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HomeMy WebLinkAboutMinutes - Housing Commission 01/11/2012TO: FROM: DATE: PALM DESERT REDEVELOPMENT AGENCY INTEROFFICE MEMORANDUM RACHELLE KLASSEN, CITY CLERK PATTY LEON, RECORDING SECRETAR`RI-) FEBRUARY 8, 2012 SUBJECT: HOUSING COMMISSION MINUTES Attached is the following Housing Commission Meeting Minutes approved at the regular Housing Commission meeting held February 8, 2012 as follows: January 11, 2012 Please submit to the Housing Authority Board. Thank you. cc: John M. Wohlmuth, Executive Director 1 Original en tsi� w si ' Cis , s; �; Office G'\rda\I'atty Leon\Housing Commissior Miscellaneous\Memos Memos to City Clerk HQHAC - Minutes.doc CITY OF PALM DESERT REGULAR HOUSING COMMISSION MEETING MINUTES JANUARY 11, 2012 I. CALL TO ORDER Wade Tucker, Housing Commission Chair, convened the meeting at 3:30 p.m. I1. ROLL CALL Present: Wade Tucker, Chair Gene Colombini, Vice Chair Natalie Russo Robert Nevares Jane Turner Others Present: Jean Benson, Councilmember Janet Moore, Director of Housing Justin McCarthy, ACM for Redevelopment / Housing Jessica Gonzales, Management Analyst - Housing James Conway, Project Coordinator Teresa Vakili, RPM Company Patty Leon, Recording Secretary III. ORAL COMMUNICATIONS None IV. APPROVAL OF MINUTES MINUTES of the Regular Housing Commission meeting of December 7, 2011: Commissioner Natalie Russo moved, by Minute Motion, to approve the minutes of the December 7, 2011, meeting. Motion was seconded by Commissioner Jane Turner and passed 5-0. 1 Housing Commission Minutes JANUARY 11, 2012 V. NEW BUSINESS None VI. CONTINUED BUSINESS None VII. REPORTS AND REMARKS A. COMMISSION REPORTS Janet Moore reported that the California State Supreme Court rendered its decision December 29, 2011, regarding AB 26 to eliminate Redevelopment Agencies and AB 27 to allow continuance of Redevelopment Agencies provided cities make large payments to the state. The Supreme Court upheld AB 26 and found AB 27 to be unconstitutional because it was not "voluntary". What is known so far is that as of February 1, 2012, the Palm Desert Redevelopment Agency will no longer exist. There is a five-year wind down, which includes selling off assets, transferring money, having the County Auditor/Controller do an audit of the Redevelopment Agency, and appointing an Oversight Board. This Oversight Board will be comprised of seven members: one member appointed by the county board of supervisors, one from the county board of education, one from the community college districts, one appointed by the Mayor, one from a large taxing entity which could possibly be CVWD, one that represents the employees of the former Redevelopment Agency and one member of the public appointed by the county board of supervisors. The responsibilities of the Oversight Board include reviewing payments as to whether or not they are obligations, and other tasks previously done by the Agency Board. The Agency Board and City Council need to make some decisions. One of these is the disposition of Housing assets, which they will be considering in the upcoming weeks. The disposition of Housing assets can take several forms. One is that the City can opt to maintain the assets and utilize its Housing Authority to operate the assets that it currently has. The second option is to give the assets to the County's Housing Authority. The third option if neither of the first two are options, is that the assets can go to the State for operations. As the legislation reads now, none of the funds in the Housing Fund get transferred with the Housing assets to anyone. If the City decides to keep the Housing assets, they do not get the funds from the Low -Mod Income Fund. If the assets are given to the County Housing Authority the County does not get the funds either; they are disbursed to the taxing entities. Subsequent to the legislation being reviewed by the Supreme Court, there is legislation on the Senate floor that has passed 2 Housing Commission Minutes JANUARY 11, 2012 through several committees to modify the terms of the current legislation to allow entities who desire to keep their Housing assets to transfer the Low - Moderate Income Housing Funds to their housing entity. In Palm Desert's case that would be very beneficial because we would have the ability to continue some of the projects that have been contemplated. Ms. Moore stated she has done a review of expenses for the past five years of the properties, which has been seen each year by this Commission. Nothing is surprising in the review not including capital, the properties have been in the black. When the properties were received from the County in 1998 there was significant deferred maintenance that needed to be done on them as well as some large projects, including California Villas and Laguna Palms, which were revitalized to