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Home My WebLink About2021-09-21 Agenda Packet AGENDA City Council/Public Financing Authority Tuesday, September 21, 2021 Closed Session – 5:00 PM Regular Meeting – 6:00 PM MAYOR AND CITY COUNCIL KIM CARR, Mayor BARBARA DELGLEIZE, Mayor Pro Tem RHONDA BOLTON, Councilmember DAN KALMICK, Councilmember NATALIE MOSER, Councilmember ERIK PETERSON, Councilmember MIKE POSEY, Councilmember Council Chambers 2000 Main Street Huntington Beach, CA 92648 --or-- Virtual via Zoom Webinar STAFF OLIVER CHI, City Manager MICHAEL E. GATES, City Attorney ROBIN ESTANISLAU, City Clerk ALISA BACKSTROM, City Treasurer On March 17, 2020, Governor Newsom issued Executive Order N-29-20, which allows a local legislative body to hold public meetings via teleconferencing, and to make public meetings accessible telephonically or otherwise electronically to all members of the public seeking to observe and to address the local legislative body. IN-PERSON PUBLIC PARTICIPATION/ZOOM ACCESS: Members wishing to attend the meeting in person are encouraged to wear a face covering. Alternate ways to view City Council meetings live or on-demand remain: livestreamed on HBTV Channel 3 (replayed on Wednesday’s at 10:00 a.m., and Thursday’s at 6:00 p.m.); live and archived meetings for on- demand viewing accessed from https://huntingtonbeach.legistar.com/calendar; or, from any Roku, Fire TV or Apple device by downloading the Cablecast Screenweave App and searching for the City of Huntington Beach channel. PUBLIC COMMENTS: At 6:00 PM, individuals wishing to provide a comment on agendized or non-agendized items may do so in person by completing a Request to Speak form delivered to the City Clerk, or from a virtual location by entering Zoom Webinar ID 971 5413 0528 via computer device, or by phone at (669) 900-6833. The Zoom Webinar can be accessed here: https://huntingtonbeach.zoom.us/j/97154130528. Those utilizing computer devices to request to speak may select the “Raise Hand” feature in the Webinar Controls section. Attendees entering the Webinar and requesting to speak by phone can enter *9 to enable the “Raise Hand” feature, followed by the *6 prompt that unmutes their handheld device microphone. Once the Mayor opens Public Comments, in-person attendees will be called to speak first. Speakers attending via Zoom will be provided a 15- minute window to raise their hands, and will be prompted to speak when the City Clerk announces their name or the last three digits of their phone number. All speakers are encouraged, but not required to identify themselves by name. Each individual may have up to 3 minutes to speak, but the Mayor, at her discretion, may reduce the time allowance if warranted by the volume of speakers. The Public Comment process will only be active during designated portions of the agenda (Public Comments and/or Public Hearing). After a virtual speaker concludes their comment, their microphone will be muted but they may remain in Webinar attendance for the duration of the meeting. 1 Members of the public unable to personally participate in the meeting but interested in communicating with the City Council on agenda-related items are encouraged to submit a written (supplemental) communication via email at SupplementalComm@Surfcity-hb.org, or City.Council@surfcity-hb.org. Supplemental Communications are public record, and if received by 2:00 PM on Tuesday, September 21, 2021, will be distributed to the City Council prior to consideration of agenda-related items, posted to the City website, and announced, but not read, at the meeting. Supplemental Communications received following the 2:00 PM deadline will be incorporated into the administrative record the following day. MEETING ASSISTANCE NOTICE: In accordance with the Americans with Disabilities Act, services are available to members of our community who require special assistance to participate in public meetings. If you require special assistance, 48-hour prior notification will enable the City to make reasonable arrangements for an assisted listening device (ALD) for the hearing impaired, American Sign Language interpreters, a reader during the meeting and/or large print agendas. Please contact the City Clerk's Office at (714) 536-5227 for more information. 2 AGENDA September 21, 2021City Council/Public Financing Authority 5:00 PM - COUNCIL CHAMBERS CALL TO ORDER ROLL CALL Peterson, Bolton, Delgleize, Carr, Posey, Moser, Kalmick ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS PERTAINING TO CLOSED SESSION ITEMS (3 Minute Time Limit) - At approximately 5:00 PM, individuals wishing to provide a comment on item(s) scheduled for Closed Session may do so either in person by filling out a Request to Speak form, via computer through Zoom Webinar ID 971 5413 0528, or Zoom Webinar by phone by calling (669) 900-6833 (see agenda cover sheet for request to speak instructions). Zoom Webinar participants wishing to speak should “raise their hands,” and will be prompted to speak when the Clerk announces their name or the last three digits of their phone number. All speakers are encouraged, but not required to identify themselves by name. Speakers providing comments in person will be called to speak first, and each speaker may have up to 3 minutes unless the volume of speakers warrants reducing the time allowance. RECESS TO CLOSED SESSION CLOSED SESSION ANNOUNCEMENT(S) 21-6851.Mayor Carr to Announce: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated labor negotiators: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager , who will be participating in today's Closed Session discussions regarding labor negotiations with: Huntington Beach Firefighters' Association (HBFA), Fire Management Association (FMA), Police Management Association (PMA), Marine Safety Management Association (MSMA), Management Employees' Organization (MEO) and Huntington Beach Municipal Teamster (HBMT) CLOSED SESSION 21-6842.CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section 54957.6.) Agency designated representatives: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager. Employee Page 1 of 8 3 AGENDA September 21, 2021City Council/Public Financing Authority Organizations: Huntington Beach Firefighters’ Association (HBFA), Fire Management Association (FMA), Police Management Association (PMA), Marine Safety Management Association (MSMA), Management Employees' Organization (MEO) and Huntington Beach Municipal Teamsters (HBMT) 6:00 PM – COUNCIL CHAMBERS RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING ROLL CALL Peterson, Bolton, Delgleize, Carr, Posey, Moser, Kalmick PLEDGE OF ALLEGIANCE INVOCATION In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. 21-5543.Lachelle Carrozza of the Seaside Community Church and member of the Greater Huntington Beach Interfaith Council CLOSED SESSION REPORT BY CITY ATTORNEY AWARDS AND PRESENTATIONS 21-6404.Mayor Carr to proclaim September as National Suicide Prevention Month and present proclamation to Be Well HB 21-6245.Mayor Carr to honor Friends of the Library for their 50th Anniversary and appreciation for their long-standing support the organization has given throughout the years ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS (3 Minute Time Limit) - At approximately 6:00 PM, individuals wishing to provide a comment on agendized or non-agendized items may do so either in person by filling out a Request to Speak form, via computer through Zoom Webinar ID 971 5413 0528, or Zoom Webinar by phone by calling (669) 900-6833). Zoom Webinar participants wishing to speak will be provided a 15-minute window to “raise their hands,” and prompted to speak when the Clerk announces Page 2 of 8 4 AGENDA September 21, 2021City Council/Public Financing Authority their name or the last three digits of their phone number. All speakers are encouraged, but not required to identify themselves by name. Speakers providing comments in person will be called to speak first, and each speaker may have up to 3 minutes unless the volume of speakers warrants reducing the time allowance. COUNCIL COMMITTEE - APPOINTMENTS - LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES CITY MANAGER'S REPORT 21-6886.Capital Improvement Program Updates 21-6997.Orange County Housing Finance Trust Update CITY CLERK'S REPORT 21-6868.City Clerk to Announce National Voter Registration Day - Tuesday, September 28, 2021 CONSENT CALENDAR 21-6679.Approve and Adopt Minutes Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated September 7, 2021 as written and on file in the office of the City Clerk . Recommended Action: 21-66310.Approve Sole Source Procurement Request with Hadronex Inc., dba SmartCover Systems, for Sanitary Sewer System Manhole SmartCovers Approve Sole Source Procurement Request with Hadronex Inc., dba Smartcover System , for the purchase of SmartCovers. Recommended Action: 21-68111.Approve and authorize execution of four Professional Services Contracts for On-Call Plan Check Services with CSG Consultants, West Coast Code Consultants, True North Compliance, and The Code Group, Inc. dba VCA Code A) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Recommended Action: Page 3 of 8 5 AGENDA September 21, 2021City Council/Public Financing Authority Services Contract Between the City of Huntington Beach and CSG Consultants, Inc. for On-Call Building Division Plan Review Services;” and, B) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and West Cost Code Consultants, Inc. for On-Call Building Division Plan Review Services;” and, C) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and True North Compliance Services, Inc. for On-Call Building Division Plan Review Services;” and, D) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and The Code Group, Inc. dba VCA Code for On-Call Building Division Plan Review Services.” 21-63812.Approve, accept and authorize execution of a Grant Agreement for the Office of Traffic Safety (OTS) Selective Traffic Enforcement Program (STEP) Pedestrian and Bicycle Safety grant; and approve appropriation and expenditure of funds by the Chief of Police A) Approve and accept the “Selective Traffic Enforcement Program “ and “Pedestrian and Bicycle Safety” grant agreements between Office of Traffic Safety (OTS) and the City of Huntington Beach for $788,000.00 and $42,795.00; and, B) Authorize the Chief of Police to execute the grant agreement with OTS; and, C) Approve appropriations and estimated revenue source in the amount of $788,000.00 and $42,795.00; and, D) Establish a separate business unit for this funding and authorize the Chief of Police to expend up to a total of $788,000.00 and $42,795.00 plus accrued interest on the “Selective Traffic Enforcement Program” (STEP) grant and “Pedestrian and Bicycle Safety” grant. Recommended Action: 21-65713.Approve and authorize execution of a Professional Services Contract to provide Professional Engineering and Construction Phase Services for the Heil Avenue Stormwater Pump Station Project, CC-1293, with AECOM Technical Services, Inc. in the amount of $200,000 Recommended Action: Page 4 of 8 6 AGENDA September 21, 2021City Council/Public Financing Authority Approve and authorize the Mayor and City Clerk to execute a “Professional Services Contract Between the City of Huntington Beach and AECOM Technical Services, Inc., for Construction Phase Services for Heil Avenue Stormwater Pump Station, CC-1293.” 21-69314.Approve and authorize execution of the License Agreement by and between the City of Huntington Beach and Bolsa Chica Conservancy relating to network connectivity between City property and the Bolsa Chica Wetlands Interpretative Center Approve and authorize the Mayor and City Clerk to execute “License Agreement By and Between the City of Huntington Beach and Bolsa Chica Conservancy.” Recommended Action: 21-67915.Adopt Ordinance No. 4222 amending Chapter 8.40 of the Huntington Beach Municipal Code (HBMC) titled Noise Control relating to the control of unnecessary, excessive, and annoying sounds and protecting noise-sensitive land uses, ensuring land use/noise compatibility, reducing noise from mobile sources, and mitigating noise from construction, maintenance, and other sources - Approved for Introduction 9/7/2021 - Vote: 7-0 Adopt Ordinance No. 4222, “An Ordinance of the City of Huntington Beach Amending Chapter 8.40 of the Huntington Beach Municipal Code Relating to Noise Control .” Recommended Action: PUBLIC HEARING Individuals wishing to provide a comment on items scheduled for public hearing may do so either in person by filling out a Request to Speak form, via computer through Zoom Webinar ID 971 5413 0528, or Zoom Webinar by phone by calling (669) 900-6833). Zoom Webinar participants wishing to speak are encouraged to “raise their hands,” and will be prompted to speak when the Clerk announces their name or the last three digits of their phone number. All speakers are encouraged, but not required to identify themselves by name. Speakers providing comments in person will be called to speak first, and each speaker may have up to 3 minutes unless the volume of speakers warrants reducing the time allowance. 21-61516.Approve Zoning Text Amendment (ZTA) No. 19-004 by approving for introduction Ordinance No. 4235 amending Section 230.26 (Affordable Housing) of the Zoning and Subdivision Ordinance and adopt Resolution No. 2021-50 updating the affordable housing in-lieu fee schedule and methodology Page 5 of 8 7 AGENDA September 21, 2021City Council/Public Financing Authority PLANNING COMMISSION AND STAFF RECOMMENDATION: A) Find that Zoning Text Amendment (ZTA) No. 19-004 is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (General Rule) of the CEQA Guidelines because there is no potential for the project to have a significant effect on the environment (Attachment No. 1); and, B) Approve ZTA No. 19-004 and approve for introduction Ordinance No. 4235 “An Ordinance of the City Council of the City of Huntington Beach Amending Section 230.26 of the Huntington Beach Zoning and Subdivision Ordinance Titled Affordable Housing” (Attachment No. 2); and, C) Adopt Resolution No. 2021-50, “A Resolution of the City Council of the City of Huntington Beach Adopting an Affordable Housing In-Lieu Fee Pursuant to Ordinance No. 4235, and Repealing Resolution Nos. 2007-71, 2008-43, and All Supplemental Resolutions Thereto .” (Attachment No. 4). Recommended Action: 21-67417.Public Hearing to consider acceptance of the Fiscal Year 2020-2021 Consolidated Annual Performance & Evaluation Report (CAPER) A) Conduct the Public Hearing to hear comments and approve the FY 2020-2021 Consolidated Annual Performance and Evaluation Report (CAPER) for Community Development Block Grant (CDBG), CARES Act CDBG Coronavirus (CDBG-CV), and HOME Investment Partnerships Act (HOME) Federal funds; and, B) Authorize the City Manager to transmit this report to the United States Department of Housing and Urban Development (HUD) by September 28, 2021. Recommended Action: ADMINISTRATIVE ITEMS 21-67718.Consider adopting Resolution No. 2021-55 supporting efforts to host surfing, skateboarding, BMX events for the LA 2028 Olympics Adopt Resolution No. 2021-55, “A Resolution of the City Council of the City of Huntington Beach Supporting the City’s Efforts in Securing Future Sporting Events for the LA 2028 Olympics.” Recommended Action: 21-69219.City Council to Consider Directing Staff to Draft an Amendment to the Short Term Rental Ordinance and an Extension of the De-Listing Deadline Page 6 of 8 8 AGENDA September 21, 2021City Council/Public Financing Authority A) Direct staff to enforce the ordinance as adopted and cause the various platforms to de-list unpermitted short term rentals by October 1, 2021; or B) Direct staff to bring forward an amended ordinance that creates a zone structure within the Coastal Overlay District that will limit the number of short term rentals that can be operated within each zone , and hold off on causing the various rental platforms to de-list until the City Council considers an amended ordinance. Recommended Action: COUNCILMEMBER ITEMS 21-70020.Submitted by Councilmember Posey - Establish a “Design-Build-Finance-Operate-Maintain” (DBFOM) Subcommittee I recommend that the City Council authorize the establishment of a 3-member DBFOM City Council Ad-Hoc Subcommittee. Recommended Action: 21-70121.Submitted by Councilmember Kalmick - Conducting Neighborhood-Focused Town Halls I recommend that the City Council direct the City Manager to develop a neighborhood-focused town hall program for all geographic parts of Huntington Beach to be deployed later this year. Recommended Action: 21-70322.Submitted by Councilmember Moser - Development of an Arterial Beautification Pilot Project I recommend that the City Council vote to direct staff to develop an arterial beautification pilot program project in Huntington Beach. Recommended Action: 21-70423.Submitted by Councilmember Moser - Direction to Assess Enhanced Navigation Center Services that can be deployed and which will connect to our Project Zero Initiative I recommend the City Council direct staff to engage an assessment of the current operations of the Navigation Center, and that staff return to the City Council with an update of improvements that can be made which link to our Project Zero efforts. Recommended Action: COUNCILMEMBER COMMENTS (Not Agendized) Page 7 of 8 9 AGENDA September 21, 2021City Council/Public Financing Authority ADJOURNMENT The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Tuesday, October 5, 2021, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov Page 8 of 8 10 City of Huntington Beach File #:21-685 MEETING DATE:9/21/2021 Mayor Carr to Announce: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated labor negotiators: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager , who will be participating in today's Closed Session discussions regarding labor negotiations with: Huntington Beach Firefighters' Association (HBFA), Fire Management Association (FMA), Police Management Association (PMA), Marine Safety Management Association (MSMA), Management Employees' Organization (MEO) and Huntington Beach Municipal Teamster (HBMT) City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™11 City of Huntington Beach File #:21-684 MEETING DATE:9/21/2021 CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section 54957.6.) Agency designated representatives: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager. Employee Organizations: Huntington Beach Firefighters’ Association (HBFA), Fire Management Association (FMA), Police Management Association (PMA), Marine Safety Management Association (MSMA), Management Employees' Organization (MEO) and Huntington Beach Municipal Teamsters (HBMT) City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™12 City of Huntington Beach File #:21-554 MEETING DATE:9/21/2021 Lachelle Carrozza of the Seaside Community Church and member of the Greater Huntington Beach Interfaith Council City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™13 City of Huntington Beach File #:21-640 MEETING DATE:9/21/2021 Mayor Carr to proclaim September as National Suicide Prevention Month and present proclamation to Be Well HB City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™14 City of Huntington Beach File #:21-624 MEETING DATE:9/21/2021 Mayor Carr to honor Friends of the Library for their 50th Anniversary and appreciation for their long-standing support the organization has given throughout the years City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™15 City of Huntington Beach File #:21-688 MEETING DATE:9/21/2021 Capital Improvement Program Updates City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™16 City of Huntington Beach File #:21-699 MEETING DATE:9/21/2021 Orange County Housing Finance Trust Update City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™17 City of Huntington Beach File #:21-686 MEETING DATE:9/21/2021 City Clerk to Announce National Voter Registration Day - Tuesday, September 28, 2021 City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™18 Online voter registration for Orange County residents is available at www.ocvote.com. In California, individuals at least 16 years of age that meet eligibility requirements may pre-register, and upon their 18th birthday, become eligible to vote. For more information on how to pre-register, visit https://www.sos.ca.gov/elect ions/pre-register-16-vote-18. 19 City of Huntington Beach File #:21-667 MEETING DATE:9/21/2021 REQUEST FOR COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Robin Estanislau, CMC, City Clerk PREPARED BY:Robin Estanislau, CMC, City Clerk Subject: Approve and Adopt Minutes Statement of Issue: The City Council/Public Financing Authority regular meeting minutes of September 7, 2021, require review and approval. Financial Impact: None. Recommended Action: Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated September 7, 2021 as written and on file in the office of the City Clerk . Alternative Action(s): Do not approve and/or request revision(s). Analysis: None. Environmental Status: Non-Applicable. Strategic Plan Goal: Non-Applicable - Administrative Item Attachment(s): 1. September 7, 2021 CC/PFA regular meeting minutes City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™20 Minutes City Council/Public Financing Authority City of Huntington Beach Tuesday, September 7, 2021 4:00 PM - Council Chambers 6:00 PM - Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 Or Virtual via Zoom webinar A video recording of the 4:00 PM and 6:00 PM portions of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 4:00 PM — COUNCIL CHAMBERS CALLED TO ORDER — 4:00 PM ROLL CALL Present: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick Absent: None City Clerk Robin Estanislau requested permission to be absent pursuant to City Charter Section 310 (a). ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Study Session #1 (21-637) 1) PowerPoint presentation entitled 21 Main Street RFQ submitted by Ursula Luna- Reynosa, Director of Community Development. 2) PowerPoint Presentation entitled Ruby’s Diner Huntington Beach Proposal submitted by Ursula Luna-Reynosa, Director of Community Development. 3) PowerPoint Presentation entitled Huntington’s on the Pier submitted by Ursula Luna-Reynosa, Director of Community Development PUBLIC COMMENTS PERTAINING TO STUDY SESSION / CLOSED SESSION ITEMS — None STUDY SESSION 1. 21-637 21 Main Street RFQ - Pier Concession Opportunity Director of Community Development Ursula Luna-Reynosa presented a PowerPoint communication entitled 21 Main Street RFQ with slides titled 21 Main Street - Background; 21 Main Street - RFQ; Let's Go Fishing & Surf City Snack Bar LLC (2); Ruby's Hospitality Group, LLC (2); Surf City Partners, LLC (2); EDC Recommendation; ENA; Presentations; and Questions? 21 Council/PFA Regular Minutes September 7, 2021 Page 2 of 25 Marian Johnson, owner of Let's Go Fishing and Surf City Snack Bar, LLC reviewed her 29-year history of service to the City, and expressed her frustration at the lack of support from City staff who originally stated their intention was to help make the business successful. Ms. Johnson stated the business has operated with integrity and honesty since 1992, and when she asked for details several years ago about the complaints City Manager Chi referenced, no details were ever provided. She further added she has proposed paying sixteen percent (16%) back to the City, and doesn't understand the City's apparent effort to replace a successful family business. Joe Micatrotto from Ruby's Hospitality Group described some of the other food service businesses they have brought to the area during the past 40 years in the Hospitality industry to document their ability to be successful with this project. Chris Beynon with Surf City Partners presented a PowerPoint communication entitled Huntington's on the Pier with historical photos (11), and slides titled Understanding and respect of history and context; Supports policy direction of the City (2); Family-Friendly Dining (2), Proactive Support of HB's Non-Profit Fundraisers; Weather Protected Comfort; Daily Sunset Views!; Carts, Fishing Pole Rentals; Sustainability, Significant Investment in City-Owned Facility Improvements and Maintenance; Financially Sound; Strong Revenue Generation; and Talented, Committed and Long-time Based Local Team. Director Luna-Reynosa summarized staff effort to provide Council with comparable information on the three potential vendors for this Study Session. Council Member Peterson and City Manager Chi discussed the issues presented to Let's Go Fishing several years ago such as signage and advertising which City Manager Chi confirmed were addressed by Ms. Johnson. Council Member Posey and Director Luna-Reynosa discussed alcohol sales cutoff times and how the percentage of revenue derived from alcohol sales is determined. Council Member Bolton and Keith Bohr of Surf City Partners discussed permitting concerns related to the Coastal Commission and Health Department. Mr. Bohr admitted he did not consult his restaurant operating team members when initially calculating the percent of alcohol sales, and in retrospect the number should be more in the 22-25% range rather than the 40% used in the presentation. Mayor Pro Tem Delgleize and Jeff Bergsma of Surf City Partners discussed their experience with meeting permitting requirements, including his involvement through the years in setting up 19 restaurants on Main Street. Mayor Carr and Jeff Bergsma discussed the permitting timeline and the expectation that the Coastal Commission process could take six months, and Mr. Bergsma stated that the current tenant could remain in the premises during that time. Director Luna-Reynosa confirmed that there are building code requirements pertaining to restrooms in the building across the Pier, which was not part of the original RFQ. In addition to County Health Department requirements related to food service and the Coastal Commission permitting process, which all will impact permit processing time. 22 Council/PFA Regular Minutes September 7, 2021 Page 3 of 25 Council Member Moser and Director Luna-Reynosa discussed potential risks to the City for one proposal versus another, as well as the fact that other entities may have shown interest in the project if it had included the second building from the beginning. Council Member Kalmick and Director Luna-Reynosa discussed Coastal Commission jurisdiction details in trying to understand a realistic timeframe, and Director Luna-Reynosa stated that without a specific site plan, that would be difficult to determine. Director Luna-Reynosa advised the whole process would include the Planning Commission, and the California Coastal Commission which may have issues with any parking concepts. RECESSED TO CLOSED SESSION — 4:56 PM A motion was made by Posey, second by Moser, to recess to Closed Session for Items 3 – 5. With no objections the motion passed. CLOSED SESSION ANNOUNCEMENT(S) 2. 21-650 Mayor Carr Announced: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated labor negotiators: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager, who will be participating in today’s Closed Session discussions regarding labor negotiations with: Huntington Beach Firefighters’ Association (HBFA), Fire Management Association (FMA), Police Management Association (PMA), Marine Safety Management Association (MSMA), Management Employees’ Organization (MEO) and Huntington Beach Municipal Teamster (HBMT) CLOSED SESSION 3. 21-599 CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION. (Gov. Code section 54956.9(d)(1).) Name of case: Kennedy Commission, et al. v. City of Huntington Beach; OCSC Case No.: 30-2015-00801675. 4. 21-601 CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION. (Gov. Code section 54956.9(d)(1).) Name of case: City of Huntington Beach v. State of California (SB35, et al); OCSC Case No. 30-2019-01044945. 5. 21-646 CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section 54957.6.) Agency designated representatives: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager. Employee Organizations: Huntington Beach Firefighters’ Association (HBFA), Fire Management Association (FMA), Police Management Association (PMA), Marine Safety Management Association (MSMA), Management Employees’ Organization (MEO) and Huntington Beach Municipal Teamsters (HBMT). 6:00 PM - COUNCIL CHAMBERS RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING — 6:05 PM 23 Council/PFA Regular Minutes September 7, 2021 Page 4 of 25 ROLL CALL Present: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick Absent: None City Clerk Robin Estanislau requested permission to be absent pursuant to City Charter Section 310 (a). PLEDGE OF ALLEGIANCE — Led by Councilmember Posey INVOCATION In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. 6. 21-553 Kelly Frankiewicz of Leisure World Community Church, Seal Beach and member of the Greater Huntington Beach Interfaith Council CLOSED SESSION REPORT BY CITY ATTORNEY City Attorney Michael Gates reported that in Closed Session the City Council voted unanimously to file an Appeal to the recent Attorney’s Fees Award and the improper and erroneous entry of Judgement by the State Court, after the case was already dismissed by the Kennedy Commission: Kennedy Commission, et al. v. City of Huntington Beach; OCSC Case No.: 30-2015-00801675. AWARDS AND PRESENTATIONS 7. 21-602 Mayor Carr called on Victoria Alberty for the Adoptable Pet of the Month Ms. Alberty introduced Ms. Emory, who was rescued in Alabama with her puppy, and S.A.F.E. Rescue Team founder, Markelle, who explained that Emory's puppy was adopted in Alabama, but Ms. Emory, approximately one year old, was originally scheduled for euthanasia. Due to the actions of the locals who discovered Ms. Emory while visiting in Alabama, she was transported to Huntington Beach. More information on Ms. Emory, as well as many other available foster dogs, can be found at https://saferescueteam.org. 8. 21-417 Mayor Carr called on members of the Assistance League of Huntington Beach to present a belated 70th anniversary commendation to the group as it now celebrates its 71st anniversary of providing service in Huntington Beach Mayor Carr announced that the Assistance League was started exactly 71 years ago, and the Huntington Beach Assistance League is composed of over 350 volunteers providing over 70,000 hours of service annually to improve the quality of life for children and adults in Huntington Beach, Fountain Valley and Westminster. Ms. Maggie expressed appreciation for the acknowledgement and thanked the volunteers and community members for their support throughout the years. 9. 21-623 Mayor Carr proclaimed September 15 to October 15 as National Hispanic Heritage Month and present proclamation to Huntington Beach native, Gloria Alvarez 24 Council/PFA Regular Minutes September 7, 2021 Page 5 of 25 Mayor Carr described National Hispanic Heritage Month as an opportunity to celebrate the history, culture and contributions of citizens' whose ancestors come from Spain, Mexico, the Caribbean and Central and South America. Ms. Alvarez, along with her cousins and an aunt, gratefully acknowledged the recognition of their family's farming and business activities in Huntington Beach for over 100 years. Mayor Carr also announced that videographer Matt Liffreing has produced three vignettes on local Hispanic history that will be showing on HBTV3 during Hispanic Heritage Month. 10. 21-491 Mayor Carr proclaimed September 20 as California Surfing Day and presented a proclamation to Don Ramsey Mayor Carr noted that California Surfing Day started with the local surf community rallying in 2018 in Sacramento to receive unanimous State Senate approval. Don Ramsey, Jericho Poppler, and Councilmember Posey recounted the experience of being a part of that group as Don and Jericho accepted the proclamation. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, Assistant City Clerk Patty Esparza announced supplemental communications that were received by her office following distribution of the Council Agenda packet: City Manager’s Report #12 (21-651) PowerPoint Communication titled Fiscal Year 2021/2022 Citywide Mobility Project submitted by City Manager Oliver Chi. Consent Calendar #16 (21-557) One (1) email communication received regarding the Huntington Beach Downtown Business Improvement District (HBBID) proposed Budget for Fiscal Year (FY) 2021- 2022. #20 (21-619) One (1) email communication received regarding the Extended Temporary Closure of the Second Block of Main Street. #30 (21-653) Ten (10) email communications received regarding an Exclusive Negotiating Agreement (ENA) with Ruby's Hospitality Group, LLC for 21 Main Street at the Huntington Beach Pier. Administrative Items #32 (21-588) PowerPoint Communication titled American Rescue Plan Act (ARPA) Spending Plan Review and Allocation submitted by City Manager Oliver Chi. #33 (21-625) PowerPoint communication titled Pier Plaza Arts and Crafts Faire submitted by Director of Community and Library Services Chris Slama. Ordinances for Introduction #35 (21-112) Three (3) email communications regarding Introduction of Ordinance No. 4222 amending Chapter 8.40 of the Huntington Beach Municipal Code (HBMC) titled Noise Control. Councilmember Items #36 (21-664) One (1) email communication received regarding a Proposal for a Public Memorial Honoring Rick "Rockin' Fig" Fignetti. 25 Council/PFA Regular Minutes September 7, 2021 Page 6 of 25 #37 (21-659) Four (4) email communications received regarding a Feasibility Study regarding the possible relinquishment of Pacific Coast Highway (PCH). PUBLIC COMMENTS (2 Minute Time Limit) — 40 In-Person and 6 Call-In Speakers The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Ralph Bauer, a former City Council and School Board member, and long-time resident of Huntington Beach, was called to speak and stated his reasons for supporting the City Council and his opposition to the Council Recall effort. (01:38:57) Shirley Dettloff, a former Mayor and 57-year resident of Huntington Beach, was called to speak and stated her reasons for supporting the City Council and her opposition to the Council Recall effort. (01:40:40) Kay Goddard, a resident of Huntington Beach for over 30 years, was called to speak and stated her opposition to the Council Recall effort and suggested the Council recall group focus their efforts on promoting their candidate(s) of choice for the regular November 2022 election process. (01:42:37) Gigi Jackson, a retired educator and resident homeowner of Huntington Beach, was called to speak and shared her reasons for opposing the Council Recall effort. (01:44:32) Galen Pickett was called to speak and shared his personal reasons for supporting the City Council and his opposition to the Council Recall effort. (01:47:22) Laura Sire, a nearly 60-year resident of Huntington Beach, was called to speak and stated her support for the City Council and opposition to the Council Recall effort. (01:49:36) Karen Carroll, a long-time resident of Huntington Beach, was called to speak and shared her support for diligently reviewing the recorded actions of Councilmembers to verify whether the Council recall effort is speaking truth. (01:51:58) Marian Johnson, owner of Let's Go Fishing on HB Pier, was called to speak and stated her dismay at apparently being replaced by "big money" entities, and shared some of her memorable experiences from running a successful, 29-year business on the most iconic Huntington Beach Pier. (01:53:30) Tony Zarkades, representing Huntington Beach American Legion Post 133, was called to speak and stated support for Councilmember Item #39, in support of the Orange County Veterans Cemetery in the City of Anaheim. (01:55:42) Tim Geddes, a long-time resident of southeast Huntington Beach, was called to speak and shared his reasons for opposing the Council Recall effort. (01:57:55) Jean Nagy, a resident of Huntington Beach for over 29 years, was called to speak and shared her appreciation for the Council's efforts to improve the parks in Huntington Beach, especially the support of Mayor Pro Tem Delgleize. (01:59:52) 26 Council/PFA Regular Minutes September 7, 2021 Page 7 of 25 Brian Cleugh, a resident of Huntington Beach, was called to speak and shared information to support his request that Councilmembers do the right thing for the soccer playing kids of Huntington Beach when they make the decision of what should be done with the Gisler Middle School site. (02:02:08) Mary LeBoeuf, a 25-year resident of Huntington Beach, was called to speak and reviewed details of the 2003 agreement between the City of Huntington Beach and the Waterfront Condominiums located adjacent to the Federally protected wetlands at the corner of Beach Boulevard and Pacific View Avenue which stipulates the Condominium's responsibility for up to $30,000 annually for maintenance. She brought this item to the Council a year ago, but nothing has changed, and not one City staff member has replied to subsequent inquiries, and therefore she believes the taxpayers continue to pay for any maintenance performed at that site. (02:03:54) Cathey Ryder, a resident of Huntington Beach since 1985 and long-time volunteer for youth activities, fundraising, and election efforts, was called to speak and stated her family's support for opposing the Council Recall effort and suggested that group focus on promoting their candidate(s) of choice for the regular November 2022 election process. (02:05:50) Juana Mueller was called to speak and stated her support for the Police and Fire Departments, and the City Council. (02:07:33) Gary Wilkenson, a 35-year resident of Huntington Beach, was called to speak and stated his appreciation for Councilmembers service, and thanked City staff for going above and beyond at 5:00 PM on a Friday last October so his daughter could be married. (02:08:52) Bill Cook, United States Marine Corps, Vietnam Veteran, Chairman of the Orange County Veterans Memorial Park Foundation, and Veterans Alliance of Orange County (VALOR) Board Member, was called to speak and stated support for Councilmember Item #39, in support of the Orange County Veterans Cemetery in the City of Anaheim. (02:11:14) Mike McDonough, Board President, Plaza Almeria, was called to speak and stated support for extending the closure of the Second and Third Blocks of Main Street to vehicular traffic. (02:12:56) Joe Micatrotto, representing Ruby's Hospitality Group, was called to speak and briefly outlined the Group's qualifications and experience as the best operators for the lease agreement for 21 Main Street at Huntington Beach Pier. (02:14:37) Pat Goodman, a long-time resident and homeowner in Huntington Beach, was called to speak and stated her opposition to the Council Recall effort. (02:16:12) Allen Korneff, Trinidad Homeowners Association Board member speaking only for himself, was called to speak and described the desperately needed street repairs to address small vehicle/bicycle/motorcycle safety hazards on Saybrook Lane and Edinger Avenue, and asked that Council do their part to ensure the issue is addressed as soon as possible. (02:18:54) Connie Boardman was called to speak and thanked Councilmembers for serving the community, stated her opposition to the Council Recall effort, and suggested they focus their efforts on promoting their candidate(s) of choice for the regular November 2022 election. (02:21:12) 27 Council/PFA Regular Minutes September 7, 2021 Page 8 of 25 Patrick Collins, a resident of Huntington Beach since 2007, was called to speak and shared his opinion that when the City Council membership is changed, whether through the Recall effort or in the November 2022 election, the housing program agreements will be reversed. (02:23:20) Paul Horgan, a resident of Huntington Beach, was called to speak, thanked the Councilmembers for serving the community, and stated his opposition to the Council Recall effort. (02:24:35) Melody Steelman, a Huntington Beach homeowner since 1992, was called to speak and stated her opposition to the City's purchase of the Elan property without a vote of the residents, and her support for the Council Recall effort. (02:26:18) John Tillotson, a resident of Huntington beach for over 52 years and owner of property on the West side of the Third Block of Main Street, was called to speak and asked for Council's support to find a permanent way to allow for expanded outdoor dining and address the current street barrier which psychologically tells people to "go back". (02:28:36) Jim Hall, owner of Surf City Ale House, 301 Main Street, was called to speak and stated his support for Mr. Tillotson's comments. Mr. Hall added that foot traffic from Second Block to Third Block is down by 50 percent (50%) and he asked that Third Block be treated the same as Second Block regarding options to encourage patrons. (02:31:00) Lisa Hollis, a Registered Nurse for 25 years, was called to speak and shared her opinions on COVID-19 mandates. (02:32:38) Barry Kielmister, a 33-year resident of Huntington Beach, was called to speak and stated his opposition to the Council Recall effort. (02:34:55) Amory Hansen, Member of the Historic Resources Board and Candidate for City Council in 2022, was called to speak and stated his opinion that the Historic Resources Board should be included in Councilmember Item #36 regarding developing a proposal for a public memorial honoring Rick "Rockin' Fig" Fignetti. Mr. Hansen also stated his opposition to Consent Calendar Item #20 regarding extending the temporary closure of the Second Block of Main Street to vehicular traffic. (02:36:32) Nader Hanna was called to speak and shared his opinions in support of the Council Recall effort. (02:38:11) Julie Barksdale, a resident of Huntington Beach, was called to speak and shared a very recent incident where her son and his friend were crossing Lake Street at Utica Avenue and the friend was severely injured by a car that hit him. Ms. Barksdale asked for Council's support to ensure that a crosswalk and "25 MPH speed limit when children are present" sign be installed at that intersection for the safety of the students who pass that way at least two times each weekday. (02:41:19) Pano Frousiakis, Candidate for City Council in 2022, and proponent of Save Surf City Recall, was called to speak and shared his opinion and opposition to Ordinances for Introduction #35 regarding introduction of Ordinance No. 4222 amending the Huntington Beach Municipal Code titled Noise Control, unless it is amended to clearly state freedom of speech will be exempt from requiring a permit. Mr. Frousiakis also stated his opposition to Councilmember Items #37 to conduct a feasibility analysis regarding possible relinquishment of Pacific Coast Highway (PCH) to improve vehicular and pedestrian safety. (02:43:36) 28 Council/PFA Regular Minutes September 7, 2021 Page 9 of 25 Kenney Bennett, long-time Huntington Beach resident and business owner, was called to speak and welcomed Councilmember Bolton. Mr. Bennett also asked that Council consider pushing back the October 1, 2021, Un-hosted Short-Term Rental delisting ordinance to the end of the year to allow the Steering Committee more time to discuss issues. (02:45:43) Ann Palmer, 30-year resident of Huntington Beach and parent volunteer, was called to speak and shared that a Californians for Community Planning Initiative to protect local control for zoning, land use and development was filed and is expected to be placed on the November 2022 ballot, and asked Council to pass a resolution in support of the initiative. (02:47:14) Mark Dixon, a 50-year resident of Huntington Beach, was called to speak and stated his support for current Councilmembers and his opposition to the Council Recall effort. (02:49:28) Ariane was called to speak and shared her opposition to the appointment of Councilmember Bolton and support for the Council Recall effort. (02:51:46) Jignesh, born and raised in Huntington Beach, was called to speak and stated his opposition to the appointment of Councilmember Bolton. (02:54:06) Chris Kluwe, an 11-year resident of Huntington Beach, was called to speak and stated his support for the local American Youth Soccer Organization (AYSO) need to keep open playing fields with lights in Huntington Beach. (02:56:25) Kathryn Levassiur, a long-time resident of Huntington Beach and supporter of the Huntington Beach Short-Term Rental Alliance, was called to speak and asked that the same rules apply to both Sunset Beach and Huntington Beach. Ms. Levassiur also asked that Council extend the October 1, 2021, permit deadline to the end of the year. (02:57:49) Valentina Bankhead, a resident of Huntington Beach, was called to speak and stated her support for the Council Recall effort. (03:00:04) Caller Steve Shepherd was invited to speak and stated his support for: Consent Calendar Item #20 to extend temporary closure of the Second Block of Main Street to vehicular traffic; Consent Calendar Item #23 regarding a professional service contract for the City's mobility plan; and Councilmember Items #37 to conduct a feasibility analysis regarding the possible relinquishment of Pacific Coast Highway (PCH) to improve vehicle and pedestrian safety. (03:02:39) Caller 910, an anonymous Huntington Beach resident, was invited to speak and stated support for: Ordinances for Introduction Item #35 regarding amending the Huntington Beach Municipal Code (HBMC) titled Noise Control; Councilmember Items #39 in support of the Orange County Veterans’ Cemetery in the City of Anaheim; more archeological dig sites in all USA cities; and a drive-through dinosaur and/or insect exhibit. (03:04:53) Caller Dan McDonald was invited to speak and stated his support for the Californians for Community Planning Initiative to bring land use, zoning and development back to the local level, and the AYSO volunteer coaches requests to keep open playing fields with lights in Huntington Beach. (03:07:07) 29 Council/PFA Regular Minutes September 7, 2021 Page 10 of 25 Caller Mark Sheldon, a 30-year resident of Huntington Beach, was invited to speak, welcomed Councilmember Bolton and thanked all Councilmembers for serving the City. (03:09:17) Caller Bethany Webb, a 40+-year resident and Huntington Beach homeowner and mother, was invited to speak and welcomed Councilmember Bolton, and stated her opposition to the Council Recall effort. Ms. Webb also stated support for more crosswalks with "25 MPH when children are present" street signs to improve safety throughout Huntington Beach for school children. (03:11:59) Caller Kelly Miller, President and CEO of Visit Huntington Beach, and Huntington Beach Downtown Business Improvement District (HBDBID) Member, was invited to speak and stated his support for Consent Calendar Item #16 to approve the HBDBID Annual Report and Proposed Budget for Fiscal Year 2021-2022. (03:14:11) COUNCIL COMMITTEE — APPOINTMENTS — LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES Councilmember Kalmick reported meeting with the Huntington Beach Police Officers' Association (HBPOA), attending Southern California Association of Government (SCAG) Energy and Environment Committee, and Emerging Technology Committee meetings, and with Mayor Pro Tem Delgleize attending a Federal Aviation Administration (FAA) meeting on jet noise. Mayor Pro Tem Delgleize reported attending the Federal Aviation Administration (FAA) meeting with Councilmember Kalmick on jet noise. Council Member Posey reported attending a Southern California Association of Government (SCAG) meeting to discuss possibly shifting Sustainable Communities Regional Planning to the Orange County Council of Governments (OCCOG). Councilmember Moser reported participating in the Youth Board interviews with Mayor Carr; attending a Homeless Task Force meeting; Homeless Project Zero Workgroup meetings with Mayor Pro Tem Delgleize and Mayor Carr; and a Huntington Beach Central Park collaborative meeting. She also announced the Humans Relations Task Force Cultural Cinema Showcase opens for virtual screenings from September 17 through September 19, and from September 15 to October 15 HBTV3 will be airing three family-friendly films to celebrate National Hispanic Heritage Month. Council Member Bolton reported meeting with the Huntington Beach Police Officers' Association (HBPOA), and announced her appointment of Janet Michaels to the Finance Commission. Mayor Carr reported attending a meeting of the Communications Committee, participating in the Youth Board interviews, attending meetings of OC Sanitation, the Citizens Academy kick-off, Intergovernmental Relations Committee (IRC), HB Council on Aging, and Visit HB. She also reported meeting with the Huntington Beach Police Officers' Association (HBPOA). 11. 21-514 Appointed Voting Delegate and Alternate for the League of California Cities Annual Conference and Expo - September 22-24, 2021 Mayor Carr proposed Councilmember Moser to serve as voting delegate, and Councilmember Bolton as alternate, for the Friday, September 24th League of California Cities Annual Conference & Expo. 30 Council/PFA Regular Minutes September 7, 2021 Page 11 of 25 A motion was made by Delgleize, second Posey to appoint City Council Member Moser to serve as the voting delegate and City Council Member Bolton as alternate, to represent the City of Huntington Beach at the 2021 League of California Cities Annual Conference & Expo. The General Assembly will be held on Friday, September 24, 2021. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None CITY MANAGER’S REPORT 12. 21-651 City Mobility Projects Update City Manager Chi introduced Public Works Director Sean Crumby who presented a PowerPoint communication entitled FY 2021/22 Citywide Mobility Project Update with slides titled: Current Focus; Utica Bike Boulevard; Delaware Street Bike Lanes; Goldenwest St. Protected Bike Lane; Shipley to Shore Path; Blufftop Park - Beach Path (2); Talbert Channel Multi-Use Trail; Micro- Transit Service - Circuit; and Questions & Comments. Mayor Pro Tem Delgleize expressed her support, especially for the bike rider and pedestrian projects. Councilmember Kalmick and Director Crumby discussed details regarding spacing and protection for Class 4 bicycle lanes. Councilmember Peterson and Director Crumby discussed the bicycle project locations, follow-up review to analyze actual usage, and slightly reducing vehicle traffic lanes in some areas to produce the space for safe bicycle lanes. Councilmember Moser expressed her excitement for these projects which include all types of mobility. She and Director Crumby discussed there will be opportunities for planned community bike rides, especially after the bike lanes are updated and people should feel safer. Mayor Carr and Director Crumby discussed the schedule, with work expected to start in December and anticipated to be completed in the Spring. Unagendized — Assistant City Manager Travis Hopkins provided an Ascon Update PowerPoint Presentation entitled Ascon Landfill Site Update with slides titled: Ascon Landfill Site Update (3) and Ascon Project Information Contacts CONSENT CALENDAR Councilmember Posey pulled Items #16, #19, #20 and #30, Councilmember Kalmick pulled Item #17, and Councilmember Peterson pulled Item #27 for further discussions. Councilmember Peterson stated his abstention for Item #13 because he was absent from that meeting. 13. 21-586 Approved and Adopted Minutes 31 Council/PFA Regular Minutes September 7, 2021 Page 12 of 25 A motion was made by Kalmick, second Delgleize to approve and adopt the City Council/Public Financing Authority regular meeting minutes dated August 3, 2021 as written and on file in the office of the City Clerk. The motion carried by the following vote: AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None ABSTAIN: Peterson 14. 21-643 Received and Filed Update to the 2021 City Council Liaison List — Citizen Boards, Commissions, Committees, and Task Forces A motion was made by Kalmick, second Delgleize to receive and file an update to the 2021 Council Liaison List by approving new appointments for Councilmember Bolton, and reassignments for Councilmembers Kalmick and Moser. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 15. 21-631 Approved appointments and reappointments to the Huntington Beach Youth Board with terms set to expire on May 31, 2022 A motion was made by Kalmick, second Delgleize to, as recommended by City Council Liaisons Carr and Moser, approve the reappointment of the following students to a one-year term on the Huntington Beach Youth Board with terms set to expire on May 31, 2022: Luke Blankenbaker - Huntington Beach High School; Vivian Bui - Huntington Beach High School; Kenady Osborne - Marina High School; and Emma Weston - Edison High School; and, as recommended by City Council Liaisons Carr and Moser, approve the appointment of the following students to a one-year term on the Huntington Beach Youth Board with terms set to expire on May 31, 2022. Acacia Bartel - Marina High School; Faith Ngyuen - Edison High School; Colin Parrott - Huntington Beach High School; Sarah Rizvi - Ocean View High School; and Adam Vo - Edison High School. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 16. 21-557 Approved Huntington Beach Downtown Business Improvement District (HBDBID) Annual Report and Proposed Budget for Fiscal Year (FY) 2021-2022, and Adopted Resolution No. 2021-42 declaring the City’s intention to levy an annual assessment for FY 2021-2022 at a public hearing scheduled for October 5, 2021 Councilmember Posey pulled this item to respectfully ask for the third time for a complete database showing the principal and/or taxpayer for each business with current, complete and accurate contact information. He stated the current lists being used do not match and therefore appear to be incomplete 32 Council/PFA Regular Minutes September 7, 2021 Page 13 of 25 and inaccurate, and therefore this will be the last time he will accept the Annual Report and Proposed Budget, unless the complete database is provided. Mayor Carr invited HBDBID members in the audience an opportunity to respond to Councilmember Posey's comments, and the reply was, "We are good." Mayor Pro Tem Delgleize stated her support and agreement with Councilmember Posey's comments. A motion was made by Posey, second Carr to approve Huntington Beach Downtown Business Improvement District Annual Report and Proposed Budget for FY 2021-2022; and, adopt Resolution No. 2021-42, "A Resolution of the City Council of the City of Huntington Beach Declaring the City's Intention to Levy an Annual Assessment for Fiscal Year 2021-2022 Within the Huntington Beach Downtown Business Improvement District," which sets a public hearing for October 5, 2021; and, authorize the City Manager to sign all necessary documents. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 17. 21-572 Adopted Resolution No. 2021-47 identifying the FY 2021-22 projects to be funded by SB 1: The Road Repair Accountability Act Councilmember Kalmick pulled this item to respond to Public Speaker Mr. Korneff who addressed the conditions on Saybrook Lane and Edinger Avenue. Public Works Director Crumby confirmed that both streets are in need of repairs, and that Saybrook Lane will be paved within the current 2021-22 Fiscal Year (FY), and Edinger Avenue is scheduled for the next (2022-23) FY as it is currently in a bit better condition. (Fiscal Year is July 1 - June 30.) Director Crumby confirmed he will reach out to Mr. Korneff with this information. A motion was made by Kalmick, second Bolton to adopt Resolution No. 2021-47, "A Resolution of the City Council of the City of Huntington Beach Adopting a List of Projects for Fiscal Year 2021-22 Funded By SB1: The Road Repair and Accountability Act." The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 18. ***ITEM #18 OMITTED PRIOR TO AGENDA PUBLICATION*** 19. 21-634 Took positions on legislation pending before the State and Federal Legislature, as recommended by the Intergovernmental Relations Committee (IRC); adopt Resolution No. 2021-49 Councilmember Posey pulled this item to describe Senate Bill 1 which addresses land development in areas that may be impacted by rising sea levels, regardless of whether a municipality already has Flood Control measures in place. 33 Council/PFA Regular Minutes September 7, 2021 Page 14 of 25 A motion was made by Posey, second Delgleize to approve a City position of Oppose Unless Amended on Senate Bill 1 (Atkins) — Environmental, Public Health, and Workers Defense Act of 2019; and, adopt Resolution No. 2021-49, "A Resolution of the City Council of the City of Huntington Beach (1) Announcing its Commitment to End Child Marriage by Calling for an "18 No Exceptions Law"; and (2) Authorizing the City Manager and Authorized City Personnel to Publish on the City's Website and Social Media Platforms Necessary Information Pertaining to Ending Child Marriage." The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 20. 21-619 Extended Temporary Closure of the Second Block of Main Street to Vehicular Traffic Through the End of the Calendar Year (December 31, 2021) Councilmember Posey pulled this item to approve it, and request that City Manager Chi come back with options to partially close Third Block in a way that allows some traffic to meet the needs of both sides of the street. Mayor Carr stated there are currently discussions regarding modifications to all of the Downtown area which include consideration for California Coastal Commission (CCC) parking policies. Councilmembers Moser and Posey asked if the issue of the current barrier, which is eliminating the extension of energy from Second Block to Third Block, can be addressed now rather than later. City Manager Chi confirmed that staff will continue discussions with Third Block business owners in the effort to build cohesion with Second Block, and stated any viable options will be brought back to Council for consideration. A motion was made by Posey, second Kalmick to authorize the City Manager to continue the temporary closure of the second block of Main Street to vehicular traffic to accommodate outdoor dining and retail in the public right-of-way through December 31, 2021. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 21. 21-597 Accepted the lowest responsive and responsible bid, approved appropriations and authorized execution of a construction contract with H2M Construction Inc., in the amount of $646,153.00 for the Lake Park Improvements Project CC-1629 A motion was made by Kalmick, second Delgleize to accept the most responsive and responsible bid submitted by H2M Construction Inc., in the amount of $646,153.00; and, authorize the appropriation of $189,053 from the Park Development Impact Fund balance to account 22845013.82900; and, authorize the appropriation of $88,607 from the Infrastructure Fund to account 31485201.82900; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: 34 Council/PFA Regular Minutes September 7, 2021 Page 15 of 25 AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 22. 