HomeMy WebLinkAbout2021-10-05 Agenda PacketAGENDA - Revised
City Council/Public Financing Authority
Tuesday, October 5, 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
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.
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, October 5, 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.
AGENDA October 5, 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 PERTAINING TO CLOSED
SESSION ITEMS (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)
21-7361.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
21-7312.CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section
54957.6.) Agency designated representatives: Oliver Chi, City
Page 1 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
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)
21-7323.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION.
(Paragraph (1) of subdivision (d) of Section 54956.9). Name of case:
Bob Guzman v. City of Huntington Beach, Worker’s Comp. Case Nos.
1) COHB-20-0333, (2) COHB-19-0169, (3) COHB-15-0294, and (4)
COHB-13-0053.
21-7334.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION.
(Paragraph (1) of subdivision (d) of Section 54956.9). Name of case:
Brian Schrieber v. City of Huntington Beach, Worker’s Comp. Case
No. COHB-20-0341.
21-7345.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION.
(Paragraph (1) of subdivision (d) of Section 54956.9). Name of case:
Larry Pitcher v. City of Huntington Beach, Worker’s Comp. Case No.
COHB-19-029.
21-7356.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION.
(Paragraph (1) of subdivision (d) of Section 54956.9). Name of case:
Robert Dalton v. City of Huntington Beach, Worker’s Comp. Case No.
COHB-18-0341.
21-754*New Potential Litigation - recent Oil Discharge from pipeline off the coast
of Huntington Beach
6:00 PM – COUNCIL CHAMBERS
RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING
ROLL CALL
Peterson, Bolton, Delgleize, Carr, Posey, Moser, Kalmick
PLEDGE OF ALLEGIANCE
Page 2 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
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.
21-5557.Mark Currie of Bahai’ of HB and member of the Greater Huntington
Beach Interfaith Council
CLOSED SESSION REPORT BY CITY ATTORNEY
AWARDS AND PRESENTATIONS
21-7268.Mayor Carr to call on Victoria Alberty to present the Adoptable Pet of
the Month
21-7379.Mayor Carr to call on HBFD Chief Scott Haberle to proclaim October
3-9 as Fire Prevention Week
21-72710.Mayor Carr to proclaim October as Breast Cancer Awareness Month
and present proclamation to Dr. Richard Reitherman, Medical
Director of Breast Imaging at MemorialCare Orange Coast Medical
Center, and Cindy Callaghan, Director of Imaging and Breast Center
Services
21-60311.Mayor Carr to present the Mayor’s HB Excellence Award for August
2021 to Patricia Albers, Senior Personnel Analyst
21-72212.Mayor Carr to honor the memory of longtime Library Page Holly
Freese with the Mayor’s HB Excellence Award for September 2021
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 their name or the last three digits of their phone number. All speakers are
Page 3 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
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
21-74813.Pacific Air Show Recap
CONSENT CALENDAR
21-71914.Approve and Adopt Minutes
Approve and adopt the City Council/Public Financing Authority regular meeting minutes
dated September 21, 2021 as written and on file in the office of the City Clerk .
Recommended Action:
21-74415.Request to receive and file revisions to the 2021 City Council Liaison
List - Citizen Boards, Commissions, Committees and Task Forces
Receive and file revisions to the 2021 Council Liaison List, including the appointment of
Councilmember Moser as Liaison to the Fourth of July Executive Board.
Recommended Action:
21-67516.Approve one or more appointments to the Human Relations Task
Force (HRTF) as recommended by City Council Liaisons Natalie
Moser and Rhonda Bolton
A) Approve the appointment of Jonathan Smith for his first term as a member of the
Human Relations Task Force through December 31, 2023, the end of term for the current
vacancy; and/or
B) Approve the appointment of Elaine Keeley for her initial term as a member of the
Human Relations Task Force through December 31, 2021, the end of term for the current
vacancy and approve an extension of her term through December 31, 2025; and/or
C) Approve the reappointment of Antonio Benitez as a member of the Human Relations
Task Force through December 31, 2025; and/or
D) Approve the reappointment of Hemesh Patel as a member of the Human Relations
Recommended Action:
Page 4 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
Task Force through December 31, 2025; and/or
E) Approve the reappointment of Chris Hoff as a member of the Human Relations Task
Force through December 31, 2025 .
21-72117.Adopt Resolution No. 2021-57 approving City Staff to Apply to the
State Department of Parks and Recreation for the Outdoor Equity
Grants Program Grant Funds
Adopt Resolution No. 2021-57, “A Resolution of the City Council of the City of Huntington
Beach Approving the Application for Outdoor Equity Grants Program Grant Funds .”
Recommended Action:
21-59418.Approve and authorize the execution of Cooperative Agreement
C-1-3598 with the Orange County Transportation Authority (OCTA),
the County of Orange and the Cities of Westminster, Santa Ana and
Tustin for a traffic signal synchronization project along Bolsa Avenue
Approve and authorize the Mayor and City Clerk to execute “Cooperative Agreement No.
C-1-3598 Between Orange County Transportation Authority and Cities of Huntington
Beach, Santa Ana, Tustin, Westminster and the County of Orange for First Street/Bolsa
Avenue Regional Traffic Signal Synchronization Program Project.”
Recommended Action:
21-73919.Approve and authorize execution of three-year Professional
Services Contracts for Workers’ Compensation managed care
services with Lien on Me, Inc., for Bill Review, and Arissa Cost
Strategies, LLC, for Utilization Review; and authorize a two-year
contract extension with Acclamation Insurance Management
Services (AIMS) to serve as the Third-Party Administrator of the
City’s Workers' Compensation Program
A) Approve and authorize the Mayor and City Clerk to execute, “Professional Services
Contract Between the City of Huntington Beach and Lien on Me, Inc., for Medical Bill
Review Services,” in an amount not to exceed $525,000.00 for the three-year period; and,
B) Approve and authorize the Mayor and City Clerk to execute, “Professional Services
Contract Between the City of Huntington Beach and Arissa Cost Strategies, LLC, for
Utilization Review Services of City’s Workers’ Compensation Claims,” in an amount not to
exceed $300,000.00 for the three-year period; and,
C) Approve and authorize the Mayor and City Clerk to execute, “Amendment No. 1 to
Recommended Action:
Page 5 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
Professional Services Contract Between the City of Huntington Beach and Acclamation
Insurance Management Services (AIMS) for Workers’ Compensation Third Party
Administration,” in an amount not to exceed $920,182.00 for the two-year period.
21-72020.Approve Zoning Text Amendment (ZTA) No. 19-004 by adopting
Ordinance No. 4235 amending Section 230.26 (Affordable Housing) of
the Zoning and Subdivision Ordinance - Vote: 6-1 (Peterson - No)
Adopt 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).
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.
21-71521.Public Hearing to consider adoption of Resolution No. 2021-56
approving an Annual Assessment within the Huntington Beach
Downtown Business Improvement District for Fiscal Year 2021-2022,
and authorize appropriation of fund
A)Conduct the Public Hearing; and,
B)If written protests of at least 50% are not received, adopt Resolution No. 2021-56, “A
Resolution of the City Council of the City of Huntington Beach Approving an Annual
Assessment within the Huntington Beach Downtown Business Improvement District for
Fiscal Year 2021-2022”; and,
C)Appropriate an additional $16,000 for a total of $106,000 into fund 710 for FY 2021-
2022.
Recommended Action:
ORDINANCES FOR INTRODUCTION
21-68222.Approve for introduction Ordinance No. 4237 amending Huntington
Page 6 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
Beach Municipal Code Chapter 10.12 relating to speed limits on
Atlanta Avenue between Huntington Street and Beach Boulevard
Approve for introduction Ordinance No. 4237, “An Ordinance of the City of Huntington
Beach Amending Chapter 10.12.080 of the Huntington Beach Municipal Code Relating to
Speed Limits.”
Recommended Action:
COUNCILMEMBER ITEMS
21-74523.Item Submitted by Councilmembers Carr and Moser - Request that
the City recognize October as National Bullying Prevention Month,
while reaffirming our City’s commitment against bullying
We recommend the City Council endorse an ongoing commitment to addressing bullying
in all its forms by recognizing October as National Bullying Prevention Month, and that we
reaffirm the City’s Commitment to its 2012 Proclamation of the City Council Against
Bullying.
Recommended Action:
21-74624.Item Submitted by Councilmembers Kalmick and Delgleize - Update
our Residential Street Paving Plan to enhance our Street
Maintenance Cycles
We recommend that the City Council direct the City Manager to begin working with Public
Works on updating the City’s existing street zone maintenance program, with an emphasis
placed on finding ways to reduce the number of years between street maintenance cycles
while maintaining a high PCI.
Recommended Action:
21-74725.Item Submitted by Councilmembers Moser and Kalmick -
Development of a plan to upgrade the City Fleet to Alternative Fuel
Vehicles
We recommend that the City Council direct the City Manager to prepare a plan to
transition the entire City fleet to alternative fuel vehicles.
Recommended Action:
COUNCILMEMBER COMMENTS (Not Agendized)
ADJOURNMENT
The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is
Tuesday, October 19, 2021, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street,
Huntington Beach, California.
Page 7 of 8
AGENDA October 5, 2021City Council/Public Financing
Authority
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
City of Huntington Beach
File #:21-736 MEETING DATE:10/5/2021
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)
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City of Huntington Beach
File #:21-731 MEETING DATE:10/5/2021
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)
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City of Huntington Beach
File #:21-732 MEETING DATE:10/5/2021
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision
(d) of Section 54956.9). Name of case: Bob Guzman v. City of Huntington Beach, Worker’s
Comp. Case Nos. 1) COHB-20-0333, (2) COHB-19-0169, (3) COHB-15-0294, and (4) COHB-13-
0053.
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City of Huntington Beach
File #:21-733 MEETING DATE:10/5/2021
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision
(d) of Section 54956.9). Name of case: Brian Schrieber v. City of Huntington Beach, Worker’s
Comp. Case No. COHB-20-0341.
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City of Huntington Beach
File #:21-734 MEETING DATE:10/5/2021
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision
(d) of Section 54956.9). Name of case: Larry Pitcher v. City of Huntington Beach, Worker’s
Comp. Case No. COHB-19-029.
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City of Huntington Beach
File #:21-735 MEETING DATE:10/5/2021
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision
(d) of Section 54956.9). Name of case: Robert Dalton v. City of Huntington Beach, Worker’s
Comp. Case No. COHB-18-0341.
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City of Huntington Beach
File #:21-555 MEETING DATE:10/5/2021
Mark Currie of Bahai’ of HB and member of the Greater Huntington Beach Interfaith Council
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City of Huntington Beach
File #:21-726 MEETING DATE:10/5/2021
Mayor Carr to call on Victoria Alberty to present the Adoptable Pet of the Month
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City of Huntington Beach
File #:21-737 MEETING DATE:10/5/2021
Mayor Carr to call on HBFD Chief Scott Haberle to proclaim October 3-9 as Fire Prevention
Week
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City of Huntington Beach
File #:21-727 MEETING DATE:10/5/2021
Mayor Carr to proclaim October as Breast Cancer Awareness Month and present proclamation to Dr.
Richard Reitherman, Medical Director of Breast Imaging at MemorialCare Orange Coast Medical
Center, and Cindy Callaghan, Director of Imaging and Breast Center Services
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City of Huntington Beach
File #:21-603 MEETING DATE:10/5/2021
Mayor Carr to present the Mayor’s HB Excellence Award for August 2021 to Patricia Albers,
Senior Personnel Analyst
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City of Huntington Beach
File #:21-722 MEETING DATE:10/5/2021
Mayor Carr to honor the memory of longtime Library Page Holly Freese with the Mayor’s HB
Excellence Award for September 2021
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City of Huntington Beach
File #:21-748 MEETING DATE:10/5/2021
Pacific Air Show Recap
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City of Huntington Beach
File #:21-719 MEETING DATE:10/5/2021
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 21, 2021, require
review and approval.
Financial Impact:
None.
Recommended Action:
Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated
September 21, 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 21, 2021 CC/PFA regular meeting minutes
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Minutes
City Council/Public Financing Authority
City of Huntington Beach
Tuesday, September 21, 2021
5:00 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 5:00 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/
5:00 PM — COUNCIL CHAMBERS
CALLED TO ORDER — 5:00 PM
ROLL CALL
Pursuant to Resolution No. 2001-54, Councilmember Peterson requested and received
permission to be absent from the Closed Session portion of the meeting.
Present: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
Absent: Peterson
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution)
— None
PUBLIC COMMENTS PERTAINING TO CLOSED SESSION ITEMS — None
CLOSED SESSION ANNOUNCEMENT(S)
1. 21-685 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)
RECESSED TO CLOSED SESSION — 5:02 PM
A motion was made by Posey, second Delgleize to recess to Closed Session for Item 2. With no
objections, the motion carried.
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Council/PFA Regular Minutes
September 21, 2021
Page 2 of 19
CLOSED SESSION
2. 21-684 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 — 6:16 PM
ROLL CALL
Present: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
Absent: None
PLEDGE OF ALLEGIANCE — Led by Councilmember Moser
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.
3. 21-554 Lachelle Carrozza of the Seaside Community Church and member of the Greater
Huntington Beach Interfaith Council
CLOSED SESSION REPORT BY CITY ATTORNEY — None
AWARDS AND PRESENTATIONS
4. 21-640 Mayor Carr proclaimed September as National Suicide Prevention Month and
presented a proclamation to Be Well HB
Marshall Moncrief, CEO of Be Well OC, was unable to attend this meeting to accept the proclamation.
Mayor Carr announced that September is the time to raise awareness for suicide prevention, treatment
and recovery options. The 2021 effort titled "Creating Hope Through Action" encourages everyone to
be aware of the signs, find the words, and reach out to someone they may be concerned about with
messages of hope and healing.
5. 21-624 Mayor Carr honored Friends of the Library for their 50th Anniversary and
appreciation for the long-standing support the organization has given throughout
the years
Mayor Carr reviewed the history of Friends of the Library during the last 50 years and shared they raise
funds mainly through used book sales and the gift shop at Central Library. Dina Chavez, President,
26
Council/PFA Regular Minutes
September 21, 2021
Page 3 of 19
described some of the activities the Friends of the Library volunteers use to raise millions of dollars for
library resources. She also thanked Community Services Manager Jessica Framson, Director of
Community and Library Services Chris Slama, the Friends Executive Board, and the many amazing
volunteers for their support.
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution)
Pursuant to the Brown “Open Meetings” Act, City Clerk Robin Estanislau announced supplemental
communications received by her office following distribution of the Council Agenda packet:
City Manager’s Report
#6 (21-688) PowerPoint presentation entitled Capital Improvement Program (CIP) Update submitted
by Sean Crumby, Director of Public Works
#7 (21-699) PowerPoint presentation entitled Orange County Housing Finance Trust submitted by
Oliver Chi, City Manager.
Consent Calendar
#15 (21-679) Two (2) email communications regarding adoption of Ordinance No. 4222 amending
Chapter 8.40 of the Huntington Beach Municipal Code (HBMC) titled Noise Control.
Administrative Items
#18 (21-677) PowerPoint presentation entitled Huntington Beach Supporting Efforts to Host Action
Sporting Events for the LA 2029 Olympics submitted by Sean Crumby, Director of Public
Works.
Corrected Resolution No. 2021-55.
Email communication regarding Resolution No. 2021-55 supporting efforts to host
surfing, skateboarding, BMX events for the LA 2028 Olympics.
#19 (21-692) PowerPoint presentation entitled Short Term Rentals in Huntington Beach submitted by
Ursula Luna-Reynosa, Director of Community Development.
Sixteen (16) email communications regarding consideration of drafting an amendment to
the Short Term Rental Ordinance and an extension of the de-listing deadline.
Councilmember Items
#20 (21-700) Email communication regarding establishing a “Design-Build-Finance-Operate-Maintain”
(DBFOM) subcommittee.
#21 (21-701) Email communication regarding conducting Neighborhood-Focused Town Halls.
#22 (21-703) Email communication regarding development of an Arterial Beautification Pilot Project.
PUBLIC COMMENTS (2-Minute Time Limit, amended due to volume of speakers) — 28 In-Person and
7 Call-In Speakers
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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.
Shirley Lewis, Director of the Miss Huntington Beach Scholarship Competition, was called to speak and
encouraged everyone to attend this year's pageant on Saturday, October 16, 3:00 PM at the Central
Library Theater, and announced tickets are $25. (00:28:08)
Carole Ann Wall, a resident of Huntington Beach since 1962 and supporter of the Miss Huntington
Beach Scholarship Competition for 52 years, was called to speak and encouraged Huntington Beach
women, from the ages of 18 to 24, to participate in the Scholarship Competition. (00:30:45)
Martha Morrow, 30-year Huntington Beach resident and business owner, was called to speak and
shared examples of actions by Mayor Carr and Councilmembers Posey and Moser to support her
opinion that they no longer represent the residents of Huntington Beach but rather are supporting
special interest groups. (00:32:43)
Pano Frousiguis, City Council Candidate in 2022, was called to speak and stated his support for the
Council Recall because in his opinion all of the Councilmembers (except Peterson) are representing
special interests rather than the people of Huntington Beach. (00:35:04)
Nicole Dutton was called to speak and stated examples to support her opinion that the United States is
operating under a caste system with establishment and political elites trying to control the working
class, and stated her support of the Council Recall. (00:37:19)
Cari Swan was called to speak and stated her opinion that City Council majority actions demonstrate
their support for special interests rather than the voters, and it appears the Council majority is costing
the residents money and causing harm to the quality of life, therefore she supports the Council Recall.
(00:39:40)
Kelly Miller, President and CEO of Visit HB, was called to speak and stated his support for
Administrative Item #18 regarding Resolution 2021-55 to commit to the 2028 Olympics in Los Angeles
by hosting surfing, BMX, and skateboarding events. (00:41:39)
Luanne Nichols, a fourth generation Huntington Beach property owner, was called to speak and shared
personal experiences related to massive homes being crammed into small lots and the impact that has
on neighborhood parking, and shared her dismay that Sacramento politicians approved SB 9 and SB
10 which, among other things, create a streamlined zoning process for local governments to support
new multi-unit housing of up to ten units per parcel. (00:43:54)
Russell Neal, a resident of Huntington Beach, was called to speak and stated that SB 10 allows city
officials to modify zoning laws to permit construction of 10-unit apartments in single-family
neighborhoods. Mr. Neal further stated that because residents do not know if the Huntington Beach
City Council majority will push back on this, he fully supports the Council Recall as the best way for
residents to save Surf City and the quality of life. (00:46:12)
Dave Sullivan, former Councilmember and Mayor, was called to speak and shared his dismay that the
time provided for public comment is routinely reduced to 2 minutes, and stated his concerns about
Councilmember Items #20 regarding establishing a “design-build-finance-operate-maintain”
subcommittee which may impede transparency. (00:48:12)
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Michael Hoskinson, former Planning Commissioner, was called to speak and shared his opinion that six
of the seated Councilmembers have lied, it is time to hold all politicians accountable, and stated his
support for the Council Recall. (00:51:00)
Rob Francisco, 26-year Huntington Beach homeowner, was called to speak and stated that recent
Council decisions in support of government subsidized high-density housing have encouraged him to
support the Council Recall as the best way to reestablish City leadership that represents the people.
(00:52:28)
Pat Love, a resident of Huntington Beach and member of the Short-Term Rental (STR) Alliance, was
called to speak and stated his support of Administrative Item #19 (B) to amend the existing STR
ordinance and to delay delisting short-term rentals. (00:54:40)
Brian Cardinal, a resident of Huntington Beach, was called to speak and shared details related to
residential streets, which are surrounded by apartments that have restricted parking at the intersection
of Edwards Street at Warner Avenue. Mr. Cardinal requested that restricted street parking also be
implemented on Freeborn Street. Mayor Carr asked that he complete a blue card for staff follow-up.
(00:57:15)
Justine Makoff, President & Co-Founder, Free Rein Foundation, and Mary Behrens, Huntington Central
Park Equestrian Center, were called to speak and invited community members to participate in
upcoming activities such as the Eco Tour, 5K Walk, and the Hug & Groom opportunity that is offered on
the first Sunday of every month. (00:59:36)
Erick Armelin, a long-time resident of Huntington Beach, was called to speak and stated his support for
the serving Councilmembers, their diverse perspectives, and he encouraged residents to focus on the
issues facing the City. (01:01:42)
Jonathon, a resident of Huntington Beach, was called to speak and stated that his high school
daughter's desire to attend school and participate in sports is being denied because she is not allowed
to choose whether or not to wear a mask, and noted that it appears City Councilmembers are allowed
to make that choice for themselves. (01:04:07)
Eric Schlange, owner of a short-term rental in Sunset Beach, was called to speak and stated his
family's support for Administrative Item #19 (B) and asked Council to hold off on asking rental platforms
to de-list until the City Council considers an amended ordinance. (01:06:28)
Paul Mueller, owner of a short-term rental in Sunset Beach, was called to speak and stated his support
for Administrative Item #19 (B), and asked Council to hold off on asking rental platforms to de-list until
the City Council considers an amended ordinance. (01:06:57)
Mirta Seitz, a resident for 34 years who offers short-term rental of a room in her home, was called to
speak and stated her support for extending the deadline for permits because she is unable to schedule
her inspection before the current deadline. (01:08:04)
Richard Koury, owner of two short-term rentals, was called to speak and thanked Councilmembers for
their service. Mr. Koury stated his support for Administrative Item #19 (B) regarding holding off on
asking rental platforms to de-list. (01:09:31)
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Larry Malone, resident of Sunset Beach, was called to speak and stated his support for Administrative
Item #19 (B) and asked Council to hold off on asking short-term rental platforms to delist until the City
Council considers an amended ordinance. (01:11:48)
Jignesh Padhiar was called to speak and stated that he voted for Mr. Ortiz, and the Council's
appointment of Ms. Bolton does not represent him or many other residents of Huntington Beach, and
the silenced are going to take their voices back. (01:13:58)
Ann Palmer, a 30-year resident of Huntington Beach, was called to speak and stated she is opposed to
Public Hearing Item #16 regarding Zoning Text Amendment No. 19-004 (Affordable Housing) and
Councilmember Item #20 to establish a "Design-Build-Finance-Operate-Maintain" Subcommittee. Ms.
