San Luis Obispo City Council
March 1, 2022

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the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to Consultant under this paragraph exceed Consultant’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs.

(d) The review, acceptance or approval of the Consultant’s work or work product by any indemnified party shall not affect, relieve or reduce the Consultant’s indemnification or defense obligations. This Section survives completion of the services or the termination of this contract. The provisions of this Section are not limited by and do not affect the provisions of this contract relating to insurance.

26. Non-Exclusive Contract. The City reserves the right to contract for the services listed in this proposal from other consultants during the contract term.

27. Standards. Documents shall conform to City Standards and City furnished templates shall be used.

28. Consultant Endorsement. Technical reports, plans and specifications shall be stamped and signed by the Consultant where required.

29. Required Deliverable Products and Revisions. The Consultant will be required to provide documents addressing all elements of the workscope. Plans shall be prepared using City’s standardized title blocks and coversheets. Draft plans may be submitted for review using 22x34 sheet format. Specifications and bid documents shall conform to standard City formats unless authorized. The City’s current Standard Specifications and Engineering Standards must be incorporated where applicable.

City staff will review any documents or materials provided by the Consultant and, where necessary, the Consultant will respond to staff comments and make such changes as deemed appropriate. Submittals shall include the previous marked up submittal (returned to the Consultant) to assist in the second review. Changes shall be made as requested or a notation made as to why the change is not appropriate. 2 copies of the interview summaries, concept layouts, memos and scoping documents produced during the Schematic Design phase
1 copy of the final interview summaries, concept layouts, memos and scoping documents produced during the Schematic Design phase
2 copies of the 30% plans
2 copies of the 50% plans, specifications and estimate plus 30% markups 2 copies of the 90% plans, specifications and estimates plus 50% markups 2 copies of the 100% plans, specifications and estimates plus 90% markups 1 copy of the final record drawings after construction
2 copies of the memos and documents produced during the Design Development Phase Draft reports and plan submittals shall be submitted as digital and paper copies when requested.

Final documents shall be submitted as camera-ready original, unbound, each page printed on only one side, including any original graphics in place and scaled to size, ready for reproduction AND one electronic copy submitted in Adobe Acrobat format including all original stamps and signatures.

In the event the City will be compiling the final specifications, incorporating the Consultant’s work, the final specifications will also be required to be submitted in Microsoft Word format.

In the event the City will be completing the Record Drawings, the final plans will also be required to be submitted in AutoCAD.

Electronic files shall be submitted on flashdrives and all files must be compatible with the Microsoft operating system. Each flashdrive must be clearly labeled and have a printed copy of the directory. Files may be emailed to the City in lieu of putting them on flashdrive.

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30. Ownership of Materials. Upon completion of all work under this contract, ownership and title to all reports, documents, plans, specifications, and estimates produced as part of this contract will automatically be vested in the city and no further agreement will be necessary to transfer ownership to the City. The Consultant shall furnish the City all necessary copies of data needed to complete the review and approval process.

It is understood and agreed that all calculations, drawings and specifications, whether in hard copy or machine readable form, are intended for one-time use in the construction of the project for which this contract has been entered into.

The Consultant is not liable for claims, liabilities, or losses arising out of, or connected with the modification, or misuse by the City of the machine-readable information and data provided by the Consultant under this agreement. Further, the Consultant is not liable for claims, liabilities, or losses arising out of, or connected with any use by City of the project documentation on other projects, except such use as may be authorized in writing by the Consultant.

31. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by or assembled by the Consultant as part of the work or services under these specifications shall be the property of City and shall not be made available to any individual or organization by the Consultant without the prior written approval of the City.

The Consultant shall not issue any news release or public relations item of any nature, whatsoever, regarding work performed or to be performed under this contract without prior review of the contents thereof by the City and receipt of the City’s written permission.

32. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what the Consultant is required to furnish in limited quantities as part of the work or services under these specifications, the Consultant shall provide such additional copies as are requested, and City shall compensate the Consultant for the costs of duplicating of such copies at the Consultant's direct expense.

33. Attendance at Meetings and Hearings. As part of the workscope and included in the contract price is attendance by the Consultant at up to 4 public meetings to present and discuss its findings and recommendations.

Consultant shall attend as many "working" meetings with staff as necessary in performing workscope tasks.

34. Requests for Review. The Consultant shall respond to all requests for submittal review or contractor RFI’s within two weeks of receipt of the information from the City.

35. Project Proposal Submittal. Upon completion of the project scoping meeting, the Consultant shall submit a proposed workscope, compensation and schedule within 10 working days. The cost proposal shall include all costs including miscellaneous direct cost items.

36. Consultant Invoices. The Consultant shall deliver a monthly invoice to the City, itemized by project work phase or. Invoice must include a breakdown of hours billed and miscellaneous charges and any sub-consultant invoices, similarly broken down, as supporting detail.

37. Payment. For providing services as specified in this Agreement, City will pay and Consultant shall receive therefore compensation in a total sum not to exceed the individual agreed upon project fee. Should the Consultant’s designs, drawings or specifications contain errors or deficiencies, the Consultant shall be required to correct them at no increase in cost to the City.

The Consultant shall be reimbursed for hours worked at the hourly rates attached to this agreement. Hourly rates include direct salary costs, employee benefits, overhead and fee. In addition, the Consultant shall be reimbursed for direct costs other than salary and vehicle cost that have been identified and are attached to this agreement.

The Consultant’s personnel shall be reimbursed for per diem expenses at a rate not to exceed that currently authorized for State employees under State Department of Personnel Administration rules.

38. Payment Terms. The City's payment terms are 30 days from the receipt and approval by the City of an original invoice and acceptance by the City of the materials, supplies, equipment or services provided by the Consultant (Net 30).

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39. Resolution of Disputes. Any dispute, other than audit, concerning a question of fact arising under this contract that is not disposed of by agreement shall be decided by a committee consisting of the City’s Project Manager and the City Director of Public Works, who may consider written or verbal information submitted by the Consultant. Not later than thirty days after completion of all deliverables necessary to complete the plans, specifications and estimate, the Consultant may request review by the City Council of unresolved claims or disputes, other than audit, in accordance with Chapter 1.20 Appeals Procedure of the Municipal Code.

Any dispute concerning a question of fact arising under an audit of this contract that is not disposed of by agreement, shall be reviewed by the City’s Chief Fiscal Officer. Not later than 30 days after issuance of the final audit report, the Consultant may request a review by the City’s Chief Fiscal Officer of unresolved audit issues.

The request for review must be submitted in writing.

Neither the pendency of a dispute, nor its consideration by the City will excuse the consultant from full and timely performance in accordance with the terms of this contract. .

40. Agreement Parties.

City: Wyatt Banker-Hix
City of San Luis Obispo
919 Palm Street
San Luis Obispo, CA 93401
Consultant:

All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as shown above.

41. Amendments. Any amendment, modification or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Manager.

42. Working Out of Scope. If, at any time during the project, the consultant is directed to do work by persons other than the City Project Manager and the Consultant believes that the work is outside of the scope of the original contract, the Consultant shall inform the Project Manager immediately. If the Project Manager and Consultant both agree that the work is outside of the project scope and is necessary to the successful completion of the project, then a fee will be established for such work based on Consultant's hourly billing rates or a lump sum price agreed upon between the City and the Consultant. Any extra work performed by Consultant without prior written approval from the City Project Manager shall be at Consultant's own expense.

43. Complete Agreement. This written agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or representation be binding upon the parties hereto.

For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Consultant agrees with City to do everything required by this Agreement, the said specification and incorporated documents.

Authority to Execute Agreement. Both City and Consultant do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.

CITY OF SAN LUIS OBISPO: CONSULTANT:
___________________________________
Name of Company
___________________________________

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Derek Johnson, City Manager By:

Name of CAO/President
Its: CAO/President
APPROVED AS TO FORM:
___________________________________
Christine Dietrick, City Attorney
(2nd signature required if Corporation):
________________________________
By:

Name of Corporate Officer
Its: ____________________

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Section E

PROPOSAL SUBMITTAL FORMS

ACKNOWLEDGEMENT
The undersigned declares that she or he:
 Has carefully examined Specification No. 1000550
 Is thoroughly familiar with its content.
 Is authorized to represent the proposing firm; and
 Agrees to perform the work as set forth in the specification and this proposal.

Firm Name and Address:

Contact Name:

Email: Fax: Phone:

Signature of Authorized Representative: Date:

INSURANCE CERTIFICATE
Insurance Company’s A.M. Best Rating
Certificate of insurance attached

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STATEMENT OF PAST CONTRACT DISQUALIFICATIONS
The Consultant shall state whether it or any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality, and if so to explain the circumstances.

Do you have any disqualification as described in the above paragraph to declare? Yes No If yes, explain the circumstances.

Executed on ______________________at _______________________________________ under penalty of perjury of the laws of the State of California, that the foregoing is true and correct. ______________________________________
Signature of Authorized Consultant Representative

REFERENCES
Number of years engaged in providing the services included within the scope of the specifications under the present business name: _________
Describe fully the last three contracts performed by your firm that demonstrate your ability to provide the services included with the scope of the specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications.

Reference No. 1
Customer Name
Contact Individual
Telephone & Email
Street Address
City, State, Zip Code
Date of Services
Contract Amount
Description of Services
Project Outcome

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Reference No. 2
Customer Name
Contact Individual
Telephone & Email
Street Address
City, State, Zip Code
Date of Services
Contract Amount
Description of Services
Project Outcome
Reference No. 3
Customer Name
Contact Individual
Telephone & Email
Street Address
City, State, Zip Code
Date of Services
Contract Amount
Description of Services
Project Outcome

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Section F
INSURANCE REQUIREMENTS: Consultant Services
The Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or sub-consultants.

Minimum Scope of Insurance. Coverage shall be at least as broad as:

1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 20 10 Prior to 1993 or CG 20 10 07 04 with CG 20 37 10 01 or the exact equivalent as determined by the City).

2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto).

3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance.

4. Errors and Omissions Liability insurance as appropriate to the consultant's profession.

Minimum Limits of Insurance. Consultant shall maintain limits no less than:

1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.

3. Employer's Liability: $1,000,000 per accident for bodily injury or disease.

4. Errors and Omissions Liability: $1,000,000 per occurrence.

Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.

Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions:

1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects:
liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers.

2. For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant's insurance and shall not contribute with it.

3. The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.

4. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. The Consultant agrees to notify the City in the event that the policy is suspended, voided or reduced in coverage or limits. A minimum of 30 days prior written notice by certified mail, return receipt requested, will be provided.

Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII.

Verification of Coverage. Consultant shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences.

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CITY SPECIFICATION NO.DATE:

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SHEET NO.DESIGNED BY:DRAWN BY:CHECKED BY:APPROVED BY:SCALE:PLAN FILE NO. / LOCATION

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VICINITY MAP
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Item 5h
Department: Community Development
Cost Center: 4003
For Agenda of: 3/1/2022
Placement: Consent
Estimated Time: N/A
FROM: Michael Codron, Community Development Director
Prepared By: Kyle Bell, Associate Planner
SUBJECT: SECOND READING AND ADOPTION OF ORDINANCE NO. 1708 (2022

SERIES) APPROVING THE REZONE OF A PROPERTY LOCATED AT
600 TANK FARM ROAD FROM BUSINESS PARK (BP-SP) TO

COMMERCIAL SERVICES (C-S-SP), AND ADOPT ASSOCIATED TEXT

AMENDMENTS TO THE AIRPORT AREA SPECIFIC

RECOMMENDATION
Adopt Ordinance No. 1708 (2022 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, approving a rezone for property at 600 Tank Farm Road. The project includes amending the Zoning Map to change the zoning designation of the associated properties from Business Park (BP-SP) to Commercial Services (C-SSP), respectively, and making associated text amendments to the Airport Area Specific Plan to be consistent with the 600 Tank Farm mixed-use development plan in accordance with the adopted Final Environmental Impact Report, as represented in the City Council staff report and attachments dated March 1, 2022 (600 Tank Farm: PR-0005-2021, GENP-0814-2019, SPEC-0407-2020, EID-0608-2020).”

DISCUSSION
On February 1, 2022, the City Council voted 5:0 to adopt the Final Environmental Impact Report (EIR) prepared for the mixed-use development located at 600 Tank Farm, and approved the development project and associated entitlements including a General Plan Amendment, Major Development Review Project, Minor Subdivision, and introduce Ordinance No. 1708, approving an amendment to the zoning map to change the zoning designation of the properties from Business Park (BP-SP) to Commercial Services (C-SSP), and include associated text amendments to the Airport Area Specific Plan (AASP) to accommodate the proposed project and rezone.

Policy Context
As discussed in the Council Agenda Report dated February 1, 2022, the proposed project must conform to the standards and limitations of the General Plan, AASP, and any applicable aspects of the Zoning Regulations, and Engineering Standards not otherwise addressed in the AASP that apply to the overall development plan approval including the subdivision component.

Item 5h
The City Council evaluated the project and found the project to be consistent with all applicable policies, related to the following regulatory framework. The Planning Commission (PC) report from the November 17, 2021 hearing, provided an in depth analysis of the projects consistency with the regulatory framework, please see Section

4.0 of the PC Report and associated attachments.

Previous Council or Advisory Body Action
Throughout 2020-2022, the project has been reviewed in draft or revised form eleven times, as listed below.

Council Initiation and Conceptual Review
 April 21, 2020 - Council Initiation Report & Minutes
 July 16, 2020 - Conceptual ATC Report & Minutes
 August 17, 2020 - Conceptual ARC Report & Minutes
 September 23, 2020 - Conceptual PC Report & Minutes
EIR Scoping and Draft Review
 December 9, 2020 - PC EIR Scoping & Minutes
 July 14, 2021 - PC Draft EIR Review & Minutes
Previous Advisory Body Review
 August 18, 2021 – Airport Land Use Commission (ALUC) Report & Minutes  September 27, 2021 - TC Report & Minutes
 October 4, 2021 - ARC Report & Minutes
 November 17, 2021 - PC Report & Minutes
City Council Adoption and Introduction of Ordinance No. 1708 (2022 Series)  February 1, 2022 – Council Agenda Report & Minutes

PUBLIC ENGAGEMENT
Consistent with the City’s Public Engagement and Noticing (PEN) Manual and the City’s Municipal Code, the project was noticed in compliance with the City’s notification requirements for Development Projects for each public hearing associated with the project. Newspaper legal advertisements were posted in the New Times ten days prior to the hearing. Additionally, postcards were sent to both tenants and owners of properties within 300 feet of the project site ten days before the hearing.

CONCURRENCE
The City’s review of the project involved all City departments in the development review process. Various conditions of approval from these departments were included in Resolution No. 11304 (2022 Series) related to the project approval, based on those conditions set forth in the Planning Commission Resolution related to this action, as modified as a result of Planning Commission recommendations.

Item 5h

ENVIRONMENTAL REVIEW
On February 1, 2022, the City Council adopted Resolution No. 11304 (2022 Series), adopting the Final EIR prepared for the project (State Clearinghouse Number 2020110426). A Notice of Determination was filed with the San Luis Obispo Clerk Recorder’s Office on February 2, 2022. The Final EIR is available at the following website:
https://www.slocity.org/government/department-directory/communitydevelopment/documents-online/environmental-review-documents/-folder-2187

FISCAL IMPACT
Budgeted: No Budget Year: 2021-22
Funding Identified: No
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund $N/A $ $ $
State
Federal
Fees
Other:

Total $ $ $ $
There will be no net fiscal impact related to approving the proposed project. The applicant will be required to implement a variety of public and private improvements either directly as a result of the project, various conditions of approval, or through mitigation measures.

In some cases, the applicant is eligible for reimbursement for portions of public improvements that are beyond what would otherwise be required to offset the impacts of the proposed project. To budget and appropriate the necessary Eligible Fees to provide reimbursements, including, but not limited to timely appropriation of General Fund amounts, and reservation of any Citywide Traffic Impact fees paid by Benefitting Properties, the City has appropriated $715,000 in the 2021-2023 Financial Plan that will cover design and the Tank Farm Bike Path Plans, Specifications and Estimates. On February 15, 2022 the City Council approved the Mid-Year Budget Review 2021-22 that included an additional $1,544,600 to cover the costs of needed rights of way. No previously unanticipated fiscal impacts would occur as a result of this action.

ALTERNATIVES
Modify the proposed ordinance. The Council may make minor, non-substantive changes to the proposed Ordinance for the staff to incorporate in the final documents.

Any material changes to the Final Ordinance would require further review by staff and the PC followed by re-introduction of the Ordinance by the Council.

Item 5h

ATTACHMENT
A - Ordinance No. 1708 (Series 2022)

O 1708
ORDINANCE NO. 1708 (2022 SERIES)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS

OBISPO, CALIFORNIA, APPROVING A REZONE FOR PROPERTY
AT 600 TANK FARM ROAD. THE PROJECT INCLUDES AMENDING

THE ZONING MAP TO CHANGE THE ZONING DESIGNATION OF

THE ASSOCIATED PROPERTIES FROM BUSINESS PARK (BP-SP)

TO COMMERCIAL SERVICES (C-S-SP), RESPECTIVELY, AND

MAKING ASSOCIATED TEXT AMENDMENTS TO THE AIRPORT
AREA SPECIFIC PLAN TO BE CONSISTENT WITH THE 600 TANK

FARM MIXED-USE DEVELOPMENT PLAN IN ACCORDANCE WITH
THE ADOPTED FINAL ENVIRONMENTAL IMPACT REPORT. AS

REPRESENTED IN THE STAFF REPORT AND ATTACHMENTS
DATED MARCH 1, 2022 (600 TANK FARM: PR-0005-2021, GENP0814-2019, SPEC-0407-2020, & EID-0608-2020) WHEREAS, the City Council of the City San Luis Obispo conducted a web based teleconference hearing on April 21, 2020, authorizing the initiation of the project and issuance of a request for proposals for preparation of an Environmental Impact Report for the project, pursuant to a proceeding instituted under GENP-0814-2019, Covelop Inc., applicant; and
WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a web based teleconference hearing on July 14, 2021, received public testimony and provided input on the Draft Environmental Impact Report (EIR), pursuant to a proceeding instituted under ARCH-0406-2021, SBDV-0407-2021, GENP-0814-2019, SPEC-0407- 2020, and EID-0608-2020, Covelop Inc., applicant; and
WHEREAS, the Airport Land Use Commission of the County of San Luis Obispo, upon receipt of a formal referral from the City of San Luis Obispo, conducted a web based teleconference hearing on August 18, 2021, and determined consistency with the San Luis Obispo County Regional Airport Land Use Plan subject to conditions, pursuant to a proceeding instituted under PR-0005-2020, Covelop Inc., applicant; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a web based teleconference hearing on November 17, 2021, and recommended findings of consistency to the City Council regarding the proposed rezoning application; pursuant to a proceeding instituted under GENP-0814-2019, SPEC-0407-2020, and EID-0608- 2020, Covelop Inc., applicant; and

Ordinance No. 1708 (2022 Series) Page 2
O 1708
WHEREAS, the City Council of the City of San Luis Obispo conducted web based teleconference hearing, on February 1, 2022, for the purposes of adopting Resolution No. 11304 (2022 Series) for the certification of the Final EIR and approval of the General Plan Map Amendment and development plan of the project (including a minor subdivision), and adopt Resolution No. 11305 (2022 Series) approving the reimbursement agreement.

The City Council introduced Ordinance No. 1708 (2022 Series) for the rezone of the property and associated text amendments to the Airport Area Specific Plan (AASP), pursuant to a proceeding instituted under GENP-0814-2019, SPEC-0407-2020, and EID0608-2020, Covelop Inc., applicant; and WHEREAS, the City Council of the City of San Luis Obispo conducted web based teleconference hearing, on March 1, 2022, for the purposes of adopting an Ordinance for the rezone of the property and associated text amendments to the AASP, pursuant to a proceeding instituted under GENP-0814-2019, SPEC-0407-2020, and EID-0608-2020, Covelop Inc., applicant; and
WHEREAS, the City Council of the City of San Luis Obispo has duly considered all evidence, including the written and oral testimony of the applicant, interested parties, and evaluation and recommendations by staff, presented at said hearing.

WHEREAS, notices of said public hearings were made at the time and in the manner required by law; and
NOW, THEREFORE, the City Council of the City of San Luis Obispo does hereby ordain as follows:

SECTION 1. Findings. Based upon all the evidence in the record, the Council makes the following findings:

1. The rezone and associated text amendments to the AASP allow the implementation of the 600 Tank Farm Mixed Use Project by rezoning the site to be consistent with the General Plan as amended.

2. The rezone and associated text amendments are consistent with General Plan Land Use Element policies and map as amended related to 600 Tank Farm Road Project, including the land uses and development envisioned for the area for following reasons: 1) The rezone and text amendments would facilitate the General Plan Land Use map as amended and reflect General Plan development parameters for the area; and 2) the rezone and text amendments would facilitate appropriate infill development and construction of additional housing including affordable housing to meet City housing goals and better balance jobs and housing opportunities, because the project provides additional housing opportunities at a location close to major employers, commercial services and multimodal transportation facilities.

3. A Final Environmental Impact Report has been adopted for the project consistent with the rezone and AASP text amendments.

Ordinance No. 1708 (2022 Series) Page 3
O 1708

4. The rezone and text amendments will not create non-conforming uses at the site because any existing uses that remain on site would be allowed under the new zoning.

SECTION 2. California Environmental Quality Act (CEQA) Findings, Mitigation Measures, and Mitigation Monitoring Program. Based upon all the evidence, The City Council adopted the Final Environmental Impact Report (FEIR) (State Clearing House #2020110426), subject to the following CEQA findings in support of all entitlements related to the 600 Tank Farm Mixed-Use project as outlined in Resolution 11304 (2022 Series).

SECTION 3. Action. The City Council of San Luis Obispo hereby approves the rezone as shown in attached “Exhibit A”, which is consistent with the land use designations included in the General Plan as amended, and 2) approves amendments of the text of the Airport Area Specific plan attached hereto marked “Exhibit B” and included herein by reference to be modified as follows:
a) Change the site’s land use designation from Business Park (BP-SP) to Service Commercial (C-S-SP) within the Specific Plan Overlay, which is necessary to allow the proposed mixed-use development;
b) Amendments to allow a mixed-use development specific to the property at 600 Tank Farm Road within the C-S-SP zone;
c) Amend all AASP tables and text to reflect the zone change and addition of 280 residential units, and 12,500 square feet of commercial-service/office space for the project site;
d) Modify the road section figures to reflect modifications to Tank Farm Road and Santa Fe Road consistent with traffic projections and full buildout of the circulation system;
e) Describe necessary setback of improvements and buildings to delineated wetland areas in conformance with project Biological Assessments; and f) Updated applicable figures and graphics to reflect the changes in land use designations, and circulations systems.

SECTION 4. Severability. If any subdivision, paragraph, sentence, clause, or phrase of this Ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the remaining portions of this Ordinance, or any other provisions of the city' s rules and regulations. It is the city' s express intent that each remaining portion would have been adopted irrespective of the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable.

Ordinance No. 1708 (2022 Series) Page 4
O 1708
SECTION 5. Publication. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City.

This ordinance shall go into effect at the expiration of thirty (30) days after its final passage.

INTRODUCED on the 1
st day of February 2022, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ___ day of ___, 2022, on the following vote:

AYES:

NOES:

ABSENT:
___________________________
Mayor Erica A. Stewart
ATTEST:
__________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
__________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on _______________________. ____________________________
Teresa Purrington
City Clerk

Item 5i
Department: Parks and Recreation
Cost Center: 7007
For Agenda of: 3/1/2022
Placement: Consent
Estimated Time: N/A
FROM: Greg Avakian, Parks & Recreation Director
Prepared By: Devin Hyfield, Recreation Manager
SUBJECT: LAGUNA LAKE GOLF COURSE CONCESSIONAIRE AGREEMENT WITH

ZEN DOG, LLC

RECOMMENDATION
Approve an Agreement with Zen Dog, LLC to provide a food and beverage concessionaire service at the Laguna Lake Golf Course.

DISCUSSION
Background
In January 2010, the City Council received the Laguna Lake Golf Course (LLGC) best practice review, which recommended a number of initiatives to increase revenues at the City’s 10-hole executive golf course. One of the initiatives was to pursue a food and beverage concessionaire through the request for proposal process with the intent to add enhanced food and beverage sales at LLGC. Through the original process, the City entered into a community partnership with Achievement House, Inc to provide such services.

COVID-19 Pandemic
After an initial four-month closure in March 2020 due to the COVD-19 pandemic, the Laguna Lake Golf Course reopened in July 2020 under modified operations. Following both state and local guidelines to ensure the safety of both staff and public, new safety protocols were enacted including limiting indoor capacity. Due to staffing issues after being closed for an extended duration in addition to meeting new safety guidelines, the Achievement House was unable to reopen the 11th Hole Grill till September 2020, resulting in inconsistent hours of operation while not being able to retain qualified onsite management. City Golf management at the LLGC continued to work with the Achievement House to assist in managing the expectations and health protocols with regards to staffing, operational hours, safety concerns and overall management of the concessionaire at the 11th Hole Grill. After a few months of inconsistent operations, the Achievement House and City mutually agreed to terminate the agreement in June 2021.

Item 5i
Requisition for New Concessionaire
A customer survey to help identify the needs and desires for a potential food concession operator was conducted at the LLGC in Fall 2021. The bid “Notice Requesting Proposals for Laguna Lake Golf Course Food/Beverage Concession” was enacted on September 2, 2021. No bids were received during the initial request. A second call for RFP was sent out and included an advertisement highlighting the concessionaire request in the New Times for the month of October. The RFP was extended through the end of October 2021, with two applicants meeting the required terms. Interviews with the vendor applicants occurred in December 2021 between the Parks and Recreation Department Head and Recreation Manager.

Agreement with Zen Dog, LLC
Zen Dog is a limited liability corporation based in San Luis Obispo that has been operating a street food business since 2016 with expansion to a mobile food unit. Zen Dog features craft hot dogs with homemade topping options, has been a reoccurring presence at many events around SLO County, developed a consistent following within the City of San Luis Obispo and expressed interest in opening a storefront location. The LLGC concessionaire space provides opportunity for a growing business that strives to provide high quality service to expand while providing a service to the golfers and the surrounding Laguna Lake community that lives adjacent to the facility. The menu specified for the LLGC will incorporate a variety of options including breakfast, salads, soups, sliders and hot dogs, as well as dietary options to meet diverse customer needs.

