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affect the affordability profile of the housing units. The Host City Charge, as currently formulated, would not backfill County or School District taxes. Some have suggested considering using the City's Affordable Housing Fund (also known as the Lower-Income Housing Fund) to reimburse the City's General Fund for lost property tax revenues from such CSCDA projects. The rationale is that the General Fund is losing revenue to support moderate-income housing, so the Affordable Housing Fund reimbursing the General Fund is similarly supporting affordable housing. Pleasanton Municipal Code §17.40.090 sets forth the Use of Affordable Housing Fund, incorporating the City's General Plan Housing Element. Neither specify as an allowable activity such reimbursement from the Affordable Housing Fund. California Government Code §66008 more directly prohibits use of housing fees "for general revenue purposes" which is the nature of the General Fund, so it is questionable whether this approach would be legally defensible.5 Finally, and notwithstanding the offset that could occur through the Host City Charge, if the City chooses to participate in the program (or a similar program offered by another entity such as CaICHA), it would likely be beneficial to establish policy guidance around the total property tax revenues the City would be willing to forego, since, if there were multiple parties interested in proposing an acquisition, the lost property tax revenues could quickly add up. Lack of Enforcement Ability. While the City would enter into agreements with the JPA with respect to the affordability levels, allowable rent increases, etc., and annual reporting could be required to be provided to the City by the managing entity, there is no third party assigned to oversee aspects such as income and rent compliance (whether units are being rented to qualified tenants, or at the restricted rent levels). This differs substantially from the operation of other affordable housing projects to which the City is a party, where there is much more direct oversight and monitoring for compliance. The City, as an "Alternate Member" of the JPA, does not have the ability to enforce or take action in the event there was found to be any instances of non-compliance. However, it is noted that some Cities have negotiated a greater degree of involvement in monitoring project management and finances over time — for example, the City of Dublin, in its 2021 agreement for the Waterford Place acquisition, required "input on property management issues" and receiving an annual report from CSCDA on the Authority's acquisition, financing and operations of properties.6 Transaction Fees versus Renters' Benefits. As noted, because the program does not displace existing tenants, conversion of units to deed-restricted units occurs over time as units are voluntarily vacated by market-rate tenants, and then re-leased to income-eligible households. Depending on the rental market over time and the affordability levels of See Cal. Govt. Code §66008. A local agency shall expend a fee for public improvements, as accounted for pursuant to Section 66006, solely and exclusively for the purpose or purposes, as identified in subdivision (f) of Section 66006, for which the fee was collected. The fee shall not be levied, collected, or imposed for general revenue purposes. b City of Dublin, Staff Report dated May 4,2021. Page 5 of 9