Okay.

Good evening, everyone.

If folks can take their seats, we're gonna go ahead and get started.

Great.

Good evening and thank you for joining our city council meeting of July 7th, 2026.

We hold meetings in a hybrid format with both in-person and virtual participation.

The city welcomes public comment on topics within these cities' subject matter jurisdiction, and members of the public may provide comments as follows.

In-person speakers will be called first.

Speaker cards are located at the back table in council chambers and must be turned in to the city clerk here at the Dais.

Please be sure to indicate the agenda item number you wish to speak on.

Attendees who have joined us by Zoom will be called to speak after the in-person comments have been given.

Detailed instructions for public comment will be provided on the screen when the time for public comment begins.

Spanish interpretation is being provided for tonight's meeting, and I'd like to turn it over to our interpreter for instructions on how to participate in the meeting in Spanish.

Thank you.

Thank you so much.

With that, I'll now turn it over to our city clerk to call the roll.

Good evening.

Council Member Chu.

Here.

Councilmember G.

Present.

Council Member Howard.

Here.

Council Member Padilla.

Present.

Council Member Sturkin.

Here.

Vice Mayor Aiken.

Here, Mayor Martinez Savallos.

Here.

Thank you.

Thank you.

And with that, we will move to the Pledge of Allegiance.

Councilmember Howard, could you lead us on the pledge?

Please join me in honoring our flag and our country.

I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God.

Thank you, Councilmember Howard.

With that, we'll move to item four, but have all council members participating in person.

So we will move to item five, which is a presentation we have from the San Mateo County Mosquito and Vector Control District on Mosquito Control and Awareness.

And I'd like to welcome Redwood City's representative on the county's mosquito and vector control district, Katherine Lyon, as well as the district's communication director, Rachel Curtis Robles to the podium.

Welcome both.

Hi, good evening, Council.

Um thank you so much for having us here.

For those of you who may not know, I've been your representative on the Mosquito Board for about 12 years now.

So I'm very happy to represent the city, and I will hand it over to Rachel, who will do all the hard work.

Hello, everybody.

Thank you for having us.

Um I'm just here mostly to remind you all that we exist and that you pay for us in your taxes and you should use us as you need.

Oops.

Uh we do a lot of different services.

Our bread and butter is mosquito control.

We also offer mosquito fish, which are little fish we can plant in certain types of water to eat the mosquito larva.

We can identify all types of insects and ticks.

Um you just have to send us a photo, or we can even come pick up the sample from your house if you've collected it into a little container.

We can help with rodent inspections.

We don't do the fixing, but our technicians are really experts at pointing out and finding all those little spaces where they somehow make it into your home.

We do yellow jacket control, which is one of our most popular summer services.

If you know where the nest is, these are often confused for bees in the ground.

Um, and usually when you're doing landscaping or gardening is when you are unfortunate enough to find them.

Uh, we do community education, so we visit a number of schools.

I'll be back here in a few days to visit some students at Hoover for a summer school program there.

And we do disease surveillance.

Uh so we do a lot of work throughout the city of Redwood City.

Um, just last year alone, we had over 450 service requests.

That means somebody from the public called in and said, Hey, I'm having an issue that I hope that you can help me with.

And we went um usually the next business day, we're able to get out and help with that issue.

Um, and then a lot of other behind-the-scenes work to try to control the mosquito populations in Redwood City and Redwood Shores and the marshy area over there.

In particular, a lot of people are very intrigued to know that we have a fanboat for some of our work that's in the marshy area, the Bear Island area that's um federally and state and locally protected.

And so we go out there every month to check for mosquitoes and control if necessary.

We also help the California Coastal Conservancy to control a kind of invasive cord grass that is there, sort of not doing great things for the ecology out there.

So we help them with that.

Oh, it got cut off.

We'd like to remind everyone to report dead birds because they can be the first signal of business virus in an area.

And of course, dump standing water because that's where the baby mosquitoes grow.

And uh reporting biting mosquitoes can be very helpful.

We cover the entire county with just about 22 staff.

And so you are our eyes and ears, and unfortunately, sometimes getting bites.

So please do call us if you're getting bitten, and we will send somebody out to check.

We're happy to take any questions or I know you look like you're gonna be busy tonight, so you can also feel free to not ask questions.

Thank you.

Thank you, Rachel, and thank you, Catherine, for serving Robert City, representing us on the districts, and we'll start with council member Howard.

Thank you.

Catherine Rachel, thank you so much for coming this evening.

I took a tour with you, Catherine.

It was a few years ago.

But uh, are you still offering the tours?

Yeah, oh yeah.

Yeah, we do district tours.

You can reach out, that would be me.

I do the tours now.

So we're happy to have folks every so often we'll open up public tour time and people can sign up on our website.

That's wonderful.

I really strongly advise you to do it.

It's quite an education, and I don't think that we have a problem in Redwood City because of the good work that you do.

Thank you so much.

You're welcome.

Thank you, Councilmember.

Any other questions?

We'll go to Council Member Church.

Just uh, so first of all, thank you uh for everything you do.

You know, people don't know, notice public health until something goes wrong, and really appreciate it.

Um, just a quick question about ticks.

If we get a tick, uh, do you guys do the uh the sort of testing or or should we send that um somewhere else?

Yeah, so we don't test ticks in our lab and the CDC and the State Health Department don't recommend testing ticks for a lot of various reasons, which if you if you want, there's a whole page on our website about that, or you can call me sometime and I can tell you why.

But we will identify the ticks so at least you know whether or not it is a tick that can spread Lyme disease or other diseases, which is people highest concern.

And we can also have when people call us about that, we can have a conversation about test or not test or what to look out for.

Thank you, council member.

Any final thoughts, questions?

Not seeing any.

I'll just add my thanks.

Thank you so much.

Thank you, Catherine.

Thank you.

Great.

Appreciate the presentation.

And with that, we'll move to item six, which is public comment on the consent calendar matters of council interest and items not on tonight's agenda.

So I'll turn it over to our city clerk.

Thank you, Mayor.

We have one in-person speaker at this time, and anyone on Zoom who'd like to give public comment on general matters this evening, not on the agenda but within the city's subject matter jurisdiction.

Feel free to turn in a speaker card or raise your hand on Zoom.

And once we collect all the speakers, we'll close the speakers' list.

Okay, closing the speaker's list, and we'll call our one speaker, Rona Gundrum.

Welcome.

Sorry, just gonna stop.

Good evening all.

I'm a member of the TAC, however, my comments this evening are as a 38-year resident of Redwood Shores.

At the June 22nd council meeting, there was a public comment about the Redwood Life project.

There was public comment.

The group behind many of these comments continues to insist that the proposed project is five times the existing development.

They are conveniently omitting the current surface parking in their comparison.

When you translate the surface parking into garage parking, it comes to approximately 1.2 million square feet, bringing the existing development to around 2.2 million.

Compare that to the five million square feet being proposed, and it's 2.27 times larger, not five times, still a good deal larger.

You also heard the process is rigged to favor the developer's plan.

The council is ignoring residents' objections, and that council is considering a deal with Longfellow that would renege on the Westport plan promises.

As the EIR and Precise Plan are still in process, I do not believe Council is considering anything at this time.

When the EIR and Precise Plan are released, there will be a 45-day public comment period, community workshops and surveys, a joint planning commission and council study session, and input from the architectural advisory committee.

All of these will form the basis for a smaller alternative.

So it's not an all or nothing proposition as they are claiming.

Please release the EIR and precise plan now so that the community has data and information versus speculation and misinformation.

Thank you.

Thank you, Rona.

That concludes public comment mayor.

Thank you, City Clerk, and thank you to our public commenter this evening.

And we will move to our consent calendar.

Items on the consent calendar are routine in nature and are approved by one motion.

Are there any items on consent from which council members are recused?

Not seeing any.

Are there any items on consent that council members would like to pull for discussion?

Not seeing any either.

I'll entertain a motion on the consent calendar.

Move to approve consent.

Second.

Thank you.

That was a motion from Councilmember G.

A second from Council Member Howard.

Could we get an electronic vote, please?

Sorry, Mayor, we're having a technical problem.

Can we do a roll call vote?

Would that be a works?

Thank you.

Start with Council Member Chu.

Yes.

Council Member G.

Yes.

Councilmember Howard.

Yes.

Councilmember Patilla.

Yes.

Council Member Sturkin.

Yes.

Vice Mayor Aitken.

Yes.

Mayor Martinez Abaias.

Thank you.

The motion passes unanimously.

Thank you, everyone.

Thank you, City Clerk.

And with that, we'll move to our staff reports beginning with 8 review of supplemental elections code section 9212 report on impacts of an initiative to impose additional rent control and just cause eviction limits in Redwood City.

Again, Spanish interpretation is being provided for tonight's meeting.

And I'd like to turn it over to our interpreter for instructions on how to participate in the meeting in Spanish.

Thank you.

Thank you so much.

With that, we will uh City Manager Patrick Heisinger will briefly introduce the item and housing leadership manager Elyn Lancaster and City Consult Consultant Jason Moody with EPS will give the presentation.

Great.

Thank you, Mayor.

Good evening, Council, members of the public.

This is a follow-up item to the discussion we had on June 8th when the city council was presented with what we're referred to as a 9212 report that provided information on the potential impacts of the rent control initiative that has qualified for the November ballot.

You may recall that at the end of the item on June 8th, the city council provided staff with further direction on analysis that the council would like to see to help inform not just the council but the community and others that are interested in this topic to supplement the 9212 report.

There's three distinct areas.

The last meeting, so I'd encourage those who maybe didn't attend the last meeting.

There was a much longer presentation provided on that.

We really want to get to the substantive discussion around the 9212.

So we're not we're not trying to rush.

So if you need any further clarifications, we can definitely answer any question.

The final thing I'll say, I do want to express just a lot of gratitude.

City staff and our consultants over the last three weeks really did a lot of work.

I mean, I don't know how many pages this is, 40 or 50.

Um, but really a lot of, and I really appreciate the council's feedback, really getting into the nuance on June 8th, because um it definitely was some things we had to flesh out a little bit more.

So before I turn it over to Lynn, just a lot of gratitude, and then I'll let Alyn um introduce our our consultants as well.

So thank you, Mayor.

Thank you, Patrick.

Um hi, Alyn Lancaster, Housing Leadership Manager.

Good evening, City Council.

Um it's nice to see you again.

So as Patrick mentioned, we'll be going over this in two parts.

I'll give just a brief recap of how we got to uh tonight's recommended actions and they proposed ordinance and then um Jason Moody as well as Kavia, and I'm gonna probably mispronounce this, um Chatrapati.

Close enough, um, with economic and planning systems or EPS will do the supplemental 9212 report.

I do also want to acknowledge that we are joined today by Lolita Fernandez, deputy city attorney, Beth Goldberg, Finance Director, Michelle Katsuyoshi, HR Director, Victor Gaetan, Housing Management Analyst, and Karen Tiedeman, outside legal counsel who are available to help answer questions.

Yeah, and then here's just the as I mentioned, the how we're gonna go through tonight's presentation.

The questions for the council to consider during the presentation are does the city council have any questions about the election process?

Does the council have any questions regarding the proposed ordinance?

And does the council have any questions regarding the supplemental 9212 report?

Um I'm not gonna go into every single aspect on the slide as the city clerk had reviewed all of the petition process um at the last June 8th meeting.

But on June 8th, the city council did accept certification of the petition.

They received the 9212 report and ordered the supplemental report.

Uh tonight the council will be asked to receive that supplemental report, and the city council must act on one of the options listed here.

Option A, adopt the ordinance without alteration, or option B, call an election and place the proposed ordinance on the ballot.

So the proposed ordinance includes rent stabilization requirements where annual rent increases would be limited to 60% of the percent change in the consumer price index or CPI with a maximum of a 5% rent increase.

The ordinance would also require an initial rollback of rents to October 2025, and it does place limits on the utilities that landlords can charge on rent-controlled units.

And as a reminder, we did discuss this on the June 8th meeting that the state Costa Hawkins Rental Housing Act does limit local rent stabilization ordinances and exempt single family homes, condos, and any new construction built after 19 February 1st, 1995, from rent control.

Costa Hawkins also requires vacancy decontrol, meaning that landlords must be allowed to reset rents at the start of a new tenancy.

The proposed ordinance does include just a cause for eviction protections, and these do expand beyond the city's tenant protection ordinance or TPO and includes protection additional protections for students, educators, elderly, disabled, or terminally ill tenants.

The proposed ordinance also has the just cause eviction protections going into effect immediately, as opposed to state law or the city's TPO, where protections would go into effect after one year of tenancy.

Similar to the city's TPO, the proposed ordinance does include right to return requirements, but these requirements are expanded to cover all no fault just causes, which are owner move-in, substantial remodel, demolition, or withdrawal.

For no fault evictions, the proposed ordinance requires relocation assistance equal to four months of fair market rent, also known as FMR, or a minimum of 12,000, whichever is greater.

And it also provides an additional $6,000 for elderly, disabled, or terminally ill tenants.

The proposed ordinance also requires landlords to provide a tenant safety plan when undertaking repairs or construction.

And these tenant safety plans would need to be approved by the city.

Lastly, it does call for program administration to be provided by the city, which would include managing a rent registry, processing petitions and appeals, providing free legal services for low-income tenants, and this would be a fee-funded system that the costs could not be covered by the city's general fund.

Within the ordinance, there are two tiers of applicability.

So you can see here on the left-hand column what we call fully covered.

These are units that are subject to the requirements, the rent stabilization requirements, and fully covered units would include multifamily properties built prior to February 1st, 1995.

And this does include deed restricted affordable units and ADUs built prior to 1995 as well as mobile homes.

Partially covered units are units that are not subject to rent stabilization but would be subject to all of the other requirements within the ordinance.

And this does include single-family homes, multifamily housing built after 1995, which is inclusive of deed restricted affordable units.

As mentioned, at the June 8th meeting, the city council directed staff to prepare a supplemental 9212 report.

Sorry, let me take a step back.

The initial report I will note that mainly provided analysis on the effects of the rent control provisions, and so the council in June 8th requested additional analysis, primarily focused on three areas: the cumulative impacts of the report on property owners, the potential impacts to affordable housing, and further analysis on the impacts of the city on the city's finances.

And so we have contracted with EPS to prepare both the they prepared both the initial and the supplemental report.

And so now I'll introduce uh Jason Moody to uh give the presentation on the supplemental.

Thank you.

I'm Jason Moody.

I'm a managing principal at Economic and Planning Systems.

Um we have real estate economics firm that's been around for over 40 years, and we've done a fair amount of work for Redwood City on a variety of issues.

So pleasure to be back.

Again, we're back for round two.

Uh we did prepare the first um uh 9212 report, and as was mentioned by Lynn, there were um a number of questions and requests for some additional analysis, which we have conducted.

It's been a little bit of a fire drill, but it's been quite interesting as part of this process.

We work very, very closely with with staff, and staff was incredibly helpful to get through all this.

Um I also worked with Cave, who will be my colleague who will be giving the second part of the presentation.

Um, and we did interview a variety of stakeholders, uh, get their uh to get their input on some of the impacts.

Um, so um there's been a fair amount of work, but uh I think we got a lot of new information that'll be uh informative.

I want to make sure I can forward this correctly.

It's just kind of possible.

Okay.

Um so uh Lynn went through this.

That the the additional work that we have done is focused on four four items primarily.

Uh one is just the economic implications of the what we'd call the non-renter control components of of the uh the ordinance proposed ordinance, things like just cause, uh, relocation assistance, tenant safety, and we'll go through each one of those separately.

Um we also took a look at the uh cumulative impacts.

These are really external factors that are really not part of the ordinance itself, but the combined effects of new fees and external cost pressures and other regulatory requirements uh can in in kind of combined way have an impact on uh housing operations and and financing, which we wanted to consider because this ordinance is not obviously happening in a void.

Um, and then um because affordable housing um has a variety of uh unique elements in terms of financing operational and the affordability requirements themselves, which overlap to some degree with the proposed ordinance.

We wanted to do a little bit of a deeper dive on how this ordinance would potentially affect that sector.

Um so we did some more of that, and we did, as I mentioned, interview a variety of affordable housing developers that are active and operators that are active in Redwood City and elsewhere in the Bay Area.

And finally, uh we are taking a closer look at some of the impact on the city finances.

Cave will get into that in more detail, but essentially uh the first round, there were some questions that we thought we should look into more.

One was the startup cost of the program, the need for reserve funding, and then uh the requirement that the city provide legal services for the program.

There we go.

Um, before I jump into that, I'm gonna just step back and kind of talk a little bit about what's at stake here in terms of the city's housing stock.

And this is a this is a slide that we also presented last time, but it's worth refreshing because 48% of the city's housing stock is rental, about 48%.

Um so all the rental units will be um um subject to the um the tenant protection components of of the ordinance.

However, the the 19% of the total city stock is gonna be the most impacted because they would be subject to both rent control and tenant protection.

So nine nineteen percent of the housing stock in in Redwood City is probably the most impacted, although all rental units will be impacted to some degree.

And it's important to think about the impacts are gonna vary by uh by whether it's single family, but an ADU, multifamily, whether it was built before 1995 or out after 1995, so there's a lot of different things to consider, and the ordinance does have slightly different requirements for each one of those.

So it's a pretty complex uh uh um analysis, trying to to separate out those all those potentially unique factors, and we've done our best, but obviously um we can't cover everything.

There's always gonna be issues that we didn't cover uh completely, but we really tried to hit all of these issues.

So I'm gonna go over our key findings and then we'll go into detail.

So first um the the ordinance, the non-rent control components of the ordinance uh does does have material costs and risk to property owners and investors.

Um the things like just cause, relocation, right of return, we'll go each over each of those separately will affect the city's rental market more broadly in a variety of ways.

And we're gonna talk about how that does.

Uh but they are more uh less quantifiable, so it unlike the rent control component, which is very easy to calculate on a pro forma, a financial pro forma, these are a little bit more sporadic and um gonna be case by case, so we can't quantify the impacts directly, but we can qualitatively discuss those impacts.

One thing that we have found is that greatest impacts in general are gonna be the pre-1995 units, that 19% we talked about.

Um and those it's really important to me, especially on the uh the multifamily.

Those units really do provide the bulk of the city's naturally occurring affordable housing right now.

Buildings that were built pre 1995 rental units.

The rents on those are already well below market.

They're probably, depending on the unit, probably about 75% of the average market rate for market rate units.

So they are already below market.

Um those buildings also have an additional lower rents, they have tend to have more report repair and maintenance needs just because they're older.

Um they do take a little bit more care and feeding, so to speak, and so sometimes the cost uh and ability to absorb various unknown factors as well as the um rent control component, those can be more difficult to absorb in general for these older buildings.

Um the cumulative external pressures will could potentially amplify these effects, and we've documented some of those, some of those kind of external things, such as the uh government fees and utility costs, uh, insurance costs, interest rates, these are things obviously most many of these are outside the city's control, but they are uh at current market conditions, those have been increasing of late, and so it's they have a count compounded effect.

Um the next two findings I wanted to talk about is on affordable housing, and we're gonna provide a lot more detail.

