Agenda packet — Santa Barbara City Council, September 19, 2023

CITY OF SANTA BARBARA

CITY COUNCIL
Randy Rowse
Mayor
Rebecca Bjork
City Administrator
Alejandra Gutierrez
Mayor Pro Tempore
Oscar Gutierrez
Ordinance Committee Chair
Sarah J. Knecht
City Attorney
Eric Friedman
Finance Committee Chair
Meagan Harmon
Mike Jordan
Kristen W. Sneddon
City Hall
735 Anacapa Street
http://www.SantaBarbaraCA.gov
SEPTEMBER 19, 2023, 2:00 PM
AGENDA
IN-PERSON PUBLIC COMMENT: At the beginning of each meeting of the City Council, Finance Committee, or Ordinance Committee, any member of the public may address the City Council concerning any item not on the Council's agenda. Any person wishing to make such address should first complete and deliver a "Request to Speak" form prior to the time that public comment is taken up by the City Council. Each speaker will be given a total of 3 minutes to address the Council. Pooling of time is not allowed during general public comment. The time allotted for general public comment at the beginning of the 2:00 p.m. session is 30 minutes.

Any member of the public who did not speak during the 2:00 p.m. session but who submitted a request to do so during the 2:00 p.m. 30 minute session may do so at the end of the meeting when the additional “Public Comment (If Necessary)” is announced. The City Council, upon majority vote, may decline to hear a speaker on the grounds that the subject matter is beyond their jurisdiction.

REMOTE PUBLIC COMMENT: Members of the public wishing to speak must “raise their hand” in the Zoom platform by selecting the virtual hand icon when their item is called. The keyboard shortcut for this is Alt+Y for Windows and Option+Y for Macs. City staff will activate the speaker’s microphone when the speaker’s name is called. The speaker will then need to unmute themselves. The keyboard shortcut for this is Alt+M for Windows or Command-Shift-A for Macs.

HOW TO REMOTELY OBSERVE AND/OR SPEAK LIVE AT A MEETING
• Web: https://santabarbaraca-gov.zoom.us/webinar/register/WN_6qBzhd1OQ_iNFgvfSw-R0Q (Participation via Zoom)
• Telephone: Dial 1-669-900-6833, Enter Webinar ID: 859 7587 0615 (press *9 to raise/lower hand; press *6 to mute/unmute) • Online Streaming: Council meetings are streamed live at www.SantaBarbaraCA.gov/CAP • TV: Each regular City Council meeting is broadcast live in English and Spanish on City TV Channel 18 and rebroadcast in English on Wednesdays and Thursdays at 7:00 p.m. and Saturdays at 8:00 a.m., and in Spanish on Sundays at 3:00 p.m.

Each televised Council meeting is closed captioned for the hearing impaired. Check the City TV program guide at www.santabarbaraca.gov/citytv for rebroadcasts of Finance and Ordinance Committee meetings.

WRITTEN PUBLIC COMMENT: Public comments may also be submitted via email to [email protected] prior to the beginning of the Council Meeting. All public comments submitted via email will be provided to City Council and will become part of the public record.

ORDER OF BUSINESS: Regular meetings of the Finance Committee and the Ordinance Committee begin at 12:00 p.m. The regular City Council meeting begins at 2:00 p.m. in the Council Chambers at City Hall. (CONTINUED ON NEXT PAGE)
REPORTS: Copies of the reports relating to agenda items are available for review at http://www.SantaBarbaraCA.gov/CAP.In accordance with state law requirements, this agenda generally contains only a brief general description of each item of business to be transacted or discussed at the meeting. Should you wish more detailed information regarding any particular agenda item, you are encouraged to obtain a copy of the Council Agenda Report (a "CAR") online at the City's website (http://www.SantaBarbaraCA.gov/CAP). Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are posted to the City’s website as soon as reasonably feasible.

CONSENT CALENDAR: The Consent Calendar is comprised of items that will not usually require discussion by the City Council. A Consent Calendar item is open for discussion by the City Council upon request of a Councilmember, City staff, or member of the public. Items on the Consent Calendar may be approved by a single motion. Should you wish to comment on an item listed on the Consent Agenda, after turning in your "Request to Speak" form, you should come forward to speak or raise your hand in Zoom at the time the Council considers the Consent Calendar.

SPANISH INTERPRETATION: If you need interpretation of your communications to Council from Spanish into English, please contact the City Clerk’s Office at 564-5309 or by email at [email protected]. If possible, notification of at least 48 hours will usually enable the City to make arrangements.

INTERPRETACIÓN EN ESPAÑOL: Si necesita una interpretación del español al inglés, para sus comunicaciones al Consejo, comuníquese con la Oficina del Secretario Municipal al 564-5309, o por correo electrónico a [email protected]. Si es posible, la notificación de al menos 48 horas generalmente permitirá a la Ciudad hacer los arreglos.

AMERICANS WITH DISABILITIES ACT: If you need auxiliary aids or services or staff assistance to attend or participate in this meeting, please contact the City Administrator's Office at 564-5305 or by email at [email protected]. If possible, notification at least 48 hours prior to the meeting will usually enable the City to make reasonable arrangements. For those who need accessibility accommodation in using the “raise hand” function and/or registering to participate in the Zoom session, please contact the Clerk’s office by 5:00 p.m. the day before the meeting for assistance. Additionally, a speaker may email [email protected] by 5:00 p.m. the day before a meeting, stating which item they wish to speak on. Specialized services, such as sign language interpretation or documents in Braille, may require additional lead time to arrange. 09/19/2023 Santa Barbara City Council Final Agenda Page 1 SEPTEMBER 19, 2023 AGENDA
SPECIAL ORDINANCE COMMITTEE MEETING - 11:30 A.M. IN THE COUNCIL CHAMBER (120.03)

1. Subject: Local Housing Trust Fund (120.03)
Recommendation: That the Ordinance Committee consider establishing a local housing trust fund as described in the attached memorandum, direct staff to agendize for Finance Committee consideration of a dedicated source of funding and matching funds, as required, and return to Ordinance Committee for consideration of an ordinance to establish a local housing trust fund. 09/19/2023 Santa Barbara City Council Final Agenda Page 2 REGULAR CITY COUNCIL MEETING – 2:00 P.M.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

ROLL CALL

CEREMONIAL ITEMS

1. Subject: National Preparedness Month September 2023 (120.04)

CHANGES TO THE AGENDA

CONSENT CALENDAR

2. Subject: Reserve Policy [Ordinance Adoption] (570.03) Recommendation: That Council adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Amending the Santa Barbara Municipal Code by Repealing Chapter 17.40 Pertaining to the Purpose, Accumulation and Use of Funds Within the Harbor Preservation Fund.

3. Subject: Amendment to Section 16.04.120, Local Limitations on Wastewater Strength of Municipal Code Title 16, Liquid and Industrial Waste Disposal [Ordinance Introduction] (540.13)
Recommendation: That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Amending the Santa Barbara Municipal Code by Amending Section 16.04.120 Relating to Local Limitations on Wastewater Strength.
09/19/2023 Santa Barbara City Council Final Agenda Page 3

4. Subject: Grant of Easement to Southern California Gas Company Related to Existing High-Pressure Gas Line on City Property at Sheffield Reservoir and Stanwood Drive [Resolution; Agreement] (330.03)
Recommendation: That Council:

A. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Authorizing the Public Works Director to Execute a Utility Easement to Southern California Gas Company on the City Property Adjacent to Sheffield Reservoir and Stanwood Drive Right of Way; B. Determine that the project is exempt under California Environmental Quality Act Guideline § 15301 (b); and
C. Approve the Grant of Utility Easement to Southern California Gas Company on City Property Adjacent to Sheffield Reservoir and Stanwood Drive Right of Way and direct the filing of a Notice of Exemption in compliance with California Environmental Quality Act Guideline § 15062.

5. Subject: Bequest from the William Stephen Wagner 1988 Inter Vivos Trust to the City of Santa Barbara for Exclusive Use and Benefit of the Library Department [Resolution] (570.04)
Recommendation: That Council:

A. Accept a bequest in the amount of $100,000 from the William Stephen Wagner 1988 Inter Vivos Trust for children’s books;
B. Accept any residual remainder, approximately $3,500,000, from the William Stephen Wagner 1988 Inter Vivos Trust for general Library support and special Library projects; and
C. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Resolution No. 23-076 Adopting the Budget for Fiscal Year 2024, Increasing Revenue and Expenditure Appropriation in Fiscal Year 2024 in the Amount of $100,000 in the Library Miscellaneous Trust Fund.
09/19/2023 Santa Barbara City Council Final Agenda Page 4

6. Subject: Approval to Subordinate the City’s Affordability Covenant on Presidio Park Apartments Located at 420 East De La Guerra Street (640.08) Recommendation: That Council:

A. Approve a request from Belveron Flagship Fund VII REIT Property Owner, L.P., a Delaware limited partnership, to subordinate the City’s affordability covenant as necessary for acquisition of the property located at 420 East De La Guerra Street;
B. Authorize acceptance of City loan payoff in the approximate amount of $10.8 million secured by the property to be credited to the City’s Affordable Housing Fund as a condition to the escrow closing; and
C. Authorize the Community Development Director to execute such agreements, subject to approval as to form by the City Attorney, as necessary.

