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HomeMy WebLinkAbout09 - - Formation of CM Housing Authority - 1/17/2012CITY COUNCIL AND HOUSING AUTHORITY ITEM NO. IV. 1 AGENDA REPORT MEETING DATE: 01.17.12 SUBJECT: FORMATION OF COSTA MESA HOUSING AUTHORITY DATE: JANUARY 12, 2012 FROM: THOMAS R. HATCH, CHIEF EXECUTIVE OFFICER / AGENCY EXECUTIVE DIRECTOR CONTACT: ALMA PENALOSA, MANAGEMENT ANALYST / 714-754-5692 MURIEL ULLMAN, NEIGHBORHOOD IMPROVEMENT MANAGER / 714-754-5167 RECOMMENDED ACTIONS: CITY COUNCIL: 1. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DECLARING THAT THERE IS A NEED FOR A HOUSING AUTHORITY TO FUNCTION IN THE CITY, DECLARING THAT THE MEMBERS OF THE CITY COUNCIL SHALL BE THE COMMISSIONERS OF THE HOUSING AUTHORITY AND DESIGNATING THE FIRST INTERIM CHAIRMAN OF THE HOUSING AUTHORITY (Attachment 1) HOUSING AUTHORITY: 2. A RESOLUTION OF THE COSTA MESA HOUSING AUTHORITY DESIGNATING OFFICERS OF THE HOUSING AUTHORITY, ADOPTING PERSONNEL RULES AND REGULATIONS AND A CONFLICT OF INTEREST CODE AND PROVIDING FOR THE TIME AND PLACE OF HOLDING REGULAR MEETING OF THE HOUSING AUTHORITY (Attachment 2) 3. A RESOLUTION OF THE COSTA MESA HOUSING AUTHORITY (Attachment 3) ADOPTING BYLAWS OF THE AUTHORITY (Attachment 4) CITY COUNCIL: 4. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA DECLINING TO ASSUME THE HOUSING ASSETS AND FUNCTIONS OF THE COSTA MESA REDEVELOPMENT AGENCY AND CONFIRMING THAT THE COSTA MESA HOUSING AUTHORITY WILL ASSUME THE HOUSING ASSETS AND HOUSING FUNCTIONS PREVIOUSLY PERFORMED BY THE AGENCY PURSUANT TO HEALTH & SAFETY CODE SECTION 34176 (Attachment 5) HOUSING AUTHORITY: 5. A RESOLUTION OF THE COSTA MESA HOUSING AUTHORITY ACCEPTING THE HOUSING ASSETS AND FUNCTIONS OF THE COSTA MESA REDEVELOPMENT AGENCY (Attachment 6) BACKGROUND: As presented at your January 10, 2012 Joint Agency/City Council meeting, the California Supreme Court's decision in California Redevelopment Association, et al., v. Matosantos ("Matosantos") upholds AB X1 26 and causes the dissolution of all California redevelopment agencies as of February 1, 2012, and invalidates AB X1 27 that would have allowed redevelopment agencies to remain in existence if the agency opted in to the "Voluntary Alternative Redevelopment DOCSOC/1533521v2/022353-0002 Program" ("Program"). All projects (both commercial, infrastructure and affordable housing) which were not considered "enforceable obligations" were immediately invalidated as of the date of the Court's decision. Prior to February 1, 2012 City Council must make another election pursuant to AB X1 26, specifically regarding the housing assets and functions of to be dissolved Costa Mesa Redevelopment Agency, City of Costa Mesa, California ("Agency"). Pursuant to new Health & Safety Code Section 34176, the City may elect to retain the "housing assets and functions previously performed by the redevelopment agency." If the City elects to retain the responsibility, then "all rights, powers, duties, and obligations, [but] excluding any amounts on deposit in the Low and Moderate Income Housing Fund, shall be transferred to the [C]ity ...". If the City does not elect to retain the responsibility for performing housing functions then all such rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the former agency, again excluding the existing balances in the Housing Fund, must be transferred to: (1) the local housing authority, or (2) if there is more than one local housing authority in jurisdiction, then to the housing authority selected by the City, or (3) if there is no local housing authority then to State Department of Housing and Community Development (HCD). As explained at the Joint Council/Agency meeting on January 10, 2012, the Dissolution Act is not clear about the scope of the housing responsibilities, if assumed by the City of Costa Mesa; thus, the alternative of forming a local housing authority in Costa Mesa was discussed and the City Council directed staff and legal counsel to prepare this agenda report and related action items for the City Council to consider and take action whether, or not, to form the "Costa Mesa Housing Authority' pursuant to the California Housing Authorities Law, Health & Safety Code Section 34200, et seq. (""HAL"). As an update regarding State Senator Steinberg's Senate Bill 654 ("SB 654") that was discussed at the January 10 meeting, before the Senate Transportation and Housing Committee, SB 654 was recommended for approval and to become an urgency bill. SB 654 would allow the existing fund balances on deposit in each dissolved redevelopment agency's low to moderate income "Housing Fund" to be transferred to the entity that assumes the housing assets and functions of the former redevelopment agency. If SB 654 passes, then monies in the Agency's Housing Fund could be expended in the Costa Mesa community with decisions made by the City Council and newly formed Costa Mesa Housing Authority. The formation of the Costa Mesa Housing Authority could facilitate in carrying out affordable housing obligations of the City's Housing Element, as well as other goals established by the City Council/Housing Authority Board. If created, a housing authority could be used both to assume the Agency's housing assets and functions pursuant to Section 34176 and on an "as needed" basis without creating new State or Federally -imposed affordable housing obligations. ANALYSIS FISCAL REVIEW At its meeting of January 10, 2012, the Costa Mesa Redevelopment Agency asked staff to present a fiscal overview outlining the impact of the elimination of future tax increment