Concessionaire Operations at LLGC
Zen Dog’s current business structure allows for operations at the LLGC within the concessionaire facility and through the mobile food truck during non-operational hours.

With the current Pro-Shop under construction due to repairs for flood damage for an undetermined timeframe, Zen Dog will be able to initially operate solely out of the mobile unit within the parking lot of the LLGC. A discounted amended fee agreement will be in place during the Pro Shop renovation project while Zen Dog utilizes the mobile food truck.

Previous Council or Advisory Body Action
At the June 15, 2010 meeting, Council reviewed and approved the Concessionaire Agreement with Achievement House, INC. An Amendment and Restatement of the Concessionaire Agreement with Achievement House, INC was reviewed and approved at the Council meeting held October 19, 2010. An Extension of the Laguna Lake Golf Course Concessionaire Lease Agreement with Achievement House, INC and Reduction in Rental Payment was reviewed and approved by Council on December 01, 2015.

Policy Context
Parks and Recreation and Finance staff have reviewed the proposed Request for proposal for consistency with the City’s approved Financial Management Manual (Section 203 – Bidding Process).

Item 5i
Public Engagement
An in-person customer survey and informal polling was conducted at the Laguna Lake Golf Course during the month of November 2021 provided direction on the types of concessionaire services provided at the facility. An American cuisine, quick service items and continuation of snack and beverage sales were highlighted within the responses.

CONCURRENCE
The City’s Finance Department has provided input into the creation of the concessionaire agreement with Zen Dog, LLC.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.

FISCAL IMPACT
Budgeted: No Budget Year: 2021-22
Funding Identified: No
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:

Total $ $ $ $
By entering into this agreement with Zen Dog, LLC, the Laguna Lake Golf Course will realize $3,500 in improvements to the facility which are incorporated into the current budget as the tenant improvements will belong to the City. Since July 2021, the LLGC has expended approximately $4,000 for food and beverages (snacks) with gross revenues of $4,300, for a net of approximately $300. Under the proposed Agreement, LLGC will transfer all sales of snacks and beverages to the vendor. Those lost revenues are expected to be offset by the added golf rounds played and driving range use due to the enhanced amenity of the food and beverage service provided. The City has established a monthly rent of $800 for use of the concession at LLGC and a monthly rent of $350 for mobile food truck operation within the parking lot. Annual expected revenue will be $13,800 once repairs to the pro-shop are completed.

Item 5i
For comparison, Achievement House, LLC, through their operation of the 11th Hole Grill, was to pay $1,200 annually to offset increased cost for sewer utilities. In consideration for no rent, the Achievement House staff provided additional custodial services at and around the Pro-Shop.

ALTERNATIVES
Do not proceed with Zen Dog and Release a new RFP. With only two proposals received, Council could direct staff to re-release the RFP to see if it might attract more respondents.

This is not recommended due to the current economic climate as the City has not seen enough interest within the current RFP process as well as in past request in 2008 and 2010. The LLGC has been without a concessionaire since June 2021 which has caused the City to incorporate unforeseen food and beverage expenditures. Zen Dog has the ability and desire to provide a much need service that would enhance and attract new client base to the Laguna Lake Golf Course.

ATTACHMENTS
A - Food and Beverage Agreement at the Laguna Lake Golf Course with Zen Dog, LLC B - RFP Application, Zen Dog

FOOD AND BEVERAGE AGREEMENT AT THE LAGUNA LAKE GOLF COURSE

WITH ZEN DOG, LLC
This Agreement, made and entered into on , by
and between the CITY OF SAN LUIS OBISPO, hereinafter referred to as “CITY” and Zen Dog, LLC hereinafter referred to as “CONTRACTOR.”
WHEREAS, CITY is the owner and operator of Laguna Lake Golf Course, hereinafter “FACILITY;” and
WHEREAS, the City of San Luis Obispo’s Parks and Recreation Department’s mission is to inspire happiness in community members and its Strategic Plan calls for strategic partnerships with organizations that support recreational activities for all populations.

WHEREAS, a food service business enhances the user experience at the Laguna Lake Golf Course.

NOW, THEREFORE, in consideration of the mutual promises, agreements, covenants and conditions herein set forth, CITY and CONTRACTOR mutually agree, and covenant as follows:

1. TERM. The term of this Agreement shall be from March 15, 2022, through March 14, 2024.

An additional two-year extension of this Agreement may be made upon mutual agreement by the CITY and CONTRACTOR.

2. INCORPORATION BY REFERENCE. City RFP 2109-001 and Contractor's proposal dated October 28, 2021 is hereby incorporated in and made a part of this Agreement and attached as Exhibit A. To the extent that there are any conflicts between the Contractor’s fees and scope of work and the City’s terms and conditions, the City’s terms and conditions shall prevail, unless specifically agreed otherwise in writing signed by both parties.

3. CITY'S OBLIGATIONS. The CITY agrees to provide the existing kitchen space and food truck space when kitchen location is not available as is at the Laguna Lake Golf Course for the continuation of the proposed food and beverage service by CONTRACTOR.

DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

a. The CITY is under no obligation to maintain or provide equipment used in providing this space as CONTRACTOR has and will continue to do so itself. b. CITY will notify CONTRACTOR of any course closures planned or unplanned within a reasonable time period. All known monthly closures, either holiday or maintenance related will be communicated to CONTRACTOR at the beginning of each month.

CONTRACTOR acknowledges that the course may close due to inclement weather in the rainy months.

4. COMPENSATION. The CONTRACTOR shall pay a flat monthly fee, due on the first of each month to the CITY, in compliance with the pricing schedule attached hereto as Exhibit B, according to the terms and specifications of the referenced Request for Proposals. It is also understood that the applicable tax on the flat monthly fee payments shall be added to the monthly payment to the City, which the City will then pay to the State. The City is to receive the flat monthly fee amount as net, free and clear of all costs and charges arising from, or relating to, the premises. The monthly tax, paid directly to the City, shall be computed as follows: State prevailing tax rate multiplied by the agreed- upon flat monthly fee.

5. CONTRACTOR'S OBLIGATIONS. CONTRACTOR will provide food and beverage service at Laguna Lake Golf Course seven days a week, excluding specified holidays and closed dates. Hours of operation will be during standard facility operating hours adjusting hours for special events, weather, or maintenance closures. CONTRACTOR may close services in the event of FACILITY course closure. The concession shall be opened whenever events are scheduled. Expanded hours are permissible with the prior approval of the Director. Nothing herein contained shall be construed to authorize hours contrary to the laws governing such operations. CONTRACTOR shall:
a. Obtain and maintain all licenses and permits required in its name and at its own expense prior to starting operations.
b. Operate kitchen area at existing County Health Department standards and remain in compliance with State and CITY building codes.
c. Maintain a liquor license to sell beer and wine on the premises, contingent upon continual approval by the State Alcohol Beverage Control and shall maintain and provide to the DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

CITY liquor liability insurance for the term the license is in effect as described in CITY RFP.
d. Maintain a CITY business license to operate a business within the CITY limits for the term of the agreement.
e. Be responsible for all employees operating the kitchen and handling on-site sales. And be responsible for maintaining a clean and safe environment in the kitchen, dining areas, and serving area.
f. Be responsible for all food and beverage inventory on the premises. CONTRACTOR will be provided space to store supplies and is responsible for securing all inventory items during non-operating hours. CONTRACTOR shall keep the concession facility reasonably stocked and reasonably staffed to serve the patrons therefrom. g. Provide CITY updates to any hours of operation changes or closures, pricing or menu changes at least three (3) weeks prior to public release.

6. CONTRACTOR OBLIGATIONS: FOOD TRUCK OPERATIONS. CONTRACTOR may operate a food truck on-site during any period where FACILITY is not accessible, as permissible by the CITY Point of Contact. CONTRACTOR shall:
a. Provide quality food and beverages, excluding alcohol beverages, for purchase by employees and the general public.
b. Provide all self-contained equipment, supplies, and labor that is necessary to perform the service.
c. Maintain the safety, care, and cleanliness of operations. d. Haul away and dispose of all waste, water, grease, garbage, etc. generated through Contractor’s food preparation and sales activities
e. Obtain and maintain all licenses and permits required in its name and at its own expense prior to starting operations.
f. Maintain a C IT Y bu sin e ss license to operate a business within the CITY limits for the term of the agreement.
g. Be responsible for all employees operating the kitchen and handling on-site sales. And be responsible for maintaining a clean and safe environment in the kitchen and serving area. h. Be on premises to provide food service during the dates and times at the locations noted DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

above.

7. FACILITY ROLES AND RESPONSIBILTIES. The CITY of San Luis Obispo Parks and Recreation Director may authorize periodic modifications to operations at the Golf Course within the scope of his/her financial and/or operational authority, and to the Roles and Responsibilities as he/she may deem necessary or appropriate to the community partnership between the CITY and CONTRACTOR. Any written amendment or modifications to the Roles and Responsibilities shall be upon mutual consent of both parties.

8. UTILITIES. The CITY shall provide for water, sewer, electricity, trash, rubbish and garbage removal services within FACILTY operations. CONTRACTOR will have access to garbage services for Food Truck operations while on the premises.

9. OWNERSHIP OF IMPROVEMENTS. All improvements shall become the sole property of the CITY of San Luis Obispo and shall remain the sole property of the CITY of San Luis Obispo upon termination or non-renewal of the Agreement. a. An improvement is defined as a fixture permanently affixed to the FACILITY, whether installed by CONTRACTOR or CITY.

10. COMMUNICATIONS
a. CITY Point of Contact. The CITY Recreation Manager is the CITY representative that CONTRACTOR shall contact for all issues related to the use of the FACILITY and the operation of this agreement. All contacts must be in writing, including e-mail. If the CITY Recreation Manager cannot be reached, the Recreation Coordinator - Golf Operations may be contacted.
b. Written Notice. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows:

CITY: Parks & Recreation Department
Attn: Devin Hyfield, Recreation Manager
1341 Nipomo Street
San Luis Obispo, CA 93401
CONTRACTOR: Zen Dog
Attn: Nick Regalia
319 Stimson Ave
Pismo Beach, CA 93449
DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

SPECIAL TERMS AND CONDITIONS

1. Subcontracting. Unless otherwise specified in this solicitation, the Contractor shall not subcontract any portion of the work without the prior written consent of the City. The ability to subcontract may be further limited by the Special Conditions. Subcontracting without the prior consent of the City shall constitute a material breach of the agreement and may result in termination of the contract for default.

2. Responsibility as Employer. The employee(s) of the Contractor shall be considered to be at all times employee(s) of Contractor solely, and not an employee(s) or agent(s) of the City or any of its departments for any purpose. The Contractor shall provide physically competent employee(s) capable of performing the work as required who can interact with the public, visitors, patrons, and City employees in a professional, positive and pleasant manner. The City may require the Contractor to remove from the Facility any employee of Contractor who the City deems does not meet these standards. All employees of the Contractor shall wear proper identification.

3. Equal Opportunity and Anti-Discrimination. The City of San Luis Obispo complies with all laws prohibiting discrimination on the basis of age, race, gender, religion, creed, political affiliation, sexual orientation, physical or mental disability, color or national origin, and therefore is committed to assuring equal opportunity in the award of contracts and encourages small, local, minority, and female-owned businesses to participate. During the performance of this contract, the Contractor agrees it will not discriminate or permit discrimination in its hiring practices or in its performance of the contract. The Contractor shall strictly adhere to the equal employment opportunity requirements and any applicable requirements established by the State of California, San Luis Obispo County and the federal government. The Contractor further acknowledges and agrees to provide the City with all information and documentation that may be requested by the City from time to time regarding the solicitation, selection, treatment, and payment of subcontractors, suppliers, and vendors in connection with this contract.

4. Minimum Wage Requirements. The Contractor shall comply with all minimum wage requirements, such as Living Wage requirements, minimum wages based on Federal Law, and the provisions of any other employment laws, as may be applicable to this contract.

5. Purchase of other items. The City reserves the right to purchase other related goods or services, not listed in the solicitation, during the contract term. When such requirements are identified, the City may request a price quote from the Contractor on the contract. The City, at its sole discretion, will determine if the prices offered are reasonable, and may choose to purchase the goods or services from the Contractor, another contract vendor, or a non-contract vendor.

6. Price Adjustments based on Price Index. It is the Contractor’s responsibility to request any pricing adjustment under this provision. For any adjustment to commence on the first day of any new period, the Contractor’s request for adjustment should be submitted at least thirty (30) days prior to expiration of the current 12-month period of the contract. The adjustment requested should not be in excess of the relevant pricing index change. If no adjustment request is received from the Contractor at least thirty (30) days prior to expiration of the current 12-month period of the contract, the City will assume that the Contractor has agreed that the contract term will continue without pricing adjustment. Any adjustment request received after the commencement DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

of a new 12- month period will not be considered. The City reserves the right to negotiate lower pricing for the additional periods based on market research information or other factors that influence price. The City reserves the right to apply any reduction in pricing for the additional periods based on the downward movement of the applicable index. The City reserves the right to reject any price adjustments submitted by the Contractor and/or to not exercise any otherwise available option period based on such price adjustments.

7. City Facility and Equipment Maintenance and Repairs. During the term of the contract, the Contractor, at its own expense, shall to the satisfaction of the City, keep and maintain the premises and all improvements and City-provided equipment thereon in good and sanitary order, condition, and repair for its useful life, consistent with similar operations in California counties. The Contractor may utilize its own equipment, as needed, to upgrade the efficiency and quality of its services. The Contractor must clearly label and identify its owned assets located on the premises. Upon expiration or termination hereof, the Contractor shall surrender and deliver up to the City and premises all appliances and equipment provided by the City in good and useable condition, normal wear and tear excepted.

8. Contractors Equipment Maintenance and Repairs. All equipment provided by the Contractor shall remain the property of the Contractor, and any maintenance required thereon shall be the responsibility of the Contractor. The City shall incur no obligation for repairs or maintenance of equipment provided by Contractor.

9. Conditions of Premises. Contractor shall, at its expense, maintain the premises in a clean, attractive, and orderly condition. The Contractor shall be responsible for the prompt removal of all trash, litter, and debris which accumulates on or about the premises, which is attributable, directly or indirectly to or arising out of its use, specifically including any litter left by the Contractor, its visitors or spectators. The Contractor shall deposit all such trash, litter and debris in the containers provided by the City for pick-up at locations to be determined by the City. The Contractor shall comply with all laws, rules, regulations, codes, ordinance, directives, and guidelines, whether state, federal, or local, including, but not limited to, all health inspection laws.

10. Security. The City of San Luis Obispo has its own security in place within FACILITY.

11. Standards. The successful Contractor shall at all times comply with all rules, regulations, and ordinances of the City and other governmental agencies having jurisdiction. The successful Contractor shall further take all precautions and extreme care to conduct its activities in a safe and prudent manner with respect to its agents, employees, members, visitors, and participants in any activity within the premises.

12. Inspection. For the purpose of inspection, the City reserves the right to enter upon any part of the premises at any time during the period the business is to be open under the terms of the contract

13. The City Reserves the Right To:
a. Approve promotional giveaways by tenants or event sponsors, which may conflict DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

with the food and beverage sales.
b. Approve the use of outside firms for special events or other functions. Special catering fees may be established for these types of special events or other functions. c. Approve all advertising sales. The City may request use of a specific product by the successful Contractor at a price to be competitive with existing market price. d. Allow selected groups to provide specialty food items at selected events, for example, promotional/fund-raising golfing events. In such cases, a best-effort basis will be made to have the successful Contractor provide soft drinks, coffee, tea, hot chocolate, and beer, or other liquid refreshments.
e. Approve all novelty and program sales. The successful Contractor may be requested to act as agent for the City for a particular event, program or service, in which case a negotiated fee or percentage shall be agreed upon for services rendered. Such fee shall be agreed upon between the Director or designee and the successful Contractor. f. Limit hours of operation of selling of particular items, as a result of golfing event requirements or event compatibility.
g. Engage in, or contract for, outside catering services for only City-sponsored events. h. Not operate off-site functions from the facilities or remove equipment except to other facilities owned by the City, unless the equipment is solely owned by the City.

DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.

ATTEST: CITY OF SAN LUIS OBISPO:
___________________________ ___________________________ Teresa Purrington, City Clerk Erica Stewart, Mayor
APPROVED AS TO FORM: CONTRACTOR
__________________________ __________________________
Christine Dietrick, City Attorney Zen Dog, LLC
DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

EXHBIT B

PROPOSED RATE
The Contractor proposes to pay the City of San Luis Obispo the following, if awarded the contract:

Flat Monthly Fee in the amount of $800 for the operation of the golf course concession, net of applicable taxes
Flat Monthly Fee in the amount of $350 for operation of Contractor’s Food Truck DocuSign Envelope ID: 4917CEE2-D588-4E0E-8355-09ABC97F0D01

Laguna Lake Golf Course Food/Beverage Concession RFP

1. Please provide details on how the service will be provided – site improvements, beverage cart, self-contained structure, or other alternatives. Provide information on the types of improvements needed, an approximate cost for the improvements, and square footage needed to operate the service.

At Zen Dog, we operate with the highest standards in place. From sanitation to food prep, cleanliness and quality are our top priorities. The existing footprint of the building will be the perfect amount of space for us to efficiently produce quality products. We will be leasing some additional kitchen equipment needed to get started (griddle, stove, fryer, fridge, freezer, ect.), with no further improvements required at this time.

We have an existing Zen Dog golf cart that we will modify in order to serve drinks and snacks on the course.

2. Please provide a description of how the sale and storage of alcohol (beer and wine) will be handled on site.

Both the LEAD training and Responsible Beverage Service training with ABC will be required for employment. Liquor will be stored in a locked area during all business and non business hours.

3. Ability to obtain necessary insurance certificates to cover general liability and liquor liability, if a license to serve alcohol is planned by the proposer.

We already have general liability with McGee Insurance Agency and I currently have them working up a quote to include liquor liability.

4. Ability to meet the qualifications to obtain the appropriate beer and wine license . (e.g., Type 41) to serve alcohol through Alcohol Beverage Control.

I have worked with DH Compliance in Santa Rosa, CA in the past to help meet the necessary qualifications to obtain a beer and wine license.

5. Ability to obtain a business license from the City of San Luis Obispo.

Our business license with the City of SLO is #113693.

6. Describe the background and experience of the vendor in providing food and beverage services. Indicate the amount of experience in alcohol sales.

Zen Dog has been in operation since 2016, serving the broader San Luis Obispo region. We have worked events such as: SLO Food Truck Night, Whalebird Komucha, Pismo Beach 4th of July Festival, Whale Rock Music Festival, and Pismo Beach Clam Festival to name a few. We also cater large weddings, and private events as well!

I owned and operated a wine bar for 2 years before starting Zen Dog, so I am fluent in the laws and restrictions provided by the ABC. I was responsible for being up to date with current laws, as well as training my entire staff.

7. Indicate the proposed hours of operation for the food/beverage service.

We will start by being open 10AM-6PM Monday-Sunday. We will be open later as needed for any special events and for all Night Golf dates.

8. Provide a sample menu of the types of food that will be served and a list of prices.

Menu should include items for breakfast, lunch, afternoon snack and dinner which feature health conscience options and meet the wide variety of LLGC clientele from youth to senior.

Breakfast Sandwiches/Burritos- Roasted red peppers, local eggs, bacon, cheese, home fries $8 Pancakes and waffles topped with fresh local fruit $10
100% beef Zen Dogs with a variety of homemade topping options $6 Specialty Zen Dogs:

1. Mahalo- Tequila pineapple relish $7

2. Animal Style- Grilled onions, cheddar cheese, topped with 1,000 island $7

3. Kimchi- Homemade kimchi topped with wasabi mayo $7

4. Vegan Beyond Meat Sausages- available with the toppings above $8 L.T.A. with Hoisin Sauce (Lettuce, Tomato, Avocado with a housemade ginger hoisin) $8 Cobb Salad, Chicken Caesar, Pear and Walnut $10
Chips, drinks, fruit and healthy snacks will also be available

9. Describe how the food service areas will be maintained and cleaned and a high degree of customer service attained.

All areas will be maintained, sanitized, and cleaned according to County Health Guidelines and in accordance with the ServSafe Food Safety program.

10. Describe how your business will operate sustainably through a commitment to proper waste separation, reusable materials, and potential operations that include less reliance on fossil fuels.

We are committed to reducing waste by implementing a compost program for food, as well as a recycling program for any other waste. All products used to serve food and beverages will be sustainable and eco-friendly. We source local produce and products whenever possible, and want to support local farmers by buying directly through them.

11. Provide three references with direct knowledge of the proposer’s ability to provide the service being proposed.

1. Ava-Morales-Davis (805) 781-7027 Recreation Coordinator, City of SLO

2. Nicholas Trujillo (805) 395-1440 Owner of BoatYard Marketplace and Baycruisers Electric Boat Rentals

3. Brendan and Celeste Gough (805) 801-2291 Owners/operator of Liquid Gravity Brewing

4. Jake Pritzlaff (805) 712-8442 Owner of Whalebird Kombucha

12. The City will consider a long-term agreement with the proposer, subject to negotiation of terms agreeable to both parties. Financial compensation for improvements made on site to comply with health and safety regulations will be negotiated as a part of the agreement. Proposals should indicate preliminary terms for the agreement including rent, percentage of gross revenues to be given to the City, and length of the agreement.

I am looking for a one-year lease with the option to extend to a long-term option at the end of the one-year period. Being members of the community ourselves, we plan to contribute a portion of profits to different community groups such as the Boys & Girls Club, CASA Court Appointed Special Advocates, and Jack’s Helping Hand. The city and community of SLO has done so much for us that once established, we plan on building a “Zen” Community account where we will be in the position to support people in need throughout all of SLO County.

Item 6a
Department: Finance
Cost Center: 2001
For Agenda of: 3/1/2022
Placement: Study Session
Estimated Time: 60 minutes
FROM: Derek Johnson, City Manager
Prepared By: Brigitte Elke, Finance Director
SUBJECT: AMERICAN RESCUE PLAN ACT AND STATE AND LOCAL FISCAL

RECOVERY FUNDS

RECOMMENDATION

1. Direct Staff to return at the 2022-2023 Supplemental Budget to appropriate $3.5 million towards affordable housing that targets extremely low and very low income and/or homeless persons most impacted by COVID-19; $1 million to the infrastructure investment fund; and $100,000 to augment the Human Relations Commission annual Grants in Aid (GIA) cycle one time to further support health and human services programs or projects; or

2. Provide other strategic budget direction to staff on the use of the unappropriated portion of American Rescue Plan Act (ARPA) funds (in the amount of $4.6 million) for consideration with the 2022-2023 Supplemental Budget.

REPORT-IN-BRIEF
The purpose of this agenda item is to provide strategic budget direction to staff to return with the Supplemental Budget for the 2022-2023 fiscal year that aligns eligible expenses with the Final Rule as promulgated by the U.S. Treasury Department on January 22, 2022. Clarifying details of the Final Rule and other important relevant information are included in various footnotes on each page of this report.

The Supplemental Budget is the second year of the City’s two-year financial plan and has historically constituted minor amendments to planned expenditures. This year is different as the amount of the American Rescue Plan Act funding increased from the projected $8.9 million to $13.5 million and $4.6 million is available for appropriation with the Supplemental Budget.

Other minor adjustments other than ARPA funding will be recommended for the Supplemental Budget and yet, this historic one-time funding in amounts that exceed original forecasts are out of cycle with the financial planning process and provide the opportunity for the Council to afford direction in advance of the scheduled Supplemental Budget hearing on June 7, 2022.

Item 6a
Early clarity and specificity will help align funding in the Supplemental Budget with other Major City Goal work plan efforts and position the city to support any unique opportunities that could benefit from one time funding. Because of the size and restrictions of the funding, early direction and planning will help position the City to efficiently direct funding to eligible needs and uses and make any adjustments needed to work plans On February 15, 2022, the City Council received a recommendation during mid-year budget report from the City Manager based on Council comments about the possible use of unappropriated ARPA funding in the amount of $4.6 million. The City Council provided direction to return with recommendations to prioritize $3.5 million of ARPA funding towards housing and homelessness and $100,0001for additional assistance to local nonprofits, leaving $1 million which is recommended to go toward the Infrastructure Investment Fund.

The staff recommendation for funding appropriation amounts are based on an analysis of the Final Rule and alignment with the City’s Four Major City Goals. Other options are available in the three eligible categories if the City Council wants to split the amount between uses. More details about these categories are discussed below.

DISCUSSION
In March 2021, Congress approved the American Rescue Plan Act (ARPA) which provided funding to state, county, and local jurisdictions through the Coronavirus State and Local Fiscal Recovery Funds program (SLFRF). The program was designed to provide vital resources to state, county, and local governments to respond to the pandemic and its economic effects and to replace revenue loss due to the public health emergency, preventing reductions to government services.

To provide further guidance as to the use of the funding, the U.S. Department of the Treasury issued an interim final rule in May 2021 which was followed by the Final Rule on January 22, 2022. Though the Final Rule did not establish any additional funding options, it streamlined the use of funding and reduced the administrative burden for jurisdictions and set forth four different eligible use categories. Staff’s recommendation for specific appropriation amounts aligns Final Rule permissible uses and with Major City Goal priorities. If Council pursues different appropriations, Staff recommends that the City Council still evaluate and align funding with Major City Goal priorities.

1 The $100,000 was predicated on a recommendation by Human Relations Commission staff that justifiable funding requests exceed the budgeted Grants in Aid (GIA) general fund budget of $150,000 for the 2022- 2023 fiscal year.

Item 6a
Specifically, the ARPA provides that SLFRF funds may be used to:
a) To respond to the public health emergency or its negative economic impacts, including assistance to households, housing, homelessness, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality (1. Economic Recovery and Public Health).
b) To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers (2. Premium Pay) c) For the provision of government services to the extent of the reduction in revenue due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency (3. Revenue Loss); and d) To make necessary investments in water, sewer, or broadband infrastructure (4.

Utilities Infrastructure).