Palmer also shared her opinion that many of the Councilmembers made campaign statements that they
now are totally ignoring and they are not listening to the residents. (01:16:19)
Tom Sanetti, a 30-year Huntington Beach resident, business owner, and Short-Term Rental Alliance
member, was called to speak and stated his support for Administrative Item #19 (B) regarding holding
off on asking rental platforms to de-list until the City Council considers an amended ordinance.
(01:18:37)
Kathryn Levassiur, a long-time resident and Short-Term Rental Alliance member, was called to speak
and stated her support for Administrative Item #19 (B), regarding holding off on asking rental platforms
to de-list until the City Council considers an amended ordinance. (01:20:56)
Tamara Malone was called to speak and referencing Administrative Item #19 regarding short-term
rentals, asked why government should be involved, or try to control, what an individual does with their
residential property. (01:23:04)
Brian Vea, a resident of Huntington Beach, was called to speak and shared his opinions on Council
inconsistencies regarding mask wearing, encouraged residents to look up councilmember voting
records and support the Council Recall at savesurfcity.org. (01:25:19)
Call-in speaker Amory Hanson, a member of the Historic Resources Board and Candidate for City
Council in 2022, was invited to speak and stated his support for approving the September 7, 2021, City
Council meeting minutes after correcting the spelling of his last name from Hansen, to Hanson.
(01:27:20)
Call-in speaker Phil Larschan, a resident of Huntington Beach and member of the Short-Term Rental
Alliance, was invited to speak and stated his support for Administrative Item #19 (B), regarding holding
off on asking rental platforms to de-list until the City Council considers an amended ordinance.
(01:28:43)
Call-in speaker Jonah Breslau, representing 32,000 member United Here Local 11 Hospitality Union,
was invited to speak and stated support for the existing short-term rental ordinance and asked that
Council enforce it. (01:30:59)
Call-in speaker Jaime Gomez, a resident of Costa Mesa employed in the Hospitality industry was
invited to speak and noted the beneficial impact that short-term rental options have for a community
when the regulations are enforced. (01:32:15)
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Call-in speaker Martha Tanenbaum, employed in the Hospitality industry, was invited to speak and
shared her support for prohibiting non-hosted short-term rentals that compete with hotels, and only
allowing hosted short-term rentals. (01:36:35)
Call-in speaker Bob Delmer, a resident of Huntington Beach since 1963, was invited to speak and
stated his support for Administrative Item #19 (B), regarding holding off on asking rental platforms to
de-list until the City Council considers an amended ordinance. (01:37:36)
Call-in speaker Veronica Chavez, Orange County resident and member of the Orange County Central
Committee representing Assembly District 69, was invited to speak and thanked the City Council for
passing an ordinance that prohibits non-hosted short-term rentals to protect residential housing and
neighborhoods, and prevents competition with nearby hotels. (01:38:40)
COUNCIL COMMITTEE — APPOINTMENTS — LIAISON REPORTS, AB 1234 REPORTING, AND
OPENNESS IN NEGOTIATIONS DISCLOSURES
Councilmember Posey reported attending an Orange County Power Authority (OCPA) meeting that has
the goal of selling power in April 2022, and announced Tiffany Law was hired as CFO. Councilmember
Posey announced his appointment of Charles Ray to the Charter Review Committee, and Tony
Strickland to the Finance Commission.
Mayor Pro Tem Delgleize reported attending meetings of the Association of California Cities — Orange
County (ACC-OC); ACC-OC Lunch and Learn; and Orange County Transportation Authority (OCTA).
Councilmember Moser reported attending meetings of the Environmental Board which currently has
four open positions; Downtown Business Improvement District (DTBID); School District; Homeless Task
Force and thanked Lieutenant Dave Deresznski for his service, and welcomed Lieutenant Brian Smith
as well as Deputy Director Jason Austin; and the Human Relations Task Force.
Councilmember Peterson announced his appointment of Casey McKeon to the Charter Review
Committee.
Mayor Carr announced her appointment of Leonie Mulvihill to the Charter Review Committee, and
reported attending meetings of the Youth Board; Inter-governmental Relations Committee (IRC); and
National Water Resources Institute.
CITY MANAGER’S REPORT
6. 21-688 Capital Improvement Program Updates
City Manager Chi introduced Public Works Director Sean Crumby who presented a PowerPoint
communication titled: Capital Improvement Program Update with slides entitled: 20/21
Accomplishments, CIP Accomplishments (2), Upcoming Projects (3), and Thank You, Questions?
Mayor Pro Tem Delgleize thanked Director Crumby for the presentation and shared that for her the
synchronization of traffic signals on Warner, eastbound to the 405 Freeway, actually work and she was
able to travel with green lights at every intersection.
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Councilmember Posey expressed his appreciation for the effort on traffic light synchronization on
Beach Boulevard cross streets, and knowing that the streets in his neighborhood are scheduled for
paving and slurry sealing.
Councilmember Posey, Director Crumby and City Manager Chi discussed the Charter requirement that
Capital Improvement Program projects equal 15% of the budget. Director Crumby stated that a 5-year
rolling average meets the requirement, which means some years may be a bit under, and other years a
bit higher. Councilmember Posey stated for the record that the leadership of this City Council, working
with City Manager Chi and Director Crumby, has made these kinds of investments possible.
Councilmember Moser and Director Crumby discussed how Huntington Beach is able to raise the score
on road conditions while the rest of the State keeps declining. Director Crumby stated that the zone
approach to street maintenance is very effective.
Mayor Carr thanked Assistant City Manager Travis Hopkins (former Public Works Director) for
implementing the zone approach and ensuring the funds were directed to capital improvements every
year. Director Crumby stated this is the second-to-last year of a 12-year program, and the program is
being re-evaluated with the hope that zone size can be increased, which would result in increased
frequency of service.
7. 21-699 Orange County Housing Finance Trust Update
City Manager Chi introduced Grant Henniger from Orange County Housing Finance Trust (OCHFT)
who presented a PowerPoint communication titled Orange County Housing Finance Trust with slides
entitled: OCHFT Overview, Accomplishments (2), www.ochft.org, 2021 Funding Sources, Looking to
the Future, and Orange County Housing Finance Trust.
Mayor Pro Tem Delgleize stated her appreciation for the fact that OCHFT has been able to secure
resources for Administration without assessing member fees, and offered to assist with presentations to
other cities to encourage participation in the program.
Mayor Carr and Mr. Henniger agreed that cities could join knowing there is no membership fee, which
is expected to be a selling point. Mr. Henniger stated that increased membership is expected to make
it more likely that OCHFT will become a line item for State budget resources.
CITY CLERK’S REPORT
8. 21-686 City Clerk Estanislau Announced National Voter Registration Day — Tuesday,
September 28, 2021
City Clerk Robin Estanislau announced that Tuesday, September 28, 2021, is National Voter
Registration Day, highlighted that voter pre-registration materials are being distributed to local high
schools, and on-line voter registration for Orange County residents is available at www.ocvote.com.
CONSENT CALENDAR
9. 21-667 Approved and Adopted Minutes
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A motion was made by Posey, second Delgleize to approve and adopt the City Council/Public
Financing Authority regular meeting minutes dated September 7, 2021, (with minor spelling errors
corrected), and on file in the office of the City Clerk.
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
10. 21-663 Approved Sole Source Procurement Request with Hadronex Inc., dba SmartCover
Systems, for Sanitary Sewer System Manhole SmartCovers
A motion was made by Posey, second Delgleize to approve Sole Source Procurement Request with
Hadronex Inc., dba Smartcover System, for the purchase of SmartCovers.
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
11. 21-681 Approved and authorized 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 motion was made by Posey, second Delgleize to 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, 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, 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, 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."
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
12. 21-638 Approved, accepted and authorized execution of a Grant Agreement for the Office
of Traffic Safety (OTS) Selective Traffic Enforcement Program (STEP) Pedestrian
and Bicycle Safety grant; and approved appropriation and expenditure of funds by
the Chief of Police
A motion was made by Posey, second Delgleize to 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, authorize
the Chief of Police to execute the grant agreement with OTS; and, approve appropriations and
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estimated revenue source in the amount of $788,000.00 and $42,795.00; and, 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.
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
13. 21-657 Approved and authorized 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
A motion was made by Posey, second Delgleize to 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."
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
14. 21-693 Approved and authorized 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
A motion was made by Posey, second Delgleize to approve and authorize the Mayor and City Clerk to
execute "License Agreement By and Between the City of Huntington Beach and Bolsa Chica
Conservancy."
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
15. 21-679 Adopted Ordinance No. 4222 to amend 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
A motion was made by Posey, second Delgleize to 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."
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The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
PUBLIC HEARING
16. 21-615 Approved 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 adopted Resolution No. 2021-50 updating the
affordable housing in-lieu fee schedule and methodology
City Manager Oliver Chi introduced Director of Community Development Ursula Luna-Reynosa and
Senior Administrative Analyst Nicolle Aube who jointly presented a PowerPoint communication titled
Zoning Text Amendment No. 19-004 with slides entitled: Purpose and Background, Request,
Inclusionary Requirements, Onsite Affordable Housing (4), Alternatives to Onsite Affordable Housing
(4), In-Lieu Fee Payment Alternative, Use of In-Lieu Fees, Clarifications & Revisions, Analysis, Public
Comments, Planning Commission and Staff Recommendation.
Councilmember Posey clarified with Analyst Aube that "lower" income used in this presentation
encompasses both "very low" and "low" as used in Regional Housing Needs Assessment (RHNA)
materials.
Mayor Carr and Director Luna-Reynosa discussed the impact in fees by changing from number of units
to project square footage. There was further discussion on not more specifically defining "over
concentration of low-income housing in any specific area" within the ordinance to allow for flexibility and
discretion.
Councilmember Kalmick confirmed with staff that they do not foresee the proposed language creating
any conflicts with any specific plans.
Mayor Carr opened the Public Hearing.
City Clerk Robin Estanislau announced there were no public speakers, and pursuant to the Brown
“Open Meetings” Act, announced supplemental communications received by her office following
distribution of the Council Agenda packet:
Public Hearing
#16 (21-615) Inter Department Memo regarding Affordable Housing Ordinance and In-Lieu Fee
Update (ZTA No. 19-004) submitted by Ursula Luna-Reynosa, Director of Community
Development, identifying a revision to Ordinance No. 4235.
PowerPoint presentation entitled Zoning Text Amendment No. 19-004 submitted by
Ursula Luna-Reynosa, Director of Community Development.
Mayor Carr closed the Public Hearing.
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Councilmember Peterson stated his opposition to this item as he sees it as contributing to increasing
building costs similar to Americans with Disabilities Act (ADA), Building Energy Efficiency Standards
Title 24, International Building Code or California Building Code laws. He further stated he would rather
see a program that could reward a developer for complying, rather than applying fees for non-
compliance.
Councilmember Posey stated his opinion that lack of inventory is what really creates skyrocketing
housing, the choppy waters of State law (including RHNA) have to be navigated, and impacts to streets
and parks must be moderated and mitigated. Councilmember Posey noted a benefit is the flexibility of
in-lieu fees that can be maximized through leverage for affordable housing trust funds and grants.
A motion was made by Kalmick, second Posey to 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, approve ZTA No. 19-004 and
after City Clerk reads by title, 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) as amended by Supplemental
Communication (revised Ordinance No. 4237); and, 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).
The motion as amended carried by the following vote:
AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: Peterson
17. 21-674 Approved Fiscal Year 2020-2021 Consolidated Annual Performance & Evaluation
Report (CAPER)
City Manager Oliver Chi introduced Community Development Deputy Director Steve Holtz and Housing
Manager Charles Kovac who presented a PowerPoint communication titled Consolidated Annual
Performance & Evaluation Report (CAPER) with slides entitled: Background (2), Funding Categories,
Oak View Family Literacy, Oak View Children's Bureau, Homeless Outreach, Standup for Kids &
Robyne's Nest, Senior Care Services, Code Enforcement, Public Facilities, Tenant-Based Rental
Assistance (TBRA), Recommended Action, and Thank You.
Mayor Pro Tem Delgleize confirmed with Director Holtz that all of the projects approved by Council last
year were addressed in this report.
Councilmember Posey and Manager Kovac discussed the category to "preserve existing and create
new and public facilities" which shows zero completion. Director Holtz explained this category provides
Council an objective if funds become available, and this report covers the first year of a five-year
period.
Mayor Carr opened the Public Hearing.
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Pursuant to the Brown “Open Meetings” Act, City Clerk Robin Estanislau announced supplemental
communications received by her office following distribution of the Council Agenda packet:
Public Hearing
#17 (21-674) Inter Department Memo regarding correction to the Fiscal Year 2020-2021 Consolidated
Annual Performance & Evaluation Report (CAPER) submitted by Ursula Luna-Reynosa,
Director of Community Development.
PowerPoint presentation entitled Consolidated Annual Performance & Evaluation Report
(CAPER) FY 2020-2021 submitted by Ursula Luna-Reynosa, Director of Community
Development.
Mayor Carr closed the Public Hearing.
A motion was made by Posey, second Delgleize to 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, authorize the City Manager to
transmit this report to the United States Department of Housing and Urban Development (HUD) by
September 28, 2021, as amended by Supplemental Communication (Final Draft CAPER Report).
The motion as amended carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
ADMINISTRATIVE ITEMS
18. 21-677 Adopted Resolution No. 2021-55 supporting efforts to host surfing, skateboarding,
BMX events for the LA 2028 Olympics
City Manager Chi introduced Public Works Director Sean Crumby who presented a PowerPoint
communication titled Huntington Beach Supporting Efforts to Host Action Sporting Events for the LA
2028 Olympics with slides entitled: Did you Know..., Surf City USA, Action Sporting Events, Where do
we go from here, and Questions and Comments.
Councilmember Peterson reviewed the actions the City has already taken such as discussions with the
International Olympic Committee (IOC) in Tokyo, as well as hosting representatives here in Huntington
Beach to demonstrate our sustainability and confirm the infrastructure already exists. Director Crumby
confirmed that Resolution 2021-55 ensures that the efforts of Visit HB and the City will be combined
moving forward.
Councilmember Posey suggested several marketing strategies, including that in 2028, forty-four years
will have passed since the 1984 Los Angeles Olympics. He also reminded everyone that Huntington
Beach "Surfing Royalty" traveled to Sacramento to witness the Senate vote on the resolution brought
forward by then Orange County Senator Janet Nguyen to declare September 20 as “California Surfing
Day”.
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Mayor Pro Tem Delgleize stated that Orange County and Los Angeles County transit authorities are
working to enhance area public transportation and confirmed with Director Crumby that collaboration
with Orange County Transportation Authority (OCTA) will be an important part of the process.
Mayor Carr stated her support for the effort to build infrastructure such as a new world-class skate park
that will remain for many years after the 2028 Olympics.
Councilmember Moser expressed her excitement at the prospect of having Olympic events in
Huntington Beach and thanked staff and Visit HB for their efforts at putting Huntington Beach front and
center, and drawing the world's attention for all of the right reasons.
A motion was made by Delgleize, second Carr to 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," as amended by Supplemental Communication (revised
Resolution No. 2021-55).
The motion as amended carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
19. 21-692 Directed Staff to extend de-listing through end of year and return with a limited
ordinance amendment to allow un-hosted permits specific to Sunset Beach one
year from adoption of Short Term Rental fee resolution (March 1, 2022)
City Manager Chi introduced Community Director Ursula Luna-Reynosa who presented a PowerPoint
communication titled Short Term Rentals in Huntington Beach with slides entitled: Timeline of Short-
Term Rental Efforts, STR Ad Hoc Committee Discussion, Staff Seeking City Council Direction, and
Questions?
Councilmember Peterson and Director Luna-Reynosa discussed the option for owners to use third-
party inspectors for the short-term rental permit process, and it appears lack of third-party inspector
availability is dragging out the time for some. Councilmember Peterson stated he supports holding to
the existing deadline, however he would recommend not de-listing anyone who has submitted their
application by the deadline and is in the process of getting their permit. He feels it is best to proceed
with building a foundation plan that can be adjusted in the future if necessary.
Mayor Pro Tem Delgleize and Director Luna-Reynosa reviewed the inspection procedure, which
ensures there are no life safety issues on the private property. Director Luna-Reynosa described the
Code enforcement process, including notice of violation and citation. Mayor Pro Tem Delgleize stated
her support for Option B.
Councilmember Posey and Director Luna-Reynosa discussed SB 60, a State housing mandate, which
may or may not yet be signed, that increases the fine for a third health and safety violation to $5,000.
Councilmember Posey asked hypothetically IF the fine amount was raised by the State, would Council
have to approve that locally as well. Director Luna-Reynosa confirmed if a defined fine were changed,
it would require Council approval, and stated that a high fine is probably one of the best deterrents for
bad behavior.
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Councilmember Posey and Director Luna-Reynosa discussed that the number of short-term rentals is
determined from analyzing active advertisements across all listing platforms, and there probably is a
seasonal impact on those numbers and the numbers will always fluctuate.
Councilmember Kalmick and Director Luna-Reynosa discussed the two different date options, one for
Sunset Beach un-hosted short-term rental (STR) owners to be grandfathered in, and a delisting date.
Director Luna-Reynosa explained the delisting date is not part of the Short-Term Rental Ordinance, and
therefore a change of that date would not require an Ordinance amendment; however, extending the
time to allow un-hosted STR owners to get permits would require an Ordinance amendment.
Councilmember Kalmick stated that at this point he doesn't see the need to immediately proceed with
creating a zone structure within the Coastal Overlay District, and would support extending the delisting
date to November 1, 2021.
Councilmember Moser stated support for Councilmember Kalmick's comments, and discussed the
number of actual permitted units, vs the projected number used during the planning process. Director
Luna-Reynosa explained that most people appear to be providing illegal non-hosted rentals; therefore,
the low number of permitted hosted units is not surprising. Councilmember Moser and Director Luna-
Reynosa discussed that there was very little City outreach to Sunset Beach homeowners to clarify that
properties are not automatically “grandfathered” into the permit process.
Councilmember Posey made reference to fines identified in SB 60.
Mayor Carr described some of the issues discussed at the Ad Hoc Committee level, and stated her
support for Council determining policy that is best for Huntington Beach rather than waiting to see what
Sacramento decides. Mayor Carr stated her support for extending the delisting deadline for another
three (3) months to allow time to define an ordinance that makes sense, is enforceable, and that is fair
by allowing in Huntington Beach what is available in Sunset Beach.
Councilmember Bolton stated she is still learning about all of the moving parts for this issue, but
supports the effort to ensure anyone who has submitted an application is not delisted, and agreed with
Mayor Carr that more time is required.
Mayor Carr confirmed with Director Luna-Reynosa that the time has lapsed for Sunset Beach residents
to get an un-hosted short-term rental permit. Mayor Carr said it appears Council is prepared to extend
the de-listing date, but unclear as to whether or not Council wants to expand the plan from Sunset
Beach into the Coastal Zone.
Councilmember Kalmick stated he is not in favor of expanding the program at this time into the Coastal
Zone, and suggested keeping the Ad Hoc Committee to continue discussions.
Director Luna-Reynosa recapped what she was hearing from Council is to extend the de-listing
deadline to December 31, 2021, which means effective January 1, 2022, a completed permit will be
required and enforcement will begin. The City will ensure that people are well aware of the process
and final date, and staff will not depend upon any third parties to get the message out. In addition, staff
will bring back a limited ordinance amendment to allow un-hosted STRs in Sunset Beach one year from
adoption of the STR resolution, or March 1, 2022, and off-line discussions can continue.
39
Council/PFA Regular Minutes
September 21, 2021
Page 16 of 19
Councilmember Posey provided support for Director Luna-Reynosa’s recap as a stated motion,
amended by adding that Council discuss expansion into the Coastal Zone at a future meeting.
A motion was made by Posey, second Delgleize to 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. direct staff to extend the de-listing deadline to December 31, 2021; as of
January 1, 2022 forward, only STRs with valid permits may be listed — City to ensure property
owner education; return with limited ordinance amendment to allow un-hosted permits specific
to Sunset Beach one year from adoption of STR fee resolution (March 1, 2022); and, consider
Coastal Zone expansion at a later date.
The motion as amended carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
COUNCILMEMBER ITEMS
20. 21-700 Item Submitted by Councilmember Posey Approved — Establish a "Design-Build-
Finance-Operate-Maintain" (DBFOM) Subcommittee
Councilmember Posey introduced this item by describing "design-build-finance-operate-maintain" as a
private/public partnership where private contractors build in exchange for a long-term lease, and at
lease expiration the City owns the building. He described a legacy process, which will require some
creativity for the moving parts that need to be considered, and serious analysis with engagement of the
Finance Commission for an informed and educated Council recommendation.
Councilmember Peterson stated support for including the Finance Commission; however, he would like
to see all Councilmembers included throughout the process using study sessions to ensure complete
transparency.
Councilmember Posey stated his intent is to provide transparency through a three-member ad hoc
committee to dedicate 20 or maybe 60 hours or more for a deeper dive, because developing this plan
will require much more than just several study sessions.
Councilmember Peterson replied that typically, ad hoc committees do not have public meetings;
however, he could be inclined to support the effort if that is required.
Councilmember Kalmick stated his support for an ad hoc committee that digs into the details, includes
the Finance Commission in some of their meetings, and reports to Council and the community through
Study Sessions. He added that any Councilmember with more interest should feel free to attend any of
the ad hoc committee meetings.
Councilmember Kalmick and City Manager Chi discussed that this concept is at the very beginning
stages, but given the scale of the potential projects, there is an opportunity to ensure that building plans
include maintenance to ensure improvement over what has been done previously.
40
Council/PFA Regular Minutes
September 21, 2021
Page 17 of 19
Mayor Pro Tem Delgleize and Councilmember Posey discussed the enormity of the concept, and
amount of time required to dig into details and determine options, and stated that it will take more time
than a couple of study sessions each month.
A motion was made by Posey, second Delgleize to authorize the establishment of a 3-member DBFOM
City Council Ad-Hoc Subcommittee as amended to engage the Finance Commission to provide a
financial analysis (date to be determined); and, overview DBFOM Subcommittee/Finance
Commission recommendations at future City Council Study Sessions.