a very high quality. This was the timeframe when there was a large capital deficit. Some of the considerations in the coming weeks are that if a property is in the black to any degree and if those monies are in the County coffers, the County is not required to reinvest them in Palm Desert properties. Staff will be looking at many options, at the cash flow of the properties, and the proposed capital improvements that staff feels need to be made, which at the present time are not significant because the properties are in fairly good shape across the board. Upon question, Ms. Moore responded that the Carlos Ortega Villas are a different situation because the project is funded with bond funds. However, the legislation states that unless there is an enforceable obligation, which generally means a construction contract, the project will be on hold. The project is still under review and has not received entitlements. Staff will be looking at that to determine what can be done to build the project and how that would happen. Upon further question, Ms. Moore replied that some decisions will be made fairly soon and others will be taken up during the budget process. The League of California Cities and the California Redevelopment Association are authoring legislation for a potential postponement of the enactment of the dissolution until April 15, 2012. A lot of things are still going on at the legislative level that could push the date back from February 1. Some decisions have to be made immediately, but if the legislature and the League of California Cities are successful, then we will position ourselves to make decisions as time permits as opposed to immediately. Justin McCarthy elaborated on the legislation, SB 659 authored by Senator Padilla. It is simply a pushback on the immediate dissolution anticipated for February 1, 2012, to give the League and the Redevelopment Association an opportunity to propose some legislation modifying AB 26, possibly mitigating some of the more onerous impacts and allowing certain aspects to continue that might be desirous by the State. The legislation just delays by about two 3 Housing Commission Minutes JANUARY 11, 2012 and a half months the inevitable termination. There is a five-year wind down period and there are provisions for revenues to flow to the City to be able to manage the wind down. There is a possibly that under the dissolution structure, because the City of Palm Desert is also a property tax recipient, it may receive property taxes that were formerly going to the Housing Set -Aside and to the Redevelopment Agency. All this has to be evaluated because not only does this just impact Housing or Redevelopment, it also impacts the City's General Fund because we were paying for services from the City. Everything has to be looked at from a City-wide perspective to try to understand how to adapt or at least manage this transition. Commissioner Wade Tucker added that the Los Angeles Redevelopment Agency will be letting 192 employees go and wondered how they could do that. Mr. McCarthy responded that the State and the Supreme Court have the authority to wind down Redevelopment. Basically the State is in a fiscal crisis and is looking for resources wherever it can find them. The State has had a long practice of going after municipalities for those resources. This is probably the culmination of that effort. All we can do is try to adapt as best we can. Upon question, Mr. McCarthy stated that in general the City of Palm Desert receives approximately 7% of the property taxes, although in some areas it may receive 3 1/2 %. It is anticipated that the City will receive more in light of what is going on. Commissioner Jane Turner asked what the situation is with the obligation to provide a level of housing as a result of the Stipulation. Mr. McCarthy replied that is between the Agency and the Center of Law and Poverty. So one might say that if there is no longer a Redevelopment Agency there is no longer a Stipulation. Also, the only significant hammer in the Stipulation if we had not complied with the Housing production requirements of the Stipulation was the ability to stop the Redevelopment Agency from issuing bonds on its 80% money; the money used for infrastructure, economic development, and things of that nature. We might have to revisit that issue to close it out, but the initial reaction is that you can't enforce an obligation against an entity that no longer exists. Ms. Moore added that the budgets for the properties are being prepared in the upcoming weeks, so costs and previous budgets will be looked at with probably very little change. Cost cutting measures that make more sense at this point will also be looked at. Commissioner Tucker stated that the newspaper indicates there will no longer be affordable housing. 