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Subject:ConsideraStudySessionontheproposedordinancelanguageandphasingforaSingle-Use Plastics Ordinance ConductaStudySessionontheproposedordinancelanguageandphasingforaSingle-UsePlastics Ordinance Presenter: Ursula Syrova, Environmental Programs Manager CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 9 CC 03-01-2022 9 of 174 CITY COUNCIL STAFF REPORT Meeting: March 1, 2022 Subject Consider a Study Session on the proposed ordinance language and phasing for a Single- Use Plastics Ordinance. Recommended Action Conduct a Study Session on the proposed ordinance language and phasing for a Single- Use Plastics Ordinance. Background Due to concern for litter, marine impact, and chemical migration into food, Cupertino banned restaurant use of expanded polystyrene (EPS) foam foodware in 2014, joining 13 other cities in Santa Clara County who adopted similar ordinances. In 2018, a State law AB 1884 went into effect which required full-service restaurants to only provide plastic straws upon request. This law will expand under AB 1276 in June 2022 to include other accessories such as utensils and condiments at all food facilities. Beginning in January 2023, State law AB 1200 will prohibit foodware containing per- and polyfluoroalkyl substances (PFAS). A detailed history is available in Attachment A. As shown in Figure 1, Cupertino residents and businesses discard over 300 tons of single- use foodware and expanded polystyrene packing material per year. This tonnage amount has likely increased because of the pandemic and increased takeout food orders. These tonnages include foodware brought in from outside the City. : CC 03-01-2022 10 of 174 Figure 1: Tons of single-use disposable foodware being disposed of in Cupertino by type per 2018 and 2019 waste characterization studies While some plastic foodware containers are currently accepted as recyclable in Cupertino, recycling does not address all problems with plastics. Meanwhile, foodware containers gram because they take too long to degrade. Biodegradable Products Institute (BPI)-certified compostable plastic bags are allowed for collecting food scraps. If bio-plastics are disposed in landfill they create methane as they degrade. If they are disposed of as recyclable or compostable they must be sorted out as contaminants and sent to landfill. There is no place for bio-plastics in Fiber-based foodware items such as paper or bagasse cups and containers, and wood or bamboo ut acceptable, they are not as nutritive for the compost process as food scraps or yard trimmings. Fiber-based items also still require resource inputs during production for just a few minutes of use. Thus, fiber-based items do not fully address environmental concerns arising from single-use foodware. Thus, shifting to reusable foodware wherever possible better addresses resource use, health, economic, and environmental concerns as further described in Attachment A on page 2. City Council directed that a Single-Use Plastics foodware ordinance become a City Work Program item. The goal was to reduce the use of single-use plastic foodware such as cups, plates, containers, straws, utensils, and other accessories like spill plugs and stir sticks. 21 CC 03-01-2022 11 of 174 Discussion Environmental Programs Division staff prepared proposed amendments to Municipal Code Chapter 9.15 that would enact a dramatic shift away from single-use plastic foodware and toward compliant compostable and reusable foodware. Staff is seeking input from City Council on this suite of elements and their phasing to determine the best fit for Cupertino businesses and customers. Cupertino currently prohibits food service providers from using EPS foam foodware. The amended language proposes to expand on that by banning single-use plastic foodware from use, banning sale of bio-plastic foodware, and requiring reusables for dining in. The two phases and their elements are summarized here and presented in Attachment B, which serves as an index to the draft ordinance itself (Attachment C). The first phase of the ordinance mirrors the requirements of State law AB 1276 and requires that food service ware accessories such as utensils, chopsticks, condiment cups and packets, straws, stirrers, splash sticks, and cocktail sticks be provided only upon request by customers. These requirements become effective on June 1, 2022. The second phase of the proposed ordinance includes elements that would go into effect one year later, on June 1, 2023: 1.Prohibit the use of non-complaint food service ware by food providers: Continue to prohibit use of expanded polystyrene foam food service ware. Prohibit use of single-use plastic items (even if accepted as recyclable). Prohibit use of compostable food service ware that contains PFAS (as required by AB1200). Prohibit use of bio-plastics (compostable plastics). 2.Require reusable food service ware for dining on site: Reusable food service ware must be provided for customers dining on site at capacity or a contract with a dishwashing service. Ɏ 3.Prohibit the sale of certain non-compliant foodware: Ban local sale of expanded polystyrene foam and bio-plastic food service ware. Ɏ 4.Exemptions: Paper, wood, bamboo, and other fiber-based compostable food service ware llowed. Containers made entirely from aluminum and aluminum foil would be allowed. Plastic straws would be allowed for those with medical need. Ordinance does not apply to food prepared and packaged outside of the city. 22 CC 03-01-2022 12 of 174 Compliant single-use food service would still be allowed for taking home leftovers from dine-in situations. Temporary exemptions allowed if additional time needed to comply. Temporary exemptions allowed for significant economic hardship. Temporary exemptions allowed for unique packaging hardship. Allows for compliant paper food liners, wrappers, sleeves, bags, and foil wrappers. Sustainability Commission Recommendation The Sustainability Commission reviewed a larger list of proposed elements, exemptions, and phasing on January 20, 2022. The commissioners raised concerns for existing and new businesses and maintaining Cupertino as a desirable place to do business. They also expressed interest in knowing what surrounding cities have done or are planning to do. Ultimately, they recommended the language and phasing presented to them at that time with the addition of: Offer technical and financial assistance to businesses during the year before enforcement to enable transition. -Use Carryout Bag Ordinance to prohibit plastic bags used for takeout food orders and require produce bags to be compostable. Enable a pilot of reusable takeout foodware in the city. Business models already exist where reusable containers are provided for takeout orders and then returned by customers, sanitized properly, and re-deployed to restaurants. From an environmental perspective all the proposed elements originally considered and recommended are valuable. However, after further consideration of what neighboring cities have done and are planning to do, the impact of COVID on the prevalence of takeout food, and staff ability to enforce all the proposed elements, a more measured approach is recommended. The proposed approach described above would place Cupertino as a leader in Santa Clara County for reducing the prevalence of single-use plastic foodware and create a plan for future additional amendments. Elements Recommended for Future Consideration Incorporating items suggested by the Sustainability Commission, staff recommends the following elements for consideration in 2024: 1.Ban local sale of single-use plastic foodware items: This would restrict local sale of plastic cups, utensils, containers, and accessories made from traditional plastic. Stores would still be able to sell fiber-based compostable items. 2.Reusable to-go foodware pilot: Consider the availability of reusable to-go foodware business models and pursue a pilot in partnership with interested local food and beverage providers. 3.Ban local sale and use of other EPS products beyond food service ware: a.Packing materials such as peanuts and blocks 23 CC 03-01-2022 13 of 174 b.Pool or beach toys, coolers, and ice chests where the foam is not fully encapsulated within a more durable material 4.Charges to customers for single-use foodware:Evaluate the state of the COVID pandemic and the use of single-use foodware for pre-ordered takeout dining. Based on that evaluation, consider the idea of requiring a charge for single-use cups, containers, or both to further encourage use of reusable foodware. Adding a charge for a single-use item is a well-established method of increasing use of reusable alternatives, as demonstrated by charges for single-use carryout grocery bags. Concern over proximity to other customers while dining on site at a restaurant or café during COVID has meant a big shift to more takeout orders that are pre- prepared for pickup or delivery. Ordering takeout for pickup or delivery precludes using a cup or container from home, so there is no easy way to avoid the charge the way there is with a grocery bag or walk-in service with a coffee travel mug. 5.Reusables at large events: Events of more than 100 attendees would be required to offer a percentage of prepared food and beverages in reusable containers. Containers could for instance be souvenir items or returnable for a deposit refund. 6.-Use Carryout Bag Ordinanceto prohibit plastic bags used for takeout food orders and require produce bags be compostable. Impact on food service providers, including City facilities Economically, the impact of the ordinance could be mixed. With the implementation of the first phase per AB 1276 to offer utensils and accessories only on demand, providers could see cost savings from not giving out unwanted items. When the additional foodware requirements go into effect, providers using single-use plastic or bio-plastic food ware will need to begin purchasing and using compliant PFAS-free compostable or aluminum foodware. The cost of transitioning to use compliant products could vary widely and is not universally more expensive. Figure 2 shows what types of single-use items are being used by existing businesses based on the survey conducted in summer 2021. As indicated by the results most providers are using a combination of products. Figure 2: Single-use foodwareused by Cupertino businesses by type 24 CC 03-01-2022 14 of 174 Providers using mostly bio-plastics for takeout orders could see cost savings when switching to fiber-based alternatives versus those providers using traditional single-use plastics which could see a price increase. Attachment D shows cost comparisons for a variety of types of foodware. As a representative example, Figure 3 below shows a hinged container made from different materials and how the cost can vary widely depending on source and volume. Cupertino would like to thank the City of Mountain View for sharing this data and imagery, which was prepared in Fall 2021 and verified to be an accurate representation of current price ranges. Figure 3: Price survey of hinged containers Reusables for Dining In - Dishwashing The requirement to serve food on reusable foodware for dining-in could mean a need for increased dishwashing capacity (including labor) for providers primarily using single-use foodware even when diners stay on site. For providers serving high volumes of meals eaten on site, this shift could require installing additional dishwashers and hiring 1 additional staff or contracting with a dishwashing service. However, case studies from an organization that has assisted several hundred businesses in the Bay Area to switch to reusables for dining in, show savings of thousands of dollars a year with relatively small upfront investment. According to a survey of food businesses conducted in summer 2021, 71% of businesses who responded to the question are using a three-sink system for dishwashing, while 15% have mechanized washers. Businesses needing to install or increase dishwashing capacity may apply for a temporary exemption based on economic hardship or needing extra time to comply. Based on the items proposed above, Figure 4 provides a high-level summary of potential impacts by common type of food provider. Њ wĻŷźƓƉ 5źƭƦƚƭğĬƌĻ ĭğƭĻ ƭƷǒķźĻƭʹ ŷƷƷƦʹΉΉǞǞǞ͵ƩĻƷŷźƓƉķźƭƦƚƭğĬƌĻ͵ƚƩŭΉĬǒƭźƓĻƭƭĻƭ 25 CC 03-01-2022 15 of 174 Figure 4: Summary of Common Food Provider Types in Cupertino and Potential Impacts (based on business license data) bǒƒĬĻƩ ƚŅ і ƚŅ ǤƦĻ ƚŅ Cƚƚķ tƩƚǝźķĻƩ 9ǣƦĻĭƷĻķ LƒƦğĭƷƭ .ǒƭźƓĻƭƭĻƭ ƚƷğƌ aƚķĻƩğƷĻʹ hǝĻƩ ŷğƌŅ ƚŅ ŅǒƌƌΏƭĻƩǝźĭĻ 5źƓĻΏźƓ ƩĻƭƷğǒƩğƓƷƭ ƷŷğƷ ƚŅŅĻƩ ķźƓĻΏ АЌ ЍВі ΛCǒƌƌΏƭĻƩǝźĭĻ ƩĻƭƷğǒƩğƓƷƭΜ źƓ ƦƩƚǝźķĻ ƩĻǒƭğĬƌĻƭͲ ĬǒƷ ƭƚƒĻ ƦƩƚǝźķĻ ƚƓƌǤ ƭźƓŭƌĻΏ ǒƭĻ ƦƌğƭƷźĭ ƚƩ ğ ĭƚƒĬźƓğƷźƚƓ ƚŅ ĬƚƷŷ Iźŭŷʹ CğƭƷΏŅƚƚķΉĭğƭǒğƌ ağƆƚƩźƷǤ ƚŅ ŅğƭƷΏŅƚƚķΉĭğƭǒğƌ ΛLƓĭƌǒķĻƭ ƌƚĭğƷźƚƓƭ ƷŷğƷ ğƌƭƚ ƌƚĭğƷźƚƓƭ ƚŅŅĻƩ ƚƓƌǤ ƭźƓŭƌĻΏ ƚŅŅĻƩ ķźƓĻΏźƓ ǞźƷŷ ƌźƒźƷĻķ ǒƭĻ źƷĻƒƭ ƚƩ ğ ĭƚƒĬźƓğƷźƚƓ ЌЍ ЋЌі ƭĻğƷźƓŭͲ ĬǒƷ ƚƦĻƩğƷĻƭ ƦƩźƒğƩźƌǤ ƚŅ ƦƩƚķǒĭƷƭ ƭǒĭŷ ğƭ ƭźƓŭƌĻΏ ƷŷƩƚǒŭŷ ƷğƉĻƚǒƷ ƚƩķĻƩƭΜ ǒƭĻ ƦƌğƭƷźĭƭ ğƓķ ƦğƦĻƩΉŅźĬĻƩΏ ĬğƭĻķ źƷĻƒƭ aƚķĻƩğƷĻʹ ağƆƚƩźƷǤ ƚŅŅĻƩ ƚƓƌǤ ƭźƓŭƌĻΏ /ğŅĽΉĬğƉĻƩǤΉķĻƭƭĻƩƷ ЋЋ ЊЎі ǒƭĻ ķźƭƦƚƭğĬƌĻƭ Iźŭŷʹ IźŭŷΏǒƭğŭĻ ƚŅ ƭźƓŭƌĻΏǒƭĻ .ƚĬğ ƷĻğ ЊЌ Ві ƦƌğƭƷźĭ ĭǒƦƭ ğƓķ ƭƷƩğǞƭ \[ƚǞʹ {źƓŭƌĻΏǒƭĻ źƷĻƒƭ ƓƚƷ DƩƚĭĻƩǤΉ{ǒƦĻƩƒğƩƉĻƷƭ Џ Ѝі ƦƩźƒğƩźƌǤ ŭźǝĻƓ ƚǒƷ aƚķĻƩğƷĻʹ /ğƷĻƩźƓŭ ƩǒĭƉƭ Ћ Њі ƭĻ ƚƓƌǤ ķźƭƦƚƭğĬƌĻƭ Grocery stores Grocery stores selling prepared food would face the same issues as food providers and would additionally need to adjust any on-site packaging of produce, such as the practice of containing fruits or vegetables on EPS trays with plastic film wrap. In other jurisdictions, exemptions have been made for containers of cut fruit or salads prepared by the grocery store and packaged in clear plastic on site and made available for sale. If the store sells single-use plastic foodware, those items will need to be eliminated and compliant alternatives made available for sale. Retailers There are stores in Cupertino that sell single-use foodware, including grocery stores, convenience stores, big box stores, and specialty stores. To get an estimate of economic impact if the sale of single-use plastic foodware were prohibited, staff contacted these stores but received limited if any information on the sales numbers. It should be noted 26 CC 03-01-2022 16 of 174 that party supplies tend to be single-use plastic, so stores specializing in those items might feel the impact more strongly while customers might choose to buy the same items online or from stores in neighboring cities. Customers Increased costs to food providers would likely be passed on to customers, but it is difficult to estimate because of the wide variety of options and pricing for foodware and as noted above, not all providers may see a cost increase. Food providers surveyed said they were concerned about customer experience with different types of foodware. When customers were surveyed, however, they were strongly in favor of switching away from single-use plastics and said it would not change where they dined. What are other jurisdictions doing? A growing number of jurisdictions in California have passed or are considering passing some form of regulation on single-use plastic foodware. No other city in Santa Clara County or the wider Bay Area has yet passed the full suite of elements contemplated in this draft ordinance and the future possible amendments, but Figure 5 shows a survey of neighboring jurisdictions for many of the elements. 27 CC 03-01-2022 17 of 174 Figure 5: Comparison of Foodware Ordinances in Neighboring Jurisdictions Outreach to Businesses and Customers Tounderstand the current state, needs, and concerns of local businesses on the topic of single-use foodware and some of the other policy elements under consideration, 100 businesses (51% of food service places with active business licenses at the time) were interviewed via surveys, over 80 of which were conducted in person. Survey responses were also received from 111 customers. Staff also presented twice to the Chamber of Commerce and once to the Teen Commission and a dedicated web page is available at 28 CC 03-01-2022 18 of 174 engagecupertino.org/single-use-plastics. A more detailed account of that outreach is on page 6 of Attachment A. More recent outreach includes a postcard and an email about this study session mailed out to food service businesses and an article in the February edition of the Business Connect newsletter. Next Steps If so directed by Council, feedback from this study session will be incorporated into the draft language and the ordinance could appear for a first reading on April 5, 2022 ȌɎ The , which is focused this year on the broader topic of plastics, is scheduled for March 26, 2022. While not addressing food service ware specifically, the event will occur before the first reading of the draft ordinance and the two processes will cross-inform and support each other.Ɏ Ɏ Sustainability Impact The proposed ordinance is consistent with two actions in the Cupertino Climate Action Plan as well as California State law. The proposed ordinance encourages a push towards more reusable foodware which is consistent with Climate Action Plan Measure C-SW-1: Zero Waste Goal. The proposed ordinance promotes the collection of organics from the local waste stream, which will reduce greenhouse gas emissions from the landfill consistent with Climate Action Plan Measure C-SW-2: Food Scrap and Compostable Paper Diversion. Enabling organic items to reach the compost stream supports the diversion -lived climate pollutant reduction regulations. Fiscal Impact Fiscal impact will depend largely on direction received from Council. If directed to proceed with an ordinance, staff recommends contracting for technical and financial requirements. A consultant who is deeply knowledgeable about food service business requirements, regulations, supplies, and challenges who also has experience with making these types of transitions will best be able to provide such assistance. The cost to hire technical assistance as described is expected to be approximately $100,000 to cover support both before and after the implementation of the most significant changes, including offering a defined number of small grants to help cover the costs of switching to reusables or purchasing compliant foodware. Of the money budgeted to the Single-Use that approximately $60,000 will be available that could be allocated for a technical assistance contract. The balance would be drawn from the Resource Recovery Enterprise Fund. Ongoing compliance monitoring and support can be conducted by existing staff conducting inspections and outreach for stormwater pollution prevention program and SB 1383. _____________________________________ 29 CC 03-01-2022 19 of 174 Prepared by: Ursula Syrova, Environmental Programs Manager Reviewed by: Jimmy Tan, Acting Director of Public Works Approved by: Dianne Thompson, Assistant City Manager Approved for Submission by: Jim Throop, City Manager Attachments: A Sustainability Commission Staff Report B Single-Use Plastics Ordinance Elements and Phasing C Single-Use Plastics Draft Ordinance D Single-Use Foodware Cost Comparisons 2: CC 03-01-2022 20 of 174 SUSTAINABILITY COMMISSIONSTAFF REPORT Meeting: January 20, 2022 Subject Considerdraft ordinance language and phasing for a Single-Use Plastics Ordinance Recommended Action Discuss and recommend that City Council adopt the proposed ordinance languageand phasing for a Single-Use Plastics Ordinance Background In 2014, Cupertino City Council adopted an ordinance to ban food vendors from selling or otherwise providing prepared food in expanded polystyrene foam food service ware. In 2017, Cupertino City Council adopted a Zero Waste Policy, which includes support for policiesthat demonstrate a preferenceforless toxic and more durable products over single-use products, acknowledges that reusable foodware is preferable to single-use, and seeks to reduce the proliferation of unnecessary plastic single-use food service ware and packaging. In 2018, City staff beganparticipating in regional discussions and working groups on the topicof single-use foodware and model policy language. That work was inspired in part by changes in international markets for recycled plastics in 2018, concerns about plastic waste and microplastics in the environment, and health concerns from chemicals leaching into food. In 2018, California adopted Assembly Bill (AB) 1884 to require plastic straws to be provided only upon request. In 2019, the Youth Climate Action Team brought a request torestrict single-use plasticfood service wareto the Cupertino City Council. The issue was alsoraised multiple times at Sustainability Commission meetings and was part of the Commission’s suggested City Work Program items for Fiscal Year 2020-2021. The City Council accepted the Commission’ssuggestion, and the Single-Use Plastics Ordinancebecame a City Work Programitemfor Fiscal Year 2020-2021 and then was continued on to the Fiscal Year 2021-2022 City Work Plan. 1 31 CC 03-01-2022 21 of 174 At the October 2021 meeting of the Sustainability Commission, a single-use plastics subcommittee was formed. The Committee met once in December 2021 to consider policy options and phasing. Beginning on June 1, 2022, state law will require food facilities to make certain single-use food service ware accessories and standard condiments packaged for single use available only on request. Beginning January 1, 2023, AB 1200 will prohibit the sale or distribution of food packaging (including fiber-based food service ware) containing per- and polyfluoroalkyl substances (PFAS). Discussion City staff has prepared a proposed ordinance amending Municipal Code Chapter 9.15, which prohibits the use of expanded polystyrene (EPS) foam foodware. The proposed ordinance includes requirements that will reduce the amount of single-use plastic food service ware in Cupertino and encourage a shift toward more reusable food service ware for dining on location, for takeout, and at large events. It also proposes expanding the prohibition on EPS to local sale of certain non-foodware items such as packing peanuts. Multiple life cycle analyses (LCAs) show reusable food service ware has less environmental impact compared to single-use products once a break-even point of repeated use occurs. LCAs consider metrics such as greenhouse gas emissions, energy inputs, and water consumption from the materials extraction phase through consumption 1 and finally to disposal. LCAs do not consider the impacts when products become litter as opposed to being disposed of properly, the impacts of plastic pollution in the environment, or the human health impacts of chemicals migrating from food service ware 2 into food and beverages. Reusables do have advantages over single-use products in these areas. Elements and phases of the proposed ordinance are summarized here and presented in Attachment A. The first phase of the ordinance mirrors the requirements of state law (AB 1276) and requires that food service ware accessories such as utensils, chopsticks, condiment cups and packets, straws, stirrers, splash sticks, and cocktail sticks be provided only upon request by customers. These requirements become effective on June 1, 2022. 1 Oregon Department of Environmental Quality. “Food Service Ware LCA Harmonization,” Prepared for the City of Portland Bureau of Planning and Sustainability (BPS). 2019. Retrieved from https://www.oregon.gov/deq/FilterDocs/FoodLCAreport.pdf 2 Muncke, Jane et al. “Impacts of food contact chemicals on human health: a consensus statement.” Environmental health: a global access science source vol. 19,1 25. 3 Mar. 2020, doi:10.1186/s12940-020- 0572-5. Retrieved from https://pubmed.ncbi.nlm.nih.gov/32122363/ 2 32 CC 03-01-2022 22 of 174 The second phaseof the ordinance includes elements that would go into effect one year later, on June 11, 2023. These requirements include: 1. Prohibiting the use of non-complaint food service ware by food providers: Continue to prohibit use of expanded polystyrene foam food service ware Prohibit use of single-use plastic items (even if accepted as recyclable) Prohibit use of compostable food service ware that contains PFAS Prohibit use of bio-plastics (compostable plastics) 2. Reusable food service ware required for dining on premises: Reusable food service ware must be provided for customers dining on site at the food provider’s location. Requires sufficient dishwashing capacity or a contract with a dishwashing service. 3. Imposing the following nonreusable beverage cup and food container charges: $0.25 for a disposable cup and $0.25 for a disposable container Charges kept by the business 4. Prohibiting the sale of non-compliant foodware: Ban local sale of single-use plastic, expanded polystyrene foam, and bio-plastic food service ware 5. Prohibit sale of other expanded polystyrene products beyond food service ware: Packing materials such as peanuts and blocks Pool or beach toys, coolers, and ice chests where the foam is not fully encapsulated within a more durable material 6. Exemptions: Paper, wood, bamboo, and other fiber-based compostable food service ware items accepted in the City’s compost program would be allowed Containers made entirely from aluminum and aluminum foil would be allowed Plastic straws allowed for those with medical need Does not apply to food prepared and packaged outside of the City Single-use food service ware still allowed for taking home leftovers from dine- in situations Temporary exemptions allowed if additional time needed to comply Allows for compliant paper food liners, wrappers, sleeves, bags, and foil wrappers Exemption from charges for customers with certain economic hardships Customers are allowed to bring their own containers Businesses may refuse to use a customer's container if it is not suitable or is unsanitary 3 33 CC 03-01-2022 23 of 174 Exemption to packaging requirements for shipments received from outside the city or materials reused within the City The third phase of the ordinance would go into effect on June 1, 2024 and would address prepared beverage and food containers used at events. Covered events would be required to comply with the following requirements: 25% of prepared beverage sales in reusable containers, phasing to 50% by June 1, 2026 25% of prepared food sales in reusable containers starting 6/1/2026 phasing to 50% by June 1, 2028 Subcommittee Feedback The Sustainability Commission formed a subcommittee to consider elements of the single- use plastics ordinance, and the subcommittee met on December 16, 2021. Subcommittee members Anna Weber and Meera Ramanathan heard presentations from staff and considered the following questions: 1) Who should be covered by the ordinance – all food providers, or just food vendors? Citing concern about food service ware in use by health care providers, subcommittee members suggested focusing on food vendors first with a broader set of food providers considered at a later phase. However, because compliant single-use food service ware could be used in those settings, “providers” is recommended. 