2,995,657.09 12/21/20261.25012/22/2021 2,844,060.00 1.2623130AQF65 811 2,995,657.09 1.2622,844,060.003,000,000.002,995,657.09Subtotal and Average 1.280 811 Federal Agency Issues - Callable

0.707FREDDIE MAC4535 3,000,000.00 2,998,950.00 06/23/20250.70006/23/2020 2,923,410.00 0.6973134GVZ68 265

0.715FEDERAL FARM CREDIT BANK4537 3,000,000.00 2,997,750.00 06/30/20250.70007/06/2020 2,919,390.00 0.7063133ELQ49 272

0.707FEDERAL NATIONAL MORTGAGE ASSN4538 3,250,000.00 3,248,862.50 07/14/20250.70007/14/2020 3,160,300.00 0.6973136G4YH0 286

0.710FEDERAL NATIONAL MORTGAGE ASSN4541 3,000,000.00 3,000,000.00 07/22/20250.71007/22/2020 2,914,980.00 0.7003136G4A45 294

0.620FEDERAL HOME LOAN BANK4544 3,000,000.00 2,997,000.00 08/27/20250.60008/27/2020 2,907,150.00 0.6123130AJZ36 330

0.657FREDDIE MAC4545 3,000,000.00 2,998,950.00 09/09/20250.65009/09/2020 2,900,160.00 0.6483134GWA55 343

0.550FEDERAL FARM CREDIT BANK4548 3,340,000.00 3,336,660.00 09/29/20250.53010/05/2020 3,235,825.40 0.5433133EMBJ0 363

0.550FREDDIE MAC4547 3,000,000.00 3,000,000.00 09/30/20250.55009/30/2020 2,898,450.00 0.5423134GWW93 364 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM2) 7.3.11
Report Ver. 7.3.11

YTM
365

Par Value Book Value
Maturity
Date
Stated
RateMarket Value
September 30, 2024
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management

CITY OF PLEASANTON
Days to
Maturity
YTM
360CUSIP Investment #
Purchase
Date
Federal Agency Issues - Callable

0.566FREDDIE MAC4549 3,000,000.00 2,997,600.00 09/30/20250.55010/07/2020 2,900,280.00 0.5593134GWWT9 364

0.600FREDDIE MAC4550 3,000,000.00 3,000,000.00 10/28/20250.60010/28/2020 2,901,060.00 0.5923134GW3F1 392

0.595FEDERAL HOME LOAN BANK4553 3,000,000.00 2,996,250.00 11/25/20250.57011/25/2020 2,885,700.00 0.5873130AKGD2 420

0.600FEDERAL NATIONAL MORTGAGE ASSN4552 3,000,000.00 3,000,000.00 11/25/20250.60011/25/2020 2,893,830.00 0.5923135GA3W9 420

0.620FREDDIE MAC4554 3,000,000.00 3,000,000.00 12/01/20250.62012/01/2020 2,893,110.00 0.6123134GXDM3 426

0.625FEDERAL HOME LOAN BANK4555 3,000,000.00 3,000,000.00 01/22/20260.62501/22/2021 2,875,800.00 0.6163130AKQ74 478

0.650FEDERAL HOME LOAN BANK4557 3,000,000.00 3,000,000.00 01/28/20260.65001/28/2021 2,875,170.00 0.6413130AKRN8 484

0.550FEDERAL NATIONAL MORTGAGE ASSN4556 3,000,000.00 3,000,000.00 01/28/20260.55001/28/2021 2,876,610.00 0.5423135G06R9 484

