Agenda packet — San Carlos City Council, June 26, 2023 (part 4 of 6)

APPENDIX A

CITY OF SAN CARLOS TEAMSTERS UNIT
Hourly Wage Schedule
Effective on the first day of the first full pay period after September 1, 2021 or the first day of the first full pay period beginning after this MOU is adopted by the City Council and signed by the parties, whichever is later,
Step 1 Step 2 Step 3 Step 4 Step 5
Mechanic $38.5930 $40.5227 $42.5486 $44.6763 $46.9100
Maintenance Worker $32.5126 $34.1382 $35.8450 $37.6372 $39.5193 Senior Maintenance Worker $38.7451 $40.6823 $42.7164 $44.8522 $47.0951 Effective 09/12/2022
Step 1 Step 2 Step 3 Step 4 Step 5
Mechanic $39.7508 $41.7384 $43.8250 $46.0165 $48.3173
Maintenance Worker $33.4879 $35.1624 $36.9204 $38.7663 $40.7049 Senior Maintenance Worker $39.9075 $41.9028 $43.9979 $46.1977 $48.5080 Senior Mechanic (effective 7/1/23) $40.4208 $42.4418 $44.5639 $46.7921 $49.1317 *Actual salary may be at or below this maximum at the discretion of the City Manager.

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CITY OF SAN CARLOS

APPENDIX A

CONFIDENTIAL GROUP

WAGE SCHEDULE
Effective July 5, 2021
Classification Step 1 Step 2 Step 3 Step 4 Step 5*
Hourly
Administrative Assistant $34.58 $36.31 $38.13 $40.03 $42.04 Management Analyst $44.04 $46.25 $48.55 $50.99 $53.53
Monthly
Executive Assistant $7,074 $7,428 $7,800 $8,190 $8,601
Human Resources Management Analyst $7,945 $8,345 $8,761 $9,200 $9,659 *Actual salary may be at or below this maximum at the discretion of the City Manager Effective July 4, 2022
Classification Step 1 Step 2 Step 3 Step 4 Step 5*
Hourly
Accountant (effective 10/24/22) $43.71 $45.89 $48.19 $50.60 $53.13 Administrative Assistant $35.62 $37.40 $39.27 $41.23 $43.30 Management Analyst $45.36 $47.63 $50.01 $52.51 $55.14
Monthly
Deputy City Clerk (effective 7/1/23) $6,906 $7,251 $7,614 $7,994 $8,394 Executive Assistant $7,286 $7,651 $8,034 $8,435 $8,859
Human Resources Management Analyst $8,184 $8,595 $9,024 $9,476 $9,949 Legal Secretary (effective 7/1/23) $7,003 $7,353 $7,721 $8,107 $8,512 *Actual salary may be at or below this maximum at the discretion of the City Manager

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CITY OF SAN CARLOS

MANAGEMENT GROUP
Monthly Salary Schedule

APPENDIX A
Effective July 4, 2022
Classification Step 1 Step 2 Step 3 Step 4 Step 5*
Administrative Services Director $15,715 $16,502 $17,329 $18,194 $19,106 Assistant City Manager $16,738 $17,576 $18,455 $19,376 $20,346 Assistant Building Official (effective 7/1/23) $11,151 $11,709 $12,294 $12,909 $13,554 Building Official $11,904 $12,500 $13,123 $13,781 $14,470 City Clerk/Director of Community Relations $10,777 $11,316 $11,883 $12,475 $13,099 City Engineer $14,086 $14,790 $15,531 $16,306 $17,122
Community Development Director $15,392 $16,162 $16,970 $17,817 $18,709 Economic Development & Housing Manager $11,691 $12,276 $12,888 $13,534 $14,209 Economic Development Coordinator $9,491 $9,964 $10,462 $10,985 $11,535 Financial Services Manager $12,430 $13,051 $13,704 $14,388 $15,109 Human Resources Manager $12,292 $12,906 $13,550 $14,227 $14,940 Information Technology Manager $12,037 $12,639 $13,269 $13,934 $14,630 Parks & Recreation Director $15,817 $16,607 $17,438 $18,308 $19,225 Planning Manager $12,500 $13,117 $13,765 $14,445 $15,160 Principal Engineer (effective 7/1/23) $12,343 $12,959 $13,607 $14,288 $15,003 Principal Planner $11,498 $12,072 $12,677 $13,311 $13,978 Public Works Director $17,096 $17,953 $18,850 $19,792 $20,782 Public Works Superintendent $11,952 $12,549 $13,176 $13,835 $14,527 Senior Accountant $9,537 $10,015 $10,516 $11,040 $11,592 Senior Building Inspector $9,174 $9,633 $10,115 $10,620 $11,151 Senior Management Analyst $9,196 $9,655 $10,138 $10,646 $11,177 Senior Planner $9,656 $10,138 $10,646 $11,178 $11,737
Senior Traffic Engineer $12,343 $12,959 $13,607 $14,288 $15,003 *Actual salary may be at or below this maximum at the discretion of the City Manager

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Deny Claim of Gerald Alchimisti.

RECOMMENDATION:

Staff recommends that the City Council deny the claim of Gerald Alchimisti as recommended by the Sedgwick representative.

FISCAL IMPLICATIONS:

None for this action.

BACKGROUND:

This item is coming before the Council to act on the claim submitted by Gerald Alchimisti. Staff recommends that the City Council deny the claim based on Sedgwick’s guidance.

The Tort Claims Act. California Government Code Sections 900, seq., mandates that all claims for money or damages against a public entity must be presented in writing to the public entity prior to filing suit. Generally, claims concerning personal injury, wrongful death, damage to personal property, or damage to crops must be presented to the public within six (6) months of the accrual of the claim. All other claims, principally claims on contracts and damage to real property, are subject to a one-year statute of limitations for presentation of the tort claim. Once a tort claim is received by the public entity, the entity has forty-five (45) days to act on the claim. A claim can be settled or rejected. If no action is taken within 45 days, the claim is deemed rejected by operation of law on the last day.

Claims Processing in San Carlos. When the City receives a claim, the claim is immediately forwarded to claims examiners at Sedgwick for investigation. After Sedgwick investigates the claim, Sedgwick provides a recommendation to the City on the handling of the claim.

About Sedgwick. Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. In July 2019, Sedgwick acquired York Risk Services Group (“York”). York was originally hired through the Pooled Liability Assurance Network Joint Powers Authority (“PLAN JPA”), and Sedgwick will continue claims administration services to provide claims administration services to the City. The City Council approved the City’s participation in the PLAN JPA (previously known as the Association of Bay Area Government Pooled Liability Assurance Network or “ABAG PLAN”) on November 27, 2017 and designated the Administrative Services Director and Senior Management Analyst as primary and alternate PLAN JPA Board members.

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ANALYSIS:

Claimant Gerald Alchimisti filed a claim against the City for property damages to his vehicle when he ran over a pothole on the road. On March 22, 2023, the claimant was traveling on Industrial Road when he hit a pothole between 301 and 445 Industrial Road. Claimant alleges that small rectangles of asphalt in the road were removed, leaving a sharp-edged pothole which punctured his tire and damaged the rim of his vehicle. Gerald Alchimisti is claiming $1,000 for the damages.

Public Works staff filled the pothole in question on October 22, 2022, and the City did not have prior complaints about the condition of the road or the pothole at the loss location. Government code section 835 provides immunities when there was no known prior notice to the City of a “hazardous condition”. Therefore, the City does not have any liability. For that reason, Sedgwick recommends formal rejection of Gerald Alchimisti’s claim.

The Council’s rejection of this claim does not prevent City staff or the staff of Sedgwick from continuing to work with the claimant to resolve the dispute.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Deny claim of Gerald Alchimisti; or

2. Do not deny claim of Gerald Alchimisti; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Alchimisti Claim Form

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Appropriating $380,000 in Fiscal Year (FY) 2022- 23 and $430,000 in FY 2023-24 from the Wastewater Fund to Establish the Silicon Valley Clean Water (SVCW) Debt Reserve Service Fund to Satisfy the SVCW Debt Service Coverage Ratio Requirements of the State Revolving Fund (SRF) Loan Program.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution appropriating $380,000 in FY 2022- 23 and $430,000 in FY 2023-24 from the Wastewater Fund to establish the Silicon Valley Clean Water (SVCW) Debt Reserve Service Fund to satisfy the SVCW debt service coverage ratio requirements of the State Revolving Fund (SRF) Loan Program.

FISCAL IMPLICATIONS:

This action will require an additional appropriation of $380,000 in FY 2022-23 and $430,000 in FY 2023-24 from the Wastewater (Sewer) Fund. There is sufficient funding to meet this request.

BACKGROUND:

The City is a member of the SVCW (formerly the South Bayside System Authority). SVCW was formed in 1975 among the cities of San Carlos, Belmont, Redwood City, and the West Bay Sanitation District to operate a wastewater treatment facility. The cost of operating and maintaining the facility is divided in proportion to the volume of sewage generated by each member entity.

On June 12, 2023, the SVCW Board met and approved the establishment of a Debt Service Reserve. The details and purpose of which are noted below:

SVCW DEBT SERVICE RESERVE FUND
The Debt Service Reserve Fund shall be established to allow SVCW to demonstrate its revenues are sufficient to meet the debt service coverage test requirements of its State Revolving Fund Loans. On an annual basis during the budget process, SVCW shall determine the funding level required to meet the debt service coverage test referenced in the applicable loan documents.

Funding for the Debt Service Reserve Fund shall be contributed by each member agency in an amount equal to their percentage of capacity ownership in SVCW. Contributions shall be placed into a designated investment account and managed according to Commission-adopted investment policies. All interest derived from the fund balance shall be credited to this fund.

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Disbursements from this fund shall be restricted to State Revolving Fund loan matters. Upon satisfaction of coverage test requirements, each Member may direct its allocated portion of this reserve be left in place, returned to the Member, or used towards future debt service payments.

ANALYSIS:

While the City’s revenues are sufficient to meet the needs, the SVCW State Revolving Fund (SRF) coverage calculation is measured at the SVCW financial statement level. As such, the SVCW Debt Service Fund will require initial funding from all the member agencies in the amount of $2.5 million in FY 2022-23 and an additional $3 million in FY 2023-24.

Since the calculation of reserve needed is based on the percentage of capacity ownership in SVCW, the City of San Carlos portion will be $380,000 in FY 2022-23 and $430,000 in FY 2023-

24. Payment into this fund will be credited to the City’s share of the net position of SVCW’s assets.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution appropriating $380,000 in FY 2022-23 and $430,000 in FY 2023-24 from the Wastewater Fund to establish the SVCW Debt Reserve Service Fund to satisfy the SVCW debt service coverage ratio requirements of the SRF Loan Program; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. SVCW Resolution 23-20

3. SVCW Reserve Fund Policy

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS APPROPRIATING $380,000 IN FISCAL YEAR (FY) 2022-23 AND $430,000 IN FY 2023-24

FROM THE WASTEWATER FUND TO ESTABLISH THE SILICON VALLEY CLEAN WATER (SVCW) DEBT RESERVE SERVICE FUND TO SATISFY THE SVCW DEBT SERVICE

COVERAGE RATIO REQUIREMENTS OF THE STATE REVOLVING FUND (SRF) LOAN PROGRAM.

WHEREAS, the City is a member of the SVCW (formerly the South Bayside System Authority) which SVCW was formed in 1975 between the cities of San Carlos, Belmont, Redwood City, and the West Bay Sanitation District to operate a wastewater treatment facility; and WHEREAS, on June 12, 2023, the SVCW Board met and approved the establishment of a Debt Service Reserve to meet the debt coverage ratio requirements of the State Revolving Fund (SRF) Loan Program; and
WHEREAS, the SVCW Debt Service Fund will require initial funding from all the member agencies in the amount of $2.5 million in FY 2022-23 and an additional $3 million in FY 2023-24; and
WHEREAS, the City’s portion of the reserve funding will be $380,000 in FY 2022-23 and $430,000 in FY 2023-24; and
WHEREAS, there is sufficient funding available in the Wastewater Fund to cover this request.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council appropriates $380,000 in FY 2022-23 and $430,000 in FY 2023-24 from the Wastewater Fund to establish the Silicon Valley Clean Water (SVCW) Debt Service Reserve Fund to satisfy the SVCW debt service coverage requirements of the State Revolving Fund (SRF) Loan Program. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

AYES, COUNCILMEMBERS:___________________________________________ NOES, COUNCILMEMBERS:___________________________________________ ABSENT, COUNCILMEMBERS:___________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

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RESOLUTION NO. SVCW 23-20 RESOLUTION APPROVING AND ADOPTING REVISION F TO COMMISSION POLICY 2013-03, SILICON VALLEY CLEAN WATER RESERVE FUND POLICY AND PROCEDURES WHEREAS, this Commission previously approved and adopted Administrative Policy No. 2013-03, as revised, establishing target minimum reserve levels to encourage and ensure the continued fiscal stability of Silicon Valley Clean Water ( WHEREAS, this Commission has been presented with and has reviewed certain revisions to the Policy and desires to amend the Policy, and to approve and adopt Revision F to said Policy. NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF SILICON VALLEY CLEAN WATER, as follows: 1. Revision F to that certain Administrative Policy No. 2013-03, a copy of which is attached hereto and incorporated herein by this reference, is hereby approved and adopted. 2. The Silicon Valley Clean Water Manager is hereby authorized and directed to implement and administer the aforementioned Policy. 3. This Resolution and said Policy shall become effective upon the date of adoption. Regularly passed and adopted by the Commission of Silicon Valley Clean Water at the regular meeting thereof held on the 12th day of June, 2023 by the following vote: AYES, and in favor of the passage and adoption of the foregoing resolution: Alicia Aguirre, Redwood City; George Otte, West Bay Sanitary District; Davina Hurt, Belmont, Ron Collins, San Carlos NOES, and against the passage and adoption of the foregoing resolution: None ABSENT None ABSTAIN None

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____________________________________ Alicia Aguirre, CHAIR Silicon Valley Clean Water Commission Attest: _______________________________ Ron Collins, SECRETARY Silicon Valley Clean Water Commission

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Silicon Valley Clean Water
Commission Policy No. 2013-03 Page 1 of 4
COMMISSION POLICY NO. 2013-03 APPROVED BY: __________ _ Revision: F Revision Date: 06/12/2023 Issue Date: 08/08/2013 Approved by SVCW Commission at Meeting of June 12, 2023 by Resolution SVCW 23-20 SUBJECT: SVCW Reserve Fund Policy and Procedures PURPOSE To prudently protect the fiscal solvency of the Authority, it is important to maintain a minimum level of reserves. Reserves are important to mitigate the negative impact of revenue shortfalls from economic fluctuations, to fund unforeseen expense requirements, to provide stable rates for member entities, to fund future long-term capital needs, and to mitigate the need to borrow and pay interest for capital improvement projects. Since establishing the Reserve Fund Policy in 2013, it is the desire of the SVCW Commission to ensure target minimum reserve levels that will safeguard the continued fiscal stability of the Authority. This policy mandates the minimum reserve levels necessary to maintain credit worthiness and to adequately provide for: Economic certainty during financial hardships or downturns in the local, state, or national economy Economic certainty in the event of local disasters or catastrophic events Coverage of debt reserve requirements Coverage for capital obligations Cash flow requirements Rate stability Legal requirements POLICY The Authority shall maintain reserve balances for the Annual Operations Budget, the Capital Equipment Replacement Fund, the Capital Improvement Program Fund and the Stage 2 Capacity Expansion Fund. The Authority shall target the minimum reserve level and funding sources for each of the funds as follows: 1. ANNUAL OPERATIONS AND CAPITAL BUDGET RESERVE FUND The Annual Operations and Capital Budget Reserve Fund shall be maintained at a minimum balance of Ten Percent (10%) of the approved annual Operations and Capital budgeted Authority expenses, plus Two Million Dollars ($2,000,000.00). This fund will allow for continued operation in times of local, regional, state or national crisis or for unbudgeted, unexpected operational, maintenance or capital expenses approved by the SVCW Commission on a case-by-case basis.

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Commission Policy No. 2013-03 Page 2 of 4
Funding for the Annual Operations and Capital Budget Reserve Fund will be funded by each member agency in an amount equal to their percentage of capacity ownership in the SVCW. The reserve shall be funded to its minimum balance at the beginning of each fiscal year as part of the annual budget process. Any reserve balance will be available for spending on unanticipated, unbudgeted operating and maintenance or capital expenses approved by the Commission during that fiscal year. Generally, the Operations and Capital Budget Reserve Fund is designed to support unexpected capital expenditures of less than $2 million. Any balance in excess of the 10% plus $2,000,000 reserve level, at the end of the fiscal year, shall agency in an amount equal to their percentage of capacity ownership in SVCW. All interest derived from the fund balance shall be credited to this fund. 2. CAPITAL IMPROVEMENTS PROGRAM RESERVE FUND The Capital Improvement Program Reserve Fund shall be funded until it reaches a balance of $50 million ($50,000,000) in 2019 dollars, based upon inflation measures as described in the annual Engineering News-Record Area. This will provide adequate resources in the event of a sudden and catastrophic infrastructure failure and, coupled with a robust and ongoing revenue-funded capital program approved by the Commission before each fiscal year, will allow most major expenses in the future, related to the facilities reaching the end of their useful life, to be paid for on a pay as you go basis and limit the need for borrowing. However, as significant infrastructure projects occur, it may be appropriate to leverage borrowing to ensure equitable contributions by future generations. This fund shall also provide funding, as available, for required plant improvements mandated by regulatory changes. This fund will maintain the dedicated minimum debt service amounts required by State Revolving Fund loans and other CIP loans not held in escrow. Funding for the Capital Improvement Program Reserve Fund will be contributed by each member agency in an amount equal to their percent of capacity ownership in SVCW and will Operating Budget payments. Generally, the Capital Improvements Program Reserve Fund is designed to support unexpected capital expenditures greater than $2 million. All interest derived from the fund balance shall be credited to this fund. To meet specific debt reserves required by State Revolving Fund loans received from the California State Water Resource Control Board, SVCW may designate specific amounts as debt service reserves equifor each respective State Revolving Fund loan. 3. STAGE 2 CAPACITY FUND The Stage 2 Capacity Fund shall be utilized to pay for capital projects that increase the treatment capacity of the SVCW derives income from fees paid by new customers to buy capacity for the use of the SVCW facilities. Projects to enhance capacity will be built when there are adequate cash reserves to fund the project or at the discretion of the SVCW Commission.

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Commission Policy No. 2013-03 Page 3 of 4
Payments will be made in accordance with the requirements of the SVCW Joint Powers Agreement (JPA) for new connections to the system. There is no limit to the amount of funds that can accumulate in this fund. All interest derived from the fund balance shall be credited to this fund. 4. DEBT SERVICE RESERVE FUND The Debt Service Reserve Fund shall be established to allow SVCW to demonstrate its revenues are sufficient to meet the debt service coverage test requirements of its State Revolving Fund Loans. On an annual basis during the Budget process, SVCW shall determine the funding level required to meet the debt service coverage test referenced in the applicable loan documents. Funding for the Debt Service Reserve Fund shall be contributed by each member agency in an amount equal to their percentage of capacity ownership in SVCW. Contributions shall be placed into a designated investment account and managed according to Commission-adopted investment policies. All interest derived from the fund balance shall be credited to this fund. Disbursements from this fund shall be restricted to State Revolving Fund loan matters. Upon satisfaction of coverage test requirements, each Member may direct its allocated portion of this reserve be left in place, returned to the Member, or used towards future debt service payments. ANNUAL CONTRIBUTIONS ANNUAL OPERATIONS AND CAPITAL BUDGET RESERVE FUND Upon adoption of this policy, the Annual Operations and Capital Budget Reserve Fund shall be adjusted annually to maintain the minimum balance required as part of the annual budget process. CAPITAL IMPROVEMENTS PROGRAM RESERVE FUND Each fiscal year, beginning in Fiscal Year 2014-2015 an amount of One Million Dollars ($1,000,000) shall be budgeted and added to the Capital Improvements Reserve Fund as part of the annual budget process. This is done to increase the balance to meet expected State Revolving Fund reserve requirements. In order to address the goal of funding the depreciation of the SVCW facilities over the life of the facilities, the annual contribution of $1,000,000 will be increased, beginning in Fiscal Year 20202021, by Five Hundred Thousand Dollars ($500,000) per fiscal year, each fiscal year until the Capital Improvement Program Reserve Fund reaches a balance of $50 million dollars ($50,000,000) in 2019 dollars, based upon inflation measures as described in the annual Engineering News-. Funds required to be held in reserve for State Revolving Funds or Bonds shall be deposited to the Capital Improvements Program Reserve Fund once the loans are paid off and shall not be used to pay the final payments for said loans. STAGE 2 CAPACITY FUND

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Commission Policy No. 2013-03 Page 4 of 4
Funding for the Stage 2 Capacity Fund is established and shall continue in accordance with the SVCW Joint Powers Agreement (JPA). DEBT SERVICE RESERVE FUND Funding for the Debt Service Reserve Fund shall be made annually. It is projected that $2.5 million ($2,500,000) is required in fiscal year 2022-23, and an additional $3.0 ($3,000,000) in 2023-24. GENERAL POLICY PRACTICES All reserves will be reviewed by SVCW Finance Department and SVCW Controller at least annually to verify the organization is in compliance with this policy and a report will be presented to the SVCW Commission as part of the annual budget approval process. The reserve funds will be invested in accordance with the investment policy adopted by the SVCW Commission. Transfers between the reserve funds will be made only at the direction of the SVCW Commission. Except in the case of emergency as defined by the Silicon Valley Clean Water JPA, the spending of reserves will be approved in advance by the SVCW Commission.

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Transferring $60,000 from Park-in-Lieu Fund 0027 to the Sport Field Lighting Project C1818 in the General Capital Fund 0025.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution transferring $60,000 from Park-in-Lieu Fund 0027 to the Sports Field Lighting Project C1818 in the General Capital Fund 0025.

FISCAL IMPLICATIONS:

The total fiscal impact or net costs to the Park-in-Lieu Fund 0027 would be $60,000 in FY 2022-

23. There are sufficient funds available for this transfer.

BACKGROUND:

The City of San Carlos assesses a number of development impact fees – Traffic Impact Fee, Park Facility Development Fee, Commercial Linkage Fee, Sewer Capacity Charge, and the Silicon Valley Clean Water (SVCW) Sewer Connection Pass-Through Fee. Local governments often charge fees as a condition of approval for development projects to fund public improvements to compensate for the demands that the developments have on public infrastructure. These fees are commonly known as development impact fees. In 1989, the State Legislature passed Assembly Bill 1600 (AB 1600), which added Sections 66000 et seq. to the California Government Code, commonly known as the Mitigation Fee Act. As required by law, these fees are segregated and accounted for in a separate fund.

Per AB 1600, each fee collected to mitigate a specific impact must be spent within five years of collection. If the fee is held over this five year time period due to specific circumstances or insufficient collection for the needed improvements, the City Council must make specific findings to continue holding the fees, otherwise, the fees are subject to refund. Government Code Section 66001 requires the City to make available to the public certain information regarding these fees for each fund within 180 days after the end of each fiscal year.

ANALYSIS:

Due to the timing of upcoming park improvement plans and projects, a transfer of funds in the amount of $60,000 from Park-in-Lieu Fund 0027 is necessary to comply with AB 1600. The Park- in-Lieu Fund accounts for development fees collected and used to finance the acquisition, construction, and major improvement of City parks. The Sports Field Lighting C1818 project would qualify since it is considered an enhancement or improvement providing residents with more access to Highlands and Burton parks.

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ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution transferring $60,000 from Park-in-Lieu Fund 0027 to the Sports Field Lighting Project C1818 in the General Capital Fund 0025; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Amy Newby, Parks & Recreation Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS TRANSFERRING $60,000 FROM PARK-IN-LIEU FUND 0027 TO THE SPORTS FIELD LIGHTING PROJECT C1818 IN THE GENERAL CAPITAL FUND 0025.

WHEREAS, the City of San Carlos assesses a number of development impact fees including a Park-in-Lieu fee; and
WHEREAS, these fees are separated and accounted for in a separate fund; and WHEREAS, per Assembly Bill (AB) 1600 each fee collected to mitigate a specific impact must be spent within five years of collection; and
WHEREAS, Park-in-Lieu fees must be used to finance the acquisition, construction, and major improvements of City parks; and
WHEREAS, due to the timing of certain upcoming park improvement plans and projects, a transfer of funds from Park-in-Lieu Fund 27 is necessary to comply with AB 1600; and WHEREAS, the Sports Field Lighting project aligns with the requirements that the fees be spent as it is an enhancement to Highlands and Burton parks, which provide more access to visitors.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby transfers $60,000 from Park-in-Lieu Fund 0027 to the Sports Field Lighting Project C1818 in the General Capital Fund 0025.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Awarding the 2023 Pavement Crack Seal Project C9416; Authorizing the City Manager to Execute a Public Projects Agreement with Graham Contractors, Inc. of San Jose, CA in the Amount of $82,380; and Authorizing the Expenditure of a Contingency in the Amount of $12,357.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution awarding the 2023 Pavement Crack Seal Project C9416 (“Project”), authorizing the City Manager to execute a public projects agreement with Graham Contractors, Inc. of San Jose, CA in the amount of $82,380, and authorizing the expenditure of a contingency in the amount of $12,357.

FISCAL IMPLICATIONS:

There is no additional appropriation needed at this time.

Funding for the Project comes from C9416, which has a remaining balance of approximately $5,496,454.22 in Fiscal Year (“FY”) 2022-23. The remaining balance is sufficient to award the total amount of the Project including contingency as well as fund other encumbrances.

BACKGROUND:

In May 2019, the City completed a comprehensive pavement management update that included field inspections and an update of the City’s pavement management software through the Metropolitan Transportation Commission (“MTC”) Pavement Management Technical Assistance Program (“P-TAP”).

In 2019, the City’s overall pavement condition index (“PCI”) was 63, which is classified as “fair to at-risk” by MTC standards. The City’s paved surfaces are a vital asset to the community. It is essential that this asset is preserved and maintained. Extending the life of the pavement with preservation, as opposed to the replacement of pavement, is the goal of a pavement management program.

Preventative maintenance is typically applied to pavements in good condition that have significant remaining service life. Preventive maintenance is a strategy for extending the service life by applying cost-effective treatments to the surface or near-surface of structurally sound pavements.

Alternatively, pavement rehabilitation consists of structural enhancements that extend the service life of an existing pavement and/or improve its load carry capacity.

Therefore, MTC recommended that the City continue utilizing the recommended cost-effective

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treatments such as crack seals, slurry seals, and microsurfacing, in addition to the overlay treatments, to improve the overall PCI. Without preventative maintenance, these paved asphalt concrete surfaces would quickly deteriorate and be much more costly to fix in the future.

Based on the City’s pavement management system recommendations, staff looked at the different scenarios recommended by MTC that included all treatments to continue to improve the overall PCI. Staff selected the scenario to improve the overall PCI by five points and updated the current five-year paving master plan, which includes streets for crack sealing.

Staff prepared the Project specifications based on the street segments identified in the five-year paving master plan for crack sealing. The City Engineer signed the final bid set construction documents on May 4, 2023.

Based on the engineer’s estimate, staff bid the project informally in accordance with the City’s Municipal Code 3.14.030.

ANALYSIS:

The Project was advertised on May 9, 2023, and bids were opened on June 8, 2023. The engineer’s estimate and the four bids received are shown in the table below:

Contractor Bid Amount
Engineer’s Estimate $150,000
Graham Contractors, Inc. $82,380
MBS Engineering, Inc. $116,215.10
Pavement Coatings Co. $161,101.40
Bond Blacktop, Inc. $161,479.20
Based on the bids received, the lowest responsible and responsive bid was submitted by Graham Contractors, Inc. in the amount of $82,380.

After bid evaluation, staff recommends awarding the Project, authorizing the City Manager to execute a public projects agreement with Graham Contractors, Inc. in the amount of $82,380, and authorizing the expenditure of a contingency in the amount of $12,357.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution awarding the 2023 Pavement Crack Seal Project C9416, authorizing the City Manager to execute a public projects agreement with Graham Contractors, Inc. of San Jose, CA in the amount of $82,380, and authorizing the expenditure of a contingency in the amount of $12,357; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

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Respectfully submitted by:

Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS AWARDING THE 2023 PAVEMENT CRACK SEAL PROJECT C9416; AUTHORIZING THE

CITY MANAGER TO EXECUTE A PUBLIC PROJECTS AGREEMENT WITH GRAHAM CONTRACTORS, INC. OF SAN JOSE, CA IN THE AMOUNT OF $82,380; AND AUTHORIZING THE EXPENDITURE OF A CONTINGENCY IN THE AMOUNT OF $12,357.

WHEREAS, in May 2019, the City completed a comprehensive pavement management update that included field inspections and an update of the City’s pavement management software through the Metropolitan Transportation Commission (“MTC”) Pavement Management Technical Assistance Program (“P-TAP”); and
WHEREAS, in 2019, the City’s overall pavement condition index (“PCI”) was 63, which is classified as “fair to at-risk” by MTC standards; and
WHEREAS, extending the life of the pavement with preservation, as opposed to the replacement of pavement, is the goal of a pavement management program; and WHEREAS, MTC recommended that the City continue utilizing the recommended cost- effective treatments such as crack seals, slurry seals, and microsurfacing, in addition to the overlay treatments, to improve the overall PCI; and
WHEREAS, based on the City’s pavement management system recommendations, staff looked at the different scenarios recommended by MTC that included all treatments to continue to improve the overall PCI; and
WHEREAS, staff selected the scenario to improve the overall PCI by five points and updated the current five-year paving master plan, which includes streets for crack sealing; and WHEREAS, staff prepared the 2023 Pavement Crack Seal Project C9416 (“Project”) specifications based on the street segments identified in the five-year paving master plan for crack sealing; and
WHEREAS, the City Engineer signed the final bid set construction documents on May 4, 2023; and
WHEREAS, based on the engineer’s estimate, staff bid the Project informally in accordance with the City’s Municipal Code 3.14.030; and WHEREAS, the Project was advertised for bids for construction on May 9, 2023 and bids were opened on June 8, 2023; and
WHEREAS, the lowest responsible and responsive bid was submitted by Graham Contractors, Inc. in the amount of $82,380; and
WHEREAS, staff recommends that the City Council award the contract to Graham Contractors, Inc.

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NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby awards the 2023 Pavement Crack Seal Project C9416, authorizes the City Manager to execute a Public Projects Agreement with Graham Contractors, Inc. of San Jose, CA in the amount of $82,380, and authorizes the expenditure of a contingency in the amount of $12,357. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

AYES, COUNCILMEMBERS:_____________________________________________ NOES, COUNCILMEMBERS:_____________________________________________ ABSENT, COUNCILMEMBERS:_____________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Authorizing the City Manager to Execute an Amendment to the Professional Services Agreement with Kimley- Horn & Associates, Inc. in the Amount of $143,970 for Additional Professional Engineering Services for the Traffic Signal System Analysis Project C2007 and Authorizing the Expenditure of Contingency up to the Project Budget.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution authorizing the City Manager to approve an amendment to the agreement with Kimley-Horn & Associates, Inc. (“Kimley-Horn”) in the amount of $143,970 for additional professional engineering services for the Traffic Signal System Analysis Project C2007 (“Project”) and authorizing the expenditure of contingency up to the Project budget.

FISCAL IMPLICATIONS:

No additional appropriation is needed at this time.

Funding for the project comes from C2007 as part of the adopted budget for Fiscal Year 2022-23 in the amount of $350,000.

An agreement was executed with Kimley-Horn in the amount of $51,994 and an amendment for additional services was executed for $5,554.50, for a total of $57,548.50.

The Project has an available budget of $292,451.50. There is sufficient budget to execute an amendment for additional engineering services in the amount of $143,970.

BACKGROUND:

Staff selected Kimley-Horn through a request for proposals process to provide professional services for the Project in January 2022. The agreement was for phase one of development of the Traffic Signal Master Plan to include traffic signal hardware infrastructure inventory and needs evaluation.

In May 2022, an amendment to the agreement was executed to add an additional seven intersections to the Project. The technical memo for phase one existing conditions of the Project was received in fall of 2022.

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ANALYSIS:

The cost for the additional engineering services is $143,970.

Staff is working with Kimley-Horn to begin phase two of the Project. The additional services in this phase include inventory and updates to all traffic signal timing plans, review and update of signal coordination plans, development of citywide traffic signal specifications, and development of SMART corridor integration requirements.

Staff recommends executing an amendment to the agreement with Kimley-Horn in the amount of $143,970 for the additional engineering services.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing the City Manager to execute an amendment to the agreement with Kimley-Horn & Associates, Inc. in the amount of $143,970 for additional professional engineering services for the Traffic Signal System Analysis Project C2007 and authorizing the expenditure of contingency up to the Project budget; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH KIMLEY-HORN & ASSOCIATES, INC. IN THE AMOUNT OF $143,970 FOR ADDITIONAL PROFESSIONAL ENGINEERING SERVICES FOR THE TRAFFIC SIGNAL SYSTEM ANALYSIS PROJECT C2007 AND AUTHORIZING THE EXPENDITURE OF CONTINGENCY UP TO THE PROJECT BUDGET.

WHEREAS, in January 2022, staff selected Kimley-Horn & Associates, Inc. (“Kimley- Horn”) through a request for proposals process for the Traffic Signal System Analysis Project C2007 (“Project”) and entered into an agreement for phase one of the development of the Traffic Signal Master Plan in the amount of $51,994; and
WHEREAS, in May 2022, Amendment No. 1 was issued to the agreement in the amount of $5,554.50, increasing the total contract amount to $57,548.50, to add seven additional intersections to the Project; and
WHEREAS, in the fall of 2022, Kimley-Horn completed a technical memo for existing conditions as part of phase one of the Project; and
WHEREAS, Amendment No. 2 to the agreement will include inventory and updates to all traffic signal timing plans, review and update of signal coordination plans, development of citywide traffic signal specifications, and development of SMART corridor integration requirements.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby authorizes the City Manager to execute an amendment to the agreement with Kimley-Horn & Associates, Inc. in the amount of $143,970 for additional professional engineering services for the Traffic Signal System Analysis Project C2007 and authorizes the expenditure of contingency up to the Project budget.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Granting Consent to the City of Burlingame to Form the San Francisco Peninsula Tourism Marketing District (SFPTMD) and Include the City of San Carlos.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution granting consent to the City of Burlingame to form the San Francisco Peninsula Tourism Marketing District (SFPTMD) and include the City of San Carlos in the SFPTMD.

FISCAL IMPLICATIONS:

There are no immediate fiscal impacts associated with this recommendation. However, because the SFPTMD programs are intended to increase room night sales for assessed lodging businesses within the SFPTMD, there may be an increase in tax collections.

BACKGROUND:

In 2000, the San Carlos City Council adopted Resolution No. 2000-167 consenting to the formation of the San Mateo County Tourism Business Improvement District (SMCTBID) and authorizing the City of Burlingame, as lead agency, to take necessary steps and actions to formalize the formation of the SMCTBID. (See Attachment 2, Resolution No. 2000-167) The purpose of the SMCTBID is to provide revenue to defray the costs of the services, activities, and programs to promote tourism for the benefit of hotels in the SMCTBID.

On February 5, 2001, the Burlingame City Council adopted Ordinance No. 1648 which established: (1) the SMCTBID, (2) the basis for and process of levy and collection of assessments for the SMCTBID, and (3) the SMCTBID advisory board. The Ordinance was adopted pursuant to provisions of the Parking and Business Improvement Area Law of 1989 (89 Law), as codified in California Streets and Highways Code sections 36500 and following. See Attachment 3 for a copy of Ordinance No. 1648.

Per the terms of Ordinance No. 1648, an advisory board of seventeen members was established to advise the City of Burlingame on the conduct of the SMCTBID, including the level of assessments to be levied each year, the services, activities, and programs to be conducted by the SMCTBID, and the progress of the SMCTBID in meeting its purpose and goals. The advisory board is appointed by the City Council of the City of Burlingame and is comprised of owners or managers of hotels or owners of property occupied by a hotel from the participating cities.

In addition to the City of San Carlos, the following participating cities consented to the formation

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of the SMCTBID within their respective city limits: City of Belmont, City of Daly City, City of Foster City, City of Half Moon Bay, City of Millbrae, City of Redwood City, City of San Bruno, City of San Mateo, and City of South San Francisco. Since the adoption of Ordinance No. 1648 in 2001, East Palo Alto, City of Pacifica, City of Brisbane, and areas of Unincorporated San Mateo County have begun participating. In 2002, Daly City requested to be removed from the SMCTBID due to the recession and the nature of their business.

Ordinance No. 1648 also established the basis of assessments, which was a fixed fee per sleeping room, which varied according to the number of rooms, level of service, and amount of meeting space at each lodging business. The City of Burlingame is responsible for collecting assessments (including any delinquencies, penalties, and interest) from each lodging business and retains a fee of approximately $9,300 per year to cover its costs of collection and administration.

Per the 89 Law, in order to form a District, one jurisdiction must act as the lead agency which oversees the District and consent must be granted from the other jurisdictions for the lead agency to form the District within their territorial jurisdiction. The City of Burlingame has served as lead agency since the SMCTBID was established and received consent from the County of San Mateo and the other cities currently within the SMCTBID.

The San Mateo County/Silicon Valley Convention and Visitors Bureau is the nonprofit organization contracted to carry out the programs of the SMCTBID, with oversight from the Advisory Board and the Burlingame City Council. To renew the District each year, the 89 Law requires an annual report submitted to the lead jurisdiction each year, who then must vote to renew the District by resolution. Each year since the SMCTBID was established by ordinance, the San Mateo County/Silicon Valley Convention and Visitors Bureau has submitted an annual report to the City of Burlingame and subsequently renewed the SMCTBID.

Per Exhibit C of the “San Mateo County/Silicon Valley Convention and Visitors Bureaus Annual Report for the Burlingame City Council as Lead Agency for the San Mateo County Tourism Business Improvement District” report dated October 15, 2022, during the period of October 2021 through September 2022, 142 participating hotels were assessed a total of $2,056,072.50.

Of this total amount, $30,477.60 was assessed from eight hotels located in San Carlos including:

Country Inn & Suites, Extended Stay America, Fairfield Inn & Suites, Good Living Inn, Hyatt Place, LiA Hotel, Residence Inn, and San Carlos Inn.

ANALYSIS:

The San Mateo County/Silicon Valley Convention and Visitors Bureau dba The San Francisco Peninsula (SFP) and lodging businesses within San Mateo County, seek to modernize the SMCTBID by disestablishing the 89 Law District and forming a new District, the San Francisco Peninsula Tourism Marketing District (SFPTMD), pursuant to the Property and Business Improvement District Law of 1994 (94 Law). (See Attachment 4, “San Francisco Peninsula Tourism Marketing District Management District Plan” dated January 23, 2023.) SFP and lodging business owners decided to pursue this effort by forming the SFPTMD pursuant to the more contemporary 94 law in order to ensure a continued revenue source devoted to marketing the San Francisco Peninsula area as a tourist, meeting, and event destination. The proposed SFPTMD will be similar to the existing SMCTBID but offers stakeholders more transparency in oversight and governance in managing the district. Under the ’94 Law, a Tourism

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Marketing District (TMD) can also operate for a longer period of time (up to 10 years after an initial 5-year term), which allows SFP staff to focus on long-term initiatives instead of spending time required to fulfill the administrative tasks required for annual renewal.

Establishment of the SFPTMD requires written petitions, signed by the business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, and consent of the city council or board of supervisors of each participating jurisdiction. Signed petitions from hotels representing 58.12% of assessments in the district were received, therefore, the written petition requirement has been met. In San Carlos, signed petitions were received from The Country Inn & Suites, Fairfield Inn & Suites, Hyatt Place, and Residence Inn.

The SFPTMD would include the same participating agencies as the SMCTBID. In lieu of a fee per room, the annual assessment rate is 1.5% of gross short-term sleeping room revenue for lodging businesses with 5,000 square feet or more of dedicated meeting space, and 0.75% for all other lodging businesses within the SFPTMD’s boundaries.

If established, the SFPTMD would generate approximately $10,895,479 on an annual basis for promotion of travel and tourism specific to the San Francisco Peninsula area. Of the total assessment, 90%, or $9,805,931, would be applied toward sales, marketing & advocacy of the lodging businesses, 8%, or $871,638, would be applied toward the administration, operations, and services of the SPTTMD, 1%, or $108,955, would be applied toward contingency or reserves, and 1%, or $108,955, would be retained by the City of Burlingame to cover the costs of collection and administration.

Officers and board members are designated by the Nominating Committee or Executive Committee or Board of Directors, for three-year terms. Proposed board officers for 2023 include four representatives from Burlingame, one each from South San Francisco, San Bruno, Millbrae, Unincorporated County, and the San Mateo County Historical Association.

The Management District Plan in Attachment 4 lists additional information about the SFPTMD including sales, marketing and advocacy programs and activities, determination of assessments, penalties and interest, governance, and assessed businesses.

The proposed SFPTMD will have a five year life, beginning October 1, 2023, or as soon as possible thereafter, and ending five years from its start date. The assessment will be implemented beginning October 1, 2023, or as soon as possible thereafter. Once per year, beginning on the anniversary of SFPTMD formation, there is a thirty-day period in which business owners paying fifty percent (50%) or more of the assessment may protest and begin proceedings to terminate the SFPTMD.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution granting consent to the City of Burlingame to form the SFPTMD and include the City of San Carlos in the SFPTMD; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

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Respectfully submitted by:

Nil Blackburn, Assistant City Manager
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. San Carlos Resolution No. 2000-167

3. Burlingame Ordinance No. 1648 Establishing SMCTBID

4. San Francisco Peninsula Tourism Marketing District Management District Plan Report dated January 23, 2023

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS,

STATE OF CALIFORNIA, GRANTING CONSENT TO THE CITY OF BURLINGAME TO

FORM THE SAN FRANCISCO PENINSULA TOURISM MARKETING DISTRICT (SFPTMD) AND INCLUDE THE CITY OF SAN CARLOS.

WHEREAS, in 2001, the San Mateo County Tourism Business Improvement District (SMCTBID) was formed pursuant to the Parking and Business Improvement Area Law of 1989 (89 Law) by City of Burlingame Ordinance No. 1648; and
WHEREAS, the City of San Carlos granted consent to the City of Burlingame to be included within the boundaries of the SMCTBID by San Carlos City Council Resolution No 2000- 167; and
WHEREAS, the City of Burlingame, San Mateo County/Silicon Valley Convention and Visitors Bureau dba The San Francisco Peninsula (SFP), and San Mateo County lodging businesses seek to modernize the SMCTBID by forming a new District, the San Francisco Peninsula Tourism Marketing District (SFPTMD), pursuant to the Property and Business Improvement District Law of 1994; and
WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City of Burlingame to establish business improvement districts for the purposes of driving increased business sales directly to payors; and WHEREAS, the City Council of the City of Burlingame has requested consent to form the SFPTMD in the City of San Carlos with adoption of Burlingame City Council Resolution No. 049- 2023, dated May 15, 2023.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Carlos, that:

Section 1: The above recitals are true and correct.

Section 2: The City of Burlingame is hereby granted consent to include the City of San Carlos in the SFPTMD, for the formation of the SFPTMD and future renewals.

Section 3: The Clerk of the City of San Carlos is hereby directed to transmit a certified copy of this Resolution to the Clerk of the City of Burlingame.

Section 4: This Resolution is effective upon its adoption. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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San Mateo County/Silicon Valley Convention and Visitors Bureau Annual Report for the Burlingame City Council as
Lead Agency for the San Mateo County Tourism Business Improvement District October 15, 2022
Activities/Accomplishments from October 2021 through September 2022 Groups and Conventions: In the last 12 months, we generated 452 meeting leads worth 162,655 room nights for San Mateo County properties. We booked a total of 14,480 definite room nights, as well as numerous banquets, with an economic impact of $9,511,768.

Conducted two domestic and one international campaign on the Expedia digital platform with the support of Visit California and Brand USA. Combined, these campaigns generated 26,847 room nights with an economic impact of $13,540,000 for our hotel partners in their respective cities. The domestic campaigns targeted western states while the international campaign targeted the top producing markets of Canada, United Kingdom, France, Germany, and Mexico.

Additional economic impact and room nights were realized due to advertising and promotion, groups rebooking directly with our hotels, or additional non-room local revenue generated by filming.

Accomplishments in Group/Convention Sales
• Participated in industry trade shows and events including All Things Meetings – San Francisco & Silicon Valley, IMEX America, PCMA Convening Leaders, CalSAE Seasonal Spectacular, Independent Planner Education Conference (IPEC), Receptive Tour Operator West, MPI Northern CA Chapter Annual Conference & Expo, MPI Sacramento/Sierra Nevada Global Meeting Industry Day Show, Cvent Connect, Prestige Annual Partner Meeting, CalSAE Annual Conference, Destination West, HelmsBriscoe Annual Business Conference, IPW, Conference Direct Annual Partner Meeting, MPI World Education Conference, Connect Corporate and Association Marketplace, and Destination California.
• Conducted sales mission/roadshow in partnership with Visit California to key feeder markets: New York, Washington DC, Philadelphia, Chicago, and Minneapolis.
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Held virtual webinars for meeting planners (Global Cynergies, HelmsBriscoe, and Conference Direct).

Conducted sales calls to clients targeting the drive-in market - Bay Area, Greater Sacramento/Central valley area and the Southern CA region.
• Sponsored regional industry partner events for California Society Association Executives, MPI Northern CA Chapter, MPI Sacramento/Sierra NV and PCMA Northern CA Chapter.
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Conducted numerous targeted meeting planner outreach campaigns to all market segments.

Co-sponsored client events with area satellite SFP reps in the Washington, DC area.

Continued outreach to third party meeting planners and meeting management companies, including Smith Bucklin, Global Cynergies, HelmsBriscoe, Conference Direct, Meetings Made Easy, American Express Meetings & Events, Prestige Global Meeting Source, Association Management Co., and AMG, as well as to several independent third- party planners. Participated as member of the Meeting Planners International Northern California (MPINCC) and MPI Sacramento/Sierra Nevada committees and Association of Meeting Professionals (a MD, DC, VA organization), allowing access to planners.
111 Anza Boulevard, Suite 410, Burlingame, CA 94010 ● 650.348.7600 ● thesanfranciscopeninsula.com

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Continued outreach throughout the U.S., building relationships with association, corporate, third-party and SMERF meeting planners.

Remained actively involved in local (San Francisco, Sacramento/Sierra Nevada, Chicago/Greater Midwest, and Washington, DC) industry group chapters of Meetings Professional International, Professional Convention Management Association, Society of Government Meeting Planners, and California Society of Association Executives, American Society Association Executives, and CalSAE Bay Area region.

Preferred SFP partnership program with key third party meeting planning companies such as HelmsBriscoe, Conference Direct and Global Cynergies to gain access to meeting planners.

Continued with Cvent’s Preferred Destination Marketing Program to get in front of planners directly that source on this platform.

Escorted individual meeting planners on site visits to generate leads for/close group business: Chan Zuckerberg, Filipina Woman’s Network, PCMA LEAP, Autodesk, 360 Destination Group and Strive Together. •
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Accomplishments in Leisure
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Attended virtual event and conducted one-on-one business appointments at the Go West Summit.

Attended IPW and met with many domestic and international tour operators, meeting incentive travel buyers, Visit California market reps and travel journalists.

Accomplishments in Marketing Efforts
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Rebranded our destination to The San Francisco Peninsula.

Launched a new destination marketing video which is currently used on our website homepage.

Created a new meeting planner video which is currently used on our Meeting Planners homepage.

Created a new Domestic sales brochure and International sales brochure.

Created a new digital visitor guide rack card.

Created a hotel keycard insert for the digital visitor guide.

Updated the digital version of our Visitors Guide on our website.

Continued to distribute hard copies and digital copies of official Visitor Guides with map insert at San Francisco Travel Welcome Center, SFO, OAK and SJO airports. We transitioned to rack cards promoting our digital visitor guide and distribute those at CA Welcome Centers in San Francisco, Santa Rosa, Gilroy, Fairfield, Truckee, Auburn, and El Dorado Hills; as well as SFO, OAK and SJO airports. • Maintained website landing page with COVID updates for local businesses, as well as landing page dedicated to COVID visitor and travel information.
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Added new itineraries widget to the website for our Convention Services Program.

Created a San Mateo County Fair landing page.

Website users increased +44% (311,365 users). New users accounted for 88%.

Website sessions increased +45%.

Page views increased +39%.

Prospective visitors are taking advantage of our website in all platforms available with desktop users up by +31% and mobile users up by +67%.
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Visitors to our site are 56% female and 44% male. Users aged 25-34 is 25% and aged 35-44 is 24%.

The top cities people visited our site from are San Francisco, San Jose and Los Angeles.

The top countries people visited our site from are United States, Canada, India, and the Netherlands.

Top landing pages in our website included: San Mateo County Fair, Things to Do in Half Moon Bay, Things to Do, Events, and Farmers’ Markets.
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Enhanced and maintained Calendar of Events.

Maintained our CRM and assisted partners with Partner Portal questions.

Continued to produce relevant blog content, hotel offers, new landing pages, Visitor/Meeting Planner/Partner/CEO newsletters, and more.

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Continued to market our area as a top culinary destination with the San Mateo County “As Fresh as it Gets” Program. Built upon partnerships with San Mateo County Farm Bureau, San Mateo County Department of Agriculture, and San Mateo County Harbor District to encourage restaurants, hotels and caterers to buy and serve the freshest local produce, seafood, wine, beer and dairy products.

Continued to field visitor info requests generated by our website and ad in California Visitor Guide. Received requests for and mailed out numerous visitor guides and rack cards. •
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Continued updating online partner listings on website with current photos and content.

Continued updating CRM system, website and social media, allowing more exposure for area businesses.

Continued Google AdWords campaigns and running Google banner ad campaign.

Created a Peninsula Restaurant Week Campaign in partnership with Embarcadero Media, which featured 127 restaurants and received significant media attention.

Recap of Media/PR/Ad Outreach
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There were over 33 earned media mentions due to our outreach efforts.

Wrote and published numerous blogs on different aspects of the area, highlighting hotels, restaurants, attractions, activities and more. Our blog content produced more than 63,300 page views.

Continued promotion of the area on daily basis. Social media followers across Facebook, Instagram, Twitter and LinkedIn increased by 17% (+2,311).

Twitter engagements increased by 77%, Instagram engagements increased by 70%, and LinkedIn engagements increased by 238%.
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Overall engagement rate per impression across platforms increased by 33%.

Began working with influencers on social media campaigns for our region.

Partnered with Brand USA to bring social media influencers to our region.

Launched a Women in Leadership Campaign on LinkedIn.

Attended TravMedia’s International Media Marketplace (IMM) 2022.

Followed up on requests from travel writers for information for specific stories.

Print advertising included a full-page ad targeting our local audience in May 2022 PUNCH Magazine; four issues of the San Mateo Daily Journal for Peninsula Restaurant Week; and a half page ad targeting the leisure market in Visit California’s Visitor Guide.
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We produced a print and digital ad featuring several partners for the San Francisco Business Times.

Continued to work with the Visit California team, responding to all publicity leads that came into the state and keep them updated on current status of our destination. Due to our efforts, our destination was featured 18 times on Visit California’s channels.
• In partnership with Visit California we created California Now Google Stories that are searchable on Google. Since the launch in March, these Google Stories have had 171,397 Google impressions and over 6,000 views.