2) Speed of the phasing The subcommittee suggested allowing more time for businesses to make the required changes called for in phase two, and therefore phase two was pushed to one year after implementation of phase one. The subcommittee had concerns about the dishwashing requirements and economic impacts of reusables for dine-in services with a sensitivity to wanting to remain welcoming to existing and new businesses. The proposed ordinance includes waivers and temporary exemptions in cases of economic hardship or other challenges. The subcommittee was in favor of providing incentives, such as technical assistance and grant funding. There is at least one independent organization that provides financial assistance to restaurants seeking to deploy reusable food service ware. The City could also consider hiring a consultant to provide technical assistance to help make changes, which could include mini grants to purchase reusable food service ware. 3) Ban plastic single-use food service ware items, even if recyclable? Strong support for such a ban, which was also recently adopted by the City of Mountain View. 4 34 CC 03-01-2022 24 of 174 4)Mandate charges or credits to encourage use of reusables, either brought in by customers or for dine-in? While the subcommittee voiced support for credits for customers bringing their own cups, charges are more common and have been shown to be more effective than credits. The question of a charge for takeout containers in addition to a charge for single-use cups was not fully considered and requires further discussion. 5)Ban the saleof non-compliant food service ware items? The subcommittee supported the idea of banning the sale of compostable plastics first, as those are not accepted for composting in Cupertino, they do not have a better LCA than other plastics, and they create customer confusion and end up contaminating both the recycling and compost streams. After a discussion of economic equity, the suggestion was made to phase in a ban on the sale of traditional plastic food service ware, especially if there is a significant price difference. Note that Mountain View has adopted an ordinance banning the sale of both bio-based and traditional single-use plastic food service ware items beginning January 1, 2023. 6) Ban local sale and use of expanded polystyrene foam packing materials? There was support for including such a ban, which would be limited to packing that occurs within the City. 7) Require large events of 100 people or more to provide a percent of their beverages and food in reusable containers? The subcommittee supported that idea, and San Francisco has already adopted rules requiring that 10% of prepared beverages be provided in reusable cups at large events. 8) Ban City use and purchase of single-use bottled water? While not addressed in the ordinance, this item had support from the subcommittee and could be included in the next update of the Environmentally Preferable Purchasing Policy. 9) Reusable Take-Out Food Service Ware While not addressed in the ordinance elements, the subcommittee expressed its desire to learn more about businesses that provide reusables for takeout food and beverages. There are several businesses already providing this service in San Francisco and Berkeley, and as a service available to hire for events. Such a service is planned for demonstration at the 2022 Earth Day and Arbor Day Festival to work in partnership with any food trucks, but the subcommittee members also suggested a pilot of such a third-party business model in Cupertino. 5 35 CC 03-01-2022 25 of 174 Outreach to Businesses and Customers In the summer of 2021, City staff contracted with Environmental Innovations (EI) to conduct outreach to food service businesses and customers about single-use plastic foodware and the potential ordinance. EI partnered with the Peninsula Chinese Business Association to do direct food facility outreach, who surveyed 100 businesses (51% of food service businesses with active business licenses), many of them via in-person interviews. EI and City staff also conducted additional interviews with several institutional food service providers such as West Valley Community Services, Apple, and the Forum, seeking to understand the needs of large service providers and the concerns of special interest groups representing youth, low-income, and persons with disabilities. Responses from food facilities included independently owned and franchised, fast food and sit- down, boba tea shops, grocery stores, coffee shops and bakeries. While there was openness to switching to a different type of product, the primary concerns about switching to compostable food service ware were increased cost and availability of compliant products, customer satisfaction, and the administrative burden of imposing fees. 57% of those surveyed indicated they were interested in technical or financial assistance to help make the required changes. When asked about switching to reusable food service ware, businesses were also open to that idea, but worried about changing their operations, had concerns about safety against covid, and thought that staffing for dishwashing or dish storage might be an issue.65% said they would be interested in receiving information about reusable to-go foodware services. The survey answers provided by customers showed strong support for limiting single- use plastic food service ware, that environmentally friendly practices are important to customers, and that customers worry about the amount of waste from to-go foodware. 88% of the 111 customers who responded said they have received unwanted single-use foodware when ordering takeout, and 91% said they would still go to a restaurant that stopped using single-use plastic. 39% indicated that they would be interested in a service that provided to-go containers that you could return for sanitizing and reuse. 67% said that being offered a discount would encourage them to bring their own cup or container, although the distinction was not made between a charge and a discount. Staff and EI presented to the Teen Commission in August 2021 and received supportive feedback. Staff also presented to the Chamber of Commerce in August 2021, and the response was favorable. In September, the City staffed a table at the Fall Festival and promoted community feedback via the customer survey, and the in-person conversations on the topic were largely favorable. Staff plans to present to these groups again with the more specific proposed language and will encourage community attendance at a planned Council Study Session on March 1, 2021. To track the ordinance as it progresses and provide information, the City also launched a dedicated web page at engagecupertino.org/single-use-plastics. CEQA 6 36 CC 03-01-2022 26 of 174 This Ordinance is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. In this circumstance, the proposed action to regulate the use of single-use foodware by food providers and local sale of prohibited foodware and other expanded polystyrene products would have no or only a de minimis effect on the environment because reducing disposable plastic foodware items such as straws, utensils, and stirrer sticks and having compostable alternatives offered only upon request and other provisions of the ordinance would not have the potential for causing a significant effect on the environment. In addition, if the proposed ordinance were a project under CEQA, the project would be exempt from CEQA under CEQA Guidelines section 15307, which exempts from CEQA actions taken by regulatory agencies for the protection of the environment. The foregoing determination is made by the City Council in its independent judgment. Next Steps Staff plans to conduct a Study Session before City Council on March 1, 2022 followed by a first reading of the ordinance on April 5, 2022. The Mayor’s Cup Challenge, which is focused this year on the broader topic of plastics, is scheduled for March 26, 2022. While not addressing food service ware specifically, the event will occur before the first reading of the draft ordinance and the two processes will cross-inform and support each other. Sustainability Impact The proposed ordinance is consistent with two actions in the Cupertino Climate Action Plan as well as California State law. The proposed ordinance encourages a push towards more reusable foodware which is consistent with Climate Action Plan Measure C-SW-1: Zero Waste Goal. The proposed ordinance promotes the collection of organics from the local waste stream, which will reduce greenhouse gas emissions from the landfill consistent with Climate Action Plan Measure C-SW-2: Food Scrap and Compostable Paper Diversion. Enabling organic items to reach the compost stream supports the diversion requirements of California SB1383, the state’s short-lived climate pollutant reduction regulations. Fiscal Impact Staff recommends contracting for technical assistance to help Cupertino’s approximately 200 food service businesses understand and adjust to the requirements of the ordinance if it is adopted. A consultant who is deeply knowledgeable about food service business requirements, regulations, supplies, and challenges who also has experience with making 7 37 CC 03-01-2022 27 of 174 these types of transitions willbest be able to provide such assistance.In anticipation of ordinance approval, funding for an RFP to hire technical support will be put forward as part of the FY 22-23 budget in the amount of $80,000 to cover support both before and after the implementation of phase two. Of the $100,000 budgeted to the Single-Use Plastics Ordinance and Mayor’s Cup Challenge City Work Program Item, it is anticipated that approximately $60,000 could be allocated for a technical assistance contract. The balance would be drawn from the Resource Recovery Enterprise Fund. _____________________________________ Prepared by: Ursula Syrova, Environmental Programs Manager Reviewed by: Chad Mosley, Acting Director of Public Works Attachments: Single-Use Plastics Ordinance Elements and Phasing Draft Single-Use Plastics Ordinance 8 38 CC 03-01-2022 28 of 174 Attachment B Cupertino DRAFT PROPOSED Single-Use Plastics Ordinance REGULATION OF SINGLE-USE FOOD SERVICE WARE BY FOOD PROVIDERS 6/1/2022 Enforcement date per AB1276 9.15.110AACCESSORIES ONLY UPON CUSTOMER REQUEST Accessories and condiments only on request and unbundled for dine-in, take-out, and A.1 delivery apps A.2 Disallow self-serve stations? A.3 Plastic straws may be retained and provided as an accommodation A.4 Encourage bulk condiment dispensers rather than individual packets Online ordering for pickup/delivery must provide option to affirmatively opt in to choosing A.5 each accessory piece individually Exceptions for instances of drive-through and food deliveries in which items like cup lids, lid A.6 plugs, hot sleeve cups may be offered to prevent spills or safely transport food A.7 For delivery orders, accessories allowed to prevent spills and deliver safely. 6/1/20231 year after accessories phase 9.15.110BUSE OF NON-COMPLIANT FOODWARE PROHIBITED No sale or distribution of Prepared packaged by food providers (including City Facility B.1 Prepared Food Providers) in Cupertino using: B.1.a Expanded Polystyene (EPS) foam B.1.b Single-use plastics (even if accepted as recyclable) Compostables with PFAS B.1.c Allow PFAS-free paper, wood, bamboo, or fiber-based compostable items B.1.d Bio-plastics ("compostable plastics") 9.15.120(G)Prepackaged food from outside the City exempted 9.15.120(I)Allow aluminum containers and foil (as exemption) Director of Public Works (or designee) to maintain list of suitable products and/or provide B.2 reference to an approved list B.3 Exemption for food/beverages prepared and packaged outside of the City 9.15.110CREUSABLE FOOD SERVICE WARE FOR DINING ON PREMISES C.1 Dine-in requires Reusables Allowable: disposable paper food wrappers, sleeves, and bags; foil wrappers; paper napkins; C.1 paper tray and plate liners; and straws if meet requirements. C.2 Condiments shall not be in single-service packets C.3 Definition of on-premises as belonging to food provider or shared New building permits trigger condition of approval requiring dishwashing capacity to allow C.4 reusables on-premises. New and renewed business licenses trigger condition of approval requiring dishwashing C.4 capacity to allow reusables on-premises. C.5 Dine-in still allows nonreusable containers for leftovers. C.6 Waiver/extension option for existing restaurants without dishwashing capacity 9.15.110DSALE OR DISTRIBUTION OF NON-COMPLIANT FOODWARE PROHIBITED D.1 Ban sale of compostable plastic food service ware 39 CC 03-01-2022 29 of 174 D.1 Includes ban on sale of EPS foodware D.2 Director may adopt or refrence a list of compliant products EXEMPTIONS Exemptions available for unique packaging hardship, unused inventory, significant economic 9.15.120A hardship, or extra time needed to comply B Unique packaging hardship C Unused inventory D Significant economic hardship E Needs additional time F Method of applying for exemption with time limit of 1 year G Prepackaged food is exempt H Food service ware that is entirely aluminum foil-based is exempt I Emergencies are exempt NEW SECTION 9.15.125 CONCERNING RECORDKEEPING AND INSPECTION 9.15.125 All food providers must keep records of purchase of single-use foodware showing A compliance B Records to be made available for inspection by the City C False or incomplete information is a violation 3: CC 03-01-2022 30 of 174 Attachment C ORDINANCE NO. __________________ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING CITY CODE TO CHANGE THE NAME OF CHAPTER 9.15, ADOPT NEW SECTIONS 9.15.090 AND 9.15.125, AND AMEND SECTIONS 9.15.100, 9.15.110, 9.15.120, AND 9.15.130 TO REGULATE THE USE OF SINGLE-USE FOOD SERVICE WARE BY FOOD PROVIDERS AND REGULATE THE SALE OF SINGLE-USE FOOD SERVICE WARE AND EXPANDED POLYSTYRENE FOAM PACKING MATERIALS 1.The City Council of the City of Cupertino finds that: WHEREAS, on February 5, 2014, the City of Cupertino adopted an ordinance to prohibit food vendors from providing prepared food using food packaging containing polystyrene foam, currently codified as Chapter 9.15 of the City Code; and WHEREAS, this ordinance continues to prohibit the sale and use of polystyrene foam food service ware and also further regulates nonreusable food service ware and food service ware accessories in Cupertino; and WHEREAS, the State adopted AB 619 in July 2019, which allows consumers to supply their own reusable containers for filling or refilling and requires that food establishments have an established procedure for safely accepting reusable containers; and WHEREAS, the State recently adopted Assembly Bill 1200, which prohibits the sale or distribution of food packaging made primarily from paper, paperboard, or other natural fiber that contains per- and polyfluoroalkyl substances (PFAS) in California beginning January 1, 2023; and WHEREAS, Assembly Bill 1200 does not include a verification mechanism to assist food providers in identifying whether the food packaging contains PFAS; and WHEREAS, this ordinance requires that food service ware used by a food provider in Cupertino be certified as PFAS-free by an independent third-party certifying organization to assist Cupertino food providers in identifying PFAS-free food service ware; and WHEREAS, the State also recently adopted Assembly Bill 1276, which prohibits the distribution of single-use food service ware accessories and standard condiments packaged for single use by food providers except upon request by the consumer; and 1 41 CC 03-01-2022 31 of 174 Ordinance No. __________ Page 2 WHEREAS, a prohibition of plastics for specified nonreusable food service ware goals and is more restrictive than the recently enacted State law; and WHEREAS, this ordinance is consistent with the City of Zero Waste Policy and Climate Action Plan that seek to reduce solid waste at its source and reduce nonreusable food service ware and packaging; and WHEREAS, the City Council of the City of Cupertino held a duly noticed public hearing on \[date\], and after considering all testimony and written materials provided in connection with that hearing introduced this ordinance and waived the reading thereof; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUPERTINO DOES ORDAIN AS FOLLOWS: SECTION 1. Adoption. The Cupertino Municipal Code is hereby amended as set forth in Attachment A. SECTION 2: Severability and Continuity. The City Council declares that each section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance. If any section, sub-section, paragraph, sub-paragraph, sentence, clause or phrase of this ordinance is held invalid, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of such portion, and further declares its express intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated. To the extent the provisions of this Ordinance are substantially the same as previous provisions of the Cupertino Municipal Code, these provisions shall be construed as continuations of those provisions and not as an amendment to or readoption of the earlier provisions. SECTION 3: California Environmental Quality Act. 42 CC 03-01-2022 32 of 174 Ordinance No. __________ Page 3 This Ordinance is not a project under the requirements of the California Environmental because it has no potential for resulting in physical change in the environment. In the event that this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. In this circumstance, the proposed action to regulate the use of single-use foodware by food providers would have no or only a de minimis effect on the environment becausereducing disposable plastic foodware items such as straws, utensils, and stirrer sticks and having compostable alternatives offered only upon request and other provisions of the ordinance would not have the potential for causing a significant effect on the environment. The foregoing determination is made by the City Council in its independent judgment. SECTION 4: Effective Date. This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937. SECTION 5: Publication. The City Clerk shall give notice of adoption of this Ordinance as required by law. Pursuant to Government Code Section 36933, a summary of this Ordinance may be prepared by the City Clerk and published in lieu of publication of the entire text. The City Clerk shall post in the office of the City Clerk a certified copy of the full text of the Ordinance listing the names of the City Council members voting for and against the ordinance. INTRODUCED at a regular meeting of the Cupertino City Council on \[date\] and ENACTED at a regular meeting of the Cupertino City Council on \[date\] by the following vote: Members of the City Council AYES: NOES: ABSENT: 43 CC 03-01-2022 33 of 174 Ordinance No. __________ Page 4 ABSTAIN: SIGNED: ______________________ ________________________ Darcy Paul, Mayor Date City of Cupertino ATTEST: _______________________ ________________________ Kirsten Squarcia, City Clerk Date APPROVED AS TO FORM: _______________________ ________________________ Christopher D. Jensen, City Attorney Date 44 CC 03-01-2022 34 of 174 Attachment A AN ORDINANCE OF THE CITY OF CUPERTINO TO REGULATE THE USE AND SALE OF SINGLE-USE FOOD SERVICE WARE AND EXPANDED POLYSTYRENE FOAM PACKING MATERIALS NOTE:The existing chapterlanguageis quite brief, so for the purposes of readability while under development,existing chapter text ishighlighted in gray and the rest showsas plain text. 3®«Ɏ¹«©º¯µ´¹Ɏµ¬Ɏº®«Ɏ"»¶«¸º¯´µɎ,»´¯©¯¶§²Ɏ"µª«Ɏ¹«ºɎ¬µ¸º®Ɏ¨«²µ½Ɏ§¸«Ɏ§³«´ª«ªɎµ¸Ɏ§ªµ¶º«ªɎ§¹Ɏ¬µ²²µ½¹ȎɎɎ 3«¾ºɎ§ªª«ªɎºµɎ«¾¯¹º¯´Ɏ¶¸µ¼¯¹¯µ´¹Ɏ¯¹Ɏ¹®µ½´Ɏ¯´Ɏ¨µ²ªɎªµ»¨²«ɉ»´ª«¸²¯´«ªɎº«¾ºɎȘ example șɎ §´ªɎº«¾ºɎºµɎ¨«Ɏª«²«º«ªɎ¯´Ɏ¹®µ½´Ɏ¯´Ɏ¹º¸¯±«º®¸µ»®ɎȘ example șȌɎɎ3«¾ºɎ¯´Ɏ«¾¯¹º¯´Ɏ¶¸µ¼¯¹¯µ´¹Ɏ ¯¹Ɏ´µºɎ§³«´ª«ªɎµ¸Ɏ¸«§ªµ¶º«ªɎ¨¿Ɏº®¯¹Ɏ.¸ª¯´§´©«ȌɎɎ3«¾ºɎ¯´Ɏ¯º§²¯©¹Ɏ¯¹Ɏ«¾¶²§´§ºµ¸¿Ɏ§´ªɎ¯¹Ɏ´µºɎ §´Ɏ§³«´ª³«´ºɎºµɎº®«Ɏ"µª«Ȍ 6®«¸«Ɏº®«Ɏ«¾¶²§´§ºµ¸¿Ɏº«¾ºɎ¯´ª¯©§º«¹Ɏº®§ºɎ§Ɏ´«½Ɏ¹«©º¯µ´Ɏ¯¹Ɏ¨«¯´Ɏ§ªª«ªɎºµɎº®«Ɏ"¯º¿Ɏ"µª«ȍɎ º®«Ɏ´«½Ɏ¹«©º¯µ´Ɏ¯¹Ɏ¹®µ½´Ɏ¯´Ɏ¶²§¯´Ɏº«¾ºȌ 3®¯¹Ɏµ¸ª¯´§´©«Ɏ§³«´ª¹Ɏ¹«¼«¸§²Ɏ¶µ¸º¯µ´¹Ɏµ¬Ɏº®«Ɏ,»´¯©¯¶§²Ɏ"µª«ȌɎɎ%µ¸Ɏ«§¹«Ɏµ¬Ɏ¸«¼¯«½ȍɎº®«Ɏ §³«´ª³«´º¹Ɏ§ª¼§´©¯´Ɏº®«Ɏ¶¸¯³§¸¿Ɏµ¨°«©º¯¼«Ɏ§¸«Ɏ¶¸«¹«´º«ªɎ¬¯¸¹ºɎ¬µ²²µ½«ªɎ¨¿Ɏ©µ´¬µ¸³¯´Ɏ §³«´ª³«´º¹ȌɎɎ3®«¸«Ɏ¯¹Ɏ§Ɏ¹«¶§¸§º«Ɏ®«§ª¯´Ɏ¯´Ɏ¨µ²ªɎ¯º§²¯©¹Ɏ¬µ¸Ɏ«§©®Ɏ¶µ¸º¯µ´Ɏµ¬º®«Ɏ"µª«Ɏ ¨«¯´Ɏ§³«´ª«ªȌɎɎ$§©®Ɏ¶µ¸º¯µ´Ɏ¯¹Ɏ¹®µ½´Ɏ¨«¯´´¯´Ɏµ´Ɏ§Ɏ¹«¶§¸§º«Ɏ¶§«Ȍ SECTION 1. ADDITION OF SECTION 9.15.090 CONCERNING THE PURPOSES OF REGULATION OF THE USE AND SALE OF SINGLE-USE FOOD SERVICE WARE AND EXPANDED POLYSTYRENE PACKING MATERIALS 9.15.090 Purpose of Chapter A.This chapter is determined and declared to be a health, sanitary,and safety measure for the promotion, protection and preservation of the health, safety and general welfare of the people and environment of the City of Cupertino. B.Nonreusable disposable foodservice ware and beverage packaging -including -are major contributors to street litter, ocean pollution, marine and other wildlife harm, depletion of natural resources, and greenhouse gas emissions. Attachment A Page 1 45 CC 03-01-2022 35 of 174 C.Plastic litter breaks down into smaller pieces that are not biodegradable, persist in D.Among other hazards, plastic debris attracts and concentrates ambient pollutants, such as endocrine disrupters and persistent organic pollutants, in seawater and freshwater that can transfer to fish, other seafood, and salt that is eventually consumed. Nine of the top ten most common debris items found on beaches in the U.S. during International Coastal Cleanup Day are nonreusable food and beverage packaging items, and eight of them are plastic. E.Discharge of litter into waters of the United States is prohibited by the Federal Clean Water A by the San Francisco Bay Regional Water Quality Control Board. F.Even if allowed by the processor as recyclable, nonreusable plastic food service ware is often difficult to recycle after use because it is contaminated with food and grease. G.Natural fiber-based food service ware can be diverted from landfill, processed into compost, and breaks down in the environment if littered. H.Certain synthetic chemicals known as Per- and Polyfluoroalkyl Substances (PFAS), which are commonly used in disposable food service ware to repel water and grease, pose a public health risk as they have been linked to serious health effects. I.Approximately 12,000 chemicals are used in food packaging. Many of the chemical additives used in packaging are known to migrate into food and beverages. Hundreds of these chemicals are known to be hazardous to human health and the environment, and many are extremely persistent and bioaccumulative. J.Polystyrene foam food service ware and packaging materials are a distinctive litter concern because they are lightweight, break apart easily, are windblown into streets and waterways, and float in water until it reaches the San Francisco Bay and ocean. K.The City of Cupertino intends to reduce solid waste at its source and maximize n Plan, Zero Waste Policy, and stormwater pollution prevention permit. \[Brief Description\]-Page 2 46 CC 03-01-2022 36 of 174 L.Reducing disposable packaging by eliminating unnecessary items and transitioning to reusable products provides greater environmental benefits than managing the products that become waste, even when recycled or composted. SECTION 2. AMENDMENTS TO SECTION 9.15.100 CONCERNING DEFINITIONS 9.15.100 Definitions For the purposes of this chapter, the following words and phrases shall have the meanings ascribed to them by this section, unless the context or the provision clearly requires otherwise: 1."Beverage Provider" means any business, organization, entity, group, or person that offers liquid, slurry, frozen, semi-frozen, or other forms of beverages to the public for consumption. Beverage Provider also includes any organization, entity, group or person that regularly provides beverages to its members or the general public as a part of its activities or services. 2.that ensures that products and packaging displaying the BPI logo have been independently tested and verified according to scientifically based standards to successfully break down in professionally managed industrial composting facilities. BPI-certified products meet the standards of the American Society for Testing Materials (ASTM) D6400 or D6868 for compostability. As of January 1, 2020, all BPI-certified products are required to have (1) a limit of 100 parts per million (ppm) total Fluorinated Chemicals as the upper threshold for acceptance and (2) no intentionally added Fluorinated Chemicals. 3. 4. City. 5. Prepared Food in City Facilities. 6. 7. composting collection program as fully compostable; (2) is listed, described, or referenced on the City website as compostable; and (3) is certified compostable \[Brief Description\]-Page 3 47 CC 03-01-2022 37 of 174 by the Biodegradable Product Institute or other third party recognized by the Director. 8. City of Cupertino for public works or improvements to be performed, for a franchise, concession, or lease of property, for grant monies or goods and services or supplies to be purchased at the expense of the City of Cupertino. 9. designee. 10. "Disposable food service ware" means single-use disposable products used in the restaurant and food service industry for serving prepared food and includes, but is not limited to, plates, trays, cups, bowls, and hinged or lidded containers (clamshells). "Disposable food service ware" does not include straws, utensils, drink lids, or ice chests. 11., or other transfer of possession of an item for compensation, either as a separate transaction or as part of the sale, offer for sale, or other transfer of possession of another item for compensation. 12.ganic compounds containing at least one fully fluorinated carbon atom, also known as per- and polyfluoroalkyl substances, or PFAS chemicals. 13. Prepared Food. 14.means any establishment, provider, Non-Profit Vendor, or business, operating within the City that sells Prepared Food (1) to the public for consumption on or off its premises, at a catered event, and/or (2) at cafeterias, schools and places of employment, whether or not such establishments are open to the general public. Food Provider includes but is not limited to, restaurants, retail food establishments, caterers, cafeterias, stores, shops, retail sales outlets, grocery stores, delicatessens serving the public, mobile or temporary food providers, vehicles or carts, or roadside stands. 15. prepared food and includes, but is not limited to, cups, bowls, plates, trays, cartons, boxes, wrapper or liners, hinged or lidded containers (clamshells), and other items used as part of food or beverage service or in which Prepared Food is \[Brief Description\]-Page 4 48 CC 03-01-2022 38 of 174 16.or accompanying items usually provided alongside Prepared Food in plates, containers, bowls, or cups, including but not limited to utensils, chopsticks, napkins, cup lids, cup sleeves, food or beverage trays, condiment packets and saucers, straws, stirrers, splash sticks, spill plugs, cocktail sticks, and toothpicks. 17."Food vendor" means any establishment located in the City of Cupertino that sells or otherwise provides Prepared Food for consumption on or off its premises, and includes, but is not limited to, any shop, sales outlet, restaurant, bar, pub, coffee shop, cafeteria, caterer, convenience store, liquor store, grocery store, supermarket, delicatessen, mobile food truck, vehicle or cart, or roadside stand. 18.Large ity facility, or any outdoor event subject to a City permit, where more than 100 people attend or participate. 19. ticket purchase or entrance fee, Prepared Food at a Large Event. 