The motion as amended carried by the following vote:
AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: Peterson
21. 21-701 Item Submitted by Councilmember Kalmick Approved — Directed City Manager to
develop a Neighborhood-Focused Town Hall Program
Councilmember Kalmick introduced this item, which he described as an effort to get staff to provide
neighborhood-focused town halls either quarterly or semi-annually. He added that the Southeast and
Sunset Beach committees are great examples of what he envisions for various City neighborhoods.
Councilmember Moser stated her support for this item, as she believes it is important for every
neighborhood to have direct communication from staff.
Councilmember Posey stated his support for this item based on the success of his "Meet the Mayor"
meetings he offered in various locations throughout the City during his tenure as Mayor.
A motion was made by Kalmick, second Posey to 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.
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
22. 21-703 Item Submitted by Councilmember Moser Approved — Directed staff to Develop
an Arterial Beautification Pilot Project
Councilmember Moser described some of the City's arterial roads as just block walls and asphalt, and
she would like to see more effort put into esthetics. She described her discussions on this topic with
Public Works Director Sean Crumby who indicated that a pallet of options would be helpful for adding
tree wells, greening up block walls, add and improve medians, as well as add or update entry
monuments. Councilmember Moser stated there is funding for arterial beautification in the American
Rescue Plan Act (ARPA), and she believes those funds would be wisely spent on a pilot project that
could set standards that could be used citywide.
41
Council/PFA Regular Minutes
September 21, 2021
Page 18 of 19
Councilmember Peterson confirmed with Councilmember Moser that on-going maintenance costs
would be part of the plan.
Councilmember Posey stated his support and suggested it might inspire neighborhoods to do some of
their own beautification, and suggested a beautification pilot project could set the standard and provide
opportunity to be implemented with street repaving plans.
Councilmember Kalmick stated his support for this item.
Mayor Pro Tem Delgleize and Director Crumby discussed the importance of including maintenance
costs. Mayor Pro Tem Delgleize stated her support for the program, especially for including the City's
entryways, and believes that Caltrans would cooperate when consulted.
A motion was made by Moser, second Delgleize to recommend that the City Council vote to direct staff
to develop an arterial beautification pilot program project in Huntington Beach.
The motion carried by the following vote:
AYES: Peterson, Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: None
23. 21-704 Item Submitted by Councilmember Moser Approved — Directed staff to assess
current Navigation Center services for improvements that can be deployed, and
which will connect to our Project Zero Initiative
Councilmember Moser introduced this item by providing a history of actions the City has taken to reach
the point where there is a Navigation Center and Be Well OC services. Councilmember Moser added
she believes there are improvements that can be made to ensure that Navigation Center efforts actually
move people to supportive permanent housing, and become connected to all available services. She
stated that important components include the ability to track services and define what success looks
like.
Mayor Carr and Councilmember Moser discussed the reporting that Mercy House provides would be
included in a digital dashboard. Councilmember Moser explained that Mercy House would oversee and
track use of expanded services at the Navigation Center, many of which may be available through the
County, business and faith-based communities.
A motion was made by Moser, second Kalmick to 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.
The motion carried by the following vote:
AYES: Bolton, Delgleize, Carr, Posey, Moser, and Kalmick
NOES: Peterson
42
Council/PFA Regular Minutes
September 21, 2021
Page 19 of 19
COUNCILMEMBER COMMENTS (Not Agendized)
Councilmember Moser reported participating in the Surf City Marathon Kick-off; attending the McKenna
Claire Foundation Party with a Purpose; Blessing of the Waves; Kiwanis Club Fundraiser; Bluff Top
Park Groundbreaking; Citizen's Academy meetings; Oakview Communidad Volunteer Thank You
event; and Patriot Day Ceremony.
Mayor Pro Tem Delgleize thanked those who sent her birthday wishes on September 11, and reported
attending the welcome for the Be Well OC van and Bluff Top Park Groundbreaking.
Mayor Carr reported speaking to the Sunset Women's Club and at the Annual Blessing of the Waves;
attending the Bluff Top Park Groundbreaking; thanked District Attorney Todd Spitzer and Supervisor
Katrina Foley for attending the Be Well OC launch; Surf City Marathon Kick-off; Patriot Day Ceremony,
and thanked American Legion Post 133 for their participation.
Mayor Carr stated her embarrassment at hearing "recall, recall" at the 9/11 Event and condemned
those who did not have the decency to show more respect. She encouraged people to attend the US
Open of Surfing, October 1 – 3 Air Show, and concerts following the Air Show.
ADJOURNMENT — 11:05 PM to the next regularly scheduled meeting of the Huntington Beach City
Council/Public Financing Authority on 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
_________________________________________
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
43
City of Huntington Beach
File #:21-744 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable City Councilmembers
SUBMITTED BY:Kim Carr, Mayor
Subject:
Request to receive and file revisions to the 2021 City Council Liaison List - Citizen Boards,
Commissions, Committees and Task Forces
Statement of Issue:
The 2021 City Council Liaison List has been revised to update meeting details and reassign
Councilmember Moser to Councilmember Posey’s current position as Liaison to the Fourth of July
Executive Board.
Recommended Action:
Receive and file revisions to the 2021 Council Liaison List, including the appointment of
Councilmember Moser as Liaison to the Fourth of July Executive Board.
c: Oliver Chi, City Manager
Robin Estanislau, City Clerk
Attachment:
1. Updated 2021 City Council Liaison List
City of Huntington Beach Printed on 9/29/2021Page 1 of 1
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2021 COUNCIL LIAISON LIST
CITIZEN BOARDS, COMMISSIONS, COMMITTEES, AND TASK FORCES
(Citizen Members Appointed to Four-Year Terms)
- Updated 9/29/21 -
*Meeting Date/Place is subject to change.
Citizen Group Council Liaisons Meeting Date/Place*
1. Children’s Needs Task Force Moser, Bolton 4th Thurs. Monthly, 4:00 PM, City Hall Lower Level B-7
Bi-Monthly (Aug, Oct, Dec, Feb, Apr, June)
2. Citizen Infrastructure Advisory Board Individual Appointments Meetings twice per year, 5:00 PM
Zoom / Utilities Yard, 19021 Huntington St
3. Citizen Participation Advisory Board Individual Appointments 1st Thurs. Monthly, 6:00 PM, City Hall Lower Level B-8
4. Community Services Commission Individual Appointments 2nd Wed. Monthly, 6:00 PM, Zoom / City Hall Council Chamber
5. Design Review Board Peterson, Kalmick 2nd Thurs. Monthly, 3:30 PM, City Hall Lower Level, B-8
6. Environmental Board Kalmick, Moser 3rd Wed. Monthly, 6:00 PM, City Hall Lower Level, B-8
7. Finance Commission Individual Appointments 4th Wed. Monthly, 5:00 PM (Location varies month to month: Zoom /
B-7, B-8, Caucus Room, or Finance CR #2)
8. Fourth of July Executive Board Peterson, Moser 1st Wed. Monthly, 6:00 PM, Zoom / City Hall Lower Level B-8
9. Harbour Commission Peterson, Kalmick 4th Thurs. Monthly, 5:00 PM, City Hall Lower Level B-8
10. Historic Resources Board Peterson, Posey 3rd Wed. Monthly, 5:00 PM, City Hall Lower Level B-7
11. Human Relations Task Force Moser, Bolton 2nd Tues. Monthly, 6:45 PM, City Hall Lower Level B-7
12. Investment Advisory Board Individual Appointments 3rd Thur. (January, April, July, October), 6:00 PM, Zoom
13. Jet Noise Commission Delgleize, Kalmick 4th Mon. Monthly, 5:30 PM, City Hall Lower Level B-7
14. Library Board Kalmick, Bolton 3rd Tues. Monthly, 5:00 PM, Zoom / Central Library,
15. Mobile Home Advisory Board Carr, Posey 4th Mon, 6:00 PM –Quarterly (January, April, July, October), Zoom /
City Hall Lower Level B-8
16. Personnel Commission Carr, Posey 3rd Wed. Monthly, 5:30 PM, City Hall Lower Level B-8
17. Planning Commission Individual Appointments 2nd & 4th Tues. Monthly, 6:00 PM (Regular Session),
City Hall Council Chambers
18. Public Works Commission Individual Appointments 3rd Wed. Monthly, 5:00 PM, Utilities Yard, 19021 Huntington St
19. Youth Board Carr, Moser 2nd Mon, 3:30 PM, City Hall, 5th Floor Conf. Room
(No Meetings – June, July, August)
45
CITY OF HUNTINGTON BEACH
Other City and Citizen Committees
(Created by City Council Action)
Citizen Group Council Liaisons Meeting Date/Place*
1. Specific Events Committee
(governed by MC 13.54) and
Executive Events Committee
Delgleize, Bolton Weekly, Thursday, City Hall-Room B-8, 2:00 p.m.
COMMUNITY GROUPS
(Citizen Members Not Appointed by City Council)
Citizen Group Council Liaisons Meeting Date/Place*
1. Huntington Central Park Collaborative Delgleize, Moser Last Tuesday of the Month, Room B-8, 4:30 – 6:30 PM
2. Huntington Beach Council on Aging Delgleize, Carr 1st Thurs, Senior Center (EMG, Room 1), 9:00 AM
3. Huntington Beach Downtown Business
Improvement District (BID) Board
Meeting
Carr, Moser 2nd Thursday, Art Center, 9:00 AM
4. Neighborhood Watch Posey, Bolton 2nd Tues, Police Dept, 2nd Fl. Investigation Conf. Room, 6:30 PM
(No meeting July, Aug, Dec)
5. Oak View Task Force Carr, Moser 3rd Thursday of March, June, September, December @ 4:00 PM, Oak
View Elementary
6. Sister City Association Carr, Delgleize 2nd Wednesday, Central Library (Room TBD), 6:00 PM
46
CITY OF HUNTINGTON BEACH
COUNCIL COMMITTEES
Council Committee Council Committee Members Meeting Date/Place
1. Beautification, Landscape, & Tree Delgeize, Moser, Bolton 4th Tues. Monthly, 4:30 PM, City Hall Public W orks Conf. Rm
2. Communications Committee Carr, Delgleize, Posey 4th Tues. Monthly, 3:30 PM, City Hall 4th Floor, CR #1
3. Downtown Task Force Carr, Peterson, Bolton As needed
4. Economic Development Committee (Mayor, Mayor Pro Tem,
Immediate Past Mayor –
prescribed)
Carr, Delgleize, Peterson
Downtown -Same as above
2nd Wed., 2:00 PM, City Hall Lower Level B-8 (EDC)
4th Wed. Quarterly (Jan., Apr., July, Oct.), 2:00 PM, City Hall Lower
Level B-8 (Downtown Issues)
5. Homeless Task Force Delgleize, Moser, Bolton 3rd Wednesday, 3:00 p.m., B-7
6. Intergovernmental Relations Carr, Posey, Delgleize 3rd Wed. Monthly, 4:00 PM, City Hall 4th Floor, CR #2
7. Oversight Board _Carr_________ (Mayor’s
appointee & OCSD rep.)
As needed
8. Santa Ana River & Parkway Comm. Posey, Delgleize As needed
9. School District/City Meeting Moser, Carr, Bolton 2nd Mon. Quarterly, 3:30 PM, City Hall Lower Level B-7
10. Southeast Area Carr, Peterson, Bolton 4th Wed., 4:30 PM, Every two month (January, March, May, July,
September, November)
11. Strategic Plan Committee (Ad Hoc) Carr, Kalmick, Moser As needed
12. Sunset Beach Area Carr, Peterson As needed (City Hall Room B-8)
47
COMMUNITY & REGIONAL AGENCIES AND COMMITTEES (Appointed by Mayor)
Name of Agency/Committee Appointee Meeting Date/ Place*
1. California Coastal Coalition Board Kalmick, Moser 2-3 meetings/year, various places
2. HB Chamber Legislative Affairs Committee Posey, Kalmick 4th Wed. 8:00 AM, Chamber of Commerce office, 2134 Main
St., Suite 100
3. Visit Huntington Beach Board Meeting Carr, Delgleize (Alternate) 4th Tuesday of Month, 3:30 PM, VHB Board Room, 155 Fifth
Street, Suite 111
4. League of California Cities, Coastal Cities
Group
N/A Monthly as scheduled by the State League. May go to bi-
monthly
5. Orange County Coastal Coalition Posey, Bolton (Day & Month – TBD), 9:00 AM, Newport Beach Library, 1000
Avocado Ave.
6. O.C. Council of Governments OCCOG Posey; Carr (Alternate) 4th Thurs, 10:30 AM, Monthly, Irvine City Hall, City Council
Chambers, 1 Civic Center Plaza, Irvine
7. O.C. Sanitation District
$212.50 per meeting
Carr ; Kalmick (Alternate) 4th Wed, 6:00 PM, Sanitation District, Fountain Valley, (Plus
Committee assigned by Chair) 10844 Ellis Ave., FV
8. O.C. Vector Control District
$100 per meeting
Posey 3rd Thurs, 3:00 PM.,13001 Garden Grove Blvd.
9. OCTA Board of Directors Meeting
$100 per meeting
Delgleize (as elected by City
Selection)
2nd & 4th Monday, 9:00 AM, OCTA Headquarters, 550 S. Main
St., Orange – Conf. Room 07-08
10. Santa Ana River Flood Protection Agency
(SARFPA)
Delgleize, Posey (Alternate) 4th Thurs, 4:00 PM, O.C. Water District Office, 18700 Ward St.,
Fountain Valley - Executive Committee Meetings: January,
March, May, July, September; Full Agency Meetings: June,
November
11. Southern California Association of
Governments (SCAG) District 64
Delegate* $120 per meeting
Posey 1st Thurs, SCAG Offices, Downtown L.A., 9:00 AM – 2:00 PM
12. West O.C. Water Board (WOCWB)
$100 per quarterly meeting
Moser, Peterson 3rd Wednesday, 4:00 PM, (January, April, July and October),
Utilities Operations Building, 19001 Huntington St.
48
CITY COUNCIL APPOINTMENTS BY STATE & REGIONAL AGENCIES
(FOR INFORMATIONAL PURPOSES ONLY)
Name of Agency/Committee Appointments
1. City Selection Committee-- Held with League of Cities O.C. Division Meeting
Mayor or Council Member designee
(prescribed)
2. League of California Cities – Executive Steering Committee, Orange County Division
3. League of California Cities – Housing, Community and Economic Development Policy Committee
(Meetings occur quarterly Jan, Apr, June, & Sept. Thurs.
4. League of California Cities – Public Safety Policy Committee
(Meetings occur quarterly: Jan, Apr, June, & Sept. Thurs.
5. League of California Cities – Community Services Policy Committee
(Meetings occur quarterly: Jan, Apr, June, & Sept. Thurs.
6. League of California Cities –Administrative Services Policy Committee
7. Orange County Transportation Authority Board (2 & 4 Monday each month at 9:00 AM)
Contact: Wendy Knowles at 560-5676
8. OCTA Citizen Advisory Committee
9. SCAG –Transportation & Communications Committee
1st Thurs, 10 am, SCAG Offices, Downtown L.A.
10. SCAG –Community, Economic, & Human Development
1st Thurs, 10 am, SCAG Offices, Downtown L.A.
11. Orange County Waste Management Commission
Meets quarterly-2nd Thursday in March, June, September & December
49
City of Huntington Beach
File #:21-675 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Oliver Chi, City Manager
PREPARED BY:Travis K. Hopkins, Assistant City Manager
Subject:
Approve one or more appointments to the Human Relations Task Force (HRTF) as
recommended by City Council Liaisons Natalie Moser and Rhonda Bolton
Statement of Issue:
The Human Relations Task Force currently has two (2) unscheduled vacancies that will expire on
December 31, 2021 and December 31, 2023.
Furthermore, the HRTF is anticipating three scheduled vacancies will also expire on December 31,
2021. These vacancies are currently filled by three members who are in good standing with the
HRTF and seeking reappointment for an additional term.
Financial Impact:
Not applicable
Recommended Action:
A) Approve the appointment of Jonathan Smith for his first term as a member of the Human
Relations Task Force through December 31, 2023, the end of term for the current vacancy; and/or
B) Approve the appointment of Elaine Keeley for her initial term as a member of the Human
Relations Task Force through December 31, 2021, the end of term for the current vacancy and
approve an extension of her term through December 31, 2025; and/or
C) Approve the reappointment of Antonio Benitez as a member of the Human Relations Task Force
through December 31, 2025; and/or
D) Approve the reappointment of Hemesh Patel as a member of the Human Relations Task Force
through December 31, 2025; and/or
E) Approve the reappointment of Chris Hoff as a member of the Human Relations Task Force
through December 31, 2025.
City of Huntington Beach Printed on 9/29/2021Page 1 of 3
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File #:21-675 MEETING DATE:10/5/2021
Alternative Action(s):
Do not approve the recommended appointments and direct staff accordingly.
Analysis:
The Human Relations Task Force (HRTF) was formed in April 1997 with a mission to “promote and
celebrate diversity in our community through education and understanding.” Currently, there are two
available vacancies on the Task Force, due to unscheduled term resignations.
The City advertised recruitment through the following means: announcement of the vacancies on the
City's website, postings at City Hall and Central Library, and announcements during multiple HRTF
meetings. The City received eight (8) new applications and also had nine (9) additional applications
that were previously considered during the last appointment process and are still active.
City Council Liaisons Natalie Moser and Rhonda Bolton, along with HRTF Chair V.C. Rhone and Vice
Chair Antonio Benitez reviewed a total of 17 applications and conducted an interview of the five
highest ranked applicants on September 16, 2021. After careful deliberation, the Council Liaisons,
with input from the Chair and Vice Chair, recommended the appointment of Jonathan Smith and
Elaine Keeley to fill the unscheduled vacancies, which expire on December 31, 2023 and December
31, 2021, respectively. It is also recommended that Keeley’s appointment be extended to December
31, 2025.
A brief description of each candidate is included below. Furthermore, their complete applications are
attached.
·Jonathan Smith: Mr. Smith has been a resident of Huntington Beach for 5 years. Mr. Smith is
a father and teacher with 16 years of experience teaching 9-12 grade students. He also acts
as a teacher advisor to numerous youth-led organizations. Through the HRTF, he wishes to
further his passion of building bridges among communities and youth from diverse
backgrounds.
·Elaine Keeley: Dr. Keeley is an educator, civic leader, and resident of Huntington Beach for 57
years. Dr. Keeley has served many school districts at various capacities including teacher,
principal, school administrator, and Director of Curriculum and Instruction. She previously
served the HB Allied Arts Board among other civic organizations. By joining the HRTF, she
wishes to further her passion of engaging citizens in honest dialogue about the strength of a
diverse community where all citizens have a voice.
Lastly, three current HRTF members - Antonio Benitez, Chris Hoff, and Hemesh Patel - are serving
their initial terms, which are scheduled to expire on December 31, 2021. All three members remain in
good standing and have served on multiple ad hoc committees to execute HRTF programs and
objectives. These members wish to continue serving and are requesting reappointment for another
term through December 31, 2025.
It should be noted that all three members will have served less than two years when their initial terms
expire at the end of this year. Benitez and Patel were appointed to unscheduled vacancies in
January 2020, and Hoff in March 2021. Per HBMC 2.100.060 (Service Limitation), any term less than
City of Huntington Beach Printed on 9/29/2021Page 2 of 3
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File #:21-675 MEETING DATE:10/5/2021
January 2020, and Hoff in March 2021. Per HBMC 2.100.060 (Service Limitation), any term less than
2 years does not qualify as a full term. As such, all three members would be eligible to serve two full
consecutive terms, following their initial term.
This is the same case for Keeley that she would be filling an unscheduled vacancy that expires on
December 31, 2021 serving only three months; therefore, the recommendation is also to approve her
appointment to the subsequent term that expires on December 31, 2025.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. HRTF Membership Roster
2. Application for Appointment - Jonathan Smith
3. Application for Appointment - Elaine Keeley
4. Reappointment Request Letter - Antonia Benitez
5. Reappointment Request Letter - Hemesh Patel
6. Reappointment Request Letter - Chris Hoff
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HUMAN RELATIONS TASK FORCE
Membership Roster
Effective September 28, 2021
MEMBER SEATS WITH TERMS EXPIRING 12-31-2021
NAME Date of
Appointment
Partial
Term Expiration
(per HBMC
1st Term
Expiration
1 Antonio Benitez* 1-21-20 12-31-21 12-31-25
2 Chris Hoff* 3-15-21 12-31-21 12-31-25
3 Hemesh Patel* 1-21-20 12-31-21 12-31-25
4 VACANT* (Lee-Goodman) TBA 12-31-21 12-31-25
*Pending approval by City Council on 10/5/2021
MEMBER SEATS WITH TERMS EXPIRING 12-31-2023
NAME Date of
Appointment
1st Term
Expiration
2nd Term
Expiration**
5 Debbie Parrott 3-15-21 12-31-23
6 V.C. Rhone 12-18-17 12-31-19 12-31-23
7 VACANT* (Bolton) TBA 12-31-23
8 Teresa Carlisle 1-21-20 12-31-23
9 Timothy Stuart 1-21-20 12-31-23
*Pending approval by City Council on 10/5/2021
53
Application for Appointment to a Citizen
Commission, Board, Committee, or Task Force
Page 1
Last Name *First Name *Middle Initial Date *
Name of Board, Commission, Committee, or Task Force *
Length of Residency in Huntington Beach *
Occupation *
United States Citizen?*Currently Serving on a City Board
or Commission?*
Home Address:*
Phone Numbers
Personal
Type *(?)Number *
Phone Numbers
Business
Type (?)Number
Personal Email *
Smith Jonathan 8/9/2021
Human Relations Task Force
5
Teacher
Yes No
Yes No
City
Huntington Beach
State
CA
Postal / Zip Code
92648
Street Address
Address Line 2
cell
54
Page 2
Educational Background *
Professional Licenses and/or Associations *
Professional Experience *
Special Knowledge or Skills *
Civic Interests and/or Service Memberships?*
How will your qualifications best serve the citizen advisory group that you are applying for, and why do you wish
to serve on this group?*
It is the policy of the City Council to make appointments to the citizen commissions, boards, and committees,
based on the needs of the city, as well as the interests and qualifications of each applicant. Selection will be
made without discrimination based on the race, creed, gender, or sexual orientation of the applicant.
