Agenda - Monday, February 5, 2018 - City of Healdsburg

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Feb 5, 2018 - regarding ag tech opportunities and business initiatives in Healdsburg and attended the Russian. River Wat
CITY OF HEALDSBURG CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY REGULAR MEETING AGENDA City Hall Council Chamber 401 Grove Street Healdsburg, CA 95448 (707) 431-3317

Meeting Date: Time: Date Posted:

February 5, 2018 6:00 PM February 2, 2018

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1. CALL TO ORDER/ROLL CALL A. Pledge of Allegiance B. Approval of Agenda C. Approval of Minutes – December 18, 2017 and January 8, 2018 Regular Meetings 2. ANNOUNCEMENTS/PRESENTATIONS A. Farm to Pantry Update 3. COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS 4. CITY MANAGER REPORTS A. Housing Programs Update - Housing Land Trust 5. PUBLIC COMMENTS ON NON AGENDA ITEMS This time is set aside to receive comments from the public regarding matters of general interest not on the agenda, but related to City Council/RSA business. Pursuant to the Brown Act, however, the City Council cannot consider any issues or take action on any requests during this comment period. Speakers are encouraged to limit their comments to 3 minutes maximum so that all speakers have an opportunity to address the City Council/RSA Board. Members from the public wishing to speak on a Consent Agenda item should notify the Mayor during Public Comments.

6. CONSENT CALENDAR The following items listed on the Consent Calendar are considered routine and action will be taken by the City Council by a single motion. A Councilmember, staff or the public may request that an item be removed from the Consent Calendar and action taken separately. In the event an item is removed, it may be considered as the first scheduled item in the agenda under Old or New Business.

A. Amendment No. 1 to the Professional Services Agreement with BKF Engineers for the design of a replacement Water Storage Tank Adopt a Resolution approving Amendment No. 1 to the professional services agreement with BKF Engineers for the design of the Sunset Tank Replacement Project, increasing the not to exceed amount to $78,500, authorizing the City Manager to execute the amendment and approve change orders not to exceed $6,600

City Council/RSA Regular Meeting Agenda February 5, 2018 Page 2

B. Approve the audited financial statements for the fiscal year ended June 30, 2017 By motion, approve the fiscal year 2016-17 audited financial statements based on an audit performed in accordance with Government Auditing Standards C. 2018 Community Benefit Grant Program Adopt a Resolution approving Community Benefit Grants for the 2018 program year 7. PUBLIC HEARINGS None. 8. OLD BUSINESS A. Community Housing Committee Work Plan Update and Recommendation to adopt revised Housing Action Plan Receive report and by Resolution adopt the revised Housing Action Plan 9. NEW BUSINESS A. Approval of an Inclusionary Housing Agreement for the Farmstand Subdivision, 979 and 1069 Grove Street Adopt a Resolution approving an Inclusionary Housing Agreement between the City and Farmstand Project LLC for four affordable, inclusionary rental units as part of the Farmstand Subdivision located at 979 and 1069 Grove Street B. Authorized Positions Listing Update 1. Adopt a Resolution amending the FY 2017-18 budget for staffing changes; and 2. Adopt a Resolution rescinding Resolution No. 126-2017 and reestablishing the Authorized Positions Listing 10. WRITTEN COMMUNICATIONS A. Written Communication from Planning and Building Director DeRosa regarding Planning Commission actions taken on January 23, 2018 No action required. B. Written Communication from Community Services Director Themig regarding Parks and Recreation Commission actions taken on January 10, 2018 No action required.

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11. CLOSED SESSIONS None. 12. ADJOURN CITY COUNCIL / RSA MEETING

SB 343 - DOCUMENTS RELATED TO OPEN SESSION AGENDAS: Any writings or documents provided to a majority of the City Council/Redevelopment Successor Agency Board regarding any item on this agenda after the posting of this agenda and not otherwise exempt from disclosure, will be made available for public review in the City Clerk's Office located at City Hall, 401 Grove Street, Healdsburg, during normal business hours. If supplemental materials are made available to the members of the City Council/Redevelopment Successor Agency Board at the meeting, a copy will be available for public review at the City Hall Council Chambers, 401 Grove Street, Healdsburg, CA 95448. These writings will be made available in appropriate alternative formats upon request by a person with a disability, as required by the Americans with Disabilities Act. DISABLED ACCOMMODATIONS: The City of Healdsburg will make reasonable accommodations for persons having special needs due to disabilities. Please contact Maria Curiel, City Clerk, at Healdsburg City Hall, 401 Grove Street, Healdsburg, California, 4313317, at least 72 hours prior to the meeting, to ensure the necessary accommodations are made.

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CITY OF HEALDSBURG CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY REGULAR MEETING MINUTES December 18, 2017 City Hall Council Chamber 401 Grove Street, Healdsburg .

Mayor/Chairperson McCaffery called to order the concurrent meeting of the City Council and Redevelopment Successor Agency of the City of Healdsburg at approximately 6:00 P.M. with the following Councilmembers present/absent: Present: Councilmembers/: Gold, Hagele, Mansell, Naujokas, and Mayor McCaffery Board Members Absent: Councilmembers/: None Board Members APPROVAL OF AGENDA On a motion by Councilmember Gold, seconded Vice Mayor Mansell, approved the December 18, 2017 City Council and Redevelopment Successor Agency meeting agenda as submitted. The motion carried on a unanimous voice vote. (Ayes 5, Noes, 0 Absent – None) APPROVAL OF MINUTES On a motion by Councilmember Naujokas, seconded by Councilmember Gold, approved the November 6, 2017 regular meeting and the November 20, 2017 special meeting minutes, as submitted. The motion carried on a unanimous voice vote. (Ayes 5, Noes 0, Absent – None) ANNOUNCEMENTS/PRESENTATIONS None. COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS Councilmember Gold reported she attended a Posada Navideña at the Foss Creek Court apartments on Saturday. Councilmember Hagele reported he attended the North Coast Railroad Authority Board meeting in Novato on December 13th and attended via teleconference the NCPA Finance Committee and NCPA Commission meetings.

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

CALL TO ORDER/ROLL CALL

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Councilmember Naujokas reported that on December 7th he attended the Habitat for Humanity event and the Transportation Advisory Commission meeting, on December 8th he met with David Hill regarding the Mill District Project, on December 12th and 13th he attended the Senior Citizens Advisory Committee meetings, and on December 18th he met with Dustin Valette regarding his latest project. Councilmember Naujokas further reported he met with Tim Norbert regarding ag tech opportunities and business initiatives in Healdsburg and attended the Russian River Watershed Association meeting. Vice Mayor Mansell reported on the joint meeting with the Planning Commission regarding design review guidelines and added that she met with Ray Holley regarding the coverage of the Mayor and Vice Mayor selection. Vice Mayor Mansell further reported that she met with Dustin Valette, spoke with former Councilmember Gary Plass, attended the Sonoma County Transportation Authority meeting, went to the Farmers Market party, spoke with the real estate agent of 119 North Street, attended the Senior Center celebration and commented she got a copy of the SDAT proposal. Mayor McCaffery also commented on the joint meeting with the Planning Commission, reported on the increase in library hours effective in April, and added he attended the Marin Sonoma Mosquito and Vector Control District Board meeting and toured the waste water treatment plant. CITY MANAGER REPORTS – HEALDSBURG AVENUE IMPROVEMENTS Jim Winters, GHD, gave an update on the Healdsburg Avenue Improvements project, as follows: 

Sewer - all the pipes have been connected and the bypass has been removed - remaining work includes raising iron after paving



Water - all pipes are in the ground and remaining work includes pressure testing, disinfection and tie-in



Storm drain – all pipes are in the ground and remaining work includes setting box lids to grade during concrete flat work

Future work will include: bio-retention basins, concrete flatwork, paving, and landscaping; all conditioned on the weather. Discussion ensued regarding the bio-retention basins required by the Regional Water Quality Control Board, paving timeline and anticipated disruption, the landscaping plans for the center of the roundabout and the feasibility to include public art. Vice Mayor Mansell expressed interest in receiving monthly updates.

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

City Council/RSA Regular Meeting Minutes December 18, 2017 Page 2

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City Council/RSA Regular Meeting Minutes December 18, 2017 Page 3

PUBLIC COMMENTS ON NON AGENDA ITEMS

CONSENT CALENDAR On a motion by Councilmember Naujokas, seconded by Councilmember Hagele, approved the Consent Calendar, as follows: A. DISBURSEMENT REPORT FOR THE MONTH OF NOVEMBER 2017 By motion, approved the disbursement report for November 2017, as submitted. (Ayes 5, Noes 0, Absent – None) B. ROTARY CLUB – ALCOHOL CONSUMPTION REQUEST By motion, approved the Rotary Club of Healdsburg Sunrise's request to allow consumption of alcohol at the Healdsburg Community Center Field during the post-race luncheon of the Healdsburg Bicycle Tour on May 12, 2018. (Ayes 5, Noes 0, Absent – None) C. FY 2018/19 COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS Adopted Resolution No. 121-2017 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG APPROVING AN APPLICATION FOR FY 2018-19 COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING IN THE AMOUNT OF $100,000 FOR THE FOSS CREEK PATHWAY IMPROVEMENTS, SEGMENTS 7 & 8 AND AUTHORIZING THE CITY MANAGER TO EXECUTE RELATED APPLICATIONS AND AGREEMENTS.” (Ayes 5, Noes 0, Absent – None) D. SORRENTO DEVELOPMENT ART INSTALLATION Adopted Resolution No. 122-2017 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG APPROVING THE INSTALLATION OF DONATED ARTWORK PROVIDED BY THE VOIGT FOUNDATION FOR SORRENTO PARK, APPROVING A MEMORANDUM OF UNDERSTANDING WITH THE VOIGT FAMILY SCULPTURE FOUNDATION, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE MOU.” (Ayes 5, Noes 0, Absent – None) The motion to approve the Consent Calendar carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None)

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

Tim Unger commented about the content of a posting on Ray Holley's Facebook page regarding proposing a new rule at Healdsburg City Hall. He opined the Council should step up and do something about it.

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City Council/RSA Regular Meeting Minutes December 18, 2017 Page 4

PUBLIC HEARINGS

OLD BUSINESS – FITCH MOUNTAIN PARK AND OPEN SPACE PRESERVE PUBLIC ACCESS IMPROVEMENT DESIGN Parks Superintendent Licea presented the staff report noting that before the City Council is consideration of a Professional Services Agreement (PSA) with Prunuske Chatham, Inc. (PCI) to prepare regulatory compliance, design and construction drawings for the Fitch Mountain Park and Open Space Preserve access improvements in the amount not to exceed $149,830. As required by the Management Plan to provide access to the preserve, improvements will include: parking lot improvements, new trailhead, connector trail to Fitch Mountain trail and signage. Councilmember Gold opined the cost to design the access improvements was excessive. Maggie Jensen, PCI, in response to Council’s inquiries, elaborated on the scope of work (topographic survey, geotechnical engineering, structural engineering, hydraulics and hydrology for all the storm water, ADA compliance, bid specifications and construction estimates, etc.) and the regulatory compliance reporting that will be done as part of the project, which justified the proposal amount. Community Services Director Themig noted that the cost to design the Healdsburg Ridge improvements was $84,000 and that amount did not include construction documents. Discussion ensued regarding whether interns could be used to lower the costs, the process followed to select PCI, timing and potential funding sources for the construction of the improvements, and whether the cost for the trail improvements could be reduced by using volunteers. Public Comments Ted Calvert stated he was supportive of the project with one amendment, the relocation of the dog park. Councilmember Gold suggested putting the design proposal out to bid to see what other proposals are received. Vice Mayor Mansell expressed concern about designing something so elaborate that it will cost another million to construct. Discussion ensued regarding the requirement that the City provide accessibility and other funding priorities.

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

None.

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On a motion by Councilmember Hagele, seconded by Councilmember Naujokas, adopted Resolution No. 123-2017 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH PRUNUSKE CHATHAM INC. IN THE AMOUNT OF $149,830 TO PREPARE REGULATORY COMPLIANCE, DESIGN AND CONSTRUCTION DRAWINGS FOR THE FITCH MOUNTAIN PARK AND OPEN SPACE PRESERVE ACCESS IMPROVEMENTS; AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT ON THE CITY’S BEHALF INCLUDING AMENDMENTS UP TO 10% OF THE ORIGINAL AGREEMENT; AND APPROVING A BUDGET AMENDMENT TO THE FY 2017-18 BUDGET ALLOCATING AN ADDITIONAL $54,000 FROM THE COMMUNITY SERVICES CAPITAL IMPROVEMENT FUND TO THIS PROJECT.” The motion carried on a roll call vote with Councilmember Gold dissenting. (Ayes 4, Noes – Gold, Absent – None) NEW BUSINESS – MORATORIUM ON THE RETAIL SALE OF FIREARMS Planning and Building Director DeRosa provided background information on the current regulations pertaining to firearms and reviewed the proposed urgency ordinance noting that if adopted it would implement a 45 day moratorium on the location of new retail gun establishments in Healdsburg. This would allow staff to study the most appropriate location for retail gun establishments and whether the regulations are appropriate. Councilmember Naujokas inquired if there was legal exposure by adopting the proposed urgency ordinance. In response to Councilmember Naujokas’ inquiry, City Attorney Zutler stated the Government Code provides for the action being proposed by staff. Discussion ensued regarding whether the current regulations include inventory storage requirements. Scott Gabaldon addressed Council regarding his business plan which included, in addition to sale of firearms, a space for laser training for law enforcement and children education. Mr. Gabaldon stated gun stores are regulated to death by the Department of Justice and added he was confused as to why the moratorium was being considered, when his business is currently allowed at the proposed location. Bruce Abramson expressed concern about having that kind of use in the downtown area and the crimes that occur near gun stores. He opined industrial zones would be more appropriate. Discussion ensued regarding the need to study the issue and address the concerns expressed by both sides and for staff to come back with recommendations.

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

City Council/RSA Regular Meeting Minutes December 18, 2017 Page 5

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City Council/RSA Regular Meeting Minutes December 18, 2017 Page 6

Planning and Building Director DeRosa clarified that in regards to the process, staff did not have Mr. Gabaldon’s contact information until last week, or else, he would have been notified of the proposed urgency ordinance much earlier. On a motion by Councilmember Gold, seconded by Vice Mayor Mansell, adopted Ordinance No. 1170 entitled “AN INTERIM URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG ESTABLISHING A TEMPORARY MORATORIUM ON RETAIL ESTABLISHMENTS SELLING FIREARMS.” The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) NEW BUSINESS - REPLACEMENT OF POLICE BODY WORN CAMERAS Sergeant Castaneda presented the staff report regarding the need to replace the Police Department’s field staff body worn cameras. The current provider, AXON Enterprises, has two agreement options: a 3 year license and storage option for $42,096; or a five year license, storage and equipment for $98,547. Staff recommends the 5 year lease option as it provides for complete new equipment at signing of contract, at year 2.5 and the 5 year mark, plus spare cameras and mounts in the event that one of the cameras breaks. In response to Councilmember Naujokas inquiry, staff discussed the differences between the two options noting that the AXON camera is the best product and they provide the best service. Tim Unger opined the five year agreement is a better deal. On a motion by Vice Mayor Mansell, seconded by Councilmember Gold, adopted Resolution No. 124-2017 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH AXON ENTERPRISES FOR THE REPLACEMENT OF BODY WORN CAMERAS, AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT ON BEHALF OF THE CITY, AND INCREASING APPROPRIATIONS BY $9,300.” The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) NEW BUSINESS - 2017-18 MID-YEAR BUDGET REVIEW AND BUDGET AMENDMENTS Assistant City Manager Ippoliti gave an overview on government finance noting that the City has many funds, each with a different purpose and the funds cannot be comingled.

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

In response to Council’s comments, City Attorney Zutler clarified that the proposal is unrelated to the individual applicant as the City is exercising its police power in regards to a land use matter.

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City Council/RSA Regular Meeting Minutes December 18, 2017 Page 7

Discussion ensued regarding the desire to look at options to address the pension unfunded liability and of investing the pension stabilization fund locally. Assistant City Manager Ippoliti gave an overview of the Water, Wastewater, Electric, and Community Services Funds noting that all the Funds are meeting the Council adopted reserve policies and operational expenses as well as bond covenants, if any. Ms. Ippoliti also gave an overview of the FY 2017-18 General Fund revenue and expenditures as of October 31st noting that based on the information available as of October 31st both are on target. Assistant City Manager presented the proposed FY 2017-18 budget amendments, as follows:

General Fund General Fund General Fund General Fund General Fund Public Safety Fund Wastewater Capital Fund Electric Capital Fund Gen Capital Replacement Fund Community Services Fund CS Capital Fund Community Services Fund Streets Fund Drainage Fund Water Fund Wastewater Fund

FY 2017-18 136,697 50,000 44,000 44,000 30,000 45,000 (950,000) (950,000) (1,900,000) (525,135) (525,135) 8,000 15,435 15,435 15,435 15,435

Transfers-out - fund street maintenance Police - Overtime Police - Contracted Services - LHMP Grant Revenue - LHMP Community Survey Transfer to Vehicle Fund - Pumper Remove transfer to Gen. Capital Replacement Remove transfer to Gen. Capital Replacement Transfers occurred in FY 2016-17 Unfund transfer to CS Capital Fund Unfund transfer to CS Capital Fund Upgrade Park Caretaker Position to II Add Public Works Inspector position Add Public Works Inspector position Add Public Works Inspector position Add Public Works Inspector position

Ms. Ippoliti noted that even with the proposed budget amendment the total fund balance in the General Fund is $7.5 million, with an unrestricted, unreserved fund balance of $370,082. Discussion ensued regarding the amount of police overtime and the implications of unfunding the Community Services capital project.

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

Assistant City Manager Ippoliti provided a summary of the FY 2016-17 General Fund revenue and expenditures and answered Council’s questions regarding property taxes, and fines and collections. Ms. Ippoliti noted that at year end the General Fund had an unrestricted, unreserved fund balance of $1,192,321, a $3,851,951 fund reserve policy and a $3,104,144 pension stabilization reserve.

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Public Comments

In response to the inquiries, Assistant City Manager Ippoliti stated she was most concerned with the aging infrastructure. Regarding the total legal costs, the numbers shown were focused on the General Fund and clarified that there are legal costs allocated to the other Funds. Ms. Ippoliti added the overtime is calculated into the rate that is paid to PERS. City Manager Mickaelian discussed the intent of the survey to poll the citizens on how address community wide issues and level of services. Discussion ensued regarding whether there were incentives for departments to not spend the entire budget, future development projects, and trends on sales taxes. On a motion by Councilmember Gold, seconded by Councilmember Hagele, adopted Resolution No. 125-2017 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG AMENDING THE FISCAL YEAR 2017-18 BUDGET.” The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) On a motion by Councilmember Hagele, seconded by Councilmember Naujokas, adopted Resolution No. 126-2017 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG RESCINDING RESOLUTION NO. 38-2017 AND REESTABLISHING THE LIST OF AUTHORIZED POSITIONS.” The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) NEW BUSINESS - UPDATE ON COMMISSION/COMMITTEE VACANCIES City Clerk Curiel gave an update on the recruitment undertaken to fill the vacancies on the Parks and Recreation Commission (PRC), Transportation Advisory Commission (TAC) and Senior Citizens Advisory Commission (SCAC) noting that by the deadline of December 8 th, eight new applications were received for the PRC, three for SCAC, and two for TAC. The incumbents on PRC and SCAC are requesting re-appointment and the incumbent on TAC is not. Following a brief discussion regarding whether some type of compensation was ever provided to commissioners, on a motion by Mayor McCaffery, seconded by Councilmember Naujokas formed the following subcommittees to interview the applicants: (1) Councilmember Hagele and Vice Mayor Mansell - Parks and Recreation Commission; (2) Mayor McCaffery and Councilmember Naujokas - Senior Citizens Advisory Commission; and (3) Councilmembers

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

Tim Unger inquired about: (1) the areas of most concern; (2) the total amount spent of legal fees including settlement agreements and court cases; (3) what the survey would entail; and (4) the police overtime and the impact on the pension calculation.

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City Council/RSA Regular Meeting Minutes December 18, 2017 Page 9

Gold and Naujokas - Transportation Advisory Commission. The motion carried on a unanimous voice vote. (Ayes 5, Noes 0, Absent – None)

Following a brief discussion regarding the positions on the various boards and commissions, on a motion by Mayor McCaffery, seconded by Councilmember Hagele, made the following appointments to the various Boards and Commissions for 2018: Board/Commission/Committee Healdsburg Library Advisory Board Senior Advisory Commission Liaison Economic Development Steering Committee Northern California Power Agency (NCPA) Transmission Agency of Northern California (TANC) Redwood Empire Municipal Insurance Fund (REMIF) Mayors’ and Councilmembers’ Association City Selection Committee Association of Bay Area Governments (ABAG) Sonoma County Transportation Authority/ Regional Climate Protection Authority Chamber of Commerce Board Marie Sparks Volunteer of the Year Com. League of California Cities General Assembly Mayors’ and Councilmembers’ Legislative Committee Transportation Adv. Commission Liaison Health Action Committee Marin/Sonoma Mosquito & Vector Control Dist. Sonoma County Waste Management Agency Healdsburg High School Scholarship Committee

Representative Councilmember McCaffery Councilmember Naujokas Councilmember Hagele, Representative Councilmember Gold, Alternate Councilmember Hagele, Commissioner Councilmember Naujokas, Alternate Councilmember Hagele, Commissioner Councilmember Naujokas, Alternate Councilmember McCaffery, liaison (staff has been appointed as the representative) Mayor Mansell, representative Councilmembers alternates Councilmember Gold, Delegate Mayor Mansell, Representative Councilmember Naujokas, Alternate Councilmember Naujokas Mayor Mansell Councilmember Naujokas, Delegate Councilmember Hagele, Alternate Councilmember Naujokas, Representative Councilmember Gold, Alternate Councilmember Naujokas Councilmember Gold, Representative Councilmember Naujokas, Alternate Councilmember McCaffery Public Works Director, Representative Mayor Mansell, Alternate Mayor Mansell and Vice Mayor Hagele

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

NEW BUSINESS - APPOINTMENTS OF COUNCILMEMBERS TO VARIOUS BOARDS AND COMMISSIONS FOR 2018

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Russian River Watershed Association

Northern Sonoma County Air Pollution Control District Board of Directors

Councilmember Naujokas, Representative Councilmember McCaffery and Public Works Director, Alternates Councilmember Gold, Representative Mayor Mansell, Alternate

Oversight Board for the Redevelopment Successor Agency

Councilmember McCaffery

The motion carried on a unanimous voice vote. (Ayes 5, Noes 0, Absent – None) Following discussion regarding the appointment of a Council representative on the renewed Healdsburg Tourism Improvement Board, it was Council’s consensus to appoint Councilmember Gold as the City Council’s representative. The matter would be agendized for Council ratification at the next meeting. WRITTEN COMMUNICATIONS The City Council received the report on the actions taken by Community Housing Committee at its December 11, 2017 meeting and the Transportation Advisory Commission at its December 7, 2017 meeting. CLOSED SESSIONS None. ADJOURNMENT There being no other City Council business to discuss, the meeting was adjourned at approximately 9:02 P.M. APPROVED:

ATTEST:

__________________________________ Shaun F. McCaffery, Mayor

___________________________________ Maria Curiel, City Clerk

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Minutes Acceptance: Minutes of Dec 18, 2017 6:00 PM (Approval of Minutes)

City Council/RSA Regular Meeting Minutes December 18, 2017 Page 10

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CITY OF HEALDSBURG CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY REGULAR MEETING MINUTES January 8, 2018 City Hall Council Chamber 401 Grove Street, Healdsburg .

Mayor/Chairperson Mansell called to order the concurrent meeting of the City Council and Redevelopment Successor Agency of the City of Healdsburg at approximately 6:00 P.M. with the following Councilmembers present/absent: Present: Councilmembers/: Gold, Hagele, McCaffery, Naujokas, and Mayor Mansell Board Members Absent: Councilmembers/: None Board Members Mayor Mansell recognized former Mayor McCaffery for his service as Mayor during 2017 and presented him with a plaque of appreciation. Individual Councilmembers reflected on Mayor McCaffery's leadership and hard work during his term as Mayor. APPROVAL OF AGENDA The agenda was revised to pull Item C off the Consent Calendar for discussion. On a motion by Councilmember McCaffery, seconded Vice Mayor Hagele, approved the January 8, 2018 City Council and Redevelopment Successor Agency meeting agenda as revised. The motion carried on a unanimous voice vote. (Ayes 5, Noes 0, Absent – None) APPROVAL OF MINUTES On a motion by Councilmember McCaffery, seconded by Councilmember Gold, approved the November 20, 2017 regular meeting, the December 1, 2017 special meeting and the December 4, 2017 regular meeting minutes, as submitted. The motion carried on a unanimous voice vote. (Ayes 5, Noes 0, Absent – None) ANNOUNCEMENTS/PRESENTATIONS – HEALTH ACTION Ariel Kelley and Beth Dadko reviewed the history of Health Action and their accomplishments and initiatives to date and gave an overview of the Portrait of Sonoma County, Health Action’s

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

CALL TO ORDER/ROLL CALL

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 2

Dr. Dave Anderson informed Council about the Hearts of Sonoma: Cardiovascular Risk Reduction Initiative to provide blood pressure screenings with the goal of reducing cardiovascular disease by making people aware of the health risks of having high blood pressure. Jenny Levine Smith informed Council about the Cradle to Career Initiative and the activities and programs and discussed the importance of pre-school education. A preschool fair is scheduled for January 20th to provide information on preschool options in Healdsburg. Barbara Epstein, AAUW, talked about their involvement with Health Action and the collaborative effort on the Cradle to Career initiative. Leticia Romero gave an overview of the make-up and purpose of the Comité and their participation in the local Health Action chapter initiatives. Ariel Kelley informed Council of other services that are being provided by Corazón Healdsburg and discussed future initiatives such as a smoke free multi-unit housing ordinance that they would like to partner with the City to develop to reduce the exposure to second hand smoke. Council thanked the presenters for the information presented and the services being provided. INTRODUCTION OF PUBLIC WORKS AND TRANSPORTATION DIRECTOR City Manager Mickaelian introduced Larry Zimmer, the newly appointed Public Works and Transportation Director. Larry Zimmer spoke about his previous employment and experience and thanked the City for the opportunity. COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS Councilmember Naujokas reported that: he met with Jessica Bangs regarding the pedicab proposal; participated in the interviews of the applicants for the Transportation and Senior Advisory Commissions; and attended the Saturday social event at the Senior Center. Councilmember McCaffery reported the interviews of the Senior Citizens Advisory Commission went well and added that he met with representatives from COTS and Reach For Home and City Manager Mickaelian regarding homeless shelter services.

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

Chapters and Framework for Action. Strategies in the Framework include: a long and healthy life, educational attainment and a comfortable standard of living.

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 3

Vice Mayor Hagele reported that he and Mayor Mansell interviewed the Parks and Recreation Commission applicants and that he would be attending an NCRA meeting on Wednesday. Mayor Mansell reported she participated in an impromptu singing event at the Plaza gazebo and interviewed the Parks and Recreation applicants. Mayor Mansell commented on the SDAT proposal. CITY MANAGER REPORTS None PUBLIC COMMENTS ON NON AGENDA ITEMS Tony Geraldi invited the Council to attend the 72nd Miss Sonoma County Scholarship competition scheduled for March 3rd in Rohnert Park. Emily Wong, Sonoma County Outstanding Teen, spoke about her involvement and appearances throughout Sonoma County during last year. Denise Hunt, SDAT Steering Committee chair, informed Council that Healdsburg had been awarded the 2018 AIA design assessment program which will focus on sustainability. Richard Burg, SDAT Steering Committee co-chair, discussed the SDAT program which includes two visits to Healdsburg and invited everyone to participate. He thanked the City Council for the funding contribution. Russ Messing read a poem titled “You Choose.” Merrilyn Joyce stated she was feeling hopeful with the SDAT visit and what it will mean to Healdsburg and cited the book titled “Community: The Structure of Belonging”, about learning how we are together as community, sustainably. CONSENT CALENDAR Item C was pulled from the Consent Calendar for discussion. On a motion by Councilmember McCaffery, seconded by Councilmember Naujokas, adopted the revised Consent Calendar as follows:

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

Councilmember Gold reported she attended the meeting of the business advisory group regarding the impact of the roundabout on their businesses and the meeting of the HTID Board noting that District Development funds were allocated to Healdsburg Jazz and Art After Dark events.

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 4

Adopted Resolution No. 1-2018 entitled “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG CONDITIONALLY AWARDING THE 2017 GAUNTLETT WELL NO. 2 PUMP REPLACEMENT CONTRACT TO GROUNDWATER PROTECTION SERVICES, INC. FOR AN AMOUNT OF $61,153.15, AUTHORIZING THE CITY MANAGER TO EXECUTE THE CONTRACT AND CHANGE ORDERS UP TO 15% OF THE CONTRACT AMOUNT, AND AMENDING THE FISCAL YEAR 201718 BUDGET BY $70,326.” (Ayes 5, Noes 0, Absent – None) B. RATIFICATION - HEALDSBURG TOURISM IMPROVEMENT DISTRICT BOARD APPOINTMENT By motion, ratified the appointment of Councilmember Gold to the Healdsburg Tourism Improvement District Board for 2018. (Ayes 5, Noes 0, Absent – None) C. POLYSTYRENE FOOD TAKE-OUT CONTAINERS Item was removed from the Consent Calendar for discussion. D. REPORT PURSUANT TO GOVERNMENT CODE SECTION 65858(D) - FIREARM SALES INTERIM ORDINANCE ON DECEMBER 18, 2017 By motion, issued a report on the measures taken to alleviate the condition which led to the adoption of the interim firearm sales ordinance and directed the City Clerk to post the status report in a public place at City Hall and the City’s website. (Ayes 5, Noes 0, Absent – None) RESOLUTION IN SUPPORT OF SB 705 TO BAN STYROFOAM CONTAINERS Councilmember Gold thanked Council for considering adopting a resolution in support of SB 705 and added that she asked to pull the item from Consent to discuss how to respond to Senator Allan’s request regarding the level of interest on banning Styrofoam locally and designating a point person to receive information. Councilmember Gold volunteered to be the designated point person. Following a brief discussion on the request and Council’s interest to reduce waste overall, Councilmember McCaffery made a motion to: (1) adopt Resolution No. 2-1018 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG SUPPORTING THE ENACTMENT OF SB 705, STATEWIDE LEGISLATION THAT PHASE-OUT THE USE OF POLYSTYRENE FOAM TAKE-OUT CONTAINERS STATEWIDE;” and (2) designated Councilmember Gold as the point person to receive information on the proposal. The

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

A. 2017 GAUNTLETT WELL NO. 2 PUMP REPLACEMENT PROJECT

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 5

motion was seconded by Councilmember Gold and carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) PUBLIC HEARINGS

OLD BUSINESS – RECONSIDERATION OF AGREEMENT WITH MIG, INC. FOR THE HEALDSBURG AVENUE IMPROVEMENT STUDY Senior Engineer Landeros recalled that on October 2, 2017 Council approved a Professional Services Agreement with MIG, Inc. in the not to exceed amount of $437,010 for the Healdsburg Avenue Improvement Study. On November 20, 2017, Council voted to agendize reconsideration of the agreement. Senior Engineer Landeros discussed Council’s options and the fiscal impacts of rescinding the prior approval of the agreement. Mukul Malhotra, MIG, provided background information on MIG's experience and elaborated on what “complete streets” design means and noted that as part of the study, MIG would be conducting an analysis of the current conditions and providing strategic and context sensitive solutions. Mr. Malhotra described the project process and community and stakeholder engagement that will be undertaken and elaborated on MIG’s expertise and ability to deliver a meaningful project. Discussion ensued regarding the requirements of the One Bay Area Grant; whether the SDAT outreach process could replace some of the outreach planned as part this project; whether there were other grant opportunities for construction of the improvements; how the variables would be measured, i.e. reduction of drainage water to Foss Creek, the advantages of phasing the project and how the immediate road repairs (pot holes) would addressed and the time frame to complete the improvements. Senior Engineer Landeros stated temporary repairs would be done as needed. Further discussion ensued regarding the cost to repave Healdsburg Avenue and whether the study should be undertaken at this time since it is uncertain whether funding would be available to do the improvements. Public Comments Bruce Abramson inquired if the City was committed to reducing the traffic lanes from 5 to 3, which would cause traffic problems and suggested waiting until the roundabout is completed and more demographics to determine whether this is needed.

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

None.

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 6

Ariel Kelley spoke in support of proceeding with the study at this time to create a plan for the north area.

Mark McMullen spoke in support of undertaking the study at this time. Tim Unger suggested that the scope of the agreement be reduced to only do the environmental review needed for the grant and wait for the information that will be gleaned from the SDAT study to make an informed decision on whether to proceed with the study. Staff answered the public’s inquiries, noting that it is not a foregone conclusion that the lanes would be reduced to three and even if reduced, if designed properly three lanes can handle the same traffic volume as 5. Councilmember McCaffery was supportive of proceeding with the study. Councilmember Gold stated that she was not opposed to having a conceptual plan for Healdsburg Avenue; and clarified that she did not want to pay for a study that could not be executed. Vice Mayor Hagele was supportive of moving forward noting that it was important to have a long term plan that focusses on this part of town to help connect the north to the rest of the City. Mayor Mansell stated she was concerned about spending a lot of money on a study when funding for the construction of the improvements has not been identified and added her priority is to utilize the funds on repairing/repaving Healdsburg Avenue. Councilmember Naujokas expressed interest in revisiting the public outreach after the SDAT is completed to see if there is an opportunity to reduce the scope. City Manager Mickaelian stated staff would be updating the Council on a regular basis on the public outreach process and added it was premature to connect the SDAT’s outreach with this contract because it is not known the extent of the outreach that will be done. Mayor Mansell reiterated her desire to move forward with fixing the street and adding a bike lane and not waiting until the plan is finished. City Manager Mickaelian stated that based on Council's comments, he would be executing the agreement as approved.

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

Richard Burg opined it was a bad idea to forego the agreement with MIG and encouraged Council not to postpone it. He suggested timing the public engagement in such a way so that it does not conflict with the SDAT public outreach.

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 7

Assistant City Manager Ippoliti presented the staff report and discussed the proposed outreach campaign. Ms. Ippoliti reviewed the wording of the proposed survey noting that reference to housing was removed because funding for affordable housing was now being generated with the with the passage of Measure S. In response to Council’s inquiries, City Manager Mickaelian noted the survey is not a statistical valid survey; it is a tool to assist Council in determining how the Measure V revenues will be allocated. Vice Mayor Hagele expressed interest in including in the mailing information about how the current year funds were spent – include actual amounts and actual expenditures/projects. Assistant City Manager Ippoliti discussed the constraints with mailing additional information noting that the City was trying to minimize the mailing costs. Vice Mayor Hagele asked that the information be provided in a format that can be shared via Facebook. Councilmember Naujokas concurred that information on how funds were spent should be disseminated to the public and added he was okay with taking out reference to housing. Mayor Mansell stated that she was having a hard time letting go of the housing because housing is connected with economic development and concurred it was important to let people know what we are doing with the money and added she would like to see more specificity. City Manager Mickaelian stated that staff would look into how to provide information on what projects the funds have been spent, if that was Council’s the consensus. Public Comments Richard Burg opined housing should be left in and expressed concern about ballot stuffing and suggested ways to ensure that does not happen. Ariel Kelley urged Council to include housing in the survey and encouraged Council to do all that can be done to grow the affordable housing fund. Merrilyn Joyce stated that last year housing was included and despite people’s support only 1% was allocated. She stated if Council is going to ask people for their opinion they should pay attention to what they say. Councilmember Gold was in favor of leaving housing off.

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

NEW BUSINESS – MEASURE V SURVEY

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City Council/RSA Regular Meeting Minutes January 8, 2018 Page 8 Vice Mayor Hagele concurred with Councilmember Gold’s comments and added that Council needs to focus on the original intent of Measure V. Councilmember Hagele was supportive of leaving the survey as proposed.

Councilmember Naujokas stated it is important to focus on the original purpose of Measure V and suggested including “improving bicycle and pedestrian access” as part of Streets. Regarding data integrity and ballot stuffing, Councilmember McCaffery stated that the cost to have unique serial numbers would triple the cost. Mayor Mansell disagreed with the comments that housing was not part of Measure V. Vice Mayor Hagele was supportive of adding bike and pedestrian access. On a motion by Councilmember McCaffery, seconded by Councilmember Naujokas, approved the Measure V survey as proposed with the addition of “bike and pedestrian” to the Streets Maintenance and Repair category and directed staff to work on a better way to show specific projects that were in each category. The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) WRITTEN COMMUNICATIONS None. CLOSED SESSIONS None. ADJOURNMENT There being no other City Council business to discuss, the meeting was adjourned at approximately 9:31 P.M. APPROVED:

ATTEST:

__________________________________ Brigette A. Mansell, Mayor

___________________________________ Maria Curiel, City Clerk

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Minutes Acceptance: Minutes of Jan 8, 2018 6:00 PM (Approval of Minutes)

Councilmember McCaffery concurred that the survey questions should be on the original priorities.

6.A

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Amendment No. 1 to the Professional Services Agreement with BKF Engineers for the design of a replacement Water Storage Tank

PREPARED BY:

Patrick Fuss, Water/Wastewater Engineer

STRATEGIC INITIATIVE(S): Quality of Life Infrastructure & Facilities

RECOMMENDED ACTION(S): Adopt a Resolution approving Amendment No. 1 to the professional services agreement with BKF Engineers for the design of the Sunset Tank Replacement Project, increasing the not to exceed amount to $78,500, authorizing the City Manager to execute the amendment and approve change orders not more than $6,600

BACKGROUND: The Sunset Tank stores approximately 70,000 gallons of potable water and serves the Sunset pressure zone, which serves Healdsburg and County Services Area 41. The Sunset Tank provides drinking water storage and volume for fire protection. It also provides a control water surface for the McDonough booster pump station. The Sunset water storage tank, constructed in 1978 from redwood planks, is at the end of its useful life. It needs to be replaced. On August 21, 2017, City Council approved the design contract for a 170,000 gallon bolted steel tank to replace the existing redwood stave tank. Under the current agreement, the Consultant is required to prepare plans and specifications for the bidding and construction of the 170,000 gallon replacement tank, provide engineering services during construction, address requests for information made by the contractor, and provide project close-out assistance. DISCUSSION/ANALYSIS: In 2016 the City completed a water system master plan. Among other things, the master plan identified a storage need of 1.2 million gallons for the Sunset pressure zone. At the time of project initiation, it was believed that a replacement tank storage volume of approximately 170,000 gallons would be the largest tank that could fit on the existing site. This volume is

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achieved on the same overall site footprint by increasing the diameter of the tank and limiting vehicular access to one side of the tank. As the design progressed to the 60% level and more information was available about underground utilities on the site, the Consultant was tasked with determining the largest tank that could be constructed on the site. With a change in the foundation footprint the Consultant determined that a storage tank of 215,000 gallons would fit on the site and allow adequate vehicle access. The larger 215,000 gallon tank volume adds 21% to the volume of the originally proposed 170,000 gallon capacity and increases the existing storage capacity by over 300%. The resulting construction cost change is expected to be approximately $20,000 or 6% based on engineer estimates provided by a tank vendor. The increased storage will require additional engineering for the design of a slightly larger foundation. The original scope of work did not include this engineering and design work, and BKF has provided a scope and cost. Engineer costs related to the design of the larger storage tank are forecasted not to exceed $8,000, but exceed the currently approved PSA dollar amount. Additionally, the City standard construction contract indicates that the City will provide construction staking, which provide the initial horizontal and vertical control for the contractor to locate the facilities it is to construct. The City does not have a surveyor on staff and this service will performed by a consultant. Surveying for construction staking was not included in the original tank design scope of services, but is required. The Consultant offers this service and has familiarity with the project to conduct this work efficiently. The proposed amendment would add the following scope and costs to the agreement’s not to exceed amount: Design modifications to increase storage from 170,000 to 215,000 Construction staking Total allocation adjustment for this amendment

$8,000 $4,500 $12,500

The original fee for design and related construction support for the Sunset Tank replacement was authorized for a not to exceed amount of $66,000. The increased allocation would add $12,500 bringing the PSA’s not to exceed amount to $78,500. Staff does not recommend adjustment of the originally approve $6,600 contingency amount at this time. ALTERNATIVES: City Council could direct staff to proceed with the 170,000 gallon tank per the original scope. This alternative is not recommended by staff as there is a relatively small incremental cost to significantly increase water storage, improving both drinking water supply and water available for fire suppression.

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Additionally, the City Council could direct staff to go to procurement for the construction staking surveying services. This alternative is not recommended by staff as BKF is familiar with the work and another staking contractor would require additional hours and costs to gain familiarity with the project. FISCAL IMPACT: The City’s Capital Improvement Program includes $1,375,000 for the replacement of the Sunset Tank and recommended increase in overall water storage. Overall the replacement of the Sunset Tank, including the design and construction services with the additional services in this amendment, is estimated at $775,000, and is within the $1,375,000 budget for this project. ENVIRONMENTAL ANALYSIS: Pursuant to California Environmental Quality Act (“CEQA”) and Title 14, the California Code of Regulations, Section 15378(b) (2), continued administrative actions do not qualify as a “Project”. Therefore, no further CEQA or environmental review is required for the amendment of this agreement. ATTACHMENT(S): Resolution

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CITY OF HEALDSBURG

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG APPROVING AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICE AGREEMENT WITH BKF ENGINEERS FOR THE DESIGN OF THE SUNSET TANK REPLACEMENT INCREASING THE NOT TO EXCEED AMOUNT TO $78,500, AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT NO. 1 AND APPROVE CHANGE ORDERS TO A TOTAL AMOUNT OF $6,600 WHEREAS, the existing Sunset tank is constructed of redwood staves and has reached the end of its useful life; and WHEREAS, City council awarded the design of the tank replacement on August 21, 2017 to BKF Engineers; and WHEREAS, the design anticipated a tank volume of 175,000 gallons; and WHEREAS, during the design process it was determined that a tank of 215,000 gallons would fit on the site; and WHEREAS, the larger volume brings the available storage closer to required storage volume of 1.2 million gallons for an estimated one percent increase in construction cost; and WHEREAS, the City will require construction staking services when construction begins; and WHEREAS, BKF Engineers offers construction staking survey services and would provide a good value to the City; and WHEREAS, the continued administrative action of the City Council do not constitute a project under CEQA guidelines and are therefore exempt from further environmental review. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Healdsburg does hereby: 1.

Find that continue administrative actions are exempt from CEQA and no further environmental review is needed.

2.

Approve of Amendment No. 1 to the PSA with BKF Engineers for the design the Sunset Tank increasing the not to exceed amount to $78,500.

3.

Authorize the City Manager to execute the amendment and approve PSA change orders to a total amount of $6,600 on the City’s behalf.

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Attachment: Resolution (1838 : PSA Amendment for Larger Sunset Tank Design)

RESOLUTION NO.

6.A.a

Resolution No. ____-2018 Page 2 PASSED, APPROVED AND ADOPTED, this 5th day of February 2018, by the following vote: AYES: Councilmembers: NOES: Councilmembers:

ABSTAINING:

Attachment: Resolution (1838 : PSA Amendment for Larger Sunset Tank Design)

ABSENT: Councilmembers: Councilmembers:

SO ORDERED:

ATTEST:

__________________________________ Brigette A. Mansell, Mayor

______________________________ Maria Curiel, City Clerk

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6.B

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Approve the audited financial statements for the fiscal year ended June 30, 2017

PREPARED BY:

Heather Ippoliti, Assistant City Manager

STRATEGIC INITIATIVE(S): Fiscal Responsibility

RECOMMENDED ACTION(S): By motion, approve the fiscal year 2016-17 audited financial statements based on an audit performed in accordance with Government Auditing Standards

BACKGROUND: The City is required by the State of California Government Code to complete an independent audit of its financial statements at the end of each fiscal year. The City prepares annual financial statements in accordance with generally accepted accounting principles. In December 2017, staff presented the fiscal year 2016-17 year-end financial update, which included the fiscal year 2016-17 financial estimate to close figures for the year ended June 30, 2017. The City’s auditor has recently completed its audit of the City’s 2016-17 statements, and found no errors or issues with the City’s statements and the information presented by the auditor is consistent with the data presented to Council in December. DISCUSSION/ANALYSIS: Van Lant & Fankhanel, LLP has completed the fiscal year 2016-17 audit of the City’s financial statements. Staff is pleased to report that, as in previous years, the auditor’s opinion on the City’s fiscal year 2016-17 financial statements is without exception or unqualified. That is, the auditor’s report is not restricted (qualified) in some manner, nor does it take exception to any of the information contained in the City’s financial statements. While a qualification or exception is not necessarily detrimental, staff is happy to report that the City’s financial statements continue to earn a “clean opinion”. The Annual Financial Report includes Management’s Discussion and Analysis, which provides a simple narrative introduction, overview and analysis of the basic financial statements. The first

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two statements, the Statement of Net Position and the Statement of Activities, provide information about the activities of the City as a whole. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private sector companies. All current year’s revenues and expenses are taken into account regardless of when cash is received or paid. Capital assets, including infrastructure and longterm liabilities, are included on a City wide Statement of Net Position. Overall, the City’s net position increased by $3,044,783. Over time, increases or decreases in net financial position may serve as a useful indicator of whether the financial position of the City is improving or declining. From the most basic view, the net position is the difference between the assets and the liabilities. The increase is attributable to the City’s governmental activities increasing $1.3 million, while the business type activities increased by $1.7 million. These increases are contributed to typical operations. The Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds are found on pages 18 and 20, and present information in a manner more consistent with how the City prepares its budget. The unassigned fund balance of the combined General Fund was $5,425,407, while the total fund balance was $10,698,242. The unassigned classification represents the fund balance that has not been legally restricted, committed, or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount. For financial statement reporting purposes, the combined General Fund includes seven funds. Following the basic financial statements is the Notes section beginning on page 32. The Notes provide a description of accounting policies used by the City and additional information regarding the financial statements. The Required Supplementary Information Section of the report begins on page 78 and includes a Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual – General Fund, a Schedule of Funding Progress for OPEB (Other Postemployment Benefits), Schedule of the City’s Proportionate Share of the Net Pension Liability, and the Schedule of Plan Contributions. The Supplementary Information Section begins on page 84 and includes the NonMajor Governmental Funds, Non-Major Enterprise Funds, General Fund Activities combining statements, Water Fund Activities, Sewer Fund Activities, Electric Fund Activities, Internal Service Funds and the Private-purpose Trust Funds statements. ALTERNATIVES: Staff does not recommend any alternatives as the City is required by the State of California Government Code to complete an independent audit of its financial statements at the end of each fiscal year. FISCAL IMPACT: There is no fiscal impact as a direct result of the proposed action. ENVIRONMENTAL ANALYSIS: Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California

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Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment. ATTACHMENT(S): Healdsburg Financial Statements FY 2016-17

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CITY OF HEALDSBURG

FINANCIAL STATEMENTS Year Ended June 30, 2017

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

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City of Healdsburg Financial Statements Year Ended June 30, 2017

PAGE Independent Auditor’s Report

1

Management’s Discussion & Analysis

4

Basic Financial Statements: Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of of Net Position Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Net Position - Fiduciary Funds Statement of Changes in Net Position - Fiduciary Funds Notes to Financial Statements Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: General Fund Community Services Special Revenue Fund Schedule of Funding Progress Schedule of the City’s Proportionate Share of the Net Pension Liability Schedule of Plan Contributions Notes to Required Supplementary Information Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Streets Capital Projects Fund Non-Major Governmental Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Gas Tax Special Revenue Fund North Area Special Revenue Fund

15 16 18 19 20 21 22 26 28 30 31 32

78 79 80 81 82 83

84 85 87 89 90

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

TABLE OF CONTENTS

6.B.a

City of Healdsburg Financial Statements Year Ended June 30, 2017

PAGE Supplementary Information (Continued): Benjamin Way Maintenance District Special Revenue Fund Public Safety Special Revenue Fund Strong Motion Education and Data Special Revenue Fund Area A Lighting and Landscaping Special Revenue Fund Media Center Special Revenue Fund Park Development Fees Special Revenue Fund General Debt Service Fund General Fund Activities: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Water Fund Activities: Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Net Position Sewer Fund Activities: Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Net Position Electric Fund Activities: Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Net Position Combining Statement of Cash Flows Private-purpose Trust Funds Combining Statement of Fiduciary Net Position Combining Statement of Changes in Fiduciary Net Position

91 92 93 94 95 96 97 98 100 102 103 104 106 108 109 110 111 112 114 116

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

TABLE OF CONTENTS - Continued

FINANCIAL SECTION

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

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The Honorable City Council City of Healdsburg, California

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Healdsburg, California (City), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

1

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Independent Auditor’s Report

6.B.a

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Healdsburg, California, as of June 30, 2017, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The supplementary information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

2

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

6.B.a

In accordance with Government Auditing Standards, we have also issued our report dated January 23, 2018, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

January 23, 2018

3

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Other Reporting Required by Government Auditing Standards

As management of the City of Healdsburg (“City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2017. We encourage readers to consider the information presented here in conjunction with the accompanying Independent Auditor’s Report, the financial statements, and the accompanying notes to the financial statements. Financial Highlights 

City assets exceeded its liabilities by $197.7 million (net position) at June 30, 2017. Of this amount, $23 million (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.



At the close of fiscal year 2016-17, City governmental funds reported combined ending fund balance of $27.4 million, a decrease of $6.4 million. The decrease is from capital outlay related to the City Hall Addition and Alteration Project, the Healdsburg Avenue Improvements Project, and the purchase of the affordable housing at 721 Center Street.



City total net position increased by $3 million during the fiscal year, compared to an increase of $23 million in the prior year. The increase is attributable to the City’s governmental activities increasing $1.3 million, while the business type activities increased by $1.7 million. The net increase last year was contributed to an operating change in the Community Services and Streets Funds, and the transfer of redevelopment funds from trust funds to governmental funds. The current increase is a result of standard operations.



