Council Finance Committee - meeting_joint_regular

following the order at 833. Please throw a call. Here. And Emily Rama? Yes. And then committee member Chris Clark.

Oh, I have to spread.

Come on back. All right, welcome to the Council Finance Committee, Wednesday, January 21st, 2026. This meeting was called to order already. This is a hybrid meeting allowing the public to comment in person and virtually, and instructions for addressing the committee virtually can be found on the agenda. We already did roll call, so now we'll do move on to item three, approved minutes. Would any member of the public joining us virtually or in-person like to provide comment on this item? If so, please put the raise button in Zoom. The person with candy should raise their hand to be called on. We will take in-person speakers first. Each speaker will have three minutes.

No in-person.

We will now take virtual speakers. No in-person. Thank you. I will now bring the item back to committee deliberation and action. Is there a motion and a second to approve the CSE minutes of January 21st, 2020?

I move to approve the minutes.

I'll second that. All in favor? All opposed? Abstentions? Motion passes. We'll now move on to item four, oral communication from the public. Is any member of the public joining us virtually or in person like to provide comments on this item? If so, please click the raise hand button in Zoom In-person attendees should raise their hand to be called on. We will take in-person speakers first. Each speaker will have three minutes. We will now take virtual speakers. All right. That concludes our oral communications from the public. We will now move on to item five, perfect timing. 5.1 Propose Changes to the Council Policy B-13 Mountain View Employee Home Buyer and Relocation Assistance Program. The Finance and Administrative Services Director, Derek Ramponi, will present this item.

All right. Good morning. Good morning, Chair Ramos and committee members, Clark and Ramirez, Derek Rampone, the Finance and Administrative Services Director. The item you have in front of you this morning is the proposed updates to Council Policy D13, the Mountain View Employee Homebuyer and Relocation Assistance Program. A little bit of background on this item. During the development of administrative guidelines for the Homebuyer Loan Program, it was noted that several updates to the policy were recommended by staff. And as we went through kind of the guidelines, we wanted to clarify and update and basically kind of revamp the policy just to make it to provide some clarity and also some added features. We had received some initial feedback from employees, general employees about loan program was a great idea. However, it didn't seem to be totally helpful as far as helping them get a home for the amount in view. So we kind of took a fresh look at this policy and are proposing a fair amount of updates in addition to the clarification and providing some clear policy altogether. As you'll note in the staff report or memo, we have outlined the major updates that we have for this item, starting with clarifying the available assistance. They're broken down basically into three eligibility categories. We added a definition section to provide some additional clarity. We established kind of a participation window following hiring date. We thought that that was appropriate and comparable to some other agencies that have similar home buyer programs, which there are that many. So with hiring within three years of their hire date, they're eligible for the program. We expanded and kind of modernized some of the provisions, including being able to transfer a loan instead of a formal refinance program. We decided that we would like to propose kind of a transferring of a loan to another property within the city. We clarified some property types and eligibility. Just basically trying to pick up the policy. Another The next item that we updated was clarifying of relocation assistance provisions, and then we provided some administrative and operational updates in preparation for the administrative guidelines that we'll be preparing in regards to this policy. So with that, happy to take questions. I know there was some Q&A that was passed before the meeting around this item.

All right. Does any member of the committee have any questions?

I have one quick clarifying. Yeah. I don't know. I've never purchased a home. So the median home price at $3.3 million is a little high. That includes all types of ownership, housing, single-family detached, single-family attached, and condominium. Is that right?

Correct.

Thank you.

Questions? All right. We will now move on to public comment. Would any member of the public joining us virtually or in person like to provide comments on this item? If so, please click the raise button. in-person attendees should raise their hand to be called up. We will go in-person speakers first. Each speaker will have three minutes.

Go in-person.

We will now take virtual speakers.

No virtual.

Thank you. I will now bring the item back for committee deliberation and action. Is there a motion and a second to recommend the City Council adopt revisions to the Council Policy D-13, Mountain View Employee Homebuyer and Relocation Assistance Program?

All right. Are you going to suggest changes?

Thank you. First, I really appreciate staff putting together the recommended changes and responding to the questions I submitted in advance. They were very helpful. The one change I would like to suggest is that for council appointees, the council continue to approve the home buyer loan. I think the relocation assistance program would be flexible. I do think that more likely than not to come up during negotiations, during hiring or appointment process. But I think at the end of the day, the council, if it stops with the council, From a public community perspective, I think it's important for the council to be able to participate in and be held accountable for any benefits or opportunities that we provide for our appointees. So I don't know if staff had some suggestions or ways of approaching that, but I would appreciate your guidance.

From a staff perspective, appointees work on behalf of the council. So, you know, hearing the comment, it would make sense that that would fall under their purview. I would probably ask that rather than trying to do it on the fly right now, delegate the staff word to the policy, but the point is clear. Probably under eligibility, but the point is clear. You still want council to approve loans for the acquaintances. And that would make sense, because it would probably occur as part of your negotiation process anyway, as part of your evaluation process. So we can work that out.

I appreciate that. I'm inclined to agree more often than not. That's probably where that discussion would occur. And I'm comfortable with staff's recommendations for adding something to that. The other thing I was curious about, I don't feel very strongly, but... just because in our zoning ordinance, we do make a technical distinction between row houses and townhouses. I don't know if it's meaningful, but it kind of seems to me like we're saying, we're taking a typology off the table. I don't think we intend to do that, but that's the other clarification. I would appreciate staff's suggestions. I think we can just add that term back to the policy.

All right. All in favor say aye.

Any opposed? Any abstentions? Motion carries.

1, 2, 5, 2, proposed changes to Council policy 8-11, financial and budgetary policies. The Finance and Administrative Services Director, Derek Ramponi, to the Finance and Administrative Services Director, Grace Chang, will present the item.