More details about the four categories are provided below and this report will outline options under the Final Rule as well as the City’s funding appropriations included in the 2021-23 Financial Plan (Table A) which already considers $8.9 million under revenue loss, leaving $1.1 million under this most flexible spending category (REVENUE LOSS) and $3.5 million that needs to be directly tied to the Final Rule’s other three funding categories for a total of $4.6 million.

Item 6a
Table A
# CATEGORIES 2021-2023

FINANCIAL
PLAN
2022-23

SUPPLEMENTAL
BUDGET
(RECOMMENDED)

MAJOR CITY
GOAL

PRIORITY
1 Economic And Public
Health Impacts
$3,564,4672 Housing And
Homelessness3
2 Premium Pay for
Eligible Workers
3 Revenue Loss $8.9 million $10 million4 Economic
Recovery,
Resiliency and
Fiscal
Sustainability5
4 Utilities Infrastructure
5 Available For
Appropriation
$0 $0
6 TOTAL: $8.9 million $13,564,467

2 $3.4 available for appropriation under three categories (Economic and Public Health, Premium Pay for Eligible Workers and Utilities Infrastructure. Staff is recommending $3.3 million for housing and/or homelessness and $100,000 for the HRC based on previous Council discussions and the fact that this eligible use aligns with the City’s Major City Goal and otherwise provides services or support traditionally offered by the City of San Luis Obispo.
3 In order to expand housing options for all, continue to facilitate the production of housing, including the necessary supporting infrastructure, with an emphasis on affordable and workforce housing. Collaborate with local non-profit partners, and the county, the state and federal government to discover and implement comprehensive and effective strategies to reduce chronic homelessness. 4$1.1 (Revenue Loss) is recommended to be allocated in the infrastructure investment fund for critical infrastructure (MCG) and the Final Rule allowances for “Road building & maintenance and other infrastructure”. Specific projects would be recommended in the 2022-2023 Supplemental Budget. 5 In collaboration with local partners, continue to support economic recovery for all from the COVID pandemic and support a thriving local economy by supporting local businesses, arts and culture, downtown vitality, practicing fiscal responsibility, paying down unfunded pension liabilities, and investing in critical infrastructure.

Item 6a

1. Economic and Public Health Impacts
The SLFRF program provides resources for governments to meet the public health and economic needs of those impacted by the pandemic in their communities, as well as address longstanding health and economic disparities resulting in more severe impacts from the pandemic. The eligible use category to respond to public health and negative economic impacts is organized around the types of assistance and includes several sub-categories:
 Public Health  Assistance to households 6
 Assistance to small businesses  Assistance to nonprofit organizations 7  Aid to impacted industries (tourism,
hospitality)
 Public sector capacity
In general, to identify eligible uses of funds in this category, recipients should (1) identify a COVID-19 public health or economic impact on an individual or class (i.e., a group) and (2) design a program that responds to that impact. Responses should be related and reasonably proportional to the harm identified and reasonably designed to benefit those impacted.

Table B
Step Identify COVID-19 public health
or economic impact
Design a response that
addresses or responds to the
impact
Analysis  Can identify impact to a
specific household, business,
or nonprofit or to a class of
households, businesses, or
nonprofits.
 Can also identify
disproportionate impacts, or
more severe impacts, to a
specific beneficiary or to a
class
 Types of responses can
include a program, service,
or capital expenditure
 Response should be related
& reasonably proportional to
the harm
 Response should also be
reasonably designed to
benefit impacted individual
or class.

Simplifying
Presumptions
 Final Rule presumes certain
populations & classes are
impacted & disproportionately
impact.
 Final Rule provides nonexhaustive list of
enumerated eligible uses
that respond to pandemic

6 Includes housing and homelessness
7 The County of SLO Community Foundation has offered to administer any grants should the Council be inclined to delegate grant making authority.

Item 6a
and disproportionate
impacts.

Enumerated eligible uses for a municipality such as San Luis Obispo:

Table C
Responding to the public health emergency
 Public Communication Efforts  PPE/protective supplies  Support for prevention, mitigation, or
other services in childcare facilities
 Support for prevention and mitigation
strategies in small businesses,
nonprofits, and impacted industries
 Emergency operations centers &
emergency response equipment (e.g.,
emergency response radio systems.
 Paid family & medical leave for public
employees to enable compliance with
COVID-19 public health precautions
Behavioral Health Care
 Crisis care, diversion programs,
outreach to individuals not yet
engaged in treatment, harm reduction
& long-term recovery support
 Behavioral health facilities &
equipment.
 Referrals to trauma recovery services
for victims of crime
 Law enforcement officers focused on
advancing community policing
Negative Economic Impacts
 Assistance to low- or moderateincome households * Households that experienced unemployment
 Households that experienced
increased food or housing insecurity
 When providing affordable housing
programs: households that qualify for
the National Housing Trust Fund and
Home Investment Partnerships
Program.
8 8 Should council support the Staff recommendation or provide direction for this category, it is recommended that the City allocate funding to affordable housing projects that meet the criteria established by the City Council in Resolution #9263 (2001 Series) (Attachment A) in addition to all applicable rules and requirements under the SLFRF Final Rule. The criteria under the Resolution include Eligibility, Need, Suitability, Timing, Financial Effectiveness and Readiness. These criteria are already by the City Council and provide Staff with the guidance needed to recommend approval of requests for funding of qualified affordable housing projects. City Council approval of each award would continue to be required to make the appropriate findings under ARPA’s SLFRF Final Rule requirements.

The City’s Affordable Housing Fund currently has an uncommitted balance of $200,724 which is not sufficient to meet short-term needs and City Staff has had several conversations with Affordable Housing Providers about the immediate and near- term need for additional funding to complete projects. and thus smaller funding request may be brought forward to the City Council prior to the formal NOFA process.

Item 6a
 Programs or services to support longterm housing security, including development of affordable housing &
permanent supportive housing.9
 Improvements to vacant and
abandoned properties, including
rehabilitation or maintenance,
renovation, removal and remediation
of environmental contaminants,
demolition or deconstruction,
greening/vacant lot cleanup &
conversion to affordable housing.

Assistance to Nonprofits (501(c)(3) or 501(c)(19) tax-exempt organizations)  Loans or grants to mitigate financial
hardship
 Technical or in-kind assistance and
services that mitigate negative
economic impacts directly tied to the
pandemic
Restore and Bolster Public Sector Capacity
 Police officers  Firefighters
 Emergency medical responders  Dispatchers and supervisor personnel directly supporting public safety staff.
 Employees involved in providing
medical and other physical or mental
health services to patients
 Child, elder, or family care employees
 Restoring pre-pandemic employment
for the same positions that existed on
January 27, 2020, but were unfilled or
eliminated as of March 3, 2021.

Supporting & Retaining Public Sector Workers
 Provide additional funding for
employees who experienced pay
reductions or were furloughed
 Provide worker retention incentives,
incl. reasonable increases in
compensation.
 Covering administrative cost
associated with administering the
hiring, support, & retention programs.

Effective Service Delivery
 Community outreach & engagement
activities
 Capacity building resources to support
using data and evidence, incl. hiring
staff, consultants, or technical
assistance support
 Technology infrastructure to improve
access to and the user experience of
government IT systems, as well as
technology improvements to increase

9 This allowable subcategory aligns with the City’s Housing and Homelessness Major City Goals.

Item 6a
public access and delivery of
government programs and services
*Note: low- or moderate-income households are those with 1) income at or below 300% of the Federal Poverty Guidelines 2) income at or below 65% of the area median income for the county.

Item 6a

2. PREMIUM PAY FOR ELIGIBLE WORKERS
The second permissible category is premium pay for eligible workers. General details are provided below.

Table D
Premium Pay for Eligible workers (Eligible workers include workers “needed to maintain continuity of operations of essential critical infrastructure sectors.)  Emergency Response  Sanitation, disinfection & cleaning  Maintenance  Grocery stores, restaurants,
 Behavioral Health  Family & Childcare
 Local workforce  Solid waste & hazardous materials
clean-up
 Hotel & commercial lodging
facilities that are used for COVID19 mitigation & containment Note: Essential Work cannot be performed while teleworking from a residence and involves a) regular, in-person interactions with the public or coworkers, b) regular physical handling of items that were handled by the public or coworkers.

3. Replacing Lost Public Sector Revenue
The City of San Luis Obispo can use SLFRF funds on government services up to the revenue loss amount, whether that be the standard allowance amount of $10 million, or the amount calculated using the above approach. Government services generally include any service traditionally provided by a government unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive:
 Road building & maintenance and
other infrastructure.
 Environmental remediation.
 General government
administration, staff, and
administrative facilities.
 Provision of police, fire, and other
public safety services (incl.
purchase of fire trucks & policy
vehicle.

Public Sector Revenue Loss is the most flexible eligible use category under the SLFRF program, and funds are subject to streamlined reporting and compliance requirements. The City needs to be mindful that certain restrictions, which are detailed further in the Restrictions on Use section and apply to all uses of funds, apply to government services as well.

Item 6a
With the 2021-23 Financial Plan, the City has already appropriated $8.9 million to its Infrastructure Investment Fund to replenish capital funding lost to operating cost in response to the community’s needs and to assist with economic recovery. The funding was appropriated for the Prado Bridge replacement which has already obtained all CEQA related permits and is a fully federalized project and a critical piece of the Prado Road corridor. Given the scope of the City’s pending CIP program, Staff recommends that an additional $1 million be added to the infrastructure investment fund given the price volatility in the construction sector over the next 16 months.

Framework for Eligible Uses Beyond Those Enumerated
The City of San Luis Obispo has broad flexibility to identify and respond to other pandemic impacts and serve other populations that experienced pandemic impacts, beyond the enumerated uses and presumed eligible populations. However, the City should undergo the following steps to decide whether the project is eligible:

Table E
Step Identify COVID-19 public health or
economic impact
Design a response that addresses
or responds to the impact
Analysis  Can identify impact to a specific
household, business, or nonprofit or to
a class of households, businesses, or
nonprofits.
 Can also identify disproportionate
impacts, or more severe impacts, to a
specific beneficiary or to a class
 Types of responses can include a
program, service, or capital
expenditure
 Response should be related &
reasonably proportional to the harm
 Response should also be
reasonably designed to benefit
impacted individual or class.

1. Identify a COVID-19 public health or negative economic impact on an individual or a class. Recipients should identify an individual or class that is “impacted” or “disproportionately impacted” by the COVID-19 public health emergency or its negative economic impacts as well as the specific impact itself.  “Impacted” entities are those impacted by the disease itself or the harmful consequences of the economic disruptions resulting from or exacerbated by the COVID-19 public health emergency. For example, an individual who lost their job or a small business that saw lower revenue during a period of closure would both have experienced impacts of the pandemic.
 “Disproportionately impacted” entities are those that experienced disproportionate public health or economic outcomes from the pandemic; Treasury recognizes that pre-existing disparities, in many cases, amplified the impacts of the pandemic, causing more severe impacts in underserved communities. For example, a household living in a neighborhood with limited access to medical care and healthy foods may have faced health disparities before the pandemic, like a higher rate of chronic health conditions, that contributed to more severe health outcomes during the COVID-19 pandemic.

Item 6a

2. The city may designate classes that experienced disproportionate impact, by assessing the impacts of the pandemic and finding that some populations experienced meaningfully more severe impacts than the general public. To determine these disproportionate impacts, the city:
 May designate classes based on academic or government research publications (such as the citations provided in the supplementary information in the final rule), through analysis of their own data, or through analysis of other existing data sources.
 May also consider qualitative research and sources to augment their analysis, or when quantitative data is not readily available. Such sources might include resident interviews or feedback from relevant state and local agencies, such as public health departments or social services departments.  Should consider the quality of the research, data, and applicability of analysis to their determination in all cases.

This report does not address assistance to Small Businesses since the City has invested substantial funding during 2020 and 2021 to assist small businesses including:
 50 parklets for restaurants &
barber shops
 Tenant improvement program
 Small Business assistance grants  Shop Local Campaign  Downtown Activation
Water, Sewer & Broadband Infrastructure The final rule significantly broadens eligible broadband infrastructure investments to address challenges with broadband access, affordability, and reliability, and adds additional eligible water and sewer infrastructure investments, including a broader range of lead remediation and stormwater management projects. The following are broad details of eligible projects under this category.

Table F
Infrastructure – Eligible projects
 Culvert repair, resizing, and
removal.
 Stormwater infrastructure
 Cybersecurity Investments
Restrictions on Use
While recipients such as the City of San Luis Obispo have considerable flexibility to use the SLFRF program to address the diverse needs of its community, some restrictions on use of funds apply.

Item 6a
 Offset a reduction in net tax
revenue resulting from a change in
law, regulations or administrative
interpretation.
 Deposits into Pension Funds to
reduce accrued, unfunded liability.
 No debt service or replenishing of
financial reserves
 No satisfaction of settlements and
judgments
 Any use or projects that conflict with
or contravenes the purpose of
ARPA.

Next steps
With direction from the City Council, staff will return in June 2022 at the Budget Supplement and provide specific recommendations for the use of $4.6 million in compliance with the U.S. Treasury’s Final Rule that best serves the need of the community and the Council’s Major City Goals. A budgetary resolution would be brought forth to the City Council to document the full $13.5 million in appropriations for future clarity on reporting and for transparency.

Previous Council or Advisory Body Action
The Council acted on $8.9 million of SLFRF with the adoption of the 2021-23 Financial Plan.

Policy Context
The use of SLFRF have to follow the U.S. Treasury’s Final Rule and should be aligned with community needs as well as the City’s adopted Major City Goals.

Public Engagement
Public Comment on the item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. Final appropriation as part of the supplemental budget will be done at a public hearing on June 1, 2022, or thereafter if continued.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this report because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.

FISCAL IMPACT
Budgeted: No Budget Year: 2022-23
Funding Identified: Yes

Item 6a
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal $13,564,467
Fees
Total $ $ $ $
The city, like many other state, county, and local jurisdictions, has experienced a tremendous revenue loss in several major tax and fee categories during 2020 into 2021.

It has also used its resources to support the community and assist with its economic recovery. The funding received through SLFRF under ARPA will backfill $10 million in revenue loss and provide an additional $3.5 million for investments in accordance with the U.S. Treasury’s Final Rule as outlined in this report and $1.1 million that can generally be appropriated. Since the second installment of the funding will be received in July 2022, the Financial Plan Supplement will establish the use and appropriation of the funding through Council deliberation and direction and public input.

ALTERNATIVES
Council could pursue the other following alternatives:

1. Continue the item and provide no action and defer further direction to the June 7, 2022, Supplemental Budget Hearing. This is not recommended as funds must be appropriated by 2024 and spent by 2026 and any appropriations are likely going to take a few years to be fully spent and there is a strong likelihood that desirable projects consistent with the Housing and Homeless MCG and Final Rule will need a pledge of funding prior to June 2022.

2. Form an ad-hoc committee of City Council members to provide a recommendation to the City Council on June 7, 2022.

3. Request additional information and schedule an additional study session prior to June 7, 2022, Supplemental Budget Hearing.

ATTACHMENT
A – Resolution No. 9263 (2001 Series)

RESOLUTION NO. 9263 ( 2001 Series)

A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO

ESTABLISHING AWARD CRITERIA AND A REVIEW PROCESS FOR
ALLOCATING AFFORDABLE HOUSING FUNDS.

WHEREAS, the City Council adopted Ordinance 1348 ( 1999 Series) establishing an Affordable Housing Fund for the collection and distribution of in -lieu housing fees to promote affordable housing in San Luis Obispo; and
WHEREAS, as a result of the in -lieu fee payments to the City under the Inclusionary Housing Ordinance, the City has a balance of approximately $ 400,000 in the Affordable Housing Fund, and this fund is available to support affordable housing in San Luis Obispo at the sole discretion of the City Council; and WHEREAS, the City received requests by Judson Terrace Lodge and Sojourn Services, Inc. for the use of $215, 000 and $25,000, respectively, of Affordable Housing Funds; and to evaluate these and future funding requests in a fair and timely manner, Council wishes to establish award criteria and a review process for the Affordable Housing Fund; and
WHEREAS, the City Council held a meeting on December 4, 2001 to consider possible award criteria that balance the need to provide a fair, open and timely funding award process with the desire to maintain funding flexibility to address local housing needs and opportunities;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that based on its deliberations, public comments, the staff report, and on State law, the following:

SECTION 1. Affordable Housing Fund Award Criteria. The City Council establishes the following criteria for evaluating requests for use of the Affordable Housing Fund:

1. Eligibility. Use of the Affordable Housing Fund (AHF) for the requested purpose will increase or improve the City' s affordable housing inventory and promote General Plan policies regarding housing.

2. Need. There exists a substantial or overarching need for the type of housing to be assisted.

3. Suitability. The project to be assisted is appropriate for its location, both in terms of land use and design.

4. Timing. The project would be better serve the City' s needs if it were built immediately as opposed to later.

R 9263

I_
l
I O
Resolution No. 9263 ( 2001 Series)

5. Financial Effectiveness. But for the requested assistance, the project would not be economically feasible; or AHF funding " leverages" significant additional funding from other sources.

6. Readiness. The project has all necessary City approvals and is ready to proceed.

SECTION 2. Use ofAward Criteria. The Council will apply the above criteria when evaluating funding requests. Requests that most closely meet the criteria will be given the most favorable consideration in allocating Affordable Housing Funds. Under no circumstances is Council obligated to award Affordable Housing Funds. The decision whether to allocate funds and how much is at the sole discretion of the City Council whose decision is final.

SECTION 3. Review Process. The Community Development Director shall be responsible for processing requests for use of Affordable Housing Funds. Such requests shall usually be considered concurrent with review of the City' s Community Development Block Grant Program. The Director is authorized to bring urgent funding requests to the Council at any time, irrespective of the above review cycle.

SECTION 4. Funding Agreements. Recipients of Affordable Housing Funds shall be required to execute an agreement with the City describing the purpose and terms of funding. The project or program to be funded shall meet the City' s Affordable Housing Standards, including the requirement for an affordability term of at least thirty (30) years, and City equity participation in the project where feasible and appropriate. The City Administrative Officer is authorized to execute such agreements for the City.

Upon motion of Council Member Schwartz; seconded by Vice Mayor Marx, and on the following roll call vote:

AYES: Council Members Ewan, Mulholland,, Schwartz, Vice Mayor Marx, and Mayor Settle
NOES: None
ABSENT: None
The foregoing resolution was adopted this
4h
day of December 2001
ATTE T:
r
Lee Price, City Clerk.

1. Resolution No. 9263 ( 2001 Series)

APPROVED AS TO FORM:

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: March 1, 2022
TO: Mayor and Council
FROM: Michael Codron, Director of Community Development VIA: Derek Johnson, City Manager
SUBJECT: Item #6.a – American Rescue Plan Act and State and Local Fiscal Recovery Funds
During the course of preparing the Council Agenda Report for this item, an incorrect and out of date Affordable Housing Fund balance was published in the report.

The correct Affordable Housing Fund balance is: $1,645,413.03 The fund balance previously reported did not account for recent changes to the fund and assumed that an award of $1.3 Million in support of People’s Self-Help Housing Corporation’s Broad Street Place project was not paid, when in fact it was paid. The error was administrative on the part of staff in Community Development. The Finance Department maintains the true and accurate account balance for this fund. The additional balance that is available in the Affordable Housing Fund provides the City Council with more flexibility regarding the projects that it wants to fund and support going forward. The City’s Affordable Housing Fund is suited to smaller awards for more projects, whereas the ARPA funding, which has additional criteria and reporting requirements, would be better to award in one or two grants.

Item 6b
Department: Community Development
Cost Center: 4003
For Agenda of: 3/1/2022
Placement: Study Session
Estimated Time: 120 minutes
FROM: Michael Codron, Community Development Director
Prepared By: Rachel Cohen, Associate Planner and
Teresa McClish, Housing Policy and Programs Manager
SUBJECT: INCLUSIONARY HOUSING ORDINANCE UPDATE AND BELOW

MARKET RATE HOUSING ADMINISTRATION STUDY SESSION

RECOMMENDATION
Receive a presentation and provide feedback on the City’s current inclusionary housing requirements, a preliminary inclusionary housing update recommendation, and the progress to date on the onboarding of a Below Market Rate (BMR) Housing Administrator.

REPORT-IN-BRIEF
This Study Session provides background information and analysis of the City’s current affordable housing requirements, a preliminary recommendation on updates to the City’s Inclusionary Housing Ordinance, and an overview of progress of onboarding the City’s Below Market Housing Administrator. Council is being asked to confirm that proposed policy changes align with Council policy preferences before it conducts further outreach and engagement in the community. Ultimately, staff plans to return to the City Council in Summer 2022 with a recommendation from the Planning Commission to update the City’s Inclusionary Housing Ordinance. With this Study Session staff is requesting feedback from Council on four items: 1) fractional units, 2) the removal of Table 2A, 3) calculating the total number of inclusionary units based on land use rather than zoning, and 4) including provisions in the ordinance to codify the Below Market Rate (BMR) Housing Administrator’s role. Additionally, staff is requesting feedback regarding the update of procedures and administrative documentation related to the BMR Housing Administration Program.

The City’s first Inclusionary Housing Ordinance (IHO) was adopted in 1999. Since then, hundreds of affordable units have been constructed and financed to meet the requirements of the IHO. A lot has changed since 1999 and in 2020 the City hired consultant David Paul Rosen and Associates (DRA) to complete an Affordable Housing Nexus Study to evaluate the nexus between new commercial and market-rate residential development.

Item 6b
The Study confirmed that both market-rate residential and commercial development are inducing demand for affordable housing that is not being met by the current housing market.1
The City Council has tasked the Community Development Department with updating the ordinance as part of the 2021-23 Major City Goal work program for Housing. The Housing Element (HE) Update adopted in 2020 also included a new program that says the City’s Inclusionary Housing Ordinance should be updated based on the information provided in the Nexus Study (HE Program 2.13). In addition to the Nexus Study, the City hired Economic & Planning Systems, Inc. (EPS) in April 2021 to conduct a feasibility analysis of the City’s proposed affordable housing in-lieu and commercial linkage fees based on the findings and recommendations included in the Nexus Study. EPS has developed a preliminary recommendation on changes to the City’s Inclusionary Housing Ordinance based on their feasibility analysis. Table 1 below provides an outline of the preliminary recommendation alongside the Nexus Study recommendations and the City’s current IHO. Council is being asked to confirm that proposed policy adjustments are aligned with the Council’s policy preferences before staff conducts further outreach and engagement in the community.

Table 1: Comparison of the City’s current IHO, the Nexus Study Recommendation, and EPS’ preliminary recommendation.

Current IHO* Nexus Study
Recommendation
IHO Update Preliminary
Recommendation
Where the
IHO applies
Requirements differ within
City Limits and Expansion
Areas
Same requirements
Citywide
Same requirements
Citywide
Table 2A
Adjustments
Applies to projects that
qualify Remove Remove
Residential
For Sale
Within City Limits: 3% low
or 5% moderate income
Expansion Area: 5% low
and 10% moderate income
15% (5% at low and 10%
at moderate)
10% (5% low-income units
and 5% moderate income)
For Sale Inlieu Fee
Within City Limits: 5% of
building valuation
Expansion Area: 15% of
building valuation
Apply on a square foot
basis (no specific amount
recommended)
$25 per square foot

1 According to the Nexus study, commercial development had a direct employment impact that generates demand for additional housing and the private for-profit housing market, with no public assistance, has not demonstrated the ability to meet the housing needs of low-earning employees.

Item 6b
Current IHO* Nexus Study
Recommendation
IHO Update Preliminary
Recommendation
For Rent
Within City Limits: 3% low
or 5% moderate income
Expansion Area: 5% low
and 10% moderate income
15% very low- and lowincome units (5% very
low and 10% at low)
6% (3% very low-income
and 3% low-income)
For Rent Inlieu Fee
Within City Limits: 5% of
building valuation
Expansion Area: 15% of
building valuation
Apply on a square foot
basis (no specific amount
recommended)
$20 per square foot
Commercial
Commercial
Development
Within City Limits &
Expansion Area: 2
affordable units per acre or
5% of building valuation
Other Non-residential
Uses: $2 to $5 per square
foot
Industrial Uses: $1 to $4
per square foot
Office, service, hotel, and
retail uses: $5 per square
foot
Industrial and Institutional
Uses: $4 per square foot

DISCUSSION

1. Inclusionary Housing Ordinance
The City’s first Inclusionary Housing Ordinance was adopted in 1999 and since that time, the City has focused on ensuring that a percentage of all new housing units are affordable to income eligible households. Current IHO requirements can be met by 1) building affordable dwellings as part of a development project, 2) dedicating real property, improved or not, for development of affordable housing by the City’s Housing Authority or by a non- profit housing provider, 3) paying an in-lieu fee which is used to assist with the development of new affordable housing throughout the City, or 4) a combination of the above methods, to the approval of the Community Development Director.

To date, more than 1,201 deed-restricted or otherwise secured affordable dwellings have been planned for, entitled, or built since the adoption of the IHO in 1999. The City has granted, loaned, or committed $10,785,954 of affordable housing in-lieu funds to assist with the development of 503 new deed-restricted affordable housing units.

2. 2020 Nexus Study
A priority identified in the 2019-21 Major City Goal work scope and action plan was to complete an Affordable Housing Nexus Study to evaluate the nexus between new commercial and residential development and the City’s requirements for affordable housing embodied in its Inclusionary Housing Ordinance (SLOMC 17.138). 2004 was the last time a similar study was completed.

Item 6b
A nexus study is necessary to establish the relationship between market-rate residential development and non-residential development and the need to support and construct new deed-restricted affordable housing in the City. The nexus study analyzed if new marketrate residential and non-residential development in the City increased demand for affordable housing and included an analysis on the historical performance of the City’s IHO program.

On April 21, 2020, the City Council received the 2020 Affordable Housing Nexus Study completed by consultant David Paul Rosen and Associates (DRA). The Study determined that both residential and commercial development are inducing demand for affordable housing that is not being met by the housing market. The Study’s findings verify that there is a nexus that justifies the City having an Inclusionary Housing Ordinance that applies to both residential and commercial development.

Nexus Study Recommendations
The Nexus Study provided several recommendations for updates to the City’s existing Inclusionary Housing Ordinance. These recommendations are summarized below.

1. Inclusionary Housing Ordinance (IHO) and Geographical Variation. Based on comparable cities and an analysis of San Luis Obispo’s economic/market data, the City should consider different requirements based on whether the residential project is for sale or rent and should discontinue differentiating between housing projects located within the City Limits and Expansion Areas.

