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HomeMy WebLinkAboutRDA Min 1998-06-22 5-26-98 / 6-22-98 which there is some, particularly in the Old Town area, through rehabilitation of certain apartments and detached housing, doing so while trying to maintain the residential character and mix that currently exists in Old Town. There are several ways that the Agency can move into an affordable housing program, do things that will lead to the reinvestment and upgrading of run-down properties, utilize Agency set aside monies in the form of both grants for specific purposes and loans of sufficiently low interest rates to encourage a property owner to reinvest in a property, it is, believed that the program to next be presented could enhance the exterior of properties, including landscaping, which tends to increase property values of a neighborhood, that will be an objective of the program brought before the Council. It was noted there would be a mix of owner occupied homes, particularly older owners who have resided in the home for many years, where there is not means to accomplish some exterior maintenance, while also addressing some of the problem, multi-family properties that have not been kept up, a mix of different levels of Agency participation monetarily as an incentive. The Manager confirmed that applications and income verifications would be handled by the City, if the applicable criteria is met then loans and securities would be dealt with through a financial institution, all subject to the availability of sufficient funds, at this point not knowing the interest rates or participation it would be expected this will be done in phases. He noted also that there is a deadline to commence such a program by the end of the fiscal year. I I Agencymember Brown presented a commemorative plaque to Chairman Campbell for her services as Chairman of the Agency for 1997/98. Chairman Campbell accepted with appreciation. ADJOURNMENT By unanimous consent, the meeting was adjourned at 7:10 p.m. ~ra;;;m~ Chairman I Seal Beach, California June 22, 1998 The Redevelopment Agency of the City of Seal Beach met in special session at 6:32 p.m. with Chairman Campbell calling the meeting to order with the Salute to the Flag. 6-22-98 ROLL CALL Present: Chairman Campbell Agencymembers Boyd, Brown, Doane Absent: Agencymember Yost I Brown moved, second by Doane, to excuse the absence of Agencymember Yost from this meeting. AYES: NOES: ABSENT: Boyd, Brown, Campbell, Doane None Yost Motion carried Also present: Mr. Till, Executive Director Mr. Steele, Assistant City Attorney Mr. Whittenberg, Director of Development Services Mrs. Yeo, City Clerk/Secretary Chairman Campbell read the Notice of Special Meeting for the record as follows: I " Patricia Campbell, 4433 Ironwood Avenue, Seal Beach Paul Yost, 485 Schooner Way, Seal Beach Shawn Boyd, 229 - 7th Street George Brown, 1710 Tam O'Shanter Road, 12-H, Seal Beach William Doane, 1401 Skokie Road, 83-A, Seal Beach NOTICE IS HEREBY GIVEN that patricia Campbell as presiding officer of the Redevelopment Agency of the City of Seal Beach hereby calls and gives notice of a special meeting of the Redevelopment Agency to be held on Monday, June 22nd, 1998 at 6:30 p.m., rather than the regular meeting time of 6:45 p.m., in the City Council Chambers, 211 - 8th Street, Seal Beach, California, for the purpose of: ** Receiving a status report with regard to the Affordable Housing Program, approving a Seal Beach Residential Housing Rehabilitation Program, and for any further discussion or action related directly thereto. DATED THIS 18th day of June, 1998. I Patricia E. Campbell, Chairman Seal Beach Redevelopment Agency by Joanne Yeo, City Clerk/Secretary City of Seal Beach " 6-22-98 APPROVAL OF AGENDA Boyd moved, second by Brown, to approve the order of the agenda as presented. AYES: NOES: ABSENT: Boyd, Brown, Campbell, Doane None Yost Motion carried I WAIVER OF READING Boyd moved, second by Brown, to waive the reading in full of all resolutions and that consent to the waiver of reading shall be deemed to be given by all Agencymembers after reading of the title unless specific request is made at that time for the reading of such resolution. AYES: NOES: ABSENT: Boyd, Brown, Campbell, Doane None Yost Motion carried ORAL COMMUNICATIONS There were no Oral Communications presented. REPORT - AFFORDABLE HOUSING PROGRAM The Executive Director stated that the purpose of this item is for the Agency to consider a proposed residential rehabilitation program in response to the State mandate for funds accumulated for creating, preserving, and/or restoring low and moderate income housing, the funds accumulated locally over the years is now slightly more than $1.7 million, and noted that the deadline for encumbrance of the funds for this program is the end of this month, otherwise they could be required to be forfeited to the County. Mr. Lou Shepard, The City Associates, stated their firm offers consulting services to cities and redevelopment agencies with regard to residential rehabilitations and other issues, was retained by this Agency this past year, and with considerable consultation with staff, produced the program now before the Agency relative to residential property within Seal Beach. Mr. Shepard noted that the program goals are to encourage structural and aesthetic improvements of residential properties, exterior improvements such as landscaping, etc. is an intregral part of the overall program. He said the target is to serve sixty-five single family homes and ten multi-family units annually, much of that will depend upon the marketing program of the city and the response from the property and homeowners in the community, the program could actually serve more than sixty-five units, in fact two or three hundred could be realized in the first couple of years, the sixty-five is not a limit, rather