All right. Thank you very much. Derek Ramponi, Finance. Services Director, Ripke Tseng, Assistant Financial Services Director, who will kind of walk you through this item. But before she does, I just wanted to mention that this item is very similar to 5.1 as far as updating the policy more from an operational standpoint. We are proposing these recommendations and also to become in compliance with some recently enacted governmental accounting standards board statement. And so with that, I'll kick it off. Good morning, everyone.

So let me start with policy 811 is the city's financial and budgetary policy. So we view this policy periodically to make sure we are in compliance with city compliance accounting rules and also agree with our operations. So staff reviewed this policy and proposing a few changes for the key areas. So the first area, we are proposing changes in Section 4.F, which is General Fund Open Space Reserve. As you recall, Council voter approved real property transfer Measure G tax in November 2024, and Council provide direction on how that tax revenue should be spent on. So we are cleaning up the language in this section to align with what the Council's direction is for how we spend on Measure G allocations. The second area that we're proposing for changes is section 4.J, which is reserve requirement for compensated absence fund. Compensated absence is the internal service fund that we established to keep track of our vacation sick leave payout for the staff. And in last year, we implement GASB 101, which GASB expand the definition of what's been compensated absence including sick leave payout. Currently, the funding policy is to fund this at 80% of the liability we have for this fund. Given this expansion of the definition, I think that we should separate out the funding requirement with how this fund should be established for the liability balance. Therefore, we are proposing to revise this policy to establish the funding strategy instead of 80% at the Compensated absence liability, we're using an average past five years average spending. So that aligns much more realistically on how much cash we need for this one. The third area that we are proposing changes is for 4.S.4, which is the new reserve that council direct staff to create in last fiscal, in 23-24 budget development to establish a CIP reserve in the Shoreline Regional Park Community Fund. So this is just to clean up the language to formalize this reserve in this area. The fourth item that we are asking for proposal changes is section 5.E, which is capital improvement policy. We want to provide a little bit more guidelines and clear direction to staff how to manage the recurrent annual and bi-annual CIP funding. So we can be this, the recurrent CIP can spend it on a specific purpose and equal by guidelines, guidelines on timeline on when those unspent balance can be turned back to the fund balance. So we can be... direct those funds to other CIP projects. So the last item we're proposing changes is the cost allocation plan, which is section 7.H. So this is one of the reasons driving these changes is we received a GFO budget review comment asked Citi to clarify the the cost allocation plan process. And also we want to provide a little bit guidelines on what annual increase of overheads, administrative overhead costs that we can use. So with that, that's all the changes we are proposing for this policy. And once the committee provide recommendation, we will incorporate the changes and then provide it to council for consideration in June, 2026. Thank you. Thank you.

Any member of the committee have any questions? All right, we will now move on to comment. Would any member of the public joining us virtually or in person like to provide comment on this video? If so, please click the raise hand button in Zoom. Attendees should raise their hand to be called on. We will take in-person speakers first. Each speaker will have three minutes. We will now take virtual speakers.

And no rituals.

Thank you. I will now bring the item back to the House Committee. Deliberation and action. Are there any comments? Thank you, Chair.

Yeah, we appreciate the impressive care of the provisions. It's always good to be on top of the quality and adjusted line of practice and applying the state law. So support all the changes. I also appreciate responses to the other questions I see. I wanted to propose three pages, two of which I think are cleanup and another portal policy change. The cleanup items would be to include, in addition to the staff recommendations, the preliminary subject review that we've incorporated into our process recently. I think it's been well received by everyone. Council has an opportunity to provide direction to the leader of staff, make some changes to the budget, which is great because that means that has more time to, you know, think through it and bring back some changes. Get a sense of what staff has prepared. the coming fiscal year. So I think including that, there's in the section regarding the budget, there are 16 procedural steps that would be, I think, one of the steps that we've had. The other one is section 4A on the equipment placement reserve. Suggested change would be to update it to the was in april this year uh based on uh some consulting recommendations i think so again aligning um the policy with the practice and then the policy change would be for section four reserve policies and the general fund open space reserve. I didn't know this, but there's a provision that says revenue generated excess city owned properties would go into the open space reserve, which I think is a good idea. But now that open space reserve has dedicated funding from measure G, I'm wondering if committee would support instead having either giving staff a chance to come back with recommendations or what I was thinking is the revenue from excess city properties could go into the SPAR, which doesn't have a dedicated source of revenue, very valuable reserve for the council teaching property acquisition. So those are the three changes.

interested in staff's thoughts and then the response to your first question staff was sure and actually i'll say i have to look at which policy it's in but if you all remember years and years ago there used to be what was called a narrative budget which is essentially similar so what we're doing now but we're kind of preparing it in a, I think, more transparent way for council to understand in the public what's going on. So we can maybe find where it references the narrative budget to and just change it to what we're calling it now and also add it into this policy.

Third point, the proceeds from access to the owned property. I saw the city manager nodding her head. That does seem to make sense now that there is a dedicated revenue source. Then I'll defer to Derek and Grace on the 25% for the item 4K. Yeah, it makes sense that we could add it to that research policy, to that section of the ERF. Thank you. Three for three? Yeah.

I was going to start giving thoughts.

Fine with that.

I'm happy to support your personal work. And I guess we are, is there a motion and a second to recommend that the revision of the technical policy, page 11, financial and budgetary policy.

It's a staff recommendation.

All right. All in favor say aye. All opposed? Any abstentions? Motion passes. Yay. All right. Now to the grand finale of item 5.3, our seat on Parkland next study. Community Service Director John Marchand will start the presentation on this study. All right.