Maintained our media database, sending editorial ideas to travel editors as requested.

Maintained The San Francisco Peninsula website, creating new pages and campaigns to increase visits and engagement.
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Community Participation / SFP Events and Sponsorships
• List of community events in which The SFP participated, events hosted by The SFP, and The SFP sponsorships.

Film Commission Efforts
• Received film requests and provided permit information and contacts for booked shoots: Gray Whale Cove:
“When Sharks Attack” documentary; Redwood City (Mexican/American El Mercadito area): “Latin X” movie; Millbrae Soccer Field: Sabritas “Soccer” Latin heritage commercial; Pescadero: State Farm commercial and photography; Highway 1: car commercial; Burlingame: Sabritas chips commercial; Montara: student short film, “Restropect”; San Gregorio: bridal photography.

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4 •
•
•
Cities/Towns with most Film Inquiries: Half Moon Bay and other San Mateo County locations.

Total Film Inquiries - 307 and Film Permits Authorized – 54.

Actively updated filming contacts database and region contacts list. Assisted location scouts for proposed film projects and commercials, matching them with available San Francisco Peninsula locations and contacts, and sending appropriate images, when available.
•
•
Continued to respond to and assist producers, film scouts with filming requests/permitting assistance, providing guidance to producers on locations per their film requests.

Updated current Film Industry Organizations contacts list and continued membership with Film in California Statewide (FLICS), California Film Commission (CFC), Association of Film Commissioners International (AFCI), Women in Film San Francisco Bay Area (WIF), and Association of Independent Commercial Producers (AICP).

Attended monthly film industry meetings (FLICS, CFC, AFCI, WIF) for updates on potential film business, guidelines and new projects.
•
Additional Outreach
•
•
Continued to work closely with the team at SFO, disbursing to our partners COVID-related mandates, vaccine information, and airline traffic changes that would affect SFO travelers.

Continued to build relationships with the Cow Palace Arena & Event Center, San Mateo County Event Center, and South San Francisco Conference Center, working to bring leads to their sales teams and assist in closing business.
•
•
Worked with SFO, BART and Caltrain to promote our area as easily accessible.

Continued outreach to the Chambers of Commerce and in the cities we serve in order to include key area events on our events calendars, and to maximize our searches for filming venues.

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EXHIBIT A

SAN MATEO COUNTY TOURISM BUSINESS IMPROVEMENT DISTRICT

THE SAN FRANCISCO PENINSULA
PLANNED ACTIVITIES FOR 2023
As pandemic recovery continues, the following initiatives are planned for 2023:

Leisure Market
The leisure market will continue to play an important role to generate room nights as recovery continues. We will continue our efforts with print and electronic advertising campaigns to attract visitors from not only within California, but throughout the United States.

Convention Market
More opportunities for our sales team to participate in convention tradeshows began in early 2022. We expect this market to revive even further throughout 2023 and beyond. We look forward to hosting many Meeting Planner FAM (familiarization) tours which will showcase our region as a premiere meeting and event destination.

International Market
In June 2022, COVID testing requirements were eliminated for international travelers entering the USA, which produced an immediate boost for the international market. While the lucrative Asian market is still working through COVID issues, we have seen a large number of visitors from Canada, Mexico, England, France, and Germany. We will continue to engage this market through our sales efforts, marketing, and digital campaigns.

For the calendar year 2023, The SFP looks forward to resuming more pre-pandemic activities, including but not limited to:
* Continue to enhance our relationship with Visit California (the state’s Destination Management Organization) and Brand USA (the nation’s Destination Management Organization). * Continue to expand our electronic marketing strategy across all platforms to further extend the reach of The SFP and our Partners.
* Engage with meeting planners via attendance in industry tradeshows. * Conduct sales outreach to recruit conferences, special events, tour, and travel groups to our area. * Conduct familiarization (FAM) site tours for planners; international travel agents from overseas; food and travel media from around theU.S.; and film producers.
* Develop content across social media platforms to engage with potential visitors and continue conversations with those who visited in the past.
* Advertise in meeting planner and leisure publications. * Engage with international and domestic travel writers to keep our destination top of mind. * Update visitor guides, electronic maps and specialty brochures, such as our Pet-Friendly Guide. * Continue to assist film producers, helping them identify locations, provide information on permits, and assist with hotel accommodations.
* Continue promoting the “As Fresh as it Gets” farm-to-table program, connecting restaurants with farmers and farmers with consumers at local farmers’ markets.

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EXHIBIT B

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EXHIBIT C

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EXHIBIT D
San Mateo County/Silicon Valley Convention and Visitors Bureau Officers and Board Members for 2023
Proposed Board Officers for 2023
Chair: Fettah Aydin, Embassy Suites SFO Waterfront, Burlingame Chair-Elect: Lisa Kershner, SFO Marriott Waterfront, Burlingame Immediate Past Chair: Trevor Bridge, Costanoa Resort, Unincorporated County Secretary: Bill Dixon, Hotel Focus SFO, South San Francisco Treasurer: Jonathan Powers, Courtyard SFO, San Bruno
Vice Chair: Kevin Kretsch, Hyatt Regency SFO, Burlingame Vice Chair: Tina Ongerth, The Dylan Hotel at SFO, Millbrae Vice Chair (2nd Past Chair): Mike McKee, Doubletree SFO, Burlingame Vice Chair: (3rd Past Chair): Mitch Postel, San Mateo County Historical Association, Tourism-Related ------------------------------------------------------------------------------------------------ 2023-2024-2025 Term (Renewal)
Robert Brand, The Westin S.F. Airport, Millbrae
Reggie Kumar, AC Hotel SFO, South San Francisco
Adora Manalo, Four Seasons Hotel Silicon Valley, East Palo Alto Kara Newport, Filoli, Tourism-Related
Tina Ongerth, The Dylan Hotel at SFO, Millbrae
Debby Padilla, Inn at Rockaway, Pacifica
Pravin Punjiya, Fairfield Inn by Marriott, South San Francisco, Tourism-Related Mathieu Riviere, The Ritz-Carlton, Half Moon Bay
Yakub Yakubi, Courtyard by Marriott, Foster City
2022-2023-2024 Term
Trevor Bridge, Costanoa Resort, Unincorporated County
Anthony Buralli, Residence Inn San Carlos/Redwood City, San Carlos Bill Dixon, Hotel Focus SFO, South San Francisco
Gustavo De Almeida, DoubleTree by Hilton SFO North, Brisbane Daniel Herbst, Enterprise Rent-a-Car, Tourism-Related
Christopher Holbrook, San Mateo Marriott, San Mateo
Mike McKee, Doubletree SFO, Burlingame
Jonathan Powers, Courtyard SF Airport, San Bruno
Ivar Satero, SFO, Tourism-Related
2021-2022-2023 Term
Fettah Aydin, Embassy Suites SFO Waterfront, Burlingame Jeff Bass, Hiller Aviation Museum, Tourism-Related
Hugo Hernandez, Residence Inn San Mateo
Lisa Kershner, SFO Marriott Waterfront, Burlingame
Kevin Kretsch, Hyatt Regency SFO, Burlingame
Christine Kupczak, Hillsdale Shopping Center, Tourism-Related Daisy Li, Moonstar Restaurant, Tourism-Related
Henning Nopper, Grand Hyatt at SFO, Tourism-related
Mitch Postel, San Mateo County Historical Association, Tourism-Related

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Extending the Agreement with Savant Solutions, Inc. for Firewall Hardware and Services for an Additional Three Years in a Total Amount Not to Exceed $30,000, with the Option to Renew Until the Hardware is Replaced.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution extending the agreement with Savant Solutions, Inc. for firewall hardware and services for an additional three years in a total amount not to exceed $30,000, with the option to renew until the hardware is replaced.

FISCAL IMPLICATIONS:

There is no fiscal impact or additional budget appropriation necessary at this time.

The Palo Alto Network firewall product was purchased through Savant Solutions, Inc., and has been budgeted since 2017. The hardware costs are covered by the Information Technology (IT) Technology Replacement budget (10999000-570100) and any annual increases subscriptions will be covered by the IT maintenance budget (01213000-520901).

BACKGROUND:

This agreement is coming before the City Council for approval based on the City of San Carlos Municipal Code requirements. Under Chapter 3.12 Purchasing of City Supplies and Services, any contracts (including amendments) less than $75,000 can be approved by the City Manager under his signing authority but those greater than $75,000 must be approved by City Council. The cost of this amendment (including prior year costs) raised the total contract cost above the City Manager’s signing authority, requiring approval by the City Council.

In 2017, Savant Solutions installed two Palo Alto Networks firewalls that included a three-year subscription to provide security services such as threat protection, uniform resource locator (“URL”) filtering, and malware protection.

The total cost for the 2017 purchase, configuration, and subscriptions was $47,400. The cost for the three-year subscription and support renewal in 2020 was $28,152. After six years, the cost totaled $75,552. The cost for replacing the firewall hardware, installation, and the three-year subscription and support is $27,199.05.

The existing support contract for the firewall support, licensing, and subscriptions are set to expire on November 23, 2023.

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ANALYSIS:

The Palo Alto Network firewall product is a next generation firewall. The City contracts with Gartner, Inc. for technology research and advisory services. Gartner, Inc. has recognized Palo Alto Networks as a leader in firewall services. By upgrading the hardware and renewing the subscriptions, the City will be able to inspect all electronic traffic to automatically block known vulnerabilities, malware, vulnerability exploits, spyware, command and control (C2), and custom intrusion prevention system (“IPS”) signatures. In addition, malware prevention protects the City’s servers from unknown file-based threats, delivering automated prevention in seconds for most new threats across networks, endpoints, and clouds. It also provides URL filtering to prevent access to malicious sites and protects users against web-based threats. Renewing the subscriptions will ensure better protection of the network from unauthorized access.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution extending the agreement with Savant Solutions, Inc. for firewall hardware and services for an additional three years in a total amount not to exceed $30,000, with the option to renew until the hardware is replaced; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Savant Solutions, Inc. Quote

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1 5
8 5
RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS EXTENDING THE AGREEMENT WITH SAVANT SOLUTIONS, INC. FOR FIREWALL

HARDWARE AND SERVICES FOR AN ADDITIONAL THREE YEARS IN A TOTAL AMOUNT NOT TO EXCEED $30,000, WITH THE OPTION TO RENEW UNTIL THE HARDWARE IS REPLACED.

WHEREAS , in 2017, Savant Solutions, Inc. installed two Palo Alto Networks' firewalls that included a three-year subscription to provide security services such as threat protection, URL filtering, and malware protection; and WHEREAS , the Palo Alto Network firewall product is a next generation firewall. The City contracts with Gartner, Inc. for technology research and advisory services. Gartner, Inc. has recognized Palo Alto Networks as a leader in firewall services; and WHEREAS , the Palo Alto Network firewall product has been budgeted since 2017. The hardware costs are covered by the Information Technology (IT) Technology Replacement budget (10999000-570100) and any annual increases subscriptions will be covered by the IT maintenance budget (01213000-520901); and
WHEREAS , the cost for replacing the firewall hardware, installation, and the three-year subscription and support is $27,199.05.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby authorizes the City Manager to extend the agreement with Savant Solutions, Inc. for firewall hardware and services for an additional three years in a total amount up to $30,000 with the option to renew until the hardware is replaced.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

AYES, COUNCILMEMBERS:_____________________________________________ NOES, COUNCILMEMBERS:_____________________________________________ ABSENT, COUNCILMEMBERS:____________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

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Quote# WH-061223-1
Date: 6/12/23
Terms:NET30
FOB: Destination
1030 G St. Valid for:30 days
Sacramento, CA 95814 Shipping:Ground
(916) 836-8182
[email protected]
Bill To Ship To
City of San Carlos City of San Carlos
Attn: Attn: Will Hoch
600 Elm Street, 600 Elm Street,
San Carlos, CA 94070 San Carlos, CA 94070
Phone: Phone: 650.802.4103
Line #Part No. Description Qty Unit Price Ext. Price
1PAN-PA-450 Palo Alto Networks PA-450 2 $2,900.00 $5,800.00 2PAN-PA-450-BND-CORESEC-3YR
PA-450, Core Security Subscription Bundle (Advanced Threat Prevention, Advanced URL Filtering, Advanced Wildfire, DNS Security and SD-WAN ), 3 years (36 months) term2 $4,340.00 $8,680.00 3PAN-SVC-4HR-450-3YRPA-450, 4-Hour Premium Support, 3 years (36 months), term.2 $2,000.00 $4,000.00 4PAN-PA-400-RACKTRAYRack mountable tray for up to two PA-400s and 4 power adapters for a 4 post rack mount 1 $160.00 $160.00 5PAN-CONSUL T-DAY-FWPalo Alto Networks Professional Services per day4 $2,000.00 $8,000.00 Subtotal: $26,640.00
Notes: Tax: 9.38% $559.05
Credit: $0.00
Shipping: $0.00
Total: $27,199.05
Thank you for giving Savant Solutions the opportunity to support you!Each order helps supports a non-profit in need. www.SavantSolutions.net

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Authorizing the City Manager to Execute an Agreement with Peninsula Clean Energy to Administer City Electric Vehicle Charging Incentives for Existing Multi-Family Buildings in San Carlos.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution authorizing the City Manager to execute an agreement with Peninsula Clean Energy (PCE) to administer City electric vehicle (“EV”) charging incentives for existing multi-family buildings in San Carlos.

FISCAL IMPLICATIONS:

No additional appropriation is necessary at this time. The Fiscal Year (“FY”) 2023-25 Budget includes $100,000 per year for building electrification and EV charging incentives. The attached agreement allocates $100,000 over three years and Peninsula Clean Energy will administer the funds at no cost to the City.

These funds are separate from the $500,000 the City Council recently allocated over the next five years to install EV charging in City owned parking lots and facilities.

BACKGROUND:

Strategy 18 of the Climate Mitigation and Adaptation Plan (CMAP) calls for the City to “support residents and business owners to transition to electric and plug-in hybrid vehicles.” Strategy 18 has the largest greenhouse gas reduction potential of all strategies in the CMAP. Having reliable access to charging at home is seen as an important prerequisite to EV ownership. A study conducted in April 2021 by the UC Davis Institute of Transportation Studies found that the largest reason for EV dissatisfaction was due to a lack of access to at-home charging. While charging in a single-family home requires utilizing any existing 120V, or upgrading to a 240V outlet, there are many types of inherent challenges to installing EV charging in multi-family buildings including:
Technical. There is no single, one-sized solution for multi-family EV charging. Solutions vary depending on charging needs, number of parking spaces, and available electrical capacity.
Cost. There can be high costs per parking space to add EV charging in multi-family buildings, depending on necessary electrical upgrades and distance from the electrical service panel.
Split incentives. In a rental property, the property owner or manager may not have the

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incentive to install EV charging until there is sufficient demand. At the same time tenants may not see EV ownership as viable due to the lack of access to charging. This acts to create a “chicken and egg” effect resulting in multi-family dwelling occupants lagging in EV adoption.

In the CMAP, it is estimated that San Carlos will need roughly 1,400 multi-family parking spaces with EV charging by 2030 to meet future EV demand. Recognizing this, CMAP Strategy 18 contains the following actions:
Increase the installation of electric vehicle charging infrastructure throughout San Carlos by supporting PCE’s Electric Vehicle Ready Program and other existing or future programs.
Provide incentives encouraging electric vehicle and plug-in hybrid vehicle use by working with local, regional, and state partners and agencies like PCE and Bay Area Air Quality Management District (BAAQMD).
Work closely with multi-family dwelling units to install electric vehicle charging stations.

In addition, the City Council’s 2023 Strategic Plan includes the goal to support sustainability initiatives and address climate change, which includes the action to work with PCE to administer funds for EV charging incentive programs in multi-family buildings. To accomplish this action, the City Council established a $100,000 per year fund for building electrification and EV charging incentives in the FY 2022-23 Budget. This fund is separate from the $500,000 that the Council allocated in the most recent FY 2023-25 budget to install EV charging in City-owned parking lots and facilities over the next five years.

PCE currently administers its EV Ready Program that provides technical assistance and financial incentives for multi-family and non-residential buildings to install electric vehicle charging across San Mateo County. To date the PCE EV Ready Program has completed two projects in San Carlos. Given this existing program, City staff determined that the most cost-effective and expedient manner to distribute City incentive funds is to enter into an agreement with Peninsula Clean Energy to administer the funds on the City’s behalf.

ANALYSIS:

Under the attached agreement, $100,000 would be distributed as a 50% match on any incentives paid by PCE’s EV Ready Program to projects completed at existing multi-family buildings in San Carlos. For example, if Peninsula Clean Energy provides a rebate of up to $10,000 for the installation of five EV charging ports at a multi-family building, the San Carlos rebate will be up to an additional $5,000, for a total rebate of up to $15,000. This additional City funded incentive can act to enhance PCE’s EV Ready Program and encourage a more rapid transition to EVs to achieve the goals within the CMAP.

To be eligible for City funding, a project would need to qualify and adhere to all of Peninsula Clean Energy’s EV Ready program standards and requirements. City funds would be layered on top of any other State and local incentives and could not exceed $20,000 per project or up to 100% of the total project costs. Under the agreement the $100,000 would be paid to PCE upfront and administered over three years or until funds expire. The City will then invoice PCE for any remaining funds after three years. By using this fund allocation method and adopting the same

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eligibility requirements as the EV Ready Program, PCE has offered to administer the funds at no cost to the City. To support participation in the program, City staff plan to leverage its traditional communication channels and other avenues of direct engagement with multi-family property owners to market the EV Ready Program and the additional City incentives to encourage participation. Per the agreement with the City, PCE would report progress every six months, including how many projects are funded, the number of chargers installed, and the City’s contribution per charging port.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt the Resolution authorizing the City Manager to execute an agreement with Peninsula Clean Energy; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Nil Blackburn, Assistant City Manager
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Proposed agreement with Peninsula Clean Energy

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH PENINSULA

CLEAN ENERGY TO ADMINISTRATOR CITY ELECTRIC VEHICLE CHARGING INCENTIVES FOR EXISTING MULTI-FAMILY BUILDINGS IN SAN CARLOS.

WHEREAS, in September 2021 the San Carlos City Council adopted the Climate Mitigation and Adaptation Plan that includes the goal to reduce San Carlos’ emissions 40% by 2030 and 80% by 2050 relative to 1990 levels; and
WHEREAS, Strategy 18 of the Climate Mitigation and Adaptation Plan encourages residents’ and business owners’ transition to electric and plug-in hybrid vehicles; and WHEREAS, promoting access to dedicated, at-home charging is a critical mechanism to enable electric vehicle (“EV”) adoption; and
WHEREAS, the 2023 Council Strategic Plan includes the goal to support sustainability initiatives and address climate change; and
WHEREAS, the City Council has allocated funds for EV charging and building electrification incentives; and
WHEREAS, the City recognizes that the most cost-effective and expedient manner to ensure that incentives are delivered to the community is through entering into an agreement with Peninsula Clean Energy as the program’s administrator.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council authorizes the City Manager to execute and agreement with Peninsula Clean Energy to administer City electric vehicle charging incentives for existing multi-family buildings in San Carlos. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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Agreement for Professional Services 1 Revised 04/08/2022

AGREEMENT FOR PROFESSIONAL SERVICES

This Agreement is made and entered into as of __________________ by and between the City of San Carlos hereinafter called "CITY" and PENINSULA CLEAN ENERGY AUTHORITY hereinafter called "CONSULTANT".

RECITALS

This Agreement is entered into with reference to the following facts and circumstances:

A. That CITY desires to engage CONSULTANT to render certain professional services in the CITY;

B. That CONSULTANT is qualified to provide such services to the CITY and;

THEREFORE, the CITY has elected to engage the services of CONSULTANT upon the terms and conditions as hereinafter set forth.

1. Services. The services to be performed by CONSULTANT under this Agreement shall include those servic es set forth in Exhibit A, which is, by this reference, incorporated herein and made a part hereof as though it were fully set forth herein.

Performance of the work specified in said Exhibit A is hereby made an obligation of CONSULTANT under this Agreemen t, subject t o any changes that may be made subsequently hereto upon the mutual written agreement of the said parties.

Where in conflict, the terms of this Agreement supersede and prevail over any terms set forth in Exhibit A.

2. Term; Termination. (a) The term of this Agreement shall commence upon the date hereinabove written and shall expire after three (3) years, upon completion of performance of services hereunder by CONSULTANT, upon exhaustion of funds as d escribed in Exhibit A , or upon termination of CONSULTANT’S EV Ready Program . (b) Notwithstanding t he provisions of (a) above, CITY may terminate this Agre ement without cause by giving written notice not less than ten (10) days prior to the effec tive date of termination, which date shall be included in said notice. In the event of such termination, CITY shall compensate CONSULTANT for services rendered, and reimburse CONSULTANT for costs and expenses incurred, to the date of termination, calculate d in accordance with t he provisions of paragraph 3. In ascertaining the services actually rendered to the dat e of termination, consideration shall be given both to c ompleted work and work in process of completion. Nothing herein contained shall be deemed a

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Agreement for Professional Services 2 Revised 04/08/2022 limitation upon the right of CITY to terminate this Agreement for cause, or otherwise to exercise such right s or pursue such remedies as may accrue to CITY hereunder.

3. Compensation; Expenses; Payment . CITY shall not compensate CONSULTANT for services performed b y CONSULTANT hereunder, however, CITY shall provide the full and complete amount of incentive funds as set forth in Exhibit A hereof, attached hereto and by this reference incorporated herein.

Notwithstanding the foregoing, the total amount payable hereunder shall not exceed the sum of One Hundred Thou sand Dollars ($100,000), to be used entirely for incentives as described in Exhibit A, unless the performance of services a nd/or reimbursement of costs an d expenses in excess of said am ounts have been approved in advance of performing such services or incurring such costs an d expenses by CITY’s City Manager (for contracts less than $75 ,000 or authorized by City Council action for contracts $75,000 or more by motion duly made and carried).

4. Additional Services . In the event CITY desires the performance of additional services not otherwise included within the services described in Exhibit A, such services shall be authori zed in advance of t he performance thereof by CITY’s City Manager (f or contrac ts less than $75,000 or authorized by City Council action for contracts $ 75,000 or more by motion duly made and carried ). Such amendment to this Agreement shall include a descript ion of the services to be per formed thereunder, the maximum compens ation and reimbursement of costs and expenses payable there for, the time of performan ce thereof, and such other matters as the parties deem appropr iate for the accomplishment of such services. Any additional services causing the total contract price to exceed $75,000, shall require approval by the City Council. Except to the extent modifi ed by written amendment, all other terms and conditions of this Agreement shall be deemed incorporated in each such amendment.

5. Records. CONSULTANT shall keep and maint ain accurate records of all time expended and costs and expenses incurred relating to services to be performed by CONSULTANT hereunder. Said record s shall be available to CITY for review an d copying during re gular busi ness hours at CONSULTANT’s place of bu siness or as otherwise agreed upon by the parties.

6. Authorization. This Agreement becomes effective when endorsed by both parties in the space provided below.

7. Reliance on Profession al Skill of CONSULTANT. CONS ULTANT represents that it has the nece ssary prof essional skills to perform the

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Agreement for Professional Services 3 Revised 04/08/2022 services required and the CITY shall rely on such skills of the CONSULTANT to do and perform the work. In performing services hereunder CONSULTANT shall adhere to the standards generally prevailing for the performan ce of expe rt consulting services similar to those to be performed by CONSULTANT hereunder. CONSULTANT acknowledges the importance to CITY of the s kill, competency, ability to appropriately work with CITY sta ff and exp ertise of individual staff assigned to the proje ct, and accordingly the individuals assigned to the Project must be acceptable to CITY.

9. Relationship of Parties . It is understood th at the relationship of CONSULTANT to the CITY is that of an i ndependent c ontractor and all persons working for or under the direction of CONSULTANT are its agents or employees and not agents or employees of the CITY.

10. Schedule. CONSULTANT shall adhere to the schedule set forth in Exhibit A; p rovided, that CITY shall gran t r easonable extensions of time for the performance of such services occasioned by governmental reviews of CONSULTANT’s work product or other unavoidable delays; provided, further, that such unavoidable delay shall not include strikes, lockouts, work stoppages, or other labor disturbances conducted by, or on behalf of, CONSULTANT’s officers or employees.

CONSULTANT acknowledges the importance to CITY of CITY’s Project schedule and agrees to put forth its best professional effor ts to perform its services under this Agreement in a manner consistent with that schedule.

11. Indemnity. Each party shall indemnify, defend, and hold harmless the other, including each Party’s officers, employees, agents and volunteer s from and against all liabil ity, loss, damage, expense, and cos t arising out of, or in connection with, either Party’s performance of work hereunder except such loss or damage caused by the active negl igence or w illful misconduct of either Party. It is expressly understood and agreed that the foregoing provis ions are intended to be as broad and inclusive as is permitted by the law of the State of California and will survive termination of this A greement. Nothing herein con tained shall be construed to contravention of Section 2782 of the California Civil Code.

12. Insurance. CONSULTANT shall acquire and maintain Workers’ Compensation, employer’s liability, commercial general liability, owned and non -owned and hired automobile liability, and p rofessional liability insurance cover ing risks relating to CONSULTANT’s se rvices to be performed hereunder in form subject to the approv al of the City Attorney and/or CITY’s Risk Manager. The minimu m amounts of coverage corresponding to the aforesaid categ ories of insurance per insurable event, shall be as follows:

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Agreement for Professional Services 4 Revised 04/08/2022

Insurance Category Minimum Limits

Workers’ Compensation statutory minimum

Employer’s Liability $1,000,000 per accident for bodily i njury or disease. CONSULTANT shall submit
to City a Waiver of Subrogation
endorsement in favor of City, its officers,
agents, employees, and volunteers.

Commercial General Liability $1,000,000 per occurrence for bodil y injury, personal injury, and property
damage, including w ithout limitation,
blanket contractual liability and
coverage for explosi on, col lapse and
underground property damage hazards.

If a gen eral aggregate limit applies,
either the general aggregate lim it shall
apply separately to this project/location
or the g eneral aggregate limit shall be
twice the required occurrence limit.

Coverage must be at least as broad as
Insurance Services Office fo rm CG 00

01. Automobile Liability $1,000,000 per accident for bodily injury and property damage (coverage
required to th e extent applicable to
CONSULTANT’s vehicle usage in
performing services hereunder)

Professional Liability1 $1,000,000 per claim and if a general aggregate limit applies, general
aggregate limit s hall be twice the
required occurrence limit.

1 Note: Professional liabili ty insurance coverage is not required if the contractor/v endor/consultant is not providing a service regulated by the state. (Examples of service providers regulated by the state are insurance agent s, professional engineers, doctors, certified public acco untants, lawyers, etc .) Please check and initial the fol lowing if professional liability is NOT required for this agr eement.  Recommended ______ [Project Manager]  Approved _______[Risk Manager]

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Agreement for Professional Services 5 Revised 04/08/2022 of commercial general liability and automobile liability insurance coverage, original endorsements:

(a) Precluding cancellati on or reduction in per occurrence li mits before the expiration of thirty (30) days (10 days for nonpayment) after City shall ha ve received written notification of cancellation in coverage or reduction in per occurrence limits by first class mail;

(b) CONSULTANT’s general liability policies shall be primary and non- contributory, and be endorsed using Insurance Services Office form CG 20 10 to provide that City and its officers, officials, employees, and agents shall be additional insured under such policies . An endorsement providing complete d operations coverage for t he additional insured, ISO form CG 20 37, is also required.

Claims Made Policies
If any of the required policies provide claims-made coverage:

1. The Retroactive Date must be shown, and must be b efore the date of the contract or the beginning of contract work.

2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

3. If coverage is canceled or n on-renewed, and not replaced with an other claims-made policy fo rm with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work.

Verification of Coverage
Consultant shall furnish the CITY with original certificates and amendatory endorsements effecting co verage required by this clause. All certificates and endor sements are to be received and approved by the CITY before work commen ces. Howe ver, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The CITY reserves the right to require c omplete, certified copies of all required insurance policies, includin g endorsements required by these specifications, at any time.

Waiver of Subrogation
Consultant hereby grants to CITY a waiver of any right to subrogation which any insurer of said Cons ultant may acquire against the CITY by virtue of the payment of any lo ss under s uch insurance. This provi sion applies regardless of whether or not the CITY has requested or received a waiver of subrogation endorsement from the insurer.

Acceptability of Insurers

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Agreement for Professional Services 6 Revised 04/08/2022 Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.

Special Risks or Circumstances
CITY reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Coverage
It is a requirement under this agreement that any available insurance proceeds broader th an or in excess of the specified minimum insurance coverage requirements and/or limits shall be made available to the Additional Insured an d shall be (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy, whichever is greater.

Primary and Non-Contributory Coverage
The Additional Insured coverage u nder the Consultant’s poli cy shal l be “primary and non-contributory” as will not seek contribution from the CITY insurance or self-insurance and shall be at least as broad as C G 20 01 04

12. Excess Insurance
The limits of insurance required in t his agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that su ch coverage shall also apply on a primary and noncontributory basis for the bene fit of CITY before the CIT Y insurance or self -insurance shall be called upon to protect it as a named insured.

13. Workers’ Compensation. CONSULTANT acknowledges and c ertifies awareness of the provisions of the Labor Code of the State of California which require every empl oyer to be insured against liability for workers' compensation or to undertake self -insurance in accordance with the provisions of that Code, and CONS ULTANT certifies and agrees to compliance with such provisions before commencing the performance of the work of this agreement.

14. Subcontractors (If applicable). CONSULTANT agrees to include with all subcontractors in their subcontracts the same requi rements and provisions of this agreement including the indemnity and I nsurance requirements to the extent they apply to the scope of the Subcontractors’ work. Subcontractors hired by CONSULTANT a gree to be bound to CONSULTANT and CITY in the same manner a nd to the same extent as CONSULTANT is bound to CITY under the Contrac t document s.

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Agreement for Professional Services 7 Revised 04/08/2022 Subcontract shall agre e to in clude these same pro visions in any agreement with a sub -subcontractor. CONSULTANT shall require all subcontractors to provide a valid certific ate of insurance and the required endorsements included in the agreeme nt prior t o commencement of any work and will provide proof of compliance to the CITY.

Subcontractor shall agree to be bound to CONSULTANT and CITY in the same manner and to the same e xtent as CONSUTLANT is bound to CITY under the Contract Documents. Su bcontractor shall further agree to include the same requirements and provisions of this agreement, including the indemnity and Insurance requirements, with a Sub -subcontractor to the ext ent they apply to the scope of the Sub -subcontractors’ work. A copy of the CITY Contract Document Indemnity and Insurance provisions shall be furnished to the subcontractor upon request.

15. Non-Discrimination. The CONSULTANT hereby assures that it wi ll comply with Subchapter VI of the Civil Rights Act of 1964, 42 USC Section 2000 (e)(17), to the end that CONSULTANT will not exclud e any person from participation in, be denied the benefits of, or be otherwise subject to discrimination from any project, program, or activity supported by this Agreement, based on the grounds of race, color, national origin, se x, disability, age, or reli gion,. CONSULTANT shall comply with its EEO Certification (Form PW-7). In addition, CONSUTLANT will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. The CONSULTANT ensures that applicants are employed and the em ployees are treated during employment without regard to thei r race, color, religion, sex or national origin. Such action shall include, but not be limite d to th e following:
employment, advancement, demotion, transfer, recruitment, or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONSULTANT shall at all times be in compliance with the requirements of the Federal Americans With Disabilities Act (Public Law 101 -336) which prohibits discrimination on the basis of disability by public entities. The CONSULTANT agrees to post in con spicuous places available to employees and applicants for employm ent any notices provided by the CITY setting forth the provisions of this non-discrimination clause.

15. Notice. All noti ces required by this Agreement shall be given to the CITY and CONSUL TANT in writing, by first class m ail, postage prepaid, addressed as follows:

CITY: City of San Carlos
600 Elm Street
San Carlos, CA 94070

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Agreement for Professional Services 8 Revised 04/08/2022 Attention: Adam Lokar

CONSULTANT: ____________________________
(Fill in CONSULTANT Name, Address, Phone
Number, and Project Manager for

CONSULTANT)

16. Non-Assignment. This Ag reement is not assignable either in w hole or in part.

17. Amendments. This Agreement may be amended or modified only by written agreement signed by both parties.

19. Validity. The invalidity in whole or in part of any provision of thi s Agreement shall not void or affect the validity of any other provision of this Agreement.

20. Governing Law . This Agreement shall be govern ed by the laws of the State of California and any sui t or action initiated by either party shall be brought in th e County of San Mateo, California. In the event of litigation between the parties hereto to enforce any provision of the Agreement, the unsuccessful party will pay the reasonable attorney’s fees and expenses of litigation of the successful party.

21. Mediation. Should any dispute arise out of this Agreem ent, the parties shall me et in mediation and attem pt to re ach a resolution with the assistance of a mutually acceptable mediator. Neither party shall be permitted to file legal action without first meeti ng in mediation and making a good faith attempt to r each a mediated resolutio n. The costs of the mediator, if any, shall be paid equally by th e parties. If a mediated settlement is reached neith er party shall be deemed the prevailing party for purposes o f the settlement and each party shall bear its own l egal costs. If a party r efuses or fails to partic ipate in mediation in good faith prior to filing a lawsuit, then that party shall be barred fr om recovery of attorneys fees and costs of suit.

23. Entire Agreement . Each party acknowledges that this a greement, the exhibits hereto, and the documen ts i ncorporated by refere nce here in constitute the complete agreeme nt and exclusive statement of the terms and condition s between the parties, which supersedes and merges all prior proposals, understandings and all other agreements, verbal and written, between the partie s relating to the subject matter of this

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Agreement for Professional Services 9 Revised 04/08/2022 agreement. This agreement may not be modified or altered except by written instrument duly executed by both parties.

[SIGNATURE PAGE TO FOLLOW]

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Agreement for Professional Services 10 Revised 04/08/2022

EXHIBIT A

City of San Carlos
Electric Vehicle Charging Incentive Program Details

1. Executive Summary

The City of San Carlos (City) has allocated $100,000 for the City of San Carlos Electric Vehicle (EV) Charging Incentive Program (Program) and has designated Peninsula Clean Energy (PCE) as the administrator of the Program. Under the Program, the City will provide a 50% match to incentives provided by PCE under its EV Ready charging incentives program. The City-provided match will be combined with PCE’s incentives, up to the limits outlined below. The Program incentive funds are only to be applied to existing multifamily buildings within San Carlos. Funds are available through the term of this agreement or until exhausted, at which point the City may allocate additional funding pending approval from the City Council.

2. Program Goals & Objectives

The City of San Carlos adopted the Climate Mitigation and Adaptation Plan (CMAP) in September 2021 with the goal of reducing greenhouse gas emissions 40% by 2030 and 80% by 2050, relative to 1990 levels. The CMAP includes Strategy 18 that directs the City to “support residents and business owners to transition to electric and plugin hybrid vehicles.” The following actions and goals included within Strategy 18 are to:
• Increase the installation of electric vehicle charging infrastructure throughout San Carlos by supporting PCE’s Electric Vehicle Ready Program and other existing or future programs.
• Provide incentives encouraging electric vehicle and plug-in hybrid vehicle use by working with local, regional, and state partners and agencies like PCE. • Work closely with multi-family dwelling units to install electric vehicle charging stations.
• Work with partner agencies to conduct outreach to car owners and provide information about programs to aid them in the transition to electric vehicles. • Achieve 1,400 multifamily parking spaces with EV charging by 2030.

The City recognizes that the most cost-effective and expedient manner to ensure that this incentive is delivered to the community is through entering into an agreement with PCE as the Program’s administrator.

3. Definitions

1. Affordable Housing – Residential buildings that entirely consist of units below market rate and whose rents or sales prices are governed by local agencies to be affordable based on area median income.

2. Electric vehicle (EV) charging port – a 120V – 240V AC outlet or connector on an electric vehicle supple equipment which charges one vehicle at a time.

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Agreement for Professional Services 11 Revised 04/08/2022

3. Multi-Unit Dwelling (MUD) – Multi-family residential buildings with four or more residential units.

4. Program Eligibility

To be eligible for Program incentives, the applicant must be the owner or Designated Applicant of the MUD where the project will be implemented. In addition, all projects must:

1. Participate in the Peninsula Clean Energy Electric Vehicle Ready Program and comply with all of its Standards and Requirements, which may be found on Peninsula Clean Energy’s website (LINK).

2. Receive incentives through Peninsula Clean Energy Electric Vehicle Ready Program.

3. Be located within the San Carlos city limits.

4. Be implemented in an existing MUD building or existing Affordable Housing Multi-Unit Dwelling.

5. Incentive Amounts

1. The Program incentive funds are available up to 50% of the paid PCE incentive as outlined in the EV Ready Program Standards & Requirements.

For example, if PCE provides a rebate of up to $20,000 for the installation of 10 EV charging ports at an MUD, the San Carlos rebate will be up to an additional $10,000, for a total rebate of up to $30,000, subject to the cap below.

2. The Program funding has a universal cap of $20,000 per project or shall be determined so that combined incentives from any other state or regional programs do not exceed 100% of the total project cost, whichever is less. For example, if the total cost of a project is $30,000 and PCE provides a rebate of $25,000, then the San Carlos rebate would be capped at $5,000 so as not to exceed 100% of the total project cost.

3. The total amount of City-provided incentives will not exceed $100,000.

4. Unless otherwise stated, incentive caps fall under PCE’s cap structure outlined in the EV Ready Program Standards & Requirements. The Program incentive pool is first come, first serve and does not have carve outs for specific property categories.

6. Program Administration

As the administrator of the Program, PCE shall:

1. Deliver the City of San Carlos incentives at no additional cost to the City. The entire balance of this Agreement will be applied as incentives.

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Agreement for Professional Services 12 Revised 04/08/2022

2. Include Program incentive amounts in a separate line item labeled “City of San Carlos Electric Vehicle Charging Incentive” in quotes to eligible Program applicants.

3. Issue Program incentive funds to participants upon completion of EVSE installations and alongside PCE EV Charger Incentives Program.

4. Ensure Program incentive amounts shall be reduced to not exceed the applicable caps in the event Program participants combine incentives from multiple sources such as CALeVIP, BAAQMD Charge!, or any other State or regional incentive that the project is able to secure.

5. PCE shall keep records and track administered funds to ensure they do not exceed available funding.

6. Support the City’s reporting and marketing of the Program by sharing available information about projects, such as photos with customer approval.

7. Submit a bi-annual (every 6 months) report to the City with the following details during the reporting period for each project:

1. Address of project

2. The number and type of EV chargers installed

3. Total cost of project

4. Total cost per port

5. Customer net cost per port (after incentive)

6. Other incentive programs taken advantage of

7. Amount of the City’s Program incentive contribution
The City shall:

1. Disburse Program funding to PCE as a single, one-time lump sum disbursement upon execution of the Agreement.

2. Use its established communication channels including the City website, social media, print mailers, and other tools, to promote the Program to the community.

3. Take no action to claim or otherwise request designation of Low Carbon Fuel Standard Credits (LCFS) from properties receiving incentives.

4. Submit an invoice for reimbursement of any unused portion of the original disbursement upon termination of the Agreement.

7. Additional Funding

At the mutual determination of PCE and the City, the City may provide additional incentive funding for this Program.

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Accepting and Approving the Annual Investment Policy for Fiscal Year 2023-24.

RECOMMENDATION:

Staff recommends that the City Council complete the annual review of the City’s Investment Policy and adopt the attached Resolution accepting and approving the Investment Policy for Fiscal Year 2023-24 (FY 2023-24).

FISCAL IMPLICATIONS:

None.

BACKGROUND:

California Government Code Section 53646(a)(2) requires City Council annual review and approval of the Investment Policy. The City’s Investment Policy was last adopted by the City Council on August 22, 2022 via Resolution 2022-091.

The Investment Policy applies to all financial assets of the City as accounted for in the Annual Comprehensive Financial Report (“ACFR”). Statements outlined in the Investment Policy focus on the City’s pooled funds, but will also apply to all other funds under the Administrative Services Director’s span of control, unless specifically exempted by statute or ordinance. This policy is applicable, but not limited to, the following funds: General Fund; Sewer Fund; Capital Funds; Other Special Revenue Funds; Debt Service Funds; Internal Service Funds; Trust and Custodial Funds; City and County Association of Governments (C/CAG); Peninsula Traffic Congestion Relief Alliance (Commute.org); and any new fund created by the City Council, unless specifically exempted.

The City’s investment portfolio has had an average quarter end balance of approximately $153 million over the past two years. These funds are drawn on throughout the calendar year for normal operating activity, with more significant levels of draw occurring in the 3rd quarter (January – March) and the 1st quarter (July – September). The City’s cash position improves in late December and April due to the receipt of property tax collections from San Mateo County.

The City’s policy and selections have always been more conservative than permitted by State Code, with idle cash invested primarily in the San Mateo County Investment Pool (“SMC Pool”) and the State’s Local Agency Investment Fund (“LAIF”). Although these investment pools do not earn high yields, they satisfy the primary objective of Safety of Principal.

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ANALYSIS:

The only recommended changes are those shown in the red-lined version of the policy (Attachment 2) and summarized below, which will update the policy to align with the California Debt and Investment Advisory Commission (CDIAC) Local Agency Investment Guidelines. The CDIAC reviews and makes changes, if needed, on an annual basis. As noted above, the City invests primarily in the SMC Pool and LAIF so these changes do not have any material impact on the City’s investments.
Updated the Investment Committee serving as the legislative body of the Investment Policy will have the quarterly reports for review within from “thirty days” to “forty-five days” following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code.
Updated the quarterly reports will be submitted to the Investment Committee within from “thirty days” to “forty-five days” following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code.

Updated Bankers Acceptances. Bankers’ acceptances purchased may not exceed 180 days to maturity or 25% of the cost value of the portfolio. Also, no more than 5% of the agency’s money may be in bankers’ acceptances of any one commercial bank.

Added guidance for Commercial Paper. The amount invested in commercial paper of any one issuer in combination with any other securities from that issuer shall not exceed 5% of the portfolio.

Added guidance for Negotiable Certificates of Deposit. The amount invested in NCDs with any one financial institution in combination with any other securities from that financial institution shall not exceed 5% of the portfolio.

Added guidance for Medium Term Corporate Notes. The amount invested in the medium- term notes of any one issuer in combination with any other securities from that issuer shall not exceed 5% of the portfolio.

Added guidance for Treasury Obligations. A maximum of 10% of the portfolio may be invested in this category.

The City’s Investment Committee, consisting of Jeff Maltbie, City Manager; Inge Tiegel, City Treasurer; and Rebecca Mendenhall, Administrative Services Director, has reviewed and approved the revisions recommended to the Investment Policy.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution accepting and approving the Annual Investment Policy for FY 2023- 24; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

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Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Proposed FY 2023-24 Investment Policy.

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

ACCEPTING AND APPROVING THE ANNUAL INVESTMENT POLICY FOR FISCAL YEAR 2023-24.

WHEREAS, California Code Section 53646(a)(2) requires annual review and approval of the Investment Policy by the City Council; and
WHEREAS, the City’s Investment Policy was last adopted by the City Council on August 22, 2022 via Resolution 2022-091; and
WHEREAS, staff recommends the following changes to the Investment Policy at this time other than those that bring the policy in alignment with the California Debt and Investment Advisory Commission’s (CDIAC) Local Agency Investment Guidelines:
Updated the Investment Committee serving as the legislative body of the Investment Policy will have the quarterly reports for review within from “thirty days” to “forty-five days” following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code;
Updated the quarterly reports will be submitted to the Investment Committee within from “thirty days” to “forty-five days” following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code; Updated Bankers Acceptances. Bankers’ acceptances purchased may not exceed 180 days to maturity or 25% of the cost value of the portfolio. Also, no more than 5% of the agency’s money may be in bankers’ acceptances of any one commercial bank; Added guidance for Commercial Paper. The amount invested in commercial paper of any one issuer in combination with any other securities from that issuer shall not exceed 5% of the portfolio;
Added guidance for Negotiable Certificates of Deposit. The amount invested in NCDs with any one financial institution in combination with any other securities from that financial institution shall not exceed 5% of the portfolio;
Added guidance for Medium Term Corporate Notes. The amount invested in the medium- term notes of any one issuer in combination with any other securities from that issuer shall not exceed 5% of the portfolio; and
Added guidance for Treasury Obligations. A maximum of 10% of the portfolio may be invested in this category. The changes will bring the policy in alignment with the California Debt and Investment Advisory Commission (CDIAC) Local Agency Investment Guidelines.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby accepts and approves the Annual Investment Policy for the Fiscal Year 2023-24. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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CITY OF SAN CARLOS

INVESTMENT POLICY
Last Adopted by Council: June 26, 2023
Resolution No. 2023-
POLICY
In accordance with the Municipal Code of the City of San Carlos and under authority granted by the City Council, the City Administrative Services Director is responsible for investing the unexpended cash in the City Treasury.

The investment of the funds of the City of San Carlos is directed to the goals of safety, liquidity and yield. The authority governing investments for municipal governments is set forth in the California Government Code, Sections 53600 through 53686.

The primary objective of the investment policy of the City of San Carlos is Safety of Principal.

Investments shall be placed in those securities as outlined by type and maturity sector in this document. Effective cash flow management and resulting cash investment practices are recognized as essential to good fiscal management and control. The City's portfolio shall be designed and managed in a manner responsive to the public trust and consistent with state and local law. Portfolio management requires continual analysis and as a result the balance between the various investments and maturities may change in order to give the City of San Carlos the optimum combination of necessary liquidity and optimal yield based on cash flow projections.

SCOPE
The investment policy applies to all financial assets of the City of San Carlos as accounted for in the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this document focus on the City of San Carlos' pooled funds, but will also apply to all other funds under the City Administrative Services Director's span of control unless specifically exempted by statue or ordinance. This policy is applicable, but not limited to all funds listed below:
•General Fund •Sewer Fund •Capital Funds •Other Special Revenue Funds, Debt Service Funds, Internal Service Funds •Trust and Custodial Funds •Peninsula Traffic Congestion Relief Alliance (Commute.org) •City and County Association of Governments of San Mateo County (C/CAG) •Any new fund created by the City Council unless specifically exempted.

PRUDENCE
The standard to be used by investment officials shall be that of a "prudent investor" and shall be applied in the context of managing all aspects of the overall portfolio. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like

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City of San Carlos
Investment Policy Page 2
character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.

It is the City's full intent, at the time of purchase, to hold all investments until maturity to ensure the return of all invested principal dollars. However, it is realized that market prices of securities will vary depending on economic and interest rate conditions at any point in time. It is further recognized that in a well-diversified investment portfolio, occasional measured losses are inevitable due to economic, bond market or individual security credit analysis. These occasional losses must be considered within the context of the overall investment program objectives and the resultant long- term rate of return.

The City Administrative Services Director and other individuals assigned to manage the investment portfolio, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, shall be relieved of personal responsibility and liability for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments.

OBJECTIVES
Safety of Principal
Safety of Principal is the foremost objective of the City of San Carlos. Each investment transaction shall seek to ensure that capital losses are avoided, whether from securities default, broker-dealer default or erosion of market value. The City shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk.

Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be mitigated by investing in investment grade securities and by diversifying the investment portfolio so that the failure of any one issuer does not unduly harm the City's capital base and cash flow.

Market risk, defined as market value fluctuations due to overall changes in the general level of interest rates, shall be mitigated by limiting the average maturity of the City's investment portfolio to two years, the maximum maturity of any one security to five years, structuring the portfolio based on historic and current cash flow analysis eliminating the need to sell securities prior to maturity and avoiding the purchase of long term securities for the sole purpose of short term speculation.

Liquidity
Historical cash flow trends are compared to current cash flow requirements on an ongoing basis in an effort to ensure that the City's investment portfolio will remain sufficiently liquid to enable the City to meet all reasonably anticipated operating requirements.

Maturity Matrix
Maturities of investments will be selected based on liquidity requirements to minimize interest rate risk and maximize earnings. Current and expected yield curve analysis will be monitored and the portfolio will be invested accordingly. The weighted average maturity of the pooled portfolio should not exceed two years and the following percentages of the portfolio should be invested in the following maturity sectors:

Maturity Range Suggested Percentage
1 day to 7 days 10 to 50%
7 days to 180 10 to 30%
180 days to 360 days 10 to 30%
1 year to 2 years 10 to 20%
2 years to 3 years 0 to 20%

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City of San Carlos
Investment Policy Page 3
3 years to 4 years 0 to 20%
4 years to 5 years 0 to 20%
Over 5 years Council Authorization Required *
* One exception does exist regarding the investment of bond reserve funds. If in the opinion of the City Administrative Services Director, matching the segregated investment portfolio of the bond reserve fund with the maturity schedule of an individual bond issue is prudent given current economic analysis, the investment policy authorizes extending beyond the five-year maturity limitation as outlined in this document.

PERFORMANCE EVALUATION
Investment performance is monitored and evaluated by the City Investment Advisory Committee.

Investment performance statistics and activity reports are generated on a quarterly basis for presentation to the City Investment Advisory Committee and to the City Council. Annually, a statement of investment policy, and any proposed changes to the policy, will be rendered to the Investment Advisory Committee and then to the City Council for consideration at a public meeting.

The City’s investment portfolio is designed to at least attain a market average rate of return through economic cycles. The market average rate of return is defined as average return on the Local Agency Investment Fund (assuming the State does not adversely affect LAIF’s returns due to budget constraints).

DELEGATION OF AUTHORITY
The Municipal Code of the City of San Carlos and the authority granted by City Council assign the responsibility of investing unexpended cash to the City’s Administrative Services Director. Daily management responsibility of the investment program may be delegated to the Financial Services Manager, who shall establish procedures for the operation consistent with this investment policy.

INVESTMENT COMMITTEE
An investment committee consisting of the City Treasurer, City Manager, and Administrative Services Director shall be established to provide general oversight and direction concerning the policy related to management of the City's investment pool. The Financial Services Manager shall not be a member of the committee but shall serve in a staff and advisory capacity. The committee shall review and approve quarterly investment reports prepared by the Finance Department and reviewed by the Financial Services Manager or meet as necessary to discuss changes to the report or the investment strategy. The Investment Committee serving as the legislative body of the Investment Policy will have the quarterly reports for review within thirty forty-five (3045) days following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code.

ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program, or impairs their ability to make impartial investment decisions. Additionally the Administrative Services Director and the Financial Services Manager are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC).

SAFEKEEPING OF SECURITIES
To protect against fraud or embezzlement or losses caused by collapse of an individual securities dealer, all securities owned by the City shall be held in safekeeping by a third party bank trust department, acting as agent for the City under the terms of a custody agreement. All trades executed by a dealer will settle delivery versus payment (DVP) through the City's safekeeping agent.

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City of San Carlos
Investment Policy Page 4
Securities held custody for the City shall be monitored by the Administrative Services Director to verify investment holdings.

All exceptions to this safekeeping policy must be approved by the City’s Administrative Services Director in written form and included in the quarterly reports to the Investment Committee and the City Council.

INTERNAL CONTROL
Separation of functions between the City’s Administrative Services Director or Financial Services Manager and/or the City Senior Accountant is designed to provide an ongoing internal review to prevent the potential for converting assets or concealing transactions.

Investment decisions are made by the Administrative Services Director, executed by the Administrative Services Director or Financial Services Manager and confirmed by the Senior Accountant. All wire transfers initiated by the Administrative Services Director or Financial Services Manager must be reconfirmed by the appropriate financial institution to the Senior Accountant.