financing as well as the benefits of retaining vs. transferring its housing assets to the Orange County Housing Authority. • Downtown and Low and Moderate Income Administration Total tax increment flowing to the Redevelopment Agency is $4.1 Million annually. Total salaries and benefits budgeted for FY 11-12 were $ 652,620. In preparation for FY12-13, Staff is estimating $428, 865 in budgeted salaries and benefits. With the anticipated administrative fund to the Successor Agency, the total impact to the General Fund could be $300,000. However, this could be further offset by other possible revenue streams received by the Costa Mesa Housing Authority, assuming one is created. Additionally, 12% of the low mod fund is currently spent on administration and the balance is used for housing projects and programs. It is anticipated administration costs would also diminish given the reduction in available funds and the reality that it will take considerably longer to accrue funds for an affordable housing project. However, staff time will still need to be utilized for monitoring of existing projects with the amount dependent upon whether the RDA transfers the housing assets to the Orange County Housing Authority or creates its own Authority as described below. Additionally, even if some of the housing assets are transferred, there are several projects which have multiple funding sources which will require continual compliance monitoring by the City. Staff has begun looking at different options for funding future housing projects as well as programmatic and staffing 2 DOCSOC/1533521v2/022353-0002 reductions based on future available funds to avoid any impact to the General Fund. Staff will return to the City Council at a later date with financial and service delivery options, as well as a funding strategy for housing projects. • Outstanding Housing Projects/Receivables Attachment 7 displays the RDA's housing assets as well as the potential receivable value. The vast majority are long term commitments which are not scheduled to be paid back for several years. However, there are a few projects that are currently making payments that could possibly be utilized to offset the cost of a Housing Authority. For example, Costa Mesa Family Village currently has an annual payment requirement of $108,000. If a local Housing Authority were created and retained the RDA's housing functions, these funds would be available for the Housing Authority to use for future projects and/or housing administration costs. If the RDA's housing assets are transferred to the Orange County Housing Authority (OCHA), the revenue streams associated with them would also go to the Authority, as would the monitoring requirements. However, as stated above, because three of the projects were funded with multiple funding sources, HCD will be required to retain the monitoring responsibilities, even though the asset and any revenue stream will be transferred. • Future Downtown Projects in Planning $4.6 Million in projects that were slated for future RDA funding will now have to compete for funding through the General Fund Capital Improvement Program and will not be affected by the creation of a Housing Authority. They are as follows: 1. Monument Sign at the Costa Mesa Senior Center $ 36,000 2. Historical Society Fencing Improvements $ 80,000 3. Harbor Blvd. Street Improvements $1.1 Million 4. Lions Park Improvements $1.3 Million 5. Cabrillo St. Street Improvements $ 300,000 6. West 19t" St. Street Improvements $ 110,000 7. Terminal Way Improvements $ 200,000 8. Placentia Ave. Median Improvements $1.5 Million Creation of A Housing Authority and Preservation of Costa Mesa Redevelopment Agency Housing Assets As required by and pursuant to State laws and regulations, the City and the Agency previously have carried out the community's affordable housing obligations. The Housing Element provides for how the City will carry out its Regional Housing Needs Assessment (RHNA), a State -imposed housing obligation designed to ensure the City accommodates its proportionate share of the regional housing needs as determined by the State. Unlike community redevelopment project areas that encompass portion(s) of a city or county, the HAL provides that a housing authority is authorized to engage in activities related to development and maintenance of affordable housing "within its area of operation." The HAL defines "area of operation" as the entire city. The HAL empowers the Authority to carry out a broad range of activities, such as acquiring and leasing land, acquiring and rehabilitating existing units, clearing sites for development, financing construction of new or rehabilitated units, constructing public improvements to facilitate housing, owning and operating units, and operating programs and services that promote home ownership and responsible tenancy for persons of low income. Housing authorities are distinguished from former community redevelopment agencies, such as the HAL authorizes housing authorities to provide housing counseling, referrals, and advisory services in conjunction with new or rehabilitated housing projects. The HAL provides flexibility to housing authorities in directly constructing and owning new or rehabilitated housing units (versus former redevelopment agencies that generally did not own or operate affordable housing The Agency's housing assets mentioned above could be transferred under the jurisdiction of the Housing Authority. However, unlike former community redevelopment agencies, there is no designated funding source for housing authorities. Housing