Written Public Comments Received 6-21-2022 — Richmond City Council, June 21, 2022

From: Cordell Hindler
To: City Clerk Dept User
Subject: Public Comments- Open Forum
Date: Friday, June 17, 2022 1:04:47 PM
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Good Evening Mayor Butt, Council Members and Staff,
for the July 26th Agenda, the Council should Invite Sabrina Landreth to Provide an Update on How Park Services had been Impacted by CO-VID
Also to revisit the Idea of Reinstating the Standing Committees Sincerely
Cordell
From: Shelley Trask
To: PCcomments; City Clerk Dept User; The McLaughlin Group; Dimm-Key Neighborhood; Jim Hanson Subject: public comments - Open Forum
Date: Friday, June 17, 2022 9:41:17 PM
Attachments: Nevin Roundabout (1).pdf
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Dear City Council,
Apologies if this came through multiple times. The image size was too large, so I am attaching a PDF of my original email with images intact so that you may review.

The neighbors in East Richmond recently gathered in Mira Vista Park to discuss the influx of donuts and other crime that has been happening on our streets, and even a sideshow that we recently witnessed at the corner of Key x Barrett. A petition was signed by 30-40 neighbors with great interest in creating a roundabout at that intersection. We only recently received a 4- way stop sign at both intersections of Key x Barrett and Key x Nevin, which has greatly improved the traffic flow. Still, folks continue to speed excessively down Key, often blowing through the stop signs. We have experienced donuts on Friday and Saturday evenings. As a daily pedestrian, I find it very unnerving trying to cross the various blocks around our house.

In 2018, I wrote to Patrick Phelan, then Infrastructure Administrator at the City's Engineering department, to see if we could get stop signs (or better yet) roundabouts installed. He agreed that traffic was very busy along Key, and as a cyclist, that he himself found it very dangerous.

He informed me that although plans were drawn up and a grant was applied for, we did not get the grant money to proceed with roundabouts. We did wind up with stop signs later on, which I am grateful for.

Last week, several neighbors met with our District 6 Councilmember, Claudia Jimenez and she informed us that there is budget available for further traffic safety improvements. I'd like to propose the following, which came directly from Patrick in 2018:
• At Barrett & Key: Install a roundabout. This would force drivers on Barrett to slow down, and the idea with a roundabout is that each leg of the intersection has the same “right” to enter; you cede the right-of-way to drivers already in the roundabout. We would also install curb ramps and high-visibility crosswalks. Roundabouts are inherently safer for all users, according to research. See attachment which shows the design of the roundabout installed right now on Nevin Ave at 24th St, part of the almost-complete Nevin Streetscape. If a roundabout doesn’t work, we could build “bulb-outs” which would shorten the distance a pedestrian has to cross. I would be happy to help maintain the plants in the roundabout, especially drought-tolerant ones.
• At Key & Nevin: Install real “valley gutters.” You probably notice how there are big dips across Key at this intersection to channel the stormwater flow coming down Nevin, as there are no underground storm pipes. A valley gutter is a concrete gutter/pan that is much sturdier and handles the flow of water as well as the vehicle traffic. The road is getting torn up here already and we paved the street just a few years ago. A good valley gutter acts just like a speed bump. [Edit from me: You should see the street now - it's even worse! I also cross on foot at this point and it's very difficult to do so with people speeding down Key from BART].

In addition, if there were additional budget, I propose the following:
• Repaint & re-level the pedestrian crosswalk pavement at the 3 areas of pedestrian intersection at Barrett & San Pablo. Add in handicap curbing. You can see in the photo here how worn-away the crosswalks are.
• Add pedestrian striping and reflectors to the crosswalk on Nevin Avenue crossing San Pablo to allow passage to the bus stop across the street. Currently, it is very unsafe to cross this intersection. I have to carry lights and wave them around to cross to catch the bus. • Consider pedestrian-level lighting along San Pablo Avenue connecting Barrett to at least Solano. Adding this would encourage pedestrians to walk underneath the freeway tunnel which is currently overgrown with weeds and trash. MacDonald Avenue has charming vintage-style lights and this neighborhood could also benefit from a similar style. Neighbors want to walk to Catahoula Coffee, El Toucan, The Factory Bar, and other shopping destinations in our neighborhood, but I wind up driving due to safety concerns. This improved lighting is in line with the Livable Corridors Form Based Code planning.

Thank you for considering these requests.

Sincerely,
Shelley Trask
461 Key Blvd, Richmond
Gmail - public comments - Open Forum.pdf

From: Eleanor Thompson
To: City Clerk Dept User
Subject: W.3.A ECIA GRANT
Date: Tuesday, June 21, 2022 12:57:21 PM
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To honorable Mayor and Richmond City Councilmembers:

I know that Social Progress Inc. does not write a perfect grant, but I feel that we should get funded sometime, we are never funded.

When we received funding it has been to come to the
City Council and ask for the left over fund.

I know that you can see on the funding list these are the same organizations that are always funded.

Social Progress Inc. grant was to get funds for two events in North Richmond.

One of the events
have been put on for 10 years, with Eleanor Thompson myself, paying most of the cost.

But I
found out from Lily from Chevron, that I should be applying for these funds, because they gave the funds to the city to help all the Organizations, but we have been cut short in North Richmond.

Only the ones who they have given the funds to in North Richmond in the past are the ones who continue to get funded.

I ask that the Council have them go back and give some of the funded to Social Progress Inc. For our events
Thank you,
Eleanor Thompson
CEO
Social Progress Inc.

From: Bruce Beyaert
To: Nat Bates; Tom Butt - external; Claudia Jimenez; Demnlus Johnson; Eduardo Martinez; Gayle McLaughlin; Melvin Willis; City Clerk Dept User Cc: Shasa Curl; Lina Velasco; Bruce Brubaker
Subject: Public Comment Agenda Item W10: Point Molate Open Space Date: Sunday, June 19, 2022 7:16:38 PM
Attachments: PtMolateOpenSpaceAcreage.pdf
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Mayor Butt and City Councilors,
Re June 21 City Council Agenda Item W10, TRAC, the Trails for Richmond Action Committee, supports soliciting proposals to manage for public use the almost 200 acres of the City’s Point Molate property designated for enjoyment as park and open space land.

The Reuse Plan adopted by the City Council in 1999 calls for 35 acres of shoreline park & open space lands plus 156 acres of hillside open space as shown on the attached figure and table. More than two decades later, the public remains locked out and unable to enjoy the scenic 1.5 miles of Point Molate shoreline (other than the small beach park) or the stunning vistas from the hillsides of the property. Moreover, French broom and other invasive non-native plants continue taking over the rare Coastal Prairie plant communities in the hills.

The past two decades have been marked by controversy, litigation and finger pointing over the approximately 80 acres (30%) of Point Molate acreage designated for economic development, including the Winehave Historic District. Please address the 70% of Point Molate acreage designated for park and open space uses, rather than waiting out another decade of litigation over the fate of the other 30% of the property. It is worth noting that East Bay Regional Park District’s Master Plan calls for a potential Regional Shoreline park at Point Molate.

Bruce
___________________
Bruce Beyaert, TRAC

Chair
[email protected]
tel. 510-235-2835
http://www.pointrichmond.com/baytrail/
http://www.ci.richmond.ca.us/109/TRAC
Photos: https://sfbaytrailinrichmond.shutterfly.com/pictures/5 .

From: [email protected]
To: Tom Butt - external; Gayle McLaughlin; Eduardo Martinez; Claudia Jimenez; [email protected]; Nat Bates; Demnlus Johnson; City Clerk Dept User
Subject: Sierra Club Letter re Agenda Item W.10.a Re Point Molate.

Date: Monday, June 20, 2022 11:30:08 AM
Attachments: 2022-06-20 Sierra Club to Richmond Re Point Molate.pdf This email originated from outside of the City's email system. Do not open links or attachments from untrusted sources.

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1 Sierra Club to Richmond
Re : Point Mo lat e Consen t Item W.10.a
202 2-06-20

2530 San Pablo Ave., Suite I, Berkeley, CA 94702
510-848-0800
www.sierraclub.org/san-francisco-bay
[email protected]

June 20, 2022

VIA EMAIL ONLY

Mayor Tom Butt &
Council Members Nat Bates, Claudia Jimenez, Delmnus Johnson, Eduardo Martinez, Gayle McLaughlin, Melvin Willis
450 Civic Center Plaza
Richmond, CA 94608

Re: Consent Calendar Item W.10.a Richmond City Council Meeting of June 21, 2022

Dear Mayor Butt and Council Members, Bates, Jimenez, Johnson, Martinez, McLaughlin, and Willis:

Sierra Club understands that this item has been removed from the Consent Calendar.

