City Council
May 16, 2023
Item 3.3
Jacky Morales-Ferrand
Director of Housing
Proposed Changes to the
Percentage Allocations for
Measure E Transfer Tax Funds
Jim Shannon
Budget Director
Rachel VanderVeen
Assistant Director of Housing
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL Measure E History
2 • Real property transfer tax for all transactions
over $2 million; received in the General Fund
• Available for any governmental purpose,
including support for affordable housing
development and reducing homelessness
• City Council approval of Mayor’s March Budget
for Fiscal Year 2023-2024 directed the
consideration of a one-time reallocation for
homelessness prevention, support and
management
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL City Council Policy – Percentage Allocation Changes
3 City Council Policy 1-18, Section 22, describes the
spending priorities for Measure E revenues. Per the
policy, any modifications of the percentage
allocations requires the following:
• 60-day public notice in advance of the effective
date of the proposed allocation change
• At least two public hearings prior to City Council
action
• Two-thirds vote of the City Council
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Budget Recommendation
4 Of the $105.9 million, the 2023-2024 Proposed Budget recommends:
• Retaining $52.8 million for affordable housing purposes (50%) • Setting aside $15.1 million into a reserve to provide capacity to absorb the likely revenue shortfall in the current year to ensure that funding commitments stay intact(14%) • Reallocating $38.0 million for homelessness prevention, support, and management (36%) Prior Year Measure E
Revenues
2023-2024 Measure E
Revenues Total Amount
Previously Allocated for Affordable Housing $70,313,209 $35,625,000 $105,938,209 Previously Allocated for Homeless Prevention $2,712,628 $4,750,000 $7,462,628 Previously Allocated for Homeless Support $14,004,809 $7,125,000 $21,129,809 Previously Allocated for Program Administration $2,500,000 $2,500,000 Total $87,030,646 $50,000,000 $137,030,646
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Budget Recommendation
5 • The reallocation of one-time funding recommended in the Proposed Operating Budget is displayed in blue text on the “2023-2024 Proposed Spending Priorities” slides that follow.
• Additional information is included in Attachment D to the City Manager’s Transmittal Memorandum of the 2023-2024 Proposed Operating Budget; the Housing Department, Public Works Department, City Manager’s Office, and City-Wide Expenses sections of the 2023-2024 Proposed Operating Budget; and Manager’s Budget Addendum #2: One-Time Changes to Measure E Revenue Percentage Allocations
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL Uncommitted Affordable Housing Funding
from Prior Years
6 Funded Activities Under Previous Spending Plans Uncommitted Funding
New Construction of Affordable Rental Housing – Extremely Low-Income Households $18,237,291 Acquisition and Rehabilitation $24,609,040
Acquisition of Hotels $3,316,187
Construction of Commercial Space for New Affordable Housing Developments $3,817,275 Land Acquisition $10,000,000
Accessory Dwelling Units Program $4,903,083
New Construction of Affordable For-Sale Housing $3,087,500 New Construction of Affordable Rental Housing – Moderate Income Households $2,342,833 Total $70,313,209
An additional $16.7 million is being reprogrammed within the Homeless Prevention, Rental Assistance and Homeless Support Programs categories BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 7 One-Time Revision to Percentage Allocation of
Measure E Revenues – Prior Year and 2023-2024
Spending Category Current %
Revised Allocation
Percentages of Prior Year
Revenues
Revised Allocation
Percentages of 2023-2024
Revenues
Extremely Low-
Income Households
40% 21% 0%
Low-Income
Households
30% 57% 0%
Moderate-Income
Households
5% 0% 0%
Homeless
Prevention
