City Council - Regular Meeting

Thank you.

All right, good evening, everyone. If you can take your seats, we're gonna get it started. Thank you for joining our regular city council meeting of June 8th, 2026. We hold meetings in a hybrid format with both in-person and virtual participation available. Given the number of time-sensitive matters before us this evening, we appreciate your cooperation in keeping comments as concise as we can so that all speakers have the opportunity to be heard tonight. and the City welcomes public comments on topics within the City's 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 the 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 in-person comments have been given. Detailed instructions for public comment will be provided on the screen when the time for public comment begins. And with that, we'll now turn it over to our City Clerk to call the roll.

Thank you. Good evening, everyone. Council Member Chu is absent this evening. Council Member Gee.

Present.

Council Member Howard. Here. Council Member Padilla. Present. Council Member Sterkin.

Here.

Vice Mayor Aiken. Here. Mayor Martinez-Sabayos.

Here. Thank you. Thank you, everyone. And we'll move to the Pledge of Allegiance. Vice Mayor, could you do the honors?

Please join me in saluting our flag. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Thank you, Vice Mayor. And item four on the agenda does not apply for this evening. It's only a procedural item. So we'll move on to our next item. We have no presentations or acknowledgements this evening, so we'll keep moving to item six, which is our public comment section of the agenda. We'll take public comment on the consent calendar, matters of council interest, as well as items that are not listed on tonight's agenda. We welcome speakers providing public comment, but please be advised that this is a limited public forum. As such, speakers must address matters within the subject matter jurisdiction of the city. and if speakers do not they'll be warned and if they continue to disregard city rules their opportunity to speak will be limited if you're attending in person please fill out a speaker card and submit it to the city clerk here at the dais and if you're attending virtually feel free to raise your hand on zoom at this time or press star 9 if you've joined by phone once we've gathered all the speaker cards and raised hands and have begun public comment no additional speakers will be allowed to queue up to speak and i'll turn it over to our city clerk to facilitate public comment

Thank you, Mayor. At this time, we have three speakers, potentially four.

Oh, another item, okay.

Three speakers for public comment. I'll give one last call to the audience or our folks on Zoom to be recognized for public comment. Once we begin public comment, as the Mayor stated, we will close the list of speakers. So I'll give you a few more seconds for any more public comment on general comment this evening. Okay, we will begin closing the speakers list and we'll start with Tony Gapastone.

I'm wearing a shirt that says, Stories Save Lives, because I really believe when we tell a powerful and brave story, or see ourselves in film and TV, or have someone lean over and talk about the pain that they've endured and survived, we can save a life, literally. Hi, I'm Tony Gapastone. I'm the founder and executive director of Brave Maker. we're a film festival here in redwood city that happens in july this is our eighth year and i want to tell you this year we're opening up on july 8th with kevin hines who is a survivor of a suicide attempt off the golden gate bridge He tried to take his own life in 2000 when he was 19 years old and survived with a broken back. He immediately regretted it when he jumped off. A sea lion pushed him to the top and he was rescued. And since 2000, he's been making movies and telling his story all around the world. And he'll be here in Redwood City on July 8th at the Chan Zuckerberg Community Space. I want to invite you to come. to this film festival because i really believe the 107 films that we have are so life-changing they talk about affordable housing they talk about gender equality lgbt rights they talk about racial justice and i'm so passionate about filmmaking especially here in the city because i'm a 30-year resident and i believe the arts make us better so thank you to everybody who's been a part of our film festival for the past eight years The Redwood City Arts Commission just gave us a grant this week. But we're down four grantors from the past. We're down $20,000 from the past years we've had. And your support and ticket sales help us to be great. So thank you so much. You're all invited.

Thank you, Tony. We'll now move to our Zoom speakers. We'll start with Kelly Boyett, who will be followed by Tony Godlewski. And you may unmute yourself and begin your comments.

Hi, my name is Kelly. I'll be commenting on agenda item 11A about the tobacco ordinance.

Sorry, Kelly, I don't mean to interrupt you, but we are only taking comments for item 6 at this time. Oh, okay. You can raise your hand again for item 11A.

Gotcha. Okay, I'm sorry about that.

Sorry about that. Thank you. Okay, looks like the other raised hand went down. So it looks like that concludes public comment, Mayor.

Thank you, City Clerk. Thank you, everybody, for making public comment on consents. Excuse me, on all of our items this evening. We'll move to consents. Items on consent are routine in nature and approved by one motion. And are there any items on consent from which council members are recused? Council Member Padilla.

Mayor, I'll be recusing myself from item 7D. My house was on the street where repairs for the replacement program was made and so I won't be participating. Thank you.

Great. Thank you Councilmember. That's item 7D as in David. And are there any other items on consent? Not seeing any. So we will take a motion on item 7D first. Mr. Moe? Vice Mayor?

Motion to approve item 7D. Second.

Thank you. That was a motion from Council Member Howard, a second from Vice Mayor Akin. Could we get an electronic vote, please?

The motion passes with five votes. Council Member Chu is absent and Council Member Padilla is recused.

Thank you. May I like to make a motion to approve consent without this item we just voted on separately?

Second. Motion from Council Member G, a second from Council Member Howard. Could we get an electronic vote, please?

The motion passes with six votes. Council Member Chiu is absent.

Thank you, everyone. With that, we'll move right into staff reports, and we'll go into our first item, 8A. Spanish interpretation is being provided for this item, and I'd like to turn it over to our interpreter for instructions on how to participate in the meeting in Spanish.

Ah, buenas tardes. Esta noche se está proveyendo interpretación español. Si usted necesita escuchar la interpretación español, por favor, llame al 669-900-6833. Ingrese el ID de la reunión, que es 346-830-8566, y la contraseña 1017. Thank you so much. With that, I'll turn it over to our city clerk, Jessica Castro, our housing leadership manager, Alin Lancaster, and our city consultant, Jason Moody, with EPS, to give the presentation. Thank you.

Thank you, Mayor. My name is Jessica Castro. I'm the city clerk and I will be kicking off the presentation. It will be structured in three parts this evening. I'll begin with an overview of the initiative petition and election process, including a recap of events that led to tonight's recommended actions. Next, our housing leadership manager, Lynn Lancaster, will then give an overview of the proposed ordinance submitted by the proponents. And finally, Jason Moody with EPS, the city's consultant, will present a comprehensive analysis of potential impacts referred to as the 92-12 report. So before you are the three questions that will be asked for the council to keep in mind, we will be pausing at every section of the presentation for questions. On this slide is sort of the overview of the timeline of the process. On October 29th, 2025, the city clerk's office received a notice of intent to circulate an initiative petition and a proposed ordinance, which we'll refer to tonight as the measure, from three Redwood City residents known as the proponents. Following receipt of these documents and in accordance with the California Elections Code, the city attorney prepared a ballot title and summary. With this ballot title and summary, the proponents prepared a petition to circulate for signatures among Redwood City voters. On April 22nd of this year, the proponents submitted their petition and the City Clerk's Office conducted a prima facie, or an on-its-face review, and determined that the raw count of signatures presented met the minimum number of petition signatures required to accept the petition for filing. Following acceptance, the City Clerk's Office transferred the petition to the San Mateo County Elections Office to conduct signature verification of each signature. On May 13th, I was notified by the Elections Office that of the 6,045 signatures reviewed, The petition received 4,751 valid signatures, achieving the minimum number of required signatures to qualify the proposed measures per Elections Code section 9210 subdivision A. As a result, I have certified the sufficiency of the petition. Tonight, the City Council will be asked to accept the certification and receive the 9212 report and the City Council must act on one of the following options. So the recommendation this evening, because the 9212 report will be presented this evening, the Elections Code requires that the City Council take one of two possible actions. At this meeting, the City Council must determine whether to, number one, adopt the proposed ordinance without alteration within 10 days, or, number two, call for an election to place the proposal on the ballot for voter consideration at the November 3rd, 2026 election. Should the City Council choose to call an election, staff prepared a resolution, which is attachment E to the Council Agenda Packet, allowing such action to occur tonight. And before we move to the questions for this section, I want to call out a revision that was made to Attachment E, which is the resolution calling the election on November 3rd, 2026 for this initiative measure, specifically a change to the ballot question, which is detailed on this slide. Copies of the updated resolution were provided to each council member in the agenda packet for public viewing in the back of the chamber and post it online. The revised ballot question reads, shall the measure that caps annual rent increases for units built before February 1st, 1995 to 60% of the increase in the consumer price index with maximum increase of 5% and for rental units regardless of when built, increases requirements for just cause evictions, requires relocation payments of at least $12,000 for no fault evictions, provides additional tenant protections, and creates a new city-administered renter's rights protection program funded through annual landlord assessments be adopted. And with that, I'll take any questions on the election or the initiative petition process that the council may have.

Thank you, City Clerk. Colleagues, any clarifying questions on the elections process that we got here? Great. We'll keep moving.

Thank you. And with that, I'll turn it over to Housing Leadership Manager, Lynn Lancaster. Thank you.

Thank you.

Good evening, Mayor, Vice Mayor, and City Council members. I'm Lynn Lancaster, Housing Leadership Manager. As our City Clerk noted, I'll be providing an overview of the proposed ordinance, and Jason Moody with Economic Planning Systems, or EPS, will be giving the presentation on the 9212 report. I also want to note that we are joined this evening by Lolita Fernandez, Deputy City Attorney, Karen Tiedemann, Outside Legal Counsel, and Victor Gaitan, Housing Management Analyst, to also help answer any questions. Before going into the proposed ordinance, I do want to provide some state context. There is the Costa-Hawkins Rental Housing Act, which impacts how local cities can implement rent control. The Costa-Hawkins Act went into effect in 1995 and places limits on local rent stabilization ordinances by exempting single family homes, condominiums, and any new construction built after February 1st of 1995 from local rent control requirements. Costa-Hawkins also requires vacancy decontrol, which means that landlords must be allowed to reset rental rates for their units at the start of a new tenancy. And so now I'll go over the key elements of the proposed ordinance. It includes a rent stabilization requirement where annual rent increases would be limited to 60% of the percent change in the Consumer Price Index, or CPI, with a maximum of 5%. This requirement also includes an initial rollback of rents to October 29th of 2025, and landlords would not be allowed to bank or roll over rent increases from year to year. Landlords can also not charge tenants for utilities in addition to rent, unless the utility is separately or individually metered. Landlords are also not allowed to use a ratio utility system, commonly referred to as RUBS, to divide utility costs among tenants. Landlords may file a fair return petition for higher rent increases. The proposed ordinance also includes just cause for eviction protections. These include expanded protections compared to the State Tenant Protection Act, also referred to as TPA, or the city's tenant protection ordinance referred to as TPO. And it includes additional protections for students, educators, elderly, disabled, or terminally ill tenants. These just cause eviction protections would go into effect immediately as opposed to the state TPA or city TPO where protections go into effect after one year of tenancy. Similar to the city TPO, the proposed ordinance includes right to return requirements, but these requirements are expanded to cover all no fault just cause termination reasons, which include owner move in, substantial renovation, demolition, and withdrawal from the rental market. Generally, the right to return has to be offered at the same rent and lease terms, and the right to return never expires. Additionally, Ordinance requires that landlords pay relocation assistance for all no-fault just cause terminations, and this is four months of fair market rent or $12,000 minimum. And fair market rents, which we'll often refer to as FMR, are annually published rents by the U.S. Department of Housing and Urban Development. For elderly tenants, disabled or terminally ill tenants, they would receive an additional $6,000. And these rates are adjusted annually by the change in CPI. For any construction, landlords are required to provide a tenant safety plan and this must be approved by the city. There's also requirements for optional short-term relocation assistance for construction less than 30 days. If the landlord is providing the short-term relocation assistance, the tenant would still need to continue paying rent. It also provides for anti-harassment protections and calls for the establishment of a rent stabilization and tenant protection program that the city would administer that includes a rent registry where a city would track rent increases, changes to tenancy, termination notices, fees, as well as buyout agreements. The city would also be responsible for processing petitions and appeals related to rent increases or decreases, as noted approving tenant safety plans and any appeals regarding relocation assistance eligibility. The city would also contract with a third party to provide free legal counsel for low-income tenants. And this would need to be a fee-funded system, and those fees would be paid by the landlord, and costs could not be covered by the general fund. And so I'm going to go over now the kind of applicability of the proposed ordinance. So there are two tiers of applicability, which we refer to. The first is fully covered. So this covers units that are subject to all requirements of the proposed ordinance, including the rent stabilization requirements. Fully covered units include multifamily properties built prior to February 1st of 1995. This is inclusive of deed restricted affordable units and ADUs also built prior to that February 1st, 1995 date. And fully covered units does include mobile homes. Partially covered units are units that are not subject to the rent stabilization requirements, but are still subject to all the other requirements of the proposed ordinance. This includes single family homes and housing built after 1995, also inclusive of deed restricted affordable units built after 1995. So this chart that's quite large on here is a comparison of the key elements of the proposed ordinance compared to the city's tenant protection ordinance as well as state law. As noted on the previous slide, the proposed ordinance has broader applicability compared to state law or the city's TPO. For example, the state law and the city TPO generally exempt single-family homes, condos, deed-restricted affordable housing, and ADUs. While state law includes rent stabilization, the proposed ordinance would place stricter limits on the amount that rents can be increased annually. State law has a range of 5 to 10%, and the maximum of the proposed ordinance is 5%. Like state law and the city's TPO, the proposed ordinance includes just cause for eviction protections, but protections would apply immediately. State law and the city TPO do require a 12 month waiting period. However, the city's TPO does include minimum lease term requirements where landlords must offer a one year lease. The proposed ordinance includes expanded right to return requirements, and I will review this more in depth on the next slides. It also includes expanded relocation assistance requirements, and again, I'll go over that in more detail on the next slides. Lastly, while state law includes anti-harassment protections, the proposed ordinance specifically outlines anti-harassment protections that would protect all tenants. So going over in more depth the right to return requirements. The proposed ordinance requires landlords to offer a right to return for all no-fault just causes and as I've noted before, this right to return does not expire. For owner move-ins, a landlord cannot evict for an owner move-in if the tenant is elderly or disabled and has lived in the unit for at least three years or if the tenant is certified as terminally ill. A landlord can also not evict during the school year if the tenant has children or educators in the household. For substantial renovation, as noted earlier, a tenant safety plan would be required, and there are optional short-term relocation assistance requirements if that renovation takes less than 30 days. Similar to owner move-ins, there are limitations, again, on evicting during the school year. For demolition, the rent control provisions of this ordinance would apply to the newly constructed rental units if they are constructed on the same property within five years. There are also extended noticing timelines ranging from 120 days to one year for elderly or disabled tenants. And with withdrawal from the rental market, there are the same expanded noticing requirements as demolition. And landlords can be held liable for punitive damages if the unit is returned to the rental market within certain time frames. All right, so this table, because there are quite a few scenarios, outlines kind of all of the right to return scenarios and compares the proposed ordinance to the city's tenant protection ordinance. For owner move-in, both ordinances require that the owner move in within 90 days and maintain the property as their primary residence for a set period of time. If the owner fails to reoccupy the unit following these requirements, they have to offer the tenant the right to return at the same rent and lease terms. And I'll note that this requirement is also consistent with state law. If the owner moves in and follows all of the occupancy timeline requirements, then the city's ordinance does not require the right to return if eventually the owner returns the unit back to the rental market. However, the proposed ordinance does require right to return and at the same rent and lease terms. For substantial renovation, both ordinances require a right to return whether the remodel was completed or not. For uncompleted remodels or renovations, the right to return requirements are the same for both the city's ordinance, the proposed ordinance, and state law. If the remodel is completed, the Sydney's ordinance requires same rent with allowable increases by state law and also provides a fair rate of return appeals process. The proposed ordinance just requires the same rent and lease terms. For demolition, if it's not completed, the right to return requirements, again, are the same for both ordinances as well as state law. However, completed demolitions, the city's TPO does not require a right to return, whereas the ordinance, again, does require that at the same rent and lease terms. I will note, though, that depending on the situation, state laws such as SB 330 can also require the right to return following a completed demolition. Lastly, the proposed ordinance requires a right to return for withdrawal, whereas the city's ordinance does not. And then lastly, here's the comparison of the relocation assistance requirements for both the city's ordinance and the proposed ordinance. Under the proposed ordinance, all tenants would receive four months of FMR or $12,000, whichever is greater. And as you can see here in the blue table, these are the current FMR rates. For elderly, disabled, or terminally ill tenants, they would receive an additional $6,000. Under the city's ordinance, all tenants would receive one month of their current rent. Tenants that qualify as low income would receive three months of FMR rent. And tenants that are special circumstance, which means they are low income and also have a household member who's elderly, a child, disabled, or if the tenant has lived there for at least five years, would receive four months of FMR rent. And so just to give a little bit of background on what a 9212 report is, it's a comprehensive analysis prepared by jurisdiction or consultant in response to a voter initiative. The report is named after section 9212 of the California Elections Code and is intended to provide decision makers and the public with an understanding of the initiative's potential impacts. And listed on the screen are the elements that are evaluated in a 9212 report. We have contracted with EPS to prepare this report, and I'm going to have Jason give an overview of the report. And just to clarify, we were intending to answer questions about the proposed ordinance and the report after that.

Okay.

Thank you. My name is Jason Moody. I'm a managing principal at Economic and Planning Systems. We're a real estate economics firm located in Oakland. We've been around for about 42 years. I've been with the firm for about over 30 years, so been doing this for a while. As was mentioned, we were commissioned to do a 92-12 report, which is pretty broad latitude in terms of what you can cover, but we focus on the economic and fiscal implications of this proposed ordinance, or measure as we're calling it, in Redwood City. So our scope and our methodology. First, we took a good look at the law itself and how it compares with existing state law and local policies. This is important because we're really trying to evaluate the impact of this measure and the impact is really dependent upon the change from existing baseline conditions so we didn't we're not looking at the impact of all tenant protection because there's already some tenant protection so we're just looking at the net increase in tenant protection and those factors as well as the rent control measures the other area that we looked at is we looked at previous studies on rent control and other jurisdictions primarily in california but there's been a lot of studies on rent control and less studies on tenant protection, but mostly on rent control, so we took a look at those studies to see what they found. The third element of our scope was to apply these two things to the existing city's housing stock and demographic situation to see how the law is likely to apply locally. And then another big part of our task was to estimate the implementation and administration costs of this proposed measure, which would fall primarily on the city. And finally, we looked at the fact that this measure does require that there would be fees on rental units. And we estimated what those fees might be, although if this measure is actually approved, those fees would have to be recalculated based on actual study. So we just provided an estimate of those fees. So next I'm going to go quickly over the key findings and then go into detail on some of these elements. So if the measure is approved, we found that existing tenants will likely benefit from both lower rent growth and from stronger protection against evictions above and beyond what they currently have. And in the city, about 48% of the housing stock is rental. So the tenant protection elements would apply to all the rental stock. About 19% would be subject to the rent control provisions, given the number of units in the city that are constructed before 1995. The impacts on new housing investment, new housing development are complicated but will be limited by the application of Costa-Hawkins because Costa-Hawkins does protect any unit that is exempt from rent control, any unit that was built after 1995. So they wouldn't be subject to the rent control provisions but they would be subject to the other provisions of the law. So its impact on new construction will be mixed but clearly some of the landlords and owners will be subject to all tenant protection requirements and some of them may be concerned about the fact that INVESTING IN THEIR PROPERTY OR MAKING A PROPERTY AVAILABLE FOR RENT, THIS LAW WOULD BRING RESTRICTIONS AND SO THEY MAY THINK TWICE ABOUT DOING THAT. NEW DEVELOPMENT PROBABLY LESS AFFECTED BECAUSE NEW DEVELOPMENT IS EXEMPT FROM THE RENT CONTROL COMPONENT BUT THEY WOULD BE AGAIN SUBJECT TO THE OTHER ELEMENTS. THE OTHER ELEMENT IS THAT THE There is a possibility that Costa-Hawkins is amended in the future, so there may be some investors who would be concerned about that outcome, and they may be, again, hesitant to invest in a city that if that happened, their units would be subject to rent control. So new development could, in an indirect way, be affected from that perspective. The program administration costs are substantial. And we estimated between $4 and $10 million. It's hard to read this. This is the way we can enlarge it. But $4 to $10 million in costs, which can't come from the general fund. It has to come from another source. Most likely that would come from fees that are charged to rental units. And we made a preliminary estimate of what those fees would be. And those fees, which we'll see later, are much higher than the fees that are actually specified in the ordinance. So most likely the city would need to increase those fees, which would impose those fees on all units. The final element of this is the impact on affordable housing, which we found to be kind of unique because affordable housing developers can't raise their rent to the market when a tenant decides to leave, unlike market rates. So they can't really catch up on rent and recover their costs. So they will face some challenges with regard to not only the fees themselves that they have to pay, but also with regard to paying for their maintenance costs, which clearly maintenance costs go up with inflation, and this measure limits their increase in rent to 60% of inflation. So technically rents in real terms will be declining, but their obligations won't be declining. So that will prevent... pressure on affordable housing because they're not exempt. Okay, so this slide just kind of gives you an indication of how this proposed rent cap would apply versus state law. So again, it's 5%. The state law is 5% of the CPI plus the change in CPI. So technically, the state law allows you to increase rent up to 10%, but 5% plus inflation, essentially. The proposed ordinance says you can only increase rent as 60% of the change in CPI, so up to 5%. So that's a pretty big difference. This illustrates an example of a particular unit that was renting for $2,500 in year one. Under the proposed ordinance, after five years of occupancy, the per month rent would be $937 less per month. than the situation in which a property owner wasn't controlled by this measure and increased the rent at the maximum level every year. So that's kind of an extreme case, but it shows you the potential magnitude of the difference in rent that could occur. OVER A FIVE-YEAR PERIOD WITH THIS MEASURE VERSUS THE EXISTING STATE LAW. A NUMBER OF CITIES DO HAVE SIMILAR ORDINANCES AS THIS ONE. ROUGHLY 30-PLUS CALIFORNIA CITIES HAVE SOME FORM OF RENT CONTROL, ACCOUNTING FOR ABOUT 22% OF THE STATE'S POPULATION, SO ABOUT 22% OF THE STATE'S POPULATION HAS SOME RENT CONTROL. HOWEVER, THIS RENT CONTROL, THESE EXISTING RENT CONTROL ORDINANCES THROUGHOUT THE STATE VERY SIGNIFICANTLY. MOST OF THEM ARE BASED ON CPI, BUT THE PROPOSED ORDINANCE AT 60% CPI IS ON THE MORE STRICT END OF THE SPECTRUM. THE AVERAGE, AS YOU CAN SEE THERE, AND I CAN'T SEE IT, BUT I THINK IT SAYS 79%. I haven't committed all these numbers to memory, so my apologies. The others are not based on CPI at all. They're based on a maximum level, which is about 5%. So this one is on the more strict side of the equation. There's only one that we were able to identify that's stricter. It's at 50%. So this is certainly more strict than what you see elsewhere in the cities that have this. Just quickly focus on renter demographics in Redwood City, which we think is important. I really should have brought my computer because I have a hard time seeing these. Oh, thank you. This is so much better. I'm going to look at this one. Okay, in Redwood City, Redwood City already faces a fair amount of rent burden among its renters. About 46% of the renter households are what they call rent burden. That means you have 30% or more of your income is spent on rent. But in that comparison, if you compare it to, say, California or San Mateo County in general, a little bit higher than San Mateo, but a little bit lower than California in general. But rents in Redwood City have been declining in the last, say, five or six years. So that shows you that while rents are high in Redwood City, they have been declining in real terms in the last five years. Prior studies, actually a study that was done between 2016 and 2021, found that about 25% of Redwood City's residents were displaced during that period. So it has, again, renter pressure in Redwood City is real. A quick overview of the housing stock, and this is gonna repeat some of the stuff in the key finding in Redwood City. 48% of the units are renter-occupied, so 52% aren't renter-occupied, they're owner-occupied. Overall, about 19% of the units would be subject to the rent control ordinances, the measures, the 60% of CPI component. However, all units, all rental units would be subject to the just cause eviction, right of return, and the other provisions that are included in the ordinance. So how, a quick summary of how this law is, this measure is likely to affect housing supply and investment. So again, the key finding, the original key finding, I'm sorry, I'm not, thank you for that. And I'm going to go up one more because we saw this slide. And this is the slide we're on now. So how does this law affect housing supply and investment impacts? We talked about how it obviously supports renters in the city, and there is concern that it may also affect new development as well as investment in existing property. Again, the Costa-Hawkins currency limits the impact on new development because new development can continue to increase rent based on state law. So they won't be subject to this. Anything built after 1995 can be that. But as I mentioned before, there has been attempts to repeal Costa-Hawkins over the years. I think three attempts from 2018. So again, if you were an investor in the city, you would be thinking in the background, I'm about ready to invest money, and if Costa-Hawkins is repealed, I will not be able to recover my investment on rent. So... So in that case, I do believe that it was most likely that you would have an incentive, you might have a disincentive to invest as well as a conversion from rental units out of rental into ownership so people would no longer want to rent their properties. But that's, again, dependent on a variety of factors and would also depend on whether Acosta-Hawkins is ever amended or changed. In terms of investment in older properties that were built prior to 1995, this again, a very complex issue, but it could potentially affect an incentive for owners to invest in their property because they would have maybe a difficult time recovering their rent in the form of increased, recovering their investment in the form of increased rent. because by definition you can't raise your rent. Now they may be allowed to petition for a rent increase through a process that has not been fully clarified in the ordinance, but the ordinance does suggest that you can file a petition to increase your rent to cover your investment. But those two things together could potentially affect the decision of property owners or operators to invest in property built prior to 1995 because of their concern of recouping their investment. Okay. Next slide. Okay. The preliminary estimate of program costs. to the city. So in order to do this, first of all, it was established that the city does not have an excess capacity to, at this time, existing capacity to administer a program of this scale with existing staff. So they would most likely have to hire staff and office space and equipment, et cetera. So there would be a cost there. And the costs are likely to include registry, petitions, hearings, counseling, outreach, legal support, enforcement, a whole range of things would be required. So in order to estimate this, we interviewed and did an analysis of probably about 10 to 12 cities that have rent control ordinances, and we figured out what their costs were on a per-rental unit basis in order to estimate, kind of apply that kind of per-rental unit basis TO REDWOOD CITY, AND SO WE ESTABLISHED A MINIMUM, AVERAGE, AND MAXIMUM COST, WHICH INCLUDES THE STAFF COSTS, AS WELL AS OTHER COSTS AND OFFICE SPACE AND WHATNOT. I WOULD NOTE THAT THIS ONE-TIME ANNUAL COST OF BETWEEN $4 MILLION UP TO $10 MILLION A YEAR doesn't include the startup costs of the program, which would be around $300,000 to $700,000. So that is our preliminary estimate. And in order to recover these costs, the city would most likely Okay, now, there we go. Would most likely charge a fee on rental units to recover those costs. So we made a calculation of what that estimated fee would be. And we found that to be in the range of $545 per unit per year to a lower of a 300. Actually, this is a tiered fee system. So units that are not covered by rent control would be less at $338 and the ones that are would be higher at $445. So that's... A quick estimate of the essential fee burden that would be on a per unit basis. Again, these numbers would need to be recalculated if the measure is approved to actually have a more official nexus analysis of those relationships. Finally, I want to talk a little bit about the unique challenges facing affordable housing with this ordinance because affordable housing, again, is not exempted from the rent control provisions of this ordinance. So we estimate there's about 625 affordable housing units in the city that would be subject to the rent control provisions of this ordinance, Again, all affordable housing units will be subject to the tenant protection provisions, but only 625 would be affected by the, and this does present some complexity and challenges for affordable housing developers because they operate on very low margins. Many of these older properties have deferred maintenance. They depend very much on rental income to maintain and to operate their buildings. But they would not be able to keep up with their costs, not just the management costs, but insurance, utilities, a whole host of deferred maintenance issues, a whole host of things which do increase at the rate of inflation, but their rents would not be increasing at the rate of inflation. And in addition to that, they would be charged a fee to support the implementation of the program. So their costs would go up just from that fee alone. and then they would also have additional costs that they would not be able to recoup. So there is some challenges that existing deed restricted affordable housing operators would face if the measure was approved. I think I'm going to end it there. There's a lot of information there, and we have a lot of back pocket slides that we can refer to during the Q&A section, but I think for now we're going to leave it open for questions.