The Sierra Club urges that the City Council formally table this item and remove it from the agenda entirely.

This proposal comes from the Mayor, who has demonstrated a remarkable ability fiscally and legally imperil the City with actions regarding Point Molate. The proposal for an RFP to public agencies like the East Bay Regional Park District to take and operate 70% of Point Molate when the City faces multiple pending lawsuits is irrational and ill timed. It is yet another example of the mayor’s putting his own political intersts abvove those of the City and placing the City in legal and fiscal jeopardy. I will detail some of the reasons why this item should be rejected.

First, the proposed action could be construed as a violation of the Temporary Restraining Oder (TRO) which bars the City from taking any action that changes the terms and conditions of the Land Development Agreement or the other contractual rights in the Amended Settlement Agreement with Upstream and the Tribe. The TRO essentially freezes San Francisco Bay Chapter
Serving Alameda, Contra Costa, Marin, and San Francisco Counties

2 Sierra Club to Richmond
Re : Point Mo lat e Consen t Item W.10.a
202 2-06-20

actions regarding Point Molate until the Court hears the motion for Preliminary Injunction now set for hearing on August 4, 2022. Going forward with the Mayor’s proposal could be construed as an intentional violation of the TRO and subject the City to sanctions including sanctions for contempt for intentionally taking actions in violation of the TRO. Sanctions could be sought against individual city council members.

Second, the Mayor already tried to get the East Bay Regional Park District to do what he now proposes in the RFP. The Park District rejected this very proposal some two years ago. When the current development project for Point Molate was approved, the Mayor approached the East Bay Regional Park District and asked it to take over and operate the 70% open space so as to relieve this financial obligation from the developer and saddle the public with paying for open space that was supposed to be an amenity of the project.

The Park District rejected his proposal for a number of reasons. First, it would be saddled with operating open space that was not contiguous and not at designated as a public park. The “park” would be fragmented, and the Park District had no interest in operating a fragmented park system. Second, the Park District would be saddled with liability if the eucalyptus stands in the hills caught fire and burned down the private development. Unlike the situation where all of Point Molate was a park without 1400 to 2000 residential units and commercial development, the liability exposure for a real park would be minimal. In contrast the liability for a large wildfire that destroyed 1400 to 2000 residential units and associated commercial development not to speak of the probable deaths of hundreds of residents would be enormous. The Park District wisely refused to take on this liability.

For these and other reasons the Park District’s General Manager Robert Doyle rejected the Mayor’s proposal. There is no reason to think that the Park District has changed its mind under the current circumstances. This RFP is simply grandstanding on the park of the mayor when he knows neither the Park District nor any other public agency would even respond to the RFP.

Third, this proposal could open up the city to an inverse condemnation action by SunCal and also by Upstream and the Tribe. To begin with, if a public agency engages in land use actions that down zone property with the intent of acquiring the property for public use, then that can be considered a taking of the property . The issue is what is the intent of the city as derived from the actions it takes in regard to the property in question. One could argue that this proposal demonstrates the intent of the city to take all the property for public use.

3 Sierra Club to Richmond
Re : Point Mo lat e Consen t Item W.10.a
202 2-06-20

SunCal could argue that in taking away the open space around and within the development, the city has taken a private amenity of the development and has thus devalued their development because areas that would be considered as private open space that adds value to the residential units would be open to the public, lowering the value of the residential units. I am sure skillful SunCal lawyers would find a way to claim inverse condemnation as part of their existing lawsuit.

As for Upstream and the Tribe, they could argue that while there is a development project that currently has 70% open space, that should not preclude them from marketing the property for more development assuming the city could approve more development.

Butt’s proposal takes 70% of the property, a portion or all of which could be developed. (It does not matter that they may not want to do this; what matters is that they would argue this as a taking.)

The end result would be for the City to be faced with lawsuits in which SunCal and Upstream/Tribe would be asking for hundreds of millions of dollars, all because of yet another ill conceived idea that the Mayor has cooked up.

Finally, the Mayor may attempt to argue that this proposal is a way for the City to avoid having to pay the costs for the open space areas at Point Molate. He should have thought of this possibility when he hatched the Amended Settlement Agreement and foisted it on the taxpayers of Richmond. He is simply trying to make the public pay for his mistakes with yet another scheme that will put the City into fiscal and legal peril.

Sincerely yours,

Norman La Force,
Chair, Sierra Club San Francisco Bay Chapter
Legal Committee and Chair Sierra Club
East Bay Public Lands Committee
From: Jeannette Kortz
To: Gayle McLaughlin; Melvin Willis; claudia jimenez; richcityservant; Demnlus Johnson; Nat Bates; Tom Butt - external
Cc: City Clerk Dept User; Dave Aleshire; Shasa Curl
Subject: PUBLIC COMMENT - AGENDA ITEM W.10.a
Date: Tuesday, June 21, 2022 12:18:18 PM
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Dear City Council,

I am writing regarding Mayor Butt’s extraordinarily deceitful, illogical, and possibly legally damaging agenda item, W.10.a.

In this agenda item, Mayor Butt thinks the public will see this agenda item as a logical proposition — to have public land organizations take over what he calls expensive-to-manage uplands.

The real reason he is doing this is to represent himself as supporting a park at Point Molate that he has never supported and is not supporting now: this is another publicity stunt. The East Bay Regional Park District already turned down managing the land at Point Molate that can’t be developed for housing because it’s either too steep or too contaminated and a liability in a high fire severity zone with up to 2,000 homes. Trust for Public Land does not manage public lands, and the Mayor knows this, and why would Muir Land Trust take on liability that the East Bay Regional Park District is not willing to take on? The Mayor is also creating negativity among residents toward the East Bay Regional Park District for not “logically” taking over the uplands while he knows they have already rejected this plan and Trust for Public Land does not manage public land. The Mayor also knows that even if the East Bay Regional Park District had not already rejected this plan, it would be impossible at this time given the current development and contractual agreements the Mayor orchestrated and passed by the previous City Council.

Why does Mayor Butt spend so much of his time and energy on Point Molate when there are so many pressing issues in this City especially, the high cost of housing when there is absolutely no focus in his agenda on affordable housing in his high end shoreline developments plans or to build affordable/mixed use housing within the core of the City near public transportation, and other major survival issues the people of Richmond are enduring. By prioritizing complex high-end housing developments on the shoreline and not development for current Richmond residents, he is costing the city millions and prioritizing displacement.

Case in point, having the residents of Richmond pay for a 24/7 fire station and infrastructure for only 1400 high-end homes at Point Molate. This would have cost the taxpayers of Richmond millions of dollars a year and not provided housing the majority of Richmond residents can afford and not provided any significant amenities for Richmond residents yet cost the taxpayers millions.

The Mayor’s agenda proposal W.10.a. is a front and distraction from the mess he has made of Point Molate. It’s hard to believe a mayor of a city would do this, and his agenda item if passed would only serve to weaken the City’s position to clean up the legal mess Mayor Butt has made and provides SunCal and Jim Levine with advantages to sue and take more money from the City.

It's another in a long history of Tom Butt using his position as mayor to undermine the interests of current Richmond residents.

The distinction between council members who depend on cronyism and developers, and those who champion the interests of working families is obvious.

Thank you Melvin Willis, Gayle McLaughlin, Claudia Jimenez, Eduardo Martinez and Demlus Johnson for your fiscal responsibility voting against the $300 million bond and protecting the interests of current Richmond residents from millions a year in costs. I hope you will also table the legally and therefore fiscally dangerous Agenda item W.10.a. to protect Richmond’s current residents.

Thank you for your time.

Sincerely,
Jeanne Kortz
Richmond Resident

From: Robert Cheasty
To: City Clerk Dept User
Cc: Shirley Dean; Program Cesp; Norman La Force
Subject: Agenda Item W 1-a , the Point Molate item
Date: Tuesday, June 21, 2022 12:56:52 PM
Importance: High
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Mayor Tom Butt, Members of there Richmond City Council:

I write on behalf of Citizens for East Shore Parks to join with eh letter sent to you by the Sierra Club and by Shirley Dean objecting to having the City Council entertain any further schemes that would further mire the City of Richmond in litigation and exposure to claims by would be developers SunCal and By Upstream and The Guideville Band of the Pomo Tribe.

