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AGENDA BILL Agenda Item No. 5(C) Date: November 5, 2013 To: El Cerrito City Council From: Hilde Myall, Housing Program Manager Subject: Low and Moderate Income Housing Asset Fund Budget Adjustment for Housing Loan Obligations ACTION REQUESTED Staff requests that the City Council adopt a resolution approving the following actions: 1) Acknowledging the receipt of $531,152 in Redevelopment Property Tax Trust Fund proceeds from the El Cerrito Successor Agency to the City Low and Moderate Income Housing Asset Fund (Fund 232) to be held as restricted funds to fund approved housing loan obligations pursuant to the Recognized Obligation Payment Schedule (ROPS) 13-14A; and 2) Authorizing the appropriation of $531,152 from the City Low and Moderate Income Housing Asset Fund from funds received through the Successor Agency pursuant to ROPS 13-14A, to fund a loan commitment to Eden Housing Inc. in the amount of $60,000 and a loan commitment to Ohlone Gardens L.P. in the amount of $471,152 in accordance with the terms of the existing housing loan agreements. BACKGROUND Pursuant to the Dissolution Act, the City elected to serve as the housing successor to the dissolved El Cerrito Redevelopment Agency, responsible for affordable housing projects and activities. In Fiscal Year 2012, the City acquired the existing loan agreements with Ohlone Gardens L.P. and Eden Housing Inc. (Housing Loan Agreements) from the El Cerrito Redevelopment Agency in accordance with State law as housing assets. The City has the underlying responsibility for administering the Housing Loan Agreements. When the El Cerrito Redevelopment Agency dissolved, outstanding housing loan obligations became a liability of the Successor Agency to the former El Cerrito Redevelopment Agency (Successor Agency). On ROPS 13-14A, housing loan obligations were approved in the amount of $471,152 pursuant to the Ohlone Gardens L.P. housing loan agreement and $60,000 pursuant to the Eden Housing Inc. housing loan agreement for a total amount of $531,152. Sufficient funds were available in County-administered to fund these obligations. The Successor Agency holds these funds. ---PAGE BREAK--- Agenda Item No. 5(C) Page 2 ANALYSIS No appropriations were made in the City Low & Moderate Income Housing Asset Fund during the Fiscal Year 2014 budget process for expenditure of funds related to the Ohlone Gardens L.P. and Eden Housing Inc. loan agreements as the housing loan obligations had not yet been approved through the ROPS process and sufficient funds determined to be available. Subsequent to the May 2013 approval by the State Department of Finance of ROPS 13- 14A, the funds necessary to meet the Ohlone Gardens and Eden obligations were disbursed to the Successor Agency from the Redevelopment Property Tax Trust Fund The Successor Agency has indicated it has sufficient funds to fund the approved Ohlone Gardens and Eden Housing loan obligations. As the Housing Loan Agreements are held and administered by the City as housing successor, the Successor Agency proposes to transfer housing loan obligation funds in the amount of $531,132 to the City Low & Moderate Income Housing Asset Fund to be held for restricted use in payment of the housing loan commitments to Ohlone Gardens L.P and Eden Housing Inc. in accordance with the requirements of the Housing Loan Agreements. The receipt of funds and subsequent proposed expenditure of City Low & Moderate Income Housing Asset Funds necessitates an amendment to the FY 2013-14 budget. The total loan amount of the Ohlone Gardens L.P. loan agreement is $3.5 million. With the funding and disbursement of the $471,152 approved on ROP 13-14A, the entire $3.5 million loan commitment will have been disbursed to the project. The Ohlone Gardens housing development has received entitlements and all financing commitments. The project developer, Resources for Community Development, intends to submit for building permits in December 2014 and to begin construction of the project in Spring 2014. The total amount of the Eden Housing Inc. loan agreement is $350,000. With the funding and disbursement of the $60,000 approved on ROP 13-14A, a total of $100,000 of the loan commitment will have been disbursed to the project. The outstanding balance of $250,000 is an enforceable obligation of the Successor Agency and has been listed on the Recognized Obligations Schedule for the January through June 2014 period. Pursuant to the terms of the Eden loan agreement, no funds in excess of $100,000 can be disbursed until Eden has executed a Disposition and Development Agreement with the City for