Morning, committee members. Once again, John Marchant, Community Services Director, joined by a plethora of department heads to support this item, along with Tafion Rice-Evans from Economic Planning Systems, also known as EPS. We were here in January to for the first time to bring forward the introduction of utilizing a mitigation fee act, as well as confirming with the committee that there's an interest in continuing this maybe act. And there was also a dialogue from the committee about looking at some alternate ways to look at the fee compared to what we were proposing, which was by land use type and number of bedrooms for a number of reasons. And then since then, we have done a number of, we've taken a number of steps to identify how we can further clarify, as well as look at some of the local court cases that have taken place and make sure that we are trying to stay consistent with what those are to date. And so with that, I'm going to turn it over to Davion to take us through a presentation and then I'll wrap up at the very end. Thank you.

morning chair committee members um yeah so as john mentioned we have a relatively brief presentation here today i'm going to do a quick recap on um the last meeting in january kind of some of the details of how we um looked at and kind of offering up post work with the approach to impact these and then get your corrections So in the January meeting, we presented to you kind of a review of what the existing fee structure was for box fees, and then also came forward with a kind of a concept and a framework with technical analysis to back it up that laid out some potential maximum fee levels and related matters. One of the key, one component of that presentation was the way in which the fees are charged. And so there are different approaches that different cities have taken in terms of how it's done. But what we showed you last time was an approach that was mirrored the way in which the city currently does many of its fees, where you have per unit fees, but you also have fees per bedroom. And I think that kind of blended approach led to some questions. And so I think the... The committee here specifically raised some questions about fee balance, equity, proportionality, and a lack of consideration for unit size. We wanted to make sure that we addressed those. Next slide, please. So the direction we took away was to look at an approach that focused more on per square foot fee application and in return to that, Return to you with that today. There are several generally acknowledged benefits of a per square foot approach. One relates to the kind of language in AB 602 that has a preference for that approach. And so there's a certain kind of legal benefits arguably that you using a per-square-feet approach. It also provides having a per-square-feet approach. Rather than mixing and matching per unit per bedroom, we have a kind of a nice consistency between different unit types. It also avoids possibilities of when we do it on a bedroom basis, there may be some incentives or disincentives created to build different kinds of units with different numbers of bedrooms. So it kind of gets away from that approach. Next slide, please. So just going back to the kind of the underlying basis of the fee program, just briefly, three acres per thousand residents is the city standard. That's what really drives this whole fee program. That is being coupled with some important cost assumptions that allow us to understand what is the maximum cost we would be allowed to charge to a new resident in the city. You can see here that it's a $10.8 million per acre is the all-in cost for an acre of land and an acre of improvement together. And that then translates into using the three acres per thousand translates into a $32,400 per resident, which then drives everything you'll see beyond this is driven by that number combined with population density. uh we did wait one change the committee i think pointed out last time that we have an array of capital improvement costs and estimates um there was some concern that some of those improvement cost estimates might be kind of unusual otherwise we remove those um so there has been a bit of a reduction in the overall fee level it was 3.4 million dollars per acre When we last reported to you, when we removed those two outlier parts, that number is now down to $3 million per acre. So it's a little bit of a reduction in the fee numbers we're going to be showing you today. Next slide, please. So then to kind of go through the process of basically estimating these maximum fees, the way it typically is done, the way it's historically been done ending at this point without changing that is just calculate your per unit fee based on your cost per person and then the estimates of persons per unit. These persons per unit are obviously important drivers at the fee levels, as you can see. And those are out of the U.S. Census data for the city of Mountain View. As you can see here, as we might expect, there are more persons per household in a single-family attached unit than there are in an attached unit if you're in your typical multifamily unit. So when we put all of that together, we end up with maximum per unit fees that vary from $54,000 per unit on average for a multi-family fee up to about $89,000 per unit for a single family attached fee sum. Again, normally in years past, that would have been the end of the kind of conversation you would end at that point. But now we have new legislation and policy desire to have more variation by size. Next slide, please. So here in the next slide, you can see the conversion from the average per unit fee into the average per square foot fee. And again, this is based on data from the city of Mountain View, where we take the average size of those units that You can see 775 square feet for single family, up to 2,500 square feet for single family. Attached units, do some math, we end up with a set of per square feet calculations. So we have, as you can see, about $35 per square foot for single family attached, up to $69 per square foot for multi-family. And one of the things that we want to kind of talk about a little bit is you can see that this kind of combination of per unit fee and size creates a bit of a juxtaposition in terms of the fee amounts per unit are higher on the larger single family attached units, but the per square foot fee ends up being actually higher on the kind of flips on the multi-family units, even though the overall fee level is higher on the single family fees. Next slide, please. Excuse me. So here, we wanted just to kind of explain a little bit more why the per square foot fee tends to be higher in multi-family than in a single family. It's all basically based on the number of folks, I guess the density or intensity of population living in each of these units. So when we, in order to kind of basically try to come up with a comparison, we said we wanted to normalize the numbers and ask, you know, what on average, when we look at these kinds of units, what is the average number of people in a thousand square foot space in order to Basically, kind of in order to explain the underlying dynamics of why you have a higher per square foot feet for multifamily than for single family. As you can see here, when we combine the data for Mountain View, on average, we have about two persons per thousand square feet living in a multifamily unit versus about 1.1 persons per thousand square feet living in a single family attached unit. I don't think that's This is very surprising in terms of the way, you know, size of the population densities, but we wanted to dig in on that a little bit just to kind of explain why we get that differential between the plus square foot fees. Next slide, please. So when we put it together, obviously if you adopt a per square foot fee, every development will come in with a slightly different square footage size. So every development will have a slightly different kind of average per unit fee. We wanted just to kind of illustrate how that might work, dynamics of that might work in the real world. So here you can see, both per square foot fee, the maximum per square foot fee at the top, $35 to $69 per square foot. You can see the average unit fee is specifically tied to those average unit sizes, so $2,500 for the single-family attached, $1,850 for the single-family attached, and $775 for the multifamily. Here we've just provided some illustrations of how that fee would go up and down within those unit categories as sizes vary. So you can see here As I think the legislation intended, that if you built a 2,000-square-foot single-family home, you would pay a lower, you'd pay the $71,000 would be your per-unit bill versus the $88,000. Similarly, for a single-family attached to multifamily, the units get smaller, the amount of fee burden would go down. On the flip side, as your fees get larger, on a per-square-foot fee you pay, you would pay a higher level of overall fee. Next slide, please. So putting this into context, this is, I think it's this, I think the City of Chinese explained or will explain, right, this is a first step where we're looking to calculate the maximum the maximum fee under the nexus requirements. This is not, of course, necessarily what you're going to adopt. It's just kind of setting a kind of a bar and a structure for us, but still worth kind of making a comparison between where those maximum fees have landed so far and both the existing fee level. So the bars here on the left-hand side, you can see the dark blue, that's your existing fee level. for these three different, on average, for these three different categories. We're also showing the kind of housing element policy goal of 20% off that as the orange bar. And then on the right, you can see where these technically derived maximum numbers end up relative to those numbers. And so what stands out You know, what I clearly hear is that, again, this is on an average unit. It will vary by, depending on unit and square footage. On an average unit, we have the multifamily going down to about the level, about the 20% level, going down by about 21%, so it kind of comes down to about that 20% below current level. You can see the single family numbers are moving kind of in the opposite direction. They're going up relative to the current maximum gradient graded graph between the orange and the black on the right. Next slide, please. Finally, we just wanted to kind of show the I think one of the asks was to consider what a fee would look like with also included on residential On the left-hand side, you can see the fees that we presented and calculated initially back in January. On the right-hand side, you can see just this small reduction, and this is just driven by that reduction in the cost per acre for parking improvements. So the numbers on the right-hand side are kind of the new recalculated potential maximum fees for non-residential. And I think with that, next slide, please.