We did some pro forma analysis of a typical um affordable housing project in the city and looked at how um the rent the various provisions, including the the new fee that would be imposed on all rental units, uh, would affect the financing of a typical affordable housing requirement.

And my colleague Kavia is going to go over that in more detail.

And finally, the fees, uh we looked at those more closely, and the fees that are uh stipulated in the ordinance itself, about eighty-four to a hundred and twenty dollars a unit.

Um, based on our analysis is definitely not gonna cover the cost of the administration of this of this ordinance if it is approved.

We think it's more in the range of about $320 to $700 a unit per year for uh this on rental unit.

So it's a new fee that rental units would would need to pay to uh to uh implement the ordinance, and that's in part because the ordinance does not allow the money to come from the city's general fund and needs to come from the fees itself, and so the city would need to impose those fees to pay for the implementation of the ordinance.

So, gonna go over tenant protections one by one.

Um, and again, there's a lot of information in the proposed ordinance, so we can't possibly cover every element.

But the first one we're gonna talk about is the just cause uh eviction requirements uh or provisions in the ordinance.

Um, and so the city's has an existing tenant protection ordinance and there are also state law that already does cover uh just cause eviction to some degree, and state law will determine the time frame, the evidence, the legal proceedings, all those things are covered by state law.

So this this while this ordinance does add new new provisions and new protections, it doesn't override those requirements or the legal proceedings will not be undertaken in the city or by the city.

Um so what the ordinance does is um it adds some no-fall protections for uh for elderly disabled terminally ill um residents, so that uh in those circumstances uh that you you would it's it you would not be able to invict on much fewer circumstances would you be able to evict those individuals?

Um it broadens coverage to include single family condos and affordable housing, which was not covered in the in the city's tenant protection, so those units would be covered.

Um again, as the Lynn mentioned, there's no longer a waiting period before it's it would be a year before uh you would need to comply with the just cause evictions.

Now it starts immediately upon tenancy.

Um and the right of return is also included, which means that if you are um if you are evicted for a just cause or for a no fault cause, and we can get into the difference between those two, um you have a you have a right to return uh at some point uh for primarily for uh for um for a just cause you have a right to return, and that right of return does not uh expire.

In other words, if the the unit does re-enter the housing market, um then you have a right to return to that unit.

And and oftentimes the right is at the same rent that you uh left at.

Okay.

Um so what does this mean?

What are the potential impacts of this just cause uh for for uh landlords?

Um so there are existing state laws, so we have to look at the incremental impact of this of this ordinance if it were to approve.

Um, and because the it's a the additional it will impose undoubtedly financial burdens on landlords in some cases, um, but it will be hard to impact exactly uh how much because it's gonna be uh circumstances in which there's an eviction and those are sporadic events, and so it's difficult to know exactly the the total aggregate impact of something like this.

But we can talk a little bit about how it's gonna affect different types of units.

The post the buildings that are built past 1995, those market rate units, um, those will potentially be affected.

They also are covered by these provisions, but they the the impacts could be mitigated over time with rent increases.

So you can always increase the rent on your uh on your tenants uh and over time, and so if there's additional costs and other factors associated with the just cause evictions, those can be mitigated to some degree.

But again, the pre-1995 market rate multifamily, you cannot address issues with tenants using the rent tool.

So you're gonna have to it technically be more uh difficult to uh mitigate those costs.

Um, a single family condos uh NADUs again, those will be covered now under the and so in some cases is possible that some owners of single family units or condos who rent those own those units may decide that it's you know too much trouble and too much risk to do so, and they may remove their units from the market.

Again, it's hard to predict to what degree that would happen, um, but it is there is potentially uh more concern there.

Um, the affordable housing, again, most affordable housing developers are not in the eviction business.

They're actually doing the other thing, the other perspective, but they um not that anybody's in the eviction business actually, but um, but they you know they tend to be um uh the only issue that they would potentially have is that they have their own uh affordability covenants and uh you know sometimes tenants no longer uh no longer qualify because they've uh for whatever reason, and so there may be some complexity around how they would deal with tenants that no longer qualify um from an income perspective, but you're you no longer allow to evict them under the requirements.

Um in terms of how it's going to affect this the the city's uh regional housing needs allocation, and that's the allocation that the city gets from the state essentially uh for how many units you should try to uh develop over the next eight years.

Um there may be a perceived increase in the costs and risks uh in the city associated with the the stronger uh just cause eviction requirements, and so it may affect the city's investment climate to some degree um for new development, which again would affect the uh the regional regional house, achieving your regional uh housing goals.

Um go to the next slide and relocation assistance, um, so you know, what would change here?

Uh that it would substantially increase the tenant relocation uh assistance for uh an eviction for a no-fault eviction.

So if you if if you evict somebody for you know for for a variety of reasons um that isn't because of lack of payment of a lease or something like that, it's it's considered no fault, whether it's withdrawal of withdrawal of the unit or a move in move over move in or major um renovation.

So the cost of the proposed ordinance uh that is required in the ordinance is a little bit higher than it would be under the base existing TPO.

So for example, we have an illustrate illustrative example here of a of a one-bedroom.

The existing TPO would be about three thousand uh dollars uh if the if the market contract rent is three thousand dollars, you pay that one month.

Um, unless it's a special circumstance, special circumstances really relate to um if it's affordable units, then you would pay more under the existing TPO.

Under the proposed ordinance, you would pay 12,000 from 12,000 to 18,000.

So you see the difference there for a no fault eviction uh in this case, the relocation assistance would be um uh nine thousand dollars more per unit, or uh about nine thousand worst case, or maybe six thousand under special circumstances because the city's existing TPO has stronger protections under these special circumstance tenants, so therefore the difference between um the proposed ordinance and the addition and the um and the new uh and the existing requirements is less, it could be less.

Um so what uh what are potential impacts of this relocation?

Um, these stronger relocation assistance requirements.

Um it may increase uh the increase in cost may discourage rehabilitation of occupied units for some building types and certain circumstances again hard to know.

But if you're gonna if it costs you more to temporarily relocate a tenant, uh then you are going to uh maybe your pro forma will not the cost of doing it may not pay off.

But again, I we believe that for the buildings after the ones that are built after 1995, it's gonna be easier to recoup those additional costs just through the rent itself, and so that'll go into the equation.

And so and over the long term, we don't feel like the impact will be as strongly felt on uh the renovation of post-1995 market rate multifamily units.

Um, but for pre-1995 market rate units where you you cannot increase the rent to recoup your costs until the until the unit is vacated permanently, those those would be more effective and may discourage some rehabilitation of those units in some cases.

Um maybe disproportionately hit hurting the smaller owners of this kind of mom and pop builders who don't have uh the capital and financing necessary to uh to um absorb these additional costs.

Um, single family condos ADUs cost increases again um would occur and that's could be more expensive, but they could be mitigated over time with rent increases unlike the pre-1995, those are exempt from um any kind of rent control uh other than the state rent control.

Uh affordable housing, um, a little bit more complicated.

Um affordable housing uh developers are quite accustomed to paying uh relocation in general, but the cost here may be a little bit more.

But they already provide uh uh they're pretty used to paying relocation expenses, so it's a little bit more of an ambiguous uh circumstance there.

We don't think this particular component will really affect the city's regional housing needs allocations because um the rehabilitation of projects is really never really part of the that achieving those goals.

Um those units already exist, they are not at adding new units, so technically that wouldn't affect that portion of uh that it wouldn't affect the your arena goals.

Tenant safety plans.

Um, as mentioned, it this is a new requirement, so that that landlords prepare a tenant safety plan before making repairs and renovations uh that would require a building permit.

Obviously, not something minor like putting a new refrigerator in, but you know, if you have something that requires a building permit, like replacing plumbing or something along those lines, you will need to prepare a tenant safety plan.

Um so uh this is harder to to really quantify as well, just because this is a relatively atypical requirement.

We don't see much of this.

In fact, we weren't able to identify any barrier examples of communities that require tenant safety plans for repairs that require building permits.

Um so that the we did talk to landlords and property owners about this.

They expressed concern about uh about the implementation administration of this, as well as you know how much detail would be required that the the preparation costs uh for one of these would be had to be absorbed into the budget.

Um there is an approval uh city approval and appeal process that they would need to navigate, and so how it affect the timeline of a project was a concern.

Um and and so there's some questions out there, um, but what are the potential impacts?

More difficult to, we do believe they are real, um, but really hard to know because in part the the rules and regulations for a tenants of safety plan have not yet been promulgated.

Um we don't know what they are, and um so that would help determine whether or not there's a major impact.

Um again, the with increased costs is a new thing that uh that would need to be done, but the and this is a reoccurring theme.

The post-1995 uh buildings will absorb those costs through time with rent increases where the pre-1995 buildings probably will not be able to.

And this applies to affordable housing as well as market rate housing because they both have to prepare these these uh safety plans, and those are gonna be uh, you know, have some costs associated with them.

Single family too, same thing, but um again, they're they're exempt from rent control.

So um they uh might be able to recoup those additional costs through um to uh with increased rents um, but we're not sure what those additional costs will be because you know no one in Redwood City has ever prepared a safety plan for a a small repair of this nature um so then uh how its impact on regional housing needs um we don't think it's gonna affect new construction um in part because minor repairs and new construction are probably more rare and usually covered by the insurance itself the construction defect litigation and other uh construction defect insurance could cover that and also by the time new construction comes along there would probably be uh there is repair that the protocol for this type of safety plan is probably going to be uh more clear and better understood so uh it it would be worked into the budget uh more seamlessly in the case of new construction so probably not a big impact in terms of new construction um the right of return uh right to return um what um hold on a second I missed I meant to guess so uh what is the the tenant right to return um this this this ordinance would strengthen the city's um existing TPO has has a right of return right to return provisions but uh which essentially this this ordinance would increase the circumstances in which displaced tenants can uh have a right to move back to their original rental units and oftentimes at the same rent that they had when they left uh when it is when that unit is returned if it's returned to the market that's what this it recovers and so this this um ordinance um um would apply more broadly than the existing TPO it would cover owner move in a unit withdrawal it would cover demolition the current ordinance of the city covers substantial renovation um in addition this the right to r to return would not expire so that if someone for example had an owner moved in and and evicted the tenant or withdrew the unit from the market um and then maybe three years later or whatever they decided to return it to the market then the same right to return would apply.

It's important to know for demolition SB 330 already has similar requirements uh for demolition and the city's TPO as mentioned has a right of return for substantial renovation so again there's an incremental impact would be mitigated to some degree the fact that some of these provisions are already covered by existing requirements.

With regard to um withdrawal from the mark rental market so if the if a owner decides to withdraw their rental units from the rental market this ordinance provides some additional protections for tenants.

So if they return that unit to the rental market after two years um that that the landlord could potentially be liable for punitive damages and then after five years um that again the rent would the tenant would be allowed to return and the rent would be capped at a prior level plus allowable increases after 10 years that the landlord could if the tenant requests assuming they're uh aware that it's been returned after 10 years the tenant again has a right to return to that unit.

So what are the potential impacts on the rental market from this right this stronger right to return ordinance.

Well that the long-term obligations to property owners and potential costs again may deter projects that require tenant relocation and it may incentivize uh permanent removal of rental units from the market potentially for example a condo might incentivize some condo conversions where some owners are like this is too onerous we're gonna get out of the rental business and we're gonna cut convert to condos or we're going to um uh sell or or just not rent any longer and for single family so um for post for post-1995 market rate multifamily units um it may reduce the financial incentives for for major rehabs or remodel projects um but rent increases again could mitigate it but again, not the same for pre-1995.

That stock of unit, the 20% of your housing market, will potentially be affected upwards because they cannot um they cannot raise the rent to cover the costs, absent a successful petition, and that is important.

I should have mentioned that in all cases that landlords can uh petition for an upward adjustment in their rent the the ordinance will allows that um to it to s and it submitted the petition to the city to uh to uh justified as justified by it's a fair to so they get a fair market return on their on their investment.

So there is that option um to do that.

Um so single family condos um there may be again some incentive to permanently remove their units from the rental market because of the concern over the obligations from for tenants' right to return to their if they continue to rent their unit.

They may say this is too risky, I'm not gonna do this anymore.

Um, less impact on affordable housing in general because affordable housing pretty much have already, they've they're pretty much uh subject to uh the TPO and state law.

They already are well uh uh they they are they're they're cons of these requirements, and so they probably are are not going to be as affected.

Um it could decrease the in terms of the it picked on impact on regional housing needs allocation could decrease the feasibility of new development, but but we have found that in Redwood City in general, the most um new development is not occurring through um you know one to one or even one to five demolition of residential.

Most new development is not the pacing tons of residential development.

It's occurring on on underutilized commercial sites and even the housing element is um it is mostly on commercial land, it's not on residential land.

So I don't think it's gonna have a huge impact on new production because it's not displacing existing residents.

Now there are a few exceptions to that, obviously.

Um, but and for those exceptions, if someone is doing a residential project and say building eight units and displacing two units, that will certainly increase the cost a lot and may make it more difficult to do it.

But most residence developments are more larger scale than this, and so it's not as big of an impact.

The utility costs pass through.

So what would change here?

Um, the the pro, and this is a this is an important one.

The the um the proposed ordinance prohibits landlords of rent control of rent controlled buildings, not market rate of rent controlled buildings from passing on utility costs um to uh uh to the tenants.

Um typically there's a uh rate it's called rubs, ratio utility building systems.

It's basically a system where it takes the whole building's utility costs and it allocates those costs to individual uh tenants based on the size of the unit, the number of people are occupied the unit.

So it essentially allows the landlord to charge the the tenants for their utility usage on a pro rate pro radar share, proportional to the their demand.

Um, most older buildings in in Redwood City use this rub system or or utility um uh already because they don't they don't have separately metered buildings.

So it's pretty uh ubiquitous practice to use this.

Um and the cost of submetering many of these buildings is is very uh um very high.

Um and you, you know, you you would have to submeter the weed or the the water, the sewer, the uh the trash wouldn't really make sense to submeter that because you'd have a bunch of trash bins and it just wouldn't be usually most trash and multifamily units are all in one big big sub bin.

So it would be it would be very difficult and practical to do so.

Currently, estimate that rubs uh typically is about um the revenue that that is generated from this process.

About 10 percent of the building revenue, so utility bills can run 200 to 300 uh a month, and the the um the owner would no longer be able to charge that, and that would be retroactive to the rent as of 2025.

So that would be an immediate hit on the the landlords of those older buildings that use the system.

Rent would automatically go down by that amount, which would be a pretty big uh hit, one time hit.

Now, once the lease um was um uh expired, you know, they could redo the lease and build that that into the build the utility costs into the new rent, presuming again that they are not under rent control.

So again, this is one of those circumstances where the pre 1995 units would be definitely hit the most and it'd be a really real impact because the rent would go back and they would not be able to increase it up again because of the um they would be also regulated by the um by the rent control provisions.

Again, they could petition for a rent increase, so that option always does exist.

Um so impacts of this uh will we kind of just talked about this would definitely affect the pre-1995 buildings the most because the ones that aren't pre-95 won't even be covered.

It's only the ones that are covered by rent control that would be covered by this uh bill.

So that's the the the impact is almost um predominantly on the pre-1995 buildings.

We don't see it as having a major impact on RENA at all because um new development is covered by Costa Hawkins, so they would not they would be exempt from this requirement.

Um there is another third uh kind of indirect effect from this potential, which is that um that there has been there is some evidence suggests that when rubs has been eliminated that that um utility conservation uh goes down, so there's no longer as much of an incentive to uh not use as much electricity or or water or other factors uh because you don't get you don't those past those costs do not incur to you.

And so there is the potential that uh utility usage would go up after this, and obviously sustained increases in water demand, for example, or wastewater flows uh can increase uh the operating and long term capital costs of the city's um services, which could put pressure on rate customers in general.

So there is an indirect effect that could be considered here from eliminating the rubs.

Um difficult to quantify that, but it is uh it's a real uh factor.

All right, going to hit the cumulative impacts really quickly, and then we will um pass it over to my colleague.

So the first cumulative impacts that we did look at were local government fees and charges and how those have changed, uh increased.

So local housing operators have experienced some recent increases in a variety of government fees and charges, and we did our best to calculate those.

I would note that this table you see here is an update from the table that was in the report.

We did find some errors in the original calculations, which we've corrected here.

So you can cross those to that table out from the original report if you're referring back to that.

Um so as you can see from this hypothetical example, uh cost increases from FY fiscal year 2023 to the current fiscal year about uh uh per unit, about five sixty-nine.

So if a 10 unit building that would be about $5,68 to be overly precise.

And uh that is essentially uh the example of how these local um uh local government fees and charges have increased in in the last you know uh two or three years.

So those are real costs that uh that are in addition to the uh the cost that this ordinance would play, although part of it is built into this because you have the admin fee that Kavi will talk about that's included in this table.

Um so those are our real costs.

Um other market pressures that we would be remiss not to mention because they are significant again, totally outside the control of this ordinance or the city at all, which is things like insurance financing.

Um, so insurance rates have been going up pretty fast.

Uh so property owners have to bear the brunt of this.

Um, they've been according to the Federal Reserve Study, went up by 75% between 2019 and 2024.

A variety of factors are behind that.

Um, so that's an impact that a lot of smaller property owners are absorbing at this time.

Uh financing costs, which is um a big factor if you are trying to finance a repair or rehabilitation of something major, those rates are going up, so the cost of financing have already increased and and so this would be a cumulative impact on on developer or property owners who are trying to do major repairs on their buildings.

And it's important to mention that we did as documented in the prior study, all of this is happening in the context of uh relatively flat or in some cases real declines in rents in Redwood City over the last 10 years.

I know it's hard to believe because inflation has been so high, but when you adjust for inflation rents in Redwood City have actually declined gradually, and that was documented in our last report.

So you have a you have a variety of factors that are kind of would be accumul would be compounding the effect of the ordinance, particularly for pre 1995 owners that if this ordinance was approved, they would then uh be no longer be able to pass on the rent the rent, their utility costs, and those utility costs might go up again, uh, and especially if there's less conservation, um, their rents would be kept at 60% and their and they would go back to the pre-1990 to the sorry, the 2025 rent that uh that they had in 2025.

And meanwhile, uh other these other factors would would be compounding those effects.

So we do think there would be a financial impact on these pre-1995 multifamily buildings, which as we've mentioned before is uh you know 20% of the market and is essentially what we would call the naturally occurring affordable housing in Redwood City.

Um so now we're gonna talk about the impacts to affordable housing, and my colleague Cavia will will talk about that.

Um but before we do, I want to just talk a little bit about your existing affordable housing stock and how it uh you have about 1500 units that are affordable that accounts for about 10% of the rental stock.

So again, this is a meaningful component.

Uh 10% of your rental stock is affordable housing of that amount, um, about 45% 43% wait for about 44% would is pre-1995.

And again, that's important because the affordable housing is subject to the provisions of this of this ordinance.

Uh most ordinances, a lot of ordinances of this type do exempt uh affordable housing, indeed restricted affordable housing because they are already providing affordable housing.

This one does not.

So that those units will be affected by um most because they will not be able to uh increase rents as they would might otherwise increase rents.

Um these units that are affected again are tend to be smaller, they have about 27 units on average per building.

Uh and so absorbing additional costs can be more difficult when you have smaller buildings because you have less revenue from the all the units.

