SR-12-16-2014-3ECity Council Meeting: December 16, 2014
Agenda Item: 3
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Gigi Decavalles- Hughes, Director of Finance
Subject: Annual Report on the Housing Asset Fund
Recommended Action
Staff recommends that the City Council:
1. Receive the Annual Report on the Low- and Moderate - Income Housing Asset
Fund for Fiscal Year 2013 -14 and direct the City Manager to post the report on
the City's website by December 31, 2014; and
2. Direct staff to present the independent audit of the Low- and Moderate Income
Housing Asset Fund to the Council upon completion of the independent audit of
the City's Comprehensive Annual Financial Report (CAFR) and post the results
of the audit on the City's website within five days of presentation to the Council.
Executive Summary
Recent changes in state law require the City to prepare an annual report regarding the
low- and moderate - income housing asset fund of the former Santa Monica
Redevelopment Agency. The law also requires the completion of an independent audit
of the fund. The annual report is attached and the audit is being completed as part of
the City's annual audit process.
Discussion
Senate Bill 341 (SB 341), which is codified in Health and Safety Code Section 34176.1
and became effective on January 1, 2014, requires each housing successor that
assumed the housing functions of a former redevelopment agency to post a report on its
website that contains information regarding the low- and moderate- income housing
asset fund (Fund) of the former redevelopment agency for the previous fiscal year.
In this case, the City, as the housing successor (Housing Successor), is required to
prepare and post the report (see Attachment A.)
1
In addition, the Housing Successor is required to conduct and provide to the Council an
independent financial audit (Audit) of the Fund within six months of the end of the fiscal
year. The Audit maybe included as part of the City's independent financial audit.
The City as Housing Successor assumed the housing functions of the former Santa
Monica Redevelopment Agency (RDA) on January 10 2012. The transfer of the
functions included the transfer of formerly designated RDA low- and moderate- income
housing funds together with any funds generated by former RDA housing assets.
The funds must be maintained by the City in the separate Fund and expended in
accordance with Health and Safety Code section 34176.1 ( "Section 34176.1 ").
To ensure that the monies in the Fund are expended in accordance with the law,
Section 34176.1(f) requires an independent financial audit of the Fund within six months
of the end of the fiscal year. The independent audit of the City's Fund will be included
as part of the City's CAFR prepared by Macias Gini & O'Connell LLP (MGO), the City's
independent auditor. Staff is working to complete the CAFR during the required
six -month timeframe. Staff will post the results of the independent audit of the Fund on
its website within five days of the CAFR being presented to City Council.
SB 341 also requires annual reporting and website posting of additional housing
information related to the Fund. The Report includes the following information:
• there was an $894,927 balance in the Fund for the fiscal year ending
June 30, 2014, with no expenditures during the period;
• the former RDA's replacement housing obligations will be satisfied once the
520 Colorado Avenue affordable apartments are completed in 2015;
• the former RDA's inclusionary housing obligation was met as of June 30, 2009;
• approximately eleven percent of the affordable housing assisted by the former
RDA is restricted to seniors; and
• there is no "excess surplus' (unencumbered funds of more than one million
dollars) in the Fund.
2
The Report is attached as Attachment A and is required to be posted on the City's
website after Council's review and receipt.
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared by: Tina Rodriguez, Successor Agency Administrator
Approved:
Andy Agle, Director
Housing and Economic Development
rinance
Attachments:
Forwarded to Council:
Rod Gould
City Manager
Attachment A: Annual Report Low and Moderate Income Housing Asset Fund
CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f) FOR THE
This Housing Successor Annual Report (Report) regarding the Low and Moderate Income
Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety
Code Section 34176.1(f). This Report sets forth certain details of the Santa Monica Housing
Successor (Housing Successor) activities during fiscal year 2013 -2014 (fiscal year).
The purpose of this Report is to provide the governing body of the Housing Successor an
annual report on the housing assets and activities of the Housing Successor under Part 1.85,
Division 24 of the California Health and Safety Code, in particular sections 34176 and
34176.1 (Dissolution Law).
This Report conforms with and is organized into sections I. through XI., inclusive, pursuant to
Section 34176.1(f) of the Dissolution Law:
I. Amount Deposited into LMIHAF: This section provides the total amount of funds
deposited into the LMIHAF during the fiscal year. Any amounts deposited for items listed on
the Recognized Obligation Payment Schedule (BOPS) must be distinguished from the other
amounts deposited.
II. Ending Balance of LMIHAF: This section provides a statement of the balance in the
LMIHAF as of the close of the fiscal year. Any amounts deposited for items listed on the
ROPS must be distinguished from the other amounts deposited.
At the close of the fiscal year, the ending balance in the LMIHAF was $849,927.76, of which
$0 was held for items listed on the RODS.
III. Description of Expenditures from LMIHAF: This section provides a description of the
expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be
categorized.
Santa Monica Housing Successor Page 12
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IV. Statutory Value of Assets Owned by Housing Successor: This section provides the
statutory value of real property owned by the Housing Successor, the value of loans and grants
receivables, and the sum of these two amounts.
Under the Dissolution Law and for purposes of this Report, the "statutory value of real property"
means the value of properties formerly held by the former redevelopment agency as listed on the
housing asset transfer schedule approved by the Department of Finance as listed in such
schedule under Section 34176(a)(2), the value of the properties transferred to the Housing
Successor pursuant to Section 34181(f), and the purchase price of property purchased by the
Housing Successor. Further, the value of loans and grants receivable is included in the reported
assets held in the LMIHAF.
Statutory Value of Real Property $ 11,635,000
Value of Loans and Grants Receivable $148,005,351
Total Value of Housing Successor Assets $159,640,351
V. Description of Transfers: This section describes transfers, if any, to another housing
successor agency made in previous fiscal year(s), including whether the funds are
unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used.
The sole purpose of the transfers must be for the development of transit priority projects,
permanent supportive housing, housing for agricultural employees or special needs housing.
under Section 34176. 1(c) (2) during the fiscal year.
VI. Project Descriptions: This section describes any project for which the Housing
Successor receives or holds property tax revenue pursuant to the BOPS and the status of that
project.
The Housing Successor does not receive or hold property tax revenue pursuant to the
r
VII. Status of Compliance with Section 33334.16: This section provides a status update
on compliance with Section 33334.16 for interests in real property acquired by the former
redevelopment agency prior to February 1, 2012.
With respect to interests in real property acquired by the former redevelopment agency prior to
February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have
Santa Monica Housing Successor
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commenced on the date that the Department of Finance approved the property as a housing
asset in the LMIHAF; thus, as to real property acquired by the former redevelopment agency
now held by the Housing Successor in the LMIHAF, the Housing Successor must initiate
activities consistent with the development of the real property for the purpose for which it was
acquired within five years of the date the DOF approved such property as a housing asset.
period for development
Deadline to
Initiate
Address of
Date of
Development
Status of Housing Successor
Property
Acquisition
Activity
Activity
1725 Ocean
April 11, 2000
October 2,
The Agency transferred title to the
Avenue
2018
City on March 9, 2011, and DOF
approved it as a housing asset of the
Housing Successor on October 2,
2013.
The property has been developed and
completed on March 17, 2014, with
160 affordable apartments.
1751
October 3, 2003
October 2,
The Agency transferred title to the
Cloverfield
2018
City on March 9, 2011, and DOF
Blvd
approved it as a housing asset of the
Housing Successor on October 2,
2013.
The property was developed and
completed on January 28, 2007
as a congregate housing and
emergency shelter, providing 55 beds
affordable to persons at or below
very-low income.
201819
June 26, 2009
October 2,
The Agency transferred title to the
Street
2019
City on March 9, 2011, and DOF
approved it as a housing asset of the
Housing Successor on October 2,
2014.
The property is vacant and the
Housing Successor will be proposing
in the near future a plan for the
disposition of the property.
Santa Monica Housing Successor
VIII. Description of Outstanding Obligations under Section 33413: This section
describes the outstanding inclusionary and replacement housing obligations, if any, under
Section 33413 that remained outstanding prior to dissolution of the former redevelopment
agency as of February 1, 2012 along with the Housing Successor's progress in meeting those
prior obligations, if any, of the former redevelopment agency and how the Housing Successor's
plans to meet unmet obligations, if any.
http:// www. smgov. net/Departments/HED/Housing_and Redevelopment/RDA/Redevelop
ment_Documents.aspx .
IX. Income Test: This section provides the information required by Section
34176.1(a)(3)(B), or a description of expenditures by income restriction for a five year period,
with the period beginning January 1, 2014 and whether the statutory thresholds have been
met. However, reporting of the Income Test is not required until 2019.
There is nothing to report at this time.
X. Senior Housing Test: This section provides the percentage units of deed - restricted
rental housing restricted to seniors and assisted individually or jointly by the Housing Successor,
its former Redevelopment Agency, and its host jurisdiction within the previous ten years in
relation to the aggregate number of units of deed - restricted rental housing assisted individually or
jointly by the Housing Successor, its former Redevelopment Agency and its host jurisdiction
within the same time period. For this Report the ten -year period reviewed is July 1, 2004 through
July 1, 2014.
Santa Monica Housing Successor
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= e $ *. r
XI. Excess Surplus Test: This section provides the amount of excess surplus
(unencumbered funds) in the LMIHAF, exceeding one million or the aggregate amount
deposited in the fund over the preceding four fiscal years if any, and the length of time that
the Housing Successor has had excess surplus, and the Housing Successor's plan for
eliminating the excess surplus.