4 Housing Commission Minutes JANUARY 11, 2012 Mr. McCarthy declared that there are other tools for the provision of affordable housing under State and Federal law. The properties can be maintained as affordable housing either by the City's Housing Authority, the County's Housing Authority, or the State, or even the sale to private developers that would then be obliged pursuant to contract to maintain a level of affordable housing. There is a good possibility that under any of those scenarios, there could be adjustments because there are different laws depending on the funding sources that are used for affordable housing, which drives the rent structures. Our goal is to evaluate the feasibility of maintaining control of these assets to ensure that they are operated and managed at a level that is compatible with the City of Palm Desert. It may not be quite to the level that we have grown accustomed to and would like to see, but we have had experience with the County managing significant properties within the City, such as One Quail, and they tended to be somewhat problematic. Right now it may be feasible for the City to say there is enough positive cash flow to stay on top of these assets, hold them for a period of time, and then determine what the right thing to do is. Also, the City cannot afford a long term option to have a liability that requires the City to pay with General Fund resources. The key is to make these properties economically viable where as an enterprise they can sustain themselves. In response to Commissioner Tucker's question, Mr. McCarthy said that if the City resolves to go ahead and maintain the properties, then tenants can move back to an annual lease structure. It may be a few months before that happens, but ultimately whether the property goes to the County or the City, it would go back to a normal arrangement in how the tenancies are managed. Regarding the previous comment, the implications to affordable housing to the demise of Redevelopment may not be as great to the existing affordable housing stock, but definitely has implications to the production of new affordable housing within the State of California, because Redevelopment was second only to the Federal government in terms of available resources. Ms. Moore mentioned that everyone received information in their packet regarding ethics training. Besides the workshop, the training is available online. The training is required every two years. Although the online training can be done in Tess than two hours, the certificate may not print out if you take less time. B. MONTHLY OCCUPANCY STATUS REPORT Teresa Vakili reported that the properties are currently 98% occupied; excluding 6 down units at a property. 5 Housing Commission Minutes JANUARY 11, 2012 Commissioner Tucker noted that Las Serenas has had quite a few moving in and out. He asked the other Commissioners if they had any questions on the reports. He questioned what happens when someone's lease expires. Ms. Vakili replied that once a lease expires, the tenant goes month -to -month. C. REPORT #1 - MONTHLY OCCUPANCY AND AVERAGE RENT STATEMENT The Commission reviewed the Monthly Occupancy and Average Rent Statement for November. D. REPORT #2 — MONTHLY NET OPERATING INCOME STATEMENTS The Commission reviewed the Monthly Net Operating Income Statements for November. E. HOUSING AUTHORITY PROPERTIES UPDATE James Conway conveyed that the update relates to maintenance items at the properties with very little capital going on. Commissioner Natalie Russo questioned the snaking in the sewer lines at Laguna Palms. Mr. Conway stated that they were checking to make sure the sewers and drains were in good shape, which is a quarterly maintenance item. However, due to a particular problem in a specific drain, the work was done bi- weekly in order to resolve the issue. Upon question regarding the landscaping, Mr. Conway replied that the hard seasonal pruning is still going on. The turf is the best it has been in a few years and the color has come in nicely. The housing tour is usually done in the spring, so the landscape will be in a winter state for the upcoming tour. F. AGENCY HOME IMPROVEMENT PROGRAM UPDATE Janet Moore stated that an addition to the Home Improvement Program Update was distributed at the beginning of the meeting and requested that the addition be added to the agenda with a vote of the Commission. Commissioner Jane Turner moved, by Minute Motion, to add the Application for Redevelopment Contract Program to the agenda. Motion was seconded by Commissioner Natalie Russo and passed 5-0. Ms. Moore pointed out that the Home Improvement Program is in jeopardy with respect to the elimination of the Redevelopment Agency. As such, alternatives are being sought for the emergency situations that occur. Jessica Gonzales will 6 Housing Commission Minutes JANUARY 11, 2012 explain one of the options available for