So those are something to consider in the in the in the affordable housing uh market dynamics.

And with that, I'm going to turn to my colleague uh Gabia who has done some additional uh financial feasibility analysis.

Hi, um, before I start, um I did want to say that there are printed copies of the um table that um was corrected for this report.

There's some in the back, and the council hasn't provided with the updated copies on page 25 and 26.

So if you would like to reference it.

Um, and then but getting back to the affordable housing.

Um it's important to understand the financing structure of affordable housing.

It includes both public financing, which are soft loans typically from the city and the county, as well as uh permanent loans, which do need to be paid back.

Um, and when a cash flow on a project tightens, the first thing that is often missed or delayed is the payments, the public lenders.

These are typically soft loans or residual receipt payments.

Um after that, uh the replacement reserves may be reduced.

Replacement reserves are typically used to fund uh capital improvements like roofs, plumbing, electrical systems, HVAC, or structural repairs, and if the pressure continues, critical maintenance on projects are deferred.

After that, um resent resident services that are not mandatory may be stopped.

These may include programs like food pantries that are critical for low-income tenants in these projects.

And finally, after that, when there is nothing that is not operationally critical left to stop in a project, the project may have trouble paying back the debt service, and this would put a project at risk and would require additional subsidy, or uh again, the project can petition to city for a fair return.

Um just with this context in mind, we um did our performer analysis.

Um EPS looked at a hypothetical 101 unit affordable housing project that included 100 affordable units as well as a manager unit, and it was modeled as 100% low-income housing tax credit project or a light tech project, and it tests the impact of the new fees and constrained rent growth on a project's cash flow over time.

Um it's not to say that every affordable housing project will perform exactly this way, but just to illustrate the impact that the ordinance could have.

Scenario two represents a post-1995 affordable housing project.

This project would not be subject to rent stabilization under the ordinance, but it would still be subject to the new program fees and applicable tenant protection requirements.

Scenario three represents a pre-1995 affordable housing project.

This would be the most impacted scenario because it includes both the new fees and the rent stabilization.

One important caveat of this whole analysis is that the tenant protections that Jason explained are not fully quantifiable for the Proforma, because they are one-off instances, and so these scenarios likely understate the full financial impact of this ordinance.

The first layer that I talked about, which is the soft loans to the city and the public lenders, these payments are often made from residual receipts, meaning they are only paid if the project has enough available cash flow.

As you can see in scenarios one, two, and three, these are going down, but scenarios two and three, the baseline and the post-1995 projects do not fully stop making payments within the 40-year timeline that we looked at.

However, scenario three, which is the pre-1995 project, stops making payments in year 17.

This means that the city counting other public lenders would not recover their loans.

The next layer as a project that's financially constrained would be the replacement reserve funding.

For our analysis, we assumed a starting target replacement reserve contribution of 500 per unit, increasing 3.5% to keep up with inflation, and 100% replacement reserve target assumes contribution to that reserve of the full amount.

Again, these are very important to the ongoing operation of a project because they pay for long-term capital improvements.

In scenarios one and two, again, within the 40-year time horizon, the projects are able to fully contribute to the replacement reserve.

However, in scenario three, the project is unable to make the full reserve target by year 18 and fully stops contributing by year 24.

This is where the issues start to move from cash flow into long-term property conditions.

The next layer is resident service funding.

For our analysis, we assumed $1,000 per unit for resident services, increasing 3.5% annually annually again to keep up with CPI.

100% of resident service expenses means the project is able to spend that amount on services.

These can include things like resident engagement, referrals, food access, transportation support, or other services that are not mandatory but do help support housing stability.

The analysis assumes, or as we can see, again, scenario one and two are able to make that full contribution or full for service service expenses throughout the time frame that we looked at.

However, scenario three is stops making 100% of the expenses by year 23 and is spending zero dollars on resident services by year 35.

And the last thing that we're looking at is the debt service coverage ratio, which is a key feasibility metric for this analysis.

The debt service coverage ratio essentially looks at how much net cash there is for a project that can be paid towards the debt service or essentially the mortgage on a project.

Once the debt service coverage ratio falls below one, that means the project is no longer generating enough net operating income to fully cover the debt service.

Um in scenario three, or in scenario three, the pre-1995 affordable housing project, this falls below that threshold at year 35.

And at that point, the project would need additional subsidy, restructuring, or another intervention to avoid default risk.

However, the more pertinent risk to this product to a project would be the inability to resyndicate.

Oftentimes affordable housing projects re-syndicate at the 15 year mark to inject more capital into the project.

And when a project is being re-syndicated, it typically requires a debt service coverage ratio of 1.15.

And as shown on the slide, the scenario three never achieves a debt service coverage ratio of 1.15, and so it would never be eligible to resyndicate.

Overall, the proposed ordinance is not expected to directly prevent Redwood City from meeting its arena contributions, but it could make affordable housing production and preservation more difficult over time.

Higher fees, compliance costs, and operating uncertainty can weaken a project's cash flow, and a weaker cash flow can reduce lender investor confidence, which may make which may make future financing harder to secure.

It also means that projects may need more gap subsidy before they can close and begin construction.

And that again often comes from the city and the county.

The impact is especially relevant for preservation rehabilitation projects where relocation assistance, tenant safety plans, and right to return requirements may add costs or um and timing uncertainty.

And now moving oops, moving on to city finances.

We looked at city finances in the initial 9212 report, but there were certain key things that council wanted us to look at a little bit further.

And so we kind of split this up into three categories the ongoing administration.

This includes recurring staff costs and operations that are needed to run the program year after year, startup costs, which are one-time implementation costs such as onboarding recruitment and such, and then lastly, reserve a reserve funding, which is a financial cushion that could absorb fee shortfalls or cover any unexpected emergency costs.

Importantly, to reiterate, these costs must be covered by program fees, and the proposed ordinance bars general fund contribution.

So the first category, which is the ongoing administration, we looked at these costs, and we found in our initial report that this would likely require between seven to eighteen new full-time staff members with an annual program cost of 3.9 to 10 million.

However, with the additional costs that was uh that we looked at was uh legal services for low-income tenants, which is required by the proposed ordinance.

Um, we estimate that this would be about 1.06 million dollars a year, and that per unit cost comes out to be about $66 per year.

Um, this would raise the ongoing administration cost to five to 11 million and 309 to 685 dollars per unit.

Uh the next cost is a startup cost.

Again, we did look at this in the previous report, but we didn't consider recruitment costs because uh this program administration would likely require new positions.

Um there is uh a recruitment cost that um would likely need to be considered.

We also did not consider how this cost would be uh funded up front because again there would be no fees in this project and it can't be fully funded by the general fund, and so um we uh proposed that this would be uh funded through the general fund and then paid back through an interfund loan over a five-year period.

Um the uh annual loan repayment of this, including the recruitment costs, would come out to be about $9 to $15 a unit, and this would be an additional cost on top of the administration cost for the first five years of the program.

Uh and the last category of costs is reserve funding.

The initial 9212 report did not include a dedicating operating reserve, but supplemental analysis suggests that best practice would be a two-month operating reserve, and this could be funded over two years.

Um, and all in all, this would be an additional 26 to 57 dollars per unit per year for the first two years of the project or of the program.

And this is a look at what that would look like.

Again, these the bars show the midpoint costs.

And as you can see, the first few years have the additional reserve and startup loan repayment costs, and that tapers down as we go year six and beyond.

Again, the costs vary based on level enforcement.

And if we were to look at the maximum level enforcement, the year one costs could be upwards of 11 million dollars.

And yeah.

Can you go back?

I just have one final slide.

Okay.

Um before I read the recommendation, I do want to just point out that there is a revised resolution on the dais and in the back of the room.

We made minor clarifying edits to the ballot question.

Identifying the costs are estimated to be five million to eleven million instead of five to eleven million, um, and that it'll be funded by annual rental property owner fees.

Um, but with that, because both the initial and supplemental 92 report 9212 reports have been presented this evening.

Election code requires the city council to take one of two possible actions.

Um so at this meeting, the council must determine whether to adopt the proposed ordinance without alteration or call for an election to place the proposal on the ballot for voter consideration at the November 3rd, 2026 election.

And that and that concludes the presentation.

Thank you.

Thank you, Alyn and Victor and the EPS team for being here with us tonight and getting us the supplemental report in such a quick timeline.

With that, we will move to public comments.

So I'll pass things over to our city clerk for facilitating public comment.

Thank you, Mayor.

At this time we have 15 speaker cards in for in-person speakers, and if you've joined us by Zoom, please raise your hand at this time to be recognized.

We'll give it a minute for folks to sign up for public comment.

Unless called in the audience if anyone else wants to speak.

Okay, so we've got 16 speaker cards and three speakers on Zoom.

Norman Goldow will be the final speaker on Zoom.

So with 19 comments, Mayor, two minutes is okay.

Okay.

So we'll begin with our in-person speakers.

Uh we'll start with Martha Beatley, who will be followed by Clara Jekyll.

Welcome.

Good evening.

We celebrate the democratic process, which has brought us to this moment.

As residents of Redwood City, we have studied the laws, have had many conversations with many of you and our neighbors, also nonprofit affordable housing developers.

We have identified a solution which resonated with residents, collected signatures across all neighborhoods, and then submitted these signatures to the city and county as required by law.

And we, the people, will have an opportunity to make our preference heard on November 3rd when we vote in favor of rent control.

This is the part of the power of regular citizens, and we celebrate this right to petition.

We believe that in working together and in supporting each other, we will build an even stronger community.

We believe in our ability to bring about meaningful change in our city.

We believe that we have a responsibility to our neighbors, to our shopkeepers, our teachers, mechanics, house cleaners, gardeners, and firefighters to make Redwood City a home where all can thrive.

We can do better in providing safe, affordable, healthy homes for all residents.

The control of escalating rent prices will contribute to this stability for our neighbors.

We are not powerful or wealthy, but we are representatives of the people of Redwood City, and together we will implement a positive change for all of us.

Shelter is a basic human need.

As a society, we must commit to ensuring that all of us have basic needs met.

We stand ready to work together with whomever is willing to build an inclusive community.

We the people choose to support our neighbors and families and work for affordable, healthy housing.

And we believe in our ability to bring positive change to Redwood City.

Thank you.

Thank you.

Our next speaker is Clara Jekyll, who will be followed by Brian Ponty.

Everyone deserves a safe and dignified place to live.

And the main benefit and impact of the fair and affordable housing ordinance is making it possible for Redwood City families, your constituents who are facing severe rent burden to stay in their homes.

That's a huge gain in and of itself.

Stabilizing people's housing in turn also leads to other positive effects, which are sometimes masked when we frame it in terms of the financial implications of rent, but they're really worth taking stock of, for instance.

When essential workers can afford to live where they work, they're not forced to make long commutes to get to their jobs.

That means more time that they can spend with their families, and it means less gridlock on our roads and a notch less air pollution.

When parents can support their families working just one job instead of two or three, they again can spend more time with our children and have a stronger family life.

They also can literally get more sleep, which makes the foundation for better health.

When families can put down roots in one place, their kids can stay in their own schools and not be pulled out and bounced around different school systems.

That means a better education and in the long run, setting them up for more success as they enter adulthood.

When people live in the same place long enough to get to know their neighbors, it makes for stronger social connections and more cohesive neighborhoods.

And when people see a place and a future for themselves in this city, it gives us a sense of belonging and engagement.

And this neighborhood cohesion and engagement are factors that help reduce crime and promote public safety.

When rents stay within the reach of working people's budgets, it also reduces homelessness, which avoids putting people through that traumatic stress, and it reduces the strain on community resources.

When we talk about voting yes on rent control, we're talking about bringing in all of these benefits and more for the people most directly impacted by rent gouging and for everyone who lives and works and spends time in Redwood City.

This measure can be a real cornerstone for the diverse and thriving community that we all want.

Thank you.

Thank you.

Our next speaker is Brian Ponty, who will be followed by Jeff Lamont.

Good evening, Mayor Sabaios, and members of the City Council.

I'm here to ask that you submit this measure to the voters and then work as diligently as possible to explain to them the downside that it presents to the community.

A few of the many problems that this measure presents.

Which will only amplify the financial challenges the city's general fund is facing in the coming years by limiting the growth of the assessed valuation of the properties affected by this measure, which will negatively impact property taxes.

The city's largest single source of general fund revenue.

Implementing this ordinance will consume valuable staff resources that will be better utilized, identifying strategies to bring your general fund revenues and expenditures into balance in the coming years.

Last month, during your budget deliberations, it was clear that you're facing some substantial challenges in your general fund in the coming years.

The tenant protection components of this measure present yet another headwind that will make Redwood City a less desirable place to invest in rental housing, particularly lower-income rental housing, in the coming years, and will only expand the trend, other communities up and down the peninsula are experiencing getting housing projects constructed.

In summary, there is much more to be lost than gained by this measure.

Thank you, and I wish you luck.

Thank you.

Our next speaker is Jeff Lamont, who will be followed by Fernando Pena.

Good evening, Mayor and Council members.

My name is Jeff Lamont.

Thank you for the opportunity of providing the supplemental economic report to the Redwood City community.

Give the importance of housing policy for tenants, small family home housing providers, aka, mom and pop providers, and the broader community, I am very concerned about the negative impacts this measure will have on affordable housing, the city's finances and resources, the cost for free legal services paid for by the city, criminal activity protections, which will make it more difficult for someone to evict a tenant who has been involved in criminal activities, program costs of up to 10 million dollars, plus startup fees of between 320 and $687,000, negative impact on property values and long-term rental housing availability.

A couple of other things that I wanted to point out is that this measure, if it passes, will apply to nonprofits.

And another thing I wanted to point out is that 79% of housing providers are mom and pop operators.

They're not big corporate landlords.

And so I think the pre-1995 housing supply, which is really where a lot of our naturally occurring affordable housing occurs, are going to hit these mom and pop operators pretty hard.

So Redwood City's proposed ordinance goes way beyond the tenant protections that are already in place in California with the passage of AB 1482.

And I urge the city council to place the proposed rental control initiative on the ballot while taking a formal position opposing the measure.

And I'll pose another question for you, too.

I have been uh helping clients buy properties here on the San Mateo Peninsula for many years, almost four decades.

And can you really do you really think that if somebody was thinking about buying units or becoming a housing provider in Redwood City and this measure passes?

Would they seriously consider buying in Redwood City?

Not likely.

They'll probably go to another city that does not have these stringent rent control measures that have been passed.

Thank you for your time.

Thank you.

Our next speaker is Fernando Peña, who will be followed by Deborah Mira Montez.

Good evening, Mayor.

Council members.

My name is Fernando Peña, Government Affairs Director for the San Mateo County Association of Realtors.

Thank you for providing the community with the economic impact report.

The initiative creates an entirely new regulatory structure with significant administrative, legal, and enforcement responsibilities that will be borne by the Redwood City taxpayers and staff, in addition to the housing providers.

The city's analysis identified substantial implementation costs, ongoing program administrative expenses, new staffing requirements, and potential fiscal impacts associated with operations.

The initiative's provisions will also impact residents who own single-family homes, condos, town homes, ADUs, and mobile homes.

The result is a level of uncertainty and confusion and chaos throughout our community.

Housing providers, tenants, affordable housing operators, developers, city staff, and taxpayers will all be navigating a complex new bureaucracy with potentially unintended consequences.

Redwood City deserves housing solutions that bring people together, not policies that create uncertainty, higher costs, and community-wide disruption.

Please place this matter on the ballot so the voters can make an informed decision.

Thank you.

Thank you.

Our next speaker is Deborah Miramontes, who will be followed by Elaine Gilbrick.

I'm a resident and a homeowner in Ribus City, and I just have one question.

If you don't collect enough money from the landlords, where's the money gonna where we're gonna find the funds?

Are taxes gonna go up?

That's my concern.

Where are the funds?

Is there a plan if you don't collect enough money?

That's just my question.

Thank you.

Elaine Gilbrick, who will be followed by Denise.

Welcome.

Good evening, Mayor and members of the city council.

My name's Elaine Gilbreck.

I'm the executive officer of the San Mateo County Association of Realtors.

So one of SAMCAR's SAMCAR is our acronym.

One of our SAMCAR missions is to protect property rights.

This proposed ordinance would do the opposite and arose the property erode property rights of the people that are actually providing the housing.

So I request that you put this issue on the ballot and please take a position to oppose the measure.

Thank you.

Thank you.

Our next speaker is Denise, who will be followed by Robert Pedro.

Good evening, City Council.

I'm here as a property manager in Redwood City.

And I'm here with one of my clients again, a 95-year-old landlord.

And this, as everyone has said, is really hurting the mom and pop landlord community.

My clients have supported the Hispanic community for over five decades in Redwood City.

And this is basically handcuffing and putting us in the red.

As I had mentioned before, some of these older units have costly capital improvements that cost from 20,000 for a deck repair, 20 to 30,000 for a roof.

These are excessive costs that we won't be able to recover if we're capped at less than a 1% rent increase every year.

This 46 page ordinance is also something that creates a legal maze.

We already have many rent control provisions that Newsom has said that this is one of the most one of the strongest packages of renter protections that California has, and putting this on top as another layer is going to hurt the community, and not only that, but we have been helping the Hispanic community with low rents that are 40 to 50% below market rent, not raising rents for six years on certain units, eight years.

We have tenants who have been with us for 20 years for 16 years in other units, and they won't move.

The rents are so low, but we'll never be able to recover our costs.

This is just something that you know is untenable.

We'll be followed by Roe V Antonio.

Good evening, Robert Pedro.

Born and raised here in Redwood City.

I've had a business in the downtown area for over 32 years, and I just wanted to thank the council and city staff for hiring the consultant to get the additional data that was really needed to accurately describe this ballot measure.

Given the two choices that you have tonight of either passing it now or putting it on the ballot measure, I would respectfully request that you put it on the ballot.

An additional request would be that the city consider taking a no or opposed position on the ballot measure.

Um there are some things about this uh measure.

Uh that are very well intended and put forth by some very good people who've done some hard work work to get it to this process.

So I definitely respect their efforts to get it to this point, but unfortunately, it's just bad housing policy.

And I think the data is in the report from the consultant, where it it adds cost to the tenant, it adds cost to the housing provider, it adds cost to the city, which would bleed down to adding cost to the taxpayers.

So it's it basically accomplishes very little.

It doesn't create one new unit of housing, which is what we really need to focus on.

And Redwood City has done such a great job in leading in the state by being one of the first cities to have their housing element approved by HCD, and this type of policy would hinder those efforts moving forward.

So please take an opposed position.

Thank you.

Thank you.

Roe V Antonio will be followed by John Mendez.

Good evening, Mayor and City Council, Rover Antonio with the California Apartment Association.

We are a trade association that represents rental property owners and operators in Redwood City.

I wanted to first thank you for doing your due diligence and ordering the supplemental 9212 report.

Um I think the presentation today from the consultant tells you that that was the right decision.

The supplemental report confirmed that the ballot initiative would create a new permanent city administered regulatory system and an enforcement system governing rental housing.

The findings in the 1912 report are not minor warnings.

The measure affects city resources, housing preservations, and the city's long-term economic health.

The initiative was written outside City Hall by authors that are unknown.