0.110FEDERAL HOME LOAN BANK4558 3,000,000.00 3,000,000.00 02/12/20260.60002/12/2021 2,868,750.00 0.1093130AKXQ4 499

0.625FEDERAL HOME LOAN BANK4560 3,000,000.00 3,000,000.00 02/17/20260.62502/17/2021 2,868,900.00 0.6163130AL3S1 504

0.650FEDERAL HOME LOAN BANK4561 3,000,000.00 3,000,000.00 02/24/20260.65002/24/2021 2,866,230.00 0.6413130AL5X8 511

0.616FEDERAL HOME LOAN BANK4562 3,125,000.00 3,122,500.00 02/24/20260.60002/24/2021 2,985,406.25 0.6083130AKXJ0 511

0.750FEDERAL HOME LOAN BANK4563 3,000,000.00 3,000,000.00 02/24/20260.75002/24/2021 2,868,600.00 0.7403130ALCV4 511

0.650FEDERAL HOME LOAN BANK4559 3,000,000.00 3,000,000.00 02/26/20260.65002/26/2021 2,867,460.00 0.6413130AKZ25 513

0.922FEDERAL HOME LOAN BANK4572 3,000,000.00 2,989,560.00 02/26/20260.85003/15/2021 2,871,450.00 0.9093130ALGR9 513

0.947FEDERAL HOME LOAN BANK4574 3,000,000.00 2,985,960.00 02/26/20260.85003/18/2021 2,871,450.00 0.9343130ALGR9 513

0.971FEDERAL HOME LOAN BANK4577 3,000,000.00 2,982,510.00 02/26/20260.85003/22/2021 2,871,450.00 0.9583130ALGR9 513

1.000FEDERAL HOME LOAN BANK4579 3,000,000.00 2,978,517.00 02/26/20260.85003/31/2021 2,871,450.00 0.9863130ALGR9 513

0.800FEDERAL HOME LOAN BANK4565 3,000,000.00 3,000,000.00 03/16/20260.80003/16/2021 2,869,440.00 0.7893130ALDN1 531

0.875FEDERAL HOME LOAN BANK4569 3,000,000.00 3,000,000.00 03/23/20260.87503/23/2021 2,869,260.00 0.8633130ALGC2 538

0.959FEDERAL HOME LOAN BANK4576 3,000,000.00 2,987,700.00 03/23/20260.87503/23/2021 2,869,260.00 0.9463130ALGC2 538

1.050FEDERAL FARM CREDIT BANK4575 3,000,000.00 3,000,000.00 03/25/20261.05003/25/2021 2,882,580.00 1.0363133EMUK6 540

1.000FEDERAL HOME LOAN BANK4571 3,000,000.00 3,000,000.00 03/30/20261.00003/30/2021 2,874,120.00 0.9863130ALMM3 545

0.993FEDERAL HOME LOAN BANK4578 3,000,000.00 2,998,050.00 03/30/20260.98003/30/2021 2,873,250.00 0.9803130ALNT7 545

1.026FEDERAL HOME LOAN BANK4581 3,000,000.00 2,996,250.00 03/30/20261.00004/05/2021 2,874,120.00 1.0123130ALMM3 545

1.051FEDERAL HOME LOAN BANK4580 3,000,000.00 2,995,500.00 04/15/20261.02004/15/2021 2,871,570.00 1.0363130ALUC6 561

1.020FEDERAL HOME LOAN BANK4585 2,795,000.00 2,795,000.00 05/19/20261.02005/20/2021 2,650,889.80 1.0063130AMCL4 595

1.010FEDERAL HOME LOAN BANK4587 3,000,000.00 2,998,500.00 05/26/20261.00005/26/2021 2,861,130.00 0.9963130AMH62 602

0.987FEDERAL HOME LOAN BANK4588 3,000,000.00 2,998,950.00 05/26/20260.98005/26/2021 2,859,600.00 0.9743130AMGW6 602

0.901FEDERAL HOME LOAN BANK4590 2,750,000.00 2,746,562.50 05/26/20260.87506/02/2021 2,616,735.00 0.8883130AMHB1 602

1.000FEDERAL HOME LOAN BANK4591 1,500,000.00 1,500,000.00 05/26/20261.00006/02/2021 1,430,565.00 0.9863130AMH62 602

0.921FEDERAL FARM CREDIT BANK4595 3,000,000.00 2,997,000.00 06/15/20260.90006/24/2021 2,857,020.00 0.9083133EMH21 622

1.030FEDERAL HOME LOAN BANK4592 3,000,000.00 3,000,000.00 06/30/20261.03006/30/2021 2,858,820.00 1.0163130AMSL7 637

1.070FEDERAL HOME LOAN BANK4594 3,000,000.00 3,000,000.00 06/30/20261.07006/30/2021 2,860,830.00 1.0553130AMYA4 637

1.000FEDERAL HOME LOAN BANK4596 1,500,000.00 1,500,000.00 06/30/20261.00006/30/2021 1,429,080.00 0.9863130AN2Q2 637

1.025FEDERAL HOME LOAN BANK4597 3,000,000.00 2,999,250.00 07/14/20261.02007/14/2021 2,854,710.00 1.0113130AMWK4 651

1.033FEDERAL HOME LOAN BANK4598 3,000,000.00 2,983,500.00 09/30/20260.92009/30/2021 2,832,900.00 1.0193130AP2P9 729

1.085FEDERAL HOME LOAN BANK4599 3,000,000.00 2,997,750.00 10/14/20261.07010/14/2021 2,841,120.00 1.0713130APC94 743 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM2) 7.3.11

YTM
365

Par Value Book Value
Maturity
Date
Stated
RateMarket Value
September 30, 2024
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management

CITY OF PLEASANTON
Days to
Maturity
YTM
360CUSIP Investment #
Purchase
Date
Federal Agency Issues - Callable

1.421FEDERAL HOME LOAN BANK4600 530,000.00 526,947.20 11/24/20261.30012/09/2021 502,874.60 1.4013130APU78 784

1.421FEDERAL HOME LOAN BANK4601 1,840,000.00 1,829,401.60 11/24/20261.30012/09/2021 1,745,828.80 1.4013130APUR4 784

1.459FEDERAL HOME LOAN BANK4602 3,000,000.00 2,988,000.00 12/01/20261.37512/09/2021 2,849,550.00 1.4393130APVC6 791

1.425FEDERAL HOME LOAN BANK4605 3,000,000.00 2,999,250.00 12/29/20261.42001/03/2022 2,848,470.00 1.4063130AQG80 819

1.541FEDERAL HOME LOAN BANK4606 3,000,000.00 2,982,750.00 12/29/20261.42001/10/2022 2,848,470.00 1.5193130AQG80 819

1.370FEDERAL HOME LOAN BANK4603 3,000,000.00 3,000,000.00 12/30/20261.37012/30/2021 2,843,700.00 1.3513130AQEC3 820

1.385FEDERAL HOME LOAN BANK4604 3,000,000.00 2,998,500.00 12/30/20261.37512/30/2021 2,844,030.00 1.3663130AQEF6 820

1.926FEDERAL HOME LOAN BANK4607 3,000,000.00 2,975,010.00 01/28/20271.75002/08/2022 2,865,630.00 1.9003130AQLD3 849

2.112FEDERAL HOME LOAN BANK4608 3,000,000.00 2,995,500.00 02/25/20272.08003/08/2022 2,883,690.00 2.0833130AQW66 877 158,420,440.80 0.903151,941,614.85158,630,000.00158,420,440.80Subtotal and Average 0.916 546 Supranationals

0.935International Finance Corp7000 1,000,000.00 980,200.00 02/26/20260.50006/28/2021 955,200.00 0.92245950VPS9 513 980,200.00 0.922955,200.001,000,000.00980,200.00Subtotal and Average 0.935 513

1.599229,828,688.26 226,480,775.33 1.621 428218,916,144.30 226,817,391.90Total and Average Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM2) 7.3.11

Par Value Book Value
Maturity
Date
Accrued
InterestMarket Value
September 30, 2024
Portfolio Details with Earnings - Investments
Average
BalanceIssuer
Portfolio Management

CITY OF PLEASANTON
CUSIP Investment #
Purchase
Date
Days To
Maturity
Unrealized
Gain/Loss
Current
Rate YTM
Certificates of Deposit - Bank
FREMON1093-3 230,000.00 230,000.00 12/21/202409/22/2024 230,000.00SYS-1093 236.49 0.004.1704.170 81 VCB1091-2 250,000.00 250,000.00 04/11/202504/11/2024 250,000.00SYS 1091 5,794.32 0.004.8904.890 192 480,000.00480,000.00480,000.00478,496.80Subtotal and Average 6,030.81 0.00139 4.5454.545 LAIF
LAIF5 39,305,517.89 39,305,517.8939,160,718.01SYS5 503,088.39 -144,799.884.4804.480 1 39,305,517.8939,160,718.0139,305,517.8942,472,184.56Subtotal and Average 503,088.39 -144,799.881 4.4804.480 Gov't Money Market
DRYFUS7 1,465,257.44 1,465,257.4408/23/2024 1,465,257.44X9USDCRGO 3,894.66 0.004.5704.570 1 1,465,257.441,465,257.441,465,257.44964,723.66Subtotal and Average 3,894.66 0.001 4.5704.570 Medium Term Notes
TOYOTA6046 1,600,000.00 1,599,984.00 10/07/202410/24/2019 1,599,184.0089236TGL3 15,466.67 -800.002.0002.000 6 APPL6049 1,000,000.00 1,037,212.20 01/13/202501/13/2020 994,710.00037833DF4 5,958.33 -42,502.201.9642.750 104 3M6053 2,000,000.00 2,016,869.48 02/14/202502/14/2020 1,977,820.0088579YBH3 5,222.22 -39,049.481.8222.000 136 XOM6056 3,000,000.00 3,145,587.00 03/06/202503/11/2020 2,973,900.0030231GAF9 5,643.75 -171,687.001.6892.709 156 TRU6058 2,000,000.00 1,969,486.00 03/10/202503/13/2020 1,971,160.0089788JAA7 1,750.00 1,674.001.8211.500 160 XOM6064 2,000,000.00 2,113,800.00 03/19/202504/20/2020 1,984,960.0030231GBH4 1,994.67 -128,840.001.7772.992 169 TOYOTA6067 3,000,000.00 2,959,140.00 01/09/202603/09/2021 2,878,050.0089236THW8 5,466.66 -81,090.001.0900.800 465 APPL6065 2,000,000.00 1,996,860.00 02/08/202602/08/2021 1,917,180.00037833EB2 2,061.11 -79,680.000.7320.700 495 APPL6066 3,000,000.00 3,331,380.00 02/23/202602/23/2021 2,973,150.00037833BY5 10,291.67 -358,230.000.9803.250 510 JP6068 3,000,000.00 3,000,000.00 06/22/202606/22/2021 2,799,180.0046632FSCO 9,075.00 -200,820.001.1001.100 629 23,170,318.6822,069,294.0022,600,000.0023,516,985.35Subtotal and Average 62,930.08 -1,101,024.68324 1.4171.976 Federal Agency Issues - Coupon
FHLB3576 3,000,000.00 2,995,657.09 12/21/202612/22/2021 2,844,060.003130AQF65 10,416.66 -151,597.091.2801.250 811 2,995,657.092,844,060.003,000,000.002,995,657.09Subtotal and Average 10,416.66 -151,597.09811 1.2801.250 Federal Agency Issues - Callable
FHLMC4535 3,000,000.00 2,998,950.00 06/23/202506/23/2020 2,923,410.003134GVZ68 5,716.67 -75,540.000.7070.700 265 FFCB4537 3,000,000.00 2,997,750.00 06/30/202507/06/2020 2,919,390.003133ELQ49 5,308.33 -78,360.000.7150.700 272 FNMA4538 3,250,000.00 3,248,862.50 07/14/202507/14/2020 3,160,300.003136G4YH0 4,865.97 -88,562.500.7070.700 286 FNMA4541 3,000,000.00 3,000,000.00 07/22/202507/22/2020 2,914,980.003136G4A45 4,082.50 -85,020.000.7100.710 294 FHLB4544 3,000,000.00 2,997,000.00 08/27/202508/27/2020 2,907,150.003130AJZ36 1,700.00 -89,850.000.6200.600 330 FHLMC4545 3,000,000.00 2,998,950.00 09/09/202509/09/2020 2,900,160.003134GWA55 1,191.67 -98,790.000.6570.650 343 FFCB4548 3,340,000.00 3,336,660.00 09/29/202510/05/2020 3,235,825.403133EMBJ0 98.34 -100,834.600.5500.530 363 FHLMC4547 3,000,000.00 3,000,000.00 09/30/202509/30/2020 2,898,450.003134GWW93 45.83 -101,550.000.5500.550 364 FHLMC4549 3,000,000.00 2,997,600.00 09/30/202510/07/2020 2,900,280.003134GWWT9 45.83 -97,320.000.5660.550 364 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM8) 7.3.11
Report Ver. 7.3.11