At the end of fiscal year 2016-17, unassigned fund balance for the General Fund was $5.4 million, or 40% of total General Fund expenditures.

Overview of the Basic Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) governmentwide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains required supplementary information in addition to the basic financial statements themselves. REQUIRED COMPONENTS OF THE ANNUAL FINANCIAL REPORT

Summary

Detail 4

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

Government-wide Financial Statements. The government-wide financial statements are comprised of the Statement of Net Position and Statement of Activities. These two statements are designed to provide readers with a broad overview of the City’s finances utilizing the full accrual method of accounting, in a manner similar to a private-sector business. Under the full accrual method of accounting, transactions are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, assets, liabilities, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g. uncollected revenues and accrued but unpaid interest expense). The Statement of Net Position presents information on all of the City’s assets and liabilities, including capital assets and long-term liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City as a whole is improving or deteriorating. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. Functional activities are highlighted in this statement, whereby direct and indirect functional costs are shown net of related program revenue. This statement shows the extent to which the various functions depend on general taxes and non-program revenues for support. Both the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, community development and housing, community services and streets capital projects. The business-type activities of the City include the water, sewer and electric utilities, and other programs. Fund Financial Statements. The fund financial statements focus on current available resources and are organized and operated on the basis of funds, each of which is defined as a fiscal and accounting entity with a self-balancing set of accounts established for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The City adopts an annual appropriated budget for all governmental and proprietary funds. Budgetary comparison statements for the General Fund and all major special revenue funds are required and included in the basic financial statements. The Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual – General Fund on page 78, reflect both the original and final budget figures for the General Fund. The budgeted Capital Outlay expenditure increased in the final budget by $4.6 million from the original budget, with the approval of the construction contract for the City Hall Addition and Alteration Project. Additionally, budgetary schedules for the other governmental funds have been provided as required to demonstrate compliance with the budget. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, the governmental funds financial statements utilize the modified accrual method of accounting, which focuses on near-term inflow and outflow of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financial requirements. 5

Packet Pg. 38

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

The City maintains fifteen individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund as it is considered to be major fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of supplementary combining statements. Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges outside customers, or internal departments of the City. Proprietary funds provide the same type of information as shown in the government-wide statements, only in more detail. The City maintains the following two types of proprietary funds: 

Enterprise Funds. These funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the operations of water, sewer, electric, drainage, and airport.



Internal Service Funds. These funds are used to report activities that provide internal services for the City. The City uses internal service funds to account for its insurance and benefits, vehicle service and replacement, information systems and equipment, and the maintenance of government buildings. Because internal service funds predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the government-wide and fund financial statements. Other Supplementary Information. In addition to the basic financial statements and accompanying notes, this report also presents combining statements referred to earlier in connection with other governmental funds and the internal service funds. Also included are the budgetary comparison Statement of Revenues, Expenditures and Changes in Fund Balances for all other special revenue funds, and all debt service funds. Government-Wide Financial Analysis Net position may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed net position for both governmental and business-type activities.

6

Packet Pg. 39

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

Current and other assets Capital assets Total assets

Business-type Activities 2017 2016

Governmental Activities 2017 2016

ASSETS $

40,465,167 92,414,324 132,879,491

$

43,977,706 84,718,561 128,696,267

$

55,589,913 86,719,720 142,309,633

$

54,684,182 87,157,234 141,841,416

Total Government 2017 2016 $

96,055,080 179,134,044 275,189,124

$

98,661,888 171,875,795 270,537,683

DEFERRED OUTFLOWS OF RESOURCES Deferred Amounts on Refundings Deferred Pension Related Items Total deferred outflows

5,358,711 5,358,711

2,403,114 2,403,114

985,314 2,381,792 3,367,106

1,040,054 1,223,268 2,263,322

985,314 7,740,503 8,725,817

1,040,054 3,626,382 4,666,436

6,154,437 30,415,791 36,570,228

3,613,016 26,465,086 30,078,102

1,217,986 46,570,174 47,788,160

1,025,326 46,752,223 47,777,549

7,372,423 76,985,965 84,358,388

4,638,342 73,217,309 77,855,651

1,972,308

533,896

741,343

1,876,953

2,713,651

53,689,130 13,696,202 29,969,351 97,354,683

52,006,451 10,910,661 32,668,734 95,585,846

144,343,347 30,343,167 22,993,086 197,679,600

134,857,005 34,466,696 25,311,116 194,634,817

LIABILITIES Current Liabilities Long-term liabilities Total liabilities

DEFERRED INFLOWS OF RESOURCES Deferred Pension Related Items

1,343,057

NET POSITION Net Investment in Capital Assets Restricted Unrestricted Total net position

$

90,654,217 16,646,965 (6,976,265) 100,324,917

$

82,850,554 23,556,035 (7,357,618) 99,048,971

$

$

$

$

The following table reflects the change in net position for both governmental and business‐type activities.

7



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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

NET POSITION June 30, 2017 and 2016

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

CHANGE IN NET POSITION FOR THE FISCAL YEARS ENDED JUNE 30, 2017 and 2016

PROGRAM REVENUES Charges for Services Operating Grants Capital Grants GENERAL REVENUES Property and Other Taxes Sales and Use Taxes Motor Vehicle in Lieu Franchise Fees Business License Taxes Transient Occupancy Taxes Gain/(Loss) on disposal of capital assets Other Revenues TOTAL REVENUES

2016

26,463,941 2,463,292

$ 29,634,803 494,139 1,600,760

$ 29,538,469 561,759 19,180,590

(125,381) 28,801,852

3,271,677 6,748,164 505,822 270,145 3,657,263 1,777,724 363,532 $ 48,324,029

4,297,531 6,433,825 4,716 472,258 264,794 3,081,696 (125,381) 470,430 $ 64,180,687

$

$

$ 3,074,528 561,759 16,717,298

$ 26,113,170 35,237

3,271,677 6,748,164 505,822 270,145 3,657,263 1,777,724 363,532 $ 22,175,622

4,297,531 6,433,825 4,716 472,258 264,794 3,081,696 470,430 $ 35,378,835

$ 26,148,407

$

$

2,105,731 8,893,664 1,718,094 339,013 3,315,062 3,486,845 217,215 1,958,309

$ 2,042,777 7,351,532 1,548,403 243,567 3,039,936 2,432,525 265,945 1,542,391

$

$

$ 22,033,933

$ 18,467,076

4,776,502 7,039,400 11,479,496 445,821 $ 23,741,219

$

4,766,372 7,368,721 11,001,815 485,604 23,622,512

$

141,689

$ 16,911,759

$ 2,407,188

$

5,179,340

$

$

375,368 47,745,151 $ 48,120,519

$

$

$

305,347 828,910 1,134,257

CHANGE IN NET POSITION

$

1,275,946

$ 65,032,278

NET POSITION JULY 1

$ 99,048,971

NET POSITION JUNE 30

$ 100,324,917

EXCESS (DEFICIENCY)OF REVENUES OVER EXPENDITURES BEFORE TRANSFERS Transfers and other Financing Investment Earnings Transfers In (Out) TOTAL TRANSFERS AND OTHER FINANCING

-

$

Totals 2017

3,521,633 494,139 1,565,523

EXPENSES Governmental Activities General Government Public Safety Planning and Building Community Development Community Services Streets and Roads Interest on Long Term Debt Unallocated Depreciation Business Type Activities Water Sewer Electric Streets Community Services Non-Major Enterprise Funds TOTAL EXPENSES

$

Business-Type Activities 2017 2016

-

2,105,731 8,893,664 1,718,094 339,013 3,315,062 3,486,845 217,215 1,958,309

2,042,777 7,351,532 1,548,403 243,567 3,039,936 2,432,525 265,945 1,542,391

4,776,502 7,039,400 11,479,496 445,821 $ 45,775,152

4,766,372 7,368,721 11,001,815 485,604 $ 42,089,588

$

2,548,877

$ 22,091,099

549,332 (47,745,151) $ (47,195,819)

$ $

495,906 495,906

$ 1,768,837

$ (42,016,479)

$

3,044,783

$ 23,015,799

$ 34,016,693

$ 95,585,846

$ 137,602,325

$ 194,634,817

$ 171,619,018

$ 99,048,971

$ 97,354,683

$

$ 197,679,600

$ 194,634,817

$

190,559 (828,910) (638,351)

95,585,846

$ $

924,700 924,700



By far the largest portion of the City’s net position (73%) reflects its net investment in capital assets (e.g. land, buildings, utility plant, machinery, equipment, vehicles, and infrastructure), net of any related outstanding debt used to acquire those assets. The City uses these assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

8

Packet Pg. 41

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Government Activities 2017 2016

Another portion of the City’s net position ($30.3 million or 15.4%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $22.9 million (11.6%) may be used to meet the government’s ongoing obligations to citizens, creditors, and to meet City imposed designations (e.g., reserves, pending litigations, contingencies, capital projects). At the end of the current fiscal year, the City is able to report positive balances in all three categories of total net position, both for the government as a whole, as well as for its separate governmental activities and business-type activities. The same situation held true for the prior fiscal year. The statement of activities shows how the government’s net position changed during fiscal year 201617 as compared to 2015-16. The City’s net position increased overall by $3.2 million during the current fiscal year. Governmental Activities. The City recognizes future pension expenses according to GASB 68. The Deferred Pension Related Outflows of Resources of $5.4 million and Deferred Pension Related Inflows of Resources of $1.3 million increased the Unrestricted Net Position for Governmental Activities $4 million. General governmental tax revenue (64%) includes property taxes, franchise fees, sales and use taxes, transient occupancy taxes, and business license taxes. Program revenues are 18% of the total revenues of the governmental activities, which include charges for services and operating contributions and grants. The chart below reflects information from page 16 and 17 of the Financial Statements. REVENUES BY SOURCE – GOVERNMENTAL ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2017

9

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

As for expenditures, public safety expenses are the most significant (41%) of all governmental activities expenses, followed by community services (15%), streets and roads (16%), general government (9%), planning and building (8%), interest on long-term debt (1%), and community development (1%). Depreciation expense is 9% of the total expenses for governmental activities. The chart below reflects information from the Financial Statements, Statement of Activities on page 16 and 17.

EXPENSES BY FUNCTION/PROGRAM – GOVERNMENTAL ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2017

COMPARISON OF EXPENSES AND PROGRAM REVENUES GOVERNMENTAL ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2017

10

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

Business-Type Activities. The City recognizes future pension expenses according to GASB 68. The Deferred Pension Related Outflows of Resources of $2.4 million and Deferred Pension Related Inflows of Resources of $534 thousand increased the Unrestricted Net Position for Business‐Type Activities $1.8 million. During the fiscal year ended June 30, 2017, business-type activities increased the City’s net position by $1.8 million, as opposed to a $42 million decrease in the fiscal year ended June 30, 2016. The operating change in the Community Services and Streets Funds contributed to $47.7 million of the decrease. Other factors include:  Operating expenses increased by $118,707 (less than one‐half percent)  Charges for services decreased by $350,771 (1%)  Capital grants and contributions decreased by $2.4 million (98%).

REVENUES BY SOURCE – BUSINESS-TYPE ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2017

EXPENSES AND PROGRAM REVENUES BUSINESS-TYPE ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2017

11

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

Governmental Funds. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of June 30, 2017 the City’s governmental funds reported total ending fund balances of $27.4 million, a decrease of $6.4 million from the prior fiscal year. This decrease may be contributed to the capital outlay related to the City Hall Addition and Alteration Project, the Healdsburg Avenue Improvements Project, and the purchase of the affordable housing at 721 Center Street. Approximately 19.7% of the total ending fund balances ($5.4 million) is unassigned available for spending in the future at the government’s discretion. The remainder of the fund balance is either nonspendable, restricted or committed. The most significant of these reserved fund balances are restricted for pension stabilization, low income housing and road improvements, $3.5 million, $7.2 million and $1.4 million respectively. General Fund revenues were $333 thousand (2.3%) less than in the prior fiscal year, and expenditures increased by $2.4 million (21.7%). While a decrease in property taxes accounts for the decrease revenue, property taxes from assessed value increased in fiscal year 2016-17. In fiscal year 2015-16, the City received the last payment related to the Triple Flip. The Triple Flip revenue was recorded as property tax in prior years. The increased expenditures may be contributed primarily to an increased capital outlay related to the City Hall Addition and Alteration Project. Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The City’s major enterprise funds are Water, Sewer and Electric. The major changes in enterprise net position are an increase of $1.1 million to $32.1 million in the Electric Fund, and a $774 thousand increase to $47.4 million in the Sewer Fund. The Internal Service Funds had an increase in net position of $984 thousand during the fiscal year, ending with a balance of $7.6 million. This increase is attributable to a net increase in operating revenue. The operating revenue is made up of the service fees charged to each fund. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City’s investment in capital assets for its governmental and business-type activities at June 30, 2017, amounted to $179.1 million (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, equipment, vehicles, infrastructure, and construction in progress. Depreciation expense for the year totaled $4.9 million.

12

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

Business-type Activities 2017 2016

Governmental Activities 2017 2016 Land and Land Rights Right of Way Construction in Progress Land Improvements Buildings Streets Utility Systems Drainage Machinery and Equipment Operations Infrastructure

$

18,664,887 6,681,379 7,795,174 2,410,228 27,143,947 52,054,623 8,311,244

$

912,056

18,664,887 6,681,379 1,428,693 1,754,468 25,304,742 51,541,307 8,095,793 912,056

Total

$ 123,973,538

$ 114,383,325

$

1,245,876 2,959,115 2,969,311 109,116,011 10,246,168 2,386,508 3,381,750 -

$ 132,304,739

$

1,245,876 956,049 2,969,311 109,116,011 10,192,183 2,318,189 3,381,750 -

$ 130,179,369

Additional information on the City’s capital assets can be found in Note 6 of the basic financial statements. Long-Term Liabilities. The City’s outstanding long-term liabilities, including bonds, loans payable, and compensated absences totaled $77 million at June 30, 2017. Of this total, $30.4 million (42.8%) was in governmental activities and $46.6 million (60.5%) was in business-type activities.

LONG-TERM LIABILITIES Governmental Activities 2017 2016

Business-type Activities 2017 2016

Pension Obligation Bond Net Pension Liability Certificates of Participation HUSD Capital Lease Payable Revenue Bonds Compensated Absences Successor Agency Payable Capital Leases OPEB

$

3,628,134 20,966,030 1,760,107 1,713,832 1,894,688 453,000

$

4,209,307 16,384,791 1,868,007 1,565,509 1,997,472 440,000

$

2,028,266 8,365,158 2,105,000 31,910,904 2,160,846 -

$

2,353,193 6,629,673 2,215,000 33,276,288 2,278,069 -

Total

$

30,415,791

$

26,465,086

$

46,570,174

$

46,752,223

Additional information on the City’s long-term liabilities can be found in Note 7 of the basic financial statements.

13

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

CAPITAL ASSETS

6.B.a

CITY OF HEALDSBURG Management’s Discussion and Analysis Fiscal Year Ended June 30, 2017

For the 2017-18 fiscal year, General Fund revenue projections continue to be conservative. Increases have been projected for property, sales & use, and transient occupancy taxes. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Elizabeth Garcia, Finance Manager, City of Healdsburg, 401 Grove Street, Healdsburg, CA 95448-4723 or at [email protected].

14

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS

BASIC FINANCIAL STATEMENTS

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 48

6.B.a

City of Healdsburg Statement of Net Position June 30, 2017 Business-type Activities

$

$

833,621 1,063,464 8,483,802 57,530 567,399 (3,678,664) 11,639 18,836 3,521,061 33,141,440 59,272,884 132,879,491

DEFERRED OUTFLOWS OF RESOURCES Deferred Amounts on Refundings Deferred Pension Related Items Total Deferred Outflows of Resources LIABILITIES Current Liabilities: Accounts Payable and Accrued Liabilities Interest Payable Deposits Payable Claims Payable Unearned Revenue Noncurrent Liabilities: Due within One Year Due in More Than One Year Total Liabilities DEFERRED INFLOWS OF RESOURCES Deferred Pension Related Items NET POSITION Net Investment in Capital Assets Restricted for: Capital Projects Pensions Community Development: Expendable Nonexpendable Housing Landscaping and Lighting Public Safety Parks and Recreation: Streets, highways, and related purposes Unrestricted Total Net Position The accompanying notes are an integral part of this statement.

26,924,451 2,662,028

$

65,768,556 143 2,928,929

3,852,163 101,569 3,678,664 2,823 1,501,067 5,875,407 1,467,071 4,204,991 82,514,729 142,309,633

4,685,784 1,063,464 8,483,802 159,099 567,399 14,462 1,519,903 5,875,407 4,988,132 37,346,431 141,787,613 275,189,124

5,358,711 5,358,711

985,314 2,381,792 3,367,106

985,314 7,740,503 8,725,817

4,508,058 1,132,633 48,581 465,165

540,872 317,779 359,335 -

5,048,930 317,779 1,491,968 48,581 465,165

1,707,329 28,708,462 36,570,228

1,967,591 44,602,583 47,788,160

3,674,920 73,311,045 84,358,388

1,343,057

533,896

1,876,953

90,654,217

53,689,130

144,343,347

3,521,061

12,229,131 1,467,071

12,229,131 4,988,132

29,969,351 97,354,683

15,161 69,980 7,220,790 263,513 138,030 3,043,192 2,375,238 22,993,086 $ 197,679,600

15,161 69,980 7,220,790 263,513 138,030 3,043,192 2,375,238 (6,976,265) $ 100,324,917

15

38,844,105 143 266,901

Total

$

Packet Pg. 49

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

ASSETS Cash and Investments Cash and Investments with Fiscal Agents Restricted Cash and Investments Receivables: Accounts Taxes Notes Interest Due from Other Governments Internal Balances Prepaids Inventory Investment in NCPA Reserves Pension Stabilization Investments Capital Assets, Not Being Depreciated Capital Assets, Depreciated, Net Total Assets

Governmental Activities

6.B.a

Functions/Programs Governmental Activities: General Government Public Safety Planning and Building Community Development Community Services Streets and Roads Interest on Long-term Debt Unallocated Depreciation Total Governmental Activities Business-type Activities: Water Sewer Electric Non-major Enterprise Funds Total Business-type Activities Total Primary Government

Charges for Services

Expenses $ 2,105,731 8,893,664 1,718,094 339,013 3,315,062 3,486,845 217,215 1,958,309

$

289,002 889,697 1,034,735 205,332 914,111 188,756 -

Program Revenues Operating Capital Grants and Grants and Contributions Contributions $

186,407 307,732 -

$

1,565,523 -

22,033,933

3,521,633

494,139

1,565,523

4,776,502 7,039,400 11,479,496 445,821

4,982,540 8,013,483 12,813,725 303,422

-

35,237

23,741,219

26,113,170

-

35,237

$ 45,775,152

$ 29,634,803

494,139

$ 1,600,760

$

General Revenues: Taxes: Property Taxes Franchise Taxes Sales and Use Taxes Transient Occupancy Tax Business License Taxes Motor vehicle in lieu, unrestricted Investment Earnings Miscellaneous Revenues Gain/(Loss) on Disposal of Capital Assets Transfers In (Out) Total General Revenues and Transfers Change in Net Position Net Position - Beginning of Year Net Position - End of Year

The accompanying notes are an integral part of this statement.

16

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Statement of Activities Year Ended June 30, 2017

6.B.a

Net (Expense) Revenue and Changes in Net Position

$

(1,816,729) (7,817,560) (683,359) (133,681) (2,400,951) (1,424,834) (217,215) (1,958,309) (16,452,638)

Business-type Activities $

-

Total $

(1,816,729) (7,817,560) (683,359) (133,681) (2,400,951) (1,424,834) (217,215) (1,958,309) (16,452,638)

-

206,038 974,083 1,334,229 (107,162)

206,038 974,083 1,334,229 (107,162)

-

2,407,188

2,407,188

2,407,188

(14,045,450)

(16,452,638)

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Governmental Activities

2,064,996 505,822 6,748,164 3,657,263 270,145 1,206,681 305,347 363,532 1,777,724 828,910

190,559 (828,910)

2,064,996 505,822 6,748,164 3,657,263 270,145 1,206,681 495,906 363,532 1,777,724 -

17,728,584

(638,351)

17,090,233

1,275,946

1,768,837

3,044,783

99,048,971

95,585,846

194,634,817

$ 100,324,917

$ 97,354,683

$ 197,679,600

The accompanying notes are an integral part of this statement.

17

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6.B.a

General ASSETS Cash and Investments Restricted Cash and Investments Pension Stabilization Investments Receivables: Accounts Taxes Notes Interest Due from Other Governments Prepaid Expenditures Inventory Due from Other Funds Total Assets LIABILITIES Accounts Payable Deposits Payable Due to Other Funds Advances from Other Funds Unearned Revenue Total Liabilities

$ 10,230,999 777,393 3,104,144

Community Services Special Revenue Fund $

350,902 1,056,923 22,532 458,135 1,406 23,553

2,478,155 175,793 300,088

Capital Projects

Non-major Governmental Funds

Total Governmental Funds

$

4,384,893 1,546,593 -

$ 20,550,664 2,662,028 3,521,061

121 8,908 62,831 11,112 -

64,640 6,541 8,474,020 10,288 -

774,908 1,063,464 8,474,020 48,282 567,399 1,406 11,112 23,553

Streets $

359,245 6,554 46,433 -

3,456,617 162,249 116,829

$ 16,025,987

$

3,366,268

$

3,818,667

$ 14,486,975

$ 37,697,897

$

$

114,456 175,793 465,165

$

2,639,411 162,249 -

$

$

927,095 777,393 3,399,390 -

41,107 17,198 38,553 -

3,722,069 1,132,633 38,553 3,399,390 465,165

5,103,878

755,414

2,801,660

96,858

8,757,810

DEFERRED INFLOWS OF RESOURCES Unavailable Revenues - Accounts Receivable Unavailable Revenues - Interest Receivable

223,867 -

-

39,741 -

54,600 1,207,815

318,208 1,207,815

Total Deferred Inflows of Resources

223,867

-

39,741

1,262,415

1,526,023

1,406 3,289,752 106,254 1,875,423 5,425,407

2,610,854 -

11,112 966,154 -

69,980 9,460,432 3,611,928 (14,638)

82,498 16,327,192 3,718,182 1,875,423 5,410,769

10,698,242

2,610,854

977,266

13,127,702

27,414,064

3,818,667

$ 14,486,975

$ 37,697,897

FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances

$ 16,025,987

$

3,366,268

$

The accompanying notes are an integral part of this statement.

18

Packet Pg. 52

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Balance Sheet Governmental Funds June 30, 2017

6.B.a

City of Healdsburg Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2017

$

27,414,064

Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds: Capital Assets Accumulated Depreciation

115,473,347 (26,675,926)

Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore, are not reported in the funds: HUSD Capital Lease Payable Successor Agency Payable Pension Obligation Bonds Net Pension Liability OPEB

(1,760,107) (1,894,688) (3,628,134) (20,966,030) (453,000)

Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability are not reported in the funds. Deferred Pension Related Items - Deferred Outflows Deferred Pension Related Items - Deferred Inflows

5,358,711 (1,343,057)

Internal service funds are used by management to charge the costs of certain activities, such as insurance and vehicle maintenance, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position.

7,273,714

Long-term assets are not available for current use. Amounts are deferred under the modified accrual basis of accounting.

1,526,023

Net Position of Governmental Activities

$

100,324,917

The accompanying notes are an integral part of this statement.

19

Packet Pg. 53

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Fund Balances of Governmental Funds

6.B.a

Community Services Special Revenue Fund

General REVENUES Property Taxes Sales and Other Taxes Charges for Services Fines and Forfeitures Licenses and Permits Development Fees Intergovernmental Investment Earnings Other Revenues Total Revenues EXPENDITURES Current: General Government Public Safety Community Development Planning and Building Community Services Streets and Roads Capital Outlay Debt Service: Interest Expense Principal Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Sale of Capital Assets Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year

$

3,246,166 7,853,717 738,111 143,637 1,151,407 24,361 239,857 161,947 355,830

$

2,836,586 785,346 307,732 19,066 583

Capital Projects Streets $

97,937 142,167 177,602 1,295,492 1,427 156,374

Non-major Governmental Funds

Total Governmental Funds

$

$

212,969 42,521 7,285 102,960 230,289 25,305 44,141

3,459,135 10,788,240 1,708,145 150,922 1,151,407 304,923 2,073,370 207,745 556,928

13,915,033

3,949,313

1,870,999

665,470

20,400,815

1,654,305 8,267,371 1,718,094 1,857,101

3,315,062 204,324

1,282,928 7,040,474

40,521 100,195 339,013 1,839,204

1,694,826 8,367,566 339,013 1,718,094 3,315,062 1,282,928 10,941,103

-

-

-

217,215 791,857

217,215 791,857

13,496,871

3,519,386

8,323,402

3,328,005

28,667,664

418,162

429,927

(6,452,403)

(2,662,535)

(8,266,849)

(3,003,980) 191,835 -

63,584 (343,169) -

7,035,236 (39,763) -

2,621,931 (6,419,188) 1,777,724

6,716,771 (6,610,285) 1,777,724

(2,812,145)

(279,585)

6,995,473

(2,019,533)

1,884,210

(2,393,983)

150,342

543,070

(4,682,068)

(6,382,639)

2,460,512

434,196

17,809,770

33,796,703

977,266

$ 13,127,702

$ 27,414,064

13,092,225 $ 10,698,242

$

2,610,854

$

The accompanying notes are an integral part of this statement.

20

Packet Pg. 54

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended June 30, 2017

6.B.a

City of Healdsburg Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2017 Net Changes in Fund Balances - Total Governmental Funds

$

(6,382,639)

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of these assets is allocated over their estimated useful lives as depreciation expense. 8,737,186 (1,958,309)

Capital Outlay Depreciation Expense The amounts below included in the Statement of Activities do not provide (require) the use of current financial resources and, therefore, are not reported as revenues or expenditures in governmental funds (net change): Principal Repayments Net Pension Liability

791,857 (4,581,239)

Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability are not reported in the funds. This is the net change in deferred inflows and outflows related to the net pension liability: Deferred Pension Related Items - Deferred Outflows Deferred Pension Related Items - Deferred Inflows

2,955,597 629,251

Governmental funds report all contributions in relation to the Annual Required Contribution (ARC) for OPEB as expenditures; however, in the Statement of Activities only the ARC is an expense.

(13,000)

Some revenues reported in the Statement of Activities are not considered available to finance current expenditures and therefore are not reported as revenues in the governmental funds.

302,432

Internal service funds are used by management to charge the costs of certain activities, such as insurance and vehicle maintenance, to individual funds. The net revenue (expense) of the internal services funds is reported with governmental activities.

794,810

Change in Net Position of Governmental Activities

$

1,275,946

The accompanying notes are an integral part of this statement.

21

Packet Pg. 55

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Amounts reported for governmental activities in the Statement of Activities are different because:

6.B.a

City of Healdsburg Statement of Net Position Proprietary Funds June 30, 2017

Water Fund

Non-major Airport Fund

Sewer Fund

Electric Fund

5,405,919 9 903,900 13,252 83,371

$ 19,733,576 134 1,058,454 48,733 1,699,695 22,727

$ 13,433,261 5,875,407 1,881,408 38,919 15,000 1,699,695 2,823 1,375,181

6,406,451

22,563,319

24,321,694

300,203

350,472

513,812

266,901 602,787

-

310,781 -

766,902 2,240,642

48,359 718,473

119,834 -

310,781

3,007,544

766,832

119,834

1,474,503 28,020,798 608,220 -

206,166 58,461,530 10,246,168 525,751 -

447,835 22,633,683 1,043,027 -

840,807 209,510 3,381,750

30,103,521

69,439,615

24,124,545

4,432,067

Less: Accumulated Depreciation

(11,578,379)

(20,805,997)

(11,799,672)

(1,400,971)

Total Capital Assets, Net

18,835,923

51,641,162

13,091,705

3,150,930

Total Noncurrent Assets

19,186,395

52,154,974

13,961,393

3,150,930

Total Assets

25,592,846

74,718,293

38,283,087

3,451,133

703,711

985,314 703,711

974,370

-

703,711

1,689,025

974,370

-

ASSETS Current Assets: Cash and Investments Cash and Investments with Fiscal Agents Investment in NCPA Reserves Accounts Receivable - Net Notes and Loans Receivable Interest Receivable Due from Other Funds Advances to Other Funds Prepaid Expenses Inventory Total Current Assets

$

Noncurrent Assets: Restricted Cash and Investments Pension Stabilization Investments Capital Assets, Not Being Depreciated Land Construction in Progress Total Capital Assets, Not Being Depreciated Capital Assets, Depreciable Land Improvements Buildings Utility Systems Drainage Machinery and Equipment Operations Total Capital Assets, Depreciable

DEFERRED OUTFLOWS OF RESOURCES Deferred Amounts on Refunding Deferred Pension Related Items Total Deferred Outflows of Resources

$

271,349 8,401 665 19,788

The accompanying notes are an integral part of this statement.

22

Packet Pg. 56

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

6.B.a

Totals

$

38,844,105 143 5,875,407 3,852,163 101,569 15,000 3,399,390 2,823 1,501,067

Governmental Activities Internal Service Funds

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

6,373,787 58,713 9,782 9,248 10,233 7,724

53,591,667

6,469,487

266,901 1,467,071

-

1,245,876 2,959,115

-

4,204,991

-

2,969,311 109,116,011 10,246,168 2,386,508 3,381,750

1,798,185 6,702,006 -

128,099,748

8,500,191

(45,585,019)

(4,883,288)

86,719,720

3,616,903

88,453,692

3,616,903

142,045,359

10,086,390

985,314 2,381,792

-

3,367,106

-

Continued

The accompanying notes are an integral part of this statement.

23

Packet Pg. 57

6.B.a

City of Healdsburg Statement of Net Position - Continued Proprietary Funds June 30, 2017

Water Fund LIABILITIES Current Liabilities: Accounts Payable and Accrued Liabilities Deposits Payable Accrued Interest Payable Claims Payable - Current Compensated Absences - Current Bonds Payable - Current Payable to Successor Agency - Current Pension Obligation Bonds Payable - Current

$

69,100 5,813 93,966 588,000 108,974

Total Current Liabilities

Sewer Fund

$

305,316 131 223,813 910,000 109,278

Non-major Airport Fund

Electric Fund

$

149,559 337,719 117,517 133,822

$

16,897 15,672 -

865,853

1,548,538

738,617

32,569

8,233,000 2,471,524 500,595

24,284,904 2,471,524 501,946

2,043,329 3,422,110 673,651

-

Total Noncurrent Liabilities

11,205,119

27,258,374

6,139,090

-

Total Liabilities

12,070,972

28,806,912

6,877,707

32,569

157,742

157,742

218,412

-

10,014,923

27,431,572

13,091,705

3,150,930

3,616,060 350,472 86,388

6,828,655 513,812 12,668,625

1,784,416 602,787 16,682,430

267,634

$ 14,067,843

$ 47,442,664

$ 32,161,338

Noncurrent Liabilities: Compensated Absences Payable to Successor Agency Bonds Payable Net Pension Liability Pension Obligation Bonds Payable

DEFERRED INFLOWS OF RESOURCES Deferred Pension Related Items NET POSITION Net Investment in Capital Assets Restricted: Capital Projects Pensions Unrestricted Total Net Position

$

3,418,564

Adjutment to reflect the consolidation of internal service fund activities related to enterprise funds. Net Position of Business-type Activities

The accompanying notes are an integral part of this statement.

24

Packet Pg. 58

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

6.B.a

Totals

$

540,872 359,335 317,779 1,498,000 117,517 352,074

Governmental Activities Internal Service Funds

$

785,989 48,581 860,511 -

3,185,577

1,695,081

2,043,329 32,517,904 8,365,158 1,676,192

853,321 -

44,602,583

853,321

47,788,160

2,548,402

533,896

-

53,689,130

3,616,903

12,229,131 1,467,071 29,705,077

3,921,085

97,090,409

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

7,537,988

264,274 $

97,354,683

The accompanying notes are an integral part of this statement.

25

Packet Pg. 59

6.B.a

City of Healdsburg Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds Year Ended June 30, 2017

Water Fund OPERATING REVENUES Charges for Services Development Fees Rental Income Other Operating Revenues

$

4,768,132 184,881 29,527

Sewer Fund $

7,325,396 667,930 20,157

Non-major Airport Fund

Electric Fund $

12,140,284 240,650 432,791

$

140,485 161,605 1,332

Total Operating Revenues

4,982,540

8,013,483

12,813,725

303,422

OPERATING EXPENSES Purchase of Power Maintenance and Operations Administration Insurance and Benefits Costs Depreciation

3,163,362 614,319 600,526

3,999,867 747,193 1,353,995

6,307,503 3,874,157 787,691 510,206

282,550 65,114 98,157

Total Operating Expenses

4,378,207

6,101,055

11,479,557

445,821

604,333

1,912,428

1,334,168

(142,399)

Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Interest Expense Loss on Disposal of Capital Assets

34,373 (411,864) -

73,934 (953,343) -

79,494 (42,789) -

2,758 -

Total Nonoperating Revenues (Expenses)

(377,491)

(879,409)

36,705

2,758

Income (Loss) Before Capital Contributions and Operating Transfers

226,842

Capital Contributions Transfers In Transfers Out Total Transfers and Capital Contributions Change in Net Position Net Position - Beginning of Year Net Position - End of Year

1,033,019

(139,641)

(351,002)

60,167 (319,029)

60,000 (276,446)

35,237 (2,600)

(351,002)

(258,862)

(216,446)

32,637

(124,160)

774,157

1,154,427

46,668,507

31,006,911

14,192,003 $

1,370,873

14,067,843

$

47,442,664

$

32,161,338

(107,004) 3,525,568 $

3,418,564

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Changes in Net Position of Business-type Activities

The accompanying notes are an integral part of this statement.

26

Packet Pg. 60

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

6.B.a

Totals $

24,374,297 1,093,461 161,605 483,807

Governmental Activities Internal Service Funds $

3,826,982 235,847 49,441

26,113,170

4,112,270

6,307,503 11,319,936 2,214,317 2,562,884

2,379,437 866,829 373,035 365,172

22,404,640

3,984,473

3,708,530

127,797

190,559 (1,407,996) -

(1,002) 17,008

(1,217,437)

16,006

2,491,093

143,803

35,237 120,167 (949,077)

973,817 (251,393)

(793,673)

722,424

1,697,420

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

866,227 6,671,761 $

7,537,988

71,417 $

1,768,837

The accompanying notes are an integral part of this statement.

27

Packet Pg. 61

6.B.a

City of Healdsburg Statement of Cash Flows Proprietary Funds Year Ended June 30, 2017 Enterprise Funds

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers Payments to Employees for Services Payments to Suppliers for Goods and Services

$

Net Cash Provided (Used) by Operating Activities

Sewer Fund

4,808,992 (1,564,651) (2,072,358)

$

1,171,983

CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Cash Paid from Interfund Borrowings Cash Received from Other Funds Cash Paid to Other Funds Principal Paid on Loans Receivable Net Cash Provided (Used) by Noncapital and Related Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and Construction of Capital Assets Interest Paid Capital Contributions From Successor Agency Principal Paid on Capital Debt Payments on Other Long-term Debt Net Cash Provided (Used) by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest Received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents, End of the Year

1,962,203

(351,002) -

(1,699,695) 60,167 (319,029) -

(1,699,695) 60,000 (276,446) -

(351,002)

(1,958,557)

(1,916,141)

(68,319) (417,595) (559,000) (97,678)

(1,848,587) (936,625) (885,000) (97,949)

(208,460) (42,789) (117,223) (129,300)

(1,142,592)

(3,768,161)

(497,772)

30,061

59,310

62,795

30,061

59,310

62,795 (388,915)

22,442,863

20,567,271

5,756,400

$ 20,247,522

$ 20,178,356

5,405,919 9 350,472

19,733,576 134 513,812

13,433,261 5,875,407 266,901 602,787

$

5,756,400

$ 20,247,522

$ 20,178,356

$

604,333

$

$

RECONCILIATION OF CASH AND CASH EQUIVALENTS Cash and Investments Cash and Investments with Fiscal Agents Investment NCPA Reserve Restricted Cash and Investments Pension Stabilization Investments

Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation Changes in Operating Assets and Liabilities: Decrease (Increase) in Accounts Receivable Decrease (Increase) in Prepaid Expenses Decrease (Increase) in Inventory Decrease (Increase) in Deferred Outflows - Pensions Increase (Decrease) in Accounts Payable Increase (Decrease) in Claims Payable Increase (Decrease) in Deferred Inflows - Pensions Increase (Decrease) in Net Pension Liability Increase (Decrease) in Compensated Absences Payable Increase (Decrease) in Deposits Payable

(2,195,341)

6,047,950 $

Total Cash and Cash Equivalents

$ 12,752,877 (2,090,974) (8,699,700)

3,472,067

(291,550)

Cash and Cash Equivalents, Beginning of the Year

7,984,269 (2,034,713) (2,477,489)

Electric Fund

600,526

1,912,428

1,353,995

(175,711) 38,134 (342,291) (6,637) (61,291) 512,757 2,163

1,334,168

510,206

(29,345) 5,791 (342,291) 119,892 (61,291) 512,757 131

(131,666) (204) 6,057 (473,942) 21,660 (84,865) 709,971 70,818

TOTAL CASH PROVIDED (USED) BY OPERATING ACTIVITIES

$

1,171,983

$

3,472,067

$

1,962,203

NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Amortization Related to Long-term Debt

$

-

$

23,356

$

-

The accompanying notes are an integral part of this statement.

28

Packet Pg. 62

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Water Fund

6.B.a

Non-major Airport Fund $

Totals

302,951 (31,425) (328,950)

$ 25,849,089 (5,721,763) (13,578,497)

Governmental Activities Internal Service Funds $

4,110,135 (547,750) (2,698,770)

(57,424)

6,548,829

863,615

(2,600) -

(3,399,390) 120,167 (949,077) -

973,817 (251,393) 4,053

(2,600)

(4,228,300)

726,477

35,237 -

(2,125,366) (1,397,009) (81,986) (1,444,000) (324,927)

(1,296,302) 31,251 -

35,237

(5,373,288)

(1,265,051)

2,550

154,716

(4,432)

2,550

154,716

(4,432) 320,609

(22,237)

(2,898,043)

293,586

49,351,670

271,349

$ 46,453,627

271,349 -

38,844,105 143 5,875,407 266,901 1,467,071

$

271,349

$ 46,453,627

$

6,373,787

$

(142,399)

$

$

127,797

$

$ $

3,708,530

6,053,178 $

6,373,787 6,373,787 -

98,157

2,562,884

365,172

1,024 (11,208) (1,503) (1,495)

(335,698) (204) 38,774 (1,158,524) 133,412 (207,447) 1,735,485 71,617

(2,135) 764 23,648 195,189 4,857 148,323 -

(57,424) -

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Enterprise Funds

$

6,548,829

$

863,615

$

23,356

$

-

29

Packet Pg. 63

6.B.a

Private-purpose Trust Funds ASSETS Cash and Investments Cash and Investments with Fiscal Agent Receivables: Accounts Notes Interest Receivable from the City of Healdsburg Capital Assets, Not Being Depreciated Capital Assets, Net of Accumulated Depreciation

$

3,574,560 4,793,289 9,945 360,345 8,725 4,055,534 528,300 359,641

Total Assets

13,690,339

LIABILITIES Accounts Payable Interest Payable Noncurrent Liabilities: Due within One Year Due in More than One Year

5,150 864,540 1,772,900 45,669,200

Total Liabilities

48,311,790

NET POSITION Net Position (Deficit) Held in Trust for Successor Agency and Other Purposes

$

(34,621,451)

The accompanying notes are an integral part of this statement.

30

Packet Pg. 64

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Statement of Net Position Fiduciary Funds June 30, 2017

6.B.a

Private-purpose Trust Funds ADDITIONS Taxes and Assessments Investment Earnings

$

Total Additions

3,987,226 164,590 4,151,816

DEDUCTIONS Community Development Depreciation Interest Expense

365,865 20,696 2,080,047

Total Deductions

2,466,608

Change in Net Position

1,685,208

Net Position - Beginning of Year

(36,306,659) $

Net Position - End of Year

(34,621,451)

The accompanying notes are an integral part of this statement.

31

Packet Pg. 65

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Statement of Changes in Net Position Fiduciary Funds Year Ended June 30, 2017

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

A) Reporting Entity The basic financial statements of the City of Healdsburg (City) include the financial activities of the City and its component unit: the Healdsburg Public Financing Authority (HPFA). The criteria used in determining the scope of the reporting entity are based on the provisions of Governmental Accounting Standards Board Statement (GASB) No.14 as amended by GASB No. 39 and No. 61. The City of Healdsburg is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the City appoints a voting majority of the component units’ Board or because the component unit will provide a financial benefit or impose a financial burden on the City. The component unit has been accounted for as a “blended” component unit of the City. Despite being legally separate, the HPFA is so intertwined with the City that it is, in substance, part of the City’s operations. Accordingly, the balances and transactions of this component unit are reported within the funds of the City. HPFA transactions are recorded in the Sewer Enterprise Fund. The following criteria were used in determining that the component unit was blended: The members of the City Council or other members appointed by the City Council act as governing body of the HPFA. In addition, the HPFA provide services, which benefit the City. No separate financial statements are issued for HPFA. The City participates in one joint power activity and a pooled arrangement through formally organized and separate entities. The financial activities of the Northern California Power Agency and the Redwood Empire Municipal Insurance Fund are not included in the accompanying basic financial statements as they are administered by boards separate from and independent of the City. (See Notes 10 and 11). B) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information about the reporting government as a whole except for its fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government (including its blended component units) is reported separately from discretely presented component units for which the primary government is financially accountable. The City has no discretely presented component units. For the most part, the effect of interfund activity has been removed from these statements.

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. The fund financial statements provide information about the City’s funds, including fiduciary funds and blended component units. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows for all proprietary funds. Internal service funds are also presented in these statements. Internal service balances and activities have been allocated between governmental activities and business-type activities in the government-wide financial statements. These internal service funds account for charges to other funds and departments for insurance, maintenance, and information services. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements and fiduciary fund statements. Under the economic resources measurement focus, all assets and liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange include property taxes, grants, entitlements, and donations. On the accrual basis, revenue from property taxes is recognized in the fiscal year in which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all the eligibility requirements have been satisfied.

33

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Proprietary funds distinguish operating revenues from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds principal ongoing operations. The principal operating revenues of the enterprise funds are chares to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources, as they are needed. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. However, special reporting treatments are used to indicate that they should not be considered “available spendable resources” since they do not represent net current assets. Recognition of governmental fund type revenue represented by noncurrent receivables is deferred until they become current receivables. Under the modified accrual basis of accounting, revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on long-term liabilities, claims payable, and compensated absences which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds and proceeds of long-term liabilities are reported as other financing sources. Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

34

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Fiduciary funds focus on net position and changes in net position. Trust funds use the flow of economic resources measurement focus and the accrual basis of accounting, except for the recognition of certain liabilities of defined benefit pension plans. Agency funds also use the accrual basis of accounting, but, since they are custodial in nature and do not involve the measurement of results of operations, they do not have a measurement focus. Fund Classifications - The funds designated as major funds are determined by a mathematical calculation consistent with GASB Statement No. 34. Major Governmental Funds The General Fund is the primary operating fund of the City. It is used to account for all revenues and expenditures that are not required to be accounted for in another fund. The Community Services Special Revenue Fund accounts for Transient Occupancy Tax funds received that are restricted for community services. The Streets Capital Projects Fund accounts for grant monies received that are restricted for street improvements. Major Enterprise Funds The Water Fund accounts for the activities of providing water utilities to the residents of the City. The Sewer Fund accounts for the activities of providing sewer utilities to the residents of the City. The Electric Fund accounts for the activities of the electric distribution operations. The City’s fund structure includes the following fund types: Governmental Fund Types Special Revenue Funds are used to account for and report proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. These funds are required by statute or ordinance to finance particular functions or activities of government. Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal, interest, and related costs on long-term obligations.

35

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets (other than those financed by proprietary funds and trust funds). Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, are used for the benefit of the City. Proprietary Fund Types Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses including depreciation) of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges. Internal Service Funds are used to account for the financing of special activities that provide services within the City. These activities include insurance and benefits, vehicle maintenance, information services and building maintenance. Fiduciary Fund Types Private Purpose Trust Funds are used to report trust arrangements under which principal and income benefits to support private organizations or other governments. C) Encumbrances Accounting is employed as an extension of the budgetary process. This method records purchase orders, contracts, and other commitments for the expenditure of funds in order to reserve that portion of the applicable appropriation. The City Council honors encumbrances outstanding at fiscal year-end. D) Cash and Investments Cash and Investments are pooled by the City for investment purposes. Investments are stated at fair value. Fair value is the value at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For the purpose of the statements of cash flows, cash and cash equivalents include highly liquid investments with original maturities of three months or less, including investments in the California Local Agency Investment Fund and Sonoma County Investment Fund.

36

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as interfund receivables/interfund payables (i.e., the current portion of interfund loans) or advances to/from other funds (the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as interfund receivables or interfund payables. Advances to other funds, as reported in the fund financial statements, are offset by non-spendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and tax receivables are shown net of an allowance for uncollectible accounts if applicable, and estimated refunds due. F) Inventory Inventory is valued at cost using the weighted average method. Inventory of the Enterprise Funds consists primarily of materials and supplies for utility operations. G) Prepaids Payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements. H) Capital Assets Capital Assets (including infrastructure) are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Donated capital assets received prior to the implementation of GASB 72 were recorded at fair value on the date of donation. Donated capital assets received subsequent to the implementation of GASB 72 are recorded at acquisition value as of the date received. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of 3 years or more. Capital assets include additions to public domain (infrastructure) including certain improvements such as pavement, curb and gutter, sidewalks, traffic control devices, bridges, and right-of-way corridors within the City. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the Government-wide Financial Statements and in the Fund Financial Statements of the Proprietary Funds. Depreciation is charged as an expense against operations

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

E) Receivables and Payables

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

and accumulated depreciation is reported on the respective balance sheet/statement of net position. The lives used for depreciation purposes of each capital asset class are: Buildings Improvements other than buildings Water distribution lines Vehicles Machinery and equipment Office furniture, computers, and equipment Leased property Infrastructure I)

10 - 30 years 10 years 10 - 50 years 3 -7 years 10 years 3 - 10 years 5 - 10 years 50 years

Compensated Absences Vested Vacation and Sick Leave obligations are fully funded and recorded in the Insurance and Benefit Internal Service Fund as accrued compensated absences.

J) Property Taxes Property Tax Levy, Collection and Maximum Rates - The State of California (State) Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed one percent of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100 percent of market value as defined by Article XIII A and may be adjusted by no more than two percent per year unless the property is sold or transferred. The State Legislature has determined the method of distribution of receipts from a one percent tax levy among the counties, cities, school districts, and other districts. Sonoma County assesses properties, bills for, and collects secured and unsecured property taxes as follows: Secured Lien dates January 1 Levy dates July 1 Due dates 50% on November 1, 50% on February 1 Delinquent as of December 10 (for November), April 10 (for February)

Unsecured January 1 July 1 July 1 August 31

The term “unsecured” refers to taxes on personal property. These taxes are secured by liens on the property being taxed. The City accrues only those taxes, which are levied for the tax year and received within sixty days after year-end.

38

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

The City reports its risk activities in the Insurance and Benefit Service Fund for its workers compensation and Building Maintenance Fund for its general liability. When it is probable that a claim liability has been incurred at fiscal year-end, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage under its selfinsurance program. Estimated claims losses, if any, include an accrual for IBNR (“incurred but not reported”) claims. Small dollar claims are recorded as expenditures when paid. L) Net Position In the government-wide financial statements, proprietary fund financial statements, and fiduciary fund financial statements, net position is reported in three categories: (1) net investment in capital assets, (2) restricted, and (3) unrestricted. Restricted net position represent net position restricted by parties outside of the City (such as creditors, grantors, contributors, and laws and regulations of other governments) and includes unspent proceeds of bonds issued to acquire or construct capital assets. All other net position is considered unrestricted. M) Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the statement of net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position. N) Fund Balance Fund balances in governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. The classifications are as follows:

39

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

K) Claims Payable

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Nonspendable - The nonspendable fund balance category includes amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash. It also includes the long-term amount of interfund loans. Restricted - Fund balance is reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or is imposed by law through constitutional provisions or enabling legislation (City ordinances). Enabling legislation authorizes the City to assess, levy, charge, or otherwise mandate payment of resources (from external resource providers) and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. Legal enforceability means that the City can be compelled by an external party-such as citizens, public interest groups, or the judiciary to use resources created by enabling legislation only for the purposes specified by the legislation. Committed - The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by formal action (ordinance or resolution) of City Council. Those committed amounts cannot be used for any other purpose unless City Council removes or changes the specified use by taking the same type of action (ordinance or resolution) it employed to previously commit those amounts. In contrast to fund balance that is restricted by enabling legislation, committed fund balance classification may be redeployed for other purposes with appropriate due process. Constraints imposed on the use of committed amounts are imposed by City Council, separate from the authorization to raise the underlying revenue; therefore, compliance with these constraints is not considered to be legally enforceable. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. Assigned – Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount that is not restricted or committed. In the General Fund, assigned amounts represent intended uses established by City Council or delegated by a City official, City Charter, or ordinance. Unassigned - Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned.

