Loading...
Item 13 - Planning and Administrative Charges for Affordable Housing Program FROM: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency James L. Bowersox, City Manager/Executive Dir~ Deborah Johnson, Director of it:ment Servicesl Assistant Executive Directo Tracey Bohlen, Senior Manage nalYS~ March 1, 2005 AGENDA REPORT SUMMARY TO: INITIATED BY: DATE: SUBJECT: Planning and Administrative Charges for Affordable Housing Program FY 2003-2004 ABSTRACT California Health and Safety Code [Sections 33334.3(d) and (e)] authorize Redevelopment Agencies to charge the actual cost of planning for and administering affordable housing programs to their Low- and Moderate-Housing Funds. Costs must be directly related to specific affordable housing activities and not be "disproportionate" to direct costs. It is required that the Agency annually approve the planning and administrative expenses and determine that the charges are necessary for the production, improvement, or preservation of low- and moderate-income housing. The accounts are analyzed and the appropriate charges are posted at the end of each fiscal year. The findings are presented in this report for approval. ENVIRONMENTAL REVIEW This action is not subject to CEaA review. FISCAL IMPACT None. PUBLIC NOTIFICATION AND CORRESPONDENCE None. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency adopt the attached resolutions that approve the expenditure of $611,815.99 in Low- and Moderate-Housing Funds for planning and administration of the Agency's affordable housing program in FY 2003-2004, and make the requisite benefit finding regarding the use of Low- and Moderate-Housing Funds for activities outside the Proiect Area. ACTION 1 of 11 March 1, 2005 Item # 13 CITY OF POWAY AGENDA REPORT This report is included on the Consent Calendar. There will be no separate discussion of the report prior to approval by the City Council unless members of the Council, staff or public request it to be removed from the Consent Calendar and discussed separately. If you wish to have this report pulled tor discussion, please fill out a slip indicating the report number and give it to the City Clerk prior to the beginning of the City Council meeting. TO: FROM: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency James L. Bowersox, City Manager/Executive Dire~ Deborah Johnson, Director of R~Rt!' opment. Services/ Assistant Executive DirectoAt~ t.. Tracey Bohlen, Senior Managem t Analy~v",:.Y \'-....../. INITIATED BY: DATE: SUBJECT: March 1, 2005 Planning and Administrative Charges for Affordable Housing Program FY 2003-2004 BACKGROUND Califomia Health and Safety Code [Sections 33334.3(d) and (e)] authorize Redevelopment Agencies to charge the actual cost of planning for and administering affordable housing programs to their Housing Funds. Costs must be directly related to specific affordable housing activities and not be "disproportionate" to direct costs. It is required that the Agency annually approve the planning and administrative expenses and determine that the charges are necessary for the production, improvement, or preservation of low- and moderate-income housing. The accounts are analyzed and the appropriate charges are posted at the end of each fiscal year. The findings are presented in this report for approval. FINDINGS The first cost component involves City and Agency staff time devoted to the Agency's affordable housing program. These staff costs are directly associated with those eligible projects and programs listed on Attachment C. Staff time is tracked on biweekly time sheets submitted to and reviewed by Agency staff during the year. Staff costs are calculated by taking the actual number of hours worked by each employee then multiplying this number by the fully weighted hourly cost of that employee. The result of this calculation is the identification of staff costs totaling $421,055.10. The second cost component is for legal expenses directly related to the Agency's affordable housing program. These legal services were provided by Agency General Counsel (McDougal, Love, Eckis, Smith & Boehmer) and Agency Special Counsel (Stradling, Yocca, Carlson & Rauth), and totaled $24,900.76 during FY2003-D4. Thethird cost component is for assistance provided by the Agency's affordable housing consultant, 2 of 11 March 1, 2005 Item # /3 Planning and Administrative Charges for Affordable Housing Program FY 2003-2004 March 1, 2005 Page 2 David Paul Rosen & Associates (ORA), which totaled $47,324.40. The cost of the annual independent audit of the Agency's Housing Fund was $6,672.55. The final category of expenses includes other consultants, training, membership dues, travel and meetings, and postage expenses directly associated with the Agency's affordable housing program, which totaled $111,863.18. Table 1 below summarizes the Agency's planning and administration costs charged to the Housing Fund during FY 2003-04. Table 1 Staff Costs Legal Expenses Housing Consultant and Studies Other Consultants, dues, postage, training, meetings Audit Total $421,055.10 $24,900.76 $47,324.40 $111,863.18 $6,672.55 $611,815.99 Table 2 below illustrates the relationship between direct costs and planning/administration costs for the Agency's Housing Fund over the past five years. Table 2 FY 1999-00 $4,809,530 $459,665 9.6% FY 2000-01 $7,490,213 $501,406 6.7% FY 2001-02 $4,238,410 $489,627 11.6% FY 2002-03 $4,353,092 $519,039 11.9% FY 2003-04 $5,929,911 $611,816 10.3% Totals $26,821,156 $2,581,553 9.6% Average $5,364,231 $516,311 9.6% Staff confirmed that charges for planning and administration are proportional to the actual direct cost of producing, improving, or preserving the community's supply of affordable housing. Consistent with the methodology approved in 1993, staff averaged the administration costs incurred over the past five years to confirm that costs are reasonable and proportionate. This "rolling average" method was recommended by the Agency's Special Legal Counsel as the best approach for confirming the proportionality of planning and administration expenses over time. Planning costs are usually high in the early, preconstruction phases of project development and prior to incurring the majority of direct costs. 