we're at from a recovery standpoint. We have progressed nicely with a couple remaining projects On the debris side with the intention of figuring out where we're at To report back to the city manager and eventually council on needs for the emergency order that was in place With that some quick updates Cal OES is reporting that overall in the entire branch that encovers Six to seven counties. They're about 75 complete with returning properties back to property owners In the city limits, we have fully accounted for all debris removal on both Private debris removal as well as public debris removal With just a little bit left under county jurisdiction on city property at low skill of coast campus In addition to that as far as the ongoing tree issue that you've become aware of We are still working very closely with both the county of sonoma and napa as well as outside council Council regarding our cpuc issue to advocate for a wood management program to be re-implemented In addition to that PG&E has Started to roll out what they refer to as a wood hauling program But we want to make very clear to the community as well as council is that Although they are offering a program It is not the full wood management program that we're advocating for for our respective communities But we will be doing everything we can to coordinate with PG&E as well as our Community both in the city of santa rosa and outside the city to make sure as many residents opt into that program as possible What we've seen in the tubs fire was that as we know all too well the dead and dying trees Are something that is of great concern of ours for the potential for repeat incidents So the wood management program is what we're ultimately fighting for But we're also going to work diligently to make sure that as many Community members take advantage of the wood management wood removal program Including the city of santa rosa Some of our own wood was removed. Sorry felled by PG&E So even the city will be opting into that program to help reduce Our threats to the community as well as the risk for future wildfires With that that is the conclusion of the update for the glass fire All right. Thank you so much paul council any questions Okay seeing none we'll go to public comment on our staff briefings for tonight item number seven I'm not seeing anybody rise in the chamber I don't see any live hands In our attendees and did we have any voicemail public comments? We have no voicemail public comment on this item. Perfect. We'll keep moving then Let's go on to city manager and city attorney reports. Who wants to start tonight? I have no report this afternoon And I have no report this afternoon either All right. Nice and quick item nine statements of abstention by council members Do we have any tonight? Okay, seeing none noted. We'll move on to mayors and council member reports Does anybody have anything that they would like to add? councilmember tibbetz Thank you mayor. I'd like to i'm pleased to announce the return of patty sisco to the planning commission to replace akash kalia who is Outgoing at this time and I want to take this opportunity to really thank akash for Bringing his youthful energy and his perspective on low-income housing and development to the planning commission I'm really really proud of the work. He's done And i'm also excited to bring back the long-standing institutional knowledge to the planning commission that patty certainly brings The second appointment i'll be making is andrea rodriguez to the community advisory board So dina and or stephanie. I believe she's already submitted an application So please let me know of what other paperwork I need to do there. That's it mayor. Thank you All right. Thank you so much I just have a couple of quick things for tonight one is to report back to council that Last week we had a scta and rcpa Meeting one of the substantial items that came out of it is the formation of an ad hoc to Look at a climate change measure going forward potentially in 22 or 24 I was appointed to that ad hoc and we'll be serving on that And then over the next couple of years I also wanted to let the council know that on last wednesday Myself the vice mayor the city manager the city attorney and other leadership from around the city Did a briefing in the eoc drill? Going into what is expected to be a difficult and challenging Public safety power shut off in fire season We did then have a red flag warning pop up a couple days later So it was appropriately timed and I just want to thank everybody For their time in that I think it's going to be really reassuring for the community to see us do that And it's going to work really well for us to be prepared going into this next year I see no other reports. So we'll go on to our approval for the minutes We have two sets of oh, excuse me, and I'll I'll take public comment now on councilmember reports I see no one in the chambers. I see no live hands on zoom Do we have any pre-recorded voicemail public comments? There are no voicemail public comments on this item. Okay, then we will go on to the minutes We have december 1st 2020 and october 13th 2020 minutes Do we have any additions to those minutes or alterations? Seeing no hands I'll ask for public comment on those items Any voicemail public comments? There's no voicemail public comment on this item. Okay, then without objection We'll show those as adopted with the vice mayor recusing from both of those items We have no consent calendar We'll come back for our public comment after five o'clock And let's go on to item 14.1. Mr. City manager Mayor and members of the council item 14.1 this evening is a report item On the proposed allocation of 10 million dollars in pgne settlement funds to the renewal enterprise district known as red The housing fund in the form of a loan Allocation of $50,000 in pgne settlement funds to the red to address one-time member assessments And an amendment to the red's joint powers exercise Authority agreement Excuse me Presenting the staff report this afternoon will be claire hartman our acting city manager Yes, good afternoon. Mayor rogers vice mayor rogers and members of the city council This is i'm presenting to you tonight sort of a bundle of items some of which relate to The red proper renewal enterprise district and others that are specific to the red housing fund Next slide So the actions we are looking for action tonight And the actions include allocation of the 10 million dollars of one-time funds from the pgne settlement To the red housing fund And with that we want to get agreement with the city council on our term sheet That would go with that loan And in addition to that authorizing staff to take the next steps develop the final loan documents Uh and essentially execute that loan agreement I then sort of separately and we can handle these separately and get through one and then move on to the other but separately We're also looking at making our first amendment to the red's joint exercise of powers agreement And in addition supporting the red with a one-time member assessment of $50,000 Uh and then lastly this isn't by motion or this isn't by resolution But simply acknowledgement that you have an opportunity now that there is a red housing fund board You have an opportunity to make an appointment I'm not presenting it as though you're going to make it tonight, but setting up the appointment opportunity in the future for a city representative Or a representative that will represent the city on that red housing fund board next slide So this is how the presentation will go tonight. I'm going to give an overview on sort of how we got to this point And why it makes sense to allocate this money That is a limited resource, but why it's so important to allocate it to the red housing fund We will also hear from Michelle Whitman. She's the executive officer of the renewal enterprise district So we can learn more about uh, you know, they're the background and where they're headed in terms of a joint powers entity And then also we have four site street advisors here on hand to answer questions about the red housing fund itself Now in terms of the city team, I'm the presenter, but uh, we all we have all hands on deck here We have Megan bassinger who's worked closely with me on developing these terms She's our interim director for housing and community services And we've also sought guidance from city gallery or our city attorney and from gene Music, um, our chief financial officer Uh, next slide So i'm not going to go over this in detail, but just to bring you up to speed for how we got here In essence, you know, we're dealing with the housing crisis and it's been ongoing And there's been stumbling blocks and complications. So Back in 2015 the city council made it a top priority housing and affordable housing We developed the housing action plan which had I think 30 different measures to address housing in lots of different ways And then shortly after that we had the The tubs fire in 2017 Which complicated and compounded that housing crisis. So i'll get to that in a second Um, and as a result of those two things sort of converging upon santa rosa One of the initiatives that came out of that set of conversations is the renewal enterprise district and that was formed in 2018 Uh in 2020 um pg and e Ended up settling with the city and the county And we received some settlement funds. So The city received 95 million dollars in settlement funds and the county received their share So sonoma county board of supervisors um late in 2020 they considered How they might use these these limited one-time funds Um, but they quickly directed 10 million dollars of investment into this red housing fund And they asked that it be contingent on a city match So we went into discussion with the city council And we held a discussion in december of 2020. Um, and at that time, if you recall Um, we didn't just look at that one option. We looked at a couple of other options or at least another option So at that time we looked at if we were to invest say 10 million dollars into housing You know, what are our options that are sort of in the moment? Ready to go one was to initiate this red housing fund And the other was to invest it into our city's housing authority it was um Excuse me at the city council goal setting session where the council unanimously voted to To take the initiative and match that county offer And invest 10 million dollars into the red housing fund Um, so we've been working um over many meetings the city team the county team The red staff the red board Really a lot of conversation about how this fund will get created What will be the parameters the logistics the governance of it the accountability of it? And that's what's been taking place over the last several months Uh in summary, we took what we um considered a sort of a recommended term sheet to the city's Long-range or long-term financial and audit subcommittee And there were a couple of policy areas which we focus on And and uh what was presented to you tonight is what's come out of that subcommittee And that brings us to tonight next slide so just in a series of pictures here just to show how uh housing and The resiliency factor of using these specific dollars matches up quite quite Specifically, this is a map that shows our very high fire severity zone. So in the red hatch marks This is the area That we designate for special restrictions However, we don't prohibit Housing from being constructed in these areas The blue is where the tubs fire Hit our city And you can see that it covers coffee park fountain grove and parts of oakmont The green is the glass fire burn area and you can see that sitting skyhawk channel drive area and the across from oakmont And This has compounded our housing crisis. So next slide So like I said, we were already in a housing crisis by 2015 You can see that we were averaging about 200 300 units per year to meet our housing goals We really needed to be reaching 500 to 800 units per year So we were we knew we had an issue to deal with when we got hit with the fires We were in the throes of implementing our housing action plan And one of them were financial incentives or gap financing But at that time we had a rebuild effort and as you can see here in the gray We had great success in rebuilding our city Over the 2018 2019 2020 years But all those resources all the labor all the materials all the Energy in santa rosa is going to rebuild which is great, but it definitely Absorbed an opportunity that we could have had citywide. So we might have been able to get more housing So you can see we're going to be deficient meeting our regional housing needs And we are entering into a new regional housing need cycle And again, it's similar numbers. So it's really 500 to 800 that we'll need to accomplish per year Next slide So one of the initiatives is kind of multifaceted and it goes hand in hand with working with what we've learned since the wildfires You know looking outside of the wildfire areas Looking for areas that are transit oriented efficient. So they meet multiple objectives resiliency climate protection Mobility and so we look to downtown and this is just a slide that covers so many of our different incentives that we have Looking at downtown and it really is kind of our centerpiece for promoting housing Now we need housing for all we need it in different parts of the city But we have been really focused on getting housing downtown so These tools whether we're prioritizing which means we streamline we take we try to process those first if they're downtown We've reduced the review authority that saves time and money on the applicants What while not negating public notification? Seek with streamlining. We've updated our downtown plan Could raise the ceiling on that environmental review so that projects consistent with the plan can move forward Lots of different fees and incentives We have an opportunities on which we've actually partnered with Property owner to make sure that they can make use of that federal initiative and then And then also that red housing fund. There's other opportunities through red that we're looking at which is the eif d enhanced infrastructure Enhanced infrastructure district finance district. And we also work with red to collaborate on grant preparation and things like that all that stuff Goes hand in hand and one thing that we've heard a lot of and I'm sure you have as well is Our downtown developers use all these tools. There's not one that's like, oh, that's the one and that's the only one I need They are layering all these tools together. So Red housing fund is yet another tool But all of them are important next slide So I'll let Michelle I will steal her thunder. I know she has uh some words to say about her experience setting up the red But I will say that the red is uh unique in sonoma county and that it's a joint powers authority And it's two members currently are the city of sanarosa in the county of sonoma And it was designed to be creative sort of out of the box Something that we don't have instead of being segregated in our housing pursuit To come up with a joint regional model. And so that's what we're testing Um, one of the things that we've been looking at is pooling and leveraging financing tools. So like I said, I mentioned Uh, we'll the red housing fund is one Uh, eifd is another and again Uh, you'll see coming up. I think it's in your next meeting or the meeting after that The city is applying for uh an infill Infrastructure grant with the state which collaborates with downtown development to to sponsor and get grants for downtown infrastructure Uh and then uh, one of their key principles is to really focus on climate resiliency Really focusing on affordability equity and resiliency. And so all all arrows point to priority development areas station area plans And the like and they