Proper documentation obtained from confirmation and cash disbursement wire transfers is required for each investment transaction. Timely bank reconciliation is conducted to ensure proper handling of all transactions.

The investment portfolio and all related transactions are reviewed and balanced to appropriate general ledger accounts by the Senior Accountant on a monthly basis. An independent analysis by an external auditor shall be conducted annually to review and perform procedure testing on the City’s cash and investments that have a material impact on the financial statements. The Administrative Services Director and/or Investment Committee shall review and assure compliance with investment process and procedures.

REPORTING
The City Administrative Services Director shall review and render quarterly reports to the City Investment Advisory Committee and to the City Council that include the face amount of the cash investment, the classification of the investment, the name of the institution or entity, the rate of interest, the maturity date, the current market value and accrued interest due for all securities. The quarterly reports will be submitted to the Investment Committee within thirty forty-five (3045) days following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code. Once approved by the Investment Committee, the quarterly reports shall be placed on the City Council’s meeting agenda for its review and approval no later than 60 days after the quarter ends. If there are no Council meetings within the 60-day period, the quarterly report shall be presented to the Council at the soonest possible meeting thereafter.

QUALIFIED BROKER/DEALERS
The City shall transact business only with banks, savings and loans, and with broker/dealers. The broker/dealers should be primary or regional dealers. The City’s Administrative Services Director will make exceptions only upon written authorization. The City currently does not maintain a list of broker/dealers approved to do business with the City. When necessary, the City shall go through the Request for Proposal processes to select the broker/dealers. Staff shall investigate dealers wishing to do business with the City to determine if they are adequately capitalized, have pending legal action against the firm or the individual broker and make markets in the securities appropriate to the City's needs. The City’s investment policy shall be made available on the City’s website for broker/dealers’ review.

COLLATERAL REQUIREMENTS
Collateral is required for investments in certificates of deposit. To reduce market risk, the collateral level will be at least 110% of market value of principal and accrued interest.

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City of San Carlos
Investment Policy Page 5

AUTHORIZED INVESTMENTS
Investment of City funds is governed by the California Government Code Sections 53600 et seq.

Within the context of the limitations, the following investments are authorized, as further limited herein:

1. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio that can be invested in this category, although a five-year maturity limitation is applicable.

2. Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, and San Mateo County Investment pool, may be used up to the maximum permitted by California State Law. A review of the pool/fund is required when part of the list of authorized investments, with the knowledge that the pool/fund may include some investments allowed by statute but not explicitly identified in this investment policy.

3. Most mortgage-backed securities are obligations issued by the Government National Mortgage Association (GNMA), the Federal National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corporation (FHLMC). A mortgage passthrough security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond has a maximum five years’ maturity. Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by a nationally recognized statistical rating organization (NRSRO) and have a maximum remaining maturity of five years or less. Purchase of securities authorized by this subdivision shall not exceed 20% percent of the agency’s surplus moneys that may be invested pursuant to this section.

4. Bills of exchange or time drafts drawn on and accepted by commercial banks, otherwise known as bankers’ acceptances. Bankers’ acceptances purchased may not exceed 180 days to maturity or 4025% of the cost value of the portfolio. Also, no more than 305% of the agency’s money may be in bankers’ acceptances of any one commercial bank.

5. Commercial paper ranked the highest letter and number rating by a nationally recognized statistical rating organization (NRSRO), such as Standard and Poor’s Ratings Services, Fitch Ratings, Inc. or Moody’s Investors Services, and issued by domestic corporations having assets in excess of $500,000,000 and having an “A” or better rating on its long term debentures as provided by NRSRO. Purchases of eligible commercial paper may not exceed 270 days to maturity nor represent more than 10% of the outstanding paper of the issuing corporation. Purchases of commercial paper may not exceed 25% of the value of the portfolio. The amount invested in commercial paper of any one issuer in combination with any other securities from that issuer shall not exceed 5% of the portfolio.

6. Negotiable Certificates of Deposit issued by nationally or state chartered banks (FDIC insured institutions) or state or federal savings institutions. Purchases of negotiable certificates of deposit may not exceed 30% of total portfolio. A maturity limitation of five years is applicable. The amount invested in NCDs with any one financial institution in combination with any other securities from that financial institution shall not exceed 5% of the portfolio.

7. Time deposits or placement service deposits, non-negotiable and collateralized in accordance with the California Government Code, may be purchased through banks or

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City of San Carlos
Investment Policy Page 6
savings and loan associations. Since time deposits are not liquid, no more than 50% of the investment portfolio may be invested in this investment type. A maturity limitation of five years is applicable. Effective January 1, 2020, no more than 50 percent of the agency’s money may be invested in deposits, including certificates of deposit, through a placement service as authorized under 53601.8 (excludes negotiable certificates of deposit authorized under Section 53601(i)). On January 1, 2026, the maximum percentage of the portfolio reverts back to 30 percent. Investments made pursuant to 53635.8 remain subject to a maximum of 30 percent% of the portfolio.

8. Medium Term Corporate Notes, with a maximum maturity of five years, may be purchased.

Securities eligible for investment shall be rated “A” or better by an NRSRO. Purchase of medium term notes may not exceed 30% of the market value of the portfolio. The amount invested in the medium-term notes of any one issuer in combination with any other securities from that issuer shall not exceed 5% of the portfolio.

9. Ineligible investments are those that are not described herein, including but not limited to, common stocks and long term (over five years in maturity) notes and bonds are prohibited from use in this portfolio. It is noted that special circumstances arise that necessitate the purchase of securities beyond the five-year limitation. On such occasions, requests must be approved by City Council prior to purchase.

10. Various daily money market funds administered for or by trustees, paying agents and custodian banks contracted by the City of San Carlos may be purchased as allowed under the State of California Government Code. Only funds holding U.S. Treasury or Government agency obligations can be used. A maximum of 10% of the portfolio may be invested in this category.

The following summary of maximum percentage limits, by instrument, are established for the City's total pooled funds portfolio:

Authorized Investment
Type
Government
Code
Maximum
Maturity
Minimum
Credit
Quality
Maximum in
Portfolio
Maximum
Investment in
One Issuer
Local Agency
Investment Fund
(LAIF)
16429.1 Upon
Demand N/A
As permitted by
LAIF (currently $75
million per account)
N/A
San Mateo County
Investment Pool 53684 Upon
Demand N/A
As permitted by
County Treasurer
(currently no limit)
N/A
Treasury Obligations
(bills, notes & bonds) 53601(b) 5 Years N/A 100% N/A10% US Government
Agency and Federal
Agency Securities
53601(f) 5 Years N/A 100% N/A
Mortgage Pass-
Through Securities or
Mortgage-Backed
Securities
53601(o) 5 years (C) 20% N/A
Bankers’ Acceptances 53601(g) 180 Days N/A 4025% (B)
Commercial Paper 53601(h) 270 Days Highest
letter and 25% (A)

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City of San Carlos
Investment Policy Page 7
number
rating by
an
NRSRO
Negotiable Certificates
of Deposit 53601(i) 5 Years N/A 30% N/A5%
Placement Service
Deposits – Deposits or
Certificates of
Deposits
53601.8 and
53635.8 5 Years N/A 50% N/A
Medium Term
Corporate Notes 53601(k) 5 Years A 30% N/A5%
(A) 105% of outstanding paper of issuing corporation
(B) No more than 305% of the agency’s money may be in bankers’ acceptances of any one commercial bank.
(C) Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO.

DERIVATIVE INVESTMENTS
Derivatives are investments whose value is "derived" from a benchmark or index. That benchmark can be almost any financial measure from interest rates to commodity and stock prices. The use of derivatives is prohibited under this policy.

LEGISLATIVE CHANGES
Any State of California legislative action that further restricts allowable maturities, investment type, or percentage allocations will be incorporated into the City of San Carlos' Investment Policy and supersede any and all previous applicable language.

INTEREST EARNINGS
All moneys earned and collected from investments authorized in this policy shall be allocated quarterly to various fund accounts based on the cash balance in each fund at quarter end as a percentage of the entire pooled portfolio.

LIMITING MARKET VALUE EROSION
The longer the maturity of securities, the greater their market price volatility. Therefore, it is the general policy of the City to limit the potential effects from erosion in market values by adhering to the following guidelines:

All immediate and anticipated liquidity requirements will be addressed prior to purchasing all investments.

Maturity dates for long-term investments will coincide with significant cash flow requirements where possible, to assist with short term cash requirements at maturity.

All long-term securities will be purchased with the intent to hold all investments to maturity under then prevailing economic conditions. However, economic or market conditions may change, making it in the City's best interest to sell or trade a security prior to maturity.

PORTFOLIO MANAGEMENT ACTIVITY
The investment program shall seek to augment returns consistent with the intent of this policy, identified risk limitations and prudent investment principals. These objectives will be achieved by use of the following strategies:

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City of San Carlos
Investment Policy Page 8
Active Portfolio Management. Through active fund and cash flow management, taking advantage of current economic and interest rate trends, the portfolio yield may be enhanced with limited and measurable increases in risk by extending the weighted maturity of the total portfolio.

Portfolio Maturity Management. When structuring the maturity composition of the portfolio, the City shall evaluate current and expected interest rate yields and necessary cash flow requirements. It is recognized that in normal market conditions longer maturities produce higher yields. However, the securities with longer maturities also experience greater price fluctuations when the level of interest rates change.

Security Swaps. The City may take advantage of security swap opportunities to improve the overall portfolio yield. A swap, which improves the portfolio yield, may be selected even if the transactions result in an accounting loss. Documentation for swaps will be included in the City's permanent investment file documents.

Competitive Bidding. It is the policy of the City to require competitive bidding for investment transactions that are not classified as "new issue" securities. For the purchase of non-"new issue" securities and the sale of all securities at least three bidders must be contacted. Competitive bidding for security swaps is also suggested, however, it is understood that certain time constraints and broker portfolio limitations exist that would not accommodate the competitive bidding process. If a time or portfolio constraining condition exists, the pricing of the swap should be verified to current market conditions and documented for auditing purposes.

POLICY REVIEW
The City of San Carlos' investment policy shall be adopted by resolution of the City Council on an annual basis. This investment policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of principal, liquidity and yield, and its relevance to current law and financial and economic trends. Any amendments to the policy shall be forwarded to City Council for approval.

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City of San Carlos
Investment Policy Page 9
Glossary of Terms
Accrued Interest: Interest earned but not yet received.

Active Deposits: Funds that are immediately required for disbursement.

Amortization: An accounting practice of gradually decreasing (increasing) an asset's book value by spreading its depreciation (accretion) over a period of time.

Asked Price: The price a broker dealer offers to sell securities.

Basis Point: One basis point is one hundredth of one percent (.01).

Bid Price: The price a broker / dealer offers to purchase securities.

Bond: A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.

Bond Swap: Selling one bond issue and buying another at the same time in order to create an advantage for the investor. Some benefits of swapping may include tax-deductible losses, increased yields, and an improved quality portfolio.

Book Entry Securities: Securities, such stocks held in “street name,” that are recorded in a customer’s account, but are not accompanied by a certificate. The trend is toward a certificate-free society to cut down on paperwork and to diminish investors’ concerns about the certificates themselves. All the large New York City banks, including those that handle the bulk of the transactions of the major government securities dealers, now clear most of their transactions with each other and with the Federal Reserve through the use of automated telecommunications and the “book-entry” custody system maintained by the Federal Reserve Bank of New York. These banks have deposited with the Federal Reserve Bank a major portion of their government and agency securities holdings, including securities held for the accounts of their customers or in a fiduciary capacity. Virtually all transfers for the account of the banks, as well as for the government securities dealers who are their clients, are now effected solely by bookkeeping entries. The system reduces the costs and risks of physical handling and speeds the completion of transactions.

Bearer and Registered Bonds: In the past, bearer and registered bonds were issued in paper form.

Those still outstanding may be exchanged at any Federal Reserve Bank or branch for an equal amount of any authorized denomination of the same issue. Outstanding bearer bonds are interchangeable with registered bonds and bonds in “book-entry” form. That is, the latter exist as computer entries only and no paper securities are issued. New bearer and registered bonds are no longer being issued. Since August 1986, the Treasury’s new issues of marketable notes and bonds are available in book-entry form only. All Treasury bills and more than 90% of all other marketable securities are now in book-entry form. Book-entry obligations are transferable only pursuant to regulations prescribed by the Secretary of the Treasury.

Book Value: The value at which a debt security is shown on the holder's balance sheet. Book value is acquisition cost less amortization of premium or accretion of discount.

Broker: In securities, the intermediary between a buyer and a seller of securities. The broker, who usually charges a commission, must be registered with the exchange in which he or she is trading, accounting for the name registered representative.

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City of San Carlos
Investment Policy Page 10
Certificate of Deposit: A deposit insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) at a set rate for a specified period of time.

Collateral: Securities, evidence of deposit or pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposit of public moneys.

Comprehensive Annual Financial Report (CAFR): The official annual financial report for the City. It includes five combined statements and basic financial statements for each individual fund and account group prepared in conformity with Generally Accepted Accounting Principles (GAAP).

Constant Maturity Treasury (CMT): An average yield of a specific Treasury maturity sector for a specific time frame. This is a market index for reference of past direction of interest rates for the given Treasury maturity range.

Coupon: The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value.

Credit Analysis: A critical review and appraisal of the economic and financial conditions or of the ability to meet debt obligations.

Current Yield: The interest paid on an investment expressed as a percentage of the current price of the security.

Custody: A banking service that provides safekeeping for the individual securities in a customer's investment portfolio under a written agreement that also calls for the bank to collect and pay out income, to buy, sell, receive and deliver securities when ordered to do so by the principal.

Delivery vs. Payment (DVP): Delivery of securities with a simultaneous exchange of money for the securities.

Discount: The difference between the cost of a security and its value at maturity when quoted at lower than face value.

Diversification: Dividing investment funds among a variety of securities offering independent returns and risk profiles.

Duration: The weighted average maturity of a bond's cash flow stream, where the present value of the cash flows serve as the weights; the future point in time at which on average, an investor has received exactly half of the original investment, in present value terms; a bond's zero-coupon equivalent; the fulcrum of a bond's present value cash flow time line.

Fannie Mae: Trade name for the Federal National Mortgage Association (FNMA), a U.S. sponsored corporation.

Federal Reserve System: The central bank of the U.S. that consists of a seven member Board of Governors, 12 regional banks and approximately 8,000 commercial banks that are members.

Federal Deposit Insurance Corporation (FDIC): Insurance provided to customers of a subscribing bank that guarantees deposits to a set limit (currently $250,000) per account.

Fed Wire: A wire transmission service established by the Federal Reserve Bank to facilitate the transfer of funds through debits and credits of funds between participants within the Fed system.

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City of San Carlos
Investment Policy Page 11
Freddie Mac: Trade name for the Federal Home Loan Mortgage Corporation (FHLMC), a U.S. sponsored corporation.

Ginnie Mae: Trade name for the Government National Mortgage Association (GNMA), a direct obligation bearing the full faith and credit of the U.S. Government.

Inactive Deposits: Funds not immediately needed for disbursement.

Interest Rate: The annual yield earned on an investment, expressed as a percentage.

Investment Agreements: An agreement with a financial institution to borrow public funds subject to certain negotiated terms and conditions concerning collateral, liquidity and interest rates.

Liquidity: Refers to the ability to rapidly convert an investment into cash.

Market Value: The price at which a security is trading and could presumably be purchased or sold.

Maturity: The date upon which the principal or stated value of an investment becomes due and payable.

Nationally Recognized Statistical Rating Organizations (NRSRO): A U.S. Securities & Exchange Commission registered agency that assesses the creditworthiness of an entity or specific security.

NRSRO typically refers to Standard and Poor’s Ratings Services, Fitch Ratings, Inc. or Moody’s Investors Services.

New Issue: Term used when a security is originally "brought" to market.

Perfected Delivery: Refers to an investment where the actual security or collateral is held by an independent third party representing the purchasing entity.

Portfolio: Collection of securities held by an investor.

Primary Dealer: A group of government securities dealers that submit daily reports of market activity and security positions held to the Federal Reserve Bank of New York and are subject to its informal oversight.

Purchase Date: The date in which a security is purchased for settlement on that or a later date.

Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

Repurchase Agreement (REPO): A transaction where the seller (bank) agrees to buy back from the buyer (City) the securities at an agreed upon price after a stated period of time.

Reverse Repurchase Agreement (REVERSE REPO): A transaction where the seller (City) agrees to buy back from the buyer (bank) the securities at an agreed upon price after a stated period of time.

Risk: Degree of uncertainty of return on an asset.

Safekeeping: See Custody.

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City of San Carlos
Investment Policy Page 12
Sallie Mae: Trade name for the Student Loan Marketing Association (SLMA), a U.S. sponsored corporation.

Secondary Market: A market made for the purchase and sale of outstanding issues following the initial distribution.

Settlement Date: The date on which a trade is cleared by delivery of securities against funds.

Time Deposit: A deposit in an interest-paying account that requires the money to remain on account for a specific length of time. While withdrawals can generally be made from a passbook account at any time, other time deposits, such as certificates of deposit, are penalized for early withdrawal.

Treasury Obligations: Debt obligations of the U.S. Government that are sold by the Treasury Department in the forms of bills, notes, and bonds. Bills are short-term obligations that mature in one year or less. Notes are obligations that mature between one year and ten years. Bonds are long-term obligations that generally mature in ten years or more.

U.S. Government Agencies: Instruments issued by various US Government Agencies most of which are secured only by the credit worthiness of the particular agency.

Yield: The rate of annual income return on an investment, expressed as a percentage. It is obtained by dividing the current dollar income by the current market price of the security.

Yield to Maturity: The rate of income return on an investment, minus any premium or plus any discount, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond, expressed as a percentage.

Yield Curve: The yield on bonds, notes or bills of the same type and credit risk at a specific date for maturities up to thirty years.

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Authorizing the City Manager to Execute a Two- Year Lease Agreement for Office Space at the San Carlos Library Building with the Friends of the San Carlos Library (FOSCL), with the Option to Extend for an Additional Three Years.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution to authorize the City Manager to execute a two-year lease agreement with the Friends of the San Carlos Library (FOSCL) for office space at the San Carlos Library building, with the option to extend for an additional three years.

FISCAL IMPLICATIONS:

Currently, FOSCL occupies Suite 209 as a tenant in the office space at the San Carlos Library.

FOSCL seeks to establish a new contract to continue using the space. The proposed annual lease revenue from FOSCL for the first two years is $44,040 annually. These funds are expected to come from financial contributions to the Library in the form of credits. On an annual basis, FOSCL will submit a report of the house and grants contributed to the San Carlos library. If approved by the City Council, the lease will include an option to extend for an additional three years, with a

3.5% rate increase for each subsequent year of the lease agreement.

BACKGROUND:

The second floor of the San Carlos Library building is designated for renting to non-profit and government-related organizations. The FOSCL wishes to lease Suite 209, their current leased location. The previous lease agreement started in 2016 and ended in 2020. Since then, we have been operating on a month-to-month basis.

ANALYSIS:

The tenant space is 1,835 square feet in area, located on the second floor of the library building.

The FOSCL lease includes:
•A two-year initial lease term
•The option to extend for up to three additional years under the same terms with the authorization of the City Manager
•An annual rental rate of $44,040
•If the extension option is exercised, the rental rate will be subject to a 3.5% annual increase
All other provisions of the lease align with the terms and conditions of other library tenants, with

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the exception that the FOSCL will not be required to reimburse the City for basic janitorial services and utilities.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing the City Manager to execute a two-year lease agreement for office space at the San Carlos Library Building with the FOSCL, with the option to extend for an additional three years; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Cristian Padilla, Economic Development Coordinator; and Al Savay, Community Development Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Lease between the City of San Carlos and the FOSCL

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE CITY MANAGER TO EXECUTE A TWO-YEAR LEASE AGREEMENT

FOR OFFICE SPACE AT THE SAN CARLOS LIBRARY BUILDING WITH FRIENDS OF THE

SAN CARLOS LIBRARY, WITH THE OPTION TO EXTEND FOR AN
ADDITIONAL THREE YEARS.

WHEREAS, the Friends of the San Carlos Library (FOSCL) currently occupies Suite 209 as the tenant in the office space at the San Carlos Library building; and WHEREAS, FOSCL seeks to establish a new lease agreement to continue utilizing the office space; and
WHEREAS, the proposed annual lease revenue from FOSCL for the first two years is $44,040 annually, to be funded through financial contributions in the form of credits made to the Library; and
WHEREAS, the lease agreement includes an option to extend for an additional three years, with a 3.5% rate increase for each subsequent year of the lease agreement; and WHEREAS, the tenant space in question is 1,835 square feet in area, located on the second floor of the library building; and
WHEREAS, per the agreement, the rent payable for this lease shall be $2.00 per square foot (1,835 square feet) totaling $44,040 per year, with an annual rent increase of 3.5% for each subsequent year after the initial term.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council that the City Manager is authorized to execute a lease agreement for 1,835 square feet of office space at the San Carlos Library building with Friends of The San Carlos Library for an initial two-year term, with an option to extend for an additional three-year term, commencing July 1, 2023 and ending on June 30, 2025.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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4855-5261-7834 v1 1

LEASE AGREEMENT
THIS LEASE AGREEMENT (“Lease” or “Lease Agreement”), made and entered into this __th day of ________, 2023 by and between the CITY OF SAN CARLOS ("City"), a California municipal corporation, and the Friends of the San Carlos Library (“Lessee”) executed in the City of San Carlos, County of San Mateo.

WITNESSETH:

The parties hereto mutually agree as follows:

1.Premises. City hereby leases unto Lessee and Lessee hereby hires from City those certain Premises situated in the City of San Carlos, County of San Mateo, State of California, and more particularly described as follows: San Carlos Library, 610 Elm Street, San Carlos, California, 2nd Floor, Suite 209, totaling 1,835 square feet and the caged storage area in the underground parking garage located under 610 Elm Street San Carlos California (“Premises” or “Leased Premises”).

2.Lease Term. To have and hold said Leased Premises, together with the appurtenances, rights, privileges, and easements thereunto belonging or appertaining unto Lessee for a term commencing on the 1st day of July, 2023, and ending on the 30th day of June, 2025 with such rights of termination as are hereinafter set forth with rent payable by Lessees as follows:
•The rent payable for this lease shall be $2.00 per square foot (1,835 square feet) totaling $44,040 per year.
•Credit will be given for the financial contributions made by the Friends of the San Carlos Library or used in support of Library programs to the amount of $44,040 per year.
•When a credit is applied to the lease payment the Lessee is required to submit to the San Carlos City Council via the City Manager an annual financial report for that fiscal year (June 30) the credit was applied which details the amount and specific purposes of money donated by the Lessee to San Carlos Library operations maintenance or other programs or services.
•Said rental shall increase by Three and One-Half Percent (3.5%) on January 1, 2024 and each year thereafter commencing January 1.

The Lease may be extended up to three additional years under the same terms with the authorization of the City Manager. The City and Lessee must mutually agree on lease extensions.

City and Lessee agree that should the library expand to the second floor this lease may be canceled. In such case City agrees to provide a minimum of one hundred eighty (180) days written notice of cancellation.

3.Rental Payment Address. Lessee agrees to pay the said rental to City at the address specified in Paragraph 4, or to such other address as City may designate by a notice in writing.

4.Notices. All notices herein provided to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when hand delivered or sent via overnight courier to:

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4855-5261-7834 v1 2
City at: City Manager
City of San Carlos
600 Elm Street
San Carlos, CA 94070
Lessee at: President
Friends of the San Carlos Library
610 Elm Street, Suite 209
San Carlos, CA 94070

5.Hold Harmless. Lessee does further expressly agree to defend, indemnify and save City, its officers, agents, and employees harmless from any and all claims for loss, damage, injury, or liability of whatsoever nature and howsoever the same may be caused or may arise resulting directly or indirectly from the exercise of this Lease or the occupation of the Premises herein permitted to be used or the Premises of City to which Lessee, its agents, employees, or Lessee may have access by reason of this Lease, other than claims arising from the gross negligence or willful misconduct of City.

6.Prorated Rent. Rent payable hereunder for any period of time less than that for which periodic rent is paid shall be determined by prorating the rent herein specified for the applicable period.

7.City Reimbursement/Personal Property Taxes and Assessments. Lessee shall be responsible for reimbursing the City during the Lease term at a rate 0%, at Lessee’s sole cost, of the actual cost of the following services and utilities:

A. Janitorial services, including but not limited to, regular cleaning of office areas and restrooms, toilet supplies and waste disposal.

C. All utilities, including trash, recycling, water, electrical and gas.

D. Provision of other services may be negotiated at a future date.

E. Charges shall be billed to the Lessee and be due fifteen (15) days after receipt of said billing.

8.Telephone and Internet Services. Lessee shall be responsible for providing its own telephone services and equipment as well as Internet services and equipment during the term of this Lease.

9.Maintenance Repairs and Alterations.

9.1City’s Obligations. Except for damage caused by any negligent or intentional act or omission of Lessee, Lessee’s agents, employees, or invitees, in which event Lessee shall repair the damage, City, at City’s expense, shall keep in good order, condition and repair the foundations, exterior walls, heating, ventilation and air conditioning systems, electrical panel, water main and the exterior roofing surfaces of the Premises.

City shall not, however, be obligated to paint such exterior, nor shall City be required to maintain the interior surface of exterior walls, interior windows, doors or plate glass of the premises. City shall have no obligation to make repairs until a reasonable time after receipt of written notice of the need for such repairs. Request for these repairs and maintenance services shall be submitted to the City of San Carlos Parks Superintendent or designee in a timely manner with a reasonable lead time, except in emergency situations.

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4855-5261-7834 v1 3
The City of San Carlos Parks Superintendent or designee will be the contact for Lessee for any repairs and maintenance services.

9.2Lessee’s Obligations. Lessee accepts the Premises in their “AS IS” condition.

Except as otherwise provided by this Lease, Lessee, at Lessee’s expense, shall keep in good order, condition and repair the Premises and every part thereof (whether or not the damaged portion of the Premises or the means of repairing the same are reasonably or readily accessible to Lessee) except for the foundations, exterior walls, heating, and ventilation systems, water main, electrical panel, exterior roofing surfaces of the Premises and any termite damage that may exist at the commencement of this Lease. Lessee expressly waives the benefit of any statute now or hereinafter in effect which would otherwise afford Lessee the right to make repairs at City’s expense or to terminate this Lease because of City’s failure to keep the Premises in good order, condition and repair.

Lessee shall be entitled to make repairs at its own cost and expense. Lessee is responsible for, and at its sole cost and expense, repairs and maintenance services required by usage of the space including, but not limited, to lamp replacement, painting and modifications.

No structural changes or repairs or maintenance services, including but not limited to lighting fixture replacement, and electrical, mechanical or structural modifications, shall be made without approval of the City of San Carlos Parks Superintendent or designee. Any outside vendor selected by Lessee to perform any repairs or maintenance services including but not limited to lighting fixture replacement and structural, mechanical or electrical modifications shall be approved by the City of San Carlos Parks Superintendent or designee.

9.3Alterations and Additions.
(a) Lessee shall not without City’s prior written consent make any alterations, improvements, additions, and/or Utility Installations within the Premises, exceeding One Thousand Dollars ($1,000.00) in cost.

(b) As used in this section the term “Utility Installation” shall mean bus ducting, power panels, wiring, fluorescent fixtures, space heaters, conduits, air-conditioning and plumbing. City may require that Lessee remove any or all of said alterations, improvements, additions or Utility Installations at the expiration of the term, and restore the Premises to their prior condition. City may require Lessee to provide City, at Lessee’s sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated costs of such improvements, to insure City against any liability for mechanic’s and materialmen’s liens or stop notices and to insure completion of the work. Should Lessee make any alterations, improvements, additions or Utility installations without the prior approval of City, City may require that Lessee remove any or all of such.
(c) Any alterations, improvements, additions or Utility Installations in or about the Premises that Lessee wish to make and which require the written consent of City shall be presented to City in written form with proposed detailed plans. If City shall give its consent the consent shall be deemed conditional upon Lessee’s acquiring of a permit or permits to do so from appropriate agencies, the furnishing of a copy thereof to City prior to the commencement of the work, and the compliance by Lessee of all conditions of said permit or permits in a prompt and expeditious manner.
(d) Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use in the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein, or

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claimed under a stop notice. Lessee shall give City no less than ten (10) days notice prior to the commencement of any work in or on the Premises, and City shall have the right to post notices of non-responsibility in or on the Premises as provided by law. If Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend itself and City against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against City or the Premises, upon the condition that if City shall require, Lessee shall furnish to City a surety bond satisfactory to City in an amount equal to such contested lien claim or demand indemnifying City against liability for the same and holding the Premises free from the effect of such lien or claim. In addition, City may require Lessee to pay City’s attorneys’ fees and costs in participating in such action if City shall decide it is in its best interest to do so.

10.Assignment and Subletting. The Lessee understands that it is leasing space in a government building and that City reserves the right to determine who shall occupy its Premises.

Lessee further covenants and agrees that neither this Lease nor any interest therein shall be assignable or transferable in any proceedings in execution against Lessee, or in any voluntary or involuntary proceedings in bankruptcy, or insolvency taken by or against Lessee, or by process of law applying to such proceedings.

Tenant shall not assign or hypothecate this Lease or any interest therein, sublet the Premises or any part thereof, or permit the use of the Premises by any Party other than Tenant without the prior written consent of Landlord, which consent shall in the sole discretion of Landlord. Any of the foregoing acts without such consent shall be void and shall, at the option of Landlord, be deemed an Event of Default and shall terminate this Lease. Lessee further covenants and agrees that neither this Lease nor any interest therein shall be assignable or transferable in any proceedings in execution against Lessee, or in any voluntary or involuntary proceedings in bankruptcy, or insolvency taken by or against Lessee, or by process of law applying to such proceedings.

10.1 Conditions of Consent. If at any time, or from time to time, during the Term Tenant desires to assign this Lease or sublet part of the Premises, Tenant shall give notice to Landlord setting forth the terms and provisions of the proposed assignment or sublease and the identity of the proposed assignee or subtenant. Tenant shall promptly supply Landlord with such information concerning the business background and financial condition of such proposed assignee or subtenant as Landlord may reasonably request. Landlord shall have the option, exercisable by notice given to Tenant within twenty (20) days after Tenant’s notice is given, either to sublet such space from Tenant at the rental rate and on the other terms set forth in this Lease for the term set forth in Tenant’s notice, or, in the case of a proposed assignment or sublease, to terminate this Lease. Landlord shall allow Tenant five (5) days from notice of Landlord's exercise of the option to terminate this Lease, to withdraw its proposed assignment or sublease. If Landlord does not exercise such option, Tenant may assign the Lease or sublet such space to the proposed assignee or subtenant on the following further conditions:
(a) Landlord shall have the right to approve such proposed assignee or subtenant, in its sole discretion;
(b) The assignment or sublease shall be on the same terms set forth in the notice given to Landlord;

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(c) No assignment or sublease shall be valid, and no assignee or sublessee shall take possession of the Premises, until (1) an executed counterpart of such assignment or sublease shall have been delivered to Landlord and (2) Landlord shall have executed and delivered its consent to such sublease or assignment;
(d) No assignee or sublease shall have the right further to assign or sublet without compliance with this Section 4.2.; and
(e) Fifty (50%) percent of any sums or other economic consideration received by Tenant as a result of such assignment or subletting, however denominated under the assignment or sublease, which exceed, in the aggregate, the total sums which Tenant is obligated to pay Landlord under this Lease for the relevant period of the sublease or assignment (prorated to reflect obligations allocable to any portion of the Premises subleased) excluding any real estate brokerage commissions, reasonable attorneys' fees, Tenant improvements payable in connection with such assignment or subletting, and the unamortized value of any tenant improvements made and paid for by Tenant shall be paid to Landlord as Additional Rent under this Lease without affecting or reducing any other obligations or Tenant hereunder. "Additional rent" shall not be included in calculating the net amount due Landlord hereunder.

10.2.2 No Waiver or Release. No subletting or assignment shall release Tenant of its obligations under this Lease or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver of Landlord of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default of an assignee or subtenant of Tenant or any successor of Tenant in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee, subtenant, or successor. Landlord may consent to subsequent assignments of the Lease or sublettings or amendments or modifications to the Lease with assignees of Tenant without notifying Tenant, or any successor Tenant, and without obtaining its or their consent thereto, and any such actions shall not relieve Tenant of liability under this Lease.

10.2.3 Administrative Fee. If Tenant assigns the Lease or sublets the Premises or requests the consent of Landlord to any assignment or subletting, Tenant shall, upon demand, pay Landlord attorney’s fees reasonably incurred by Landlord in connection with such act or request, not to exceed $2,000.

11.Use of Premises. The Premises are hereby leased to Lessee upon the express condition that Lessee shall use said Premises for use as the administrative offices and meeting space for the Friends of the San Carlos Library. Lessee shall not use any portion of the Premises for purposes other than those specified hereinabove, and no use shall be made or permitted to be made upon the Premises, nor acts done, which will increase the existing rate of insurance upon the property, or cause cancellation of insurance policies covering said property.

12.Use of Conference Rooms. Lessee shall coordinate their use of the public conference rooms on the second floor of the library building with the City’s Parks and Recreations Administrative Staff. The library will get first priority for conference room usage during the day.

City sponsored and public usage of the conference rooms will be second priority during the day.

Lessee will get third priority usage of these rooms during the day. The conference rooms will be given first priority for public usage and City sponsored meetings during evening hours. Where Lessee has obtained prior approval to use a conference room, said usage shall not be preempted without Lessee’s prior consent. Lessee shall pay for the use of Library Conference Room A

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and/or B at the prevailing rate and following the same guidelines as prescribed for San Carlos community organizations.

13. Entry on Premises. City may enter the Premises with consent of Lessee or upon prior reasonable written notice to Lessee (24 hours shall be deemed reasonable advance notice) for the purposes of conducting reasonable inspection, making repairs, alterations or additions, showing the Premises to prospective tenants, purchasers, or mortgagees, or for any other valid and reasonable business purpose. Entry shall be made during regular business hours. In the event of an emergency (such as fire or plumbing leak, etc.), City may enter the Premises without consent or prior notice.

14.Lessee Parking. Lessee and its guests are allowed to park in the available public parking spaces in the library’s underground parking lot.

15.Binding on Successors. This Lease is and shall be binding upon the heirs, executors, administrators, successors and assigns of the respective parties hereto.

16.Insurance.

16.1 Liability Insurance. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease a policy of combined single limit bodily injury and property damage insurance insuring City and Lessee against any liability arising out of the ownership interest, use, occupancy or maintenance of the Premises and all areas appurtenant thereto.

Such insurance shall be a combined single limit policy in an amount no less than Two Million Dollars ($2,000,000.00). The policy shall contain cross liability endorsements and insure performance by Lessee of the indemnity provisions of this Lease. The limits of said insurance shall not, however, limit the liability of Lessee hereunder. In the event that the Premises constitute a part of a larger property said insurance shall have a Lessor’s Protective Liability endorsement attached thereto. If Lessee shall fail to procure and maintain said insurance, City may, but shall not be required to, procure and maintain the same and at the expense of Lessee.

City and its agents, employees and officials shall be named as additional insureds on said policy and Lessee shall provide City with a certificate of said insurance coverage.

16.2 Property Insurance. Against all risks of loss to any tenant improvements or betterments, at full replacement cost with no coinsurance penalty provision.

16.2Insurance Company Rating. Insurance required hereunder shall be in companies holding a “General Policyholders Rating” of B plus or better as set forth in the most current issue of the “Best Insurance Guide.” Lessee shall deliver to City copies of policies of liability insurance required or certificates evidencing the existence and amounts of such insurance with loss payable clauses satisfactory to City. No such policy shall be cancelable or subject to reduction of coverage or other modification except after ten (10) days prior written notice to City.

Lessee shall, within ten (10) days prior to the expiration of such policies, furnish City with renewals or “binders” thereof, or City may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee upon demand. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies referred to herein.

16.3Waiver of Subrogation. Lessee and City each hereby waives any and all rights of recovery against the other, or against the officers, employees, agents and representatives of the other, for loss of or damage to such waiving party or its property or the property of others

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under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Lessee and City shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease.

16.4Exemption of City from Liability. Lessee hereby agrees that City shall not be liable for injury to Lessee’s “business” or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee’s employees, invitees, customers, or any other person in, on, or about the Premises, nor shall City be liable for injury to the person of Lessee, Lessee’s employees, agents or contractors whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether the said damage or injury results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Lessee.

17.Severability. If any provision of this Lease Agreement, or its application, is held invalid, it will not affect other provisions or application herein which can be given effect without the invalid provision or application. To this end, all provisions of the Lease Agreement are severable.

18.Attorney’s Fees. In the event of litigation or arbitration between the parties over the terms or performance of this Lease, the prevailing party shall be entitled to reasonable attorney’s fees and costs.

19.City Repair of Lessee Damage. If at any time during the term hereof the Premises are damaged, except by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at its expense), and such damage was caused by a casualty not covered under an insurance policy required to be maintained by City, City may at City’s option either (i) repair such damage as soon as reasonably possible at City’s expense, in which event this Lease shall continue in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of the occurrence of such damage of City’s intention to cancel and terminate this Lease as of the date of the occurrence of such damage. In the event City elects to give such notice of City’s intention to cancel and terminate this Lease, Lessee shall have the right within ten (10) days after the receipt of such notice to give written notice to City of Lessee’s intention to repair such damage at Lessee’s expense, without reimbursement from City, in which event this Lease shall continue in full force and effect, and Lessee shall proceed to make such repairs as soon as reasonably possible.

If Lessee does not give such notice within the ten (10) day period, this Lease shall be terminated as of the date of the occurrence of such damage.

19.1Total Destruction. If at any time during the term hereof the Premises are totally destroyed from any cause whether or not covered by the insurance required to be maintained by City (including any total destruction required by any authorized public authority) this Lease shall automatically terminate as of the date of such total destruction.

19.2Termination – Advance Payments. Upon termination of this Lease an equitable adjustment shall be made concerning advance rent and any advance payments made by Lessee to City. City shall, in addition, return to Lessee so much of Lessee’s security deposit that has not already been applied by City.

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20.Defaults. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee:
(a) The vacating or abandonment of the Premises by Lessee; (b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of three (3) days after written notice thereof from City to Lessee; (c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in paragraph (b) above, where such failure shall continue for a period of thirty (30) days after written notice from City to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion;
(d) (i) The making by Lessee of any general arrangement for the benefit of creditors; (ii) the filing by or against Lessee of a petition to have Lessee judged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days; and
(e) The discovery by City that any financial statement given to City by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in interest of Lessee or any guarantor of Lessee’s obligation hereunder, and any of them, was materially false.

20.1Remedies. In the event of any such material default or breach by Lessee, City may at any time thereafter, with or without notice or demand, and without limiting City in the exercise of any right or remedy which City may have by reason of such default or breach:
(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises to City. In such event City shall be entitled to recover from Lessee all damages incurred by City by reason of Lessee’s default including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorney’s fees, and any real estate commission actually paid, the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided. (b) Maintain Lessee’s right to possession in which case this Lease shall continue in effect whether Lessee have abandoned the Premises. In such event, City shall be entitled to enforce all of City’s rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.

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(c) Pursue any other remedy now or hereafter available to City under the laws or judicial decisions of the State of California.

20.2Late Charges. Lessee hereby acknowledges that late payment by Lessee to City of rent and other sums due hereunder will cause City to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.

Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on City by the terms of any mortgage or trust deed covering the Property. Accordingly, if any installment of rent or any other sum due from Lessee is not received by City or City’s designee within fifteen (15) days after such amount is due, Lessee shall pay to City a late charge equal to Six Percent (6%) of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs City will incur by reason of late payment by Lessee. Acceptance of such late charge by City shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent City from exercising any of the other rights and remedies granted hereunder.

21.Time of Essence. Time is of the essence.

22.Notice. Any notice required or permitted to be given hereunder shall be in writing and may be given by personal delivery or by certified mail, and if given by personal delivery or by certified mail, and if given personally or by mail, shall be deemed sufficiently given if addressed to Lessee or to City at the address noted in section 4 for the respective parties, as the case may be. Either party may be notice to the other specify a different address for notice purposes except that upon Lessee taking possession of the Premises, the Premises shall constitute Lessee’s address for notice purposes. A copy of all notices required or permitted to be given to City hereunder shall be concurrently transmitted to such party or parties at such addresses as City may from time to time hereafter designate by notice to Lessee.

22Holding Over. If Lessee remains in possession of the Premises or any part thereof after the expiration of the term hereof without the express written consent of City, such occupancy shall be a tenancy from month to month at a rental in the amount of the last monthly rental plus all other charges payable hereunder, and upon all terms hereof applicable to a month to month tenancy.

IN WITNESS WHEREOF, this Lease has been executed by the parties hereto as of the date first above written.

DATED: __________________, 2023 CITY OF SAN CARLOS
By_____________________________
Jeff Maltbie, City Manager
DATED: __________________, 2023 Friends of the San Carlos Library By_____________________________
Amy Schwimmer, President

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DATED: __________________, 2023 Approved as to Form
By_____________________________
Greg Rubens, City Attorney

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Authorizing the City Manager to Enter into a Professional Services Agreement with PlaceWorks for Consulting Services to Prepare a General Plan Capacity Revision and an Accompanying Environmental Impact Report in an Amount Not to Exceed $390,000 and Authorizing an Additional Appropriation from the General Capital Fund 0025 Unassigned Fund Balance in the Amount of $140,000 to Project C2311 - 2030 General Plan Amendment.

RECOMMENDATION
Staff recommends that the City Council adopt a Resolution to authorize the City Manager to execute a Professional Services Agreement with PlaceWorks for consulting services to prepare a General Plan capacity revision and an accompanying Environmental Impact Report (EIR) in an amount not to exceed $390,000 and authorize an additional appropriation from the General Capital Fund 0025 Unassigned Fund Balance in the amount of $140,000 to Project C2311 – 2030 General Plan Amendment.

FISCAL IMPLICATIONS
This action will require an additional appropriation from the General Capital Fund 0025 Unassigned Fund Balance in the amount of $140,000. There are sufficient funds available to cover this request.

Funding for this project was appropriated in the adopted Fiscal Year 2023-25 Capital Improvement Budget in the amount of $250,000 (C2311). At that time, staff had indicated this amount could go up or down depending on proposals received. Following the release of a request for proposals (RFP), an oral interview, and selection of the consultant team, the cost to develop the General Plan capacity revision and accompanying EIR will be $390,000. This amount includes a contingency of approximately 15%. Any unused funds would revert back to the City’s General Capital Fund 0025.

PlaceWorks contract amount $338,184
Contingency 51,816
Total Not to Exceed Amount $390,000
Project C2311 Adopted Budget $250,000
Additional Funds Needed 140,000
Total Revised Project Budget $390,000

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BACKGROUND
Since 2017, interest from the biotechnology and life science sectors has grown in San Carlos which led to the preparation of a Vision Plan for the City’s east side plus a Specific Plan for the City’s northeast area. This, combined with normal ongoing improvements and expansion of small and medium-sized commercial businesses in the City, puts San Carlos on a trajectory to exceed the capacity for commercial, office, and industrial uses that were projected in the 2030 General Plan and the 2030 General Plan EIR.

The City sought professional services of a consultant team to lead the development of a capacity revision to the General Plan and associated environmental analysis to allow existing business to continue to grow and expand and accommodate new development to take place, which will allow for continued improvements to the City.

This project is a technical update to the City’s current General Plan. All existing land uses and zoning designations and standards will remain the same. However, the project will take into account the preferred land use scenario from the Northeast Area Specific Plan project. All revisions to the General Plan and other associated amendments that support this technical update will undergo required environmental review pursuant to, and in compliance with, the California Environmental Quality Act (CEQA).

Consultant Selection
The City released the request for proposals (RFP) on April 25, 2023, with a submittal due date of May 24, 2023 (see Attachment 2). Staff received one proposal from the following firm:

General Plan Capacity Revision and Accompanying EIR

CONSULTANT PROPOSED COST
PlaceWorks $338,184
A review team, consisting of senior City staff from Community Development and Public Works, reviewed the written proposal and participated in the interview process. Following review of the proposal, PlaceWorks and their team of subconsultants (W-Trans and Kittelson and Associates) were invited for an oral interview held on June 7, 2023. PlaceWorks was selected for an interview because their proposal was responsive to the City’s RFP in terms of comprehensiveness, project understanding, proposed timeline, past work, depth of experience in preparing General Plan amendments, and related EIR expertise.

Following the oral interview, the City’s review team reached a consensus and recommended that the City select PlaceWorks to undertake the project for a General Plan capacity revision and preparation of an accompanying EIR. PlaceWorks, with their team of subconsultants, is recommended due to their technical skills and past experience in preparing San Carlos’s 2030 General Plan and extensive General Plan related work, expertise in preparing EIRs and in-depth knowledge of the California Environmental Quality Act (CEQA), ability to meet established deadlines, and the quality of their written and oral proposal/presentation.

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Placeworks – Scope of Work
The General Plan capacity revision and accompanying EIR project will include a wide range of tasks (for the full scope of work see Attachment 3). The following outline provides an overview of the necessary steps to develop the plan:

1. Project Initiation and Management
a. Kickoff Meeting and City Tour
b. Work Plan
c. Project Management

2. Public Input
a. Draft Strategy
b. Stakeholder / Focus Groups Meetings
c. City Council Subcommittee Meetings
d. Planning and Transportation Commission & City Council Study Sessions

3. Existing Conditions Evaluation
a. Existing Conditions Technical Memoranda
b. Identify Capacity Revision Sub Areas
c. Existing Infrastructure and Mobility Analysis
d. Existing Traffic/Transportation Conditions

4. Land Use Scenario and Capacity Analysis
a. Land Use Scenario Development
b. Land Use Scenario and Capacity Analysis
c. Climate Mitigation and Adoption Plan Update (Optional)

5. Citywide General Plan Amendment EIR
a. EIR Initiation
b. Technical Analysis
c. Administrative Draft EIR
d. Screencheck and Public Review Draft EIRs
e. Final EIR and Response to Comments
f. Findings of Fact / Statement of Overriding Considerations

6. Draft and Final General Plan Amendments
a. Administrative/Screencheck Drafts General Plan Amendment b. Revised Public Draft General Plan Amendment
c. Final General Plan Amendment
Next Steps
Should the Council authorize the City Manager to move forward with a Professional Services Agreement with PlaceWorks, this work will commence starting July 2023 and will be finished by or before September 2024.

ALTERNATIVES
The option available to the City Council include:

1. Adopt a Resolution to authorize the City Manager to execute a Professional Services Agreement with PlaceWorks for consulting services for the General Plan Capacity Revision and accompanying EIR in in an amount not to exceed $390,000 and authorize an additional appropriation from the General Capital Fund 0025 Unassigned Fund Balance in the amount of $140,000 to Project #C2311 - 2030 General Plan Amendment; or

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2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Al Savay, Community Development Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Request for Proposals

3. Proposed Scope of Work, Cost Proposal, and Timeline

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RESOLUTION NO. 2023 - _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE CITY MANAGER TO ENTER INTO A PROFESSIONAL SERVICES

AGREEMENT WITH PLACEWORKS FOR CONSULTING TO PREPARE A GENERAL PLAN

CAPACITY REVISION AND AN ACCOMPANYING ENVIRONMENTAL IMPACT PLAN REPORT IN AN AMOUNT NOT TO EXCEED $390,000 AND AUTHORIZING AN ADDITIONAL APPROPRIATION FROM THE GENERAL CAPITAL FUND 0025 UNASSIGNED FUND BALANCE IN THE AMOUNT OF $140,000 TO PROJECT C2311 – 2030 GENERAL PLAN AMENDMENT.
____________________________________________________________________________ WHEREAS, the City of San Carlos has traditionally used the expertise of consulting firms to respond to the workload generated by State mandates and City Council direction; and WHEREAS, a formal request for proposal process was used to select the best qualified firm to prepare a General Plan capacity revision and accompanying EIR for San Carlos; and WHEREAS, City staff from multiple departments reviewed the proposal from PlaceWorks and following an interview, found the firm PlaceWorks to be qualified to perform the services; and WHEREAS, Project #C2311 – 2030 General Plan Amendment has an adopted budget of $250,000; and
WHEREAS, an additional appropriation from the General Capital Fund 0025 Unassigned Fund Balance will be needed to cover the cost of the contract; and WHEREAS, there are sufficient funds available to cover this request.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of San Carlos authorizes the City Manager to execute an agreement for professional services with PlaceWorks for consulting to prepare a General Plan Capacity Revision and Accompanying EIR in a total amount not to exceed $390,000 and authorizes an additional appropriation from the General Capital Fund 0025 Unassigned Fund Balance in the amount of $140,000 to Project C2311 – 2030 General Plan Amendment.
* * * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June, 2023, by the following vote:

AYES,COUNCILMEMBERS: ___________________________________________________ NOES, COUNCILMEMBERS:______________________________________________ ABSENT, COUNCILMEMBERS:______________________________________________ ______________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

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CITY OF SAN CARLOS

Request for Proposals (RFP)
General Plan Reset – Buildout to 2030:

Update for Commercial, Office, and Industrial Uses

Due: Wednesday, May 2 4, 2023 by 5:00 p.m. (PT)

Electronic Submittals shall be submitted to: [email protected]

Attn: Lisa Porras, Planning Manager
Advance Planning Division, 600 Elm Street , San Carlos, CA 94 070

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General Plan Reset – Buildout to 2030 | Request for Proposals | City of San Carlos

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Contents

Request for Proposals .........................................................................................................................................3 Background ...........................................................................................................................................................3 San Carlos General Plan: Envision 2030 ...........................................................................................................3 Project Approach ................................................................................................................................................3 Proposed Study Area ...........................................................................................................................................4 Summary of Concurrent and Recent Planning Efforts .....................................................................................4 Housing Element Update: San Carlos Housing 2040 ........................................................................................5 East Side Innovation District Vision Plan ............................................................................................................6 Northeast Area Specific Plan ..............................................................................................................................7 Downtown Specific Plan .....................................................................................................................................8 Economic Development Plan .............................................................................................................................8 General Plan Reset - Addressing Citywide Buildout ....................................................................................... 10 Schedule ............................................................................................................................................................. 10 Pre-Proposal Conference ................................................................................................................................ 11 Budget ................................................................................................................................................................ 11 Planning Process ............................................................................................................................................... 12 Task 1. Project Management, Work Plan and Kickoff Meeting ....................................................................... 12 Task 2. Existing Conditions Evaluation .......................................................................................................... 13 Task 3. Community Outreach and Engagement Plan ....................................... Error! Bookmark not defined.

Task 4. Land Use Scenario and Buildout Analysis .......................................................................................... 15 Task 5. Citywide General Plan EIR amendment ............................................................................................. 16 Task 6. Draft and Final General Plan Amendments ........................................................................................ 16 City Resources Available .................................................................................................................................. 16 Submittal Requirements ................................................................................................................................... 17

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General Plan Reset – Buildout to 2030 | Request for Proposals | City of San Carlos

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Request for Proposals

Background

San Carlos General Plan: Envision 2030

In October 2007, the San Carlos City Council initiated a General Plan Update concluding in October 2009 with the adoption of the 2030 General Plan: Envision 2030. The General Plan established a framework for how San Carlos would grow and change over two decades , including goals, policies and actions t o guide growth and change. The 2030 General Plan and associated Environmental Impact Report (EIR) also estimated, analyzed, and approved the total buildout or maximum square feet of anticipated development for commercial, office, and industrial uses through 2030 (See Table 2). Five years following adoption of the 2030 General Plan, the City began to experience an unprecedented amount of private sector investment in the east side, particularly from business and employment growth in research and development in the life sciences and biotechnology sectors, and also from smaller manufacturing enterprises and other commercial services. Accordingly, San Carlos is on a trajectory to exceed the level of buildout for commercial, office, and industrial uses seven years earlier than anticipated in its adopted 2030 General Plan and General Plan EIR.

