Agenda packet — Portola Valley City Council, August 9, 2023

TOWN OF PORTOLA VALLEY
Regular Meeting of the Town Council
Wednesday, August 9, 2023.
7:00 P.M.

Jeff Aalfs, Mayor
Sarah Wernikoff, Vice Mayor
Judith Hasko, Councilmember
Mary Hufty, Councilmember
Craig Taylor, Councilmember

HYBRID MEETING
HISTORIC SCHOOLHOUSE- 765 Portola Road, Portola Valley, CA 94028 Amended Agenda Packet to include attachment for Item 4b on 08/07/2023 Remote Public Comments: Meeting participants are encouraged to submit public comments in writing in advance of the meeting. Please submit your comments using this online form by 1:00 PM on the day of the meeting. Time permitting, your correspondence will be uploaded to the website. All received questions will be forwarded to Council, Commission, or Committee members for consideration during the meeting and included in the public record. Additionally, technology permitting, the public body will take questions using the Raise Hand button for those who attend the meeting online or by phone. Phone callers may provide comments by pressing *9 on their phone to "raise your hand" and *6 to mute/unmute themselves. The meeting Chair will call on people to speak by the phone number calling in. Remote participation is provided as a supplemental way to provide public comment, but this method does not always work. The public is encouraged to attend in person to ensure full participation.

Assistance for People with Disabilities: In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Town Clerk at (650) 851- 1700 or by email at [email protected]. Notification 48 hours prior to the meeting will enable the Town to make reasonable arrangements to ensure accessibility to this meeting.

1. CALL TO ORDER- REGULAR SESSION

2. ORAL COMMUNICATIONS
Persons wishing to address the Town Council on any subject may do so now. Please note, however, that the Council is not able to undertake extended discussion or action tonight on items not on the agenda. Each speaker’s time is limited to three minutes.

3. CONSENT AGENDA
a. Approval of Minutes for Closed Session and Regular Meeting of July 12, 2023 b. Approval of Warrant Lists- 07/26/2023 and 08/03/2023 c. Approval of Grand Jury ADU Report and Response
d. Adoption of a Resolution Authorizing the Town Manager to Enter into Master Agreements with California Department of Transportation for Federal-Aid Projects

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Town of Portola Valley – Council Agenda
August 9, 2023

Page 2 of 2 ends

4. REGULAR AGENDA
a. Update on Housing Element Status and Next Steps
b. Discuss and Review Colleagues Memo from Councilmembers Hasko and Taylor entitled “Post-Adoption Plan Subcommittee Update”
c. Discuss Council Subcommittee to Review Draft Emergency Evacuation Plan

5. COUNCIL LIAISON COMMITTEE AND REGIONAL AGENCIES REPORTS Oral and written reports arising out of liaison appointments to both in-town and regional committees and initiatives. The Town Council does not take action under this agenda item.

6. INTERIM TOWN MANAGER REPORT
There are no written materials, and the Town Council does not take action under this agenda item.

7. ADJOURNMENT
The next Regular Town Council meeting will be held on September 13, 2023, at 7:00 p.m. ***************************************************************************************************************** Land Acknowledgement: The Town of Portola Valley acknowledges the colonial history of this land we dwell upon the unceded territory of the Ramaytush (rah-my-toosh) Ohlone, Tamien Nation, and Muwekma (mah-WEK-mah) Ohlone, who endured a human and cultural genocide that included removal from their lands and their sacred relationship to the land. Portola Valley recognizes that we profit from the commodification of land seized from indigenous peoples and now bear the ecological consequences. We seek to understand the impact of these legacies on all beings and to find ways to make repair.

TOWN OF PORTOLA VALLEY
Historic Schoolhouse
765 Portola Road
Portola Valley, CA 94028
Jeff Aalfs, Mayor
Sarah Wernikoff, Vice Mayor
Judith Hasko, Councilmember
Mary Hufty, Councilmember
Craig Taylor, Councilmember

COUNCIL MINUTES- CLOSED SESSION AND REGULAR MEETING
WEDNESDAY- JULY 12, 2023

1. CALL TO ORDER - 5:30 P.M.

Present: Mayor Aalfs, Councilmembers Hasko, Hufty, and Taylor Councilmember Wernikoff attended remotely from Woods Hole Inn in Woods Hole, MA

2. ORAL COMMUNICATIONS
• None

3. CLOSED SESSION - PUBLIC EMPLOYEE
At 5:30 P.M. the Mayor and Council adjourned to a closed session for the following:
a. TOWN MANAGER RECRUITMENT
At 5:33 P.M. Mayor Aalfs recessed the meeting to closed session to review Town Manager recruitment documentation pursuant to paragraph (2) of subdivision (b) of California Government Code Section 54957.

Govt. Code 54957 (b)(2) holding closed sessions during a regular or special meeting to consider the appointment, employment, evaluation of performance, discipline, or dismissal of a public employee or to hear complaints or charges brought against the employee by another person or employee unless the employee requests a public session.

Closed Session Roll Call

Present: Mayor Aalfs, Councilmembers Hasko, Hufty, and Taylor Councilmember Wernikoff attended remotely from Woods Hole Inn in Woods Hole, MA Adjourn Closed Session
At approximately 6:53 P.M., the Mayor and Council adjourned the closed session and moved into regular session

4. CALL TO ORDER- REGULAR SESSION
The Wednesday, July 12, 2023, Regular Meeting of the Mayor and Council of the Town of Portola Valley reconvened at 7:00 p.m.

Present: Vice Mayor Wernikoff, Councilmembers Hasko, Hufty, and Taylor

Absent: Mayor Aalfs
Town Attorney, Catherine Engberg explained that Vice Mayor, will be attending and running the meeting remotely from Woods Hole Inn in Woods Hole, MA. It was confirmed that Vice Mayor Wernikoff could hear and be heard by all in attendance.

5. ORAL COMMUNICATIONS
• Rita Comes
• Ellen Vernazza
2 Minutes of the July 12, 2023, Closed Session and Regular Town Council Meeting

6. REPORT OUT OF CLOSED SESSION
Interim Town Attorney, Catherine Engberg, announced there was nothing to report out from closed session meeting

7. CONSENT AGENDA
a. Approval of Minutes - 06/27/2023
b. Approval of Warrant List - 07/12/2023
c. Adoption of two resolutions for Woodside Highlands and Wayside II Road Maintenance District Tax Assessments
d. Adoption of a resolution for three-month extension of Sheriff Contract Amendment Two - Resolution No. 2930-2023 Special Tax for the Woodside Highlands Road Maintenance District 2023-2024
- Resolution No. 2931-2023 Special Tax for the Wayside II Road Maintenance District 2023-2024 - Resolution No. 2932-2023 Three-month contract amendment between County of San Mateo Sheriff and Portola Valley
Councilmember Taylor made a motion to approve all consent calendar items, seconded by Councilmember Hufty.

The motion carried by the following vote:

Ayes: Vice Mayor Wernikoff, Councilmembers Hasko, Hufty, and Taylor Nays: None

Absent: Mayor Aalfs

8. REGULAR AGENDA
a. Study Session to consider Electronic Communications Policy Interim Town Attorney, Catherine Engberg, presented the Electronic Communications Policy and answered questions from the Town Council.

The following spoke in public comments:
• Caroline Vertongen
• Rita Comes
• Betsy Morgenthaler
• Rusty Day
Continue session in future meeting after suggestions of council are considered and edits to draft policy are complete.

9. COUNCIL LIAISON COMMITTEE AND REGIONAL AGENCIES REPORTS No reports on committee meetings
• Rita Comes commented
• Caroline Vertongen commented

10. INTERIM TOWN MANAGER REPORT
There are no written materials, and the Town Council does not take action under this agenda item.
• Public comment made from schoolhouse- name not provided

11. ADJOURNMENT
At 8:38 p.m., Vice Mayor Wernikoff adjourned the July 12, 2023, regular meeting. The next Regular Town Council meeting will be held on August 9, 2023, at 7:00 p.m. 3 Minutes of the July 12, 2023, Closed Session and Regular Town Council Meeting ***************************************************************************************************************** Land Acknowledgement:

The Town of Portola Valley acknowledges the colonial history of this land we dwell upon the unceded territory of the Ramaytush (rah-my-toosh) Ohlone, Tamien Nation, and Muwekma (mahWEK-mah) Ohlone, who endured a human and cultural genocide that included removal from their lands and their sacred relationship to the land. Portola Valley recognizes that we profit from the commodification of land seized from indigenous peoples and now bear the ecological consequences. We seek to understand the impact of these legacies on all beings and to find ways to make repair.
apachreg Town of Portola Valley hsingh 07/26/2023 14:30 Page 1 Check Register
Check Vendor Vendor Name Check Check BW CheckNumber Number Amount Date TypeChecks for Cash Account: 910-11011-000 3306 41 AT&T 327.49 07/26/233307 78 CALIFORNIA WATER SERVICE CO 16,747.05 07/26/233308 80 CALPERS 7,814.08 07/26/233309 124 COMCAST 558.75 07/26/233310 127 CONTEMPORARY ENGRAVING CO. 85.02 07/26/233311 131 CPRS 170.00 07/26/233312 135 CSG CONSULTANTS INC 15,362.00 07/26/233313 193 GO NATIVE INC 19,928.00 07/26/233314 203 GREEN HALO SYSTEMS 114.00 07/26/233315 212 G. BORTOLOTTO & CO 75,888.00 07/26/233316 213 HILLYARD INC 1,035.20 07/26/233317 214 HINDERLITER DE LLAMAS & ASSOC 757.39 07/26/233318 227 INTERSTATE TRAFFIC CNTRL 245.00 07/26/233319 234 J. W. ENTERPRISES 542.88 07/26/233320 267 KARI CHINN 373.60 07/26/233321 292 LYNCH ELECTRIC & SONS INC 284.97 07/26/233322 323 MIG-TRA 520.00 07/26/233323 337 O. NELSON & SON INC. 34,587.80 07/26/233324 364 PERS HEALTH 15,532.00 07/26/233325 375 PLATINUM FACILITY SERVICES 4,936.68 07/26/233326 376 PORTOLA VALLEY HARDWARE 781.08 07/26/233327 380 PURCHASE POWER 39.99 07/26/233328 403 RON RAMIES AUTOMOTIVE INC. 3,537.35 07/26/233329 431 SIERRA PACIFIC TURF SUPPLY INC 3,046.62 07/26/233330 437 SMALL BUSINESS BENEFIT PLAN TR 2,230.80 07/26/233331 438 SAN MATEO COUNTY HOUSING DEPT 29,100.00 07/26/233332 452 STUART RENTAL COMPANY 4,051.13 07/26/233333 482 TURF & INDUSTRIAL EQUIPMENT CO 1,414.33 07/26/233334 489 VERIZON WIRELESS 530.07 07/26/233335 518 GOT GOPHERS? 1,050.00 07/26/233336 522 NEW PATH LANDSCAPE SERVICES 22,710.00 07/26/233337 532 SAN MATEO COUNTY MANAGERSOFF 4,450.00 07/26/233338 578 COUNTY OF SAN MATEO - LAFCO 507.00 07/26/233339 642 CYBERTARY.COM 131.35 07/26/233340 673 MUNICIPAL RESOURCE GROUP, LLC 900.00 07/26/233341 690 CRUZ STRATEGIES 625.00 07/26/233342 697 CYNTHIA ROWE 500.00 07/26/233343 732 JOHN BADGER 572.18 07/26/233344 751 VIA HEART PROJECT 427.55 07/26/233345 847 LISA WISE CONSULTING 536.25 07/26/233346 914 UNITED MECHANICAL INC 5,374.00 07/26/233347 946 JARVIS FAY LLP 6,726.00 07/26/233348 949 PINPOINT TALENT, LLC 5,020.00 07/26/233349 1016 SHUTE, MIHALY & WEINBERGER LLP 4,148.00 07/26/233350 1017 ROUTEWARE 8,676.00 07/26/23 apachreg Town of Portola Valley hsingh 07/26/2023 14:30 Page 2 Check Register
Check Vendor Vendor Name Check Check BW CheckNumber Number Amount Date Type 3351 1018 V&B GRADING INC. 17,150.00 07/26/233352 1019 BAYSCAPE MANAGEMENT INC 6,500.00 07/26/233353 1020 LISA KOHLER, JOHN DD KOHLER 500.00 07/26/233354 1021 CHILTON MARKETING COMPANY 1,427.94 07/26/23Check totals: 328,472.55ACH totals:EFTPS totals:Wire transfer totals:Payment Manager totals:GRAND TOTALS 328,472.55Check totals: 328,472.55ACH totals:EFTPS totals:Wire transfer totals:Payment Manager totals:GRAND TOTALS 328,472.55 .
apapdinv2 hsingh Town of Portola Valley Page 1
14:36 07/26/23 Paid Invoices by Date
From: 07/26/2023 to 07/26/2023
Check Check Special Information Net Check Total Invoice Number Date Number Amount Invoices
Paid
Vendor: 41 AT&T
07/26/23 3306 June Statement 327.49 51.90 000020191485
June Statement 51.90 000020191483June Statement 223.69 000020191484 Vendor: 78 CALIFORNIA WATER SERVICE CO
3307 Water Service 06/13/23 - 07/13/23 16,747.05 16,747.05 JUNE-2023 Vendor: 80 CALPERS
3308 July Unfunded Liability 7,814.08 7,814.08 100000017216084 Vendor: 124 COMCAST
3309 WIFI-05.16.2023-06.15.2023 558.75 275.76 7290-MAY23 WIFI-06.16.2023-07.15.2023 282.99 7290-JUNE23
Vendor: 127 CONTEMPORARY ENGRAVING CO.
3310 Nameplates for Corie Stocker & Jennifer Torres 85.02 85.02 6571 Vendor: 131 CPRS
3311 FY23-24 Member Dues, J. Bixby 170.00 170.00 136550-FY23-24 Vendor: 135 CSG CONSULTANTS INC
3312 May Code Enforcement, Bldg Svcs, Stormwater C4 Inspection 15,362.00 15,362.00 MAY-2023 Vendor: 193 GO NATIVE INC
3313 Town Center Landscape Maint, May/June 19,928.00 17,490.00 3761 Open Space Maintenance for May/June 2,438.00 3762
Vendor: 203 GREEN HALO SYSTEMS
3314 June Hosting & Access 114.00 114.00 4311
Vendor: 212 G. BORTOLOTTO & CO
3315 WHRMD Roadway Repair and Improvement 75,888.00 70,857.00 5069 WHRMD Roadway Repair & Improvement, Construct Swale 5,031.00 5069-SWALE Vendor: 213 HILLYARD INC
3316 Janitorial Supplies 1,035.20 528.27 605151679
Janitorial Supplies 506.93 605173839
Vendor: 214 HINDERLITER DE LLAMAS & ASSOC
3317 Sales Tax Audit Svcs - Q4 2022 757.39 757.39 SIN028954 Vendor: 227 INTERSTATE TRAFFIC CNTRL
3318 Street Signs 245.00 245.00 257373
.
apapdinv2 hsingh Town of Portola Valley Page 2
14:36 07/26/23 Paid Invoices by Date
From: 07/26/2023 to 07/26/2023
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
Vendor: 234 J. W. ENTERPRISES
3319 Portable Lavs 06/01/23 - 06/28/23 542.88 229.44 251337 Portable Lavs 06/01/23 - 06/28/23 313.44 251336
Vendor: 267 KARI CHINN
3320 Reimbursement-Staff Service Recognition, H.Young & L.Russell 373.60 250.00 FRRS-23-22 Gift for Caras Going Away Party, Plant. 123.60 FRRS-23-23 Vendor: 292 LYNCH ELECTRIC & SONS INC
3321 Schoolhouse- Restroom Fluorescent Ballast Change 284.97 284.97 2023.629 Vendor: 323 MIG-TRA
3322 Consulting Svcs 05/01/23 to 05/31/23, PV Ranch Frog Pond 520.00 520.00 0081468 Vendor: 337 O. NELSON & SON INC.
3323 Larry Lane Trail Rehabilitation 34,587.80 7,730.00 258 Town Center Playground Walkway Renovation 10,840.00 257Storm Damage- Fallen Tree & Rebuild Fence at TC Scr Field 10,270.00 254AFord Field - Rebuild Fence 1,960.00 255Storm Damage/ER Repair, Drainage Culvert March 23 3,787.80 256 Vendor: 364 PERS HEALTH
3324 July Health 15,532.00 15,532.00 100000017202412
Vendor: 375 PLATINUM FACILITY SERVICES
3325 June Janitorial Svcs 4,936.68 4,488.67 46725
June Friday Disinfection Svcs- Covid 19 448.01 46726
Vendor: 376 PORTOLA VALLEY HARDWARE
3326 June Statement 781.08 666.85 193-JUNE23
May Statement 114.23 193-MAY23
Vendor: 380 PURCHASE POWER
3327 Postage Meter Charges 39.99 39.99 7931-JUNE23
Vendor: 403 RON RAMIES AUTOMOTIVE INC.
3328 May Fuel Statement 3,537.35 920.04 G20230531-4
Vehicle Maintenance - Nissan Leaf 346.63 74800Lawn Mower Service & Repair 771.76 746322001 Chevy Maintenance/Repair & Smog 1,498.92 74545 Vendor: 431 SIERRA PACIFIC TURF SUPPLY INC
3329 Fields Fertilizer 3,046.62 3,046.62 0645809-IN
.
apapdinv2 hsingh Town of Portola Valley Page 3
14:36 07/26/23 Paid Invoices by Date
From: 07/26/2023 to 07/26/2023
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
Vendor: 437 SMALL BUSINESS BENEFIT PLAN TR
3330 August Dental/Vision 2,230.80 2,230.80 AUG-2023
Vendor: 438 SAN MATEO COUNTY HOUSING DEPT
3331 21 Elements 6th Cycle RHNA, FY2021-22 29,100.00 19,400.00 HCD23-02 21 Elements 6th Cycle RHNA, July-Dec 2022 9,700.00 HCD23-34 Vendor: 452 STUART RENTAL COMPANY
3332 Town Picnic Equip Rentals, Deposit 4,051.13 4,051.13 215941 Vendor: 482 TURF & INDUSTRIAL EQUIPMENT CO
3333 Tractor Repair/Maintenance 1,414.33 1,414.33 RO31379 Vendor: 489 VERIZON WIRELESS
3334 June Cellular 530.07 530.07 9938120150
Vendor: 518 GOT GOPHERS?
3335 Town Fields Gopher Trapping- June 2023 1,050.00 1,050.00 47239 Vendor: 522 NEW PATH LANDSCAPE SERVICES
3336 Spring Weed Abatement 20 22,710.00 22,710.00 4235
Vendor: 532 SAN MATEO COUNTY MANAGERSOFF
3337 FY 2022-23 Animal Care Shelter Construction Costs (PV Share) 4,450.00 4,450.00 ASC22-23PORTOLA Vendor: 578 COUNTY OF SAN MATEO - LAFCO
3338 FY2023-24 LAFCO Apportionment 507.00 507.00 FY2023-24_LAFCO Vendor: 642 CYBERTARY.COM
3339 June Transcription Services 131.35 131.35 4723
Vendor: 673 MUNICIPAL RESOURCE GROUP, LLC
3340 Portola Valley - Policy Review & Compensation Analysis 900.00 900.00 03-23-524 Vendor: 690 CRUZ STRATEGIES
3341 Government Relations Work - July 625.00 625.00 2792 Vendor: 697 CYNTHIA ROWE
3342 Facility Refund Pickleball Clinics, 04/18/23-04/20/23 500.00 500.00 PROF-22-54 Vendor: 732 JOHN BADGER
3343 Reimbursement - PV Palooza Items 572.18 572.18 FRRC-23-8 Vendor: 751 VIA HEART PROJECT

TOWN OF PORTOLA VALLEY
Warrant Disbursement Journal
July 26, 2023
Claims totaling $328,472.55 having been duly examined by me and found to be correct are hereby approved and verified by me as due bills against the Town of Portola Valley.

Date _____________________________ ________________________________ Interim Town Manager
Motion having been duly made and seconded, the above claims are hereby approved and allowed for payment.

Signed and sealed this (Date) _____________________
_______________________________ _________________________________ Acting Town Clerk Mayor
apachreg Town of Portola Valley sahmad 08/03/2023 15:17 Page 1 Check Register
Check Vendor Vendor Name Check Check BW CheckNumber Number Amount Date TypeChecks for Cash Account: 910-11011-000 3355 20 ALLIANT INSURANCE SERVICES 612.00 08/09/233356 71 BW CONSTRUCTION 3,520.00 08/09/233357 124 COMCAST 186.47 08/09/233358 223 INFINITE THREADS EMBROIDERY 411.75 08/09/233359 290 LOS GATOS ROOFING 1,000.00 08/09/233360 324 MIRANDAS LANDSCAPE 15,910.00 08/09/233361 368 PG&E 758.63 08/09/233362 372 PINNACLE BUILDING & DESIGN 2,000.00 08/09/233363 406 RR DONNELLEY 119.11 08/09/233364 407 SABER ROOFING INC 1,000.00 08/09/233365 428 SHARP BUSINESS SYSTEMS 95.98 08/09/233366 445 STANDARD INSURANCE CO. 487.81 08/09/233367 556 JPM CONSTRUCTION 500.00 08/09/233368 624 LENCIONI CONSTRUCTION 500.00 08/09/233369 629 WILKINSON CONSTRUCTION 1,000.00 08/09/233370 637 NEIL DAY 8,580.99 08/09/233371 730 URBAN PLANNING PARTNERS INC 18,461.94 08/09/233372 856 SLBM INC 2,000.00 08/09/233373 942 YLCL CORPORATION 1,203.96 08/09/233374 949 PORTER CAPITAL CORPORATION 13,448.00 08/09/233375 1014 SEDDON CONSTRUCTION 1,000.00 08/09/233376 1022 E M ROOFING 1,000.00 08/09/233377 1023 ELIZABETH STINSON 599.25 08/09/233378 1024 JEROME JOONDEPH 1,338.63 08/09/233379 1025 LUCAS CONSTRUCTION 1,000.00 08/09/233380 1026 MACHU PICCHU ROOFING 1,000.00 08/09/233381 1027 MODERN LIFESTYLE CONSTRUCTION 1,000.00 08/09/233382 1028 P. WITHRINGTON CONSTRUCTION 1,000.00 08/09/233383 1029 POLLOUGH CONSTRUCTION 306.42 08/09/233384 1030 TB CONSTRUCTION SERVICES CORP 1,000.00 08/09/233385 1031 WILLIAM BEASLEY 4,013.88 08/09/233386 1032 XPRESS KITCHEN & BATH 1,000.00 08/09/23Check totals: 86,054.82ACH totals:EFTPS totals:Wire transfer totals:Payment Manager totals:GRAND TOTALS 86,054.82 Check totals: 86,054.82
ACH totals:EFTPS totals:Wire transfer totals:Payment Manager totals:GRAND TOTALS 86,054.82 .
apapdinv2 sahmad Town of Portola Valley Page 1
15:19 08/03/23 Paid Invoices by Date
From: 08/09/2023 to 08/09/2023
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
Vendor: 20 ALLIANT INSURANCE SERVICES
08/09/23 3355 Qtrly Event Insurance 04/01/23 - 06/30/23 612.00 612.00 2023-Q2 Vendor: 71 BW CONSTRUCTION
3356 Reimbursement - Drainage Repairs On Hill, Dirt Removed 3,520.00 3,520.00 1089 Vendor: 124 COMCAST
3357 WIFI-07.21.2023-08.20.2023 186.47 186.47 1945-AUG23 Vendor: 223 INFINITE THREADS EMBROIDERY
3358 Orange Work Shirts 411.75 411.75 2196
Vendor: 290 LOS GATOS ROOFING
3359 Deposit Refund, 110 Wyndham 1,000.00 1,000.00 BLDR0070-2023 Vendor: 324 MIRANDAS LANDSCAPE
3360 Trail Weeding for May 2023 15,910.00 2,542.00 3250 Trail Weeding - June 13,368.00 3251
Vendor: 368 PG&E
3361 Deposit Refund, 157 Ramoso 758.63 190.21 PW0055-2021 Deposit Refund, 157 Ramoso 165.21 PW0070-2020Deposit Refund, 40 Firethorn 403.21 PW0077-2021 Vendor: 372 PINNACLE BUILDING & DESIGN
3362 Deposit Refund, 501 Portola #8E 2,000.00 1,000.00 BLDR0157-2022 Deposit Refund, 501 Portola #14F 1,000.00 BLDR0044-2023 Vendor: 406 RR DONNELLEY
3363 Business Card - Jennifer Torres 119.11 119.11 410521882 Vendor: 407 SABER ROOFING INC
3364 Deposit Refund, 17 Coalmine 1,000.00 1,000.00 BLDR0069-2023 Vendor: 428 SHARP BUSINESS SYSTEMS
3365 June Copies 95.98 95.98 9004402597
Vendor: 445 STANDARD INSURANCE CO.
3366 LTD/Life Premium 487.81 487.81 2023-JULY
Vendor: 556 JPM CONSTRUCTION
3367 Deposit Refund, 160 Fawn 500.00 500.00 BLDR0022-2019-1 Vendor: 624 LENCIONI CONSTRUCTION
.
apapdinv2 sahmad Town of Portola Valley Page 2
15:19 08/03/23 Paid Invoices by Date
From: 08/09/2023 to 08/09/2023
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
08/09/23 3368 Deposit Refund, 180 Golden Oak 500.00 500.00 BLDR0102-2018-1 Vendor: 629 WILKINSON CONSTRUCTION
3369 Deposit Refund, 391 Canyon 1,000.00 1,000.00 BLDR0055-2022 Vendor: 637 NEIL DAY
3370 Deposit Refund, 99 Hillbrook 8,580.99 476.03 BLDR0096-2019-1 Deposit Refund, 99 Hillbrook 4,257.11 BLDR0185-2019Deposit Refund, 99 Hillbrook 3,847.85 BLDR0220-2019-1 Vendor: 730 URBAN PLANNING PARTNERS INC
3371 PV Housing/Safety Element- April 18,461.94 4,830.69 22008-230430 PV Housing Element Update- April 3,737.50 21029-230430PV Safety Element Update- May 2,080.00 21031-230531PV Housing Element Update- June 7,813.75 21029-230630 Vendor: 856 SLBM INC
3372 Deposit Refund, 229 Grove 2,000.00 1,000.00 BLDR0174-2021 Deposit Refund, 229 Grove 1,000.00 BLDR0175-2021
Vendor: 942 YLCL CORPORATION
3373 Deposit Refund, 40 Firethorn 1,203.96 1,203.96 PW0089-2021 Vendor: 949 PORTER CAPITAL CORPORATION
3374 Temp Service, H. Singh 7/03/23-7/09/23 13,448.00 1,584.00 7036 Temp Service, S. Ahmad 7/03/23-7/09/23 1,824.00 7037Temp Service, H. Singh 7/10/23-7/16/23 1,980.00 7046Temp Service, S. Ahmad 7/10/23-7/16/23 3,040.00 7047Temp Service, H. Singh 7/17/23-7/23/23 1,980.00 7074Temp Service, S. Ahmad 7/17/23-7/23/23 3,040.00 7075 Vendor: 1014 SEDDON CONSTRUCTION
3375 Deposit Refund, 145 Fawn 1,000.00 1,000.00 BLDR0056-2022 Vendor: 1022 E M ROOFING
3376 Deposit Refund, 5 Valley Oak 1,000.00 1,000.00 BLDR0072-2023 Vendor: 1023 ELIZABETH STINSON
3377 Deposit Refund, 235 Willowbrook 599.25 599.25 PLN_FNCE06-2023 Vendor: 1024 JEROME JOONDEPH
3378 Deposit Refund, 40 Tagus Ct 1,338.63 1,338.63 14298 Vendor: 1025 LUCAS CONSTRUCTION
.
apapdinv2 sahmad Town of Portola Valley Page 3
15:19 08/03/23 Paid Invoices by Date
From: 08/09/2023 to 08/09/2023
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
08/09/23 3379 Deposit Refund, 12 Sandstone 1,000.00 1,000.00 BLDR0143-2022 Vendor: 1026 MACHU PICCHU ROOFING
3380 Deposit Refund, 120 Sausal 1,000.00 1,000.00 BLDR0097-2022 Vendor: 1027 MODERN LIFESTYLE CONSTRUCTION
3381 Deposit Refund, 170 Mapache 1,000.00 1,000.00 BLDR0202-2021 Vendor: 1028 P. WITHRINGTON CONSTRUCTION
3382 Deposit Refund, 180 Willowbrook 1,000.00 1,000.00 BLDR0072-2021 Vendor: 1029 POLLOUGH CONSTRUCTION
3383 Deposit Refund, 157 Ramoso 306.42 306.42 PW0078-2019 Vendor: 1030 TB CONSTRUCTION SERVICES CORP
3384 Deposit Refund, 3 Horseshoe 1,000.00 1,000.00 BLDR0074-2022 Vendor: 1031 WILLIAM BEASLEY
3385 Deposit Refund, 157 Ramoso 4,013.88 2,034.09 BLDR0062-2019 Deposit Refund, 157 Ramoso 500.00 BLDR0062-2019-1Deposit Refund, 157 Ramoso 1,479.79 BPLR0008-2020 Vendor: 1032 XPRESS KITCHEN & BATH
3386 Deposit Refund, 133 Corte Madera 1,000.00 1,000.00 BLDR0035-2023 Check Date Totals 86,054.82
Grand Total 86,054.82

TOWN OF PORTOLA VALLEY
Warrant Disbursement Journal
August 09, 2023
Claims totaling $86,054.82 having been duly examined by me and found to be correct are hereby approved and verified by me as due bills against the Town of Portola Valley.