Par Value Book Value
Maturity
Date
Accrued
InterestMarket Value
September 30, 2024
Portfolio Details with Earnings - Investments
Average
BalanceIssuer
Portfolio Management

CITY OF PLEASANTON
CUSIP Investment #
Purchase
Date
Days To
Maturity
Unrealized
Gain/Loss
Current
Rate YTM
Federal Agency Issues - Callable
FHLMC4550 3,000,000.00 3,000,000.00 10/28/202510/28/2020 2,901,060.003134GW3F1 7,650.00 -98,940.000.6000.600 392 FHLB4553 3,000,000.00 2,996,250.00 11/25/202511/25/2020 2,885,700.003130AKGD2 5,985.00 -110,550.000.5950.570 420 FNMA4552 3,000,000.00 3,000,000.00 11/25/202511/25/2020 2,893,830.003135GA3W9 6,300.00 -106,170.000.6000.600 420 FHLMC4554 3,000,000.00 3,000,000.00 12/01/202512/01/2020 2,893,110.003134GXDM3 6,200.00 -106,890.000.6200.620 426 FHLB4555 3,000,000.00 3,000,000.00 01/22/202601/22/2021 2,875,800.003130AKQ74 3,593.75 -124,200.000.6250.625 478 FHLB4557 3,000,000.00 3,000,000.00 01/28/202601/28/2021 2,875,170.003130AKRN8 3,412.50 -124,830.000.6500.650 484 FNMA4556 3,000,000.00 3,000,000.00 01/28/202601/28/2021 2,876,610.003135G06R9 2,887.50 -123,390.000.5500.550 484 FHLB4558 3,000,000.00 3,000,000.00 02/12/202602/12/2021 2,868,750.003130AKXQ4 2,450.00 -131,250.000.1100.600 499 FHLB4560 3,000,000.00 3,000,000.00 02/17/202602/17/2021 2,868,900.003130AL3S1 2,291.67 -131,100.000.6250.625 504 FHLB4561 3,000,000.00 3,000,000.00 02/24/202602/24/2021 2,866,230.003130AL5X8 2,004.17 -133,770.000.6500.650 511 FHLB4562 3,125,000.00 3,122,500.00 02/24/202602/24/2021 2,985,406.253130AKXJ0 1,927.08 -137,093.750.6160.600 511 FHLB4563 3,000,000.00 3,000,000.00 02/24/202602/24/2021 2,868,600.003130ALCV4 2,312.50 -131,400.000.7500.750 511 FHLB4559 3,000,000.00 3,000,000.00 02/26/202602/26/2021 2,867,460.003130AKZ25 1,895.83 -132,540.000.6500.650 513 FHLB4572 3,000,000.00 2,989,560.00 02/26/202603/15/2021 2,871,450.003130ALGR9 2,479.17 -118,110.000.9220.850 513 FHLB4574 3,000,000.00 2,985,960.00 02/26/202603/18/2021 2,871,450.003130ALGR9 2,479.17 -114,510.000.9470.850 513 FHLB4577 3,000,000.00 2,982,510.00 02/26/202603/22/2021 2,871,450.003130ALGR9 2,479.17 -111,060.000.9710.850 513 FHLB4579 3,000,000.00 2,978,517.00 02/26/202603/31/2021 2,871,450.003130ALGR9 2,479.17 -107,067.001.0000.850 513 FHLB4565 3,000,000.00 3,000,000.00 03/16/202603/16/2021 2,869,440.003130ALDN1 1,000.00 -130,560.000.8000.800 531 FHLB4569 3,000,000.00 3,000,000.00 03/23/202603/23/2021 2,869,260.003130ALGC2 583.33 -130,740.000.8750.875 538 FHLB4576 3,000,000.00 2,987,700.00 03/23/202603/23/2021 2,869,260.003130ALGC2 583.33 -118,440.000.9590.875 538 FFCB4575 3,000,000.00 3,000,000.00 03/25/202603/25/2021 2,882,580.003133EMUK6 525.00 -117,420.001.0501.050 540 FHLB4571 3,000,000.00 3,000,000.00 03/30/202603/30/2021 2,874,120.003130ALMM3 83.33 -125,880.001.0001.000 545 FHLB4578 3,000,000.00 2,998,050.00 03/30/202603/30/2021 2,873,250.003130ALNT7 81.67 -124,800.000.9930.980 545 FHLB4581 3,000,000.00 2,996,250.00 03/30/202604/05/2021 2,874,120.003130ALMM3 83.33 -122,130.001.0251.000 545 FHLB4580 3,000,000.00 2,995,500.00 04/15/202604/15/2021 2,871,570.003130ALUC6 14,110.00 -123,930.001.0501.020 561 FHLB4585 2,795,000.00 2,795,000.00 05/19/202605/20/2021 2,650,889.803130AMCL4 10,453.30 -144,110.201.0191.020 595 FHLB4587 3,000,000.00 2,998,500.00 05/26/202605/26/2021 2,861,130.003130AMH62 10,416.67 -137,370.001.0101.000 602 FHLB4588 3,000,000.00 2,998,950.00 05/26/202605/26/2021 2,859,600.003130AMGW6 10,208.33 -139,350.000.9870.980 602 FHLB4590 2,750,000.00 2,746,562.50 05/26/202606/02/2021 2,616,735.003130AMHB1 8,355.03 -129,827.500.9000.875 602 FHLB4591 1,500,000.00 1,500,000.00 05/26/202606/02/2021 1,430,565.003130AMH62 5,208.33 -69,435.000.9991.000 602 FFCB4595 3,000,000.00 2,997,000.00 06/15/202606/24/2021 2,857,020.003133EMH21 7,950.00 -139,980.000.9200.900 622 FHLB4592 3,000,000.00 3,000,000.00 06/30/202606/30/2021 2,858,820.003130AMSL7 7,810.83 -141,180.001.0301.030 637 FHLB4594 3,000,000.00 3,000,000.00 06/30/202606/30/2021 2,860,830.003130AMYA4 8,114.17 -139,170.001.0701.070 637 FHLB4596 1,500,000.00 1,500,000.00 06/30/202606/30/2021 1,429,080.003130AN2Q2 3,791.67 -70,920.001.0001.000 637 FHLB4597 3,000,000.00 2,999,250.00 07/14/202607/14/2021 2,854,710.003130AMWK4 6,545.00 -144,540.001.0251.020 651 FHLB4598 3,000,000.00 2,983,500.00 09/30/202609/30/2021 2,832,900.003130AP2P9 76.67 -150,600.001.0330.920 729 FHLB4599 3,000,000.00 2,997,750.00 10/14/202610/14/2021 2,841,120.003130APC94 14,890.83 -156,630.001.0851.070 743 FHLB4600 530,000.00 526,947.20 11/24/202612/09/2021 502,874.603130APU78 2,430.64 -24,072.601.4201.300 784 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM8) 7.3.11