21-617 Accepted the lowest responsive and responsible bid and authorized execution of a construction contract with Parsam Construction, Inc. in the amount of $515,000 for the Peck and Springdale Facility Improvements project, CC-1590 A motion was made by Kalmick, second Delgleize to accept the lowest responsive and responsible bid submitted by Parsam Construction Inc. in the amount of $515,000; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 23. 21-584 Approved and authorized execution of a Professional Services Contract with Sam Schwartz Engineering, DPC for the City’s Mobility Plan; and, approved appropriation of funds A motion was made by Kalmick, second Delgleize to approve and authorize the Mayor and City Clerk to execute, "Professional Services Contract Between the City of Huntington Beach and Sam Schwartz Engineering, DPC for the City's Mobility Plan," in an amount not to exceed $323,000; and, appropriate funding in the amount of $323,000 from the Infrastructure Fund undesignated fund balance to account 31485201.69365. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 24. 21-587 Approved and authorized the execution of Letter Amendment No. 1 to Memorandum of Understanding No. C-0-2441 with Orange County Transportation Authority (OCTA) for "Pilot Regional Signal Performance Measure Project" — Time Extension A motion was made by Kalmick, second Delgleize toaApprove and authorize the Transportation Manager to execute "Letter Amendment No. 1 to Memorandum of Understanding No. C-0-2441 for 'Pilot Regional Signal Performance Measure Project' — Time Extension." The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 25. 21-598 Approved and authorized execution of an Operational/Management Agreement between the City of Huntington Beach and HBSC Partners, LLC, for Facility Management and Operation Services at the Huntington Central Park Sports Complex 35 Council/PFA Regular Minutes September 7, 2021 Page 16 of 25 A motion was made by Kalmick, second Delgleize to approve and authorize the Mayor and City Clerk to execute an Operational/Management Agreement between the City of Huntington Beach and HBSC Partners, LLC, for facility management and operation services of the Huntington Central Park Sports Complex. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 26. 21-614 Approved and authorized execution of a three-year Services Agreement with the City of Irvine for Public Safety Helicopter Services A motion was made by Kalmick, second Delgleize to approve and authorize the Mayor and City Clerk to execute the "Services Agreement for Public Safety Helicopter Support Between the City of Huntington Beach and the City of Irvine." The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 27. 21-655 Directed staff to implement programming at Huntington Beach Pier Plaza and the surrounding area during the later months of the Year Councilmember Peterson pulled this item to discuss with City Manager Chi and Community and Library Services Director Chris Slama the source and use of Special Events Fund 101. Councilmember Peterson stated his opinion that nearly $500,000 over three years might be better spent on the parks. Mayor Carr clarified that the contract is written so that once Ice-America has recouped their costs the income will be split 65/35% so actual City costs could be less than the projected $450,000 over three years. A motion was made by Carr, second Kalmick to approve and authorize the Mayor and City Clerk to execute a "Service Agreement Between the City of Huntington Beach and Seaside Inc, LLC DBA Ice- America for Huntington Beach Pier Plaza Outdoor Ice Skating Rink"; and, authorize the appropriation of $150,000 from Specific Events Fund 101 for FY 2020/21 to account 10145101.695.05. The motion carried by the following vote: AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: Peterson 28. 21-639 Approved the execution ad recordation of a License Agreement with Huntington Gateway Industrial, LLC for the Huntington Gateway Phase I Industrial Project A motion was made by Kalmick, second Delgleize to approve and authorize the Mayor and City Clerk to execute and record the "License Agreement between the City of Huntington Beach and Huntington 36 Council/PFA Regular Minutes September 7, 2021 Page 17 of 25 Gateway Industrial, LLC to Provide Installation and Maintenance of Landscaping and Landscaping Improvements in the Public Right-of-Way" for the Huntington Gateway Phase I industrial project (Attachment 1). The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 29. 21-645 Approved and authorized execution of Amendment No. 1 to the Professional Services Contract with Go Live Technology, Inc., in the amount of $85,000, for project management and technical staffing services for the City of Huntington Beach’s Enterprise Land Management (ELM) Project A motion was made by Kalmick, second Delgleize to approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Professional Services Contract Between the City of Huntington Beach and Go Live Technology, Inc., for Technical Staffing Services for City of Huntington Beach's Enterprise Land Management (ELM) Project." The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 30. 21-653 Authorized and directed the City Manager to execute an Exclusive Negotiating Agreement (ENA) with Surf City Partners for 21 Main Street at the Huntington Beach Pier, as amended Councilmember Posey pulled this item to state he was surprised staff would presume to know which vendor Council would select when the Study Session was held earlier in the evening. Theoretically, this vote should have been scheduled for a following meeting. But since the item is on this agenda, Councilmember Posey made an amended motion, based on the risk/reward Study Session discussion, with Surf City Partners, which he believes best supports the City and Pier's destination branding. Councilmember Bolton stated her support for Councilmember Posey's comments, and added she would like to have more time to evaluate how California Coastal Commission (CCC) policies might impact the Surf City Partners' plan. Councilmember Posey responded that he would anticipate discovery of CCC impacts to be part of the negotiation process. Councilmember Kalmick offered that the motion be additionally amended to allow Let's Go Fishing to remain open during negotiations. Councilmember Posey stated his support for adding this to his amended motion. Mayor Carr stated support for Councilmember Bolton's comments about more time needed to better understand a project that just suddenly included two buildings and restrooms. She stated her opinion that this project is clearly evolving as discussions continue, and more answers are needed before a 37 Council/PFA Regular Minutes September 7, 2021 Page 18 of 25 final commitment is made, including if Ms. Johnson, Let’s Go Fishing proprietor, is even interested in continuing on a month-to-month basis. Councilmember Moser stated she views the negotiations as the opportunity for discovering answers to the questions, and therefore her support for the amended motion. City Manager Chi explained this item was placed on the Consent Calendar to represent staff's recommendation as they were aware of the many permitting issues presented by the Surf City Partners proposal. He clarified that an Exclusive Negotiating Agreement (ENA) is not a lease agreement, but a way to move a project forward through a commitment with one concept, and in no way impacts the current tenant's lease. City Manager Chi stated Council should not anticipate a project using two buildings based on the Study Session presentation and comments, as that option was not part of the City's RFQ. He added that Council will be kept up to date as negotiations proceed to keep them aware of potential risks and any staff concerns. Mayor Pro Tem Delgleize stated support for Councilmember Posey's initial concern about presuming to know Council's vendor selection, but with the explanation provided by City Manager Chi she feels comfortable supporting the amended motion. Councilmember Bolton stated her support for the amended motion knowing the negotiation process will allow for appropriate discovery for current concerns and questions. A motion was made by Posey, second Moser to authorize and direct the City Manager to execute an Exclusive Negotiating Agreement (ENA) with Ruby's Hospitality Group, LLC Surf City Partners, in a form approved by the City Attorney, to negotiate the terms of a lease agreement for 21 Main Street , and to allow Let's Go Fishing to remain open while under negotiations. The motion carried by the following vote: AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: Peterson PUBLIC HEARING 31. 21-633 Cancelled Advertised Public Hearing Item 21-633 authorizing City staff to apply for the Orange County Enhanced Mobility for Seniors and Disable Grant Program (EMSD) ADMINISTRATIVE ITEMS 32. 21-588 Approved American Rescue Plan Act (ARPA) Spending Plan Review and Allocation City Manager Chi presented a PowerPoint communication entitled American Rescue Plan Act (ARPA), with slides titled Today's Discussion; Background - Federal Response to COVID-19; Business/Household ARPA Assistance Also Available; HB ARPA Funding Overview; ARPA State and Local Fiscal Recovery Fund Direct Aid Allocation to HB; ARPA Funding: Ineligible Uses; ARPA Funding: Eligible Uses; Considerations; Use of ARPA Funds; Policy Direction for ARPA Funding Spending Plan; Proposed Projects: Addressing Present Needs (2); Proposed 38 Council/PFA Regular Minutes September 7, 2021 Page 19 of 25 Projects: Planning for the Future (4); Proposed 18 Projects by Community Needs; and Recommendations Councilmember Posey stated his support for arterial beautification projects, and discussed with City Manager Chi whether funding could also be available for a second van for the Be Well program. City Manager Chi advised that if that program continues it could become an option. Councilmember Kalmick and City Manager Chi briefly discussed off-setting program dollars for other funds, and details on the skate park which currently is planning for skateboards and BMX, and confirmed nothing has been finalized. Mayor Carr thanked staff and Councilmember Moser and Mayor Pro Tem Delgleize for serving on the Ad Hoc committee. A motion was made by Bolton, second Delgleize to approve the proposed ARPA funds spending plan for Huntington Beach, and direct staff to prepare the necessary budget appropriate documents to facilitate the adopted program. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 33. 21-625 Provided Direction to Staff Regarding the Pier Plaza Art A-Faire Events at Pier Plaza City Manager Chi introduced Chris Slama, Community and Library Services Director, who presented a PowerPoint communication entitled Pier Plaza Arts & Crafts Fair with slides titled: Programming History; Promotional Agreement Expired; Development of a New Agreement; and Questions? Councilmember Peterson and Community Services Manager Chris Cole discussed the differences between the craft fair which is an established and repetitive weekly event, vs. annual specific events which require a lot of annual administrative effort, or concessionaire lease agreements which generally cover approximately 200 days of operation per year and have an established footprint. Director Slama confirmed that the fees can be negotiated and include a profit-sharing percentage. Mrs. Pam Free shared details regarding the Craft Faire events that she has been managing since initiated 29 years ago by Ray Silver. Mrs. Free described the value to the City, community, visitors, and explained that many of the hand-crafted artists support themselves through this program. Council Member Peterson confirmed that if option A is approved, moving forward the City would continue negotiations with Mrs. Free. A motion was made by Peterson, failed due to lack of a second, to direct staff to continue working with Pier Plaza Art A-Faire and execute a new promotional agreement for City Council's consideration. Councilmember Posey stated his appreciation for the effort Mrs. Free has put in to continuing the Art A- Faire for the past 29 years. and noted that Council has a responsibility to the taxpayers to evaluate whether the maximum value is being achieved, or if there are better ways to proceed. 39 Council/PFA Regular Minutes September 7, 2021 Page 20 of 25 Mayor Carr expressed her interest in opening up the process to allow for others to participate in a bid process and provide an opportunity to explore alternatives. Councilmember Moser stated her support for Option B, and reminded everyone that according to the presentation, the City may have the opportunity to enter into agreements with more than one vendor, based on the City's needs and vendor qualifications. Councilmember Kalmick, Director Slama and City Manager Chi discussed the fact that historically Conditional Use Permits (CUP) were used for Friday events, and contracts for weekend events. City Manager Chi expressed his opinion that ultimately it is a contractual agreement when the City leases space it owns. Councilmember Kalmick stated his support for Option B. A motion was made by Carr, second Posey to direct staff to issue an RFQ to identify the most qualified arts and craft fair operators and return to City Council with a proposed operator and promotional agreement for consideration. The motion carried by the following vote: AYES: Bolton, Carr, Posey, Moser, and Kalmick NOES: Peterson ABSTAIN: Delgleize 34. 21-656 Approved formation of a 2021 Charter Revision Committee to conduct a review of the Huntington Beach City Charter, as amended City Manager Chi presented a PowerPoint communication entitled Huntington Beach City Charter Review Requested with slides titled: History of Charter Review Committee; Staff Recommendation; and Questions? Councilmember Posey stated his support for this item and confirmed with City Manager Chi that if the Charter Review Committee were to recommend changes, the process would have to be completed and approved by Council and submitted to the County approximately 90 days before the 2022 November election. Councilmember Posey stated this would be an ambitious game plan that should utilize the services of a consultant in addition to seven (7) council-appointed members. A motion was made by Posey, failed due to lack of a second, to approve the formation of a 2021 Charter Revision Committee comprised of seven residents, individually appointed by each City Council Member, and one Charter review consultant to provide subject matter expertise and guidance throughout the process; direct the City Manager to enter into an agreement with a qualified consultant. Mayor Carr stated her preference to expect each Councilmember to determine their appointee within the next couple of weeks so the Charter Review Committee could be approved at the September 21, 2021, Council meeting. Councilmember Kalmick recommended that each Councilmember also select an alternate to ensure the process keeps moving along. 40 Council/PFA Regular Minutes September 7, 2021 Page 21 of 25 Mayor Pro Tem Delgleize and City Manager Chi discussed that once the individuals for the Committee are confirmed, the objective of the first meeting would be to determine a meeting schedule in order to meet deadline expectations with the guidance of the consultant. Councilmember Kalmick confirmed with City Manager Chi that ultimately the Council determines whether the timeline is for the June primary election or November general election in 2022. City Manager Chi reviewed the process steps to include Committee review, followed by a Public Hearing to present the recommendations, and then Council vote on recommendations and to determine which election date is appropriate. A motion was made by Kalmick, second Moser to approve the formation of a 2021 Charter Revision Committee comprised of seven residents, as amended to add seven alternates, individually appointed by each City Council Member, and one Charter review consultant to provide subject matter expertise and guidance throughout the process; direct the City Manager to enter into an agreement with a qualified consultant. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None ORDINANCES FOR INTRODUCTION 35. 21-112 Approved for introduction Ordinance No. 4222 amending Chapter 8.40 of the Huntington Beach Municipal Code (HBMC) titled Noise Control relating to the control of unnecessary, excessive, and annoying sounds and protecting noise- sensitive land uses, ensuring land use/noise compatibility, reducing noise from mobile sources, and mitigating noise from construction, maintenance, and other sources City Manager Chi introduced Community Development Director Ursula Luna-Reynosa who in turn introduced Joanna Cortez, Associate Planner, and Consultants Josh Carmen and Izzy Garcia and Deputy Director of Community Development Jennifer Villasenor, who all participated via Zoom, and presented a PowerPoint communication entitled Noise Control Update with slides titled: Background (2); Ordinance Update (2); Analysis/Recommendation; and Questions? Director Luna-Reynosa added that this effort is to ensure the Noise Control code is consistent with the General Plan update, and easier to enforce. Council Member Kalmick stated that this has been in process for quite some time, and reviewed some of the specific changes. Mayor Pro Tem Delgleize and Ms. Cortez discussed that hours for "loud" construction, whether commercial or residential projects, is being changed from 7 AM – 8 PM, to 7 AM – 7 PM. Councilmember Bolton thanked staff for the time they took to bring her up to speed and answer her questions on this item earlier, and she stated her support. 41 Council/PFA Regular Minutes September 7, 2021 Page 22 of 25 A motion was made by Kalmick, second Carr to, after the City Clerk reads by title, approve for introduction Ordinance No. 4222, "An Ordinance of the City of Huntington Beach Amending Chapter 8.40 of the Huntington Beach Municipal Code Relating to Noise Control." (Attachment 1) The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None COUNCILMEMBER ITEMS 36. 21-664 Approved Item Submitted by Mayor Carr and Mayor Pro Tem Delgleize — Develop a Proposal for a Public Memorial Honoring Rick "Rockin’ Fig" Fignetti Mayor Carr introduced this item as being in response to community recommendations, which would direct staff to work with the Huntington Beach Interfaith Council in designing a plaque for Tower "0" at Huntington Beach Pier. She amended the item to include the Historic Resources Board as recommended by Amory Hansen during public comments. A motion was made by Carr, second Delgleize to direct the Community Services Commission to work with the surfing community and the leadership of the Greater Huntington Beach Interfaith Council to develop a proposal for a public memorial honoring Rick "Rockin' Fig" Fignetti. Return to City Council within 120 days to present the proposal for consideration. Furthermore, staff will inform the Fignetti Family regarding the proposed memorial and seek their input throughout the process, as amended to include the Historic Resources Board. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 37. 21-659 Approved Item Submitted by Councilmember Kalmick — Conduct a Feasibility Analysis regarding the possible relinquishment of Pacific Coast Highway (PCH) to improve vehicle and pedestrian safety Councilmember Kalmick introduced this item by explaining that Caltrans operates Pacific Coast Highway as a state highway and not a city street. He described areas where other cities have paid Caltrans to allow them local control of various roadways, and stated this effort is to start the process to find out what would be required to improve public safety. Mayor Pro Tem Delgleize expressed her support for this item, and offered to reach out to Orange County Transportation Authority (OCTA) for assistance if staff desired. Councilmember Moser stated her support for this item and determining how gaining control could impact the Downtown area design efforts. Councilmember Posey stated his support, and asked why Beach Boulevard wasn't included. Councilmember Posey stated his expectation that the Feasibility Analysis will include ongoing liability as well as initial costs. 42 Council/PFA Regular Minutes September 7, 2021 Page 23 of 25 Councilmember Peterson stated he would like for staff to start the process by talking with Caltrans about them making some of the changes the City is interested in, rather than just proceeding with an acquiring process. A motion was made by Kalmick, second Delgleize to recommend that the City Council direct the City Manager to conduct a feasibility analysis reviewing the benefits and costs associated with taking over from Caltrans the segment of PCH that runs from the City's border with Newport Beach to Seapoint. The motion carried by the following vote: AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: Peterson 38. 21-660 Approved Item Submitted by Councilmember Kalmick — Establish Electric Vehicle Charging Station Buffer Zones Councilmember Kalmick explained this is in response to resident complaints, described that electric charging stations require liquid cooling and those fans can get pretty loud, and asked staff to be cognizant of the noise level differences between Level 2 and DC Fast chargers by different manufacturers. A motion was made by Kalmick, second Moser to recommend that the City Council direct the City Manager to review our existing EV charging station regulations, and develop any necessary amendments to applicable land use codes to ensure that buffer zones are established to prevent nuisance noise disruptions for residential properties. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None 39. 21-661 Approved, as amended to Set Aside Procedure in City Council Manual, Item Submitted by Councilmember Posey — Adopt Resolution No. 2021-53 in support of the Orange County Veterans’ Cemetery in the City of Anaheim Councilmember Posey introduced this item and provided a brief history of past efforts to find an appropriate location, including the unanimous support of the Orange County Supervisors for Gypsum Canyon, as the best place in Orange County to honor all veterans. Councilmember Peterson stated his support for the item, but asked why the normal process of presenting a resolution for discussion, then bringing it back for a vote, was being circumvented. City Attorney Gates explained that according to the City Council Manual, Councilmember Items ("H" Items) are presented then brought back at a future meeting for voting, to allow proper staff review and to ensure there is no conflict with other ordinances. He added that Council could agree to set aside that process for this item, but doing so could set a precedence. 43 Council/PFA Regular Minutes September 7, 2021 Page 24 of 25 Councilmember Posey explained that he originally intended to bring this item forward for introduction at the cancelled August 24 Council meeting, and there is a timeline element involved. Mayor Pro Tem Delgleize stated her support for the item, and Councilmember Posey stated that Council has the option to approve the item at this meeting. Mayor Carr stated rules are important, but in this case she believes it is appropriate to set aside the Council Manual procedure and proceed with a vote. A motion was made by Posey, second Delgleize to recommend the City Council adopt the attached Resolution 2021-53, which supports the development of a veterans’ cemetery on property owned by Orange County located within the City of Anaheim, as amended to set aside procedure in the City Council Manual. The motion carried by the following vote: AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick NOES: None COUNCILMEMBER COMMENTS (Not Agendized) Council Member Peterson congratulated Boy Scout Troop 1776, a troop that was started about a year ago, on their first three Eagle Scouts: Sebastian Cove Nunez, Dylan Casson, and Lorenzo Andelin. Council Member Posey reported observing the Rockin' Fig paddle out, and attending the 4th Annual Surf City Classics First Responders Cruise with over 100 classic vehicles to thank all first responders. Representatives for Orange County Supervisor Katrina Foley, Assemblywoman Janet Nguyen and Assemblywoman Cottie Petrie-Norris also participated. Mayor Pro Tem Delgleize reported that the City of Anaheim, partnering with Jamboree Housing, recently held the Grand Opening for Buena Esparanza, transforming a former Eco Lodge into 69 permanent supportive housing units. She thanked Anaheim and Jamboree Housing for providing an excellent model of what can be accomplished when working collaboratively. Council Member Kalmick reported attending the Ribbon Cutting for Firehouse Subs on Warner Avenue; the Masonic Lodge Annual Deep Pit BBQ at Lake Park; the Beach Ranger Graduation Ceremony at Oak View; and joining Mayor Pro Tem Delgleize, Mayor Carr and staff for an educational bike tour of flood control channels. Councilmember Moser congratulated Diana Abruscato for another successful Surf City Pickle Ball Tournament in Murdy Park; and reported attending a neighborhood community meeting after the shooting death of Home Inspector Michael Alderson; August 19th Junior Lifeguard graduation with Mayor Carr; OC Power Authority Energy Efficiency Development event at City Hall; Citizens Academy Session 1; Beach Ranger Graduation Ceremony at Oak View; Huntington Beach Concert Band Concert in the Park; welcomed Jason Austin, Deputy Director of Homelessness and Behavioral Health Services; and announced that Ocean View School District classes start this week. Council Member Bolton thanked staff, the City Manager and City Attorney offices for their support as she becomes familiar with her responsibilities. 44 Council/PFA Regular Minutes September 7, 2021 Page 25 of 25 Mayor Carr thanked everyone who put together the Rockin' Fig paddle out, including Aaron Pai of Huntington Surf & Sport, Chris Cole of Community and Library Services, Don Ramsey and Bret Simpson; attending the Junior Lifeguard Program graduation for approximately 1300 graduates; and special thanks to Captain Samantha Dieterman for organizing the Beach Ranger Graduation Ceremony. Mayor Carr announced her brother is retiring from the Navy after over 20 years of service. The meeting was adjourned with a moment of silence in remembrance of the 13 service members who died in Afghanistan, and the 5 Navy seals who died in the helicopter crash near San Diego. ADJOURNMENT — 11:02 PM to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Tuesday, September 21, 2021, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov _________________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair 45 City of Huntington Beach File #:21-663 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Sean Crumby, Director of Public Works Subject: Approve Sole Source Procurement Request with Hadronex Inc., dba SmartCover Systems, for Sanitary Sewer System Manhole SmartCovers Statement of Issue: Submitted for City Council approval is a Sole Source Procurement Request for Hadronex Inc., dba SmartCover Systems, for Sanitary Sewer System Manhole SmartCovers (SmartCovers). Financial Impact: Funds for this request are budgeted in Sewer Service Fund Account 51185201.64620. Recommended Action: Approve Sole Source Procurement Request with Hadronex Inc., dba Smartcover System , for the purchase of SmartCovers. Alternative Action(s): Deny the Sole Source Procurement Request and direct staff accordingly. Analysis: SmartCovers are manhole covers that help the City better manage the sanitary sewer system. These are devices that transmit real time data on the level of the water within the sewer system via an antenna located on the manhole cover. The SmartCovers are located at strategic points in the City’s sanitary sewer system and can prevent or mitigate potential Sanitary Sewer Overflows (SSOs) by providing warning before the system overflows. Traditionally in the past City staff would respond to SSO’s after they have already occurred with extensive cleanups. SSOs pose a significant threat to public health and safety, can cost tens of thousands of dollars in staff time and city resources. They also have extensive reporting with the State, and have major economic impacts to neighboring businesses with the ultimate threat being impacts to City beaches. Smartcovers allow for anticipation of potential issues before they occur and not only remove threats, but allow the response to occur as a standard practice. City of Huntington Beach Printed on 9/15/2021Page 1 of 2 powered by Legistar™46 File #:21-663 MEETING DATE:9/21/2021 This is a sole-source procurement, in accordance with Chapter 3.02 of the City of Huntington Beach Municipal Code, for which there is no comparable competitive product and where compatibility with products already in use by the City is the overriding consideration. Hadronex holds 17 patents and is the only supplier of SmartCovers. The City first purchased SmartCovers in 2016 and has installed 31 SmartCovers to date. At least 20 potential SSOs have been prevented through the use of SmartCovers within the City’s wastewater collection system. Environmental Status: Not applicable Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Sole Source Justification City of Huntington Beach Printed on 9/15/2021Page 2 of 2 powered by Legistar™47 48 49 50 City of Huntington Beach File #:21-681 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Approve and authorize execution of four Professional Services Contracts for On-Call Plan Check Services with CSG Consultants, West Coast Code Consultants, True North Compliance, and The Code Group, Inc. dba VCA Code Statement of Issue: The Community Development Department requires on-call plan check services for as-needed support staff to assist with private development plan check and general support services relating to the Permit Center. Financial Impact: Funding for the first year use of these three-year contracts is provided in the Fiscal Year (FY) 2021/22 budget in General Fund account 10060501.69365. Subsequent funding will be requested as part of the annual budget submittal/approval process. No funds will be expended on these contracts unless they are approved in the City’s annual budget. No additional funding is required by the recommended actions. These contracts will be controlled with task orders. Cumulative task orders will not exceed $800,000 during the three-year contract term unless on-call contract value is amended along with approved appropriations. Recommended Action: A) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and CSG Consultants, Inc. for On-Call Building Division Plan Review Services;” and, B) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and West Cost Code Consultants, Inc. for On-Call Building Division Plan Review Services;” and, C) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and True North Compliance Services, Inc. for On- Call Building Division Plan Review Services;” and, City of Huntington Beach Printed on 9/15/2021Page 1 of 3 powered by Legistar™51 File #:21-681 MEETING DATE:9/21/2021 D) Approve and authorize the Mayor and City Clerk to execute $800,000 “Professional Services Contract Between the City of Huntington Beach and The Code Group, Inc. dba VCA Code for On-Call Building Division Plan Review Services.” Alternative Action(s): Do not authorize one or more contracts and direct staff accordingly. Plan check times are likely to increase and service levels are likely to decrease until new contracts are approved. Analysis: Applicants who desire to construct projects within the City must submit plans for review to ensure compliance with applicable City and state codes. Applicants who submit plans to the City pay fees for plan review and expect reasonable turnaround times. The City currently only has one in-house, full-time plan checker, which is not a sufficient level of staffing to respond to the volume of plan check submittals received by the City. In addition, the City receives structural plans and other specialized plan check submittals that require specific fields of expertise. Due to the cyclical nature of construction activity, demand for plan review services can fluctuate from year to year. As such, the City generally retains professional plan review firms to supplement plan review services in order to meet demand as well as provide specialized plan review. This approach is a cost-effective method of closing the gap between the demands for service and the ability of City staff to meet these demands, while maintaining high-quality customer service levels. Development activity and demand for plan review service is expected to increase in the coming years. In anticipation of this demand, on July 1, 2021,the City advertised a Request for Qualifications (RFQ) for On-Call Building Division Plan Review Services. Proposals were requested and received in compliance with Chapter 3.03 of the Huntington Beach Municipal Code (HBMC), “Professional Services.” The City received 12 proposals. In accordance with requisite government regulations, the Community Development Department established a three member review board to evaluate and rank these proposals. The proposals were generally quite impressive and the selection process very competitive. Following proposal evaluation, the review board then interviewed four of the six teams representing the six highest-ranking proposals (two teams are current consultants and did not need to be interviewed). Following this selection process, staff is recommending that on-call contracts be awarded to the top four firms, as follows: CSG Consultants, West Coast Code Consultants, True North Compliance Services, and VCA Code. Funding for professional plan review services is provided through the collection of plan check fees. The proposed on-call contracts will be used as necessary when the volume of applications exceeds City staff resources. The proposed contract amounts are a not-to-exceed amount for a three-year term, with no guarantee of work. Funding for these contract services is only through City Council authorization in the budget approval process. Environmental Status: Approval of professional services agreements for building plan review is a government fiscal activity, City of Huntington Beach Printed on 9/15/2021Page 2 of 3 powered by Legistar™52 File #:21-681 MEETING DATE:9/21/2021 which does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. As such, the requested actions are not a project pursuant to Section 15378 of the CEQA Guidelines and no further CEQA review is required. Strategic Plan Goal: Economic Development & Housing Attachment(s): 1. Professional Services Contract between the City of Huntington Beach and CSG Consultants, Inc., for On-Call Building Division Plan Review Services 2. Professional Services Contract between the City of Huntington Beach and West Coast Code Consultants for On-Call Development Review Engineering and Professional Consulting Services 3. Professional Services Contract between the City of Huntington Beach and True North Compliance Service, for On-Call Development Review Engineering and Professional Consulting Services 4. Professional Services Contract between the City of Huntington Beach and VCA Code for On- Call Building Division Plan Review Services 5. Professional Services Award Analysis City of Huntington Beach Printed on 9/15/2021Page 3 of 3 powered by Legistar™53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: On-Call Development Review Engineering & Prof. Consulting Services SERVICE DESCRIPTION: Review construction documents for compliance with the California Building Code VENDOR: CSG Consultants OVERALL RANKING: 1 SUBJECT MATTER EXPERTS/RATERS: 1. Managerial Specialist 2. Deputy Director 3. Principal Civil Engineer I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1117.00 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 125 150 Technical Approach 280 375 Qualifications 312.5 375 Clarity 101 150 Cost 237.5 375 References and Background 61 75 Total 1117 II. DUE DILIGENCE REVIEW • Interview Ranking: N/A CSG Consultants – Summary of Review • CSG Consultants is an active consultant with the Community Development Department for several years, in the previous 3 years under the existing contract, their commitment to timely and accurate performance is recognized. CSG Consultants – Pricing • Low end: $105/hr • High end: $145/hr 132 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: On-Call Development Review Engineering & Prof. Consulting Services SERVICE DESCRIPTION: Review construction documents for compliance with the California Building Code VENDOR: West Coast Code Consultants (WC3) OVERALL RANKING: 2 SUBJECT MATTER EXPERTS/RATERS: 1. Managerial Specialist 2. Deputy Director 3. Principal Civil Engineer I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1029.5 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 102 150 Technical Approach 252.5 375 Qualifications 282.5 375 Clarity 100 150 Cost 237.5 375 References and Background 55 75 Total 1029 II. DUE DILIGENCE REVIEW • Interview Ranking: N/A WC3 – Summary of Review • WC3 is an active consultant with the Community Development Department. In the previous 3 years under the existing contract, their commitment to working with the City is present and valued. WC3 – Pricing • Low end: $110/hr • High end: $150/hr 133 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: On-Call Development Review Engineering & Prof. Consulting Services SERVICE DESCRIPTION: Review construction documents for compliance with the California Building Code VENDOR: True North Compliance Services OVERALL RANKING: 3 SUBJECT MATTER EXPERTS/RATERS: 1. Managerial Specialist 2. Deputy Director 3. Principal Civil Engineer I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1097.5 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 110 150 Technical Approach 275 375 Qualifications 275 375 Clarity 105 150 Cost 287.5 375 References and Background 45 75 Total 1097.5 II. DUE DILIGENCE REVIEW • Interview Ranking: 1 True North Compliance Services – Summary of Review • True North is a new consultant to work with the Community Development Department. The expertise of this consultant’s leadership and staff resembles a highly qualified consultant that is eager and ready to provide exceptional service to the City. True North Compliance Services – Pricing • Low end: $105/hr • High end: $140/hr 134 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: On-Call Development Review Engineering & Prof. Consulting Services SERVICE DESCRIPTION: Review construction documents for compliance with the California Building Code VENDOR: VCA Code OVERALL RANKING: 4 SUBJECT MATTER EXPERTS/RATERS: 1. Managerial Specialist 2. Deputy Director 3. Principal Civil Engineer I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1008 VENDOR NAME – Minimum Qualifications Review Criteria Total Weighted Score Maximum Score Compliance with RFP 95 150 Technical Approach 255 375 Qualifications 282.5 375 Clarity 103 150 Cost 225 375 References and Background 47.5 75 Total 1008 II. DUE DILIGENCE REVIEW • Interview Ranking: 2 VCA Code – Summary of Review • VCA Code is a new consultant to provide service to the Community Development Department. This firm has extensive experience providing similar services to other municipalities and is comprised of an experienced staff with a wide range of knowledge. VCA Code – Pricing • Low end: $115/hr • High end: $150/hr 135 City of Huntington Beach File #:21-638 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Julian Harvey, Interim Chief of Police Subject: Approve, accept and authorize execution of a Grant Agreement for the Office of Traffic Safety (OTS) Selective Traffic Enforcement Program (STEP) Pedestrian and Bicycle Safety grant; and approve appropriation and expenditure of funds by the Chief of Police Statement of Issue: On August 6, 2021, the Huntington Beach Police Department received notice from the California Office of Traffic Safety (OTS) that the City of Huntington Beach has tentatively been awarded new one-year traffic safety grants. The first, a Selective Traffic Enforcement Program (STEP) grant (Grant Number PT22153) provides funding in the amount of $788,000.00 to reimburse the City’s costs associated with Sobriety/Driver License checkpoints, two full-time DUI enforcement officer positions, focused and specific traffic enforcement operations and speed detection devices for motor officers. The STEP funds will also be used to raise awareness of the dangers of DUI through the Department’s “Know your Limit” campaign which is an educational tool directly targeting would-be drivers inside drinking establishments. Collectively, these targeted enforcement and education efforts are designed to reduce DUI related traffic collisions, injuries and fatalities. The second OTS grant (Grant Number PS22030) is in the amount of $42,795.00 to reimburse costs associated with pedestrian and bicycle safety and education. Since far too many injury traffic collisions occurring in the city involve pedestrians and bicyclists, these funds will allow for targeted education and media campaigns to raise awareness of the importance of remaining alert and attentive. Financial Impact: These one-year reimbursable grants are funded by the California Office of Traffic Safety in the amounts of $788,000.00 and $42,795.00 are to be expected between October 1, 2021, and September 30, 2022. The appropriation request is fully offset by this revenue source. Recommended Action: A) Approve and accept the “Selective Traffic Enforcement Program “ and “Pedestrian and Bicycle City of Huntington Beach Printed on 9/15/2021Page 1 of 3 powered by Legistar™136 File #:21-638 MEETING DATE:9/21/2021 Safety” grant agreements between Office of Traffic Safety (OTS) and the City of Huntington Beach for $788,000.00 and $42,795.00; and, B) Authorize the Chief of Police to execute the grant agreement with OTS; and, C) Approve appropriations and estimated revenue source in the amount of $788,000.00 and $42,795.00; and, D) Establish a separate business unit for this funding and authorize the Chief of Police to expend up to a total of $788,000.00 and $42,795.00 plus accrued interest on the “Selective Traffic Enforcement Program” (STEP) grant and “Pedestrian and Bicycle Safety” grant. Alternative Action(s): Do not approve and direct staff accordingly. Analysis: With the safety of its residents and visitors as the highest priority, the City of Huntington Beach recognizes the devastating impacts of impaired driving. The City also understands the effectiveness of enforcement both in terms of prevention and as a deterrent. These funds will supplement the department’s current efforts in reducing injury traffic collisions wherein DUI is a factor and will greatly enhance its ability to raise awareness across all modes of travel including vehicular, bicycle, and pedestrian traffic on City highways, streets and bike paths. The City of Huntington Beach is also currently undergoing several redevelopment roadway construction projects, which will add to both seasonal and normal vehicle traffic and pedestrian/bicycle related issues. In 2019 and 2020, the police department investigated over 650 injury traffic collisions, 215 of which were DUI related. Also during that time-period, the police department made over 1,700 DUI arrests. This grant will allow us to use progressive and innovative enforcement techniques to increase DUI enforcement efforts, and continue to provide coverage with two full time officers dedicated to DUI enforcement. We are seeking to use the proposed funding to increase traffic enforcement and expanded public education to address and prevent traffic collisions resulting in injury and death. This particular grant will reimburse the City of Huntington Beach for expenditures associated with Sobriety/Driver License Checkpoints, two full time DUI enforcement officers, and a variety of traffic related details. OTS will administer and handle the grant funds for the Selective Traffic Enforcement City of Huntington Beach Printed on 9/15/2021Page 2 of 3 powered by Legistar™137 File #:21-638 MEETING DATE:9/21/2021 related details. OTS will administer and handle the grant funds for the Selective Traffic Enforcement Program. Environmental Status: Not applicable. Strategic Plan Goal: Community Engagement Attachment(s): 1. Agreement for OTS STEP Grant (Number PT22153) 2. Agreement for Pedestrian/Bicycle Safety Program Grant (Number PT22030) City of Huntington Beach Printed on 9/15/2021Page 3 of 3 powered by Legistar™138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 City of Huntington Beach File #:21-657 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Sean Crumby, Director of Public Works Subject: Approve and authorize execution of a Professional Services Contract to provide Professional Engineering and Construction Phase Services for the Heil Avenue Stormwater Pump Station Project, CC-1293, with AECOM Technical Services, Inc. in the amount of $200,000 Statement of Issue: The Public Works Department requires a Professional Service Contract with AECOM Technical Services, Inc. to provide Professional Engineering and Construction Phase Services for the Heil Avenue Stormwater Pump Station Project, CC 1293. Financial Impact: Funds for the contract at a not-to-exceed amount of $200,000 are available in Infrastructure Fund account 31488001.82500. Recommended Action: Approve and authorize the Mayor and City Clerk to execute a “Professional Services Contract Between the City of Huntington Beach and AECOM Technical Services, Inc., for Construction Phase Services for Heil Avenue Stormwater Pump Station, CC-1293.” Alternative Action(s): Do not authorize the contract and direct staff with an alternate action. Analysis: AECOM Technical Services, Inc. (AECOM) provided professional engineering design services for the Heil Pump Station Replacement Project. The final design of this project was completed in 2018 and was used to apply for a FEMA grant. In 2021 the City received a $6.7M FEMA Grant and now the project is moving forward. As the engineer of record for this project, the City needs a contract with AECOM to update the plans and specifications prior to bidding the project in addition to providing services during construction. City of Huntington Beach Printed on 9/15/2021Page 1 of 2 powered by Legistar™172 File #:21-657 MEETING DATE:9/21/2021 AECOM was procured through an Interagency Agreement per section 3.03.080.B of our municipal Code. Environmental Status: Not applicable. Strategic Plan Goal: Infrastructure & Parks Attachment(s): 1. Professional Service Contract between the City of Huntington Beach and AECOM Technical Services, Inc. for Construction Phase Services for the Heil Avenue Stormwater Pump Station Project CC 1293 2. City of Anaheim General Service Agreement Water Engineering, with the City of Anaheim, dated October 22, 2019. City of Huntington Beach Printed on 9/15/2021Page 2 of 2 powered by Legistar™173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 City of Huntington Beach File #:21-693 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Scott M. Haberle, Fire Chief Subject: Approve and authorize execution of the License Agreement by and between the City of Huntington Beach and Bolsa Chica Conservancy relating to network connectivity between City property and the Bolsa Chica Wetlands Interpretative Center Statement of Issue: The City Council is requested to approve and authorize execution of the License Agreement by and between the City of Huntington Beach and Bolsa Chica Conservancy (License Agreement) Financial Impact: Per the License Agreement, the Bolsa Chica Conservancy agrees to pay the City of Huntington Beach a one-time license fee of Five Hundred Dollars ($500.00). Recommended Action: Approve and authorize the Mayor and City Clerk to execute “License Agreement By and Between the City of Huntington Beach and Bolsa Chica Conservancy.” Alternative Action(s): Do not approve License Agreement and direct staff accordingly. Analysis: Bolsa Chica Conservancy, a 501(c)3 Nonprofit California Corporation, is requesting to achieve network connectivity between the City of Huntington Beach property and the Bolsa Chica Wetlands Interpretive Center. Bolsa Chica Conservancy is requesting to install and maintain new microwave equipment including microwave radios, antennas and associated equipment on the rooftop of Fire Station #7. The City of Huntington Beach may terminiate this license immediately if at its sole discretion determines health and safety issues exist because of Bolsa Chica Conservancy’s equipment. The License Agreement by and between the City of Huntington Beach and Bolsa Chica Conservancy includes a term of twenty-four (24) years. The License Agreement also states that Bolsa Chica Conservancy would pay the City of Huntington Beach a one-time license fee of Five Hundred Dollars City of Huntington Beach Printed on 9/15/2021Page 1 of 2 powered by Legistar™226 File #:21-693 MEETING DATE:9/21/2021 ($500.00). This License Agreement would be related to one of the adopted strategic goals to increase the City’s community engagement efforts. As stated on the Bolsa Chica Conservancy website, “Established in 1990 by a coalition of government, community, business and environmental leaders, the Bolsa Chica Conservancy, a private, not-for-profit organization, provides services that inspire and connect all generations through community involvement and leadership in hands-on restoration and education in wetland science, watersheds, coastal ecology and environmental sustainability.” The attached License Agreement by and between the City of Huntington Beach and Bolsa Chica Conservancy is being requested to be approved and executed for a term of twenty-four (24) years. Environmental Status: Not applicable. Strategic Plan Goal: Community Engagement Attachment(s): 1. License Agreement by and between the City of Huntington Beach and Bolsa Chica Conservancy City of Huntington Beach Printed on 9/15/2021Page 2 of 2 powered by Legistar™227 228 229 230 231 232 233 234 City of Huntington Beach File #:21-679 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Adopt Ordinance No. 4222 amending Chapter 8.40 of the Huntington Beach Municipal Code (HBMC) titled Noise Control relating to the control of unnecessary, excessive, and annoying sounds and protecting noise-sensitive land uses, ensuring land use/noise compatibility, reducing noise from mobile sources, and mitigating noise from construction, maintenance, and other sources - Approved for Introduction 9/7/2021 - Vote: 7-0 Statement of Issue: On October 2, 2017, the City Council approved General Plan Amendment No. 14-002, the General Plan Update, which amended the Noise Element of the Huntington Beach General Plan. The updated Noise Element incorporated new land use compatibility standards and guidelines to address acceptable noise levels for an expanded list of land uses and proper measurement methods; obtained input from interested parties and concerned groups during the General Plan Update process; and added an implementation program to update the Noise Ordinance, which had not been comprehensively updated since it was adopted approximately 40 years ago. The Noise Element necessitated an update to the noise ordinance for these reasons,as the noise ordinance is crucial for the protection of noise-sensitive land uses and is enforced by multiple City departments. If adopted by the City Council, the result would be a noise ordinance that is easier to comprehend and enforce, and meets the goals and policies of the General Plan. Financial Impact: Not applicable. Recommended Action: Adopt Ordinance No. 4222, “An Ordinance of the City of Huntington Beach Amending Chapter 8.40 of the Huntington Beach Municipal Code Relating to Noise Control.” Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: Chapter 8.40 of the HBMC, titled Noise Control (commonly known as “the Noise Ordinance”), was City of Huntington Beach Printed on 9/15/2021Page 1 of 3 powered by Legistar™235 File #:21-679 MEETING DATE:9/21/2021 Chapter 8.40 of the HBMC, titled Noise Control (commonly known as “the Noise Ordinance”), was adopted in 1979 and last updated in 2012, which added the Noise Deviation permit process. However, the noise ordinance has never been comprehensively updated. On October 2, 2017, the City Council approved the General Plan Update, which amended the Noise Element. The goals and policies of the Noise Element are identified to protect noise-sensitive land uses, ensure land use/noise compatibility, reduce noise from mobile sources, and mitigate noise from construction, maintenance, and other sources. The updated Noise Element incorporated new land use compatibility standards and guidelines to address acceptable noise levels for an expanded list of land uses and proper measurement methods, and obtained input from interested parties and concerned groups during the General Plan Update process. An implementation program to comprehensively update the Noise Ordinance was also approved during the General Plan update. The Noise Element required an update to the noise ordinance for these reasons as the noise ordinance is crucial for regulating noise at its source, for the protection of noise-sensitive land uses, and for enforcement by multiple City departments. The General Plan Implementation Program N-P.3 requires an update of Chapter 8.40 to align with the standards established in the General Plan’s Noise Element,and implement the goals, policies,and programs therein. The proposed ordinance amends the Noise Ordinance to incorporate updated standards in line with the current noise conditions of the City, established state guidelines, and implement programs of the Noise Element, including: ·Definitions of noise descriptors that are relevant to the ordinance, noise generators, and noise- sensitive uses o Noise descriptors or rating scales analyze the adverse effect of community noise on people. The choice of specific descriptors is related to the nature of the noise “signature” (frequency and duration) of the source. Updated definitions for common metrics,such as Equivalent Continuous Sound Level (Leq) and Maximum Sound Level (Lmax), were added to help evaluate noise source for code compliance. ·Performance standards for noise-sensitive receptors o Noise-sensitive receptors are newly defined as residential, hotels/motels, schools, hospitals, churches, cultural land uses, public parks, and the active outdoor use areas of commercial and office uses (such as courtyards).Performance standards, such as use prohibition, restricted hours, and/or distance requirements, are added to provide clear guidance and protection from noise impacts related to construction, property maintenance, auto/recreational vehicle repair/activities, commercial deliveries, entertainment events and sound amplifying devices. Additionally, added ground vibration limits protect vibration-sensitive uses (similar to noise-sensitive uses). ·Restrictions on construction activities o Hours of construction are proposed to be revised to be more restrictive for the loudest noise generating construction activities. The new hours would limit construction hours to 7:00 a.m. - 7:00 p.m., provided noise levels do not exceed 80 dBA Leq adjacent to noise-sensitive uses. Construction could occur outside of those hours at lower noise levels in accordance with the standards set in the ordinance. The proposed ordinance clarifies that noise related to typical or occasional property maintenance not subject to a building permit, including the use of domestic power tools, are not subject to the new City of Huntington Beach Printed on 9/15/2021Page 2 of 3 powered by Legistar™236 File #:21-679 MEETING DATE:9/21/2021 construction hours. ·Noise Deviation Permit o Construction or activities that will temporarily exceed noise levels may still request a Noise Deviation Permit. The noise ordinance proposes to amend the notification and appeal period language of the Noise Deviation Permit process. Extending both periods of time from five to ten days will make the process consistent with other discretionary permits and allow additional opportunities for public input. While not a revision to the permit process, the application requirements have also been modified for clarity purposes. Applicants will still be required to demonstrate all actions taken to comply with the ordinance, why compliance cannot be achieved, and proposed methods to minimize noise during the temporary activity. These requests are infrequent and staff anticipates that they will continue to be infrequent, limited to one to two per year. ·Standards for field measurements, including equipment and methodology o Newly added standards include specific criteria for industry standard measuring tools. Specific location and methods are included to properly measure different noise levels for code compliance. Multiple departments reviewed and contributed to this amendment, particularly to clarify sections that have contributed to noise-related issues for City enforcement. The proposed revisions are necessary for efficient noise control in today’s Huntington Beach,and if adopted by the City Council, the result would be a noise ordinance that is easy to comprehend, enforceable, and meets the goals and policies of the General Plan. Environmental Status: The proposed Huntington Beach Municipal Code amendments are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061 (b) (3) of the CEQA Guidelines because there is no potential for the amendments to have a significant effect on the environment. Strategic Plan Goal: Enhance and maintain high quality City services Attachment(s): 1. Ordinance No. 4222 2. Legislative Draft City of Huntington Beach Printed on 9/15/2021Page 3 of 3 powered by Legistar™237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 City of Huntington Beach File #:21-615 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Approve Zoning Text Amendment (ZTA) No. 19-004 by approving for introduction Ordinance No. 4235 amending Section 230.26 (Affordable Housing) of the Zoning and Subdivision Ordinance and adopt Resolution No. 2021-50 updating the affordable housing in-lieu fee schedule and methodology Statement of Issue: Transmitted for your consideration is Zoning Text Amendment No. 19-004, a City-initiated request to amend Section 230.26 (Affordable Housing) of the HBZSO to provide updated and additional options for projects to meet affordable housing requirements and revise the in-lieu fee payment option and fee calculation methodology for ownership and rental housing projects. Notably, the option to pay in- lieu fees is recommended to be expanded for ownership projects of any size and rental projects with up to 100 units. Currently, the in-lieu fee option is limited to projects consisting of 30 units or less. The Planning Commission and staff recommend approval of the request. Financial Impact: Not applicable. Recommended Action: PLANNING COMMISSION AND STAFF RECOMMENDATION: A) Find that Zoning Text Amendment (ZTA) No. 19-004 is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (General Rule) of the CEQA Guidelines because there is no potential for the project to have a significant effect on the environment (Attachment No. 1); and, B) Approve ZTA No. 19-004 and approve for introduction Ordinance No. 4235 “An Ordinance of the City Council of the City of Huntington Beach Amending Section 230.26 of the Huntington Beach Zoning and Subdivision Ordinance Titled Affordable Housing” (Attachment No. 2); and, C) Adopt Resolution No. 2021-50, “A Resolution of the City Council of the City of Huntington Beach Adopting an Affordable Housing In-Lieu Fee Pursuant to Ordinance No. 4235, and Repealing City of Huntington Beach Printed on 9/15/2021Page 1 of 8 powered by Legistar™269 File #:21-615 MEETING DATE:9/21/2021 Resolution Nos. 2007-71, 2008-43, and All Supplemental Resolutions Thereto.” (Attachment No. 4). Alternative Action(s): The City Council may make the following alternative motions: 1. Do not approve Zoning Text Amendment No. 19-004 and Resolution No. 2021-50. 