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Home My WebLink AboutRDA AG PKT 2006-05-22 #4 AGENDA REPORT DATE: May 22, 2006 TO: Chairperson and Members of the Red~elopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: ADOPTION OF RESOLUTION NO. ,A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY AUTHOIDZING THE PAYMENT OF UP TO S10,000 TO PROVIDE ASSISTANCE ALLOWABLE UNDER PEVIOUSLY ADOPTED PROGRAM GUIDELINES UNDERTAKEN DURING TIME OF PROGRAM SUSPENSION SUMMARY OF REQUEST: Adopt Resolution No. _' A Resolution of the Seal Beach Redevelopment Agency Authorizing the Payment of up to $10,000 to Provide Assistance Allowable Under Previously Adopted Program Guidelines Undertaken During Time of Program Suspension. BACKGROUND: Overview of Reauest: The Agency was placed in the position in August, 2003 of suspending the processing of II applications for rehabilitation loan and grant assistance due to the delay in the MPROP loan being funded by the State of California as part of the financial transaction for the acquisition of the Seal Beach Trailer Park. As the Agency is now aware, the MPROP loan was made by the State of California and the City has been repaid the net proceeds from the Agency "bridge loan" made to assist in the acquisition of the Seal Beach Trailer Park. The City's rehabilitation consultant, CivicStone, has contacted all of the applicants placed in suspension in 2003 to continue with their projects. At this point in time, CivicStone has identified one applicant, and others may still be identified, that proceeded to undertake allowable program activities during the suspension time at their own expense to address immediate concerns that they faced regarding the livability of their housing unit. These rehabilitation activities were in compliance with the Agency adopted Agenda Item R/)/}- Y IIDAT AFILEIUsersU. Wh.ttenberg\My DocumentsIRDAlProgram Su,pen,ion.A11owed Fund111g.RDA SI>ffReport.docU. WlOS-03.Q6 Request to Authorize Modification of Adopted Loan And Grant Program Guidelines for Previously Allowable Program Activities Undertaken During Program Suspension Redevelopment Agency Stqlf Report May 22. 2006 Program Guidelines then in effect. This applicant has requested that the Agency consider funding the costs of that allowable rehabilitation work out of the funds previously allocated and set aside for this particular project. This would allow the applicant to pay off a personal loan taken out to fund the allowable rehabilitation work and result in a reduced paynient for the work. Any remaining balance of funds would be available to complete additional improvements to their housing unit. Staffhas reviewed this issue with the City Attorney and has been informed that this is a policy matter, and there are no legal prohibitions that would preclude the Agency from approving this type of request. The request would improve the financial ability .of current program participants, fund an allowable program activity, and not penalize a program participant for undertaking work previously determined to be eligible and necessary. Staff recommends approval of the proposed resolution. This action would only pertain to the 11 applicants that were placed in suspension in August 2003, all other program participants will not be allowed to utilize the recommended action, as their projects were not involved with the fonnal program suspension. These applicants are proceeding under the revised Program Procedures adopted by the Agency on March 13, 2006. FISCAL IMPACT: No impacts to the Agency. As indicated within the Staff Report, the Agency has already committed to funding loan and grants in amounts that anticipated the subject allowable work would be financed through the various Agency programs. RECOMMENDATION: Adopt Resolution No, , A Resolution of the Seal Beach Redevelopment Agency Authorizing the Payment of up to $10,000 to Provide Assistance Allowable Under Previously Adopted Program Guidelines Undertaken During Time of Program Suspension. Whittenberg irector of Development Services 2 Prognun SUSpcllSlon Allowed Funding.RDA Staff Report Request to Authorize Modification of Adopted Loan And Grant Program Guidelines for Previously Allowable Program Activities Undertaken During Program Suspension Redevelopment Agency Stoff Report May 22, 2006 Attachments: (2) Attachment 1: Resolution NO. , A Resolution of the Seal Beach Redevelopment Agency Authorizing the Payment of up to $10,000 to Provide Assistance Allowable Under Previously Adopted Program Guidelines Undertaken During Time of Program Suspension Attachment 2: Overview of Available Loan and Grant Programs Offered by the Redevelopment Agency at Time of Program Suspension (August 2003) 3 Program SUSpellBion.Allowed Fundmg.RDA StaffRoport Request to Authorize Modification of Adopted Loan And Grant Program Guidelines for Previously Allowable Program Activities Undertaken During Program Suspension Redevelopment Agency Staff Report May 22, 2006 ATTACHMENT 1 RESOLUTION NO. , A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT . AGENCY AUTHORIZING THE PAYMENT OF UP TO $10,000 TO PROVIDE ASSISTANCE ALLOWABLE UNDER PREVIOUSLY ADOPTED PROGRAM GUIDELINES UNDERTAKEN DURING TIME OF PROGRAM SUSPENSION 4 PI:osram SuspellSlon Allowed Funding RDA StaffRoport Request to Authorize Modification of Adopted Loan And Grant Program Guidelines for Previously Allowable Program Activities Undertaken During Program Suspension Redevelopment Agency Stcifl Report May 22, 2006 RESOLUTION NO, A RESOLUTION OF THE SEAL BEACH REDEVELOP:MENT AGENCY AUIHORIZING THE PAYMENT OF UP TO $10,000 TO PROVIDE ASSISTANCE ALLOWABLE UNDER PREVIOUSLY ADOPTED PROGRAM . GUIDELINES UNDERTAKEN DURING TIME OF PROGRAM SUSPENSION The Redevelopment Agency of the City of Seal Beach hereby resolves as follows: . SECTION 1.