the subject property. ---PAGE BREAK--- Agenda Item No. 5(C) FINANCIAL CONSIDERATIONS Acceptance of $531,152 in Successor Agency funds by the City Low & Moderate Income Housing Asset Fund and expenditure of $531,152 for housing loan commitments is effectively a pass-through of funds to meet the funding obligation to Ohlone Gardens LP and Eden Housing, Inc. and to comply with the terms of the Housing Loan Agreements. The appropriation for expenditure of these funds is consistent with the purpose of the Housing Asset Fund to preserve, improve and increase the supply of affordable housing within the City. This appropriation does not impact the City's General Fund or other City funds. LEGAL CONSIDERATIONS The Counsel to the City as housing successor has reviewed this report and the attachments. Scott Hanin, City Manager Attachments: 1. Resolution 2. Adopted ROPS 13-14A 3. DOF ROPS 13-14A approval letter Page 3 ---PAGE BREAK--- Agenda Item No. 5(C) Attachment 1 Page 1 of 2 RESOLUTION NO. 2013–XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO AS HOUSING SUCCESSOR (THE “CITY”) ACKNOWLEDGING THE RECEIPT OF FIVE HUNDRED THIRTY-ONE THOUSAND ONE HUNDRED THIRTY-TWO DOLLARS ($531,132) IN REDEVELOPMENT PROPERTY TAX TRUST FUND MONIES FROM THE SUCCESSOR AGENCY TO THE FORMER EL CERRITO REDEVELOPMENT AGENCY FOR THE PURPOSE OF PAYMENT OF APPROVED RECOGNIZED OBLIGATION PAYMENTS 13-14A HOUSING LOAN OBLIGATIONS TO OHLONE GARDENS L.P. AND EDEN HOUSING, INC. AND AUTHORIZING THE APPROPRIATION OF FIVE HUNDRED THIRTY-ONE THOUSAND ONE HUNDRED THIRTY-TWO DOLLARS ($531,132) FROM FISCAL YEAR 2014 BUDGET OF THE CITY LOW AND MODERATE INCOME HOUSING ASSET FUND FOR THE PURPOSE OF FUNDING APPROVED LOAN COMMITMENTS TO OHLONE GARDENS L.P. AND EDEN HOUSING, INC. WHEREAS, as part of the 2011-12 State budget bill, AB1x26 (the “Dissolution Act”) was enacted and significantly modified the Redevelopment Law to require the dissolution of redevelopment agencies throughout California and the establishment of successor agencies to wind down the former redevelopment agencies’ affairs; and WHEREAS, on August 15, 2011, pursuant to the Dissolution Act, the City elected to serve as the Successor Agency to the El Cerrito Redevelopment Agency (the “Successor Agency”); and WHEREAS, the City adopted Resolution No. 2012-04 on January 17, 2012 electing to retain the housing assets and functions previously performed by the El Cerrito Redevelopment Agency (“RDA”) in accordance with Section 34176 of the Redevelopment Law and becoming the housing successor to the El Cerrito Redevelopment Agency (“Housing Successor”); and WHEREAS, the RDA was dissolved effective February 1, 2012 pursuant to the State Budget bill ABX1 26 (the “Dissolution Act”) and all housing assets, less the unencumbered housing balance, and obligations of the former RDA were transferred to the City as housing successor by operation of law; and all liabilities were transferred to the Successor Agency; and WHEREAS, the City acquired a loan agreement with Ohlone Gardens L.P. and a loan agreement with Eden Housing, Inc. (the “Housing Loan Agreements”) from the El Cerrito Redevelopment Agency in accordance with Health and Safety Code Section 34176(a) as Housing Assets, as defined in Section 34176(e). ---PAGE BREAK--- Agenda Item No. 5(C) Attachment 1 Page 2 of 2 NOW THEREFORE, BE IT RESOLVED AS FOLLOWS: 1. The City Council finds that the above recitals are accurate. 2. The City Council hereby acknowledges receipt of five hundred thirty-one thousand one hundred thirty-two dollars ($531,132) in from the Successor Agency to the former El Cerrito Redevelopment Agency to be held as restricted funds to fund approved housing loan obligations pursuant to the Recognized Obligation Payment Schedule (ROPS) 13- 14A. 3. The City Council hereby authorizes the appropriation of $531,132 in the City Low and Moderate Income Housing Asset Fund for payment of loan obligations to Eden Housing, Inc. and Ohlone Gardens L.P. pursuant to the terms of those respective loan agreements. 4. This Resolution shall become effective immediately upon its adoption. I CERTIFY that at the regular meeting on November 5, 2013, the City Council of the City of El Cerrito passed this resolution by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS of this action, I have hereunto set my hand and affixed the official Seal of said City, this day of November, 2013. Cheryl Morse, City Clerk Approved: Gregory B. Lyman, Mayor ---PAGE BREAK--- Agenda Item No. 5(C) Attachment 2 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- Agenda Item No. 5(C) Attachment 3 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK---