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HomeMy WebLinkAboutRes HA-60 - Planning and Admin Xpnses FY 2012-13PALM DESERT HOUSING AUTHORITY STAFF REPORT REQUEST: ADOPT RESOLUTION NO. HA- 60 , AS HOUSING SUCCESSOR TO THE FORMER PALM DESERT REDEVELOPMENT AGENCY, DETERMINING THAT PLANNING AND ADMINISTRATIVE COSTS INCURRED DURING FISCAL YEAR 2012-2013 AND PAID FOR WITH MONEYS IN THE LOW AND MODERATE INCOME HOUSING ASSET FUND ARE NECESSARY FOR THE PRODUCTION, IMPROVEMENT, AND/OR PRESERVATION OF LOW AND MODERATE INCOME HOUSING SUBMITTED BY: Veronica Tapia, Management Analyst DATE: November 14, 2013 CONTENTS: Resolution No. HA - 60 Recommendation Waive further reading and adopt Resolution No. HA - 60 , determining that planning and general administrative expenses paid for with monies in the Low and Moderate Income Housing Asset Fund for Fiscal Year 2012- 2013 were necessary for the production, improvement or preservation of low and moderate income housing; were not disproportionate to the amount actually spent from the Low and Moderate Income Housing Asset Fund for the costs of production, improvement or preservation of low and moderate income housing; and were limited to the costs set forth in Health and Safety Code Section 33334.3(e)(1). Executive Summary Under the Community Redevelopment Law, the former Palm Desert Redevelopment Agency was required to determine annually that the planning and administrative expenses associated with the development, improvement and preservation of low and moderate income housing were necessary in order to carry out the requirements of the Health and Safety Code sections related to low and moderate income housing. After dissolution of redevelopment, the Housing Authority, as housing successor the former Redevelopment Agency is responsible for spending moneys derived from housing assets of the former Redevelopment Agency on low and moderate income housing. Such moneys are held by the Authority in its Low and Moderate Income Housing Asset Fund. For the fiscal year 2012-2013, the cost for the actual administrative costs relative to the actual cost for production, improvement, and preservation of low and moderate income housing is approximately fourteen percent (14%). Staff Report Housing Production Costs November 14, 2013 Page 2 of 3 Discussion California Health and Safety Code Section 33334.3 required the former Redevelopment Agency to determine annually that planning and administrative expenses associated with the development, improvement, and preservation of low and moderate income housing were necessary for the production, improvement and preservation of low and moderate income housing in the project areas and throughout the City. The Redevelopment Law further provides that such planning and administrative costs should not be disproportionate to the amount actually spent for the cost of production, improvement, or preservation of low and moderate -income housing. Eligible costs, which could be paid for by the former Redevelopment Agency with moneys in the Low and Moderate Income Housing Fund included costs incurred for salaries, wages and related costs of staff, or for services provided through inter -agency agreements, and agreements with contractors such as legal and consulting services. All such planning and general administrative costs were required to be directly related to affordable housing programs and activities authorized by the Community Redevelopment Law (CRL). In connection with the dissolution of redevelopment, the City Council elected for the Housing Authority to become the housing successor for the former Redevelopment Agency and the housing assets of the former Agency were transferred to the Authority. All moneys derived from housing assets of the former Redevelopment Agency are held by the Authority in its Low and Moderate Income Housing Asset Fund. The Authority, as housing successor, annually incurs planning and administrative costs payable out of moneys in the Low and Moderate Income Housing Asset Fund because the housing programs, adopted and budgeted, cannot be implemented without staff and the necessary consultants. In 2012-2013 these costs of $713,760 made up 14 percent of total expenditures from the Low and Moderate Income Housing Asset Fund for the cost associated with the development, improvement, and preservation of low and moderate income housing by the Authority, as housing successor, which totaled $5,217,043. The higher than usual percentage of costs is not unexpected considering that the Redevelopment Dissolution Law put numerous projects and programs on hold for the majority of the fiscal year. The Authority may now proceed with many of the projects that were placed on hold. Additionally, the Authority can proceed with the programs necessary to meet the requirements set forth by the CRL. Staff is recommending that the Authority Board adopt Resolution No. HA - determining that the planning and administrative expenses incurred for Fiscal Year 2012-2013 were necessary and were not disproportionate to the rest of the expenditures of the Authority from the Low and Moderate Income Housing Asset Fund; and that the planning and general administrative expenses incurred were directly related to the Authority's production, improvement, and/or preservation of low and moderate income housing as the successor housing entity. G \rda\Veronica Tapia\Word Files\Staff Reports\HOUSING PRODUCTION COSTS 2012-13 11-14-13.DOC Staff Report Housing Production Costs November 14, 2013 Page3of3 Fiscal Analysis The costs associated with the planning and general administrative expenses have been budgeted and paid from the Low and Moderate Income Housing Asset Fund. Therefore, there is no impact to the General Fund. Submitted By: eronica Tapia, Management Analyst Paul S. Gibson, Director of Finance Approval: 1• h M. Wohlmuth, Executive Director Department Head: ore, Director of Housing Z%Ec BY HOUSG AUTH ON. . 