Recommend City-Wide Affordable Housing Requirement for Residential Development as follows:
 Rental: 15% very low- and low-income units (5% very low income (50% AMI2) and 10% at low income (80% AMI))
 Owner: 15% low- and moderate-income units (5% at low income (80% AMI) and 10% at moderate income (120% AMI))

2. Affordable Housing Standards. The City should maintain its current definitions of affordable housing expense in terms of the percent of AMI used to calculate affordable rents and sales prices. In addition, the City should include utility costs as part of rent and Homeowners Association (HOA) fees as part of the affordable sales prices.

2 Area Median Income. AMI’s listed in the recommendations are maximums for the various income groups.

Item 6b

3. Project Size and Density Adjustments. The Study recommends eliminating project size and project density adjustments currently contained in Inclusionary Housing Ordinance Table 2A and recommends a minimum inclusionary requirement of one unit for projects of five or more units not otherwise exempt from the ordinance.

4. Residential In-Lieu Fees. The Study recommends applying in-lieu fees on a per square foot basis as the estimated economic equivalent of providing on-site units.

5. Non-Residential Nexus Fees (Commercial Development). The Study recommends fees in the range of $1 to $4 per square foot for industrial uses and $2 to $5 per square foot for other non-residential uses.

3. Inclusionary Housing Feasibility Analysis
In 2020 the City began work updating the Housing Element of the General Plan for the 6 th Cycle Regional Housing Needs Allocation (RHNA). Based on the findings and recommendations of the Nexus Study and the need for additional affordable housing, the Housing Element Update included a new program (Program 2.13) to update the City’s IHO.

In April 2021, the City hired Economic & Planning Systems, Inc. (EPS) to conduct a feasibility analysis based on the findings and recommendations provided by the Nexus Study. Over the last several months, staff has worked with EPS as they have analyzed the City’s current IHO, current market conditions, and the Nexus Study and provided a preliminary recommendation based on the analysis outlined below. A more detailed discussion is provided as Attachment A – EPS Feasibility Memo.

EPS used separate methods of identifying appropriate fee levels for residential and commercial uses. For residential, EPS developed a feasibility model to compare different fee levels and inclusionary requirement scenarios and calibrated the inputs based on inclusionary programs in similar jurisdictions. The approach for defining the appropriate affordable housing commercial linkage fees was built off a similar exercise performed by DRA in the Nexus Study that relied on surveying commercial linkage fees in other jurisdictions.

It is important for the City Council and community to understand that financial feasibility is an important consideration because if the development of market-rate housing is not financially feasible for developers, then the amount of affordable housing accomplished through the Inclusionary Housing Ordinance will be minimal.

Item 6b
Residential Affordable Housing Analysis
EPS prepared financial proformas reflecting the expected costs of new development, based on the Nexus Study analysis, and compared those costs to the revenues that could be generated from the projects given various mixes of market-rate and affordable housing.

For Sale Units
In evaluating various inclusionary and impact fee scenarios for ownership housing, EPS analyzed the development economics of a hypothetical development consisting of 1,550 square foot, two-bedroom units, with an average of three persons per household.3 Seven scenarios were considered with this evaluation:
 Current Ordinance
 Current In-Lieu Fee
 No Inclusionary or Fee
 Maximum Nexus-Based Fee
 Maximum Feasible Fee
 Recommended In-Lieu Fee
 Feasible Inclusionary Requirements
Key revenue assumptions are based on RedFin sales data for San Luis Obispo over the period from December 2020 through December 2021. Data showed that a two-bedroom, 1,550 square foot unit could sell for around $840,000. Affordable units, depending on the household income, could have a maximum home price between $163,000 (very low) to $405,000 (moderate). Construction cost estimates are based on assumptions used in the Nexus Study analysis, adjusted for inflation, with total direct and indirect costs (except affordable housing fees) assumed to be approximately $650,000 per unit.

The seven scenarios test the feasibility of incorporating different fee levels and affordability requirements, with feasibility being measured by an estimated profit margin.

Based on recent experience with developers and lenders in the region, EPS assumed that developers would require at least a 15 percent profit margin in order to accept the risk associated with the project. These revenue and cost estimates inform a range of profit margins (net revenue divided by gross revenue), which vary by scenario, as shown in Figure 1. The results show that the ‘No Inclusionary or Fee’ scenario yields the highest return, while all others, except the maximum nexus fee, also yield a return.

3 This prototype based on the average size of units analyzed in the Nexus Study analysis.

Item 6b
For Rent Units
In evaluating various scenarios for rental housing, EPS modeled a market rate multifamily development. Units are assumed to average 900 square feet with two bedrooms, and a household size of three people.4 Like the For Sale analysis, EPS evaluated seven scenarios:

1. Current Ordinance

2. Current In-Lieu Fee

3. No Inclusionary or Fee

4. Maximum Nexus-Based Fee

5. Maximum Feasible Fee

6. Recommended In-Lieu Fee

7. Feasible Inclusionary Requirements
For income assumptions, EPS compiled market-rate and affordable rents based on conditions and requirements in San Luis Obispo. As the standard metric for feasibility, EPS modeled the annual yield on cost, calculating aggregate Net Operating Income (NOI) divided by development costs. A 5 percent yield on cost was deemed the threshold for feasibility.

4 As with the for-sale scenarios, development costs are based on those used by the DRA analysis, adjusted for inflation.

Figure 1: For-Sale Feasibility Results by Scenario

Item 6b
Income assumptions for market rate units equal a NOI (revenue minus operational costs) of $23,000 per year, or roughly $2,900 per month in rent. This reflects typical rents for newly constructed multifamily in the Greater San Luis Obispo area. Affordable rents were informed by the 2021 income limits for San Luis Obispo County, with the assumption that these households can spend up to 30 percent of gross income on housing. On the cost side, EPS again relied on assumptions from the Nexus Study, adjusted for inflation. These revenue and cost estimates inform a range of yield on cost percentages, which vary by scenario, as show in Figure 2.

The results show that the current in-lieu fee is borderline infeasible, while the maximum nexus-based fee is not at all feasible. The remaining scenarios all appear to generate sufficient investment returns based on the assumptions used.

Figure 2: For-Rent Feasibility Results by Scenario

Item 6b
Commercial Development - Linkage Fee Calculations
In determining an appropriate commercial linkage fee level, EPS examined fee levels charged elsewhere in California. As noted in the Nexus Study, many cities within California do not currently include commercial fees as a part of their inclusionary housing requirements. Table 2 shows the commercial linkage fees by use (on a square foot basis) for Berkeley, Oakland, Petaluma, and San Luis Obispo County. Fees range from less than $1 for industrial uses in San Luis Obispo County to $5.90 for office and industrial uses in Oakland. Unsurprisingly, the Bay Area cities of Berkeley and Oakland have the highest commercial linkage fees, reflecting the higher cost of housing in the region.

Table 2: Commercial Linkage Fee Amounts in other California Jurisdictions Inclusionary Housing Ordinance Update Preliminary Recommendation EPS is recommending several revisions to the City’s existing affordable housing inclusionary program for new residential development and the introduction of a nexusbased commercial linkage fee for non-residential uses based on their feasibility analysis.

Bulleted below are details of the preliminary recommendation and Table 3 provides a comparison between the City’s current IHO, the Nexus Study and the preliminary recommendation.

Market-rate, for-sale residential development: 10 percent (split between low-income units (5 percent) moderate income units (5 percent)).

Rental residential development: 6 percent (split between very low-income units (3 percent) low-income units (3 percent)).

In-lieu fee: Developers opting to pay a fee rather than providing the units onsite as part of the development would pay an in-lieu fee charged per square foot (as opposed to a proportion of unit value) of $25 for new for-sale housing and $20 for new rental housing.

Office Retail Industrial Hotel R&D
Other
Non-Res
Berkeley $4.50 $4.50 $2.25 $4.50 $4.50 -
Oakland $5.90 - $5.90 - - -
Petaluma $2.93 $5.07 $3.02 - - -
SLO County $2.46 $2.11 $0.98 $2.11 - $1.84
City of San Luis Obispo $5.00 $5.00 $4.00 $4.00
Sources: David Rosen and Associates; Keyser Marston Associates; City of Berkeley; City of Oakland; City of Petaluma; County of San Luis Obispo; Economic & Planning Systems, Inc.
2021 Commercial Linkage Fee Amount
Jurisdiction

Item 6b
Commercial developments: EPS recommends a per square foot commercial linkage fee amount of $5.00 for office, service, hotel, and retail uses, and $4.00 for industrial and institutional uses.

Table 3: Comparison of the City’s Current IHO, the Nexus Study’s recommendation, and the preliminary recommendation based on EPS’ feasibility analysis.

Current IHO* Nexus Study
Recommendation
IHO Update Preliminary
Recommendation
Where the
IHO applies
Requirements differ within
City Limits and Expansion
Areas
Same requirements
Citywide
Same requirements
Citywide
Table 2A
Adjustments
Applies to projects that
qualify Remove Remove
Residential
For Sale
Within City Limits: 3% low
or 5% moderate income
Expansion Area: 5% low
and 10% moderate income
15% (5% at low and 10%
at moderate)
10% (5% low-income units
and 5% moderate income)
For Sale Inlieu Fee
Within City Limits: 5% of
building valuation
Expansion Area: 15% of
building valuation
Apply on a square foot
basis (no specific amount
recommended)
$25 per square foot
For Rent
Within City Limits: 3% low
or 5% moderate income
Expansion Area: 5% low
and 10% moderate income
15% very low- and lowincome units (5% very
low and 10% at low)
6% (3% very low-income
and 3% low-income)
For Rent Inlieu Fee
Within City Limits: 5% of
building valuation
Expansion Area: 15% of
building valuation
Apply on a square foot
basis (no specific amount
recommended)
$20 per square foot
Commercial
Commercial
Development
Within City Limits &
Expansion Area: 2
affordable units per acre or
5% of building valuation
Other Non-residential
Uses: $2 to $5 per square
foot
Industrial Uses: $1 to $4
per square foot
Office, service, hotel, and
retail uses: $5 per square
foot
Industrial and Institutional
Uses: $4 per square foot

Item 6b
Table 4 provides some project comparisons of the implementation of the City’s current IHO and the preliminary recommendation.

Table 4: Project Example Comparison of the City’s Current IHO and Preliminary Recommendation.

Project
Number of
Residential
Units
Total
affordable
per Table
2 Total
affordable
per Table
2A
What the
plans
actually
include
Total affordable per preliminary
recommendation
For
Rent
(6%)**
For
Sale
(10%)**
Commercial
($5/s.f.)
600 Tank
Farm 280 23.38 1 8* 17 28 $62,500.00
Bullock Ranch 184 28 7 7 12 19 N/A
950 Orcutt 78 4 1 1 5 8 $34,000.00
2800 Broad 20 1.22 1 Paid fee 2 2 $39,090.00
1030 Orcutt 15 0.98 1 1 1 2 $8,570.00
2120 Santa
Barbara 69 3.28 1 Paid fee 5 7 $15,000.00
*Negotiated more units with the GP and Zoning amendment request **Rounded to the next whole number
Study Session Discussion Items
Staff is requesting feedback from Council on three items: 1) fractional units, 2) the removal of Table 2A, and 3) calculating total number of inclusionary units based on land use rather than zoning.

Fractional Units
The City’s current IHO requires that fractional units (i.e., the inclusionary requirement results in a non-whole number of affordable units) be rounded up to the nearest whole number of units. Table 5 shows how this is applied to residential projects with various numbers of units.

Item 6b
Table 5: Results of rounding to the next whole number on different sized residential projects
Total affordable per
preliminary
recommendation
Rounded up to next
whole number
% of Project Affordable
(based on whole
numbers)
No. of Units
in Project Rent (6%) For Sale (10%) Rent (6%) For Sale (10%) Rent (6%) For Sale (10%) 6 0.36 0.60 1 1 16.67 16.67
12 0.72 1.20 1 2 8.33 16.67
15 0.9 1.50 1 2 6.67 13.33
18 1.08 1.80 2 2 11.11 11.11
20 1.2 2.00 2 2 10.00 10.00
24 1.44 2.40 2 3 8.33 12.50
30 1.8 3.00 2 3 6.67 10.00
43 2.58 4.30 3 5 6.98 11.63
50 3 5.00 3 5 6.00 10.00
73 4.38 7.30 5 8 6.85 10.96
100 6 10.00 6 10 6.00 10.00
141 8.46 14.10 9 15 6.38 10.64
200 12 20.00 12 20 6.00 10.00
333 19.98 33.30 20 34 6.01 10.21
500 30 50.00 30 50 6.00 10.00
The highlighted examples in Table 5 show that rounding to the next whole number results in smaller projects having a higher percentage of affordable units as compared to those projects with more units. It should be noted that smaller projects are likely to qualify for a density bonus just by meeting our inclusionary housing requirement and that this issue may be partially mitigated by building more market rate units. There are a few ways that the City could address fractional units.

1. The current requirement could be retained, and all projects would be required to round up no matter the fractional unit; or

2. If requirements result in less than one affordable unit or fractions of units (i.e., 10% of a 14-unit rental project = 1.4 affordable units), an applicant may pay the in-lieu fee for those fractional units or round up and provide the unit. The applicant may treat the fractional unit as Moderate; or

3. Apply option #2 to a certain size of residential projects (e.g., only residential projects that contain 20 units or less).

During the study session, City staff would like the Council to discuss and provide direction regarding how to address fractional units.

Item 6b
Table 2A
One of the biggest proposed changes to the IHO is the elimination of Table 2A. This proposal is consistent with HE Program 2.135. Table 2A was established as a part of the IHO to encourage the development of projects with higher density and smaller unit sizes, that would be considered affordable-by-design within the City. Table 2A has been very successful in achieving this goal, however, as noted in the EPS’ Feasibility Memo, Table 2A is no longer achieving affordability in the current market. The feasibility analysis found that under current market conditions, smaller units are not affordable, even for moderateincome households. During the study session, City staff would like the Council to discuss and provide direction regarding the removal of Table 2A.

Zoning vs. Land Use
The preliminary recommendation also proposes that inclusionary requirements be calculated based on the land use, rather than the zoning of the site. Table 6 provides recent examples of projects that are located on commercially zoned properties. The City’s current IHO calculates the required number of units based on acreage and then allows that number to be adjusted based on Table 2A. The preliminary recommendation would calculate the number of affordable units based on number of total residential units and the square feet of commercial space proposed for the project. The preliminary recommendation more accurately captures the housing needs based on the actual uses proposed as part of the project. During the study session, City staff would like the Council to discuss and provide direction regarding the calculation of inclusionary housing requirements based on land use rather than zoning.

Table 6: Examples of housing projects located on commercially zoned properties Project No. of
Units Acres
Square
Feet
Current IHO
Affordable Unit
Total
Preliminary Recommendation
Affordable Unit Total
Table 2a Table
2Ab
For Rent
(6%)c
For Sale
(10%)d
Commercial
($5/s.f.)e
600 Tank Farm 280 11.69 12,500 23.38 1 16.8 (17) 28 $62,500.00 650 Tank Farm 249 9.89 18,600 19.78 1 14.94 (15) 24.9 (25) $93,000.00 2800 Broad 20 0.61 7,818 1.22 1 1.2 (2) 2 $39,090.00
1030 Orcutt 15 0.49 1,714 0.98 1 0.9 (1) 1.5 (2) $8,570.00 2120 Santa
Barbara 69 1.64 3,000 3.28 1 4.14 (5) 6.9 (7) $15,000.00 950 Orcutt 78 2.00 6,800 4 1 4.68 (5) 7.8 (8) $34,000.00 a) Total number of affordable units is based on 2 units per acre as required in Table 2 for commercially zoned properties.

5 HE Program 2.13: Update the Inclusionary Housing Ordinance, including Table 2A, based on findings and recommendations in the 2020 Affordable Housing Nexus Study and conduct further feasibility analysis in order to evaluate the City’s ability to provide affordable housing in the proportions shown in the Regional Housing Needs Allocation, per Policy 2.4.

Item 6b
b) Adjusted total of affordable units based on Table 2A. c) These numbers reflect if the residential units are all rental. d) These numbers reflect if the residential units are all for sale. e) These numbers reflect if all the commercial spaces were being used for office, service, hotel, and retail uses.

HouseKeys is Under Contract to Perform Services as the City’s “Below Market Rate (BMR) Housing Administrator”
In 2021, the City of SLO issued construction permits for over 100 BMR units. The City’s program is growing, and at the same time, oversight and enforcement at the State level is ramping up to ensure local affordable housing programs comply with State law. In 2020, recognizing the growing challenges of in-house administration of the City’s Affordable Housing Inventory, the City Council authorized an RFP for a BMR Housing Administrator.

HouseKeys was the successful firm through the RFP process and the City entered into a contract with HouseKeys on August 4, 2021 and began the onboarding process (please see Housekeys contract in Attachment B).

Having a contract program administrator is a departure from past City practice and staff have engaged the community over recent months to introduce HouseKeys and help clarify program expectations as part of the onboarding process. One of the core features of the BMR is that they are expected to act as the City’s agent in all BMR transactions.

During the onboarding process, staff has received input regarding concerns that members of the mortgage and real estate community have about the exclusive role that HouseKeys will play with respect to BMR transactions involving the City.

Program History
Historically, the local ecosystem of loan officers, real estate agents, housing counselors, community organizations, and homebuilders has played an important role in the process of connecting eligible households with affordable housing units. The principal functions of the program were accomplished, as follows:

1. HASLO or PSHHC would perform income certifications for eligible households.

2. Developers would market and identify eligible buyers of their choosing, sometimes through a lottery depending on the number of units for sale.

3. A limited number of realtors and mortgage lenders who understand how the City’s deed restrictions work would engage with eligible buyers and help them through the transaction process.

4. City staff would work with income certified households by providing all the necessary paperwork for the City’s Deed of Trust and Promissory Note, which is a part of every BMR transaction.

5. City staff would work with owners and their mortgage brokers on refinancing requests.

Item 6b

6. City staff would work with owners and their real estate agents on resale requests, including working with the buyer when the unit is being sold to another income eligible household.

Program Direction and Benefits
This process was manageable when the total number of units in the City’s inventory was smaller. However, this decentralized method of administration also has had significant drawbacks. The onboarding of HouseKeys is expected to allow the City to effectively scale its program up while providing significantly enhanced benefits to the City and community in the form of program compliance, customer service, and implementation of best practices. A summary of these benefits follows.
 Transparency: The regulatory landscape, and the oversight from the state has changed with increasing scrutiny and oversight. Maintaining program transparency and accountability on all levels including marketing, procurement, transactions, and accounting is required. HouseKeys will maintain an active eligible buyer list to match buyers with available housing units. Every transaction is audited and verified for compliance with State Housing and Community Development (HCD) criteria.
 Efficiency: HouseKeys is a company with 29 employees that provides similar BMR administration services to jurisdictions throughout California. This allows the City’s program to scale up without adding staff who do not have the particular specialties needed to run an effective program of this scale in house.  Accountability and Compliance: HouseKeys will perform annual compliance checks to ensure that City affordable housing units continue to be occupied by eligible households in compliance with City requirements and State law. In addition, HouseKeys will operate a training program and maintain lists of eligible mortgage brokers and real estate agents that are trained and authorized to work within the City’s program. Finally, HouseKeys will engage with HCD regarding any enforcement actions or compliance audits.
 Equity and Inclusion: One of the most important features of the BMR role and HouseKeys’ service is the fact that the City will finally have an outward facing presence to market its program and available affordable housing units throughout the region. A short-coming of the City’s program to date is that the process of connecting eligible buyers to available units is opaque. Best practices for marketing affordable housing units include robust advertising and minimum time on market for every unit to give eligible buyers the opportunity. Where multiple eligible buyers exist, a lottery is normally the best way to ensure equity. Going forward, these are functions that will be accomplished by HouseKeys.

Item 6b
 Customer Service: Finally, the BMR role allows the City to provide excellent customer service to owners and occupants of homes within the City’s inventory.

HouseKeys will maintain an online portal that will allow owners to register their units and submit questions or requests for assistance at any time. Whether a property owner wants to sell, refinance, or just has questions about the status of their unit, that information will be readily available whereas City staff is limited in its ability to help with such requests.

Program Costs
Formal administration of the City’s BMR housing program comes at a cost. The City will pay an annual fee to HouseKeys that is covered within the budget of the Community Development Department. For the cost of less than one FTE, the City is now able to reassign work to its Housing Coordinator to focus on high priority initiatives and projects, while gaining the work of a 29-member team to support BMR administration functions.

Concerns raised by members of the community primarily center around the HouseKeys business model and their fee schedule (please see Attachment C for responses to inquires posed by Ms. Donna Lewis). As an agent of the City, HouseKeys intends to charge customary fees associated with the various transactions it will manage as outlined in their contract. During the onboarding process, HouseKeys has reached an agreement to administer the Avila Ranch affordable housing plan on behalf of the City. Now that HouseKeys is on board, all new projects with an affordable housing component will be required to work through HouseKeys to accomplish program compliance.

Revenues earned by HouseKeys, a for-profit company, come from its fee schedule and the transaction fees paid by buyers, sellers and homeowners in the program. In many respects, HouseKeys’ fee schedule represents costs that are currently experienced by the City, builders, owners and sellers, however, they are simply absorbed instead of clearly identified. HouseKeys fee schedule and their ability to earn revenue in the program will be assessed on an ongoing basis. It is important to note that if the City and community are not satisfied with the work performed by HouseKeys, the City has every right to find another BMR Housing Administrator for its program. For this reason, staff is recommending that the updated Inclusionary Housing Ordinance codifies the role and responsibilities of a BMR Administrator.

Housekeys approach to BMR administration is particularly attractive to the City because it provides a cost structure to manage the whole affordable housing lifecycle, including HCE oversite (See Summary of management steps in the Affordable Housing Lifecyle in Attachment D). In this way, HouseKeys uses its fee schedule for cost recovery, as well.

For example, fees related to the City’s BMR homeownership program also support Housekeys ability to manage the City’s BMR rental program at a highly competitive cost to the City.

Item 6b
Program Process including Procurement
Finally, formalizing a BMR Housing Administrator allows for responsiveness to a changing landscape for affordable housing providers. Income certifications, a service historically provided through HASLO, is no longer available. PSHHC is currently providing this service on a temporary basis until an Administrator takes over the service. Going forward, Housekeys will perform the service with all associated costs built into their fee for services.

The procurement process includes how buyers are introduced to the program and how the program is operated. Standardization is critical for transparency, to meet program goals of equity and inclusion, and accountability and monitoring, and to ensure that there is a fair process for all prospective buyers and renters, properties are priced properly, and that buyers can afford the housing payment according to HCE criteria.

Lastly, the Program Administrator will ensure that all parties involved (real estate agents, lenders, etc.) know how to comply with the program with a third-party to provide oversight and better customer service.
6 One example of anticipated improvement is transparency of procurement that includes monitoring and enforcement of Section 17.138.130 “Eligibility Screening” in the City’s current Inclusionary Housing Ordinance that requires:

The housing authority or other housing provider designated by the city shall screen prospective renters or buyers of affordable units. Renters or buyers of affordable units shall enter into an agreement with the city. Occupants must be selected by means of an open, public process which ensures that individuals of a group of interested participants have equal probability of selection. Private selection of individuals by project owners is not permitted for any affordable units.

Next steps and expectations for program administration
Staff and Housekeys will continue community engagement for the BMR Housing Administration Program in concert with the Inclusionary Housing Ordinance update and ensure the update will provide additional clarity regarding the requirement and obligation for administration of BMR housing units over the entire affordable housing lifecycle with the defined role of program administrator. Staff is recommending that the updated IHO include the following provisions with respect to the IHO BMR.

6 Management of an approved vendor list includes creating a fair process to get on the list, hosting group and 1-on-1 trainings, creating content, updating materials, and fielding input from the public as complaints arise about response from individual providers. The annual fee is used both to contribute to costs and to establish commitment by the professionals who are on the list.

Item 6b

1. Purpose.

2. Definitions.

3. Applicability.

4. Program Administration Costs.

5. Duties of Program Administrator.

6. Default, Foreclosure, and Loss of Unit.

7. Annual Report.

Additionally, staff will work with Housekeys to update the City’s administrative procedures and supporting documentation consistent with industry best practices. This work effort is described below. Staff is requesting concurrence from the City Council on these next steps.
 Update templates for Affordable Housing Agreements that include procedures for working with the Program Administrator with the following approximate language:
“The City may either handle in-house or contract responsibility for administration for the BMR Housing Program and monitoring compliance with the requirements to a Program Administrator pursuant to an Agreement executed between the City and the Administrator”.
 Update the City’s Purchasing and Rental Guidelines to clearly reflect fees and procedures of the Program Administrator including underwriting, eligibility and compliance, as well as refinements to ensure procedures are consistent with state law and program goals.
 Produce Rental Compliance Guidelines (Tenants, Property Managers) and FirstTime Homebuyer Loan Program Guidelines.  Update the City’s Affordable Housing Standards to reflect state guidance on standardized price calculations7. These standards are updated by staff on an annual basis ever July based on state area median income numbers for our area.

Additionally, specific updates to standards are required to implement Housing Element Program 2.10 that states:

Update the Affordable Housing Standards to include Homeowners’ Association (HOA) fees and a standard allowance for utilities in the calculation for affordable rents and home sales prices within two years of adopting the Housing Element.

7 Updated City Affordable Housing Standards will include State Law Calculations of a max 30% x 70% for "Low" and a range from 28-35% x 110% for "Moderate".

Item 6b
 Finally, City staff will work with the City Attorney’s office and Housekeys to update the City’s Equity Share program. The Equity-Share program has become more popular by developers but needs further evaluation to ensure compliance and consistency with the intent of the program.
8 Previous Council or Advisory Body Action
 City Council received the 2020 Affordable Housing Nexus Study on April 21, 2020.

The item was submitted as a “receive and file” and no action was taken.  On May 4, 2021, the City Council authorized an RFP to solicit outside consultant expertise to oversee BMR housing administration, including ownership and rental units, and administration of the City’ s First- Time Homebuyer Loan program. 9 Policy Context
The Housing Element was updated in 2020 and included Program 2.13 that specifically states that the City will update the IHO based on the findings and recommendations of the 2020 affordable Housing Nexus Study.