Project Approach

As the City is on a trajectory to exceed the citywide commercial, office and industrial capacity that had been adopted in its 2030 General Plan, General Plan amendment s and associated environmental review is needed to support new estimates for buildout of commercial, office, and industrial uses to the year 2030 . This work is essent ially a reset of the current General Plan’s buildout numbers. This work does not anticipate changing any existing land use designations nor associated zoning standards; however, resetting the General Plan buildout may require land use and zoning map revisions. Future buildout of non- residential uses are expected to occur on land that is already designated for such uses. All revisions to the General Plan and other associated amendments that support an updated buildout scenario are expected to undergo required environmental review pursuant to, and in compliance with, the California Environmental Quality Act (CEQA).

Recent and ongoing planning projects include approval of the East Side Innovation District Vision Plan, approved by the City Council in October 2021, adoption of a new Housing Element in January 2023, and ongoing efforts to prepare two specific plans: one for downtown San Carlos (growth estimates not expected to change), and another in the City’s northeast area and on the boundary with the City of Belmont (buildout is expected to increase as part of this plan). Adoption of these specific plans is targeted for March 2024 and October 2024, respectively.

Accordingly, the City requires this work to be completed no later than Septembe r 2024.

This project anticipates incorporating the buildout assumptions for downtown and the northeast area; however, remaining areas that lie outside of these specific plan areas will need to be analyzed to establish a comprehensive citywide buildout for the General Plan to the year 2030. Although residential buildout through the year 2031 has been set into place as required by San Carlos’ Regional Housing Needs Allocation assignment, which has been evaluated under its own Program Environmental Impact Report (EIR) and certified in January 2023, there could be a scenario in the Northeast Specific Plan area that includes residential growth. The intent of the General Plan amendment process is to consider commercial, industrial and office uses holistically, and any new residential from the Northeast Specific Plan, and in consideration of future housing production as outlined in the 2023-2031 Housing Element. The General Plan amendments should also consider the impact of anticipated growth in the commercial, industrial and office development sectors on community needs such as mobility and transportation, major infrastructure, environmental stewardship, services, recreation, and open space.

Inclusive community engagement will be necessary to incorporate public input into the General Plan amendment and EIR amendment . General Plan amendments should be prepared with community and stakeholder input and should also include a range of strategies and methods to inform and engage the community.

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Proposed Study Area

The proposed study area is the City of San Carlos (see Figure 1 below) . Commercial, industrial and office uses should be considered citywide even where there are no development proposals and no specific plans underway or adopted. The consultant team will be able to use capacity calculations resulting from ongoing planning efforts such as the Downtown Specific Plan and the Northeast Area Specific Plan. Buildout assumptions from these two projects will be provided to the selected consultant to fold into citywide buildout evaluations.

Figure 1. San Carlos Zoning Map

Summary of Concurrent and Recent Planning Efforts

The City has numerous planning initiatives either underway or recently completed. Table 1 provides an overview of the planning efforts that may influence or relate to the project.

Table 1. Concurrent and Recent Planning Efforts
Initiative Status Description Learn More
Northeast Area
Specific Plan
Underway
(Adoption
expected October
2024)
The plan will create a vision, policies,
and standards to guide new
development and will seek to balance
many needs and support existing and
new businesses, residents, and the
overall community.
https://www.sancarlosnorth
eastplan.com/

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Initiative Status Description Learn More
Downtown Specific
Plan
Underway
(Adoption
expected March
2024)
A planning process to update the
vision and development policies for
Downtown San Carlos, including
Laurel Street, El Camino Real, and
adjacent cross streets.
https://www.sancarlosdo
wntownplan.com/
Objective Design
and Development
Standards
Underway
(Adoption
expected Fall
2023)
Objective design and development
standards for mixed-use residential
projects, as well as single-family and
multi-family projects, which are
measurable and verifiable (i.e., no
“gray” area for interpretation).
https://www.cityofsancarl
os.org/government/depa
rtments/community-
development/planning/s
pecial-projects/objective-
design-standards
Housing Element
(2023-2031)
Adopted January
2023
Comprehensive, housing-related
update to the General Plan and Zoning
Ordinance. Accommodates ~ 3,000
new units to 2031.
https://www.sancarlos20

40.org/documents
East Side
Innovation District
Vision Plan
Adopted (2021) Plan for the 150-acre commercially
zoned area (bound by Holly Street,
Brittan Avenue, Old County Road, and
Highway 101) which is envisioned to
be a well-connected, multi-modal
neighborhood with a mix of uses that
integrates existing businesses with
new science and technology uses, and
offers a rich array of community
amenities for a more resilient and
inclusive future.
www.cityofsancarlos.org/go
vernment/departments/com
munity-
development/planning/plan
s-document-library/east-
side-vision-plan
2021-2024
Economic
Development Plan
Adopted (2021) Economic development strategic plan
for San Carlos, and includes strategies
for the East Side area.
www.cityofsancarlos.org/go
vernment/departments/com
munity-
development/economic-
development/economic-
development-plan
Climate Mitigation
and Adaption Plan
Adopted (2021) San Carlos' strategic plan to reduce
greenhouse gas emissions and adapt
to changing climate conditions. Aims
to reduce emissions by 40% by 2030
and 80% by 2050 relative to 1990
levels and identifies strategies to
achieve those targets.
www.cityofsancarlos.org/go
vernment/departments/city-
manager-s-office-
communications/responsibl
e-environment/climate-
action-plan
Bicycle and
Pedestrian Master
Plan
Adopted (2020) Active transportation plan that
identifies specific projects and policies
to enhance the walkability and
bikeability of San Carlos and
encourage mode shift.
www.cityofsancarlos.org/go
vernment/departments/publ
ic-works/streets/bicycle-
and-pedestrian-master-plan

The most relevant long-range planning projects are summarized below.

Housing Element Update: San Carlos Housing 2040

The City of San Carlos has already increased capacity to accommodate expected new housing development. In January 2023, the City adopted the 2023-2031 Housing Element, which plans for over 3,000 new housing units at a range of affordability levels and will serve as the city’s primary housing policy document over the next eight years.

The strategy was to increase zoning capacity in areas that already allow residential uses, primarily Multi-Family and Mixed-Use Zoning Districts. The City also adopted amendments to the 2030 General Plan, General Plan EIR , Zoning Ordinance, and Land Use and Zoning Maps to accommodate capacity for additional housing units beyond what was previously allowed by the 2030 General Plan. The new zoning went into effect March 2023. The City is

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committed to addressing the housing needs of all current and future S an Carlos residents by accommodating the number of units assigned by the State’s Regional Housing Needs Allocation (RHNA).

East Side Innovation District Vision Plan

Historically, East San Carlos has been home to low -intensity commercial and industrial businesses . Since 2015, San Carlos has experienced an unprecedented amount of development, especially in life sciences and biotechnology sectors (see Figure 3 below). In October 2021, the City approved the East Side Innovation District Vision Plan, which created a framework for growth and change in this area of San Carlos. The East Side Innovation District, approximately 150 acres, is defined by Holly Street, Brittan Avenue, Old County Road, and Highway 101 (See Figure 2 below). The Plan incorporates strategies for managing and harnessing growth in the area.

Figure 2. East Side Innovation District Area

Figure 3. Proposed and Approved Projects in the East Side Innovation District

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Northeast Area Specific Plan

The Northeast Area, approximately 145 acres, was annexed into the City of San Carlos city limits in 1997, and since that time, there have been very few changes to the land use regulations there. It includes the area north of Holly Street, to the San Carlos city limits at Belmont Creek, and between Highway 101 and Old County Road. Over the last several years, the Northeast Area has received interest from developers who want to build new buildings for life science and biotechnology companies. To guide new development , the City Council has directed City staff to prepare a Specific Plan, called the Northeast Area Specific Plan, which began in October 2022. The overarching goal of the Northeast Area Specific Plan will be to manage and di rect changes in development patterns and guide present and future land uses, zoning changes, economic development, urban design, infrastructure, transportation circulation management and mobility, service provision, open space, and community benefits. The Specific Plan process will take about two years to complete, wrapping up in October 2024.

Currently, housing is prohibited from within the Northeast Area per the 2030 General Plan. To serve the current and future needs of the San Carlos community and to align with anticipated employment growth, the Specific Plan will explore the possibility of introducing housing to the area. If proposed, the residential opportunities should include housing that is affordable for a range of very -low to moderate- income households. The Plan will also analyze additional development capacity expected for commercial, industrial and office development.

On April 25, 2022, the City Council adopted Ordinance No. 1581 to establish a development moratorium for the Northeast Area. On May 23, 2022, the City Council adopted Ordinance No. 1582 to extended the development moratorium to April 2024 and allow additional time for the development and adoption of the Northeast Area Specific Plan.

Figure 4. Proposed and Anticipated Development in the Northeast Area

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Downtown Specific Plan

In March 2022, the City of San Carlos kicked-off the process to work with the community to create a new vision for Downtown San Carlos, including Laurel Street, El Camino Real, and the cross streets from Holly Street to Greenwood Avenue. This planning process began in March of 2022 and will last about two years, with completion targeted in spring 2024. The focus of the Downtown Specific Plan is on public realm streetscape design and mobility improvements and will consider a full closure of the 700 block of Laurel Street. In ad dition the plan will explore improvements to alleys plus street designs for wider sidewalks, bicycle and pedestrian mobility, and moving from diagonal to parallel parking . The City does not anticipate that the Downtown Specific Plan will result in increased development capacity in the downtown area. Development capacity in the downtown area was addressed in the General Plan: Envision 2030 through the establishment of mixed-uses along major corridors and the recent Housing Element update for additional residential growth. Future downtown development is expected to be in line with current allowed capacity.

Figure 5. Downtown Specific Plan Area

Economic Development Plan

Developer interest in San Carlos is in part due to the City’s excellent access to Highway 101, location of the City equidistant to San Jose and San Francisco, and within 30 minutes of both San Francisco and San Jose international airports. The City also has excellent access to transit including a downtown San Carlos Caltrain station as well as the SamTrans San Carlos Transit Center, which provides access to bus routes connecting the City to the rest of San Mateo County. The City has a thriving, walkable dow ntown with a unique mix of local-serving retail, grocery, and restaurants that is also a destination to visitors from other jurisdictions. Other areas of the City include a rich commercial eco system of small-scale industrial, artisan, and manufacturing businesses as well as other uses that serve the local community.

Since 2007 the City of San Carlos has used multi -year economic development plans and strategies to clearly articulate economic development policy priorities, guide investments, and inform resource allocation. The 2021- 2024 Economic Development Plan identifies the unique sub- areas that highlight the unique needs, challenges, and priorities for economic growth in each sub-area.

The East Side Area supports most of the jobs in San Carlos and has the most diverse mix of companies in the City.

The East Side Area is a growing life science and biotech hub, with more than 2.5 million square feet of new biotechnology, life sciences, and high-tech office uses in the development pipeline as of early 2021. East San Carlos also has large parcels that can accommodate light industry and manufacturing, as well as office buildings and retail outlets serving regional markets. Thanks to a robust cluster of building and construction materials and supplies businesses, the area has also developed an identity as a regional home improvement destination.

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The Industrial Arts District is a specially zoned area, bounded by Old County Road, American Street, Indust rial Road, and Varian Street, intended to promote and preserve small-scale industrial, artisan, and manufacturing uses.

These businesses typically focus on producing small, often high-end products, such as furniture, clothing, and food and beverage prod ucts. Zoning in the district also allows small -scale retail uses that serve local employees and visitors. The Industrial Arts District is supported by an Industrial Arts Business Association (IABA) and is home to an eclectic mix of artisan and craft businesses. The Mid- Peninsula Wine Trail boasts five wineries all within one block of each other and attracts visitors from throughout the region. It is important to preserve and encourage a mix of small and medium sized businesses such as, Iron Ox, a San Carlos company that utilizes robots in greenhouses to grow and sell produce more efficiently.

South Laurel (also known as SOLA) encompasses the area along Laurel Street south of Arroyo Street and has a more mixed-use character than Downtown, with shops, offices, services, medical offices, multi-family housing, and even single- family homes. Given the parcel sizes and existing development pattern in the area, there are opportunities to redevelop underutilized parcels in SOLA. Although some of the vacant or underutilized parcels on south Laurel may be too small for a vertically mixed-use building, in combination they could accommodate a variety of uses at different sites in close proximity to one another.

The historic Downtown is the primary shopping and dining district in San Carlos, located on Laurel Street and extending from San Carlos Avenue to Arroyo Avenue. This area is essential to what defines the City as a unique community within San Mateo County. The Downtown is unique because of its excellent pedestrian amenities, combined with a high concentration of locally -owned small businesses offering a diverse range of retail, services and dining options. While there are other shopping centers in the City, this area is the most pedestrian friendly and provides many free, public parking options as well as downtown stations for Caltrain and SamTrans. Transit options provide opportunities to increase the development intensity Downtown without necessarily triggering increased traffic congestion.

Figure 6. 2021-2024 Economic Development Plan Sub Areas

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General Plan Reset - Addressing Citywide Buildout

With the continued interest from the biotechnology and life science sectors, the development of two specific area plans, as well as the continued and expected growth of small and medium-sized commercial enterprises in the City, San Carlos is on a trajectory to exceed the level of buildout for commercial, office, and industrial us es approved in the adopted 2030 General Plan and General Plan EIR, as shown in Table 2 below. The City is seeking a consultant team to lead the development of a citywide General Plan amendment and associated environmental analysis that will allow existing business to continue to grow and expand and new development to take place, which together will allow for continued improvements to the City. This work will require the selected consultant to establish a comprehensive and cumulative buildout figure for the City. To complement this work, the City of San Carlos will work with its on-call economic development consultant to evaluate and prepare a market -based projection of anticipated growth the City is likely to experience over the next 7 years.

This Request for Proposals (RFP) is requesting the services of a consultant team to prepare a n amendment to the 2030 General Plan that will incorporate new capacity projections for citywide commercial, office and industrial uses, and possibly additional residential growth as part of the Northeast Specific Plan. The consultant team will analyze and estimate the square footage for commercial, industrial and office development capacity citywide (plus any new residential) through 2030. The amendment may include changes to the General Plan Land Use Map and Zoning Map. The consultant team will also produce the General Plan EIR amendment that will be needed to allow for City Council adoption of the General Plan amendments with new buildout numbers . The revisions will undergo environmental review through an Environmental Impact Report (EIR), which will be prepared in compliance with CEQA requirements.

The consultant team will also lead an inclusive community engagement initiative to incorporate public input into the process of preparing General Plan amendments and an EIR. Any necessary General Plan and Zoning amendments will be prepared with in-depth community and stakeholder input.

Table 2. Approved 2030 General Plan Buildout1 and New Development Projects Status Square Footage Total Square Footage
Build-out, 2030 General Plan
Commercial 724,030
3,437,213 Office 572,006
Industrial 2,141,177
New Development Projects
Approved Projects 915,943
3,578,562 Proposed Projects 2,163,447
Anticipated Projects 499,172
Difference
(2030 Build-out vs New Development Projects) (141,349)

Schedule

The following table outlines the City’s proposed schedule related to this Request for Proposals and the planning process. The City reserves the right to amend the schedule as necessary.

1 City of San Carlos 2030 General Plan EIR – Table 4.10-1

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Table 3. RFP and Project Schedule
Activity Date
City releases RFP Tuesday, April 25, 2023
Pre-proposal conference May 1
Last date for submission of written questions from proposers Friday, May 5, 2023 City issues addendum (if needed) Friday, May 12, 2023
Proposal submission deadline Wednesday, May 24, 2023 at 5:00pm PT Potential interviews with proposers Week of June 5, 2023 Contract award date Monday, June 26, 2023
Project commencement July 5, 2023
Project completion September 2024

Pre-Proposal Conference
An optional pre-proposal conference call will be held on Monday, May 1, 2023 from 1:30 PM- 2:30 PM PST, to respond to proposers’ questions. The meeting link is below.

To join the Zoom Meeting, click here:
https://us02web.zoom.us/j/88311975907?pwd=UytmODZucmhhTTVDVEZNeVUrbzMzZz09

Meeting ID: 883 1197 5907
Passcode: 280687
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Budget

City staff has requested budget appropriations to carry out the necessary amendments to San Carlos’ General Plan.

The City Council is expected to adopt the budget for Fiscal Years 23/24 and 24/25 on Monday, June 26, 2023. Staff anticipates taking forward a Professional Services Agreement on the same date. Staff has informed the City Council that the estimated cost to prepare this work is $250,000, which could go up or down depending on proposals received.

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Planning Process

Tasks and Deliverables

This Request for Proposals (RFP) is requesting the services of a consultant team to prepare a citywide General Plan amendment and General Plan EIR amendment for City Council consideration. The General Plan amendment will include revised text to establish a new anticipated citywide buildout for the next 7 years, or to 2030. Since the City is on a trajectory to exceed the approved citywide commercial, office, and industrial build- out in the 2030 General Plan, an amendment to the 2030 General Plan will incorporate new city capacity projections through 2030.

The consultant team will analyze and estimate the square footage for commercial, industrial and office development capacity citywide through 2030 above what was approved in the 2030 General Pl an, including taking into consideration recently adopted residential growth in the Housing Element, and potential growth of additional residential as part of the Northeast Area Specific Plan. The consultant team will also produce the General Plan EIR amendment that will be needed to allow for City Council adoption of the General Plan amendment.

The recommended revisions will consider as inputs the existing information from San Carlos’ existing planning initiatives described in Table 1 of this RFP. The plan ning process and the Draft/Final General Plan a mendments and General Plan EIR amendment will include, at minimum, the tasks below and conclude with Council adoption of the amendments.

The consultant team will also lead an inclusive community engagement initiative to incorporate public input into the process of establishing new buildout to 2030, which should include thoughtful explanation as to how additional growth will allow for continued improvements to the City. Any necessary General Plan and Zoning amendments will be prepared with in-depth community and stakeholder input.

The following sections outline the anticipated tasks and deliverables of the project. When responding to this RFP, the City requests that the consultant team explain its approach to each of the tasks below.

Task 1. Project Management, Work Plan and Kickoff Meeting

The City’s Advance Planning Division will oversee the project and the selected consultant will manage the project.

The consultant will assign a project manager and the project manager will report to the City’s designated Project Manager. Consultant and City shall schedule regular progress meetings to ensure the project stays on track and is completed by September 2024. Consultant is expected to prepare a detailed work schedule (Gantt chart), maintain the schedule, and deliver invoices with line items related to tasks, subtasks, and deliverables, hold regularly scheduled bi-weekly progress meetings , and prepare invoicing. Bi-weekly conference calls with th e consultant’s project manager and the City are required; additional staff from the City and/or the consultant team may attend as required by task or subject matter.

The consultant will prepare a Work Plan which will be a refinement of the Proposal submitted in response to this RFP. The Work Plan will define in detail the scope of work, tasks, schedules , and deliverables for the project and will form the basis for the Agreement between the City of San Carlos and the s elected Consultant. The City will review the Work Plan and provide feedback. The Consultant should allow for two (2) iterations of the Work Plan before it is finalized. The Work Plan is expected within ten (10) business day s of the contract start date. The work plan should also clearly define the roles and responsibilities between the city and the selected Consultant. The work plan should identify the consultant project management team. Any change to the team members is subject to approval by the City.

The project will also require creating project branding for visualization given the City is working on many planning initiatives at this time. Consultants will be expected to create a project logo, branding with colors, and develop an external project website as a platform for the community to learn about and get involved in the project.

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The Consultant will plan and facilitate a project kickoff meeting with City staff to review the Work Plan, project schedule (Gantt chart), and roles and responsibilities.

Task 1 Deliverables:

1. 1.5 hr. Project Kick-Off Meeting, Agenda, other meeting materials to be submitted by consultant team one week in advance.

2. Site Tour: consultant leads will be expected to join City staff for a site tour and lunch (to be provided by the City) to obtain a clear understanding of the physical qualities of San Carlos and discuss project objectives and data needs with key City staff.

3. Draft Work Plan

4. Final Work Plan

5. Create a project logo and color theme for consistent project branding, including 3 iterations with City staff prior to finalization. All memos, reports, presentations, and other deliverables are expected to follow project branding.

6. Create an external project website and train City staff to maintain it.

7. Regular, Bi-Weekly Progress Meetings, 30 min. to 1 hour each. Meeting agendas to be sent out one week in advance by consultant team.

Task 2. Community Outreach and Engagement Plan

The consultant team should develop a specific community outreach and engagement strategy, including the number and type of community meetings (such as workshops, open houses, pop- up events, etc.). The proposed outreach strategy should include consideration of attendance at specific focus group meetings, including for example, the Harbor Industrial Area Association meetings, additional focus group meetings, and stakeholder interviews or a combination thereof. In addition to community, focus group and/or stakeholder meetings, the consultant team should budget for meetings and study sessions with the two-member City Council Subcommittee(s), full City Council, and the Planning and Transportation Commission at key milestones along the development of new buildout figures for San Carlos . The consultant team s hould propose a combination of effective in -person and virtual engagement methods.

The Consultant will work with the City to develop a comprehensive public engagement plan for the project. The consultant should allow for two (2) iterations (if necessary) of the community outreach and engagement plan before it is finalized.

Th community outreach and engagement plan must include innovative ways of conducting community/stakeholder outreach and gathering input using on- line engagement, social media, online surveys, and media events. The proposal must demonstrate how the consultant establishes meaning and intent of build out and generating interest and attendance at the various community engagement events. The selected consultant’s public engagement staff must have expertise in innovative public consultation strategies and proven experience with tools to collect, record, and summarize comments at events and online. The ability of the consultant to communicate well with the public in a variety of ways is critical. The consultant will be responsible for the facilitation, and documentation of the projects outreach efforts.

It is the City’s expectation that the selected consultant facilitation/community engagement staff will:

a) Develop a Community Outreach and Engagement Plan that includes the coordination, facilitation, and documentation of all public engagement events , inc luding clear explanation and documentation of community feedback through the preparation of summary reports or memos. b) Plan public engagement events across all meeting formats (open-houses, workshops, pop ups, etc.) and tailored to key milestones in Work Plan.
c) Prepare agendas and submit all other meeting materials (i.e. presentations, surveys) for public engagement events 15 business days in advance of an event for review and acceptance by the City. d) Facilitate all community engagement and stakeholder, focus group events. e) Prepare and review all project material to ensure clear, concise and consistent messaging throughout the project, including but not limited to the following:
• Drawings, display boards, presentations, and handout materials. • Press releases, newspaper notices and notification letters.

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• Agendas, meeting notes and summaries documenting the issues raised and discuss ed at stakeholder and public meetings, and meeting summary reports. f) Provide meeting summaries within five business days of an event that include the following:
• Identification of engagement event within project schedule, including date and location. • Number of participants and names of groups represented with representatives’ names • Summary of feedback and identification of themes;
• General comments and other content as appropriate; and • Media tracking and documentation of issues and discussions. • Allow for 1 revision and feedback on meeting summary. All meeting summaries will be put up on project webpage for public knowledge.

The City’s Advance Planning Division, with the assistance of the selected consultant, will manage the project website and provide content for social media related to the project. The consultant will be required to provide the project website design, structure and content, including all graphic materials. Public engagement material must be submitted in a form that is web enabled 10 business days prior to presentation to the public.

Task 3. Existing Conditions Evaluation

The first step of the planning process is gaining an understanding of the needs within the study area today and beginning the initial identification of implications from new growth. The goal of this task is to allow the San Carlos community, City staff, and decision makers (City Council, Planning and Transportation Commission) to gain a better understanding of the physical, structural, and infrastructure- related challenges that the City may face when increasing capacity for commercial, industrial, and offic e uses, or from new residential growth (i.e. Northeast Area Specific Plan).

The review and analysis of existing conditions will include but is not limited to:

a) Review and monitoring of existing and ongoing planning initiatives and all relevant background materials, documents, and studies listed in Table 1;
b) Review and application of the relevant policies contained in the City of San Carlos 2030 General Plan; c) Examine all approved and pla nned future developments in the City and qualitatively assess the impact of these projects on transportation improvements, housing needs, parking conditions, and cost of public services.
d) Examine the City’s existing infrastructure plans (sewer, stormwater, streets, and traffic) and capital improvement projects;
e) Contact relevant organizations to establish existing service and future plans, including but not limited to Caltrain, SamTrans, PG&E, Cal Water, and Mid-Peninsula Water District.

The consultant team will conduct following the review, study and analysis as part of this task:

1. Data Needs. During a regularly scheduled project/progress meeting, consultant will identify and discuss data needs and requests for the City to transfer to consultant team, including any GIS layers, plans, etc.

2. Potential Growth Areas. In the first phase of this process, the consultant team will research and prepare a detailed summary of the existing commercial, office and industrial capacity and summary of the existing planned projects, including improvements in transportation, housing, parking, and public services. Based on this review of the existing landscape, the consultant team will identify potential growth subareas that are most likely to accommodate future additional commercial, industrial, and office development. The consultant team will also provide an overview of non-residential real estate (industrial, retail, office, hotels) over the last decade and historic vacancies for the different non-residential real estate asset classes.

3. Employment Analysis. The consultant team will conduct an employment analysis to answer the following questions: What are the five largest sect ors in the City of San Carlos, and what percentage of all jobs do they account for? Where is the largest job growth occurring? The consultant team will also prepare an employment concentration heat map that maps major employment nodes in the City.

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4. Existing Infrastructure and Mobility Analysis. The consultant team will prepare an existing conditions and infrastructure analysis that describes an overview of the key infrastructure and mobility systems in the area and note which systems will likely require updates to support anticipated future development. The analysis should incorporate the City’s existing infrastructure plans (sewer, stormwater, streets, and traffic), capital improvement projects , and any future studies or work anticipated by the City’s Public Works Department.

Task 3 Deliverables:

1. Existing Conditions Report including potential growth areas, employment analysis and existing infrastructure and mobility analysis. Allow for 2 iterations of the report.

Task 4. Land Use Scenario and Buildout Analysis

Task 4.1. Land Use Scenario Development. The consultant will work with the community, City staff, the City’s on- call economic consultant, and decision makers to develop a land use scenario for future buildout to 2030. The land use scenario will consider the land use and buildout scenario from the 2030 General Plan and will introduce additional capacity to the 2030 General Plan maximum buildout. The scenario may include revisions to San Carlos’ General Plan Vision Statement and existing land use data. A review of any updates needed to current land use categories may also be needed . While this land-use scenario will lay out the amount of each use’s anticipated growth levels and their locations, the scenario will not include detailed development standards.

Task 4.2. Land Use Scenario and Buildout Analysis. The consultant team will complete the following analys is for the Land Use Scenario identified under Task 4.1:

• Public Services: This task will evaluate the need for and cost of providing additional police, fire, sewer and other services to the area. For example, if an additional fire station is required, the Plan should detail the cost for building and operating the new fire station, and what percentage of those costs would be offset by new tax revenue and development fees.

• Economic Analysis: An economic analysis should quantify the cost of providing additional police, fire, sewer and other services to the area. Furthermore, the analysis should detail whether taxes generated by these land-uses would cover the cost of providing services, or if additional support would be necessary. The analysis should also estimate whether there will be any loss of existing tax bases (for example, loss of retail sales tax under a scenario) and how that may affect the City’s overall financ es.

• Transportation, Circulation, and Mobility Analysis: The consultant team will complete a standard traffic analysis that takes into consideration both LOS and VMT. The consultant team should budget for a combination of up to roadway segments and/or intersections, as well as the VMT analysis. The proposal must define proposed scope for LOS and VMT analysis . This study must detail how the build- out of the scenario would impact major intersections and street segments, impact overall circulation, improve walkability and bikeability, and the movement of transit, privat e shuttles, or other modes of transportation . This is expected to include reviewing and implementing recommendations from City’s Bicycle and Pedestrian Master Plan.

• Infrastructure, Public Utilities, and Street Sections: Much of the infrastructure in the City is aging and in need of upgrades. The consultant team should include infrastructure experts that can assess and provide recommendations related to public utilities, streets (including pavement condition), sewer, stormwater, and other critical infrastructure in the area. The consultant team will be expected to utilize City’s sewer study model that evaluates the current and future infrastructure needs at the zone level (scheduled to be initiated in mid – 2023 and completed in 2024). City is also initiating a watershed study for the Pulgas Creek.

Task 4 Deliverables:

Land Use Scenario and Buildout Analysis Report including:

1. Land Use Scenario

2. Public Services

3. Economic Analysis

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4. Transportation, Circulation and Mobility Analysis

5. Infrastructure, Public Utilities, and Street Sections

. Allow for 2 iterations of the report.

Task 5. Citywide General Plan EIR amendment

A citywide General Plan EIR amendment will also be needed to update the build-out figures for commercial, office, and industrial uses (and possibly residential per Northeast Area Specific Plan) .2 An environmental review must be completed to allow for City Council adoption of the document. An Environmental Impact Report will need to be prepared given the scope of the project involving a General Plan amendment and revised citywide build- out forecast.

Task 5 Deliverables:

1. Scoping Meeting

2. A dministrative Draft EIR (including 1 round of review for city comments)

3. Draft EIR

4. Final Draft EIR

5. Assistance with Tribal Notification requirements (write required letters), CEQA filings, paperwork, etc. (City to pay costs of filing fees, mail letters and track responses).

6. Other as required by CEQA.

Task 6. Draft and Final General Plan Amendments

The consultant team will compile the findings and recommendations from the previous tasks into a General Plan Amendment. The Plan document should include visually-appealing graphics and reader-friendly content.

Task 6 Deliverables:

The consultant team will prepare the following documents/deliverables:

• Administrative Draft General Plan Amendment. Including one round of City staff review and comment. • Screencheck Draft General Plan Amendment.
• Public Draft General Plan Amendment. After receiving City staff comment, the consultant team will prepare the Draft General Plan Amendment . This will be reviewed by the community (all community touchpoints including stakeholder meetings to be defined at key milestones in Community Outreach an d Engagement Plan), Planning and Transportation Commission, and City Council . • Revised Public Draft General Plan Amendment. After receiving City Council, Planning and Transportation Commission, and community comments on the Draft General Plan Amendment, t he consultant team will prepare a Revised Public Draft General Plan Amendment – based on City Council direction. The Revised Public Draft General Plan Amendment will serve as the project description for CEQA purposes. The Revised Public Draft General Plan Amendment will be reviewed by the Planning and Transportation Commission, who will provide a recommendation to the City Council for adoption. The document will be considered by the City Council during a Public Hearing for adoption. • Final General Plan Amen dment. This version will include any edits, if requested, by the City Council. A final document shall be provided to the City in Microsoft Word and as a PDF.

The consultant team shall be available to attend the meetings listed above (up to three Planning and Transportation Commission and City Council meetings), as needed.

City Resources Available

2 See City of San Carlos 2030 General Plan EIR – Table 4.10-1

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The City of San Carlos has the following resources available to support the work, outreach, and materials needed to complete this Scope of Work:

• Mapping/GIS (in contract with CalCAD)
• Basic GIS information includes e.g. zoning, land use, building permits, planning permits, streets, housing sites inventory, and City owned parcels.
• Newsletters for civic engagement (City under separate, existing contract with consultant who prepares quarterly newsletters sent to every resident called the “Good Living Newsletter,” as well as focused topic brochures known as “Spotlight.”)
• Social Media: Facebook, Twitter, YouTube, Next Door
• Video recordings for public outreach
• A list of existing projects in pipeline
• Preliminary stakeholders’ list/business organizations

Submittal Requirements

All Proposals shall include the following minimum information:

1. Cover Letter: Indicate interest and commitment to perform the above services for the City of San Carlos as outlined in this RFP. Include contact information (physical address, telephone, and email address) for the primary person responsible for the proposal who will be the point of contact for the City on the correspondence and communications pertaining to the proposal. The cover letter should also summarize the key points of the consulting team’s interest, qualifications, and pertinent areas of expertise.

2. Scope of work that responds to the tasks listed above. In particular, the scope of work should describe how to create a thoughtful community outreach and engagement plan that considers different viewpoints in the community.

3. Timeline: Completing this project by September 2024 is critical to the City of San Carlos . Provide an estimated overall timeline for the project (as a Gantt chart), including a description of major project milestones, as well as how soon the Consultant is ready to commence work. This timeline should include a detailed schedule with a projected month and year for all tasks listed in this RFP.

4. Project Team Organization: Describe the project team members with roles, areas of expertise and responsibility clearly identified. Indicate the time commitment of each team member and sufficient level of detail to enable reviewers to evaluate the effort expended for all personnel including number of hours expended by team member for each task.

5. Relevant Experience: Description of projects completed by the consultant team relevant to the scope of work contained herein that have been completed in the last five years. Discuss the team's unique qualifications to best perform these services for the City.

6. References and Local Projects: Provide three client references and include a list of any projects that the consultant team (prime consultant and subconsultants) have worked on within the City of San Carlos in the past five years.

7. Estimated Fee: Provide a fee estimate that includes a list of hourly billing rates for each proposed team member. Include all direct and indirect expenses, including costs to revise and print the revised General Plan and Gener al Plan EIR. Provide line-item costs for each deliverable of each task and total for each task.

Submittal: Interested individuals or firms shall submit one electronic copy, via email, by Wednesday, May 24, 2023 by 5 p.m. (PT) to Lisa Porras, Planning Manager, at [email protected]

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Attachments:

1. City of San Carlos Professional Services Agreement Template

2. Exhibit A – Scope of Work and Schedule

3. Exhibit B – Fee Schedule

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Agreement for Professional Services 1 Revised 04/08/2022

AGREEMENT FOR PROFESSIONAL SERVICES

This Agreement is made and entered into as of __________________ by and between the City of San Carlos hereinafter called "CITY" and ____________________ hereinafter called "CONSULTANT".

RECITALS

This Agreement is entered into with reference to the following facts and circumstances:

A. That CITY desires to engage CONSULTANT to render certain professional services in the CITY;

B. That CONSULTANT is qualified to provide such services to the CITY and;

THEREFORE, the CITY has elected to engage the services of CONSULTANT upon the terms and conditions as hereinafter set forth.

1. Services. The services to be performed by CONSULTANT under this Agreement shall include those services set forth in Exhibit A, which is, by this reference, incorporated herein and made a part hereof as though it were fully set forth herein.

Performance of the work specified in said Exhibit is hereby made an obligation of CONSULTANT under this Agreement, subject to any changes that may be made subsequently hereto upon the mutual written agreement of the said parties.

Where in conflict, the terms of this Agreement supersede and prevail over any terms set forth in Exhibit A.

2. Term; Termination. (a) The term of this Agreement shall commence upon the date hereinabove written and shall expire upon completion of performance of services hereunder by CONSULTANT . (b)
Notwithstanding the provisions of (a) above, CITY may terminate this Agreement without cause by giving written notice not less than ten (10) days prior to the effective date of termination, which date shall be included in said notice. In the event of such termination, CITY shall compensate CONSULTANT for services rendered, and reimburse CONSULTANT for costs and expenses incurred, to the date of termination, calculated in accordance with the provisions of paragraph 3. In ascertaining the services actually rendered to the date of termination, consideration shall be given both to completed work and work in process of completion.

Nothing herein contained shall be deemed a limitation upon the right of

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Agreement for Professional Services 2 Revised 04/08/2022 CITY to terminate this Agreement for cause, or otherwise to exercise such rights or pursue such remedies as may accrue to CITY hereunder.

3. Compensation; Expenses; Payment . CITY shall compensate CONSULTANT for all services performed by CONSULTANT hereunder in an amount based upon CONSULTANT ’s hourly rates during the time of the performance of said serv ices. A copy of CONSULTANT ’s hourly rates for which services hereunder shall be performed are set forth in CONSULTANT’s fee schedule marked Exhibit B hereof, attached hereto and by this reference incorporated herein.

Notwithstanding the foregoing, the combined total of compensation and reimbursement of costs payable hereunder shall not exceed the sum of _____________________ ($________________) unless the performance of services and/or reimbursement of costs and expenses in excess of said amounts have been approved in advance of performing such services or incurring such costs and expenses by CITY ’s City Manager (for contracts less than $75,000 or authorized by City Council action for contracts $75,000 or more by motion duly made and carried).

Compensation and reimbursement of costs and expenses hereunder shall be payable upon monthly billing therefor by CONSULTANT to CITY, which billing shall include an itemized statement, briefly describing by task and labor category or cost/expense items billed.

4. Additional Services . In the event CITY desires the performance of additional services not otherwise included within the services described in Exhibit A, such services shall be authorized in advance of the performance thereof by CITY’s City Manager (for contrac ts less than $75,000 or authorized by City Council action for contracts $75 ,000 or more by motion duly made and carried) . Such amendment to this Agreement shall include a description of the services to be performed thereunder, the maximum compensation and reimbursement of costs and expenses payable therefor , the time of performance thereof, and such other matters as the parties deem appropriate for the accomplishment of such services. Any additional services causing the total contract price to exceed $75,000, shall require approval by the City Council. Except to the extent modified by written amendment, all other terms and conditions of this Agreement shall be deemed incorporated in each such amendment.

5. Records. CONSULTANT shall keep and maintain accurate records of all time expended and costs and expenses incurred relating to services to be performed by CONSULTANT hereunder. Said records shall be available to CITY for review and copying during regular business hours at CONSULTANT’s place of business or as otherwise agreed upon by the parties.

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Agreement for Professional Services 3 Revised 04/08/2022

6. Authorization. This Agreement becomes effective when endorsed by both parties in the space provided below.

7. Reliance on Professional Skill of CONSULTANT. CONSULTANT represents that it has the necessary professional skills to perform the services required and the CITY shall rely on such skills of the CONSULTANT to do and perform the work. In performing services hereunder CONSULTANT shall adhere to the standards generally prevailing for the performance of expert consulting services similar to those to be performed by CONSULTANT hereunder. CONSULTANT acknowledges the importance to CITY of the skill, competency, ability to appropriately work with CITY staff and expertise of individual staff assigned to the project, and accordingly the individuals assigned to the Project must be acceptable to CITY.

8. Documents. All documents, plans, drawings, renderings, and other papers, or copies thereof, as finally rendered, prepared by CONSULTANT pursuant to the terms of this Agreement, shall, upon preparation and delivery to CITY, become the property of CITY.

9. Relationship of Parties. It is understood that the relationship of CONSULTANT to the CITY is that of an independent contractor and all persons working for or under the direction of CONSULTANT are its agents or employees and not agents or employees of the CITY.

10. Schedule. CONSULTANT shall adhere to the schedule set forth in Exhibit A; provided, that CITY shall grant reasonable extensions of time for the performance of such services occasioned by governmental reviews of CONSULTANT’s work product or other unavoidable delays; provided, further, that such unavoidable delay shall not include strikes, lockouts, work stoppages, or other labor disturbances conducted by, or on behalf of, CONSULTANT’s officers or employees.

CONSULTANT acknowledges the importance to CITY of CITY’s Project schedule and agrees to put forth its best professional efforts to perform its services under this Agreement in a manner consistent with that schedule.

11. Indemnity. CONSULTANT shall indemnify, defend, and hold harmless City, its officers, employees, agents and volunteers from and against all liability, loss, damage, expense, and cost (including, without limitation, reasonable legal counsel fees, expert fees and all other costs and fees of litigation) of every nature arising out of or in connection with CONSULTANT’s negligence, recklessness, or willful misconduct in the performance of work hereunder, or its failure to comply with any of its obligations contained in this Agreement, except such loss or damage

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Agreement for Professional Services 4 Revised 04/08/2022 caused by the active negligence or w illful misconduct of the City. It is expressly understood and agreed that the foregoing provisions are intended to be as broad and inclusive as is permitted by the law of the State of California and will survive termination of this Agreement. Nothing herein contained shall be construed to require CONSULTANT to indemnify CITY its officers, employees, agents and volunteers against any responsibility or lia bility in contravention of Section 2782 of the California Civil Code.

12. Insurance. CONSULTANT shall acquire and maintain Workers’ Compensation, employer’s liability, commercial general liability, owned and non- owned and hired automobile liability, and professional liability insurance cover ing risks relating to CONSULTANT ’s services to be performed hereunder in form subject to the approval of the City Attorney and/or CITY’s Risk Manager. The minimum amounts of coverage corresponding to the aforesaid categories of insurance per insurable event, shall be as follows:

Insurance Category Minimum Limits

Workers’ Compensation statutory minimum

Employer’s Liability $1,000,000 per accident for bodily injury or disease. CONSULTANT shall submit
to City a Waiver of Subrogation
endorsement in favor of City, its officers,
agents, employees, and volunteers.

Commercial General Liability $1,000,000 (to $5,000,000 depending on exposure) per occurrence for bodily
injury, personal injury, and property
damage, including w ithout limitation,
blanket contractual liability and
coverage for explosion, collapse and
underground property damage hazards.

If a general aggregate limit applies,
either the general aggregate limit shall
apply separately to this project/location
or the general aggregate limit shall be
twice the required occurrence limit.

Coverage must be at least as broad as
Insurance Services Office form CG 00

01. Automobile Liability $1,000,000 per accident for bodily injury and property damage (coverage

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Agreement for Professional Services 5 Revised 04/08/2022 required to th e extent applicable to
CONSULTANT’s vehicle usage in
performing services hereunder)

1Professional Liability $1,000,000 per claim and if a general aggregate limit applies, general
aggregate limit shall be twice the
required occurrence limit.

Concurrently with the execution of this Agreement, CONSULTANT shall furnish CITY with certificates and copies of information or declaration pages of the insurance required hereunder and, with respect to evidence of commercial general liability and automobile liability insurance coverage, original endorsements:

(a) Precluding cancellation or reduction in per occurrence limits before the expiration of thirty (30) days (10 days for nonpayment) after City shall have received written notification of cancellation in coverage or reduction in per occurrence limits by first class mail;

(b) CONSULTANT’s general liability policies shall be primary and non- contributory, and be endorsed using Insurance Services Office form CG 20 10 to provide that City and its officers, officials, employees, and agents shall be additional insured under such policies. An endorsement providing completed operations coverage for the additional insured, ISO form CG 20 37, is also required.

Claims Made Policies
If any of the required policies provide claims-made coverage:

1. The Retroactive Date must be shown, and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

3. If coverage is canceled or non- renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work.

Verification of Coverage

1 Note: Professional liability insurance coverage is not required if the contractor/vendor/consultant is not providing a service regulated by the state. (Examples of ser vice providers regulated by the state are insurance agents, professional engineers, doctors, certified public accountants, lawyers, etc.) Please check and initial the following if professional liability is NOT required for this agreement. Recommended ______ [Project Manager] Approved _______[Risk Manager]

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Agreement for Professional Services 6 Revised 04/08/2022 Consultant shall furnish the CITY with original certificates and amendatory endorsements effecting coverage required by this clause. All certificates and endorsements are to be received and approved by the CITY before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The CITY reserves the right to require c omplete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.

Waiver of Subrogation
Consultant hereby grants to CITY a waiver of any right to subrogation which any insurer of said Cons ultant may acquire against the CITY by virtue of the payment of any loss under such insurance. This provision applies regardless of whether or not the CITY has requested or received a waiver of subrogation endorsement from the insurer.

Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.

Coverage
It is a requirement under this agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits shall be made available to the Additional Insured and shall be (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy, whichever is greater.

Primary and Non-Contributory Coverage
The Additional Insured coverage under the Consultant’s policy shall be “primary and non-contributory” as will not seek contribution from the CITY insurance or self-insurance and shall be at least as broad as C G 20 01 04

12. Excess Insurance
The limits of insurance required in this agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of CITY before the CITY insurance or self -insurance shall be called upon to protect it as a named insured.

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Agreement for Professional Services 7 Revised 04/08/2022

13. W orkers’ Compensation. CONSULTANT acknowledges and c ertifies awareness of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self -insurance in accordance with the provisions of that Code, and CONSULTANT certifies and agrees to compliance with such provisions before commencing the performance of the work of this agreement.

14. Subcontractors (If applicable). CONSULTANT agrees to include with all subcontractors in their subcontracts the same requirements and provisions of this agreement including the indemnity and Insurance requirements to the extent they apply to the scope of the Subcontractors’ work. Subcontractors hired by CONSULTANT agree to be bound to CONSULTANT and CITY in the same manner and to the same extent as CONSULTANT is bound to CITY under the Contract documents.

Subcontract shall agree to include these same provisions in any agreement with a sub- subcontractor. CONSULTANT shall require all subcontractors to provide a valid certific ate of insurance and the required endorsements included in the agreement prior to commencement of any work and will provide proof of compliance to the CITY.

Subcontractor shall agree to be bound to CONSULTANT and CITY in the same manner and to the same extent as CONSUTLANT is bound to CITY under the Contract Documents. Subcontractor shall further agree to include the same requirements and provisions of this agreement, including the indemnity and Insurance requirements, with a Sub- subcontractor to the extent they apply to the scope of the Sub- subcontractors’ work. A copy of the CITY Contract Document Indemnity and Insurance provisions shall be furnished to the subcontractor upon request.

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Agreement for Professional Services 8 Revised 04/08/2022 recruitment, or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONSULTANT shall at all times be in compliance with the requirements of the Federal Americans With Disabilities Act (Public Law 101- 336) which prohibits discrimination on the basis of disability by public entities. The CONSULTANT agrees to post in conspicuous places available to employees and applicants for employment any notices provided by the CITY setting forth the provisions of this non-discrimination clause.

15. N otice. All notices required by this Agreement shall be given to the CITY and CONSULTANT in writing, by first class mail, postage prepaid, addressed as follows:

CITY: City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: ____________________

CONSULTANT: _ ____________________
Address
Phone
Attention: ______________

16. Non-Assignment. This Agreement is not assignable either in whole or in part.

17. Amendments. This Agreement may be amended or modified only by written agreement signed by both parties.

18. Business Registration. VENDOR agrees to comply with Chapter 5.04 of the Municipal Code and pay all fees required to be paid.

19. Validity. The invalidity in whole or in part of any provision of thi s Agreement shall not void or affect the validity of any other provision of this Agreement.

20. Governing Law. This Agreement shall be governed by the laws of the State of California and any suit or action initiated by either party shall be brought in the County of San Mateo, California. In the event of litigation between the parties hereto to enforce any provision of the Agreement, the unsuccessful party will pay the reasonable attorney’s fees and expenses of litigation of the successful party.

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Agreement for Professional Services 9 Revised 04/08/2022

21. Mediation. Should any dispute arise out of this Agreem ent, the parties shall meet in mediation and attempt to reach a resolution with the assistance of a mutually acceptable mediator. Neither party shall be permitted to file legal action without first meeti ng in mediation and making a good faith attempt to reach a mediated resolution. The costs of the mediator, if any, shall be paid equally by the parties. If a mediated settlement is reached neither party shall be deemed the prevailing party for purposes of the settlement and each party shall bear its own l egal costs. If a party refuses or fails to participate in mediation in good faith prior to filing a lawsuit, then that party shall be barred from recovery of attorneys fees and costs of suit.

22. Conflict of Interest. CONSULTANT may serve other client s, but none who are active within the City of San Carlos or who conduct business that would place CONSULTANT in a "conflict of interest" as that term is defined in State law.

23. Entire Agreement . Each party acknowledges that this agreement, the exhibits hereto, and the documents incorporated by reference herein constitute the complete agreement and exclusive statement of the terms and conditions between the parties, which supercedes and merges all prior proposals, understandings and all other agreements, verbal and written, between the parties relating to the subject matter of this agreement. This agreement may not be modified or altered except by written instrument duly executed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written by their respective officers duly authorized in that behalf.

CITY OF SAN CARLOS:

Dated: _______________ ______________________________ Jeff Maltbie, City Manager

ATTEST:

Dated: _______________ ______________________________ Crystal Mui, City Clerk

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Agreement for Professional Services 10 Revised 04/08/2022 APPROVED AS TO FORM:

Dated: _______________ ______________________________ Gregory J. Rubens, City Attorney

CONSULTANT/CONTRACTOR/VENDOR:

I acknowledge that I have full authority to execute this agreement on behalf of the Consultant/Contractor/Vendor, and have read, understand, and agree to comply with the provisions of this Agreement, including the Insurance and indemnity requirements set forth herein.

Dated: _______________ ______________________________

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Agreement for Professional Services 9 Revised 03/14/2019

EXHIBIT A

SCOPE OF WORK AND SCHEDULE

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Agreement for Professional Services 10 Revised 03/14/2019

EXHIBIT B
CONSULTANT’S FEE SCHEDULE

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PLACEWORKS 1
JUNE 14, 2023
EXHIBIT A:

SCOPE OF WORK AND COSTS
This exhibit describes the scope of services, schedule, products, and meetings for the San Carlos General Plan 2030 Reset to be conducted by PlaceWorks for the City of San Carlos in cooperation with W-Trans.

SCOPE OF SERVICES
Project Initiation and Management
Under Task 1, PlaceWorks will work closely with City staff to establish the structure for the project by setting interim key milestone dates and providing the management tools to keep the project on schedule with the fall 2024 end date in mind.

1.1 Kickoff Meeting and City Tour
The PlaceWorks team will meet with City staff to begin the project; identify the project goals, opportunities, and constraints; and refine roles and responsibilities and expectations for schedule, process, and work products. At this meeting, we will review existing background data and identify ways in which City staff and PlaceWorks can most effectively work together as a team, discussing possible opportunit ies to streamline the process. We will also discuss the buildout horizon year and the advantages of extending it beyond 2030, even if on an interim basis. The meeting will provide an opportunity to fine- tune PlaceWorks’ suggested work program and make any needed changes to our scope. We will also discuss how the General Plan Update and Environmental Impact Report (EIR) processes will be integrated and coordinated with other relevant recent and ongoing City initiatives.

As part of the kick -off meeting, the P laceWorks team will discuss the outreach and engagement strategy with City staff to ensure that a diverse group of community members and organizations participate in the General Plan Update process in a meaningful way through community events, an online pr esence, innovative graphics (including branding), and multiple means of input. We will also discuss strategies to achieve the overall outreach goals in light of the “surgical” nature of the General Plan Amendment and focus on the EIR.

Finally, City staff and the PlaceWorks team will tour San Carlos to identify and photograph existing conditions at key locations in the city. We will also examine areas of the city that will be subject to special attention in the General Plan Update, focusing on commercial, office and industrial areas that are outside of the existing and proposed specific plan areas.

1.2 Work Plan
Based on the work scope review and discussion of roles and responsibilities at the kickoff meeting, PlaceWorks will prepare a detailed work plan, based o n the proposal scope of work to serve as the backbone of the project. The work plan will focus on communication

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C ITY OF S AN C ARLOS
S AN C ARLOS G ENERAL P LAN 2030 R ESET
EXHIBIT A : SCOPE OF WORK AND COSTS
PLACEWORKS 2
JUNE 15, 2023
protocols, regularly scheduled meetings, project tasks and deliverables. The workplan will include a detailed Gantt chart to show the interconnections between key task milestones leading to approval of the plan and certification of the EIR in the fall of 2024. We will submit draft and final versions of the workplan to allow for City staff review and approval.