40

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Specifically, the City has made certain estimates and assumptions relating to the collectability of its receivables (including accounts receivable), and notes receivable, the fair value of investments, valuation of capital assets and depreciation expense, OPEB liability, net pension liability, and the ultimate outcome of claims payable. Actual results could differ from those estimates and assumptions. P) Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and balance sheet for the governmental funds will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents consumption of net position that applies to future period(s) and so will not be recognized as an outflow of resources (expense) until then. The City reports deferred outflows as a result of the City’s implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which qualify for reporting in this category. In addition, deferred outflows are reported for deferred amounts on bond refundings. In addition to liabilities, the statement of financial position and balance sheet for the governmental funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has certain items, which arise only under the modified accrual basis of accounting, which qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, special assessments, grant receivables, and other miscellaneous receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. In addition, the City reports deferred inflows as a result of the City’s implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which qualify for reporting in this category. Q) Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Healdsburg’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 41

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

O) Use of Estimates

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

R) New Accounting Pronouncements The Governmental Accounting Standards Board has issued the following Statements, which may affect the City’s financial reporting requirements in the future: GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This statement was issued to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions. This GASB Statement is required to be implemented in financial statements issued for the periods beginning after June 15, 2017. The City has elected not to early implement this statement and has not determined its effect on the financial statements. GASB 83, Certain Asset Retirement Obligations: This Statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this Statement. The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. GASB 86, Certain Debt Extinguishment Issues: This Statement establishes reporting requirements for when a government places cash and other monetary assets acquired with only existing resources in an irrevocable trust to extinguish debt. In financial statements using the economic resources measurement focus, governments should recognize any difference between the reacquisition price (the amount required to be placed in the trust) and the net carrying amount of the debt defeased in substance using only existing resources as a separately identified gain or loss in the period of the defeasance. The requirements of this Statement are effective for reporting periods beginning after June 15, 2017. GASB 87, Leases: This Statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. The requirements of this Statement are effective for reporting periods beginning after December 15, 2019.

42

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Deficit Fund Balances/Net Position Nonmajor Governmental Funds - A deficit fund balance of $14,638 exists in the North Area Special Revenue Fund. The City plans on removing the deficits through future development contributions and benefit assessments. 3) CASH AND INVESTMENTS The City’s cash and investments consisted of the following at June 30, 2017: Cash on Hand Deposits with Financial Institutions Investments Pension Stabilization Investments

$

1,904 6,366,994 70,696,579 4,988,132

Total Cash and Investments

$ 82,053,609

The City’s deposits and investments are reflected in the accompanying basic financial statements as follows: GovernmentWide Statement of Net Position Unrestricted: Cash and Investments Restricted: Cash and Investments Pension Stabilization Investments Cash and Investments with Fiscal Agent

$

65,768,556

Statement of Fiduciary Net Position $

2,928,929 4,988,132 143 $

73,685,760

$

Total

3,574,560

$ 69,343,116

4,793,289

2,928,929 4,988,132 4,793,432

8,367,849

$ 82,053,609

Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

43

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

2) STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Authorized Investment Type Bankers Acceptances Certificates of Deposits Negotiable Certificates of Deposit Commercial Paper State of California Local Agency Investment Fund (State Pool) Sonoma County Pooled Fund Medium Term Notes Money Market Funds Passbook Savings and Money Market Accounts (Insured) U.S. Treasury Obligations U.S. Government Agency Issues Repurchase Agreements Mortgage Pass-through and Asset Backed Securities

Maximum Maturity 180 days 5 years 5 years 270 days

Maximum Percentage of Portfolio* 40% 20% 30% 25%

Maximum Investment In One Issuer None None None None

N/A N/A 5 years N/A

Unlimited 10% 30% Unlimited

$50,000,000 None None None

None None None 30 days

Unlimited Unlimited Unlimited 10%

None None None None

5 years

20%

None

*Excluding amounts held by bond trustee and the Pension Stabilization trustee that are not subject to California Government Code restrictions. Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Authorized Investment Type United States Treasury Obligations United States Government Sponsored Enterprise Securities Banker’s Acceptances Commercial Paper Money Market Mutual Funds Investment Contracts Sonoma County Pooled Fund

Maximum Maturity None

Maximum Percentage of Portfolio* None

Maximum Investment In One Issuer None

None 30 days 270 days N/A 30 years N/A

None None None None None 10%

None None None None None None

44

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

3) CASH AND INVESTMENTS - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Investment Type Certificates of Deposit Money Market Funds Federal Agency Securities U.S. Treasury Securities State Investment Pool Medium Term Notes Held by Bond Trustee: County Investment Pool Money Market Funds Total

12 Months or Less

Total $

2,496,867 21,145 24,124,252 5,971,100 31,743,191 -

$

70,696,579

$

501,690

$

493,747

1,988,020 1,993,200

9,974,498 3,977,900

$ 4,482,910

$ 14,446,145

49 to 60 Months $ 8,169,294

31,743,191

200,029 6,139,995 $

1,501,430 21,145 3,992,440

Remaining Maturity (in Months) 13 to 24 25 to 48 Months Months

200,029 6,139,995 $

43,598,230

$

8,169,294

Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating, by Standard and Poor’s, as of fiscal year end for each investment type:

45

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

3) CASH AND INVESTMENTS - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 3) CASH AND INVESTMENTS - Continued

Investment Type Certificates of Deposit Money Market Funds Federal Agency Securities U.S. Treasury Securities State Investment Pool Medium Term Notes Held by Bond Trustee: County Investment Pool Money Market Funds Total

Total as of June 30, 2017 $

$

Minimum Legal Rating

2,496,867 21,145 24,124,252 5,971,100 31,743,191 -

N/A N/A N/A N/A N/A N/A

200,029 6,139,995

N/A N/A

AAA $

AA

A

$

Unrated

$

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Rating as of Fiscal Year End

2,496,867 21,145

24,124,252 5,971,100

31,743,191

200,029 6,139,995

70,696,579

$ 36,235,347

$

-

$

-

$ 34,461,232

Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City’s investments are as follows:

Issuer

Investment Type

Reported Amount

Maturity

Interest

FFCB FHLB FNMA FHLMC

Federal agency securities Federal agency securities Federal agency securities Federal agency securities

$ 9,838,380 3,970,080 6,410,512 3,905,280

2019 – 2021 2018 – 2021 2018 – 2021 2017 – 2021

1.12 – 1.81% 1.00 – 1.60% 1.00 – 1.50% 1.15 – 1.60%

Since the City pooled all of its investments, there were no investments in any one issuer that represent 5% or more of total investments by reporting unit (primary government, governmental activities, business-type activities, major fund, nonmajor funds in the aggregate, etc.). Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for 46

Packet Pg. 80

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2017, $6,116,994 of the City’s deposits (bank balances) in excess of the Federal Depository Insurance limits were held in collateralized accounts. As of June 30, 2017, the City investments in the following investment types were held by the same broker-dealer (counterparty) that was used by the City to buy the securities: Reported Investment Type Amount Certificates of deposit Federal agency securities U.S. Treasury securities Money market funds

$ 2,496,867 24,124,252 5,971,100 21,145

Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2017: • • •

U.S. Treasury Securities of $5,971,100 are valued using quoted market prices (Level 1 inputs) Federal Agency Securities of $24,124,252 are valued using a matrix pricing model (Level 2 inputs) Certificates of Deposit of $2,496,867 are valued using a matrix pricing model (Level 2 inputs)

47

Packet Pg. 81

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

3) CASH AND INVESTMENTS - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 3) CASH AND INVESTMENTS - Continued

Investments of funds held in the Pension Stabilization Investment Program are governed by the Investment Guidelines Document for the investment account and by the agreement for administrative services with the Public Agency Retirement Services (PARS), rather than the general provisions of the California Government Code or the City’s investment policy. The Pension Stabilization Investment Program’s investment policy is established and can be modified by the City. The goal of the Pension’s investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay the present and future obligations of the City’s retirement Plan. The assets in this program will eventually be used to fund Pension Plan obligations for assets managed in the CalPERS Trust. The assets are also available to mitigate the potential negative impact of future rate hikes from CalPERS. The account’s risk tolerance has been rated moderately conservative, which demonstrates that the account can accept some price fluctuations to pursue its investment objectives. As for duration, the investment manager will maintain the portfolio duration within +/- 25% of the benchmark duration at all times. The benchmark duration is the BC Aggregate Bond benchmark. At June 30, 2017, the benchmark duration was 5.50, and the plan’s duration was 4.95. The target asset allocation of the portfolio is 20-40% to equity investments, 50-80% to fixed income investments, and 0-20% to cash. Specifically identifiable investments are recorded by the Trustee in its records. All investments are either held by the counterparty or the counterparty’s trust department or agent, but not in the City’s name directly. Purpose. Pension volatility mitigation-contributions from the Fund can be either transferred to CalPERS or the City at the City’s discretion to offset fluctuations in the required annual contributions. Assets can be accessed anytime to fund the City’s pension obligations and defray reasonable expenses associated therewith. The table below identifies the investment types that are authorized for investments held in the pension stabilization investment program. The table also identifies certain provisions of policy that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment Type Mortgage-backed Securities Asset-backed Securities Collateral Mortgage Obligations Commercial Mortgage-backed Securities U.S. Government Debt Obligations Corporate Debt Securities - U.S. or Foreign Eligible Instruments Issued Pursuant to SEC Rule 144(a) Municipal Bonds

48

Maximum Investment 5% 5% 5% 5% None 5% 10% 5%

Packet Pg. 82

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Pension Stabilization Investment Program

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Pension stabilization investments held and the percentage of the pension investment portfolio at June 30, 2017 was as follows:

Pension Stabilization Investments Equity Investments iShares Core S&P 500 Fund iShares S&P 500 Value Fund iShares S&P 500 Growth Fund iShares Russell MidCap Value Fund iShares Russell 2000 Value Fund iShares Russell 2000 Growth Fund iShares MSCI EAFE Index Fund Vanguard FTSE Emerging Markets ETF Vanguard REIT ETF Fixed Income Highmark Fixed Income Strategy Cash First American Prime Obligations Fund Total Pension Stabilization Investments

% of Portfolio

Fair Value $

467,591 133,089 136,576 113,345 107,221 111,557 266,603 94,725 68,498

9% 3% 3% 2% 2% 2% 5% 2% 1%

3,426,115

69%

62,812

1%

$ 4,988,132

100%

Information about the sensitivity of the fair values of the City’s pension stabilization investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity: Remaining Maturity (in Months)

Investment Type U.S. Treasury Securities Money Market Funds Federal Agency Securities Municipal Bonds Mutual Funds Corporate Bonds Total

12 Months or Less

Total $

$

753,768 62,812 784,080 61,353 1,499,205 1,826,914

$

4,988,132

$

49

75,584 62,812

13 to 60 Months $

252,137

More than 60 Months $

426,047 784,080 61,353

1,499,205

1,637,601

990,649

836,265

$ 1,242,786

$ 2,107,745

Packet Pg. 83

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

3) CASH AND INVESTMENTS - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 3) CASH AND INVESTMENTS - Continued

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the the City’s pension stabilization investment policy and the actual rating, by Standard and Poor’s, as of fiscal year end for each investment type: Rating as of Fiscal Year End

Investment Type U.S. Treasury Securities Money Market Funds Federal Agency Securities Municipal Bonds Mutual Funds Corporate Bonds Total

Total as of June 30, 2017 $

$

Minimum Legal Rating

753,768 62,812 784,080

BBBN/A BBB-

61,353 1,499,205 1,826,914

BBBN/A BBB-

AAA $

A/AA

753,768

$

BBB $

Unrated $ 62,812

784,080 61,353 1,499,205 337,074

4,988,132

$ 1,874,922

$

740,629

749,211

801,982

$ 749,211

$ 1,562,017

Concentration of Credit Risk The pension stabilization investment policy of the City contains limitations on the amount that can be invested in any one issuer. Pension stabilization investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City’s pension stabilization investments are as follows:

Issuer FNMA

Reported Amount

Investment Type Federal agency securities

$

583,159

% of Portfolio 11.7%

Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City’s pension stabilization investments have the following recurring fair value measurements as of June 30, 2017:

50

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Disclosures Relating to Credit Risk

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

• • • •

U.S. Treasury Securities of $753,768 are valued using quoted market prices (Level 1 inputs) Federal Agency Securities of $784,080 are valued using a matrix pricing model (Level 2 inputs) Municipal Bonds of $61,353 are valued using a matrix pricing model (Level 2 inputs) Corporate Bonds of $1,826,914 are valued using a matrix pricing model (Level 2 inputs)

4) INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS Due to/from Other Funds The following amounts due to and due from other funds at June 30, 2017 represent temporary amounts advanced to pay for operating expenses or to cover short-term cash overdrafts: Receivable Funds General Fund Electric Fund

Payable Funds Nonmajor Governmental Funds Nonmajor Governmental Funds

Total

Amount $

23,553 15,000

$

38,553

Interfund Transfers Transfers In

Transfers Out

Amount

General Fund

Nonmajor Governmental Funds Electric Fund Internal Service Funds

$

50,094 136,697 208,619

Community Services Fund

Nonmajor Governmental Funds

63,584

Streets Fund

General Fund Nonmajor Governmental Funds Water Fund Sewer Fund Electric Fund

1,687,798 4,626,841 291,002 319,029 110,566

Nonmajor Governmental Funds General Fund Nonmajor Governmental Funds Streets Fund Community Services Fund Nonmajor Airport Fund Internal Service Funds

601,547 1,618,504 39,763 316,743 2,600 42,774

Sewer Fund

Nonmajor Governmental Funds

60,167

Electric Fund

Water Fund

60,000

Internal Service Fund

General Fund Community Services Fund Electric Fund

Total

918,209 26,425 29,183 $ 11,210,145

51

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

3) CASH AND INVESTMENTS - Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

The transfer from the Nonmajor Governmental Funds of $50,094 to the General Fund was to fund a transitional housing agreement. The transfer to the General Fund from the Electric Fund of $136,697 was for electric costs in-lieu of taxes. The transfer to the General Fund from the Internal Service Funds of $208,619 was to fund project costs. The Nonmajor Governmental Funds transferred $63,584 to the Community Services Special Revenue Fund to fund project costs. The General Fund transferred $601,547 to the Nonmajor Governmental Funds was for debt service costs. The Nonmajor Governmental Funds transferred $1,612,887 to other Nonmajor Governmental Funds for the purchase of low income housing properties. In addition, the remaining transfers to the Nonmajor Governmental Funds totaling $407,947 was for debt service payments. The Nonmajor Governmental Funds transferred $60,167 to the Sewer Enterprise Fund to fund project costs. The Water Enterprise Fund transferred $60,000 to the Electric Enterprise Fund to fund project costs. The transfers to the Internal Service Fund from the various funds was to pay for various project costs.

5) NOTES RECEIVABLE Notes receivable in the amount of $8,483,802 at June 30, 2017 consisted of the following: Housing Loans Individuals

Amount $ 2,363,400

Habitat for Humanity

315,000

Eden Housing

4,009,978

Healdsburg Pacific Associates

1,786,437

Burbank Housing

3,158,144

Subtotal

11,632,959

Less: Allowance for Uncollectible Loans Net Housing Loans Receivable

(3,158,939) 8,474,020

Employee Computer Loans

9,782

Total Notes Receivable

$ 8,483,802

52

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

4) INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 6) CAPITAL ASSETS

Beginning Balance Governmental Activities Capital Assets, Not Depreciated: Land Right of Ways Construction in Progress Total Capital Assets, Not Depreciated

$

18,664,887 6,681,379 1,428,693

Increases

$

6,384,664

Ending Balance

Decreases

$

(18,183)

$

18,664,887 6,681,379 7,795,174

26,774,959

6,384,664

(18,183)

33,141,440

Capital Assets Being Depreciated: Land Improvements Streets Buildings Machinery and Equipment Infrastructure Total Capital Assets Being Depreciated

1,754,468 51,541,307 25,304,742 8,095,793 912,056

655,760 513,316 1,839,205 658,726 -

(443,275) -

2,410,228 52,054,623 27,143,947 8,311,244 912,056

87,608,366

3,667,007

(443,275)

90,832,098

Less Accumulated Depreciation: Land Improvements Streets Buildings Machinery and Equipment Infrastructure

380,367 11,376,505 11,883,578 5,841,380 182,934

161,804 1,032,012 778,123 321,558 29,984

(429,031) -

542,171 12,408,517 12,661,701 5,733,907 212,918

29,664,764

2,323,481

(429,031)

31,559,214

57,943,602

1,343,526

(14,244)

59,272,884

Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Governmental Activities Capital Assets, Net

$

84,718,561

$

7,728,190

$

(32,427)

$

92,414,324

Depreciation was charged to functions/programs of the primary government as follows: Governmental Activities Unallocated Capital assets held by the City's internal service funds are charged to various funcitons based on their usage of the assets Total Depreciation Expense

$

365,172 $

53

Amount 1,958,309

2,323,481

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Capital assets activity for the year ended June 30, 2017 was as follows:

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Beginning Balance Business-type Activities: Capital Assets, Not Depreciated: Land Construction in Progress Total Capital Assets, Not Depreciated

$

Capital Assets Being Depreciated: Buildings and Improvements Utility Systems Drainage Machinery and Equipment Operations Total Capital Assets Being Depreciated Less Accumulated Depreciation: Buildings and Improvements Utility Systems Drainage Machinery and Equipment Operations Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Business-type Activities Capital Assets, Net

$

Increases

1,245,876 956,049

$

2,003,066

Ending Balance

Decreases

$

-

$

1,245,876 2,959,115

2,201,925

2,003,066

-

4,204,991

2,969,311 109,116,011 10,192,183 2,318,189 3,381,750

53,985 68,319 -

-

2,969,311 109,116,011 10,246,168 2,386,508 3,381,750

127,977,444

122,304

-

128,099,748

1,843,472 34,721,381 4,131,935 1,457,182 868,165

73,352 2,138,123 203,844 85,207 62,358

-

1,916,824 36,859,504 4,335,779 1,542,389 930,523

43,022,135

2,562,884

-

45,585,019

84,955,309

(2,440,580)

-

82,514,729

87,157,234

$

(437,514)

$

-

$

86,719,720

Depreciation was charged to functions/programs of the primary government as follows: Business-type Activities

Amount

Water Sewer Electric Airport

$

Total Depreciation Expense - Business-type

$ 2,562,884

54

600,526 1,353,995 510,206 98,157

Packet Pg. 88

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6) CAPITAL ASSETS – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Capital asset activity for the Successor Agency Private-purpose Trust Fund for the year ended June 30, 2017 is as follows: Beginning Balance Fiduciary Funds: Capital Assets, Not Depreciated: Land Total Capital Assets, Not Depreciated

$

Capital Assets Being Depreciated: Buildings Total Capital Assets Being Depreciated Less Accumulated Depreciation: Buildings Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Fiduciary Funds Capital Assets, Net

$

Increases

528,300

$

Ending Balance

Decreases

-

$

-

$

528,300

-

656,094

-

(35,223)

620,871

656,094

-

(35,223)

620,871

240,534

20,696

-

261,230

240,534

20,696

-

261,230

415,560

(20,696)

(35,223)

(20,696) $

(35,223)

943,860

$

-

528,300 528,300

359,641 $

887,941

7) LONG-TERM LIABILITIES Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2017, was as follows: Beginning Balance Governmental Activities: Pension Obligation Bonds Net Pension Liability Compensated Absences HUSD Capital Lease Payable Successor Agency Payable OPEB Governmental Activities Long-term Liabilities

Deletions

Ending Balance

$ 4,209,307 $ 16,384,791 4,581,239 1,565,509 1,743,135 1,868,007 1,997,472 440,000 38,000

$ 581,173 1,594,812 107,900 102,784 25,000

$ 3,628,134 20,966,030 1,713,832 1,760,107 1,894,688 453,000

$ 629,727 860,511 114,050 103,041 -

$ 26,465,086 $ 6,362,374

$ 2,411,669

$ 30,415,791

$1,707,329

Additions

55

Due Within One Year

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6) CAPITAL ASSETS – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Beginning Balance

Additions

Business-type Activities: 2005 D – CSCDA Water/Wastewater $ 2,215,000 $ 2014 Water Refunding Bonds 7,165,000 2015 Wastewater Refunding Bonds 25,515,000 Premium on Bonds 596,288 Successor Agency Payable 2,278,069 Net Pension Liability 6,629,673 1,735,485 Pension Obligation Bonds 2,353,193 Business-type Activities Long-term Liabilities $ 46,752,223 $ 1,735,485

Deletions

Ending Balance

Due Within One Year

$ 110,000 449,000 885,000 31,384 117,223 324,927

$ 2,105,000 6,716,000 24,630,000 564,904 2,160,846 8,365,158 2,028,266

$

$ 1,917,534

$ 46,570,174

$ 1,967,591

115,000 473,000 910,000 117,517 352,074

Governmental Activities: A. Compensated Absences: Compensated absences are liquidated by the Insurance and Benefit Internal Service Fund and are reported as a liability of the governmental activities. B. Pension Obligation Bonds On September 7, 2012, the City issued $2,578,200 Series A and $6,339,200 Series B of 2012 Taxable Pension Obligation Bonds. The proceeds were used to pay costs of issuance totaling $108,042 and pay off the CalPERS Side Funds amounting to $2,546,762 (staff) and $6,262,596 (miscellaneous). The bonds carry interest rates of 4.25% and 4.37% for Series A and B respectfully. The final maturity is June 30, 2020 and June 30, 2023 for Series A and B respectfully. Semi-annual payments of principal and interest are due each June 30 and December 31 for each issue. Because the City’s enterprise funds are partially responsible for debt service on these bonds, the liability for the bonds is split between the governmental activities and business-type activities as follows: $3,628,134 in governmental activities, and $2,028,266 in business-type activities. Future minimum debt service requirements for the Series A and B bonds are as follows: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 Totals

Principal $ 981,800 1,061,600 1,145,700 761,300 821,300 884,700

Interest $ 222,277 181,481 137,392 94,493 62,279 27,537

$

$

5,656,400

56

725,459

$

$

Total 1,204,077 1,243,081 1,283,092 855,793 883,579 912,237 6,381,859

Packet Pg. 90

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 7) LONG-TERM LIABILITIES – Continued

On February 1, 2014, the Healdsburg Public Financing Authority entered into a lease purchase agreement with the Healdsburg Unified School District (District) to purchase the Foss Creek School Property. As part of the agreement, the District loaned the City $2,095,007 to be paid over a 15 year period with an interest rate of 2.4%. The book value of the property acquired through this capital lease and accumulated depreciation at June 30, 2017 was $5,007,245 and $667,633, respectively. The following represents the minimum required lease payments for the HUSD Capital Lease Payable: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Totals

$

$

Principal 114,050 118,441 124,105 129,969 136,228 142,685 149,540 156,690 164,138 171,706 179,717 172,838 1,760,107

$

$

Interest 40,622 38,884 36,042 33,063 29,944 26,675 23,250 19,661 15,901 12,238 8,340 4,028 288,648

$

$

Total 154,672 157,325 160,147 163,032 166,172 169,360 172,790 176,351 180,039 183,944 188,057 176,866 2,048,755

D. Successor Agency Payable In 2008, the former Redevelopment Agency of the City of Healdsburg (RDA) loaned the City of Healdsburg (City) $4,495,000 ($2,395,000 to the Electric Fund for upgrades to Badger Substation and $2,100,000 to the Community Services Fund for long-term lease of a school facility) in accordance with executed loan agreements. In January 2012, the Board of Directors for the RDA adopted a resolution forgiving the loans between the RDA and the City. In June 2015, the California Department of Finance disallowed the forgiveness of the loans. The Successor Agency to the former RDA is now responsible for the collection of this loan payment. The loans are payable annually over a period of 20 years at an interest rate of .25%. As of June 30, 2017, the amount due from the Electric Fund and Governmental Activities was $2,160,846 and $1,894,688. The Community Services Special Revenue fund is expected to be responsible for principal and interest payments for the portion related to Governmental Activities. The following represents the minimum required loan repayments for the Successor Agency Payable:

57

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

C. HUSD Capital Lease Payable

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Totals

$

$

Principal 220,558 221,109 221,662 222,216 222,771 223,328 223,887 224,446 225,007 225,570 226,134 226,699 227,266 227,834 228,404 228,975 229,547 230,121 4,055,534

$

$

Interest 10,139 9,587 9,035 8,481 7,925 7,368 6,810 6,250 5,689 5,126 4,562 3,997 3,430 2,862 2,293 1,722 1,149 575 97,000

$

$

Total 230,697 230,696 230,697 230,697 230,696 230,696 230,697 230,696 230,696 230,696 230,696 230,696 230,696 230,696 230,697 230,697 230,696 230,696 4,152,534

E. Other Post-employment Benefits (OPEB): Plan Description: The City provides post-employment health care benefits through a single employer defined benefit plan. At retirement, employees can elect to receive Blue Cross, Sutter or Kaiser medical coverage through the City medical plan at the retiree’s expense. Retirees (service or disability retiring through CalPERS directly through the City who are age 50 or over and who have a minimum of 10 years of service with a REMIF City) are eligible to obtain medical coverage. While the City does not directly contribute towards the cost of insurance premiums for retirees, the ability to obtain coverage at an active employee rate constitutes a significant economic benefit to the retirees, called an ‘implicit subsidy” under GASB 45. Medical coverage is provided for the surviving spouse of retired employees and the surviving spouse of active employees who upon death had attained age 50 and who had a minimum of 10 years of service with a REMIF City. The Plan does not provide a publicly available financial report. Funding Policy: The contribution requirements of plan members and the City are established and may be amended by the City, the City’s Council, and/or the employee associations. The City is currently funding this OPEB obligation on a pay-as-you-go basis. For the fiscal year ended June 30, 2017, the City paid $25,000 in health care costs for its retirees and their covered dependents. 58

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 7) LONG-TERM LIABILITIES – Continued

The City’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded liabilities of the plan over a period not to exceed twenty four years. The following table shows the components of the City’s annual OPEB cost for the fiscal year, the amount actually contributed to the plan, and changes in the net OPEB obligation to the Retiree Health Plan:

Annual Required Contribution (ARC) $ Interest on Net OPEB Obligation Adjustment to ARC Annual OPEB Cost Actual Contributions Made Increase in Net OPEB Obligation Net OPEB Obligation - Beginning of Year Net OPEB Obligation - End of Year $

59,000 17,000 (38,000) 38,000 25,000 13,000 440,000 453,000

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year ended June 30, 2017, 2016 and 2015 were as follows: THREE-YEAR TREND INFORMATION Percentage of Annual Annual Contribution Annual OPEB (Net of Adjustments) Cost Contributed OPEB Cost

Fiscal Year Ended 6/30/15 6/30/16 6/30/17

$ $ $

36,000 37,000 38,000

$ $ $

22,000 18,000 25,000

33.85% 50.00% 65.79%

Net OPEB Obligation (Asset) $ $ $

421,000 440,000 453,000

Funded Status and Funding Progress: In the June 30, 2015 actuarial valuation, the plan was zero percent funded. The actuarial accrued liability for benefits was $689,000, and the actuarial value of assets was zero, resulting in an unfunded accrued liability (UAL) of $689,000. The covered payroll (annual payroll of active employees covered by the plan) was $9,615,000 and the ratio of the UAL to the covered payroll was 7.17%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about rates of employee turnover, retirement, mortality, as well as economic assumptions regarding claim costs per retiree, healthcare inflation, and interest rates. Amounts 59

Packet Pg. 93

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Annual OPEB Cost and Net OPEB Obligation:

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the June 30, 2015, actuarial valuation, the entry age normal cost method was used. The actuarial assumptions included an investment interest rate of 4.0% per annum, a projected salary increase of 3.25% per annum and a general inflation rate of 3.0% per annum. Amortization was based on a level percent of payroll over a 24 year closed period. Business-type Activities: A. 2005 Series D CSCDA Water/Sewer Revenue Bonds In October 2005, the City, through the California Statewide Communities Development Authority, issued $6,505,000 in bonds to provide funds to defease the 1996 Sewer Improvement Certificates and the 2000 Series B Water and Sewer CSDA Certificates, which were originally issued to finance sewer improvements. The proceeds were placed in an irrevocable trust with an escrow agent to provide for future debt service payments on the 1996 Sewer improvement Certificates and the 2000 Series B Water and Sewer CSDA Certificates. The refunded bonds are considered to be defeased and the liability has been removed from long-term debt. Interest on the 2005 bonds is payable semiannually, on April 1 and October 1, with the principal payments due annually on October 1 of each year. Net revenues of the water and wastewater utilities are pledged as security for the bonds. In July 2015, the City issued the 2015 Wastewater Revenue Refunding Bonds, which defeased the remaining Sewer Bonds of the 2005 CSDA Bonds of $2,440,000. The 2005 CSDA Sewer Bonds are considered to be defeased and the liability has been removed from long-term debt. See the 2015 Wastewater Revenue Refunding Bonds, Series A for more information on the refunding. The following represents the future debt service requirements for the 2005 Series D CSCDA Water Revenue Bonds:

60

Packet Pg. 94

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Totals

Principal $ 115,000 115,000 120,000 125,000 130,000 135,000 145,000 150,000 160,000 170,000 170,000 180,000 190,000 200,000

Interest $ 94,850 90,250 85,475 80,375 74,988 68,850 61,850 54,475 46,725 38,475 30,294 22,200 13,644 4,625

$

$

2,105,000

767,076

$

$

Total 209,850 205,250 205,475 205,375 204,988 203,850 206,850 204,475 206,725 208,475 200,294 202,200 203,644 204,625 2,872,076

B. 2014 Water Refunding Bonds In February of 2014, the City issued $7,965,000 in Water Revenue Refunding Bonds, to refund the 2001 A and 2002 C outstanding bonds (current refunding). Proceeds from the 2014 bonds were placed in escrow to refund in full the 2001 A and 2002 C bonds, and to pay costs of issuance. The following represents the future debt service: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Totals

$

$

Principal 473,000 496,000 508,000 531,000 557,000 583,000 604,000 462,000 484,000 347,000 253,000 262,000 270,000 284,000 297,000 305,000 6,716,000

61

$

$

Interest 268,899 248,793 227,959 206,400 183,824 160,169 135,539 113,420 93,790 76,547 64,097 53,411 42,371 30,876 18,820 6,329 1,931,244

$

$

Total 741,899 744,793 735,959 737,400 740,824 743,169 739,539 575,420 577,790 423,547 317,097 315,411 312,371 314,876 315,820 311,329 8,647,244

Packet Pg. 95

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

C. 2015 Wastewater Revenue Refunding Bonds, Series A In July of 2015, the City issued $26,625,000 in Wastewater Revenue Refunding Bonds, Series A, to refund the 2005 and 2006 Wastewater Revenue bonds (current refunding). Proceeds from the 2015 bonds were placed in escrow to refund in full the 2005 and 2006 bonds, and to pay costs of issuance. The following represents the future minimum debt service requirements for the 2015 Wastewater Revenue Refunding Bonds: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

Principal $ 910,000 940,000 975,000 1,015,000 1,055,000 1,095,000 1,140,000 1,190,000 1,235,000 1,290,000 1,335,000 1,375,000 1,420,000 1,470,000 1,520,000 1,575,000 1,635,000 1,695,000 1,760,000

Interest $ 881,600 853,850 820,250 780,450 739,050 696,050 651,350 604,750 556,250 505,750 459,925 418,416 373,856 325,975 274,569 219,422 160,219 97,781 33,000

Totals

$ 24,630,000

$

9,452,513

$

Total 1,791,600 1,793,850 1,795,250 1,795,450 1,794,050 1,791,050 1,791,350 1,794,750 1,791,250 1,795,750 1,794,925 1,793,416 1,793,856 1,795,975 1,794,569 1,794,422 1,795,219 1,792,781 1,793,000

$ 34,082,513

Fiduciary Fund Long-term Liabilities: Long-term liabilities of the former Healdsburg Redevelopment Agency were transferred to the Successor Agency Private-purpose Trust Fund during 2011-12 as a result of the State’s action to dissolve redevelopment agencies. The following is a schedule of changes in long-term debt of the Successor Agency for the fiscal year ended June 30, 2017:

62

Packet Pg. 96

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Beginning Balance Tax Allocation Bonds: 2002 Series B 2010 Series 2014 Series A 2014 Series B 2015 Series A 2015 Series B Total

Deletions

Ending Balance

55,000 330,000 473,200 187,900 405,900 212,200 $ 1,664,200

$ 1,260,000 19,940,000 9,385,100 3,693,000 8,810,700 4,353,300 $ 47,442,100

Additions

$ 1,315,000 20,270,000 9,858,300 3,880,900 9,216,600 4,565,500 $ 49,106,300

$

-

$

$

Due Within One Year $

60,000 395,000 488,600 191,000 412,700 225,600 $ 1,772,900

Tax Allocation Bonds: A. 2002 Series B In August 2004, the Agency issued $1,800,000 Series B 2002 Tax Allocation Bonds. The Bonds were issued for the purpose of providing funds to finance the construction of the Alliance Medical Clinic, which the Agency determined is a benefit to the Sotoyome Project Area. Interest on the bonds is at 4.75% with semiannual debt service payments due February 1 and August 1, with principal maturing annually August 1, 2005 through 2031. Debt service payments will be made from tax increment revenue received by the Trust. Future debt service on these bonds is as follows: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Totals

$

$

Principal 60,000 60,000 65,000 70,000 70,000 75,000 80,000 80,000 85,000 90,000 95,000 100,000 105,000 110,000 115,000 1,260,000

63

$

$

Interest 58,425 55,575 52,606 49,400 46,075 42,631 38,950 35,150 31,231 27,075 22,681 18,050 13,181 8,075 2,731 501,836

$

$

Total 118,425 115,575 117,606 119,400 116,075 117,631 118,950 115,150 116,231 117,075 117,681 118,050 118,181 118,075 117,731 1,761,836

Packet Pg. 97

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 7) LONG-TERM LIABILITIES – Continued

On December 16, 2010 the Agency issued $21,065,000 of Tax Allocation Bonds. The bonds were issued to: 1) refund the outstanding balance of the 1995 Tax Allocation Bonds in the amount of $2,790,000, 2) finance improvements within the Sotoyome Project Area, 3) fund a reserve account, 4) fund a capitalized interest amount, and 5) pay costs of issuance. The issue consists of $5.26 million in Serial bonds maturing August 1, 2011 through August 1, 2023 with interest rates ranging from 2%-4.625%. There is also $15.805 million in term bonds maturing on August 1, 2025, 2030, and 2034 at interest rates ranging from 5.00%-5.375%. Serial bonds maturing after August 1, 2020 are subject to optional redemption. Term bonds maturing in 2025, 2030, and 2034 are subject to mandatory redemption from sinking fund payments made. The bonds are secured by a pledge and lien of the Agency’s tax increment revenue. Future debt service requirements on these bonds are as follows: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Principal $ 395,000 460,000 535,000 610,000 670,000 710,000 755,000 800,000 850,000 660,000 705,000 750,000 800,000 855,000 910,000 2,995,000 3,155,000 3,325,000

Interest $ 1,004,581 988,963 969,063 946,163 919,726 889,513 856,078 818,619 777,369 738,794 702,963 664,768 624,081 580,638 533,737 428,790 263,510 89,359

Totals

$ 19,940,000

$ 12,796,715

$

Total 1,399,581 1,448,963 1,504,063 1,556,163 1,589,726 1,599,513 1,611,078 1,618,619 1,627,369 1,398,794 1,407,963 1,414,768 1,424,081 1,435,638 1,443,737 3,423,790 3,418,510 3,414,359

$ 32,736,715

C. 2014 Series A and B In May of 2014, the Successor Agency issued $10,876,000 in 2014 Tax Allocation Refunding Bonds, Series A, to refund the outstanding 2002 Tax Allocation Bonds, Series A (current refunding). Proceeds from the 2014 Series A bonds were used to refund in full the 2002 Series A bonds, to establish a reserve fund, and to pay costs of issuance. As a result, the 2002 Series A bonds are considered defeased and the liability has been removed from these financial statements.

64

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Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

B. 2010 Series

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

In May of 2014, the Successor Agency issued $4,279,400 in 2014 Tax Allocation Refunding Bonds, Series B, to refund the outstanding 2002 Tax Allocation Bonds, Series C (current refunding). Proceeds from the 2014 Series B bonds were used to refund in full the 2002 Series C bonds, to establish a reserve fund, and to pay costs of issuance. As a result, the 2002 Series C bonds are considered defeased. Interest on the bonds is set at 3.4% with semi-annual debt service payments due on February 1 and August 1 of each year, with principal maturing annually August 1, 2014 through 2031. Debt service payments will be made from tax increment revenue received by the Trust. The following represents the future minimum debt service requirements: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Totals Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Totals

Tax Allocation Bonds - Series 2014A Principal Interest Total $ 488,600 $ 310,787 $ 799,387 508,400 293,838 802,238 522,700 276,310 799,010 541,500 258,218 799,718 559,600 239,499 799,099 577,200 220,174 797,374 599,000 200,178 799,178 619,400 179,466 798,866 639,000 158,073 797,073 662,600 135,946 798,546 685,300 113,031 798,331 707,000 89,362 796,362 732,600 64,889 797,489 757,000 39,566 796,566 785,200 13,348 798,548 $

9,385,100

$

2,592,685

$ 11,977,785

Tax Allocation Bonds - Series 2014B Principal Interest Total $ 191,000 $ 122,315 $ 313,315 199,000 115,685 314,685 206,800 108,786 315,586 214,300 101,628 315,928 221,600 94,217 315,817 228,600 86,564 315,164 235,400 78,676 314,076 241,600 70,567 312,167 252,500 62,167 314,667 263,100 53,403 316,503 268,200 44,370 312,570 277,900 35,086 312,986 287,300 25,478 312,778 296,100 15,560 311,660 309,600 5,263 314,863 $

3,693,000 65

$

1,019,765

$

4,712,765

Packet Pg. 99

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

7) LONG-TERM LIABILITIES – Continued

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 7) LONG-TERM LIABILITIES – Continued

In January of 2015, the Successor Agency issued $9,568,200 in 2015 Tax Allocation Refunding Bonds, Series A, and $4,750,800 in 2015 Tax Allocation Refunding Bonds, Series B, to refund the outstanding 2003 Tax Allocation Bonds, Series A and B (current refunding). Interest on the 2015 bonds is 4.25% with semi-annual debt service payments due on February 1 and August 1 of each year, with principal maturing annually August 1, 2015 through 2031. Future debt service payments will be made from tax increment revenue received by the Trust, and is as follows: Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Totals Fiscal Year Ending June 30, 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Totals

Tax Allocation Bonds - Series 2015A Principal Interest Total $ 412,700 $ 365,685 $ 778,385 424,200 347,901 772,101 435,300 329,636 764,936 441,100 311,013 752,113 455,700 291,956 747,656 464,700 272,397 737,097 468,200 252,573 720,773 481,300 232,396 713,696 493,800 211,675 705,475 740,500 185,447 925,947 762,600 153,506 916,106 788,200 120,551 908,751 807,400 86,645 894,045 830,300 51,844 882,144 804,700 17,100 821,800 $

8,810,700

$

3,230,325

$ 12,041,025

Tax Allocation Bonds - Series 2015B Principal Interest Total $ 225,600 $ 180,221 $ 405,821 233,600 170,463 404,063 241,500 160,367 401,867 249,000 149,944 398,944 255,900 139,215 395,115 267,500 128,093 395,593 273,700 116,592 390,292 289,500 104,624 394,124 294,800 92,208 387,008 304,800 79,467 384,267 319,200 66,207 385,407 328,000 52,454 380,454 341,200 38,233 379,433 353,800 23,464 377,264 375,200 7,973 383,173 $

4,353,300 66

$

1,509,525

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

D. 2015 Series A and B

5,862,825

Packet Pg. 100

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 8) EMPLOYEES’ RETIREMENT PLAN

Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors six rate plans (three miscellaneous and three safety). Benefit provisions under the Plan are established by State statute and City ordinance and resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Benefits Provided – The Plan is a cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). A full description of the pension plan benefit provisions, assumptions for funding purposes but not accounting purposes, and membership information is listed in the June 30, 2015 Annual Actuarial Valuation Report. Details of the benefits provided can be obtained in Appendix B of the June 30, 2015 actuarial valuation report. This report is a publically available valuation report that can be obtained at CalPERS’ website under Forms and Publications. The Plan’s provisions and benefits in effect at June 30, 2017, are summarized as follows:

Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates

Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates

Miscellaneous Classic Members Prior to December 16, 2012 2.5% @ 55 single highest year 5 years service monthly for life 55 2.5% 8% 10.808% + $806,584

Miscellaneous 2nd Tier On or after December 16, 2012 2% @ 60 36 month average 5 years service monthly for life 60 2% 7% 7.809% + $492

Safety Prior to January 1, 2013 3% @ 50 single highest year 5 years service monthly for life 50 3% 9% 19.536% + $394,602

Safety PEPRA On or after January 1, 2013 2.7% @ 57 36 month average 5 years service monthly for life 57 2.7% 11.5% 12.082% + $154

67

Miscellaneous PEPRA On or after January 1, 2013 2% @ 62 36 month average 5 years service monthly for life 62 2% 6.5% 6.93% + $59

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

General Information about the Defined Benefit Pension Plan

Packet Pg. 101

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded liability was $1,201,891 in fiscal year 2017. The City’s contributions to the Plan for the year ended June 30, 2017 were $2,494,953. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2017, the City reported a liability of $29,331,189 for its proportionate share of the net pension liability. The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2016, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2015 rolled forward to June 30, 2016 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability as of June 30, 2015 and 2016 was as follows: Proportion - June 30, 2015 Proportion - June 30, 2016 Change - Increase (Decrease)

0.33530% 0.33897% 0.00367%

For the year ended June 30, 2017, the City recognized pension expense of $3,860,857. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

68

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

8) EMPLOYEES’ RETIREMENT PLAN – Continued

Packet Pg. 102

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Pension contributions subsequent to measurement date Differences between actual and expected experience Changes in assumptions Change in employer's proportion Differences between the employer's contributions and the employer's proportionate share of contributions Net differences between projected and actual earnings on plan investments Total

Deferred Outflows of Resources $ 2,494,953 1,414,391

$

Deferred Inflows of Resources $ 20,258 750,784 -

-

1,105,911

3,831,159

-

7,740,503

$

1,876,953

The $2,494,953 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ending June 30, 2018 2019 2020 2021 2022 Thereafter

$

234,039 382,016 1,758,531 994,011 -

Actuarial Assumptions – The total pension liabilities in the June 30, 2015 actuarial valuations were determined using the following actuarial assumptions: Valuation date Measurement date Actuarial cost method Actuarial assumptions: Discount rate Inflation Payroll growth Projected salary increase Investment rate of return Mortality

June 30, 2015 June 30, 2016 entry-age normal 7.65% 2.75% 3.00% (1) 7.65% (2)

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

8) EMPLOYEES’ RETIREMENT PLAN – Continued

(1) Depending on age, service and type of employment (2) Derived using CalPERS’ Membership Data for all Funds.

69

Packet Pg. 103

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2015 valuation were based on the results of a January 2014 actuarial experience study for the period 1997 to 2011. Further details of the Experience Study can found on the CalPERS website. Discount Rate – The discount rate used to measure the total pension liability was 7.65%. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.65% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website. CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management (ALM) review cycle that is scheduled to be completed in February 2018. Any changes to the discount rate will require Board action and proper stakeholder outreach. For these reasons, CalPERS expects to continue using a discount rate net of administrative expenses for GASB 67 and 68 calculations through at least the 2017-18 fiscal year. CalPERS will continue to check the materiality of the difference in calculation until such time as they have changed their methodology. The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.

70

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

8) EMPLOYEES’ RETIREMENT PLAN – Continued

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6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 8) EMPLOYEES’ RETIREMENT PLAN – Continued

Global Equity Global Fixed Income Inflation Sensitive Private Equity Real Estate Infrastructure and Forestland Liquidity

Real Return Years 1 - 10 (1)

51% 20% 6% 10% 10% 2% 1%

5.25% 0.99% 0.45% 6.83% 4.50% 4.50% -0.55%

Real Return Years 11+ (2) 5.71% 2.43% 3.36% 6.95% 5.13% 5.09% -1.05%

(1) An expected inflation of 2.5% used for this period. (2) An expected inflation of 3.0% used for this period.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: 1% Decrease Net Pension Liability

$

6.65% 43,955,454

Current Discount Rate Net Pension Liability

$

7.65% 29,331,189

1% Increase Net Pension Liability

$

8.65% 17,274,398

Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. Payable to the Pension Plan At June 30, 2017, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2017. 9) NET POSITION AND FUND BALANCES GASB Statement No. 63 adds the concept of Net Position, which is measured on the full accrual basis, to the concept of Fund Balance, which is measured on the modified accrual basis. A. Net Position

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

New Strategic Allocation

Asset Class

Net position is divided into three classifications under GASB Statement No. 34. These classifications apply only to net position as determined at the government-wide level, enterprise funds, internal service funds, and trust funds are described below:

71

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6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

Net Investment in Capital Assets describes the portion of net position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include debt service requirements, and redevelopment funds restricted to low and moderate income housing purposes. Unrestricted describes the portion of net position which is not restricted as to use. B. Fund Balances Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the government funds. The constraints placed on fund balance for the major governmental funds and all other governmental funds are presented below. Community Services Fund

General Fund Nonspendable: Prepaids Inventory Cultural Trust

69,980

185,608 3,104,144 -

300,088 2,310,766 -

116,829 849,325

7,220,790 15,161 256,141 138,030 432,338 1,397,972

185,608 3,521,061 7,220,790 15,161 256,141 138,030 2,743,104 2,247,297

106,254 -

-

-

3,440,246 171,682

106,254 3,440,246 171,682

Assigned to: Equipment Replacement Economic Development

4,902,250 372,563

-

-

-

4,902,250 372,563

Unassigned

2,026,017

-

-

$

2,610,854

72

$

$

11,112

$

-

$ 10,698,242

-

$

-

Total Fund Balance

$

Total Governmental Funds

-

Committed to: Low Income Housing Miscellaneous Projects Debt Service

1,406 -

Nonmajor Governmental Funds

1,406 11,112 69,980

Restricted for: Fire Facilities Pension Rate Stabilitzation Low Income Housing Community Development Landscaping and Lighting Law Enforcement Parks and Recreation Road Improvements

$

Streets Fund

977,266

-

(14,638) $ 13,127,702

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

9) NET POSITION AND FUND BALANCES – Continued

2,011,379 $ 27,414,064

Packet Pg. 106

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 10) NORTHERN CALIFORNIA POWER AGENCY

The City is a member of the Northern California Power Agency (NCPA), headquartered in Roseville, California. NCPA is a joint exercise of powers agency formed in 1968 under the Joint Exercise of Powers Act, Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”). NCPA’s Members currently consist of eleven cities with publicly owned electric utility distribution systems, a public utility district, a city port department, and a transit district as Members, a water agency and a rural electric cooperative as associate Members. Under the terms of the NCPA Joint Powers Agreement entered into by all Members, NCPA possesses the general powers to acquire, purchase, generate, transmit, distribute and sell electrical capacity and energy. Specific powers include the power to enter into contracts, acquire and construct electric generating facilities, issue revenue bonds and notes and acquire property by eminent domain. The member Services Agreements, dated as of February 12, 1981, and the Facilities Agreement, dated as of September 22, 1993, provide for the development of projects undertaken by NCPA in three separate phases: (i) the initial phase of general investigation funded by NCPA’s general fund; (ii) the second phase whereby Members of NCPA electing to participate in the project execute a project agreement to provide for the cost of development of the project (now referred to as an “NCPA Project”); and (iii) the third phase during which all remaining aspects, including financing, construction and operation of the NCPA Project are undertaken. Organization and Management NCPA’s governing body (the “Commission”) is composed of one representative from each Member, each such representative being designated a Commissioner. The Commission is given the general management of the affairs, property and business of NCPA and is vested with all powers of NCPA. Under the NCPA Joint Powers Agreement, associate Members do not have a voting seat on the Commission, except as may be provided in a project agreement. The management of NCPA is responsible for various areas of administration and planning of NCPA’s operations and affairs. The overall management is under the direction of NCPA’s General Manager, who serves at the discretion of the Commission. NCPA is organized into four separate divisions: (i) generation services, (ii) power management, (iii) legislative and regulatory, and (iv) administrative services. Today, the organization is guided by an ethic of environmental stewardship, fiscal responsibility and community service, coupled with a strong sense of mission to advance the state of the art in renewable energy. Each NCPA Member has agreed to fund a pro rata share of certain assessments by NCPA and enter into power supply contract with NCPA to purchase power in support of bearing the costs of NCPA operations, energy and facilities. While governed by its Members, none of NCPA’s obligations are those of its Members unless expressly assumed by them. As computed by

73

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Background

Packet Pg. 107

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

NCPA amounts paid by the City to NCPA during the year ending June 30, 2017 were $6.3 million for electric power acquisition charges and are reported as an expense of the Electric Utility Fund. Additionally, the NCPA Commission identified and approved the funding of specific reserves for working capital, accumulated employee’s post-retirement medical benefits, and billed property taxes for the geothermal project. The Commission also identified a number of contingent liabilities that may or may not be realized, the cost of which in most cases is difficult to estimate at this time. One such contingent liability is the steam filed depletion which will require funding to cover debt service and operational cost in excess of the expected value of the electric power. The General Operating Reserve (the “GOR”) is intended to minimize the number and amount of individual reserves needed for each project, protect NCPA’s financial condition and maintain its credit worthiness. These funds are available on demand, but the City has left them with NCPA as a reserve against these contingencies identified by NCPA. The City’s GOR balance as computed by NCPA was $5.8 million as of June 30, 2017. The most recent estimated funding recommended by NCPA equaled $1.4 million. NCPA Power Pool The City is a member of a power pool operated by NCPA that also includes the following Members: Alameda, Biggs, Gridley, Lodi, Lompoc, Palo Alto, Plumas Sierra Rural Electric Cooperative, the Port of Oakland and Ukiah (each, an “NCPA Pool Member”). The ten NCPA Pool Members’ service areas are connected to the CAISO-controlled grid. NCPA operates a central dispatch facility at NCPA’s headquarters. The Central Dispatch Center balances loads and resources pursuant to CAISO tariff rules, for the ten NCPA Pool Members, and Santa Clara. NCPA Geothermal Project NCPA has developed a geothermal project (the “Geothermal Project”) located on federal land in certain areas of Sonoma and Lake Counties, California (the “Geysers Area”). NCPA formed two notfor-profit corporations controlled by its Members to own the generating plants of the Geothermal Project. NCPA manages the Geothermal Project for the corporations and is entitled to all the capacity and energy generated by the Geothermal Project. Combustion Turbine Project The original project consisted of five combustion turbine units, each nominally rated at approximately 25 megawatts. Concurrent with the final project bond maturity, two units located in Roseville were acquired by an Agency member. The remaining project consists of two units in Alameda and one in Lodi. The project provides capacity during peak load periods and emergency capacity reserves. Excess capacity and energy from the project are also sold to other entities from time to time. The City is obligated to pay 3.5% of the debt service and operating costs.

