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HomeMy WebLinkAboutED Housing Authority Funding AgreementCITY OF SAN RAFAEL AGENDA ITEM NO.: 8 MEETING DATE: March 21, 2011 REPORT TO MAYOR AND CITY COUNCIL SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING ENTERING INTO A FUNDING AGREEMENT WITH THE HOUSING AUTHORITY OF MARIN, PURSUANT TO THE AFFORDABLE HOUSING GRANT BETWEEN THE CITY OF SAN RAFAEL AND THE SAN RAFAEL REDEVELOPMENT AGENCY, FOR ADMINISTRATION AND ENFORCEMENT OF THE CITY'S BELOW MARKET RATE OWNERSHIP PROGRAM BETWEEN 2011-12 AND 2024-25; MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA SUBMITTED BY: ✓�' %�i9� ' APPROVED BY: W Nancy Mackle, Economic Develop6ent Director Jim Schutz, Interim , it� Manager a RECOMMENDATION: Staff recommends that the City Council adopt the attached resolution approving a Funding Agreement with the Housing Authority of the County of Marin for the administration and enforcement of the affordable ownership housing program and to expend affordable housing funds within the Redevelopment Project Area and within the City of San Rafael. BACKGROUND: The Redevelopment Agency has entered into an Affordable Housing Grant and Cooperation Agreement with the City of San Rafael. This agreement provides funding for the City to undertake affordable housing activities consistent with the Agency's Redevelopment Plan and Implementation Plan. Pursuant to this cooperation agreement , the City of San Rafael desires to enter into a Funding Agreement ("Funding Agreement") with the Housing Authority of the County of Marin (the "Authority") to continue administration of the City's affordable ownership housing program. California Redevelopment Law, Health and Safety Code Section 33334.2 (g), requires that the City Council make findings and approve the use of Agency affordable housing funds when the funds will be used on projects located outside of the Central San Rafael Redevelopment Project Area. FOR CITY CLERK ONLY File No.: City Council Meeting: Disposition: Page 2 ANALYSIS: San Rafael Municipal Code Section 14.16.030 requires the majority of new housing developments in the City to provide housing affordable to low and moderate -income households on site and for those units to remain affordable over time. There are presently 115 affordable ownership units in the City of San Rafael with long-term resale restrictions. The Authority has managed the City's affordable ownership housing program for many years with funding provided from the San Rafael Redevelopment Agency Affordable Housing Fund. City staff is recommending that the Authority continue to manage the program and the City of San Rafael continue to fund this program, from affordable housing funds received by the Redevelopment Agency, as the City has no other available funding for this program. The proposed Funding Agreement would allocate $100,000 annually, increased by two percent per year, for the administration of the program from Fiscal Year 2011-12 to Fiscal Year 2024-25. The Funding Agreement would constitute a debt of the Agency and would continue until the Agency bonds are paid off, provided the Agency continues to receive affordable housing funds. FISCAL IMPACT: The Funding Agreement provides for an annual payment of $100,000 to be increased at 2% per year. The total cost would be $1,629,342.00 between Fiscal Year 2011-12 and Fiscal Year 2024-25. ACTION REQUIRED: Adopt the attached resolution. ATTACHMENTS: Attachment A Funding Agreement RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING ENTERING INTO A FUNDING AGREEMENT WITH THE HOUSING AUTHORITY OF MARIN, PURSUANT TO THE AFFORDABLE HOUSING GRANT BETWEEN THE CITY OF SAN RAFAEL AND THE SAN RAFAEL REDEVELOPMENT AGENCY, FOR ADMINISTRATION AND ENFORCEMENT OF THE CITY'S BELOW MARKET RATE OWNERSHIP PROGRAM BETWEEN 2011-12 AND 2024-25; MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA WHEREAS, the City Council of the City of San Rafael (the "City") has adopted the Redevelopment Plan (the "Redevelopment Plan") for the Central San Rafael Redevelopment Project Area (the "Project Area"); and WHEREAS, the San Rafael Redevelopment Agency (the "Agency") is engaged in various activities in its efforts to provide affordable housing and to remove the blighting conditions that still remain in the Project Area pursuant to the Agency's Implementation Plan; and WHEREAS, the Agency has set objectives for affordable housing in accordance with the Amended and Restated Redevelopment Plan (the "Agency Plan") . for the Central San Rafael Redevelopment Project Area; and WHEREAS, in order to serve the objectives of the Agency Plan, the Agency desires to assist low and moderate income persons to achieve homeownership; and WHEREAS, the Agency has established a Low and Moderate Income Housing Fund, (the "Fund") pursuant to Health and Safety Code