Thank you, Tafeon.

Once again, and included in the Q&A, there was a question about the need for an accompanying capital improvement program document. We are working on that. And as Tafeon also mentioned, what we're looking at today is the maximum fee calculation. And as we go through and look at the different projects and capital improvements that we're looking to make over time, we have to look at what is realistic as far as how much can we do compared to maybe what we could be charging for as part of the maximum here. So as we go through that process, we actually think these maximum fees just from going through the capital improvement program will actually continue to see further de-escalation off of the maximum based on that. And so just want to put that into context. So for input and direction, we're asking you if the committee supports the staff recommendation to establish with the Queen Bee Act and Mitigation Bee Act based on the calculations we were showing today, and does the committee support the recommendation to apply the updated park and recreation impact fee to non-residential development, which you had shown support for before, just wanted to show you the new calculations and continue that confirmation. and then looking for any additional length that you have for us to move forward. And the last slide. So we are, yeah.

Nope.

Nope.

You can go back to the previous one. Nope. There you go. So we as staff, depending on the outcome of the recommendation from the committee this morning, we are prepared to bring this as a new business item to city council. We're looking at September at the moment, prepared to do that. But if there's more work to do or other items that the committee would like to provide, we're open to questions, comments, and forward to your input. Thank you.

all right does any member of the committee have any questions remember ramirez you don't have any okay i have a few uh thank you for the presentation uh let's actually start with the slide that was after the blank slide because that that did uh i submitted several questions in advance and uh staff appropriately identified questions that were inelegantly expressed and I think that that slide addresses one of those questions and that's we were to right now we have sort of like closet average square footage for a multi-family unit right that's you know all of the unit types right studios to three bedrooms and i was curious about that breakdown based on bedrooms and that's what this is right can staff walk through this analysis why you're using that deposit number instead of stuff yeah sure so i mean i guess what i first of all say is that the um there were

I think that there is leeway for the council and the collective to make certain choices, right, both about per square foot versus per bedroom, also about how detailed want to become, that you want to be. So we ran this analysis. As you can see, it's kind of the math is the same, right? Persons per unit drives everything. So if we can come up with, and since this allows us to do this, we were able to get this information. And as you point out, right now we have a kind of multifamily composite, what we're showing you, about $66 per square foot, right? when you look at the data we receive, we get variation from $85 per square foot for studio down to 62 for one bedroom and then up to 69 for two bedroom. And so I think there's a couple of, for me, choices that come in here. One is, is this level of detail kind of useful and important, I think we could justify either way. I don't see a lot of cities going to this level of detail, but certainly possible, and it's more detailed. We were a little bit, just the, as you, I guess as you get into these smaller categories, the sample size to data is a little less, and so you get a little bit more, you get some results you're not sort of expecting, like can't fully instinctively explain why those variations are as they are, and so I think we We're feeling that it would be maybe cleaner and clearer to have, you know, to use the composite one. But I think that's an open discussion from my perspective.

And I'll just add to that. We really spun our wheels on this for quite some time, I think over multiple meetings. And we tried to wrap our head around why the data would come out this way, right? Where you have this multifamily studio so high in comparison to these larger unit types in a multifamily development. And we talked about how when data comes in, you can have definitely have more people in a smaller unit than you would normally think would be in a smaller unit. You can have way less people in a larger unit than you would think would would be in that larger unit. And really what we came to is when we landed on the average, we understood that there is always going to be a disparity in the number of people in units. And you're never going to, there's no possible way to exactly pinpoint, is a studio really just one person, maybe max two people? Or is that just a family that just has to put in that baby for a while and you've got, actually got three people in there. And then you've also got families as their financial, you know, their economic situation changes and increases, they can move out of that small studio. And now you've got a house where it's way bigger than what they need with the anticipation that they may or may not grow into that home. And so with those types of disparities and you get these kind of results, these kinds of numbers, we thought that it better serve the community to average it all. and come to this middle where you're at this 775 average square foot and you're around the $66, right? For the per square foot fee. And you're balancing out that outlier at $85 and you're kind of smoothing that column. But like Tafeon said, we can be more detailed and be more granular at this. But as you can see, it may have results that, the council is not, that it doesn't further the council's policy goal, right? Because it's really hitting studios in a way that we didn't anticipate. And this is driven by census data, data that we can't really manipulate. It's like, it would be sort of arbitrary for us to go, oh, well, let's just slice that number and make it lower. Because what's behind this information is just pure census data that we've gathered or that Taifeian has gathered to generate these numbers.