I'll just wrap up with one slide before going over the recommendations and the questions. With regards to if the measure is approved, what that implementation would look like. So if the city council adopted the ordinance without alteration, this would go into effect within 30 days after the second reading, like our standard ordinance process. If it is placed on the ballot and approved by the voters, it would go into effect 10 days after the vote is declared by the City Council. Either way, these are accelerated effective dates, and so initial implementation and administrative tasks would really fall on existing City staff. This would require a deprioritization of other work, and we would make our best efforts to implement this to the minimum level needed of enforcement as prescribed in the ordinance. But we anticipate as noted that at a minimum this would require seven new staff as well as likely reclassifying existing staff to take on these additional responsibilities and ensure adequate capacity to manage both this new program as well as all of our other housing programs. Full implementation would not be possible until these new staff positions are created and filled. Again, based on our experience with implementation of the city's tenant protection ordinance, we estimate kind of the initial implementation taking four to six months. This would include establishing base rent, initial outreach and education to tenants and landlords, setting the fee rate that's prescribed in the ordinance, and mechanisms to collect that fee, setting up an interim database and process to collect notices until we can actually put forth a more comprehensive rental registry software. We would have to put together rules and regulations as well as hire third-party consultants to provide the free legal services for low-income tenants as well as setting up hearing officers. Full implementation and scaling would likely take up to one year or more. The big elements of this again are the hiring and creating of positions. We think this could take up to from seven to nine months. We would need to find new office space and if there's any related tenant improvement work. We don't have sufficient facilities, existing city facilities to accommodate that level of staffing. We would do, as Jason mentioned, a more in-depth fee study and establish a fee along with more proactive enforcement of that fee. We would procure and implement a rent registry software as well as managing that database over time, proactively enforcing any requirements, and again, continued outreach and education. And so on the side again are the recommendations before city council which is to by motion accept the certification of the signature verifications and then elect to take one of the two options which is again is adopt within 10 days without alteration or adopt a resolution calling for the election for this to be placed before the voters. And with that, I do want to invite our city manager, I think Patrick Heisinger, to just share a final few remarks before we go into questions and public comment.

Great. Thank you, Lynn. Patrick Heisinger, city manager. I just wanted to add one piece of information regarding the 9212 report as well. Under the statute, the 9212 report really is a report for the decision makers, for the city council. I directed staff to pursue the 9212 report because we had a really short timeline. And so we did, and we made our timelines. I really appreciate staff's work and our consultants' work. That does not mean that more questions could be asked tonight and information be sought tonight that we could also bring back to the City Council. I'd also like to acknowledge that we've received several letters with really good, poignant questions that we just didn't have time to research. As part of the process tonight, there might be questions that we might recommend, say we'd like to come back with some more detail on those. So the 9212 report is your report, Council, and so please ask any and all questions, and we'll do our best to try to answer those questions in a tight turnaround. Thank you.

Great, Patrick. Thank you, Alin. Mr. Moody, thank you so much for all the work to get us to this point and so that we could have a 92-12 to discuss. With that, colleagues, if anyone has any questions, we can relay some of those now. If not, we can move into public comment. Okay. City Clerk, let's move into public comment.

Thank you, Mayor. So at this point, we have 29 speaker cards. And if we have any folks on Zoom who would like to speak on this item, please raise your hand at this time. And again, we close the speaker's list once we begin public comment. So I'll give it a few more moments. If there's any last speaker cards out there in the audience that need to be turned in, please bring them forward now. And if you've joined us on Zoom, please raise your hand. Okay, with that, I will close the speaker's list. We have two raised hands on Zoom, in addition to 29 in-person speaker cards, totaling 31 speakers on this item, Mayor. How would you like to allocate the public comment time?

Let's decrease the speaking time for each comment and see how productive that lets us get into the conversation.

Decrease to one minute per comment?

Right, for individual comment.

Okay. So as the mayor said, each of you will have one minute to provide public comment. We'll run the timer that will begin as soon as you begin speaking. I'll call speakers two at a time. I also understand that we might have some folks giving public comment in Spanish this evening. AND AS THE MAYOR MENTIONED EARLIER, WE HAVE SPANISH INTERPRETATION AVAILABLE FOR THIS ITEM. I DO ASK IF YOU'RE GIVING COMMENTS IN SPANISH TO PLEASE SPEAK SLOWLY TO GIVE THE OPPORTUNITY TO THE INTERPRETER TO INTERPRET THE COMMENTS, AND YOU WILL ONLY BE TIMED FOR YOUR COMMENTS, NOT FOR THE INTERPRETATION, THE ENGLISH INTERPRETATION. OKAY. LET'S GET STARTED. WE'LL CALL JOHN MENDEZ TO THE PODIUM, WHO WILL BE FOLLOWED BY AMY MENDEZ.

Welcome. Thank you for the opportunity to speak. One minute's not much time, so I'll jump right to the points. The reality is that the covered properties are owned by mom-and-pop landlords operating under very thin margins and struggling under the weight of inflation. driving up interest rates, insurance, repairs, cost, utilities, etc. And that doesn't even get into the increasing burdens of taxes. I urge the council to do two things. One, do not adopt this ordinance tonight and refer it to the ballot so that voters can have a fair opportunity to vote on it. Second, go back to EPS and require that they expand the report to cover the numerous other provisions in the ordinance that directly impact operation of the subject properties. Council should then inform the citizenry to reject the ill-advised ordinance, just like Half Moon Bay has recently had to do. The 9212 report is extremely narrow in scope. Thank you.

Thank you. Our next speaker is Amy Mendez, who will be followed by Jeffrey Schabowski.

Hello, good evening. I just want to say that all of us, I think, here agree that with the goals of promoting neighborhood stability, healthy housing, and affordability for renters, but this ordinance will not achieve those goals. The devil's in the details, and the unintended consequences will include shrinking of the housing stock that you're hoping to protect, an increase in costs for the city, landlords, and tenants, and a degradation of the quality of the housing and the character of the community. Thank you.

Thank you. Our next speaker is Jeffrey Schabowski who will be followed by Denise.

Thank you city leaders for allowing me to speak. On the 9212 report, two of the objectives were to cover existing state laws and policies. and in particular previous studies on impact of similar tenant protection ordinances. And I would have liked to hear about that every city that really attempted to do this has failed. They either adopted the ordinance and then it's been rejected, Concord being the most recent, Half Moon Bay, where they had to stop it because there's no more housing stock. Also Salinas, San Pablo. Too quick. So I would like to move to not adopt this ordinance. you're going to need four to ten million dollars from the landlords. We don't have that kind of money. You're going to end up with a slum.

Thank you. Our next speaker is Denise, who will be followed by Lupe Arriola.

So I brought one of my clients here tonight. She's a 95-year-old landlord, and she has... worked hard on her properties for over 50 years. And she said tonight to me, what about us? So what about the voice of the landlords? She has rented out places helping the Hispanic community with low rents A three-bedroom, one-bath for $2,400. A one-bedroom house for $800. And if you're asking the landlord to pay relocation in the amount of $12,000 plus another $6,000 for four months, that's $18,000. And you're basically... You're in the red because her $800 unit, that's only $3,200 rent for four months, or the other unit is about $10,000, and you're asking her to pay out $18,000 for these rents that are below market. So what about us? What about the landlords who are helping the community? Nobody's hearing us.

Thank you. Our next speaker is Lupe Arriola, who will be followed by Eduardo Torres.

Hello, good afternoon, good evening, council members. My name is Lupe Arreola. I'm the executive director for Tenants Together. We're a statewide tenant rights organization. And the reason I'm here is because I have been all around California and hearing the same thing from tenants everywhere. We are paying too much for our housing. We cannot sustain. This is unsustainable for us. Our wages have not gone up. commiserate to how the rents have been rising. This is unsustainable, it's unhealthy, and it actually creates crowded, unhealthy conditions. It causes people to have to commute hours to go to work. These are drastic times that require drastic action. And by drastic action, it means keeping rent stable and affordable to people long term. It should not be a drastic action, but it's one that is needed right now. So we urge you to accept this proposal, to approve this proposition, save the taxpayers the money of an election, and please approve this tonight. Thank you.

Thank you. Our next speaker is Eduardo Torres, who will be followed by Emily Morris.

Good evening, Council. My name is Eduardo Torres. I'm also from Tenants Together. I'm the Northern California Regional Coordinator. I actually drove out here tonight from Pittsburgh, which is in Contra Costa County, just to speak tonight to support the tenants. It's such an important issue that's happening across the state, as our Executive Director just mentioned. I just also want to point out that the cities out there of Concord and Antioch in recent years took the initiative to adopt a rent stabilization ordinance. And so I know that the city of Redwood City has tried to do that in the past. And so you have a perfect opportunity to adopt the ordinance tonight. And so I'm really encouraging the city council to listen to your constituents, to the folks who are not only going to get a chance to possibly vote for this in November, but also vote for future city council members who don't support this, right? So it's really important to listen to the constituents, to the voters, to democracy, because we know we're living in a time where democracy is being demolished every single day. Thank you.

Thank you. Our next speaker is Emily.

Before we go on to the next, I just want a friendly reminder to everybody that for us to be able to get through the meeting, there is no cheering, no applause. Please keep that to yourself. You're more than welcome to do jazz hands, something nonverbal, but just so that we aren't interrupting our next speaker, if we could contain that, that'd be great. Thank you.

Thank you, Mayor. Emily Morris, welcome. And Martha Beatley will be next.

Thank you. I'm a volunteer with Faith in Action Bay Area, and I'm among the many volunteers who collected signatures from the community to qualify rent control for the ballot. I went all over the city and knocked on doors. People I talked to, both homeowners and renters, were clamoring to sign. So many people I spoke to told me about how the cost of rent was out of control. We collected well over the required number of signatures to qualify for the ballot, and we know why. The cost of rent is way, way too high. Wages are not keeping up. People are working two to three jobs to pay the rent. Families are leaving. I love Redwood City for so many reasons, among them the vibrancy and diversity of the city. Rent control and tenant protections will help keep families together in Redwood City so it can continue to be the diverse, welcoming place that we love. This solution is needed now, and we can't afford to delay. Thank you.

Thank you. Our next speaker is Martha Beatley who will be followed by Clara Jekyll.

Good evening. Thank you. I support the rent control initiative because our neighbors need help to stay in our community and our neighborhoods benefit from the stability of long-term residency. I want kids to grow up in a home where they know their neighbors and where they have deep relationships with their school classmates. Rising rents cause families to feel economic stress, to look for less expensive housing farther away, and to double up in cramped living spaces. None of this is healthy for families. Rent control will give all of us in Redwood City the chance to share our city with a variety of residents, mechanics, nurses, teachers, firefighters, and others who want to thrive in the Bay Area, but whose salaries do not keep up with the high cost of living here. When we say climate best for government test, I hope that we mean economic climate, and housing climate, and a welcoming climate, not just the temperature on the thermometer.

Thank you. Our next speaker is Clara Jekyll, who will be followed by Alheli Kang.

Thank you. My name is Clara Jekyll. I've been a renter in Redwood City for 10 years. Everyone deserves a safe and dignified place to live, and the Fair and Affordable Housing Ordinance is a measure that stems out of years of Redwood City residents' experiences. It directly responds to the issues my neighbors and tenants across the city are facing, unsustainably high rents, harassment, and unsafe living conditions. These problems have led to families either being displaced out of the city altogether or forced into extreme measures like working two or three jobs to attempt to keep up with rent increases. The protections in this ordinance will help families stay in their homes, keep our neighborhoods and schools more stable, protect seniors and disabled people on low incomes, and allow essential workers to live where they work. It strikes a good balance for landlords to ensure a fair return on their investment and will reduce tenant turnover. This measure can be a real cornerstone for the diverse and thriving city we all want. I urge you to implement tonight, otherwise under your ministerial duty placed on the ballot for November. I'm really excited about the chance for us to do something really good for our city.

Thank you. Our next speaker is Alheli Kang, who will be followed by Andrea Gill.

I'm a community advocate and a youth development practitioner at Youth Leadership Institute. Our youth leaders have spent three years learning about how they can make change in their community, and when it came to an issue they cared about, it was housing affordability, and more specifically, rent control. We are here in solidarity with Faith in Action and in support of rent control. Our youth leaders and their families have gone too long without common sense protections. We urge you to adopt what the community members have put forth. Thank you.

Thank you. Our next speaker is Andrea Gill, who will be followed by Elizabeth Prado.

Good evening, Mayor Martinez and City Council. My name is Andrea Gill, and I'm here today with Faith in Action Bay Area and Youth Leadership Institute. I have the honor to work alongside youth leaders here in Redwood City. Over the past years, when asking them, what issues or challenges do you face in your community, it's always been housing. It's always about them envisioning, can I even stay in a city that I grew up in? And that is why we also partnered with Faith in Action, because in those places, they felt heard and seen of the words they couldn't say out loud. And many have shared fears of being displaced, and many find it hard to envision long-term housing because of the cost of living. We heard today that 46% are rent burdened. I just ask y'all, listen to the folks in the room and the signatures that were gathered of why we should pass of tenant protection and rent control measures. Families more now than ever need stronger protection to live a dignified life. Thank you for listening to us tonight.

Thank you. Our next speaker is Elizabeth Prado, who will be followed by Teresa Berriman.

Hi, my name is Elizabeth and I am speaking in support of strong rent control measures. Many renters are working overtime taking extra shifts and sometimes working two or three jobs just to keep a roof over their heads. Instead of being present with their families, they're forced to spend more time working. Speaking for the next generation, I'm concerned about what this means for us. Many of us might be unable to live in this city where we grew up. A city cannot be successful if the people who work here, study here, and hope to build their futures here can't afford it. Rent control is not just about housing costs, it's about community, protecting families, and ensuring that Redwood City remains a place where working future generations have a chance to live and succeed. I urge the council to implement rent control that provides stability and protection for renters. Speaking for many youth, as a teenager myself, I shouldn't have to be here worried about whether my parents have enough for next month.

Thank you.

Thank you. Our next speaker is Teresa Berumen who will be followed by Hyunmi Kim.

Yes, good evening council members. My name is Teresa Berumen. And I lived in Redwood City for over 50 years, and I'm a leader with faith in action. I urge you to pass this tenant protection and rent control measure today to protect families, seniors, and working residents from displacement. I have watched family members and long time neighborhood forced to leave the city because they could no longer afford the rising rents, including my elderly parents, which they had to move away because they couldn't afford it here anymore. When seniors are pushed out, they lose vital support networks and their health and dignity suffer. When workers and family members are forced to move further away, our local businesses and schools lose customers and students. Commutes get longer and community life weakens. This is not just for policy issue, it's for moral one. Protecting tenants prevent unfair and excessive rent increases. Please vote now.

Thank you. Our next speaker is Hyunmi Kim, who will be followed by Taylor Brady.

Good evening. My name is Hyunmi Kim. I am a senior housing rights attorney at Community Legal Services in East Palo Alto, also known as CLASPA. CLASPA, along with the Legal Aid Society of San Mateo County, represent almost all unrepresented vulnerable low-income tenants from every corner of San Mateo County who face losing their homes at the county of San Mateo's eviction court, also known as unlawful detainment proceedings, every Tuesday. We also regularly receive calls from the tenants in Redwood City asking legal advice or representation after having received on-law for eviction and rent increase notices. I personally represented several tenants from Redwood City, including a case involving a landlord who filed a meritless on-law for detainer suit based on illegal rent increase notice. In that case, I was able to successfully dismiss the suit. Every week, I directly witness how local-based tenants protection ordinances, for example, such as East Palo Alto renter stabilization and Just Cause eviction, the Mountain Views Community Stabilization Fair, greatly benefit the tenants. So I really urge the City Council to adopt this ordinance and protect the tenants. Thank you. Thank you.

Our next speaker is Taylor Brady, who will be followed by Nicholas Kennan.

Good evening, City Council. My name is Taylor Brady and I've been a resident of Redwood City for six years. As a public employee myself in Mountain View, I appreciate the stress of your job, so thank you for listening to us tonight. I urge you tonight to vote to adopt the ordinance as proposed. Rent control is an absolutely vital piece of the slate of policies that are needed to provide affordable housing, consistency, and dignity for the people of this community. There's a great asymmetry between the information available to renters and that available to landlords who are able to use algorithmic pricing and cartel-like behavior to exploit tenants. The people who make up our community and enliven it need safe and dignified housing. I hope that you show the courage to pass this measure rather than demurring this evening. I understand it's a politically safe option, but there has been a great and resounding call from the people of this community to provide safe housing. Vote yes. Thank you.

Thank you. Our next speaker is Nicholas Kennan, who will be followed by Sofia Gonzalez Rodriguez.

My name is Nick Kennan, District 6 resident. I'm here to speak in favor of the rent control ordinance. When I think about housing solutions and what we have to do, I picture this long timeline. At one end is the building of housing, which we are all deeply engaged in, trying to flood the system with housing to meet everyone's needs. But this is not a quick endeavor when it takes years to get housing built. So we move to the other end of the timeline with rent control, which we can implement more quickly. We need to bring people along when the overarching vision is supplying housing for all and the time that will take. People need that immediate relief in the meantime to prevent displacement. And there are political upsides to consider. With rent control and increased tenant protections, Redwood City residents will feel secure, not left behind, and more willing to allow change with respect to housing development. Thank you for your time.

Thank you. Next speaker is Sophia Gonzalez-Rodriguez, who will be followed by Amanda Chang.

Good evening. My name is Sophia Gonzales. I work at El Concilio of San Mateo County, a local nonprofit organization that has been providing direct services to the Redwood City community from our office down on Middlefield for over 45 years. Every day we see firsthand how the near 50% rent burden statistic plays out in our clients. A city rent control ordinance is a necessary and urgent step to address the needs of our community. High rents create economic strain for residents leaving less income available to purchase healthy foods or cover medical expenses. A lot of our clients come in for help with affordable housing applications, but even these can now be outside of people's budgets requiring monthly incomes up to $3,000 to $5,000. This reality is why we see our clients entering cramped living conditions, living as many as eight to 10 people in a two-bedroom apartment, or moving out east as their rents increase. I myself live in Berkeley in a rent-controlled unit. These conditions are not conducive to economic flourishing, let alone holistic stability or well-being. I ask the City Council to stand with the tenants and implement the ordinance tonight. Thank you. Thank you.

Our next speaker is Amanda Chang, who will be followed by Salvadora Herrera.

Good evening City Council. My name is Amanda Chang and I'm here as a staff member of Urban Habitat. We released a report on the impact of tenant protections in Redwood City back in April. I encourage you to read this. Among some of our findings in this report, we found that the average rent in Redwood City has increased 47% from 2010 to 2025. And that two out of three low income families are paying more than half their income on housing up just from 44% just 10 years ago. And approximately 40,000 people could have increased housing stability through just cause and anti harassment protections, which is about half the city. This includes nearly 5,000 children under the age of 18 and over 6,000 seniors. And approximately 22,000 people in Redwood City, a quarter of the population, could be protected by rent stabilization. You can vote to approve this measure now or wait for November for the ballot for the people to pass it. Thank you. Thank you.

Our next speaker is Salvador Herrera, who will be followed by Michael Pierce.

Buenas tardes, señores del concilio. Mi nombre es Salvador Herrera y estoy en la organización FEACCION, por lo cual nos hemos unido porque estamos viendo el aumento de renta y luego... Cantidades de ancianos de la tercera edad que no tienen donde quedarse, donde tener un lugar, porque la verdad ya para ellos es muy difícil pagar una renta de 2,000 dólares. Y queremos para ellos un lugar digno y para todas esas familias, para todas esas mujeres solteras que tienen hasta 3, 4 niños y solo ellas trabajan. Yo creo que es justo que nos ayuden a que esta ordenanza se lleve a cabo, que ustedes se unan con nosotros porque hay mucha necesidad, hay mucha familia que está muy mal. Yo creo que ustedes han visto los lugares, no solo los drogadictos están durmiendo en esos lugares, están durmiendo familias sanas porque no tienen donde dormir, no tienen un lugar digno. Y es por eso que estamos unidos, todo este pueblo que miran aquí, estamos todos unidos. Gracias.

Thank you. And now we'll hear the English interpretation of the comments.

My name is Salvador Herrera and I am a resident of Revolt City. We're here and I'm part of the Faith in Action and we're here because we're seeing the increase of rent and also a lot of elderly people that they do not have a place to stay. They don't have place because honestly for them it's very difficult to pay a rent for $2,000 and we want for them a good place for all those families for all those single moms that have like three four four kids And it's just them working. So I think it's fair for you guys to help us for this ordinance to pass, for you guys to be with us because there's a lot of need. There's a lot of families that are doing bad. I think that you guys have seen the places. Not only drug addicts are sleeping in those places. Healthy families are sleeping in those places because they don't have where to sleep. They don't have a good place. So this is why we are here, all of the cities that we're here, we are all united. Thank you.

Thank you very much for that. And we'll move on to our next speaker, Michael Pierce, who will be followed by Connor O'Brien.

I'm Michael Pierce, chair of the board of the St. Francis Center, our nonprofit in Redwood City. We operate 267 units of low-income housing in San Mateo County, 90 of which are in the city of San Mateo. Redwood City. I'm gravely concerned about the impact this will have on nonprofits like us and others because of the impact. If we lose our property tax abatements, it grossly affects our ability to continue to operate low-income housing, and that risk is very great under this proposed ordinance. I urge you to go back and revisit the 92-12 report and really study these impacts on other low-income housing providers. For the St. Francis Center alone, that would be $468,000 a year across our five parcels in Redwood City if we lost those property tax abatements. dictates the removal of rubs. We have voluntarily lowered rents for tenants in order for them to participate with utility costs. They'd have no incentive to lower costs. Under this ordinance, our rents would be capped absent those costs because there's no provision to add that back. So it's a grave concern for us and other low-income housing providers. I think this is ill-conceived in the way it's formed. Thank you.

Thank you. Our next speaker is Connor O'Brien, who will be followed by Mayor Slacky.

Good evening. My name is Connor O'Brien. I am a member of Silicon Valley DSA and have been, as a volunteer signature gathering for this initiative, have been hearing from residents here about the urgency of adopting it. I'm also a resident and renter in Mountain View, where this year we'll be celebrating the 10th anniversary of winning our own renter protections and rent control. And so I wanted to speak to the benefits that we've seen from that in terms of residents gaining stability, gaining some peace of mind that unexpected rent increases or unjust evictions won't displace them from their neighborhood. One testament to that is that four years into our adoption of rent control in 2020, voters had the opportunity to weaken the measure and overwhelmingly chose to maintain it by a margin of a 70% majority. So I think that looking to that experience, you have the opportunity now to allow renters to benefit immediately from the same protections that have been such a benefit to the tenants in our city. Thank you.

Thank you. Our next speaker is Mayor Slyke, who will be followed by Vasily Morrison.

Hello. Mark Slakey, for the record. But Mark Slakey, I'm a lifelong resident here in the Peninsula, renter here in Redwood City, a member of Peninsula DSA, and a local leader for this campaign as well. From my point of view, this is the bare minimum we can do for renters at this point. We are well behind an insane affordability crisis. We talk a lot about who can afford what. I'll give you some simple numbers. I work at the cafe across the street at the yard. I've had the pleasure of serving some people in this chamber, many of my community members. We make $19 an hour. That is minimum wage. If you have a studio apartment like mine, which is the cheapest one in Redwood City, you're paying 19.29 for rent. That means that almost 90% of your income is going to rent. It's unreal. We cannot afford to not pass something like this. Beyond that, Last I checked, it's citizens who have voted you in, not investors, not the investments that could be affected, not affordable housing providers even. I love what they do. However, it's 48% of the population will be affected immediately by this rather than the 1,000. Thank you, Mark. Thank you. Thank you.

Thank you, Mark. Sorry about that. Next speaker is Vasily Morrison, who will be followed by Paul Bocanegra.

Hi, I'm Vasily Morrison. I'm a member of Silicon Valley DSA. I have members of my community and family that have been personally affected by rent evictions and had to have families who have not been able to afford housing. They've had to stay in my house, my family's house. I am fortunate enough to have my family own a house. Hundreds of thousands of people of this community do not have that affordability that many landlords here do, who have more than one housing and aren't able to rent said housing out to other people. thousands of workers in this community who provide the teachers, who provide the construction labor, who could provide the value that the thousands that the landlords here make benefit from with their land raises and rents. This rent control measure would provide those laborers with the ability to stay in this community and not have to worry about their rents increasing and have to worry about getting a second or third job just to stay in their house. Thank you guys.

Thank you. Our next speaker is Paul Bocanegra, who will be followed by David Gonzalez.

Good evening, Mayor Ceballos, council members. My name is Paul Bocanegra. I am executive director of Unlocked Futures. I am also a homeowner and a landlord. We need to pass rent control. As executive director of Unlocked Futures, I work with system-impacted youth. Many of these youth do not know if they're going to be living in the same location that they did when they returned home. Many of these youth are also willing to work at 14, 15 just to be able to assist their parents to pay rent so they have extra money for... food and clothing. This is a problem. We have thousands of voters who have already signed on to this and I believe that we should adopt this tonight and be leaders in rank control rather than continue to trail in the Bay Area. Thank you so much. Good night.