The consequences of the Mayor’s proposal would likely be argued to violate the TRO currently over further action on Point Molate, would raise the opportunity for an argument of inverse condemnation, would present further opportunity to argue breaches of contract and interference with contracts by the would be developers and tie up the city in more litigation.

Equally problematic is the amount of more wasted time this proposal would cost the City Attorney and City staff and possibly new hired attorneys and consultants to address the myriad of legal issues and concerns this proposal would entail.

It is understandable that Mayor Butt would not care about exposing the city to further litigation costs and further waste of staff and City Attorney time but hopefully the rest of the City Council will behave like adults and tell him to stop digging the hole even deeper.

I hope the City Council will table this matter and let it rest permanently while the real issues of Point Molate are sorted out in Court or settled.

Sincerely,
Robert C. Cheasty
Cheasty, Cheasty & Malek, LLP
1604 Solano Avenue
Berkeley, CA 94707
Tel.: 510-525-1000
Fax: 510-526-3672
[email protected]
On Jun 21, 2022, at 12:38 PM, Shirley Dean <[email protected]> wrote:

Robert,
Below is a copy of my email. See below for address to Richmond and the way they want the subject line to read.

Shirley

From: Shirley Dean <[email protected]
>
Sent: Tuesday, June 21, 2022 12:07 PM
To: '[email protected]' <[email protected]> Subject: PUBLIC COMMENT: Agenda Item W 10a, Disposition of Open Space at Pt Molate
Importance: High

Dear Mayor Butt and Council Members Bates, Jimenez, Johnson, Martinez, McLaughlin and Willis,

It is extremely puzzling why this proposal is on your agenda at this time for two basic reasons:

1). There is no supporting material as to why the Council should ask City Staff to prepare a request to be sent out widely by August 1
st 2022 soliciting proposals that
involve a detailed plan, including funding and a schedule, for the proposed management of open space in some undefined area or areas within Point Molate.by September 15, 2022. Are these open space areas based on the plan which was submitted by SunCal, or on some other proposal? Without any definite information stating what should be included in such a directive, how can you expect the City Staff to proceed and the public to react?

2). As unclear as what is being requested is, the more important matter is the legal implications it may involve. We all know that whatever happens at Point Molate is currently the subject of multiple legal battles, none of which will be resolved easily or soon. While bold statements are being made about why all of this occurred, it is absolutely clear from the public record that the most recent City Council action to reject moving forward the proposal by SunCal to develop various commercial and residential uses within Point Molate, was based on information provided by the City Attorney regarding SunCal’s failure to provide the basic information required of any developer by the City of Richmond. SunCal’s failure to meet these requirements was listed by the Richmond City Attorney for all to see and understand. This information indicated that moving forward with SunCal’s proposed plan would present a financial risk to the City and its residents. A majority of the City Council chose in open meeting to take the prudent action of saying “No.” With such issues in front of them, nothing less than such an action would seem to be malfeasance of duty.

Not accepting the City’s decision, the developer, instead of working to correct the findings of non-compliance, took the matter to court and requested AND RECEIVED a Temporary Restraining Order (TRO) which was scheduled for hearing on July 6 by the Superior Court in Martinez. I understand that the July 6 legal hearing has now been rescheduled for August 4. It is logical to draw the conclusion that approval of Item W 10 a well may be a violation of the TRO and could possibly expand the legal entanglements that the City faces. Therefore, it does not seem reasonable to approve Item W 10 a under these circumstances.

Thank you,
Shirley Dean
From: Shirley Dean
To: City Clerk Dept User
Subject: PUBLIC COMMENT: Agenda Item W 10a, Disposition of Open Space at Pt Molate Date: Tuesday, June 21, 2022 12:06:47 PM
Importance: High
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Dear Mayor Butt and Council Members Bates, Jimenez, Johnson, Martinez, McLaughlin and Willis,

It is extremely puzzling why this proposal is on your agenda at this time for two basic reasons:

1). There is no supporting material as to why the Council should ask City Staff to prepare a request to be sent out widely by August 1
st 2022 soliciting proposals that involve a detailed plan, including funding and a schedule, for the proposed management of open space in some undefined area or areas within Point Molate.by September 15, 2022. Are these open space areas based on the plan which was submitted by SunCal, or on some other proposal? Without any definite information stating what should be included in such a directive, how can you expect the City Staff to proceed and the public to react?

Not accepting the City’s decision, the developer, instead of working to correct the findings of non- compliance, took the matter to court and requested AND RECEIVED a Temporary Restraining Order (TRO) which was scheduled for hearing on July 6 by the Superior Court in Martinez. I understand that the July 6 legal hearing has now been rescheduled for August 4. It is logical to draw the conclusion that approval of Item W 10 a well may be a violation of the TRO and could possibly expand the legal entanglements that the City faces. Therefore, it does not seem reasonable to approve Item W 10 a under these circumstances.

Thank you,
Shirley Dean

From: Cordell Hindler
To: City Clerk Dept User
Subject: Public Comments- X.1 Budget Session
Date: Friday, June 17, 2022 1:08:43 PM
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Good Evening Mayor Butt, Council Members and Staff
I am asking that the council to Adopt the Budget as Presented by the City Manager's Office and Finance Department Sincerely
Cordell
From: Cordell Hindler
To: City Clerk Dept User
Subject: Public Comments- Z.1
Date: Friday, June 17, 2022 1:14:23 PM
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Good Evening Mayor Butt, Councilmembers and Staff
I Appreciate the Hard work that our Employees do for the City of Richmond Sincerely
Cordell
From: Cordell Hindler
To: City Clerk Dept User
Subject: Public Comments- Z.4
Date: Friday, June 17, 2022 1:16:44 PM
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Good EVENING Mayor Butt, Councilmembers and Staff,
I am Requesting that the City Manager released the Class and Comp study as directed Sincerely
Cordell
From: Cordell Hindler
To: City Clerk Dept User
Subject: Public Comments- Z.5
Date: Friday, June 17, 2022 1:29:35 PM
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Good evening Mayor Butt, Council Members and Staff
I am in Favor of Street Sweeping
But I do oppose the idea of having cars being towed away People need Their Cars to get to Work
sincerely
Cordell
1 From: Savitri Khalsa <[email protected]>
Sent: Monday, June 20, 2022 1:34 PM
To: Shasa Curl; Tom Butt - external; Nat Bates; Louie Tirona; Joe Leach; Lina Velasco; Michelle Milam; City Clerk Dept User; Pamela Christian
Subject: Public comments agenda item #AA.1; June 21, 2022 RCC Attachments: RCC.AA.1.COMMENTS.pdf
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Dear Respected City Leadership Team,
Please consider the following regarding the proposed Council action. I've attached a pdf version of this email for the meeting minutes.

To: Richmond CIty Leadership and Council Members
Re: June 21, 2022 Council Meeting

New Business Item AA.1



 That city staff by directed to create two contracts managed by the  Richmond Community Foundation
 – that outline a collaborative approach between:

 a) Safe Organized Spaces Richmond (SOS),


 b) the Richmond Rotary Club Housing First Initiative, and 

 c) Various related partners (GRIP, Rebuilding Together East Bay North, Collaborizing, Tacos  and Roses, Faith In Action, NeighborAid, La Familia Family Services, and Rising Sun Center For Opportunity)




 Then, bring back the contracts to the City Council for approval 

 before the August break.

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2 Dear Council Members & Leadership Team,

Please do not support Item AA.1.

The spending of nearly $2.4 million dollars now is unwise for several reasons.

The first reason it is unwise to spend this money now is that the city is in the process of developing an overall homelessness strategic plan.

The City of Richmond is paying $100,000 to an expert consultant to develop a citywide Homelessness Strategic Plan. Please wait for the Strategic Plan before spending more money on homelessness programs that may or may not be effective. The timeline is shown below.

Presently, the consultants are assessing existing systems and services.

The second reason it is unwise to spend this money now is that the city will be managing the Castro Encampment Resolution Project beginning in August. Richmond won $4.8 million, which city officials plan to use to clear the 100+ camp of people living off Castro Street in cars, RVs and trailers.

The city has placed on bid a Castro Encampment Resolution Project [CERP} Project Manager who will serve under the direction of the city’s new housing director who will be paid up to $235,000 over 18 months to provide services to address the immediate crisis of unsheltered homelessness in the Castro encampment and to support people living in the encampment on to a path to safe and stable housing. This results in the sustainable restoration of public spaces to their intended uses while safeguarding the needs of unhoused people seeking shelter.