74

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

10) NORTHERN CALIFORNIA POWER AGENCY – Continued

Packet Pg. 108

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017 10) NORTHERN CALIFORNIA POWER AGENCY – Continued

The project is a 296 MW base load, combined cycle, natural gas-fired combustion turbine generating station (one gas turbine and one steam turbine) located in Lodi, California, next to the Capital Facilities Project discussed above. Pursuant to the Lodi Energy Center Power Sales Agreement, the Agency agreed to operate the LEC and has sold all of the capacity and energy of the LEC to thirteen participants (including four non-members) in accordance with their respective Generation Entitlements Share (GES). Each participant has agreed to unconditionally provide for its share of the operation and maintenance expenses and all capital improvements based on its GES. NCPA Condensed Financial Information The information below summarizes NCPA’s audited financial statements as of and for the fiscal year ending June 30, 2017 (in thousands), which is the latest information available: Total Assets and Deferred Outflows Total Liabilities and Deferred Inflows Long-term Debt Net Position Revenues Expenses (including refunds) Decrease in Net Position

$ 1,167,958 1,133,898 737,022 34,060 479,727 473,630 6,097

11) Risk Management The City is exposed to various risk of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City currently reports all of its risk management activities in its Insurance and Benefit internal service fund. Redwood Empire Municipal Insurance Fund (REMIF) is a governmental self-insurance cooperative organized under a joint powers agreement by certain California cities to provide liability coverage to its members as allowed under the California Government Code. REMIF is a “risk sharing pool”, which pools risks and funds and which shares in the cost of losses. REMIF provides and administers liability coverage programs for seven member and eight associate member cities. Members and associate members have the option with approval by the Board of Directors, of participating in any or all of seven programs which provide workers’ compensation, general liability, property, auto physical damage, fidelity employee bonding, dental, and vision insurance. There are a number of programs that are funded on a pass-through basis including, employee assistance plan coverage, life and long term disability insurance, boiler and machinery coverage, and difference in condition (flood and earthquake) coverage.

75

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Lodi Energy Center

Packet Pg. 109

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

The Redwood Empire Municipal Insurance Fund is in turn a member of the California Joint Powers Insurance Authority, a super self-insurance and insurance procurement joint powers authority. The activities of REMIF include setting and collecting premiums for each program, negotiating excess insurance coverage administering and paying claims and related expenses, and investing each program’s assets. REMIF engages the services of independent actuaries and claims administrators to assist in performing some of these activities. The City’s general liability and workers’ compensation claims are covered as a member of REMIF. REMIF has a risk sharing arrangement for each insurance program. Each member participating in each program assumes its own losses up to its retention level. The City has a $5,000 retention level for general liability and workers’ compensation. The excess amounts are presently insured to statutory requirements of the State of California for workers’ compensation and $10,000,000 for general liability through a pooled program. Each program’s pool is funded by all of the members participating in that program through cash premiums. Excess losses up to the state limits are covered by commercial carriers or other agencies, which REMIF contracts for that purpose. Losses exceeding these excess coverage limits for each program are the responsibility of the individual member for which the loss or claim originated. Claims have not exceeded insurance coverage amounts over the last three fiscal years and there has been no reduction in insurance coverage since the last fiscal year. Changes in the Internal Service Funds claims liabilities amounts in fiscal year 2017 and 2016 were as follows: 2017

2016

Balance, Beginning of Fiscal Year Claims and Adjustments Claims Payments

$

43,724 670,178 (665,321)

$

17,478 40,000 (13,754)

Balance, End of Fiscal Year

$

48,581

$

43,724

12) COMMITMENTS AND CONTINGENCIES There are pending claims and litigation against the City, which are considered normal to the City’s operation. City management is of the opinion that potential claims against the City not covered by insurance resulting from such litigation would not materially affect the basic financial statements of the City beyond funded reserves. In addition, the City received a claim seeking $1 Million in damages related to a complaint for slander of title claim. The probability of loss, if any, from this claim has not been determined and therefore, no accrual for this claim has been made in the City’s financial statements.

76

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

11) Risk Management – Continued

Packet Pg. 110

6.B.a

City of Healdsburg Notes to Financial Statements Year Ended June 30, 2017

The City has entered into long-term electric power purchase generation assets and electric transmission contracts. These contracts were entered into by NCPA on behalf of various members (see Note 10) including the City. Under the terms of its NCPA joint venture agreement, the City is contingently liable for a portion of the bonded indebtedness issued by these agencies under take-orpay or similar agreements. The City’s estimated share of such debt outstanding at June 30, 2017 was $13.1 million. Under certain circumstances, such as default or bankruptcy of other participants, the City may also be liable to pay a portion of the debt of these joint ventures on behalf of the other participants. California-Oregon Transmission Project The City is a member of the Transmission Agency of Northern California (TANC), a California joint powers agency. TANC, a combination of cities, Western Area Power Administration, and four other California Districts and authorities are participants in the California-Oregon Transmission Project (COTP). The COTP is a transmission project between southern Oregon and Central California. COTP provides a transmission path between the electric systems of the Pacific Northwest and those in California. The City’s share is 0.2456%. Each member of TANC is responsible for developing its own uses for its share of the COTP transfer capability. Western Area Power Administration In addition to commitments for power acquisitions through NCPA, the City has entered into a contract with the Western Area Power Administration (Western). Western is a federal Power Management Agency of the U.S. Department of Energy, which among other things is responsible for marketing electricity generated by the Central Valley Project. The contract with Western was renewed for the period January 1, 2005 through December 31, 2024. Construction Commitments The estimated amount of remaining construction contract obligations at year-end is $12,127,810.

77

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

12) COMMITMENTS AND CONTINGENCIES - Continued

Packet Pg. 111

REQUIRED SUPPLEMENTARY INFORMATION

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 112

6.B.a

Budgeted Amounts Original Final REVENUES Property Taxes Sales and Other Taxes Charges for Services Fines and Forfeitures Licenses and Permits Development Fees Intergovernmental Investment Earnings Other Revenues Total Revenues EXPENDITURES Current: General Government Public Safety Planning and Building Capital Outlay Total Expenditures Excess (Deficiency) of Revenues over Expenditures OTHER FINANCING SOURCES (USES) Transfers Transfers Out Total Other Financing Sources (Uses)

Actual Amounts

Variance with Final Budget Positive (Negative)

$ 2,646,910 7,897,513 786,375 92,000 1,073,635 193,808 65,751 120,588

$ 2,886,315 7,897,513 786,375 92,000 1,073,635 193,808 65,751 193,888

$ 3,246,166 7,853,717 738,111 143,637 1,151,407 24,361 239,857 161,947 355,830

12,876,580

13,189,285

13,915,033

725,748

1,641,214 7,814,907 1,638,105 1,705,000

2,031,200 7,923,585 1,817,825 6,336,905

1,654,305 8,267,371 1,718,094 1,857,101

376,895 (343,786) 99,731 4,479,804

12,799,226

18,109,515

13,496,871

4,612,644

418,162

5,338,392

77,354

647,413 (3,444,729) (2,797,316)

(4,920,230)

5,642,855 (5,493,022) 149,833

$

359,851 (43,796) (48,264) 51,637 77,772 24,361 46,049 96,196 161,942

(3,003,980) 191,835

(8,646,835) 5,684,857

(2,812,145)

(2,961,978) 2,376,414

Net Change in Fund Balances

(2,719,962)

(4,770,397)

(2,393,983)

Fund Balance, Beginning of Year

13,092,225

13,092,225

13,092,225

-

$ 10,372,263

$ 8,321,828

$ 10,698,242

$ 2,376,414

Fund Balance, End of Year

78

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund Year Ended June 30, 2017

Packet Pg. 113

6.B.a

Budgeted Amounts Original Final REVENUES Sales and Other Taxes Charges for Services Intergovernmental Investment Earnings Successor Agency Bond Contributions Other Revenues Total Revenues EXPENDITURES Current: Community Services Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance, Beginning of Year Fund Balance, End of Year

Actual Amounts

Variance with Final Budget Positive (Negative)

$ 2,605,487 773,253 987,166 12,000 2,000,000

$ 2,605,487 798,253 987,166 12,000 2,000,000

$ 2,836,586 785,346 307,732 19,066 583

$

231,099 (12,907) (679,434) 7,066 (1,999,417)

6,377,906

6,402,906

3,949,313

(2,453,593)

3,263,288 3,857,865

3,361,994 3,857,865

3,315,062 204,324

46,932 3,653,541

7,121,153

7,219,859

3,519,386

3,700,473

1,246,880

(743,247)

(816,953)

429,927

1,040,865 (832,769)

1,040,865 (859,194)

63,584 (343,169)

(977,281) 516,025

208,096

181,671

(279,585)

(461,256)

(535,151)

(635,282)

150,342

785,624 -

2,460,512

2,460,512

2,460,512

$ 1,925,361

$ 1,825,230

$ 2,610,854

79

$

785,624

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Community Services Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 114

6.B.a

City of Healdsburg Required Supplementary Information Year Ended June 30, 2017 SCHEDULE OF FUNDING PROGRESS FOR OPEB

Valuation Type

Actuarial Valuation Date

Actuarial Actuarial Actuarial

6/30/2009 6/30/2012 6/30/2015

Actuarial Value of Assets $

Actuarial Accrued Liability -

$

1,851 924 689

Unfunded AAL (UAAL) $

80

1,851 924 689

Funded Ratio 0% 0% 0%

Covered Payroll $

11,699 9,676 9,615

UAAL as a Percentage of Covered Payroll 15.82% 9.55% 7.17%

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

(Amounts in Thousands)

Packet Pg. 115

6.B.a

City of Healdsburg Required Supplementary Information Year Ended June 30, 2017

Measurement Date

Proportion of the Net Pension Liability

2016

0.33897%

2015

0.33530%

2014

0.28460%

Proportionate Share of Net Pension Liability $

29,331,189

Proportionate Share of the Net Covered Pension Liability Employee Payroll as a % of Payroll $

Plan Fiduciary Net Position as a % of the Total Pension Liability

9,958,349

294.54%

72.92%

23,014,464

8,299,645

277.29%

77.62%

17,713,031

7,808,757

226.84%

82.46%

Notes to the Schedule of the City’s Proportionate Share of the Net Pension Liability Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2015 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes in Assumptions: The discount rate was changed from 7.5 percent (net of administrative expense) to 7.65 percent to correct for an adjustment to exclude administrative expense, beginning with the June 30, 2014 actuarial valuation. *Fiscal year 2015 was the first year of implementation, therefore, not all 10 years of information are available.

81

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Schedule of the City's Proportionate Share of the Net Pension Liability Last 10 Years*

Packet Pg. 116

6.B.a

City of Healdsburg Required Supplementary Information Year Ended June 30, 2017

Fiscal Year 2017

Contractually Required Contributions $

2,494,953

Contributions in Relation to the Actuarially Determined Contributions $

(2,494,953)

Contribution Deficiency/ (Excess) $

Covered Employee Payroll

Contributions as a % of Covered Employee Payroll

-

$ 9,958,349

25.05%

2016

2,208,239

(2,208,239)

-

9,243,834

23.89%

2015

1,707,064

(1,707,064)

-

8,299,645

20.57%

Notes to the Schedule of Plan Contributions Valuation Date:

6/30/2013, 6/30/2014, and 6/30/2015

*Fiscal year 2015 was the first year of implementation, therefore, not all 10 years of information are available.

82

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Schedule of Plan Contributions Last 10 Years*

Packet Pg. 117

6.B.a

City of Healdsburg Notes to Required Supplementary Information Year Ended June 30, 2017

Annual budgets are adopted for all governmental fund types on a basis consistent with accounting principles generally accepted in the United States of America. The City’s budget ordinance requires that in June of each fiscal year the City Manager submit a preliminary budget that includes projected expenditures and the means of financing them, to the City Council for the fiscal year commencing the following July 1. As modified during public study sessions, the preliminary budget becomes the proposed budget. Following public hearings on the proposed budget, the final annual budget is adopted by the City Council. After adoption of the final budget, transfers of appropriations within funds can be made by the City Manager. Budget modifications between funds; increases or decreases to a fund’s overall budget; or transfers that affect capital projects, must be approved by the City Council. Numerous properly authorized amendments are made during the fiscal year.

83

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Budgetary Information

Packet Pg. 118

SUPPLEMENTARY INFORMATION

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 119

6.B.a

Actual Amounts

Budgeted Amounts Original Final REVENUES Sales and Other Taxes Charges for Services Development Fees Intergovernmental Investment Earnings Other Revenues

$

Total Revenues EXPENDITURES Current: Streets and Roads Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance

$

$

97,937 142,167 177,602 1,295,492 1,427 156,374

$

97,937 142,167 177,602 1,092,555 927 74,374

285,437

1,870,999

1,585,562

953,278 2,937,466

953,278 14,101,287

1,282,928 7,040,474

(329,650) 7,060,813

3,890,744

15,054,565

8,323,402

6,731,163

(3,605,307)

(14,769,128)

(6,452,403)

8,316,725

2,737,291 (39,762)

13,682,357 (39,762)

7,035,236 (39,763)

(6,647,121) (1)

2,697,529

13,642,595

6,995,473

(6,647,122)

(1,126,533)

434,196 $

202,937 500 82,000

285,437

(907,778)

Fund Balance, Beginning of Year Fund Balance, End of Year

202,937 500 82,000

Variance with Final Budget Positive (Negative)

(473,582)

84

434,196 $

(692,337)

$

543,070

1,669,603

434,196

-

977,266

$ 1,669,603

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Streets Capital Projects Fund Year Ended June 30, 2017

Packet Pg. 120

6.B.a

Gas Tax ASSETS Cash and Investments Cash and Investments with Fiscal Agent Receivables: Accounts Taxes Notes Interest Due from Other Governments Total Assets LIABILITIES Accounts Payable Deposits Payable Due to Other Funds Unearned Revenue Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable Revenues - Accounts Receivable Unavailable Revenues - Interest Receivable Total Deferred Inflows of Resources FUND BALANCES Nonspendable Restricted Committed Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances

North Area

$ 1,398,688 -

$

3,429 -

362 -

Special Revenue Benjamin Way Maintenance District

$

54,600 -

7,354 -

Strong Motion Education and Data

Public Safety

$

18 -

155,228 -

$

-

2,267 6 -

$ 1,402,117

$

54,962

$

7,372

$

155,228

$

2,273

$

$

15,000 -

$

-

$

17,198 -

$

-

4,145 4,145

15,000

-

17,198

-

-

54,600 -

-

-

-

-

54,600

-

-

-

1,397,972 -

(14,638)

7,372 -

138,030 -

2,273 -

1,397,972

(14,638)

7,372

138,030

2,273

$ 1,402,117

85

$

54,962

$

7,372

$

155,228

$

2,273

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Balance Sheet Non-major Governmental Funds June 30, 2017

Packet Pg. 121

6.B.a

255,499 -

$

5,130 626 -

-

$

9,986 -

431,227 54 1,057 -

8,474,020 -

4,736 -

$ 8,474,020

$ 3,440,246

$

171,682

$

75,496

$

14,486,975

$

$

$

-

$

-

$

41,107 17,198 38,553 -

$

9,986

$

432,338

$

5,114 -

$

9,986 -

$

-

21,862 23,553 -

-

$

Total Non-major Funds

Cultural Trust

$ 1,888,917 1,546,593

261,255

$

General Debt Service

Miscellaneous Projects

-

$

$

Housing Successor Agency

Permanent Fund

169,855 -

$

1,411 416 -

75,496 -

$

-

4,384,893 1,546,593 64,640 6,541 8,474,020 10,288 -

5,114

9,986

-

45,415

-

-

-

96,858

-

-

-

1,207,815

-

-

-

54,600 1,207,815

-

-

-

1,207,815

-

-

-

1,262,415

256,141 -

-

432,338 -

7,220,790 -

3,440,246 -

171,682 -

69,980 5,516 -

256,141

-

432,338

7,220,790

3,440,246

171,682

75,496

432,338

$ 8,474,020

$ 3,440,246

261,255

$

9,986

$

86

$

171,682

$

75,496

69,980 9,460,432 3,611,928 (14,638) 13,127,702

$

14,486,975

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Area A Lighting and Landscaping

$

Capital Projects

Special Revenue Park Media Development Center Fees

Packet Pg. 122

6.B.a

Gas Tax REVENUES Property Taxes Charges for Services Fines and Forfeitures Devleopment Fees Intergovernmental Investment Earnings Other Revenues Total Revenues EXPENDITURES Current: General Government Public Safety Community Development Capital Outlay Debt Service: Interest Charges Principal Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Sale of Capital Assets Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year

$

Special Revenue Benjamin Way Maintenance District

North Area

230,289 13,127 -

$

-

$

74 -

Strong Motion Education and Data

Public Safety

$

2,000 7,285 (38) 4,940

$

21 510

243,416

-

74

14,187

531

41,207 -

-

-

100,195 -

-

-

-

-

-

-

41,207

-

-

100,195

-

202,209

-

74

(252,063) -

-

-

-

-

(252,063)

-

-

-

-

(49,854)

-

74

1,447,826 $ 1,397,972

(14,638) $

87

(14,638)

(86,008)

(86,008)

7,298 $

7,372

531

531

224,038 $

138,030

1,742 $

2,273

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Governmental Funds Year Ended June 30, 2017

Packet Pg. 123

6.B.a

$

187,458 2,532 -

$

40,521 -

$

102,960 4,227 39

Housing Successor Agency

$

Permanent Fund

2,586 38,652

$

(946) -

189,990

40,521

107,226

41,238

202,962 -

40,521 -

-

94,844 1,839,204

-

-

-

202,962

40,521

-

(12,972)

-

107,226

(1,892,810)

(946)

(5,616) -

-

-

1,612,887 (50,094) 1,777,724

(6,111,415) -

(5,616)

-

-

3,340,517

(18,588)

-

107,226

274,729

-

256,141

$

-

$

General Debt Service

Miscellaneous Projects

$

(946)

Total Non-major Funds

Cultural Trust

25,511 3,106 -

$

616 -

$

212,969 42,521 7,285 102,960 230,289 25,305 44,141

28,617

616

665,470

-

-

-

40,521 100,195 339,013 1,839,204

-

-

217,215 791,857

-

217,215 791,857

1,934,048

-

1,009,072

-

3,328,005

616

(2,662,535)

1,009,044 -

-

2,621,931 (6,419,188) 1,777,724

(6,111,415)

1,009,044

-

(2,019,533)

1,447,707

(6,112,361)

28,589

616

(4,682,068)

325,112

5,773,083

9,552,607

143,093

74,880

17,809,770

432,338

$ 7,220,790

$ 3,440,246

75,496

$ 13,127,702

88

(980,455)

$

171,682

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Area A Lighting and Landscaping

$

Capital Projects

Special Revenue Park Media Development Center Fees

Packet Pg. 124

6.B.a

Final Budget REVENUES Intergovernmental Investment Earnings

$

Total Revenues EXPENDITURES Current: Community Development Total Expenditures Excess (Deficiency) of Revenues over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance, Beginning of Year Fund Balance, End of Year

89

245,350 5,000

Actual Amounts

$

230,289 13,127

Variance with Final Budget Positive (Negative)

$

(15,061) 8,127

250,350

243,416

(6,934)

64,500

41,207

23,293

64,500

41,207

23,293

185,850

202,209

16,359

(351,063)

(252,063)

99,000

(351,063)

(252,063)

99,000

(165,213)

(49,854)

115,359

1,447,826

1,447,826

$ 1,282,613

$ 1,397,972

$

115,359

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Gas Tax Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 125

6.B.a

Final Budget REVENUES Investment Earnings Other Revenues

$

Total Revenues

Variance with Final Budget Positive (Negative)

Actual Amounts

-

$

-

$

-

-

-

-

-

-

-

-

-

-

Excess (Deficiency) of Revenues over Expenditures

-

-

-

Net Change in Fund Balance

-

-

-

EXPENDITURES Current: Community Development Total Expenditures

Fund Balance, Beginning of Year

(14,638)

Fund Balance, End of Year

$

90

(14,638)

(14,638) $

(14,638)

$

-

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - North Area Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 126

6.B.a

Final Budget REVENUES Intergovernmental Investment Earnings

$

Total Revenues

Variance with Final Budget Positive (Negative)

Actual Amounts

-

$

74

$

74

-

74

74

-

-

-

-

-

-

Excess (Deficiency) of Revenues over Expenditures

-

74

74

Net Change in Fund Balance

-

74

74

7,298

7,298

-

EXPENDITURES Current: Community Development Total Expenditures

Fund Balance, Beginning of Year Fund Balance, End of Year

$

91

7,298

$

7,372

$

74

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Benjamin Way Maintenance District Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 127

6.B.a

Final Budget REVENUES Charges for Services Fines and Forfeitures Investment Earnings Intergovernmental Other Revenues

$

Total Revenues EXPENDITURES Current: Public Safety Capital Outlay Total Expenditures Excess (Deficiency) of Revenues over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses)

Variance with Final Budget Positive (Negative)

Actual Amounts

-

$

2,000 7,285 (38) 4,940 14,187

14,187

21,265 -

100,195 -

(78,930) -

21,265

100,195

(78,930)

(21,265)

(86,008)

(64,743)

-

-

-

-

-

-

(21,265)

(86,008)

Fund Balance, Beginning of Year

224,038

224,038

$

92

2,000 7,285 (38) 4,940

-

Net Change in Fund Balance

Fund Balance, End of Year

$

202,773

$

138,030

(64,743) $

(64,743)

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 128

6.B.a

Final Budget REVENUES Investment Earnings Other Revenues

$

Total Revenues

Variance with Final Budget Positive (Negative)

Actual Amounts

-

$

21 510

$

21 510

-

531

531

-

-

-

-

-

-

Excess (Deficiency) of Revenues over Expenditures

-

531

531

Net Change in Fund Balance

-

531

531

1,742

1,742

-

EXPENDITURES Current: Community Development Total Expenditures

Fund Balance, Beginning of Year Fund Balance, End of Year

$

93

1,742

$

2,273

$

531

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Strong Motion Education and Data Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 129

6.B.a

Final Budget REVENUES Property Taxes Intergovernmental Investment Earnings

$

Total Revenues

185,116 817

Actual Amounts

$

187,458 2,532

Variance with Final Budget Positive (Negative)

$

2,342 1,715

185,933

189,990

4,057

213,707

202,962

10,745

213,707

202,962

10,745

(27,774)

(12,972)

14,802

(5,616)

(5,616)

-

(5,616)

(5,616)

-

Net Change in Fund Balance

(33,390)

(18,588)

14,802

Fund Balance, Beginning of Year

274,729

274,729

EXPENDITURES Current: Community Development Total Expenditures Excess (Deficiency) of Revenues over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses)

Fund Balance, End of Year

$

94

241,339

$

256,141

$

14,802

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Area A Lighting and Landscaping Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 130

6.B.a

Final Budget REVENUES Charges for Services Investment Earnings

$

Total Revenues

Variance with Final Budget Positive (Negative)

Actual Amounts

40,000 -

$

40,521 -

$

521 -

40,000

40,521

521

40,000

40,521

(521)

40,000

40,521

(521)

-

-

-

-

-

-

-

-

-

Net Change in Fund Balance

-

-

-

Fund Balance, Beginning of Year

-

-

-

EXPENDITURES Current: General Government Total Expenditures Excess (Deficiency) of Revenues over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses)

Fund Balance, End of Year

$

95

-

$

-

$

-

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Media Center Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 131

6.B.a

Final Budget REVENUES Development Fees Investment Earnings Other Revenues

$

Total Revenues

Variance with Final Budget Positive (Negative)

Actual Amounts

-

$

102,960 4,227 39

$

102,960 4,227 39

-

107,226

107,226

-

-

-

-

-

-

Excess (Deficiency) of Revenues over Expenditures

-

107,226

107,226

Net Change in Fund Balance

-

107,226

107,226

325,112

325,112

-

EXPENDITURES Current: General Government Total Expenditures

Fund Balance, Beginning of Year Fund Balance, End of Year

$

96

325,112

$

432,338

$

107,226

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Park Development Fees Special Revenue Fund Year Ended June 30, 2017

Packet Pg. 132

6.B.a

Final Budget REVENUES Property Taxes Investment Earnings

$

Total Revenues EXPENDITURES Debt Service: Interest Principal Total Expenditures Excess (Deficiency) of Revenues over Expenditures

Actual Amounts

-

$

-

28,617

216,956 792,816

217,215 791,857

1,009,772

1,009,072

(1,009,772)

OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance

$

97

25,511 3,106 28,617

(259) 959 700

29,317

1,009,042 -

1,009,044 -

2 -

1,009,042

1,009,044

2

28,589

29,319

143,093

-

143,093

Fund Balance, End of Year

$

(980,455)

(730)

Fund Balance, Beginning of Year

25,511 3,106

Variance with Final Budget Positive (Negative)

142,363

$

171,682

$

29,319

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Debt Service Fund Year Ended June 30, 2017

Packet Pg. 133

6.B.a

General ASSETS Cash and Investments Cash and Investments with Fiscal Agents Receivables: Accounts Taxes Interest Due from Other Governments Prepaid Expenditures Restricted Cash and Investments Pension Stabilization Investments Due from Other Funds Total Assets LIABILITIES Accounts Payable Deposits Payable Advances from Other Funds

$

$

288,511 1,056,923 7,601 45,628 1,406 777,393 3,104,144 23,553

5,461,560 -

Transaction & Use Tax $

13,411 -

Economic Development

56,771 -

$

139 412,507 -

371,652 911 -

$

9,400,092

$

5,474,971

$

469,417

$

372,563

$

337,623 777,393 -

$

572,721 3,399,390

$

-

$

-

Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable Revenues - Accounts Receivable FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances

4,094,933 -

Capital Replacement

$

1,115,016

3,972,111

-

-

136,660

-

87,207

-

1,406 3,104,144 5,042,866

1,502,860 -

382,210

372,563 -

8,148,416

1,502,860

382,210

372,563

9,400,092

98

$

5,474,971

$

469,417

$

372,563

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Balance Sheet General Fund Activities June 30, 2017

Packet Pg. 134

TOT Housing $

Fire Facilities Impact Fees

60,610 -

$

62,391 4 -

185,142 -

Miscellaneous $

466 -

331 -

$ 10,230,999 -

-

350,902 1,056,923 22,532 458,135 1,406 777,393 3,104,144 23,553 $ 16,025,987

$

123,005

$

185,608

$

331

$

16,751 -

$

-

$

-

$

Total General Fund

$

927,095 777,393 3,399,390

16,751

-

-

5,103,878

-

-

-

223,867

106,254 -

185,608 -

331

1,406 3,289,752 106,254 1,875,423 5,425,407

106,254

185,608

331

10,698,242

331

$ 16,025,987

123,005

$

185,608

$

99

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 135

6.B.a

General REVENUES Property Taxes Sales and Other Taxes Charges for Services Fines and Forfeitures Licenses and Permits Development Fees Intergovernmental Investment Earnings Other Revenues

$

3,246,166 5,644,735 738,111 143,637 1,151,407 239,857 110,107 355,507

Capital Replacement $

42,314 -

Transaction & Use Tax $

1,955,622 10,675 -

Economic Development $

3,733 -

Total Revenues

11,629,527

42,314

1,966,297

3,733

EXPENDITURES Current: General Government Public Safety Planning and Building Capital Outlay

1,033,666 8,267,371 1,718,094 -

233,937 1,857,101

239,247 -

-

11,019,131

2,091,038

239,247

-

(2,048,724)

1,727,050

3,733

461,391 (1,820,703)

1,646,529 -

(3,099,362)

-

(1,359,312)

1,646,529

(3,099,362)

-

(1,372,312)

3,733

Total Expenditures Excess (Deficiency) of Revenues Over Expenditures

610,396

OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances

(748,916)

Fund Balances, Beginning of Year Fund Balances, End of Year

(402,195)

8,897,332 $

8,148,416

100

1,905,055 $

1,502,860

1,754,522 $

382,210

368,830 $

372,563

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Statement of Revenues, Expenditures, and Changes in Fund Balances General Fund Activities Year Ended June 30, 2017

Packet Pg. 136

TOT Housing $

$

Fire Facilities Impact Fees

253,360 26 323

$

24,361 (4,908) -

Total General Fund

Miscellaneous $

-

$

3,246,166 7,853,717 738,111 143,637 1,151,407 24,361 239,857 161,947 355,830

253,709

19,453

-

13,915,033

147,455 -

-

-

1,654,305 8,267,371 1,718,094 1,857,101

147,455

-

-

13,496,871

106,254

19,453

-

418,162

-

-

-

2,107,920 (4,920,065)

-

-

-

(2,812,145)

106,254

19,453

-

(2,393,983)

-

166,155

331

13,092,225

331

$ 10,698,242

106,254

$

185,608

$

101

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 137

6.B.a

City of Healdsburg Combining Statement of Net Position Water Fund Activities June 30, 2017

ASSETS Current Assets: Cash and Investments Cash and Investments with Fiscal Agent Accounts Receivable - Net Interest Receivable Inventory Total Current Assets

$

1,798,595 9 903,900 4,002 83,371 2,789,877

Noncurrent Assets: Pension Stabilization Investments Capital Assets, Not Being Depreciated Land Total Capital Assets, Not Being Depreciated Capital Assets, Depreciable Buildings Utility Systems Machinery and Equipment Total Capital Assets, Depreciable Less: Accumulated Depreciation Total Capital Assets, Net Total Noncurrent Assets Total Assets

Water Capital Replacement

$

1,474,997 3,616 1,478,613

Total Water Fund

Water Capacity

$

2,132,327 5,634 2,137,961

$

5,405,919 9 903,900 13,252 83,371 6,406,451

350,472

-

-

350,472

310,781 310,781

-

-

310,781 310,781

1,478,613

2,137,961

1,474,503 28,020,798 608,220 30,103,521 (11,578,379) 18,835,923 19,186,395 21,976,272

1,474,503 28,020,798 608,220 30,103,521 (11,578,379) 18,835,923 19,186,395 25,592,846

DEFERRED OUTFLOWS Deferred Pension Related Items

703,711

-

-

703,711

LIABILITIES Current Liabilities: Accounts Payable and Accrued Liabilities Deposits Payable Accrued Interest Payable Bonds Payable - Current Pension Obligation Bonds Payable - Current Total Current Liabilities

68,586 5,813 93,966 588,000 108,974 865,339

514 514

-

69,100 5,813 93,966 588,000 108,974 865,853

2,471,524 8,233,000 500,595 11,205,119 12,070,458

514

-

2,471,524 8,233,000 500,595 11,205,119 12,070,972

157,742

-

-

157,742

10,014,923

-

-

10,014,923

350,472 86,388

1,478,099 -

2,137,961 -

3,616,060 350,472 86,388

2,137,961

$ 14,067,843

Noncurrent Liabilities: Net Pension Liability Bonds Payable Pension Obligation Bonds Payable Total Noncurrent Liabilities Total Liabilities DEFERRED INFLOWS Deferred Pension Related Items NET POSITION Net Investment in Capital Assets Restricted: Capital Projects Pensions Unrestricted Total Net Position

$ 10,451,783

102

$

1,478,099

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Water Operations

Packet Pg. 138

6.B.a

City of Healdsburg Combining Statement of Revenues, Expenses, and Changes in Net Position Water Fund Activities Year Ended June 30, 2017

OPERATING REVENUES Charges for Services Development Fees Other Operating Revenues

$

Total Operating Revenues OPERATING EXPENSES Maintenance and Operations Administration Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Interest Expense Total Nonoperating Revenues (Expenses) Income (Loss) Before Capital Contributions and Operating Transfers Transfers In Transfers Out Change in Net Position Net Position - Beginning of Year Net Position - End of Year

4,768,132 29,527

Water Capital Replacement $

$

184,881 -

$

4,768,132 184,881 29,527

4,797,659

-

184,881

4,982,540

3,121,584 614,319 600,526

41,778 -

-

3,163,362 614,319 600,526

4,336,429

41,778

-

4,378,207

184,881

604,333

461,230

(41,778)

22,752 (411,864)

13,099 -

(1,478) -

34,373 (411,864)

(389,112)

13,099

(1,478)

(377,491)

72,118

(28,679)

183,403

150,000 (791,002)

502,118 -

(212,118)

652,118 (1,003,120)

(568,884)

473,439

(28,715)

(124,160)

11,020,667 $

-

Total Water Fund

Water Capacity

10,451,783

103

1,004,660 $

1,478,099

226,842

2,166,676 $

2,137,961

14,192,003 $

14,067,843

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Water Operations

Packet Pg. 139

6.B.a City of Healdsburg Combining Statement of Net Position Sewer Fund Activities June 30, 2017

ASSETS Current Assets: Cash and Investments Cash and Investments with Fiscal Agents Accounts Receivable - Net Interest Receivable Due from Other Funds Advances to Other Funds Inventory Total Current Assets

$

9,617,019 134 981,098 21,010 22,727 10,641,988

Noncurrent Assets: Pension Stabilization Investments Capital Assets, Not Being Depreciated Land Construction in Progress Total Capital Assets, Not Being Depreciated Capital Assets, Depreciable Buildings Utility Systems Drainage Machinery and Equipment Total Capital Assets, Depreciable Less: Accumulated Depreciation Total Capital Assets, Net Total Noncurrent Assets Total Assets

Sewer Capital Replacement

Drainage

$

77,356 77,356

$

4,406,166 10,936 1,699,695 6,116,797

Sewer Capacity

$

4,144,019 10,211 4,154,230

422,068

91,744

-

-

682,880 2,240,642 2,923,522

84,022 84,022

-

-

6,116,797

4,154,230

206,166 58,461,530 525,751 59,193,447 (16,470,219) 45,646,750 46,068,818 56,710,806

10,246,168 10,246,168 (4,335,778) 5,994,412 6,086,156 6,163,512

DEFERRED OUTFLOWS Deferred Amounts on Refunding Deferred Pension Related Items Total Deferred Outflows

985,314 703,711 1,689,025

131 131

-

-

LIABILITIES Current Liabilities: Accounts Payable and Accrued Liabilities Deposits Payable Due to Other Funds Accrued Interest Payable Bonds Payable - Current Pension Obligation Bonds Payable - Current Total Current Liabilities

161,309 223,813 910,000 109,278 1,404,400

18,900 131 1,101,477 1,120,508

125,107 125,107

-

2,471,524 24,284,904 501,946 27,258,374 28,662,774

1,120,508

125,107

-

157,742

-

-

-

21,437,160

5,994,412

-

-

422,068 7,720,087

91,744 (1,043,152)

5,991,690

4,154,230 -

Noncurrent Liabilities: Net Pension Liability Bonds Payable Pension Obligation Bonds Payable Total Noncurrent Liabilities Total Liabilities DEFERRED INFLOWS Deferred Pension Related Items NET POSITION Net Investment in Capital Assets Restricted: Capital Projects Pensions Unrestricted Total Net Position

$ 29,579,315

104

$

5,043,004

$

5,991,690

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Sewer Operations

4,154,230

Packet Pg. 140

6.B.a

$

1,566,372 6,576 1,101,477 2,674,425

$ 19,733,576 134 1,058,454 48,733 1,101,477 1,699,695 22,727 23,664,796

-

513,812

-

766,902 2,240,642 3,007,544

2,674,425

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Total Sewer Fund

Drainage Capacity

206,166 58,461,530 10,246,168 525,751 69,439,615 (20,805,997) 51,641,162 52,154,974 75,819,770

-

985,314 703,842 1,689,156

-

305,316 131 1,101,477 223,813 910,000 109,278 2,650,015

-

2,471,524 24,284,904 501,946 27,258,374 29,908,389

-

157,742

-

27,431,572

2,674,425 -

6,828,655 513,812 12,668,625

2,674,425

$ 47,442,664

105

Packet Pg. 141

6.B.a

City of Healdsburg Combining Statement of Revenues, Expenses, and Changes in Net Position Sewer Fund Activities Year Ended June 30, 2017

OPERATING REVENUES Charges for Services Development Fees Other Operating Revenues

$

Total Operating Revenues OPERATING EXPENSES Maintenance and Operations Administration Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Interest Expense Total Nonoperating Revenues (Expenses) Income (Loss) Before Capital Contributions and Operating Transfers Transfers In Transfers Out Change in Net Position

$

$

-

Sewer Capacity $

566,867 -

703,184

-

566,867

1,787,456 666,463 1,150,151

572,410 80,730 203,844

1,640,001 -

-

3,604,070

856,984

1,640,001

-

3,038,299

(153,800)

(1,640,001)

566,867

55,282 (953,343)

1,990 -

15,351 -

1,528 -

(898,061)

1,990

15,351

1,528

2,140,238

(151,810)

(1,624,650)

568,395

17,361 (1,500,000)

(17,361)

1,830,167 (249,153)

(270,000)

(169,171)

(43,636)

28,921,716 $

702,039 1,145

Sewer Capital Replacement

6,642,369

657,599

Net Position - Beginning of Year Net Position - End of Year

6,623,357 19,012

Drainage

29,579,315

106

5,212,175 $

5,043,004

298,395

6,035,326 $

5,991,690

3,855,835 $

4,154,230

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Sewer Operations

Packet Pg. 142

6.B.a

$

$

101,063 -

$

7,325,396 667,930 20,157

101,063

8,013,483

-

3,999,867 747,193 1,353,995

-

6,101,055

101,063

1,912,428

(217) -

73,934 (953,343)

(217)

(879,409)

100,846

1,033,019

(69,876)

1,847,528 (2,106,390)

30,970

774,157

2,643,455

46,668,507

2,674,425

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Total Sewer Fund

Drainage Capacity

47,442,664

107

Packet Pg. 143

6.B.a City of Healdsburg Combining Statement of Net Position Electric Fund Activities June 30, 2017

ASSETS Current Assets: Cash and Investments Investment in NCPA Reserves Accounts Receivable - Net Interest Receivable Due from Other Funds Advances to Other Funds Prepaid Expenses Inventory Total Current Assets Noncurrent Assets: Restricted Cash and Investments Pension Stabilization Investments Capital Assets, Not Being Depreciated Land Construction in Progress Total Capital Assets, Not Being Depreciated Capital Assets, Depreciable Buildings Utility Systems Machinery and Equipment Total Capital Assets, Depreciable Less: Accumulated Depreciation Total Capital Assets, Net Total Noncurrent Assets Total Assets

$ 10,292,635 5,875,407 1,881,408 31,289 15,000 2,823 1,375,181 19,473,743

Capital Replacement

Electric Public Benefit

$

$

63,943 1,699,695 1,763,638

1,296,716 3,181 1,299,897

Total Electric Fund

Electric Capacity

$

1,779,967 4,449 1,784,416

$ 13,433,261 5,875,407 1,881,408 38,919 15,000 1,699,695 2,823 1,375,181 24,321,694

266,901 602,787

-

-

-

266,901 602,787

48,359 718,473 766,832

-

-

-

48,359 718,473 766,832

1,763,638

1,299,897

1,784,416

447,835 22,633,683 1,043,027 24,124,545 (11,799,672) 13,091,705 13,961,393 33,435,136

447,835 22,633,683 1,043,027 24,124,545 (11,799,672) 13,091,705 13,961,393 38,283,087

DEFERRED OUTFLOWS Deferred Pension Related Items

974,370

-

-

-

974,370

LIABILITIES Current Liabilities: Accounts Payable and Accrued Liabilities Payable to Successor Agency - Current Deposits Payable Pension Obligation Bonds Payable - Current Total Current Liabilities

50,690 117,517 337,719 133,822 639,748

38,536 38,536

60,333 60,333

-

149,559 117,517 337,719 133,822 738,617

2,043,329 3,422,110 673,651 6,139,090 6,778,838

38,536

60,333

-

2,043,329 3,422,110 673,651 6,139,090 6,877,707

218,412

-

-

-

218,412

13,091,705

-

-

-

13,091,705

602,787 13,717,764

1,725,102

1,239,564

1,784,416 -

1,784,416 602,787 16,682,430

1,784,416

$ 32,161,338

Noncurrent Liabilities: Payable to Successor Agency Net Pension Liability Pension Obligation Bonds Payable Total Noncurrent Liabilities Total Liabilities DEFERRED INFLOWS Deferred Pension Related Items NET POSITION Net Investment in Capital Assets Restricted: Capital Projects Pensions Unrestricted Total Net Position

$ 27,412,256

108

$

1,725,102

$

1,239,564

$

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Electric Operations

Packet Pg. 144

6.B.a City of Healdsburg Combining Statement of Revenues, Expenses, and Changes in Net Position Electric Fund Activities Year Ended June 30, 2017

OPERATING REVENUES Charges for Services Development Fees Other Operating Revenues

$

Total Operating Revenues OPERATING EXPENSES Purchase of Power Maintenance and Operations Administration Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Interest Expense Total Nonoperating Revenues (Expenses) Income (Loss) Before Capital Contributions and Operating Transfers Transfers In Transfers Out Change in Net Position Net Position - Beginning of Year Net Position - End of Year

$

11,811,582 183,333 47,009

Capital Replacement $

Electric Public Benefit -

$

328,702 385,782

Total Electric Fund

Electric Capacity $

57,317 -

$

12,140,284 240,650 432,791

12,041,924

-

714,484

57,317

12,813,725

6,307,503 3,258,502 787,691 510,206

154,719 -

460,936 -

-

6,307,503 3,874,157 787,691 510,206

10,863,902

154,719

460,936

-

11,479,557

1,178,022

(154,719)

253,548

57,317

1,334,168

79,673 (42,789)

930 -

12,126 -

(13,235) -

79,494 (42,789)

36,884

930

12,126

(13,235)

36,705

1,214,906

(153,789)

265,674

44,082

1,370,873

3,445 (1,066,697)

1,148,360 (110,566)

(32,628)

(158,360)

1,151,805 (1,368,251)

151,654

884,005

233,046

(114,278)

1,154,427

27,260,602

841,097

1,006,518

27,412,256

109

$

1,725,102

$

1,239,564

1,898,694 $

1,784,416

31,006,911 $

32,161,338

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Electric Operations

Packet Pg. 145

6.B.a City of Healdsburg Combining Statement of Net Position Internal Service Funds June 30, 2017

Vehicle Maintenance

Information Services

$ 2,628,697 12,801 -

$ 1,933,971 300 4,779 10,233 7,724

$ 1,106,493 9,782 2,727 -

Total Current Assets

2,641,498

1,957,007

Noncurrent Assets: Capital Assets, Depreciable Land and Improvements Machinery and Equipment

-

Total Capital Assets Less Accumulated Depreciation

ASSETS Current Assets: Cash and Investments Accounts Receivable - Net Notes and Loans Receivable Interest Receivable Prepaid Expenses Inventory

Building Maintenance

704,626 45,612 1,742 -

$ 6,373,787 58,713 9,782 9,248 10,233 7,724

1,119,002

751,980

6,469,487

5,424,803

1,277,203

1,798,185 -

1,798,185 6,702,006

-

5,424,803

1,277,203

1,798,185

8,500,191

-

(3,761,167)

(964,342)

Total Capital Assets, Net of Accumulated Depreciation

-

1,663,636

312,861

1,640,406

3,616,903

Total Noncurrent Assets

-

1,663,636

312,861

1,640,406

3,616,903

2,641,498

3,620,643

1,431,863

2,392,386

10,086,390

605,482 30,590 860,511

36,779 -

51,638 -

92,090 17,991 -

785,989 48,581 860,511

1,496,583

36,779

51,638

110,081

1,695,081

853,321

-

-

-

853,321

853,321

-

-

-

853,321

2,349,904

36,779

51,638

110,081

2,548,402

291,594

1,663,636 1,920,228

312,861 1,067,364

1,640,406 641,899

3,616,903 3,921,085

291,594

$ 3,583,864

$ 1,380,225

$ 2,282,305

$ 7,537,988

Total Assets LIABILITIES Current Liabilities: Accounts Payable and Accrued Liabilities Claims Payable - Current Compensated Absences - Current Total Current Liabilities Noncurrent Liabilities: Compensated Absences Total Noncurrent Liabilities Total Liabilities NET POSITION Net Investment in Capital Assets Unrestricted Total Net Position

$

110

$

Totals

(157,779)

(4,883,288)

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Insurance and Benefit

Packet Pg. 146

6.B.a City of Healdsburg Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds Year Ended June 30, 2017

OPERATING REVENUES Charges for Services Rental Income Other Operating Revenues

$

Total Operating Revenues OPERATING EXPENSES Maintenance and Operations Administration Insurance and Benefits Costs Depreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Gain/(Loss) on Disposal of Capital Assets Total Nonoperating Revenues (Expenses) Income (Loss) Before Capital Contributions and Operating Transfers Transfers In Transfers Out Change in Net Position Net Position - Beginning of Year Net Position - End of Year

$

Vehicle Maintenance

Information Services

-

$ 1,285,590 7,248

$ 1,603,862 1,149

-

1,292,838

-

Building Maintenance 937,530 235,847 41,044

$ 3,826,982 235,847 49,441

1,605,011

1,214,421

4,112,270

333,394 395,705 138,548

1,474,248 123,937 112,381

571,795 347,187 373,035 114,243

2,379,437 866,829 373,035 365,172

-

867,647

1,710,566

1,406,260

3,984,473

-

425,191

(105,555)

(191,839)

-

520 31,251

(882) (14,243)

(640) -

(1,002) 17,008

-

31,771

(15,125)

(640)

16,006

-

456,962

(120,680)

(192,479)

143,803

-

104,758 (11,964)

(20,455)

869,059 (218,974)

973,817 (251,393)

-

549,756

(141,135)

457,606

866,227

291,594

3,034,108

1,521,360

1,824,699

6,671,761

291,594

$ 3,583,864

$ 1,380,225

$ 2,282,305

$ 7,537,988

111

$

Totals

127,797

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

Insurance and Benefit

Packet Pg. 147

6.B.a

Insurance and Benefit CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers Payments to Employees for Services Payments to Suppliers for Goods and Services

$

Net Cash Provided (Used) by Operating Activities

1,485 148,323 190,290

Vehicle Maintenance

Information Services

$ 1,292,538 (212,822) (500,888)

$ 1,605,286 (281,035) (1,326,817)

340,098

578,828

(2,566)

-

104,758 (11,964) -

(20,455) 4,053

-

92,794

(16,402)

-

31,251 (658,725)

-

-

(627,474)

-

-

(1,349)

(1,860)

-

(1,349)

(1,860)

340,098

42,799

(20,828)

2,288,599

1,891,172

1,127,321

$ 2,628,697

$ 1,933,971

$ 1,106,493

$

$

$

CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Cash Received from Other Funds Cash Paid to Other Funds Loans repaid/(Issued) Net Cash Provided (Used) by Noncapital and Related Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Cash Received from Sale of Capital Assets Acquisition and Construction of Capital Assets Net Cash Provided (Used) by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest Received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of the Year Cash and Cash Equivalents, End of the Year Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation Changes in Operating Assets and Liabilities: Decrease (Increase) in Accounts Receivable Decrease (Increase) in Prepaid Expenses Decrease (Increase) in Inventory Increase (Decrease) in Accounts Payable Increase (Decrease) in Claims Payable Increase (Decrease) in Compensated Absences Payable TOTAL CASH PROVIDED (USED) BY OPERATING ACTIVITIES

112

-

-

138,548

1,485 203,424 (13,134) 148,323 $

340,098

425,191

112,381

(300) 764 18,756 (4,131) $

578,828

(105,555)

275 2,385 (12,052) $

(2,566)

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Statement of Cash Flows Internal Service Funds Year Ended June 30, 2017

Packet Pg. 148

Building Maintenance

Totals

$ 1,210,826 (202,216) (1,061,355)

$ 4,110,135 (547,750) (2,698,770)

(52,745)

863,615

869,059 (218,974) -

973,817 (251,393) 4,053

650,085

726,477

(637,577)

31,251 (1,296,302)

(637,577)

(1,265,051)

(1,223)

(4,432)

(1,223)

(4,432)

(41,460)

320,609

746,086

6,053,178

$

704,626

$ 6,373,787

$

(191,839)

$

114,243

(52,745)

127,797

365,172

(3,595) 2,507 7,948 17,991 $

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

(2,135) 764 23,648 195,189 4,857 148,323 $

863,615

113

Packet Pg. 149

6.B.a

Redevelopment Agency DBD ASSETS Cash and Investments Cash and Investments with Fiscal Agent Receivables: Accounts Notes Interest Advances to City of Healdsburg Capital Assets, Not Being Depreciated Capital Assets, Net of Accumulated Depreciation

$

-

Total Assets LIABILITIES Accounts Payable Interest Payable Noncurrent Liabilities Due within One Year Due in More than One Year Total Liabilities NET POSITION Net Position (Deficit) Held in Trust for Successor Agency and Other Purposes

$

$

Plaza Flowers Veterans Trust

Community Benefit Trust

200,029

$

172,152 -

$

2,956 -

-

-

422 -

-

-

-

-

-

-

200,029

172,574

2,956

-

-

1,450 -

-

-

-

-

-

-

-

1,450

-

-

114

Senior Center Trust

$

200,029

$

171,124

$

2,956

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Statement of Fiduciary Net Position Private-purpose Trust Funds June 30, 2017

Packet Pg. 150

Post RDA Successor Agency

$

$

Post RDA Debt Retirement Fund

562,187 -

$

Totals

2,837,265 4,593,260

$

3,574,560 4,793,289

360,345 8,303 4,055,534 528,300

9,945 -

9,945 360,345 8,725 4,055,534 528,300

359,641

-

359,641

5,874,310

7,440,470

13,690,339

3,700 -

864,540

5,150 864,540

-

1,772,900 45,669,200

1,772,900 45,669,200

3,700

48,306,640

48,311,790

5,870,610

$

(40,866,170)

$

(34,621,451)

115

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 151

6.B.a

Redevelopment Agency DBD ADDITIONS Taxes and Assessments Investment Earnings Transfers

$

-

Total Revenues DEDUCTIONS Community Development Depreciation Interest Expense Transfers Total Deductions Change in Net Position Net Position (Deficit), Beginning Net Position (Deficit), Ending

Senior Center Trust

$

22,750 -

Plaza Flowers Veterans Trust

Community Benefit Trust

$

987 -

$

1 -

-

22,750

987

1

3,164 -

2,971 -

11,450 -

372 -

3,164

2,971

11,450

372

(3,164)

19,779

(10,463)

(371)

3,164

180,250

181,587

$

-

116

$

200,029

$

171,124

3,327 $

2,956

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

City of Healdsburg Combining Statement of Changes in Fiduciary Net Position Private-purpose Trust Funds Year Ended June 30, 2017

Packet Pg. 152

Post RDA Successor Agency

$

3,987,226 18,056 -

Post RDA Debt Retirement Fund

$

$

3,987,226 164,590 3,769,805

4,005,282

3,892,601

7,921,621

347,908 20,696 3,769,805

2,080,047 -

365,865 20,696 2,080,047 3,769,805

4,138,409

2,080,047

6,236,413

1,812,554

1,685,208

(42,678,724)

(36,306,659)

(133,127) 6,003,737 $

122,796 3,769,805

Totals

5,870,610

$

(40,866,170)

$

(34,621,451)

117

Attachment: Healdsburg Financial Statements FY 2016-17 (1850 : Approve the Audited Financial Statements)

6.B.a

Packet Pg. 153

6.C

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

2018 Community Benefit Grant Program

PREPARED BY:

Raina Allan, Deputy City Clerk

STRATEGIC INITIATIVE(S): Quality of Life

RECOMMENDED ACTION(S): Adopt a Resolution approving Community Benefit Grants for the 2018 program year

BACKGROUND: Beginning in 1998, the City Council used a portion of the annual interest earnings on revenue realized from the sale of the old city hall building to fund the Community Benefit Grant Program (“CBGP”). The City distributed grants annually through fiscal year 2009. Due to financial challenges and changes in redevelopment laws it became necessary for City Council to reevaluate the CBGP. The City thus suspended the program during fiscal years 2010-2013, and reinstated it in in 2014. DISCUSSION/ANALYSIS: On November 27, 2017, the City made CBGP applications available to nonprofit agencies within the City of Healdsburg. Staff received, by the deadline, a total of 16 applications totaling $114,015 in funding requests. The funding allocated for FY 2017-18 was $50,000. At a special meeting held on January 29, 2018, the Council reviewed and evaluated the applications submitted by local non-profit organizations based on Council established priorities and benefit to the community. Following deliberation, the Council determined to allocate the grant funding as follows: Active 20-30 Club #205 Alliance Medical Center Farm to Pantry Friends of the Healdsburg Farmers’ Market Healdsburg Center for the Arts Healdsburg Community Nursery School

$ 3,750 2,000 2,500 2,500 1,000 14,440

Packet Pg. 154

6.C

Healdsburg Jazz Festival Healdsburg Performing Arts Inc. Healdsburg Shared Ministries H-Town Youth Theatre Verity Total

2,500 2,000 10,000 2,750 1,500 $ 44,940

At the special meeting, Council also expressed interest in allocating the remaining $5,060 to the ongoing fee subsidy program to continue providing Healdsburg registered non-profit organizations rental space at the Healdsburg Community Center and Healdsburg Senior Center. ALTERNATIVES: The Council may change the allocation, and/or funding source. FISCAL IMPACT: The CBGP is funded by the Community Benefit Trust Fund. Funding for this year’s program in the amount of $50,000 was included in the fiscal year 2017-18 budget. As of June 30, 2018 the remaining estimated fund balance will be $76,124. ENVIRONMENTAL ANALYSIS: Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment. ATTACHMENT(S): Resolution

Packet Pg. 155

6.C.a

CITY OF HEALDSBURG RESOLUTION NO. _____-2018 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG APPROVING COMMUNITY BENEFIT GRANTS FOR PROGRAM YEAR 2018

WHEREAS, a request for proposals for Community Benefit Grant Program (“CBGP”) funds was released in November 2017, and proposals from local non-profits were solicited and received; and WHEREAS, the City Council on January 29, 2018 at a special Council meeting selected programs for funding that best meet a broad community need; and WHEREAS, the CBGP is funded out of the Community Benefit Trust Fund and the 2018 grants total $44,940; and WHEREAS, included in the fiscal year 2017-18 budget is $50,000 in appropriations; and WHEREAS, Council desires to allocate the remaining $5,060 to the ongoing fee subsidy program to continue to provide Healdsburg registered non-profit organizations rental space at the Healdsburg Community Center and the Healdsburg Senior Center; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg does hereby approve 2018 Community Benefit Grant funding for the following agencies in the amounts indicated: Active 20-30 Club #205 Alliance Medical Center Farm to Pantry Friends of the Healdsburg Farmers’ Market Healdsburg Center for the Arts Healdsburg Community Nursery School Healdsburg Jazz Festival Healdsburg Performing Arts Inc. Healdsburg Shared Ministries H-Town Youth Theatre Verity Total

$ 3,750 2,000 2,500 2,500 1,000 14,440 2,500 2,000 10,000 2,750 1,500 $ 44,940

Attachment: Resolution (1860 : Community Benefit Grant)

WHEREAS, the City Council of the City of Healdsburg, desirous of expending the interest earnings realized on proceeds from the sale of the old City Hall on projects for the community good, established the Community Benefit Trust; and

BE IT FURTHER RESOLVED that the City Council does hereby allocate $5,060 to the ongoing fee subsidy program to continue to provide Healdsburg registered non-profit

Packet Pg. 156

6.C.a

Resolution No. ____-2018 Page 2

organizations rental space at the Healdsburg Community Center and the Healdsburg Senior Center. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Healdsburg this 5th day of February 2018, by the following vote: AYES: Councilmembers: () NOES: Councilmembers: ()

ABSTAINING: Councilmembers: () SO ORDERED:

ATTEST:

Brigette A. Mansell, Mayor

_________________________________ Maria Curiel, City Clerk

Attachment: Resolution (1860 : Community Benefit Grant)

ABSENT: Councilmembers: ()

Packet Pg. 157

8.A

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Community Housing Committee Work Plan Update and Recommendation to adopt revised Housing Action Plan

PREPARED BY:

Lisa Kranz, Senior Planner

STRATEGIC INITIATIVE(S): Quality of Life

RECOMMENDED ACTION(S): Receive report and by Resolution adopt revised Housing Action Plan

BACKGROUND: The Community Housing Committee (“CHC’) was established in September 2015 (Resolution 116-2015) to advise and make recommendations on how to best address workforce and affordable housing challenges in the City of Healdsburg. The CHC helped to develop the Housing Action Plan (July 2016) to implement the City’s housing policies identified in the Housing Element. Council Resolution 28-2017, adopted in April 2017 and attached to this report, establishes a new Community Housing Committee and reaffirms its charge. The resolution directs the Community Housing Committee’s initial work assignments as: 

Update the Housing Action Plan to reflect the existing Growth Management Ordinance (“GMO”) remaining in place including omitting reference to amending the GMO and creation of a middle income category of affordable housing.



