following the order at date 33.

Um case through call committee room here and then committee member yes oh yes right all right welcome to the council finance committee wednesday january 21st 2026 this meeting was called for order already this is a hybrid meeting allowing the public to comment in person and virtually and instructions for addressing the committee virtually can be on the agenda.

We already did roll call so now we'll do move on to item three approved minutes would any member of the public joining us virtually or in person like to provide comment on this item if so please put the raise hand in zoom and he should raise their hand to be called on we will take in person speakers first each speaker will have three minutes we will now take virtual speakers um thank you i will now bring the item back to committee deliberation and action is there a motion and a second to approve the CFC minutes of January 21st 2026 I'll check at that all in favor all opposed abstentions motion passes we'll now move on to item four oral communication from the public.

If so please click the raise hand button in Zoom in-person attendees should raise their hand to be called on we will take in-person speakers first each speaker will have three minutes we will now take virtual speakers and no virtues all right that includes that concludes our um oral communications from the public we will now move on to item five perfect timing 5.1 proposed changes to the council policy D-13 mountain view employee home buyer and relocation assistance program the finance and administration administrative services director Derek Ramponi will present this item all right good morning uh good morning Chair Reynolds and uh committee members uh clark and remember your finance and administrative services director the item you have in front of you this morning is the proposed updates to council policy D13 the Mountain View Employee Home Buyer and Relocation Assistance program uh a little bit of background on this item um during the development of administrative guidelines for the home buyer loan program um it was noted that uh several updates to the policy uh were recommended by staff and as we went through kind of the guidelines we wanted to clarify and update and basically kind of revamp the policy just to make it to provide some clarity and also some added features we had received some initial feedback from employees general employees about uh loan program was a great idea however it didn't seem to be totally helpful as far as helping them get their bit of home and city of mouth and view so we kind of took a fresh look at this policy and uh are proposing a fair amount of updates in addition to the kind of clarification and providing some clear uh a policy all together um as you'll note in the staff report or memo um we have outlined the kind of the major updates that we have for this item um starting with clarifying the available assistance they're broken down basically into three eligibility categories we added a definition section to provide some additional clarity we established uh kind of a participation window following hiring date thought that that was comparable to some other uh agencies that have similar home buyer programs which there are that many um so with hiring um within three years of their higher date they're eligible for the program.

We expanded and kind of modernized uh the some of the provisions including um being able to transfer uh a loan instead of a time uh formal refinance program decided that we would like to propose kind of a transferring of a loan to another property within the city um the clarified some property types and I would go ahead just basically trying to clean up the the uh policy another item that we we um updated was like clarifying of some relocation assistance provisions and then we provided some administrative and operational update in preparation for the uh administrative guidelines that will be uh preparing in regards to this policy um so with that happy to take questions i know there was some QA path uh for the meeting around this item all right if any member of the committee have any questions I have one quick uh clarifying um yeah I don't know never purchased a home so the median home price at 23 million was sparking is a little high um is that that includes all types of ownership housing single family detached single family attached and condominium is that right correct thank you questions all right we will now move on to public comment would any member of the public joining us virtually or in person like to provide comments on this item if so please click the rate zoom in person attendees should raise their hands be called on we will do in-person speakers first each speaker will have three minutes we will now take virtual speakers and no right thank you I will now bring the item back for committee deliberation and action is there a motion and a second to recommend the city council adopt revisions to the council policy D-13 Mountie employee home buyer and relocation assistance programs all right um we're gonna suggest changes one okay yeah but uh thank you uh first up uh really appreciate staff uh putting together uh the recommended changes uh and for responding to the questions I submitted in advance uh were very helpful uh the one change I would like to suggest um is uh that for council appointees the council continue to approve um the uh home buyer loan um the relocation assistance program would be flexible um I do think that more likely not to come up during uh negotiations during hiring appointment process um but I think at the end of the day council if it stops with the council um take it from from a public community perspective I think it's important for the the council to be able to uh uh participate in and be held accountable for um any benefits or uh opportunities that we could we provide for for our appointees so I don't know staff had some suggestions or ways of approaching that but I would you guys think from a staff perspective appointees work at the beh to the council and so you know here in the comment that would make sense to that would fall underview um so I'd probably ask that rather than trying to do it on flight right now to delegate the staff where you got in to the policy but the point is clear probably under eligibility uh but the the point is clear you still want counselor to approved loans for the appointments but and that would make sense because it would probably occur as part of your negotiation process anyway or part of your evaluation process so we can we can work that I I appreciate that and I'm inclined to agree more often than not that.

That's probably where that discussion would occur.

And I'm uncomfortable with staff's recommendations for adding some of that um the other thing I was curious about, I don't feel very strongly, but um just because in our zoning ordinance we do make a technical distinction between row houses and townhouses um I don't know if it's meaningful, but it it's it's kind of seems to me like we're saying when we're taking a typology off the table.

I don't think we intend to do that.

But that's the other clarification.

I would you know, appreciate the staff's suggestions.

I think we can just add that term back to policy.

Any other comments?

Mr.

No, and I'm hoping to incorporate that in the way, but I'll move the recommendation question.

I'll second the motion.

All right, all in favor, say a new any abstentions, motion carries.

One to five point two.

Proposed changes to council policies A-11 financial and budgetary policies.

I have an administrative services director director.

I have a minute, and efficient service directory rates again for presenting items.

All right, thank you very much.

Replacing the financial services director, kind of walking through this item.

But before she does, I just wanted to mention that this item is very similar to 5.1 as far as updating the policy more from an operational standpoint.

We are proposing these recommendations and also to become a compliance with some recently uh enacted governmental accounting standards board statement.

And so with that, I'll take it off or I'll hand it over to Grace.

Good morning, everyone.

Um, so um let me start with um policy A11 is the city's financial and budgetary policy.

Um, so we view this policy periodically to make sure we are in compliance with city um compliance accounting rules and also um agree with our operations.

So um staff, we view this policy um and proposing a few changes um for the key areas.

So the first area um we are proposing changes in section 4.f, which is general fund open space reserve, as you recall council uh voter approve um real property transfer measure GTA in November 2024, and council provide direction on how that tax revenue should be spent on.

Um, so we are cleaning up the language in this section to align with what the council's direction is for how we spend on measure G allocation.