Seattle’s Homelessness Plan may inspire you to invest more carefully.

Richmond’s Homelessness Plan will:
• Develop measurable goals and strategies with clear timelines that lead to population-level reductions and bring indoors 75% of the unsheltered population by 2024. • Engage and empower the community to be part of the solution. • Develop a shared vision interdepartmentally and citywide. • Develop strategies for interdepartmental coordination and accountability. • Identify funding and resources needed to carry out specific strategies. • Discuss how progress on goals identified will be measured.

The third reason it is unwise to spend this money now is that last year’s emergency approaches did not provide measurable, quantifiable successes.

3 Last year, in July 2021, Councilor McLaughlin said that a $983,975 sole-source contract for SOS was justified because the city had to act “fast” to deal with an “immediate need” at the unsanctioned sites of Rydin Road and Castro Street encampments.

She noted that vehicles were to be thinned out ASAP in order to meet the 12/2021 end date for these encampments (as per council direction) and stated that SOS was working to relocate individuals within encampments to scattered sites and a proposed transitional village. This did not happen.

Additionally, she said SOS needed the contract so that it could increase its staff from 23 employees to 60 employees in order to work to clear the unsanctioned encampments. SOS instead has not grown from 23 employees and on average is only 11 to 19 employees. So, this did not happen.

There are yet “safe parking” sites; many “scattered sites” at churches; or a “transitional village” for SOS employees to work at. So, this did not happen.

Councilor McLaughlin further stated that SOS works day and night to deal with problematic behaviors at the encampments and therefore helps the Richmond Police Force so they do not have to go to encampments. Yet, the level of calls for Service to Richmond Police at just one encampment, Rydin Road continues to rise. Notice the number of visits noted in the table below. SOS did not keep the Richmond Police Department (and the Fire Department) from repeatedly visiting to resolve issues.

While SOS did good work throughout the year employing unhoused individuals to deliver showers and complete community cleanups, it has not met minimal goals of helping to empty out the Rydin and Castro Encampments as stated by Councilor McLauglin. SOS is not able to identify how many individuals they outreach to—because mostly they are picking up trash and providing showers to 25-30 people at Rydin Road.

An additional 2022-2023 SOS contract for $1,114,000 is not warranted at this time.

Whether the city groups the contracts into groups of 2, 3, 4, or 100, it does not hide the fact that Item AA.1 appears to be a payout to a variety of favored nonprofits from city funds. Paying the Richmond Community Foundation $218,000 (a 10% fee) to manage these contracts makes little sense. The table and charts below show the proposed payouts for your consideration. Notice that the most successful program, the Rotary Club Rental Housing program is only 15.7% of the entire proposed unhoused funding. Please do not approve Item AA.1.

Thank you for your consideration.

Sincerely,
Savitri Khalsa
Richmond Resident

4 Fund Distribution Dollar Amount Percentage of Funds
SOS $1,114,000 49.5%
Other NonProfits $415,000 18.5%
Rotary Club (1-yr Rentals) $352,000 15.7%
Richmond Com. Foundation Management Fee $218,100 9.7%
Rydin Road Operations $150,000 6.7%
Totals $2,249,100 100%
5 From: Sam Bacal-Graves
To: City Clerk Dept User
Subject: Public Comments Agenda Item # AA.2
Date: Monday, June 20, 2022 9:51:56 AM
Attachments: image001.png
RRH Fee Letter re 22-23 Fee (00217110xC4B98).pdf
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Hello,

Please see attached for a comment letter on Item AA.2 of the June 21, 2022 Richmond City Council Meeting – Resolution Establishing the Fiscal Year 2022-23 Residential Rental Housing Fee. Please let me know if you have any questions.

Thank you,

Sam Bacal-Graves

THOMAS LAW GROUP
455 Capitol Mall, Ste 801, Sacramento, CA 95814
One Kaiser Plaza, Suite 875, Oakland, CA 94612
Phone: 916.287.9294
Fax: 916.737.5858
[email protected]

www.thomaslaw.com
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TINA A. THOMAS

AMY R. HIGUERA
CHRISTOPHER J. BUTCHER
ANDREW M. SKANCHY
Senior Counsel

SAMUEL D. BACAL-GRAVES

455 CAPITOL MALL, SUITE 801
SACRAMENTO, CA 95814
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Telephone: (916) 287-9292 Facsimile: (916) 737-5858
www.thomaslaw.com
NICHOLAS S. AVDIS
Of Counsel

June 20, 2022

Mayor Tom Butt
and Members of the City Council
City of Richmond
440 Civic Center Plaza
Richmond, CA 94804

Re: City of Richmond Rent Board Residential Rental Housing Fee

Dear Mayor Butt and Members of the City Council:

We represent AMG & Associates, LLC (AMG). We are submitting this letter on the proposed Fiscal Year 2022-23 Budget & Rental Housing Fee Study (Nexus Study), to address significant legal and equitable concerns regarding the Residential Rental Housing Fee (RRH Fee) recommended by the Rent Board.

AMG is the largest developer of affordable housing in the City of Richmond (City). AMG has a long and valued relationship with the City and the City Council, and hopes to develop more affordable housing for Richmond’s residents in the future.

However, as discussed in more detail below, imposition of the RRH Fee as applied to governmentally subsidized affordable housing developments is duplicative of existing regulation.

The RRH Ordinance does not impact these units or their tenants and does not establish any benefits or burdens not already established by existing state requirements and agreements. Yet the Rent Board has recommended that the City Council approve an RRH Fee that assesses these affordable housing units a substantial fee for operation of the RRH Ordinance. The RRH Fee as currently proposed by the Board for the City Council’s consideration is unnecessary and unfair.

Further, as proposed by the Rent Board the RRH Fee constitutes an unconstitutional exaction.

We, therefore, respectfully ask that the City Council to exercise its discretion to address these equitable and legal issues by denying the RRH Fee as currently structured and proposed by the Rent Board.

Specifically, we request that the City Council determine that the RRH Fee should not be imposed on governmentally subsidized affordable housing units. Rent Board staff has taken the position that the City and Rent Board are legally restrained from making such a determination, but as we explain below, that is not the case. The Rent Board’s existing regulations demonstrate that the Rent Board could exempt governmentally subsidized affordable housing projects. Moreover, the

Mayor Tom Butt and Member of the City Council
City of Richmond
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City Council’s authority over the RRH Fee itself grants the City Council authority to determine the type of units that should be assessed the RRH Fee as well as the appropriate amount of the fee.

We look forward to working with the City to resolve this fee issue in an amicable and productive manner.

I. Residential Rental Housing Fee
In 2016 voters in the City passed, by initiative, the RRH Ordinance, adding Chapter 11.100 to the Richmond City Code (RCC). The RRH Ordinance contains two primary programs. First, it establishes rent control for non-exempt properties. (RCC, § 11.100.070.) Second, it prohibits evictions except for limited, articulated reasons (“just cause”), such as nonpayment of rent. (RCC, § 11.100.050.) To administer and enforce these provisions (the Program), the RRH Ordinance created the Richmond Rent Board. (RCC, § 11.100.060.) And to finance the Rent Board’s “reasonable and necessary expenses” in administering and enforcing the Program, the RRH Ordinance created the RRH Fee. (RCC, § 11.100.060(l)(1).) The RRH Fee is charged to landlords annually, to be paid with business license fees. (Ibid.) The RRH Ordinance draws a distinction between the Rent Board budget and the RRH Fee. With respect to the Rent Board budget, the Rent Board itself has unilateral approval authority. (RCC, §

11.100.060(n).) However, with respect to the RRH Fee, the Rent Board’s role is merely to make a recommendation – it is the City Council that holds the approval authority. (RCC, §

11.100.060(l)(1).) There is no requirement that the City Council assess the RRH Fee at a level to fund all of the activities the Rent Board seeks to pursue in its budget, as the RRH Ordinance expressly empowers the Rent Board is “to request and receive funding when and if necessary from any available source for its reasonable and necessary expenses.” (RCC, § 11.100.060(l).) As such, the City Council has clear authority, and an obligation, to independently consider the manner in which it assesses the RRH Fee.

