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HomeMy WebLinkAboutMinutes 2020-07-21 @6:00puTH SANS MINUTES SPECIAL MEETING n U O CITY COUNCIL `4LIFO CITY OF SOUTH SAN FRANCISCO TUESDAY, JULY 21, 2020 6:00 p.m. Teleconference via Zoom City Council conducted this meeting in accordance with California Governor Newsom 's Executive Orders N-25-20 and N-29-20 and COVID-19 pandemic protocols. CALL TO ORDER Mayor Garbarino called the meeting to order at 6:00 p.m. ROLL CALL Present: Councilmembers Matsumoto, Nagales, and Nicolas, Vice Mayor Addiego, and Mayor Garbarino. AGENDA REVIEW No Changes. REMOTE PUBLIC COMMENTS — comments are limited to items on the Special Meeting Agenda. 1. Members of the public wishing to participate were encouraged to submit public comments in writing in advance of the meeting to all-cc@ssfnet by 4: 00 p.m. on Tuesday, July 21, 2020. The following public comments were received: Public Comment submitted regarding Item #1: • Kimberly Hui Public Comment submitted regarding Item #3: • Daniel Perez • Evangelina Portillo • Luz Jimenez • Olga Perez • Retesh Gupta Public Comment submitted regarding Item #4 • Marcela Rivera • Russell Lee ADMINISTRATIVE BUSINESS 2. Report regarding Observance of Columbus Day as a City Holiday. (Sharon Ranals, Assistant City Manager) Assistant City Manager Ranals presented the item and provided background information on the observance of Columbus Day. In 2019, Governor Newsom issued a proclamation stating that, "Instead of commemorating conquest today, we recognize resilience. For the first time in California state history, we proclaim today as Indigenous Peoples' Day." In the Bay Area, the County of San Mateo adopted a resolution on July 7, 2020, to designate the second Monday in October as Indigenous Peoples' Day in conjunction with Columbus Day, with both being observed. San Francisco has moved from Columbus Day to Indigenous Peoples Day and Italian American Heritage Day. East Palo Alto changed Columbus Day to Cesar Chavez Day and South San Francisco Unified School District does not observe Columbus Day. Staff recommended Council provide direction on making a change to the observance of Columbus Day, or any other city -observed holiday, these dates are specified in the Memorandums of Understanding (MOU's) for employee bargaining units. Vice Mayor Addiego inquired whether renaming the holiday would require union or workforce approval. Assistant City Manager Ranals indicated that renaming the holiday would not unless the holiday date was moved. Vice Mayor Addiego provided additional background information on the holiday. Councilmember Nicolas thanked Vice Mayor Addiego for bringing the item to Council and acknowledged that people had mixed emotions with Columbus Day. She suggested renaming the holiday to The Industrial City Day. Councilmember Nagales also acknowledged that people had mixed feelings about Columbus Day and suggested renaming the holiday Indigenous Peoples' Day. Councilmember Matsumoto expressed her support for Vice Mayor Addiego and would support renaming the holiday to Indigenous Peoples' Day or Native American Day. Mayor Garbarino suggested renaming the holiday to Ethnic Heritage Day or Ethnic Diversity Day because he did not want to single out any specific group of people. Vice Mayor Addiego agreed with Councilmember Matsumoto and provided various examples of how Native Americans suffered. He supported renaming the holiday to Indigenous Peoples' Day. There was a consensus of the Council to move forward with next steps to rename the holiday. 3. Report regarding housing program goals, existing housing policies and programs, and housing fund balances. (Nell Selander, Deputy Director, Economic & Community Development Department) Deputy Director Selander presented the item and provided background information on the City's housing program goals. She provided an overview of existing housing policies and programs. The City has three housing funds, which are used to preserve affordable housing, fund the construction of new affordable housing development, to support housing programs, and for administration. These three housing funds have the following origins and unencumbered cash balances. Low and Moderate Income Housing Asset Fund - Fund 241 Fund 241 has an unencumbered cash balance of $2.25 million as of July 1, 2020. This fund's assets SPECIAL CITY COUNCIL MEETING JULY 21, 2020 MINUTES PAGE 2 were transferred to the City as the Housing Successor to the former South San Francisco Redevelopment Agency. This fund will eventually be expended, as there are no new significant revenues being deposited into it. What little revenues it derives are from loan repayments and earned interest. Housing Trust Fund - Fund 205 Fund 205 has an unencumbered cash balance of $850,000 as of July 1, 2020. This fund derives revenue from developer in lieu fees and community benefit payments. If a developer has an inclusionary housing requirement (a below market rate unit set-aside) and is able to pay an in lieu fee, this is where those funds are deposited. City Council set the in lieu fee for affordable housing units quite high - $308,000 per required below market rate unit - so it is unlikely that many developers will pay the fee rather than build the affordable units. As a result, this fund is unlikely to grow significantly in the coming years. Commercial Linkage Fees - Fund 823 Fund 823 has an unencumbered cash balance of $2.8 million as of July 1, 2020. This fund derives its revenue from impact fees paid by commercial developers to