Date _____________________________ ________________________________ Interim Town Manager
Motion having been duly made and seconded, the above claims are hereby approved and allowed for payment.

Signed and sealed this (Date) _____________________
_______________________________ _________________________________ Acting Town Clerk Mayor
_______________________________________________________________________ TO: Mayor and Town Council
FROM: Laura C. Russell, Planning & Building Director
Adrienne Smith, Senior Planner

DATE: August 9, 2023
RE: Town Response to the San Mateo County Grand Jury Report: “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?”

RECOMMENDATION
Staff recommends that Town Council Town review the Town’s draft response to the San Mateo County Grand Jury Report on ADUs and authorize submittal.

BACKGROUND
The Town has been working for approximately two years to update to its Housing Element in response to the RHNA number it received for the planning period that spans from 2023 to 2031 (RHNA Cycle 6). The Town has now made two formal submissions to the California Department of Housing and Community Development (HCD) and is currently working through the latest HCD comment letter receive on July 25, 2023. ADUs are an important part of the Town’s housing strategy.

DISCUSSION
On June 12, 2023, the San Mateo County Grand Jury released a report titled “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?” The report generally expresses concern about the inclusion of Accessory Dwelling Units (ADUs) in each jurisdiction’s Regional Housing Needs Assessment (RHNA) plan without mechanisms to monitor and verify that each ADU projected to be an affordable housing unit is ultimately created and rented at rate consistent with its projected affordability.

The Grand Jury’s report includes seven findings (Findings F1 through F7) and six recommendations (Recommendations R1 through R6). The Town, and all other jurisdictions

TOWN OF PORTOLA VALLEY

STAFF REPORT
Response to Civil Grand Jury Report
August 9, 2023

Page 2 ends

within San Mateo County, are required under the Penal Code to formally respond to each of these findings and recommendations. The report requires that the Town’s response to each finding express either its agreement or disagreement (wholly or partially) with the finding and to provide an explanation in instances where the Town indicates that it does not agree.

The Town’s response to each of the recommendations must indicate whether the recommended action has been implemented, is planned for implementation, requires further analysis, or will not be implemented. Except in instances where the Town indicates that the recommendation has already been implemented, the Town is required to provide an explanation for its response. The response is due no later than September 11, 2023.

FISCAL IMPACT
None

NEXT STEPS
With the Town Council’s direction, staff will submit the Town’s response to the Grand Jury report.

ATTACHMENTS

1. Proposed response to Grand Jury Report

2. Grand Jury Report titled “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?”
August 9, 2023
Honorable Nancy L. Fineman
Judge of the Superior Court
c/o Bianca Fasuescu
Hall of Justice
400 County Center; 2nd Floor
Redwood City, CA 94063-1655
Subject: The Town of Portola Valley’s Response to the San Mateo County Civil Grand Jury Report “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?” Dear Judge Fineman and Members of the Grand Jury,
Thank you for the opportunity to comment on the report titled, “Accessory Dwelling Units:

Affordable Housing’s Panacea or Prevarication?”. Please find our response to the findings and recommendations of the report below.

I. Response to Findings
F1. Due to recent changes in California ADU-related laws, local governments cannot condition ADU permits in San Mateo County on complying with affordability monitoring and verification.

Town of Portola Valley partially agrees with this finding. The Town of Portola Valley agrees that State laws require local jurisdictions to issue permits for ADUs that meet certain statutory criteria and are precluded from conditioning those permits upon compliance with affordability monitoring. However, it may be possible to condition permits for ADUs that do not meet these criteria (e.g. ADUs that exceed size limitations or additional ADUs permitted on the same lot).

F2. San Mateo County and most of its municipalities rely on ADUs to meet their affordable housing commitments in their RHNA-6 plans.

The Town of Portola Valley partially agrees with this finding. While the Town counts ADUs to meet affordable housing commitments in RHNA, it relies on several other strategies to realize affordable units. Below are examples of some of the Housing Element programs the Town is developing to facilitate the construction of low-income units:
● Creating brand new land-use designation to facilitate the construction of a 50-unit 100% affordable housing project on Town land
● Creating two additional brand new zoning districts (multi-family and mixed-use) - a significant shift for a Town that is exclusively zoned for single-family ● Amending the zoning ordinance to establish inclusionary housing requirements for new multi-family housing developments
● Establish Object Design Standards for two new zoning districts to allow for greater certainty in the Town’s design review process
● Codifying the Town’s Affiliated Housing Program that allows for construction of workforce housing on Town lands with institutional and commercial uses. Codification includes establishing program parameters and processes and includes development and affordability requirements to further incentivize program use ● Through collaboration with local service providers, convene a discussion of populations that are experiencing comparatively high rates of cost burden to discuss solutions for relief.
● Ensure the permitting process for modular and manufactured homes is cleared of any disincentives and develop informational materials to assist applicants F3. Atherton, Hillsborough, Portola Valley, and Woodside rely on ADUs to meet as much as 80 percent of their affordable housing commitments in their RHNA-6 plans.

The Town of Portola Valley partially disagrees. The word choice of this finding implies that the Town of Portola Valley uses ADUs for 80 percent of the affordable housing commitments. In reality, it is 55%, which is appropriate based on the residential characteristics of the community.

Town land is prohibitively expensive, there is no available public transit infrastructure, and a large percentage of Town land is subject to land use constraints such as steep slopes, unstable soils and wildfire hazard. Opportunities to obtain tax credits for affordable housing projects is limited based on the Town’s location and available services. Without an appropriate number of ADUs, the Town simply cannot meet its RHNA.

F4. HCD has instructed San Mateo County jurisdictions to monitor and verify future ADU production and affordability every two years but has yet to specify how to verify whether very low-, low- or moderate-income households are occupying the ADUs as planned.

The Town of Portola Valley partially agrees with this finding. We do not expect HCD to specify how to verify the income levels of ADU occupants. Additionally, HCD is only asking for verification at the initial time of occupancy. Portola Valley is planning on supporting a regional ADU monitoring effort through ABAG or 21 Elements, a long-standing collaboration among the 21 jurisdictions of San Mateo County.

F5. Other than Brisbane and Redwood City, San Mateo County and its jurisdictions have yet to articulate how they will monitor and verify ADU production or affordability.

The Town of Portola Valley agrees with this finding. San Mateo County jurisdictions met on June 20, 2023 to discuss potential strategies for monitoring ADU affordability levels. The Town of Portola Valley is planning to support a regional ADU monitoring effort through ABAG or 21 Elements. We expect this monitoring effort to begin no later than two years after the Housing Element was due (early 2025).

F6. Without effective ADU monitoring and verification, it will be impossible to evaluate whether the jurisdictions are meeting their RHNA-6 obligations for low-, very-low, and moderate-income housing units.

The Town of Portola Valley agrees with this finding. As stated above, the Town is planning to support a regional approach to monitoring ADU affordability.

F7. ADU affordability and occupancy could be monitored by agencies such as HIP Housing which has proven systems and processes to verify occupancy of deed-restricted rental properties in San Mateo County.

The Town of Portola Valley agrees with this finding. HIP is one potential partner agency.

II. Response to Recommendations
R1. San Mateo County and each City should immediately stop using ADUs to meet their Statemandated very low-, low-, and moderate-income housing targets in their Housing Element submissions until they have also proposed an effective monitoring system that verifies how newly developed ADU’s will be used.

The recommendation will not be implemented because it is not feasible. While the Town of Portola Valley shares the Civil Grand Jury’s goal to increase ADU affordability monitoring, it is not feasible to revise the Town’s Housing Element to eliminate the use of ADUs and still meet its affordable housing goals. The Housing Element was developed through a rigorous process consisting of multiple years of public input and revisions. To date, Town staff, consultants, the Ad Hoc Housing Element Committee, various Town committees, the Planning Commission, Town Council and residents have spent 143 hours across 41 meetings addressing its Housing Element.

The Town of Portola Valley already made its second submission to HCD on May 25, 2023; it is simply unreasonable to request a major change to the Town’s housing policy this late in the process. Incorporating a change of this scale at this stage of the Housing Element update process would cause a significant delay to the adoption of the Housing Element, and be in directs odds with the implementation of programs designed to encourage new affordable housing. However, The Town of Portola Valley is committed to following state housing law and to supporting the development of an effective regional ADU monitoring program which will be operated by 21 Elements or ABAG. The Town of Portola Valley is also supporting the development of a new ADU nonprofit that will have programs to incentivize the production of affordable ADUs in San Mateo County. The Town will have this monitoring program in place for future Housing Element cycles.

R2. By February 1, 2024, San Mateo County and each City should develop, adopt, and implement a verification system capable of monitoring and verifying how newly developed ADU’s are being used.

Part of the recommendation has yet to be implemented but will be implemented in the future. However, part of the recommendation is not warranted. The Town of Portola Valley agrees that it is important to have high quality information about who is living in ADUs. The Town will participate in the ABAG or 21 Elements ADU monitoring system. The monitoring is projected to launch in January 2025 and will likely survey people about their plans for their ADU at the time permits are issued. However, it is important to note that due to homeowner privacy concerns and the cost of engaging with thousands of homeowners every year, it would not be practical to have an ongoing verification system that checks the income of every resident of every ADU in the county.

R3. By February 1, 2024, San Mateo County and each City should develop and adopt incentives for ADU owners which could be offered in exchange for deed restrictions that would include requirements for ADU tenants to participate in independent monitoring.

This recommendation has yet to be implemented but will be implemented to some extent in the future. The Town of Portola Valley agrees with the goal of adopting an affordable ADU program. The Town is also actively involved in the creation of an ADU nonprofit to serve San Mateo County jurisdictions and 21 Elements, working on behalf of the Town, have been researching best practices. The draft work plan for the nonprofit calls for it to offer programs to incentivize the production of affordable ADUs and support homeowners in constructing ADUs in exchange for agreeing to rent at affordable levels. The nonprofit is projected to launch in July 2024 and will be financially supported by San Mateo County jurisdictions as well as private philanthropy if possible.

Regarding deed restrictions specifically, the Town will first assess whether incentives offered in exchange for deed restrictions are compelling to homeowners. The Town’s goal is to generate as many affordable ADUs as possible and it will focus its efforts on offering incentives that best achieve that goal.

Additionally, either as an add on to the above nonprofit efforts, or as a Town-run initiative, the Town plans to develop an affordable ADU rental program to match low-income tenants who have experienced displacement with ADU owners willing to rent at below market rates. If necessary to drive participation, the Town will consider incentives such as waiving fees or other financial incentives.

R4. By February 1, 2024, San Mateo County and each City should track the intended use of ADUs – rented or non-rented – during the permitting process and offer incentives in exchange for deed restrictions that require ADUs to be used as rentals.

This recommendation has yet to be implemented but will be implemented to some extent in the future. As part of the monitoring program referenced in response to R2, The Town of Portola Valley will track the intended use of ADUs. The Town will develop an incentive program that offers incentives in exchange for affordability requirements that most effectively generate affordable units.

R5. By April 1, 2024, San Mateo County and each City should develop and adopt a new ADU affordability distribution formula specific to each jurisdiction to the extent they are used for meeting the very low-, low-, and moderate-income housing requirements in their RHNA housing elements.

The recommendation will not be implemented because it is not warranted or reasonable.

While we agree with the importance of an accurate distribution formula, given the relative small size of Portola Valley, a more meaningful distribution formula can be attained by collecting data on ADUs constructed across all San Mateo County jurisdictions. The Town of Portola Valley is supporting the aforementioned creation of an ADU monitoring program through 21 Elements or ABAG which will collect data that can be used to revise the distribution formula based on actual observed income levels.

Additionally, so long as the recommended 30/30/30/10 ADU affordability distribution established by ABAG is supported by HCD, the Town will continue to employ it as a baseline. The allocation is based on a UC Berkeley study that surveyed thousands of homeowners statewide with repeat mailing and the data was aggregated to reduce the margin of error. There is also no evidence in the data to suggest significant variation from city to city. Additionally, the recommended affordability distribution had a significant built in cushion to ensure cities do not accidentally underproduce the amount of housing needed. Even if the Town were to conduct its own surveying, the margin of error would be too large rendering unreliable data.

R6. San Mateo County and each City should consider working together to address Recommendations 2 and 3.

This recommendation has been implemented.

San Mateo County jurisdictions work collaboratively through 21 Elements to develop, adopt, and implement housing policies and programs in the county. San Mateo County jurisdictions are already working together to address recommendations 2 and 3 and the Town will ensure its policies and programs are reflective of those efforts.

Accessory Dwelling Units:

Affordable Housing’s Panacea or Prevarication?
Release Date: June 12, 2023
2022-2023 San Mateo County Grand Jury
2022-2023 San Mateo County Civil Grand Jury 1
“You can always count on Americans to do the right thing – after they’ve tried everything else.” Winston Churchill
“Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness.” Martin Luther King, Jr. 2022-2023 San Mateo County Civil Grand Jury 2
ISSUE
Are some San Mateo County communities misusing Accessory Dwelling Units (ADUs) to avoid the construction of multifamily low-income housing over the next eight years?

SUMMARY
Anointed the “epicenter of America’s housing dysfunction” by Harvard Business Review this year, the San Francisco Bay Area has faced an acute housing shortage at all levels for decades, especially for those who have the least.

And it is no longer news that many of the workers that San Mateo County communities depend upon daily – first responders, teachers, nurses, city employees, gardeners, and housekeepers, to name just a few – cannot afford a decent place to live and raise their families close to their jobs.

To address the issue, the State Legislature in 1969 passed the Housing Element Law, which says all California cities, towns, and counties, every eight years, must plan for the housing needs of all their residents regardless of income, which effectively requires development of affordable housing. Many changes and additions have been made to the law over the years, most recently eliminating zoning restrictions governing ADUs – small homes or apartments that share a single-family lot of a larger primary residence – and allowing communities to count them as affordable housing in their Regional Housing Needs Allocation (RHNA) plans.

At issue:
● Although their intentions have been good, the State has neglected to include any form of regulation to ensure low-income tenants ultimately use these ADUs as planned. ● Because owners often rent their ADUs to family and friends, they can exacerbate patterns of segregation and exclusion.1
● And perhaps most importantly – counting ADUs as affordable housing will likely result in cities issuing permits for fewer deed-restricted low-, very low-, and moderate-income apartments and homes.

Without accountability through oversight and regulations, low-, very low-, and moderate-income housing now planned in some San Mateo County jurisdictions may end up existing solely on paper and never in operation.

This problem is most acute in Atherton, Hillsborough, Portola Valley, and Woodside, where some residents are up in arms over the State-mandated housing requirements, and the city governments, trying to appease them, are proposing counting on ADUs to meet as much as 80 percent of their affordable housing targets.

1 Association of Bay Area Governments, “Final Regional Housing Needs Allocation (RHNA) Plan, San Francisco Bay Area, 2023-2031”, accessed May 27, 2023, https://abag.ca.gov/sites/default/files/documents/2021- 12/Final_RHNA_Allocation_Report_2023-2031-approved_0.pdf 2022-2023 San Mateo County Civil Grand Jury 3
Assembly Bill 72 (2017) gives the California Department of Housing and Community Development (HCD) enforcement capability on local government’s land use, planning, and zoning requirements. In the current RHNA-6 (2023-2031) planning cycle, HCD demands that San Mateo County jurisdictions monitor and verify ADU affordability every two years. However, HCD has not specified how to prove the ADUs are rented to very low-, low- or moderate-income households, leaving it to the communities to find a solution.

So far, jurisdictions have yet to do so, even though local independent agencies such as HIP Housing have systems and services in place, which they use to verify affordability of deed-restricted affordable housing, and that could be adapted Countywide to monitor and verify ADUs’ affordability and occupancy in a manner that adheres to fair housing guidelines.

California needs to build 2.5 million homes by 2030 to meet current housing demands, according to the HCD. But the State averages only about 125,000 new homes annually – a shortfall by nearly two-thirds.

ADUs can, indeed, provide affordable housing. And to many citizens of affluent communities, they are an appealing alternative to multi-family, deed-restricted affordable housing projects. However, just because the law makes it possible to count ADUs as affordable housing, it does not exempt cities and towns from credibly planning for badly needed affordable housing.

BACKGROUND
One of the State’s long-standing priorities has been to increase the availability of affordable housing for all economic segments.

HCD – the California Department of Housing and Community Development – focuses on making this happen by working with local jurisdictions to create rental and homeownership opportunities for all Californians, including individuals and families who are experiencing homelessness.

Beginning in 1969, the State mandated that all California cities, towns, and counties must plan for the housing needs of all Californians, regardless of income. They meet this mandate by developing and updating a Housing Element, part of a local jurisdiction’s General Plan, which shows where they will allow new housing and describes the policies and strategies necessary to support building new housing.

The process of updating the Housing Element involves HCD working with various Councils of Governments (COG) to develop a RHNA plan that includes the Regional Housing Needs Determination (RHND), which assigns the number of housing units that each county and city are expected to facilitate being built in the subsequent eight years to accommodate projected growth.

In the case of the Bay Area, this Council of Governments is the Association of Bay Area Governments (ABAG), which represents all nine Bay Area counties, including San Mateo County and its 20 cities and towns. Components that ABAG considers in determining each Bay Area county’s and city’s allocation of housing units include population, employment potential, proximity to transportation centers, open space, inclusivity, and diversification, all of which are becoming increasingly important to the State, according to ABAG reports.
2022-2023 San Mateo County Civil Grand Jury 4
Multiple bills in both houses of the State Legislature have been proposed over the years to change the process and increase the amount of State control over housing development. Particularly significant changes occurred during the 2017 legislative session when senators and assembly members proposed approximately 150 housing bills. That year the Governor ultimately signed a package of 15 bills related to funding for housing, streamlining development approvals, and increasing accountability for meeting the requirements of the Housing Element Law. These included bills that significantly changed the RHNA process, requiring additional outreach and reporting, modifying how to calculate the RHND to reflect unmet housing needs better, increasing the number of topics to be considered in the allocation methodology, and giving HCD, on behalf of the State, the ability to sue individual counties or cities for not meeting requirements.

Updating the Housing Element every eight years is an iterative process involving HCD, the regional COGs, the State Department of Finance (DOF), and local jurisdictions. (See Appendix D.) But the ultimate authority for approval of the RHNA, the RHND, and the associated Housing Elements resides with HCD.

The current approved RHNA plan developed by ABAG is known as RHNA-6, which spans 2023 to 2031.

HCD requires each jurisdiction to submit its completed Housing Element for review and approval by a specific date. For RHNA-6, the due date for San Mateo County and its cities was January 31, 2023.

Before the due date, the jurisdictions were able to send their draft Housing Elements to HCD for preliminary review and comments and make necessary modifications that HCD highlights. Any jurisdiction which fails to meet the deadline for submission of their completed Housing Element is subject to a potential “builders remedy” action that forces a city to allow building projects regardless of whether they meet most of the local zoning restrictions.

Once Housing Elements are approved, HCD monitors the progress of approved RHNA plans by requiring each jurisdiction to report its building permit activities annually. If progress is below expectations, the jurisdiction must develop alternative strategies for review and approval by HCD.

During the RHNA-5 (2015-2023) progress reviews submissions, cities began including ADUs as part of the overall housing inventory in their annual reports because State legislation (Government Code section 65852.150) that became effective in January 2017 stated that ADUs are a valuable form of housing in California, which also "provide housing for family members, students, the elderly, in-home health care providers, the disabled, and others, at below market prices within existing neighborhoods." Numerous Senate and Assembly bills were enacted in 2018 and 2020, requiring local jurisdictions to streamline and allow for ease of ADU production to increase housing for all income categories. With these encouragements, ADUs being deemed a viable housing option, and facing stringent RHNA-6 requirements of approximately three times more housing units than in the RHNA-5 cycle, a few affluent San Mateo cities have proposed using ADUs to satisfy most of their plans to meet the required number of housing units in the various income categories.
“ADUs are not a panacea, but they’re a good tool in the toolbox,” said a planning consultant working for a San Mateo County city. “Most land on The Peninsula is single-family homes. ADUs are opening land that was not open before. But higher density housing near transit is better.” 2022-2023 San Mateo County Civil Grand Jury 5
Added a city manager: “I think they (ADUs) are a piece of the solution, but not all of it. I think ADUs are an important way to provide opportunities for other things – where people want multigenerational living onsite, for caretakers, or other folks – they can reside in an ADU even if they’re not paying rent.”

DISCUSSION
While HCD-approved RHNA Housing Elements do not require the cities and counties to build affordable housing, the jurisdictions must adjust zoning ordinances, issue permits to allow construction of affordable housing, and initiate programs that incentivize such construction.

However, as shown in Chart 1 below, significant portions of San Mateo County's affordable housing in RHNA-5 (2015-2023) plans did not materialize – most likely due to a lack of permit applications.

With RHNA-5’s significantly lower targets, the less-than-expected performance during the RHNA-5 cycle foreshadows the enormous challenge the County’s cities and towns now face in meeting the RHNA-6 goals for the next eight years, which are approximately three times larger, as shown in Chart 2 below.

Chart 1: RHNA-5 Affordable Housing Required vs. Permitted 2022-2023 San Mateo County Civil Grand Jury 6
Chart 2: RHNA-5 Affordable Housing Allocations vs RHNA-6 Besides increasing affordable housing targets by nearly 300 percent, the State has made other significant changes in the ADU laws to address the current housing crunch.

Law Year Impact
AB671 2019 Through Housing Elements, HCD to promote ADUs for affordable rent AB670 2019 Any local covenants and restrictions on new housing are void AB587 2019 Deed-restricted sale of ADU is allowed separately from the main house AB 68 2019 Removes local restrictions on minimum size, requirement of owner occupancy, parking requirements for garage conversion, and any impact fee.

AB 3182 2020 Permitting process within 60 days
SB9 2021 Facilitates lot split and allows more than1 ADU per property AB 345 2021 Allows owners to sell ADUs separately
AB 2221 2023 Pre-specific time permit frame for approval of ADU applications SB 897 2023 Increases the ADU height limit to 18’ and allows retro permitting of previous unauthorized ADUs.

The net effect of these changes was to minimize municipal-level regulations on ADUs – such as parking requirements, property line setbacks, height limits, or the number of ADUs on one property – and make 2022-2023 San Mateo County Civil Grand Jury 7
ADUs an acceptable means to meet affordable housing obligations. Given these changes, namely high mandatory targets for affordable housing, enthusiastic support by the State of ADUs as affordable housing, and requiring zero land use rezoning for ADUs, nearly all San Mateo County cities and towns include ADUs in their RHNA-6 Housing Elements.

The issue, however, is that for every ADU included in a Housing Element – regardless of whether the ADU is built and rented to very low-, low-, or moderate-income tenants – one verifiable, deed-restricted affordable housing unit will not be built in that jurisdiction by a developer.

So, How Did We Get Here?
California cities and counties can now use ADUs to help satisfy their RHNA requirements. But calculating how many ADUs to put into a Housing Element and how to distribute them into each income category, differ from other housing options.

ABAG instructs San Mateo County jurisdictions that the standard method is first to estimate the number of ADUs that homeowners will build in a planning period, which is 2023 through 2031 for RHNA-6.

In its technical memo “Using ADUs to Satisfy RHNA,” ABAG advises members that the estimate should be based on the average number of ADU building permits issued each year, multiplied by eight, because there are eight years in a housing element cycle.
“Most cities base their determination of annual ADU permits by averaging the building permits approved each year since 2019 when State law made it easier to construct the units,” the technical memo explains:
“There is a small amount of flexibility in the calculations,” the memo continues. “If numbers were low in 2019 but were high in 2020, 2021, and 2022, a jurisdiction could potentially use 2020-2022 as the baseline. This rationale would be bolstered if there was a logical explanation for the change, e.g., the jurisdiction further loosened regulations in 2020. Projecting a higher number of ADUs than what has been demonstrated through permit approvals in recent years may be possible, but more challenging. A slightly larger number may be warranted if a robust, funded, and clear plan to increase production has been put in place. However, you are strongly encouraged to coordinate with HCD before deviating from the standard methodology.”
Once cities complete their estimate, they must distribute those units into each income category.

To help its members, ABAG analyzed ADU affordability. Using data from a 2020 statewide survey of homeowners who had constructed ADUs in 2018 or 2019, ABAG concluded that the assumptions in the chart below are generally applicable in most jurisdictions. Many Bay Area jurisdictions chose to use these numbers instead of conducting their own affordability analysis.

Percent Income Category
30% Very Low Income
30% Low Income
30% Moderate Income
10% Above Moderate
2022-2023 San Mateo County Civil Grand Jury 8
“UC Berkeley Terner Center did a statewide survey of ADU affordability, and they worked with ABAG to adjust it for the Bay Area specifically,” said a San Mateo County planner. “So those (numbers) are based on surveys and data analysis of actual ADUs that have been produced, and the rents that are being offered to tenants. We are just accepting their analysis as is.” San Mateo County jurisdictions have almost unanimously adopted ABAG’s 30-30-30-10 formula.

However, a 2021 report and recommendations for RHNA-6 prepared by ABAG’s Housing Technical Assistance Team, titled “DRAFT Affordability of Accessory Dwelling Units,” says that although ADUs are often affordable, jurisdictions should be cautious about relying on them too heavily because of fair housing concerns:
“Many ADUs are affordable to lower and moderate-income households because they are rented to family and friends of the homeowners,” the report states. “If minorities are underrepresented among homeowners, the families and potentially friends of the homeowners will be primarily white. Therefore, relying too heavily on ADUs could inadvertently exacerbate patterns of segregation and exclusion.” The report also acknowledges that ADUs often do not serve large families, another critical fair housing concern.

And while ADUs accomplish an essential fair housing goal by adding new homes in parts of the municipality that are more likely to be areas of opportunity, the report recommends that jurisdictions with fair housing concerns "may want to use more conservative assumptions based on open market rentals, excluding units made available to family and friends," as summarized below:

Percent Income Category
5% Very Low Income
30% Low Income
50% Moderate Income
15% Above Moderate
So far, 16 San Mateo County cities have chosen the 30-30-30-10 formula, implying there are no fair housing concerns in their jurisdictions.

Only two cities – San Carlos and San Mateo – use ABAG’s more conservative formula of 5-30-50-15 in their plans. One city – Belmont – used its own judgment.2 And one – Colma – does not use ADUs in their plans at all to meet State requirements.

But in all cases, these statistical estimates may not reflect the actual usage of constructed ADUs.

Determining that would require actual verification by each local jurisdiction.

2 City of Belmont, “General Housing Element Draft 2023-2031”, p. 25, accessed May 27, 2023, https://www.belmont.gov/home/showpublisheddocument/21721/637968613354630000 2022-2023 San Mateo County Civil Grand Jury 9
ADUs planned in RHNA-6
(May 11, 2023)
City Very Low Low Moderate Above
Moderate
Total ADUs Total
RHNA-6
Requirement
Atherton 56 56 56 112 280 348
Belmont 0 0 80 0 80 1785
Brisbane 12 12 12 4 40 1588
Burlingame 50 50 50 17 167 3257
Colma - - - - 0 202
Daly City 151 151 151 50 503 4838
East Palo Alto 35 34 34 12 115 829
Foster City 7 7 7 3 24 1896
Hillsborough 84 84 84 28 280 554
Menlo Park 26 25 26 8 85 2946
Millbrae 34 34 33 11 112 2199
Pacifica 56 56 56 19 187 1892
Portola Valley 28 28 28 8 92 253
Redwood City 152 152 152 50 506 4588
San Bruno 72 72 72 24 240 3165
San Carlos 10 61 102 30 203 2735
San Mateo 22 132 220 66 440 7015
South San
Francisco
113 113 113 38 377 3956
Unincorporated
San Mateo
107 107 107 36 357 2833
Woodside 36 36 36 12 120 328
(This table includes all San Mateo County jurisdictions that have submitted Housing Element plans to HCD for review. As of June 1, 2023, Half Moon Bay and Daly City have not submitted RHNA-6 plans for HCD review.) Accordingly, if HCD approves cities and towns' current Housing Elements, San Mateo County may end up with many affordable housing units that exist only on paper because they are counted as affordable units by the State but never made available or occupied by people who need affordable housing:
“BMR (below market rate) unit displacement is a legitimate issue,” said a city planning consultant. “RHNA looks at (the number of) units, not the number of people being housed. For the State, they’re all counted the same – an ADU or three-bedroom apartment, five vs. one or two people. In the eyes of the State, they’re all the same.”
2022-2023 San Mateo County Civil Grand Jury 10
Finally, the cities and towns relying primarily on ADUs to meet their RHNA-6 housing targets do not meet the overall objectives required by HCD and RHNA of:
● Increasing the housing supply and mix of housing types, tenure, and affordability ● Promoting infill development and socioeconomic equity, protecting environmental and agricultural resources, and encouraging efficient development patterns ● Promoting an improved intraregional relationship between jobs and housing ● Balancing disproportionate household income distributions ● Affirmatively furthering fair housing
Housing and Community Development Pushes Back
Four San Mateo County municipalities – Atherton, Hillsborough, Portola Valley, and Woodside – rely heavily on ADUs to meet low-income housing requirements in their RHNA-6 Housing Elements.

May 17, 2023
While HCD does not single out those four cities for their heavy reliance on ADUs to meet their affordable housing needs, throughout the process of submission and review of draft RHNA-6 plans, HCD consistently instructed San Mateo County cities and towns that they must monitor and verify ADU production and affordability at least every two years but has not specified an acceptable process for verifying the affordability level of ADUs as planned.

Should San Mateo County and its cities seek outside help on this issue, there are a handful of independent non-profit agencies and for-profit real estate management companies operating today in the Bay Area that have established systems and processes for monitoring and verifying rented occupied housing for continued affordability and adherence to fair housing guidelines while maintaining tenant and owner privacy – which was an issue continually raised by City Managers and other officials during Grand Jury interviews.
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60%
70%
80%
90%
ADUs as Percent of RHNA6 Affordable Housing
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ADU Affordability Monitoring Emphasized in HCD Review Letters to Jurisdictions Atherton (4-4-23)
Program 3.812 (New Construction of Affordable Accessory Dwelling Units): While the element was revised to include timing of each action, it is unclear how affordability will be established. The program should be revised to clarify actions to establish and track affordability.

East Palo Alto (4-25-23)
Accessory Dwelling Units (ADU): As noted in the prior review, the element should include a program that commits to frequent monitoring (every other year) for production and affordability, and specific commitment to adopt alternative measures such as rezoning or amending the element within a specific time (e.g., six months) as needed.

Foster City (4-24-23)
Program H-D-4-h (ADU Monitoring): While the program commits to evaluating alternative actions by the end of 2026, it must commit to specific alternative actions and monitor production and affordability of ADUs more than once in the planning period (e.g., every two years).

Hillsborough (1-10-23
This analysis should specifically address whether the ADU strategy to accommodate lower-income households contributes to continued exclusion and disparities in access to opportunity and how the strategy promotes housing choice for a variety of households including lower-income households, and large families.

To support assumptions for ADUs in the planning period, the element should reduce the number of ADUs assumed per year and reconcile trends with HCD records, including additional information such as more recent permitted units and inquiries, resources and incentives, other relevant factors, and modify policies and programs as appropriate. Further, programs should commit to additional incentives and strategies, frequent monitoring (every other year), and specific commitment to adopt alternative measures such as rezoning or amending the element within a specific time (e.g., six months) if ADU production assumptions are not being achieved.

Millbrae (1-24-23)
Accessory Dwelling Units (ADU): To support assumptions for ADUs in the planning period, programs should commit to additional incentives and strategies, frequent monitoring (every other year) of production and affordability and specific commitment to adopt alternative measures such as rezoning or amending the element within a specific time (e.g., 6 months) if needed.

Depending on the analysis, the element must commit to monitor ADU production and affordability throughout the planning period and implement additional actions if not meeting target numbers within a specified time period (e.g., within six months).

Redwood City (7-8-22)
Programs must be expanded to include incentives to promote the creation and affordability of Accessory Dwelling Units (ADUs).

Examples include exploring and pursuing funding, modifying development standards and reducing fees beyond State law, increasing awareness, pre-approved plans and homeowner/applicant assistance tools. In addition, given the city’s assumptions for ADUs, the element should include a program to monitor permitted ADUs and affordability every other year and take appropriate action such as adjusting assumptions or rezoning within a specified time period (e.g., 6 months).

San Bruno (3-29-23)
Accessory Dwelling Units (ADU): While the element revised the ADU assumptions, Program 4-P must be revised to commit to additional incentives and strategies, frequent monitoring (every other year) and specific commitment to adopt alternative measures such as rezoning or amending the element within a specific time (e.g., 6 months) if needed. The element must also address affordability assumptions for ADU projections.

San Mateo (3-27-23)
Accessory Dwelling Units (ADU): Program 1.4 must commit to also monitoring affordability of the ADU units that are permitted as well as provide additional incentives or identify additional sites if production and affordability assumptions are not met.

County of San Mateo (4-20-23)
Accessory Dwelling Units (ADU): Further, programs should commit to additional incentives and strategies, frequent monitoring for production and affordability (every other year) and specific commitment to adopt alternative measures such as rezoning or amending the element within a specific time (e.g., 6 months) if needed. The element must also address affordability assumptions for ADU projections, by clarifying what ABAG assumptions are utilized.

South San Francisco (3-30-23)
The element should include a commitment to reconcile trends with reported units within the Cities submitted annual progress report. Further, as Stated in the previous review, programs should commit to additional incentives and strategies, frequent monitoring (every other year) and specific commitment to adopt alternative measures such as rezoning or amending the element within a specific time (e.g., six months) if number and affordability assumptions are not met.

Woodside (10-14-22)
Depending on the analysis, the element must commit to monitor ADU production and affordability throughout the planning period and implement additional actions if not meeting target numbers within a specified time period (e.g., within six months).

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In their HCD approved housing plans, Brisbane and Redwood City aren’t definitive about how they will monitor ADU affordability but imply they will use surveys to comply with HCD instructions.

Redwood City plans to collect ADU rental data during its permitting process. And Brisbane says, if available, it will participate in a regional forgivable ADU construction loan program in exchange for limiting rentals of the ADUs to extremely low-income households for 15 years. Brisbane said it is also exploring a possible city forgivable loan program if the regional program doesn’t materialize. “We can’t force people to report to us or to be honest with us,” said one jurisdiction’s planner.

Another city’s chief planner concluded that a deed restriction – any limitation on a property that affects the ability of the property owner to utilize the property as they wish, such as a requirement to verify a tenant’s income and rent charged – “is the best way to (enforce) affordability.” Alternatively, one city planning official suggested the formation of a Countywide nonprofit to income-qualify and match renters to available ADUs, thereby monitoring and enforcing affordability because the smaller towns and cities don't have the resources to perform that function on their own.

Finally, a fourth city planner offered an alternative view: “We’re not a city hiding behind ADUs. ABAG gave us a formula. We plopped it in. If the State said you can’t count ADUs at all, that would be fine.” A Long, Long Way to Go
The Superior Court of California requires all San Mateo County Civil Grand Jury investigation reports to be completed and published by June 30 annually.

And although the law required San Mateo County cities and towns to submit their housing plans by January 31, 2023, as of June 1, Daly City has yet to adopt and submit a draft plan to HCD for review and approval.

Meanwhile, plans from Foster City, Half Moon Bay, Millbrae and Pacifica are now under HCD review.

So far, HCD has reviewed and rejected plans from 14 jurisdictions: Atherton, Belmont, Burlingame, Colma, East Palo Alto, Hillsborough, Menlo Park, Portola Valley, San Bruno, San Carlos, San Mateo, South San Francisco, Woodside, and San Mateo County, which is responsible for unincorporated areas.

As of the publication of this report, only Redwood City and Brisbane had completed the process and received the green light from HCD to proceed.

One reason cited for the delay is most San Mateo County cities and towns don’t have a large enough staff to manage the workload that RHNA planning represents, so they outsource. And many could not find timely help because the consultants were busy preparing RHNA-6 plans for Southern California cities, which were due before San Mateo County municipalities. That caused many communities here to fall behind and are now out of compliance with the timing of their Housing Element submissions.

These delays, coupled with citizen objections to multifamily housing in their communities, almost guarantee RHNA-6 disputes will end up in the courts and remain unresolved for many years to come and postpone the building of sorely needed affordable housing indefinitely. 2022-2023 San Mateo County Civil Grand Jury 13

FINDINGS
F1. Due to recent changes in California ADU-related laws, local governments cannot condition ADU permits in San Mateo County on complying with affordability monitoring and verification.

F2. San Mateo County and most of its municipalities rely on ADUs to meet their affordable housing commitments in their RHNA-6 plans.

F3. Atherton, Hillsborough, Portola Valley, and Woodside rely on ADUs to meet as much as 80 percent of their affordable housing commitments in their RHNA-6 plans.

F5. Other than Brisbane and Redwood City, San Mateo County and its jurisdictions have yet to articulate how they will monitor and verify ADU production or affordability.

RECOMMENDATIONS
R1. San Mateo County and each City should immediately stop using ADUs to meet their Statemandated very low-, low-, and moderate-income housing targets in their Housing Element submissions until they have also proposed an effective monitoring system that verifies how newly developed ADU’s will be used.

R2. By February 1, 2024, San Mateo County and each City should develop, adopt, and implement a verification system capable of monitoring and verifying how newly developed ADU’s are being used.

R6. San Mateo County and each City should consider working together to address Recommendations 2 and 3.
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REQUEST FOR RESPONSES
Pursuant to Penal Code Section 933.05, the Civil Grand Jury requests responses from San Mateo County and all 20 cities’ governing bodies for each and every Finding and Recommendation.

The governing bodies should be aware that their comments or responses must be conducted subject to the Brown Act's notice, agenda, and open meeting requirements.

RESPONSE REQUIREMENTS
California Penal Code Section 933.05 provides: For purposes of subdivision of Section 933, as to each Grand Jury finding, the responding person or entity shall report one of the following:
(1) The respondent agrees with the finding.
(2) The respondent disagrees wholly or partially with the finding; in which case the response shall specify the portion of the disputed finding and shall include an explanation of the reasons.

For purposes of subdivision of Section 933, as to each Grand Jury recommendation, the responding person or entity shall report one of the following actions:
(1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has yet to be implemented but will be implemented in the future, with a timeframe for implementation.
(3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This time frame shall be at most six months from the Grand Jury report's publication date.
(4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore.

METHODOLOGY
The San Mateo County Civil Grand Jury used numerous approaches to develop this report. ● Preliminary Research
The Grand Jury studied RHNA-5 historical information and RHNA-6 Housing Elements submitted to HCD by the cities and towns in San Mateo County as they became available.

Before conducting in-depth research, the Grand Jury studied ABAG's reports on RHNA-6 housing allocations, introducing numerous issues and a means to understand how jurisdictions establish housing allocations. Additionally, the Grand Jury reviewed a 2021 ABAG report on ADU affordability for RHNA-6 and RHNA-5 annual progress reports to understand history. 2022-2023 San Mateo County Civil Grand Jury 15
The Grand Jury also reviewed a report on ADUs titled “A Solution on the Ground: Assessing the Feasibility of Second Units in Unincorporated San Mateo County, Implementing the Backyard Revolution: Perspectives of California's ADU Owners,” April 22, 2021, Karen Chapple, Dori Ganetsos, Emmanuel Lopez, UC Berkeley Center for Community Innovation.

An additional resource for Preliminary Research has been the press. Particularly following the January 31, 2023 deadline for RHNA-6 submissions, nearly 60 articles provided insights and analysis the Grand Jury could not find elsewhere.

For a complete list of sources, see the Bibliography below. ● Survey
After conducting its Preliminary Research, the Grand Jury sent an eight-question survey in October 2022 to the city managers of the 20 San Mateo County cities and towns and the San Mateo County planning and building department responsible for the County's unincorporated areas.

See Appendix A for survey results.
● Interviews
Much of the time spent by the Grand Jury on this investigation was in more than 30 interviews with 21 city managers and planning managers, five heads of nonprofit housing entities in San Mateo County, and executives at ABAG, HCD, and several other government bodies. ● Continued Research
Because RHNA-6 submissions and HCD replies are ongoing, the Grand Jury has continued to monitor the status of RHNA-6 submissions and HCD responses.

This report reflects submissions received prior to the report's due date of June 30, 2023.

GLOSSARY
Accessory Dwelling Units (ADUs)
An accessory dwelling unit (ADU) is a legal and regulatory term for a secondary house or apartment that shares the building lot of a larger primary home. The unit is often used to provide additional income through rent or to house a family member. For example, an elderly parent could live in a small unit and avoid having to move to an assisted living facility. (Source: Investopedia) Affordable Housing: Very Low Income; Low Income; Moderate Income; Above Moderate Income Affordable housing is generally defined as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities. (Source: www.hud.gov) 2022-2023 San Mateo County Civil Grand Jury 16
Association of Bay Area Governments (ABAG)
The Association of Bay Area Governments (ABAG) is the Council of Governments (COG) for the ninecounty Bay Area. One of California’s earliest COGs, ABAG was founded to protect regional assets from State control. ABAG continues to serve the Bay Area by providing a regional venue for collaboration and problem-solving. ABAG’s work program includes management over key regional assets, such as the San Francisco Estuary and the Bay Trail Project. It also offers a variety of cost-effective member services programs such as Pooled Liability Assurance Network (PLAN) Corporation (offering affordable liability, property insurance, claims management, risk management, and bond coverage to 30 municipalities) and financial services (offering tax-exempt capital financing for the acquisition, construction, and rehabilitation of affordable multifamily housing, health care facilities, schools, and other community facilities). ABAG POWER Natural Gas Pool conducts pooled purchasing of natural gas on behalf of 38 local governments and special districts. ABAG is also the COG that allocates the regional housing needs assessment (RHNA). (Source: CALCOG)
Below Market Rate (BMR)
A BMR unit is a housing unit that is priced to be affordable to households that are of moderate income or below. These housing units are often built by local government, nonprofits, or as a requirement of the developer (Inclusionary Affordable Housing Ordinance). As a result, these homes have certain deed restrictions recorded on the property, ensuring the home remains affordable for future generations. (Source: County of San Mateo)
California Department of Finance (DOF)
The California Department of Finance is a state cabinet-level agency within the government of California.

The Department of Finance is responsible for preparing, explaining, and administering the state's annual financial plan, which the Governor of California is required under the California Constitution to present by January 10 of each year to the public. The Department of Finance's other duties include analyzing the budgets of proposed laws in the California State Legislature, creating, and monitoring current and future economic forecasts of the state, estimating population demographics and enrollment projections, and maintaining the state's accounting and financial reporting systems.

California Department of Housing and Community Development (HCD) The California Department of Housing and Community Development (HCD) develops housing policy and building codes (i.e., the California Building Standards Code), regulates manufactured homes and mobile home parks, and administers housing finance, economic development, and community development programs. (Source: https://www.hcd.ca.gov/about-hcd)
2022-2023 San Mateo County Civil Grand Jury 17
Council of Governments (COG)
Councils of Governments (COGs) are voluntary associations representing member local governments, mainly cities, and counties, that seek to provide cooperative planning, coordination, and technical assistance on issues of mutual concern that cross jurisdictional lines. (Source: WRCOG) Deed Restrictions
A deed restriction is a term widely used in real estate to refer to any limitation on a property that limits the ability of the property owner to utilize the property as they wish. (Source: CA Realty Training) General Plan
State law requires every city and county in California to prepare a General Plan for its future growth and development. A General Plan covers land use, transportation, housing, open space, natural resources, and public services. Local General Plans have been mandatory in California since the 1950s. State law also requires the cities and counties to periodically update their General Plans in response to changing conditions. Each General Plan includes maps expressing the community's vision of how and where it will grow and change. The General Plan typically has a time horizon of about 20 years. Once a General Plan is adopted, it is used by the City Council, local commissions, and City Staff as they make day-to-day decisions about the community's future. (Source: City of San Rafael) Housing Element
Since 1969, California has required that all local governments (cities and counties) adequately plan to meet the housing needs of everyone in the community. California's local governments meet this requirement by adopting housing plans as part of their General Plan (also required by the State). General Plans serve as the local government's blueprint for how the city or county will grow and develop and include eight elements: land use, transportation, conservation, noise, open space, safety, environmental justice, and housing. California's Housing Element Law acknowledges that, for the private market to address Californians' housing needs and demand, local governments must adopt plans and regulatory systems that provide opportunities for (and do not unduly constrain) housing development. As a result, housing policy in California rests mainly on the effective implementation of local General Plans and, in particular, local Housing Elements. (Source: California Department of Housing and Community Development)
Jurisdiction (city, town, or county)
1: the power, right, or authority to interpret and apply the law; a matter that falls within the court’s jurisdiction
2: a: the authority of a sovereign power to govern or legislate b: the power or right to exercise authority: CONTROL
3: the limits or territory within which authority may be exercised (Source: Merriam-Webster) Regional Housing Needs Allocation (RHNA)
Every eight years, ABAG develops the Regional Housing Needs Allocation (RHNA) plan approved by HCD and used to assign each city and county in the Bay Area their fair share of new housing units to build. These housing units are intended to accommodate existing needs and projected growth in the region. The RHNA process is critical because it requires all cities and counties to plan for the region's housing needs, regardless of income, to prepare for future growth and ease the California's acute housing crisis. (Source: ABAG)
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Regional Housing Needs Determination (RHND)
The California Department of Housing and Community Development (HCD) identifies the total number of homes each region in California must plan to meet the housing needs of people at all income levels. They base the number on population projections produced by the California Department of Finance and adjustments incorporating the region's current housing needs. The jurisdictions separate the total number of housing units from HCD into four income categories that cover everything from housing for very lowincome households to market-rate housing. ABAG is responsible for developing a methodology to allocate a portion of this housing need to every local government in the Bay Area. (Source: ABAG)

BIBLIOGRAPHY
Government Agencies
● Department of Housing and Urban Development Office of Policy Development and Research. “U.S Accessory Dwelling Units: Case Study”. https://www.huduser.gov/portal/publications/adu.pdf. June 2008
● U.S. Department of Housing and Urban Development. “Glossary of Terms to Affordable Housing”. https://archives.hud.gov/local/nv/goodstories/2006-04-06glos.cfm. August 18, 2011 ● Department of Housing and Community Development Division of Housing Policy. “ADU Law Amendments Memorandum”. https://www.hcd.ca.gov/community-development/housingelement/housing-element-memos/docs/Accessory-Dwelling-Unit-Legislation.pdf. May 29, 2018 ● California Legislative Information. “Assembly Bill No. 68”. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB68. 2019-2020 ● OpenStates. “California Senate Bill SB 13”. https://openStates.org/ca/bills/20192020/SB13/. 2019- 2020
● 21 Elements. “Second Units and Junior Second Units”. http://www.21elements.com/second-units. 2020
● Department of Housing and Community Development Division of Housing Policy. “Local Agency Accessory Dwelling Units, Memorandum”. https://www.hcd.ca.gov/community-development/housingelement/docs/ADU_TA_Memo_Final_01-10-20.pdf. January 10, 2020 ● Department of Housing and Community Development Division of Housing Policy. “Final Regional Housing Need Determination”. https://www.hcd.ca.gov/community-development/housingelement/docs/ABAGRHNA-Final060920(r).pdf. June 9, 2020 ● Association of Bay Area Governments. “Housing Element Law. Changes from 1969 to the Present”. https://abag.ca.gov/sites/default/files/rhna_background.pdf. August 1, 2020 ● California Legislative Information. “Assembly Bill No. 3182”. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB3182. September 28, 2020
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● Southern California Association of Governments. “SCAG Regional Accessory Dwelling Unit Affordability Analysis”. https://scag.ca.gov/sites/main/files/fileattachments/adu_affordability_analysis_120120v2.pdf?1606868527. December 1, 2020 ● Association of Bay Area Governments. “DRAFT Affordability of Accessory Dwelling Units”. http://21elements.com/documents-mainmenu-3/housing-elements/rhna-6-2022-2030/1327-draft-aduaffordability-report-sep-8-2021-1/file. September 8, 2021 ● California Legislative Information. “Assembly Bill No. 345”. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB345. September 28, 2021
● Association of Bay Area Governments. “Using ADUs to Satisfy RHNA”. https://abag.ca.gov/technicalassistance/using-adus-satisfy-rhna. March 10, 2022 ● Auditor of the State of California. “Regional Housing Needs Assessments”. https://www.auditor.ca.gov/pdfs/reports/2021-125.pdf. March 17, 2022 ● California Department of Housing and Community Development. “Accessory Dwelling Unit Handbook”. https://www.hcd.ca.gov/sites/default/files/2022-07/ADUHandbookUpdate.pdf. July 2022 ● Association of Bay Area Governments. “Final Regional Housing Needs Allocation (RHNA) Plan: San Francisco Bay Area, 2023-2031”. https://abag.ca.gov/sites/default/files/documents/2022- 12/Final%20RHNA%20Methodology%20Report%202023-2031_update_11-22.pdf. November 2022 ● State of California Department of Justice. “Attorney General Bonta Puts city of Huntington Beach on Notice That Its Proposed Ordinance Violates State Housing Law”. https://oag.ca.gov/news/pressreleases/attorney-general-bonta-puts-city-huntington-beach-notice-its-proposed-ordinance. February 13, 2023
● Department of Housing and Community Development Division of Housing Policy Development. “RE:

Town of Atherton’s 6th Cycle (2023-2031) Adopted Housing Element”. https://www.dropbox.com/home/Grand%20Jury%202022%20-%202023/Committees/ADUs/ADU%20- %20research%20materials/Housing%20Elements/Pending?preview=Atherton_HCD_Letter40423.pdf.