these emergency situations, and the input of the Commission is requested. Jessica Gonzales stated that the City is trying to submit an application to the Community Development Block Program for the fiscal year 2012-2013 funding cycle so the Home Improvement Program may continue with CDBG funding. Ms. Gonzales requested the Commission's support and consensus to submit the application. Ms. Moore noted that this item will be on the February 8th agenda and the CDBG Coordinator has asked for the Commission's input and consensus to move forward with the submission of an application. The application is due on February 8th. Justin McCarthy elaborated that the impact of the loss of Redevelopment to the Home Improvement Program has been understated. Ms. Moore responded that the only income moving forward will be from repayment of HP loans, which is not significant. Mr. McCarthy went on to say that the possible CDBG funding would at least ensure that a response could be made to emergencies that may exist to people of modest means. Ms. Moore added that would be very low and low income, up to 80% of the area median income, for emergency situations. Commissioner Jane Turner asked if the application is for a specific amount or for the ability to dip into the fund when necessary. Ms. Gonzales replied that at this time the request is for $75,000, which should assist at least ten homeowners. Councilmember Jean Benson asked if a notice or letter should be sent to all the people in the affordable housing, especially the seniors, to respond to the news and to explain what is going on. Ms. Moore replied that such a response is currently being drafted. Mr. McCarthy added that once the decision has been made to retain the properties, it would be an important element to be conveyed to the tenants and would give them a level of security. Ms. Moore stated that the current recommendation is that the City Council makes their determination by February 1st, or as soon thereafter as feasible. All the other obligations need to be complied with in order to do the next step. Ms. Moore has fielded phone calls from concerned homeowners from Desert Rose 7 Housing Commission Minutes JANUARY 11, 2012 and Falcon Crest indicating they believe that on February 1st they don't have to pay any more money back. Ms. Moore said there are a lot of concerns and we just don't know all of the answers but that one thing was for sure, the outstanding loans are still due. Upon question, Ms. Gonzales noted that the CDBG funding is Federal from Department of Housing and Urban Development (HUD). The application will state the intended purpose for the funds. At this time, the Commission recommended the request for CDBG funds. Commissioner Turner asked that if the economy strengthens and California gets back on a stable fiscal basis, could all of this just become an exercise, and could Redevelopment ever be back in the condition it was? Mr. McCarthy responded that the State has profound structural problems that even the return of the economy will mitigate, but it hasn't fully addressed those problems yet. There will possibly be a return of Redevelopment, but there are inherent biases at the State level and the political dynamics within the State that may say that other than affordable housing a city like Palm Desert may not be able to take full advantage of. Mr. Conway reported that there are 17 assignments on the Home Improvement Program Update; nine in the application stage, seven have been completed, and one is under construction scheduled for close-out this month. Twenty are interested and are on a waiting list. In response to Commissioner Russo's question, Mr. Conway indicated that none of the twenty on the waiting list appear to be an emergency situation. IX. NEXT MEETING DATE — February 8, 2012 A. APPROVED SCHEDULE OF HOUSING COMMISSION MEETING DATES FOR 2012 The schedule provided reflects the changes agreed upon at the last meeting, which Commissioner Tucker noted was already approved B. REVISED HOUSING TOUR INVITATION FOR JANUARY 27, 2012 Janet Moore explained the revised announcement of the Housing Tour, which will be on Friday, January 27, 2012. At the City Manager's request the starting time has been moved to 8:30 a.m. with conclusion of the tour by 11:45 a.m. at the latest. There is one scheduled stop at a Falcon Crest property. Participants will see the complexes and their grounds, while driving through, as opposed to 8 Housing Commission Minutes JANUARY 11, 2012 a walking tour. A few Council Members and the City Manager have not previously been on a tour, as well as a few Commissioners. At 8:30 a.m. that morning the City Manager would like to provide any updates that he may know regarding housing and its disposition. X. ADJOURNMENT With Commission concurrence the meeting was adjourned at 4:10 p.m. Patty Leon) Recording Secretary 9