Review the Council adopted GMO Policies and Procedures to ensure they align with the City’s affordable housing objectives including assessing the way allocations are currently distributed.

Work assignments to begin once the initial work assignments have been completed: 

Update the Inclusionary Housing Ordinance (“IHO”) to ensure it is meeting the City’s

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affordable housing objectives including reviewing the affordability requirement to determine the optimal affordability requirement that can be supported without overburdening developers. 

Assess alternatives for providing additional affordable housing including an enhanced infrastructure financing district, commercial linkage fee, or commercial inclusionary housing ordinance.



Review the Accessory Dwelling Unit (“ADU”) Ordinance for further local amendment in order to further encourage ADUs.

Community Housing Committee The seven member CHC has met six times since it was established by the City Council: in July, August, October, November and December 2017 and January 2018. At the first two meetings, the CHC appointed a Chair and Vice Chair; discussed committee roles, duties and responsibilities; reviewed CHC bylaws; received information from staff regarding housing in Healdsburg and the CHC work plan; and reviewed and discussed the Housing Implementation Strategy and the Housing Action Plan. The later meetings focused on the HAP and GMO Policies and Procedures. The following summarizes the progress of the Committee toward completing its five work items. Draft Revised Housing Action Plan (“HAP”). The committee began its review of the HAP at its October 30, 2017 meeting, considering a redline version which focused on changes necessitated by Measure R’s failure to be supported by Healdsburg voters in November 2016, and thus reflecting the existing GMO. The redline also proposed changes to reflect City policies or documents which had been enacted since initial adoption of the HAP, but much of the document remained unchanged. The CHC discussed the HAP at two subsequent meetings, ensuring Priority Recommendations were updated and incorporating other revisions. At its January 18, 2018 meeting, the Committee recommended the Council adopt a revised HAP, described in more detail below. Housing Action Plan Background On July 18, 2016, the Healdsburg City Council adopted Resolution 76-2016 approving the City of Healdsburg Housing Action Plan. The HAP was the culmination of more than 30 community workshops and public meetings that started with the revision of the City’s Housing Element in 2014. Through these public meetings, Healdsburg residents articulated a desire for more housing affordable to existing residents and employees in the City. As noted above, the City Council established a Community Housing Committee in September 2015 to identify ways to address future housing needs and work alongside residents to prepare a Housing Action Plan. Through the workshops and public meetings, the HAP was developed, reflecting community sentiment and vision for housing in Healdsburg. The Housing Action Plan was drafted with a timeframe for implementation which corresponds to that of the adopted Housing Element (2017 – 2022). Additionally, the HAP was to work in

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tandem with a Growth Management Ordinance Amendment that was to be placed on the November 2016 ballot, which proposed to add flexibility to the City’s growth management program that would allow for more overall housing development. Upon adoption of the HAP, it was recognized that if the GMO initiative was not supported, that not all of the recommendations of the HAP could be implemented. When the GMO measure did not pass in November 2016, the City Council found that the HAP as adopted in July 2016 would need to be amended to reflect the growth management system which remains in place. To that end, the City Council established the parameters governing a new Community Housing Committee in April 2017 including updating the Housing Action Plan to reflect the existing Growth Management Ordinance. The Community Housing Committee, as directed, began its work reviewing a revised draft Housing Action Plan in October 2017. The CHC received a redline version of the document which included amendments acknowledging the current GMO and changes reflecting City policies or documents which have been enacted since initial adoption of the HAP in July 2016. Revised Housing Action Plan As noted above, extensive community involvement informed the preparation of the HAP. Through public comment and the discussion of the initial CHC, content of the draft HAP evolved, and it was developed to contain four main components which remain in the revised draft document: 1. A Vision for housing in Healdsburg in 2022 that seeks to create a more affordable and diverse community; 2. Five Objectives that form the basis of what the HAP should achieve. Each Objective is accompanied by a Target that defines the desired outcomes in a quantitative manner, to provide a measurement for success at the end of the planning period in 2022; 3. A set of Recommendations to be implemented during the planning period; 4. An implementation and update process that outlines how the City will evaluate and assess success toward meeting the Objectives. The revised HAP recommended by the CHC does not alter the Vision or the Objectives, other than to include new terminology regarding the formerly described “secondary” dwelling units, which the Objectives and document now refer to as “accessory” dwelling units, or ADUs. The CHC addressed document wording, whether the numerical Targets noted in the five Objectives and report card remained achievable, the revision to the Design Guidelines as related to one of the HAP’s Priority Recommendations, and parking for accessory dwelling units. The Committee discussed the Priority Recommendations extensively, and recommended changes, as follows: PR 1: Update the Current Growth Management Ordinance Policies and Procedures Background: Due to the amendment to the GMO failing to pass, the Council tasked the CHC with reviewing the GMO Policies and Procedures to ensure they align with the City’s housing

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objectives, including assessing the way allocations are currently distributed to create the types of housing the community has said it wants to see. This recommendation is amended to reflect that program. PR 2: Implement a Transitional Growth Regulation Tool Background: This recommendation is proposed for deletion given the existing GMO remains in effect. PR 3: Identify a long term funding sources for Affordable Housing Background: This recommendation is altered since voters approved a 2% increase to the City’s Transient Occupancy Tax (TOT) in November 2016, creating a dedicated, long-term local source of funding for affordable housing services and programs. While this is anticipated to generate approximately $600,000 in fiscal year 2017/18 and could grow to as much as $1.1m by FY 2026/27, the Council tasked the CHC with identifying alternative sources of affordable housing which might include additional funding opportunities and/or construction requirements. PR 4: Expand Incorporate the definition of Middle Income Affordable Housing in the Land Use Code to include and other policy documents Background: The Council directed the CHC address creation of a middle income category in its review of the Growth Management Policies and Procedures. PR 5: Revise the Inclusionary Housing Ordinance to require 30% Optimize Affordable Housing Production Background: This recommendation is revised since the GMO limitation of 30 units per year on average makes achieving a 30% inclusionary requirement economically infeasible. The Council tasked the CHC with reviewing the Inclusionary Housing Ordinance to ensure it is meeting the City’s affordable housing objectives including reviewing the affordability requirement to determine the optimal affordability requirement that can be supported without overburdening developers. PR 6: Expand Affordable Housing Incentives Background: No change is proposed for this recommendation. The City’s adopted policies and ordinances include a number of mechanisms intended to expand affordable housing including fee deferral, fee financing, reduced development standards, and such. By implementing the existing provisions of the City’s code and revising them where appropriate, the City can provide additional incentives for providing affordable housing. PR 7: Evaluate Revision of Update the Impact Fee Schedule to scale with Unit Size. and Implement Explore a Fee Deferral Program for Deed-Restricted SDUs ADUs

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Background: The City Council adopted revised Accessory Dwelling Unit (ADU) impact fees in February 2017 which reduced these fees by approximately 50%. Under the reduced fees, impact fees on a 600 SF ADU with a 1,350 SF primary unit are approximately $8,631. With this significant reduction in fees (down from approximately $17,000 per unit), the viability of/potential interest in a further deferral program should be assessed. In addition, review of residential impact fees should assess whether scaling to unit size would spur additional small unit production. PR 8: Update Parking Regulations to scale requirements to location and size Background: No change is proposed for this recommendation. Planning Staff has initiated work on a parking standards update which will inform any potential revisions to the parking regulations. This work is anticipated to be completed in spring 2018. PR 9: Update the Residential Design Guidelines to address community concerns for scale and character of new housing Background: This recommendation is underway - the City’s Design Guidelines are currently being revised. The draft Design Guidelines are anticipated to be adopted in early 2018 Minor wording changes were also recommended by the CHC and are included in the revised Housing Action Plan attached to this report. Revisions to the HAP Objectives and Supporting Recommendations suggested by the CHC are consistent with and support the proposed changes to the Priority Recommendations as noted above. The most significant changes include the addition of affordable housing project information under Objective 1 and an outline of revisions made to City Accessory Dwelling Unit Ordinance and related fees under Objective 2. The original HAP remains mostly intact. Table 1 near the end of the HAP lists Priority and Supporting Recommendations, responsible department, and completion time ranges. Due to the need to revise the HAP, these completion timeframes have been delayed, and new target completion date ranges included. Growth Management Ordinance Policies and Procedures. The CHC commenced discussion of the second of the initial work items at its November 13 meeting. Committee members had an in-depth discussion about the GMO Policies and Procedures, including the definition of Categories A and B, the number of allocations available in each category, allocation carryover, and how the Policies and Procedures could align with the Housing Action Plan. Development Agreements, and how these documents affect the availability of allocations and impact the GMO program over time, were also discussed by Committee members. The Committee continued discussion of the GMO Policies and Procedures at its December 2017 and January 2018 meetings. The Committee’s initial discussion concluded that over a 3-year cycle that Category A should include 15 allocations with Category B having 75, and that a point or similar system be established to prioritize the housing types identified in the Housing Action Plan: multifamily rentals with smaller units included, price restricted middle income units, and accessory dwelling units, possibly deed restricted for local preference. Additionally, the

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Committee found carryover should be allowed as much as possible, that timeframes should be established for a developer to “use it or lose it” in terms of allocation validity, that no maximum allocation per project should apply, and that regular evaluation of the GMO Policies and Procedures be included. Aspects of a discretionary versus a ministerial method of issuing allocations were discussed, and the Committee concluded that a ministerial system, administered by City staff, would be the most simple for all concerned. Development pre-application meetings would be a key point at which to advise developers of the City’s housing type priorities. Conclusions at the close of the January meeting discussion recommended establishing a system that would prioritize Category B allocations, generally as follows: multifamily rental units with mix of smaller units; middle income units (price restricted and local preference); middle income units (no affordability agreement); single family units with accessory dwelling units (deed restricted for local preference); single family units with accessory dwelling units (no deed restriction). The first three unit types would be prioritized in Year 1 of a 3-year period. Year 2 and 3 would be open to all other unit types. Projects with a mix of housing types, proposed at the maximum allowable density and/or exceeding inclusionary requirements would also be prioritized. Staff and consultant are currently revising the GMO Policies and Procedures to incorporate the CHC’s conclusions for discussion at its upcoming February 12, 2018 meeting. Update Inclusionary Housing Ordinance. The Committee received a background memo and other materials in fall 2017 to begin learning about inclusionary housing generally and how it has been applied in Healdsburg. The topic was introduced at the January 2018 meeting, with discussion focusing on program components, including building on-site affordable units, paying a fee in lieu of providing units, and local preference for affordable units. Discussion on inclusionary housing will continue at the CHC’s February meeting. DISCUSSION/ANALYSIS: The revised Housing Action Plan recommended by the Community Housing Committee is before the City Council for consideration and adoption. Once the CHC finalizes its recommendation on the Growth Management Policies and Procedures, anticipated in spring 2018, those will be brought forward for Council action. A revised Inclusionary Housing Ordinance will be developed after additional work by the CHC. Once the CHC has recommended a revised IHO, it will then be forwarded to the Planning Commission for public hearing and then to the City Council for hearing and action, sometime later this year. The CHC will address its other secondary assignments, funding and incentives for affordable housing and accessory dwelling unit regulations, at upcoming meetings. A schedule outlining tentative future dates for CHC consideration of various topics is attached to this report.

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ALTERNATIVES: Not applicable. FISCAL IMPACT: Adoption of the Housing Action Plan does not have a direct fiscal impact. Implementation measures included in the document anticipate additional work which may require consultant assistance and additional financial resources. Any future expenditure will require review of the City Council. ENVIRONMENTAL ANALYSIS: Pursuant to Title 14, the California Code of Regulations, Section 15262 and Section 15061(b)(3) of the California Environmental Quality Act (“CEQA”) Guidelines, adoption of the revised Housing Action Plan will not result in a direct or indirect physical change to the environment. An update regarding the Community Housing Committee’s activities is not a project under CEQA. ATTACHMENT(S): Proposed Resolution Housing Action Plan - Final City Council Resolution 28-2017 CHC Meeting Schedule and Agenda 2-12-18

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CITY OF HEALDSBURG RESOLUTION NO. _____-2018 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG ADOPTING A REVISED HOUSING ACTION PLAN AND RESCINDING RESOLUTION NO. 76-2016 WHEREAS, after extensive community involvement and effort of the Community Housing Committee, the City Council adopted a Housing Action Plan on July 18, 2016; and WHEREAS, as initially drafted, the Housing Action Plan was to work in tandem with a Growth Management Ordinance initiative that was to be placed on the ballot in November 2016 to add flexibility to the City’s growth management program that would allow for more housing development; and WHEREAS, Measure R, the Growth Management Ordinance initiative, was defeated by the voters of the City of Healdsburg with 59.3% voting no and 40.7% voting yes, necessitating revision to the Housing Action Plan; and WHEREAS, the City Council appointed a new Community Housing Committee and set forth its work program in Resolution No. 28-2017, with the first priority being revision of the Housing Action Plan to reflect the existing Growth Management Ordinance remaining in place; and WHEREAS, the Community Housing Committee considered revisions to the Housing Action Plan at its meetings of October and November 2017 and January 2018, focusing on changes that would recognize and ensure consistency with the City’s Growth Management Ordinance; and WHEREAS, the Community Housing Committee recommended changes to the Plan’s Priority Recommendations along with revisions to the Plan’s narrative to allow adoption of the revised Plan and commencement of implementation; and WHEREAS, on January 16, 2018, the Community Housing Committee unanimously (1 absent) recommended that the City Council adopt the Housing Action Plan as revised and attached as Exhibit A; and WHEREAS, on February 5, 2018, the Healdsburg City Council considered the revised Housing Action Plan; and WHEREAS, the revised Housing Action Plan timeframe runs until 2022, consistent with the Housing Element’s housing cycle; and WHEREAS, progress toward implementation of the Plan’s targets will be provided to the City Council periodically as outlined in the HAP so the Council can assess how HAP Objectives are being met; and

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Resolution No. ____-2018 Page 2

WHEREAS, the HAP is consistent with the General Plan; and WHEREAS, pursuant to Title 14 of the California Code of Regulations, Section 15262 and Section 15061(b)(3) of the California Environmental Quality Act (“CEQA”) Guidelines, the project will not result in a direct or indirect physical change to the environment and is therefore exempt from CEQA. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby adopts the revised Housing Action Plan as recommended by the Community Housing Committee and reflected in Exhibit A and rescinds Resolution No. 76-2016. PASSED, APPROVED AND ADOPTED by the City Council of the City of Healdsburg this 5th day of February, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAINING: SO ORDERED:

ATTEST:

__________________________________ Brigette A. Mansell, Mayor

_________________________________ Maria Curiel, City Clerk

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A Housing Action Plan to increase the Affordability and Diversity of housing in Healdsburg

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HOUSING OUR COMMUNITY

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© City of Healdsburg 2018 All Rights Reserved

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TABLE OF CONTENTS EXECUTIVE SUMMARY

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SECTION 1: INTRODUCTION, VISION AND PRIORITY RECOMMENDATIONS Overview

1

Purpose and Vision Statement

2

Priority Recommendations

4

PR-1 Update the Current Growth Management Ordinance Polices & Procedures

4

PR-2 Identify Funding Sources for Affordable Housing

5

PR-3 Expand the Definition of Middle Income Housing in the Land Use Code & other policy documents

5

PR-4 Revise the Inclusionary Housing Ordinance

6

PR-5 Expand Affordable Housing Incentives

6

PR-6 Evaluate revision of the Impact Fee Schedule

7

PR-7 Update Parking Regulations to scale requirements to location and unit size

7

PR-8 Update Residential Design Guidelines to address Community concerns for scale and character of new housing

8

Priority Recommendation Outcomes

9

SECTION 2: OBJECIVES AND SUPPORTING RECOMMENDATIONS Role of the Objectives

12

HAP Objectives 2017-2022

13

· · · · ·

Objective 1.0 Objective 2.0 Objective 3.0 Objective 4.0 Objective 5.0

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SECTION 3: IMPLEMENTING AND UPDATING THE HAP Implementing the HAP

28

Updating the HAP

32

CREATING THE HAP (Summary of Public Process)

36

ACRONYMS AND TERMS TO KNOW

38

ACKNOWLEDGEMENTS

40

FIGURES AND TABLES Table 1: Summary of Recommendations and Responsibilities

24

Table 2: Example Implementation Roles by Objective

30

Table 3: Meetings, Work Sessions & Public Forums

36

Figure 1: HAP Review Timeline

33

Figure 2: Example Housing Action Plan Report Card

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HOUSING OUR COMMUNITY

EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY THE HAP CONSISTS OF FOUR PRIMARY ELEMENTS: A Vision for Housing in 2022 articulates the kind of housing we would like created in our community by the end of the Housing Cycle Objectives clear statements of what should be accomplished by 2022 to achieve the Vision Targets measurable outcomes that demonstrate achievement of the Objectives Recommendations defined programs and actions that need to be taken to meet the Targets for each Objective

Through a series of over 30 public meetings with extensive public input, residents have expressed the need for more housing affordable to working families as well as greater housing options in our community. Hearing these concerns, the City Council established the Community Housing Committee (CHC) to work alongside residents to prepare the City’s first Housing Action Plan (HAP). The Housing Action Plan establishes a Vision for housing in Healdsburg and identifies Objectives designed to address the creation of more affordable and diverse housing options in our community.

The HAP works in conjunction with the City's adopted Growth Management Ordinance and other existing, adopted policy documents to shape residential growth in Healdsburg. The HAP strengthens other City tools that manage and direct the character and type of residential growth occurring in Healdsburg, and provides the framework for achieving specific, quantifiable housing Objectives to be achieved within a specific timeframe – the Housing Cycle. Achieving these Objectives is accomplished by implementing a series of defined Recommendations. Progress on each Objective can be assessed by setting a series of Targets – which are measurable by nature – to be achieved by the end of the Housing Cycle in order to realize the community's Vision for housing. During the Housing Cycle, six month assessments on progress and lessons learned will be provided to City Council and the public as part of the HAP reporting tools. Prior to the end of each Housing Cycle, and concurrent with the update to the Housing Element, a new HAP will be prepared – reflecting on lessons learned, what has worked in the previous Housing Cycle and what can be improved - in an effort to achieve newly established housing priorities and updated Objectives for the coming Housing Cycle. The HAP was originally adopted in July 2016 in anticipation of voters’ consideration of an update to the Growth Management Ordinance (GMO) in November 2016 (Measure R). With the failure of Measure R, the HAP has been revised to reflect the 2000 GMO remaining in place. For more information, see Table 1 for a summary of all of the Recommendations.

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Describing What We Want The Vision for housing in Healdsburg in 2022 emerged from months of conversation and wordsmithing at community workshops and public meetings. The final Vision - refined from ten prior versions – expresses the community’s desire to create a better balance of housing in our community by 2022 – both in its affordability (rental and ownership) and in the range of housing options available to different households, diverse income ranges, family sizes, formats, settings and lifestyles. The Vision statement combines the key themes of affordability and diversity, and establishes the long term, desired role for housing in Healdsburg. As such, it forms the foundation for the HAP's Objectives and Recommendations during this Housing Cycle (2017-2022).

The HAP emerged from over 30 public meetings and workshops, spanning 24 months.

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A VISION FOR HOUSING IN HEALDSBURG IN 2022

In 2022, Healdsburg is a diverse, thriving community evidenced by a wide variety of housing both price and type.

all life stages and all economic levels

Individuals at

participate in active, welcoming neighborhoods, which together make up our larger community.

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Defining What Needs to be Accomplished

HOW WE WILL MEASURE OUR PROGRESS* Increased number of younger households in our community (Median age currently 40.2) Increased percentage of deed restricted Affordable Housing as a percentage of total housing stock (currently 8.2%) Increased percentage of non single family residential unit types (currently 17%) Increased ratio of people who live AND work in town (currently 33%)

Ensuring we are moving toward the Vision established by the community requires tools to be able to measure progress. The HAP is written around a series of Objectives that will shape housing over the next five years (the remainder of the current Housing Element cycle), all in pursuit of moving the community closer to its stated Vision for housing. Accompanying each Objective is a specific Target which helps provide a 'yardstick' for assessing progress during the proposed Housing Cycle. Leveraging limited resources - land, human and financial capital - the HAP provides a strategy to integrate the City's policies, ordinances, programs and best practices to achieve the Vision and Objectives efficiently. Semi-annual assessments (qualitative review and reporting), plus a biennial reporting process (report card) will provide the opportunity to openly evaluate progress in achieving the HAP's Targets, and adjust resources or adapt policies as needed to achieve the stated Objectives by the end of the Housing Cycle.

Increase in public and private school populations (currently 1,650 K-12)

*Source for Indicators 1 American FactFinder 2014: http://factfinder.census.gov/faces/tableservices/jsf/pages/productview. xhtml?src=bkmk 2 Healdsburg Housing Element Total Units p.22, Table 11; Deed-Restricted Units p. 53, Table 29 3 Healdsburg Housing Element Total Units p.22, Deed-Restricted Units p. 53, Table 29 4 EPS Housing Needs Assessment presentation 11.26.15 5 Education Facts for Sonoma County Schools, Sonoma County Office of Education, 2015-16

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Increase the Quantity and Quality of Deed-Restricted Affordable Housing

1.0

2022 Target = 200 New Affordable Units

Encourage and Facilitate Private Development of Accessory Dwelling Units

2.0

2022 Target = 125 Secondary Units

Develop Middle Income Housing

3.0

2022 Target = 132 New Units

Encourage Multi-Family Rental Units

2022 Target = 100 New Rental Units

5.0

4.0

Encourage Development of Mixed Product Types

2022 Target = 50% of all New Units

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OBJECTIVES & TARGETS of the HAP

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Identifying What Needs to be Done The HAP's greatest impact and synergy will be achieved through its Priority Recommendations that are crucial to changing how housing gets built in our community over the next Housing Cycle. Given the complexity of Healdsburg's housing challenge, the Priority Recommendations provide the foundation for redirecting public and private efforts to build what the community has said it needs. These Recommendations are prioritized because they can have an immediate impact on housing, while also supporting the Objectives of the HAP. Supporting Recommendations serve to augment the Priority Recommendations and provide an- other level of detailed actions and changes that need to be completed during the Housing Cycle, in order to achieve the HAP's Objectives.

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Following development of preliminary recommendations, the Community Housing Committee assembled a panel of housing experts to evaluate the proposed Objectives and Recommendations to ensure the proposals being considered would create the kind of housing the community is seeking.

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PRIORITY RECOMMENDATIONS 1. Update the Growth Management Ordinance Policies and Procedures 2. Identify Funding Sources for Affordable Housing 3. Incorporate the definition of Middle Income Housing in the Land Use Code and other policy documents 4. Revise the Inclusionary Housing Ordinance to Optimize Affordable Housing Production 5. Expand Affordable Housing Incentives 6. Evaluate Revision of the Impact Fee Schedule to scale with Unit Size. Explore a Fee Deferral Program for Deed- Restricted ADUs 7. Update Parking Regulations to scale requirements to location and size 8. Update Residential Design Guidelines to address community concerns for scale and character of new housing

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Section

1

INTRODUCTION, VISION AND PRIORITY RECOMMENDATIONS

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INTRODUCTION to the HAP OVERVIEW

The HAP serves as a companion policy document to, and works in conjunction with, the City's existing adopted legislative documents including: ·

City of Healdsburg Strategic Plan

·

General Plan and associated Housing Element

·

Land Use Code

·

Inclusionary Housing Ordinance (which is part of the Land Use Code)

·

Urban Growth Boundary

·

Growth Management Ordinance

The City of Healdsburg’s Housing Action Plan (HAP) strengthens other City tools that shape and direct the character and type of residential growth occurring in Healdsburg. The HAP establishes a Vision for housing in Healdsburg and acts as a tool by which both the City Council and residents can proactively shape the character of the community’s housing over a defined Housing Cycle. The Housing Cycle runs concurrently with the City’s Housing Element. The Housing Element is one of the nine Elements of the City’s General Plan, which is the 'blueprint' for how the City will grow and provides the policy basis and requirements for how the City addresses its housing needs. Unlike the other General Plan Elements, the Housing Element is typically updated every eight years per State of California requirements. Aligning the Housing Cycle with the Housing Element Update process provides a unique way to discuss and manage housing growth holistically in our community. The Housing Cycle also establishes a specific timeframe within which HAP defined Objectives are to be met, by completing a list of specific Recommendations. Progress toward each Objective will be assessed by setting a series of Targets, which are measurable by nature, and intended to be fulfilled by the end of the Housing Cycle. Semi-annual updates to City Council, as well as a biennial reporting process (report card) provides the opportunity to assess progress in achieving the HAP's Targets and efforts to move toward our stated Vision. This in turn will help the City Council adjust resources and adapt policies and tools as necessary, all in an effort to achieve the stated Objectives by the end of the Housing Cycle. Prior to the end of each Housing Cycle (and concurrent with the Housing Element Update process), a new HAP will be prepared by reassessing community housing needs, reaffirming or re-directing the Vision, and establishing a new set of Objectives and Recommendations for the next cycle

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DOCUMENT PURPOSE

The HAP is meant to facilitate four key outcomes: 1. Tell Healdsburg’s Housing Story - what the town values, the role housing plays in creating a sustainable, thriving community, and how we plan to get there.

2. Establish Clear and Measurable H ousing Objectives – measurable objectives for creating housing, established through community input, that will allow leadership to better direct the City’s resources to accomplish what the community has said is important, while fulfilling State mandated goals

3. Integrate and Strengthen Tools Used to Manage Growth the complexity of housing our community will not be solved by a single solution. Nor is it an isolated issue. The HAP will make evident the link between long term, enduring housing solutions, and other related policies such as alternative transportation, community health, green building, economic vitality and long term sustainability.

4. Attract Like Minded Partners – the HAP provides a clear

statement of what our community wants to see in its new housing – and how regulations and incentives should be structured to achieve that outcome. Builders – both forprofit and non-profit - will be attracted by the clarity of our vision, and those who share our values will be more inclined to participate as a part of our collective solution.

THE VISION

2

The Vision for housing in Healdsburg in 2022 emerged from months of conversation and wordsmithing at community workshops and public meetings. The final Vision - refined from ten prior versions – expresses the community’s desire to create a better balance of housing in our community by 2022 – both in its affordability (rental and ownership) and in the range of housing options available to different households, diverse income ranges, family sizes, formats, settings and lifestyles.

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A VISION FOR HOUSING IN HEALDSBURG IN 2022

In 2022, Healdsburg is a diverse, thriving community evidenced by a wide variety of housing both price and type.

all life stages and all economic levels

Individuals at

participate in active, welcoming neighborhoods, which together make up our larger community.

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PRIORITY RECOMMENDATIONS The HAP is a bold new approach to shaping our community’s housing future. It envisions an integrated approach where multiple policy tools1 and programs are aligned to work together to achieve the stated Vision. To achieve this outcome, several essential changes need to happen concurrently to shift the course of housing in our community during this Housing Cycle. Over the course of thirty community meetings and workshops held to discuss housing issues, many of the comments and suggestions put forth focused on a handful of recommendations with the greatest likelihood to create positive impact across multiple Objectives . These are termed Priority Recommendations. Without fulfillment of these Priority Recommendations the Vision cannot be achieved. The following Priority Recommendations have been defined as essential to supporting the Objectives of the HAP.

PR-1 UPDATE GROWTH MANAGEMENT POLICIES AND PROCEDURES

Update Growth Management Ordinance Policies and Procedures Healdsburg, like many communities throughout Sonoma County, has a shortage of housing working families can afford. People who work in our community have said they are struggling to find housing that is affordable in Healdsburg. Over a two year period from 2015 to 2016, the City actively engaged residents through a series of public meetings and workshops, seeking the community’s ideas and input on how best to address these housing challenges. The City also commissioned an independent public opinion survey to obtain feedback on possible housing policy solutions. Through this extended public outreach, the community has expressed interest in expanding housing options that are affordable to working families and updating the current Growth Management Ordinance. Measure R, which was crafted to provide greater flexibility in the Growth Management Ordinance, was not passed by voters in November 2016, so the existing program remains in effect. Updating Growth Management Policies and Procedures to reflect changing economic conditions and community needs will help meet the needs of Healdsburg residents at all income levels. 1 Inclusionary Housing Ordinance, Land Use Code, Impact Fee Schedule, Parking Regulations and Design Guidelines

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Why this is a Priority Recommendation The Growth Management Ordinance enacted by voters in November 2000 restricts new housing units to 30 units per year, hindering production of Multi-Family housing types the community has said it would like to see. Updating the current Growth Management Ordinance Policies and Procedures will help provide the kinds of housing the community has expressed a need for. The Growth Management Policies and Procedures, adopted by Council resolution, set forth the process for issuing dwelling unit allocations in accordance with the Growth Management Ordinance. Revision of the policies and procedures will allow better alignment with housing objectives.

Identify Funding Sources for Affordable Housing Success at increasing the supply of deed-restricted Affordable Housing in Healdsburg hinges upon the identification of secure, local, long-term funding sources. While Healdsburg voters passed Measure S in November 2016, the City will need to seek additional funding sources to support the provision of deed-restricted Affordable Housing and to meet the City’s housing objectives. Measure S is a 2% increase in the City's Transient Occupancy Tax or TOT, which is dedicated to affordable housing services and program

PR-2 Identify Funding Sources for Affordable Housing

Why this is a Priority Recommendation Throughout the process of creating the HAP, the difficulty in funding the construction of deedrestricted Affordable Housing became a recurring theme, especially with the loss of Redevelopment Agency funding. Those involved in Affordable Housing, using non-profit development models, have advised that having a substantial and ready source of Local funds to pair with Federal and State programs is essential to closing the gap for new Affordable Housing units2

Incorporate the Definition of Middle Income Housing in the Land Use Code and other policy documents Much of the time spent developing the HAP has been devoted to determining who needs housing in our community. After considerable research, a class of housing beyond State of California defined Affordable Housing was identified, and termed Middle Income Housing (MIH). This term is emerging in other communities and typically relates to households whose earnings exceed the income limits of State-defined Affordable Housing, but are still below the income required to finance a median priced home. In Healdsburg this is an income level between 121160% of Area Median Income (AMI).

5

PR-3 Incorporate the Definition of Middle Income Housing in the Land Use Code and other policy documents

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Why this is a Priority Recommendation The City’s Land Use Code establishes the legal groundwork for Affordable Housing – its definitions and how it relates to the Inclusionary Housing Ordinance (see PR-4). By defining Middle Income Housing in city policy documents i new avenues are made available to incentivize or require this kind of housing to be constructed.

PR-4 REVISE THE INCLUSIONARY HOUSING ORDINANCE TO OPTIMIZE AFFORDABLE HOUSING PRODUCTION

Revise the Inclusionary Housing Ordinance (IHO) to Optimize Affordable Housing Production The IHO creates a linkage between for-sale, market rate housing and Affordable Housing, requiring builders who construct market rate housing to also build some percentage of deed-restricted Affordable Housing. This tool has been used successfully here in Healdsburg - most recently in two of the City's newest residential developments - Sorrento Square and Chiquita Grove, providing the community with ten new long term affordable residences. Revising the IHO shall focus on optimizing affordable unit production while balancing economic realities of creating market rate residential and commercial projects. Why this is a Priority Recommendation Revising the IHO will deliver new stock of long term Affordable Housing, at no cost to the community, while also creating more diverse and integrated neighborhoods.

PR-5 EXPAND AFFORDABLE HOUSING INCENTIVES

6

Expand Affordable Housing Incentives With an increase of the Inclusionary Housing requirement new incentives can help builders to think creatively about product mix and density. Affordable Housing incentives, which already exist within State Code, permit builders to receive a density bonus for increasing the amount of Affordable Housing developed within a project. Additional incentives such as concessions on parking are already included in State and City Codes, and would be amplified and integrated further as a part of this Recommendation.

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Why this is a Priority Recommendation This Recommendation simply requires clarifying and aligning existing incentives that are already 'on the books' to provide the City Council more discretion on how incentives can be applied, in return for greater commitment of Affordable Housing. This Recommendation is part of a threelegged stool that creates new incentives to achieve the HAP's stated Objectives.

Evaluate Revision of the Impact Fee Schedule to Scale with Unit Size. Explore a Fee Deferral or reduction Program for ADUs. Smaller residential units are gaining popularity as household size and needs change. Throughout California, a logical way to create housing that is more ‘Affordable-by-Design’ is by building smaller units that make better use of limited land resources, while also reducing overall environmental footprint. This is particularly true with Accessory Dwelling Units (ADUs) which provide a double benefit of allowing growth to occur more organically, while also reducing the public burden and cost of building new housing. In December 2016, the City revised its ADU Ordinance to remove barriers to encourage their construction.

PR-6 EVALUATE REVISION OF IMPACT FEE SCHEDULE

Given the cost of Impact Fees, the Healdsburg City Council reduced fees for ADUs in February 2017. Further exploration of fees for ADUs should include assessment of fee deferral or reduction and include study of options such as deed restrictions. Other communities in California have found that scaling fees to the size of the unit has been a very effective way to reduce the size of units being built and in turn create new housing that is less expensive to rent or own. Why this is a Priority Recommendation Currently, there is little difference in impact fees between a 5,000 SF home and an 1,000 SF cottage. Updating the fee schedule to account for unit size will encourage builders to look to smaller units when designing new homes and a fee deferral will encourage homeowners to develop ADUs.

Update Parking Regulations to Scale Requirements to Location and Unit Size In past decades, automobile focused planning led to parking standards that reflected the dominance of automobile based transportation. But today transportation modes are rapidly changing - many young adults do not have driver's licenses, car share services have become ubiquitous, autonomous vehicles are only a decade away, and the arrival of the SMART Train in Sonoma County. 7

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PR-7 UPDATE PARKING REGULATIONS

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At the same time that we are concerned about the cost of housing, parking requirements created in another era add a significant cost burden to housing, while inefficiently using precious land that could better serve housing. Why this is a Priority Recommendation Currently a 5,000 SF residence has the same parking requirement as a 500 SF studio, making the cost of the studio - both in terms of construction and land difficult. Achieving a better use of our remaining land, while helping to reach more balanced costs for constructing new housing, requires parking be made a part of the immediate review process.

PR-8 UPDATE RESIDENTIAL DESIGN GUIDELINES

Update Residential Design Guidelines to Address Community Concerns for Scale and Character of New Housing To ensure the character, form and scale of our community is maintained, while meeting affordable housing needs, the City's Residential Design Guidelines need to be updated. Doing so will ensure new housing respects and reflects the unique form and relationship many of our historic homes have with the street and their neighboring residences. An update to our current Residential Design Guidelines will help new housing better reflect what is important to the look and livability of our community, while also incorporating new changes that are taking place in green building, as well as healthy and active design.

Why this is a Priority Recommendation The quality and character of Healdsburg's built environment forms the unique neighborhood feel of the City. Updating the Residential Design Guidelines will ensure this is maintained as the community evolves.

2Local

subsidy requirements can range from $50,000-$200,000 per unit, depending on product type, funding source and land ownership. Due to construction costs and small project sizes in Healdsburg, the upper end of this range is typical

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PRIORITY RECOMMENDATION OUTCOMES If the Priority Recommendations are implemented according to the HAP, Healdsburg will realize the following tangible changes to housing policy:

• •

Revised Growth Management Policies and Procedures that promote diverse housing types and meet needs of residents at all income levels A new Inclusionary Housing Ordinance requiring more private sector building of Affordable Housing Units



Alternative sources of funding for Affordable Housing to support construction of deed-restricted Affordable Housing Units



Revised Impact Fee Schedule that will encourage smaller, more efficient housing units



Updated Parking Standards that better reflect changing needs and modes of transportation



New Residential Design Guidelines to guide the design of all new housing in Healdsburg

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Section

2

OBJECTIVES AND SUPPORTING RECOMMENDATIONS

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OBJECTIVES and SUPPORTING RECOMMENDATIONS ROLE OF THE OBJECTIVES

The HAP is founded upon clear and measurable Objectives (see adjoining page) for creating more housing in our community. These Objectives were developed in support of the HAP Vision, through extensive discussion and community input, with the goal of achieving more affordable and diverse housing options in our community. Setting clear Objectives allows the City’s leadership to better direct City resources to accomplish what the community has said is important. For each Objective, a measurable Target has been established as a way to focus resources and community efforts, while also establishing a measurement for success. The Targets define how we want the community to build out over time, in a way that is consistent with and supports the larger vision of the General Plan. The Targets do not propose growth beyond what is planned for in the General Plan, but instead they serve to define the kinds of growth - by housing type - the Community has said it wants to see. It is important to note that the Targets are not mutually exclusive - one project might achieve 2-3 of the HAP Objectives and concurrently fulfill several Targets. This approach reflects the concept of 'stacking benefits' and will encourage builders to design and plan projects that meet as many of the HAP Objectives as possible, as a way to gain support. Achieving the Objectives and their associated Targets will require changes to current programs, ordinance revisions, and modifications to how new housing is reviewed. These changes are captured in the Priority Recommendations and where appropriate, the Supporting Recommendations.

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ew Units

HAP OBJECTIVES 2017-2022

The Vision for the HAP sets a long term goal to be achieved by a more deliberate approach to managing residential growth in our community. The way we reach the Vision is by achieving the five stated Objectives, which form the foundation of the HAP. The five Objectives of the HAP are summarized below, and described in more detail in the following pages. Objective 1.0

Increase the quantity and quality of deed-restricted Affordable Housing, at all levels, from Extremely Low to Moderate Income categories. 2022 TARGET = 200 Units Objective 2.0

Encourage and facilitate private development of secondary dwelling units (SDUs) in order to more efficiently use existing infrastructure, create opportunities for seniors to 'age in place' and provide housing that is 'affordable-by-design'. 2022 TARGET = 125 Units Objective 3.0

Develop Middle Income Housing across a range of product types including multi-family and single family homes, for rent or for sale, designed for a range of households including families, individuals and seniors. 2022 TARGET = 135 Units Objective 4.0

Encourage appropriately scaled multi-family rental units averaging less than 850 square feet. 2022 TARGET = 100 Units Objective 5.0

Encourage development of mixed product types that represent creative density housing types including but not limited to multi-family, small lot, cottage court, and cohousing. 2022 TARGET = 50% of all New Units

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OBJECTIVE 1.0

INCREASE THE QUANTITY AND QUALITY OF DEED-RESTRICTED AFFORDABLE HOUSING, at all levels, from Extremely Low to Moderate Income categories Healdsburg's Foss Creek Court Affordable Housing with 64 rental units, built in 2009

HAP TARGET

200 new units

built or in process by 2022 by public and private partners

BACKGROUND

Healdsburg currently has 402 deed-restricted Affordable Housing units in its total housing stock, representing 8.2% of all housing units. Among cities in the county, Healdsburg falls in the middle in the provision of Affordable Housing3. With input from the community, the Community Housing Committee has identified a target of increasing the number of affordable units by approximately 50% over the next six years, increasing the total stock to approximately 12%.

HOW THIS WOULD WORK

Development of three publicly owned sites is conservatively anticipated to yield approximately 125 of the 200 new Affordable Housing units desired. The most active project is Healdsburg Glen, located at 1201 Grove Street which is under construction in fall 2017 and will provide 24 new rental units for households with incomes in the Very Low and Low Income brackets, plus one manager's unit and the 37 units of affordable rental housing that is currently under construction on Grove Street. . Additional sites include 3.5 acres at 155 Dry Creek Road and a 14 acre site dedicated as part of the Development Agreement for Saggio Hills. In addition, the City recently purchased eight multi-family units at 721 Center Street for

affordable housing purposes.

Rendering of new Affordable Housing project proposed for 1201 Grove Street

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The remainder of the affordable units will come from units constructed by for-profit and non-profit developers on privately owned sites throughout the City. Upon adoption of a revised Inclusionary Housing Ordinance, new projects will provide additional, long term Affordable Housing

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The following Priority and Supporting Recommendations support achievement of Objective 1.0: PR -1

Update the Current Growth Management Ordinance Policies and Procedures

PR-2

Identify funding sources for Affordable Housing

PR-3

Incorporate the definition of Housing in the Land Use Code and other policy documents

PR-4

Revise the Inclusionary Housing Ordinance to optimize Affordable Housing production

PR-5

Expand Affordable Housing Incentives

PR-6

Evaluate revision of the Impact Fee Schedule to scale with unit size. Explore a fee deferral program for Deed- Restricted Accessory Dwelling Units

PR-7

Update Parking Regulations to scale requirements to location and unit size

SR-1.1

Implement Local Preference clauses on all new Affordable Housing units to serve local residents and employees first

SR-1.2

Partner with third party non-profit developers experienced in leveraging local funds and tax credits to create new housing at scale

SR-1.3

Mix income levels within individual housing developments (to the extent funding sources allow)

SR-1.4

Identify and prioritize acquisition/or partnering for Affordable Housing on vacant or underutilized sites within 1/2 mile of transit stops and daily goods and services

SR-1.5

Work with developers of sites in prime locations to increase the Affordable Housing component utilizing incentives and funding support

SR-3.3

Explore preparation of a nexus-based impact fee study and Housing Impact Fee Ordinance to require rental housing to contribute to Affordable Housing

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PRIORITY RECOMMENDATIONS FOR OBJECTIVE 1.0

SUPPORTING RECOMMENDATIONS FOR OBJECTIVE 1.0

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Illustration of different ways ADUs can be accommodated on a single lot

HAP TARGET

OBJECTIVE 2.0 ENCOURAGE AND FACILITATE PRIVATE DEVELOPMENT OF ACCESSORY DWELLING UNITS (ADUs) in order to more efficiently use existing infrastructure, create opportunities for seniors to 'age in place' and provide housing that is 'affordable-by-design'

125 new ADUs

built or in process by 2022, by private owners BACKGROUND

HOW THIS WOULD WORK

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Healdsburg has a successful pattern of Accessory Dwelling Units throughout its neighborhoods, particularly in the older areas of town. Since 2000, 54 SDUs have been constructed in the City, or approximately 3 per year. The role of ADUs in increasing the supply of smaller, more affordable housing units that are compatible with existing primary structures and neighborhoods has been a central theme of community discussions during preparation of the HAP. With input from the community, the Community Housing Committee has identified a target of increasing the number of ADUs by approximately 125 new units over the next six years. Recognizing ADUs as an organic and low cost way to increase a community’s stock of housing that is either more affordable-bydesign or deed-restricted affordable and in. response to changes in state law, the City revised its ADU Ordinance in December 2016 to remove barriers to their construction. In February 2017, the City reduced impact fees for accessory dwelling units. By conducting a subsequent review of the ADU Ordinance, potential revisions can be assessed as to their effectiveness in encouraging development of additional ADUs.