It's not intuitive. No. I really struggled with the math behind this report, so I appreciate you helping explain some of the nuances and complexities behind that. You alluded to this earlier in the presentation. The other thing that I'm struggling with is understanding where there's a difference between a discretionary fee adjustment or reduction to achieve a policy goal and fee reductions or adjustments that are legally obligated to meet the nexus proportionality tests. And what I don't really have a full appreciation for is what we have to solve for here. And what would the work that would come after we've provided direction on the the nexus study. So can you help maybe me understand, like, so there are, this doesn't solve all of the legal requirements. There's more work to meet the legal obligations.

Correct. So John definitely alluded to that at the end. I would say what we're trying to do today is get to what I would describe as a stable base A stable base being all of our input data is something that you understand and that you support, right? You understand that we're pulling census data, we're getting all of these numbers and we're coming to this calculation. And if you support the square foot versus the unit size calculation. And once we get to this stable base, we know what numbers we're using going in. We know that we're using square footage or not. And we know whether or not we're digging down into multi-family by bedroom size or we're using an average, we get to this stable base. And I would say that that puts us probably about 85% of the way there. I think there's 15% more work that we have to do on the backend. We need to figure out, I feel like there's this overlay that's going to come on top of that related to proportionality. We started a conversation about Our current fee, our current QMB Act fee is based on planning areas, right? We are looking towards probably going, looking at a citywide need, three acres per thousand need, right? Quimby Act has specific legal requirements that you're spending the money in a specific radius, absent particular findings and mitigation. Fee Act doesn't have those types of limitations. And so one of the things we're going to have to talk about is how you layer proportionality on top of this base fee based on need right if you're in an area that has a ton of parks and the development that's going up isn't going to really impact it because that that particular area has so many parks that you can add easily a hundred more people to that community without impacting the demand on the parks in that area versus an area where it has one park and adding 100 people just exacerbates an already very bad problem. Mitigation Fee Act fees give an ability to address that on a citywide basis, whereas Columbia Act doesn't. And so that is sort of the behind the scenes work that we still have to do. And that I think is something we're going to have to do legally to come into compliance with proportionality requirements, as opposed to there may still be other policy decisions that council makes with regard to incentives or exemptions and things like that, that you layer over top of what we're doing with regard to proportionality. But your decisions, your policy decisions will be very much driven by this sort of last 15% of work that we need to do in order to ensure that legally we feel like if you impose this fee at its full cost, we are still meeting proportionality requirements regardless of what incentives and policy decisions you make on the other side, right? So I still think that there's that work. Would you agree?

It's very helpful. Thank you. Two final questions. I'll wrap it. you again you touched on this maybe this is proportionality rather than a nexus question but in certain circumstances uh like residential development near shoreline park uh you might have like a lot of park land right so the demand on the need for acquisition might be you know it might be hard to demonstrate that there's a need for funding for park acquisition, right, because there's a lot of park land, but you might need money for the construction of amenities or facilities that are not served by what's on Shoreline Community Park right now. So at this level, is that a distinction that we have to make at the nexus study level, or is that work that we would do with the proportionality analysis later on?

I'm going to defer to John a little bit because we've talked a lot about Shoreline and its impact on the city. And we talked about the realities of what Shoreline offers, right, in way of park. I mean, there's a beautiful golf course and there's a bunch of open space, some of which you can hike, some of which you can't. And then there's a play park, right, that probably needs to be expanded. But John, do you want to talk about the realities of Shoreline and how we're thinking about

how that plays into the... Yeah, so as we went through the Parks and Recreation Strategic Plan, we looked at the shoreline quite a bit as far as what is considered truly publicly accessible. And while it is accessible, we have a lot of constraints, and that is related to wildlife in particular. And what we can do as far as taking what is currently open space and possibly areas that are utilized by the wildlife. So it's already protected space. And the opportunities to bring in new elements is very small. Even trying to put in a new parking area that I was looking to do, we were denied to do that because we don't have enough space to mitigate the loss of what is accessible areas for wildlife specifically. And so in looking at the next steps is if there are needs within the shoreline area, North Bayshore area, we're not gonna be able to accommodate the types of elements that those neighborhoods are gonna be looking at. And so it's a matter of how do we look at what we should be providing to those families in an area that's close to their residence to identify the next steps.

So to follow up on that, but to maybe, try to illustrate. Shoreline is, you know, a massive area of parkland, but you could have residential developments. We know that there's plans for lots of residential to go in that area. And those families that are going to be moving in there are going to be looking for parks where their kids can play, right? They're going to be looking for parks where they can picnic. And Shoreline will offer some of that. And it is going to, I think, impact the type of fee that you can collect from the developments that go up in that area. But to the extent, and I do think that, and this is sort of that extra 15% of work that we have to do. Some of the ideas that came up in my head, you know, I sleep with this in my head. But, you know, things like, you know, if you're within, you know, this many feet of space, a mini park, there's this reduction or there's, you know, I'm trying to figure out how do you, how do you account for what is available and what is going to be needed based on your development. And so Shoreline, while it feels like you've got this huge park and you're easily making your three acres per thousand, I think that you could legally justify, yes, it is this open space, but it is not usable park space. And so there still is a justification for collecting a fee in order to allow the city to buy additional land maybe in that area that is not shoreline in order to build another community park or mini park to serve a need. And so- Shoreline is an aspect, but how we figure out, I don't think that it is the end of the analysis in that particular area, for instance. And whether or not this goes in the NEXA study or if it goes in the ordinance, it's hard to determine at this moment. I feel like it's going to require some sort of write-up or to be addressed in the NEXA study, but it may be more address more head-on in the ordinance that gets adopted that, like I said, applies that additional calculation to accommodate or to meet the proportionality requirements. So you may end up seeing it in both the next study providing backup court and the ordinance providing the guidance on how the fee is going to be calculated when you have situations like that.