Par Value Book Value
Maturity
Date
Accrued
InterestMarket Value
September 30, 2024
Portfolio Details with Earnings - Investments
Average
BalanceIssuer
Portfolio Management

CITY OF PLEASANTON
CUSIP Investment #
Purchase
Date
Days To
Maturity
Unrealized
Gain/Loss
Current
Rate YTM
Federal Agency Issues - Callable
FHLB4601 1,840,000.00 1,829,401.60 11/24/202612/09/2021 1,745,828.803130APUR4 8,438.44 -83,572.801.4201.300 784 FHLB4602 3,000,000.00 2,988,000.00 12/01/202612/09/2021 2,849,550.003130APVC6 13,750.00 -138,450.001.4581.375 791 FHLB4605 3,000,000.00 2,999,250.00 12/29/202601/03/2022 2,848,470.003130AQG80 10,886.67 -150,780.001.4251.420 819 FHLB4606 3,000,000.00 2,982,750.00 12/29/202601/10/2022 2,848,470.003130AQG80 10,886.67 -134,280.001.5401.420 819 FHLB4603 3,000,000.00 3,000,000.00 12/30/202612/30/2021 2,843,700.003130AQEC3 10,389.17 -156,300.001.3701.370 820 FHLB4604 3,000,000.00 2,998,500.00 12/30/202612/30/2021 2,844,030.003130AQEF6 10,427.08 -154,470.001.3851.375 820 FHLB4607 3,000,000.00 2,975,010.00 01/28/202702/08/2022 2,865,630.003130AQLD3 9,187.50 -109,380.001.9261.750 849 FHLB4608 3,000,000.00 2,995,500.00 02/25/202703/08/2022 2,883,690.003130AQW66 6,240.00 -111,810.002.1112.080 877 158,420,440.80151,941,614.85158,630,000.00158,420,440.80Subtotal and Average 275,388.81 -6,478,825.95546 0.9160.898 Supranationals
IFC7000 1,000,000.00 980,200.00 02/26/202606/28/2021 955,200.0045950VPS9 486.11 -25,000.000.9350.500 513 980,200.00955,200.001,000,000.00980,200.00Subtotal and Average 486.11 -25,000.00513 0.9350.500 226,480,775.33 218,916,144.30 226,817,391.90 1.663 428 1.621 862,235.52 -7,901,247.60229,828,688.26Total and Average Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM8) 7.3.11

Par Value
Stated
Rate
September 30, 2024
Investment Status Report - Investments
Portfolio Management
Book Value
Maturity
Date
Current
Principal

CITY OF PLEASANTON
S&P
YTM
Moody'sCUSIP Investment # Issuer
Purchase
Date
Accrued Interest
At Purchase
Certificates of Deposit - Bank
FREMON1093-3 230,000.00 230,000.004.17012/21/2024SYS-1093 09/22/2024 230,000.004.170 VCB1091-2 250,000.00 250,000.004.89004/11/2025SYS 1091 04/11/2024 250,000.004.890 480,000.00Certificates of Deposit - Bank Totals 480,000.000.004.545480,000.00 LAIF
LAIF5 39,305,517.89 39,305,517.894.480SYS5 39,305,517.894.480 39,305,517.89LAIF Totals 39,305,517.890.004.48039,305,517.89 Gov't Money Market
DRYFUS7 1,465,257.44 1,465,257.444.570X9USDCRGO 08/23/2024 1,465,257.444.570 1,465,257.44Gov't Money Market Totals 1,465,257.440.004.5701,465,257.44 Medium Term Notes
TOYOTA6046 1,600,000.00 1,599,984.002.00010/07/202489236TGL3 A Received10/24/2019 1,599,984.00A2.000 APPL6049 1,000,000.00 1,037,212.202.75001/13/2025037833DF4 Aaa01/13/2020 1,037,212.20AA1.965 3M6053 2,000,000.00 2,016,869.482.00002/14/202588579YBH3 A02/14/2020 2,016,869.48BBB1.823 XOM6056 3,000,000.00 3,145,587.002.70903/06/202530231GAF9 Aa Received03/11/2020 3,145,587.00AA1.690 TRU6058 2,000,000.00 1,969,486.001.50003/10/202589788JAA7 A Received03/13/2020 1,969,486.00A1.821 XOM6064 2,000,000.00 2,113,800.002.99203/19/202530231GBH4 Aa Received04/20/2020 2,113,800.00AA1.777 TOYOTA6067 3,000,000.00 2,959,140.000.80001/09/202689236THW8 A Received03/09/2021 2,959,140.00A1.090 APPL6065 2,000,000.00 1,996,860.000.70002/08/2026037833EB2 Aaa02/08/2021 1,996,860.00AA0.732 APPL6066 3,000,000.00 3,331,380.003.25002/23/2026037833BY5 Aaa02/23/2021 3,331,380.00AA0.981 JP6068 3,000,000.00 3,000,000.001.10006/22/202646632FSCO Aa06/22/2021 3,000,000.00A1.100 23,170,318.68Medium Term Notes Totals 23,170,318.680.001.41722,600,000.00 Federal Agency Issues - Coupon
FHLB3576 3,000,000.00 2,995,657.091.25012/21/20263130AQF65 Aaa12/22/2021 2,995,657.09AA1.280 2,995,657.09Federal Agency Issues - Coupon Totals 2,995,657.090.001.2803,000,000.00 Federal Agency Issues - Callable
FHLMC4535 3,000,000.00 2,998,950.000.70006/23/20253134GVZ68 Aaa06/23/2020 2,998,950.00AA0.707 FFCB4537 3,000,000.00 2,997,750.000.70006/30/20253133ELQ49 Aaa Received07/06/2020 2,997,750.00AA0.715 FNMA4538 3,250,000.00 3,248,862.500.70007/14/20253136G4YH0 07/14/2020 3,248,862.50AA0.707 FNMA4541 3,000,000.00 3,000,000.000.71007/22/20253136G4A45 Aaa07/22/2020 3,000,000.00AA0.710 FHLB4544 3,000,000.00 2,997,000.000.60008/27/20253130AJZ36 Aaa08/27/2020 2,997,000.00AA0.620 FHLMC4545 3,000,000.00 2,998,950.000.65009/09/20253134GWA55 Aaa09/09/2020 2,998,950.00AA0.657 FFCB4548 3,340,000.00 3,336,660.000.53009/29/20253133EMBJ0 Aaa Received10/05/2020 3,336,660.00AA0.550 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PMS) 7.3.11
Report Ver. 7.3.11

Par Value
Stated
Rate
September 30, 2024
Investment Status Report - Investments
Portfolio Management
Book Value
Maturity
Date
Current
Principal