The second um the second area that we're proposing for changes is section 4.j, which is we serve requirement for compensated absence fund.

Compensate absence is the internal service fund that we establish to keep track of our vacation sick leave um payout for the staff.

Um and in last year we implemented Gas V 101, which um gasly expand the definition of what did compensate absence, including leave payout.

So um currently the funding um policy is to fund this at 80% of the liability we approve for this fund.

Giving this expansion of the definition, that thing that we should separate out the funding requirement with the with how this fund should be established for the um liability balance.

So therefore we are proposing to revise this policy um to establish the funding strategy instead of 80% at the compensated absence liability, we're using as average past five years' average spending.

So that aligns much more um realistically on how much cash we need for this one.

Um the third area that we are proposing changes is for 4.4, which is the new reserve that council directs staff to in create in last fiscal in 2324 budget development to establish a CIP reserve in the shoreline regional park community fund.

So this is just a clean of the language to formalize um this we serve in this area.

The fourth item that we are asking for proposal changes is section 5.

Which is capital improvement policy.

We want to provide a little bit more guidelines and clear direction to staff how to manage the week current annual and bio-annual CIP funding.

So we can be this the recurrent CIP can spend it on a specific purpose, and it will find guidelines, guidelines on timeline on when those unspent balance can be print back to the fund balance so we can re direct those funds to other CIP projects.

So the last item we're proposing changes is the cost allocation plan, which is section 7.H.

So this is one of the reasons driving this changes is we receive a GFO budget of work review um comment ask CT to clarify the um the cost allocation plan um process and also we want to provide the guy um guidelines on what annual increase um of overhead um administrative overhead costs that we can use um so with that that's all the changes we are proposing um for this policy and once the committee provide recommendation we will incorporate the changes and then provide it to council um for conservation in June 2026 thank you thank you um any member of the committee have any questions all right we will now move on to public comment with any member of the public joining a virtually or in person like to provide a comment on the still please click the raise hand button in zoom in person attendees should raise their hands be called on we will take in person speakers first each speaker will have three minutes all right we will now take virtual speakers and no rituals thank you i will now bring the item back from council committee deliberation and action are there any comments thank you chair again we appreciate the rest of the provisions always good they proper quality and dusted money that is to apply a state law so support all the changes I also appreciate responses to the other questions I said um I wanted to propose um three changes two of which I think are clean up and another policy change the cleanup items would be to include um in addition to the staff recommendations um the uh preliminary budget um review that we've incorporated into our process recently I think it's been well received by everyone the council has an opportunity to provide direction to the leader of staff make some changes to the budget which is great because that means that has more time to you know think through it and bring back some changes to the public get a sense of what um that has prepared for uh the the coming fiscal year um so uh I think um including that there's there's in the section regarding the budget probably existing procedural steps and we I think what one of the steps that we have even the other one is um section four on the equipment replacement reserve um suggested change would be to update it to the uh target 25% that staffer needs to I think it was this was in April this year uh based on uh some principal D recommendations I think so again I think um the policy with the practice and then the policy change would be for section four reserve uh policies um and the general fund open space reserve I didn't know this but um there's uh provision that says um excess city of revenue generated from excess city owned properties would um would go into the open space reserve which I think is a good idea but now that that open space reserve has dedicated funding from measure g I'm wondering if um committee would support um instead having either giving staff a chance to come back with recommendations, or what I was thinking is the revenue from uh excess city properties could go into the SPAR, which doesn't have a dedicated source of revenue.

Very valuable reserve for the council teaching property acquisition.

So those are the three changes.

Um interested in staff's thoughts and then the response to your first question.

And actually, I'll say I have to look at which policy it's in.

But if you all remember years and years ago, there used to be what was called a narrative budget, which is essentially similar to what we're doing now, but we're we're kind of preparing it in a I think more uh transparent way for council to understand and the public what's going on so we can maybe find where it references the narrative budget too and just change it to how we're what we're calling it now and also add it into this policy.

Um third point the proceeds from access to the property.

I saw the city manager nodding her ad.

That does seem to make sense now that there is a dedicated revenue source.

Then I'll defer to Derek and Grace on the 25% for the uh item 4K.

Yeah, makes sense that we could add it to that research policy or to that section of the uh ERF.

Thank you.

Three for three.

Okay, yeah, I'm happy to support your and um yeah, I guess we are um is there a motion and a second recommending that the city counselor dot revision technical policy-11 financial and budgetary policy.

So staff recommendations.

Yes, all right.

All in Davis say hi.

All of those, any abstentions, motion passes, yay.

All right.

Now to the ramp finale.

Item 5.3, um park plan, next to study.

Community service director, John Marchant will start the presentation of this tape.

Morning committee members.

Once again, John Marshall Communities Services Director, going by a plethora of department heads to support this item along with uh Tafion Rice Evans from economic planning systems, also known as EPS.

We were here in January to for the first time to bring forward um the introduction of utilizing uh mitigation fee act as well as uh confirming with the committee that there's an interesting continuing use, maybe act.

Um, and there was also a dialogue from the committee about looking at some alternate ways to look at the fee um compared to what we were proposing, which was uh by land use type and number of bedrooms for a number of reasons, and then since then we have done a number a number of we've taken a number of steps to identify how we can further clarify as well as look at some of the local court cases that have taken place and make sure that we are um trying to stay consistent with what the um those are um to date.

And so with that, I'm gonna turn it over to Pafion to um take us through a presentation and then I'll wrap up at the very end.

Thank you.

Good morning, Chair Committee members.

Um yeah, so as Joan mentioned, we have a uh relatively brief presentation here today.

I'm gonna do a quick recap on the last meeting in January, kind of digging some of the details of how we um have looked at and kind of offering up per square foot fee approach to impact piece and then get your correction.

Um so in the in the January meeting.

Uh, we presented to you uh kind of review of what the existing fee structure was for cost fees, um, and then also came forward with uh a kind of a concept and a framework with technical analysis to back it up that laid out some potential maximum um fee levels and related related matters.

One of the key one component of that presentation was the way in which the fees are charged.

And so the different approaches that different cities have taken in terms of how it's done.

But what we showed you last time was an approach that was mirrored the way in which the city can only do so many, many of us in their fees where you have kind of per unit fees, but you also have uh fees per bedroom.

Um I think that that kind of blended approach led to some questions.