10% 4% 20%
Homeless Support
Programs
15% 18% 80%
Program
Administration
5% 22% 5%
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Spending Priorities
8 2023-2024 Proposed Spending Priorities
Reallocation of Prior
Year Revenues
Allocation of
2023-2024
Revenues
Total
Proposed
Plan
Program Administration 22% $19,427,897 5% $2,500,000 $21,927,897 Measure E Revenue Stabilization
Reserve
$15,102,956 $15,102,956
Housing Homeless Response Staff
(4 FTE, 3-year funding)
$2,472,471 $2,472,471
CMO Homelessness Coordination
Team (3 FTE, 3-year funding)
$1,852,470 $1,852,470
Other Administration Costs $2,500,000 $2,500,000
Program Administration is taken from the total amount available before the allocations to the other priorities
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Spending Priorities
9 2023-2024 Proposed Spending Priorities
Reallocation of
Prior Year Revenues
Allocation of
2023-2024
Revenues
Total
Proposed
Plan
Affordable housing for extremely low-income
households
21% $14,200,000 0% $0 $14,200,000
New Construction of Affordable Rental Housing $14,200,000 $14,200,000 Affordable housing for low-income households 57% $38,635,253 0% $0 $38,635,253 New Construction of Affordable Rental Housing $21,300,000 $21,300,000 Inflation Reserve $11,000,000 $11,000,000
Preservation Funds $5,000,000 $5,000,000
Commercial Space in Affordable Housing $1,335,253 $1,335,253 Affordable housing for moderate-income households 0% $0 0% $0 $0
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Spending Priorities
10 2023-2024 Proposed Spending Priorities
Reallocation of
Prior Year
Revenues
Allocation of 2023-
2024 Revenues
Total
Proposed
Plan
Homelessness Prevention and Solutions 4% $2,715,628 20% $9,500,000 $12,215,628 Eviction Prevention and Diversion $2,712,628 $2,712,628 Homelessness Prevention and Rental
Assistance ($4.75 M reallocation from
affordable housing)
$9,500,000 $9,500,000
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Spending Priorities
11 2023-2024 Proposed Spending Priorities
Reallocation of
Prior Year
Revenues
Allocation of
2023-2024
Revenues
Total
Proposed
Plan
Homeless Support Programs and Shelter
Operations
18% $12,054,868 80% $38,000,000 $50,054,868
Overnight Warming Locations (OWL) $1,500,000 $1,500,000 Interim Housing Operating &Maintenance Reserve $8,548,079 $3,081,730 $11,629,809 Interim Shelter Site Identification/Development
(Spent over a multi-year period)
$18,890,750 $18,890,750
Interim Shelter Site Identification/Development
Public Works Staffing (3-year-funding)
$2,006,789 $2,006,789
Interim Shelter Maintenance – PW Staffing and
Contractual Services (includes 5.0 FTE)
$5,000,000 $5,000,000
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL 2023-2024 Proposed Spending Priorities
12 2023-2024 Proposed Spending Priorities
Reallocation
of Prior Year
Revenues
Allocation of
2023-2024
Revenues
Total
Proposed
Plan
SJ Bridge ($3.5 M reallocated from
affordable housing)
$5,000,000 $5,000,000
Homeless Outreach Contracts $3,700,000 $3,700,000
CARE Coordination Program (CCP) $1,000,000 $1,000,000
Housing Homeless Response Staffing
(2.0 Therapeutic Specialists, 3-year funding)
$827,500 $827,500
SureStay Operations $500,000 $500,000
TOTAL ALLOCATION $87,030,646 $50,000,000 $137,030,646
BUILDING GREAT PLACES INVESTING IN PEOPLE PROVIDING HOUSING FOR ALL Next Steps
13 June 12, 2023
• Second Public Hearing scheduled at 6:00 p.m. along
with the 2023-2024 Proposed Budget
June 13, 2023
• Action on One-Time Measure E Percentage
Allocation Changes will be scheduled as a separate
item at the City Council meeting on June 13
• Review and approval of the 2023-2024 Mayor’s
June Budget Message
• Review and approval of the 2023-2024 Proposed
Budget
City Council
May 16, 2023
Item 3.3
Jacky Morales-Ferrand
Director of Housing
Proposed Changes to the
Percentage Allocations for
Measure E Transfer Tax Funds
Jim Shannon
Budget Director
Rachel VanderVeen
Assistant Director of Housing