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HomeMy WebLinkAboutAGENDA REPORT 2017 0301 CCSA REG ITEM 10F ITEM 10.F. CITY OF MOORPARK,CALIFORMA City Council Meeting MOORPARK CITY COUNC /-"°to/ / AGENDA REPORT ® sv: TO: Honorable City Council FROM: Jessica Sandifer, Program Manage DATE: February 16, 2017 (City Council Mee g of 3/1/17) SUBJECT: Consider Resolution Amending the Fiscal Year 2016/17 Budget to Allocate Funds for Permanent Loan for Area Housing Authority Project BACKGROUND The former Redevelopment Agency of the City of Moorpark ("Agency") assembled a 1.2 acre site, located at 782 Moorpark Avenue, 798 Moorpark Avenue, 81 Charles Street, and 765 Walnut Street ("Property"), at a cost of $1,518,777.00 (includes relocation and demolition expenses). The Agency has demolished a portion of the improvements on site; however, the buildings along Moorpark Avenue have remained for visual aesthetics and interim uses. With the elimination of redevelopment agencies in California, cities automatically assumed the role as the housing successor agency to their redevelopment agency unless they elected to not serve. The City of Moorpark ("City") assumed the housing functions of the Agency and took control of the housing assets, excluding amounts in the MRA Low/Mod Income Housing Fund, along with related rights, powers, liabilities, duties and obligations thereby becoming a successor housing agency of the Agency. On August 27, 2012, the Department of Finance approved the transfer of the housing assets to the City, which started the five (5) year requirement to develop the properties for affordable housing purposes (August 27, 2017). The City is approaching the end of year number four (4) on this requirement. One five (5) year extention is allowed to develop the housing properties of the former Agency (August 27, 2022). On June 17, 2015, the City Council approved the Disposition and Development Agreement (DDA) and Affordable Housing Agreement (AHA) with the Area Housing Authority of the County of Ventura ("Authority") for the Walnut Street Apartments Project. The DDA set out parameters for the development including construction of 24 apartment units for very-low and low income individuals and families, a purchase money loan from the City to the Authority for the cost of the land, and a permanent loan for $2,000,000 from the City to the Authority. 332 Honorable City Council March 1, 2017 Page 2 On June 15, 2016, the City Council amended the DDA and the AHA after the Authority approached the City about making some changes to the document to assist with their application for tax credits. Among many things changed in the Amendment was an agreement for the City to lower the permanent loan amount from $2,000,000 to $1,250,000. DISCUSSION After the DDA and AHA were amended, the Authority was able to secure an allocation of tax credits for the project. The funding for the project is expected to close on March 23, 2017. It is now appropriate for staff to allocate the funding for the $1,250,000 permanent loan. The loan funds will need to be put into escrow in order for the Authority to close on the financing for their project. FISCAL IMPACT Funds needed for the $1,250,000 Permanent Loan will come from the City Affordable Housing Fund (2121), which is funded by in-lieu fees paid by developers. The current balance for the City Affordable Housing Fund cash balance is approximately $4,500,000. For Fiscal Year 2016/17 $2,283,039 has been appropriated which includes $1,985,341 earmarked for purchase of land for affordable housing that has not yet occurred. Disbursement of the funds for the permanent loan to the Authority, will take approximately 56% of our City affordable housing cash funding. The Developer anticipates minimal repayment out of residual receipts with a balloon repayment of the Permanent Loan, plus interest at year 17. The City will earn approximately $436,000 in interest on the permanent loan during the loan term. Staff is currently working on a Disposition and Development Agreement (DDA) for several properties owned by the City to be developed for affordable housing purposes. If an agreement is reached, the City expects to receive over $2,000,000.00 for the purchase of City owned property. These funds would be used to replenish the City Affordable Housing Fund (2121). STAFF RECOMMENDATION (ROLL CALL VOTE) Adopt Resolution Amending the Fiscal Year 2016/17 budget to fund the loan for the Area Housing Authority Project pursuant to the Disposition and Development Agreement. Attachment: Resolution No. 2017- 333 RESOLUTION NO. 2017- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, AMENDING THE FISCAL YEAR 2016/17 BUDGET TO ALLOCATE FUNDING FOR A $1,250,000 LOAN FOR THE AREA HOUSING AUTHORITY OF THE COUNTY OF VENTURA'S WALNUT STREET APARTMENTS PROJECT FROM THE CITY AFFORDABLE HOUSING FUND (2121) WHEREAS, on June 15, 2016, the City Council approved an Amendment to the Disposition and Development Agreement with the Area Housing Authority (Authority) for the Walnut Street Apartments Project, which authorized a loan to the Authority for $1,250,000; and WHEREAS, on June 15, 2016, the City Council adopted the Operating and Capital Improvement Projects Budget for Fiscal Year 2016/17; and WHEREAS, a staff report has been presented to the City Council requesting allocation of the loan funding from the City Affordable Housing Fund (2121); and WHEREAS, a budget amendment of $1,250,000 is requested to fund the loan from the City Affordable Housing Fund (2121); and WHEREAS, Exhibit "A", attached hereto and made a part hereof, describes said budget amendment and the resultant impact to the budget line items. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. A budget amendment in the amount $1,250,000 from the City Affordable Housing Fund (2121), as more particularly described in Exhibit "A", attached hereto, is hereby approved. SECTION 2. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original Resolutions. PASSED AND ADOPTED this 1st day of March, 2017. Janice S. Parvin, Mayor ATTEST: Maureen Benson, City Clerk Exhibit A— Budget Amendment 334 EXHIBIT A BUDGET AMENDMENT FOR CITY AFFORDABLE HOUSING FUND FOR AREA HOUSING AUTHORITY LOAN FOR WALNUT STREET APARTMENT PROJECT FY 2016/17 FUND BALANCE ALLOCATION: Fund Title Fund-Account Number Amount City Affordable Housing Fund 2121-000-00000-33990 $ 1,250,000.00 Total $ 1,250,000.00 EXPENDITURE APPROPRIATION: Account Number Current Budget Revision Amended Budget 2121-422-00000-51810 $ - $ 1,250,000.00 $ . 1,250,000.00 $ - $ - $ $ - $ - $ - $ - $ - $ - $ - $ - $ Total $ - $ 1,250,000.00 $ 1,250,000.00 _,A ____. Finance Approval: 335