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BACKGROUND Adoption of a certified Housing Element is a City Council priority and required for the City to remain compliant with State law. The 6th Cycle Housing Element update covers the planning period from 2023-2031 . In March 2021, the City Council authorized the City Manager to enter into professional services agreements to support the update; this included a Professional Services Agreement with Lisa Wise Consulting in the amount of $302,001 to prepare an update the Housing Element Update. In November 2022, this contract was expanded to $329,711 to support preparation of additional analysis related to the statutorily required Affirmatively Furthering Fair Housing (AFFH) section, attend additional hearings, and prepare a revised Housing Element in response to HCD's first round of comments. The Housing Element was adopted on January 26, 2023, at which point it was resubmitted to HCD for certification. HCD provided the City with a comment letter on April 10, 2023, indicating that a few items remain to be addressed before the Housing Element can be certified as compliant. DISCUSSION Significant work has been completed to date on the Housing Element Update, including extensive public outreach comprising over 40 public meetings, workshops, public hearings, and outreach events. Pursuant to State law, exhaustive analysis has been completed documenting the city's affordable housing needs, existing constraints and opportunities for housing production, identification of potential sites for re-zoning to accommodate the Regional Housing Needs Allocation (RHNA), and evaluation and update of existing housing policies and programs. Ultimately, the 6th Cycle Housing Element was adopted on January 26, 2023. In its review, HCD indicated that a few items remain to be addressed before the Housing Element can be certified as compliant. HCD provided a comment letter on April 10, 2023. Staff and the consultant team have reviewed the comments in detail and some additional work is needed, including: • An additional Planning Commission Meeting • An additional City Council Meeting • Preparation of the final adopted Housing Element • Contingency for any final additional items (e.g., meetings with HCD, final minor adjustments, etc.). Exhibit A of Attachment 1 provides additional detail on Lisa Wise Consulting's budget amendment request. The total costs associated with the additional work are estimated at $24,225. This additional cost includes a $10,000 contingency, which is approximately 2.8 percent of the total compensation outlined in the agreement and is recommended to cover any additional unforeseen costs to close out this consulting work. Staff finds the above additional work items are essential to the successful certification of the 6th Cycle Housing Element update and recommends the City Council authorize the City Manager to execute the amendment to the Professional Services Agreement to extend the term Page 2 of 3