April 4, 2023

Grand Jury Reports
● San Mateo County Civil Grand Jury. “Second Units: Adding New Housing In The Neighborhood”. https://www.sanmateocourt.org/documents/grand_jury/2019/second_units.pdf. 2019-2020 Independent Agencies
● UC Berkeley. “A Solution on the Ground: Assessing the Feasibility of Second Units in Unincorporated San Mateo County”. https://smcrecovery.org/wp-content/uploads/2021/08/UC-Report-on-ADUfeasability.pdf. January 2017 ● Ramsey-Musolf, Darrel. “Accessory Dwelling Units as Low-Income Housing: California’s Faustian Bargain”. https://www.mdpi.com/2413-8851/2/3/89. September 18, 2018 2022-2023 San Mateo County Civil Grand Jury 20
● AARP. “The ABCs of ADUs”. https://www.hcd.ca.gov/policy-research/docs/adu-guide-websingles.pdf. 2019 ● California YIMBY (Yes in My Back Yard). “AB 881”. https://cayimby.org/ab-881/. October 9, 2019 ● Center of Community Innovation. “The ADU Scorecard: Grading ADU Ordinances in California”. https://www.aducalifornia.org/wp-content/uploads/2020/02/ADU-Scorecard-InterimReport-200201-

1.pdf. February 1, 2020
● UC Berkeley Center for Community Innovation. “Implementing the Backyard Revolution: Perspectives of California’s ADU Owners”. https://www.aducalifornia.org/wpcontent/uploads/2021/04/Implementing-the-Backyard-Revolution.pdf. April 22, 2021 ● Terner Center for Housing Innovation, UC Berkely. “First Ever Statewide ADU Owner Survey Shows Growth, Room for Improvement”. https://ternercenter.berkeley.edu/blog/cci-adu-survey/. April 22, 2021
● University of California, Berkeley. “California ADU”. https://www.aducalifornia.org/. August 16, 2021 ● Colburn, Gregg. Aldern, Clayton. “Homelessness is a Housing Problem”. https://homelessnesshousingproblem.com/. 2021-2022
● Sumner, Scott. “California housing prices and homelessness”. https://www.econlib.org/californiahousing-prices-and-homelessness/. May 23, 2022 ● Williams, Paul. “Carving out a Path for Public Developers”. https://housingchronicle.substack.com/p/carving-out-a-path-for-public-developers. July 14, 2022 ● Terner Center for Housing Innovation, UC Berkeley. “ADUs for All: Breaking Down Barriers to Racial and Economic Equity in Accessory Dwelling Unit Construction”. https://ternercenter.berkeley.edu/research-and-policy/adu-equity-barriers/. August 4, 2022 ● Bertolet, Dan. “Washington Bill Would Boost In-Law Apartments Throughout the State”. https://www.sightline.org/2023/01/21/washington-bill-would-boost-in-law-apartments-throughout-theState/. January 21, 2021 ● Ohanian, Lee. “California’s Failed Soviet-Style Housing Mandates Should End Now”. https://www.hoover.org/research/californias-failed-soviet-style-housing-mandates-should-end-now.

February 7, 2023
● Hamilton, Emily. “Learning from Houston’s Townhouse Reforms”. https://www.mercatus.org/research/policy-briefs/learning-houstons-townhouse-reforms. April 11, 2023 2022-2023 San Mateo County Civil Grand Jury 21

APPENDICES
● A: Survey Results
● B: Timeline of Important Legislative Events
● C: ADUs: An American Tradition
● D: Housing Elements Are an Iterative Process
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APPENDIX A
Survey Results
Who responded to the survey
Survey responses
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APPENDIX B
Timeline of Important Legislative Events

1. 1970 — the Legislature directed HCD to develop guidelines for housing element preparation on one and five year cycles. SB 1489 (Moscone), emphasized housing need, passed in 1971, and ABX 1 of 1971 established more standards. The California Housing Finance Agency (CalHFA), which also assisted communities in providing affordable housing, was created in 1975. The legislation authorized HCD to review local housing elements for conformity to its guidelines.

2. 1976 — Fair-share was added to the guidelines by HCD. The COGs are now given the responsibility by HCD to distribute shares of low-income and moderate-income housing. The local housing element had to include these income requirements — whether or not communities wanted them. HCD also was given responsibility to review local housing elements. Statewide hearings in 1977 brought out a number of positions on housing elements and HCD requirements.

3. Mid 1980’s — AB 2853 (Roos), provided for faster permit processing and higher densities, and allowed the housing element to meet State goals and be reviewed by HCD. COGs would continue to formulate the fair share for each community, but HCD had final approval of the numbers and each community was to revise its Housing Element every five years.

4. 1990s — Cities and counties looked at housing elements, if certified, as providing protection against lawsuits. In addition, this decade also created the concept of regional allocation “sharing burdens of lower- income households among geographic areas,” without mandated goals.

5. 1993 — The Senate Committee on Local Government held hearings on housing element progress and heard concerns that communities were not doing enough and that housing elements were despised by local governments. Bills changed the cycle timeframe, including AB 2172 (Hauser), SB 1703 (Costa) and SC 320 (Committee). Main topics for discussion by the Committee on Housing and Land Use hearings in 1995 were the housing allocations and the Department of Finance (DoF) projections. A common complaint was that the DoF projections were not complete enough for communities to develop appropriate allocations. The COGs projections also were criticized.

6. 1998 — AB 438 (Torlakson), allowing for the creation of sub-RHNA areas, looked at how housing units were counted. 2001 — SB 910 (Dunn) would have included imposing fines on jurisdictions not complying; and would have tied RHNA to transportation planning on a six year cycle. However, this bill did not pass. 2002 — SB 423 (Torlakson) created a jobs and housing balance incentive program, also known as Workforce Housing Incentive Program. In 2003, at HCD’s request, a working group of stakeholders met to make recommendations, which included:
● Develop more transparency in determining fair shares
● Clarify land inventories of building sites
● Ensure inventories were buildable
● Increase HCD review consistency of local elements
● Explore city self-certification
● Devise better housing element enforcement that would penalize non-compliance.

7. 2004 — AB 2348 (Mullin) clarified the relationship between the land inventory and adequate sites requirement, provided guidance on the content of adequate land inventory, and provided greater development certainty. AB 2158 (Lowenthal) revised the process for determining allocation from just 2022-2023 San Mateo County Civil Grand Jury 33
DoF to include transportation planning numbers and created a review process.

8. 2005 — AB 1233 (Jones) assured that unmet need from previous RHNA cycles was added into the next cycle.

9. 2017 Housing Legislative Package
Approximately 150 housing bills were submitted in 2017. Fifteen relating to funding, streamlining and accountability, were signed by the governor. These bills significantly changed how RHNA is conducted, requiring additional outreach and reporting, increasing the number of factors included, and the ability of HCD to sue individual cities for not meeting requirements.

SB 2 (Atkins) Building Homes and Jobs Act is projected to generate hundreds of millions of dollars annually for affordable housing, supportive housing, emergency shelters, transitional housing, and other housing needs via a $75 to $225 recording fee on specified real estate documents.

SB 3 (Beall) Veterans and Affordable Housing Bond Act of 2018 places a $4 billion general obligation bond on the November 2018 ballot to fund affordable housing programs and the veterans homeownership program (CalVet).

SB 35 (Wiener) streamlines multifamily housing project approvals, at the request of a developer, in a city that fails to issue building permits for its share of the regional housing need by income category.

SB 35 city approval of a qualifying housing development on a qualifying site is a ministerial act, without need for CEQA review or public hearings.

AB 73 (Chiu) streamlines the housing approval process by allowing jurisdictions to create a housing sustainability district to complete upfront zoning and environmental review in order to receive incentive payments for development projects that are consistent with the ordinance.

SB 167 (Skinner), AB 678 (Bocanegra), and AB 1515 (Daly) are three measures that were amended late in the 2017 legislative session to incorporate changes to the Housing Accountability Act (HAA).

The HAA significantly limits the ability of a jurisdiction to deny an affordable or market-rate housing project that is consistent with existing planning and zoning requirements.

AB 1505 (Bloom) allows a jurisdiction to adopt an ordinance that requires a housing development to include a certain percentage of rental units affordable to and occupied by households with extremely low, very low, low or moderate income.

AB 879 (Grayson) expands upon existing law that requires, by April 1 of each year, general law cities and charter cities to send an annual report to their respective city councils, the State Office of Planning and Research (OPR) and HCD that includes information related to implementation of the General Plan.

AB 1397 (Low) makes numerous changes to how a jurisdiction establishes its housing element site inventory.

AB 72 (Santiago) provides HCD broad new authority to find a jurisdiction’s housing element out of substantial compliance if it determines that REGIONAL the jurisdiction fails to act in compliance with 2022-2023 San Mateo County Civil Grand Jury 34
its housing element and allows HCD to refer violations of law to the attorney general.

10. 2018 — SB 828 (Wiener) changed the way HCD determines each region’s RHND, adding a number of new factors for consideration and accounting for “unmet need” in the existing housing stock by applying “adjustment factors” to a region’s total projected households, not just the incremental housing growth.

11. 2018 — AB 1771 (Bloom) and AB 686 (Santiago) strengthened the mandate for regions and local governments to combat discrimination, overcome historic patterns of segregation, and create equal access to opportunity through housing planning and decision-making, in other words, to “affirmatively further fair housing.” AB 1771 (Bloom) added to RHNA an enhanced focus on racial equity with an explicit mandate that COGs’ housing distribution plans affirmatively further fair housing and required COGs to survey jurisdictions on their fair housing activities, to identify regional barriers to furthering fair housing, and to recommend strategies or actions to overcome those barriers. AB 686 (Santiago) created a mandate that local jurisdictions plan and administer housing and community development programs and activities in a manner that affirmatively further fair housing.

12. 2019 — AB 1486 (Ting) strengthened the Surplus Lands Act (SLA), which requires that local agencies provide right of first refusal to affordable housing developers when disposing of surplus land by expanding the scope of land subject to the right of first refusal requirement, updating the mechanics of the surplus land disposal process, extending HCD’s enforcement mandate to include the SLA and establishing financial penalties for violation of the act.

AB 1487 (Chiu), authorized ABAG and MTC to place on the ballot regional housing measures to help fund affordable housing and established 3 REGIONAL HOUSING NEEDS ALLOCATION the Bay Area Regional Housing Authority. The 2019-20 State Budget also included significant new resources to support housing planning, including $250 million for local governments and COGs for planning activities. The Bay Area is receiving approximately $50 million in combined funds, split between ABAG and local jurisdictions.

SB 330 (Skinner) made further revisions to the HAA, establishing new criteria for housing approvals at the local level, including prohibiting a local agency from subjecting a project to new ordinances, rules or fees after an application is submitted and limiting the number of hearings on a project to five. The bill also prohibits a local agency from lowering the allowed residential density below that level in effect on January 1, 2018 in high rent, low-vacancy areas, as defined. The bill’s provisions sunset in five years.

AB-881, “Accessory dwelling units,” and AB-68, “Land use: accessory dwelling units”: Makes many of the current restrictions that cities place on ADUs obsolete. It also provides for a streamlined process for approvals.

These bills require permits for ADUs added to single-family and multifamily homes to be approved or denied faster. Current law permits these decisions to take 120 days, but this new law requires decisions within 60 days. These approvals or denials must be issued ministerially, so that way, there are fewer potential issues to encounter. Cities and counties may establish minimum and maximum ADU size requirements, but the maximum size cannot be less than 850 square feet for a one-bedroom ADU or 1,000 square feet for more than one bedroom.
2022-2023 San Mateo County Civil Grand Jury 35
Most importantly, these bills prohibit any lot coverage, minimum lot size, etc. requirements that municipalities have. Cities have enacted these laws to have the effect of making it impossible to build an ADU. Cities cannot require the correction of nonconforming zoning conditions as part of the approval process.

SB-13 Accessory dwelling units are similar to AB-881 and AB-68 with a couple of significant differences. Before this bill, local agencies could require that the person applying for the ADU occupy either the primary residence or the proposed new structure. This bill exempts from these requirements all proposed ADUs until Jan. 1, 2025. Additionally, this bill removes the impact fee for ADUs smaller than 750 square feet. Even for ADUs larger than that, the impact fees assessed must correlate with the square footage of the primary residence.

SB-13 makes building ADUs cheaper and also removes an essential regulation. Now, landlords who rent their properties out can apply for an ADU for their rental properties.

AB-670, “Common interest developments: accessory dwelling units,” makes it easier for people within HOA complexes to construct ADUs. Specifically, it prevents banning or unreasonably restricting on single-family lots on the construction of these units. Presently, many HOAs have CCRs ("conditions, covenants and restrictions") that prevent people from building ADUs. HOAs may worry about the uniformity of the properties if one has an ADU on it, or they might be concerned that they don't know who is and who isn't renting from an ADU. Regardless, HOAs now need to have a way for people to construct ADUs if they so choose.

HOAs will likely challenge this bill, at least to some degree, in court, but for now, if you live in an HOA complex with single-family homes, you can construct an ADU.

AB-671, “Accessory dwelling units: incentives," requires that general plans incentivize homeowners in some way to construct these ADUs and make them available for low-to-moderate-income households to rent. While it doesn't specify what these incentives will be, it does require local agencies to think about financial incentives and construct a plan.
2022-2023 San Mateo County Civil Grand Jury 36

APPENDIX C
ADUs: An American Tradition
2022-2023 San Mateo County Civil Grand Jury 37

APPENDIX D
Housing Elements Are an Iterative Process
______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Howard Young, Public Works Director / Interim Town Manager DATE: August 9, 2023
RE: Master Agreements and Program Supplemental Agreements for Federal Aid related to Transportation Projects

RECOMMENDATION
Adopt a resolution authorizing the Town Manager to enter into Master Agreements with the California Department of Transportation for Federal-Aid Projects, including any supplementals required.

BACKGROUND
From time to time, the Town is eligible to receive Federal and State funding for various transportation projects from the California Department of Transportation (Caltrans). To receive these funds, an agreement between the Town and Caltrans is required to establish the terms and conditions under which the Town will receive funds. In September 2009, the Town Council adopted a resolution authorizing the Town Manager to enter into Master Agreements with Caltrans for Federal-Aid Projects. However, since that time, they have added supplemental requirements. This action will update the prior resolution and add to include any future supplementals and amendments required by the program for the Town to be eligible and receive the funding. Caltrans requires a copy of the resolution authorizing this for all future projects.

DISCUSSION
As part of the administrative process for receiving funding, the Town is required to execute and submit various agreements and reports as requested by the federal government (administered by Caltrans) relating to compliance with federal guidelines and procedures of the program. These standard template documents are distributed to all participating municipalities. The Master Agreement Administering Agency-State Agreement for Federal Aid Projects sets forth administrative procedures that include project administration, audits, records retention, fair employment practices, nondiscrimination assurances, and other

TOWN OF PORTOLA VALLEY

STAFF REPORT

Master Agreements for Federal Aid Projects Town Council 7/9/23

Page 2 ends

miscellaneous provisions. These documents cannot be modified. Typically, municipalities authorize the Mayor or Town Manager to sign these types of administrative documents on behalf of the Town. In an effort to continue timely processing of documents requested by the State or Federal Government, staff recommends that the Town Manager be authorized to execute these Master Agreements and supplements. All documents will be reviewed by the Town Attorney and staff. Attached as example, is the Master Agreement (Attachment 2) and Program Supplemental Agreement (Attachment 3) for the current budgeted fiscal year 2023/2024 Annual Street Resurfacing project that is receiving Federal Aid. The 2009 Resolution allowed the Master Agreement to be signed by the Town Manager but not the Program Supplemental Agreement.

FISCAL IMPACT
Allows the Town to be eligible for Federal and State funding and reimbursement for various transportation projects including portions of the budgeted 2023/2024 Annual Street Resurfacing Project.

ATTACHMENTS

1. Resolution

2. Master Agreement example

3. Supplemental Agreement example
RESOLUTION NO. ___ -2023

A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF PORTOLA

VALLEY AUTHORIZING THE TOWN MANAGER TO ENTER INTO MASTER

AGREEMENTS, PROGRAM SUPPLEMENTAL AGREEMENTS, AND ANY

AMENDMENTS WITH THE CALIFORNIA DEPARTMENT OF TRANSPORTATION

FOR FEDERAL AID PROJECTS
WHEREAS, the Town of Portola Valley is eligible to receive Federal and/or State funding for certain Transportation Projects, through the California Department of Transportation and
WHEREAS, Master Agreements and Program Supplemental Agreements need to be executed with the California Department of Transportation before such funds could be claimed and
WHEREAS, the Town of Portola Valley wishes to delegate authorization to execute these agreements and any amendments thereto to the Town Manager and WHEREAS, the Town Council of the Town of Portola Valley has read and considered the staff report from the Public Works Director
NOW, THREFORE BE IT RESOLVED that the Town Manager be authorized to execute all Master Agreements, Program Supplemental Agreements and any amendments thereto with the California Department of Transportation.

PASSED AND ADOPTED this 9th day of August 2023.

By:

Mayor Jeff Aalfs
ATTEST:

Town Clerk

MASTER AGREEMENT

ADMINISTERING AGENCY-STATE AGREEMENT FOR

FEDERAL-AID PROJECTS
04 Town of Portola Valley
-------- ---------------------------------------------- District Administering Agency
Agreement No. 04-5390F15
This AGREEMENT, is entered into effective this _______ day of ____________, 20 , by and between Town of Portola Valley, hereinafter referred to as "ADMINISTERING AGENCY," and the State of California, acting by and through its Department of Transportation (Caltrans), hereinafter referred to as "STATE", and together referred to as "PARTIES" or individually as a "PARTY."
RECITALS:

1. WHEREAS, the Congress of the United States has enacted the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 and subsequent Transportation Authorization Bills to fund transportation programs; and

2. WHEREAS, the Legislature of the State of California has enacted legislation by which certain federal-aid funds may be made available for use on local transportation related projects of public entities qualified to act as recipients of these federal-aid funds in accordance with the intent of federal law; and

3. WHEREAS, before federal funds will be made available for a specific program project, ADMINISTERING AGENCY and STATE are required to enter into an agreement to establish terms and conditions applicable to the ADMINISTERING AGENCY when receiving federal funds for a designated PROJECT facility and to the subsequent operation and maintenance of that completed facility.

NOW, THEREFORE, the PARTIES agree as follows:

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Attachment 1

ARTICLE I - PROJECT ADMINISTRATION

1. This AGREEMENT shall have no force or effect with respect to any program project unless and until a project-specific "Authorization/Agreement Summary", herein referred to as "E-76" document, is approved by STATE and the Federal Highway Administration (FHWA).

2. The term "PROJECT", as used herein, means that authorized transportation related project and related activities financed in part with federal-aid funds as more fully-described in an "Authorization/ Agreement Summary" or "Amendment/Modification Summary", herein referred to as "E-76" or "E-76 (AMOD)" document authorized by STATE and the Federal Highway Administration (FHWA).

3. The E-76/E-76 (AMOD) shall designate the party responsible for implementing PROJECT, type of work and location of PROJECT.

4. The PROGRAM SUPPLEMENT sets out special covenants as a condition for the ADMINISTERING AGENCY to receive federal-aid funds from/through STATE for designated PROJECT. The PROGRAM SUPPLEMENT shall also show these federal funds that have been initially encumbered for PROJECT along with the matching funds to be provided by ADMINISTERING AGENCY and/or others. Execution of PROGRAM SUPPLEMENT by the PARTIES shall cause ADMINISTERING AGENCY to adopt all of the terms of this AGREEMENT as though fully set forth therein in the PROGRAM SUPPLEMENT. Unless otherwise expressly delegated in a resolution by the governing body of ADMINISTERING AGENCY, and with written concurrence by STATE, the PROGRAM SUPPLEMENT shall be approved and managed by the governing body of ADMINISTERING AGENCY.

5. ADMINISTERING AGENCY agrees to execute and return each project-specific PROGRAM SUPPLEMENT within ninety (90) days of receipt. The PARTIES agree that STATE may suspend future authorizations/obligations and invoice payments for any on-going or future federal-aid project performed by ADMINISTERING AGENCY if any project-specific PROGRAM SUPPLEMENT is not returned within that ninety (90) day period unless otherwise agreed by STATE in writing.

6. ADMINISTERING AGENCY further agrees, as a condition to the release and payment of federal funds encumbered for the PROJECT described in each PROGRAM SUPPLEMENT, to comply with the terms and conditions of this AGREEMENT and all of the agreed-upon Special Covenants or Remarks incorporated within the PROGRAM SUPPLEMENT, and Cooperative/Contribution Agreement where appropriate, defining and identifying the nature of the specific PROJECT.

7. Federal, state and matching funds will not participate in PROJECT work performed in advance of the approval of the E-76 or E-76 (AMOD), unless otherwise stated in the executed project- specific PROGRAM SUPPLEMENT. ADMINISTERING AGENCY agrees that it will only proceed with the work authorized for that specific phase(s) on the project-specific E-76 or E-76 (AMOD). ADMINISTERING AGENCY further agrees to not proceed with future phases of PROJECT prior to receiving an E-76 (AMOD) from STATE for that phase(s) unless no further federal funds are needed or for those future phase(s).

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8. That PROJECT or portions thereof, must be included in a federally approved Federal Statewide Transportation Improvement Program (FSTIP) prior to ADMINISTERING AGENCY submitting the "Request for Authorization".

9. ADMINISTERING AGENCY shall conform to all state statutes, regulations and procedures (including those set forth in the Local Assistance Procedures Manual and the Local Assistance Program Guidelines, hereafter collectively referred to as "LOCAL ASSISTANCE PROCEDURES") relating to the federal-aid program, all Title 23 Code of Federal Regulation (CFR) and 2 CFR part 200 federal requirements, and all applicable federal laws, regulations, and policy and procedural or instructional memoranda, unless otherwise specifically waived as designated in the executed project-specific PROGRAM SUPPLEMENT.

10. If PROJECT is not on STATE-owned right of way, PROJECT shall be constructed in accordance with LOCAL ASSISTANCE PROCEDURES that describes minimum statewide design standards for local agency streets and roads. LOCAL ASSISTANCE PROCEDURES for projects off the National Highway System (NHS) allow STATE to accept either the STATE's minimum statewide design standards or the approved geometric design standards of ADMINISTERING AGENCY. Additionally, for projects off the NHS, STATE will accept ADMINISTERING AGENCY- approved standard specifications, standard plans, materials sampling and testing quality assurance programs that meet the conditions described in the then current LOCAL ASSISTANCE PROCEDURES.

11. If PROJECT involves work within or partially within STATE-owned right-of-way, that PROJECT shall also be subject to compliance with the policies, procedures and standards of the STATE Project Development Procedures Manual and Highway Design Manual and, where appropriate, an executed Cooperative Agreement between STATE and ADMINISTERING AGENCY that outlines the PROJECT responsibilities and respective obligations of the PARTIES. ADMINISTERING AGENCY and its contractors shall each obtain an encroachment permit through STATE prior to commencing any work within STATE rights of way or work which affects STATE facilities.

12. When PROJECT is not on the State Highway System but includes work to be performed by a railroad, the contract for such work shall be prepared by ADMINISTERING AGENCY or by STATE, as the PARTIES may hereafter agree. In either event, ADMINISTERING AGENCY shall enter into an agreement with the railroad providing for future maintenance of protective devices or other facilities installed under the contract.

13. If PROJECT is using STATE funds, the Department of General Services, Division of the State Architect, or its designee, shall review the contract PS'&'E for the construction of buildings, structures, sidewalks, curbs and related facilities for accessibility and usability.

ADMINISTERING AGENCY shall not award a PROJECT construction contract for these types of improvements until the State Architect has issued written approval stating that the PROJECT plans and specifications comply with the provisions of sections 4450 and 4454 of the California Government Code, if

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applicable. Further requirements and guidance are provided in Title 24 of the California Code of Regulations.

14. ADMINISTERING AGENCY will advertise, award and administer PROJECT in accordance with the current LOCAL ASSISTANCE PROCEDURES unless otherwise stated in the executed project-specific PROGRAM SUPPLEMENT.

15. ADMINISTERING AGENCY shall provide or arrange for adequate supervision and inspection of each PROJECT. While consultants may perform supervision and inspection work for PROJECT with a fully qualified and licensed engineer, ADMINISTERING AGENCY shall provide a full-time employee to be in responsible charge of each PROJECT who is not a consultant.

16. ADMINISTERING AGENCY shall submit PROJECT-specific contract award documents to STATE's District Local Assistance Engineer within sixty (60) days after contract award. A copy of the award documents shall also be included with the submittal of the first invoice for a construction contract by ADMINISTERING AGENCY.

17. ADMINISTERING AGENCY shall submit the final report documents that collectively constitute a "Report of Expenditures" within one hundred eighty (180) days of PROJECT completion. Failure by ADMINISTERING AGENCY to submit a "Report of Expenditures" within one hundred eighty (180) days of project completion will result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance with the current LOCAL ASSISTANCE PROCEDURES.

