Loading...
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 �f 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 UMMM 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 AOMM = 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.