1.3 Project Management
In addition to coordinating the bi -weekly conference calls, Alexis Mena, Project Manager, will serve as the day -to-day contact, and will be responsible for overseeing the budget, schedule, and overall team coordination and quality control throughout the du ration of the project. Steve Noack, Principal-in-Charge, will review all documents prior to submitting them to City staff.

Deliverable(s):
 Project Kick-Off Meeting, Agenda, additional meeting materials  Site Tour
 Draft Work Plan
 Final Work Plan
 Regular, Bi-Weekly Progress Calls + Meeting Agendas and Summaries Community Engagement
As noted in the RFP, the work does not anticipate changing any existing land use designations nor associated zoning standards and future non -residential buildout is expected to oc cur on lands currently designated for such uses. Since the General Plan amendments would focus on increasing the density and intensity of existing non - residential uses, the community outreach and engagement strategy will focus on educating stakeholders about the reasons for expanding the buildout envelope, and soliciting and understanding community concerns about the effects of additional growth on mobility and transportation, infrastructure, environmental stewardship, services, recreation and open space. The community outreach and engagement strategy will also be aligned with the required EIR public scoping period to provide an opportunity for the community to comment on the planned content of the EIR.

2.1 Draft Community Outreach and Engagement Plan
In close collaboration with City staff, PlaceWorks will prepare an outreach and engagement plan specifically tailored to the General Plan update process. The Engagement Plan will define the specific opportunities for public input, including a timeline for meetings, a staffing plan, and desired outcomes at each point of engagement.

Deliverables:
 Draft Engagement Plan
 Final Engagement Plan

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C ITY OF S AN C ARLOS
S AN C ARLOS G ENERAL P LAN 2030 R ESET
EXHIBIT A : SCOPE OF WORK AND COSTS
PLACEWORKS 3
JUNE 15, 2023

2.2 Stakeholder Focus Groups
PlaceWorks will prepare for and facilitate up to four (4) in-person stakeholder focus group meetings to explain the process and benefits of updating the 2030 General Plan buildout projections, respond to stakeholder questions, and incorporate stakeholder concerns and suggestions into the 2030 Buildout Reset. Potential focus groups include the Harbor Industrial Area East Side Developers, Industrial Arts Business Association (IABA), the Greater East San Carlos Neighborhood (GESC). This scope assumes that City staff will take the lead role in identifying stakeholders and providing contact information. PlaceWork s will prepare meeting agendas and materials and provide them no less than 15 days in advance of the meetings and will provide meeting summaries within 5 days following the meetings.

Deliverables:
 Meeting materials x 4 Focus Group meetings
 Detailed Meeting summaries for posting x 4 Focus Group meetings

2.3 City Council Subcommittee Meetings
PlaceWorks will attend two (2) virtual meetings of the City Council subcommittee to keep Councilmembers informed about the 2030 Buildout Reset and receive subcommittee input and direction as appropriate. Tentatively, we anticipate that the first meeting would happen early in the process and include an overview and discussion of the purpose and goals of the project, and the second meeting would be used to review proposed draft buildout numbers and a summary of stakeholder input received. The timing and content of the subcommittee meetings will be refined in consultation with City staff. PlaceWorks will provide staff report and presentation content no less than 15 days in advance of the subcommittee meetings, as well as subcommittee meeting summaries within 5 days. This scope assumes that the City Council subcommittee meetings will be held as virtual meetings.

Deliverables:
 Meeting materials x 2 City Council subcommittee meetings  Meeting summaries x 2 City Council subcommittee meetings

2.4 Study Sessions
PlaceWorks will work with City staff to schedule and prepare materials for two (2) study sessions; one each with the Planning and Transportation Commission and City Council. The sessions will be scheduled prior to the final hearings on the General Plan Amendment and EIR.

Deliverables:
 Meeting materials x 2 Planning & Transportation Commission and City Council subcommittee meetings
 Meeting summaries x 2 C Planning & Transportation Commission City Council subcommittee meetings

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2.5 Community Meeting (Optional Task)
As an optional task, PlaceWorks will work with City staff to organize and conduct one (1) community meeting to inform the public about the proposed General Pla n Amendment.

The meeting objectives, format and content will be developed with City staff, depending on the desired outcome of the event.

The cost for this optional task would be $6,000
Deliverables:
 Community Meeting Materials
 Detailed Meeting Summary for posting

2.6 Project Website (Optional Task)
As an optional task, PlaceWorks will work with the City’s Advance Planning staff to create and maintain a basic website throughout the 2030 Buildout Reset project. As the public - facing location for project informa tion and education, the website will be designed to be simple, visually attractive, and intuitive to navigate. The website will have links to public review documents and information on public meetings. PlaceWorks will update and maintain the website and wh erever possible meet or exceed WCAG 2.1 Level AA for Section 508 accessibility.

The cost for this optional task would be $9,150.

Deliverables:
 Draft and Final Website Mockups (PDF)
 Acquisition of Domain
 Hosting and maintenance of website
Existing Conditions Evaluation
PlaceWorks will initiate this task with a list of data needs for the existing conditions evaluation. We will review existing conditions in the City, including current planning initiatives, future and planned development projects, relevant policies in the San Carlos General Plan as amended, public infrastructure (existing and capital improvements), and transportation services. The information gathered in this task will also be used for the baseline and regulatory sections of the EIR in Task 5 below.

3.1 Existing Conditions Technical Memoranda
The PlaceWorks team will compile the findings of the reviews described above in the form of stand-alone memoranda. The memoranda will summarize existing commercial, office and industrial capacity; summarize existing projects in the development pipeline; discuss planned infrastructure and current public service levels. This information will provide City staff, decision-makers, and other stakeholders with a firm understanding of opportunities and constraints a ssociated with increasing buildout projections in San Carlos. Each technical memoranda will conclude with a bulleted list of implications for formulating buildout metrics as described in Task 4 below.

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3.2 Identify Potential Growth Sub Areas
Using the information from the existing conditions review, PlaceWorks will identify potential subareas that are suitable to accommodate additional commercial, office and industrial sector growth. The recommendations will be summarized in a memorandum and include maps and supporting text describing the criteria leading to the recommendations.

3.3 Existing Infrastructure and Mobility Analysis
PlaceWorks will assess the capacity and condition of the local water supply and distribution, wastewater conveyance and treatment, storm dra inage, and solid waste disposal systems. PlaceWorks will also describe and discuss “dry” utilities, including electricity, internet and cable. This assessment will be based on the latest available information, including documents prepared by the City and other service providers, as well as contacting outside agencies as applicable to document their assessment of infrastructure related to the General Plan Update. Existing conditions information will include a summary of the applicable regulatory framework and narrative descriptions of capacity and potential deficiencies.

Existing Traffic/Transportation Conditions
W-Trans will assess existing traffic and transportation conditions through the following tasks:
i. Collect and Review Existing Information and Data
Traffic Counts – Study Analysis Periods
 weekday a.m. (7:00 a.m. – 9:00 a.m.)
 weekend p.m. (4:00 p.m. – 6:00 p.m.)
Study Intersections
W-Trans will conduct new intersection turning movement counts at the following same 12 intersections that were studied in the General Plan:

1. El Camino Real and Holly Street*

2. Old County Road and Holly Street

3. Industrial Road and Holly Street

4. El Camino Real and San Carlos Avenue*

5. El Camino Real and Brittan Avenue*

6. Old County Road and Brittan Avenue

7. Industrial Road and Brittan Avenue

8. El Camino Real and Howard Avenue

9. Old County Road and Howard Avenue

10. San Carlos Avenue and Club Drive

11. Alameda de las Pulgas and San Carlos Avenue

12. Alameda de las Pulgas and Brittan Avenue
*Intersection data included in Downtown Specific Plan Traffic Study and counted in May 2023
Roadway Segments

1. US 101 north of Harbor Boulevard

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2. US 101 between Harbor Boulevard and Holly Street

3. US 101 between Holly Street and Brittan Avenue

4. US 101 south of Brittan Avenue

5. SR 82 El Camino Real north of Harbor Boulevard

6. SR 82 El Camino Real between Harbor Boulevard and Holly Street

7. SR 82 El Camino Real between Holly Street and Brittan Avenue

8. SR 82 El Camino Real south of Brittan Avenue
Roadway segment data will be obtained through Caltrans, C/CAG or other readily available sources.

The final list of study intersections and roadway segments will be confirmed with City of San Carlos staff prior to project commencement.
ii. Field Reconnaissance
W-Trans will conduct field reconnaissance visits during a typical weekday ( Tuesday, Wednesday or Thursday) to coincide with the two analysis periods. W -Trans will observe and note the following:
 Roadway cross-sections
 Intersection lane geometry and configuration
 Traffic control devices
 Surrounding land uses
 Sight distance
 Locations of pedestrian, bicycle, and transit facilities W-Trans will determine existing operating conditions at the study intersections and roadway segments, based on the field reconnaissance, data collection, and standard analysis methodologies.

W-Trans will also evaluate and document existing conditions with respect to the circulation system, including transit, bicycle and pedestrian facilities.

Deliverables (all in draft and final formats):
 Existing Conditions Memoranda
 Sub Area Recommendation Memorandum
 Growth Sub Area Memorandum
 Existing Infrastructure and Mobility Analysis
 Existing Traffic/Transportation Conditions
Land Use Scenario and Buildout Analysis

4.1 Land Use Scenario Development
Using the existing conditions and the identified growth sub area information from Task 3, PlaceWorks will develop a land use scenario and generate buildout metrics for non - residential growth. Recommended changes to the 2030 General Plan will solely be to address the increased capacity to ensure con sistency in the Plan. The recommended

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changes could include the Vision Statement, revised land use data (broken down at the TAZ level), and policies addressing growth and development in the City.

4.2 Land Use Scenario and Buildout Analysis
PlaceWorks will pre pare a qualitative analysis of potential impacts of the increased buildout projections on public services and infrastructure, based on the information prepared in Task 3.3 above, including planned expansion of services and programmed capital improvement projects. This scope of work does not include cost estimates for increased police or fire personnel, nor does it include cost estimates for future infrastructure improvements. PlaceWorks assumes that this information would be provided by the City’s economic consultant.

Transportation, Circulation and Mobility Analysis
W-Trans will prepare the transportation analysis. For the proposed General Plan Reset land use scenario we will complete a transportation, circulation, and mobility study. This study will detail how the buildout of the scenario would impact major intersections and street segments, impact overall circulation, improve walkability and bikeability, and the movement of transit, private shuttles, or other modes of transportation. As part of this task, we will review and incorporate recommendations from City’s Bicycle and Pedestrian Master Plan.
i. Trip Generation and Distribution
W-Trans will estimate the number of net- new trips added to the study area based on a three-step process: trip generation, trip distribution patterns, and trip assignment. The trip generation for the weekday daily, a.m. and p.m. peak hours for the existing land uses in the study area and each scenario will be determined based on standard average trip rates published in the 11th Edition of the Institute of Transportation Engineers’ Trip Generation Manual.

The trip distribution for the proposed General Plan Reset development will be confirmed with City of San Carlos staff prior to beginning analysis, including any assumptions regarding credits for pass -by, linked, or internal capture of the proposed project. Trip assignments will be based on the origin and destination patterns evaluated in the trip distribution, and the likely route of travel for the net-new project trips.

The traffic and circulation analysis will take into consideration both LOS and VMT. We have assumed two analysis scenarios:

1. Cumulative Conditions . Existing Condition peak hour volumes plus anticipated forecasted growth for the General Plan buildout year derived from the C/CAG Travel Demand Forecast Model. This scenario assumes completion of planned associated geometric and traffic control improvements at each study intersection.

2. C
umulative plus Preferred Scenario Conditions . Cumulative Year Condition volumes plus net-new trips estimated for the Preferred Scenario.

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ii. Vehicles Miles Traveled (VMT) Analysis
W-Trans will partner with Kittelson Associates (Kittelson) to assist with the travel forecasting modeling required for the VMT analysis. W -Trans and Kittelson have successfully partnered on several recent projects in San Carlos in this same manner.

Kittelson will request the 2040 Buildout land uses (housing units, population, jobs by six categories) to be added to the 2040 Baseline for the GP Reset Amendment in TAZ format from the City or PlaceWorks for input into the model. Kittelson will provide the team with a C/CAG TAZ map and a data format template.

Kittelson will prepare an existing condition model validation based on the counts provided by the project team. The validation will focus on the immediate study area and CMP routes.

Kittelson will utilize the C/CAG Countywide as recently modified in San Carlos for several southeast area studies. The base year in the model is 2019 and the forecast year is 2040 for cumulative conditions.

Kittelson will extract project (TAZ based) VMT per service population per SB 743 from the C/CAG travel forecast model for the relevant TAZs. W-Trans will compare the VMT per service population to the existing VMT and the 2040 No Pr oject VMT. We will apply the City of San Carlos VMT policy and threshold criteria to make a CEQA impact finding.

Transportation Operations Reports (Draft, Final)
W-Trans will prepare a Transportation Operations Report for consistency with the City’s General Plan guidelines. The report will include the intersection LOS traffic analysis and VMT analysis. One Draft and One Final Report is intended.

4.3 Mobility Analysis
W-Trans will conduct a mobility analysis that supports and encourages walking, bicycling, and the use of other active modes, and creates an environment for these modes to be real options for people of all ages and abilities. The mobility analysis will focus on topics such as the needed projects and improvements to create meaningful mode shift; first/last mile connectivity to the San Carlos Caltrain station); and connections to Downtown San Carlos and the East Side Innovation District. The recommendations in the 2020 City of San Carlos Bicycle and Pedestrian Master Plan will be used as a basis f or the proposed mobility strategies.

Citywide General Plan Amendment EIR
Because the General Plan Update will be programmatic as allowed by the CEQA Guidelines (14 California Code of Regulations [CCR] 15000 et seq.), we fully anticipate being able to streamline future projects in the city using Section 15183 and other streamlining provisions of the guidelines. PlaceWorks will work with the City to help eliminate environmental issues that do not apply, or that can be addressed using standard conditions of ap proval or compliance with state, federal, or local laws

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5.1 EIR Initiation
At a regularly scheduled check -in meeting, the PlaceWorks team will meet with City staff to begin the formal EIR phase of the project.

5.2 Project Description
PlaceWorks will prepare a detailed project description including detailing the project characteristics, land use summary tables, statistical tables comparing the existing land uses to the proposed changes, and figures to depict the proposed land use changes. The project description will use information from the General Plan to explain the existing buildout and projected buildout scenarios for the environmental analysis to study the impacts between the existing land uses and buildout of the proposed General Plan. Figures will be includ ed to highlight the focus of the geographical areas affected. The project description will also include project objectives and required discretionary approvals. This project description will be used for preparation of the Notice of Preparation (NOP) and EIR.

EIR Scoping
As discussed in Task 2, Community Engagement, in order to maintain the overall project schedule, we recommend that this task occur early on in the General Plan update process.

The scoping meeting could be held at a regularly scheduled Planni ng and Transportation Commission meeting and include updates to the General Plan update process in addition to soliciting comments on the content of the EIR.
i. Notice of Preparation
PlaceWorks will draft the NOP for public review and prepare the document for circulation using a format approved by the City. While most NOP formats do not include an initial study, we propose to include an initial study to eliminate issues from Appendix G that do not pertain to the city and focus the EIR on only those issues germ ane to the update.

PlaceWorks will prepare drafts of all requisite filing forms for approval by the City, and will submit them copies to the State Clearinghouse. This scope assumes the City will file the NOP with the County Clerk and publish the notice in the local paper, starting the 30 -day public comment period for the NOP.
ii. Scoping Meeting
PlaceWorks will assist the City in organizing and conducting one (1) in -person public scoping meeting to solicit comments regarding the scope and content of the environmental issues to be addressed in the EIR. At the meeting, we will be prepared to discuss the environmental review process and to answer questions. iii. SB 18 and Assembly Bill (AB) 52 Consultation
PlaceWorks will formalize the tribal consultation process, incl uding writing the consultation letters and initiating any consultation requests . The completion of the NOP is the opportune time to engage the tribes. All consultation proceedings will be documented as part of the administrative record.

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5.3 Technical Analysis
Air Quality, Energy, and GHG Emissions
PlaceWorks will prepare an air quality, energy and greenhouse gas (GHG) emissions analysis for the General Plan Reset and EIR. The analysis will be based on the current methodology of the Bay Area Air Quality Managem ent District (BAAQMD) for projects in the San Francisco Bay Area Air Basin (SFBAAB or Air Basin). PlaceWorks will prepare a communitywide criteria air pollutant and GHG emissions inventory and forecast for the General Plan Reset. The results of the technic al modeling will be compiled into the EIR.

Model outputs will be included as an appendix.

Noise
PlaceWorks will prepare a noise and vibration analysis for the General Plan Reset and SEIR.

The results of technical modeling will be included as an appendix.

PlaceWorks will review the existing noise and vibration conditions and the recently adopted Focused General Plan Update and other significant plans, goals, objectives, and policies related to noise and vibration as a foundation for the analysis of the General Plan Reset. Significant noise generators in the City include major transportation sources (US 101, El Camino Real, Caltrain, secondary roadways, and commercial/industrial land uses.

The results of noise monitoring conducted in September 2022 for the Fo cused General Plan Update will be incorporated into the SEIR.

The General Plan Reset may result in additional growth beyond what was identified in the Focused General Plan Update that includes new construction that would be considered noise-sensitive receptors (i.e., residential, schools, etc.), and may also include additional noise sources that could affect existing and/or future noise-sensitive receptors in the City.

To ensure that the General Plan Update limits the exposure of the proposed new noise- sensitive land uses to excessive noise levels in noise- sensitive areas and at noise-sensitive times of day, land use compatibility for noise sources and areas subject to significant noise in the future will be discussed. Methods to attenuate noise to reduce p otential noise exposure will be identified.

For potential noise impacts associated with transportation sources, a comparison between the existing conditions and projected future with implementation of the Land Use Element Update conditions will be provided , based on land use information provided by the City.

Traffic noise modeling will be conducted with the Federal Highway Administration (FHWA) Highway Traffic Noise Model. Project -related traffic noise level increases will be documented in a table format. Potential traffic noise impacts will be based on the level of increases by project-related new trips.

Public Utilities
Based on existing conditions review in Task 3, PlaceWorks will fold the findings into the EIR Chapter. This analysis will include recommendations on any required updates to policies, reports, or procedures intended to meet the needs of the City.

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Transportation
The Transportation Impact Analysis (TIA) will be prepared by W -Trans and Kittelson through completion of the following tasks.
i. Vehicles Miles Traveled (VMT) Analysis
Kittelson will recommend appropriate mitigation measures to reduce the project’s VMT impact, if needed. This will include incorporation of the City’s Transportation Demand Management (TDM) requirements of a 20 percent trip rate reduction and assessment of the potential for overall trip and VMT reduction.
ii. Support for Air, Greenhouse Gas and Noise Studies
Kittelson will run the C/CAG model and extract VMT data for SB 743 impact assessment for all scenarios, and provide the following:
a) Air Quality and Greenhouse Gas Emissions
Daily Trip Generation by Land Use Type. For the preferred land use scenario W -Trans will use the latest edition of the ITE Trip Generation Manual and provide Daily Weekday and Weekend Trips by land use type for
 Existing
 Proposed Project
Origin-Destination VMT. For the preferred land use scenario, Kittelson will provide the total Vehicle Miles Traveled (VMT) using an origin-destination model for the following Scenarios:

1. Existing

2. 2040 Preferred Land Use Scenario at Buildout

3. 2040 Current Plan/Zoning
For the three conditions above, Kittelson will provide the population and employment in the VMT model to validate the data for the three conditions. • Fleet Mix: For planning areas where there is warehousing or industrial (i.e., where there a larger number of vendor/truck deliveries), Kittelson will provide daily trips and/or VMT by fleet mix (e.g., % passenger vehicles, % medium -duty trucks, % heavy duty trucks)
• Quantify Trip Reductions . W -Trans will provide reductions in trips from the preferred land use scenario implementation measures such as transit, bicycles, walking, or TDM measures.
b) Noise
Kittelson will provide ADT segment volumes (both directions, not one-way) for all highway, major roadway and arterial segments in the traffic study area in r GIS shapefile with all data in DBF/Excel format:
 Existing
 Existing + Preferred Land Use Scenario
 Future (Cumulative 2040)

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 Future + Preferred Land Use Scenario
 Fleet mix [auto, medium -duty (2 axle, 6 tires), heavy -duty (3 axle+) on the study segments for existing and future timeframes
 Daytime (7 a.m. – 7 p.m.)/Evening (7 p.m. – 10 p.m.)/Nighttime (10 p. m.– 7 a.m.) percentage splits on the study segments for existing and future timeframes (if available)
 Speed limits on the study segments for existing and future timeframes  Number of lanes/roadway widths for the study segments  W-Trans will provide a graphic of the study segments used in the traffic analysis to assess potential impacts
iii. Alternative Modes of Transportation
A discussion of existing and planned pedestrian, bicycle and transit facilities will be provided, along with a review of applicable City and regional pedestrian, bicycle and transit plans. Potential safety issues for pedestrians or bicycles potentially resulting from the preferred scenario, including potential conflicts between project- generated vehicular or loading trips and pedestrians or bi cycles will be qualitatively assessed. Pedestrian and bicycle access to transit lines will be discussed. Measures to improve pedestrian, bicycle and transit access will be recommended in the Mobility Action Plan (Task 6). iv. C/CAG Congestion Management Program (CMP) Analysis
A regional roadway analysis will be performed according to guidelines described in the C/CAG Congestion Management Program (CMP). The CMP regional roadway analysis will include the roadway segments identified in Task 3 (Existing Conditions). v. Site Access, Safety, Hazards and Emergency Access Analysis W-Trans will evaluate whether the preferred scenario would conflict with a program, plan, ordinance or policy addressing the circulation system, including transit, roadway, bicycle and pedestrian facilities. Internal circulation within the study area and emergency access routes will be qualitatively assessed. The preferred scenario land use plan will be reviewed in terms of access, circulation and safety.

ADEIR/DEIR/FEIR Documentation
W-Trans will document all work assumptions, analysis procedures, findings, impacts and recommendations in an Administrative Draft EIR Transportation Impact Study Report for review and comment. In general, the report will consist of a description of the preferred scenario, methodologies used, analysis results, identification of significant transportation impacts (if any), and recommended mitigation measures. The report will be consistent with County of San Mateo Guidelines.

Following receipt of one set of unified non-contradictory comments from City staff on the Administrative Draft EIR Transportation Impact Analysis report, W -Trans will revise the report and prepare the Draft EIR Transportation Impact Analysis report. The Draft EIR Transportation Impact Analysis report will be provided electronically, and only one Draft EIR Transportation Impact Analysis submittal is intended.

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5.4 Administrative Draft EIR
PlaceWorks will prepare the first Administrative Draft EIR for review by the City. The document will follow the CE QA Guidelines and will cover the environmental topical areas that were not scoped out of the EIR through the NOP and scoping process. We envision the EIR as a programmatic document that will rely on the policies of the General Plan, Municipal Code, and development standards to address potential environmental impacts.

Because we want the City to be able to use the streamlining provisions of Section 15183 of the CEQA Guidelines, the EIR will also reference existing ordinances, policies, and standard conditions of approval used by the City to address impacts. The EIR will be clearly written and avoid the use of technical jargon so that the document is easily understood.

The analysis of issues will be thorough yet concise. The conclusions of the EIR must be based on substantial evidence.

PlaceWorks will provide the first Administrative Draft EIR in Word format with graphics in PDF to allow for efficient review and comment by staff. The use of track changes and comments in the text will expedite review time and allow for a discussion of comments as a team.

5.5 Screencheck and Public Review Draft EIRs
Upon receipt of comments from the reviewing team, PlaceWorks will prepare a Screencheck Draft EIR. This version will include changes made in response to review comments or an explanation of why the change was not made so that we can discuss as a team. The Screencheck Draft will be provided in Word format and in full PDF, including all graphics and support appendices.

PlaceWorks will edit the Screencheck Draft EIR based on comments provided by the City, providing a Public Review Draft EIR in combined PDF format for final review prior to distribution. The Public Review Draft EIR will include the Draft General Plan Amendment as an appendix, and all the technical analyses used in preparation of the EIR. Following a fatal- flaw review by the City, PlaceWorks will prepare the document for the public review process by drafting the public notice of availability (NOA) and notice of completion (NOC).

PlaceWorks will upload the Public Review Draft EIR to OPR.

PlaceWorks staff will prepare for and attend one (1) Planning & Transportation Commission hearing on the Draft EIR.

5.6 Final EIR and Response to Comments
Following receipt of all comments on the Draft EIR, written responses will be prepared for each comment. A Response to Comments section will be created for the Final EIR and will contain an introduction describing the public review process for the Draft EIR, copies of all comment letters, and written responses to all comments. Responses will focus on comments that address the adequacy of the Draft EIR. Comments that do not address EIR adequacy will be noted as such, and no further response will be provided unless deemed necessary by the City. Responses will be prepared by PlaceWorks with input from our technical specialists, as needed. The Final EIR will also contain revisions to the Draft EIR as

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necessary to respond to comments and/or correct inaccuracies identified after release of the EIR as a public draft. PlaceWorks will make one additional round of edits to the draft response to comments and Draft EIR based on City staff comments. PlaceWorks will ensure that the Final EIR is distributed to commenters on the Draft EIR at least 10 days prior to certifying the EIR (CEQA Guidelines Section 15088).

5.7 Findings of Fact/Statement of Overriding Considerations PlaceWorks will prepare findings and facts in support of findings, describing each of the significant impacts identified by the E IR and the determination of whether those impacts would be reduced to below a level of significance by proposed mitigation measures.

Additionally, CEQA requires that when an agency approves a project that will have significant adverse environmental effects that are unavoidable, it must make a statement of its views on the ultimate balancing of the merits of approving the project despite the environmental consequences. PlaceWorks will coordinate with the City to draft the statement of overriding consideratio ns for any unavoidable significant impacts that may be identified by the Final EIR.

PlaceWorks will prepare the Mitigation Monitoring and Reporting Program (MMRP) pursuant to Section 21081.6 of the Public Resources Code. It will be presented in standard City format and will identify the significant impacts that would result from the proposed General Plan, proposed mitigation measures for each impact, the times at which the measures will need to be conducted, the entity responsible for implementing the mitigation measure, and the City department or other agency responsible for monitoring the mitigation effort and ensuring its success.

PlaceWorks will draft the Notice of Determination (NOD) to accompany the consideration of the General Plan and EIR by the City. The City will be responsible for filing the NOD with the San Mateo County Clerk and PlaceWorks will file the NOD with the State Clearinghouse.

This scope does not include the fees for filing, which can be substantial. PlaceWorks will coordinate with staff regarding the filing fees as part of the Final EIR.

Deliverable(s):
 Scoping Meeting
 Administrative Draft EIR (including 1 round of review for city comments)  Screencheck Draft EIR
 Public Review Draft EIR
 Assistance with Tribal Notification requirements, CEQA filings, paperwork, etc.  Administrative and Public Review drafts of the Final EIR  Mitigation Monitoring and Reporting Plan
 Findings of Facts and Statement of Overriding Considerations

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Draft and Final General Plan Amendments

6.1 Administrative/Screencheck Drafts General Plan
Amendment
PlaceWorks will prepare the General Plan Amendment document based on the approved land use scenario and buildout analysis. We will submit one administrative draft for City review, then prepare the screencheck and public rev iew versions for circulation and discussion at the Planning and Transportation Commission and City Council hearings.

6.2 Revised Public Draft General Plan Amendment
After receiving City Council, Planning and Transportation Commission, and community comments o n the Draft General Plan amendment, PlaceWorks will prepare a Revised Public Draft General Plan Amendment. The Revised Public Draft General Plan Amendment will serve as the project description for CEQA. The Revised Public Draft General Plan Amendment will be reviewed by the Planning Transportation Commission and a recommendation to the City Council for adoption.

PlaceWorks will attend two (2) final hearings on the General Plan Amendment and Final EIR with the Planning & Transportation Commission and the City Council

6.3 Final General Plan Amendment
PlaceWorks will prepare the Final General Plan Amendment based on review by the City Council, subsequent to certification of the EIR.

Deliverable(s):
 Administrative Draft General Plan Amendment
 Screencheck Draft General Plan Amendment
 Public Draft General Plan Amendment
 Revised Public Draft General Plan Amendment
 Final General Plan Amendment
 PTC Hearing materials, and attendance
 CC Hearing materials and attendance

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SCHEDULE, PRODUCTS, AND MEETINGS
As shown in the attached schedule, PlaceWorks can meet the desired end date of September 2024, with the understanding that the Draft EIR would need to be published no later than July 15 2024 to allow for the 45-day public review period.

We have a solid track record in expediting planning and environmental projects, including the recently completed Long Range Development Plan EIR for UC Berkely, where the project was completed within a 13-month period.

PlaceWorks has a strong track record in meeting project schedules and coordinating closely with its clients. Over years of managing projects similar to the General Plan Buildout Reset, we have developed a variety of tools to keep projects on schedule and ensure that staff are well informed at all times:
 We maintain an up-to-date schedule throughout the project, to ensure that all team members are aware of upcoming meetings and product due dates.  We stay in close, regular contact with staff and our subconsultants and document important decisions about the project in writing, which ensures that decisions are understood by all team members.
 We schedule project due dates for staff and subconsultants with adequate time for editing and formatting into finished reports.
 We limit subconsu ltants’ payments to specific milestones, so as to ensure that progress on the project is commensurate with billings.

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PROJECT SCHEDULE

Month 1 Month 2 M onth 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 16 Days/
Weeks
Week
1 Week
2 Week
3 Week
4 Week
5 Week
6 Week
7 Week
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69 Task 1. Project Initiation and Management
Kickoff Meeting and City Tour/Suggested Meeting Schedule P laceWorks/City ongoing * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Work Plan PlaceWorks/City 4 weeks
Project Management PlaceWorks ongoing
Task 2. Community Engagement
Draft Community Outreach and Engagement Plan PlaceWorks/City 4 weeks Stakeholder Focus Groups (two per day) P laceWorks/City 2 days * * City Council Subcommittee Meetings (TBD) P laceWorks/City 2 days Study Sessions PlaceWorks/City 2 day s * *
Task 3. Existing Conditions Evaluation
Existing Conditions Technical Memoranda PlaceWorks 11 weeks Identify Potential Growth Sub Areas PlaceWorks/City 5 weeks Existing Infrastructure and Mobility Analysis PlaceWorks 11 weeks Existing Traffic/Transportation Conditions W-Trans 11 weeks Task 4. Land Use Scenario and Buildout Analysis
Land Use Scenario Development PlaceWorks 4 weeks
Land Use Scenario and Buildout Analysis PlaceWorks 6 weeks Task 5. Citywide General Plan Amendment EIR
EIR Initiation (incl. 30-day scoping period) P laceWorks/City 9 weeks * Technical Analysis PlaceWorks 8 w eeks
Administrative Draft EIR PlaceWorks/City 8 weeks
Screnchk/Public Review Draft EIRs (incl. 45-day public review) P laceWorks/City 11 weeks * Final EIR and Response to Comments PlaceWorks/City 4 w eeks * * Findings of Fact / Statement of Overriding Considerations PlaceWorks/City 4 weeks Task 6. Draft and Final General Plan Amendments
Administrative/Screencheck Drafts General Plan Amendment PlaceWorks/City 9 weeks Revised Public Draft General Plan Amendment PlaceWorks/City 4 weeks * * Final General Plan Amendment PlaceWorks/City 4 weeks
Legend
PlaceWorks Team
NVTA/County Review Period
Public Review Period
Public Hearing/Meeting
*
Month 15 Month 17Tasks Owners Time

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PLACEWORKS 18
JUNE 14, 2023
COSTS
The estimated cost to complete the scope of work described in this proposal is $338,184.

The billing rates for each team member are included in Table 1.

ASSUMPTIONS
This scope of work and cost estimate assumes that:
 PlaceWorks staff will schedule and attend sixteen (16) check -in meetings over the course of the project.
 PlaceWorks will organize and facilitate up to four (4) focus group meetings, two (2) City Council Subcommittee meetings, and two (2) study sessions (one each for the PTC and CC).
 Steve Noack and staff will attend one (1) EIR scoping meeting, one (1) hearing on the Draft EIR, and one (1) hearing on the General Plan Amendment and FEIR with the PTC.  Steve Noack and staff will attend one (1) hearing on the hearing on the General Plan Amendment and FEIR with the CC.
 No more than 40 hours of PlaceWorks staff time will be required to respond to comments on the Final EIR. If additional labor is necessary, a contract amendment allowing additional work will be necessary.
 All products will be submitted to the City in electronic (Word & PDF) format.  City staff will be responsible for meeting logistics, including schedule coordination, document production, printing notices, mailing costs, room reservations, room set-up and take-down, and refreshments.
 City staff will act as a clearinghouse for comments on all administrative draft documents, and will provide PlaceWorks with a single, internally reconciled set of comments on each administrative draft.
 There will be a single round of intensive review and revision to each administrative draft product prior to the screencheck draft. If City staff feels that a second administrative draft is needed, a contract amendment allowing additional work will be necessary.
 Revisions to screencheck drafts will focus on typographica l errors, formatting and other minor edits. Such revisions will not include content changes.  Billing rates for this project are guaranteed through June 2025. Billing rates would be subject to an increase of up to 6 percent on July 1, 2025, and in each subsequent year thereafter. A budget increase would be necessary to cover costs incurred after July 1, 2025.
 PlaceWorks will send an invoice for work completed each month. The invoice will show hours worked by labor category, billing rate, and total by labor category plus

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C ITY OF S AN C ARLOS
S AN C ARLOS G ENERAL P LAN 2030 R ESET
EXHIBIT A : SCOPE OF WORK AND COSTS
PLACEWORKS 19
JUNE 15, 2023
subconsultants and reimbursable expenses. Special invoicing requirements may necessitate an additional fee.
 Multiple changes from the City about how to proceed will require a contract amendment to allow completion of the additional work.
 PlaceWorks will use ArcGIS version 10.x- compatible shapefiles and/or geodatabases from the City for the development of the project’s base map and subsequent thematic maps. All files delivered by the City are assumed to be current, spatially accurate and aligned with one another, and referenced to a common coordinate system appropriate for the area. Each shapefile will arrive with the appropriate coordinate system definitions (i.e. .PRJ files); likewise, the coordinate system of geodatabases, if applicable, will contain proper coordinate system definitions. This scope assumes that the City’s existing GIS information, including attribute data, are essentially complete and that any needed adjustments by PlaceWorks will be minor. Additionally, PlaceWorks will expect metadata documentation for each shapefile and/or geodatabase submitted for this project including, but not limited to, data author and description, data creation date, attribute field definitions, and frequency of data updates.
 After creating the initial base map, PlaceWorks will provide a copy to San Carlos staff for review and approval prior to use for subsequent mapping work. At the conclusion of the project, PlaceWorks will provide a CD to the City of San Carlos containing all original GIS data as well as project- specific data layers modified or created by PlaceWorks along with pertinent metadata documentation.

OPTIONAL TASKS
This proposal includes the following optional tasks. Costs for these tasks are not included in the costs in Table 2:
 Website Design and Management-$9,150
 Community Meeting-$6,000

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PLACEWORKS 20
JUNE 14, 2023

COST TABLE

Noack Jansen Mena Kha Miller Vermilion Vang E. Parks Chung Khan Fitzgerald GRAPHICS TECH.

EDITOR
WP/
CLERICAL W-Trans / Kittelson
Principal Principal
Senior
Associate Associate
Project
Planner Principal
Senior
Associate Associate
Associate
Principal
Project
Planner
Sr.

Engineer GIS
Hourly Rate: $260 $260 $235 $140 $135 $250 $230 $155 $230 $145 $230 $185 $130 $135 $135 TASK 1. Project Initiation and Management

1.1 Kickoff Meeting and City Tour 6 6 12 $47 $2,417 5,530 $553 $6,083 $8,500

1.2 Work Plan 1 4 8 13 $46 $2,366 0 $0 $0 $2,366

1.3 Project Management 12 32 44 $213 $10,853 0 $0 $0 $10,853 Task 1. Subtotal 19 0 36 8 6 0 0 0 0 0 0 0 0 0 0 69 $306 $15,636 $5,530 $553 $6,083 $21,719 TASK 2. Community Engagement

2.1 Draft Community Outreach and Engagement Plan 1 3 4 $21 $1,061 0 $0 $0 $1,061

2.2 Stakeholder Focus Groups 4 20 8 8 40 $184 $9,384 5,190 $519 $5,709 $15,093

2.3 City Council Subcommittee Meetings 3 8 6 2 19 $91 $4,631 0 $0 $0 $4,631

2.4 Study Sessions 6 2 8 16 $62 $3,172 0 $0 $0 $3,172
Task 2. Subtotal 14 31 16 0 18 0 0 0 0 0 0 0 0 0 0 79 $358 $18,248 $5,190 $519 $5,709 $23,957 TASK 3. Existing Conditions Evaluation

3.1 Existing Conditions Technical Memoranda 4 6 6 16 1 4 4 2 43 $140 $7,150 0 $0 $0 $7,150

3.2 Identify Potential Growth Sub Areas 2 6 12 20 $72 $3,682 0 $0 $0 $3,682

3.3 Existing Infrastructure and Mobility Analysis 1 8 12 12 8 41 $146 $7,426 0 $0 $0 $7,426

3.4 Existing Traffic/Trans. Conditions 1 2 3 $15 $745 28,815 $2,882 $31,697 $32,442 Task 3. Subtotal 8 0 22 30 28 0 0 0 0 0 9 0 4 4 2 107 $373 $19,003 $28,815 $2,882 $31,697 $50,700 TASK 4. Land Use Scenario and Buildout Analysis

4.1 Land Use Scenario Development 2 8 8 6 1 25 $94 $4,814 0 $0 $0 $4,814

4.2 Land Use Scenario and Buildout Analysis 3 4 8 12 1 1 29 $117 $5,942 29,440 $2,944 $32,384 $38,326 Task 4. Subtotal 5 0 12 0 16 0 0 0 0 0 12 6 2 0 1 54 $211 $10,756 $29,440 $2,944 $32,384 $43,140 TASK 5. Citywide General Plan EIR Amendment

5.1 EIR Initiation 6 12 16 16 50 $176 $8,956 0 $0 $0 $8,956

5.2 Technical Analysis 2 8 8 36 15 140 10 45 8 2 274 $973 $49,638 49,750 $4,975 $54,725 $104,363

5.3 Admin. Draft EIR 12 40 60 60 4 6 4 186 $618 $31,508 0 $0 $0 $31,508

5.4 Screencheck and Public Review Draft EIRs 8 16 24 6 4 58 $209 $10,639 0 $0 $0 $10,639

5.5 Final EIR and RTC 16 24 40 4 4 6 94 $341 $17,411 0 $0 $0 $17,411

5.6 Findings and Overrides 1 4 8 13 $46 $2,326 0 $0 $0 $2,326 Task 5. Subtotal 45 0 104 76 156 36 15 140 10 45 8 2 8 16 14 675 $2,363 $120,478 $49,750 $4,975 $54,725 $175,203 TASK 6. Draft and Final General Plan Amendments

6.1 Admin & Screen. Draft General Plan Amendments 8 24 32 64 $241 $12,281 4,050 $405 $4,455 $16,736

6.2 Revised Public Draft General Plan Amendment 1 8 12 21 $75 $3,835 0 $0 $0 $3,835

6.3 Final General Plan Amendment 1 4 8 13 $46 $2,326 0 $0 $0 $2,326 Task 6. Subtotal 10 0 36 0 52 0 0 0 0 0 0 0 0 0 0 98 $362 $18,442 $4,050 $405 $4,455 $22,897 Labor Hours Total 101 31 226 114 276 36 15 140 10 45 29 8 14 20 17 1082 Labor Dollars Total $26,260 $8,060 $53,110 $15,960 $37,260 $9,000 $3,450 $21,700 $2,300 $6,525 $6,670 $1,480 $1,820 $2,700 $2,295 $3,973 $202,563 $122,775 $135,053 $337,616 PlaceWorks Percent of Total Labor 9% 3% 21% 11% 26% 3% 1% 13% 1% 4% 3% 1% 1% 2% 2%

EXPENSES
PlaceWorks Reimbursable Expenses $568
EXPENSES TOTAL $568
GRAND TOTAL $338,184

PLACEWORKS
Subconsultant
Total
Total Task
Budget
PlaceWorks
Hours
PlaceWorks
Total

SUBCONSULTANTS
Transportation
PlaceWorks 2%
Office Expenses
10%
Subconsultant
Markup

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Adopt a Resolution Authorizing Application by the City to the Local Agency Formation Commission Requesting Approval for Extension of Sewer Service Outside Jurisdictional Boundaries Pursuant to Government Code Section 56133 and Authorizing the City Manager to Execute the Outside Sewer Services Agreement with Kyle C. Cady and Christen G. DiPetrillo for 83 El Vanada Road and all Associated Agreements.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution authorizing application by the City to the Local Agency Formation Commission (“LAFCo”) requesting approval for extension of sewer service outside jurisdictional boundaries pursuant to government code section 56133 and authorizing the City Manager to execute the Outside Sewer Services Agreement with Kyle C.

Cady and Christen G. DiPetrillo for 83 El Vanada Road and all associated agreements.

FISCAL IMPLICATIONS:

There are no fiscal implications associated with this recommendation.

All costs associated with the extension of sewer service to 83 El Vanada Road and application to LAFCo is the responsibility of the property owner.

BACKGROUND:

LAFCo is an independent commission with jurisdiction over the boundaries of cities and special districts by the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Section 56000 Et Seq. of the Government Code. Sewer service extensions outside the jurisdictional boundary and annexations are subject to review and approval by LAFCo. City Council approval is required to apply to LAFCo for extension of sewer service outside jurisdictional boundaries.

Kyle C. Cady and Christen G. DiPetrillo, the owners of 83 El Vanada Road, located in an unincorporated area in the County of San Mateo, APN 051-440-080, in the sphere of influence of the City of San Carlos, requested connection to the City’s sewer system, as authorized by California Government Code Section 56133. The San Mateo County Health Services Agency declared that the septic system has failed and is a threat to public health. No other on-site disposal system is feasible, and the only reasonable remedy is connection to the existing City public sewer system.

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ANALYSIS:

Pursuant to the requirements of Municipal Code Section 13.10.030, sewer service may be extended to the property after application to LAFCo and execution of the Outside Sewer Services Agreement.

The property is not eligible for annexation at this time because it is not contiguous to City boundaries. However, annexation to the City in the future is contemplated under an Irrevocable Agreement to Annex, which is a condition of extending sewer service to the property.

To comply with Government Code Section 56133, staff is recommending City Council authorization to apply to LAFCo for a sewer service extension and approval of the Outside Sewer Services Agreement.

The City Council also retains the right to terminate the Outside Sewer Services Agreement should LAFCo and San Mateo County not agree to extend sewer service to this property.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing application by the City to the Local Agency Formation Commission requesting approval for extension of sewer service outside jurisdictional boundaries pursuant to government code section 56133 and authorizing the City Manager to execute the Outside Sewer Services Agreement with Kyle C. Cady and Christen G.

DiPetrillo for 83 El Vanada Road and all associated agreements; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Proposed Outside Sewer Services Agreement

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING APPLICATION BY THE CITY TO THE LOCAL AGENCY FORMATION

COMMISSION REQUESTING APPROVAL FOR EXTENSION OF SEWER SERVICE

OUTSIDE JURISDICTIONAL BOUNDARIES PURSUANT TO GOVERNMENT CODE SECTION 56133 AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE OUTSIDE SEWER SERVICES AGREEMENT WITH KYLE C. CADY AND CHRISTEN G. DIPETRILLO FOR 83 EL VANADA ROAD AND ALL ASSOCIATED AGREEMENTS.

WHEREAS, Kyle C. Cady and Christen G. DiPetrillo (“Owners”), the owners of 83 El Vanada Road, located in an unincorporated area in the County of San Mateo, APN 051-440-080, in the sphere of influence of the City of San Carlos, have requested connection to the City’s sewer system, as authorized by California Government Code Section 56133; and WHEREAS, the San Mateo County Health Services Agency declared that the septic system has failed and is a threat to public health, no other on-site disposal system is feasible, and the only reasonable remedy is connection to the existing City public sewer system; and WHEREAS, pursuant to the requirements of Municipal Code Section 13.10.030, sewer service may be extended to the property after application to Local Agency Formation Commission (“LAFCo”) and execution of the Outside Sewer Services Agreement; and WHEREAS, the property is not eligible for annexation because it is not contiguous to City boundaries; and
WHEREAS, the City has the ability to facilitate sewer service to the proposed area of 83 El Vanada Road from Edgewood Road ("Sewer Lateral") to serve the property; and WHEREAS, the Sewer Lateral shall be subject to the terms and conditions per the Outside Sewer Services Agreement between the Owners and the City; and WHEREAS, annexation of the property to the City is contemplated in the future under an lrrevocable Agreement to Annex; and
WHEREAS, the City Council also retains the right to terminate the Outside Sewer Services Agreement should LAFCo and San Mateo County not agree to extend sewer service to this property; and
WHEREAS, this project is exempt from California Environmental Quality Act guidelines (section 15303(d)).

NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of San Carlos, as follows:

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1. The City Manager is authorized to submit an application to the Local Agency Formation Commission requesting approval of an extension of sewer service outside the City’s jurisdictional boundaries and within the City’s sphere of influence to the property located at 83 El Vanada Road, unincorporated San Mateo County, California (APN 051-440-080) pursuant to California Government Code Section 56133 of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000.

2. The Local Agency Formation Commission of San Mateo County is hereby requested to take proceedings in the manner provided by California Government Code Section 56133.

3. The City Manager is authorized to execute the Outside Sewer Services Agreement with Kyle C. Cady and Christen G. DiPetrillo for 83 El Vanada Road and all associated agreements.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June, 2023 by the following vote:

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This Document is Recorded
For the Benefit of the
City of San Carlos
And is Exempt from Fee
Per Government Code
Sections 6103 and 27383

When Recorded Mail To:

City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: Public Works
Engineering Department

OUTSIDE SEWER SERVICES AGREEMENT

This Agreement is entered into this day of , 2023 by and between Kyle C. Cady and Christen G. DiPetrillo (collectively "Owners") and the City of San Carlos, a California municipal corporation ("City") in connection with obtaining sewer services pursuant to City Resolution 1991-102.

RECITALS

A. Kyle C. Cady and Christen G. DiPetr illo are the owner of certain real property commonly known as 83 El Vanada Road, loca ted in the unincorporated area of Palomar Park, within the Sphere of Influence of the City and more particularly described in Exhibit A hereto.

B. 83 El Vanada Road shall be collective ly referred to herein as the "Property."

C. As a result of failing septic systems and associated health and safety concerns, Owners require the use of and the right to connect to the appropriate sewer system within the City by constructing the sewer lateral from the Property to the Hassler Sewer Line on Edgewood Road owned by Scenic Heights County Sanitation District to transport sewage to the City for further transport and treatment, as more particularly described in Paragraph

3. The City has consented to provide sewer treatm ent services for th e Property, but is unwilling to maintain sewer collection facilities that are outside of City’s corporate limits.

D. Pursuant to City Resolution 1991 - 102, property located in the unincorporated area of Palomar Park, within the City Sphere of Influence, may connect to the appropriate sewer system upon various conditions.

NOW, THEREFORE, the parties hereby agree as follows:

1. Purpose. The purpose of this Agreement is to set forth the procedure and protocol necessary for the City to provide public sewer services to the Owners, as if the Owners were situated within the City limits.

2. Procedure for Sewer Connection Authorization. The City shall authorize the Owners of the Property to construct the Sewer Lateral pursuant to this Agreement and the Plans described in Paragraph 3 (Sewer Lateral), such that the Owners may legally connect to the Scenic Heights County Sanitation District ("Scenic Heights District") after the following conditions have been met:

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2.1 Documents. The Parties have executed the following documents in connection with this Agreement

2.1.1 Irrevocable Agreement to Annex, attached as Exhibit B; and

2.1.2 Covenant Regarding No Further Subdivision, attached as Exhibit C.

2.2 Fees. Owners have paid all associated fees necessary for the Sewer Lateral, which shall include:

2.2.1 "Application deposit fee" in the amount of Five Thousand Dollars ($5000.00) ("Deposit") to be used to cover the time involved in processing the documents listed in Paragraph 2.1 (Documents). The City shall keep an accounting of the time spent on such processing and any unused portion of the Deposit shall promptly be refunded to the Owners.

2.2.2 "Sewer Connection Fee" in the amount of Thirteen Thousand Two Hundred and Forty-Two Dollars ($13,242.00) to be paid to the City as a one-time sewer connection fee.

2.2.3 "County of San Mateo ("County”) Plan Check Fee" in the amount required to process the construction and design plans for the sewer lateral, as more particularly set forth in Paragraph 3 (Sewer Lateral).

2.2.4 The Owners shall pay the sewer service charge levied by the City, for similar type service levied on parcels within the city and for similar uses, for the Property. Subsequent payments shall be collected together with the Owners property taxes in the same manner as the charges for properties within the City’s boundaries are collected.

2.3 LAFCO Approval. Concurrent with the approval of the Application and this Agreement, the City shall submit a Resoluti on of Application in the form attached as Exhibit D, to LAFCO for its approval.

3. Sewer Lateral. The Owners are responsible for the installation of the sewer lateral from the Property to the Hassler Sewer Line including design, bidding, and construction in accordance with current County sewer standards. The sewer lateral connection at the Hassler Sewer Line shall be built according to those certain engineer plans dated ______, 2023, consisting of ______ sheets on file with the County ("Plans") which shall be approved by the County.

3.1 Funding, Ownership and Maintenance for Sewer Lateral. Owners shall own, maintain and fund the Sewer Lateral.

3.2 Sewer Lateral Upgrade or Abandonment and Sewer Main construction and connection to the Hassler Sewer Line.

3.2.1 If at the time the Property is eligible to annex into the City, the Property is the only property being annexed, then the Owners are responsible to abandon the Sewer Lateral, construct and connect to a new sewer main on El Vanada Road, or upgrade the Sewer Lateral to serve as the new sewer main per City standards to the satisfaction of the City Engineer.

3.2.2 If at the time the Property is eligible to annex into the City there are neighboring properties or additional properties on El Vanada Road (collectively “Other Property(ies)”) also being annexed into the City, then the Owners and the Other Property owners are responsible to abandon the Sewer Lateral, construct and connect to a new sewer main on El Vanada Road, or upgrade the Sewer Lateral to serve as the

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new sewer main per City standards to the satisfaction of the City Engineer.

4. Miscellaneous.

4.1 Cooperation. Each Party agrees to cooperate with the other Parties, to respond timely to all requests for action or approval, to do all things, to execute all documents, and to take all actions which may be requested and/or required of a Party to carry out the terms and provisions of this Agreement.

4.2 Indemnification. The Owners agree to indemnify, defend and hold harmless City officers, employees and/or agents against any claims, liabilities and/or lawsuits which may arise from the performance of any and all terms and conditions of this Agreement.

4.3 Amendments. This Agreement may only be amended by a written agreement executed by all Parties.

4.4 Assignment. This Agreement shall be binding upon the successors, heirs and assigns of the Parties, hereto.

4.5 California Law. This Agreement shall be governed by the laws of the State of California.

4.6 Attorneys Fees . If any legal action, mediation and/or arbitration is instituted to enforce or interpret this Agreement, the prevailing party(ies) shall be entitled to recover the costs incurred therein, including reasonable attorneys' fees.