2. Continue Zoning Text Amendment No. 19-004 and Resolution No. 2021-50 and direct staff accordingly. Analysis: A.PROJECT PROPOSAL: Applicant: City of Huntington Beach Zoning Text Amendment (ZTA) No. 19-004 is a request to amend Section 230.26 - Affordable Housing of the Huntington Beach Zoning and Subdivision Ordinance to update and expand the options for projects to meet affordable housing requirements and provide an updated in- lieu fee schedule and methodology to reflect current market conditions. A description of the proposed ZTA as well as a General Plan and Zoning conformance analysis can be found in the August 24, 2021, Planning Commission staff report (Attachment No. 6). B.BACKGROUND: The existing Affordable Housing ordinance is codified as Section 230.26 - Affordable Housing within the Huntington Beach Zoning and Subdivision Ordinance. The City’s Affordable Housing policies were established in the mid 1990’s and codified in 2005. The current affordable housing ordinance requires new residential projects proposing three or more units to provide at least 10 percent of the total units as affordable to either moderate or lower income households. The existing ordinance provides several options for a project to meet the affordable housing obligation. A project may provide affordable units within the proposed project for onsite compliance. Further, the affordable units are permitted to be provided at an off-site location, and may be new construction or substantial rehabilitation of existing units. Preservation of at-risk units identified in the Housing Element may also satisfy the affordable housing obligation. All off-site inclusionary units must be constructed or rehabilitated prior to or concurrently with the primary project. The City has contracted with an economic consultant, Keyser-Marston Associates (KMA), to assist in technical analysis (Attachment No. 5) and proposes the following changes to the ordinance: ·Updates and expands the options for projects to meet affordable housing requirements. ·Revises the in-lieu fee payment option and fee calculation methodology for ownership and rental housing projects. Notably, the option to pay in-lieu fees is recommended to be expanded for ownership projects of any size and rental projects with up to 100 units. City of Huntington Beach Printed on 9/15/2021Page 2 of 8 powered by Legistar™270 File #:21-615 MEETING DATE:9/21/2021 be expanded for ownership projects of any size and rental projects with up to 100 units. Currently, the in-lieu fee option is limited to projects consisting of 30 units or less. ·Clarifies that rental projects must provide affordable units at the lower income level. ·Overall minor clarifications and revisions, including adding a “Definitions” section. The City’s inclusionary housing program is not mandated by the State. The program is a policy tool that the City has utilized since the 1990’s to produce housing units affordable to all economic segments of the community. All residential development proposals must comply with the inclusionary housing requirements; however, approval of an updated ordinance itself does not propose or permit the construction of any new dwelling units. The KMA report recommends updating the existing in-lieu fee methodology. The current in- lieu fee is calculated on a per-unit basis. The KMA report recommends calculating the fee on a per square-foot of net saleable or leasable area. The City engaged with the development community and Building Industry Association early on and throughout the process of developing revisions to the in-lieu fee methodology. Staff recommends to cap the total in-lieu fee for ownership units over 2,000 square feet at the total fee for a 2,000 square foot unit. The draft revised affordable housing in-lieu fee methodology and calculations are provided in the KMA study (Attachment No. 5). C.PLANNING COMMISSION MEETING AND RECOMMENDATION: On August 24, 2021, the Planning Commission held a public hearing on the ZTA. There was one public speaker at the public hearing and approximately 214 written comments were received. The comments discussed issues relating to local control, rezoning parcels, and rights of charter cities. Staff recommended approval of the ZTA because it is consistent with the general land uses, programs, goals, and policies of the General Plan. In addition, it addresses a community need to update the existing ordinance to implement Housing Element programs, facilitate the provision of housing opportunities for all economic segments of the community, and reflect current market conditions. Although the updated fee schedule in Resolution No. 2021-50 is not subject to the discretionary action or recommendations by the Planning Commission, information about the revised fee methodology and calculation was included for informational purposes. The Planning Commission discussed that the proposed updates would not change the zoning designation of any parcel, updates an existing program that has been codified for approximately 15 years, and no new development would be constructed as part of the proposed changes. The Planning Commission recommended approval of the request to the City Council with a modification to revise the term “low-income” to “lower income” in Section 230.26(A)(1) for consistency with the definitions section. Planning Commission Action on August 24, 2021: A motion was made by Scandura, seconded by Perkins, to find and determine that the project is exempt from the California Environmental Quality Act, recommend approval of ZTA No. 19- 004 with a modification to revise the term “low-income” to “lower income” in Section 230.26(A) City of Huntington Beach Printed on 9/15/2021Page 3 of 8 powered by Legistar™271 File #:21-615 MEETING DATE:9/21/2021 004 with a modification to revise the term “low-income” to “lower income” in Section 230.26(A) (1) for consistency with the definitions section, and forward to the City Council for consideration carried by the following vote: AYES: Perkins, Scandura, Acosta-Galvan, Rodriguez NOES: Ray ABSTAIN: None ABSENT: Mandic MOTION PASSED D.STAFF ANALYSIS AND RECOMMENDATION: The proposed updates to Section 230.26 do not change the Zoning designation of any property or construct any housing units on any property. The following provides a review of the proposed amendments. 1.General Reorganization and Renumbering The existing ordinance requires the public to read through several sections to gather all the information needed. The proposed update reorganizes the ordinance into a few key sections: Definitions, Applicability, On-Site Options, Alternatives to On-Site Options, and Miscellaneous Provisions. Notably, several requirements that were previously in the Miscellaneous Provisions section have been reorganized under each applicable section in order to increase readability for the public. For example, each option that permits a phasing plan to construct the market rate units and affordable units in phases is proposed to state this within its section. 2.Applicability The existing ordinance requires that a minimum of 10% of all new residential projects proposing three or more units shall be affordable housing units. There is no proposed change to the minimum percentage of affordable units, except for the following options: ·Minimum 15% inclusionary requirement: Off-site production ·Minimum 20% inclusionary requirement: Acquisition/rehabilitation projects and land dedication An applicant would only be required to provide more than 10% affordable units if they were to choose one of the above options to fulfill the inclusionary requirement. Projects located in Specific Plan areas will defer to the inclusionary requirements of each Specific Plan, if applicable. 3.On-Site Affordable Housing The existing ordinance includes provisions for fulfilling the inclusionary requirements on-site within a market rate project. The existing ordinance permits rental units to be made available to low-income or moderate-income households and ownership units to moderate-income households. The proposed amendments would require rental units to be made available to lower income households, which is inclusive of low, very low, and extremely low-income households. City of Huntington Beach Printed on 9/15/2021Page 4 of 8 powered by Legistar™272 File #:21-615 MEETING DATE:9/21/2021 The revised ordinance proposes more specific provisions for the existing options to provide affordable units on-site, including the following items: Ownership Units ·Affordable to moderate-income households ·Bedroom mix shall be proportional to the bedroom mix of the market rate units ·Affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units ·Exterior and interior improvements, finishes, appliance packages, etc of the affordable units must be comparable to the base level market rate units Rental Units ·Affordable to lower income households ·Bedroom mix shall be proportional to the bedroom mix of the market rate units ·Affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units ·Interior improvements shall comply with the Low-Income Housing Tax Credit (LIHTC) minimum construction standards The revised ordinance proposes to expand the on-site affordable housing option to permit construction of affordable rental units within a market rate ownership housing project. If a developer chooses this option, they may create a separate affordable housing parcel within the market rate project site for the affordable rental units. The developer may enter into an agreement with an Affordable Housing Developer to construct, own, and operate the affordable housing units. Several provisions for the affordable units are proposed, such as a minimum of 40% of the units shall include at least two bedrooms and the Affordable Housing Developer shall enter into an Affordable Housing Agreement with the City. 4.Alternatives to On-Site Affordable Housing The existing ordinance includes three alternative options to onsite production for fulfilling the inclusionary requirements. The existing ordinance permits offsite production of affordable units, acquisition and rehabilitation of existing units, and payment of in-lieu fees. The revised ordinance proposes specific provisions for each of these options and updates each option in response to market trends. A new option to dedicate land in-lieu of constructing affordable units is also proposed. Offsite Production of Affordable Units The existing ordinance permits offsite construction of affordable units. The proposed update expands this section to include the following provisions: ·Minimum 15% inclusionary requirement ·Minimum 40% of units shall include at least two bedrooms ·Bedroom mix of affordable units shall be proportional to the bedroom mix of the market rate units that generated the inclusionary requirement ·Affordable units can be a maximum of 20% smaller than the average size of the market City of Huntington Beach Printed on 9/15/2021Page 5 of 8 powered by Legistar™273 File #:21-615 MEETING DATE:9/21/2021 ·Affordable units can be a maximum of 20% smaller than the average size of the market rate units Acquisition and Rehabilitation of Existing Units The existing ordinance permits acquisition and rehabilitation of deed-restricted affordable units identified as at-risk of conversion to market rate units in the Housing Element. Units are typically identified as at-risk if affordability restriction periods are set to expire within the next five years. The proposed update expands this section to include the conversion of motels to rental units. It is also proposed for the inclusionary requirement to be set at 20% for developers choosing this option. Land Dedication The existing ordinance does not include a land dedication option to fulfill inclusionary housing requirements, although this option is available in the existing density bonus ordinance. The proposed land dedication option allows the City Council the discretion to approve a developer’s proposal to dedicate property in-lieu of constructing affordable units. Several provisions are proposed regarding land dedication, including the following: ·Minimum 20% inclusionary requirement ·The property shall be located within the City of Huntington Beach ·The developer shall convey the property to the City at no cost ·The existing General Plan and zoning standards shall allow for a residential use at a density sufficient to allow for the required number of affordable units to be constructed ·The site shall be suitable in terms of size, configuration, and physical characteristics to allow for the required number of affordable units to be developed on a cost efficient basis ·The developer shall provide a title report, appraisal, Phase I Environmental Site Assessment (ESA), and conceptual site plan and narrative describing a potential affordable development project at the site In-Lieu Fee Payment The existing ordinance permits the affordable housing obligation to be satisfied through the payment of in-lieu fees for new residential construction projects up to 30 units. As such, the current ordinance also includes provisions for the methodology, collection, and use of the affordable housing in-lieu fees. The option to pay in-lieu fees is recommended to be expanded to include all ownership projects of any size and rental projects with up to 100 units. KMA recommends a revised in-lieu fee methodology to calculate fees on a per square foot basis instead of the existing per unit methodology. The proposed fee will be calculated on a per square-foot basis of net saleable of leasable area. Ownership units over 2,000 square feet are proposed to be capped at the total fee for a 2,000 square foot unit. The draft revised affordable housing in-lieu fee methodology and fee calculations are provided in Resolution No. 2021-50 (Attachment No.4). Background information regarding the proposed methodology is included in the KMA study (Attachment No. 5). In-lieu fees paid to fulfill inclusionary requirements are placed in the City’s Affordable Housing Trust Fund (AHTF). There are no proposed changes to this section of the ordinance. TheCity of Huntington Beach Printed on 9/15/2021Page 6 of 8 powered by Legistar™274 File #:21-615 MEETING DATE:9/21/2021 Trust Fund (AHTF). There are no proposed changes to this section of the ordinance. The existing ordinance provides several provisions for using the AHTF monies, including the following: ·Constructing residential projects with a minimum 50% of units affordable to very low and low-income households ·Units constructed using AHTF monies must be affordable for a minimum of 55 years ·City Council has discretion to use AHTF for other related costs such as gap financing, predevelopment costs, rehabilitation, and administrative costs 5.General Clarifications and Revisions The proposed updates to the ordinance include several clarifications and revisions. Definitions Section The existing affordable housing ordinance and proposed update include several technical terms that do not appear elsewhere in the HBZSO. The proposed definitions section is included in order to define existing and new terms in the ordinance. Reduced Fees for Affordable Housing The existing affordable housing ordinance includes section 230.26(G), which states that projects exceeding the minimum inclusionary requirement on site would be eligible for reduced city fees pursuant to adoption of an Affordable Housing Fee Reduction Ordinance by the City Council. This section was effectively completed through adoption of the Development Impact Fee (DIF) ordinances, which included fee exemptions for affordable housing units made available to lower income households. As such, this section is proposed to be deleted. Accessory Dwelling Units Recent state laws have expanded the option and ability of property owners to construct accessory dwelling units (ADU) on single-family or multi-family properties. The proposed update includes a provision which notes that construction of an ADU does not satisfy the inclusionary housing requirement nor do they generate an affordable housing obligation. ADUs are typically much smaller in size than the associated market rate units. It can also become burdensome to ensure that all affordable housing monitoring and compliance regulations are adhered to. For example, deed-restricting an ADU as an affordable unit when it is on the same property as a market rate single-family residence would require the single-family property owner to income qualify each tenant of the ADU. E.SUMMARY: Staff and the Planning Commission recommend approval of ZTA No. 19-004 based on the following: 1. It is consistent with general land uses, programs, goals, and policies of the General Plan, as described in the attached findings and Planning Commission staff report. 2. It addresses a community need to update the existing ordinance to implement Housing Element programs, to facilitate the provision of housing opportunities for all economic segments of the community, and reflect current market conditions. City of Huntington Beach Printed on 9/15/2021Page 7 of 8 powered by Legistar™275 File #:21-615 MEETING DATE:9/21/2021 Environmental Status: ZTA No. 19-004 does not propose directly or indirectly development that would result in physical changes to the environment. As such, ZTA No. 19-004 would also be exempt pursuant to Section 15061(b)(3) of the CEQA Guidelines, which exempts activities where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. Strategic Plan Goal: Economic Development & Housing Attachment(s): 1. Suggested Findings of Approval ZTA No. 19-004 2. Draft City Council Ordinance No. 4235 3. Legislative Draft for Ordinance 4235 4. Draft Resolution No. 2021-50 5. Exhibit A to Resolution 2021-50 - Keyser Marston and Associates Report 6. August 24, 2021 Planning Commission Staff Report City of Huntington Beach Printed on 9/15/2021Page 8 of 8 powered by Legistar™276 Attachment No. 1.1 ATTACHMENT NO. 1 SUGGESTED FINDINGS OF APPROVAL ZONING TEXT AMENDMENT NO. 19-004 FINDINGS FOR PROJECTS EXEMPT FROM CEQA: ZTA No. 19-004 does not propose directly or indirectly development that would result in physical changes to the environment. A s such, ZTA No. 19-004 would also be exempt pursuant to Section 15061(b)(3) of the CEQA Guidelines, which exempts activities where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. FINDINGS FOR APPROVAL - ZONING TEXT AMENDMENT NO. 19-004: 1. Zoning Text Amendment (ZTA) No. 19-004 to amend Section 230.26 (Affordable Housing) of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) is consistent with the objectives, policies, general land uses and programs specified in the General Plan including: Land Use Element Goal LU-4: A range of housing types is available to meet the diverse economic, physical, and social needs of future and existing residents, while neighborhood character and residences are well maintained and protected. Policy LU-4 (A): Encourage a mix of residential types to accommodate people with diverse housing needs. Housing Element Goal 3: Enhance housing affordability so that modest income househol ds can remain an integral part of the Huntington Beach community. Policy 3.1: Housing Diversity. Encourage the production of housing that meets all economic segments of the community, including lower, moderate, and upper income households, to maintain a balanced community. Program 10: Inclusionary Housing Program and Housing Trust Fund Objective. Continue to utilize the Inclusionary Housing Ordinance as a tool to integrate affordable housing within 277 Attachment No. 1.2 market rate developments, or alternatively, to generate fees in support of affordable housing in off-site locations. Establish an in-lieu fee amount for projects with between 10 –30 units. Re-evaluate the Ordinance consistent with case law and to reflect market conditions and adopt an amendment to the Ordinance in the first half of 2020. Since the City has already addressed its moderate income RHNA allocation, the City will implement a City -wide policy to require at least half of on-site inclusionary units to be provided at levels affordable to lower income households. The proposed ZTA ensures that affordable units constructed on -site in market rate rental housing projects would be provided for lower income households. In addition, the proposed ZTA would allow all ownership housing projects to pay an in -lieu fee to satisfy the affordable housing requirement. If affordable units are provided within a market rate ownership housing project, the affordability level is set at moderate income. If in -lieu fees are paid by the developer of a market rate ownership housing project, those fees would be utilized for affordable housing projects that would provide deeper levels of affordability at low, very low and extremely low income levels. The proposed ZTA would therefore facilitate production of housing that meets all economic segments of the community consistent with General Plan Housing Element goal and policies. In addition, providing more options for developers to comply with affordable housing requirements furthers General Plan Land Use Element policies to encourage a mix of residential housing types and accommodate the diverse housing needs of the community. 2. Zoning Text Amendment No. 19-004 is compatible with the uses authorized in, and the standards prescribed for, the zoning district for which it is proposed b ecause it does not propose any new land uses or revise development standards . The requirements provided in the Affordable Housing Ordinance are applicable to all residential projects of three or more units in any zoning district. The proposed amendments m aintain this requirement and do not change land use controls or development standards for any zoning district. 3. A community need is demonstrated for the changes proposed because the proposed amendments will continue to facilitate the provision of afford able housing for all economic segments of the City. Additionally, the proposed amendments will further the production of affordable housing for lower income households through updated requirements for on -site affordable rental units and allowances for the payment of in-lieu fees. 4. Its adoption will be in conformity with public convenience, general welfare and good zoning practice because ZTA No. 19-004 ensures the code is clear, current, consistently adapting to market trends, and reflective of the City’s ongoing effort to enhance housing affordability to modest income households. 278 279 280 281 282 283 284 285 286 287 288 289 1 230.26 Affordable Housing A. Purpose. 1. The purpose and intent of this chapter is to create an Inclusionary Housing Ordinance to enhance the public welfare and implement the goals, objectives and policies of the City’s General Plan, including its Housing Element. It is intended to encourage the supply of extremely low, very low, lower, and moderate- income housing., which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2. This Inclusionary Housing Ordinance The affordable housing program is one a tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors. , and to meet its regional fair-share requirements for construction of affordable housing. 3. As a result of being located within a redevelopment area and/or Specific Plan area, additional restrictions or requirements may apply. B. Definitions. 1. Affordable Housing Cost. The percentage of income that shall be utilized to determine the maximum housing related costs as calculated in accordance with California Health and Safety Code (H&SC) Section 50052.5 (standards for ownership units) and H&SC Section 50053 (standards for rental units). 2. Affordable Housing Unit. A dwelling unit required by this Section to be affordable to Extremely Low, Very Low, Lower, or Moderate Income Households. Accessory dwelling units (ADUs) do not satisfy the affordable housing obligation nor do they trigger the affordable housing obligation. 3. Area Median Income. The midpoint of a County’s gross income distribution adjusted for household size as determined by the California Housing and Community Development Department (HCD) annually. 4. Extremely Low-Income. Households whose incomes meet the standards defined by the H&SC Section 50106, or a successor statute. 5. Lower Income. Households whose incomes meet the standards defined by the H&SC Section 50079.5, or a successor statute. 6. Moderate-Income. Households whose incomes meet the standards defined by the H&SC Section 50093, or a successor statute. 7. New Residential Project. Development that includes the creation of three or more new dwelling units, conversion of nonresidential uses to dwelling units, or the conversion of a use from a residential rental development to a residential ownership development. 8. Ownership Units. Dwelling units constructed as part of a New Residential Project, or contained within a rehabilitation project, offered for individual unit sale, including, but not limited to, single -family detached or attached homes, condominiums, or cooperatives. 9. Phasing Plan. A detailed plan provided by a developer that outlines each segment or phase of construction including housing units and site improvements to be developed in a New Residential Project. 10. Very Low-Income. Households whose incomes meet the standards defined by the H&SC Section 50105, or a successor statute. 290 2 B C. Applicability. This section Section shall apply to new residential projects New Residential Projects of three or more units in size not located in a Specific Plan. Projects located within a Specific Plan shall defer to the Specific Plan for affordable housing requirements. 1. Affordable Housing Obligations. All New Residential Projects must be restricted, as for herein, to contain a A minimum of 10% of Affordable Housing Units. all new residential construction shall be affordable housing units. The whole number established by dividing the total unit count proposed by 10 shall be affordable housing units In the event a fractional unit is established, the Affordable Housing Unit count shall be rounded up unless paragraph (B C)(4 2) of this section applies. For projects providing affordable units onsite, Any fractional amount may be paid with an equivalent in-lieu fee may be paid instead of rounding up. 2. Rental units included in the project shall be made available to low-income households as defined by Health and Safety Code Section 50079.5, or a successor statute. Rental units included in the project may be made available to moderate-income households as defined by Health and Safety Code Section 50093, or a successor statute if the moderate-income units are located on-site within the project. 3. For sale units included in the project shall be made available to moderate-income households, as defined by Health and Safety Code Section 50093, or a successor statute. 4. Developers of residential projects consisting of 30 or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of this section, unless the affordable housing requirement is outlined as part of a Specific Plan project. 5 2. Developers of residential projects may elect to provide fulfill the affordable housing obligations imposed by this Section by providing Affordable Housing Units at the New Residential Project site pursuant to subsection D below (onsite production) or through an applicable alternative compliance option as provided by subsection E below (alternatives to onsite production). the affordable units at an off-site location pursuant to subsection B of this section unless otherwise outlined as part of a Specific Plan project. If affordable units are off-site, they must be under the full control of the applicant, or other approved party. 6 3. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of Aaffordable Hhousing Uunits, only new units shall be counted. Construction of an accessory dwelling unit does not trigger the affordable housing obligation. C. Fees in Lieu of Construction. 1. Fees paid to fulfill the requirements of this section shall be placed in the City’s Affordable Housing Trust Fund, the use of which is governed by subsection E of this section. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established by resolution of the City Council. 3. One hundred percent of the fees required by this section shall be paid prior to issuance of a building permit. [Ordinance. No. 3827 (expired 4/15/10) and Ordinance No. 3879, effective from 5/3/10 to 5/3/11, temporarily deferred the payment of certain Development Impact Fees.] 291 3 4. Fees paid as a result of new residential projects shall be based upon the total number of the new residential units which are to be constructed. D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off-site, at one or several sites, within the City of Huntington Beach. 1. Off-site projects may be new construction or substantial rehabilitation, as defined by Government Code Section 33413 affordable housing production requirements, of existing non-restricted units conditioned upon being restricted to long-term affordability. “At risk” units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant’s reasonable progress towards attainment of completion, of the affordable units. 3. The number of units to be provided off site shall be consistent with the requirements of this chapter. 4. All off-site inclusionary units will contain on average the same number of bedrooms as the non-inclusionary units in the project, and shall be comparable with the non-inclusionary units in terms of square footage of individual units, overall unit mix, appearance, finished quality, materials, and even distribution throughout the site. D. Options for Fulfilling Affordable Housing Obligations: On-Site Production 1. Affordable Ownership Housing Units a. Pursuant to Section 230.26(F), New Residential Project Owners or Developers shall place an affordability covenant on Ownership Units that is set at the Moderate- Income Household affordability level. b. The Affordable Housing Units shall be built concurrently with the market rate units, as provided for with an approved phasing plan. c. The bedroom mix for the affordable units shall be proportional to the bedroom mix of the market rate units. The affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units. d. The exterior and interior improvements, finishes, appliance packages, etc for the affordable units shall be comparable to the base level market rate units. 2. Affordable Rental Housing Units within an Ownership Housing Project a. The affordability covenant placed on the rental units is set at the Low-Income Household affordability level, but the developer may choose to fulfill the affordable housing requirement with units at the Very-Low or Extremely-Low Income Household affordability level. b. A market rate developer may create a separate affordable housing parcel within the New Residential Project site and enter into an agreement with an affordable housing developer to construct, own, and operate the affordable housing units. The 292 4 affordable housing developer is required to enter into an Affordable Housing Agreement with the City, subject to the following: i. The affordable housing developer shall have recent relevant experience and be approved by the Community Development Director or their designee. ii. The affordable housing developer and/or market rate developer may not request any financial assistance from the City. c. The bedroom mix is not required to match the unit mix provided in the market rate ownership housing project. At least 40% of the affordable units shall include at least two bedrooms. d. The Affordable Housing Units shall be built concurrently with the market rate project. The Affordable Housing Units may be constructed in phases if the market rate project is developed in phases, with an approved phasing plan. 3. Affordable Rental Housing Units a. Pursuant to Section 230.26(F), New Residential Project owners or developers shall place an affordability covenant on rental units at the Low-Income Household affordability level, but the developer may choose to fulfill the affordable housing requirement with units at the Very-Low or Extremely-Low Income Household affordability level. b. The Affordable Housing Units shall be built concurrently with the market rate project. The Affordable Housing Units may be constructed in phases if the market rate project is developed in phases, with an approved Phasing Plan. c. The bedroom mix for the affordable units shall be proportional to the bedroom mix of the market rate units. The affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units. d. The minimum construction standards for interior improvements of the Affordable Housing Units shall be the same as those imposed by the Low-Income Housing Tax Credit (LIHTC) program. E. Options for Fulfilling Affordable Housing Obligations: Alternatives to On-Site Production 1. Off-Site Production of Affordable Housing Units a. Except as may be required by the California Coastal Act or Government Code Section 65590 or a successor statute, developers may provide the required Affordable Housing Units off-site, at one or several sites, within the City of Huntington Beach. b. Pursuant to Section 230.26(F), New Residential Project owners or developers shall place an affordability covenant on the off-site units that is set at 15% of the total number of units included in the New Residential Project that generated the affordable housing obligation. The affordability covenant placed on the off-site Affordable Housing Units shall be at the Low-Income Household affordability level, but the developer may choose to fulfill the affordable housing requirement with units at the Very-Low or Extremely-Low Income Household affordability level. The affordability covenant shall specify the off-site Affordable Housing Units shall be rental units. 293 5 b. The provision of the off-site Affordable Housing Units shall not create an over concentration of Affordable Housing Units in any specific area. c. The design, building quality, and maintenance standards shall be the requirements imposed by the LIHTC minimum construction standards. d. The bedroom mix for the affordable units is not required to match the mix provided in the market rate project that is subject to the affordable housing obligations. At minimum, 40% of the affordable units shall include at least two bedrooms. e. Pursuant to Section 230.26(F), the market rate developer may enter into an agreement with an affordable housing developer to construct, own and operate the off-site affordable housing project. The affordable housing developer is required to enter into an Affordable Housing Agreement with the City, subject to the following: i. The affordable housing developer shall have recent relevant experience and be approved by the Community Development Director or their designee. ii. The affordable housing developer and/or market rate developer may not request any financial assistance from the City. iii. All off-site affordable units shall be constructed prior to or concurrently with the market rate project that generated the affordable housing obligation. If the market rate project is developed in phases, with an approved Phasing Plan, the affordable units may be developed along with the first phase of the market rate project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant’s reasonable progress towards attainment of completion, of the affordable units. 2. Existing Units Acquisition and Rehabilitation Projects The City Council has the discretion, but not the requirement, to approve a developer’s request to acquire, rehabilitate, and place affordability covenants on existing off-site units. The request shall meet either of the following threshold requirements in order to fulfill a project’s affordable housing obligation: a. The project(s) shall be identified as at-risk in the City’s Housing Element; or b. The project is a motel that can be adaptively reused as residential units. Additional requirements for acquisition and rehabilitation projects: a. The affordable housing requirement is equal to at least 20% of the units in the project that trigged the affordable housing obligation. b. The rents charged for the rehabilitated units shall be set at the lesser of the H&SC 50053 rents or at least 10% discount from the achievable market rents for the units, subject to annual monitoring and reporting. c. If there are more units in the acquisition and rehabilitation project than are required to fulfill the affordable housing requirement, those units may be rented at market rate. 3. Land Dedication. 294 6 The City Council has the discretion, but not the requirement, to allow a developer to dedicate property in lieu of constructing Affordable Housing Units. The following requirements are applicable to any property proposed to be dedicated: a. The property shall be located within the City of Huntington Beach. b. The developer shall convey the property to the City at no cost. c. The property proposed to be dedicated shall yield a minimum of 20% of the total units constructed within the market rate project: i. The site’s existing General Plan and zoning standards shall allow for a residential use at a density sufficient to allow for the requisite number of affordable units to be developed without a density bonus request. ii. The site shall be suitable in terms of size, configuration, and physical characteristics to allow for the requisite number of affordable units to be developed on a cost efficient basis. iii. The bedroom mix for the affordable units shall be proportional to the bedroom mix of the market rate units. The affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units. d. The developer shall provide evidence of the following when the land dedication proposal is submitted: i. A title report showing the developer/owner has lien-free, fee simple title. Any encumbrances or easements that adversely impact the property’s title shall be disclosed and will be factored into the estimated value of the interests proposed to be conveyed to the City. ii. An appraisal dated within 30 days of the application by a Member Appraisal Institute (MAI) appraiser. iii. A Phase I Environmental Site Assessment and a Phase II Environmental Site Assessment if the Phase I report indicates that hazardous materials were potentially previously used on the site. iv. The property shall not contain any hazardous materials at the time the land dedication proposal is submitted. If hazardous materials were previously remediated, a site closure letter from the appropriate regulatory agency showing evidence that the site was remediated to residential standards is required. e. The property shall not have been improved with any residential use for at least five years prior to the submission of a land dedication proposal. f. Payment in full of all taxes and/or assessments shall have been made when the proposal is submitted, and again prior to conveyance of the property to the City. g. The construction of affordable units on the property shall not create an over concentration of low income housing in any specific area. h. The property shall be fully served by the necessary infrastructure prior to conveyance to the City. i. To assist the City in evaluating land dedication proposals, the developer shall submit a conceptual site plan and narrative description of a project that could be developed on the property. 4. Fee Payment in Lieu of Construction 295 7 a. Developers of the following New Residential Project types may pay an in-lieu fee to fulfill affordable housing obligations: i. Ownership residential projects proposing any number of units. ii. Rental residential projects proposing 100 units or fewer. b. The amount of the in-lieu fees shall be calculated using the fee schedule established by resolution of the City Council. c. A project may be permitted to pay in-lieu fees if it does not meet the eligibility standards of this section if the City Council determines, at its discretion, that the requirement to provide affordable housing units would impose an extreme hardship on the developer. d. One hundred percent of the fees required by this section shall be paid prior to issuance of a building permit. However, for phased projects the developer may pay a pro rata share of the in-lieu fee concurrently with the issuance of building permits for each development phase, as approved by a Phasing Plan. e. Fees paid to fulfill the requirements of this section shall be placed in the City’s Affordable Housing Trust Fund, the use of which is governed by subsection F of this section. f. Fees paid as a result of new residential projects shall be based upon the total number of the new residential units which are to be constructed prior to the grant of any density bonus. E F. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: a. The density bonus being provided pursuant to Section 230.14, if any; b. The number of affordable units; c. The number of units at each income level as defined by the Health and Safety Code; and d. A list of any other incentives offered by the City. 2 1. An Affordable Housing Agreement placing a covenant that runs with the land and outlining all aspects of the aAffordable hHousing provisionsObligations, including but not limited to the affordability term for the restricted units, shall be executed between the applicant and the City and recorded with the Orange County Recorder’s Office, or the applicable in-lieu fee shall be paid in full, prior to issuance of the first building permit. 3 2. The Affordable Housing aAgreement shall specify an affordability term of not less than 55 years for rental housing units or 45 years for ownership housing units. 4. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant’s reasonable progress towards attainment of completion, of the affordable units. 5. All affordable units shall be reasonably located throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. 63. In general, the Affordable Housing Trust Funds shall be used for projects which have a minimum of 50% of the dwelling units affordable to very low- and low-income households, 296 8 with at least 20% of the units available to very low-income households. Concurrent with establishing the annual fee schedule pursuant to subsection C E of this section, the City Council shall by resolution set forth the additional permitted uses of Affordable Housing Trust Funds. All units that To obtain Affordable Housing Trust Funds, the recipient shall enter into an affordable housing agreement as set forth above, and shall maintain the affordability of the units for a minimum of 55 years. The funds may, at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. 7 4. New affordable units shall be occupied in the following manner: a. Any existing residents shall be allowed to occupy their units until six months before the start of construction activities with proper notice. ab. The developer shall provide relocation benefits to the occupants of the affordable units that are displaced. b.c. If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements, he/she shall be given the right of first refusal to occupy the affordable a comparable unit(s); available in the new housing development affordable to the household at an affordable rent (e.g. Extremely-Low Income, Very-Low Income, Low-Income, Moderate Income, Market Rate). cd. If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected. F. Price of Affordable Units. Affordable housing cost shall be calculated in accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units. This methodology is fully described in the City’s adopted housing policies. G. Reduced Fees for Affordable Housing. Projects that exceed inclusionary requirements on-site will be eligible for reduced City fees, pursuant to an Affordable Housing Fee Reduction Ordinance, upon adoption by the City Council. G H. Annual Program Review and Periodic Adjustment of the Fee. Within 180 days after the last day of each fiscal year, the City Council shall review the status of the City’s Affordable Housing Trust Fund, including the amount of fees collected, expenditures from the Affordable Housing Trust Fund, and the degree to which the fees collected pursuant to this chapter are assisting the City to provide and encourage low- and moderate-income housing. The fee shall be updated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern California. The fee change shall be based on the percentage difference in the new home prices in Orange County published in the fourth quarter report for the then current year versus the immediately preceding year. (3687-12/04, 3827-4/09, 3829-6/09, 3879-6/10, 4040-12/14) 297 298 299 300 500 SOUTH GRAND AVENUE, SUITE 1480  LOS ANGELES, CALIFORNIA 90071  PHONE 213.622.8095 2004014.HB:KHH WWW.KEYSERMARSTON.COM 14066.011.001 ADVISORS IN: Real Estate Affordable Housing Economic Development BERKELEY A. Jerry Keyser Timothy C. Kelly Debbie M. Kern David Doezema Kevin Feeney LOS ANGELES Kathleen H. Head James A. Rabe Gregory D. Soo-Hoo Kevin E. Engstrom Julie L. Romey Tim R. Bretz SAN DIEGO Paul C. Marra MEMORANDUM To: Ursula Luna-Reynosa, Community Development Director City of Huntington Beach From: Kathleen Head Date: May 6, 2020 Subject: Inclusionary Housing :Policy & Implementation Recommendations Keyser Marston Associates, Inc. (KMA) was engaged by the City of Huntington Beach (City) to assist in updating the requirements imposed by the Inclusionary Housing Ordinance. The update was undertaken for the following reasons: 1. To evaluate the impacts created by real estate economic changes and increases in the unmet need for affordable housing that have occurred since the Inclusionary Housing Ordinance requirements were last modified in 2011. 2. To modify the Inclusionary Housing requirements with the intention of achieving the following goals: a. To maximize the program’s efficiency; and b. To match the requirements to the types of housing being developed. KMA prepared the accompanying Financial Analysis: Inclusionary Housing Ordinance Update (Financial Analysis) to evaluate the economic characteristics of the Inclusionary Housing program as implemented since 2011. 1 The Financial Analysis serves as the foundation KMA used for creating a package of Inclusionary Housing policy and implementation recommendations. 1 Capitalized terms used throughout this memorandum are defined in the Financial Analysis. 301 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 2 2004014.HB:KHH 14066.011.001 BACKGROUND Based on the results of the Financial Analysis, KMA reached the following key conclusions: 1. Current Inclusionary Housing Requirements: a. The 10% moderate income requirement for ownership housing development continues to be supportable. b. The 10% low income requirement for rental apartment projects is supportable. There is no need to provide an option for moderate income units to be used as a substitute when the units are provided on site within a market rate project. 2. The maximum in-lieu fee amounts that can currently be supported on a financially feasible basis were estimated as follows: Maximum Financially Feasible In-Lieu Fees Ownership Housing Rental Apartments Inclusionary Housing Requirement 10% Moderate Income 10% Low Income In-Lieu Fee Amounts Per Affordable Unit $504,700 $332,000 Per Total Unit $50,470 $33,200 Per Square Foot of Saleable/Leasable Area $25.36 $35.80 Recommended Policy and Implementation Package The Inclusionary Housing policy and implementation recommendations package consists of the following components: 1. The minimum residential project size that triggers an Inclusionary Housing obligation. 302 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 3 2004014.HB:KHH 14066.011.001 2. The income and affordability requirements that will be applied to ownership housing and rental apartment projects. 3. The covenant periods under which the income and affordability standards should be imposed for ownership housing and rental apartment projects. 4. To mitigate the financial impacts created by the imposition of Inclusionary Housing requirements options need to be provided that are tailored to the type of housing being developed. The following options are proposed to be offered under specified circumstances: a. On-site production; b. Off-site production; c. In-Lieu Fee Payment; d. Land Dedication; and e. Acquisition and rehabilitation of existing apartment units. 5. Implementation activities that should be undertaken by the City. Case Studies To assist the City in evaluating the proposed policy and implementation recommendations KMA prepared comparisons of the Inclusionary Housing options that could potentially be applied to a hypothetical project. Hypothetical projects are analyzed for an ownership housing project and a rental apartment project. RECOMMENDED POLICY AND IMPLEMENTATION PACKAGE Threshold Project Size The majority of Inclusionary Housing programs in California include a threshold project size below which projects are not subject to the affordable housing production requirements. Common thresholds fall between three and 10 units. KMA recommends that the threshold project size be maintained at the three unit standard imposed by the City’s existing Inclusionary Housing Ordinance. 303 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 4 2004014.HB:KHH 14066.011.001 It is important to understand that Inclusionary Housing requirements create a significant impact on smaller projects, because the financial impact created by the affordable housing requirement is spread over a small number of market rate units. The other issues to consider are: 1. Given the magnitude of the Affordability Gaps associated with ownership housing projects, small infill projects are disproportionately impacted by an affordable housing production requirement.2 2. Small rental apartment projects are often self-managed by owners that do not have experience owning and operating affordable housing units. 3. Monitoring and administering Inclusionary Units in small projects that are scattered throughout Huntington Beach will be a labor intensive obligation for City staff. It is KMA’s recommendation that projects with fewer than 100 units should be allowed to pay a fee in lieu of developing the required number of Inclusionary Housing units. At a 10% Inclusionary Housing requirement, a 100 unit project would generate a 10-unit Inclusionary Housing obligation. This is a sufficient number of affordable housing units to support the efficient management and administration of the units. KMA recommends that a graduated in-lieu fee schedule continue to be offered in the updated Inclusionary Housing Ordinance. The recommended in-lieu fee payment structure is discussed further in the Inclusionary Housing production option section of this memorandum. Income and Affordability Standards An Inclusionary Housing program’s income and affordability standards should be set at levels that do not constrain residential development. Based on the results of the Financial Analysis, KMA determined that the following Inclusionary Housing requirements can be supported. 2 The Affordability Gap is defined as the difference between the achievable market rate sales prices or rents and the Affordable Sales Prices or Affordable Rents for the Inclusionary Housing units. 304 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 5 2004014.HB:KHH 14066.011.001 Ownership Housing Projects Inclusionary Housing Requirement KMA recommends that the City continue to designate moderate income units as the affordable housing type for ownership housing projects. Based on the Financial Analysis, KMA recommends that the affordable housing requirement remain at 10% of the units in an ownership housing project. Affordable Sales Price Calculation Methodology KMA strongly recommends that the City make modifications to the methodology used to estimate the Affordable Sales Prices. The specific issues relate to the methodology used to set the benchmark mortgage interest rate and the allowable range of home buyer down payments. Benchmark Mortgage Interest Rate In practice, the City has been using the lowest interest rate published during the preceding three month period. As an example, the rate being applied by the City in April 2020 is 2.46%. This rate is significantly lower than the rates for which typical moderate income home buyers will be able to qualify. Common reasons for this are: 1. Credit history and scores that do not fall within the exceptional level required to obtain the lowest interest rate available in the marketplace; 2. Back-end ratios that are often higher than the typical ratios applied in conventional lenders’ underwriting standards for the lowest interest rate mortgages; 3. The lowest published interest rate is often a teaser rate that will ultimately adjust to a higher rate that will be unaffordable to the moderate income home buyer; and 4. There is a limited pool of mortgage lenders that are willing to provide loans on homes that are subject to long-term irrevocable resale restrictions. These lenders do not generally offer the lowest interest rates available in the marketplace. 305 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 6 2004014.HB:KHH 14066.011.001 The use of the lowest published interest rate is not required by the Inclusionary Housing Ordinance or by the Affordable Ownership Housing Regulations. The application of this metric generates extremely high Affordable Sales Prices, which can actually only be achieved by home buyers with the ability to make an extraordinarily large down payment. KMA recommends that the City modify the policy being used to set the mortgage interest rate that is applied in the Affordable Sales Price calculations. KMA typically uses the Bankrate sitewide average annual percentage rate (APR) for 30-year fixed interest rate mortgages. In addition, KMA recommends that the benchmark interest rate be set on the on the first day of each calendar quarter. Range of Allowable Home Buyer Down Payments The Affordable Ownership Housing Regulations set the maximum home buyer down payment at 50% of the Affordable Sales Price. The high end of this range was established when it became apparent that typical moderate income home buyers could not qualify for the mortgage loans required to support the Affordable Sales Prices being set by the City. The Inclusionary Housing program is intended to target home buyers that could otherwise not afford to purchase a home in Huntington Beach. Moderate income home buyers who have sufficient resources to fund a 50% down payment likely have other available opportunities to purchase a home. KMA recommends that the down payment requirements be modified as follows: 1. The minimum home buyer down payment amount should be set at 5% of the Affordable Sales Price. a. This down payment amount must be provided from the home buyer’s own funds. b. These funds cannot be provided using gifts or loans obtained by the home buyer. 306 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 7 2004014.HB:KHH 14066.011.001 2. The maximum down payment amount should be set at 20% of the Affordable Sales Price. Gift funds may be used for the down payment amount that falls between 5% and 20% of the Affordable Sales Price. Rental Apartment Projects The existing Inclusionary Housing Ordinance applies a 10% low income affordable housing requirement to rental apartment projects. However, the Inclusionary Housing Ordinance gives the City discretion to permit a developer to substitute moderate income units for the low income requirements. Based on the City’s RHNA targets, and the results of the Financial Analysis, KMA recommends that the updated Inclusionary Housing Ordinance should maintain the 10% low income housing requirement. The moderate income option should be eliminated. A significant number of large scale apartment projects that have been developed in Huntington Beach have made use of the Government Code Sections 65915 – 65918 (Section 65915) density bonus. It should be assumed that developers will continue to use this approach as a means of mitigating the financial impacts created by an Inclusionary Housing requirement. Covenant Periods Ownership Housing Projects KMA recommends that the covenant period for affordable ownership housing units continue to be set at one cumulative 45-year period. Within that one 45-year period the home must be sold and resold to moderate income households at the then current Affordable Sales Price. Rental Apartment Projects KMA recommends that the covenants for the Inclusionary Housing rental apartment units should remain in place for as long as the property is developed with a residential use, but for not less than 55 years. Following the 55-year term, the covenant should only be removed if at some point the property is rezoned and subsequently put to a non-residential use. 307 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 8 2004014.HB:KHH 14066.011.001 Options for Fulfilling Inclusionary Housing Obligations On-Site Production of Inclusionary Housing Units Ownership Housing Projects By right, developers of ownership housing projects can fulfill the project’s Inclusionary Housing obligations on site within the market rate project. Developers that wish to fulfill the Inclusionary Housing obligations on site should be provided with option to select one of the following fulfillment structures: Development of Affordable Ownership Housing Units The following standards mirror the Inclusionary Housing requirements currently being imposed by the City. These development parameters fall within the typical range for Inclusionary Housing programs throughout California, and KMA recommends that they be included in the updated Inclusionary Housing Ordinance. 1. The Inclusionary Housing obligation is set at 10% of the total number of units to be constructed on the site. 2. The following income and affordability standards are applied: a. The affordability requirement is set at the moderate income level. b. The Affordable Sales Prices must be calculated using the H&SC Section 50052.5 standards. 