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Home My WebLink AboutSR - Revised PD HIP CITY OF PALM DESERT/PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: ADOPT CITY OF PALM DESERT RESOLUTION NO. 07-53 AND PALM DESERT REDEVELOPMENT AGENCY RESOLUTION NO. 541 APPROVING THE REVISED HOME IMPROVEMENT PROGRAM AND SUPERSEDING ALL PREVIOUS RESOLUTIONS APPROVING SAID PROGRAM SUBMITTED BY: JANET M. MOORE, HOUSING AUTHORITY ADMINISTRATOR DATE: JULY 12, 2007 CONTENTS: 1. CITY RESOLUTION NO. 07-5� 2. AGENCY RESOLUTION NO. 541 3. AT-A-GLANCE COMPARISON CHART 4. REVISED HIP GUIDELINES 5. EXISTING HIP GUIDELINES 6. DRAFT LOAN AND GRANT DOCUMENT SAMPLES Recommendation: That the City Council: 1) Waive further reading and adopt Resolution No. 0�-53 approving the revised Guidelines, Funding Components and Procedures for the Home Improvement Program (the "Program") substantially as to form, which hereby supersedes all other Resolutions related to the Program; and That the Agency Board: 2) Waive further reading and adopt Resolution No. 541 approving the revised Guidelines, Funding Components and Procedures for the Program substantially as to form, which hereby supersedes all other Resolutions related to the Program; and By Minute Motion, that the City Council and Agency Board: 3) Authorize the City Manager and/or the Executive Director to finalize the loan and grant documents necessary for the implementation of the revised Program; and 4) Authorize the City Manager and/or the Executive Director to execute any documents necessary to implement the Program. Staff Report Adoption of City/Agency Resolutions approving Revised HIP Guidelines Page 2 of 4 July 12, 2007 Executive Summarv: The revised Home Improvement Program clarifies and more clearly details the guidelines, procedures, and priorities that are currently in effect for the Program, as well as adds coverage for mobilehomes, environmental hazards (such as lead-based paint and asbestos remediation), energy efficient upgrades and drought tolerant landscape retrofits. The proposed assistance amounts for grants and loans have been increased to reflect the actual costs of the most commonly requested improvements that the Program is funding. The last increase in Program assistance amounts was in August of 2000, and since then material and labor costs for these same improvements have increased significantly. The fiscal impact of the increased assistance amounts will be dependent on how many applications are accepted and how much in repaid monies the program receives during the year. Based on the current year's experience, the estimated additional funding necessary will be between $130,000 and $175,000 per year. This additional amount has been included in the 20% tax increment housing set-aside fund budget for the 2007- 2008 fiscal year. Discussion: BACKGROUND: The Home Improvement Program was approved in December of 1997. Since that time, we have successfully assisted approximately 210 homeowners. The Program's primary goal is to provide financial assistance to very low, low and moderate income households for the purposes of improving their homes and/or mitigating code violations and health and safety issues, thereby making a home more attractive, decent, safe and sanitary. The Program offers grants or low interest rate loans in an effort to rehabilitate the participant's home without burdening the participant. The Program has been highly successful and continues to hold high community interest. The Program is funded by Community Development Block Grant ("CDBG") Funds and 20% tax increment housing set-aside funds. Since its inception, the program has loaned or granted over $1.4 million of which approximately $860,000 has been repaid. The repaid monies, also called "program monies", were re-loaned or granted to new recipients. Program monies must be used for a similar purpose as their original intended use within three years. Program monies have funded the Program for the last three years without additional allocations from CDBG with one exception: in 2003/2004 the Program was approved for a CDBG allocation, however, this was subsequently reprogrammed to another CDBG eligible project. G.\rda�Mana HunHWPDATA\JMOORE\stfrpts�071207RevHIP.doc Staff Report Adoption of City/Agency Resolutions approving Revised HIP Guidelines Page 3 of 4 July 12, 2007 In August of 2000, the Program was modified to include the use of 20% tax increment set-aside funds in order to add eligible median income households. A 30-year deferred loan component was added with deed restrictions. The maximum assistance amounts set at that time were based on experience with the Program and the cost of the most commonly requested improvements. Since then, the costs have increased and have limited the impact of the requested improvements to only those improvements that are health and safety issues, code violations, and items of an urgent nature that have been identified or requested. Additional work, although eligible and beneficial, has been limited because the assistance amount has been exhausted. The criteria has also been expanded to assist households whose income does not exceed 120% of the area median income ("AMI") as the law permits. PROGRAM ADDITIONS: The existing eligible property criteria does not include mobilehomes, although mobilehomes are an allowable inclusion in this type of program. This has disqualified a significant group of applicants that are in great need of mitigating health and safety issues and have few alternatives other than a program of this type. The revised Program includes mobilehomes for appropriate funding components. As of January 1, 2007, CDBG requires that houses of a certain age are required to be tested for environmental hazards. The Lead and Asbestos Abatement Grant was added to the Program to assist with the costs of testing and remediation as a majority of the homes that are eligible to participate in the Program fall within the age guidelines. Other additions include a component for Drought Tolerant Landscape Retrofit (DTLR) as well as energy upgrades in the City's Set-to-Save program. While the addition of the improvements for energy efficiency upgrades is not a separate funding component, homeowners are now able to utilize most of the existing components as appropriate for their household income. In 2006, the City Councii and Agency Board authorized the use of Rancho Housing Alliance to administer the fieldwork for the Program on an annual basis. Rancho Housing Alliance will be provided with the revised guidelines to implement the modified Program. The implementation will require updated loan and grant documents. The Program's new easy to follow format will help participants understand the process and may help answer commonly asked questions. The new format makes the application process more streamlined as well. New updated loan documents will be created to implement the program under the current lending laws. Attached is an at-a- glance comparison chart to highlight the most significant changes to the Program. All applications that are currently in process, but not assigned to the consultant prior to the approval of the revised program, may be processed in accordance with the revised guidelines. All other applications will be completed under the existing program requirements. G\rda\Mana Hunt\WPDATA\JMOORE\stfrpts\071207RevHIP.doc Staff Report Adoption of City/Agency Resolutions approving Revised HIP Guidelines Page 4 of 4 July 12, 2007 CONCL USION: Staff recommends the approval of Resolution Nos. 07-53 and 541 revising the Program in order to continue its success and impact both to the neighborhood in which it exists, as well as the community as a whole. Submitted by: Department Head: a � � � ,. � .��- , . � a � � ,� ` �. :-��.�� ' ,�.�..-{�,�_, � , ..--�.___ Ja et I�'I. Moore ' ave Y ' yen Hausing Authority Administrator Direct of Redevelopment/Housing Approval: � .� /j �J ti McCarthy, AC velopment Carlos L. Ortega, City Manager/ Executive Director h �__ MITY COU:3C� �CTZON♦ C�,.."_� BY RDA `J O APPROVED DE�TIED o� �- � a- O� ��i�� +ER�� K r� �r�1 N1�ETI G D�T - - VERIFIE'D �BY AYES. � � � C?rigina� on fils with City Cferk'� Office NOES: ABS�N'�: �BSTAIId 4 „ v'ERTF�F;D f3Y: '1r�_gin�l ars F.i�le ' th C�..��f r,`IerJ:s � Oftirc G:\rda\Maria Hunt\WPDATA\JMOORE\stfrpts\071207RevHIP.doc