have set up red criteria for projects that would be eligible for their attention Whether it's grant support or actual gap financing Next slide And the red board and the red staff, um, they aren't doing this on their own They've contracted with four side street advisors This is a firm that has established housing funds throughout the state and the country And they've guided us through the process So they've been very great about being available for questions and working through lots and lots of details to get the project set up Next slide So i'm going to go over some high level things and then we'll drill down to some of the key terms That are in your term sheet for today It's a 10 million dollar city loan. So it's not a grant This would be matched with the county's 10 million dollars. So we were looking at a 20 million dollar opportunity The idea is to leverage that And it's not uh, it's quite possible and we are concerned Supporting red in pursuing additional funds whether it's private or fill philanthropic But that is the potential. So it's not limited to just the city and county's money But we are certainly the catalytic seed for the fund And then I talked a little bit about the eligible project criteria um, I wanted to Just mention what would be required and then there's a lot of Areas where projects could gain higher points for example, but just what every project would have to to To meet up against just to even be considered for support by red. So You have to be located on an infill site. You have to be providing mid-tie density And here's a here's a key locational criteria You have to be located in a transit rich planned area specifically transit priority areas priority development areas rural community investment areas specific plan areas high quality transit quarters and or qualified opportunity zones So it is that specific because really the intent is high density in the right place And then lastly one of the fourth requirement is that You're either all residential Or if you're mixed use you have at least 75 of your total building space dedicated to residential So those would be attached to the red Housing fund and that's probably the most limiting criteria that we have And those could be amended over time by the red board. So the red housing fund is a separate entity It will be a standalone entity. It was elected to be a 501 3c type of entity and the red board relates to the red housing fund through this eligible project criteria So the policy making the decision about what projects will be eligible for What comes out of the housing fund will always be with our elected representatives through the red housing board And before I am remiss in thinking that our board members that have spent many meetings Developing this in the last couple years our current representatives are council member Fleming and council member tidbits the county representatives are supervisor rabbit and supervisor coursey So We are not being shy about this initial push and what we're trying to do We are looking to activate market rate housing downtown in santa rosa for mid and high-rise housing We do not have a solid stable market for this type of housing So they are the developers are piecing together lots of different layers of financing to make it work But what they're finding is that they're having challenges getting bank loans Because there's just not enough comparables to make this happen. So what we're trying to do is catalyze that market That will set the stage for after this first Catalytic event of this housing fund Activate the market for downtown. Are you not hearing me john? Okay, great And so we're trying to change the market so that we have one and that we will have comparables And we can move forward with additional. So what we want is a diversity in developers We don't need we don't want just one or two that can somehow finance downtown We need a diversity set of developers that can make our downtown happen And then that will set the stage for our other station areas and that's the idea behind this initial fund And then one last note before we leave this slide Is we are ready to support the red In fact, we know that the housing fund You know in its first start to really sort of get up and ready ready We have a plug and play Staff with our own city's housing authority that can process the NOFA We prove when we can do it quickly and effectively and we're ready to help them do that So we are looking at potentially contracting with the fund to make that happen Next slide So I won't go through all the nitty-gritty here because you can you have it and you have it in your staff report But a couple key items one It's a 20 year term loan The principal is due at maturity. So it is up to the council what you'd like to do once It matures or is paid back You can reinvest it you can decide to apply it to Something else that you the council wishes to apply it to but So that is one of the key terms of the agreement Uh, it should be noted that our Both the city and the county loans are going to be subordinate to all other debt You know, we are the seed money and so that's set up as such and then any investment For the fund as it is Evolving over time will will of course be consistent with the city's investment policy It's going to have flexible product types And our terms accept that so for affordable housing where they kind of we don't really know exactly where they need help Sometimes they need it in pre construction and other times they need it Later in the process It really depends on timing where they're at. So we're the most flexible for affordable housing And for middle income and market, you know, we're looking at supporting construction loans and that's kind of a key one Because that's the one they're having a hard time getting and ultimately they could have permanent loans In terms of eligible projects, we talked about linking it to the red project criteria Also, we want to protect that these are this is for housing. This isn't for housing in its first week We want to make sure it's housing. It stays housing So Now we can only can put a right or contingency on our 10 million dollar loan But we have added that and the county did as well and that's to make sure that these Projects that get this money remain residential for the life of the loan term And then see here soft cost maximums the soft cost maximum is something that is unique to the city's terms But we just wanted to Put a cap to make sure that most of the money is going to the project There's lots of other leveraging that can take place for soft costs. This money is special We want to produce housing. We don't want to just design housing We've already had that kind of experience with some other initiatives So it's important for us to really get it into projects Especially projects that are ready to go So you can see our maximums that we're proposing here 25 percent for a flurable and 50 percent from middle of market I do have a Technical edit to make so when we get to that resolution that's adopting the terms Right now it just says 25 of the loan what we want to make sure we say is 25 of the project Would max out for soft costs And so when we get to that resolution at the end of the discussion I could help through through those types of edits In addition, there was another thing that came up that we discussed at the subcommittee level and that was administrative costs and that's we're talking about operating administrative costs for For the red housing fund and then there was some discussion about Having some of that interest income also being used for the red That was really the focus of the subcommittee because there's been just a lot of agreement Of the course of all these discussions with with all the parties involved And we're really down to to that one And we are we are looking at agreement with our proposed amendment there as well So it's it's the last bullet under Use of proceeds in the term sheet And where we had ended up after the subcommittee discussion is not to have a we were staff was proposing a cap on administrative Uh on the revenue that could be used for administrative costs And two out of the three subcommittee members Didn't want to be that restrictive frankly Wanted to have that flexibility but What we put on the table tonight is is a something that's not a right now We don't have any cap and there's really no direction for what to do with the interest income And it could go into the red so what we would suggest And we would match up exactly what the county's terms is to Add an additional sentence to that last bullet That really directs that that interest would go to the operating expenses of the fund not the red And This has been vetted with the the red team and foresight and they're in support of that amendment Next slide So uh another thing that we share in common with the county is obviously some accountability We want to make sure we have quarterly reports annual reports with auditive financial statements We want everyone to be able to see full transparency What was earned? What was what was Transpiring terms of the form of the loans with types of loans And we want to report progress right because this is all about catalyzing downtown development Did we create units? What type of units was it useful? Where was it the most useful? And so we we intend to receive those types of reports from from the red team And then we have a red for a housing fund board structure So it is a separate entity and we're looking at seven voting members So you need at least three to set up a 5013c and the red board has already acted to And initiate those those initial three which allows us to have a fund and allows us to move forward And then as you'll hear tonight in my next slide, we have an opportunity to appoint a city member To represent the city And there will also be four independent. So let me see we go through this real quick So we'll have a the seven member Voting members will be one representing the county in their interest the city representing the city and their interest One representative from the red board Which the red board is selected as michelle whitman because she works with all members of the of the red And then four independents and the red board did select two independents already One is the Veronica Ferguson and the other is Todd Sheffield So remaining are these four city member county member and two independents the two advisories you see here is Idea it's not necessarily executed at this point. It's an idea that came out of the red board's discussion The opportunity to have one of the red board members Um, represent one representing the county and one representing the city be in attendance and be allowed to Um, participate in the discussion, but they would not be able to vote next slide So in terms of the city member, um, we have Offerings of the same criteria that we're looking for for any of these members With the emphasis that they would be familiar with our city's goals and our city's interest um, so obviously being aware of The red our project criteria how this will work any economic background or Financing background credit background would be helpful One of the things that I wanted to note is I've been working with michelle today making sure that Any advertisement or solicitation for especially these additional members whether it's For the city or the county or these independent seats that are left Want to make sure that that we're making use of our own cup delivery system and so We that's going out today in our city's newsletter the opportunity to Apply for one of these seats And so the due date for those applications will be on the 5th of august On august 27th the red board is will be considering the two independent seats that are left And so what I would be suggesting to the council is um to Make use of the solicitation of Applications and then we can bring those options to the council for consideration that the august 17th or august 31st meeting And next slide Okay, so before I go on to a next topic, which is the red So we can back up on the slides I wanted to make sure that there's an opportunity for any questions of city staff at this point Looking for hands Seeing shaking heads vice mayor Um, I wanted clarification of how the red board member Would be different from an independent if they're appointed by red You understand what i'm asking Yeah, no, that's a great question. I should have clarified so the city as a member The city is through the city council Will have an opportunity to appoint That member for that the one that's highlighted says city member And the county board of supervisors will appoint their county member that you see The board the red board Right, which is city county representatives, and it's the joint jpa They have the opportunity to appoint a representative for the red which is The one at the top there, which would be michelle wetman And then they also have the opportunity to recommend four independent seats And then it's the actions by the red council So that's how that works Okay, I get it. It just appears that Whether you label them independent or red board it appears that red has five Seats the city has one and the county has one by way of appointment You're correct. They have actionable actionable influence over five of the seats They appoint one of the seats just like the city report appoints one and the county appoints one They have recommendation authority over the four independent That's a good question and good observation and and we can also hear from We get the presentation by michelle and foresight. We can we can read. I'll have them revisit that that element Thank you, mr. Merritt, and I don't know if this would be more appropriate with michelle because I had some of the same concerns that Two independents were appointed But the solicitation for Applications did not go through the city connections website Correct and so that's one question is the criteria that is listed on slide 13 The same criteria what they were looking for For the two appointees and mr. Tibbs. I think you are also involved in this process So you might be able to help out with that one too I'll speak to the solicitation and and why it didn't go out with the city One I I don't think I I know from my perspective. I wasn't known that Um When it was going out or that it was an option for me to to get flagged to go through our system We certainly would have shared our our government delivery system. We have quite a large audience There is overlap though. I must say between the county's gov delivery audience is in the cities And the red staff was simply taking direction that they received from the red board and The county spoke up about going through their system Let's see what councilmember tibbet says to say and then we'll come back Thanks mayor, so uh for fear of running afoul with michelle and uh Forsythe street. We're going to give a presentation in a minute. I'll take a stab at some of these these questions and concerns um Madam vice mayor your question about the the board was the same as I had When we just came before the red board and I was confused at first why The red board was appointing an independent board and I'm going to look to michelle and Olivia And julie's to speak to this during their presentation But but the reason is is actually has to do with the irs You can't have if it's if it's controlled by a majority of government appointed or elected officials It then gets recognized as a government agency And the red board as a funding entity has to be a nonprofit if we want to have some of the same success that they're seeing In san francisco the peninsula and other areas where they've kind of done this before Um, so I've I've got faith in in their process that they've identified Um, albeit it is a little bit wonky and not um, you wouldn't you know, you wouldn't call it common sensical Uh, I