18. ADMINISTERING AGENCY shall comply with: (i) section 504 of the Rehabilitation Act of 1973 which prohibits discrimination on the basis of disability in federally assisted programs; (ii) the Americans with Disabilities Act (ADA) of 1990 which prohibits discrimination on the basis of disability irrespective of funding; and (iii) all applicable regulations and guidelines issued pursuant to both the Rehabilitation Act and the ADA.

19. The Congress of the United States, the Legislature of the State of California and the Governor of the State of California, each within their respective jurisdictions, have prescribed certain nondiscrimination requirements with respect to contract and other work financed with public funds. ADMINISTERING AGENCY agrees to comply with the requirements of the FAIR EMPLOYMENT PRACTICES ADDENDUM (Exhibit A attached hereto) and the NONDISCRIMINATION ASSURANCES (Exhibit B attached hereto). ADMINISTERING AGENCY further agrees that any agreement entered into by ADMINISTERING AGENCY with a third party for performance of PROJECT-related work shall incorporate Exhibits A and B (with third party's name replacing ADMINISTERING AGENCY) as essential parts of such agreement to be enforced by that third party as verified by ADMINISTERING AGENCY.

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ARTICLE II - RIGHTS OF WAY

1. No contract for the construction of a federal-aid PROJECT shall be awarded until all necessary rights of way have been secured. Prior to the advertising for construction of PROJECT, ADMINISTERING AGENCY shall certify and, upon request, shall furnish STATE with evidence that all necessary rights of way are available for construction purposes or will be available by the time of award of the construction contract.

2. ADMINISTERING AGENCY agrees to indemnify and hold STATE harmless from any liability that may result in the event the right of way for a PROJECT, including, but not limited to, being clear as certified or if said right of way is found to contain hazardous materials requiring treatment or removal to remediate in accordance with Federal and State laws. The furnishing of right of way as provided for herein includes, in addition to all real property required for the PROJECT, title free and clear of obstructions and encumbrances affecting PROJECT and the payment, as required by applicable law, of relocation costs and damages to remainder real property not actually taken but injuriously affected by PROJECT. ADMINISTERING AGENCY shall pay, from its own non- matching funds, any costs which arise out of delays to the construction of PROJECT because utility facilities have not been timely removed or relocated, or because rights of way were not available to ADMINISTERING AGENCY for the orderly prosecution of PROJECT work.

3. Subject to STATE approval and such supervision as is required by LOCAL ASSISTANCE PROCEDURES over ADMINISTERING AGENCY's right of way acquisition procedures, ADMINISTERING AGENCY may claim reimbursement from federal funds for expenditures incurred in purchasing only the necessary rights of way needed for the PROJECT after crediting PROJECT with the fair market value of any excess property retained and not disposed of by ADMINISTERING AGENCY.

4. When real property rights are to be acquired by ADMINISTERING AGENCY for a PROJECT, said ADMINISTERING AGENCY must carry out that acquisition in compliance with all applicable State and Federal laws and regulations, in accordance with State procedures as published in State's current LOCAL ASSISTANCE PROCEDURES and STATE's Right-of-Way Manual, subject to STATE oversight to ensure that the completed work is acceptable under the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended.

5. Whether or not federal-aid is to be requested for right of way, should ADMINISTERING AGENCY, in acquiring right of way for PROJECT, displace an individual, family, business, farm operation, or non-profit organization, relocation payments and services will be provided as set forth in 49 CFR, Part 24. The public will be adequately informed of the relocation payments and services which will be available, and, to the greatest extent practicable, no person lawfully occupying real property shall be required to move from his/her dwelling or to move his/her

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business or farm operation without at least ninety (90) days written notice from ADMINISTERING AGENCY. ADMINISTERING AGENCY will provide STATE with specific assurances, on each portion of the PROJECT, that no person will be displaced until comparable decent, safe and sanitary replacement housing is available within a reasonable period of time prior to displacement, and that ADMINISTERING AGENCY's relocation program is realistic and adequate to provide orderly, timely and efficient relocation of PROJECT-displaced persons as provided in 49 CFR, Part 24.

6. ADMINISTERING AGENCY shall, along with recording the deed or instrument evidencing title in the name of the ADMINISTERING AGENCY or their assignee, also record an Agreement Declaring Restrictive Covenants (ADRC) as a separate document incorporating the assurances included within Exhibits A and B and Appendices A, B, C and D of this AGREEMENT, as appropriate.

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ARTICLE III - MAINTENANCE AND MANAGEMENT

1. ADMINISTERING AGENCY will maintain and operate the property acquired, developed, constructed, rehabilitated, or restored by PROJECT for its intended public use until such time as the parties might amend this AGREEMENT to otherwise provide. With the approval of STATE, ADMINISTERING AGENCY or its successors in interest in the PROJECT property may transfer this obligation and responsibility to maintain and operate PROJECT property for that intended public purpose to another public entity.

2. Upon ADMINISTERING AGENCY's acceptance of the completed federal-aid construction contract or upon contractor being relieved of the responsibility for maintaining and protecting PROJECT, ADMINISTERING AGENCY will be responsible for the maintenance, ownership, liability, and the expense thereof, for PROJECT in a manner satisfactory to the authorized representatives of STATE and FHWA and if PROJECT falls within the jurisdictional limits of another Agency or Agencies, it is the duty of ADMINISTERING AGENCY to facilitate a separate maintenance agreement(s) between itself and the other jurisdictional Agency or Agencies providing for the operation, maintenance, ownership and liability of PROJECT. Until those agreements are executed, ADMINISTERING AGENCY will be responsible for all PROJECT operations, maintenance, ownership and liability in a manner satisfactory to the authorized representatives of STATE and FHWA. If, within ninety (90) days after receipt of notice from STATE that a PROJECT, or any portion thereof, is not being properly operated and maintained and ADMINISTERING AGENCY has not satisfactorily remedied the conditions complained of, the approval of future federal-aid projects of ADMINISTERING AGENCY will be withheld until the PROJECT shall have been put in a condition of operation and maintenance satisfactory to STATE and FHWA. The provisions of this section shall not apply to a PROJECT that has been vacated through due process of law with STATE's concurrence.

3. PROJECT and its facilities shall be maintained by an adequate and well-trained staff of engineers and/or such other professionals and technicians as PROJECT reasonably requires.

Said operations and maintenance staff may be employees of ADMINISTERING AGENCY, another unit of government, or a contractor under agreement with ADMINISTERING AGENCY.

All maintenance will be performed at regular intervals or as required for efficient operation of the complete PROJECT improvements.

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ARTICLE IV - FISCAL PROVISIONS

1. All contractual obligations of STATE are subject to the appropriation of resources by the Legislature and the allocation of resources by the California Transportation Commission (CTC).

2. STATE'S financial commitment of federal funds will occur only upon the execution of this AGREEMENT, the authorization of the project-specific E-76 or E-76 (AMOD), the execution of each project-specific PROGRAM SUPPLEMENT, and STATE's approved finance letter.

3. ADMINISTERING AGENCY may submit signed invoices in arrears for reimbursement of participating PROJECT costs on a regular basis once the project-specific PROGRAM SUPPLEMENT has been executed by STATE.

4. ADMINISTERING AGENCY agrees, at a minimum, to submit invoices at least once every six (6) months commencing after the funds are encumbered on either the project-specific PROGRAM SUPPLEMENT or through a project-specific finance letter approved by STATE.

STATE reserves the right to suspend future authorizations/obligations, and invoice payments for any on-going or future federal-aid project by ADMINISTERING AGENCY if PROJECT costs have not been invoiced by ADMINISTERING AGENCY for a six (6) month period.

5. Invoices shall be submitted on ADMINISTERING AGENCY letterhead that includes the address of ADMINISTERING AGENCY and shall be formatted in accordance with LOCAL ASSISTANCE PROCEDURES.

6. ADMINISTERING AGENCY must have at least one copy of supporting backup documentation for costs incurred and claimed for reimbursement by ADMINISTERING AGENCY. ADMINISTERING AGENCY agrees to submit supporting backup documentation with invoices if requested by State. Acceptable backup documentation includes, but is not limited to, agency's progress payment to the contractors, copies of cancelled checks showing amounts made payable to vendors and contractors, and/or a computerized summary of PROJECT costs.

7. Payments to ADMINISTERING AGENCY can only be released by STATE as reimbursement of actual allowable PROJECT costs already incurred and paid for by ADMINISTERING AGENCY.

8. Indirect Cost Allocation Plans/Indirect Cost Rate Proposals (ICAP/ICRP), Central Service Cost Allocation Plans and related documentation are to be prepared and provided to STATE (Caltrans Audits '&' Investigations) for review and approval prior to ADMINISTERING AGENCY seeking reimbursement of indirect costs incurred within each fiscal year being claimed for State and federal reimbursement. ICAPs/ICRPs must be prepared in accordance with the requirements set forth in 2 CFR, Part 200, Chapter 5 of the Local Assistance Procedural Manual, and the ICAP/ICRP approval procedures established by STATE.

9. Once PROJECT has been awarded, STATE reserves the right to de-obligate any excess federal funds from the construction phase of PROJECT if the contract award amount is less than the obligated amount, as shown on the PROJECT E-76 or E-76

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(AMOD).

10. STATE will withhold the greater of either two (2) percent of the total of all federal funds encumbered for each PROGRAM SUPPLEMENT or $40,000 until ADMINISTERING AGENCY submits the Final Report of Expenditures for each completed PROGRAM SUPPLEMENT PROJECT.

11. The estimated total cost of PROJECT, the amount of federal funds obligated, and the required matching funds may be adjusted by mutual consent of the PARTIES hereto with a finance letter, a detailed estimate, if required, and approved E-76 (AMOD). Federal-aid funding may be increased to cover PROJECT cost increases only if such funds are available and FHWA concurs with that increase.

12. When additional federal-aid funds are not available, ADMINISTERING AGENCY agrees that the payment of federal funds will be limited to the amounts authorized on the PROJECT specific E-76 / E-76 (AMOD) and agrees that any increases in PROJECT costs must be defrayed with ADMINISTERING AGENCY's own funds.

13. ADMINISTERING AGENCY shall use its own non-federal funds to finance the local share of eligible costs and all expenditures or contract items ruled ineligible for financing with federal funds. STATE shall make the determination of ADMINISTERING AGENCY's cost eligibility for federal fund financing of PROJECT costs.

14. ADMINISTERING AGENCY will reimburse STATE for STATE's share of costs for work performed by STATE at the request of ADMINISTERING AGENCY. STATE's costs shall include overhead assessments in accordance with section 8755.1 of the State Administrative Manual.

15. Federal and state funds allocated from the State Transportation Improvement Program (STIP) are subject to the timely use of funds provisions enacted by Senate Bill 45, approved in 1997, and subsequent STIP Guidelines and State procedures approved by the CTC and STATE.

16. Federal funds encumbered for PROJECT are available for liquidation for a period of six (6) years from the beginning of the State fiscal year the funds were appropriated in the State Budget. State funds encumbered for PROJECT are available for liquidation only for six (6) years from the beginning of the State fiscal year the funds were appropriated in the State Budget.

Federal or state funds not liquidated within these periods will be reverted unless a Cooperative Work Agreement (CWA) is submitted by ADMINISTERING AGENCY and approved by the California Department of Finance (per Government Code section 16304). The exact date of fund reversion will be reflected in the STATE signed finance letter for PROJECT.

17. Payments to ADMINISTERING AGENCY for PROJECT-related travel and subsistence (per diem) expenses of ADMINISTERING AGENCY forces and its contractors and subcontractors claimed for reimbursement or as local match credit shall not exceed rates authorized to be paid rank and file STATE employees under current State Department of Personnel Administration (DPA) rules. If the rates invoiced by ADMINISTERING AGENCY are in excess of DPA rates,

ADMINISTERING

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AGENCY is responsible for the cost difference, and any overpayments inadvertently paid by STATE shall be reimbursed to STATE by ADMINISTERING AGENCY on demand within thirty (30) days of such invoice.

18. ADMINISTERING AGENCY agrees to comply with 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirement for Federal Awards.

19. ADMINISTERING AGENCY agrees, and will ensure that its contractors and subcontractors will be obligated to agree, that Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual PROJECT cost items.

20. Every sub-recipient receiving PROJECT funds under this AGREEMENT shall comply with 2 CFR, Part 200, 23 CFR, 48 CFR Chapter 1, Part 31, Local Assistance Procedures, Public Contract Code (PCC) 10300-10334 (procurement of goods), PCC 10335-10381 (non-A'&'E services), and other applicable STATE and FEDERAL regulations.

21. Any PROJECT costs for which ADMINISTERING AGENCY has received payment or credit that are determined by subsequent audit to be unallowable under 2 CFR, Part 200, 23 CFR, 48 CFR, Chapter 1, Part 31, and other applicable STATE and FEDERAL regulations, are subject to repayment by ADMINISTERING AGENCY to STATE.

22. Should ADMINISTERING AGENCY fail to refund any moneys due upon written demand by STATE as provided hereunder or should ADMINISTERING AGENCY breach this AGREEMENT by failing to complete PROJECT without adequate justification and approval by STATE, then, within thirty 30 days of demand, or within such other period as may be agreed to in writing between the PARTIES, STATE, acting through the State Controller, the State Treasurer, or any other public entity or agency, may withhold or demand a transfer of an amount equal to the amount paid by or owed to STATE from future apportionments, or any other funds due ADMINISTERING AGENCY from the Highway Users Tax Fund or any other sources of funds, and/or may withhold approval of future ADMINISTERING AGENCY federal-aid projects.

23. Should ADMINISTERING AGENCY be declared to be in breach of this AGREEMENT or otherwise in default thereof by STATE, and if ADMINISTERING AGENCY is constituted as a joint powers authority, special district, or any other public entity not directly receiving funds through the State Controller, STATE is authorized to obtain reimbursement from whatever sources of funding are available, including the withholding or transfer of funds, pursuant to Article IV - 22, from those constituent entities comprising a joint powers authority or by bringing of an action against ADMINISTERING AGENCY or its constituent member entities, to recover all funds provided by STATE hereunder.

24. ADMINISTERING AGENCY acknowledges that the signatory party represents the ADMINISTERING AGENCY and further warrants that there is nothing within a Joint Powers Agreement, by which ADMINISTERING AGENCY was created, if any exists, that would restrict or otherwise limit STATE's ability to recover State funds improperly spent by ADMINISTERING AGENCY in contravention of the terms of this AGREEMENT

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ARTICLE V

AUDITS, THIRD PARTY CONTRACTING, RECORDS RETENTION AND REPORTS

1. STATE reserves the right to conduct technical and financial audits of PROJECT work and records and ADMINISTERING AGENCY agrees, and shall require its contractors and subcontractors to agree, to cooperate with STATE by making all appropriate and relevant PROJECT records available for audit and copying as required by paragraph three (3) of ARTICLE V.

2. ADMINISTERING AGENCY, its contractors and subcontractors shall establish and maintain a financial management system and records that properly accumulate and segregate reasonable, allowable, and allocable incurred PROJECT costs and matching funds by line item for the PROJECT. The financial management system of ADMINISTERING AGENCY, its contractors and all subcontractors shall conform to Generally Accepted Accounting Principles, enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices sent to or paid by STATE.

3. ADMINISTERING AGENCY, ADMINISTERING AGENCY's contractors and subcontractors, and STATE shall each maintain and make available for inspection and audit by STATE, the California State Auditor, or any duly authorized representative of STATE or the United States all books, documents, papers, accounting records, and other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts and ADMINISTERING AGENCY shall furnish copies thereof if requested. All of the above referenced parties shall make such AGREEMENT, PROGRAM SUPPLEMENT and contract materials available at their respective offices at all reasonable times during the entire PROJECT period and for three (3) years from the date of submission of the final expenditure report by the STATE to the FHWA.

4. ADMINISTERING AGENCY is required to have an audit in accordance with the Single Audit Act of 2 CFR 200 if it expends $750,000 or more in Federal Funds in a single fiscal year. The Federal Funds received under a PROGRAM SUPPLEMENT are a part of the Catalogue of Federal Domestic Assistance (CFDA) 20.205.

5. ADMINISTERING AGENCY agrees to include all PROGRAM SUPPLEMENTS adopting the terms of this AGREEMENT in the schedule of projects to be examined in ADMINISTERING AGENCY's annual audit and in the schedule of projects to be examined under its single audit prepared in accordance with 2 CFR, Part 200.

6. ADMINISTERING AGENCY shall not award a non-A'&'E contract over $5,000, construction contract over $10,000, or other contracts over $25,000 (excluding professional service contracts of the type which are required to be procured in accordance with Government Code sections 4525 (d), (e) and (f)) on the basis of a noncompetitive negotiation for work to be performed under this AGREEMENT without the prior written approval of STATE. Contracts awarded by ADMINISTERING AGENCY, if intended as local match credit, must meet the requirements set forth in this AGREEMENT regarding local match funds.

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7. Any subcontract entered into by ADMINISTERING AGENCY as a result of this AGREEMENT shall contain provisions 5, 6, 17, 19 and 20 of ARTICLE IV, FISCAL PROVISIONS, and provisions 1, 2, and 3 of this ARTICLE V, AUDITS, THIRD-PARTY CONTRACTING RECORDS RETENTION AND REPORTS.

8. To be eligible for local match credit, ADMINISTERING AGENCY must ensure that local match funds used for a PROJECT meet the fiscal provisions requirements outlined in ARTICLE IV in the same manner as required of all other PROJECT expenditures.

9. In addition to the above, the pre-award requirements of third-party contractor/consultants with ADMINISTERING AGENCY should be consistent with the LOCAL ASSISTANCE PROCEDURES.

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ARTICLE VI - FEDERAL LOBBYING ACTIVITIES CERTIFICATION

1. By execution of this AGREEMENT, ADMINISTERING AGENCY certifies, to the best of the signatory officer's knowledge and belief, that:

A. No federal or state appropriated funds have been paid or will be paid, by or on behalf of ADMINISTERING AGENCY, to any person for influencing or attempting to influence an officer or employee of any STATE or federal agency, a member of the State Legislature or United States Congress, an officer or employee of the Legislature or Congress, or any employee of a Member of the Legislature or Congress in connection with the awarding of any STATE or federal contract, including this AGREEMENT, the making of any STATE or federal loan, the entering into of any cooperative contract, and the extension, continuation, renewal, amendment, or modification of any STATE or federal contract, grant, loan, or cooperative contract.

B. If any funds other than federal appropriated funds have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any federal agency, a member of Congress, an officer or employee of Congress or an employee of a member of Congress in connection with this AGREEMENT, grant, local, or cooperative contract, ADMINISTERING AGENCY shall complete and submit Standard Form-LLL, "Disclosure Form to Rep Lobbying," in accordance with the form instructions.

C. This certification is a material representation of fact upon which reliance was placed when this AGREEMENT and each PROGRAM SUPPLEMENT was or will be made or entered into.

Submission of this certification is a prerequisite for making or entering into this AGREEMENT imposed by Section 1352, Title 31, United States Code. Any party who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

2. ADMINISTERING AGENCY also agrees by signing this AGREEMENT that the language of this certification will be included in all lower tier sub-agreements which exceed $100,000 and that all such sub-recipients shall certify and disclose accordingly.

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ARTICLE VII - MISCELLANEOUS PROVISIONS

1. ADMINISTERING AGENCY agrees to use all state funds reimbursed hereunder only for transportation purposes that are in conformance with Article XIX of the California State Constitution and the relevant Federal Regulations.

2. This AGREEMENT is subject to any additional restrictions, limitations, conditions, or any statute enacted by the State Legislature or adopted by the CTC that may affect the provisions, terms, or funding of this AGREEMENT in any manner.

3. ADMINISTERING AGENCY and the officers and employees of ADMINISTERING AGENCY, when engaged in the performance of this AGREEMENT, shall act in an independent capacity and not as officers, employees or agents of STATE or the federal government.

4. Each project-specific E-76 or E-76 (AMOD), PROGRAM SUPPLEMENT and Finance Letter shall separately establish the terms and funding limits for each described PROJECT funded under the AGREEMENT. No federal or state funds are obligated against this AGREEMENT.

5. ADMINISTERING AGENCY certifies that neither ADMINISTERING AGENCY nor its principals are suspended or debarred at the time of the execution of this AGREEMENT.

ADMINISTERING AGENCY agrees that it will notify STATE immediately in the event a suspension or a debarment occurs after the execution of this AGREEMENT.

6. ADMINISTERING AGENCY warrants, by execution of this AGREEMENT, that no person or selling agency has been employed or retained to solicit or secure this AGREEMENT upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by ADMINISTERING AGENCY for the purpose of securing business. For breach or violation of this warranty, STATE has the right to annul this AGREEMENT without liability, pay only for the value of the work actually performed, or in STATE's discretion, to deduct from the price of consideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or contingent fee.

7. In accordance with Public Contract Code section 10296, ADMINISTERING AGENCY hereby certifies under penalty of perjury that no more than one final unappealable finding of contempt of court by a federal court has been issued against ADMINISTERING AGENCY within the immediate preceding two (2) year period because of ADMINISTERING AGENCY's failure to comply with an order of a federal court that orders ADMINISTERING AGENCY to comply with an order of the National Labor Relations Board.

8. ADMINISTERING AGENCY shall disclose any financial, business, or other relationship with STATE, FHWA or Federal Transit Administration (FTA) that may have an impact upon the outcome of this AGREEMENT. ADMINISTERING AGENCY shall also list current contractors who may have a financial interest in the outcome of this AGREEMENT.

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9. ADMINISTERING AGENCY hereby certifies that it does not have nor shall it acquire any financial or business interest that would conflict with the performance of PROJECT under this AGREEMENT.

10. ADMINISTERING AGENCY warrants that this AGREEMENT was not obtained or secured through rebates, kickbacks or other unlawful consideration either promised or paid to any STATE employee. For breach or violation of this warranty, STATE shall have the right, in its discretion, to terminate this AGREEMENT without liability, to pay only for the work actually performed, or to deduct from the PROGRAM SUPPLEMENT price or otherwise recover the full amount of such rebate, kickback, or other unlawful consideration.

11. Any dispute concerning a question of fact arising under this AGREEMENT that is not disposed of by agreement shall be decided by the STATE's Contract Officer who may consider any written or verbal evidence submitted by ADMINISTERING AGENCY. The decision of the Contract Officer, issued in writing, shall be conclusive and binding on the PARTIES on all questions of fact considered and determined by the Contract Officer.

12. Neither the pending of a dispute nor its consideration by the Contract Officer will excuse ADMINISTERING AGENCY from full and timely performance in accordance with the terms of this AGREEMENT.

13. Neither ADMINISTERING AGENCY nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by STATE, under or in connection with any work, authority or jurisdiction arising under this AGREEMENT. It is understood and agreed that STATE shall fully defend, indemnify and save harmless the ADMINISTERING AGENCY and all of its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation and other theories or assertions of liability occurring by reason of anything done or omitted to be done by STATE under this AGREEMENT.

14. Neither STATE nor any officer or employee thereof shall be responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by ADMINISTERING AGENCY under, or in connection with, any work, authority or jurisdiction arising under this AGREEMENT. It is understood and agreed that ADMINISTERING AGENCY shall fully defend, indemnify and save harmless STATE and all of its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to be done by ADMINISTERING AGENCY under this AGREEMENT.

15. STATE reserves the right to terminate funding for any PROJECT upon written notice to ADMINISTERING AGENCY in the event that ADMINISTERING AGENCY fails to proceed with PROJECT work in accordance with the project-specific PROGRAM SUPPLEMENT, the bonding requirements if applicable, or otherwise violates the conditions of this AGREEMENT and/or PROGRAM SUPPLEMENT, or the funding

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allocation such that substantial performance is significantly endangered.

16. No termination shall become effective if, within thirty (30) days after receipt of a Notice of Termination, ADMINISTERING AGENCY either cures the default involved or, if not reasonably susceptible of cure within said thirty (30) day period, ADMINISTERING AGENCY proceeds thereafter to complete the cure in a manner and time line acceptable to STATE. Any such termination shall be accomplished by delivery to ADMINISTERING AGENCY of a Notice of Termination, which notice shall become effective not less than thirty (30) days after receipt, specifying the reason for the termination, the extent to which funding of work under this AGREEMENT is terminated and the date upon which such termination becomes effective, if beyond thirty (30) days after receipt. During the period before the effective termination date, ADMINISTERING AGENCY and STATE shall meet to attempt to resolve any dispute. In the event of such termination, STATE may proceed with the PROJECT work in a manner deemed proper by STATE. If STATE terminates funding for PROJECT with ADMINISTERING AGENCY, STATE shall pay ADMINISTERING AGENCY the sum due ADMINISTERING AGENCY under the PROGRAM SUPPLEMENT and/or STATE approved finance letter prior to termination, provided, however, ADMINISTERING AGENCY is not in default of the terms and conditions of this AGREEMENT or the project-specific PROGRAM SUPPLEMENT and that the cost of PROJECT completion to STATE shall first be deducted from any sum due ADMINISTERING AGENCY.

17. In case of inconsistency or conflicts with the terms of this AGREEMENT and that of a project- specific PROGRAM SUPPLEMENT, the terms stated in that PROGRAM SUPPLEMENT shall prevail over those in this AGREEMENT.

18. Without the written consent of STATE, this AGREEMENT is not assignable by ADMINISTERING AGENCY either in whole or in part.

19. No alteration or variation of the terms of this AGREEMENT shall be valid unless made in writing and signed by the PARTIES, and no oral understanding or agreement not incorporated herein shall be binding on any of the PARTIES.

IN WITNESS WHEREOF, the PARTIES have executed this AGREEMENT by their duly authorized officers.

STATE OF CALIFORNIA
DEPARTMENT OF TRANSPORTATION Town of Portola Valley
By______________________________
________________________________
Chief, Office of Project Implementation
Division of Local Assistance
Date __________________________
By________________________________
_________________________________
_________________________________
Town of Portola Valley
Representative Name '&' Title
(Authorized Governing Body Representative)
Date _____________________________

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EXHIBIT A

FAIR EMPLOYMENT PRACTICES ADDENDUM

1. In the performance of this Agreement, ADMINISTERING AGENCY will not discriminate against any employee for employment because of race, color, sex, sexual orientation, religion, ancestry or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave, pregnancy leave, or disability leave. ADMINISTERING AGENCY will take affirmative action to ensure that employees are treated during employment without regard to their race, sex, sexual orientation, color, religion, ancestry, or national origin, physical disability, medical condition, marital status, political affiliation, family and medical care leave, pregnancy leave, or disability leave. Such action shall include, but not be limited to, the following: employment; upgrading; demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. ADMINISTERING AGENCY shall post in conspicuous places, available to employees for employment, notices to be provided by STATE setting forth the provisions of this Fair Employment section.