It is not a program that brings stability or city amenity.

Instead, this 46-page initiative brings legal, financial, and economic liability for all Redwood City residents.

All of you have fiduciary responsibility to protect the city resources and the long-term health of your city.

Thank you for your consideration.

Thank you.

Our next speaker is John Mendez, who will be followed by Linda Crows Anderson.

Thank you for your time.

A lot of what I was going to present has already been covered, so I'm just going to cover two points.

We are small landlords in Redwood City.

We operate two small apartment buildings.

When a tenant is a problem in the community, it's the other tenants that suffer the most.

They're the ones that are impacted most immediately.

This ordinance provides such a high evidentiary standard and imposes such potential liability on the landlord, such as treble damages, the obligation to pay for lawyers, harassment claims, etc.

It is such a high evidentiary standard that it makes it almost impossible for me to be able to defend the other tenants in the unit from the troublemaker.

It's easy to think about this ordinance in these anodine descriptions of rent control caps on rent, but there's real human capital at risk here.

And I ask you to consider the other provisions because they are almost more important.

The second thing I want to point out is it's been mentioned a couple of times that landlords can petition for additional amounts.

That's in there for constitutional convenience.

If it were not in there, this ordinance would be unconstitutional.

And you need to look at things uh places like Mountain View.

When I spoke to them, they would tell me landlords have very rarely applied for this additional amount because they feel the organization has been captured and they will not get a fair hearing.

So the idea that there is a safety valve is really questionable.

That's all I have to say.

Thank you for your time.

Thank you.

Our next speaker is Linda Crows Anderson, who will be followed by Michael Pierce.

Good evening, Mayor and Council members.

I'm Linda Croe Sanderson.

I'm the president of the San Mateo County Association of Realtors.

And I want to thank you for providing the supplemental economic impact report to the community.

The report carries significant unintended consequences for small family housing providers, future renters, affordable housing providers, and the city's finances.

The city consultant found that rent control policies can reduce housing supply, discourage reinvestment in existing properties, lower property values, and make it harder to finance future housing development.

Those impacts ultimately hurt the very people that were trying to help by reducing rental opportunities and housing choice.

The report also warns of substantial implementation costs, new staffing requirements, and potential fiscal impacts on Redwood City at a time when resources are already stretched.

Redwood City needs solutions that increase housing supply.

Please place this matter on the ballot so the entire community can weigh the full economic and fiscal consequences identified in the reports before voting on November 3rd.

Thank you.

Thank you.

Next speaker is Michael Pierce, who will be followed by Diana Lopez.

Mayor and City Council members, thank you for the opportunity to speak this evening.

My name is Michael Pierce.

I'm the chairman of the board of the St.

Francis Center, a nonprofit in Redwood City that's partnered with the city on several projects.

We run three buildings in the city of Redwood City, 90 units total across five parcels.

And let me talk about specific impacts this will have on the St.

Francis Center, and not just random numbers.

The loss of rubs.

So the St.

Francis Center chose to lower rents beyond required numbers in order to pass on utility costs so that residents would have an incentive to conserve and work together as a community to keep those costs under control.

The immediate impact in the St.

Francis Center across these five parcels, the 90 units, would be 176,000 of income lost immediately and in perpetuity.

The other thing that wasn't talked about in this report is the impact on property tax abatements.

So we, as a nonprofit, take advantage of the ability to abate our property taxes once we get all of we get up to 90% of our tenants qualifying as low income.

But this ordinance will restrict that ability to have tenants move out when their household income grows above that allowable number, and then we would lose those abatements because the abatements are specific to parcels, not across the portfolio.

And as this as the report stated, most of these pre-1995 units are small buildings.

So we've got 10 unit properties.

So we lose two one tenant doesn't qualify by the time we get the second one, we lose that property tax abatement.

It takes typically three years of processing with the county to get that property tax abatement in effect.

If we lose those abatements across our five parcels in the city of Redwood City, that's over $576,000 of impact on the nonprofit, which then directly impacts our ability to continue providing low-income housing to maintain the properties well, to provide all the other services we provide, our food programs, our clothing programs, our school, et cetera.

Thank you for the opportunity, and I'd urge you to pass this on to the voters and to take a position against this.

Thank you.

Thank you.

Next speaker is Diana Lopez, who will be followed by Iggy Lopez.

Good evening, Mayor and City Councils.

The affordable rent.

Oh, sorry.

Okay.

Good evening, Mayor and Senior Councils.

The affordable rent control was written because renters family are having a hard time finding housing.

Think about single moms that needs to support themselves and their families.

College students that are navigating between finding a job and housing.

It is an IMAR.

While you see profit and how this measure is affecting homeowners, I want to remind you that people, their livelihoods, and dignity matter.

Without affordable rent control measure, your teachers, babysitters, cleaners, and caregivers, which are the hardcore of our society, will now be able to continue to live in Redwood City.

Thank you.

Our next speaker is Iggy Lopez, who will be followed by Anne Palu.

Good evening, Mayor Martinez and Council members.

My name is Iggy Lopez.

I was born and raised in uh Redwood City, and I'm a local realtor, uh, serving the community.

I also I also own rental properties as well as manage uh rental properties in Redwood City.

While we all support housing affordability, uh this rent control control measure could create unintended consequences, consequences as we saw in the report.

Uh it will discourage new rental housing, it will reduce investment in existing properties, uh, and it'll make it harder for uh the small mom and pop housing providers as well uh to keep up with rising insurance taxes, maintenance, and repair costs as well.

Over time, that can mean fewer rental homes, uh less property maintenance and higher rents for new tenants.

Uh, we encourage the council to oppose this measure and support policies that increase housing supply and protect both renters and housing providers.

I urge you to please place this on the ballot and uh, you know, have Redwood City vote for it.

Thank you for your time.

Thank you.

Our next speaker is Anne Pellou.

Welcome.

I'm not prepared because I didn't think I'd talk, but I just want to make sure people understand.

I've been a property manager in the city for 42 years, and I've gone through rent controls.

And this one will take number one.

I read the pro I read through it today, and I was amazed.

In San Francisco, the rent board charges $59 a year to the property owner, and half of that is charged to the tenant.

There's nothing like that here.

And I would say probably with the number of people in the city versus Redwood City, it'd probably be that 700 to 1,000 number because that makes more sense to me.

You know, I mean, if they can do 59 dollars with 600 seven, I mean, pardon me, 800,000 people, you have 80,000, it would be 10 times the expense, I would assume.

And then there was numbers that kind of surprise me.

Like rubs all of a sudden you're gonna give the landlord back and make them pay the utilities.

That's a big fee, and those were low numbers.

I'm not sure if you paid your utility bills lately, but they're probably 300 PGE alone.

Okay.

And lastly, I was concerned about the safety number, and I'm sorry for my voice, but so when a tenant called me and I need to put a water heater in on Christmas, and I have my husband run over to the place and fix it for me.

I'm supposed to come up with a safety tenant, and who do you put that into?

I mean, that was kind of uh what is that all about?

You put together a procedure, you have to go to City Hall, you have to get it approved, do you have to wait till the heater goes out and then submit it?

I'm there's a lot that was missing in all of this, and I really wish you'd talk to somebody in the city or somebody else that has gone through rent control.

You guys, this is pretty tough.

Thanks.

Sorry.

Thank you.

We'll turn now to our Zoom speakers.

We'll start with Evelyn Stuvers, and you may unmute yourself and begin speaking.

You'll have two minutes.

Thank you so much.

Uh my name's Evelyn Stivers, and I am the executive director of Housing Leadership Council of San Mateo County.

Uh, we work with communities and their leaders to create and preserve quality affordable homes.

And we support just cause eviction and rent control, but we have some very big concerns with the way this particular ordinance was created or it was written.

Um I really appreciate the supplemental report uh and it does go into some of the financial challenges.

We still have questions, you know.

We uh have great empathy for and see a need for rent control and just cause eviction in the city, and we have been assured by our partners that things like exemptions to fees would be allowed or rent adjustments, um, would be allowed to be made in circumstances where um it would allow it when uh uh residents' income went up enough that it would allow for another unit to become available.

Anyway, I I have a lot we have considerable questions about how the ordinance would be uh implemented and how the conflicting rules between the ordinance and the funding sources for affordable housing would be ironed out.

And I'm just wondering, I know you can't answer my questions right now, but will there be an opportunity to get those questions answered from the city before we take a position on the on the on the ordinance?

Thank you.

Thank you, Evelyn.

Our next speaker is Elizabeth Madrigal, who will be followed by Norman Golda.

Good evening.

My name is Elizabeth Madrigal, and I am a policy manager with Mitt Penn Housing.

We're a nonprofit developer, manager, and provider of affordable housing and on-site resident services throughout Northern California and Redwood City specifically.

Our portfolio includes 375 homes, which serve over 500 residents with an additional 180 affordable homes in our pipeline.

We'd really like to elevate the impact.

This ordinance will have on deed restricted affordable housing in the city and in turn residents of these homes.

We have provided a letter to the council which describes our concerns in full, but I'll just go over a few of them here.

While this ordinance is well its intentions, we believe that it'll add additional complexity to the regulatory statute of which affordable housing is required to comply.

For a local example, the city of Berkeley passed a similar ordinance in 2024, which brought those living in dedicated affordable housing under the jurisdiction of the rent board.

Fast forward a couple of months later, affordable housing developers are now being subject to the rental housing fee, which has costs that providers tens of thousands of dollars per year paired with rapidly increasing operating costs over the past number of years related to insurance premiums, utilities and staffing.

Cost increases such as these can lead to cutting back on other expenses, whether whether that be building maintenance or onsite resident services staff.

As a result of these difficulties compounding, the city council actually right now is voting on whether to place cleanup amendments to this ordinance on the November ballot.

We really appreciate the supplemental report that you all commissioned as well as your consideration and leadership on this matter.

Thank you.

Our final speaker is Norman Goldow.

Welcome.

Good evening, uh Mayor and fellow Redwood City Council members.

I'm Norman Goldell.

I'm a Redwood City resident and also a local real estate broker.

Um I've owned three, I've fit into mom and pop uh property category.

I own three small five-unit apartment buildings in Rubwood City for many, many years.

On the cutting edge of what they could be.

I've always been fair.

I have many um uh tenants that have uh lived in the apartments for 10 years or more.

Um many uh Spanish uh tenants as well, and have always uh been very fair to everybody.

With measures like these, it it makes more sense to consider um doing a triple net and getting into commercial properties in another city because with additional expenses of this ordinance and continuing costs that won't be able to be passed on, it uh will eventually get to the point where it will not be profitable or uh break-even for me to own these buildings.

So I respectfully request that you um put the ordinance on the ballot measure and uh endorse it with a no vote.

Thank you very much for your time.

Thank you.

And that concludes public comment, Mayor.

Thank you.

Thank you, City Clerk, and thank you to everybody who joined us in person or online to provide public comment.

We will bring this back to council discussion, and I will open it up to my colleagues for any questions of our staff or any thoughts.

We're gonna do Roshamble.

Council Member Sturgen, thank you for getting us started.

Absolutely.

Uh thank you so much, Mayor.

Thank you to our staff and our consultant and to the community both online and in person who spoke and participated.

Um I want to start with some questions.

Uh wanna begin with on the topic of let's see if a hmm a lot of startup costs.

Okay.

So I wanted to zero in on the 680,000 minimum.

Of course, that it would be required to create job descriptions, recruit and hire um on average 11 staff for this new department essentially, right?

And I just wanted to, you know, for comparison's sake, um, mention that over the past three years we've spent.

Oh, sorry, colleagues, I'll talk to you here.

We've spent about 80k a year um, you know, on our marketing budget to recruit PD officers, for example.

Uh as another example, we've spent about a hundred and twenty-five K per year per position uh for executive recruitment uh positions such as the um I think it was the police chief as well as city manager.

So when you break down that 680K by 11 positions per position, that's 61,818 dollars.

It's actually comparable and even less than some of the other positions and recruitments we've done.

The only difference here is that we, you know, didn't ask to hire 11 new staff, right?

That wasn't our decision.

It's it's being um asked of us and of the community.

So I just wanted to kind of put that cost in perspective uh for all of us in this discussion tonight.

Um, and affirm that you know creating job descriptions, hiring uh and recruiting staff is the cost of doing business as a city.

And I think we have agreed over and over and over again, whether it was during our executive management positions, recruitments, or for police officers that we're willing to pay top dollar for top tier talent.

So I wanted to uh preface that uh with that data uh and those comments.

And then getting to some questions here.

Sorry, Elena, no you've been waiting for me there.

Um with the interfund loan, um, it's stated in the supplemental 9212 report that we would have a payment repayment plan back to the city for that over five years, right?

Uh with interest, about three percent or so.

Um what flexibility do we have to delay repayment of that loan uh by say one to two years?

And I'll explain why I'm asking this question just a sec, but I'll I'll turn it over to oh, Beth.

Thank you.

Thank you, Elain.

Thank you, Beth.

Good evening, council members.

Uh Beth Goldberg Finance Director uh here at Redwood City.

Um typically interfund loans are structured to be paid back within five years.

Um, and the analysis done in the 9212 report assumes um annual payments uh each year to pay down uh that loan within the five years.

You could delay payment of, for example, year one, but then you would have to make catch-up payments in years two, three, four, and five in order to pay that off within five years.

But in doing that, you're gonna be incurring more interest on the principal that is outstanding.

So the amount that you're gonna have to pay back, depending on how much you're deferring it, will increase.

Um when contemplating a delay in paying off the loan is uh the opportunity cost to the general fund.

This would be an interfund loan from the general fund.

Um you've heard uh me speak before in um multiple individuals mentioned this this evening that the general fund is in a in a tight position, and so the the length and duration that that uh loan is outstanding extends the period of time when though that money wouldn't be available for other general fund needs.

So those would be the two the two considerations that um that the city would need to consider in in delaying payback of the loan by a year or two.

Thank you.

That's really helpful context.

And as to why I asked the question, well, so in the supplemental 9212 report, we saw, and as staff explained, an increase in the total total fee charged to the landlord per unit per year, because of the addition of the cost of paying back the loan with interest, plus setting aside funds for uh that two-month uh reserve.

And so those two pieces right there, those two additions, well, requirements really, um, are the only wiggle room that we have to gradually increase uh that those fees on landlords.

So if this passes, I want to do all that I can.

We should do all that we can to slow the bleeding and to minimize to gradually um to minimize the impact over time.

I do understand I see Beth's point that it would increase the total cost because of the accruing interest.

However, time and time again with our sewer fees with our uh water service fees uh with our garbage rates, um we have taken the time to delay uh cost increases, knowing that it would cost more in the long run to give property owners more time to prepare for those costs, right?

So that's one suggestion that I want to offer to my colleagues is to consider weigh the pros and cons of delaying uh the loan repayments uh by one to two years.

Um I just want to do all that we can to prepare in the event that this passes.

I don't want us to you know be caught you know red-handed and and in November be fumbling to find to create a plan.

Um so uh I'll pause there.

I have plenty more to say, but I want to give my colleagues more opportunity to speak.

Thank you.

Thank you for getting us started, council member.

And I will open the floor.

I see council member true reaching for light.

Go to you.

Yeah, I uh thank you so much for the presentation and your incredible work uh putting together this very detailed report in in such a short time frame.

I really appreciate it.

Um I was not here last time, so I just wanted to start with some questions.

And um so the first is the table table two on page eight.

Um I noticed that the and again forgive forgive me if if this was already covered last time, but I just want to make sure I really understand.

So the the proposed ordinance would cover uh or apply in the case where there was a breach of leave, or sorry, they that um if there's a breach of lease, uh you can ask a tenant to move out, but it says uh includes additional requirements.

Can you give me a sense of what those additional requirements would be?

Can I pause and get back to you on that?

I need to take a look at that, but maybe we can have uh our city attorney look at that just to I want to make sure we're giving correct information.

Sure, and then um along that same vein.

So for example, um, as I understand it, this ordinance applies to um accessory dwelling units.

So say you know you have aging parents, you have an accessory dwelling unit, uh, but your parents aren't quite ready to move into it yet, so you're renting it out.

Um, and the the person that you're renting to engages in criminal activity.

Um it does it looks like you cannot.

How can I say it that is not necessarily disqualifying?

So say they start you know a brothel or you know whatever something where they're not immediately immediately jailed, but it is criminal activity.

Um is there a pathway by which a homeowner could ask someone to leave, you know, their home.

Yes, uh as you'll know.

You know, um, under the city's TPO and state law, criminal activity is a clearly specified at fault just cause reason.

Uh so but under this ordinance that isn't one, but it's possible depending again on the crime in the situation, it could also be considered you know, breach of lease, committing nuisance um or substantial damage.

I think it would be dependent on both the crime and what is in the lease agreement.

Um, okay.

So it's case by case.

It would be case by case, yes.

Okay, thank you.

That's very helpful.

And then finally, um, just kind of clarifying again, going back to the scenario of which there are many in Redwood City.

I mean, one of our biggest generators of affordable and naturally affordable housing has been ADUs.

Say you have a you know a little in-law unit, you know, waiting for your parents uh you know uh to be able to take care of them.

Say your aging parent moves in, uh, they live there three years and then they pass away.

Um as I understand this, you know.

If you ask someone to move out in order to accommodate, say an aging parent in your home, um that they could come back at any point in the future and get their, you know, say they come back 10, you know, they move out of the area and they come back 10 years later and they can move back in at the same rent they had in 2025.

Do I understand that correctly?

Yes, so the right to return applies to to owner move-ins.

So if you remove the rental unit from the market for an owner move in, but at some point in time later you return that unit to the market uh rental market, you would have to offer the tenant the right to return, um, and that time frame does not expire.

Okay, I had great rent 20 years ago.

I can see the appeal of that.

Um, all right.

Uh, I think let me just make sure that's all my questions just to make sure I can clearly understand, and then as I understand it, this absolutely does apply to um accessory dwelling units in addition to apartments, etc.

Okay, thank you.

That's my questions for now.

Thank you, Councilmember.

Oh, sorry.

I'll just try to want to say a question.

Question, Councilmember.

So for breach of leases, uh the ordinance requires additionally to provide notice to the tenant before they can initiate uh an eviction for lease.

And if there's a substantial violation even after the notice is provided, and then it also provides how the violation can be established.

There are certain requirements that are laid down, and um the second, there's a subsection that talks about sub-leasing and what how sub leasing can be done and what how that violation can be established.

So there are certain additional requirements for the breach of lease.

That's not a not TPO or the state law right now.

Thank you very much.

Okay.

Thank you for that response.

We'll go to Council Member G next.

Thank you, Mayor.

And number one, I want to thank the entire team, Alyn, the EPS team, Patrick, the entire city team.

This was, I think the term was a fire drill to do this within 30 days.

And even then there was still more work to be done, but under some very tight time frames.

I'm going to repeat myself from the last meeting just to make sure everybody understands this initiative was not drafted by the city.

This was brought to the city.

And at the June 8th meeting was the first time the council got to see it in its entirety, all in.

And so we didn't create it here.

This was brought to us through, as one speaker said, the people through a signature gathering process.

And it was drafted by other people that have not stood up here and said they wrote it.

The other thing, and I think the city attorney answered this question that we asked any changes to the ordinance if it were to pass, we can't change it.