CITY OF PLEASANTON
S&P
YTM
Moody'sCUSIP Investment # Issuer
Purchase
Date
Accrued Interest
At Purchase
Federal Agency Issues - Callable
FHLMC4547 3,000,000.00 3,000,000.000.55009/30/20253134GWW93 Aaa09/30/2020 3,000,000.00AA0.550 FHLMC4549 3,000,000.00 2,997,600.000.55009/30/20253134GWWT9 Aaa Received10/07/2020 2,997,600.000.566 FHLMC4550 3,000,000.00 3,000,000.000.60010/28/20253134GW3F1 Aaa10/28/2020 3,000,000.000.600 FHLB4553 3,000,000.00 2,996,250.000.57011/25/20253130AKGD2 Aaa11/25/2020 2,996,250.00AA0.595 FNMA4552 3,000,000.00 3,000,000.000.60011/25/20253135GA3W9 Aaa11/25/2020 3,000,000.00AA0.600 FHLMC4554 3,000,000.00 3,000,000.000.62012/01/20253134GXDM3 Aaa12/01/2020 3,000,000.000.620 FHLB4555 3,000,000.00 3,000,000.000.62501/22/20263130AKQ74 Aaa01/22/2021 3,000,000.00AA0.625 FHLB4557 3,000,000.00 3,000,000.000.65001/28/20263130AKRN8 Aaa01/28/2021 3,000,000.00AA0.650 FNMA4556 3,000,000.00 3,000,000.000.55001/28/20263135G06R9 Aaa01/28/2021 3,000,000.00AA0.550 FHLB4558 3,000,000.00 3,000,000.000.60002/12/20263130AKXQ4 Aaa02/12/2021 3,000,000.00AA0.110 FHLB4560 3,000,000.00 3,000,000.000.62502/17/20263130AL3S1 Aaa02/17/2021 3,000,000.00AA0.625 FHLB4561 3,000,000.00 3,000,000.000.65002/24/20263130AL5X8 Aaa02/24/2021 3,000,000.00AA0.650 FHLB4562 3,125,000.00 3,122,500.000.60002/24/20263130AKXJ0 02/24/2021 3,122,500.00AA0.616 FHLB4563 3,000,000.00 3,000,000.000.75002/24/20263130ALCV4 02/24/2021 3,000,000.00AA0.750 FHLB4559 3,000,000.00 3,000,000.000.65002/26/20263130AKZ25 Aaa02/26/2021 3,000,000.00AA0.650 FHLB4572 3,000,000.00 2,989,560.000.85002/26/20263130ALGR9 Aaa Received03/15/2021 2,989,560.00AA0.922 FHLB4574 3,000,000.00 2,985,960.000.85002/26/20263130ALGR9 Aaa Received03/18/2021 2,985,960.00AA0.947 FHLB4577 3,000,000.00 2,982,510.000.85002/26/20263130ALGR9 Aaa Received03/22/2021 2,982,510.00AA0.971 FHLB4579 3,000,000.00 2,978,517.000.85002/26/20263130ALGR9 Aaa Received03/31/2021 2,978,517.00AA1.000 FHLB4565 3,000,000.00 3,000,000.000.80003/16/20263130ALDN1 Aaa03/16/2021 3,000,000.00AA0.800 FHLB4569 3,000,000.00 3,000,000.000.87503/23/20263130ALGC2 Aaa03/23/2021 3,000,000.00AA0.875 FHLB4576 3,000,000.00 2,987,700.000.87503/23/20263130ALGC2 Aaa03/23/2021 2,987,700.00AA0.959 FFCB4575 3,000,000.00 3,000,000.001.05003/25/20263133EMUK6 Aaa03/25/2021 3,000,000.00AA1.050 FHLB4571 3,000,000.00 3,000,000.001.00003/30/20263130ALMM3 Aaa03/30/2021 3,000,000.00AA1.000 FHLB4578 3,000,000.00 2,998,050.000.98003/30/20263130ALNT7 Aaa03/30/2021 2,998,050.00AA0.993 FHLB4581 3,000,000.00 2,996,250.001.00003/30/20263130ALMM3 Aaa Received04/05/2021 2,996,250.00AA1.026 FHLB4580 3,000,000.00 2,995,500.001.02004/15/20263130ALUC6 Aaa04/15/2021 2,995,500.00AA1.051 FHLB4585 2,795,000.00 2,795,000.001.02005/19/20263130AMCL4 Aaa Received05/20/2021 2,795,000.00AA1.020 FHLB4587 3,000,000.00 2,998,500.001.00005/26/20263130AMH62 Aaa05/26/2021 2,998,500.00AA1.010 FHLB4588 3,000,000.00 2,998,950.000.98005/26/20263130AMGW6 Aaa05/26/2021 2,998,950.00AA0.987 FHLB4590 2,750,000.00 2,746,562.500.87505/26/20263130AMHB1 Aaa Received06/02/2021 2,746,562.50AA0.901 FHLB4591 1,500,000.00 1,500,000.001.00005/26/20263130AMH62 Aaa Received06/02/2021 1,500,000.00AA1.000 FFCB4595 3,000,000.00 2,997,000.000.90006/15/20263133EMH21 Aaa Received06/24/2021 2,997,000.00AA0.921 FHLB4592 3,000,000.00 3,000,000.001.03006/30/20263130AMSL7 Aaa06/30/2021 3,000,000.00AA1.030 FHLB4594 3,000,000.00 3,000,000.001.07006/30/20263130AMYA4 Aaa06/30/2021 3,000,000.00AA1.070 FHLB4596 1,500,000.00 1,500,000.001.00006/30/20263130AN2Q2 Aaa06/30/2021 1,500,000.00AA1.000 FHLB4597 3,000,000.00 2,999,250.001.02007/14/20263130AMWK4 Aaa07/14/2021 2,999,250.00AA1.025 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PMS) 7.3.11

Par Value
Stated
Rate
September 30, 2024
Investment Status Report - Investments
Portfolio Management
Book Value
Maturity
Date
Current
Principal

CITY OF PLEASANTON
S&P
YTM
Moody'sCUSIP Investment # Issuer
Purchase
Date
Accrued Interest
At Purchase
Federal Agency Issues - Callable
FHLB4598 3,000,000.00 2,983,500.000.92009/30/20263130AP2P9 Aaa09/30/2021 2,983,500.00AA1.033 FHLB4599 3,000,000.00 2,997,750.001.07010/14/20263130APC94 Aaa10/14/2021 2,997,750.00AA1.085 FHLB4600 530,000.00 526,947.201.30011/24/20263130APU78 Aaa Received12/09/2021 526,947.20AA1.421 FHLB4601 1,840,000.00 1,829,401.601.30011/24/20263130APUR4 Aaa Received12/09/2021 1,829,401.60AA1.421 FHLB4602 3,000,000.00 2,988,000.001.37512/01/20263130APVC6 Aaa Received12/09/2021 2,988,000.00AA1.459 FHLB4605 3,000,000.00 2,999,250.001.42012/29/20263130AQG80 Aaa Received01/03/2022 2,999,250.00AA1.425 FHLB4606 3,000,000.00 2,982,750.001.42012/29/20263130AQG80 Aaa Received01/10/2022 2,982,750.00AA1.541 FHLB4603 3,000,000.00 3,000,000.001.37012/30/20263130AQEC3 Aaa12/30/2021 3,000,000.00AA1.370 FHLB4604 3,000,000.00 2,998,500.001.37512/30/20263130AQEF6 Aaa12/30/2021 2,998,500.00AA1.385 FHLB4607 3,000,000.00 2,975,010.001.75001/28/20273130AQLD3 Aaa Received02/08/2022 2,975,010.00AA1.926 FHLB4608 3,000,000.00 2,995,500.002.08002/25/20273130AQW66 Aaa Received03/08/2022 2,995,500.00AA2.112 158,420,440.80Federal Agency Issues - Callable Totals 158,420,440.800.000.916158,630,000.00 Supranationals
IFC7000 1,000,000.00 980,200.000.50002/26/202645950VPS9 Aaa Received06/28/2021 980,200.00AAA0.935 980,200.00Supranationals Totals 980,200.000.000.9351,000,000.00 226,817,391.90Investment Totals 226,817,391.900.00226,480,775.33 1.621 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PMS) 7.3.11

Stated
Rate
Transaction
Date
September 1, 2024 through September 30, 2024
Activity By Type
Balance
Portfolio Management

CITY OF PLEASANTON
CUSIP Investment # Issuer
Purchases
or Deposits
Redemptions
or Withdrawals
Certificates of Deposit - Bank
Fremont Bank1093-2 0.004.890 09/21/2024 239,245.20SYS
Fremont Bank1093-3 230,000.004.170 09/22/2024 0.00SYS-1093 239,245.20 480,000.00Subtotal 230,000.00
LAIF (Monthly Summary)
LOCAL AGENCY INVESTMENT FUND5 0.004.480 5,000,000.00SYS5 5,000,000.00 39,305,517.89Subtotal 0.00
Gov't Money Market (Monthly Summary)
Dryfus Govt Cash Mgmt 6727 1,282,682.444.570 0.00X9USDCRGO