20. its own Large Event, or City of Cupertino staff holding a Large Event. 21. plant-based, non-synthetic fiber, including but not limited to paper, wood, or bamboo. Natural Fiber does not include plastic of any kind. 22. 23.used to hold, cushion, or protect items packed in a container for shipping, transport, or storage. 24. including a government corporation, partnership, or association. 25.- and a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom. 26. monomer, including but not limited to rigid polystyrene or expanded polystyrene, \[Brief Description\]-Page 5 49 CC 03-01-2022 39 of 174 processed by any number of techniques including, but not limited to, fusion of polymer spheres (expandable bead polystyrene), injection molding, expanded polystyrene molding, extrusion-blown molding (extruded polystyrene), and clear or solid polystyrene (oriented polystyrene). Polystyrene is generally used to make cups, bowls, plates, trays, clamshell containers, meat trays, and egg cartons. The either alone or in combination with other letters. This definition applies to all polystyrene food service ware, regardless of whether it exhibits a resin code. 27."Polystyrene foam" means a thermoplastic petrochemical material made from a styrene monomer and expanded or blown using a gaseous agent (expanded polystyrene) including, but not limited to, fusion of polymer spheres (expandable bead polystyrene), injection molding, form molding, and extrusion-blow molding (extruded foam polystyrene). "Polystyrene foam" is commonly made into disposable food service ware products. "Polystyrene foam" does not include clear or solid polystyrene (oriented polystyrene). 28."Prepared Food" means food or beverages that are packaged, cooked, chopped, sliced, mixed, brewed, frozen, squeezed or otherwise prepared on the premises. "Prepared food" does not include: a.Any raw, uncooked meat products, fruits, or vegetables, unless it is intended for consumption without further preparation; or b.Prepackaged food that is delivered to the food vendor wholly encased, contained or packaged in a container or wrapper, and sold or otherwise provided by the food vendor in the same container or packaging. 27. chopped, sliced, mixed, brewed, frozen, squeezed or otherwise prepared on the premises of a food provider for consumption, including, but not limited to, ready- to-eat, dine-in, take- not include: (1) raw eggs and raw, butchered meat, fish or poultry that is sold from a butcher case or a similar retail method; (2) prepackaged food that is delivered to the food provider wholly encased, contained or packaged in a container or wrapper, and sold or otherwise provided by the food provider in the same container or packaging; or (3) nonpolystyrene foam prepackaged items prepared on- 28. \[Brief Description\]-Page 6 4: CC 03-01-2022 40 of 174 29. using the altered form in the manufacture of a new product. The term does not include material that will be burned, incinerated, or converted through gasification, pyrolysis, solvolysis, hydropyrolysis, methanolysis, enzymatic breakdown or a similar chemical conversion process used to transform materials into plastic monomers, chemicals, waxes, lubricants, chemical feedstocks, crude oil, diesel, gasoline, or home heating oil. 30. Service W service ware, including plates, bowls, cups, trays, glasses, straws, stirrers, condiment cups and utensils, that is manufactured of durable materials and that is specifically designed and manufactured to be washed and sanitized and to be used repeatedly over an extended period of time, and is safe for washing and sanitizing according to applicable regulations. 31. seasonings that require no additional preparation and that are usually used on a food item after preparation, including ketchup, mustard, mayonnaise, soy sauce, hot sauce, salsa, salt, pepper, sugar, and sugar substitutes or others as determined by the City. 32. 33. includes Prepared Food delivered by a Food Facility or by a third-party Takeout Food Delivery Service. 34. Food Facility to a customer for consumption off the premises. This service can be provided directly by the Food Facility or by a third-party. 35. online food ordering and/or delivery from a Prepared Food Provider to a consumer. SECTION 3. AMENDMENTS TO SECTION 9.15.110 CONCERNING REGULATION OF FOOD SERVICE WARE USED BY FOOD PROVIDERS AND SOLD BY RETAILERS \[Brief Description\]-Page 7 51 CC 03-01-2022 41 of 174 9.15.110 Polystyrene Foam Disposal Food Service Ware Prohibited Regulation of Food Service Ware Used by Food Providers and Sold by Retailers No food vendor shall sell or otherwise provide prepared food in polystyrene foam disposable food service ware on or after July 1, 2014. A.ACCESSORIES ONLY UPON CUSTOMER REQUEST Effective 6/1/2022 1.Food Providers shall provide Nonreusable Food Service Ware Accessories and Standard Condiments in single serve packets only upon request by customers during on-premises dining or when using a third-party food delivery platform. Nonreusable Food Service Ware Accessories and Standard Condiments packaged for single use provided by Prepared Food Providers for use by consumers shall not be bundled or packaged in a manner that requires a consumer to take a different type of Nonreusable Food Service Ware Accessory or Standard Condiment 2.Self-serve accessory stations are prohibited. 3.Food Providers and Beverage Providers, as well as City facilities, City-managed concessions, City-sponsored events, and City-permitted events, may plastic straws as an accommodation to people with disabilities who request them to enjoy equal access to food and beverage services within the City. 4.Prepared Food Providers offering Standard Condiments and Spices are encouraged to use dispensers or bulk containers rather than pre-packaged individual serving packets. 5.Takeout Food Delivery Services that utilize digital ordering/point of sale platforms, including but not limited to the internet and smart-phone, shall only offer Disposable Food Service Ware Accessories by providing clear options for customers to affirmatively request these items separate from orders for food and beverages. The default option on the digital ordering/point of sale platforms shall be that no Disposable Food Service Ware Accessories are requested. Each individual Disposable Food Service Ware Accessory (e.g., each fork, knife, condiment packet, napkin, etc.) provided with Prepared Food must be specifically requested by the customer in order for a Food Facility to provide it. 6.A Prepared Food Provider may ask a drive-through consumer if the consumer wants a Nonreusable Food Service Ware Accessory if the Nonreusable Food \[Brief Description\]-Page 8 52 CC 03-01-2022 42 of 174 Service Ware Accessory is necessary for the consumer to consume ready-to-eat food, or to prevent spills of or safely transport ready-to-eat food. 7.For delivery orders, Prepared Food Providers may choose to include specific accessories, such as cup lids, spill plugs, and trays, in order to prevent spills and deliver food and beverages safely. B.USE OF NON-COMPLIANT FOOD SERVICE WARE PROHIBITED Effective 6/1/2023 1.Prepared Food or Beverage Providers, including City Facility Prepared Food Providers, and City Contractors and Lessees may not sell, offer for sale, or otherwise Distribute Prepared Food prepared or packaged in Cupertino using: a.Nonreusable Food Service Ware or Food Ware Accessories made, in whole or in part, from Polystyrene Foam; b.Nonreusable Food Service Ware made, or Food Ware Accessories made, in whole or in part, from plastic including polyethylene, polyethylene terephthalate, polypropylene, polystyrene, even if accepted as recyclable by ing facility; c.Nonreusable Food Service Ware or Food Ware Accessories that are Compostable and not certified free of Fluorinated Chemicals by an independent third-party certifying organization approved by the Director; d.Nonreusable Food Service Ware or Food Ware Accessories made in whole or in part from bio- or plant-based plastic even if labeled or certified as compostable. 2.The Director may adopt a list, or reference an approved list, of suitable alternative Compostable or Recyclable Nonreusable Food Service Ware products, which means Nonreusable Food Service Ware products that the Director determines serve the same intended purpose as non-compliant products, meet the standards for what is Compostable and/or Recyclable under this Chapter, and are reasonably or referenced on an approved list, the person using the product as Nonreusable Food Service Ware will have the burden satisfaction that the product complies with this Section. 3.It shall not be a violation of this Section to sell, provide, or purchase Prepared Food or Raw Food or Beverage packaged in Nonreusable Food Service Ware otherwise prohibited by subsection (1) if the Prepared Food or Raw Food or Beverage is \[Brief Description\]-Page 9 53 CC 03-01-2022 43 of 174 packaged outside the City and is sold or otherwise provided to the consumer in the same Nonreusable Food Service Ware in which it originally was packaged. Businesses packaging Prepared Food outside the City are encouraged to use Nonreusable Food Service Ware that is Compostable or Recyclable, is Compostable and free of Fluorinated Chemicals, and is not made, in whole or in part, from Polystyrene. C.REUSABLE FOOD SERVICE WARE FOR DINING ON PREMISES Effective 6/1/2023 1. shall be served only on Reusable Food Service Ware, except that disposable paper food wrappers, sleeves, and bags, foil wrappers, paper napkins, paper tray and plate liners, and straws shall be permitted, so long as they meet the requirements set forth elsewhere in this Chapter. 2.Condiments, such as sauces, ketchup, or mustard, provided for on-site consumption, shall not be served in disposable, individual-serving packets. 3.Consumption is considered on-premises if it takes place at tables and/or seating provided by the Prepared Food Provider either on its own or in conjunction with another Prepared Food Provider. 4.New building permits and new or renewed business licenses for Food Service Providers applied for, and/or deemed complete after 6/1/2023 shall only be granted to Prepared Food Providers that can demonstrate adequate capacity to comply with subsection (C.1) herein. 5.This requirement does not prohibit a Prepared Food Provider from providing, subsection (B.1) for the customer to take away leftover Prepared Food after dining on the premises. 6.Prepared Food Providers subject to the requirements of subsection (C.1) that do not have onsite or off-site dishwashing capacity, or are unable to contract for services to wash, rinse, and sanitize Reusable Food Service Ware, in order to comply with applicable provisions of the California Health and Safety Code, may petition the Director for an exemption or extension under 9.15.120. D.SALE OR DISTRIBUTION OF NON-COMPLIANT FOOD SERVICE WARE PROHIBITED \[Brief Description\]-Page 10 54 CC 03-01-2022 44 of 174 Effective 6/1/2023 1.No Person may sell, offer for sale, or otherwise Distribute within the City any Nonreusable Food Service Ware prohibited under Section B.1.a. or B.1.d. 2.Per Section B.3, the Director may adopt, maintain, or reference a list of compliant products. SECTION 4. AMENDMENTS TO SECTION 9.15.120 CONCERNING EXEMPTIONS A.A Food vendor Provider may seek an exemption from the requirements under Section 9.15.110 due to a "unique packaging hardship" under Subsection B of this section, "unused inventory" under Subsection C of this section, e request extra time for compliance under Subsection E. B.The Food vendor Provider must demonstrate that no reasonably feasible alternative exists for to a specific and necessary prohibited nonreusable food service ware item to qualify for a "unique packaging hardship" exemption. C.The Food vendor Provider must demonstrate that before January 1, 2014 \[new effective date of this ordinance\], it purchased the prohibited polystyrene foam food service ware, which cannot be returned to the distributor and, despite the food vendor's best efforts, will remain in inventory on July 1, 2014 \[date\], to qualify for an "unused inventory" exemption. D.The Food Provider must demonstrate that the provisions of this Chapter would based on, but not limited to, demonstrating that suitable Nonreusable Food Service Ware is not available at a commercially reasonable price and the additional cost associated with providing the Disposable Food Service Ware is particularly burdensome to the Food Facility based on the type of operation(s) affected, the overall size of the business/operation, the number, type and location of its facilities, the impact on the overall financial resources of the Food Facility, and other factors. Reasonable added cost for a suitable item as compared to a similar item that the Food Facility can no longer use shall not by itself constitute adequate grounds to support an exemption for such item. In determining whether a significant economic hardship has been established, the Director shall consider the following information: ability of the Food Facility to recover the additional expense by increasing its prices; the availability of tax credits and deductions; outside funding; and other options. \[Brief Description\]-Page 11 55 CC 03-01-2022 45 of 174 E.The Food Provider must demonstrate that for other reasons not already stated it needs additional time to comply with the provisions of this Chapter. F.The Food vendor Provider may submit a written application for an exemption on a form provided by to the Environmental Programs Division. The Director of Public Works may require the applicant to submit additional information or documentation to make a determination regarding the exemption request. A request for exemption shall be reviewed on a case by case basis, and may be granted in whole or in part, with or without conditions, for a period of up to six (6) months or to January 1, 2015, whichever comes first one year one year. The determination of the Director shall be final and is not subject to appeal. G.Prepackaged Food delivered from outside the City is exempt from the provisions of this Chapter. H.Disposable Food Service Ware that is entirely Aluminum Foil-based including, but not limited to, aluminum trays, aluminum foil wrappers and aluminum foil baskets is exempt from the provisions of this Chapter. I.Temporary exemptions due to an emergency are automatic without the submission of a request for an exemption. An emergency is defined as a sudden, unexpected occurrence posing a clear and imminent danger that requires immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. Examples of an emergency include, but are not limited to natural disasters, emergencies due to the release of hazardous materials, emergencies associated with loss of power and/or water, or emergency medical response. SECTION 5. ADDITION OF NEW SECTION 9.15.125 CONCERNING RECORDKEEPING AND INSPECTION 9.15.125 Recordkeeping and inspection. A.Food Providers shall keep complete an accurate record or documents of the purchase of Nonreusable Food Service Ware evidencing compliance with this Chapter. B.The record shall be made available for inspection at no cost to the City during regular business hours by city employees or city-designated staff authorized to enforce this Chapter. Unless an alternative location or method of review is mutually agreed upon, the records or documents shall be made available at the Food Provider address. \[Brief Description\]-Page 12 56 CC 03-01-2022 46 of 174 C.The provision of false or incomplete information, records or documents to the city shall be a violation of this Chapter. SECTION 5. AMENDMENTS TO SECTION 9.15.130 CONCERNING ADMINISTRATIVE CITATIONS AND FINES 9.15.130 Administrative citations and fines. (a) Grounds for an administrative citation. An administrative citation may be issued upon findings made by the City Manager, or his or her designee, when any person or food vendor has provided EPS foam food service ware to a customer or for violation ed of any other provision of this Chapter. (b) Administrative citation fine amounts. Upon findings made under subsection (a), the person or food vendor shall be subject to an administrative citation pursuant to Chapter 1.10 of this Code. Fines for the administrative citation are as follows: (1) First citation: One hundred dollars ($100.00). (2) Second citation for the same violation within the same twelve month period: Two hundred dollars ($200.00) (3) Third or any subsequent citation for the same violation within the same twelve month period: Five hundred dollars ($500.00) (4) Each day that any person or food vendor violates the provisions of this cChapter is a new and separate violation occurs. (c) Administrative citation appeals and disposition shall be processed in accordance with Chapter 1.10 of this Code. \[Brief Description\]-Page 13 57 CC 03-01-2022 47 of 174 Attachment D Food Service Ware Price Comparison This document contains data and graphics gathered and created by staff at the City of Mountain View in Fall 2021. Follow-up research by City of Cupertino staff showed current pricing largely unchanged. We thank the City of Mountain View for sharing this research work. This document compares the typical per-item price range of commonly used disposable food service ware items. While this is not an exhaustive price survey, it provides preliminary insight into financial implications of the proposed food service ware regulations on food providers. While traditional plastic cups and containers are currently accepted for recycling in Cupertino, recycling markets for most of these common foodware markets are weak and they may end up contaminating the recycling if they are not empty and wiped clean. Transitioning these items to compostable, fiber-based materials or recyclable aluminum will reduce recycling contamination and landfilled waste. Proposed Single-Use Plastics Ordinance non-compliant items are shown in red and compliant in green. Box-and-whisker plots divide the data into quartiles. The typical per-item price range is thth the middle two quartiles, 25 through 75 percentile values of all prices surveyed. The line inside the box is the median. The the maximum and minimum prices found. The data sets exclude statistical outliers. 58 CC 03-01-2022 48 of 174 1. Rectangular Tray Black plastic trays with clear lids are a commonlyusedtype of takeout food packaging.As shown, aluminum trays are a cost-effective compliant alternative for this type of container, with significant per-item savings over black plastic. Aluminum tray Certified PFAS-free Black plastic w/lid fiber trayw/lid w/clear lid 2. Large The median price for certified PFAS-free fiber clamshells is the same as that of plastic, though the typical price ranges differ. Compostable plastic is the most expensive option, so food providers currently using these items will save money by switching to compliant fiber-based alternatives. Non-compliant Plastic Certified PFAS- paper/fiber plasticfree fiber 59 CC 03-01-2022 49 of 174 3. Food Containers/Soup Cups (16 oz) These products are often used to hold soups and otherhot,liquid-based items for takeout orders. In this category, plastic containers were significantly cheaper than compliant alternatives, meaning food vendors will likely experience increased costs to complywith the proposed Single-Use Plastics Ordinance regulations. Plastic Non-compliant Certified PFAS- paper/fiberfree fiber 4. Hot Beverage Cups (16 oz) There are only two primary material types for hot beverage cups: paper that is not certified as PFAS-free, and certified PFAS-free paper or fiber. While certified options are slightly more expensive, many of the cheaper non-compliant products Non-compliant Certified PFAS- paper/fiberfree paper/fiber 5: CC 03-01-2022 50 of 174 5. Cold Beverage Cups (16 oz) Cold cups are available in both plastic and fiber options. Under the proposed Single-Use Plastics Ordinance, clear plastic cups will no longer be allowed. Food providers are likely to encounter increased costs in transitioning cold cups to compliant fiber-based options unless they currently use compostable plastic. Certified PFAS- Plastic free paper/fiber plastic Overall trends: The impacts of switching to compostable, certified PFAS-free or recyclable aluminum disposable food service ware is likely to be a mix of cost increases and cost savings, depending on the specific foodwareitem andcompliant alternatives. Compostable plastic is the most expensive option for many products. Businesses usingcompostable plastic can save money switching to compliant fiber items. This research revealed large variation in price for the same products across different distributors, so food providersshould obtain quotes from multiple distributors when searching for compliant food service ware items. C-compliant plastic and fiber productsmakes it more complicated for food vendors to identify compliant products.For example, some petroleum-based plastic items are la- since they uselessplastics than similar products or contain recycled material, but they are not compliant with the proposedordinance. 61 CC 03-01-2022 51 of 174 CITY OF CUPERTINO Agenda Item 22-10400Agenda Date: 3/1/2022 Agenda #: 1. Subject:ProclamationdeclaringMarchasYouthArtsMonthonbehalfofthosewhoadvocateforart education to all elementary, middle and secondary students PresentproclamationdeclaringMarchasYouthArtsMonthonbehalfofthosewhoadvocateforart education to all elementary, middle and secondary students CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 62 CC 03-01-2022 53 of 174 CITY OF CUPERTINO Agenda Item 22-10486Agenda Date: 3/1/2022 Agenda #: 2. Subject:ProclamationproclaimingMarchasAmericanRedCrossMonthand presentationfromthe American Red Cross regarding local activities Present proclamation proclaiming March as American Red Cross Month and receive presentation from the American Red Cross regarding local activities CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 64 CC 03-01-2022 55 of 174 CITY OF CUPERTINO Agenda Item 21-10215Agenda Date: 3/1/2022 Agenda #: 3. 2»¨°«©º Ȏ.ƩźĻŅ ƩĻƦƚƩƷƭ ƚƓ ĭƚǒƓĭźƌƒĻƒĬĻƩ ğĭƷźǝźƷźĻƭ ğƓķ ĬƩźĻŅ ğƓƓƚǒƓĭĻƒĻƓƷƭ wĻĭĻźǝĻ ĬƩźĻŅ ƩĻƦƚƩƷƭ ƚƓ ĭƚǒƓĭźƌƒĻƒĬĻƩ ğĭƷźǝźƷźĻƭ ğƓķ ĬƩźĻŅ ğƓƓƚǒƓĭĻƒĻƓƷƭ CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 66 CC 03-01-2022 56 of 174 CITY OF CUPERTINO Agenda Item 21-10226Agenda Date: 3/1/2022 Agenda #: 4. Subject: Report on Committee assignments Report on Committee assignments CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 67 CC 03-01-2022 57 of 174 CITY OF CUPERTINO Agenda Item 21-10237Agenda Date: 3/1/2022 Agenda #: 5. 2»¨°«©º: City Manager update Receive City Manager update on emergency response efforts and other City business CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 68 CC 03-01-2022 58 of 174 CITY OF CUPERTINO Agenda Item 22-10417Agenda Date: 3/1/2022 Agenda #: 6. 2»¨°«©º:Approve the February 15 City Council minutes Approve the February 15 City Council minutes CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 69 CC 03-01-2022 59 of 174 DRAFT MINUTES CUPERTINO CITY COUNCIL Tuesday, February 15, 2022 SPECIAL MEETING At 5:30 p.m., Mayor Darcy Paul called the Special City Council Meeting to order. This was a teleconference meeting with no physical location. ROLL CALL Present: Mayor Darcy Paul, Vice Mayor Liang Chao, and Councilmembers Kitty Moore, Hung Wei, and Jon Robert Willey. Absent: None. All Councilmembers teleconferenced for the meeting. COUNCIL WORKSHOP 1.Subject: Commissions and Committees Workshop Recommended Action: Conduct Commissions and Committees Workshop and provide direction to staff Presenter: Katy Nomura, Deputy City Manager Written Communications for this item included a staff presentation. Deputy City Manager Katy Nomura gave a presentation. Mayor Paul opened the public comment period and the following people spoke. Jennifer Griffin opposed dissolving or consolidating the Environmental Review Committee (ERC) or Design Review Committee (DRC). (Submitted written comments). Jean Bedord was concerned about staff time spent on Commissions and Committees and consultant costs and supported streamlining the commissions. (Submitted written comments). Housing Commissioner Govind Tatachari (representing self) supported expanding the Housing scope to review new housing projects including affordable housing. 6: CC 03-01-2022 60 of 174 City Council Minutes February 15, 2022 Lisa Warren supported maintaining the ERC and DRC and expanding the scope of the Committees. Peggy Griffin supported maintaining ERC and DRC but removing staff, a Safe Routes Committee, increasing Audit Committee meeting frequency, and other modifications. Mayor Paul closed the public comment period. Councilmembers asked questions and made comments. Paul moved and Willey seconded to: 1. direct staff to prepare a proposed codification of the Economic Development Committee in the Municipal Code, with membership comprised of two members of the City Council and three members from the community representing retail hospitality and the technology industry; 2. prepare a modification to the Municipal Code regarding the Environmental Review Committee, to be comprised of two members of the City Council and one member of the Planning Commission, and refer to the Committee the question of what scope of subject matter they would like to review and bring an update of the latter back to Council; 3. refer to the Planning Commission, the question of what scope of potential subject matter related to transportation it could review; 4. provide options for an expansion of the Audit Committee following referral of the question to a Council Subcommittee formed, comprised Vice Mayor Chao and Councilmember Moore, and bring an update back to Council; 5. refer to the Housing Commission, the question of what scope of subject matter it has been undertaking and what subject matter it would like to review and bring an update back to Council. Moore made a friendly amendment to appoint Mayor Paul to serve on the Subcommittee instead of Councilmember Moore. (Paul and Willey accepted the friendly amendment); Paul modified his motion to add, and include consideration of . (Willey accepted the modification). Final Motion Paul moved and Willey seconded to direct staff to: 1. prepare a proposed codification of the Economic Development Committee in the Municipal Code, with membership comprised of two members of the City Council and three members from the community representing retail hospitality and the technology industry; /§«ɎŵɎ 71 CC 03-01-2022 61 of 174 City Council Minutes February 15, 2022 2. prepare a modification to the Municipal Code regarding the Environmental Review Committee, to be comprised of two members of the City Council and one member of the Planning Commission, and refer to the Committee the question of what scope of subject matter they would like to review, and bring an update of the latter back to Council; 3. refer to the Planning Commission, the question of what scope of potential subject matter related to transportation it could review; 4. provide options for an expansion of the Audit Committee following referral of the question to a Council Subcommittee formed tonight, comprised of Mayor Paul and Vice Mayor Chao, and bring an update back to Council; and 5. refer to the Housing Commission, the question of what scope of subject matter it has been undertaking and what subject matter it would like to review, and include consideration of social services, and bring an update back to Council. The amended motion carried unanimously. ADJOURNMENT At 6:44 p.m., Mayor Paul adjourned the Special City Council Meeting. REGULAR MEETING At 6:45 p.m. Mayor Darcy Paul called the Regular City Council Meeting to order. This was a teleconference meeting with no physical location. ROLL CALL Present: Mayor Darcy Paul, Vice Mayor Liang Chao, and Councilmembers Kitty Moore, Hung Wei, and Jon Robert Willey. Absent: None. All Councilmembers teleconferenced for the meeting. CEREMONIAL MATTERS AND PRESENTATIONS 1.Subject:Proclamation supporting United Nations Human Rights Council resolution recognizing access to a healthy and sustainable environment as a universal right Recommended Action: Present proclamation supporting United Nations Human Rights Council resolution recognizing access to a healthy and sustainable environment as a universal right Students Vansh Mathur and Caroline Cheng, on behalf of Cupertino High School Model United Nations, and District Director Tom Pyke, on behalf the Office of Congressman Ro Khanna, received the presentation. /§«ɎŶɎ 72 CC 03-01-2022 62 of 174 City Council Minutes February 15, 2022 Mayor Paul presented the proclamation supporting United Nations Human Rights Council resolution recognizing access to a healthy and sustainable environment as a universal right. 