And so I think the committee here can specifically raise some questions about fee balance equity and proportionality and a lack of consideration for unit size.

We wanted to make sure that we address those.

Next slide, please.

So the direction we took away was to look at an approach that focused more on per square foot fee um application and then return to that, return to you with that today.

Um there are several uh you know, uh generally acknowledged benefits of a per square foot approach.

Um, one relates to the kind of language in AB 602 that has a preference for that approach, and so uh there's a certain kind of legal um benefit, arguably that to using a per square fee of the approach.

Uh, it also provide having a per square foot fee approach rather than mixing and matching per unit per bedroom.

We have a kind of a nice consistency between um different unit types.

Um, also avoids possibilities of when we do it on a bedroom basis, there may be some incentives or disincentives created to build different kinds of units with different numbers of bedrooms.

So it kind of gets away from that, that approach.

Uh next slide, please.

Um, so just um going back to the kind of the underlying basis of the fee program just briefly, three acres per thousand residents is the is the city standard.

That's what really drives this whole uh fee program.

That is then coupled with um some important cost assumptions that um allow us to understand what is the maximum fee of pivot we would be allowed to charge to a new resident um in the city.

Uh you can see here that it's a 10.8 million dollars per acre is the all-in cost for an acre of land and an acre of improvement together.

Um, and that then translates into using the three acres per thousand, translates into a $32,400 per resident, which then drives kind of all everything you'll see beyond this is driven by that number combined with population density.

Uh, we did make one change the committee, I think pointed out last time that we have an array of um capital improvement costs and estimates.

Um, there was some concern that some of those improvement cost estimates might be kind of unusual outliers.

We remove those.

Um, and so there has been a bit of a reduction in the overall fee level.

It was 3.4 million dollars per acre when we last brought it to you when we remove those two outlier parts that now numbers can now come down to three acres, sorry, three million dollars per acre.

So it's a little bit of a reduction uh in the fee numbers we're gonna be showing you here today.

Uh next slide, please.

Um, so then to kind of go through the process of basically estimating these maximum fees, um, the way you know the way the way it's it typically is done, the way it's historically been done, ending at this point that we're now changing that is to just calculate your per unit fee based on your cost per person and then the estimates of persons per unit.

Uh, these persons per unit are obviously important drivers of the fee levels, as you can see, um, and those are out of the US census uh data for the city of Mountain View.

As you can see here, as we might expect, there are more persons per household in a single family detached unit than there are an attached unit, fewer in your typical multifamily unit.

So when we put all of that together, we end up with maximum per unit fees that vary from fifty-four thousand dollars uh per unit on average for a multi-family fee up to about 89 million, 89,000, sorry, $89,000 uh dollars per unit for a single family detached fee.

Um, again, normally in in years past, that would have been the end of the kind of conversation you would end at that at that point.

But now we have new legislation and policy desire to have more variation by size.

Next slide, please.

Uh so here in the next slide, you can see the conversion from the average per unit fee into the average per square foot fee.

Um, and again, this is based on data from the city of Mountain View, where we take the average size of those units that you can see 775 square fee for multifamily, up to 2500 square feet for single family attached units, do some math, we end up with a set of per square fee calculations.

So we have, as you can see, about 30 35 dollars per square foot for single family detached, up to 69 per square foot for multifamily.

And one of the things that we want to kind of talk about a little bit is you can you can see that that this kind of combination of per unit fee and size creates a um a bit of a juxtaposition in terms of the fee amounts per unit are higher on the larger and the single family detached units, but the per square foot fee ends up being actually higher on the kind of flips on the multifamily units, even though the overall fee level is higher on the single family fees.

Next slide, please.

Excuse me.

So here we wanted just to kind of explain a little bit more why the per square foot fee tends to be higher on multifamily than it is on single family.

It's all basically based on the number of folks, the I guess the density or intensity of population living in each of these units.

So when we in order to kind of basically try to come up with comparison, we said we wanted to normalize the numbers and ask, you know, what on average when we look at these kinds of units, what is the average number of people in a thousand square foot space in order to basically kind of in order to explain the underlying dynamics of why you have a higher per square foot fee for multi-family theory for single family.

As you can see here, when we combine the data for Mountain View, on average, we have about two persons per thousand square feet living in a multifamily unit versus about 1.1 persons per thousand square feet living in a single family detached unit.

I don't think that's necessarily surprising in terms of the way you know the size of the what we know about the population densities, but we wanted to dig in on that a little bit just to kind of explain why we get that differential between the per square foot uh fees.

Next slide, please.

So when we put it together, um, you know, obviously, when you when if you adopt a per square foot fee, um every every development will come in with a slight different square footage size, so every development will have a slightly different um kind of average per unit fee.

We wanted just to kind of illustrate how that might work.

Dynamics of that might work with the real world.

So here you can see um both per square foot fee, the maximum per square foot fee at the top 35 to 69 dollars per square foot.

You can see the average unit fee that's specifically tied to those average unit sizes, so 2500 for the single family detached, 1850 for the single family attached, and 775 for the multifamily.

Um, here we just provide some illustrations of how that fee would go up and down within those unit categories as sizes vary.

So you can see here, as I think the legislation intended, that if you built a 2,000 square foot single family home, you would get you would pay a lower, you'd pay the $71,000 would be your per unit bill versus the 88,000.

Um, similarly for single family detached multi-family units get smaller, uh, the amount of fee burden would go down on the flip side as your fees fees get larger on a per square foot fee you pay, you would pay a higher level of overall fee.

Uh next slide, please.

So uh putting this into you know context, this is I think it's this, I think the city attorneys explained or will explain, right?

This is a uh first step where we're looking to calculate the maximum the maximum fee under Nexus requirements.

Uh this is not, of course, necessarily what what is what you're going to adopt.

This is just kind of setting setting a kind of a bar and a structure for us, but still worth kind of making a comparison between where those maximum fees have landed so far and both the existing fee level.

Um, so the bars here on the left-hand side, you can see the dot where that's your existing fee level uh for these three different on average for these three different categories.

Um you can see we we've also showing the the kind of housing element policy goal of 20% off that as the orange bar.

And then on the right you can see where these technically derived maximum numbers um end up relative to those numbers.

And so what you what stands out you know quite clearly here is that this again this is on an average unit.

