HomeMy WebLinkAboutAGENDA REPORT 2020 1104 CCSA REG ITEM 10ICITY OF MOORPARK, CALIFORNIA
City Council Meeting
of November 4, 2020
ACTION Approved Staff Recommendation.
(Roll Call Vote: Unanimous).
BY B.Garza.
I. Consider Forgiveness of Two CalHome Mobilehome Rehabilitation Loans
Totaling $34,063.25. Staff Recommendation: 1) Authorize forgiveness of the
outstanding mobilehome rehabilitation loan to Ms. Cheryl Valdez in the amount of
$15,643.00, and 2) Authorize write-off of outstanding mobilehome rehabilitation
loan to Mr. Anthony Kramer in the amount of $18,420.25, and 3) Authorize the
Finance Director, or designee, to complete the necessary entries to forgive the
outstanding loans, and remove from the City’s CalHome mobilehome
rehabilitation loan portfolio. (Staff: Jessica Sandifer) (ROLL CALL VOTE
REQUIRED)
Item: 10.I.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Jessica Sandifer, Community Services Manager
BY: Chris Ball, Management Analyst
DATE: 11/04/2020 Regular Meeting
SUBJECT: Consider Forgiveness of Two CalHome Mobilehome Rehabilitation
Loans Totaling $34,063.25
SUMMARY
Staff is requesting that the City Council authorize forgiveness of two CalHome
mobilehome rehabilitation loans totaling $34,063.25.
BACKGROUND
In 2001 the City was awarded a grant from the State Department of Housing and
Community Development (HCD) CalHome Program to receive $420,000 for
rehabilitation loans to Moorpark mobilehome owners. Initially the loans were offered as
0% interest, 15-year deferred payment loans with a balloon payment due at the end of
the term or, if earlier, at time of sale or transfer. In 2002 the HCD modified the
CalHome program underwriting requirements and authorized the City to issue forgivable
deferred payment loans under the CalHome Program. The forgivable loans had a 10-
year term and were forgiven in full at the end of the term with no principal or interest
due, as long as the borrower continued to occupy the home. In April of 2003, the City
Council approved the issuance of forgivable loans through the program and authorized
the conversion of those rehabilitation loans that had already been issued through the
program. At the time, seven deferred payment loans had already been funded and
were eligible for conversion to 10-year forgivable loans.
DISCUSSION
After the City Council modified the program terms, the City’s contracted mobilehome
rehabilitation program administrator, Comprehensive Housing Services, Inc. (CHS),
successfully converted six of the existing rehabilitation loans by substituting a new
promissory note for the original note. CHS was unable to secure the required
authorization from one loan recipient, Ms. Cheryl Valdez (Villa Del Arroyo Space #137).
As a result, Ms. Valdez’ original promissory note dated December 13, 2002, in the
amount of $15,643.00 was never substituted and the loan never converted to a
forgivable loan. Staff was unaware that the promissory note had not been properly
Item: 10.I.
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substituted until they were notified after an annual audit that the loan was still
outstanding and required a payoff. Staff made several attempts to contact Ms. Valdez
to discuss the situation. Further investigation indicates that Ms. Valdez vacated the
mobilehome in 2016, which was later deemed to be in poor condition and removed from
Villa Del Arroyo mobilehome park. The current whereabouts of Ms. Valdez is uncertain.
Given that in 2002 HCD authorized the City to issue 10-year forgivable deferred
payment mobilehome rehabilitation loans under the CalHome Program, and that the
City’s intent was for eligible deferred payment loans to be converted to forgivable loans,
if not for the fact that CHS failed to convert Ms. Valdez’ loan to a forgivable loan, the
term of the loan would have ended in 2013 with the principal forgiven in full. As a result,
staff is requesting that the City Council authorize forgiveness of the promissory note
securing this one remaining outstanding loan to Ms. Cheryl Valdez. By doing so, the
outstanding principal can be forgiven consistent with the other mobilehome
rehabilitation loans that were issued under the 2001 CalHome program.
The City also recently received word about the death of another mobilehome
rehabilitation loan recipient, Mr. Anthony Kramer (Villa Del Arroyo Space #61). Mr.
Kramer received a 20-year deferred payment mobilehome rehabilitation loan in 2014,
which provides for gradual loan forgiveness during the final 10 years of the loan term at
10% per year. Mr. Kramer passed away earlier this year and the loan has not reached
the loan forgiveness period. Mr. Kramer’s mobilehome is in poor condition, and his
Heirs have elected to abandon the mobilehome as its condition makes it unsellable in
the real estate market. Traditionally, if a mobilehome were in good condition, it would
be sold to another buyer, at which point the City’s lien would have been paid. In this
case, however, due to the poor condition and abandonment by the Heirs, Villa Del
Arroyo mobilehome park, pursuant to California Civil Code Section 798.56a and
California Commercial Code Section 7210, has elected to auction the mobilehome off to
have it removed from the park and to try to recover the warehousing and storage fees
incurred by the park while it remained onsite without space rent being paid. The
applicable code sections noted above prioritize funds that are owed to the mobilehome
park over the City’s lien. Due to the condition of the mobilehome there will not be
enough funding generated from the sale to pay back the City’s lien. Therefore, staff is
recommending that Mr. Kramer’s debt, in the amount of $18,420.25 be written off as
uncollectable and removed from the CalHome program mobilehome rehabilitation loan
receivable portfolio.
FISCAL IMPACT
There is no impact to the General Fund from this action. Forgiveness of the outstanding
mobilehome rehabilitation loans will clear $34,063.25 from the City’s CalHome
mobilehome rehabilitation loan receivable portfolio.
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COUNCIL GOAL COMPLIANCE
This action does not support a current strategic directive.
STAFF RECOMMENDATION (ROLL CALL VOTE REQUIRED)
1. Authorize forgiveness of the outstanding mobilehome rehabilitation loan to Ms.
Cheryl Valdez in the amount of $15,643.00, and
2. Authorize write-off of outstanding mobilehome rehabilitation loan to Mr. Anthony
Kramer in the amount of $18,420.25, and
3. Authorize the Finance Director, or designee, to complete the necessary entries to
forgive the outstanding loans, and remove from the City’s CalHome mobilehome
rehabilitation loan portfolio.
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