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HomeMy WebLinkAboutPrelim - HA - 06-25-2020DRAFT PRELIMINARY MINUTES PALM DESERT HOUSING AUTHORITY MEETING THURSDAY, JUNE 25, 2020 CITY OF PALM DESERT, CALIFORNIA (VIRTUAL MEETING) I. CALL TO ORDER - 3:00 P.M. Chairman Nestande convened the meeting at 3:00 p.m. II. ROLL CALL All Councilmembers and those listed as teleconference. Present: Member Jan C. Harnik Member Sabby Jonathan Vice Chairman Kathleen Kelly Member Susan Marie Weber Chairman Gina Nestande Also Present: Lauri Aylaian, Executive Director Robert W. Hargreaves, City Attorney Andy Firestine, Assistant Grace L. Rocha, Acting Secretary Lori Carney, Director of Administrative Services Ryan Stendell, Director of Community Development Martin Alvarez, Director of Economic Development Janet M. Moore, Director of Finance/City Treasurer Tom Garcia, Director of Public Works M. Gloria Sanchez, Acting Deputy City Clerk III. ADJOURN TO CLOSED SESSION Request for Closed Session: None presented participated PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 25, 2020 With Housing Authority Board concurrence, Chairman Nestande adjourned the meeting to Closed Session at 3:02 p.m. She reconvened the meeting at 4:38 p.m. IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None V. CONSENT CALENDAR A. MINUTES of the Housing Authority Meeting of June 11, 2020 (See City Council Agenda - Section X - Item J). Rec: Approve as presented. Upon motion by Harnik, second by Weber, and 5-0 vote of the Successor Agency (AYES: Harnik, Jonathan, Kelly, Weber, and Nestande; NOES: None), the Consent Calendar was approved as presented. VI. CONSENT ITEMS HELD OVER None VII. NEW BUSINESS A. REQUEST FOR ADOPTION OF A RESOLUTION OF THE HOUSING AUTHORITY BOARD OF THE PALM DESERT HOUSING AUTHORITY (AUTHORITY), AUTHORIZING THE EXECUTION AND DELIVERY OF A LETTER BY THE AUTHORITY TO PALM COMMUNITIES, ON BEHALF OF PD HOVLEY LP, CONDITIONALLY APPROVING THE PROPOSED RE - SYNDICATION, REFINANCING AND REHABILITATION OF HOVLEY GARDENS (Project). Senior Management Specialist Jessica Gonzales stated that approval would allow Palm Communities to re -syndicate and restructure the financing of Hovley Gardens Apartments with the goal to have a renovated community. Hovley Gardens is 100% affordable, consisting of 162 units that was build and occupied in 2003. The community has been providing housing to low-income households for the past 17 years. Although, the community has remained in excellent condition throughout the years, Palm Communities desires to rehabilitate the community extensively with features that would benefit residents and community. In order to complete the proposed 2 IDN improvements, Palm Communities proposes to acquire the current lima ed AWT partners interest as owners of Hovley Gardens, apply for tax credits to fund the rehabilitation and create a limited partnership 'to complete the rehabilitation. This re -syndication requires the Authority to amend the recorded documents securing the interest of the existing Authority loan, affordability restriction, and related documents. Staff and legal counsel have reviewed the proposed re -syndication and financing restructuring of the project, including the Authority loan. Staff found that by agreeing to the terms as provided, the Authority would benefit from an extended 55 years affordability term, affordable low-income units, an annual compliance monitoring fee, a $1 million down payment reduction to the existing Authority loan and a refreshed property. Staff recommended approval, adding they will bring back the final version of the amended agreements for approval by the Authority Board at a future meeting. Member Harnik inquired if these apartments were in question for RHNA (Regional Housing Needs Allocation) numbers. Ms. Gonzales said she couldn't recall that this one was one of them. Further responding, she said based on the tax credit application for the 18 units being proposed to be reduced from low to very low, it will help with the (RHNA) numbers. It will allow the City to use those units to count toward the very low count. Vice Chairman Kelly moved to: 1) Waive further reading and adopt Authority Resolution No. HA - 97, a resolution conditionally approving the re -syndication and restructuring of the Project and the Authority's existing loan with respect thereto, as described in the letter attached hereto as Attachment "A" (Letter); 2) By Minute Motion: a) Authorize staff and legal counsel to negotiate and prepare such agreements and documents as described in the Letter, or otherwise required, to effectuate the re -syndication, refinancing and rehabilitation of the Project; b) authorize Palm Communities, on behalf of PD Hovley LP, to submit on July 1, 2020, an application, including the Letter, to the California Tax Credit Allocation Committee (TCAC) for a new allocation of nine percent (9%) low income housing tax credits. Motion was seconded by Harnik and carried by a 5-0 vote (AYES: Harnik, Jonathan, Kelly, Weber, and Nestande; NOES: None). 