- .In 2002 the Redevelopment Agency ("Agency") adopted Program:- Guidelines for available loan and grant programs that are funded by the Redevelopment Agency Low- and Moderate-Income Housing Assistance Funds. SECTION 2. The Agency was placed in the position in August, 2003 of suspending the processing of 11 applications for rehabilitation loan and grant assistance due to the delay in the MPROP loan being funded by the State of California as part of the financial transaction for the acquisition of the Seal Beach Trailer Park. SECTION 3. The MPROP loan was made by the State of Califorma and the City has been repaid the net proceeds from the Agency "bridge loan" made to assist in the acquisition of the Seal Beach Trailer Park. SECTION 4, The City's rehabilitation consultant, CivicStone, has identified one applicant, and others may still be identified, that proceeded to undertake allowable program activities during the suspension time at their own expense to address immediate concerns that they faced regarding the livability of their housing unit, and are now requesting consideration of the Agency to fund this work. SECTION S. The request would improve the financial ability of current program participants, fund an allowable program activity, and not penalize a program participant for undertaking work previously determined to be eligible and necessary. SECTION 6. The Agency hereby directs the Chairman of the Redevelopment Agency to instruct City Staff and the City's Housing Consultant to authorize the payment of up to $10,000 to provide assistance for work undertaken during the time of program suspension that was allowable under the previously adopted Program Guidelines. 5 Prosram S"pOl1Sion.AIlowed Funding.RDA StaffRoport Request to Authorize Modification of Adopted Loan And Grant Program Guidelines for Previously Allawable Program Activities Undertaken During Program Suspension Redevelopment Agency Stqff Report May 22, 2006 SECTION 7, This direction by the Agency is for this particular set of circumstances and neither Agency Staff nor the Agency Housing Consultant shall utilize this authorization in representing to any other future program participant that any alternative funding program is available except that previously approved by the Agency. Any such future request shall require individual review and consideration by the Agency. SECTION 8. The City Clerk shall certify to the passage and adoption of this resolution. PASSED. APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof held on the day of , 2006 by the following vote: AYES: Agency Members NOES:. Agency Members ABSTAIN: Agency Members ABSENT: Agency Members CHAIRMAN ATIEST: SECRETARY STATEOFCALIFORNIA } COUNTY OF ORANGE } SS CTIY OF SEAL BEACH } I, Linda Devine, City Clerk of the City of Seal Beach. California, and Secretary to the Seal Beach Redevelopment Agency, do hereby certify that the foregoing resolution is the original 6 ProJllOlll Susponsion.Allowed Funding.RDA Staff Report Request to Authorize Modification of Adopted Loan And Grant Program Guidelines for Previously Allowable Program Activities Undertaken During Program Suspension Redevelopment Agency StqiJ Report May 22, 2006 copy of Resolution Number on file in the office of the City Clerk, passed, approved, and adopted by the Redevelopment Agency of the City of Seal Beach, at a regular meeting thereof held on the day of .2006. Linda Devine, City Clerk/Secretary Seal Beach Redevelopment Agency 7 PlOgnun Suspension.A1lowed Funding RDA Staff Report Request to Authorize Modification of Adopted Loan And Grant Program Guidelinesfor Previously Allowable Program Activities Undertaken During Program Suspension Redevelopment Agency StqfJ Report May 22, 2006 ATTACHMENT 2 OVERVIEW OF AVAILABLE LOAN AND GRANT PROGRAMS OFFERED BY THE . REDEVELOPMENT AGENCY AT TIME OF PROGRAM SUSPENSION (AUGUST 2003) 8 Prognun SUSpOllSIOll Allowed Fundlng.RDA Staff Report Request to Authorize Modification of Adopted Loan And Grant Program Guidelinesfor Previously Allowable Program Activities Undertalcen During Program Suspension Redevelopment Agency Stqff Report May 22, 2006 Overview of Available Loan and Grant Prol!rams Offered bv the Redevelopment Al!encv at Time ofProl!ram Suspension (Aul!ust 2003) In 2002 the Agency approved various loan and grant programs to provide assistance to qualified low- and moderate-income persons and families within the community in compliance with the requirements of State law. Those programs are briefly summarized below: A. Owner-Occupied Home Improvement Loan Program: Cl The loan is deferred until the homeowner sells or refinances the property or a change in title occurs. After 10 years, 1/1Oth of the principal and interest is forgiven each year until it is entirely forgiven. Cl The Owner-Occupied Home Improvement Loan Program offers a very low interest rate of 2% to all income-qualified program participants, Cl The maximum available loan amount is $50,000. Cl Owner occupied single-family residences, mobile homes, and condominiums qualify for this program. Cl This program is only available for non-substantial levels of rehabilitation (less than 25% of the after-rehab value). Substantial rehabilitation requires a different set of loan terms and criteria. B. Owner-Occupied Home Improvement Grant Program: Cl The maximum available grant amount is $10,000. Cl Owner occupied single-family residences, mobile homes, and condominiums qualify for this program. C. Mortgage Assistance Program (MAP) Loan Program: Cl Maximum assistance is $35,000. Cl A "silent second" is placed on the property, accruing interest at 2% annually. Cl If property is not re-sold in 30 years, the loan is forgiven. Cl If property is re-sold within the 30 years to a qualified low- or moderate- income purchaser, the remaining loan obligation is assumed by the new purchaser. Cl If home is sold within 30 years to a non-qualified low- or moderate- income purchaser, then the loan is due and payable at the time of sale, including accrued interest and a percentage of the equity increase in the property. If sold between 30 and 45 years, there is no accrued interest to be paid. 9 Prosram Suspenslon.A1lowed Funding.RDA StalfRoport