3. The affordable housing units must be built concurrently with the market rate project. The affordable units can be constructed in phases if the market rate project is being developed in phases. 4. The affordable housing units must comply with the following development scope requirements: a. The bedroom mix for the affordable units must be proportional to the bedroom mix of the market rate units. However, the affordable units may be smaller in square footage than the market rate units. 308 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 9 2004014.HB:KHH 14066.011.001 b. The exterior improvements for the affordable units must be comparable to the exterior improvements for the market rate units. c. The interior improvements for the affordable units must meet the following standards: i. The interior finished must be comparable to the base level interior finishes provided in the market rate units; and ii. The appliance packages must be the same as the packages provided in the base level market rate units. Development of Affordable Rental Apartments within an Ownership Housing Project If the developer of an ownership housing project is willing to fulfill the project’s Inclusionary Housing requirement with rental apartment units, KMA recommends that the following requirements be applied in the updated Inclusionary Housing Ordinance: 1. The developer should be allowed to create a separate affordable housing parcel within their development site to fulfill the project’s Inclusionary Housing obligations. 2. The developer of the market rate project can enter into an agreement with an affordable housing developer to construct, own and operate the affordable housing units: a. The affordable housing developer must have relevant recent experience, and must be approved by the City. b. The affordable housing developer may not request any financial assistance from the City. 3. The Inclusionary Housing obligation should be set at 10% of the total number of units to be constructed on the site. 4. The Inclusionary Housing obligation should be required to be fulfilled with rental apartment units that embody the following characteristics: 309 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 10 2004014.HB:KHH 14066.011.001 a. The threshold affordability standard is set at the low income level, but the developer should be provided with the discretion to fulfill the 10% requirement with very low income units. b. The rents must calculated using the H&SC Section 50053 standards. 5. The bedroom mix should not be required to match the unit mix provided in the market rate ownership housing project. However, at least 40% of the Inclusionary Housing units should be required to include at least two bedrooms. Rental Apartment Projects KMA recommends that the updated Inclusionary Housing Ordinance apply the following standards to the on-site fulfillment of the Inclusionary Housing requirements imposed on rental apartment projects: 1. The Inclusionary Housing obligation should be set at 10% of the total number of units to be constructed on the site. 3 2. The following income and affordability standards should be applied: a. The threshold affordability standard is set at the low income level, but the developer should be provided with the discretion to fulfill the requirement with very low income units. b. The Affordable Rents must be calculated using the H&SC Section 50053 standards. 3. The affordable housing units should be required to be constructed concurrently with the market rate project, and they must be dispersed throughout the project. 4. The affordable housing units should be required to comply with the following development scope requirements: 3 If a developer chooses to use a Section 65915 density bonus the Inclusionary Housing obligation must be set at the lesser of 10% of the total number of units to be constructed on the site or 10% of the total number of units allowed by the site’s base zoning standards. 310 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 11 2004014.HB:KHH 14066.011.001 a. The bedroom mix for the affordable units must be proportional to the bedroom mix of the market rate units. However, the affordable units may be smaller in square footage than the market rate units. b. The interior improvements of the Inclusionary Housing units must comport with defined quality standards such as those applied by the Tax Credit program The market rate units in the project can include enhanced interior improvements. Off-Site Production of Inclusionary Housing Units KMA recommends that the updated Inclusionary Housing Ordinance allow a developer to fulfill the Inclusionary Housing obligations in an off-site location under the following conditions: 1. The development parcel should be required to be located within one mile of the market rate project that is subject to the Inclusionary Housing obligations. 2. The development must not create an over concentration of deed restricted affordable housing units in any specific neighborhood.4 3. Irrespective of the market rate project’s tenure, the Inclusionary Housing obligation should be required to be fulfilled with rental apartment units. 4. The Inclusionary Housing obligation should be set at 15% of the total units included in the market rate project that generated the Inclusionary Housing requirements 5. The following income and affordability standards should be applied: a. The affordability standard should be set at the low income level, but developers should be provided with the discretion to fulfill the obligation with very low income units. 4 Over concentration is defined as more than 50 covenanted very low or low income units within ¼ mile, or more than 200 such units within ½ mile of the of the proposed affordable housing site. 311 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 12 2004014.HB:KHH 14066.011.001 b. The Affordable Rents must be calculated using the H&SC Section 50053 standards. 6. Design, building quality and maintenance standards should be based on a defined standard such as the requirements imposed by the Tax Credit program. 7. The bedroom mix should not be required to match the unit mix provided in the market rate single family home project. However, at least 40% of the units should be required to include at least two bedrooms. 8. Under the following circumstances the developer of the market rate project can enter into an agreement with an affordable housing developer to construct, own and operate the affordable housing project: a. The affordable housing developer must have recent relevant experience, and be approved by the City. b. The affordable housing developer may not request any financial assistance from the City. c. The developer may apply to use the Section 65915 density bonus and the statutorily established number of incentives or concessions. 9. The affordable housing project should be required to be constructed prior to or concurrent with the market rate project that triggered the Inclusionary Housing obligation. If the market rate project is proposed to be developed in phases, the affordable housing project should be required to be developed along with the first phase of the market rate project. In-Lieu Fee Payment Option As currently implemented, the City allows developers of projects that include 30 or fewer units to pay a fee in lieu of producing affordable housing units. The in-lieu fee can also be paid to fulfill a fractional unit affordable housing obligation. KMA recommends that the updated Inclusionary Housing Ordinance should encourage the use of an in-lieu fee payment options for premium priced ownership housing and rental apartment projects. The key advantages of this strategy are: 312 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 13 2004014.HB:KHH 14066.011.001 1. The City can target the use of the in-lieu fee revenue to projects undertaken by developers that have specific expertise in the development and operation of affordable housing projects. 2. The in-lieu fee revenues can be used as a leveraging source for dedicated affordable housing projects that have access to outside public funding sources. This leveraging creates a more cost-efficient way to achieve deeper affordability than can be supported by an Inclusionary Housing requirement alone. In-Lieu Fee Payment Thresholds KMA recommends that the in-lieu fee payment option be updated to allow developers to pay the fee by right in the following circumstances: 1. Single family home developments of any size should be provided with the option to pay an in-lieu fee. 2. Condominium/townhome ownership housing projects and rental apartment projects with fewer than 100 units should be allowed to pay an in-lieu fee. 3. An In-lieu fee payment option for a fractional affordable housing obligation should continue to be offered by the City. 4. For projects that do not meet the defined standards, the City Council should be provided with the discretion to allow an in-lieu fee to be paid if hardship circumstances are demonstrated. In-Lieu Fee Schedules The existing Inclusionary Housing Ordinance provides a graduated in-lieu fee schedule to reflect the fact that Inclusionary Housing requirements have a disproportionate impact on smaller projects. KMA recommends that a graduated in-lieu fee schedule continue to be offered in the updated Inclusionary Housing Ordinance. It is KMA’s opinion that an in-lieu fee measured against the square footages of the units corresponds more closely to the Affordability Gap associated with the market rate units being developed. As such, it is KMA’s recommendation that the in-lieu fee schedules in 313 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 14 2004014.HB:KHH 14066.011.001 the updated Inclusionary Housing Ordinance be based on the net saleable area for ownership housing projects and the net leasable area for rental apartment projects. KMA created recommended in-lieu fee schedules that discount the in-lieu fee on a pro rata basis for projects with between three and 30 units. For projects with more than 30 units the in-lieu fee is a fixed dollar amount per square foot of saleable or leasable area. Based on the results of the Financial Analysis, KMA recommends that the following in- lieu payment schedules be applied in the first year following the adoption of an updated Inclusionary Housing Ordinance: Recommended In-Lieu Fee Schedules Per Square Foot of Net Saleable Area or Net Leasable Area # of Units Ownership Housing Rental Apartments # of Units Ownership Housing Rental Apartments 3 $2.54 $3.58 17 $14.37 $20.29 4 $3.38 $4.77 18 $15.22 $21.48 5 $4.23 $5.97 19 $16.06 $22.67 6 $5.07 $7.16 20 $16.91 $23.87 7 $5.92 $8.35 21 $17.75 $25.06 8 $6.76 $9.55 22 $18.60 $26.25 9 $7.61 $10.74 23 $19.44 $27.45 10 $8.45 $11.93 24 $20.29 $28.64 11 $9.30 $13.13 25 $21.13 $29.83 12 $10.14 $14.32 26 $21.98 $31.03 13 $10.99 $15.51 27 $22.83 $32.22 14 $11.84 $16.71 28 $23.67 $33.41 15 $12.68 $17.90 29 $24.52 $34.61 16 $13.53 $19.09 30+ $25.36 $35.80 314 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 15 2004014.HB:KHH 14066.011.001 In-Lieu Payment Timing Developers should be required to pay the in-lieu fee when building permits are obtained for the project. However, for phased projects the developer should be allowed to pay a pro rata share of the in-lieu fee concurrently with the issuance of building permits for each development phase. Land Dedications The City Council should have the discretion, but not the requirement, to approve a developer’s proposal to dedicate property in lieu of producing Inclusionary Housing units. KMA recommends that the following threshold requirements should be imposed for any property put forth for City Council consideration: 1. The developer must be willing to convey the property to the City at no cost. 2. The developer must provide evidence of the following when the land dedication proposal is submitted: a. The developer must have site control with lien-free title. Any encumbrances or easements that adversely impact the property’s title must be disclosed and factored into the estimated value of the interests proposed to be conveyed to the City. b. The property cannot contain any hazardous materials at the time the land dedication proposal is submitted: i. The developer must disclose whether any hazardous materials were previously contained on the site; and ii. If hazardous materials were previously remediated, the developer must provide evidence that the cleanup was performed in accordance with applicable law. c. The property cannot have been improved with any residential use for at least five years prior to the submission of a land dedication proposal. 315 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 16 2004014.HB:KHH 14066.011.001 d. Payment in full of all property taxes and special taxes must have been made when the proposal is submitted, and again prior to conveyance of the property to the City. 3. The property must embody the following characteristics: a. The property must be located within one-mile of the project that is subject to the Inclusionary Housing obligation. b. The construction of affordable housing units on the property must not create an over concentration of low income housing in any specific neighborhood. c. The number of units that must be able to be developed on a land dedication site should be set at 20% of the total units being constructed within the market rate project: i. The site’s existing General Plan and zoning standards must allow for a residential use at a density sufficient to allow for the requisite number of affordable units to be developed. ii. The site must be suitable in terms of size, configuration, and physical characteristics to allow for the requisite number of affordable units to be developed on a cost efficient basis. d. The property must be fully served by the necessary infrastructure prior to conveyance to the City. 4. It is the City’s goal to convey dedicated properties to developers with experience developing affordable rental apartment projects targeted to very low income households. To assist the City in evaluating land dedication proposals, the developer should be required to submit the following documents: a. A conceptual site plan and narrative description of a project that could be developed on the property. 316 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 17 2004014.HB:KHH 14066.011.001 b. A pro forma analysis that quantifies any financial gap associated with the identified development scope, and describes how this financial gap will be filled. c. If a Section 65915 density bonus will be required, the terms of the necessary density bonus must be identified. Prior to submitting a proposal to the City Council for consideration, the City staff should independently evaluate the information submitted by the developer. Based on that review the City should determine whether the proposal meets the threshold standards proposed to be included in the updated Inclusionary Housing Ordinance. Acquisition and Rehabilitation Projects The Inclusionary Housing Ordinance is one tool the City is using to assist in meeting its RHNA targets. The only way that the acquisition and rehabilitation of existing units can be used to obtain RHNA credit is if the following conditions are met: 1. The project(s) must be identified in the City’s Housing Element; and 2. The units must be in need of substantial rehabilitation as defined by H&SC Section 33413 (2) (A) (iv). For projects that meet both of these requirements, the City Council should have the discretion, but not the requirement, to approve a developer’s acquisition and rehabilitation proposal. KMA recommends that this option only be approved if the proposed acquisition and rehabilitation project provides more affordable units at deeper affordability than would be achieved under any of the other Inclusionary Housing options discussed in this memorandum. The additional threshold requirements that should be imposed on acquisition and rehabilitation projects are: 1. The project must meet one of the following criteria: a. The project includes affordable units that are at risk of being converted to market rate units within a five year period; or b. The project is a motel that can be adaptively reused as residential units. 317 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 18 2004014.HB:KHH 14066.011.001 2. The Inclusionary Housing requirement is equal to at least 20% of the units in the project that trigged the Inclusionary Housing obligation: a. The rents charged for the Inclusionary Housing units must be set at the lesser of the H&SC 50053 rents or an at least 10% discount from the achievable market rents for the units. b. If there are more units in the acquisition and rehabilitation project than are required to fulfill the Inclusionary Housing requirement, those units may be rented at unrestricted market rate rents. 3. Any very low or low income households currently residing in the project must be provided with the following benefits: a. They must be allowed to stay in place following the acquisition and rehabilitation. b. The rents charged to these tenants must comport with the requirements imposed by H&SC Section 50053 for the tenant’s income level. c. Any temporary relocation costs incurred during the rehabilitation period must be paid for by the developer. d. These tenants can only be evicted on a just cause basis. Implementation Recommendations As part of the implementation process for the updated Inclusionary Housing Ordinance, the City should take the following actions: Section 65915 Density Bonus The City’s Section 65915 density bonus ordinance does not currently include all of the amendments the State Legislature has made between 2006 and 2019. Given that the Section 65915 density bonus is intended to reduce the financial impact created by the imposition of Inclusionary Housing requirements, KMA recommends that the City update Zoning Code Title 23, Chapter 230, Article I, Section 230.14 to reflect the current requirements. 318 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 19 2004014.HB:KHH 14066.011.001 Affordable Housing Regulations The following Inclusionary Housing Ordinance regulations documents should be updated: 1. Affordable Ownership Housing Regulations: Developer Requirements; 2. Affordable Ownership Housing Regulations: Owner Requirements; and 3. Affordable Rental Housing Regulations. Inclusionary Housing Program Updates The Inclusionary Housing program should be updated at regular intervals: 1. The entire program should be re-evaluated at least every five years. 2. To allow in-lieu fees to keep pace with changes in the market place during the intervening periods, the in-lieu fees should continue to be adjusted each year based on the percentage change in new home prices in Orange County as published annually by the Real Estate Research Council (RERC). Implementation Activities A staffing plan should be created for managing the development process and the ongoing monitoring of the Inclusionary Housing units once they are built. CASE STUDIES Background The following section of this memorandum describes case studies for a hypothetical ownership housing project and a hypothetical rental apartment project. Both projects include 250 units, but they are assumed to be developed at different densities and with different unit mixes. 319 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 20 2004014.HB:KHH 14066.011.001 The case studies identify each of the options available for fulfilling the Inclusionary Housing requirements. It is important to note that these case studies are based on the policy recommendations provided in this memorandum. If the City ultimately chooses to apply different requirements these case studies will need to be modified accordingly. Fulfillment Options that Vary Between Ownership Housing and Rental Apartments The following Inclusionary Housing fulfillment options vary between ownership housing and rental apartment projects: 1. Production of the Inclusionary Housing units on site within the market rate project; and 2. A fee payment in lieu of producing affordable housing units. The ownership housing and rental apartment project case studies are organized as follows: 1. The development scope assumptions are described. 2. The requirements associated with providing the Inclusionary Housing within the market rate projects are detailed. 3. An in-lieu fee payment estimate is provided for the hypothetical development. Standardized Fulfillment Options The other three fulfillment options for Inclusionary Housing requirements carry the same responsibilities irrespective of the market rate project’s tenure. The options are: 1. Production of the Inclusionary Housing Units in an off-site location; 2. Dedication of land to the City in lieu of producing affordable housing units; and 3. Acquisition and rehabilitation of existing units. 320 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 21 2004014.HB:KHH 14066.011.001 The descriptions of the three other fulfillment options include the following information: 1. The development scope assumptions that guide the Inclusionary Housing requirements; 2. The affordability requirements associated with each option; and 3. The unit mix standards applied to each option are presented. Ownership Housing Project: On-Site Production and In-Lieu Fee Options Development Scope Assumptions – Ownership Housing Project The development scope used the ownership housing hypothetical are: 1. The 250 unit project is developed on a 12.5-site. This represents a density of 20 units per acre. 2. The Inclusionary Housing obligation is equal to 25 units, which represents 10% of the units in the market rate project. 3. The project is developed in five phases. 4. The unit mix is detailed in the following table: Unit Mix Number of Bedrooms Number of Units Square Feet Per Unit 3 50 1,900 3 75 2,300 4 50 2,600 4 75 3,000 Total 250 622,500 321 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 22 2004014.HB:KHH 14066.011.001 On-Site Production Options – Ownership Housing Project As discussed previously in this memorandum, KMA recommends that developers be provided two alternative methods for fulfilling the Inclusionary Housing requirements on site within a market rate project. Both of these options can be selected by developers by right. The two alternatives can be described as follows: On-Site Production of Affordable Ownership Units In this alternative, the Inclusionary Housing obligation is fulfilled with ownership housing units that are interspersed throughout the market rate project. 1. The Inclusionary Housing requirement is set at 10% of the total number of units to be constructed on the site. This equates to 25 units out of the 250 proposed units. 2. The income restriction is set at the moderate income level. 3. The bedroom mix required to be applied to the Inclusionary Housing units is based on pro rata shares of the three- and four-bedroom units in the market rate project, allocated to the smaller of the unit types in each bedroom category. For the hypothetical project, the Inclusionary Housing units are distributed as follows: a. 13 three-bedroom units with saleable area of 1,900 square feet; and b. 12 four-bedroom units with saleable area of 2,600 square feet. 4. The project is assumed to be developed in five phases. Assuming the 250 units are divided equally across the five phases, five affordable units must be constructed in each phase. On-Site Production of Affordable Rental Apartment Units In this alternative the developer creates a separate parcel to accommodate the required Inclusionary Housing units. To exercise this option, the developer must agree to fulfill the Inclusionary Housing requirement with affordable rental apartment units. 322 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 23 2004014.HB:KHH 14066.011.001 1. The Inclusionary Housing requirement is set at 10% of the total number of units to be constructed on the site. This equates to 25 units out of the 250 proposed units. 2. The income restriction is set at the low income level. 3. The affordable units developed on the separate parcel are not required to match the unit mix provided in the market rate project. Instead, the following requirements are applied in this hypothetical case study: a. A maximum of 15 units (60%) can be studio or one-bedroom units; and b. At least 10 units (40%) must include two or more bedrooms. 4. All 25 affordable rental apartment units must be constructed prior to or concurrent with the construction of the first phase of the market rate ownership housing project. In-Lieu Fee Payment Option For the hypothetical 250 unit ownership housing project, a developer can use the in-lieu fee option under the following conditions: 1. A project that consists of single family homes can select the in-lieu fee option by right. 2. A condominium or townhome project would be required to obtain City Council approval in order to be allowed to use the in-lieu fee option.5 Based on the in-lieu fee schedule being recommended by KMA, the hypothetical ownership housing project would generate the following in-lieu fee payment obligation: 1. The total saleable area of the 250 unit market rate project is 622,500 square feet. 2. The in-lieu fee for projects that include 30 or more units is $25.36 per square foot of saleable area. 5 A condominium or townhome project with up to 100 units can select the in-lieu fee option by right. 323 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 24 2004014.HB:KHH 14066.011.001 3. The resulting total in-lieu fee is $15.8 million, which equates to approximately $63,151 per unit in the market rate project. Rental Apartment Project: On-Site Production and In-Lieu Fee Options The development scope used the rental apartment project hypothetical are: 1. The 250 unit project is developed on a five acre-site. This represents a density of 50 units per acre. 2. The Inclusionary Housing obligation is equal to 25 units, which represents 10% of the units in the market rate project. 3. The unit mix is presented in the following table: Unit Mix Number of Bedrooms Number of Units Square Feet Per Unit Studio 35 600 1 120 800 2 75 1,000 3 20 1,200 Total 250 216,000 On-Site Production of Affordable Rental Apartment Units A developer may select the on-site production option by right. The requirements associated with this alternative are: 1. At a 10% Inclusionary Housing requirement, 25 affordable units must be provided. 2. The income restriction is set at the low income level. 3. To match the distribution of the bedroom types included in the market rate project, the affordable units must be provided in the following mix: 324 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 25 2004014.HB:KHH 14066.011.001 Number of Bedrooms Number of Units Studio 4 1 12 2 8 3 1 Total 25 4. The affordable units must be dispersed throughout the market rate project and developed concurrently with the market rate project. In-Lieu Fee Payment Option Under the recommended structure, a 250 unit rental apartment project would not be allowed to pay a fee to fulfill the Inclusionary Housing obligation. However, if the developer can prove a financial hardship, the City Council has the discretion to approve the payment of an in lieu fee. Based on the in-lieu fee schedule being recommended by KMA, the hypothetical rental affordable housing project would generate the following in-lieu fee payment obligation: 1. The total leasable area of the 250 unit market rate project is 216,000 square feet. 2. The in-lieu fee for projects that include 30 or more units is $35.80 per square foot of leasable area. 3. The resulting total in-lieu fee is $7.7 million, which equates to approximately $30,900 per unit in the market rate project. Other Inclusionary Housing Obligation Fulfillment Options Each of the three remaining Inclusionary Housing obligation fulfillment options includes the following common assumptions: 325 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 26 2004014.HB:KHH 14066.011.001 1. The market rate project that triggered the Inclusionary Housing requirement includes 250 units; and 2. The Inclusionary Housing obligation must be fulfilled with rental apartment units. Off-Site Production Option The City has approval rights over the following: 1. The development site proposed to be used; and 2. The affordable housing developer proposed to undertake the development of the Inclusionary Housing units. The off-site production option includes the following additional requirements: 1. The Inclusionary Housing requirement is set at 15% of the units included in the market rate project. 2. At 250 units the market rate project generates a requirement for 38 affordable units. 3. The affordability standard is set at the low income level. 4. The affordable units are not required to adhere to the bedroom mix included in the market rate project. The standards that are imposed on the off-site development option are: a. No more than 60% of the units (23) can be studio or one-bedroom units; and b. At least 40% of the units (15) must include two or more bedrooms. 5. The Inclusionary Housing obligation must be fulfilled prior to or concurrent with the first phase of the market rate development. 326 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 27 2004014.HB:KHH 14066.011.001 Land Dedication Option City Council approval is required for the use of the land dedication option. Proposals must meet all the following requirements in order to be presented to the City Council for consideration. 1. The Inclusionary Housing obligation is set at 20% of the units being constructed in the market rate project. 2. A 50 unit affordable housing unit requirement is imposed on the hypothetical 250 unit market rate project. 3. At an assumed allowable density of 50 units per acre, the dedicated site must include at least 43,560 square feet of land area. 4. The affordability standard is set at the very low income level. 5. The unit mix requirements are: a. No more than 50% of the units can be studio or one-bedroom units; and b. No fewer than 50% of the units must include two or more bedrooms. 6. The developer must submit a conceptual plan and a pro forma analysis to demonstrate that a 50 unit project targeted to very low income households will be feasible with no financial contribution from the City. Acquisition and Rehabilitation Option The acquisition and rehabilitation option can only be exercised under very limited circumstances, and then only with City Council approval. Only projects that fulfill the following requirements will be presented to the City Council for consideration: 1. The Inclusionary Housing requirement is set at 20% of the units being constructed in the market rate project. 2. To fulfill the affordable housing requirement a developer would need to acquire and rehabilitate existing projects that include a total of at least 50 units. 3. The affordability standard is set at the very low income level. 327 Ursula Luna-Reynosa, City of Huntington Beach May 6, 2020 Inclusionary Housing: Policy & Implementation Recommendations Page 28 2004014.HB:KHH 14066.011.001 4. The rehabilitation scope must comport with the following requirements: a. The improvements must have a value equal to at least 25% of the after rehabilitation value of the units, which includes the value of the land.6 b. It is required that at least 50% of the acquired and rehabilitated units include at least two bedrooms. This may require reconfiguration and conversion of some units in the projects that are acquired. SUMMARY The preceding memorandum presented KMA’s policy and implementation recommendations related to updating the City’s Inclusionary Housing Ordinance. The recommended affordable housing requirements are based on the results of the accompanying Financial Analysis and on an evaluation of the array of fulfillment options that can be made available to the developers of market rate residential projects. It is the City’s goal to update the Inclusionary Housing Ordinance in ways that balance the interests of property owners and developers against the public benefits associated with increasing the inventory of affordable housing units in the community. To that end, KMA identified financially feasible Inclusionary Housing production requirements and provided a mix of alternative methods for fulfilling the requirements. 6 H&SC Section 33413 (2) (a) (iv). 328 FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE Prepared for: City of Huntington Beach Prepared by: Keyser Marston Associates, Inc. May 6, 2020 329 Financial Analysis: Inclusionary Housing Ordinance Update Page i Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 TABLE OF CONTENTS I. OVERVIEW ..................................................................................................................... 1 A. Key Court Cases .................................................................................................................... 3 B. Legislation: AB 1505 ............................................................................................................ 5 C. Inclusionary Housing Program Characteristics .................................................................... 7 D. State Density Bonus and Inclusionary Housing Requirements ............................................ 9 II. SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS ............................................. 10 III. METHODOLOGY ........................................................................................................... 11 A. Inclusionary Housing Requirements that are Currently Being Imposed ........................... 11 B. Regional Housing Needs Assessment (RHNA) ................................................................... 14 C. Financial Analysis Organization ......................................................................................... 16 IV. OWNERSHIP HOUSING ANALYSIS .................................................................................. 16 A. Supporting Documents: Ownership Housing Analysis...................................................... 17 B. Condominium Prototype ................................................................................................... 18 C. Projected Market Rate Sales Prices ................................................................................... 19 D. Affordable Sales Price Calculations .................................................................................... 19 E. Pro Forma Analyses............................................................................................................ 23 F. In-Lieu Fee Analysis: Ownership Housing .......................................................................... 26 V. RENTAL APARTMENT ANALYSIS .................................................................................... 27 A. Supporting Documents: Rental Apartment Analysis ........................................................ 28 B. Rental Apartment Prototypes ............................................................................................ 28 C. Projected Market Rents ..................................................................................................... 30 D. Affordable Rent Calculations ............................................................................................. 30 E. Pro Forma Analyses............................................................................................................ 32 F. In-Lieu Fee Analysis: Rental Apartments ........................................................................... 34 VI. SUMMARY ................................................................................................................... 36 A. Existing Inclusionary Housing Requirements ..................................................................... 36 B. Residential Development Prototypes ................................................................................ 37 C. Conclusions ........................................................................................................................ 38 330 Financial Analysis: Inclusionary Housing Ordinance Update Page ii Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 ATTACHMENTS ATTACHMENT 1 – INCLUSIONARY HOUSING PROGRAM SURVEY ATTACHMENT 2 – OWNERSHIP HOUSING ANALYSES Appendix A: Condominium Analyses Exhibit I: Pro Forma Analysis: Existing 10% Production Alternative Exhibit II: Pro Forma Analysis: Existing In-Lieu Fee Payment Alternative Appendix B: Affordability Analyses Exhibit I Affordable Sales Price Calculations Exhibit II In-Lieu Fee Analysis Appendix C: Home Sales Survey ATTACHMENT 3 – RENTAL APARTMENT ANALYSES Appendix A: Pro Forma Analyses – 10% Inclusionary Units Exhibit I: Moderate Income Alternative – Density @ 50 Units Per Acre Exhibit II: Low Income Alternative – Density @ 50 Units Per Acre Exhibit III: Very Low Income Alternative – 35% Density Bonus: 67.5 Units Per Acre Appendix B: Affordability Analyses Exhibit I: Affordable Rent Calculations Exhibit II: In-Lieu Fee Analysis Appendix C: Rent Survey 331 Financial Analysis: Inclusionary Housing Ordinance Update Page 1 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 I. OVERVIEW The City of Huntington Beach (City) has imposed Inclusionary Housing requirements on residential development since the early 1990’s. During the intervening period the City Council has taken the following actions related to the Inclusionary Housing policy: 1. In October 2005 the City Council adopted an Inclusionary Housing Ordinance to codify the affordable housing policy. 1 The key requirements imposed by the Inclusionary Housing Ordinance can be summarized as follows: a. Projects with three or more units are subject to a 10% Inclusionary Housing requirement: i. Projects with between three and 10 units were allowed to pay a fee in lieu of producing affordable units. ii. Under specified circumstances the affordable housing requirements could be fulfilled in off-site locations with new development or the acquisition and rehabilitation of existing units. b. The following income standards were applied: i. For ownership housing projects the requirement was set at very low, low or median income at the City’s discretion; and ii. For rental apartment projects the requirement was set at very low or low income at the City’s discretion c. The covenant period was set at 60 years for both ownership housing and rental apartment projects. 1 The Inclusionary Housing Ordinance is codified in Zoning Code Title 23, Chapter 230, Article I, Section 230.26. 332 Financial Analysis: Inclusionary Housing Ordinance Update Page 2 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 2. In July 2009 the City Council approved the following changes to the Inclusionary Housing Ordinance:2 a. The in-lieu fee payment option was expanded to include projects with up to 30 units b. The household income limits were modified as follows: i. For ownership housing projects the requirement was set at the moderate income level; and ii. For rental apartment projects the requirement was set at the low income level. However, with City approval affordable units built within the market rate projects can fulfill the obligation with moderate income units. c. The affordable units must have a bedroom mix that is proportionate to the market rate unit mix. However, the smallest units of each bedroom type can be used. d. In August 2011 the City published the following regulations that detail the Inclusionary Housing Ordinance requirements: i. Affordable Ownership Housing Regulations: Developer Requirements; ii. Affordable Ownership Housing Regulations: Owner Requirements; and iii. Affordable Rental Apartment Regulations. 2 The Inclusionary Housing Ordinance has not been amended to reflect the approved changes. However, in practice, the City has been implementing the changes. 333 Financial Analysis: Inclusionary Housing Ordinance Update Page 3 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The City engaged Keyser Marston Associates, Inc. (KMA) to assist in updating the requirements imposed by the Inclusionary Housing Ordinance. This update is being undertaken because conditions have changed since the Inclusionary Housing Ordinance requirements were last modified in 2011. The following Financial Analysis: Inclusionary Housing Ordinance Update (Financial Analysis) evaluates the following topics: 1. The appropriateness of the 10% affordable housing requirement; 2. The fee amounts that can be supported for projects that are permitted to pay a fee in lieu of producing affordable housing; and 3. Alternative means of fulfilling the affordable housing requirements imposed by the Inclusionary Housing Ordinance. This Overview section describes the basic parameters that guide Inclusionary Housing programs throughout California. A. Key Court Cases It is important to review the key legal cases and State legislation that guide the implementation of Inclusionary Housing programs. A chronological summary of the relevant issues follows. Palmer Case In 2009, the California Court of Appeal ruled in Palmer/Sixth Street Properties L.P. v. City of Los Angeles, 175 Cal. App. 4th 1396 (Palmer), that the local affordable housing requirements being imposed by the City of Los Angeles violated the Costa-Hawkins Rental Housing Act (Costa- Hawkins). Specifically, Costa-Hawkins allows landlords to set the initial monthly rent for a new unit, and then to increase the monthly rent to the market level each time a unit is vacated. The Court found that the imposition of long-term income and affordability restrictions on rental residential units is a violation of this provision. 334 Financial Analysis: Inclusionary Housing Ordinance Update Page 4 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 It is commonly believed that the Palmer ruling prohibited jurisdictions from requiring developers to construct affordable rental apartment units as a part of their Inclusionary Housing program. In an effort to comply with Palmer, jurisdictions generally took one of the following actions: 1. The jurisdiction eliminated the requirement that market rate rental apartment projects provide affordable rental apartment units; or 2. The jurisdiction replaced affordable housing production models with a linkage or impact fee methodology; or 3. The jurisdiction imposed affordable housing requirements as part of negotiated Development Agreements for rental apartment projects. San Jose Case In 2015, the California Supreme Court ruled in California Building Industry Association v. City of San Jose, 61 Cal 4th 435 (San Jose) that Inclusionary Housing programs should be viewed as use restrictions that are a valid exercise of a jurisdiction’s zoning powers. Specifically, the Court found that Inclusionary Housing requirements are a planning tool rather than an exaction. This is interpreted to mean that an in-lieu fee payment option that is included in an Inclusionary Housing program, that includes an affordable housing production requirement, is not subject to the AB 1600 nexus requirements imposed by the “Mitigation Fee Act”.3 Price controls imposed by Inclusionary Housing programs must meet the following criteria: 1. The requirements cannot be “Confiscatory”; and 2. The requirements cannot deprive a property owner of a fair and reasonable return on their investment. 3 The Mitigation Fee Act is codified in California Government Code §66000 et seq. 335 Financial Analysis: Inclusionary Housing Ordinance Update Page 5 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The San Jose ruling that Inclusionary Housing programs are not an exaction applies to both ownership housing and rental apartment development. However, the San Jose case did not overturn the limitations Palmer imposed on Inclusionary Housing programs for rental apartment projects. The San Jose case is also relevant to rental apartment projects, because former Governor Brown publicly stated that he would not sign a “Palmer Fix” bill unless and until the California Supreme Court ruled in favor of the City of San Jose. As such, the San Jose ruling opened the door for the subsequent passage and adoption of Assembly Bill (AB) 1505 in September 2017. B. Legislation: AB 1505 AB 1505, which is otherwise known as the “Palmer Fix”, was signed into law on September 29, 2017. AB 1505 amends Section 65850 of the California Government Code and adds Section 65850.01. This legislation provides jurisdictions with the ability to adopt programs that impose affordable housing requirements on rental apartment projects. Role of the California Department of Housing and Community Development (HCD) Section 65850.01 does not place a cap on the percentage of units that can be subject to income and affordability restrictions. However, Section 65850.01 (a) gives HCD the authority to review the restrictions imposed by an Inclusionary Housing program on rental apartment developments if it requires that more than 15% of the units to be restricted to households earning less than 80% of the area median income (AMI), and if one of the following conditions applies: 1. The jurisdiction has failed to meet at least 75% of its Regional Housing Needs Assessment (RHNA) allocation for above moderate income units. This test is measured on a pro-rated basis over the planning period, which is set at a minimum of five years; or 2. HCD finds that the jurisdiction has not submitted their housing element report for at least two consecutive years. 336 Financial Analysis: Inclusionary Housing Ordinance Update Page 6 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 As of December 31, 2019, the City has exceeded the RHNA goal for above moderate income housing. The City received Housing Element approval from HCD in March 2020, but prior to that HCD had deemed the City out of compliance since 2015. Since the City has not submitted their housing element report for at least two consecutive years HCD has the right to require an economic feasibility study if more than 15% of rental apartment units in a project are required to be restricted at less than 80% of AMI. It is likely that this Financial Analysis meets the economic feasibility study standards defined in Section 65850.01 (b). However, if the City chooses to impose a greater than 15% affordability requirement and/or deeper affordability standards on rental apartment projects, HCD can intervene in the Inclusionary Housing Ordinance update process. This could extend and complicate the approval process for updates to the Inclusionary Housing Ordinance being considered by the City. Additional AB 1505 Requirements Section 65850 (g) requires jurisdictions to provide alternative means of fulfilling the affordable housing requirements imposed on rental apartment projects by an Inclusionary Housing program. Options that can be provided to developers include, but are not limited to: 1. Off-site construction of affordable units; 2. Payment of a fee in-lieu of producing affordable housing units; 3. Land dedication; and 4. The acquisition and rehabilitation of existing units. 337 Financial Analysis: Inclusionary Housing Ordinance Update Page 7 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 C. Inclusionary Housing Program Characteristics Over 170 jurisdictions in California currently include an Inclusionary Housing program as a component in their overall affordable housing strategy. While the unifying foundation of these programs is the objective to attract affordable housing development, the characteristics of these programs vary widely from jurisdiction-to-jurisdiction. To assist the City in evaluating options for updating the Inclusionary Housing Ordinance it is useful to identify the elements that are typically included in Inclusionary Housing programs being implemented in California jurisdictions. To that end, KMA compiled information on 64 Inclusionary Housing programs being implemented throughout California. The survey information is presented in Attachment 1 and is summarized in the following sections of this Financial Analysis. 1. In California, the majority of Inclusionary Housing programs include a threshold project size below which projects are not subject to the affordable housing requirements. Common thresholds fall between three and 10 units. The average threshold project size found in the program survey is eight units. 2. The income and affordability standards imposed by Inclusionary Housing programs vary widely throughout California. The majority of programs have established standards in the range of 10% to 20% of the units in projects that will be subject to the requirements. However, the following policy variations are commonly found: a. The threshold standards are varied as a reflection of the depth of the affordability being provided. b. Inclusionary Housing requirements have a disproportionate impact on smaller projects, because there are fewer market rate units available to spread the impact created by the income and affordability standards. A sliding scale requirement is sometimes used to mitigate these impacts. 338 Financial Analysis: Inclusionary Housing Ordinance Update Page 8 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 c. The length of the covenant period imposed on Inclusionary Housing units varies from jurisdiction-to-jurisdiction. The California Health and Safety Code (H&SC) Section 33413 standards of 45 years for ownership housing units and 55 years for rental apartment units is commonly used. However, both shorter and longer covenant periods are imposed throughout Inclusionary Housing programs in California. Inclusionary Housing programs focus on the production of affordable housing units by imposing specific affordable housing requirements on new development. To comply with the findings in the San Jose case, and the requirements imposed by Sections 65850 and 65850.01, Inclusionary Housing programs must offer developers a range of options for fulfilling the affordable housing requirements. The most common options offered to developers are: 1. Construction of a defined percentage of income restricted units within new market rate residential projects; 2. Construction of a defined percentage of income restricted units in a project located in an off-site location; 3. Payment of a fee in lieu of producing affordable housing units in which the revenues will subsequently be used by the jurisdiction to assist in the development of affordable housing units within the community; 4. The dedication of land to the jurisdiction that is appropriate for the development of affordable housing; and 5. The acquisition and rehabilitation of existing units. The requirements imposed by the City’s existing Inclusionary Housing Ordinance can be considered typical within the context of the surveyed programs. As such, the focus of this KMA evaluation is on updating the Inclusionary Housing Ordinance to reflect current market and financial conditions. 339 Financial Analysis: Inclusionary Housing Ordinance Update Page 9 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 D. State Density Bonus and Inclusionary Housing Requirements A tool that is commonly used to reduce the financial impact associated with the imposition of Inclusionary Housing requirements is the density bonus provided by California Government Code Sections 65915-65918 (Section 65915). Section 65915 requires jurisdictions to provide density bonuses based on a sliding scale ranging from 5% to 35% depending on the magnitude of the income restrictions being imposed. In July 2013 the First District Court of Appeal held that jurisdictions must agree to count the affordable units used to fulfill the Section 65915 density bonus requirements towards the Inclusionary Housing requirements that will be imposed on a project.4 Based on that ruling, a developer must be allowed to use the same affordable units to fulfill both the Inclusionary Housing requirements and the Section 65915 requirements. However, in order to exercise this option, the developer must apply the more stringent of the two programs’ requirements. The Section 65915 density bonus can act to materially reduce the financial impacts created by Inclusionary Housing requirements. For that reason, the City should recognize that when Inclusionary Housing requirements are imposed it is highly likely that many developers will make use of Section 65915 density bonuses. It is also important to understand that the City is required to grant a developer’s request for the statutorily established density bonus along with the requisite number of concessions and incentives, as well as any necessary development standards reductions or waivers.5 Section 65915 requires the City to adopt an ordinance that specifies how it will comply with the State mandated density bonus requirements. The City adopted a density bonus ordinance in 2005 and it has amended the ordinance four times.6 However, the City’s density bonus 4 Latinos Unidos del Valle de Napa y Solano v. County of Napa, 217 Cal. App. 4th 1160 (Napa). 5 Section 65915 (d) (1) identifies three conditions under which requested incentives or concessions can be denied. However, this does not relieve the City of the obligation to grant the number of incentives or concessions that the project is entitled to under Section 65915 (d) (2). 6 The density bonus ordinance is codified in Zoning Code Title 23, Chapter 230, Article I, Section 230.14. 340 Financial Analysis: Inclusionary Housing Ordinance Update Page 10 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 ordinance has not been updated to reflect several modifications that have been made by the State Legislature to Section 65915 over time. Until such time as the modifications are amended into the City’s density bonus ordinance, State law will automatically prevail over any inconsistencies between State law and the City’s ordinance. II. SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS As discussed previously, the court in the San Jose case found that the imposition of Inclusionary Housing requirements is a valid exercise of the City’s zoning powers rather than an exaction. Sections 65850 and 65850.01 amended the California Government Code to expressly allow Inclusionary Housing requirements to be imposed on rental apartment projects. It is important for the City to consider the following caveats when updating the Inclusionary Housing Ordinance 1. Inclusionary Housing requirements cannot be confiscatory or deprive an owner of a fair and reasonable return. However, recognizing that the courts have not defined these terms, the City has some discretion in establishing evaluation parameters. 2. California Government Code Section 65583 (a) (Section 65583 (a)) requires the City to analyze potential and actual constraints being placed on the development of housing. Within that context, it is important to recognize that the requirements imposed by the Inclusionary Housing Ordinance can only be expected to fulfill a small portion of the unmet need for affordable housing in Huntington Beach. As mentioned previously, the City has been imposing Inclusionary Housing requirements on residential development since the early 1990’s. As such, residential developers and owners of residentially zoned land are fully aware of the financial impacts created by the affordable housing requirements. Given that building permits were obtained for 2,915 housing units between 2013 and 2018 it can safely be concluded that to date the Inclusionary Housing Ordinance has not acted as a constraint to development. 341 Financial Analysis: Inclusionary Housing Ordinance Update Page 11 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The key factors that should be considered in updating the Inclusionary Housing Ordinance are: 1. The requirements should balance the interests of property owners and developers against the public benefit created by the production of income restricted units; and 2. The Inclusionary Housing requirements cannot be confiscatory or deprive an owner of a fair and reasonable return on their investment. III. METHODOLOGY The purpose of this analysis is to assist the City in updating the Inclusionary Housing Ordinance. The evaluation is comprised of the following steps: A. Inclusionary Housing Requirements that are Currently Being Imposed Basic Requirements 1. The Inclusionary Housing requirements apply to residential projects that include three or more units. 2. The affordable housing units must be built concurrently with the market rate project. The units can be constructed in phases if the market rate project is being developed in phases. 3. The affordable housing units must comply with the following development scope requirements: a. The bedroom mix for the affordable units must be proportional to the bedroom mix of the market rate units. However, the affordable units may be smaller in square footage than the market rate units. b. The exterior improvements for the affordable units must be comparable to the exterior improvements for the market rate units. 342 Financial Analysis: Inclusionary Housing Ordinance Update Page 12 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 c. The interior improvements for the affordable units must be comparable to the base level interior finishes provided in the market rate units. Income and Affordability Covenants The Inclusionary Housing requirement is set at 10% of the units in ownership housing and rental apartment development projects. The specific income and affordability standards that are currently being applied are as follows: Ownership Housing Projects: 1. The affordable units must be sold to moderate income households. 2. The H&SC Section 50052.5 calculation methodology is used to set the “Affordable Sales Prices”. 3. The covenant period is set at one cumulative total of 45 years. Within that one 45-year period the home must be sold and resold at an Affordable Sales Price to moderate income households. Rental Apartment Projects: 1. Under the current policy, the affordable units are to be rented to low income households. However, moderate income units may be allowed to be used to fulfill the requirement if the units are provided on site within the market rate project. 2. The H&SC Section 50053 calculation methodology is used to establish the “Affordable Rents” each year. 3. The covenant period is set at 55 years. 343 Financial Analysis: Inclusionary Housing Ordinance Update Page 13 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Alternative Inclusionary Housing Requirement Fulfillment Options Developers currently have the option to fulfill the Inclusionary Housing requirements in the following ways: In-Lieu Fees An in-lieu fee can be paid to fulfill a fractional affordable unit obligation. An in-lieu fee can also be paid by projects with between three and 30 units. Restrictions applied to the in-lieu fee are: 1. The City Council establishes the in-lieu fee schedule each year. 2. The in-lieu fee must be paid when the building permits for the project are issued. 