Thank you. Our next speaker is David Gonzalez who will be followed by Rovi Antonio.

Good evening. Good evening, city representatives. My name is David Gonzalez, and I moved here in 2022 to the beautiful Redwood Shores. And every year I experienced a rental increase of 10% until I could no longer afford to stay. Each time I would see the vacant neighboring units on their online website being priced hundreds of dollars below what they were asking me to renew with. So I know for a fact that this was not due to increasing costs. City representatives, I implore you to pass this ordinance now and protect your constituents from algorithmic pricing and greed and supply and demand. I promise you we won't forget this. Thank you.

Thank you. Our next speaker is Rovi Antonio, who will be followed by Fernando Pena.

Good evening, Mayor and City Council. Roe v. Antonio with the California Apartment Association, a non-profit trade association representing rental property owners in Redwood City. Tonight we are asking you to slow this process down. This is not a city-sponsored measure. You did not write this. Staff did not write this. Unless you were in the room when these 46 pages We're drafted. You cannot know tonight whether the city has fully understood every consequence. In fact, tonight is the first time that this has been presented to the city council to have a public discussion. The 1912 report is useful, but incomplete. It analyzes rent control, which is fewer than two pages, but more than 40 pages create rules affecting single family rentals, condos, accessory dwelling units, mobile homes, and affordable housing. The rules include relocation payments, owner move-in restrictions, and renovation restrictions. Due diligence require more than a partial report. Before taking final ballot action, you need to study the full fiscal, housing, and economic picture. Thank you.

Thank you. Our next speaker is Fernando Pena, who will be followed by Stephen Howard.

Good evening, Mayor and Council Members. My name is Fernando Pena here on behalf of the San Mateo County Association of Realtors. The proposal caps rent increases at just 60% of CPI, ignoring the reality that insurance, maintenance, utilities, property taxes, labor, and regulatory costs continue to rise far faster than that formula allows. It also calls for increased taxpayer expense and imposes significant new regulations beyond rent control that could affect a broader range of housing in Redwood City. While section 9212 analyzes the rent control provisions, it does not fully evaluate the economic impacts of these additional regulations. I respectfully request that the council direct staff to prepare a supplemental section 92 analysis so voters can fully understand the potential impacts on housing availability, production, and on our local economy. Redwood City residents deserve balanced, objective information before casting their ballots.

Thank you.

Thank you. Next speaker is Stephen Howard, who will be followed by Nancy Moya.

Good evening, counsel. This ordinance will have significant unintended consequences too numerous to mention in one minute. The organizers have very good intentions but are naive about basic economics and the laws of supply and demand. Rents are what they are due to supply and demand. In order to increase If we want to decrease the rents, we need to increase the supply. So you want to do as much as you can to encourage developers to come into your community, not discourage them. If you have less development, you will have less supply, and therefore you will have increased prices of rents, exactly the opposite of what the organizers had intended. We need to look no further than the price of eggs and the price of gasoline as far as what happens when supply is reduced. California is already the most tenant-friendly state in the country, and there are plenty of protections in place. I would urge you not to support this measure and let it go to the ballot, and hopefully to educate the public of the damage that will do, including the people who have put this forward. Thank you.

Thank you. Our next speaker is Nancy Moya, and I can give you a handheld microphone as well.

Buenas tardes. Mi nombre es Nancy Moya y estoy aquí en representación de mi hija. Nosotros vivimos en un departamento que cuesta $3,500. Es compartido, dos recámaras, un solo baño, en el segundo piso, sin patio, ni balcón. Mi esposo trabaja jornadas laborales de 12 horas por la noche, seis días a la semana para cubrir los básicos para nosotros. Yo no puedo trabajar debido a que mi hija necesita supervisión 24 horas al día, siete días a la semana. Thank you and now for English interpretation. Good evening, my name is Nancy and I'm here

We are here because we live in an apartment that the rent is $3,000 and it's a shared unit, two rooms, one bathroom and the second floor without a patio nor a balcony. So my husband works 12 hours a day, six days a week just to cover basics. us so I cannot work because my daughter needs supervision 24 hours a day seven days a week so we are here because we are concerned we are very concerned that we don't have enough to have a savings account for emergency so for whatever comes up and we need to we need we need affordable housing for people with disabilities thank you very much

Thank you. And that concludes our in-person speakers. We'll move now to our two speakers on Zoom. We'll start with Becca Kehler, and following Becca will be Mae Lamb. And Becca, you may unmute yourself and begin your comments, and the timer will begin when you start speaking.

Thank you. My name is Rebecca Keeler and I grew up here in the peninsula. I've been a homeowner here in Redwood City for the last 20 years. I also serve in our community working with underserved youth and working with Unlocked Futures. And I'm in solidarity with Faith in Action. I want to tell you that I have seen so many of the families I work with be displaced. I have seen so many of the children be upended from their schools and their places of living. And I've seen them with multiple families in the same home. This is not something that can continue. One way or the other, we have to find a solution to this. I ask you please to pay serious attention to this tenant rent control and please take action on it immediately. Thank you.

Thank you. Our next speaker is May Lam.

Hello.

Hi there. We can hear you.

Oh, hi. So thank you for this time to speak. So I just wanted to say, you know, please do not adopt the current proposed measure. Let me echo what other small business owners have pointed out. This is a very restrictive initiative as it would greatly hurt small mom and pop landlords. The burden on small businesses will be unsustainable. This is not the solution. We do need better help for our tenants, but this is not it. You certainly will reduce the amount of affordable housing available in the city. Thank you for your time.

Thank you very much. And that concludes public comment. Mayor, back to you.

Thank you, City Clerk. And again, thank you to everybody who made public comment this evening, shared your time with us, whether you're in person or joining us online. And we'll bring it back to the dais for council discussion. Who has any questions they'd like to start us off with?

Council Member Sterk. Thank you, Mayor. Firstly, thank you to everyone who spoke this evening. I really do appreciate your input, and I also saw a lot of the emails come through as well, so thank you to those folks who wrote in. Initial question I have with regards to the fee is what flexibility is there, if any, to reduce the fee for affordable housing providers, non-profit affordable housing providers?

I'm actually going to ask our city attorney to answer that question. Thank you.

Thank you, Ms. Lancaster, and thank you, Council Member, for the question. So this ordinance is, if adopted by the council or sent to the voters and adopted by the voters, is an ordinance adopted by initiative petition. And the city council is limited in its ability to change substantively the ordinance. So what we need to do is we need to look at the ordinance itself to determine what flexibility the city has. If you go to section... If you go to section 42.14 D, it identifies how the rental housing fee may be adopted. And it makes very clear that the city council shall finance the reasonable and necessary expenses of the program by charging landlords an annual rental housing fee. That the council shall ensure that the rental housing fee is set at a level sufficient to fund the duties and responsibilities under the program. And then it says that the program and staff to enforce this chapter shall be funded only by the rental housing fee and not from the city's general fund. So understanding those limitations is critical in understanding what we can do. If the ordinance is adopted, the city will need to conduct a fee analysis in order to determine what the ultimate rental housing fee will be for those landlords. And whether the city could exempt, waive, reduce fees for affordable units will depend on this fee analysis and the ordinance's limitations, as we will need to ensure that any exemption reduction waiver would not disproportionately impact other landlords.

Thank you very much. That's very helpful.

since the mayor is momentarily gone, do any of my other colleagues have additional questions, clarifications, or if they want to start with comments? Council Member Gee, please.

Thank you. Excuse me. Thank you, Vice Mayor. And thank you, everyone that emailed, came here, and offered comments online. I want to preface my inquiries first by saying this is the first time, or when the packet was posted on Thursday, is the first time council got at least a lot of information about the proposed initiative. Up until then, we haven't seen this. This is the first time. So we've had only since Thursday afternoon, I think, when this was posted into tonight, to kind of absorb the details, the emails, the letters, and the substance of the proposed ordinance. So we have had not a lot of time to dive into it. So I want to thank everyone for helping us try to understand both sides, all sides of the issues. But I have a lot of questions given the short amount of time we've had to really dive into this. So I'm not going to try to guess who's going to answer the questions that I have, but I suspect it's going to include staff or city attorney or city manager and our consultant. So the presentation will sort of help answer this, but I want to make sure I understood the 40-something pages of the proposed ordinance and all the other associated documents that we even were getting this afternoon. which is kind of hard to absorb if we got it at 2 o'clock and our meeting's at 6. And I think most of us still have a regular job to take care of. So my first question is to our staff, does council have all the information or are there any missing documents that we don't have? Because that's what my questions are going to be based on, what we have. If so, if there's something that we don't have, my apologies ahead of time.

I'm not aware of any missing documents.

Thank you. So I'm just going to start to dive in, and my apologies to my colleagues here. I've got a whole long list of questions. Feel free, Mayor, to cut me off any time you want. It appears, and I think you had this in the slide between yourself, Elaine, and Jason, that if passed, While the rent control portion may not apply to a lot of post-1995 properties, the TPO, as proposed, does apply to more properties than the city's ordinance, including ADUs, single-family homes, mobile homes, and non-owner-occupied single-family homes. Am I reading that correctly?

Can you rephrase the question? Are you referring to the city's tenant protection ordinance or the...

The proposed ordinance would apply the tenant protections to these other properties I just listed.

Yes, like, sorry, I'm getting confused with TPO in our city ordinance. Yes, so this is the slide. So fully covered, and this is just related to the proposed ordinance. Correct. Means rent stabilization plus all of the other requirements. So that's inclusive of just cause, relocation, right to return. Partially covered under the proposed ordinance means those rental units are only subject to the just cause provisions, the right to return provisions, the relocation provisions, all the other ones besides rent stabilization.

All the other ones other than the rent stabilization. So I did read that fairly correctly.

Correct, yes.

So then now I'm going to pivot into the EPS report. So between you and Jason, maybe you can tag team things here. Alin just mentioned a whole bunch of stuff. And I couldn't find in your report, Jason, about the effect or impact of those operating costs on property owners. I mean, there's a lot of regulations there that Alin just mentioned. Was there a clear assessment about the cumulative impact on operating costs for property owners?

Some of those are very difficult to quantify, and our analysis was done primarily on secondary research and available data. And so estimating the cost of some of the, other than what's clearly in the ordinance, like how much you have to pay for a relocation, we did not do a detailed estimate of how much some of the other tenant protection components would affect a landlord. That was not...

we did not have the schedule and scope and resources to do that during the analysis so we didn't detail do that detail analysis of those items would it be safe to assume that there are going to be financial impacts to property owners beyond the rent stabilization component

There will be financial impacts for sure. But they were not quantified. Yeah, estimating those would require more analysis than we were able to do during the first round of this analysis.

And you can say it wasn't in my scope of work. That's fine. I mean, I know this was done in a very short amount of time. on a very limited fee basis. So that's okay to say that.

Two and a half months we did this, and so it was, there were, you know, that would require a fair, to do that analysis would require interviewing property owners, doing a lot of case studies of examples of where this is occurring.

But it's doable?

It's doable, yes.

Okay, but was it in your scope?

It was not in our scope. That's fine.

Similarly, and this is consistent with the way I look at even our impact fees on developments, I have been a strong advocate for assessing the cumulative impact of policy, ordinance fees, assessments, and utility costs on businesses. I wasn't able to see the cumulative impact of all these other things on the property owners. Was there? Did I miss it? Or was it out of scope and not able to do in the compressed amount of time?

When you say cumulative impact, do you mean other policies that already exist?

Policies that the council adopts, increased utility costs, business license tax increases, the cumulative impact of all the things we do here at the dais on businesses. Was there an assessment on the cumulative impact on property owners if this were to move forward by either council or the voters?

Our analysis focused on the incremental impacts of this particular ordinance, not on the cumulative. So the answer is no, we did not look at the cumulative impacts. We tried to focus on the incremental impacts.

Is it possible to do that, given more time and more fee?

I'm going to say tentatively yes, depending on the scope and the time frame. I know we have an election in November, so.

Beyond that, I'm not asking about, you know, is it doable?

It is doable, yes. We'd have to define the scope, but yes.

And again, at this day, we have approved a series of utility cost increases, sewer, solid waste, water. But the way I read the ordinance proposed, those are not able to be passed on to the tenants unless they're separately metered. Am I reading that correctly?

That is correct.

So again, I go back to when you look at the operating impact on property owners, the cumulative impact, and the utility cost increases, there's got to be a financial impact on the property owner, at least administration, that I couldn't find the analysis in the report because it probably was out of scope or you didn't have enough time. Am I reading that correctly?

Yes, we did not do analysis of the cumulative impact from all those other regulations that you mentioned or policies.

Okay. And Jason, your presentation, you started to kind of convey the potential impact of this ordinance on our nonprofit affordable housing providers. I didn't see anything about Section 8 vouchers. I didn't see, I think you had a slide about the growing gap over five years. I think you said $937 rents would be falling behind at least capital replacement. I think that was your slide number three. What happens with that continued falling behind? What does that do to the property condition?

Yes. Are you talking about the market rate or deed rejected affordable?

It was your slide three? Yes, this one.

This was referring to all units, not just affordable.

What happens with the continuing falling behind? Pretend it's 10 years or 15 years that continue falling behind. What's the impact on the property?

And this would apply for units built prior to 1995. So yes, it would make it difficult in some cases for the property owner operator to recover those increased costs without a doubt until the unit is vacated, in which time the property owner can then can then go back to the market rate, kind of do it. If you're a market rate unit, you can charge the rent that the market will bear once the existing tenant leaves. If you are an affordable housing operator, you don't have the liberty to charge market rate. You have to go with the area median income restrictions of the affordable unit.

We did hear from at least one non-profit provider, the St. Francis Center, about falling behind and the impact potentially on. Was that kind of analysis covered in your report? I think it was hinted at, but I didn't see depth in the report.

That particular analysis is going to be unique to every single property, right? So it's generally true that if you are not able to raise your rents with the market, you are likely to continue to fall behind. The way in which it will impact the financials of any given property may differ depending upon their own operating budget, to what degree they have deferred maintenance issues, what their existing rents are, the turnover. There's many factors, variables that would go into the calculation for an individual property owner, but I think it's fair to say that in general you would fall behind and you would not be able to keep up with your operating expenses over a longer period of time, particularly if you do not have tenant turnover.

So I guess keeping up is a formula of tenant turnover. If I hurt you, the converse of what you just said, the only way to keep up is tenant turnover, which isn't the intent of this initiative. It's to provide housing stability, not tenant turnover. I'm just trying to make sure, using Jeff's language, I understand what's in the initiative and the analysis. Also, the administration fee, I believe, cannot be passed on to the tenant. Is that correct?

That is correct.

So in your analysis, the $120.84 is... substantially less than what it would cost to actually, and even at the higher number, cannot be passed on to the tenants. It's gotta be absorbed by the property owner and its administrative burden or whatever you wanna call it. And again, going back to my earlier question, that cumulative impact has gotta have an impact somewhere. Whether it's $500 per unit per year or $1,000 per unit per year, there's gotta be an impact somewhere. And it wasn't, it was just lightly touched on I guess about the cumulative impact. There is one but it wasn't, too deep?

Well, the cumulative impact is essentially the fee times the number of units you have. So every project has a different number of units. So the cumulative impact would be the number of units you have times the fee. We haven't finalized what the fee would be. If this is approved, there would be a study doing that. And so every property owner would say, well, if I have 100 units and it's $500 a unit, the math is $50,000 in that case. So there's going to be impact. But it'll vary for each particular unit.

But based on your previous report on TPO here, I mean, can properties owners absorb that kind of fee burden on an annual basis?

Well, it would be more difficult for affordable housing owners to do so because they can't pass it on rent even when the unit is vacated. For post-1995 units, they may be able to pass those costs on. They can't do it directly because that would be illegal, but they can do it once the lease that they have with the current tenant expires. They said, well, now you have a new lease and here's our new rent.

That adds a dimension of complexity to their operating pro forma though, doesn't it? And on the pre-1995 affordable housing, would that constitute a force majeure that the funders could argue that they're out of compliance with their pro forma? Because competing for low-interest housing tax credits is a competitive basis. It's based on areas of economic desire and need. It's based on a rental pro forma. It's based on a lot of different things to be competitive and to be awarded those tax credits and other funding grants. So if we change the community changes or the council changes the rules, would that put some of the projects potentially in jeopardy because the funding requirements and the pro forma were changed?

I can't speak definitively, but we would need to evaluate our own affordability restrictions on those properties along with their funders. I can't speak to what actions those funders would take, but there could be potential conflicts between what is in the proposed ordinance and what's in existing affordability covenants.

Thanks, Lynn, for stepping into that. Who has responsibility and liability for that conflict? And it's okay to say I don't know right now.

It's a really good question. You know, I think, yeah.

That's okay to say I don't know. I mean, this is a very short time frame. Again, we just got this stuff. I just got the packet Thursday and spent my weekend reading and I had all these questions that... You know, and we got letters that ask some pretty significant questions too. It's okay to say I don't know and we need more time or whatever, but this is kind of important stuff. Because this is a big, I think this is a big issue for the community as the community has told us. It's a big issue.

Thank you, Council Member Gee, and you're right. I don't have an answer. It's something that we would likely need to look into. It might be that we won't have an answer, right? It will be dependent on what each of the funder's requirements are. We do have Ms. Tiedemann on, and I know she does quite a bit with housing, and so I do want to provide an opportunity, if she knows how this tends to work, from other agencies' experiences before we let you know that we don't have an answer for you.

Hi. Good evening. Karen Tiedemann with Goldfarb and Littman. I think the issues that affordable housing developers are going to have is essentially what Jason said. Eventually, this is going to impact their operating income because they're very limited and they can't raise rents when units turn over the way that non-regulated landlords can do. So my guess is that there are going to potentially be requests for additional subsidy for operating expenses long term. But once again, it depends on each project and property and their operating expenses and the multiple sources of funding that they currently are accessing.

Thank you. Is it safe to say then that there's potential unintended consequences of this proposed ordinance or initiative? Or the potential for unintended consequences?

Yes. I mean, I think that the The impact on affordable housing is something that will have to be looked at if this were adopted in the long term. Not a lot of rent-controlled jurisdictions cover affordable housing, housing that's restricted in how it can raise its rents.

Is that unique to this initiative here in front of us?

I don't want to say definitively that is unique.

Not typical.

Rent control jurisdictions cover some subsets of affordable housing. This one. doesn't have any exemptions for any type of affordable housing unless it's owned by a governmental unit. That's the only exemption. So that is a little more restrictive than anyone I can think of at this moment.

Thank you for that. And Mayor, I have a whole bunch more questions, but I want to check in with my colleagues. I don't want to monopolize the time. May I continue? Please continue. Thank you, Mayor. You know, we heard from a speaker tonight where, you know, we have had a long-standing community benefits program, and that has filled the pipeline of affordable housing, and this has been a council strategic priority, particularly at the lower income and ELI, extremely low income levels. One of the properties as part of the community benefits was to purchase an exempted rental property and donate it to a non-profit, and it was deed restricted. under this proposed ordinance initiative, is that a viable option anymore, given the dynamics you just shared about not being able to keep up, falling behind, not be able to capitalize, things like that? And it's okay to say, I don't know, it's not in scope, but it requires further analysis, it's okay.

I can't speak to all the viability, but I think for future projects, if this is approved and there is a fee, that will have to get factored into project performance, which in turn would likely show that projects need additional public subsidy, whether that's from the city or other funding agencies. So it would factor in, but they would be able to factor that in, I think, before making any viability decisions.

So maybe not remove it as a viable option, but make it a little harder because of the financial performance.

Potentially, yeah.

I'm going to pivot to TEFRA. I mean, we've had, as a council, been brought items for TEFRA financing on affordable housing, not only on new construction, but also on... major repairs like the Woodside Fire and the taxes and financing mechanism. Would this proposed initiative affect TEFRA or TEFRA consideration of financing projects in Redwood City?

I will say we have not researched that question. So I don't have an answer for you for that.

Because if I recall correctly, one of the properties on Woodside Road, the major, I think it was Hallmark House, got TEFRA funding to rehabilitate and renovate and bring that building up to code and return it to affordable housing. This is not only new construction. That was a pre-1995 building. And would that count as pre-1995 in its renovated state or post-1995?

That is a good question. I don't know if any of our legal counsel knows how Costa, Costa Hawkins is based on when you got a certificate of occupancy. So I don't know if the new certificate of occupancy post renovation completion, if that would be considered the first or if the original certificate of occupancy.

Sorry, excuse me. There's a series of cases on this. The courts actually look to when it was first used for residential purposes as opposed to if a new certificate of occupancy is issued after a renovation. So in your example, yes, the units would be covered if they were occupied residential units before 95.

Which they were in the case of the Hallmark House. As well as the other unit across the street that burned down or was severely damaged by fire. So in both cases, they would be covered as pre-1995. Karen, thank you. Jason, I'm trying to reconcile a couple things here with the initiative saying no city funds are to be used. But in the report, it says there's startup fees. Um... There's an administration rate of $120 or 84, two tiers. I think your report says substantially below the level needed to cover the estimated midpoint program cost. And it further goes that the city would likely further incur additional administrative expenses not captured in this analysis, including staff recruitment, onboarding, and long-term obligations such as pension liabilities. So how do I reconcile no city funds with what you found in the report as well as the additional cost for office space and all the other things? How do I say no city fees or no city general funds but yet these expenses and real costs aren't included and captured?

The ordinance does say the city may front fees. And so, and I might look to our finance director to explain how this works, but my understanding is we would be able to essentially loan the program money from a different fund that would eventually need to be repaid back through like an inter-fund transfer. And I'm not probably explaining this quite accurately, but there is a mechanism where we can front fees up front to implement the program, and then they would need to be, I believe, repaid by the fees.

And I know our finance director here, is that loan interest-free? Or will you apply internal interest to internal borrowing?

That is a very good question. In trying to digest the terms of this, there's a question of the startup fees and whether the startup fees could be fronted by the city and whether that would need to be paid back or not. The language is a little bit unclear. But whether it would need to be paid back or not, the challenge is that We, the ordinance contemplates not using the general fund, but we can't use our other funds either because our other funds are restricted. So if we are in a situation where the fees aren't enough to cover the program costs, either from a startup perspective or on an ongoing basis, we would be in a little bit of a pickle, if you will, of how... of how you would fund that because the one source that has the flexibility to do that, and I'm not saying we have the financial flexibility, but the legal, the fungibility to do that is the general fund. But yet we're not allowed to use the general fund, so it becomes a little bit of a chicken and egg thing. And so that's something that we would have to grapple with. do you scale the program back or not? And a lot of this starts to happen in real time. So it does potentially present an administrative and financial challenge.

That, you know, Beth, thank you for answering that, because I couldn't reconcile no general funds, but not all costs are included. And we've worked really hard, not just this council, but prior councils, to manage our unfunded pension liabilities, and that's not even included in this analysis or in the fee. Is that, did I read that correctly?

I can't speak to that personally based on my review, but it would certainly be something we would want to consider, yes.

I mean, I think the EPS report says it explicitly that it does not include potential long-term pension liabilities. Did I read that correctly, Jason?

Yeah, that's correct. We did a very quick calculation of the potential cost and to the extent that the wardens is approved or the measure is approved, there would need to be a more detailed analysis to get a fully loaded cost and not a midpoint but an actual estimate.

I mean, I know tonight's budget night. I mean, to just maybe, what if, is really hard when... when we get to the budget conversation next and the agenda, we see declining revenues and long-term deficits pending any proactive action by this council. And so that's why I'm just struggling and reconciling that. And to say there's no claim on general fund yet, Long-term pension liabilities aren't there. It's not fully loaded. And another big question is if there's any litigation on this, who pays for the litigation? Is it the proponents?

The city would pay for it.

And where's the city money from that?

It will be from the general fund.

So is it inaccurate to say there's no general fund commitment?

I think this ordinance really presents a math problem for the city in that we cannot use general fund for the enforcement of the program or the regulation of the program. We also, if this were to be adopted and the ordinance were to be challenged, the city would need to defend that. And of course, we wouldn't have any fees yet that we have collected. So it will have to be the city's general fund that will pay for the defense of this. It's one of those awkward things that when we've talked about it, we can talk about how the city, and by the way, the ordinance provides provides that the program and staff to enforce this ordinance shall be funded only by the rental housing fee and not from the city's general fund, which I read to you earlier. It does follow with, however, the city shall fund any necessary funds until the city has collected such fees. And so I really do believe that the general fund is going to fund all of the startup costs and any litigation that may ensue until fees start getting collected.

Thank you, Veronica. That kind of segues into a follow-up question to Council Member Sterkin's question earlier. This is potentially a voter-approved ordinance. And I've heard stories that the proponents of this ordinance may be negotiating a proposed implementation plan to either reduce or exempt affordable housing providers from some of the requirements of the ordinance. Can that happen or can staff change it or can council change it because this potentially is going to be approved by the voters?

And even if the council were to decide to adopt this ordinance in lieu of sending it to the electors or to the voters, we would still be under the same limitations on the fact that the city council cannot amend this ordinance without sending it back to the voters. So it doesn't matter whether it's adopted by the council or it's sent to the voters. And I understand that maybe there's been statements made, but based on this language's limitations, we really do need to ensure that should there be any waivers or reductions in fees for the affordable housing units, the city cannot... backfill with general fund money. So we need to find a way to, we would need to find a way and we're really limited based on what the ordinance says. So I don't see how that can be done, but like I mentioned to Mr. Sterkan, to Councilmember Sterkan, it's something that we would assess along when we do the fee analysis.

I just have a question about that question. We cannot change this ordinance in any way, is that correct? The 4,000 people that signed the petition signed the specific ordinance, you know, So we can't just willy-nilly choose what we decide to keep or they can't willy-nilly decide to change it in any way, correct? That is correct. The ordinance is either the way it is right now forever and becomes law or it doesn't, but we can't pick and choose anything.

Is that right? That is correct. The ordinance gets adopted as is and remains unless and until it is amended by the voters again.

Mr. Gee, maybe I didn't understand the question. You were saying there's some rumor that affordable housing people are going to be exempted, but I'm hearing from the city attorney that's impossible. So...

That doesn't mean that they're not trying. I'm just trying to understand the boundaries of what is going on. I mean, we were given an implementation plan and I've been hearing stories that the proponents and the affordable housing or the proponents are trying to negotiate exemptions or reduce fees for affordable housing providers that are not allowed in the initiative for council. And so that's the part I'm trying, we can't change it. Any changes to the initiative require voter approval. You can't do it in the back room, you can't do it in the implementation plan. If we wanted to exempt affordable, non-profit affordable housing providers, it would have to go back before the voters. We can't do that, staff can't do it, and the proponents can't do it. As you indicated, it's what's in front of us. We can't change it.