It would have to go back before the voters.

And so city attorney, could you just make sure you I got that right?

That's correct.

As we talked about at the last meeting, any changes to this ordinance would need to be approved by the voters.

So as one speaker suggested any exemptions for nonprofit affordable housing developers could not be approved by the city council, it would have to be put back on the ballot for the voters to improve.

That is correct.

There are certain ordinances that are by petition where the petitioners drafted the ordinance to allow the city to do exemptions or to have carve-outs.

This ordinance does not have that.

Thank you.

Thank you for that clarification.

So my apologies to my colleagues and mayor, please cut me off.

I have a whole series of questions.

Again, thank you to the entire team for the supplemental 9212.

I'd like to kind of walk through this a little bit.

And again, Mayor, please feel free to say enough.

Alan, I just want to start with one of your slides, and I think it was slide six in your slide deck.

And the way I read your slide deck on particularly this, the initiative as presented, applies, whether it's rent stabilization or tenant protection TPO to every single residential unit out there except for owner-occupied units.

Am I reading the slide correctly?

Uh correct.

It doesn't matter if it's pre-1995 or post-1995.

Every rental unit residential unit is covered.

Uh the it's covered the the partial the partially versus fully is just signifying it's rent rent stabilization.

Right.

Thank you for making that clarification.

So I'm gonna just jump into some questions.

You know, we've talked about cost impacts, and one of the things that I'll r bring up is what's written in the ordinance that no city general funds would be used.

But city funds are being used right now, and do we have an estimate of what it's taken to get to this point yet?

And that they're coming out of city general fund is what I understand because there's no other fund source.

My back of the envelope estimate between staff time, consultant time, and lost opportunity time, maybe in the range of 100 to 200,000 dollars so far, but and we still have election costs to place it on the ballot, you know, a number of other things, but that's all being paid by general fund right now.

Is that correct?

That is correct.

And Beth, do you know how much we've spent so far?

Do you have a uh approximation?

For the the two uh 9212, the initial supplemental reports is about 50,000.

Um I can't speak to the staff time as we are still kind of in this process, um, but I don't know if Beth, if you have anything else to add, uh nothing more specific to add this evening.

Certainly, if there was a request from council, we could do some estimates of the amount of staff.

I think it would be great in the future to come back and let's just let us know in a memo, you know, how much it's gonna cost to get this to the ballot.

Um, and then in my reading of the initiative, there in my non-legal hat, I think there are probably potential items for legal challenge.

If this were to pass, so to our city attorney, my understanding is the city would have to defend it.

That is correct.

I've been asked if the proponents defend it or the city uh defends it.

It if it is adopted by the voters, it becomes an ordinance of the city that the city must defend.

Are we able to include that in the admin fee, or is that or is that something we can capture back from future admin fees as is Councilmember Stirkin said in the future, can we get it paid back?

I think that would be problematic.

The city can capture, so uh you will recall that the ordinance provides that the general fund may front costs until the landlord fees are then collected, but general fund cannot be used for implementation generally, as well as enforcement.

And so I I don't believe that you can capture those costs, I think it would be problematic.

So the general fund would just have to find pay for whatever legal fees might be required.

That's correct.

We can look at it more closely, but the reality is it's really just um implementation.

So regulations, if this were to be adopted that need to be put in place, the staffing, all of the um the administrative uh onboarding that would need to happen, those are all kind of implementation costs that could be recovered.

Okay, thank you.

Now the the harder questions, these are less directed at any one individual, so I'm just gonna have to look to the team to help answer them.

So on page 11 of the supplemental report, there's a discussion about the temporary relocation for repair and rebuild rehabilitation projects, and the certainty or uncertainty about construction timelines, you know.

I've sat I sit on a board where I had a one elected official say, well, construction schedules are just myths, you know, they're just fiction.

So if there are, and as mentioned in the report, there are a lot of factors outside of the control of the owner, the city, you know, PGE, labor, supply chain, all those fun things that go into a construction project.

How does a property owner financially plan for relocation assistance and financial relocation assistance with an unknown or variable construction timeline?

I think I think that's very challenging.

I don't I don't know.

But that's the burden on the property owner according to the ordinance, isn't it?

Um we did say in the report of that.

Could you please?

Sorry.

I did say, sorry.

We did say in the report that due to this uncertainty, um, landlords may pursue permanent relocation rather than temporary relocation.

And so that would, you know, be a reason that leases would be terminated.

And and how does the property owners fund that or build it into their construction financing?

The relocation costs are known cost, um, and I we can pull that amount back up.

So there is at least some known amount.

Um, you know, it is based on the published fair market rents from HUD.

Uh so those do change annually, but that is a set amount, and we can.

So if I understood correctly in Jeff's language, the choices are unknown temporary relocation for a construction project or permanent relocation.

And to pick one number that's more certain, it's terminate the lease and pay the relocation expense, because that's a known number versus a variable construction timeline.

Yeah, that that's the the potential, yeah, that was noted.

Just want to make sure I understood that.

And then on page 12, it goes on to talk about family owned properties.

I prefer that than mom and pop, to not to have adequate reserves to fund extended temporary location.

How does a lender review property a property's ability to repay financing if these costs are there and they can't recover?

I mean, did we did did I know it was a compressed timeline, but were lenders and funders interviewed during this 30-day process, and how this ordinance might how a funder or finance entity might look at the capacity of the property payback their financing?

In your opinion, Jason, because you do this for a living and your team, if you were to run this performa and the repayment of a loan was suspect, would you fund?

If not, if it was suspect, no.

I mean, it depends, it would all depend on the case by case and whether or not the the uh the owner had adequate reserves and they had adequate equity, and that would so it would be certainly case by case, but I certainly wouldn't.

I don't think a lender would ever fund if they if the repayment was suspect.

You kind of walked into my next question, so you cheated.

Um so for these small property owners, many of them might not have quote adequate reserves, and so how does that play into your answer?

It would definitely create a hardship for them to to finance the repair or uh whatever rehabilitation they were seeking to undertake.

Okay, thank you.

Did you pick up my sheet and look at my next question?

Um you talked about the tenant safety plan in the report, that it's not a common provision, and it adds and amplifies the uncertainty.

Can you do you want to expand on it any more, any further?

I think the word you said is rare.

It's it's rare in the sense that there have been a number of um rent control provisions throughout the Bay Area, and none of them have included that provision.

The only one that we are aware of was in the city of LA, but that's such a bigger situation, bigger city, it's hard to compare it directly to what would happen here.

Um, but we yeah, we weren't able to find another location where that provision was included.

Very good.

And then goes on into page 18 about demolition and new construction, and there's a paragraph that talks about a further feasibility issues, the requirement of return at the prior rent, you know, for new construction, and that it's kind of not exactly known.

And so who pays for that further study?

Is that an eligible recovery from the admin fee, or is that something the city general fund needs to absorb because the ordinance I couldn't find anything in the ordinance that said it additional studies and additional analysis is available from the admin fee?

But then it says no general funds are supposed to be used either.

I'm gonna defer that as me.

I'm sorry, I just read your report, that's all.

So I I'll go ahead and try to answer it.

Um I think you're right.

Uh it's not clear.

Um what we would do in trying to interpret it.

I think arguably that is a cost for the regulation or for the implementation, and so arguably we could, um, but that may well be up for debate and uh could be up for legal debate in the court system.

Well, it goes on further.

State attorney, thank you.

The same paragraph talks about the interaction between the proposed initiative, the right to return framework, replacement unit rent restrictions, successor owner obligations, and cost cost of Hawkins may also require further legal review, and so would that fall in the same bucket of maybe in?

Correct.

Okay.

Again, for those that may be here the first time, we didn't write this.

Um, this is the second, you know, we've had this in our hands since June 8th, and the supplemental we got to what Wednesday is when we got it.

So, Mayor, can I continue?

Okay, thank you.

Jason, in the original report and the supplemental, there's a lot of discussion about the potential repeal of Costa Hawkins.

At a 50,000 foot level, if this was in place and Costa Hawkins was repealed, what would that do?

All our conclusions about the impact on the pre-1995 units would apply to all rental units if potentially it was repealed completely.

But it all depends on how it was repealed.

If it was certain provisions were appealed, it's it's hard to know in advance.

Um but generally our analysis found that the anything that was built after 1995 is protected by Costa Hawkins, so therefore uh if it was repealed in some way, change those provisions, those units would then no longer be protected.

So to use a lens slide here, I just saw that you left it up, all those Xs on partially covered would all move over into fully covered.

Close.

Uh there is one exemption in the proposed ordinance that um units that were constructed within the last 10 years would still be exempt from the rent stabilization.

So there would be that, but essentially, yes, you're correct.

They would all convert to fully covered.

And so that 10 years is that a rolling 10 years?

Yes.

Okay.

So instead of deed restricted affordable housing post-1995 today, we'd be post-what is that, 2016.

2016, yeah, correct.

And then next year would be post-2017 and a rolling ahead.

Okay, thank you.

We've we've have the council in the city for years have said one of our strategic priorities is housing creation, particularly at the affordable housing level, low income, very low-income, extremely low income.

And as somebody said, we've been designed what's the first city that got our housing element approved and designated as a pro-housing city.

The forecast for a new housing pipeline shows a pretty drastic drop in housing creation.

If this measure would be passed, in your opinion, Jason, what would you anticipate the impact be on future new housing creation and affordable housing creation?

It's really hard to evaluate.

Um with Costa Hawkins in place, as you mentioned, then new production would be exempt from what I think is the most uh impactful component of this proposed ordinance, which is the rent control portion of that.

That is probably what um new developers are going to look at the most uh in terms of whether or not it makes sense to develop is whether or not they can recoup their development through rents.

Um but if new development is exempt from the rent control position, that would be um less of an impact on new development.

It would be an impact on potentially on the redevelopment of existing units or the remodeling of existing units and uh maintenance of existing units, and you do have a fair number of existing pre-1995 units that are definitely in need of repair and investment, but those that that does not count towards your renewallocations, so those aren't not going to be new units or just maintaining existing units.

There were some provisions in the proposed ordinance that might affect um new development more than others, and and we kind of lay that out in the report.

I would say, you know, issues related to um of the I'm gonna say some of the costs associated with uh relocation and things along those lines.

Um but again, there are existing protections, for example, SB 330 um already provide some provisions in that regard.

So it the effect on new development is definitely harder to gauge as long as Costa Hawkins may remains in place.

Okay, thank you for that.

Um, you in your presentation, you talk about rubs and the inability for property owners to tax pass along utility utility costs and subsequently utility increases.

For those pre-1995 units.

How long can that go on before something happens negatively?

I mean, we are projecting and we have approved rate increases on sewer, water, solid waste, and you done you've done the math to show potential increase.

But how long can that go on before it becomes not affordable for a property owner to continue to absorb those costs?

It's gonna depend on a case-by-case basis.

It's obviously a big hit for the pre-1995 units.

Um when a lease is ended and a and a tenant vacates the lease, the unit, then they would be able to uh adjust the rent to account for that, but uh in the meantime they would be they would lose debt revenue.

So uh how long it can go on depends on the financial circumstances of an individual um property owner.

It probably can't go on as long as the right to return, perpetuity.

Um, the next question is about the impacts on affordable housing projects and the disproportional impact on smaller, older, affordable properties.

And we've heard from uh HIP Housing, the St.

Francis Center.

That's their business model is to acquire older, typically pre-1995, rental units, repair them, fix them, rehabilitate them, and rent them.

How does that work now with if this ordinance were to pass?

Would they be put out of business?

Would that business model be severely impact to the point it doesn't make financial sense?

That's a tough that's a tough question, too.

We did do a financial analysis uh of a kind of a hypothetical project and found and copy could test the details of the assumptions behind that that it would be more difficult for those units to resindicate, meaning re-get more financing so they could continue their affordability covenants, is definitely most of those units do need to re-syndicate every period of time, 15 years or so, and so when they have lower uh rent growth potential, that would make it more difficult.

But it's hard again, hard to determine in advance.

It really is circumstantial.

It is, and I appreciate your answer, but I'm sorry, your colleague, your name was again Kavi?

Kaviya, thank you.

Thank you for doing your part of the presentation on the debt service covers ratio.

And I'm probably the only council member who serves on a nonprofit housing developer board who has seen the debt service coverage ratio drop below one.

That's not a good place to be, because it is very difficult then to recover from that.

Um, and do you would you like to add anything more to what I just said?

Because I have unfortunately in a position where we've had several properties fall below the debt service cover ratio of one, and even 1.15.

Um, as I said, um, when it falls below 1.0, it means that they're not able to pay their debt service, and they would be in default unless there's additional subsidy where they petition.

Um when the debt service coverage falls below 1.15, it makes it very difficult to resyndicate.

Um, it would also make it very difficult to get new financing in general.

Um, so yeah.

And so to be able to dispose of those that debt, um, the nonprofit board either takes on that debt, because that's the fiduciary responsibility of the board, or they have to make great concessions to be able to re-syndicate or to sell the property at probably at the expense of the tenants.

Am I that's correct?

As we show, as we had our waterfall show, um, they would likely make several concessions, including not contributing fully to replacement reserves and not fully um making resident service expenses that are not mandatory.

Um, those would both be um difficult for a property.

You know, is that what you mean you or the authors of the report said on the long-term financial viability of a project may be at risk?

That's on page 33.

Yes, that that is what we mean.

Okay, thank you.

You know, in the scenario and the I appreciate the appendices and the proformas, that was very helpful for me, particularly on scenario three in the pre-1995 properties.

Was was there any built-in assumptions that you know if someone refinance in the last five years has an interest rate of 6% has a balloon payment coming or is that just kind of straight line from today moving forward.

These are just straight line today moving forward we did not consider any refinancing.

So if someone did financing had inadequate reserves or a balloon payment that would just move up maybe that cliff.

Yes.

And then it appears that implied in the ordinance that and you've shared that public subsidy may be required to make up the difference in the shortfall you know that affordable housing providers are or trying to provide so I might turn to Alyn you and our city manager.

What's the public funding climate look like today for additional subsidies for housing affordable housing.

Is it easy to get is there a lot of it out there.

It's not easy to get and there is definitely more demand than there is funding available already.

Yeah and I attended a meeting last week with the the county of San Mateo I believe there are 18 projects current so I'm talking about new pro not even re syndications 18 projects currently in San Mateo County of which some are in in Robo City that are competing for the measure K funds really is really the big funder of affordable housing.

Now the county can probably and they do a really good job and we're funding some of those deals as as well but if you understand how the tax credit cycles work the county can probably fund three to four each tax credit round.

And so if you just think of which is twice a year so there are projects that will not receive funding for seven or eight years and developers will have to hold those holding costs and whatnot.

So what I'm getting at is the costs have increased the funding sources have have shrunk and uh there used to be regional trusts and whatnot that aren't really there anymore.

I don't want to talk about redevelopment you guys have heard me talk about it but the sources are dry.

So between us and the county it's very you know limited I can't remember the exact number the council disapproved two Elen will know but two large loans of which we know one of those developers will need additional subsidy as well so very constrained.

So if this were to be in place this would just increase the need with a very limited supply of public funding and subsidy available.

Correct as as the performer indicated any any one of those project performer if you lay our if you layer on anything all the developers going to do is if it's in Roman city they're gonna come talk to a Lynn and say do you have the money to make it up or the county and if they don't then they have to just wait until the cycles go through which as you know the costs go up and it's kind of you anyway.

Correct.

And mayor thank you one more bucket of questions about impact on city finances and particularly the administrative fee.

You know I think we heard from our city attorney not all legal fees are included in the analysis that you prepared I mean the cost to defend the cost for future studies there's no line item in your analysis in trying to estimate what the admin fee is going to be per unit is that correct?

We did include legal costs but specifically for implementation so but not for future studies and lot not for defense of any potential not for litigation correct yes.

And did was the assumption that 90% of the property owners would pay the fee or or is that 100% we again hard to predict what you know compliance will look like based on kind of our business license compliance data we have about a 2% noncompliance rate um and EPS did survey other cities um that do have rent control and their fees and noncompliance was around eight percent so you know you can maybe assume noncompliance being anywhere from two to eight percent um that is partially why we do have the reserve in place in case we do run into issues where we haven't collected enough revenue um to kind of weather those shortfalls but um we would potentially need to spend additional costs to do further compliance enforcement in collecting those fees and you kind of peaked also like Jason on my sheet here because I didn't think two month reserve is enough given that staff you know some of the things I've talked about is staff turnover in here included in fees no it's not so that's why I say two months probably is not an adequate reserve considering and litigation staff turnover um ninety eight percent compliance is probably a little bit high and even if you got 90% I don't think two two month reserve is the right numbers more like three or four months.

So those are my thoughts but the other side of it and to council members circumstance inquiries one of the biggest differences the clause in the ordinance is no city general fund to be used.

And so that means space that means benefits that means indirect IT HR all that has to be fully recharged and expense to implementation here.

I think Councilmember Chu and I are the only ones that have worked on a university research university where those indirects are fully charged to a department or to a grantee she's smiling because at the university that indirect overhead is about 50% if not 55% which is probably normal when I was on staff at the University of California Berkeley I was a fully recharged unit.

Salaries benefits rent utilities everything was in my cost.

And so by com we're not comparing apples to apples we're comparing apples to grapefruits because those indirect costs need to be absorbed by the program by the way the written the ordinance is written that means no office space no utilities no water and finance HR IT need to be costed into the program implementation.

Mayor and counsel thank you for your indulgence and let me ask some questions.

Thank you council member G for the questions.

Councilmember Padio okay thank you let me go to my notes.

Some of my questions have been covered by my colleagues so thank you but I will have to go now I I have plenty of my own now so I'll pass the mic when I'm ready let's see okay um where do I want to start of course thank you all for the work and the very quick turnaround it but again I I said this on our last meeting it is so important for voters to have information and the last thing I want them to be is misinformed when um it comes to something that affects our entire community.

Okay.

Okay so my first thing I wanted to look at together for costs I have a lot of notes.

Okay fantastic let me go there page sixteen so let me see page sixteen so I think it's six of two fourteen if everyone wants to join me see.

Am I on the right page?

So if I wrote it down wrong page 16 let me see okay maybe I wrote it down on the wrong notes on the wrong 16 okay I wrote down that the report suggests that the initial fee rates set by the proposed ordinance would cover 13 to 32% of the program cost.

I now I've lost my pay.

Can someone help maybe I've is that correct, Alyn?

Yeah.

With the kind of ball the range of 84 to 120 per unit, which is what's in the proposed ordinance um with approximately 16,000 rental units.

I think it ends up being about just under $2 million dollars uh in in fees that would be collected.

But as noted, we're projecting costs to be anywhere from 5 million to 11 million, depending on enforcement.

Okay, so I don't even think we have to get out calculators or write a lot of things to know that some numbers and other numbers just don't I'm it's really hard for me in my mind, and I guess what I find is a little, I don't want to say disingenuous, but to say that something on its face has to completely come from the general fund, but then everything I hear in that cannot come from the general fund, I'm sorry.

To tell the voters that it's fully funded, it that you know that it that makes a voter feel like, oh, this isn't gonna affect my taxes.

This isn't, you know, this is a self-funding thing when everything we're seeing on here shows that that's not possible.

