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HomeMy WebLinkAboutMin - CC - 2018.02.05 Burlingame City Council February 5, 2018 Approved Minutes 1 BURLINGAME CITY COUNCIL Approved Minutes Regular Meeting on February 5, 2018 1. CALL TO ORDER A duly noticed regular meeting of the Burlingame City Council was held on the above date in the City Hall Council Chambers. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Supervisor Dave Pine. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz MEMBERS ABSENT: None 4. STUDY SESSION a. THE VILLAGE AT BURLINGAME AFFORDABLE HOUSING DEVELOPMENT (PARKING LOT F – 150 PARK ROAD) AND PUBLIC PARKING STRUCTURE (PARKING LOT N – 160 LORTON AVENUE) City Manager Goldman opened the study session with a review of the history of the Village at Burlingame Affordable Housing Development project. In December 2014, the City issued a Request for Proposals (“RFP”) for developers interested in partnering with the City to develop City-owned Parking Lots F & N. She stated that the City was interested in affordable housing and adding to the City’s parking supply. Responses to the RFP were due January 2015, and the City received eight proposals. She explained that a subcommittee consisting of then-Vice Mayor Keighran, Councilmember Brownrigg, CDD Meeker, and City Manager Goldman reviewed the eight proposals. The subcommittee recommended that the City move forward with three developers: Mid-Peninsula Housing, The Pacific Companies, and Meta Housing. City Manager Goldman stated that on March 26, 2015, the three developers were given the opportunity to present their proposals including concept, financial capabilities, and experience in developing affordable housing to the full City Council and interested public. At the end of the meeting, the City Council asked the three developers to refine their concepts based on the feedback they each received. Thereafter each team Burlingame City Council February 5, 2018 Approved Minutes 2 was provided the opportunity to present its refined concept at a study session on June 9, 2015. Meta Housing was then eliminated from further consideration. City Manager Goldman stated that the two finalists, Mid-Peninsula Housing and The Pacific Companies, were allowed to further refine and present their proposals at the July 6, 2015 meeting. City Manager Goldman stated that at the July 6, 2015 meeting, the City Council selected The Pacific Companies as its preferred developer. She reviewed the City Council’s decision. She explained that Mid- Peninsula Housing’s proposal had housing and parking on both lots, but The Pacific Companies had proposed segregating the housing and parking on different lots. She stated that it was the City Council’s opinion that this segregation would make it easier on the public to find the public parking. She added that The Pacific Companies’ proposal included more new parking than Mid-Peninsula Housing’s proposal. City Manager Goldman stated that after being selected, The Pacific Companies undertook preliminary work on the project including financing, site conditions reconnaissance, design development, and testing the soil. The Pacific Companies has submitted development applications for both lots, and the applications are undergoing review for completeness. Staff anticipates bringing these projects to the Planning Commission for design review and environmental scoping in late February 2018. City Manager Goldman discussed changes to the project that have occurred since The Pacific Companies was selected. Originally, the project proposed 144 units of housing comprised of 78 units of workforce housing and 66 units of affordable and market rate senior housing. Now, the project proposes 132 units comprised of 78 units of workforce housing and 54 units of senior housing. The current proposal no longer includes market rate housing. Additionally, the parking structure was originally designed to include 172 net new parking spaces for the City. The current proposal contains 185 net new parking spaces. City Manager Goldman explained that staff is looking for City Council to provide direction on the following three questions: 1. Shall Parking Lot F be leased or sold to The Pacific Companies (with appropriate contingencies)? (She noted that this referred to the housing portion of the project and not the parking structure, which would remain in the City’s control.) 2. The parking lot structure will be constructed using prevailing wage labor. As a public building that will remain under City control, prevailing wage is required for the garage component of the project. Shall The Pacific Companies also be required to pay prevailing wage to workers involved in construction of the affordable housing development? 3. Pursuant to the Disposition and Development Agreement (“DDA”) between the City and The Pacific Companies, the City Council must approve the “sources and uses” of all project funding before further work on the project is undertaken. This approval relates to the funding plan at a macro-level, as the details of the project’s finances may change somewhat as project construction nears. (She explained that the “sources and uses” document describes where the money is coming from and where the money is going, including a request that the City cover a financial gap of $1.85 million.) City Manager Goldman stated that the developer sent a memorandum to the City Council on January 26, 2018 requesting a $1.85 million subsidy from the City’s parking fund to cover the project’s financial gap. Burlingame City Council February 5, 2018 Approved Minutes 3 The memorandum also stated that the $1.85 million is a hard cap, and the developer will not ask for additional funds. City Manager Goldman introduced Debbie Kern from Keyser-Marston. Ms. Kern wrote a memorandum to the City Council, dated December 21, 2017, outlining the pros and cons of selling or leasing Lot F. Mayor Brownrigg stated that he wanted the City Council to reach decisions on the three questions that the City Manager outlined. Therefore, if necessary, he would extend the study session after the regular meeting. Councilmember Ortiz asked if the City Council chooses to lease Lot F, would it trigger prevailing wage. City Attorney Kane replied that she needed to further review whether a prevailing wage exception was optional with a lease. Councilmember Ortiz asked if the “sources and uses” document assumes a sale, and that is why it shows a loan from the City. City Attorney Kane replied in the affirmative. Councilmember Ortiz asked if the City decides to lease Lot F, would the “sources and use” document need to be amended. City Attorney Kane replied in the affirmative Vice Mayor Colson asked if the City sold Lot F, would the City essentially be carrying back the loan. City Attorney Kane replied in the affirmative. Vice Mayor Colson asked questions about the loan including: how the City would determine the size of the loan; if the loan is based on an appraisal; what the interest rate would be; and how would the City fall in the line of credit. City Attorney Kane explained that the City had a Disposition and Development Agreement (DDA) that was negotiated prior to finalizing many of the project details. Some of the DDA terms can be amended and updated pursuant to City Council direction. However, the anticipated structure is that the City would effectively carry back the loan, and then the City would be paid back out of operating proceeds. She noted that the loan would be market value, established through an appraisal. She added that the details need to be worked out with the developer. Councilmember Keighran asked when the developer fees get paid. CDD Meeker stated that it is subject to an agreement with the City Council. However, typically the development impact fees are paid at the time a building permit is issued. He added that on larger projects like Burlingame Point, the City staged the fees. City Attorney Kane clarified that the deferred developer fee is $9 million. Of that $9 million, $2.8 million will be paid upon the project becoming operational, and the remaining $6.2 million is paid out of proceeds once senior financing is paid. Councilmember Keighran voiced her concern that it seemed that the City would be fronting a lot of money for this project if the City Council decided to sell Lot F. She asked about the City’s liability if Lot F is sold. City Attorney Kane explained that Councilmember Keighran was correct that there is no upfront transfer of funds to the City if the City decides