think that the people we've appointed so far are good. The red is appointed michelle Uh to represent the red because she has the most knowledge out of all of us She is going to be Continuing with the agency as some of us electeds come and go over time serving on the board So we felt she was the right pick Veronica furgusson um given her background in uh law and legal counsel As well as some development when she worked for the county administrator's office And then we found a great uh guy his name escapes me sheffield is the last name Who is the ceo of first community credit union retired and you thought perfect person to represent the financial side We are going to have and tom this is to address your concern, you know, I'm going to take responsibility For not running it through the city's connections. Not only am I the chair I'm the one up there representing the city's interests and I did not it did not occur to me that we should run it through city connections But you have my word. I'm going to go back to the red board. Actually, I think michelle is already planning on this I believe maybe you have already spoken Uh, we're going to make sure that we delay the process a couple of weeks to run it through city connections Um now I think did I answer both your questions tom or did you have another one? Somewhat um because it's my understanding again I was surprised when I learned there were six people that filled it in And did you guys conduct interviews or was it just a paper evaluation before you selected the positions? It was a paper evaluation I guess that's where my level of uncomfort especially as much as this body has talked about open government and transparency and Very limited and I know It went out to a lot of different people, but it it didn't go out to everyone and I know we can't Unring the bell. So I guess I would ask for the next two that it does does brighter broader Solicitation and actually is we've experienced during the last couple counts meeting some form of a verbal interview to make these key positions here it's um, there's a little bit surprising that that wasn't done on this and Reading the staff report who actually makes the appointment. Was it the red or was it the Council for the red? It was the red the new enterprise district So the four you made the appointment versus because I think there was some language there that the actual council to the red Actually made the appointment based on the recommendation and again, it was just new language that I haven't seen another 501 entities Yeah, that's that's one for for michelle. Um, we during the meeting We actually that question came up and it was if my memory is serving correctly It was had more to do with procedure And I think it was the way that the red council interpreted the law That she was the one making the appointment But I don't want you to think that the the red's attorney was the one that looked at the applications And then made the appointments. They went to the red board We saw all the members of the red solved the applications evaluated them and then came forward with our recommendations And then approved them But I think the language in the staff report may have reflected that the council was making the appointments But again, that doesn't mean that they did that in a box right Thank you. So that that was helpful jack And then can we just get confirmation because even on the first slideshows I've heard it referred to as a 501 c3 and a 501 3 c And I'm guessing legally Which type of entity is this? Slide 10 add 501 c3 slide 12 head is a 501 3 c That's probably my typographical area. My understanding is a 501 3 c 3 c. Thank you. That's all I There's a lot of new Acronyms and whatnot that I've had to learn along the way to even just facilitate this conversation and that was one of them I Think you mayor, um, very quick question. Who was counsel to the red? uh council to the red I I don't know the full name. I'm sorry off the top of my head Okay, local outside. It's where do we know the Drama style I believe it's contracted by contract Uh to support the red Okay Thank you Let's go ahead and keep going and go with michelle whitman's portion of the presentation and perhaps she can answer some of these questions Okay, but also I have a uh what we can do is we can go through that but then I also have uh I have a couple of slides to talk about the Red First amendment and then also the 50 000 one time assessment member assessment request Okay, let's go ahead and finish your presentation first that and then we'll go to michelle Okay, great. Um, okay. So the red, um jpa first amendment. Um, essentially In the the first two years of the red um was considered a pilot period where it would be a lot of um activities in terms of exploring opportunities for the red what uh potential Funds private public could um occur through the red um And then it was there was a commitment that after the two-year formation period that there would be a time to reflect on just the joint powers agreement one of which we were What we were monitoring is interest We knew we had interest by the city and we knew we had interest by the county so one of the monitoring aspects of the first two years is Will there be private money? There wasn't not in the first two years. Um There wasn't even public money in the first two years, but is there interest? by other jurisdictions It was never any formal interest by another jurisdiction and there wasn't any formal provision of money for projects There was uh money for supporting the red concept, um, which is to help developers Figure out, you know, what what is needed to make their projects work Support grant applications and the like but one of the things that they did discuss at length When they did their two-year review is this idea of new membership so currently the joint powers agreement requires or Basically has a statement that for new members after these first two years after we've had this first two years of experience That the new members shall be admitted to the agency and then there's a couple of Uh contingencies on that that they're an incorporated city or town within the within the county limits And that they agree to the terms of the agreement Uh with the red board discussed that length across a couple of meetings And then by unanimous support supported to change from shall to may is because the red board wants to use some discretion Right now we have two strong members We have the city and the county and as you can see what they're both offering To be catalytic in terms of their investment into the red and the idea is when we do have new members to really consider um if if A new member would be a fit to that That type of model do they have Do they have offerings? This is supposed to be a regional housing model with a financial arm And so that's one of the things that I think the the red board wanted to an ability to use discretion when adding new members Next slide And in terms of a red member assessment I'll just say that the city does support the red quite a bit we we host an office for its executive officer And we were successful. We we partner with the red to seek out grants for operating expenses And we were recently successful in helping red get a hundred fifty thousand dollar grant But one of the items that the red needs to address on a year-to-year basis is It's it's financial model in terms of ongoing operating expenses. And like I said, it's it's still even though It went through its first two pilot periods. We saw from my earlier slides. There was a lot going on for santa rosa at that time So in in some sense, we are still emerging in its opportunity But What came to pass in discussion at the red board was this interest in in having not just operating expenses, but You know some reserves on hand To have some flexibility throughout operating year And so they voted for a one-time member assessment of fifty thousand dollars Next slide and so this this action took place unanimously in may of this year and To be quite frank. We've gone through a number of Council discussions on budget and even one-time requests. This is one of many coming through our portfolio I'm putting it forward on the table because it was requested by the red board. It's fifty thousand. It's one time I don't have another source that's earmarked for something like this So I would look to the pg me one-time settlement funds for it In the same vein that we looked to it for the for the house red housing fund investment It doesn't sound like it's a lot of money But every dollar counts in a budget that we're going through There's and it's not i'm bringing it to you because it's timely and requested not because it's prioritized across my portfolio Uh, and there's a separate resolution for this action than the ten million dollars So we tried to separate it out so you can have separate discussions on each of these actions And that does conclude my presentation. Is there any questions about the assessment or the jfa amendment? I'm happy to answer And so with that, um, we do have uh, Michelle and foresight have a presentation and we'd be great if we can get theirs. Oh, thank you Am I good to go claire? Yep go ahead All right. Thank you, mayor rogers. Good afternoon Mr. Mayor vice mayor rogers and council members I was asked to review the rod the reds project criteria explain how it was adopted and um And how the criteria will regulate the red housing fund claire did touch on the red project criteria components Um, but I will do a little deeper dive. So if we can go to the next slide I'm going to lead off with the vision statement from our county's recovery and resiliency framework Because the renewal enterprise district its joint powers agreement between the city and the county its project criteria And the red housing fund are all rooted in this in this vision To paraphrase the red seeks to catalyze a balanced climate smart and disaster resilient housing market That is affordable to area workers and where all of our community members have equal and fair access to a diversity of homes Located near transit jobs and services in a vital economy The red and the red housing fund are an implementation of this vision Next slide, please The red housing fund has been designed to align with the reds project criteria, which is shown here claire talked a little bit about it First I want to quickly review how the criteria criteria developed beginning in february 2019 The red board and public stakeholders were presented with a first draft of the project criteria and that was drafted by city attorneys and Council from or attorneys from county council's office to begin with the red board council city uh The red board council city and county staff and community stakeholders Spent the next year in bi-monthly public meetings informing deliberating and then finally adopting the criteria that you see before you And looking back a bit further the core principles that shape the criteria Were based on public priorities and policy goals identified during well attended community meetings Facilitated by the county throughout 2018 to identify the highest priority disaster recovery activities your constituents Said should be the focus of a resilient recovery That community engagement included seven large county white meetings with materials provided in both english and spanish And translation services available at every meeting additional outreach included an online survey And more grassroot style meetings with over 80 community organizations and local partners including city of san rosa staff and elected officials Back to the criteria now to initially qualify for consideration for red financing or other support Like claire said a project must meet the threshold criteria criteria that's represented across the top of the slide On the mixed use point Projects must be at least 75% residential use like claire said But an exciting example of mixed use is there's a project in the downtown san rosa pipeline That wants to include daycare, which would be a really beneficial mixed use. That's exciting projects that meet meet threshold criteria are then assessed based on the project's inclusion Of one or more of the second step evaluation criteria Which are essentially a menu of desired project project features or benefits at the end of the day These criteria and the red housing fund honor the idea that the right kind of housing in the right places Should satisfy a diverse range of community needs and public policy goals Next slide, please So um now let's Sharpen our focus on the binding relationship of the red project criteria to the red housing fund by design The red housing fund will be structurally obligated to the red project criteria This point has been critical to red board members throughout the process of designing the fund The red housing fund states under article nine of its bylaws that the corporation And that's the nonprofit Shall adopt loan pros loan policies that are consistent with the project criteria of the red And in its application to the irs for determination of tax exempt status And by the way 501 c3 is the correct number The red housing fund will include as an exhibit the red project criteria as a qualification for the fund's primary activities The aim is to ensure The application to the irs is tied to the red's project criteria Making clear that project seeking loans will only be available for funding if they meet red project criteria and finally Uh and and claire touched on this any future amendments to the red project criteria Must be approved by a majority vote of the red board itself the red housing fund board Does not have the discretion to change or amend the project criteria I'll quickly add that sue block from berkwilliam sorenson is the legal counsel to the red And um city and county attorney attorneys Did help me when that rfp was out in evaluating the applications for red council So at this point i'd like to turn the presentation over to fourth eye street advisors and olivia spec daniella gravel for a deeper dive into the red's housing fund It's Michelle. Um, can we go to the next slide please? So my name is olivia spec. I'm joined by my colleague daniella gravel and we are excited and appreciate the opportunity To share with you all and speak to you all and update about the red housing fund Um, we have a bit of a brief presentation, but hopefully it can answer some of the questions that you have Um, first we'll spend some time focusing on where we're at and really creating the fund itself and where we're at the project's work plan We'll spend some time reviewing and discussing the fund's financial model as well as some of the implications in the city's term sheet And then we'll end with the review on the fund's sort of governance and legal structure Some of which claire and michelle have already touched on Next slide please So just to review our team has been working pretty closely with the red over the past 18 months or so to identify ways in which this new housing fund can Really catalyze development in santa rosa and other urban areas of sonoma county This has involved pretty close coordination between the red itself and later on representatives of the city and county And over the past several months, we've been working pretty regularly as claire said on drafting and negotiating terms for the city and county's investment in the fund in parallel Um at this point we've reached a point where we're nearly final with the city's terms An action item of which for today is to approve those terms and authorize the execution of a loan agreement based on those terms at a later date Um in parallel, we've been working with the red on really Operationalizing operationalizing the fund and actually had its first board meeting last week Next slide please And I will pass it over to daniella to review um the products as well as the financial