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City, however, is only permitted to commit $241,176 in HOME funds towards the 2-bedroom Hansen ADU project as the HOME regulations at 24 CFR 92.205 stipulate the maximum per-unit subsidy limits for HOME-assisted units, which are published annually by the U.S. Department of Housing and Urban Development (HUD). Loan and Regulatory Agreements Staff is seeking City Council approval of the proposed loan amount and allocation of LIHF and HOME program funds to support construction of the Hansen ADU. If approved, staff will present the loan and regulatory documents at a future Council meeting for review and approval. City staff will coordinate with the City Attorney's Office to finalize the Affordable Housing Loan Agreement, Promissory Notes, Leasehold Deeds of Trust, and Regulatory Agreement. The City Council will be asked to review and approve these financing and regulatory documents. These executed documents would demonstrate to County HCD that the $241,176 HOME funds have been committed to the project. The City would be able to submit for reimbursement once it obtains the construction expenditures supporting documentation from REACH. Building Fees The Implementation Policies for the Measure Al Bond Rental Housing Development Fund require that all projects funded by Measure Al Bond proceeds must include matching funds from the City in which the project is located. The minimum amount of match must equal the City planning and building fees, not including development impact fees. Eligible types of funding match include, "waived planning, building or impact fees." Consequently, City staff is proposing to: 1) provide Tri-Valley REACH a $20,000 grant using LIHF funds that REACH would use to pay for the project's development impact fees for the two ADU units; and 2) waive the building fees for the two ADU units to comply with this match fund requirement. County staff has indicated the proposed match would meet the requirements of the Measure Al program. The $20,000 grant to REACH is proposed because the City does not have the authority to waive the development impact fees for the project, which are currently estimated at $18,212 for both ADUs. The City would provide this grant to REACH, which would then use the grant funds to pay for the following development impact fees, Zone 7 water connection fees and City and DSRSD sewer connection fees. REACH would return any unused grant funds to the City. The City's Chief Building Official does not have the authority to waive building fees, which are currently estimated at $17,402 for both ADUs, unless authorized by the City Council. The City has the authority to charge fees or waive fees for planning, zoning, and building per Cal. Government Code section 66014 and Cal. Constitution Article XI, section 7, under its general police power. City staff is requesting the City Council grant this authority to the Chief Building Official to waive the building fees, and also to refund REACH for the combined $4,149 plan check fees already paid by REACH at submission of its permit applications in December 2022. The plan check fees are included in the estimated building fees amount. The proposed grant to REACH and building fees waiver allow the City to further assist REACH in the construction of the ADUs by reducing the total construction costs of the project. The construction savings from the building fees is critical as construction Page 5 of 6