HomeMy WebLinkAboutCC AG PKT 2012-02-27 #FBACKGROUND AND ANALYSIS:
SUMMARY OF REQUEST:
AGENDA STAFF REPORT
DATE: February 27, 2012
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Mark H. Persico, AICP, Director of Development Services
SUBJECT: CITY ELECTION REGARDING HOUSING DUTIES
AB 26 provides that cities may elect to retain the housing assets and functions
previously performed by the redevelopment agency. Based upon the following
analysis, staff recommends that the City Council not elect to retain the housing
assets and functions previously performed by the Seal Beach Redevelopment
Agency.
As previously reported, the Supreme Court largely upheld AB 26 (which provides
for the windup and dissolution of redevelopment agencies), invalidated AB 27
(which provided for an alternative voluntary redevelopment program), and held
that AB 26 may be severed from AB 27 and enforced independently. The
Supreme Court generally revised the effective dates and deadlines for
performance of obligations in Part 1.85 (the dissolution provisions) arising before
May 1, 2012 to take effect four months later. As a result of the Supreme Court's
decision, on February 1, 2012, all redevelopment agencies, including the Seal
Beach Redevelopment Agency, were dissolved.
Health and Safety Code Section 34176(a) authorizes a city that created a
redevelopment agency to elect to retain the housing assets and functions
previously performed by the redevelopment agency. If a city elects to retain the
responsibility for performing housing functions previously performed by the
redevelopment agency, Section 34176(a), as adopted, provides that all rights,
powers, duties, and obligations, excluding any amounts on deposit in the Low
and Moderate Income Housing Fund, shall be transferred to the City.
Health and Safety Code Section 34176(b), as adopted, provides that if a city
does not elect 'to retain the responsibility for performing housing functions
previously performed by the redevelopment agency, all rights, powers, assets,
liabilities, duties, and obligations associated with the housing activities of the
redevelopment agency, excluding any amounts on deposit in the Low and
Agenda Item F
Moderate Income Housing Fund, shall be transferred as follows: (1) where there
is no local housing authority in the territorial jurisdiction of the former
redevelopment agency, to the Department of Housing and Community
Development; (2) where there is one local housing authoring in the territorial
jurisdiction of the former redevelopment agency, to that local housing authority;
and (3) where there is more than one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to the local housing authority
selected by the city that authorized the creation of the redevelopment agency.
Orange County Housing Authority (OCHA) is a division within Orange County
Community Services and is in the territorial jurisdiction of the former
Redevelopment Agency. Health and Safety 34176(c) provides that the entity
assuming the housing functions formerly performed by the redevelopment
agency may enforce affordability covenants and perform related activities
pursuant to applicable provisions of the Redevelopment Law, including, but not
limited to, Health and Safety Code Section 33418.
The Agency did not own any housing assets. As listed in the Five Year
Implementation Plan (2009- 2014), the Agency had the following programs:
1. Mobile home park rental assistance program - $180,000 annually
2. Housing rehabilitation loan and grant program - $120,000 annually
These two programs cost the former Agency approximately $300,000 annually.
Without revenue from the redevelopment project area, those costs would be
borne by the City. Staff does not believe the General Fund can or should absorb
these costs. Additionally, the rental subsidy is listed as an enforceable obligation
on the successor agency's initial draft Recognized Obligation Payment Schedule
(ROPS). But it is uncertain whether the state will consider the rental subsidy an
enforceable obligation or a housing function. In any event, we do not recommend
that the City use General Fund money to pay the annual subsidy.
In addition, redevelopment funds were used for the administrative costs
associated with administering the Community Development Block Grant (CDBG)
for housing rehabilitation in Leisure World to install bathroom improvements that
improved disabled access within the bathrooms. The City has received an
average of almost $200,000 annually for the bathroom improvement program.
This week we received notification that the Leisure World program will be funded
again. While we do not know the exact funding level, we anticipate the funding
will be approximately $170,000, which will become available in October. The
cost to administer this program is approximately $60,000 for FY 2012 -13.
However, due to AB 26, the City cannot use existing redevelopment funds, the
$250,000 administrative costs fund, or future tax increment to pay such costs.
Nonetheless, staff will be recommending that the City continue participating in
this program, and that the City Council include the costs and expenses in the FY
2012 -13 budget.
Page 2
ENVIRONMENTAL IMPACT:
There will be no new environmental impact associated with the decision outlined
above.
LEGAL ANALYSIS:
The City Attorney has reviewed and approved as to form.
FINANCIAL IMPACT:
AB 26 does not appear to authorize a funding mechanism for performing housing
functions previously performed by the Redevelopment Agency. The $250,000
administrative costs authorized by AB 26 cannot be used for such functions.
Thus, if the City Council were to elect to assume the housing duties and
functions of the Redevelopment Agency, the City would continue the Housing
Rehabilitation loan and grant program at a cost of approximately $120,000
annually.
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 6225 electing not to
retain the housing assets and functions previously performed by the Seal Beach
Redevelopment Agency.