model component Thanks, Olivia So yeah, I wanted just to provide um an overview of the loan products that the fund is offering to developers And this was included in the options and feasibility report that we released last summer and it was based on Research and conversations the number of local stakeholders So the first product is for affordable housing and it's a subordinate loan That's available from pre-development through the permanent period This loan would be available for up to 18 years At a very low interest but with required monthly payments. So the idea here is that The developer would need a two to three year construction loan And then on top of that at least a 15 year permanent period and that's because most tax credit investors Will want the permanent loan to extend as long as the tax credit compliance period And this subordinate loan is really meant just to fill in that last gap in the project's capital stack The second the second product is for middle income and market rate projects And this is a subordinate construction loan that would cover approximately 10 of the project's development cost This would be in second position behind the bank's first position construction loan But it's really meant to solve that problem where right now we're finding that the construction lenders You know are offering construction loans smaller than the developer really needs So this construction loan would be available for two to three years And a repaid upon completion and lease up and stabilization However, there may be situations On the on the market rate side where if the market rents are not proven And the developer is not able to secure a permanent loan That is large enough to repay both the bank's first position construction loan and this subordinate loan In that situation, this construction loan could be converted To a mezzanine or a mezzanine, which is a subordinate permanent loan And on on the market rate and middle income side This loan will be available for up to 10 years again with required monthly payments Um next slide please So one of the items I just wanted to provide an overview on was earlier Claire had mentioned that at the subcommittee meeting in June There was one term that was sort of up for discussion And this is whether The city should place a cap On the amount of interest revenue that the red housing fund could use to cover its annual operating expenses And in the um the earlier term sheet had proposed that 50 percent of interest revenues could be used to cover expenses in its first in the funds first three years of operation And then thereafter no interest revenue could be used to cover operating expenses for the remainder of the 20 year term On that term has been Struck in the current version of the term sheet And I just uh wanted to say that foresight recommends that there is no cap On the use of revenue to cover the funds operating expenses and just wanted to walk you through two scenarios to show why it's not recommended So first of all, uh the funds ongoing annual revenue comes from three sources And you'll see that at the top um in the top of the these numbers here So the first is interest so monthly interest payments from the construction and permanent loans That the fund provides to developers The second are one-time origination fees when the housing loans are closed the developer pays an origination fee And the third is interest earnings from any excess proceeds that are invested in a permitted investment instrument And there's also grants that you see here and that's really just meant To cover the first one to two years of operations These are funds that we've raised from outside donors to cover expenses as the fund is ramping up its activities And so it's always been our intention that this fund would be self sustaining meaning that it would generate enough revenue to cover its expenses and so um So that's the premise here, but I also want to be clear that the fund is not using Any of the of the ten million dollars in principle from the city or the ten million from the county to cover any of its expenses That's purely for lending activities And so on this slide, this is a base case Where there's no cap on the use of revenue, which is our recommendation And obviously these are just draft projections, but to give you an idea of how this fund operates So at the very bottom the bottom right you'll see um the cumulative cumulative net income over the 20 years of the fund And as you can see it's positive, which is about six hundred thousand dollars over the 20 year term However, um in the early years If you look at the line above it called net income in the early years The fund has positive net income because it's generating more revenue from its activities Then then the expenses that it's also um using However over time if you look in the later years and your 15th or your 20 What happens is as the fund is winding down and it's you know stop. It's not issuing any new loans There's there's less lending activity and thus less revenue But the fund still has expenses that it needs to cover The fund still needs to continue monitoring and servicing those loans and and paying for its insurance and so forth So in the out of years the fund may not generate enough revenue to cover its expenses So what happens is over the 20 year term The fund will conserve net income in the early years and use it to pay for expenses in the later years So overall the fund supports itself By you know using its revenue over 20 years to cover all of its expenses over that same term Um next slide, please And so this slide is the second scenario which which which would show you what happens if we tap Um, how much interest revenue can be used to cover expenses? So in this scenario, we're only using 50 percent of the interest revenue in the first three years And then we're using none of the interest revenue thereafter And so what you see at the very bottom under the cumulative net income and the far right You'll see we've got a loss of almost 3.8 million dollars over the 20 year term and so um And the reason for this is because interest earnings Are actually a significant portion of the fund's ongoing revenue source. And so if that's capped There's not enough revenue to cover its expenses over the term over the funds 20 year term And if this is to happen, we would actually need to be raising grants year over year Um to cover the fund's expenses, which would end up Further increasing expenses because we've got to pay for the fundraising the time to fundraise Um, I also just wanted to make three more comments Um, I know that there was um a question or a statement at some point Um that it was always intended that the fund would attract additional investors Who would help pay for these operating costs? And that is true So if the fund attracts additional capital from other lenders That means we'll have more money to increase its lending activities But with more activity, there will be more revenue But there will also be more expenses. So there'll be additional underwriting underwriting closing costs and staffing needs Um, also on other funds we have worked with um, we have not seen caps on funds And so what typically happens is as this fund grows Over time excess revenue could be used um for new business lines Or to increase lending capital on its current products But those decisions typically get made over time based on actual financials Um, and so we really want the fund to have the flexibility now To jump on opportunities as they arise Um, and you know, that may not be on our radar today And so the less constraints we put on this fund today the more opportunity we really we really have in the future And then finally just to note There will be an annual budget process. And so the red housing fund board Every year has to approve the annual budget as well as approving the cost of you know, third party Contracts or staffing and so as time goes on The board will be able to review actual historical expenses and make better educated decisions about upcoming needs and future expenses And so it will stop there and we can respond to the next slide Thanks, Daniela So to switch gears a little bit and talk about more of the legal and governance structure for the fund The fund will be governed by its board of directors and so to talk a little bit About who those people are and then what their responsibilities will be on the next slide and The board is going to be comprised of three representatives appointed by the public sector So the red board will have an appointment of which they've already made As well as one appointment each from the city and the county And then the remaining four seats on the board will be independent directors And these individuals will be recommended by the red board But appointed by council for the first two and then because we already have a fund established The current board members will be taking that recommendation for the next two seats And so council member tidbits was in his comment earlier Correct in saying that the reason that we're trying to structure it this way and it is a bit wonky is that We need to have make sure that a majority of the board is classified as independent Which means that it isn't point isn't appointed by a public agency And that is because the irs will there The irs would view the fund if it was appointed or a majority of the board was appointed by a public agency as an instrumentality of government And this can also affect the fund and its ability to fundraise over time For instance, if the fund at one point wishes to become a certified community development financial institution a cdfi Um cdfi certification Um isn't extended to instrumentalities of government So the fund would not be eligible to become a cdfi at a later date And so that's kind of just a little bit of why we've structured it this way and how kind of the process is played out And the reason for that process And then i'll add as they're said to at a later point the red board may decide to add two non-voting advisory members to the board as well And so these individuals will be able to participate in meetings and voice their opinions But they would not be able to actually vote on matters Concerned by the board of directors Um, and as I mentioned we have the first three board members already in place two independent directors as well as the reds appointee And the remaining four directors on the board will be filled later this year later in the summer Um to recap just a little bit on the legal structure of the fund So the fund because we have those three board members in place We were able to submit the articles of incorporation which formally create the fund as a 501c3 a non-profit corporation And so now our next step is to apply for federal tax exemption from the irs And so our team working with the red and council is currently in the process of drafting a form 1023 Which will submit to the irs for federal tax exemption Um, lastly from an operational perspective, we're anticipating a very lean staffing model for this fund As daniella, you can kind of tell from the slides that daniella reviewed the expenses We're trying to keep this as light touch and lean as possible. And so therefore the fund at this point We're anticipating that it will contract with third party service providers Such as the city's housing authority to provide all the capacities that the fund needs to operate Um next slide, please So the board as I mentioned is going to have the primary decision making role for the fund And you can kind of think about these decisions in three broad categories categories There's sort of a governance component. And so that's kind of adopting or amending any key governance documents or policies and so We already have the bylaws and the articles of incorporation But if at some point the fund wants to establish further policies that it needs to abide by the board would be responsible for creating and adopting and amending those as well Um, if at some point the board would like to add new members to the fund Um, that is something that the red housing funds board will need to decide and they'll need to decide who and when to appoint those members um There's a financial component separately Which is kind of anything associated with the fund raising ability as well as the budgeting process. And so If the fund is looking to raise additional capital The board would be the body responsible for approving terms and eventually agreements of those investments into the fund As Daniela mentioned, the board will also be approving the fund's annual budget. So they will be reviewing You know the nitty-gritty details. Who is the fund going to be contracting with what are the size of those contracts things like that? Um, there's also an oversight and reporting component So the board will be guiding the fund through its annual audit and 990 procedures as well as receiving and filing reports around those processes as well and then importantly, there is the programmatic aspect which is Really deciding what projects the fund will be lending to what projects the fund is going to support As well as if the board wants to add new products or programs at a later date The board will be approving those as well And so we've listed here just a few kind of different types of backgrounds that we've seen represented in other funds That foresight has worked on And just kind of to help the city think through, you know the different types of individuals they might want to appoint And so we've seen Individuals with backgrounds in housing and community Development sort of public agencies Individuals who have more of a philanthropic or corporate finance background Law is always very important as well as any sort of local advocacy or local stakeholders as well And so I'll stop there. That's the presentation that course I've had And I don't know if we want to answer any questions or if there's player that you want to get back to your process The rest of your slides as well No, I want to make sure that they have an opportunity to ask you questions, especially those that I could not answer Yeah, well, we'll go ahead do a couple of council comments or questions here I do have a few myself First and I apologize if I missed it. What's the length of the term for board members? The initial term is I believe it's We're going to let me just double check um an initial for your term though the um The representatives for the city county and red board public agencies can replace their board of directors at any time Okay, and Claire my understanding is that this would be similar to many of our appointments where Uh mayor appoints council approves That's the staff's recommendation is to treat it just like any other um regional appointment Okay And then michelle I had a question about the criteria if we can Can go back there As I understand it you have the four criteria that are required and then you have Uh a requirement that at least one of the additional conditions are met One of the required criteria was transit rich planned area But then one of the listed plus have to have Was proximity to transit bike and pedestrian crossing They sound like they're similar to me, but i'm hoping you can parse through the difference Because it would seem that the initial criteria that is required Actually would satisfy the condition That is that is intended to be additive Sure. I'm happy to take that The first reference across the top of the screen refers to I think it's five different designated planning areas And there is a more detailed project criteria sheet with the legal definitions, but the Designated areas are priority development area world community investment area specific plan area high quality transit corridor And qualified opportunity zones What you're seeing in the evaluation criteria is Not a legal definition, but More um general definition of you