2. ADMINISTERING AGENCY, its contractor(s) and all subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 1290-0 et seq.), and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900(a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this AGREEMENT by reference and made a part hereof as if set forth in full. Each of the ADMINISTERING AGENCY'S contractors and all subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreements, as appropriate.

3. ADMINISTERING AGENCY shall include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts to perform work under this AGREEMENT.

4. ADMINISTERING AGENCY will permit access to the records of employment, employment advertisements, application forms, and other pertinent data and records by STATE, the State Fair Employment and Housing Commission, or any other agency of the State of California designated by STATE, for the purposes of investigation to ascertain compliance with the Fair Employment section of this Agreement.

5. Remedies for Willful Violation:
(a) STATE may determine a willful violation of the Fair Employment provision to have occurred upon receipt of a final judgment to that effect from a court in an action to which ADMINISTERING AGENCY was a party, or upon receipt of a written

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notice from the Fair Employment and Housing Commission that it has investigated and determined that ADMINISTERING AGENCY has violated the Fair Employment Practices Act and had issued an order under Labor Code Section 1426 which has become final or has obtained an injunction under Labor Code Section 1429.
(b) For willful violation of this Fair Employment Provision, STATE shall have the right to terminate this Agreement either in whole or in part, and any loss or damage sustained by STATE in securing the goods or services thereunder shall be borne and paid for by ADMINISTERING AGENCY and by the surety under the performance bond, if any, and STATE may deduct from any moneys due or thereafter may become due to ADMINISTERING AGENCY, the difference between the price named in the Agreement and the actual cost thereof to STATE to cure ADMINISTERING AGENCY's breach of this Agreement.

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EXHIBIT B

NONDISCRIMINATION ASSURANCES
ADMINISTERING AGENCY HEREBY AGREES THAT, as a condition to receiving any federal financial assistance from the STATE, acting for the U.S. Department of Transportation, it will comply with Title VI of the Civil Rights Act of 1964, 78 Stat. 252, 42 U.S.C. 2000d-42 U.S.C. 2000d-4 (hereinafter referred to as the ACT), and all requirements imposed by or pursuant to Title
49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, "Nondiscrimination in Federally-Assisted Programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964" (hereinafter referred to as the REGULATIONS), the Federal-aid Highway Act of 1973, and other pertinent directives, to the end that in accordance with the ACT, REGULATIONS, and other pertinent directives, no person in the United States shall, on the grounds of race, color, sex, national origin, religion, age or disability, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity for which ADMINISTERING AGENCY receives federal financial assistance from the Federal Department of Transportation. ADMINISTERING AGENCY HEREBY GIVES ASSURANCE THAT ADMINISTERING AGENCY will promptly take any measures necessary to effectuate this agreement. This assurance is required by subsection

21.7(a) (1) of the REGULATIONS.

More specifically, and without limiting the above general assurance, ADMINISTERING AGENCY hereby gives the following specific assurances with respect to its federal-aid Program:

1. That ADMINISTERING AGENCY agrees that each "program" and each "facility" as defined in subsections 21.23 (e) and 21.23 (b) of the REGULATIONS, will be (with regard to a "program") conducted, or will be (with regard to a "facility") operated in compliance with all requirements imposed by, or pursuant to, the REGULATIONS.

2. That ADMINISTERING AGENCY shall insert the following notification in all solicitations for bids for work or material subject to the REGULATIONS made in connection with the federal-aid Program and, in adapted form, in all proposals for negotiated agreements:

ADMINISTERING AGENCY hereby notifies all bidders that it will affirmatively ensure that in any agreement entered into pursuant to this advertisement, disadvantaged business enterprises will be afforded full opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, sex, national origin, religion, age, or disability in consideration for an award.

3. That ADMINISTERING AGENCY shall insert the clauses of Appendix A of this assurance in every agreement subject to the ACT and the REGULATIONS.

4. That the clauses of Appendix B of this Assurance shall be included as a covenant

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running with the land, in any deed effecting a transfer of real property, structures, or improvements thereon, or interest therein.

5. That where ADMINISTERING AGENCY receives federal financial assistance to construct a facility, or part of a facility, the Assurance shall extend to the entire facility and facilities operated in connection therewith.

6. That where ADMINISTERING AGENCY receives federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, the Assurance shall extend to rights to space on, over, or under such property.

7. That ADMINISTERING AGENCY shall include the appropriate clauses set forth in Appendix C and D of this Assurance, as a covenant running with the land, in any future deeds, leases, permits, licenses, and similar agreements entered into by the ADMINISTERING AGENCY with other parties:

Appendix C;
(a) for the subsequent transfer of real property acquired or improved under the federal-aid Program ; and
Appendix D;
(b) for the construction or use of or access to space on, over, or under real property acquired, or improved under the federal-aid Program.

8. That this assurance obligates ADMINISTERING AGENCY for the period during which federal financial assistance is extended to the program, except where the federal financial assistance is to provide, or is in the form of, personal property or real property or interest therein, or structures, or improvements thereon, in which case the assurance obligates ADMINISTERING AGENCY or any transferee for the longer of the following periods:
(a) the period during which the property is used for a purpose for which the federal financial assistance is extended, or for another purpose involving the provision of similar services or benefits; or
(b) the period during which ADMINISTERING AGENCY retains ownership or possession of the property.

9. That ADMINISTERING AGENCY shall provide for such methods of administration for the program as are found by the U.S. Secretary of Transportation, or the official to whom he delegates specific authority, to give reasonable guarantee that ADMINISTERING AGENCY, other recipients, sub-grantees, applicants, sub-applicants, transferees, successors in interest, and other participants of federal financial assistance under such program will comply with all requirements imposed by, or pursuant to, the ACT, the REGULATIONS, this Assurance and the Agreement.

10. That ADMINISTERING AGENCY agrees that the United States and the State of California have a right to seek judicial enforcement with regard to any matter

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arising under the ACT, the REGULATIONS, and this Assurance.

11. ADMINISTERING AGENCY shall not discriminate on the basis of race, religion, age, disability, color, national origin or sex in the award and performance of any STATE assisted contract or in the administration on its DBE Program or the requirements of 49 CFR Part 26.

ADMINISTERING AGENCY shall take all necessary and reasonable steps under 49 CFR Part 26 to ensure non-discrimination in the award and administration of STATE assisted contracts.

ADMINISTERING AGENCY'S DBE Implementation Agreement is incorporated by reference in this AGREEMENT. Implementation of this program is a legal obligation and failure to carry out its terms shall be treated as a violation of this agreement. Upon notification to the recipient of its failure to carry out its approved DBE Implementation Agreement, STATE may impose sanctions as provided for under 49 CFR Part 26 and may, in appropriate cases, refer the matter for enforcement under 18 USC 1001 and/or the Program Fraud Civil Remedies Act of 1985 (31USC 3801 et seq.)
THESE ASSURANCES are given in consideration of and for the purpose of obtaining any and all federal grants, loans, agreements, property, discounts or other federal financial assistance extended after the date hereof to ADMINISTERING AGENCY by STATE, acting for the U.S.

Department of Transportation, and is binding on ADMINISTERING AGENCY, other recipients, subgrantees, applicants, sub-applicants, transferees, successors in interest and other participants in the federal-aid Highway Program.

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APPENDIX A TO EXHIBIT B
During the performance of this Agreement, ADMINISTERING AGENCY, for itself, its assignees and successors in interest (hereinafter collectively referred to as ADMINISTERING AGENCY) agrees as follows:
(1) Compliance with Regulations: ADMINISTERING AGENCY shall comply with the regulations relative to nondiscrimination in federally assisted programs of the Department of Transportation, Title 49, Code of Federal Regulations, Part 21, as they may be amended from time to time, (hereinafter referred to as the REGULATIONS), which are herein incorporated by reference and made a part of this agreement.
(2) Nondiscrimination: ADMINISTERING AGENCY, with regard to the work performed by it during the AGREEMENT, shall not discriminate on the grounds of race, color, sex, national origin, religion, age, or disability in the selection and retention of sub-applicants, including procurements of materials and leases of equipment. ADMINISTERING AGENCY shall not participate either directly or indirectly in the discrimination prohibited by Section 21.5 of the REGULATIONS, including employment practices when the agreement covers a program set forth in Appendix B of the REGULATIONS.
(3) Solicitations for Sub-agreements, Including Procurements of Materials and Equipment: In all solicitations either by competitive bidding or negotiation made by ADMINISTERING AGENCY for work to be performed under a Sub-agreement, including procurements of materials or leases of equipment, each potential sub-applicant or supplier shall be notified by ADMINISTERING AGENCY of the ADMINISTERING AGENCY's obligations under this Agreement and the REGULATIONS relative to nondiscrimination on the grounds of race, color, or national origin. (4) Information and Reports: ADMINISTERING AGENCY shall provide all information and reports required by the REGULATIONS, or directives issued pursuant thereto, and shall permit access to ADMINISTERING AGENCY's books, records, accounts, other sources of information, and its facilities as may be determined by STATE or FHWA to be pertinent to ascertain compliance with such REGULATIONS or directives. Where any information required of ADMINISTERING AGENCY is in the exclusive possession of another who fails or refuses to furnish this information, ADMINISTERING AGENCY shall so certify to STATE or the FHWA as appropriate, and shall set forth what efforts ADMINISTERING AGENCY has made to obtain the information.
(5) Sanctions for Noncompliance: In the event of ADMINISTERING AGENCY's noncompliance with the nondiscrimination provisions of this agreement, STATE shall impose such agreement sanctions as it or the FHWA may determine to be appropriate, including, but not limited to:
(a) withholding of payments to ADMINISTERING AGENCY under the Agreement

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within a reasonable period of time, not to exceed 90 days; and/or (b) cancellation, termination or suspension of the Agreement, in whole or in part. (6) Incorporation of Provisions: ADMINISTERING AGENCY shall include the provisions of paragraphs (1) through (6) in every sub-agreement, including procurements of materials and leases of equipment, unless exempt by the REGULATIONS, or directives issued pursuant thereto. ADMINISTERING AGENCY shall take such action with respect to any sub-agreement or procurement as STATE or FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance, provided, however, that, in the event ADMINISTERING AGENCY becomes involved in, or is threatened with, litigation with a sub-applicant or supplier as a result of such direction, ADMINISTERING AGENCY may request STATE enter into such litigation to protect the interests of STATE, and, in addition, ADMINISTERING AGENCY may request the United States to enter into such litigation to protect the interests of the United States.

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APPENDIX B TO EXHIBIT B
The following clauses shall be included in any and all deeds effecting or recording the transfer of PROJECT real property, structures or improvements thereon, or interest therein from the United States.
(GRANTING CLAUSE)
NOW, THEREFORE, the U.S. Department of Transportation, as authorized by law, and upon the condition that ADMINISTERING AGENCY will accept title to the lands and maintain the project constructed thereon, in accordance with Title 23, United States Code, the Regulations for the Administration of federal-aid for Highways and the policies and procedures prescribed by the Federal Highway Administration of the Department of Transportation and, also in accordance with and in compliance with the Regulations pertaining to and effectuating the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252; 42 U.S.C. 2000d to 2000d-4), does hereby remise, release, quitclaim and convey unto the ADMINISTERING AGENCY all the right, title, and interest of the U.S. Department of Transportation in, and to, said lands described in Exhibit "A" attached hereto and made a part hereof.
(HABENDUM CLAUSE)
TO HAVE AND TO HOLD said lands and interests therein unto ADMINISTERING AGENCY and its successors forever, subject, however, to the covenant, conditions, restrictions and reservations herein contained as follows, which will remain in effect for the period during which the real property or structures are used for a purpose for which federal financial assistance is extended or for another purpose involving the provision of similar services or benefits and shall be binding on ADMINISTERING AGENCY, its successors and assigns.

ADMINISTERING AGENCY, in consideration of the conveyance of said lands and interests in lands, does hereby covenant and agree as a covenant running with the land for itself, its successors and assigns,
(1) that no person shall on the grounds of race, color, sex, national origin, religion, age or disability, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination with regard to any facility located wholly or in part on, over, or under such lands hereby conveyed (;) (and) *
(2) that ADMINISTERING AGENCY shall use the lands and interests in lands so conveyed, in compliance with all requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in federally-assisted programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended (;) and (3) that in the event of breach of any of the above-mentioned nondiscrimination conditions, the U.S. Department of Transportation shall have a right to re-enter said lands and facilities on said land, and the above-described land and facilities shall thereon revert to and vest in and become the absolute property of the U.S. Department of Transportation and its assigns as such interest existed prior to this deed.*
* Reverter clause and related language to be used only when it is determined that such a clause is necessary in order to effectuate the purposes of Title VI of the Civil

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Rights Act of 1964.

APPENDIX C TO EXHIBIT B
The following clauses shall be included in any and all deeds, licenses, leases, permits, or similar instruments entered into by ADMINISTERING AGENCY, pursuant to the provisions of Assurance 7(a) of Exhibit B.

The grantee (licensee, lessee, permittee, etc., as appropriate) for himself, his heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree (in the case of deeds and leases add "as covenant running with the land") that in the event facilities are constructed, maintained, or otherwise operated on the said property described in this (deed, license, lease, permit, etc.) for a purpose for which a U.S. Department of Transportation program or activity is extended or for another purpose involving the provision of similar services or benefits, the (grantee, licensee, lessee, permittee, etc.), shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, U.S.

Department of Transportation, Subtitle A, Office of Secretary, Part 21, Nondiscrimination in federally-assisted programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended.
(Include in licenses, leases, permits, etc.)*
That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to terminate the (license, lease, permit etc.) and to re-enter and repossess said land and the facilities thereon, and hold the same as if said (license, lease, permit, etc.) had never been made or issued. (Include in deeds)*
That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to re-enter said land and facilities thereon, and the above- described lands and facilities shall thereupon revert to and vest in and become the absolute property of ADMINISTERING AGENCY and its assigns.
* Reverter clause and related language to be used only when it is determined that such a clause is necessary in order to effectuate the purposes of Title VI of the Civil Rights Act of 1964.

APPENDIX D TO EXHIBIT B

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The following shall be included in all deeds, licenses, leases, permits, or similar agreements entered into by the ADMINISTERING AGENCY, pursuant to the provisions of Assurance 7 (b) of Exhibit B.

The grantee (licensee, lessee, permittee, etc., as appropriate) for himself, his personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree (in the case of deeds, and leases add "as a covenant running with the land") that:
(1) no person on the ground of race, color, sex, national origin, religion, age or disability, shall be excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in the use of said facilities;
(2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the ground of race, color, sex, national origin, religion, age or disability shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; and
(3) that the (grantee, licensee, lessee, permittee, etc.,) shall use the premises in compliance with the Regulations.
(Include in licenses, leases, permits, etc.)*
That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to terminate the (license, lease, permit, etc.) and to re-enter and repossess said land and the facilities thereon, and hold the same as if said (license, lease, permit, etc.) had never been made or issued.
(Include in deeds)*
That in the event of breach of any of the above nondiscrimination covenants, ADMINISTERING AGENCY shall have the right to re-enter said land and facilities thereon, and the abovedescribed lands and facilities shall thereupon revert to and vest in and become the absolute property of ADMINISTERING AGENCY, and its assigns.
__________________________________________
* Reverter clause and related language to be used only when it is determined that such a clause is necessary in order to effectuate the purposes of Title VI of the Civil Rights Act of 1964.

Page 26 of 26 ends

F009
FOR FEDERAL-AID PROJECTS NO 04-5390F15
0423000011
January 25, 2023
04-SM-0-PTLV
STPL-5390(006)
5390
This Program Supplement hereby adopts and incorporates the Administering Agency-State Agreement for Federal Aid which was entered into between the Administering Agency and the State on and is subject to all the terms and conditions thereof. This Program Supplement is executed in accordance with Article I of the aforementioned Master Agreement under authority of Resolution No. approved by the Administering Agency on (See copy attached).

The Administering Agency further stipulates that as a condition to the payment by the State of any funds derived from sources noted below obligated to this PROJECT, the Administering Agency accepts and will comply with the special covenants or remarks set forth on the following pages.

Westbridge Dr from Alpine Road to Cervantes Road
Pavement preservation 0.0(MILES)
Estimated Cost Federal Funds Matching Funds
Y230 $201,000.00

TOWN OF PORTOLA VALLEY
By ________________________________ By ________________________________ Title _______________________________
Date _______________________________
Attest _______________________________ Date _______________________________ Division of Local Assistance
I hereby certify upon my personal knowledge that budgeted funds are available for this encumbrance:

Accounting Officer _______________________ Date _______________ PROGRAM SUPPLEMENT NO.
to

ADMINISTERING AGENCY-STATE AGREEMENT
Adv. Project ID Date:

Location:

Project Number:

E.A. Number:

Locode:

PROJECT LOCATION:

TYPE OF WORK: LENGTH:

LOCAL OTHER
$849,578.62 $648,578.62 $0.00
Chief, Office of Project Implementation

STATE OF CALIFORNIA
Department of Transportation
$201,000.00
Program Supplement 04-5390F15-F009- ISTEA 1Page of 7
01/26/2023
Attachment 2

SPECIAL COVENANTS OR REMARKS
04-SM-0-PTLV
STPL-5390(006)

1. A. The ADMINISTERING AGENCY will advertise, award and administer this project in accordance with the current published Local Assistance Procedures Manual.

B. ADMINISTERING AGENCY agrees that it will only proceed with work authorized for specific phase(s) with an "Authorization to Proceed" and will not proceed with future phase(s) of this project prior to receiving an "Authorization to Proceed" from the STATE for that phase(s) unless no further State or Federal funds are needed for those future phase(s).

C. STATE and ADMINISTERING AGENCY agree that any additional funds which might be made available by future Federal obligations will be encumbered on this PROJECT by use of a STATE-approved "Authorization to Proceed" and Finance Letter. ADMINISTERING AGENCY agrees that Federal funds available for reimbursement will be limited to the amounts obligated by the Federal Highway Administration.

D. Award information shall be submitted by the ADMINISTERING AGENCY to the District Local Assistance Engineer within 60 days of project contract award and prior to the submittal of the ADMINISTERING AGENCY'S first invoice for the construction contract.

Failure to do so will cause a delay in the State processing invoices for the construction phase.

Attention is directed to Section 15.7 "Award Package" of the Local Assistance Procedures Manual.

E. ADMINISTERING AGENCY agrees, as a minimum, to submit invoices at least once every six months commencing after the funds are encumbered for each phase by the execution of this Project Program Supplement Agreement, or by STATE's approval of an applicable Finance Letter. STATE reserves the right to suspend future authorizations/obligations for Federal aid projects, or encumbrances for State funded projects, as well as to suspend invoice payments for any on-going or future project by ADMINISTERING AGENCY if PROJECT costs have not been invoiced by ADMINISTERING AGENCY for a six-month period.

If no costs have been invoiced for a six-month period, ADMINISTERING AGENCY agrees to submit for each phase a written explanation of the absence of PROJECT activity along with target billing date and target billing amount.

ADMINISTERING AGENCY agrees to submit the final report documents that collectively constitute a "Report of Expenditures" within one hundred eighty (180) days of PROJECT completion. Failure of ADMINISTERING AGENCY to submit a "Final Report of Expenditures" within 180 days of PROJECT completion will result in STATE imposing sanctions upon ADMINISTERING AGENCY in accordance with the current Local Assistance Procedures Manual.

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F. Administering Agency shall not discriminate on the basis of race, religion, age, disability, color, national origin, or sex in the award and performance of any Federal-assisted contract or in the administration of its DBE Program Implementation Agreement. The Administering Agency shall take all necessary and reasonable steps under 49 CFR Part 26 to ensure nondiscrimination in the award and administration of Federal-assisted contracts. The Administering Agency's DBE Implementation Agreement is incorporated by reference in this Agreement. Implementation of the DBE Implementation Agreement, including but not limited to timely reporting of DBE commitments and utilization, is a legal obligation and failure to carry out its terms shall be treated as a violation of this Agreement. Upon notification to the Administering Agency of its failure to carry out its DBE Implementation Agreement, the State may impose sanctions as provided for under 49 CFR Part 26 and may, in appropriate cases, refer the matter for enforcement under 18 U.S.C. 1001 and/or the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.).

G. Any State and Federal funds that may have been encumbered for this project are available for disbursement for limited periods of time. For each fund encumbrance the limited period is from the start of the fiscal year that the specific fund was appropriated within the State Budget Act to the applicable fund Reversion Date shown on the State approved project finance letter. Per Government Code Section 16304, all project funds not liquidated within these periods will revert unless an executed Cooperative Work Agreement extending these dates is requested by the ADMINISTERING AGENCY and approved by the California Department of Finance.

ADMINISTERING AGENCY should ensure that invoices are submitted to the District Local Assistance Engineer at least 75 days prior to the applicable fund Reversion Date to avoid the lapse of applicable funds. Pursuant to a directive from the State Controller's Office and the Department of Finance; in order for payment to be made, the last date the District Local Assistance Engineer can forward an invoice for payment to the Department's Local Programs Accounting Office for reimbursable work for funds that are going to revert at the end of a particular fiscal year is May 15th of the particular fiscal year. Notwithstanding the unliquidated sums of project specific State and Federal funding remaining and available to fund project work, any invoice for reimbursement involving applicable funds that is not received by the Department's Local Programs Accounting Office at least 45 days prior to the applicable fixed fund Reversion Date will not be paid. These unexpended funds will be irrevocably reverted by the Department's Division of Accounting on the applicable fund Reversion Date.

H. As a condition for receiving federal-aid highway funds for the PROJECT, the Administering Agency certifies that NO members of the elected board, council, or other key decision makers are on the Federal Government Exclusion List. Exclusions can be found at www.sam.gov.

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2. A. ADMINISTERING AGENCY shall conform to all State statutes, regulations and procedures (including those set forth in the Local Assistance Procedures Manual and the Local Assistance Program Guidelines, hereafter collectively referred to as "LOCAL ASSISTANCE PROCEDURES") relating to the federal-aid program, all Title 23 Code of Federal Regulation (CFR) and 2 CFR Part 200 federal requirements, and all applicable federal laws, regulations, and policy and procedural or instructional memoranda, unless otherwise specifically waived as designated in the executed project-specific PROGRAM SUPPLEMENT.

B. Invoices shall be formatted in accordance with LOCAL ASSISTANCE PROCEDURES.

C. ADMINISTERING AGENCY must have at least one copy of supporting backup documentation for costs incurred and claimed for reimbursement by ADMINISTERING AGENCY. ADMINISTERING AGENCY agrees to submit supporting backup documentation with invoices if requested by State. Acceptable backup documentation includes, but is not limited to, agency's progress payment to the contractors, copies of cancelled checks showing amounts made payable to vendors and contractors, and/or a computerized summary of PROJECT costs.

D. Indirect Cost Allocation Plan/Indirect Cost Rate Proposals (ICAP/ICRP), Central Service Cost Allocation Plans and related documentation are to be prepared and provided to STATE (Caltrans Audits & Investigations) for review and approval prior to ADMINISTERING AGENCY seeking reimbursement of indirect costs incurred within each fiscal year being claimed for State and federal reimbursement. ICAPs/ICRPs must be prepared in accordance with the requirements set forth in 2 CFR, Part 200, Chapter 5 of the Local Assistance Procedural Manual, and the ICAP/ICRP approval procedures established by STATE.

E. STATE will withhold the greater of either two (2) percent of the total of all federal funds encumbered for each PROGRAM SUPPLEMENT or $40,000 until ADMINISTERING AGENCY submits the Final Report of Expenditures for each completed PROGRAM SUPPLEMENT PROJECT.

F. Payments to ADMINISTERING AGENCY for PROJECT-related travel and subsistence (per diem) expenses of ADMINISTERING AGENCY forces and its contractors and subcontractors claimed for reimbursement or as local match credit shall not exceed rates authorized to be paid rank and file STATE employees under current State Department of Personnel Administration (DPA) rules. If the rates invoiced by ADMINISTERING AGENCY are in excess of DPA rates, ADMINISTERING AGENCY is responsible for the cost difference, and any overpayments inadvertently paid by STATE shall be reimbursed to STATE by ADMINISTERING AGENCY on demand within thirty (30) days of such invoice.

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G. ADMINISTERING AGENCY agrees to comply with 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirement for Federal Awards.

H. ADMINISTERING AGENCY agrees, and will assure that its contractors and subcontractors will be obligated to agree, that Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual PROJECT cost items.

I. Every sub-recipient receiving PROJECT funds under this AGREEMENT shall comply with 2 CFR, Part 200, 23 CFR, 48 CFR Chapter 1, Part 31, Local Assistance Procedures, Public Contract Code (PCC) 10300-10334 (procurement of goods), PCC 10335-10381 (non-A&E services), and other applicable STATE and FEDERAL regulations.

J. Any PROJECT costs for which ADMINISTERING AGENCY has received payment or credit that are determined by subsequent audit to be unallowable under 2 CFR, Part 200, 23 CFR, 48 CFR, Chapter 1, Part 31, and other applicable STATE and FEDERAL regulations, are subject to repayment by ADMINISTERING AGENCY to STATE.

K. STATE reserves the right to conduct technical and financial audits of PROJECT WORK and records and ADMINISTERING AGENCY agrees, and shall require its contractors and subcontractors to agree, to cooperate with STATE by making all appropriate and relevant PROJECT records available for audit and copying as required by the following paragraph:

ADMINISTERING AGENCY, ADMINISTERING AGENCY'S contractors and subcontractors, and STATE shall each maintain and make available for inspection and audit by STATE, the California State Auditor, or any duly authorized representative of STATE or the United States all books, documents, papers, accounting records, and other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts and ADMINISTERING AGENCY shall furnish copies thereof if requested.