authorities generally fund their activities with federal grants and entitlements. There are a number of federal housing and service programs for which an authority may apply; but, creation of an authority does not obligate the authority to apply for any federal or state programs if not well-suited to the City (and Agency's) affordable housing goals. A housing authority can be created and fund its activities with existing funding sources, such as from the Housing Fund (if SB 654 passes) and/or the City's CDBG or HOME Program monies, and be used to further a City's affordable DOCSOC/1533521v2/022353-0002 housing goals. The Costa Mesa Housing Authority would be a distinct legal entity from the City (comparable to the soon to be dissolved Agency) with a separate governing board. The most common governing structure is that the city council serves as the governing board for the housing authority. Typically and as provided in the attached resolutions, the Mayor would serve as Chair and the Mayor Pro Tem as Vice Chair. In addition, the HAL requires that two "resident" board members be appointed by the governing board within two years of formation. A "resident" member is a person who resides in housing owned or controlled by the housing authority. Reporting obligations of housing authorities are generally tied to specific funding sources. Unlike former community redevelopment agencies, there is no blanket obligation to create statements of indebtedness or five-year implementation plans. The goals and objectives of the Costa Mesa Housing Authority could be included in the City's Consolidated Plan that is prepared every five years by the City. Operating expenses are anticipated to be minimal and staffing for the Costa Mesa Housing Authority would be provided with existing staff resources. A cooperation agreement between the City and Authority could be prepared to commit to pay for City staff and facilities used by the Costa Mesa Housing Authority. Based on the assets identified in Attachment 7 as well as the potential to utilize existing housing fund monies, should SB 654 pass, staff is recommending that the City declare the need for and activate the Costa Mesa Housing Authority. ALTERNATIVES CONSIDERED If the City declines the assumption of housing assets and functions and does not initiate the proceedings to form a local housing authority, then the Orange County Housing Authority, as the only the "local housing authority" in the jurisdiction, would assume the duties and as of February 1, 2012, OCHA may enforce affordability covenants and perform related activities pursuant to applicable provisions of the Community Redevelopment Law (Part 1, commencing with Section 33000), including, but not limited to, Section 33418 as provided in Section 34176. The City would remain responsible for monitoring its multi -funded housing projects. CONCLUSION: Staff recommends the City Council declare the need for and activate the Costa Mesa Housing Authority, which would occur with the adoption of the attached City Council resolution making statutory findings, declaring the City Council as commissioners of the Costa Mesa Housing Authority, and appointing the Mayor as interim Chair pursuant to the HAL. If the City Council adopts this first resolution, then staff recommends adoption of the Housing Authority resolutions that would be the first and second resolutions of the newly formed Costa Mesa Housing Authority, which will carry out the initial formation and governance activities including appointing officers, adopting personnel rules, setting annual meeting date, adopting a conflict of interest code, and adopt bylaws. Lastly, the City Council will take action to decline the housing assets and functions of the former Agency and select the Costa Mesa Housing Authority to assume the housing assets and functions of the Agency as of February 1, 2012. Thomas R. Hatch Chief Executive Officer Bobby Young Finance and I.T. Director Muriel Ullman Neighborhood Improvement Manager Alma Penalosa Management Analyst Attachment 1: City Council Resolution -formation Attachment 2: Housing Authority Resolution- formation Attachment 3: Housing Authority Resolution Approving Bylaws Attachment 4: Proposed Costa Mesa Housing Authority Bylaws Attachment 5: City Council Resolution — declining Agency's housing assets and functions Attachment 6: Housing Authority Resolution — accepting Agency's housing assets and functions Attachment 7: Housing Asset Receivables DOCSOC/1533521v2/022353-0002 CITY COUNCIL RESOLUTION NO. 2012 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DECLARING THAT THERE IS A NEED FOR A HOUSING AUTHORITY TO FUNCTION IN THE CITY, DECLARING THAT THE MEMBERS OF THE CITY COUNCIL SHALL BE THE COMMISSIONERS OF THE HOUSING AUTHORITY AND DESIGNATING THE FIRST INTERIM CHAIRMAN OF THE HOUSING AUTHORITY WHEREAS, the Housing Authorities Law is codified in California Health & Safety Code Sections 34200, et seq. ("Law"); and WHEREAS, Section 34240 of the Law provides that in every city, including the City of Costa Mesa ("City"), there is a public body corporate and politic known as the housing authority of the city ("Housing Authority"); and WHEREAS, Section 34240 of the Law additionally provides that the Housing Authority shall not transact business or exercise its power unless the City Council, as the governing body of the City, declares by Resolution that there is a need for a Housing Authority to function in the City; and WHEREAS, Section 34242 of the Law provides for the adoption of a Resolution declaring that there is a need for a Housing