7. Subject: Authorization to Purchase Recycled Water Membrane Modules for the El Estero Water Resource Center (540.13)
Recommendation: That Council finds it in the City of Santa Barbara’s best interest to waive the formal bidding process as authorized by Municipal Code 4.52.070(L) and authorize the General Services Manager to issue a Purchase Order to Filmtec Corp, a subsidiary corporation of Dupont, in the amount of $356,895 for the purchase of 150 Dupont IntegraTec™ XP 77 UltraFiltration Membrane Modules for use at the El Estero Water Resource Center; and approve expenditures to cover contract change orders for any additional taxes or shipping-related expenses.

REPORT FROM THE ORDINANCE COMMITTEE

PUBLIC COMMENT

PULLED CONSENT ITEMS

COUNCILMEMBER COMMITTEE ASSIGNMENT REPORTS
09/19/2023 Santa Barbara City Council Final Agenda Page 5

CITY COUNCIL ADMINISTRATIVE AND ATTORNEY REPORTS

CITY ADMINISTRATOR

8. Subject: Paseo Nuevo Redevelopment Options
Recommendation: That Council:

A. Hear a presentation and provide input on public benefit preferences to inform staff negotiations with AB Commercial Real Estate Debt Fund (“AB Commercial”); and
B. Authorize staff to negotiate the terms of a project agreement with AB Commercial and return to Council for approval of the agreement.

COUNCIL AND STAFF COMMUNICATIONS

COUNCILMEMBER ENGAGEMENTS

PUBLIC COMMENT (IF NECESSARY)

ADJOURNMENT

CITY OF SANTA BARBARA

SPECIAL ORDINANCE COMMITTEE

MEETING

MEETING AGENDA
DATE: September 19, 2023 Oscar Gutierrez, Chair
TIME: 11:30 a.m. Mike Jordan
PLACE: Council Chambers Kristen W. Sneddon
Office of the City Office of the City
Administrator Attorney
Nicole Grisanti Sarah J. Knecht
Supervisor, City Administrator’s Office City Attorney
IN-PERSON PUBLIC COMMENT: Any person wishing to address the Ordinance Committee should first complete and deliver a "Request to Speak" form prior to the time that public comment is taken up by the Committee Member. Each speaker will be given a total of 3 minutes to address the Committee. The Ordinance Committee, upon majority vote, may decline to hear a speaker on the grounds that the subject matter is beyond their jurisdiction.

WRITTEN PUBLIC COMMENT: Public comments may also be submitted via email to [email protected] prior to the beginning of the Ordinance Committee Meeting. All public comments submitted via email will be provided to the Ordinance Committee and will become part of the public record.

REPORTS: Copies of the reports relating to agenda items are available for review at http://www.SantaBarbaraCA.gov/CAP.In accordance with state law requirements, this agenda generally contains only a brief general description of each item of business to be transacted or discussed at the meeting. Should you wish more detailed information regarding any particular agenda item, you are encouraged to obtain a copy of the Council Agenda Report (a "CAR") online at the City's website (http://www.SantaBarbaraCA.gov/CAP). Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are posted to the City’s website as soon as reasonably feasible.

AMERICANS WITH DISABILITIES ACT: If you need auxiliary aids or services or staff assistance to attend or participate in this meeting, please contact the City Administrator's Office at 564-5305 or by email at [email protected] if possible, notification at least 48 hours prior to the meeting will usually enable the City to make reasonable arrangements. For those who need accessibility accommodation in using the “raise hand” function and/or registering to participate in the Zoom session, please contact the Clerk’s office by 5:00 p.m. the day before the meeting for assistance. Additionally, a speaker may email [email protected] by 5:00 p.m. the day before a meeting, stating which item they wish to speak on. Specialized services, such as sign language interpretation or documents in Braille, may require additional lead time to arrange.

Please click the link below to join the webinar:
https://santabarbaraca-gov.zoom.us/j/89649446064?pwd=R0JaTXdtZHBhVngvUjRRWC9ldGF3UT09 Passcode: 341049
Webinar ID: 896 4944 6064
Or One tap mobile :
+16694449171,,89649446064# US
File Code No. 120.03
Special Ordinance Committee Agenda
September 19, 2023

Page 2 ends

ITEMS FOR CONSIDERATION
SUBJECT: Local Housing Trust Fund
RECOMMENDATION: That the Ordinance Committee consider establishing a local housing trust fund as described in the attached memorandum, direct staff to agendize for Finance Committee consideration of a dedicated source of funding and matching funds, as required, and return to Ordinance Committee for consideration of an ordinance to establish a local housing trust fund.

CITY OF SANTA BARBARA

ORDINANCE COMMITTEE AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Ordinance Committee
FROM: City Attorney’s Office
SUBJECT: Local Housing Trust Fund
RECOMMENDATION:

That the Ordinance Committee consider establishing a local housing trust fund as described in the attached memorandum, direct staff to agendize for Finance Committee consideration of a dedicated source of funding and matching funds, as required, and return to Ordinance Committee for consideration of an ordinance to establish a local housing trust fund.

DISCUSSION:

The Ordinance Committee met on June 28, 2023, to review a draft ordinance to create The Housing Opportunities, Preservation, and Equity (HOPE) Fund. At that meeting, the Committee asked for further information on the requirements to establish a local housing trust fund (LHTF) that met the parameters to qualify for matching funds through the California Department of Housing and Community Development (HCD). At that time, the City Attorney’s office requested additional time to research the requirements for formation of a local housing trust fund and return to the Committee with that information. The attached memorandum responds to that request.

Key requirements of the local housing trust fund are that a dedicated source of funding provide ongoing revenue for a minimum of five years to support the fund’s operations and that matching funds be available at the time of application on a dollar-for-dollar basis. The matching funds cannot be from a funding source that is otherwise restricted for housing uses by state or federal law such as HOME funds, CDBG, or former redevelopment agency low- and moderate-income housing funds. In-lieu fees, PLHA funds, taxes, and loan repayments are available sources.

An additional requirement is that the city have an adopted Housing Element that meets state law requirements. If the City’s Housing Element is approved by the end of year, and the City proceeds to adopt and fund a LHTF, the City would be eligible to apply for the next round of funding in the Spring of 2024. As a new LHTF, the City would be eligible to participate in the 15% funding set-aside for new local housing trust funds.

Agenda Item No. 1
File Code No. 120.03
Ordinance Committee Report
Local Housing Trust Fund
September 19, 2023

Page 2 ends

If the Committee decides to pursue a LHTF, staff recommend forwarding this matter to Finance Committee for discussion regarding ongoing revenue sources, as well as matching funds, and return to your committee for review and recommendation to City Council for approval of an ordinance to create and fund a LHTF.

ATTACHMENT: City Attorney Memorandum to Ordinance Committee 09/19/23 PREPARED BY: Sarah J. Knecht, City Attorney
SUBMITTED BY: Sarah J. Knecht, City Attorney
APPROVED BY: City Administrator's Office

ATTACHMENT

MEMORANDUM

OFFICE OF THE CITY ATTORNEY
740 State Street|Suite 201|P.O. Box 1990|Santa Barbara|California|93102|T(805) 564-5326|F(805) 564-5426 DATE: September 19, 2023
TO: Ordinance Committee
FROM: Sarah J. Knecht, City Attorney
SUBJECT: Local Housing Trust Fund
As requested by your Committee, the City Attorney’s Office has reviewed the requirements to establish a Local Housing Trust Fund (LHTF) that would qualify for the receipt of matching grant funds from the California Department of Housing and Community Development (HCD).

Local Housing Trust Fund
The Legislature created the Local Housing Trust Fund Matching Grant Program administrated by HCD to support local housing trust funds dedicated to the creation or preservation of affordable housing. Local housing trust funds must be supported on an ongoing basis from private contributions or governmental sources and must have matching funds from sources that are not otherwise restricted in use for housing programs.

Types of LHTFs
A LHTF is a public, joint public and private, or charitable nonprofit organization under Section 501(c)(3) of the Internal Revenue Code, which is established by legislation, ordinance, resolution (including nonprofit articles of incorporation), or a public-private partnership organized to receive specific public, or public and private revenue to address local housing needs. The key characteristic of the LHTF is that it receives “Ongoing Revenues” from “Dedicated Sources” of funding sufficient to permit the LHTF to comply with the requirement of the Program.

LHTFs are either “New” or “Existing.” Because Santa Barbara has not previously received grant funding from HCD, it would be considered a “New Fund.” The City would Ordinance Committee
Local Housing Trust Fund

Page 2 of 4 ends

be obligated to fund and operate the LHTF for at least five years after a Program Fund award date.