It's not possible.

And when we even look at a 13 to 32 percent recovery, and to council member G's point, the amount of money and time that hasn't even been calculated to just get our heads around this, this initiative that puts so much responsibility and liability on the city and on us as a council.

There's one issue that stuck out to me and made me feel very uncomfortable, and I wanna go over it.

Let's see.

I think it's on page, it's about the appeals, which I asked questions about at the last meeting.

Because everything that we need to know is that when lawyers are involved, I I question those estimates because I know how valuable legal representation is, and that that line item can grow.

Um, but what I'm really concerned about is that I fear that city council is being put in a position to be a judge in an appeals process.

So I've looked at Berkeley, I've looked at East Palo Alto.

I looked at the city of San Jose in terms of their rent control programs, and everything goes to a housing director, a city manager, but the way this is written, it comes to all seven of us.

And to me, that is out of scope, I think for us.

Um for us to play mediator between with any for every appeal that comes in.

I don't even, I don't know if we've even, I would like us as a council to acknowledge that this involves the seven of us and turns us into potentially an appeals court.

Um, and we can look at the wording together and clarify Alyn if I'm wrong, but does that now put us as if they appeal the I don't know what the formal name of the mediator or the hearing administrator does that appeal not come to city council?

That is correct.

Okay, so that that I have not heard of as a common practice anywhere in my own independent research and in anything staff gave us to read.

So I think I I don't feel qualified, nor do I want to get involved with the dealings at that level.

I think we can all agree that we don't we want people to not be evicted for the wrong reasons, but I hear we have people coming up and saying that in this I had some questions for legal that crimes don't necessarily justify an eviction.

And I think uh council member Chu spoke to this as well, and I have some questions about that as well in terms of your property rights, and just I think someone spoke about protecting other tenants.

Sometimes property managers are, you know, they're that person that comes in and mediates.

A neighbor complains about another neighbor, they don't feel comfortable, but they go to them.

And some of these things, the burden of proof is put on them to document things that may be hard.

Um, and then you unintendedly, you might have your good renters who move out because it seems the system is catering to a bad neighbor.

Um so I think those things are well-meaning.

It's it's in the details, it really is in the details, and I have some concerns about that.

There was also a section that said about not honoring court orders.

Alin, can you talk more about that section, please?

Let me take a look at that first and then get back to you.

Okay.

Thank you.

Because I feel very uncomfortable, and I want to maybe perhaps ask the city attorney.

Did anyone the section that said that honoring government court orders was not covered in terms of eviction?

So I I feel like it's in terms of stepping on toes and scopes and just adding to an overly complicated process, there are some very concerning things for me.

So I would like some clarification on that.

I I I think I know what you're speaking to now.

Sorry.

So in the city's tenant protection ordinance, what's considered an allowable no fault is if a landlord is complying with a government order.

And in those situations, the landlord doesn't have to pay the tenant relocation assistance.

It's not the fault of the tenant, but this landlord is complying with the government order in the proposed ordinance.

Okay, thank you.

So that is something I think to be considered.

Let's see.

Not these evil corporations.

I know I feel, and I've said this at the last meeting, you know, just because someone is incorporated and has an LLC does not necessarily mean they are uh, you know, 50 plus employees, giant corporation.

It could be a husband and wife who's retired and just doesn't want to lose their house if things go wrong.

So I don't think we should necessarily penalize people who or demonize them or who have actually been doing really good work.

Um we've heard no numerous people speak to how they provide lower rent.

Uh, and I don't want us to think that we're gonna do anything that would discourage our housing production and hurt the people who have been providing it to our community.

So I think these things, and I I'm certainly I have issues with the rubs, the owners absorbing these costs.

I don't think we have no, just the environmental aspects of that, I think it creates financial barriers, but behavioral concerns.

When I I've had friends, I've we've all we've done maybe I've done dorm living or it's all included.

I know people who take an hour long shower.

I know people who leave their air conditioning on while they're gone because they don't feel it.

So I do think, in terms of the environment, and as we all know, water is a precious resource that we don't have enough of and we're constantly fighting over.

I don't support anything that discourages us to do right by our environment and reduce our consumption.

So I think that this formula encourages people to do better.

So taking this away, I think is another blow to the smaller mom and pops, and they don't have cash reserves to absorb all of these hits, and they will go away.

And to people's point, why would would you want?

Would you want to put your ADU on the market if you knew that you'll never be able to take it off again?

Or would you not do that?

So it's frustrating because I think the city of Redwood City has done so much and been at the forefront of housing and the push to make ADUs easier, and now it almost seems like this initiative is almost counterproductive or taking away back stepping from some of those that work.

And I really hope that we look big picture about what we're doing.

I mean, in terms of the work that everyone put in for the business license, and I I really it hurts me to see our affordable housing providers being hit like this because it doesn't sound good to me to lose wraparound services.

Maybe some people use they use that transportation to get to their job, but now they can't provide that.

I mean, unintended consequences are so many, and the things that I hear that I've written down over and over again are case by case.

And when I hear case by case, I hear errors and expensive.

I hear that that's not well, you just can't.

When everything is case by case, you're going to have problems.

This the fact that every that it's well intended, but I don't think, in reality, and when I think of our fiduciary responsibilities, I I don't see the cost recovery.

I don't see how this doesn't hit the general fund.

I don't see how this doesn't hurt all taxpayers.

I just don't see how this is can be funded the way it is written.

Um, those are some of my problems.

I'm trying to see how the math could work, but I I fear that it would just discourage housing production and repairs to the housing that we currently have.

Um I think I wrote down this is really important to note that Redwood City has provided 17.3 million dollars in funding for affordable housing.

54% of that was for projects before 1995.

I mean that I just I want to commend city staff and our community because I think we are a community who cares, but I just think it is also fair to consider who does this burden really fall on.

We all know that there's a problem.

We want more housing.

Everyone wants to be better, but I think this is very short-sighted and it's punishing, and it will hurt some of those vulnerable people in our community that we actually that we want to protect.

Those are my thoughts for now.

Thank you.

Thank you, Councilmember.

We'll go to Councilmember Howard.

Thank you, Mayor.

Um, first, I'd like to thank my council colleagues for their great questions, and uh and and for staff too, and in trying to answer some of the questions.

But I I think it's important to remind everyone and state once again what councilmember G said, uh, this is not legislation that was brought by the city.

We did not write this, we did not bring it forward.

This is a the proponent of the measure wrote the legislation, gathered the signatures, and I know their intent is a good one.

They want to provide housing for as many as we can in in communities, and I get that.

However, um I hope that answers that question because someone else said, well, how do you plan to implement it?

We're just seeing this for the first time this last month.

Uh, we we don't have a plan.

Okay, I mean, let's be honest.

We've never done this before.

We're not a regulatory housing agency.

Never have been.

So we will have to hire a lot of staff in order to implement this if it should pass.

So I I want to make that clear that we can't make changes and then send it to an election in November.

We cannot do that legally.

All we can do is one of two choices, and that is approve it as is that was presented this evening, or send it to the election for the voters to vote on in November.

And that's all we can make that dis that's the decision we're being asked to make tonight.

So excuse me.

So I was going to say, I I'm not saying that as an excuse.

It's just I want people to understand that we really do want to create more housing in Redwood City.

We really do want to make it easier for people to build or rent in Redwood City.

Councilmember Howard, I'm sorry to interrupt, but to our our audience, I'm having a little trouble hearing Councilmember Howard, and I want to make sure that we get her points.

Um, so if we can just quiet it down a little bit while we finish council discussion, that'd be appreciated.

Councilmember Howard.

Thank you.

I guess what I was about to say, and uh I'll give my reasoning, this is not the answer.

This legislation is not the answer.

I think the unintended consequences will be momentous.

The cost to owners, to property owners.

I mean, this statistic startled me, and I'm glad I I found it.

Thank you to staff and thank you to EPS for all the additional information you gave us.

I've been learning, and I'm going to keep reading the report because I keep picking up new tidbits of information that really are helpful.

That the survey was done that a majority of rental units that have one to ten units.

79% are family owned or small business owned.

79%.

So who do you think this legislation is going to impact the most?

People who probably can't afford to do this right now.

And you heard from several of those people this evening.

They're already keeping their rents artificially low because they care.

I believe that.

I really believe that.

I know three right now.

It's exactly what they're doing.

But this is going to, I think, push, push it too far.

And what I don't want to see happening is these same good people decide I can't do this anymore.

I'm going condo or I'm selling it.

I could see that happening.

It's already happening in San Francisco in New York.

I grew up in New York.

I know a lot about rent control.

I know it doesn't work.

But anyway, that being said.

So I did want to thank the staff again and thank EPS.

I think that this has been really helpful for us to kind of understand what this is that we're about to embark on.

So I did.

Let me see here.

Um I read about unintended consequence.

We're talking about the impact.

Will we be able to produce new affordable units in Redwood City?

Not likely.

Not with this.

The impact on cities' finances to administrate this burdensome program, which will include legal fees and representation for tenants.

That's an open-ended cost.

We have no idea what that might cost.

We cannot use general fund after a certain period of time.

That cost will have to be borne by the very people we're being we're asking to keep rents artificially low.

And that cost is unsure of.

And that's not what we want.

That's not what we want.

So I feel this legislation is very restrictive, very far-reaching, a financial burden to more than just the city, and it won't produce the housing that you think it will.

And it'll be a less desirable place to live rather than a more desirable place to live.

So the proponents have given us this measure.

I can't support adopting it this evening.

I can't do that as is.

What I will support is sending it to the voters in November for a vote.

I hope and pray, people of Redwood City, anyone who votes, please read all the city material.

Read read this economic report analysis.

It's really an eye-opener.

Read everything you can get your hands on.

I know myself, I'll be speaking to people because I can't support it in November.

I just feel that it will not serve the purposes of producing good housing, stable housing in Redwood City.

But that's what I will support tonight.

And as personal, my personal, I will not support this measure.

But like I said, I am obligated legally to send it to the voters so they can weigh in on this.

But I hope we all do our homework and don't vote blindly for something we don't understand.

Thank you.

Thank you, Councilmember Howard.

Go to Councilmember Chu and then the Vice Mayor.

So again, thank you for all your work on this.

And you know, I think tonight uh there's been a lot of talk about how this ordinance will protect potentially impact, you know, property owners, mom and pop, you know, or family-owned uh family, small family landlords, but I wanted to talk about how it will impact renters.

So, you know, I am an unequivocally pro-renter.

Half of our city, uh, about approximately half of our city are renters.

Uh I rented from the age of 18 until I was 45.

We bought our first home when I was 45, and I moved to these high, you know, I moved immediately from a farm to high cost coastal metros.

I didn't have connections, I didn't have an IPO, I didn't have you know family resources, and so I was renting on the open market, and so I am immensely sympathetic to the um to the frustration and the fear and the the pressure of paying, you know, half your income, you know, more than half your income in rent.

Um I share uh the authors of this uh ordinance's um assessment of the symptoms.

I do not share their assessment of the condition that we're suffering from or the cure.

We have decades uh of evidence on rent control.

If we want to understand what happens with rent control, we just have to look uh at San Francisco rent control and particularly combined with very onerous uh requirements.

Um, San Francisco is among the most expensive and dysfunctional housing markets in the country.

Um, and what happens with rent control is over time, it's a benefit that accrues to the well connected and the well-resourced.

If you do an overlay of income by geographic area, you know, that you know, the census tracked income, and where there's the most rent control, the wealthiest parts of the city have the most rent control.

So the first thing is this stated goal of this ordinance is to help tenants.

I believe it will have a very strong negative impact on individuals who rent.

Um, we do know what makes housing affordable, we do know what gives tenants options, and we do know what gives tenants power, and that's abundant supply.

When there's lots of housing and lots of options, if you don't like where you're living and somebody down the streets offering a better deal, you can you can threaten your landlord with moving, and then they have to negotiate with you.

Um, and in fact, as you know, our city built a lot of housing downtown.

Um, you know, I have a little suite in my home.

We have a housemate, she uses my car, we pay for all her utilities, but she lives with us in a little area of our home.

It it went from taking half an hour to rent that unit to taking six weeks, and I had to offer more and half the garden and be the gardener and all these things.

So more housing gives renters power.

Um, this ordinance says nothing about that.

What it does do is penalizes and encumbers the production of naturally affordable housing and expressly deed restricted housing.

We have literally affordable housing, deed-restricted housing suppliers coming to us saying this is going to make us insolvent.

This is going to make us unable to serve the community that we've been serving for decades.

That is a very seriously flawed untenable ordinance.

And I think that this ordinance also creates an incentive structure that makes it very um unappealing or scary to rent to somebody who's an edge case.

So say, you know, somebody has a history of, you know, a misdemeanor when they were 20, and they're now 30 or 25 and they have a PhD and they're fine.

Under normal circumstances, yeah, sure, you might take a chance on somebody like that.

According to Table 2, the commitment to that renter is stronger than most marriages.

If that renter engages in criminal activity, you cannot break up with them.

Even if you move your mother-in-law into your in-law in your own home on your own property, they can your ex can come back at any time and get the same rent they had 10 years ago.

I don't think that that's a reasonable condition of renting.

Because so much naturally affordable housing are ADUs in our city, that creates a powerful disincentive to rent to anybody who has anything less than perfect credit, who has anything less than a perfect background check, or you know, anything less than perfect.

Um, and it will make it much harder for low-income renters or uh renters without perfect credit to obtain housing.

Um I believe, you know, and the the biggest problem with this is it massively disincentivizes the production of additional housing, which is really what's going to bring down prices and give renters power and negotiating power.

Um, so for a number of reasons, I cannot support this ordinance uh legally, you know, uh to the commenters' point.

I believe in democracy.

You know, the the um authors of this ordinance got the sufficient number of signatures, we are compelled by law to send it to the voters.

I you know will be supporting that because that's that's what we need to do.

Um, but I would like to formally oppose this ordinance because I believe it will really hurt the people it is most intended to help.

And I'll leave my comments there.

Thank you, Councilmember Chu will go to Vice Mayor.

Mayor, I just want to say I don't have any questions for the excellent staff and the excellent consultants.

I just have comments, but I defer to the rest of my colleagues who started with questions, in case they want to give comments.

All right, so here are my comments.

I as I started again.

I want to, Alyn, Jason, EPS, I want to thank you all and the rest of the staff.

Thank you so much for um and my colleagues for this robust conversation.

Um I want to start by saying that you know, I support the political process.

We must send this to the voters or adopt it outright.

I am not in support of adopting this outright for the reasons stated by everyone sitting here today and all the commenters and the reasons expressed in both reports and by my colleagues.

I do support sending this to the voters.

Um I believe in democracy.

And as my colleagues have stated, we must make sure that the voters know what they're looking at.

Um I want to note that in Redwood City, we've never denied an affordable housing provider to come here if they wanted to, and thank you that for that statistic that we spent 17 million dollars of our own money to support affordable housing projects.

We're a housing leader in the county and in the state.

I just it bears repeating.

We were one of only we were two percent that got their housing needs assessment in on time by state law.

We have always been a housing leader, we have always will be a housing leader, and we did not create this.

This came from outside.

We've only seen it since June.

And it hasn't been stated before, but it's going to be even longer because correct me if I'm wrong, attorney, we are going to have to issue regulations as to how to implement this 44-page ordinance.

Is that correct, attorney?

That is correct.

That's going to be one of the first tasks if this is adopted for the council for the city to issue regulations.

And those ordinances, that those regulations might be 100, 200 pages.

We don't know.

Unknown, I don't know if I don't know that any of us have looked at maybe what other cities have done that have these types of ordinances as far as regulations go.

It's problematic to me that everything is rolled back to October of 2025.

That seems random and capricious to me.

I want to thank the housing and human concerns committee of Redwood City.

We passed an ordinance that was carefully crafted.

After years of study and community outreach, we passed an ordinance five or six months ago that dealt with the right of return and that that dealt with just cause eviction and provided security and assurance for renters and landlords.

It was a compromise that was crafted by the community over many much outreach.

By contrast, this is something that comes from the outside, it's not organic from within my community our community, and that concerns me, and I hope that our voters in November that they realize that this isn't this isn't from our community.

He sounded like he did.

When tenants who misbehave, then what you're really doing is punishing all the other tenants.

So I'm concerned about that.

I'm very proud that in Redwood City we have Project Sentinel, we have the Legal aid Society, we have housing clinics.

I want to assure our renters if you go to Redwood City's web page, which is www.redwoodcity.org, and you type in tenant and landlord resources, that there are many, many, many tenant and landlord resources already that are provided by Redwood City because we care.

And um the phone number is 650 517 891.

So any tenant, any landlord that needs help, the city already provides services exactly for you.

Um 40% of our housing stock was built pre-1995.

Um again, it concerns me that that's a lot of small businesses, that's HIPAA housing has has come out and has grave concerns about this ordinance.

Um I admire hip housing, and um if they're concerned, I'm concerned.

Um another one, Ann, um, you you commented you you gave this uh scenario that you got a phone call, you're your landlord, you got a phone call at midnight or at night on Christmas Eve or New Year's Eve, I can't remember what you said, and it was a um uh water heater that had malfunctioned, and you were worried that with this new ordinance you you're not sure what would happen.

Would you what did happen is that your husband went on New Year's Eve or Christmas Eve or whatever and got a new heat pump or a new water heater and installed it.

End of story, but your current concern that if that happens next year or two years from now, you might first have to uh go to the city and ask what a safety plan is, and then implement a safety plan, and then what happens to your tenant if they don't have a water heater, you're not sure.

And we're not sure either, and and I guess we'd have to write regulations, but that concerns me.

Um the fact that older buildings and 40% of our rental stock is older buildings, does not have separately metered utilities, and under this ordinance, it's really concerns me that under this ordinance, too bad, so sad, the the landlords cannot can no longer pass that cost on to their tenants, they have to pay that themselves.

I think it was St.

Francis that said that that could be dozens of thousands of dollars for them.

St.

Francis also said that um, and we thank St.

Francis, they're an affordable housing provider, a good citizen in our city, one of many that are helping the underserved and those who need help.

And and what I heard Mr.

Anderson say is that if in one of their buildings one of their tenants happens to, because they work hard and they're doing well, they get a raise at work, which is something we should all celebrate, that that could not only disqualify that one tenant from government subsidies and and the affordable housing complex of how you support affordable housing, but it could disqualify the entire building, and that that could be a hit to Mr.

Anderson and St.

Francis of $500,000.

That concerns me because I care about renters and I care about low-income renters.

So these are concerns I've learned a lot tonight, and I can only hope that our voters in November will take the time to educate themselves about what is entailed with this ordinance.

Again, the fact that we were told that smaller units have a harder time absorbing the cost because they can't um average it over.

They have fewer units to average it over.

And as Kate Comfort Harr, who's the CEO of HIP Housing said, she hears everyone saying, oh, this is going to harm huge corporations.

This is gonna hit huge corporations where they live.

And she said that uh that's just not true.

It's it's gonna hit mom and pop, small business owners.

Um I'm also really concerned, and I mentioned this before, that we didn't write this ordinance, we didn't ask for this ordinance.

But if the voters of Redwood City pass it, which is that's what democracy is, that the city of Redwood City will have to defend this ordinance in a court of law.

And lawyers are expensive, lawsuits are expensive, legal counsel is expensive, and we can't use the general fund for this.

This is going to cost the landlords more in fees.

So that concerns me because if lore landlords have too much expenditure and fees, then tenants have higher rents, so I'm strongly in support of sending this to the voters.

I have grave concerns about the implications of this ordinance and the regulations to implement this ordinance, and I hope that the voters uh avail themselves of information when they vote, but I will support putting it on the ballot.

Thank you.

Thank you, Vice Mayor.

We'll go to Councilmember Sturgen.

Thank you.

So starting with criminal activity, I'm just gonna go through the topics I've heard tonight.

Um I wanted to just clarify so on page eight, um, that table two that was referenced by one of my colleagues.

So it states that at fault just causes um criminal activity is not considered an at fault just cause, except possibly could be considered a breach of lease, committing nuisance or substantial damage.

So that's that's a lot right there.

Um a lot of grounds for an eviction.

I was wondering, Alyn, could you just if you were able to clarify what exactly does that mean in the context of this conversation?

Because I think there may be a little bit of a misunderstanding.

So under the city's tenant protection ordinance and state law, we have uh listed criminal activity as a specific at fault just cause.

There is not a similar one in the proposed ordinance, um, but again, it would depend on what the criminal activity is and the circumstances.

Um if that activity is also in violation of the lease, then that landlord could terminate for a breach of lease rather than criminal activity or uh committing nuisance, but it's not a specific at fault cause listed in the ordinance.

Thank you.

So just to repeat something, I think I heard you say if the activity violates the lease, the landlord could terminate the lease.

They could terminate for breach of lease, correct.

Thank you so much.

Okay.

Um, so landlords still have that that right and that power.

Correct.

Okay.

Thank you.

And is it, do we know if the activity is taking place on site or off-site or either?

I mean, it's kind of hard to know, I guess.

I'll let our city state attorney answer that one.

Thank you.

I guess it depends on how it's defined in the lease if if it's a breach of lease.

Right.

Right now, the TPO, the 10 protection ordinance clearly defines criminal activity on or off property.

So that's already covered, so it all sort of depend on the activity and the lease.

Thank you.

That's exactly what I thought.

And so again, just to reaffirm what I think we all just heard is that if there's criminal activity happening on site in one of your units for any of the landlords in the audience or online, still got 20.

Is the right for you to terminate the lease if the activity breaches the lease.

I'm saying that very elegantly, I apologize.

If I may, Councilman, Chicken.

I do want to make sure that we're clear about it.

So you know, right now today, under state law and under the local laws, criminal activity is a grounds for termination.

This ordinance no longer would provide that.

And so it would really just have to be a private, you know, negotiation that happens between a landlord and a tenant.

Any lease that is currently in place that may have relied on state law may not have that language.

But uh, you know, we don't get involved in any leases or any lease negotiations.

So we don't know what is typically in a lease agreement.

If a lease has that language, then a landlord can um can rely on that.

But but we're not saying leases have that.

Um and so I do want to be very clear about that.

It that would be the only way that a landlord could um remove a tenant for criminal activity.

Thank you.

That's a very important point.

Thank you.

And I want to add then, um, that I I know California Apartment Association, I'm not sure if Robie's still here.

Hey Ruby, um, always does a great edge, uh a great job of um educating property owners of their rights and providing template leases as well that I imagine would be updated um to reflect any new legislation that is adopted in River City.

Um I don't think you can respond, I'm so sorry.

Um, but you know, blink twice if I'm saying the right thing.

No, I'm joking.

Um, but but that's really important clarification.

I appreciate the city attorney for clarifying that only in some cases might your lease agreement cover you in this case.

Okay.

Uh so moving on from that, um, wanted to talk about renovations, okay.

And we yeah, I heard from some of the members of the public about the costly capital improvements.

Um we heard about the cost of replacing a water heater.

Um, and that landlords may not have adequate reserves to cover the cost of rehabilitation.

And so something I suggested, and I looked this up, um, three years ago at this point, was creating a fund to share the cost of renovations with income qualified uh small mom and pop landlords.

And it's it's been three years, and we've had several conversations at this point about how to address renovations and the costliness of thereof.

So I just want to raise that once again in the hopes that springing forward from this conversation, we can actually talk about practical measures to address landlords' needs as well as tenants.

I've heard a lot of simply just concerns about this measure, and that is valid, and we need it to take the time to go with a fine-tooth comb through this measure to be able to educate the community who's here tonight and later this year about it.

But the next step that we need to take is to prepare to create a plan for how we, if this measure passes, are going to minimize, and I said this earlier to you know slow the bleeding, right?

So I hope that there's interest on the part of my colleagues to discuss some type of fund as we have for utilities.

As an example of utility, the UREP, the utility rate assistance fund.

Okay, then moving on to gosh, I'm starting to get tired, folks.

Let me just more caffeine.

Okay.

Impact on new development.

Okay.

So I wanted to clarify.

I think uh Jason, you had said that most new construction would be exempt from rent control per Costa Hawkins, right?

And then there was a conversation about Costa Hawkins, and I think at this point, how many propositions have there been to try to repeal it?

Probably three at this point in the last 10 years, and each one has failed.

So I think it is important for us to be prepared.

However, that seems very unlikely.

Um then in terms of relocation assistance, okay.

So let's see, I have here in my notes that we can offer permanent but not temporarily.

Okay.

Okay.

Apologies, there's just so much to get through, folks.

Okay.

So on page 44 of the report, it assumes it it stated that we would be on the hook for legal services, right?

For paying for legal services for tenants.

And it specifies that it would be provided by a consultant.

Do we know who that would be?

Um if this if this is, you know, approved, we would follow our normal procurement processes and um identify a third party to provide those legal services.

So we don't know who that would be yet.

Okay, thank you.

So we would do an RP process you said.

Okay.

That's really helpful.

Um because when I saw that, I thought to myself, if we're gonna hire a consultant, that could be very costly.

And there's the the figure is is specified there, and it's what well over a million or something like that.

Well, that's assuming that we're you know using uh maybe a firm of some kind, as we often do, right, when we seek legal advice.

We use the city of East Palo Alto as kind of the closest proxy without really knowing you know what this will ultimately entail.

Um they provided what they spend on an annual basis, and they contract with uh nonprofit service providers, legal aid society, and community legal services of East Palo Alto.

So their cost estimates are closer, I would say, to you know, nonprofit rates.

Thank you for that clarification because my concern was that we would be using more of a commercial uh like partner, and so I'm glad to hear that.

Could be a nonprofit, and we then could get a nonprofit rate, so to speak.

Just looking everywhere and under every single rock here for any kind of potential cost savings uh that we can secure here.

Okay, and then in terms of utilities.

So, I found the analysis in comparison to San Jose uh helpful, uh as well as um the analysis and in comparison to our other.

Referencing all of our utilities that we provide and the cost thereof, but I wanted to just provide some kind of qualitative data here, uh, because I don't.

I think while I believe there is some truth to what was specified in the report, I don't think it's the full story.

You know, in fact, many older buildings, in many older buildings in Roadwood City, the landlord actually pays for the utilities.

In my experience as a tenant, two small mom and pop landlords uh buildings that I've lived in centennial, the landlord has paid for all utilities.

And that's that's rare.

I mean, in newer buildings, new build, they don't offer that.

You pay for everything.

And so they don't use, you know, what do we call it?

Rubs or UBS.

It's more common in these newer buildings that that is the case.

You know, I've lived in the Cardinal, I've lived in township, you know, commercially owned properties where your utilities are charged to you based on a ratio.

It's not necessarily based on usage.

So maybe I'm maybe my experience is unique, but Jason, can you speak a little bit to this?

If there's any kind of color you can provide or additional context or data, um, try to work with the city's public works department to see how many of the older buildings were separately metered, and there was no ability to find that information out.

But we did talk to a number of uh larger uh when I say larger, a lot smaller property owners, but many of them, probably about 10 or 12, when asked if they use a rubs like system, it doesn't have to be rubs because they all said yes, 100% they do uh because they didn't have the ability to separately meter their apartments.

And for some for some utilities, it's it's really not even practical at all.

You know, for garbage, you you can't have 25 separate garbage bales, there's just no place to put them.

Um and for uh, you know, for some uh it's really hard to submeter um buildings.

There are some, you know, aftermarket opportunities for that, but they aren't fully developed yet.

So um it is difficult.

So I was not we don't have a hundred percent data on that because there's just no source that's tracking that particular stat.

Um remember the newer um buildings that you're referring to would not be affected by this law because this only applies to P1995 buildings to older ones that may not be separately metered.

So we don't have um absolute data on how many units P1995 are separately metered and could technically do that.

It's is this data was not available.

Thank you.

So I guess what I'm getting at here is that the utility impacts um may not be as far reaching as we may have believed we have may have been led to think.

And as another example, um, I did speak with Midpen and only one of their properties would be affected by the elimination of rubs.

So even for our affordable housing developers uh or property owners, there's some limitations there as well.

Um, however, again, getting at some solutions here, preparing for what may be inevitable.

Um, I wanted to ask about our utility rate assistance program.

And so can we just clarify?

Can someone clarify for me here?

Does that only uh who does that apply to?

Is it tenants, landlords, property owners?

I will maybe take a stab at this.

My understanding is that it applies to tenants and they do have to income qualify, um, and so we do provide discounted rates.

I'm not, I don't believe the program subsidizes landlords, but we can maybe have someone confirm that.

Thank you.

I guess no one's available to answer that question at the moment.

Subministered by public works, and I don't believe they are.

Okay.

And if I remember correctly, there were still space for 50 to 100 applicants to apply to that program last time we received a report about it and I asked about it.

So I would really encourage our um residents in Revic City to take advantage of the URAP to help address this very concern here in terms of increasing utility costs being passed along to the landlord by this measure.

But I also want to point out that I think a lot of the conversation has assumed that tenants are irresponsible with their utility use, and I don't I just don't think that's fair.

You know, I myself, as a tenant, put the bucket in the shower to collect water while the water's heating up, like I there's water saving features that have been put in.

Um I fill my washing machine before I run it.

I mean my uh what dishwasher, excuse me.

I actually don't have a washing machine.

Um so just wanna give some credit where credit is due and not make blanket assumptions as well.

Um and then in terms of funding, you know, someone had asked, you know, what's our plan to finance this?

Um and that's really what I've been trying to get at here.

And I'm wondering, um, as part of some scenario planning here.

If this were to pass, is the finance and audit subcommittee going to meet to discuss how to fund the um startup costs as well as um any ongoing legal costs that were pointed out.

Has that been considered on the part of staff or colleagues?

I'll I'll take a shot at this.

Um and thank you for the question, because it it's it's a question that I think about constantly.

As you may recall, when we brought the budget for this potential program was one that we identified as as some of the headwinds, right?

So I really I really do appreciate it.

Um I don't think it would naturally fit with the finance and audit and subcommittee.

The reason why I mean by by that is they meet three times a year, and I think we're gonna meet in September and October.

If this were to pass, we would be before the council, probably immediately the second meeting in November to talk about next steps, or maybe just early December, right?

And so I I think we would probably skip the the fact, not that we don't want to, you know, we like meeting with the fact, just there wouldn't be a meeting scheduled in the normal routine cycle.

So I think it would come back to this to this body to have a real direct conversation and is a budget amendment needed.

I think all those types of questions would be um what we would want to chat with with the council.

Thank you, city manager.

I appreciate the intent to be kind of proactive.

That's what I'm getting at here.

And I mean, if you know the finance and audit subcommittee has to schedule an additional meeting uh before September, I think that would be prudent, though I know we all have very challenging schedules, and it's very difficult to schedule additional meetings, um, but I would be supportive of you know bringing forward should this pass some type of um budget amendment that way we can have the conversation as early as possible to um understand fully how we would fund this program and um safeguard the general fund, and maybe while we're at it, um, since we have, you know, a consultant, I think uh city manager, you had mentioned that we have a consultant on retainer to uh who's helping us, you know, come up with revenue generating strategies, right?

Um, could that consultant potentially be charged with helping us conduct like a fee study, for instance?

Yeah, when you look at the litany of things that we'd have to procure, um, you know, what one of the the group of consultants that we do have on retail, mostly through community development engineering, because we do a lot of fee work is firms that could look at the fee studies, you know.

Um so that could be one that would have a quicker path, you know, obviously to do.

Obviously, we'd have to look at the original scopes that were created when we bid those out.

Um, but other than that, I think when you start getting the technology, the legal side of it, we've done kind of a cursory review.

I think that could be one that we might be able to jump on more quickly just because we do have a you know a cadre of of consultants that do do that work.

But again, I want to confirm the scope of work when we when we RFP them out just to make sure.

So thank you.

And then wrapping up with two final topics here.

So one of my colleagues brought up the um the who would be the judge of an appeal, for example, right?

But walking back from that, um, in the proposed measure, it identifies a hearing examiner as the initial judge, right?

In a um appeal process, uh, and so I'd ask this question up during the last time we discussed this measure about the objectivity of that uh officer and who appoints them.

Could we just recap um who appoints the hearing examiner and you know what kind of qualifications would they have and what kind of rulings could they be expected to make?

So we in our practice with the tenant protection ordinance, we have hired a hearing officer.

They are a licensed attorney.

Um we got went through a procurement process to select that attorney and you know, looked at their qualifications and experience uh proceeding over similar um tenant protection ordinance related um hearings.

Um I think, and I the second part of your question is what they would be tasked with is uh primarily looking at petitions for either upward or downward rent adjustments, and there is certain uh factors that are outlined in the ordinance about what they need to take into consideration and factor.

Um, and then if uh a tenant was uh you know unhappy with that decision, that's when the appeal they could appeal that hearing officer's uh decision to the city council.

Um I believe there's also an appeals process for if uh tenant safety plan uh you know is approved or uh denied, um and I want to double check that, but I think the hearing officer would also oversee those.

Thank you very much.

So just to clarify, this hearing examiner is not appointed by city council.

It's um it would I think it depends on the contract amount.

You know, certain and maybe the uh city attorney can chime in.

Um so the ordinance is not um doesn't prescribe how the hearing examiner is appointed, it just says the program shall designate a hearing examiner.

Um and so what Miss Lancaster did is she kind of walked you through what we did in um procuring a hearing officer for the tenant protection ordinance.

We we haven't done it for this, but I I think she'd imagine using that same process.

If the agreement um falls you know within our purchasing authorities, sometimes it's the city manager who will approve it, sometimes it's the city council, so it'll be just like all other agreements.

If it's above a certain amount, it would come to the city council.

Um, and then if the agreement is below, it would go to the city manager, but the hearing officer procurement process would be all staff led.

Okay, thank you.

I really appreciate you clarifying that because I want to make sure that should this measure pass, that this hearing examiner is going to be objective and ideally would not be appointed um by city council, depending on the cost of that contract as a result of the RP process, and that it would be, as the city attorney explained, staff led, not city council-led.

So it doesn't matter who's in these seats, it's staff who are deciding who's in that chair and makes the decision regarding a rent increase that you should you appeal that or uh a decrease should a tenant request that thank you.

And finally, um on the note of exemptions, uh there was something about exemptions to fees and rent adjustments needing to be allowed.

And so I know that this measure as is written is very stringent and gives us very little uh wiggle room, if at all, to address um fees.

Uh however, um I just wanted to ask the city attorney one more time if you can clarify um and you know reiterate from our last meeting for nonprofit affordable housing developers.

Is there any wiggle room for the city council when we set the fee to reduce the fees for a nonprofit affordable housing developer as an example?

Thank you.

Um, so I know you want clarification, and unfortunately, I can't give you a clear answer.

What I can tell you is that the ordinance is clear that the program must be funded by landlord fees, and we need to comply with state law in how we charge those fees.

The ordinance does not provide for any wiggle room on use of general fund monies.

Typically, when the city is charging fees and wants to give a waiver, a reduction or an exemption to let's say affordable housing, um, we we backfill with general fund monies in order to ensure that other property owners or whoever's being, you know, kind of charged these fees aren't somehow subsidizing for that exemption or waiver.

We would need to do a fee study to see what can be done, but that would be the legal issue that we'd be addressing, and why I don't know that we can provide a waiver reduction or exemption, but we would need to do that study in order to give a clear answer.

Thank you.

That's very helpful, and luckily we have a consultant on retainer to should we need to do that study and help us find that answer about whether that is a possibility.

Um again, I'm just trying to address some of the concerns that y'all have raised and the community has raised to uh make this workable as much as possible in the event that it passes, because I I want us to be prepared, you know.

Um so I understand that it is a has a significant financial impact on our home providers, and that is serious, serious business folks, but we do need to be prepared, and so I appreciate um colleagues for indulging me in my questions and um and comments as well as the community for your patience.

Um, and I will turn it back over to the mayor.

Thank you.

Thank you, council member, and thank you, colleagues.

One last question from Council Member Chu.

Sorry, I'll keep this very brief.

Uh, I wanted to respond to my colleague uh council member Sterkin uh and again reiterate my belief that this ordinance is going to harm tenants.

Um, so having spent time as a tenant with um, you know, it's a congregate living situation in many respects.

If you have another tenant who is, you know, disruptive, violent, um, disturbed, uh suffering from substance abuse disorder, the only option the vast majority of law-abiding, hardworking, responsible tenants who just want a quiet place to live, is if it is not readily possible to remove the disruptive tenant, usually what winds up happening is tenants who are not disruptive wind up having to leave.

Um, and just to clarify in the ordinance, um, in section 428B, it says um the heightened requirements for violation to qualify under this basis, states to establish a substantial violation, the landlord must demonstrate that the violation caused a substantial actual injury to the landlord to our other resident or to other residents, and that the tenant's conduct was unreasonable under the circumstances.

That's assault and it has to be substantial injury, number one, like to require assault, uh, you know, approvable charge of assault in order to be able to remove a tenant is not a reasonable evidentiary standard.

Number one.

Number two, even if a person living on your property or in your home commits assault out elsewhere, it is reasonable for a landlord to or a person just living with somebody in their home in a congregate living situation to say a person who is committing assault is not safe, uh, and I do not feel comfortable having them in my home.

Um and so, or at my home.

Um, and so uh I want to correct that.

The the standard is extremely high to remove a tenant.

You have to have substantial um harm uh actual injury, substantial actual injury.

So light injury is not sufficient.

Uh I just want to clarify that.

Thank you, council members.

Sorry, I think.

I feel like the need to speak on that as well.

Um because I also mentioned that good neighbors get punished, and I have had friends who have been in situations where they've been intimidated by other tenants, and and most often these actually have been women, and it seems like we could be empowering bad actors.

Um I I consider how this could also affect, I would like us to think about domestic violence and the role that some property managers have actually play, whether they've signed up for it or not, and speaking up for those who don't feel empowered to themselves.

Um so I I think that domestic violence is increasing in our community.

I'm hearing more and more about it all the time.

And I wouldn't want us to do anything that would discourage victims and do anything that would make people feel less safe.

So thank you.

Thank you, colleagues, Councilmember Sergeant.

Apologies.

I because my colleagues have responded, I just I mean, in my previous um apartment, 11-unit complex, much like what has been described here tonight, one of my next door neighbors is a couple um did have ongoing domestic violence issues.