Program 2.13: Update the Inclusionary Housing Ordinance, including Table 2A, based on findings and recommendations in the 2020 Affordable Housing Nexus Study and conduct further feasibility analysis in order to evaluate the City’s ability to provide affordable housing in the proportions shown in the Regional Housing Needs Allocation, per Policy

2.4. Public Engagement
City staff and Housekeys have engaged with community members regarding BMR housing administration in recent months in the forums described below:
 Developers’ Roundtable meeting on December 9, 2021.
 City Staff question and answer with interested parties from the real estate and lending community and stakeholders from the Developer Roundtable on January 11, 2022.

8 The Equity Share program allows flexibility for properties to sell at market rate , thus removing an affordable unit from the City’s inventory and the program update will need to include evaluation of formulas to ensure appropriate recapture of the City’s principal and interest to adequately support the construction of future affordable housing units.
9 May 4, 2021 Council Agenda Report Item 11 - Authorization to issue a RFP for a Below Market Rate Housing Program Administrator (slocity.org)

Item 6b
 Housekeys Meet and Greet #1 with Affordable housing partners (including HASLO, PSHH, and Habitat for Humanity and Transitions Mental Health Association) on January 13, 2022.
 Housekeys Meet and Greet #2 with Developers (including the Developers Roundtable, Home Builders Association, SLO Chamber and REACH) on January 27, 2022.
 Housekeys Meet and Greet #3 with Lenders and Real estate professionals (including professionals who have engaged with the City’s Affordable Housing program and the SLO Coastal Association of Realtors) on February 3, 2022.  Housekeys various direct engagement upon request with developers and real estate professionals.

This Study Session kicks off public outreach for the IHO update. Staff will be reaching out to stakeholders and the community regarding the IHO preliminary recommendation.

Updates to the IHO will be refined based on public feedback before moving onto the Planning Commission and City Council for final review.

STUDY SESSION QUESTIONS:

The following study session questions are suggested for Council’s consideration:

1. Fractional units: should applicants be required to round up no matter the fractional unit; or pay the in-lieu fee for fractional units and if so, should it be applicable to smaller projects (e.g. 20 units or less).

2. Table 2A: should Table 2A be removed from the IHO.

3. Land use vs. Zoning: should the total number of inclusionary units be calculated based on land use rather than zoning.

4. Formalization of Administrator: should the IHO include codification of the role of the BMR Housing Administrator.

5. Administrative documents: authorize the City Manager to approve updates to the City’s affordable housing guidelines, administrative templates, equity share procedures, and supporting documentation.

ENVIRONMENTAL REVIEW
This item is provided as part of a study session and intended to provide information and involves no action by the City Council. As such, the California Environmental Quality Act (CEQA) does not apply.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2021-23
Funding Identified: Yes

Item 6b
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:

Total $ $ $ $
The IHO update is part of the 2021-23 budget with funding provided by a $283,000 Regional Early Action Planning (REAP) state grant.

The $111,000 BMR administration contract, for year 1 and $96,000 for Year 2 was approved as part of the 2021-23 financial plan.

ALTERNATIVES

1. Continue consideration of the Inclusionary Housing Preliminary Recommendation. Although no action is recommended in association with this recommendation, the City Council could ask staff to return during a future meeting to present additional information.

2. Continue consideration of the Below Market Rate Administration. Although no action is recommended in association with this recommendation, the City Council could ask staff to return during a future meeting to present additional information.

ATTACHMENTS
A - EPS Feasibility Memo – includes a feasibility analysis and a Preliminary Recommendation of proposed changes to the City’s current Inclusionary Housing Ordinance
B - Houskeys Contract
C - Responses to Inquiries by Ms. Donna Lewis
D - Summary Management Steps in the Affordable Housing Lifecyle

M EMORANDUM
To: Rachel Cohen, City of San Luis Obispo
From: Ashleigh Kanat and Jake Cranor
Subject: Recommendations for San Luis Obispo’s Proposed Affordable Housing Fees Inclusionary Requirements, In-lieu Fees and Commercial Linkage Fees; EPS #191142
Date: February 2, 2022
Economic & Planning Systems, Inc. (EPS) was retained by the City of San Luis Obispo (City) to help identify the parameters of an updated affordable housing program, and recommend updated inclusionary requirements, associated in-lieu fees and new commercial linkage fees.

EPS’s work follows and builds on the Affordable Housing Nexus Study prepared by David Rosen and Associates (DRA) in 2019, which established the maximum allowable fees that could be charged to new residential and nonresidential development following nexus logic but did not evaluate the feasibility of those fees (i.e., the effect the maximum fees would have on the financial feasibility of new development).

This analysis recommends a framework for updating the City’s affordable housing requirements and conducts a feasibility analysis to refine the recommended inclusionary requirements and fee levels. The following memorandum discusses the key findings of the analysis, examines the City’s current inclusionary housing program, provides an overview of the DRA Affordable Housing Nexus Study, and outlines the methodology used for the feasibility analysis before providing EPS’s suggested updates and revisions to the City’s affordable housing program.

Summary of Findings

1. The maximum nexus-based affordable housing impact fees and commercial linkage fees calculated in 2019 cannot be absorbed by developers without negatively affecting the financial feasibility of new development.

The David Rosen and Associates Nexus Study calculated a maximum fee of between $48.33 and $113.99 per square foot for new residential development, depending on the residential product type, and between $65.85 and $173.09 per square foot for nonresidential uses. While such fees may be technically justifiable, it is

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not uncommon for the maximum nexus-based fees to render new development infeasible and, as such, cities typically adopt affordable housing fees at much lower levels. This is a typical result of nexus-based fee calculations, and DRA notes in its report that it often recommends cities adopt fees lower than the maximum allowable level.

2. The City’s existing percent-of-value approach to calculating in-lieu fees is not consistent with best practices as the amount of the fee can vary from unit to unit, even among similar product types, and EPS recommends that the in-lieu fees be calculated based on technical analysis and made publicly available on the City’s fee schedule.

The City’s current inclusionary program requires that market-rate developments include a certain percentage of affordable units to be built onsite. Developers may elect to pay a fee in lieu of building the affordable units as part of the market-rate project. The City currently charges an in-lieu fee equal to 5 percent of building value should developers elect not to provide the required amount of inclusionary units onsite. This process requires judgement on the part of City staff who need to determine if the value as submitted by the developer at the time of application is accurate. Such self-reporting can lead to variability among fees paid by developers of similar product types, potential underreporting, and inconsistencies in how different developers are complying with the inclusionary requirements.

3. EPS’s preliminary recommendations include several revisions to the City’s existing affordable housing inclusionary program for new residential development and the introduction of a nexus-based commercial linkage fee for non-residential uses.

For new, market-rate, for-sale residential development, EPS recommends an inclusionary requirement of 10 percent, meaning that a 100-unit development would be required to provide 10 onsite units that are affordable to income-constrained households. Inclusionary units for for-sale development would be targeted half to low-income and half to moderateincome households. For new rental developments, a 6 percent inclusionary requirement is recommended, which would again be targeted half to low-income and half to moderate income households. Developers opting to pay a fee rather than providing the units onsite as part of the development would pay an in-lieu fee charged per square foot of $25 for new forsale housing and $20 per square foot for new rental housing. For new commercial developments, EPS recommends a per square foot commercial linkage fee amount of $5.00 for office, service, hotel, and retail uses, and $4.00 for industrial and institutional uses.

Recommendations for the City’s inclusionary housing requirements, in-lieu fee levels, and affordable housing commercial linkage fee levels are summarized in Figure 1.

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Figure 1 Recommended Inclusionary Requirement and Fee Levels

4. EPS recommends eliminating “Table 2A,” which currently adjusts the inclusionary requirement of residential projects, with lower requirements for higher density projects and smaller units because current market data suggests that Table 2A is no longer furthering the “affordable by design” objectives that it was originally intended to support.

Table 2A outlines inclusionary requirement adjustment factors based on both unit size and project density. For example, developments consisting of 1,100 square-foot units or smaller are only required to provide one inclusionary unit onsite, regardless of how many total units are being built. EPS analysis finds that under current market conditions, new units of these sizes rent for approximately $3,000 per month (as shown on Figure 2), which is not affordable even for moderate-income households (households earning 120 percent of AMI).

Therefore, units of at least 1,100 square feet are no longer ‘affordable by design’, as was the intent of Table 2A, and as the City anticipates more development at smaller unit sizes, there is an opportunity to ensure that affordable housing is included as part of new, market-rate development.

Legal Background
Prior to 2017, there was some uncertainty about the legal parameters of inclusionary housing programs and whether inclusionary programs could apply to ownership and rental projects. For some time, there were two California Court of Appeals decisions from 2009 that informed the legal parameters of inclusionary zoning and related in-lieu fees. These are “Palmer/Sixth Street Properties L.P. v. City of Los Angeles” (Palmer) and “Building Industry Assn of Central California v. City of Patterson” (Patterson). The former found that local governments must implement their inclusionary housing requirements so that developers of rental housing are allowed to determine the initial rents of all units on site. The latter suggests that inclusionary housing ordinances should be viewed as “exactions” that must be justified by nexus studies.

More recently, in 2015, the California Supreme Court decided in favor of the City of San Jose, which had passed an inclusionary requirement in 2010. The California Building Industry Use Onsite Requirement
Residential
For Sale 10% (1/2 Mod and 1/2 Low) $37,795 per unit $25.00 per sq.ft.

Rental 6% (1/2 Mod and 1/2 Low) $19,839 per unit $20.00 per sq.ft.

Nonresidential
Office $5.00 per sq.ft.

Retail $5.00 per sq.ft.

Service $5.00 per sq.ft.

Hotel $5.00 per sq.ft.

Institutional $4.00 per sq.ft.

Industrial $4.00 per sq.ft.

Inclusionary Housing Requirement
[1] The per square foot fee assumes approximately 1,500 square feet for a for sale unit and 990 square feet for a rental unit.

Affordable
Housing Impact
Fee
n/a
n/a
In-lieu Fee
(max per unit)
In-lieu Fee
(per sq.ft.) [1]

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Association filed a lawsuit claiming that the San Jose ordinance was invalid because the conditions imposed by the ordinance constituted “exactions” under the takings clauses of the state and federal Constitutions. The California Supreme Court held that the conditions that the San Jose ordinance imposes on future developments do not impose “exactions” upon the developers’ property.

More concretely, Assembly Bill 1505 (2017) now clarifies that cities and counties may adopt inclusionary housing ordinances requiring residential rental housing developments to include a specified percentage of affordable units as a condition of development.

Existing A ffordable H ousing Program
The City’s existing affordable housing program is outlined in San Luis Obispo Municipal Code Chapter 17.91, and requires that new development projects satisfy the inclusionary housing requirements, as specified by Table 2 (and adjusted by Table 2A). The program also allows nonexempt developments to contribute an in-lieu fee equal to 5 percent of the development’s value instead of physically constructing the inclusionary units.

Table 2 states that, within the City limits, residential development must set aside 3 percent of units as affordable to low-income households or 5 percent of units as affordable to moderate income households (but not less than one affordable unit per project). In the Expansion Area, the requirement is increased to 5 percent affordable to low-income households or 10 percent affordable to moderate income households. Residential developments of less than four units are exempt. Table 2 also specifies that commercial developments both within the City limits and in the Expansion Area must build two affordable units per acre, but no less than one affordable unit per project. Commercial projects of less than 2,500 square feet are exempt.

Developers often elect to pay the 5 percent in-lieu fee, which presents several issues. Upon reviewing recent in-lieu fee data provided by City staff, EPS notes that: 1) residential construction values reported by the developers are sometimes significantly lower than what market data sources imply; and 2) there is significant variability in the construction value per square feet for similar product types. These findings suggest that an in-lieu fee based on a developer-reported construction value is not the most transparent or equitable means of levying such a fee.

Table 2A provides adjustment factors to be applied the inclusionary requirements for residential development. For example, a 100-unit development with an average unit size of 1,800 square feet is assigned an adjustment factor of 0.75. Therefore, instead of being required to build 3 lowincome units or 5 moderate income units, as specified by Table 2, it is given a 25 percent reduction in the number of affordable units it must provide. This means the developer could satisfy the inclusionary requirement with just 4 (rounded up from 3.75) moderate income units.

Table 2A strives to encourage development of smaller units and greater density, and developments with units of 1,100 square feet or less are only required to provide one inclusionary unit on site, regardless of the total number of units proposed. As another example, the same requirement of building one affordable unit onsite applies to 1,500 square-foot units, in cases where the development consists of 24 or more units. Conversely, units of more than 2,500 square feet are required to provide more affordable units than the baseline listed in Table 2.

While this concept does indeed encourage smaller, and thus less expensive units, the market has shifted such that even 1,100 square foot units are no longer affordable to moderate and some above moderate households. Figure 2 shows the affordability gap for unit sizes exempted from inclusionary requirements under some or all scenarios, compared to a unit that is truly affordable Page 200 of 381 Memorandum February 2, 2022
San Luis Obispo Affordable Housing Fees Page 5
to moderate income households. While an 800 square foot unit is affordable to a moderateincome household of two, a family of three would experience an affordability gap of $15,400 for an 1,100 square foot unit. A moderate-income household of four would experience an affordability gap of $32,650 for a 1,500 square foot unit, despite having a higher income than the household of three. This analysis shows that 1,100 and 1,500 square foot units are unaffordable and thus contributing to an affordable housing shortage, because their construction is not required to contribute to the development of housing that is affordable in the community.

Figure 2 Affordability Gaps for Units Adjusted by Table 2A Overview of DRA Nexus Studies
The City retained DRA to prepare a nexus study, completed in 2019, establishing a rational nexus between market-rate residential development and non-residential development and the need for affordable housing in the City. The purpose of the of the nexus study was to determine the extent to which new market-rate residential and non-residential development in the City increases demand for housing and exacerbates the City’s shortage of affordable housing. DRA states that the basis for the fee is that development increases employment, which also increases the demand for housing for the added employees. Since the private housing market, with no public assistance, will not provide housing affordable for lower-earning employees, a nexus fee is justified to help create that housing. DRA also notes that non-residential development, such as retail/services, office, and industrial uses, have a direct employment impact since employees work from these buildings.

In its residential nexus study, DRA calculates fees for three categories of residential development: owner-occupied single-family units, owner-occupied townhomes, and renteroccupied multifamily units. Maximum fees calculated were $113.99 per square foot for singlefamily, $48.33 per square foot for townhomes, and $55.31 for multifamily units. For commercial uses, DRA calculated fees for retail, hotel, service, office, industrial and institutional space. The maximum fees calculated per square foot were: $69.60 for retail; $86.12 for hotel; $65.85 for service; $173.09 for office; $84.47 for industrial; and $151.64 for institutional.

DRA states in its report that it does not recommend the maximum nexus fees for adoption, and notes the need to evaluate development feasibility, along with a range of other policy factors, in 800 Sq. Ft. 1,100 Sq. Ft. 1,500 Sq. Ft.
(2-person HH) (3-person HH) (4-person HH)
Average Market Rate Rent1 $2,280 $3,025 $3,750
Moderate Income for Typical Household Size2 $93,900 $105,600 $117,350 Income Required to Rent2 $91,200 $121,000 $150,000
Affordability Gap $2,700 ($15,400) ($32,650)
Sources: HCD Income Limits 2021; CoStar; Apartments.com; City of San Luis Obispo; Economic & Planning Systems, Inc.

Unit Size
Item
[1] Based on CoStar and Apartments.com data on typical rents per square foot for new construction in San Luis Obispo in November 2021.
[2] Assumes families of the specified sizes can pay up to 30 percent of gross income on rent without becoming rent burdened. Does not include other housing related costs such as utilities

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determining appropriate fee levels. The DRA report also shows a set of other municipalities’ commercial linkage fees to demonstrate typical fee levels elsewhere.

Defining the Inclusionary Program and Fee Levels
EPS used separate methods of identifying appropriate fee levels for residential and commercial uses. For residential, EPS developed a feasibility model to compare different fee levels and inclusionary requirement scenarios. EPS calibrated the inclusionary requirement inputs based on inclusionary programs in other jurisdictions. The approach for defining affordable housing commercial linkage fees relied principally on a survey of commercial linkage fees in other jurisdictions, building off a similar exercise performed by DRA in 2019. Details on these approaches are outlined in the subsections below
Defining the Inclusionary Program for Residential Uses
EPS has prepared financial pro formas reflecting the expected costs of new development, based on DRA’s analysis, and compared those costs to the revenues that could be generated from the projects given various mixes of market-rate and affordable housing.

Ownership Scenarios
In evaluating various inclusionary and impact fee scenarios for ownership housing, EPS analyzed the development economics of a hypothetical development consisting of 1,550 square feet units and two bedrooms each, with an average of three persons per household. This prototype based on the average size of units analyzed in the DRA analysis. The seven scenarios are:

Current Ordinance – This scenario assumes 5 percent of units are priced for moderate income households.

Current In-Lieu Fee – This scenario assumes an in-lieu fee equal to 5 percent of total cost of construction of the market rate units.

No Inclusionary or Fee – This scenario shows the estimated return that could be achieved by developers if they are not required to pay any fee or provide any inclusionary units.

Maximum Nexus-Based Fee – This scenario assumes a fee of $48.33 per square foot, based on results of DRA Nexus Study.

Maximum Feasible Fee – This scenario assumes the maximum fee that still allows developer to achieve a 15 percent return. Calculated to be $34.60 per square foot.

Recommended In-Lieu Fee - This scenario assumes an in-lieu fee of $25.00 per square foot.

Feasible Inclusionary Requirements – This scenario shows 10 percent of total units as inclusionary, all provided onsite. Assumes ½ of units are priced for Moderate income households and ½ are priced for Low-income households.

Key revenue assumptions are based on RedFin sales data for San Luis Obispo over the period from December 2020 through December 2021, which suggest that a home of this type and size in San Luis Obispo could sell for about $540 per square foot, or roughly $840,000. For the affordable units, maximum value by income category is shown in Figure 3. Construction cost estimates are based on assumptions used in the DRA analysis, adjusted for inflation, with total

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direct and indirect costs (except affordable housing fees) assumed to be approximately $650,000 per unit.

Figure 3 Affordable Home Value for a 3-Person Household by Income Category The scenarios presented test the feasibility of incorporating different fee levels and affordability requirements, feasibility being measured by an estimated profit margin. These revenue and cost estimates inform a range of profit margins (net revenue divided by gross revenue), which vary by scenario, as shown in Figure 4. Based on recent experience with developers and lenders in the region, EPS assumes that developers would require at least a 15 percent profit margin in order to accept the risk associated with the project. The results show that, unsurprisingly, the ‘No Inclusionary or Fee’ scenario yields the highest return, while all others except the maximum nexus fee also appear feasible.
2021 Max Income Maximum Home Price
Affordability Category 3-person household
Very Low Income (VLI) $44,050 $163,000
Low Income (LI) $70,450 $265,000
Moderate Income (Mod) $105,600 $405,000
Sources; HCD 2021 Income Limits; San Luis Obispo County Housing Authority; EPS

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Figure 4 For-Sale Feasibility Results by Scenario
Rental Scenarios
On the rental side, EPS modeled a market rate multifamily development. Units are assumed to average 900 square feet with two bedrooms, and a household size of three people. As with the for-sale scenarios, development costs are based on those used by the DRA analysis, adjusted for inflation. For income assumptions, EPS compiled market-rate and affordable rents based on conditions and requirements in San Luis Obispo. As the standard metric for feasibility, EPS modeled the annual yield on cost, calculating aggregate Net Operating Income (NOI) divided by development costs. A 5 percent yield on cost was deemed the threshold for feasibility. Again, EPS evaluated a number of scenarios, adjusting the inclusionary requirements and fee levels in each. Outlined below are the tested against the current rental ordinance:

Current Ordinance – This scenario assumes 5 percent of units are priced at levels affordable for Moderate income households
Current In-Lieu Fee – This scenario assumes an in-lieu fee equal to 5 percent of total cost of construction of the market rate units.

No Inclusionary or Fee – This scenario shows the estimated return achieved by developers when they are not required to pay any fee or provide any inclusionary units.

Maximum Nexus-based Fee – This scenario assumes a fee of $55.31 per square foot, based on DRA Affordable Housing Nexus Study results for this product type.

Maximum Feasible Fee – This scenario shows the maximum fee that still allows developer to achieve 5 percent yield-on-cost. Calculated to be $22.50 per square foot Recommended In-Lieu Fee – This scenario assumes an in-lieu fee of $20.00 per square foot.

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Recommended Inclusionary – This scenario shows 6 percent of total units as inclusionary, provided onsite. Assumes ½ of units are priced for Moderate income households and ½ are priced for Low-income households.

Income assumptions for market rate units equal a net operating income (revenue minus operational costs) of $23,000 per year, or roughly $2,900 per month in rent. This reflects typical rents for newly constructed multifamily in the Greater San Luis Obispo area. Affordable rents were informed by the 2021 income limits for San Luis Obispo County, with the assumption that these households can spend up to 30 percent of gross income on housing. On the cost side, EPS again relied on assumptions from the DRA analysis, adjusted for inflation. These revenue and cost estimates inform a range of yield on cost percentages, which vary by scenario, as show in Figure 5. In the case of rental, the current in-lieu fee is borderline infeasible, while the maximum nexus-based fee is almost certainly infeasible. The remaining scenarios all appear to generate sufficient returns based on the assumptions used.

Figure 5 Rental Feasibility Results by Scenario

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Survey of Other Jurisdictions’ Residential Affordable Housing Programs As part of the feasibility analysis for residential uses, EPS aggregated key features of inclusionary programs in nearby jurisdictions, or jurisdictions of similar size and character. While the market conditions informing these jurisdictions’ inclusionary housing policies can vary substantially, it can nevertheless be informative to use other local governments’ policies as a benchmark for reasonableness. Key aspects of several jurisdictions’ inclusionary programs are listed below:
– Arroyo Grande
• Inclusionary requirement, but varies from 5 percent (VLI) to 15 percent (Mod) depending on affordability depth provided
• In-lieu fee a percentage of construction value
– County of San Luis Obispo
• Inclusionary requirement of 8 percent (25 percent reduction, if onsite) for ownership housing over 2,200 sq. ft., with 2 percent each for workforce, moderate, low-income and very low-income households. Commercial developments greater than 5,000 also subject to inclusionary requirements or inlieu fee. • Fee charged on a per square foot basis, but rate escalates as unit size increases (first 2,200 SF are exempt)
– Morro Bay
• Inclusionary requirement, either 1 unit, or 10 percent of all units, whichever is greater
• Onsite and offsite inclusionary units must be demonstrably non-feasible for the City to accept a fee
– Atascadero
• Inclusionary requirement of 20 percent moderate in place, but projects utilizing density bonus program are exempt
– Pismo Beach
• Inclusionary requirement of 10 percent for projects of 10 or more units. Projects of 5-9 units pay fee
– Santa Barbara
• 15 percent for ownership housing, rental developments of between 5-9 units required to set aside 1 unit
– Davis
• Single-family ranges from 10 percent to 25 percent depending on lot size, while townhomes require 10 percent. Multifamily ranges from 5 percent for condos to 35 percent for rental projects of 20+ units

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Determining Commercial Linkage Fee Level for Non-Residential Uses In determining an appropriate commercial linkage fee level, EPS examined fee levels charged elsewhere in California. Existing fee levels in other jurisdictions serve as a proxy for development feasibility, given each of the jurisdictions has seen commercial development since the adoption of their affordable housing commercial linkage fees. In most cases, this involved obtaining updated information on the fee levels reported by DRA. The exception to this was the inclusion of the County of San Luis Obispo’s commercial linkage fee program. Figure 6 shows the commercial linkage fees by use (on a square foot basis) for Berkeley, Oakland, Petaluma, and San Luis Obispo County. Fees range from less than $1 for industrial uses in San Luis Obispo County to $5.90 for office and industrial uses in Oakland. Unsurprisingly, the Bay Area cities of Berkeley and Oakland have the highest commercial linkage fees, reflecting the higher cost of housing in the region. It should be noted that each city, with the exception of Berkeley, has updated its fees since 2019. No other cities in San Luis Obispo County have adopted commercial linkage fees.

Figure 6 Commercial Linkage Fee Amounts in Other California Jurisdictions Preliminary Affordable Housing Program
Recommendation
Based on the feasibility study and comparative analysis of existing fee levels in other municipalities, EPS recommends adopting a per square foot approach for both the residential inlieu fee and the commercial linkage fee, both to be applied citywide. Fees should be paid according to land use, not necessarily zoning. For example, a mixed-use development would pay impact fees on the nonresidential development and the residential development would need to comply with the inclusionary requirements.

Inclusionary Requirements
EPS’s recommended inclusionary approach would see an increase in the percentage of required affordable units, from 3-5 percent (depending on affordability) to 10 percent. Residential developers may choose to comply with the inclusionary housing requirement by providing units onsite or by paying an in-lieu fee.1 In-lieu fees are calculated to be approximately equivalent to 1 AB1505 specifies that inclusionary programs must provide alternative means of complying with the requirement. Alternatives often include: land dedication, building affordable units off-site, payment of an in-lieu fee, and various combinations.

Office Retail Industrial Hotel R&D
Other
Non-Res
Berkeley $4.50 $4.50 $2.25 $4.50 $4.50 -
Oakland $5.90 - $5.90 - - -
Petaluma $2.93 $5.07 $3.02 - - -
SLO County $2.46 $2.11 $0.98 $2.11 - $1.84
City of San Luis Obispo $5.00 $5.00 $4.00 $4.00
Sources: David Rosen and Associates; Keyser Marston Associates; City of Berkeley; City of Oakland; City of Petaluma; County of San Luis Obispo; Economic & Planning Systems, Inc. 2021 Commercial Linkage Fee Amount
Jurisdiction

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complying onsite. If provided onsite in a for-sale development, 10 percent of the units would be required to be affordable, with the inclusionary units split between low-income units (5 percent) and moderate-income units (5 percent). For rental properties, 6 percent of units would be required to be affordable, again split between low-income units (3 percent) and moderateincome units (3 percent).

EPS also recommends the removal of Table 2A. As discussed, EPS analysis finds that under current market conditions, units of these sizes are not affordable even for moderate-income households (households earning 120 percent of AMI). Therefore, units of at least 1,100 square feet are not ‘affordable by design’, as was the intent of Table 2A, and developers of these units are providing lower levels of affordable housing in the community.