3 of 11 March 1, 2005 Item # t 3 Planning and Administrative Charges for Affordable Housing Program FY 2003-2004 March 1, 2005 Page 3 The average percentage of planning/administration costs in relation to direct costs is 9.6%, as illustrated in Table 2. The use of 9.6% of the total Low- and Moderate-Fund expenditure for planning and administration is a reasonable amount and not disproportionate to the cost incurred for projects and programs managed by the Housing Division. The attached City/Agency resolutions (Attachments A & B) make the requisite findings of necessity for planning and administrative costs charged to the Housing Fund in FY 2003- 2004. The City Council resolution also confirms the benefit of expenses incurred for affordable housing activities outside the boundaries of the Redevelopment Project Area. ENVIRONMENTAL REVIEW This item is not subject to CEQA review. FISCAL IMPACT None. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE None. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency adopt the attached resolutions that approve the expenditure of $611,815.99 in Low- and Moderate-Housing Funds for planning and administration ofthe Agency's affordable housing program in FY 2003-2004, and make the requisite benefit finding regarding the use of Low- and Moderate-Housing Funds for activities outside the Project Area. Attachments: A. B. C. City Council Resolution Redevelopment Agency Resolution Affordable Housing Projects and Programs 4 of 11 March 1, 2005 Item # J 3 RESOLUTION NO. 05- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA FINDING THAT HOUSING FUND MONIES USED OUTSIDE THE PROJECT AREA FOR PLANNING AND ADMINISTRATIVE COSTS IN FY 2003-04 WERE OF BENEFIT TO THE PROJECT AREA WHEREAS, Section 33334.2 of the California Health and Safety Code requires that not less than 20 percent of taxes which are allocated to the Redevelopment Agency be used for the purpose of increasing, improving, and preserving the community's supply of housing available at an affordable housing cost to households with low and moderate incomes; and WHEREAS, the 2005 to 2009 Redevelopment and Housing Implementation Plan, approved by the Redevelopment Agency Board on December 21, 2004, and outlines projects and programs that will increase, improve and preserve the supply of housing available at an affordable housing cost to households with low and moderate incomes; and WHEREAS, Section 33334.3(e) provides that the Redevelopment Agency may charge its Low- and Moderate-Housing Fund for planning and administrative costs which directly relate to qualified low- and moderate-income housing projects and programs; and WHEREAS, Section 33334.3(d) of the California Health and Safety Code provides that the Redevelopment Agency must determine annually that the planning and administrative expenses paid by the Low- and Moderate-Housing Fund are necessary for the production, improvement or preservation of low- and moderate-income housing; and WHEREAS, the Redevelopment Agency may expend monies from its Low- and Moderate-Income Housing Fund for affordable housing projects and programs outside the Project Area upon a finding by the Legislative Body that said expenditures are of benefit to the Project Area; and WHEREAS, in 1993 the Redevelopment Agency approved a detailed method for calculating the actual cost of planning and administering the Agency's affordable housing projects and programs; and WHEREAS, Redevelopment Agency staff have completed a thorough analysis to calculate the actual costs directly associated with the planning and administration of affordable housing projects and programs that were charged to the Low- and Moderate- Housing Fund during FY 2003-04. ATTACHMENT A 5 of 11 March 1, 2005 Item # 13 Resolution No. 05- Page 2 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1. The expenditure of monies from the Redevelopment Agency's Low- and Moderate-Income Housing Fund in FY 2003-04 to cover costs associated with planning and administering its affordable housing program was necessary for the Agency to meet its obligation to increase, improve, and preserve the supply of affordable housing available within the City of Poway. Section 2. The expenditure of $611,815.99 from the Redevelopment Agency's Low- and Moderate-Income Housing Fund in FY 2003-04 was necessary to cover actual costs incurred by the Agency in its efforts to increase, improve and preserve the community's supply of housing available at an affordable housing cost to households with low and moderate incomes. Section 3. The amount of $611,815.99 represents the actual cost of planning for and administering the affordable housing program, and said cost is not disproportional to the Housing Fund monies expended to produce, improve or preserve said affordable housing. Section 4. Housing Fund monies that were expended during FY 2003-04 for planning and administering the affordable housing program, some activities of which were outside the Paguay Redevelopment Project Area, benefit the Project Area. PASSED, ADOPTED, AND