You could hear the screams, you could hear the shouts, and it did lead to turnover uh some of my other neighbors moving away.

Um, and there wasn't much that was done on the part of the landlord, um, or that could be done.

And uh the last thing I would want myself is to um make it more difficult for someone who is uh putting their neighbor in jeopardy, in danger to um to be able to stay in their home.

And so I take this just as seriously as both of you having lived in a complex where that did happen.

And you know, this is not a decision that we are making again, as my colleagues have reiterated.

Uh, this is yeah, I think this is the worst case scenario that we're discussing here.

And um, that's all.

Thank you, colleagues.

Appreciate the the robust conversation.

Thank you again to Alyn, our housing team, the EPS team.

Um, I have a few questions if you could believe it, and I'll I'll try to be efficient about it, but um some things that just stood out to me that I I wanted to make sure I heard correctly.

Um, on the rubs meter, meters, um, uh I was curious.

Did I I cast this right?

It's 11 and twelve percent in water use increase in the cities that have removed those meters.

So there was that was just quoting one study, San Jose, where they had a uh survey done among the apartments that had rubs, and then they prohibited rubs in San Jose, and that was the reported survey results from one city.

So I I don't know how systematic that study was.

We reported that one.

We had another study by Fannie Mae that was included in there that said wasn't as precise in the house estimates, it had a more generalized statement that utility usage would generally go up in the circumstances where tenants are not uh responsible for paying for their own utilities, but it didn't give precise precise number.

So that's the data that we reviewed.

Okay.

And you know, when we've updated fees as a city council, there's always a fee analysis study.

So just wondering in terms of next steps, if this was to get passed, what is the timing of those studies so that the city is capturing an uptick in in usage and demand from you know folks who previously had a rubs meter installed.

I might defer to our city manager as I'm not aware of when public works typically does those studies.

Great.

And just to clarify, may I make sure I understand you're talking about the fees associated with you our utility fees and when those would be adjusted.

Yeah.

Um and I'm glad our city attorney is back.

She actually might have a better understanding of the timing.

Um I believe next year, I cannot remember the I think some of the fees are slated to be evaluated next year.

The question was when if about the rubs, if the rubs were taken up.

To calculate the potential burden on the rest of the the the users, I believe um the water fees are gonna be evaluated next year.

Let me get back to you on it just to make sure I'm quoting things correctly, because I just want to get it all straight.

So, but yes, it would change the way that the fees are collected.

Yeah, assuming.

Thank you, Patrick.

And um, you know, it just we were recently talking about water at our our last council meeting, and we were celebrating the fact that Redwood City is doing great on its conservation, right?

So I I see that immediately going out the window.

Um, and I'm just thinking about the cost of that.

If we had to update these fees, how that compounds to the end user.

Um, and then something else that we've talked a lot about this year has been the VLF impacts and what that means for our budget.

We just passed the budget on our last meeting, and I'm curious how this proposed ordinance would impact the funds generated by VLF or by property value, uh, excuse me, property tax revenue.

Um, do we have a sense of what that range might look like?

I defer to Jason on this one to come up.

Uh that impact would be uh an indirect impact.

The the the ordinance itself does not have any direct impact on property taxes.

So the impact would then be indirect, which would be potentially that some property owners who are um affected negatively by the uh particularly the rent control components will file for assessment appeal because they are no longer able to the property is no longer valued at what they originally thought it was, and they would go to the county and they would get a reduction in their property tax.

That's a kind of a second order impact.

The ordinance uh by itself.

Sorry to interrupt, and that process going to the county for um for this.

I thought I heard you say was it three years?

No, uh an assessment appeal.

So what I said was that you know you can you can appeal your assessed value of your property, and if you appeal the assessed value of your property, you would get a reduction in your property tax.

And the way in which you would appeal your property is you'd say the circumstances of my property have changed substantially, it's no longer worth the value that it originally was.

So I'm going to appeal the assessment that I have on my property.

And so when that if that is successful, then you would pay less taxes.

Now the ordinance itself is totally silent on any of this stuff.

So that's a second order effect.

Great.

Thank you, Mr.

Moody.

And how long does that process take going to you know the county to appeal the assessment of your property?

Is there like a rough estimate you can give us?

I I don't know.

I mean, it's probably um I would say you would probably take a year, but you might be able to get a retroactive ruling, which would reduce your property tax that you've already paid.

But I I don't know.

I'm not gonna I'd have to defer to an expert on that one.

I don't know.

All right, thank you, Mr.

Moody.

And um that's that's helpful background, um, as I do not own real estate, so that is helpful to know.

Um, I as a part of our conversation around um around city revenues.

I'm sort of, I keep coming back to that's uh seven to eighteen full-time employees who we would have to hire to to stand up this new program, right?

If the voters pass it, um I'm curious what could you just speak to what the effects on other city departments would look like.

I know we just approved like the the vacancies a few meetings ago, but just wondering how that shakes out.

You know, it's it's I it's very hard to predict exactly how this would impact other departments.

Um we do use, we did use a fully burdened um hourly you know, rate for staff, so that does in factor in um overhead costs, you know, for things like IT finance HR uh who support those staff positions.

Um but it's hard to say beyond kind of our general methodology of looking at overhead rates besides what we did identify with HR in terms of creating these positions and recruiting, um that was the most uh detail we were able to get at this stage in the process.

Okay, and I'll just add really quick, Mayor.

This gets into the uncertainties of it.

And what I would say is if if it were to pass in November, that's why we would be before you very quickly is because we would have to have some tough conversations, not just about this program but about the city as a whole, because we don't know, you know, and I know you look at a range from five to eleven million.

My first thought that's a we gotta whittle that ring, but I totally understand why the range is so big, because we're looking at comparable, you know.

Um I guess what I'm trying what I'm getting at until we can have experience running a program which could take a year or two, you know, things that we would look at internally.

Does that mean there's a hiring freeze just to make sure we're not overspending, right?

Do we have to cut back on some things at mid year?

Those are the type of conversations that are really likely to happen, right?

Is because if positions haven't been hired by mid-year and this comes on, it's pretty easy to back.

Let's let's bump the brakes on that.

But what does that mean?

How do you do it equitably across departments?

Uh I think those are some of the conversations we would have to have just to make sure we don't overspend in two areas, if that makes sense.

Yep, so definitely thank you, Patrick, and um thank you, Lynn.

And then, you know, I just wrapping up my my questions here, um, last two, you know, the re syndication of the affordable housing projects that we heard about.

Um, you mentioned, you know, the timeline where you know folks would start to see a decline in their ability to you know recoup costs, but um, you also mentioned having trouble with um, I think it was Mr.

Moody, you mentioned it, that um, you know, they would have trouble securing future loans as a result of this.

Could you share a little bit more about that?

And is it, yeah, just sort of how that's tracked um for these developers.

Um, typically, um, in order to secure a loan, you would have to show that you have a debt coverage ratio service coverage ratio of 1.15.

That means that your net cat net operating income is at least 1.15 times your total loan obligations, and what these additional um the the rent control and um the fees, it's difficult for these projects uh Shenonark performance to get to that 1.15 level.

So that's why they would have a difficult time to get additional loans.

Great, thank you.

I and I'll I'll just add that actually a debt that same ratio is what we have as our standard for giving out money at this at the city.

So we underwrite everything to 1.15 as well.

Okay, thank you both.

And um, my last question, I know there were several questions that my my colleagues that I've generated that are are sort of open-ended right now, and I'm wondering in next steps, you know, is there ability for the city to respond to some of these questions.

Like I I know a lot of our affordable housing developers chimed in that they got some responses, but not everything.

So I'm just curious, how do we provide that information if we can at all?

Yeah, I think we're getting more comfortable.

Let me back up.

I think we have answered many questions.

I did take some notes today and some of the questions that come in.

And so one thing that we can look at is an FAQ um, you know, sheet that we could put up on the you know the website that has a lot of the information.

Um I will be clear, there will be some we will not be able to answer.

We just don't know.

Um earlier this week, no, sorry, it was last week.

Got a lot of questions about like mobile homes and whatnot.

That's the one area we probably have the least amount of knowledge in.

There's a lot of ambiguity there as well.

So um, but no, I think what we could do is put together an FAQ and then you know publish it with all the other information.

And and if we don't know, we'll just simply say we don't, we we can't answer that.

Yeah, right.

Yeah, no, Patrick, that's it's amazing to hear because um for the responses that we you know, we don't have more information on, folks should absolutely know about what information we're working with right now.

Um, so thank you.

And just to get into my comments, you know, I want to start off by just respecting the body of work and the team that brought this proposal forward and that made it possible, right?

Um, I fully understand and appreciate the the reasons behind the work.

I mean, I am uh a tenant.

Um I remember sweeping Craigslist as a kid, going through the most affordable listings to send to my parents for them to you know fish and find out where the cheapest rent was.

And um, and as I grew up, I was a part of those conversations at home where my parents are balancing, they're balancing their family finances, and rent will always come first, and everything else will come second to that.

So I know the housing crisis firsthand and I know what our families are going through.

And so I know why this is before us today.

Um and I also in this position have a fiduciary duty and have to think about the impacts not only to my district but also the citywide impacts that we've heard tonight.

And um, you know, I know that we are talking about new positions and potentially a new department.

We've talked about how our city fees are going to be impacted and what is going to be required of our budget for us to keep the same expectations our residents have of city services, right?

And I'm also thinking about the you know um what this will mean for housing in general, but affordable housing specifically, right?

And I'm thinking about those three Ps of housing, right?

That every planning commissioner knows, and it's a balancing act, right?

And we need to be able to make progress on all three Ps to truly solve the housing crisis, right?

It's not just protecting our our res our tenants, although that is so important, but it's also producing the new units and um you know making sure that we're rehabilitating the existing affordable housing that we have now.

So many of my colleagues have mentioned that you know, through this has been such a fast process because it has not been city-led, and um, you know, it's sort of draws a comparison in my mind to the BLT that we passed, where we had a robust uh conversation with our our community, with business owners, with um stakeholders in our community, we got staff analysis, and there was council review and discussion that molded that policy and that eventually passed with voter support.

And so I it was that robust process that brought us a compromise, and so um, you know, I want to we're not positioned to stand up a new a new program this way, but I want to make sure that we keep this policy conversation going because there are opportunities for us to enhance the great work that the city's done over the last eight to ten years around housing.

It remains our priority, and I think that we between the anti-displacement strategies, our housing element, the arenas that we're talking about, there's still an opportunity for us to make progress on housing.

So I will leave it there.

Um I will I'll start off by saying that you know it is also our our legal obligation to either adopt this outright or to put it on the ballot.

I think the latter is the most clear path forward.

Put it in the hands of our voters, the people who put this on uh on the dais for us to consider it should also go to the community for them to make that ultimate decision, but not without the information that they need to make an informed decision.

So that's a long way of saying that I I appreciate the intent of this work.

Um the work continues, and there are opportunities for us to continue making some progress on this, but um, with that, I'll uh I will entertain a motion by swear.

I move that we vote to adopt a resolution calling for an election.

I I move that we adopt a resolution calling for an election to be consolidated with the general municipal election and statewide general election on November 3rd, 2026, and submitting to the voters at that election an initiative measure to amend the Redwood City Code to impose additional rent control and just cause eviction limits.

Thanks, Mayor.

If I may just clarify that you're moving the revised resolution that's on the diets.

Oh, I'm sorry.

Should I read you could say so moved?

So moved, thank you.

Thank you.

Councilmember Sergen.

Oh, I just had two quick one question and one quick comment.

We've got one closed session item after this, so we can be suspended.

I'm sorry, we have one motion, and so if we could just entertain that in order to have a deliberation.

Second, great.

That was a motion from Vice Mayor Aiken, a second from Councilmember Howard.

We'll go back to Councilmember Sirkin.

Thank you.

Yeah, so I just I really it's really important to have complete and accurate data here.

And so we discussed um the water usage, and while I acknowledge um that there will be a there would be a financial impact on landlords.

I do want to clarify that in that um urban water management plan item we discussed at a previous meeting.

We found that 43% of water usage is by single family homes.

So I just want to for the record, you know, clarify um that most of that water usage is not coming from these mom and pop landlords, you know, 10 unit buildings.

Um though it would increase, right?

So just for the record, and then just to respond to something you suggested, uh Mayor, about kind of continuing the the policy discussion.

Um can you expand upon that, please?

Uh, as to what you intend.

Absolutely.

Um, you know, I am thinking after November, right, we will understand whether this is gonna be something we're rushing to implement or not.

If it's the latter, you know, to the representatives from Faith in Action, right?

I want to make sure that I'm meeting with stakeholders, and we're finding I'm finding I'm making this a personal commitment, right?

I want to be able to understand what policies would enhance the TPO, the ADS, the policies we already have existing, that we're all designed in the ecosystem of what our city budget looks like and what our you know uh state and federal revenues are looking like right now.

So um that is what I have in mind is that we will I will um have those conversations with stakeholders and absolutely you know um keep the conversation going when we have these agenda items coming back to us.

Thank you very much.

I would definitely support that and hope that we can start the conversation earlier in the event that it does pass, um, as I've stated a few times and consider some of the financing options um in ways to minimize the impact on landlords as I have proposed.

Um, and I would you know leave that to staff, I suppose to you know, bring up any potential ideas.

So thank you.

Councilmember True.

Uh just clarifying a procedural question.

I had a friendly amendment.

I assume we will first vote on the first motion, and then if I would then if that fails, then I would propose the friendly amendment.

Sorry, I don't do this very often.

So, councilmember Chu.

If you have a friendly amendment, you can ask the motion maker in the second right now if they'd be interested in accepting that friendly amendment.

Would you be interested in accepting a friendly amendment?

We don't know what it is.

Um so I wanted to propose um option B, the adopt a resolution calling for an election and with the amendment uh and the council adopts a formal um opposition to this measure that we so council member um and for the full council this wasn't agendized for consideration of um of the city council opposing if that's something that's of that interest.

That is separate so today.

What you're tasked with per the elections code is what's before you.

Um I withdraw my suggestion.

Okay.

So do we have a vote now?

On the motion, motion and a second.

No friendly amendments and no lights on.

I think we're ready for a vote.

Motion passes unanimously.

Thank you.

Again, thank you, colleagues.

Thank you, Alyn, Victor, Mr.

Moody, the whole team.

We really appreciate it.

And members of the public, thank you for sticking with us tonight.

And with that, we will move to item nine, matters of council interest, beginning with 9A City Council member report of conferences attended.

Not seeing anyone's lights on, we'll go to 9B City Council reports beginning with our governance subcommittee.

Thank you, Mayor.

The governance subcommittee comprised of Mayor Martinez Sabayos, Vice Mayor Aiken, and myself met on Monday, June 29th.

The city's legislative consultant Dane Hutchings from California Public Policy Group provided a legislative overview, which included updates on legislative timing, the vehicle license fee shortfall, the Howard Jarvis ballot measure on transfer taxes, the city's current position legislation, and information on additional legislation affecting Redwood City.

In accordance with the 2026 legislative platform, the committee discussed and confirmed the city's position on key bills, and we'll be bringing an item to the full council on SB 1164 related to elections.

The next governance subcommittee meeting is scheduled for August 18th.

Thank you, Councilmember.

And next we have an update from the ESJ committee.

It's Council Member Sturking.

Thank you.

So the equity and social justice subcommittee comprised of Vice Mayor Aiken, uh Councilmember Vidia, and myself met on Tuesday, June 30th.

And the subcommittee uh received several public comments regarding a non-agendized item requesting that the library strengthen its meeting room use policy.

The comments were submitted in response to an event held on June 7th.

The subcommittee directed staff to schedule an additional meeting of the subcommittee before its uh next regularly scheduled meeting in November and agenda is an update on this policy from the library.

The city clerk's office provided an update on its efforts to improve outreach to underrepresented communities for recruitment to its city's boards and commissions, and the county's chief equity officer presented an update from the shared prosperity coordinating council on economic mobility efforts.

Finally, the subcommittee approved its 2026 work plan.

The work plan includes updates on the implementation of the city's first economic mobility action plan.

The recently adopted Language Access Administrative Policy and Progress Report on the development of a land acknowledgement and an update from the library.

Thank you for sub again, Councilmember.

And now we'll go to Councilmember Howard.

Thank you.

The finance and audit subcommittee met last Thursday, July 2nd, to receive and discuss fiscal year 2024-25 annual comprehensive finance report, also known as the ACFR.

The city's new external auditor, the Poon Pronounce Poon Group, completed a comprehensive examination of the city's annual financial statements for fiscal year 24-25 and issued an unmodified opinion, sometimes referenced as a clean audit.

This means that the city's financial statements are fairly presented in all material aspects respects.

Accounting policies have been consistently applied.

Estimates are reasonable and required disclosures are properly reflected in the financial statements.

Finalizing this ACFR took longer than in past years due to the comprehensive nature, the Poon group's review or our fine of our financial statements.

The first set of eyes that the Poon Group brought to the audit resulted in an improved more transparent ACFR.

While the Poon Group issued a clean audit opinion, it identified two findings or areas for improvement.

The first is related to delays in the city's financial reporting, and the second is related to the need for improved adherence to internal controls.

The city has received similar findings in recent years.

To address these findings, staff has made some important process changes that should better position the city from avoiding similar findings and complete and complete the ACFR on a timelier basis moving forward.

The most important change has been to prioritize completing month-end closeout activities within 45 days of the close of each month.

In past years, the city prioritized completing completing the ACFR over month-end close-out activities, causing the city to fall behind, sometimes by as many as six months on month-end close-out activities.

This created a vicious cycle where the city was always starting the annual audit behind schedule.

By prioritizing month-end close-out activities, the city is starting the fiscal year 25-26 annual audit on time, in contrast to recent years.

This change is also critical to allowing staff to provide the city council with timely budget to actual reports and improves the city forecasting capabilities.

Staff anticipates placing FY 24-25 ACFR on the July 27th, 2026 consent calendar.

Thank you, Councilmember Howard.

And on behalf of the ad hoc committee on 10184, the committee comprised of Council Members G.

Chu and myself met June 26, 2026.

And the project team also updated the committee on the next steps for the project.

The next ad hoc committee meeting date is scheduled for July 24th, 2026.

And we'll go to our city manager for an update.

Great.

Thank you, Mayor.

Just very briefly, I know you I know you all have been invited, but just a reminder that next Wednesday, the 15th, there will be the barbecue lunch for the library and city hall employees.

So if folks are around, we'd love to have you.

So thank you.

Amazing.

Thank you.

And with that, we will now adjourn to closed session to discuss potential threat to critical infrastructure information relating to cybersecurity as identified on the agenda.

Before we move to closed session, I'd like to ask the city clerk if we have any public comment.

Seeing nobody in the chamber, uh mayor, no in-person speakers, but last call on Zoom.

If anyone online would like to give comment on the closed session this evening, seeing none, Mayor.

Back to you.

And as there will be no reportable action following the closed session, we'll adjourn the meeting immediately following closed session, and the city council will not return back to the dais.

With that, thank you for joining our city council meeting tonight.

The city council meeting is next scheduled for Monday, July thirteenth.

I wish you all a great evening, and we go ahead.

Thank you.