3. The in-lieu fee revenue is deposited into the “Inclusionary Housing Trust Fund”. The City must allocate at least 20% of these funds to assist very low income households, and at least 50% of the total funds must be used to assist very low and low income households. Off-Site Affordable Housing Production The Inclusionary Housing requirements can currently be fulfilled in off-site locations under the following criteria: 1. Newly constructed units must fulfill the same development scope requirements that are applied to affordable units constructed within the market rate project. 2. The affordable units can be provided in existing projects that meet the following criteria: a. The units must not be subject to existing income and affordability covenants unless the units are at risk of being converted to unrestricted market rents. b. The units must require substantial rehabilitation, which is defined as one-third of the value of the existing improvements, excluding land. 344 Financial Analysis: Inclusionary Housing Ordinance Update Page 14 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 3. Mobile homes can be used to fulfill the affordable housing requirement. B. Regional Housing Needs Assessment (RHNA) To assist in creating updates to the existing Inclusionary Housing Ordinance it is useful to identify the composition of the City’s unmet need for housing. One measurement is the RHNA, which is used as a tool in the Housing Element process. The most recent RHNA covers the period between 2013 and 2021. At the end of 2019 the City’s progress towards fulfilling the defined RHNA targets is presented in the following table: City of Huntington Beach RHNA Information 2013 – 2021 Progress as of December 31, 2019 Unfilled RHNA Targets Income Category RHNA Targets Building Permits Issued Entitled Units Total % Very Low 313 50 0 263 84% Low 220 47 1 172 78% Moderate 248 274 9 (35) 0% Above Moderate 572 2,574 266 (2,649) 0% Totals 7 1,353 2,945 276 435 82% As can be seen in the preceding table, the above moderate income target has been exceeded by a significant margin, and 35 more units were produced than the current moderate income target. 8 This indicates that the Inclusionary Housing Ordinance should focus on the attraction of very low and low income units. However, this goal needs to be balanced against the 7 The Total Unfilled RHNA Target and the Percentage of Remaining RHNA Target calculations exclude the excess number of moderate and above-moderate income units that have been permitted. 8 The Southern California Association of Governments (SCAG) staff recommended RHNA allocation for 2021 - 2029 totals 13,337 units. No credit will be provided for units produced in excess of the 2013 - 2021 targets. 345 Financial Analysis: Inclusionary Housing Ordinance Update Page 15 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 requirement that the Inclusionary Housing Ordinance cannot be structured in a way that places an onerous financial burden on the developers of market rate housing. Recognizing that the vast majority of housing that has been constructed in Huntington Beach over the past five years has been premium priced ownership housing units and rental apartments, it may be advantageous to update the Inclusionary Housing Ordinance requirements to encourage off-site production and in-lieu fee payment options. The key advantages of this strategy are: 1. The affordable housing units can be developed by developers that have specific expertise in the development and operation of affordable housing projects. 2. Dedicated affordable housing projects have access to public funding sources that provide a more cost-efficient way to achieve deeper affordability than can be supported by an Inclusionary Housing requirement. A representative sample of programs that are targeted to dedicated affordable housing projects are: a. Low and Moderate Income Housing Asset Funds (LMIHAF) that are under the control of the City, which acts as the Housing Successor to the former Huntington Beach Redevelopment Agency; b. HOME Program funds that are awarded to the City by the United States Department of Housing and Urban Development (HUD); c. The federal and state Low-Income Housing Tax Credits (Tax Credits) offered under Internal Revenue Code Section 42; d. State funding sources such as the Affordable Housing and Sustainable Communities (AHSC) Program; and e. The funds allocated to the City by HCD under the Permanent Local Housing Allocation (PLHA) for Senate Bill 2 (Chapter 364, Statutes of 2017). 346 Financial Analysis: Inclusionary Housing Ordinance Update Page 16 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 C. Financial Analysis Organization The financial analyses are organized as follows: Step Analysis 1 Creation of residential prototypes that are representative of new market rate development in Huntington Beach. 2 A survey of representative projects to estimate the achievable market rate sales prices and rents for the prototype units. 3 Estimation of the Affordable Sales Prices and Affordable Rents. 4 An evaluation of the existing 10% Inclusionary Housing requirement: a. For ownership housing projects KMA prepared a pro forma analysis for a prototype condominium project that includes a 10% moderate income requirement and a pro forma analysis for the same project assuming that the 2019 in-lieu fee amount is paid. b. For rental projects KMA prepared pro forma analyses for a prototype rental apartment project under three alternative income and affordability standards. 5 Projection of the in-lieu fees per square foot of net saleable or leasable area that can be supported. IV. OWNERSHIP HOUSING ANALYSIS The Inclusionary Housing Ordinance requires 10% of the units in ownership housing projects to be allocated to moderate income households. Imposing a moderate income requirement on ownership housing units reflects the fact that these households are likely to have more discretionary income to devote to the ongoing costs associated with home ownership than that of lower income households. Recent new ownership housing development in Huntington Beach has been focused largely on detached single family home projects, with scattered development of condominiums and 347 Financial Analysis: Inclusionary Housing Ordinance Update Page 17 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 townhomes.9 However, for the following reasons the prototype ownership housing project created by KMA for the pro forma analysis is a condominium project: 1. For single family homes, the weighted average gap between the market rate price and the Affordable Sales Price for a moderate income household is approximately $1.74 million.10 2. It is clear that exercising an option to pay an in-lieu fee or to provide off-site affordable housing units could be structured to produce more affordable units at a deeper affordability level than fulfilling the Inclusionary Housing requirement within a market rate single family home project. 3. Higher density condominium projects are currently being proposed for development in Huntington Beach. The gap between the market rate prices and the Affordable Sales Prices for this product type is significantly smaller than the gap exhibited by single family homes. Therefore, the potential for fulfilling Inclusionary Housing obligations on site merits evaluation. A. Supporting Documents: Ownership Housing Analysis The documents that support the ownership housing analysis are presented in Attachment 2. The following condominium pro forma analyses are used to evaluate the existing moderate income affordable housing production requirements and to estimate the supportable in-lieu fees per square foot of net saleable building area. The analyses are organized as follows: 9 To compile sufficient data the home sales survey for condominiums and townhomes had to be extended to projects built as early as 1990. Comparatively, it was possible to limit the survey of single family home sales to projects constructed after 2010. 10 See Attachment 2 – Appendix B – Exhibit II. 348 Financial Analysis: Inclusionary Housing Ordinance Update Page 18 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Financial Analysis – Ownership Housing Appendix A Condominium Analyses Appendix B Affordability Analyses Appendix C Home Sales Survey B. Condominium Prototype KMA created a prototype based on a review of condominium projects proposed for development and existing condominium projects in Huntington Beach. The key characteristics of the condominium prototype used in the pro forma analyses are: Condominium Prototype Site Area (Square Feet) 43,560 Total Number of Units 40 Density (Units Per Acre) 40 Unit Mix Two-Bedroom Units 20 Three-Bedroom Units 10 Four-Bedroom Units 10 Average Unit Sizes (Square Feet) Two-Bedroom Units 1,530 Three-Bedroom Units 1,900 Four-Bedroom Units 3,000 Parking Total Number of Spaces 110 Parking Spaces Per Unit 11 2.75 Parking Type Subterranean 11 Based on the citywide parking standards of 2.0 spaces for two-bedroom units; 2.5 spaces for three- and four- bedroom units; and .5 guest spaces per unit. 349 Financial Analysis: Inclusionary Housing Ordinance Update Page 19 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 C. Projected Market Rate Sales Prices It is important to note that the prototype analysis is intended to reflect average or typical ownership housing projects rather than any specific project. It should be expected that specific projects will vary to some degree from the prototype. To assist in projecting the achievable market rate sales prices, KMA compiled sales data for condominiums sold in Huntington Beach between March 2019 and March 2020 (Attachment 2 – Appendix C). This information is used to establish the average sales price per square foot of saleable area for two-, three- and four-bedroom condominium units. Based on the results of the surveys, KMA estimated the market rate sales prices as follows: Projected Market Rate Sales Prices – Ownership Housing % of Total Units Average Price Two-Bedroom Units 50% $842,500 Three-Bedroom Units 25% $1,001,700 Four-Bedroom Units 25% $1,348,100 Average Price / SF of Net Saleable Area 100% $500 D. Affordable Sales Price Calculations The Affordable Sales Prices calculations are presented in Attachment 2 – Appendix B – Exhibit I. The calculations are based on the following assumptions: 350 Financial Analysis: Inclusionary Housing Ordinance Update Page 20 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 1. The household income information used in the calculations is based on 2020 income statistics for Orange County as a whole. The household incomes for moderate income households are produced and distributed annually by HCD.12 2. The Affordable Sales Price estimates are based on the calculation methodology imposed by H&SC Section 50052.5. The calculations include the elements described in the following sections of this report. Household Size The household incomes applied in the Affordable Sales Price calculations are set at the number of bedrooms in the home plus one. For example, the imputed household size for a three- bedroom home is four persons. H&SC Section 50052.5 refers to this as “the household size appropriate for the unit.” However, this is not meant to be an occupancy cap; it is simply a benchmark used to create a consistent methodology for calculating the Affordable Sales Price. Household Income For moderate income households, H&SC Section 50052.5 uses 110% of AMI for a household size equal to the number of bedrooms in the home plus one. This measurement is only used for setting the Affordable Sales Prices. Households with incomes of up to 120% AMI would qualify to reside in moderate income units. Income Allocated to Housing-Related Expenses H&SC Section 50052.5 allocates 35% of the benchmark household income to the payment of housing-related expenses. 12 As of April 23, 2020 HCD had not yet published 2020 income information. For the purposes of this Financial Analysis KMA estimated the moderate income amounts based on an extrapolation from the Orange County median income published by HUD on April 1, 2020. It is possible that the information published by HCD for 2020 may vary somewhat from these estimates. 351 Financial Analysis: Inclusionary Housing Ordinance Update Page 21 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Housing-Related Expenses Based on research undertaken by KMA, the variable housing related expense assumptions used in this analysis are presented in the following table: Variable Housing Related Expenses – Ownership Housing Monthly Utilities Allowances 13 Monthly HOA, Insurance & Maintenance Two-Bedroom Units $171 $500 Three-Bedroom Units $226 $550 Four-Bedroom Units $281 $575 The property tax expense estimate is based on 1.08% of the home’s estimated Affordable Sales Price. This Affordable Sales Price is applied as the assessed value due to the fact that an irrevocable long-term resale restriction covenant is imposed on the home. Supportable Mortgage Amount The mortgage amounts used in the Affordable Sales Price calculations are estimated using the income available after the other housing-related expenses are paid. The Affordable Ownership Housing Regulations state the following: The Maximum Mortgage Amount is equal to the present value of the Income Available for Mortgage Payments over a 30-year term. The discount rate used to determine the present value is set at the Mortgage Interest Rate. The Mortgage Interest Rate will be posted on the City’s website, and will be updated monthly. 13The utilities allowances are based on the assumption that the home owners utilities costs are comprised of gas heating, cooking and water heating; basic electric; water; and trash and sewer services. The allowances are based on the Orange County Housing Authority schedule effective October 1, 2019. 352 Financial Analysis: Inclusionary Housing Ordinance Update Page 22 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 In practice, the City has been using the lowest interest rate published during the preceding three month period. As an example, the rate being applied by the City in April 2020 is 2.46%. This rate is significantly lower than the rates for which typical moderate income home buyers will be able to qualify. Common reasons for this are: 1. Credit history and scores that do not fall within the exceptional level required to obtain the lowest interest rate available in the marketplace; 2. Back-end ratios that are often higher than the typical ratios applied in conventional lenders’ underwriting standards for the lowest interest rate mortgages; 3. The lowest published interest rate is often a teaser rate that will ultimately adjust to a higher rate that will be unaffordable to the moderate income home buyer; and 4. There is a limited pool of mortgage lenders that are willing to provide loans on homes that are subject to long-term irrevocable resale restrictions. These lenders do not generally offer the lowest interest rates available in the marketplace. The use of the lowest published interest rate is not required by the Inclusionary Housing Ordinance or by the Affordable Ownership Housing Regulations. The application of this metric generates extremely high Affordable Sales Prices, which can actually only be achieved by home buyers with the ability to make an extraordinarily large down payment. KMA strongly recommends that the City modify the policy being used to set the mortgage interest rate being applied in the Affordable Sales Price calculations. The mortgage terms used in this pro forma analysis are based on a 50 basis points premium applied to the April 20, 2020 Bankrate site average APR for 30-year fixed interest rate mortgages. This results in a 4.24% interest rate. 353 Financial Analysis: Inclusionary Housing Ordinance Update Page 23 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Benchmark Down Payment KMA set the down payment at 10% of the Affordable Sales Price. This represents a benchmark percentage based on the standards set forth in the Affordable Ownership Housing Regulations. The benchmark down payment is only used for the purpose of setting the Affordable Sales Price. The actual down payment amount can vary from a minimum of 5% to a maximum of 50% of the Affordable Sales Price. However, it is important to understand that the down payment amount does not impact the Affordable Sales Price. Rather, the actual down payment contributed by a home buyer is subtracted from the defined Affordable Sales Price to establish the allowable first trust deed mortgage amount. Affordable Sales Prices The Affordable Sales Price estimates for moderate income units are: Affordable Sales Price Estimates – Ownership Housing Two-Bedroom Units $432,800 Three-Bedroom Units $475,200 Four-Bedroom Units $509,700 E. Pro Forma Analyses KMA prepared two pro forma analysis, which can be described as follows: 1. A pro forma analysis was prepared for a project that includes 40 condominium units. Four of the units are set aside for moderate income households and 36 units are unrestricted market rate units (Existing 10% Production Alternative). 2. A pro forma analysis was prepared for a 40 unit condominium project in which a fee is paid in lieu of producing any affordable units. The analysis is based on the 2019 in-lieu fee schedule, which is currently being applied (Existing In-Lieu Fee Payment Alternative). 354 Financial Analysis: Inclusionary Housing Ordinance Update Page 24 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The pro forma analyses are organized as follows: Ownership Housing Pro Forma Analyses Table 1: Estimated Development Costs Table 2: Projected Net Sales Revenue Table 3: Projected Developer Profit Existing 10% Production Alternative – Ownership Housing The pro forma analysis for the Existing 10% Production Alternative is presented in Attachment 2 – Appendix A – Exhibit I. In this alternative 90% of the units are sold at unrestricted market rate prices and 10% of the units are sold to moderate income households at Affordable Sales Prices. Existing In-Lieu Fee Payment Alternative – Ownership Housing The pro forma analysis for the Existing In-Lieu Fee Payment Alternative is presented in Attachment 2 – Appendix A – Exhibit II. In this alternative 100% of the units are sold at unrestricted market rate prices, and the in-lieu fee is paid when building permits are issued. A comparison of the pro forma analyses follows: Pro Forma Comparison – Ownership Housing Existing 10% Production Alternative Existing In- Lieu Fee Payment Alternative Difference Development Costs Property Acquisition Costs $7,623,000 $7,623,000 --0-- Direct Costs 18,392,000 18,392,000 --0-- Indirect Costs 3,940,000 6,406,000 (2,466,000) Financing Costs 1,733,000 1,938,000 ($205,000) Total Development Costs $31,688,000 $34,359,000 ($2,671,000) 355 Financial Analysis: Inclusionary Housing Ordinance Update Page 25 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Pro Forma Comparison – Ownership Housing Existing 10% Production Alternative Existing In- Lieu Fee Payment Alternative Difference Net Revenue $35,658,000 $37,678,000 ($2,020,000) Developer Profit $3,970,000 $3,319,000 $651,000 As a % of Development Cost 12.5% 9.7% As can be seen in the preceding table, under current conditions, the Existing 10% Production Alternative generates a higher developer return than the Existing In-Lieu Fee Payment Alternative. This is attributable to the following factors: 1. The total development costs for the Existing In-Lieu Fee Payment Alternative are $2.67 million higher than the total development costs for the Existing 10% Production Alternative. The differences are largely explained by the following factors: a. The scheduled in-lieu fee payment totals $2,349,000. Under the existing Inclusionary Housing Ordinance terms, this payment must be made when building permits are issued. b. The additional carrying costs associated with the in-lieu fee payment are estimated at $205,000. 2. The net revenue generated by the Existing In-Lieu Fee Payment Alternative is $2.02 million higher than the net revenue for the Existing 10% Production Alternative. 3. The resulting net profit is $651,000 higher for the Existing 10% Production Alternative than for the Existing In-Lieu Fee Payment Alternative. 356 Financial Analysis: Inclusionary Housing Ordinance Update Page 26 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Based on the findings of the comparative pro forma analyses it would seem likely that developers would choose to fulfill the Inclusionary Housing requirement on site within the market rate project. However, historically, ownership housing developers have typically requested the right to pay the in-lieu fee. It is likely that this option is selected for the following reasons: 1. The in-lieu fee amount is fixed when building permits are obtained for the project. Developers place a value on certainty. 2. The upside potential for market rate prices can be achieved for 100% of the units in the project. 3. It can be difficult to attract home buyers who meet both the income qualification standards and lenders’ underwriting criteria and are willing to purchase a home that is subject to long-term resale restrictions. F. In-Lieu Fee Analysis: Ownership Housing In general terms, the financial impact associated with fulfilling Inclusionary Housing requirements within market rate projects is equal to the difference between the achievable market rate sales prices or rents and the Affordable Sales Prices or Affordable Rents for the Inclusionary Housing units. This is known as the “Affordability Gap.” The Affordability Gap represents the maximum in-lieu fee that should be charged as part of an Inclusionary Housing program. KMA prepared Affordability Gap analyses for a condominium/townhome project and a single family home project (Attachment 2 – Appendix B – Exhibit II). These analyses apply the weighted average Affordability Gaps to the bedroom mixes identified in the home sales survey. As discussed previously, the home sales survey demonstrated significantly higher prices for the single family homes than for condominiums/townhomes. This is partially attributable to the fact that the single family homes are larger than the condominiums/townhomes, and also that 357 Financial Analysis: Inclusionary Housing Ordinance Update Page 27 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 a premium is typically paid for detached homes. In the survey, the weighted average sales price per square foot of net saleable area was 38% higher for the single family homes than for the condominiums/townhomes. As shown in Attachment 2 – Appendix B – Exhibit II, the weighted average Affordability Gaps, and the resulting in-lieu fees, are as follows: In-Lieu Fees Based on Affordability Gaps – Ownership Housing In-Lieu Fee Condominiums & Townhomes Single Family Homes Per Moderate Income Unit $504,700 $1,635,900 Per Total Unit in the Project $50,470 $163,590 Per SF of Net Saleable Area $25.36 $55.34 As can be seen in the preceding table, the in-lieu fee based on the Affordability Gap is estimated at $50,470 per total unit in the condominium and townhome project. Comparatively, the 2019 in-lieu fee under the existing Inclusionary Housing Ordinance is set at $58,736 per total unit in the project. Thus, the currently supportable in-lieu fee for condominium and townhome projects is estimated to be approximately 14% lower than the in- lieu fee applied by the existing 2019 schedule. It is important to note that the in lieu fee based on the Affordability Gap for single family homes is estimated at $163,590 per total unit in the project. A fee of this magnitude is significantly higher than the in-lieu fee charged in any Southern California city. V. RENTAL APARTMENT ANALYSIS The existing Inclusionary Housing Ordinance effectively allows developers to fulfill the affordable housing requirements by allocating 10% of the units in a market rate project to moderate income households. Therefore, KMA applied this requirement as the base case in the analysis. KMA also prepared pro forma analysis for the following alternatives: 358 Financial Analysis: Inclusionary Housing Ordinance Update Page 28 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 1. A 10% low income requirement for a project at the density allowed by zoning; and 2. A Section 65915 density bonus alternative that allocates 11% of the units allowed by the site’s zoning to very low income households. The rental apartment pro forma analyses are used to estimate the financial impacts created by the modifications to the affordability standards that are being tested. The analysis is also used to estimate the supportable in-lieu fees. A. Supporting Documents: Rental Apartment Analysis The documents that support the rental apartment analysis are presented in Attachment 3. The pro forma analyses for rental apartment projects are organized as follows: Financial Analysis – Rental Apartments Appendix A Pro Forma Analyses Appendix B Affordability Analyses Appendix C Rent Survey A variety of tools are available to reduce the financial impact associated with the imposition of income and affordability restrictions on rental apartment projects. For example, the Section 65915 density bonus program is commonly used by the developers in jurisdictions that impose Inclusionary Housing requirements. As discussed previously, under the findings of the Napa case, a developer must be allowed to fulfill Inclusionary Housing and Section 65915 density bonus requirements with the same affordable units as long as the affordable units meet the more restrictive of the standards imposed by the two programs. B. Rental Apartment Prototypes The rental apartment prototypes used in this analysis were created based on the results of the KMA market surveys, and a review of projects that have recently been constructed in 359 Financial Analysis: Inclusionary Housing Ordinance Update Page 29 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Huntington Beach. The KMA market surveys were also used to estimate the achievable market rate rents for the prototype units. The prototypes used in this analysis reflect the characteristics of recently constructed projects. These prototypes are described in the following table: Rental Apartment Project Prototypes Moderate & Low Income Alternatives Very Low Income Density Bonus Alternative Site Area (Acres) 8.0 8.0 Total Number of Units 400 540 Density (Units Per Acre) 50 67.5 Unit Mix Studio Units 60 81 One-Bedroom Units 200 270 Two-Bedroom Units 120 162 Three-Bedroom Units 20 27 Average Unit Sizes (Sq Ft) Studio Units 620 620 One-Bedroom Units 820 820 Two-Bedroom Units 1,160 1,160 Three-Bedroom Units 1,550 1,550 Parking Total Number of Spaces 14 750 729 Parking Spaces Per Unit 1.88 1.35 Parking Type Wrap Wrap 14 The citywide and Section 65915 parking standards require 1.0 space for studio and one-bedroom units; and; 2.0 spaces for two-bedroom units. For three-bedroom units the citywide requirement is 2.5 spaces and the Section 65915 standard is 2.0 spaces. The Moderate and Low Income Alternatives include .5 guest spaces per unit. No guest spaces can be required under the Section 65915 standards. 360 Financial Analysis: Inclusionary Housing Ordinance Update Page 30 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 C. Projected Market Rents In February 2020, KMA surveyed rental apartment projects in Huntington Beach that received four or more stars in the CoStar quality ranking system (Attachment 3 – Appendix C). The purpose of this survey was to derive estimates of the currently achievable market rents for the types of projects likely to be constructed in Huntington Beach. However, the characteristics of actual projects will vary to some degree from the prototypes. The market rate monthly rent estimates that are used in this pro forma analysis are: Projected Monthly Market Rate Rents – Rental Apartments Average Monthly Rent Per Unit Studio Units $2,652 One-Bedroom Units $3,189 Two-Bedroom Units $4,856 Three-Bedroom Units $5,501 Average Monthly Rent Per SF of Net Leasable Area $4.01 D. Affordable Rent Calculations The Inclusionary Housing Ordinance calls for Affordable Rents to be calculated using the methodology imposed by H&SC Section 50053. The calculations are presented in Attachment 3 – Appendix B – Exhibit I, and the assumptions and results can be summarized as follows: 361 Financial Analysis: Inclusionary Housing Ordinance Update Page 31 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 1. The household income information used in the calculations is based on 2020 income statistics for Orange County as a whole. The household incomes are published annually by HUD and are distributed by HCD. 15 2. The household size appropriate for the unit is based on the H&SC Section 50052.5 standard of the number of bedrooms in the home plus one. As was the case in the Affordable Sales Price calculations, this is a benchmark, not an occupancy cap. 3. The household incomes used in the Affordable Rent calculations are set as follows:16 a. Moderate income at 110% of AMI; b. Low income at 60% of AMI; and c. Very low income at 50% of AMI. 4. Thirty percent (30%) of defined household income is allocated to housing- expenses. 5. KMA’s calculations are based on the assumption that the tenants will be required to pay for gas heating, cooking and water heating; and basic electric services. The October 1, 2019 Orange County Housing Authority utilities allowances were applied to this analysis. The resulting Affordable Rents are presented in the following table: 15 As of April 22, 2020 HCD had not yet published 2020 income information. For the purposes of this Financial Analysis KMA estimated the very low, low and moderate income amounts based on extrapolations from the Orange County median income published by HUD on April 1, 2020. It is possible that the information published by HCD may vary somewhat from these estimates. 16 The percentages of the AMI used in the Affordable Rent calculations are benchmarks established by H&SC 50053. The incomes limit used to qualify households to occupy moderate income units is based on 120% of AMI as defined in H&SC 50093. The low income limit is defined in H&SC 50079.5 and the very low income limit is defined in H&SC 50105. These limits are meant to reflect 80% and 50% of AMI, respectively. However, HUD adjusts the income levels for Orange County to account for conditions that warrant special consideration. As a result, the current income qualification limits exceed 80% and 50% of AMI. 362 Financial Analysis: Inclusionary Housing Ordinance Update Page 32 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Affordable Rent Calculations – Rental Apartments Moderate Income Low Income Very Low Income Studio Units Maximum Monthly Housing Cost $1,983 $1,082 $901 (Less) Monthly Utility Allowance (51) (51) (51) Affordable Rent $1,932 $1,031 $850 One-Bedroom Units Maximum Monthly Housing Cost $2,266 $1,236 $1,030 (Less) Monthly Utility Allowance (61) (61) (61) Affordable Rent $2,205 $1,175 $969 Two-Bedroom Units Maximum Monthly Housing Cost $2,549 $1,391 $1,159 (Less) Monthly Utility Allowance (80) (80) (80) Affordable Rent $2,469 $1,311 $1,079 Three-Bedroom Units Maximum Monthly Housing Cost $2,833 $1,545 $1,288 (Less) Monthly Utility Allowance (103) (103) (103) Affordable Rent $2,730 $1,442 $1,185 E. Pro Forma Analyses Moderate Income Alternative – Rental Apartments The Moderate Income Alternative is based on the existing Inclusionary Housing Ordinance mix of 90% unrestricted market rate units and 10% moderate income units. This provides a baseline against which to measure the impacts associated with imposing stricter affordability requirements than are imposed by the existing Inclusionary Housing Ordinance. 363 Financial Analysis: Inclusionary Housing Ordinance Update Page 33 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The pro forma analysis is presented in Attachment 3 – Appendix A – Exhibit I, and it is organized as follows: Moderate Income Alternative Rental Apartments Table 1: Estimated Development Costs Table 2: Estimated Stabilized Net Operating Income Table 3: Estimated Developer Return The estimated stabilized developer returns on total investment derived from the Moderate Income Alternative analysis is 6.1%. Supportable Inclusionary Housing Production Requirements The pro forma analyses for the Low Income Alternative and the Very Low Income Density Bonus Alternative are presented in Attachment 3 – Appendix A – Exhibits II and III, respectively. The analyses are organized as follows: Low Income Alternative and Very Low Income Density Bonus Alternative Rental Apartments Table 1: Estimated Development Costs Table 2: Estimated Stabilized Net Operating Income Table 3: Inclusionary Housing Impact The pro forma analyses for the Low Income Alternative and the Very Low Income Density Bonus Alternative are presented in Attachment 3 – Appendix A – Exhibit II and Exhibit III, respectively. The results of the analyses are summarized in the following table: 364 Financial Analysis: Inclusionary Housing Ordinance Update Page 34 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Inclusionary Housing Impacts Analyses Rental Apartments Enhanced / (Reduced) Value Return on Total Investment Moderate Income Alternative N/A 6.1% Low Income Alternative ($6,300,000) 5.9% Very Low Income Density Bonus Alternative $4,505,000 6.2% The results of the Inclusionary Housing impacts analyses for rental apartments indicate the following: 1. The imposition of a 10% low income Inclusionary Housing requirement is estimated to reduce the prototype rental apartment project’s value by $6.3 million. This represents an approximately 14% reduction in the property acquisition costs that can be supported, which is well within the range of impacts typically created by Inclusionary Housing requirements. 2. The Very Low Income Density Bonus Alternative is actually stronger from a financial perspective than the Moderate Income Alternative. If a developer can efficiently make use of the 35% density bonus provided by Section 65915, this alternative clearly presents the most efficient method for fulfilling the City’s Inclusionary Housing requirements. F. In-Lieu Fee Analysis: Rental Apartments KMA estimated the supportable in-lieu fee amounts for rental apartment projects based on the Affordability Gaps associated with the on-site development of Inclusionary Housing units within market rate rental apartment projects. In-lieu fee analyses were only prepared for the Moderate and Low Income Alternatives. Projects that make use of the Section 65915 density bonus must produce the requisite number of affordable housing units. 365 Financial Analysis: Inclusionary Housing Ordinance Update Page 35 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The Affordability Gaps for rental apartments are estimated in Attachment 3 - Appendix B – Exhibit II using the following methodology: 1. The analysis is based on the assumption that 10% of the total units in a market rate rental apartment project would be subject to Inclusionary Housing requirements. 2. The differences between the estimated achievable market rate monthly rents and the defined Affordable Rents are calculated for studio, one-bedroom, two-bedroom and three-bedroom units. 3. KMA assumed that the property taxes for projects that include designated affordable housing units would be based on a lower assessed value due to the reduction in net operating income that would be generated by the project. KMA deducted this lower property tax expense from the estimated rent difference. 4. The estimated annual Affordability Gap is equal to the net rent difference minus the property tax savings. 5. The total Affordability Gaps are estimated by capitalizing the annual Affordability Gaps at the threshold returns derived from a pro forma analysis of a market rate development. The results of these calculations are defined as the Net Affordability Gaps. 6. The Net Affordability Gaps are translated into the supportable in-lieu fees per affordable unit and per square foot of net leasable area. The results of the in-lieu fee analysis are summarized in the following table: 366 Financial Analysis: Inclusionary Housing Ordinance Update Page 36 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 In-Lieu Fees Based on Affordability Gaps – Rental Apartments In-Lieu Fee Moderate Income Alternative Low Income Alternative Per Affordable Unit $192,000 $332,000 Per Total Unit in the Project $19,200 $33,200 Per SF of Net Leasable Area $20.70 $35.80 VI. SUMMARY The following section summarizes the results of this Financial Analysis. The findings provide the basis for KMA’s recommendations for updating the Inclusionary Housing Ordinance. A detailed set of policy recommendations are presented in a separate memorandum. A. Existing Inclusionary Housing Requirements The Inclusionary Housing requirements that were evaluated in this Financial Analysis can be summarized as follows: 1. The requirements are imposed on all new residential development with three or more units. 2. A 10% affordable housing requirement is imposed on residential development that is subject to the Inclusionary Housing requirements. The existing income restrictions are: a. Ownership housing developments are subject to a moderate income unit requirement; and b. The base requirement for rental apartment projects is for low income units. However, at the City’s discretion affordable units that are built on site within a market rate projects can fulfill the requirement with moderate income units. 367 Financial Analysis: Inclusionary Housing Ordinance Update Page 37 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 B. Residential Development Prototypes The development scopes for the residential development prototypes that were evaluated in this Financial Analysis are presented in the following table: Residential Development Prototypes: Development Scopes Ownership Housing Rental Apartments Condominium Alternative Moderate & Low Income Alternatives Very Low Income Density Bonus Alternative Site Area (Acres) 1.0 8.0 8.0 Total Number of Units 40 400 540 Density (Units Per Acre) 40 50 67.5 Unit Mix Studio Units 60 81 One-Bedroom Units 200 270 Two-Bedroom Units 20 120 162 Three-Bedroom Units 20 20 27 Four-Bedroom Units 10 Average Unit Sizes (Sq Ft) Studio Units 620 620 One-Bedroom Units 1,530 820 820 Two-Bedroom Units 1,900 1,160 1,160 Three-Bedroom Units 3,000 1,550 1,550 Parking Total Number of Spaces 110 750 729 Parking Spaces Per Unit 2.75 1.88 1.35 Parking Type Subterranean Wrap Wrap 368 Financial Analysis: Inclusionary Housing Ordinance Update Page 38 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 The ownership housing sales price and rental apartment rent estimates applied in this analysis are provided in the following table: Residential Development Prototypes: Sales Prices and Rents Ownership Housing Rental Apartments Unit Mix Studio Units $2,652 One-Bedroom Units $3,189 Two-Bedroom Units $837,000 $4,856 Three-Bedroom Units $991,300 $5.501 Four-Bedroom Units $1,321,000 Sales Price/Rent Per Square Foot $501 $4.01 C. Conclusions Based on the results of the preceding Financial Analysis, KMA reached the following conclusions: 1. Inclusionary Housing Requirements: a. The 10% moderate income requirement for ownership housing development continues to be supportable. b. The 10% low income requirement for rental apartment projects is supportable. There is no need to provide an option for moderate income units to be used as a substitute when the units are provided on site within a market rate project. 2. The maximum in-lieu fee amounts are currently estimated as follows: 369 Financial Analysis: Inclusionary Housing Ordinance Update Page 39 Keyser Marston Associates, Inc. 1908014.HB May 6, 2020 Supportable In-Lieu Fees Ownership Housing Rental Apartments 17 In-Lieu Fee Amounts Per Affordable Unit $504,700 $332,000 Per Total Unit $50,470 $33,200 Per Square Foot of Saleable/Leasable Area $25.36 $35.80 17 Based on a 10% low income unit Inclusionary Housing Requirement. 370 ATTACHMENT 1 INCLUSIONARY HOUSING PROGRAM SURVEY HUNTINGTON BEACH, CALIFORNIA FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE Prepared by: Keyser Marston Associates, Inc. File name: Inclusionary Survey 5 6 20 Page 1 of 5371 ATTACHMENT 1 INCLUSIONARY HOUSING PROGRAM SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Jurisdiction Compliance Options Set Aside % On-site % Varies Threshold Project Size % of AMI Covnenant Period Threshold Project Size % of AMI Covnenant Period I.Inclusionary Requirements: Both Rental and Ownership Projects Albany Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%Yes 5 Perpetual 5 Perpetual Avalon Create on-site units; create off-site units; pay in-lieu fee 20%No 4 55 4 55 Brea Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 10%No 55 120%10 Campbell Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%No 55 120%45 Capitola Create on-site units; pay in-lieu fee 15%Yes 7 120%Life of Bldg Chula Vista Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 10%No 50 80% /120%Life of Bldg 50 80% /120%Life of Bldg Colma Create on-site units; pay in-lieu fee 20%No 5 55 5 45 Concord Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 10%Yes 5 55 5 45 Contra Costa County 1 Create on-site units; create off-site units; pay in-lieu fee; donate land 15%No 5 5 3 Cupertino 1-7 units pays in-lieu fee. Create on-site units; create off-site units; pay impact/linkage fee; donate land 15%No 7 50% /80%99 7 50% /120%99 Davis Create on-site units; preserve or rehab existing housing; pay in- lieu fee; donate land 5% to 25%No 5 80%Perpetual 5 120%Perpetual Dublin Create on-site units; create off-site units; pay in-lieu fee; donate land 12.5%No 20 55 20 55 Emeryville Create on-site units; pay impact/linkage fee 12%/20%No 55 10 55 Fort Bragg Create on-site units 10% to 20% 5 80% /120%5 100% /120%15 Hayward Create on-site units; create off-site units; pay in-lieu fee; pay impact/linkage fee; donate land 15%No 20 80%55 20 120%45 Huntington Beach Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 10%No 3 80%55 3 120%45 Irvine Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%No 50 30 50 30 Los Altos 1 Create on-site units; create off-site units 10%No 10 30 10 30 Rental Development Ownership Developent Prepared by: Keyser Marston Associates, Inc. File name: Inclusionary Survey 5 6 20; Incl Survey Page 2 of 5372 ATTACHMENT 1 INCLUSIONARY HOUSING PROGRAM SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Jurisdiction Compliance Options Set Aside % On-site % Varies Threshold Project Size % of AMI Covnenant Period Threshold Project Size % of AMI Covnenant Period Rental Development Ownership Developent Menlo Park Create on-site units; create off-site units; pay in-lieu fee 10%Yes 5 80% /120%5 80% /120% Mill Valley Create on-site units 25%Yes 4 120%Perpetual 4 120%Perpetual Nevada County 1 Create on-site units; create off-site units No 20 30 20 30 Oxnard Create on-site units; pay in-lieu fee 10%No 10 55 10 Pacifica Create on-site units; create off-site units; pay in-lieu fee; donate land 15%No 8 55 8 45 Palo Alto Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 15%Yes 59 59 Pasadena Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%No 10 10 120%45 Petaluma Create on-site units; pay in-lieu fee; donate land 15%No 30 30 Pleasanton Create on-site units; create off-site units; pay in-lieu fee; donate land; credit transfers; other alternate methods of compliance 15%Yes 15 15 Perpetual Redwood City Create on-site units; create off-site units; preserve or rehab units; pay impact/linkage fee; donate land No 5 30 5 30 San Bruno Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%No 10 55 10 45 San Diego Create on-site units; create off-site units; pay in-lieu fee; donate land 10% to 15%No 10 50% or 80%55 100% or 120% San Jose Create on-site units; create off-site units; preserve or rehab units; in-lieu fee; donate land; credit transfers 15%No 20 50%/ 80%Perpetual 20 120%Perpetual San Juan Capistrano Create on-site units; create off-site units; preserve or rehab 10%No 2 55 2 55 San Mateo County Create on-site units 10%Yes 11 80%Life of Bldg 11 120%45 San Rafael Create on-site units; pay in-lieu fee 10%No 2 2 120% Santa Cruz Create on-site units; create off-site units; pay in-lieu fee; donate land 15%Yes 2 80%Perpetual 2 120%Perpetual Santa Monica Create on-site units; create off-site units; pay in-lieu fee; donate land 5% to 30%Yes 2 55 2 55 Sonoma Create on-site units 25%Yes 5 120%55 5 120%55 Prepared by: Keyser Marston Associates, Inc. File name: Inclusionary Survey 5 6 20; Incl Survey Page 3 of 5373 ATTACHMENT 1 INCLUSIONARY HOUSING PROGRAM SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Jurisdiction Compliance Options Set Aside % On-site % Varies Threshold Project Size % of AMI Covnenant Period Threshold Project Size % of AMI Covnenant Period Rental Development Ownership Developent Sonoma County Create on-site units; create off-site units; pay in-lieu fee; donate land 20%Yes 60%55 80%30 South San Francisco Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 20%No 4 55 4 55 Sunnyvale Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 12.5%No 4 80%55 120%30 Tiburon Create on-site units; create off-site units; pay in-lieu fee 15% 3 Perpetual 3 Perpetual Union City Create on-site units; create off-site units; pay in-lieu fee 15%No 7 7 West Sacramento Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 10%Yes 55 80%45 West Hollywood Create on-site units; create off-site units 2 2 II.Inclusionary Requirements: Ownership Projects Only Alameda Create on-site units; create off-site units; pay in-lieu fee 5%No 5 59 Danville Create on-site units; pay in-lieu fee 10%Yes 7 110%20 Fremont Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%Yes 110%30 Lafayette 2 Create on-site units; create off-site units 15%No 2 45 Monterey Create on-site units; donate land 20%No 6 Perpetual Mountain View Create on-site units; pay in-lieu fee 10%No 3 100%55 Rohnert Park Create on-site units; create off-site units; pay in-lieu fee 15%No 5 55 San Leandro Create on-site units; pay in-lieu fee 15%Yes 55 San Mateo County Create on-site units; create off-site units; pay in-lieu fee; donate land 20%No 5 55 Santa Barbara Create on-site units; pay in-lieu fee; donate land 15%No 2 160%90 Prepared by: Keyser Marston Associates, Inc. File name: Inclusionary Survey 5 6 20; Incl Survey Page 4 of 5374 ATTACHMENT 1 INCLUSIONARY HOUSING PROGRAM SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Jurisdiction Compliance Options Set Aside % On-site % Varies Threshold Project Size % of AMI Covnenant Period Threshold Project Size % of AMI Covnenant Period Rental Development Ownership Developent III.Inclusionary for Ownership Projects & Impact Fee for Rental Projects Berkeley Create on-site units; pay in-lieu fee 20%No 5 80%Perpetual San Carlos Create on-site units; create off-site units; pay impact/linkage fee 15%Yes 55 2 45 Truckee 2 Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; pay impact/linkage fee; donate land 15%No 7 Perpetual 7 Perpetual IV.Mandatory Inclusionary for Ownership Projects & Voluntary Inclusionary for Rental Projects Pittsburg Create on-site units; pay in-lieu fee 15%Yes 5 Salinas Create on-site units; create off-site units; donate land 20%No 10 30 San Juan Bautista Create on-site units; pay impact/linkage fee 6% San Luis Obispo Create on-site units; pay in-lieu fee; donate land 3%Yes 55 5 45 San Marcos Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15%No 55 120%55 Solana Beach Create on-site units; create off-site units; preserve or rehab existing housing; pay impact/linkage fee 15%No 5 55 5 45 V.Rental Projects Only Glendale Create on-site units; create off-site units; pay in-lieu fee; donate land 15%No 8 80%55 1 The program requirements are only applied in designated areas of the jurisdiction. 2 The program requirements are applied in the entire jurisdiction, but the requirements vary by zones, neighborhood, or districts. Prepared by: Keyser Marston Associates, Inc. File name: Inclusionary Survey 5 6 20; Incl Survey Page 5 of 5375 ATTACHMENT 2 OWNERSHIP HOUSING DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Condo Titles Page 1 of 17376 APPENDIX A FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA OWNERSHIP HOUSING DEVELOPMENT CONDOMINIUM PROTOTYPE Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Condo Titles Page 2 of 17377 APPENDIX A - EXHIBIT I CONDOMINIUM PROTOTYPE OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING 10% PRODUCTION ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf Mod Base Page 3 of 17378 APPENDIX A - EXHIBIT I - TABLE 1 ESTIMATED DEVELOPMENT COSTS CONDOMINIUM PROTOTYPE: OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING 10% PRODUCTION ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Property Acquisition Costs 1 43,560 Sf of Land $175 /Sf of Land $7,623,000 II.Direct Costs 2 On-Site Improvements/Landscaping 43,560 Sf of Land $20 /Sf of Land $871,000 1st Level Subterranean Parking Spaces 3 110 Spaces $25,000 /Space 2,750,000 Building Costs 4 93,647 Sf of GBA $125 /Sf of GBA 11,706,000 Contractor/DC Contingency Allow 20%Other Direct Costs 3,065,000 Total Direct Costs $18,392,000 III.Indirect Costs Architecture, Engineering & Consulting 6.0%Direct Costs $1,104,000 Public Permits & Fees 5 40 Units $20,000 /Unit 800,000 Taxes, Insurance, Legal & Accounting 3.0%Direct Costs 552,000 Marketing 40 Units $2,500 /Unit 100,000 Developer Fee 6 40 Units $29,900 /Unit 1,196,000 Soft Cost Contingency Allowance 5.0%Other Indirect Costs 188,000 Total Indirect Costs $3,940,000 IV.Financing Costs Interest During Construction 7 $1,284,000 Loan Origination Fees 60.0%Loan to Cost 2.5 Points 449,000 Total Financing Costs $1,733,000 V.Total Construction Cost 40 Units $602,000 /Unit $24,065,000 Total Development Cost 40 Units $792,000 /Unit $31,688,000 1 Estimated based on a survey of the sales of residentially zoned land in Huntington Beach between June 2016 and August 2019. 2 Based on the estimated costs for similar uses. 3 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates prepared for other projects within Huntington Beach. 6 Based on the Developer Fee per unit that would be anticipated for a project in which 100% of the units are sold at unrestricted market rate prices. 7 Assumes a 6.0% interest cost for debt; an 18 month construction period; a 5 month absorption period; 30% of the units are presold and close during first month after completion; and 2.5 points for loan origination fees. Based on 2.0 spaces for Two-Bedroom Units; 2.5 spaces for Three-Bedroom Units; 2.5 spaces for Four-Bedroom Units; and 0.50 spaces per unit for guest parking. Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf Mod Base Page 4 of 17379 APPENDIX A - EXHIBIT I - TABLE 2 PROJECTED NET SALES REVENUE CONDOMINIUM PROTOTYPE: OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING 10% PRODUCTION ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Gross Sales Revenue Market Rate Units 1 Two-Bedroom Units 18 Units @ $837,000 /Unit $15,066,000 Three-Bedroom Units 9 Units @ $991,300 /Unit 8,922,000 Four-Bedroom Units 9 Units @ $1,321,700 /Unit $11,895,000 Moderate Income Units 2 Two-Bedroom Units 2 Units @ $432,800 /Unit 866,000 Three-Bedroom Units 1 Unit @ $475,200 /Unit 475,000 Four-Bedroom Units 1 Unit @ $509,700 /Unit 510,000 Total Gross Sales Revenue $37,734,000 II.Cost of Sales Commissions 3.0%Gross Sales Revenue $1,132,000 Closing Costs 2.0%Gross Sales Revenue 755,000 Home Buyer Warranties 0.5%Gross Sales Revenue 189,000 Total Cost of Sales ($2,076,000) III.Net Revenue $35,658,000 1 2 See APPENDIX B - EXHIBIT I. Equal to the lesser of the calculated affordable sales price or a 30% discount from the projected market price. Based on a sales survey undertaken by KMA in February 2020 (See APPENDIX C). For the two- and three-bedroom units a 15% premium is added for new construction. The four-bedroom units in the survey were constructed recently, so no premium was applied. The weighted average sales price equates to $501 per square foot of saleable area. Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf Mod Base Page 5 of 17380 APPENDIX A - EXHIBIT I - TABLE 3 PROJECTED DEVELOPER PROFIT CONDOMINIUM PROTOTYPE: OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING 10% PRODUCTION ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Net Revenue $35,658,000 II.Total Development Cost See APPENDIX A - EXHIBIT I - TABLE 1 $31,688,000 III.Developer Profit 12.5%Total Development Cost $3,970,000 Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf Mod Base Page 6 of 17381 HUNTINGTON BEACH, CALIFORNIA APPENDIX A - EXHIBIT II CONDOMINIUM PROTOTYPE OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING IN-LIEU FEE PAYMENT ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf ILF Page 7 of 17382 APPENDIX A - EXHIBIT II - TABLE 1 ESTIMATED DEVELOPMENT COSTS CONDOMINIUM PROTOTYPE: OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING IN-LIEU FEE PAYMENT ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Property Acquisition Costs 1 43,560 Sf of Land $175 /Sf of Land $7,623,000 II.Direct Costs 2 On-Site Improvements/Landscaping 43,560 Sf of Land $20 /Sf of Land $871,000 1st Level Subterranean Parking Spaces 3 110 Spaces $25,000 /Space 2,750,000 Building Costs 93,647 Sf of GBA $125 /Sf of GBA 11,706,000 Contractor/DC Contingency Allow 4 20%Other Direct Costs 3,065,000 Total Direct Costs $18,392,000 III.Indirect Costs Architecture, Engineering & Consulting 6.0%Direct Costs $1,104,000 Public Permits & Fees 5 40 Units $20,000 /Unit 800,000 In-Lieu Fee 6 40 Units $58,736 /Unit 2,349,000 Taxes, Insurance, Legal & Accounting 3.0%Direct Costs 552,000 Marketing 40 Units $2,500 /Unit 100,000 Developer Fee 3.0%Gross Sales Revenue 1,196,000 Soft Cost Contingency Allowance 5.0%Other Indirect Costs 305,000 Total Indirect Costs $6,406,000 IV.Financing Costs Interest During Construction 7 $1,452,000 Loan Origination Fees 60.0%Loan to Cost 2.5 Points 486,000 Total Financing Costs $1,938,000 V.Total Construction Cost 40 Units $668,000 /Unit $26,736,000 Total Development Cost 40 Units $859,000 /Unit $34,359,000 1 Estimated based on a survey of the sales of residentially zoned land in Huntington Beach between June 2016 and August 2019. 2 Based on the estimated costs for similar uses. 3 4 Based on the profit as a percentage of Total Development Cost estimated to be generated by the 5 Based on estimates prepared for other projects within Huntington Beach. 6 Based on the 2019 In-Lieu Fee for a 40 unit project. 7 Assumes a 6.0% interest cost for debt; an 18 month construction period; a 5 month absorption period; 30% of the units are presold and close during first month after completion; and 2.5 points for loan origination fees. Based on 2.0 spaces for Two-Bedroom Units; 2.5 spaces for Three-Bedroom Units; 2.5 spaces for Four-Bedroom Units; and 0.50 spaces per unit for guest parking. Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf ILF Page 8 of 17383 APPENDIX A - EXHIBIT II - TABLE 2 PROJECTED NET SALES REVENUE CONDOMINIUM PROTOTYPE: OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING IN-LIEU FEE PAYMENT ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Gross Sales Revenue 1 Two-Bedroom Units 20 Units @ $837,000 /Unit $16,740,000 Three-Bedroom Units 10 Units @ $991,300 /Unit $9,913,000 Four-Bedroom Units 10 Units @ $1,321,700 /Unit $13,217,000 Total Gross Sales Revenue $39,870,000 II.Cost of Sales Commissions 3.0%Gross Sales Revenue $1,196,000 Closing Costs 2.0%Gross Sales Revenue 797,000 Home Buyer Warranties 0.5%Gross Sales Revenue 199,000 Total Cost of Sales ($2,192,000) III.Net Revenue $37,678,000 1 Based on a sales survey undertaken by KMA in February 2020 (See APPENDIX C). For the two- and three-bedroom units a 15% premium is added for new construction. The four-bedroom units in the survey were constructed recently, so no premium was applied. The weighted average sales price equates to $501 per square foot of saleable area. Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf ILF Page 9 of 17384 APPENDIX A - EXHIBIT II - TABLE 3 PROJECTED DEVELOPER PROFIT CONDOMINIUM PROTOTYPE: OWNERSHIP HOUSING DEVELOPMENT PRO FORMA ANALYSES EXISTING IN-LIEU FEE PAYMENT ALTERNATIVE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Net Revenue See APPENDIX A - EXHIBIT II - TABLE 2 $37,678,000 II.Total Development Cost See APPENDIX A - EXHIBIT II - TABLE 1 $34,359,000 III.Developer Profit 9.7%Total Development Cost $3,319,000 Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; Pf ILF Page 10 of 17385 APPENDIX B OWNERSHIP HOUSING DEVELOPMENT AFFORDABILITY ANALYSES FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; App B Titles Page 11 of 17386 APPENDIX B - EXHIBIT I AFFORDABLE SALES PRICE CALCULATIONS 1 MODERATE INCOME HOUSEHOLDS 2020 INCOME STANDARDS OWNERSHIP HOUSING DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Two-Bedroom Units Three-Bedroom Units Four-Bedroom Units I.Income Information Area Median Income 1 $92,700 $103,000 $111,250 Household Income @ 110% Median 2 $101,970 $113,300 $122,380 Income Allotted to Housing @ 35% of Income $35,690 $39,660 $42,830 II.Expenses Annual Utilities Allowance 3 $2,052 $2,712 $3,372 HOA, Maintenance & Insurance 6,000 6,600 6,900 Property Taxes @ 1.08% of Affordable Sales Price 4 4,670 5,130 5,510 Total Expenses $12,722 $14,442 $15,782 III.Income Available for Mortgage $22,968 $25,218 $27,048 IV.Affordable Sales Price Supportable Mtg @ 4.24% Interest 5 $389,500 $427,700 $458,700 Home Buyer Down Payment @ 10% Aff Sales Price 4 43,300 47,500 51,000 Affordable Sales Price $432,800 $475,200 $509,700 1 2 Based on the California Health & Safety Code Section 50052.5 calculation methodology. 3 4 Based on the August 15, 2011 Inclusionary Housing Regulations. 5 Based on the 2020 Orange County median incomes published by the California Housing & Community Development Department (HCD). The benchmark household size is set at the number of bedrooms in the unit plus one. Based on the Orange County Housing Authority utility allowances effective as of 10/1/19. Assumes: Gas Cooking, Gas Heating, and Gas Water Heater; Basic Electric; Water, Trash/Sewer. Based on a 50 basis points premium applied to the April 20, 2020 Bankrate site average for 30-year fixed interest rate mortgages. Prepared by: Keyser Marston Associates File name: HB Own Inclusionary 5 6 20; ASP 387 APPENDIX B - EXHIBIT II IN-LIEU FEE ANALYSIS AFFORDABILITY GAP APPROACH - MODERATE INCOME OWNERSHIP HOUSING DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Condominium & Townhome Units Single Family Homes I.Sales Price Difference A.Two-Bedroom Units Market Rate Units $837,000 Affordable Sales Price 1 432,800 Difference $404,200 B.Three-Bedroom Units Market Rate Units $991,300 $2,371,400 Affordable Sales Price 1 475,200 475,200 Difference $516,100 $1,896,200 C.Four-Bedroom Units Market Rate Units $1,321,700 $1,949,100 Affordable Sales Price 1 509,700 509,700 Difference $812,000 $1,439,400 II.Distribution of Affordable Units Two-Bedroom Units 2 Three-Bedroom Units 1 48% Four-Bedroom Units 1 52% III.Net Affordability Gap Per Moderate Income Unit Affordability Gap Per Moderate Income Unit $534,100 $1,658,700 (Less) Reduced Cost of Sales Per Affordable Unit 2 (29,400)(22,800) Net Affordability Gap Per Moderate Income Unit $504,700 $1,635,900 IV.In-Lieu Fee Per Total Unit $50,470 $163,590 Per Square Foot of Net Saleable Area $25.36 $55.34 1 See APPENDIX B - EXHIBIT I. 2 The Cost of Sales consist of: Commissions @ 3.0%; Closing Costs @ 2.0%; and Home Buyer Warranties @ 0.50%. Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; ILF Page 13 of 17388 APPENDIX C HOME SALES SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA OWNERSHIP HOUSING DEVELOPMENT Prepared by: Keyser Marston Associates, Inc. File Name: HB Own Inclusionary 5 6 20; App C Titles Page 14 of 17389 APPENDIX C HOME SALES SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Address Zip Code Unit Size (SF)Total Per SF Year Built I.Condominium & Townhome Units 21383 Kennedy Ln 92646 1,472 $379,949 $258 2012 17552 Van Buren Ln 92647 1,271 $538,500 $424 1995 20171 Sealpoint Ln #206 92646 1,421 $570,000 $401 1999 20191 Sealpoint Ln #202 92646 1,332 $575,000 $432 1999 20171 Sealpoint Ln #105 92646 1,246 $580,000 $465 1999 415 Townsquare Ln #302 92648 1,038 $580,000 $559 1990 20171 Sealpoint Ln #107 92646 1,174 $594,000 $506 1998 8312 Atlanta Avenue #102 92646 1,316 $600,000 $456 1991 8306 Atlanta Ave #102 92646 1,242 $610,000 $491 1991 415 Townsquare Ln #103 92648 1,038 $635,000 $612 1990 1516 Pacific Coast #101 92648 1,300 $685,000 $527 1992 18858 Milos Cir 92648 1,794 $695,000 $387 1993 4392 Lahaina Dr #30 92649 1,400 $711,000 $508 2019 376 5th St 92648 1,810 $875,000 $483 1999 21386 Armilla Cir 92648 1,843 $940,000 $510 2005 7976 Aldea Cir 92648 1,843 $950,000 $515 2005 21339 Cieza Cir 92648 1,843 $950,000 $515 2005 21387 Armilla Cir 92648 1,843 $960,000 $521 2004 19335 Brooktrail Ln 92648 2,245 $950,000 $423 1991 21387 Armilla Cir 92648 1,843 $960,000 $521 2004 7967 Osuna Cir 92648 1,877 $975,000 $519 2005 Minimum 1,038 $379,949 $258 1990 Maximum 2,245 $975,000 $612 2019 Average 1,533 $729,200 $476 1999 7545 Shady Glen Cir 92648 1,407 $464,648 $330 1998 18775 Chapel Ln 92646 1,773 $678,000 $382 1991 16432 Poipu Ln 92649 1,512 $707,000 $468 2014 7675 Timber Cir #2 92648 1,846 $745,000 $404 2003 8158 Constantine Dr 92646 2,132 $745,000 $349 1997 6227 Pacific Pointe Dr #30 92648 1,993 $850,000 $426 2002 8243 Noelle Dr 92646 2,035 $980,000 $482 2013 21445 Hayley Ln 92646 1,926 $1,010,000 $524 2013 19331 Brooktrail Ln 92648 2,027 $1,025,000 $506 1991 19262 Surfwave Dr 92648 2,430 $1,085,000 $447 1997 16377 26th St #102 90742 1,837 $1,200,000 $653 2016 Minimum 1,407 $464,648 $330 1991 Maximum 2,430 $1,200,000 $653 2016 Average 1,902 $862,700 $454 2003 Sales Price Two-Bedroom Units Three-Bedroom Units Source: Redfin. The survey includes executed sales that occurred between March 2019 and March 2020. Prepared by: Keyser Marston Associates, Inc. File name: HB Own Inclusionary 5 6 20; Sales Survey Page 15 of 17390 APPENDIX C HOME SALES SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Address Zip Code Unit Size (SF)Total Per SF Year Built Sales Price 21396 Abigail Ln 92646 2,431 $1,094,000 $450 2013 8255 Kendall Dr 92646 2,431 $1,099,000 $452 2013 8373 Sage Dr 92646 2,431 $1,108,000 $456 2010 8389 Noelle Dr 92646 2,606 $1,150,000 $441 2013 8237 Kendall Dr 92646 2,778 $1,170,000 $421 2013 8200 Noelle Dr 92646 3,604 $1,375,000 $382 2013 8318 Noelle Dr 92646 3,604 $1,375,000 $382 2012 8220 Noelle Dr 92646 3,604 $1,415,000 $393 2013 21254 Baeza Cir 92648 3,055 $1,534,500 $502 2004 21307 Andalucia Ln 92648 3,459 $1,897,000 $548 2004 Minimum 2,431 $1,094,000 $382 2004 Maximum 3,604 $1,897,000 $548 2013 Average 3,000 $1,321,800 $441 2011 II.Single Family Homes 2 4861 Coveview Dr 92649 2,000 $1,212,500 $606 2011 627 Frankfort Ave 92648 3,407 $1,565,000 $459 2012 1009 California St 92648 3,333 $1,650,000 $495 2019 610 17th St 92648 2,952 $1,740,000 $589 2014 624 14th St 92648 2,875 $1,900,000 $661 2018 622 14th St 92648 2,875 $1,950,000 $678 2018 615 13th St 92648 2,900 $2,075,000 $716 2019 512 8th St 92648 2,875 $2,090,000 $727 2019 613 13th St 92648 2,900 $2,095,000 $722 2019 1004 Huntington St 92648 3,285 $2,100,000 $639 2018 623 13th St 92648 2,900 $2,149,900 $741 2020 314 3rd St 92648 2,875 $2,150,000 $748 2018 514 11th St 92648 2,853 $2,150,000 $754 2016 414 9th St 92648 2,900 $2,225,000 $767 2019 412 9th St 92648 2,875 $2,225,000 $774 2019 312 3rd St 92648 2,850 $2,250,000 $789 2019 310 3rd St 92648 2,850 $2,270,000 $796 2019 809 Huntington St 92648 3,350 $2,295,000 $685 2018 314 3rd St 92648 2,850 $2,425,000 $851 2019 124 7th 92648 2,875 $2,725,000 $948 2020 Minimum 2,000 $1,212,500 $459 2011 Maximum 3,407 $2,725,000 $948 2020 Average 2,929 $2,062,100 $704 2018 Three-Bedroom Units Four-Bedroom Units Source: Redfin. The survey includes executed sales that occurred between March 2019 and March 2020. Prepared by: Keyser Marston Associates, Inc. File name: HB Own Inclusionary 5 6 20; Sales Survey Page 16 of 17391 APPENDIX C HOME SALES SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Address Zip Code Unit Size (SF)Total Per SF Year Built Sales Price 17315 Wareham Ln 92649 1,995 $1,170,000 $586 2010 17301 Wareham Ln 92649 2,200 $1,175,000 $534 2010 10242 Thompson Dr 92646 2,926 $1,212,000 $414 2015 17321 Wareham Ln 92649 2,089 $1,249,900 $598 2010 10241 Patch Dr 92646 2,693 $1,290,000 $479 2015 10192 Thompson Dr 92646 2,926 $1,335,000 $456 2015 19741 Wardlow Ln 92646 3,435 $1,450,000 $422 2015 505 16th St 92648 2,875 $1,500,000 $522 2010 9211 Sheridan Dr 92646 3,253 $1,514,900 $466 2015 17322 Osterville Ln 92649 2,758 $1,530,000 $555 2013 627 Frankfort Ave 92648 3,407 $1,565,000 $459 2012 624 13th St 92648 2,910 $1,645,000 $565 2015 1009 California St 92648 3,333 $1,650,000 $495 2019 609 17th St 92648 2,870 $1,700,000 $592 2019 611 17th St 92648 2,870 $1,750,000 $610 2019 17472 Oakbluffs Ln 92649 3,569 $1,888,000 $529 2015 4862 Orleans Dr 92649 3,555 $1,998,000 $562 2016 510 8th St 92648 2,875 $1,999,999 $696 2018 4891 Orleans Dr 92649 3,628 $2,050,000 $565 2015 1019 California St 92648 3,374 $2,160,000 $640 2018 1737 Park St 92648 3,176 $2,554,000 $804 2018 121 7th St 92648 2,877 $2,900,000 $1,008 2015 Minimum 1,995 $1,170,000 $414 2010 Maximum 3,628 $2,900,000 $1,008 2019 Average 2,982 $1,694,900 $568 2015 1 Due to lack of sales, the condominium/townhomes sales survey is limited to homes built after 1990. 2 The of single family home sales survey is limited to homes built after 2010. Four-Bedroom Units Source: Redfin. The survey includes executed sales that occurred between March 2019 and March 2020. Prepared by: Keyser Marston Associates, Inc. File name: HB Own Inclusionary 5 6 20; Sales Survey Page 17 of 17392 ATTACHMENT 3 RENTAL APARTMENT DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; ATT 3 TITLE Page 1 of 20393 APPENDIX A RENTAL APARTMENT DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA PRO FORMA ANALYSES Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; App A Titles Page 2 of 20394 HUNTINGTON BEACH, CALIFORNIA APPENDIX A - EXHIBIT I RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - MODERATE INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE PRO FORMA ANALYSES Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Mod Page 3 of 20395 APPENDIX A - EXHIBIT I - TABLE 1 ESTIMATED DEVELOPMENT COSTS RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - MODERATE INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Property Acquisition Costs 1 348,480 Sf of Land $150 /Sf of Land $52,272,000 II.Direct Costs 2 On-Site Improvements/Landscaping 348,480 Sf of Land $20 /Sf of Land $6,970,000 Above-Ground Parking Spaces 3 750 Spaces $25,000 /Space 18,750,000 Building Costs 464,250 Sf of GBA $125 /Sf of GBA 58,031,000 Contractor/DC Contingency Allow 20%Other Direct Costs 16,750,000 Total Direct Costs 464,250 Sf of GBA $216 /Sf of GBA $100,501,000 III.Indirect Costs Architecture, Engineering & Consulting 8%Direct Costs $8,040,000 Public Permits & Fees 4 400 Units $20,000 /Unit 8,002,000 Taxes, Insurance, Legal & Accounting 3%Direct Costs 3,015,000 Marketing 400 Units $5,000 /Unit 2,001,000 Developer Fee 5%Direct Costs 5,025,000 Soft Cost Contingency Allowance 5%Other Indirect Costs 1,304,000 Total Indirect Costs $27,387,000 IV.Financing Costs Interest During Construction Land 5 $52,272,000 Cost 3.6%Avg Rate $2,823,000 Construction 6 $137,441,000 Cost 3.6%Avg Rate 4,453,000 Loan Origination Fees 60%Loan to Cost 2.0 Points 2,277,000 Total Financing Costs $9,553,000 V.Total Construction Cost 400 Units $344,000 /Unit $137,441,000 Total Development Cost 400 Units $474,000 /Unit $189,713,000 1 Estimated based on a survey of the sales between 2016 and 2018 of residentially zoned land. 2 Based on the estimated costs for similar uses. 3 4 Based on estimates prepared for other projects within Huntington Beach. 5 Based on an 18 month construction period and a 100% average outstanding loan balance. 6 Based on an 18 month construction period and a 60% average outstanding loan balance. Based on 1.0 spaces for Studio Units; 1.0 spaces for One-Bedroom Units; 2.0 spaces for Two-Bedroom Units; 2.5 spaces for Three-Bedroom Units; and 0.50 spaces per unit for guest parking. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Mod Page 4 of 20396 APPENDIX A - EXHIBIT I - TABLE 2 ESTIMATED STABILIZED NET OPERATING INCOME RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - MODERATE INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Gross Income A.Market Rate Units 1 Studio Units 54 Units @ $2,652 /Unit/Month $1,719,000 One-Bedroom Units 180 Units @ $3,189 /Unit/Month 6,888,000 Two-Bedroom Units 108 Units @ $4,856 /Unit/Month 6,293,000 Three-Bedroom Units 18 Units @ $5,501 /Unit/Month 1,188,000 B.Inclusionary Units: 10% of Units 2 Studio Units 6 Units @ $1,932 /Unit/Month 139,000 One-Bedroom Units 20 Units @ $2,205 /Unit/Month 529,000 Two-Bedroom Units 12 Units @ $2,469 /Unit/Month 356,000 Three-Bedroom Units 2 Units @ $2,730 /Unit/Month 66,000 C.Laundry & Miscellaneous Income 400 Units @ $25 /Unit/Month 120,000 Total Gross Income $17,298,000 Vacancy & Collection Allowance 5%Gross Income (865,000) II.Effective Gross Income $16,433,000 III.Operating Expenses General Operating Expenses 400 Units @ $4,500 /Unit $1,800,500 Property Taxes 400 Units @ $7,400 /Unit 2,949,000 Replacement Reserve Deposits 400 Units @ $150 /Unit 60,000 Total Operating Expenses ($4,809,500) IV.Stabilized Net Operating Income $11,623,500 1 2 The Inclusionary rent calculations are based on household income at 110% of AMI, with 30% of income allotted to housing related expenses. See APPENDIX D - EXHIBIT I. Based on the rent survey undertaken in February 2020 and presented in APPENDIX C. The weighted average monthly rent equates to $4.01 per square foot of leasable area. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Mod Page 5 of 20397 APPENDIX A - EXHIBIT I - TABLE 3 ESTIMATED DEVELOPER RETURN RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - MODERATE INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Stabilized Net Operating Income See APPENDIX A - EXHIBIT I - TABLE 2 $11,623,500 II.Total Development Cost See APPENDIX A - EXHIBIT I - TABLE 1 $189,713,000 III.Return on Total Investment 6.1% Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Mod Page 6 of 20398 APPENDIX A - EXHIBIT II 10% INCLUSIONARY UNITS - LOW INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA RENTAL APARTMENT DEVELOPMENT PRO FORMA ANALYSES Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Low Page 7 of 20399 APPENDIX A - EXHIBIT II - TABLE 1 ESTIMATED DEVELOPMENT COSTS RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - LOW INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Property Acquisition Costs 1 348,480 Sf of Land $150 /Sf of Land $52,272,000 II.Direct Costs 2 On-Site Improvements/Landscaping 348,480 Sf of Land $20 /Sf of Land $6,970,000 Above-Ground Parking Spaces 3 750 Spaces $25,000 /Space 18,750,000 Building Costs 464,250 Sf of GBA $125 /Sf of GBA 58,031,000 Contractor/DC Contingency Allow 20%Other Direct Costs 16,750,000 Total Direct Costs 464,250 Sf of GBA $216 /Sf of GBA $100,501,000 III.Indirect Costs Architecture, Engineering & Consulting 8%Direct Costs $8,040,000 Public Permits & Fees 4 400 Units $20,000 /Unit 8,002,000 Taxes, Insurance, Legal & Accounting 3%Direct Costs 3,015,000 Marketing 400 Units $5,000 /Unit 2,001,000 Developer Fee 5%Direct Costs 5,025,000 Soft Cost Contingency Allowance 5%Other Indirect Costs 1,304,000 Total Indirect Costs $27,387,000 IV.Financing Costs Interest During Construction Land 5 $52,272,000 Cost 3.6%Avg Rate $2,823,000 Construction 6 $137,441,000 Cost 3.6%Avg Rate 4,453,000 Loan Origination Fees 60%Loan to Cost 2.0 Points 2,277,000 Total Financing Costs $9,553,000 V.Total Construction Cost 400 Units $344,000 /Unit $137,441,000 Total Development Cost 400 Units $474,000 /Unit $189,713,000 1 Estimated based on a survey of the sales between 2016 and 2018 of residentially zoned land. 2 Based on the estimated costs for similar uses. 3 4 Based on estimates prepared for other projects within Huntington Beach. 5 Based on an 18 month construction period and a 100% average outstanding loan balance. 6 Based on an 18 month construction period and a 60% average outstanding loan balance. Based on 1.0 spaces for Studio Units; 1.0 spaces for One-Bedroom Units; 2.0 spaces for Two-Bedroom Units; 2.5 spaces for Three-Bedroom Units; and 0.50 spaces per unit for guest parking. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Low Page 8 of 20400 APPENDIX A - EXHIBIT II - TABLE 2 ESTIMATED STABILIZED NET OPERATING INCOME RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - LOW INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Gross Income A.Market Rate Units 1 Studio Units 54 Units @ $2,652 /Unit/Month $1,719,000 One-Bedroom Units 180 Units @ $3,189 /Unit/Month 6,888,000 Two-Bedroom Units 108 Units @ $4,856 /Unit/Month 6,293,000 Three-Bedroom Units 18 Units @ $5,501 /Unit/Month 1,188,000 B.Inclusionary Units: 10% of Units 2 Studio Units 6 Units @ $1,031 /Unit/Month 74,000 One-Bedroom Units 20 Units @ $1,175 /Unit/Month 282,000 Two-Bedroom Units 12 Units @ $1,311 /Unit/Month 189,000 Three-Bedroom Units 2 Units @ $1,442 /Unit/Month 35,000 C.Laundry & Miscellaneous Income 400 Units @ $25 /Unit/Month 120,000 Total Gross Income $16,788,000 Vacancy & Collection Allowance 5%Gross Income (839,000) II.Effective Gross Income $15,949,000 III.Operating Expenses General Operating Expenses 400 Units @ $4,500 /Unit $1,800,500 Property Taxes 400 Units @ $7,100 /Unit 2,851,000 Replacement Reserve Deposits 400 Units @ $150 /Unit 60,000 Total Operating Expenses ($4,711,500) IV.Stabilized Net Operating Income $11,237,500 1 2 The Inclusionary rent calculations are based on household income at 60% of AMI, with 30% of income allotted to housing related expenses. See APPENDIX D - EXHIBIT I. Based on the rent survey undertaken in February 2020 and presented in APPENDIX C. The weighted average monthly rent equates to $4.01 per square foot of leasable area. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Low Page 9 of 20401 APPENDIX A - EXHIBIT II - TABLE 3 INCLUSIONARY HOUSING IMPACTS RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - LOW INCOME ALTERNATIVE DENSITY @ 50 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Supportable Investment Stabilized Net Operating Income See APPENDIX A - EXHIBIT II - TABLE 2 $11,237,500 Threshold Return on Total Investment 1 6.1% Total Supportable Investment $183,413,000 II.Total Development Cost See APPENDIX A - EXHIBIT II - TABLE 1 $189,713,000 III.Reduced Value ($6,300,000) Return on Total Investment 5.9% 1 Based on the Developer Return estimated to be generated by the DENSITY @ 50 UNITS PER ACRE: MODERATE INCOME ALTERNATIVE. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF Low Page 10 of 20402 HUNTINGTON BEACH, CALIFORNIA APPENDIX A - EXHIBIT III RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - VERY LOW INCOME ALTERNATIVE 35% DENSITY BONUS: 67.5 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE PRO FORMA ANALYSES Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF VL DB Page 11 of 20403 APPENDIX A - EXHIBIT III - TABLE 1 ESTIMATED DEVELOPMENT COSTS RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - VERY LOW INCOME ALTERNATIVE 35% DENSITY BONUS: 67.5 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Property Acquisition Costs 1 348,480 Sf of Land $150 /Sf of Land $52,272,000 II.Direct Costs 2 On-Site Improvements/Landscaping 348,480 Sf of Land $20 /Sf of Land $6,970,000 Above-Ground Parking Spaces 3 729 Spaces $25,000 /Space 18,225,000 Building Costs 626,738 Sf of GBA $150 /Sf of GBA 94,011,000 Contractor/DC Contingency Allow 20%Other Direct Costs 23,841,000 Total Direct Costs 626,738 Sf of GBA $228 /Sf of GBA $143,047,000 III.Indirect Costs Architecture, Engineering & Consulting 8%Direct Costs $11,444,000 Public Permits & Fees 4 540 Units $20,000 /Unit 10,800,000 Taxes, Insurance, Legal & Accounting 3%Direct Costs 4,291,000 Marketing 540 Units $5,000 /Unit 2,700,000 Developer Fee 5%Direct Costs 7,152,000 Soft Cost Contingency Allowance 5%Other Indirect Costs 1,819,000 Total Indirect Costs $38,206,000 IV.Financing Costs Interest During Construction Land 5 $52,272,000 Cost 3.6%Avg Rate $2,823,000 Construction 6 $193,285,000 Cost 3.6%Avg Rate 6,262,000 Loan Origination Fees 60%Loan to Cost 2.0 Points 2,947,000 Total Financing Costs $12,032,000 V.Total Construction Cost 540 Units $358,000 /Unit $193,285,000 Total Development Cost 540 Units $455,000 /Unit $245,557,000 1 Estimated based on a survey of the sales between 2016 and 2018 of residentially zoned land. 2 Based on the estimated costs for similar uses. 3 4 Based on estimates prepared for other projects within Huntington Beach. 5 Based on an 18 month construction period and a 100% average outstanding loan balance. 6 Based on an 18 month construction period and a 60% average outstanding loan balance. Based on 1.0 space for Studio Units; 1.0 space for One-Bedroom Units; 2.0 spaces for Two-Bedroom Units; and 2.5 space for Three-Bedroom Units. No guest spaces are provided. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF VL DB Page 12 of 20404 APPENDIX A - EXHIBIT III - TABLE 2 ESTIMATED STABILIZED NET OPERATING INCOME RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - VERY LOW INCOME ALTERNATIVE 35% DENSITY BONUS: 67.5 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Gross Income A.Market Rate Units 1 Studio Units 74 Units @ $2,652 /Unit/Month $2,355,000 One-Bedroom Units 248 Units @ $3,189 /Unit/Month 9,490,000 Two-Bedroom Units 149 Units @ $4,856 /Unit/Month 8,682,000 Three-Bedroom Units 25 Units @ $5,501 /Unit/Month 1,650,000 B.Density Bonus: 11% Base Zoning Units 2 Studio Units 7 Units @ $850 /Unit/Month 71,000 One-Bedroom Units 22 Units @ $969 /Unit/Month 256,000 Two-Bedroom Units 13 Units @ $1,079 /Unit/Month 168,000 Three-Bedroom Units 2 Units @ $1,185 /Unit/Month 28,000 C.Laundry & Miscellaneous Income 540 Units @ $25 /Unit/Month 162,000 Total Gross Income $22,862,000 Vacancy & Collection Allowance 5%Gross Income (1,143,000) II.Effective Gross Income $21,719,000 III.Operating Expenses General Operating Expenses 540 Units @ $4,500 /Unit $2,430,000 Property Taxes 540 Units @ $7,200 /Unit 3,887,000 Replacement Reserve Deposits 540 Units @ $150 /Unit 81,000 Total Operating Expenses ($6,398,000) IV.Stabilized Net Operating Income $15,321,000 1 2 The Inclusionary rent calculations are based on household income at 50% of AMI, with 30% of income allotted to housing related expenses. See APPENDIX D - EXHIBIT I. Based on the rent survey undertaken in February 2020 and presented in APPENDIX C. The weighted average monthly rent equates to $4.01 per square foot of leasable area. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF VL DB Page 13 of 20405 APPENDIX A - EXHIBIT III - TABLE 3 INCLUSIONARY HOUSING IMPACTS RENTAL APARTMENT DEVELOPMENT 10% INCLUSIONARY UNITS - VERY LOW INCOME ALTERNATIVE 35% DENSITY BONUS: 67.5 UNITS PER ACRE FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA I.Supportable Investment Stabilized Net Operating Income See APPENDIX A - EXHIBIT III - TABLE 2 $15,321,000 Threshold Return on Total Investment 1 6.1% Total Supportable Investment $250,062,000 II.Total Development Cost See APPENDIX A - EXHIBIT III - TABLE 1 $245,557,000 III.Enhanced Value $4,505,000 Return on Total Investment 6.2% 1 Based on the Developer Return estimated to be generated by the DENSITY @ 50 UNITS PER ACRE: MODERATE INCOME ALTERNATIVE. Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; PF VL DB Page 14 of 20406 APPENDIX B RENTAL APARTMENT DEVELOPMENT AFFORDABILITY ANALYSES FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; App B Titles Page 15 of 20407 APPENDIX D - EXHIBIT I AFFORDABLE RENT CALCULATIONS 2020 INCOME STANDARDS RENTAL APARTMENT DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Studio Units One-Bedroom Units Two-Bedroom Units Three- Bedroom Units I.General Assumptions Area Median Income (AMI)1 $72,100 $82,400 $92,700 $103,000 Monthly Utilities Allowance 2 $51 $61 $80 $103 II.Affordable Rent Calculations 3 A.Moderate Income - Rent Based on 110% AMI Benchmark Annual Household Income $79,310 $90,640 $101,970 $113,300 Percentage of Income Allotted to Housing Expenses 30%30%30%30% Monthly Income Available for Housing Expenses $1,983 $2,266 $2,549 $2,833 (Less) Monthly Utilities Allowance (51)(61)(80)(103) Maximum Allowable Rent $1,932 $2,205 $2,469 $2,730 B.Low Income - Rent Based on 60% AMI Benchmark Annual Household Income $43,260 $49,440 $55,620 $61,800 Percentage of Income Allotted to Housing Expenses 30%30%30%30% Monthly Income Available for Housing Expenses $1,082 $1,236 $1,391 $1,545 (Less) Monthly Utilities Allowance (51)(61)(80)(103) Maximum Allowable Rent $1,031 $1,175 $1,311 $1,442 C.Very Low Income - Rent Based on 50% AMI Benchmark Annual Household Income $36,050 $41,200 $46,350 $51,500 Percentage of Income Allotted to Housing Expenses 30%30%30%30% Monthly Income Available for Housing Expenses $901 $1,030 $1,159 $1,288 (Less) Monthly Utilities Allowance (51)(61)(80)(103) Maximum Allowable Rent $850 $969 $1,079 $1,185 1 2 3 Based on the California Health & Safety Code Section 50053 calculation methodology. Based on the 2020 Orange County household incomes published by the California Housing & Community Development Department (HCD). The benchmark household size is set at the number of bedrooms in the unit plus one. Based on the Orange County Housing Authority utility allowance schedule effective as of 10/1/19. Assumes: Gas Cooking, Gas Heating, and Gas Water Heater; and Basic Electric. Prepared by: Keyser Marston Associates File name: HB Rent Inclusionary 5 6 20; Aff Rent Page 16 of 20408 APPENDIX D - EXHIBIT II IN-LIEU FEE ANALYSIS RENTAL APARTMENT DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Moderate Income Low Income I.Rent Difference 1 A.Studio Units Market Rate Units $2,652 $2,652 Affordable Units 1,932 1,031 Difference $720 $1,622 B.One-Bedroom Units Market Rate Units $3,189 $3,189 Affordable Units 2,205 1,175 Difference $984 $2,014 C.Two-Bedroom Units Market Rate Units $4,856 $4,856 Affordable Units 2,469 1,311 Difference $2,387 $3,545 D.Three-Bedroom Units Market Rate Units $5,501 $5,501 Affordable Units 2,730 1,442 Difference $2,772 $4,059 II.Distribution of Total Units 2 Studio Units 15%15% One-Bedroom Units 50%50% Two-Bedroom Units 30%30% Three-Bedroom Units 5%5% III.Annual Affordability Gap Per Affordable Unit $17,455 $30,201 Less: Property Tax Difference 3 (4,430)(7,660) Annual Affordability Gap Per Affordable Unit $13,025 $22,541 IV.Net Affordability Gap Per Affordable Unit 4 $192,000 $332,000 V.In-Lieu Fee Per Total Unit 5 $19,200 $33,200 Per Square Foot of Net Leasable Area 6 $20.70 $35.80 1 2 Based on the unit mix distribution applied in the pro forma analysis. 3 Based on the rent differential capitalized at a 4.3% rate to establish the value, and a 1.1% property tax rate. 4 Based on the Annual Affordability Gap Per Affordable Unit capitalized at the Threshold Return on Total Investment. 5 Based on the Affordability Gap Per Affordable Unit multiplied times the total number of units in the project. 6 Based on the Affordability Gap Per Affordable Unit divided by the average net leasable area per unit. The market rents are drawn from the pro forma analyses. See APPENDIX D - EXHIBIT I: The affordable rents are based on the H&SC Section 50053 calculation methodology. Prepared by: Keyser Marston Associates File name: HB Rent Inclusionary 5 6 20; ILF Page 17 of 20409 APPENDIX C RENT SURVEY FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA RENTAL APARTMENT DEVELOPMENT Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20; App C Titles Page 18 of 20410 APPENDIX C RENT SURVEY - 4 STAR PROPERTIES RENTAL APARTMENT DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Name Address # of Units Unit Size (SF)Total Per SF Parking Spaces Provided Per Unit Year Built Elan Huntington Beach 18504 Beach Boulevard 73 576 $2,464 $4.28 1.1 2015 The Residences at Bella Terra 7521 Edinger Avenue 67 585 $1,844 $3.15 1.1 2013 Beach & Ocean 19891-19895 Beach Boulevard 28 608 $2,035 $3.35 2014 Avalon Huntington Beach 7400 Center Avenue 62 690 $2,061 $2.99 2016 LUCE 7290 Edinger Avenue 26 670 $1,998 $2.98 1.7 2018 Minimum 576 $1,844 $2.98 Maximum 690 $2,464 $4.28 Weighted Average 619 $2,110 $3.44 The Residences at Bella Terra 7521 Edinger Avenue 212 773 $2,187 $2.83 LUCE 7290 Edinger Avenue 245 807 $2,337 $2.90 Elan Huntington Beach 18504 Beach Boulevard 126 784 $2,101 $2.68 Avalon Huntington Beach 7400 Center Avenue 196 777 $2,295 $2.95 Beach & Ocean 19891-19895 Beach Boulevard 91 687 $2,355 $3.43 Residences at Pacific City 21034 Pacific Coast Highway 306 944 $3,671 $3.89 Minimum 687 $2,101 $2.68 Maximum 944 $3,671 $3.89 Weighted Average 820 $2,626 $3.17 Average Effective Rent Studio Units One-Bedroom Units Source: Costar; February 2020 Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20 Page 19 of 20411 APPENDIX C RENT SURVEY - 4 STAR PROPERTIES RENTAL APARTMENT DEVELOPMENT FINANCIAL ANALYSIS: INCLUSIONARY HOUSING ORDINANCE UPDATE HUNTINGTON BEACH, CALIFORNIA Name Address # of Units Unit Size (SF)Total Per SF Parking Spaces Provided Per Unit Year Built Average Effective Rent LUCE 7290 Edinger Avenue 219 1,142 $2,834 $2.48 The Residences at Bella Terra 7521 Edinger Avenue 146 1,170 $2,776 $2.37 Elan Huntington Beach 18504 Beach Boulevard 75 1,104 $2,644 $2.39 Beach & Ocean 19891-19895 Beach Boulevard 54 980 $2,939 $3.00 Avalon Huntington Beach 7400 Center Avenue 120 1,191 $3,035 $2.55 Residences at Pacific City 21034 Pacific Coast Highway 96 1,279 $5,354 $4.19 Minimum 980 $2,644 $2.37 Maximum 1,279 $5,354 $4.19 Weighted Average 1,158 $3,185 $2.73 The Residences at Bella Terra 7521 Edinger Avenue 42 1,497 $3,416 $2.28 LUCE 7290 Edinger Avenue 20 1,446 $3,754 $2.60 Residences at Pacific City 21034 Pacific Coast Highway 114 1,593 $5,654 $3.55 Minimum 1,446 $3,416 $2.28 Maximum 1,593 $5,654 $3.55 Weighted Average 1,553 $4,904 $3.14 Two-Bedroom Units Three-Bedroom Units Source: Costar; February 2020 Prepared by: Keyser Marston Associates, Inc. File name: HB Rent Inclusionary 5 6 20 Page 20 of 20412 City of Huntington Beach File #:21-577 MEETING DATE:8/24/2021 PLANNING COMMISSION STAFF REPORT TO:Planning Commission FROM:Ursula Luna-Reynosa, Director of Community Development BY:Nicolle Aube, AICP, Senior Analyst SUBJECT: ZONING TEXT AMENDMENT NO. 19-004 (AFFORDABLE HOUSING ORDINANCE) REQUEST: To amend Section 230.26 - Affordable Housing of the Huntington Beach Zoning and Subdivision Ordinance. LOCATION: Citywide APPLICANT: City of Huntington Beach PROPERTY OWNER: Not applicable BUSINESS OWNER: Not applicable STATEMENT OF ISSUE: 1. Does the project satisfy all the findings required for a Zoning Text Amendment? 2. Has the appropriate level of environmental analysis been determined? RECOMMENDATION: That the Planning Commission take the following actions: A) Find that Zoning Text Amendment (ZTA) No. 19-004 is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (General Rule) of the CEQA Guidelines because there is no potential for the project to have a significant effect on the City of Huntington Beach Printed on 8/19/2021Page 1 of 8 powered by Legistar™413 File #:21-577 MEETING DATE:8/24/2021 environment (Attachment No. 1). B) Recommend approval of Zoning Text Amendment No. 19-004 with findings (Attachment No. 1) by approving draft City Council Ordinance No. 4235 and forward to the City Council for consideration (Attachment No. 2). ALTERNATIVE ACTION(S): A) Do not recommend approval of Zoning Text Amendment No. 19-004 to the City Council; or B) Continue Zoning Text Amendment No. 19-004 and direct staff accordingly. PROJECT PROPOSAL: Background: Zoning Text Amendment No. 19-004 represents a request to amend Section 230.26 - Affordable Housing of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO). In conjunction with ZTA No. 19-004, an update to the in-lieu fee is proposed. However, the in-lieu fee update is subject only to City Council approval and will be provided via a draft resolution for City Council consideration along with the zoning text amendments proposed as part of this ZTA No. 19-004. The City has contracted with an economic consultant, Keyser-Marston Associates (KMA), to assist in technical analysis and proposes the following changes to the ordinance: ·Updates and expands the options for projects to meet affordable housing requirements. ·Revises the in-lieu fee payment option and fee calculation methodology for ownership and rental housing projects. Notably, the option to pay in-lieu fees is recommended to be expanded for ownership projects of any size and rental projects with up to 100 units. Currently, the in-lieu fee option is limited to projects consisting of 30 units or less. ·Clarifies that rental projects must provide affordable units at the lower income level. ·Overall minor clarifications and revisions, including adding a “Definitions” section. The existing Affordable Housing ordinance is codified as Section 230.26 - Affordable Housing within the Huntington Beach Zoning and Subdivision Ordinance. The City’s Affordable Housing policies were established in the mid 1990’s and codified in 2005. The current affordable housing ordinance requires new residential projects proposing three or more units to provide at least 10 percent of the total units as affordable to either moderate or lower-income households. The existing ordinance provides several options for a project to meet the affordable housing obligation. A project may provide affordable units within the proposed project for onsite compliance. Further, the affordable units are permitted to be provided at an off-site location, and may be new construction or substantial rehabilitation of existing units. Preservation of at-risk units identified in the Housing Element may also satisfy the affordable housing obligation. All off-site inclusionary units must be constructed or rehabilitated prior to or concurrently with the primary project. The proposed revisions to the ordinance expand the options to satisfy the affordable housing obligation such as providing an affordable housing parcel within a larger market-rate project and dedicating land to the City for construction of affordable housing. The draft ordinance also includes specific compliance requirements for each option, such as providing an appraisal and Phase I City of Huntington Beach Printed on 8/19/2021Page 2 of 8 powered by Legistar™414 File #:21-577 MEETING DATE:8/24/2021 specific compliance requirements for each option, such as providing an appraisal and Phase I Environmental Site Assessment for land to be dedicated to the City to fulfill the affordable housing obligation. Construction of affordable units off-site will also be subject to specific standards, such as a 15% inclusionary requirement, the units shall be a rental product type, and 40% of the units shall contain at least two bedrooms. The current ordinance establishes an affordability term for affordable units. Affordable housing units are required to be available at an affordable housing cost for a 55 year term for rental units and 45 years for ownership units. The proposed revisions to the ordinance clarify that rental units are required to be made available to lower-income households and ownership units to moderate income households. The existing ordinance also permits the affordable housing obligation to be satisfied through the payment of in-lieu fees for new residential construction projects up to 30 units. As such, the current ordinance also includes provisions for the methodology, collection, and use of the affordable housing in-lieu fees. The option to pay in-lieu fees is recommended to be expanded to include all ownership projects of any size and rental projects with up to 100 units. KMA recommends a revised in-lieu fee methodology to calculate fees on a per square foot basis instead of the existing per unit methodology. Although not part of Zoning Text Amendment No. 19-004, the draft revised affordable housing in-lieu methodology and fee calculations are provided in the KMA study for information purposes only (Attachment Nos. 4 and 5). Study Session: The Planning Commission held a study session for ZTA No. 19-004 on August 10, 2021. The Commission asked staff to return with information regarding the following items: ·Section 230.26(E)(3)(d)(iii) - (vi): Redundancy among environmental requirements for land dedication option. Staff has revised the legislative draft to remove items (v) and (vi) as they are duplicative of item (iv). ·What is the City’s progress towards production of the 5th Cycle RHNA? See Table B of Attachment No. 6 - 2020 Housing Element Annual Progress Report. ·Has an applicant previously utilized the land dedication option to fulfill the affordable housing requirements? A search of City records indicates that an applicant has not previously dedicated land to fulfill the affordable housing requirements. The land dedication option is not provided in the existing ordinance, although it is an option in the existing density bonus ordinance. ·Is there risk to the City in accepting donated land? There could be some risk to the City in accepting a vacant property for affordable housing. However, risk would be mitigated through the City’s due diligence process, and ultimately, City of Huntington Beach Printed on 8/19/2021Page 3 of 8 powered by Legistar™415 File #:21-577 MEETING DATE:8/24/2021 acceptance of the property would be at the City Council’s discretion. ISSUES AND ANALYSIS: General Plan Conformance: The proposed ZTA is consistent with the goals and policies of the City’s General Plan including: Land Use Element Goal LU-4: A range of housing types is available to meet the diverse economic, physical, and social needs of future and existing residents, while neighborhood character and residences are well maintained and protected. Policy LU-4 (A): Encourage a mix of residential types to accommodate people with diverse housing needs. Housing Element Goal 3: Enhance housing affordability so that modest income households can remain an integral part of the Huntington Beach community. Policy 3.1: Housing Diversity. Encourage the production of housing that meets all economic segments of the community, including lower, moderate, and upper income households, to maintain a balanced community. Program 10: Continue to utilize the Inclusionary Housing Ordinance as a tool to integrate affordable housing within market rate developments, or alternatively, to generate fees in support of affordable housing in off-site locations. Establish an in-lieu fee amount for projects with between 10-30 units. Re -evaluate the Ordinance consistent with case law and to reflect market conditions and adopt an amendment to the Ordinance in the first half of 2020. Since the City has already addressed its moderate income RHNA allocation, the City will implement a City-wide policy to require at least half of on-site inclusionary units to be provided at levels affordable to lower income households. The proposed ZTA ensures that affordable units constructed on-site in market rate rental housing projects would be provided for lower income households. In addition, the proposed ZTA would allow all ownership housing projects to pay an in-lieu fee to satisfy the affordable housing requirement. If affordable units are provided within a market rate ownership housing project, the affordability level is set at moderate income. If in-lieu fees are paid by the developer of a market rate ownership housing project, those fees would be utilized for affordable housing projects that would provide deeper levels of affordability at low, very low and extremely low income levels. The proposed ZTA would therefore facilitate production of housing that meets all economic segments of the community consistent with General Plan Housing Element goal and policies. In addition, providing more options for developers to comply with affordable housing requirements furthers General Plan Land Use Element policies to encourage a mix of residential housing types and accommodate the diverse housing needs of the community. Zoning Compliance: The proposed updates to Section 230.26 do not change the Zoning designation of any property. The City of Huntington Beach Printed on 8/19/2021Page 4 of 8 powered by Legistar™416 File #:21-577 MEETING DATE:8/24/2021 following provides a review of the proposed amendments. 1.General Reorganization and Renumbering The existing ordinance requires the public to read through several various sections to gather all the information needed. The proposed update reorganizes the ordinance into a few key sections: Definitions, Applicability, On-Site Options, Alternatives to On-Site Options, and Miscellaneous Provisions. Notably, several requirements that were previously in the Miscellaneous Provisions section have been reorganized under each applicable section in order to increase readability for the public. For example, each option that permits a phasing plan to construct the market rate units and affordable units in phases is proposed to state this within its section. 2.Applicability The existing ordinance requires that a minimum of 10% of all new residential projects proposing three or more units shall be affordable housing units. There is no proposed change to the minimum percentage of affordable units, except for the following options: ·Minimum 15% inclusionary requirement: Off-site production ·Minimum 20% inclusionary requirement: Acquisition/rehabilitation projects and land dedication An applicant would only be required to provide more than 10% affordable units if they were to choose one of the above options to fulfill the inclusionary requirement. Projects located in Specific Plan areas will defer to the inclusionary requirements of each Specific Plan, if applicable. 3.On-Site Affordable Housing The existing ordinance includes provisions for fulfilling the inclusionary requirements on-site within a market rate project. The existing ordinance permits rental units to be made available to low-income or moderate-income households and ownership units to moderate-income households. The proposed amendments would require rental units to be made available to lower-income households, which is inclusive of low, very low, and extremely low-income households. The revised ordinance proposes more specific provisions for the existing options to provide affordable units on-site, including the following items: Ownership Units ·Affordable to moderate-income households ·Bedroom mix shall be proportional to the bedroom mix of the market rate units ·Affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units Rental Units ·Affordable to lower-income households ·Bedroom mix shall be proportional to the bedroom mix of the market rate units ·Affordable units may be no more than 20% smaller in square footage than the average square footage of the market rate units ·Interior improvements shall comply with the Low-Income Housing Tax Credit (LIHTC) minimum construction standards The revised ordinance expands the on-site affordable housing option to permit construction of affordable rental units within a market-rate ownership housing project. If a developer chooses this City of Huntington Beach Printed on 8/19/2021Page 5 of 8 powered by Legistar™417 File #:21-577 MEETING DATE:8/24/2021 affordable rental units within a market-rate ownership housing project. If a developer chooses this option, they may create a separate affordable housing parcel within the market-rate project site for the affordable rental units. The developer may enter into an agreement with an Affordable Housing Developer to construct, own, and operate the affordable housing units. Several provisions for the affordable units are proposed, such as a minimum of 40% of the units shall include at least two bedrooms and the Affordable Housing Developer shall enter into an Affordable Housing Agreement with the City. 4.Alternatives to On-Site Affordable Housing The existing ordinance includes general provisions for fulfilling the inclusionary requirements through options alternative to providing the affordable units within the market rate project. The existing ordinance permits offsite production of affordable units, acquisition and rehabilitation of existing units, land dedication, and payment of in-lieu fees. The revised ordinance proposes specific provisions for each of these options and updates each option in response to market trends. Offsite Production of Affordable Units The existing ordinance permits offsite construction of affordable units. The proposed update expands this section to include the following provisions: ·Minimum 15% inclusionary requirement ·Minimum 40% of units shall include at least two bedrooms ·Bedroom mix of affordable units shall be proportional to the bedroom mix of the market rate units that generated the inclusionary requirement ·Affordable units can be a maximum of 20% smaller than the average size of the market rate units Acquisition and Rehabilitation of Existing Units The existing ordinance permits acquisition and rehabilitation of deed-restricted affordable units identified as at-risk of conversion to market-rate units in the Housing Element. Units are typically identified as at-risk if affordability restriction periods are set to expire within the next five years. The proposed update expands this section to include the conversion of motels to rental units. It is also proposed for the inclusionary requirement to be set at 20% for developers choosing this option. Land Dedication The existing ordinance does not include a land dedication option to fulfill inclusionary housing requirements, although this option is available in the existing density bonus ordinance. The proposed land dedication option allows the City Council the discretion to approve a developer’s proposal to dedicate property in-lieu of constructing affordable units. Several provisions are proposed regarding the dedication of land, including the following: ·Minimum 20% inclusionary requirement ·The property shall be located within the City of Huntington Beach ·The developer shall convey the property to the City at no cost ·The existing General Plan and zoning standards shall allow for a residential use at a density sufficient to allow for the required number of affordable units to be constructed ·The site shall be suitable in terms of size, configuration, and physical characteristics to allow for the required number of affordable units to be developed on a cost efficient basis ·The developer shall provide a title report, appraisal, Phase I Environmental Site AssessmentCity of Huntington Beach Printed on 8/19/2021Page 6 of 8 powered by Legistar™418 File #:21-577 MEETING DATE:8/24/2021 ·The developer shall provide a title report, appraisal, Phase I Environmental Site Assessment (ESA), Phase II ESA if the Phase I report indicates hazardous materials were previously used on the site, and a site closure letter from the appropriate regulatory agency showing the site was remediated to residential standards if hazardous materials were previously remediated In-Lieu Fee Payment The existing ordinance permits all residential projects proposing up to 30 units to pay an in-lieu fee to fulfill the inclusionary housing requirement. The existing methodology calculates the fee on a per-unit basis. The proposed updates to the ordinance extends in-lieu fee eligibility to ownership projects proposing any number of units and rental projects up to 100 units. In-lieu fees paid to fulfill inclusionary requirements are placed in the City’s Affordable Housing Trust Fund (AHTF). There are no proposed changes to this section of the ordinance. The existing ordinance provides several provisions for using the AHTF monies, including the following: ·Constructing residential projects with a minimum 50% of units affordable to very low and low- income households ·Units constructed using AHTF monies must be affordable for a minimum of 55 years ·City Council has discretion to use AHTF for other related costs such as gap financing, pre- development costs, rehabilitation, and administrative costs 5.General Clarifications and Revisions The proposed updates to the ordinance include several clarifications and revisions. Definitions Section The existing affordable housing ordinance and proposed update include several technical terms that do not appear elsewhere in the HBZSO. The proposed definitions section is included in order to define existing and new terms in the ordinance. Reduced Fees for Affordable Housing The existing affordable housing ordinance includes section 230.26.G., which states that projects exceeding the minimum inclusionary requirement on site would be eligible for reduced city fees pursuant to adoption of an Affordable Housing Fee Reduction Ordinance by the City Council. This section was effectively completed through adoption of the Development Impact Fee (DIF) ordinances, which included fee exemptions for affordable housing units made available to lower income households. As such, this section is proposed to be deleted. Accessory Dwelling Units Recent state laws have expanded the option and ability of property owners to construct accessory dwelling units (ADU) on single-family or multi-family properties. The proposed update includes a provision which notes that construction of an ADU does not satisfy the inclusionary housing requirement. ADUs are typically much smaller in size than the associated market rate units. It can also become burdensome to ensure that all affordable housing monitoring and compliance regulations are adhered to. For example, deed-restricting an ADU as an affordable unit when it is on the same property as a market rate single-family residence would require the single-family property owner to income qualify each tenant of the ADU. City of Huntington Beach Printed on 8/19/2021Page 7 of 8 powered by Legistar™419 File #:21-577 MEETING DATE:8/24/2021 Urban Design Guidelines Conformance: Not applicable. Environmental Status: ZTA No. 19-004 does not propose directly or indirectly development that would result in physical changes to the environment. As such, ZTA No. 19-004 would also be exempt pursuant to Section 15061(b)(3) of the CEQA Guidelines, which exempts activities where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. Coastal Status: The proposed amendment will be forwarded to the California Coastal Commission as a minor Local Coastal Program Amendment for certification. Design Review Board: Not applicable. Other Departments Concerns and Requirements: ZTA No. 19-004 was prepared with input from the Housing Division of the Community Development Department and reviewed by the City Attorney’s Office. Public Notification: Legal notice was published in the Huntington Beach Wave on August 12, 2021 and notices were sent to individuals/organizations requesting notification (Planning Division’s Notification Matrix). As of August 16, 2021, no communications regarding the request have been received. Application Processing Dates: DATE OF COMPLETE APPLICATION:MANDATORY PROCESSING DATE(S): Not applicable.Legislative Action - Not Applicable. SUMMARY: Staff recommends approval of ZTA No. 19-004 based on the following reasons: 1. It is consistent with the general land uses, programs, goals, and policies of the General Plan. 2. It addresses a community need to update the existing ordinance to implement Housing Element programs, to facilitate provision of housing opportunities for all economic segments of the community, and reflect current market conditions. ATTACHMENTS: 1.Suggested Findings of Approval - ZTA No. 19-004 2. Draft City Council Ordinance No. 4235 3. ZTA No. 19-004 Legislative Draft 4. KMA Report 5. KMA Financial Analysis 6. 2020 Housing Element Annual Progress Report City of Huntington Beach Printed on 8/19/2021Page 8 of 8 powered by Legistar™420 City of Huntington Beach File #:21-674 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Public Hearing to consider acceptance of the Fiscal Year 2020-2021 Consolidated Annual Performance & Evaluation Report (CAPER) Statement of Issue: The U.S. Department of Housing and Urban Development (HUD) requires the City to conduct a Public Hearing to approve the Fiscal Year (FY) 2020-2021 Consolidated Annual Performance & Evaluation Report (CAPER) in accordance with Federal regulation 24 CFR 570.486(a)(5). Financial Impact: There is no fiscal impact to receive and file this document. Recommended Action: A) Conduct the Public Hearing to hear comments and approve the FY 2020-2021 Consolidated Annual Performance and Evaluation Report (CAPER) for Community Development Block Grant (CDBG), CARES Act CDBG Coronavirus (CDBG-CV), and HOME Investment Partnerships Act (HOME) Federal funds; and, B) Authorize the City Manager to transmit this report to the United States Department of Housing and Urban Development (HUD) by September 28, 2021. Alternative Action(s): Do not approve and file the report and direct staff accordingly. Analysis: BACKGROUND/DISCUSSION Annually, the City is required to submit to HUD its CAPER, which reports on program performance and accomplishments for the use of CDBG, CDBG-CV, and HOME entitlement funds. The City is required, via its adopted Citizen Participation Plan, to conduct a public hearing to adopt the CAPER. City of Huntington Beach Printed on 9/15/2021Page 1 of 3 powered by Legistar™421 File #:21-674 MEETING DATE:9/21/2021 The purpose of the CAPER is threefold: 1. It provides HUD with necessary information for it to meet its statutory requirement to assess each grantee's ability to carry out relevant City programs in compliance with all applicable rules and regulations; 2. It provides information necessary for HUD's Annual Report to Congress, which is also statutorily mandated; and, 3. It provides the City an opportunity to describe its successes in revitalizing deteriorated neighborhoods and meeting objectives stipulated in the Consolidated Plan. As such, the FY 2020-2021 CAPER has been prepared in accordance with Federal guidelines. The CAPER highlights the City's achievements during the implementation year of the HUD-funded CDBG and HOME Programs covering July 1, 2020 through June 30, 2021. Additionally, the CAPER reports the progress the City has made in carrying out its strategic plan as part of the Five-Year Consolidated Plan and its Annual Action Plan. In addition to CDBG and HOME funding, in response to the COVID- 19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act and it was signed into law on March 27, 2020,authorizing $2.2 trillion for a variety of measures to prevent, prepare for, and respond to the COVID-19 pandemic. Under the CARES Act, HUD provided special allocations of CDBG funds to the City of Huntington Beach. In total, the City received $2,159,775 of CDBG-CV funds for FY 2020-2021 to prevent, prepare for, and respond to the COVID- 19 pandemic. Every five years, the City prepares a Consolidated Plan describing the proposed use of CDBG, HOME, and other applicable Federal program funds, including CDBG-CV. The Council-adopted Consolidated Plan for 2015-2020 identifies the City's overall vision and strategy for addressing housing and non-housing community development needs in Huntington Beach. As a means to achieve the strategic goals outlined by the Consolidated Plan, the City prepares an Annual Action Plan that describes projects, programs, and activities that will address the priority needs of low- and moderate-income households through community development, economic development, housing, and public services during the specified year. Public Service Accomplishments (CDBG and CDBG-CV) HUD allows up to 15 percent of CDBG funds to be used for public service programs including services provided for people experiencing homelessness or for elderly adults, and services related to employment, health, crime prevention, childcare, drug abuse, education, fair housing counseling, and energy conservation. However, the CARES Act suspended the 15 percent cap, not only for a jurisdiction’s CDBG-CV allocation but also for its 2019 and 2020 CDBG allocations, provided the funds are used to prevent, prepare for, or respond to COVID-19.To this end, the City was able to allocate over $3 million in CDBG (2019 and 2020) and CDBG-CV public service funding to the Cameron Lane Navigation Center. The emergency homeless shelter bolstered the City’s efforts to prevent, prepare, and respond to COVID-19 among one of the most vulnerable populations in Huntington Beach by keeping them socially distanced and sheltered during the pandemic. Additionally, the City funded public services administered by City departments and other social service agencies that assist youth, homeless, and the elderly. From the 2020 CDBG entitlement specifically, the City allocated nearly 63 percent on public services. City of Huntington Beach Printed on 9/15/2021Page 2 of 3 powered by Legistar™422 File #:21-674 MEETING DATE:9/21/2021 For FY 2020-2021, public service program accomplishments included the following: ·Provided literacy services to 125 low-income adults to improve their ability to understand, speak, read, and write English ·Assisted 85 children and families with after-school drop-in recreation services focused on child development, parent education, and mental health ·Provided services to 412 at-risk older adults including care management, home delivered meals, and transportation ·Provided homeless services to 1,021 people; 827 as part of the homeless outreach program, 167 as part of Cameron Lane Navigation Center, and 27 as part of the StandUp for Kids Street Outreach and Robyne’s Nest programs Capital Improvement Accomplishments (CDBG) For FY 2020-2021, the City Council allocated $393,732 to capital projects. These funds helped accomplish the completion of the ADA Curb Cuts in Maintenance Zone 3. The project was completed on scheduled and provided 1,939 disabled persons with improved access to streets. Tenant-Based Rental Assistance (HOME) The City continues to have success in providing short and medium-term rental assistance targeting the homeless, those at risk of homelessness, seniors, veterans, and victims of domestic violence. Using HOME funds, the City allocated $642,400 in funds for FY 2020-2021 and was able to assist 68 households working with three operators to run the program. It is recommended that after conducting the public hearing, the Mayor and City Council accept the Consolidated Annual Performance and Evaluation Report, inclusive of public comments, and authorize the City Manager to execute all required documents for transmittal to HUD by September 28, 2021. Environmental Status: Pursuant to CEQA Guidelines Section 15378(b)(4), government fiscal activities that do not result in a physical change in the environment and do not commit the lead agency to any specific project, do not constitute a project. Therefore, these activities are exempt in accordance with CEQA Guidelines Section 15060(c)(3). Strategic Plan Goal: Economic Development & Housing Attachment(s): 1. Consolidated Annual Performance & Evaluation Report (CAPER) FY 2020-21 City of Huntington Beach Printed on 9/15/2021Page 3 of 3 powered by Legistar™423 Action Plan CITY OF HUNTINGTON BEACH CONSOLIDATED ANNUAL PERFORMANCE & EVALUATION REPORT (CAPER) JULY 1, 2020 – JUNE 30, 2021 PUBLIC REVIEW DRAFT September 2, 2021 – September 21, 2021 CITY OF HUNTINGTON BEACH OFFICE OF BUSINESS DEVELOPMENT 2000 MAIN STREET HUNTINGTON BEACH, CA 92648 424 CITY OF HUNTINGTON BEACH 2020/21 CAPER TABLE OF CONTENTS SECTION PAGE Introduction ............................................................................................................................ 1 CR-05: Goals and Outcomes ................................................................................................... 4 CR-10: Racial and Ethnic Composition of Families Assisted ................................................. 13 CR-15: Resources and Investments …………….……. …..…… .......................................... 14 CR-20: Affordable Housing .................................................................................................... 21 CR-25: Homeless and Other Special Needs ........................................................................... 23 CR-30: Public Housing ............................................................................................................ 27 CR-35: Other Actions ............................................................................................................. 28 CR-40: Monitoring .................................................................................................................. 35 CR-45: CDBG ........................................................................................................................... 37 CR-50: HOME ......................................................................................................................... 