Authority to function in the City if the City Council finds either or both that: (1) unsanitary or unsafe inhabited dwelling accommodations exist in the City; or (2) there is a shortage of safe or sanitary dwelling accommodations in the City available to persons of low income at rentals they can afford; and WHEREAS, Section 34290 of the Law provides that the City Council may declare by Resolution that the City Council shall be the Commissioners of the Housing Authority; and WHEREAS, Section 34277 of the Law provides that the Mayor of the City shall designate the interim Chairman of the Housing Authority from among the Housing Authority Commissioners, and thereafter the Housing Authority shall select his/her successor among its commissioners; and NOW, THEREFORE, the City Council of the City of Costa Mesa, California does hereby resolve as follows: Section 1. Findings. The City Council finds that there exist in the City unsanitary and unsafe inhabited dwelling accommodations and a shortage of decent, safe, sanitary and affordable dwelling accommodations in the City that are available to persons of low income. Section 2. Need for Housing Authority. There is a need for a Housing Authority to function in the City, and the Housing Authority hereby is permitted to transact any business and exercise any power inferred thereon by the provisions of the Law. DOCSOCA 533454x2/022353-0002 Section 3. City Councilmembers to Serve as Housing Authority Commissioners. Pursuant to Section 34290 of the Law, the City Council finds that the appointment of the members of the City Council, as the Commissioners of the Housing Authority will serve the public interest and promote the public safety and welfare in an effective manner and, therefore, the members of the City Council are hereby declared to be Commissioners of the Housing Authority and all the rights, powers, duties, privileges and immunities that are adjusted by the Law and such a Housing Authority shall be vested in such Commissioners, except as otherwise provided by the Law. Section 4. Designation of Interim Chairman. The Mayor of the City shall serve as the interim Chairman of the Housing Authority, until a permanent Chairman is selected. PASSED, APPROVED and ADOPTED this 17th day of January 2012 by the following vote: AYES: NOES: ABSTAIN: ABSENT: Mayor City of Costa Mesa ATTEST: City Clerk City of Costa Mesa APPROVED AS TO FORM: City Attorney DOCSOC/ 1533454v2/022353-0002 STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF COSTA MESA the foregoing Resolution No. the City Council held on the thereof: City Clerk of the City of Costa Mesa, do hereby certify that was introduced and adopted at a regular meeting of 17 day of January 2012 by the following vote of the members AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: CITY OF COSTA MESA, a municipal corporation City Clerk DOCSOC/1533454v2/022353-0002 HOUSING AUTHORITY RESOLUTION NO. 2012 -XX A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF COSTA MESA, CALIFORNIA, DESIGNATING OFFICERS OF THE HOUSING AUTHORITY, ADOPTING PERSONNEL RULES AND REGULATIONS AND A CONFLICT OF INTEREST CODE AND PROVIDING FOR THE TIME AND PLACE OF HOLDING REGULAR MEETING OF THE HOUSING AUTHORITY WHEREAS, the City Council adopted Resolution No. 2012 -XX on January 17, 2012 declaring that there is a need for a housing authority to function in the City of Costa Mesa ("City") and declaring that the members of the City Council are the Commissioners of the Housing Authority so formed, all pursuant to the Housing Authorities Law, commencing with California Health & Safety Code Section 34200, et seq. ("HAL"); and WHEREAS, the legal name of the housing authority shall be "Costa Mesa Housing Authority, a public body corporate and politic" ("Housing Authority"); and WHEREAS, Section 34278 of the HAL provides that the Housing Authority may employ such officers, agents, technical experts, and employees as the Housing Authority requires; and WHEREAS, Section 34278 of the HAL further provides that the Housing Authority shall adopt personnel rules and regulations and a conflict of interest code applicable to Housing Authority officers and employees; and WHEREAS, Section 34283 of the HAL provides that the Housing Authority Commissioners shall provide for the time and place of holding their regular meetings. NOW, THEREFORE, the Costa Mesa Housing Authority does hereby resolve as follows: Section 1. Officers of the Housinq Authority. Pursuant to Section 34278 of the HAL, the Housing Authority, subject to the concurrence of the City Council, designates the following City officials to serve as Housing Authority officers on an ex officio basis: City Position Chief Executive Officer Assistant CEO City Attorney City Clerk City Treasurer Housing Authority Position Executive Director Assistant Executive Director Housing Authority General Counsel Housing Authority Secretary Finance Officer Section 2. Personnel Rules and Regulations. Pursuant to Section 34278 of the HAL, the Commissioners of the Housing Authority hereby adopt by reference the personnel system set forth in Chapter II of Article 2 of the City of Costa Mesa Municipal Code, as that Article exists as of the date of this Resolution and as hereafter may be amended from time DOCSOC/1533453v2/022353-0002 to time, as the personnel rules and regulations applying to all employees of the Housing Authority. Section 3. Conflicts of Interest. Pursuant to Section 34278 of the HAL, the Commissioners of the Housing Authority hereby adopt by reference the Conflict of Interest Code set forth in Chapter X of