City Council Staff Report Page 1 of 7 March 24, 2026
Staff Report
Agenda Item No. 5.2
DATE: March 24, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Continued Presentation on Potential Underwriting Options for Sidewalk Repair Costs for the Annual Sidewalk, Curb and Gutter, and Ramp Repair Project, City Project No. 25-03
EXECUTIVE SUMMARY
At the February 10, 2026, City Council meeting, staff presented three underwriting options that would offset 13%, 31.5%, or 50% of property owners’ costs associated with the Annual Sidewalk, Curb and Gutter, and Ramp Repair Project, City Project No. 25-03.
During the meeting, the City Council requested additional information on the full range of costs incurred by property owners and expressed interest in reducing the financial burden on property owners, particularly those who are economically disadvantaged.
Staff is now presenting the additional information requested by the Council. At the conclusion of the presentation, staff will request direction regarding the potential underwriting of property owners’ sidewalk repair costs. The City Council may select one of the three underwriting alternatives presented on February 10, 2026, identify an alternative approach, or maintain the current sidewalk repair cost recovery method. Any alternative would require staff to return to the City Council for formal action.
STRATEGIC PLAN ALIGNMENT
This agenda item is aligned with the following:
Goal D, Strategy 2: Environmental Sustainability and Infrastructure – Implement the City’s capital improvement plan.
BACKGROUND
On December 16, 2025, the City Council adopted Resolution No. 2025-173 accepting the completion of the Annual Sidewalk, Curb and Gutter, and Ramp Repair Project, City Project No. 25-03. The final construction cost of the project was $611,523.
On October 25, 2011, the City Council adopted Resolution No. 4230-11, which established the sidewalk maintenance and loan policy. Section 5610 of the California Agenda Item No. 5.2
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Streets and Highways Code and Section 12.08.615 of the Union City Municipal Code place the responsibility of sidewalk repair on the owners of the properties fronting the sidewalk. If sidewalk repairs are included in the City project, property owners have the option of paying 100% of the sidewalk repair costs outright or in a series of installment payments.
Under the City’s sidewalk repair cost recovery program, the City pays for mobilization, curb and gutter repair, and tree removal (if necessary). At the same time, property owners are responsible for the costs associated with sidewalk demolition, site preparation, and installation of the new sidewalk. The City initially pays for 100% of the project and seeks reimbursement from property owners for their share of the sidewalk repair costs following project closeout. Of the $611,523 total project cost, the City’s share is $333,177, and the property owners’ share is $278,346.
During this year’s project, City staff received more than 35 phone calls and emails from residents reporting financial hardship in paying their share of repair costs. In addition, project costs were approximately 86% higher than the City’s 2022 sidewalk repair project.
In response, at the December 16, 2025, meeting, the Council directed staff to explore underwriting options to help offset the property owners’ sidewalk repair costs.
On February 10, 2026, staff presented three underwriting options for City Council consideration. Option 1 proposed underwriting 13% of the property owners’ sidewalk repair costs; Option 2, 31.5%; and Option 3, 50%. Underwriting would mean the City would elect not to recover a portion of the sidewalk repair costs that it is otherwise authorized to collect under state law and the Municipal Code. None of the options would require additional project appropriations. However, any reduction in cost recovery would reduce funds that could otherwise be used for other roadway projects.
During the February 10, 2026, meeting, the City Council expressed interest in establishing program guidelines to reduce the amount collected from economically disadvantaged property owners. Before making a decision, the Council requested additional information on the full range of costs incurred by property owners. Other options discussed included extending the repayment plan to 24 months, providing a baseline underwriting amount of 10% for all property owners, and offering a higher underwriting percentage for property owners who qualify for either the City’s Utility User Tax Exemption (such as the PG&E CARE program) or the Republic Services discount program.
DISCUSSION
Sidewalk Repair Cost Distribution
The Annual Sidewalk, Curb and Gutter, and Ramp Repair Project, City Project No. 25- 03, included repairs at 109 sites throughout the City. Of these locations, five are HOA residential sites, 97 are single-family residential properties, six are industrial properties, and one is a private institution site.
The median sidewalk repair cost among the 109 properties is $2,025 per property. The full distribution of the sidewalk repair costs per property is shown in Figure 1.