Did I say that fairly correctly that is correct there are places where in this ordinance is an example of it to their places where the ordinance doesn't speak to something and so the city could fill in where there's you know where where something is not covered, but we definitely anything we do in implementation or in the program would need to be consistent with the ordinance and its limitations. And again, the ordinance's limitation provides that this program will be funded only by the rental housing fee and not general fund.

Thank you for that. I want to follow up one more thing that you shared, is that when we talk about differential fees, I mean, to me, this is sort of like our utility fees. And I believe the voters passed the state law that certain users are not allowed to subsidize other users. So are we walking into that state law also, that a two-unit provider can't be subsidized by an eight-unit provider in their fees?

That's exactly what the fee analysis would need to determine for us and why I said that we can't definitively answer this. But any study we do on determining what the fee is will need to ensure that we don't disproportionately impact one type of housing provider as a result.

Great. Thank you. And then as we heard and received email, we had a lot of questions from different organizations. Are we able to answer those questions tonight? HLC, Housing Leadership Council, SAMHSA, the Chamber, California Apartment Association, SAMCAR. There's a whole bunch of questions. Do we have answers for all those questions tonight?

no uh we're not able to answer those tonight in depth i i think we've answered a couple of them a couple yeah but but not you know we get into hud vouchers and how those would be and which is a vital resource for funding new affordable housing so um no i think those would be in my opening remarks that i talked about a potential information coming back we'd like to delve into that We've been focused on just trying to get agendized, similar to what you had said, not excuses, but some of those questions are really nuanced in the weeds on how pro forma would work in an operating budget that deserve to be answered.

Well, and the HUD vouchers, Section 8, I mean, we don't control those, the requirements. Those are mandated from beyond high, and we can't change those requirements.

Correct. And keep in mind any development that has HUD vouchers already has a previously recorded restriction. And I don't know how that would play, you know, a restriction that obligates certain repayment obligations and whatnot. And it gets into some of the questions you talked about earlier on how an underwriter could underwrite a deal like that. I'm not sure there's somebody in D.C. that says, oh, we're fine, you know, with this. Because keep in mind, any local payment that doesn't go to the project goes away from current debt service.

Thank you, Patrick. And then, Lynn, there's one additional question that you talked about on your slide 17 about implementation. And you talked about if this were to be approved by Council or the voters, I think you used the term deprioritize other city initiatives. And that... most likely it couldn't be implemented within 10 days after approval. So there's two things there. One is, what do we have to not do if this were to be approved? And two, are there any penalties if we don't implement fully the ordinance as written within the 10 days?

I will say we've not done a deep dive into this, but I think anything that is not mandated for like the housing division at the state or federal level, we would basically need to drop to start working on this. I imagine staff from other departments such as city attorney's office, revenue services would also need to deprioritize work to get the proposed fees in place and do anything like that. In terms of what are the consequences if we don't have a fully implemented ordinance within 10 days, I don't know if I have a great answer to that. And I don't know if any of our attorney staff have any answers, but that would be incredibly difficult to do, to have something fully up and running in 10 days.

If I may add, really a huge burden would be on human resources. You know, we don't have any job classifications. We'd have to start from scratch. We would have to, you know, rent controls are completely different. You can't just say analyst. It's a completely different skill set. Keep in mind, every single job description must come before the city council, you know, per the charter. So as Alin mentioned, it wouldn't just be the housing department. We could shift those responsibilities. I do think it would be a big initial burden on human resources, who's currently actively recruiting for police and fire and all other positions, but we have never started that work, so we'd have to embark on that process. I see that really as the longest really lead up. And then recruiting positions, and there's not a lot of folks out there with said experience. So I think it would really be the human resources component of it and then legal, any aspects on that.

Patrick, thank you. So Jason, was that considered the HR recruitment job descriptions coming to council for approval part of the startup costs? Or is that in addition to the startup costs that you identified in your report?

That would probably be in addition to the startup costs that we included in our report.

Thank you. I do have some comments, but I'll reserve my comments till later. But I thank Mayor Yu and my colleagues for indulging me in these questions. These are important questions, I think, that we're in four days of trying to figure this out, trying to figure it out still. And so thank you, colleagues, for the time. And Mayor, thank you.

Thank you, Council Member Ju, for the questions. And we'll open it up to my colleagues again. Who would like to go next? Council Member Howard.

Thank you. I'd like to thank, first of all, I want to thank the community here. I really appreciate you showing up and speaking up. This is such an important topic and we have many different opinions in the room, but I want to thank you all for having. the courage to speak up and let us know how you feel. As Councilmember Gee said, we did not have a great deal of time to analyze this and there are so many questions. Just the Housing Leadership Council sent us a list of questions just today and I can't answer one of them to be honest with you and I'm sure most of us can't because we haven't had a chance to do that analysis. But I did want to ask, I think Council Member Gee has asked very thorough, he's had a very thorough questioning and questions I hadn't thought about so I can't think of an additional question. But what I did want to know is I believe in the report we received from Faith in Action, it did have forms suggested if you wanted to give someone a waiver or an exemption, a non-profit for instance. There were a number of forms there. They were suggesting that we could utilize if in fact this passed and a non-profit was impacted. But what I'm hearing is that may not be legally possible. Now, I think that's important to know because if Faith in Action believes it is possible, I think we need to find out. If it's not possible, that needs to be told to the public that if this passes, that means non-profits, and we have many of them in our community, doing an admirable job supplying affordable housing and have plans to do much more, they need to know and have some certainty on where they stand. So would I ask you, the city attorney, would I ask you that question? Are those forms meaningful? Are they legal?

So I understand, I think you're talking about the packet that Faith in Action might have given staff a few weeks ago. Is that accurate, Alain?

Yes.

Okay.

Yes.

And so I can't definitively answer that. I understand that those forms were provided to city staff a bit ago. And if the city's fee analysis were to conclude that the waiver or exemption of some of these fees for affordable housing units would not disproportionately impact the other providers, then maybe we could. We have to rely on a conclusion like that and I can't give you that conclusion without the analysis because typically you've heard us say, oh well, If you want to provide some type of subsidy, you'll use your general fund. And so then I could tell you there are ways that you could do it. Here, we'd have to do this analysis in order to determine whether this can be done without impacting negatively the other landlords and without utilizing the city's general fund. So it really does depend on what that analysis shows.

I would find it so hard to believe that it wouldn't impact.

Well.

But I don't have the information to prove that, but I would find it real difficult to believe that it's not going to have any impact.

That is my concern, but I just can't definitively tell you that.

Exactly. Exactly. And I also have a concern that, I mean, we are talking budget tonight. Our general fund is not an unlimited pot of money and it has been earmarked, every cent of it has been earmarked for something and we're still facing a looming deficit. So I have great concerns about how we're going to do this. So I think these questions are excellent questions because you don't want to go in blindly as we go forward. But thank you. I appreciate everybody's good intentions in trying to answer these questions.

Thank you, Council Member, colleagues. Any other questions? We do have a lot more meeting to get through, so if anyone feels brave, it'd be appreciated. Thank you. Are we just doing questions or comments? We can do questions and then comments later.

Oh, okay. All right, I do have a question. Let me just, sorry, my notes are a little bit scrambled here. I had a question. Just, Lynn, how many... When I was reading this, how many opportunities for appeals in hearings are there for landlords and tenants in this? And who absorbs those costs?

So processing any petitions or appeals would be administered by the city. And so those costs, as we've been discussing, would be paid through the fees imposed on landlords. I believe I have. We would process appeals for, and I'm trying to find my list here. Yes, tenant safety plans. So we are required to approve those and then if there's an appeal of that, we would process petitions for either rent increases or decreases. We would process appeals for any relocation assistance eligibility requirements. I think those are the three petitions and appeals.

Okay, so there's maybe three buckets for appeals. And then is there a limit to how many times one can appeal? I didn't see that in the proposal. Can a landlord or a tenant run out of appeals? Can you exhaust them or can I keep challenging it? How does that process look?

I believe for rent increases, you could petition annually to increase the rent above what the ordinance prescribes. In terms of is there an appeal after an appeal after an appeal, I would need to double check that. But I think there is an end date. Typically, as it's described, there is a hearing officer component. And so I do believe that hearing officer's decision would be final. But I know everyone's double-checking this.

Okay, it would be interesting to know just with costs. I know that all of those have a number assigned to them. So if you guys could get back, that would be information I would like to have. Thanks. That's it for now.

Thank you, Council Member. We'll go to Council Member Strickland.

Thank you, Mayor. Just a quick follow-up on that. On page, I think, 39 of the proposed ordinance. So who appoints the hearing examiner? And how does it compare to the examiner, if you will, for the TPO that we already adopted?

So this hearing examiner, I think this is one of those where the ordinance is silent, we can develop our own rules and regulations. The city would need to go through a request for qualifications or request for proposals from potential hearing examiners and they would be selected. While we do have under contract a hearing officer right now, they're under contract specifically for implementing our tenant protection ordinance. So we would still need to go through some kind of procurement process to find hearing officers specifically to implement this.

But hearing that we have that kind of flexibility, because the ordinance is somewhat silent, I think you said, on the specifics of the hearing examiner, who they are, who hires, I mean, they're, you know, so we... can ensure that that person is unbiased, objective, can be an objective third party, and kind of believing maybe any concerns there might be on the part of any landlord or tenant about the conclusion of their hearing, right?

That's correct. That's what we ask of a hearing examiner or a hearing officer. And I'm still trying to answer Council Member Padilla's question because there are three opportunities for challenging a decision. And there is, as Council Member Stricken referred to, Section 39 for the petitions. There is an opportunity for the hearing examiner to look at the record, make a determination and even in that decision can be appealed and it's the city council that is the final appeal body at least in that case. Then I think the next would probably be legal challenge if they weren't satisfied with the council determination but at least in that instance And I haven't been able to come through that. I know there's a couple of other options. I don't know if Deputy City Attorney Lolita Fernandez has an answer.

You're correct about that. The page 42 has the appeal section in there that applies to all hearing procedures for hearings and appeals altogether. So it would go to the city council for appeal. And if there are no appeals in that, the hearing examiner's decision would be final. And then there's a judicial review if they're agreed by the action.

suppletaking councilman. That's great. Vice Mayor.

I want to thank everyone that came out today, both people that live in Redwood City and people that live adjacent to Redwood City and people that live far away from Redwood City, across the bay and so forth. Thank you all for coming. And I also want to thank my colleagues for asking such probing questions and for this conversation. So city attorney, I've already asked this, but let me just ask it again. 4,000 Redwood City residents said they wanted this initiative put on the ballot. Can we decide tonight, based on all these concerns that have been expressed and all this uncertainty, do we have the option to say to vote no, we won't put it on the ballot?

So under the Elections Code, the City Council is required to consider the petition at the next regular meeting after the petition has been certified as sufficient. The petition has now been certified as sufficient, and so that's why it's here before the City Council. Typically, you have three options at this council meeting. One is to adopt the ordinance without any changes. A second is to call an election and submit this initiative measure to the voters. And then a third is to order a 9212 report is what we call it, which is a report that Ms. Lancaster had kind of laid out what those elements were and that staff has already provided preliminarily to the council. So those are typically the only three actions that can be taken for a council. If you find the 9212 report that the staff has brought forward, then you're left with a determination. Do you adopt the ordinance outright, and you heard some public commenters asking that the council do that, or submit the measure to the voters? So that's what's before you tonight.

Thank you so much. And one of the reasons that I ask that is as the mayor referenced, we have a full agenda tonight. We have four other pressing matters. And so I think we've identified a lot of ambiguities and a lot of questions that are unanswered. But It kind of doesn't matter. I mean, we either put it on the ballot for November, we either vote to put it on the ballot for November, or we vote to adopt it tonight. Those are our two options, is that correct? And the third one is to order the 9212 report, which we did, and that's what we've been discussing for the last two hours, is the 9212 report, which is the rules and regulations that would implement the ordinance.

So the 9212 report is an analysis that provides information on the impacts of the ordinance. So that's what the 9212 report is. It's not the rules and regulations. It really is information to help both the city council and members of the public understand what the impacts of this proposed ordinance is. And thank you to staff for putting that up.

Well, thank you, and I'm very concerned. The thing, I appreciate all the questions, and I'll hand it over to the mayor to decide what to do next. But I think the thing that bothers me the most is that what i heard the attorney say that we would be forced to legally defend an ordinance that we did not craft and that we don't fully understand and we would have to do it with general fund dollars and that's concerning to me in this economy with the uncertainties But the devil is in the details, as they say. But this is for the voters to decide. This is not for us to decide. And this, I guess I'll leave it there and throw it to you, Mayor.

Thank you, Vice Mayor. A quick clarifying question on what the Vice Mayor just mentioned. If we requested a supplemental 9212, are we then making that ultimate decision whether to adopt the ordinance outright or put it on the ballot at that meeting or is that happening still tonight?

I THINK THE CITY COUNCIL CAN PROCEED ONE OF TWO WAYS. IF RIGHT NOW THE CITY COUNCIL IS INTERESTED IN OBTAINING ADDITIONAL INFORMATION AND FEELS COMFORTABLE also making the decision whether to adopt the ordinance or place the item on the ballot, then the council can move forward with both tonight. The City Council, if it doesn't feel comfortable acting until it's received the additional information that would be requested, then we would need to make sure that we meet the Elections Code requirements and bring the supplemental report that meets the city council's interests and direction within 30 days in order for it to act because the council must act. So those are, I think, the options on the table. If the city council feels like the report in its current state is deficient and they need additional information to act, then that's the option you have as the second option.

Okay. Thank you, Veronica. Thank you, City Attorney. I appreciate that. You know, I... I'll jump into my comments. I think, thank you to my colleagues for the great questions. They're really helpful. Thank you to everyone who made public comments. I think when you have the community engaged in the process like this, it just, it makes the end result better and it has us thinking about things that we didn't even consider. So I appreciate the level of engagement we've seen. And we had housing night a few weeks ago where we were celebrating our TPO, which is one of the stronger tenant protections on the peninsula, right? And that's been years of work. And I know that's not perfect, right? But it was so labor intensive. And I've also heard it from the community and I've seen the community outs and collecting these signatures. And I know that they've done the work and that has been deemed by our county elections officer And so many of my colleagues have touched on this, the really sort of funny position that the city is in where we are working in such fast timelines to digest the 9212, to look at the ordinance, to look at the proposal. We are also in an awkward position because we don't have the ability to pick and choose and adopt certain parts of the policy that we like, right? It's all or nothing. So I think just with the level of questions we've heard today, before we initiate the process, I would want another 9212 report 30 days. I know it isn't a lot of time, but I think the answers we would get in that time period would... would be really valuable, not just to the people who worked on this proposal, but for the voters who are going to make the ultimate decision on this. I think they deserve the most information that we can before it's out of our hands. I'll open it up to my colleagues if anyone feels differently, but to the Vice Mayor's point, that's where I'm thinking we should go next. Council Member Stricken.

Thank you, Mayor. I really appreciate that proposal. I just have one question. If I remember correctly, our agendas are packed through the fall, right? So where are we going to fit it is the question. That's just something I'm cognizant of. We already punted, you know, consideration of affordable housing on our library parking lot to the fall. So that's just one concern that I have.

Thank you, Councilmember. I'll just quickly say that I would work absolutely with our staff to find a day where that could work or make another accommodation, which I know we've done with the public hearing we had last week, right, or a couple of weeks, but it just flies by. So I'll say that, you know, I think we can figure something out, but... Any other, Vice Mayor, sorry about that.

No, don't apologize. I just have a question for staff. Assuming that we did request a supplemental 9212 report to address some of the questions, or all of the questions, or as many questions that were raised tonight, I guess my question is, do you have clarity on what those questions are? Are you sort of feeling like our questions are nebulous or You're not really quite sure what the supplemental 9212 would address and worried that then it in addition would be inadequate. Are we asking unanswerable questions that you think a supplemental 9212 wouldn't be able to address either? Do you kind of get my question?

No, I appreciate the question, Vice Mayor, because I was going to turn my light on as soon as you all go. I heard a lot of really good feedback tonight. I took lots of notes, but I would like clear direction. And I definitely got a lot of feedback from Councilmember Gee, but here's the thing, if we're gonna do this, and again, we only have a couple weeks, so it's not like, I just wanna make sure everybody feels heard. So I do think that we should take a little bit of time to scope it right now on what exactly the council has heard. Now, I do have a lot of notes on the, I think looking at the cumulative impact is very important, looking a lot on the affordable housing question. I think many of the letters that we got from plenty of the stakeholders, probably 75% of where we could be, I do think we'll probably come back with some questions we probably will not be able to answer or we're not uncomfortable. Sorry, we feel a little uncomfortable maybe guessing on how it would work in implementation. But I do think it would be great just to kind of maybe for a few minutes, you know, make sure my list is good and then go from there and just to make sure that we don't come back and say, nope, we missed the mark.

Exactly, because to Mr. Sterkin's point, we have other business and so I don't want the tail wagging that I myself don't want the tail wagging the dog. We have no discretion. It has to go on the ballot or just be implemented without citywide vote. I think it, I mean, to the extent, I guess from my perspective, to the extent that a supplemental 92-12 further educate the voters that would be looking at this in November, then it's a good, perhaps a good use of staff time and energy. I guess I'll leave it there.

Thank you, Vice Mayor. We'll go to Councillor Padilla.

I just want to thank everyone for attending. I really appreciate the board. I love things like this, and I wish we had them for everything. I know that they are costly and they take time, but they're very important. And I hear everyone talking, and I think to myself, I was looking at Paige. 45, I guess, of 151. And it says, the program shall publicize this chapter so that all residents of Redwood City will have the opportunity to become informed about their legal rights and duties under this chapter. The program shall. And it talks about presenting a brochure. So the thing that stays with me when I'm here is I want everyone to be informed. I don't ever want to feel, I know I never want to feel like I'm not given all the information. And I also don't want to interpret information for the voters. That's not something I feel comfortable with. We've been presented with statistics. It's true. Our community is a mix of renters and homeowners. And I think it is important that we have all the information to see how our entire community is affected. I read some of the reports, and I did find it disheartening that I don't want us to demonize some of our mom and pop. Just because a person may be listed under an LLC, that doesn't mean that they're a faceless corporation. Some people have found ways to protect themselves. So I just want us to think that these aren't all giant corporations. These are also our family members, our friends. We've had people speak about... the communities within communities. So I just want, I think we've mentioned unintended consequences. Are we going to hurt the community members who have been supporting some of the marginalized members in our community? So I just want us to always think and I would really appreciate additional information because I think it also We have to think, is this something, I saw it was like 7 to 19, potentially, Lynn, employees. And with the $4 million to $10 million, that was not even including collection or enforcement. So these are very conservative numbers. And many questions have been asked. And so many of the answers are, we just don't know. We don't know. And to the vice mayor's point, we didn't create this. And we are just now getting all this information and the details of years and first rights of refusal that are never ending. And I just want to make sure we know the financial implications, how lasting they are. So I would really welcome additional information in the report because at the end of the day, I think we all should be informed. Thank you.

Thank you, Council Member. Vice Mayor.

I'm sorry, I have another fundamental question that it's sort of a follow-up to what Mr. G said. What is it about the ADUs? So these are buildings on residences' property. How does this apply? And if you can just... So do ADU owners also have to pay this $500 fee or $300 fee?

Yes, ADUs, depending on when they're constructed, would be either fully covered if they are pre-1995 or partially covered and if they're being rented. Now, if the unit's not being rented, then there is no fee, but the expectation would be that they would pay a fee for those units if they're rented.

Thank you, Vice Mayor. Council Member G. Thank you, Mayor. Thank you, colleagues. And again, thank you, everybody, for sharing your thoughts and being here. This will most likely wind up before the voters for consideration. But, Patrick, I'm happy to give you all the questions that you didn't have to write down. I'm happy to share with you and staff all the questions I wrote. But I would be very interested in a supplemental... 92-12 that really addressed three buckets of issues at the broadest level. The three buckets I think would be the cumulative impact on property owners given the breadth of not only the rent stabilization but the tenant protection parts of this as well as the administrative burden. you know, the $12,000, you know, four months of rent or the greater number of $12,000. I mean, it's got to have an impact, as we heard from one of the speakers. Some of these family-owned property owners aren't cash-rich. And so I would want to see an analysis to the extent possible of the cumulative impact on property owners of the proposed initiative. The second thing is I want to see what the impact is on our non-profit affordable housing providers. That's a big deal. I mean, we have sent the message out there, come to Redwood City through community benefits, create your housing here, low income, extremely low income. And if this is going to dissuade potential affordable housing development, we need to provide that transparency to the public. I mean, we can't change it, but as Council Member Padilla said, we owe the public transparency. And probably the most important part, at least for council, is reconciliation of what the general fund impact of this initiative is. I know I'm tired of saying this, but because of other work I'm doing, we are working under a compressed timeline. So I would be in favor of continuing this item to a date certain for a supplemental 9212 that addresses those three buckets within the time and constraints that we have within the election code and to be brought back to council a date certain to be established by the mayor and vice mayor and staff. Because I think that transparency to the public is critical when this goes out because once this is on the ballot, we can't take any action here at council. We can as individual council members, but once it's out there, we cannot do electioneering from the dais, good or bad. So this is our opportunity to generate information that I think all of us only got four days ago, and to be able to see what those impacts are to property owners, to our non-profit affordable housing developers, and the impact to our budget. Because I am not, and I said this before, willing to sign a blank check on our general fund. That would be irresponsible as a council member and elected official for anybody I sit on. I cannot give a blank check on our general fund. So, Patrick, hopefully that's enough clarity. And to our city attorney, did I say anything wrong there? Is that doable if the council would entertain a motion?

I think that would be clear if the council was interested in making that a motion. As far as doable, you did add to the extent possible, and so I do appreciate that because there is some of that that may not be feasible.

I understand completely. I mean, I'm on the Financial Efficiency Committee, SB 63, local investment. Talk about compressed time frame, you know, six weeks. That's not a lot of time, and so there are going to be answers we can't answer within 30 days. I get that, but I think the buckets of comments, my questioning, the letters from HLC, SAMHSA, all the other can fairly fit into those three buckets.

I will second that motion, and I'd like to say I appreciate that you're trying, really, because the more information we can get, it's the more we can share with the public, and we'll all be enlightened. So thank you. Appreciate it.

I guess I will say I just made a motion since it was seconded. Thank you, Council Member Howard.

Sure sounded like it.

Thank you both. That was a motion from Council Member Gee and a second from Council Member Howard. Not seeing anyone else's lights up. I'm sorry to interrupt. Please.

I just want to make sure, do we also need a motion to certify their certification? I don't know if that procedurally needs to happen first.

Yes, please. If we could get, I mean, I don't know if Council Member Gee with Council Member Howard's acceptance can amend his motion to do both A and what he said where he asked to continue this item to a date certain to be determined by the Mayor and Vice Mayor within the Elections Code provisions. to receive a supplemental report with those three buckets. I'm happy to list them out if you would like to provide information regarding the cumulative impacts, including rent control, tenant protections, as well as burdens on the landlords of all of the regulations that are with the city. impacts on the non-profit affordable housing partners and reconciling the general fund impacts to the extent possible.

Thank you for clarifying my motion, yes.

I also, yes, perfect.

Great. Friendly amendment accepted by motion maker and the seconds.

Just a question of clarification. Are you adding that we're certifying this then too? Is that?

I'm sorry. I just referred to section A of the recommendation that's right before you. By motion, you're accepting certification of signature verification. Would you like me to read? I think you've got it. Thank you.

Great, and I think we're ready for a vote. So City Clerk, could we get an electronic vote, please?

One more vote, please. Thank you. The motion passes with six votes. Council Member Chiu is absent.

Thank you, City Clerk. Thank you, colleagues. And thank you to the members of the public for joining us today. We'll continue this conversation very soon and move on to item 9A, our public hearing items for the evening. We have our Human Resources Director, Michelle Katsuyoshi, who will give a presentation.

Good evening, Mayor Martina Ceballos, Vice Mayor Aiken, Council members, members of the community, Michelle Katsuyoshi, Human Resources Director. Also here with me today is Vanessa Lopez, Human Resources Manager. Listed here is the presentation overview for tonight's report. Listed on this slide is the question for the City Council to consider, and we will return to this slide at the end of the report. This is staff's recommendation for consideration to receive the informational report on City of Redwood City employment vacancies and employee recruitment and retention efforts. On September 22, 2024, the Governor signed AB2561, which imposed new obligations on public agencies related to tracking and presenting information on job vacancies. The legislature declared there is a statewide interest in ensuring that public agency operations are appropriately staffed. High vacancy rates can lead to heavier workloads, turnout, increased turnover, and negative impacts to service delivery. Effective January 1st, 2025, government code requires public agencies to present information on their vacancies and recruitment and retention efforts at a public hearing before the City Council at least once per fiscal year and prior to the adoption of the final budget. The item tonight meets this requirement. key provisions of AB2561, there are three basic requirements that need to be presented annually. To track and present information on job vacancies, to present information on recruitment and retention efforts, and identify any policies, procedures, and recruitment activities that may hinder or present obstacles in hiring. There are other obligations and reporting requirements that apply if the vacancy rate in a single bargaining group exceeds 20%. It is not a requirement this year as no single bargaining unit has a vacancy rate of 20% or higher. Listed here are the vacancy rates by employee group. For fiscal year 25-26, there are a total of 621.68 budgeted full-time equivalent positions, FTEs. As of March 17, 2026, there are 57 vacancies which correlate to a 9.2% vacancy rate. Redwood City is not alone. We've surveyed 11 agencies of our labor comparator market and we are at the bottom three vacancy rate at the 9.2. Recent successes, our human resources team in collaboration with hiring managers, we completed 98 requirements, or I'm sorry, recruitments in 2025. We've also added capacity to our human resources team to add an additional recruiter to assist with our recruitment efforts. And we also have a variety of recruitment and retention incentives that are in place for eligible teammates, and that includes education incentive pay and tuition reimbursement. And this benefit supports continuous learning and development IT CAN SUPPORT EDUCATIONAL SUCH AS ADVANCEMENT TOWARDS COLLEGE DEGREE OR COLLEGE COURSES, PROFESSIONAL TRAINING AS WELL AS SPECIALIZED LICENSES OR CERTIFICATES. We also have a police lateral recruitment incentive trying to attract current police officers to join our agency. And if a current police officer recruits a lateral candidate and is successful, that individual receives a $500 recruitment incentive. We also have a vacation benefit accrual for any lateral police officer. You know, typically if somebody were to leave an agency and join another, they may lose their vacation and or sick balance. And so an incentive to attract officers to our agency, we will front load them a vacation balance to use. Areas of improvement, we are in the process of issuing a request for proposal for a cloud-based software program to help our human resources team streamline recruitment processes as well as to better track vacancy data. We are also working with labor groups to establish hiring eligible list protocols. And what that means right now is if a department has a vacancy, they are typically referred the top three names of a candidate hiring list. And that really limits flexibility for strong candidates who may not score in the top three. And so we are working with labor groups to look at ways to be more flexible and possibly have a hiring rule of the list where if you successfully competed in a recruitment and your name has been placed on an eligibility list, you may be eligible for a position even if you didn't score in the top three. Another area of improvement is a time to establish a new classification. A classification is just a fancy word of a job position. And so when the city is interested in creating a new position, it requires us to write a job description, determine where the salary range would lie, work with the labor groups to identify appropriate bargaining group unit designation and a lot of this work takes time so we are working with hiring departments to streamline the process to create new job descriptions. Here again is the slide for the recommendation to receive the informational report on City of Redwood City employment vacancies, employee recruitment and retention efforts pursuant to government code. Listed here is the question for council and happy to answer any questions. Thank you.