Article 2 the City of Costa Mesa Municipal Code, as that Article exists as of the date of this Resolution and as hereafter may be amended from time to time, as the conflict of interest code and rules are updated or otherwise modified by the City Council, as the procedures affecting conflicts of interest involving the Costa Mesa Housing Authority. Section 4. Meetings. The Housing Authority shall hold not less than one meeting per year, which meeting shall be held on the first Tuesday of the month of December at 6:30 p.m. at the Costa Mesa City Council Chamber located at 77 Fair Drive, Costa Mesa, California, 92626 or at such other place as may be designated by the Housing Authority by Resolution; further, regular meetings of the Housing Authority may be held on the same day and time as regular meetings of the City Council, the first and third Tuesdays of each month. PASSED, APPROVED and ADOPTED this 17th day of January 2012 by the following vote: AYES: NOES: ABSTAIN: ABSENT: Chair Costa Mesa Housing Authority ATTEST: Housing Authority Secretary APPROVED AS TO FORM: Housing Authority Counsel DOCSOC/1533453v2/022353-0002 STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF COSTA MESA I, , Secretary of the Costa Mesa Housing Authority, do hereby certify that the foregoing Resolution No. was introduced and adopted at a regular meeting of the Housing Authority held on the 17th day of January 2012 by the following vote of the members thereof: AYES: MEMBERS: NOES: MEMBERS: ABSENT: MEMBERS: ABSTAIN: MEMBERS: COSTA MESA HOUSING AUTHORITY Housing Authority Secretary DOCSOC/1533453v2/022353-0002 HOUSING AUTHORITY RESOLUTION NO. 2012- A RESOLUTION OF THE COSTA MESA HOUSING AUTHORITY ADOPTING BYLAWS OF THE AUTHORITY WHEREAS, the City Council adopted Resolution No. 2012 -XX on January 17, 2012 declaring that there is a need for a housing authority to function in the City of Costa Mesa ("City") and declaring that the members of the City Council are the Commissioners of the Housing Authority so formed, all pursuant to the Housing Authorities Law, commencing with California Health & Safety Code Section 34200, et seq. ("HAL"); and WHEREAS, the legal name of the housing authority shall be "Costa Mesa Housing Authority, a public body corporate and politic" ("Housing Authority"); WHEREAS, the Housing Authority has caused to be prepared bylaws that are to be the rules and regulations establishing a framework for its operation, administration, meetings, and management of the Housing Authority; and WHEREAS, the Housing Authority desires to approve its bylaws; and WHEREAS, the Housing Authority has considered such bylaws at an open public meeting and provided the public an opportunity to comment on such agenda item and now desires to approve the Costa Mesa Housing Authority Bylaws (January 17, 2012) for the orderly conduct of business of the Housing Authority. NOW THEREFORE BE IT RESOLVED by the Housing Authority as follows: Section 1. The "Bylaws of the Costa Mesa Housing Authority (as of January 17 2012)" (herein "Bylaws") attached hereto as Exhibit A and incorporated herein by this reference as though fully set forth herein are hereby adopted and approved as the official Bylaws of the Costa Mesa Housing Authority. Section 2. The Housing Authority Secretary shall certify to the adoption of this Resolution. APPROVED AND ADOPTED this 17th day of January 2012. COSTA MESA HOUSING AUTHORITY, a public body, corporate and politic Chairperson ATTEST: Housing Authority Secretary DOCSOC/1497316v1/022729-0000 STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF COSTA MESA I, , Secretary of the Costa Mesa Housing Authority, do hereby certify that the foregoing Resolution No. was introduced and adopted at a regular meeting of the Housing Authority held on the day of January 2012 by the following vote of the members thereof: AYES: MEMBERS: NOES: MEMBERS: ABSENT: MEMBERS: ABSTAIN: MEMBERS: COSTA MESA HOUSING AUTHORITY Housing Authority Secretary DOCSOC/1497316v1 /022729-0000 EXHIBIT A BYLAWS (January 17, 2012) [attached] DOCSOC/ 1497316v1/022729-0000 BYLAWS OF THE COSTA MESA HOUSING AUTHORITY (January 17, 2012) Bylaws January 17, 2012 DOCSOC/1533455vl/022353-0002 Section 1. Name. The official name of the housing authority formed pursuant to the California Housing Authorities Law, Health and Safety Code Section 34200, et seq. ("HAL") shall be the "Costa Mesa Housing Authority, a public body corporate and politic" (herein referred to as the "CMHA". The CMHA was formed by City Council Resolution No. adopted on January 17, 2012 pursuant to the HAL, and on January 17, 2012 by Resolution No. the CMHA approved certain initial administrative matters and to carry out certain initial administrative matters, including the appointment of officers as more fully set forth herein. Section 2. CMHA Board Members. The CMHA shall be administered by a governing board whose members shall be the members of the City Council of the City of Costa Mesa ("City Council"), which governing board shall be referred to as the "CMHA Board". The term of office as a member of the CMHA Board shall terminate when such member of the CMHA Board shall cease to be a member of the City Council; and the appointed or elected successor, as applicable thereto, to such member of the City Council shall become a member of the CMHA Board. The CMHA Board shall be chaired by a "Chair." The Chair shall be the Mayor of the City of Costa Mesa unless the CMHA Board elects another of its members to serve as Chair. The Chair shall preside at all meetings of the CMHA. Section 3. Office. The business