know, let's make sure that there are modal Transportation options in proximity to these developments Okay, so it's possible to satisfy the transit rich and planned area criteria without Satisfying the proximity to transit bike and pedestrian connectivity Certainly the um, I think it would sweep in the Proximity to transit maybe not the bike and pedestrian proximity Okay All right. I just wanted to make sure that that wasn't That the the plus one or more of the following I assumed it's supposed to be additive and I just wanted to make sure that there's at least some form of a distinction that you don't just Automatically have that if you if you meet the basic criteria Yeah, I think that oh, I'm sorry. I didn't mean to go for it I think that What that evaluation criteria is getting at are things like the Multi-use path which wouldn't fall under the definition of any of those planned areas Okay, right. Thank you and then the last question that I had was a Partially for Claire partially for Michelle sounds like the board has had a pretty exhaustive conversation on this but when we Did the original design of the renewal enterprise district through The build rebuild ad hoc committee The intention was to open this up for other cities to participate After two years and I understand why we're not at that point now I have talked with council members in other cities who are interested in participating and I think if we are encouraging Other jurisdictions to do their part with housing as well And I know that many of them are feeling the sting of the new rena numbers I'd be a little bit hesitant To make it more difficult for them to join the renewal enterprise district And so I guess I'm just asking for a quick pitch. Like I said, I know you did a more comprehensive Discussion on it But what's the pitch for making it more difficult for these cities to join? We haven't made it more difficult We haven't made it what we've done is amend the language so that it's not Um automatic It through the course of setting up this housing fund It's important to get it this it established and it's legal structure established Before we start adding members Um, but I've talked with council members and mayors from other cities that have expressed interest as well um, and it looks like Council member tippets wants to add to this And he is chair of the red. So I'll yield to him Go ahead council member Thank you, mayor. I just wanted to try to address your your question and your concern Um with rehashing our discussion during meeting about this very thing The the the red board was unanimous in its agreement that we need to welcome in other cities From an impact perspective like you're talking about housing is a regional issue Um, and also from I think just kind of a best practices, you know, let's let's pool resources Both in terms of human capital and financial capital Um, so that is absolutely the intent going forward I will say speaking for myself and I want to stop short of speaking for other board members But I do think this might have been some of the sentiment Is we we didn't get to a point of discussing resource allocation beyond the $50,000 membership fee And what I'm driving at here is As the person representing the city of santa rosa's interest on the red board I feel a fiduciary responsibility To see to it that that $10 million is serving the city of santa rosa first If we start issuing loans and these developers are able to get occupancy in their buildings get cash flow And then go out and get a better loan refinance and we're repaid Personally, I think it would be great if santa rosa could lend a hand to the rest of Um our community again with the understanding that housing is a regional issue But right now I feel like My charge has been to protect santa rosa's Interest in money and meet the housing needs of our city And since the red is so new that really had to be my focus If you and the in the council want to change that focus, I'm happy to take those sentiments back to the red board So Why wasn't there a discussion about a return for the for the time being a return to source requirement? That that it would seem to me more prudent that you would say that the 10 million dollars that the City put in needed to be used on projects to finance projects that were in the city rather than Make it so that others couldn't join you could then basically say to runner park and to healdsburg If you put in money that'll be able to back projects that are in your jurisdiction until we see how this plays out Yeah, and mayor what i'm saying is we just didn't get that far because we recognize that that's the question of the day, right? It's the return to source question as one of seven on the council. I like return to source um, but we have not Frankly just had the time as a red board to to have that broader discussion about What what is the the payments? Into the red board look like for these other jurisdictions. What does return to source look like? We have just been entirely focused on navigating The legal structure of the nonprofit in the eyes of the irs the criteria for how we will evaluate projects And the selection of what will be hopefully a good and strong independent body So i'm sorry that that's not it's kind of a cop-out answer, but it's the truth No, no, I think it's a fair answer and I appreciate the honesty Councilor, are there any other questions? Councilmember schwedhelm. Thank you, mr. Mayor I know this may sound in the weeds, but i'm a big proponent of let's ask the question before Before us so on the red housing fund. Um, what's the process for proxy votes? Are they allowed or not? They are not allowed So that's specifically In the I guess would be the articles of incorporation It's in the bylaws. Thank you. Okay, and then um, I know that Did the board discuss any opportunity for the in-kind donations? I know the city santa rosa is providing office space. Is that just How how was that being looked at? Is that a question for me or for staff? Yeah, yes, it could be for anyone Yeah, um, I think it's a question for red. Um, because michelle can talk about their operating budget and what they rely on and how that functions and how The ask fits into that bigger picture I wanted to just make a point of clarification. We do provide Additional assistance besides just a member assessment Sure, so I do have a a cube in room six of city hall and uh, the The red has provided value to the city the city is providing value to the red for example I just got a there's a Red grant to the city to fund part of the eifd study The city did assist with the red with an application to mtc that got $150,000 grant The red paid for a grant consultant to complete a grant application For a state grant that's coming to your council For approval in the next couple of weeks so There is a a lot of mutually beneficial collaboration going on The The neither the city nor the county have contributed financially to the red so far. We've been extremely fortunate That we got the hula foundation grant to start this up as a pilot project And we've gotten grant funding to help offset some of the costs of Creating this housing fund and I do a lot of fund development still seeking grant funding. So The answer is we've been great partners actually city staff and the red in attracting resources for housing projects here last year The red worked with four different developers to submit state grant applications that won 38 million dollars in funding City staff has worked well with the red and with community stakeholders to Capture a larger share of the disaster low-income housing tax credit pie Some of those credits we're slipping through our fingers. So I think the answer is we're doing great together and we're We are attracting more resources to devote to housing here in center roads in Sonoma county And I totally get that I I guess my interest is as long as the red board acknowledges that and we're recognizing that and we're okay with The geographic location for the executive directors of the city facility And and period we're not expecting any compensation because I totally get what you're saying michelle about the mutual beneficial agreements with it I'm just all about because if we do is the mayor was talking about if other cities do join Situations change and let's just make a conscious decision that we're good with it versus Didn't think about that. So that was the only reason why I brought that question up And then lastly, I think this would also be for you michelle on the attachment five Which you did a great job of explaining it was a memo to claire That's included in our staff report about how we came up with the 50k But I did notice on one line item From fiscal year 2021 was a red grant to housing project to 150k. Could you share a little information about what that was? Sure, that was a placeholder that was put in the original red budget that I inherited We didn't know we would have a red housing fund. We didn't know we would attract all this state grant money You know tens of millions of dollars and so Before I was executive director the red board Set that money aside not Dedicating it to anything at the time just let's set it aside and In reality as you know councilmember schwedhelm that funds less than half a door of a housing development So early in the year when we did budget workshops with the red board And then adopted a preliminary budget It was determined that the highest and best use for that $250,000 was to Keep the red going through this process of setting up the housing fund because that's where we're really going to Make the biggest difference if we can get this if we can stand this thing up Deploy 20 million dollars to Get sticks in the ground on these projects that are stuck that's going to make a lot more difference than $250,000 You know like I said half a door in a multi-family housing development Great. Thank you for that explanation. So just so I'm clear there was no No other housing project got it. It stayed within the fund itself Right. Thank you We have any other questions from council members All right, we'll go to public comment on this item Is there anybody in the chambers interested in speaking? All right, we'll go to Our live zoom comments. We'll start start with luke and then go to adrian Good afternoon. Mayor rogers and members of the santa rosa city council My name is luke lindenbush with generation housing a non-profit organization supporting the supply of diversity and affordability of housing in Sonoma county We submitted a letter cosigned by two dozen local leaders strongly encouraging you to match the county's 10 million dollar investment in the red housing fund I'm here to reiterate that recommendation that you seize a once in a generation opportunity To accelerate the piece of housing production by allocating a portion of pgne settlement funds to fund the inception Of the renewal enterprise districts housing fund This match with the county of sonoma's recent allocation to the red is the culmination of a long process and nearly complete This is a watershed moment in realizing a vision that has been in the works for years And this is the product of many years of hard work and many community members elected officials and local government staffers who refuse to give up on a commitment to housing production in downtown santa rosa In particular in the wake of the 2017 fires The effects of the red housing fund will support a vibrant community both within and beyond santa rosa This is a regional approach to housing that's starting right where we need it most As has been mentioned local funding is instrumental in attracting additional state dollars to adequately finance the many projects That struggle to secure the full stack of funds needed to break ground There's no single solution to make housing production viable and the city of santa rosa has been recognized by governor newson Is doing pretty much everything you can to streamline the processes of permitting but In terms of what what could be a silver bullet even though there isn't one To make housing production more viable The red housing fund just might be it because it addresses financing and financing is the most complex challenge Getting in the way of us delivering on housing production here in santa rosa and sinema county We need a lasting self-sustaining funding mechanism to bring more mid-rise and high-rise housing at all levels of affordability to downtown santa rosa Thank you to council for your continued support of the red and thank you to staff clear hartman megan bassinger foresight street and of course michelle wittman for all of the hard work in developing an innovative And resilient solution in the making when it's driven I made out by comprehensive project criteria consciously designed to address key community development and disaster recovery needs We appreciate your service and we understand the difficulty in balancing compelling and competing needs and priorities for what to do with This funds and the challenge in prioritizing funding when there's simply not enough money for everything We encourage you to rise to the opportunity of this moment By prioritizing and investing in housing the red housing fund is the best way we have to ensure This settlement money has significant lasting and generational impact. Thank you Thank you. Luke. We'll go to adrian Thank you.  I'm the co-founder of homeless action It's really so nice to see all of this effort to build more housing It's a core Desire of all of us and I'm really grateful for everyone's work to get us this far Now as I'm sure you know building market rate housing does not solve the most important housing problem We face in san aroza, which is the lack of housing for poor and homeless residents To house this community takes planning and oversight And I'm really pleased to see an emphasis on this as one of your core principles So I have a few things I'd like to bring to your attention One is I want that you would make an effort to support the housing plan so that the Share of extremely low and very low income housing is actually built There's a long way from this moment till that and it's important that you watch out Every local entity wrestles with the percentage of these very low income units. They're not easy to fund And they often link it to the density bonus It is really important that the red not leave these decisions to the local entity But to make them as part of their contracts In addition You and the red board should very strictly monitor variances That are Given in your documents say if other financing requirements preclude Then they can get a variance So we can't let anyone involved in developing these units ignore the need to house the poorest residents including homeless residents It's so core to what we're trying to build in in Santa Rosa right now, which is an integrated community And this brings me to the final point, which is the potential for off-site affordable and workplace housing I'm hoping this doesn't mean what I think it means which is oh if you can't afford to do them right next to your Fancy luxury apartments. You get to do them over in roseland somewhere or in some other very low income neighborhood This is not what we want We want affordable and workplace housing to be integrated in each project And certainly within each area and not shuttled off to some Low-income neighborhood ensuring that it becomes more and more low income as time goes by Thank you so much. It's really interesting listening to all the details and I wish everyone the best of luck Thank you so much adrian I did see hazus guzman's hand pop up and i'll see If it pops up again We'll go to gregory furan Thank you. I like adrian I'm excited about the possibility of raising more funds for doing housing Low-income and the missing middle We all need housing And your housing authority and this the county's