offset their impact on the need for affordable housing. As our biotech cluster continues to grow, this fund is expected to grow substantially in the coming years. Currently, the charge on biotech and office development is $15 per square foot. Hotel and retail uses pay a lower fee. Staff recommended Council provide direction on housing program goals, existing housing policies and programs, and housing fund balances. Councilmember Nicolas inquired whether the upcoming Below Market Rate (BMR) manual would set qualifications for applicants seeking BMR units. Deputy Director Selander indicated that the manual would set the qualifications for applicants. She stated that they had administrative policies in place but they need to be updated and the manual would be updated with detailed information. Councilmember Nicolas requested clarification on staff s role and responsibilities on enforcement of City policies. Deputy Director Selander indicated the City did not administer the BMR units and it was up to the developers to qualify the applicants based on'the City's policies and City staff would review the applicants. Councilmember Nicolas inquired about the ramifications if a developer did not comply with the City's policies. Deputy Director Selander indicated that it was more about education and providing the developer guidance to correct an issue. She stated there were recourses stipulated in the affordable housing agreements should formal action need to be taken. Councilmember Matsumoto requested the Area Median Income figures specifically for South San Francisco and not the whole county. Deputy Director Selander stated that staff would provide them to Council in a Thursday memo. Councilmember Matsumoto indicated she would like to see a preference for teachers and first -responders. Councilmember Nagales inquired whether the current 20% inclusionary affordable housing requirement and development fees were the right rates for the City. Deputy Director Selander indicated she would provide more information in a Thursday memo. Mayor Garbarino provided some background on the arrival of the current inclusionary housing percentage and indicated that a Thursday memo would be helpful. SPECIAL CITY COUNCIL MEETING JULY 21, 2020 MINUTES PAGE 3 Councilmember Matsumoto and Vice Mayor Addiego agreed that workforce housing should be revisited. 4. Report regarding preventing residential displacement due to COVID-19, including augmenting the City's Rental Assistance Program and establishing a new Landlord Default Prevention Program. (Kris Romasanta, Community Development Coordinator) Community Development Coordinator Romasanta presented the item and provided background information on Rental Assistance Program. While the City's Rental Assistance Program targets tenants, it is agnostic to whether or not the rental assistance payment is going to a landlord operating at slim margins versus another landlord who is making significant profits. To target especially vulnerable tenants living in properties at risk of foreclosure, staff recommends establishing a Landlord Default Prevention Program. The program would provide grants to property owners facing hardship as a result of nonpayment of rent due to COVID-19, in exchange for waiving missed rent payments of low-income tenants. Staff understand smaller, debt -burdened landlords to be at particular risk of foreclosure due to the Shelter in Place Order. While the County's eviction moratorium protects tenants from eviction due to non-payment as a result of COVID-19, it does not protect multi -family property owners who have seen reduced revenues for the same reason. Additionally, unlike the forbearance banks have provided to home mortgage holders, many commercial lenders have not provided loan payment deferrals for commercial (multi -family) mortgages. The State legislature considered but failed to pass Assembly Bill (AB) 2501, which would have protected landlords from foreclosure if they were unable to make mortgage payments due to nonpayment of rent from tenants impacted by the pandemic. Specifically, AB 2501 would have provided forbearance to homeowners and multifamily borrowers for rent relief to any tenants, banning borrowers from evicting or penalizing tenants for nonpayment of rent. Debt -burdened landlords thus continue to face increased risk of foreclosure, which may result in tenant eviction and displacement. Although AB 828, an active bill in the committee process, would provide a temporary moratorium on foreclosures and evictions until 15 days after the COVID-19 state of emergency has ended, it does not provide financial relief likely required for some particularly hard-hit landlords to hold onto their properties. Due to these conditions, staff recommended Council consider establishing a Landlord Default Prevention Program. The Program would provide grants to certain smaller, debt -burdened landlords who need assistance paying their mortgage and other property expenses due to their tenants' inability to pay rent. These landlords would then be required to waive those missed rental payments for lower income tenants for a specific period. Staff recommended allocating $280,000 of the City's $838,111 CARES Act allocation to fund the Landlord Default Prevention Program. At this funding level, the program would serve 10-15 landlords, translating into rent relief for roughly 75 tenant households. In addition, augmenting the City's Rental Assistance Program by directing the first two years of PLHA funding to the program. Vice Mayor Addiego requested