office of the CMHA shall be at Costa Mesa City Hall, 77 Fair Drive, Costa Mesa, CA 92626, or at such other place as may be designated by the CMHA Board. Section 4. Compensation. Members may receive their actual and necessary expenses, including traveling expenses incurred in the discharge of their duties, but only when authorized by the CMHA Board and if there are unencumbered funds available for such purpose in compliance with and pursuant to applicable laws and regulations. Section 5. Officers. The Officers of the CMHA shall be the Executive Director, Assistant Executive Director, Housing Authority Secretary, Housing Authority Counsel, and Finance Officer. Bylaws January 17, 2012 DOCSOC/I 533455v I /022353-0002 Section 6. Executive Director. The Executive Director of the CMHA shall be the Chief Executive Officer (CEO) of the City of Costa Mesa or such other person as may be appointed by the CMHA Board. The term of office shall be from the date of his or her appointment through the date of the first regular meeting of the CMHA in the next succeeding calendar year; provided that he or she shall serve until a successor has been duly appointed. The Executive Director shall submit such information and recommendations to the CMHA Board as he or she may consider proper concerning the business, policies and affairs of the CMHA. The Executive Director also serves as the chief executive officer of the CMHA and shall be responsible for execution and supervision of the affairs of the CMHA. Except as otherwise authorized by resolution of the CMHA Board, the Executive Director or the Executive Director's authorized designee(s) shall be authorized to sign all contracts, deeds and other instruments executed by the CMHA. Section 7. Assistant Executive Director. The Assistant Executive Director shall be the Assistant CEO of the City of Costa Mesa or such other person as may be appointed by the CMHA Board. The term of office shall be from the date of his or her appointment through the date of the first regular meeting of the CMHA in the next succeeding calendar year; provided that he or she shall serve until a successor has been elected. The Assistant Executive Director shall perform the duties of the Executive Director in the absence or incapacity of the Executive Director. In case of the resignation or death of the Executive Director, the Assistant Executive Director shall perform such duties as are imposed on the Executive Director, until such time as the members shall appoint a new Executive Director. Section 8. Housing Authority Secretary. The Housing Authority Secretary shall be the City Clerk of the City of Costa Mesa or such other person as may be appointed by the CMHA Board. The Housing Authority Secretary shall keep the records of the CMHA, shall act as Housing Authority Secretary at the meetings of the CMHA and record all votes, and shall keep a record of the proceedings of the CMHA in a journal of proceedings to be kept for such purpose, and shall perform all duties incident to the office. Section 9. Housing Authority Counsel. The Housing Authority Counsel shall be appointed by the CMHA Board and shall serve at the pleasure of the CMHA. The initial Housing Authority Counsel is the City Attorney and special counsel may also be retained by 2 Bylaws January 17, 2012 DOCSOC/I 533455v 1/022353-0002 the CMHA. The Housing Authority Counsel shall be responsible for the preparation of all proposed resolutions, laws, rules, contracts, bonds and other legal papers for the CMHA. The Housing Authority Counsel and special counsel(s) shall give advice or opinions in writing to the Chair, Executive Director or other CMHA officers when and if requested to do so. The Housing Authority Counsel or as directed by the CMHA shall attend to all lawsuits or other matters to which the CMHA is a party or in which the CMHA may be legally interested and do such other things pertaining to the Housing Authority Counsel's office as the CMHA may request; provided however, the CMHA may also direct that the City Attorney of the City of Costa Mesa or special counsel otherwise selected to attend to all lawsuits or other matters to which the CMHA is a party or in which the CMHA may be legally interested, as elected by the CMHA. Section 10. Finance Officer. The Finance Officer shall be the Director of Finance of the City of Costa Mesa or such other person or persons as may be appointed by the CMHA Board. The Finance Officer shall have the care and custody of all funds of the CMHA and shall be authorized to cause the deposit of such funds in the name of the CMHA in such bank, banks, or other financial institutions, including without limitation the State of California Treasurer, Local Agency Investment Fund ("LAIF"), as the CMHA may select and pursuant to an investment policy considered and approved by the CMHA. The Finance Officer and Treasury Manager shall keep regular books of account, showing receipts and expenditures, and shall render to the CMHA at each regular meeting, or more often when requested, an account of transactions and the financial conditions of the CMHA. Section 11. Appointment of Officers. The initial appointment of officers occurred pursuant to CMHA Resolution No. on January 17, 2012 and the new appointment or reappointment of officers shall be the first order of business at the first meeting of the CMHA, regular or special, held in each calendar year. Section 12. Authority to Bind CMHA; City of Costa Mesa Council Policies Apply to CMHA. No member, officer, agent or employee of the CMHA, without prior specific or general authority