Additional information concerning a particular commission, board, committee, or task force or the application
process is available through the staff support department identified above. General questions can be directed to
Cathy Fikes, (714) 536-5553.
undergrad- BA Mathematics
masters- Education
Omega Psi Phi Fraternity, Inc.
16 years of teaching 9-12 grade students in the Corona Unified School District focusing on Mathematics and
AVID. During my tenure, I have also been a teacher advisor to numerous student led organizations.
In addition to several personal development trainings, I am an excellent communicator with great listening skills
who's empathic to those in my ethos.
I have always had a great interest in giving back to the community with special interest in adolescence
development. I have maintained my philanthropic efforts while working through my fraternity grad chapter.
If it weren't for leaders in my community taking me under their wings and guiding through what could have been
major road blocks, then I would have never graduated college let alone gain my masters. For that reason alone,
I have always been committed to giving back with the hope that I could also make a difference. Being a BIPOC
math teacher in a predominate non diverse school district has taught me how to lean in, make a difference, and
build bridges while inspiring the youth.
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Application for Appointment to a Citizen
Commission, Board, Committee, or Task Force
Page 1
Last Name *First Name *Middle Initial Date *
Name of Board, Commission, Committee, or Task Force *
Length of Residency in Huntington Beach *
Occupation *
United States Citizen?*Currently Serving on a City Board
or Commission?*
Home Address:*
Phone Numbers
Personal
Type *(?)Number *
Phone Numbers
Business
Type (?)Number
Personal Email *
Keeley Elaine Bauer 8/10/2021
Human Relations Task Force
57 Years
Educator
Yes No
Yes No
City
Huntington Beach
State
CA
Postal / Zip Code
92646
Street Address
Address Line 2
cell
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Page 2
Educational Background *
Professional Licenses and/or Associations *
Professional Experience *
Special Knowledge or Skills *
Civic Interests and/or Service Memberships?*
How will your qualifications best serve the citizen advisory group that you are applying for, and why do you wish
to serve on this group?*
It is the policy of the City Council to make appointments to the citizen commissions, boards, and committees,
based on the needs of the city, as well as the interests and qualifications of each applicant. Selection will be
made without discrimination based on the race, creed, gender, or sexual orientation of the applicant.
Additional information concerning a particular commission, board, committee, or task force or the application
process is available through the staff support department identified above. General questions can be directed to
Cathy Fikes, (714) 536-5553.
USC- Doctorate in Educational Leadership
CSULB- Masters in Educational Administration
UCLA- BA in Theatre and Teaching Credential
California Multiple subject Teaching credential with CLAD
California Administrative Credential
Association of California School Administrators
13 years teaching in LAUSD, SAUSD,
15 years School Site Principal in SAUSD, Irvine USD, Huntington Beach City
4 years County administrator for Math, Science, Arts, History/Social Studies and PE, OCDE
6 Years Director of Curriculum and Instruction Merced City School District
Currently, Director of Curriculum and Instruction MIND Research Institute
Years of experience, as well as recent and past training in Diversity, Equity, and Inclusion as a school
administrator. I am currently leading the development of new products to support all students to engage in math,
enjoy math, and achieve in math, which is a gatekeeper to students' future success. This work includes
developing curriculum writers, administrators, teachers, family and community members to recognize the need
for improvements and decrease inequities within the education system.
OC Children's Book Task Force- Board Member
Past member of the HB Allied Arts Board
Friends of the Huntington Beach Library Lifetime member since 1979
Past member of Amigos de Bolsa Chica
President and Board Member Ballet Etudes
I have lived in the city since childhood and I am the daughter of active participants in the growth of the city since
1964. My father, as a city council member, wrote in collaboration with that council, the HB Declaration on
Human Dignity in 1996. I would like to help HB through the current strife and work to engage citizens in honest
dialogue about the strength of a diverse community where all citizens have a voice. My own background in
education and the arts have taught me to facilitate discussions so that participants are respectful and seek
perspective of others. I served on the Allied Arts Board to open the HB Art Center and I was a leader in HB City
School District. I want to continue my family legacy.
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September 16, 2021
Antonio Benitez
Huntington Beach, CA 92647
The Honorable Natalie Moser
The Honorable Rhonda Bolton
City Hall
2000 Main Street
Huntington Beach, CA 92648
Dear Council Member Moser and Council Member Bolton:
I appreciate the opportunity I have been given to serve my community as a member and vice-chair of the
Human Relations Task Force. This letter is to formally express my intention in seeking reappointment for
a second term of the Human Relations Task Force. I look forward to continuing to serve the community!
Thank you.
Very respectfully,
Antonio Benitez
Vice-chair
City of Huntington Beach
Human Relations Task Force
CC: Grace Yoon-Taylor, Staff Liaison, City Manager’s Office
V.C. Rhone, Chairperson, Human Relations Task Force
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City of Huntington Beach
File #:21-721 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Oliver Chi, City Manager
PREPARED BY:Chris Slama, Director of Community & Library Services
Subject:
Adopt Resolution No. 2021-57 approving City Staff to Apply to the State Department of Parks
and Recreation for the Outdoor Equity Grants Program Grant Funds
Statement of Issue:
There is a need to adopt Resolution No. 2021-57 approving staff to apply to the State Department of
Parks and Recreation for the Outdoor Equity Grants Program Grant Funds opportunities for local day
trips, access to environmental educational and skill enhancement programs, and overnight
experiences.
Financial Impact:
The grant program request is not to exceed $700,000 and may cover multiple fiscal years through FY
2025/26. Should the City be awarded the grant, another Request for Council Action (RCA) to accept
the grant award and appropriate the funds will be submitted for City Council approval. No matching
funds are required and all grant expenditures are fully reimbursable.
Recommended Action:
Adopt Resolution No. 2021-57, “A Resolution of the City Council of the City of Huntington Beach
Approving the Application for Outdoor Equity Grants Program Grant Funds .”
Alternative Action(s):
Do not approve the resolution, and direct staff accordingly.
Analysis:
Existing law requires the Division of Off-Highway Motor Vehicle Recreation of the Department of
Parks and Recreation to develop and implement a grant and cooperative agreement program to
support the planning, acquisition, development, maintenance, administration, operation, enforcement,
restoration, and conservation of trails, trailheads, areas, and other facilities associated with the use of
off-highway motor vehicles, and programs involving off-highway motor vehicle safety or education.
Assembly Bill No. 209 requires the Director of Parks and Recreation to establish the Outdoor Equity
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Grants Program to increase the ability of underserved and at-risk populations to participate in outdoor
environmental educational experiences at state parks and other public lands where outdoor
environmental education programs take place. The grant program shall award grants to public
organizations, including local governments and local educational agencies, joint powers authorities,
open-space authorities, regional open-space districts, other relevant public agencies, or nonprofit
organizations, with a focus on funding transportation, logistical, and program operations and capacity
costs associated with reaching historically underserved communities.
City staff is proposing a multi-year program, operating from July 1, 2022 through June 30, 2026. The
program will include opportunities for local day trips, including access to environmental educational
and skill enhancement programs, and as well as overnight experiences with a goal to build in
volunteer and career opportunities at the conclusion. No matching funds are required for this fully
reimbursable grant. Staff will work to develop partnerships to further enhance the program.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Community Engagement
Attachment(s):
1) Resolution No. 2021-57, “A Resolution of the City Council of the city of Huntington Beach
Approving the Application for Outdoor Equity Grants Program Grant Funds.”
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City of Huntington Beach
File #:21-594 MEETING DATE:10/5/2021
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 the execution of Cooperative Agreement C-1-3598 with the Orange
County Transportation Authority (OCTA), the County of Orange and the Cities of Westminster,
Santa Ana and Tustin for a traffic signal synchronization project along Bolsa Avenue
Statement of Issue:
The Orange County Transportation Authority (OCTA) has submitted a Cooperative Agreement to the
City of Huntington Beach for a traffic signal synchronization project along Bolsa Avenue. This
agreement clarifies the roles and responsibilities of the OCTA, the County and the cities with respect
to execution and delivery of the project, which is funded by the OCTA Comprehensive Transportation
Funding Program with a matching fund contribution by the local agencies.
Financial Impact:
The total project cost is $3,789,600 with $216,400 within the City’s portion of Bolsa Avenue. Funds in
the amount of $50,000 are available in the Air Quality Management District (AQMD) fund (account
20190014.82700) for the City’s matching share of the grant. The Orange County Transportation
Authority will manage the project and is responsible for the balance of the project costs.
Recommended Action:
Approve and authorize the Mayor and City Clerk to execute “Cooperative Agreement No. C-1-3598
Between Orange County Transportation Authority and Cities of Huntington Beach, Santa Ana, Tustin,
Westminster and the County of Orange for First Street/Bolsa Avenue Regional Traffic Signal
Synchronization Program Project.”
Alternative Action(s):
Deny approval of the project and forgo eligibility to receive grant funds through the CTFP.
Analysis:
On August 10, 2020, the Orange County Transportation Authority (OCTA) announced a call for
projects for the Competitive Measure M2 Regional Traffic Signal Synchronization Program (RTSSP).
This program provides improvements for inter-jurisdictional traffic signal coordination. These projects
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provide for traffic signal improvements to meet existing needs and to address future demand along
with interjurisdictional traffic signal coordination.
A traffic signal synchronization project along Bolsa Avenue from Bolsa Chica Street in Huntington
Beach to Newport Avenue in Tustin was approved for funding by OCTA. This project will be
managed by OCTA in conjunction with the cities of Huntington Beach, Westminster, Santa Ana,
Tustin and the County of Orange.
The grant amount and the corresponding local matching funds are summarized below:
Project Cost (Entire Project)OCTA Grant (Entire Project)Local Match (City of HB only)
$3,789,600 $3,031,680 $46,452
The total cost of work within the City of Huntington Beach is estimated at $216,400. The total cost of
this project to the City of Huntington Beach is estimated at $50,000 including the local match paid to
OCTA and construction contingencies.
As a first stage, equipment upgrades will be installed in order to improve the operation and
communications along the network, including the installation of new traffic signal controllers and
video detection systems. The second stage of the project will be the development of new
coordinated traffic signal timing, which will reduce stops and delays along the corridor.
Public Works Commission Action:
Not required.
Environmental Status:
No impact with the approval of the agreement. Any California Environmental Quality Act (CEQA) and
environmental analysis will be processed by OCTA.
Strategic Plan Goal:
Infrastructure & Parks
Attachment(s):
1. Cooperative Agreement No. C-1-3598 between Orange County Transportation Authority and
Cities of Huntington Beach, Santa Ana, Tustin, Westminster, and the County of Orange for First
Street/Bolsa Avenue Regional Traffic Signal Synchronization Program Project.
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City of Huntington Beach
File #:21-739 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Oliver Chi, City Manager
PREPARED BY:Brittany Mello, Deputy Director of Administrative Services
Subject:
Approve and authorize execution of three-year Professional Services Contracts for Workers’
Compensation managed care services with Lien on Me, Inc., for Bill Review , and Arissa Cost
Strategies, LLC, for Utilization Review; and authorize a two-year contract extension with
Acclamation Insurance Management Services (AIMS) to serve as the Third-Party
Administrator of the City’s Workers' Compensation Program
Statement of Issue:
The City of Huntington Beach issued a Request for Proposals (RFP) for Managed Care Services in
support of the administration of its self-insured Workers’ Compensation program. Staff recommends
awarding three-year, fixed-fee contracts to the most responsive bidders for each program: Lien on
Me for Medical Bill Review services, and Arissa Cost Strategies for Utilization Review services.
Additionally, staff recommends a two-year contract extension with the City’s current third-party
administrator of Workers’ Compensation program, Acclamation Insurance Management Services
(AIMS).
Financial Impact:
These services will be funded out of the Workers’ Compensation Internal Services Fund (551). The
proposed contract with Lien On Me is for an amount not to exceed $525,000 for a three-year period.
The proposed contract with Arissa Cost Strategies is for an amount not to exceed $300,000 for a
three-year period. For the prior contract period from 2018 - 2021, AIMS provided a three-year flat
rate of $446,691 per year. The proposed two-year contract extension for 2021 - 2023 is for $460,091
per year, a modest 3% increase. The Funds for Fiscal Year (FY) 2021/22 have been included in the
approved budget. No additional appropriation is required.
Recommended Action:
A) Approve and authorize the Mayor and City Clerk to execute, “Professional Services Contract
Between the City of Huntington Beach and Lien on Me, Inc., for Medical Bill Review Services,” in an
amount not to exceed $525,000.00 for the three-year period; and,
B) Approve and authorize the Mayor and City Clerk to execute, “Professional Services Contract
Between the City of Huntington Beach and Arissa Cost Strategies, LLC, for Utilization Review
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Services of City’s Workers’ Compensation Claims,” in an amount not to exceed $300,000.00 for the
three-year period; and,
C) Approve and authorize the Mayor and City Clerk to execute, “Amendment No. 1 to Professional
Services Contract Between the City of Huntington Beach and Acclamation Insurance Management
Services (AIMS) for Workers’ Compensation Third Party Administration,” in an amount not to exceed
$920,182.00 for the two-year period.
Alternative Action(s):
Do not authorize the proposed contracts and direct staff accordingly. This action could result in
delays and increased expenses administering the City’s Workers’ Compensation program until new
contracts are approved.
Analysis:
The City of Huntington Beach is required by law to provide Workers’ Compensation benefits to
employees who are injured or become ill in the course and scope of their employment. In order to
achieve operational efficiencies, the City partners with a third-party administrator to administer its
Workers’ Compensation program. The City also contracts out for ancillary managed care services,
including medical bill review, utilization review, and pharmacy management.
In June 2021, the City of Huntington Beach issued a Request for Proposals (RFP) regarding these
managed care services. The City’s intent via the RFP process was to evaluate and select the best
qualified respondents for each service. The proposals were evaluated and scored against the criteria
listed in the RFP by a panel of subject matter experts, including the City of Huntington Beach Risk
Manager, City of Anaheim Workers’ Compensation Claims Manager, El Monte Union High School
District Director of Risk Management and Safety, Genex Services Managed Care Consultant, and
Director of Medical Services, MSA Settlements. Based on this initial scoring, the panel then
interviewed the nine qualified respondents for Bill Review and seven qualified respondents for
Utilization Review.
Lien on Me received the highest evaluation score for Medical Bill Review services. Lien on Me is the
Bill Review incumbent, and the City has been satisfied with their services. Over the last three years,
their services have resulted in significant cost savings, estimated at $200,000 per year. Additionally,
Lien on Me slightly decreased their pricing to remain competitive. The proposed three-year contract
is estimated at $175,000 per year.
Arissa Cost Strategies received the highest evaluation score for Utilization Review services. Arissa
Cost Strategies is the Utilization Review incumbent, and the City has been satisfied with their
services. Over the past three years, their services have resulted in significant cost savings,
estimated at $69,000 per year. Arissa Cost Strategies also decreased their pricing to remain
competitive. The proposed three-year contract is estimated at $100,000 per year.
On December 17, 2018, the City Council approved a three-year contract with AIMS for third-party
administration of the City’s Workers’ Compensation program in the amount of $1,340,073, following a
competitive RFP process. Staff recommends a two-year contract extension at a flat rate of $460,091
per year to provide claims administration and coordination of the ancillary managed care services, in
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order to achieve cost savings.
Staff recommends the City Council award Professional Services Contracts to Lien On Me and Arissa
Cost Strategies, and extend the contract with AIMS for continued coordination of the City’s Workers’
Compensation program and ancillary services, and authorize the City Manager to execute the
agreements in a form approved by the City Attorney.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Professional Services Contract with Lien on Me, Inc.
2. Professional Services Contract with Arissa Cost Strategies, LLC
3. Amendment No. 1 to the Professional Services Contract with Acclamation Insurance
Management Services (AIMS)
4. Professional Services Contract with AIMS
5. Professional Service Award Analysis
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Bill Review - Proposals Submitted June 2021
Arissa – Kathy Torres, (714)726-4999
Careworks – Robert Weinberger, (949)683-7975
Diamond Bill Review – Pete Stephens, (615)925-0685
EK Health – Keri Wilson, (877)861-1595
Innovative Claim Strategies – Carlos Navarro, (732)425-1066
Lien On Me – Goldie Galstjan, (626)665-6693
Medata – David Neubert, (949)929-3299
Mitchell – Mitch Freeman, (904)476-4821
ProCare RX – Mike McQuilken, (813)951-0922
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Utilization Review - Proposals Submitted June 2021
Arissa – Kathy Torres, (714)726-4999
Careworks – Robert Weinberger, (949)683-7975
EK Health – Keri Wilson, (877)861-1595
Innovative Claim Strategies – Carlos Navarro, (732)425-1066
Medata – David Neubert, (949)929-3299
Mitchell – Mitch Freeman, (904)476-4821
ProCare RX – Mike McQuilken, (813)951-0922
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Att#3 - AIMS Contract Amendment #1
To be released via
Supplemental Communications
Friday, October 1, 2021
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PROFESSIONAL SERVICE AWARD ANALYSIS
SERVICE: Medical Bill Review
SERVICE DESCRIPTION: Cost containment firm specializing in Workers’ Compensation
medical bill review, focused on achieving savings via extensive audits with defined
processes and procedures for bill review activities.
VENDOR: LIEN ON ME
OVERALL RANKING: 1
SUBJECT MATTER EXPERTS/RATERS: 1. City of H.B. Risk Manager 2. City of Anaheim
Workers’ Compensation Claims Manager 3. Risk Manager for El Monte Unified School District 4.
Managed Care Consultant 5. Director of Medical Services, MSA Settlements
I. MINIMUM QUALIFICATIONS REVIEW
Written Proposal Score: 1090
Lien On Me – Minimum Qualifications Review
Criteria
Total Weighted
Score
Maximum
Score
Compliance with RFP 57.50 75
Approach & Methodology 300 375
Qualifications & Experience 287.50 375
Clarity 115 150
Proposed Cost/Pricing 250 375
References 80 150
Total 1090 1500
II. DUE DILIGENCE REVIEW
Interview Ranking: 1
Lien On Me – Summary of Review
Good compliance with RFP, inclusion of licenses and
certifications.
Methodology is thorough/clear, creative approaches to
finding hidden savings, and has state-of-the-art technology
to protect networks and data.
Very qualified, serviced public agencies for over 26 years,
they are the current incumbent.
Value added features include Lien Defense.
Great relationships and good references from City of
Pasadena, Glendale, Orange, Costa Mesa, and Brea.
Lien On Me – Pricing
Competitive bid not to exceed $175,000/per year.
(Pricing was decreased at this renewal from the
previous 3-yr contract (2018 – 2021) pricing by Lien
On Me, therefore we anticipate continued savings).
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PROFESSIONAL SERVICE AWARD ANALYSIS
SERVICE: Utilization Review
SERVICE DESCRIPTION: Provide a Utilization Review process to determine if a
proposed treatment requested for an injured worker is medically necessary.
VENDOR: ARISSA COST STRATEGIES (Workers’ Compensation Utilization Review)
OVERALL RANKING: 1
SUBJECT MATTER EXPERTS/RATERS: 1. City of H.B. Risk Manager 2. City of Anaheim
Workers’ Compensation Claims Manager 3. Risk Manager for El Monte Unified School District 4.
Managed Care Consultant 5. Director of Medical Services, MSA Settlements
I. MINIMUM QUALIFICATIONS REVIEW
Written Proposal Score: 1097.5
Arissa Cost Strategies – Minimum Qualifications Review
Criteria
Total Weighted
Score
Maximum
Score
Compliance with RFP 57.50 75
Approach & Methodology 275 375
Qualifications & Experience 275 375
Clarity 115 150
Proposed Cost/Pricing 300 375
References 80 150
Total 1097.5 1500
II. DUE DILIGENCE REVIEW
Interview Ranking: 1
Arissa Cost Strategies – Summary of Review
Successful compliance with RFP, inclusion of required
URAC accreditation. They are the incumbent.
Methodology is good, - has appropriate technology to
protect networks and data.
Very qualified, serviced public agencies, counties, public
works and school districts for 10 years; management has
over 33 yrs experience.
Value-added features include a powerful technological
software that creates a highly-customizable platform for
utilization review decisions.
Arissa Cost Strategies – Pricing
Competitive - flat rates include $80/Non-Physician
review; $175/Phys; $175/Expert Phys; $85/Medical
Director; (best pricing of 7 bids submitted)
Pricing for this new contract is even lower than their
previous 3-yr contract (2018 – 2021) so we expect
continued savings.
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City of Huntington Beach
File #:21-720 MEETING DATE:10/5/2021
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 adopting Ordinance No. 4235 amending
Section 230.26 (Affordable Housing) of the Zoning and Subdivision Ordinance - Vote: 6-1
(Peterson - No)
Statement of Issue:
Ordinance No. 4235 approved for introduction on September 21, 2021, requires adoption.
Financial Impact:
Not applicable.
Recommended Action:
Adopt 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).
Alternative Action(s):
The City Council may make the following alternative motions:
1. Do not adopt Ordinance No. 4235.
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
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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.
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).
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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)
(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
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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
·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
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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
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 aCity of Huntington Beach Printed on 9/29/2021Page 5 of 7
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·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. 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
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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.
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. City Council Ordinance No. 4235
3. Legislative Draft for Ordinance 4235
4. Resolution No. 2021-50
5. Exhibit A to Resolution 2021-50 - Keyser Marston and Associates Report
6. August 24, 2021 Planning Commission Staff Report
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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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.
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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:
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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
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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:
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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:
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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.
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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.
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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).
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FINANCIAL ANALYSIS: INCLUSIONARY
HOUSING ORDINANCE UPDATE
Prepared for:
City of Huntington Beach
Prepared by:
Keyser Marston Associates, Inc.
May 6, 2020
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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
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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).
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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
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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.
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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.
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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:
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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.
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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.
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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.
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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).
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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)
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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.
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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
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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:
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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
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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.
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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:
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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.
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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.
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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:
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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.
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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:
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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.
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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
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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:
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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.
