Report Prepared by: Scott McBride, Director of Development Services and Leah Brown, Management Analyst, Development Services
Title
SUBJECT: Approval of an Agreement with Merced County Association of Governments for the Administration of the Merced County Multijurisdictional Housing Element and SB244 Technical Analysis Contract and Adoption of a Resolution Agreeing to the Costs Share for the SB 244 Analysis
REPORT IN BRIEF
Considers approving the Agreement with Merced County Association of Governments (MCAG) for the Administration of the Merced County Multijurisdictional Housing Element (MJHE) and the SB244 Technical Analysis Contract and Authorizes the increase in cost by $12,000 for the SB244 Analysis from the consultant for the MJHE.
RECOMMENDATION
City Council - Adopt a motion:
A. Authorizing the Agreement with MCAG for the Administration of the Merced County MJHE and SB244 Technical Analysis Contract; and,
B. Adopting Resolution 2023-63, a Resolution of the City Council of the City of Merced, California, agreeing to the cost share for the SB244 Analysis portion of the Multijurisdictional Housing Element; and,
C. Authorizing the City Manager or Deputy City Manager to execute the agreement with MCAG and any related documents necessary for the administration of the MJHE and increase in cost for the SB244 Analysis portion.
Body
ALTERNATIVES
1. Approve, as recommended by Staff; or,
2. Approve, subject to conditions other than recommended by Staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Sections 200, 405, and 1105.
CITY COUNCIL PRIORITIES
Fiscal Year 2022/2023 Adopted Goals and Priorities, Housing & Homelessness.
DISCUSSION
California Housing Element law requires every jurisdiction to prepare and adopt a Housing Element as part of its General Plan. State Housing Element requirements are framed in Government Code, Sections 65580 through 65589, Chapter 1143, Article 10.6. The law requires the State Department of Housing and Community Development (HCD) to administer the law by reviewing housing elements for compliance with state law and by reporting its written findings to the local jurisdiction. State housing element law mandates that housing elements be updated every eight years. Additionally, a certified housing element is a key requirement to qualify for numerous state grants and funding.
The City of Merced last adopted and submitted a housing element in September 2016, which is in compliance with HCD. The sixth cycle housing elements will cover the planning period of January 31, 2024, through January 31, 2032, and must be adopted and submitted to HCD for certification by February 18, 2024.
Legislative changes have increased the cost and complexity of the housing element since the fifth cycle. On December 5, 2002, City Council adopted a motion to participate in the Merced County, MJHE. Furthermore, Council agreed to participate in a cost sharing agreement with the other member agencies. The total cost for the MJHE was originally $1,030,743 with the City’s portion being $132,267. On May 1, 2023, Council adopted a resolution to increase the community outreach and engagement portion of the element at an additional cost of $22,000.
Relationship to SB244 Analysis - Disadvantaged Unincorporated Communities
The City Council has prioritized updating the current SB 244 analysis to assist in the identification of Disadvantaged Unincorporated Communities (DUC’s). As part of the housing element update, the SB 244 analysis will be completed. The City is also required to undertake this process if it is contemplating an amendment to the City’s Sphere of Influence (SOI), a comprehensive General Plan Update including the land use section, or a new Housing Element. Concurrent with the housing element update, the City will be moving forward with a comprehensive General Plan Update and it may include amendments to the SOI.
As noted at the October 17, 2022, Council Meeting, SB 244 does not require the physical extension of public services to residents within an identified DUC. It only requires an analysis of the specific services listed within the legislation. It also requires identification of potential funding mechanisms but does not directly provide any financial support to extend services or pay for connection costs. Many areas which may be identified in the SB 244 analysis may be candidates for grant funding and other support programs within the County prior to any future annexation of those areas or extension of water and sewer lines through out-of-boundary agreements with the City.
City representatives have heard concerns from many residents in areas which likely meet the criteria designating their areas as a DUC. As part of that discussion, there was a commitment to conduct additional public education and outreach on both SB 244 and the housing element update.
When the MJHE was first presented to Council the tasks and cost share for the SB244 Analysis had not yet been worked out with all of the agencies. One City did not need to conduct an SB244 Analysis, one city and the county had completed it more recently and some of the smaller communities had less of a need. Therefore, after much discussion, the agencies came together with this additional agreement to share costs. Because the City of Merced is the largest incorporated area with the most disadvantaged unincorporated areas near it, the City’s portion is 30% of the total share of the cost. The total cost for this analysis is $40,000 and the City’s portion is $12,000.
Merced County Association of Government (MCAG) is acting as the fiscal agent and contract administrator for the MJHE, so any increase in work or costs associated would be billed by MCAG and paid to them. Furthermore, MCAG has memorialized the roles and responsibilities associated with the creation and administration of the MJHE in an Agreement for Administration with each member agency. MCAG is coordinating with City Staff to update the scope to better meet the City’s needs and will need a resolution agreeing to the additional costs associated with the SB244 Analysis. Both the Agreement for Administration and the updated Cost Share for the SB244 Analysis are going to the MCAG governing board in September to execute and update the changes in the contract with Rincon.
This additional scope of work is for the technical SB244 Analysis and does not include public outreach and involvement. Public outreach and engagement will be attained via the City’s own mechanisms. Some outreach will occur concurrent to the Housing Element and General Plan outreach activities.
IMPACT ON CITY RESOURCES
The Housing Element is part of the General Plan; therefore, funding is available within the Planning Budget for General Plan update.
ATTACHMENTS
1. MCAG Comment Letter
2. Cost Sharing Agreement
3. Resolution 2023-63
4. SB244 Agreement