Michelle, thank you for the great presentation and colleagues. Any questions for staff? Council Member Howard.

Well, it's not a question. I just wanted to commend, Michelle, you and your HR staff for this proactive program that you've put into place as far as recruiting and retaining who we currently have. When we have vacancies in our city, our service suffers. And we want to provide great quality service for the people in our community. And that you've kept it under 20% of vacancy rate, I know that's an improvement from what we've seen in the past. So I do want to thank you because this has shown a real benefit. I'm glad we get to see it once a year, to see that we are making improvements. Although we'd like to see better, it's a problem every city has, but I am glad you're making such a dent. Really appreciate it.

Thank you.

Thank you, Councilmember. Any other comments? Councilmember Serkin.

Similarly, I just applaud you for your recruitment and retention efforts. It's critical to city services, and just thank you.

Thank you.

Yes, was the number 98 for 2025? Super impressive. For everyone, I mean onboarding employees, that's a really big amount. That's a huge number. Thank you. Thank you.

Not seeing any other lights on. Michelle, I'll add my thanks. I know there are lots of new labor laws coming from Sacramento that we're staying on top of, so I appreciate you maneuvering through that, but I think I saw it in the budget that was it an 80% satisfaction rate from our employees? I might... I saw a lot of numbers, but I'm pretty sure it was 80% in terms of how happy our employees are, right? Which is a testament to the culture that's being grown here, but also it's just a part of the work now. People don't stay around for 40 years, right? You don't have too many examples like Ms. Meeks. Yeah, so that's why this work is so important. So I appreciate that. And not seeing any of my other colleagues' lights on, I will move the recommendation.

Actually, Mayor, I'm so sorry.

Excuse me. I'm moving way too fast. Let's open public hearing. Thank you.

Thank you. I actually don't have any speaker cards, but wanted to give the opportunity to anyone in the audience or anyone on Zoom to comment on this item tonight. Going once, going twice. Seeing none, Mayor, please move forward. Thank you.

Now I'll make the motion for staff's recommendation. Council Member Howard.

I'll second the motion.

Thank you. Could we get an electronic vote, please?

Thank you. The motion passes with six votes. Council Member Chu is absent. Thank you.

Thank you again, Michelle. And with that, we will move to our staff reports, beginning with 10A, our fiscal year 26 to 27 recommended budget. And our city manager, Patrick Heisinger, will give an overview. And the finance director, Beth Goldberg, will lead the presentation.

Great. THANK YOU, MAYOR. GOOD EVENING, EVERYBODY. PATRICK HEISINGER, CITY MANAGER. I'M PLEASED TO PRODUCE OR I SHOULD SAY INTRODUCE MY FIRST BUDGET AS YOUR CITY MANAGER. BEFORE DOING SO, I DID WANT TO EXPRESS A LOT OF GRATITUDE TO OUR ENTIRE STAFF. SO ALL THE STAFF THAT ARE HERE, PLEASE RAISE YOUR HAND. I REALLY APPRECIATE a little more enthusiasm than that, you know. But I really appreciate it. I mean, for folks who know, literally every member of every department is involved to some extent into the budget process. And so I really, really appreciate that. And Beth, and Molly here as well from finance, thank you for corralling us all to get together. It truly does take a village. And I also want to thank the council. You know, a lot of this work starts at the mid-year, then the off-site, then the CIP, you know, I'm still in all your thunder, Beth, some of your slides, but it really is a comprehensive approach that we embark on and, you know, I take feedback from you, you take feedback from me, and we, you know, come together in this big, huge document. The document you have before you, it's a balanced budget, but make no mistake, there are asks about using one-time reserves, and that makes me nervous. The reason why I say it makes me nervous is it's something that I will not recommend doing a second year. I've seen other cities that get comfortable continuing to dip into reserves and whatnot, This next year, as we've talked about at the mid-year and as we've talked about at other times, is really a year for planning and to really figure out how can we increase revenues, but also keep our costs in check. So in this presentation, you'll see some doom and gloom, you'll see some real exciting stuff, but you'll also see a lot of reality checks. And look forward to the discussion. As a reminder, this would come back on... June 22nd for final approval. So we look forward to the feedback tonight. And with that, I will turn it over to Beth Goldberg. Thank you.

THANK YOU, CITY MANAGER. GREETINGS, MAYOR, VICE MAYOR, AND COUNCIL MEMBERS. HAPPY BUDGET NIGHT. AS THE CITY MANAGER POINTED OUT, WE ARE ON OUR BUDGET JOURNEY AND WE ARE ON THE PENULTIMATE STOP ON OUR BUDGET JOURNEY WHERE WE ARE GOING TO PRESENT THE RECOMMENDED BUDGET TO THE CITY COUNCIL TONIGHT AND THEN WE'LL BE BACK IN TWO WEEKS FOR THE BUDGET PUBLIC HEARING AND FOR FINAL ADOPTION. And as you're listening to the presentation tonight, would like you to think about a couple of questions. Do you have feedback for us on the 10-year forecast and the financial trends, as well as city department operations as proposed in the recommended budget? And the feedback we hear from you tonight, we will incorporate and get ready to come back in two weeks. Okay, so from a presentation overview, first I'm going to provide an overview of the budget economic outlook 10-year forecast, and then we'll hand it back over to City Manager Heisinger to talk about advancing City Council priorities and community priorities. And then we'll have time for questions and answers. And then at the end, we will be asking the council to pass a resolution to set June 22nd as the public hearing. Okay, so overview of the 26-27 operating budget. The budget totals more than $410 million across the funds displayed on this chart. In addition, we, and we'll talk about this more later, have another $36 million allocated for our capital investments. And as is the case typically, we will spend most of our time talking about the general fund, the mother fund. So we'll go into that in more details. But before I do that, I want to quote our fearless leader, City Manager Patrick Heisinger. He included in the budget transmittal letter A statement echoing his comments earlier today about, you know, times are changing fiscally and we're at a bit of a crossroads. And this does require increased fiscal discipline, prioritization, and long-term planning. And this is a different situation than what the city has seen previously. And I'll go into some of that as we go through the 10-year forecast portion. Uh... Okay, so what has changed this year? Why is this year different than past years? First of all, what is unique about this year is we actually are seeing a slight contraction in revenues. Not, you know, huge on a dollar basis, but we know we're in inflationary times and costs are increasing and the fact that revenues are are tempered is is is a changing dynamic another thing that has changed and this is where the city manager was speaking to use of one-time funds for a variety of reasons we don't have the one-time fund balances, unassigned fund balances that we've had in the past. And this is stemming from the deliberate drawdown of one-time balances in the 25-26 budget to meet some long-standing needs. We're also taking a more proactive and precise approach to revenue forecasting, which is meaning we're not ending with with, you know, unfound money, so to speak, at the end of the year, which is what was contributing to those fund balances. So for this year's budget, we are recommending that we draw down the remaining fund balance to help balance the budget, and I'll talk about that in a moment. But that does start to really limit our flexibility moving forward. I do want to note, however, that our 15% council budget established general fund reserve emergency reserve is fully funded um at about 31 million dollars so we've got we've got that as a question So what's contributing to this weaker revenue outlook? There's a myriad of issues going on here. And the first of which is something that the council is keenly aware of, and that is the state appears, unless something has changed in the last couple of days, to not be providing us our vehicle license fee backfill monies that are owed to us, that are obligated to us. And that is creating a $5.3 million loss of revenues that we cannot count on for the 26-27 budget. In addition, we're seeing sales tax declining since its peak in 2022-2023. I'll talk about that more in a few minutes. Business license tax, Measure BB, was approved by our voters last November, implemented, or maybe it was, anyway, it was implemented, this budget, with a 50% rate change happening in 25-26 and the remaining increase happening in 26-27. This was a new tax and it's difficult because of the way we were taxing before and the information that we had to really get a precise forecast. So we are seeing this perform slightly below forecast, but we've also this year stepped up our efforts through one of our consultants, HDL, to step up the administration of this tax and follow up with taxpayers to ensure payment. So you may recall earlier this year coming to you with concerns that this was really falling short. HDL's efforts since they expanded their role in October has really yielded results and doing some analysis of our latest results, I would suggest that about a million dollars additional has been brought in by HDL than what we would have had had they not had this expanded role. And of that million dollars, that includes about $377,000 from prior year delinquent payments. So really kind of helping us get caught up with those taxpayers that hadn't been paying. Council is very familiar with loss of certain grant revenues, particularly at the federal level. that is having impacts on general fund revenues. We, in our work on ensuring best practices, financial management best practices, we've determined that some long-standing general revenues should actually be allocated to other funds so that that represents a reduction to the general fund. And then looking ahead, we have seen some recent commercial property sales that have sold at a lower valuation and so that may temper our property tax revenues in the future. And so that's going to be something we're going to have to watch. Property tax has been a bright spot for us over these years. So next, I want to just expand a little bit on the VLF backfill. And as the council's aware, this has been a fairly volatile revenue source. But we have always, the state has always provided what they have owed us until last year, fiscal year 24-25. We were owed about $5.3 million. And We're only awarded about two-thirds of that, so we're shorted $1.8 million. This year, the state budget includes no money for us. Again, we were owed another $5.3 million, and that appears, as of now, to not be materializing. So that creates a significant financial hit for our general fund. Sales tax is another revenue that has not been performing as well as we would like. So this chart, what you'll see here is that sales tax has been down every year since fiscal year 22-23 and is expected to drop a little bit further in 26-27. This is down about 8.6% from 22-23. And a variety of factors are in play here. First, for fiscal year 22-23, that was when we were coming out of the COVID pandemic. And that's also when a lot of the stimulus checks were out among the people being spent. And so I've heard several presentations from HDL that, as they look in hindsight, suggest that 22-23, that performance was probably not sufficient. sustainable because it was driven so much by pent up demand from COVID and those stimulus checks. But then every year since it's been dropping and what we're seeing, there's variation locally, but where we're seeing challenges locally is particularly in auto sales is contributing to our decline in sales tax. And, you know, there's a number of economic variables in play. But, you know, the fact of the matter is we have over the last three or four years seen sales tax drop. Sorry, Beth. Sorry to interrupt. Just have a quick question.

Beth, could you go back to that slide? I can. Thank you. But the trend is moving up, 27, 28, 29. Can you explain? You're hopeful. I can see this. You're hopeful. You're projecting something. So can you share?

Yes. So the first two years, 26, 27, 27, 28, and 28, 29 are based on HDL's forecasts. When they provide us our quarterly sales tax reports, they look out two years into the future. So we're using those forecasts then. And then beyond that, 29 through 30, and then beyond that, we use a standard like 3% inflation rate. So this does project that there is going to be a recovery, but we also know that we live in really weird times and, you know, who knows what the next shoe could be to drop. So we just have to watch this really, really closely.

Thank you. Appreciate it.

Okay, this is kind of the whiny slide where I've entitled it Can't Win for Losing. So we made, you know, the council, you know, made a, A significant move a couple years ago in putting Measure BB on the ballot and the voters of Redwood City approved it. And this was supposed to be kind of our pathway to nirvana or whatever, budget bliss, whatever you want to call it. But, you know, simultaneously, you know, the world is striking out against us and the VLF backfill is a loss. And then we're seeing weakness in sales tax and cumulatively those hits from sales tax and VLF backfill. essentially are negating the increases we were expecting from the BLT changes. So we're kind of a little bit of right back where we started from, which is not great, but it helps explain this kind of, this stasis that we're finding ourselves in. Okay, so now this is, so we went from the complaining slide to now we're going to go to the gloom and doom slide. So this is a visual of our 10-year forecast and what you'll see on this chart is our actual results from 22-23 and 23-24. And what you'll see there is that we ended those years with a surplus, better than we anticipated. And then what you're seeing in 24, 25, 25, 26, and 26, 27 is that we're actually projecting, thank you for making that bigger, What we're seeing is that we're projecting shortfalls that we would be using what remains of the unassigned fund balance to help balance the budget for these years. And Matt gets us through partway through 26-27, but there's still a bit of a gap. And to close that remaining gap, what you're seeing that blue represents in there is a partial use of our Section 115 trust that the council proactively set aside starting in 2017 to meet future pension costs. So we are, as part of this budget, recommending that we draw that fund down by about $4 million to help balance the budget. There's still a healthy balance in the Section 115 trust, about $36 million, and we are not... recommending at this point continuing to use that for the reasons that city manager Heisinger outlined in his opening comments is, you know, once it's gone, it's gone. So we need to be judicious about how we use that. So the remaining, and this is where the gloom and doom comes in, the remaining years on this chart shown in red are the projected deficits. So our work, once we get this budget adopted, is to start figuring out how are we, through a combination of revenues, potentially budget reductions, strategic use of reserves. How do we start closing those gaps? And if we start closing those gaps on an ongoing basis, it helps the subsequent years. So it's the one-time measures that would start to kick the can. So this is the work that is ahead of us, is to turn those red bars into above the line. Okay, and then this is the last gloom and doom slide before I hand it over for the happy news from our city manager. And as you are all aware, economic uncertainty seems to be the new normal. It's the new reality of society. of the century we find ourselves in. And not to bring everyone down, but have listed a couple of the variables that we're watching closely on this slide. And some of these are potentially game changers. So, for example, the state of California's considering changes to the pension program that would, if enacted, would lead to significantly more costs to us. So if those come into play, that would make those red bars on the previous slide worse and really be a game changer for us. Some of these are more external factors, such as, you know, tech sector layoffs, it's affecting the local economy, but not as much of a direct hit. Certainly what's going on in the Middle East is something to watch with oil prices. But the things like the pension changes, rent control, as we talked about previously, really could, we could start seeing some immediate impacts on our budget that would further exacerbate things. And so with that, enough bad news. I'm going to turn it over for a little bit of good news.

Great. Thank you, Beth. So before you, I just have a couple slides. I know everybody read every page of the 600-page document before you. But there'll probably be some departments I don't hit on. I do just want to let folks know that every single department is pushing forward some really interesting, you know, whether it's policies, programs, things that the community's really excited about. For the purposes of my slides, I really just kind of want to hit a couple high-level things, really bread and butter, you know, back to basics as much as possible. And I feel like we've been like that for a couple of years, but a lot of this came from listening to residents and, you know, every single email that comes in and really trying to, you know, figure out, okay, what can we do to help? And so you'll see there'll be some elements around quality of life, definitely public safety, I think folks are probably tired of hearing about infrastructure with me, from me, I should say. I know my staff is very tired of hearing about modernization, so we'll talk a little bit about that. And then we'll talk about some of the key policies that are already on our work plan, and then some other ones that we're proposing. And then we'll talk about new regulations moving forward. Next slide, please. So looking at quality of life, you'll see an item being proposed that we refer to as the neighborhood response team. One thing that we've noticed is we get a lot of inquiries around illegal dumping, it might be some parking issues, it might be remnants of encampments. And every time we deploy staff from there, whether it's public works or PD, we have to pull them off of other jobs that they're working on. And so what we're recommending this neighborhood response team would be a team of three to four individuals that would report directly to Deputy, I'm sorry, to Assistant City Manager Derek Wolfgram that would be out in the field and be able to be deployed immediately to address, you know, a mattress that's on the side of the street or a cart that was left so it doesn't have to be there for a couple days. And I know folks are saying, wait a minute, our budget's tight, you know, what do you recommend? Not recommending full-time equivalents here, you know, trying to look at a way to kind of use some contract staff for it. Also want to see if there's a way to connect My Redwood City to this team, My Redwood City, the app, where folks can do it and it can just be picked up without having to call, I almost said TK, but I meant Adrian. But, you know, the director of Public Works said, hey, can you get to this? Because when we do that, we do pull them off of you know, a sewer improvement or whatnot. So I can answer more questions about that. You'll definitely see some language around the pedestrian mall and beautification, and then other things around quality of life, improving the restrooms of the downtown library, and then lots of traffic calming and other traffic-related, I would say, infrastructure projects. Next slide, please. With regard to public safety and operational readiness, there are two previously frozen police officer positions that I am recommending that we put back into the budget. For those who may recall, there was a side letter with the POA in the past about those positions where we got them to agree for us to to hire CSA officers, and so this year I do think we could phase it in mid-year and absorb those costs. With the fire department, they have training and other professional development in their budget. We added a nice goat in there for Councilmember Padilla, who I know likes the goats on the fire mitigation. We're not saying goats, but there's other fire mitigation, but we thought a goat would be cute to kind of lighten the mood here in the late evening. And then another big one is cyber security. So you'll see in the budget we are looking, and last year the council authorized other investments in cyber security and we're very grateful, but we are seeing that as another huge need as well. Next slide please. With regards to infrastructure, I won't go over the specific projects. We did this at the CIP and it's in the packet. But it'll be, Beth, right, 40.1 million total in capital improvements?

Yes, something happened to this slide. But yes, $40.5 million.

$40.5 million. So plenty of worthwhile projects. I'll just name a few. We have the Redwood Shores Levy, continue to plan on that. We have the Stormwater Master Plan, the Recycled Water Master Plan. Then we have several other actually real capital projects moving forward as well.

Next slide, please.

All right, now getting into modernization and service delivery, the one thing I just wanted to highlight is every time we talk about modernization, everybody always thinks about technology, technology, and that's true. I mean, you'll see some key elements here, and you actually heard our HR director talking about a technology that they're looking to get as well to help with recruitment. But sometimes modernizing is removing some regulations or doing away with past ways we used to do things to try to streamline. So some of the work you see here is really technology focused, but in the packet we have a whole attachment in there of what departments are looking at. As the fiscal year starts, we will have several items that will be coming to council in July, especially around the zoning code that we're hoping will be of to the council and try to make things a little bit easier on the permitting side so folks can redo their roof and other things around there. But one of the key things I do want to talk about because it really affects everybody in the organization is the ERP system. We are committed to the fall to releasing the RFP to start reevaluating our options on the ERP and we have a whole team together now and really making some strides there. Next slide, please. So as far as some existing really large, you know, policy work we're already working on, this is just to frame our current workload is, and this might be some of the stuff that Council Member Strickland was kind of referring to, is in the next couple months, there's some meaty topics, you know, coming to Council. So the mobile vending ordinance, that says SR 79, that should be SB 79, apologies. Historic preservation, the Mills Act work. We have the recycled water master plan coming forward, objective design standards. I know that sounds like an innocuous thing, but I think everybody's going to have a lot of input. And I know Jeff's ready to offload that. I think he's been working on it for about two and a half years. And some really big study sessions that I think we've been waiting for on parking, the GDAP, and then the children and youth initiatives. And then as you all know, we're always tracking large development projects. I listed a few there, but there's far more. already a pretty full plate of, I would say, policy work that the staff's working on. Next slide, please. But within your budget, you know, we do have other work that we are proposing. We do feel like we can, you know, fit into the work plan. A lot of this came from the off-site that we had with the council on that Saturday in February. So you may recall that the council Give me the nod to explore project labor agreements. I know our economic development manager, I mean, Anthony's really excited about the five-year economic vitality strategy. You know, as we talk about our financial picture, you know, I know a lot of times folks think about, you know, maybe taxes or cutting or whatnot. Our economic development strategy ABILITY IS PROBABLY OUR BIGGEST DRIVER THAT WE CAN DO. REALLY INVESTING THE TIME AND MONEY INTO THAT PROJECT IS GOING TO BE ESSENTIAL TO HOW WE CONTINUE TO ATTRACT BUSINESSES HERE AS WELL AS GREAT RESIDENTS. INVESTIGATE NEW REVENUE OPTIONS. YOU'LL SEE IN THE STAFF REPORT THAT WE HAD A LANGUAGE IN THERE ABOUT LOOKING FOR A investigating a fire recovery fee where if our fire department goes out and there's a fee, can we bill insurance companies? Not individuals, but insurance companies. A lot of other cities are starting to do it, but most of our calls are EMS related and we're trying to see can we recapture some of that. We'd like to study that. Also looking at the new things around adding fees around the YouTube TVs as opposed to the cable. Beth, I don't know if you want to explain a little bit more about that. There's an opportunity there as well, correct?

Yes, so there was a case recently out of Santa Barbara where they were testing their communications user tax about applying that tax to streaming services. And there have been some favorable court rulings that have allowed them to proceed with that tax. So we're going to be doing some work to see If we believe our current language allows for that and we'll be exploring whether that's something that we can start doing here. Obviously, you know, we will be coming back to the council with more information about that and that could be a really important source because that goes in with the UUT to supporting our capital program.

Thank you. Sorry to put you on the spot, Beth. And just wrapping up here, we have put money in the budget around the comprehensive facility infrastructure planning, a lot of zoning code amendment work I had mentioned, really around customer service and trying to lower costs for those that are utilizing our services, and those will be coming forward as early as July. ALREADY HIT ON ERP, AND THE FINAL THING IS REALLY INTERGOVERNMENTAL RELATIONS. THERE'S A LOT GOING ON RIGHT NOW WITH THE COUNTY, WITH CAL TRAIN, WITH SILICON VALLEY CLEAN WATER, WITH THE PORT, AND I LISTED A BUNCH OF CITIES THAT WE PARTNER WITH ON ALL THE STORM WATER WORK, WHETHER IT'S SAN CARLOS, MENLO PARK, AND BELMONT. And we do this work, but really being intentional and really trying to make strides in some of these areas as they're trying to accomplish their goals, we want to make sure we have a seat at the table. So there's just a lot of time just trying to show on the list of work that takes time and resources. And many of you are also involved in those on the various boards and whatnot, so we appreciate your commitments as well. Next slide, please. And the final thing is just a slide around, and I am the worst. I know my staff is looking at me probably right now saying, did Patrick really put this slide together? But as we think about regulation, as we think about the tough financial position that we're in, is I'm going to try to exercise discipline and restraint from, you know, I read a lot, and I read, oh, Citi's doing this, and that's great. It's chasing down that next policy. So What I would say in a very respectful way is this next year, maybe two, is if we could really not refrain, but just have a little bit of measured approach as it comes to new policy and regulation that could affect whether or not a business relocates here, or whether or not somebody decides to repaint their house or do a new roof. You know, is really think about... Sometimes we'll see that a city did a really cool new policy and you don't think about the unintended cost of said policy. And so just trying to have a little restraint. Again, I know my staff is probably laughing at me because I'm always trying to say, yeah, we can absolutely take that on. But I'm just asking, as we weather this storm, I think we could show leadership to the community about not chasing down every regulation that's out there. Keep us focused. And you guys always do a pretty good job on that. Next slide, please. So with that, I will turn it over to Beth just to wrap it up. But thank you.

Okay, thank you. So a reminder for the council, as you're contemplating what we've presented to you, we're looking for feedback on the 10-year forecast and financial trends and city department operations and budget recommendations that are included in the recommended budget. And we have a crowd of city staff here who I also want to ECHO MY THANKS, TOO, FOR PARTNERING WITH THE FINANCE DEPARTMENT AS WE BUILT THIS BUDGET WHO ARE HERE TO ANSWER ANY QUESTIONS THAT YOU MIGHT HAVE. AND THEN JUST PREVIEWING WHAT WE'LL BE ASKING AFTER THE QUESTIONS IS, OOPS, IS, OKAY. got dual things going on here, um, is, um, after providing the feedback, we'll be asking the council to adopt a resolution setting June 22nd as the date for the public hearing, um, and, uh, adoption of the budget. So with that, open it up to all of you. Thank you.

Thank you, Beth. Thank you, Patrick and the whole team for getting us to this point. I know it's a lot of work and, um, we will open the public hearing. So I'll turn things over to our city clerk.

Thank you, Mayor. We don't have any speaker cards at this time. Looks like we might have one. And if you're on Zoom, please raise your hand for public comment on this item. Thank you. You can stay close, Michael, because you'll be called up. All right. We'll close the speaker's list. No comments on Zoom, but we will call up Michael Arusa-Cruz. Welcome.

HELLO. I JUST WANTED TO NOTE A COUPLE OF THINGS IN THE BUDGET. REALLY EXCITED TO SEE ZONING, STREAMLINING, AND OBJECTIVE DESIGN STANDARDS ON THE 26-27 POLICY. I DID WANT TO TIE SOME OF THOSE BACK TO THE BUDGET SINCE I KNOW THAT THERE'S A DEFICIT AND I DO WANT TO NOTE Because of Prop 13, there is an inability to increase property taxes on properties more than 2% every year. But that does reassess every time a property changes hand or there's sufficient redevelopment. So I think it is important to stress that a lot of the work that will make it easier to build missing middle housing or develop on certain plots of land throughout the city can measurably improve the city's financial situation by allowing for reassessments of the property taxes on those lots, which could go a long way towards helping with the long-term financial situation. So I know I'm the housing guy. I always tie back to housing. But I think especially with zoning reform and streamlining in the 26-27 budget, just wanted to stress that that could be very important for revenue. Thank you.

Thank you. And that concludes public comment, Mayor.

Thank you to our public commenter. And bring it back to the dais for any council questions or comments. Does anyone want to get us started?

Okay.