All of the above referenced parties shall make such AGREEMENT, PROGRAM SUPPLEMENT, and contract materials available at their respective offices at all reasonable times during the entire PROJECT period and for three (3) years from the date of submission of the final expenditure report by the STATE to the FHWA.

L. ADMINISTERING AGENCY, its contractors and subcontractors shall establish and maintain a financial management system and records that properly accumulate and segregate reasonable, allowable, and allocable incurred PROJECT costs and matching funds by line item for the PROJECT. The financial management system
Program Supplement 04-5390F15-F009- ISTEA Page 5 of 7

SPECIAL COVENANTS OR REMARKS
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of ADMINISTERING AGENCY, its contractors and all subcontractors shall conform to Generally Accepted Accounting Principles, enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices set to or paid by STATE.

M. ADMINISTERING AGENCY is required to have an audit in accordance with the Single Audit Act of 2 CFR 200 if it expends $750,000 or more in Federal Funds in a single fiscal year of the Catalogue of Federal Domestic Assistance.

N. ADMINISTERING AGENCY agrees to include all PROGRAM SUPPLEMENTS adopting the terms of this AGREEMENT in the schedule of projects to be examined in ADMINISTERING AGENCY's annual audit and in the schedule of projects to be examined under its single audit prepared in accordance with 2 CFR, Part 200.

O. ADMINISTERING AGENCY shall not award a non-A&E contract over $5,000, construction contracts over $10,000, or other contracts over $25,000 [excluding professional service contracts of the type which are required to be procured in accordance with Government Code sections 4525 (d), (e) and (f)] on the basis of a noncompetitive negotiation for work to be performed under this AGREEMENT without the prior written approval of STATE. Contracts awarded by ADMINISTERING AGENCY, if intended as local match credit, must meet the requirements set forth in this AGREEMENT regarding local match funds.

P. Any subcontract entered into by ADMINISTERING AGENCY as a result of this AGREEMENT shall contain provisions B, C, F, H, I, K, and L under Section 2 of this agreement.

3. Appendix E of the Title VI Assurances (US DOT Order 1050.2A) During the performance of this agreement, the ADMINISTERING AGENCY, ADMINISTERING AGENCY'S contractors and subcontractor, (hereinafter referred to as the "contractor") agrees to comply with the following nondiscrimination statutes and authorities; including but not limited to:

Pertinent Nondiscrimination Authorities:

A. Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); and 49 CFR Part 21.

B. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); C. Federal-Aid Highway Act of 1973, (23 U.S.C. 324 et seq.), (prohibits discrimination on the basis of sex);
D. Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794 et seq.), as Program Supplement 04-5390F15-F009- ISTEA Page 6 of 7

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amended, (prohibits discrimination on the basis of disability); and 49 CFR Part 27; E. The Age Discrimination Act of 1975, as amended, (42 U.S.C. 6101 et seq.), (prohibits discrimination on the basis of age);
F. Airport and Airway Improvement Act of 1982, (49 U.S.C. 4 71, Section 4 7123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex); G. The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms "programs or
activities" to include all of the programs or activities of the Federal-aid recipients, subrecipients and contractors, whether such programs or activities are Federally funded or not);
H. Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. 12131-12189) as implemented by Department of Transportation regulations at 49 C.F.R. parts 37 and 38; I. The Federal Aviation Administration's Nondiscrimination statute (49 U.S.C. 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); J. Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations; K. Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100);
L. Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).

Program Supplement 04-5390F15-F009- ISTEA Page 7 of 7
_______________________________________________________________________ TO: Mayor and Town Council
FROM: Laura C. Russell, Planning & Building Director
Adrienne Smith, Senior Planner

DATE: August 9, 2023
RE: Update on Housing Element Status and Next Steps

RECOMMENDATION
Staff recommends that Town Council receive a presentation on Housing Element status from staff, receive public comment, provide any direction, and approve additional consultant funds for continued Housing Element work.

BACKGROUND
Town Housing Element Adoption and Submission to HCD
At its March 29, 2023 meeting the Town Council adopted the Housing and Safety Elements Initial Study/Mitigated Negative Declaration (IS/MND) and Mitigation Monitoring and Reporting Program (MMRP) via Resolution 2922-2023.

On May 10, 2023 Town Council adopted the draft Housing Element and conforming General Plan amendments via Resolution 2926-2023. To avoid application of the Builder’s Remedy, Council also adopted a resolution certifying that its Housing Element complies with all aspects of Housing Element law. This “self-certification” process has not been legally tested and was included as a potential legal argument to use in the event the Town receives a Builder’s Remedy project prior to HCD Housing Element certification. To date, the Town has not received a Builder’s Remedy application.

Town staff submitted the Adopted Housing Element - For HCD Review to HCD on May 25, 2023. State law permits HCD to take up to 60 days for the second and subsequent housing element reviews. After the 60-day review period, on July 25, 2023 the Town received the second HCD comment letter (Attachment 1).

TOWN OF PORTOLA VALLEY

STAFF REPORT
Housing Element Status Update
August 9, 2023

Page 2 ends

Fire District Comments
On March 29, 2023 Woodside Fire Protection District (WFPD) submitted a document to the Town with seven Requested Mitigations (Attachment 2). Those mitigations were integrated into Resolution 2922-2023 when the IS/MND was adopted. On May 19, 2023, Town staff met with WFPD staff to further discuss the seven items and how WFPD would like to see them implemented. WFPD indicated that they would provide written guidance on how they would like to see them implemented. That letter was received on July 6, 2023 (Attachment 3).

Jurisdictional Update on Housing Element Status
Redwood City and Brisbane are the only jurisdictions in San Mateo County with adopted Housing Elements certified by HCD. See the Let’s Talk Housing county site for the detailed status of each jurisdiction.

DISCUSSION
Summary of HCD Comment Letter and Call with Reviewer
Since the Town received the July 25th comment letter from HCD, the staff/consultant team have begun analyzing it and have had a meeting with the HCD reviewer. It is staff’s understanding that a number of housing element review staff have left HCD employment in recent months. As such, HCD is assigning a reviewer based on who is available when the document is submitted. The Town was assigned a new reviewer, who is also a supervisor with HCD. It is our current understanding that she will be the Town’s reviewer through certification.

Staff held a meeting with the reviewer on August 1st to discuss the more substantive comments. The general tone of the meeting was productive and collaborative. The reviewer acknowledged that the Town’s housing element is different than most and that some unique approaches would be needed to reach certification. She indicated that she was willing to assist with examples and potential program language to get to the finish line.

At this time, based on preliminary analysis, staff has identified five comments that will require the greatest effort to resolve, included below with page number references to the HCD letter:
• Opt-In Housing Diversification Program – page 2
• Availability of Zoning and Minimum Density – page 3
• ADUs and adjustments if affordable units are not realized – page 6 • Dorothy Ford Park and Open Space facilitation and support – page 6 • Affirmatively Furthering Fair Housing – page 8
The other comments will also take time and resources but have less policy consequences based on staff’s initial analysis. Staff anticipates considerable back-and-forth with the HCD reviewer to address all of the comments.

The current housing element budget for the Town’s consultant, Urban Planning Partners (UPP), is completely depleted. It is important for the Town to move forward in an expeditious manner to resolve remaining issues with the HCD reviewer and proceed through the Housing Element Status Update
August 9, 2023

Page 3 ends

Planning Commission and Town Council process to revise the Housing Element. Since the outstanding issues have not been completely analyzed, it is not possible yet to develop a specific scope and budget for this work. Staff recommends the Council approve additional expenditures of up to $30,000 at this time. Staff will work with UPP to set a more specific scope and budget and return to Council for a formal contract amendment at an upcoming meeting.

Related Updates
The following updates are provided to keep the Council and public informed on related items:
• WFPD Comments – Staff will continue to coordinate with WFPD on the seven Requested Mitigations and develop a work plan to implement them. • Builder’s Remedy – The Town adopted a “self-certification” to protect against any potential Builder’s Remedy projects. Since HCD has issued a letter saying that additional chances are required, the Town is again susceptible to Builder’s Remedy applications. As a reminder, Builder’s remedy projects do not need to comply with existing zoning regulations, but do need to comply with CEQA. • Zoning Code Updates to Implement Housing Element – In late 2022, Planning Commission made significant progress on updates to the zoning code; however, that work was paused to focus on the Housing Element itself. The zoning code amendments need to be adopted by January 2024 under State law. Staff is exploring timing and coordination approaches to balance that work with the updates to the Housing Element.
• Safety Element Update – A draft Safety Element was reviewed by Town Committees and the staff/consultant team have started to analyze those comments. Given the urgency of the Housing Element updates, staff anticipates the adoption of the Safety Element will be delayed. It is not yet possible to develop a new timeline as analysis of the HCD letter is ongoing. The current Safety Element remains in effect while the new Safety Element is developed. There is not a specific State law deadline for adoption of the Safety Element.

FISCAL IMPACT
Staff recommends the Council approve additional expenditures of up to $30,000 at this time.

Staff would then work with UPP to set a more specific scope and budget and return to Council for a formal contract amendment at an upcoming meeting.

ATTACHMENTS

1. July 25, 2023 HCD Comment Letter

2. Seven Requested Mitigations from Woodside Fire Protection District – Received March 29, 2023

3. Letter from Woodside Fire Protection District on Seven Mitigation Measures – Received July 6, 2023

4. Resolution 2926-2023 Adopting the Housing Element and Conforming General Plan Amendments

5. Town Council Resolution 2922-2023 Adoption of IS/MND and MMRP

6. Table of Meetings and Documents Related to the Housing Element Update STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
July 25, 2023
Laura Russel, Director
Planning and Building Department
Town of Portola Valley
765 Portola Road
Portola Valley, CA 94028
Dear Laura Russel:

RE: Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Thank you for submitting the Town of Portola Valley’s (Town) housing element adopted on May 10, 2023 and received for on May 26, 2023. Pursuant to Government Code section 65585, subdivision (h), the California Department of Housing and Community Development (HCD) is reporting the results of its review. In addition, HCD considered comments from Kevin Burke and David Kellogg pursuant to Government Code section 65585, subdivision (c).

The adopted element addresses many statutory requirements described in HCD’s November 9, 2022 review; however, revisions will be necessary to substantially comply with State Housing Element Law (Gov. Code, § 65580 et seq). The enclosed Appendix describes the revisions needed to comply with State Housing Element Law.

For your information, pursuant to Assembly Bill 1398 (Chapter 358, Statutes of 2021), as the Town failed to adopt a compliant housing element within 120 days of the statutory deadline (January 31, 2023), Program 1-1 and 1-2 (Rezoning) to rezone 106 units including 64 lower-income units to accommodate the regional housing needs allocation (RHNA) must be completed no later than one year from the statutory deadline. Otherwise, the local government’s housing element will no longer comply with State Housing Element Law, and HCD may revoke its finding of substantial compliance pursuant to Government Code section 65585, subdivision (i). Please be aware, if the Town fails to adopt a compliant housing element within one year from the statutory deadline, the element cannot be found in substantial compliance until rezones to accommodate a shortfall of sites pursuant to Government Code section 65583, subdivision (c),paragraph (1), subparagraph (A) and Government Code section 65583.2, subdivision (c) are completed.

Laura Russel, Director

Page 2 ends

Public participation in the development, adoption and implementation of the housing element is essential to effective housing planning. Throughout the housing element process, the Town should continue to engage the community, including organizations that represent lower-income and special needs households, by making information regularly available and considering and incorporating comments where appropriate.

Please be aware, any revisions to the element must be posted on the local government’s website and to email a link to all individuals and organizations that have previously requested notices relating to the local government’s housing element at least seven days before submitting to HCD.

Several federal, state, and regional funding programs consider housing element compliance as an eligibility or ranking criteria. For example, the CalTrans Senate Bill (SB) 1 Sustainable Communities grant, the Affordable Housing and Sustainable Communities programs, and HCD’s Permanent Local Housing Allocation consider housing element compliance and/or annual reporting requirements pursuant to Government Code section 65400. With a compliant housing element, the Town will meet housing element requirements for these and other funding sources.

For your information, some general plan element updates are triggered by housing element adoption. HCD reminds the Town to consider timing provisions and welcomes the opportunity to provide assistance. For information, please see the Technical Advisories issued by the Governor’s Office of Planning and Research at:
https://www.opr.ca.gov/planning/general-plan/guidelines.html.

We are committed to assisting the Town in addressing all statutory requirements of State Housing Element Law. If you have any questions or need additional technical assistance, please contact Sohab Mehmood, of our staff, at [email protected].

Sincerely,
Paul McDougall
Senior Program Manager
Enclosure
Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 1 July 25, 2023

APPENDIX

TOWN OF PORTOLA VALLEY
The following changes are necessary to bring the Town’s housing element into compliance with Article 10.6 of the Government Code. Accompanying each recommended change, we cite the supporting section of the Government Code.

Housing element technical assistance information is available on HCD’s website at https://www.hcd.ca.gov/planning-and-community-development/hcd-memos. Among other resources, the housing element section contains HCD’s latest technical assistance tool, Building Blocks for Effective Housing Elements (Building Blocks), available at https://www.hcd.ca.gov/planning-and-community-development/housing-elements/buildingblocks and includes the Government Code addressing State Housing Element Law and other resources.

A. Housing Needs, Resources, and Constraints

1. Affirmatively further[ing] fair housing in accordance with Chapter 15 (commencing with Section 8899.50) of Division 1 of Title 2…shall include an assessment of fair housing in the jurisdiction. (Gov. Code, § 65583, subd. (c)(10)(A).) Income and Racial Concentration of Affluence (RCAA): While the element was revised to include some analysis on income and RCAA, the analysis must still address trends, conditions, coincidence with other fair housing factors (e.g., race, highest resource, overpayment), effectiveness or absence of past strategies (e.g., lack of publicly assisted housing and lack of multifamily zoning), local data and knowledge and other relevant factors.

2. Analyze any special housing needs such as elderly; persons with disabilities, including a developmental disability; large families; farmworkers; families with female heads of households; and families and persons in need of emergency shelter. (Gov. Code, § 65583, subd. (a)(7).)
While the element was revised to now quantify the number of seniors and large households, as found in HCD's prior review, it still needs to include a complete analysis of special needs populations. Specifically, a complete analysis of each population group should discuss challenges faced by the population, the existing resources to meet those needs (availability senior housing units, number of large units, number of deed restricted units, etc.,), an assessment of any gaps in resources, and proposed policies, programs, and funding to help address those gaps.

3. An inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 2 July 25, 2023
an analysis of the relationship of zoning and public facilities and services to these sites. (Gov. Code, § 65583, subd. (a)(3).)
Progress in Meeting the Regional Housing Needs Allocation (RHNA): As you know, the Town’s RHNA may be reduced by the number of new units built since July 1, 2022, however the element must demonstrate their availability in the planning period. The element indicates 52 units including 17 lower-income units as credit towards the RHNA through the Willow Commons and Sanford Wedge projects.

HCD's prior review found that the element must demonstrate the availability of these units during the planning period. The element was revised to briefly describe the status for one of these projects indicating that an environmental impact report (EIR) has been made available to the public. However, this still does not demonstrate the likelihood that these units will be built during the planning period. To address this requirement, the element could discuss project status, schedule for completion, outreach with developments, remaining steps for projects to receive final entitlements and any other relevant information that demonstrates the availability of these units during the planning period.

Opt-In-Single-Family Rezoning Program: In order to accommodate the remaining need for the above moderate-income RHNA, the Town is proposing to develop a program where property owners can opt-in to rezone their parcel to allow for four units per acre and a maximum of four dwelling units per lot. The Town is expecting to increase capacity by twelve units. HCD’s prior review found that the element must include an analysis of any program guidelines and processes, description of existing uses, sample parcel inventory, criteria to identify parcels, and interest from property owners and stronger programs to monitor and incentivize development. The element still should be revised, as follows:
• Development Cap – The element was revised to indicate that while 134 parcels are eligible for this program, the Town will be capping this program at 12 units during the planning period. Additionally, any approved SB9 units will count towards this cap. Please note that this cap is potentially considered a constraint on providing housing capacity, can limit the jurisdictions’ ability to promote housing mobility and is in potential conflict with SB 330 (Housing Crisis Act).

Specifically, The Housing Crisis Act of 2019 was signed by Governor Newsom on October 9, 2019 and became effective on January 1, 2020. The Housing Crisis Act (Gov. Code, § 66300) generally prohibits, among other items, a locality from enacting limits on approvals or caps population.
• Approval Process – The revised analysis indicates that the approval process will be capped at three public meetings and will require planning commission review.

The element should include additional information and analyze the approval process. Specifically, it should discuss the type of required permits needed to approve projects under this program (e.g., zoning text amendments, administrative permit). Additionally, it should analyze this process and its Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 3 July 25, 2023
interaction with SB 9. For example, while the Town is requiring planning commission hearings and possible other discretionary permits, SB 9 accomplishes a similar outcome and provides a ministerial process. The analysis should consider how this program incentivizes additional housing units beyond existing laws. As found in HCD’s prior review, the element must include a parcel inventory to demonstrate the type of parcels that may be eligible for this program.

Lastly, please be aware, pursuant to Government Code section 65583 (c)(1)(A), rezones to accommodate RHNA must occur within three years from date of adoption of the element. The element should include a program to monitor application of the program to ensure that rezonings have been completed within that timeframe and commit to rezone or amend the housing element to identify additional sites.
• Programs – The element should include programs committing to provide incentives to property owners, monitoring production and the effectiveness of this program and implementing additional actions or strategies if assumptions do not actualize during the planning period. Lastly, the element could consider stronger actions to incentivize affordable units to address affirmatively furthering fair housing (AFFH) and promote housing mobility.

Availability of Zoning: The element identified several sites that did not have appropriate zoning or densities to accommodate the RHNA. As such, the element shows a shortfall of sites to accommodate the RHNA; 106 units including 64 units for lower-income households. While the element has included programs committing to rezoning sites with the Town’s new multifamily land use designations, because zoning was not in place at the start of the planning period (January 31, 2023), the element must include a program committing to housing element rezone requirements pursuant to Government Code section 65583.2 (h) and (i). As part of these rezoning requirements, the element must commit to establishing a minimum density of 20 units per acre (GC 65583.2 (h)).

HCD’s prior review found that the element should clarify if the minimum density for the rezone is also the maximum density. The element was revised to indicate that the minimum density for the rezones will be three units per acre and the maximum density will be 20 units per acre. However, because the Town needs to comply with Government Code section 65583.2 (h) and (i), the minimum density for rezoning to accommodate the lower-income RHNA must be 20 units per acre. Additionally, to encourage and facilitate for a variety of housing types and not constrain multifamily development, the Town’s rezone strategy should provide for a range of densities (e.g., 20 to 30 units per acre).

4. An analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the types of housing identified in paragraph (1) of subdivision (c), and for persons with disabilities as identified in the analysis pursuant to paragraph (7), including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, and local processing and permit procedures... (Gov. Code, § 65583, subd. (a)(5).)
Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 4 July 25, 2023
Local Processing and Permit Procedures:
• Architectural and Site Control Commission (ASCC) – HCD's prior review found that the element must describe the design criteria, approval procedures, and decision-making criteria for the ASCC. The element was revised to indicate that multifamily housing with lower-income units will not be subjected to this process and market rate multifamily will only be subject to discretionary review design review. However, as noted in HCD's prior review, the element still needs to identify any decision-marking criteria (e.g., approval findings) and analyze these requirements for impacts on timing, feasibility, and approval certainty. Based on a complete analysis, the element may need to add or modify programs to address this constraint.
• Affiliated Housing Program – The element was revised to indicate that this program has been typically implemented through the housing element and the conditional use permit (CUP) findings are generally related to site suitability, safety, and harmony. However, as found in HCD's prior review, the element still must identify and analyze the complete approval process. For example, the element should discuss how projects proposed under this program are approved including typical development standards, specific findings, and approval criteria for the CUP, standards that are required to opt-in to the program, and other requirements that impact the feasibility of development on these sites. • Local Processing and Permit Procedures – The element should address public comments on this revised draft submittal and discuss compliance with the Permit Streamlining Act and intersections with CEQA and timing requirements, including streamlining determinations and add or modify programs as appropriate.

Zoning, Development Standards and Fees: The element was not revised to address this requirement. The element must clarify compliance with new transparency requirements for posting all zoning, development standards and fees on the Town’s website and add a program to address these requirements, if necessary.

Constraints on Housing for Persons with Disabilities:
• Reasonable Accommodation – The element was revised to indicate that it needs to update the Town definition of family as part of the reasonable accommodation procedure. However, as found in HCD’s prior review, the element must describe the process and decision-making criteria such as approval findings and analyze any potential constraints on housing for persons with disabilities. • Group Homes of Seven or More Persons - The element was revised to include Program 8-10 committing to allowing these uses with a conditional use permit and objective standards. However, the element should clarify if these uses are Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 5 July 25, 2023
only subject to those restrictions that apply to similar residential uses. Based on a complete analysis, the element may need to modify programs to address any constraints.

5. An analysis of potential and actual nongovernmental constraints upon the maintenance, improvement, or development of housing for all income levels, including… …requests to develop housing at densities below those anticipated in the analysis required by subdivision (c) of Government Code section 65583.2, and the length of time between receiving approval for a housing development and submittal of an application for building permits for that housing development that hinder the construction of a locality’s share of the regional housing need in accordance with Government Code section 65584... (Gov. Code, § 65583, subd. (a)(6).)
Developed Densities and Permit Times: The element was not revised to address this requirement. As found in HCD's prior review, the element must be revised to include analysis of requests to develop housing at densities below those anticipated, and the length of time between receiving approval for a housing development and submittal of an application for building permits that potentially hinder the construction of a locality’s share of the regional housing need.

B. Housing Programs

1. Identify actions that will be taken to make sites available during the planning period with appropriate zoning and development standards and with services and facilities to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory completed pursuant to paragraph (3) of subdivision (a) without rezoning, and to comply with the requirements of Government Code section 65584.09. Sites shall be identified as needed to facilitate and encourage the development of a variety of types of housing for all income levels, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing. (Gov. Code, § 65583, subd. (c)(1).)
As noted in Finding A3, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the Town may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types. In addition, the element should be revised as follows:

Shortfall of Sites: – As noted above because zoning was not in place at the start of the planning period, the Town is showing a shortfall of 106 units including 64 units for lowerincome households.

Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 6 July 25, 2023
While the element included Programs 1-1 and 1-2 committing to rezoning to allow residential uses at appropriate densities to accommodate the RHNA, programs to address the lower-income RHNA must specifically commit to rezoning pursuant to Government Code section 65583.2, subdivisions (h) and (i). Examples of requirements include permitting, without discretionary action, multifamily developments in which 20 percent or more of the units are affordable to lower-income households, requiring minimum densities and residential performance standards.

Additionally, since the Town failed to adopt a compliant housing element within 120 days of the statutory deadline (January 31, 2023), rezones to accommodate the RHNA must be completed no later than one year from the statutory deadline.

Programs 7-1 through 7-8: Accessory Dwelling Units (ADU): – The element was revised to strengthen several programs under Policy 7 – Promote ADUs. The element included actions to monitor ADU production and if assumptions are not met, initiate additional actions including expedited plan check and waiving fees. However, given the Town’s reliance on ADUs and as found in HCD’s prior review, the element must include a commitment to adjusting projected assumptions if the number of units and affordability do not actualize during the planning period. Specifically, the degree of additional actions should be in stride with the degree of the gap in production and affordability. For example, if actual production and affordability of ADUs is far from anticipated trends, then the element must commit to amending the housing element, identifying additional sites, and rezoning within a timely manner (e.g., within six months).

Program 8-3: Emergency Shelters: – This Program includes a commitment to amend the zoning code to require on-site parking for all staff working in an emergency shelter.

However, this Program should include a specific commitment to comply with AB139/Government Code section 65583, subdivision (a)(4)(A) which requires that parking for emergency shelters should only be the number of spaces necessary for staff working in the shelter and no more than other uses in the same zones.

Programs 1-4, 3-2 and 4-2: Affiliated Housing Sites: – The element identifies two sites that will not be rezoned but are anticipated to be developed under the Affiliated Housing Site Program including the 42 Acre Sequoia Housing Site and the Christ Church Affiliated Housing site. As found in HCD’s prior review, the element must include programs that commit to facilitating the development of these properties and commit to monitor production throughout the planning period and if necessary additional actions to identify additional capacity. While the element committed to establishing development standards; providing flexibility to those standards; conducting outreach and promoting technical assistance; the element still needs to include programs committing to monitoring the effectiveness of these efforts and stronger incentives to promote affordability.

Dorothy Ford Park and Open Space Housing Site: – This site is an integral part of the addressing the Town’s lower-income RHNA. Specifically, this site is accommodating roughly half of the Town’s lower-income RHNA. Additionally, this site is owned by the Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 7 July 25, 2023
Town, therefore providing the Town a unique opportunity to provide much needed affordable housing. As such, the element needs to include significant actions to facilitate and encourage development on this site. The element should include a program with numerical objectives that ensures compliance with the Surplus Land Act, provides incentives and actions along with a schedule to facilitate development of this site.

Actions should include outreach with developers, issuing requests for proposals, incentives, fee waivers, priority processing and financial assistance.

2. The Housing Element shall contain programs which assist in the development of adequate housing to meet the needs of extremely low-, very low-, low- and moderateincome households. (Gov. Code, § 65583, subd. (c)(2).) The element indicated that the Town will require set aside units for extremely low income (ELI) households within the Dorothy Ford Site. However, the element must include specific actions to meaningfully address ELI households. As found in HCD's prior review, program actions could include prioritizing some funding for housing developments affordable to ELI households and offering financial incentives or regulatory concessions to encourage the development of housing types, such as multifamily, single-room occupancy (SRO) units, to address the identified housing needs for ELI households. For additional information, see the Building Blocks at https://www.hcd.ca.gov/extremely-low-income-housing-needs.

3. Address and, where appropriate and legally possible, remove governmental and nongovernmental constraints to the maintenance, improvement, and development of housing, including housing for all income levels and housing for persons with disabilities. The program shall remove constraints to, and provide reasonable accommodations for housing designed for, intended for occupancy by, or with supportive services for, persons with disabilities. (Gov. Code, § 65583, subd. (c)(3).) As noted in Finding(s) A4 and A5, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results of that analysis, the Town may need to revise or add programs and address and remove or mitigate any identified constraints.

