Susana Alcala Wood, City Attorney Jorge Oseguera, City Auditor Mindy Cuppy, City Clerk Howard Chan, City Manager John Colville, City Treasurer Law and Legislation Committee Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00536 March 29, 2022 Discussion Item 01
Title: Community Benefits Ordinance Framework and Outreach
Location: Citywide
Recommendation: 1) Provide direction to staff on the proposed framework for a community benefits ordinance; and 2) direct staff to bring back to the Law and Legislation Committee a community benefits ordinance for consideration.
Contact: Ellen Sullivan, Senior Development Project Manager, (916) 808-5758, [email protected], Office of Innovation and Economic Development; Leslie Fritzsche, Community Investment Manager, (916) 808-5450, [email protected], Office of Innovation and Economic Development
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resenter: Ellen Sullivan, Senior Development Project Manager, (916) 808-5758, [email protected], Office of Innovation and Economic Development; Leslie Fritzsche, Community Investment Manager, (916) 808-5450, [email protected], Office of Innovation and Economic Development
A
ttachments:
1-Description/Analysis
2-Aggie Square Settlement Agreement with Sacramento Investment Without Displacement 3-Inclusive Economic Development Investment Guidelines
File ID: 2022-00536 Discussion Item 01
March 29, 2022
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City of Sacramento
Description/Analysis
Issue Detail: On May 12, 2021, the City of Sacramento, the Regents of the University of California, and Sacramento Investment Without Displacement (SacWID) entered into a settlement agreement regarding the Aggie Square Project (“Settlement Agreement”)(included as Attachment 2) The Settlement Agreement included a provision requiring the City to endeavor to bring forward a Community Benefits Ordinance (CBO) for City Council consideration by January 1, 2022. The parties have since agreed to extend that deadline to the end of June, 2022.
Staff is working on developing the CBO and is requesting direction from the Law and Legislation Committee regarding the proposed framework.
Policy Considerations: A CBO is consistent with City Council’s adopted “Policy to Take Comprehensive, Intentional Actions to Increase and Diversify our Economic Growth in an Inclusive and Equitable Manner that Focuses on Neighborhoods and Their Unique Needs” approved by Council on July 31, 2018. In addition, a CBO would align with the City’s Inclusive Economic Development Guidelines approved by Council in 2019 (included as Attachment 3).
Economic Impacts: Not applicable.
Environmental Considerations: Not applicable.
Sustainability: None.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Staff is requesting feedback and direction from the Law and Legislation Committee on the framework for a proposed CBO.
Financial Considerations: None.
Local Business Enterprise (LBE): Not applicable.
Background: As a component of the Settlement Agreement, the City is required to work with SacIWD, to develop the CBO. Once the CBO is drafted, it is to be considered for adoption by City Council. The CBO would require community benefits agreements (CBA) for certain projects receiving economic subsidies within the meaning of Government Code section 53083.
The Settlement Agreement included provisions regarding what the CBO should contain:
File ID: 2022-00536 Discussion Item 01
March 29, 2022
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City of Sacramento
(A) Identification of criteria for determining which projects receiving economic subsidies from the City will require CBAs;
(B) Provisions for community enforcement of the CBAs.
(C) A transparent accountability process that includes a Public Oversight Committee that is guided by an inclusive, comprehensive, community-driven process; and (D) Provisions in the CBAs for long term small/local business protection, anti-displacement strategies, and production of affordable housing to be developed with SaclWD, affected residents, and other relevant community partners.
Utilizing the provisions listed above, staff has created the following framework to facilitate the drafting of the Community Benefits Ordinance:
Sacramento Investment Without Displacement (SacIWD)
City staff met with representatives of SacIWD on February 25, 2022, to present the draft framework and solicit their feedback. SacIWD representatives indicated that they are currently conducting community outreach and plan to propose language for a proposed ordinance to share with City staff in early April.
City staff will continue to collaborate with SacWID and other organizations to gather community input to answer the questions listed in the framework to develop the draft CBO.
Trigger
• What type and size of projects will be required to create a community benefit agreement?
Benefits
• What benefits could be included in the community benefit agreement? Oversight
• What is the accountability process? Who would be on the oversight committee and what methods would ensure enforcement?
Metrics
• What metrics should be included to ensure the Community Benefits Agreement is effective?
Inclusive Economic Development Investment Funding Guidelines – September 2019
INCLUSIVE ECONOMIC DEVELOPMENT INVESTMENT FUNDING GUIDELINES
1. DEFINITIONS
Inclusive Economic Development Investments or Investments: Investments that expand economic opportunities that benefit underserved and underrepresented communities, thereby reducing social, racial, health, and economic disparities in these communities.