Sure. Councilmember Serkan, thank you. Can't waste any time here. So thank you, thank you to all the staff who prepared this fantastic job. I wanted to highlight some things I liked, if I could find my notes. Just adding that admin clerk number three to save costs associated with consultants. I really appreciate you adding a project coordinator number one on page 224. It's kind of all over the place here, sorry. And I really appreciate the investment in youth and teens on the youth and teens division on page 309. So there's just a couple quick highlights I have there. And then I wanted to delve into some of the other hiring recommendations. Very much appreciate it all. But I wanted to start with a data point that I saw on page 326, first and foremost. And so, yeah, colleagues, page 326, if you want to follow along. The number of contacts with individuals who are experiencing a mental health crisis who were referred to a mental health facility for evaluation was over 300. That's a lot. When I read that, I thought to myself, wow, that's like about almost one a day. And we have one crisis response clinician in the city, Dr. Baker, who's fabulous, but she doesn't work 365 days a year, and we don't want her to work 365 days a year. So I thought to myself, what can we do to address that? We know from the community dashboard that follows Dr. Baker's responses to calls for service that there's really a great need, right? Especially during the week, Tuesdays, Wednesdays, Thursdays. But it doesn't tell us what... those calls for service look like, what calls would have required a clinician to respond outside Dr. Baker's availability, which is only 9 to 5 Monday through Friday, I believe, generally speaking. That's something I'm kind of interested in going forward, kind of getting that type of data on how we can determine whether and when an additional clinician is needed. Because based on the limited data I have here in the community dashboard, and then also in the budget, it seems like we're not quite meeting that need. And with a licensed clinician, it's great to know that our officers, 90 something percent of them have conducted, have completed mental health crisis response training. but that's not their primary job. We've heard time and time again in our community survey from public comment, me personally at the doors when meeting voters that our neighbors want our officers to enforce our laws, specifically our traffic laws. We know that the top three reasons why we have traffic-related incidents in the city is running red lights, DUIs, and speeding. And so we need our officers doing that proactive enforcement to ultimately bring down those number of accidents in the city and save people's lives ultimately. So when I saw that we are recommending, you know, adding unfreezing, rather, to police officer positions, I understand. Because of the burden on our officers, the overtime that is, you know, costing taxpayers money as well. But with that said, it seemed like a little bit of a mismatch and maybe we need another clinician. to help take some of those mental health crisis response calls so that our officers are freed up to respond to what residents are asking for and clamoring for, which is traffic related incidents and proactive enforcement among many other things. So that's just a piece of kind of feedback I wanted to provide. Now I'm open to, alternatives, such as maybe unfreezing one position and then hiring another Dr. Baker, or maybe at the mid-year budget hearing, mid-year budget check-in, if you will, reevaluating what funds are available, if any, to hire another clinician at that time instead. But I just want to kind of proctor that question to my colleagues. What is the best way to meet the need of a mental health crisis response in Redwood City? Thank you.

Thank you, Council Member. Any colleagues have any immediate reactions to that? Council Member Padilla.

Thank you. I was looking at the number of staff with crisis intervention and training and I see that our numbers are pretty high with the sworn personnel but it looks like as of now 80% of our dispatch personnel are have that training. So I think at least at a minimum, I think it would be great if we could have a focus on getting dispatch personnel the crisis training because they're the ones who are first receiving that call. All the information that they obtain is so valuable for whoever they're bringing next on the scene. I would like to have two police officers and another mental health clinician. I think we need enforcement. I hear that. I see the way we do it. I see kids dodging cars and I know how much our residents appreciate that. But I do also think that we do have this need. But then I might want to ask the city manager, how does this play in with, I know we have a coordinated effort with another agency that's potentially working with some of this, of their unhoused population. Could you speak to how that partnership works with this?

Yeah, it's a great question. I haven't seen Chief, where's Chief Bell? Where's she? Is she coming? Yeah. Well, one, I want to really quick, I'll address Council Member Sturge. I had the exact same thought when I saw the data. I was like, wow, this is really impressive. And we're beyond the pilot stage now, right? We've been doing this. So I think your instincts are dead on on utilizing data. to make informed decisions. So I'd love to hear Chief Bell kind of speak to it on, because she and I had a really brief conversation on what potential expansion could look like. But Councilmember Padilla, to your question, as we start working and we firm up our agreements with Life Moves and other folks out in the field, we will have to ask ourselves, how do these folks work together? Right now they do work really, really well together on our homeless response side of things, but there's more to it than just the homeless side. So I think it's a good point, something that I'll work closely with Derek Wolfgram, our city manager, to make sure that we get aligned on that. But no, I appreciate that. And Chief Bell, if you want to talk about the clinician aspect of things, that'd be great.

Thank you. Hello everyone, Christina Bell, chief of police. So I believe the question is the, can we add to the question or do we need more? Is that all right? So, We are still kind of in the early stages of having Patricia part of our staff full time. And so we've grown a lot in her ability to the different types of responses, whereas before she was limited in scope because of the contract. So as we get to look at the data more and understanding where the need is and when Patricia comes on scene, that doesn't automatically alleviate the officers that are on scene with her. So if we had another clinician, it wouldn't free up more officers to do other things. Sometimes her response doesn't necessitate us, but that is very much a case-by-case basis. For future expansion, there has been very low-level talks about partnering with a county potentially to have another, but again, very, very minimal for the future, but something to look forward to.

Thank you, Chief. Councilmember, any other questions? Okay. Great. Colleagues, who would like to go next? Councilmember Gee.

Thank you, Mayor. Patrick, Beth, the entire team, thank you. This is not a budget that is just put on the Excel spreadsheet, typed up, and here it is. It's a lot of hard work. And I think it would be safe to say this is a constrained budget. Beth? I mean, we don't have enough money, so we had to figure out how to fit the services within the money we have. So thank you for that. A couple questions to dive into before I share what I'd like to see coming back on the 22nd. I think you alluded to this, Beth, but this will be the third budget. I'll look at another one on Thursday. It happens to be that time of year where sales tax projections are all over the place. Caltrain is up 1.8%, Sam Trans is at zero. A director from Palo Alto says they're looking at 2% up, and here we're looking at, we haven't hit the bottom yet. And we all hire the same consultants. So maybe you can offer a comment on that.

Yeah, it really depends on what each jurisdiction's sales tax base is based on. And we are heavily reliant on sales tax from auto sales because of our our auto dealerships, and that has been a drag on our sales tax performance. Interestingly, luxury car performance has been holding up, but it's us mere mortals that are buying cars where there's softening in that market. So that's the biggest driver. I did... I am monitoring closely our sales tax results and comparing that with what HDL is projecting. And for 25-26, my projections based on what's coming in, this is data through March, I'm within $200,000 of what their projection is. They're projecting that we'll bring in 34, no, sorry, yeah, 34 million, 34.4 million, and I'm sorry, there's too many sixes and fours. Let me start over again. They're projecting 34.6 million based on data through March, And our trajectory of the last months of the fiscal year last year, I've got us at $36.6 million. So our sales tax is performing pretty closely in alignment with their current year forecast. Obviously, next year remains to be seen, but right now we're trending pretty close.

Well, very good. And that just reminded me of a request I made last year, and maybe it's part of why we need to consider a new ERP system, is to have more regular updates on where we are from a revenue standpoint. I mean, my other boards, we see it monthly. And I'm not asking for monthly yet, but at least quarterly to see... where we're headed rather than every June, oh, by the way, we came up short $10 million. At that point, it's too late. But if we can be more proactive about looking at whatever the right cadence is, monthly or quarterly, I think that would be very helpful for the council and the public.

Yes, and I do have a quarterly report ready to go that we can distribute to everyone, but we can provide this, you know, monthly. I'm looking at it monthly, so look to... TO THE CITY MANAGER, OTHER PLACES I'VE WORKED, IT'S SOMETHING THAT WE'VE PROVIDED. SO IT IS SOMETHING, IT'S A MANUAL PROCESS, BUT WE FINANCES GOT IT DOWN TO A PRETTY GOOD CADENCE WHERE BY THE 15TH MIDDLE OF EACH MONTH, LIKE JUNE 15TH, WE'LL HAVE DATA FOR APRIL. AND WE CAN GET ON THAT PRETTY QUICKLY.

I mean, I'll kind of look to my colleagues about what cadence they want. I'll look to the city manager to lead that. But I think more than once a year is important and no less than quarterly. And if the council would like it monthly and you're able to do that, I think that'd be great.

Thank you.

To your transmittal letter to city manager, I mean, you know, and we're seeing the business license tax increase. kind of do what we thought it might do, but not everything we thought it might do. And so my question, consistent with my previous comments earlier this evening, is to what extent do our policies here, in a cumulative standpoint, make Redwood City less attractive for employers? And I think we need to take a very hard look at that. Employers these days have choices. You know, there's plenty of empty buildings in San Carlos. We're competing against Mountain View. When the business license tax was put on the ballot, there was a large tech company that was ready to sign a lease and they said, no thanks. We've seen, at least Amanda shared with us, six or seven potential employers pass on Redwood City. So I think we need to take a very, very hard look at what policies, cumulatively, that council has put in place that make us less attractive, less competitive, and really begin to decide, is that where we want to be? I mean, we love the community benefits that commercial developers have brought to Redwood City, But if they're struggling to fill those buildings, that has an impact on our fiscal health. Empty office buildings don't help us. And so to your slide number, whatever it was, city manager, about looking at policies that we've put in place, we need to be very disciplined and very thoughtful and look at the long-term impacts of that that make us pass. Council Member Strickland, I appreciate your comment, but I'm gonna go in a different direction in the sense that I did not see reserves in both the capital CIP or in the budget. Beth, you put that slide with all those bubbles on it about the unknowns. I know some of my colleagues here might say we weren't elected to save money, but when we know that there's potential liabilities on the city, We need to strategically plan for that and not dip into that 15% from my standpoint. We know, for example, that there is the likelihood of a litigation or claim or at least financial stress on the Veterans Senior Center. We know that, you know, what we heard earlier, there may be a potential impact on an initiative before the voters. We know AB 1383, I would say, has a likelihood of being adopted, which changes the pension liabilities for public safety, which was going to have a ripple effect to other labor groups. We know that 101-84 has financial stress on it. And to not plan for that, from my standpoint, speaking as one council member, is irresponsible. Because we don't have any other fund source to go and fund these things and others that I haven't mentioned. And we need to have some sort of reserve or set aside for the likelihood, and some of these are beyond likelihood, they're very real, of that happening. We do not have a litigation reserve. There's no line item in the budget for litigation. It just comes out of the general fund. And we need to, from my standpoint, plan for these, likelihoods and things that are actually on our table, like this issue with the senior center. That is not pretend. That is very real. And that is not going to go, zero is not going to be the right answer on that. There'll be legal fees and there'll be some sort of mediated or court resolution, but it's not going to be zero. So we should plan for that. My last request for coming back on the 22nd is there's great detail in the department by department budgets. Every department, thank you all for doing that. But I couldn't reconcile that against the details. I think the problem or the challenge is when there's initiatives with multiple fund sources. So like the tenant protection ordinance says it's only 24,000 on the spreadsheet. But when you dive into the department budget, it's a lot more than that. So what I'd like to see is a schedule that shows the total expand for that initiative on a spreadsheet. And I think every council member and every previous council says the budget reflects the council priorities. on that spreadsheet that ties, I'd like to see it top to bottom, those initiatives, whether it's zero to 10 million or whatever, to reinforce that we are spending consistent with the council priorities. Because right now, not everything ties to that detailed spreadsheet. And so when you look at some of the initiatives like the homeless or TPO and things like that, the number on the detailed spreadsheet compared to the department spreadsheet, they're not the same number. And I think the issue is the multiple fund source. So I'd like to see that number tied back. And then I'd like to see top to bottom from a numerical standpoint to reinforce that we are spending on the initiatives consistent with the priorities of the council. So with that, I think hopefully that's helpful. Hopefully that made sense first, Beth. Was I hopefully clear?

We'll put our heads together.

Okay. I mean, I think Patrick understands what I'm looking for, and I talked to him about it. But I was just trying to connect the dots, and they weren't connecting apple for apple. So thank you, Mayor.

Thank you, Council Member Gee. And we'll go to Council Member Strickland.

Apologies. Just two quick responses to what Council Member Gee was sharing. So I think as part of that spreadsheet, I think you put it, one thing that we didn't talk about earlier is that that petition would replace the current TPO, right? It replaces a number of tenant protections that we have already enacted. So there's a... I'm not going to say it's a net savings because it's not, but there is a net difference there. So that's something that should be factored into that spreadsheet. Cost savings. Anyway. And the biggest thing I forgot to mention with regards to the two unfrozen police officer positions is that On page 329 or so, it states that the cost is $350,000. That's only for six months. So the true cost per year is $700,000 for those two officers. And I thought to myself, with an anticipated deficit of $22 million starting next fiscal year, it's really hard to justify adding new staff when we may have to cut them in the future. So that's just one of the other reasons I brought that up. concern over adding new staff who are very expensive when there are alternatives that are available. Thank you.

Thank you, Council Member, Council Member Gee. Council Member Steering, thank you. I just want to be very clear. I'm not, the reserve is for the future unknowns that we don't know. And so the spreadsheet, you know, for example, like I said, TPO, tenant protection orders, in the detailed operating fund, it says it's only 24,000. We know it's not, but because in the department detail, it's a lot more because of multiple fund sources. That number needs to tie to that spreadsheet and then be sorted by whatever so we can see that investment aligns with council priorities. The reserve I'm talking about is to deal with the net difference if that initiative passes, because we don't know what it's going to be. We don't know how much of it is going to replace our current ordinances, what the increased cost is, but that's why we need to plan for some sort of reserve. Since we heard clearly earlier this evening, the city's probably going to have to front that startup of some magnitude and wind down what we have, too. I mean, you can't just turn the switch overnight and say, here's what we have and here's what's different. So that's what the reserve is for because we know there's going to be a cost. We just don't know how much and what the net number is going to be. So that's why I argue there needs to be a reserve because we know if it does pass, there's going to be something. We know there's a claim on the senior center. We know AB 1383 is likely to pass. We know it's likely we're not going to get VLF. So knowing those things, we should plan for them financially.

Thank you both. Council Member Padilla.

I would like to say, I would like to focus on something that I think is important, and it's only going to become increasingly more important, and it's something we've talked about a lot, and it's our PCI index. I think I saw in the budget that we've allocated $5 million annually, but everything that I read said the road, the quality of our pavement, and I know Ms. Warner has educated us a lot on it, but with everything we're talking about and with Beth's, I know that you used green to make it a little happier, but, you know, inflation, tariffs, oil, gas, all of these prices, our road work is only going to become increasingly more expensive, those costs, and it is needed. And when we talk about, when Council Member Gee talks about welcoming new developers or companies or even quite frankly people who want residents who want to move into our neighbourhood. The quality of a city's roads is an indicator of a lot. I think it speaks volumes without having to say it. You know that feeling you have when you're driving somewhere and the road is smooth, it sends a message. And I think that it is an investment worth making. So I actually think that we should be finding the money to put in. I think they should have asked for closer. Because of what we're doing now, we're not ever going to catch up. Look at us. We were at 70. The last time she talked to us, we were at 69. Now we're dropping back to 68. If we kick this can, it's only going to get more expensive and the road work is only going to get more needed and more complex. So I actually would like to see more money in the budget allocated to fixing our roads. So I wanted to put that out there for discussion because I believe it was said that we needed to have $7 million a year to actually have a better quality of roads. So I'd like to put that out there to the group.

Thank you, Council Member Padilla. We'll go to Vice Mayor Aiken.

Well, I'm just going to on the road thing. We allocated more, $2 million of our surplus last year to the roads, and I believe we hired a consultant with that money who prioritized... who did a whole new assessment of the roads and priority areas. And that's kind of work that's ongoing. So my feeling about that is let's let that play out. We're going to get reported back on that. And again, because of all the unknowns, I feel like we're working on that right now from the two million, the extra two million that we allocated last year.

That's all. I appreciate that. And I remember I was one who was asking for that extra $2 million. And I do appreciate the gentleman who gave us a nice talk about the different slurries. But my point was, we're just constantly playing catch up. So even then, we're just going to go farther and farther. And it's going to be more costly. So I just want us to think, we're going to need our roads. We're going to use them. I'm just, if we kick this can, it's a very expensive can. That's it.

Thank you.

Thank you council member and I'll just make a quick comment that absolutely and that's why we have I mean so many capital needs right and the budget went into detail about just the revenue sources that we used to be able to fund all of our needs like street services right is just not meeting the cut anymore so. Just want to appreciate that comment and also the work that staff is doing to start that conversation and get a sense of what that total sum is going to be. Just wanted to add that comment, but colleagues, any other? Council Member Howard.

Well, I really appreciate all the comments and from all my colleagues but I also want to thank our staff for the budget that you have presented to us because I feel so totally informed. I'm not happy with some of the unexpected outcomes and things that are very disappointing like DLF. But being transparent and letting us know, letting the public know this is where we're at will make us a better city because we'll pull together and we'll try to solve these problems. I do believe we're going to have to exercise a great deal of discipline these next several years. There's just no doubt about it. As much as I want to have many things done, our needs exceed the amount of money that we have, and that's just being totally realistic and honest. And I think the public needs to know that, if they haven't already seen that. But I did want to ask if we could ask Amanda, because I have concerns. We've spent so much money on our downtown, spent so much money on beautifying our city and making an attractive destination. I do have concerns that businesses are not locating here, especially larger ones, and I was wondering if she could give us a report on that. Not necessarily tonight, because we have a lot more business to take care of, but I really would like to know what could we be doing better? What can we be doing differently? Are there needs we're not meeting? that these companies decide not to come here. I think we're a very desirable place for a company. I mean, we have attorneys moving from certain cities because the vibrancy here is what is bringing them. So I think it's important that we understand what's the disconnect here because maybe we can resolve that and that might help. Because certainly we need more companies locating here to help pay the bills. So I think if Amanda could do that for us and maybe with her, Patrick, come up with, well, it seems like maybe we didn't streamline this enough or this didn't meet their needs. Maybe we figure out, well, maybe we needed to look at it more closely and meet their needs. So that would be something I'd really like to see. I don't want to stop lobbying Sacramento for the vehicle license fees. I think if we do that, that would be a major mistake on our part. If we stop going, they'll think we don't care anymore, and they'll just write us off. So I think it's important that either by email, by phone call, contact your legislators in Sacramento. I'm asking everyone in Redwood City. San Mateo County is one of... Three. Three counties in the state of California that has been chosen not to get vehicle license fees based on an outdated formula. And so that's truly upsetting to me because last year they said they were going to fix the formula and solve the problem. and they pushed it off. So if you don't become the thorn in their side, we're going to be treated like they can do without $5.5 million. Well, we can't. So if anyone here in the audience has an interest in contacting your legislators, they're easy enough to get those numbers, write an email, write a letter, make a phone call, because we can't back down. We have to keep. Talking the county is being very aggressive and we're working with the county. So I strongly advise you These are monies that are owed to our city that are owed to our County and they're depriving us of that money and that's wrong So we're asking for your help on that But other than that, I think the staff has done a marvelous job of really highlighting what we need to do and that we do need to be disciplined. You're putting emphasis on the right areas, in my opinion. And I think we just have to be careful that we don't jump into new projects or a lot of new things when we really haven't cleaned up what we already have. So that's where I'd like to focus. One thing I would say is modernizing our service delivery I'm very excited about. So thank you, Patrick, for not losing that vision that you presented to us when you interviewed with us. Really appreciate that. But other than that, I just think the staff's done a wonderful job and appreciate their honesty in coming to us with the real facts so that we can make good, solid decisions. Thank you.

Thank you, Council Member Howard. We'll go to the Vice Mayor.

So first of all, it's fun to see so many of the staff here tonight. Thank you for staying up with us. And this budget, or last year's budget, won an award. I wrote it down somewhere. The Distinguished Budget Presentation Award by the Government Finance Officers Association. And it's no coincidence. You guys are just amazing pros. And I'm so glad you're here with us tonight. On both my colleagues, so I don't like to, you know, when it's sparse like this budget where we're really tightening the belt, I don't like to second, I personally don't like to second guess staff's choices. We do policy, they do implementation. I do love the clinician. I'm thrilled, and I'm thrilled that she's on staff instead of a consultant. And thank you, Council Member Stricken, for asking about it, and thank you for your answer, Kay Bell, that you're still assessing it and improving it, and that's good. I'm fine with hiring the new police officers. We do need more traffic safety. We do need... all of that. So I just, this one, I'm just gonna go through, well actually let me do my question though to Beth. So is it accurate, Beth, that Stanford is our fourth largest employer and is exempt from paying the business license tax? Is that accurate?

Yes, that's accurate.

Okay, thank you. So now with the Greater Downtown Area Plan, So, Amanda, I just think it's amazing that the engagement exceeds what we thought the engagement was going to be. So, is that, maybe you're not the one who knows that. I read it on page 96 of the budget. Oh, that's you, Jeff. So, is that because people are just so excited and they want to be involved? I mean, that's just awesome. Please tell me more.

Jeff Schwab, Community Development Director.

Yes, I think in part it's the excitement about the possibilities of what the future holds. And in part, I do think it was staffs reaching out in multiple formats to the community, going out door to door, going in various meetings, having the speakers come speak about some of the topics. I think it was a combination of things.

Well, I mean, it's the best kind of building of your built environment is getting community feedback. We're the ones who live here. We're the ones who use everything. And so I'm just so thrilled that we're not facing apathy. And it's kudos to our community and to our staff. So thank you. Keep up the good work. This one floored me. 69% of the acreage in Redwood City is open space. That fascinated me. I can't remember the page, but Patrick, you're going to get me a map of all that open space. And then this one is kind of fun. 255 days a year are sunny in Redwood City, according to page 49 of our award-winning budget report. I've been telling my neighbors that since I read it. The police statistics, KBEL, What is it? Human to human crime is down 17%. What's that statistic?

I took a picture of it. So it's the crimes against persons is down from 2024 to 2025. Yeah. And it's down 17%. Yes.

And I asked you about this in writing. And it's just you said the reason it's hard to know, but it's a combination of factors. Is that accurate? Yes. And crime in all three categories is down year over year from 24 to 25. Yes. And the greatest is human to human or whatever you call that. Crimes against persons. Crimes against persons. So I want to thank you and all your staff. And it's important because as people may know, uh... sixty five percent of our general fund budget is police and fire uh... it's it's the bulk of art taxpayer and so we think i thank you for uh... really producing some good results and in improving public safety and uh... Thank you. And then can you just, you wrote about this, but if you could just talk a little bit about the success that the community service officer at the high schools. Yeah, our school liaison officer. Your school liaison officer. Yes. Can you talk a little bit about that success?

Yes, so since Officer Aaron Sussman has been on campus at Sequoia about October, he's really done a lot of work building relationships with the youth and meeting them where they're at and building such a relationship to where they have been comfortable to report crimes or things that may happen in the future to the officer as opposed to letting them happen and someone getting hurt. So just our mere presence on campus has really helped develop that trust with our youth.

And then there was something in your written answer about like, that kids understand he's not enforcing school rules, like he's not going to send them to the principal because they didn't do their homework kind of thing?

Could you talk a little bit about that? Yes, so he is not responsible for anything school-related as it pertains to their schoolwork or any discipline that the school would handle. And the school would call us in if they requested us, or if there was a safety issue at the school, or even a possibility of a crime, then we would be involved, but it's completely separate. Okay, so thank you.

That's helpful. Thank you. Thank you for all you do. I was surprised to learn on page 67 that our transit center, and Mr. G, I'm sure you already know this, but I was surprised that our transit center is the largest in the county other than Daly City. I'm sort of surprised that we're bigger than Millbrae with BART. So I think that's a huge selling point for us to bring those big employers because we're such a transit hub. I'm almost done. I'm excited about Mr. Baraka, I'm really excited about the training facility, the fire training facility. Would you care to give us an update on how that long awaited fire training facility that we've been waiting for, if you wanted to say a few words about that?

Yeah, good evening. Thank you, Baraka Carter, Fire Chief. So this is actually a great opportunity to highlight some of the areas where we're currently doing our training, right? So with the absence of having a dedicated training facility, which would be a staple facility for the community and the fire department, We're currently doing our training like at that the 3 story parking garage right across the fire station which impacts of the community impacts a traffic and then we're also would utilize the open parking lot behind the sports basement in Kohl's which. you know, has its challenges as well because, you know, the time that we're actually doing our training, you know, delivery trucks, we're really having to coordinate with the local businesses to ensure we're not impacting them and residents. So we're really hopeful that we're able to identify and move this project forward. It is in a long time making, and it will be a dedicated training facility for our staff. which really emphasizes our ability to be more resilient with responses, tactics, our ability to ensure that we have a safe community, and then it'll also be an environment where with our youth, our cadet programs, they'll have a dedicated training facility as well to enhance those skill sets to hopefully get them into the fire service as well.

Thank you so much, and I know I speak for myself and probably all my colleagues that we will help you in any way we can in making sure you get that fire training facility as soon as possible.

Appreciate the support.

The sales tax, Beth, I guess, and Jeff, you don't need to get up there, or maybe neither of you do, but just I would really love with our greater downtown area plan and I know part of it is just magic like you can't just wave a wand but this really speaks to the need of more retail downtown and I don't know, we've needed it for a long time and we've tried all sorts of things over the years But maybe this Greater Downtown Area Plan, maybe there's some exciting way to reignite retail downtown. I go to some other towns nearby and they'll have like unique shops, maybe not chain stores. I'm not a retail expert. But Amanda, if you have any thoughts or if there's any way we can turbocharge our budget to... Oh, did you want to say anything, Amanda? Please. Yes, please. Because, you know, sales tax, if we had some really exciting retail stores, that could help our sales tax.

Amanda Anthony, Economic Development Manager. A lot of our sales tax comes from our auto dealers, as Beth mentioned. A great deal of it comes from our discount retailers like Costco and Target. And then we have a lot from appliance stores. So the small retailers that I think that you dream of are not huge sales tax producers. In the aggregate, I think that they could be. The other thing that's really been hitting us is Amazon, but not in the way that you think. Part of it is how the state allocates Amazon revenues. So although we have quite a few, I'm sure a ton of people here who order on Amazon, one of the things that has changed in the last five years and has impacted our sales tax revenues is that the state allocates the pool. And so most Amazon sales go to the pool. And it's allocated by what your percentage of sales tax is. So if you're already doing better in sales tax, then you get more sales tax from the pool. And so that's great, but also kind of self-fulfilling. But Brisbane opened two Amazon fulfillment centers in the last year. And what it means is that all of those Amazon sales are allocated now to Brisbane and there are 4,000 people instead of the pool and maybe our 82,000 people. So that's been a really big hit that we kind of don't have a control over. I think one of the things that we would like to do is continue to figure out how to make retail work. But we do get quite a bit from restaurants, from auto dealers, from appliance stores, and our discount retailers.