3 PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 25, 2020 Vill. PUBLIC HEARINGS A. REQUEST FOR APPROVAL OF RESOLUTIONS RELATED TO THE ADOPTION OF THE FISCAL YEAR 2020-2021 BUDGET AND CAPITAL IMPROVEMENT PROGRAM (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL). Ms. Moore stated the financial plan contained the operating budgets for all of the City's governmental funds including the General Fund, Housing Authority, and the Capital Improvement Program. Since the General Fund is the primary fund used to fund the daily operations of the City, she focused her report on this item in particular. She provided an overview of the General Fund budget, stating the estimated revenues were approximately $48.6 million, and estimated expenditures were $58.8 million, resulting in an estimated shortfall of $10.1 million. In April and May 2020, the City Council had three study sessions to discuss the impacts of the COVID-19 pandemic on the City's current year budget as well as the loss of revenue on the upcoming fiscal year's budget. The study session also included in-depth conversation about the current status of the City's goals and projects, departmental budgets, staff vacancies, public safety, economic development and sponsored events. Also at its meeting of May 14, 2020, the City Council directed staff to make efficiencies and adjustments to the public safety budgets. These resulted in an increase in the cost of Fire services, and a decrease in cost for Police Services. She went on to discuss the revenue comparison for FY 2019-2020 and FY 2020-2021, noting the difference of approximately $12 million with sales tax and transient occupancy tax being two categories with a significantly reduced revenue. She also noted a 3% decrease in expenditures, mainly in the category of police services. Due to the shortfall, staff is requesting to use the General Fund reserves to meet obligations to City operations at the end of FY 2020-2021. At that time, staff will provide recommendations to the City Council relative to which reserve categories could be used to cover the shortfall. She noted the importance of the contingency and emergency reserves remaining available. COVID-19 is not the emergency anticipated and would instead have expected an earthquake or similar emergency. She recommended not using those particular reserves in the event another type of emergency occurred. Staff intends to present quarterly reports to the City Council in order to share any significant changes in revenue or expenditure projections. She noted the numbers change daily, and staff would need an opportunity to review the information to bring to the Council as soon as feasible. She called attention to the a -mails received relative to funding for police. Some were included in the Council packet, and some were sent directly to Council and did not address this specific item. These a -mails are part of the public record. 4 PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 25, 2020 Mayor/Chairman Nestande asked for the best -case scenario relative to the shortfall should all sales tax revenue come in. Ms. Moore noted staff is projecting a 25% reduction, or approximately $5 million. If everything anticipated for this year were received next year, it would cut the reduction in half. She cautioned staff has not seen a good indication as to what the benefits of online shopping might be yet. Anything purchased online is based on a certain threshold. She said online retailers have to pay sales tax to the State of California. It is divided between the cities and counties based on what sales tax per capita is. The issue is Palm Desert stores were closed, so staff is unsure of the effect this will have on pooled revenue. Councilman/Member Jonathan referred to the budget comparison and noted most revenue items have significant decreases. He noted the Interfund Transfers Out shows a 21 % increase and asked to confirm if a significant portion of this is for fire services. He also asked what the amount was and how it compared to the prior year. Ms. Moore answered the amount was $3.8 million, and