to sell Lot F. She stated that in terms of potential liability for the City, it can be addressed through different mechanisms, including completion bonds. Burlingame City Council February 5, 2018 Approved Minutes 4 Councilmember Keighran asked if the tax credits were guaranteed. City Attorney Kane stated that the tax credit financing mechanism was preserved under the December 2017 federal tax bill. She noted that there is some question about how strong the market is for those tax credits. Councilmember Beach asked Ms. Kern to elaborate on Keyser-Marston’s recommendation that the City strongly consider a lease option. Ms. Kern stated that because this is a 100% affordable project and given that the City is not getting upfront cash payments, Keyser-Marston’s general recommendation is a long-term lease. However, she stated that leasing would affect the prevailing wage requirement. Ms. Kern explained that the project’s pro forma assumes that prevailing wages are only paid on the parking garage and not on the residential portion. If prevailing wages were to be required on the residential portion, it would increase the cost of the project, which would increase the project’s financial gap. Ms. Kern stated that if prevailing wage was required on the residential portion, the project’s cost would be increased 15%. She stated that she understood that a lease could be written so as to not trigger prevailing wage, but that it was more complicated than under a sale and she had not seen one. Ms. Kern explained that if the City was to go forward with a sale, the City would typically be paid the fair market value of the property at the time that the affordability covenant expires. Councilmember Beach asked if the fair market value was the amount it was originally appraised at plus interest. Ms. Kern stated that it is typically the fair market value at the time of transaction with a low interest rate. Councilmember Keighran asked if the City leased Lot F what the trigger point is for requiring prevailing wage. Ms. Kern replied that it is a legal question about whether the lease can be structured in a way that doesn’t trigger prevailing wage. Mayor Brownrigg stated that leasing Lot F would allow the property to remain on the City’s balance sheet. Ms. Kern stated that there are a lot of benefits to the City if Lot F is leased. Councilmember Beach asked Ms. Kern to elaborate on the benefits of leasing. Ms. Kern stated that under a lease, the property would be maintained as a City asset. Therefore, when the affordability covenant is released in approximately 55 years, the City owns the property and can do with it as it wants. Additionally, by leasing, the City maintains control over the property. Councilmember Beach reviewed fees that are listed on the “sources and uses” document including the deferred developer fee of $9 million and deferred contractor profit of $3 million. She asked what this really means in regards to developer profit on this project. Ms. Kern explained that in the cost statement in the pro forma, the developer has identified a $9 million developer fee. However, the developer will not receive $9 million. Instead, this number is used because it is permitted under the tax credit program and enables the project to achieve a larger amount of tax credits than it would if the fee were lower. She continued by explaining that the developer will net $2.8 million upon completion of the project, and the remaining $6.2 million of the fee is deferred. The $2.8 million amounts to approximately 3.7% of the project’s cost (excluding land), which is consistent with other affordable projects. She stated that the $2.8 million Burlingame City Council February 5, 2018 Approved Minutes 5 translates into roughly $21,000 per unit. On a similar project in El Cerrito, the developer is making $22,000 per unit. She noted that with the City’s contribution of land and a subsidy of $1.85 million, it averaged out to $109,000 per unit. Councilmember Ortiz explained that if the City sold Lot F, it wouldn’t see a payment until the affordability covenant expired in approximately 55 years. He asked how a lease would change the cash flow to the City. City Attorney Kane stated that the City has a roadmap in its existing DDA. She explained that the DDA includes a form of lease and a form of promissory note. The promissory note states that the City gets 50% of surplus cash from operations. It defines surplus cash as being the net of certain debt and operations during the length of the affordability covenant, and then a balloon payment upon sale or transfer to some other interest. She stated that the City Council may wish to revisit the existing DDA. Councilmember Ortiz asked if the 50% of surplus cash applies to both lease and purchase. City Attorney Kane stated that the lease is more complicated and subject to greater negotiation. She noted that there is a provision for ground rent in the lease. Vice Mayor Colson stated that in regards to paying off the loan, there are provisions that the City can put in place, like a lock box, to ensure that money doesn’t go straight to the developer but instead to a third-party holding agency. This agency would release funds to the developer and the City as appropriate. Mayor Brownrigg asked Caleb Roope from The Pacific Companies to discuss the project. Mr. Roope stated that the value proposition offered in the original proposal was to provide additional public parking and affordable housing in exchange for land. He explained that the $109,000 per unit doesn’t include the 185 net new parking spaces, which is a cost of approximately $80,000 per unit. Therefore the City is really only subsidizing $29,000 per unit. Mr. Roope explained that a problem they have as an affordable housing partnership is that if that entity takes a grant, there are income tax complications. Therefore, a lot of times affordable housing is intentionally structured as a loan to avoid that negative consequence. Mr. Roope discussed ground lease versus purchase. He explained that he has done ground leases before and that they are complex. He stated that prevailing wage would be triggered if the City gives property to a developer at a below market rate value. Therefore, in order that prevailing wage is not triggered, Lot F should be sold at fair market value with the City carrying back a note. He stated that he has done 50 transactions in this fashion. Mr. Roope discussed the option of a ground lease instead of selling Lot F. He stated that this transaction needed to be set up in the same fashion as a sale, where the developer leases the land at a fair market value. For example, if the property is valued at $12 million, and the ground rent is 5% at $600,000, then The Pacific Companies has to pay $600,000 every year to the City so that they maintain a fair market value structure. If the developer is making annual payments of $600,000, it will need to come out of the project’s budget. Therefore, the developer will need an annual loan of $600,000 from the City to pay its lease. Burlingame City Council February 5, 2018 Approved Minutes 6 Mr. Roope stated that he had seen leases structured so that all lease payments are made upfront. He explained that the City would make a loan in the amount of that upfront transaction. However, he noted that this is tricky, and the simplest method would be for a sale with a carry back of a note. Mr. Roope stated that the property’s affordability covenant could be for longer than 55 years. He explained that the City could put regulatory restrictions on the property to maintain the affordability covenant for longer than the tax credit requires. Mr. Roope stated that the City’s development impact fees including water, sewer, police, parks, etc. are all budgeted to be paid for in the project’s pro forma. Mr. Roope explained that in the 160 projects he has done, he has never defaulted or had a foreclosure. If something does go wrong, the lender and investor would get together and remove the developer so that another developer could be brought in to finish the project. Mr. Roope stated that he issues personal guarantees on all his projects. Additionally, development profits are deferred until all risks are removed from the project. Councilmember Beach asked about the $80,000 value of each parking space. She explained that during the The Pacific Companies’ presentation of their proposal, each parking space was valued at $25,000. Mr. Roope replied that the $80,000 referred to if the cost of building the parking