2.Subject:Presentation by Captain Rich Urena of the Santa Clara County Department regarding public safety Recommended Action: Receive presentation by Captain Rich Urena of the Santa Clara County Department regarding public safety Written Communications for this item included a sheriff presentation. Captain Rich Urena gave a presentation. Mayor Paul opened the public comment period and the following people spoke. Lisa Warren supported the presentation and asked questions about PERT (Psychiatric Emergency Response Team) training and texting 911 calls. Peggy Griffin asked about the location accuracy of 911 calls from a cell phone, monthly statistic postings on Nextdoor, and contact information about ransomware crimes. Housing Commissioner Govind Tatachari (representing self) asked about the PERT team covering responses to schools and colleges. Mayor Paul closed the public comment period. Councilmembers asked questions and made comments. Council received the presentation by Captain Rich Urena of the Santa Clara County Department regarding public safety. Council recessed from 7:46 p.m. to 7:52 p.m. POSTPONEMENTS AND ORDERS OF THE DAY - None ORAL COMMUNICATIONS Jennifer Griffin was concerned about the Housing Element number calculations in cities and rezoning areas for high density housing and supported a study session on these topics. Lisa Warren requested project updates on Westport, Lawrence-Mitty Park, and Vallco and /§«ɎŷɎ 73 CC 03-01-2022 63 of 174 City Council Minutes February 15, 2022 supported Council consideration of a vacancy tax. Louise Saadati supported Council highly prioritizing more Dogs Off Leash Areas (DOLAs) in the 2022-23 City Work Program. Tony Alexander supported the community benefits of DOLAs and expanding to other areas of the City. Mary Ellen Chell supported allowing more DOLAs and creating more trials in the City. Peggy Griffin supported project updates including Mary Avenue ELI and County housing at the Outback site, considering a vacancy tax, and addressing pavement cuts in Cupertino. REPORTS BY COUNCIL AND STAFF (10 minutes) 3.Subject: Brief reports on councilmember activities and brief announcements Recommended Action:Receive brief reports on councilmember activities and brief announcements Council received brief reports on councilmember activities and brief announcements. 4.Subject: Report on Committee assignments Recommended Action: Report on Committee assignments Councilmembers highlighted the activities of their various committees. 5.Subject: City Manager update Recommended Action: Receive City Manager update on emergency response efforts and other City business Council received the City Manager update on emergency response efforts, development projects, and other City business. CONSENT CALENDAR (Items 6-17) Willey moved and Wei seconded to approve the items on the Consent Calendar except for Item Nos. 13 which was pulled for discussion. Ayes: Paul, Chao, Moore, Wei, and Willey. Noes: None. Abstain: None. Absent: None. 6.Subject: Approve the January 24 City Council minutes Recommended Action: Approve the January 24 City Council minutes /§«ɎŸɎ 74 CC 03-01-2022 64 of 174 City Council Minutes February 15, 2022 7.Subject: Approve the January 27 City Council minutes Recommended Action: Approve the January 27 City Council minutes 8.Subject: Approve the February 1 (Commission Interviews) City Council minutes Recommended Action: Approve the February 1 (Commission Interviews) City Council minutes 9.Subject: Approve the February 1 City Council minutes Recommended Action: Approve the February 1 City Council minutes 10.Subject: Approve the February 7 City Council minutes Recommended Action: Approve the February 7 City Council minutes 11.Subject: Consider adopting a resolution authorizing continued remote teleconference meetings of the legislative bodies of the City of Cupertino for the period February 15, 2022 through March 16, 2022 pursuant to the Brown Act, as amended by AB 361 Recommended Action:Adopt Resolution No. 22-025 authorizing continued remote teleconference meetings of the legislative bodies of the City of Cupertino for the period February 15, 2022 through March 16, 2022 pursuant to the Brown Act, as amended by AB 361 12.Subject: Consider Planning Commission's recommendation to select Steven Scharf as the Environmental Review Committee representative Recommended Action:Accept Planning Commission's recommendation to select Steven Scharf as the Environmental Review Committee representative 13.Subject: Consider Accounts Payable for the period ending January 10, 2022 Recommended Action: Adopt Resolution No. 22-026 accepting Accounts Payable for the period ending January 10, 2022 Councilmembers asked questions and made comments. Mayor Paul opened the public hearing and, seeing no one, closed the public comment period. Council unanimously consented to table this item to a future meeting pending staff provisions of materials and answers to Councilmember questions. 14.Subject: Consider Accounts Payable for the period ending January 17, 2022 Recommended Action: Adopt Resolution No. 22-027 accepting Accounts Payable for /§«ɎŹɎ 75 CC 03-01-2022 65 of 174 City Council Minutes February 15, 2022 the period ending January 17, 2022 15.Subject: Consider Accounts Payable for the period ending January 24, 2022 Recommended Action: Adopt Resolution No. 22-028 accepting Accounts Payable for the period ending January 24, 2022 16.Subject: Consider Accounts Payable for the period ending January 31, 2022 Recommended Action: Adopt Resolution No. 22-029 accepting Accounts Payable for the period ending January 31, 2022 17.Subject:Consider approval of the Library Commission's recommendation to extend Jing Jing Yang's appointment as the Cupertino Poet Laureate until the end of 2022 RecommendedAction:AdoptResolutionNo.22-030 approvingtheLibrary Commission's recommendation to extend Jing Jing Yang's appointment as the Cupertino Poet Laureate until the end of 2022 SECOND READING OF ORDINANCES - None PUBLIC HEARINGS - None ORDINANCES AND ACTION ITEMS 18.Subject: Options for Acquisition of Lehigh Cement Plant and Quarry by Santa Clara County Recommended Action: Provide direction to the City Manager and City Attorney to prepare a letter in support of, and otherwise regarding, efforts by Santa Clara County to explore options for the acquisition of the Lehigh Cement Plant and Quarry and the termination of plant and quarry operations Presenter: Christopher Jensen, City Attorney Written Communications for this item included a staff presentation and emails to Council. City Attorney Christopher Jensen gave a presentation. Mayor Paul opened the public comment period and the following people spoke. Jennifer Griffin supported the County plan of purchasing the property, a City annexation, referral to Midpen, and addressing floodplain and fire risks. Lisa Warren supported the recent actions by the County Board of Supervisors and Council sending a letter of support to the Board. /§«ɎźɎ 76 CC 03-01-2022 66 of 174 City Council Minutes February 15, 2022 Peggy Griffin supported Council sending a letter of support and looking into land use and flood risk since the property lies within Cupertino's boundaries. Mayor Paul closed the public comment period. Councilmembers asked questions and made comments. Willey moved and Paul seconded to authorize the City Attorney to draft, prepare, and submit a letter of support of Supervisor Simitian and the County's effort to conduct the study for the next 90 days and to incorporate the comments shared by Councilmembers in the discussion within the draft of that letter. The motion carried unanimously. 19.Subject: Consider an update on the Via-Cupertino On-Demand Community Shuttle Pilot Program and proposed grant application: California State Transportation Agency (CalSTA,) Transit and Intercity Rail Capital Program (TIRCP) Recommended Action: Receive an update on Via-Cupertino ridership since its re- launch on October 19, 2021 and consider authorization of a competitive grant application to CalSTA to fund 50% of shuttle costs in the future Presenter: Chris Corrao, Senior Transit & Transportation Planner Written Communications for this item included a staff presentation. Senior Transit & Transportation Planner Chris Corrao gave a presentation. Mayor Paul opened the public comment period and the following people spoke. Jennifer Griffin supported the program plan but was concerned about any mandates attached to accepting the grant. Peggy Griffin supported adding the El Camino Hospital and Mountain View Caltrain Station destinations and was concerned about wait times. Mayor Paul closed the public comment period. Councilmembers asked questions and made comments. Paul moved and Chao seconded to authorize a competitive grant application to CalSTA to fund 50% of shuttle costs in the future. The motion carried unanimously. 20.Subject: Consider an update on Stevens Creek Boulevard Steering Committee and consideration of the City of Cupertino's participation in the Stevens Creek Boulevard /§«ɎŻɎ 77 CC 03-01-2022 67 of 174 City Council Minutes February 15, 2022 Transit Vision Study Recommended Action: Consider approving participation in the Stevens Creek Boulevard Corridor Transit Study to create a cohesive vision for the Stevens Creek Boulevard Corridor, including a study of the potential for transit Presenter: Chris Corrao, Senior Transit & Transportation Planner Written Communications for this item included a staff presentation and emails to Council. Senior Transit & Transportation Planner Chris Corrao gave a presentation. Mayor Paul opened the public comment period and the following people spoke. Jennifer Griffin was concerned about MTC and a Complete Streets Program, giving up car traffic lanes, and traffic impacts from Vallco. (Submitted written comments). Raania Mohsen, on behalf of San Jose Vice Mayor Chappie Jones, recommended Cupertino participation in the proposed Stevens Creek Corridor Transit Vision Study. Mayor Paul closed the public comment period. Councilmembers asked questions and made comments. Willey moved and Wei seconded to approve participation in the Stevens Creek Boulevard Corridor Transit Study to create a cohesive vision for the Stevens Creek Boulevard Corridor, including a study of the potential for transit. Wei made a friendly amendment for the Cupertino study to extend to Foothill Boulevard. (Willey accepted the friendly amendment). Chao made a friendly amendment to add, using general purpose travel lanes or adversely impact vehicular capacity on City and Wei declined the friendly amendment and the amendment was not considered). Council did not vote on this motion. Final Motion: Chao moved and Paul seconded a substitute motion to approve participation in the Stevens Creek Boulevard Corridor Transit Study to create a cohesive vision for the Stevens Creek Boulevard Corridor, including a study of the potential for transit, with the amendment of preferably not using general purpose travel lanes nor adversely impacting vehicular capacity on City surface street and extending the study to Foothill Boulevard. The substitute motion carried unanimously. /§«ɎżɎ 78 CC 03-01-2022 68 of 174 City Council Minutes February 15, 2022 Council unanimously consented to continue the Regular City Council Meeting and consideration of the remaining agenda items to a Special City Council Meeting on Thursday, February 17 at 7:00 p.m. 21.Subject: FY 2021-2022 City Work Program Q2 Update Recommended Action: Receive FY 2021-2022 City Work Program Q2 Update Presenter: Katy Nomura, Deputy City Manager This item was continued to Thursday, February 17 at 7:00 p.m. ORAL COMMUNICATIONS - CONTINUED (As necessary) COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS This item was continued to Thursday, February 17 at 7:00 p.m. ADJOURNMENT At 11:25 p.m., Mayor Paul adjourned the Regular City Council Meeting. _________________________ Kirsten Squarcia City Clerk Ɏ /§«ɎŴųɎ 79 CC 03-01-2022 69 of 174 CITY OF CUPERTINO Agenda Item 22-10533Agenda Date: 3/1/2022 Agenda #: 7. 2»¨°«©º:Approve the February 17 City Council minutes Approve the February 17 City Council minutes CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 7: CC 03-01-2022 70 of 174 DRAFT MINUTES CUPERTINO CITY COUNCIL Thursday, February 17, 2022 SPECIAL MEETING At 7:00 p.m., Mayor Darcy Paul called the Special City Council Meeting to order. This was a teleconference meeting with no physical location. ROLL CALL Present: Mayor Darcy Paul, Vice Mayor Liang Chao, and Councilmembers Kitty Moore, Hung Wei, and Jon Robert Willey. Absent: None. All Councilmembers teleconferenced for the meeting. FEBRUARY 15, 2022 REGULAR MEETING ORDINANCES AND ACTION ITEMS CONTINUED Council continued the Regular Meeting held on the Tuesday, February 15 for the purposes of hearing, consideration, deliberation, and decisions for Item #21 and Council and Staff Comments and Future Agenda Items. 21.Subject: FY 2021-2022 City Work Program Q2 Update Recommended Action: Receive FY 2021-2022 City Work Program Q2 Update Presenter: Katy Nomura, Deputy City Manager Written Communications for this item included a staff presentation and emails to Council. Deputy City Manager Katy Nomura gave a presentation. Mayor Paul opened the public comment period and, seeing no one, closed the public comment period. Councilmembers asked questions and made comments. 81 CC 03-01-2022 71 of 174 City Council Minutes February 17, 2022 Council received the Fiscal Year (FY) 2021-2022 City Work Program Q2 Update. ORAL COMMUNICATIONS - CONTINUED (As necessary) None COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS - CONTINUED Councilmembers added the following future agenda items. look into addressing vacant housing to be rented out and a vacancy property tax (Willey/Moore) discuss issues with General Plan language regarding commercial/commercial residential land use designation (Moore/Willey) discuss how information is presented on the City website and the user website experience (Chao/Moore) conduct an all-commissions chair meeting (Chao/Moore) ADJOURNMENT At 8:44 p.m., Mayor Paul adjourned the Special City Council Meeting. _________________________ Kirsten Squarcia City Clerk /§«ɎŵɎ 82 CC 03-01-2022 72 of 174 CITY OF CUPERTINO Agenda Item 22-10508Agenda Date: 3/1/2022 Agenda #: 8. Subject:ConsiderresignationofBicyclePedestrianCommissionmemberMaanyaCondamoor and direct staff on filling the unscheduled vacancy 1.Directstafftoinitiateaspecialrecruitmentandapprovetheapplicationdeadlineand interview date for filling the unscheduled vacancy: a.Deadline for applications of 4:30 p.m. on Friday, April 15, 2022 and b.Applicant interview date of 5:30 p.m., Tuesday, April 26, 2022 CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 83 CC 03-01-2022 73 of 174 CITY COUNCIL STAFF REPORT Meeting: March 1, 2022 Subject Consider resignation of Bicycle Pedestrian Commission member Maanya Condamoor and direct staff on filling the unscheduled vacancy. Recommended Action 1.Direct staff to initiate a special recruitment and approve the application deadline and interview date for filling the unscheduled vacancy: a.Deadline for applications of 4:30 p.m. on Friday, April 15, 2022 and b.Applicant interview date of 5:30 p.m., Tuesday, April 26, 2022; Discussion Maanya Condamoorwas serving herfirst term on the BicyclePedestrianCommissionwhich expires on January 30, 2025. She resigned from the commissionon February 28,2022,thereby leaving an unscheduled vacancy for the remaining portion of herterm. There are no available alternates to backfill the vacant position, therefore staff is requesting further action from Council to fill the vacancy by appointment. The letter of resignationis attached(Attachment A). Consistent with Government Code 54973 et seq., the City Clerk is required to post an unscheduled vacancy notice not earlier than 20 days before and not later than 20 days after the vacancy occurs. In addition, appointments must not be made at least 10 working days after the posting. A special vacancy notice for the unscheduled vacancy will be posted in the office of the clerk and on the . Vacancy notices are also advertised through social media platforms and the Cupertino Scene. Sustainability Impact None Fiscal Impact If Council chooses to hold a special recruitment, noticeswould be published in the Cupertino Courier and the World Journal noting the application deadline and interview date. The cost for the publications would be approximately $450. Њ 84 CC 03-01-2022 74 of 174 _____________________________________ Prepared by: Lauren Sapudar, Deputy City Clerk Reviewed by: Kirsten Squarcia, City Clerk Approved for Submission by: Dianne Thompson, Assistant City Manager Attachments: A - Resignation Letter Ћ 85 CC 03-01-2022 75 of 174 Lauren Sapudar Deputy City Clerk City Manager's Office LaurenS@cupertino.org (408) 777-1312 86 CC 03-01-2022 76 of 174 Maanya Condamoor Bike and Pedestrian Commissioner MCondamoor@cupertino.org 87 CC 03-01-2022 77 of 174 CITY OF CUPERTINO Agenda Item 22-10476Agenda Date: 3/1/2022 Agenda #: 9. Subject:ReceivetheGovernmentFinanceOfficersAssociation(GFOA)DistinguishedBudget Presentation Award for Fiscal Year 2021-22 Adopted Budget ReceivetheGovernmentFinanceOfficersAssociation(GFOA)DistinguishedBudgetPresentation Award for Fiscal Year 2021-22 Adopted Budget CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 88 CC 03-01-2022 78 of 174 CITY COUNCIL STAFF REPORT Meeting: March 1, 2022 Subject Receipt of the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award for Fiscal Year 2021-22 Adopted Budget Recommended Action Consider the receipt of the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award for Fiscal Year 2021-22 Adopted Budget Background The Government Finance Officers Association (GFOA)represents public finance officials throughout the United States and Canada. Its members are deeply involved in planning, financing, and implementing thousands of governmental operations in each of their jurisdictions. GFOA's mission is to advance excellence in public finance. Discussion GFOA awarded the City of Cupertino the Distinguished Budget Presentation Award for its Fiscal Year 2021-22 Adopted Budget. This is the 24th consecutive GFOA Distinguished Budget Presentation Award received by the city. The award represents a significant achievement by the City and reflects the commitment of the government body and staff in meeting the highest principles of governmental budgeting. To receive the budget award, the City satisfied nationally recognized guidelines for effective budget presentation. These guidelines are designed to assess h budget serves as a policy document, financial plan, operations guide, and categories, and in the fourteen mandatory criteria within those categories, to receive the award. When a Distinguished Budget Presentation Award is granted to an entity, a Certificate of Recognition for Budget Presentation is also presented to the individual(s) or department designated as being primarily responsible for having achieved the award. of the Administrative Services Department, it is a highly collaborative effort across the entire 1 89 CC 03-01-2022 79 of 174 organization and the Finance Division extends its sincere appreciation to City staff for their continued efforts. There are over 1,700 participants in the Budget Awards Program. The most recent Budget Award recipients, along with their corresponding budget documents, are posted quarterly on GFOA's website. Award recipients have pioneered efforts to improve the quality of budgeting and provide an excellent example for other governments throughout North America. The following link provides a listing of all GFOA Award winners: https://www.gfoa.org/budget-award-winners Sustainability Impact No sustainability impact. Fiscal Impact No fiscal impact. Prepared by: Zach Korach, Finance Manager Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Jim Throop, City Manager Attachments: A GFOA Budget Award 2 8: CC 03-01-2022 80 of 174 GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Cupertino California For the Fiscal YearBeginning July 01, 2021 Executive Director 91 CC 03-01-2022 81 of 174 CITY OF CUPERTINO Agenda Item 22-10450Agenda Date: 3/1/2022 Agenda #: 10. Subject:ConsiderationofVacationofaPublicPedestrianWalkwayEasementthroughTract9405, which runs through Campo De Lozano subdivision, located near 20138 Rodrigues Avenue. Considerconductingapublichearing,adoptingResolutionNo.22-031(AttachmentA)tovacatea public pedestrian walkway easement through Tract 9405. Presenter: Chad Mosley, Assistant Director/City Engineer CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 92 CC 03-01-2022 82 of 174 CITY COUNCIL STAFF REPORT Meeting: March 1, 2022 Subject Consideration of Vacation of a Public Pedestrian Walkway Easement through Tract 9405, which runs through Campo De Lozano subdivision, located near 20138 Rodrigues Avenue. Recommended Action Consider conducting a public hearing, adopting Resolution No. 22-xxx (Attachment A) to vacate a public pedestrian walkway easement through Tract 9405. Discussion The Campo De Lozano subdivision, located near 20138 Rodrigues Avenue, was subdivided, and developed around 2002. During the entitlement process, the City requested that the original developer grant the City a 10-foot-wide pedestrian pathway easement through the property, from Rodrigues Avenue to Regnart Creek Trail, to facilitate connectivity from the public right of way to the trail (Attachment B.) When the property was developed, Regnart Creek Trail was situated along the southerly boundary line of the Campo De Lozano subdivision and stretched from the westerly property line of the subdivision, eastward, to the westerly boundary of De Palma Lane, where it connected to publicly accessible sidewalks. The 10-foot-wide pedestrian pathway easement provided this section of trail with a second point of connectivity to the public right of way, ensuring that pedestrian access did not simply end at the westerly end of the trail. In 2020, the City approved construction of new segments of the Regnart Creek Trail, including an extension of the trail westerly from the Campo De Lozano subdivision to Rodrigues Avenue and the Civic Center property. This extension creates an additional point of connectivity to Rodrigues Avenue, approximately 600-feet west of the Campo De Lozano subdivision. t the City now vacate the existing 10-foot-wide pedestrian pathway easement that runs through their subdivision, since the extension of the Regnart Creek trail will provide other connectivity options to the west. Further, the residents of the subdivision have concerns 93 CC 03-01-2022 83 of 174 regarding the security of their property related to the existing pedestrian walkway and the expansion of public use of the Regnart Creek Trail. If the City vacates the pedestrian pathway easement, the HOA intends to restrict public access to the pedestrian pathway that runs through their property. Staff is requesting that the City Council consider adopting a resolution vacating the easement under the California Streets and Highways Code. Sustainability Impact Goal two in the Cupertino Climate Action Plan is to encourage alternative transportation. Supporting measure C-T-1 is to continue to encourage multi-modal transportation, including walking and biking, through safety and comfort enhancements in the bicycle and pedestrian environment. The General Plan includes policies that promote connectivity and mobility: POLICY M-2.3: CONNECTIVITY: Promote pedestrian and bicycle improvements that improve connectivity between planning areas, neighborhoods, and services, and foster a sense of community. POLICY M-3.2: DEVELOPMENT: Require new development and redevelopment to increase connectivity through direct and safe pedestrian connections to public amenities, neighborhoods, shopping, and employment destinations throughout the city. Fiscal Impact The permit application fee for an easement vacation of this type is $4,368, but the fee is being waived for this application per City Council direction at the February 1, 2022, City Council meeting. City staff time and materials will be absorbed by the City. _____________________________________ Prepared by: Chad Mosley, Assistant Director of Public Works, and City Engineer Reviewed by: Jimmy Tan, Acting Director of Public Works Reviewed by: Dianne Thompson, Assistant City Manager Approved for Submission by: Jim Throop, City Manager Attachments: A Draft Resolution B Aerial Exhibit 94 CC 03-01-2022 84 of 174 Attachment A RESOLUTION NO. ________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO TO ORDERTHE VACATION OF A PUBLIC PEDESTRIAN WALKWAY EASEMENT PURSUANT TO SECTION 8320 ET SEQ. OF THE STREETS AND HIGHWAYS CODE OF THE STATE OF CALIFORNIA WHEREAS, a pedestrian walkway easement dedicated to public use presently exists in the Campo de Lozano subdivision (Tract 9405) located near 20138 Rodrigues Avenue in the City of Cupertino, as described in Exhibit A; and WHEREAS, on February 1, 2022, the City Council adopted a resolution of intention to vacate the aforementioned walkway easement, and the City Clerk has posted signs and published notice declaring said intention, and the date, time, and place of a public hearing to consider said intention, pursuant to the provisions of Section 8320 et seq. of the California Streets and Highways Code; and WHEREAS, pursuant to Section 8324 of the California Streets and Highways Code, the City Council finds, from all the evidence submitted, that the public walkway easement described in the notice of hearing is unnecessary for present or prospective purposes; and WHEREAS, it is deemed to be in the public interests that the City Council elects to proceed to order said vacation. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino hereby vacates the aforesaid public walkway easement, as shown and described on the attached map, pursuant to the provisions of Section 8320 et seq. of the California Streets and Highways Code. BE IT FURTHER RESOLVED that the City Council of the City of Cupertino hereby authorizes the City Clerk to record the executed original Resolution in the Office of the Recorder of the County of Santa Clara. BE IT FURTHER RESOLVED that this Resolution is exempt from the requirements of the California Environmental Quality Act (“CEQA”) because it involves the minor alteration of existing facilities, involving negligible or no expansion of existing or former use, and is therefore exempt under CEQA Guidelinessection 150301 (“Existing Facilities”). 95 CC 03-01-2022 85 of 174 Resolution No. __________________ PASSED AND ADOPTED at a regular meeting of the City Council of the City of st Cupertino this 1 day of March, 2022, by the following vote: Members of the City Council AYES: NOES: ABSENT: ABSTAIN: SIGNED: ________ ________________________ Darcy Paul, Mayor Date City of Cupertino ATTEST: ________ ________________________ Kirsten Squarcia, City ClerkDate 96 CC 03-01-2022 88 of 174 CITY OF CUPERTINO Agenda Item 22-10457Agenda Date: 3/1/2022 Agenda #: 11. Subject:ConsideracceptingtheMid-YearFinancialReportforFiscalYear2021-22;consideradopting ResolutionNo.22-032approvingBudgetModification#2122-189increasingappropriationsby $9,457,951 and revenues by $10,220,000 1.Consider Accepting the City Manager’s Mid-Year Financial Report for FY 2021-22 2.ConsiderAdoptingResolutionNo.22-032approvingBudgetModification#2122-189 increasing appropriations by $9,457,951 and revenues by $10,220,000 3.ConsiderApprovingtheConversionof(One)Limited-TermProjectManagerPositiontoFull- Term Position. 4.ConsiderApprovingAmendmentstoCity'sCommitted,UnassignedFundBalance,andUseof One Time Funds Policy which includes the following changes: a.ConsiderApproving$2,000,000contributionfromtheGeneralFundtotheCity’sSection115 Pension Trust b.ConsiderIncreasingtheCity’sGeneralFundEconomicUncertaintyCommittedReserveby $5,000,000 c.ConsiderEstablishingaGeneralFundCapitalProjectCommittedReserveintheamountof $10,000,000 Presenter: Kristina Alfaro, Administrative Services Director CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 99 CC 03-01-2022 89 of 174 CITY COUNCIL STAFF REPORT Meeting: March 1, 2022 Subject Accept the Mid-Year Financial Report for Fiscal Year 2021-22; Consider Adopting Resolution No. 22-XXX approving Budget Modification #2122-189 increasing appropriations by $9,457,951 and revenues by $10,220,000. Recommended Action 1.Consider Accepting -Year Financial Report for FY 2021- 22. 2.Consider Adopting a draft resolution 22-XXX approving Budget Modification #2122-189 increasing appropriations by $9,457,951 and revenues by $10,220,000. 3.Consider Approving the Conversion of (One) Limited-Term Project Manager Position to Full-Term Position. 4.Consider Approving Amendments to Citys Committed, Unassigned Fund Balance, and Use of One Time Funds Policy which includes the following changes: a.Consider Approving $2,000,000 contribution from the General Fund to the Citys Section 115 Pension Trust. b.Consider Increasing the Citys General Fund Economic Uncertainty Committed Reserve by $5,000,000. c.Consider Establishing a General Fund Capital Project Committed Reserve in the amount of $10,000,000. Background On June 15, 2021, the City Council adopted the Fiscal Year (FY) 2021-22 Budget, a $148,845,235 spending plan for the City of Cupertino that was funded by $132,850,958 of revenues and $15,994,277 of fund balance. On November 16, 2021, Council received g plan as part of ts First Quarter Financial Report, which revised the budget to account for encumbrances of $16,868,361 and carryover appropriations of $53,863,626 from FY 2021-22. These carryover appropriations included $18.5 million in capital projects, $19 million for Vallco Town Center, and $5.9 million for Transportation projects. Encumbrances represent funds for 1 9: CC 03-01-2022 90 of 174 obligations related to unfilled purchase orders or unfilled contracts that are rolled over from one year to the next until those obligations are fulfilled or terminated. Carryover appropriations are unencumbered funds for unfinished projects that are carried over for use in the following fiscal year in order to complete those projects. In the first two quarters of FY 2021-22, Council approved $9.6 million in additional appropriations mostly related to the American Rescue Plan Act of 2021 ($4.9 million), Junipero Serra Trail ($1.9 million) and First Quarter Adjustments ($1.6 million). This resulted in an amended budget of $229,162,354. These FY 2021-22 budget adjustments are summarized in the following table: Mid-Year Financial Report Summary of Budget Adjustments by Fund Discussion The Mid-Year Financial Report f December 31, 2021 and recommends adjustments to ensure the budget reflects the to changing spending priorities. As shown in the chart below, $11.3 million in budget adjustments are being requested that are offset with $1.8 million in budget reductions and $10.2 million in revenue. Included in the requested budget adjustments is a $10,000,000 transfer of excess unassigned fund balance from the General Fund to the Capital Reserve in accordance with Reserve and One Time Use Policy. Also included is the fourth of five annual $2 million contributions to the Section 115 Pension Trust, increase in Economic Uncertainty Reserve, and establishment of Capital Projects Reserve. If spending plan would total $238,620,305 across all funds. 2 :1 CC 03-01-2022 91 of 174 A projected increase to unassigned fund balance in the amount of $740,119 across all funds would occur as summarized in the table below. Recommended Adjustments FundDepartment Expenditure Revenue Fund Balance Description (Use of) PARKS & RECREATION DEPARTMENT 560P&R 10,300 - (10,300)Tree Maintenance 560P&R 9,350 220,000 210,650 Additional Revenue Estimate and Bank Charges TOTAL PARKS & 19,650 220,000 200,350 RECREATION DEPARTMENT PUBLIC WORKS DEPARTMENT 280Public Works - 910,000 - (910,000)Lawrence-Mitty Park Debris Removal, Clean Up, and Tree CIPRemoval 420Public Works - (1,847,699) - 1,847,699 All-Inclusive Play Area Budget Reduction CIP 520Public Works 350,000 - (350,000)New Landfill Agreement and Solid Waste Consulting Services 630Public Works 26,000 (26,000)Leaf Blower Replacement TOTAL PUBLIC WORKS (561,699) - 561,699 DEPARTMENT NON-DEPARTMENTAL 100Non- 10,000,000 - (10,000,000)Transfer from General Fund to Capital Reserve Departmental 429Non- - 10,000,000 10,000,000 Transfer from General Fund to Capital Reserve Departmental TOTAL NON- 10,000,000 10,000,000 - DEPARTMENTAL TOTAL ALL 9,457,951 10,220,000 762,049 DEPARTMENTS 3 :2 CC 03-01-2022 92 of 174 G eneral Fund Update 4-Year Comparison of Revenues, Expenditures and Changes to Fund Balance The Cital Fund historical revenue, expenditures and fund balance demonstrates the City has historically budgeted the use of fund balance. This means the General Funds amended budget estimated appropriations to exceed revenues. This use was not due to a structural deficit but due to the transfer out of excess fund balance from the General Fund to the Capital Reserve in accordance with One-time use policy. Due to the Citys encumbrance and budget carryover process, actual expenditures in FY 2020-21 came in lower than expected which resulted in additional excess fund balance. Revenue As of mid-year, General Fund revenue is tracking at $46 million or 2% lower than the same time last year due to changes in the in various revenue sources as shown in the following table. 4 :3 CC 03-01-2022 93 of 174 Comparison of FY 2020-21 and FY 2021-22 General Fund Mid-Year Revenues Sales Tax received as of mid-year was $10.2 million (or 43%) less than last year due to the timing for which payments from the State Board of Equalization are received. Staff anticipate the final second quarter allocation will result in comparable performance year-over-year. Since the start of the pandemic, the Citys business-to-business industry group and its County Pool allocation share has increased substantially. HdL, the Citys sales tax consultant, recently provided a report on sales tax performance during the period July-September 2021. Restaurants and Hotels, General Consumer Goods, Fuel and Service Stations, Building and Construction, and Autos and Transportation were up 71%, 16%, 75%, 3%, and 4%, respectively, representing substantial recovery from conditions experienced earlier in the pandemic. This strong recovery was vastly overshadowed activities in the business to business and pool allocations. Since the start of the pandemic, the Citys business-to-business and county pool allocations have vaulted and as has been expected, we are seeing some tapering of those trends as the State continues to recover and open businesses to the public. Property Tax revenue has come in higher than the same time last year by $445,000 (or 6%). Residential use values increased $829.9 million (or 5%) and represented 84.1% of all growth experienced in the City. Commercial properties posted an increase of $572.8 million or a year-over-year increase of 7.6%. Unsecured assets in Cupertino decreased $700 million (or 28.9%) and were primarily attributable to assets owned by Apple Inc. that were transferred to commercial. Overall, the FY 21-22 property tax revenues are anticipated to increase by 3.5% over the previous fiscal year. There is still uncertainty around post-pandemic impacts to property values, such as expanded and/or permanent 5 :4 CC 03-01-2022 94 of 174 telecommuting. Despite the uncertainty, the Citys property tax base remains strong and HdL is currently projecting property taxes over the next five years as presented below: FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 $29,627,822 $30,897,951 $32,223,088 $33,616,114 $35,072,217 Transient Occupancy Tax continued to be impacted by COVID-19 and the shelter-in-place orders. As of December 31, 2021, the City recognized $1.3 million in transient occupancy tax, which represents 45% of the total amount budgeted in FY 21-22. It also represents an increase of 52% over the Mid-Year point of FY 2020-21 and indicates recovery consistent with the Citys estimations. Utility Tax decreased approximately $15,000 (or 1%) representing consistent performance over the previous year. Franchise Fees have increased by $57,000 (or 9%) primarily due to an increase in Recology franchise fees collected. Other Taxes have decreased by approximately $648,000 (or 38%) primarily due to a one- time construction tax payment received from PSI Storage in FY 20-21. Licenses and Permits increased by $237,000 (or 12%) due to increased volume in building inspection fees. Use of Money and Property increased by $35,000 (or 4%) due to increased interest earnings from the Citys investment portfolio. Intergovernmental Revenue has increased by $2.4 million (or 236%) due to the American Rescue Plan Act funding received. Charges for Services have increased by $1.7 million (or 32%) driven mainly by increases in cost allocation charges. Additionally, charges for services experienced increases due to plan check fees. Fines and Forfeitures have increased $52,000 (or 97%) primarily due to increases in citations administered over the prior year. 6 :5 CC 03-01-2022 95 of 174 Miscellaneou s revenue has decreased by $59,000 (or 6%) due primarily to an increase to an ongoing donation from Apple Inc. to fund additional law enforcement services that were offset with decreases in miscellaneous development agreement contributions. Transfers In have increased by $4.8 million (or 32,316%) due to a $4.8 million transfers related to the American Rescue Plan Act. Other Financing Sources decreased $35,000 (or 40%) due to a reduction in refundable deposit administrative fees collected over the previous fiscal year. Expenditures As of mid-year, overall expenditures in the General Fund are up $9.2 million (or 22%) when compared to the same time last year due primarily to increases in transfers out for the American Rescue Plan Act. The following table shows the differences between General Fund expenditures as of the mid-year in the current fiscal year and the prior fiscal year: Comparison of FY 2020-21 and FY 2021-22 General Fund Mid-Year Expenditures Salary and Benefits increases are approximately $1.8 million (or 14%). Compensation increases are due primarily to labor negotiations approved by Council on July 16, 2019. Increases in salary, driven by cost-of-living adjustments and equity adjustments, can be anticipated for the span of the negotiation term ending June 30, 2022. Additionally, the FY 21-22 Adopted Budget included 6 new full-time benefitted positions (FTE). Shortly after the start of the fiscal year, the City Attorneys Office moved from a contract service to in-house which also increased the FTE count. These classifications also experienced increases due to the timing of pay periods year-over-year. In FY 20-21, there were 12 pay periods in the first have the year and 13 pay periods in FY 21-22. These increases 7 :6 CC 03-01-2022 96 of 174 were offset by increases due to vacancy savings through attrition. Benefit increases were primarily due to retirement, health, and workers compensation costs. Materials costs are down approximately $100,100 (or 5%) due primarily to decreases across Public Works materials accounts, specifically water and electrical charges. Contract Services have increased approximately $324,000 (or 3%) due primarily to increases in the Citys sheriff contract with the County. The increases were offset by reductions due to the City Attorney function moving from contract to in-house. Cost Allocation increases are approximately $737,000 (or 14%) due primarily to increases in I&T and Human Resources charges. Capital Outlay costs are up approximately $9,000, due to capitalizable facilities costs that were not incurred in the previous fiscal year. Special Projects increases are approximately $295,000 (or 45%) due to fluctuations in one- time expenditures. Transfers Out increases are approximately $6.0 million (or 59%) and are due to a one- time transfer out within the General Fund for the American Rescue Plan Act. Other Financing Uses have increased $235,000 (or 231%) due to refundable deposit on- call contracts for the Community Development Department. All Other Funds Update and Year End Projections Revenue As of mid-year, revenue in all other funds is tracking at $40.2 million (or 91%) higher than the same time last year due primarily to an increase in transfers from the General Fund to the Capital Improvement Program and a one-time development agreement contribution to the Citys Park Dedication Special Revenue Fund. 8 :7 CC 03-01-2022 97 of 174 Other Taxes increased approximately $9.1 million (or 3,455%) due to a one-time development agreement (Westport) received in the Park Dedication Special Revenue Fund. Use of Money and Property increased by approximately $102,000 (or 19%) due to increased interest earnings from the Citys investment portfolio compared to the previous fiscal year. Intergovernmental Revenue remained relatively consistent over the previous fiscal year. Charges for services increased approximately $1.0 million (or 24%) primarily due to increases in Youth, Teen, and Recreation and Sports Center compared to the previous fiscal year. Fines and forfeitures increased approximately $30,000 (or 770%) due to an increased volume in citations administered over the prior year. Miscellaneous revenue decreased approximately $2.0 million (or 100%) due primarily to a relative reduction year-over-year in Apple donations received for various City bike/ped capital projects as these projects near completion. Transfers In increased approximately $10.9 million (or 90%) due to an increase in new Capital Improvement Program projects in FY 21-22 require a transfer out of the Capital Reserve. Other financing sources increased approximately $32,000 (or 21%) due to an increase in cost allocation revenues received by Human Resources for Workers Compensation. 9 :8 CC 03-01-2022 98 of 174 Expenditures As of mid-year, overall expenditures are tracking at $28.0 million (or 40%) higher than the same time last year due primarily to increases in transfers out and contract services. Salary and Benefits increases are approximately $287,000 (or 7.6%). Compensation increases are due primarily to labor negotiations approved by Council on July 16, 2019. Increases in salary, driven by cost-of-living adjustments and equity adjustments, can be anticipated for the span of the negotiation term ending June 30, 2022. These classifications also experienced increases due to the timing of pay periods year-over- year. In FY 20-21, there were 12 pay periods in the first have the year and 13 pay periods in FY 21-22. Materials have remained relatively consistent over the previous fiscal year. Contract Services have increased approximately $1.1 million (or 70%) due, but not limited, to increased services provided at the Sports Center. Cost Allocation increased approximately $115,000 (or 11%) due primarily to increases in Innovation & Technology, Human Resources, and Finance charges. Capital Outlays decreased approximately $1.2 million (or 19%) due to a relative reduction in the number of projects progressing compared to last year including, but not limited to, the Library Expansion and the acquisition of Lawrence Mitty Park. Special Projects decreased approximately $739,000 (or 31%) due to decreases in annual asphalt project spending. Debt Service decreased approximately $1.3 million (or 77%) due to the refinancing of the Citys Certificates of Participation. 10 :9 CC 03-01-2022 99 of 174 Transfers Out increased $9.8 million (or 489%) due to an increase in new Capital Improvement Program projects in FY 21-22 that require a transfer out of the Capital Reserve. Budget Adjustment Requests As of the mid-year a few departments are requesting budget adjustments to ensure they end the year within budget appropriations. The recommended adjustments are summarized in the table below: Recommended Adjustments FundDepartment Expenditure Revenue Fund Balance Description (Use of) GENERAL FUND 100Non-Departmental 10,000,000 - (10,000,000)Transfer from General Fund to Capital Reserve TOTAL GENERAL FUND 10,000,000 - (10,000,000) SPECIAL REVENUE FUND 280CIP 910,000 - (910,000)Lawrence-Mitty Park Debris Removal, Clean Up, and Tree Removal TOTAL SPECIAL REVENUE 910,000 - (910,000) FUND CAPITAL PROJECTS FUND 420CIP (1,847,699) - 1,847,699 All-Inclusive Play Area Budget Reduction 429Non-Departmental - 10,000,000 10,000,000 Transfer from General Fund to Capital Reserve TOTAL CAPITAL (1,847,699) 10,000,000 11,847,699 PROJECTS FUND ENTERPISE FUND 520Public Works 350,000 - (350,000)New Landfill Agreement and Solid Waste Consulting Services 560Parks & Recreation 10,300 - (10,300)Tree Maintenance 560Parks & Recreation 9,350 220,000 210,650 Additional Revenue Estimate and Bank Charges TOTAL ENTERPRISE FUND 369,650 220,000 (149,650) INTERNAL SERVICE FUND 630Public Works 26,000 - (26,000)Leaf Blower Replacement TOTAL INTERNAL 26,000 - (26,000) SERVICE FUND TOTAL ALL 9,457,951 10,220,000 762,049 FUNDS Lawrence-Mitty Park (CIP) (280-99-009) The future site of the Lawrence Mitty Park is a vacant parcel of land that is easily accessible and attracted numerous trespassers to congregate on the property. Although the Lawrence Mitty Park and Trail Master plan is underway, some pre-development work is necessary to secure the site and make it less attractive to trespassers until construction commences. Since the site was mainly used by the County as a storage yard, there are stockpiles of construction and demolition debris on site which create barriers for trespassers to be fully obstructed from Lawrence Expressway. The removal 11 :: CC 03-01-2022 100 of 174 of the debris and enhancing security measures would make it less attractive for those trespassers currently residing on the property. The pre-development work includes coordination efforts to relocate the trespassers, removal, and disposal of approximately 3,300 cubic yards of debris, clean-up of the materials left onsite by trespassers, and tree trimming. The total cost is estimated to be approximately $910,000. All-Inclusive Play Area (CIP) (420-99-051) All-Inclusive Play Area Budget Reduction On February 19, 2021, staff issued a memorandum to City Council to provide an update on Jollyman Park All-Inclusive Playground and Grant. As stated, a Request for Proposals (RFP) was issued in December 2019 for professional fundraising services for the Jollyman Park Playground. Three firms were found qualified to provide services. Further evaluation following this process concluded that the fundraising goal for the Playground was too high. During this time, the COVID-19 pandemic shutdowns commenced and it was not appropriate to proceed with designing a project that might substantially exceed the available funding. Experiences by other similar all-inclusive projects elsewhere in the County indicated that the greater than $2 million donation goal was too high. After this conclusion, staff contacted the County to inquire about adjusting the project to structure it for success. Collaboration continued with County staff to identify lower, more realistic fundraising target, associated adjustment of project features to meet goals while reducing total project cost, and longer timeline for project delivery. As a result, staff are recommending a reduction to the fundraising goal of $1 million and an associated reduction of the total project budget of $1,847,699. Resource Recovery (520-81-801) New Landfill Agreement and Solid Waste Consulting Services agreement expires in November 2023. All available options for waste disposition need to be considered, including renewing the current agreement, routing construction and demolition debris to a separate facility, and routing materials through a materials recovery facility. Additionally, the current Franchise Agreement with Recology requires a cost-based rate adjustment review process to inform the maximum rates for year four, which begins February 1, 2024, and recommends a performance review during rate year four. Originally anticipated to begin in July 2022, review of timelines and deadlines suggests and earlier start to this long process is advisable, so creation of this special project and one-time appropriations of $350,000 are being requested as a mid-year adjustment to allow preliminary work to begin during FY 21-22. Blackberry Farm Golf Course (560-63-616) Tree Maintenance - $10,300 in additional appropriations are being requested for tree maintenance, including preventative tree work to remove dense or dead trees at the 12 211 CC 03-01-2022 101 of 174 Blackberry Farm Golf Course. Due to the recent drought, more tree maintenance has been needed to reduce risk to the golf course users. Additional Revenue Estimate and Bank Charges - The Blackberry Farm (BBF) Golf Course requires $9,350 of additional appropriations for bank charges that have resulted due to unanticipated increases in program revenues. Due to the pandemic, golf continues to be popular and one of the safer outdoor activities available to the community. Revenue received from club and cart rentals, merchandise sold at the pro shop, and green fees have exceeded what was originally estimated. The program requires additional funds to continue to cover the excess bank charges from the additional revenue earned and the projected revenue ($220,000) for the rest of the fiscal year. Equipment Maintenance (630-85-849) Leaf Blower Replacement Staff are requesting $26,000 in additional appropriations to replace the Citys numerous leaf blowers. These funds will be used to comply with Cupertino's new blower noise ordinance that goes into effect November 2022 and reduce noise pollution in the community. This request will replace 55 blowers for service center maintenance staff. Due to supply shortages, staff are recommending the request at this time as opposed to waiting to include in the FY 22-23 Proposed Budget. Non-Departmental (100-90-001 & 420-90-001) Transfer to Capital Reserve Staff are recommending a $10,000,000 transfer of excess General Fund fund balance to the Capital Reserve for purpose of funding current and future capital projects. This request does not appropriate these dollars for specific projects; rather, it simply moves the cash out of the General Fund and into the Capital Reserve. Section 115 Trust (PRSP) Staff are recommending an additional contribution of $2,000,000 to the Citys Section 115 Trust (Pension Rate Stabilization Program). The City established this trust with PARS in 2018 for purposes of 1) maintaining local control over assets, 2) mitigating impact of large pension cost fluctuations, 3) potential for higher investment returns than General Fund, and 4) asset diversification. The trusts assets are required to be used to pay CalPERS for related retirement costs; however, at this time, staff do not anticipate drawing down from this trust in the near future. In 2018, the City made an additional contribution of $8,000,000 and had recommended funding $2 million annually for five (5) years. With this strategy, the trust would accumulate sufficient funds to pay the difference between a 7% and 6.25% discount rate, or approximately $42 million. With a total principal contribution amount of $14 million to date, approving this $2 million additional contribution will allow the City to be on schedule to address this funding gap by 2037. This transfer request moves 13 212 CC 03-01-2022 102 of 174 funds from the General Funds unassigned fund balance classification to the restricted fund balance classification and therefore does not require a budget adjustment or appropriation. Per the Citys Committed, Unassigned Fund Balance, and Use of One Time Funds Policy, funds in this trust may be used only at the discretion of City Council. Staffing The Amended Budget as of December 31, 2021, has a total of 203.75 FTEs (208.75 including City Council). Staff are recommending the following changes which will have no fiscal impact for the remainder of FY 21-22. Reclassify (One) Limited-Term Project Manager Position to Full Term Position - The majority of active projects residing with the CIP group are longer than 1 - 2 year projects. Presently there are two limited term CIP Project Manager positions, expiring November 2022 and Jrt into regular term positions. The project manager in this position is working on long term projects, as are all the Project Managers, and it would be a disruptive and financially ineffective to the progress of the projects if CIP were to lose this Project Manager positions. CIP Group staff strive to d having talented, dependable, and experienced Project Managers is important. The reclassification of this position will allow the City to continue utilizing the Project Managers to complete their projects and take on additional projects without any disruption. Fund Balance s General Fund ended FY 2020-21 with $96.9 million in total fund balance. As part of the FY 2021-22 Adopted Budget, the City projected ending the fiscal year with $83.1 million in total fund balance. As of the First Quarter Report, the City updated its year-end projections for FY 2021-22 to $111.9 million in total fund balance, an increase of $28.8 million due to increases in revenues received and lower expenditures in FY 2020-21. Projected year-end fund balance as of mid-year FY 2021-22 is estimated to be $101.8 million. The $101.8 million projection includes a one-time transfer out of $10 million to the Capital Improvement Program Reserve Fund, a $2 million contribution to the Section 115 Pension Trust, an increase to the Economic Uncertainty Reserve from $19 million to $24 million, and the establishment of a $10 million Committed Capital Projects Reserve. If approved, projected ending unassigned fund balance will be $37.2 million. 