0.00 1,465,257.44Subtotal 1,282,682.44
Medium Term Notes
Apple Inc.6048 0.001.800 09/11/2024 1,040,000.00037833DM9 1,040,000.00 23,170,318.68Subtotal 0.00
Federal Agency Issues - Coupon
2,995,657.09Subtotal
Federal Agency Issues - Callable
158,420,440.80Subtotal
Supranationals
980,200.00Subtotal
226,817,391.90Total 6,279,245.201,512,682.44
Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM3) 7.3.11
Report Ver. 7.3.11

September 2023 through September 2024
Activity Summary
Month
Portfolio Management
End Year
Number of
Securities
Average
Balance
360
Equivalent
365
Equivalent
Managed
Pool
Rate
Average
Term
Average
Days to Maturity

CITY OF PLEASANTON
Number
of Investments
Purchased
Number
of Investments
Redeemed
Yield to Maturity
222,199,727.26September 2023 74 1,589 7611.319 1.338 3.534 0 0 216,627,684.25October 2023 74 1,612 7441.304 1.322 3.670 0 0 215,466,393.93November 2023 74 1,612 7181.323 1.342 3.843 0 0 230,337,361.67December 2023 74 1,386 5941.688 1.711 3.929 0 0 247,834,511.04January 2024 74 1,403 5801.679 1.702 4.012 0 1 243,504,467.82February 2024 73 1,426 5661.665 1.688 4.122 0 0 240,078,438.89March 2024 73 1,444 5491.665 1.688 4.272 0 0 254,330,644.64April 2024 75 1,305 4751.915 1.942 4.272 2 2 263,538,122.69May 2024 73 1,301 4561.926 1.953 4.332 0 1 260,556,724.84June 2024 72 1,326 4431.920 1.946 4.480 0 0 249,460,826.05July 2024 72 1,469 4661.649 1.672 4.480 0 0 232,025,539.32August 2024 73 1,467 4431.645 1.668 4.480 1 1 229,828,688.26September 2024 73 1,490 4281.599 1.621 4.480 1 2 Average 238,914,323.07 1.638% 1.661% 4.147 0 1 1,448 55673 Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM4) 7.3.11
Report Ver. 7.3.11

September 2023 through September 2024
Distribution of Investments By Type
Portfolio Management

CITY OF PLEASANTON
AverageOctoberSeptember November
2023 2023 by Period
JanuaryDecember February
2023 2024
AprilMarch May
2024 2024
June August
2024 2024
September
2024Security Type
July
2024202420242023

0.2 0.20.2Certificates of Deposit - Bank 0.2 0.20.2 0.2 0.20.2 0.2 0.20.2 0.2 0.2% Certificates of Deposit - S & L

11.1 11.112.4LAIF 22.7 21.523.6 28.1 28.320.5 19.0 19.127.0 17.3 20.1% Fidelity - Government Fund
Gov't Money Market 0.1 0.7 0.1%
Managed Pool Accounts -4
Passbook/Checking Accounts

13.3 13.313.1Medium Term Notes 11.2 11.411.4 10.4 9.711.5 11.0 10.59.9 10.2 11.3% Bankers Acceptances
Commercial Paper - Discount

1.4 1.41.4Federal Agency Issues - Coupon 1.2 1.21.2 1.1 1.11.3 1.3 1.31.2 1.3 1.3% Federal Agency Issues - Discount
Treasury Securities - Coupon
Treasury Securities - Discount

73.5 73.572.5Federal Agency Issues - Callable 64.3 65.463.3 59.8 60.366.2 68.1 68.461.4 69.8 66.7%

0.5 0.50.5Supranationals 0.4 0.40.4 0.4 0.40.4 0.4 0.40.4 0.4 0.4% Miscellaneous Securities - Discount
Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM5) 7.3.11
Report Ver. 7.3.11

September 30, 2024
Interest Earnings Summary
Month EndingSeptember 30 Fiscal Year To Date
Portfolio Management

CITY OF PLEASANTON
CD/Coupon/Discount Investments:
247,460.36Interest Collected
Plus Accrued Interest at End of Period
Less Accrued Interest at Beginning of Period
355,244.16
( 441,461.07)
739,682.86
355,244.16
( 605,322.56)
Less Accrued Interest at Purchase During Period ( 0.00) ( 0.00) Interest Earned during Period
Adjusted by Capital Gains or Losses
Earnings during Periods
161,243.45

0.00 489,604.46
35,803.60
161,243.45 525,408.06
Pass Through Securities:

0.00Interest Collected
Plus Accrued Interest at End of Period
Less Accrued Interest at Beginning of Period

0.00 ( 0.00)

0.00 0.00
( 0.00)
Less Accrued Interest at Purchase During Period ( 0.00) ( 0.00) Interest Earned during Period
Adjusted by Premiums and Discounts
Adjusted by Capital Gains or Losses
Earnings during Periods

0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00
Cash/Checking Accounts:
166.44Interest Collected
Plus Accrued Interest at End of Period
Less Accrued Interest at Beginning of Period
506,983.05
( 338,733.64)
805,684.33
506,983.05
( 722,290.92)
Interest Earned during Period 168,415.85 590,376.46
Total Interest Earned during Period
Total Capital Gains or Losses
Total Earnings during Period
329,659.30

0.00 1,079,980.92
35,803.60
329,659.30 1,115,784.52
Portfolio PLST
CC
Run Date: 11/01/2024 - 11:05 PM (PRF_PM6) 7.3.11
Report Ver. 7.3.11

CITY OF PLEASANTON
PARS Post-Employment Benefits Trust 9/1/2024 to 9/30/2024

Susan Hsieh
Director of Finance
City of Pleasanton
123 Main Street
Pleasanton, CA 94566
Account Summary
Source 9/1/2024 Contributions Earnings Expenses Distributions Transfers 9/30/2024 PENSION - Short Term 1075 $19,966,056.57 $0.00 $206,276.57 $5,768.93 $0.00 $0.00 $20,166,564.21 PENSION - Long Term 1076 $33,107,271.40 $0.00 $643,585.75 $9,641.67 $0.00 $0.00 $33,741,215.48 Totals $53,073,327.97 $0.00 $849,862.32 $15,410.60 $0.00 $0.00 $53,907,779.69 Investment Selection
Source
PENSION - Short Term
PENSION - Long Term
Investment Objective
Source
PENSION - Short Term
PENSION - Long Term
Investment Return
Source 1-Month 3-Months 1-Year 3-Years 5-Years 10-Years PENSION - Short Term 1.03% 3.63% 10.95% 3.18% 3.99% - 6/21/2018 PENSION - Long Term 1.94% 6.90% 25.37% 5.42% 8.91% - 6/21/2018 Information as provided by US Bank, Trustee for PARS; Not FDIC Insured; No Bank Guarantee; May Lose Value Headquarters - 4350 Von Karman Ave., Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org Account balances are inclusive of Trust Administration, Trustee and Investment Management fees Annualized Return
Investment Return: Annualized rate of return is the return on an investment over a period other than one year multiplied or divided to give a comparable one-year return.

Past performance does not guarantee future results. Performance returns may not reflect the deduction of applicable fees, which could reduce returns. Information is deemed reliable but may be subject to change.