garage was divided by the number of residential units. Councilmember Beach discussed the contingencies in the “sources and uses” document. She noted that the document listed $2 million for construction contingencies and $500,000 for soft costs. She stated that after talking to some industry professionals, she was informed that the numbers were lean and that the construction contingencies should be between $3-8 million. Mr. Roope stated that generally 5% of the project’s cost is the normal contingency for construction, and there is no general standard for soft costs. He added that an $8 million contingency would be 20%, which is very high. Councilmember Beach asked if Mr. Roope was comfortable that the contingencies were accurate. Mr. Roope replied in the affirmative, explaining that he would be on the hook for the guarantees. He noted that because the developer fees are not earned until the project is completed, he viewed them as an additional contingency for the project. Councilmember Beach stated that the architecture and engineering fees were listed at $900,000. She stated that for this project to succeed it needs to be beautiful, high quality, and fit with the City’s aesthetics. After talking with a few experts, she was told that the budget seemed to be too skinny. Mr. Roope stated that he viewed this as a high budget for this type of project. Councilmember Beach asked if Ms. Kern had any comments on Mr. Roope’s answers. Ms. Kern stated that in regards to the contingency fees, the contingency listed in the pro forma of 4.3% of direct costs and 1.1% of direct costs for the soft costs are within the range of normalcy of projects of this level. Ms. Kern stated that in regards to the architecture and engineering fees of $900,000, it translates into 1.9% of direct costs. Burlingame City Council February 5, 2018 Approved Minutes 7 She stated that this is approximately $6,800 per unit. She explained that this is less than what she typically sees. In a San Jose project, the average cost was $21,000 per unit. Mr. Roope stated that they use their in-house design team and therefore don’t have a high overhead cost. Councilmember Ortiz asked Mr. Roope to comment on the impact of requiring prevailing wage on the housing portion of the project. Mr. Roope stated that as a general rule, prevailing wage adds about 25% on average to the cost of construction. In the Bay Area, however, he agrees with Ms. Kern’s assessment of a 15% premium due to prevailing wage. He noted that he is constructing a project in Daly City right now, and a lot of their subcontractors are union. Vice Mayor Colson stated that the affordability covenant was for 55 years, but she was assuming that the developer would need to do a recapitalization or reinvestment project as real estate doesn’t last 55 years without maintenance. She asked what the roll-over mechanism was for that and how it would be financed. Mr. Roope stated that traditionally, affordable housing is financed with tax credits. He stated that the initial compliance period ends at year 15, and at the end of year 15, a new round of tax credits is available. He explained that assets built 15-20 years ago may have some needs. However, because the building code is more stringent now and the quality of products is better, capital needs are much less, so buildings shouldn’t need a major rehabilitation in year 15. He stated that when you get to year 20-25, the tax credits have historically been available for rehabilitation and refinance of the asset. Vice Mayor Colson asked if The Pacific Companies had a thoughtful disposition plan and if they normally hold properties for 55 years or if they sell. Mr. Roope stated that out of 160 projects, they have disposed of two, which were sold to nonprofits. Vice Mayor Colson stated that it sounds like The Pacific Companies have had projects go over their pro forma. She asked if The Pacific Companies would allow staff to review the company’s financial statements. Mr. Roope replied in the affirmative. Councilmember Keighran asked how often affordable housing projects go through maintenance and rehabilitation. Ms. Kern stated that there is a capital replacement reserve that is funded out of the project’s cash flow that will be used for ongoing maintenance. She stated that she has not experienced major needs on new projects within 15 years. Councilmember Keighran asked if capital improvements are needed, do projects have a difficult time obtaining additional tax credits to pay for those improvements. Ms. Kern replied that she has witnessed several successful applications for major rehabilitations. Councilmember Keighran concurred with Councilmember Beach’s concern about the low estimate for architecture and engineering. She noted that in 2015, she voted against The Pacific Companies’ proposal partially because of the lack of architectural detail on the project. Mayor Brownrigg stated that in the current pro forma there are 11 workforce units that are above the 60% AMI. He explained that it was his understanding that the City could work with The Pacific Companies to Burlingame City Council February 5, 2018 Approved Minutes 8 offer preferences to local teachers for those 11 units. Mr. Roope replied in the affirmative, stating that preferences could be offered, they just can’t restrict. Mayor Brownrigg stated that he was asked by a resident why there are senior apartments with two bedrooms. Mr. Roope replied that based on their experience, there is a demand for two-bedroom senior units. Mayor Brownrigg noted that part of the public benefit of the project as a whole is the public park that will be created on Lot F. It will be an asset for the people living there as well as the neighborhood. Mr. Roope noted that the park portion of Lot F will not get transferred—the City will continue to maintain ownership of the park land. Councilmember Keighran asked if the funding gap that Mr. Roope would like the City to provide is $1.85 million. Mr. Roope replied in the affirmative. Councilmember Keighran asked about the request to underground utilities. Mr. Roope stated that he didn’t yet know what it would cost but if it was above $200,000, it would become too expensive to do. He doesn’t know yet if it’s feasible. Mayor Brownrigg opened the item up for public comment. Burlingame resident Mark Burri discussed the importance of prevailing wage and asked the City not to sell the property. David Mauru voiced his support for prevailing wages. He explained that prevailing wage attracts higher skilled workers and helps to fund the apprentice program. James Ruigomez voiced his support for prevailing wages. Former Mayor Nagel stated that she didn’t want the City to sell Lot F. She recommended that the project be constructed using prevailing wage and asked the City Council to underground utilities. Burlingame resident Bobbi Benson discussed design aesthetics that she wanted included in the project such as: solar panels, LEED certification and charging stations for electric vehicles. Former Councilmember Root voiced his support for undergrounding utilities and discussed his concern about the low architecture fees. Burlingame resident Jennifer Pfaff asked City Council not to sell Lot F and voiced her concern about the low architecture fees. At this point, it was close to 7:00 p.m. Mayor Brownrigg stated that the City Council would return to the study session after the close of the regular meeting. The study session was brought back at 7:28 p.m. Burlingame City Council February 5, 2018 Approved Minutes 9 Mayor Brownrigg asked if the financing for the project would be in a special purpose vehicle (“SPV”). Mr. Roope replied in the affirmative. Mayor Brownrigg asked if the SPV had a board of directors and if so, would it be appropriate to ask for the City to have a seat on the board. Mr. Roope replied that the project owner will be a special purpose entity that will consist of general and limited partners. He stated that it is not normal for a city to have a seat on the board. Vice Mayor Colson asked if the new state housing legislation would affect how the project goes through the planning process. CDD Meeker replied that the project would go through the normal planning process. He explained that currently the project is undergoing internal review by various departments, but that he hopes to have it before the Planning Commission later this month. Vice Mayor Colson stated that it is important to note that the City controls the planning process for this project. She explained