housing authority have been I won't say fun places, but they're the places where folks like me and others who want to build low-income housing Have gone to wrestle with all of these questions And as legislative bodies under the board of supervisors in the city They're open to us. They're Brown act compliant What I was a little Alarmed at and I've been to all the meetings of the red Was the what seemed like? The setting up of a non-profit Not being under anyone's sort of control in order To get out of the brown act Now I'd like someone to to say yes or no because that bothers me it it is Unusual to hand this much money to a non-profit organization If what you're trying to do is to meet behind You know somewhat closed doors meaning you're not going to let us know enough to be able to do what you know Every other commission of the city or county has to do In order to be able to do this in the latter day and be transparent So someone please tell me i'm wrong that these are all going to be Private meetings of a board that isn't really under the control of any elected Thank you Thank you. Gregory. I'll go ahead and pull it back and see if we have any voicemail public comments We have no voicemail public comment on this item. Great. Thank you And michelle, I'll go ahead and throw that question to you. Will this board For lack of a better way to put it be brown act compliant the A 501 c3 a non-profit is not subject to the brown act Transparency has been important to the redboard and through the account of the Quarterly and annual reports that will be made to the city council and the County and any other investors to the fund There will be some accountability there We do have community members who are Have skill sets that are valuable to the fund who are Have served on other community boards. Todd Sheffield, for example Has served on the cap board. I don't believe the cap board is Subject to the brown act, but none of us would deny that You know, it's doing amazing work non-profits Have to adhere to Standards to remain non-profits. This is a model that has been used That foresight has used in other cities across the country Because it works because it promotes investor confidence so that we can attract outside funds So that we can down the road perhaps become a cdfi and and access the US treasury cdfi funds I think for a deeper dive on why this model works and What its advantages are Through the mayor if you wanted to pitch the question to olivia and daniella they could probably add to it Yeah, I can definitely Have them weigh in on that I think we all understand that because this is a 501c3 and not a government entity the brown act wouldn't apply As it's written. I think the question is and I think it's a good one from the public If we're putting 10 million dollars towards this of the public's money Where is the public able to weigh in? And what I heard from you is they can weigh in on decisions that have already been made when they're reported back to the jurisdiction But you're saying that there's no Upfront engagement. There's no opportunity for them to comment prior to funding decisions being made I guess prior to the financial decisions being made those are credit decisions that are being brought to the red housing fund board with proprietary information private financial information They we do have a really robust Participatory planning process here in Santa Rosa and certainly in Sonoma County There is a lot of public participation and opportunity for public participation there There is the red board meetings are Brown act and We invite public participation every time are we post an agenda. I distribute it widely but I get that I guess the question is Once the funds leave the city go to the red board and are allocated to the 501c3 The public has no way to participate And no way to know that the decision is being made or what projects are being funded Until that quarterly report comes back Right the public knows or should know and the elected officials who are accountable Should know that these projects are going to be bound by the red Project criteria those project criteria align with public policy goals The fund has to operate as a public benefit charity as a 501c3 and I think Those check the boxes of where is the fund accountable? but is the public going to come and go through the financial statements of a project sponsor And have the opportunity to review their credit and give a thumbs up or a thumbs down Um, it it's not designed that way Okay, I'll see if there I would just weigh in through the mayor The emphasis for public interest participation in this model is going to be that red criteria. So I'm getting proactive getting interested in what that criteria is And that reliance is on our our red board, which we have two representatives, but that's that is the participation point Otherwise just as michelle noted Okay, thank you. Are there any other questions from council members? All right, we do have three different resolutions Here i'm going to ask council members if you're going to make statements on them Go ahead make them now before we start to parse through each of the three of them Council members what helm do you want to start? Nothing nothing to add. I appreciate the presentation. This is a very complex subject And I appreciate the time and energy that went to its production. Okay council member tibbetts Thank you, mayor. I've got the resolution Approving the 10 million dollars in front of me. I do not have the other two I don't know if i'm looking at an outdated agenda Oh, never mind. I have it red assessment and resolution three. Okay Um, here we go. I'm move a resolution of the council of the city of santa rosa approving an allocation of one-time pgyny settlement funds in the amount of $10,000 in the form of a loan to the renewal enterprise district housing fund To assist with the development of infill housing in the city of santa rosa and wait for the reading of the text second Motion by council member tibbetts and a second by council member soiler and now claire was there an amendment that you wanted to make to this one I want to make sure it's captured Yes Thank you. Um Now I could just summarize the amendment so the amendment is to the exhibit a that is attached to that resolution Which is the city's loan terms the term sheet uh, and we're suggesting is to replace the The right after the third bullet under use of proceeds I just want to specify that there's No more than 15 of proceeds from the loan may be used to fund soft costs for any of the market rate projects And no more than 25 of proceeds from the loan may be used to fund soft costs for any affordable project We want to make that text amendment. So it's specific not to 25 of the loan But 25 of a project And then the second one go ahead No, sorry, please continue And then the second one is just the last bullet under that section, which is Essentially, it's still not professing a cap on administrative costs or administrative Use of interest income There's so there's no cap that we're professing but we want to match the county's language that does restrict the interest income um to the fund and not have it um Move on to the the red as well And so that we'll add that language into the loan agreements to uh to match Thank you So moved on both amendments and I realize I said 10 000 not 10 million. So I'd like to correct that Michelle was sweating there for a second. Is that okay with you councilmember Sawyer? I just have a question for clarification clear. Um, so when there when the conversation was was around the cap Does this Does this fall within a reasonable Change that will not hamstring the endeavor Yeah, this is a change to the terms that Checking with Michelle and team they're comfortable with And again, the county has the same terms and the intent all along is that the interest income would Stay with the fund and we're just being specific because our the draft terms that we submitted with this packet Um, wasn't specific. So we'd like to be specific just like the county Okay, as long as it's like I said as long as we're not hamstringing then um, I'll accept that I'll I will second that Hey Let's go ahead call the vote on this resolution councilmember Tibbets Hey Councilmember Schwedhelm. Hi Councilmember Sawyer. Hi councilmember alvarez Vice mayor rogers. Hi Mayor rogers. Hi That motion passes with five eyes with councilmembers alvarez and Fleming absent Councilmember Tibbets, okay I'll move a second resolution of the council of the city of san rosa approving an allocation of one time PG&E settlement funds and the amount of $50,000 for a one-time member assessment to the renewal enterprise district and wait for the read second Motion by councilmember Tibbets and a second from councilmember Sawyer.  Hi councilmember Sawyer Hi councilmember Alvarez Vice mayor rogers Hi Mayor rogers. Hi That motion passes with five eyes with councilmembers alvarez and Fleming absent Councilmember you're going to do the third resolution as well I am I was hoping my son would let up so I apologize Okay, I move a resolution of the council of the city of san rosa approving the first amendment to renewal enterprise district joint exercise of powers agreement modifying section 4.02 allowance of additional members and wait for the reading second Motion by councilmember Tibbets and a second by councilmember Sawyer As I expressed previously I do have concerns My preference would be that the board review return to source not change How difficult it is for members to join and I do think it makes it more difficult for them to join and much more subjective So I will not be supporting the motion But with that let's call the vote councilmember Tibbets Hi councilmember schwedhelm. Hi councilmember Sawyer Hi Vice mayor rogers. Hi Mayor rogers. No That mask that motion passes with four eyes with mayor rogers voting no and councilmembers alvarez and Fleming absent Okay, thank you so much to the foresight team and to michelle for all the great work that you're doing with the red Thank you claire and to our legal staff for your work on this item as well It has certainly been a a big project and we appreciate the impact that it could have Councilmember Sawyer. Did you have anything additional to add? I do. Thank you, mayor. It's a something to consider First of all, thank you to all involved in bringing this forward We are actually putting our money where our mouth is And it brings me to 10 years hints We have experienced as a council intentions from years ago that lost some of their clarity and Then then the monies that which were intended for one purpose Somehow in in those 10 years or 15 or 20 years which can go in the blink of an eye became less clear Is our documentation clear enough to future councils that are the spirit in which these monies were loaned This in 10 years there it's going to come up before a council the to either reauthorize that loan or not Um, would a would it help would it be helpful to future to a future council to have a letter of intent And spirit that lets them know why we did what we did And that we hope that they that they uh have seen the value and would want to continue In that same to read to reauthorize that loan Or or to or to at least consider heavily reauthorizing that loan because of its original intention And I guess the question is is it necessary? Would it be prudent? Is it even done? because we've seen what can happen when when employees go when employees retire and uh and councils Fade away as will memories So I just as long as the as long as the language is captured in our documents Um, I'm fine with it, but somehow sometimes and we've seen it happen The the intentions fade and the intentions become less clear And that would concern me given the importance of this 10 million dollars in 2021 Um, it may not be all that important in 2031, but I'm just wondering if a If if a secondary letter or some kind of attachment to this document would not be prudent It's just a question. It's not a requirement, of course I'm not asking for a motion. I'm just thinking is would it would it be prudent? Mr. Mayor if I may I I'll weigh in and then of course, uh I'll also give Claire and Michelle and the foresight team an opportunity as well From my perspective first, I clarify it is a 20 year loan So we're talking about the council in 20 years Are the documents um have not yet been Prepared the final documents the final loan documents But I would anticipate that they will lay out and it would certainly be my intent in looking at them to make sure that they lay out very clearly what the intent is and My own sense certainly within the discretion of the council But that document should be sufficient. There'll be several documents. They're all involved. You'll certainly have the proceedings from today as well That that would would be sufficient To clarify down the line what the original intent of this money. I also recognize that over time uh Circumstances change and there may be reasons that things shift in 10 years or 15 years And that it would be within the discretion of the council that is then Seated at this dais or at the dais of our new city hall somewhere That that that council would be able to weigh if there are appropriate changes that should be made so From my perspective, um, I don't see a need for any additional documentation, but again That would be within the the discretion of the council And I would note that any such documentation still would not be binding on a future council I appreciate that madam city attorney and I and I apologize for the for the the time error But it actually It enforces my concern 20 years is of course a lot longer than 10 And uh, but I I'm sure that you're the language in the documentation Will will clarify our spirit at the at the time and of course things drastically change And so I just I it just it brought up a concern because I've experienced in in in how things get lost in in the Over time, but I I I trust your ability and your Your your team's ability to make our intention Clear at least in in 2021 and I appreciate it. Thank you council member tibets Thank you mayor two things First I I want to reinforce what what john is saying because I I think that's so important You know and in the five years we've seen a lot of these things Come back and the one that immediately comes to my mind is the real property transfer tax discussion And I know these are slightly different, but I think that he's right on about communicating intent to What's going to be a vastly different council with as sue stated vastly different priorities and I'm you know, I always wanted to even bind it for more than 20 years for that that very reason But I recognize what sue said rings true We may need that money for something much more important In 20 years and that's fine, but at least the intent gets communicated. So I guess my request Feel free to veto it mayor, but my request is to staff to draft a letter and we don't have to necessarily make a Agenda item out of it So maybe if it could be provided in the written communications at the end of one of the next meetings or something I know I'd love to review it But that that would be wonderful The second thing that I wanted to bring up is actually for the council Sighting your concerns mayor. I'm sorry. I didn't do this sooner, but in the term sheet I believe there is a clause about proportionality about use of funds So the city's funds that are used the city puts forward have to be used Within the city of santa rosa in a proportional one-for-one basis So it doesn't specifically call out the return to source Phrase but I think it's achieving the same goal, but I would nevertheless that our next board meeting take your sentiments back Thank you so much councilmember. So first of all, I'm not convinced that john won't be here in 20 years So I just want to make sure that