4.7 Entire Agreement . This instrument contains the sole and entire agreement among the Parties hereto relating to the Property and subject matter of this Agreement and correctly sets forth the rights, duties, and obligations of each Party. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are hereby superseded and of
no force or effect.

4.8 Severability. If any portion of this Agreement is declared by a court of and the balance of this Agreement shall remain in effect.

4.9 Notice. Notice under this Agreemen t shall be deemed effective upon the deposit int first cl ass mail, postage prepaid and address to the parties as follows:

CITY:

City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: City Manager

OWNERS:

Kyle C. Cady and Christen G. DiPetrillo
83 El Vanada Rd
Redwood City, CA 94062

4.10 Exhibits. All exhibits to which reference is made in this Agreement, are incorporated in this Agreement by the resp ective reference to them, whether or not they are actually attached.

4.11 Termination. In the event the Owners are unwilling or unable to proceed with the Sewer Lateral, the Owners may terminate this Agreement by giving notice to the City pursuant to 4.9 (Notice) above, and said notice shall be recorded. Such termination shall not be allo wed subsequent to commencement of c onstruction of the Sewer Lateral.

4.12 Recordation. This Agreement shall be recorded.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OWNERS: CITY OF SAN CARLOS:

By: By:

Name: Kyle C. Cady Name:

Title:

By: Attest:

Name: Christen G. DiPetrillo

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Exhibit B

This Document is Recorded
For the Benefit of the
City of San Carlos
And is Exempt from Fee
Per Government Code
Sections 6103 and 27383

When Recorded Mail To:

City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: Planning Department

IRREVOCABLE AGREEMENT TO ANNEX

TO THE CITY OF SAN CARLOS

This Agreement is entered into this th day of , 2023 by and between Kyle C. Cady and Christen G. DiPetrillo ("Owners"), and the City of San Carlos, a California municipal corporation ("City") in connection with obtaining sewer services pursuant to City Resolution 1991-102.

RECITALS

A. Kyle C. Cady and Christen G. DiPetrillo ar e the owner of cert ain real property commonly known as 83 El Vanada Road, located in the uni ncorporated area of Palomar Park, within the Sphere of Influence of the City and more particularly described in Exhibit A, hereto (the “Property”).

B. As a result of failing septic systems, Owners require the use of the City sewer system and the right to connect to the appropriate sewer system within the City.

C. Pursuant to City Resolution 1991 -102, property located in the unincorporated area of Palomar Park, within the City Sphere of Influence, may connect to the appropriate sewer system upon various conditions, including certification by the Owners that when annexation is possible and physically accessible, the Property will be annexed.

D. Due to failing septic systems and associat ed health and safety concerns, the Owners seek to comply with the conditions of Resolution 1991-121 in order to connect to the Scenic Heights County Sanitation District ("Scenic Heights District").

NOW, THEREFORE, the parties hereby agree as follows:

1. Irrevocable Consent to Annex. Owner s hereby give their irrevocable consent to annex the Property to the City at such time as the annexation may be properly approved through appropriate legal proceedings and Owners do further agree to provide all reasonable cooperation and assistance to the City in the annexation proceedings. Said cooperation shall include signing any applications or c onsent prepared by the City and submitting any evidence reasonably within the control of Owners to the various hearings required for the annexation. Sa id cooperation does not inclu de, however, any obligation

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on behalf of Owners to institute any litigation or judicial proceedings whatsoever to compel the annexation to the City.

2. Sewer Connection Authorization. The City hereby agrees to authorize the connection of the Property to the Scenic Heights District, as more particularly set forth in that certain Outside Sewer Services Agreement dated , 2023.

3. Annexation Fees. Upon annexation, Owners agree to pay such annexation fees and costs as would ordinarily be charged to annex property to the City.

4. Sewer Connection Fees. Owners s hall pay all fees and charges and make all deposits required by City to connect to and use t he Scenic Heights District, as more particularly set forth in that certain Outside Sewer Services Agreement dated , 2023.

4.1 Said fees shall be valid for a period of one (1) year from the date of execution of this Agreement and shall be paid prior to the issuance of an encroachment permit to connect to sewer. Fees paid after one (1) year of the date of execution of this Agreement shall be subject to the fee amount in effect at that time. Owners also agree to pay any additional fees that may be charged by the Local Agency Formation Commission (LAFCO).

Owner agrees to be bound by all City ordinances, rules and regulations respecting the sewer system.

4.2 For clarity, if Owners have already paid the one-time sewer connection fee per section 2.2.2 of the Agreement, then no additional sewer connection fee shall be due upon annexation.

5. Miscellaneous.

5.1 Cooperation. Each Party agrees to cooperate with the other parties, to respond timely to all requests for action or approval, to do all things, to execute a documents, and to take all actions which may be requested and/or required of a party to carry out the terms and provisions of this Agreement.

5.2 Indemnification. The Owners agree to indemnify, defend and hold harmless City officers, employees and/or agents against any claims, liabilities and/or lawsuits which may arise from the performance of any and all terms and conditions of this Agreement.

5.3 Amendments. This Agreement may only be amended by a written agreement executed by all Parties.

5.4 Assignment. This Agreement shall be binding upon the successors, heirs and assigns of the Parties, hereto.

5.5 California Law. This Agreement shall be governed by the laws of the State of California.

5.6 Attorneys Fees . If any legal action is instituted to enforce or interpret this Agreement, the prevailing party(ies) shall be entitled to recover the costs incurred therein, including reasonable attorneys' fees.

5.7 Entire Agreement. This instrument contai ns the sole and entire agreement among the Parties hereto relating to the Property and subject matter of this Agreement and correctly sets forth the rights, duties, and obligations of each Party. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are hereby superseded and of no force or effect.

5.8 Severability. If any portion of this Agreement is declared by a court of competent jurisdiction to be void, said portion sha ll be deemed severed from this Agreement, and the balance of this Agreement shall remain in effect.

5.9 Notice. Notice under this Agreement shall be deemed effective upon the deposit int first class mail, postage prepaid and address to the parties as follows:

CITY:

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City of San Carlos
600 Elm Street
San Carlos, CA 94070
Attention: City Manager

OWNERS:

Kyle C. Cady and Christen G. DiPetrillo
83 El Vanada Road
Redwood City, CA 94062

5.10 Exhibits. All exhibits to which reference is made in this Agreement, are incorporated in this Agreem ent by the respective refer ence to them, whether or not they are actually attached.

5.11 Recordation. This Agreement shall be recorded.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OWNERS: CITY OF SAN CARLOS:

By: By:

Name: Kyle C. Cady Name:

Title:

By: Attest:

Name: Christen G. DiPetrillo

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Exhibit C

RESTRICTIVE COVENANT

REGARDING NO FURTHER SUBDIVISION

This Agreement Regarding No Further Subdivision ("Agreement") is entered into this _ day of ,2023 by and between Kyle C. Cady and Christen G.

DiPetrillo ("Owners") and the City of San Carlos, a California municipal corporation ("City") in connection with obtaining sewer services pursuant to City Resolution 1991-102.

RECITALS

A. Kyle C. Cady and Christen G. DiPetrillo are the owners of certain real property commonly known as 83 El Vanada Road, loca ted in the unincorporated area of Palomar Park, within the Sphere of Influence of the City and more particularly described in Exhibit A; hereto.

B. 83 El Vanada Road shall be referred to herein as the "Property.”

C. Pursuant to City Resolution 1991 - 102, property located in the unincorporated area of Palomar Park, within the City Sphere of Influence, may connect to the appropriate sewer system upon various conditions, in cluding the recordation of a deed restriction specifying that the subject property may not be further subdivided.

D. Due to failing septic systems, the Owners seek to comply with the conditions of Resolution 1991-102 in order to connect the P roperty to the Sceni c Heights County Sanitation District ("Scenic Heights District").

NOW, THEREFORE, the parties hereby agree as follows:

1. No Further Subdivision. The Property shall not be further subdivided.

2. Successors In Interest. This Covenant shall run with the Property and shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties hereto.

3. Restrictive Covenant. For itself, its heirs, assigns and successors in interest, in and to the Property, the Owners covenant and agree to abide by the terms herein. This covenant runs in favor of the City. In the event it is necessary for the City to enforce this covenant, it shall be entitled to all attorney's fees and costs.

4. Miscellaneous. This Covenant is irrevocable and may only be modified with written consent of both parties. Furt her, this Covenant shall be governed by and interpreted in accordance with the laws of the State of California.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

OWNERS: CITY OF SAN CARLOS:

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By: By:

Name: Kyle C. Cady Name:

Title:

By: Attest:

Name: Christen G. DiPetrillo

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HOUSING AUTHORITY

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Consider Acquisition of Properties Located at 1800 El Camino Real and 1131-1133 Eaton Ave, San Carlos (APNs: 051-379-010, 051-379- 020, 051-379-030, 051-379-040, 051-379-050, 051-379-060) for Potential Future Affordable Housing Development Including Authorization for the City Manager to Execute a Purchase and Sale Agreement and Approval of a $7,000,000 Loan from the Strategic Property Acquisition Reserve (SPAR) Fund to Fund 29, the Affordable Housing In-Lieu Fund and Authorization of an Amendment to the Fiscal Year (FY) 2023-24 Project Budget for C2332 – Affordable Housing Site Acquisition/Construction to Transfer $3,100,000 in Appropriation from FY 2024-25 to FY 2023-24 to Facilitate the Purchase.

RECOMMENDATION:

Staff recommends the City Council adopt the following Resolutions pertaining to the Housing Authority’s acquisition of the property located at 1800 El Camino Real and 1131-1133 Eaton Avenue (collectively, the “Site”) for affordable housing redevelopment purposes:

i.City Council Resolution accepting and approving a financing agreement (“Financing Agreement”) with the Housing Authority for the purchase of 1800 El Camino Real and 1131-1133 Eaton Avenue, including the approval of a $7 million loan from the SPAR Fund to Fund 29 and authorization of an amendment to the FY 2023-24 Project Budget for C2332 – Affordable Housing Site Acquisition/Construction to transfer $3.1 million in appropriation from FY 2024-25 to FY 2023-24;
ii.Housing Authority Resolution accepting and approving the financing agreement with the City for the purchase of 1800 El Camino Real and 1131-1133 Eaton Avenue; iii.Housing Authority Resolution approving the separate purchase and sale agreement for 1800 El Camino Real; and
iv.Housing Authority Resolution approving the separate purchase and sale agreement for 1131-1133 Eaton Avenue.

FISCAL IMPLICATIONS:

The total acquisition price for the Site would be $12,510,000 (approximately $350 per land square foot), comprised of the following amounts:
1800 El Camino Real: $9,550,000 (~$367/sf)
1131-133 Eaton Avenue: $2,960,000 (~$304/sf)

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In addition to the acquisition price, the Housing Authority will also incur due diligence and closing costs associated with the acquisition in an amount that is expected to be approximately $571,888, bringing the total acquisition budget to an estimated $13,081,888.

The Fiscal Year Adopted Biennial Budget includes project funding in the amount of $10 million in FY 2023-24 and $10 million in FY 2024-25. This request would require an amendment to the adopted budget to transfer $3.1 million in appropriations from the FY 2024-25 budget to FY 2023-

24. This would change the two-year budget for Project C2332 - Affordable Housing Site Acquisition/Construction to $13.1 million in FY 2023-24 and $6.9 million in FY 2024-25.

Under the purchase and sale agreements with the two sellers, the Housing Authority would be required to deposit a total of 3% of the acquisition price ($375,300) upon opening escrow. The remainder of the site acquisition costs would be due at closing, which would occur 60 days from the opening of escrow, anticipated to be on August 28, 2023 at which time the remainder of the purchase price ($12,510,000 less the $375,300 deposit, or $12,134,700) would be due. The remaining $571,888 of incidental costs would be paid over time, particularly the relocation costs which may be incurred once relocation activities commence, which may be quite some time into the future.

Based on existing fund balances and anticipated commercial linkage fee deposits, the Housing Authority should have sufficient funds in the Affordable Housing In Lieu Fund (Fund 29) to eventually pay for these acquisition and incidental costs. However, currently there is not sufficient unencumbered cash in Fund 29 to fund all $13.1 million in acquisition and incidental costs in their entirety; therefore, the Housing Authority and City are entering into a Financing Agreement to loan Fund 29 a total of $7 million from the City’s Strategic Property Acquisition Reserve (SPAR). As additional commercial linkage fees are deposited into Fund 29, the Housing Authority would repay the City’s SPAR fund any principal and interest due until the SPAR financing agreement is paid in full.

Finally, the Housing Authority will have costs associated with the operation and maintenance of the existing structures on the property, which should be adequately funded from tenant lease income until such time as redevelopment activities begin. As part of its due diligence during the escrow period, the Housing Authority will receive and review leases, rent roll information, and the building condition to ensure that these lease income revenues are adequate.

BACKGROUND:

City staff were contacted several months ago by a local broker about an opportunity to purchase the Site, along with several other parcels on Laurel Street near Eaton Avenue. After conducting a preliminary evaluation of the Site, it was determined that the two adjacent Site properties at 1800 El Camino (currently an operating Carl’s Jr. fast-food restaurant location) and 1131-1133 Eaton Avenue (currently a commercial office building) were viable opportunities for affordable housing development.

Residential development on this 0.82-acre Site would help further the goals, policies, and actions in the City’s General Plan Housing Element, adopted in January of 2023, and further the City’s progress in meeting its Regional Housing Needs Allocation (“RHNA”) to provide for the development of housing affordable to lower-income households. Indeed, the Site had been

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included in the Housing Element’s inventory of potential residential development opportunities and was recently rezoned to allow for a greater density of dwelling units per acre than was previously allowed. The Housing Element sites inventory estimated that the Site had a realistic capacity to produce 77 units of housing, of which 65 could be affordable to Very Low-, Low-, and Moderate-Income households. It is possible that the Site could provide for 99 units or more of housing, depending on the impact of site constraints such as creek setbacks, building design options, and density bonuses that may be granted for achieving certain affordable housing goals.

After determining a preliminary estimate of value that was subsequently supported by an independent appraisal, staff presented a recommendation to the Board of the Housing Authority to consider negotiating to purchase the Site for potential redevelopment as affordable housing.

The Housing Authority Board gave direction to staff to make an offer for the Site at the fair market value as determined by an appraiser. On June 2, 2023, offers were made to the owners of the parcels. The offers were accepted by the sellers on June 5, 2023.

Attachment 1 is a recent aerial photograph of the Site, which is at the southern boundary of the City. As noted in Attachment 1 along with other key acquisition details, the property at 1800 El Camino allows up to 120 dwelling units per acre and the adjacent 1131-33 Eaton Avenue property allows up to 100 units per acre.

ANALYSIS:

Details of the proposed financing agreement and the two Purchase and Sale Agreements (PSAs) are provided below, along with the plan for soliciting development proposals from qualified affordable housing developers. The City and Housing Authority will act separately on the financing agreement as a precedent to the Housing Authority’s approval of these purchase and sale agreements.

Financing Agreement
The Housing Authority intends to purchase the Site using funds from commercial linkage fees from the Affordable Housing In Lieu Fund (Fund 29). At present, Fund 29 has a total of $13,376,165.79 on deposit, but approximately $3,000,000 of this amount is tentatively reserved for near-term costs related to the affordable housing development at 1232 Cherry Street, leaving only $10,376,165.79 available in Fund 29. However, additional commercial linkage fees are anticipated to be received in the near future, specifically from the developer of 405 Industrial Road, who will be remitting $4,134,160 at the issuance of their building permit which is expected to occur within the next 90 days. The Planning Commission and City Council are expected to consider entitlement approvals for other commercial projects in the coming months, which may generate an additional $4,700,000 of commercial linkage fees once those projects, if approved, receive building permits. Staff is recommending $7,000,000 be loaned to Fund 29 at this time to protect against any of these projects unexpectedly not moving forward.

The City has approximately $7 million in the Strategic Property Acquisition Reserve (SPAR) (General Fund 0001) which it may use to acquire property for economic development and community development purposes. Pursuant to the Financing Agreement, the terms of the loan are as follows:
Principal Amount: $7,000,000
Date of Distribution of Loan Proceeds: On or before July 31, 2023

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Interest: Interest shall accrue at the California State Treasurer’s Office Pooled Money Investment Account (PMIA) average monthly effective rate as of May 2023 (as earned in the SPAR fund)
Payments: No payments due until the earlier of
1) The Housing Authority receives sufficient commercial linkage fees (Fund 29) to repay the loan, or
2) two years from the effective date of the loan.
No prepayment penalty
Purchase and Sale Agreements
Each of the two properties is improved with older commercial buildings and, given the revised zoning allowing for higher density residential development, are therefore more valuable for the underlying land opportunity value, especially when assembled as one development site. The City’s economic development consultant, RSG, determined comparable land prices for similar properties (which ranged between $221 and $505 per square foot). Staff also obtained an appraisal report dated May 18, 2023, from Valbridge Property Advisors, a Member, Appraisal Institute, or MAI appraiser, who concluded that the aggregate value of the Site is $12,510,000.

This amount was used for the purchase price that was offered and accepted by the sellers.

The Housing Authority is to consider approval of the two PSAs by two separate Resolutions.

The Housing Authority will incur incidental costs totaling an estimated $571,888 as part of the purchase and sale of the two properties. This includes escrow, title, and closing costs, and due diligence costs for a Phase I environmental report, property survey, and legal and consultant costs. Relocation expenses may also be required as described below.

The estimated costs for these activities are itemized in the table below:

Incidental Costs for Purchase and Sale Agreements
Estimates as of June 2023 1800 El
Camino Real
1131-1133
Eaton Ave
Total
Escrow, Title, and Closing $ 29,000 $ 9,230 $ 38,230
Prorated Property Taxes $ 9,007 $ 7,151 $ 16,158
Environmental Study (Phase I Report) $ 2,750 $ 2,750 $ 5,500 Site Survey $ 6,000 $ 6,000 $ 12,000
Legal and Consultant Costs $ 50,000 $ 50,000 $ 100,000
Relocation $ 325,000 $ 75,000 $ 400,000
TOTAL $421,757 $150,131 $ 571,888

Other Considerations
Relocation
According to preliminary indications from the broker, there are three tenants occupying the two properties, including Carl’s Jr., San Carlos Peninsula Fellowship, and Lanna Thai Massage. As

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part of the PSA for each property, each seller will need to acknowledge and agree that the seller and any affiliated tenant entities are not entitled to any such relocation assistance or benefits.

However, as a result of the Housing Authority’s acquisition, the tenants may be eligible for relocation assistance and benefits under applicable state or federal law. The City’s economic development consultant estimates that relocation costs for all other tenants should not exceed $400,000, although a more precise budget will be developed during the escrow period.

Following Housing Authority Board approval of the acquisition of the properties, staff would mail certain required informational statements to the tenants of the properties, but would take no immediate action regarding existing tenants. Pursuant to the Relocation Law, no tenant may be required to move from the properties without ninety (90) days written notice.

General Plan Consistency
Government Code Section 65402 generally requires that prior to the acquisition or disposition of real property for public purposes, the purpose and extent of the acquisition or disposition and its conformity with the General Plan must be submitted to and reported on by the Planning Commission.

The properties are being acquired for assembly, ultimately to be conveyed for affordable housing development. The details of the proposed future development are still to be negotiated but will, in all events, require conformity with the General Plan. The Planning Commission will review the project for conformity with the City’s General Plan on June 26, prior to the Council Meeting.

Environmental Review
As no specific project is being approved at this time, the California Environmental Quality Act (Public Resources Code Section 21000 et seq.; “CEQA”) does not apply to the proposed property acquisitions. Environmental review pursuant to CEQA will be required prior to the approval of any agreement providing for the sale and development of the properties.

Future Request for Affordable Housing Development Proposals The best way for the Housing Authority to produce affordable housing for the site is to solicit proposals from qualified affordable housing developers with experience in the area. Prior to doing so, staff and consultants would prepare a preliminary building massing plan to determine an approximate number of units and assess the feasibility of development. The Housing Authority will also comply with the Surplus Land Act requirements with respect to the solicitation of developer interest on this site once a feasibility study is completed, which may inform whether the property may be eligible for one of several exemptions from the Surplus Land Act, or if the site must be made available by a surplus designation and notice of availability. This would help to inform the request for proposals from developers.

Developers would then be invited to provide their proposal for a development program and prospective building design, as well as a prospective pro forma indicating development costs, gap financing, potential sources of funding, and terms of an offer for disposition and development.

Staff and consultants would review proposals and recommend a development team to the Housing Authority Board to enter into a Memorandum of Understanding or an Exclusive Negotiating Agreement. The MOU or ENA would serve to outline the roles and expectations of the parties during the purchase period, including the developer’s due diligence and entitlement application, outreach with local neighbors, and disclosure of pertinent facts about their project.

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Ultimately, staff anticipates that the transaction with the developer would be consummated in a disposition and development agreement.

Among the important factors to be considered by the Housing Authority in the selection of a developer are:
-How the developer intends to engage neighbors in the conceptual and final design of the project, including residents and businesses in the immediate neighborhood. -The availability of capital to purchase and develop the project in a timely fashion. -The amount of Housing Authority and/or City assistance that may be required. -The community benefits from the project, including construction of the project at prevailing wages.

ALTERNATIVES:

The alternatives available to the City Council and the Housing Authority include:

1. Move forward with acquiring the properties at 1800 El Camino Real and 1131-1133 Eaton Ave. by taking the following actions:
i. Adopt a Resolution of the City Council approving a Financing Agreement with the Housing Authority including the approval of a $7.0 million loan from the SPAR Fund to Fund 29 and authorizing an amendment to the FY 2023-24 Project Budget for C2332 – Affordable Housing Site Acquisition/Construction to transfer $3.1 million in appropriation from FY 2024-25 to FY 2023-24; and
ii. Adopt a Resolution of the Housing Authority approving the Financing Agreement; and
iii. Adopt a Resolution of the Housing Authority approving the Purchase and Sale Agreement for 1800 El Camino Real, San Carlos (APNs 051-379-010, 051-379- 020, and 051-379-030); and
iv. Adopt a Resolution of the Housing Authority approving the Purchase and Sale Agreement for 1131-1133 Eaton Ave, San Carlos (APNs 051-379-040, 051-379- 050, and 051-379-060); or

2. Do not move forward with acquiring the properties at 1800 El Camino Real and 1131- 1133 Eaton Ave.; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Al Savay, Community Development Director

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Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Map of Site

2. Financing Agreement

3. 1131-33 Eaton Purchase and Sale Agreement and Exhibits

4. 1800 El Camino Purchase and Sale Agreement and Exhibits

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ATTACHMENT 1

MAP OF SITE

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4875-3045-2074 v1

FINANCING AGREEMENT

THIS FINANCING AGREEMENT is entered into as of this _ day of, 2023, by and between the SAN CARLOS HOUSING AUTHORITY, a public body, corporate and politic (the "Authority"), and the CITY OF SAN CARLOS, a municipal corporation (the "City").

Recitals

A. The Authority is a local agency formed, organized and existing pursuant to the provisions of the State Housing Authorities Law (Health and Safety Code Section 34200-34380; the "HAL").

Pursuant to the HAL, the Authority is authorized to develop affordable housing projects Pursuant to the HAL the Authority is authorized to Make or undertake commitments to make construction loans and mortgage loans to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing. The Authority is further authorized to purchase or undertake, directly or indirectly through lending institutions, commitments to purchase, construction loans, and mortgage loans originated in accordance with a financing agreement with the authority to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing or make loans to lending institutions under terms and conditions which, in addition to other provisions determined by the authority, shall require the lending institutions to use the net proceeds of the loans for the making, directly or indirectly, of construction loans or mortgage loans to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing

B. City intends to make a short term financing commitment from its Strategic Property Acquisition Funds to enable the Authority to acquire the real property described as follows:

1800 El Camino Real, San Carlos, California (Assessor’s Parcel Nos. 051-379-010, 051-379- 020, and 051-379-030)

1131-1133 Eaton Avenue, San Carlos, California (Assessor’s Parcel Nos. 051-379-040, 051-379- 050, and 051-379-060)

(the “Properties”)

The Properties are suitable for an affordable housing project in the City of San Carlos.

This Financing Agreement is made to assist in the acquisition of the Properties by the Authority

NOW, THEREFORE, THE AUTHORITY AND THE CITY HEREBY AGREE AS FOLLOWS:

1. Loan. The City agrees to loan to the Authority the sum of SEVEN MILLION DOLLARS ($7,000,000) (the "Loan") to be repaid as set forth in this Agreement. The proceeds of the Loan shall be disbursed to the Authority on or before July 31, 2023.

2. Use of Proceeds. The Authority shall expend the funds borrowed from the City pursuant to this Agreement for the acquisition of the Properties including, but not limited to, the

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4875-3045-2074 v1
costs of acquisition of property, demolition and clearance of properties acquired, building and site preparation, public improvements and/or relocation assistance to displaced occupants as required by law.

3. Repayment of Loan. The Authority agrees to repay the Loan to the City as follows:

(a) interest shall accrue at the California State Treasurer’s Office Pooled Money Investment Account (PMIA) average monthly effective rate as of May 2023 (as earned in the SPAR fund)
(b) no payments shall be required during the initial term of the loan. (c) There shall be no prepayment penalty.
(d) principal and interest shall be due and payable two (2) years from the effective date of the loan or when the Housing Authority receives sufficient commercial linkage impact fees to repay the loan, whichever occurs first.

The repayment to the City of the Loan by the Authority shall be secured by "the commercial linkage impact fees paid by development projects in the City. The City shall have a lien against such commercial linkage impact fees.

4. Default. Failure by the Authority to make the above-described payments shall constitute a default under this Agreement, and the City may institute legal action to cure, correct or remedy such default, to recover damages for such default or to obtain any other remedy, including injunctive or declaratory relief, consistent with the purpose of this Agreement.

5. Non-Recourse Obligation. No officer, official, employee, agent, or representative of the Authority shall be liable for any amounts due hereunder, and no judgment or execution thereon entered in any action hereon shall be personally enforced against any such officer, official, employee, agent or representative.

6. Entire Agreement; Amendments. This Agreement shall constitute the entire agreement of the parties with respect to the Loan described herein. This Agreement may be amended or modified only by an agreement in writing signed by the parties.

7. Termination of Agreement. This Agreement and the obligations of the Authority hereunder shall terminate upon full repayment of the Loan by the Authority to the City as provided herein.

IN WITNESS WHEREOF, the Authority and the City have caused this Agreement to be executed by their duly authorized officers all as of the day and year first hereinabove written.

SAN CARLOS HOUSING AUTHORITY, a public body, corporate and politic

By: Executive Director

________________________________

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4875-3045-2074 v1
ATTEST: Secretary

CITY OF SAN CARLOS, a municipal corporation

________________________________
By: City Manager

ATTEST:

_______________________________
City Clerk

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

APPROVING AND AUTHORIZING THE EXECUTION OF A FINANCING AGREEMENT WITH THE SAN CARLOS HOUSING AUTHORITY INCLUDING THE APPROVAL OF A $7 MILLION LOAN FROM THE STRATEGIC PROPERTY ACQUISITION (SPAR) FUND TO FUND 29, THE

AFFORDABLE HOUSING IN-LIEU FUND, AND AUTHORIZING AN AMENDMENT TO THE FISCAL YEAR (FY) 2023-24 PROJECT BUDGET FOR C2332 – AFFORDABLE HOUSING SITE ACQUISITION/CONSTRUCTION, TO TRANSFER $3.1 MILLION IN APPROPRIATION FROM FY 2024-25 TO FY 2023-24.

WHEREAS, the Housing Authority (the “Authority “) was established to acquire and develop housing in the city for the benefit of the community and in accordance with state law; and

WHEREAS, the Housing Authority has entered into an agreement for the acquisition of real property located at 1800 El Camino Real and 1131-1133 Eaton Avenue (the “Properties”) for the purposes of developing an affordable housing project; and

WHEREAS, the Housing Authority expects to receive commercial linkage impact fees from commercial development in the city on applications that have been approved in the near future; and

WHEREAS, the Authority desires to borrow funds from the City SPAR fund in the amount of $7 million in order to complete the acquisition of the Properties; and

WHEREAS, the City desires to loan funds to the Agency in an amount of $7 million with interest at the rate equal to the California State Treasurer’s Office Pooled Money Investment Account (PMIA) average monthly effective rate as of May 2023, which the City currently earns on the SPAR funds; payments would not be required under the loan. The term of the loan is for two years, or until the Authority received sufficient commercial linkage impact fees to pay the principal and interest, whichever occurs first; and
WHEREAS, the Adopted Fiscal Year FY 2023-24 Budget included appropriations for Project C2332 – Affordable Housing Site Acquisition/Construction in the amount of $10 million in FY 2023-24 and $10 million FY 2024-25; and
WHEREAS, it will be necessary to transfer $3.1 million of the Project C2332 appropriation from FY 2024-25 to FY 2023-24 to facilitate the purchase.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Carlos does hereby resolve as follows:

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Section 1. The City Council hereby approves and authorizes the loan of funds to the San Carlos Housing Authority in the amount of $7 million on the following terms:

(a)Interest shall accrue at the California State Treasurer’s Office Pooled Money Investment Account (PMIA) average monthly effective rate as of May 2023 (as earned in the SPAR fund);
(b)No payments shall be required during the initial term of the loan; (c)There shall be no prepayment penalty; and
(d)Principal and interest shall be due and payable two years from the effective date of the loan, or when the Housing Authority receives sufficient commercial linkage impact fees to repay the loan, whichever occurs first.

For that purpose, the City Council hereby approves and authorizes execution of a Loan and Repayment Agreement with the San Carlos Housing Authority in a form approved by the City Manager and City Attorney, consistent with the terms set forth in this Resolution. The City Manager is hereby authorized to execute the Loan and Repayment Agreement on behalf of the City, and to execute such other documents and take such other actions as necessary to carry out and implement the obligations of the City under the Loan and Repayment Agreement.

Section 2. The City Council hereby approves the amendment to the FY 2023-25 Adopted Biennial Budget to transfer appropriations for Project C2332 – Affordable Housing Site Acquisition/Construction in the amount of $3.1 million from FY 2024-25 to FY 2022-23 to facilitate the purchase.
*****
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a regular meeting thereof held on the 26th day of June, 2023, by the following vote:

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RESOLUTION NO. HA – ____

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF SAN CARLOS

APPROVING AND AUTHORIZING THE EXECUTION OF A FINANCING AGREEMENT WITH THE CITY OF SAN CARLOS.

WHEREAS, the City of San Carlos (“City”) has created a Strategic Property Acquisition Fund (“SPAR”) for the purpose of acquiring property for the purpose of economic development and housing property acquisitions; and
WHEREAS, the Housing Authority (the "Authority ") was established to acquire and develop housing in the City for the benefit of the community and in accordance with state law; and
WHEREAS, the Housing Authority has entered into an agreement for the acquisition of real property located at 1800 El Camino Real and 1131-1133 Eaton Avenue (the “Properties”) for the purposes of developing an affordable housing project; and WHEREAS, the Housing Authority expects to receive commercial linkage impact fees from commercial development in the city on applications that have been approved in the near future; and
WHEREAS, the Authority desires to borrow funds from the City’s SPAR fund in the amount of $7.0 million in order to complete the acquisition of the Properties; and WHEREAS, the City desires to loan funds to the Agency in an amount of $7.0 million with interest at the rate equal to the California State Treasurer’s Office Pooled Money Investment Account (PMIA) average monthly effective rate as of May 2023, which the City currently earns on the SPAR funds; payments would not be required under the loan. The term of the loan is for two years or until the Authority received sufficient commercial linkage impact fees to pay the principal and interest, whichever occurs first.

NOW, THEREFORE, BE IT RESOLVED that the Housing Authority of the City of San Carlos does hereby resolve as follows:

Section 1. The Housing Authority hereby approves and authorizes the acceptance of the loan of funds from the San Carlos City Council in the amount of $7.0 million on the following terms:
a. Interest shall accrue at the California State Treasurer’s Office Pooled Money Investment Account (PMIA) average monthly effective rate as of May 2023 (as earned in the SPAR fund);
b. No payments shall be required during the initial term of the loan; c. There shall be no prepayment penalty; and
d. Principal and interest shall be due and payable two years from the effective date of the loan or when the Housing Authority receives sufficient commercial linkage impact fees to repay the loan, whichever occurs first.

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For that purpose, the Housing Authority hereby approves and authorizes execution of a Loan and Repayment Agreement with the City of San Carlos in a form approved by the Executive Director and Housing Authority legal counsel, consistent with the terms set forth in this Resolution. The Executive Director is hereby authorized to execute the Loan and Repayment Agreement on behalf of the Housing Authority, and to execute such other documents and take such other actions as necessary to carry out and implement the obligations of the Housing Authority under the Loan and Repayment Agreement.
*****
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the Housing Authority of the City of San Carlos at a regular meeting thereof held on the 26th day of June, 2023, by the following vote:

AYES, BOARD MEMBERS:__________________________________________________ NOES, BOARD MEMBERS:__________________________________________________ ABSENT, BOARD MEMBERS:________________________________________________ ________________________________
SECRETARY of the San Carlos Housing Authority
APPROVED:
___________________________
CHAIR of the San Carlos Housing Authority

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RESOLUTION NO. HA – ____

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF SAN CARLOS

APPROVING A PURCHASE AND SALE AGREEMENT BETWEEN THE HOUSING AUTHORITY AND ANN C. GASKELL, AS SUCCESSOR SOLE TRUSTEE OF THE PECK REVOCABLE TRUST DATED JUNE 4, 1997, AS TO AN UNDIVIDED EIGHTY-SIX (86%) INTEREST, AND DAVID L. PECK, A MARRIED MAN, AS HIS SOLE AND SEPARATE PROPERTY, AS TO AN UNDIVIDED FOURTEEN PERCENT (14%) INTEREST FOR THE PURCHASE OF 1131-33 EATON AVENUE (APNS 051-379-040, 051-379-050, AND 051-379-060).

WHEREAS, on March 23, 2015, the City Council of the City of San Carlos adopted Resolution No. 2015-026, establishing the San Carlos Housing Authority (“Housing Authority”) in accordance with the California Housing Authorities Law (Health and Safety Code Section 34200, et. seq.); and
WHEREAS, Health and Safety Code Section 34315 permits housing authorities to acquire real or personal property for affordable housing development, including by eminent domain, if necessary; and
WHEREAS, the Housing Authority has determined that assembly of additional property would facilitate feasible and timely development; and
WHEREAS, on June 2, 2023, following direction from the Housing Authority Board in closed session, the Housing Authority transmitted an offer to purchase, under the threat of eminent domain if necessary, 1131-33 Eaton Avenue from the current owners, Ann C. Gaskell, as successor sole Trustee of the Peck Revocable Trust dated June 4, 1997, as to an undivided eighty-six (86%) interest, and David L. Peck, a married man, as his sole and separate property, as to an undivided fourteen percent (14%) interest (“Sellers”); and WHEREAS, staff has negotiated with the Sellers the proposed Purchase and Sale Agreement (“PSA”) setting forth the terms and conditions of the Housing Authority’s purchase of property located at 1131-33 Eaton Avenue that; and
WHERAS, under the PSA, the Housing Authority would acquire 1131-33 Eaton Avenue for $2,960,000, the reasonableness of which is supported by information provided in the agenda bill accompanying this Resolution; and
WHEREAS, the Housing Authority’s obligation to purchase 1131-33 Eaton Avenue is conditioned on its approval of all matters disclosed by the Sellers, the condition of the title to 1131- 33 Eaton Avenue, the physical and environmental condition of the property, and all economic, financial, and accounting matters related to or affecting the property or its value; and WHEREAS, as no specific project for 1131-33 Eaton Avenue is being proposed or approved at this time, the acquisition of the property is not a project pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.; “CEQA”);

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environmental review pursuant to CEQA will be required prior to the approval of any agreement providing for the sale and development of the property.

NOW THEREFORE BE IT RESOLVED that the Housing Authority hereby:

1. Approves the PSA. The Housing Authority’s Executive Director and Secretary are authorized to execute and attest the PSA with such revisions as the Executive Director and Housing Authority legal counsel deem appropriate. The Executive Director and his authorized designees are authorized to take such actions as may be necessary or appropriate to implement the PSA, including executing further instruments and agreements, issuing warrants, and taking other appropriate actions to perform the obligations and exercise the rights of the Housing Authority under the PSA. A copy of the PSA when fully executed shall be placed on file in the office of the Housing Authority Secretary;

2. Appropriates up to $2,960,000 for the acquisition price plus an additional $150,131 for incidental costs related to closing, due diligence, and relocation from Fund 29, as described in the accompanying staff report;

3. Authorizes the Chair of the Housing Authority to sign the passage of this Resolution and thereupon the same shall take effect and be in force; and

4. Directs the Secretary to certify adoption of this Resolution. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

AYES, BOARD MEMBERS:_________________________________________________ NOES, BOARD MEMBERS:_________________________________________________ ABSENT, BOARD MEMBERS:_______________________________________________ _____________________________________
SECRETARY of the San Carlos Housing Authority
APPROVED:
_______________________________
CHAIR of the San Carlos Housing Authority

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RESOLUTION NO. HA – ____

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF SAN CARLOS

APPROVING A PURCHASE AND SALE AGREEMENT BETWEEN THE HOUSING AUTHORITY AND KOFF CONSOLIDATED REALTY INC. FOR THE PURCHASE OF 1800 EL CAMINO REAL (APNS 051-379-010, 051-379-020, AND 051-379-030).

WHEREAS, on March 23, 2015, the City Council of the City of San Carlos adopted Resolution No. 2015-026, establishing the San Carlos Housing Authority (“Housing Authority”) in accordance with the California Housing Authorities Law (Health and Safety Code Section 34200, et. seq.); and
WHEREAS, Health and Safety Code Section 34315 permits housing authorities to acquire real or personal property for affordable housing development, including by eminent domain if necessary; and
WHEREAS, the Housing Authority has determined that assembly of additional property would facilitate feasible and timely development; and
WHEREAS, on June 2, 2023, following direction from the Housing Authority board in closed session, the Housing Authority transmitted an offer to purchase, under the threat of eminent domain if necessary, 1800 El Camino Real from the current owners, Koff Consolidated Realty, Inc. (“Sellers”); and
WHEREAS, staff negotiated with the Sellers the proposed Purchase and Sale Agreement (“PSA”) that sets forth the terms and conditions of the Housing Authority’s purchase of property located at 1800 El Camino Real; and
WHEREAS, under the PSA, the Housing Authority would acquire 1800 El Camino Real for $9,550,000, the reasonableness of which is supported by information provided in the agenda bill accompanying this Resolution; and
WHEREAS, the Housing Authority’s obligation to purchase 1800 El Camino Real is conditioned on its approval of all matters disclosed by the Sellers, the condition of the title to 1800 El Camino Real, the physical and environmental condition of the property, and all economic, financial, and accounting matters related to or affecting the property or its value; and WHEREAS, as no specific project for 1800 El Camino Real is being proposed or approved at this time, the acquisition of the property is not a project pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.; “CEQA”); environmental review pursuant to CEQA will be required prior to the approval of any agreement providing for the sale and development of the property.

NOW THEREFORE BE IT RESOLVED that the Housing Authority of the City of San Carlos hereby:

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2. Appropriates up to $9,550,000 for the acquisition price, plus an additional $421,757 for incidental costs related to closing, due diligence and relocation from Fund 29, as described in the accompanying staff report;

3. Authorizes the Chair of the Housing Authority to sign the passage of this Resolution and thereupon the same shall take effect and be in force; and

4. Directs the Secretary to certify adoption of this Resolution.

*****
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the Housing Authority of the City of San Carlos at a regular meeting thereof held on the 26th day of June, 2023, by the following vote:

AYES, BOARD MEMBERS:___________________________________________ NOES, BOARD MEMBERS:___________________________________________ ABSENT, BOARD MEMBERS:___________________________________________ ________________________________________
SECRETARY of the San Carlos Housing Authority
APPROVED:
___________________________
CHAIR of the San Carlos Housing Authority

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 26, 2023
ITEM TITLE: Consideration of Adopting a Resolution Authorizing the City Manager to Sign an Amendment to the Disposition, Development, and Loan Agreement with Cherry Street Commons, L.P.; Approving a Total City Loan Amount of $12,860,000, Including an Allocation Under this Amount of $2,000,000 to the Existing Predevelopment Loan; and Appropriating an Additional $1,000,000 from the City’s Affordable Housing In-Lieu Fund (Fund 29) to Capital Project C9754 to Cover these Costs and Support the Construction of an Affordable Housing Project at 1232-1244 Cherry Street (Assessor’s Parcel Numbers (APNs) 050-132-110, 050-132-100, and 050-680-040).

RECOMMENDATION:

Staff recommends that the City Council adopt the attached Resolution authorizing the City Manager to sign an amendment to the Disposition, Development, and Loan Agreement with Cherry Street Commons, L.P.; approving a total City loan amount of $12,860,000, including an allocation under this amount of $2,000,000 to the existing Predevelopment Loan; and appropriating an additional $1,000,000 from the City’s Affordable Housing In-Lieu Fund (Fund 29) to Capital Project C9754 to cover these costs and support the construction of an Affordable Housing Project at 1232-1244 Cherry Street.

FISCAL IMPLICATIONS:

The fiscal implication of this action is the appropriation of $1,000,000 from Fund 29 to Project C9754. A total of $12,125,000 was previously approved to C9754. These funds have gone towards administrative and staff costs necessary to advance the project, the $3,075,000 acquisition of the property at 1232 Cherry Street, and other associated predevelopment costs.

This additional appropriation of $1,000,000 will bring the total approved project amount to $13,125,000. There are sufficient funds available in Fund 29 to cover this request.

ENVRIONMENTAL REVIEW:

On June 7, 2023, the Planning and Transportation Commission approved the 1232-1244 Cherry Street Affordable Housing Project (“Project”). With that approval, the Project was determined to be exempt from the provisions of the California Environmental Quality Act (CEQA) per CEQA Section 15332, which exempts infill development meeting applicable General Plan policies and applicable zoning regulations from further environmental review. The proposed First Amendment to the Disposition, Development, and Loan Agreement would facilitate implementation of the CEQA-exempt 1232-1244 Cherry Street Affordable Housing Project and it would not result in any other direct or indirect physical changes to the environment. Therefore, approval of the First Amendment is exempt from CEQA.

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BACKGROUND:

The Project is composed of 1232 and 1244 Cherry Street, as well as a portion of the City-owned property identified in Attachment 1 of the Disposition, Development, and Loan Agreement (DDLA). 1244 Cherry Street is a 100% affordable housing project owned and operated by the non-profit affordable housing developer Human Investment Project (“HIP Housing”). The existing affordable housing restrictive covenant on the HIP Housing property expired in 2020, however HIP Housing is committed to maintaining the facility as an affordable housing site and is interested in redeveloping this aging, six-unit structure through a joint venture with the City of San Carlos. HIP Housing has since entered into a partnership with Eden Housing Inc., a fellow affordable housing developer, to form the Cherry Street Commons limited partnership (“Developer”) responsible for development and management of the Project.

On June 24, 2019, the City of San Carlos Housing Authority adopted Resolution HA-010 which determined the necessity of acquiring the property located at 1232 Cherry Street by eminent domain for affordable housing serving the City of San Carlos. The City has since completed condemnation proceedings for, and is now the owner of, the property located at 1232 Cherry Street. The final purchase price as determined by the Superior Court of California was $3,075,000.

On January 26, 2021, Cherry Street Commons and the City negotiated and executed a Letter of Intent (LOI) which defined the framework under which the parties have since negotiated the terms for the potential transfer of the City Property to Cherry Street Commons and enable the development of the Project, subject to the terms and conditions of a DDLA.

On June 28, 2021, the City Council adopted Resolution No. 2021-060 approving a Predevelopment Loan Agreement with Cherry Street Commons. This Predevelopment Loan Agreement was made available in the form of a loan and counts towards the first $1,000,000 of the City’s financial contribution to the Project. These funds have been used by Cherry Street Commons to cover a portion of the costs associated with further assessment of the Project’s feasibility, advancement of the Project’s design, and applications towards the governmental approvals necessary to construct the Project. The Predevelopment Loan will be converted to long term permanent financing prior to transfer of the City property to Cherry Street Commons, with an interest rate of 3% per year.

On February 27, 2023, the City Council adopted Resolution No. 2023-025 which authorized the City Manager to execute the DDLA with Cherry Street Commons L.P. Broadly, the DDLA outlines the loan terms with regards to the Project’s permanent financing, conditions for disbursement of further loan funds, a Deed of Trust, and a Regulatory Agreement outlining affordability and other requirements for the Project. The DDLA defines conditions that must be satisfied prior to the City’s transfer of the property, and it defines the Developer’s obligations to obtain Project financing, secure Project approvals, construct the Project, and operate the Project as affordable housing.

The loan amount from the City to the Project was not specified in the DDLA and intended to come before the Council after the Project received its entitlements.

On June 7, 2023, the Project went before the Planning and Transportation Commission and was approved unanimously, receiving its entitlements. One significant change made since approval of the DDLA was removal of the parking stackers originally included in the Project. This action reduced the number of parking spaces in the project from 32 to 21. It was discovered that removing the parking stackers allowed for a height reduction for the project of four feet. This

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brough the project beneath 60 feet in height, removing certain construction requirements associated with buildings over 60 feet that would otherwise add $1.5 to $2 million to the project budget.

ANALYSIS:

Now that the Project has received its entitlements, it is ready to formally request a loan amount from the City. Attached is a request from Cherry Street Commons for gap financing in the amount of $9,600,000, which is inclusive of the Predevelopment Loan and in addition to the acquisition loan equal to the appraised value of the City’s property contribution of $3,260,000. Together, this would mean the City’s total contribution to the Project is $12,860,000 for acquisition, predevelopment, and construction activities. Cherry Street Commons is also requesting that the City allocate $2,000,000 of the total City Loan to the existing Predevelopment Loan between the City and Cherry Street Commons. While approval of the $12,860,000 is being requested now, the loan funds (other than the Predevelopment Loan) will not be immediately available and are tied to the conveyance of the City property, likely to occur in 2024. For this reason, Cherry Street Commons is requesting $2,000,000 be added to the Predevelopment Loan to enable them to begin work on undergrounding the utilities, among other items. The City’s total approved loan contribution would not change; this request simply allows Cherry Street Commons to access a portion of the overall City Loan early enough to use it towards predevelopment activities such as utility undergrounding. This action will be taken by executing the attached First Amendment to the DDLA.

In order to effectuate this action $1,000,000 will need to be appropriated from the City’s Affordable Housing In-Lieu Fund (Fund 29) to the Cherry Street Capital Improvement Project (C9754). A total of $12,125,000 was previously approved to C9754, which also covers staff and administrative costs necessary to advance the project as well as the earlier acquisition of the property at 1232 Cherry Street. This additional appropriation will bring the total amount allocated towards the project up to $13,125,000. An amended CIP form for C9754 is attached to this staff report.

The total estimated cost for the Project is approximately $46 million. Including the City’s contribution, there is presently a financing gap of $3,700,000 for the Project. However, the City is not being requested to fill this gap as the Project recently received an alternate construction estimate which would eliminate this gap. The Developer is currently in the process of confirming this estimate and requesting additional sub estimates.

Cherry Street Commons also intends to apply for 9% tax credits in early 2024, amounting to around $21 million in funding. In the near term, the Project will be submitting an application to the State Infill Infrastructure Program (IIG) for an amount close to $3 million. This application is due on July 12th and requires the Project to have already received a financing commitment from the City. The remaining funding sources for the project include a permanent loan and seller carryback financing.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing the City Manager to sign an Amendment to the Disposition, Development, and Loan Agreement with Cherry Street Commons, L.P.; approving a total

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City Loan Amount of $12,860,000, including an allocation under this amount of $2,000,000 to the existing Predevelopment Loan; and appropriating an additional $1,000,000 from the City’s Affordable Housing In-Lieu Fund (Fund 29) to Capital Project C9754 to cover these costs and support the construction of an affordable housing project at 1232-1244 Cherry Street (Assessor’s Parcel Numbers (APNs) 050-132-110, 050-132-100, and 050-680- 040); or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Al Savay, Community Development Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution
Exhibit 1 to Resolution – First Amendment to DDLA

2. Executed Disposition, Development, and Loan Agreement (DDLA)

3. DDLA Resolution #2023-025

4. Executed Predevelopment Loan Agreement

5. Executed Predevelopment Loan Promissory Note

6. Amended CIP-C9754

7. Developer Gap Finance Request

8. Code Compliance Certificate

9. Relocation Plan

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RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE CITY MANAGER TO SIGN AN AMENDMENT TO THE DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT WITH CHERRY STREET COMMONS, L.P.; APPROVING A TOTAL CITY LOAN AMOUNT OF $12,860,000, INCLUDING AN ALLOCATION UNDER THIS AMOUNT OF $2,000,000 TO THE EXISTING PREDEVELOPMENT LOAN; AND APPROPRIATING AN ADDITIONAL $1,000,000 FROM THE CITY’S AFFORDABLE HOUSING IN-LIEU FUND (FUND 29) TO CAPITAL PROJECT C9754 TO COVER THESE COSTS AND SUPPORT THE CONSTRUCTION OF AN AFFORDABLE HOUSING PROJECT AT 1232-1244 CHERRY STREET (ASSESSOR’S PARCEL NUMBERS (APNS) 050-132-110, 050-132-100, AND 050-680-040).

WHEREAS, on June 24, 2019, the City of San Carlos Housing Authority adopted Resolution HA-010 which determined the necessity of acquiring the property located at 1232 Cherry Street by eminent domain for affordable housing serving the City of San Carlos; and WHEREAS, the City of San Carlos (“City”) is the owner of real property located at 1232 Cherry Street and real property northwest of 1244 Cherry Street (the “City Property”); and WHEREAS, the City Council has determined that the City Property is not necessary for the City’s use and that it should be disposed of to advance City's purposes and goals in facilitating the development of housing affordable to persons and families of low or moderate income by disposing of real property to provide that affordable housing consistent with the terms and conditions of Government Code section 37364; and
WHEREAS, Human Investment Project (“HIP Housing”) is the owner of real property located at 1244 Cherry Street (the “HIP Property”) that includes existing affordable housing and that is adjacent to the City Property; and
WHEREAS, HIP Housing and Eden Housing have joined to form Cherry Street Commons, a California limited partnership (the "Partnership"), to redevelop the HIP Property in conjunction with the City Property to increase the supply of affordable housing available in the City (the “Project”); and
WHEREAS, on January 26, 2021, Cherry Street Commons and the City negotiated and executed a Letter of Intent (“LOI”), which defined the framework for the City and the Partnership to negotiate the terms for the potential transfer of the City Property to Cherry Street Commons; and
WHEREAS, on June 28, 2021, the City Council adopted Resolution 2021-060 approving a Predevelopment Loan Agreement with the Partnership to cover a portion of the costs associated with further assessment of the Project’s feasibility, advancement of the Project’s design, and applications towards the governmental approvals necessary to construct the Project; and WHEREAS, on February 27, 2023, the City Council adopted Resolution 2023-025 approving a Disposition, Development, and Loan Agreement (“DDLA”) under which the City may agree to transfer the City Property to the Partnership, declared the City Property to be “exempt surplus land” pursuant to Government Code section 37364 and as defined in Government Code section 54221(f)(1), and envisioned future City Council approval of a specific loan amount; and

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WHEREAS, on June 7, 2023, the City’s Planning and Transportation Commission approved the land use entitlements for the Project, including details regarding the Project’s design and physical characteristics. The Commission also determined that the Project is exempt from the provisions of the California Environmental Quality Act (CEQA) per CEQA Section 15332, which exempts infill development meeting applicable General Plan policies and applicable zoning regulations from further environmental review.