Locally, the Housing Trust Fund of Santa Barbara County is a nonprofit organization operating in Santa Barbara County since 2004 and is eligible to receive grant funds from HCD under the Local Housing Trust Fund Program. City staff met with the Housing Trust Fund of Santa Barbara County, who has suggested that the City, instead of creating a new trust, could utilize its Fund to invest City moneys which the Trust would use as matching funds for projects located within the City. (See attached letter.) LHTF Requirements
A LHTF must be created by an ordinance and receive “On-going Revenue” from a “Dedicated Source” of funds for at least five years and matching funds received from sources such as taxes, fees, loan repayments, or public or private contributions not otherwise restricted by state or federal law to affordable housing uses. To receive grant funding, the requirements below must be met for a qualifying project:

A. Funding Requests. Currently, the minimum funding request for a new LHTF is $500,000. The maximum request is $5 million.

B. On-Going Revenue. The LHTF must be supported by On-Going Revenue from any Dedicated Source of funds to support program activities. For a new LHTF, sufficient Dedicated Funds from On-going Revenue must be provided from public or private sources to pay for the LHTF’s operating costs for a minimum of five years after the date of the Program Award. Dedicated Sources cannot include lines of credit or loans.

For Existing LHTFs, this equates to an average of $100,000 per year.

C. Matching Funds. Funding requests must be matched on a dollar-for-dollar basis and used for the same Eligible Project for which Program Funds are used. Matching Funds can come from sources such as taxes, fees, loan repayments, in-lieu fees, or public/private contributions but not from funds restricted for housing by federal or state law, such as HOME Funds, CDBG funds, former redevelopment agency low- and moderate-income housing funds or state housing programs administrated by HCD. PLHA funds, in-lieu fees, one-time sources (like a land donation) or one-time funding allocations are eligible. Matching Funds must be on-deposit or evidenced by a legally binding commitment for deposit at the time of application and on deposit prior to disbursement of Program Funds.

Ordinance Committee
Local Housing Trust Fund

Page 3 of 4 ends

To qualify for a minimum application of $500,000, a New Santa Barbara LHTF would need dollar-for-dollar matching funds of at least $500,000. Matching funds could come from any combination of sources and include one-time donations and the prior funding allocation of $2,883.548 made by Council to a housing trust fund. (See Attachment 2 for examples of funding sources used by other LHTFs.)
In Santa Barbara, potential matching funds could include the following:
(i) In-lieu fees;
(ii) PLHA funds;
(iii) General fund allocation;
(iv) TOT allocation;
(v) land donation; and
(vi) sales tax allocation.

D. Housing Element. The City must have an adopted Housing Element, which at the time of application, has been found to be in compliance with state Housing Element Law.

Annual progress reports must be submitted within the preceding 12 months. The City anticipates adoption of its 6th cycle housing element by the end of 2023. HCD then has up to 60 days to review the adopted Housing Element for compliance with state Housing Element Law. The City submits Annual Progress reports by April 1st each year, as required. If the City did have an approved Housing Element by end of 2023, the City could submit for the Spring 2024 funding cycle and may qualify for the additional set aside funding for new housing trust funds.

Use of LHTF Funds
A. Eligible Uses. Program Funds may be used for construction or permanent financing. Loan terms may not to exceed 3% simple interest per annum. Loans made solely for predevelopment or acquisition are not permitted but maybe include redevelopment and land acquisition costs.

B. Administrative Costs. Administrative expenses up to 5% of Program Funds and up to 5% of Matching Funds.

C. Affordability Restrictions:
(i) 5% administrative costs plus 5% matching funds are deducted off the top of the total funding to determine the affordability restrictions.

Ordinance Committee
Local Housing Trust Fund

Page 4 of 4 ends

(i) At least 30% of balance must be expended on “extremely low” income households (30% AMI).
(ii) No more than 20% of balance shall be expended on moderateincome households whose income does not exceed 120% of AMI. (iii) Remaining balance may be expended on Lower-Income Households 80% of AMI.

Types of Projects
The following types of projects may be funded with LHTF moneys:
(i) Rental units with affordability of all assisted units income and rent restricted for not less than 55 years (no rental assistance);
(ii) Emergency shelter;
(iii) Transitional housing;
(iv) Permanent supportive housing;
(v) For sale homebuyer; and
(vi) ADUs and junior ADUs.

Other Requirements
A. Public hearings required to discuss use of funds.

B. Funds must be encumbered no later than 60 months after receipt.

C. Periodic reporting to HCD required.

SK/lp
Attachments: 1. Letter from Housing Trust Fund of Santa Barbara County 07/19/23

2. Examples of Allowable Dedicated Sources of On-going Revenue used by other LHTFs
Housins Trust IFund m sania Barbara counts
P.O. Box 60909, Santa Barbara, CA 93160-0909 (805) 685-1949 July 19, 2023
Laura Dubbels
Housing and Human Services Manager
City of Santa Barbara
Dear Laura:

Board of Directors:

Sylvia Barnard
Michael Bennett
Sheryl Flores
Roger L. Norton
Antoinette McCauley
Kristen Miller
Cody Sargeant
Rosa Paredes
Luis Villegas
Jessica Wishan
We saw the recent article about the debate going on about the use of the funds that the City of Santa Barbara has set-aside for affordable housing. We understand that there is a discussion on whether the funds should be used exclusively for the production, rehabilitation, and preservation of affordable housing units or for broader range of community housing issues. We understand that there is also some discussion about the City setting up its own housing trust fund where funds could be available for a variety of uses related to housing.

While the Housing Tmst Fund of Santa Barbara County does not have 'irons in the fire' on this debate, we wanted to offer the following perspective, in the hope that it might be useful in helping the City of Santa Barbara come to a decision about use of the set-aside funds for housing.

Our community already has a viable nonprofit Housing Trust Fund that has operated since 2004 and that has an excellent track record of supporting affordable housing production, first-time homeownership and most recently, housing innovations through our innovative 3D printed affordable home project. Please see our website at: wvvw.sbhousingtrysLorg. We would be happy to explore a partnership with the City of Santa Barbara where we might be of service through a combination of managing and/or leveraging City funds to support affordable housing production or other programs the City would like to pursue.

We operate an existing Revolving Loan Fund that has made loans totaling $9.7 million to facilitate the production of 422 units of affordable housing. For example, we recently we provided a permanent financing loan to Heath House and have provided several site acquisition and construction loans to Habitat for Humanity of Southern Santa Barbara County in the past to facilitate their projects. We have also worked with Peoples' Self-Help Housing, Good Samaritan Shelters, and other developers. If the City of Santa Barbara determined that it could invest funds into our Revolving Loan Fund Program, we would be able to target affordable housing projects within the City developed by the Housing Authority and other local nonprofit and private developers, so the funds would be dedicated to affordable housing production.

As a nonprofit agency, we can access resources from the private, public, and nonprofit sectors. For example, we have developed successful partnerships with a total of 12 lenders, foundations, and public agencies to augment our capital resources for both our Revolving Loan Fund and Workforce Homebuyer Program that provide loans to affordable housing projects and down payment assistance to first-time homebuyers. It seems that rather than setting up an entirely new entity, the City might consider the benefits of a partnership with an experienced nonprofit loan fund that has a successful track record of assisting both affordable housing projects and first-time homebuyers. Working with the existing HTF ATTACHMENT 1
might be a beneficial compromise and a way to address diverse affordable and workforce community housing goals and needs.

Moreover, we were to be able to use local match funds such as the City's funds to secure grants from the U.S. Treasury and State HCD (under the Local Housing Trust Fund Program) that can effectively double local dollars. We have secured over $6.5 million in grants from these two sources in the past.

Here is a summary of the advantages we could offer:
. We can access capital from all 3 sectors-private, public, and nonprofit-which is something that the City of Santa Barbara cannot easily do on its own.
. We have developed an existing network of successful partnerships over the years with local and regional lenders, foundations and funders that could be of significant benefit to leveraging the City's funds. We work with 8 banks, 2 foundations. State HCD and the U.S. Treasury CDH Fund. For example, we have secured over $7.2 million in low-cost private investments. . There is a strong probability that we would be able to double the City of Santa Barbara funds by using it as a local match to apply for U.S. Treasury grant funds and the State HCD Programs. . We are able to serve a broad range of the local population with household incomes ranging from 0% to 210% of Area Median Income as a charitable class under our exemption from the IRS. . We are a federally certified Community Development Financial Institution, a HUD certified Secondary Loan Provider and a State Bona Fide Nonprofit Affordable Housing Organization. . We include representatives from affordable housing producers on our Board of Directors and the Board can be expanded to include City of Santa Barbara representatives; . Our Loan Committee is comprised primarily of our lending partners and the City could participate on the committee; and,
. Our structure is flexible and if the City dedicated capital to HTF for use within the City of Santa Barbara, the City would be able outline the potential uses, proposed requirements and even interest rates, much like an endowed fund within a foundation.

If such a partnership is of interest to the City of Santa Barbara, we would welcome the opportunity to discuss this possibility with you.

