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