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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 5308
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 5309
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 5310
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 5311
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 5312
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 17313
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 17314
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 17315
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 17316
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 17317
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 17318
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 17319
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 17320
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 17321
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 17322
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 17323
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 324
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 17325
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 17326
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 17327
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 17328
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 17329
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 20330
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 20331
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 20332
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 20333
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 20334
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 20335
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 20336
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 20337
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 20338
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 20339
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 20340
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 20341
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 20342
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 20343
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 20344
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 20345
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 20346
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 20347
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 20348
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 20349
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
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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
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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,
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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
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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
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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
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·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.
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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
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City of Huntington Beach
File #:21-715 MEETING DATE:10/5/2021
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 adoption of Resolution No. 2021-56 approving an Annual Assessment
within the Huntington Beach Downtown Business Improvement District for Fiscal Year 2021-2022,
and authorize appropriation of fund
Statement of Issue:
On September 7, 2021, the City Council adopted Resolution No. 2021-42, declaring its intention to
levy an annual assessment for the Huntington Beach Downtown Business Improvement District, and
authorized the City Clerk to schedule a public hearing for October 5, 2021. The City Council is now
requested to conduct that public hearing and consider adopting Resolution No. 2021-56 to approve
the assessment for Fiscal Year (FY) 2021-2022.
Recommended Action:
A) Conduct the Public Hearing; and,
B) If written protests of at least 50% are not received, adopt Resolution No. 2021-56, “A
Resolution of the City Council of the City of Huntington Beach Approving an Annual Assessment
within the Huntington Beach Downtown Business Improvement District for Fiscal Year 2021-2022”;
and,
C) Appropriate an additional $16,000 for a total of $106,000 into fund 710 for FY 2021-2022.
Alternative Action(s):
1) Modify elements of the Annual Report, such as the proposed assessments, activities and/or
improvements to be funded, district boundaries, categories of assessments, or benefit zones and
amend the Resolution; or
2) Do no approve the resolution if written protests of at least 50% are received.
Analysis:
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Background
In September 2004, the City Council approved Ordinance No. 3661, establishing the Huntington
Beach Downtown Business Improvement District (the “District”) to fund promotional activities
benefiting all businesses within the boundary area. In addition, pursuant to State Law, the City
Council appointed an Advisory Board for the District. The purpose of the Advisory Board is to make
recommendations to the City Council regarding the expenditure of revenues derived from the
assessments, the classifications of businesses, and the method of levying the assessments. The
Advisory Board’s recommendations are then considered by the City Council at a noticed public
meeting and approved or modified by the City Council.
In 2008, the City Council adopted Ordinance No. 3797, amending Ordinance No. 3661, to change
how the Advisory Board was selected and subsequently approved Resolution No. 2008-04 appointing
a non-profit corporation known as the Huntington Beach Downtown Business Improvement District
(HBDBID) to act as the Advisory Board for the District. The HBDBID is a private, 501c(6) business
based organization focused on creating a thriving downtown by providing consumer marketing,
events, security, cleanliness, beautification, and member engagement.
Annual Report and Proposed Budget
While the economy continues to adjust from the COVID-19 pandemic, downtown remains well-
positioned to recover from the adverse impacts of reduced tourism, loss of business conventions,
cancelation of weekly and signature events, and periodic disruption from civil unrest. The past year
has been difficult on businesses that were forced to close temporarily, alter their business model,
experienced staffing shortages, or were dependent on traffic from popular events that were put on
hold. Despite these challenges, the nearby beach remained a local and regional destination, with
diners patronizing expanded outdoor dining areas and business owners pivoting operations to attract
new sales.
In light of the pandemic, the HBDBID has taken steps to improve operations and develop programs
and events that support downtown businesses. Although assessments collected were less than
projected and Surf City Nights, a major revenue generator, was canceled throughout most of FY
2020-2021, the HBDBID was awarded COVID-19 related stimulus funding which helped to offset the
decline in revenue. The HBDBID communicates regularly with businesses and actively identifies
ways to stimulate commercial activity in partnership with the City, Visit Huntington Beach (VHB), and
the Chamber of Commerce. Improved marketing efforts have helped to promote the downtown area
and include the increase of social media exposure via Facebook and Instagram, and partnerships on
local campaigns such as the OneHB Clean & Safe Pledge, 12 Blocks of Cheer, and Show your HB
Love. For additional information, a copy of the FY 2020-2021 Annual Report is attached which
provides an overview of the past year.
Other notable achievements include enhancements to safety and cleanliness with the re-introduction
of the Ambassadors Security Program and a re-evaluation of maintenance services. The
Ambassadors Security Program has played an instrumental role in the safety of downtown and will
continue, in partnership with VHB, to work with business owners, patrons, residents, and the City’s
Police Department to address safety-related issues by observing and reporting situations concerning
well-being and safety within downtown. Maintenance operations, with funds administered through the
City’s Public Works Department for the maintenance agreement, saw an increase in takeout trash
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City’s Public Works Department for the maintenance agreement, saw an increase in takeout trash
which prompted a reevaluation of power washing and daily porter services. The City and the HBDBID
recently collaborated on a Request for Qualifications with the objective of expanding the footprint of
cleaning services while also focusing on the most heavily trafficked areas.
Looking ahead, the FY 2021-2022 Annual Report outlines opportunities that will be explored to
provide a cleaner, safer, and more pedestrian-friendly downtown by incorporating lessons learned
from COVID-19. In addition to enhanced maintenance and safety measures, other efforts to increase
economic vitality include rebranding, new off-peak events, expanded social media engagements,
redesign of the website, and improved membership services through marketing, communications,
and programming. The return of successful holiday events such as Halloween and Miracle on Main
Street and new events like Surf City Movie Nights will help to increase foot traffic and consumer
spending throughout downtown.
In 2017, a revised Reserves Operating Policy established guidelines for how resources can be used
to benefit downtown businesses and included a suggestion to maintain one year of operating
expenses.As of June 30, 2021, there is a reserve of $160,733.80 (reflected on the Statement of
Financials in the Annual Report) which includes $100,000 in Economic Injury Disaster Loan (EIDL)
funds which helped compensate revenue losses associated with COVID-19. The HBDBID received a
total of $150,000 in EIDL funds and the remaining $50,000 was used to cover operating costs this
past year.
The proposed FY 2021-2022 budget will increase slightly from the previous year from $538,930 to
$549,330 due to increased revenue from new and returning events and grant funding. While
projected annual BID assessment revenue is only 19% of the total budget, recurring event revenue
from Surf City Nights continues to be robust at 33% of the budget, even with a reduction in vendors
resulting from the expansion of outdoor dining. Assessments are projected to be less than 100%
collection based on past years’ receipts. Integrating the annual business license and the BID
assessment fees into one invoice will assist with monthly revenue collections. For this reason, the
projected assessment revenue is higher than actual FY 2020-2021 collections but lower than what
was budgeted for FY 2020-2021. Changes to expenses can be attributed to marketing and events,
repayment of the EIDL, and other minor program modifications. The proposed budget for FY 2021-
2022 is summarized below, and includes variances from last year’s approved budget, as well as the
operations and revenues of Surf City Nights and the maintenance agreement, which previously
operated under its own budget.
INCOME:FY 2020-2021
(APPROVED BUDGET)
FY 2021-2022 (PROPOSED)VARIANCE
City of HB Maintenance $188,430 $188,430 $0
BID Assessments $124,000 $106,000 ($18,000)
Surf City Nights $152,500 $182,400 $29,900
Surf City Days $0 $15,000 $15,000
Summer Kickoff Event $0 $10,000 $10,000
Chili at the Beach $25,000 $10,000 ($15,000)
Surf City Movie Nights $0 $17,500 $17,500
Families Forward Program $11,000 $0 ($11,000)
Main St. Outdoor Program $3,000 $0 ($3,000)
Halloween $0 $5,000 $5,000
City of HB Grant $0 $10,000 $10,000
Miracle on Main $5,000 $5,000 $0
Transfer from Reserves $30,000 $0 ($30,000)
TOTAL INCOME:$538,930 $549,330 $10,400
EXPENSES:
Maintenance $176,430 $176,430 $0
Marketing/Advertising $16,500 $10,900 ($5,600)
Ambassador $36,000 $40,200 $4,200
Office Expenses $3,000 $1,200 ($1,800)
Bank Charges $1,200 $1,200 $0
Dues & Subscriptions $3,000 $3,000 $0
Insurance $1,900 $1,900 $0
Accounting $6,950 $7,350 $400
License & Fees $2,000 $2,000 $0
Repairs & Maintenance $500 $500 $0
Rent & Storage $14,900 $14,600 ($300)
Telephone/Internet $2,200 $2,220 $20
Meeting/Training $1,650 $800 ($850)
Board of Directors Election $0 $2,000 $2,000
EIDL Repayment $0 $7,668 $7,668
PAYROLL:
Executive Director $100,000 $100,000 $0
Events Coordinator/Mngr.$48,000 $63,600 $15,600
Admin. Asst.$15,600 $0 ($15,600)
Payroll Taxes $2,000 $0 ($2,000)
Workers Comp.$1,250 $0 ($1,250)
Payroll Expenses $1,700 $225 ($1,475)
Security $0 $0 $0
BID EVENTS:
SCN Rental & Set-up $22,500 $12,000 ($10,500)
SCN Street Cleaning $2,400 $6,000 $3,600
SCN Closure $3,700 $6,000 $2,300
SCN Parking $6,900 $2,400 ($4,500)
SCN Miscellaneous $4,500 $6,000 $1,500
SCN Quickbooks $9,000 $3,648 ($5,352)
BID Event Misc.$0 $7,989 $7,989
Summer Kickoff Event $0 $10,000 $10,000
Chili at the Beach $15,000 $10,000 ($5,000)
Surf City Days $0 $5,000 $5,000
Surf City Movie Nights $0 $4,500 $4,500
Air Show $0 $0 $0
Halloween $5,150 $10,000 $4,850
Miracle on Main $10,000 $10,000 $0
Holiday Beautification $25,000 $20,000 ($5,000)
TOTAL EXPENSES:$538,930 $549,330 $10,400
CASH RESERVES $150,706.89 $160,733.80 $10,026.91
City of Huntington Beach Printed on 9/29/2021Page 3 of 6
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File #:21-715 MEETING DATE:10/5/2021
INCOME:FY 2020-2021(APPROVED BUDGET)FY 2021-2022 (PROPOSED)VARIANCECity of HB Maintenance $188,430 $188,430 $0BID Assessments $124,000 $106,000 ($18,000)Surf City Nights $152,500 $182,400 $29,900
Surf City Days $0 $15,000 $15,000
Summer Kickoff Event $0 $10,000 $10,000
Chili at the Beach $25,000 $10,000 ($15,000)
Surf City Movie Nights $0 $17,500 $17,500
Families Forward Program $11,000 $0 ($11,000)
Main St. Outdoor Program $3,000 $0 ($3,000)
Halloween $0 $5,000 $5,000
City of HB Grant $0 $10,000 $10,000
Miracle on Main $5,000 $5,000 $0
Transfer from Reserves $30,000 $0 ($30,000)
TOTAL INCOME:$538,930 $549,330 $10,400
EXPENSES:
Maintenance $176,430 $176,430 $0
Marketing/Advertising $16,500 $10,900 ($5,600)
Ambassador $36,000 $40,200 $4,200
Office Expenses $3,000 $1,200 ($1,800)
Bank Charges $1,200 $1,200 $0
Dues & Subscriptions $3,000 $3,000 $0
Insurance $1,900 $1,900 $0
Accounting $6,950 $7,350 $400
License & Fees $2,000 $2,000 $0
Repairs & Maintenance $500 $500 $0
Rent & Storage $14,900 $14,600 ($300)
Telephone/Internet $2,200 $2,220 $20
Meeting/Training $1,650 $800 ($850)
Board of Directors Election $0 $2,000 $2,000
EIDL Repayment $0 $7,668 $7,668
PAYROLL:
Executive Director $100,000 $100,000 $0
Events Coordinator/Mngr.$48,000 $63,600 $15,600
Admin. Asst.$15,600 $0 ($15,600)
Payroll Taxes $2,000 $0 ($2,000)
Workers Comp.$1,250 $0 ($1,250)
Payroll Expenses $1,700 $225 ($1,475)
Security $0 $0 $0
BID EVENTS:
SCN Rental & Set-up $22,500 $12,000 ($10,500)
SCN Street Cleaning $2,400 $6,000 $3,600
SCN Closure $3,700 $6,000 $2,300
SCN Parking $6,900 $2,400 ($4,500)
SCN Miscellaneous $4,500 $6,000 $1,500
SCN Quickbooks $9,000 $3,648 ($5,352)
BID Event Misc.$0 $7,989 $7,989
Summer Kickoff Event $0 $10,000 $10,000
Chili at the Beach $15,000 $10,000 ($5,000)
Surf City Days $0 $5,000 $5,000
Surf City Movie Nights $0 $4,500 $4,500
Air Show $0 $0 $0
Halloween $5,150 $10,000 $4,850
Miracle on Main $10,000 $10,000 $0
Holiday Beautification $25,000 $20,000 ($5,000)
TOTAL EXPENSES:$538,930 $549,330 $10,400
CASH RESERVES $150,706.89 $160,733.80 $10,026.91
City of Huntington Beach Printed on 9/29/2021Page 4 of 6
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File #:21-715 MEETING DATE:10/5/2021
INCOME:FY 2020-2021(APPROVED BUDGET)FY 2021-2022 (PROPOSED)VARIANCECity of HB Maintenance $188,430 $188,430 $0BID Assessments $124,000 $106,000 ($18,000)Surf City Nights $152,500 $182,400 $29,900Surf City Days $0 $15,000 $15,000Summer Kickoff Event $0 $10,000 $10,000Chili at the Beach $25,000 $10,000 ($15,000)Surf City Movie Nights $0 $17,500 $17,500Families Forward Program $11,000 $0 ($11,000)Main St. Outdoor Program $3,000 $0 ($3,000)Halloween $0 $5,000 $5,000City of HB Grant $0 $10,000 $10,000Miracle on Main $5,000 $5,000 $0Transfer from Reserves $30,000 $0 ($30,000)TOTAL INCOME:$538,930 $549,330 $10,400EXPENSES:Maintenance $176,430 $176,430 $0Marketing/Advertising $16,500 $10,900 ($5,600)Ambassador $36,000 $40,200 $4,200Office Expenses $3,000 $1,200 ($1,800)Bank Charges $1,200 $1,200 $0Dues & Subscriptions $3,000 $3,000 $0Insurance$1,900 $1,900 $0Accounting$6,950 $7,350 $400License & Fees $2,000 $2,000 $0Repairs & Maintenance $500 $500 $0Rent & Storage $14,900 $14,600 ($300)Telephone/Internet $2,200 $2,220 $20Meeting/Training $1,650 $800 ($850)Board of Directors Election $0 $2,000 $2,000EIDL Repayment $0 $7,668 $7,668PAYROLL:Executive Director $100,000 $100,000 $0Events Coordinator/Mngr.$48,000 $63,600 $15,600Admin. Asst.$15,600 $0 ($15,600)Payroll Taxes $2,000 $0 ($2,000)Workers Comp.$1,250 $0 ($1,250)Payroll Expenses $1,700 $225 ($1,475)Security $0 $0 $0BID EVENTS:SCN Rental & Set-up $22,500 $12,000 ($10,500)SCN Street Cleaning $2,400 $6,000 $3,600SCN Closure $3,700 $6,000 $2,300SCN Parking $6,900 $2,400 ($4,500)
SCN Miscellaneous $4,500 $6,000 $1,500
SCN Quickbooks $9,000 $3,648 ($5,352)
BID Event Misc.$0 $7,989 $7,989
Summer Kickoff Event $0 $10,000 $10,000
Chili at the Beach $15,000 $10,000 ($5,000)
Surf City Days $0 $5,000 $5,000
Surf City Movie Nights $0 $4,500 $4,500
Air Show $0 $0 $0
Halloween $5,150 $10,000 $4,850
Miracle on Main $10,000 $10,000 $0
Holiday Beautification $25,000 $20,000 ($5,000)
TOTAL EXPENSES:$538,930 $549,330 $10,400
CASH RESERVES $150,706.89 $160,733.80 $10,026.91
District Renewal
Funding recommendations to the City Council are made by a ten (10) member (nine voting members,
one non-voting member) Advisory Board, which is elected annually by assessed members. State
Law requires that improvements and activities funded by assessments benefit businesses located
within the District. Downtown businesses are assessed based on their size, location, and business
type. Assessments range from $40 to $1,404 per annum. For FY 2021-2022, there are no changes
to the boundary map or the assessment formula (Exhibit B) which was last amended in FY 2018-
2019.
Per State law, business owners within the District may submit a written protest of the proposed
assessment being considered by the City Council. Any protests received will be weighted by the
assessment to be paid by those businesses. If businesses representing a majority of the assessment
do not want to the District to continue (weighted by the total value of the assessments, not by the
number of protests received), the City Council cannot levy the assessment for one year. If there is no
weighted majority against the assessment, the District will continue.
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. Resolution No. 2021-56, “A Resolution of the City Council of the City of Huntington Beach
Approving an Annual Assessment within the Huntington Beach Downtown Business
Improvement District for Fiscal Year 2021-2022”
2. Exhibit A - Huntington Beach Downtown Business Improvement District FY 2020-2021 and FY
2021-2022 Annual Reports
3. Exhibit B - Boundary Map, List of Businesses to be Assessed for FY 2021-2022, and
City of Huntington Beach Printed on 9/29/2021Page 5 of 6
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File #:21-715 MEETING DATE:10/5/2021
Assessment Schedule for FY 2021-2022
4. Types of improvements and activities proposed to be funded
City of Huntington Beach Printed on 9/29/2021Page 6 of 6
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383
October 5,
384
HBDBID
ANNUAL REPORT
HUNTINGTON BEACH
DOWNTOWN
BUSINESS
IMPROVEMENT
DISTRICT
2020-2021
ALONE, WE CAN DO SO
LITTLE; TOGETHER, WE
CAN DO SO MUCH
HELEN KELLER
385
President:
Dave Shenkman, The Kite Connection
Vice President:
Stuart Goldberg, INNOCEAN USA
Secretary:
Kelly Miller, Visit Huntington Beach
Treasurer:
Mike Williams, The Longboard
Restaurant & Pub
EXECUTIVE BOARD:
DIRECTORS:
STAFF:
Executive Director: Sarah Kruer
Marketing Manager: Jaime Strong
Office Admin: Jaime Strong
Danny Othman, 602 Coffee
Janice Tugaoen. Kimpton Shorebreak
Resort
Jim Hall, Surf City Ale House
Mary Eikenbary, Sandy’s Beach Shack
Sandra Schulz-Taylor, Model Citizen
386
Founded in 2004, the HBDBID is a
private non-profit 501c6 business-based
organization, which is an all-inclusive
collaborative advocate for the entire
growing downtown region. We provide
clearly defined value and benefits to our
community and stakeholders.
ABOUT:
WHAT WE DO
Create a thriving Downtown business
district that delivers on the Surf City
USA brand and attracts a quality
clientele year-round. In addition to
consumer marketing, events, and
member communications, the BID
provides capital services to benefit
Downtown in conjunction with
the City:
Security
Cleanliness
Signage
Beautification
387
To be a sustainable catalyst for a thriving
and livable downtown, nationally
recognized for its diverse local
businesses and authentic, unique
culture. Known for being welcoming,
accessible, clean, safe, fun, and
environmentally conscious.
VISION:
MISSION:
VALUES:
Communication: Education and Service
Representative: The advocate voice for
all in our community
Integrity: Transparency, Honesty, and
Respect
Strategic Results: Sustainable, ROI
Focused, and Efficient
Passion: Positivity and Unified in Cause
To be the advocate voice for our
coastal downtown community
creating economic vitality and the
premier entertainment destination.
388
The Huntington Beach Downtown Business Improvement District exists to contribute to
the continued economic growth of Downtown Huntington Beach, as well as the quality
of the overall experience for both visitors and locals. These objectives are achieved
through a combination of stakeholder communications, business and civic
collaboration, positive marketing and promotions, event programming, safety,
cleanliness and member engagement.
The challenges brought on by COVID-19 continued through the end of 2020, spiking
with an increase in cases and a second stay-at-home order during the holidays. Dining,
previously limited to outdoor, was restricted to takeout only. Retail occupancy shrunk to
20%, posing a steep challenge during December. Offices continued with remote work
plans for their employees. Rallies continued periodically at Pier Plaza, causing further
disruption to businesses.
Despite all these factors, 2021 dawned with a sense of resilience and optimism as cases
began to decline and restrictions were slowly lifted. Gorgeous weather compelled locals
and regional visitors to enjoy Surf City’s 10 miles of coastline, biking and jogging paths.
Outdoor dining patios were full (as were the adjacent trash cans) as local residents
patronized Downtown’s vibrant retail and restaurant scene. Savvy operators had
continued to pivot throughout the preceding months and many (though not all) found
themselves well-positioned for recovery with an ample number of economic programs
including EIDL and PPP loans providing essential support. While vacancies plagued
other destinations, Downtown HB was fortunate to have very few businesses close
during the pandemic. Overall BID membership declined from 272 to 263 between 2020
and 2021. However, Downtown has seen a positive trend towards new businesses
entering the district including restaurants like Jay Bird’s and Mahkin and retail like
SMKFLWR. Surf City Nights returned with great fanfare on March 16, 2021 and has
continued to safely attract hundreds of visitors Downtown every Tuesday night.
Looking ahead, there are significant opportunities to transform the positive lessons from
COVID into lasting aspects of the Downtown experience including an emphasis on
cleanliness and safety, an increase in outdoor dining and pedestrian areas, attracting
locals and families throughout the year with signature events, and consistently
providing an authentic, quality Surf City USA experience to visitors in collaboration with
the hotels.
389
SECURITY
AMBASSADORS
The Ambassadors Security program through 12”0”27 Protective Services, aka Big
Tony, officially started in 2017 after a pilot program in 2016 and continues to be
vital to the weekend safety of Downtown HB. VHB and the BID continue to fund
the Ambassadors though adjustments were made to accommodate reduced
budgets including a 3-man team instead of the recommended 4-man team
through the fall of 2020 and spring of 2021. A 4-man team will return Downtown
every Friday, Saturday, and Sunday in 8-hour shifts from July 1st through the first
weekend of October. After that they are projected to be on duty two weekends
per month based on budgetary constraints.