14 213 CC 03-01-2022 103 of 174 General Fund Classification of Fund Balance To date, s external auditors have not completed their revis financials. Revenue, expenditure, and fund balance totals listed in this report are preliminary and subject to change after a full review by the Citty Staff does not anticipate many, if any, changes to these figures. Per Committed, Unassigned Fund Balance, and Use of One Time Funds Policy, unassigned fund balance over $500,000 are to be used in the following order to replenish committed fund balances with any remaining balances to be placed in the Capital Reserve: 1.Economic Uncertainty increasing from $19 million to $24 million th 2.PERS - $2 million contribution (4 of 5 contributions) 3.Sustainability Reserve 4.Capital Projects - $10 million 5.Unassigned Staff recommend increasing the Economic Uncertainty Reserve from $19 million to $24 million. This increase more accurately reflects the formula stated in the Citys Committed, Unassigned Fund Balance, and Use of One Time Funds Policy (page 105 of the Adopted Budget). Staff are also recommending the establishment of a Committed Capital Projects Reserve with a starting balance of $10 million. The Citys Capital Improvement Program (CIP), while it has been funded with grants and donations, has primarily been funded with General Fund resources ($68 million over the last 6 fiscal years). As a result, the CIP has 15 214 CC 03-01-2022 104 of 174 become heavily reliant on a funding source that may not always have similar levels of funding from one year to the next. Establishing a Committed Reserve will provide financial planning support to ensure resources are readily available to fund future CIP projects. This reserve will be established at $10 million and, only with City Council authority, will be used to fund future capital projects. Performance Measures & Workload Indicators Updated performance measures and workload indicators that align with government and private industry best practices have been included in the Mid-Year Financial Report. Attachment C represents the status of the performance measures as of Mid- Year. City Manager Discretionary Fund As part of the FY 2021-22 Adopted Budget, City Council recommended and approved the reduction of the City Manager Discretionary Fund to an annual amount of $75,000. The quarterly budget reports will detail the City Managers use of the discretionary fund and may include recommendations to replenish depending on the extent and nature of use. As of December 31, 2021, $2,400 was used to assist with funding a Tripepi Smith contract for the Housing Op-Ed. American Rescue Plan Act of 2021 (ARP) On September 7, 2021, City Council approved use of American Rescue Plan Act of 2021 funding allocation and approved budget modification #2122-162 increasing appropriations in the General Fund (100-90-001 page 583 of the FY 2021-22 Adopted Budget) by $4,847,386.50 and revenues in the General Fund by $4,847,386.50. Of the four (4) allowable uses of funds: 1.Public Health/Negative Economic Impacts, 2.Premium Pay, 3.Revenue Loss, and 4.Investments in Water, Sewer, and Broadband Staff recommended, and City Council approved the allocation of use towards Revenue Loss. City staff anticipate realizing these losses before December 31, 2023, the end of the period of availability. This action allows the City to maintain current levels of operations and government services and affords City Council the continued ability to consider new projects and initiatives in the future. The budget modification moves dollars from the General Funds Non-Departmental Department to all other Departments in the General Fund for purposes of substantiating and reporting the use of grant dollars received. As expenditures are incurred, and revenue losses are realized, the City will recognize the $4,847,386.50 in revenues on a matching basis. As of 16 215 CC 03-01-2022 105 of 174 December 31, 2021, the City has recognized $3,054,213 of ARP revenues ($286,248 in Q2). Below is the status of the specific items as of December 31, 2021, that were approved by ARP funding. Conclusion The Mid-Year Financial Report shows the City is well-positioned to move forward. City staff recommend adjustments of $9,457,951 in new appropriations funded by $10,220,000 in revenues. If approved, the Citys fund balance will increase by $762,049. Prepared by: Zach Korach, Finance Manager Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Jim Throop, City Manager Attachments: A Draft Resolution B Mid-Year Financial Report for Fiscal Year 2021-22 C Mid-Year Performance Measures D Mid-Year Budget Adjustment Journal E Budget Transfers Detail as of 12.31.2021 F Committed, Unassigned Fund Balance, and One Time Funds Policy (Clean) G Committed, Unassigned Fund Balance, and One Time Funds Policy (Redline) 17 216 CC 03-01-2022 106 of 174 Attachment A RESOLUTION NO. 22-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING THE OPERATING BUDGET FOR FISCAL YEAR 2021-22 BY APPROPRIATING, TRANSFERRING, AND UNAPPROPRIATING MONIES FOR SPECIFIED FUNDS WHEREAS, the orderly administration of municipal government depends on a sound fiscal policy of maintaining a proper ratio of expenditures within anticipated revenues and available monies; and WHEREAS, accomplishing City Council directives, projects and programs, and performing staff duties and responsibilities likewise depends on the monies available for that purpose; and WHEREAS, the City Manager has determined that the balances from the funds specified in this resolution are adequate to cover the proposed amended appropriations, and therefore recommends the fund reallocations described herein. NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby approve the recommended fund reallocations and ratifies the attached amended appropriations as set forth in Exhibit A. PASSED AND ADOPTED at a regular meeting of the City Council of the st City of Cupertino this 1 day of March 2022, by the following vote: Vote Members of the City Council AYES: NOES: ABSENT: ABSTAIN: 217 CC 03-01-2022 107 of 174 SIGNED: ________ ________________________ Darcy Paul, Mayor Date City of Cupertino ATTEST: ________________________ ________________________ Date Kirsten Squarcia, City Clerk Attachment A Appropriation Appropriation Revenue Fund Balance Amendment by Fund Amendment Amendment (Use of) General Fund $10,000,000 $- ($10,000,000) Special Revenue Fund $910,000 $- ($910,000) Capital Projects Funds ($1,847,699) $10,000,000 $11,847,699 Enterprise Fund $369,650 $220,000 ($149,650) Internal Service Fund $26,000 $- ($26,000) Total Appropriation $9,457,951 $10,220,000 $762,049 Amendment All Funds (Exhibit A) 218 CC 03-01-2022 108 of 174 219 CC 03-01-2022 109 of 174 21: CC 03-01-2022 110 of 174 221 CC 03-01-2022 111 of 174 222 CC 03-01-2022 112 of 174 223 CC 03-01-2022 113 of 174 224 CC 03-01-2022 114 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: City Manager's Office, City Clerk Division GOAL: Streamline information processing for Council, staff and community members for compliance with State requirements and facilitate independent and transparent access to public information. FY20 FY21 FY22 Ongoing Jul-JunJul-JunJul-DecTarget Enabled by…Measure City Council minutes for meetings Online presented for Council approval by the 100%100%100%100% information and following regular meeting updated records Adopted City Council resolutions and that can be ordinances processed and scanned to easily accessed Laserfiche within a week of Clerk’s 60%80%80%100% in a timely office receipt of final, signed document manner. Public Record Act requests responded 100%100%100%100% to by the Statutory deadline date Response to records requests to comply with State law of 10 days. So that… All can fully participate in local government to achieve the community & organizational goals. 225 CC 03-01-2022 115 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Administration, City Manager's Office, Sustainability Division GOAL: Implement Cupertino’s Climate Action Plan and General Plan Sustainability Element to achieve quantifiable emissions reductions, conserve finite resources, and achieve utility cost avoidance and savings across municipal operations and community partners. FY20 FY21 FY22 Ongoing Enabled by…MeasureJul-JunJul-JunJul-DecTarget Anagency % community-wide emissions reduced 15% implementing from baseline of 307,288 MT CO2e/yrreduction 2018 inventory: 24% decrease in Council and by 2020 emissions from baseline community (261,195 (258,659 MT CO2e/yr) sustainability MT goals to CO2e/yr) effectively Initiate and implement all Climate safeguard Action Plan near-term measures shared resources. % initiated 100% 100%100%100% % complete or ongoing 79%79%79%100% % municipal operations emissions 2018 inventory: 66% reduction 15% Engaged reduced from baseline of 1,865 MT in emissions from baseline: 642 reduction community CO2e/yr MTCO2eby 2020 partners and 1 Cupertino's GHG inventories are conducted roughly every 3-5 years. volunteers supporting CAP implementation So that… Cupertino is a thriving City to live, work, learn and play. 226 CC 03-01-2022 116 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Administration, City Manager's Office, Office of Communications Division GOAL: Promote and increase interest and participation in City services, programs, initiatives, and projects while building community pride and positive identification with the City among its residents. FY20 FY21 FY22 Ongoing Enabled by…MeasureJul-JunJul-JunJul-DecTarget Social media engagement: total number Leveraging the of followers including City Hall communication 10% Nextdoor, Facebook, Twitter, and skills, 31,90635,17737,367annual Instagram accounts knowledge, and increase experience of employees while utilizing existing Social media engagement: average and emerging 10% number of engagements (reactions, technologies to 72.366.585.1annual comments, shares, and clicks) per post enhance, increase on City Hall Facebook account improve, and streamline the Cupertino 311: Average response time to communication Average customers organization-wide (in days): process. 2.8 Days3.5 Days3.3 DaysClose Time 5 Days So that… Residents have access to timely, engaging, and important information Clicks have now been added to the engagement metric, which will bump up the average number. The performance measure for “Access Cupertino: Average response time to customers organization-wide” was revised as Access Cupertino was replaced by Cupertino 311 in September 2017. The target has been revised to “Average Close Time,” which reflects how many days it took to handle a request. The Cupertino 311 Application is administered through the IT Department, but each individual department is responsible for responding to its own requests. Response times are organized by request category. 227 CC 03-01-2022 117 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Administration, City Manager's Office, Video Division GOAL: Video Division oversees numerous outreach projects, public meetings, internal equipment upgrades, and public events. These activities coincide with the City Council and City’s expectation for a positive presence in the community and communications and transparency to residents. Enabled by… FY20 FY21 FY22 Ongoing 24/7 government access MeasureJul-JunJul-JunJul-DecTarget Percentage of total video productions channel, radio station, 145%522%362% performed vs scheduled productions (city 100% digital signage network, 32/2247/929/8 meetings excluded) City website, and Percentage of total engineering projects vs 233%250%300% numerous online video 100% scheduled projects 7/315/66/2 platforms. Total video views on YouTube and Granicus 5% annual 215,607246,31383,417 platforms combined*increase * Percentage skewed due to pandemic - more overall views due to daily press conference postings So that… Public awareness, interest, understanding,and participation in the issues, programs, and services presented by the City of Cupertino can be enhanced. 228 CC 03-01-2022 118 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: City Manager's Office, Economic Development Division GOAL: To actively pursue opportunities in the areas of business attraction, retention, and expansion as a means of promoting economic vitality, and strengthening the City’s sales tax base to support Cupertino’s excellent quality of life for its residents, businesses, and daytime population. FY20 FY21 FY22 Enabled by… MeasureJul-JunJul-JunJul-DecOngoing Target Effective Maintain Economic Development 2,0002,5002,5002,800 partnerships Business Connect Subscribers and proactive Economic Development Economic Development Business 113*212 per year Workshops & Events programs to support local businesses. *limited due to COVID So that… Cupertino's economyand sales tax revenue base are diversified to further enhance the City's financial stability and its ability to provide quality amenities to the community. 229 CC 03-01-2022 119 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Law Enforcement Law Enforcement Goal: Maintain a safe environment to live, work, learn and play. FY20 FY21 FY22 Ongoing Enabled by…MeasureJul-JunJul-JunJul-DecTarget Priority 1 3.513.404.315 minutes Response time for emergency callsPriority 2 6.376.076.529 minutes All members of the Priority 3 11.9611.8011.2820 minutes community are % programs maintaining minimum Teen Academy 83%92%90%80% safe, informed, Citizen Academy65%N/AN/A80% attendance empowered and supported. 22: CC 03-01-2022 120 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Innovation & Technology Innovation & Technology Goal: Provide superior delivery of information and technology services to city employees and constituents while continually enhancing levels of engagement. FY20 FY21 FY22 Ongoing Enabled by…MeasureJul-JunJul-JunJul-DecTarget GIS: % of time spent Developing Application10%25%25%35% Tools and GIS: % of time Maintaining services leverage 65% 90%75%70% applications existing, GIS: Met Requests within SLA (map, emerging and 97%98%100%100% data, Web maps, Cityworks, schema, innovative other) completed technologies to GIS: Increase Property Information enhance, 900/600 665/2,671691/533838/575 (Internal/External) site visits per month improve, and streamline GIS: Cityworks utilization - # of assets business and Cupertino maintains vs # of assets 45/31 45/3145/3545/45 communications maintained in Cityworks. Also the % 70%20%50%20% processes increase of work units completed (WOs, INSP,SRs) Infrastructure: Percentage based upon 71% number of scheduled projects/Number 80%86%100% of projects completed on time Integrated Infrastructure: Percentage based upon information 93% 90% number of HelpDesk tickets/SLA 93%94% services enable measurements customers’ Infrastructure: % Customer satisfaction access to the 85% based upon Satisfaction Rate from 99.1%98.7%100.0% tools and helpdesk tickets information they Infrastructure: % of network uptime need, when and 99% 99.9%99.9%100.0% where they need (not including planned maintenance) it Applications: % of citywide-enterprise 95% application project management 96%95%95% performed on time and on budget 5% Applications: Number of website site 1,624,377800,164823,496annual visits/Number of site hits increase Applications: Number of support request for the applications support 45655520 per month * Not tracked 231 CC 03-01-2022 121 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Administrative Services Finance Goal: Financial Stability - Provide a sustainable level of core services that are funded from ongoing and stable revenue sources. FY20 FY21 FY22 Ongoing So that…Measure Jul-JunJul-JunJul-DecTarget General Fund fund balance as a % of The City is 69%103%78%35% budgeted appropriations financially AA+AA+AA+AA+ responsible. Credit Rating Actual revenue vs. budget (% below -7%-19%-35%10% budget) The City can 17%15%23%5% invest in Actual expenditures (% below budget) Community Funding allocated to high priority priorities. 43%53%53%63% services (Public Works, Community Development, Law Enforcement) So that… Citizens can enjoy high quality services that meet community priorities. Human Resources Goal: To create a thriving organization with meaningful careers in public service. So that… FY20 FY21 FY22 Ongoing TheCity can MeasureJul-JunJul-JunJul-DecTarget ensure a safe # of Worker’s Compensation Cases 1510130 working Total recordable Injury Rate YTD 5.70%LMLM0% environment for % absenteeism all employees 3%2%2%2% (% of total annual work hours) % turnover rate 3%5%3%1% % Employee satisfaction N/AN/AN/A100% The City attracts % Employee participation in wellness and retains a 47%43%47%75% activities talented Average # of applications received per workforce 41704850 recruitment Recruitment timeline - # days from 85787060 hiring request to offer letter The agency builds # of employees using the Telework N/AN/AN/A17 a flexible and program productive work % Utilization of full-service employee arrangement. 100%N/A*N/A*100% portal *Data not applicable So that… Citizens can enjoy high quality services that meet community priorities. 232 CC 03-01-2022 122 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Community Development Department Community Development Goal: Review and guide development activity to ensure compliance with relevant codes and policies, and alignment with community values to promote and enhance Cupertino's community-wide quality of life. FY20 FY21 FY22 Jul-JunJul-JunJul-DecOngoing Target Enabled by…Measure Efficient planning and 92%93%93%80% Building permit applications shall be building plan reviewed within 15 business days. services and Customer/Applicants visiting the enhanced Building Permit Counter shall be assisted 93%**100%***80% customer within 15 minutes service. Applicants visiting the Planning Counter shall be assisted within 15 minutes 91%**100%***50% Effective code enforcement Building permit applications 63%****75% services. reviewed/issued over-the-counter (OTC) Below market rate rental and purchase 111411 15 per year vacancies filled Housing resources and referrals Affordable and 10912982 100 per year provided Below Market Complimentary/courtesy prelim app 83%79%69% 80% Rate Housing reviews completed within 4 weeks programs and Average number of days to initiate 0.210.0770.059< 7 public service investigation of code complaints grants. Code enforcement cases resolved without 85%98%91%80% issuance of citations Landlord-tenant counseling and dispute 284623 100 per year resolution cases provided Public Outreach Events 4**** 12 per year *Data provided from July 2019 - February 2020 due to shelter-in-place mandate. ** No data due to closure of city hall. *** In-person appointment started July 15, 2021, the counters were temporary closed in January 10, 2022 due to the surge of the COVID-19 Omicron variant. So that… Cupertino is a thriving City to live, work, learn and play. 233 CC 03-01-2022 123 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Parks and Recreation Parks and Recreation Goal: Create a positive, healthy and connected community. FY20 FY21 FY22 Ongoing Enabled by… Jul-JunJul-JunJul-DecTarget Measure City investment in % of Parks and Recreation Department quality recreation customers surveyed who rate services 98%94%91%85% and community as good or excellent programs % of programs maintaining minimum 62%46%79%80% registration % Department's total cost recovery for 37%39%50%40% all (direct and indirect) costs Improved -16%-39%117%+1% % change in participants* business processes to improve 8937450 # of new programs or events offered customer *Increase due to more programs offered and partial reopening of services. experience So that… Cupertino has an exceptional system of parks and services that align with community values. 234 CC 03-01-2022 124 of 174 City of Cupertino FY 21-22 Budget Performance Measures Department: Public Works Capital Project Delivery Goal: Develop and deliver projects on time and within budget that serve the resident's needs and supports the City's stability and growth So that… FY20 FY21 FY22 Ongoing City funds Jul-Jun Jul-JunJul-DecTarget Measure capital improvement Percentage of projects completed on 95%90%100%95% projects. budget Percentage of construction projects 78%90%100%95% completed on time Projects are *FY21: 10 projects completed, 9 projects on budget and time utilized by the *FY22: 2 projects completed community. Benefit:Residents and businesses are assured their community is being improved by insightful, targeted and efficient useof taxes and fees towards maintaining and improving the City's facilities and assets. 235 CC 03-01-2022 125 of 174 Environment Goal: Protect our natural environment for current and future generations. FY20 FY21 FY22 Ongoing So that... Jul-JunJul-JunJul-DecTarget Measure City is Percent of businesses in compliance responsible for 95%96%N/A*75% during annual proactive stormwater a pollution prevention inspections comprehensive Percent of non-exempt businesses and 100% by storm water CY 2019 multi-family accounts separating 79%**81%***7/1/2022 pollution 64% organics (SB1383) prevention 100% by program. Percent trash/litter reduction achieved to 92%88% N/A**** 7/1/2022 meet Stormwater Permit requirements Diversion rate from all single-family, Potential multi-family, and commercial accounts 54%53%52%55% pollutants are as reported by Recology tonnage reports stopped before entering the storm drain Respond to reports of actual or potential 89%89%97%95% system. discharge the same business day % of plan reviews completed in required 83%90%91%100% City implements number of days solid waste Cubic yards of compost distributed via 1,000 CY 740 CY1,165 CY240 CY collection compost site services that % of vegetation obstructions resolved encourage within 15 days from time of report* 38%31%35%100% diversion of waste from landfills. *Inspections occur in the spring only **as of 12/31/2020 ***as of 9/7/2021 ****calculated for Annual Report in September Diversion of solid waste from Benefit: Current and future residents enjoy a healthy, sustainable environment. landfill is maximized, compost is produced for communityuse, recyclable material is sold to help offset collection costs and methane gas emissions at landfills are reduced. 236 CC 03-01-2022 126 of 174 Development Services Goal: Provide timely review and permitting of privately completed improvements within the public right of way. So that… FY20 FY21 FY22 Ongoing Improvements MeasureJul-JunJul-JunJul-DecTarget within the public right of Respond to complete plan submittals or 95%93%95%90% wayhave applications within two (2) weeks engineering oversight and Respond to complete encroachment are constructed 93%92%94%90% permit applications within two (2) weeks to City standards. Respond to public inquiries at the Public Works counter in City Hall within 15 95%**95% minutes *In-person counter closed starting March 2020 Benefit: Customers can expectquality reviews and permitting on a defined Public schedule, and the community can expect quality public facilities. improvements are consistent and meet the needs of the community. Grounds Division Goal: Provide well maintained, clean, and safe areas for the community’s recreational use and enjoyment at optimal life cycle costs. FY20 FY21 FY22 Ongoing So that...MeasureJul-JunJul-JunJul-DecTarget The City Percentage of 311 requests that are consistently responded to and closed within 3 72%74%85%80% funds park business days maintenance and safety Percentage of the 2,964 park inspections, improvement including play grounds, performed 3 100%100%50%100% programs. times weekly Parks are Percentage of Backflow Prevention maintained in Devices inspected, tested and repaired 100%100%50%100% good,usable annually condition; safety programs are Benefit:Cupertino has a well maintained public park systemthat meets the effective. needs of the community and is beneficial to personal wellness. 237 CC 03-01-2022 127 of 174 Streets Division Goal: Timely maintenance of public sidewalks, streets, streetlights and storm drain system in good condition to ensure safe, environmentally compliant, and accessible infrastructure that minimizes liability and has an optimal life cycle cost. FY20 FY21 FY22 Ongoing Jul-JunJul-JunJul-DecTarget So that…Measure Pavement condition index (PCI) > or The City 85858582 equal to 82 consistently Percent of the 2199 storm drain inlets funds street and 94%95%1%100% inspected and cleaned in fiscal year storm drain Percent of Inlets with Trash Capture maintenance 100%100%50%100% Screens inspected and cleaned twice and safety yearly improvement Percentage of roadway regulatory & 5.1%5.5%2.8%7% programs. street name signs repaired or replaced Percentage of trip and fall complaints investigated and mitigated within 2 100%100%100%98% business days Percentage of reported streetlight Street and outages investigated and repaired in 3 89%90%90%90% storm drain systemsare business days maintained in a Benefit: Cupertino has well maintained street and storm drain systemsthat good condition; meet the needs of the community. safety programs are effective. Trees and Right of Way Division Goal: Maintain and enhance the City's street trees and medians to ensure a safe, healthy and environmentally conscious Urban Forest. FY20 FY21 FY22 Ongoing Jul-JunJul-JunJul-DecTarget So that...Measure The City Percentage of 311 requests that are consistently responded to and closed within 3 96%95%83%95% funds street business days tree and median Percentage of trees inspected and maintenance maintained in the yearly maintenance 76%97%23%100% and safety zone (8 year maintenance cycle) programs Percentage of trees planted versus trees 76%92% 78% removed101% 69/91187/20266/84 # planted/# removed Street trees and medians remain in good Benefit: Cupertino has ahealthy and safe urban forest and medians provide health and good aesthetic and environmental value. condition 238 CC 03-01-2022 128 of 174 Facilities and Fleet Division Goal: Timely maintain City Facilities and City Fleet to meet staff, community and environmental requirements at an optimal life cycle cost. FY20 FY21 FY22 Ongoing Jul-JunJul-JunJul-DecTarget So that…Measure The City consistently Percentage of preventative maintenance funds facility 82%83%97%85% work orders completed for Fleet assets and fleet within 14 days of the due date. maintenance, fleet procurement, and safety improvement Percentage of facilities maintenance 90%89%83%90% programs. requests closed within 30 days. Facilitiesand Benefit: Cupertino has well maintained, usable, andsafe facilities and fleet Fleet remain in good and in order to meet the needs of staff and the community. operable condition. Transportation Division Goal: Ensure the efficiency and safety of the transportation system for all modes of travel. FY20 FY21 FY22 Ongoing So that...MeasureJul-JunJul-JunJul-DecTarget Percentage of non-emergency traffic Infrastructure 90%90%93%100% signal requests addressed within 72 indicates good hours. condition; safety Percentage of emergency traffic signal 100%100%100%100% programs are requests addressed within 2 hours. effective. Percentage of traffic engineering 95%95%95%95% requests responded to within 72 hours Annual mileage increase of separated 0.721.300.661 mile bicycle lanes and pedestrian paths. Benefit: Having a safe and efficient transportation system that is inviting for all modes of travel. 