In addition, while Program 4-1 (Parking Requirements) was revised with an updated program timeline, as found in HCD's prior review, this Program should be revised to include specific details regarding the new parking requirements for affordable housing.

4. The Housing Element shall include programs to conserve and improve the condition of the existing affordable housing stock. (Gov. Code, § 65583, subd. (c)(4).) HCD’s prior review found that the element must include programs to conserve and improve the condition of the housing stock. The element was revised to reference the Town’s ADU programs and indicated that the Town does not have a need for programs related to these issues. However, the housing needs assessment indicated that approximately ten units may require rehabilitation, but owners lack the discretionary Town of Portola Valley’s 6th Cycle (2023-2031) Adopted Housing Element Page 8 July 25, 2023
income to fund these improvements. As found in HCD’s prior review, the element still should include programs to conserve and improve the housing stock. Strategies could include providing grants for substantial rehabilitation, provide matching grants for homeowner improvements, or implement proactive code enforcement program with resources.

5. Promote and affirmatively further fair housing opportunities and promote housing throughout the community or communities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, color, familial status, or disability, and other characteristics... (Gov. Code, § 65583, subd. (c)(5).)
Goals, Priorities, Metrics, and Milestones: – While the element was revised to indicate that the Town’s fair housing actions include programs related to ADU, inclusionary housing and other efforts related to the RHNA, this generally does not address HCD’s prior review.

The assessment of fair housing demonstrated that that the Town along with its neighbors is entirely highest resourced, highest income, and wholly a RCAA, a stark contrast to the rest of the region. Additionally, the element identified majority of its RHNA at the edges of the Town. These conditions and circumstances warrant significant and robust actions (not limited to the RHNA) to promote housing mobility and increasing housing choices and affordability throughout and beyond the Town, including in lower-density neighborhoods. The element should be revised with aggressively numeric targets and geographic targets throughout the Town, including lower-density neighborhoods. Examples include creating more housing choices and affordability in single-family neighborhoods beyond complying with law (e.g., SB 9, ADUs), targeting affordable housing funding, homesharing programs, more than one junior accessory dwelling unit (per single family structure, enhancing capacity, affordability, and housing choices on religious institutional sites beyond the RHNA and other alternative land use strategies. Lastly, the element must be revised to include quantified metrics (beyond the RHNA) programs focused on housing mobility and increased housing opportunities and affordability.

WFPD’s Requested Mitigations

1. Adoption and codification by ordinance of the High and Highest Hazard areas identified in the Moritz map as High and Very High Fire Hazard Severity Zones in accordance with Government Code §51179 and WFPD’s newly proposed WUI Ordinance 22-02. Such hazard zone designations should be updated as and when the district's updated assessment of wildfire hazard and risk is completed and released.

2. Codification by ordinance of the fire prevention policies in section 4151 of the 2010 Safety element regarding development in High and Highest Hazard areas identified in the Moritz map or any successor map approved by the district and Town.

3. Adoption and codification by ordinance of Cal Fire's minimum fire safe development regulations (14 C.C.R. §§ 1270.01 thru 1276.05) throughout all High and Highest Hazard areas identified in the Moritz map or any successor map approved by the district and Town, and designation of the Woodside Fire Protection District as the authority having jurisdiction under the Cal Fire regulations to administer and enforce their requirements within the Town's local jurisdiction.

4. Adoption and codification of a new Town ordinance amending Cal Fire’s minimum fire safe development regulations, as adopted above, to require. • minimum property line setbacks of 30 feet for all new parcels and all new residential development within all High and Highest Hazard areas identified in the Moritz map or any successor map approved by the district and Town. • minimum building separation distance of 30 feet between all newly developed structures within a parcel in all High and Highest Hazard areas identified in the Moritz map or any successor map approved by the district and the Town, and • provisions for reduction of required setbacks and/or separation distances upon prior written district approval if (a) compliance is shown to be physically infeasible and (b) alternate means satisfactory to the district are demonstrated and implemented to achieve the same reduction of fire spread risk that the required set-back or separation distance would achieve. Such alternate means include but are not limited to the reduction of structure enthalpy through use of noncombustible wall and roof assemblies; elimination of exposed windows, doors, or apertures from closely spaced surfaces; installation of non-combustible fire walls between parcels and exposed structures.

5. Adoption and codification of a new Town ordinance to establish the procedures and standards by which the Town shall review and determine the impact of proposed development projects on public health and safety in accordance with the provisions of the following State housing law mandates:
• Government Code §§ 65589.5(d)(2) ("a local agency shall not disapprove a housing development project ... unless it makes written findings, based upon a preponderance of the evidence in the record [that] ... [t]he housing development project ... as proposed 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 development unaffordable to low and moderate-income households"),
• Government Code § 65852.2(a)(1)(A) (relating to accessory dwelling units), • Government Code § 66411.7(d) (relating to SB-9 urban lot splits), and • Government Code §§ 65913.4(a)(6)(D) and 65915(e)(1) (relating to bonus density concessions)

6. Complete and adopt Town-wide Emergency Evacuation and Recovery Plan for wildfire, earthquake and similar town-wide emergencies, and staff and fund Town program to educate residents and implement the plan.

7. Update and amend the General Plan Safety element to
• Update and amend assessment of the environmental impact of planned development on wildfire risk and public safety once the Fire District’s hazard and risk assessment is completed.
• Expand and improve existing evacuation routes.
• Enhance Zoning, Subdivision and Building Codes to mitigate risk of fire spread between and among combustible structures and vehicles that lack adequate separation.
• Enhance safety and reliability of power and communications utilities. • Adopt and codify by ordinance the individuated wildfire risk assessment and abatement procedures and standards of NFPA Standard 1140 §§ 10.1 thru

26.2.6, designating the Woodside Fire Protection District as the authority having jurisdiction to administer and enforce NFPA 1140 within Town

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Judith Hasko and Craig Taylor
DATE: August 9, 2023
RE: Post-Adoption Plan Subcommittee Update

BACKGROUND
The Post-Adoption HE Plan Subcommittee has submitted for discussion and review a more detailed Post-Adoption HE Plan. We have submitted a draft of such plan, which is included in the Council materials for August 9th.

Please note the following:

1. The original intent was to have this plan discussed for potential approval 30 days after the adoption date of the Housing Element.

2. Due to other matters considered by the Town Council in prior meetings, we delayed submission of the report for discussion with the Town Council until August 9th.

3. The Town received comments from HCD on our Housing Element on July 25 th
,
which the Town is working to understand.

4. Instead of determining whether to approve the plan on August 9th, we recommend that the Town Council instead review this proposed plan in conjunction with the update on HCD's response.

5. This plan is based closely on the framework presented in our March 29th meeting, but adds certain timing and process details.

ATTACHMENT
Proposed Post-Adoption Implementation Plan for 6th Cycle Housing Element

TOWN OF PORTOLA VALLEY
Colleagues Memo

TOWN OF PORTOLA VALLEY

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Proposed
Portola Valley Town Council
Post-Adoption Implementation Plan for
6th Cycle Housing Element
August 9, 2023
Goal of Post Housing Element Plan: Support and enhance the Town’s ability to accommodate additional housing in accordance with our General Plan, with specific actions to be taken within defined time frames.

Topics:

1. Housing Site Inventory Follow up

2. Zoning, Design Review Actions and Related GPUpdates

3. CEQAGuidelines/Local Guidelines and Thresholds

4. Supplemental Safety Measures for HE*

5. Impact of HE on Services and Infrastructure

6. Housing Funds Develop Policy for Use of Inclusionary Funds

7. Encourage Community and Civic Engagement

8. Develop Housing Element Information Repository
*Note: Coordination with Woodside Fire Protection District on Key Approaches is subject to separate discussion

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Definitions:

GP = GENERAL PLAN
HE = HOUSING ELEMENT
IS/MND = INITIAL STUDY/MITIGATED NEGATIVE DECLARATION
MMRP = MITIGATION MONITORING AND REPORTING PROGRAM, PART OF THE IS/MND PC = PLANNING COMMISSION
PCCM = PLANNING COMMISSION COLLEAGUES MEMO DATED FEBRUARY 8, 2023 POST HE PLAN = POST-ADOPTION HOUSING ELEMENT PLAN
SE = SAFETY ELEMENT
TC = TOWN COUNCIL
ADOPTION DATE = DATE THE HE DRAFT WAS SUBMITTED TO HCD, MAY 25, 2023

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Topic 1
Housing Site Inventory Follow up
Actions

1. Evaluate and propose Sunrise opportunity sites.

2. Initiate longer term planning efforts for future housing cycles.

Generally, the goal isto conduct continual evaluation of housing needs and potential housing sites in Town to avoid time-constrained, rushed analyses in future HE cycles and to address community housing needs.

Timing
Initiate item 1 actions 3 months after Adoption Date and continue through 2-year Sunrise period. Initiate item 2 actions 9 months after Adoption Date and continue indefinitely.

Within 12 months after Adoption Date, develop timelines for work product of a new ad hoc committee suitable to implement intent of the Sunrise provision; initial list of viable housing site alternatives should be completed no later than 15 months after Adoption Date.

If necessary, between 15 and 18 months after Adoption Date, evaluate options for reconfiguring Dorothy Ford Park and Open Space and related costs, with final report submitted to the TC no later than the date that is 18-21 months after Adoption Date.

Process
On item 1, form TC subcommittee to oversee preliminary work, with planning consultant/staff support, to identify potential alternative sites and/or other programs that may address our RHNA
requirements currently addressed with Dorothy Ford Park and Open

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Space. Such subcommittee would (i) develop a comprehensive list of all sites in Town leveraging work done by the Ad Hoc Housing Element Committee, (ii) conduct initial outreach to the community generally (through public meetings) to inform the public of the need for alternative sites and gain public input on potential alternative sites, and directly to owners of properties that could feasibly serve as alternative sites, (iii) maintain a list of activities conducted and feedback received per site, and (iv) continuously monitor potential sites as new information becomes available.

Once site listings are prepared, only minimal staff time expected to be needed to support the subcommittee.

The TC would establish an ad hoc committee consisting of Town committee, commission and council members along with Town residents, which would work with staff and consultants to discuss, evaluate and prioritize all alternative Sunrise site opportunities, considering financial, property rights and other relevant information in light of the Town ethos and the GP.

This ad hoc committee would work with input from the TC subcommittee acting under item 1 to (i) develop a process for recording the status of sites in Town for potential housing (e.g., whether it was assessed in the past housing efforts, what impediments or issues were identified), and monitoring any changes in status of these sites, (ii) conduct outreach to have a comprehensive effort to facilitate identification of alternative sites, (iii) establish a framework for understanding costs of developing various sites and (iv) consider developing a rank ordering system for any suitable sites.

This ad hoc committee would also evaluate opportunities to reconfigure Dorothy Ford Park and Open Space, if alternative sites are not identified prior to the date that is 15 months after the Adoption

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Date and develop an understanding of the potential costs of doing so.

Meetings would be monthly or otherwise as needed to identify sites early enough in the Sunrise period to provide workable alternatives, starting no later than January 2024. Moderate to significant staff and consultant support would be needed as the process develops.

Comments
The intent of this effort is to maximize success of Sunrise provision to identify alternatives to development of Dorothy Ford Park and Open Space, to retain the aesthetic, recreational and natural attributes of these sites while complying with our HE commitments, to the maximum extent possible

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Topic 2
Zoning, Design Review Actions
and Related GP Updates
Action
Review, discuss and adopt zoning changes needed to ensure consistency between the HE, zoning code, and the remaining elements of the GP, and develop objective design criteria that builds on Town design guidelines for use in complying with state requirements for certain future development projects in a manner consistent with the GP. In the unlikely event that GP updates are needed in light of these changes, they could be adopted as part of longer-term effort to update GP, unless required to be adopted earlier under law.

Timing
Currently underway. Adopt by January 2024 as required by state law.

Process
The Town has retained consultants with relevant expertise relating to necessary zoning changes and objective design criteria. A draft of proposed code amendments is expected to be released in August 2023 with PC consideration beginning in September.

A public awareness and education meeting should be conducted after the initial PC study session, with support by the staff and consultants to allow full participation by residents.

Efforts under this topic require moderate to significant staff and consultant support.

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Comments
In the course of implementing the new HE, the Town will need to adopt zoning changes and objective design review guidelines.

Objective design standards would be developed as soon as practical given that they are a critical means of requiring new project development to be consistent with the Town’s GP and ethos. The goal of actions under this topic is to provide further local control of development to the extent allowed under law.

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Topic 3
CEQAGuidelines/Local Guidelines and Thresholds
[From MMRP]
Actions

1. Establish local CEQA guidelines per 14 CCR Section 15022.

2. Establish local thresholds, per 14 CCR Section 15064.7(b), concerning key topics that may include certain aspects such as aesthetics, parks and recreation, public services, traffic and wildfire safety to guide future development, with reference, where available, to approaches taken by jurisdictions that have adopted similar measures.

Timing
For item 1, within 6 months after Adoption Date
For item 2, within 8-12 months after Adoption Date
Process
Planning Staff and Town Attorney to address item 1 under this topic and submit for PC and then TC approval.

Planning consultants with Town Attorney to develop framework for item 2 under this topic based on references to other jurisdictions adopting similar local parameters, then submit for discussion and input by the PC to review to refine to tailor to community values and the Town’s GP and eventual submission for adoption by the TC. Item 2 is not intended to be a comprehensive analysis, but a limited set of parameters for use in guiding new developments in a manner consistent with the Town’s ethos and values.

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Conduct a public awareness, education and comment meeting after the initial PC study session.

Comments
The intent of item 1 under this topic is to comply with state requirements in adopting local CEQA guidelines, and the intent of item 2 under this topic is to clarify and standardize analysis and decision making in the environmental review process for future development projects in Town, with the intent to enhance the measures included in the IS/MND as appropriate to reflect our Town’s ethos, and increase consistency and efficiency.

Guidelines and thresholds are intended to be derived from existing examples taken from other jurisdictions as adjusted to reflect the Town’s situation and would serve to frame the analyses of future project-level environmental impacts and mitigation measures for projects that are not exempt from CEQA and be informed by public input.

Any required GP amendments that may be identified in the initial process as being required to effect these actions could be implemented in the next update of the GP unless legally required to be adopted earlier.

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Topic 4
Supplemental Safety Measures for HE
[From MMRP]
Action
Coordinate and ensure that the Town’s ongoing SE-related activities also consider the cumulative projected increase in Town population and housing units arising out of HE adoption and adopt mechanisms to coordinate with neighboring jurisdictions with respect to safety measures such as the evacuation plan.

Timing
Initiate 9-12 months after Adoption Date to the extent feasible. Yearly and ad hoc follow-up activities.

Process
Staff and consultants would reach out to committees involved in the SE update process to confirm that such committees assessed and made recommendations to the PC and TC with respect to adjustments to evacuation routes and planning, building codes, and other safety measures (to address fire, geologic, flooding and other risks), specifically arising from the cumulative increase in population and housing units in the HE, adopted fire maps, other elements of the GP, and best practices.

These efforts would be made in conjunction with the ongoing SE update and discussion of evacuation plan.

TC would establish process and timing for regular periodic and ad hoc assessments of any appropriate updates to the SE and evacuation plan as best practices evolve, and as HE plan actions are carried out, to

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enable methodical and proactive approach.

Comments
The goal of this effort is to optimize consistency, beyond what is required by state law, across the SE, HE, and remainder of the GP with respect to safety in light of the increase in the Town’s population under the new HE, complementing ongoing efforts already in process.

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Topic 5
Impact of HE on Services and Infrastructure;
Insurance Availability
Actions

1. Understand projected growth in demand on services and infrastructure resulting from increased population and housing units in Town under the HE, and potential impact on Town budget, and develop strategy for maintaining or improving current service levels.

2. Understand and gather information on housing insurance challenges in Town, focusing on how additional housing units to be built in the course of implementing our HE will impact existing insurance programs residents use, and the availability and costs of insuring new housing units.

Timing
For item 1 activities, they would start 4 months after Adoption Date through TC subcommittee and staff.

For items 1 and 2 activities, 12 months after Adoption Date through a working group and staff.

Process
For item 1, consultants/staff working with one or more Town Council members would conduct supplemental outreach to confirm public services and infrastructure (e.g., public utilities, public services such as hospitals, fire protection services, police services, safety services, parks and recreation) will continue to be available at an appropriate level for the Town under the updated HE in terms of an current and

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desired future service level, quality, capacity and location, including an assessment of costs to the Town.

Additionally for item 1, the TC later would form a new working group including members of the planning commission to assess more detailed and longer term qualitative and quantitative implications of increasing the Town population and housing units as a result of HE adoption on services and infrastructure.

The group’s goal would be to advise the PC and TC on mechanisms recommended to make sure that public services and infrastructure (e.g., public utilities, public services such as hospitals, fire protection services, police services, safety services, parks and recreation) continue to be available appropriate for Town population in terms of an appropriate service level, quality, capacity and location, including an assessment of costs to the Town.

Community outreach sessions would be conducted from 12 to 15 months after the Adoption Date to allow the public to understand and comment on the group’s efforts.

For item 2, the TC recognizes evolving challenges in insurance in WUI areas. While the initial focus on insurance in the Post HE Plan was to be insurability of new housing units, we propose that we consult with our Town lobbyist, neighboring jurisdictions and San Mateo County on current challenges in local housing insurance on a broader level. This could occur through a TC subcommittee working with staff to gain a broader understanding of the political issues and pragmatic approaches that should be considered for all Town residents, including those new units resulting from the updated HE. The group would also seek to understand and monitor issues and developments that may impact the availability of insurance for new and existing housing units in Town.

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Comments
Increased demand for services and infrastructure merits special monitoring and planning for increased demand, while maintaining the level of services and resources. This effort would complement the efforts staff otherwise may make with respect to services and infrastructure to focus on longer term implications of HE adoption.

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Topic 6
Housing Funds Develop Policy for Use of
Inclusionary Funds
Action
Define an Inclusionary Funds Use Policy to guide the Town’s use of funds arising from this HE program.

Timing
Policy development and adoption within 6 months after Adoption Date.

Process
The Town Council subcommittee, already appointed, will work with Town committees to gather input on priorities and considerations that will inform an Inclusionary Funds Use Policy. The subcommittee, with staff support, will develop a proposal for consideration by the TC for adoption.

Comments
This effort will complement the Town’s general efforts to identify incentives and support for expanding housing options as part of the HE. As the Town assesses its financial resources to accommodate the HE, this effort could also extend to the use of other funds that may become available for housing-related purposes.

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Topic 7
Encourage Community and Civic Engagement
Action
Engage community organizations in discussion of community housing needs and potential resources.

Timing
Form working group within 12 months after Adoption Date; report on work within 15 months after Adoption Date
Process
Form working group including Town committee and commission members to conduct outreach to civic organizations located or operating in Town (e.g., HOAs, medical support services, religious organizations) who are positioned to understand the needs of the most vulnerable in the local community, and assist in understanding existing impediments to development of new housing, identifying and creating opportunities for housing and developing policies to support housing needs for these populations.

This would not entail formal meetings unless the Town Council later found it necessary to conduct them. However, the working group would report its findings to the Town Council within 12 months after the Adoption Date.

Comments
The intent of this activity is to engage organizations that have special insight into the housing needs of vulnerable populations in Town, and to engage them in defining Town strategies to meet these needs on an ongoing basis.

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Topic 8
Develop Housing Element Information Repository
Action
Create an accessible repository of HE-related information, including information about RHNA requirements (general and Town-specific), analyses of available sites, processes and discussions of the Ad Hoc Housing Element Committee, and other items.

Timing
Within 9 months after Adoption Date
Process
Organize a small group of volunteers to organize material and possibly upgrade search technology.

Comments
Recognizing the extensive efforts of the Town to consider public comment and gather information on potential housing sites, the Town Council wishes to create an easily accessible repository that would be available for the Sunrise-related activities and other Town housingrelated activities and otherwise for public understanding and awareness.

TOWN OF PORTOLA VALLEY
Colleagues Memo
TO: Mayor and Members of the Town Council
FROM: Councilmember Taylor
DATE: 8/9/2023
RE: Emergency Evacuation

RECOMMENDATION
The Emergency Preparedness Committee (EPC) has prepared a very extensive emergency evacuation document for the Town of Portola Valley. In an effort to get this information reviewed and brought before the Council in an expeditious manner, I propose we form a subcommittee of the Council to review the document as soon as possible.

BACKGROUND
A subcommittee of EPC has worked on an emergency evacuation document in consultation with Woodside Fire Protection District and the San Mateo County Department of Emergency Management. At the last EPC meeting the draft was approved with a recommendation to forward it to the Town Council. The document contains protocols for emergency responders, suggested longer-term projects for make evacuation safer and more effective, and information for residents to prepare for an emergency.

DISCUSSION
The goal of the Council subcommittee would be to work with the EPC subcommittee to review, clarify and gather input from staff for incorporation into the document before bringing it to the full Council, hopefully in September.

Page 1 ends

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Mary Hufty
DATE: July 25,2023
RE: Conservation Committee
comments in red:

Attendance: Cyrenna Simons ( on Zoom) , Zimmerman, Marianne Plunder, Judith Murphy- (chairing for Catherine Magill), Dieter Walz, Paul Hieple, Teresa Coleman, Meghan Richards, Nona Chiariello Guest: Sue Putnam

1. ORAL COMMUNICATIONS FOR ITEMS NOT ON THE AGENDA – there are Detrichia look alikes out there -Cordalanthus parvaflora. Don’t be fooled. Dittrichia stinks-pull it out before it flowers. Also, star thistle is about to flower cut it or pull it out now before it pops your bicycle tires.

4. TREE PERMITS: reviewed and granted at

1. 2 Wyndham

2. 150 Stonegate

5. OLD BUSINESS:

1. Oversight of Town-owned properties - Updates (Committee) i. Frog pond (Zimmerman) mowed
ii. Springdown (Murphy),
iii. Town Center (Richards) Amazing tall (madia sativa is huge and blooming for the first time the indigenous people used its seeds for a foundation high protein gran.

2. Committee / Town Cooperation

1. Public Works: Invasives along trails and public rights-of-way) plan for outreach to Westridge for their participation as part of their trail maintenance and cooperation with right of way maintenance by the town for star thistle and dittrichia

2. Discuss publicizing alternatives to rodenticide use (Plunder) -outreach needs to be increased. Woodside set a good example

3. Budget for OS maintenance long discussion of the decrased open space management funding. This will be brought to Public Works to discuss the actual dollars. i. Open Space Committee (Chiariello)

TOWN OF PORTOLA VALLEY
Committee / Commission Liaison
Report

TOWN OF PORTOLA VALLEY

Page 2 ends

ii. Wildfire Preparedness Committee (Chiariello) No meeting iii. Trails and Paths (Coleman) No meeting

4. CC Routine Town Communications- word smithing an excellent updated charter which they sent back to ad hoc committee. Committee is Aware that it needs to keep updating the functioning ad hoc committees every year, I believe. Ideally at the time of election of officers J Murphy pointed out that if all the business has been completed the chair can call adjournment without a vote according to Robert’s Rules of Order. ______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Judith Hasko
DATE: July 25,2023
RE: Finance Committee
Summary:

1. Cindy announced the hiring of 2 new senior accountants - 1 limited term, and 1 permanent.

2. Cindy and Starla presented an audit schedule. Cindy's answered questions regarding the State Controller’s Report, and said she was working with the state to communicate on that process.

3. The Finance Committee confirmed it did not wish to form a separate subcommittee for audits, but instead would discuss as a group the audits at each meeting as an agenda item.

4. Cindy and Starla presented changes to the budget (since the prior Committee meeting) adopted by the Town Council, explaining the changes in detail.

5. The Finance Committee discussed the Town cash investment policy and Bill Urban's proposal to take an approach that would allow the Town to receive higher interest rates on low-risk investment vehicles (e.g., certain money market accounts). The committee will need to work with staff to ensure that the proposal meets both the Town's investment policy and applicable rules and regulations. The committee believes these steps will help generate revenue and urge that the staff explore implementation as soon as practical. Staff, the Town Attorney and Bill Urban are following up to identify any potential impediments and to discuss a process for implementation to propose to the Town Council.

Staff has concerns regarding the amount of time and effort required of staff to manage this process and complying with various rules and regulations such as conducting an RFP process (which it will check is necessary) although it agrees that generating more revenue through enhanced interest rates would be beneficial.

6. The Finance Committee discussed ideas for revenue generation in addition to seeking enhanced interest rates on Town deposits, consistent with the Town Council presentation. They suggested having sessions to educate the public on the budget and challenges in parallel with any revenue enhancement steps taken. They also discussed parameters of the increase in the sheriff's contract and looking at whether the Town is receiving its full share of revenues from taxes paid to the county.

TOWN OF PORTOLA VALLEY
Committee / Commission Liaison
Report

TOWN OF PORTOLA VALLEY
______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Judith Hasko
DATE: August 2, 2023
RE: SFO Roundtable- Annual Work Plan and Budget
Summary:

The major items were approval of an annual work plan and budget for the roundtable, and consideration of approval of a letter to a legislative subcommittee to certain members of Congress and the FAA as well as the Department of Transportation regarding the FAA authorization. This reauthorization occurs periodically and there were several proposals in the reauthorization legislation directed to noise standards, reduction in community noise, health aspects of air traffic, community engagement and studies on aviation noise that the roundtable specifically supports.

A separate update on aspects of air traffic noise on Bay Area schools, and related insulation programs, was provided.

Some resources to get a better understanding of the SFO Roundtable work were provided, such as links to educational videos. Standard reports on public input on air traffic noise and reporting were made, and the roundtable noted efforts to study and address anticipated issues from new technologies such as personal air "cars" and other new technologies for urban air mobility.

TOWN OF PORTOLA VALLEY
Committee / Commission Liaison
Report

TOWN OF PORTOLA VALLEY

Portola Valley City CouncilAugust 9, 2023

Portola Valley City Council
August 9, 2023