a target, also, the program is intended to provide financial incentives by means of interest rates, deferred loans, and cash rebates proportionate to the ability to pay of low and moderate income homeowners, and owners of rental property serving low and moderate income families. He mentioned that the definition of low and moderate, a legal definition contained in State law, will be seen as generous in terms of serving most of the population of the City, as to who is eligible, a family of one person at the median income level making I I 6-22-98 I $46,100 per year up to a family of four making $65,500, therefore this would in no way be termed a low cost housing program, rather, intended to meet the needs of a majority of local homeowners and the State in general. Mr. Shepard stated that the recommended programs for a single family within the eligible income would be forty to one hundred twenty percent of the median, one hundred twenty percent for a family of four at the $65,000 median would be into the $70,000 category, the programs are intended to be used individually as the need arises, again depending on the income level and the ability to pay of each individual family. There is the opportunity for second trust deed programs using FHA Title I with an interest rate write-down in order to make the program affordable, in addition, there would be an opportunity for an exterior loan of up to $5,000 amortized over five years at three percent interest which can be used for paint, landscaping, fences, etc., this to improve the aesthetics and impact on the overall neighborhood. There is also a deferred loan program for those at the low income level where there is no payment required for a period of fifteen years or when the property is sold or refinanced, whichever occurs first, also, a cash rebate for exterior improvements up to $2,500 and if professional design assistance is used there is potential of a ten percent increase, all of the programs are simple interest, all programs can be used in tandem. As to multi-family, this is intended for the property owner and serves those of income between fifty to eighty percent of the County median, this includes a second trust deed program of $10,000 per unit or $50,000 total for a building for structural and Code requirements, that too financed through a FHA Title I program, amortized over fifteen years with interest rate write downs if the property owner guarantees affordable rents for a period of up to five years, the second element of that program is again an exterior loan, $2,000 per unit, up to $10,000 per building, also related to the affordable rent agreement, as well as a cash rebate potential, the understanding is that the reference to the term cash rebate is because the property owner performs the work in accordance with the criteria of the program then the Agency actually pays for the work up to eighty percent. Mr. Shepard responded in the negative to an inquiry if the owner is required to reside on-site however explained again the requirement to agree to affordable rent for a period of five years. As an example, an individual may take a Title I loan in the amount of $15,000 for fifteen years, the interest rate could be reduced by five and a half percent which would then be $123 per month, an exterior loan included in this example of $3,950 at three percent for five years would be $71.98, the object is to make sure that the cost of the loan to the homeowner does not exceed twenty-five percent of the homeowner's income, that includes the first and/or second mortgage, or combination thereof. Mr. Shepard explained that labor costs under any of the programs is covered only to the extent that the work is done by a licensed contractor or sub- contractor, thus the individual could not price out their own labor and receive a subsidy for that, it is important that the work be done professionally in order to protect the I I 6-22-98 investment of the Agency in the property, also, no work would be eligible for reimbursement that is done prior to application approval, and again, in the case of multi-family dwellings the property owner would be required to agree to the five year affordable rent program. Examples of how the rent under the five year program might relate, a recent rent I survey in Seal Beach found that a typical three bedroom rent may run between $1,200 to $1,500 per month, a two bedroom may be between $1,000 to $1,200, HUD rents are adjusted on an annual basis therefore this is no more than a requirement that the owner that would enter into the rent agreement not charge rent in excess of the market. As to a program budget, Mr. Shepard said it is understood there is an accumulation of a little more than $1.7 million, the anticipated costs have been calculated for the $1.4 million program recommended, there are areas where there is an opportunity to spend more, that with the approval of the Agency, primarily more major projects consisting of large buildings, etc. where rehabilitation may be encouraged. Mr. Shepard noted the importance of making specific reference to the Seal Beach Rehabilitation Program, not to be confused with any other program, a Program completely within the control of the City Council acting as the Redevelopment Agency. He noted that there is one other classification of cost that has not been included, the administrative cost of operating the program, an eligible expense that has not been estimated, to some degree that cost depends on the level of activity, it is I believed that an accounting procedure can be set up that reflects an hourly rate that would be charged by personnel that work on the program. Mr. Shepard said at this point it is believed that City staff will be involved in the marketing activities of the Program, the acceptance of applications, the initial screening, customer assistance, City permits, the