It'll vary by depending on unit and square footage an average unit we have the multifamily going down to about the level about the 20% going down by about 21%.

So it kind of comes down to about that that 20% below farm level.

You can see the single family numbers are moving kind of the opposite direction they're going up relative to our current maximum creating a greater gram between the orange and the five on the right next slide please.

Finally we just wanted to to uh kind of you know show the uh I think one of the one of the asks was to consider what a fee would look like we would also include it on residential uh development um here you can see the fee on the left hand side you can see the fees that we presented and calculated um initially back in January um on the right hand side you can see just the small reduction and this is just driven by that reduction in the cost per acre part improvement so uh the numbers on the right hand side are kind of the new recalculated potential maximum fees for non-residential and I think with that next slide please thank you Tafian once again um in included in the QA there was a question about um the need for an accompanying capital improvement program document we are working on that and as Tafian also mentioned what we're looking at today is the maximum fee calculation and as we go through and look at the different projects and capital improvements that we're looking to make over time we have to look at what is realistic as far as how much can we do compared to maybe what we could be charging for as part of the the maximum here.

So there's as we go through that process we actually think these these maximum fees just from going through the capital improvement program will actually continue to see further um de-escalation of off of the maximum um based on that and so just want to put that into context so for input and direction uh we're asking if the committee supports the staff recommendation to establish what the the Queen Bee Act and mitigation fee act based on um the calculations we were showing today and does the committee support the recommendation to apply the updated park and recreation impact fee to non-residential development which you had shown support for before just wanted to show you the the new calculations and can continue that um confirmation and then looking for any additional input you have um for us to move forward and last slide so we are yeah no you can go back to the previous one no there you go um so we as staff um depending on the outcome of the recommendation from the committee this morning um we are prepared to to bring this as a new business item to uh the city council um we're looking at september um at the moment prepared to do that but if there's more work to do or other items that um the committee would like to provide uh we're open to questions comments and forward input thank you all right does any member of the committee have any questions member Ramirez I think you have we don't have any okay I I have a few um thank you for the the presentation um and the work on this um let's actually start with the slide that was after the blank slide.

Because that did uh I submitted several questions in advance, and uh staff uh appropriately identify questions that were inelegantly expressed.

And I think that that slide um addresses one of those questions and that's um we were to right now we have sort of like positive average square footage for a multifamily unit, right?

That's um, you know, all of the unit types, right?

Studios through three bedrooms, and I was curious about that breakdown based on bedroom.

That's what this is, right?

And staff walk through this analysis of why you're using that composite number instead of this number.

Yeah, sure.

So I mean, I guess what I first of all say is that the um the there were I think the there's lead weight for the council of the collective to to make certain choices, right?

Both about per square foot versus per bedroom, also about how detailed you want to become that you want to be.

So we we ran this analysis.

We we as you can see it's it's kind of the math is the same, right?

It persons per unit drives everything.

So if we can if we can come up with and census allows us to do this, we were able to get this information.

Um, and as you as you point out right now, we have a kind of multi-family composite, what we were showing you about sixty-six dollars per square foot, right?

When you look at the when you look at the data we receive, um, we get variation from $85 per square foot for studio down to 62 for one bedroom and then up to 69 for two bedroom.

And so I think there's a there's there's a couple of for me choices that come in here.

One is um is this level of detail kind of useful and important.

I think we could justify either way.

Um, I don't see a lot of cities going to this local detail, but so be possible and it's more detailed.

Um, we were a little bit just the as you I guess as you get into these smaller categories, the you know, the sample size to data is a little less, it's you get a little bit more you get some results you're necessarily expecting, like not fully instinctively explain why those variations are as they are.

And so I think we were feeling that it would be uh kind of maybe cleaner and clearer to have, you know, to use the composite one, um, but I think that's that's an open discussion from my perspective.

And I'll just add to that, we we really spun our wheels on this for quite some time.

I think over multiple meetings, and we tried to wrap our head around why the data would come out this way, right?

Where you have this multifamily studio so high in comparison to these, you know, larger um unit types in a multifamily um development.

And you know, we we talked about how when data comes in, you know, you can have definitely have more people in a smaller unit than you would normally think would be in a smaller unit.

You can have way less people in a larger unit than you would think would would be in that larger unit, and really what we came to is when we when we landed on the average, we understood that there is always going to be a disparity in the number of people and units, and you're never going to, there's there's no possible way to exactly pinpoint is a studio really just one person, maybe max two people, or is that just a family that just has to put in that baby for a while, and you've got actually got three people in there, and then you've also got families as their financial, you know, their economic situation changes and increases.

They can move out of that small studio, and now you've got a house where is way bigger than what they need with the anticipation that they may or may not grow into that home.

And so with those types of disparities, and you get these kind of results, these kinds of numbers, we thought that it better serve the community to average it all and come to this this middle where you're at this 775 average square foot, and you're around the sixty-six dollars, right, for the pair per square foot fee, and you're balancing out that outlier at $85 dollars and you're and you're kind of smoothing that column.

But like Tefian said, we can be more detailed and be more granular at this, but as you can see, it may have results that the council is not that it doesn't further the council's policy goal, right?

Because it's really hitting studios in a way that we didn't anticipate.

And this is driven by census data, data that we can't really manipulate.

It's like it would be sort of arbitrary for us to go, oh, well, let's just slice that number and make it lower, because what's behind this information is just pure census data that we've gathered or that Typhon has gathered to generate these numbers.

It's not intuitive.

No.

Uh I really struggled with the math behind this report.

So I appreciate you helping um explain some of the nuances and complexities behind that.

Um you alluded to this earlier in the presentation.

The other thing that I'm struggling with is understanding uh where we there's a difference between like a discretionary policy uh uh fee adjustment or reduction, right, to achieve a policy goal and fee reductions or uh adjustments that are legally obligated, right, to meet the nexus and proportionality tests.

And what I don't really have a full appreciation for is what we have to solve for here, and what would the the work that would come after we've provided direction on the uh the nexus study.

So can you help maybe me understand?

Like, so there are this doesn't solve all of the legal requirements, there's more work to meet the legal obligations, correct?

So John um definitely alluded to that at the end.

I would say what we're trying to do today is get to what I would describe as a stable base.

A stable base being all of our input data is something that you understand and that you support, right?

You understand that we're pulling census data, we're we're getting all of these numbers and we're coming to this calculation.