SUBMITTED BY:
NOTED AND APPROVED:
.,—----)
Mark H. Persico, AICP, . Ingram, City anger
Director of Development Services
Attachments:
A. Resolution No. 6225
Page 3
RESOLUTION NUMBER 6225
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL MAKING
AN ELECTION IN CONNECTION WITH HOUSING ASSETS AND
FUNCTIONS UNDER PART 1.85 OF DIVISION 24 OF THE
CALIFORNIA HEALTH AND SAFETY CODE AND TAKING
CERTAIN ACTIONS IN CONNECTION THEREWITH
RECITALS:
A. AB X1 26 and AB X1 27 were signed by the Governor of California
on June 29, 2011, making certain changes to the Community Redevelopment
Law (Part 1 (commencing with Section 33000) of Division 24 of the California
Health and Safety Code) (the "Redevelopment Law "), including adding Part 1.8
(commencing with Section 34161) ( "Part 1.8 ") and Part 1.85 (commencing with
Section 34170) ( "Part 1.85 ").
B. The California Redevelopment Association and League of
California Cities filed a lawsuit in the Supreme Court of Califomia ( Califomia
Redevelopment Association, et al. v. Matosantos, et al. (Case No. S194861))
alleging that AB X1 26 and AB X1 27 are unconstitutional. On December 29,
2011, the Supreme Court issued its opinion in the Matosantos case, largely
upholding AB X1 26, invalidating AB X1 27, and holding that AB X1 26 may be
severed from AB X1 27 and enforced independently.
C. The Supreme Court generally revised the effective dates and
deadlines for performance of obligations in Part 1.85 arising before May 1, 2012,
to take effect four months later.
D. As a result of the Supreme Court's decision, the Seal Beach
Redevelopment Agency ( "Redevelopment Agency "), a redevelopment agency in
the City of Seal Beach ( "City "), created pursuant to the Redevelopment Law, was
dissolved pursuant to Part 1.85 on February 1, 2012.
E. Health and Safety Code Section 34176(a) authorizes a city that
created a redevelopment agency to elect to retain the housing assets and
functions previously performed by the redevelopment agency. Pursuant to
Section 34176(a), if a city elects to retain the responsibility for performing
housing functions previously performed by the redevelopment agency, all rights,
powers, duties, and obligations, excluding any amounts on deposit in the Low
and Moderate Income Housing Fund, shall be transferred to the City.
F. Health and Safety Code Section 34176(b) provides that if a city
does not elect to retain the responsibility for performing housing functions
previously performed by the redevelopment agency, all rights, powers, assets,
liabilities, duties, and obligations associated with the housing activities of the
redevelopment agency, excluding any amounts in the Low and Moderate Income
Housing Fund, shall be transferred as follows: (1) where there is no local housing
authority in the territorial jurisdiction of the former redevelopment agency, to the
Department of Housing and Community Development; (2) where there is one
local housing authoring in the territorial jurisdiction of the former redevelopment
agency, to that local housing authority; and (3) where there is more than one
local housing authority in the territorial jurisdiction of the former redevelopment
agency, to the local housing authority selected by the city that authorized the
creation of the redevelopment agency.
G. The Orange County Housing Authority is in the territorial jurisdiction
of the former Redevelopment Agency.
Resolution Number 6225
H. Health and Safety 34176(c) provides that the entity assuming the
housing functions formerly performed by the redevelopment agency may enforce
affordability covenants and perform related activities pursuant to applicable
provisions of the Redevelopment Law, including, but not limited to, Health and
Safety Code Section 33418.
I. The City Council desires to adopt this resolution in connection with
the housing assets and functions previously performed by the Redevelopment
Agency.
NOW, THEREFORE, THE CITY COUNCIL HEREBY FINDS, DETERMINES,
RESOLVES, AND ORDERS AS FOLLOWS:
Section 1. The above recitals are true and correct and are a
substantive part of this Resolution.
Section 2. This Resolution is adopted pursuant to Health and Safety
Code Section 34176.
Section 3. Pursuant to Health and Safety Code Section 34176(b), the
City Council hereby elects for the City not to retain the responsibility for
performing housing functions previously performed by the Redevelopment
Agency, and hereby determines that all of the assets, as allowed by law, and all
rights, powers, assets, liabilities, duties, and obligations associated with the
housing activities of the Redevelopment Agency shall be transferred to the
Orange County Housing Authority.
Section 4. The officers and staff of the City are hereby authorized and
directed, jointly and severally, to make all notifications of the Council's election,
as set forth in Section 3 hereof, as deemed necessary or advisable and to
execute all documents and take all actions which they may deem necessary or
advisable to effectuate this Resolution, and any such actions previously taken by
such officers and staff are hereby ratified and confirmed.
Section 5. The adoption of this Resolution is not intended to and shall
not constitute a waiver by the City of any right the City may have to challenge the
legality of all or any portion of AB X1 26 through administrative or judicial
proceedings.
Section 6. This Resolution has been reviewed with respect to
applicability of the California Environmental Quality Act ( "CEQA "), the State
CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et
seq., hereafter the "Guidelines "), and the City's environmental guidelines. The
City Council has determined that this Resolution is not a "project" for purposes of
CEQA, as that term is defined by Guidelines Section 15378, because this
Resolution is an organizational or administrative activity that will not result in a
direct or indirect physical change in the environment. (Guidelines Section
15378(b) (5)).
Section 7. This Resolution shall take effect immediately upon its
adoption.
(Intentionally Left Blank)
Resolution Number 6225
PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a
regular meeting held on the 27th day of February , 2012 by the following vote:
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 6225 on file in
the office of the City Clerk, passed, approved, and adopted by the Seal Beach
City Council at a regular meeting held on the 27th day of February , 2012.
City Clerk
Mayor