that's on the record second oftentimes When sacramento passes legislation they also allow the author to have a legislative intent that is entered into the official record What I heard from councilmember tidbits is a desire for staff To have a legislative intent that can ride with this discussion as well And I can work with the city manager to have that Accomplished and circulated to council members Thank you, mayor Okay, we'll go on to item 15.1. Mr. City manager Mayor members of the city council item 15.1 is a public hearing Regarding the introduction of an ordinance of the city Of the council of the city of santa rosa amending title nine Of the santa rosa city code by adding chapter nine dash 30 Zero food wear ordinance Joey hennewicks our administrative analyst will be presenting the staff report Good evening mayor rogers and members of the city council. Can you guys hear me? Okay, thank you My name is joey hennewicks. I'm an administrative analyst with the transportation and public works department. I'm here to bring forward to hear a Zero waste food war ordinance with which most of you have some familiarity with especially those on the climate action subcommittee So we can go and get started next slide, please So just to kind of set the stage as to why this ordinance is needed in in santa rosa Production management associated with single-use plastic food wear is typically used once and then thrown away And this does have significant environmental impacts Those environmental impacts are listed down there on the second bullet next slide Bringing this a little bit closer to home into our northern california region In 2011 there was a clean water fund study of various street litter That found that 67 of the 12,000 litter items that were counted were single-use food or beverage packaging Similarly a 2017 study More locally here of the russian river found a similar percentage about 60 of the over the 2,500 litter items collected were single-use plastic items of some variety Is listed there you can see And in the 2019 the city of santa rosa stormwater and creeks team removed over a thousand cubic yards of trash That was deposited into our storm drain system or into the active channels of our creek So we obviously see a need And an issue with some of these single-use disposable products next slide So over 80 percent of marine debris originates on land Primarily is trash or ribbon runoff and it makes its way into the waterways, which ultimately will make its way into the ocean One of the scary kind of things about this is marine plastics have been found in human consumption items such as fish bottled water, honey sea salt and more And the practice of giving out single-use food where automatically um, really doesn't um It really encourages, excuse me customers and food vendors to pay a little attention to The materials that they are providing and and um the environmental impacts associated with that Yeah, just to be a friendly reminder that the city council did adopt santa rosa zero waste master plan in january of 2020 And a food ordinance was one of the plan's central strategy recommendations So that's going to kind of set the stage for the why as to why we are trying to pass this ordinance here in the city of santa rosa Next slide Another friendly reminder for the council and for the community The zero waste master plan that was passed by city council in january of 2020 had two overarching goals Those overarching goals were to reduce landfill dispose of the less than one pound per person per day of franchise waste by 2030 Currently we are at about at about 2.5 pounds per person per day To kind of give you an idea of where we've been the direction we've been moving once ecology took over in 2019 We were at about 2.8 pounds per day per person per day. So we are seeing some improvement in that realm And the second goal was to achieve at least 75 diversion of franchise waste from the landfill by 2030 santa rosa currently sits at about 45 diversion from landfill Up from about 39 percent in 2019. So we are seeing some some increases as a positive metrics working towards those goals Next slide So there are there's kind of jurisdictions in northern california all throughout california that have that have passed similar food wear ordinances some for example our Alameda san francisco san amonica There was a recent one recently passed by culver city Which is pretty aggressive But our jpa our solid waste jpa zero waste sonoma did develop the model ordinance for member jurisdictions to consider and review And that model ordinance there lists the following kind of policy areas, which is going to be prohibit polystyrene fume food wear from being sold And providing excuse me poly polystyrene fume wear from being in specified products being sold by retail stores It does require food and beverage providers and special events to use Composable recyclable disposable food service wear in that to go condiments and Cutlery lids accessories excuse me are going to be a provided upon request only They do encourage the use of reusables and more recently it did make an amendment to Provide service wear products without fluorinated chemicals also known as key fast So that kind of was the guiding kind of source for the city of santa rosa model We did bring this model to the climate action subcommittee and had some review through through those channels There was some discussion early on about moving into a fully compostable model in santa rosa And that was the direction that we received from council. There was some challenges behind that and i'll detail those here in the next couple slides So if we can go to the next slide, please And as i mentioned there was some significant City council and also climate action subcommittee review as you can see there this has had its chance to be reviewed By both the you know city council the climate action subcommittee and also to receive public comments and feedback on the ordinance Let's take a second to review that and we can go to the next slide, please So just a touch base kind of where we fell with the compostable going the fully compostable model Especially for those folks that are not on the climate action subcommittee. You have you know, I've heard this presentation a few times But pretty much all compostable food wear at this time is is contains polylactic acid or perl and polyfluoroccles PFAS These act as a grease or liquid proofing agent. They're really designed to prevent grease or liquid based foods from leaking out of food containers PLA is made from a plant in corn starch Excuse me most of the time and there really isn't any adverse health effects that are linked to that But there is some recent studies and some some more studies that are coming out that there that PFAS can actually lead to adverse human health effects And so it was a request of the city council and of some some public comments that were received to go ahead and consider the PFAS in banning that in san rosa And ultimately we went away from going the fully compostable food wear route at the moment Due to the fact that after significant research on my end, we found out that the Composting facilities where santa rosa takes our materials do not Accept the PLA or the PFAS They consider this a synthetic material They're no longer able to market their compost as Organic and as such their business model is is significantly Hurt because this it's about 75 reduction in the the price that they can charge For their compost. So for the time being we won't be moving forward considering the compostable food wear element But I just wanted to kind of catch The rest of the council up to speed and also maybe the public who was part of some of those earlier meetings Next slide, please Okay, so now that we've done a little bit of kind of history and background of how we got here today I want to go ahead and review the policy elements of the current proposed food ordinance as it stands right now So prohibited products and retail products This this ordinance would prohibit food wear that contains polystyrene also known as styrofoam from being sold Prepared to distribute it otherwise given away This also would apply to food wear containing PFAS or anything that is fluorinated Peru polyfoil out was there And this would also prohibit retail establishments. We're selling either one of these two products You might be wondering what kind of products are these do these include so these common products include coolers ice chests or similar containers packaging peanuts and other packaging materials often have the styrofoam And obviously with any food wear or food wear accessories that contain polystyrene or PFAS would no longer be able to be sold on a retail level Next slide Okay, so specifically regarding dine and food wear This ordinance would Are allowed for food facilities that they should sell or provide food and beverages for consumption on the premises Using reusable food wear and food wear accessories So what this means is that any brick and mortar Food facility that is allowing for onsite dining would only be able to use reusable food wear and reusable food wear accessories that are durable reusable washable Instead of providing single use Disposables for folks that are going to be dining inside their establishment Food facilities shall provide all other food wear accessories and you have some examples there of what's food wear accessories are Upon request only These could also be served upon request or at self-serve stations But it's it's the basic intent is behind this is that instead of automatically providing it to the customer The customer has to choose to use those Use those food wear accessories As an affirmative request there And then finally food facilities shall offer condiments and reusable dispensers rather than prepackaged single use packets Next slide So now we're kind of switching gears a little bit to specifically take out food wear and take out food wear regulations on the proposed ordinance There are ways food wear ordinance here Food facilities are prohibited providing are prohibited from providing food wear and food wear accessories that are made from polystyrene Or PFAS so that's something we've already heard but just wanted to reiterate that Food facilities shall provide these food wear accessories upon request only This is especially important in the take out food realm Especially as we are still in You know Covid protocol and we've seen an increase in take out food from folks ordering from home and either working from home or staying home More than they did previously And oftentimes they just will dump the the fork the knife the napkins the the jellies Into your bag and you know we take that home The thought here is is most of the time when you go home you don't really need those those products and a lot of times those end up being thrown away And so the the the thought here is that you know, we want we want these folks to These patrons to these businesses to affirmatively request these food wear accessories And the hope is is that's good. That's obviously going to help with our Diverting these materials from the landfill and the unnecessary creation of these materials to begin with Um, and then finally food facilities shall provide options for customers to affirmatively request these food wear accessories Um across all ordering and point of sale platforms. Whether that be the telephone in person or um are online Next slide continuation of some of the take out food wear regulations Food facilities, this is a little bit specific, but something that we didn't want to Put into the upon request option Food food facilities or take out food delivery services may include lids spill plugs and sleeves without requests for non reusable cups for delivery Those are for delivery and safety purposes Um food facilities are encouraged but not required to charge customers receiving to go food wear accessories 25 cents And the customers obviously must affirmatively request these food wear accessories The thought here is is if there is going to be, you know A optional charge that the business can decide that they want to um put on for these accessories number one It will potentially help the business recoup some of those costs for those materials that they're purchasing And secondly, it will hopefully act as a deterrent for customers to to not necessarily Need those food wear accessories and they can use the um, you know durable durable reusable materials that they have at home Um food facilities are encouraged but not required to provide the 25 cent credit to customers bringing in their own hygienic reusable food wear containers for to go items Ultimately, this is um designed to hopefully encourage folks to to bring in their own um food wear containers for to go items There is a um state law that allows for this process to occur AB 619 that was passed as long as customers bring in hygienic um reusable food wear containers And it is okay um from the business the business obviously needs to Agree to um provide or to put the food into that container. Um, there are some kind of more significant Protocol behind that as far as hygiene is concerned But the thought here is we're trying to get into this back into this reusable model where Instead of having that disposable food wear that's used one time and thrown away We can have them use a Reusable tub wear or something of that nature To where we avoid using these products all together And that that ultimately is going to be the highest on the zero waste hierarchy Is you know reuse reuse is really where we kind of want to go and focus on But at the moment, this is what we were thinking was we can start by encouraging some of these food facilities and maybe bringing this culture change to You know our food patrons and also the food facilities themselves And lastly the food facilities shall not provide takeout bags composed of plastic And shall only provide a takeout bags composed of natural fiber Customers would be strongly encouraged to bring their own reusable bags And this fits in line with the um the plastic bag ordinance that also the city of santa rosa has been a part of for for a handful of years as well Next slide okay Additionally within this ordinance, we are proposing a three bin waste stream requirement Obviously a three bin waste stream is is pretty much utilized all over Most of our single family home sector pretty much all of that as well as the majority of our commercial sector So food facilities to provide solid waste containers for customer use On the side they must provide three separate containers for garbage recycling and organics Typically what you see now is really just that one single garbage bin And so obviously as we as we sort at home and we sort at you know our commercial businesses We are also asking for us to sort at the front of the house In the in the restaurant and the food facility space Other guidelines would be consistent with our franchise hauler recology and you see that listed there To the extent possible Understanding that there might be some spacing constraints We do we do ask that all the containers be placed adjacent to one another And that there'd be graphic rich signage posted above each waste stream as to educate the customers on proper sorting techniques And recology does have PDFs that we will be able to link to make available Make readily available to our business community So they'll be able to have that information provided Online and that'll be easy for them to receive and to get And next slide Okay, so kind of focusing a little bit more on city city events city sponsored events and city staff facilities The plan is for you know the city to to lead by example And um with that what we're going to be doing is passing a A memo an internal kind of city manager memo where Effectively as of january 1st as well aligning with disorders all