Individual Custom Account
Account Report for the Period
Balance as of
City of Pleasanton
Balance as of
Individual Custom Account
City of Pleasanton - Capital Growth
Plan's Inception Date

Item #9

CITY COUNCIL AGENDA REPORT

November 19, 2024
Finance

TITLE: ADOPT A RESOLUTION APPROVING THE REVISED INVESTMENT POLICY DOCUMENTS FOR THE CITY'S PARS SECTION 115 PENSION TRUST FUND

SUMMARY
At the June 5, 2018, meeting, the Council approved the investment strategies for a conservative portfolio and a capital growth custom portfolio for the City’s PARS Section 115 Pension Trust. As stated in the investment guidelines documents, HighMark Capital Management (HighMark) is the investment management firm for the City’s trust accounts.

In 2024, PARS informed the City that HighMark consolidated with PFM Asset Management (PFMAM), both of which are wholly owned subsidiaries of U.S. Bank. The consolidation does not have any significant impact on the City’s existing PARS Plan, or the services provided to the City. The same investment management team will continue to serve in the same capacity but will now operate under PFMAM. All previously agreed-upon investment management fees and investment objectives for the City will remain the same.

Due to the consolidation, PFMAM has requested that the City approve the revised investment policy documents for both portfolios. Overall, the revisions to the investment policies are not significant. The key changes are highlighted in this report.

RECOMMENDATION
Adopt a resolution approving the revised investment policy documents for the City's PARS Section 115 Pension Trust Fund, including a conservative portfolio and a capital growth custom portfolio.

BACKGROUND
Like many agencies, the City has been proactive in implementing strategies to pay down its pension liabilities. In June 2018, the City established a Section 115 Pension Trust. Pension Trusts enable cities to set aside funds and earn greater investment returns than the City’s General Fund. Those assets can then be used to stabilize pension costs in future years when needed.

The City established a Section 115 Pension Trust Fund with PARS with an initial contribution of $28.0 million in June 2018 and subsequent contributions of $10.0 million in FY 2019/20 for a total of $38.0 million. Of the $38.0 million, $16.7 million was deposited into the PARS conservative portfolio and the balance into the PARS capital growth custom portfolio. The City’s objective is to ensure there will be sufficient funds in the PARS Trust to meet the City’s expected increased pension contributions associated with the City’s unfunded pension liabilities and fully fund the liabilities over time.

At the end of September 2024, the total market value of the City’s Trust Fund was $53.9,

including $20.2 million in the PARS conservative portfolio and $33.7 million in the PARS capital growth custom portfolio. The City’s net pension liability is currently over $200 million.

The City needs to continue to implement measures to reduce its pension obligation.

The asset allocation ranges for both portfolios under HighMark’s management are presented below.

For the conservative portfolio, investments weigh more heavily in fixed income and have a lower allocation to equity, as presented in the table below. With a more conservative investment strategy, the investment return is also lower while the overall risk is low. At the end of June 30, 2024, the inception-to-date return for the conservative portfolio was 3.73% (annualized return), gross of investment advisory fees. The September 2024 quarterly report was not available when this report was prepared.

For the capital growth custom portfolio, investments weigh more heavily in equity and have a lower fixed-income allocation, as presented in the table below. A more aggressive investment strategy also yields higher investment returns, while the overall risk is higher than a conservative strategy. At the end of June 30, 2024, the inception-to-date return for the capital growth portfolio was 7.27% (annualized return), gross of investment advisory fees.

DISCUSSION
The key changes to the investment policy documents are highlighted below.

For the capital growth portfolio, the policy/target equity allocation has been changed from 70% to 75%, which is in line with PFMAM’s target allocation for the capital appreciation investment objective. The target equity allocation for the conservative portfolio has not changed, remaining at 15%.

The asset allocation ranges for both portfolios under PFMAM’s management are presented below.

Conservative Portfolio Asset Allocation Ranges and Target

Capital Growth Portfolio Asset Allocation Ranges and Target

For benchmarks, the previous benchmarks for domestic equity included S&P500 Index, Russell Mid-Cap Index, and the Russell 2000 Index (small cap). PFMAM uses the Russell 3000 Index as one index to comprehensively cover large cap, mid cap, and small cap investing.

For international equity investing, previously the portfolios were benchmarked against both the MSCI Emerging Market Index and the MSCI-EAFE Index for developed international equity investing. PFMAM uses one international equity index covering both emerging and developed markets: the MSCI ACWI Ex-US Index.

Finally, PFMAM includes a modest allocation to global infrastructure in its investment platform.

This allocation can be found in combination with real estate equities in the “other growth” asset class segment in the investment guideline documents.

Overall, the revisions are not significant.

EQUITY AND SUSTAINABILITY
Not applicable, as this item is a routine administrative matter of City business.

OUTREACH
No outreach was conducted, as this item is a routine administrative matter of City business.

STRATEGIC PLAN ALIGNMENT
This item aligns with the ONE Pleasanton strategic plan goal of Funding Our Future that supports financial health and sound fiscal policies.

FISCAL IMPACT
There is no fiscal impact associated with this action.

Prepared by: Submitted by: Approved by:

Susan Hsieh, Director of
Finance
Susan Hsieh, Director of Finance

Gerry Beaudin, City
Manager

Attachments:

1. Resolution

2. Exhibit A to Resolution - Investment Policy Statement (Conservative Portfolio)

3. Exhibit B to Resolution - Investment Policy Statement (Capital Growth Portfolio)

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON

APPROVING THE REVISED INVESTMENT POLICY DOCUMENTS FOR THE CITY'S PARS SECTION 115 PENSION TRUST FUND
WHEREAS, at the June 5, 2018, meeting, the Council approved the investment strategies for a conservative portfolio and a capital growth custom portfolio for the City’s PARS Section 115 Pension Trust; and
WHEREAS, as stated in the investment guidelines documents, HighMark Capital Management (HighMark) is the investment management firm for the City’s trust accounts; and WHEREAS, due to the consolidation of HighMark and PFM Asset Management (PFMAM), the same investment management team will continue to serve in the same capacity but will now operate under PFMAM; and
WHEREAS, PFMAM has requested that the City approve the revised investment policy documents for both portfolios; and
WHEREAS, staff is recommending approval of the investment policy documents attached to the resolution.

NOW, THEREFORE BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:

Section 1. Adopt the investment policy documents as reflected in Exhibit A and Exhibit B.

Section 2. City Clerk shall certify to the passage of this resolution and enter it into the book of original resolutions.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on November 19, 2024.

I, Jocelyn Kwong, City Clerk of the City of Pleasanton, California, certify that the foregoing resolution was adopted by the City Council at a regular meeting held on November 19, 2024, by the following vote:

Ayes:

Noes:

Absent:

Abstain:
_____________________________
Jocelyn Kwong, City Clerk
APPROVED AS TO FORM:
___________________________
Daniel G. Sodergren, City Attorney

Exhibit A

INVESTMENT POLICY STATEMENT
FOR

CITY OF PLEASANTON CONSERVATIVE FUND
SECTION 115 TRUST PENSION FUND

2 TABLE OF CONTENTS

SECTION PAGE
Purpose..........................................................................................................................................3 Investment Authority ....................................................................................................................3 Statement of Investment Objectives .............................................................................................4 Investment Guidelines ..................................................................................................................5 Time Horizon
Liquidity and Diversification
Asset Allocation
Rebalancing Philosophy
Risk Tolerance
Performance Expectations
Selection of Investment Managers................................................................................................7 Guidelines for Portfolio Holdings.................................................................................................7 Direct Investments by Advisor
Limitations on Managers’ Portfolios
Portfolio Risk Hedging
Prohibited Portfolio Investments
Safekeeping
Control Procedures........................................................................................................………..11 Review of Investment Objectives
Review of Investment Performance
Voting of Proxies
Adoption of Investment Policy Statement………………………………………………………12

3 The City of Pleasanton “City” has established a section 115 Trust known as the City of Pleasanton Section 115 Pension Trust (the “Trust”). This Trust will be used to invest monies to fund the City’s unfunded liability in the California Public Employee Retirement System (“CalPERS”). The City has developed two sub-accounts under this Trust. The sub-account for this portfolio is named the ‘Conservative” account. It is seen as the first pool of assets that would be used to address pension expenses, and based on this assumption, the perceived time horizon is shorter. The City of Pleasanton City Council (“Council”) has given authority to the Plan Administrator to establish and adopt the investment Policy Statement (“Policy Statement”) for the following purposes.