11 —1 q _ L9Gl3 VERIFIED BY:, orfginal on file w;th City Cterk's Office G:\rda\Veronica Tapia\Word Files\Staff Reports\HOUSING PRODUCTION COSTS 2012-13 11-14-13.DOC RESOLUTION NO. HA - A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY, PALM DESERT, CALIFORNIA, AS HOUSING SUCCESSOR TO THE FORMER PALM DESERT REDEVELOPMENT AGENCY, DETERMINING THAT PLANNING AND ADMINISTRATIVE EXPENSES INCURRED DURING FISCAL YEAR 2012-13 AND PAID FOR WITH MONEYS IN THE LOW AND MODERATE INCOME HOUSING ASSET FUND ARE NECESSARY FOR THE PRODUCTION, IMPROVEMENT, AND PRESERVATION OF LOW AND MODERATE INCOME HOUSING A. Pursuant to Health and Safety Code Section 34175(b) and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Ca1.4th 231(2011)), on February 1, 2012, all assets, properties, contracts, leases, books and records, buildings, and equipment of the former Palm Desert Redevelopment Agency (the "Agency") transferred to the control of the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency") by operation of law. B. Pursuant to Health and Safety Code Section 34176(b), the City Council of the City of Palm Desert (the "City") adopted Resolution No. 2012-07 electing for the City not to retain the housing functions previously performed by the former Agency, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the former Agency be transferred to the Palm Desert Housing Authority (the "Housing Authority"). C. Health and Safety Code Section 34177(g) directs the Successor Agency to effectuate transfer of housing functions and assets to the appropriate entity designated pursuant to Health and Safety Code Section 34176, being the Housing Authority, and Health and Safety Code Section 34181(c) provides that the oversight board of the Successor Agency (the "Oversight Board") shall direct the Successor Agency to transfer housing assets pursuant to Health and Safety Code Section 34176. D. On October 8, 2012, the Oversight Board adopted Resolution No. OB-018 directing the Successor Agency to take such action, and on October 11, 2012, the Successor Agency adopted its Resolution No. SA-RDA-012 approving the transfer of housing functions and assets to the Housing Authority. E. On October 12, 2012, the Housing Authority accepted the housing functions and assets identified and transferred in the Housing Assets List pursuant to Resolution No. SA-RDA-012 of the Successor Agency. F. Pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.) it was the intent of the legislature that the moneys in a redevelopment agency's Low and Moderate Income Housing Fund be used to the maximum extent possible to defray the costs of production, improvement, and preservation of low and moderate income housing, and that the amount of money spent for the planning and general administrative activities associated with the development, G \rda\Veronica Tapia\Word Files\Staff Reports\2012-13 Housing Production Cost Resolution 11-14-13.DOC improvement, and preservation of that housing not be disproportionate to the amount actually spent for the costs of production, improvement, or preservation of that housing. G. Pursuant to Health and Safety Code Section 33334.3(d), a redevelopment agency was required to determine annually that the planning and administrative expenses were necessary for the production, improvement, or preservation of low and moderate income housing. H. In fiscal year 2012-13, the Housing Authority, as housing successor to the former Agency, has used the moneys in the Housing Authority's Low and Moderate Income Housing Asset Fund to the maximum extent possible to defray the costs of production, improvement, and preservation of low and moderate income housing and the amount of money spent for the planning and general administrative activities associated with the development, improvement, and preservation of that housing was not disproportionate to the amount actually spent from the Low and Moderate Income Housing Asset Fund for the costs of production, improvement, or preservation of that housing. NOW, THEREFORE, BE IT RESOLVED that the Housing Authority hereby finds and determines, as housing successor to the former Agency, that the planning and administrative expenses paid from the Housing Authority's Low and Moderate Income Housing Asset Fund in Fiscal Year 2012-2013 were (a) necessary for the production, improvement, or preservation of low and moderate income housing, (b) not disproportionate to the amount actually spent from the Low and Moderate Income Housing Asset Fund for the costs of production, improvement or preservation of low and moderate income housing, and (c) limited to the costs set forth in Health and Safety Code Section 33334.3 (e)(1). PASSED, APPROVED AND ADOPTED, at the regular meeting of the Palm Desert Housing Authority held on this 14th day of November 2013, by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: Jan C. Harnik, Chairman ATTEST: Rachelle D. Klassen, Secretary G:\rda\Veronica Tapia\Word Files\Staff Reports\2012-13 Housing Production Cost Resolution 11-14-13.DOC