And if you support the, you know, square foot versus the unit count uh unit size um calculation and sort and and once we get to this stable base, we know what numbers we're using going in, we know that we're we're using square footage or not, and we know whether or not we're digging down into multifamily by you know bedroom size or we're doing using an average, we get to this stable base, and I would say that that puts us probably about 85% of the way there.

I think there's 15% more work that we have to do on the back end.

We need to figure out, I feel like there's this overlay that's going to come on top of that related to proportionality.

We started a conversation about um current our current fee, our current Quimby Act fee is based on planning areas, right?

Um, we are looking towards probably going um looking at a citywide need of uh three acres per thousand need, right?

Quimby Act has um specific legal requirements that you're spending the money in a specific radius, absent particular findings, mitigation fee act doesn't have those types of limitations, and so one of the things we're going to have to talk about is um how you layer proportionality on top of this base fee based on need, right?

If you're in an area that has a ton of parks and the development that's going up isn't going to really impact it because that that particular area has so many parks that you can add easily a hundred more people to that community without impacting the demand on the parks in that area versus an area where it has one park and adding a hundred people just exacerbates an already very bad problem.

Mitigation fee act fees give um an ability to address that on a citywide basis, whereas Quimby Act doesn't.

And so that is sort of the behind the scenes work that we still have to do.

And that I think is something we're gonna have to do legally to come into compliance with proportionality requirements, as opposed to there may still be other policy um decisions that council makes with regard to incentives or exemptions and things like that that you lay over layer over top of what we're doing with regard to proportionality.

But your decisions, your policy decisions will be very much driven by this sort of last 15% of work that we need to do in order to ensure that legally we feel like if you impose this fee at its full cost, we are still meeting proportionality requirements, regardless of what incentives and policy decisions you make on the other side, right?

So I still think that there's that work.

Would you agree?

That's very helpful.

Thank you.

Two, two um final questions, um about it.

Um you again, you you touched on this, maybe this was proportionality rather than a nexus question, but in certain circumstances, um, like residential development here, shoreline park, um, you might have like a lot of parked land, right?

So the demand on the need for acquisition might be, you know, that it might it might be hard to demonstrate that there's a need for funding for park acquisition, right?

Because there's a lot of parkland, but you might need money for the construction of amenities that were facilities that are not served by what's on Shoreline Community Park right now.

So at this level, do we have is is that a distinction that we we have to make at the nexus study level, or is that work that we would do with the proportionality analysis later on?

So I wanna I'm gonna defer to John a little bit because we've talked a lot about Shoreline and and its impact on the city, and we talked about the realities of what Shoreline offers, right?

In way of park.

I mean, there's a there's beautiful golf course and there's a bunch of open space, some of which you can hike, some of which you can't, and then there's a play park, right?

That probably needs to be expanded.

But John, do you want to talk about the realities of Shoreline and how we're thinking about how that plays into the Yeah?

So as we went through the Parks and Recreation Strategic Plan, we looked at Shoreline quite a bit as far as what is considered truly publicly accessible.

Um while it is accessible, we have a lot of constraints, and that is related to wildlife in particular, um, and what we can do as far as taking what is currently open space and possibly um areas that are utilized by the wildlife, so it's already protected space.

Um the opportunities to bring in new elements is very small.

I even trying to put in a new parking area that I was looking to do, we were denied to do that because we don't have enough space to mitigate the loss of what is um accessible areas for wildlife specifically, um, and so in looking at the next steps is how if there are needs within the shoreline within the shoreline area, North Bay Shore area, we're not gonna be able to accommodate these types of elements that those neighborhoods are gonna be looking for.

And so it's a matter of how do we um look at what we should be providing to those families in the area that's close to their residence to identify the next steps.

So to follow up on that, what to maybe try to illustrate shoreline is you know a massive area of of parkland, but you could have residential developments.

We know that there's there's plans for lots of residential to go in that area, and those those families that are gonna be moving in there are going to be looking for parks where their kids can play, right?

They're gonna be looking for parks where they can picnic and shoreline will offer some of that, and it is going to I think impact the type of fee that you can collect from the um the developments that go up in that area.

But to the extent, and I do think that, and this is this is sort of that extra 15% of of work that we have to do.

Some of the ideas that came up in my head, you know, I I sleep with this um in my head, but you know, things like you know, if you're within, you know, this many feet of a mini park, there's this reduction, or there's you know, I'm trying to figure out how do you how do you account for what is available and what is going to be needed based on your development.

And so Shoreline while it feels like you've got this huge park and you know you're easily making your three acres per thousand there I think that you could legally justify yes it is this open space but it is not usable park space and so there still is a justification for collecting a fee in order to allow the city to buy additional land maybe in that area that is not shoreline in order to build another community park or mini park to serve um a need.

And so shoreline is an aspect but how we figure out um I I don't think that it is the the end of the analysis in that particular area for instance and whether or not this goes in the nexus study or if it goes in the ordinance it's hard to determine at this moment I I feel like it's going to require some sort of write up or to be addressed in the Nexus study but it may be more um addressed more head on in the ordinance that becomes that gets adopted that like I said um applies that additional calculation to accommodate or to meet the proportionality requirements so you may end up seeing it in both the Nexus study providing backup for it and the ordinance providing the guidance on how the fee is going to be calculated when you have situations like that.

For the the facilities or amenities for example that are not in Shoreline today we have to have a capital improvement plan to identify them so we can spend that money on the acquisition of land for a new park that doesn't have the amenities that we need or that we believe we will need with new residents so okay you're not in your head that'll be in the catalogue last question I had we received a letter from the BIA um that um had a lot of points and suggestions I was curious to hear staff's uh recommend or suggestions or uh response to the BIA.

So I I'll start first I I read it and um I actually found the letter to be quite reasonable.

I was uh Tyfian uh brought to my attention the um case BIA versus City of Patterson and so that has driven a lot of the work that we've done recently and why we bumped it out a little bit so that we could ensure that we don't make some of the um errors the court identify that the city of Patterson made one of the reasons why we're gonna adopt a separate uh capital improvement plan related to this Nexus fee um and so I don't know if Tyfyan I don't know if you had a chance to look at that letter but that was something that I wanted to discuss because I thought there were some um reasonable recommendations but I will say that it's outside of my area of expertise this is where I would rely on our consultant and our staff so I from a legal perspective I thought it was it made some solid recommendations but I would having just read it yesterday would like an opportunity to um talk to our consultant and the rest of staff I did I don't know if anyone else had any thoughts on the letter.