that if the Planning Commission and/or staff determine that changes need to be made and The Pacific Companies exceeds its $900,000 architecture budget, the developer will have to bear that cost. Mr. Roope replied in the affirmative. Vice Mayor Colson asked if the development budget was just for the housing portion. Mr. Roope replied that the development budget was for both housing and the parking garage. He added that the $46 million in construction costs was just for the housing component. Vice Mayor Colson asked if it was Mr. Roope’s position that if the project had to be done with prevailing wages, the cost would increase by 15%. Mr. Roope replied in the affirmative and explained that it would cost roughly an additional $6 million. Vice Mayor Colson stated that the residual value at the end of the deal is not a part of the developer’s financial analysis. She explained that in a normal real estate pro forma, the property is held for 10 years with a disposition at the end. The disposition is the net present value and that is how the project is priced and valued. However, The Pacific Companies’ pro forma doesn’t include this information and therefore the disposition value is almost impossible to determine. Mr. Roope replied in the affirmative and stated that they hadn’t relied on a disposition value of any kind. Vice Mayor Colson asked if this is the case, has Mr. Roope structured transactions where a city has the first right of refusal to repurchase at a certain strike price. Mr. Roope replied in the negative and explained that he had seen agreements where a nonprofit organization has this option. He added that he didn’t know if there were any legal prohibitions in allowing the City this option but that he had no objections and could research further. Councilmember Beach asked if it was accurate to say that while Mr. Roope works in the realm of affordable housing, he is a for-profit developer. Mr. Roope replied in the affirmative. He explained that The Pacific Companies is a for-profit development organization, but a nonprofit organization will be attached to the project as a partner. Burlingame City Council February 5, 2018 Approved Minutes 10 Councilmember Beach asked if The Pacific Companies do market rate projects. Mr. Roope replied in the affirmative. He added that 85% of The Pacific Companies’ work is affordable housing. They also do some public schools and market rate apartments. Councilmember Beach discussed the new State housing legislation and asked what the impact of the “rule of objective standards” would be on this project. CDD Meeker stated that staff hasn’t fully evaluated the impact. He noted that this project is a little different, as the City is a partner in the project and serving as co- applicant. City Attorney Kane stated that staff is still evaluating the impact of the State legislation and is not yet ready to opine on this matter. Councilmember Beach discussed Ms. Kern’s memorandum from October which reviewed the financial feasibility of this project based on the tax credits. She asked if Ms. Kern was confident with the proposal considering the new tax laws and the market rate of tax credits. Ms. Kern stated that there may be a decreased demand for tax credits as a result of the tax reform measure and corporations having a reduction in their tax obligations. If this occurs, then the pricing of tax credits will be decreased. She explained that the developer had assumed pricing of $1.12 for every dollar of tax credit, but $1 to $1.05 is more realistic. She stated that this will increase the project’s financial gap. Councilmember Keighran discussed the implications of the housing legislation’s “rule of objective standards.” She asked if the City would lose its potential control over the design aesthetics of the project if the City sold Lot F. CDD Meeker replied that staff is still reviewing the impact of the legislation but that he imagines if sold, the City would be in the same situation as it is with any private developer. Mayor Brownrigg stated that the next step for this project would be to go into the planning process. In the course of that process, the Planning Commission will review the design and make any necessary changes. He asked if it was at that point that Mr. Roope would go out for bidding and final costing. Mr. Roope stated that they will do a cost estimate after they get through the planning process, but they won’t have working drawings at that time, which are needed to go out to bid. He explained that working drawings would take two to four months to produce, and contractors would be given 30-45 days to bid out the work. Therefore, he stated that if the planning process took three months, in approximately six to seven months they would have estimates. Mayo r Brownrigg stated that he was trying to understand the process and get to the risk for the City. Mr. Roope stated that the risk for the City wouldn’t start until they close the financing and the disposition actually happens. Mayor Brownrigg agreed with Mr. Roope. He explained that the City’s risk would be if the project was underway and the developer was no longer able to finish the project. However, he stated that this is always a risk. He asked if the financing that Mr. Roope put together has all the capital up front. Mr. Roope replied in the negative. He explained that the lenders and the investors have the capital and as the developer performs on the project, they will be reimbursed upon completion of different milestones. Mayor Brownrigg asked if the capital is in a form of escrow that is callable. Mr. Roope replied in the affirmative. Burlingame City Council February 5, 2018 Approved Minutes 11 Mayor Brownrigg discussed Mr. Roope’s statement that he makes personal guarantees on projects and stated that this is not done in his business world. Mr. Roope explained that he has done this his whole life and career. Vice Mayor Colson asked Mayor Brownrigg to explain what a personal guarantee is. Mayor Brownrigg stated that a personal guarantee is when an individual guarantees that the company will perform, and if it doesn’t, the individual is on the hook to repay all the investment, debt, and employee wages. He stated that this can quickly add up and bankrupt an individual. Councilmember Keighran asked if Mr. Roope’s company was an LLC. Mr. Roope replied that it is a limited partnership. He explained that the property was going to be owned by a limited partnership that will consist of limited and general partners. The limited partners are investors like banks and insurance companies that buy the tax credits, and he is one of the general partners. As a general partner, he has the general liability that comes with those limited partnerships. He stated that the lenders and investors in this project require him to provide personal guarantees to repay their investment or loan if anything goes wrong. Vice Mayor Colson explained that nonprofit developers do make profits on their projects. She stated that they still have developer fees and developer equity. Mr. Roope agreed and explained that the State regulates all the fees that can be charged on a project. He stated that in the realm of affordable housing, the main difference between a for-profit and nonprofit developer, is that for-profit developers pay income tax on profit and nonprofit developers don’t pay income tax. He explained that the tradeoff is that as a for-profit developer he can keep the profits, while a nonprofit can’t keep profits. Councilmember Beach reviewed the timeline Mr. Roope discussed earlier in the meeting. She explained that he had stated that the project would take three months to get through the planning process, two to four months for working drawings, and two months for the contractor. She asked staff if three months was a realistic amount of time for this project to get through the planning process. CDD Meeker replied that three months seemed a little short and that it would more likely be four to six months. He added that it depends on changes requested and how quickly the developer makes the changes. Councilmember Beach stated that if it was six months, it could be about a year before The Pacific Companies breaks ground on this project. Mr. Roope replied in the affirmative. Councilmember Keighran asked what would be built first: the residential portion or the parking garage. Mr. Roope replied that the strong preference was to simultaneously build both portions. He noted that this would mean that the two parking lots are out of service for a few years. Vice Mayor Colson asked about the breakdown of income levels in this project. City Manager Goldman reviewed the 2017 San Mateo County income limits. 