Agenda Item No. 5.2
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Figure 1 - Sidewalk Repair Cost per Property Owner
Figures 2, 3, and 4 illustrate the distribution of property owner costs under the three underwriting scenarios presented to the City Council on February 10, 2026. These scenarios reflect the City electing not to recover 13%, 31.5%, and 50% of otherwise recoverable property owner costs, respectively.
Figure 2 - Sidewalk Repair Cost per Property Owner with 13% Underwriting Amount Agenda Item No. 5.2
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Figure 3 - Sidewalk Repair Cost per Property Owner with 31.5% Underwriting Amount Figure 4 - Sidewalk Repair Cost per Property Owner with 50% Underwriting Amount Another option discussed at the February 10, 2026, City Council meeting was a tiered underwriting approach. Under this option, the City would provide a 10% baseline underwriting amount to all property owners and a higher underwriting amount for residents who qualify for either the City’s Utility User Tax Exemption Program or Republic Services’ discount program. Figure 5 illustrates the distribution of property owner costs if the City elects not to collect 10%.
Agenda Item No. 5.2
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Figure 5 - Sidewalk Repair Cost per Property Owner with 10% Underwriting Amount Utility User Tax Exemption and Republic Services Discount Program Eligibility A Utility User Tax (UUT) exemption is available to Union City residential utility customers who are senior citizens (age 70 and older), low-income, or residents enrolled in the PG&E CARE Program. Eligible residents must apply and enroll in the City’s Utility User Tax Exemption program, and qualified recipients are exempt from paying the City’s 5% UUT.
Republic Services, the City’s solid waste service provider, also offers a discount program for residents 65 years of age or older, providing a 15% discount on the regular solid waste bill. Similar to the UUT exemption program, residents must apply and submit documentation to Republic Services to qualify for the discount.
To determine whether any property owners included in the project qualify under the provisions of the UUT exemption program or Republic Services’ program, staff reviewed the UUT exemption list provided on February 18, 2026, and the Republic Services discount program list provided on February 25, 2026. Property owner names obtained from the City’s GIS were cross-referenced with both lists. Based on this review, 8 of the 109 property owners appear to qualify under one or both programs. Of those, 4 property owners receive the Republic Services discount, 1 receives the UUT exemption, and 3 receive both the Republic Services discount and the UUT exemption. Figure 6 shows these eligible sites and the corresponding property owners’ sidewalk repair costs.
If the City Council expresses interest, staff will seek direction on which of the eight property owners should be eligible for a higher non-collection percentage and the applicable amount. The eight eligible property owners’ share of repair costs ranges from $270 to $8,156, totaling $19,301.
Agenda Item No. 5.2
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Figure 6 - Eligible Property Owners for UUT Exemption & Republic Services Discount
FISCAL IMPACT
The Annual Sidewalk, Curb and Gutter, and Ramp Repair Project, City Project No. 25- 03, was funded by a combination of State Gas Tax funds (Fund 250), SB 1 Road Maintenance and Rehabilitation funds (Fund 251), and Measure BB Bike and Pedestrian funds (Fund 267), for a total of $611,523. The Fiscal Year 2025-2026 CIP budget allocated $700,000 for this project, which was sufficient to cover the upfront construction costs.
Under the California Streets and Highways Code and the Union City Municipal Code, property owners are responsible for the cost of sidewalk repairs. The total amount attributable to property owners for this project is $278,346, which is collected following project closeout.
Electing not to collect 10% of the amount owed by property owners would increase the City’s share of project costs by approximately $27,835. Electing not to collect 13% would increase the City’s share by approximately $36,185; 31.5% would increase the City’s share by approximately $87,679; and 50% would increase the City’s share by approximately $139,173.
Electing any of these options would reduce the amount collected by the City and correspondingly increase the City’s share of the total project cost. As a result, fewer funds would be available for other CIP roadway projects.
RECOMMENDATION
Staff recommends that the City Council receive the presentation and provide direction regarding the potential underwriting of property owners’ sidewalk repair costs. The City Council may select one of the three alternatives presented at the February 10, 2026, City Agenda Item No. 5.2
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Council meeting, identify an alternative approach, or make no changes to the current cost recovery method for the Annual Sidewalk, Curb and Gutter, and Ramp Repair Project, City Project No. 25-03.
Prepared by: Diana Cangco, City Engineer
Submitted by: Marilou Ayupan, Public Works Director
Attachments
1. PowerPoint Presentation