Best Regards,
(T^t^L^- ^<Ty^<%<^l<^-
Jennifer McGovem
President/CEO
City/County Fund Name Source of Dedicated Funds Amount
San Francisco Housing Trust Fund City appropriation (General Fund?) $20M, increasing annually by $2.8M until 2024
$50.8M in 2024-2025
After 2024-2025, prior year
adjusted by +/- percentage in GF
If revised estimate lower than
original, decrease appropriation by
ordinance
Can reduce annual contribution to
HTF by equal to or less than 56.7%
of annual debt service for SB2113
Bonds
City of Berkeley Housing Trust Fund Federal: HOME Investment Partnerships Program (HOME), Community Development Block Grant (CDBG)
Measure O: $135M
Local: revenue from commercial development mitigation fees, new market rate housing, condominium conversions
City: 2018 Measure O bond measure, GF, Measure U1
City of Santa Monica Citywide Housing Trust Fund DA revenues; in-lieu fees; Affordable Housing Commercial Linkage Fee Program; sale of City-owned property
Local Housing Trust Fund Veterans and Affordable Housing Bond Act of 2018 (Prop 1) $57M City of Pasadena, Glendale, and
Burbank
Burbank, Glendale, Pasadena Regional
Housing Trust
SB 1177 $23M startup
City of Brea Affordable Housing Trust Fund In-lieu fees, equity share payment City of Fresno Local Housing Trust Fund City of Fresno Real Estate Transfer Tax $1.5M (2021) City of Fresno General Fund $1.0M (2021)
(State of California LHTF Grant Program) ($2.5M) (2021) City of Carlsbad Housing Trust Fund Inclusionary housing ordinance fees Revenue from: loan interest, housing credit purchases, housing impact fees, and interest earned on fund balance
FY2021-22
Beginning Balance $14,379,262
Fee Revenue $1,254,167
Interest Revenue $420,403
Loan Payments $18,850
Repayment from Section 8 Admin $94,116
Tyler Ct. Transfer $200,912
Total Increase in Fund Balance $1,988,448
City of Salinas Inclusionary Housing Trust Fund In-lieu fees, rental housing impact fees, monitoring and other fees, promissory note repayments, shared appreciation payments City of Los Angeles Affordable Housing Trust Fund Seed funding (2000) $5M Budgeted (2001) $10.5M
Proposed (2002) $100M
ATTACHMENT 2
City/County Fund Name Source of Dedicated Funds Amount
City of Oakland Affordable Housing Trust Fund jobs/housing impact fees, redevelopment dissolution funds, fines and penalties (foreclosure and default), affordable housing impact fees) City of Santa Cruz Affordable Housing Trust Fund in-lieu fees City of Livermore Housing Trust Fund (aka below) In-lieu fees / commercial linkage fee Affordable Housing Fund low income housing impact fee; varies depending on development intensity and projected low-income employees
$205,000 annually (projected)
City of Hayward Affordable Housing Trust Fund in-lieu fees City of South San Francisco Affordable Housing Trust Fund (Fund 205)
commercial linkage fee
City of Bakersfield Affordable Housing Trust Fund Measure N (Public Safety and Vital Services) (2021) $5M City of Palo Alto Affordable Housing Fund (see right for components)
Commercial Housing Fund: commercial mitigation fees
Residential Housing Fund: in-lieu fees
Below Market Rate Emergency Fund: fund transfer $150,000 from Residential Housing In-Lieu Fund
City of Sacramento Housing Trust Fund Housing trust fund fee (nonresidential development projects); amounts adopted by resolution from fee report calculations City of West Hollywood Affordable Housing Trust Fund In-lieu fees City of San Carlos Fund 29 - Housing In-Lieu Fund commercial linkage fee City of Santa Cruz Affordable Housing Trust Fund in-lieu fees; PLHA; donations Agenda Item No. 1
File Code No. 120.04

1 ORDINANCE NO.___________

AN ORDINANCE OF THE COUNCIL OF THE CITY OF

SANTA BARBARA AMENDING THE SANTA BARBARA
MUNICIPAL CODE BY REPEALING CHAPTER 17.40

PERTAINING TO THE PURPOSE, ACCUMULATION

AND USE OF FUNDS WITHIN THE HARBOR

PRESERVATION FUND

THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

SECTION 1. Title 17 of the Santa Barbara Municipal Code is amended by repealing Chapter 17.40.

Agenda Item No. 2
File Code No. 570.03

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Mayor and Councilmembers
FROM: Water Resources Division, Public Works Department SUBJECT: Amendment to Section 16.04.120, Local Limitations on Wastewater Strength of Municipal Code Title 16, Liquid and Industrial Waste Disposal [Ordinance Introduction]
RECOMMENDATION:

That Council introduce and subsequently adopt, by reading of title only, an Ordinance of the Council of the City of Santa Barbara Amending the Santa Barbara Municipal Code by Amending Section 16.04.120 Relating to Local Limitations on Wastewater Strength.

DISCUSSION:

The City of Santa Barbara’s (City) wastewater system operates under a National Pollution Discharge Elimination System (NPDES) permit issued by the California Regional Water Quality Control Board (RWQCB) which contains Clean Water Act requirements administered by the United States Environmental Protection Agency (EPA). A requirement of the Clean Water Act and the NPDES permit is that the City implement an industrial Pretreatment Program governing the quality and quantity of wastewater discharged to the collection system by industrial dischargers.

Santa Barbara Municipal Code Title 16 (Title 16) provides the standards and the legal authority for enforcement of the required Pretreatment Program. Since the last revision to Title 16, the City has completed a Local Limits evaluation and study. Local Limits are designed to assure a Pretreatment Program will (a) prevent the introduction of pollutants into the Publicly Owned Treatment Works (POTW) which will interfere with their operation, including disposal of residuals; (b) prevent the introduction of pollutants into the POTW which will pass through the treatment works or be otherwise incompatible; and (c) improve opportunities to recycle and reclaim municipal and industrial wastewaters and residuals.

The EPA recommends that a periodic evaluation of local limits be tied to the POTW’s permit cycle and that more detailed evaluations be conducted on an “as needed” basis.

Local Limits are requirements for the Pretreatment Program which need to be incorporated into the City’s municipal code.

RWQCB inspections of local municipalities are conducted periodically to ensure Pretreatment Programs are administered according to federal requirements. In June Agenda Item No. 3
File Code No. 540.13
Council Agenda Report
Amendment to Section 16.04.120, Local Limitations on Wastewater Strength of Municipal Code Title 16, Liquid and Industrial Waste Disposal [Ordinance Introduction] September 19, 2023

Page 2 ends

2014, the City received an inspection, and one requirement was to evaluate and update the Local Limits. The City contracted with Larry Walker Associates to assist in the Local Limits evaluation and the preparation of a sampling plan. The Local Limits evaluation and study was completed in January 2017; however, the City did not implement its draft local limits because of significant upgrades to El Estero Water Resource Center’s secondary process and the acceptance of desalination brine waste from the Charles E. Meyer Desalination Facility. In 2019, El Estero Water Resource Center completed construction of the secondary process improvements. A second local limits evaluation was completed in September 2020 to include the process improvements, and the local limits were updated to reflect the current removal capabilities.

The proposed update to the local limits was approved by Council on November 17, 2020.

The City submitted the local limits update packet to the RWQCB on December 15, 2020.

On July 31, 2023, the City received a final letter of approval for the program updates and the revised local limits. The program updates were incorporated into the Municipal Code, Title 16 in 2020; however, the values for trace metals and cyanide were not revised and need to be updated.

Summary of Required Changes
Title 16 Liquid and Industrial Waste Disposal - Changes are made to Chapter 16.04.120, Local Limitations on Wastewater Strengths.

BUDGET/FINANCIAL INFORMATION:

The proposed action has no financial impact on the City.

ATTACHMENT: RWQCB Substantial Modification Approval Letter PREPARED BY: Joshua Haggmark, P.E., Water Resources Manager/DC/GF/lm SUBMITTED BY: Clifford M. Maurer, P.E., Public Works Director APPROVED BY: City Administrator’s Office
State Water Resources Control Board
7/31/2023
City of Santa Barbara
520 East Yanonali Street
Santa Barbara, CA 93101
ATTN: Mary Thompson
Laboratory Analyst Coordinator
[email protected]
Subject: APPROVAL OF SUBSTANTIAL MODIFICATION TO EXISTING PRETREATMENT PROGRAM – CITY OF SANTA BARBARA
Dear Mary Thompson:

The State Water Resources Control Board (State Board) is pleased to approve your request for substantial modifications to the Pretreatment Program for the City of Santa Barbara. The State Board reviewed the final modifications submitted by the City of Santa Barbara on 12/15/2020 and determined that they meet the requirements under 40 C.F.R. §403.18(f).

The State Board has also determined that the City of Santa Barbara satisfied all public notice procedures required under 40 C.F.R. §403.11 for substantial Pretreatment Program modifications, including publishing a 30-day public comment notice in the notice in Voice Magazine on 7/28/2023. No public comments were received. In accordance with 40 C.F.R. §403.18(c)(4), The State Board is approving the final modification without additional notice.