If developers elect to pay an in-lieu fee instead of providing inclusionary units, EPS recommends a per square foot fee as opposed to a percent-of-value fee. For for-sale residential, the recommended fee level is $25 per square foot, while for rental units, the recommended fee level is $20 per square foot. In-lieu fees are paid on a per square foot basis up to the per unit fee maximum determined by the DRA Affordable Housing Nexus Study. Regarding fractional units (i.e., the inclusionary requirement results in a non-whole number of affordable units), the City currently requires that fractional units be rounded up to the nearest whole number of units.

Affordable Housing Commercial Linkage Fee Levels
For commercial developments, EPS recommends a commercial linkage fee as opposed to an inclusionary program. The proposed fee amounts are $5.00 per square foot for office, service, hotel, and retail uses, and $4.00 per square foot for industrial and institutional uses.

Agreement Page 1

AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on _____________________, by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and HouseKeys, hereinafter referred to as Contractor.

W I T N E S S E T H:

WHEREAS, the City published a Request for Proposals to solicit an administrator for the City’s Below Market Rate (BMR) Housing Programs.

WHEREAS, Contractor is qualified to perform this type of service and has submitted a proposal to do so which has been accepted by City.

NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:

1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, until June 30, 2023, or acceptance or completion of said services.

2. INCORPORATION BY REFERENCE City Specification No. SLO-BMR-2021 is hereby incorporated in and made a part of this Agreement as Exhibit A. The Contractor’s scope of work as mutually agreed upon by the City and the Contractor is attached hereto as Exhibit B and incorporated by reference. The City’s terms and conditions are hereby incorporated in and made a part of this Agreement as Exhibit C. To the extent that there are any conflicts between the Contractor’s fees and scope of work and the City’s terms and conditions, the City’s terms and conditions shall prevail, unless specifically agreed otherwise in writing signed by both parties.

DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA 8/4/2021 | 4:15 PM PDT

Agreement Page 2

3. CITY'S OBLIGATIONS. For providing services as specified in this Agreement, City will pay, and Contractor shall receive therefor compensation in a total sum not to exceed $111,000 for Year 1 (defined as July 1, 2021 to June 30, 2022) and $96,000 for Year 2 (defined as July 1, 2022 to June 30, 2023) for a total of $207,000.

Contractor will bill the City on a monthly basis and will submit all invoices to [email protected]. City understands that any projects or requests of the Contractor that are defined out of the Scope of Work, as referenced in Exhibit B, will equate to $200 per hour of the Contractor’s time.

4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and Agreements herein before mentioned to be made and performed by City, Contractor agrees with City to provide services as set forth in Exhibit B.

5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Community Development Director of the City.

6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete Agreement between the parties hereto. No oral Agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral Agreement, understanding, or representation be binding upon the parties hereto.

7. PROPERTY OF CITY. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, or other written documents or materials prepared by Contractor pursuant to this Agreement will be property of City hereunder and upon the maturation or termination of this Agreement.

8. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows:

City Community Development Department
City of San Luis Obispo
919 Palm Street
San Luis Obispo, CA 93401
Attn: Community Development Director
HouseKeys Julius Nyanda
358 Digital Drive
Morgan Hill, CA 95037
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Agreement Page 3

9. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this Agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.

CITY OF SAN LUIS OBISPO, A Municipal Corporation
By:_____________________________________
Derek Johnson, City Manager
APPROVED AS TO FORM: CONTRACTOR
By: ________________________________ By: _____________________________________ Christine Dietrick, City Attorney Julius Nyanda, CEO, HouseKeys Inc.

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The City of San Luis Obispo is committed to including disabled persons in all of our services, programs and activities.

Telecommunications Device for the Deaf (805) 781-7410.

Exhibit A
Notice Requesting Proposals for Below Market Rate Housing Program Administrator Spec. No. SLO-BMR-2021
The City of San Luis Obispo is requesting sealed proposals for a Below Market Rate (BMR) Housing Program Administrator over a 2-year term (with an option to extend for another 2 years). All proposals must be received by the Department of Finance (990 Palm Street) by 3:00 p.m. on June 14, 2021.

All firms interested in receiving further correspondence regarding this Request for Proposals (RFP) will be required to complete a free registration proposal using BidSync (https://www.bidsync.com/bidsyncapp-web/vendor/register/Login.xhtml).

All proposals must be received via BidSync by the Department of Finance at or before June 14, 2021, when they will be opened electronically in BidSync.

Proposals received after said time may not be considered. The preferred method of submission is electronically via BidSync, but if you wish to send a hard copy, to guard against premature opening, each proposal shall be submitted to the Department of Finance in a sealed envelope plainly marked with the proposal title, project number, proposer name, and time and date of the proposal opening. Proposals shall be submitted using the forms provided in the project package.

Questions should be posted to BidSync where the City will answer.

Project packages and additional information may be obtained at the City’s BidSync website at www.BidSync.com.

Please contact Dan Clancy at [email protected] with any questions. For technical issues with BidSync, please contact BidSync customer help at 800-990-9339.

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TABLE OF CONTENTS
A. INTRODUCTION ....................................................................................................................................1 B. SCOPE OF WORK...................................................................................................................................2 C. PROJECT SCHEDULE..............................................................................................................................4 D. PROJECT BUDGET .................................................................................................................................4 E. GENERAL TERMS AND CONDITIONS ....................................................................................................4 F. CONTRACT AWARD AND EXECUTION..................................................................................................6 G. CONTRACT PERFORMANCE..................................................................................................................6 H. SPECIAL TERMS AND CONDITIONS ....................................................................................................10 I. PROPOSAL CONTENT..........................................................................................................................12 J. PROPOSAL REVIEW.............................................................................................................................13 K. FORM OF AGREEMENT.......................................................................................................................15 L. INSURANCE REQUIREMENTS .............................................................................................................17 M. PROPOSAL SUBMITTAL FORM – SAMPLE..........................................................................................19 DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA

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A. INTRODUCTION
The City’s first Inclusionary Housing Ordinance was adopted in 1999 and since that time, the City has made great strides in ensuring that a percentage of all new housing units are affordable to income-eligible households, defined as extremely low, very-low, low, and moderate income. These homes remain at Below Market Rate (BMR) prices for the required term through deed-restrictions, covenants, and affordability agreements. Over the past several years, the City's BMR portfolio has grown substantially, and staff has determined that the best way to effectively accomplish the management and administration of BMR housing going forward is through a consultant. As a result, staff is recommending issuance of an RFP to solicit outside consultant expertise to oversee BMR housing administration, including ownership and rental units, and administration of the City’s First-Time Homebuyer Loan program.

BMR Ownership Units
There are approximately 73 BMR homeownership units within the City’s portfolio. The most recent additions are five moderate-income units within the South Morros neighborhood, of which three have sold in the past eight months and the other two are expected to sell by the end of summer. These units are restricted through provisions included in the Deed of Trust, Promissory Note, and Resale Restriction Agreement that are recorded on title of each property when it is sold. These documents, among other items, dictate the sale/resale process, the allowable sales price, income qualifications of subsequent buyers, refinancing provisions, and repayment requirements due upon sale or default.

Management of these units by a BMR Housing Administrator under contract with the City is expected to provide a higher level of service to homeowners and potential homeowners under the program.

Currently, the City has one staff member who has the training and knowledge to assist with these complex real estate transactions, while simultaneously engaging in other housing programs, including the Housing Major City Goal workplan, Housing Element programs, and coordination of new affordable housing development and financing. The use of a consultant to perform this work will ensure timely processing of purchase and sale agreements, refinancing, subordination agreements, and other time sensitive work.

BMR Rental Units
The City has approximately 106 affordable rental units scattered throughout the City. These units are located within market-rate projects and require close oversight since they are not normally managed by an experienced affordable housing administrator/provider. These units are typically built by private developers, consistent with the Inclusionary Housing Ordinance, and are secured as affordable through deed-restrictions (or affordability covenants/agreements) entered into by the City and the project owners. The units subject to these agreements are proposed to be managed by the BMR Housing Administrator.

The City also has a healthy inventory of rental units managed by non-profit housing agencies (i.e., HASLO, Peoples’ Self-Help Housing, etc.), which were partially developed by City financing mechanisms (i.e., the Affordable Housing Fund, Community Development Block Grants, Impact Fee Deferral loans).

These units are within complexes that are 100% affordable due to tax credit and/or other subsequent federal, state, and local requirements, and thus have multiple deed-restrictions recorded on title of the properties due to the criteria stipulated by those various funding sources. Because these units are managed by experienced affordable housing administrators, the City is not proposing to have the DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA

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proposed BMR Housing Administrator manage these units—compliance monitoring and coordination with non-profit partners that manage these projects will stay within the scope of work of City staff.

First-Time Homebuyer/BEGIN Program Loans
The City also has various first-time homebuyer assistance loans utilizing the State grant BEGIN Program and City Affordable Housing Fund dollars. Currently, there are 11 active loans and approximately $200,000 available for issuance. Funds are issued as 30-year loans, that are executed via a Promissory Note, evidenced by a Deed of Trust that is recorded on title of the property purchased. Repayment is due upon sale, may be made at the request of the homeowner, or is due upon completion of the loan term. The BMR Housing Administrator will monitor existing loans and improve City marketing of the program to make additional loans within the City’s balance of available funding.

B. SCOPE OF WORK
The subject RFP solicits the services of a BMR Housing Program Administrator consultant to oversee the administration of the City’s BMR ownership and rental units, as well as the First-Time Homebuyer Loan program. It is anticipated that administrator will be responsible for the following:

1. BMR Program Administration Setup
a. Review, update (if necessary), and transfer the City’s existing BMR Interest List database to consultant administration which will be owned by the City. b. Review and organize San Luis Obispo BMR homeowner files, loan files, and the City’s existing digital inventory and create a system for ongoing administration and monitoring. c. Review existing BMR Agreement templates and suggest modifications that are in line with industry best practices.
d. Update existing flow charts and protocols for BMR home transfers, loan payoff/subordination, default remedies, and other processes associated with BMR ownership transactions. e. Review and develop recommendations to establish new City fees associated with costs of BMR Program transactions.
f. Update City Affordable Housing webpage with content and information pertaining to updated/amended policies and procedures for the BMR program, online application forms and other relevant information.

2. BMR Housing Program Administration
a. BMR Inquiries (ongoing): The BMR Housing Administrator will be responsible for handling calls, emails, and in-person inquiries related to current housing portfolio loan holders and respond in a timely manner.
b. BMR Eligibility and Interest List (ongoing): The BMR Housing Administrator will maintain a list of qualified buyers and interested prospective buyers.
c. BMR Program Reports: The BMR Housing Administrator will provide semi-annual updates to staff and the City Council on the general status of the BMR program administration, including:

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i. General Program activity (e.g., BMR inquiries)
ii. BMR compliance. See item #3
iii. Loan activity. See item #4
iv. Current inventory of affordable units (subject to formal Agreement with the City) v. Other information as needed for State reporting
vi. Performance Metrics (see Section E below)

3. Annual BMR Compliance Monitoring
a. Documentation: The BMR Housing Administrator will administer the program and assure Affordability Deed Restrictions are recorded and followed by all parties as applicable for each property.
b. BMR Homeowner Certification: The BMR Housing Administrator will coordinate with homeowners on an annual basis to certify that the original buyer continues to comply with the signed BMR Agreement including living in the BMR home as their principal residence. The BMR Housing Administrator will work with the City to remedy potential BMR defaults in accordance with the BMR Agreement.
c. BMR Renter Certification: The BMR Housing Administrator will coordinate with property managers, tenants, and the Housing Authority of San Luis Obispo (HASLO) on an annual basis to certify that all BMR units are occupied by renters who continue to meet income requirements.

The BMR Housing Administrator will also ensure that the appropriate rent and utilities are being charged given annual updates to the City’s Affordable Housing Standards, based on State income limits for our area.

4. Existing Loan Administration
a. The BMR Housing Administrator will maintain an updated database, to be owned by the City, of all first-time-homebuyer and other housing loans (borrower name and address, loan amount, interest rate, loan term, loan distribution date and due date). This database will also include principal and interest received for loans that have been paid off, as well as any principal written off as a result of foreclosure or other default.
b. The BMR Housing Administrator will monitor existing first-time-homebuyer and other housing loans annually to ensure that the borrower remains in compliance with the loan agreement (e.g., current homeowner insurance, original buyer continues to reside on property). In case of default, the BMR Housing Administrator will contact the owner and work with the City to see that the loan is repaid.
c. The BMR Housing Administrator will work with the City to process all paperwork and legal recordings required when first-time homebuyer loans and other housing loans are paid off or refinanced (as needed basis).

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5. BMR Home Sales/Resales (as needed basis)
a. BMR Marketing: The BMR Housing Administrator will work with each Developer and/or the City to market the availability of new and resale BMR homes to eligible households who have expressed interest in the BMR program. BMR Housing Administrator will also be responsible ensuring developers’ compliance with sale provisions dictated in recorded Development Agreements (i.e. San Luis Ranch and Avila Ranch) and Affordable Housing Agreements. This task will include providing marketing materials in both English and Spanish to City staff for the City’s website.
b. Interest Rates, Homeowner’s Association Fees, and Sales Price: Upon request, the BMR Housing Administrator will supply the City with current mortgage interest rates and other information necessary to amend (if necessary) sales prices and/or interest rates of new BMR homes and existing BMR homes being offered for resale.
c. Homeowner Eligibility: The BMR Housing Administrator will submit the data on each eligible applicant to the City for approval prior to formalizing any Agreement.

6. BMR Programs: The BMR Housing Administrator will work with City staff to recommend, develop and implement programs. City Council will approve any new programs under this task.

7. Administrator will regularly update program guidelines and program materials in conjunction with City staff to reflect the Administrator’s administrative process for Program Administration including, but not limited to: applications, program pamphlets, rent & resale calculations (i.e.

Affordable Housing Standards), selection processes, vacancies, sale and resale of units, refinancing requests, collection of Agency fees and other applicable fees, and default monitoring/resolution process. Administrator’s objective will be to work alongside Agency Staff to incorporate “learnings” from the team’s collective history with housing affordability programs in California.

C. PROJECT SCHEDULE
As this Project will be ongoing, no activity and scheduled dates are necessary. Instead, contractor will comply with expectations and reporting deadlines outlined in the Scope of Work and subsequent agreement to be executed upon selection of contractor. Please refer to Section I – Proposal Review below for a tentative schedule regarding the review process for proposals received. Note that administration of the BMR Program is perceived to commence on July 26, 2021.

D. PROJECT BUDGET
The administration of the City’s BMR Program is budgeted at $117,000 annually for the next two City fiscal years (Year1: July 1, 2021 – June 30, 2022; Year 2: July 1, 2022 - June 30, 2023). Upon the end of the two-year period, the City will consider extending contract budget for subsequent 2-year period.

E. PERFORMANCE MONITORING
The City holds the right to monitor performance of the BMR Housing Administrator, including but not limited to, timeliness in response to inquiries and satisfaction of clients.

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F. GENERAL TERMS AND CONDITIONS

PROPOSAL REQUIREMENTS

1. Requirement to Meet All Provisions. Each individual or firm submitting a proposal (bidder) shall meet all the terms, and conditions of the Request for Proposals (RFP) project package. By virtue of its proposal submittal, the bidder acknowledges agreement with and acceptance of all provisions of the RFP specifications.

2. Proposal Submittal. Each proposal must be submitted on the form(s) provided in the specifications and accompanied by any other required submittals or supplemental materials.

Proposal documents shall be enclosed in an envelope that shall be sealed and addressed to the Department of Finance, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA, 93401. To guard against premature opening, the proposal should be clearly labeled with the proposal title, project number, name of bidder, and date and time of proposal opening. No FAX or emailed submittals will be accepted.

3. Insurance Certificate. Each proposal must include a certificate of insurance showing:
a. The insurance carrier and its A.M. Best rating.
b. Scope of coverage and limits.
c. Deductibles and self-insured retention.

The purpose of this submittal is to generally assess the adequacy of the bidder’s insurance coverage during proposal evaluation; as discussed under paragraph 12 below, endorsements are not required until contract award. The City’s insurance requirements are detailed in Section E.

4. Proposal Quotes and Unit Price Extension. The extension of unit prices for the quantities indicated and the lump sum prices quoted by the bidder must be entered in figures in the spaces provided on the Proposal Submittal Form(s). Any lump sum bid shall be stated in figures. The Proposal Submittal Form(s) must be totally completed. If the unit price and the total amount stated by any bidder for any item are not in agreement, the unit price alone will be considered as representing the bidder’s intention and the proposal total will be corrected to conform to the specified unit price.

5. Proposal Withdrawal and Opening. A bidder may withdraw its proposal, without prejudice prior to the time specified for the proposal opening, by submitting a written request to the Director of Finance for its withdrawal, in which event the proposal will be returned to the bidder unopened.

No proposal received after the time specified or at any place other than that stated in the “Notice Inviting Bids/Requesting Proposals” will be considered. All proposals will be opened and declared publicly. Bidders or their representatives are invited to be present at the opening of the proposals.

6. Submittal of One Proposal Only. No individual or business entity of any kind shall be allowed to make or file, or to be interested as the primary submitter in more than one proposal, except an alternative proposal when specifically requested; however, an individual or business entity that has submitted a sub-proposal to a bidder submitting a proposal, or who has quoted prices on materials to such bidder, is not thereby disqualified from submitting a sub-proposal or from quoting prices to other bidders submitting proposals.

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7. Communications. All timely requests for information submitted in writing will receive a written response from the City. Telephone communications with City staff are not encouraged but will be permitted. However, any such oral communication shall not be binding on the City.

G. CONTRACT AWARD AND EXECUTION

8. Proposal Retention and Award. The City reserves the right to retain all proposals for a period of 60 days for examination and comparison. The City also reserves the right to waive non-substantial irregularities in any proposal, to reject any or all proposals, to reject or delete one part of a proposal and accept the other, except to the extent that proposals are qualified by specific limitations. See the “special terms and conditions” in Section C of these specifications for proposal evaluation and contract award criteria.

9. Competency and Responsibility of Bidder. The City reserves full discretion to determine the competence and responsibility, professionally and/or financially, of bidders. Bidders will provide, in a timely manner, all information that the City deems necessary to make such a decision.

10. Contract Requirement. The bidder to whom award is made (Contractor) shall execute a written contract with the City within ten (10) calendar days after notice of the award has been sent by mail to it at the address given in its proposal. The contract shall be made in the form adopted by the City and incorporated in these specifications.

H. CONTRACT PERFORMANCE

11. Insurance Requirements. The Contractor shall provide proof of insurance in the form, coverages and amounts specified in Section E of these specifications within 10 (ten) calendar days after notice of contract award as a precondition to contract execution.

12. Business License & Tax. The Contractor must have a valid City of San Luis Obispo business license & tax certificate before execution of the contract. Additional information regarding the City’s business tax program may be obtained by calling (805) 781-7134.

13. Ability to Perform. The Contractor warrants that it possesses, or has arranged through subcontracts, all capital and other equipment, labor, materials, and licenses necessary to carry out and complete the work hereunder in compliance with all federal, state, county, city, and special district laws, ordinances, and regulations.

14. Laws to be Observed. The Contractor shall keep itself fully informed of and shall observe and comply with all applicable state and federal laws and county and City of San Luis Obispo ordinances, regulations and adopted codes during its performance of the work.

15. Payment of Taxes. The contract prices shall include full compensation for all taxes that the Contractor is required to pay.

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16. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges and fees, and give all notices necessary.

17. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to safety established by OSHA and the California Division of Industrial Safety.

18. Public and Employee Safety. Whenever the Contractor’s operations create a condition hazardous to the public or City employees, it shall, at its expense and without cost to the City, furnish, erect and maintain such fences, temporary railings, barricades, lights, signs and other devices and take such other protective measures as are necessary to prevent accidents or damage or injury to the public and employees.

19. Preservation of City Property. The Contractor shall provide and install suitable safeguards, approved by the City, to protect City property from injury or damage. If City property is injured or damaged resulting from the Contractor’s operations, it shall be replaced or restored at the Contractor’s expense. The facilities shall be replaced or restored to a condition as good as when the Contractor began work.

20. Immigration Act of 1986. The Contractor warrants on behalf of itself and all subcontractors engaged for the performance of this work that only persons authorized to work in the United State pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder.

21. Contractor Non-Discrimination. In the performance of this work, the Contractor agrees that it will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination in employment of persons because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion of such persons.

22. Work Delays. Should the Contractor be obstructed or delayed in the work required to be done hereunder by changes in the work or by any default, act, or omission of the City, or by strikes, fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or labor due to federal government restrictions arising out of defense or war programs, then the time of completion may, at the City’s sole option, be extended for such periods as may be agreed upon by the City and the Contractor. In the event that there is insufficient time to grant such extensions prior to the completion date of the contract, the City may, at the time of acceptance of the work, waive liquidated damages that may have accrued for failure to complete on time, due to any of the above, after hearing evidence as to the reasons for such delay, and making a finding as to the causes of same.

23. Payment Terms. The City’s payment terms are 30 days from the receipt of an original invoice and acceptance by the City of the materials, supplies, equipment, or services provided by the Contractor (Net 30).

24. Inspection. The Contractor shall furnish City with every reasonable opportunity for City to ascertain that the services of the Contractor are being performed in accordance with the requirements and intentions of this contract. All work done, and all materials furnished, if any, shall be subject to the City’s inspection and approval. The inspection of such work shall not relieve Contractor of any of its obligations to fulfill its contract requirements.

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25. Audit. The City shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its invoices to City as a condition precedent to any payment to Contractor.

26. Interests of Contractor. The Contractor covenants that it presently has no interest, and shall not acquire any interest—direct, indirect or otherwise—that would conflict in any manner or degree with the performance of the work hereunder. The Contractor further covenants that, in the performance of this work, no subcontractor or person having such an interest shall be employed.

The Contractor certifies that no one who has or will have any financial interest in performing this work is an officer or employee of the City. It is hereby expressly agreed that, in the performance of the work hereunder, the Contractor shall at all times be deemed an independent contractor and not an agent or employee of the City.

27. Hold Harmless and Indemnification.
(a) Non-design, non-construction Professional Services: To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims.
(b) Non-design, construction Professional Services: To the extent the Scope of Services involve a “construction contract” as that phrase is used in Civil Code Section 2783, this paragraph shall apply in place of paragraph A. To the fullest extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8), Consultant shall indemnify, defend, and hold harmless the City, and its elected officials, officers, employees, volunteers, and agents (“City Indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Consultant’s performance or Consultant’s failure to perform its obligations under this Agreement or out of the operations conducted by Consultant, except for such loss or damage arising from the active negligence, sole negligence or willful misconduct of the City. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. (c) Design Professional Services: In the event Consultant is a “design professional”, and the Scope of Services require Consultant to provide “design professional services” as those phrases are used in Civil Code Section 2782.8, this paragraph shall apply in place of paragraphs A or B. To the fullest DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA

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extent permitted by law (including, but not limited to California Civil Code Sections 2782 and 2782.8) Consultant shall indemnify, defend and hold harmless the City and its elected officials, officers, employees, volunteers and agents (“City Indemnitees”), from and against all claims, damages, injuries, losses, and expenses including costs, attorney fees, expert consultant and expert witness fees arising out of, pertaining to or relating to, the negligence, recklessness or willful misconduct of Consultant, except to the extent caused by the sole negligence, active negligence or willful misconduct of the City. Negligence, recklessness or willful misconduct of any subcontractor employed by Consultant shall be conclusively deemed to be the negligence, recklessness or willful misconduct of Consultant unless adequately corrected by Consultant. In the event the City Indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Consultant’s performance of this Agreement, the Consultant shall provide a defense to the City Indemnitees or at the City’s option, reimburse the City Indemnitees their costs of defense, including reasonable legal fees, incurred in defense of such claims. In no event shall the cost to defend charged to Consultant under this paragraph exceed Consultant’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs.
(d) The review, acceptance or approval of the Consultant’s work or work product by any indemnified party shall not affect, relieve or reduce the Consultant’s indemnification or defense obligations. This Section survives completion of the services or the termination of this contract.

The provisions of this Section are not limited by and do not affect the provisions of this contract relating to insurance.

28. Contract Assignment. The Contractor shall not assign, transfer, convey or otherwise dispose of the contract, or its right, title or interest, or its power to execute such a contract to any individual or business entity of any kind without the previous written consent of the City.

29. Termination for Convenience. The City may terminate all or part of this Agreement for any or no reason at any time by giving 30 days written notice to Contractor. Should the City terminate this Agreement for convenience, the City shall be liable as follows: (a) for standard or off-the-shelf products, a reasonable restocking charge not to exceed ten (10) percent of the total purchase price; (b) for custom products, the less of a reasonable price for the raw materials, components work in progress and any finished units on hand or the price per unit reflected on this Agreement.

For termination of any services pursuant to this Agreement, the City’s liability will be the lesser of a reasonable price for the services rendered prior to termination, or the price for the services reflected on this Agreement. Upon termination notice from the City, Contractor must, unless otherwise directed, cease work and follow the City’s directions as to work in progress and finished goods.

30. Termination. If, during the term of the contract, the City determines that the Contractor is not faithfully abiding by any term or condition contained herein, the City may notify the Contractor in writing of such defect or failure to perform. This notice must give the Contractor a 10 (ten) calendar day notice of time thereafter in which to perform said work or cure the deficiency.

If the Contractor has not performed the work or cured the deficiency within the ten days specified in the notice, such shall constitute a breach of the contract and the City may terminate the contract immediately by written notice to the Contractor to said effect. Thereafter, neither party DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA

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shall have any further duties, obligations, responsibilities, or rights under the contract except, however, any and all obligations of the Contractor’s surety shall remain in full force and effect, and shall not be extinguished, reduced, or in any manner waived by the terminations thereof.

In said event, the Contractor shall be entitled to the reasonable value of its services performed from the beginning date in which the breach occurs up to the day it received the City’s Notice of Termination, minus any offset from such payment representing the City’s damages from such breach. “Reasonable value” includes fees or charges for goods or services as of the last milestone or task satisfactorily delivered or completed by the Contractor as may be set forth in the Agreement payment schedule; compensation for any other work, services or goods performed or provided by the Contractor shall be based solely on the City’s assessment of the value of the workin-progress in completing the overall work scope.