Well, thank you. That's really informative. I'm very supportive of the NRT. I do feel that people are frustrated with illegal dumping carts, grocery carts, just willy-nilly all over the place. I hear a lot about it in my district, and I'm really hopeful that we can activate that. So thank you for thinking of it. As I put in my email, I'm excited about opportunities to partner with the county who, I'll just say when I did the math, We would need to spend our $200 million general fund every year for 25 years to make up what the county spends in its general fund in one year. So some of these, you know, we have the county courthouse, we have, we're the county seat, we have the county jails, and I'm looking for opportunities Some of our issues are health issues, and we don't have a health department, but the county does. And so I really feel that they have tools that we don't have. They have money that we don't have. And I'm looking in the next 12 months and beyond that we show the county how much we're helping them and how much, if they gave us money, they would be better off and that it would be a more fair thing. And the NRT is an example of it because some of it is mental health issues that people steal grocery carts and dump stuff. And I just see some opportunities there. I think I'm done. Let me just... I guess I'll just say one final comment, and that is... The budget was award-winning, and it was amazing, particularly the Redwood City history page was outstanding. I was chagrined, a little bit disappointed, that our Veterans Center had two or three cursory sentences without an amazing picture. So I hope next year that we tout our amazing Veterans Center a little bit more. I'll leave it there.

Thank you, Vice Mayor. Any?

Councillor Sorkin, we'll go to you. Two quick responses for discussion. So I support the idea of like allocating two million more dollars to our pavement program to get us up to 70. But I'm just like asking myself, where do we pull it from? Because we have to make a trade off. And I don't know what the answer to that question is. But if we can figure that out today or June 22nd or somewhere in between, I'm open to that. So I just wanted to express my support and openness to that. I just don't have the answer to the question. And finally, on the topic of being cognizant of unintended consequences of policies or taxes or what have you, now they may affect our desirability to attract new business. i think aside from that it's also our job to be ambassadors to the business community right and like i go to rcia the robot city improvement association uh meetings on a monthly basis and it'd be nice to see some my colleagues there as well i know we all can't make it but um you know kind of showing up to these spaces um the chamber hosts uh you know that rcia has um and developing those relationships. That's something I learned from Council Member Gee very early on, that we have to build those relationships with the business community to attract them to Rabbit City. So putting it out there. Thank you.

all right not seeing any other lights on i guess it's my turn staff again thank you um for all the work i i know there are so many more names than what are included in the first couple of pages of the budget of people who played some role in developing this so to everyone who's listed and everyone who's uh tuned in or have helped um thank you and i sort of my talking points first. I just, I feel like this budget really speaks to all of the unknowns that we've been dealing with over the course of the year. The things that we're tracking to see what the outcome is, right? Like our funding streams at the state and federal levels, BLF, right? Councilmember Howard and I went up to Sacramento to let them know what we thought of that change. pension laws at the state level, the ordinance we heard earlier tonight, and then there are things that aren't even on our radar yet that we haven't planned for. So it's not an easy thing to do, but I think this budget really speaks to our staff trying to answer those questions the best that they can, so thank you. And I think there are a lot of strengths that were included in this budget that were highlighted. Our restaurants, our hotels, the discount retailers, our car dealerships had a little bit less than projected, but still a very strong year. There are highlights in parts of our economy that are doing well, and I don't want that to be lost in 451 pages of our budget. And there are really interesting ideas. The neighborhood response team, I think, rises to the top. That is definitely the concerns that are always going to rise to the top of the inbox for people who are worried about illegal dumping or are noticing shopping carts in their community, right, abandoned. And, you know, I think being able to change the way that people see government, our government in action, I think just builds confidence. And I could see this being something that will generate more costs because people will want to see a neighborhood response team, right? We're going to start seeing that many more complaints coming in because people will expect that we're going to be on top of it that much more. So I'm really excited to see how that rolls out. I mentioned, you know, to Council Member Padilla's point around the pavement quality. our work around capital needs is really important right um from everything from street pavement to replacing buildings um and i'm really proud that you know we are going to be having a conversation around plas as to how we build and who is constructing these projects so i'm excited for that work to continue the economic vitality plan right that amanda and her team are going to be working on that is really exciting um I've heard it at the dais before that so many of us want to nurture our local businesses and also we need to be self resilient. So the more that we can nurture who we have here and attract more businesses to Redwood City, it's only going to make us stronger. So the last thing that I just want to mention on the strengths here is I'm going to use a line from our city manager, modernizing our city operations, including not just the ERP, which is so important for our staff internally every day, but cybersecurity is something that so many local jurisdictions are playing catch-up on. So to make investments now before we need to react to something is really important. So thank you for including that, staff. And with all that said, lots to love, but also I felt like there were still some things that were missing. My colleagues mentioned a few things. Wanted to throw my support behind quarterly updates on city revenues. I think especially if we're coming up with an economic plan, it makes sense for us to start familiarizing ourselves with what the picture is on the ground. I think we had a conversation maybe last year, the year before, around reserve funds. I think it's time for us to talk about that so that we can be ready for the things that aren't even on our radar. And then the last couple of ideas are just It feels like these are responding to the level of homelessness that we're still seeing in our city and the work that our staff are doing to address that for our residents. I really like the idea of a new clinician for our police department. I think we're already heading in that direction with community service officers who are taking on more work that has traditionally taken up police time. So I think building that into our work plan makes a lot of sense, and there is a different purpose than the outreach workers that we've hired, right? I think the outreach workers are really trying to just build trust, build a relationship, whereas, you know, our clinicians, I'm thinking of Patricia, is de-escalating those situations where I think an outreach worker typically just wouldn't engage out of their own safety, right? So I see the value in the clinicians, and I Also I'm cognizant that our labor groups are expecting some extra support and some backup there. So I don't want to lose the conversation piece around our clinicians and would like to see our staff sort of explore what that pathway to hiring a new clinician in the next budget cycle would look like. Chief Bell, you mentioned that there are some questions. You are still developing what our current clinician's role is, and I'm curious to see what questions we can help answer and what policy questions the council can weigh in on. But I think there's a lot of value in hiring another clinician. And in the same way, I feel like I've heard from our city staff, our first responders who are addressing issues around homelessness every day, talk about the housing pipeline being backed up, that we have... beautiful navigation center on the other side of 101 and not enough people are moving out for us to be able to start transitioning people into the spaces that we have at the nav center and last year we had talked about how this council unanimously wanted to explore prop 1 as a potential funding source for this kind of housing and i think again, baking this into the work plan so that we can be ready so that if a grant became available, we're not being reactive, but we already have an idea of where we want to place the housing, where it makes sense, and this won't happen overnight, and it's going to need intergovernmental support, so I think having that conversation now, building it in as a policy discussion so that we're prepared when the when the opportunity arises. We're ready to go into it 50-50 with the county and hopefully tap into some of the revenues that the county has because this is social safety network. So I think all of those circulate around just homelessness and how we best support our unhoused neighbors. And I know that won't happen this year. So how do we just start those conversations? How do we start answering questions for ourselves so that we can start taking advantage if, let's say, we see VLF money, right? That would be amazing. Or another bucket of funds, a grant that we've secured. So I... know it's late um i'd be open to just hearing some of my council colleagues reactions to that about baking this into the work plan for the next budget year but um i'll leave it there i think this has been a lot of work to answer a lot of the unknowns that the city's facing so um i appreciate that work from staff but we'll open it up to my colleagues if anybody has any any reactions to that Council Member Serko.

Yes. I want to bake that into the work plan. Referring to Prop 1, you mentioned? Yes. Okay. I know we already have a couple little properties kind of in the pipeline with the county. Okay. But continuing to just explicitly place that in the work plan would be really helpful in advancing our shared priorities and goals as a city. And I also want to throw my support behind the quarterly reporting on sales tax revenue. Thank you for reminding me about that.

Thank you, Council Member Strickland. Council Member Howard?

Yes, I'm certainly in favor of looking into that, but I'd like to let our city manager and our police chief determine when and how it's implemented. I don't want to push something if it's not ready, because it sounds like Chief Bell has some more research to do and a number of other things. So I'm going to keep putting it in your capable hands. You've heard the desire. The need is certainly out there. So I think it's something good to plan for when it comes. That's something you can bring back to us. And was there something else? I'm sorry. What you said I agreed with. Let's be shovel ready to work with the county. I'd like to do that very much, and maybe we can do some projects together in the future.

Thank you. Thank you, Council Member Howard. Colleagues, anybody else?

I would just like to throw out that I was thinking about something that Vice Mayor mentioned about how we do. We are the county seat. We have the navigation centers. We have the jails. So I would like to just put it out there that I think we are a fantastic neighbor and I would welcome the county working with us in any way they can. I think you did mention, Vice Mayor, that they have a much larger budget than we do. And I would... I don't know. I would think that wasn't the clinician originally funded by the county. Could someone correct me if I'm wrong? Was that originally funded as a pilot? Okay, well, I do think there is a connection there. I don't know if we can always distinguish between a Redwood City resident or a county resident, but I do think there's an opportunity for the county to help.

Definitely. Thank you, Council Member Padilla. Any other thoughts? Okay, council staff. Patrick, is that enough feedback for you all?

Yeah, that was great. And what we'll do from here the 22nd is fine tune and we'll definitely see the clinician put in. It might be on the work plan with some recommended approaches. But there's a myriad of other items on here. I took a few of those notes. i saw some of my staff take notes but not everybody appreciate that but anyway we'll we'll put a comprehensive package together on the 22nd but i really appreciate it thank you great and patrick just to make sure we're not also losing the um

the actual housing, the permanent supportive piece to that, right?

Sorry, say that again?

The permanent supportive housing, just exploring that idea. Correct. Just making sure. Okay.

Yeah.

Thank you.

Obviously, there's already full support. We'll come back with recommended approaches on how it would lay out with the funding strategy on our housing fund. So, cool. Thank you. Awesome. Thank you, City Manager.

Mayor, I'd like to make a motion that we adopt the resolution setting June 22nd, 2026 as the date for the public hearing and adoption of our fiscal year budget.

Is there a second?

Second.

That was a motion from Councilmember Howard, a second from Vice Mayor Akin. Could we get an electronic vote please?

Motion passes with six votes. Council Member Chiu is absent. Thank you.

Thank you again, colleagues, for doing the homework and a great discussion tonight. We'll move on to item 11, which is our public hearings on the smoking regulations related to tobacco retail permits. And our economic development manager, Amanda Anthony, will give a presentation. And I'll now pass things over to Amanda.

Thank you so much. Amanda Anthony, Economic Development Manager. We have a short presentation just going over some of the pieces from last time. Crystal, next slide. No problem. I'm going to give you just a brief recap of the April 27th presentation, a reminder of the staff recommendation, the action taken, and then tonight's recommendation. On May 11th, on April 27th, City Council received information regarding the tobacco retailer regulation in Redwood City, including the city's ordinance, the county's ordinance, and potential approaches. You can go to the next slide. Just a reminder that one of the things we talked about on April 27th is how state laws have evolved to ban flavored tobacco in most forms. This was done as part of a ballot measure in November of 2022. There's also been a lot of evolution in local law. Redwood City adopted an ordinance banning flavored tobacco in all cases except for three businesses who were offering on-site adoption. It was any business that had their permit at that time. We also, in San Mateo County and Redwood City, also banned e-cigarettes and vapes. The effect of these bans has been positive. I don't know if you guys remember this slide, but lots of down direction arrows on youth access and use. Not only youth access and use, we are also seeing decreases in adult access and adult use as well. And so these are really positive outcomes. In 2023, San Mateo County updated its law to add restrictions on locations, discounts, and types of products sold. The impact of that is that they also started enforcing for any city that adopted their ordinance by reference or verbatim. So these are the background, we talked about a lot of these things at length and I'm happy to go through any, answer any questions if you've got some. Next slide please. So on April 27th we recommended that the City Council adopt the county's ordinance for regulating the tobacco retailers. And these are the reasons why. The county would manage all the administration at no cost to the city's general fund. The retailers would pay significantly less for their permits. The county would be able to implement effectively immediately after the ordinance effective date. So if it were adopted tonight, they would be able to start enforcing, you know, as of July 7th. The county would be managing enforcement in all cases where retailers are unpermitted or selling illegal products. And the county permits hookah lounges to continue to offer non-tobacco hookah to keep operating, but they would not be able to sell tobacco-based hookah anymore. So those are the reasons. On April 27th, we read the first, we waived the first reading and introduced the ordinance and city council voted to approve that staff recommendation five to two. And we also set the hearing date. So today is the public hearing. We are required to do a public hearing because we are adopting this, or we are recommending that this be adopted by reference. And in order to adopt a ordinance by reference, you have to have a public hearing on the second date. So that is what is before you tonight. And we can move to the next slide. The recommended action is to waive the second reading and adopt an ordinance amending Redwood City Municipal Code to repeal what is currently there, adopt by reference the county ordinance, and then amend some definitions. Thank you.

Thank you, Amanda. Appreciate the great presentation. And with that, we will now open the public hearing, and I'll pass things over to our city clerk to help facilitate public comment.

Thank you, Mayor. I do have 11 speaker cards at the moment, and I've got a few hands on Zoom. So last call for any remaining public comment on this item tonight. I'll let the Zoom folks queue up. We've got a few more coming in. Okay. So we have a total of 18 speakers. We've got 11 in person and seven on Zoom. How would you like to proceed with the public comment, Mayor? Two minutes, one minute?

We had 11 speakers.

And we have a total of 18, actually.

18?

Yeah.

Let's go with one minute. Okay.

So everyone will be allotted one minute. The timer will begin when you start speaking. We will call the in-person speakers first, beginning with David Kasouf. will be followed by Neil Lundy, and then we'll move to our Zoom folks. Thank you.

Good evening, Mayor and Council Members. My name is David Kassouf, and I'm the owner of the Sandwich Spot. For more than 15 years, I have employed local residents, paid taxes, invested in our community, and built a business that serves Redwood City. I'm here tonight because the issue is not just about the hookah. It's about jobs, small businesses, and the families who depend on them. I respectfully ask you to consider the real-world consequences. of eliminating the grandfathered exception that existing businesses such as the Sandwich Pasha and Rock and Wrap relied on for years. Many of our customers come for hookah, but they also buy food, drinks, and support our business throughout the evening. If that reason for visiting is removed, customer traffic will decline, sales will decrease, employee hours will be cut, and job will be lost.

Thank you.

I wish you gave us two minutes like many others.

Thank you. Our next speaker is Neil Lundy, who will be followed by Ayub Gochi.

Good evening, Mayor, members of the council. My name is Neil. I'm a local business owner. The retail enforcement you're adopting is overdue. Protecting our young people with you on that, I definitely agree with. Concerns most about the message that a business can follow our city's own law to the letter and still have the ground pulled out from under it. When businesses face more regulations, reduced operating flexibility and uncertainty about their future, customers spend less, businesses invest less, and sales tax revenue suffers. If the city continues adding restrictions on long-standing businesses, investors will turn away. Don't think these three businesses are fully considered when this was drafted. Even California's statewide flavored tobacco ban exempts on-site shisha at 21 and over venues. We're not asking the council to invent anything. We're asking them to stay in line with the state law. That's it.

Thank you. Our next speaker is Ayub Goksi, who will be followed by Jameson Fong.

My name is Eyup. I am Pasha owner. I would like to speak about our investment that business. Over the years, we have invested significant amount of money into our business, our facilities, equipment, outdoor space, permits, furniture, and improvements, all with understanding that could continue operating under grandfather inspection. This investment was not made overnight. It was made over many years based on the city's previous decision and the acceptation that existing business would be allowed to continue operating responsibly. Many people don't realize that hookah supports much more than just hookah sales. It brings customers who also purchase food, drinks, and other services. Many businesses depend on that customer traffic to survive. Employees depend on those jobs. Vendors depend on those orders. And local businesses depend on those customers to continue to visit the Reservoir City.

Thank you. Our next speaker is Jameson Fong, who will be followed by Ali Ahmad.

Good evening, Vice Mayor, Mayor, Council Members. My name is Jameson Fong, and I represent the owners of Posh Mediterranean, the Sandwich Swat, and Rock and Wrap. I think it's very clear and I don't want this to be missed that the restaurant members are all in favor of protecting the youth and supporting as much regulation as that is necessary. I think the issue was mis-framed as it was an either or situation. That the situation was we must and can go with just the county ordinance or self-regulate the same way that Burlingame has done and Foster City has done. I think it's very very poignant that today was the budget and you're talking about looking at losing significant revenue from 3 standing businesses that have been here for over a decade. So I think there is still an opportunity to instead of going with the county's way. Self regulate continue to use your own your own resources. Thank you.

Thank you next speaker is Ali Ahmad will be followed by Gabrielle

Hi, good evening, everybody. My name is Ali, owner of Rock and Raps. I've been here like 13, 14. When I came here, it was very slow business in Redwood City, downtown empty. We helped how we're going to make it busy. We opened the restaurant, the hookah spot, and And invite people to come to Redwood City. It becomes a culture. So a lot of people get together night time, day time, with this hookah and drinking tea, come to downtown Redwood City. And we invest a lot of money in our businesses. In just a bucket, it's going to cost me over $100,000. Because I was dependent in that I keep the hookah in my business. All of us, three of us, the Rock and Raps, Persia, and South Spot, we pay a lot of taxes for Redwood City. I mean, we want to keep it the way it is. Please, if you don't mind, and keep the city alive. Thank you.

Thank you. Next speaker is Gabrielle Mihaslovich, who will be followed by Omar Salem.

Good evening. My name is Gabrielle Mihailovich, and I am here to speak against this motion. Redwood City is a community that supports the American values of business entrepreneurship, culture, and celebrating diversity. Our community leads the peninsula in highlighting multiple cultures through channels such as restaurants, festivals, and other community gatherings. The establishments listed are prime examples of honoring the roughly 20,000 plus Arab Americans living in San Mateo County and Northern Santa Clara. Year after year, the establishments have followed and supported American federal regulations, respectfully moderating the sale of any tobacco products to adults ages 21 and over, and they stand with the community on supporting minors not participating. If any of you were to go to these establishments, you would see a line of people from our local community and neighboring communities supporting our businesses it's their home away from home and though many of you may not understand the cultural practices i know that redwood city supports that diversity and i pray that you guys stand with this community in understanding their culture and their diversity thank you thank you thank you our next speaker is omar salem who will be followed by jeffrey vasallo

Respectful Mayor and Council Members, I want to start with this. In April's hearing, many people spoke but none was truly heard. Today, I want to speak to you differently. Not as policy makers, not as politicians, but as leaders. You have the power to create a Redwood City Ordinance. one that targets the actual problem. Do the work. Differentiate between irresponsible, unregulated smoke shops and regulated 21-plus establishments. Not because it's easy, we know it's not, but because it's right, because leadership is measured by whether you stood up when it matters. Years from now, people will not remember how efficiently this moved through committee, but they will remember whether you listened, they will remember whether you stood up for inclusivity, And they will remember whether you had the courage to say, we're not just going to follow, we're going to lead. As Vice Mayor Aiken said earlier, we haven't created this. About AA, please listen to the 700 petition signatures you've received. Thank you. Thank you.

Our next speaker is... City Clerk, sorry to interrupt you. It's almost 11 o'clock. I think we've got a vote to extend the meeting. Mayor, I'd like to make a motion to extend the meeting to 1130. Thank you. Is there a second?

Second.

That was a motion from Gee and a second from Councilmember Howard. Could we get a vote, please?

Thank you.

Hello, my name is Jeffrey Vassallo.

Sorry, Jeffrey, one second. Sorry, we're taking a quick vote. And we'll give you your full time.

Motion passes with six votes. Councilmember Chiu is absent. Thank you.

Thank you. Over to you.

My name is Jeffrey Vassallo, and I noticed a few speakers ago you were looking for ways to investigate ways to add revenue to the county. In the meantime, you're taking away hundreds of jobs of people of Redwood City that have families, and these establishments entertain thousands of people a week. and bring in millions of dollars of business a year. So it kind of contradicts what you guys are trying to do here, close businesses down and increase revenues. So I've noticed recently in the 45 years in this county, we've taken away entertainment. We've taken away the Redwood City Drive-Ins, the go-karts, the miniature golf. What's next? We take away the parks? So I'm just saying to help your city by leaving these establishments going and have these employees keep their jobs and more entertainment in Redwood City, not less.

Thank you. Next speaker is Trisha Barr, who will be followed by Astrid Riber.

Thank you. Mayor, council members, thank you for the opportunity to speak tonight. My name's Trisha Barr, and I'm a mom of three kids and the chair of the San Mateo County Tobacco Education Coalition. I'm asking you tonight to please adopt the county's tobacco retailer ordinance. This past weekend, I visited two local retailers. One downtown, I'd asked for tobacco, flavored tobacco product, which is illegal to sell here in Redwood City and in the state. The clerk pulled hidden flavored product from behind the counter and sold it to me. At a vape shop on El Camino, there were walls of flavored vapes and other illegal flavored tobacco openly on display, which they also sold to me. So that tells me this is not an exception. This tends to be the norm. So right now, last time we heard about the $100 fine that is really not taken seriously by retailers. It's just sort of a cost of doing business. You have the opportunity today to close that, to strengthen the existing ordinance with some teeth. And I'm happy to pass this around. I have receipts in here.

Thank you. Next speaker is Astrid Riber, who will be followed by David Riber.

Good evening, my name is and I'm a proud Redwood City resident and parent. I raised my three children here who all attended Redwood City schools. I'm here to ask for your vote in support of adopting the county's tobacco retailer permit ordinance. I worried for years when my children were teenagers about how easily they and their friends could so easily access vaping and tobacco products. So I completely understand what parents in this situation today are going through. I want our local businesses to thrive and I believe they can continue to do so while adhering to the guidelines that help ensure the health and safety of our children. The adoption of the ordinance will also help with the resources needed for regulation and enforcement in order to protect our youth since this would be handled by San Mateo County staff versus our already spread thin city resources. Although parents and schools can educate students and support prevention efforts, education alone is not enough if there's no consistent enforcement in the community. Until Redwood City adopts a stronger ordinance, there's very little the city can actually enforce, as heard by Ms. Barr. Our students deserve to grow up happy and healthy in a community that takes their safety seriously. Thank you.

Thank you. Our next speaker is David Reber.

I live in Redwood City for 25 years now and raised three children in the public schools right here. This is about the health of our community, of our children and our adults. Tobacco use is starting to increase again in our schools. Redwood City is currently by far the city with easiest access to vaping and tobacco products. If nothing is done, tobacco use will continue to go up in our city. We do not want to be an island of tobacco and vaping consumption in the Bay Area. Some vaping products are equivalent to 18 packs of cigarettes. Others are equivalent to 30 packs of cigarettes. Things change. 60 years ago, cars didn't have seatbelts. 100 years ago, there were no semaphores or street corners. Maybe not everyone agreed to those changes at first, but they were implemented for the benefit of the community to save lives. Please adopt the county's ordinance. Let's catch up to the rest of the county and the rest of the state. Thank you.

Thank you.

Thank you. That concludes our in-person speakers. But Mayor, I just wanted to apologize because for public hearings, we can have up to an hour of public comment. And I had asked for your feedback on public comment timing because it was the late hour. But I wanted to say that maybe we can offer the opportunity for the in-person speakers to speak for an additional minute before we move on to our Zoom speakers, if you're okay with that. And again, I apologize for the confusion.

No worries, City Clerk. I think that makes a lot of sense to offer that up.

Okay, thank you. So if you have given public comment in person this evening, and if you would like to speak for one additional minute, feel free to approach the podium at this time. David Kasuf, welcome.

Thank you for this opportunity. I'm not going to talk from the paper, as the lady respectfully has the cigarettes with her. It's not a hookah. So she brought here to show all of you guys what the kids doing and you know exactly who is violating every single law in Redwood City. So the job of the city council and everybody else in Redwood City to be responsible to save us as residents of Redwood City, which we respected every single rule that you did. And another thing, you were talking about South San Francisco restaurant. It's open and they sell food. They are not selling no nicotine-free hookah at all yet. The restaurant is under construction. And all what you showed on board here for statistics, they were really wrong. And somebody needs to read and get educated about the hookah. I have never seen a kid walking on the street with a hookah and two charcoals on top.

Thank you, David.

None.

Thank you. Are there any other speakers that spoke in person this evening that would like an additional minute?

Thank you. Thank you again, Council. I did just want to reiterate because one aspect that was brought up at the last council meeting was that there have been other instances of successful businesses running with non-nicotine or non-tobacco hookah. And I think that that was misstated just because That hasn't happened yet. There was one establishment in South San Francisco that previously, without a permit, was selling hookah. Since the implementation by the county, they have been told that they have mentioned that they would try to sell tobacco-free hookah. That still has not happened yet. And that business, as I've spoken to the owner quite a few times, is not sure if they are going to be able to survive. I think that does need to be considered because it is not just a, oh, they can just pivot to something else because there's evidence of this success in other cities and it just is not there.

Thank you, Mr. Fung. Any other speakers for one additional minute?

Hi, my name is Eyup Pasha Onur. I checked the police records last 20 years. We didn't find any record of young kids smoking hookah. Hookah is different. Vape is different. Vape size is like that. They can put it in pocket. They can smoke everywhere. Hookah size is like that. And then you have to get an electrical heater for the charcoal. They can put it in the pocket or bag. They can smoke in the street or anywhere. We need to understand hookah is different. Vape is different. We are not selling the three locations here, Sandwich Spot, Rock and Wrap, and Pasha. We are not selling tobacco. We are selling hookah. Any kids or any adults come, they want the tobacco. We are not selling to them. You have to understand we are selling hookah. Like Burlingame and Foster City, two hookah places, and they give the permission to them to sell hookah. They sell hookah, no problem. Do the same thing in Redwood City.

Thank you. Any other speakers? Trisha Barr, welcome back.

Regarding hookah, no one is talking about taking away jobs. Hookah businesses are also restaurants and bars. They also have other options other than flavored tobacco, including switching to non-tobacco products like steam stones and herbal products so that you can keep that social experience without tobacco. Council members, you have the opportunity tonight to align your policies and your values and truly protect Redwood City kids. We just heard about the budget challenges and city staff spoke last time about the cost of implementing your own program. We know that there's a gap here in enforcement. Please adopt the county ordinance and put real enforcement and compliance behind your tobacco law.

Thank you. And Mr. Salaam, welcome back.

Three very quick points. Cultures do change, but they change from within. They don't change by telling people what to do. Number two, I want to talk about if Vice Mayor allows me again to quote her, we have not done this. This place exists, local government exists, so we can adhere to local needs. We can keep Redwood City a special place. We can stay as a magnet for people from all over the Bay Area. Third point is you were talking about budgetary constraints, and I absolutely understand we have an issue with finding the budget or finding the money to have our own regulation. But if convenience becomes the go-to, then this place should not exist. We should just have government and SAC. Thank you.

Thank you. Mr. Ahmad.