1. One bedroom/one bath at 50% AMI is $46,100 for a household of one 2. One bedroom/one bath at 60% AMI is $55,320 for a household of one 3. One bedroom/one bath at 110% AMI is $101,420 for a household of one 4. One bedroom/one bath at 120% AMI is $110,640 for a household of one Burlingame City Council February 5, 2018 Approved Minutes 12 CDD Meeker stated that this is based upon an AMI of $115,300. City Manager Goldman stated that those were the 2017 income limits but she didn’t believe 2018 were available yet. CDD Meeker stated that 2018 numbers would be available in May or June. Vice Mayor Colson asked if when the new income limits come out, if Mr. Roope would re-run the numbers. Mr. Roope replied in the affirmative. Mr. Roope stated that he agreed with Ms. Kern that it is speculated that the tax credit pricing will decrease, which will create an additional financial gap. However, he explained that the 2018 AMIs will likely include a bump, and therefore it will help to minimize the financial gap. Vice Mayor Colson noted that she sits on the Measure K funding committee for the NOFAs. She stated that the City will not be competitive for the funding. This is because they are targeting lower-income units, veterans housing, homeless housing, and transitional housing. Mayor Brownrigg stated that a resident asked whether or not The Pacific Companies would continue to manage the affordability program. Mr. Roope explained that they will hire a management company. The City will be able to sign off on the management company. Mayor Brownrigg asked what happens when a family gets a salary increase and is priced out of an affordable unit. Mr. Roope replied that generally, in affordable housing, the income of the individual living there can go up to 140% AMI before they would be asked to vacate. He stated that in the context of tax credits, this project is technically a mixed-income project. Therefore, if a 60% unit goes over income, then the developer is required to flip a 110% unit (when it becomes available) to a 60% unit. Councilmember Keighran asked what the point of having 60% AMI units, if there is that much flexibility. Mr. Roope explained that the way the rules work is that no one has to vacate if they go above that 60% limit. He stated that it is rare for a 60% unit to find its way to 110%. Councilmember Keighran asked if an individual is in a 110% unit, how much higher their income can go before they would be asked to vacate. Mr. Roope replied that the 110% doesn’t have the 140% rule. The 110% AMI units can have local restrictions that trigger requests to vacate. Mr. Roope then addressed the earlier comments, stating that The Pacific Companies has done many prevailing wage projects. He explained that it is really about the subsidy that you need for a prevailing wage project. He stated that if they were now asked to do the project with prevailing wages, they would need to find additional funds and it would create delays. Mr. Roope stated that he is happy with the union labor that The Pacific Companies does work with but there will be additional costs and delays associated with requiring prevailing wages. Mr. Roope stated that 60% AMI household makes approximately $55,000, and 100% AMI household makes $92,000. He explained that the general hourly wage for a union carpenter with all their benefits is $75, which equates to an annual income of $150,000. Burlingame City Council February 5, 2018 Approved Minutes 13 Mayor Brownrigg stated that he wanted to ensure that the City Council didn’t underestimate the challenges of obtaining an additional $6 million, if prevailing wage is required for the project. Mr. Roope agreed, noting that additional funds could require additional strings, such as deeper income targeting. Chris Collins, a representative from the San Mateo County Plumbers and Pipefitters’ local union, spoke in favor of requiring prevailing wage. Mayor Brownrigg closed public comments. Mayor Brownrigg asked the City Council to first discuss the second question in the staff report: The parking lot structure will be constructed using prevailing wage labor. As a public building that will remain under City control, prevailing wage is required for the garage component of the project. Shall The Pacific Companies be also required to pay prevailing wage to workers involved in construction of the affordable housing development? Councilmember Beach stated that she appreciated Mr. Roope’s clarification that it would be approximately a 15% increase in cost to require prevailing wage on the affordable housing portion of the project. She stated that she had frustration with Mr. Roope’s recent memorandum that stated he was never asked to contemplate prevailing wage. She explained that it was her recollection, that at a previous study session, prevailing wage was discussed, and he had stated that he would make the numbers work. Councilmember Beach stated that she had a hard time getting her head around the fact that this project is on public land, for public benefit, and that it might not be a prevailing wage project. She explained that it struck her as bizarre that the City would be building an affordable housing project and not pay prevailing wage. Councilmember Ortiz explained that he was bothered by how long this project was taking. He stated that the RFP went out in 2014 and details are still being worked out. He explained that he agreed with Councilmember Beach that it seemed wrong to not pay prevailing wage on an affordable housing project. Vice Mayor Colson stated that this is a hard conversation but that it was a mistake that was made 2.5 years ago when the RFP didn’t state that developers had to pay prevailing wage. She stated that since then, the City has always included this language in their RFPs. Vice Mayor Colson listed upcoming City projects that require prevailing wage: the $40 million Topgolf project, $40 million community center, and $20 million parking garage. She stated that this is $100 million in projects with prevailing wage. Vice Mayor Colson stated that the City Council has to figure out a way to build housing for the lower income residents of Burlingame. She explained that it is a difficult decision but the City is 2.5 years into this project and this needs to be moved forward. Accordingly, she stated she was okay with the tradeoff of building affordable housing and not being able to pay prevailing wage on the entire project. She asked Mr. Roope to keep the Council updated on which portions of the project go to union labor. Burlingame City Council February 5, 2018 Approved Minutes 14 Councilmember Keighran stated that she agreed with Vice Mayor Colson. She stated that prevailing wage wasn’t established as a requirement ahead of time. She explained that she had always felt that the AMIs weren’t high enough and therefore there would be financial issues. Lastly, she noted that because the City has other projects where they are paying prevailing wage, she could be a little more flexible with this one. Mayor Brownrigg stated that the City should have specified in the original RFP that prevailing wage was a requirement. He explained that the State has told the City that they are 400 units short of housing for very low (0-30% AMI) and low (30-60% AMI). If this project goes forward, it builds 120 units, which deals with about 1/3 of what the City needs. He stated that the fact that the developer has come back to the City and asked for $1.85 million to cover the financial gap conveys the fact that there is not a lot of extra fat in the pro forma. Therefore, if the City needs to find an additional $4-6 million, the project might disappear. Mayor Brownrigg explained that the project was also providing the City with much-needed additional parking. He explained that the City didn’t have the funds to build a parking garage and therefore this project offered the City not only opportunity to build affordable housing but also to provide a great benefit to the downtown. The City Council next discussed the following question: Shall Parking Lot F be leased or sold to The Pacific Companies (with appropriate contingencies)? City Manager Goldman noted that this referred to the housing side of the project and not the parking structure. Councilmember Ortiz stated that he was in favor of leasing Parking Lot F. He explained that he had