239 CC 03-01-2022 AttachmentD 129 of 174 MidYearFY202122RecommendedAdjustments FundGLAccountExpendituresRevenuesFundBalanceDescription GENERALFUND 100GeneralFund1009000180090210,000,000(10,000,000)TransferfromGeneralFundtoCapitalReserve TOTALGENERAL10,000,000(10,000,000) FUND SPECIALREVENUEFUND 280ParkDedication28099009700702910,000(910,000)LawrenceMittyParkDebrisRemoval,CleanUp,andTree Removal TOTALCAPITAL910,000(910,000) PROJECTSFUND CAPITALPROJECTSFUND 420Capital42099051900905(1,847,699)1,847,699AllInclusivePlayAreaBudgetReduction ImprovementProjects 429CapitalReserve4299000142140110,000,00010,000,000TransferfromGeneralFundtoCapitalReserve TOTALCAPITAL(1,847,699)10,000,00011,847,699 PROJECTSFUND ENTERPRISEFUNDS 520ResourceRecovery52081801750XXX350,000(350,000)NewLandfillAgreementandSolidWasteConsulting Services 560BlackberryFarm560636164204337,7007,700AdditionalRevenueEstimateandBankCharges GolfCourse 560BlackberryFarm560636164204446,3006,300AdditionalRevenueEstimateandBankCharges GolfCourse 560BlackberryFarm56063616450403206,000206,000AdditionalRevenueEstimateandBankCharges GolfCourse 560BlackberryFarm(10,300)TreeMaintenance 5606361670070210,300 GolfCourse 560BlackberryFarm560636167007079,350(9,350)AdditionalRevenueEstimateandBankCharges GolfCourse TOTALENTERPRISE369,650220,000(149,650) FUNDS INTERNALSERVICEFUNDS 630Vehicle6308584960060826,000(26,000)LeafBlowerReplacement Replacement TOTALINTERNAL26,000(26,000) SERVICEFUNDS TOTALALLFUNDS9,457,95110,220,000762,049 23: CC 03-01-2022 AttachmentE 130 of 174 BudgetTransfersasofDecember31,2021 GLAccountAmountDescription 10010100700702ContractServicesGeneralServiceAgreement$2,400HousingOpEdTripepiSmithCMDiscretionary 10014123719705ContingenciesContingencies$(2,400)HousingOpEdTripepiSmithCMDiscretionary $ 10012120600642MaterialsTelphoneandDataServices$(1,040)DivisionaltransfertofundsatelitephonewithCounty 10012633600642MaterialsTelphoneandDataServices$1,040DivisionaltransfertofundsatelitephonewithCounty $ 10071705500501EmployeeCompensationSalariesFullTime$115,115EconomicDevelopmentManagerTransferfromContractServices 10071705501500EmployeeBenefitsRetirementSystem$36,019EconomicDevelopmentManagerTransferfromContractServices 10071705501502EmployeeBenefitsPers1959SurvEmpr$41EconomicDevelopmentManagerTransferfromContractServices 10071705501505EmployeeBenefitsHealthInsurance$12,473EconomicDevelopmentManagerTransferfromContractServices 10071705501506EmployeeBenefitsDentalInsurance$918EconomicDevelopmentManagerTransferfromContractServices 10071705501507EmployeeBenefitsMedicare$1,669EconomicDevelopmentManagerTransferfromContractServices 10071705501508EmployeeBenefitsLifeInsurance$482EconomicDevelopmentManagerTransferfromContractServices 10071705501509EmployeeBenefitsLongTermDisability$438EconomicDevelopmentManagerTransferfromContractServices 10071705501511EmployeeBenefitsVisionInsurance$120EconomicDevelopmentManagerTransferfromContractServices 10071705501513EmployeeBenefitsRecBucks$335EconomicDevelopmentManagerTransferfromContractServices 10071705700702ContractServicesGeneralServiceAgreement$(167,610)EconomicDevelopmentManagerTransferfromContractServices $ 10015141600642MaterialsTelphoneandDataServices$432SeniorAssistantCAOCellPhone 10015141700702ContractServicesGeneralServiceAgreement$(432)SeniorAssistantCAOCellPhone $ 10015141600642MaterialsTelphoneandDataServices$432CAOCellPhone 10015141700702ContractServicesGeneralServiceAgreement$(432)CAOCellPhone $ 10015141600613MaterialsGeneralSupplies$10,425CAOannualsubscriptions 10015141700702ContractServicesGeneralServiceAgreement$(10,425)CAOannualsubscriptions $ 10015141500501EmployeeCompensationSalariesFullTime$158,398SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501500EmployeeBenefitsRetirementSystem$49,563SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501502EmployeeBenefitsPers1959SurvEmpr$42SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501505EmployeeBenefitsHealthInsurance$12,426SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501506EmployeeBenefitsDentalInsurance$915SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501507EmployeeBenefitsMedicare$2,297SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501508EmployeeBenefitsLifeInsurance$480SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501509EmployeeBenefitsLongTermDisability$436SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501511EmployeeBenefitsVisionInsurance$120SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141501513EmployeeBenefitsRecBucks$334SeniorAssistantCityAttorneyreclassforsalaryandbenefits 10015141700702ContractServicesGeneralServiceAgreement$(225,011)SeniorAssistantCityAttorneyreclassforsalaryandbenefits $ 10015141500501EmployeeCompensationSalariesFullTime$255,000CityAttorneyreclassforsalaryandbenefits 10015141500506EmployeeCompensationCarAllowance$4,200CityAttorneyreclassforsalaryandbenefits 10015141501500EmployeeBenefitsRetirementSystem$79,790CityAttorneyreclassforsalaryandbenefits 10015141501502EmployeeBenefitsPers1959SurvEmpr$62CityAttorneyreclassforsalaryandbenefits 10015141501505EmployeeBenefitsHealthInsurance$4,500CityAttorneyreclassforsalaryandbenefits 10015141501506EmployeeBenefitsDentalInsurance$1,372CityAttorneyreclassforsalaryandbenefits 10015141501507EmployeeBenefitsMedicare$3,698CityAttorneyreclassforsalaryandbenefits 10015141501508EmployeeBenefitsLifeInsurance$720CityAttorneyreclassforsalaryandbenefits 10015141501509EmployeeBenefitsLongTermDisability$654CityAttorneyreclassforsalaryandbenefits 10015141501511EmployeeBenefitsVisionInsurance$179CityAttorneyreclassforsalaryandbenefits 10015141501513EmployeeBenefitsRecBucks$500CityAttorneyreclassforsalaryandbenefits 10015141501517EmployeeBenefitsDeferredComp$19,500CityAttorneyreclassforsalaryandbenefits 10015141700702ContractServicesGeneralServiceAgreement$(370,175)CityAttorneyreclassforsalaryandbenefits $ 10032308600606MaterialsSoftware$(8,000)Softwarepurchasetocontractservice 10032308700702ContractServicesGeneralServiceAgreement$8,000Softwarepurchasetocontractservice $ 10032308600606MaterialsSoftware$(15,000)Softwarepurchasetocontractservice 10032308700702ContractServicesGeneralServiceAgreement$15,000Softwarepurchasetocontractservice $ 10088846700702ContractServicesGeneralServiceAgreement$(435,185)Transfertospecificcontractserviceaccountfortrackingpurposes 10088846700709ContractServicesCrossingGuard$435,185Transfertospecificcontractserviceaccountfortrackingpurposes TOTAL$ 241 CC 03-01-2022 131 of 174 Attachment F Fiscal Policies Committed, Unassigned Fund Balance, and Use of One Time Funds Policy PURPOSE To establish assigned and unassigned fund balance and one time use policies. SCOPE The General Fund and Capital Funds. POLICY To maintain sufficient committed and unassigned fund balance (general fund only) in each fund for the ability to meet following economic uncertainties: Economic Uncertainty $24,000,000 and represents two months of General Fund (GF) operating expenditures excluding transfers out plus a two year drop in total general fund revenue of 13% or approximately 1.5 months, excluding the use of reserves. Transfers out are primarily used to fund Capital Projects and do not represent on-going expenditures. This assignment will change from year to year based on budgeted general fund expenditures and revenues. Mitigate short-term economic downturns and volatility in revenues (2 years or less) Sustain city services in the event of an emergency Meet requirements for debt reserves Meet operating cash flow requirements as a result of delay in the receipt of taxes, grant proceeds and other operating revenues PERS $20,491,004 and represents the Stabilization Program (PRSP). As a result of the significant increase in retirement costs based on the most recent actuarial forecast, the City elects to establish and fund a secondary pension trust budget. Annual contributions subsequent to the initial funding are determined by calculating count rate and a more conservative rate determined by the City. This difference is to be transferred to the pension trust and to be used solely for the benefit of members in the plan. Funds in this trust Governmental Accounting Standards Board (GASB) Statement No. 54 in that the funds are legally restricted to be used for retirement costs; however, the timing for which these funds may be used is only at the discretion of City Council. 242 CC 03-01-2022 132 of 174 Attachment F Capital Projects - $10,000,000 and represents the amount of General Fund resources readily Improvement Program (CIP). The ; however, establishing a - and long-term capital budgeting and planning. Sustainability Reserve Plan (CAP), which defines strategies to reduce greenhouse gas emissions, and provides residents, businesses and schools with programs and services focused on energy efficiency, renewable energy, water conservation, alternative transportation and other sustainable actions. The City receives rebates for projects that successfully meet the eligibility requirements such as energy or water efficiency. If the rebates were not initially budgeted, they are categorized as committed fund balance in the General Fund. The purpose of this reserve is to help support future sustainability projects/programs. Unassigned $500,000 and represents 1% of the total general fund operating budget. This assignment may change from year to year based on budgeted general fund expenditures. Absorb unanticipated operating needs that arise during the fiscal year that were not anticipated during the budget process Absorb unexpected claims or litigation settlements Capital Improvement $5,000,000 and represents average dollars spent for capital projects in the last three fiscal years. This assignment may change from year to year based on actuals dollars spent on capital projects and anticipated future capital project needs. Meet future capital project needs so as to minimize future debt obligations The City shall not use fund balances/reserves in lieu of revenues to pay for ongoing expenses except as specifically provided in Ɏ 243 CC 03-01-2022 133 of 174 Attachment F The chart below summarizes reserve policy levels as described above: Funding Reserve Priority Reserve Level Escalator¹ Description GENERAL FUND 1 Economic $24,000,000 GF Budgeted For economic Uncertainty Operating downturns and Expenditures² major revenue GF Budget changes. Revenue³ 2 PERS $20,491,004 Budgeted For pension cost Citywide increases. Retirement Costs 3 Capital Projects $10,000,000 None For future capital project funding. 4 Sustainability $127,891 GF Budget For future Reserve Revenue³ sustainability projects/programs. 5 Unassigned $500,000 Budgeted GF For mid-year Operating budget Expenditures² adjustments and redeployment into the five year budget. CAPITAL PROJECTS FUNDS 6 Capital $5,000,000 None Reserves set aside Improvement for future capital projects. ______________ ¹ Rounded to the nearest hundred thousand ² Excludes Transfers Out ³ Excludes the use of reserves Changes to Committed Fund Balance All reserves listed in this policy, with the exception of the PERS restricted reserve, are classified as Committed Fund Balance under GASB Statement No. 54. Committed fund balance is comprised of amounts that can be used only for the specific purpose- 244 CC 03-01-2022 134 of 174 Attachment F making authority. Changes to committed fund balances must be approved by City Council. This policy will be reviewed annually as part of the budget process. Replenishment process Should the City need to utilize any of the committed fund balances listed in this policy, recommendation will be brought to City Council for approval and a plan to replenish the committed balance will be developed in conjunction with its use. Excess Funding of these reserves will come generally from one-time revenues, annual net income, and transfers from other reserves that exceed policy levels. They will be funded in the following priority order with any remaining funds to be placed in the Capital Reserve: 1) Economic Uncertainty 2) PERS 3) Capital Projects 3) Sustainability Reserve 4) Unassigned 245 CC 03-01-2022 135 of 174 Fiscal Policies Ï Committed, Unassigned Fund Balance, and Use of One Time Funds Policy PURPOSE Toestablishassignedandunassignedfundbalanceandonetimeusepolicies. SCOPE TheGeneralFundandCapitalFunds. POLICY Tomaintainsufficientcommittedandunassignedfundbalance(generalfundonly)ineachfund fortheabilitytomeetfollowingeconomicuncertainties: EconomicUncertainty ɋ$1924,000,000andrepresentstwomonthsofGeneralFund(GF) operatingexpendituresexcludingtransfersoutplusatwoyeardropintotalgeneralfund revenueof13%orapproximately1.5months,excludingtheuseofreserves.Transfersoutare primarilyusedtofundCapitalProjectsanddonotrepresentongoingexpenditures.This assignmentwillchangefromyeartoyearbasedonbudgetedgeneralfundexpendituresand revenues. Mitigateshorttermeconomicdownturnsandvolatilityinrevenues(2yearsorless) Sustaincityservicesintheeventofanemergency Meetrequirementsfordebtreserves Meetoperatingcashflowrequirementsasaresultofdelayinthereceiptoftaxes,grant proceedsandotheroperatingrevenues PERS ɋ$20,491,004andrepresentstheinitialinvestmentintothe"¯º¿ȟ¹PensionRate StabilizationProgram(PRSP).Asaresultofthesignificantincreaseinretirementcostsbasedon themostrecentactuarialforecast,theCityelectstoestablishandfundasecondarypensiontrust toassistinstabilizingthepotentialimpactofpensioncostvolatilityonthe"¯º¿ȟsoperating budget.Annualcontributionssubsequenttotheinitialfundingaredeterminedbycalculating thedifferencebetween"§²/$12ȟcurrentdiscountrateandamoreconservativeratedetermined bytheCity.Thisdifferenceistobetransferredtothepensiontrustandtobeusedsolelyforthe benefitofmembersintheplan.FundsinthistrustaretechnicallyȠ¸«¹º¸¯©º«ªȡunder GovernmentalAccountingStandardsBoard(GASB)StatementNo.54inthatthefundsare legallyrestrictedtobeusedforretirementcosts;however,thetimingforwhichthesefundsmay beusedisonlyatthediscretionofCityCouncil. 246 CC 03-01-2022 136 of 174 CapitalProjects$10,000,000andrepresentstheamountofGeneralFundresourcesreadily availabletofundfuturecapitalprojectsinthe"¯º¿ȟ¹CapitalImprovementProgram(CIP).The "¯º¿ȟ¹CapitalProjectsFundshasa$5,000,000reservethreshold;however,establishinga secondaryreserveinthe"¯º¿ȟ¹GeneralFundwillenablemoreefficientandaccurateshortand longtermcapitalbudgetingandplanning. 247 CC 03-01-2022 137 of 174 SustainabilityReserve ɋ"»¶«¸º¯´µȟ¹SustainabilityDivisionoverseesthe"¯º¿ȟ¹ClimateAction Plan(CAP),whichdefinesstrategiestoreducegreenhousegasemissions,andprovides residents,businessesandschoolswithprogramsandservicesfocusedonenergyefficiency, renewableenergy,waterconservation,alternativetransportationandothersustainableactions. TheCityreceivesrebatesforprojectsthatsuccessfullymeettheeligibilityrequirementssuchas energyorwaterefficiency.Iftherebateswerenotinitiallybudgeted,theyarecategorizedas committedfundbalanceintheGeneralFund.Thepurposeofthisreserveistohelpsupport futuresustainabilityprojects/programs. Unassigned ɋ$500,000andrepresents1%ofthetotalgeneralfundoperatingbudget.This assignmentmaychangefromyeartoyearbasedonbudgetedgeneralfundexpenditures. Absorbunanticipatedoperatingneedsthatariseduringthefiscalyearthatwerenot anticipatedduringthebudgetprocess Absorbunexpectedclaimsorlitigationsettlements CapitalImprovement ɋ$5,000,000andrepresentsaveragedollarsspentforcapitalprojectsin thelastthreefiscalyears.Thisassignmentmaychangefromyeartoyearbasedonactuals dollarsspentoncapitalprojectsandanticipatedfuturecapitalprojectneeds. Meetfuturecapitalprojectneedssoastominimizefuturedebtobligations TheCityshallnotusefundbalances/reservesinlieuofrevenuestopayforongoingexpenses exceptasspecificallyprovidedinthe"¯º¿ȟ¹reservepolicy. Thechartbelowsummarizesreservepolicylevelsasdescribedabove: FundingReserve PriorityReserveLevel Escalator¹Description GENERALFUND 1EconomicGFBudgetedForeconomic Uncertainty$1924,000,000Operatingdownturnsand Expenditures²majorrevenue GFBudgetchanges. Revenue³ 2PERS$20,491,004BudgetedForpensioncost Citywideincreases. Retirement Costs 3CapitalProjects$10,000,000NoneForfuturecapital projectfunding. 248 CC 03-01-2022 138 of 174 4Sustainability$127,891GFBudgetForfuture Reserve Revenue³sustainability projects/programs. 5Unassigned$500,000BudgetedGFFormidyear Operatingbudget Expenditures²adjustmentsand redeploymentinto thefiveyear budget. CAPITALPROJECTSFUNDS 6Capital$5,000,000NoneReservessetaside Improvementforfuturecapital projects. ______________ ¹Roundedtothenearesthundredthousand ²ExcludesTransfersOut ³Excludestheuseofreserves ChangestoCommittedFundBalance ɋAllreserveslistedinthispolicy,withtheexceptionof thePERSrestrictedreserve,areclassifiedasCommittedFundBalanceunderGovernment AccountingStandardsBoard(GASB)StatementNo.54.Committedfundbalanceiscomprised ofamountsthatcanbeusedonlyforthespecificpurposesdeterminedbyaformalactionofthe µ¼«¸´³«´ºȟ¹highestlevelofdecisionmakingauthority.Changestocommittedfundbalances mustbeapprovedbyCityCouncil.Thispolicywillbereviewedannuallyaspartofthebudget process. Replenishmentprocessɋ ShouldtheCityneedtoutilizeanyofthecommittedfundbalances listedinthispolicy,recommendationwillbebroughttoCityCouncilforapprovalandaplanto replenishthecommittedbalancewillbedevelopedinconjunctionwithitsuse. Excess ɋFundingofthesereserveswillcomegenerallyfromonetimerevenues,annualnet income,andtransfersfromotherreservesthatexceedpolicylevels.Theywillbefundedinthe followingpriorityorderwithanyremainingfundstobeplacedintheCapitalReserve: 1)EconomicUncertainty 2)PERS 3)CapitalProjects 3)SustainabilityReserve 249 CC 03-01-2022 139 of 174 4)Unassigned 24: CC 03-01-2022 140 of 174 CITY OF CUPERTINO Agenda Item 22-10456Agenda Date: 3/1/2022 Agenda #: 12. Subject:ProgressupdateoftheHousingElementUpdate,andreview,discuss,andapproveselection of stakeholders group Receivereportandprovidefeedbackontheprogress,reviewthestakeholdersselectionprocess,and consider approval of the stakeholders group Presenter: Ben Fu, Community Development Director CITY OF CUPERTINOPage 1 of 1Printed on 2/23/2022 powered by Legistar© 251 CC 03-01-2022 141 of 174 CITYCOUNCILSTAFFREPORT Meeting:March1,2022 Subject ProgressupdatereportfromEMCPlanningGroupregardingtheHousingElement updateprocess.DiscussionandapprovaloftheHousingElementupdateStakeholders group. RecommendedAction ReceivereportandprovidefeedbackontheprogressoftheHousingElementupdate, reviewtheStakeholdersselectionprocess,andconsiderapprovaloftheStakeholders groupmembership. Discussion Background th TheCityiscurrentlypreparingits6CycleHousingElementupdate,whichcoversthe planningperiodof2023to2031.TheHousingElementispartof"»¶«¸º¯´µȟ¹GeneralPlan andidentifiespoliciesandprogramsintendedtomeetthehousingneedsofthe"¯º¿ȟ¹ currentandfutureresidents,atalllevelsofincome.Statelawrequiresthateverycityand countyinCaliforniaadoptaHousingElementeveryeightyearstoreflecttheRegional HousingNeedsAllocation(RHNA)establishedforeachjurisdictionbytheState.The "¯º¿ȟ¹RHNAis4,588unitsforthe20232031planningperiod. Oncea°»¸¯¹ª¯©º¯µ´ȟ¹RHNAhasbeendeterminedcitiesmustdemonstratethattheyhave adequatehousingsitestoaccommodatetheirRHNA.Thereareguidelinesandspecific requirementsonsiteselection,thatensuretheCityhaspoliciesinplacetosupportthe developmentofhousingforpersonsatallincomelevels,asspecifiedbyStatelaw.The Cityispresentlyintheprocessofrefiningandfinalizingitssiteselectioninventory,which hasbeenthefocusoftwoPlanningCommissionstudysessionsonJanuary25,and February22,2022,withafollowupstudysessiononFebruary28,2022.Completingthe siteselectioninventoryisakeystepinthehousingElementupdateprocessthatwill enabletheCitytodefinethescopeoftheHousingElementupdateandassesstheupdate inaccordancewiththeCaliforniaEnvironmentalQualityAct(CEQA). 252 CC 03-01-2022 142 of 174 Analysis OnSeptember21,2021,theCityCouncilawardedaconsultantagreementtopreparethe th 6CycleHousingElementupdatetoEMCPlanningGroup(EMC).SincethattimeEMC andCitystaffhaveheldtwoCityCouncilstudysessions,onSeptember28andNovember 16,2021,focusingontheoverallHousingElementupdateprocessandStaterequirements th thathavegreatlyexpandedtheroleandextentofpublicoutreachrequiredforthe6 Cycle.Additionally,aseparateHousingCommissionstudysessionandcommunity workshopwereheldonDecember9,2021.Thesemeetingswerefollowedbythethree previouslymentionedPlanningCommissionstudysessionsinJanuaryandFebruary 2022thatfocusedonthesiteselectioninventoryprocess. AttachedtothisbriefstaffreportisamemorandumpreparedbyEMCthatdiscussesthe principalStaterequirementsoftheHousingElementupdateprocess,thecurrentstatus ofthe"¯º¿ȟ¹HousingElementupdate,andthesitesselectioninventoryguidancereceived fromthePlanningCommissionatthe"µ³³¯¹¹¯µ´ȟ¹recentstudysessions.Additionally, $,"ȟ¹memorandumprovidesanupdateontheStakeholdersGroupapplicationand selectionprocess.TheformationofaStakeholdersGroupispartofanextensiveongoing outreacheffortbyEMCtosolicitinputfromandincludeabroadspectrumofcommunity ³«³¨«¸¹ȟideasandperspectivesintotheHousingElementupdate. NextSteps $,"ȟ¹scopeofworkincludesarobustpublicengagementplan,includingpublic meetingsandstudysessions,communityworkshops,stakeholdergroupmeetings,online engagement,andtranslation/interpretationservicestobecompletedinamanner ensuringthataStatecompliantHousingElementcanbepresentedtotheCityCouncil bythe2º§º«ȟ¹January31,2023deadline. ThenextimmediatestepintheHousingElementupdateprocessisaCityCouncilwork sessionscheduledforMarch15,2022tofurtherdiscussthesitesselectionprocess. SustainabilityImpact Nosustainabilityimpacts. FiscalImpact Nofiscalimpact. Preparedby:LukeConnolly,SeniorPlanner PiuGhosh,PlanningManager Reviewedby:BenjaminFu,DirectorofCommunity DianneThompson,AssistantCityManager ChristopherJensen,CityAttorney 2 253 CC 03-01-2022 143 of 174 Approvedby:JimThroop,CityManager Attachments: SupplementalStaffReportMemobyEMC A6thCycleHousingElement4¶ª§º«Ɍ/»¨²¯©EngagementActivitiestodate BStakeholdergroupQuestions CListofRecommendedstakeholderscoresandresponsetoprimarynarrativequestion DHCDRevisionrequestletterforMontereyPark 3 254 CC 03-01-2022 144 of 174 255 CC 03-01-2022 145 of 174 o o o o 256 CC 03-01-2022 146 of 174 257 CC 03-01-2022 147 of 174 258 CC 03-01-2022 148 of 174 259 CC 03-01-2022 149 of 174 25: CC 03-01-2022 150 of 174 261 CC 03-01-2022 151 of 174 262 CC 03-01-2022 152 of 174 263 CC 03-01-2022 153 of 174 264 154 of 174 CC 03-01-2022 CC 03-01-2022 155 of 174 266 CC 03-01-2022 156 of 174 267 CC 03-01-2022 157 of 174 268 CC 03-01-2022 158 of 174 269 CC 03-01-2022 159 of 174 26: CC 03-01-2022 160 of 174 271 CC 03-01-2022 161 of 174 272 CC 03-01-2022 162 of 174 STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCYGAVIN NEWSOM, DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT DIVISION OF HOUSING POLICY DEVELOPMENT 2020 W. El Camino Avenue, Suite 500 Sacramento, CA 95833 (916)263-2911 / FAX (916) 263-7453 www.hcd.ca.gov Steven Sizemore Interim Director of Community & Economic Development City of Monterey Park 320 W Newmark Avenue Monterey Park, CA 91754 Dear Steven Sizemore: th RE: The City of Monterey Park of 6 Cycle (2021-2029) Draft Housing Element Thank you for submitting the City of Monterey Park’s (City) draft housing element received for review on October 7, 2021. Pursuant to Government Code section 65585, subdivision (b), the California Department of Housing and Community Development (HCD) is reporting the results of its review. In addition, HCD considered comments from the Public Counsel and Linda Tang pursuant to Government Code section 65585, subdivision (c). The draft element addresses many statutory requirements; however, revisions will be necessary to comply with State Housing Element Law (Article 10.6 of the Gov. Code). The enclosed Appendix describe the revisions needed to comply with State Housing Element Law. As a reminder, the City’s 6th cycle housing element was due October 15, 2021. As of today, the City has not completed the housing element process for the 6th cycle. The City’s 5th cycle housing element no longer satisfies statutory requirements. HCD encourages the City to revise the element as described above, adopt, and submit to HCD to regain housing element compliance. For your information, pursuant to Assembly Bill 1398 (Chapter 358, Statutes of 2021), if a local government fails to adopt a compliant housing element within 120 days of the statutory deadline (October 15, 2021), then any rezoning to accommodate the regional housing needs allocation (RHNA), including for lower-income households, shall be completed no later than one year from the statutory deadline. Otherwise, the local government’s housing element will no longer comply with State Housing Element Law, and HCD may revoke its finding of substantial compliance pursuant to Government Code section 65585, subdivision (i). 