Section 33334.3; and WHEREAS, On February 22, 2011 the Agency approved entering into an Affordable Housing Grant and Cooperation Agreement with the City of San Rafael; and WHEREAS, San Rafael Municipal Code Section 14.16.030 requires the majority of new housing developments in the City to provide housing affordable to low and moderate income households on site and for those units to remain affordable over time; and WHEREAS, there are presently 115 affordable ownership units in the City of San Rafael with long term resale restrictions; and WHEREAS, the Housing Authority of the County of Marin, (the "Authority") is a public corporation authorized to provide decent, safe and sanitary housing for low and moderate income households; and WHEREAS, the Authority has expertise in providing management and oversight of the Below Market Rate Homeownership Program (the "BMR Ownership Program") and has administered the BMR Ownership Program for the City of San Rafael, the County of Marin and the majority of cities in the County for many years; and WHEREAS, there are no other means of financing the management and oversight of the BMR ownership Program; no general funds are available for this project at this time; or contemplated to be available for this project in the foreseeable future; and WHEREAS, the City, pursuant to the Agency and City Cooperation Agreement, desires to enter into a funding agreement (the "Agreement") with the Authority to provide ongoing funding for administration of the BMR Ownership Program; and WHEREAS, the BMR Ownership Program meets the Agency's goals of providing housing opportunities to low and moderate -income persons; all of the units have affordability restrictions of a minimum of forty-five years meeting the requirement of Health and Safety Code Section 33334.3. NOW, THEREFORE BE IT RESOLVED by the City of San Rafael as follows: Section 1. All the Recitals above are true and correct and incorporated herein. Section 2. In compliance with Section 33334.2(g) of the Law, the City Council hereby finds that: assistance to the affordable housing projects described in the Agreement and located outside the Project Area will be of benefit to the Redevelopment Plan, serve major Redevelopment Plan goals and objectives by maintaining housing available at affordable cost in the community, thereby decreasing the market pressure on the supply of affordable housing in the community and the Project Area. This finding is further based on the facts and analysis in the staff report incorporated in this Resolution. Section 3. The City Council hereby approves an expenditure of One Hundred Thousand dollars ($100,000) annually with a 2% annual increase projected through 2025, for a total $1,629,342.00 from the Fund for an agreement between the City and the Authority to administer the BMR Ownership Program between Fiscal Year 2010-11 and Fiscal Year 2024-25. Section 4. The City Council hereby approves the Funding Agreement between the City and the Authority and authorizes the Interim City Manager to enter into and execute the Agreement on behalf of the City in substantially in the form on file with the City Clerk, with such revisions as are reasonably determined necessary by the City signatory, such determination to be conclusively deemed to have been made by the execution of the Agreement by the City signatory. The Interim City Manager is authorized to implement the Agreement and take all further actions, and execute all other documents, which are necessary or appropriate to carry out the Agreement. BE IT FURTHER RESOLVED that this resolution shall take immediate effect upon adoption. I, ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council held on Monday, March 21, 2011, by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Esther C. Beirne, City Clerk FUNDING AGREEMENT THE CITY OF SAN RAFAEL And HOUSING AUTHORITY OF THE COUNTY OF MARIN (Below Market Rate Homeownership Program) THIS AGREEMENT, entered into this 22"d day of March 2011, by and between the City of San Rafael, hereinafter called "City" and the Housing Authority of the County, of Marin, hereinafter called "Authority", is made with reference to the following facts and circumstances: RECITALS A. Pursuant to Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.), the Agency is a duly constituted redevelopment agency under the laws of the State of California and pursuant to said laws is carrying out the Redevelopment Plan (Redevelopment Plan) for the Central San Rafael Project Area (Project Area). B. The Agency is authorized by the Community Redevelopment Law, Health and Safety Code §33000, et seq., to undertake certain actions, including the development and preservation of affordable housing, in order to alleviate blight and revitalize the Project Area. C. The Agency provided an Affordable Housing Grant and entered