city staff facilities shall use reusable foodware and foodware accessories The thought here is you know if we're going to ask the community to do this We should also be doing it here. Um, you know as a staff facilities here for for city employees And then city sponsored events city permitted events shall also follow the requirements of this zero waste foodware ordinance Which effectively is going to be you know the ban on the holly stiring foodware the ban on the the PFAS foodware and the Accessories upon request is really going to be the main drivers there. We're going to be asking you our vet community Next slide So I just wanted to kind of wrap up Um And kind of compare the model ordinance to to also the proposed zero waste food ordinance This was a request by one of the council members in a previous meeting is to see kind of You know a comparison of what the model ordinance did versus what the city of san rosa ordinance Is going to do so you you see the the differences there and also the similarities I would remind you that um the zero waste cinema model ordinance originally did not include the ban on PFAS They decided to make a friendly amendment after the city of san rosa began entertaining that policy discussion But we do go above and beyond that a little bit in more of the aggressive approach of the dining facilities must use the reusable foodware The three bin system And then as well as you know the city leading by example by only using reusable foodware and accessories For city staff facilities Next slide Okay, one last thing I would just Remind the city council that um the city of san rosa, I believe was was Certainly the first public agency in sonoma county to institute the three bin system in our city staff facilities Um, that was about two years ago two and a half years ago. That was a project You've seen those bins around city city facilities for some time But I just wanted to remind you as well that the um, you know The city of san rosa is going above and beyond there to try to to lead by example With the rest of the community So there are going to be a few exemptions In the ordinance here, um, obviously anything that's packaged outside of the city limits We don't really have any jurisdiction over so we are going to encourage those entities to follow the provisions of this ordinance But we don't have the jurisdiction to necessarily mandate that Polystyrene aka styrofoam that is used for insulation or flocation purposes surfboards life preservers, etc would be exempt and um For the immediate preservation of the public space health or safety due to an emergency or natural disaster The city manager or his or her designee may exempt food facilities At all from from doing business in the city for for a specific time frame dependent on the city manager's discretion Next slide Additionally, we wanted to Include a waiver process in in this ordinance for any folks that might potentially have a an undue financial hardship or practical difficulty Not available to other persons in similar circumstances So we will have a waiver protocol where food facilities may apply for a one-time waiver for up to a year Not to exceed. Um, basically, you know, january 1st 2023 um, and that these the waiver will be the waiver review will be Partaken by the city manager his or her designee and they want the full discretion to verify the waiver application In grant or deny that waiver next slide So the effective date of the proposed ordinance would be january 1st 2022 This would be administered through our code enforcement department We are proposing a reactive enforcement mechanism to where we are going to be relying on the community and we'll have a A system set up to where folks can make You they could basically let us know if there are businesses that are not following, you know, the the ordinance itself Um enforcement would first include a written notice of non-compliance and a 90 day opportunity to correct And then failure to remedy the situation after the 90 days would be subject to potential administrative citation penalty listed below Next slide So I didn't want to touch base just on some of the community outreach that has been done on the ordinance um There was an informational email that was originally sent to uh the chamber of commerce The sander was a downtown district in the hispanic chamber of commerce detailing Um the the origins of of the ordinance. This was about a year ago I did recently just send the ordinance Language as well as the staff report to those same entities And I let them know that we would be discussing this tonight in the public Hearing forum and that if they had any sort of comments or concerns that You know, this would be their opportunity to to make those to make their voices heard Um, we did also I did see I did also meet with some of the members of the sander's downtown district about the ordinance at this point the ordinance was We were really kind of focusing on the fully compostable model and that was really probably the most um The most concerning aspect of it from the business owners that I spoke with There was about 10 to 12 of them on the zoom call at that point They were really concerned number one of the increased costs for the fully compostable and what that would have on their bottom line And also the fact of the um potential for the reusables during during the covet The covet environment was also a little bit of a concern But by far the largest concern was was the uh moving to the fully compostable and the financial burden on the businesses Which obviously we've moved away from that model And so I believe most of those those concerns will be alleviated with the us moving away from that Did also meet with Quite a few food truck owners out on sabastical road and business owners there The kind of the crux of their concerns or or discussion points were They were worried about the onsite dining the reusable Component there and they're them not having the ability to essentially have You know washing machines dishwashers be able to to provide that service And so what we're going to be doing with that is considered They are mobile and we are going to be kind of considering under the framework of this ordinance The food trucks would be considered as as an event So we would just be assuming that they food trucks would not be providing to go food in polystyrene PFAS um and providing those Foodware accessories upon request is what we'd be requesting of those folks that do on the food trucks consider They're not really a brick-and-mortar You know establishment and also had a meeting with some members of the latino business owners group No major concerns from this group What they did want to talk about was just to gain some clarity on the the differences between the zero waste saloma model And the city of santa rosa model as Obviously, some of the members were located in santa rosa and some of the other folks were maybe Located outside of the county or in the unincorporated areas So they I did provide some clarification to them on the the differences between the the two ordinances there Next slide So last but not least, uh, obviously with with an ordinance that's going to impact our entire city and the entire food facilities In our city, we want to make sure that we have a communication strategy So I have been working with our outreach and communications team And this is going to be the high level communication strategy that you see there documented And the hope is is that you know once and hopefully we do approve this zero waste food ordinance that we would be working to make sure that You know the the community is aware of the ordinance knows the specifics of it knows the requirements And that we we make sure that we get that shared on a broad a broad spectrum here So everybody is aware of the of the pending ordinance as it has it has it's determined tonight Next slide So without further ado it is recommended by the transportation public works department that the city council introduce an ordinance amending title nine of the santa rosa city code by adding chapter nine dash 30 zero waste food wear ordinance And next slide i'm available for any questions or comments that you might have All right. Thank you so much joey. It's always a very thorough Presentation so we appreciate that councilor. Are there any questions? All right seeing none. We will go ahead and open the public hearing If you're interested in speaking on this item go ahead and Put in your speaker card or raise your hand on zoom. I'm going to start in the chamber with lis Good afternoon In 2019. Oh, i'm sorry. My name is lis bordelotto And i'm a santa rosa city resident and also the chair of the sonoma county local task force for integrated waste management In 2019 research combining the results of more than 50 studies found that on average people could be ingesting The equivalent of a credit card of plastic every week In the air in food and especially in water This amounts to about a hundred thousand tiny pieces of plastic every year These results were widely reported and i'm sure some of you Good people have seen some of that reporting That particular study was done by the world wildlife fund or was commissioned by world wildlife fund And then by the university of newcastle in australia However, the findings may be an underestimate Because the micro plastic in staple foods such as rice wheat corn bread pasta oils and milk has yet to be studied These findings among others serve as a wake up call to governments If we don't want plastic in our bodies, we need to stop the millions of tons Of plastic that continue to leak into nature every year To tackle the plastic crisis urgent action is needed at every level of society This ordinance is a small piece of that necessary urgent action I urge you to approve adding the zero waste food wear ordinance Thank you Thank you so much. Liz we'll go to michael Hi, michael hilber My main concern would be to the the issue of contamination of the compostable materials because There's just a tremendous opportunity for people to throw away Compostable food container with leftover food and also have like a plastic straw Or a plastic utensils or aluminum foil in it and you know, we need to understand that contaminating the Compost is really Serious problem I understand that typically the The material will go through a grinding machine first before being put out to compost and If you grind up any, you know, plastic it's common that plastic and other things that you don't want in there and people really are concerned about Contamination of the compost You know understandably so I think For one thing the utensils should be biodegradable as well and Based on what I heard now. You're talking about The single youth's utensils Must be requested but not necessarily biodegradable. So I think it'd be better for them to be Biodegradable utensils if if I understood the presentation correctly Thank you, michael I'll bring it to our live zoom comments. We'll start with sunny followed by ava Hello My name is sunny galbraith And I am part of 350 sonoma and also on the zero waste north bay community group And i'm part of the sabassable city council zero waste committee And i'm very excited that this ordinance is being considered that will greatly reduce landfill waste and plastic pollution in our waterways And I urge the council to approve it And I think I successfully recorded a voicemail comment. So I'll I'll save that part for then But I wanted to add a couple of things I appreciate the places where the santa rosa ordinance goes a little bit farther than the model ordinance And we will definitely be considering those points With our city of sabassapal Committee and I just wanted to report we passed our ordinance in 2019 march 2019 and we've had um When we went around and did restaurant visits restaurants were largely supportive and appreciative of the ordinance and the education that came with it And also zero waste sonoma staff has been incredibly supportive and wonderful to work with in terms of helping us make custom signage for our city for our restaurants Being available for questions Advice for what foodware to use and then also having the online reporting Service where people can report an establishment that's out of compliance um And I emailed in postcards from the santa rosa junior college climate action night where we featured this model ordinance We emailed in postcards photographs of postcards from santa rosa residents So that um you guys can take a look at that loss of support for the ordinance from santa rosa residents and then um lastly As part of the zero waste north bay community advocacy group. I work closely with the s r jc waste diversion technician Guy tillotson. He said he emailed in a comment and he couldn't make it tonight, but did want to Relay his support for this. He's done an incredible amount of work on his campus in switching to compostable and recyclable items But it's very difficult for Him and his staff to deal with contamination from outside vendors Using polystyrene non compostable non recyclable Where and then Adding the burden of his staff having to sort through that and pull that out of their Composed and recycling waste stream. So this would greatly help their efforts on the s r jc campus And he wanted me to relay that so thank you so much for considering This ordinance and I urge you to vote yes All right. Thank you so much. Sunny. We'll go to ava Eva, are you able to unmute? Oh, sorry about that. Um, my name's eva holman and I am the policy organizer for a national nto upstream And I apologize to the loud room. I'm in it suddenly just got really noisy um, we focus on um Drafting and implementing fewer policies all over the u.s. But in particular here in the bay area and are so So excited to support wholeheartedly this model policy with the add-on of reuse Um, while the model itself is fabulous and reduces harmful chemicals and plastic pollution Adding the reuse portion really will save restaurants a ton of money Not having to pay for Expensive single-use disposables. So we commend you for considering this We urge you to pass it and are really excited to see this next step moving forward All right. Thank you so much. Eva. That's the last last hand I see here So I'll go ahead and go to our voicemail public comments There's a city council. My name is vincey tan and I am a resident of santa riza I'm calling in support of item 15.1 the zero waste food wear ordinance on the agenda for the july 20th city council meeting As you know during coveted and post coveted people have been eating a lot of takeout And a lot of waste is generated from this Even if people want to do the right thing Many vendors don't use recyclable or compostable food wear or they automatically provide disposable utensils condiments and napkins when people are already eating at home and don't need them Making this policy decision on the city level is the easiest and fastest way to decrease unnecessary waste By requiring food wear to be recyclable and compostable Or and require vendors to provide straws utensils etc upon request only There are alternatives food wear that is compliant for these food vendors to use and the cost differential is minimal I just want to remind the council That the landfill we have in sonoma county has only 26 years left in it This ordinance will help increase the landfill's lifespan and help the region decrease the demand for version materials and resources However, passing this ordinance by itself is not enough Resources and support for the businesses are imperative so that it is easy for them to comply Education for businesses and consumers on the importance of this ordinance should also be done concurrently Make sure that people understand how to properly separate the recyclables and compostables from the trash So that these items actually end up recycled