thought the City had to sell Lot F to make the project work. However, the best option would be if the City could maintain control of the land. Mayor Brownrigg asked Councilmember Ortiz if the sale was structured so that it carried a seller’s note which accrued interest, and the City is given the right to buy back the land for the price of the note, would this be different. He added that his goal is to ensure that Lot F is on the City’s balance sheet. Councilmember Ortiz replied in the affirmative. Councilmember Keighran stated that she didn’t want to sell Lot F; she wanted the City to maintain ownership and control. Mayor Brownrigg asked Councilmember Keighran the same question he asked Councilmember Ortiz. Councilmember Keighran stated that the Mayor was making an assumption that the land returns. Mayor Brownrigg asked what if it was contractual that it returns. Councilmember Keighran stated that with the way state regulations are she wants control of the property in regards to design. Burlingame City Council February 5, 2018 Approved Minutes 15 Vice Mayor Colson stated that she took a more flexible approach to this because she has watched a lot of institutional real estate investors over the years buy and structure real estate transactions that are goal oriented. She explained that if the goal is to maintain certain rights around the maintenance of the property, these can be structured into a lease or a sale. She stated a lot could be achieved through a contract. Councilmember Beach stated that she was in favor of leasing the property. She explained that she believed this was a standard practice and that she would be open to making it a longer lease if it assisted the developer in getting tax credits. Lastly, she stated that she didn’t want to hamstring future councils and wanted to keep the property within the City’s control. Vice Mayor Colson asked if there are any legal liabilities the City may face as a result of a trip and fall on the property. She explained that if the property was leased, the City is clearly in the chain of title, but if they conveyed it they are not. She asked if there was any risk or differential in selling versus leasing. City Attorney Kane replied that with a properly structured ground lease, you can address some of that risk. However, if the City is the property holder, than they are an attractive defendant. Mayor Brownrigg stated that the preference he was hearing is for a long-term ground lease. He proposed that the City Attorney work with the developer on drafting a ground lease. Vice Mayor Colson stated that if the City enters into a ground lease, staff will need to work through the legal implications with regard to liability and prevailing wage. Mayor Brownrigg stated that at some point the risk of the project being derailed is on the developer. Mayor Brownrigg stated he agreed with Vice Mayor Colson that a financial transaction can be structured so that it reads as a sale but is canceled in the future and returns to the City. He stated that he would be more willing to see it structured this way and thought Councilmember Ortiz agreed. Mayor Brownrigg asked if embedded in the question of sale versus lease is the potential contribution of $1.85 million from the City. City Manager Goldman stated that the potential contribution exists whether the City sells or leases. She also noted that the City Council seemed to be split on the issue of sell versus lease. Vice Mayor Colson suggested that the City Council have an overall conversation and then try to generate a consensus. The City Council next discussed the third question: Pursuant to the Disposition and Development Agreement (DDA) between the City and The Pacific Companies, the City Council must approve the “sources and uses” of all project funding before further work on the project is undertaken. This approval relates to the funding plan at a macro-level, as the details of the project’s finances may change somewhat as project construction nears. Burlingame City Council February 5, 2018 Approved Minutes 16 Councilmember Keighran stated that she had a hard time discussing the “sources and uses” document when the City Council had not decided if they would sell Lot F. She stated that she didn’t want to sell the property under any circumstances. She stated that if she knew there was going to be a ground lease she could be more flexible with the “sources and uses” document. Councilmember Ortiz stated that if the City Council leases Lot F, the current version of the “sources and uses” document is not applicable. Mayor Brownrigg asked why the “sources and uses” document is not applicable if the City Council chooses to lease Lot F. City Mana ger Goldman asked Mr. Roope to comment on whether the lease versus sell determination affects the “sources and uses” document. Mr. Roope stated that if the City chooses to lease, then the $10 million under land acquisition on the “sources and uses” document goes away and the $10 million on the sources side goes away. Nothing else in the budget would change. Mr. Roope explained that the proper way to structure a lease transaction would be to lease the ground at fair market value. If The Pacific Companies did anything other than lease the ground at fair market value, it would trigger the prevailing wage requirement. Additionally, if they lease the property for fair market rent, the developer would need to build in an annual lease payment of approximately $600,000. This lease payment would be paid annually with a $600,000 loan from the City back to him. Mr. Roope stated that another way to structure the lease would be to capitalize the lease payment on a net present value basis in his budget, which would make the “sources and uses” document look similar to its current form. Vice Mayor Colson stated that if the City leased Lot F to Mr. Roope for a dollar, the delta would be $600,000 a year, which over ten years is $6 million. She asked if this is an option so that prevailing wage could be paid. Mr. Roope stated that because a property like this doesn’t have the cash flow to support a lease payment like that, you would prepay the lease for whatever the term is. For example, if the property is worth $10 million and the lease is $600,000 a year, you would take the present value discount to create the total 55 year payments. This would get paid upfront, much like if the property was sold, and the City would loan the developer the money to make this payment. Councilmember Beach stated that she wanted to ground the City Council in the big picture. She thanked the City Council for their thoughtful discussion thus far and was thankful that they were making this momentous decision. She stated this was by far the most important housing development in Burlingame for the foreseeable future. She explained that she has an unwavering commitment to create affordable housing on these lots. Councilmember Beach stated that she wanted to caution everyone that they had a great vision but might not have a great partnership. She explained that City Council has expressed that the affordable housing project is an urgent need for the City. However, she hasn’t felt that same urgency from the developer. She discussed the sense of frustration she was feeling with how slowly the project was moving. It took 2 years and 8 months to have the first opportunity to view the sources and uses document and examine the details of the deal, and the Council should have had this information much sooner. She stated it seemed at best this Burlingame City Council February 5, 2018 Approved Minutes 17 project wouldn’t break ground for one year from now, approximately four years into the project, which is too long. She noted that communication has been poor and some of the biggest tradeoffs we’ve needed to discuss have come tonight, two years eight months into the project. Councilmember Beach stated that she went back and reviewed the July 2015 meeting where The Pacific Companies was chosen. She stated that one of the major tenets of this project, that was celebrated, was that the City would contribute the land and that there would be no additional outlay of public dollars. However, now the City is being asked to contribute $1.85 million in subsidy. She is also concerned that we are now being offered a 5-level parking garage with 90 fewer net-new parking spaces than was originally presented by the developer. She is concerned that after reading Keyser-Marston’s memorandum the financial gap might grow an additional $2 million beyond the