the prior year was $3 million. Councilman/Member Jonathan noted police services were successfully reduced, but the fire costs increased by almost $1 million. Councilmember/Member Weber commented she noticed many of the comments received were not to reduce police services. She noted it should be made very clear to the public that the City is not significantly cutting back on police services and are certainly not defunding them in any manner. The City prides itself on its public safety and it should be mentioned so there is no misunderstanding about what is taking place. Mayor/Chairman Nestande asked for Public Information Officer David Hermann to issue a press release to ensure the public is made aware. Mayor Pro TemNice Chairman Kelly pointed out that what is presented in this report is a perfect example of smart police budgeting. With the collaboration of law enforcement, functions have been identified that are better performed by Community Service Officers (CSOs) that has resulted in a reduction of costs. Councilman/Member Jonathan agreed with Mayor Pro TemNice Chairman Kelly's position, and thanked Captain Belli and Lieutenant Martello for being part of the process to come up with ways to cut costs without impacting public safety, noting this was largely done through not hiring for vacant positions, consolidating other positions and through using CSOs. He also 5 PRELIMINARY MINUTES DRAFT PALM DESERT HOUSING AUTHORITY MEETING JUNE 25, 2020 thanked Ms. Moore and the Finance Department, noting we are fortunate to be able to function at 100% in this City, largely thanks to staff and the wise City Councils that came before that added to the reserves every year. This year the City is the beneficiaries of that wisdom and foresight. He highlighted this budget has realistic expectations of greatly reduced revenues and has cut expenses everywhere possible without impacting the services the City provides while using as little of the reserves as possible. Councilmember/Member Harnik commended the entire City Council and staff for everything they have done in a very prudent fashion. She emphasized the movement to defund the police is one that the City is not entertaining, stating the City respects public safety and what they have done for the community. She mentioned she has requested to have a study session with the Police to truly understand the best way to go about adjusting as the City moves forward. She noted one thing people always expect from Palm Desert is safety, and the City Council and staff makes sure those expectations are fulfilled. She understands the uncertainty, frustration, and fear she is hearing, but the community should feel assured the City is doing its best to keep them safe. Councilmember/Member Weber also extended thanks to the Finance Department for working hard on this budget. As pointed out, this is a very fluid situation, so trying to nail down the budget was quite a challenge. Mayor/Chairman Nestande declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. With no public testimony offered, she declared the public hearing closed. Councilman/Member Jonathan moved to: 1) Waive further reading and adopt Resolution No. 2020 - 60, adopting the budget and Capital Improvement Program (CIP) for the Fiscal Year July 1, 2020, through June 30, 2021, and authorizing the use of General Fund reserves, to the extent needed, to cover any revenue shortfall; 2) Waive further reading and adopt Resolution No. 2020 - 61, establishing the Appropriation Limit for Fiscal Year 2020-2021; 3) Waive further reading and adopt Resolution No. HA - 96, adopting a Palm Desert Housing Authority Budget for the Fiscal Year July 1, 2020, through June 30, 2021; 4) Waive further reading and adopt Resolution No. 2020 - 62, the Staffing Allocation and Salaries Resolution, setting the Fiscal Year 2020-2021 Salary Schedules, Salary Ranges and Allocated Classifications; and 5) by Minute Motion, approve Out -of - State Travel as listed in attached memorandum. Motion was seconded by Kelly and carried by a 5-0 vote (AYES: Harnik, Jonathan, Kelly, Weber and Nestande; NOES: None). 0 PRELIMINARY MINUTES [") RA F T PALM DESERT HOUSING AUTHORITY MEETING JUNE 25, 2020 IX. REPORTS, REMARKS, AND AUTHORITY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. AUTHORITY COUNSEL None C. CHAIRMAN AND MEMBERS OF THE AUTHORITY None X. ORAL COMMUNICATIONS - C None XI. ADJOURNMENT With Authority concurrence, Chairman Nestande adjourned the meeting at 6:26 p.m. GINA NESTANDE, CHAIRMAN ATTEST: GRACE L. ROCHA, ACTING SECRETARY PALM DESERT HOUSING AUTHORITY 7