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Tools to increase construction of SDUs ADUs can include removing barriers such as onerous parking requirements, reducing setback requirements from property lines, increasing maximum building size to create larger units and reducing, deferring or waiving impact fees. Across the State a number of progressive communities have advanced programs to encourage, incentivize and facilitate the rapid expansion of their community’s ADU stock including Santa Cruz, Piedmont, Napa and others

The following Priority and Supporting Recommendations support achievement of Objective 2.0: PR-7

Evaluate revision of the Impact Fee Schedule to scale with unit size. Explore a fee deferral program for DeedRestricted Accessory Dwelling Units

PR-8

Update Parking Regulations to scale requirements to location and unit size

PR-9

Update Residential Design Guidelines to address community concerns for scale and character of new housing

SR-2.1

Review successful ADU programs for lessons learned, evaluate existing Healdsburg ADU regulations, and adopt revisions needed to accelerate construction of additional units

SR-2.2

Inventory existing ADUs within City limits to confirm total number and location

SR-2.3

Create homeowner education tools that explain what ADUs are, relative costs, design factors and potential financing techniques

SR-2.4

Pursue funding sources for ADU program

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PRIORITY RECOMMENDATIONS FOR OBJECTIVE 2.0

SUPPORTING RECOMMENDATIONS FOR OBJECTIVE 2.0

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OBJECTIVE 3.0

Sonata, developed in 2014, provided a range of housing for local families, with six homes deed- restricted and affordable to working

HAP TARGET

DEVELOP MIDDLE INCOME HOUSING ACROSS A RANGE OF PRODUCT TYPES including multi-family and single family homes, for rent or for sale, designed for a range of households including families, individuals and seniors

135 new units

built or in process by 2022, by public and private partners

BACKGROUND

HOW THIS WOULD WORK

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The City’s adopted Housing Element indicates that approximately 56% of all households in the City earn an annual income of 81% of AMI and greater. The Housing Needs Assessment prepared for the City in October, 2015 confirmed the need for housing in our community that is affordable to working families making between 121-160% of the AMI. Families making annual incomes between 121- 160% AMI are unable to qualify for State-defined Affordable Housing and yet may not make enough money to purchase a market rate home in Healdsburg. The need to develop housing affordable to Middle Income, working families, has been a central theme of community discussions during preparation of the HAP. Adding a new Middle Income tier should be considered in the revision to the City’s Inclusionary Housing Ordinance. By revising the definition of Affordable Housing in the City's Land Use Code and other policy documents to include a new category for Middle Income Housing, the City and private builders will be able to deliver a new type of housing, whose prices (for sale or rental) meet defined criteria for those who are Middle Income.

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The following Priority and Supporting Recommendations support achievement of Objective 3.0: PR-1

Update the Current Growth Management Ordinance Policies and Procedures

PR-2

Identify funding sources for Affordable Housing

PR-3

Incorporate the definition of Middle Income Housing in the Land Use Code and other policy documents

PR-4

Revise the Inclusionary Housing Ordinance to optimize Affordable Housing production

PR-5

Expand Affordable Housing Incentives

PR-6

Evaluate revision of the Impact Fee Schedule to scale with unit size. Explore a fee deferral program for Accessory Dwelling Units

PR-7

Update Parking Regulations to scale requirements to location and unit size

SR-1.1

Implement local preference clauses on all new Affordable Housing units to serve local residents and employees first

SR-3.1

Require housing units built through the Inclusionary Housing Ordinance to include a component of units deed-restricted to families making between 121-160% AMI

SR-3.2

Explore use of tools such as prioritized local buyer/ renter offerings for non-deed restricted units

SR-3.3

Explore preparation of a nexus-based impact fee study and Housing Impact Fee Ordinance to require rental housing to contribute to Affordable Housing

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PRIORITY RECOMMENDATIONS FOR OBJECTIVE 3.0

SUPPORTING RECOMMENDATIONS FOR OBJECTIVE 3.0

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OBJECTIVE 4.0

ENCOURAGE APPROPRIATELY SCALED MULTI-FAMILY RENTAL UNITS averaging less than 850 square feet

A trend toward smaller living is more resource efficient and more affordable

HAP TARGET

100 new units

built or in process by 2022, in at least four developments

BACKGROUND

Currently, Healdsburg’s stock of market rate rental apartments is low relative to what is typically found in other communities. Deducting deed-restricted affordable units from the total of multi-family units in buildings of 5 units or more, there are approximately 156 market-rate apartments available in the City. However, multi-family housing is more cost effective to build due to its efficient use of land and economies of scale in construction – yielding housing units that are typically more ‘affordable-by-design’. Since the passage of the City’s Growth Management Ordinance in 2000, development of new, market rate rental apartments in buildings of 5 units or more has become virtually infeasible - due to the lack of certainty in the availability of permit allocations needed for financing and construction. At the same time, demographic changes including aging baby boomers and young millennials looking to rent rather than own, have led to a significant supply and demand imbalance in Healdsburg – resulting in rapidly escalating rental prices for the few units that are available. Changing this dynamic will require a strong emphasis on creating new rental apartment units during this Housing Cycle.

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By stating a clear intention to have more multi-family units in our community, and revising the Growth Management Ordinance Policies and Procedures, new units can be created to meet this community need. Building on the success of other communities that have revised their impact fees to more proportionally charge by size of unit, an updated fee schedule will incentivize developers to select smaller unit designs that have lower impact on the community, cost less in fees and result in a better match with community needs.

HOW THIS WOULD WORK

The following Priority and Supporting Recommendations support achievement of Objective 4.0: PR-1

Update the Current Growth Management Ordinance Policies and Procedures

PR-6

Expand Affordable Housing Incentives

PR-7

Evaluate revision of the Impact Fee Schedule to scale with unit size. Explore a fee deferral program for Accessory Dwelling Units

PR-8

Update Parking Regulations to scale requirements to location and unit size

PR-9

Update Residential Design Guidelines to address community concerns for scale and character of new housing

SR-3.2

Explore use of tools such as prioritized local buyer/ renter offerings for non-deed restricted units

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PRIORITY RECOMMENDATIONS FOR OBJECTIVE 4.0

SUPPORTING RECOMMENDATIONS FOR OBJECTIVE 4.0

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OBJECTIVE 5.0

Cottage courts are a highly desired product type in Healdsburg that use land more efficiently and provide a creative approach to density

HAP TARGET

ENCOURAGE DEVELOPMENT OF MIXED PRODUCT TYPES THAT REPRESENT CREATIVE DENSITY HOUSING TYPES including but not limited to multi-family, small lot, cottage court, and co-housing

50% of all new units

built reflect some product type other than conventional single family detached homes

BACKGROUND

The City’s adopted Housing Element indicates that approximately 81% of the City’s current housing stock is comprised of Single Family Detached units; a number that is out of balance with what is typically found in other communities. Single family detached homes are generally a very low density form of development that inefficiently utilize limited land resources and reduce community sustainability. Encouraging and incentivizing mixed product types can help shift the types of products being built in our community, while increasing long term sustainability and more efficient use of our remaining resources.

HOW THIS WOULD WORK

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Revisions to the Inclusionary Housing Ordinance will include review of how to ensure a mix of housing types in new development projects. Additionally, clear statements that the community wants to see mixed density and alternative housing types - will encourage builders to look for sites and projects that can attain community goals.

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The following Priority and Supporting Recommendations support achievement of Objective 5.0: PR-1

Update the Current Growth Management Ordinance Policies and Procedures

PR-3

Expand the definition of Middle Income Housing in the Land Use Code and other policy documents

PR-4

Revise the Inclusionary Housing Ordinance to optimize Affordable Housing production

PR-6

Evaluate revision of the Impact Fee Schedule to scale with unit size. Explore a fee deferral program for Accessory Dwelling Units

PR-7

Update Parking Regulations to scale requirements to location and unit size

PR-8

Update Residential Design Guidelines to address community concerns for scale and character of new housing

SR-5.1

Create incentives that will encourage development of alternative product types consistent with community need and interest

SR-5.2

Explore modifications to the Land Use Code to encourage alternative product types

SR-5.3

Develop Design Guidelines that support and encourage alternatives housing types and mixed density as envisioned by the General Plan.

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PRIORITY RECOMMENDATIONS FOR OBJECTIVE 5.0

SUPPORTING RECOMMENDATIONS FOR OBJECTIVE 5.0

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PRIORITY RECOMMENDATIONS PR-1

Update the Growth Management Policies and Procedures

PR-2

Identify funding Sources for Affordable Housing

PR-3

Incorporate the definition of Middle Income Housing in the Land Use Code and other policy documents

PR-4

Revise the Inclusionary Housing Ordinance to optimize Affordable Housing

PR-5

Expand Affordable Housing Incentives

PR-6

Evaluate revisions of the Impact Fee Schedule to scale with unit size. Explore a fee deferral program for Accessory Dwelling Units

PR-7

Update parking regulations to scale requirements to location and unit size

PR-8

Update residential Design Guidelines to address community concerns for scale and character of new housing

SUPPORTING RECOMMENDATIONS SR-1.1

Implement local preference clauses on all new Affordable Housing units to serve local residents and employees first

SR-1.2

Partner with third party non-profit developers experienced in leveraging local funds and tax credits to create new housing at scale

SR-1.3

Mix income levels within individual housing developments (to the extent funding sources allow)

SR-1.4

Identify and prioritize acquisition/or partnering for Affordable Housing on vacant or underutilized sites within 1/2 mile of transit stops and daily goods and services

SR-1.5

Work with developers of sites in prime locations to increase the Affordable Housing component utilizing incentives and funding support

SR-2.1

Review successful ADU programs for lessons learned, evaluate existing Healdsburg ADU regulations, and adopt revisions needed to accelerate construction of additional units

SR-2.2

Inventory existing ADUs within City limits to confirm total number and location

SR-2.3

Create homeowner education tools that explain what ADUs are, relative costs, design factors and potential financing techniques

SR-2.4

Pursue funding sources for SDU program

SR-3.1

Require housing units built through the Inclusionary Housing Ordinance to include a component of units deed-restricted 121-160% Area Median Income

SR-3.2

Explore use of tools such as prioritized local buyer/renter offerings for non-deed restricted units

SR-3.3

Explore preparation of a nexus-based impact fee study and Housing Impact Fee Ordinance to require rental housing to contribute to Affordable Housing

SR-5.1

Create incentives that will encourage development of alternative product types consistent with community need and interest

SR-5.2

Explore modifications to the Land Use Code to encourage alternative product type

to families making between

Attachment: Housing Action Plan - Final (1768 : Community Housing Committee Work Plan Update and Adoption of Revised Housing Action

Objective 1.0

RECOMMENDATION

Create More Affordable Housing

Table 1: SUMMARY OF RECOMMENDATIONS AND RESPONSIBILIITES FOR IMPLEMENTATION

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Measure of Progress

City Council adopted resolution revising GM Policies & Procedures Ballot Measure approved by electorate to expand TOT for AH City Council Adopted Ordinance to revise the Land Use Code and other policy documents City Council Adopted Ordinance to revise the Land Use Code City Council Adopted Ordinance to revise the Land Use Code City Council Adopted Revised Fee Schedule City Council Adopted Ordinance to revise the Land Use Code City Council Adopted Design Guidelines

Related Policies and Initiatives

SP= Strategic Plan GP=General Plan HEU= Housing Element

Target Date

Responsibility

Lead

Support

GP Principle 28 HEU Policy HB-2 HEU Program H-6

Winter/Spring 2018

City Manager

Hsng+ED

SP-Goal 1.3 GP Principle 2E

Nov 2016

City Manager

Hsng+ED

GP Principle 2E HEU HC-8

Fall 2018

Hsng+ED

City Manager Planning

Summer/Fall 2018

Hsng+ED

City Manager Planning

Fall/Winter 2018

Hsng+ED

City Manager Planning

Fall/Winter 2018

Public Works

City Manager

HEU Policy HB-5

Spring 2018

Planning

Hsng+ED

GP-Principle 1E GP- Principle 6A HEU-HB-4

Spring 2018

Planning

Hsng+ED

Summer 2018

Hsng+ED

Planning

SP-Goal 1.3 GP Principle 2C HEU HC-5 SP Goal-1.3 HEU Policy HC-3 HEU Policy HC-7 HEU Policy HC-6 HEU Program H-14

Language and technique defined, implemented through a revised IHO 3 projects in design or built by end of cycle

HEU Policy HC-2 Program H-7

Ongoing

Hsng+ED

Planning

2 projects in planning or built by end of cycle

HEU Policy H-C-3 HA-7

Ongoing

Planning

Hsng+ED

HEU-HA-4

Ongoing

Hsng+ED

City Manager

HEU-HA-5

Ongoing

Hsng+ED

City Manager Planning

HEU-HC-11 HEU-Program H-14

Summer 2018

Planning

Hsng+ED

HEU-Program H-15

Summer 2018

Planning

Hsng+ED

HEU – HC – 11

Summer 2018

Planning

Hsng+ED

HEU-Program H-14

Ongoing

Planning

Hsng+ED

25 privately built units (approved or built) for MIH by mid-cycle

HEU-HA-5

Ongoing

Hsng+ED

City Manager

Clause perfected and included as Condition of Approval in projects

HEU-HA-5

Summer 2018

Hsng+ED

City Manager

HEU-HA-4

Fall/Winter 2018

Hsng+ED

Planning

HEU-HA-2 HEU-HA-4, HA-5

Ongoing

Hsng+ED

City Manager Planning

HEU-HC-11

Fall/Winter 2018

Planning

Hsng+ED

Additional layer on Residential Development Opportunities Map highlighting key sites that meet criteria 2 projects in planning or built by end of cycle Revisions to Land Use Code complete Create table and map of all existing ADUs Informational brochures and webpage dedicated to ADUs Receive at least 1 grant by mid-cycle

City Council Adopted Fee and Ordinance 2 Mixed product type projects in planning or built by end of cycle Revisions to Land Use Code complete

Attachment: Housing Action Plan - Final (1768 : Community Housing Committee Work Plan Update and Adoption of Revised Housing Action

Encourage Mixed Product Types and Creative Density

Objective 5.0

Encourage Rental Housing Development

Objective 4.0

Build Middle Income Housing

Objective 3.0

Objective 2.0

Facilitate development of ADUs

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Section

3

IMPLEMENTING AND UPDATING THE HAP

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IMPLEMENTING THE HAP ORGANIZING RESOURCES FOR IMPLEMENTATION OF THE HAP

The HAP sets the course and character of housing in our community, focusing on two primary themes - increasing the affordability and diversity of housing in Healdsburg. Achieving these two outcomes will require contributions from both the public and private sectors, creatively organized and efficiently deployed. While funding will come from a variety of sources, they can be organized into two primary categories: Public Contributions: Under this approach, the City provides public investment and leadership in the actual construction of Affordable Housing – in partnership with a third party builder. This requires direct financial and human resources from the City to achieve the outcome, and can come in the form of land (as in the case of the Affordable Housing project at 1201 Grove Street), direct subsidy of dollars (such as in the Affordable Housing units at Foss Creek Apartments), or other means. The direct subsidy is crucial to close the gap between the cost of construction and what can be financed with Federal and State funds as well as conventional financing4. Private Contributions: Under this approach, privately financed residential projects are shaped through clearly stated City policies and objectives that reflect the values of the community. This approach requires little to no public subsidy or investment, instead relying on constructive partnerships with residents and builders, working together to achieve what the community has said they want. This is a model that is used successfully in many communities around the country, and simply requires clarity of goals, committed leadership and staff who communicate our values to builders, and then rigorous oversight to ensure what is promised is delivered.

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THE IMPORTANCE OF A DUAL APPROACH

These approaches are NOT mutually exclusive, and in fact achieving the Objectives of the HAP will require an energetic and active effort that embraces both approaches concurrently. To rely on public or private contributions alone will diminish our ability to achieve the HAP Objectives, requiring either an unachievable level of public subsidy or an over reliance on the private sector.

Private contributions will be encouraged by many of the Recommendations in the HAP including PR-5 (Expand Affordable Housing Incentives), PR-6 (Evaluate revisions to the Impact Fee Schedule), PR-7 (Update the City’s Parking Regulation) and PR-8 (Update the City’s Residential Design Guidelines). These are all important to the HAP Objectives, because they remove barriers that increase the cost of developing the type of housing the community has said it wants to see (as in the case of PR-6, PR-7 and PR-8) or they incentivize builders to meet our desired housing outcomes by rewarding projects that demonstrate consistency with the HAP’s Objectives (as in the case of PR-5). FUNDING AND THE HAP OBJECTIVES

Public contributions are more challenging in an era of diminishing public funding, particularly in light of the loss of Redevelopment Agency funding. HAP Priority Recommendation 2 (Identify Funding Sources for Affordable Housing) is a direct response to this challenge and is essential to fulfilling many of the HAP Objectives to expand Affordable Housing including construction, programs and services. Having a substantial and ready source of local funds is critical to leveraging Federal and State dollars needed to finance Affordable Housing. At the start of the current Housing Cycle, the City has approximately $3.1 million available to support Affordable Housing construction, programs and services.

4 Local subsidies can range from $50,000-$200,000 per affordable unit, depending on housing type and the number of units to be constructed (with a larger number of units being more cost efficient to build)

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Table 2 : EXAMPLE IMPLEMENTATION ROLES BY OBJECTIVE Objective Objective 1.0 Increase the Quantity and Quality of Deed-Restricted Affordable Housing

Objective 2.0 Encourage and Facilitate Private Development of ADUs

Objective 3.0 Develop Middle Income Housing Across a Range of Product Types

Public Roles

Private Roles

Revise the Inclusionary Housing Requirement to require construction of new Affordable Housing units in conjunction with Market Rate units (PR-4, PR-5, PR-6)

Approve 2% TOT increase to create a long term funding source (complete); pay Inclusionary Housing Fees (PR-3, PR-5, PR-6)

Explore fee deferral program for ADUs, create homeowner education tools on how to fund and build ADUs (PR-6, SR-2.3)

Construct ADUs under the fee deferral program (PR-6, SR-2.3, )

Consider adding Middle Income Housing to the IHO requirement, provide incentives for projects that provide mixed products and incomes (PR- 3, PR-5, SR-3.1)

Objective 4.0 Encourage Appropriately Scaled Multi-Family Rental Units

Revise regulatory barriers to multi-family units (, PR-6, PR-7)

Objective 5.0 Encourage Development of Mixed Product Types that Represent Creative Density

Provide incentives for projects that provide mixed products and incomes (PR-5, SR-5.1, SR-5.2)

30

Exceed minimum affordable housing requirements (SR-1.5), and/ or encourage development of multiple product types (SR-5.1), and receive varied incentives (density bonus, parking concessions, prioritized allocations, etc.) (PR-5, SR5.2)

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CREATING A LONG TERM FUNDING SOURCE FOR AFFORDABLE HOUSING

Without a reliable and long-term funding source, the City’s ability to meet the HAP Objectives will be hampered. On June 20, 2016 the City Council took action to place an initiative on the November, 2016 ballot to increase the City’s existing Transient Occupancy Tax (TOT or Bed Tax) by 2% as a special tax dedicated to the provision of Affordable Housing construction, programs and services. Measure S was approved in November, 2016. These funds will be allocated to Affordable Housing programs and services such as land acquisition, land donation, building acquisition, building rehabilitation, housing construction, maintaining the community’s supply of mobile homes, providing housing subsidies to lower income residents, providing financing for Affordable Housing5 (which might include deed-restricted ADUs) preserving existing public subsidies for affordable units facing conversion to market rates, providing emergency homeless shelters, transitional housing services and similar programs. The 2% increase to the TOT is estimated to generate $530,123 in revenue for fiscal year 2016-17 and $546,012 in revenue for fiscal year 2017-18 for Affordable Housing construction, programs and services. These estimates are conservative in nature as they do not account for lodging establishments that are currently in process and anticipated to come on-line in upcoming years.

5 Once the proposed amendment to the Land Use Code to expand the definition of Affordable Housing is adopted (PR-3) the programs and funding described above would be available to all qualified families in the City earning up to 160% of AMI

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UPDATING THE HAP AN INTENTIONAL APPROACH TO REVIEW AND REFLECT ON PROGRESS

The HAP is constructed around a Housing Cycle that is adaptable over time and provides a logical and foreseeable window in which to organize, direct and then measure the results of the proposed housing Recommendations. The management, measurement, review and refinement of the HAP requires a process that is logical and intentional, with a long-term view. Reviewing, assessing and reporting progress on the HAP will occur in two primary ways: · ·

COMMUNITY INDICATORS Increased number of younger households in our community (Median age currently 40.2) Increased percentage of deed restricted Affordable Housing as a percentage of total housing stock (currently 8.2%) Increased percentage of non single family residential unit types (currently 17%)

City Council updates provided every six months, and A HAP Report Card, completed every two years, and prior to the end of the Housing Cycle in preparation for development of the next HAP and Housing Element Update.

The sequence, frequency and relationship of these reviews is portrayed in Figure 1: HAP Review Timeline. During the first two years of the HAP implementation, the discussion and review of the HAP’s effectiveness will focus on how the Recommendations are working and what is being learned - reflecting a more qualitative discussion. In later years a more quantitative review can be undertaken and reflected in the HAP Report Card (see Page 35). As the first Housing Cycle comes to a close, attainment of the established Targets will be a primary focus, along with a broader review of the Community Indicators which were defined early in the process to assess how well housing actions are shaping the broader character and make up of our community (see sidebar).

Increased ratio of people who live AND work in town (currently 33%) Increase in public and private school populations (currently 1,650 K-12)

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Figure 1: HAP Review Timeline outlines the general procedures and timing that Staff will follow to assess progress of the HAP and the timing of recommended refinements to programs or policies in order to achieve our Objectives. July

2016

November

January

YEAR 1

YEAR 2

YEAR 5

2018

Review Progress, Provide City Council Update

Review Progress, Provide City Council Update

2019

First HAP Report Card, Provide CHC and City Council Update

Review Progress, Provide City Council Update

2020

Review Progress, Provide City Council Update

Review Progress, Provide City Council Update

July

January

Begin HAP Implementation

Revise and adopt HAP to reflect no change to GMO

July

January

YEAR 4

2017

July

January

YEAR 3

Public Vote on GMO Update and TOT Increase

July

January

Council HAP Adoption

2021

Second HAP Record Card, Provide CHC and City Council Update

Review Progress, Provide City Council Update

July

January

2022

Review Progress, Initiate process for Housing Element Update and Housing Action Plan Development

January

2023

Final HAP Report Card for Current Cycle. Fold lessons learned into 2023-2031 Housing Element Update and Housing Action Plan.

YEAR 6

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MEASURING PROGRESS

The semi-annual City Council updates will provide a review of progress to date on achieving the Objectives and Targets of the HAP including what has been learned and what is working well. The update is envisioned to include progress on each Objective including information on the response of non-profit and for- profit builders to the Objectives – including the challenges or opportunities they have encountered – as appropriate. A summary table of projects in process and how they align with stated Targets may also be provided. Content of the update will be adjusted by Staff as appropriate to reflect the progress completed. The HAP Report Card will provide a quantitative and qualitative assessment of progress on the HAP – its Objectives and Targets. It is envisioned that where clear patterns are emerging – either positive or negative - Staff will make recommendations or request guidance from the CHC and City Council on how the HAP might be modified to help attain stated Objectives by the end of the Housing Cycle. Content of the Report Card will be adjusted by Staff as appropriate to reflect the progress completed

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Figure 2: EXAMPLE HOUSING ACTION PLAN REPORT CARD

Objective

A

B

C

D

D-(A+B+C)

Residential Units in Discussion

Residential Units Approved1

Residential Units Constructed2

2022 TARGET3

Surplus (Deficit)

Objective 1.0 Increase the Quantity and Quality of DeedRestricted Affordable Housing

200

Objective 2.0 Encourage and Facilitate Private Development of ADUs

125

Objective 3.0 Develop Middle Income Housing Across a Range of Product Types

135

Objective 4.0 Encourage Appropriately Scaled Multi-Family Rental Units Averaging Less than 850 SF

100

Objective 5.0 Encourage Development of Mixed Product Types that Represent Creative Density

50% of all units in Columns A+B+C

Notes: Targets are not cumulative. One project may fulfill several Targets. Residential units having received building permit or final discretionary approval Residential units having received Certificate of Occupancy 3 As defined on pages 14-25 1 2

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CREATING THE HAP THE PROCESS

The HAP evolved from four community processes from 20142016, including: 2015 Housing Element Update February - December 2014 Housing Our Community January -March 2015 The GMO Review and Ballot Recommendation July - December 2015 The HAP Drafting Process January -July 2016

The HAP evolved from an extensive process of outreach, education, research and community discussion over two years and provided over 30 opportunities for community input. Community conversations focused on housing began with the Housing Element Update process in 2014. Concerns raised by residents through that process led to a request by the City Council to create an educational series on issues impacting the cost of housing in Healdsburg, entitled 'Housing Our Community'. Through a series of community workshops, residents identified our community housing needs, prioritizing housing affordability and greater options for working families. Residents also identified a need to update the Growth Management Ordinance. Hearing residents' concerns, the City Council appointed the Community Housing Committee, tasked with creating recommendations on how the Growth Management Ordinance might be updated to address our current housing needs. Following completion of that task, the Community Housing Committee embarked on drafting the HAP, setting a vision for the future of housing in Healdsburg.

Table 3 : MEETINGS, WORK SESSIONS AND PUBLIC FORUMS LEADING TO THE HAP Date

Process

Format

Focus

2014 - HOUSING ELEMENT UPDATE PROCESS May 6, 2014

Housing Element Update

Community Workshop

Identification of Housing Issues and Potential Solutions

July 9, 2014

Housing Element Update

Community Workshop

Evaluation of Recommended Policy Revisions

2015 - HOUSING OUR COMMIUNITY PROCESS January 26, 2015

Housing Our Community

City Council Presentation

Housing Trends and Economics

February 23, 2015

Housing Our Community

Community Forum Moderated Panel of Housing Experts

What does Healdsburg need to improve the affordability of its housing?

March 25, 2015

Housing Our Community

Community Workshop with Roundtables and Polling

How should Healdsburg Grow?

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8.A.b Date

Process

Format

Focus

August 20, 2015

GMO Evaluation

CHC Work Session #2

What has been learned?

August 25, 2015

GMO Evaluation

CHC Work Session #3

What Options should be considered?

September 14, 2015

GMO Evaluation

CHC Work Session #4

Appropriate levels of growth, how allocations can be used as incentives to get housing we want

September 28, 2015

GMO Evaluation

CHC Work Session #5

Exploring GMO purpose, potential mechanics and tool to create public benefits

October 10, 2015

GMO Evaluation

Public Open House

What Changes are Being Evaluated and Why?

October 19, 2015

GMO Evaluation

CHC Work Session #6

Housing Needs Assessment initial findings

November 26, 2015

GMO Evaluation

CHC Work Session #7

Housing Needs Assessment Updated Findings and Draft Recommendations

November 2, 2015

GMO Evaluation

City Council Update

Findings to date and emerging recommendations

November 19, 2015

GMO Evaluation

CHC Meeting #8

Finalize recommendations to City Council

December 21, 2015

GMO Evaluation

City Council Recommendations

Present CHC Final Recommendations to City Council

2016 - DRAFTING THE HAP January 11, 2016

HAP Drafting

CHC Work Meeting #9

Refine Vision and Goals for the HAP

February 8, 2016

HAP Drafting

CHC Meeting #10

Refine targets and recommendations for HAP

February 25, 2016

HAP Drafting

Community Workshop

Community Housing Priorities and Targets for this Housing Cycle

March 14, 2016 March 31, 2016

HAP Drafting

CHC Meeting #11

Refine HAP Objectives

HAP Drafting

Community Forum

Moderated Panel of Housing Experts commenting on HAP recommendations

April 28, 2016

HAP Drafting

Roundtable discussions on alternative solutions

May 3, 2016

HAP Drafting

Community Workshop CHC Meeting #12

May 16, 2016

HAP Drafting

City Council Meeting

Update on Draft HAP

June 2, 2016

HAP Drafting

CHC Meeting #13

Approve Introduction, vote on Priority Recommendations

June 8, 2016

HAP Drafting

CHC Meeting #14

Discuss and vote on HAP Supporting Recommendation and Objectives

June 13, 2016

HAP Drafting

CHC Meeting #15

Vote on Indicators and Section 3

June 20, 2016

HAP Drafting

City Council

Update on TOT Ballot Measure, IHO Revisions and Growth Regulation Tool

June 27, 2016

HAP Drafting

CHC Meeting #16

Reviewed and discussed Implementation

June 29, 2016

HAP Drafting

Community Workshop

Open House to present key components of Housing Action Plan

July 6, 2016

HAP Drafting

CHC Meeting #17

Discussed Final Draft, voted on Implementation

July 11, 2016

HAP Drafting

CHC Meeting #18

Review and approved final HAP

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Document introduction, Approved Vision. Introduce Priority Recommendations

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ACRONYMS and TERMS TO KNOW The Housing Action Plan contains many terms and abbreviations, that may not be recognized by most readers. The following acronyms and definitions are important to know in reviewing this document.

ACRONYMS ADU AH AMI CHC COA GMO GP HAP HEU IHO MF MIH SF SFD TOT

Accessory Dwelling Unit Affordable Housing Area Median Income Community Housing Committee Condition of Approval Growth Management Ordinance General Plan Housing Action Plan Housing Element Update Inclusionary Housing Ordinance Multi - Family Middle Income Housing Square Feet Single Family Detached Transient Occupancy Tax

Accessory Dwelling Unit

An attached, or detached dwelling unit located on the same site as a primary residence. ADUs are also commonly known as ‘Granny Flats’ and Accessory Dwellings.

Affordable-by-Design

Housing that due to size, construction efficiencies, creative funding or reduced land cost, costs less than conventionally designed and built housing.

Affordable Housing

Housing units priced to ensure that total housing cost (rent or mort- gage, utilities and fees) do not exceed 30% of a household’s gross annual income. Affordable housing as defined by statute, requires income restrictions based on an established Area Median Income.

Area Median Income

The median of all household income in a given region. AMI is the key benchmark by which ‘affordability’ is measured. The United States Department of Housing and Urban Development (HUD) uses survey data from the American Community Survey (ACS) adjusted for the Consumer Price Index (CPI) and family size, to calculate income lim- its including identifying the median income for geographic areas.

Co-Housing

A housing type that is designed and constructed for a shared com- munity of individuals. Actual product type may vary, but generally includes a more affordable-by-design approach and certain shared community elements.

Community Housing Committee

A nine person committee appointed by the City Council to help develop recommendations for housing in Healdsburg, as articulated in the Housing Action Plan.

Cottage Court

A housing type that organizes more 'affordable-by-design' cottages around a common green or shared open space, to reduce maintenance and land costs while creating a stronger sense of neighbor- hood.

Deed-Restricted

Housing where the underlying deed restricts who can rent or buy a unit, traditionally tied to some form of maximum income requirement. Deed restrictions ensure that Affordable Housing built with public support, or by statute, remains a part of a community’s total affordable housing stock.

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Design Guidelines

A policy document adopted by the City to address design of residential and commercial structure in the City, for compatibility with existing structures or stated policies in the General Plan.

General Plan

Locally adopted statutory document that acts as the blueprint for the community's long term vision of future growth

Growth Managemen t Ordinance

A tool used to manage the pace or rate of new development in a community.

Housing Action Plan

A Strategic Plan meant to shape the form and type of housing to be built within Healdsburg over the current Housing Cycle.

Housing Cycle

A defined period of time in which the Housing Action Plan is focused to inform the type, number and affordability of housing to be built. Meant to run concurrent with the General Plan Housing Element Update - currently every eight years.

Housing Element

An Element of the City's General Plan, that focuses on the com- munity's housing needs. Mandated by the State of California to be updated every eight years, and address a consistent set of issues including housing stock, future needs relative to regional goals and affordability of housing stock.

Impact Fees

Fees charged by the City, for new or expanded development to off- set the cost of the development's added burden on services.

Inclusionary Housing Ordinance

A statutory requirement, within the City of Healdsburg, that requires new residential development to contribute to Affordable Housing, either through a fee or by constructing Affordable Housing Units.

Land Use Code

Locally adopted code that specifies how and for what purpose private land may be used.

Local Preference

A clause in housing contracts that provides a preference for local residents or employees.

Middle-Income Housing

Housing units priced to ensure they are affordable to households earning an income from one hundred and twenty-one (121) to one hundred and sixty (160) percent of the area median income for Sonoma County.

Multi-Family

A structure containing more than one dwelling unit.

Single Family Detached

A dwelling unit that is not attached in any manner to another dwelling unit, with the exception of any Secondary Dwelling Unit and is located on a separate lot.

Single Family Attached

A dwelling unit that is attached to one or more dwelling units by common vertical walls in which each unit has its own front and rear access to the outside, no unit is located over another unit and each unit is located on a separate lot.

Transient Occupancy Tax (Bed Tax)

A tax paid by guests based on overnight stays in local lodging

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ACKNOWLEDGMENTS The City would like to thank all of the residents of Healdsburg who participated in the 16 community meetings and workshops in preparation of the HAP. We also thank the following individuals for their dedication and commitment to the community of Healdsburg and the development of this plan: HEALDSBURG CITY COUNCIL

COMMUNITY HOUSING COMMITTEE

CITY STAFF

2016 Tom Chambers, Mayor Gary Plass, Vice Mayor Brigette Mansell Shaun McCaffery Eric Ziedrich

2017 Shaun McCaffery, Mayor Brigette Mansell V i c e M a y o r Leah Gold David Hagele Joe Naujokas

2016 Jon Worden Richard Burg Tom Chambers Brigette Mansell Jeff Civian Joe Lickey Erica Whisney Nancy Madarus Bruce Abramson Richard Butler Shaun McCaffery Eric Ziedrich

2017 Bruce Abramson Lyell Doll Robert Gain Dean Kladder Deborah Kravitz Debbie Mason Delia Nieto Bruce Abramson Lyell Doll

David Mickaelian, City Manager Karen Massey, Community Housing & Development Director Raina Allan, Administrative Specialist Debra Nelson, Administrative Analyst Maya DeRosa, AICP, Planning Director Steve Buffenbarger, Building Official Brent Salmi, Public Works Director

CONSULTANTS

Jim Heid, FASLA, UrbanGreen Walter Kieser, Economic & Planning Systems

HOUSING PANEL PARTICIPANTS

Bob Comstock, Comstock Builders Chuck Cornell, Burbank Housing Hugh Futrell, Hugh Futrell Corporation Steve Sheldon, IBIS Builds Elizabeth Shepard, Shepard Financial

HOUSING PARTNERS

Colleen Carmichael, Reach For Home Dev Goetschius, Housing Land Trust of Sonoma County

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HEALDSBURG HOUSING ACTION PLAN 2017-2022

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CITY OF HEALDSBURG RESOLUTION NO. 28-2017 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG RESCINDING RESOLUTION NO. 116-2015, ESTABLISHING A NEW COMMUNITY HOUSING COMMITTEE AND OUTLINING THE ROLES AND RESPONSIBILITIES OF THE COMMITTEE WHEREAS, the City Council of the City of Healdsburg recognizes the continuing need to address the community’s affordable and workforce housing needs and to direct activities to further housing and the affordability of housing within the City of Healdsburg; and WHEREAS, the City Council desires to establish a new Community Housing Committee representing a broad cross section of the community to advise and make recommendations to Council on how best to address workforce and affordable housing challenges in the City of Healdsburg; and WHEREAS, it is necessary to determine the procedures relating to methods of appointment, terms of office, duties and responsibilities. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby rescinds Resolution No. 116-2015, establishes a new Community Housing Committee and adopts the following provisions that relate to the Committee's membership, terms of office, duties and responsibilities: 1.

MEMBERSHIP: The membership shall consist of seven (7) core members appointed by the City Council. The core membership shall include seven at large members who represent a broad cross section of the community diversified by age, family status, ethnicity, gender, housing tenure, experience with affordable housing and other relevant experiences. All members shall reside within the City limits of the City of Healdsburg. The City Council shall appoint additional members to the Committee as deemed necessary based on expertise needed to fulfill the objectives.

2.

TERM OF OFFICE OF MEMBERS: The term of office of all members of said Committee shall be three (3) years; provided that such members first appointed shall so classify themselves by lot such that three (3) members’ terms shall terminate on the first day of January, 2020, two (2) on the first day of January 2019 and two (2) on the first day of January, 2018. Each member shall serve at the pleasure of the Mayor and the City Council until his or her successor is appointed and qualified.

3.

VACANCY: Vacancies on said Committee, for whatever cause, shall be filled by the City Council. Any member missing three (3) consecutive regular meetings without approval of the Committee shall be deemed as having vacated his or her seat on the Committee.

Attachment: City Council Resolution 28-2017 (1768 : Community Housing Committee Work Plan Update and Adoption of Revised Housing

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Resolution No. 28-2017 Page 2 4.

OFFICERS OF THE COMMITTEE: The Community Housing Committee shall select one of its members as Chairperson and one of its members as Vice-Chairperson whose terms of office for said positions shall be one year. The Chairperson shall act as liaison to the City Council, providing periodic updates on the Committee’s work in conjunction with City staff.

5.

MEETINGS OF THE COMMITTEE: The Community Housing Committee shall meet the second Monday of every month. Meetings shall take place at Healdsburg City Hall Council Chambers, 401 Grove Street, or at such other time and place as the Committee may establish from time to time following proper notice. Special meetings of the Committee may be called at any time by City Staff, the Chairperson, or by any four (4) or more members of the Committee, by providing notice of said meeting as required by law.

6.

ORGANIZATION AND PROCEDURE: The Committee may make and alter all rules and regulations governing its organization and procedure not inconsistent with this Resolution or any other Resolution or any Ordinance of the City. The Committee is subject to and shall comply with the requirements of the Brown Act (Gov. Code §54950 et seq.) Minutes of Committee meetings shall be summary minutes.

7.

STAFF TO THE COMMITTEE: The City Manager shall appoint an officer or an employee of the City who shall act as Secretary to the Committee and who shall provide clerical assistance.

8.

DUTIES AND RESPONSIBILITIES OF THE COMMITTEE: The Committee shall advise the City Council on matters relating to policies and programs which will serve to further workforce and affordable housing inventories and programs. The focus of the Committee shall be as follows: Initial work assignments to be completed by the Committee •

Update the Housing Action Plan to reflect the current Growth Management Ordinance (“GMO”) remaining in place including omitting reference to amending the GMO and creation of a middle income category of affordable housing.



Review the Council adopted GMO Policies and Procedures to ensure they align with the City's affordable housing objectives including assessing the way allocations are currently distributed.

Attachment: City Council Resolution 28-2017 (1768 : Community Housing Committee Work Plan Update and Adoption of Revised Housing

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Attachment: City Council Resolution 28-2017 (1768 : Community Housing Committee Work Plan Update and Adoption of Revised Housing

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Attachment: City Council Resolution 28-2017 (1768 : Community Housing Committee Work Plan Update and Adoption of Revised Housing

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Healdsburg Community Housing Committee Proposed Meeting Schedule and Agenda Meeting Sequence

Topics Covered

Meeting Date

Meeting #1 -- HAP 1) Review & Discuss Overall Housing Strategy to Implement Community’s Housing Orientation Goals & Fulfill Council Directed Workplan

Supporting Policy or Technical Documents Introductory Staff Reports and PowerPoint Presentation to CHC

2) Comprehensive Review & Discussion of HAP

August 14th

3) Review and discuss HAP revision process 4) Identification of policy or technical topics requiring further analysis Meeting #2 -1) Review meeting agenda for this cycle of CHC work Policy review and scope of HAP 2) Discuss (confirm or modify) HAP Vision Statement and Objectives revisions 3) Discuss (confirm or modify) Priority Recommendations (questions and data request stage)

Current HAP report; key areas of potential updating/amendment noted

4) Review/revise Supporting Recommendations (questions and data request stage) October 30th

5) Identify and discuss key policy and technical issues (what else do you need to know?): -- RHNA and local housing need assessment -- Effectiveness of particular policy reforms (e.g. ADUs) -- Revising "inclusionary housing" requirements (IHO) -- Achieving "middle income" housing (up to 160% AMI) -- Affordable housing subsidy requirements and funding sources

Meeting #3 -GMO Policies and Procedures Amendments

1) Should there be allocation to higher density housing? 2) Should there be allocation to "middle income" units? 3) Should there be allocation to ADUs? 4) How to allocate any retained (unused annually) allocations

November 13th

Meeting #4 -- HAP 1) Discuss revised Housing Action Plan, including Supporting Recommendations Amendments, 2) Discuss revised Growth Management Ordinance Policies and Procedures GMO Policy and Procedure Amendments

Meeting #5 -HAP, GMO, IHO Amendments

Meeting #6 -GMO, IHO, Other regulatory or incentive policies

Meeting #7 -Funding Options and Forecast

Meeting #8 -Funding Options and Forecast

Revised (based on CHC discussion) HAP and GMO Policies and Procedures December 11th

1) Finalize Housing Action Plan recommendations 2) Discuss Growth Management Ordinance Policies and Procedures 3) Should inclusionary percentage requirements be changed? 4) Should mix of income categories (very low, low, moderate) be changed 5) Should "in lieu fee" be increased to reflect actual cost of construction and apply to all market rate units? 6) Should additional financial or regulatory incentives be considered for those meeting or exceeding inclusionary requirements? 1) Continue discussion of GMO and IHO 2) Review of new ADU policies and regulations 3) Density Bonus Ordinance provisions 4) Response to new State housing legislation (e.g., SB-35, etc.) 5) Pending development project applications and the HAP Objectives Parking 1) In lieu fees (revised) 2) Measure S funding amounts and uses (existing) 3) Commercial linkage fee (new) 4) New local taxes and bond measure 5) Partnerships with other public entities (Sonoma County CDC, etc.) 5) Funding prospects from new State legislation (SB-2, etc.) 6) Review forecast of funding available and recommend allocation priorities 1) Finalize recommended scope of amendments to IHO and GMO Policies and Procedures 2) Recommended scope of other implemention actions (ADU, funding sources, density bonus incentives, etc).

Current GMO Policies and Procedures document; answers to technical questions from consultant

January 16th

February 12th

Revised HAP, GMO report, current Inclusionary Ordinance; answers to technical questions from consultant

Current City regulations; consultant report on State legislation; status report on pending applications

6)

Consultant memorandum on affordable housing funding sources March 12th

April 9th

Consultant/Staff memorandum documenting discussion/decisions from CHC meetings

Attachment: CHC Meeting Schedule and Agenda 2-12-18 (1768 : Community Housing Committee Work Plan Update and Adoption of Revised

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9.A

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Approval of an Inclusionary Housing Agreement for the Farmstand Subdivision, 979 and 1069 Grove Street

PREPARED BY:

Lisa Kranz, Senior Planner

STRATEGIC INITIATIVE(S): Quality of Life

RECOMMENDED ACTION(S): Adopt a Resolution approving an Inclusionary Housing Agreement between the City and Farmstand Project LLC for four affordable, inclusionary rental units as part of the Farmstand Subdivision located at 979 and 1069 Grove Street

BACKGROUND: The Planning Commission recommended approval (Resolution 2015-21) and the City Council approved (Resolution 13-2016) the Farmstand Subdivision Tentative Map (TM2014-01) on November 10, 2015 and March 7, 2016, respectively. The Final Map was approved by the City Council on October 16, 2017. The project’s conditions of approval require submittal and Council approval of an Inclusionary Housing Agreement. DISCUSSION/ANALYSIS: The Farmstand Subdivision is required to provide four inclusionary housing units in accordance with the City’s Inclusionary Housing Ordinance. These units will include a duplex and two single family dwellings, all which will be rented. The single family units will be affordable to low income households while the duplex will be affordable to one low and one moderate income household. The approved project meets the Inclusionary Housing Ordinance requirements. The units will be constructed concurrently with the market rate units, and all affordable units will be developed and occupied prior to construction of the 18th market rate unit. The Inclusionary Housing Agreement restricts the occupancy and rents of the inclusionary affordable units and ensures they are made available to income qualified households at affordable rents for a period of 55 years. Upon approval of the agreement, it will be executed and recorded.

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ALTERNATIVES: The City Council may wish to direct changes to the Inclusionary Housing Agreement. FISCAL IMPACT: There is no fiscal impact related to the proposed action. ENVIRONMENTAL ANALYSIS: The City Council reviewed and adopted a Mitigated Negative Declaration and Mitigation Monitoring Program for the Farmstand Subdivision on March 7, 2016 (Resolution No. 13-2016). Adoption of a resolution approving an inclusionary housing agreement is exempt from the California Environmental Quality Act (“CEQA”) in accordance with CEQA Guidelines Section 15061(b)(3), which states that where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. ATTACHMENT(S): Resolution Draft Inclusionary Agreement Farmstand 2-5-18

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CITY OF HEALDSBURG RESOLUTION NO.

WHEREAS, on November 10, 2015 the Planning Commission of the City of Healdsburg recommended approval of a Mitigated Negative Declaration, accompanying Mitigation Monitoring Program and a Tentative Map for the Farmstand Subdivision; and WHEREAS, on March 7, 2016, the City Council reviewed and adopted a Mitigated Negative Declaration and accompanying Mitigation Monitoring Program for the Farmstand Subdivision and approved the Tentative Map for the Farmstand Subdivision; and WHEREAS, in accordance with the City’s Inclusionary Housing Ordinance, the project is required to provide four affordable housing units, three for low income households and one for a moderate income household; and WHEREAS, in accordance with the Farmstand Subdivision Conditions of Approval, an Inclusionary Housing Agreement has been developed to ensure long term affordability of the inclusionary units; and WHEREAS, the Inclusionary Housing Agreement ensures the four units will be made available to income qualified households at affordable rents for a period of 55 years. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby: (1) approves the Inclusionary Housing Agreement between the City and Farmstand Project LLC attached as Exhibit A and authorizes the City Manager or designee to execute and deliver each document to which the City is a party substantially in the form attached hereto, with such non-material changes as may be approved by the City Attorney; and (2) authorizes the recordation of the Inclusionary Housing Agreement in the Official Records of Sonoma County. PASSED, APPROVED AND ADOPTED this 5th day of February, 2018 by the following vote: AYES:

Councilmembers:

NOES:

Councilmembers:

ABSENT:

Councilmembers:

ABSTAINING:

Councilmembers:

SO ORDERED:

ATTEST:

__________________________________ Brigette A. Mansell, Mayor

_______________________________ Maria Curiel, City Clerk

Attachment: Resolution (1853 : Approval of Inclusionary Housing Agreement)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALSDBURG APPROVING AN INCLUSIONARY HOUSING AGREEMENT BETWEEN THE CITY AND FARMSTAND PROJECT LLC FOR PROPERTY LOCATED AT 979 AND 1079 GROVE STREET AND AUTHORIZING EXECUTION AND RECORDATION OF THE AGREEMENT

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RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Healdsburg Attention: Maria Curiel, City Clerk 401 Grove Street Healdsburg, CA 95448 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§ 6103, 27383

FOR RECORDER’S USE ONLY

Inclusionary Housing Agreement This Inclusionary Housing Agreement (“Agreement”) is entered into this ____ day of _______________, 2017, by and between Farmstand Project LLC, a California limited liability company, (“Subdivider”), and the City of Healdsburg, a California municipal corporation (“City”). City and Subdivider are sometimes referred to herein individually as a “Party” and collectively as the “Parties”. RECITALS A. Subdivider is the owner of certain real property located at 979 and 1069 Grove Street, Healdsburg, California, Assessor’s Parcel Numbers 089-081-013 and 089-120-004, more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”). The Property has been entitled for subdivision into thirty (30) separate lots and the development of (i) twenty four (24) “for-sale” single family residential units, and (ii) four (4) rental units (comprised of two (2) single family and two (2) multifamily duplex residential units) (with commercial and office uses also allowed on some lots), as shown on the final map for the Farmstand Subdivision, Phases I, II & III, filed for record on _____________, 201_, in Book ____ of Maps, Pages __-__, inclusive, in the official records of the County of Sonoma, State of California (the “Farmstand Subdivision”). B. As part of the approval of the Farmstand Subdivision, Subdivider is required to provide the four (4) units approved for development on Lots 7, 8 and 16 of the Farmstand Subdivision (individually an “Affordable Housing Site” and collectively the Affordable Housing Sites”) as affordable units (individually an “Affordable Unit” and collectively the “Affordable Units”) as follows: three (two single family units and one multifamily unit)for occupancy by low income persons or households, and one (one multifamily unit) for occupancy by moderate-income persons or households, all in satisfaction of City’s inclusionary housing provisions set forth in Healdsburg Municipal Code Section 20.20.030 (the “Inclusionary Housing Obligations”). Each Affordable Housing Site associated with an Affordable Unit is designated, shown and described in Exhibit B attached hereto and incorporated herein by this reference.

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

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C. In lieu of selling the Affordable Units constructed on each Affordable Housing Site, Subdivider desires to comply with the Inclusionary Housing Obligations by causing the Affordable Units to be rented to low and moderate income persons or households in accordance with the provisions contained herein, which are a material part of the consideration received by City in connection with its approval of the Farmstand Subdivision. NOW, THEREFORE, in consideration of the following covenants, the Parties hereto agree as follows: 1.

INCLUSIONARY HOUSING REQUIREMENTS

1.1 Restricted Units. Subdivider agrees, at its sole cost and expense, to construct or cause to be constructed, the four (4) Affordable Units on the Affordable Housing Sites, which it shall cause to remain available for a minimum of fifty-five (55) years for the rental to, and the occupancy by, the following categories of occupants: three (3) Affordable Units for Low-Income persons or households, and one (1) Affordable Unit for Moderate-Income persons or households, all as designated, shown and described, in Exhibit B attached hereto and incorporated herein by this reference. Further, said Affordable Units shall be constructed in accordance with the City approved building plans and specifications and in compliance with the Inclusionary Housing Obligations. The Affordable Units shall be made available for rental to Eligible Households at Affordable Rents as defined and set forth in the Affordable Housing Regulatory Agreement And Declaration Of Restrictive Covenants (the “Affordable Housing Covenant”), in the form attached hereto as Exhibit C and incorporated herein by this reference. 1.2 Construction Timing. Construction timing for the Affordable Units shall be as set forth below. If Subdivider fails to construct the Affordable Units in compliance with the timing set forth in this Section 1.2, the City may withhold the issuance of certificates of occupancy for other non-Affordable Housing lots of the Farmstand Subdivision or building permits for the remainder of the Farmstand Subdivision until such time as the Subdivider comes into compliance with this Section 1.2. (a) The two (2) Affordable Units to be constructed as a duplex on Lot 7 shall be completed with a Certificate of Occupany issued for the entire duplex before the City will allow construction of the fifth (5th) market-rate residential unit on the Property. The City will not accept an application for a building permit for the fifth market rate residential unit until a Certificate of Occupancy is issued for the Affordable Units on Lot 7. These Affordable Units, together with the first four (4) market-rate residential units developed on the Property, shall be referred to herein as “Phase I” of the Farmstand Subdvision. (b) One (1) Affordable Unit shall be completed on Lot 8 or Lot 16, with a Certificate of Occupancy issued to such Affordable Unit before the City will allow construction of the twelfth 12th market-rate residential unit on the Property. The City will not accept an application for a building permit for the twelfth (12th) market-rate residential unit until a Certificate of Occupancy is issued for this Affordable Unit. This Affordable Unit, together with the fifth (5th) through eleventh (11th) market-rate residential units developed on the Property, shall be referred to herein as “Phase II” of the Farmstand Subdvision.