Through public and private actions that are responsive to community need and builds on resident assets, these investments foster small business growth, increase quality jobs, stabilizes people in safe and affordable homes, prepare resident of all ages to fill those jobs, improve neighborhoods, and increase household wealth.
Equity: Fair and just treatment, access, opportunities, and advancement for all people, while identifying and eliminating barriers that have prevented the full participation of some groups.
Racial and gender equity: The development of policies, practices, and strategic investments to reverse racial disparity trends, eliminate institutional racism, and ensure that outcomes and opportunities for all people are no longer predictable by race and gender.
Priority neighborhoods: Neighborhoods already having a federal, state, or local designation (could include city Priority Neighborhood, federal Promise Zone, federal Opportunity Zone, Health Need Assessment Focus Communities, etc.) or neighborhoods experiencing a cost of living that outpaces the incomes of the residents, lagging commercial and residential investment, increased poverty and gentrification pressures; limited access to services and amenities, substantial change due to major development and/or public infrastructure improvements and local business displacement.
2. PURPOSE
The purpose of Inclusive Economic Development Investments is to foster economic and community development and job growth within the City of Sacramento that create opportunities for all of Sacramento’s residents, while at the same time prioritizing strategic investments for people of color, low-income individuals, and underinvested communities. The Fund will use city dollars to make Inclusive Economic Development Investments in projects and programs that advance inclusive economic development and reduce inequities by improving the health, stability and economic security of residents and neighborhoods; fostering business and job growth; increasing household wealth; encouraging productivity; and supporting people, places, and actions that promote economic growth throughout the City’s diverse communities.
3. OBJECTIVES
Investments must seek to advance economic growth and development by achieving the following objectives:
Inclusive Economic Development Investment Funding Guidelines – September 2019
A. Catalyze Inclusive Economic Development: Investments must help to further develop and/or grow targeted industry clusters, tradeable sectors and university-industry innovation districts. Investments must catalyze economic development and community revitalization in targeted geographic areas that increase the economic security and mobility of vulnerable families and workers.
B. Stimulate Job Growth: Investments must help retain and grow job opportunities by cultivating the entrepreneurial ecosystem, attracting new businesses that create a range of quality jobs, and supporting the growth and advancement of existing businesses. Investments must also support hiring and retaining of low income and historically underserved and underrepresented residents.
C. Create Experiential and Educational Opportunities: Investments must expand access to experiential and educational opportunities that lead to career pathways that lead to the middle class. Investments must also cultivate homegrown talent through strong cradle-to-career pipelines that increase economic security and access to job opportunities for all residents, with a focus on those communities and residents that have been historically underserved and underrepresented.
D. Create Vibrant, healthy, opportunity-rich neighborhoods: With the goal of reducing racial, social, health, and economic disparities, Investments must increase the supply and access to safe and affordable housing, transit and transportation options, promote clean and safe neighborhoods, create positive youth development experiences, and remove barriers to future economic development, particularly in distressed and disadvantaged neighborhoods that have not benefited from previous economic growth.
Investments must ensure all communities have access to services and amenities that support healthy and vibrant neighborhoods.
E. Increase Revenue and other Social and Economic Benefits to the City:
Investments must directly or indirectly increase City revenue and/or generate other significant public benefits (as outlined in Section 5F - Public Benefit) that provide a return on investment to the City.
4. GUIDING PRINCIPLES
The guiding principles are based on equity-focused practices that guide all Investments.
A. Neighborhoods and Places – Make all neighborhoods healthy and safe communities of full opportunity. Unlock opportunities for residents to
Inclusive Economic Development Investment Funding Guidelines – September 2019
access options that offer affordable, safe and stable housing, amenities, culture and services, and maximize quality of life. Proactively support: (1) communities of color and (2) underserved residents and businesses within “priority neighborhoods”.
B. Community Engagement – Build community ownership, voice and capacity.
Tap into community-rooted organizations and neighborhood groups to develop community driven solutions that advance equitable and inclusive development priorities, policies and practices over the long term. Projects and programs will be vetted through the impacted neighborhood, community, and/or stakeholder(s) to ensure that they meet the needs of the community.
C. People and Jobs – Expand employment opportunities. Concentrate workforce development programs, increase talent pipelines, address skills gaps, and expand employment opportunities at all levels and for all ages including youth and young adults.