One more time, I just want to tell you about the hookah, the people come and you see people smoking hookah, but you don't see how many people smoking cigarettes in the street and smoking marijuana. Did you go force him and tell him to stop cigarette? Did the county going to send somebody to force him to smoke the cigarette? Your employees sitting in the corner over there, city employees, everybody have a cigarette in his hand. Why don't you go stop them? Why are you going to stop our business doing these things? I see a lot of your employees sitting down in the bridge by the boss office. And I see a lot of people in the parking lot smoking cigarettes and marijuana. How are you going to force the law of nobody smoking a cigarette? Anybody can answer my question? How are you going to stop these people? Somebody smokes cigarettes. You're going to tell them, don't stop smoking? Or are you going to send the police and tell them, don't stop the cigarette? And you give them a ticket. Thank you.

Thank you. Mila, welcome back.

Hi again. I just want to say that I agree with you parents that the sale of those products should not be allowed to our children. I've worked in childcare for 12 years. I've worked with this city and our schools for six years and I still volunteer with childcare organizations here. Within the last three to four years, you guys have approved three different marijuana businesses to sell their products here. That is the growing evil within our childcare system. These businesses, they do not allow minors in there. I would push this committee, TO ENFORCE IF THEY NEED ELECTRONIC SCANNING OF IDENTIFICATION WITHIN THEIR BUSINESSES BEFORE YOU GET RID OF THE SERVICES ALL TOGETHER. ALL OF THESE BUSINESSES SUPPORT LETTING THOSE SERVICES NOT BE AVAILABLE TO MINORS. ADDITIONALLY, OUR COMMUNITY PROMOTES DRINKING. WE HAVE AN OCTOBER FEST. THAT'S A HIGH CAUSE FOR DRUNK DRIVING. impaired sexual engagement, that does not happen with smoking hookah. It is a leisure activity done by consenting adults that understand the cognitive effects that it's going to have on their bodies. So thank you for listening and we agree with your point.

Thank you. Anyone else who hasn't spoken yet for an additional minute?

Thank you. To answer the lady's question here, these employees could find jobs at bars and dance places amongst Broadway. Sure, these are bars where people leave and they get DUIs and they're drinking. If you go to these hookah lounges, most people are smoking the hookah and drinking tea. You might find a couple people that have a drink or so, but most, 90% of the people are having tea. So you're making actually Redwood City safer by not letting in alcohol and have these employees go to bars. And I also noticed people come from San Jose, they come from Fremont, they come from San Francisco to go to these places. So you're bringing revenue from other cities into Redwood City, which benefits everybody here in Redwood City. That's all I have to say.

Thank you. With that, I will move to our Zoom speakers, and we will give everyone two minutes. Sorry again, Mayor. We'll start with Zubin Modi, who will be followed by Blythe Young. You may begin speaking. You may unmute yourself and begin speaking.

Perfect. Can you hear me?

Yes, we can.

Excellent. So I find this proposal to be one of the most self-defeating racist ideas I've seen from this council. These establishments are one of the few businesses in Redwood City that consistently attracts customers from all over the Bay Area. If you don't believe me, go visit Tasha on a Thursday, Friday, or Saturday night. The white times and the lines speak for themselves. People here are coming from San Francisco, San Jose, Fremont and the East Bay to spend their money here in Redwood City. These are all 21 and over establishments serving consulting adults. They're licensed, regulated, tax-paying businesses that create jobs and bring economic activity into Redwood City. Yet instead of supporting local businesses, the city is trying to shut them down. And let's be honest, who's being affected? Hookah has deep cultural roots in many Middle Eastern and South Asian communities. For a city that prides itself in diversity and inclusion, this proposal sends the wrong message. Most importantly, this ban won't accomplish its stated goals. People won't stop. They'll drive across the 84 to Fremont and spend their money there instead. The customers leave, the jobs leave, the tax revenue leaves. Fremont and Alameda County wins. Redwood City and San Mateo County loses. So I urge you to reject this proposal. Thank you.

Thank you. Our next speaker is Blythe Young, who will be followed by AROC.

Good evening, Mayor and City Council members. My name is Blythe Young. I'm the Regent Senior Lead of Community Government Relations for the American Heart Association. I'm here tonight to express support for the proposal to adopt the San Mateo County Model Ordinance. This proposed policy will reduce access to products that are the tobacco industry's key strategy for targeting and addicting new smokers, Redwood City's youth. The American Heart Association spent three years helping to develop the policy at San Mateo County and turned into a model for incorporated cities. We've since seen this policy be adopted by South San Francisco, by San Bruno, and others that spent a bit more time considering the ordinance. The ordinance does not prevent hookah businesses from staying in business. San Francisco, not South San Francisco, but San Francisco proper, has had a comprehensive flavored tobacco ban for many, many years at this point. Their hookah businesses are still in business. The fact that hookah is exempted at the state in terms of the flavor ban was a policy compromise. we know that there's a best practice in the bay area that has been here long before that policy was passed and we expect to continue hookah businesses have many routes to stay in business we're not closing doors businesses have not closed doors since we've had comprehensive liver tobacco bans in bay area cities so adopting the county's policy i think makes a lot of sense for the reasons that staff recommended in terms of the enforcement protocol offered by the county and cost savings at the end of the day if you do decide to adopt your own trl and enforce it yourselves i really hope that you'll match the same best practice standards but i think that the county's model was developed in with a lot of thought given to impact on both economic and health and is a really sound model to go with so i'm looking forward to your decision outcome and thank you all for hanging in there past 11 p.m

Thank you. Our next comment is from AROC, who will be followed by Kelly Boyett.

um good evening mayor vice mayor and council members my name is muhammad sheikh i'm the organizing and advocacy director at the arab resource and organizing center or arock we're a non-profit serving the arab and muslim community here in the san francisco bay area i'm calling in tonight to urge you not to adopt the county tobacco enforcement ordinance but instead to fully explore the city-run alternative All of you should have received an email with a preliminary breakdown of how a city-run enforcement program could be self-funded without tapping into the general fund. And we believe it makes a compelling case for a fuller analysis to be done before taking this vote that would harm cherished Redwood City small businesses serving hookah. Many of our constituents live in Redwood City. And as you know, a significant number of our Arab and Muslim and Swana community do not drink, so do not go to bars. And many choose the option of enjoying hookah together instead. It's a longstanding social and cultural practice unique to Middle Eastern communities. And having these spaces for our community to gather have become ever more important, especially in these times. Unfortunately, non-tobacco hookah is not really a viable alternative. i mean imagine what would happen to the revenue for our local bars if we told them they can only serve non-alcoholic beer and wine it wouldn't be good to be clear we all agree that we need a policy to address flavored tobacco products vapes e-cigarettes and the like particularly those targeted and marketed toward our youth we can do this without jeopardizing hookah serving businesses But the issue is that the city run enforcement option was not fully analyzed, particularly with regards to cost recovery options. I've been sitting through this entire meeting and suffice it to say that you all really know how to ask rigorous questions and request more information to make informed decisions. So we're asking at the very least that we do our due diligence and fully explore that alternative option before moving on to the county ordinance tonight.

Thank you. Our next comment is from Kelly Boyett, who will be followed by Tony Godlewski.

Hello. Thank you so much for listening.

Kelly, sorry about that. Can you please unmute yourself?

Oh, I'm sorry about that. Thank you for taking public comment tonight. I understand that Redwood City is facing budgetary constraints that limit their capacity to properly fulfill tobacco complaints and permitting issues. And I'm also very passionate about limiting access for youth to sales and use of tobacco products. But how can we advocate for one demographic while undermining another? Hookah is an important cultural practice for many communities here in Redwood City, as many folks have said tonight, and for many other consenting adults, it's a medium for connection and leisure. There are many businesses here, most of which are in attendance, that have been compliant. They do not sell to underage kids. They pay their annual fees and they offer tax profit. and offer popular third space for friends and family to get together, eat, talk, and smoke hookah. It's not unfortunate that these businesses have been lumped in with other non-compliant businesses. It is lazy oversight by our city council. We elected you to support and represent our community, which this ordinance does not do. So I urge you to find another way to protect our youth from tobacco access without disregarding the many establishments that make Redwood City so great and unique. Thank you.

Thank you. Our next speaker is Tony Godlewski, who will be followed by Daniel Moltke. Tony, we can't hear you if you're speaking. I do see you're unmuted.

Hello. Can everyone hear me okay?

Yes, we can. Thank you.

Okay, perfect. Well, yes, as you've heard, my name is Tony, I live here in District four. And I work from home. And whenever I get the opportunity, I like to work from various coffee shops, cafes, lounges, and hookah lounges around the city. It's not really news to anybody, especially here in Silicon Valley, that there's a loneliness epidemic across our country, including in our own neighborhood. The American Journal of Epidemiology, the American Psychology Association, and other organizations have linked chronic isolation to increases in cognitive decline, depression, cardiovascular disease. And Cassandra Alcarez with the American Journal of Epidemiology shared that the magnitude of risk presented by social isolation is very similar in magnitude to that even of smoking. I'm not a doctor. Like I said, I work from home. I'm not sure how accurate any of that really is, but I do find it weird that in this age of social isolation that we would take this step against third spaces in our community. As we heard tonight from all these business owners, nobody is against selling tobacco to younger kids. And while this... While this ordinance is well-meaning, then it will surely exacerbate the epidemic of loneliness by closing the city's hookah lounges. Honest to God, small business providers who, as the city notes in its own equity impact statement, are disproportionately South Asian or Middle Eastern descent, they're going to be forced to shutter friendly third spaces while consenting adults go to eat, work, gossip, and even smoke. I encourage you to put your heads together and think of something more creative than a blanket ban. Thank you.

Thank you. Our next speaker is Daniel Moltke.

Close it.

Hey, can you hear me? Good evening, mayor and council members. My name is Daniel Shane Mulkey. I'm with the National Hookah Community Association, which along with AROC submitted a joint proposal today, really just asking for one thing. Don't close the door tonight. Give us the time to build a solution that protects youth, doesn't cost the city anything, and keeps Middle Eastern cultural spaces alive in your city. Their staff report shows that a city-run program can be nearly self-funded through permit fees alone, and that's before accounting for two key revenue sources that the report didn't consider. That's first that the three hookah establishments have volunteered to pay enhanced permit fees two to three times what standard retailers would pay because they want this program to work. They're willing to pay for it. The second big one was that the report doesn't account for the impact of financial penalties for noncompliance, which the city could easily increase to $1,000 each. potentially more. I think it's also worth noting the county program only checks permit holders roughly twice a year, so that would mean 110 visits across the 55 retailers in Redwood City. Meanwhile, Redwood City's current complaint-based code enforcement generated 558 actions in 2020. So we think a locally run program is more responsive, more accountable, and really better positioned to actually protect kids. So with regard to the county ordinance, there are parts that we could get behind and we'd love to talk about them, but really adopting that ordinance tonight forecloses the only option that would preserve Redwood City's three existing hookah serving restaurants, which are cultural gathering places for the Middle Eastern community. For many people in our community, they don't drink, and so these places don't have a substitute. It's like having a sports bar without alcohol or bringing alcohol-free wine to your dinner party. It doesn't have the same impact, right? so we're just asking you please reject the ordinance and direct your staff to fully analyze the options for the city run program allowing us a rock and the effective businesses to work with you on a practical solution thank you and with that mayor i'll turn it back to you includes public comment

Great. Thank you, City Clerk. And again, thank you to everyone who joined us in person or online to make some public comment on this. Especially with the lateness of the hour, we appreciate just getting engagement on this. So with that, I will pass it over to our colleagues with Council Member Strickland.

May I make a motion to extend the meeting to midnight, please?

Is there a second?

Sadly, second.

Thank you both. Motion from Sterkin and a second from Gee. Could we get a vote, please?

Motion passes with six votes. Council Member Chiu absent.

Great. Thank you for the fast vote, everybody. And who would like to get us started with any questions or comments? We're so close, y'all.

Councillor Ruggie, thank you. Thank you, Mayor. Just some clarifying questions. Excuse me, Amanda, you've been working on this for a while. So can you just remind all of us, just because it's getting late and we still have more agenda after this, your work and the team's work on trying to bring something to council. And not only the timeline, but how many meetings and the journey to get to tonight.

Yes, I'd be happy to talk about that. We had a study session in September of 2024 on two topics. One was smoking in the public right of way and one was the regulation of tobacco retailers. We were able to bring back an ordinance on smoking in the public right of way in January of 2025. Following that, we proceeded with work on addressing the concerns of Council throughout the spring of 2025 into the summer of 2025. We met with all of our tobacco retailers in April of 2025. Working to get a solution throughout the summer. City Attorney Ramirez was meeting with, or seeking to meet with, representation from the hookah attorneys throughout the last summer, throughout the fall. Starting in the spring, we started to think about when we could get on an agenda. I think we've been trying to get on an agenda since November of last year. And so finally brought it in April of this year. Prior to that, we did additional outreach to the hookah retailers and also all of the tobacco retailers.

Thank you, Amanda. Can you spend a little bit more time about the outreach over the last year to the three establishments and what kind of engagement and the people show up and as well as the other tobacco retailers in the city?

Yeah, the hookah retailers understandably were very invested in helping us understand their perspective and their needs. So when we would meet with them, they would come and bring their perspective and ask for what we would want. A number of times we sought compromise, for example, with the non-tobacco hookah. and heard that they were not interested in non-tobacco hookah, and I can understand that. If your demand is for tobacco hookah, I can understand that there's probably not a lot of demand for non-tobacco hookah, but we were looking for a way of figuring out how to regulate the tobacco retailers, and we're looking for a compromise on what that looked like. As far as the other tobacco retailer outreach meetings, we had probably about 10, so we had 55 retailers. We had about 10 folks attend, so about 20% of the retailers. Those were mixed across smoke shops, gas stations, and convenience stores. And so they brought up a lot of thoughts as well. They, you know, I think would like to have less regulation themselves, but also recognize that, you know, it is normal to have regulation and that they would prefer to pay less for regulation than more.

Thank you for that history. Thank you all for being here at 11.30 and getting later at night. We had two speakers offer, I guess, a self-funded solution, but it feels like they just showed up. Is my perception inaccurate? I mean, given the history and the timeline you just shared, the conversation could have and should have probably began in the beginning, not when this matter comes before council tonight.

The businesses did propose earlier that they would be willing to pay more for a tobacco retailer permit for themselves. My understanding is that there wouldn't be a significant difference in that our, like Proposition 26, which is about fair fees and paying for the cost of service, the cost of service wouldn't be significantly different. for issuing a permit and doing inspections and that for these businesses versus other tobacco retailers. And so we wouldn't be able to charge them more. That's one thing. The other thing is that it did feel like there was a lot of organization here at this moment. And that did surprise me. But I'm glad that people are using their voice.

Thank you. So I'm going to pivot to our city attorney. And this is a question similar to earlier this evening, which seems like forever ago. But because of Prop 218 or whatever that number is, are we allowed to disproportionately charge fees for permits that may subsidize others?

No, as we spoke about this earlier, Prop 26 does not allow for one subgroup to subsidize another subgroup's responsibilities. And so the city does have to determine what the proper fee is based on the services that are being provided and charge that fee across the board.

Thank you, City Attorney. And thank you for answering some clarifying questions. Thank you.

Thank you, Council Member Gee. Who else has questions? Council Member Stricken, we'll go to you.

Thank you, Mayor. Thank you to everyone who made public comments. I very much appreciate both online and in person. And thank you, Amanda, as well, for all your hard work on this over the course of a couple years at this point. So looking at the staff report, at the very bottom, there's an alternative. And I would just like to ask, I think I already know the answer to this question because we were presented with an alternative back in April. If we were to entertain the idea of doing our own program, what would that look like? What's the timeline? What resources can we leverage from the county or otherwise to meet the needs of the entire community to enforce our regulations, protect youth, while also supporting our local businesses and local cultures?

Sure. If we did not adopt the ordinance tonight and we came back and you directed staff to come back with our own ordinance, we wouldn't be able to rely on the county for much. Their policy is that either you adopt it by reference or verbatim or they don't really get involved. So we wouldn't be able to rely on them for anything. They might be so kind as to give their time to train us on... Unflavored tobacco and how to regulate tobacco, but I don't know that that's a given You know I Say this very carefully because I love what I do, but you guys have a lot of my plate and If you direct me to also bring back other stuff that either pushes street vending and mobile vending and entertainment zones and small business supports that it's just there's just a lot of things that will get pushed. So either it will take me several months to develop this ordinance and we'll bring it back in 2027 or we'll prioritize that and we can maybe do that in three or four months if Veronica has some time to really dig into this. We would probably need to come back and have a study session with you to understand what your priorities are. Do you want to follow something that's very similar to the county or do you want to have other parameters before we go back? So there's a lot of steps that what it would take to develop that ordinance and It's also figuring out what is the priority. Your priorities, right? What do we want to include in that ordinance? And so, you know, I think minimally, most likely, it would be six to nine months just to develop the ordinance. We have to train staff on the work, on who is doing the work, how to regulate, what is this. I attend a quarterly meeting right now from the Alameda County Tobacco Regulation Enforcement Network. And there are new flavored tobacco products coming out literally every month. And we sit on that call and we learn all about these new regulated products. But I'm not the regulator, right? I'm the policymaker. We would have to get code enforcement to understand that. We'd have to figure out where code enforcement is going to have time to go and do a proactive program. So minimum six to nine months, quite a bit of staff effort. Not impossible, right? I mean, anything's possible. I do want to be honest about that, but there are trade-offs.

Thank you very much. That's very helpful. Just to wrap up my comments.

Councilmember, sorry. I didn't want to rush you to wrap up. It's just our city attorney. I'm so sorry.

And thank you to Miss Anthony for answering that question. I just wanted to point out, and she made a reference to it, but just wanted the council to be aware that the city doesn't currently have a permit process for this. We don't have any program to regulate. Miss Anthony spoke a lot about the enforcement part after the ordinance gets adopted, but the very first thing is creating a permit system for this and understanding how to process that. And once that system is put together, then it's implementing it and getting the applications out and helping all of the tobacco businesses. And we have 55 currently to understand what that means. So there's a big process after adoption and before enforcement as well that will take some ramp up. And I want the council to understand that so that we don't get surprised a year later when we're still trying to figure it out.

Thank you, city attorney. We'll bring it back to you. Okay. Thank you. Any other questions? Council Member Howard.

I don't have questions, but I'm ready to make my comments if that's okay. Okay, thank you. I just wanted to say that I received, I think all of council did receive a letter from Dr. Halpern Flesher. She is a researchist at Stanford University and she does research on tobacco prevention and the damages that it causes, nicotine and tobacco. And it was a very moving and very impressive letter talking about the dangers of flavored tobacco products Because continued use, it makes it easier and it masks the harshness of the tobacco and the nicotine. It makes smoke and aerosol easier to inhale. It's easier on the throat. And it creates the misperception that these products are less harmful than traditional cigarettes. And she states, that is just not true. that tobacco and the toxic chemicals that are in flavored tobacco as well as cigarettes are very harmful, and people exposed to it can develop lung disease as well as the person smoking it. And she said a one-hour hookah session which is the typical time frame use that she says is equivalent if I'm exposed to it, not smoking, if I'm exposed to it, it's the equivalent of smoking 100 cigarettes a day. Now, I'm a nurse. People know that. I'm a nurse and I cannot take any other stand on this other than my desire to do what's best for our whole community. And I find tobacco and its products, when I was teaching nursing, I always spoke to young people because I thought if we get to them young, then maybe you prevent them from smoking into their old age. It's a tough one. Once they become addicted, it's very hard to quit. Now, I know we're talking about young people and it's really important, but I'm also very, very worried about the adult population who smoke nicotine products and being exposed to it. So back when we had COVID, we made an agreement that we would try to help our three businesses in Redwood City who did serve hookah. And we made it possible for them to do it. And then we even gave an extension of a year while we studied the information that we would be giving about the state and the county. During that time, I made it clear that I could not guarantee this was a permanent solution. I made it clear. I don't know about anyone else. But I always felt sooner or later, the state's going to step in, and then the county. And we were going to have to make some tough decisions. And that's where we are right now. So I can only say, as a nurse, my responsibility is the health and well-being of our community. And our community needs to eliminate as much as possible exposure to nicotine and smoking products. I know that's going to hurt our friends in business. I know this is going to have an impact on your business as well as the social and cultural practices that you do. But my first responsibility has to be the public health and safety of the community of Redwood City, and that's why I will support this. I'm sorry, but I don't feel I have a choice in this matter if I'm going to be true to my profession. So I'll just leave it at that.

I think Councilmember Howard, who else has comments? Councilmember Strachan.

I feel like I've been presented, that I am considering just a false choice. And there, I think we can address each of the issues and needs presented tonight. enforcing our smoking regulations, allowing communities to continue expressing their culture while also supporting our local economy. So both ordinances that we were presented with back in April accomplish those things. the largest difference that I recall us discussing was the cost. And I understand that based on our previous conversation, we don't have very much wiggle room to accommodate said cost. But as we did with the business license tax, when we received feedback from the business community, we pivoted and made accommodations. And I think it's important for us to, when we realize maybe there were folks that we didn't get the chance to talk to, or maybe that we should have engaged the first go around, that we accommodate them and continue the conversation until we can find the right solution that meets all of our needs. So I will leave it there. I would like to make a motion, but I will wait until I have heard from my other colleagues, should anyone else like to contribute. Thank you, Mayor. Thank you, Council Member. We'll go to Council Member Padilla.

Thank you. I've given this a lot of thought. I've talked to many people and I've read, if I haven't responded, I've read every email, I've listened to voicemails. And I come from many perspectives. I also, I value community health. I'm a parent. I'm a resident. I care about all the same things. I care about our businesses. I care about the diversity in valuing everything that makes us such a special place. And I just want to share something from our last meeting. I had mentioned with the neighbor and I was just mentioning some things. And she said to me, oh, I go to the sandwich spot. And she said, they have hookah? And I thought, wow, what a compliment to that business and that establishment that I had a neighbor who has been buying sandwiches there and did not even know that the establishment sold hookah. And then I thought to myself, in a world where I thought our city manager was mentioning just how we should be cautious of regulation and unintended consequences. I don't smoke cigarettes and I don't do hookah, so I don't go to those establishments. That's a personal choice that I make. And so often, more increasingly, I find in society and our times, we're being told how to live our lives and what to do. And I want to still believe that, you know, we raise our families, we teach them, no, I don't want children smoking. I remember being little and the ice cream man coming and there were bubble gum cigarettes. And that was a really popular thing to get. And we didn't even know, but you just, you wanted to blow them and see the powdered sugar come out. And it did, it added some sort of glamour as a little kid and you did it. And so I think about that, that impact you have on children. But then I also think, you know, What is the role of the family unit when it comes down to us legislating when, how old someone can be when they have a cell phone? Who can go on Facebook? What decisions should be made in our own home? If I don't like the way that hookah smells or I don't want my child exposed to it, then I won't go to Pasha or Rock and Raps or if that's my concern. So that's where I'm struggling right now. I want to balance our public health, but I also want to value the budget situation we're in. We have businesses that are contributing to the vibrancy of our community. And also, it is connection. We had a person call, and there is an epidemic of loneliness. you know, passing a pipe, it's connection, it's connecting with people, it's dialogue in a world where we're increasingly don't know how to talk to each other. There are fewer and fewer spaces for people. We don't, you know, not everyone fits, this isn't Sweden, we don't all look the same. So cultural spaces, safe spaces for certain communities are more than just a place to work so you're not lonely. It's somewhere where you feel seen, somewhere where you don't have to wear a mask, somewhere where you don't have to explain. And I just, it's hard to put a value on that, but it is valuable. And I just want us to make sure that we're considering these things because I don't always feel good about regulating people's freedom of choice and free will. I know that there is a state law, but it seems like what we're doing is superseding the state law, and it's hard for me to reconcile this when we're talking about a budget where all I see are red, going into the red and the red, and I see businesses that are employing workers that are adding to things. So I just, I'm struggling at the moment because I will say that I have always been a proponent. I don't think it's fair, as Council Member Stricken says, that we're given that it's this or that. I don't know if it has to be that way. I heard that caller. I don't want to, you know, it's hard to hear to think that we're lazy when we're here at, you know, 1159. I don't think anyone on our staff or council is lazy. But I think we are working with limited resources financially and from a staff perspective. But I don't want that to be the excuse not to do what's right. So I'll leave it at that for now. Thank you.

Thank you, Councillor Padilla. We'll go to the Vice Mayor.

So I want to thank everyone who came out here tonight, and especially at this late hour. When we studied this two years ago, and Councilmember Gee, thanks for asking, and Amanda, thank you for reminding us of that. We, and you as well, you know, Ahuka had been grandfathered in And at that time two years ago, we directed staff to go back to the county and see if they would do that grandfathering for us because we do, I, I just speak for myself, I do value the culture and I do like this culture in Redwood City. I like the diversity. I do see it as a fun, recreational, cultural thing. And and so we did we asked we directed um the then city manager melissa stevenson diaz to go back to the county and say look you know please grandfather us us in you know please grandfather this in and um you know i i really was hoping they would But the county will not. And we have no control over that. And meanwhile, we have 55 tobacco retailers. This woman here who just three days ago or one day ago was able to buy all sorts of illegal tobacco products. Subsequent, again, to two years ago, I also discovered that there is flavorless tobacco, there is hookah that's tobacco-free, and that other jurisdictions, the reference was to San Francisco, are doing that. So the fact that San Mateo will not compromise, the fact that there is an alternative, the fact that our staff has been bending over backward for a year to try to craft some kind of a compromise, I am really sorry, but We have to have the enforcement of the county. The county has a health department. We do not. And so it's just untenable. It's not the tobacco-less product, the flavorless product. These tobacco purveyors, these 55 purveyors, what really struck me was the mom from Menlo Park a month ago who said, all the kids know, oh yeah, just come to Redwood City and you're 14 years old, you can get whatever you want. And these businesses are very profitable. Sometimes doing illegal activity is extraordinarily profitable. And we're behind, we're behind. We've We've been spending two years to try to accommodate, to try to recognize the cultural aspect, but Now we don't have an option. The option is flavorless tobacco. Hookah can still exist. We have to have the county enforce. We don't have the time and we do not have the money. And we don't. So I am going to be supporting, as I did in April, I am going to be supporting this ordinance.

Thank you, Vice Mayor.

We'll go to Council Member Gee. Thank you, Mayor. You know, this is sort of a Sophie's choice, the way we have it right here. And I want to pick up, Vice Mayor, a comment you just made and that we heard in April. I went home, and I try not to talk about politics at home, But I was talking to my daughter about this specific subject, and she said the same thing you just shared that the woman that spoke in April. All the youth know they want to buy tobacco or flavored tobacco or a pair of banana. They just come to River City. The young people know that. And that's because we don't have enforcement. And so let's not forget the amount of time that we've been trying to do something here and work a compromise. And if we do say, let's take the time to study, we're looking at two to three years of no enforcement. A year and a half behind us and maybe a year in front of us, whatever. Two to three years. When I look at resources, it's not just money. Time is resource.