by a vote of the CMHA Board, shall have any power or authority to bind the CMHA by any contract, to pledge its credit, or to render it liable for any purpose in any amount; provided however, the CMHA may authorize the Executive Director 3 Bylaws January 17, 2012 DOCSOC/I 533455v 1/022353-0002 to enter into a contract or contracts as authorized in and consistent with the City's policies, which shall Council policies shall be deemed to apply to the CMHA under these bylaws (herein, "Council Policies"). Section 13. Appointment of Employees and Agents. The CMHA may from time to time request from the City the services of such personnel, counsel or agents, permanent or temporary, as may be necessary to carry out the business and affairs of the CMHA. The CMHA Board may in addition employ temporary professional and technical personnel on such terms and at such rates of compensation as the CMHA may determine, subject to all applicable laws, and provided that adequate sources of funds are identified for the payment of such temporary professional and technical services and subject to the applicable Council Policies. Section 14. Regular Meetings. Regular meetings shall be held in the Council Chambers at City Hall or at such other place as the Chair may designate, on dates and at a time as fixed by Resolution of the CMHA, which as of the date hereof are generally concurrent with meetings of the City Council. If at any time any regular meeting falls on a legal holiday, such regular meeting shall be held on the next business day at the same time unless otherwise scheduled by the CMHA and consistent with meeting dates of the City Council. Pursuant to and in compliance with the Ralph M. Brown Act, Government Code Section 54950, et seq. ("Brown Act"), at least 72 hours before a regular meeting, an agenda containing a brief general description of each item of business to be transacted or discussed shall be posted at a location freely accessible to members of the public; further, such agenda shall specify the time and location of the regular meeting. No action shall be taken on any item not appearing on the posted agenda except as permitted by the Brown Act or other applicable laws and regulations. Section 15. Special Meetings. Subject to and pursuant to the provisions of the Brown Act, a special meeting may be called at any time by the Chair or upon the request of two of the members of the CMHA by delivering written notice to each member and to each person or entity entitled by law to receive such notices. Notices to the CMHA Board shall be sufficient if delivered to the Housing Authority Secretary. Notices to other persons or entities entitled by law to receive notices must be delivered personally or by mail and must 4 Bylaws January 17, 2012 DOCSOC/1533455v 1/022353-0002 be received at least 24 hours before the time of such special meeting as specified in the notice. The call and notice shall specify the time and place of the special meeting and the business to be transacted and shall be posted at least 24 hours prior to the special meeting in a location that is freely accessible to members of the public. No other business shall be considered at such meetings by the CMHA Board. Such written notice may be dispensed with as to any member who at or prior to the time the meeting convenes files with the Housing Authority Secretary a written waiver of notice. Such waiver may be given electronically. Such written notice may also be dispensed with as to any member who is actually present at the time it convenes. Section 16. Closed Sessions. Nothing contained in these bylaws shall be construed to prevent the CMHA Board from holding closed sessions during a regular or special meeting concerning any matter permitted by law to be considered in a closed session subject to and pursuant to the provisions of the Brown Act. Section 17. Public Hearings. All public hearings held by the CMHA Board shall be held during regular or special meetings of the CMHA Board. Section 18. Adjourning Meetings and Continuing Public Hearings to Other Times or Places. The CMHA Board may adjourn any meeting to a time and place specified in the order of adjournment. Less than a quorum may so adjourn from time to time. If all members are absent from any regular meeting or adjourned regular meeting the Housing Authority Secretary may declare the meeting adjourned to a stated time and place and shall cause a written notice of the adjournment to be given in the same manner as provided for special meetings unless such notice is waived as provided for special meetings. A copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the meeting was held within 24 hours after the time of the adjournment. When a regular or adjourned regular meeting is adjourned as provided in this section, the resulting adjourned regular meeting is a regular meeting for all purposes. When an order of adjournment of any meeting fails to state the hour at which the adjourned meeting is to be held, it shall be held at the hour specified for regular meetings. Any public hearing being held, or any hearing noticed or ordered to be held at 5 Bylaws January 17, 2012 DOCSOC/1533455v 1/022353-0002 any meeting may by order or notice of continuance be continued or recontinued to any subsequent meeting in the same manner and to the same extent set forth herein for the adjournment of the meetings; provided, that if the hearing is continued to a time less than 24 hours after the time specified in the order or notice of hearing a copy of the order or notice of continuance shall be posted immediately