current $1.85 million, and that estimate was before the Trump tax cuts. She explained this could lead to further delays in this project and would undermine the urgency with which the City needs affordable housing. Councilmember Beach voiced her concern about aesthetics, the developer’s architecture and contingency budgets, his intent to rush through the planning process in three months, new housing legislation, and prevailing wage. She stated that even though the City might not have financial risk, they have a huge risk in not seeing this needed project come to fruition. Councilmember Beach questioned after considering all of these factors whether they had the right partnership and whether they should break ranks and release a new RFP. She stated that she didn’t want to settle for the deal. She asked if this resonated with her colleagues. Mayor Brownrigg stated that the reason the City Council picked The Pacific Companies’ proposal is because there was more public benefit than in the other proposals. He stated that this was partly because the developer has a style of financing that is unusual and has been commended to the City Council as unique. He stated that he didn’t think there was another developer out there that would build a public parking structure, park, and affordable housing. He stated he didn’t want to search for something that isn’t out there. Additionally, he believed that the Planning Commission would make the project better. Councilmember Ortiz stated that he agreed with the Mayor. He stated that the other proposals did not include the public benefit that the City gets from this project. He explained that it would be disappointing to start this process over. Mayor Brownrigg discussed the San Carlos transit village project. He stated that it was first broached in 2004 and is still underway. Accordingly, these projects do not always come to fruition as quickly as one would like. Councilmember Beach stated that she had full respect for what the City Council decided in 2015 but her concerns were with The Pacific Companies’ performance up until today. Councilmember Keighran stated that she didn’t vote in favor of The Pacific Companies for a variety of reasons including financing. She explained that what was done is done, and the City needs to move forward. She stated that the ball is now in Mr. Roope’s court, either he makes it work or not. She said her priority was Burlingame City Council February 5, 2018 Approved Minutes 18 keeping the land, and she was perturbed over the $1.85 million gap. She stated that it was her understanding that Mr. Roope knew from the beginning that there was going to be clean up. Councilmember Keighran stated that she would have preferred someone who had a lot more local experience. However, she stated that she doesn’t want to do a new RFP and instead the responsibility is on the developer to see if he can make it work. Vice Mayor Colson stated that most real estate deals are extremely complicated and require extensive amounts of negotiations. She stated that they often take months to clarify all the needs. She agreed that it had been way too long but it is what is. She stated that she trusted the staff and Planning Commission to make this project work. Vice Mayor Colson stated that the $1.85 million request is for potential clean up. She stated that one of the benefits of the transaction is that the City has a cap on its clean up because in California it is the property owner’s responsibility to clean up and mitigate contaminations. Vice Mayor Colson stated that another option is to talk to the developer that was second-in-line and ask them if they would be willing to commit if The Pacific Companies fell through. Mayor Brownrigg stated that the delta that was offered from the Public Parking Reserve was justified in two ways. The first was that the developer, upon learning how much it was going to cost to remediate, came back with a podium project so that there would be no underground parking. However, the City Council believed that this would lead to an inferior project. Therefore, the City agreed to contribute to the cleanup if the developer agreed to maintain underground parking. Secondly, he stated that the contribution made sense as a public investment. This is because the City would never be able to afford the desperately needed parking garage on its own. Mayor Brownrigg attempted to sum up the City Council’s direction. He stated that there is a consensus that there should a long-term lease, with one Councilmember saying it was a deal breaker. Next, he stated that the City Council is not happy, but comfortable with the tradeoff that if they get affordable housing and a parking structure, that prevailing wage won’t be required on the affordable housing portion. He explained that he believed the City Council was broadly comfortable with the “sources and uses” document but as Councilmember Keighran pointed out, ultimately this is up to the developer. Councilmember Beach asked about the $1.85 million requested contribution. Mayor Brownrigg stated that Vice Mayor Colson and he were in favor of the contribution. Councilmember Ortiz stated he was too. Vice Mayor Colson asked if the $1.85 million will come out of the parking fund. CDD Meeker replied in the affirmative. Councilmember Beach pointed out that the City was contributing $1.85 million from the parking fund, but the genesis of the need is from something other than parking. Burlingame City Council February 5, 2018 Approved Minutes 19 Councilmember Keighran stated that she wouldn’t agree with the total contribution being $1.85 million because the developer knew there was going to be clean up. However, she explained that she was willing to compromise and contribute $900,000. Vice Mayor Colson stated that the nexus was that they were going to have to go with a four-story parking garage because money was needed for the cleanup. Therefore, by contributing $1.85 million from the parking fund, they can create the additional level of parking. Mayor Brownrigg asked if direction had been given. City Attorney Kane stated that she believed staff knew what they needed to work on, and the developer would need to go back and make some changes. She added that there will need to be significant follow up on the overall feasibility of implementing the direction given. Mayor Brownrigg stated that he believed it is really important for this project to proceed into planning. He stated that this would give the public a chance to weigh in and remove the City Council from being the de facto Planning Commission. CDD Meeker and City Attorney agreed that this was the goal. Councilmember Keighran asked if staff could find out if the larger affordable housing projects in San Mateo County paid prevailing wage. CDD Meeker replied in the affirmative. 5. UPCOMING EVENTS Mayor Brownrigg reviewed the upcoming events taking place in the City. 6. PRESENTATIONS a. GET US MOVING – SAN MATEO COUNTY Councilmember Keighran stated that she would not be participating in this matter as it is a County issue which she has been working on through her position in Supervisor Canepa’s office. Supervisor Pine introduced the Get Us Moving presentation. He stated that Get Us Moving (“GUM”) is a joint effort between the County of San Mateo and the San Mateo County Transit District. He explained that the program consists of extensive outreach to the community and City Councils to gather feedback on the future of public transportation in the County and a potential sales tax on the November 2018 ballot. Supervisor Pine stated that public transportation has an operational challenge in keeping what they have working well and obtaining future capital investments for improvements. Jessie Epstein from the San Mateo County Transit District explained that GUM’s goal is to determine where transportation dollars should be spent. Ms. Epstein reviewed the transportation agencies in the County. • San Mateo County Transit District operates SamTrans bus and paratransit services, manages the Caltrain system , and administers local transportation funding programs. Burlingame City Council February 5, 2018 Approved Minutes 20 • City/County Association of Governments approves countywide plans and strategies to address traffic congestion and receives local, regional, and state funding. • Commute.org collaborates with transit agencies, employers, and cities to promote alternatives to driving alone. Ms. Epstein talked about the projected population growth in San Mateo County. She