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HomeMy WebLinkAboutCM Supporting SB 654 & AB 1585Agenda Item No: 3 c. Meeting Date: March 5, 2012 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: City Manager Prepared by: Stephanie Lovettei_ Economic Development Manger City Manager Approval.i i SUBJECT: RESOLUTION SUPPORTING SB 654 (STEINBERG) AND AB 1585 (Perez) SUCCESSOR HOUSING ENTITIES RETAINING AFFORDABLE HOUSING FUNDS OF FORMER REDEVELOPMENT AGENCIES RECOMMENDATION: Join with the League of California Cities, the California Redevelopment Association, and the Non Profit Housing Association in supporting SB 654 and AB 1585. BACKGROUND AND ANALYSIS: The City of San Rafael ("City") has agreed to be a successor housing agency to the former San Rafael Redevelopment Agency ("Agency"). As the successor housing agency, the City is responsible for the financial and reporting requirements of the former SRRDA and for completing any outstanding transactions. There is no funding allocated to the successor housing agencies for these activities. The current statute requires all affordable housing fund balances of former redevelopment agencies to be transferred to the County for allocation to the County, Schools and other taxing agencies within former redevelopment agency boundaries. SB 654 and AB 1585 are "clean up" bills that would allow successor housing agencies to retain redevelopment agency affordable housing funds to be spent for affordable housing activities within their city. San Rafael has used affordable housing funds for the following activities; assisting non-profit owners to renovate their buildings in exchange for long term affordability covenants, assisting developers that are providing affordable housing units in new market rate housing in the Downtown, and for the City's affordable ownership program. Downtown housing developments that received some Agency housing assistance included San Rafael Town Center, Centertown, Lone Palm, Rotary Manor, Boyd Court and One H Street. Affordable housing funds were also used for the City's affordable ownership program, commonly known as the ownership below market rate ("BMR") program. The Agency has loaned money to Marin Housing to purchase existing BMR units when those units are at risk. The Agency has been repaid when the affordable unit is resold to another low or moderate income household. All ownership BMR units have long term affordability restrictions. FOR CITY CLERK ONLY File No.: f /`. Council Meeting: Disposition: t �7 6= FISCAL IMPACT: The 2011-12 Agency audit showed an ending balance of $1.5 million dollars in non -reserved affordable housing funds and an additional $1.1 million dollars reserved for options to purchase at risk BMR units. These options were previously approved by the City Council and the former Agency. If used, these reserved funds will be returned to the Successor Agency when the BMR units are resold to another income qualified purchaser. The passage of SB 654 and SB 1585 would assure that the affordable housing funds of the former Agency would continue to be spent on affordable housing activities within the City of San Rafael. OPTIONS: • Provide a public statement by adopting the Resolution supporting SB 6.54 and AB 1585 • Modify the Resolution • Request further information • Reject the staff recommendation and not support SB 654 and AB 1585 ACTION REQUIRED: Staff recommends that the Council adopt the Resolution supporting SB 654 and AB 1585. ATTACHMENTS: Text of SB 654 and AB 1585. RESOLUTION NO. 13296 RESOLUTION SUPPORTING SB 654 (STEINBERG) AND AB 1585 (PEREZ) SUCCESSOR HOUSING ENTITIES RETAINING AFFORDABLE HOUSING FUNDS OF FORMER REDEVELOPMENT AGENCIES WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et sec.; the "Redevelopment Law"), the City Council (the "City Council") of the City of San Rafael (the "City") adopted the Redevelopment Plan for the Central San Rafael Redevelopment Project Area by Ordinance No. 1079, on November 20, 1972 (as amended from time to time, the "Redevelopment Plan"); and WHEREAS, the San Rafael Redevelopment Agency (the "Agency") is responsible for implementing the Redevelopment Plan pursuant to the Redevelopment Law; and WHEREAS, AB x 1 26 (the "Dissolution Act") has been enacted to significantly modify the Redevelopment Law; and WHEREAS, on December 29, 2011, the California Supreme Court delivered its decision in the California Redevelopment Association v. Matosantos case, finding the Dissolution Act constitutional and AB I x 27 (the Voluntary Program Act) unconstitutional; and WHEREAS, the Court's decision means that all California redevelopment agencies will dissolve on February 1, 2012 pursuant to the Dissolution Act; and WHEREAS, the Dissolution Act provides that the city that authorized the creation of the redevelopment agency shall be the "successor agency" to the dissolved redevelopment agency unless the city elects not to serve as the successor agency under Section 34173(d)(1) of the Redevelopment Law; and WHEREAS, Section 34176(a) of the Redevelopment Law provides that the city that authorized the creation of a redevelopment agency may elect to retain the housing assets and functions previously performed by the former redevelopment agency; and WHEREAS, on January 3, 2012 the City Council adopted a resolution stating its intention to serve as, the successor agency for the Agency in accordance with Section 341710) and Section 34173 of the Redevelopment Law; and WHEREAS, on January 3, 2012 the City adopted a resolution electing to retain the housing assets and functions previously performed by the Agency in accordance with Section 34176 of the Redevelopment Law. WHEREAS, the Dissolution Act limits the revenues available to successor housing agencies; and WHEREAS, SB 645 and AB 1585 would allow successor housing agencies, including the City, to retain the assets of the dissolved redevelopment agency to be used for affordable housing purposes. NOW, THEREFORE, BE IT RESOLVED, that the City Council hereby supports SB 654 and AB 1585, BE IT FURTHER RESOLVED that the City Council hereby directs staff to notify Senator Leno, Assemblymember Huffman, the sponsors of SB 654 and AB 1585, the California League of Cities, the California Redevelopment Association and the MCCMC Legislative Committee regarding this action. 