OAK #4818-7069-4979 v4

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

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(c) The fourth (4th) Affordable Unit shall be completed on Lot 8 or Lot 16, whichever remains vacant, before the City will allow construction of the eighteenth (18th) market-rate residential unit. The City will not accept an application for a building permit for the eighteenth (18th) market-rate residential unit until a Certificate of Occupancy is issued for the fourth and final Affordable Unit. This Affordable Unit, together with the twelfth (12th ) through the seventeenth (17th) market-rate residential units developed on the Property, shall be referred to herein as “Phase III” of the Farmstand Subdvision. 1.3 Condition to Issuance of Certificate of Occupancy by City. At or prior to the issuance of a certificate of occupancy for each Affordable Unit constructed on an Affordable Housing Site, Subdivider shall execute, acknowledge and record in the official records of the County of Sonoma, State of California, an Affordable Housing Covenant with the City for a term of fifty-five (55) years from the date of recording, in the form attached hereto as Exhibit C and incorporated herein by this reference, encumbering the applicable Affordable Housing Site. Further, City shall thereafter execute, acknowledge and record in the official records of the County of Sonoma, State of California, in a form acceptable to Subdivider, a release of the encumbrance of this Agreement against the other non-Affordable Housing Site lots in the applicable Phase I, II or III of the Farmstand Subdivision. 1.4 Recordation; Subordination. This Agreement shall be recorded in the Official Records of the County of Sonoma, State of California. Subdivider hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, which consent may be withheld in City’s sole discretion, this Agreement, and the Affordable Housing Covenant shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Affordable Housing Sites. 1.5 Tentative Map Conditions. In addition to the foregoing, Subdivider shall satisfy all other specific conditions of approval imposed by City on the Farmstand Subdivision. 2.

INDEMNITY

2.1 Indemnity. To the maximum extent permitted by law, Subdivider agrees to indemnify, defend (with counsel approved by the City) and hold harmless City and its elected and appointed officials, officers, employees, representatives and agents (collectively, “Indemnitees”) from and against any and all claims, liabilities, losses, costs, demands, damages, causes of action, legal and administrative proceedings, penalties, deficiencies, fines, expenses and obligations (including, without limitation, attorneys’ fees and costs of litigation) arising out of or relating in any manner to Subdivider’s willful or negligent failure to perform the terms of this Agreement. The provisions of this Section shall survive the expiration or other termination of this Agreement or any release of all or part of the Property from the burdens of this Agreement. 3.

ENFORCEMENT

3.1 Default. In the event Subdivider, through no fault of the City, materially defaults in the performance of any obligation under this Agreement, and such default remains uncured for a period of thirty (30) days after City has delivered a written notice of such, or in the event a cure OAK #4818-7069-4979 v4

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

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(a) By mandamus or other suit, action or proceeding at law or in equity, require Subdivider to perform its obligation under this Agreement, or enjoin any actions which may exacerbate damages caused by the default; (b) Take such other action at law or in equity as may be reasonably necessary or appropriate to enforce Subdivider’s obligations hereunder. 3.2 Remedies Not Exclusive. In any case where this Agreement provides a specific remedy to City for default by Subdivider, such remedy shall be in addition to, and not exclusive of, City’s right to pursue any other administrative, legal, or equitable remedy to which it may be entitled. 4.

TRANSFER AND ENCUMBRANCE

4.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Subdivider shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease, of the whole or any part of the Affordable Housing Site, or the Affordable Unit located thereon (collectively, “Transfer”) without the prior written consent of the City, which approval may be withheld in City’s sole discretion. 4.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent the granting of access to facilitate the construction of improvements on an Affordable Housing Site. 4.3 Requirements for Proposed Transfers. City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, any Affordable Housing Site, any Affordable Unit or part thereof if all of the following requirements are met (provided however, the requirements of this Section 4.3 shall not apply to Transfers described in Section 4.2): (i) The proposed transferee demonstrates to City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by City to competently manage the Affordable Unit(s) on the Affordable Housing Site(s) and to otherwise fulfill the obligations undertaken by Subdivider under this Agreement. (ii) Subdivider and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in any Affordable Unit, any Affordable Housing Site, or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

cannot be completed within thirty (30) days, if the Subdivider has not begun and diligently pursued the cure to completion, then City may declare an “Event of Default” to have occurred, in which case it may take one or more of the following steps:

(iii) The proposed transferee shall expressly assume all of the rights and obligations of Subdivider under this Agreement and the Conditions of Approval arising after the effective date of the Transfer and all obligations of Subdivider arising prior to the effective date OAK #4818-7069-4979 v4

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(iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records of the County of Sonoma, State of California. Consent to any proposed Transfer may be given by the City Manager of the City of Healdsburg unless the City Manager, in his or her discretion, refers the matter of approval to the City Council. If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Subdivider, the proposed Transfer shall be deemed approved. 5.

EFFECT OF TRANSFER WITHOUT CITY CONSENT.

5.1 In the absence of specific written agreement by the City, no Transfer of any Affordable Unit or any Affordable Housing Site shall be deemed to relieve Subdivider or any other party from any obligation under this Agreement. It shall be an Event of Default hereunder if without the prior written approval of the City, Subdivider assigns or Transfers this Agreement, any Affordable Unit, or any Affordable Housing Site in violation of Section 4 and the subsections thereof. 6.

COVENANTS TO RUN WITH THE LAND

6.1 Binding on Successors. Subdivider hereby subjects the Property to the covenants, reservations and restrictions set forth in this Agreement and declares its express intent that all such covenants, reservations and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Subdivider’s successors in title to the Property. All covenants without regard to technical classification or designation shall be binding for the benefit of City, and such covenants shall run in favor of City for the entire term of this Agreement. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall be conclusively held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions set forth in this Agreement, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument. 6.2 Attorneys’ Fees. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition or covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover costs of suit, including reasonable attorney’s fees, as may be fixed by the court rendering judgment. Attorney’s fees shall include attorney’s fees on any appeal. 6.3 Amendments. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the Official Records. OAK #4818-7069-4979 v4

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

of the Transfer (unless Subdivider expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Subdivider’s obligations pursuant to the restrictions set forth in this Agreement.

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Severability / Waiver / Integration.

(a) If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. (b) A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right, be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. (c) between the parties. 7.

This Agreement together with any exhibits contains the entire agreement

FUTURE ENFORCEMENT BY CITY

7.1 Enforcement. The parties hereby agree that City shall have the right to enforce all of the terms and conditions herein. 8.

GENERAL PROVISIONS

8.1 Modification. No modification to this Agreement shall be binding upon any party unless such modification is in writing and is signed by the party to be bound. 8.2 Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Any action or proceeding to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Sonoma County, California or in the Federal District Court for the Northern District of California. 8.3 Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute one original Agreement. 8.4 Rule of Construction. The parties hereto acknowledge that they each enter into this Agreement after having an opportunity for thorough review by, and on advice of, their respective legal counsel. The judicial rule of construction requiring or allowing an instrument to be construed to the detriment of or against the interests of the maker thereof shall not apply to this Agreement. IN WITNESS WHEREOF, the Subdivider and City have executed this Agreement on the date first written above. SUBDIVIDER: FARMSTAND PROJECT LLC, a California limited liability company

OAK #4818-7069-4979 v4

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

6.4

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By:

CITY OF HEALDSBURG, a California municipal corporation

By: David Mickaelian, City Manager ATTEST:

Maria Curiel, City Clerk

APPROVED AS TO FORM:

Samantha Zutler, City Attorney

OAK #4818-7069-4979 v4

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

CITY:

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ACKNOWLEDGMENTS

STATE OF CALIFORNIA COUNTY OF

) )

On ____________ __, 20__ before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (seal)

Signature:

****************************** A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA COUNTY OF

) )

On ____________ __, 20__ before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature:

(seal)

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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9.A.b

Exhibit A

All that real property situated in the City of Healdsburg, County of Sonoma, State of California, described as follows: PARCEL ONE: BEGINNING AT A POINT ON SECTION LINE, 34.90 CHAINS WEST OF THE SOUTHEAST CORNER OF SECTION 17, TOWNSHIP 9 NORTH, RANGE 9 WEST, M.D. B. & M.; THENCE WEST ON SAID SECTION LINE, 5.10 CHAINS TO A STAKE; THENCE NORTH 9.67 CHAINS TO A STAKE; THENCE EAST 25.85 CHAINS TO A STAKE; THENCE SOUTH 5.51 CHAINS TO A STAKE; THENCE WEST 21.57 CHAINS TO A STAKE; THENCE SOUTHEASTERLY IN A DIRECT LINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ALL THAT PORTION DESCRIBED IN THE DEED FROM ALFRED BUTTS, DATED DECEMBER 16, 1947, AND RECORDED DECEMBER 17, 1947 IN BOOK 751 OF OFFICIAL RECORDS, PAGE 489, SERIAL NO. C-57386, SONOMA COUNTY RECORDS. ALSO EXCEPTING THEREFROM ALL THAT PORTION DESCRIBED IN THE DEED FROM ALFRED BUTTS, DATED AUGUST 2, 1957 AND RECORDED JANUARY 24, 1958 AS SERIAL NO. F-33480, BOOK 1569, PAGE 9, SONOMA COUNTY RECORDS. ALSO EXCEPTING THEREFROM ALL THAT PORTION DESCRIBED IN THE DEED FROM ALFRED BUTTS, DATED MAY 5, 1969, AND RECORDED MAY 8, 1969 IN BOOK 2392 OF OFFICIAL RECORDS, PAGE 872, SERIAL NO. L-18715, SONOMA COUNTY RECORDS. PARCEL TWO: BEING A PORTION OF THE SOUTHEAST 1/4 OF SECTION 17, TOWNSHIP 9 NORTH, RANGE 9 WEST, M.D.M., BEING A PART OF THE SOTOYOME RANCHO, AND COMMENCING AT THE NORTHEAST CORNER OF THE LANDS KNOWN AS THE W.W. FERGUSON TRACT; THENCE RUNNING ALONG THE NORTH LINE OF THE LAND KNOWN AS THE W.W. FERGUSON TRACT, 23.11 CHAINS TO THE CENTER OF A SLOUGH THENCE NORTHERLY, 4.91 CHAINS; THENCE EASTERLY AND PARALLEL WITH SAID FIRST LINE, 24.26 CHAINS; THENCE SOUTHERLY ALONG THE COUNTY ROAD, 4.91 CHAINS TO THE PLACE OF BEGINNING, CONTAINING 12 ACRES, MORE OR LESS, THE SAME HAVING BEEN FOR MANY YEARS KNOWN AS THE "OGILVIEW PLACE" AND NOW AS "THE KUNS PLACE", SAID LANDS BEING BOUNDED ON THE NORTH BY THE LANDS OF JOHN BANKS, EAST BY THE PUBLIC ROAD, SOUTH BY THE LANDS OF BUTTS AND WEST BY THE LANDS OF BUTTS BROTHERS, FORMERLY OWNED BY F.D. NEWLAND AND

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

Legal Description of Property/Farmstand Subdivision

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EXCEPTING THEREFROM THAT PORTION CONVEYED TO EGIDIO R. CERRI, ET UX, BY DEED DATED JANUARY 26, 1932 AND RECORDED FEBRUARY 9, 1932, IN BOOK 313 OF OFFICIAL RECORDS, PAGE 190, SONOMA COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO KENNETH W. CAREY AND ELIZABETH CAREY, HIS WIFE, BY DEED DATED JULY 24, 1940 AND RECORDED AUGUST 13, 1940 IN BOOK 506 OF OFFICIAL RECORDS, PAGE 355, SONOMA COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA BY DEED DATED JUNE 6, 1957 AND RECORDED JULY 23, 1957, IN BOOK 1533 OF OFFICIAL RECORDS, PAGE 579, SONOMA COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO JOHN NABER, ET UX, BY DEED DATED SEPTEMBER 30, 1959 AND RECORDED OCTOBER 15, 1959 IN BOOK 1705 OF OFFICIAL RECORDS, PAGE 113, SONOMA COUNTY RECORDS. APN: 089-120-004-000 and 089-081-013-000

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

E.M. NORTON.

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9.A.b

Exhibit B

Income Category Moderate

Lot No. Plan/Specification 7 – Unit A One Duplex Unit

Low

7 – Unit B

One Duplex Unit

3

Low

8

Single Family Unit

3 or 4

Low

16

Single Family Unit

3 or 4

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No. of Bedrooms 3

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

Affordable Housing Sites – Farmstand Subdivision

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

9.A.b

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9.A.b

Exhibit C

City of Healdsburg 401 Grove Street Healdsburg, CA 95448 Attention: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 Space above this line for Recorder’s use.

AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS

by and between

THE CITY OF HEALDSBURG

and FARMSTAND PROJECT LLC

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:

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9.A.b

This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into this _________ day of ________________, 201__, by and between the City of Healdsburg, a California municipal corporation (“City”) and Farmstand Project LLC, a California limited liability company (“Subdivider”). City and Subdivider are individually referred to herein as a “Party” and collectively as the “Parties.” RECITALS A. Farmstand Project LLC, a California limited liability company (the “Subdivider”) owns that certain real property located at [____ Grove Street, Healdsburg, California, identified as Lot 7 of Farmstand Subdivision, filed for record on _____________, 201_, in Book ____ of Maps, Pages __-__, inclusive, in the official records of the County of Sonoma, State of California; or ________ Street, Healdsburg, California, identified as Lot 8 of Farmstand Subdivision, filed for record on _____________, 201_, in Book ____ of Maps, Pages __-__, inclusive, in the official records of the County of Sonoma, State of California; or ________ Street, Healdsburg, California, identified as Lot 16 of Farmstand Subdivision, filed for record on _____________, 201_, in Book ____ of Maps, Pages __-__, inclusive, in the official records of the County of Sonoma, State of California] (the “Affordable Housing Site”). The Affordable Housing Site is more particularly described in Exhibit A attached hereto. B. In 2014, Subdivider submitted an application to City for the approval of the property in which this Affordable Housing Site is located (the “Farmstand Subdivision”), thereby creating thirty (30) separate lots and the eventual development of twenty four (24) “for-sale” single family residential units and four (4) price restricted rental units (comprised of two (2) single family and two (2) multifamily duplex residential units) ( with commercial and office uses also allowed on some lots) (the “Project”). C. City subsequently approved the Project in 2016, subject to certain “Conditions of Approval” (the “Conditions of Approval”). Pursuant to the Conditions of Approval, Subdivider is required to provide four (4) of the residential units approved for development and rental as affordable units (individually an “Affordable Unit” and collectively the “Affordable Units”) on lots 7, 8 and 16 of the Farmstand Subdivision for occupancy by low income and moderate-income persons or households, all in satisfaction of City’s inclusionary housing provisions set forth in Healdsburg Municipal Code Section 20.20.030 (the “Inclusionary Housing Obligation”). D. In lieu of subdividing, developing and selling the Affordable Units constructed on the Affordable Housing Sites, Subdivider opted to comply with the Inclusionary Housing Obligation by renting the Affordable Units constructed on the Affordable Housing Sites to low and moderate income persons or households in accordance with the provisions contained herein.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS

E. The purpose of this Agreement is to satisfy the Inclusionary Housing Obligation of the Project and to regulate and restrict the occupancy and rent of the Affordable Units on the

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9.A.b

AGREEMENT NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. “50% AMI Household” means a household whose Gross Income upon initial occupancy does not exceed fifty percent (50%) of Area Median Income as adjusted for Actual Household Size. “80% AMI Household” means a household whose Gross Income upon initial occupancy does not exceed eighty percent (80%) of Area Median Income as adjusted for Actual Household Size. “120% AMI Household” means a household whose Gross Income upon initial occupancy does not exceed one hundred twenty percent (120%) of Area Median Income as adjusted for Actual Household Size. “50% AMI Unit” means a unit that is restricted for rent to Eligible Households that qualify as fifty percent (50%) AMI Households. “80% AMI Unit” means a unit that is restricted for rent to Eligible Households that qualify as eighty percent (80%) AMI Households. “120% AMI Unit” means a unit that is restricted for rent to Eligible Households that qualify as one hundred twenty percent (120%) AMI Households. “Actual Household Size" means the actual number of persons in the applicable household. “Adjusted for Family Size Appropriate for the Unit” means, in the absence of pertinent federal statutes applicable to the Project, adjusted for a household of one person in the case of a studio unit, two persons in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, and five persons in the case of a four-bedroom unit. “Affordable Housing Site” is defined in Recital C.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

Affordable Housing Sites for the benefit of the occupants. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Subdivider and Subdivider’s successors and assigns for the full term of this Agreement.

"Affordable Rent" means the following amounts, less a utility allowance based on use of gas appliances and other fees and charges required to be paid by a tenant of the Affordable Housing Site on a non-optional basis: (i) for a 50% AMI Unit, a monthly rent that does not

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exceed one-twelfth of thirty three percent (33%) of fifty percent (50%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; and (ii) for a 80% AMI Unit, a monthly rent that does not exceed one-twelfth of thirty three percent (33%) of eighty percent (80%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; and (iii) for a 120% AMI Unit, a monthly rent that does not exceed one-twelfth of thirty three percent (33%) of one hundred twenty percent (120%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. “Affordable Unit” and “Affordable Units” are defined in Recital C. "Applicable Laws" means all applicable laws, ordinances, statutes, codes, orders, decrees, rules, regulations, official policies, standards and specifications (including any ordinance, resolution, rule, regulation, standard, official policy, condition, or other measure) of the United States, the State of California, the County of Sonoma, City of Healdsburg, or any other political subdivision in which the Project is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, Subdivider or the Project. "Area Median Income" or "AMI" means the median income for Sonoma County, California, adjusted for Actual Household Size, as determined by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development (“HCD”) in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). “City” means the City of Healdsburg, a California municipal corporation. “City Documents” means the Conditions of Approval and this Agreement. “City’s Authorized Representative” means the City Manager of the City of Healdsburg. “Claims” is defined in Section 10. “Conditions of Approval” is defined in Recital C. “Effective Date” means the date this Agreement is recorded in the Official Records of the County of Sonoma, State of California. “Eligible Household” means (i) for a 50% AMI Unit, a household for which gross household income upon initial occupancy does not exceed fifty percent (50%) of AMI, (ii) for a 80% AMI Unit, a household for which gross household income upon initial occupancy does not exceed eighty percent (80%) of AMI, and (iii) for a 120% AMI Unit, a household for which gross household income upon initial occupancy does not exceed one hundred twenty percent (120%) of AMI.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

9.A.b

“Inclusionary Housing Obligation” is defined in Recital C.

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9.A.b

“Indemnitees” is defined in Section 10.

“Party” or “Parties” respectively means City and Subdivider individually or collectively. “Project” is defined in Recital B. “Regulations” means Title 25 of the California Code of Regulations. “Subdivider” means Farmstand Project LLC, a California limited liability company. . 2. Use and Affordability Restrictions. Subdivider hereby covenants and agrees, for itself and its successors and assigns, that the Affordable Housing Sites shall be used solely for the operation of rental housing in compliance with the Conditions of Approval and the requirements set forth herein. Subdivider represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Subdivider covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City. 2.1 Affordability Requirements. For a term of fifty-five (55) years commencing upon the Effective Date, the Affordable Unit[s] on the Affordable Housing Site shall be [an 80% AMI unit; or one (1) 80% AMI unit and one (1) 120% AMI unit] that shall be rented at the applicable Affordable Rent to (or if vacant, available for occupancy by) Eligible Households that qualify as a; 80% AMI Household or120% AMI Household, as applicable. 2.2 Rents for Affordable Units. Rents for the [80% AMI Unit; or the 80% AMI Unit and the 120% AMI Unit] on the Affordable Housing Site shall be limited to the applicable Affordable Rent for Eligible Households. (a) If, upon recertification of the income of a tenant of an 80% AMI Unit, Subdivider determines that such tenant’s income has increased and exceeds the qualifying income for an 80% AMI Household, then upon the expiration of such tenant’s lease and following sixty (60) days’ notice, and if so permitted by local and state law, such tenant shall be required to vacate the 80% AMI Unit and Subdivider shall rent the 80% AMI Unit to an 80% AMI Household. (b) If, upon recertification of the income of a tenant of a 120% AMI Unit, Subdivider determines that such tenant’s income has increased and exceeds the qualifying income for a 120% AMI Household, then upon the expiration of such tenant’s lease and following sixty (60) days’ notice, and if so permitted by local and state law, such tenant shall be required to vacate the 120% AMI Unit and Subdivider shall rent the 120% AMI Unit to an 120% AMI Household. 2.3

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

“Marketing and Management Plan” is defined in Section 6.5.

Non-Discrimination; Compliance with Fair Housing Laws.

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2.3.1 Preference for Displaced and Local Residents. In order to ensure that there is an adequate supply of affordable housing within the City of Healdsburg for residents and employees of businesses within the City, to the extent permitted by Applicable Law, Subdivider shall give a preference in the rental of the Affordable Unit on the Affordable Housing Site to Eligible Households that include at least one member who has lived or worked in the City for the past three (3) consecutive years. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control if such provisions apply to the Affordable Unit on the Affordable Housing Site due to financing sources. 2.3.2 Fair Housing. Subdivider shall comply with state and federal fair housing laws in the marketing and rental of the Affordable Unit on the Affordable Housing Site. Subdivider shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.3.3 Non-Discrimination. Subdivider shall not restrict the rental, lease, use, occupancy, tenure or enjoyment of the Affordable Unit on the Affordable Housing Site, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Subdivider covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the rental, lease, use, occupancy, tenure or enjoyment of the Affordable Unit on the Affordable Housing Site or part thereof, nor shall Subdivider or any person claiming under or through Subdivider establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants or lessees, in, of, or for the Affordable Unit on the Affordable Housing Site or part thereof. Subdivider shall include such provision in all leases, contracts and other instruments executed by Subdivider, and shall enforce the same diligently and in good faith. All leases or contracts made or entered into by Subdivider, its successors or assigns, as to any portion of the Affordable Housing Site or the Affordable Unit thereon, shall contain the following language:

(a)

In leases, the following language shall appear:

“(1) The lessee herein covenants by and for the lessee and lessee’s heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

9.A.b

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9.A.b

“(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).” (b)

In Contracts pertaining to the management of the Affordable Unit on the Affordable Housing Site, the following language shall appear:

“There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land.” 3.

Reporting Requirements; Access to Information; Inspections.

3.1 Certification. Prior to the initial occupancy of the Affordable Unit on the Affordable Housing Site, and on every anniversary thereafter, Subdivider or its authorized agent shall obtain from the household occupying the Affordable Unit a written certificate containing all of the following in such format and with such supporting documentation as City may reasonably require: (i)

The identity of each household member; and

(ii)

The total gross household income;

Subdivider shall retain such certificates for not less than three (3) years, and upon City’s request, shall provide copies of such certificates to City and make the originals available for City inspection.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.

3.2 Annual Report; Inspections. By not later than March 31 of each year during the term of this Agreement, commencing with the year following the year of the Effective Date (reflecting information from the year of the Effective Date), Subdivider shall submit an annual

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report (“Annual Report”) to the City in form satisfactory to City, together with Subdivider’s certification that the Affordable Housing Site is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following information: (i) address of the Affordable Unit; (ii) number of bedrooms; (iii) current rent and other charges; (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total gross household income of residents; (vii) documentation of source of household income; and (viii) the information required by Section 3.1. Upon request of City, Subdivider shall allow City’s Authorized Representative to inspect and copy all records documenting the source of household income. Subdivider shall include with the Annual Report, an income recertification for the household, documentation verifying tenant eligibility, and such additional information as City may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by City. In addition to the information described above, the Annual Report shall include the following: (i)

An income and expense statement for the reporting period;

(ii) Proposed annual budget for the next fiscal year which sets forth Subdivider’s estimate of operating income, operating expenses and debt service for the year, amounts payable to reserves and proposed rent adjustments; (iii) A report on maintenance and other issues anticipated to affect the current budget needs of the Affordable Unit on the Affordable Housing Site as well as the amount in the reserve accounts and the amount expected to be needed for major repairs or other needs during the next fiscal year; and (iv) Information on the status of waiting list for the Affordable Unit on the Affordable Housing Site, including the number of households on the list and the number of persons on the list that meet the criteria set forth in Section 2.3.1. Subdivider shall provide City a copy of the annual financial audit of the books and records of Subdivider, prepared in accordance with generally accepted auditing standards by an independent certified public accountant, within thirty (30) days’ after completion. City may require the audit to be accompanied by a supplemental report prepared in accordance with City’s requirements. City may, from time to time request additional or different information, and Subdivider shall promptly supply such information in the reports required hereunder. 3.3.

Maintenance of Records.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

9.A.b

3.3.1 Subdivider shall maintain all records regarding any construction, maintenance or repair work undertaken on the Affordable Unit or the Affordable Housing Site for five (5) years after final payment. Subdivider shall also maintain tenant leases, income

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9.A.b

3.3.2 Records must be kept accurate and up-to-date. City shall notify Subdivider of any records it deems insufficient. Subdivider shall have thirty (30) calendar days from such notice to correct any specified deficiency in the records, or, if more than thirty (30) days shall be reasonably necessary to correct the deficiency, Subdivider shall begin to correct the deficiency within thirty (30) days and diligently pursue the correction of the deficiency as soon as reasonably possible. 3.4

Access to Records; Inspections.

3.4.1 Subdivider shall provide City and its authorized agents and representatives reasonable access to any books, documents, papers and records of the Affordable Unit on the Affordable Housing Site for the purpose of making audits, examinations, excerpts and transcriptions, during normal business hours of the Subdivider and upon not less than three (3) business days’ prior written notice. 3.4.2 With 48 hours’ notice, during normal business hours and as often as may be deemed necessary, City and its authorized agents and representatives shall be permitted access to and the right to examine the Affordable Unit and the Affordable Housing Site and to interview tenants and employees of the Subdivider, for the purpose of verifying compliance with applicable regulations and compliance with the conditions of this Agreement and the other City Documents. 4.

Term of Agreement.

4.1 Term of Restrictions. This Agreement shall remain in effect until the date that is fifty-five (55) years after the Effective Date. 4.2 Effectiveness Succeeds Conveyance of Affordable Housing Site. This Agreement shall remain effective and fully binding for the full term hereof, regardless of any sale, assignment, transfer, or conveyance of the Affordable Housing Site or any part thereof or interest therein. 4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the Term. 5. Binding Upon Successors; Covenants to Run with the Land. Subdivider hereby subjects its interest in the Affordable Housing Site to the covenants and restrictions set forth in this Agreement. The City and Subdivider hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Subdivider and City, regardless of any sale, assignment, conveyance or transfer of the Affordable Housing Site or any part thereof or interest therein. Any successor-ininterest to Subdivider, including without limitation any purchaser, transferee or lessee of the

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

certifications and other matters related to the leasing of the Affordable Unit on the Affordable Housing Site for a period of five (5) years after the final date of occupancy by the tenant.

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Affordable Housing Site (other than the tenants of the Affordable Unit on the Affordable Housing Site) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, lease or other instrument affecting or conveying the Affordable Housing Site or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, lease or other instrument. If any such contract, deed, lease or other instrument has been executed prior to the date hereof, Subdivider hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Subdivider agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Affordable Housing Site in favor of City. 6.

Project Construction; Property Management; Repair and Maintenance; Marketing.

6.1 Management Responsibilities. Subdivider shall be responsible for all management functions with respect to the Affordable Unit and Affordable Housing Site, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for construction, rehabilitation, management, repair, maintenance or marketing of the Affordable Unit on the Affordable Housing Site. 6.2 Management Entity. City shall have the right to review and approve the qualifications of the management entity proposed by Subdivider for the Affordable Unit on the Affordable Housing Site, and shall have the right to review and approve any agreement executed between Subdivider and the management entity, which approval shall not be unreasonably withheld. The contracting of management services to a management entity shall not relieve Subdivider of its primary responsibility for proper performance of management duties. City hereby approves Subdivider as the initial management entity for the Affordable Unit on the Affordable Housing Site. Any subsequent management entity shall be subject to City review and approval, which shall not be unreasonably withheld or delayed, provided said management entity shall have at least five (5) years' experience in the operation and management of similar size rental housing developments, and at least three (3) years’ experience in the operation and management of rental housing developments containing below-market-rate units, without any record of material violations of discrimination restrictions or other Applicable Laws. Upon City determination and delivery of written notice to Subdivider that Subdivider has failed to operate the Affordable Unit on the Affordable Housing Site in accordance with this Agreement, City may, subject to any applicable cure period, require Subdivider to contract with a qualified management agent selected by City to operate the Affordable Unit on the Affordable Housing Site, or to make such other arrangements as City deems necessary to ensure performance of the required functions.

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

9.A.b

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6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Subdivider shall at its own expense, maintain the Affordable Unit on the Affordable Housing Site in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with Applicable Laws. Without limiting the foregoing, Subdivider agrees to maintain the Affordable Unit on the Affordable Housing Site (including without limitation, the landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Affordable Unit and the Affordable Housing Site. Subdivider shall prevent and/or rectify any physical deterioration of the Affordable Unit on the Affordable Housing Site and shall make all repairs, renewals and replacements necessary to keep the Affordable Housing Site and the Affordable Unit located thereon in good condition and repair. Subdivider shall provide adequate security measures for the Affordable Unit on the Affordable Housing Site, including without limitation, the installation of adequate lighting and deadbolt locks. 6.3.1 Additional Requirements. All construction, maintenance and repair work and professional services for the Affordable Unit or the Affordable Housing Site shall be performed by persons or entities licensed or otherwise authorized to perform the applicable work or service in the State of California and shall have a current City of Healdsburg business license if required under local law. To the extent allowed by Applicable Law, Subdivider shall limit the installation of satellite dish, antenna and other such equipment to screened locations on the Affordable Housing Site as approved by the City. Subdivider shall diligently work to resolve complaints related to noise, parking, litter or other neighborhood concerns. 6.4 City’s Right to Perform Maintenance. In the event that Subdivider breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), or such additional time as is reasonably required to rectify the condition, then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Affordable Housing Site and perform all acts and work necessary to protect, maintain, and preserve the Affordable Unit and the Affordable Housing Site. All reasonable costs expended by City in connection with the foregoing shall be paid by Subdivider to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall bear interest at the lesser of 8% per annum or the highest rate permitted by Applicable Law. City shall have a lien against the Affordable Housing Site for the amount of such unpaid sums and shall have the right to record a Notice of Claim of Lien against the Affordable Housing Site. 6.5 Marketing and Management Plan. Concurrently with the execution of this Agreement by the Parties, Subdivider shall submit for City review and approval, a plan for marketing and managing the Affordable Unit and the Affordable Housing Site (“Marketing and Management Plan” or “Plan”). The Marketing and Management Plan shall address in detail how the Subdivider plans to market the Affordable Unit to prospective Eligible Households in accordance with fair housing laws and this Agreement, Subdivider’s tenant selection criteria, and how Subdivider plans to certify the eligibility of Eligible Households. The Plan shall also OAK #4818-7069-4979 v4

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describe the management team and shall address how Subdivider and the management entity plan to manage and maintain the Affordable Unit and the Affordable Housing Site. The Plan shall include the proposed management agreement, if any, and the form of rental agreement that Subdivider proposes to enter into with tenants of the Affordable Unit. Subdivider shall abide by the terms of the Marketing and Management Plan in marketing, managing, leasing and maintaining the Affordable Unit and the Affordable Housing Site, and throughout the term of this Agreement, shall submit proposed material modifications to City for review and approval. In addition to the foregoing, the Marketing and Management Plan shall address the following: (a) The actions to be taken by Subdivider to affirmatively market the Affordable Unit on the Affordable Housing Site in compliance with fair housing laws and in compliance with City’s policies and procedures, including the policies described in Section 2.3 above; (b) Criteria for determining tenant eligibility, including certification of household income and size, and establishing reasonable occupancy standards (which shall not exceed standards established by state and federal fair housing laws and state housing and building codes) and procedures for screening prospective tenants, including obtaining credit reports, unlawful detainer reports, landlord references, and criminal background investigations; (c) A requirement that Eligible Households be selected based on order of application, lottery or other reasonable method; (d) A requirement that Eligible Households be notified of eligibility and be provided an estimate regarding when the Affordable Unit may be available; (e) ineligibility;

A requirement that ineligible applicants be notified of the reason for their

(f) Specific procedures through which applicants deemed to be ineligible may appeal this determination; (g)

Maintenance of a waiting list of Eligible Household applicants;

(h) Specific procedures for obtaining documentation regarding prospective tenants’ incomes, as necessary, to certify that such income does not exceed income limits; (i) Specific procedures for certification and recertification of household incomes and procedures for handling over-income tenants;

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

9.A.b

(j) A requirement that a written rental agreement (subject to City approval) be executed with each Eligible Household selected to occupy an Affordable Unit;

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(l) A requirement that there be no storage on balconies and patios and that tenants must keep all balconies, patios and other exterior areas neat, clean and clutter free, including no clotheslines or laundry; further, vehicles shall be parked in garages and driveways and shall not be parked, placed or stored in, on or upon landscaped areas; (m) Procedures for maintenance and management of the Affordable Unit on the Affordable Housing Site; (n)

Procedures for dealing with tenant or neighborhood issues or concerns;

(o) Procedures for maintaining a reserve account, budgeting for maintenance and repair needs as well as long-term rehabilitation needs and handling net cash flow; and (p) appropriate.

Such other requirements and criteria/procedures as City may determine

6.6 Approval of Amendments. If City has not responded to any proposed amendment or change to the Management and Marketing Plan within sixty (60) days following City’s receipt of such amendment, the amendment shall be deemed approved by City. 6.7 Fees, Taxes, and Other Levies. Subdivider shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Affordable Housing Site, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Subdivider shall not be required to pay any such charge so long as (a) Subdivider is contesting such charge in good faith and by appropriate proceedings, (b) Subdivider maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Subdivider immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. Subdivider shall not apply for exemption from the payment of real or personal property taxes on the Affordable Unit or the Affordable Housing Site; provided, however, the Subdivider shall have all rights under Applicable Law to appeal the valuation of the Affordable Unit or the Affordable Housing Site (including but not limited to any improvements, fixtures or appurtenances, and any personal property) for tax purposes. 6.8 Insurance Coverage. Throughout the term of this Agreement Subdivider shall comply with the insurance requirements set forth in Exhibit B, and shall, at Subdivider’s expense, maintain in full force and effect insurance coverage as specified in Exhibit B. 6.9 Property Damage or Destruction. If any part of the Affordable Unit or the Affordable Housing Site is damaged or destroyed, Subdivider shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable, OAK #4818-7069-4979 v4

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

(k) A detailed listing of reasonable rules of conduct and occupancy which shall be in writing, shall be consistent with federal and state law, and shall be provided to each tenant upon occupancy of an Affordable Unit;

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7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of the County of Sonoma, State of California. Subdivider hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, which consent may be withheld in City’s sole discretion, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Affordable Housing Site. 8.

Transfer and Encumbrance.

8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Subdivider shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease, of the whole or any part of the Affordable Housing Site, or the Affordable Unit located thereon (collectively, “Transfer”) without the prior written consent of the City, which approval may be withheld in City’s sole discretion. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of access to facilitate the construction of improvements on the Affordable Housing Site; or (ii) the lease of the Affordable Unit to Eligible Households for occupancy as their principal residence in accordance with this Agreement. 8.3 Requirements for Proposed Transfers. City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Affordable Housing Site, the Affordable Unit or part thereof if all of the following requirements are met (provided however, the requirements of this Section 8.3 shall not apply to Transfers described in clauses (i) or (ii), of Section 8.2): (i) The proposed transferee demonstrates to City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by City to competently manage the Affordable Unit on the Affordable Housing Site and to otherwise fulfill the obligations undertaken by Subdivider under this Agreement. (ii) Subdivider and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the Affordable Unit, the Affordable Housing Site or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request. (iii) The proposed transferee shall expressly assume all of the rights and obligations of Subdivider under this Agreement and the Conditions of Approval arising after the effective date of the Transfer and all obligations of Subdivider arising prior to the effective date of the Transfer (unless Subdivider expressly remains responsible for such obligations) and shall

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Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible.

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(iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records of the County of Sonoma, State of California. Consent to any proposed Transfer may be given by the City’s Authorized Representative unless the City’s Authorized Representative, in his or her discretion, refers the matter of approval to the City Council. If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Subdivider, the proposed Transfer shall be deemed approved. 8.4 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of the Affordable Unit or the Affordable Housing Site shall be deemed to relieve Subdivider or any other party from any obligation under this Agreement. It shall be an Event of Default hereunder if without the prior written approval of the City, Subdivider assigns or Transfers this Agreement, the Affordable Unit, or the Affordable Housing Site in violation of Section 8 and the subsections thereof. 8.5 Recovery of City Costs. Subdivider shall reimburse City for all City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within thirty (30) days following City’s delivery to Subdivider of an invoice detailing such costs. 8.6 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon the Affordable Housing Site, and the purchaser at any trustee’s sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee’s sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Affordable Housing Site that such violation has occurred. 9.

Default and Remedies.

9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (i)

The occurrence of a Transfer in violation of Section 8 hereof;

(ii) Subdivider’s failure to maintain insurance on the Affordable Housing Site as required hereunder, and the failure of Subdivider to cure such default within five (5) days;

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

agree to be subject to and assume all of Subdivider’s obligations pursuant to the restrictions set forth in this Agreement.

(iii) Subject to Subdivider’s right to contest the following charges, Subdivider’s failure to pay taxes or assessments due on the Affordable Unit or Affordable

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(iv) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Affordable Housing Site and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (v) Subdivider fails to comply with the Conditions of Approval and such failure remains uncured beyond the expiration of any applicable cure period; (vi) Subdivider’s default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Section 9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for fifteen (15) days in the event of a monetary default or thirty (30) days in the event of a non-monetary default following the date upon which City shall have given written notice of the default to Subdivider, or if the nature of any such non-monetary default is such that it cannot be cured within thirty (30) days, Subdivider’s failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith. 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies: (i) Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; (ii) For violations of obligations with respect to Affordable Rent for the Affordable Unit on the Affordable Housing Site, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; (iii). in equity.

Pursue any other remedy allowed under the City Documents or at law or

Each of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under Applicable Law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement. 10. Indemnity. Subdivider shall indemnify, defend (with counsel approved by City) and hold the City and its elected and appointed officers, officials, employees, agents, consultants, contractors and representatives (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine,

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Housing Site or failure to pay any other charge that may result in a lien on the Affordable Housing Site, and Subdivider’s failure to cure such default within twenty (20) days of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to foreclose thereon;

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order, and damage (all of the foregoing collectively “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Subdivider’s management, marketing, evaluation and determination of an Eligible Household, leasing, maintenance, repair or operation of the Affordable Unit or Affordable Housing Site or any failure to perform any obligation as and when required by this Agreement. Subdivider’s indemnification obligations under this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement. City does not and shall not waive any rights against Subdivider that it may have by reason of any indemnity and hold harmless provision set forth in this Agreement because of the acceptance by City, or the deposit with City by Subdivider, of any of the insurance policies described in this Agreement. 11.

Miscellaneous.

11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties. 11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or Applicable Law. No failure or delay by City at any time to require strict performance by Subdivider of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election. 11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All such notices shall be sent by: (a)

personal delivery, in which case notice is effective upon delivery;

(b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (c) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (d) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient’s time or on a nonbusiness day;

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(e) electronic transmission (email), in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by firstclass or certified mail or by overnight delivery. Any notice given by email shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient’s time or on a nonbusiness day.

City:

City of Healdsburg 401 Grove Street Healdsburg, CA 95448 Attention:CityManager Fax:707-431-3321 Email: [email protected]

Subdivider:

Farmstand Project LLC [Address] [City, State, Zip Code] Attention: ___________________ Fax: ________________________ Email: ______________________

11.4 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 11.5 Parties Not Co-Venturers; Independent Contractor; No Agency Relationship. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. The relationship of Subdivider and City shall not be construed as a joint venture, equity venture, partnership or any other relationship. City neither undertakes nor assumes any responsibility or duty to Subdivider (except as expressly provided in this Agreement) or to any third party with respect to the Affordable Unit or the Affordable Housing Site. Subdivider and its employees are not employees of City but rather are, and shall always be considered independent contractors. Furthermore, Subdivider and its employees shall at no time pretend to be or hold themselves out as employees or agents of City. Except as City may specify in writing, Subdivider shall not have any authority to act as an agent of City or to bind City to any obligation. 11.6 Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City’s Authorized Representative or by any person who shall have been designated by the City’s Authorized Representative, without further approval by the City Council.

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11.7 Non-Liability of City and City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Subdivider or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Subdivider or its successor or for any obligation of City under this Agreement. 11.8 Headings; Construction; Statutory References. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. All references in this Agreement to particular statutes, regulations, ordinances or resolutions of the United States, the State of California, or the City of Healdsburg shall be deemed to include the same statute, regulation, ordinance or resolution as hereafter amended or renumbered, or if repealed, to such other provisions as may thereafter govern the same subject. 11.9 Agreement.

Time is of the Essence. Time is of the essence in the performance of this

11.10 Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Sonoma County, California or in the Federal District Court for the Northern District of California. 11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action. 11.12 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. 11.13 Entire Agreement; Exhibits. This Agreement contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibit A and Exhibit B, attached hereto are incorporated herein by this reference. 11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGE(S).

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CITY: CITY OF HEALDSBURG, a municipal corporation

By:

_______________________________ David Mickaelian, City Manager

ATTEST:

By: _____________________________ Maria Curiel, City Clerk

APPROVED AS TO FORM:

By: _____________________________ Samantha Zutler, City Attorney

SUBDIVIDER: FARMSTAND PROJECT LLC, a California limited liability company By: Name: Its:

SIGNATURES MUST BE NOTARIZED.

Attachment: Draft Inclusionary Agreement Farmstand 2-5-18 (1853 : Approval of Inclusionary Housing Agreement)

IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

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9.A.b

STATE OF CALIFORNIA

) )

COUNTY OF SONOMA

)

On , 20__, before me, ______________________, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _______________________________ (Seal) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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STATE OF CALIFORNIA COUNTY OF SONOMA

) ) )

On , 20__, before me, ______________________, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _______________________________ (Seal)

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The real property situated in the City of Healdsburg, County of Sonoma, State of California, described as follows: [This legal description shall describe the particular Affordable Housing Site against which the Agreement is recorded.]

APN: _______________

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Exhibit A

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Exhibit B

Subdivider, at its sole cost and expense, commencing upon the Effective Date and continuing throughout the Term of this Agreement (except as otherwise specified below) shall keep and maintain in full force and effect policies of insurance pursuant to and in accordance with the requirements set forth in this Exhibit B: (a) Subdivider and all contractors working on behalf of Subdivider on the Affordable Housing Site shall maintain a commercial general liability policy in the amount of Two Million Dollars ($2,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate coverage, or such other policy limits as City may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) Subdivider and all contractors working on behalf of Subdivider on the Affordable Housing Site shall maintain comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for ‘any auto’. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Subdivider and all contractors working on behalf of Subdivider on the Affordable Housing Site shall, at their sole cost and expense, maintain Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly by Subdivider or contractor. The Statutory Workers’ Compensation Insurance coverage must be for Statutory Limits, and Employer’s Liability Insurance must be provided with limits of not less than One Million Dollars ($1,000,000.00) per occurrence. The insurance must be endorsed to waive all rights of subrogation against the City and Indemnitees for loss arising from or related to the work done by such person. (d) Subdivider shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Affordable Unit with deductible, if any, in an amount acceptable to City, naming City as a loss payee. (f) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Property insurance shall name City as loss payee. (g) Prior to occupancy of the Affordable Unit by an Eligible Household, Subdivider shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non-renewal of the coverage at

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INSURANCE REQUIREMENTS

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The additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94. Upon request by City’s Risk Manager, Subdivider shall provide or arrange for the insurer to provide within thirty (30) days of the request, certified copies of the actual insurance policies or relevant portions thereof. (h) If any insurance policy or coverage required hereunder is canceled or reduced, Subdivider shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Subdivider’s expense, and Subdivider shall promptly reimburse City or such expense upon receipt of billing from City. (i) Coverage provided by Subdivider shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. Subdivider shall furnish the required certificates and endorsements to City prior to the commencement of occupancy of the Affordable Unit by an Eligible Household, and shall provide City with certified copies of the required insurance policies upon request of City. (j) Any deductibles or self-insured retentions shall be declared to, and be subject to approval by, City’s Risk Manager. At the option of and upon request by City’s Risk Manager if the Risk Manager determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects the Indemnitees or Subdivider shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. (k) The limits of the liability coverage and, if necessary, the terms and conditions of insurance, shall be reasonably adjusted from time to time (not less than every five (5) years after the Effective Date nor more than once in every three (3) year period) to address changes in circumstances, including, but not limited to, changes in the purchasing power of the dollar and the litigation climate in California. Within thirty (30) days following City’s delivery of written notice of any such adjustments, Subdivider shall provide City with amended or new insurance certificates and endorsements evidencing compliance with such adjustments.

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least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal.

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9.B

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Authorized Positions Listing Update

PREPARED BY:

Heather Ippoliti, Assistant City Manager

STRATEGIC INITIATIVE(S): Effective & Efficient Government Fiscal Responsibility

RECOMMENDED ACTION(S): 1. Adopt a Resolution amending the fiscal year 2017-18 budget for staffing changes; and 2. Adopt a Resolution rescinding Resolution No. 126-2017 and reestablishing the Authorized Positions Listing

BACKGROUND: The last authorized positions listing was adopted by Council on December 18, 2017. In December, the executive Team met offsite for a facilitated discussion to look at ways we could better address the organization’s business and structural needs. We discussed opportunities to better align the needs of the community and organization with our current resources. In 2015, when the Community Housing and Development Director position was established, the Administrative Services Director responsibilities were assigned to the Assistant City Manager. The responsibilities of Administrative Services Director include Finance, Human Resources, Utility Billing, Fleet Maintenance, Building Maintenance, Corporation Yard Administration, Contracts and Risk Management. DISCUSSION/ANALYSIS: In light of the changing service demands of the City and discussions at the Executive Team Retreat, staff is proposing changes to the authorized positions listing. In summary, the proposed changes include the following:

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City Manager’s Office  unfunding the Community Housing and Development Director position;  upgrading the Housing Analyst position to a Housing Administrator Administrative Services Department  adding an Administrative Services Director position;  adding an Human Resources Manager position;  adding a IT Systems Engineering Specialist position; and  upgrading the IS Network Technician position to a IT Systems Engineering Specialist With the elimination of the Community Housing and Development Director position, the responsibility for developing programs and addressing all matters related to affordable housing and homeless services will fall to the Housing Administrator. By upgrading the Housing Analyst position to an Administrator, work previously assigned to the Director may be taken on by the Administrator. This position will report directly to the Assistant City Manager. The oversight of the City’s finances is a priority. It’s not possible for one person to serve as both the Administrative Services Director and the Assistant City Manager proficiently. Pulling the functions of Administrative Services from the City Manager’s office will create opportunities to enhance internal service delivery and insure proper oversight of the City’s finances. The City has been operating with one staff person focused on Human Resources for some time. The City’s size and complexity lends itself to a larger division, and therefore, there are unmet needs Citywide. For example, the Town of Windsor has approximately 103 full-time staff, and their HR department has four positions, including a Director. The City of Healdsburg employs 32 additional full-time staff, with an electric utility and in-house public safety. The HR Manager as proposed will take the lead on employee engagement, workforce development, succession planning, and compliance with federal/state employment laws and regulations. In August, when the City’s former Information Services (“IS”) Coordinator vacated her position, the City hired Laura Tredinnick as the Interim Information Systems Manager to assess the overall performance of the IS division and prepare a report with her findings and recommendations to improve IS services. Prior to working with the City of Healdsburg, Ms. Tredinnick had retired from the City of Santa Rosa as their IS Manager. Ms. Tredinnick’s report is attached. It was clear in her assessment that the City lacked the resource capacity to address all the City’s IS needs. Her recommendation, which staff concurs, is to upgrade the current IS Network Technician to a more senior position and add an additional senior position. The proposed title is IT Systems Engineering Specialist. By doing so, efficiencies will improve and the City’s reliance on an outside IT consulting firm for operations will diminish, with an approximate savings of $85,000 per year. Staff still foresees the need to utilize outside firm(s) for project based work. The City is behind in many technology projects and will need a higher level of staffing to complete those projects.