into a Affordable Housing Cooperation Agreement with the City of San Rafael. D. The Authority offers support and opportunities for low and moderate -income, first-time homebuyers to purchase homes inside and outside of the Project Area. E. The City desires to cooperate with the Authority and provide funding for the costs necessary to maintain said Below -Market Rate Ownership Program ("BMR Ownership Program"). E. In order to enable the Authority to continue its efforts to provide maintenance of owner applications and waiting lists, the administration of sales and resales, program monitoring, and as an inducement to the Authority to do so, the parties desire to enter into this Agreement providing for the City of San Rafael to contribute to the Authority funds provided by the Agency for the management and oversight of the BMR Ownership Program for so long as the Agency is allocated and is receiving tax increments from the Project Area. ATTACHMENT A AGREEMENTS The City of San Rafael and the Housing Authority of the County of Marin hereby agree as follows; 1. The Authority shall manage and oversee the program as described in the recitals to encourage and facilitate homeownership for low and moderate -income homeowners and preserve the affordability of the BMR homes, including homes within and outside the Project Area. Beginning July 1, 2011, the Agency agrees to annually contribute One Hundred Thousand Dollars ($100,000), increased each anniversary date thereafter by two percent (2%), to pay for such services, as outlined in the project budget attached hereto as Exhibit A, and incorporated herein by reference. 2. The Agency Contribution shalt be used solely to pay for the actual costs incurred by the Authority as necessary to implement the BMR Ownership program. 3. Third party legal fees will only be reimbursed based on the Authority's actual expenses incurred in protecting the long-term affordability of the BMR homes and shall be paid out of the amount provided in Section I. 4. This Agreement constitutes an indebtedness of the Agency incurred in carrying out the Redevelopment Project, and a pledge of Tax hlcrements from the Redevelopment Project to repay such indebtedness, under the provisions of Section 16, Article 16 of the California Constitution and Section 33670 et seq. of the Health and Safety Code; provided, however, that such pledge of Tax Increments shall always be subordinate and subject to the right of the Agency to pledge or commit Tax Increments from the Project Area to repay bonds or other indebtedness incurred by the Agency in carrying out the Redevelopment Project. 5. Failure by either party to perform its obligations hereunder shall constitute a default under this Agreement, and the other party may institute legal action to cure, correct, or remedy such default, to recover damages for such default or to obtain any other remedy, including injunctive or declaratory relief, consistent with the purpose of this Agreement. In addition, in the event the Authority fails to perform the services required hereunder and fails to promptly cure such default after written notice from the Agency, Agency may terminate this Agreement, and the parties shall have no further rights against or obligations to each other. 6. Authority shall fully indemnify and hold the City harmless against any and all liability, cost, claim, damage or expense imposed or claimed, including attorney's fees and other legal expenses, arising directly or indirectly from any act or omission of Authority or its directors, members, agents, employees, or contractors, regarding the performance of Authority's duties hereunder, including all claims relating to the injury or death of any person or damage to any property. 7. This Agreement shall be effective beginning on the date executed and shall continue thereafter until the earlier of November 20, 2025 or the termination of Agency's receipt of tax increments. 8. This Agreement may be amended only by an instrument in writing approved and executed by the parties hereto. IN WITNESS, WHEREOF, the parties hereto executed this Agreement as of the date set forth below. CITY OF SAN RAFAEL HOUSING AUTHORITY COUNTY OF MARIN to Date: Date: Approved as to form: Approved as to form: CITY ATTORNEY AUTHORITY COUNSEL IMS Date: Date: Exhibit A Scope of Services Program Management and Monitoring Services Provide sale and resale services to cause the sale or resale of BMR units Provide BMR program monitoring services Provide information and education Annual Program Management Services Fee $70,000 Estimated Reimbursement of 3rd Party Legal Services Charges associated with preventing foreclosure, over -encumbrances, and other activities that may put the long -terror affordability of the homes at risk. Legal Services $30,000 Total Current Estimated Annual Costs for Services $100,000