lender, and referral to the contract lender, and it is recommended that a contract be entered into with a financial institution that has the capability and experience to work with the City in this program, the institution would do the actual underwriting, credit checks, all of the due diligence to assure that the funds are loaned within appropriate lending standards. Question was asked if many people declare bankruptcy under such programs, to which the response of Mr. Shepard was not to his knowledge, they generally operate well. The City Manager noted that the area targeted for this Program was Old Town as the oldest portion of the community, having the greatest number of dwellings that would qualify, several properties have been identified as showing first signs of blight, the Program could also be expanded to include other properties and is not confined to the I Redevelopment Project Area. He mentioned that there have been discussions with the Bank of America to administer the financial aspects of the Program as they have experience in this area, if approved by the Agency staff will proceed with their services, at this point it is uncertain as to how many applications can be anticipated, upon the cutoff date there will be a formula to evaluate the applications based upon level of income and the amount of loan in proportion to total indebtedness, determining those most in need financially. To a scenario that there are considerably more applications than 6-22-98 I there is money for, question was who is to make the selections, the response was the City Manager and Director of Development Services, the following question was whether the Council/Agency would establish the criteria for such decisions, to which the response was that it is not desirable to be flexible to the point of making arbitrary decisions, therefore a formula has been developed so that there is some flexibility yet the income criteria is set, with a maximum percentage of total income that can go towards the loans, that is a limiting device. As to staff time anticipated, it was said that this Program is an Agency eligible expense. There was a comment that preference would be that the monies be dispersed only after Council/Agency review, added was that at least the Councilperson from the respective District should be involved in the evaluation and selection process. Mr. Shepard said typically the decision making criteria is staff administered with regular reports to the Council/Agency that includes the number of applications, identification of properties, and the loan amounts, subject to the criteria established by the Council/Agency. As to a larger number of applications than available money, Mr. Shepard pointed out that there would be an approved budget, if that is to be expanded then the City Manager should bring that matter before the Council/Agency. The Manager offered that some problems could be realized if the process is very subjective and participation is brought before the Agency. The response again was preference that all applications and appurtenant information be brought before the Agency for consideration initially. Mr. Shepard pointed out that many aspects of the loan program approvals, etc., are within the purview of the bank, not City staff members, which will apply its due diligence. The Assistant City Attorney noted that one concern they would have with the Agency considering the applications would be privacy rights as that relates to credit reports, income levels, personal information that would not be appropriately disclosed in public, most cities merely provide a summary report of activity, omitting any personal information that would be accessible to the public. Councilman Boyd spoke favorably of the Program, the money is there, it needs to be encumbered and made available to the public. As a point of clarification he explained that there would be a time frame for application, with a well defined period of closing, thereafter there is a period for review, thereafter the disbursement of funds, and emphasized his opinion that personal information should not come before the Councilor Agency, rather a report of the number of applications received, the number reviewed and acted upon, the funds distributed to, and the amount of money, also, pointed out that there is no identified Program manager, either the Manager or Director needs to assume that role, and, inasmuch as this is $1.7 million plus, requested that a marketing plan be provided. He noted that Agency approval will encumber the funds, thereafter further information is requested to be provided before implementation of the Program. I I Boyd moved, second by Brown, to approve the Seal Beach Residential Rehabilitation Program as presented. 6-22-98 / 7-27-98 AYES: NOES: ABSENT: Boyd, Brown, Campbell, Doane None Yost Motion carried ADJOURNMENT It was the order of the Chair, with consent of the Agency, to adjourn the meeting at 7:05 p.m. I 1.~~ f~~ Seal Beach, California July 27, 1998 The Redevelopment Agency of the City of Seal Beach met in regular session at 6:59 p.m. with Chairman Campbell calling the meeting to order with the Salute to the Flag. I ROLL CALL Present: Chairman Campbell Agencymembers Boyd, Brown, Doane, Yost Absent: None Also present: Mr. Till, Executive Director Mr. Barrow, City Attorney Mrs. Yeo, City Clerk/Secretary APPROVAL OF AGENDA Brown moved, second by Boyd, to approve the order of the agenda as presented. AYES: NOES: Boyd, Brown, Campbell, Doane, Yost None Motion carried WAIVER OF FULL READING Brown moved, second by Boyd, to waive the reading in full of all resolutions and that consent to the waiver of reading shall be deemed to be given by all Agencymembers after reading of the title unless specific request is made at that time for the reading of such resolution. I AYES: NOES: Boyd, Brown, Campbell, Doane, Yost None Motion carried