II. Legal Obligations of Governmentally Subsidized Affordable Housing Governmentally subsidized affordable housing is highly regulated. Such developments are only eligible for low-income housing credits if the owner has entered into and record an extended low-income housing commitment. (26 U.S.C. § 42(h)(6).) This commitment must prohibit evictions, other than for good cause (just cause eviction protection), as well as rent increases, except as allowed by law. (Ibid.)
Essentially, the RRH Ordinance extends the protections already applicable to governmentally subsidized affordable housing to all other units in the City. To residents of those other units this certainly provides appreciable benefits, but tenants of governmentally subsidized affordable housing already enjoy these protections, with or without the RRH Ordinance. Further, the Public Housing Authority must confirm that every project based voucher unit (PCV) complies with

Mayor Tom Butt and Member of the City Council
City of Richmond
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established housing quality standards (HQS) and that the owner has complied with the terms of the assisted leases and the Housing Assistance Payments Contract (HAP) before it will approve any rent increase.

Additionally, unlike residents of other units, tenants of governmentally subsidized housing projects are informed of these rights under federal law. Each lease is accompanied by a Resident Notification Letter, Low Income Housing Tax Credit Lease Rider re: Good Cause for Eviction, and Notice – Good Cause Eviction Protection.

In short, the RRH Program serves an important function for many tenants. But for governmentally subsidized affordable housing projects it is duplicative of existing regulation. It adds no benefit for tenants of such units, nor any additional regulation. What it does do, under the RRH Fee recommended by the Rent Board, is charge an unnecessary fee for services such tenants do not benefit from and for regulation duplicative of what such units are already required to comply with under federal law. Such an imposition is unfair, contrary to the RRH Ordinance’s stated intent that landlords be able to retain a “fair and reasonable return on their investment” (RCC, § 11.100.010), and discourages continued development of much-needed affordable housing within the City.

III. Regulatory Fees
In addition to being unnecessary with respect to governmentally subsidized affordable housing, the recommended RRH Fee is an unconstitutional exaction.

In Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866 (Sinclair Paint), the California Supreme Court recognized a distinction between “development fees, exacted in return for permits or other government privileges” from “regulatory fees, imposed under the police power.” (Id. at p. 873.)
“Sinclair Paint rejected the argument that the state had no authority to impose the fees, stating that the case law ‘clearly indicates that the police power is broad enough to include mandatory remedial measures to mitigate the past, present, or future adverse impact of the fee payer's operations, at least where, as here, the measure requires a causal connection or nexus between the product and its adverse effects.” (Schmeer v. County of Los Angeles (2013) (Schmeer) [original emphasis].) Following and in response to Sinclair Paint, and to close perceived loopholes in Propositions 13 and 218, California Voters approved of Proposition 26 (Prop 26) in 2010. (Schmeer, supra, 213 Cal.App.4th at p. 1322.) Section 1 of Prop 26, sets forth the findings and declarations of purpose of the initiative. It laments the escalation of taxes which had evaded voter approval, notwithstanding Propositions 13 and 218. (Prop 26, § 1(a)-(d).) Specifically, it recognized:

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“the recent phenomenon whereby the Legislature and local governments have disguised new taxes as ‘fees’ in order to extract even more revenue from California taxpayers without having to abide by these constitutional voting requirements. Fees couched as ‘regulatory’ but which exceed the reasonable costs of actual regulation or are simply imposed to raise revenue for a new program and are not part of any licensing or permitting program are actually taxes and should be subject to the limitations applicable to the imposition of taxes.”
(Prop. 26, § 1(e).)
To address this, Prop 26 enshrined in the California Constitution the principle that a “levy, charge, or exaction of any kind” is a tax, requiring voter approval 1, unless it falls within a
specific exception. (Cal Const, Art. XIII C § 3(b); see also Schmeer, supra, 213 Cal.App.4th at p. 1326.) Thus, under the California Constitution as amended by Prop 26, a regulatory fee is only not a tax if it meets the following standard:
“A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.”
(Cal Const, Art. XIII C § 1(e)(3).)
As discussed in Schmeer, supra, (2013) 213 Cal.App.4th at p. 1328 the Legislative Analyst’s Office’s analysis of Prop 26 included in the relevant Voter Information Guide (LAO Analysis) 2 provides guidance as to the types of charges that are deemed to be taxes under Prop 26. Figure 3 of the LAO Analysis identifies types of hypothetical regulatory fees, and uses for fee funds, that could either in part or in whole, be considered taxes under Prop 26. Such hypothetical programs that constitute a tax under Prop 26 include an Oil Recycling Fee used to fund in part “Public information and education programs” and “Research and demonstration projects” as well as fee on alcohol retailers that would fund “Merchant education to reduce public nuisance problems associated with alcohol.”
A pair of cases decided shortly after passage of Prop 26 illustrate the difference between valid and invalid regulatory fees. Morning Star Co. v. Board of Equalization (2011) 201 Cal.App.4th 737 (Morning Star) considered whether a charge assessed on businesses that “use, generate,

1 Though the RRH Ordinance was originally approved by voters by initiative, neither the initial level of the RRH Fee nor its increases have been approved by voters, and therefore it cannot be justified as a properly enacted tax. (Cal Const, Art XIII C § 2(b), (d).)

2 Prop 26 Legislative Analyst’s Office analysis available at:
https://lao.ca.gov/ballot/2010/26_11_2010.aspx

Mayor Tom Butt and Member of the City Council
City of Richmond
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store, or conduct activities in California related to hazardous materials” was a regulatory fee or a tax. (Id. at p. 742.) It found that the charge “is not regulatory because it does not seek to regulate the Company's use, generation or storage of hazardous material but to raise money for the control of hazardous material generally.” (Id. at p. 755.) These funds paid for “a wide range of governmental
https://advance.lexis.com/search/?pdmfid=1000516&crid=b2b3c9eb-8a4b-42d0-b17c- e91e76055768&pdsearchterms=201+Cal.App.4th+737&pdstartin=hlct%3A1%3A1&pdcaseshlctselectedb yuser=false&pdtypeofsearch=searchboxclick&pdsearchtype=SearchBox&pdqttype=and&pdpsf=oop%3A 1%3A1&pdquerytemplateid=&ecomp=4gsnk&earg=pdpsf&prid=dc70be11-b9af-4c2f-8ac5- 7acbdc51dbbeservices and programs related to hazardous waste control” unrelated to the regulated activity, such as “mediation, cleanup, disposal and control of hazardous materials generally, rather than for the regulation of the [fee] payers' business activities in using, generating or storing hazardous materials.” (Ibid.)
Morning Star contrasted these broad uses of the hazardous waste charge with the charge at issue in CFBF, supra, 51 Cal.4th 421. Therein, the Supreme Court upheld, as a valid regulatory fee, a charge imposed by a statute that “carefully set[] out that the fees imposed shall relate to costs linked to issuing, monitoring, enforcing and administering licenses and permits, and list[ed] the recoverable costs in some detail.” (Morning Star, supra, 201 Cal.App.4th at p. 752 quoting CFBF, supra, 51 Cal.4th at pp 438-439.) The CFBF fee also did not collect “more than the administrative ‘costs incurred’ in carrying out the functions authorized in [the authorizing statute].” (CFBF, supra, 51 Cal.4th at p. 439.) Thus, the CFBF Court upheld the fee against a facial challenge to its constitutionality. (See also Griffith v. City of Santa Cruz (2012) 207 Cal.App.4th 982, 997 [“The fees are imposed to cover the cost of performing inspections. They are, therefore, expressly exempted from the Proposition 26 definition of ‘tax.’”].) Thus, these two cases passed shortly after Prop 26 establish the relevant limitations on a regulatory fee. Where a charge does not only fund administrative costs of regulation, but rather seeks to raise money for more general governmental functions it is a tax. However, where the fee’s uses are limited to issuing, monitoring, enforcing, and administering licenses and permits it is a legitimate regulatory fee.

Nonetheless, in CFBF the Supreme Court also acknowledged that while the charge at issue in that case was not facially an unconstitutional tax for the reasons stated above, it could still be unconstitutional as applied if the fees were “so disproportionate that they are unreasonable” in light of the “extent and costs of the [agency]’s regulatory ‘activity’.” (CFBF, supra, 51 Cal.4th at p. 440.) Because the relevant information was not in the record, the Court did not rule on that issue. (Id. at p. 441-442.) As such, where a facially valid fee is applied in a disproportionate manner may still be unconstitutional as applied.