NOW THEREFORE BE IT RESOLVED that the City Council hereby finds and determines that the foregoing recitals are true and correct and by this reference are incorporated into this Resolution; and
BE IT FURTHER RESOLVED that the City Council hereby approves the First Amendment to Disposition, Development, and Loan Agreement (DDLA) substantially in the form attached as Exhibit 1 to this Resolution; and
BE IT FURTHER RESOLVED that the City Council hereby approves an increase to the City Predevelopment Loan from One Million Dollars ($1,000,000.00) to Three Million Dollars ($3,000,000) upon Developer’s execution of an amended promissory note, the form of which shall be subject to the approval of the City Manager and the City Attorney; and BE IT FURTHER RESOLVED that the DDLA provided that the City Loan shall initially include the Predevelopment Loan as well as an acquisition loan to the Developer in the amount of the Purchase Price of the City Property and may be increased for additional predevelopment, development, construction, and operational activities. The Purchase Price has been determined to equal Three Million Two Hundred Sixty Thousand Dollars ($3,260,000); and BE IT FURTHER RESOLVED that the City Council hereby authorizes the City Manager or designee to execute the First Amendment to the DDLA and make any minor, clarifying and/or conforming changes approved by the City Attorney; and
BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take all actions necessary to complete the transaction contemplated in this Resolution and the DDLA, as amended by the First Amendment, including execution of any other necessary documents. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 26th day of June 2023, by the following vote:

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1 SF #4864-1108-2518 v1
Exhibit 1

FIRST AMENDMENT TO DISPOSITION,

DEVELOPMENT, AND LOAN AGREEMENT
(Cherry Street Affordable Housing Project)

THIS FIRST AMENDMENT TO DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT (this “First Amendment”) is entered into this ___ day of _______, 2023, by and between the City of San Carlos, a California municipal corporation (“City”) and Cherry Street Commons, L.P., a California limited partnership (“Developer”). The City and the Developer are collectively referred to herein as the “Parties.”

RECITALS
A. The Parties entered into that certain Disposition, Development and Loan Agreement dated February 27, 2023 (the “DDLA”).

B. Under the DDLA, the City agreed to provide Developer with a Predevelopment Loan up to One Million Dollars ($1,000,000.00) to conduct predevelopment due diligence and design work for the Project, along with an additional City Loan to be used by Developer.

C. The DDLA provided that the City Loan shall initially include the Predevelopment Loan as well as an acquisition loan to the Developer in the amount of the Purchase Price of the City Property and may be increased for additional predevelopment, development, construction and operational activities. The Purchase Price has been determined to equal Three Million Two Hundred Sixty Thousand Dollars ($3,260,000).

D. The City has received and approved a pro forma from the Developer that would involve a City Loan of up to Twelve Million Eight Hundred Sixty Thousand Dollars ($12,860,000), inclusive of the Predevelopment Loan and the loan for the Purchase Price.

E. The Parties also wish to increase the Predevelopment Loan by Two Million Dollars ($2,000,000) to help pay for the undergrounding of utilities that will serve the Project.

F. The Parties wish to amend the DDLA’s terms so that it incorporates these additional funding commitments to the Project from the City.

AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.

1. Defined Terms. All capitalized terms used in this First Amendment shall have the meanings given in the DDLA, unless expressly otherwise defined herein.

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2 SF #4864-1108-2518 v1

2. Enumeration of Specific Amendment. Section 2.3 of the DDLA is hereby amended and restated in its entirety as follows:
(a) The City Predevelopment Loan, which is evidenced by the Predevelopment Note between Developer and City dated June 13, 2021 and a Predevelopment Security Agreement, shall be increase from One Million Dollars ($1,000,000.00) to Three Million Dollars ($3,000,000) upon Developer’s execution of an amended promissory note, the form of which shall be subject to the approval of the City Manager and the City Attorney. (b) City has agreed to provide and Developer has agreed to accept a total loan from the City of Twelve Million Eight Hundred Sixty Thousand Dollars ($12,860,000), inclusive of the Predevelopment Loan (the "City Loan"). The Developer shall use the City Loan to undertake predevelopment, development, acquisition of the City Property for a Purchase Price equal to Three Million Two Hundred Sixty Thousand Dollars ($3,260,000.00), construction and operation of the Project.
(c) Prior to or concurrent with the transfer of the City Property, the City and the Developer shall: (i) amend the Predevelopment Loan Term set forth in the Predevelopment Note to 55 years after the Developer’s receipt of a Certificate of Completion for the Project, to evidence the full amount of the City Loan, and to incorporate relevant terms from this Agreement (as amended, the “City Note”); (ii) secure the City Loan with a deed of trust against the Site substantially in the form attached to this Agreement as Attachment 6 (“City Deed of Trust”); (iii) modify the loan repayment terms to include annual residual receipt payments; and (iv) to combine the Predevelopment Loan amounts already disbursed with the total amount of the new City Loan.
(d) If: (i) Developer determines, at any time prior to the date acquisition of the City Property that the Project is not feasible for any reason despite its good faith efforts; or (ii) if this Agreement is otherwise terminated without an uncured Developer default prior to the date acquisition of the City Property, City shall forgive the balance of the Predevelopment Loan, and Developer shall not be obligated to repay the Predevelopment Loan funds disbursed; provided however, City shall be entitled to exercise its rights under the Assignment Agreement given as security for the Predevelopment Loan.
(e) The City Loan, including the unpaid principal balance on the Predevelopment Loan, shall be evidenced and secured by the City Note and City Deed of Trust recorded against the Site. The City Loan shall bear interest at 3% annual simple interest. Annual payments on the City Note shall be due and payable on a pro-rata residual receipts basis in accordance with the formula set forth in the City Note. The annual loan payments shall commence upon conversion of the Project to permanent financing and continue for fifty-five years after Developer’s receipt of a Certificate of Completion for the Project. The entire outstanding principal balance of the City Loan, together with interest accrued thereon and all other sums accrued, shall be payable in full on the date that is fifty-five years after Developer’s receipt of a Certificate of Completion for the Project.

3. Interpretation. This First Amendment shall be interpreted to give each of the provisions their plain and fair meaning. The Recitals set forth above are incorporated into this First

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Amendment. The section headings used herein are solely for convenience and shall not be used to interpret this First Amendment

4. Integration. This First Amendment contains the entire agreement between the Parties with respect to its subject matter and supersedes whatever oral or written understanding they may have had prior to the execution of this First Amendment. Neither this First Amendment nor the DDLA shall be amended or modified except by a written agreement executed by each of the Parties.

5. Inconsistencies. In the event of any conflict or inconsistency between the provisions of this First Amendment and the DDLA, the provisions of this First Amendment shall control.

6. Severability. If any term, provision, condition, or covenant of this First Amendment or its application to any Party or circumstances shall be held by a court of competent jurisdiction, to any extent, invalid or unenforceable, the remainder of this First Amendment, or the application of the term, provision, condition, or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law unless the rights and obligations of the Parties have been materially altered or abridged thereby.

7. Status of DDLA. Except as modified by this First Amendment, the terms and provisions of the DDLA shall remain in full force and effect.

8. Counterparts. This First Amendment may be signed in counterparts by the Parties hereto and shall be the binding agreement of the Parties upon execution by each of them of one or more copies hereof.

SIGNATURES ON FOLLOWING PAGE(S).

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IN WITNESS WHEREOF, the Parties have entered into this FIRST AMENDMENT TO DDLA effective as of the date first written above.

CITY:

CITY OF SAN CARLOS,
a California municipal corporation
By: _______________________________
Jeff Maltbie,
City Manager
Attest: _______________________________
Crystal Mui,
City Clerk
Approved as to Form: _______________________________
Greg Rubens,
City Attorney
DEVELOPER:

Cherry Street Commons, L.P.
a California limited partnership
By: Eden Cherry Street LLC
a California limited liability company,
its co-general partner
By: Eden Investments, Inc.
a California nonprofit public benefit corporation, its
sole member/manager
By: ____________________________
Andrea Osgood,
VP of Real Estate Development
By: HIP Housing Development Corporation, Inc.,
a California nonprofit public benefit corporation,
its co-general partner
By: ____________________________
Name: Kate Comfort Harr
Its: Executive Director

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DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT(Cherry Street Affordable Housing Project)by and betweenCITY OF SAN CARLOSandCHERRY STREET COMMONS, L.P.

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Table of Contents 1. Definitions. ............................................................................................................................. 2 2. Term and Financing. ............................................................................................................ 4 2.1 Term. ................................................................................................................................ 4 2.2 Tax Credit Financing and Other Financing. ..................................................................... 4 2.3 City Financing. ................................................................................................................. 5 3. City Property Conveyance. .................................................................................................. 6 3.1 City Property Conveyance; Purchase Price. ..................................................................... 6 3.2 Escrow. ............................................................................................................................. 6 3.3 Costs of Escrow and Title Policy. .................................................................................... 6 3.4 Escrow Instructions. ......................................................................................................... 6 3.5 Authority of Escrow Agent. ............................................................................................. 7 3.6 Closing. ............................................................................................................................ 7 3.7 Termination Prior to Close of Escrow. ............................................................................ 7 3.8 Closing Procedures. .......................................................................................................... 8 3.9 Title Insurance. ................................................................................................................. 8 3.10 Conditions of Closing. .................................................................................................. 9 3.11 Representations and Warranties. ................................................................................ 11 3.12 City Property Inspections. .......................................................................................... 12 3.13 Right of Entry. ............................................................................................................ 14 3.14 City Property Condition.............................................................................................. 15 4. Project Financing. ............................................................................................................... 17 4.1 Project Construction Financing; Holders of Deeds of Trust. ......................................... 17 4.2 Rights of Holders. .......................................................................................................... 17 5. Development of the City Property. .................................................................................... 18 5.1 Scope of Development. .................................................................................................. 18 5.2 Cost of Construction....................................................................................................... 19 5.3 Insurance Requirements. ................................................................................................ 19 5.4 Certificate of Completion. .............................................................................................. 20 5.5 Compliance With Laws. ................................................................................................. 20 6. Covenants and Restrictions. ............................................................................................... 20 6.1 Use of City Property. ...................................................................................................... 20 6.2 Maintenance. .................................................................................................................. 20

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6.3 Nondiscrimination. ......................................................................................................... 20 7. Default and Remedies. ........................................................................................................ 21 7.1 Default Remedies. .......................................................................................................... 21 7.2 Termination by Any Party. ............................................................................................. 21 7.3 Termination by Developer. ............................................................................................ 21 7.4 Termination by City. ...................................................................................................... 21 7.5 City Power of Termination and Right of Reverter. ........................................................ 22 7.6 Acceptance of Service of Process. ................................................................................. 23 7.7 Rights and Remedies Are Cumulative. .......................................................................... 23 7.8 Inaction Not a Waiver of Default. .................................................................................. 23 8. General Provisions. ............................................................................................................. 24 8.1 Notices, Demands and Communications Between the Parties. ...................................... 24 8.2 Force Majeure Delays; Extension of Times for Performance. ....................................... 24 8.3 Transfers of Interest in Site or Agreement. .................................................................... 25 8.4 Non-Liability of Officials and Employees. .................................................................... 26 8.5 Relationship Between Parties. ........................................................................................ 26 8.6 Approvals, Actions and Authority of the City Manager. ............................................... 26 8.7 Counterparts. .................................................................................................................. 26 8.8 Integration. ..................................................................................................................... 26 8.9 No Real Estate Brokerage Commissions. ...................................................................... 26 8.10 Attorneys' Fees. .......................................................................................................... 26 8.11 Titles and Captions. .................................................................................................... 27 8.12 Interpretation and Applicable Law. ............................................................................ 27 8.13 No Waiver. .................................................................................................................. 27 8.14 Modifications. ............................................................................................................. 27 8.15 Severability. ................................................................................................................ 27 8.16 Legal Advice. .............................................................................................................. 27 8.17 Time of Essence. ......................................................................................................... 27 8.18 Cooperation. ............................................................................................................... 27 8.19 Conflicts of Interest. ................................................................................................... 28 Attachments Attachment 1 Legal Description of City Property Attachment 2 Legal Description of HIP Property

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Attachment 3 Scope of Project Attachment 4 Schedule of Performance Attachment 5 Form of City Regulatory Agreement Attachment 6 Form of City Deed of Trust

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DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT (Cherry Street Affordable Housing Project) This DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT (Agreement) is dated as of ________________, ____ 2023 Effective Date), by and between the CITY OF SAN CARLOS, a municipal corporation (the City) and CHERRY STREET COMMONS, L.P., a California limited partnership Developer). The City and Developer may be referred to PartyParties RECITALS A. Capitalized terms used but not defined in these Recitals shall have the meaning set forth in Section 1.0 below. B. The purpose of this Agreement is to advance City's purposes and goals in facilitating the development of housing affordable to persons and families of low or moderate income by disposing of real property to provide that affordable housing consistent with the terms and conditions of Government Code section 37364. C. The City is the owner of the real property located at 1232 Cherry Street in San Carlos, San Mateo County, California and real property northwest of 1244 Cherry Street, which is more particularly described in Attachment 1 City Property D. HIP Housing Development Corporation, Inc., a California nonprofit public benefit HIP, a co-general partner of the Developer, is the owner of, the real property located at 1244 Cherry Street in San Carlos, San Mateo County, California, which is more particularly described in Attachment 2 HIP Propertyy, Site E. The City selected the Developer to construct a residential project on the Site together with parking and related improvements, in a structure or structures that are no more than fiProject F. Prior to reaching this Agreement, the Parties negotiated and executed a Letter of Intent dated January 26, 2021 (as LOI and a Predevelopment Loan Agreement, under which the City agreed to loan Developer up to One Million Dollars ($1,000,000.00) to conduct predevelopment due diligence and design work for the Project Predevelopment Loan. In connection with the Predevelopment Loan Agreement, Borrower provided the City with an Assignment Agreement as security. G. The Project will consist of no fewer than thirty three (33) rental units, including thirty two (32) affordable rental units subject to a City Regulatory Agreement substantially in the form attached to this Agreement as Attachment 5 (the "City Regulatory Agreement"). The Regulatory Agreement will restrict seven units (7) to households earning up to 50% of area median income, seven (7) units to households earning up to 60% of area median income, and eighteen (18) units to households earning up to 120% of area median

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income. The Project is more particularly described, including the anticipated affordability level distribution, in the Scope of Development attached to this Agreement as Attachment 3. H. The Parties wish to enter into this Agreement to set forth the terms and conditions relating to City's disposition of the City Property to the DeveloperProject consistent with the terms of this Agreement. I. Prior to entering into this Agreement, at a regular meeting of the City Council on February 27, 2023, the City Council adopted a resolution that included a declaration that the City 54221(f)(1) because the City Property will be transferred for the production of affordable housing pursuant to Government Code section 37364. J. compliance with the California Environmental Quality Act (Public Resources Code §§ 21000 et CEQA has completed environmental review sufficient to comply with CEQA, the City shall retain full discretion to modify, deny, or condition the Project. NOW, THEREFORE, in reliance on the Recitals above, which are incorporated by reference herein with the same force and effect as any other term and condition of this Agreement, and in consideration of the mutual covenants, agreements and conditions set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties, the Parties hereby agree as follows: AGREEMENT 1. Definitions. As used in this Agreement, including the Recitals above, the following capitalized terms shall have the following meanings. "Actual Knowledge" in the case of Developer shall mean the actual knowledge of Kate Comfort Harr and in the case of City shall mean the actual knowledge of the City Manager (not inclusive of any designee), and in each instance shall not impose a duty of investigation by City or Developer. "Agreement" shall mean this Disposition, Development, and Loan Agreement between the City and Developer. "City" shall mean the City of San Carlos, California, a California municipal corporation. "City Regulatory Agreement" is defined in Recital G. "City Manager" shall mean the City Manager of City or his or her designee. "Close of Escrow" shall mean the date that a grant deed for the City Property in favor of the Developer is recorded in the Official Records of the County Recorder's Office.

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"Closing Date" shall mean that date ending no later than thirty (30) days after , unless mutually extended by the Parties. "County" shall mean the County of San Mateo, California. "Default" shall mean the failure of a Party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure. "Developer" shall mean Cherry Street Commons, L.P., a California limited partnership, the co-general partners of which are HIP and Eden Cherry Street LLC (of which Eden Housing, which is defined below, is sole member/manager). Investments, Inc., a California nonprofit public benefit corporation. "Effective Date" shall be the first date mentioned above in this Agreement. "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State, the County, City, or any other political subdivision in which the Site is located, and of any other political subdivision, which are applicable to City, Developer or the Site. "Grant Deed" shall mean the grant deed for the conveyance of the City Property from City to Developer. "Hazardous Materials" shall mean any chemical, substance, object, condition, material or waste that is or may be hazardous to human health or safety or to the environment, due to its radioactivity, ignitability, corrosivity, flammability, reproductive toxicity, infectiousness or other harmful properties or effects, including all chemicals, substances, materials and wastes that are now or hereafter may be regulated in any manner, classified as dangerous, hazardous or toxic, or as pollutants or contaminants, or to which exposure is prohibited or restricted by any federal, state or local government or public agency, board, body or authority or by any Hazardous Material Law. "Hazardous Materials" include flammable explosives, radioactive materials, polychlorinated biphenyls, asbestos, hazardous waste, radon, toxic substances or other related materials whether in the form of a chemical, element, compound, solution, mixture or otherwise, including those materials defined as "hazardous substances", "hazardous materials", "toxic substances", "air pollutants", "toxic pollutants", "hazardous wastes", "extremely hazardous waste" or "restricted hazardous waste" by any Hazardous Materials Law. Notwithstanding the ot include substances typically used in the ordinary course of developing, operating and maintaining apartment complexes provided that such substances are used in accordance with all applicable laws. Hazardous Materials Law means, without implied limitation, substances defined as "hazardous substances," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Toxic Substances Control Act ("TSCA") [15 U.S.C. Sections 2601, et seq.]; the Hazardous Materials Transportation Act, 49 U.S.C. Sections

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1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor authority, as hazardous substances [40 CFR Part 302]; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code or, as "hazardous substances" in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shall also include manure, asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317. "Opening of Escrow" shall mean the date a copy of this fully executed Agreement is deposited with the Title Company and a request on Escrow Holder is made to open escrow. "Project" is defined in Recital E above and is described in the Scope of Development. "Schedule of Performance" attached hereto as Attachment 4 summarizes and describes the tasks and assigns responsibility and the timing of accomplishing the proposed steps leading to the successful completion of the Project pursuant to the terms and conditions of this Agreement. The Schedule of Performance is subject to administrative amendment, by the City Manager, for minor revisions in tasks and scheduling. Developer's covenant below to strictly adhere to the Schedule of Performance is a material inducement to City to enter this Agreement. "Scope of Development" attached hereto and made a part hereof as Attachment 2 describes the amount and quality of development of the Project to be constructed by Developer pursuant to the terms and conditions of this Agreement. The Scope of Development is subject to administrative amendment, by the City Manager, for minor revisions in location, size, and design. "Site" shall mean the land described on Attachment 1 and Attachment 2. "State" shall mean the State of California. "Title Company" shall mean Old Republic Title Company in Oakland, California, or another escrow title company satisfactory to Developer and to the City. 2. Term and Financing. 2.1 Term. The term of this Agreement will commence on the Effective Date and will end on the earlier of: (a) the date the Project receives a Certificate of Completion, as defined in Section 5.4, or (b) December 31, 2028, unless extended by mutual agreement of the Parties Outside Date. 2.2 Tax Credit Financing and Other Financing. Development of the Project is contingent upon (a) Developer receiving a sufficient allocation ("Tax Credit Allocation") of 9% low-income housing tax credits ("Tax Credits") from the California Tax Credit Allocation

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Committee ("CTCAC"); and (b) Developer obtaining all other financial commitments in . This Agreement assumes that the Project will be financed with 9% Tax Credits. However, Developer shall have the right to apply for additional or different sources of financing as Developer determines is necessary to ensure the feasibility of the Project, and the City Manager, in his or her reasonable discretion, shall have the authority to make all necessary amendments and/or modifications to the Agreement, including its attachments, to reflect the ultimate financing structure. 2.3 City Financing. (a) The City Predevelopment Loan, which is evidenced by the Predevelopment Note between Developer and City dated June 13, 2021 and a Predevelopment Security Agreement. (b) City has agreed to provide and Developer has agreed to accept an additional loan from the City (the "City Loan") to be used by Developer to undertake predevelopment, development, acquisition, construction and operation of the Project. The City Loan shall initially include the Predevelopment Loan as well as an acquisition loan to the Developer in the amount of the Purchase Price of the City Property and may be increased for additional predevelopment, development, construction and operational activities as provided in paragraph (f) of this section. (c) Prior to or concurrent with the transfer of the City Property, the City and the Developer shall: (i) amend the Predevelopment Loan Term set forth in the Predevelopment Note to 55 years after the Completion for the Project, to evidence the full amount of the City Loan, and to incorporate relevant terms from this Agreement City Note; (ii) secure the City Loan with a deed of trust against the Site substantially in the form attached to this Agreement as Attachment 6 City Deed of Trust; (iii) modify the loan repayment terms to include annual residual receipt payments; and (iv) to combine the Predevelopment Loan amounts already disbursed with the total amount of the new City Loan. (d) If: (i) Developer determines, at any time prior to the date acquisition of the City Property that the Project is not feasible for any reason despite its good faith efforts; or (ii) if this Agreement is otherwise terminated without an uncured Developer default prior to the date acquisition of the City Property, City shall forgive the balance of the Predevelopment Loan, and Developer shall not be obligated to repay the Predevelopment Loan funds disbursed; provided however, City shall be entitled to exercise its rights under the Assignment Agreement given as security for the Predevelopment Loan. (e) The City Loan, including the unpaid principal balance on the Predevelopment Loan, shall be evidenced and secured by the City Note and City Deed of Trust recorded against the Site. The City Loan shall bear interest at 3% annual simple interest. Annual payments on the City Note shall be due and payable on a pro-rata residual receipts basis in accordance with the formula set forth in the City Note. The annual loan payments shall commence upon conversion of the Project to permanent financing and continue for fifty-five

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years Completion for the Project. The entire outstanding principal balance of the City Loan, together with interest accrued thereon and all receipt of a Certificate of Completion for the Project. (f) Subject to approval of a final finance plan, the City may, but is not obligated to, make an additional future development loan and/or other financial contribution to be disbursed to pay for development and/or operations costs in connection with the Project. Any future contributions in addition to the amount identified in this Agreement as the City Loan shall be contingent on Developer and City mutually agreeing to a financing plan, a subsequent loan agreement (or amendment to this Agreement), and corresponding amendments to the City Note and City Deed of Trust. 3. City Property Conveyance. 3.1 City Property Conveyance; Purchase Price. City agrees to convey the City Property to Developer and Developer agrees to acquire the City Property from City in accordance with and subject to all of the terms, covenants, and conditions of this Agreement. (a) The purchase price for the City Property shall be paid by Developer to City as part of the City Loan, based on the fair market value of the City Property as supported by a third-party appraisal (the "Purchase Price"). (b) The Developer shall cause the preparation of a third party appraisal of the City Property within 120 days following the Effective Date and provide a copy of the same to the City the appraisal, the City shall provide Developer with written notice of its objections within ten (10) days after receiving the appraisal. If the City fails to object within such period, the City shall be deemed to have accepted the appraisal and the results will be the Purchase Price. If the City does provide timely notice of its objection, then the Parties shall meet and confer in good faith to revise the appraisal so that it is mutually satisfactory to the Parties. 3.2 Escrow. The Parties to this Agreement shall take all necessary steps to ensure the Opening of Escrow with the Title Company, which is to occur no later than fourteen (14) days after the Effective Date. 3.3 Costs of Escrow and Title Policy. Developer shall pay for the premium for a CLTA owner's policy of title insurance in favor of Developer and CLTA lender's title policies in favor of City ("Title Policy"). Developer shall pay the additional premium for an ALTA Owner's Title Policy and any endorsements if Developer desires an ALTA Owner's Title Policy. City shall pay the additional premium for an ALTA Lender's Title Policy and any endorsements if City desires an ALTA Lender's Title Policy. Escrow fees and charges shall be equally divided between the Parties. City shall pay documentary transfer taxes, if any. 3.4 Escrow Instructions. This Agreement constitutes the joint escrow instructions of the Parties for the conveyance of the City Property and of the recording of the City Deed of Trust securing the City Loan and the City Regulatory Agreement against the City Property and the HIP Property, and the Escrow Agent to which these instructions are delivered is hereby empowered

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to act under this Agreement. Any insurance policies for fire or casualty are not to be transferred, and City will cancel any of its own policies concurrent, with the Close of Escrow. All funds received into Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check or wire transfer from such account. If in the opinion of either Party or Escrow Agent it is necessary or convenient in order to accomplish the Close of Escrow, the Parties shall sign supplemental escrow instructions; provided, however, that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control unless both Parties expressly agree, in writing, to the superseding nature of supplemental escrow instructions. The Parties agree to execute such other and further documents as may be reasonably necessary to effectuate the provisions of this Agreement. 3.5 Authority of Escrow Agent. Escrow Agent is authorized to, and subject to thesatisfaction (or written waiver) of Conditions Precedent and City's Conditions Precedent, shall:(a) Confirm that the Title Company has committed to provide Developer witha CLTA Owner's Policy of Title Insurance and to provide City with CLTA lender's title policies insuring its City Deed of Trust.(b) Pay and charge City and/or Developer for the cost(s) of any escrow fees,charges, and costs payable under Section 3.3 of this Agreement.(c) Record the Grant Deed for the City Property, then the City RegulatoryAgreement, and then the City Deed of Trust against the Site in favor of the City.(d) Direct City and Developer to execute and to deliver any instrument,affidavit, and statement, and to perform any act reasonably necessary to transfer the City Property in compliance with State and federal laws and regulations, including execution by City and Developer of forms to comply with Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) and any similar California law to ensure no withholding is required.(e) Take such other actions as Escrow Agent is expressly or implicitlyauthorized to take by this Agreement.3.6 Closing. The Close of Escrow shall occur no later than thirty (30) days following the satisfaction or waiver of each of Precedent, unless mutually extended by the Parties.3.7 Termination Prior to Close of Escrow. In the event Close of Escrow has notoccurred by the Outside Date, either City or Developer shall be entitled to terminate this Agreement, without cause or justification, by written notice, both to the other Parties and to Escrow Agent, so long as the terminating Party is not in Default of this Agreement. Within five (5) business days after written notice of termination, Escrow Agent shall terminate the Escrowand return any money, documents, or other property held in Escrow to the Party who depositedthe items, unless a written objection is received by Escrow Agent within this five (5) day period.If any written objections are received by the Escrow Agent within the five (5) day period,

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Escrow Agent is authorized to hold all money, documents, or other property until instructed to the contrary by a court of competent jurisdiction, or by mutual written instructions of the Parties. 3.8 Closing Procedures. Escrow Agent shall effect the Close of Escrow for the City Property as follows: (a) Record the Grant Deed; (b) Record the City Regulatory Agreement and City Deed of Trust against the City Property and the HIP Property; (c) Cause the Title Company to deliver the Title Policy to Developer; (d) Deliver the City Note to City; (e) Disburse a portion of City Loan proceeds as mutually agreed upon by the Parties in writing to the Developer; and (f) Forward to Developer and to City a final settlement statement covering all funds received and disbursed for the benefit of or to each Party. 3.9 Title Insurance. Concurrently with recordation of the Grant Deed conveying title to the City Property to Developer, Title Company shall issue to Developer the Title Policy, together with such endorsements as are required by Developer, insuring that the title to the City Property is vested in Developer subject to the Exceptions (except for any Exceptions that City has agreed to remove). The Exceptions shall be those disclosed by the preliminary title report provided under the Title Policy, to be approved by Buyer. (a) Title Status. Developer shall cause the preparation of a Preliminary Title Report for the City Property within 120 days following the Effective Date. Within sixty days following receipt of the Preliminary Title Report, Developer shall provide written notice to the City identifying any exceptions from coverage to which Developer objects Title ObjectionsMatters shown on the Preliminary Site Title Report to which Developer does not provide timely written notice of its objection Permitted Exceptions (b) Failure to Remove Title Objections. If the City is unable to cause the removal of the Title Objections within 180 days after receiving notice of the same from Developer, then the Developer may either (1) refuse to accept the title to and conveyance of the City Property, in which case the Developer shall have the right to cancel the Escrow and terminate this Agreement without liability to City or any other person, by delivery of a written notice of termination to the Escrow Holder, (2) waive its objection to any items set forth in the Title Objections by delivering a Title Objection Waiver to the City and to proceed with Close of Escrow, or (3) agree to extend the time period for the City to remove the Title Objections from the Preliminary Title Report to a date agreed upon by the Parties in writing. to terminate this Agreement shall be its sole remedy if the City is unable to remove the Title Objections, and Developer agrees not to hold City in default of this Agreement or liable for any cost, damages, claims or liability based upon

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or from any challenges by any person or entity, now or in the future, to the title held by City orthe effect such challenges may have to the Project that is the subject of this Agreement.(c)Covenant. Following the Effective Date and prior to the Closeof Escrow, the City agrees that it shall not voluntarily permit or cause to be created any which shall notCity's Title CovenantTitle Covenant shall be a Default. If, following the Effective Date and prior to the Close of Escrow,written consent, then Developer may object to such new exception by notice to City given within ten (10) days after Developer receives written notice of the new exception. If Developer fails to object within such period, then the new exception will be deemed to be a Permitted Exception. If the Developer does objesole and absolute discretion, at its cost, to remove any new exceptions that are not Permitted Exceptions prior to the Close of Escrow. If City does so elect, it will notify Developer within ten (10) dobjection. If City elects not to remove or cause to be eliminated the exception, or fails to respond within the ten (10) day period, then Developer shall have the right to: (i) terminate this Agreement by notice toCity delivered within ten (10) days after Developer receives City's notice that it has elected notto remove or cause to be eliminated the exception or expiration of the ten (10) day period,whichever occurs earlier; (ii) upon written notice provided to City within ten (10) days of City'selection not to remove or cause to be eliminated the exception or failure to respond, diligentlyproceed to take such actions necessary to remove the exception, which may include obtaining anendorsement insuring over such exception subject to such conditions and requirements imposedby Escrow Holder; or (iii) proceed with the Close of Escrow subject to such exception. IfDeveloper elects clause (ii) and fails to so terminate or elect to cure within the ten (10) dayperiod, then it shall be deemed to have elected clause (iii) above. Exceptions that City elects notto remove or cause to be eliminated, or is deemed to have elected not to remove or cause to beeliminated, and that Developer elects to accept, or is deemed to have accepted, are also PermittedExceptions.3.10 Conditions of Closing. The Close of Escrow is expressly conditioned upon satisfaction of the following terms and conditions within the times designated below:(a) City's Conditions Precedent. City's obligation to proceed with the Closeof Escrow is subject to the fulfillment by Developer, or written waiver by City, of each and every one of the conditions precedent described below ("City's Conditions Precedent"), which aresolely for the benefit of City, and which shall be fulfilled or waived by the time periods provided for herein. If the City's Conditions Precedent set forth in this Section are neither satisfied nor waived by the Outside Date, and provided that City is not then in default under this Agreement, City may terminate escrow and this Agreement by giving written notice of termination to theDeveloper and to Title Company, in which case the respective rights, duties and obligations of the Parties under this Agreement shall terminate without further liability, except for obligations that expressly survive termination of this Agreement. Notwithstanding anything to the contrary contained herein, Developer's inability to satisfy the City's Conditions Precedent set forth in this Section shall not be considered a breach of this Agreement. The Close of Escrow under this Agreement constitutes satisfaction of the conditions precedent set forth below:

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(i) Developer shall have applied for and obtained all discretionary project approvals necessary to merge the City Property and the HIP Property into one parcel on the Site and to construct the Project. Prior to taking action on the entitlement application, the City shall have conducted sufficient environmental review to comply with CEQA, and to the extent applicable, NEPA. The City retains full discretion as to what actions may be necessary to comply with CEQA and/or NEPA, including modifications to the Project or actions to deny or conditionally approve the Project to reduce the severity of potential environmental effects, and this condition shall not be waivable. (ii) delivery of originals of the executed City Note, City Regulatory Agreement, and City Deed of Trust in a form approved by the Parties. (iii) Developer shall have delivered a Due Diligence Investigation Conclusion Notice to City as required by Section 3.12 of this Agreement. (iv) deposit into Escrow, of all sums to be deposited, or paid by Developer into Escrow in accordance with this Agreement. (v) The Title Company shall have committed to provide the Title Policy for the City Property upon the Close of Escrow subject only to payment for it in accordance with Section 3.3 above. (vi) An approved financing plan for all debt and equity necessary to purchase the City Property and construct the Project. (vii) The Developer shall not be in Default of any of its obligations under the terms of this Agreement and all representations and warranties of Developer contained in Section 3.11.b herein shall be true and correct in all material respects. (b) Conditions Precedent. obligation to proceed with the Close of Escrow is subject to the fulfillment by City, or written waiver by Developer, of each and all of the conditions precedent described below (" Conditions Precedent"), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein. If the Conditions Precedent set forth in this Section are neither satisfied nor waived by the Outside Date, and provided that Developer is not then in default under this Agreement, Developer may terminate escrow and this Agreement by giving written notice of termination to City and Title Company, in which case the respective rights, duties and obligations of the Parties under this Agreement shall terminate without further liability, except for obligations that expressly survive termination of this Agreement. Notwithstanding anything to the contrary contained herein, City's inability to satisfy the Conditions Precedent, except for the Condition Precedent identified in subsection (i), shall not be considered a breach of this Agreement. The Close of Escrow under this Agreement constitutes satisfaction of the conditions precedent set forth below: (i) City shall have executed and acknowledged the Grant Deed granting a fee simple interest to the City Property and any other documents required of it hereunder, and delivered them to Escrow.

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(ii) City shall have deposited any required City Loan funds intoEscrow for disbursement to Developer.(iii) City shall have demolished all existing structures from the CityProperty.(iv) Prior to the Close of Escrow, City shall not be in Default in any ofits obligations under the terms of this Agreement and all representations and warranties of City contained in Section 3.11.a herein shall be true and correct in all material respects. (v) The Title Company shall have committed to issue the Title Policy.(vi) Developer shall have obtained all City requisite approvals of theProject.3.11 Representations and Warranties.(a) City Representations. City represents and warrants to Developer asfollows:(i) Subject to the satisfaction of the conditions precedent in theRecitals of this Agreement and Sections 3.10.a and 3.10.b, above, City has full right, power and lawful authority to grant and to convey the City Property, subject to the Exceptions included on the Preliminary Title Report, and the execution, performance and delivery of this Agreement and the instruments referenced herein by City has been duly authorized by all requisite actions on the part of City.(ii) Subject to the understanding of the Parties in Section 3.9 and therepresentations in this Section 3.11obligations under this Agreement and the instruments referenced herein will not constitute a default or a breach under any contract, agreement or order to which City is a Party or by which it is bound.(iii) To City's Actual Knowledge, there are no pending actions, suits,arbitrations, claims or proceedings, at law, in equity or otherwise, affecting, or which may affect, all or any portion of the City Property.(iv) Except as otherwise disclosed in Section 3.9 and the representationin this Section 3.11, to City's Actual Knowledge, there are no agreements (whether oral or written), affecting or relating to the right of any Party with respect to the possession of the City Property, or any portion thereof, which are obligations that will affect the City Property or any portion thereof following the Close of Escrow.Until the Close of Escrow, City shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true as of Close of Escrow, immediately give written notice of such fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by City hereunder, but shall constitute a matter that Developer shall have a right to approve or disapprove if such matter

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June 26, 2023

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would have a material adverse effect on the value and/or operation of the Project. If Developer elects to proceed with the Close of Escrow following disclosure of such information, City's representations and warranties contained herein shall be deemed to have been made as of the Close of Escrow, subject to such additional matters. If, following the disclosure of such information, Developer elects to not close Escrow, then this Agreement and Escrow shall automatically terminate, and neither Party shall have any further rights, obligations or liabilities hereunder.The representations and warranties set forth in this Section shall survive the Close of Escrow.(b)Representations. Developer represents and warrants to Cityas follows:(i) Developer is a California limited partnership, which has full right,power and lawful authority to accept the conveyance of the City Property, develop the Project on the Site, and undertake all obligations as provided herein.(ii) The execution, performance and delivery of this Agreement byDeveloper has been fully authorized by all requisite actions on the part of its general partners.(iii) ToActual Knowledge, there are no pending actions,suits, arbitrations, claims or proceedings, at law, in equity or otherwise, affecting, or which may affect Deperformance of this Agreement.(iv) Developer has the skill, knowledge and expertise to finance,construct and operate the Project contemplated by this Agreement.Until the Close of Escrow, Developer shall, upon learning of any fact or condition whichwould cause any of the warranties and representations in this Section not to be true as of Close of Escrow, immediately give written notice of such fact or condition to City. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute a matter that City shall have a right to approve or disapprove if such matter would have a material adverse effect on the development and/or operation of the Project. If City elects to proceed with the Close of Escrow following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the Close of Escrow, subject to such exception(s). If, following the disclosure of such information, City elects to not close Escrow, then this Agreement and Escrow shall automatically terminate, and neither Party shall have any further rights, obligations or liabilities hereunder.The representations and warranties set forth in this Sections shall survive the Close of Escrow.3.12 City Property Inspections.(a) Developer shall be permitted to inspect the City Property from theEffective Date of this Agreement until the date that is three (3) months after the City completes its demolition of the existing structures on the City Property for the purpose of obtaining data

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and making surveys and tests necessary to complete its due diligence, of the City Property, including the investigation of the environmental condition of the City Property (collectively, the "Studies"). Any preliminary work or Studies undertaken on the City Property by Developer shall be done at the sole expense and risk of Developer and Developer shall provide to City a copy of all Studies. Any preliminary work or Studies shall be undertaken only after securing any necessary authorization and/or permits from the appropriate governmental agencies. Any Studies of the City Property by the Developer shall not unreasonably disrupt any then-existing use or occupancy of the City Property or the operations of the City. The Developer shall be liable for any damage or injury to any person or property arising from the acts of the Developer, its employees, agents or representatives during the course of any Studies on the City Property and the Developer shall indemnify, defend with counsel reasonably acceptable to the City and hold harmless the City and its elected officials, officers, directors, attorneys, contractors, agents and employees from any and all actual or alleged liens, claims, demands or liability arising from Developer or its agents' presence on the property or any Studies by the Developer on the City Property. (b) Upon completion of the Studies the demolition of the existing structures on the City Property, Developer shall deliver a Due Diligence Investigation Conclusion Notice indicating s determinations concerning the suitability of the physical condition of the City Property for development and intended use. If, in the Developers sole and absolute discretion, the physical condition of the City Property is unsuitable for the use or uses to which the City Property will be put, then Developer shall have the option to (i) take any action necessary to place the City Property in a condition suitable for development, at no cost to City; or (ii) terminate this Agreement pursuant to the provisions in Section 3.7. If, however, Developer elects to not avail itself of either option, then Developer shall give its unconditional acceptance of the condition of the City Property and shall evidence the acceptance of the condition of the City Property by Developer in its existing "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. Developer's unconditional and irrevocable acceptance of the City Property in the AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION, WITHOUT WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION, including any warranty as to title, physical condition, soil conditions, the presence or absence of fill, subsurface support, zoning, land use restrictions, the availability or location of utilities or services, the location of any public infrastructure on or off of the City Property (active, inactive or abandoned), the suitability of the Site for the Project or other use or the existence or absence of Hazardous Substances and with full knowledge of the physical condition of the City Property, the nature of interest in and use of the City Property, all Laws applicable to the City Property, the Permitted Exceptions and any and all conditions, covenants, restrictions, encumbrances and all matters of record relating to the Site. Developer represents and warrants to City that: (a) Developer has had ample opportunity to inspect and evaluate the City Property and the feasibility of the uses and activities Developer is entitled to conduct on the City Property in accordance with this Agreement; (b) Developer is experienced in real estate development; (c) Developer is relying entirely on Developer's experience, expertise and its own inspection of the City Property in its current state in proceeding with acquisition of the City Property; (d) Developer accepts the City Property in its present condition including all environmental and hazardous material conditions on the property; and (e) to the extent that Developer's own expertise with respect to any matter regarding the City Property is insufficient to enable Developer to reach an informed conclusion

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June 26, 2023

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regarding such matter, Developer has engaged the services of Persons qualified to advise Developer with respect to such matters. The Close of Escrow shall constitute Developer's representation and warranty to City that Developer has received assurances acceptable to Developer by means independent of the City of the truth of all facts material to Developer's acquisition of the City Property pursuant to this Agreement and that the City Property is being acquired by Developer as a result of its own knowledge, inspection and investigation of the City Property and not as a result of any representation made by the City relating to the condition of the Site, unless such statement or representation is expressly and specifically set forth in this Agreement. Except to the extent of any express representations and warranties of City specifically set forth in this Agreement (if any), City hereby expressly and specifically disclaims any express or implied warranties regarding the City Property. 3.13 Right of Entry. (a) Right of Entry. City hereby grants to Developer and its authorized agents and contractors the nonexclusive right to enter upon the City Property (the "Right of Entry") to undertake the Approved Uses, defined below, only, and expressly for no other purposes without the prior written approval of the City Manager, which approval the City Manager may grant or deny in good faith to meet the objectives of this Agreement. "Approved Uses" shall mean that Developer and its contractors, employees, agents, assigns, experts and vendors have the right to enter onto the City Property for the purposes of (i) inspecting the City Property, (ii) performing initial civil engineering studies including performing topographical and boundary surveys, (iii) obtaining soil samples, and (iv) performing environmental studies. (b) Term of Right of Entry. This Right of Entry shall automatically terminate and expire on the first to occur of the following: (i) upon the execution and delivery of title and possession of the City Property by City to Developer or (ii) upon the termination of the Agreement. (i) It is expressly understood this Right of Entry does not in any way whatsoever grant or convey any rights of possession, easement or other interest in the City Property to Developer, at this point in time, or through this Right of Entry. (ii) Under the terms of this Right of Entry, in no event shall Developer use the City Property in any manner beyond the scope of the Approved Uses. In the event Developer undertakes any other use at the City Property outside the scope of the described Approved Uses, this Right of Entry shall automatically terminate and Developer shall immediately vacate the City Property, shall have no further rights to enter the City Property for the Approved Uses and shall be liable and responsible to City for any and all damages, claims, and mechanics liens, if any, relating to the City Property. (iii) All acts and things done by Developer on the City Property will be done in a careful and reasonable manner, in accordance with all applicable Federal, state and local laws. (iv) Developer enters the City Property entirely at its own cost, risk and expense, and Developer acknowledges that City and its officers, employees, agents or

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June 26, 2023

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contractors, have made no warranty or representation to Developer that the City Property, or any part thereof is safe or suitable for the intended purposes of the Approved Uses.(v) Before Developer's entry upon the City Property and during theperiod of this Right of Entry, there shall be in effect policies of insurance in the amount set forthas required under Section 3.13.c herein.(vi) Developer shall not permit any mechanics', materialmen's or otherliens of any kind or nature to be filed or enforced against the City Property. If any such lien is filed against the City Property, Developer, within thirty (30) days after such filing, will either cause such lien to be lifted or will provide a bond in favor of City for the amount of the claim pursuant to which the lien is filed.(vii) During the term of this Right of Entry, Developer shall maintainthe City Property in a safe and good condition resulting from the entry and work thereon by Developer and Developer's contractors and agents. Developer will not be responsible for any conditions, damage, or injuries caused by a third party exercising the Right of Entry.(c) Insurance Requirements. In connection with the right of entry granted toDeveloper under this Agreement, Developer shall present City with evidence of a general liability insurance policy with limits consistent with Section 5.3, below.(d) Indemnification Requirements. If Developer exercises its rights under thisSection 3.13, Developer agrees to indemnify, defend and hold the City and its respective officers, employees, agents, representatives and volunteers harmless from and against any claim, action, suit, proceeding, damage, liability, deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys' fees), resulting from, arising out of, or based upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the City Property occurring f the City Property, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the City Property occurring in connection .3.14 City Property Condition.(a) Disclosure Regarding Condition of City Property. City hereby representsand warrants to Developer that it has no Actual Knowledge of the presence of surface or subsurface Hazardous Materials in, on or under the City Property or any portion thereof except as may have been previously disclosed to Developer. The City has commissioned a Pre-Demolition Asbestos Survey and Lead-Based Paint Screening Report from AEI Consultants dated April 13, 2022, a Soil Vapor Investigation Report by Green Environment dated November 11, 2021, and a Phase I Environmental Site Assessment by Smith-Emery GeoServices dated April 11, 200Environmental StudiesEnvironmental Studies to the Developer, and all information in the Environmental Studies is deemed disclosed for purposes of this Section.

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(b) Investigation. Developer, before the Close of Escrow and at its own soleexpense, shall be responsible for obtaining an environmental investigation of the City Property performed by an environmental consultant within the period described in Section 3.12 above, and shall promptly provide City with a copy of all reports and test results provided by its environmental consultant.(c) Precautions Before Closing. Before the Close of Escrow, City andDeveloper shall use commercially reasonable efforts to prevent the release into the environment of any Hazardous Materials that may be located in, on or under the City Property. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. City shall promptly notify Developer if any Hazardous Materials are released in, on, or under the City Property prior to Close of Escrow.(d) Required Disclosures After Closing. After the Close of Escrow,Developer shall notify City, and provide to City a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the City Property, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, and all reports prepared concerning the condition of the City Property, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials.(e) Hazardous Materials Indemnification by the Parties. City agrees toindemnify, defend and hold the Developer and its respective officers, employees, agents, representatives and volunteers harmless from and against any claim, action, suit, proceeding, damage, liability, deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys' fees), resulting from, arising out of, or based upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the City Property occurring prior to the Close of Escrow, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the City Property occurring prior to the Close of Escrow unless the same is caused by Developer through the exercise of its Right of Entry pursuant to Section 3.13 of this Agreement. City shall be responsible for third parties dumping waste, including Hazardous Materials, on or about the City Property before the Close of Escrow. Developer agrees to indemnify, defend and hold the City and its respective officers, employees, agents, representatives and volunteers harmless from and against any claim, action, suit, proceeding, damage, liability, deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys' fees), resulting from, arising out of, or based upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the City Property occurring after the Close of Escrow, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the City Property occurring after the Close of Escrow.

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(f) Waiver and Release. Effective as of the Close of Escrow, Developerhereby waives, releases and discharges forever the City and its respective officers, employees, agents, representatives and volunteers from any and all present and future claims, actions, suits, proceedings, damages, liability, deficiency, fine, penalty, or punitive damages arising out of or in any way connected with the condition of the City Property or applicable portion thereof, any Hazardous Materials on, under or about the City Property or applicable portion thereof however they came to be placed there, or the release of Hazardous Materials from the City Property or applicable portion thereof. The Developer is aware of and familiar with the provisions of California Civil Code section 1542, which provides as follows:"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."As it relates to this Section, Developer hereby waives and relinquishes all rights and benefits that it may have under California Civil Code section 1542.Developer Initials______City Initials ______4. Project Financing.4.1 Project Construction Financing; Holders of Deeds of Trust. Developer shall have the right to hypothecate its interest in the Project pursuant to deeds of trust from lenders approved by the City Manager (which approval shall not be unreasonably conditioned or withheld) for the purpose of securing a loan or loans of funds to be used for financing the costs of the Project. Any lender of record, other than City, holding a deed of trust security such asthose whose name and address shall have been provided by Developer to City shall be referred to herein as a "Holder" and collectively as "Holders."4.2 Rights of Holders. City shall deliver a copy of any notice or demand to Developer concerning any alleged breach or Default by Developer under this Agreement to each Holder. Such Holder shall have the right at its option to cure or remedy any such breach or default and to add the cost thereof to the secured debt and the lien of its security interest. If suchbreach or default can only be remedied or cured by such Holder upon obtaining possession, such Holder may remedy or cure such breach or default within a reasonable period of time after obtaining possession, provided such Holder seeks possession with diligence through a receiver or, if not possible, then by nonjudicial foreclosure or deed in lieu of foreclosure. The Holder shall not be obligated by the provisions of this Agreement to construct or complete the Project or any portion thereof or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement be construed so to obligate such Holder; provided, however, that (i) nothing in this Agreement shall be deemed to permit or to authorize such Holder to devote the Project or any portion thereof to any uses or to construct any improvements thereon other than those uses and improvements provided for or authorized in this Agreement and (ii) such Holder shall not undertake or continue the construction or completion of the

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June 26, 2023

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improvements comprising the Project beyond the extent necessary to conserve or to complete the same without assuming Developer's obligations hereunder. Any Holder completing the Project shall have and be subject to all of the rights and obligations of Developer set forth in this Agreement, including the right to City's issuance of a Certificate of Completion for the Project,and provided, further, any Holder that acquires the Property through a foreclosure action or deed in lieu of foreclosure shall take the Property subject to the City Regulatory Agreement and this Section 4.2, which City Regulatory Agreement shall require that the Property shall be used for affordable housing purposes in perpetuity.5. Development of the City Property.5.1 Scope of Development.(a) The Project. Developer shall use the City Property to develop the Projecton the Site in substantial compliance with the Scope of Development attached hereto as Attachment 3.(b) Schedule of Performance. The Project shall be developed in accordancewith this Section as set forth in the Schedule of Performance attached as Attachment 4, subject to Section 8.2 (Force Majeure Delays).(c) Entitlement Approvals. Developer shall be responsible for submitting tothe City applications necessary to develop and operate the Project. In conjunction with the its proposed relocation plan for existing tenants of the HIP Property that identifies the relocation assistance benefits such tenants will be paid.(d) Compliance with Environmental Laws; City Discretion Reserved. ThisAgreement is subject to completion and approval or certification, as applicable, of environmental review in accordance with CEQA and its implementing regulations (the CEQA Guidelines, 14 CCR § 1500 et seq.). This Agreement shall be conditioned upon the determination to proceed with, modify or cancel its participation in the Project as may be necessary to mitigate or avoid environmental effects as defined by CEQA. This condition shall be deemed to have been satisfied upon the adoption of a Mitigated Negative Declaration, or the certification of an Environmental Impact Report. Nothing in this Agreement shall obligate the City to approve the Project, nor does it foreclose the City from using its discretion to modify the Project as may be needed to avoid or mitigate environmental effects to comply with CEQA.(e) Post-Close of Escrow Obligations. Following the Close of Escrow andfollowing tasks as set forth in the Schedule of Performance:(i) The Developer shall provide the City Manager a comprehensivedevelopment and construction cost budget for the Projectapproval, which shall not be unreasonably withheld or conditioned.