Yeah I wouldn't have a full-time chance to look into it I will um you know kind of acknowledge and agree that there's a lot of uh post-the sheets decision like a lot of new conversation kind of has arisen um probably tied to a B602, probably tied to sheets probably tied to what it means um I think some of this goes back to you know what did the sheet decision you know what is the Supreme Court directing everyone to do, and then you have you have a bunch of like cases following on from that that kind of point in arguably slightly different directions.

So I think at the bottom of it all from E.

I mean between sheets, AB602, all these things.

Obviously, we have to do what we're doing, what we're collectively trying to do here today, which is to don't rest the eyes of trust over Ts.

I think that's a little we're um looking to do.

Um but I need to I need to need to read the let it roll um specifically and then talk to the team to kind of give a better response.

Question um during the presentation you mentioned this has evolved with uh state legislation's also evolved over the last few years, and I'm just curious where you help me understand where they're heading and if they are focusing on persons per unit or square footage or I guess what I'm trying to get at is do we feel comfortable in how this evolves or not how we brought the patch the same trajectory this state legislation in the case law is cutting so that we don't end up in a spot where we have to readdress this next year or two.

Sure.

Um I think in terms of like state law the mitigation fee act in AB602.

Um I think it's uh to me it's like I don't know exactly what's gonna happen, right?

But I feel like legislature is has made a pretty clear um suggestion that they don't like the idea of flat fees per unit.

And so I think the most at the core of that, there's many things in AB602, including you know having a very clear CIP and transparency and all kinds of other things, but one of their core requirements is like I want you to do it on a post-square foot basis, unless you unless you can explain to me why that doesn't make sense within the proportionality context.

So I think that that's um that's the direction.

I don't I can't see that changing.

Uh, seems like since we're not like that would change.

So I think if we're doing it on a post-square foot basis, we're on solid ground.

I think within that, as you can see, there's all kinds of permutations of how do you lump things together or break them out that uh that are not really.

I think I think different different cities are trying different things based on that preferences, um, and I think they will be kind of generally acceptable within that framework.

Um, I think there's uh the the kind of more the greater uncertainty I'd say would be around the the sheets decision and again what you know to follow is trajectory and you find US Supreme Court makes a decision, Court of Appeals says no, that fee program is fine, Patterson.

Yeah, we have all these cases going on.

Um it's a little bit hard to disentangle how many of them are like specific issues with individual fee programs or what are the large lessons to be learned.

So I wouldn't want to predict you know what what the courts future courts might say in that regard, but I think in terms of like state law and the mitigation fee acts and all those kinds of things I think I think this is you know this kind of framework and structure uh that we've suggested, uh, but also kind of others with the plus square approach would be consistent.

It feels it feels very defensible if we're talking about setting the overall envelope and in the ceilings, you know, the fundamental basis for which you assess the feeling, and then you can have a set of other things.

And then briefly on the uh on the shoreline example if you uh build a smaller part or something else.

Does the I shouldn't know this, but can you use the these fees be used for connectivity between the two like trails or trying to connect another utilized portion of a park with uh something a little bit more utilized?

But the trail system we do utilize parkland fees for the creation of trips, yes.

But that would include smaller like connect uh smaller connections between parks and things like that as opposed to really long trails.

All right.

Uh without any more questions, we will bring it to the meeting person comment.

Um, with any member of the public joining us virtually or in person to provide comments on this item.

If so, click the raise hand button in Zoom.

In-person attendees should raise their hand to be called on.

We will take in-person speakers first.

No, in person, but we have that we have two in-person speakers.

Um, for you to get everything.

The speaker will have three minutes.

Are we ready with the timer?

Thanks for the opportunity to speak today.

Appreciate it.

I'm a planner and developer.

Just some couple of thoughts for when this does go to council.

I think for the public, the staff report or the analysis would be great if the first section showed the before and after.

So we have existing fees now, and you're working on something that would be quote the after.

So for instance, for simplicity, in the condo world, 14 to 1500 square foot condo that staff is pushing us towards right now.

Based on this math, that would go up to over a hundred thousand dollars a year.

And I think it'd be really good for the council and the public to see what the implications are.

The second part of the analysis that I would ask is how does the increases in fees justify compliance with the general plan?

We have two very important things in the general plan that have been modified both by the city and the state HCD, the housing element that called for a minimum of 20% reduction in park fees.

So that would be first, I would love to see how do we increase the fees and still stay in compliance with that codified requirement.

The second part is also in the housing fee and also codified by the state HCD was the secondary, which was opportunity sites for housing, commitment was made to the state in order to spur development, there would be further cuts potentially.

Well, not even potentially, there would be further cuts to fees, including park dedication.

So obviously, when you get to staff report to the council, I really think the council has to understand how this effort parallels or coincides or is contrary to what the general plan, which is our guiding light, states in black and white.

And do you have to go back to the state and amend the housing element because you're not meeting that 20% reduction, and secondarily you're not uh helping the opportunity sites as what was promised to the state through that?

So it's I understand the Quimby Act, that's fine.

This is math, but I think if the public saw and the council before and after, in very simplistic example, um, especially as it relates to condos because nobody builds 500 square foot condos.

Um, that would be really good for people out of the gate, and then compliance with the GP as it relates to that 20% and the opportunity sites.

That's it.

Thanks.

I don't know, you're making it comes up.

Okay, so yeah, hold on, you might be residents.

Um uh actually that the shoreline issue was something that was in my mind as well.

Um, shoreline doesn't, as you discussed, doesn't have all the amenities, but that's why we have community parks.

So there are many planning areas that don't have all of the amenities uh in in their neighborhood parks or the mini parks.

Uh but uh that's why the uh the inlu fee uh ordinance allows for the spending of money from any development in the city to be used in in community parks, for instance the you know, Eagle Pool, Frankfurt pool, uh tennis courts, uh, pickle ball, I think might be something that people are concerned about.

Um, and um so that's that one thing that is really concerning to me is that uh I'm on the EPC but not speaking for them.