APPROVED by the City Council of the City of Poway, California, at a regular meeting this 1 st day of March 2005. Michael P. Cafagna, Mayor ATTEST: L. Diane Shea, City Clerk 6 of 11 March 1, 2005 Item # J 3 Resolution No. 05- Page 3 STATE OF CALIFORNIA ) . )SS COUNTY OF SAN DIEGO ) I, L. Diane Shea, City Clerk of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 05- was duly adopted by the City Council at a meeting of said City Council held on this 1 st day of March 2005, and that it was so adopted by the following vote: AYES: NOES: DISQUALIFIED: ABSENT: L. Diane Shea, City Clerk City of Poway 7 of 11 March 1, 2005 Item # 13 RESOLUTION NO. R-05- A RESOLUTION OF THE POWAY REDEVELOPMENT AGENCY FINDING THAT PLANNING AND ADMINISTRATIVE COSTS CHARGED TO THE HOUSING FUND IN FY 2003-04 WERE NECESSARY TO INCREASE, IMPROVE AND PRESERVE THE SUPPLY OF LOW- AND MODERATE-INCOME HOUSING WHEREAS, Section 33334.2 of the California Health and Safety Code requires that not less than 20 percent of taxes which are allocated to the Redevelopment Agency be used for the purpose of increasing, improving, and preserving the community's supply of housing available at an affordable housing cost to households with low and moderate incomes; and WHEREAS, the Redevelopment and Housing Implementation Plan, approved by the Redevelopment Agency Board on June 29, 1999, and Redevelopment and the 2005 to 2009 Redevelopment and Housing Implementation Plan approved by the Redevelopment Agency Board on December 21, 2004, outlines projects and programs that will increase, improve and preserve the supply of housing available at an affordable housing cost to households with low and moderate incomes; and WHEREAS, Section 33334.3(e) provides that the Redevelopment Agency may charge its Low- and Moderate-Housing Fund for planning and administrative costs which directly relate to qualified low- and moderate-income housing projects and programs; and WHEREAS, Section 33334.3(d) of the California Health and Safety Code provides that the Redevelopment Agency must determine annually that the planning and administrative expenses paid by the Housing Fund are necessary for the production, improvement or preservation of low- and moderate-income housing; and WHEREAS, in 1993 the Redevelopment Agency approved a detailed method for calculating the actual cost of planning and administering the Agency's affordable housing projects and programs; and WHEREAS, Redevelopment Agency staff have, in accordance with the approved methodology, completed an analysis to calculate the actual costs directly associated with the planning and administration of the affordable housing program that were incurred and charged to the Housing Fund during FY 2003-04. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Poway Redevelopment Agency as follows: ATTACHMENT B 8 of 11 March 1, 2005 Item #~ Resolution No. R-05- Page 2 Section 1. The expenditure of monies from the Redevelopment Agency's Low- and Moderate-Income Housing Fund in FY 2003-04 to cover costs associated with planning and administering its affordable housing program was necessary for the Agency to meet its obligation to increase, improve, and preserve the supply of affordable housing available within the City of Poway. Section 2. The expenditure of $611,815.99 from the Redevelopment Agency's Low- and Moderate-Income Housing Fund in FY 2003-04 was necessary to cover actual costs incurred by the City and Agency in their efforts to increase, improve and preserve the communitys supply of housing available at an affordable housing cost to households with low- and moderate-incomes. Section 3. The amountof$611 ,815.99 represents the actual cost of planning for and administering the affordable housing programs, and said cost is not disproportional to the Housing Fund monies expended to produce, improve or preserve said affordable housing. Section 4. Housing Fund monies that were expended during FY 2003-04 for planning and administering the affordable housing program, some activities of which were outside the Paguay Redevelopment Project Area, benefit the Project Area. PASSED, ADOPTED, AND APPROVED by the Board of Directors of the Poway Redevelopment Agency at a regular meeting this 1 st day of March 2005. Michael P. Cafagna, Chairman ATTEST: L. Diane Shea, Secretary 9 of 11 March 1, 2005 Item # 13 Resolution No. R-05 Page 3 STATE OF CALIFORNIA ) )SS COUNTY OF SAN DIEGO ) I, L. Diane Shea, Secretary ofthe poway Redevelopment Agency, do hereby certify under penalty of perjury that the foregoing Resolution No. R-OS was duly adopted by the Board of Directors at a meeting of said Board held on this 1 st day of March 2005, and that it was so adopted by the following vote: AYES: NOES: DISQUALIFIED: ABSENT: L. Diane Shea, Secretary Poway Redevelopment Agency 10 of 11 March 1, 2005 Item # 13 Affordable Housing Projects and Programs FY 2003-04 1. Affordable Housing Assistance and Referral Program 2. Brighton Avenue 3. Brookview Village 4. Community Road 5. Evanston Affordable Ownership Site 6. Haley Ranch Estates 7. Hillside Village 8. Homeownership Program Development 9. Los Arcos 10. Mixed-Use Poway Road Site 11. Monte Vista 12. Multifamily Rehabilitation Strategy 13. Nonprofit Capacity Building Program 14. Oak Knoll Revitalization Area 15. Park and Ride Site 16. Park View Terrace 17. Redevelopment and Housing Advisory Committee (Housing Only) 18. Residential Rehabilitation Loan Program 19. Special Friends Foundation 20. Redevelopment Agency Administration - Annual Report, Annual Newsletter, Budget 21. York Avenue Affordable Ownership Site ATTACHMENT C 11 of 11 March 1, 2005 Item # 13