D. Business and Innovation – Advance equity, diversity, and inclusion throughout Sacramento’s business community. Expand ownership opportunities at all stages and ensure new development and growth happens in a way that benefits the entire community.
E. Integrate a focus on people, place and the economy. Understand that the City of Sacramento—and the neighborhoods where low-income people of color live— need strategies that are embedded in a broader metropolitan economy, and act to create more connections and linkages between their underserved residents and the local and regional economy. These strategies:
• Are place-based and people-oriented;
• Leverage business and financing models that are equity driven; and • Identify resources and innovate new ways of working with markets and investors to achieve inclusive and equitable solutions.
F. Embrace equity as an economic imperative. Engage private sector businesses to identify long-term, bottom-line benefits of racial and economic equity in their business models.
5. MINIMUM ELIGIBILITY CRITERIA
The City may consider making an Investment in projects and programs that have a significant economic impact and meet the following criteria:
A. Equity and Inclusion: Demonstrate strategies that ensure all Sacramento’s residents, particularly for people of color, low-income individuals and underinvested communities have the ability to participate, prosper, and reach
Inclusive Economic Development Investment Funding Guidelines – September 2019
their full potential. Investments will provide goals and measurable outcomes to reduce disparities and build equity in the City’s diverse communities. All applications and subsequent agreements must include a statement of how the project or program reduces inequities and creates opportunities for Sacramento’s underserved and underrepresented communities. As appropriate, agreements should support capacity - bui
lding by connecting existing
community needs and activities to new resources and opportunities.
B. Mutual Benefits and Consistency with City policy and goals: All Investments must be consistent with City policies and goals for achieving an inclusive and equitable community . Both the City’s and prospective partners' goals and the mutual benefits should be openly and clearly stated in all agreements.
C. Employment: Create and/or retain jobs with defined salary ranges based on Sacramento area and industry income standards or within priority career pathways as identified in the City’s Inclusive Economic Development Strategy and Action Plan or policies. Priority should be placed on creating job opportunities for underserved residents and in underserved neighborhoods.
D. Tax Revenue Generation: Provide significant property and/or sales tax revenues to the City. This amount will take into consideration the relative size of the project or program and its contribution to the City and community.
E. Leverage: Investment should be leveraged by other private or public funds and innovative partnerships. Projects and programs must demonstrate long-term financial sustainability.
F. Public Benefit: Investment s must provide a public benefit for residents and businesses in Sacramento. All applications and subsequent agreements must include a statement of public benefits. Benefits should distinguish between one- time/upfront cost reductions and ongoing reduction to everyday expenses to the targeted groups. Programs and projects will address an array of social and economic benefits that improve quality of life, including , but not limited to :
• Mobility
• Housing supply, affordability , quality and integration • Workforce development
• Employment opportunities for disadvantaged populations • Business diversification
• High-wa ge industry growth
• Sustainability (including air, water, and environmental quality ; energy efficiency ; clean energy, etc.)
Inclusive Economic Development Investment Funding Guidelines – September 2019
• Public health and wellness
• Public safety and emergency response
• Arts and cultur al amenities
• Youth and education
6. APPROVAL PROCEDURES
A. City Staff and Investment Committee Vetting: Investment applications will be screened by City staff and vetted with the Investment Committee. Investments of Measure U funds will be forwarded to the Measure U Citizens Advisory Committee.
B. Measure U Advisory Committee Recommendation: Pursuant to City Resolution 2018-0393, the Measure U Advisory Committee will review, report, and make non- binding recommendations on how to allocate resouces to support inclusive community economic development. Such expenditures, not subject to City Council approval, shall be forwarded to the City Manager with a recommendation.
7. INVESTMENT MEASUREMENT AND EVALUATION
Evaluation of performance measures is critical to gauge the effectiveness of the Investments. Each investment agreement must contain a set of performance measures.
The City will require tracking and reporting of data during project/program implementation.
8. EVAULATION OF GUIDELINES AND INVESTMENTS
Staff will provide regular updates to the Investment Committee and Measure U Advisory Committee on the status of the City’s Investment portfolio. Each year the City will conduct an annual assessment of the guidelines to identify areas for updating, refinement, and/or adjustments.
9. PROGRAMS AND GUIDELINES
The Investments will support two programs:
a. Neighborhood and Community Investments
b. Economic Development Investments
Each program will have program guidelines to determine and identify eligible projects and programs. Program guidelines could include an overview of the program fund, additional eligibility requirements, identification of what can and cannot be funded, how much funding is available, how projects and programs are selected, and metric and reporting requirements.