With this approval, the modified Pretreatment Program shall be an enforceable condition of the National Pollutant Discharge Elimination System (NPDES) Permit Number CA0048143. If you have an questions, please contact me at me at [email protected]
Sincerely,

ATTACHMENT
Mary Thompson - 2 - 7/31/2023
Arnold Wong
Water Resources Control Engineer
Pretreatment and CECs Unit
Cc:

Amelia Whitson, U.S. EPA Region 9, [email protected] Erica Kalve, State Water Board, [email protected] Olivia Magana, State Water Board, [email protected] Arwen Wyatt-Mair, Central Coast Regional Board, [email protected] Peter VonLangen, Central Coast Regional Board, [email protected]

ATTACHMENT
COUNCIL INTRODUCTION DRAFT 9/19/23

SHOWING CHANGES FROM CURRENT CODE
1 ORDINANCE NO._______

AN ORDINANCE OF THE COUNCIL OF THE

CITY OF SANTA BARBARA AMENDING THE

SANTA BARBARA MUNICIPAL CODE BY
AMENDING SECTION 16.04.120 RELATING TO

LOCAL LIMITATIONS ON WASTEWATER

STRENGTH

THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

SECTION 1: Section 16.04.120 of Chapter 16.04 of Title 16 of the Santa Barbara Municipal Code is amended to read as follows:

16.04.120 Local Limitations on Wastewater Strength.

A. LIMITS ON WASTEWATER STRENGTH. No person shall discharge wastewater having any of the following pollutants in excess of the following daily maximum quantities at the point where the wastewater is discharged to the community sewer:
490 milligrams per liter (mg/L) ammonia as N
0,270.93 mg/L arsenic

0.090.19 mg/L cadmium

1.14.6 mg/L copper

0.970.90 mg/L cyanide

2.01.9 mg/L lead
22 mg/L molybdenum

0.0320.064 mg/L mercury
COUNCIL INTRODUCTION DRAFT 9/19/23

SHOWING CHANGES FROM CURRENT CODE
2 1.866.4 mg/L nickel

0.590.93 mg/L silver

2.643.4 mg/L total chromium

7.118.1 mg/L zinc

9.371.8 mg/L selenium
100 mg/L total oil or grease.

All concentrations for metallic substances are for total metal, unless indicated otherwise. The City may impose mass limitation in addition to the concentrationbased limitations above.

B. DILUTION PROHIBITED. No user shall ever increase the use of process waste, or in any way attempt to dilute a discharge, as a partial or complete substitute for adequate treatment to achieve compliance with a discharge limitation, unless expressly authorized by an applicable pretreatment standard or requirement.

The City may impose mass limitations on users who are using dilution to meet applicable pretreatment standards or requirements, or in cases when the imposition of mass limitation is appropriate.

C. NATIONAL CATEGORICAL PRETREATMENT STANDARDS. Users
must comply with the categorical pretreatment standards found in 40 CFR Chapter I, Subchapter N, Parts 405-471.

D. BMPs. The Public Works Director may establish BMPs, to implement this Section and the requirements of Chapter 16.04. The BMPs may be established by administrative guidelines or as conditions of issuance of a Waste Discharge Permit.

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Mayor and Councilmembers
FROM: Engineering Division, Public Works Department
SUBJECT: Grant of Easement to Southern California Gas Company Related to Existing High-Pressure Gas Line on City Property at Sheffield Reservoir and Stanwood Drive [Resolution; Agreement]
RECOMMENDATION: That Council:

A. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Authorizing the Public Works Director to Execute a Utility Easement to Southern California Gas Company on the City Property Adjacent to Sheffield Reservoir and Stanwood Drive Right of Way;
B. Determine that the project is exempt under California Environmental Quality Act Guideline § 15301 (b); and
C. Approve the Grant of Utility Easement to Southern California Gas Company on City Property Adjacent to Sheffield Reservoir and Stanwood Drive Right of Way and direct the filing of a Notice of Exemption in compliance with California Environmental Quality Act Guideline § 15062.

DISCUSSION:

Southern California Gas Company (SoCalGas) has an existing pipeline on the subject property containing a 16-inch high-pressure gas line. SoCalGas requires an additional 15-foot by 10-foot easement area for the purpose of installing and maintaining a buried cathodic protection system appurtenant to and for the protection of the pipeline.

The existing pipeline and easement run across the City-owned property primarily utilized by the Sheffield Reservoir and aboveground open space area. This pipeline and the proposed additional easement area are located within undeveloped land between the existing reservoir and the City street known as Stanwood Drive (see Attachment 1 and 2).

The subject easement is necessary for a deep well underground anode grounding device for the protection of the existing high-pressure gas pipeline. The new easement area will be used for the installation and maintenance of the anode grounding device and connections to the existing pipeline. It will be contained within a fenced area once construction is complete.

Agenda Item No. 4
File Code No. 330.03
Council Agenda Report
Grant of Easement to Southern California Gas Company Related to Existing HighPressure Gas Line on City Property at Sheffield Reservoir and Stanwood Drive [Resolution; Agreement]
September 19, 2023

Page 2 ends

BUDGET/FINANCIAL INFORMATION:

The proposed action has no financial impact on the City.

ENVIRONMENTAL REVIEW:

Under Santa Barbara Municipal Code (SBMC) § 22.100.070 and § 22.100.080, the Public Works Director has determined that the project is exempt under California Environmental Quality Act (CEQA) Guideline § 15301 (b).

CEQA Exemption Criteria
CEQA Guideline § 15301 (also known as the Class 1 exemption) covers the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing facilities, equipment, or topographical features, involving negligible or no expansion of existing or former use including existing facilities of both investor and publicly owned utilities used to provide electric power, natural gas, sewerage, or other public utility services. This project falls under subdivision (b) of § 15301. The pipeline is an existing SoCalGas facility, and the project supports maintenance of this facility and does not involve an expansion of use.

The project will allow SoCalGas to construct cathodic protection for its existing pipeline.

The project is not anticipated to result in any significant impacts to environmental resources.

For these reasons, the Public Works Director, exercising authority under SBMC §

22.100.080, has determined the project is exempt from CEQA. Council has final authority to approve the project. Therefore, Council must confirm the exemption before project approval. The recommended action will make the necessary environmental determination and authorize the filing of a Notice of Exemption for the project.

Staff recommends approval of the Resolution to grant the utility easement to SoCalGas due to the necessity of the electrical protection system for the existing pipeline.

A copy of the Easement Grant Deed may be requested from the Public Works Department for public review by contacting [email protected].

ATTACHMENTS: 1. Vicinity Location of Proposed Easement Area

2. Survey of Easement Area
PREPARED BY: Eric Goodall, P.E., Acting Principal Engineer/DT/sk SUBMITTED BY: Clifford M. Maurer, P.E., Public Works Director APPROVED BY: City Administrator’s Office
Vicinity Location of Gas Company Easement
AdddA
Approximate location of Gas
Company Easement 10’x15’
10’x15’
ATTACHMENT 1
ATTACHMENT 2
Survey of Easement Area
RESOLUTION NO. __________

A RESOLUTION OF THE COUNCIL OF THE CITY OF

SANTA BARBARA AUTHORIZING THE PUBLIC WORKS

DIRECTOR TO EXECUTE A UTILITY EASEMENT TO

SOUTHERN CALIFORNIA GAS COMPANY ON THE CITY

PROPERTY ADJACENT TO SHEFFIELD RESERVOIR AND

STANWOOD DRIVE RIGHT OF WAY
WHEREAS, Southern California Gas Company (SoCalGas) has requested an easement for underground utility services to provide electrical monitoring to its existing high pressure underground gas pipeline on property located adjacent to the Shefffield Reservoir and Stanwood Drive public right of way;
WHEREAS, the new easement will be in the same area as the existing SoCalGas easement and pipeline facilities, and will not interfere with operations of the reservoir or public right of way;
WHEREAS, the new easement installation will provide upgraded protection for the existing high pressure gas line for public utility service; and WHEREAS, a copy of the proposed easement is on file in the Public Works Department.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SANTA BARBARA AS FOLLOWS:

SECTION 1. The Public Works Director is authorized to execute and deliver to SoCalGas for recording in the Official Records for the County of Santa Barbara, an easement substantially in a form on file with the Public Works Department, and as approved as to form by the City Attorney.

SECTION 2. The area subject to the easement is shown on Exhibit A to this Resolution.

Exhibit A

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Mayor and Councilmembers
FROM: Administration, Library
SUBJECT: Bequest from the William Stephen Wagner 1988 Inter Vivos Trust to the City of Santa Barbara for Exclusive Use and Benefit of the Library Department [Resolution]
RECOMMENDATION: That Council:

DISCUSSION:

A Council Resolution is needed to approve the acceptance of a bequest made to the City of Santa Barbara. Government Code § 37354 empowers the City Council to distribute the gift for such uses as are prescribed in the terms of the bequest. The City has been notified that the William Stephen Wagner 1988 Inter Vivos Trust has bequeathed funds to the Library as follows:

HULDA H. WAGNER MEMORIAL CHILDREN’S BOOK FUND: a one-time distribution totaling $100,000 to be spent at the annual rate of $10,000 on children’s books.

Agenda Item No. 5
File Code No. 570.04
Council Agenda Report
Bequest from the William Stephen Wagner 1988 Inter Vivos Trust to the City of Santa Barbara for Exclusive Use and Benefit of the Library Department [Resolution] September 19, 2023

Page 2 ends

WILLIAM AND HULDA WAGNER MEMORIAL TRUST: any residual remainder from the Trust (approximately $3,500,000, minus remaining expenses of administration) to be distributed after an accounting by the Trustee to the beneficiaries of the trust.