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

So I'll start first. I read it and I actually found the letter to be quite reasonable. I was a Typhoon brought to my attention the case BIA versus city of Patterson. And so that has driven a lot of the work that we've done recently and why we bumped it out a little bit so that we could ensure that we don't make some of the errors the court identified that the city of Patterson made. One of the reasons why we're gonna adopt a separate capital improvement plan related to this nexus fee. And so I don't know if Taifian, I don't know if you had a chance to look at that letter, but that was something that I wanted to discuss because I thought there were some reasonable recommendations, but I will say that outside of my area of expertise, this is where I would rely on our consultant and our staff. So from a legal perspective, I thought it made some solid recommendations, but I would, having just read it yesterday, would like an opportunity to um talk to our consultant and the rest of staff and i don't know if anyone else had any thoughts on the letter um yeah i didn't have a full-time chance to look into it i will um

you know, kind of acknowledge and agree that there's a lot of post the Sheets decision, like a lot of new conversation kind of has arisen, partly tied to AB 602, partly tied to Sheets, partly tied to what it means. I think some of this goes back to, you know, what did the Sheets decision, you know, what is the Supreme Court directing everyone to do? And then you have, you have a bunch of like cases following on from that kind of point in, arguably slightly different directions. So I think at the bottom of it all for me, I mean, between Sheets, AB 602, all these things, obviously we have to do what we're doing, what we're collectively trying to do here today, which is to double the eyes and trust all the teams. I think that's what we're looking to do. But I need to read the letter more specifically and then talk to the team to kind of give a better response.

Questions?

during the presentation you mentioned how this has evolved with state legislations also evolved over the last few years and I'm just curious where you help me understand where they're heading and if they are focusing on person per unit or square footage or I guess what I'm trying to get at is do we feel comfortable in how this evolves over time the same trajectory as state legislation, I think, as well as headings so that we don't end up in a spot where we have to readdress this next year or two.

Sure. I think in terms of state law, the Mitigation Fee Act, Navy 602, I think it's, to me, it I don't know exactly what's going to happen, but I feel like the legislature has made a pretty clear suggestion that they don't like the idea of flat fees. So I think the most At the core of that, there's many things in AB 602, including having a very clear CAP and transparency and all kinds of other things. But one of their core requirements is like, I want you to do it on a per square foot basis, unless you can explain to me why that doesn't make sense within the proportionality context. So I think that that's... That's the direction I don't, I can't see that changing. So I think if we're doing on a per square foot basis, we're on solid ground. I think within that, as you can see, there's all kinds of permutations of how do you lump things together or break them out that are not really, I think different cities are trying different things based on their preferences. And I think they are generally acceptable within that framework. I think there's a, the kind of more, the greater uncertainty I'd say would be around the Sheets decision. And again, what, you know, you follow its trajectory and you find U.S. Supreme Court makes a decision, Court of Appeals says, no, that fee program is fine. Patterson, you know, we have all these cases going on. It's a little bit hard to disentangle how many of them are like specific issues with individual fee programs or whatever. What are the large lessons to be learned? So I wouldn't want to predict, you know, what the courts, future courts might say in that regard. But I think in terms of like state law, the mitigation fee acts and all those kinds of I think this kind of framework and structure that we've suggested, but also kind of others with the plus square foot approach would be consistent.

It feels very defensible when we're talking about studying the overall envelope and the ceilings, the fundamental pieces through which you assess the ceiling. And then you can have a status about it. And then briefly on the shoreline example, If you build a smaller mini park or something else, does the, I shouldn't know this, but can you use the, can these fees be used for connectivity between the two, like trails, or trying to connect an underutilized portion of a park with something a bit more utilized, the trail system?

We do utilize parkland fees for the creation of trails, yes.

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

All right. Without any more questions, we will bring it to a committee person comment. With any member of the public joining us virtually or in person, please provide comments on this item. If so, click the raise hand button in Zoom. In-person attendees should raise their hand to be called on. We will take in-person speakers first. No in-person, but we have two in-person speakers. The speaker will have three minutes. Are we ready with the timer? Three minutes.

Thanks for the opportunity to speak today. I appreciate it. I'm a planner and developer. Just a couple of thoughts for when this does go to council. I think for the public, the staff report or the analysis would be great if the first section showed the before and after. So we have existing fees now, and you're working on something that would be quote, the after. So for instance, for simplicity, In the condo world, 14 to 1500 square foot condo staff is pushing us towards right now. We pay $67,000 a year. Based on this math, that would go up to over $100,000 a year. And I think it'd be really good for the council and the public to see what the implications are. The second part of the analysis that I would ask is how does increases in fees justify compliance with the general plan? We have two very important things in the general plan that have been codified both by the city and the state HCD, the housing element, that call for a minimum of 20% reduction in our fees. So that would be first, I would love to see how do we increase the fees and still stay in compliance with that codified requirement. The second part is also in the housing fee and also codified by the state HCD was the secondary, which was opportunity sites for housing. The commitment was made to the state in order to spur development, there would be further cuts potentially, well not even potentially, there would be further cuts to fees, including park dedication fees. So obviously when you get to staff report to the council, I really think the council has to understand how this effort parallels or coincides or is contrary to what the general plan, which is our guiding light, states in black and white. And do you have to go back to the state and amend the housing element because you're not needing that 20% reduction? And secondarily, you're not... helping the opportunity sites as what was promised to the state through that. So I understand the Quimby Act, that's fine, this is math, but I think if the public saw and the council before and after in a very simplistic example, especially as it relates to condos because nobody builds 500 square foot condos, that would be really good for people out of the gate and then compliance with the gp as it relates to that 20 and the opportunity sites that's it thanks thank you um okay so yeah hold on to humanity resident um i uh

Actually, the shoreline issue was something that was in my mind as well. Shoreline doesn't, as you discussed, doesn't have all the amenities. But that's why we have community parks. So there are many planning areas that don't have all of the amenities in their neighborhood parks or the mini parks. That's why the in lieu fee ordinance allows for the spending of money from any development in the city to be used in community parks. For instance, the Eagle Pool, Franksburg Pool, tennis courts, pickleball, I think might be something that people are concerned about. And so that's that. One thing that is really concerning to me is that I'm on the EPC, but not speaking for them. But when the development at the corner of Middlefield and Ellis came to EPC earlier this year, it's apartments, and there was no park in Luffy. And it was just kind of shocking to me, having been on the Parks and Recreation Commission some time ago, My thought was that people living in apartment buildings don't have yards, and they need recreation facilities. They need parks. So I think time is of the essence. I understand that this is kind of 85%, but one thing I just want to encourage is moving forward as quickly as possible without moving so quickly to screw things up. There's kind of a balance there, but time is of the essence. So please, please move.