The City reserves the right to delay any such payment until completion or confirmed abandonment of the project, as may be determined in the City’s sole discretion, so as to permit a full and complete accounting of costs. In no event, however, shall the Contractor be entitled to receive in excess of the compensation quoted in its proposal.

I. SPECIAL TERMS AND CONDITIONS

1. Contract Award. Subject to the reservations set forth in Paragraph 9 of Section B (General Terms and Conditions) of these specifications, the contract will be awarded to the lowest responsible, responsive proposer.

2. Sales Tax Reimbursement.

For sales occurring within the City of San Luis Obispo, the City receives sales tax revenues.

Therefore, for bids from retail firms located in the City at the time of proposal closing for which sales tax is allocated to the City, 1% of the taxable amount of the bid will be deducted from the proposal by the City in calculating and determining the lowest responsible, responsive proposer.

3. Labor Actions.

In the event that the successful proposer is experiencing a labor action at the time of contract award (or if its suppliers or subcontractors are experiencing such a labor action), the City reserves the right to declare said proposer is no longer the lowest responsible, responsive proposer and to accept the next acceptable low proposal from a proposer that is not experiencing a labor action, and to declare it to be the lowest responsible, responsive proposer.

4. Failure to Accept Contract.

The following will occur if the proposer to whom the award is made (Contractor) fails to enter into the contract: the award will be annulled; any bid security will be forfeited in accordance with the special terms and conditions if a proposer's bond or security is required; and an award may be made to the next lowest responsible, responsive proposer who shall fulfill every stipulation as if it were the party to whom the first award was made.

5. Contract Term
The supplies or services identified in this specification will be used by the City for up to one year.

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otherwise conditioned by the proposer in its proposal.

6. Contract Extension.

The term of the contract may be extended by mutual consent for an additional one-year, and annually thereafter, for a total of four years.

7. Supplemental Purchases.

Supplemental Purchases. Supplemental purchases may be made from the successful proposer during the contract term in addition to the items listed in the Detail Proposal Submittal Form. For these supplemental purchases, the proposer shall not offer prices to the City in excess of the amounts offered to other similar customers for the same item. If the proposer is willing to offer the City a standard discount on all supplemental purchases from its generally prevailing or published price structure during the contract term, this offer and the amount of discount on a percentage basis should be provided with the proposal submittal.

8. Contractor Invoices
The Contractor may deliver either a monthly invoice to the City with attached copies of detailed invoices as supporting detail, or one lump-sum upon completion.

9. Non-Exclusive Contract.

The City reserves the right to purchase the items listed in the Detail Proposal Submittal Form, as well as any supplemental items, from other vendors during the contract term.

10. Unrestrictive Brand Names. Any manufacturer's names, trade names, brand names or catalog numbers used in the specifications are for the purpose of describing and establishing general quality levels. Such references are not intended to be restrictive. Proposals will be considered for any brand that meets or exceeds the quality of the specifications given for any item. In the event an alternate brand name is proposed, supplemental documentation shall be provided demonstrating that the alternate brand name meets or exceeds the requirements specified herein. The burden of proof as to the suitability of any proposed alternatives is upon the proposer, and the City shall be the sole judge in making this determination.

11. Delivery. Prices quoted for all supplies or equipment to be provided under the terms and conditions of this RFP package shall include delivery charges, to be delivered F.O.B. San Luis Obispo by the successful proposer and received by the City within 90 days after authorization to proceed by the City.

12. Start and Completion of Work. Work on this project shall begin immediately after contract execution and shall be completed within 90 calendar days thereafter, unless otherwise negotiated with City by mutual agreement.

13. Change in Work. The City reserves the right to change quantities of any item after contract award.

If the total quantity of any changed item varies by 25% or less, there shall be no change in the agreed upon unit price for that item. Unit pricing for any quantity changes per item in excess of 25% shall be subject to negotiation with the Contractor.

14. Submittal of References. Each proposer shall submit a statement of qualifications and references on the form provided in the RFP package.

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15. Statement of Contract Disqualifications. Each proposer shall submit a statement regarding any past governmental agency bidding or contract disqualifications on the form provided in the RFP package.

J. PROPOSAL CONTENT
Proposals must, at a minimum, contain the information listed below, and may include any other information that the candidate feels will facilitate the City’s consideration.

1. Cover Letter. Please include a cover letter which includes your interest in administering the City of San Luis Obispo’s BMR Program and any other information that you would like to highlight. (MAXIMUM OF ONE PAGE)

2. Qualifications. Describe your firm’s experience and qualifications to administer San Luis Obispo’s BMR Program, including processing Resale Restriction Agreements and Deeds of Trust; loan subordination and payoff transactions; compliance monitoring and certification; transfers and defaults. Include a list of jurisdictions for which you provide similar services. Provide an example of your experience in dealing with compliance issues (i.e., steps taken, outcome, etc.). (MAXIMUM

OF THREE PAGES)

3. Program Administration. Provide a detailed discussion of how your firm will implement and administer the BMR Program, including the protocol your firm will use for each of the tasks identified in the Scope of Services. Include a description of the anticipated interaction between your firm, the City, and BMR clients. Include an organizational chart which identifies the primary role of each team member (e.g., BMR inquiries, document preparation, monitoring, etc.). (MAXIMUM OF SIX PAGES, NOT INCLUDING EXAMPLES)
a. Provide example documents used to perform annual monitoring of both rental and ownership units.
b. Provide example application forms (pre-qualification, etc.) and helpful documents (e.g., FAQs, process, etc.) that an applicant would access on the dedicated webpage that would be set up for San Luis Obispo’s BMR program.

4. Cost.
a. Submit in a separate sealed envelope a cost estimate for each task in the Scope of Services (e.g., fixed fee for basic services, fee per transaction / sale). See attachment for example. b. Include any other costs associated with administering the BMR program. c. Include the estimated hours for each staff member assigned to each task, including the associated cost and hourly rate.
d. Include a not-to-exceed amount that would be contained in a potential agreement with the City.

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e. Hourly rates may be used for pricing the cost of additional services (beyond the scope of services), as needed.

5. Additional Information. Provide general suggestions regarding the City’s BMR program or the requested scope of services. For example, provide suggestions on how the City might improve San Luis Obispo’s BMR program or finance the BMR Housing Administrator contract through a self-sustaining fee structure, etc.

6. Identify Key Staff. Provide a resume for the BMR Program Manager, main point of contact, and any other key staff who will be involved in the day-to-day administration of the City’s BMR program (e.g., interacting with applicants and city staff, preparing and recording legal documents, submitting reports, etc.).

7. References. Include the name, address, phone number, and email for a minimum of three (3) references for which you administer their affordable housing program.

8. Insurance Coverage. Provide a statement verifying that your firm meets the insurance requirements contained in Attachment A, Article 5, Section D. Identify carriers, A.M. Best ratings, types, and limits of insurance carried by your firm.

9. Terminated Contracts/Litigation. Please provide a list of contracts/agreements terminated for convenience or default within the past three years, if any. List any litigation that now affects or may affect the firm’s ability to perform work in the future.

10. Language Capabilities. Please describe your capacity to serve Spanish speaking clients in both written and speaking form.

K. PROPOSAL REVIEW

1. Proposal Review and Award Schedule. The following is an outline of the anticipated schedule for proposal review and contract award:

ACTIVITY CONSULTANT CITY SCHEDULE
RFP sent to qualified consultants/Legal Ad X May 26, 2021 Responses due X June 14, 2021
City response to consultants regarding
whether submittal will be considered through
subsequent interview
X June 25, 2021
Interview consultants (If needed) X X June 28 – July 2, 2021 Consultant selection and contract execution X July 16, 2021 Initial kick-off meeting with staff team X X July 19 – 22, 2021 Transfer of Materials to Consultant X X July 19 - 23, 2021 Consultant Will Commence Administration X July 26, 2021 DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA

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2. Ownership of Materials. All original drawings, plan documents and other materials prepared by or in possession of the Contractor as part of the work or services under these specifications shall become the permanent property of the City and shall be delivered to the City upon demand.

3. Release of Reports and Information. Any reports, information, data, or other material given to, prepared by, or assembled by the Contractor as part of the work or services under these specifications shall be the property of the City and shall not be made available to any individual or organization by the Contractor without the prior written approval of the City.

4. Copies of Reports and Information. If the City requests additional copies of reports, drawings, specifications, or any other material in addition to what the Contractor is required to furnish in limited quantities as part of the work or services under these specifications, the Contractor shall provide such additional copies as are requested, and City shall compensate the Contractor for the costs of duplicating of such copies at the Contractor's direct expense.

5. Required Deliverable Products. The Contractor will be required to provide:
a. One electronic submission - digital-ready original .pdf of all final documents. If you wish to file a paper copy, please submit in sealed envelope to the address provided in the RFP. b. Corresponding computer files compatible with the following programs whenever possible unless otherwise directed by the project manager:

Word Processing: MS Word
Spreadsheets: MS Excel
Desktop Publishing: InDesign
Virtual Models: Sketch Up
Digital Maps: Geodatabase shape files in
State Plan Coordinate System as
specified by City GIS staff
c. City staff will review any documents or materials provided by the Contractor and, where necessary, the Contractor will be required to respond to staff comments and make such changes as deemed appropriate.

ALTERNATIVE PROPOSALS

6. Alternative Proposals. The proposer may submit an alternative proposal (or proposals) that it believes will also meet the City's project objectives but in a different way. In this case, the proposer must provide an analysis of the advantages and disadvantages of each of the alternative and discuss under what circumstances the City would prefer one alternative to the other(s).

7. Attendance at Meetings and Hearings. As part of the work scope and included in the contract price is attendance by the Contractor at up to [number] public meetings to present and discuss its findings and recommendations. Contractor shall attend as many "working" meetings with staff as necessary in performing work-scope tasks.

8. Accuracy of Specifications. The specifications for this project are believed by the City to be DocuSign Envelope ID: 75625E07-5FE2-44F2-9801-51D27F6F62FA

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accurate and to contain no affirmative misrepresentation or any concealment of fact. Bidders are cautioned to undertake an independent analysis of any test results in the specifications, as City does not guaranty the accuracy of its interpretation of test results contained in the specifications package. In preparing its proposal, the bidder and all subcontractors named in its proposal shall bear sole responsibility for proposal preparation errors resulting from any misstatements or omissions in the plans and specifications that could easily have been ascertained by examining either the project site or accurate test data in the City's possession. Although the effect of ambiguities or defects in the plans and specifications will be as determined by law, any patent ambiguity or defect shall give rise to a duty of bidder to inquire prior to proposal submittal. Failure to so inquire shall cause any such ambiguity or defect to be construed against the bidder. An ambiguity or defect shall be considered patent if it is of such a nature that the bidder, assuming reasonable skill, ability and diligence on its part, knew or should have known of the existence of the ambiguity or defect. Furthermore, failure of the bidder or subcontractors to notify City in writing of specification or plan defects or ambiguities prior to proposal submittal shall waive any right to assert said defects or ambiguities subsequent to submittal of the proposal.

To the extent that these specifications constitute performance specifications, the City shall not be liable for costs incurred by the successful bidder to achieve the project’s objective or standard beyond the amounts provided there for in the proposal.

In the event that, after awarding the contract, any dispute arises as a result of any actual or alleged ambiguity or defect in the plans and/or specifications, or any other matter whatsoever, Contractor shall immediately notify the City in writing, and the Contractor and all subcontractors shall continue to perform, irrespective of whether or not the ambiguity or defect is major, material, minor or trivial, and irrespective of whether or not a change order, time extension, or additional compensation has been granted by City. Failure to provide the hereinbefore described written notice within one (1) working day of contractor's becoming aware of the facts giving rise to the dispute shall constitute a waiver of the right to assert the causative role of the defect or ambiguity in the plans or specifications concerning the dispute.

L. FORM OF AGREEMENT

AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on [day, date, year] by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and [CONTRACTOR’S NAME IN CAPITAL LETTERS], hereinafter referred to as Contractor.

W I T N E S S E T H:

WHEREAS, on [date], City requested proposals for [______________], per Project No. [xxxx] WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City for said project;
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NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:

1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered, as first written above, until acceptance or completion of said project.

2. INCORPORATION BY REFERENCE. City Specification No. ______ and Contractor's proposal dated [date] is hereby incorporated in and made a part of this Agreement and attached as Exhibit A. The City’s terms and conditions are hereby incorporated in an made a part of this Agreement as Exhibit B. To the extent that there are any conflicts between the Contractor’s fees and scope of work and the City’s terms and conditions, the City’s terms and conditions shall prevail, unless specifically agreed otherwise in writing signed by both parties.

3. CITY'S OBLIGATIONS. For providing the services as specified in this Agreement, City will pay, and Contractor shall receive therefore compensation [xxxxxxx]. If there are installment payments? Contractor shall be eligible for compensation installments after completion of milestone Tasks -E as shown in the attached project schedule.

4. CONTRACTOR/CONSULTANT’S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to do everything required by this Agreement and the said specifications.

5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the City Manager.

6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto.

No oral agreement, understanding or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding or representation be binding upon the parties hereto.

7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows:

City Name
Dept.

Address
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Consultant Name
Title
Address
Address

8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that everyone executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.

CITY OF SAN LUIS OBISPO:

By: _____________________________________
City Manager
APPROVED AS TO FORM: CONSULTANT:
________________________________ By: _____________________________________ City Attorney Name of CAO / President
Its: CAO / President
M. INSURANCE REQUIREMENTS - CONSULTANTS
Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. General Liability, Errors and Omissions and Pollution and/or Asbestos Pollution Liability coverages should be maintained for a minimum of five (5) years after contract completion.

Minimum Scope of Insurance. Coverage shall be at least as broad as:

1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001 or Claims Made Form CG 0002).

2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto), or code 8, 9 if no owned autos.

3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance.

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4. Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions.

Minimum Limits of Insurance. Contractor shall maintain limits no less than:

1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.

3. Employer's Liability: $1,000,000 each accident, $1,000,000 policy limit bodily injury by disease, $1,000,000 each employee bodily injury by disease.

4. Pollution and/or Asbestos Pollution Liability and/or Errors and Omissions: $1,000,000 each occurrence/$2,000,000 policy aggregate.

Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the Entity.

Other Insurance Provisions. The following insurance provisions shall also apply:

1. The general liability, automobile liability, pollution and/or asbestos pollution and/or errors & omissions policies are to contain, or be endorsed to contain, the following provisions:
a. The City, its officers, officials, employees, agents and volunteers are to be covered as additional insureds as respects: liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; pollution and/or asbestos pollution and/or errors or omissions, or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the Entity, its officers, officials, employees, agents or volunteers.

Note: Automobile, Pollution, Asbestos Pollution and/or Errors and Omissions insurance carriers may not name the City as Additional Insured. If the City cannot be named as Additional Insured, a letter from the insurance company confirming their position required. b. For any claims related to this project, the Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Contractor's insurance and shall not contribute with it.
c. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. d. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party except after thirty (30) days prior written notice has been given to the City.

2. The automobile liability policy shall be endorsed to delete the pollution and/or the asbestos exclusion and add the Motor Carrier Act endorsement (MCS-90).

3. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverages are written on a Claims Made Form:

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a. The "Retro Date" must be shown, and must be before the date of the contract or the beginning of contract work.
b. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract or work.
c. If the coverage is canceled or non-renewed, and not replaced with another claims made policy form with a "Retro Date" prior to the contract effective date, the Contractor must purchase "extended reporting" coverage for a minimum of five years after completion of the contract or work.
d. A copy of the claims reporting requirements must be submitted to the City for review.

4. The workers compensation policy shall be endorsed with a waiver of subrogation in favor of the City.

Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Since Pollution and/or Asbestos Pollution coverages may not be available from an "Admitted" insurer, the coverage may be written by a Non-Admitted insurance company. A Non-admitted company should have an A.M. Best's rating of A:X or higher. Pollution and/or Asbestos coverages may also be written by a Captive Insurance Company or Risk Retention Group or Captive Insurance Company, the City will check with its Insurance Advisor for further information before approval.

Verification of Coverage. Contractor shall furnish the City with certified copies of endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City, unless the insurance company will not use the City's form. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Contractor's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications.

Subcontractors. Contractor shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.

N. PROPOSAL SUBMITTAL FORM – SAMPLE
A complete proposal must include the forms in this section plus the required insurance certificate.

THESE REQUIRED PROPOSAL DOCUMENTS SHALL BE ENCLOSED IN TWO SEPARATE SEALED ENVELOPES.

The first envelope shall be labeled “Qualification Proposal” and shall include the following proposal documents completed in full:

1. Information about the Proposing Firm

2. References
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3. Statement of Past Contract Disqualifications

4. Insurance Certificate
The second envelope shall be labeled “Price Proposal” and shall include the Price Proposalform.

These envelopes shall be enclosed in a larger envelope that shall be sealed and addressed to the Department of Finance, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, CA 93401. In order to guard against premature opening, the larger envelope should be clearly labeled with the proposal title, specification number, and name of the proposing firm.

INFORMATION ABOUT THE PROPOSER
Firm Name
Mailing
Address
City, State, ZIP
Phone Number
FAX Number
Business Type (proprietorship/partnership/corporation)
Years Operating under this Firm Name
Insurance Company’s A.M. Best Rating
Authorized Representative
Title of Authorized Representative
Signature of Authorized Representative and Date
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REFERENCES
Number of years engaged in providing the services included within the scope of the specifications under the present business name: .

Describe fully the last three contracts performed by your firm that demonstrate your ability to provide the services included with the scope of the specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications.

Reference No. 1:

Agency Name
Contact Name
Telephone & Email
Street Address
City, State, Zip Code
Description of services provided
including contract amount, when
provided and project outcome

Reference No. 2:

Agency Name
Contact Name
Telephone & Email
Street Address
City, State, Zip Code
Description of services provided
including contract amount, when
provided and project outcome

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Reference No. 3
Agency Name
Contact Name
Telephone & Email
Street Address
City, State, Zip Code
Description of services provided
including contract amount, when
provided and project outcome
CURRENT CONTRACTS:

1. 2.

3. 4.

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STATEMENT OF PAST CONTRACT DISQUALIFICATIONS
The proposer shall state whether it or any of its officers or employees who have a proprietary interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal, state, or local government project because of the violation of law, a safety regulation, or for any other reason, including but not limited to financial difficulties, project delays, or disputes regarding work or product quality, and if so to explain the circumstances. ◼ Do you have any disqualification as described in the above paragraph to declare? Yes ❑ No ❑
◼ If yes, explain the circumstances.

Executed on at _______________________________________ under penalty of perjury of the laws of the State of California, that the foregoing is true and correct. ______________________________________
Signature of Authorized Proposer Representative
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PRICE PROPOSAL
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Table of Contents
HouseKeys RFP Response
Solicitation Spec. No. SLO-BMR-2021
Below Market Rate Housing Program Administrator
Section Page Numbers

1. Cover Letter Page 1

2. Qualifications Pages 2-4

3. Program Administration Pages 5-11

4. Cost (Omitted and Uploaded Separately) See Separate Attachment

5. Additional Information Page 12

6. Key Staff Member Roster + Resumes Pages 13-23

7. References Pages 24-32

8. Insurance Coverage Page 33

9. Terminated Contracts / Litigation Page 34

10.Language Capabilities Page 35
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June 13, 2021
Daniel Clancy
City of San Luis Obispo
[email protected]
990 Palm Street
San Luis Obispo, CA 93401
Re: Request for Proposal No. Solicitation Spec. No. SLO-BMR-2021 – Below Market Rate Housing Program Administrator
Dear Daniel,
This letter is to express our interest in serving as the City’s Below Market Rate Housing Program Administrator. Per the instructions in the Request, we have included the following sections.

2. Qualifications

3. Program Administration Plan

4. Cost Breakdown and Fee Schedule

5. Additional Info

6. Key Staff + Resumes

7. References

8. Insurance

9. Litigation

10.Language Capabilities
If you should have any questions regarding this proposal, I may be contacted at (415) 846-8004 or by email at [email protected].

Sincerely,
Julius Nyanda
CEO/Program Manager
HouseKeys Inc (a California C-Corporation)
358 Digital Drive
Morgan Hill, CA
HouseKeys RFP Response Page 1
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2 Qualification (3 Pages Max)

1. Firm’s Experience and Qualifications

2. Processing RRA and DOTs

3. Loan Subordination and Payoffs

4. Compliance and Monitoring and Certification

5. Transfers and Defaults

6. Include Jurisdictions w/ similar services.
a. Compliance Examples
Describe Firm’s Experience and Qualifications as a Program Administrator HouseKeys was started in April of 2015 in response to the void left by the wind down of several Silicon Valley nonprofit housing, lending, and counseling service providers. Our team has been able to create a sustainable service model through public agency contracts and transaction revenue. As former employees of well-established nonprofit entities that folded after decades of service to the community, we have reengineered the social enterprise model to ensure long-term sustainability through a combination of economically conscious measures and market-driven solutions. Our experienced team of housing, lending, financial services, and technology professionals each have decades of experience working with public agencies and have collaborated over the last ten years to complete nearly 1,000 program transactions. We have administered housing programs in three categories: Homeownership, Rental, and Finance. Finance includes servicing Affordable Housing Loan Portfolios that include First Mortgages and Subordinate Notes. The lessons learned from this work have enabled us to rethink and refine the workflows associated with development, applicant selection, participant compliance, and transaction management. In addition to our C-Corporation, HouseKeys Inc, our management formed the nonprofit agency, HouseKeys Resource & Education Center (Tax ID: 81-2880185) which obtained federal tax-exempt status in the summer of 2017.

HouseKeys Inc is also a DRE-licensed real estate brokerage.

Resale Restriction Agreements & Deeds of Trusts
The Resale Restriction Agreement is our specialty. Not only have we administered large programs with multiple variations of Agreement language, but we have also worked with our legal teams to create restriction agreement templates for both Inclusionary and Density Bonus Units. These document packages include Excess Sales Notes and Deeds of Trust. Using these templates, we have been able to craft language that is effective for day-to-day program operations and major transactions, including compliance certifications, resales, refinances, and family transfers.

HouseKeys’ service offering is strengthened by both our legal team relationships and the administration team members with deep lending, escrow, and real estate brokerage experience.

Loan Subordination and Payoff Transactions
HouseKeys RFP Response Page 2
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HouseKeys oversees loan portfolios in the cities of Morgan Hill, Gilroy, Campbell, and most recently with the City of Menlo Park. HouseKeys is a seasoned underwriter, processor, and servicing entity.

In the most recent round of CalHome funding made available by the State’s Department of Housing & Community Development, HouseKeys assisted the cities of West Hollywood and Hayward to complete their applications which required loan administration and servicing experience requirements. HouseKeys also contracts with AmeriNat Community Services, a nationwide leader in loan servicing for government portfolios.

Compliance Monitoring and Certification
HouseKeys has experience in compliance monitoring, annual owner compliance certifications, and with crafting and administering enforcement policies. Given the size and age of our portfolios, there are complicated legal matters involving defaults, bankruptcies, foreclosures, occupancy violations, transfer violations, and financing violations. HouseKeys runs annual certifications by issuing several rounds of correspondence to homeowners and using the Agreement Language and attached Exhibits to obtain the documentation required annually on their agreement anniversary dates. Morgan Hill and Campbell are good examples of well-resourced contracts with annual budgets commensurate to their homeownership portfolio sizes. In both cities, we have been able to complete annual compliance certifications and work with Staff, the City Attorney, and Council to deal with sensitive legal matters.

This work includes loan portfolios with covenants that require annual compliance certifications for the borrowers.

For Rental Portfolios, we have been heavily involved in the cities of Campbell, Santa Clara, and Burlingame. These large portfolios involve coordinating efforts with Property Owners and their designated Property Management companies. During this process, we work with Property Management to collect the project-level documentation (E.g., Rent Rolls) and contact families to get the Tenant-Level documentation needed to certify the income-eligibility.

Property Transfers and Defaults
As stated above, Property Transfers involving inheritance, divorce, and other transfer types have been a major part of our administration scope given the size and age of the portfolios we manage. As with Transfers, defaults have been a more frequent occurrence as the economy cycles through negative swings. The decrease in interest rates drove up the average number of refinances by 300% year-over-year. Given the pandemic and related economic challenges, we expect an uptick in defaults and are preparing to incorporate more of our tools to help tackle this challenge. This includes running daily scans on all our portfolios to catch bankruptcy and foreclosure filings.

Case Study: Homeowner Violation Leads to Sale to Eligible Buyer in the Applicant Pool
HouseKeys ran a Portfolio Surveillance Report and discovered that one of our homeowners was receiving a property tax bill at an out-of-town address. Our Real Estate Project Manager and Asset Manager visited the home and discovered the home was not owner occupied. HouseKeys informed HouseKeys RFP Response Page 3
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the City of the issue and began a correspondence campaign to issue three letters over a 90-Day period offering the Owner a chance to remedy the violation.

After the 90-Day period passed, HouseKeys worked with the City Attorney and Council in closed session to authorize the assignment of legal rights from the City to HouseKeys. This gave our team legal standing in court and HouseKeys was able to file a Notice of Default, Lawsuit and Lis Pendens to prevent any sales or transfers.

The Owner did finally reach out to HouseKeys and a Memorandum of Understanding was drafted that gave the homeowner an opportunity to sell the property back to the program for the maximum restricted sales price and avoid further legal action. HouseKeys acquired the property at the max price and then worked with the Applicant Pool of 1,661 applicants to hold a Lottery and select a buyer. The property was rehabbed by the HouseKeys Project Management Team for $27,000 and the home was sold to an Eligible Buyer who signed a new 45-Year Restriction Agreement.

Jurisdictions with Similar Services
City of Campbell
• Client since 2016
• Ownership, Rental, and Loan Portfolio
• 87 Ownership Units in 15 Subdivisions
• 52 Rental Units in 5 Rental Complexes
• 42 Loan Units in a First-Homebuyer Program
• Budget: $137,200
City of Santa Clara
• Client Since 2019
• Ownership, Rental
• 1,255 Rental Units in 51 Rental Complexes
• 152 Ownership Units in 21 Subdivisions
• Budget: $225,000
City of Menlo Park
• Client Since 2021
• Ownership, Rental, Loan Portfolio
• 68 Homeownership Units
• 39 Rental Units
• 40 Finance Units
• Budget: $75,000
HouseKeys RFP Response Page 4
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3 Program Administration
# Scope Subject Description Applicable Sections
1 Program Setup Lists, Files, Templates,
Flowcharts and Protocols, Fees
(see Fee Schedule), Web Page
Sections 1-6
2 Day-to-Day
Administration
Inquiries, Interest List, and
Reporting
Sections 1-6
3 Annual Compliance Doc Management (Including
Public Recordings), Homeowner
Certifications, Renter
Certifications, etc.