39 APPENDICES Appendix 1: 2020 CDBG Financial Summary Report Appendix 2: 2020 CDBG Activity Summary by Selected Grant Report Appendix 3: Summary of Citizen Comments Appendix 4: Proof of Publication 425 CAPER 1 OMB Control No: 2506-0117 (exp. 09/30/2021) Introduction The City of Huntington Beach’s (City) FY 2020/21 Consolidated Annual Performance Evaluation Report (CAPER) is the first year-end performance evaluation under the 2020/21 – 2024/25 Consolidated Plan. The CAPER discusses affordable housing outcomes, homelessness and special needs activities, non-housing community development activities, and other actions in furtherance of the City’s Annual Action Plan (AAP) Programs and Projects for Fiscal Year (FY) 2020/21. This document will be formatted using HUD’s CAPER template, which will be submitted online by way of the Integrated Disbursement and Information System (IDIS). The City receives Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) funds each year from the federal government to support housing and community development activities that principally benefit low and moderate-income households. To receive these federal funds, the City must adopt a five-year strategic plan that identifies local needs, and how these needs will be prioritized and addressed using these federal funds. In July 2020, the Huntington Beach City Council adopted a five-year (FY 2020/21– 2024/25) Consolidated Plan. Huntington Beach’s Consolidated Plan builds upon several other related planning documents, including: the 2015/16-2019/20 Consolidated Plan; the City’s 2014- 2021 Housing Element; 2020/2024 Analysis of Impediments to Fair Housing Choice (AI); 2019 Orange County Point-in-Time Count; and the 2019 Orange County Continuum of Care Needs Assessment. This CAPER also covers activities carried out in FY 2020/21 to prevent, prepare for, and respond to the Novel Coronavirus. On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law, which included $2 billion to be allocated under the Community Development Block Grant (CDBG) Program to aid grantees in the preparation, prevention, and response to the Novel Coronavirus (COVID-19) pandemic. Huntington Beach received a total of $2,159,775, all of which was programmed in FY 2020/21. Strategic Plan Summary The City’s Consolidated Plan strategy includes general priorities to meet the needs of the community and the City’s rationale for investment of federal funds. In order to address the needs, the City identified seven priorities having the greatest need in the community. The seven priority needs include: 1. Households with Housing Problems 2. Homelessness 3. Special Needs Populations 426 CAPER 2 OMB Control No: 2506-0117 (exp. 09/30/2021) 4. Priority Community Services 5. Priority Community and Public Facilities 6. Priority Infrastructure Improvements 7. Other Housing and Community Development Needs The seven priorities were formed based on the national objectives and outcomes supported by HUD as described below. National Objectives • Provide decent affordable housing. The activities that typically would be found under this objective are designed to cover a wide range of housing possibilities under HOME and CDBG. • Creating a suitable living environment. In general, this objective relates to activities that are designed to benefit communities, families, or individuals by addressing issues in their living environment. • Creating economic opportunities. This objective applies to the types of activities related to economic development, commercial revitalization, or job creation. National Objective Outcomes The outcomes reflect what the grantee (the City) seeks to achieve by the funded activity. The City of Huntington Beach associates the national objectives to these outcomes: • Availability/Accessibility. • Affordability; and • Sustainability. Summary For fiscal year 2020/21, the City of Huntington Beach had a total of $2,866,418 in CDBG funds. This total amount was comprised of $1,237,035 in Fiscal 2020/21 CDBG entitlement funds, $952,209.35 in program income1, and $677,174 in prior year unallocated CDBG funds carried forward (includes both entitlement and prior year program income). CDBG funds were used for public services, public facility and infrastructure improvements, code enforcement, CDBG 1 Total program income receipted between July 1, 2020 and June 30, 2021 was $1,100,205.23. However, $147,995.88 was already accounted for and disbursed as reported in the 2019 PR26 CDBG Financial Summary Report. Therefore, program income has been reduced to $952,209.35. Also, On June 15, 2020, the Huntington Beach City Council approved the cancellation of the Revolving Loan Fund and a one-time transfer of funds from the RLF to PI was made in the amount of $894,187.71. This was done on November 16, 2020. 427 CAPER 3 OMB Control No: 2506-0117 (exp. 09/30/2021) administration, residential rehabilitation, residential rehabilitation loan and grant administration, and fair housing services. The City of Huntington Beach also had available $4,825,611 in HOME Program funds comprised of a FY 2020/21 allocation of $619,525, receipted program income of $82,736, and a carryover balance of $4,123,611 (includes prior year entitlement and program income). The City used HOME funds for administration of the HOME program, and three tenant based rental assistance programs. Thirdly, the City had a total of $2,159,775 in CARES Act funding (CDBG-CV) which, sans CDBG- CV Program Administration, was entirely allocated to the Cameron Lane Navigation Center Operations Project. The Cameron Lane Navigation Center is an emergency homeless shelter located at 17631 Cameron Lane, Huntington Beach and served to protect homeless persons from contracting COVID-19 by giving them a safe place to stay during the County’s Safer-at- Home Order. Based on the limited amount of federal and non-federal resources available for housing and community development projects and programs, the City addressed the needs having a high priority level in FY 2020/21. 428 CAPER 4 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-05 – Goals and Outcomes Progress the jurisdiction has made in carrying out its strategic plan and its action plan. 91.520(a) This could be an overview that includes major initiatives and highlights that were proposed and executed throughout the program year. Table 1 below illustrates the City’s FY 2020/21 Annual Action Plan outcomes (based on defined units of measure) as it compares to the five-year Consolidated Plan aggregate (2020/21 – 2024/25). Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g) Categories, priority levels, funding sources and amounts, outcomes/objectives, goal outcome indicators, units of measure, targets, actual outcomes/outputs, and percentage completed for each of the grantee’s program year goals. 429 CAPER 5 OMB Control No: 2506-0117 (exp. 09/30/2021) Goal Category Source / Amount Indicator Unit of Measure Expected – Strategic Plan Actual – Strategic Plan Percent Complete Expected – Program Year Actual – Program Year Percent Complete Increase Access to Community Services to LMI Perso Non-Homeless Special Needs CDBG: $280,000 Public service activities other than Low/Moderate Income Housing Benefit Persons Assisted 2,000 Persons (Children’s Bureau: 2,000 persons) 85 Persons (Children’s Bureau: 85 persons) 4.25% 400 Persons (Children’s Bureau: 400 persons) 85 Persons (Children’s Bureau: 85 persons) 21.25% Planning for Housing and Community Development Administration CDBG: $1,437,224 HOME: $432,790 Not applicable. Not applicable. Not applicable. Not applicable. Not applicable. Not applicable. Not applicable. Not applicable. Preserve Existing & Create New Comm. & Public Fac Homeless Non-Housing Community Development CDBG: $1,461,662 Public Facility or Infrastructure Activities other than Low/Moderate Income Housing Benefit Persons Assisted 5,000 Persons (Various Public Improvemen t Projects) 0 Persons (No public facility projects funded in FY 2020/21) 00.00% 0 Persons (No public facility projects funded in FY 2020/21) 0 Persons (No public facility projects funded in FY 2020/21) 00.00% Preserve Existing and Create New Affordable Housing Affordable Housing HOME: $4,175,718 Rental units constructed Household Housing Unit 20 Housing Units (TBD Acq/ Rehab/ New Construction Projects) 0 Housing Units (HB Senior Housing Project: Underway) 0.00% 17 Housing Units (HB Senior Housing Project: 17 housing units) 0 Housing Units (HB Senior Housing Project Underway) 0.00% 430 CAPER 6 OMB Control No: 2506-0117 (exp. 09/30/2021) Goal Category Source / Amount Indicator Unit of Measure Expected – Strategic Plan Actual – Strategic Plan Percent Complete Expected – Program Year Actual – Program Year Percent Complete Preserve Existing and Create New Affordable Housing Affordable Housing HOME: $1,625,000 Tenant-based rental assistance / Rapid Rehousing Households Assisted 100 Households (Various Service Providers: 100 households) 68 Households (Families Forward TBRA: 21 households; Interval House TBRA: 21 households; Mercy House TBRA: 26 households) 68.00% 55 Households (Families Forward TBRA: 20 households; Interval House TBRA: 17 households; Mercy House TBRA: 18 households) 68 Households (Families Forward TBRA: 21 households; Interval House TBRA: 21 households; Mercy House TBRA: 26 households) 123.64% Provide Needed Infrastructure Improvements Non-Housing Community Development CDBG: $1,569,394 Public Facility or Infrastructure Activities other than Low/Moderate Income Housing Benefit Persons Assisted 2,000 Persons (Various Infrastructur e Improvement Projects) 1,939 Persons (ADA Curb Cuts in Maintenance Zone 3: 1,939 persons) 96.95% 1,939 Persons (ADA Curb Cuts in Maintenance Zone 3: 1,939 persons) 1,939 Persons (ADA Curb Cuts in Maintenance Zone 3: 1,939 persons) 100.00% Support Agencies that Assist Special Needs Populat Non-Homeless Special Needs CDBG: $262,208 Public service activities other than Low/Moderate Income Housing Benefit Persons Assisted 1,775 Persons (Senior Services Care Management: 825 persons; Oakview Family Literacy Program: 950 persons) 537 Persons (Senior Services Care Management: 412 persons; Oakview Family Literacy Program: 125 persons) 30.25% 355 Persons (Senior Services Care Management: 165 persons; Oakview Family Literacy Program: 190 persons) 537 Persons (Senior Services Care Management: 412 persons; Oakview Family Literacy Program: 125 persons) 151.27% 431 CAPER 7 OMB Control No: 2506-0117 (exp. 09/30/2021) Goal Category Source / Amount Indicator Unit of Measure Expected – Strategic Plan Actual – Strategic Plan Percent Complete Expected – Program Year Actual – Program Year Percent Complete Support Efforts to Address Homelessness Homeless CDBG: $1,782,881 CDBG-CV: $2,028,847 Public service activities other than Low/Moderate Income Housing Benefit Persons Assisted 2,705 Persons (Homeless Outreach: 2,000 persons; StandUp for Kids Street Outreach: 560 persons; Robyne’s Nest Housing for Homeless: 45 persons; Cameron Lane Navigation Center: 100 persons) 1,021 Persons (Homeless Outreach: 827 persons; StandUp for Kids Street Outreach: 20 persons; Robyne’s Nest Housing for Homeless: 7 persons; Cameron Lane Navigation Center: 167 persons) 37.74% 721 Persons (Homeless Outreach: 400 persons; StandUp for Kids Street Outreach: 112 persons; Robyne’s Nest Housing for Homeless: 9 persons; Cameron Lane Navigation Center: 100 persons) 1,021 Persons (Homeless Outreach: 827 persons; StandUp for Kids Street Outreach: 20 persons; Robyne’s Nest Housing for Homeless: 7 persons; Cameron Lane Navigation Center: 167 persons) 141.61% Support Efforts to Address Homelessness Homeless CDBG: $0 Homeless Person Overnight Shelter Persons Assisted 0 Persons (Goal not identified in 2020/21 AAP) 345 Persons (Homeless Outreach Program: 171 persons; Robyne’s Nest Housing for Homeless: 7 persons Cameron Lane Navigation Center: 167 persons) 100.00% 0 Persons (Goal not identified in 2020/21 AAP) 345 Persons (Homeless Outreach Program: 171 persons; Robyne’s Nest Housing for Homeless: 7 persons Cameron Lane Navigation Center: 167 persons) 100.00% 432 CAPER 8 OMB Control No: 2506-0117 (exp. 09/30/2021) Goal Category Source / Amount Indicator Unit of Measure Expected – Strategic Plan Actual – Strategic Plan Percent Complete Expected – Program Year Actual – Program Year Percent Complete Support Efforts to Address Homelessness Homeless CDBG: $0 Overnight/Emer gency Shelter/Transitio nal Housing Beds added Beds 0 Persons (Goal not identified in 2020/21 AAP) 345 Persons (Homeless Outreach Program: 171 persons; Robyne’s Nest Housing for Homeless: 7 persons Cameron Lane Navigation Center: 167 persons) 100.00% 0 Persons (Goal not identified in 2020/21 AAP) 345 Persons (Homeless Outreach Program: 171 persons; Robyne’s Nest Housing for Homeless: 7 persons Cameron Lane Navigation Center: 167 persons) 100.00% Sustain and Strengthen Neighborhoods Affordable Housing CDBG: $1,315,000 Homeowner Housing Rehabilitated Household Housing Unit 100 Housing Units (Owner Occupied Rehab Grant Program: 40 housing units; Owner Occupied Rehab Loan Program: 10 housing units; Housing Rehab Admin.: 50 housing units) 7 Housing Units (Owner Occupied Rehab Grant Program: 7 housing units; Owner Occupied Rehab Loan Program: 0 housing units; Housing Rehab Admin.: 0 housing units) 7.00% 20 Housing Units (Owner Occupied Rehab Grant Program: 8 housing units; Owner Occupied Rehab Loan Program: 2 housing units; Housing Rehab Admin.: 10 housing units) 7 Housing Units (Owner Occupied Rehab Grant Program: 7 housing units; Owner Occupied Rehab Loan Program: 0 housing units; Housing Rehab Admin.: 0 housing units) 35.00% 433 CAPER 9 OMB Control No: 2506-0117 (exp. 09/30/2021) Goal Category Source / Amount Indicator Unit of Measure Expected – Strategic Plan Actual – Strategic Plan Percent Complete Expected – Program Year Actual – Program Year Percent Complete Sustain and Strengthen Neighborhoods Affordable Housing CDBG: $1,000,000 Housing Code Enforcement/Fo reclosed Property Care Household Housing Unit 3,000 Housing Units (Special Code Enforcement: 3,000 housing units) 1,112 Housing Units (Special Code Enforcement: 1,112 housing units) 37.07% 600 Housing Units (Special Code Enforcement: 600 housing units) 1,112 Housing Units (Special Code Enforcement: XX housing units) 185.33% Table 1 - Accomplishments – Program Year & Strategic Plan to Date 434 CAPER 10 OMB Control No: 2506-0117 (exp. 09/30/2021) Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the plan, giving special attention to the highest priority activities identified. Consistent with the City’s Priority Needs outlined in the Consolidated Plan, the City allocated the largest share of its CDBG funding to non-housing community development activities (public facilities, infrastructure, and public services), preceded by the community’s housing needs and program administration funded by both CDBG and HOME. The City’s Priority Needs are a product of the Needs Assessment, Housing Market Analysis, public input, and community needs survey – all conducted during the development of the Consolidated Plan. The Consolidated Plan’s five-year priorities for assistance with CDBG and HOME funds also takes into consideration several factors such as: 1) those households most in need of housing and community development assistance, as determined through the Consolidated Plan needs assessment, consultation, and public participation process; 2) which activities will best meet the needs of those identified households; and 3) the extent of other non-federal resources that can be utilized to leverage/match CDBG and HOME funds to address these needs. Overall, the approved projects and programs in the FY 2020/21 Annual Action Plan assisted as many participants as possible with limited resources available. Public service allocations usually amount to the maximum allowable under CDBG regulations (15 percent of the annual allocation); however, the City was allowed to exceed the statutory 15 percent maximum as part of the CARES Act that was signed into law on March 27, 2020 as a means to help cities across the nation respond to the Novel Coronavirus pandemic. The City allocated 63 percent of its 2020 CDBG entitlement grant to public service activities that bolstered the City’s ability to prevent, prepare, and respond to COVID-19. This included an allocation of $85,000 to the Homeless Outreach Program; $15,000 to StandUp for Kids Street Outreach; $10,000 to Robyne’s Nest Housing for High School Students; $44,000 to Senior Services Care Management; $10,000 to the Oakview Literacy Program; and additional funds of $1,568,942 (CDBG and CARES Act CDBG-CV funds) to the 2019 Cameron Lane Navigation Center Operations Program (“Navigation Center”). The Navigation Center was originally awarded $1.5 million in 2019/20, for a new total allocation of $3,068,942. The City exceeded nearly all of their public service goals in FY 2020/21. In the Support Agencies that Assist Special Needs Populations goal, the City proposed to assist 355 persons, but exceeded that goal by 151 percent (537 persons). Success in this area can be attributed to the Senior Services Care Management Program that provided meals and other services to 412 seniors in the program year, surpassing their goal of 165. Likewise, in the Support Efforts to Address Homelessness category, the City assisted 1,021 persons instead of the 721 proposed. 435 CAPER 11 OMB Control No: 2506-0117 (exp. 09/30/2021) Included in this category is the Homeless Outreach Program which more than doubled their proposed performance with 827 homeless persons receiving services throughout the year. In the midst of the COVID-19 pandemic, the Homeless Outreach Program was instrumental in securing homeless persons overnight stays at the Cameron Lane Navigation Center. The Navigation Center also surpassed their goal of providing overnight shelter to 100 persons with reaching 167 instead. Other programs funded under this goal are two homeless youth programs – StandUp for Kids Street Outreach and Robyne’s Nest Housing for Homeless High Schoolers – both of which did not reach their service goals. While homeless programs, in general, worked tirelessly to house and serve the homeless community during the pandemic, school shutdowns during the program year affected the referral system utilized by StandUp for Kids and Robyne’s Nest to reach out and assess the needs of homeless youth. Finally, under the goal, Increase Access to Community Services to LMI Persons, the Children’s Bureau program, only met 21 percent of their 400-person goal to provide free after school childcare to school aged children in the Oak View neighborhood. Understandably with school being moved online under the Safer-at-Home Order during the year, the Children’s Bureau struggled to meet their service goals. In the area of affordable housing – another major priority in the Huntington Beach Consolidated Plan – the City funded three programs to meet the affordable housing needs of Huntington Beach residents: homeowner rehabilitation, acquisition/rehabilitation/new construction projects, and tenant based rental housing. In FY 2020/21, the City’s goal was to fund and complete a total of 10 rehabilitation projects over the course of the year and met this goal by 70 percent. Success came in the form of rehabilitation grants; more substantial rehabilitation projects that require loans to complete were stalled because of COVID-19. While a couple of homeowners showed interest in the program, they were ultimately hesitant to move forward for fear of coming into close contact with contractors and city staff. Both the homeowner rehabilitation loan and grant program will be funded in FY 2021/22 as well. The City also had a goal to develop 17 HOME-restricted, affordable rental housing units via a partnership with a local CHDO, Jamboree Housing Corporation. The Huntington Beach Senior Housing Project, located at 18431 Beach Boulevard, was awarded $2.8 million in HOME funds to develop a site with 43 one-bedroom/one-bath units and one two-bedroom/one-bath managers’ unit, ground-level and subterranean parking, conference/office rooms and lounge areas for residents, and outdoor amenities such as a courtyard and a public park with fitness stations. During the program year, the City certified Jamboree Housing Corporation as a CHDO, partnered with the County of Orange to complete an Environmental Assessment on the proposed project, and worked with the developer to negotiate the terms for an Affordable Housing Agreement. The project is expected to commence in FY 2021/22. 436 CAPER 12 OMB Control No: 2506-0117 (exp. 09/30/2021) The third program the City supports to meet the affordable housing needs of Huntington Beach residents is tenant based rental assistance programs. In FY 2020/21, the City funded three separate programs with Families Forward, Interval House, and Mercy House with a cumulative goal to provide rental assistance to 55 low and moderate-income households. The City exceeded its goal with 68 households assisted, many of which were homeless prevention clients experiencing a sudden loss of income due to the Coronavirus. The City allotted $642,400 in HOME funds to offset rental subsidy costs, and used CDBG-CV Program Administration funds to pay for TBRA project delivery costs. In FY 2020/21, the City also allocated $393,732 in CDBG funds to the ADA Curb Cuts in Maintenance Zone 3 project. The project was completed on schedule and provides 1,939 disabled persons with improved access to streets in the area encompassing Maintenance Zone 3. Lastly, the City also exceeded its code enforcement goal of inspecting 600 housing units for local health and safety compliance by over 185 percent. As a reminder, results will vary from year to year depending on when they are funded and when they are completed. Generally, affordable housing, public facility, and public infrastructure projects span multiple years. The accomplishments for projects and programs that have been funded in FY 2020/21 or sooner and are currently underway will be included in the CAPER once the national objective has been met at project completion. 437 CAPER 13 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-10 - Racial and Ethnic C omposition of F amilies A ssisted Describe the families assisted (including the racial and ethnic status of families assisted). 91.520(a) CDBG HOME TOTAL White 3,123 58 3,181 Black or African American 104 5 109 Asian 278 3 281 American Indian or American Native 16 0 16 Native Hawaiian or Other Pacific Islander 14 0 14 Other Multi Racial 54 2 56 TOTAL 3,589 68 3,657 Hispanic 639 27 666 Not Hispanic 2,950 41 2,991 Table 2 – Table of assistance to racial and ethnic populations by source of funds Narrative For program year 2020/21, the majority of the CDBG allocation was invested in community development and housing activities, such as infrastructure improvement, public services, code enforcement, administration, and affordable housing. HOME funds were invested in tenant-based rental assistance for homeless persons, victims of domestic violence, and for households affected by COVID-19. As a result, over 7 percent of Asians and over 18 percent of Hispanics participating in CDBG, or HOME funded activities received some type of assistance. In the HOME-funded tenant based rental assistance programs specifically, approximately 85 percent were white, 7 percent assisted were black or African American, 5 percent were Asian, and nearly 40 percent identified as Hispanic. Also noteworthy is the City’s commitment to benefit disabled persons in Huntington Beach as evident with its investment in ADA projects. Of the total persons assisted in FY 2020/21, approximately 2,000 were disabled per U.S. Census Data. 438 CAPER 14 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-15 - Resources and Investments 91.520(a) Identify the resources made available Source of Funds Source Resources Made Available Amount Expended During Program Year CDBG public - federal $2,866,418 $2,349,707 HOME public - federal $4,825,610 $1,377,332 CDBG-CV Public - federal $2,159,775 $281,114 Table 3 - Resources Made Available Narrative During FY 2020/21, the City had over $9.85 million in Federal CDBG, HOME, and CARES Act (CDBG-CV) Funds to address the goals and objectives of the FY 2020/21 Annual Action Plan. Specifically, the CDBG entitlement amount for FY 2020/21 was $1,237,035. Prior year unspent funds were $677,174 (includes both entitlement and program income), and program income receipts totaled $952,209, resulting in a total of $2,866,418 in CDBG. HOME funding for FY 2020/21 was $619,525 in entitlement funds, $82,736 in receipted program income, and $4,123,611 in unspent prior year funds. CARES Act funding was also made available via a special allocation of CDBG funds (CDBG-CV) to help the city prevent, prepare, and respond to the Novel Coronavirus. In FY 2020/21, the City of Huntington Beach received a total of $2,159,775 from two separate tranches (CV1 and CV3). Expenditures during the 2020/21 program year totaled $4,008,153 from federal resources and program income which addressed the needs of extremely, low, and moderate-income persons. CDBG expenditures included projects and programs approved in FY 2020/21 and from prior years. A total of $1,377,332 in HOME expenditures was expended on HOME Administration and tenant based rental assistance. CDBG-CV disbursements were made on program administration of COVID-related activities, and on the Cameron Lane Navigation Center. 439 CAPER 15 OMB Control No: 2506-0117 (exp. 09/30/2021) Identify the geographic distribution and location of investments Target Area Planned Percentage of Allocation Actual Percentage of Allocation Narrative Description Citywide 97 95 Citywide Low- and Moderate-Income Areas Low- and Moderate- Income Areas Special Code Enforcement Target Area 3 5 Table 4 – Identify the geographic distribution and location of investments Narrative The City utilizes CDBG and HOME funds for projects and programs operated citywide. However, the majority of CDBG-funded infrastructure and facility projects are targeted to the most-needy neighborhoods: those census tracts where 51% or more of the residents are low- or moderate-income, or to special needs populations in the community. In FY 2020/21, 95 percent of all disbursements were for activities benefitting persons citywide, including those for program administration, housing (tenant based rental assistance and homeowner rehabilitation), public services, and one ADA infrastructure project. Specifically, for Code Enforcement, the City conducted a visual (windshield) survey of CDBG eligible areas for properties, businesses, parkways, alleys, and structures that met the City’s definition of “deteriorated or deteriorating”. Based on the survey, the City determined that low- and moderate-income areas within the area bound by Bolsa Chica Street to the west, Bolsa Avenue to the north, Brookhurst Street to the east, and Atlanta Avenue to the south contained the most properties with deterioration. In some cases, structures had multiple violations per parcel. This target area is known as the “Special Code Enforcement Target Area,” which received 5 percent of overall federal investment. Inclusive of the following census tracts, the Special Code Enforcement Target Area is comprised of 46,650 persons, 32,395, or 69.44%, of which are of low-moderate income. 440 CAPER 16 OMB Control No: 2506-0117 (exp. 09/30/2021) SPECIAL CODE ENFORCEMENT TARGET AREA TOTAL POPULATION V. LOW AND MODERATE-INCOME POPULATION 2011-2015 HUD LOW MOD INCOME SUMMARY DATA Effective April 1, 2019 Census Tract Total Persons Total LMI Persons Percentage 0992121 1,255 810 64.54% 0992123 1,495 1,030 68.90% 0992124 1,180 655 55.51% 0992144 765 425 55.56% 0992352 715 515 72.03% 0992353 2,190 1,245 56.85% 0992422 1,930 1,185 61.40% 0992442 1,645 1,145 69.60% 0992463 815 490 60.12% 0993051 1,710 1,450 84.80% 0993053 2,020 1,330 65.84% 0993055 1,080 935 86.57% 0993056 1,025 560 54.63% 0993061 1,485 760 51.18% 0993093 1,775 915 51.55% 0993103 1,170 690 58.97% 0994021 2,755 2,300 83.48% 0994022 2,720 2,235 82.17% 0994023 575 330 57.39% 0994024 3,375 3,150 93.33% 0994053 1,755 1,070 60.97% 0994103 2,605 1,935 74.28% 0994112 2,180 1,890 86.70% 0994113 1,300 855 65.77% 0994114 880 655 74.43% 0994121 1,810 980 54.14% 0994134 1,360 1,240 91.18% 0996031 3,080 1,615 52.44% TOTAL 46,650 32,395 69.44% 441 CAPER 17 OMB Control No: 2506-0117 (exp. 09/30/2021) Leveraging Explain how federal funds leveraged additional resources (private, state, and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were u sed to address the needs identified in the plan. The City is required to provide a 25 percent match for HOME funds drawn down on all HOME activities, sans those funded with program income or administrative funds. The City leverages resources among the formula grant programs. Historically, the City has met the HOME match by layering former redevelopment tax increment with HOME-assisted affordable housing acquisition and rehabilitation. As a result of past leveraging contributions toward affordable housing activities, the City has a surplus of match credits. The match carry-over surplus from prior years was $2,741,888. The City’s HOME match liability for FY 2020/21 was $9,854.55. However, as part of the flexibilities/waivers granted by the CARES Act and Mega Waiver, Huntington Beach is not required to provide a match liability for the period of October 1, 2019 through September 30, 2021. The excess match of $2,741,888 will, therefore, be carried over to the next fiscal year. Fiscal Year Summary – HOME Match 1. Excess match from prior Federal fiscal year $2,741,888 2. Match contributed during current Federal fiscal year $0 3 .Total match available for current Federal fiscal year (Line 1 plus Line 2) $2,741,888 4. Match liability for current Federal fiscal year $0 5. Excess match carried over to next Federal fiscal year (Line 3 minus Line 4) $2,741,888 Table 5 – Fiscal Year Summary - HOME Match Report 442 CAPER 18 OMB Control No: 2506-0117 (exp. 09/30/2021) Match Contribution for the Federal Fiscal Year Project No. or Other ID Date of Contribution Cash (non-Federal sources) Foregone Taxes, Fees, Charges Appraised Land/Real Property Required Infrastructure Site Preparation, Construction Materials, Donated labor Bond Financing Total Match 0 0 0 0 0 0 0 0 0 Table 6 – Match Contribution for the Federal Fiscal Year HOME MBE/WBE report Program Income – Enter the program amounts for the reporting period Balance on hand at beginning of reporting period $ Amount received during reporting period $ Total amount expended during reporting period $ Amount expended for TBRA $ Balance on hand at end of reporting period $ $1,618,153.74 $23,896.00 $498,818.67 $498,818.67 $1,143,231.07 Table 7 – Program Income 443 CAPER 19 OMB Control No: 2506-0117 (exp. 09/30/2021) Minority Business Enterprises and Women Business Enterprises – Indicate the number and dollar value of contracts for HOME projects completed during the reporting period Total Minority Business Enterprises White Non- Hispanic Alaskan Native or American Indian Asian or Pacific Islander Black Non- Hispanic Hispanic Contracts Number 0 Dollar Amount 0 Sub-Contracts Number 0 Dollar Amount 0 Total Women Business Enterprises Male Contracts Number 0 Dollar Amount 0 Sub-Contracts Number 0 Dollar Amount 0 Table 8 - Minority Business and Women Business Enterprises Minority Owners of Rental Property – Indicate the number of HOME assisted rental property owners and the total amount of HOME funds in these rental properties assisted Total Minority Property Owners White Non- Hispanic Alaskan Native or American Indian Asian or Pacific Islander Black Non- Hispanic Hispanic Number 0 0 0 0 0 0 Dollar Amount 0 0 0 0 0 0 Table 9 – Minority Owners of Rental Property 444 CAPER 20 OMB Control No: 2506-0117 (exp. 09/30/2021) Relocation and Real Property Acquisition – Indicate the number of persons displaced, the cost of relocation payments, the number of parcels acquired, and the cost of acquisition Parcels Acquired 0 0 Businesses Displaced 0 0 Nonprofit Organizations Displaced 0 0 Households Temporarily Relocated, not Displaced 0 0 Households Displaced Total Minority Property Enterprises White Non- Hispanic Alaskan Native or American Indian Asian or Pacific Islander Black Non- Hispanic Hispanic Number 0 0 0 0 0 0 Cost 0 0 0 0 0 0 Table 10 – Relocation and Real Property Acquisition 445 CAPER 21 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-20 - Affordable Housing 91.520(b) Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low-income, low-income, moderate- income, and middle-income persons served. One-Year Goal Actual Number of Homeless households to be provided affordable housing units 0 0 Number of Non-Homeless households to be provided affordable housing units 0 0 Number of Special-Needs households to be provided affordable housing units 17 0 Total 17 0 Table 11 – Number of Households One-Year Goal Actual Number of households supported through Rental Assistance 0 0 Number of households supported through The Production of New Units 17 0 Number of households supported through Rehab of Existing Units 0 0 Number of households supported through Acquisition of Existing Units 0 0 Total 17 0 Table 12 – Number of Households Supported Discuss the difference between goals and outcomes and problems encountered in meeting these goals. The City allocated $2.8 million in HOME funds for the development of a 43 -unit senior affordable housing project at 18431 Beach Boulevard in the FY 2020/21 Annual Action Plan. The Huntington Beach Senior Housing Project will be developed in partnership with Jamboree Housing Corporation. With an investment of $2.8 million, the City estimated that 17 units would be HOME-restricted to eligible Huntington Beach seniors. During the year, the City certified Jamboree as a Community Housing Development Organization (CHDO) as required by HOME regulations, completed an Environmental Assessment for the project, and worked with the development team to draft an Affordable Housing Agreement. The project is 446 CAPER 22 OMB Control No: 2506-0117 (exp. 09/30/2021) expected to commence in FY 2021/22. Actual accomplishments will be reported when the project is complete, and a national objective is met. Discuss how these outcomes will impact future annual action plans. The Huntington Beach 2020/21-2024/25 Consolidated Plan forecasts that 20 housing units could be developed by way of acquisition, rehabilitation, or new construction by the expiration of the Plan. The Huntington Beach Senior Housing Project, when complete, will satisfy 85 percent of the 5-year goal. With this in mind, the City will continue to pursue additional affordable housing development opportunities to create three additional units by the end of 2024/25. Include the number of extremely low-income, low-income, and moderate-income persons served by each activity where information on income by family size is required to determine the eligibility of the activity. Number of Households Served CDBG Actual HOME Actual TOTAL Extremely Low-income 4 50 54 Low-income 2 13 15 Moderate-income 1 5 6 Total 7 68 75 Table 13 – Number of Households Served Narrative Information During the program year, Huntington Beach completed seven residential rehabilitation projects and assisted 68 households with tenant based rental assistance. Of all persons assisted, 72 percent were of extremely low income, 20 percent were low-income, and 8 percent were moderate-income. 447 CAPER 23 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) Evaluate the jurisdiction’s progress in meeting its specific objectives for reducing and ending homelessness through: Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs Beginning in 2015, the City assigned a full-time officer dedicated to homeless issues and has continued to allocate resources as the number of homeless continues to grow. The City's efforts have grown to include a Homeless Task Force (with four full-time officers, 1 program coordinator and up to 4 case managers) and a Navigation Center (emergency homeless shelter) providing shelter for eligible homeless individuals with ties to Huntington Beach. This multi-pronged approach is accomplished in a variety of ways such as weekly outreach to engage homeless individuals and determine their needs, reuniting individuals with family members, working within the County's Coordinated Entry System to match individuals and families with housing opportunities, assisting in eviction prevention, maintaining walk-in office hours at the Main Police Station, as well as working cooperatively with local schools to assist children who are homeless or housing insecure. In FY 2020/21, CDBG funds were invested in both of these efforts. The Homeless Task Force was allocated $85,000 in CDBG public service funds and assisted 827 persons throughout the year; and the Cameron Lane Navigation Center was awarded over $3 million in both CDBG and CDBG-CV public service funds and provided emergency shelter to 167 persons. The City also sponsored two homeless youth programs in FY 2020/21 : StandUp for Kids Street Outreach and Robyne’s Nest Housing for Homeless High Schoolers Program. The core mission of StandUp for Kids is to end the cycle of youth homelessness. The agency’s focus is on prevention, outreach support, transitional housing and providing an array of resources and services to help homeless and at-risk youth on their journey to becoming self-sufficient adults. StandUp for Kids Orange County's weekly Street Outreach & Mentoring Program is a county- wide program where volunteer staff scout Orange County streets searching for youth who are currently unsheltered or unstably housed. StandUp for Kids served teens and youth (ages 12 - 24) who were homeless, at-risk, aging-out of foster care, or runaways to equip them with the tools they need to transition from life on the street to a life of stability and opportunity. The mission of Robyne's Nest was to identify at-risk and homeless high school students and provide them a path to become stable and productive citizens. Robyne's Nest helped seven 448 CAPER 24 OMB Control No: 2506-0117 (exp. 09/30/2021) high school students in the Huntington Beach area who had little to no parental support with academic, financial, and life skills. They assisted students with security, routine, and a place to belong. Their purpose was to enable students to complete their high school diploma and continue onward with college, trade school, or military programs. Robyne's Nest provided housing resources; basic needs such as food, clothing, and supplies; educational assistance such as tutoring, Chromebooks, school supplies, and fees; and overall help with health and wellbeing in the form of counseling, therapy, mentoring, and life skills classes. Addressing the emergency shelter and transitional housing needs of homeless persons In FY 2020/21, the City partnered with Mercy House to operate the Cameron Lane Navigation Center, an emergency homeless shelter, which received funding from CDBG, CDBG-CV (CARES Act funding for activities that prevent, prepare, and respond to COVID-19), and local SB2 funding. The Navigation Center opened its doors in December 2020. The Center has the capacity to shelter up to 117 adults and couples during COVID-19 (to facilitate greater social distancing) and 174 adults and couples during normal conditions. The Center provided access to vital services that helped clients on the path towards housing security. The City awarded over $1 million in CDBG and $2 million in CDBG-CV funding to this integral component to the city’s homeless and COVID-19 response system. Mercy House reported 167 unduplicated homeless persons were housed and assisted during the 2020/21 program year. Interval House, Mercy House, and Families Forward provided tenant based rental assistance to the homeless and those at risk of homelessness. The City had a goal of providing TBRA to 55 homeless, senior, and veteran households, and ultimately provided support to 68 households, a success rate of 124 percent. As mentioned above, the City also funded the StandUp for Kids Street Outreach Program with $15,000 in CDBG. This youth outreach program used volunteer staff to scout the streets of Huntington Beach searching for youth who were unsheltered or unstably housed. StandUp for Kids also scouts local high schools and Golden West College to outreach to and assess students who may need homeless services. The Street Outreach program provided basic services (food, clothing, hygiene items, and survival kits) as well as medical assistance and compassionate mentoring to 20 youth during the program year. Robyne’s Nest Housing for Homeless High Schoolers Program received an award of $10,000 in CDBG funding and assisted a total of seven participants with housing resources; basic needs such as food, clothing, and supplies; educational assistance such as tutoring, Chromebooks, 449 CAPER 25 OMB Control No: 2506-0117 (exp. 09/30/2021) school supplies, and fees; and overall help with health and wellbeing in the form of counseling, therapy, mentoring, and life skills classes. Finally, the City has and will continue to address the emergency shelter and transitional housing needs of homeless and homeless families through support of homeless programs such as the Huntington Beach Youth Emergency Shelter; Interval House; Mercy House; Beach Cities Interfaith Services; Collette's Children's Home transitional housing for battered/homeless mothers with children; American Family Housing transitional housing and supportive housing rental assistance; and Project Self-Sufficiency transitional housing for single parent families. Through the City's participation in the Huntington Beach Homeless Collaborative, the City will support the provision of emergency housing and services by the local faith-based community. Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: likely to become homeless after being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs To help prevent homelessness and protect at-risk populations, Huntington Beach continued to participate in the Orange County Continuum of Care System to provide assistance to persons at risk of becoming homeless. Additionally, the City continued its dedication to assisting families in Huntington Beach with much needed rental assistance. In May 2020, a NOFA/RFP was solicited to qualified agencies with experience in administering HOME-funded TBRA programs, and the City ultimately selected three TBRA subrecipients: Families Forward, Interval House, and Mercy House to carry out this program for the City. With an investment of $642,400 in HOME funds, the City assisted 68 households. Those that qualified for assistance included households of low to moderate income, as well as households who were already housed, but were at risk of losing their housing (homeless prevention) due to a sudden loss of income that could be attributed to COVID-19. As discussed above, the City also funded the Homeless Outreach Program, StandUp for Kids Street Outreach Program, and Robyne’s Nest Housing for Homeless High Schoolers in FY 2020/21. The StandUp for Kids program specifically helps homeless youth ages 12 through 24 in their transition out of foster care. Services provided range from attending to their basic 450 CAPER 26 OMB Control No: 2506-0117 (exp. 09/30/2021) needs for food, clothing, hygiene, and medical care to assessing and mentoring these individuals to exit homelessness. In FY 2020/21 this program assisted 20 youth, while the City’s Homeless Outreach Program assisted 827 persons. Robyne’s Nest also centered their focus on youth needs including housing, medical, employment, and educational needs. They assisted seven youth in FY 2020/21. The City does not receive Emergency Solutions Grants (ESG) or Housing Opportunities for Persons with AIDS (HOPWA) funding and therefore is not required to develop a discharge coordination policy. However, the City will continue to address a discharge coordination policy with the Orange County Housing Authority and the Continuum of Care Homeless Issues Task Force. Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again In an ongoing effort to continue to address the needs of the homeless and those at risk of homelessness, the City focused on the development of sustainable and effective programming, including: applying for short and long-term available funding; partnering with experienced service providers capable of leveraging other funding; creating or securing affordable housing; performing homeless case management; and engaging the homeless through a street outreach component in order to better connect them to available services. Additionally, the Huntington Beach City Council approved funding of over $3 million in CDBG and CDBG-CV funding to operate an emergency homeless shelter with wrap around services to help homeless individuals transition to more stable housing upon exiting the shelter. Thirdly, the City continued to provide tenant based rental assistance to qualified households in FY 2020/21. The need for rental subsidies continues to be a priority for the City, and in May 2020, the City released a NOFA/RFP to qualified agencies with experience administering HOME-funded TBRA programs, and a selection was made in June 2020 for TBRA implementation in FY 2020/21. 451 CAPER 27 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-30 - Public Housing 91.220(h); 91.320(j) Actions taken to address the needs of public housing The City of Huntington Beach does not have any public housing developments. However, Huntington Beach is one of a number of cities that benefits from the services of the Orange County Housing Authority (OCHA), which is currently manages Housing Choice Vouchers for residential units within Huntington Beach. The OCHA waiting list is currently closed. Actions taken to encourage public housing residents to become more involved in management and participate in homeownership Not applicable. Actions taken to provide assistance to troubled PHAs Not applicable. 452 CAPER 28 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) Through the administration of the CDBG and HOME programs, every effort is made to remove barriers to affordable housing through agreements with for-profit and non-profit affordable housing developers. These efforts also include working with neighborhood residents to ensure affordable housing projects are acceptable. Ongoing monitoring of both “for sale” and rental affordable units is conducted by department staff by assuring that the affordable housing covenants are recorded on title when the unit is sold. To address the decline in sources of housing funds, the City will continue to advocate for and pursue federal, state, local and private funding sources for affordable housing. Additionally, as part of the City’s Housing Element (2021-2029) update, the City must assess and to the extent feasible, mitigate, its governmental constraints to housing for lower and moderate-income households and persons with disabilities. While the Housing Element Update is still being prepared, the current Housing Element (2013 -2021) addressed the City’s provisions for affordable housing, emergency shelters, transitional housing, and supportive housing. The City's 2013-2021 Housing Element specifically addresses the variety of regulatory and financial tools used by the City to remove barriers and facilitate the provision of affordable housing, including the following: • Program 2. Multi-family Acquisition/Rehabilitation through Non-Profit Developers Objective: Acquire, rehabilitate, and establish affordability covenants on 80 rental units. • Program 7. Residential and Mixed-Use Sites Inventory Objective: Maintain current inventory of vacant and underutilized development sites and provide to developers along with information on incentives. • Program 8. Beach and Edinger Corridors Specific Plan Objective: Facilitate development through flexible, form-based standards, and streamlined processing. Encourage affordable housing by requiring inclusionary units to be provided on-site, or within the Specific Plan, and providing additional incentives for increased percentages of affordable units. 453 CAPER 29 OMB Control No: 2506-0117 (exp. 09/30/2021) • Program 10. Inclusionary Program and Housing Trust Fund Objective: Continue implementation and re-evaluate Ordinance to provide consistency with case law and market conditions. Establish in-lieu fee amount for projects between 10-30 units. • Program 11. Affordable Housing Development Assistance Objective: Provide financial and regulatory assistance in support of affordable housing. Provide information on incentives to development community. • Program 13. Affordable Housing Density Bonus Objective: Continue to offer density bonus incentives as a means of enhancing the economic feasibility of affordable housing development. • Program 14. Development Fee Assistance Objective: Continue to offer fee reductions to incentivize affordable housing. Specify the waiver of 100% of application processing fees in the Code for projects with 10% extremely low-income units. • Program 15. Residential Processing Procedures Objective: Provide non-discretionary development review within the Beach and Edinger Corridors Specific Plan. Adopt streamlined review procedures for multi-family development on a Citywide basis. Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j) The City of Huntington Beach has identified long-range strategies, activities, and funding sources to implement the goals in the areas of housing and community development services for the benefit of the residents. • The City continued to seek other resources and funding sources to address the biggest obstacle to meeting the community's underserved needs, which is the lack of, and/or, inadequate funding. • The City looked for innovative and creative ways to make its delivery systems more comprehensive and continued existing partnerships with both for-profit and not-for- profit organizations. • The City used HOME and CDBG funds to concentrate on both affordable rental 454 CAPER 30 OMB Control No: 2506-0117 (exp. 09/30/2021) housing, tenant-based rental housing, and homeowner rehabilitation programs. • The City addressed certain housing needs with federal funds such as availability, condition, and fair housing practices to prevent homelessness. • The City also addressed community development needs with federal funds such as infrastructure, improving public facilities and code enforcement. • The City is working with surrounding jurisdictions on a regional approach to meeting the underserved needs. Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) As a means of better protecting children and families against lead poisoning, in 1999 HUD instituted revised lead-based paint regulations focused around the following five activities: • Notification • Lead Hazard Evaluation • Lead Hazard Reduction • Ongoing Maintenance • Response to Children with Environmental Intervention Blood Lead Level The City has implemented HUD Lead Based Paint Regulations (Title X), which requires federally funded rehabilitation projects to address lead hazards. Lead-based paint abatement is part of the City's Housing Rehabilitation Program and the Acquisition/Rehabilitation of Affordable Rental Housing Program. Units within rental housing projects selected for rehabilitation are tested if not statutorily exempt. Elimination or encapsulation remedies are implemented if lead is detected and is paid for by either the developer of the project, or with CDBG or HOME funds, as appropriate. To reduce lead-based paint hazards in existing housing, all housing rehabilitation projects supported with federal funds are tested for lead and asbestos. When a lead-based paint hazard is present, the City or the City’s sub-grantee contracts with a lead consultant for abatement or implementation of interim controls, based on the findings of the report. Tenants are notified of the results of the test and the clearance report. In Section 8 programs, staff annually inspects units on the existing program and new units as they become available. In all cases, defective paint surfaces must be repaired. In situations where a unit is occupied by a household with children under the age of six, corrective actions will include testing and abatement if necessary, or abatement without testing. Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) 455 CAPER 31 OMB Control No: 2506-0117 (exp. 09/30/2021) The City’s major objectives in reducing poverty within Huntington Beach are to: • Reduce the number of families on welfare. • Reduce the number of families needing housing subsidies; and • Increase economic opportunities for low- and moderate-income persons. The City’s anti-poverty strategy seeks to enhance the employability of residents through the promotion and support of programs which provide employment training and supportive services, while expanding employment opportunities through the implementation of three Business Improvement Districts, and its Economic Development Strategy. In terms of employment training and supportive services, the City supported literacy programs for families (Oakview Family Literacy Program) with a combination of General Funds and CDBG that helped to enhance the employability of low-income persons with deficient English speaking, reading, and writing skills. During the program year and amid the COVID-19 pandemic, the Oak View Literacy program offered its program online to 125 participants. The City also provided $5,000-$10,000 grants as part of its COVID-19 Small Business Relief Program. The program, which was entirely funded with $4.75 million of one-time federal CARES Act funds distributed to the City by the Orange County Board of Supervisors, provided immediate relief to local businesses that experienced hardship due to COVID-19. Eligible businesses had to have 2-10 employees, be independently owned, and operated in Huntington Beach, and be negatively impacted by COVID-19. Funds were used for rent/lease payments, mortgage interest payments, utilities, personal protective equipment, payroll, and other COVID-19 related operational or safety expenses. Next, the City of Huntington Beach supported a variety of economic development activities that helped to create and retain jobs for low- and moderate-income households. Activities supported include access to Surf City Locator, a free property listing and demographics website that is available 24/7 and is fed directly through the largest and most up-to-date commercial and industrial listing service in Southern California. Each listing is connected to a world of helpful community demographic data, retail potential, heat maps, zoning information, labor market & talent pool details, and more. The City fully complied with Section 3 of the Housing and Community Development Act, which helps foster local economic development and individual self-sufficiency. This set of regulations require that to the greatest extent feasible, the City will provi de job training, employment, and contracting opportunities for low or very low-income residents in 456 CAPER 32 OMB Control No: 2506-0117 (exp. 09/30/2021) connection with housing and public construction projects. Actions taken to develop institutional structure. 91.220(k); 91.320(j) As the recipient of CDBG and HOME funds, the City delegated the Community Development Department to be the lead department responsible for the overall administration of HUD grants. In that regard, the Department prepared the Consolidated Plan and the Regional Analysis of Impediments to Fair Housing Choice, drafted the Annual Action Plan and CAPER, as well as all other reports required by federal rules and regulations. The City has worked with non-profit agencies, for-profit developers, advocacy groups, clubs, organizations, neighborhood leadership groups, City departments, the private sector, and other government entities to implement the City’s five-year strategy to address the priority needs outlined in the Consolidated Plan for Fiscal Years 2020/21 – 2024/25. Engaging the community and stakeholders in the delivery of services and programs for the benefit of low to moderate residents has been vital in overcoming gaps in service delivery. The City also utilized public notices, Community Workshops and Meetings (as appropriate), the City’s website, and other forms of media to deliver information on carrying out the Consolidated Plan strategies. Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j) In an ongoing effort to bridge the gap of various programs and activities, the City developed partnerships and collaborations with local service providers and City departments that have been instrumental in meeting the needs and demands of the homeless, low-income individuals and families, and other special needs. The array of partners includes but is not limited to the Huntington Beach Police Department, Library Services, Community Services, and Public Works Departments, American Family Housing, Habitat for Humanity, Interval House, Mercy House, Families Forward, Collete’s Children’s Home, AMCAL, Community SeniorServ, Project Self Sufficiency, the Fair Housing Foundation, the Orange County Housing Authority, and 2-1-1 Orange County and OC Community Services (Orange County Continuum of Care). Identify actions taken to overcome the effects of any impediments identified in the jurisdictions analysis of impediments to fair housing choice. 91.520(a) In May 2020, Huntington Beach, along with 20 other Orange County cities, the County of Orange, and the Lawyers Committee for Civil Rights Under Law, developed the Orange County Analysis of Impediments to Fair Housing Choice. The AI outlined fair housing priorities and 457 CAPER 33 OMB Control No: 2506-0117 (exp. 09/30/2021) goals to overcome fair housing issues. In addition, the AI laid out meaningful strategies to be implemented to achieve progress towards the County’s obligation to affirmatively furthering fair housing. The 2020-2024 AI identified these goals: 1. Increase the supply of affordable housing in high opportunity areas . 2. Prevent displacement of low- and moderate-income residents with protected characteristics, including Hispanic residents, Vietnamese residents, seniors, and people with disabilities. 3. Increase community integration for persons with disabilities. 4. Ensure equal access to housing for persons with protected characteristics, who are disproportionately likely to be lower-income and to experience homelessness. 