273 CC 03-01-2022 163 of 174 Steven Sizemore Page 2 Public participation in the development, adoption and implementation of the housing element is essential to effective housing planning. Throughout the housing element process, the City should continue to engage the community, including organizations that represent lower-income and special needs households, by making information regularly available and considering and incorporating comments where appropriate. For your information, some general plan element updates are triggered by housing element adoption. HCD reminds the Countyto consider timing provisions and welcomes the opportunity to provide assistance. For information, please see the Technical Advisories issued by the Governor’s Office of Planning and Research at: http://opr.ca.gov/docs/OPR_Appendix_C_final.pdf and http://opr.ca.gov/docs/Final_6.26.15.pdf. Several federal, state, and regional funding programs consider housing element compliance as an eligibility or ranking criteria. For example, the CalTrans Senate Bill (SB) 1 Sustainable Communities grant; the Strategic Growth Council and HCD’s Affordable Housing and Sustainable Communities programs; and HCD’s Permanent Local Housing Allocation consider housing element compliance and/or annual reporting requirements pursuant to Government Code section 65400. With a compliant housing element, the City meets housing element requirements for these and other funding sources. We are committed to assisting the City in addressing all statutory requirements of State Housing Element Law. If you have any questions or need additional technical assistance, please contact Tristan Lanza, of our staff, at tristan.lanza@hcd.ca.gov. Sincerely, Melinda Coy Housing Accountability Enclosure 274 CC 03-01-2022 164 of 174 APPENDIX CITY OF MONTEREY PARK The following changes are necessary to bring the City of Monterey Park’s (City) housing element into compliance with Article 10.6 of the Government Code. Accompanying each recommended change, we cite the supporting section of the Government Code. Housing element technical assistance information is available on HCD’s website at http://www.hcd.ca.gov/community-development/housing-element/housing-element-memos.shtml. Among other resources, the housing element section contains HCD’s latest technical assistance tool, available at http://www.hcd.ca.gov/community-development/building-blocks/index.shtml and includes the Government Code addressing State Housing Element Law and other resources. A.Review and Revision The element must provide a cumulative evaluation of the effectiveness of past goals, policies, and related actions in meeting the housing needs of special needs populations (e.g., elderly, persons with disabilities, large households, female-headed households, farmworkers, and persons experiencing homelessness). B.Housing Needs, Resources, and Constraints 1. General: The element provides data regarding various socio-economic characteristics across all components of the required analysis (e.g., segregation and integration, access to opportunity, displacement). However, the element must discuss and analyze this data for trends and patterns. Local Data and Knowledge: The element must include local data and knowledge to discuss and analyze any unique attributes about the City related to fair housing issues. The element should complement federal, state, and regional data with local data and knowledge where appropriate to capture emerging trends and issues, including utilizing knowledge from local and regional advocates and service providers. Also, the element must include other relevant factors that contribute to fair housing issues in the jurisdiction. For instance, the element can analyze historical land use and investment practices or other information and demographic trends. Outreach: While the element included some information on public engagement and outreach efforts (Appx. C, pg.6), to address outreach requirements of AB 686 (Chapter 958, Statutes of 2018), the element must describe meaningful; frequent, th The City of Monterey Park of 6 Cycle Draft Housing Element Page 1 December 6, 2021 275 CC 03-01-2022 165 of 174 and ongoing public participation with the community including key stakeholders. The element should describe any specific outreach efforts to organizations that represent special needs populations or members of protected classes. The element could also describe targeted efforts to engage specific communities that are experiencing several fair housing issues. Enforcement: While the element included a summary of fair housing complaints on a county-wide basis, the element needs to include information on fair housing complaints specific to the City and analyze those complaints for trends, patterns, and impact on protected classes. The element must also include an analysis of any findings, lawsuits, or judgements related to enforcement actions regarding fair housing. In addition, the element must discuss compliance with existing fair housing laws and regulations. For more information and guidance on this analysis, please visit pages 28-30 of the HCD’s AFFH guidance memo: Affirmatively Furthering Fair Housing (ca.gov). Racial/Ethnic Areas of Concentration of Poverty (R/ECAP): The element includes information relative to R/ECAP, but the analysis must also provide a regional comparison. In addition, the City has not fully addressed its concentrated areas of affluence. The combination of the R/ECAP and areas of affluence analyses will help guide goals and actions to address fair housing issues. The analysis should evaluate the patterns and changes over time at a local and regional level. Furthermore, the element does list one area of high poverty and segregation therefore the City should analyze this concentration and consider relevant factors such as past policies, practices, and investments as well as whether or not there is a concentration of subsidized housing units in that area. Sites Inventory: The element must include an analysis demonstrating whether sites identified to meet the regional housing needs allocation (RHNA) are distributed throughout the community in a manner that AFFH. Most of the sites identified in the inventory are concentrated in the northern part of the City. The element illustrated in Figure C-13 and C-18 that sites in the northern section of the City are areas that have higher concentrations of segregation and poverty. A full analysis should discuss this concentration and address the income categories of identified sites with respect to location, the number of sites and units by all income groups and how that effects the existing patterns for all components of the assessment of fair housing (e.g., segregation and integration, access to opportunity). The element should also discuss whether the distribution of sites improves or exacerbates conditions. If sites exacerbate conditions, the element should identify further program actions that will be taken to mitigate this (e.g., anti-displacement strategies). Contributing Factors: The element identifies many contributing factors to fair housing issues. In addition, the element should consider prioritizing these factors to better formulate policies and programs and carry out meaningful actions to AFFH. Goals, Priorities, Metrics, and Milestones: While the element provides additional analysis and identifies contributing factors to fair housing issues in the City, it does not th The City of Monterey Park of 6 Cycle Draft Housing Element Page 2 December 6, 2021 276 CC 03-01-2022 166 of 174 include sufficient action to overcome patterns of segregation and foster inclusive communities. As a result, programs must be added as appropriate to sufficiently respond to contributing factors to fair housing issues. The element must add, and revise programs based on a complete analysis and listing and prioritization of contributing factors to fair housing issues. Furthermore, the element must include metrics and milestones for evaluating progress on programs, actions, and fair housing results. For more information, please see HCD’s guidance at https://www.hcd.ca.gov/community-development/affh/index.shtml#guidance. 2. Cost-Burden: The element must quantify and analyze the total number of cost burdened households including cost burdened households by tenure. 3. Progress in Meeting the RHNA: The element indicates (page 4-4) that 229 units including 40 units affordable to lower-income households are planned, approved, or pending. The element must include additional information on the status of these units including any remaining entitlement that are needed prior to approval; and for projects approved, but not yet built, the jurisdiction must demonstrate the units are expected to be built in the planning period. The element must also include an analysis to demonstrate the affordability of the 40 units affordable to lower-income households based on actual or projected sales prices, rent levels, or other mechanisms establishing affordability in the planning period. Sites Identified in Prior Planning Periods: The sites inventory indicates that there are no sites that were included from previous planning period. However, pursuant to third party comments, there may be several sites that were included in the current sites inventory that had been utilized in past elements. The element should clarify and identify if sites were identified in prior planning periods. Realistic Capacity: While the element provides assumptions of buildout for sites included in the inventory, it must also provide support for these assumptions. For example, the element should demonstrate what specific trends, factors, and other evidence led to the assumptions. The City lists maximum density allowed in a zone multiplied by the size of the parcel. The estimate of the number of units for each site must be adjusted as necessary, based on the land use controls and site improvements, typical densities of existing or approved residential developments at a similar affordability level in that jurisdiction, and on the current or planned availability and accessibility of sufficient water, sewer, and dry utilities. th The City of Monterey Park of 6 Cycle Draft Housing Element Page 3 December 6, 2021 277 CC 03-01-2022 167 of 174 In addition, the element appears to assume residential development on sites with zoning that allow 100 percent non-residential uses. While the element mentions the identified sites represent a substantial opportunity for housing and the area is located near employment, it must still account for the likelihood of non-residential uses. The element should include analysis based on factors such as development trends, performance standards or other relevant factors. For example, the element could analyze all development activity in these nonresidential zones, how often residential development occurs and adjust residential capacity calculations, policies, and programs accordingly. Suitability of Nonvacant Sites: The element must include an analysis demonstrating the potential for redevelopment of nonvacant sites. The analysis mentioned a list of factors that were considered to determine development potential including improvement-to- land value ratio of less than one, the parcel’s existing use vs. zoned use, age of structure and underutilization. However, the analysis should describe why and how the factors demonstrate that these sites are suitable for development. In addition, the element needs to also analyze the extent that existing uses may impede additional residential development. The element can summarize past experiences converting existing uses to higher density residential development, include current market demand for the existing use, provide analysis of existing leases or contracts that would perpetuate the existing use or prevent additional residential development and include current information on development trends and market conditions in the City and relate trends to the sites identified. In addition, specific analysis and actions are necessary ifthe housing element relies upon nonvacant sites to accommodate more than 50 percent of the RHNA for lower- income households. For your information, the housing element must demonstrate existing uses are not an impediment to additional residential development and will likely discontinue in the planning period. (Gov. Code, § 65583.2, subd. (g)(2).) Absent findings (e.g., adoption resolution) based on substantial evidence, the existing uses will be presumed to impede additional residential development and will not be utilized toward demonstrating adequate sites to accommodate the RHNA. Small Sites: Sites smaller than a half-acre in size are deemed inadequate to accommodate housing for lower-income housing unless it is demonstrated that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower-income housing units as projected for the site or unless the housing element describes other evidence the site is adequate to accommodate lower income housing. While the element lists some recent development on smaller sites, it should relate these trends to identified sites. For example, almost all of the recent developments had at least 40 units, but lots to be consolidated result in projects at smaller scale. In addition, it is unclear whether the examples result in housing affordable to lower-income households. The element should relate these example projects to the site strategyfor lot consolidation, particularly as it relates to facilitating housing affordable to lower-income households. The analysis should include conditions rendering parcels suitable and readyfor consolidation. th The City of Monterey Park of 6 Cycle Draft Housing Element Page 4 December 6, 2021 278 CC 03-01-2022 168 of 174 Zoning for Lower-Income Households: The element must demonstrate densities appropriate to accommodate housing for lower-income households. The element is relying on sites within the R-3 zone which currently have a maximum density of 25 units per acre. The site inventory assumes the maximum allowable density in these zones will be 30 units per acre, but the element only states that it will “consider” increasing the density to 30. Unless the element commits to increasing the zoning to 30 units per acre, the element must contain the analysis demonstrating that 25 units per acre is appropriate for facilitating development affordable to lower-income households in the City. Please note because zoning is not already in place at the beginning of the planning period, rezoning for these sites must be consistent with Government Code, § 65583.2, subdivision (h) and (i). Sites with Zoning for a Variety of Housing Types: Emergency Shelters: The element mentions emergency shelters are permitted in the Office Professional (O-P) Zone. The element must discuss available acreage in the OP zone, including typical parcel sizes and the presence of reuse opportunities and compare that capacity to identified need for emergency shelter. In addition, the analysis should address proximity to transportation and services and any conditions inappropriate for human habitability. "In addition, the element should describe how emergency shelter parking requirements are in line with AB139/Government Code section 65583, subdivision (a)(4)(A) or include a program to comply with this requirement.” Employee Housing: Employee Housing: The element must demonstrate zoning is consistent with the Employee Housing Act (Health and Safety Code, § 17000 et seq.) or add or modify programs. Specifically, section 17021.5 requires employee housing for six or fewer employees to be treated as a single-family structure and permitted in the same manner as other dwellings of the same type in the same zone. 4. th The City of Monterey Park of 6 Cycle Draft Housing Element Page 5 December 6, 2021 279 CC 03-01-2022 169 of 174 Development Standards: The element must identify and analyze all relevant land use controls impacts as potential constraints on a variety of housing types. The analysis should analyze land use controls independently and cumulatively with other land use controls. Specifically, the element must analyze floor area ratio requirements and describe the requirements for the mixed-use projects including any requirements for commercial uses or if 100 percent residential is allowed. Housing Overlay Zone: The element relies on sites Housing Overlay Zones that was adopted through the 2020 General Plan update. While some information was provided on how the overlay allows residential the element must include a complete description and analysis of the Overlay, including whether further zoning must be adopted to implement the overlay zones and the permitting procedure for access to the overlay. The element should also detail any affordability requirements, whether 100 percent residential uses are allowed, development standards, and what incentives or concessions for utilization. Parking Standards: The element must analyze studio and one bedroom parking requirementand requirement for enclose parking for its impact as a potential constraint on housing including project cost. The analysis should examine whether parking standards impede a developer’s ability to achieve maximum densities, and if there are provisions in place to provide parking reductions where less need is demonstrated, particularly for persons with disabilities, the elderly, affordable housing, and infill and transit-oriented development. Development Fees: The element has identified planning fees; however, the element must describe all required fees including impact and building fees. For example, the analysis could identify the total amount of fees and their proportion to the development costs for both single family and multifamily housing. Zoning and Fee Transparency: The element must clarify its compliance with new transparency requirements for posting all zoning and development standards for each parcel on the jurisdiction’s website pursuant to Government Code section 65940.1(a)(1). Local Ordinances: The element must specifically analyze locally adopted ordinances such as inclusionary ordinances or short-term rental ordinances that directly impact the cost and supply or residential development. The analysis should demonstrate local efforts to remove governmental constraints that hinder the locality from meeting its share of the regional housing need and from meeting the need for housing for persons with disabilities, supportive housing, transitional housing, and emergency shelters. Constraints on Housing for Persons with Disabilities: The element briefly describes its reasonable accommodation procedures including that a reasonable accommodation must be in general conformance with the City’s development and municipal codes and comply with the California Environmental Quality Act. However, the purpose of the reasonable accommodation is to provide exception to zoning and land use. As a result, the element must include a program to address this constraint. In addition, group homes for seven or more persons appears to be excluded from several zones allowing th The City of Monterey Park of 6 Cycle Draft Housing Element Page 6 December 6, 2021 27: CC 03-01-2022 170 of 174 residential uses and subject to a conditional use permit (CUP). The element should evaluate these requirements as constraints and include programs as appropriate. 5. Approval Time and Requests Lesser Density: The element must be revised to analyze requests to develop housing at densities below those anticipated in the sites inventory, including hinderance on the construction of the City’s share of the regional housing need and include programs as appropriate. 6. While the element identifies 441 assisted units, the element lists three properties that are at-risk of expiring within the next ten years for a total of 251 units. The element must identify local public agencies, public or private nonprofit corporations, and for- profit organizations with the legal and managerial capacity to acquire and manage at- risk projects pursuant to Government Code Section 65583, subdivision (a)(8)(C)). In addition, the element must list potential federal, state, and local funding sources that can be used to preserve the units. While the element analyzes the cost of replacement for units designated high risk, the element must analyze replacement costs for all units with expiring restrictions in the next ten years. Furthermore, the analysis should contain the following: Estimate the costs of producing new rental housing (comparable in size and rent levels to existing at-risk units) to replace units converting from affordable to market rate. The analysis should consider current land costs and either current construction costs (square footage rates for multifamily development) or the actual cost of recently completed units. Estimate the cost of preserving the identified assisted housing developments including acquisition and rehabilitation costs long-term affordability controls and project-based rent subsidies. th The City of Monterey Park of 6 Cycle Draft Housing Element Page 7 December 6, 2021 281 CC 03-01-2022 171 of 174 A project-by-project replacement/preservation cost estimate is not required (Government Code Section 65583(a)(8)(B)). The element can make an assessment of the appropriate strategy (replace vs. preserve) based on sample cost estimates. C.Housing Programs 1. To address the program requirements of Government Code section 65583, subdivision (c)(1-6), and to facilitate implementation, programs should include: (1) a description of the City’s specific role in implementation; (2) definitive implementation timelines; (3) objectives, quantified where appropriate; and (4) identification of responsible agencies and officials.Programs to be revised include the following: General: The element must provide discrete timing for all programs (e.g., month, year) to account for how often the action will occur as well as to ensure a beneficial impact throughout the planning period and quantify objectives where feasible. In addition,all programs should be evaluated to ensure meaningful and specific actions and objectives. Programs containing unclear language (e.g., “Evaluate”; “Consider”; “Encourage”; etc.) should be amended to include more specific and measurable actions. Program 1 (Residential Rehabilitation Program): The program must be revised to include a timeframe for implementation. Program 4 (Housing for Special Needs Population): The program must be revised to specify the incentives for developers and clarify what actions will “nurture partnerships” to educate and execute the development of supportive and transitional housing. Program 5 (Flexibility in Development Standards): The program must be revised to specify a timeline for implementing the actions of the program. Program 6 (Monterey Park Municipal Code): The program must be revised to remove the “if required” language from its objectives and actions. Program 9 (Sites Used in Previous Planning periods Housing Elements): The element must be revised to remove the “consider” language from its objective for rezoning or amending the MPMC. Program 10 (Mixed-Use Sites): The program must be revised to include the timing for each of its objectives. th The City of Monterey Park of 6 Cycle Draft Housing Element Page 8 December 6, 2021 282 CC 03-01-2022 172 of 174 Program 14 (Affordable Housing Development Incentives): The program must specify the actions that the city will take to “actively promote” housing development and to include timeframes with listed actions. 2. Gov. Code, § As noted in Finding B.3, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types. In addition, the element should be revised as follows: Program 7 (Ensure Adequate Sites to Accommodate Regional Fair Share of Housing Growth): The program must be revised to clarify with specific actions and language how the city will “promote residential density” and list the measures that will be adopted to encourage affordability by design with timing. Also, if the element is relying on the R-3 zone and the City will need rezoning to allow up to 30 units per acre then the element will need a rezoning program for these sites that meet 65583.2(h) and (i). Lot Consolidation: As the element relies on consolidated small sites to accommodate the RHNA for lower-income households, it should include a program(s) to facilitate lot consolidation and development of housing on small sites. For example, the program could commit to (1) granting density bonuses above state density bonus law (Gov. Code, § 65915.); (2) deferring fees specifically for consolidation; (3) expediting permit processing; (4) identifying and targeting specific financial resources; and (5) modifying development standards. 3. As noted in Finding(s) B.4.and B.5, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results th The City of Monterey Park of 6 Cycle Draft Housing Element Page 9 December 6, 2021 283 CC 03-01-2022 173 of 174 of that analysis, the City may need to revise or add programs and address and remove or mitigate any identified constraints. Specifically, the element recognizes that minimum lot size, high standards, and other standards in the MU-1 and MU-II zones are a constraint to achieving densities. However, the element lacks specific program commitments to mitigate or remove these constraints. The element could amend Program 6 (Monterey Park Municipal Code) to expressly state how that these standards will be modified or removed. This is especially critical because there are many sites identified in the inventory that do not meet minimum size requirements and would require lot consolidation to be developed. 4. As noted in Finding B1, the element must include a complete assessment of fair housing. Based on the outcomes of that analysis, the element must add or modify programs. While the element include Program 19 (Fair Housing Program) goals and actions must create meaningful impact to overcome contributing factors to fair housing issues and actions must have specific metrics and milestones. For example, Table 6-1 states the city will “incentives the development of more housing to accommodate the varied needs of different populations,” but does not describe how this action will be implemented. The program and its actions must each be concrete in affirmatively furthering fair housing (AFFH). In addition, currently the element only addresses AFFH in Program 19. The element could revise other program actions to address the City’s obligation to AFFH including how programs address housing mobility enhancement, new housing choices and affordability in high opportunity areas, place-based strategies for community preservation and revitalization and displacement protection. 5. The element includes Program 2 (Conserve At-Risk Housing) and specifies actions to monitor at-risk units. However,the element must include contacting property owners within at least one year of the affordability expiration dates on projects. Also, the program should be modified to include noticing requirements within three years and six th The City of Monterey Park of 6 Cycle Draft Housing Element Page 10 December 6, 2021 284 CC 03-01-2022 174 of 174 months of the affordability expiration dates, in addition to coordinating with qualified entities such as non-profit organizations and establish specific time parameters around such actions. In addition, the element should be revised to adhere to current State Preservation Notice Law (Gov. Code 65863.10, 65863.11, 65863.13) which requires owners to provide tenants and affected public entities (including the City) notices regarding expiring rental restrictions starting three years before expiration. D.Quantified Objectives The element must include quantified objectives to establish an estimate of housing units by income category that can be conserved over the planning period. E. Public Participation While the City made effort to include the public through workshops and surveys, moving forward, the City should employ additional methods for public outreach efforts, particularly including lower-income and special needs households and neighborhoods with higher concentrations of lower-income and special needs households. For example, the City could conduct targeted stakeholder interviews or establish a committee representative of lower- income and special needs households in future public outreach efforts. HCD also received comments with many meaningful suggestions and other issues related to zoning and AFFH. HCD encourages the City to consider these comments which will be provided under a separate cover. In addition, HCD understands the City made the element available to the public concurrent with its submittal to HCD. By not providing an opportunity for the public to review and comment on a draft of the element in advance of submission, the City has not yet complied with statutory mandates to make a diligent effort to encourage the public participation in the development of the element and it reduces HCD’s ability to consider public comments in its review. The availability of the document to the public and opportunity for public comment prior to submittal to HCD is essential to the public process and HCD’s review. The City must proactively make future revisions available to the public, including any commenters, prior to submitting any revisions to HCD and diligently consider and address comments, including making revisions to the document where appropriate. HCD’s future review will consider the extent to which the revised element documents how the City solicited, considered, and addressed public comments in the element. The City’s consideration of public comments must not be limited by HCD’s findings in this review letter. th The City of Monterey Park of 6 Cycle Draft Housing Element Page 11 December 6, 2021 285