The purpose of the Ambassadors is to establish a rapport and presence with
business owners, patrons, and residents of Huntington Beach in the Downtown
area. The Ambassadors are not police officers. Their role is to observe and report
situations concerning the well-being and safety within the surrounding area.
They support the HBPD as needed and within their legal abilities under the law.
Their goal is to ensure that all visitors to Downtown HB enjoy themselves and are
provided with the safest environment possible.
HBPD COMMUNICATIONS
The BID appreciates a positive, collaborative relationship with the HBPD.
Challenges associated with COVID and weekend rallies only served to increase
the value of open, direct communication between organizations to ensure the
safety of Downtown HB.
In June 2021, the BID, VHB, and HBPD created an informal Downtown
Communications Workgroup to foster proactive collaboration and processes
between the three organizations.
390
MAINTENANCE &
BEAUTIFICATION
COVID placed a spotlight on the importance of cleanliness. Power washing
and daily porter service are essential to the maintenance of Downtown HB,
which is a very active destination throughout the year. MALCO continued to
do an excellent job providing power washing and porter services during the
pandemic.
During the mandate for restaurant takeout-only during the winter of COVID
made trash collection and frequency even more vital to Downtown HB.
While January is typically an off-peak month, mild weather and a dramatic
increase in takeout trash prompted the BID and the City of HB to
re-evaluate trash collection services, quickly shifting back to an on-peak
collection schedule months ahead of time.
The BID and the City of HB collaborated on a new RFQ for power washing
and porter services in May with the goal of awarding a new contract by
August 2021. The objective of the RFQ is to expand the footprint of cleaning
services across a larger space while also strategically increasing power
washing in the most heavily trafficked areas.
391
TOURISM
VISIT HUNTINGTONBEACH
Tourism plays a key role in Huntington Beach’s current and long-term
economic prosperity and helps generate more business opportunities for
Downtown. The decline in travel due to COVID-19 devastated the U.S.
economy with a shocking impact of nearly $500 billion lost in travel
spending – a decrease of 36% domestically and 79% internationally since
the beginning of March 2020*. To encourage support for local HB
businesses, the Downtown BID partnered with Visit Huntington Beach on
local campaigns throughout 2020-2021 such as the OneHB Clean & Safe
Pledge, “Masks Up, Surf City,”12 Blocks of Cheer and Show Your HB Love. As
the vaccination rollout continues and infection rates are falling, Huntington
Beach is well positioned to welcome visitors safely and has seen significant
improvements in occupancy rates with weekends approaching pre-
pandemic levels. The return of Huntington Beach’s signature events and
reopening of Southern California theme parks and attractions has brought
strong visitation numbers to the destination. With travel momentum
building and pent-up demand generating bookings, Visit Huntington Beach
will continue to market and sell the Surf City USA brand experience to
extend the length of overnight stays, rebuild workforce and increase visitor
spending.
* Source: U.S. Travel Association
392
BID MEMBER OVERVIEW
AND ZONE ANALYSIS
THERE ARE CURRENTLY 261 ACTIVE
BUSINESSES IN THE
DOWNTOWN BID IN ZONE 1 AND 2.
393
BID ASSESSMENT CHART
394
Of the 162 businesses in Zone 1,103 - or 64% - are either a
restaurant or retail establishment and they are almost evenly
represented. Together, restaurants and retailers generate 86%
of BID assessment fees in Zone 1. At 44, Offices/ Services
represent the third largest category of business in Zone 1,
indicating a vibrant mix of social and professional operations
within the area. Employees returning to their offices after
COVID will have a positive impact on Downtown as this
audience contributes to meaningful dining and shopping
revenue during the week.
ZONE 1 ANALYSIS
395
Of the 99 businesses in Zone 2, 54 - or 55% - are either a
restaurant or retail establishment with the majority being retail
at 45. Together, restaurants and retailers generate 68% of BID
assessment fees in Zone 2. At 37, Offices/ Services represent the
second largest category of businesses in Zone 2, indicating a
shift to retail and professional operations within the area which
is in easy walking distance from all areas of Downtown.
ZONE 2 ANALYSIS
396
There are no changes from the 2018-2019 Assessment
Formula.
Assessments are paid annually as a mandatory
requirement to receive and/or renew a business license for
organizations operating within the Business Improvement
District.
Assessment excluded for apartments, real estate agents,
non-profits, home-based businesses and temporary
vendors.
Business and non-profit organizations outside the area may
join with the approval of the BID Board by paying the
equivalent fee annually.
Non-profit organizations within the BID Assessment Zone
can voluntarily participate by paying $30 to the HB
Downtown BID directly.
Outside of Zones 1 and 2, two hotels, the Hyatt Regency
Huntington Beach Resort & Spa and The Waterfront Beach
Resort, a Hilton Hotel, both elected to voluntarily rejoin the BID
in January 2021.
NEW BID MEMBERS:
Jay Bird’s: Nashville Hot Chicken, Mahkin (Opening Date July
2021), Diane’s Bikinis (New Owners), Aloha Grill (New Owners),
Haus of Bunnies (Opening 2021), Hidden Beauty OC, SMKFLWR
BID MEMBERSHIP
397
ASSESSMENTS
As of June 30th, the BID had collected 55% of projected annual
assessments. The City completed a much-anticipated integration of the
annual business license fee and BID assessment fees into one invoice in May
2021. The BID anticipates this will help with monthly assessment collections
bringing the total closer to the annual projected amount.
FINANCIALS
EIDL LOAN
In late October 2020, the BID applied for an EIDL loan, which was awarded
in the amount of $150,000 on Dec. 31, 2020. $50,000 was placed in the
BID’s Main Account for use as operating capital. $100,000 was placed in the
Reserve account to meet min. funding requirements. On June 19th, the BID
began the process of requesting approx. $45,300 in additional EIDL funds.
CITY OF HB COVID GRANT
On May 24th, the BID applied for a COVID-19 Relief Grant through the City
of Huntington Beach. The BID received confirmation that it would receive
an award of $10,000 on June 14th. The funds will be placed in the BID’s
Main account to use for marketing and operating expenses for the 2021-
2022 fiscal year.398
Huntington Beach Downtown Business Improvement District
Statement of Financial Position
As of June 30, 2021
Cash Basis Monday, July 12, 2021 04:52 PM GMT-07:00 1/1
TOTAL
ASSETS
Current Assets
Bank Accounts
1020 First Bank - Main Acct 1,274.11
1030 First Bank - MM 160,733.80
1040 First Bank - Malco 25,692.16
Total Bank Accounts $187,700.07
Other Current Assets
1330 Prepaid Rent 500.00
Undeposited Funds 0.00
Total Other Current Assets $500.00
Total Current Assets $188,200.07
Fixed Assets
1640 Machinery & Equipment 11,651.68
1660 Office Equipment 538.74
1670 Computers 1,306.31
1700 Accumulated Depreciation -13,496.73
Total Fixed Assets $0.00
TOTAL ASSETS $188,200.07
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
2080 Payroll Clearing -185.08
2100 Payroll Tax Payable -853.29
Total Other Current Liabilities $ -1,038.37
Total Current Liabilities $ -1,038.37
Long-Term Liabilities
2400 Notes Payable - SBA EIDL 150,000.00
Total Long-Term Liabilities $150,000.00
Total Liabilities $148,961.63
Equity
3100 Unrestricted Net Assets 122,544.38
Retained Earnings 0.00
Net Revenue -83,305.94
Total Equity $39,238.44
TOTAL LIABILITIES AND EQUITY $188,200.07
399
Huntington Beach Downtown Business Improvement District
Budget vs. Actuals: 2020-2021 Budget - FY21 P&L
October 2020 - June 2021
Cash Basis Monday, July 12, 2021 04:57 PM GMT-07:00 1/2
TOTAL
ACTUAL BUDGET OVER BUDGET % OF BUDGET
Revenue
4050 BID Assessments 53,757.00 98,000.00 -44,243.00 54.85 %
4100 Chili at the Beach 25,000.00 -25,000.00
4300 Surf City Nights 92,177.40 87,500.00 4,677.40 105.35 %
4400 Surf City Days -10,000.00 -10,000.00
4500 Miracle on Main 5,000.00 -5,000.00
4600 Main St. Outdoors 3,000.00 -3,000.00
4650 Families Forward 11,000.00 -11,000.00
4800 City of HB Maintenance 128,276.00 133,578.00 -5,302.00 96.03 %
Unapplied Cash Payment Revenue 0.00 0.00
Total Revenue $264,210.40 $363,078.00 $ -98,867.60 72.77 %
Cost of Goods Sold
5100 Rental & Setup 7,583.00 15,000.00 -7,417.00 50.55 %
5150 Parking 561.00 4,500.00 -3,939.00 12.47 %
5200 Street Cleaning 1,600.00 -1,600.00
5250 Street Closure 2,400.00 -2,400.00
5300 Event Expenses 1,853.30 20,150.00 -18,296.70 9.20 %
5330 Entertainment 143.12 143.12
Total 5300 Event Expenses 1,996.42 20,150.00 -18,153.58 9.91 %
5500 Miscellaneous 3,000.00 -3,000.00
5600 Holiday Beautification 15,105.00 35,000.00 -19,895.00 43.16 %
5800 Malco Maintenance 107,169.00 124,578.00 -17,409.00 86.03 %
Total Cost of Goods Sold $132,414.42 $206,228.00 $ -73,813.58 64.21 %
GROSS PROFIT $131,795.98 $156,850.00 $ -25,054.02 84.03 %
Expenditures
7010 Advertising & Marketing 2,321.75 12,000.00 -9,678.25 19.35 %
7050 Bank Charges & Fees 462.81 6,900.00 -6,437.19 6.71 %
7070 Consultants 119,516.00 110,997.00 8,519.00 107.67 %
7100 Dues & subscriptions 290.00 2,250.00 -1,960.00 12.89 %
7150 Insurance 3,115.56 1,900.00 1,215.56 163.98 %
7155 Workers Comp Insurance 201.00 1,100.00 -899.00 18.27 %
Total 7150 Insurance 3,316.56 3,000.00 316.56 110.55 %
7170 Legal & Accounting Services 4,955.00 5,450.00 -495.00 90.92 %
7190 Meeting & Training 477.61 1,200.00 -722.39 39.80 %
7191 Election 1,726.44 1,726.44
7200 Miscellaneous Expense 8.38 8.38
7210 Office Supplies 1,874.43 2,250.00 -375.57 83.31 %
7240 Payroll Expenses
7242 Wages - Administrative Assistant 6,984.67 11,700.00 -4,715.33 59.70 %
7250 Payroll Taxes 578.89 1,490.00 -911.11 38.85 %
7255 Payroll Processing Fees 968.91 1,250.00 -281.09 77.51 %
Total 7240 Payroll Expenses 8,532.47 14,440.00 -5,907.53 59.09 %
400
Huntington Beach Downtown Business Improvement District
Budget vs. Actuals: 2020-2021 Budget - FY21 P&L
October 2020 - June 2021
Cash Basis Monday, July 12, 2021 04:57 PM GMT-07:00 2/2
TOTAL
ACTUAL BUDGET OVER BUDGET % OF BUDGET
7280 Postage 93.50 93.50
7290 Rent & Lease 11,700.00 12,200.00 -500.00 95.90 %
7300 Repairs & Maintenance 50.00 360.00 -310.00 13.89 %
7310 Security
7315 Ambassador Program 55,323.47 24,000.00 31,323.47 230.51 %
Total 7310 Security 55,323.47 24,000.00 31,323.47 230.51 %
7320 Taxes & Licenses 869.00 1,400.00 -531.00 62.07 %
7330 Telephone 1,707.32 1,645.00 62.32 103.79 %
QuickBooks Payments Fees 1,891.43 1,891.43
Total Expenditures $215,116.17 $198,092.00 $17,024.17 108.59 %
NET OPERATING REVENUE $ -83,320.19 $ -41,242.00 $ -42,078.19 202.03 %
Other Revenue
8000 Interest Earned 14.25 14.25
Total Other Revenue $14.25 $0.00 $14.25 0.00%
NET OTHER REVENUE $14.25 $0.00 $14.25 0.00%
NET REVENUE $ -83,305.94 $ -41,242.00 $ -42,063.94 201.99 %
401
BUSINESS IMPROVEMENT DISTRICT
INCOME:OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP YEARLY TOTALS
City of HB Maintenance $18,634.00 $11,864.00 $11,864.00 $11,040.00 $9,690.00 $17,284.00 $18,634.00 $17,284.00 $17,284.00 $18,634.00 $18,109.00 $18,109.00 $188,430.00
BID Assessments $6,000.00 $15,000.00 $9,000.00 $11,000.00 $10,000.00 $12,000.00 $10,000.00 $13,000.00 $12,000.00 $10,000.00 $8,000.00 $8,000.00 $124,000.00
Surf City Nights $12,000.00 $12,000.00 $13,500.00 $14,000.00 $14,000.00 $22,000.00 $22,000.00 $22,000.00 $21,000.00 $152,500.00
Surf City Days $0.00
Chili at the Beach $25,000.00 $25,000.00
Families Forward Program $2,500.00 $2,500.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $0.00 $0.00 $0.00 $0.00 $11,000.00
Main St. Outdoor Program $1,000.00 $1,000.00 $1,000.00 $3,000.00
Destination Downtown $0.00
Halloween $0.00
Miracle on Main $5,000.00 $5,000.00
Transfer From Reserves $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $30,000.00
Monthly Totals $30,634.00 $37,864.00 $25,364.00 $37,540.00 $35,190.00 $46,284.00 $46,134.00 $47,784.00 $78,784.00 $53,134.00 $50,609.00 $49,609.00 538,930.00
$23,000.00
EXPENSE:OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP YEARLY TOTALS
Malco Maintenance $17,634.00 $10,864.00 $10,864.00 $10,040.00 $8,690.00 $16,284.00 $17,634.00 $16,284.00 $16,284.00 $17,634.00 $17,109.00 $17,109.00 $176,430.00
Market/Advertising $1,000.00 $1,000.00 $1,000.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 $1,500.00 $16,500.00
Ambassador $0.00 $0.00 $0.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $36,000.00
Office Expense $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $3,000.00
Bank Charges $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $1,200.00
Dues & Subscriptions $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $3,000.00
Insurance $600.00 $1,300.00 $1,900.00
Accounting $500.00 $500.00 $500.00 $500.00 $850.00 $1,100.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $6,950.00
License & Fees $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $200.00 $200.00 $200.00 $200.00 $2,000.00
Meeting/Training $100.00 $100.00 $100.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $1,650.00
Exec. Dir.$8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,337.00 $100,000.00
Events Manager $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $48,000.00
Admin Asst $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $1,300.00 $15,600.00
Payroll Taxes $160.00 $160.00 $160.00 $160.00 $170.00 $170.00 $170.00 $170.00 $170.00 $170.00 $170.00 $170.00 $2,000.00
Workers Comp $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $700.00 $50.00 $50.00 $50.00 $50.00 $50.00 $1,250.00
Payroll Expenses $125.00 $125.00 $125.00 $125.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $1,700.00
Security $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Repairs/Maintenance $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $50.00 $50.00 $500.00
Rent & Storage $900.00 $900.00 $900.00 $900.00 $5,000.00 $900.00 $900.00 $900.00 $900.00 $900.00 $900.00 $900.00 $14,900.00
Telephone/Internet $165.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $2,200.00
BID EVENTS
SCN Rental & Set up $0.00 $0.00 $0.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $22,500.00
SCN Street Cleaning $0.00 $0.00 $0.00 $200.00 $200.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $200.00 $2,400.00
SCN Street Closure $0.00 $0.00 $0.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $500.00 $3,700.00
SCN Parking $0.00 $0.00 $0.00 $700.00 $700.00 $700.00 $800.00 $800.00 $800.00 $800.00 $800.00 $800.00 $6,900.00
SCN Miscellaneous $0.00 $0.00 $0.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $4,500.00
SCN Quickbooks $0.00 $0.00 $0.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $9,000.00
Chili at the Beach $15,000.00 $15,000.00
$0.00
$0.00
Air Show $0.00 $0.00
Halloween $5,150.00 $5,150.00
Miracle on Main $10,000.00 $10,000.00
Holiday Beautification $25,000.00 $25,000.00
Destination Downtown $0.00MONTHLY TOTALS $35,057.00 $68,457.00 $28,307.00 $37,933.00 $40,468.00 $44,312.00 $45,812.00 $45,112.00 $58,862.00 $45,212.00 $44,697.00 $44,701.00 $538,930.00
VARIANCE: INCOME VS EXPENSE 0.00
2020 - 2021 BUDGET
402
123 Anywhere St.,
Any City, ST 12345
Started: July 2020
Followers: 3,413
Growth: 333 new followers per month
Advertising spend: $120.00, $.04 cent
acquisition cost
Relaunched: October 2020
Followers: 3,025
Growth: 336 new followers per month
100% organic growth
INSTAGRAM:
FACEBOOK
MARKETING
SOCIAL MEDIA
COMMUNICATIONS
Downtown Blogs
Press Release: Surf City Stroll,
Surfer's Special and Surf
Festival and Rockin Fig Bowl
BID Member Emails like
Downtown, Did You Know?
and Member Newsletter
Consumer Messaging
MEDIA COVERAGE
OC Register, Daily Pilot, Spectrum
News and KTLA Channel 5
OC Register and Daily Pilot
Rockin Fig Surf Festival
Surf City Nights
403
PLAY
SOCIAL HIGHLIGHTS
DINE
SHOP
COMMUNITY
404
SURF CITY
FARMERS' MARKET
CONTACT US 123 Anywhere St.,
Any City, ST 12345
SURF CITY
MARKET PLACE
KEEP ON CRUISIN
Based on the success of the Rockin Fig
event, the BID collaborated with
HBBC.easyrider to produce a safe, family-
friendly outdoor event that celebrated
cruising culture and the joys of two wheels.
While November 14, 2020 was admittedly a
challenging date to navigate because of
increasing COVID restrictions, the open air
activation complied with all health and
safety guidelines and was considered a
success.
HBDBID EVENTS
The Surf City Marketplace was a
new open-air boutique retail
destination of 4-6 vendors from
October - December. The
Marketplace was located at the
base of the 3rd block of Main Street
during its closure adjacent to the
Post Office.
The Surf City Farmers' Market was
opened in September of 2020 to
provide essential needs for our
community. Operating in a smaller
footprint, Main Street and Olive
Ave, 10-12 vendors supported the
market through the re-opening of
Surf City Nights in March 2021.
405
O CTOB
E
R
17,2020ROCKIN'FIG
VINTAGESURFFESTIVAL
A celebration of one of Surf City’s great personalities,Rockin Fig,and the
“local’s block”of Main Street,the Rockin Fig Vintage Surf Festival was a
block-wide activation that safely brought several hundred people to the
3rd block to enjoy entertainment,exhibits,shopping,and dining on
Oct.17,2020.
The event garnered lots of positive press coverage including the
LA Times,OC Register and Spectrum News.All business on the
3rd block participated in the event by offering special and unique
activities that demonstrated the creative collaboration businesses
embraced during COVID.
In 2021,the 2nd Annual Rockin Fig Vintage Surf Festival will be
incorporated into Surf City Days.
406
Local businesses embraced the return
of Surf City Nights. The most notable
being Avila’s El Ranchito’s introduction
of the Mercado Margarita, a weekly
flavor inspired by shopping the market
each week, Available only on Tuesday
nights, the Mercado Margarita often
sells out. Another great example of
creative collaboration to showcase
Downtown HB in a fresh way.
Surf City Nights has three distinct
zones: Surf City Farmers’ Market,
“Restaurant Row” on the 2nd Block of
Main Street, and the Surf City
Collective which features unique retail
and lifestyle merchants that
complement the 3rd block businesses.
A commission structure was added to
selected vendor categories which
helped increase profitability of the
event even at a reduced footprint.
Surf City Nights successfully returned to
Downtown HB on Tuesday, March 16th
with a new footprint and reimagined
vendor mix. At approximately 50 vendors,
the street fair is half the original size in
terms of vendors, but occupies the same
footprint creating a wonderful flow up
Main Street from PCH to Orange. The
outdoor dining patios on the 2nd block
entice visitors to linger over dinner and
the expanded vendor spacing has
improved sightlines between vendors and
businesses.
SURF CITY NIGHTS
407
SURF CITY
MOVIE NIGHTS
Surf City Days were on hiatus in Fall
2020. In October 2021, the event
will return to Main Street and Pier
Plaza. Local's favorite, HSS Demo
Days, will return to the first block of
Main Street. The 2nd Annual
Rockin Fig Vintage Surf Festival will
be added to the event this year for
more exposure to all of Downtown.
123 Anywhere St.,
Any City, ST 12345
In partnership with the
International Surfing Museum, Surf
City Movie Nights is scheduled for
Fall of 2021. Through the help of
sponsorships, we will be able to
bring classic surf cinema to
Downtown Huntington Beach.
SURF CITY
DAYS
HOLIDAYS 2021
UPCOMING EVENTS
Halloween and Miracle on Main
Street, were on hiatus in Fall 2020.
We are excited bring the spirit of
the season back to Downtown in
2021. Locals and guests will enjoy
the annual Trick or Treating with
our businesses and the return of
Miracle on Main Street.
408
HBDBID
ANNUAL REPORT
HUNTINGTON BEACH
DOWNTOWN
BUSINESS
IMPROVEMENT
DISTRICT
2021-2022
409
Founded in 2004, the HBDBID is a
private non-profit 501c6 business-based
organization, which is an all-inclusive
collaborative advocate for the entire
growing downtown region. We provide
clearly defined value and benefits to our
community and stakeholders.
ABOUT:
WHATWEDO
Create a thriving Downtown business
district that delivers on the Surf City
USA brand and attracts a quality
clientele year-round. In addition to
consumer marketing,events, and
member communications, the BID
provides capital services to benefit
Downtown in conjunction with
the City:
Security
Cleanliness
Signage
Beautification
410
To be a sustainable catalyst for a thriving
and livable downtown, nationally
recognized for its diverse local
businesses and authentic, unique
culture. Known for being welcoming,
accessible, clean, safe, fun, and
environmentally conscious.