But when the uh uh development at the corner of Middlefield and Ellis came to the PC uh earlier this year, uh it's apartments and there was no park in Luffy, and it was just uh kind of shocking to me, having been on the recreation commission some time ago.

The um my thought was that people living in apartment buildings uh don't have yards and they need recreation facilities, uh they need parks.

So I think time is of the essence.

I understand that you know this is kind of 85%, but one thing I just want to encourage is moving forward as quickly as possible without moving so quickly that screw things up.

Uh there's there's kind of a balance there, but uh time is of the essence.

So please, please thank you.

Thank you.

Any other in-person public comments?

None.

Uh we will now take virtual speakers.

Uh Dennis Martin.

Yes, can you hear me?

We can hear you.

All right.

Thank you very much.

Uh good morning uh chair and uh committee members.

I'm Dennis Martin, representing the Building Industry Association of the Bay Area.

I call your attention to our comment letter submitted yesterday, and I ask your indulgence this morning as my remarks may slightly exceed the three-minute time limit.

We appreciate the city's effort to revisit the park fee nexus study and respond to revolving legal requirements following the U.S.

Supreme Court's decision in Sheets versus County of El Dorado.

We also appreciate the city's recognition that development fees and exactions directly affect housing affordability and project feasibility.

The city of Mountain View is one of the most costly communities in the Bay Area to build housing, and if the city is to come anywhere close to building its arena, then you must address fee load on new housing.

I also want to note that on August 19, 2025, on behalf of BIA, I previously contacted Mr.

Marchant regarding the city's efforts to comply with six-cycle housing element programs related to the parkland dedication ordinance, including potential reductions to parkland in loo fees and the establishment of parkland credits for privately owned public accessible open space and trails.

In that correspondence, BIA specifically encouraged the city to undertake robust outreach to the development uh residential development stakeholder community.

And we have not been contacted regarding this effort, but uh BIA requests and appreciates staff's willingness to continue that dialogue through a robust development stakeholder dialogue.

That said, we believe the proposed fee framework raises several important concerns that warrant additional stakeholder outreach and further analysis before the city advances toward that adoption.

First and foremost, the land acquisition assumptions embedded in the study appears to significantly uh exceed uh that of recently regional appraised market evidence.

The staff indicates that the city is utilizing an implied parkland acquisition assumption of approximately 7.8 million per acre, but by comparison, a recent USPAP compliant appraisal prepared for the city of Santa Clara concluded that reconciled land values ranging from approximately 5 million to 5.6 million per acre existed across multiple Santa Clara zip codes.

That appraisal utilized verified comparable sales, market condition adjustments, transparent reconciliation methodologies.

The difference between those values and mountain views assumptions raises important questions regarding whether the Nexus study may overstate current acquisition costs in today's moderating market environment.

Therefore, BIA requests that the city adopt the transparent City of Santa Clara annual appraisal model to determine land value for parkland acquisition.

Second, we urge the city to more carefully evaluate occupancy assumptions underlying the proposed fee structure, and I'm not gonna get into as much detail as we did in the letter.

You've kind of addressed that in your presentation, but um we do want to thank you.

Were there any other virtual public comments?

Nope.

All right, we will bring it back to um I will bring the item back to the committee for deliberation and to provide input and direction to guide the final development of the study and its future consideration and potential adoption by the city council.

Who gave you that impression?

I've only got a few months left, so I'm going to maximize the opportunity to provide input.

So I'll start with I think the uh appreciate staff and city attorney's office uh returning um to the committee with the adjustments that we uh directed uh back in January.

Um I think surprised by some of the outcomes, and uh I think as uh the representative from the public speakers have mentioned you know the math is the math, and I don't have a math background, so I'm um you know, I think it would be helpful as you continue this work to maybe break down in bite-sized chunks exactly how you came to some of these conclusions for those of us in the council um are challenged mathematically.

Um but uh I think as a whole, I think direct there's directionally moving in the right direction.

I I would support um the staff recommendations uh or the first two questions uh establishing the uh Quembiac fees and PHP uh B Act fees based on square footage.

Um as the report concluded that's the most defensible approach.

Um and um I continue to support applying um the impact fees to non-residential development, although I think we may want to make a policy decision later about you know if we want to facilitate you know neighborhood serene retail, mixed-use development, we may want to you know provide an incentive to do so.

So that's one thing we don't have to figure out today, but I think it's good to give the council the option later to impose fees on non-residential developments so that way we can provide the amenities uh that patrons of those businesses and employees also will likely use.

But I'm I'm nervous about um again, appreciate staff's responses to the questions I submitted in advance.

I'm nervous that at least you know these the legal maximums that we're seeing um uh represent a substantial percentage of the hard costs of of the construction costs of residential development, right?

Between 12 and roughly 13 and a half percent.

That's a non-trivial point.

We're we're struggling um to uh uh realize the housing that I think that the council has been uh encouraging for many years.

We've seen a small number of projects around and those are the projects with the highest return, right?

Generally, you know, attached and detached single family, but a lot of the multifamily projects are just not uh financially feasible, and that's certainly true for uh condominium development, you know, has been a priority for the council for a long time.

So I I'm I'm nervous that these are not the final numbers, right?

There's there's a little bit of a black box for me about additional inputs that likely will result in lower numbers, but um right now I think the the concern is we may end up with fees that de facto uh never materialized because uh construct that you know the I would mean it's not financially easy.

Uh so I I think that the next steps are gonna be very important.

Um, and I I would love sort of a further breakdown, what are the things that we have to do, right?

The proportionality analysis, the legal compliance, and then um you know what what are opportunities for reasonable um uh discretionary or or policy solutions to some of these challenges, right?

How can we ensure that residential development is not infeasible?

So we actually one, get housing, and two, generate the fees or our planned in lieu of the fee uh where the community uh would benefit from from these types of amenities and disabilities um so I I I don't know exactly how to prov like what kind of direction is useful right now but I think at the starting point um outreach to the development community seems reasonable something that we've uh done very effectively in many other contexts we're pretty good at public outreach so I think that um that suggestion from the BIA could be worth pursuing there might be other suggestions in that letter that are helpful and perfectly sensible um I think I would look to staff to guidance for you know what is your response what are things that we can do without um risking pushing the effort too far out right where we're in this unfortunate space where you know a certain class of housing we impose fees and another class of housing we can't legally impose fees I don't think that's that's right or fair especially with a product type that the council would like to see uh entry level ownership housing um I think that's something we want to see and yet I'm a developer and I have the choice between you know an apartment complex without a subdivision that pays zero dollars for fees and the condo development why would I pick the comment development right now right um we are we have the the regulatory framework serves as a disincentive to that housing so I think we should be mindful of the impact of these decisions on feasibility and also the types of housing that de facto we're incentivizing based on that three that that fee structure so I don't think I have useful things to say aside from my support one and two and for additional input in direction I would say uh conduct the development community outreach and look at that letter BIA currently with suggestions for opportunities to make the process a little bit more transparent and also take into consideration the financial feasibility of residential development.