1, 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 the fifth day of March 2012, by the following vote, to wit: AYES: COUNCILMEMBERS: Connolly, Heller, Levine, McCullough & Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None 2s Esther C. Beirne, City Clerk 2 AB 1585, as introduced, John A. Perez. Redevelopment. LEGISLATIVE COUNSEL'S DIGEST Existing law dissolves redevelopment agencies and community development agencies, as of February 1, 2012, and designates successor agencies, as defined. Existing law requires successor agencies to wind down the affairs of the dissolved redevelopment agencies and to, among other things, repay enforceable obligations, as defined, and to remit unencumbered balances of redevelopment agency funds, including housing funds, to the county auditor -controller for distribution to taxing entities. Existing law authorizes the city, county, or city and county that authorized the creation of a redevelopment agency to retain the housing assets, functions, and powers previously performed by the redevelopment agency, excluding amounts on deposit in the Low and Moderate Income Housing Fund. This bill would modify the scope of the term "enforceable obligation" and modify provisions relating to the transfer of housing funds and responsibilities associated with dissolved redevelopment agencies. The bill would provide that any amounts on deposit in the Low and Moderate Income Housing Fund of a dissolved redevelopment agency be transferred to specified entities. The bili would make conforming changes. Existing law provides that, upon a specified date, agreements, contracts, or arrangements between the city or county, or city and county that created the redevelopment agency and the redevelopment agency are invalid. Notwithstanding this provision, an agreement that provided loans or other startup funds for the agency that was entered into within 2 years of the formation of the agency is valid and binds the successor agency. The bill would expand this exception to include an agreement involving a loan specific to a project area and other specified obligations. The bill would provide that other loan agreements entered into between the redevelopment agency and the city, county, or city and county that created it are deemed to be enforceable obligations, except as specified. The bill would further expand upon, and clarify, the scope of the.successor agency's and the oversight board's responsibilities. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 213. Appropriation: no. Fiscal committee: yes. State -mandated local program: no. SB 654, as amended, Steinberg. Redevelopment Legislative counsel's digest Existing law suspends various activities of redevelopment agencies and prohibits the agencies from incurring indebtedness for a specified period. Existing law also dissolves redevelopment agencies and community development agencies, as of October 1, 2011, and designates successor agencies, as defined. Existing law requires successor agencies to wind down the affairs of the dissolved redevelopment agencies and to, among other things, repay enforceable obligations, as defined, and to remit unencumbered balances of redevelopment agency funds, including housing funds, to the county auditor -controller for distribution to taxing entities. Existing law authorizes the city, county, or city and county that authorized the creation of a redevelopment agency to retain the housing assets, functions, and powers previously performed by the redevelopment agency, excluding amounts on deposit in the Low and Moderate Income Housing Fund. This bill would revise the definition of the term "enforceable obligation" and modify provisions relating to the transfer of housing funds and responsibilities associated with dissolved redevelopment agencies. The bill would provide that any amounts on deposit in the Low and Moderate Income Housing Fund of a dissolved redevelopment agency be transferred to specified entities. The bill would make conforming changes. Existing law provides that upon a specified date, agreements, contracts, or arrangements between the city or county, or city and county that created the redevelopment agency and the redevelopment agency are invalid. Notwithstanding this provision, an agreement that provided loans or other startup funds for the agency that was entered into within 2 years of the formation of the agency is valid and binds the successor agency. The bill would expand this exception to include an agreement involving a loan specific to a project area and other specified obligations. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3 majority. Appropriation: no. Fiscal committee: yes. State -mandated local program: no. CITY OF SAN RAFAEL INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY. SRRA / SRCC AGENDA ITEM NO. DATE OF MEETING: March 5, 2012 FROM: Stephanie Lovette DEPARTMENT: Economic Development C ENIED DATE: February 22, 2012 E B 2 2 2 Fill 2 TITLE OF DOCUMENT: C Il ATT(--- R? h I Cy I I VAIAPI Ll RESOLUTION SUPPORTING SB 654 (STEINBERG) AND AB 1585 (Perez) SUCCESSOR HOUSING ENTITIES RETAINING AFFORDABLE HOUSING FUNDS OF FORMER REDEVELOPMENT AGENCIES o ............. ad—(ii5i�—af6re) (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL AGENCY APPROVED AS TO FORM: AGENDA ITEM: f L J' City`' anager (signature) City Attorney (signaturp