Thank you. Any other in-person public comments? None. We will now take virtual speakers.

Yes. Can you hear me?

We can hear you.

All right. Thank you very much. Good morning, Chair. and committee members. I'm Dennis Martin representing the Building Industry Association of the Bay Area. I call your attention to our comment letter submitted yesterday. And I ask your indulgence this morning as my remarks may slightly exceed the three minute time limit. We appreciate the city's effort to revisit the park fee nexus study and to respond to revolving legal requirements following the U.S. Supreme Court's decision in Sheets v. County of El Dorado. We also appreciate the city's recognition that development fees and exactions directly affect housing affordability and project feasibility. The city of Mountain View is one of the most costly communities in the Bay Area to build housing. And if the city is to come anywhere close to building its arena, then you must address fee load on new housing. I also want to note that on August 19th, 2025, on behalf of BIA, I previously contacted Mr. Marchant regarding the city's efforts to comply with six cycle housing element programs related to the parkland dedication ordinance, including potential reductions to parkland in lieu fees and the establishment of parkland credits for privately owned public accessible open space and trails. In that correspondence, BIA specifically encouraged the city to undertake robust outreach to the residential development stakeholder community. And we have not been contacted regarding this effort, but BIA requests and appreciates staff's willingness to continue that dialogue through a robust development stakeholder dialogue. That said, we believe the proposed fee framework raises several important concerns. that warrant additional stakeholder outreach and further analysis before the city advances toward that adoption. First and foremost, the land acquisition assumptions embedded in the study appears to significantly exceed that of recently regional appraised market evidence. The staff indicates that the city is utilizing an implied parkland acquisition assumption of approximately 7.8 million per acre But by comparison, a recent USPAP compliant appraisal prepared for the city of Santa Clara concluded that reconciled land values ranging from approximately 5 million to 5.6 million per acre existed across multiple Santa Clara zip codes. That appraisal utilized verified comparable sales, market condition adjustments, transparent reconciliation methodologies. The difference between those values and Mountain View's assumptions raises important questions regarding whether the NEXUS study may overstate current acquisition costs in today's moderating market environment. Therefore, BIA requests that the City adopt the Transparent City of Santa Clara annual appraisal model to determine land value for parkland acquisition. Second, we urge the city to more carefully evaluate occupancy assumptions underlying the proposed fee structure. And I'm not going to get into as much detail as we did in the letter. You've kind of addressed that in your presentation. But we do want...

Thank you. Were there any other virtual public comments? Nope. All right. We will bring it back to... I will bring the item back to the committee for deliberation and to provide input and direction to guide the final development of the study and its future consideration and potential adoption by the City Council. Anyone want to get started?

What gave you that impression?

I've only got a few months left, so I'm going to maximize time. opportunity to provide input uh so i'll start with um i think uh appreciate staff in the city attorney's office uh returning um to the committee with the adjustments that we uh directed uh back in january uh i was surprised by some of the outcomes uh i think it's uh the representative from the some of the public speakers that mentioned you know the math is the math and I don't have a math background. I think it would be helpful as you continue this work to maybe break down in bite-sized chunks exactly how you came to some of these conclusions. For those of us in the council who are challenged mathematically. But I think as a whole, directionally moving in the right direction, I would support. um the staff recommendations uh for the first two questions uh establishing the uh quimby is based on square footage as the report concluded that's the most defensible approach um and i continue to support applying the impact fees to non-residential development although i think we may want to make a policy decision later about you know if we want to facilitate you know, neighborhoods serving retail, mixed-use development, we may want to, you know, provide an incentive to do so. So that's one thing we don't have to figure out today, but I think it's good to give the council the option later to impose fees on non-residential developments so that way we can provide the amenities that patrons of those businesses and employees also want. will likely use but i'm i'm nervous about um again appreciate staff's responses to the questions i submitted in advance i'm nervous that at least you know these the legal maximums that we're seeing um uh represent a substantial percentage of the hard cuts of the construction costs of residential development right between 12 and roughly 13 and a half percent that's a non-trivial We're struggling to realize the housing that I think the council has been encouraging for many years. If you've seen a small number of projects, those are the projects with the highest return, generally attached and detached single family. But a lot of the multifamily projects are just not financially feasible. And that's certainly true for condominium development. It has been a priority for the council for a long time. So I'm nervous that these are not the final numbers. There's a little bit of a black box for me about it. additional inputs that likely will result in lower numbers but um right now i think the the concern is we may end up with fees that de facto never materialize because i construct that i mean it's not financially feasible uh so i i think that the next steps are going to be very important and i i would things that we have to do, the proportionality analysis, the legal compliance, and then, you know, what are opportunities for reasonable discretionary or policy solutions to some of these challenges, right? How can we ensure that residential development is not infeasible? So we actually, one, get housing, and two, generate the fees or land in lieu of the fees. where the community would benefit from these types of amenities and facilities. So I don't know exactly what kind of direction is useful right now, but I think at a starting point, outreach to the development community seems reasonable, something that we've done very effectively in many other contexts. We're pretty good at public outreach, so I think that that suggestion from the BIA could be worth pursuing. There might be other suggestions in that letter that are helpful and perfectly sensible. And I think I would look to staff to guidance for, you know, what is your response? What are things that we can do without risking pushing the effort too far out, right? We're in this unfortunate space where, you know, a certain class of housing we impose fees another class of housing we can't legally impose fees I don't think that's that's right or fair especially with a product type that the council would like to see entry-level ownership housing I think that's something we want to see and yet I'm a developer and I have the choice between you know an apartment complex without a subdivision that pays zero dollars for fees and condo development, why would I pick the condo development right now, right? The regulatory framework serves as a disincentive to that. So I think we should be mindful of the impact of these decisions on feasibility and also the types of housing that de facto we're incentivizing based on that fee structure. So I don't think I have useful things to say aside from I support one and two and for additional input and direction I would say conduct the development community outreach and look at that letter BIA currently announced with suggestions for opportunities to make the process a little bit more transparent and also take into consideration the financial feasibility of residential development I think that's kind of where I would land