Purpose
Funds set aside in the Section 115 Trust are safeguarded from diversion to other budgetary uses and generally may be invested in a broader range of securities than would typically be permitted for public agency operating funds, potentially increasing earnings. Therefore, higher returns can improve the City’s ability to meet future pension obligations. An additional advantage of holding funds in the Trust rather than contributing an equivalent amount directly to CalPERS is that the City retains control over the timing and amount of disbursements from the Trust. Retaining control of the funds in the Trust provides the flexibility to meet current or accrued liabilities based on the financial circumstances at that time. The City also controls the timing of contributions to the Trust.

The main investment objective of the Trust is to achieve long-term growth of Trust assets by maximizing long-term rate of return on investments and minimizing risk of loss.

The purpose of this Policy Statement is to achieve the following:

1. Document investment objectives, performance expectations, and investment guidelines for Fund assets.

2. Establish an appropriate investment strategy for managing all Trust assets, including an investment time horizon, risk tolerance ranges, and asset allocation to provide sufficient diversification and overall return over the long-term time horizon of the Trust.

3. Establish investment guidelines to control overall risk and liquidity.

4. Establish periodic performance reporting requirements to monitor investment results and confirm that the investment policy is being followed.

5. Comply with fiduciary, prudence, due diligence, and legal requirements for Trust assets.

Investment Authority
The City has appointed the Plan Administrator (the “Administrator”) to oversee certain policies and procedures related to the operation and administration of the Trust. The Administrator will have authority to implement the investment policy and guidelines in the best interest of the Trust to best satisfy the purposes of the Trust. In implementing this Policy Statement, the Administrator believes it may delegate certain functions to:

4 1. An investment advisor (“Advisor”) to assist the Administrator in the investment process and to maintain compliance with this Policy Statement. The Advisor may assist the Administrator in establishing investment policy objectives and guidelines. The Advisor will adjust asset allocation for the Trust subject to the guidelines and limitations set forth in this Policy Statement. The Advisor will also select investment managers (“Managers”) and strategies consistent with its role as a fiduciary for the Trust. The investment vehicles allowed may include mutual funds, commingled trusts, separate accounts, limited partnerships and other investment vehicles deemed to be appropriate by the Advisor. The Advisor is also responsible for monitoring and reviewing investment managers; measuring and evaluating performance; and other tasks as deemed appropriate in its role as Advisor for Trust assets. The Advisor may also select investments with discretion to purchase, sell, or hold specific securities, such as Exchange Traded Funds, that will be used to meet the Trust’s investment objectives. The Advisor shall never take possession of securities, cash or other assets of the Trust, all of which shall be held by the custodian. The Advisor must be registered with the Securities and Exchange Commission.

2. A custodian selected by the Trust to maintain possession of physical securities and records of street name securities owned by the Trust, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian may also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Trust.

3. A trustee appointed by the Trust, such as a bank trust department, if the Trust does not have its own Trustees, to assume fiduciary responsibility for the administration of Trust assets; provided, however, that if the Administrator shall have appointed an investment advisor, then any trustee appointed under this paragraph shall have no authority with respect to selection of investments.

4. Specialists such as attorneys, auditors, actuaries and, retirement plan consultants to assist the Administrator in meeting its responsibilities and obligations to administer Trust assets prudently.

Statement of Investment Objectives
The investment objectives of the Trust are as follows:

1. To invest assets of the Trust in a manner consistent with the following fiduciary standards:
(a) all transactions undertaken must be for the sole interest of Trust beneficiaries, and (b) assets are to be diversified in order to minimize the impact of large losses from individual investments.

2. To provide for funding and anticipated withdrawals on a continuing basis for payment of benefits and reasonable expenses of operation of the Trust.

3. To enhance the value of Trust assets in real terms over the long-term through asset appreciation and income generation, while maintaining a reasonable investment risk profile.

4. Subject to performance expectations over the long-term, to minimize principal fluctuations over the Time Horizon (as defined below).

5 5. To achieve a long-term level of return commensurate with contemporary economic conditions and equal to or exceeding the investment objective set forth in this Policy Statement under the section labeled “Performance Expectations”.

Investment Guidelines
Within this section of the Policy Statement, several terms will be used to articulate various investment concepts. The descriptions are meant to be general and may share investments otherwise considered to be in the same asset class. They are:
"Growth Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on capital appreciation. Investments within the Growth Assets category can include income and risk mitigating characteristics, so long as the predominant investment risk and return characteristic is capital appreciation. Examples of such investments or asset classes are:
domestic and international equities or equity funds, private or leveraged equity, certain real estate investments, and hedge funds focused on equity risk mitigation or equity-like returns. "Income Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on income generation. Investments within the Income Assets category can include capital appreciation and risk mitigating characteristics, so long as the primary investment risk and return characteristic is income generation. Examples of such investments or asset classes are:
fixed income securities, guaranteed investment contracts, certain real estate investments, and hedge funds focused on interest rate risk mitigation or income investment-like returns. "Real Return Assets" - a collection of investments and/or asset classes whose primary risk and return characteristics are focused on real returns, net of inflation. Investments within the Real Return category may include, but are not limited to, inflation protected securities, commodities, certain real estate investments, natural resources, liquid alternatives and hedge funds.

Time Horizon
The Trust’s investment objectives are based on a long-term investment horizon (“Time Horizon”) of five years or longer. Interim fluctuations should be viewed with appropriate perspective. The Administrator has adopted a long-term investment horizon such that the risks and duration of investment losses are carefully weighed against the long-term potential for appreciation of assets. However, this portfolio of assets is viewed by the City as the first pool of assets that would be utilized to support pension expenses.

As such, the time horizon for this portfolio could be less than five years based on budget conditions, or any increase in expenses arising from CalPERS.

Liquidity and Diversification
In general, the Trust may hold some cash, cash equivalent, and/or money market funds for near-term Trust benefits and expenses (the “Trust Distributions”). Remaining assets will be invested in longer-term

6 investments and shall be diversified with the intent to minimize the risk of long-term investment losses.

Consequently, the total portfolio will be constructed and maintained to provide diversification with regard to the concentration of holdings in individual issues, issuers, countries, governments or industries.

Asset Allocation
The Administrator believes that to achieve the greatest likelihood of meeting the Trust’s investment objectives and the best balance between risk and return for optimal diversification, assets will be invested in accordance with the targets for each asset class as follows to achieve an average total annual rate of return that is equal to or greater than the Trust’s target rate of return over the long-term, as described in the section titled “Performance Expectations”.

Asset Weightings
Asset Classes Range Target
Growth Assets
Domestic Equity 4% - 19% 9.0%
International Equity 1% - 10% 4.5%
Other 0% - 8% 1.5%
Income Assets
Fixed Income
Other
50% - 95%
0% - 10%
83%
0%
Real Return Assets 0% - 10% 0%
Cash Equivalents 0% - 20% 2%
The Advisor and each Manager will be evaluated against their peers on the performance of the total funds under their direct management.

Rebalancing Philosophy
The asset allocation range established by this Policy Statement represents a long-term perspective. As such, rapid unanticipated market shifts or changes in economic conditions may cause the asset mix to fall outside Policy Statement ranges. When allocations breach the specified ranges, the Advisor will rebalance the assets within the specified ranges. The Advisor may also rebalance based on market conditions.

Risk Tolerance
Subject to investment objectives and performance expectations, the Trust will be managed in a style that seeks to minimize principal fluctuations over the established Time Horizon.