The Santa Barbara Public Library staff members express their deep gratitude and appreciation to William Wagner and Hulda Wagner for this generous bequest and expression of support.

BUDGET/FINANCIAL INFORMATION:

Upon City Council acceptance, any distributions from the William Stephen Wagner 1988 Inter Vivos Trust will be deposited into the Miscellaneous Library Trust Fund.

PREPARED BY: Kathrin Rosenberger, Administrative Analyst SUBMITTED BY: Jessica Cadiente, Library Director
APPROVED BY: City Administrator's Office
1 RESOLUTION NO.

A RESOLUTION OF THE COUNCIL OF THE CITY OF
SANTA BARBARA AMENDING RESOLUTION NO. 23-076
ADOPTING THE BUDGET FOR FISCAL YEAR 2024,

INCREASING REVENUE AND EXPENDITURE
APPROPRIATION IN FISCAL YEAR 2024 IN THE AMOUNT
OF $100,000 IN THE LIBRARY MISCELLANEOUS TRUST
FUND.

WHEREAS, Government Code § 37354 permits the City Council of a city to accept or reject any gift, bequest or devise made to or for the city, or to or for any of its officers in their official capacity or in trust for any public purpose, and further empowers a city council to hold and dispose of such property and the income and increase from the same for such uses as are prescribed in the terms of the gift, bequest, or devise; WHEREAS, the City has been notified that the William Stephen Wagner 1988 Inter Vivos Trust (“Trust”) has bequeathed $100,000 to the Santa Barbara Public Library to be spent at the annual rate of $10,000 until principal and interest are exhausted; WHEREAS, said above amount shall be used for the acquisition of children’s books and shall be known as the “HULDA H. WAGNER MEMORIAL CHILDREN’S BOOK FUND”;
WHEREAS, upon conclusion of the trust administration, the residue of the William Stephen Wagner Trust will be distributed to the Trustee for the William and Hulda Wagner Memorial Trust, pursuant to the terms of Article VI.F.(6) of the Trust; WHEREAS, the amount of the residue to be distributed will be the current balance of the trust estate, approximately $3,500,000, less remaining expenses; WHEREAS, upon completion of an accounting, the Trustee will report to the beneficiaries and distribute the residue of the trust assets in conformance with the terms of the Trust;
WHEREAS, in accordance with the City Charter, the City Administrator filed with the City Council a proposed budget for the fiscal year beginning July 1, 2022; WHEREAS, the City Council is required to adopt a budget before the beginning of the fiscal year on July 1, 2022;
WHEREAS, the City Charter provides that, at any public meeting after the adoption 2 of the budget, the City Council may amend or supplement the budget by motion adopted by the affirmative votes of at least a majority of the total members of the City Council; and WHEREAS, as authorized by Resolution No. 22-059, this Resolution approves the amendment to the budget as provided herein to increase revenue appropriations and expenditures in the amount of $100,000 in the Fiscal Year 2023 Library Miscellaneous Trusts Fund.

NOW, THEREFORE, be it resolved by the Council of the City of Santa Barbara as follows:

1. The Council accepts, for the benefit of the Library Department, the bequest from the William Stephen Wagner 1988 Inter Vivos Trust in the amount of $100,000 to be spent at an annual rate of $10,000 for the acquisition of children’s books until principal and interest are exhausted, and which shall be known as the “HULDA H. WAGNER MEMORIAL CHILDREN’S BOOK FUND.”

2. The Council accepts, for the benefit of the Library Department, any residual remainder, approximately $3,500,000 from the Trust, less remaining expenses of administration, to be distributed after an accounting by the Trustee.

3. In accordance with the provisions of Section 1205 of the City Charter, the budget for the fiscal year 2024, as amended by Resolution No. 22-059, is hereby amended to increase revenue appropriation and expenditure appropriation of $100,000 in the Fiscal Year 2024 Library Miscellaneous Trust Fund.

CITY OF SANTABARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Mayor and Councilmembers
FROM: Housing and Human Services Division, Community
Development Department
SUBJECT: Approval to Subordinate the City’s Affordability Covenant on Presidio Park Apartments Located at 420 East De La Guerra Street
RECOMMENDATION: That Council:

EXECUTIVE SUMMARY:

Presidio Park Apartments, located at 420 East De La Guerra Street, currently owned by Goldrich Kest, is being sold to Belveron Flagship Fund VII REIT Property Owner, L.P., a Delaware limited partnership, an affiliate of Belveron Partners (New Owner).

The apartment complex is a multi-family affordable housing property containing 50 units, all of which are subsidized under a U.S. Department of Housing and Urban Development (HUD) Section 8 Housing Assistance Payment Contract (HAP Contract).

As part of the acquisition, HUD will consider extending their HAP Contract and pay more for their portion of subsidized rents (no resident will see an increase in their Tenant-Paid portion of the rent) at the property in order to facilitate a much-needed major renovation to improve and update the property.

Agenda Item No. 6
File Code No. 640.08
Council Agenda Report
Approval to Subordinate the City’s Affordability Covenant on Presidio Park Apartments Located at 420 East De La Guerra Street
September 19, 2023

Page 2 ends

DISCUSSION:

Background
Goldrich Kest, the current owner of the property, has a loan from the City of approximately $10.8 million with a maturity date of August 31, 2077.

The New Owner is seeking to finance renovation of the property through a Freddie Mac or Fannie Mae financed bank loan. Both the City’s loan and affordability covenant are secured by a deed of trust, which contains a right of redemption and foreclosure remedy which terms preclude Freddie Mac and Fannie Mae from lending on the property. The new lender is requesting that the City agree to subordinate both the City loan and covenant to the new debt through a subordination agreement which waives the City’s right to redemption and foreclosure. Waiver of the City’s foreclosure remedy greatly increases the risk of loss to the City.

Alternatively, the New Owner has offered to pay off the City loan at close of escrow.

The approximate balance due on the City loan is $10.8 million. With a loan maturity date of August 31, 2077. If the City accepts early payoff of the loan, the City will forgo approximately $16.2 million in interest payments over the course of the loan. Staff recommends accepting the payoff of the balance due on the loan to avoid the enhanced risk of loss associated with the subordination. The loan was originally made through the Successor Agency to the former Redevelopment Agency of the City of Santa Barbara Low and Moderate Income Housing Funds. Repayment of loan proceeds must, by law, be repaid back into that fund and will be reinvested into another qualified housing project.

Subordination of the Affordability Covenant with a waiver of the foreclosure remedy does not contain the same risk level. The City will retain its remedy of specific performance which, in the event of a failure to perform, allows the City to apply to a court to order compliance with the covenant. In order to facilitate the renovations of the property as described below, staff supports the subordination request and recommends Council approval.

Project Description
The financing, as described above, will allow the New Owner to invest approximately $32,000 per unit in construction costs to help improve the property and resident experience. In conjunction with improving the property, the New Owner will extend the life of HUD’s Section 8 HAP Contract, further protecting the residents’ ongoing subsidy.

Council Agenda Report
Approval to Subordinate the City’s Affordability Covenant on Presidio Park Apartments Located at 420 East De La Guerra Street
September 19, 2023

Page 3 ends

Under a HAP Contract, HUD provides Section 8 rental subsidies to the project owners in an amount equal to the difference between the HUD-approved rent (the Contract Rent) for a particular assisted unit and the HUD-required rental contribution from eligible tenants (the Tenant-Paid portion). The Tenant-Paid portion is calculated as an amount equal to 30 percent of the eligible tenants’ monthly adjusted income.

Proposed Rehabilitation
The rehabilitation will include numerous repairs to the building and site, with an emphasis on in-unit and community improvements for the residents. Interior renovations will include upgraded kitchens and bathrooms, new Energy Star refrigerators and ranges, LVP flooring, and new plumbing fixtures. Community improvements include activating underutilized spaces to create resident amenity spaces that do not currently exist at the Project. These improvements include a new business center, a new fitness area, reading area upgrades, common area wi-fi, the addition of an enclosed dog run, and replacement of the existing playground, gazebo, and grill equipment. The New Owner expects that the work will take place over a period of approximately 12 months.

During these hours, private hospitality suites will be provided where residents can rest, access wi-fi, and take meals.

The New Owner will engage a resident relations specialist who will be set up at the Project four to six weeks before construction begins to create hospitality suites, distribute tenant notices, manage files, and work directly with residents to plan for construction in their units. All labor and costs of packing residents’ belongings, to allow for construction work, will be provided by the New Owner, and lunches and/or lunch vouchers will be provided to residents for the days their units are under construction.

Project Financing
Subject to HUD approval, the New Owner is requesting a rent increase that will reflect the market rental value at the closing. HUD’s approval of the rents prior to the completion of the work will allow the Project to support the new loan that makes the renovation possible. The requested HUD contract rents are outlined below. It is important to note that no resident will see an increase in their Tenant-Paid portion of the rent. All residents are capped at 30 percent of their monthly adjusted income, and any increase in the Contract Rent will be paid by HUD.