VISION:
MISSION:
VALUES:
Communication:Education and Service
Representative: The advocate voice for
all in our community
Integrity:Transparency, Honesty,and
Respect
Strategic Results:Sustainable,ROI
Focused,and Efficient
Passion:Positivity and Unified in Cause
To be the advocate voice for our
coastal downtown community
creating economic vitality and the
premier entertainment destination.
411
SECURITY
AMBASSADORS
The Ambassadors Security program through 12”0”27 Protective Services, aka Big
Tony, officially started in 2017 after a pilot program in 2016 and continues to be
vital to the weekend safety of Downtown HB. The purpose of the Ambassadors is
to establish a rapport and presence with business owners, patrons, and residents
of Huntington Beach in the Downtown area. The Ambassadors are not police
officers. Their role is to observe and report situations concerning the well-being
and safety within the surrounding area. They support the HBPD as needed and
within their legal abilities under the law. Their goal is to ensure that all visitors to
Downtown HB enjoy themselves and are provided with the safest environment
possible.
VHB and the BID co-fund the Ambassadors. For 2021-2022 VHB will contribute
$30,000 and the BID will contribute $40,200 based on current budget
allocations. A 4-man team working an 8-hour shift is scheduled Downtown every
Friday, Saturday, and Sunday through the weekend of Oct. 3rd to coincide with
the Air Show. After that, the Ambassadors will be scheduled as a 3-man team on
specific holiday and event weekends through the fall and spring of 2022.
HBPD COMMUNICATIONS
The BID communicates frequently and works in partnership with HBPD.
In June 2021, the BID, VHB, and HBPD created an informal Downtown
Communications Workgroup to foster proactive collaboration and processes
between the three organizations. The BID attends HBPD security briefings
related to events planned for Downtown.
412
MAINTENANCE &
BEAUTIFICATION
Downtown HB is a very active destination and requires frequent, thorough
cleaning. MCS was awarded the cleaning and maintenance contract after
the City distributed a new RFQ in June 2021.
The new contract provides increased frequency of power washing along
heavily-trafficked areas of Downtown while also expanding the coverage
area to reach more businesses. Daily porter service is the second
component of the contract. The BID often increases porter staffing over
holdiay and event weekend.
413
MAINTENANCE &
BEAUTIFICATION
Zone 1 Power Washing: On Peak = 2 x week, Off Peak = 1 x week
414
MAINTENANCE &
BEAUTIFICATION
Zone 2 Power Washing: On Peak = 2 x month, Off Peak = 1 x month
415
MAINTENANCE &
BEAUTIFICATION
Zone 3 Power Washing: Monthly Alley and Gutters
416
BID MEMBER OVERVIEW
AND ZONE ANALYSIS
THERE ARE CURRENTLY 261 ACTIVE
BUSINESSES IN THE
DOWNTOWN BID IN ZONE 1 AND 2.
417
BID ASSESSMENT CHART
418
Of the 162 businesses in Zone 1,103 - or 64% - are either a
restaurant or retail establishment and they are almost evenly
represented. Together, restaurants and retailers generate 86%
of BID assessment fees in Zone 1. At 44, Offices/ Services
represent the third largest category of business in Zone 1,
indicating a vibrant mix of social and professional operations
within the area. Employees returning to their offices after
COVID will have a positive impact on Downtown as this
audience contributes to meaningful dining and shopping
revenue during the week.
ZONE 1 ANALYSIS
419
Of the 99 businesses in Zone 2, 54 - or 55% - are either a
restaurant or retail establishment with the majority being retail
at 45. Together, restaurants and retailers generate 68% of BID
assessment fees in Zone 2. At 37, Offices/ Services represent the
second largest category of businesses in Zone 2, indicating a
shift to retail and professional operations within the area which
is in easy walking distance from all areas of Downtown.
ZONE 2 ANALYSIS
420
There are no changes from the 2018-2019 Assessment
Formula.
Assessments are paid annually as a mandatory
requirement to receive and/or renew a business license for
organizations operating within the Business Improvement
District.
Assessment excluded for apartments, real estate agents,
non-profits, home-based businesses and temporary
vendors.
Business and non-profit organizations outside the area may
join with the approval of the BID Board by paying the
equivalent fee annually.
Non-profit organizations within the BID Assessment Zone
can voluntarily participate by paying $30 to the HB
Downtown BID directly.
Outside of Zones 1 and 2, two hotels, the Hyatt Regency
Huntington Beach Resort & Spa and The Waterfront Beach
Resort, a Hilton Hotel, both elected to voluntarily rejoin the BID
in January 2021.
NEW BID MEMBERS:
Jay Bird’s: Nashville Hot Chicken, Mahkin (Opening Date July
2021), Diane’s Bikinis (New Owners), Aloha Grill (New Owners),
Haus of Bunnies (Opening 2021), Hidden Beauty OC, SMKFLWR
BID MEMBERSHIP
421
ASSESSMENTS
As of June 30th, the BID had collected 55% of projected annual
assessments. The City completed a much-anticipated integration of the
annual business license fee and BID assessment fees into one invoice in May
2021. The BID anticipates this will help with monthly assessment collections
bringing the total closer to the annual projected amount.
FINANCIALS
EIDL LOAN
In late October 2020, the BID applied for an EIDL loan, which was awarded
in the amount of $150,000 on Dec. 31, 2020. On Jan. 5, 2021 $50,000 was
placed in the BID’s Main Account for use as operating capital to cover
expenses such as rent and staff costs. $100,000 was placed in the Reserve
account to meet min. funding requirements. On June 19, 2021, the BID
began the process of requesting approx. $45,300 in additional EIDL funds.
CITY OF HB COVID GRANT
On May 24, 2021, the BID applied for a COVID-19 Relief Grant through the
City of Huntington Beach. The BID received confirmation that it would
receive an award of $10,000 on June 14th. The funds will be placed in the
BID’s Main account to use for marketing and operating expenses for the
2021-2022 fiscal year.
422
Huntington Beach Downtown Business Improvement District
Statement of Financial Position
As of June 30, 2021
Cash Basis Monday, July 12, 2021 04:52 PM GMT-07:00 1/1
TOTAL
ASSETS
Current Assets
Bank Accounts
1020 First Bank - Main Acct 1,274.11
1030 First Bank - MM 160,733.80
1040 First Bank - Malco 25,692.16
Total Bank Accounts $187,700.07
Other Current Assets
1330 Prepaid Rent 500.00
Undeposited Funds 0.00
Total Other Current Assets $500.00
Total Current Assets $188,200.07
Fixed Assets
1640 Machinery & Equipment 11,651.68
1660 Office Equipment 538.74
1670 Computers 1,306.31
1700 Accumulated Depreciation -13,496.73
Total Fixed Assets $0.00
TOTAL ASSETS $188,200.07
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
2080 Payroll Clearing -185.08
2100 Payroll Tax Payable -853.29
Total Other Current Liabilities $ -1,038.37
Total Current Liabilities $ -1,038.37
Long-Term Liabilities
2400 Notes Payable - SBA EIDL 150,000.00
Total Long-Term Liabilities $150,000.00
Total Liabilities $148,961.63
Equity
3100 Unrestricted Net Assets 122,544.38
Retained Earnings 0.00
Net Revenue -83,305.94
Total Equity $39,238.44
TOTAL LIABILITIES AND EQUITY $188,200.07
423
BUSINESS IMPROVEMENT DISTRICT
INCOME:OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP YEARLY TOTALS
City of HB Maintenance $18,634.00 $11,864.00 $11,864.00 $11,040.00 $9,690.00 $17,284.00 $18,634.00 $17,284.00 $17,284.00 $18,634.00 $18,109.00 $18,109.00 $188,430.00
BID Assessments $6,000.00 $8,000.00 $8,000.00 $8,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $8,000.00 $8,000.00 $106,000.00
Surf City Nights $15,200.00 $10,200.00 $10,200.00 $10,200.00 $10,200.00 $12,200.00 $15,200.00 $20,200.00 $20,200.00 $20,200.00 $20,200.00 $18,200.00 $182,400.00
Surf City Days $15,000.00 $15,000.00
Summer Kickoff Event $10,000.00 $10,000.00
Chili at the Beach $10,000.00 $10,000.00
Surf City Movie Nights $2,500.00 $5,000.00 $5,000.00 $5,000.00 $17,500.00
Halloween $5,000.00 $5,000.00
City of HB Grant $10,000.00 $10,000.00
Miracle on Main $5,000.00 $5,000.00
Monthly Totals $79,834.00 $35,064.00 $30,064.00 $29,240.00 $29,890.00 $39,484.00 $43,834.00 $47,484.00 $59,984.00 $53,834.00 $51,309.00 $49,309.00 549,330.00
$18,200.00
EXPENSE:OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP YEARLY TOTALS
City of HB Maintenance $17,634.00 $10,864.00 $10,864.00 $10,040.00 $8,690.00 $16,284.00 $17,634.00 $16,284.00 $16,284.00 $17,634.00 $17,109.00 $17,109.00 $176,430.00
Marketing/Advertising $1,200.00 $1,200.00 $1,200.00 $1,200.00 $1,200.00 $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 $700.00 $10,900.00
Ambassadors Security $5,000.00 $1,000.00 $3,000.00 $2,100.00 $2,100.00 $2,100.00 $2,100.00 $2,000.00 $5,200.00 $5,200.00 $5,200.00 $5,200.00 $40,200.00
Office Expense $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $1,200.00
Bank Charges $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $1,200.00
Dues & Subscriptions $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $3,000.00
Insurance $0.00 $0.00 $0.00 $600.00 $0.00 $0.00 $0.00 $1,300.00 $0.00 $0.00 $0.00 $0.00 $1,900.00
Accounting $540.00 $540.00 $540.00 $540.00 $850.00 $1,100.00 $540.00 $540.00 $540.00 $540.00 $540.00 $540.00 $7,350.00
License & Fees $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $200.00 $200.00 $200.00 $200.00 $2,000.00
Board of Directors Election $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $2,000.00 $2,000.00
Meeting/Training $100.00 $100.00 $50.00 $100.00 $100.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $800.00
Exec. Dir.$8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,333.00 $8,337.00 $100,000.00
Events Manager $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $5,300.00 $63,600.00
Payroll Expenses $75.00 $75.00 $75.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $225.00
Repairs/Maintenance $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $40.00 $50.00 $50.00 $500.00
Rent & Storage $800.00 $800.00 $800.00 $800.00 $800.00 $5,800.00 $800.00 $800.00 $800.00 $800.00 $800.00 $800.00 $14,600.00
Telephone/Internet $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $185.00 $2,220.00
EIDL Repayment $0.00 $0.00 $0.00 $852.00 $852.00 $852.00 $852.00 $852.00 $852.00 $852.00 $852.00 $852.00 $7,668.00
BID EVENTS
SCN Rental & Set up $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $12,000.00
SCN Street Cleaning $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $6,000.00
SCN Street Closure $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $6,000.00
SCN Parking $600.00 $0.00 $0.00 $600.00 $0.00 $0.00 $600.00 $0.00 $0.00 $600.00 $0.00 $0.00 $2,400.00
SCN Marketing $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $6,000.00
SCN Quickbooks $304.00 $204.00 $204.00 $204.00 $204.00 $244.00 $304.00 $404.00 $404.00 $404.00 $404.00 $364.00 $3,648.00
BID Event Misc $833.00 $633.00 $633.00 $433.00 $433.00 $633.00 $633.00 $633.00 $833.00 $833.00 $833.00 $626.00 $7,989.00
Summer Kickoff Event $10,000.00 $10,000.00
Chili at the Beach $10,000.00 $10,000.00
Surf City Days $5,000.00 $5,000.00
Surf City Movie Nights $1,500.00 $1,500.00 $1,500.00 $4,500.00
Air Show $0.00 $0.00
Halloween $10,000.00 $10,000.00
Miracle on Main $10,000.00 $10,000.00
Holiday Beautification $20,000.00 $20,000.00
MONTHLY TOTALS $49,044.00 $82,374.00 $34,324.00 $34,427.00 $32,187.00 $44,721.00 $41,171.00 $40,521.00 $52,671.00 $46,121.00 $45,006.00 $46,763.00 $549,330.00
VARIANCE: INCOME VS EXPENSE 0.00
2021-2022 Budget
424
123 Anywhere St.,
Any City, ST 12345
Started: July 2020
Followers: 3,413
Growth: 333 new followers per month
Target: 6,000 followers by June 2022.
Relaunched: October 2020
Followers: 3,025
Growth: 336 new followers per month
100% organic growth
Target: 6,000 followers by June 2022
INSTAGRAM:
FACEBOOK
MARKETING
SOCIAL MEDIA
COMMUNICATIONS
Rebrand the HBDBID to create
clearer identity and increase
brand equity
BID Blogs and Member Emails
like Downtown, Did You Know?
and Member Newsletter
Enhanced Website with Sections
for Businesses and Visitors and
Event Calendar
Event Promotions
MEDIA OUTREACH
Press Releases
Media Alerts
FAM Tours
Media Event Invitations
425
Local businesses embraced the return
of Surf City Nights. The most notable
being Avila’s El Ranchito’s introduction
of the Mercado Margarita, a weekly
flavor inspired by shopping the market
each week, Available only on Tuesday
nights, the Mercado Margarita often
sells out; it's a great example of creative
collaboration to showcase Downtown
HB in a fresh way.
Surf City Nights has three distinct
zones: Surf City Farmers’ Market,
“Restaurant Row” on the 2nd Block of
Main Street, and the Surf City
Collective which features unique retail
and lifestyle merchants that
complement the 3rd block businesses.
A commission structure was added to
selected vendor categories which
helped increase profitability of the
event even at a reduced footprint.
Surf City Nights successfully returned to
Downtown HB on Tuesday, March 16th,
2021 with a new footprint and reimagined
vendor mix. At approximately 50 vendors,
the street fair is half the original size in
terms of vendors, but occupies the same
footprint creating a wonderful flow up
Main Street from PCH to Orange. The
outdoor dining patios on the 2nd block
entice visitors to linger over dinner and
the expanded vendor spacing has
improved sightlines between vendors and
businesses.
SURF CITY NIGHTS
426
SURF CITY
MOVIE NIGHTS
In October 2021, Surf City Days will
return to Main Street and Pier
Plaza. Local's favorite, HSS Demo
Days, will return to the first block of
Main Street. The 2nd Annual
Rockin Fig Vintage Surf Festival
will be added to the event this year
for more exposure to all of
Downtown.
123 Anywhere St.,
Any City, ST 12345
In partnership with the
International Surfing Museum, Surf
City Movie Nights is scheduled for
Fall of 2021. Through the help of
sponsorships, we will be able to
bring classic surf cinema to
Downtown Huntington Beach.
SURF CITY
DAYS
HOLIDAYS 2021
UPCOMING EVENTS
The spirit of the season returns
Downtown in 2021. Activities are
being planned for both nights of
Halloween weekend with the
traditional trick-or-treating
Downtown on the 31st. Enhanced
decorations and the return of
Miracle on Main Street is planned
for Holiday 2021.
427
LOOKING AHEAD
Rebrand BID with a user-friendly name, i.e.Explore Downtown HB,
DTHB, or Experience Downtown HB
New Seasonal Events: examples include a Summer Kick-off event and
possible monthly lifestyle events
Annualized Calendar of Events to Increase Shoulder Season
Programming
Double Social Media Followers and Engagement
Redesign and Expand Website Content to Feature Different Sections
for Businesses and Visitors
Increase Clarity and Value of BID Membership through Marketing,
Member Communications, Services, and Programming
CHALLENGES
REVENUE
Projected Annual BID Assessment Revenue is just 18% of the budget.
Recurring event revenue with Surf City Nights has proven to be very
robust, but the total footprint is still about 50% of what it was pre-COVID.
Surf City Nights revenue is projected to be 31% of the annual budget.
Individual Signature Events like Surf City Days and Chili at the Beach are
expected to be profitable, but frequent one-off events are not
supportable with current BID staffing.
IMPROVEMENTS
428
BOUNDARY MAP
429
Businesses to be Assessed—FY 2021-2022
Business Name:
ZIMBABWE HB GIFTS & ACCESSORIES (CT)
SHOREBREAK HOTEL
THE IRISHMAN
BOLT TOURS
PEDEGO H B
SALT HAIR LOUNGE
ESTHETICS AND LASH EXTENSIONS BY HANNAH
ARIA HOOKAH LOUNGE
SALT LIFE LLC
JACK'S SURFBOARDS
CVS/PHARMACY #819
MODERN PARKING INC
SMILES CAFE
GENTLE DENTAL HUNTINGTON BEACH
MAIN STREET CLEANERS
BOGGELN & COMPANY CPA
E J I DESIGNS
STYLING BY STEPH / THE BLONDE ROAST
COLOR ME ALLIE
DASH OF SASS
NAILED IT NAIL BAR
MINDFUL LIVING EXPERT
ANDE'S PERUVIAN ARTS AND CRAFTS (CT)
ANDE'S PERUVIAN ARTS AND CRAFTS (CT)
HOT TRENDS SUNGLASSES (CT)
THE FUNNEL HOUSE
NORTH SHORE POKE CO
NO KA OI
SANCHO'S TACOS
KILLARNEY'S
TOP H B NAILS
DARE ME BIKINI
SMOKERZ LAND 3 SMOKE SHOP
ZEPHYR BARBERSHOP
CASSANDRA CAPRI HAIR
COLDSTONE CREAMERY
MIN'S DYNASTY PERMANENT MAKEUP/MD MEDICAL SPA
DECO HAIR LOUNGE
7-ELEVEN STORE #2172-34653A
BEACH ISLAND
JAX BICYCLE CENTER
SAIL PROPERTIES INC
INVESTMENT BUILDERS LLC
WAVELENGTHS RECOVERY LLC
PERFECTED WEALTH MANAGEMENT
KOKOMOS SURF SIDE
INDARRA MODERN INDIAN CUISINE
MAIN ST BARBERS
KENNETH BROWN SALONS
HOT TRENDS SUNGLASSES (CT)
HOT TRENDS SUNGLASSES (CT)
GRATER GRILLED CHEESE
CHARLIE'S GYROS
ZACKS PIER PLAZA
ZACKS TOO
DWIGHT'S BEACH CONCESSION
430
SURF CITY STORE
BEACH WAVES
SKIN REHAB
SURF CITY SEGWAY
HUNTINGTON SURF AND SPORT
MAIN STREET DAY SPA
BEAUTY BUNGALOWS BY PORCELAIN
PRISTINE MOTORSPORTS
VEGWARE PACKAGING INC
PARKING CONCEPTS INC
THE U P S STORE #4482
ROBINSON LEE
TURN-KEY HOMES
SPEEDY CREDIT REPAIR INC
F H A REVIEW
LUNA UNITED
PACIFIC SOTHEBY'S INTERNATIONAL REALTY
R M A INTERNATIONAL LANDSCAPE ARCHITECTURE & PLAN
BREWSTER'S ICE
HAUS OF BUNNIES
MAHKIN THAI & SUSHI
ZERO ZERO PIZZERIA
WAHOO'S FISH TACO
LONGBOARD RESTAURANT & PUB
MANGIAMO GELATO
NAUGLES
ROCKIN FIGS SURF HEADQUARTERS
MAKIN WAVES SALON
BARE BUNNY AESTHETICS
SOCK HARBOR
AMERICAN VINTAGE
BASKIN ROBBINS #362100
MODEL CITIZEN
SURF CITY CHIROPRACTIC
MAILBOX STATION
INNOCEAN WORLDWIDE AMERICAS LLC
ROBERT KOURY PROPERTIES
STUDENT SUPPORT LIVE LP
CELLORION (CT)
HUNTINGTON SURF INN
T K BURGERS
RITTER'S STEAM KETTLE COOKING
CRABBY'S BOAT HOUSE
2ND FLOOR FAD
CRUISERS PIZZA BAR GRILL
ALOHA GRILL
MAIN STREET OPTICAL & BOUTIQUE
THE BLOW DOWN LLC
M E HELME HOUSE FURNISHING CO
DING DR LLC
BOW AND ARROW HAIR LOUNGE
LOVE LOCKS
HAVAIANAS SANDALS
EL DON LIQUOR
RAY'S RENTALS
GALITZEN PROPERTIES
A & S ACCOUNTING SOLUTIONS INC
H M R ARCHITECTS
INNOCEAN WORLDWIDE AMERICAS
AMBIT CONSULTING LLC
ZIGGYS ON MAIN
431
SESSIONS WEST COAST DELI
DAIRY QUEEN
HURRICANES BAR & GRILL
FRED'S MEXICAN CAFE
CUCINA ALESSA HB
JACK'S BEACH CONCESSION
ROCKY MOUNTAIN CHOCOLATE FACTORY
SAKAL SURFBOARDS
SALON RETRO
NEIRA DESIGNS & FIX-IT ETC
MONTGOMERY JEWELERS
EV RIDEABLES LLC
PACIFIC COAST BODY SCULPTING LLC
JACKS SURF & SPORT
HUNTINGTON BEACH EASY RIDER, DANK CLOTHING
F45 TRAINING HUNTINGTON BEACH DOWNTOWN
PIERSIDE COMMISSARY
LAZ PARKING CALIFORNIA LLC
FLYWHEEL
WEAVER & ASSOCIATES
GRUPO GALLEGOS
SOLENA LANDSCAPE
EIDO
CELLORION (CT)
MAIN ST LIQUOR MARKET
Just Right Apparel
HOT SPOT
ZIMBABWE HB GIFTS & ACCESSORIES (CT)
TZONE
SUSHI ON FIRE
THAI WAVE RESTAURANT
HUNTINGTON BEACH BEER COMPANY
SURF CITY ALE HOUSE
LET'S GO FISHING & SURF CITY SNACK BAR LLC
SURFBOARD AND BIKE RENTALS
MOOD SWINGS
HOSTETLER KERI
SKINSATIONAL
MAIN STREET WINE COMPANY
PARLOUR ELEVEN
HUNTINGTON SURF & SPORT
COASTLINE REAL ESTATE INVESTMENTS LLC
CONTINENTAL 1 HOUR CLEANERS INC
CDA MARKETING GROUP INC
P R TALENT
HEADLINER
SURF CITY SKATES
JAY BIRD'S
BEAUTY & THE BEACH STUDIO
KUO JESSICA
AUTOMATED CASH MANAGEMENT SYSTEMS (ACMS)
POSITIVE THOUGHT BRAND (CT4)
ZIMBABWE HB GIFTS & ACCESSORIES (CT)
PETE'S MEXICAN FOOD
ICECREAMTON - SOFTY ICECREAM & HANDCRAFTED CHURROS
B J'S RESTAURANT & BREWHOUSE
DUKE'S
WATERFRONT BEACH CABANA
BEE BEE NAILS
DANIEL JAFFE DDS
LUCY'S TAILORING & ALTERATIONS
432
M C A TRADING LLC
HAMLIN GOODING
THE ICE CREAM WAY
DING TEA
JAN'S HEALTH BAR
I H O P
MAIN STREET HAIR COMPANY
SUGAR CABANA
CALI SHORE STORE
HAVEN OF WELLNESS INC
EUROPA NAIL STUDIO
THE TRAINING SPOT
HUNTINGTON BEACH REALTY
HORN HOLISTIC ACUPUNCTURE
DIRTY DOG WASH
RIO MEDIA INC
221 N MAIN STREET BEACH PROPERTIES LLC
GALLAGHERS IRISH PUB
RACHEL IVERSEN LAC
DIANE'S BIKINIS
Healing Cryotherapy
BOBASAUR
SUGAR SHACK CAFE
SHARKEEZ
HQ GASTROPUB
KITE CONNECTION C/O DAVE SHENKMAN
ELEVATE SPA SERVICES
SUITE INSPIRATION
SURF CITY MARKET
PORCELAIN HAIR STUDIO / PORCELAIN HAIR EXTENSIONS
7 ELEVEN STORE #35767B
SUNWEST REALTY
BRENT O NICHOLS DDS
IPA 1031 GROUP LLC
TEAM DESIGN & CONSTRUCTION
RIPCORD DIGITAL INC
W & R STUDIOS
BANZAI BOWLS
WET DOG TAVERN
PERQS NIGHTCLUB & SPORTSBAR
COACH'S MEDITERRANEAN GRILL
SHABU ON FIRE
BODHI TREE VEGAN CAFE
ORANGE COUNTY BARBERS PARLOR
JOLYN CLOTHING COMPANY
RIP CURL SURF CENTER
SIGNATURE PRINTING
CORREA & ASSOCIATES
J & J COASTAL LENDING
HOWARD FISCHER DVM A PRO CORP
25 DEGREES
HIDDEN BEAUTY OC BY SHAUNA NASRI
JPG Inc. dba Oak Leaf Productions
MILK AND HONEY HB
ARMIJO ANTHONY (CT)
602 COFFEE HOUSE
STARBUCKS COFFEE COMPANY #575
AVILA'S EL RANCHITO H B
DOS TOROS MEXICAN GRILL
SANDY'S BEACH SHACK
1 LOOK VINTAGE
433
LEATHER AND LACE O C
MERRILEE'S INC
CALIFORNIA CLOTHING
STUDIO 37 SALON
CAPITAL INVESTMENT NETWORK INC
PHOTO HOUSE INC
T R RANCH SERVICES LLC
THE NEXT LEVEL
W & R STUDIOS
MAILPIX INC
SURFLINE
C B INVESTMENTS INC
WESTLAND BUSINESS SERVICES INC
PACIFIC RIM TAX & ACCOUNTING
ATM GLOBAL INCORPORATED
JUVE CREATIVE INC
GUARANTEED RATE INC
BOMBURGER
BLUE CHAIR ACCOUNTING
434
BID ASSESSMENT CHART
435
LOOKING AHEAD
Rebrand BID with a user-friendly name, i.e. Explore Downtown HB,
DTHB, or Experience Downtown HB
New Seasonal Events: examples include a Summer Kick-off event and
possible monthly lifestyle events
Annualized Calendar of Events to Increase Shoulder Season
Programming
Double Social Media Followers and Engagement
Redesign and Expand Website Content to Feature Different Sections
for Businesses and Visitors
Increase Clarity and Value of BID Membership through Marketing,
Member Communications, Services, and Programming
CHALLENGES
REVENUE
Projected Annual BID Assessment Revenue is just 18% of the budget.