Additionally, courts have long recognized that a regulatory fee cannot be established to “pay general revenue to the local government.” (Pennell v. City of San Jose (1986) 42 Cal.3d 365, 375.) Thus, “[a]n excessive fee that is used to generate general revenue becomes a tax.”

Mayor Tom Butt and Member of the City Council
City of Richmond
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(California Farm Bureau Federation v. State Water Resources Control Bd. (2011) 51 Cal.4th 421, 438 (CFBF).)
Lastly, in contrast to many instances in which a local government must only provide substantial evidence for its position, under Prop 26, “[t]he local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax.” (Cal Const, Art. XIII C § 1(e) [emphasis added].) Thus, a charge is considered to be a tax unless the government has affirmatively and adequately shown otherwise.

IV. The RRH Fee is not a Valid a Non-Regulatory Fee
Prop 26 does not prohibit a local government from charging for government services or other specific benefits or privileges. (Cal. Const. Art. XIII C § 1(e)(1)-(2).) However, to do so, the service or benefit must be granted “directly to the payor” and the benefit “not provided to those not charged.” (Ibid.) These are sometimes referred to as “user fees” or “service fees” and are exempt from Prop 26. Here, unlike all of the seven other jurisdictions surveyed in the Nexus Study that have instituted a similar program, the RRH Fee proposed by the Rent Board does not permit landlords to pass any portion of the RRH Fee through to tenants. (Nexus Study, p. 26.) As such, the proposed RRH Fee is not charged to beneficiaries and cannot be justified on this basis.

This choice is not mandated by the RCC or the RRH Ordinance. Rather, the City previously considered this, and explicitly rejected the possibility of allowing any portion of the RRH Fee to be passed through to tenants. (2017 Nexus Study, p. 6.) Nor is the RRH Fee a development fee, as it is assessed on all landlords annually, and not “with approval of a development for the purpose of defraying… the cost of public facilities related to the development project.” (Gov. Code, § 66000(b).)
Thus, the RRH Fee is not charged to those benefited and is not a development fee. It is therefore not exempt from prop 26. If the RRH Fee is justifiable, it must be on the basis of its regulatory nature. However, as discussed below, the proposed RRH Fee does not satisfy the criteria required of a regulatory fee. It is therefore a tax, requiring a public vote under Prop 26.

V. The RRH is not a Valid Regulatory Fee
a. License or Permit
First, the proposed RRH Fee cannot be a valid regulatory fee by definition because it is not connected to any permitting or licensing scheme. The regulatory fee exception only applies to “a charge… for issuing licenses and permits” meeting the specified criteria. (Cal Const, Art. XIII C § 1(e)(3).) The RRH Fee is paid at the same time as the fee is owed for a business license. (RCC, § 11.100.060(l)(1).) However, the RRH Fee cannot constitute an applicable license or permit fee because the City’s business license scheme exists “solely to raise revenue for municipal purposes and is not intended for the purpose of regulation” (RCC, § 7.04.010) and thus is clearly not

Mayor Tom Butt and Member of the City Council
City of Richmond
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regulatory. The RRH Fee has no connection to any other license or permit under the RCC. As such, because it lacks a connection to a regulatory permit or license scheme, the RRH Fee cannot be a regulatory fee.
b. Activities Funded by the RRH Fee
Additionally, the activities the Rent Board proposes to fund with their recommended RRH Fee are not regulatory in nature. The Nexus Study divides the Program costs into three categories: the Program Layer, which 55% of funds go towards, the Just Cause for Eviction Layer, which 20% of the funds go towards, and the Rent Control Layer, which 25% of the funds go towards. (Nexus Study, p. 21.)
As to the Program Layer, many of its functions are facially irrelevant to regulation of landlords.

For instance, it funds “Legal defense of the Rent Ordinance and agency policies.” This is a general governmental function that would need to be performed whether or not the RRH Ordinance engaged in any particular regulation. Indeed, the Nexus Study acknowledges that services provided by the City Attorney, whose job includes legal defense of the City Code, is a general function funded by the City’s general fund. (Nexus Study, p. 18.) Likewise, the functions such as “Interdepartmental coordination,” and “Website maintenance” are general functions of a local government that have no particular relationship to the RRH Ordinance or Program or to regulation.

Similarly, both the Just Cause for Eviction Layer and the Rent Control Layer include “Public education and outreach” which is stated to include counseling, and “Legal services referrals to community services agencies.” While these may provide valuable community services, the Rent Board has not recommended funding them with legitimate tax revenue, such as from its general fund. Nor has it recommended funding them by assessing a fee to tenants, the beneficiaries of these services. The Rent Board has express authority to seek funding from “any available source” (RCC, § 11.100.060(l)), but yet recommends funding these functions with a charge imposed on landlords. As such, the proposed RRH Fee can only be justified if these activities are legitimately regulatory in nature. However, landlord conduct is entirely irrelevant to these functions, and thus activities serve no regulatory function at all.

The 2022-23 Program budget as described in the Nexus Study is likewise replete with non- regulatory activities the Rent Board recommends to be funded by the RRH Fee. For instance, $200,000 per year goes towards outside “Community Services Agency Contracts” to fund legal services clinics and to provide legal advice for tenants facing unlawful detainer actions

3. (Nexus

3 We do not address herein whether a local government can in general constitutionally compel persons to fund the legal fees of opponents in litigation, as this seems to fund, or in what circumstances that might be permissible, but merely note that such a use is not regulatory in nature. Nonetheless, litigation is a form of protected speech under the First Amendment. (See Bill Johnson's Rests. v. NLRB (1983) 461 U.S. 731, 741 [“the right of access to the courts is an

Mayor Tom Butt and Member of the City Council
City of Richmond
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Study, p. 14.) The budget also pays for tuition reimbursement for City employees “consistent with the City’s personnel policies” which obviously is a function for general revenue, not the purportedly regulatory fee. Like the public education mentioned above, the budget includes amounts for “promotion on social media” and promotional mailers. Other costs in the budget include a variety of “office expenses” such as print materials, a lease of printers, scanners, and other office supplies. (Nexus Study, pp. 15-16.)
In sum, many recommended uses of the RRH Fee likely provide community benefits. However, it is not the community funding them, nor the beneficiaries, but landlords in particular. As such, they can only be upheld if regulatory in nature. And, courts have repeatedly rejected that uses such as those above are regulatory in nature.

For instance, in the factually similar case, Weisblat v. City of San Diego (2009) 176 Cal.App.4th 1022 (Weisblat), a city imposed through its municipal code a charge on all rental housing. The Court found it to be a tax and not a fee in part because:
“the primary, if not the sole, purpose of the levy is to recover the costs associated with the administration of the Business Tax and RUBT [Rental Unit Business Tax] programs, including the cost of collecting and processing the annual Business Tax applications and RUBT payments, the printing costs and postage fees, and the cost of computer systems and overhead, as shown by the declaration of Robbin Kulek, the City's treasury operations division manager. It is also undisputed that the levy is not exacted in return for permits or other governmental privileges.”
(Weisblat, supra, 176 Cal.App.4th at p. 1042.)
Here too, the Nexus Study clearly shows that the recommended RRH Fee would be exacted to fund general governmental operations, and not to pay for any regulation or licensing of landlords.

What does constitute a legitimately regulatory fee in the context of rental housing can be seen in Pennell v. City of San Jose (1986) 42 Cal.3d 365, 375 (Pennell). Therein, the Supreme Court upheld a fee assessed as part of a rent control ordinance as a legitimate regulatory fee. The $3.75 annual fee assessed against landlords paid for “[t]he costs of providing and administering the San Jose Rental Dispute Mediation and Arbitration Hearing Process,” nothing more. (Id. at p. 374, fn.

10.)

aspect of the First Amendment right to petition the Government for redress of grievances”]) and the Supreme Court has also recognized constitutional limits on the government’s ability to compel speech. (See, e.g., Keller v. State Bar of Cal. (1990) 496 U.S. 1 [State Bar could not use bar dues to fund ideological speech opposed by payors].)

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City of Richmond
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The contrast is plain. As discussed above, the recommended RRH Fee (assessed at well over an order of magnitude higher than the Pennell fee, even accounting for inflation) funds a multitude of governmental functions far beyond legitimate regulation, and entirely divorced from the conduct of landlords. It is in fact a vehicle to generate revenue to fund the policy ambitions of the Rent Board. Sound as those ambitions may be, they are in large part not regulatory.