stated that by 2040, the population is expected to grow by over 900,000. Additionally, paratransit ridership is expected to grow from 320,000 rides in 2010 to over 1 million expected rides in 2040. She added that the County is seeing thousands of new housing units built, and the State Legislature is trying to gear these developments towards public transit hubs. Ms. Epstein reviewed the transportation challenges the County is facing including: • Updating aging systems and infrastructure • Addressing record levels of highway congestion • Separating the Caltrain Corridor from local roads • Increasing Caltrain capacity, frequency, and travel times • Evolving and expanding bus service • Supporting expanded mobility options for seniors, disabled, and low-income residents • Improving access and safety for cyclists and pedestrians • Enhancing first/last mile connections to transit • Incentivizing public transportation and other shared-ride solutions Ms. Epstein reviewed the funding needs of transportation projects in the County including: Caltrain Modernization, with a $400 million share required from San Mateo County, and US 101 Managed Lanes, at a total cost of $500 million. She stated that the County applies for State and Federal grants but these grants often require a local contribution. Ms. Epstein reviewed the work accomplished through the Transportation Authority’s direction and funding. This included the completion of 13 grade separations. However, she noted that there are 29 other crossings in the County that need to be reviewed. Ms. Epstein explained that the State Legislature passed AB 1613, which allows the Transit District Board and the San Mateo County Board of Supervisors to place a ½ cent sales tax on the November ballot. The measure requires 2/3rds approval to pass. It is estimated that this tax would bring in $80 million per year. Ms. Epstein explained that GUM will develop an expenditure plan for how the potential sales tax will be spent based on feedback from the community, technical advisory group, and stakeholder advisory group. She stated that GUM has held a series of public meetings, and has distributed postage pre-paid surveys at city halls and other public buildings. Ms. Epstein stated that the focus of GUM is: • To relieve traffic congestion countywide • Invest in a financially sustainable public transportation system Burlingame City Council February 5, 2018 Approved Minutes 21 • Prioritize environmentally sustainable transportation solutions • Promote economic vitality and economic development • Maximize opportunities to leverage investment from public and private partners • Enhance safety and public health • Invest in repair and maintenance of existing and future infrastructure. Ms. Epstein stated that in June, GUM will go to the Transit Board and the Board of Supervisors with a draft expenditure plan to see if a sales tax should be put on the November ballot. Mayor Brownrigg asked if AB 1613 was created so that the County could breach the sales tax limit. Ms. Epstein stated that the legislation separated this item from the tax cap. 7. PUBLIC COMMENT There were no public comments. 8. CONSENT CALENDAR Mayor Brownrigg asked the Councilmembers and the public if they wished to remove any item from the Consent Calendar. Councilmember Keighran pulled 8h. Councilmember Ortiz made a motion to adopt 8a, 8b, 8c, 8d, 8e, 8f, 8g, 8i, and 8j; seconded by Vice Mayor Colson. The motion passed unanimously by voice vote, 5-0. a. ADOPTION OF CITY COUNCIL MEETING MINUTES JANUARY 16, 2018 City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes of January 16, 2018. b. ADOPTION OF CITY COUNCIL MEETING MINUTES JANUARY 27, 2018 City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes of January 27, 2018. c. OPEN NOMINATION PERIOD TO FILL THREE VACANCIES ON THE PLANNING COMMISSION City Manager Goldman requested Council open the nomination period to fill the three vacancies on the Planning Commission. d. ADOPTION OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL SERVICES WITH MIG FOR THE DEVELOPMENT OF A PARKS MASTER PLAN Parks and Recreation Director Glomstad requested Council adopt Resolution Number 20-2018. Burlingame City Council February 5, 2018 Approved Minutes 22 Vice Mayor Colson thanked the staff for putting this together. She stated that it was helpful to her to read the RFP and proposals as she gained a more robust understanding of the process and project. Councilmember Keighran voiced her appreciation for the additional information in the staff report e. ADOPTION OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A FIVE-YEAR AGREEMENT WITH A THREE-YEAR OPTIONAL EXTENSION WITH LWP CLAIMS SOLUTIONS FOR THIRD PARTY ADMINISTRATION OF THE CITY’S SELF-INSURED WORKERS’ COMPENSATION PROGRAM HR Director Morrison requested Council adopt Resolution Number 21-2018. f. ADOPTION OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT FOR LABOR RELATIONS CONSULTATION SERVICES WITH BURKE, WILLIAMS & SORENSEN, LLP HR Director Morrison requested Council adopt Resolution Number 22-2018. g. ADOPTION OF A RESOLUTION ACCEPTING THE LORTON AVE STORM LINE CLEANING PROJECT, CITY PROJECT NO. 84930 DPW Murtuza requested Council adopt Resolution Number 23-2018. h. ADOPTION OF A RESOLUTION ESTABLISHING AN AUTOMATIC ROTATION FOR ASSIGNMENT TO THE ECONOMIC DEVELOPMENT SUBCOMMITTEE City Clerk Hassel-Shearer requested Council adopt Resolution Number 24-2018. Councilmember Keighran stated that she would be voting against this because historically, the Mayor has the sole authority to assign all subcommittees. She explained that pursuant to the resolution, the Vice Mayor and the third-in-line would automatically be assigned to the Economic Development Subcommittee. She added that the Mayor’s reason for treating the Economic Development Subcommittee differently was because it had more importance in relation to other subcommittees. She explained that she didn’t agree with this and didn’t want to set a precedent that rotations could be created for other committees. Councilmember Ortiz stated that he understood the value of rotating membership on the Economic Development subcommittee and would be voting in favor of it. Councilmember Ortiz made a motion to adopt Resolution Number 24-2018; seconded by Mayor Brownrigg. The motion passed by roll call, 3-2 (Vice Mayor Colson and Councilmember Keighran voted against). i. QUARTERLY INVESTMENT REPORT, PERIOD ENDING DECEMBER 31, 2017 Finance Director Augustine requested Council adopt the Quarterly Investment Report, period ending December 31, 2017. Burlingame City Council February 5, 2018 Approved Minutes 23 j. APPROVAL OF THE CITY’S PARTICIPATION IN THE OPERATION EAGLE VISIT- HOMECOMING 50 YEARS CELEBRATION City Manager Goldman requested Council’s approval of the City’s participation in the Operation Eagle visit homecoming 50 years celebration. Mayor Brownrigg asked staff to be mindful of establishing a date for the joint Planning Commission and City Council meeting so that it doesn’t conflict with this celebration. 9. PUBLIC HEARINGS There were no public hearings. 10. STAFF REPORTS AND COMMUNICATIONS a. ADOPTION OF A RESOLUTION WAIVING REGISTRATION FEES FOR INDIVIDUAL MASSAGE THERAPISTS City Attorney Kane requested Council adopt Resolution Number 25-2018. She explained that the City has a public safety interest in individual massage practitioners registering with the police department. She stated that the City doesn’t want to put barriers in their way, in the form of the current registration fees. Therefore, staff is recommending that the City Council suspend these fees. Mayor Brownrigg opened the item up for public comment. Vice Mayor Colson made a motion to adopt Resolution Number 25-2018; seconded by Councilmember Ortiz. The motion passed unanimously by voice vote, 5-0. 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS a. MAYOR BROWNRIGG’S COMMITTEE REPORT b. VICE MAYOR COLSON’S COMMITTEE REPORT c. COUNCILMEMBER BEACH’S COMMITTEE REPORT 12. FUTURE AGENDA ITEMS There were no future agenda items. Burlingame City Council February 5, 2018 Approved Minutes 24 13. ACKNOWLEDGEMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Parking & Safety Commission, Beautification Commission, Parks and Recreation Commission and Library Board of Trustees are available online at www.burlingame.org. 14. ADJOURNMENT Mayor Brownrigg adjourned the regular meeting at 7:28 p.m. and the study session was adjourned at 9:16 p.m. Respectfully submitted, /s/ Meaghan Hassel-Shearer City Clerk