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No employees will lose their employment with the City as part of this reorganization. ALTERNATIVES: The current service demands require an increase in resources. If the Council chooses to not adopt the proposed resolutions, staff requests additional direction. FISCAL IMPACT: The net annual impact to the budget of the proposed organization changes is estimated at $301,613 (FY 2017-18 $26,607). The General Fund portion is $28,443 (FY 2017-18 $2,509), the Wastewater Fund portion is $47,903 (FY 2017-18 $4,226), the Water Fund’s portion is $38,472 (FY 2017-18 $3,394), the Electric Fund portion is $77,778 (FY 2017-18 $6,681) and the Community Services Fund portion is $33,101 (FY 2017-18 $2,920). All funds share in the costs as a percent to whole depending on the position. For example, the IT positions are allocated based on total IS service fees, the HR Manager is allocated based on the payroll budget, and the Administrative Services Director is allocated based on the funds overall budget. In future years, the cost of contracted services in the Information Services Fund will be reduced by approximately $85,000 due to the reduced reliance on outside services. ENVIRONMENTAL ANALYSIS: Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment. ATTACHMENT(S): Assessment Report prepared by Laura Tredinnick 122017 Resolution - Authorized Positions Exhibit A - Authorized Positions Resolution - Budget Amendment Exhibit A - Budget Amendment

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CITY OF HEALDSBURG Finance – Information Systems

David Mickaelian Heather Ippoliti 401 Grove Street Healdsburg, CA 95448 December 12, 2017 Dear David and Heather; As the Interim Information Systems Manager, I have been conducting an assessment of Information Systems as requested by you both, as well as supervising the staff Network Technician and the work done by outside contractor, Portola Systems. As part of my research, I held customer service meetings with representatives of all departments to assess the level of satisfaction with current services, uncover unmet needs and discuss future needs. The results of this assessment, along with recommendations are in the attached report. I have included a dashboard style rating system in my assessment, using: Red for Critical Need; Yellow for Needs Attention; Green for Working Well. It may be most helpful to focus immediately on the four areas identified as Critical Need: 1. Staffing 2. Cell Phones 3. Computerized Maintenance (and Asset) Management System (CMMS) 4. Document Management. These areas are annotated in red in the attached report and I am available to elaborate on each of them at your convenience. It has been my pleasure meeting and working with various levels of staff here at the City. I hope that this assessment can be used as a roadmap to assist you as your budget and planning cycle commences.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

401 Grove Street Healdsburg, CA 95448-4723 Phone (707) 431-3311

Sincerely yours,

Laura Tredinnick, Interim Information Systems Manager

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Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

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2|Page

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Information Systems Assessment City of Healdsburg

Table of Contents

Customer Service Assessment ............................................................................ 4 Future Wants/Needs by Department .................................................................. 6 General Infrastructure Assessment..................................................................... 7 Recommendations ............................................................................................ 11 Job Description Examples ................................................................................. 14

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Conducted October-December 2017 By Laura Tredinnick

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This assessment was made after meeting with: City Manager's Office: David Mickaelian, Rhea Borja Building and Planning: Maya DeRosa, Shawn Sumpter Community Services: Mark Themig, Anna Barnes-Grant, David Jahns, Jaime Licea, Garrett Perdiago Finance: Katherine Ahlborn, Elizabeth Garcia Fire: Jason Boaz Public Works: Brent Salmi, Jarrod Dericco, Tyler Kettman Utilities: Terry Crowley, Todd Woolman. These meetings resulted in the following general and specific comments. General comments are in the first section, department-specific comments are in the second section and future needs are in the third section. Some common themes were identified in the customer service meetings: • A universal belief that Information Systems (IS) is understaffed and can only meet basic needs; • General satisfaction with the support received from IS, factoring in staffing levels; • A high level of frustration as not being able to perform simple tasks as the user level, such as applying software updates, and having to wait long periods for the updates to be done by IS1; • Frustration at the long wait times for new systems to be configured and delivered; • GIS is an important system to most departments and greater access is desired 2; • Departments liked having the Tech Group, with representatives from each department; • A belief that the IS staff was competent and capable; • Across the board dissatisfaction with the usability and reliability of the hardened Kyocera phones currently used; • Most people referred to the group as “IT”3; • People are used to entering their own Helpdesk tickets and liked having that option, however, they do not want all communication to occur in the ticket. Other information uncovered: • Systems have been implemented by departments without oversight by IS due to low levels of IS staffing. Examples are: the recent Shoretel phone system at the Police Department and the CMMS System (Computerized Maintenance (and Asset) Management System) at the treatment plant. This system is working at the plant, but staff have been in the process of implementing this system for other water and

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Customer Service Assessment

1

See Staffing recommendation and GIS Scope recommendation See Staffing recommendation 3 See Naming recommendation 2

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• • •

• • • • •

electrical asset management and maintenance for the past two years with no success. 4 This is a highly needed type of system. Independent systems such as this one may serve an individual work group’s immediate need, but can create serious problems when ongoing support is needed. The IT Pipes project (video recording of water and sewer pipes) is another application unsupported by IS. IT Pipes data is partially being stored (131 Gb) on an external hard drive connected to a laptop. The other 3 Gb of data is being stored on a city fileserver.5 ArcGIS open licensing has been helpful to Building and Planning. The inventory system in the Tyler Incode product is not meeting the needs of Water or Electrical, in fact, the reporting of reorder points has created more work and entering inventory disbursements is clumsy.6 There is a feeling that we are way behind with technology and that there is a lack of progressive action (e.g. little use of Instant Messaging, clunky door lock technology, behind in version of MS Office, few electronic approvals in applications, no use of something like “Virtual Desktop” where users have the same desktop look and feel no matter where they sign on). There is a need for corporate WiFi, especially as more managers have laptops which they wish to use in meetings.7 Some departments felt that IT decisions are made without input from users. An example that was cited was the selection of Incode. When tickets get assigned to Portola Systems, they seem to go into a black hole (Police has the most experience with this besides IS). Few applications use single sign-on making users sign in multiple times. Shared file system is hard to find documents in, so users just use their own storage place, resulting in multiple copies of the same document.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

9.B.a

4

See Staffing recommendation See Data Storage recommendation 6 See Citywide Asset Management recommendation 7 See Network Assessment area 5

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City Manager’s Office 1. Needs a method for exchanging documents and allowing input on them with community partners (something like Microsoft Teams or Slack). Building and Planning 1. Connect Energov documents (permits, inspections) to parcel data (GIS). Current APN data is static data only; 2. An interactive planning counter with touchscreen capability for public use; 3. Electronic handouts; self-service and email; 4. Better public outreach such as My Sidewalk and Mind Mixer. It is unknown if we own Mind Mixer and if so, if it is tied to the website. Community Services 1. Needs new recreation software to handle class registrations, field reservations and facilities reservations; 2. Would like to use the Accela platform for Commission agenda packets 3. Would like to use the existing Electronic Document Management System (EDMS) for related documents; 4. Needs a Computerized Maintenance (and Asset) Management System (CMMS) connected to GIS; Finance 1. Standard Microsoft Office Installation – Katherine Ahlborn and Elizabeth Garcia have different versions; 2. Needs scanning into Tyler Content Manager and Northstar Utility Billing. Fire 1. Needs wireless access at the Fire Station a. Note: This should be resolved with the completion of the wireless project by Portola. Public Works 1. Needs more field access for inspections; 7-8 additional tablets; 2. Needs CMMS system for Water, Wastewater and Storm Drains. Utilities 1. Needs more tablets in the field; 2. Needs more GIS access on mobile platform; 3. New Utility Billing system which includes Smart Meter reading and can accommodate time of use billing and net metering; 4. Needs CMMS system for Electrical; 5. Needs to have historical documents, plans, maps scanned.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Future Wants/Needs by Department

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Staffing Assessment: Both the IS Network Technician and the GIS Specialist are knowledgeable and capable in their assignments. The IS Network Technician has a good understanding of the network setup and concepts, developed as a result of building the system from the ground up along with a former IS Manager. The GIS Specialist has experience using various software packages in former jobs. The GIS part of the IS group is adequately staffed. 8 The desktop and network support is grossly understaffed. If the new IS manager is tasked with network and server support, then it is likely that the project management area will be understaffed as well. The Public Works and Utilities Departments are also understaffed in technology support. At this point managers (Jarrod Dericco) and an Instrumentation Technician (Rich McMahon) are attempting to implement new technology along with their regular duties, and in the case of CMMS and GIS integration are not reaping the results they need in a timely manner. 9 The SCADA and CMMS systems at the Treatment Plant are essential systems which are being managed by an Instrumentation Technician. Network Assessment: The current AT&T Network on Demand project will bring the network up to the same standard in most locations, with a fiber connection to all sites except the Treatment Plant and wireless backup connection in all sites except the Fire Department and the Treatment Plant. This upgraded network will allow for the implementation of city-wide Voice Over IP (VOIP) phone technology. Switches and routers are monitored and can be connected to and configured remotely. Portola Systems’ wireless plan includes a corporate WiFi network component using a radius server which will verify approval for the device as well as the user. This is a much more secure solution than using the public WIFIHEALDSBURG for conducting City business. Server Assessment: There are some issues in the server area: • There are still three servers running Windows Server 2003. This software was first replaced by Windows Server 2008 in 2008 and by newer versions in 2012 and 2016. The operating system is no longer eligible for updates or support.

8 9

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

General Infrastructure Assessment

See GIS scope recommendation See Staffing recommendation

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Information Systems Tools: The Information Systems staff has the tools they need to do their jobs efficiently. There are network, storage, power, backup and domain alert systems in place that allow for proactive action to be taken when set thresholds are reached or normal activities are not completed properly (e.g. failed backups). They also have tools to remotely connect with users’ computers and perform software, bios and driver repairs remotely. The BigFix tool can be used to send out software updates to multiple computers at one time. New computers can be setup using imaging software. The former coordinator was on a path to implement a new Helpdesk software, Solarwinds, in order to produce metrics. At the current staffing levels, metrics are next to useless. Staff is completely overwhelmed by the amount of work to be done. There is also a question about the usability of the automated equipment catalog in that it inventories equipment, but does not create relationships between user and equipment or other equipment used in the same setup.10 Desktop Assessment: The current 5-year replacement schedule in place is standard for office operations. Engineers doing CAD drawings may need more frequent upgrades, but that was not mentioned as an issue in my department discussions. There are issues with graphics displays on both workstations where GIS is heavily accessed. Work is being done to investigate and resolve these issues. The proliferation of dual monitors is unusual in normal office situations. Switching between windows is standard practice. This is an area where money could be saved. Printer Assessment: Printers and printer/copiers are being used efficiently by being located in general office areas. Cell Phone Assessment: A switch from the Kyocera Duraforce Pro phones is needed for all but a few field staff. There are problems with: • viewing attachments • phones “freezing,” causing the dialer to not work • messenger not working for phone numbers entered by the user • quality of photos • poor vibration when in vibrate mode 10

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Storage Assessment The current Nimble Storage device has sufficient space and is replicated to the device at the Police Department.

See Helpdesk software recommendation

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phones unlocking while in pockets, causing unwanted calls to be made.

Application Software Assessment Most complaints heard were about the Tyler Incode software and its Parallels component. The warehouse inventory part of the system is difficult to use and some functionality has been lost in the reorder area.12 No other software was mentioned as an issue. The Microsoft Office 2016 rollout is a large upcoming project which will require staff time and some training. The Tech Group reps should be given responsibility for training in their departments after undergoing a “Train the Trainer session.” Currently Office 2016 is installed on single workstations to deal with issues in the current Office environment, resulting in people sitting next to each other using different versions with different functions. The current recreation software, ActiveNet, is outdated and needs to be replaced. The City’s website is fairly easy to update, but staff feel there is a need for a new look and feel and some rearrangement of content to make it easier to find things. There is a need to add the Board and Commission packets to the Accela platform and use the EDMS system for related documents. Community Services expressed great interest in moving forward with this. There is no city-wide CMMS system. A City is a collection of assets and this type of system is critical in efficiently cataloging and maintaining assets. CMMS Assessment (Computerized Maintenance Management System) Outside of the treatment plant’s ERPortal software, there is no CMMS system. This is critically needed by Water, Storm Water, Wastewater, Parks, Electrical and Facilities.

Mobile Computing Assessment Currently there are three tablets in use in the field. There is a need for much more mobile computing in Public Works, Utilities and Parks. The BYOD (bring your own device) Project and Mobile Device Management Policy needs to be completed. Implementing this will be dependent on completing the Wireless Project being run by Portola and installing a radius server.

11 12

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Supervisors should make the determination as to need.11

See cell phone recommendation See Incode reccomendation

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Portola Assessment • Once assigned to Portola Systems, tickets often seem to fall into a “black hole” and take far too long to complete satisfactorily. Examples are: voicemail to email connection at the Police Department, requests for information, request to grant view access to switches and routers and a request by management to change OU permissions. • Time is wasted by IS staff in recurring follow-ups on the same issues multiple times. • Communication is mostly done in the form of comments in tickets, when a brief conversation would be much more effective. • When communication occurs it is usually good. • Meetings with Portola Manager have been productive, however, the last one was missed with no explanation given. • The plans for large projects are good in concept, however, timelines and targets (e.g. Wireless project)13 have not been provided. • • •

13

Document/Records Management Currently only the City Clerk has filing access to the Document/Records Management System (EDMS). Multiple departments have a need for digital storage and cataloging of records and drawings, e.g. Finance, Planning and Building, and Public Works. Business License documents and many others need to be attached to GIS database.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

9.B.a

See Use of Portola recommendation

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Staffing • Add a Senior IT Technician (see job spec attached) to IS group, responsible for network and server support and technology implementation. • Add a Business Analyst position, similar to Santa Rosa’s Department Technology Coordinator (see job spec attached) or Riverside’s Senior Innovation and Technology Analyst (job spec attached) to Utilities/Public Works/Parks Departments to implement a Computerized Maintenance (and Asset) Management System for Utilities, Public Works and Parks along with managing the IT Pipes system and integrating it with GIS. • Allow Tech Group members to have Administrative Privileges under a second login so that they can install easy fixes, like updates or new software versions in their own departments. This is probably the most effective staffing change that can be made. Customer Service: • Do a better job of documenting conversations in tickets. • Communicate verbally instead of asking questions in tickets. • Document resolution in tickets. • Revive practice of notifying Tech Group member of tickets for their department. • Reinstate Tech Group. Naming Officially change the name of the Information Systems Section to the Information Technology or IT Section. GIS Scope • Expand the scope of the GIS Analyst’s work to include all GIS support and upgrades citywide for all GIS Users. After reading the job description it appears that this work falls within class. I have already started implementing this with Heather’s approval and Matt, Ethan and Terry’s agreement. Cell Phones • Consider giving the ordering and repair of cell phones to an administrative staff person. There is no technology reason for this activity to be in IS. • Meet with an AT&T rep and determine a replacement model for the current Kyocera Duraforce Pro. • Have field staff consider using holsters with a flap closure to reduce the incidence of phones falling out of their pockets, thus reducing the need for such hardened phones (except for the rain on the screen issue).

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Recommendations

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Citywide Asset Management • Implement a Computerized Maintenance (and Asset) Management System (CMMS) for use by Facilities Maintenance, Utilities, Public Works and Parks. Look at systems which integrate well with GIS system, such as Cityworks or Lucity. The end goal is for field crews to click on a map and see all of the information about assets located there in addition to using the software to establish routine preventative maintenance work orders based on an established schedule. Matt Stull, the GIS Specialist, will be a good resource on this project. Data Storage • ALL City data should be stored on central storage devices connected to the network and backed up regularly. The IT Pipes data is no exception. If it is determined that the less that 500 Gb (projected total storage) of data will impact the available storage, then Water could pay for additional storage space, however it appears that there is adequate storage capacity available and this should be dealt with right away. Document Management • Expand the use of the existing EDMS system beyond just the City Clerk. Look into hiring a Library Science intern through Sonoma State University. Incode Software • Hire an implementer from Tyler to fix issues with reorder report. This report should be including a custom field when calling out an item for reorder. • Investigate other options Tyler might have besides Parallels for remote desktop connection to the software. Helpdesk Software • Have new Information System Manager assess Solarwinds as compared to current and other Helpdesk software. Portola is recommending Spiceworks, which the City already owns. Currently we only use the modules which report on Critical Security Controls 1 and 2 and run the Inventory of Devices and Software which is being used by Portola. However, the City has the Helpdesk module installed and is not using it. This seems to be worth looking at. Use of Portola Systems • Use of Portola Systems for routine network management should end as soon as is feasible, and the permissions to perform the daily work they are doing should be given to the IS Manager and the new Senior IT Technician. Shoretel Implementation • The Shoretel Implementation project should be the top priority for the city. This implementation should take place at City Hall and CDC before the construction is completed and people need to move. • A consultant may need to be hired to assist with the implementation. A good resource for this is Terry Tomasini at “Packet Fusion.”

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

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The implementation should be phased in at other locations as soon as possible. IS Staff should manage Shoretel software and configurations and should be sent to training if needed. Website • Proceed with the 2018 refresh. • Have Public Communication and Community Outreach Coordinator be responsible for the website. • Consider creating a “Web “Editors” Group to be the web posting experts in each department and to give input in the 2018 web refresh project. Role of the Tech Group • Use “Train the Trainer” method with the Tech Group for all new rollouts. • Give Tech Group members technology inventory and replacement information for their departments. • Give Tech Group members basic support privileges in their departments.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

• •

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Job Description Examples Senior Information Technology Technician Senior Innovation and Technology Analyst or Department Technology Coordinator Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

• • •

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City of Santa Rosa ­ Class Specification Bulletin

Senior Information Technology Technician

9.B.a

Class Code: 21R4

Bargaining Unit: Technical CITY OF SANTA ROSA  Established Date: Jan 25, 2005  Revision Date: Feb 16, 2017

SALARY RANGE $37.97 ­ $46.19 Hourly $6,581.25 ­ $8,007.08 Monthly $78,975.00 ­ $96,085.00 Annually   DEFINITION:

The fundamental reason for the existence of this classification is to perform system administration and to research, implement and maintain current and advanced computer technologies.  The Senior Information Technology (IT) Technician performs complex installation, diagnostic and maintenance activities for the City's data and telecommunications infrastructure, and regularly provides advanced technical and functional support, direction and leadership to other technical staff.     DISTINGUISHING CHARACTERISTICS:

This is an advanced journey level classification.  Employees within this class participate in designing the operating procedures and policies of the work unit and initiate various activities in response to customer and system support needs.  Employees at this level typically lead teams, and receive instruction or assistance only as new or unusual situations arise.   This classification is distinguished from Information Technology management classifications in that the latter classifications have overall administrative responsibility for the City's data and telecommunications infrastructure, and full supervisory responsibility for assigned technical staff.  This classification is distinguished from Network Systems Analyst in that the latter performs more advanced and independent technical and analytical work required to design Citywide Information Technology systems and infrastructure and resolve more complex problems.     SUPERVISION RECEIVED AND EXERCISED:

General direction is provided by higher level management.  Responsibilities include providing technical and functional guidance to technical staff, trainees, or interns.    

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

12/7/2017

EXAMPLES OF DUTIES:

The following duties are considered essential for this classification: Research new technologies, ensuring compatibility with existing technology, making recommendations for implementation and performing cost analysis of licensing requirements; perform server administration including install, optimize, upgrade, and maintain hardware, operating system software and client/server software; provision servers in https://agency.governmentjobs.com/srcity/default.cfm?action=specbulletin&ClassSpecID=753720&headerfooter=0

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City of Santa Rosa ­ Class Specification Bulletin

9.B.a

virtual and physical environments; perform application administration activities, such as creating, modifying, and deleting users, groups, resources, membership rights, security access, and database scripts, queries and reports for messaging systems, databases and web applications; perform domain administration activities, such as assigning permissions and developing schema of users and groups; assess, plan, test and implement projects such as new hardware and software upgrades including but not limited to servers, cameras and audio video equipment; test commercial software and hardware, write product evaluations and recommendations for management review; monitor performance of hardware, operating systems, database and application software and make recommendations to correct problems or improve performance; plan, install, optimize, upgrade and maintain City wide desktop systems, mobile data computers and application software; perform computer and mobile device forensics; setup and maintain surveillance systems such as cameras, body worn cameras and door card access; work with department personnel in recovery of video footage; provide new camera specifications and purchasing of equipment; setup and provide technical support for audio visual and broadcasting equipment; establish and monitor procedures for data security and access to computer systems; prepare documentation, procedures, reports, specifications, program descriptions, operating instructions, training materials, and user manuals; perform as a functional team leader and coordinate project activities; train staff and act as a technical resource to other staff; provide second­level technical support, resolving escalated helpdesk incidents; design backup and recovery procedures; provide assistance to Network Systems Analysts to resolve network and /or telecommunications issues; customize vendor software releases to meet City requirements; consult with current and proposed systems users on the design and feasibility of proposed systems and modifications; analyze client needs and identify alternatives; estimate cost and timing of technology systems modifications; prepare specifications and participate in Requests for Qualifications, Requests for Proposals and/or contracts or agreements for hardware and software; determine data requirements for buildings; coordinate network cable install and moves; perform the duties of an Information Technology Technician as needed; and perform related duties as assigned.     QUALIFICATIONS:

Knowledge of: Principles and practices of software and hardware installation and repair, including automated software installation techniques; methods and techniques of troubleshooting hardware, software and inter­connectivity problems; principles of data and network security; local and wide area network (LAN/WAN) topology, security, and operation; Storage Area Networks (SAN) topology and operation; methods and techniques of providing support and training; operating procedures and maintenance of various types of audio video production equipment; methods to analyze and recommend business solutions to meet customer needs and requirements; basic scripting and querying for databases; basic telephony systems including voice over IP; the inter­relationship of central application servers, PC, LAN, network and telecommunications systems including hardware components, software applications, operating systems, documentation, and remote access; software products commonly used with the central application servers, personal computers and networked systems including word processing, spreadsheets, databases, presentation graphics, desktop publishing, e­mail/calendar, web applications, file recovery, backup, terminal emulation and other utilities; methods and techniques of data security and backup and recovery processes; methods of computer and mobile device forensics; and principles of organization and project management. https://agency.governmentjobs.com/srcity/default.cfm?action=specbulletin&ClassSpecID=753720&headerfooter=0

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

12/7/2017

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9.B.a

    Ability to: Identify, analyze and define information technology needs, collect information, establish facts, and draw and present valid conclusions; identify, troubleshoot, analyze and resolve complex customer/user issues; understand, interpret, and explain hardware and software application solutions; research technical materials to provide solutions to problems; write and modify instructions, procedures, manuals, documentation; understand and respond to issues related to data communications, networks and systems inter connectivity; use and manage virtual servers through virtual server management applications; use helpdesk ticketing systems; provide leadership in order for staff to work cooperatively and effectively with each other, customers, vendors, service and departmental personnel; effectively listen and communicate information to persons with diverse knowledge and experience; appropriately manage workload consisting of multiple projects, deadlines and unplanned interruptions to achieve timely and accurate work outcomes; read, analyze and take corrective action or refer problems to appropriate staff in response to error messages in the central application servers, network and personal computing platforms; set priorities and meet established goals and standards; prepare clear, concise and accurate oral and written reports; maintain confidentiality of information; learn new technology quickly; and learn the operations and functions of City workgroups in order to provide appropriate support.       EXPERIENCE AND EDUCATION    Any combination of training and experience that could likely provide the required knowledge and abilities would be qualifying. A typical way to obtain the knowledge and abilities would be:   Experience ­ At least three years of experience involving technical support of client­server and/or LAN/WAN systems, or similar experience in a multi­platform information technology environment.  Experience in a lead or project management position is highly desirable.  Education ­ Academic course work or formal training in computer science, information   systems, network systems or a closely related field.    LICENSE OR CERTIFICATE:

This classification requires the use of a vehicle while conducting City business. In order to drive, individuals must be physically capable of operating the vehicles safely and must possess a valid, Class C, California driver's license. Technical certifications equivalent to A+ hardware and software certification, and current certifications in networking technology, security, personal computer and server operating systems such as Net+ and Security+ are highly desirable.     WORKING CONDITIONS:

Work is primarily performed indoors in a technical office environment. Field assignments require incumbents to drive to and from office buildings to install, maintain and/or repair equipment. When responding to questions or requests for information from users and vendors, incumbents communicate orally face­to­face and using the telephone, and in writing using a keyboard. When working in the office, incumbents sit for several hours at a time using a keyboard and video display.  Operation of computer equipment requires continuous or repetitive arm/hand movements. When installing equipment and/or making equipment repairs, incumbents use common hand tools such as a screwdriver, wire cutters, cable punch and pliers. Incumbents discriminate among and match colors when installing cables and when adjusting colors on monitors, and bend, squat, climb, kneel and twist repeatedly and continually over time when performing installation or repair of equipment.  Equipment installation also involves climbing ladders to access ceiling wires; working with arms above shoulder level; grasping, pushing, pulling and fine manipulation; and performing installation work in small, cramped closets, under desks, behind cabinets and while sitting on the floor.   Senior IT Technicians refer to written and graphic instructions to determine equipment or wiring connection or placement. Using a multimeter and/or tape measure, incumbents evaluate cables for Ethernet tolerances. Incumbents perform physical inventories of equipment and supplies. They lift and move monitors, printers, servers and other equipment weighing up to 40 pounds short and long distances without assistance and up to https://agency.governmentjobs.com/srcity/default.cfm?action=specbulletin&ClassSpecID=753720&headerfooter=0

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

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9.B.a

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

75 pounds short and long distances with assistance. Senior IT Technicians may be expected to provide service during off hours, evenings, weekends and holidays and also may be expected to work an alternate work shift or schedule.

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City of Riverside - Class Specification Bulletin

Page 1 of 3 9.B.a

Senior Innovation & Technology (IT) Analyst

Class Code: 9253

CITY OF RIVERSIDE Established Date: May 17, 2016

DEFINITION: Under general direction, to perform a variety of complex professional, technical and analytical duties in the areas of programming, testing, troubleshooting, installation, implementation, documentation and maintenance of assigned systems, databases, programs and applications; to act in a lead capacity providing technical guidance to the Innovation & Technology Analysts; and perform other duties as assigned. DISTINGUISHING CHARACTERISTICS: This is the advanced professional level classification of the Innovation & Technology Analyst series. Incumbents at this level are responsible for the design, development, implementation, documentation and maintenance of complex citywide or critical enterprise applications, databases, voice/data network implementations and operations projects. Incumbents at this level also serve as project manager over the areas supported when required. The Senior IT Analyst class is distinguished from the IT Analyst II class by the former classification's responsibility in performing more difficult and complex analytical and technical duties. It is further distinguished from the Principal IT Analyst by the latter classification's supervision duties and overall project management responsibility. SUPERVISION RECEIVED AND EXERCISED: Receives minimal supervision from higher-level professional, and/or supervisory staff, as assigned; provides lead or technical guidance and mentorship to Innovation & Technology Technicians, Innovation & Technology Analysts and/or system users. Reports To: Varies depending on assignment EXAMPLES OF DUTIES: Typical duties may include, but are not limited to, the following: • Perform complex system analysis and consultation in the design, development, implementation, and maintenance of information systems, networks, servers, supporting hardware and software applications in a specialized technical area. • Act in a lead capacity over lower level Analysts and Technicians on a project basis. • Provide advanced technical assistance to system users in accordance with applicable information systems policies, procedures, methods and techniques. • Evaluate, plan, implement and integrate new systems and current system upgrades. • Prepare and design complex technical reports through database and report writing tools. • Perform project management duties on assigned systems projects. • Perform research, gather costing information, vendor quotes and recommend hardware and software based on current or new City standards. • Develop and produce system documentation, instructional, procedural manuals and systems architectural design.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Bargaining Unit: Professional

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KNOWLEDGE, SKILLS & ABILITIES: Knowledge of: In addition to knowledge requirements of Innovation & Technology Analyst I/II: • Advanced and specialized troubleshooting, diagnosis and problem resolution in focused areas such as network, VoIP, data center operations, database management, server management, applications, web development, project management, mobile applications, ERP systems, and public safety systems. • Advanced and specialized expert knowledge of assigned areas, such as network, VoIP, data center operations, database management, server management, applications, web development, project management, mobile applications, ERP systems, and public safety systems. Ability to: In addition to abilities of Innovation & Technology Analyst I/II: • Provide high level, advanced technical support to specialized areas and environments; provide a leadership role in teams or in managing assigned projects.

MINIMUM QUALIFICATIONS: Recruitment Guidelines: Option I Education: Equivalent to a Bachelor's Degree in Computer Science, Information Systems, or closely related field. Experience: Four years of full-time work experience in computer science, information systems, voice/data communications, data center operations, database administration or a related field. Option II Education: Equivalent to an Associate's Degree in Computer Science, Information Systems, or closely related field. Experience: Six years of full-time work experience in computer science, information systems, voice/data communications, data center operations, database administration or a related field.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

• Coordinate and conduct training for client users on assigned systems, applications, or other special projects. • Work with administration and propose enhancements to improve services, policies, and procedures. • Apply strong written and oral presentation skills when working directly with other Analysts or end users of varying technical ability and/or knowledge. • Maintain effective and professional relationships with vendors and their technical support personnel.

Option III Education: High School graduation or satisfactory equivalent (GED). Experience: Eight year of full-time work experience in computer science, information systems, voice/data communications, data center operations, database administration or a related field.

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SUPPLEMENTAL INFORMATION: Medical Category: Group 1 Necessary Special Requirement Possession of an appropriate, valid, class "C" California Motor Vehicle Operator's License. When assigned to the Police Department, must be able to successfully pass an extensive police background. Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Career Advancement Opportunities From: Senior Innovation and Technology (IT) Analyst To: Principal Innovation and Technology (IT) Analyst

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City of Santa Rosa - Class Specification Bulletin

Page 1 of 3 9.B.a

Class Code: 20K1

Bargaining Unit: Professional CITY OF SANTA ROSA Established Date: Aug 25, 1998 Revision Date: Jun 30, 2014

SALARY RANGE $37.97 - $46.19 Hourly $6,581.25 - $8,007.08 Monthly $78,975.00 - $96,085.00 Annually DEFINITION:

The fundamental reason for the existence of this classification is to research, implement and maintain current and advanced computer technologies in order to automate a wide variety of processes and facilities in the assigned Department. DISTINGUISHING CHARACTERISTICS:

This is a professional classification responsible for researching, implementing and maintaining current and advanced computer technologies necessary to automate processes and facilities in the assigned Department; integrating advanced computer technology efforts with the City-wide technology program; and coordinating the department’s advanced computer technology efforts with the Information Technology Department. Generally, work is performed independently with minimal supervision and incumbents are expected to exercise initiative and independent judgment in the performance of these duties. This class is distinguished from the related class of Programmer/Analyst in that the latter class is assigned to the Information Technology Department and has responsibilities with City-wide scope, including programming and systems analysis for the City’s central computer system, while the Departmental Technology Coordinator is assigned to an operating department working primarily with department-specific computer applications and does not perform application programming or design.

SUPERVISION RECEIVED AND EXERCISED:

Direction is provided by senior management staff in the assigned department. Responsibilities may include providing technical or functional direction to professional, technical and/or clerical staff. EXAMPLES OF DUTIES:

Essential Duties:

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

Department Technology Coordinator

The following duties are considered essential for this job classification: • Research, implement and maintain advanced computer technology and associated information security systems as they relate to the automation of processes and facilities in the assigned department; • establish and maintain computerized information links between administrative and operational functions department-wide;

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• oversee and participate in the implementation of web-based technology applications in the assigned department; • identify departmental needs for new and revised systems and applications; • identify and communicate to appropriate staff possible improvements in departmental information systems; • identify problems encountered by users of the various departmental computer systems; • coordinate and provide technical support for department-specific computer applications as appropriate; • identify training needs of departmental systems users related to advanced computer technology applications and either provide such training or arrange for staff to acquire it; • serve as the liaison between the assigned department and Information Services, as well as with other technical service providers; • serve as the advanced computer technology representative for the assigned department; • generate reports to senior staff as required; • plan and design process control system modifications; • assist with the development of departmental policies, procedures and operating standards related to advanced computer technology; • develop and implement procedures and applications to ease the transfer and emulation of computer data across various platforms; • assist in planning the advanced computer technology portion of the department's annual budget; • make recommendations concerning and coordinate purchase of and/or modifications to department-specific equipment and software as appropriate. Additional Duties: In addition to the duties listed in the Essential Duties Section, each employee in this classification may perform the following duties. Any single position may not be assigned all duties listed below, nor do the examples cover all duties which may be assigned. • Perform related duties as assigned.

QUALIFICATIONS:

Knowledge of: Principles and practices of organization, planning, training, research and budgeting; principles of information systems design especially related to personal computers and networks; computer applications used in areas of assignment; principles of electronic data communications; general principles of achieving process and facility automation; capabilities of available computer hardware, commercial software and networks; web development methodologies and physical networking configuration; networking servers; administration of browsing software; information security system implementation and administration; graphic design; effective customer service techniques; operations of assigned department. Ability to: Manage multiple tasks and priorities; coordinate work activities with department management; read, interpret and apply information from technical manuals; communicate effectively, orally and in writing; relay highly technical information effectively to others in lay terms; relay operational, maintenance and mechanical needs and requirements to others effectively in technical terms; maintain harmonious working relationships with those contacted in the course of work; forecast resource needs; identify strengths and weaknesses of existing advanced computer technology applications in assigned department; identify new trends; help formulate response strategies. Experience and Education: Any combination equivalent to experience and education that could likely provide the required knowledge and abilities would be qualifying. A typical way to obtain the knowledge and abilities would be: Experience - Sufficient years of increasingly responsible experience providing technical support to users of complex, multi-platform computer systems to demonstrate possession of the knowledge and abilities listed above. Experience in an environment similar to that of the assigned department is desirable. Education - Equivalent to an Associate of Science degree from an accredited college with major work in computer science or a closely related field.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

9.B.a

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Page 3 of 3 9.B.a

LICENSE OR CERTIFICATE:

This classification requires the use of a personal or City vehicle while conducting City business. In order to drive, individuals must be physically capable of operating the vehicles safely and must possess an appropriate valid California motor vehicle operator's license.

Much of the work is performed in an indoor office setting. While attending meetings, incumbents sit for extended periods of time with the ability to move at will. Incumbents are periodically asked to work evening and/or weekend hours, depending upon operational needs. Incumbents physically access geographically separate operational areas, including attic spaces and wiring passages, in order to evaluate wiring issues and site locations; operate computer key boards and use a mouse to enter and retrieve data; and discriminate among colors when monitoring and building website screens. Operation of computer equipment requires continuous or repetitive arm/hand movements. Incumbents also lift and carry for more than 20 feet monitoring equipment that weighs up to 50 pounds.

Attachment: Assessment Report prepared by Laura Tredinnick 122017 (1851 : Reorganization 020518)

WORKING CONDITIONS:

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9.B.b

CITY OF HEALDSBURG RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG RESCINDING RESOLUTION NO. 38-2017 AND REESTABLISHING THE LIST OF AUTHORIZED POSITIONS

WHEREAS, twice since the June 6th adoption the City Council adopted resolutions reestablishing the list of authorized positions adding the Senior Building Inspector, the Public Communication and Community Outreach Coordinator, and an additional full-time Recreation Supervisor; and WHEREAS, the City Council agrees that there is benefit to upgrading the Housing Analyst position to a Housing Administrator position, unfunding the Community Housing and Development Director position, adding an Administrative Services Director position, adding an Human Resources Manager position, adding an IT Systems Engineering Specialist position; and upgrading the IS Network Technician position to an IT Systems Engineering Specialist position; and WHEREAS, the City Council held duly noticed public meeting to review, and provide opportunity for and receive public comments, regarding the proposed changes. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg does hereby: 1. Rescind Resolution No. 38-2017. 2. Ratify the authorized positions as depicted in the attached Exhibit A. PASSED, APPROVED AND ADOPTED this 5th day of February 2018, by the following vote: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: ABSTAINING: Councilmembers: SO ORDERED:

ATTEST:

_________________________ Brigette A. Mansell, Mayor

_________________________ Maria Curiel, City Clerk

Attachment: Resolution - Authorized Positions (1851 : Reorganization 020518)

WHEREAS, on June 6, 2016, the City Council of the City of Healdsburg adopted the budget for fiscal year 2016-17 and 2017-18 containing appropriations for authorized positions by department and the corresponding resolution establishing the list of authorized positions; and

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9.B.c Number Authorized

Group

Monthly Salary Range

City Manager's Office City Manager Assistant City Manager Housing Administrator City Clerk Deputy City Clerk Public Communication and Community Outreach Coordinator Administrative Specialist Office Assistant II

1 1 1 1 1

Executive Management Executive Management Mid-Management Mid-Management Mid-Management

$14,799 - $17,987 $12,373 - $15,040 $8,478 - $10,342 $7,448 - $9,088 $7,448 - $9,088

1 2 1

Mid-Management IBEW IBEW

$6,022 - $7,341 $5,526 - $6,742 $4,181 - $4,104

Administrative Services Administrative Services Director Finance Manager Human Resources Manager IT Manager Administrative Services Manager Equipment Service Writer/Mechanic Personnel Specialist Accounting Supervisor Accountant IT Systems Engineering Specialist Accounting Assistant Payroll Specialist Building Maintenance Worker II Senior Accounting Clerk Accounting Clerk II

1 1 1 1 1 1 1 1 1 2 1 1 1 1 3

Executive Management Mid-Management Mid-Management Mid-Management Mid-Management IBEW Mid-Management Mid-Management Mid-Management IBEW IBEW IBEW IBEW IBEW IBEW

$12,373 - $15,040 $8,476 - $10,342 $8,476 - $10,342 $8,476 - $10,342 $7,673 - $9,363 $6,946 - $8,476 $6,878 - $8,392 $6,742 - $8,226 $6,414 - $7,827 $6,103 - $7,419 $5,002 - $6,104 $5,526 - $6,742 $4,807 - $5,866 $4,759 - $5,807 $4,309 - $5,257

Planning & Building Planning & Building Director Senior Planner Building Official Assistant Planner Senior Building Inspector Building Inspector II Community Development Technician Administrative Specialist

1 2 1 1 1 1 2 1

Executive Management Mid-Management Mid-Management IBEW IBEW IBEW IBEW IBEW

$11,428 - $13,891 $8,478 - $10,342 $8,478 - $10,342 $5,052 - $6,165 $7,597 - $9,270 $6,544 - $7,986 $5,526 - $6,742 $5,526 - $6,742

Community Services Community Services Director Recreation Supervisor Parks Superintendent Recreation Coordinator II Parks Caretaker II Office Assistant II Facilities Worker

1 3 1 1 3 1 1

Executive Management Mid-Management Mid-Management IBEW IBEW IBEW IBEW

$11,656- $14,169 $5,866 - $7,157 $7,597 - $9,270 $3,979 - $4,855 $4,712 - $5,750 $4,181 - $4,287 $3,940 - $4,807

Police Police Chief Police Lieutenant Administrative Analyst Police Dispatcher Police Officer Police Records Officer Police Sergeant Police Technician

1 1 1 6 11 1 5 1

Executive Management Mid-Management Mid-Management HPOA HPOA HPOA HPOA HPOA

$13,002 - $15,804 $8,905 - $10,866 $6,415 - $7,827 $4,551 - $5,831 $5,806 - $7,438 $4,524 - $5,795 $6,876 - $8,810 $3,976 - $5,092

Attachment: Exhibit A - Authorized Positions (1851 : Reorganization 020518)

Department/Classification

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Fire Fire Chief Fire Marshall Fire Captain Fire Inspector Fire Engineer Firefighter Office Assistant II

1 1 3 1 3 2 1

Executive Management Mid-Management IAFF IAFF IAFF IAFF IBEW

$12,495 - $15,188 $9,084 - $11,084 $7,299 - $8,905 $6,607 - $8,062 $6,287 - $7,670 $5,981 - $7,299 $4,181 - $5,104

Public Works Public Works Director Streets & Storm Drains Superintendent Principal Civil Engineer Senior Civil Engineer Associate Civil Engineer Public Works Field Technician Utility Maintenance Foreman Utility Technician Utility Worker II Engineering Technician Public Works Inspector

1 1 1 1 1 1 2 1 6 1 2

Executive Management Mid-Management Mid-Management Mid-Management Mid-Management IBEW IBEW IBEW IBEW IBEW IBEW

$12,128 - $14,744 $8,226 - $10,038 $9,672 - $11,758 $8,560 - $10,445 $7,301 - $8,908 $6,165 - $7,522 $5,310 - $6,479 $5,310 - $6,479 $4,807 - $5,866 $5,526 - $6,742 $6,165 - $7,522

Utilities Utilities Director Senior Electric Engineer Principal Engineer (Water/Wastewater) Water and Wastewater Operations Superintendent Electric Operations Superintendent Utility Conservation Analyst Industrial Electrician Industrial Mechanic Instrumentation Technician Laboratory Technician Ill Records Technician/Storekeeper Utility Operator Wastewater Foreman Water Foreman Electric Lineman Apprentice Electric Line Foreman Electric Lineman Electric Materials Technician Electric Engineering Technician I Meter Technician Electric Field Coordinator

1 1 1 1 1 1 1 1 1 1 1 4 1 1 3 2 2 1 1 1 1

Executive Management Mid-Management Mid-Management Mid-Management Mid-Management Mid-Management IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW IBEW

$13,396 - $16,285 $10,019 - $12,178 $9,672 - $11,758 $8,226 - $10,038 $9,087 - $11,088 $6,479 - $7,906 $6,810 - $8,309 $6,073 - $7,382 $6,810 - $8,309 $6,165 - $7,522 $5,103 - $6,227 $6,810 - $8,309 $7,522 - $9,179 $7,522 - $9,179 $5,526 - $6,742 $7,906 - $9,646 $7,194 - $8,745 $5,526 - $6,742 $6,511 - $7,915 $7,194 - $8,745 $6,511 - $7,915

Total Full-time Employees

Attachment: Exhibit A - Authorized Positions (1851 : Reorganization 020518)

9.B.c

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9.B.d

CITY OF HEALDSBURG RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG AMENDING THE FISCAL YEAR 2017-18 BUDGET WHEREAS, on June 6, 2016, the City Council adopted of the 2016-18 biennial budget; and

WHEREAS, after the increase in appropriations, the funds, including the General Fund continue to meet the Council adopted reserve policies. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg does hereby approved amending the fiscal year 2017-18 budget as depicted in the attached Exhibit A. PASSED, APPROVED AND ADOPTED this 5th day of February 2018, by the following vote: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: ABSTAINING: Councilmembers: SO ORDERED:

ATTEST:

_________________________ Brigette A. Mansell, Mayor

_________________________ Maria Curiel, City Clerk

Attachment: Resolution - Budget Amendment (1851 : Reorganization 020518)

WHEREAS, at a public meeting, the City Council was presented with a staffing reorganization and the related increased in appropriations; and

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9.B.e EXHIBIT A - BUDGET AMENDMENT Section I – Change in Appropriations: ACCOUNT NUMBER

INCREASE AMOUNT

DECREASE AMOUNT

Miscellaneous:

101-2001-41101 20,719

101-8080-42401

14,778

106-2022-41101

1,763

603-2525-41101

11,083

603-8080-42401

10,247

221-8080-42401

124

510-8080-42401

5,546

520-8080-42401

3,394

530-8080-42401

4,226

531-8080-42401

670

540-8080-42401

6,861

570-8080-42401

310

585-8080-42401

2,920

602-8080-42401

483

604-8080-42401

491

Purpose: To increase/decrease appropriations. Section II – Source of Funding - Increase/(Reduce) Fund Balance or Net Assets General Fund Measure S Fund Lighting & Landscape Fund

(2,509) 1,763 (124)

Streets Fund

(5,546)

Water Fund

(3,394)

Wastewater Fund

(4,226)

Drainage Fund

(670)

Electric Fund

(6,861)

Airport Fund

(310)

Community Services Fund

Attachment: Exhibit A - Budget Amendment (1851 : Reorganization 020518)

101-2525-41101

3,432

(2,920)

Vehicle Maintenance Fund

(483)

information Services Fund

(836)

Building Maintenance Fund

(491)

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10.A

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Written Communication from Planning and Building Director DeRosa regarding Planning Commission actions taken on January 23, 2018

PREPARED BY:

Shawn Sumpter, Administrative Specialist

STRATEGIC INITIATIVE(S): Effective & Efficient Government

RECOMMENDED ACTION(S): No action required.

BACKGROUND: Since the formation of the Planning Commission, a report on actions taken at the immediately prior Commission meeting has been provided to the City Council as a way of keeping the Council informed of the matters/issues before the Commission. This report is not required by the Healdsburg Municipal Code, City Council resolution or state law and requires no action from the City Council. DISCUSSION/ANALYSIS: Attached, for your information and receipt, is the report on the actions taken by the Planning Commission at its January 23, 2018 meeting. ALTERNATIVES: None. FISCAL IMPACT: There is no fiscal impact as a direct result of the proposed action. ENVIRONMENTAL ANALYSIS: Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

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10.A

ATTACHMENT(S): PC Summary January 23, 2018

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10.A.a

REPORT TO COUNCIL

1. ROLL CALL Commissioners present: Bottarini, Civian, Eddinger, Engler, Lickey, Luks, Tracy Commissioners absent: None City Staff present: Planning and Building Director Maya DeRosa, City Attorney’s Office Ben Stock, Administrative Specialist Shawn Sumpter 2. ADMINISTRATIVE ACTIONS A. The Commission voted 7-0 to approve the January 23, 2018 agenda B. The Commission voted 7-0 to approve the November 28, 2017 minutes. C. Acceptance of Communications and Correspondence  Email from Elizabeth & Richard Pembroke supporting the Design Guidelines. D. Declarations of Conflicts of Interest None E. Disclosures of Ex Parte Communications None 3. PUBLIC COMMENTS None 4. PUBLIC HEARINGS 



The Commission voted 7-0 to approve Land Use Code Amendment LUA-2018-01Citywide Design Guidelines with minor changes. Three members of the public spoke. Concerns were expressed about compatibility with the goals of the Housing Action Plan. Staff requested that item 4B, Land Use Amendment LUA 2017-03 (Employee Housing Ordinance Amendment) be continued to the next meeting. The item will be re-noticed. Note: Staff intends to ask for a continuance of this item. The item will be re-noticed.

5. NEW BUSINESS 6. COMMISSIONER AND SUBCOMMITTEE REPORTS 7. DIRECTOR’S REPORT  February meetings will be televised.  Upcoming Land Use Code amendment hearings regarding fire arm sales and a revision of the sign ordinance.

Attachment: PC Summary January 23, 2018 (1857 : PC Meeting Summary 1-23-2018)

SUBJECT: Summary of January 23, 2018 Planning Commission Meeting

The meeting adjourned at 7:27 PM.

PC Summary 1/23/2018

Page 1 of 1

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10.B

CITY OF HEALDSBURG CITY COUNCIL AGENDA STAFF REPORT

MEETING DATE: February 5, 2018 SUBJECT:

Written Communication from Community Services Director Themig regarding Parks and Recreation Commission actions taken on January 10, 2018

PREPARED BY:

Mark Themig, Community Services Director

STRATEGIC INITIATIVE(S): Effective & Efficient Government

RECOMMENDED ACTION(S): No action required

BACKGROUND: As a way of keeping the Council informed of the matters/issues before the Parks and Recreation Commission, a report on actions taken at the immediately prior Commission meeting is being provided to the City Council. This report is not required by the Healdsburg Municipal Code, City Council resolution or state law and requires no action from the City Council. DISCUSSION/ANALYSIS: Attached, for your information and receipt, is the report on the discussion taken by the Parks and Recreation Commission at its January 10, 2018 meeting. ALTERNATIVES: None. FISCAL IMPACT: There is no fiscal impact as a direct result from the proposed action. ENVIRONMENTAL ANALYSIS: Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

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10.B

ATTACHMENT(S): PRC January 10, 2018 - Report to Council

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10.B.a

Subject:

Summary of January 10, 2018 Parks and Recreation Commission Meeting

Recommended Action:

No action required.

1. Roll Call Commissioners Present: Commissioners Absent: Staff:

Herrod, Lambert, Mota, Tripathi Birdsong, Dobley Office Assistant Salas, Events and Facilities Supervisor Jahns, Recreation Supervisor Perdigao, Community Services Director Themig

2. PUBLIC COMMENTS None. 3. PRESENTATIONS a) Healdsburg Unified School District Improvement Plan Healdsburg Unified School District Superintendent Chris Vanden Heuvel - Superintendent Chris Vanden Heuvel provided a presentation on projects that are being funded through a $67 million bond measure that was passed in 2016  2017-2018 (Phase 2): Includes improvements to Agriculture Classroom and Smith Robinson Gym, construction of an outdoor ag lab space, and installation of synthetic turf for the outdoor track and field area – including lighting.  2019-2020: Includes a new gym at HHS and locker room facilities, Junior High gym will be modernized, and the addition of STEM classroom and outdoor Agriculture Lab.  2021-2022: Includes a High School auditorium, conversion of old facility into weight room, renovation of the turf and layout of baseball/softball fields, and reconfiguration of pool parking lots to address ADA issues. b) Tayman Group  Jimmy Stewart provided overview and history of Tayman’s oversight of golf course and villa chanticleer. Operated Villa Chanticleer since 2014, golf course since 1999.  Frank Johnson gave an overview of golf course operations since 1999. Improvements have included adding driving range, hole renovations, entry road reconfiguration, upgrade irrigation. Challenges include golf business not growing, retaining employees, additional irrigation upgrades. Clubhouse at golf course is a multi-use facility used by golfers, private events, and community meetings. Increased marketing efforts include social media, email outreach.  Leilani Martin gave a recap of her time at the Villa Chanticleer. Insight provided into interactions with partnering groups, vendors. Challenges include a dated building, functionality of bar space, rate structure, free/discounted events, competing venues. Outreach includes new website, social media, wedding circulars, print copy. Host to private events, community meetings, fundraisers. 4. NEW BUSINESS a) Temporary Art Installation Pilot Program Community Services Director Themig provided background on Public Arts Policy, which came into effect in 2007. New art installations throughout town have brought this pilot program to light. Themig has connected/had conversations with city staff, community members, and local artists. Potential locations for installations have been considered, both in Public and Private space.

Attachment: PRC January 10, 2018 - Report to Council (1861 : Parks and Recreation Commission Actions 1.10.18)

REPORT TO THE CITY COUNCIL

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  

Proposed program is for a pilot timeframe of 3-6 months. Permit/application process would be included. Applications would be reviewed to discuss materials, location, timeframe, etc. West Plaza Park Planter Bed is the proposed location for art displays. Current Public Art policy allows for long-term/temporary installations. Municipal code allows for Community Services Director to issue a permit of this nature. Anticipate this would take 30-60 days to implement Themig responded to questions. 1) Applications would be screened at staff level. Criteria for approval/appeals would be established ahead of time. 2) Proposal for policy stemmed from an individual artist, but framework is meant to appeal to all public art displays. If program is created, enforcement would be increased in other locations. 3) Donations for artists or panhandling is a protected right and would continue.

Next meeting: February 14, 2018 at the City Council Chambers (unless otherwise established)

Attachment: PRC January 10, 2018 - Report to Council (1861 : Parks and Recreation Commission Actions 1.10.18)

10.B.a

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