I. RECOMMENDATION:
Receive and file the Housing Successor Agency SB341 Annual Report for Fiscal Years 2013-14 through 2018-19.
II. BACKGROUND:
Staff is presenting Housing Successor Agency Annual Reports for Fiscal Years 2013-14 through 2018-19 to the City Council, serving as the Housing Successor Agency of the former Coalinga Redevelopment Agency. The annual reports are required by State law and detail compliance with various expenditure, productions, and property disposition requirements.
III. DISCUSSION:
The City of Coalinga (“City”) is the Housing Successor Agency (“Housing Successor”) to the former Coalinga Redevelopment Agency (“Agency”). Health and Safety Code (“HSC”) Section 34176.1 (enacted by Senate Bill 341 and related legislation) requires the Housing Successor to prepare an annual report documenting compliance with expenditure proportionality and other requirements pertaining to its Low and Moderate Income Housing Asset Fund (“Housing Asset Fund”). The report is due to the California Department of Housing and Community Development (“HCD”) by April 1st annually. The report must also be presented to City Council and posted on the City’s website.
All California redevelopment agencies were dissolved by State law on February 1, 2012. The former Agency’s affordable housing rights, powers, assets, liabilities, duties, and obligations, excluding any amounts in the Agency’s Housing Asset Fund, were transferred to the City as the Housing Successor Agency. Housing assets and liabilities were transferred to the City through a Housing Asset Transfer Form (“HAT”) approved by the Department of Finance (“DOF”) on December 15, 2012.
Housing Successor staff and consultants have prepared Housing Successor Agency Annual Reports for Fiscal Years (“FY”) 2013-14 through 2018-19 in order to catch up with its annual reporting requirements. The reports are being presented to City Council to receive and file. Staff will also submit the reports to HCD. Following is a summary of compliance with HSC 34176.1 as of FY 2018-19.
Low and Moderate Income Housing Asset Fund Activity
The Housing Asset Fund includes all assets that were transferred from the former Agency to the Housing Successor upon redevelopment dissolution. The assets included:
- Real properties, and
- Loan/grants receivable
As of June 30, 2019, the Housing Asset Fund had an ending balance of $352,602.
The Housing Successor received $181,050 in deposits in FY 2018-19. The source of the deposits was from loan repayments and interest. Deposits since FY 2013-14 have ranged from $1,229 through $181,050, and vary each year depending on loan repayment activity.
The Housing Successor spent $19,854 on administrative items in FY 2018-19. Expenses since FY 2013-14 have ranged from $7,064 to $19,854, all related to administrative expenses. The law sets an annual limit on administrative expenses of $200,000 per year, adjusted annually for inflation. Coalinga has spent well below the annual limit each year.
Property Disposition
The Agency transferred three real properties to the Housing Successor. The Housing Successor is developing a strategy for each property’s disposition or development, taking several factors into consideration, including whether it is more beneficial to develop properties to provide housing, or to receive sales proceeds to spend on affordable housing activities within the expenditure limitations set by the HSC.
Properties must be developed with affordable housing or sold within five years of DOF approving a Housing Asset Transfer form, or December 15, 2017. The City Council may adopt a resolution to extend this deadline by five years to December 15, 2022. Staff will present a resolution to City Council for this extension.
Outstanding Inclusionary and Replacement Housing Obligations
The Agency did not have any outstanding inclusionary or replacement housing obligations at the time of dissolution. There are no outstanding inclusionary or replacement housing obligations to be fulfilled by the Housing Successor.
Income & Age Proportionality
If housing successors expend money on projects, State law requires at least 30% to be spent on extremely low income rental housing in a five-year period, among other restrictions. The first five-year compliance period period began January 1, 2014 and ended on June 30, 2019. During this period, the Housing Successor did not spend Housing Asset Fund monies on income-contingent housing projects.
State law also sets a limit of 50% on the portion of deed-restricted rental housing that may be restricted to seniors if assisted by the City or former Agency in the prior ten years. The City and former Agency did not assist the construction of any senior rental units in the prior ten years; therefore, the Agency is in compliance.
Excess Surplus
Senate Bill 341 reinstated a requirement to prevent housing successors from accumulating an excess surplus, which is generally defined as unencumbered cash that exceeds the greater of $1 million or the aggregate amount deposited into the Housing Asset Fund in the preceding four years.
The Housing Asset Fund had a beginning cash balance of $189,495 in FY 2018-19. The sum of deposits in the prior four years is $202,381. The Housing Successor has no excess surplus because the unencumbered cash balance is less than $1 million.
State law requires the Housing Successor to spend or encumber any future excess surplus within three fiscal years of acquiring the surplus. If the surplus is not spent within the allotted timeframe, all remaining surplus funds will be remitted to HCD for statewide housing projects.
Homeownership Unit Inventory
State law requires the annual report to contain an inventory of any homeownership units assisted by the Housing Successor that require restrictions, covenants, or an adopted program that protects Housing Asset Fund monies. The Housing Successor oversees 25 homeownership units with affordability restrictions.
IV. ALTERNATIVES:
None.
V. FISCAL IMPACT:
There will be no impact to the General Fund at this time.
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