I don't have anything to add. I think we, this comes back to us in September. Hopefully we'll have, I don't know if there's any state legislation this year that might impact it. Hopefully, if I said, probably, maybe there is. And then just appropriate, as we always do, any additional guidance from you.

the way we structured this we don't really have to worry about that probably vice mayor so we are um advocating for the condo uh the legislation going through about the condo and the insurance piece so maybe that will be something that will help with the condo development um something that we are engaged in so we can try and provide an update at that time where the bill is at or what will happen advocacy efforts, that would be helpful at that time as well.

Yeah, I think things are going to move in real time. We've been getting some health member recommendations that we have.

You have answers for the three questions, though?

I'm fine with the general direction of the whole thing, so I don't have any But ultimately the piece that we adopt will be, this is set into the local access, right? Or the local access here. And then whatever we adopt will be.

I think you're going to see a further reduction.

Yeah. Yeah. And we can, there can be exceptions.

Correct. Policy adoptions that will potentially even reduce it. Okay.

So yes, for one and two, I really do like the people six. I kind of, I'm still, it's still not enough for me to, well, the single family attention, the single family is straightforward, but I'm kind of curious the breakdown more with the multifamily. I'm trying to visualize how does this breakdown the current be 20% off and the average unit, how would that look with like the past five projects we approved or something like that? That gives a better sense of like, what do these fees mean? And like actual tangible units and projects that we have approved. What would that actually be? Kind of run it through the SIP so that we know like compared to the projects that we actually get, how does that look? I kind of also view it's completely different but I kind of view what we're setting is like this is the maximum amount we can charge kind of like when we do taxes when we ask our residents like please approve this tax structure that is the maximum amount we are allowed to tax the council can always lower that tax. I remember this with Measure P. There was always that discussion. Well, you were still on council. Where, like, the question that went before the voters was, like, the maximum amount they could actually charge. But the council could say, like, oh, we're concerned about, like, the economic viability of things and lower it. What you needed was the approval to go to the maximum. That's kind of how I'm doing this. And then we will make our housing element goals and stuff like that. We will probably lower it from that just so that we can cover ourselves legally. We like that. With that, does the staff have what they need? Is there a motion needed?

I don't know. I'm happy to make a motion. Okay.

I don't know. So I moved to approve staff recommendations to establish Wimby fees, Wimby FBs and mitigation FBs based on where footage and then to apply the updated part of the outreach impact fee to non-residential development. Those are two key things. And then I don't think there's opposition. I'll include the direction to conduct development community outreach. And then for that, to evaluate BIA lettering for recommendations. It's not going to come back to CFS.

The next step is to include it in that CASA report when you think it's reasonable. I'll second it, but I just want to make sure that the outreach is, I don't know the extent of the outreach. So I thought that there should be outreach. I just, I don't want it to take the form. I don't even know. We want all that input. I'll just leave it to figure out.

I mean, I would love plentiful detail in what we get back from that. And sometimes it, varies when we hear about outreach sometimes. Ideally, I remember when we did the housing element work, there was that grid of like, this is the input we got, and this is why we recommend this based on that input. I won't be prescriptive, but I kind of like that.

I can speak briefly. community development director. So we have already conducted engagement with the development community, perhaps not as broadly include the BIA as they've suggested they would like, but we have targeted developers active in Mountain View. That has led to some of those developers participating typically as a consequence of that spending. The process is working. What we hear is the fees are too high, as you can imagine, and it's difficult to know where we could calibrate those fees to satisfy the development community. unlock certain desirable types. We can think about how to figure out where the line might be, but for condominium development particularly, we've had other developer engagement very recently as part of our low and moderate ownership strategy work or the council work plan. And what we're hearing overwhelmingly from auto developers is that the construction defect liability is the number one cost implication and barrier to their ability to develop condominiums. absolutely fees are an important part of that you know whether it's 10 or something around there that's a very high share but it's it's not been cited as the foremost reason or obstacles economy and development so it's not even clear if we set it to zero what that would do given the construction defect liability that can also tally a very significant amount i'm not suggesting we would get to zero as a city but that's within the council's purview to decide So it's just, I think that and balancing with the fact that this tends to be the most significant funding source for park acquisition and construction. Those are difficult policy issues to balance out. But we have done developer engagement. And the good news is we're tentatively scheduling the summer to have another developer engagement meeting. So this will provide an opportunity to update where we've progressed since the last engagement and see if there's further input from the developers at that time.

Maybe then I don't want to be prescriptive either, but the reason the BIA is special is that they sue. They sometimes win to include them in the process.

All right. We have a motion and a second. All in favor? All opposed? Abstentions? And that seems to have passed unanimously. So we will now move on to item six, committee staff comments, questions, and committee reports. Are there any committee or staff reports, questions, or committee reports from committee members?

I was curious about do we have any other items this year?

uh december we've got november early december and we're gonna pull you on that that'll be uh we are going to also bring back uh the auditor's work plan and results from past audits so i think that's pretty much what's coming up so that'll be december i don't foresee one before that so you've got a little break thank you yes

With that, I'll adjourn the meeting. This meeting is adjourned at 9 to 7.