As such, as was the case in Morning Star and Weisblat, in the ways described above the recommended RRH Fee does not seek to regulate the conduct of purportedly regulated parties, but seeks merely to raise money for the general policy ambitions of the Rent Board. It therefore cannot be justified as a regulatory fee.4
c. Consistency with the RRH Ordinance
In addition to the activities funded by the recommended RRH Fee not being regulatory, they are not even activities that the RRH Ordinance authorizes the funds to be used for. For instance, the Just Cause for Eviction Layer identifies “Administration of Relocation Ordinance” and “Administration of eviction-related complaints” as functions being funded for that aspect of the Program. However, the Relocation Ordinance is a separate ordinance and chapter of the RCC. (RCC, Ch. 11.102.) Further, the RRH Ordinance contains no mechanism for any administrative adjudication or other proceedings of the Rent Board with respect to the just cause for eviction protections. (RCC, § 11.100.050.) The extent of their involvement is that the landlord must file a tenancy termination notice with them prior to serving it upon the tenant. (RCC, §

11.100.060(s)(1).) No provision establishes a process for a tenant to file, or the Rent Board administer or adjudicate, any complaint related to such notices. Thus, these are not functions authorized by the RRH Ordinance.

The RRH Ordinance makes clear that it creates the Rent Board to “administer and enforce [the RRH] Chapter” of the RCC. (RCC, § 11.100.060(e)(15).) The Rent Board cannot unilaterally expand its own functions in violation of the voters’ intent in passing the RRH Ordinance. And

4 We note that the RRH Fee does in some respects fund legitimately regulatory activity (e.g., “Rent Registration and tracking of the Maximum Allowable Rent”; “Processing of rent increase notices and development of templates”). (Nexus Study, p. 21.) Presumably a reformed RRH Fee that was limited to funding activities that are regulatory in nature would be valid, and the remaining functions could still be funded by other sources. The RRH Ordinance expressly allows the Rent Board to “request and receive funding… from any available source.” (RCC, §

11.100.060(l).) However, because the Nexus Study does not divide costs based on the different functions, it is currently impossible to know what extent of the RRH Fee’s funded activities are legitimate regulatory activity. Even if the Rent Board prepared a new Nexus Study and proposed a new RRH Fee for City Council consideration to address the current RRH Fee’s Prop 26 violations, the City Council is still vested with the discretion to decide whether the RRH Fee should be assessed against subsidized affordable housing projects and, if so, the appropriate amount to be assessed.

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even if that were permissible, nothing authorizes the RRH Fee to be used to fund functions of the Rent Board beyond what is described in the RRH Ordinance. The RRH Fee is not a blank check for the Rent Board to seek to fund whatever programs it likes. These expanded uses are beyond the scope of what the RRH Ordinance authorizes, and to the extent that it funds such activities, the recommended RRH Fee is impermissible.

VI. The RRH Fee Lacks a Legally Required Nexus
In addition to limits on nature of the funded activities, regulatory fees may only be imposed “for the reasonable regulatory costs” of the regulatory program. (Cal Const, Art. XIII C § 1(e)(3).) This requires a purported regulatory fee to “satisfy both the requirement that it be fixed in an amount that is ‘no more than necessary to cover the reasonable costs of the governmental activity,’ and the requirement that ‘the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity.’” (City of San Buenaventura v. United Water Conservation Dist. (2017) 3 Cal.5th 1191, 1214 [original emphasis].)
a. Amount of the Reasonable Costs of the Governmental Activity “The aggregate cost inquiry considers if the challenged fee generates more revenue than necessary to support the regulatory program supported by the fee.” (American Coatings Assn., Inc. v. State Air Resources Bd. (2021) 62 Cal.App.5th 1111, 1126 (American Coatings).) “[P]ermissible fees must be related to the overall cost of the governmental regulation.” (CFBF, supra, 51 Cal.4th at p. 438.)
The Nexus Study on its face shows that the recommended RRH Fee is more than necessary to support the Program. As it repeatedly shows, since the RRH Fee’s inception, fee revenues have outstripped expended funds each and every year by hundreds of thousands of dollars per year. (Nexus Study, pp. 9, 19.) Yet nothing explains what has happened to these excess funds raised by the RRH Fee. An appendix to the Nexus Study which shows a 10-year financial projection, presumes that the Program has had no reserves at all until the end of 2021, and even then it shows the entirety of reserves being from the 2020-21 fiscal year. (Nexus Study, Appendix B, p.

32.) That the surplus is not being used for program activities is confirmed by Appendix A as well, which shows consistent surpluses of hundreds of thousands of dollars without any commensurate increase in the Program’s operating reserve. (Nexus Study, Appendix A, p. 31.) Either these missing surplus funds are in fact still in Program reserves, which are proposed to be more than 15% of this year’s budget, in which case clearly the Program has no need for additional reserves (or a need for most of its proposed funding for this year), or these funds have been deposited into the City’s general fund, paying for general governmental operations, which would by definition be an improper use of regulatory fees. (CFBF, supra, 51 Cal.4th at p. 438 [“What a fee cannot do is exceed the reasonable cost of regulation with the generated surplus used for general revenue collection. An excessive fee that is used to generate general revenue

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becomes a tax.”].) Because they are raised by a purportedly regulatory fee, these excess funds must be used for regulatory activities in some way, for instance by offsetting costs in the following year’s budget. Yet, by once more recommending an increase the RRH Fee and total expected revenue to be raised by it, while even raising additional reserves, it is apparent that the Rent Board is not using the excess funds for the Program at all.

Thus, the Nexus Study itself establishes that the recommended RRH Fee “generates more revenue than necessary to support the regulatory program supported by the fee.” (American Coatings, supra, 62 Cal.App.5th at p. 1126.) As such, “even if the [recommended RRH Fee] did constitute a regulatory fee, it would be invalid because it surpasses the costs of the regulatory program it purportedly supports.” (Northwest Energetic Services, LLC v. California Franchise Tax Bd. (2008) 159 Cal.App.4th 841, 859.)
b. Manner in which the Costs are Allocated
A regulatory fee must be “reasonable and substantially proportionate to all costs related to the regulation.” (Northern California Water Assn. v. State Water Resources Control Bd. (2018) 20 Cal.App.5th 1204, 1221.) In other words, this inquiry asks “whether any class of fee payers is shouldering too large a portion of the associated regulatory costs.” (California Building Industry Assn. v. State Water Resources Control Bd. (2018) 4 Cal.5th 1032, 1052.) Here, even if the recommended RRH Fee’s uses and the total revenue generated were reasonable, the Nexus Study contains no attempt to justify the manner in which the RRH Fee and costs are recommended to be allocated. As such, it fails this test as a matter of law.

As noted above, a percentage of costs are allocated to each of the three layers. However, there is no justification for these respective percentages in the Nexus Study. Nothing whatsoever addresses, for instance, why the essentially identical functions of the Just Cause for Eviction Layer and the Rent Control Layer have differing costs, nor how or why the Program Layer requires more than half of the total recommended RRH Fee proceeds. Instead, there is a single sentence: “Such allocations correspond with the amount of resources spent administering each component of the program.” (Nexus Study, pp. 20-21) There is no analysis or other support for this claim or the reasonableness of this allocation and its relationship to the purported regulatory activity. The Nexus Study does not even fully articulate the functions attributable to each layer.

The functions discussed above are referred to as being “for illustrative purposes only.” (Nexus Study, p. 21.)
Further, different unit-types are also assessed different rates. Units subject to both the Rent Control and Just Cause for Eviction Layers (“fully covered” units) pay $226 per unit. However, those subject just to the latter (“partially covered” units) pay $127 per unit. (Nexus Study, p. 22.) This correlates with fully covered units paying all three layers, and partially covered units paying the Program Layer and the Just Cause for Eviction Layer. (Nexus Study, p. 21.)

Mayor Tom Butt and Member of the City Council
City of Richmond
June 20, 2022

Page 12 of 14 ends

Again, the Nexus Study offers no justification for the existence or manner of such division. In fact, it shows that the City did not always consider it to be reasonable. In the 2017-2018 fiscal year all units were charged the same. (Nexus Study, p. 25.) The following year, the subset of what are now partially covered units that are governmentally subsidized rental units paid roughly one quarter of the fee for fully covered units. (Ibid.) The recent substantial increase in the fee for partially covered units that are governmentally subsidized is not justified.