Section 12
4 Loan Administration Database, Loan Level Data,
Annual Monitoring, Doc
Management (including Public
Recordings)
Sections 1, 5, 8, 11 and 12
5 Sales and Resales Marketing, Calculations, Eligibility Screening
Section 11
6 Program Updates Updating Program Guidelines,
Materials, etc.

Section 14
Onboarding
As described in the Project Cost Breakdown, HouseKeys would focus the onboarding effort on two key action items: 1) Completing a full round of compliance certifications for homeowners and 2) Setting up Property Owner/Management Firms for annual compliance and completing a round of tenant certifications.

Service Breakdown

1. Public Interface. Administrator will serve as the public-facing entity on behalf of the Programs included in the contract scope. This includes taking initial inquiries, providing information to third parties and any reporting requirements. This will include processing servicing tickets as Applicants transition from buyers and renters to Participants in the role of homeowner, borrower, and existing tenant.

2. Documentation. Administrator will administer the program and assure Affordability Deed Restrictions are recorded and followed by all parties as applicable for each property.

3. Support and Education. Administrator will provide offsite support for service requests.

HouseKeys RFP Response Page 5
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Orientations and workshops will be held for residents of the Agency. Note: In Response to COVID-19 restrictions, content is streamed online via webinars and pre-recorded content available on HouseKeys-hosted program websites. a. Administrator shall conduct introductory Home Buyer, Renter Education/Training classes – Homebuyer/Renter Orientation Classes prior to Program application. A minimum of 6 events will be held each year and at least 40 Weekly Live Online Webinars are held where staff answers Frequently Asked Questions (FAQs) from program applicants and participants.

4. Guidelines and Materials. Administrator will regularly update program guidelines and program materials in conjunction with Agency staff to reflect the Administrator’s administrative process for Program Administration including, but not limited to:
applications, program pamphlets, rent & resale calculations, selection processes, vacancies, sale and resale of units, refinancing requests, collection of Agency fees and other applicable fees, and default monitoring/resolution process.

5. Program Calculations. Administrator will provide materials and calculators for Initial Purchase Price of For-Sale Units, Maximum Restricted Resale Price, Equity Share Calculations, Initial and Subsequent Rent Schedules, including Utility Allowance Calculations. All For-Sale Schedules will include assumptions for down payment, interest rate (typically 10-Year Average of Freddie Mac National Rate), maintenance (if applicable), Homeowner Association Dues, and any additional assumptions requested.

For loan portfolios, this includes payoffs, loan interest, penalties, escrow accounts, and year-end reconciliations.

6. Website Presence. Administrator will maintain an affordability program website presence that will link to the Agency’s housing website.

7. Performance Measures. Administrator and the Agency will agree to mutually acceptable performance measures for program administration. These measures shall be included in the quarterly program summary report.
a. General Inquiries: Respond within 48 business hours
b. Loan Requests: Respond within 48 business hours, Complete requests within reasonable time, with weekly status updates for outstanding requests c. Rental Vacancies: Fill vacancies within 60 days
d. Annual Ownership Monitoring: 1 Certification Per Year e. Annual Rental Monitoring: 1 Project Certification per Project and 1 Tenant Certification Per Unit
f. Eligibility List: Maintain a minimum buyer-to-property and renter-to-unit ratio of 5:1
g. Application ID issuance: Available online year-round 24/7 with troubleshooting issues handled within 2 business days. Manual Application ID issuance will also take up to 2 business days.

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8. Recordkeeping. Administrator shall maintain the Agency’s existing records and files through a proprietary database-driven information retention and management system for the programs. All electronic records will be considered work products that are property of the Agency and will be available via data export. The database shall contain all important details for each Program, Ownership Unit, Rental Unit, and Financing Unit.

9. Reporting. Administrator shall provide a quarterly program summary report to the Agency with the following information. An abbreviated monthly report will accommodate each monthly invoice.

10. Services. Administrator will provide the following services:
a. Making minor revisions to the Agency’s existing program materials and legal documents.
b. Overall management and implementation of specific program policies, including required reporting.
c. Conducting income qualifications including review of assets, income, Verifications of Employment, and all other necessary approvals to ensure qualification for the Agency Programs (Ownership, Rental, Finance). d. Underwriting program applications in accordance with program requirements. e. Underwriting program compliance in accordance to restrictive covenants and project-specific program agreements
f. Underwriting transaction compliance (e.g. refinances, transfers) to ensure they conform with restricted covenants and project-specific program agreements g. Preparing all program documents, overseeing proper execution thereof, and conducting final program approval reviews.
h. Ensuring timely delivery of all necessary documents into escrow, and preparing escrow demands and funding requests.
i. Preparation of program materials by revising the Agency’s current documents. j. Calculating all pay off demands and issuing any disclosures and tax forms as required by State and/or Federal Law.
k. Calculating the resale value of all ownership program homes as requested annually by the County.
l. Work with Agency staff to ensure a seamless and coordinated development of documents as it relates to the Affordability Program, including the Developer application process where Restricted Affordability Units are included, reviewing developer agreements, and ensuring that affordability requirements are outlined in an Affordable Housing Agreement or equivalent document, and any subsequent amendments to the development documentation.

Note 1: HouseKeys recommends that Agency Agencies include affordability requirements, the Administrators roles, and any fees related to affordable unit commitments in the conditions of approval to assure transparency at the earliest possible point in the entitlement process. See Fee Schedule.

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11. Transaction Coordination. Administrator shall act as transaction coordinator for all real estate transactions and will provide the Agency with a Fee Schedule. Where there is a conflict between the Administrator’s Fee Schedule and recorded Agreements (“Legacy Agreements”), Administrator will adjust fees to compensate for the difference with the understanding that newly drafted agreements will conform to the fee schedule.

Note 2: Transaction Fees charged for New Construction Sales are considered a single transaction with a partial “side” of the real estate transaction to represent the buyer pool. Administrator currently has builder-direct contracts that require the Developer to pay 3% of the Sales Price. The goal is to continue this type of arrangement as Administrator unless the Municipality objects to this approach.

During the resale of an ownership unit, there are two sides of the transaction – one for the first-time home seller and two for the eventual buyer who completes the selection process. The customary real estate fee of 6% of charged – with 3% charged for listing and 3% charged for selling to a buyer. This two-sided transaction has a higher cost as reflected on the fee schedule. As both a licensed Real Estate Broker and Program Administrator, Administrator is taking on duties that go beyond that of a typical real estate agent. The 6% fee accounts not only for the work involved (eligibility, legal timelines, property condition), but also accounts for the legal liability and risk. The Administrator uses the 6% fee to control the transaction and then offers the Homeowner the opportunity to hire an agent of their choosing for 2% in order to represent their interests as they navigate the home-selling process including the max restricted price, marketing requirements, capital improvement credit process, and any deferred maintenance charges or repairs.

Note 3: Transaction fees charged to homeowners for refinance transactions are charged for the time taken to ensure that proposed transaction complies with restrictive covenants. This can include a refinance with a mortgage lender or other types of transfers as referenced in the recorded document (E.g. Divorce, Estates, Inheritance, etc.)
a. Administrator will coordinate document transmittals between buyers, renters, borrowers, homeowners, tenants, developers, and Agency as needed.

Administrator will be responsible for ensuring all documents submitted for Agency signatures are complete and accurate. Administrator will be responsible for making any necessary corrections to documents.

12. Monitoring, Compliance, and Loss Mitigation. Administrator shall work alongside Staff to conduct monitoring to annually evaluate Program Owners’ & Renters’ (“Counterparty’s”) compliance with the terms and conditions of the recorded deed restrictions and program guidelines including the following:

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a. Mailing monitoring letters to all the Program units. b. Reviewing in conjunction with Agency staff, Agency or County Assessor data to assist in the process (e.g., water utility bills, property records). c. Review Agency’s preliminary monitoring list to identify follow up actions required. d. Meet with Agency staff to develop guidelines for acceptable default remedies (e.g., allowing rental of Program Units for hardship cases). e. Administrator shall work alongside Staff to investigate and identify cure potential program-related defaults including:
i. Conduct follow up of those Program Owners, Project Owners, and Management Companies (collectively referred to as “Counterparties”) who do not submit their compliance documentation.
ii. Reviewing information on calls from Program Unit neighbors and interested parties.
iii. Conduct reasonable follow-up investigation to assess potential defaults including unit site visits.
iv. Scheduled appointments with Counterparties to discuss compliance issues.
f. For confirmed defaults, provide Counterparties with list of actions needed to remedy the default and conduct follow-up to monitoring compliance. i. Maintaining log of actions taken to remedy the defaults. g. For those defaults in which the Counterparties choose not to remedy the situation within a reasonable amount of time, Administrator will meet with Agency staff to determine the course of action to pursue. Agency authorization will be sought for any legal action taken.
h. Administrator will participate in legal deliberations at all Staff Levels and Council Decisionmakers as needed.
i. Agency will provide a list of any current program participant defaults and actions taken to date.

13. Marketing. HouseKeys continually grows its applicant pool through a series of outreach efforts. This includes targeting the least likely to apply and working in compliance with federal laws addressing Affirmative Fair Housing Marketing. a. All Materials will include proper fair housing logo and other federal and statemandated disclosures b. Initial Campaign to Introduce HouseKeys to key employers, community organizations, religious organizations, trade associations, and small businesses c. Mailers and other collateral that go out within a .25 to .5-mile radius of each Opportunity listing featured in the HouseKeys Proprietary Software Platform d. Local workshops targeting the groups above.
e. Participating in local events as public health restrictions (e.g. COVID-19) allow f. Online and Social Media Campaigns to share available opportunities locally g. Listings on popular websites and real estate aggregators (E.g. Craigslist, Local HouseKeys RFP Response Page 9
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MLS, etc.)
h. When appropriate and when the budget allows, Administrator will advertise in local media (radio, print, etc.)

14. Additional Service Descriptions. Administrator will provide the following additional services.
a. Administrator shall build and maintain a group of qualified and eligible Program homebuyers and renters at a minimum Buyer/Renter-to-Property ratio of 5:1. For Agencies that maintain an accruing Waitlist based on registration timestamp, HouseKeys will assign Application ID using the Timestamp and assign a “Legacy Applicant” Preference Assignment.
b. Administrator will partner with the Agency to create Program legal templates for documents required for signature by the Program participants. Administrator shall supply documents that are typically used in the Applicable County for residential real estate transactions (e.g. purchase and sale, disclosure acknowledgements, addendums, etc.)
c. Administrator will maintain a list of approved loan officers and lending operations eligible to provide mortgage lending for purchase and refinance transactions d. Administrator will maintain a list of approved real estate agents and brokers eligible to provide listing services to sellers for resale transactions e. Administrator will maintain a list of appraisers for fair market valuations f. Administrator will maintain a list of escrow officers who are familiar with program requirements and transaction compliance
g. Administrator will review individual program restrictions for terms and requirements as needed including shared equity programs, down payment assistance loans and any resale restriction agreements. h. Administrator will prepare Agency staff reports and hold Council Study and Closed Sessions to discuss complicated and sensitive program matters. i. Administrator will enter contract with the Agency with the intention of adding the Agency to the Model City Project that incorporates Industry Best Practices, A Program Database, and a Regional Program Working Group. This Project will improve efficiencies and reduce program costs to the Agency. j. Administrator will provide training, analysis, and suggested improvements to the Affordability Program.

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k. Administrator will prepare a presentation for Staff and Council Members on the Model City Project.
l. Special Projects. There will be cases where Administrator will be asked to complete a Project that is outside of the contract scope. If project scope and terms are defined in writing, Administrator will agree to complete project at a specified billing rate.

HouseKeys Staffs its departments in the following Organization Structure.

Program
Manager
Program
Operations
Underwriting &
Compliance
Asset
Management
Software
Engineering Communications
Assistant
Program
Manager
Julius
Nyanda
Mandy
Israde
Angelica
Garcia
Kathie
Wells
Kamala
Loving
Christina
Enriquez
Katarina
Marusic
Kimberly
Ash
Consultant
Bobby
Gasper
Kunal
Bohra
Nathan
Hermens
Frank
Adams
Consultant
Teresa
Martinez TBD
Anna
Reynoso
Abraham
Valle
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5 Additional Information
Provide general suggestions regarding the City’s Below Market Rate Program or the requested scope of services.

Administrator Suggestions

1. During the Initial Sale, Price Units and Take a Fee for Maintenance and Administration
Using Estimates of the Maximum Affordable Sales Price for the San Luis Obispo Program, we came up with the following assessment.
2 Bedroom 3 Bedroom 4 Bedroom
Very Low $110,031 $127,960 $142,563
Low $174,909 $200,269 $220,453
Moderate $364,676 $411,169 $448,173
Based on the math used to generate the pricing chart above, a $50 Maintenance and Administration allowance to the monthly payment would be worth $10,562 per unit. 10 New Construction Units being built and sold would generate $105,620 – which would be enough to cover the annual program costs.

2. Taking a portion of the Excess Proceeds during Resale of an Inclusionary ForSale Unit A percentage of units will sell between 7 and 15 years after the initial purchase. Each time a home is sold, there is a cost associated with the resale. A portion of those costs is borne by the homeowner who is selling. There is also a need to make repairs. These costs make a resale a bit more complicated because there are maximum sale proceeds due to the Owner upon sale and remaining Excess Proceeds that belong to the City/Program/Unit. There is an opportunity, with each resale, to capture a portion of the Excess Proceeds by increasing the final sales price to the new buyer.

Maximum Restricted
Price Owner can sell
Fair Market Value Repairs needed to
get home in sellable
condition
Resale Price to the
new buyer
$200,000 $300,000 $15,000 $215,000 and $0
to Program Fund
$230,000 and
$15,000 to
Program Fund
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6 Key Staff Members
Administrator’s Key Staff
Position Name Department Email
Manager Julius Nyanda Management [email protected]
Accounting & HR Kimberly Ash Management [email protected] Director,
Government
Relations
Teresa Martinez
[Starts 7/1]
Administration [email protected]
Director, Program
Operations
Anna Reynoso Administration [email protected]
Assistant
Manager,
Customer
Experience
Abraham Valle Administration [email protected]
Program
Operations
Manager
Mandy Israde Administration [email protected]
Program
Operations
Coordinator
Kamala Loving Administration [email protected]
Underwriter &
Compliance
Manager
Kathie Wells Administration [email protected]
Asset Manager Christina
Enriquez
Administration [email protected]
Senior Program
Officer
Martin Vergara Administration [email protected]
Analyst Angelica Garcia Administration [email protected] HouseKeys RFP Response Page 13
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6a. Julius Nyanda (415) 846-8004
[email protected]

EXPERIENCE

HOUSEKEYS INC, MORGAN HILL, CA
Founder, CEO & Program Manager, 2015 - Present
• Part of the Founding Team and hired the Founding Team Members to create a new Program Administration Focused Consulting & Technology Company
• Set Strategic Direction of the Company
• Manage the Program Administration Team
• Manage the Technology Team
• Manage the Legal Strategy Team
NEIGHBORHOOD HOUSING SERVICES SILICON VALLEY (A NeighborWorks Chartered Member), SAN JOSE, CA Chief Business Officer, 2012 - 2015
• Supervised a 22-Person Multi-Disciplinary Housing Team • Managed the Lending Department that was a designated Community Development Financial Institution (CDFI) and Fannie Mae Approved Seller & Servicer of First Mortgage Loans • Managed the Loan Portfolio of Subordinate Loan Programs funded by Federal, State, and Local Government sources
• Managed HUD Approved Counseling Agency Department
• Helped formalize and manage the Affordable Housing Program Administration Department whose client list included the cities of Morgan Hill, Los Gatos, Los Altos, Santa Clara, Union City, and Burlingame • Managed the Real Estate Brokerage and Property Acquisition Department whose activities included purchasing market-rate housing and repurposing as affordable housing opportunities

GUILD MORTGAGE COMPANY, MORGAN HILL, CA
Senior Mortgage Consultant, 2009 - 2012
• Specialized in working with First-Time Homebuyers
• Worked with local governments to help allocate and package affordable lending programs • Assisted local governments and nonprofits with setting up affordable homeownership projects • Hosted first-time homebuyer workshops
• Participated as a lending expert for other affordable homeownership workshops • Originated mortgages on 1-4 family residences that included FHA, Fannie Mae, and Freddie Mac Loan Products • Originated subordinate mortgage loans including County Programs, California Housing Finance Agency Loans, and Federal Home Loan Banks
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HOMEOWNER RESCUE ALLANCE, SAN JOSE, CA
Executive Director, 2007-2009
• Oversaw the development of a web-based software platform to connect at-risk homeowners with mortgage servicers
• State and Local Government Contract Services to provide foreclosure workshops and assistance • Worked with mortgage loan servicers to determine workout plans for borrowers • Held Secondary Market and Cross-Functional Workshops with Mortgage Investors, Servicers, and Regulators to determine a path forward on mortgage-backed investments • Testified at State Legislature on the Foreclosure Crisis • Served on local thought-leadership panels
• Client List included Operation HOPE, Indymac Bank, City of Hollister, City of Salinas, City of Watsonville, all in partnership with Assembly Member Anna Caballero of 28th Assembly District

EDUCATION/TRAINING/SKILLS
• Started in Financial Services Industry in 1998
• Started in Mortgage Lending Industry in 2000
• Started Managing Software Development Projects in 2005 • Education – San Diego State University – Information & Decision Systems • Education – University of San Francisco – Degree in Business/Managerial Economics • 1998 - Series 6, Series 63 Securities License, Life & Health Insurance Certification and State License • 2004 - California Department of Real Estate Sales License • 2006 - Financial Planning Certificate – Kaplan Financial • 2006 - Accredited Mortgage Professional – Mortgage Bankers Association of America • NeighborWorks Training Institute Certifications 2012-2016:
 Lending Basics for Homeownership Counselors
 Compliance with State and Federal Regulations
 Community Development: Past, Present & Future
 Using the HOME Program
 Using the National Housing Trust Fund
 Single Family Development: New Construction, From Foundation to Sale  Using the CDBG Program
 Project Management for Construction and Rehab
 Fundamentals of Micro and Small Business Underwriting  The Basic Steps of the Affordable Housing Development Process  Using New Markets Tax Credits
 Financing Community Economic Development
 Navigating Mortgage Practices: Terms & Disclosure Forms  Homeownership Counseling Certification for Program Managers and Executive Directors  Making Home Affordable: A Breakdown of Program Components  Financial Coaching: Helping Clients Reach Their Goals  Delivering Effective Financial Education for Today’s Consumer HouseKeys RFP Response Page 15
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Anna Elizabeth Reynoso (408) 684-8712
[email protected]

EXPERIENCE

HOUSEKEYS INC, MORGAN HILL, CA
Director, Program Administration Operations, 2021 – Present • Member of the Executive Leadership Team Leading Program Administration Operations • Primary contact for Program Administration Inquiries, working alongside the Government Relations and Builder Relations Team
• Lead Program Administration Teams on Weekly Objectives and Projects • Design and Implement Program and Program Operations Modifications to Improve Performance and Efficacy
NEIGHBORWORKS AMERICA, WASHINGTON, DC (Congressionally Chartered Nonprofit + National Network) Director, NeighborhoodLIFT Program (Wells Fargo | NeighborWorks America), 2019-2021 • Led weekly staff meetings to ensure cross team planning andcollaboration. • Created plans for the evolving program and its staffing needs. • Worked in and with the following markets: Sacramento, Omaha, Baltimore, Alaska, Dallas, New Jersey, Montana, Pittsburg, Portland, Minneapolis, San Francisco Bay Area, Philadelphia, Austin, Jacksonville, El Paso, Birmingham, Idaho, New York, South Dakota, Atlanta, New Mexico, Boston, Kansas City, Chicago, Mississippi, Charlotte, Los Angeles, Orlando, Washington D.C., and Houston. (Total capital- $145,027,800 total loans-9,546)
• In 2020, worked on a redesign of the LIFT program to make it a more consumer-centric model. Two pilot markets were launched under this new model: Minneapolis St. Paul ($7 million) and the six county Bay Area ($9.5 million) both markets on target to create 787 homeowners. • With enhancements from the redesign, markets in Minnesota and California were able to increase access to homebuyers by over 15%
NEIGHBORWORKS ORANGE COUNTY, ORANGE, CA (NeighborWorks-Chartered Member) VP, Community Impact, 2016-2019
• Member of Executive Leadership Team reporting to CEO
• Project Lead for organization participation in the National Sustainable Business Initiative, where the cohort consisted of 35 organizations from across the nation to implement and execute principles, framework and production designed to move organizations from non-profit model to social enterprise model.

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• Work with organizations in the SBI cohort from Arizona, Washington D.C., Massachusetts, Boston, Utah, Alaska, Texas, Wisconsin, California, Oregon, Nevada, Minnesota, Illinois, Florida, Tennessee, South Carolina to name a few.
• Build program strategy, infrastructure and systems that would support geographic expansion into six new counties and provide services remote. This includes staff capacity building and technology.

THE UNITY COUNCIL, OAKLAND, CA (NeighborWorks-Chartered Member) Interim Homeownership Center Director, 2013-2015
• Reported to the Executive Vice President and COO and working closely with staff across the organization to integrate homeownership and financial capability programs in other departments.

Oversee educational and counseling services in the areas of: pre and post purchase, foreclosure prevention, credit, and financial capability. Also lead all fundraising efforts to ensure program is fully funded. Annual program budget of 1 million out of organizations 20 million budget. • Project Lead for organization’s participation in the National Sustainable Business Initiative • Program development and implementation for various government and privately funded homebuyer assistance programs
• Served as Development Management from June 2014 to October 2014 • Served as Business Development / Grants Administrator June 2013 to June 2014 NEIGHBORHOOD HOUSING SERVICES SILICON VALLEY, SAN JOSE, CA (NeighborWorks-Chartered Member) Development Director, 2009-2013
• Collaborated with Homeownership Center Director and senior staff to establish priorities and strategies, efforts for capital campaigns and major donors, with a focus on proactively securing operational grants.
• Assist in formulation and implementation of public relations plan. • Served as Homeownership Center Program Manager from April 2009 to 2011 • Oversee operations of the Homeownership Center, including the HUD-Approved Counseling Agency, providing Group Education for first-time homebuyers and foreclosure prevention counseling and loan modification assistance for homeowners.

EDUCATION/TRAINING
• Bi-lingual Spanish
• University of California Santa Cruz – 2008
• Deanza College – 2006
• NeighborWorks America Certifications
• HUD-Approved Counseling Certifications
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Mandy Israde (408) 684-8830
[email protected]

EXPERIENCE

HOUSEKEYS INC, MORGAN HILL, CA
Program Operations Manager, 2015 - Present
• Founding Team Member of HouseKeys, a specialized program administration services and technology company • Helped with the onboarding and transition for municipal clients in the aftermath of the NHS Silicon Valley wind down, including Morgan Hill, Los Gatos, Los Altos, and Santa Clara • Led the development of policies and procedures to formalization of program administration infrastructure for HouseKeys Clients
• Helped to redesign program materials and work on the program standardization initiative at HouseKeys • Worked with the technology team to develop the product releases for the key areas of administration streamlined and automated in the MyHouseKeys 1.0 Platform • Designed Program Workflows for homeownership, rental, and finance programs • Oversee the implementation of workflows into software requirements delivered to the technology team for modeling and coding
• Working with the technology team to test and debug software • Coordinate user experience interviews and demonstrations for the company’s software platform to ensure users understand how to utilize the system
• Oversee implementation of software driven workflows initiated by internal administration staff, municipal agencies, and property managers
• Coordinate with property management companies on rental projects, both during the new construction phase and during the compliance phase, to complete tenant eligibility reviews • Team and Clients Trainings and Workshops
• Manage Operations Team Objectives and Evaluate Workflow Efficiencies

NEIGHBORHOOD HOUSING SERVICES SILICON VALLEY, SAN JOSE, CA Affordable Housing Program Processor, 2012 - 2015
• Helped create the policies and procedures to formalize program administration in the cities of Morgan Hill, Los Gatos, Los Altos, Santa Clara, and Burlingame
• Process and underwrite loan application packets for down payment assistance • Screen and pre-qualify applicants according to eligible household guidelines as defined by local policies • Report to Local Government Staff Members
• Manage applicant pipeline for affordable homeownership, affordable rental, and down payment/closing cost assistance programs
• Working with the team to design Program Materials including forms, manuals, and workflow documents HouseKeys RFP Response Page 18
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SOUTH COUNTY HOUSING CORPORATION, GILROY, CA
Loan Packager II/Group Worker, 2000-2012
• Screen and pre-qualify applicants under applicable Federal and State rules and regulations (Review and evaluate loan application for program eligibility: calculate income vs. debt ratio, credit criteria, compute amount of assistance needed).
• Process and underwrite loan application packets for down payment assistance programs. • Assist in development of marketing and recruitment plan, including all mass mails and community outreach. • Responsible for the maintenance, accuracy, completeness, confidentiality of all clients’ escrow files, databases and records.
• Draw loan documents for SCH down payment programs (Promissory Notes and Deeds of Trusts) • Loan signing appointments
• Translate and coordinate meetings; prepare hand-outs and orientation materials. • Work with community-based organizations, developers, and public entities targeting low income communities to develop and achieve affordable housing and provide community services.

EDUCATION/TRAINING
• Bi-lingual Spanish
• New Construction of 100% Affordable Housing Projects
• Mobile Home Park Conversions and Sales
• New Construction of Inclusionary Housing Projects (including Redevelopment Agencies) • Federal Finance Program Guidelines (CDBG, HOME)
• State Finance Program Guidelines (BEGIN, CalHOME)
• Fair Housing
• USDA training
• SAFE Act
• Passed Federal and State Exams for Loan Origination
• State of California appointed Notary Public. Member of the National Notary Association HouseKeys RFP Response Page 19
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