clarification on the demographics of the 76 households served in the Rental Assistance Program. Community Development Coordinator Romasanta indicated she would provide the information to the Council. SPECIAL CITY COUNCIL MEETING JULY 21, 2020 MINUTES PAGE 4 Councilmember Nagales thanked the Council for their support for the program and expressed his support for the programs. Councilmember Nicolas inquired whether the $250,000 Permanent Local Housing Allocation fund would be guaranteed for five years. Community Development Coordinator Romasanta stated that the first year would be guaranteed but the subsequent years funding would vary. Councilmember Nicolas requested clarification on the qualifications for the landlord program. Community Development Coordinator Romasanta indicated staff were still refining the qualifications for eligible landlords. Vice Mayor Addiego expressed his concerns with providing monetary assistance to landlords instead of tenants at this time. 5. Report regarding the City of South San Francisco's application to the State of California for Permanent Local Housing Allocation (PLHA) funds. (Deanna Talavera, Management Analyst II) Management Analyst Il Talavera presented the item and provided background information the Permanent Local Housing Allocation fund. The State generates funding for PLHA through recording fees on real estate transactions. Therefore, the funding will vary from year to year depending upon activity. South San Francisco's allocation for the first year of PLHA is $217,980. Further, the State estimates that the City will receive $1,307,880 over the first five years. Up to 5% of funds ($10,899 in the first year) may be used for program administration, covering a portion of the costs for staff who carry out affordable housing activities. Housing and Community Development issued a Notice of Funding Availability (NOFA) for PLHA in February 2020, with applications accepted on an over-the-counter basis beginning in April and through July 2020. For South San Francisco, the application process was not competitive because funding was allocated on an entitlement basis; however, the City must submit an application that complies with the NOFA guidelines, including a description of how South San Francisco intends to use its PLHA funds. Staff recommends Council consider adopting a resolution approving the PLHA grant application for submission. 6. Report regarding a new model to secure housing for households earning between 60% and 120% of the area median income (Nell Selander, Deputy Director, Economic & Community Development Department) Deputy Director Selander presented the item and provided background information on a new model to secure housing for households earning between 60% and 120% of the area median income. Catalyst Housing Group (Catalyst), a private real estate development and management firm, recently approached city staff about a new financing model to acquire and deed restrict market rate rental units for middle-income housing (60% to 120% of the area median income) using Essential Housing Revenue Bonds issued by Ca1CHA. After some very preliminary investigation into the model and the firm, staff is bringing this item forward to City Council to gauge interest in conducting additional due diligence and potentially joining Ca1CHA and pursuing a partnership with Catalyst. SPECIAL CITY COUNCIL MEETING JULY 21, 2020 MINUTES PAGE 5 Staff seeks direction from Council on whether or not there is interest in pursuing this model to secure middle-income housing in South San Francisco. Should Council be interested in learning more about CaICHA, Catalyst, and this financing model, staff will conduct additional due diligence and prepare a recommendation for Council on how to proceed. Councilmember Nicolas inquired whether Catalyst would acquire whole properties or a portion of units in a property. Jordan Moss, Founder of Catalyst stated the company would acquire an entire asset and restrict the asset to various income levels. Councilmember Nicolas inquired to what other city partnerships the company was currently working with. Moss indicated there were 14 current members with Catalyst and they were actively pursuing other members. They have acquired properties in Fairfield, Santa Rosa and Livermore. Vice Mayor Addiego inquired whether the City would become the owner after thirty years. Moss provided an overview of the process and indicated that the City would have the option to purchase the asset after 15 -years during the bonding period. Councilmember Matsumoto inquired whether Catalyst was the only company working with Ca1CHA. Moss indicated they currently were the only company partnered with Ca1CHA at the time providing middle housing. CLOSED SESSION Entered into Closed Session: 7:31 p.m. 7. Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Properties: 109 Longford (APN 010-071-050) City Negotiators: Nell Selander, Deputy Director of Economic and Community Development and Deanna Talavera, Management Analyst II Negotiating Parties: City of South San Francisco and Habitat for Humanity Under Negotiation: Review of Price and Terms Resumed from Closed Session: 7:50 p.m. Report out of Closed Session by Mayor Garbarino: Direction given to City negotiators. ADJOURNMENT Being no further business Mayor Garbarino adjourned the meeting at 7:51 p.m. Respectfully s bmitted by: (U Cindy vita Assistant City Clerk Approved by- Rid y: Richard Garbarno Mayor Approved by the City Council: 00 1 22 � 12-02-0 SPECIAL CITY COUNCIL MEETING JULY 21, 2020 MINUTES PAGE 6