Council Agenda Report
Approval to Subordinate the City’s Affordability Covenant on Presidio Park Apartments Located at 420 East De La Guerra Street
September 19, 2023

Page 4 ends

Unit Type Unit Count Current HUD HAP
Contract Rent
Renovated HUD HAP
Contract Rent
1BR 34 $2,340 $2,980
2BR 14 $2,555 $3,725
3BR 2 $3,150 $4,465
Affordability Covenant
The City currently has an affordability covenant on the property that is set to expire in the year 2077. The New Owner is requesting the City subordinate this covenant in order to facilitate the new financing as a bank requirement.

Conclusion
Staff recommends that Council approve subordination of the City’s affordability covenant and authorize to accept early payoff of the balance due on the City loan.

The new financing will allow the needed rehabilitation of the property and will enable an extension of HUD’s HAP Section 8 Program, which safeguards affordable rents for the tenants. Affordability restrictions will remain on the property to ensure the property remains affordable to current and future Low-Income tenants.

BUDGET/FINANCIAL INFORMATION:

Repayment of the City loan totaling approximately $10.8 million will be received upon transfer of the property title occurring at the close of escrow. The $10.8 million loan repayment will be deposited into the City’s Affordable Housing Fund and used over time for other qualifying housing projects. Taking early payoff of the loan will result in the loss of approximately $16.2 million in interest payments or approximately $200,000 annually into the Low and Moderate Income Fund over the course of the loan. The loan has an interest rate of four percent and interest income from available cash in the fund returns approximately two percent. This revenue loss represents approximately 17 percent of the total revenue budget for the Affordable Housing Fund in Fiscal Year 2024. A portion of the revenue loss will be offset by collection of investment interest income on the increased cash balance in the fund. As the available funds are programmed and the cash balance in the Affordable Housing Fund decreases, the loss of revenue related to the loan repayment will increase.

ATTACHMENT: Belveron Partner’s Request Letter
PREPARED BY: Laura Dubbels, Housing and Human Services Manager SUBMITTED BY: Elias Isaacson, Community Development Director Council Agenda Report
Approval to Subordinate the City’s Affordability Covenant on Presidio Park Apartments Located at 420 East De La Guerra Street
September 19, 2023

Page 5 ends

APPROVED BY: City Administrator’s Office
1 San Francisco Office New York Office
220 Montgomery Street, PH 2 43 West 24th Street, Suite 1201 San Francisco, CA 94104 New York, NY 10010
www.belveronpartners.com
August 31, 2023
Laura Dubbels
Community Development
City of Santa Barbara
Request for Approval - Presidio Park Apartments Subordination/Standstill Agreement An affiliate entity of Belveron Partners (“BP” or “Proposed Owner”) is in contract to acquire Presidio Park Apartments (the “Project”) from Goldrich Kest (“GK” or “Seller”) for $23MM. The Proposed Owner will acquire the Project from Seller with a Fannie Mae from Capital One, National Association (the “Lender”) in the approximate amount of $18MM and approximately $7MM in BP equity. The financing will allow the Proposed Owner to invest approximately $32,000 per unit in construction costs to help improve the resident experience. In conjunction with improving the community, BP will extend the life of Section 8 HAP Contract further protecting the residents’ ongoing subsidy.

Lender’s counsel has identified the need for a subordination/standstill agreement due to the fact that Santa Barbara’s affordable housing covenant and loan are both secured by a Deed of Trust which contains problematic remedies from Fannie Mae’s perspective. Specifically, the right of redemption and right of foreclosure are remedies that Fannie is not comfortable with and would preclude them from lending to the Project. Subordinating the redemption and foreclosure remedies will not impact the City’s core mandate and right to protect the Project’s affordability. The proposed form of subordination/standstill agreement continues to provide the City the right to exercise its most important remedies of specific performance or injunctive relief in the event of a default or breach of the terms of the restrictive covenant.

Fannie Mae does not want to impede the City’s ability to enforce its affordability restrictions. It is standard practice for other state and municipal agencies (e.g. TCAC in California) to agree to the agency lender subordination/standstill arrangements in connection with affordable acquisition/rehab transactions.

The Proposed Owner requests approval of the subordination/standstill agreement, subject to the necessary factual modifications specific to the Project, which will allow the Proposed Owner to secure the financing necessary to complete a rehabilitation of the Project which will benefit the current and future residents of Presidio Park Apartments.

Sincerely,
Josh Plattner
Chief Investment Officer

ATTACHMENT
2 San Francisco Office New York Office
220 Montgomery Street, PH 2 43 West 24th Street, Suite 1201 San Francisco, CA 94104 New York, NY 10010
www.belveronpartners.com
For your further review, we have included a Project Description in the section that follows to provide additional Project detail, as well as a company overview. Thank you for your consideration and support.

Project Description
Presidio Park Apartments is a 50-unit multifamily affordable housing property located in Santa Barbara, California. All of the units are subsidized under a HUD Section 8 Housing Assistance Payment Contract (“HAP Contract”).

Under a HAP Contract, HUD provides Section 8 rental subsidies to the project owners in an amount equal to the difference between the HUD approved rent (the "Contract Rent") for a particular assisted unit and the HUD required rental contribution from eligible tenants (the “Tenant-Paid Portion). The Tenant-Paid Portion is calculated as an amount equal to 30% of the eligible tenants' monthly adjusted income.

The Proposed Owner will acquire the Project from Seller with a Fannie Mae loan from Capital One, National Association (the “Lender”) in the approximate amount of $18,318,000 and approximately $6,892,475 in Belveron Partners equity. The financing will allow the Proposed Owner to invest approximately $32,000 per unit in construction costs to complete a rehabilitation of the Project. The rehabilitation will include numerous repairs to the building and site, with an emphasis on in-unit and community improvements for the residents.

Interior renovations will include upgraded kitchens and bathrooms, new Energy Star refrigerators and ranges, LVP flooring, and new plumbing fixtures. Community improvements include activating underutilized spaces to create resident amenity spaces that do not currently exist at the Project. These improvements include a new business center, a new fitness area, reading area upgrades, common area wi-fi, the addition of an enclosed dog run, and replacement of the existing playground, gazebo, and grill equipment. The Proposed Owner expects that the work will take place over a period of approximately 12 months.

The renovations for the Project are planned so that the Project will be livable throughout the renovation period and will be conducted without requiring overnight relocation of residents. While their units are under construction, residents will be required to leave their unit each day at 8am and will be permitted to return to their unit at 5pm. During these hours, private hospitality suites will be provided where residents can rest, access wi-fi, and take meals. The Proposed Owner will engage a resident relations specialist who will be set up at the Project four to six weeks before construction begins to set up hospitality suites, distribute tenant notices, manage files, and work directly with residents to plan for construction in their units. All labor and costs of packing resident belongings to allow for construction work will be provided by the Proposed Owner, and lunches and/or lunch vouchers will be provided to residents for the days their units are under construction.

Subject to HUD approval, the Proposed Owner is requesting a rent increase that will reflect the market rental value of the renovation be effective at the closing. HUD’s approval of the rents prior to the completion of the work will allow the Project to support the new loan which makes the renovation possible. The new HUD contract rents requested are outlined below. It is important to note that no resident will see an increase in their TenantPaid Portion of the rent. As previously mentioned, all residents are capped at 30% of their monthly adjusted income and any increase in the Contract Rent will be paid by HUD. 3 San Francisco Office New York Office
220 Montgomery Street, PH 2 43 West 24th Street, Suite 1201 San Francisco, CA 94104 New York, NY 10010
www.belveronpartners.com
Unit Type Unit Count Current Rent Renovated Rent
1BR 34 $2,340 $2,980
2BR 14 $2,555 $3,725
3BR 2 $3,150 $4,465
In connection with the rent increase request, the Proposed Owner will enter into a new long-term Section 8 HAP Contract with HUD for 30+ years, ensuring the preservation of necessary HUD-subsidized low-income housing in Santa Barabara, one (1) of only two (2) Section 8 HAP Contract properties in the City.

It is also important to note that the Project is not a candidate for a LIHTC rehabilitation pursuant to AB 447. The long-term regulatory agreement and HAP Contract precludes the Project from meeting the eligibility requirements as the regulatory agreement and rental subsidy do not terminate at any time within the next five years. The conventional financing through Fannie Mae and Freddie Mac allow for immediate investment in the Project, updating the residents’ living spaces and creating community amenity spaces that do not currently exist at the Project.

COMPANY OVERVIEW
Belveron is one of the country’s largest owners of affordable housing* with a strong focus on the creation and preservation of rental homes for low-income and working families across the United States. Since inception in 2006, we’ve deployed over $1 billion of equity in concert with our double bottom-line approach and a mission to have a positive social impact on the communities we serve.

Our portfolio spans more than 37,000 homes and 200
properties across 23 states. Belveron Partners takes pride in being an active local stakeholder and providing housing solutions to our residents.

Belveron’s core competency is our specialized focus on
multifamily affordable and workforce housing across the United States. We understand how to navigate the intricate legal, financing, and regulatory frameworks to provide quality housing for our residents.

Our team has decades of experience in the affordable
housing sector as evidenced by Belveron’s tenured standing and established track record.