Recurring event revenue with Surf City Nights has proven to be very
robust, but the total footprint is still about 50% of what it was pre-COVID.
Surf City Nights revenue is projected to be 31% of the annual budget.
Individual Signature Events like Surf City Days and Chili at the Beach are
expected to be profitable, but frequent one-off events are not
supportable with current BID staffing.
IMPROVEMENTS
436
City of Huntington Beach
File #:21-682 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Oliver Chi, City Manager
PREPARED BY:Sean Crumby, PE, Director of Public Works
Subject:
Approve for introduction Ordinance No. 4237 amending Huntington Beach Municipal Code
Chapter 10.12 relating to speed limits on Atlanta Avenue between Huntington Street and
Beach Boulevard
Statement of Issue:
The California Vehicle Code requires periodic review and updating of posted speed limits on certain
streets within the City to enable the Police Department to continue to use speed-measuring devices
for enforcement. The recommended action updates the speed limits on Atlanta Avenue between
Huntington Street and Beach Boulevard.
Financial Impact:
None. Funding for the implementation of the recommended speed limits is included in the Public
Works Department operating budget.
Recommended Action:
Approve for introduction Ordinance No. 4237, “An Ordinance of the City of Huntington Beach
Amending Chapter 10.12.080 of the Huntington Beach Municipal Code Relating to Speed Limits.”
Alternative Action(s):
Adopt posted speed limits different from those recommended and forgo enforcement using speed-
measuring devices for the updated speed limits on Atlanta Avenue from Huntington Street to Beach
Boulevard.
Analysis:
When roadway conditions undergo significant changes, an updated evaluation following State
procedures is required to post enforceable speed limits on those roadways. Improvements were
recently completed on Atlanta Avenue between Huntington Street and Delaware Street, adding an
additional eastbound vehicle lane and eastbound bike lane along with new sidewalk on the south
side. Due to these changes in roadway conditions, reevaluation of the speed limit is required to
continue enforcement.
City of Huntington Beach Printed on 9/29/2021Page 1 of 3
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File #:21-682 MEETING DATE:10/5/2021
City staff has performed the three required elements used to establish posted speed limits in
accordance with procedures set forth by the State of California. All speed limits shall be established
in conformance with the State adopted procedures in order to gain legal support for enforcement of
the posted speed limit. The three elements used to establish speed limits are:
1) Sample the existing travel speeds at representative locations within the roadway segment.
2) Review accident history.
3) Review the street segment to identify roadway characteristics and conditions that may not be
readily apparent to motorists.
The review of travel speeds is used to establish a baseline speed limit for a roadway segment. Per
California Standards, the posted speed limit is established at the nearest five mile per hour (5 mph)
increment of the 85th percentile speed of free-flowing traffic, except as shown in the two options
below:
1. The posted speed may be reduced by 5 mph from the nearest 5 mph increment of the 85
th
percentile speed of free-flowing traffic. Documentation is required of the conditions and
justification for the lower speed limit.
2. For cases in which the nearest 5 mph increment of the 85
th percentile would require rounding
up, then the speed limit may be rounded down to the nearest 5 mph increment below the 85 th
percentile speed, if no further reduction is used.
Case law has shown the courts will not support any speed limit posting that appears to be arbitrary.
In other words, without demonstrated technical information to support the postings. To ensure
consistency in establishing speed limits, the State has established very specific procedures,
requirements and standards under which all speed limits are to be established. Any speed limit
found by the courts to be inconsistent with approved requirements is deemed a “speed trap” and
therefore not enforceable.
The current speed limits on Atlanta Avenue between 1st Street and Beach Boulevard Street are 35
miles per hour between 1st Street and Delaware Street, and 40 miles per hour between Delaware
Street to Beach Boulevard. Based on the study conducted in accordance with State requirements,
the recommended update is a 40 mile per hour speed limit on Atlanta Avenue between Huntington
Street to Beach Boulevard. The 35 mile per hour speed limit on Atlanta between 1 st Street and
Huntington Street will remain. Attachment 1 shows a diagram of the current and recommended
updated speed limits.
Attachment 2 documents that staff identified roadway characteristics within Atlanta Avenue between
Huntington Street and Beach Boulevard that may not be readily apparent to motorists. Due to these
conditions, posting near the 85th percentile speed (45 mph) may not be reasonable and prudent to
facilitate the orderly flow of traffic. Documentation of the roadway conditions was provided to use the
aforementioned option to reduce the speed limit 5 mph from the nearest 5 mph increment of the 85th
percentile speed for a posted speed limit of 40 miles per hour. This speed limit posting matches the
current speed limit on Atlanta Avenue east of Delaware Street. Attachment 3 presents the Legislative
City of Huntington Beach Printed on 9/29/2021Page 2 of 3
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File #:21-682 MEETING DATE:10/5/2021
Draft of the recommended ordinance adopting the speed limit on Atlanta Avenue between Huntington
Street and Beach Boulevard. Attachment 4 shows Ordinance No. 4237 amending the enumerated
speed limits in Municipal Code Section 10.12.080.
Environmental Status:
None required.
Strategic Plan Goal:
Enhance and maintain public safety.
Attachment(s):
1. Atlanta Avenue Speed Limits
2. Speed Survey Summary Sheets
3. Legislative Draft of Municipal Code Section 10.12.080
4. Ordinance 4237, “An Ordinance of the City of Huntington Beach Amending Chapter 10.12.080
of the Huntington Beach Municipal Code Relating to Speed Limits”
City of Huntington Beach Printed on 9/29/2021Page 3 of 3
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440
MPH EB WB ##TOTAL CITY OF HUNTINGTON BEACH, CA
60 0 0 0 0 0 Traffic Engineering Speed Survey
59 0 0 0 0 0
58 0 0 0 0 0 Street Surveyed Atlanta Ave
57 0 0 0 0 0
56 0 0 0 0 0 Between Huntington St - Beach Blvd
55 0 0 0 0 0
54 0 0 0 0 0 Date Surveyed 30-Jul-21
53 0 0 0 0 0
52 0 0 0 0 0 Time Surveyed 13:30 to 13:50
51 0 0 0 0 0
50 0 0 0 0 0 85th %43 M.P.H.
49 0 1 0 1 1
48 2 2 2 2 4 Pace 35-45 M.P.H.
47 0 3 0 3 3
46 0 0 0 0 0 % In Pace 82%
45 2 3 2 3 5
44 3 1 3 1 3 # Of Vehicles 112
43 2 4 2 4 7
42 8 8 8 8 16 Posted Speed Limit 35 M.P.H.
41 7 6 7 6 13
40 5 7 5 7 12 New Speed Limit 40 M.P.H.
39 5 7 5 7 12
38 5 3 5 3 8 Accident Rate(Acc/MVM)=3.26 State Rate=1.34
37 3 1 3 1 4
36 2 4 2 4 6 Performed By DS
35 4 2 4 2 6
34 1 2 1 2 3 Approved: City Of Huntington Beach
33 1 2 1 2 3
32 0 1 0 1 1
31 0 0 0 0 0 Date:
30 1 2 1 2 3 Robert Stachelski, Transportation Manager
29 1 0 1 0 1 R.T.E. 1651
28 0 1 0 1 1
27 0 0 0 0 0 Remarks
26 0 0 0 0 0
25 0 0 0 0 0
24 0 0 0 0 0
23 0 0 0 0 0
22 0 0 0 0 0
21 0 0 0 0 0
20 0 0 0 0 0
19 0 0 0 0 0
18 0 0 0 0 0
17 0 0 0 0 0
16 0 0 0 0 0
15 0 0 0 0 0
14 0 0 0 0 0
13 0 0 0 0 0
12 0 0 0 0 0
11 0 0 0 0 0
10 0 0 0 0 0
# of Lanes [ X ] Two [ ] Three [ ] Four [ ] Six Other
Median [ ] Raised [ ] Painted [ X ] TWLTL Complete section below to certify a copy of this original survey.
Bike Lanes [ X ] Yes [ ] No This document is a correct copy of the original in the PW Dept.
Grading [ ] Flat [ X ] Sloped [ ] OCFCD Channel
Parking [ X ] Yes north side [ ] No Date Sign Title
Land Use [ ] Commercial [ ] Industrial [ X ] Residential City of Huntington Beach CA Public Works Department
The street segment is located along a residential mixure of single family, mobile
homes, and multi-family dwellings with significant pedestrian and bicyclist activity
traveling to the nearby coastal recreational activity and commercial retail/retaurant
areas. The segment consists of parking areas along the north and south street sides
with related parking maneuevers, and mobile home park access driveway on the
south side of the west portion. The west portion of the segment between
Huntington St and Delaware St was recently improved which included bike lanes,
additional vehicle lanes, and sidewalk with the east section between Delaware St
and Beach Blvd currently posted at 40 mph based on a traffic and engineering
survey. Higher accident rate compared to county rate for similar street. Due to
these conditions the posting of a 40 mph speed limit is reasonable and safe to
facilitate the efficient and order flow of traffic.
ATTACHMENT #2
441
MPH EB WB ##TOTAL CITY OF HUNTINGTON BEACH, CA
60 0 0 0 0 0 Traffic Engineering Speed Survey
59 0 0 0 0 0
58 0 0 0 0 0 Street Surveyed ATLANTA AVE
57 0 0 0 0 0
56 0 0 0 0 0 Between FIRST ST TO HUNTINGTON ST
55 0 0 0 0 0
54 0 0 0 0 0 Date Surveyed 03/21/17
53 0 0 0 0 0
52 0 0 0 0 0 Time Surveyed 2:05 PM to 2:30 PM
51 0 0 0 0 0
50 0 0 0 0 0 85th %37 M.P.H.
49 0 0 0 0 0
48 0 0 0 0 0 Pace 28 - 37 M.P.H.
47 0 0 0 0 0
46 0 0 0 0 0 % In Pace 78%
45 0 0 0 0 0
44 0 0 0 0 0 # Of Vehicles 109
43 1 0 1 0 1
42 2 0 2 0 2 Posted Speed Limit 35 M.P.H.
41 2 1 2 1 3
40 1 1 1 1 2 New Speed Limit 35 M.P.H.
39 1 1 1 1 2
38 3 1 3 1 4 Accident Rate(Acc/MVM)=1.66 State Rate=3.35
37 4 4 4 4 8
36 3 4 3 4 7 Performed By DS
35 7 3 7 3 10
34 7 5 7 5 12 Approved: City Of Huntington Beach
33 3 4 3 4 7
32 4 4 4 4 8
31 2 9 2 9 11 Date:
30 3 6 3 6 9 Robert Stachelski, Transportation Manager
29 3 5 3 5 8 R.T.E. 1651
28 3 2 3 2 5
27 2 1 2 1 3 Remarks
26 0 2 0 2 2
25 1 1 1 1 2
24 0 1 0 1 1
23 1 0 1 0 1
22 0 1 0 1 1
21 0 0 0 0 0
20 0 0 0 0 0
19 0 0 0 0 0
18 0 0 0 0 0
17 0 0 0 0 0
16 0 0 0 0 0
15 0 0 0 0 0
14 0 0 0 0 0
13 0 0 0 0 0
12 0 0 0 0 0
11 0 0 0 0 0
10 0 0 0 0 0
# of Lanes [ X ] Two [ ] Three [ ] Four [ ] Six Other
Median [ X ] Raised [ ] Painted [ ] Painted Center Line Complete section below to certify a copy of this original survey.
Bike Lanes [ ] Yes [ X ] No This document is a correct copy of the original in the PW Dept.
Grading [ X ] Flat [ X ] Sloped [ ] OCFCD Channel
Parking [ X ] Yes [ ] No Date Sign Title
Land Use [ ] Commercial [ ] Industrial [ X ] Residential City of Huntington Beach CA Public Works Department442
443
444
445
446
447
448
449
450
451
452
453
454
455
456
457
City of Huntington Beach
File #:21-745 MEETING DATE:10/5/2021
Item Submitted by Councilmembers Carr and Moser - Request that the City recognize October
as National Bullying Prevention Month, while reaffirming our City’s commitment against
bullying
Recommended Action:
We recommend the City Council endorse an ongoing commitment to addressing bullying in all its
forms by recognizing October as National Bullying Prevention Month, and that we reaffirm the City’s
Commitment to its 2012 Proclamation of the City Council Against Bullying.
City of Huntington Beach Printed on 9/29/2021Page 1 of 1
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CITY OF HUNTINGTON BEACH
CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT
TO: THE HONORABLE CITY COUNCIL
FROM: KIM CARR, MAYOR
NATALIE MOSER, CITY COUNCIL MEMBER
DATE: OCTOBER 5, 2021
SUBJECT: REQUEST THAT THE CITY RECOGNIZE OCTOBER AS NATIONAL BULLYING PREVENTION
MONTH, WHILE REAFFIRMING OUR CITY’S COMMITMENT AGAINST BULLYING
October is National Bullying Prevention Month (NBPM). This month-long event is a time for communities
to work together to prevent bullying in all forms by increasing awareness of its prevalence and impact on
children and people of all ages. NBPM is also an opportunity to promote kindness, acceptance, respect,
and inclusion.
Bullying is defined as the use of force, coercion, or threat, to abuse, aggressively dominate or intimidate.
The behavior is often habitual. It is characterized by hostile intent, perceived imbalance of power either
socially or physically, and repetition over a period of time. Research has shown that bullying often leaves
lasting negative effects, including chronic depression, increased risk of suicidal thoughts, anxiety
disorders, post-traumatic stress disorder, poor general health, self-harm, substance abuse, and difficulty
establishing trusting, reciprocal relationships. Research has also shown that many people who exhibit
bullying behaviors have themselves been the victims of bullying in the past.
In 2012, the City Council requested that the Human Relations Task Force conduct a study on bullying in
Huntington Beach, which led to the approval of a Proclamation of the City Council Against Bullying (see
attached). Additionally, the City has adopted and reaffirmed a Declaration of Policy about Human Dignity,
which states that everyone should be treated with courtesy and respect.
It is important to emphasize that bullying is not only isolated as a childhood problem, but affects
adolescents and adults, as well. In this moment of rising tensions and divisions within both our nation and
our community, we have witnessed increased aggressive behaviors and bullying tactics being used by
some groups and individuals. We firmly believe that our City Council should support efforts to raise
awareness regarding the harms that occur as a result of these behaviors, and that, as leaders, we model
and encourage positive ways for us to treat each other, regardless of our differences of opinion.
RECOMMENDED ACTION
I recommend the City Council endorse an ongoing commitment to addressing bullying in all its forms by
recognizing October as National Bullying Prevention Month, and that we reaffirm the City’s Commitment
to its 2012 Proclamation of the City Council Against Bullying.
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City of Huntington Beach
File #:21-746 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
Subject:
Item Submitted by Councilmembers Kalmick and Delgleize - Update our Residential Street
Paving Plan to enhance our Street Maintenance Cycles
Recommended Action:
We recommend that the City Council direct the City Manager to begin working with Public Works on
updating the City’s existing street zone maintenance program, with an emphasis placed on finding
ways to reduce the number of years between street maintenance cycles while maintaining a high
PCI.
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CITY OF HUNTINGTON BEACH
CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: DAN KALMICK, CITY COUNCIL MEMBER
BARBARA DELGLEIZE, CITY COUNCIL MEMBER
DATE: OCTOBER 5, 2021
SUBJECT: UPDATING OUR RESIDENTIAL STREET PAVING PLAN TO ENHANCE OUR STREET
MAINTENANCE CYCLES
The City is responsible for maintaining a network of approximately 200 miles of residential
streets. To facilitate that maintenance work, the City calculates and assigns a pavement
condition index (PCI) to each street which ranges from 0 to 100, with 0 being the worst and 100
being perfect condition. Further, to coordinate our paving program, the City has been divided
into 12 separate maintenance zone areas, whereby the City coordinates street work in one zone
each year.
Based on implementation of a consistent maintenance program, the City’s current average PCI
for our entire street network is 79. By comparison, in 2020, the average PCI for streets
throughout California was 62.
Currently, there are 2 zones left to complete before the City completes improvements in all 12
existing maintenance zone areas. This current year, the City is working in Zone 5, which includes
the downtown area. Next year, FY 2022/23, the City will complete work in Zone 2 (East most part
of the City adjacent to Fountain Valley and the Santa Ana River).
Given that the existing zone maintenance program is nearing completion, it would be prudent to
begin planning to reduce the number of maintenance zones moving ahead, to accelerate our
paving timelines throughout the City.
RECOMMENDED ACTION
I recommend that the City Council direct the City Manager to begin working with Public Works
on updating the City’s existing street zone maintenance program, with an emphasis placed on
finding ways to reduce the number of years between street maintenance cycles while
maintaining a high PCI.
462
City of Huntington Beach
File #:21-747 MEETING DATE:10/5/2021
REQUEST FOR CITY COUNCIL ACTION
Subject:
Item Submitted by Councilmembers Moser and Kalmick - Development of a plan to upgrade
the City Fleet to Alternative Fuel Vehicles
Recommended Action:
We recommend that the City Council direct the City Manager to prepare a plan to transition the entire
City fleet to alternative fuel vehicles.
City of Huntington Beach Printed on 9/29/2021Page 1 of 1
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CITY OF HUNTINGTON BEACH
CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: NATALIE MOSER, CITY COUNCIL MEMBER
DAN KALMICK, CITY COUNCIL MEMBER
DATE: OCTOBER 5, 2021
SUBJECT: DEVELOPMENT OF A PLAN TO UPGRADE THE CITY FLEET TO ALTERNATIVE FUEL
VEHICLES
As auto manufacturers begin transitioning away from internal combustion engines, there is a
practical need to begin preparing for the eventuality when gas and diesel cars and trucks are no
longer being mass produced. Recently, General Motors announced that they plan to eliminate
all gas- and diesel-powered vehicles by 2035 and Toyota by 2040.
Here in the City, we have approximately 900 vehicles in our fleet; approximately 7.5% of our
vehicles are currently powered by alternative fuels. As we continue moving ahead, it would make
sense for the City to have a plan developed to guide the transition of our entire fleet to alternative
fuel sources.
RECOMMENDED ACTION
We recommend that the City Council direct the City Manager to prepare a plan to transition the
entire City fleet to alternative fuel vehicles.
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