This is not a situation in which there may be some defect in the apportionment method or in the analysis justifying the apportionment – it is a case in which there is no such analysis or justification whatsoever. As a matter of law, no nexus is established in such a case. (See, e.g., Bixel Associates v. City of Los Angeles (1989) 216 Cal.App.3d 1208, 1219 [method of fee apportionment failed the reasonable relationship test where percentage used to determine fee amount was not justified].)
VII. Rent Board Exemptions
AMG has previously asked the Rent Board to exempt governmentally subsidized units from the RRH Fee. The Rent Board has not granted that exemption, suggesting that they lack authority to do this. However, this is contrary to their regulations. The Rent Board has interpreted the RRH Ordinance to grant them discretion in determining applicable exemptions in developing the Rent Board’s regulations.

The Rent Board is empowered to establish regulations furthering the purpose of the RRH Ordinance. (RCC, § 11.100.060(f).) The Rent Board’s regulations provide that rental units in hotels, hospitals, etc. as well as units for which there is a temporary tenancy are entirely exempt from both rent control and just cause for eviction protections. (Rent Board Regulations, Rule 201(A)-(C).) However, as set forth in the RRH Ordinance, the exemption for hotels, hospitals, etc. (RCC, § 11.100.030(d)(1)-(2)), like the exemption for a small class of subsidized units and units exempt pursuant to the Costa-Hawkins Rental Housing Act (RCC, § 11.100.030(d)(3)-(4)), are included as exemptions to the definition of “Controlled Rental Units.” (RCC, § 11.100.030.) The term “Controlled Rental Units” is not relevant to the RRH Ordinance’s just cause for eviction protections. (RCC, § 11.100.050(a).) As such, the Rent Board has necessarily exercised its discretion to extend some, but not all, of the rent control exemptions to also provide for exemptions from the just cause for eviction protections.

Likewise, the RRH Ordinance only grants temporary tenancies a partial exemption – from the just cause eviction requirements – for eviction based on expiration of the agreed tenancy duration. (RCC, §§ 11.100.040, 11.100.050(a)(8).) However, the Rent Board unilaterally granted such units an exemption from the remainder of the just cause for eviction protections as well, and also from the entirety of the rent control provisions. (Rent Board Regulations, Rule 201(C).) Thus, the Rent Board has necessarily concluded that it has the discretion to expand the scope of units that are exempt from the RRH Ordinance under its powers and duties.

Mayor Tom Butt and Member of the City Council
City of Richmond
June 20, 2022

Page 13 of 14 ends

Further, insofar as the Rent Board is empowered to grant new exemptions, nothing restricts their authority in that respect only to the promulgation of new regulations. (See RCC, §

11.100.060(e)(4), (15) [provisions relating to the Rent Board’s authority to issue orders].) Given that the Rent Board has determined that it has the power to establish exemptions not expressly set forth in the RRH Ordinance, and in consideration of the analysis in this letter, we believe the Rent Board should have, as our client requested, exempted subsidized affordable housing projects from the requirement to pay the partial RRH Fee relating to the RRH Ordinance’s just cause for eviction protections. Unfortunately, instead of addressing our clients’ request, the Rent Board has submitted a RRH Fee to the City Council for consideration that, as discussed above, (1) assesses a significant and unnecessary fee on subsidized affordable housing projects, and (2) is unconstitutional.

VIII. City Council Authority
The City Council has authority to determine that the RRH Fee should not be assessed against affordable housing projects. While the Rent Board has unilateral authority to approve the its own budget (RCC, § 11.100.060(n)), they only make a “recommendation… to the City Council” as to the RRH Fee. (RCC, § 11.100.060(l)(1).) It is the City Council that determines, votes on, and approves the RRH Fee – not the Rent Board. (Ibid.) Based on equitable considerations and due to the unconstitutional nature of the RRH Fee as currently proposed by the Rent Board, AMG respectfully requests that the City Council deny the RRH Fee and direct City staff to amend the proposed fee to exclude subsidized affordable housing projects.

The RRH Ordinance has no requirement that the RRH Fee be assessed against all units. The City Council has express authority to independently determine the amount of the RRH Fee. (RCC, §

11.100.060(l)(1).) This necessarily includes a determination of what units are required to pay the fee and in what amounts. While the RRH Ordinance does acknowledge that “[a]ll landlords” must pay a business license fee, it makes no similar statement with respect to the RRH Fee. (Ibid.) And in the past the City has in fact approved a substantial reduction in the fees assessed to governmentally subsidized units. (Nexus Study, p. 25 [showing fees for such units in FY 2018- 19 were half what they were for other partially covered units].) Nor does the RRH Ordinance suggest or require that the RRH Fee be the sole funding source for the Rent Board. Under the RRH Ordinance, the Rent Board is “empowered to request and receive funding when and if necessary from any available source for its reasonable and necessary expenses.” (RCC, § 11.100.060(l).) As such, the voters made clear that there is no requirement that the City Council approve the RRH Fee at a level to fund the entirety of the Rent Board’s proposed budget.

IX. Conclusion
In sum, the Rent Board has recommended that the City Council approve an unconstitutional RRH Fee, for the numerous reasons discussed above. AMG raised the issues addressed in this Mayor Tom Butt and Member of the City Council
City of Richmond
June 20, 2022

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letter directly to the Rent Board previously and is disappointed that the Rent Board elected not to address these significant equitable and legal issues before presenting the RRH Fee to the City Council for consideration.

We reiterate, that AMG values its relationship with the City. However, the RRH Fee recommended by the Rent Board is unreasonable, unjust, and unconstitutional. The City Council can and should determine that affordable housing units pay $0 in RRH Fees, as is well within its authority.

Sincerely,

THOMAS LAW GROUP
Chr
istopher J. Butcher
On behalf of AMG & Associates, LLC
CC: D
ave Aleshire, Interim City Attorney

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Meeting Date
Date Range 06/21/2022 - 06/22/2022
Meeting Date
Agenda Item
Name
Email
Comment
Position
Status
City Council
6/21/2022 4:30 PM Ban the Drilling of
Oil and Gas in
Contra Costa
County
Shoshana
Wechsler
[email protected] re W.2a: I am
writing on behalf of
Sunower Alliance,
which has been
campaigning for
the last two years
to ban oil and gas
drilling in Contra
Costa County. I
want to applaud
you for this
resolution, which I
hope will set a
strong precedent
for other cities in
Contra Costa in
passing solidarity
resolutions with
the East County
municipalities—
For Appro
- - S el ec t a M eet i n g D a t e - -

6/22/22, 8:36 AM Home - eSCRIBE
https://richmond.escribemeetings.com/Pages/reportcenter.aspx 2/3 Antioch,
Brentwood and
Oakley, whose
residents are
directly impacted
by oil and gas
production. Yet
again, Richmond is
taking a strong,
unequivocal stand
for public health
and speaking truth
to the fossil fuel
industry--and to
Contra Costa
County. Thank you!
6/21/2022 4:30 PM Expand The Terms
of Appropriated
ARPA Flex Funds
for Rydin Road
Residents
Lea Murray collaborising@gmai
l.com
I support agenda
item w.2.b to
expand the terms
of appropriated
ARPA Flex Funs for
Rydin Road
Residents. This
money has already
been appropriated
and does not add
additional burden
to the City's
Budget. Accessing
these funds will
help the residents
transition from
Rydin Road to
suitable housing.

The residents have
ben waiting for 6
months for funds
that were
promised to them.

If you care about
For Appro
6/22/22, 8:36 AM Home - eSCRIBE
https://richmond.escribemeetings.com/Pages/reportcenter.aspx 3/3 the unhoused you
will do what is
necessary to help
them move and
help themselves.
6/21/2022 4:30 PM Collaborative
approach between
Safe Organized
Spaces Richmond
(SOS), the
Richmond Rotary
Club Housing First
Initiative, and
various related
partners to assist
the unhoused.

Lea Murray collaborising@gmai
l.com
It is my hope that
this item is
removed from the
calendar. This is
not a collaborative
project and it is not
an equitable
proposal. I have
spoken with the
people that have
proposed this
"partnership" and
they have agreed
that this should be
pulled from the
agenda.

Against Appro
6/21/2022 4:30 PM Adopt Fiscal Year
(FY) 2022-2023
Proposed
Operating Budget
and FY 2022-2023
through 2026-2027
Capital
Improvement Plan.

Lea Murray collaborising@gmai
l.com
I support
reparations. It is
long over due.

For Appro

Richmond City CouncilJune 21, 2022

Richmond City Council
June 21, 2022