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June 26, 2023

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(ii) The Developer shall record any lot merger documents necessary tocreate the Site as one parcel from the City Property and the HIP Property within 90 days following acquisition of the City Property.(iii) The Developer shall provide the City Manager a copy of a fullyexecuted construction contract, between Developer and General Contractor, for the construction of the Project, which shows an amount due to the General Contractor that is not greater than the development and construction cost budget and the amount of debt and equity funds committed for the Project. "General Contractor" means the person or entity that Developer hires to construct the Project.(iv) Developer shall obtain all permits and governmental approvalsrequired for the construction of the Project and pay all fees therefor when due and owing.(v) Developer shall relocate existing tenants from the HIP Propertyand provided relocation assistance in accordance with the HIP Property Relocation Plan inadvance of commencing demolition or construction on the HIP Property.5.2 Cost of Construction. Unless otherwise expressly stated herein, all of the costs of planning, designing, developing and constructing the Project and all applicable improvements on the Site, and any improvements required by City conditions of approval, shall be borne solely by Developer. Notwithstanding the foregoing, City agrees that Developer will receive disbursements of the City Loan.5.3 Insurance Requirements. Developer shall obtain and maintain or shall cause its contractor to obtain and maintain, until the issuance of the final Certificate of Completion byCity, a commercial general liability policy in the amount of Two Million Dollars ($2,000,000) per occurrence, and a comprehensive automobile liability policy in the amount of One Million Dollars ($1,000,000) per occurrence, or such other policy limits as City may reasonably approve, including contractual liability, as shall protect Developer and City from claims for such damages, and which policy shall be issued by an "A" rated insurance carrier. Such policy or policies shall be written on an occurrence form. Developer shall also furnish or cause to be furnished to City evidence reasonably satisfactory to City that Developer and any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by City setting forth the general provisions of the insurance coverage. This countersigned certificate shall include City and its officers, employees, agents, representatives and volunteers as additionally insured Parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by Developer shall be primary insurance and not be contributing with any insurance maintained by City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of City.

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June 26, 2023

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5.4 Certificate of Completion. Promptly after completion of all construction and development required by this Agreement to be completed by Developer upon the Site (the "Improvements") in conformity with this Agreement, City shall furnish Developer with the "Certificate of Completion" upon written request by Developer. City shall not unreasonably withhold any such Certificate of Completion. The Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the Site and the Certificate of Completion shall so state. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of the County. If City refuses or fails to immediately furnish a Certificate of Completion after a written request by Developer, City shall, within ten (10) days of a written request provide Developer with a detailed written analysis, which identifies each and every reason why the City refused or failed to furnish a Certificate of Completion. The statement shall also contain City's opinion of all the actions that Developer must undertake to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, or other minor items relating to the completion of construction that are unrelated to public health and safety issues which will be determined at the sole discretion of the City, City will issue its Certificate of Completion upon the posting of a bond or other security acceptable to City in City's reasonable discretion, in an amount representing a fair value of the work not yet completed. A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof, nor is it evidence of compliance with laws or permits. A Certificate of Completion as set forth herein is not a notice of completion as referred to in the California Civil Code Section 3093.5.5 Compliance With Laws. Developer shall carry out the design and construction of the Project in conformity with all applicable laws, including all applicable state labor standards and development standards.6. Covenants and Restrictions.6.1 Use of City Property. Developer agrees to devote, use, operate, and maintain the Project in accordance with this Agreement. City's willingness and lawful authority to enter into this Agreement arises from Developer's agreed use of the Site (i.e., Developer's agreement to construct and to implement the Project).6.2 Maintenance. Following issuance of the Certificate of Completion, Developer shall maintain or cause to be maintained the interiors and exteriors of the Project as required by the City Regulatory Agreement.6.3 Nondiscrimination. Developer herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall Developer itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Project.

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7. Default and Remedies.7.1 Default Remedies. Subject to the extensions of time set forth in Section 8.2 ofthis Agreement, failure by either Party to perform any action, condition, or covenant required by this Agreement within the time periods provided herein, including the events and timeframes contained in Attachment 4, Schedule of Performances, following written notice and failure to cure as described herein, constitutes a "Default" under this Agreement unless defined otherwise within this Agreement. A Party claiming a default shall give written Default Notice (the "Default Notice") to the other Party specifying and detailing the particular default. The claimant shall not institute any proceeding against any other Party, and the other Party shall not be in default if a Party, within thirty (30) days from receipt of a Default Notice, cures such default, or if the nature of such default is that it cannot reasonably be expected to be cured within such thirty (30) day period, then the claimant shall not institute any proceeding against any other Party and the other Party shall not be in default if the Party receiving the Default Notice promptly commences to cure the default and thereafter completes such cure, correction or remedy with reasonable diligence. City hereby agrees that any cure of any default that is made or tendered by the investor limited partners or lenders of Developer shall be deemed to be a cure by Developer and shall be accepted or rejected on the same basis as if made or tendered by Developer. Upon expiration of an applicable Default Notice cure period, the non-defaulting Party may terminate this Agreement and pursue any and all remedies at law or in equity.7.2 Termination by Any Party. Prior to the Close of Escrow, any Party shall have the right to terminate this Agreement, by providing written notice to the other Parties, in the event of a failure of any Condition Precedent to the Close of Escrow as set forth in Section 3.10 of this Agreement, provided that such condition is for the benefit of and such failure is outside the control of the Party seeking to terminate this Agreement. Upon such termination, neither the City nor Developer shall have any further rights against or liability to the other under this Agreement, except for indemnification rights that survive termination of this Agreement.7.3 Termination by Developer. In the event Developer is not in Default under thisAgreement, Developer may terminate this Agreement by written notice to City (and pursue its remedies for Default, if applicable) if any of the following events occur:(a) City does not tender title to the City Property pursuant to the Grant Deedin the manner and condition and by the date provided in this Agreement, or(b) Developer's Conditions Precedent are not satisfied on or before the timerequired by this Agreement; or(c) Default of City before the Outside Date that is not cured within the timeset forth herein after written demand by Developer.7.4 Termination by City.(a) In the event City is not in Default under this Agreement, City mayterminate this Agreement (subject to the notice and cure provisions set forth in Section 7.1) bywritten notice to Developer (and pursue its remedies for Default, if applicable, including pursuing any and all other legal remedies it may have and/or its power of termination as set forth

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in Section 7.5 below) in the event of a default by a Developer or failure of any Condition Precedent, including but not limited to the following: (i) Developer fails to satisfy any Condition Precedent to the Close of Escrow within the time established therefore in this Agreement; or (ii) Developer (or any approved successor in interest) assigns or City Property or any portion thereof or interest therein, or this Agreement or any portion hereof, except as permitted by this Agreement; or (iii) there is substantial change in the ownership of Developer, or with respect to the identity of the parties in control of a Developer, or the degree thereof contrary to the provisions of Section 8.3(a) of this Agreement; or (iv) there is any other material default by Developer under the terms of this Agreement which is not cured within the time provided herein. (b) After the Close of Construction Financing but before the issuance of the Certificate of Completion, the City shall have the right to terminate this Agreement, in the event any of the following defaults shall occur: (i) Developer fails to commence construction of the Project as required by this Agreement and such breach is not cured within the time provided in Section 7.1 of this Agreement, provided that such Developer shall not have obtained an extension or postponement to which such Developer may be entitled pursuant to Sections 8.2 and 8.6 herein; or (ii) Developer abandons or substantially suspends construction of the improvements and such breach is not cured within the time provided in Section 7.1 of this Agreement, provided Developer has not obtained an extension or postponement to which such Developer may be entitled to pursuant to Sections 8.2 and 8.6 herein; or (iii) Developer assigns or attempts to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer of their portion of the City Property, or any part thereof, in violation of this Agreement, and such breach is not cured within the time provided in Section 8.3(a) of this Agreement; or (iv) Developer otherwise materially breaches this Agreement, and such breach is not cured within the time provided in Section 7.1 of this Agreement. 7.5 City Power of Termination and Right of Reverter. The Parties agree that the development of the Site for the provision of affordable housing, as provided in this Agreement and the City Regulatory Agreement, is a condition subsequent, to which the fee simple estate in the City Property granted to the Developer by the City is subject. If the Developer violates this Agreement , subject to applicable notice and cure periods, the City shall have the right, in its sole and absolute discretion, in addition to any other rights and remedies granted in this Agreement or the City Regulatory

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Agreement, to exercise a power of termination as described in California Civil Code Section 885.010 or in accordance to any pertinent provision within Chapter 5, Title 5, Part 2, Division 2 of the California Civil Code, to terminate and revest in the City the estate in the City Property previously conveyed to Developer pursuant to this Agreement and to re-enter and take possession of the City Property with any improvements thereon. Notwithstanding anything to the hundred eighty days to cure any violation that tribefore City shall exercise such rights. (a) Upon the City's exercise of its power of termination, the Developer or its successors or assigns shall convey by grant deed to the City title to the City Property, as specified in the City's notice pursuant to Section 7.4(a), and all improvements thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the property owner and a notary in a manner suitable for recordation. The City may enforce its rights and remedies pursuant to Section 7.5 by any lawful means, including but not limited to breach of contract, injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. (b) The City shall agree to subordinate its power of termination and right of reverter to any quirements shall not be subject to such subordination agreement. (c) Certificate of Completion, The Parties agree to execute reasonable documentation as may be appropriate to evidence such termination; provided, however, that the termination of the right of reverter shall be self-executing upon issuance not be contingent on the execution of further documentation. 7.6 Acceptance of Service of Process. In the event that any legal action is commenced by Developer against City or City under this Agreement, service of process on City or City shall be made by personal service upon the City Clerk in such other manner as may be provided by law. In the event that any legal action is commenced by City against Developer under this Agreement, service of process on Developer shall be made by personal service upon the President of Eden Housing, or in such other manner as may be provided by law. 7.7 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party. 7.8 Inaction Not a Waiver of Default. Any failures or delays by either Party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

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8. General Provisions. 8.1 Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice"), which either Party may desire to give to the other Party under this Agreement must be in writing and may be given by the means described below to the Party to whom the Notice is directed at the address of the Party as set forth below, or at any other address as that Party may later designate by Notice. City: City of San Carlos 600 Elm Street San Carlos, CA 94070 Attention: City Manager Developer: Cherry Street Commons L.P. c/o Eden Housing Inc. 22645 Grand Street Hayward, California 94541 Copy to: HIP Housing Development Corporation, Inc. 800 South Claremont Street, Suite 210 San Mateo, California 94402 Any written notice, demand or communication sent to the address set forth above or as later provided by a Party shall be deemed effective and received as of the date of delivery, the date delivery was refused, or the date returned as undeliverable if sent by one of the following methods: (1) personal delivery with a written receipt therefore; (2) certified mail, return receipt requested; or (3) nationally recognized overnight delivery service (i.e., FedEx, UPS, or DHL) with a delivery receipt. Copies of all notices delivered by City to Developer after the Close of Escrow shall be delivered to Developer's investor limited partner at a notice address to be provided to City in writing. 8.2 Force Majeure Delays; Extension of Times for Performance. All performance deadlines in this Agreement shall be extended to the extent of delays caused beyond the control or without the fault of the Party claiming an extension of time to perform, including, without limitation, the following: war; acts of terrorism; insurrection; strikes; lockouts; labor troubles; inability to procure materials; power failures; riots; floods; earthquakes; fires; other natural disasters; casualties; acts of God; epidemics; pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; governmental moratoria; initiation of condemnation proceedings by any governmental agency; and unreasonable acts or unreasonable failures to act of City or any other public or governmental Agency or entity (determined considering the normal processes and response times of City and such governmental entities, which shall be deemed reasonable and not force majeure delays). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay only and shall commence to run from the time of the

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25 SF #4860-7211-7805 v1
commencement of the cause, and only if notice by the Party claiming such extension is sent to the other Party within thirty (30) days after the commencement of the cause. 8.3 Transfers of Interest in Site or Agreement. (a) Prohibition. The qualifications and identity of Developer are very important and of particular concern to City. Because of those qualifications and identity, City has entered into this Agreement with Developer. Except as provided in Section 8.3.b, below, no voluntary or involuntary successor in interest of Developer shall, before the issuance of the Certificate of Completion, (i) acquire any rights or powers under this Agreement, (ii) make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the City Property or Project without the prior written approval of the City Manager, in its reasonable discretion. be amended and restated to admit an investor entity as the limited partner of the Developer, and entities affiliated with Developer and the limited partner may be additional general or limited partners of the Developer. The amendment and restatement of the limited partnership agreement of the Developer and the admission of the investor limited partner will not require approval by City so long as: (a) tan affiliate of Eden Housing and/or HIP remains as the managing general partner of the Developer, and (c) the Developer remains bound by this Agreement. (b) Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or conveyance of the City Property or Project, or any part thereof, shall not be required in connection with any of the following: (i) The granting of reasonable easements or permits to facilitate construction of the Project. (ii) The granting of security interests in the Project and this Agreement to a Holder for a loan permitted by this Agreement, and the transfer of title by foreclosure, deed or other conveyance in lieu of foreclosure in connection with such security interest. (iii) The conveyance of any interest in the Project after the issuance of a Certificate of Completion by City. (iv) The admission of an affiliate of Eden Housing and/or HIP to the Dev partnership as managing general partner. (v) The admission of limited partners to the partnership in connection with tax credit financing, and any subsequent transfer of such limited partnership interests, including any transfer of stock or equity in the limited partners that does not change management or operational control of the Project, with no material change in beneficial ownership (with the exception of any conveyance to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit) and which constitutes a tax-free transaction under Federal income tax law and California real estate transfer tax.

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26SF #4860-7211-7805 v1
(vi) The removal for cause of any general partner in the Developer by alimited partner of the Developer, and the replacement thereof.(vii) The lease for occupancy of all or any part of the Project inaccordance with this Agreement and the City Regulatory Agreement.8.4 Non-Liability of Officials and Employees. No officer, attorney, or employee of City shall be personally liable to the Developer or any successor-in-interest in the event of any default or breach by City or for any amount which may become due to the Developer or to its successor or for breach of any obligation of the terms of this Agreement. No officer or employee of Developer shall be personally liable to the City in the event of any default or breach by Developer for any amount which may become due to the City, or for breach of any obligation of the terms of this Agreement.8.5 Relationship Between Parties. It is hereby acknowledged that the relationship between City on the one hand and Developer on the other hand is not that of a partnership or joint venture and that City and Developer shall not be deemed or construed for any purpose to be the agent of the other.8.6 Approvals, Actions and Authority of the City Manager. The City Manager shall have the authority to make approvals, issue interpretations, waive minor provisions, enter into minor amendments of this Agreement, and sign and approve escrow documents and additional documents, on behalf of City, respectively, so long as such actions do not materially or substantially change the uses or development permitted on the Site, or materially or substantially add to the costs incurred or to be incurred by City as specified herein. Such actions which may be approved include extensions of time to perform as specified in the Schedule of Performance, extensions of the Outside Date.8.7 Counterparts. This Agreement may be signed in multiple counterparts which,when signed by all Parties, shall constitute a binding agreement.8.8 Integration. This Agreement contains the entire understanding between theParties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. This Agreement supersedes the LOI, and such LOI shall have no further force or effect. Each Party is entering this Agreement based solely upon the representations set forth herein and upon each Party's own independent investigation of any and all facts such Party deems material. This Agreement includes all Attachments, which are incorporated herein and together with the Agreement constitute the entire understanding and agreement of the Parties.8.9 No Real Estate Brokerage Commissions. City and Developer each represent andwarrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with this transaction, and Developer and City agree to defend and hold each other harmless from any claim to any such commission or fee resulting from any action on its part.8.10 Attorneys' Fees. In any action between the Parties to interpret, enforce, reform, modify, rescind or that otherwise relates to any of the terms or provisions of this Agreement, the

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27SF #4860-7211-7805 v1
prevailing Party in the action shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, expert fees, litigation costs and reasonable attorneys' fees.8.11 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise.8.12 Interpretation and Applicable Law. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. This Agreement shall be interpreted as though prepared jointly by all Parties. The laws of the State of California shall govern the interpretation and enforcement of this Agreement.8.13 No Waiver. A waiver by a Party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other Parties shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement.8.14 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party.8.15 Severability. If any term, provision, condition or covenant of this Agreement or its application to any Party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law.8.16 Legal Advice. Each Party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.8.17 Time of Essence. Time is of the essence with respect to the performance by City and Developer of each and every obligation and condition of this Agreement in which time is a factor.8.18 Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful or

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appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 8.19 Conflicts of Interest. Developer acknowledges that no officer or employee of City has or shall have any direct or indirect financial interest in this Agreement nor shall Developer enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. Developer warrants that Developer has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement. [Signature Page Follows.]

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DDA Signature Page SF #4860-7211-7805 v1
IN WITNESS WHEREOF, Developers and City have executed this Agreement as of the Effective Date. CITY: CITY OF SAN CARLOS, a California municipal corporation By: _______________________________ Jeff Maltbie, City Manager Attest: _______________________________ Crystal Mui, City Clerk Approved as to Form: _______________________________ Greg Rubens, City Attorney BORROWER: Cherry Street Commons, L.P. a California limited partnership By: Eden Cherry Street LLC a California limited liability company, its co-general partner By: Eden Investments, Inc. a California nonprofit public benefit corporation, its sole member/manager By: ____________________________ Andrea Osgood, VP of Real Estate Development By: HIP Housing Development Corporation, Inc., a California nonprofit public benefit corporation, its co-general partner By: ____________________________ Name: Kate Comfort Harr

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DDA Signature Page SF #4860-7211-7805 v1
Its: Executive Director

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1.1 SF #4860-7211-7805 v1
ATTACHMENT 1 City Property Legal Description Portion of Lot 6, Block 17, as delineated upon that certain Map entitled "SAN CARLOS, SAN MATEO CO., CAL.", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on September 4th, 1888 in Book "E" of Maps, at Page 19 and copied into Book 1 of Maps at Page 76, more particularly described as follows: Commencing at the most Southerly corner of said Lot 6, as same appears on the Map above mentioned; thence Northwesterly on and along the Southwesterly line of said Lot, 100 feet to the most Westerly corner thereof; thence Northeasterly on and along the Northwesterly line of said Lot, 50 feet; thence at a right angle Southeasterly 100 feet to the Northwesterly line of Cherry Street; thence Southwesterly on and along the Northwesterly line of Cherry Street, 50 feet to the point of commencement. Excepting therefrom a 10 foot strip of land described as follows: Commencing at the most Southerly corner of said Lot 6, as said appears on the Map above mentioned; thence Northwesterly on and along the Southwesterly line of said Lot, 100 feet to the most Westerly corner thereof; thence Northeasterly on and along the Northwesterly line of said Lot, 10 feet; thence at a right angle Southeasterly 100 feet to the Northwesterly line of Cherry Street; thence Southwesterly on and along the Northwesterly line of Cherry Street, 10 feet to the point of commencement. A.P.N. 050-132-100 AND All that real property situated in the City of San Carlos, County of San Mateo, State of California, - June 23, 2016 in Book 140 of Maps, at Pages 87 to 93 inclusive, in the Office of the County Recorder of San Mateo County, more particularly described as follows: COMMENCING at the most Southerly corner of that parcel of land as described in that certain Grant Deed recorded November 13, 2002 as Document Number 2002-233661, Official Records of San Mateo County; thence along the Northwesterly line of Cherry Street as shown on said Map, as described in that certain Grant Deed recorded September 3, 1993 as Document Number 93149944, Official Records of San Mateo County, on the Northwesterly line of said parcel of land (Document Number 93149944), said point being the POINT OF BEGINNING; thence continuing boundary of said LOT 4; thence along said exterior boundary the following three (3) courses: 1) East, 35.00 feet to the most Northerly corner of said parcel of land (Document Number 2002- 19.99 feet to the most Westerly corner of said

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1.2SF #4860-7211-7805 v1
parcel of land (Document Number 93149944); thence along the Northwesterly line of last said 17.01 feet to the POINT OF BEGINNING.A.P.N. 050-680-040

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2.1SF #4860-7211-7805 v1
ATTACHMENT 2HIP Property Legal DescriptionThe land referred to is situated in the County of San Mateo, City of San Carlos, State of California, and is described as follows:The Southwesterly 40 feet, front and rear measurements of LOT 7-A, and the Northeasterly 30feet, front and rear measurements of LOT 7-B, BLOCK 17, as delineated upon that certain Mapentitled "AMENDED MAP OF THE TOWN OF SAN CARLOS, SAN MATEO COUNTY, CAL.", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on October 7th, 1912 in Book 8 of Maps, at Pages 25 and 26.APN: 050-132-110

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3.1SF #4860-7211-7805 v1
ATTACHMENT 3Scope of DevelopmentPreliminary plans for the project include demolition of the existing six-unit affordable housing structure on the HIP Property and the vacant office building on the City Property. The alleyway would then be relocated to the northeast boundary of the project site to allow for a straight path of travel all the way from San Carlos Avenue to Cherry Street. On the rest of the project site would be constructed a five-story 100% affordable housing project made up of approximately 33 units (but in no event fewer than at least 30 units) ranging from one to three bedrooms to be rented at would also include parking on the ground floor, a lobby, bike storage, communal laundry facilities, and gathering spaces including a community room, kitchen for events, and a courtyard with a playground. Units will include full size ovens and ranges with four burners. Current tenants of the existing six-unit structure will be provided relocation assistance by Cherry Street Commons. Prior to receiving approval of project entitlements, a Relocation Plan must be submitted to the City for its review and approval. This plan will identify the relocation assistance benefits that will be paid to the current tenants and outlines their rights to return to the property upon completion of the new building, consistent with California Relocation Law and the Housing Crisis Act.Upon final City approval of the Project entitlements, the Project plans and conditions of approval, if any, shall be incorporated into this scope of development by this reference.

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4.1SF #4860-7211-7805 v1
ATTACHMENT 4Schedule of PerformanceMILESTONESOUTSIDE DEADLINE1.Open Escrow (Escrow Period) April 1, 20231.Entitlements Approved with CEQA ComplianceJanuary 1, 20242.Close of Escrow April 1, 20243.Obtain Building Permits January 1, 20264.Close Construction Financing January 1, 20265.Construction Commencement April 1, 20266.Completion of Project and Issuance of Certificate of CompletionJanuary 1, 2028

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ATTACHMENT 5Form of City Regulatory Agreement

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1 RECORDING REQUESTED BYAND WHEN RECORDED MAIL TO:City of San Carlos600 Elm StreetSan Carlos, CA 94070Attn: City ManagerEXEMPT FROM RECORDING FEES PERGOVERNMENT CODE §§6103, 27383Space above this line for APN: [TBD]BELOW MARKET RATE HOUSING AGREEMENTAND DECLARATION OF RESTRICTIVE COVENANTS(Cherry Street Affordable Housing Project)ThisBELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS Agreemententered into as of , 20__Effective Dateby and between the CITY OF SAN CARLOS, a municipal corporation (the CityOwnerThe City and Developer may be referred to individuallyPartyPartiesRECITALSA. Owner is the owner of that certain real property located at 1232 and 1244 CherryStreet, San Carlos, CaliforniaPropertyas more particularly described in Exhibit A, attached hereto and incorporated herein by this reference.B. Owner applied to redevelop the Property with a new multifamily residential projectwith thirty three (33) rental units and associated open space, circulation, parking and infrastructure improvements (collectively, the ProjectC. On _________ __, 2023, after a duly noticed public hearing, the City Councilapproved that certain Disposition, Development, and Loan Agreement by and between the City and the OwnerDDLAD. The DDLA requires the Owner to develop the Project and to make thirty two (32)BMRearning up to 120% of area median incomeBMR Rental UnitsThe BMR Rental Units consist of seven units affordable to households earning up to 50% of area median incomeVery Low Income Unitsseven units (7) to households earning up to 60% of area median incomeLow Income Unitsand eighteen (18) units to households earning up to 120% of area median incomeModerate Income Units.

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2 NOW, THEREFORE, the Parties hereto agree as follows. The recitals are incorporated into this Agreement by this reference.1.CONSTRUCTION OF THE PROJECT.1.1Construction of the Project. Owner agrees to construct the Project in accordance with the DDLA, the San Carlos Municipal Code and all other applicable state and local building codes, development standards, ordinances and zoning ordinances.1.2City and Other Governmental Permits. Before commencement of the Project, Owner shall secure or cause its contractor to secure any and all permits which may be required by the City or any other governmental agency affected by such construction, including without limitation building permits. Owner shall pay all necessary fees and timely submit to the City final drawings with final corrections to obtain such permits; City staff will, without incurring liability or expense therefore, process applications in the ordinary course of business for the issuance of building permits and certificates of occupancy for construction that meets the requirements of the San Carlos Municipal Code, and all other applicable laws and regulations.1.3Compliance with Laws. Owner shall carry out the design, construction and operation of the Project in conformity with all applicable laws, including all applicable state labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the San Carlos Municipal Code, and allapplicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.2.OPERATION OF THE BMR UNITS2.1Affordability Period. The Property shall be subject to the requirements of this Agreement from the Effective Date in perpetuity. The duration of this requirement shall be known Affordability Period2.2Maintenance. Owner shall comply with every condition of the DDLA applicable to the Project and shall, at all times, maintain the Project and the Property in good repair and working order, reasonable wear and tear excepted, and in a safe and sanitary condition, and from time to time shall make all necessary and proper repairs, renewals, and replacements to keep the Project and the Property in a good, clean, safe, and sanitary condition.2.3Monitoring and Recordkeeping. Throughout the Affordability Period, Owner shall maintain sufficient records to demonstrate compliance with this Agreement and the DDLA.City shall have the right to inspect the books and records of Owner and its rental agent or bookkeeper upon reasonable notice during normal business hours. Representatives of the City shall be entitled to enter the Property, upon at least 48-hour prior written notice, which can be provided via email, to monitor compliance with this Agreement, to inspect the records of the Project with respect to the BMR Rental Units, and to conduct, or cause to be conducted, an independent audit or inspection of such records. Owner agrees to cooperate with the City in making the Property available for such inspection or audit. Owner agrees to maintain records in businesslike manner, and to maintain such records for Affordability Period.

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3 2.4Non-Discrimination Covenants. Owner covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease,transfer, use, occupancy, tenure, or enjoyment of the Property, nor establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith.a. In deeds, the following language shall appear:(1) Grantee herein covenants by and for itself, its successors andassigns, and all persons claiming under or through it, that there shall be nodiscrimination against or segregation of a person or of a group of personson account of any basis listed in subdivision (a) or (d) of Section 12955 ofthe Government Code, as those bases are defined in Sections 12926,12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section12955, and Section 12955.2 of the Government Code, in the sale, lease,sublease, transfer, use, occupancy, tenure or enjoyment of the propertyherein conveyed nor shall the grantee or any person claiming under orthrough the grantee establish or permit any such practice or practices ofdiscrimination or segregation with reference to the selection, location,number, use or occupancy of tenants, lessees, subtenants, sublessees orvendees in the property herein conveyed. The foregoing covenant shall runwith the land.(2) Notwithstanding paragraph (1), with respect to familial status,paragraph (1) shall not be construed to apply to housing for older persons,as defined in Section 12955.9 of the Government Code. With respect tofamilial status, nothing in paragraph (1) shall be construed to affect Sections51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating tohousing for senior citizens. Subdivision (d) of Section 51 and Section 1360of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of theGovernment Code shall apply to paragraph (1).b. In leases, the following language shall appear:(1)personal representatives and assigns, and all persons claiming under thelessee or through the lessee, that this lease is made subject to the conditionthat there shall be no discrimination against or segregation of any person orof a group of persons on account of race, color, creed, religion, sex, sexualorientation, marital status, national origin, ancestry or disability in theleasing, subleasing, transferring, use, occupancy, tenure or enjoyment of theproperty herein leased nor shall the lessee or any person claiming under orthrough the lessee establish or permit any such practice or practices of

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4 discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.(2)Notwithstanding paragraph (1), with respect to familial status,paragraph (1) shall not be construed to apply to housing for older persons,as defined in Section 12955.9 of the Government Code. With respect tofamilial status, nothing in paragraph (1) shall be construed to affect Sections51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating tohousing for senior citizens. Subdivision (d) of Section 51 and Section 1360of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of theGovernment Code shall apply to paragraph (1).c. In contracts pertaining to management of the Project, the following language, orsubstantially similar language prohibiting discrimination and segregation shall appear:(1) There shall be no discrimination against or segregation of anyperson or group of persons on account of any basis listed in subdivision (a)or (d) of Section 12955 of the Government Code, as those bases are definedin Sections 12926, 12926.1, subdivision (m) and paragraph (1) ofsubdivision (p) of Section 12955, and Section 12955.2 of the GovernmentCode, in the sale, lease, sublease, transfer, use, occupancy, tenure orenjoyment of the property nor shall the transferee or any person claimingunder or through the transferee establish or permit any such practice orpractices of discrimination or segregation with reference to selection,location, number, use or occupancy of tenants, lessee, subtenants,sublessees or vendees of the land.(2) Notwithstanding paragraph (1), with respect to familial status,paragraph (1) shall not be construed to apply to housing for older persons,as defined in Section 12955.9 of the Government Code. With respect tofamilial status, nothing in paragraph (1) shall be construed to affect Sections51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating tohousing for senior citizens. Subdivision (d) of Section 51 and Section 1360of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of theGovernment Code shall apply to paragraph (1).2.5Subordination. This Agreement shall be recorded in the Official Records of the County of San Mateo and shall run with the land. The City agrees that the City will not withhold consent to reasonable requests for subordination of this Agreement for the benefit of lenders providing financing for the Project, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights.

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5 3. AFFORDABILITY REQUIREMENTS. 3.1 BMR Rental Units. Owner agrees to make available, restrict occupancy to, and lease not less than thirty two (32) BMR Rental Units to Qualifying Households, as hereinafter defined, at an affordable rent, pursuant to the terms set forth below. a. Until the 55th anniversary of the receipt of a Certificate of Completion (as defined in the DDLA) for the Project, the Project shall include no fewer than seven Very Low Income Units, seven Low Income Units, and eighteen Moderate Income Units. b. After the 55th anniversary of the receipt of a Certificate of Completion (as defined in the DDLA) for the Project, the Project shall include no fewer than thirty two Moderate Income Units. 3.2 Qualifying Households. Qualifying Householdsse households with incomes as follows: a. Very Low Income Unit: means units restricted to households with AMImedian income for San Mateo County, California, adjusted for actual household size, as published from time to time by the State of California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations or successor provision. Qualifying Households shall continue to qualify unless at the time of eligibility requirements, then the tenant shall no longer be qualified. Upon Ownerunit shall no longer be deemed a Very Low Income Unit, and Owner shall either (1) make the next available unit, which is comparable in terms of size, features and number of bedrooms, a Very Low Income Unit, or take other actions as may be necessary to ensure that the total required number of Very Low Income Units are rented to Qualifying Households, or (2) if the the tenant as a Low Income Household or Moderate Income Household, the tenant shall be allowed to remain in the unit at a Low Income or Moderate Income rent, as applicable. If the tenant originally qualified as a Very Low will be increased as applicable and the Owner shall rent the next available unit to a Very Low Income Household. Owner shall notify the City annually if Owner substitutes a different unit for one of the designated Very Low Income Units pursuant to this paragraph. b. Low Income Unit: means units restricted to households with incomes of not more than fifty percent (60%) of AMI. Qualifying Households shall continue to qualify unle

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6 income exceeds the Low Income eligibility requirements, then the tenant household is no longer qualified, the unit shall no longer be deemed a Low Income Unit, and Owner shall either (1) make the next available unit, which is comparable in terms of size, features and number of bedrooms, a Low Income Unit, or take other actions as may be necessary to ensure that the total required number of Low Income Units are rented to Qualifying Households, or (2) if income that would qualify the tenant as a Moderate Income Household, the tenant shall be allowed to remain in the unit at a Moderate Income rent, as applicable. If the tenant originally qualified as a Low Income Household, to Moderate Income rent upon the Owner shall rent the next available unit to a Low Income Household.Owner shall notify the City annually if Owner substitutes a different unit for one of the designated Low Income Units pursuant to this paragraph.c.Moderate Income Unit: means units restricted to households withincomes of not more than one hundred twenty percent (120%) of AMI.Qualifying Households shall continue to qualify unless at the time ofQualifying Householdeligibility requirements, then the tenant shall no longer be qualified. UpontheTenant shall be notified they are no longer eligible for the Moderate IncomeUnit and upon the later of siendlease term, the Tenant shall be required to vacate the Moderate Income Unit.3.3Income Verification and Annual Report.On or before July 1 of each year, commencing with the calendar year that the first residential unit in the Project is rented to a tenant, and annually thereafter, Owner shall obtain from each household occupying a BMR Rental Unitand submit to the City an income computation and certification form, completed by a tenant of such unit, which shall certify that the income of each Qualifying Household is truthfully set forth in the income certification form, in the form proposed by the Owner and approved by the Deputy Annual Reportch household leasing a BMR Rental Unit meets the income and eligibility restrictions for the BMR Rental Unit by taking by taking the following steps as a part of the verification process: (a) obtain a minimum of the three (3) most current pay stubs for all adults age eighteen (18) or older; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar search; (d) obtain the three (3) most current savings and checking account bank statements; (e) obtain an income verification form from the applicant's current employer; (f) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (g) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of tenantincome certifications shall be available to the City upon request. The Annual Report shall, at a minimum, include the following information for each BMR Rental Unit: unit number, number of bedrooms, current rent and other charges, dates of any vacancies during the reporting period, number of people residing in the unit, total household Gross Income, and lease commencement

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7 and terminpolicies, communications with the tenants and maintenance of the BMR Rental Unit, including a statement of planned repairs to be made and the dates for the repairs.3.4Affordable Rent. The maximum Monthly Rent, defined below, chargeable for the BMR Rental Units and paid shall be as follows:a.Very Low Income Household: shall be 1/12thof 30 percent of not toexceed 50 percent of the AMI. The Monthly Rent for a Very Low IncomeUnit rented to a Very Low Income Household and paid by the householdshall be based on an assumed average occupancy per unit of one person perstudio unit, 1.5 persons for a one- bedroom unit, 3 persons for a two-bedroom unit and 4.5 persons for a three- bedroom unit. If the Projectreceives an allocation of state or federal low-income housing tax creditsfrom the California Tax Credit Allocation CommitteeTCAC),affordable rent shall mean a rent that is consistent with the maximum TCACrent levels for Very Low Income Households.b.Low Income Household: shall be 1/12thof 30 percent of not to exceed60 percent of the AMI. The Monthly Rent for a Low Income Unit rented toa Low Income Household and paid by the household shall be based on anassumed average occupancy per unit of one person per studio unit, 1.5persons for a one- bedroom unit, 3 persons for a two-bedroom unit and 4.5persons for a three- bedroom unit. If the Project receives an allocation ofstate or federal low-income housing tax credits from TCAC, affordable rentshall mean a rent that is consistent with the maximum TCAC rent levels forLow Income Households.c.Moderate Income Household: shall be 1/12thof 30 percent of not toexceed 110 percent of the AMI. The Monthly Rent for a Very Low IncomeUnit rented to a Very Low Income Household and paid by the householdshall be based on an assumed average occupancy per unit of one person perstudio unit, 1.5 persons for a one- bedroom unit, 3 persons for a two-bedroom unit and 4.5 persons for a three- bedroom unit.Monthly Rentmade by the household for (a) use and occupancy of each BMR Rental Unit and land and facilities associated therewith, (b) any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits, (c) a reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above, and which are not paid directly by Owner, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone or internet service, which reasonable allowance for detached homes,apartments, condominiums and duplexes, and (d) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than Owner.

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8 3.5 Agreement to Limitation on Rents. Owner has received direct financial contributions from the City pursuant to the DDLA. Sections 1954.52(b) and 1954.53(a)(2) of the Costa-Hawkins Act provide that, where a property owner has received such assistance, certain provisions of the Costa-Hawkins Act do not apply if a property owner has so agreed by contract. Owner hereby agrees to limit Monthly Rent as provided in this Agreement in consideration of on the BMR Rental Units are in conformance with the Costa- Hawkins Act. Owner further warrants and covenants that the terms of this Agreement are fully enforceable. 3.6 Lease Requirements. No later than 180 days prior to the initial lease up of the BMR Rental Units, Owner shall submit a standard lease form to the City for approval by the City Manager or his/her designee. The City shall reasonably approve such lease form upon finding that such lease form is consistent with this Agreement and contains all of the provisions required pursuant to the DDLA. The City's failure to respond to Owner's request for approval of the standard lease form within thirty (30) business days of City's receipt of such lease, shall be deemed City's approval of such lease form. Owner shall enter into a written lease, in the form approved by the City, with each new tenant of a BMR Rental of a BMR Rental Unit. Each lease shall be for an initial term of not less than one year which may be renewed pursuant to applicable local and State laws, and shall not contain any of the provisions which are prohibited pursuant to the Guidelines, local, state and Federal laws. 4. DEFAULT AND REMEDIES 4.1 Events of Defaultunder this Agreement: there shall be a material breach of any condition, covenant, warranty, promise or representation contained in this Agreement and such breach shall continue for a period of thirty (30) days after written notice thereof to the defaulting party without the defaulting party curing such breach, or if such breach cannot reasonably be cured within such 30 day period, commencing the cure of such breach within such 30 day period and thereafter diligently proceeding to cure such breach; provided, however, that if a different period or notice requirement is specified for any particular breach under any other paragraph of Section 4 of this Agreement, the specific provision shall control. 4.2 Remedies. The occurrence of any Event of Default under Section 4.1 shall give the non-defaulting party the right to proceed with an action in equity to require the defaulting party to specifically perform its obligations and covenants under this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement, and the right to terminate this Agreement. 4.3 Obligations Personal to Owner. The liability of Owner under this Agreement to persons and entities shall look exclusively thereto for the satisfaction of obligations arising out of this Agreement or any other agreement securing the obligations of Owner under this Agreement. From and after the date of this Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to this Agreement, any agreement

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9 the Project), its partners, members, successors, transferees or assigns and each of their respective officers, directors, employees, partners, agents, heirs and personal representatives, as the case may be, in any action or proceeding arising out of this Agreement or any agreement securing the obligations of Owner under this Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding. No subsequent Owner of the Project shall be liable or obligated for the breach or default of any obligations of Owner under this Agreement on the part of any prior Owner. Such obligations are personal to the person who was the Owner at the time the default or breach was alleged to have occurred and such person shall remain liable for any and all damages occasioned thereby even after such person ceases to be the Owner. Each Owner shall comply with and be fully liable for all obligations the Owner hereunder during its period of ownership of the Project. 4.4 Force Majeureset forth below, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to causes beyond the control and without the fault of the party claiming an extension of time to perform, which may include, without limitation, the following: war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, assaults, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, materials or tools, acts or omissions of the other party, or acts or failures to act of any public or governmentaperformance of the City hereunder). An extension of the time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within 30 days of the commencement of the cause. 4.5 Fees. In addition to any other remedies provided hereunder or available pursuant to law, if either party brings an action or proceeding to enforce, protect or establish any right or remedy hereunder, the prevailing party shall be entitled to recover from the other party its costs of suit and reasonable attorneys' fees. This Section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute. 4.6 Remedies Cumulative. No right, power, or remedy given by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given by the terms of any such instrument, or by any statute or otherwise. 4.7 Waiver of Terms and Conditions. The City may, in its sole discretion, waive in writing any of the terms and conditions of this Agreement. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. 4.8 Non-Liability of City Officials and Employees. No member, official, employee or agent of the City shall be personally liable to Owner or any occupant of any BMR Unit, or any successor in interest, in the event of any default or breach by the City or for any amount which

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10 may become due to the Owner or its successors, or on any obligations under the terms of this Agreement. 4.9 Cure Rights. Notwithstanding anything to the contrary contained herein, City deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made or tendered by Owner. 5. GENERAL PROVISIONS 5.1 Time. Time is of the essence in this Agreement. 5.2 Notices. Unless otherwise indicated in this Agreement, any notice requirement set forth herein shall be deemed to be satisfied three days after mailing of the notice first-class United States certified mail, postage prepaid, or by personal delivery, addressed to the appropriate party as follows: Owner: Cherry Street Commons L.P. c/o Eden Housing Inc. 22645 Grand Street Hayward, California 94541 Copy to: HIP Housing Development Corporation, Inc. 800 South Claremont Street, Suite 210 San Mateo, California 94402 City: City of San Carlos 600 Elm Street San Carlos, CA 94070 Attention: City Manager Such addresses may be changed by notice to the other party given in the same manner as provided above. 5.3 Successors and Assigns. This Agreement constitutes a covenant and legal restriction on the Property and shall run with the land, provided the Project remains on the Property, and all of the terms, covenants and conditions of this Agreement shall be binding upon Owner and the permitted successors and assigns of Owner. 5.4 Intended Beneficiaries. The City is the intended beneficiary of this Agreement and shall have the sole and exclusive power to enforce this Agreement. It is intended that the City may enforce this Agreement in order to, satisfy its obligations to improve, increase and preserve affordable housing within the City, as required by the DDLA, and to provide that a certain percentage of new housing is made available at affordable housing cost. No other person or persons, other than the City and Owner and their assigns and successors, shall have any right of action hereon.

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11 5.5 Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 5.6 Governing Law. This Agreement and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. The venue for any action shall be the County of San Mateo. 5.7 Amendment. This Agreement may not be changed orally, but only by agreement in writing signed by Owner and the City. 5.8 Approvals. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. Where this Agreement requires an approval or consent of the City, such approval shall not be unreasonably withheld may be given on behalf of the City by the City Manager or his or her designee. The City Manager or his or her designee is hereby authorized to take such actions as may be necessary or appropriate to implement this Agreement, including without limitation the execution of such documents or agreements as may be contemplated by this Agreement, and amendments which do not substantially change the uses or restrictions hereunder, or substantially add to the costs of the City hereunder. 5.9 Indemnification. To the greatest extent permitted by law, Owner shall indemnify, defend (with counsel reasonably approved by City) and hold the City, its heirs, successors and Indemniteesany and all demands. losses, claims, costs and expenses, and any other liability whatsoever, including without limitation, reasonable Claimsarising directly or management, or operation of the Property and the Project or any failure to perform any obligation Section 5.9 shall not extend to Claims to the extent resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 5.9 shall survive the expiration or earlier termination of this Agreement, but only as to claims arising from events occurring during the Affordability Period. 5.10 Transfer and Encumbrance. 5.12.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (other than a lease of a BMR Rental unit on an approved form under Section 3.6 hereof to a qualified tenant as described in Section 3.7 hereof) of the whole or any part of any BMR Rental Unit, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of City, which shall not be unreasonably withheld. For purposes of this

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12 more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.5.12.2 Permitted Transfers. The prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; (ii) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Project or the Property, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; or (iii) transfers between entities owned or controlled by HIP Houisng or Eden Housing (as defined in the DDLA).5.12.3 Requirements for Proposed Transfers. The City may, in the exercise of its discretion, not to be unreasonably withheld, consent to a proposed Transfer of this Agreementand/or a BMR Rental Unit if all of the following requirements are met (provided however, therequirements of this Section 5.12.3 shall not apply to Transfers described in clauses (i), (ii), or (iii) of Section 5.12.2.(i)the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Owner under this Agreement.(ii) The Owner and the proposed transferee shall submit for City review andapproval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the BMR Rental Unit or this Agreement together with such documentation request.(iii) The proposed transferee shall expressly assume all of the rights andobligations of the Owner under this Agreement arising after the effective date of the Transfer and all obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume (iv) The Transfer shall be effectuated pursuant to a written instrumentsatisfactory to the City in form recordable in the Official Records.If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-request by Owner, the proposed Transfer shall be deemed approved. 5.13 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of any BMR Rental Unit shall be deemed to relieve the Owner or any other party from any obligation under this Agreement. This Section 5.12 shall not apply to Transfers described in clauses (i) and (ii) of Section 5.12.2.

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13 5.14 Recovery of City Costs. Owner shall reimburse City for all reasonable City costs, including but not limother legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year set forth above. SIGNATURES ON FOLLOWING PAGE(S).

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14 IN WITNESS WHEREOF, Owner and City have executed this Agreement as of the Effective Date. CITY: CITY OF SAN CARLOS, a California municipal corporation By: _______________________________ Jeff Maltbie, City Manager Attest: _______________________________ Crystal Mui, City Clerk Approved as to Form: _______________________________ Greg Rubens, City Attorney OWNER: Cherry Street Commons, L.P. a California limited partnership By: Eden Cherry Street LLC a California limited liability company, its co-general partner By: Eden Investments, Inc. a California nonprofit public benefit corporation, its sole member/manager By: ____________________________ Andrea Osgood, VP of Real Estate Development By: HIP Housing Development Corporation, Inc., a California nonprofit public benefit corporation, its co-general partner By: ____________________________ Name: Kate Comfort Harr Its: Executive Director

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15 Exhibit A Property Description

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SF #4860-7211-7805 v1
ATTACHMENT 6 Form of City Deed of Trust

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1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Carlos 600 Elm Street San Carlos, CA 94070 Attn: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 APN: [TBD] CONSTRUCTION DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (Cherry Street Affordable Housing Project) This CONSTRUCTION DEED OF TRUST, ASSIGNMENT OF RENTS AND Deed of Trustof ________________, 20__, by CHERRY STREET COMMONS, L.P., a California limited partnership Trustorto Old Republic Title Company Trusteethe CITY OF SAN CARLOS, a municipal corporation City. The Trustor, in consideration of the indebtedness and promises herein recited, and the trust herein created, irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee, right, title and interest now held or hereafter acquired in and to the property located in the City of San Carlos, County of San Mateo, State of California, described in the attached Exhibit A and more commonly known as: 1232 and 1244 Cherry Street, San Carlos, Property TOGETHER with the rents, issues, and profits of such Property, subject however, to the right, power, and authority granted and conferred on City in this Deed of Trust to collect and apply the rents, issues, and profits; and TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights of way, and appurtenances thereto, and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Deed of Trust; All of the foregoing, together with the Property, is herein collectively referred to as the Security.

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2 TO HAVE AND TO HOLD the Security, together with acquittances, to the Trustee, its successors and assigns forever; TO SECURE to the City the payment of the sums, and the performance of the covenants and agreements of the Trustor evidenced by (i) that certain unrecorded Disposition, Development, and Loan Agreement executed by and between Trustor and City, dated [INSERT]LoanAgreementpursuant to which City agreed to provide funds to Trustor in the amount of [INSERT] (the Loan), (ii) that certain unrecorded promissory note dated as of the date hereof Note(iii) that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (, executed by and between Trustor and City, and recorded substantially concurrently herewith, pursuant to which Developer agreed to construct no fewer than thirty three (33) rental units, including one (1) thirty two (32) affordable rental units and restrict thirty two (32) of the units to households earning up to 120% of area median income to be rented at an affordable rent (as defined in the Regulatory Agreement). The Loan Agreement, the Note, and the Regulatory Agreement are incorporated herein by this reference; and TO SECURE the payment of all other sums, with interest thereon, including, without limitation, repayment of the Loan balance advanced in accordance herewith to protect the security of this Deed of Trust and the performance of the covenants and agreements of Trustor herein contained.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:1..Trustor represents and warrants that Trustor is lawfully seizedof the estate hereby conveyed, has the right to grant and convey the Security, and that other than this Deed of Trust, the Security is encumbered only by such prior liens and encumbrances as approved by City. Trustor agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule and Trustor shall pay all costs and expenses, including cost of evidence of title and ain a reasonable sum, in any such action or proceeding in which City or Trustee may appear, and in any suit brought by City to foreclose this Deed of Trust.2.Loan Agreement, Note, and Regulatory Agreement.Trustor will perform all ofAgreement, the Note, the Regulatory Agreement, and this Deed of Trust. 3.Charges and Liens.Trustor will promptly pay when due, the interest, principal,and all other charges accruing under any deed of trust, mortgage, or other instrument encumbering the Property, and will pay when due directly to the payee thereof all taxes, assessments and other charges, fines and impositions affecting the Property. Upon request by the City, Trustor will promptly furnish to the City copies of all notices of amounts due described in this Section and evidence of payment of such amounts. Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to

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3 encumber all or part of the Property or any interest therein, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust; provided however, Trustor will not be required to pay any tax, charge, lien or assessment described in this Section so long as Trustor is actively contesting its validity in good faith and by appropriate legal proceedings that will operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof. Trustor shall post security for the payment of such contested claims as may be requested by the City. 4. Protection of Security. If Trustor fails to perform any of the covenants and agreements set forth in this Deed of Trust, or if any action or proceeding is commenced that senior lienholder document, eminent domain, insolvency, code enforcement, arrangements or proceedings involving a bankrupt or decedent, foreclosure of any mortgage secured by the Property or sale of the Property under a power of sale of any instrument secured by the Property, City, at its option, without releasing Trustor from any obligation hereunder, may upon notice to Trustor, make such appearance, disburse such sums and take such action as is necessary to protect to make repairs. Any amounts disbursed by City pursuant to this Section, with interest thereon, shall become additional indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and City agree to other terms of payment, such amounts shall be payable upon notice from City to Trustor requesting payment thereof, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. Nothing contained in this Section shall require City to incur any expense or take any action hereunder. 5. Inspection. The City may make, or cause to be made, reasonable entries upon the Property and inspections of the Security; provided that the City will give Trustor reasonable notice of inspection. 6. Hazard Insurance. Trustor shall keep the Property insured by a standard all-risk property insurance policy with endorsements for vandalism, malicious mischief, and special extended perils, in the full replacement value of the improvements, and with endorsements for increases in costs due to changes in code and inflation, with loss payable to City and any superior trust deed holder, as their interests may appear, and any other insurance required by the City. The insurance carrier providing such insurance shall be licensed to do business in the State of California and may be chosen by Trustor, subject to approval by City. All insurance policies and renewals thereof shall be in a form acceptable to the City, and shall include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lien and the City as their interests may appear and in a form acceptable to the City. Trustor shall provide City with copies of all policies and renewals thereof, certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor shall give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by Trustor. The policies shall include an endorsement providing

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4 termination or any material change in the coverage afforded by any of the insurance policies required under this Section. If the Property is acquired by the City, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition, subject to the rights of the holder of any senior lien.Renewal policies and any replacement policies, together with premium receipts satisfactory to the City, shall be delivered to the City at least thirty (30) days prior to the expiration of existing policies. Neither Trustee nor the City shall by reason of accepting, rejecting, approving or obtaining insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any insurer for payment of losses. The application of proceeds pursuant to this Section shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 7.Awards and Damages.Subject to the rights of senior lienholders, all judgments,awards of damages, settlements and compensation made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (b) any damage to or destruction of the Property or any part thereof by insured casualty, and (c) any other injury or damage to all or any part of the Property, are hereby assigned to and shall be applied to the restoration or repair of the Property (if applicable) or paid to the City. The City is authorized and empowered (but not required) to collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as the City shall determine at its option. Subject to the rights of senior lienholders, the City shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the City may be released to Trustorupon such conditions as the City may impose for its disposition. Application of all or any part of the amounts collected and received by the City or the release thereof shall not cure or waive any default under this Deed of Trust. If the Property is abandoned by Trustor, or if, after notice by City or its designated agent to Trustor that the condemnor or insurer offers to make an award or settle a claim for damages, Trustor fails to respond to City within thirty (30) days after the date such notice is mailed, City or its designated agent is authorized to collect and apply the proceeds, of Trust.8.Maintenance.Trustor shall maintain the Property and all structures and landscaping thereon in good condition and repair. Trustor agrees to complete installation of landscaping as approved by the City, and to diligently maintain and care for installed landscaping, using generally accepted methods of cultivation and watering. Trustor shall not remove or demolish any building located on the Property, and agrees to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon to the extent that insurance proceeds are available for such restoration, and to pay when due all claims for labor performed and materials furnished therefor, and to comply with all laws

San Carlos City CouncilJune 26, 2023

San Carlos City Council
June 26, 2023