I think that's kind of where I would land I don't have anything to add I think if we this comes back to us in September hopefully we'll have I don't know if there's any state legislation this year that might impact any of these I mean but hopefully by September we can probably maybe there isn't and then and then just appropriate as we always do any boards but I don't think the way we structure this we don't really have to worry about that probably Vice Mayor so we are um advocating for the the condo uh the legislation going to know about the condo and the insurance piece so maybe that will be something that will help with the condo development um something that we are engaged in.

So we can try and provide an update at that time where the bill is at or late advocacy efforts that would be helpful at that time as well.

Yeah I think things are gonna be real time we've been getting help regulations anyhow basically do you have answers for the three questions though?

Well I'm I'm fine with the general direction at all and so I don't I don't have any more but the ultimately the fee that we adopt will be this is set into the LAX or the the local access here and then whatever we adopt will be I think you're going to see a further reduction.

Yeah.

And we can there can be set of scripts correct policy adoptions that will potentially even reduce it by there.

That's probably okay so uh yes we're doing.

Okay.

So yes, for one and two and um I really do like the people six.

I kind of am still it's still not enough for me to, well, the single family attached in the single family can be just straightforward.

But I'm kind of curious the breakdown for with the multi-family.

I'm trying to visualize how does it how does this break down the current B 20% off?

And the average unit, how would that look with like the past five projects we approved or something like that?

That gives a better sense of like what does what do these fees mean?

Um and like actual tangible units and projects that we have approved.

Um what does that what would that actually be?

Kind of run it through the SIP, so that we know, like, compared to the projects that we actually get.

How does that look?

Um, I kind of also view it it's it's completely different, but I kind of view what we're setting is like this is the maximum amount we can charge, kind of like when we do taxes when we ask um our residents like please approve this tax structure.

That's the maximum amount we are allowed to tax.

The council can always lower that tax.

I remember this with uh measure P.

Um, there was always that discussion.

Um, you're still on council and council member Clark, um, where like we uh well the question that went before the voters was like the maximum amount they could actually charge, but the council could say like, oh, we're concerned about like the economic life viability of things and and lower it on their edge.

What you needed was the approval to go to the next one.

That's kind of how I do it.

Um, and then we will to make our housing element goals and stuff like that.

We will probably lower it from that, but this just so that we can cover ourselves legally.

Um with that the staff have what they need.

Is there a motion needed?

No, I don't know.

I'm happy to make the motion.

Okay.

I don't know.

So I moved to approve the staff recommendations to uh establish Wimby fees, when we have these mitigation VXPs based on where footage, uh, and then to apply the updated part of the reach impact fee to non-residential development, two key things, and then I don't think there's opposition, I'll include the directions to conduct development community outreach.

Um, that to evaluate the IA better and firm recommendations.

Um it's not gonna come back to CS.

Next step is to build the helpful.

I'll make sure that I can include that cash.

Like what you think of the reasonable.

I'll second it, but I just want to make sure that uh the outreach is I don't know the extent of the RH.

So, like, that there shouldn't be no reach.

I just I don't want to dictate the form, we can I don't even be okay with it.

We want we want all that input, I'll just leave it out to figure out how they see something input.

I mean, I will love plentiful detail in what we get back from that, and sometimes it varies when we hear about like outreach sometimes.

Um ideally, I I remember when we did the housing element work, there was like that grid of like this is the um this is the input we got and this is why we recommend this based on that.

Um I won't be prescriptive, but I kind of like that.

I can speak briefly, my mayor, or spricking murdock community development director.

Um so we have already conducted engagement with the development community.

Um perhaps not as broadly uh include the BIA as they've suggested they would like, but we have targeted developers active in public.

Um that has led to some of those developers participating typically as a consequence of that.

So I think process is working.

Um what we hear is the fees are too high, as you can imagine, and it's difficult to know where we could calibrate those fees to satisfy the development, we can quote unlock certain desirable types.

We can think about how to figure out where the line might be.

Uh, but for condominium development, particularly, we've had other uh developer engagement very recently as part of our uh low and moderate income uh ownership strategy work or the console work plan.

And what we're hearing overwhelmingly from auto developers is that the construction defect liability is the number one cost implication and barrier to the ability to develop condominiums.

Absolutely.

Fees are an important part of that, you know, whether it's 10% or something around there, that's a very high share, but it's it's not been cited as the foremost recent or obstacle to condominium development.

So it's not even clear if we set it to zero what that would do given the construction defect liability that we can also tally a very significant amount.

I'm not suggesting we would get to zero as a city, but that's within the council's uh purview to decide.

Um so it's just I think that and balancing with the fact that this tends to be the most significant funding source for park acquisition and construction.

Those are difficult policy uh uh issues to balance out.

Uh, but we have done developer engagement, and the good news is we're tentatively scheduling the summer to have another developer engagement meeting.

And so uh this will provide an opportunity to update where we've progressed since the last engagement and see if there's further impact from the developers at that time.

And then maybe then I don't want to be prescriptive either, but the reason the BIA is special is that they sue, they sometimes win.

All right, we have a motion and a second.

All in favor, all opposed, abstentions.

And that seems to have passed unanimously.

So we will now move on to item six, committee staff, comments, questions, and committee reports.

Are there any committee or staff reports questions or committee reports from committee members?

I'm always curious about uh what else are you building up?

Do we have any other items this year?

Uh December, we've got November, early December, and we're gonna poll you on that.

That'll be the ACFER.

We are going to also bring back uh the auditor work plan and results from past audits.

So I think that's pretty much the key to make it once.

I mean, uh so that'll be December.

I don't foresee one before then.

So you got a little break.

Thank you.

With that, I'll adjourn the meeting.