The critical shortage of affordable housing in the United States stems from a historic imbalance of supply and
demand, paired recently with inflationary pressures and pandemic-related market disruptions. Meanwhile, the federal government has limited allocation of funding for affordable housing, creating an ever-increasing imbalance and need.

This confluence of events drive an even greater need for affordable housing. Belveron Partners provides immediate and accessible preservation capital to address this critical housing need.
37,000+
Units
200+
Properties
23 U.S. States plus the District of Columbia
$1B+
Equity Deployed
Belveron Partners

CONTACTUS
belveron.com
San Francisco Office
268 Bush Street, Suite 3534 San Francisco, CA 94104
New York Office
43 West 24th Street, Suite 1201 New York, NY 10010
[email protected]
*Belveron ranks #6 according to Affordable Housing Finance’s Top 50 Owners List of 2022. This ranking is based entirely on information reported by the ranked low-income housing providers, including Belveron, to Affordable Housing Finance. There can be no assurances that the self-reported information is accurate or that the ranking takes into account all providers of low-income housing, some of whom may not have been included. Moreover, this ranking is based on a single metric – the number of units owned by a provider – which may not be entirely reflective of Belveron’s position in the marketplace or its status as a provider of low income housing.

Project-Based
Section 8
Tax Credit
Projects
Public-Private
Partnerships

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Mayor and Councilmembers
FROM: Water Resources Division, Public Works Department SUBJECT: Authorization to Purchase Recycled Water Membrane Modules for the El Estero Water Resource Center
RECOMMENDATION:

That Council finds it in the City of Santa Barbara’s best interest to waive the formal bidding process as authorized by Municipal Code 4.52.070(L) and authorize the General Services Manager to issue a Purchase Order to Filmtec Corp, a subsidiary corporation of Dupont, in the amount of $356,895 for the purchase of 150 Dupont IntegraTec™ XP 77 UltraFiltration Membrane Modules for use at the El Estero Water Resource Center; and approve expenditures to cover contract change orders for any additional taxes or shipping-related expenses.

DISCUSSION:

Background
The El Estero Water Resource Center (EEWRC) plays a central role in the protection of public health and the environment from the Community’s wastewater. In addition, it is also responsible for the operation of the City of Santa Barbara’s (City) Recycled Water Treatment Plant (Plant). This facility produces approximately 1,000 acre-feet per year, 10% of the City’s annual water needs, for use in watering outdoor landscapes (e.g., City parks, golf courses, and schools). The Plant was upgraded in 2015, employing the use of membrane technology referred to as UltraFiltration. This technology has proven to be reliable and robust, providing high-quality recycled water. The membrane modules used in the UltraFiltration System were provided by Dow Technology (Dow). The Dow membrane modules are now reaching the end of their useful life and require replacement.

UltraFiltration Membrane Modules
EEWRC Operations Staff have been operating the Plant since October 2015, and it has been optimized for use with the Dow UltraFiltration SFD-2880 membrane modules. In 2017, Dupont acquired Dow and has since rebranded an upgraded version of the original membrane modules as Dupont IntegraTec™ XP 77.

Agenda Item No. 7
File Code No. 540.13
Council Agenda Report
Authorization to Purchase Recycled Water Membrane Modules for the El Estero Water Resource Center
September 19, 2023

Page 2 ends

Staff have engaged Dupont and received a proposal to replace the existing 216 SFD-2880 modules with 150 XP 77 modules directly from the manufacturer foregoing any vendor and/or supplier markup. Staff informally requested quotes from two additional distributors of Dupont modules and have determined that the pricing that the City has been quoted is fair and significantly less than what was projected. Suitable substitutes are available for these units, but they require additional effort and costs to make them work. The Dupont replacement modules are the same size and configuration as the previous modules, therefore, the replacement can be performed by City staff eliminating the need for contract support.

BUDGET/FINANCIAL INFORMATION:

There are sufficient expenditure appropriations in the Recycled Water Plant Project in the Water Capital Fund in Fiscal Year 2024 to fund the proposed purchase order and change orders for the UltraFiltration Membrane Modules.

SUSTAINABILITY IMPACT:

Recycled water plays an important role in the City’s water supply portfolio, offsetting outdoor watering needs by repurposing treated wastewater. The current membrane modules require replacement to continue to meet customer demands for recycled water.

ATTACHMENT: Membrane Module Proposal from Dupont
PREPARED BY: Amanda Flesse, P.E., Wastewater System Manager/TW/lm SUBMITTED BY: Clifford M. Maurer, P.E., Public Works Director APPROVED BY: City Administrator's Office
DuPont™, the DuPont Oval Logo, and all trademarks and service marks denoted with ™, ℠ or ® are owned by affiliates of DuPont de Nemours, Inc. unless otherwise noted. © 2019 DuPont.

June 16, 2023
Thomas Welche

EL ESTERO WATER RESOURCE CENTER
520 EAST YANONALI ST.,
SANTA BARBARA, CA 93103-3200
Dear Thomas:

DuPont is pleased to quote the following products:

Product Name GMID Quantity Unit Price – USD Total Price – USD IntegraTec™ XP 77 12091620 150 2,310.00 346,500.00
Fuel Surcharge 3% 10,395.00
Payment Terms Upon an accepted order, items will be shipped and invoiced pursuant to Seller’s terms and conditions
Quote Expires Pricing valid for an order until December 16, 2023 Freight CPT USA
Availability Expected lead time of 12-16 weeks. Will work with plant to meet project timelines as best we can. Actual availability to be confirmed when ready to place an order
Project ID# Q-28953 – Please include this project ID# on PO Thank you for your interest in DuPont Water Solutions products.

Sincerely,
Scott Caothien
Commercial Development Manager – A&E’s
Irvine, CA
Mobile: 949-923-8098
Email: [email protected]

ATTACHMENT

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: September 19, 2023
TO: Mayor and Councilmembers
FROM: City Attorney’s Office/City Administrator’s Office SUBJECT: Paseo Nuevo Redevelopment Options
RECOMMENDATION: That Council:

A. Hear a presentation and provide input on public benefit preferences to inform staff negotiations with AB Commercial Real Estate Debt Fund (“AB Commercial”); and B. Authorize staff to negotiate the terms of a project agreement with AB Commercial and return to Council for approval of the agreement.

DISCUSSION:

In 1987, the former Redevelopment Agency of the City of Santa Barbara (RDA) and Paseo Nuevo Associates entered into a Disposition and Development Agreement that provided for the development of the Paseo Nuevo mall, which included the in-line mall shops, two anchor tenants, and associated on-site and off-site parking. In 1989, 75-year term ground leases were entered into between the RDA (as landlord) and Santa Barbara Associates (as tenant for the in-line shops main mall parcel (“Paseo Nuevo Parcel”)), Carter Hawley Hale Stores (as Tenant for the now the vacant Macy’s parcel (“Macy’s Parcel”)), and Nordstrom’s, Inc. (as tenant for the now vacant Nordstrom’s parcel (“Nordstrom’s Parcel”)).

The RDA dissolved in 2012 and in 2016 ownership of all property underlying the three ground leases transferred to the City of Santa Barbara. The City assumed the leases which are now subject to the City’s 50-year charter limitation.

The Paseo Nuevo Parcel Lease has a remaining term of 42 years and will expire in 2065, the Nordstrom’s Parcel and the Macy’s Parcel leases have remaining terms of 41 years and will expire in 2064.

Agenda Item No. 8
Council Agenda Report
Paseo Nuevo Redevelopment Options
September 19, 2023

Page 2 ends

Ownership of the Paseo Nuevo Parcel lease and Macy’s Parcel lease has changed hands many times over the years until most recently in 2022 when AB Commercial acquired the two leases through a deed-in-lieu of foreclosure agreement with Paseo Nuevo Owner LLC and Paseo Nuevo Owner II LLC. AB Commercial assigned the two leases to Paseo Propco LLC, a Delaware limited liability company, and an affiliate of AB Commercial. AB Commercial has continued management of the mall property and, in consultation with the City, has evaluated the potential for redevelopment of the property.

The City retained the firms of Strategic Economics and Maxima Group to assist the City with an objective third-party evaluation of the City’s options regarding redevelopment of the Paseo Nuevo and the Macy’s Parcels. Both firms have extensive experience advising public agencies on real estate feasibility and complex redevelopment projects.

City staff, together with the consultant, have evaluated the encumbrances and obligations restricting redevelopment of the Paseo Nuevo and Macy’s Parcels under the current ownership structure and have assessed options available for redevelopment working in collaboration with AB Commercial. Those options will be presented to City Council along with a request for input from City Council on public benefit preferences for redevelopment of the property and authorization for staff negotiations with AB Commercial.

BUDGET/FINANCIAL INFORMATION:

Minimal budget impacts at this time due to the existing contract with Strategic Economics.

If the negotiation process continues, this contract will likely continue, and costs will increase.

PREPARED BY: Sarah J. Knecht, City Attorney
Rebecca Bjork, City Administrator
SUBMITTED BY: Sarah J. Knecht, City Attorney
Rebecca Bjork, City Administrator
APPROVED BY: City Administrator's Office

Santa Barbara City CouncilSeptember 19, 2023

Santa Barbara City Council
September 19, 2023