5. Expand access to opportunity for protected classes. In FY 2020/21, the City of Huntington Beach negotiated the terms of a 43 -unit affordable housing development for seniors located at 18431 Beach Boulevard. The project, known as the Huntington Beach Senior Affordable Housing Project, is a collaborative effort between the City and Jamboree Housing Corporation and seeks to accomplish several of the goals listed above. The project will increase the supply of affordable housing, will integrate persons with disabilities into the project, will ensure equal access to housing for persons with protected characteristics (seniors), and expands access to opportunity for protected classes. The project is currently underway. The City also contracted with the Fair Housing Foundation (FHF) to provide the following services to affirmatively further fair housing: Education and Outreach Activities In partnership with the FHF, the City conducted multi-faceted fair housing outreach to Huntington Beach tenants, landlords, property owners, realtors, and property management companies. Methods of outreach included workshops, informational booths at community events, presentations to civic leaders and community groups, staff trainings, and distribution of multi-lingual fair housing literature. In FY 2021/22, the FHF provided 222 unduplicated households with these direct client services. The FHF also provided a comprehensive, extensive, and viable education and outreach program. The purpose of this program was to educate managers, tenants, landlords, owners, realtors, and property management companies on fair housing laws, to promote media and consumer interest, and to secure grass roots involvement within communities. FHF specifically aimed their outreach to persons and protected classes that were most likely to 458 CAPER 34 OMB Control No: 2506-0117 (exp. 09/30/2021) encounter housing discrimination. FHF conducted regularly scheduled “All Area Activities” that directly benefited residents of Huntington Beach. In FY 2020/21, 222 individuals were assisted within city limits, four fair housing workshops and four walk-in clinics were offered, and 11 individuals were trained in fair housing laws and practices. Third, the FHF participated in many community relations events including making contact with 10 agencies to discuss fair housing; attended 9 agency and community meetings; made 7 agency and community presentations; and distributed 6,017 pieces of literature including in Huntington Beach. Finally, the City worked to enhance access to services and housing for residents with limited English proficiency. For the federal CDBG program, the City offered to make public notices available in English, Spanish and Vietnamese, and ensured translators were available at public meetings, if requested. Landlord/Tenant Counseling Services Another service provided by the Fair Housing Foundation are landlord and tenant counseling services. FHF counseled managers, owners, realtors, landlords and tenants on their rights and responsibilities. FHF Housing Counselors counsel each client initially to determine if any fair housing violations have occurred. A total of 247 persons received these counseling services in FY 2020/21. Of the issues counseled on, the top three were on habitability (14 percent), notices (13 percent) and evictions (13 percent). Additionally, FHF continued to provide investigation and response to allegations of illegal housing discrimination. Of the 26 allegations of discrimination, 19 were resolved and 7 resulted in further investigation including a review of documents and a site survey. These 7 cases of illegal discrimination were based on source of income (5), marital status (1), and physical disability (1). Of the opened cases, four are currently still under investigation and one sustained the allegations. For cases that cannot be conciliated, FHF refers them to the Department of Fair Housing and Employment (DFEH), U.S. Department of Housing and Urban Development (HUD), small claims court, or to a private attorney, as warranted. Investigative Testing and Auditing Local Real Estate Markets Audits were used to address a lack of bonafide cases during the fiscal year. Through counseling and case management, FHF identified that the most common complaints being alleged were based on source of income. A total of four audits were conducted on randomly selected properties. 459 CAPER 35 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-40 - Monitoring 91.220 and 91.230 Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long-term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements The City follows monitoring procedures for subrecipients, which includes in-house review of quarterly progress reports and expenditures, and an annual desk or on-site visit to ensure compliance with federal regulations. The monitoring system encourages uniform reporting to achieve consistent information on beneficiaries. Technical assistance is provided throughout the program year on an as-needed basis. Formal monitoring of four public service agreements with 2018/19 and 2019/20 subrecipients was performed by desk review during the program year because of the COVID-19 pandemic. Monitoring of FY 2020/21 subrecipients will be conducted in FY 2021/22. The City also performs project monitoring of all rent restricted affordable units assisted with HOME, CDBG, and the former Redevelopment Agency Housing Set-Aside Funds, and in accordance with 24 CFR 92.504 (d): • Annual audits for compliance with regulatory agreement affordability covenants; and • On site visits, which include property inspections of randomly selected units assisted with HOME, CDBG, and former Redevelopment Agency Housing Set- Aside Funds. However, all on-site inspections were postponed due to social distancing requirements brought on by the Coronavirus. Desk audits are expected to take place in FY 2021/22. In addition, the City encouraged minority business outreach in all of its federally assisted (CDBG and HOME) construction work in excess of $2,000. As part of the Notice Inviting Bid procedures, the City requires subrecipients undertaking improvements, reconstruction, or rehabilitation of community and private facilities, infrastructure projects, and affordable housing developments to make a good faith effort to hire women or minority-based businesses and to require equal employment opportunity for all individuals and business concerns. Citizen Participation Plan 91.105(d); 91.115(d) Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports. 460 CAPER 36 OMB Control No: 2506-0117 (exp. 09/30/2021) Pursuant to 24 CFR Part 91, the City solicited public review and comment on the draft 2020/21 Consolidated Annual Performance and Evaluation Report (CAPER). The public review period was from September 2, 2021 through September 21, 2021 The 2020/21 CAPER was available in hard copy at Huntington Beach City Hall and for public review on the City’s website at: http://www.huntingtonbeachca.gov/business/economic-development/cdbg/. Copies were also available to be emailed or delivered via U.S. mail to interested persons. A public hearing to approve the plan was held on September 21, 2021. 461 CAPER 37 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-45 - CDBG 91.520(c) Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences. Between the dates of July 1, 2020 and June 30, 2021, Huntington Beach processed two amendments to their FY 2020/21 Annual Action Plan. First, on October 22, 2020, Huntington Beach received notification that a discrepancy was made by HUD on both the 2020 CDBG and HOME entitlement amounts, which subsequently prompted a minor amendment to the 2020/21 – 2024/25 Consolidated Plan and the FY 2020/21 Annual Action Plan. Expected Resources were updated with the new entitlement amounts, as were both CDBG and HOME Program Administration. Then, on January 19, 2021, the Huntington Beach City Council approved a substantial amendment to the FY 2020/21 which included the following changes necessary to bolster the City’s ability to prevent, prepare for, and respond to the Novel Coronavirus: • Cancelled the 2020/21 Central Library Lower-Level Restroom ADA Improvement Project which was originally allocated $286,000 in CDBG funds. Funds were diverted to the Cameron Lane Navigation Center Operations Program, an activity previously approved in the FY 2019/20 Annual Action Plan. • Allocated $80,576.05 in unallocated CDBG funds to the Cameron Lane Navigation Center Operations Program. • Allocated $200,000 in estimated program income to the Cameron Lane Navigation Center Operations Program. These funds would only be allocated if/when received. The proposed Amendment also served to identify specific HOME-funded Tenant Based Rental Assistance program parameters not originally specified in the 2020/21 AAP. The adopted FY 2020/21 Annual Action Plan allocated $900,000 towards Tenant Based Rental Assistance Program(s); however, the Amendment expressly identified the following subrecipients who administered the program on behalf of the City of Huntington Beach: • Families Forward was awarded $261,000 in HOME funds. • Interval House was awarded $128,500 in HOME funds. • Mercy House was awarded $252,900 in HOME funds. 462 CAPER 38 OMB Control No: 2506-0117 (exp. 09/30/2021) All three service providers worked with the City's Homeless Task Force and Police Department to identify and target at-risk families and individuals with demonstrable ties to the City of Huntington Beach. TBRA funds were also available to households impacted by COVID-19, an integral component of the City’s ability to respond to its effect on Huntington Beach’s residents. Finally, the FY 2020/21 AAP Substantial Amendment allocated $2,830,698 in HOME funds to the Huntington Beach Senior Housing Project located at 18431 Beach Boulevard. Another Substantial Amendment was taken to the City Council on January 19, 2021. The City’s 2nd CARES Act Amendment (4th amendment overall) to the FY 2019/20 AAP programmed the 3rd round of CDBG-CV funds that was awarded to the City of Huntington Beach to the following activities to prepare, prevent, and respond to the COVID-19 pandemic: • Allocation of $1,301,028 to the Cameron Lane Navigation Center Operations Program located at 17631 Cameron Lane, Huntington Beach. This allocation was in addition to the $1.5 million allocated in June 2020 and is currently being used to cover costs associated with the operations of an emergency homeless facility. Costs such as staffing, utilities, maintenance, and wrap around homeless services are necessary to help the City prevent, prepare for, and respond to the continued threat of the Coronavirus to the City’s vulnerable homeless population. • Allocation of $130,928 to CDBG-CV Administration which is currently being used to help offset staff and program costs associated with carrying out activities that aim to prevent, prepare for, and respond to the Coronavirus. Does this Jurisdiction have any open Brownfields Economic Development Initiative (BE DI) grants? Not applicable. [BEDI grantees] Describe accomplishments and program outcomes during the last year. Not applicable. 463 CAPER 39 OMB Control No: 2506-0117 (exp. 09/30/2021) CR-50 - HOME 91.520(d) Include the results of on-site inspections of affordable rental housing assisted under the program to determine compliance with housing codes and other applicable regulations Please list those projects that should have been inspected on-site this program year based upon the schedule in §92.504(d). Indicate which of these were inspected and a summary of issues that were detected during the inspection. For those that were not inspected, please indicate the reason and how you will remedy the situation. The City of Huntington Beach contracts with a consultant to performed monitoring of the City’s 15 HOME-assisted projects (52 units in total) in FY 2019/20. The 15 projects received a desk monitoring on income, rent levels, and occupancy limits; however, onsite inspections could not take place as planned due to the Safer at Home ordinance. All projects as of FY 2019/20 are in compliance with rent, income, and occupancy limits. Onsite inspections will be rescheduled for FY 2021/22 if permitted. Provide an assessment of the jurisdiction's affirmative marketing actions for HOME units. 92.351(b) For new construction and rehabilitation of rental project activities, the City requires the owner/developer to have in place an Affirmative Fair Housing Marketing Plan prior to any lease-up activities occurring. The City will conduct a review of Affirmative Marketing Plans of all affordable rental housing developments when monitoring resumes. Refer to IDIS reports to describe the amount and use of program income for projects, including the number of projects and owner and tenant characteristics Huntington Beach receipted $82,736.39 in HOME program income in FY 2020/21, all of which is attributed to homeowner rehabilitation loan payoffs. Between July 1, 2020 and June 30, 2021, the City drew down $1,255,058.32 for tenant based rental assistance programs (IDIS Activity #634, 635, 636, 652, 653, and 654) which provide rental assistance to homeless, senior, and veteran households. Consistent with HUD regulations, the City drew down program income before requesting funds from the HOME letter of credit. Describe other actions taken to foster and maintain affordable housing. The City allocated $2.8 million in HOME funds for the development of a 43 -unit senior affordable housing project at 18431 Beach Boulevard in the FY 2020/21 Annual Action Plan. The Huntington Beach Senior Housing Project will be developed in partnership with Jamboree Housing Corporation. With an investment of $2.8 million, the City estimated that 17 units 464 CAPER 40 OMB Control No: 2506-0117 (exp. 09/30/2021) would be HOME-restricted to eligible Huntington Beach seniors. During the year, the City certified Jamboree as a Community Housing Development Organization (CHDO) as required by HOME regulations, completed an Environmental Assessment for the project, and worked with the development team to draft an Affordable Housing Agreement. The project is expected to commence in FY 2021/22. The City also worked with Families Forward, Mercy House, and Interval House to offer three distinct tenant-based rental assistance programs to Huntington Beach residents, as discussed throughout this report. In addition to rapid rehousing for homeless persons, the programs were also used to prevent homelessness for many residents experiencing a sudden loss of income because of the impact COVID-19 had on their households. 465 APPENDIX 1 2020 CDBG FINANCIAL SUMMARY REPORT (IDIS PR26 REPORT) 466 PR26 - CDBG Financial Summary Report U.S. Department of Housing and Urban Development Office of Community Planning and Development Integrated Disbursement and Information System DATE: TIME: PAGE:1 13:00 09-01-21 Program Year 2020 HUNTINGTON BEACH , CA Metrics Grantee Program Year PART I: SUMMARY OF CDBG RESOURCES 01 UNEXPENDED CDBG FUNDS AT END OF PREVIOUS PROGRAM YEAR 02 ENTITLEMENT GRANT 03 SURPLUS URBAN RENEWAL 04 SECTION 108 GUARANTEED LOAN FUNDS 05 CURRENT YEAR PROGRAM INCOME 05a CURRENT YEAR SECTION 108 PROGRAM INCOME (FOR SI TYPE) 06 FUNDS RETURNED TO THE LINE-OF-CREDIT 06a FUNDS RETURNED TO THE LOCAL CDBG ACCOUNT 07 ADJUSTMENT TO COMPUTE TOTAL AVAILABLE 08 TOTAL AVAILABLE (SUM, LINES 01-07) PART II: SUMMARY OF CDBG EXPENDITURES 09 DISBURSEMENTS OTHER THAN SECTION 108 REPAYMENTS AND PLANNING/ADMINISTRATION 10 ADJUSTMENT TO COMPUTE TOTAL AMOUNT SUBJECT TO LOW/MOD BENEFIT 11 AMOUNT SUBJECT TO LOW/MOD BENEFIT (LINE 09 + LINE 10) 12 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION 13 DISBURSED IN IDIS FOR SECTION 108 REPAYMENTS 14 ADJUSTMENT TO COMPUTE TOTAL EXPENDITURES 15 TOTAL EXPENDITURES (SUM, LINES 11-14) 16 UNEXPENDED BALANCE (LINE 08 - LINE 15) PART III: LOWMOD BENEFIT THIS REPORTING PERIOD 17 EXPENDED FOR LOW/MOD HOUSING IN SPECIAL AREAS 18 EXPENDED FOR LOW/MOD MULTI-UNIT HOUSING 19 DISBURSED FOR OTHER LOW/MOD ACTIVITIES 20 ADJUSTMENT TO COMPUTE TOTAL LOW/MOD CREDIT 21 TOTAL LOW/MOD CREDIT (SUM, LINES 17-20) 22 PERCENT LOW/MOD CREDIT (LINE 21/LINE 11) LOW/MOD BENEFIT FOR MULTI-YEAR CERTIFICATIONS 23 PROGRAM YEARS(PY) COVERED IN CERTIFICATION 24 CUMULATIVE NET EXPENDITURES SUBJECT TO LOW/MOD BENEFIT CALCULATION 25 CUMULATIVE EXPENDITURES BENEFITING LOW/MOD PERSONS 26 PERCENT BENEFIT TO LOW/MOD PERSONS (LINE 25/LINE 24) PART IV: PUBLIC SERVICE (PS) CAP CALCULATIONS 27 DISBURSED IN IDIS FOR PUBLIC SERVICES 28 PS UNLIQUIDATED OBLIGATIONS AT END OF CURRENT PROGRAM YEAR 29 PS UNLIQUIDATED OBLIGATIONS AT END OF PREVIOUS PROGRAM YEAR 30 ADJUSTMENT TO COMPUTE TOTAL PS OBLIGATIONS 31 TOTAL PS OBLIGATIONS (LINE 27 + LINE 28 - LINE 29 + LINE 30) 32 ENTITLEMENT GRANT 33 PRIOR YEAR PROGRAM INCOME 34 ADJUSTMENT TO COMPUTE TOTAL SUBJECT TO PS CAP 35 TOTAL SUBJECT TO PS CAP (SUM, LINES 32-34) 36 PERCENT FUNDS OBLIGATED FOR PS ACTIVITIES (LINE 31/LINE 35) PART V: PLANNING AND ADMINISTRATION (PA) CAP 37 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION 38 PA UNLIQUIDATED OBLIGATIONS AT END OF CURRENT PROGRAM YEAR 39 PA UNLIQUIDATED OBLIGATIONS AT END OF PREVIOUS PROGRAM YEAR 40 ADJUSTMENT TO COMPUTE TOTAL PA OBLIGATIONS 41 TOTAL PA OBLIGATIONS (LINE 37 + LINE 38 - LINE 39 +LINE 40) 42 ENTITLEMENT GRANT 43 CURRENT YEAR PROGRAM INCOME 44 ADJUSTMENT TO COMPUTE TOTAL SUBJECT TO PA CAP 45 TOTAL SUBJECT TO PA CAP (SUM, LINES 42-44) 46 PERCENT FUNDS OBLIGATED FOR PA ACTIVITIES (LINE 41/LINE 45) HUNTINGTON BEACH , CA 2,020.00 677,173.51 1,237,035.00 0.00 0.00 1,100,205.23 0.00 0.00 0.00 (147,995.88) 2,866,417.86 2,121,749.79 0.00 2,121,749.79 227,956.71 0.00 0.00 2,349,706.50 516,711.36 0.00 0.00 2,121,749.79 0.00 2,121,749.79 100.00% PY: 2020 PY: PY: 0.00 0.00 0.00% 1,255,861.28 23,812.30 506,025.55 0.00 773,648.03 1,237,035.00 176,334.60 0.00 1,413,369.60 54.74% 227,956.71 59,450.29 0.00 0.00 287,407.00 1,237,035.00 1,100,205.23 0.00 2,337,240.23 12.30% 467 PR26 - CDBG Financial Summary Report U.S. Department of Housing and Urban Development Office of Community Planning and Development Integrated Disbursement and Information System DATE: TIME: PAGE:2 13:00 09-01-21 Program Year 2020 HUNTINGTON BEACH , CA LINE 17 DETAIL: ACTIVITIES TO CONSIDER IN DETERMINING THE AMOUNT TO ENTER ON LINE 17 Report returned no data. LINE 18 DETAIL: ACTIVITIES TO CONSIDER IN DETERMINING THE AMOUNT TO ENTER ON LINE 18 Report returned no data. LINE 19 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 19 Plan Year IDIS Project IDIS Activity Voucher Number Activity Name Matrix Code National Objective Drawn Amount 2020 2020 2019 2019 2020 2020 2020 2020 2020 2020 2020 2020 2020 2017 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 Total 14 14 21 21 7 7 7 7 8 8 9 9 9 9 10 10 10 10 12 12 11 11 1 1 1 3 3 3 3 4 4 4 4 4 670 670 668 668 659 659 659 659 660 660 661 661 661 619 662 662 662 662 664 664 663 663 655 655 655 657 657 657 657 658 658 658 658 658 6485094 6535618 6470788 6535618 6470788 6485094 6489343 6535618 6470788 6535618 6470788 6489343 6535618 6427492 6470788 6485094 6489343 6535618 6489343 6535618 6470788 6485094 6461046 6489343 6535618 6470788 6485094 6489343 6535618 6461046 6470788 6485094 6489343 6535618 ADA Curb Cuts in Maintenance Zone 3 ADA Curb Cuts in Maintenance Zone 3 Cameron Lane Navigation Center Operations Program Cameron Lane Navigation Center Operations Program Homeless Outreach Program Homeless Outreach Program Homeless Outreach Program Homeless Outreach Program Stand Up for Kids Street Outreach Program Stand Up for Kids Street Outreach Program Robyne's Nest Housing for Homeless High Schoolers Robyne's Nest Housing for Homeless High Schoolers Robyne's Nest Housing for Homeless High Schoolers RLF Youth Shelter Roof, Structural and ADA Improvements Senior Services Care Management Senior Services Care Management Senior Services Care Management Senior Services Care Management Children's Bureau Children's Bureau Oakview Family Literacy Program Oakview Family Literacy Program Owner-Occupied SF, Condo, and Mobile Home Grant Program Owner-Occupied SF, Condo, and Mobile Home Grant Program Owner-Occupied SF, Condo, and Mobile Home Grant Program Housing Rehab Program Administration Housing Rehab Program Administration Housing Rehab Program Administration Housing Rehab Program Administration Special Code Enforcement Special Code Enforcement Special Code Enforcement Special Code Enforcement Special Code Enforcement 03L 03L 03L 03T 03T 03T 03T 03T 03T 03T 03T 03T 03T 03T 03T 03Z 03Z 05A 05A 05A 05A 05A 05L 05L 05L 05Z 05Z 05Z 14A 14A 14A 14A 14H 14H 14H 14H 14H 15 15 15 15 15 15 LMC LMC Matrix Code 03L LMC LMC LMC LMC LMC LMC LMC LMC LMC LMC LMC Matrix Code 03T LMC Matrix Code 03Z LMC LMC LMC LMC Matrix Code 05A LMC LMC Matrix Code 05L LMC LMC Matrix Code 05Z LMH LMH LMH Matrix Code 14A LMH LMH LMH LMH Matrix Code 14H LMA LMA LMA LMA LMA Matrix Code 15 $190,250.80 $203,481.20 $393,732.00 $246,655.00 $769,627.75 $58,339.02 $4,985.21 $4,628.80 $12,626.31 $5,981.89 $9,017.30 $5,000.00 $2,500.00 $2,500.00 $1,121,861.28 $173,761.66 $173,761.66 $24,459.48 $3,282.04 $3,495.60 $12,762.88 $44,000.00 $36,578.99 $43,421.01 $80,000.00 $9,839.23 $160.77 $10,000.00 $40,000.00 $19,956.00 $20,000.00 $79,956.00 $8,237.66 $9.00 $5,014.00 $4,359.19 $17,619.85 $64,782.13 $37,676.01 $13,560.03 $13,127.25 $71,673.58 $200,819.00 $2,121,749.79 LINE 27 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 27 Plan Year IDIS Project IDIS Activity Voucher Number Activity to prevent, prepare for, and respond to Coronavirus Activity Name Grant Number Fund Type Matrix Code National Objective Drawn Amount 2019 2019 2019 2019 2019 2020 2020 2020 21 21 21 21 21 7 7 7 668 668 668 668 668 659 659 659 6470788 6535618 6535618 6535618 6535618 6470788 6485094 6489343 Yes Yes Yes Yes Yes No No No Cameron Lane Navigation Center Operations Program Cameron Lane Navigation Center Operations Program Cameron Lane Navigation Center Operations Program Cameron Lane Navigation Center Operations Program Cameron Lane Navigation Center Operations Program Homeless Outreach Program Homeless Outreach Program Homeless Outreach Program B20MC060506 B18MC060506 B19MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 PI EN EN EN PI EN EN PI 03T 03T 03T 03T 03T 03T 03T 03T LMC LMC LMC LMC LMC LMC LMC LMC $246,655.00 $65,149.18 $40,000.00 $510,257.20 $154,221.37 $58,339.02 $4,985.21 $4,628.80 468 PR26 - CDBG Financial Summary Report U.S. Department of Housing and Urban Development Office of Community Planning and Development Integrated Disbursement and Information System DATE: TIME: PAGE:3 13:00 09-01-21 Program Year 2020 HUNTINGTON BEACH , CA Plan Year IDIS Project IDIS Activity Voucher Number Activity to prevent, prepare for, and respond to Coronavirus Activity Name Grant Number Fund Type Matrix Code National Objective Drawn Amount 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 Total 7 8 8 9 9 9 10 10 10 10 12 12 11 11 659 660 660 661 661 661 662 662 662 662 664 664 663 663 6535618 6470788 6535618 6470788 6489343 6535618 6470788 6485094 6489343 6535618 6489343 6535618 6470788 6485094 No No No No No No No No No No No No No No No Yes Homeless Outreach Program Stand Up for Kids Street Outreach Program Stand Up for Kids Street Outreach Program Robyne's Nest Housing for Homeless High Schoolers Robyne's Nest Housing for Homeless High Schoolers Robyne's Nest Housing for Homeless High Schoolers Senior Services Care Management Senior Services Care Management Senior Services Care Management Senior Services Care Management Children's Bureau Children's Bureau Oakview Family Literacy Program Oakview Family Literacy Program Activity to prevent, prepare for, and respond to Coronavirus Activity to prevent, prepare for, and respond to Coronavirus B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 B20MC060506 PI EN PI EN PI PI EN EN PI EN PI PI EN EN 03T 03T 03T 03T 03T 03T 03T 05A 05A 05A 05A 05A 05L 05L 05L 05Z 05Z 05Z LMC LMC LMC LMC LMC LMC Matrix Code 03T LMC LMC LMC LMC Matrix Code 05A LMC LMC Matrix Code 05L LMC LMC Matrix Code 05Z $12,626.31 $5,981.89 $9,017.30 $5,000.00 $2,500.00 $2,500.00 $1,121,861.28 $24,459.48 $3,282.04 $3,495.60 $12,762.88 $44,000.00 $36,578.99 $43,421.01 $80,000.00 $9,839.23 $160.77 $10,000.00 $239,578.53 $1,016,282.75 $1,255,861.28 LINE 37 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 37 Plan Year IDIS Project IDIS Activity Voucher Number Activity Name Matrix Code National Objective Drawn Amount 2020 2020 2020 2020 2020 2020 2020 Total 16 16 16 17 17 17 17 666 666 666 667 667 667 667 6470788 6489343 6535618 6470788 6485094 6489343 6535618 CDBG Program Administration CDBG Program Administration CDBG Program Administration Fair Housing Foundation Fair Housing Foundation Fair Housing Foundation Fair Housing Foundation 21A 21A 21A 21A 21D 21D 21D 21D 21D Matrix Code 21A Matrix Code 21D $121,188.02 $8,465.64 $68,303.05 $197,956.71 $14,761.04 $2,587.59 $2,641.63 $10,009.74 $30,000.00 $227,956.71 469 APPENDIX 2 2020 CDBG ACTIVITY SUMMARY BY SELECTED GRANT REPORT 470 PR26 - Activity Summary by Selected Grant Date Generated: 09/01/2021 Grantee: HUNTINGTON BEACH Grant Year: 2020 Formula and Competitive Grants only State Grantee Amount DrawnGrantGrantActivityMatrixNationalIDISActivityAmount Funded Total Grant Amount for 2020 Grant year = $1,237,035.00 % of CDBG Drawn Total CDBG Funded Total CDBG Drawn Name From Selected GrantNumberYearGroupCodeObjectiveActivityStatus From Selected Grant From Selected Amount Amount Grant/Grant Amount (All Years All Sources)(All Years All Sources) Activity to prevent, prepare for, and respond to Coronavirus CA HUNTINGTON BEACH 2020 B20MC060506 Administrative And Planning 21A 666 Open $217,407.00 $129,653.66 $129,653.66$257,407.00No CA HUNTINGTON BEACH 2020 B20MC060506 Administrative And Planning 21D 667 Open $27,358.37 $17,348.63 $19,990.26$30,000.00No Total Administrative And Planning 11.88%$244,765.37 $147,002.29 $287,407.00 $149,643.92 CA HUNTINGTON BEACH 2020 B20MC060506 Housing 14H LMH 657 Open $59,986.00 $8,246.66 $13,260.66$65,000.00No Total Housing 0.67%$59,986.00 $8,246.66 $65,000.00 $13,260.66 CA HUNTINGTON BEACH 2020 B20MC060506 Public Improvements 03L LMC 670 Open $146,558.50 $0.00 $223,000.00$393,732.00No Total Public Improvements 0.00%$146,558.50 $0.00 $393,732.00 $223,000.00 CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 03T LMC 659 Open $67,744.89 $63,324.23 $80,579.34$85,000.00No CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 03T LMC 660 Open $5,982.70 $5,981.89 $14,999.19$15,000.00No CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 03T LMC 661 Open $5,000.00 $5,000.00 $10,000.00$10,000.00No CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 03T LMC 668 Open $534,069.50 $0.00 $400,876.37$1,040,095.05Yes CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 05A LMC 662 Open $40,504.40 $27,741.52 $31,237.12$44,000.00No CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 05L LMC 664 Open $0.00 $0.00 $80,000.00$80,000.00No CA HUNTINGTON BEACH 2020 B20MC060506 Public Services 05Z LMC 663 Open $10,000.00 $10,000.00 $10,000.00$10,000.00No Total Public Services 9.06%$663,301.49 $112,047.64 $1,284,095.05 $627,692.02 CARES Related Public Services 0.00%$534,069.50 $0.00 $1,040,095.05 $400,876.37 Non CARES Related Public Services 9.06%$129,231.99 $112,047.64 $244,000.00 $226,815.65 Total 2020 21.61%$1,114,611.36 $267,296.59 $1,013,596.60$2,030,234.05 21.61%Grand Total $1,114,611.36 $267,296.59 $1,013,596.60$2,030,234.05 471 APPENDIX 3 2020 CDBG-CV FINANCIAL SUMMARY REPORT 472 PR26 - CDBG-CV Financial Summary Report U.S. Department of Housing and Urban Development Office of Community Planning and Development Integrated Disbursement and Information System DATE: TIME: PAGE:1 13:13 09-13-21 HUNTINGTON BEACH , CA Metrics New Grantee (CV) PART I: SUMMARY OF CDBG-CV RESOURCES 01 CDBG-CV GRANT 02 FUNDS RETURNED TO THE LINE-OF-CREDIT 03 FUNDS RETURNED TO THE LOCAL CDBG ACCOUNT 04 TOTAL AVAILABLE (SUM, LINES 01-03) PART II: SUMMARY OF CDBG-CV EXPENDITURES 05 DISBURSEMENTS OTHER THAN SECTION 108 REPAYMENTS AND PLANNING/ADMINISTRATION 06 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION 07 DISBURSED IN IDIS FOR SECTION 108 REPAYMENTS 08 TOTAL EXPENDITURES (SUM, LINES 05 - 07) 09 UNEXPENDED BALANCE (LINE 04 - LINE8 ) PART III: LOWMOD BENEFIT FOR THE CDBG-CV GRANT 10 EXPENDED FOR LOW/MOD HOUSING IN SPECIAL AREAS 11 EXPENDED FOR LOW/MOD MULTI-UNIT HOUSING 12 DISBURSED FOR OTHER LOW/MOD ACTIVITIES 13 TOTAL LOW/MOD CREDIT (SUM, LINES 10 - 12) 14 AMOUNT SUBJECT TO LOW/MOD BENEFIT (LINE 05) 15 PERCENT LOW/MOD CREDIT (LINE 13/LINE 14) PART IV: PUBLIC SERVICE (PS) CALCULATIONS 16 DISBURSED IN IDIS FOR PUBLIC SERVICES 17 CDBG-CV GRANT 18 PERCENT OF FUNDS DISBURSED FOR PS ACTIVITIES (LINE 16/LINE 17) PART V: PLANNING AND ADMINISTRATION (PA) CAP 19 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION 20 CDBG-CV GRANT 21 PERCENT OF FUNDS DISBURSED FOR PA ACTIVITIES (LINE 19/LINE 20) HUNTINGTON BEACH , CA 2,159,775.00 0.00 0.00 2,159,775.00 150,186.37 130,928.00 0.00 281,114.37 1,878,660.63 0.00 0.00 150,186.37 150,186.37 150,186.37 100.00% 150,186.37 2,159,775.00 6.95% 130,928.00 2,159,775.00 6.06% 473 PR26 - CDBG-CV Financial Summary Report U.S. Department of Housing and Urban Development Office of Community Planning and Development Integrated Disbursement and Information System DATE: TIME: PAGE:2 13:13 09-13-21 HUNTINGTON BEACH , CA LINE 10 DETAIL: ACTIVITIES TO CONSIDER IN DETERMINING THE AMOUNT TO ENTER ON LINE 10 Report returned no data. LINE 11 DETAIL: ACTIVITIES TO CONSIDER IN DETERMINING THE AMOUNT TO ENTER ON LINE 11 Report returned no data. LINE 12 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 12 Plan Year IDIS Project IDIS Activity Voucher Number Activity Name Matrix Code National Objective Drawn Amount 2019 Total 21 671 6540475 CV-Cameron Lane Navigation Center 03T LMC $150,186.37 $150,186.37 LINE 16 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 16 Plan Year IDIS Project IDIS Activity Voucher Number Activity Name Matrix Code National Objective Drawn Amount 2019 Total 21 671 6540475 CV-Cameron Lane Navigation Center 03T LMC $150,186.37 $150,186.37 LINE 19 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 19 Plan Year IDIS Project IDIS Activity Voucher Number Activity Name Matrix Code National Objective Drawn Amount 2019 Total 22 669 6460659 6470790 6489344 6535621 CDBG-CV Program Administration CDBG-CV Program Administration CDBG-CV Program Administration CDBG-CV Program Administration 21H 21H 21H 21H $36,271.12 $46,393.32 $19,089.82 $29,173.74 $130,928.00 474 APPENDIX 4 PROOF OF PUBLICATION 475 476 City of Huntington BeachCity of Huntington BeachCity of Huntington BeachCity of Huntington Beach Notice of Public Hearing and Public Comment PeriodNotice of Public Hearing and Public Comment PeriodNotice of Public Hearing and Public Comment PeriodNotice of Public Hearing and Public Comment Period Consolidated Annual Performance & Evaluation Report for FY 2020/21Consolidated Annual Performance & Evaluation Report for FY 2020/21Consolidated Annual Performance & Evaluation Report for FY 2020/21Consolidated Annual Performance & Evaluation Report for FY 2020/21 NOTICE IS HEREBY GIVEN NOTICE IS HEREBY GIVEN NOTICE IS HEREBY GIVEN NOTICE IS HEREBY GIVEN that the City Council will hold its regularly sched- uled City Council Meeting on Tuesday, September 21, 2021, at 6:00 p.m. at the Huntington Beach City Council Chambers located at 2000 Main Street, Huntington Beach, CA 92648, or virtually via Zoom Webinar, after which the Council will adopt the Consolidated Annual Performance and Evaluation Plan (CAPER) for Fiscal Year 2020/21. The purpose of the CA- PER is to highlight the City’s achievements during the implementation year of the HUD- funded: ïïïïïïïïCommunity Development Block Grant (CDBG) Program ïïïïïïïïHOME Investment Partnership Act (HOME) Program ïïïïïïïïSpecial allocation of Community Development Block Grant received from the Coro- navirus Aid, Relief, and Economic Security Act (CARES) Act (CDBG-CV) Program Additionally, the CAPER reports the progress the City made in carrying out its strategic plan (Consolidated Plan) and its action plan (Annual Action Plan). On March 4, 2020, Governor Newsom proclaimed a State of Emergency in California as a re- sult of the threat of COVID-19. On March 17, 2020, Governor Newsom issued Executive Or- der N-29-20 which allows a local legislative body to hold public meetings via teleconferencing and to make public meetings accessible telephonically or otherwise elec- tronically to all members of the public seeking to observe and to address the local legisla- tive body. IN-PERSON PUBLIC PARTICIPATION/ZOOM ACCESS: Members wishing to atIN-PERSON PUBLIC PARTICIPATION/ZOOM ACCESS: Members wishing to atIN-PERSON PUBLIC PARTICIPATION/ZOOM ACCESS: Members wishing to atIN-PERSON PUBLIC PARTICIPATION/ZOOM ACCESS: Members wishing to at---- tend the meeting in person are encouraged to wear a face covering.tend the meeting in person are encouraged to wear a face covering.tend the meeting in person are encouraged to wear a face covering.tend the meeting in person are encouraged to wear a face covering. Alternate ways to view City Council meetings live or on-demand remain: livestreamed on HBTV Channel 3 (replayed on Wednesday’s at 10:00 a.m., and Thursday’s at 6:00 p.m.); live and archived meetings for on-demand viewing accessed from https://huntingtonbeach.legist ar.com/calendar ; or, from any Roku, Fire TV or Apple device by downloading the Cable- cast Screenweave App and searching for the City of Huntington Beach channel. Copies of the Draft CAPER are available at the following locations and on the City’s website at https://www.huntingtonbeachca.gov/business/economic-development/cdbg/ : City of Huntington Beach Oak View Branch Library Community Development Dept. 17251 Oak Lane 2000 Main Street, 5th Floor Huntington Beach, CA 92648 Huntington Beach, CA 92648 The Draft CAPER can also be delivered via U.S. mail or email upon request by calling the City’s Community Development Department at (714) 375-5186. Written comments on the CA- PER will be accepted until 2:00 pm on Tuesday, September 21, 2021 and can be addressed or emailed to: CONSOLIDATED ANNUAL PERFORMANCE & EVALUATION REPORTCONSOLIDATED ANNUAL PERFORMANCE & EVALUATION REPORTCONSOLIDATED ANNUAL PERFORMANCE & EVALUATION REPORTCONSOLIDATED ANNUAL PERFORMANCE & EVALUATION REPORT Attn: Robert Ramirez, Economic Development Project Manager Community Development Department 2000 Main Street – Fifth Floor Huntington Beach, CA 92648 Robert.Ramirez@surfcity-hb.org In accordance with the Americans with Disabilities Act, services are available to members of our community who require special assistance to participate in public meetings. If you require special assistance, 48-hour prior notification will enable the City to make reasonable arrangements for an assisted listening device (ALD) for the hearing impaired, American Sign Language interpreters, a reader during the meeting and/or large print agendas. Please contact the City Clerk’s Office at (714) 536-5227 for more information, or request assistance from staff listed above. Published Huntington Beach Wave: September 2, 2021 11484040 477 City of Huntington Beach File #:21-677 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Sean Crumby, Director of Public Works Subject: Consider adopting Resolution No. 2021-55 supporting efforts to host surfing, skateboarding, BMX events for the LA 2028 Olympics Statement of Issue: Los Angeles will host the Summer Olympics from July 21 through August 6, 2028. The City of Huntington Beach has the opportunity to secure hosting sporting events for the LA 2028 Olympics. Financial Impact: Passing of this resolution has no financial impact. If successful in securing any Olympic events, potential funding and other details will be presented to Council at that time. Recommended Action: Adopt Resolution No. 2021-55, “A Resolution of the City Council of the City of Huntington Beach Supporting the City’s Efforts in Securing Future Sporting Events for the LA 2028 Olympics .” Alternative Action(s): Do not adopt Resolution No. 2021-55. Analysis: Surfing has remained a key component of Huntington’s Beach culture with over 100 years of history ingrained throughout the community. Huntington Beach is a proud guardian of surf history as home to the Surfing Walk of Fame, the Surfers’ Hall of Fame, The International Surfing Museum, and the U.S. Open of Surfing. Huntington Beach is known for its surfing and surf culture so much so, that it earned the nick name Surf City, USA. The City of Huntington Beach, with its event management expertise, existing infrastructure, natural resources, and vital partnerships with organizations such as Visit HB, have successfully hosted an array of large scale events including the U.S Open of Surfing, VISSLA International Surfing Association (ISA) World Junior Surfing Competition, NSSA National Surfing Championship, and the Ultimate Frisbee Beach World Championship. City of Huntington Beach Printed on 9/15/2021Page 1 of 2 powered by Legistar™478 File #:21-677 MEETING DATE:9/21/2021 Economic impacts provided by Visit HB indicate that in 2018, the U.S. Open for Surfing generated $55.3 million with an overall economic impact of $96.4 million to Huntington Beach. Visitor spending at the U.S. Open of Surfing also supported a total of 998 jobs and generated $3.3 million in significant tax revenues for the City. Environmental Status: Passing of this resolution does not have an environmental impact. If any project moves forward, the environmental impact will be assessed in conjunction with appropriate laws (CEQA). Strategic Plan Goal: Community Engagement Attachment(s): 1. Resolution No. 2021-55, “A Resolution of the City Council of the City of Huntington Beach Supporting Efforts to Host Surfing, Skateboarding, BMX Events for the LA 2028 Olympics” City of Huntington Beach Printed on 9/15/2021Page 2 of 2 powered by Legistar™479 Administrative Item #21-677 Agenda Date: September 21, 2021 Attachment #1 (Resolution No. 2021-55) will be published with Supplemental Communications scheduled for release on Friday, September 17, 2021 at approximately 3:00 PM or sooner upon receipt. 480 City of Huntington Beach File #:21-692 MEETING DATE:9/21/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: City Council to Consider Directing Staff to Draft an Amendment to the Short Term Rental Ordinance and an Extension of the De-Listing Deadline Statement of Issue: Shortly after adopting a Short Term Rental Ordinance, the City Council directed staff to hold off on causing the various rental platforms to de-list non-permitted short term rentals until October 1, 2021. The City Council created an Ad Hoc Short Term Rental Committee to meet with stakeholder groups and discuss concerns with the ordinance. This item is to share the Ad Hoc Committee’s recommendations with the entire City Council and for the City Council to direct staff on how to proceed. Financial Impact: There are no direct fiscal impacts associated with this action. Recommended Action: A) Direct staff to enforce the ordinance as adopted and cause the various platforms to de-list unpermitted short term rentals by October 1, 2021; or B) Direct staff to bring forward an amended ordinance that creates a zone structure within the Coastal Overlay District that will limit the number of short term rentals that can be operated within each zone, and hold off on causing the various rental platforms to de-list until the City Council considers an amended ordinance. Alternative Action(s): Do not direct staff to move forward with either Recommended Action A or B and provide alternative direction. Analysis: After many years of discussion, the City Council conducted two study sessions, on September 3, 2019 and September 21, 2020 and ultimately directed staff to draft a highly restrictive short term rental ordinance that allows only for hosted short term rentals (with an exception for property owners City of Huntington Beach Printed on 9/15/2021Page 1 of 3 powered by Legistar™481 File #:21-692 MEETING DATE:9/21/2021 within Sunset Beach that were provided a 6 month timeframe to request permits for non-hosted short term rentals). The ordinance was adopted on January 19, 2021 and became effective on February 19, 2021. The City Council expressed interest in a careful rollout and requested that staff return to the City Council in one year to provide an overview of enforcement efforts, particularly related to the un-hosted short term rentals in Sunset Beach. Depending on the data, the City Council expressed possible interest in opening the ordinance to un-hosted short term rentals. Shortly after the adoption of the ordinance, when the hosting platforms were about to de-list the unpermitted short term rentals, property owners that were about to be de-listed contacted City Council with concerns. The City Council directed staff to hold off on causing the platforms to de-list until October 1, 2021 and created an Ad Hoc Committee consisting of Mayor Carr, and Councilmen Kalmick and Peterson. The purpose of the Ad Hoc Committee was to solicit input from stakeholders and discuss whether changes were needed to the ordinance. The Ad Hoc Committee held a meeting on June 22, 2021 and allowed certain community members to attend and share their input on the ordinance. Many of the concerns raised about the ordinance had already been addressed by staff. It was clear that the major concern from some of the participants had to do with the ordinance’s restrictions on un-hosted short term rentals and their desire to expand un-hosted short term rentals beyond Sunset Beach. The Ad Hoc Committee held a couple of additional meetings with staff to discuss the input received and follow up with Newport Beach city officials. Based on these additional discussions, a majority of the Ad Hoc Committee would like to explore the idea of creating three zones within the Coastal Overlay District where un-hosted short term rentals would be allowed. Each zone would have a cap. Please see the attached map (Attachment 1) that shows potential zones based on discussion at the last Ad Hoc meeting. This map also shows the number of active short term rental advertisements as of July 19, 2021. This map is meant to provide a snapshot of activity and prospective zones for illustration purposes only. Prior to putting significant time and effort into thinking about this issue of zones , staff is seeking direction from the entire City Council. Does the City Council desire to direct staff to create a program of zones within the Coastal Overlay district to allow un-hosted short term rentals? If so, staff recommends that the Council direct staff to embark on this effort and continue to the postponement of de-listing non-permitted short term rentals until staff brings back and amended ordinance for consideration. Alternatively, the City Council can stick with the original plan and enforcement the short term rental ordinance as adopted and commence with the de-listing effective October 1, 2021. Environmental Status: The requested actions represent administrative activities of the City Council that would not result in direct or indirect physical changes in the environment. As such, the requested actions are not a project pursuant to CEQA Guidelines Section 15378(b)(5). Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): City of Huntington Beach Printed on 9/15/2021Page 2 of 3 powered by Legistar™482 File #:21-692 MEETING DATE:9/21/2021 1. Short Term Rental Location Density Map City of Huntington Beach Printed on 9/15/2021Page 3 of 3 powered by Legistar™483 Edison High School Golden West College Marina High Ocean View High Pegasus HopeView Mesa View SpringView LakeView CollegeView Ada E. Clegg/Helen Stacey Village View John R.Peterson MarineView Circle View GoldenView Samuel E.Talbert Agnes L.Smith John H.Eader IsojiroOka CardenConservatory S.A.Moffett BrethrenChristianHigh William T.Newland St. Bon-aventure Sts. 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Es t a t e Pearce Dr. Overland Dr.Meadow Cir.PlazaLn.PlazaLn.Westfield Ln.Chadwick Dr. BrightfieldCir. 71.Ln.Maywood68.69.BrighamLn.70. 72. DovertonDr.Rosecrest Dr. W anderlyLn.73.CharlottaDr. Dr.Haviland HarvestFoxglove Dr.Ln.Acorn Dr.74.75.Pembrook Ln.Wishfield Cir. Summ i tDr.76.77. 81.83.86. 87.88.89.90.88.84.86. 78.79. 85.82.80.Mystic Ln.Be a c h v i e w D r . F e atherDr.Scallop Ln.Cat t ai lCir.Silent BayCir.Sand Dune Ln.Azure L n .Me r i d i a n D r . SilentHarborDr. Blu e H e r o n D r . Ocean Point Dr.Ct.Timber Cir.IslandPearlSh e l t e r C o v e Cir .BarracudaLn.HideawayCir.Ln.Dr.SkipjackDr.Florida St.C h a nd onLn.76. Nestucca Ct.77. Depoe Ct.78. Toledo Ct.79. Coos Ct.TidalviewLn.Wellfleet Dr. Ashville Dr. Coveview Dr. Cir. OceanknollDr. Longpoi n t Dr. OrleansDr. Edgarto w nDr.Brightwater Dr. BrightwaterDr.Oc e anridge Dr. O c e a n rid g e D r.WentworthHillsideWinthrop Dr. Marlin St. Love St. Pike St. Trout St. Mu i r f i e l d Cir . La k e f r o n t Ci r . Scenic Bay Dr. 82. Oceanspray Ln. 83. Seahaven Dr.84. Fanshell Ln.85. Reedsport Ct. 86. Trestles Ct.87. Rincon Ct.88. Suntide Dr. 89. Brookings Ct. 90. Scripts Ct.CrystalaireLn.Ar c a d i a D r . Ai n s l e y D r . 68. Danville Dr. 69. Tremaine Dr.70. Newfield Cir.71. Heatherly Dr.72. Granville Dr.73. Ashwood Ln.74. Clovergreen Ln.75. Primrose Ln.Ln.AmaliaLn.Old Pirate Dr.Stewart Ln.Montere y Ln.3. Pescado Ln. 1. Olas Dr. Island- Evening-song Dr.Coolwater Ln.Stewart Ln.Kiner Dr.Wharton Ln.Kiner Dr.Hartlund Ln.Dr. Hillhead Dr .Seastar D r .ClearviewLn.Holt Dr. Aldrich Dr. Stark Dr. Glencoe Dr. Sterling Dr.Gleada Ln.grove Cir.Ocean-18th St.McKinneyCir. Meadow Crest Dr.Green Ln.Dr. Sycamore Dr. Dr.Palmdale Ln.Cain Dr. Cedar Dr. Alhambra Dr.A Ln.B Ln.Ash Ln.Ln.Ln.Liberty Dr. Dunbar Dr. Orion Dr.Sims Ln.Ernest Dr. Rockpoint Dr.Oce an p ortLn.Kipahulu Ln.Edison Dr.S. New BritainLn.17th St.Williams Dr. Owen Dr. Pearce Dr. McCarthy Dr.Elm Ln.Ronald Dr. Speer Dr.Cameron Ln.Van Buren Ln.A Ln.Lynn Ln.McKinley Ln.view Ci r . Dr. Dory Dr. Cove Dr.McLaren Ln.Milo Dr.Hoskins Ln.Lynn Ln.Sims Ln.Blanton Ln.Bonita Bluejay Cir. Kaui Dr.DoloresLn.GreenLn.Cir.Milo Dr. Skylab Rd. Stanley Ln.Ln.Dr. Cypress Dr. Dr.Sur f waveDr.NicholsLn.B Ln.MacDonald Dr. Dr. Kearny Dr.DesmondDr .Bristol Ln.TidalridgeLn.WarehamL n . Mir a g e Dr. Terranova Cir. Astronautics Ln.Delta Ln.Astronautics Ln.Chatham Ln.BrewsterLn.ChillmarkOakbluffsLn.FordhamLn.GreatpointCir.SagatuckLn.Ln.S u ffo lkLn.OstervilleLn.KennebunkLn.Seabur yRo y c e L n . Sandstone Cir. 92. Baeza Cir.91. Alanis Cir.91.92.93.94.95.96.99. 100. 101.97.98.102.103.104.105.106.107.Mo r a b i t o D r . Lorenzo Dr. 93. Ronda Cir.94. Elda Cir.95. Prado Cir.96. Lorca Cir.97. Balerma Ln.98. Alcazar Ln.99. Aldea Cir.100. Ubeda Cir. MarisaDr. Daisy Cir.Nea r g a te Dr.Barclay Ln.6th St. Dr.Abalone Ln.Jalm Dr.PhillipsParkQ u i e tSandra Lee Ln.BrookLn.C o v e Ci r .VillaLn.VistaBahiaDr.ViaVistaCir.Cir.De AnzaCir.Canada Ln.Calle Parque Dr.CalleCastorDelOro Cir.PocoCir.Cir.La Bonita Ln.St.SeaWayCir .St.Pacific Hunti n gt onVillageLn.Riverbend Dr.Quarter hor s eLn.AndaluciaLn.PacificPointe Dr. S e abourne Dr.SinclairLn.Le Grande Ln.LaPa c i f i c A v e .Surfside Ave.Preakness Dr.Barw o o d D r.Wavecrest Cir.Summerwind Ln.Ln.SnapperHolland Dr.Rushmoor Ln.Manorfield Dr. B e r s h i r e D r . Woodwind Dr.Pecan Ave.Dr.Rai n glenLn. Gardenia Sh a d y Gl e n C i r . Pr e s i d e n t e Dr . M a s t Dr . Oronsay Cir. Steeplechase Cir. Mauretania Cir. Indian Wells Cir. Mari- gayle Cir. Tortuga Dr.CaminoVineland Dr.FlintridgeLn.HigginsCir.WheelerCir.CottonwoodCir.PollardLn.Vista RomaValleyCir.BrookshireLn.WhitewaterVia EspanaLn.Arrowhead Dr.Ln. Cabana Dr. Cape C oralLn.C a p e H o p e Utica Ave. Springfield Ave.Easy Ln.Grebe Ln.101. Osuna Cir.102. Vera Cir.103. Armilla Cir.104. Estepa Cir.105. Cieza Cir.106. Veleta Cir.107. Twin DolphinDr. 44. Whitestone Dr.45. Attleboro Cir.46. Windchild Ln.47. Cape Horn Dr.48. Galley Dr.49. Gypsy Moth Ln.50. Crew Dr.51. Creedmoor Dr.52. Weathersfield Ln.53. Longmeadow Dr.54. Bushwick Dr.Abigail Ln.SavannahRebeccaKendall Dr.Sage Dr. Noelle Dr. Hibiscus Cir.EleanorLn.Ln.Ln.KennedyLn.HayleyKateAveryLn.Ln.Ln.Rancho Rd.Heil Ave.Heil Ave.ParkAve.26th St.N. P a c i f i c A v e . S. P a c i f i c A v e . B a y v i e w D r . ( S u n s e t )Broadway(Sunset)Anderson25th St.24th St.23rd St.22nd St.21st St.20th St.19th St.18th St.17th St.16th St.15th St.14th St.CanalWay 12th St.11th St.10th St.9th St.8th St.7th St.6th St.5th St.4th St.3rd St.2nd St.Grunion108.109.110. 111.112.113.114.115.108. Ridge Glen Dr. WildwoodCir. Dr. 109. Mission Glen Ct.110. Garden Glen Ct.111. Fountain Glen Dr.AngelfishLn.112. Harbor Glen Dr.113. Willow Glen Ct.114. Terrace Glen Ln.115. Village Glen Ln. PacificViewAve.Roxbury Ln.Lake St.Goldenwest St.Lake St.Paschalls Ln.Fortuna Ln.Thompson Dr.Lamb Ln.SnowdonLn.Hansen Ln.Patch Dr. Pioneer Dr. Sheridan Dr. Landers Dr.Slayback Ln.Wardlow Ln.Rustler Ct. Pac i f i c C i t y Cir. Moonstone Ct. Marina Viking Way 6. Brookwood Dr.7. Creek Ln.8. Park Forest Dr.9. Park Crest Ln.FivePoints Beachmont G o ld e n ro d C ir.Eucalypt usLn.BurrowsLn.Juniper Ln. Rivergate Dr.Cobblest oneLn. Shorebir d Dr.Napili Ln.Kohala Ln.Kailua Ln.Poipu Ln.Waimea Dr.Makaha Ln.Haiku Ln.Lahain a Dr. L ig h t b r e e z e C ir .ShorelineLn.RivieraDr.Windchime Dr.Windbourne Dr.Windfall Ln.116. Azul Ln. 117. Bluewave Ct. 118. Crystal Dr. 119. Lisamarie Ct. 120. Richard Ct. Kelter Dr.119. 120.Luna D r .Alexa Ln.Cole Ln.Berry Ct. Br e t C t . Rosemarie Dr.Eric Ct.Max Ct.M e ro n a Dr.Allegra Ln.Jord y n C t .117.116.118.Brynn Ct.125.124. 122.121.123.Holly Ln.Thistle Ct.Holly Ln.Azalea Ct.Seaspring Dr. Clay Ave. 121. Beachbreak Dr. 122. Whitewave Dr.123. Salthouse Ln. 124. Highwater Dr. 125. Tideline Ct. ClearharborDr.SafeharborLn.Nomad Cir. Rainbow Cir. LowtideCir.Flagship Cir.Sloop Cir.Bolsa Ave. Indianapolis Ave.Indianapolis Ave.BrookhurstSt.Bushard St.BrookhurstSt.Edinger Ave. T a lb e r t A ve. Garfield Ave.MagnoliaSt.Newland St.Beach Blvd.Palm Ave. Yorktown Ave.SeapointS t.Delaware St.Slater Ave.GrahamSt.McFadden Ave. Edinger Ave. Heil Ave. Warner Ave. Adams Ave.NewlandSt.BeachBlvd.Atlanta Ave.BeachBlvd.Gothard St.Lake St.Goldenwest St.Pa l m A v e .Springdale St.Springdale St.Graham St.Argosy Ave.Graham St.P a c i f i c C o a s t H w y .Edwards St.Warner Ave. Center Ave.MagnoliaSt.Lake St.Rancho Rd.Pa c i f i c C o a s t H w y .Newland St.Newland St.Edinger Ave. McFadden Ave.Bolsa Ave.SaybrookLn.Edinger Ave.BeachBlvd.McFadden Ave. Adams Ave. P a cific C o a st Hw y. P a cific C o a st H w y. Garfield Ave.EdwardsSt.Atlanta Ave.Main St.Delaware St.Or a n g e A v e .17th St.Talbert Ave.BushardSt.Adams Ave. Warner Ave. Heil Ave.Bolsa Chica St.Gothard St.GoldenwestSt.Slater Ave. Ellis Ave. Banning Ave.Algonquin St.Heil Ave.Main St.Pa c i f i c C o a s t H w y . Hamilton Ave. Banning Ave. Hamilton Ave. Yorktown Ave. Atlanta Ave. Indianapolis Ave.Ward St.Brookhurst St.Magnolia St.Bushard St.Garfield Ave. Ellis Ave. Slater Ave. Warner Ave. Heil Ave. Talbert Ave.Magnolia St.Edinger Ave.Gothard St.Bolsa Ave.Goldenwest St.Edwards St.Springdale St.BolsaChicaSt.Yorktown Ave. Bo l s a C h i c a W e t l a n d s HB UtilityOperationsYard HB CivicCenter HB VehicleMaintenanceYard HB LandscapeMaintenance Yard P A C I F I C O C E A N HB BeachMaintenanceYard HB Pier (C o u n t y o f O r a n g e ) R Surf City Huntington Beach N S EW 0 0.5 10.25 Miles 0 2000 4000 60001000 Feet CAUTIONWHEN USING THIS MAP Information shown hereon is a compilation of data from sources of varying accuracy and is provided as a convenience to the user. The City of Huntington Beach does not guarantee its completeness or accuracy. It is the user's responsibility to verify all information to their own satisfaction. Information Services Department HB GISSeptember 2021 P:\Planning\ShortTermRentals\STRAnalysis.mxd Short Term RentalLocation DensityCity of Huntington Beach LODGINGSREV IDENTIFIED STR LOCATIONS Coastal Zone Single Family Residential %Multi Family Residential % IN 74 63% 44 37% OUT 60 29% 147 71% CITYWIDE TOTAL 134 41% 191 59% Identified Short Term Rental Locations Coastal Zone City Boundary City Facility Park School Golf Course Harbor / Channel Coastal STR Zones Zone 1 Zone 2 Zone 3 Coastal Zone STR Locations Zone 1 40 Zone 2 43 Zone 3 35 Total 118 484 City of Huntington Beach File #:21-700 MEETING DATE:9/21/2021 Submitted by Councilmember Posey - Establish a “Design-Build-Finance-Operate- Maintain” (DBFOM) Subcommittee I recommend that the City Council authorize the establishment of a 3-member DBFOM City Council Ad-Hoc Subcommittee. City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™485 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: MIKE POSEY, CITY COUNCIL MEMBER DATE: SEPTEMBER 21, 2021 SUBJECT: ESTABLISH A DBFOM CITY COUNCIL SUBCOMMITTEE In March and June of this year, the City Council was presented with details related to utilization of a “Design-Build-Finance-Operate-Maintain” (DBFOM) public-private partnership model to address needed major facility capital improvements. Of note, Huntington Beach currently owns, operates, and maintains 1.75 million square feet of facility space, and among the buildings that we’ve identified as needing significant upgrades include the following:  Police Station  City Hall Civic Center  Lake Fire Station Based on preliminary information, our major facility rehabilitation costs could run north of $60 million. Through the DBFOM process, the City can develop a process to select a private developer, who would coordinate the development and long-term maintenance of new facilities. In addition, the City has been exploring the feasibility of incorporating private development opportunities into the overall DBFOM process, which could lower the City’s costs associated with implementing the needed building upgrades. Given the significance, importance, and scale of the overall DBFOM effort, I believe it would be prudent to establish an ad-hoc subcommittee made up of 3 members of the City Council to work with staff in developing and coordinating the overall assessment process, including vendor assessment and selection. RECOMMENDED ACTION I recommend that the City Council authorize the establishment of a 3-member DBFOM City Council Ad-Hoc Subcommittee. 486 City of Huntington Beach File #:21-701 MEETING DATE:9/21/2021 Submitted by Councilmember Kalmick - Conducting Neighborhood-Focused Town Halls I recommend that the City Council direct the City Manager to develop a neighborhood-focused town hall program for all geographic parts of Huntington Beach to be deployed later this year. City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™487 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: DAN KALMICK, CITY COUNCIL MEMBER DATE: SEPTEMBER 21, 2021 SUBJECT: CONDUCTING NEIGHBORHOOD-FOCUSED TOWN HALLS It is important that the City engage in meaningful community engagement efforts, to ensure that residents are informed about policy decisions being considered and made in Huntington Beach. Currently, the City has implemented community engagement efforts through traditional mechanisms and various new strategies during the past year. One such mechanism that has been deployed consistently in the City has been the use of focused neighborhood town hall discussions. To date, we provide discussion formats for the Southeast Area and Sunset Beach areas of town on a regular basis, but not for other locations in Huntington Beach. To address that particular issue, I am recommending that the City conduct either bi-annual or quarterly neighborhood-focused town hall discussions for all geographic locations in the City, in order to better connect with our residents, understand issues affecting specific neighborhoods, and communicate the latest information and news from the City. If approved, such an effort will allow the City to be more proactive in its community engagement efforts by meeting residents where they live. RECOMMENDED ACTION I recommend that the City Council direct the City Manager to develop a neighborhood-focused town hall program for all geographic parts of Huntington Beach to be deployed later this year. 488 City of Huntington Beach File #:21-703 MEETING DATE:9/21/2021 Submitted by Councilmember Moser - Development of an Arterial Beautification Pilot Project I recommend that the City Council vote to direct staff to develop an arterial beautification pilot program project in Huntington Beach. City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™489 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: NATALIE MOSER, CITY COUNCIL MEMBER DATE: SEPTEMBER 21, 2021 SUBJECT: DEVELOPMENT OF AN ARTERIAL BEAUTIFICATION PILOT PROJECT Huntington Beach is well known for its abundant natural amenities, which have helped shape a positive community reputation and experience. However, local residents also know parts of the community as a “land of asphalt and block walls,” given that our network of arterial streets were developed in the 1960s with a primary focus on utility, as opposed to neighborhood aesthetics. In an effort to enhance the beauty of Huntington Beach, and in coordination with the various mobility projects that are being con sidered throughout the City, I would advocate that the City Council direct staff to develop a pilot arterial beautification project that would focus on implementing enhanced community design aesthetics along an identified arterial corridor section. RECOMMENDED ACTION I recommend that the City Council vote to direct staff to develop an arterial beautification pilot program project in Huntington Beach. 490 City of Huntington Beach File #:21-704 MEETING DATE:9/21/2021 Submitted by Councilmember Moser - Direction to Assess Enhanced Navigation Center Services that can be deployed and which will connect to our Project Zero Initiative I recommend the City Council direct staff to engage an assessment of the current operations of the Navigation Center, and that staff return to the City Council with an update of improvements that can be made which link to our Project Zero efforts. City of Huntington Beach Printed on 9/15/2021Page 1 of 1 powered by Legistar™491 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: NATALIE MOSER, CITY COUNCIL MEMBER DATE: SEPTEMBER 21, 2021 SUBJECT: DIRECTION TO ASSESS ENHANCED NAVIGATION CENTER SERVICES THAT CAN BE DEPLOYED AND WHICH WILL CONNECT TO OUR PROJECT ZERO INITIATIVE The City began operating our Navigation Center in December 2020, and to date, this initial effort to provide sheltering services has been a success. Given that we have the facility run ning, Huntington Beach is now able to provide those most in need with shelter services. And importantly, with the Navigation Center operational, the City has the ability to enforce our quality of life regulations. These dual benefits have meant that the City can provide assistance to those most in need, while also being able to reclaim public spaces for everyone to use. However, as much as our initial efforts have helped to improve the overall homelessness situation in Huntington Beach, I have observed operational improvements for the Navigation Center that can and should be made. More than just being a place for those who are unhoused, the shelter should be a place where individuals can heal on their journey to finding more permanent housing solutions. In particular, I would like the City Council to support directing an assessment of the current operations at the Navigation Center, to identify ways we can improve in the following areas: 1. Provide more regular screenings for mental health and substance abuse treatment needs 2. Increase the availability of medical providers on site 3. Identify avenues through which Mercy House Housing Navigators can increase discussions with homeless clients regarding life skills / housing skills 4. Find ways to more frequently bring outside organizations to provide job training and linkages to vital benefits related to medical, food, and disability services If approved, these efforts would integrate with our ongoing Project Zero efforts, which seek to achieve our aspirational goal of ending homelessness in Huntington Beach. RECOMMENDED ACTION I recommend the City Council direct staff to engage an assessment of the current operations of the Navigation Center, and that staff return to the City Council with an update of improvements that can be made which link to our Project Zero efforts. 492