following the meeting at which the order or declaration of continuance was adopted or made. Section 19. Meetings to be Open and Public. All meetings of CMHA members to take action or to deliberate concerning CMHA business and its conduct shall be open and public and are subject to and shall be held in compliance with the Brown Act. All persons shall be permitted to attend any such meetings except as otherwise provided as permitted by law and these bylaws. Section 20. Quorum. A majority of the members of the CMHA Board shall constitute a quorum for the purpose of conducting its business and exercising its powers and for all other official purposes, except that less than a quorum may adjourn from time to time until a quorum is obtained. Section 21. Order of Business. At the regular meeting of the CMHA, the general order of business shall be consistent with the Council Policies and as of the date hereof the order is a follows: (a) Roll Call (b) Pledge of Allegiance (c) Invocation (d) Closed Session (e) Report of Closed Session (f) Presentations (g) Public Comments (h) Consent Calendar (i) Public Hearings 6 Bylaws January 17, 2012 DOCSOC/1533455v 1/022353-0002 (j) Old Business (k) New Business (1) Items Removed from the Consent Calendar (m) Chair and Committee Reports (n) Staff Reports (o) Member Comments and Actions (p) Adjournment Section 22. Parliamentary Procedure. The rules of parliamentary procedure set forth in Robert's Rules of Order shall govern all meetings of the CMHA, except as otherwise herein provided or as otherwise provided in the Council Policies. Section 23. Amendments to Bylaws. These bylaws may be amended by the CMHA Board at any regular or special meeting by majority vote, provided that the proposed amendment to any particular section is included in the posted notice of such meeting. 7 Bylaws January 17, 2012 DOCSOC/1533455vl/022353-0002 CITY COUNCIL RESOLUTION NO. 2012 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA DECLINING TO ASSUME THE HOUSING ASSETS AND FUNCTIONS OF THE COSTA MESA COMMUNITY REDEVELOPMENT AGENCY AND CONFIRMING THAT THE COSTA MESA HOUSING AUTHORITY WILL ASSUME THE HOUSING ASSETS AND HOUSING FUNCTIONS PREVIOUSLY PERFORMED BY THE AGENCY PURSUANT TO HEALTH & SAFETY CODE SECTION 34176 WHEREAS, the Costa Mesa Redevelopment Agency ("Agency") is a community redevelopment agency organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL") and has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of Costa Mesa ("City"); and WHEREAS, the City of Costa Mesa is a municipal corporation of the State of California ("City"); and WHEREAS, on December 29, 2011, in California Redevelopment Association v. Matosantos, Case No. S194861, the California Supreme Court upheld AB x1 26, which dissolves all of the redevelopment agencies in California, and invalidated AB X1 27 that had allowed redevelopment agencies to remain in existence if the opted in to the "Voluntary Alternative Redevelopment Program" ("Program"); and WHEREAS, previously the City had opted into the Program by ordinance(s) soon after the passage of AB X1 26 and by resolution the City elected to become the Successor Agency of the Agency; and WHEREAS, now that the Program has been invalidated by the Supreme Court, pursuant to Health & Safety Code Section 34176, the City may elect to assume the housing assets and functions previously performed by the Agency or to allow transfer of those assets and functions by the Costa Mesa Housing Authority; WHEREAS, the City declines to assume such housing assets and functions and selects the Costa Mesa Housing Authority to assume all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the former Agency. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Costa Mesa as follows: Section 1. The above recitals are true and correct, are a substantive part of this Resolution, and are adopted as the findings of the City Council. Section 2. Pursuant to Section 34176 of AB X1 26, the City Council hereby declines to assume the housing assets and functions of the Agency and selects the Costa Mesa Housing Authority to assume all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the former Agency. Section 3. The Chief Executive Officer and is hereby authorized and directed to take such other and further actions, and sign such other and further documents, as are necessary and proper in order to implement this Resolution on behalf of the City. Section 4. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED and ADOPTED this 17th day of January 2012 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk City of Costa Mesa APPROVED AS TO FORM: City Attorney Mayor City of Costa Mesa STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF COSTA MESA I, , City Clerk of the City of Costa Mesa, do hereby certify that the foregoing Resolution No. was introduced and adopted at a regular meeting of the City Council held on the 17th day of January 2012 by the following vote of the members thereof: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: CITY OF COSTA MESA, a municipal corporation City Clerk HOUSING AUTHORITY RESOLUTION NO. 2012 -XX A RESOLUTION OF THE COSTA MESA HOUSING AUTHORITY ACCEPTING THE HOUSING ASSETS AND FUNCTIONS OF THE COSTA MESA REDEVELOPMENT AGENCY WHEREAS, the Costa Mesa Redevelopment Agency, City of Costa Mesa, California ("Agency") was formed to execute and implement the Redevelopment Plan for the Costa Mesa Downtown Project, pursuant to the provisions of the California Community Redevelopment Law, Health & Safety Code Section 33000, et seq. ("CRL"); and WHEREAS, on December 29, 2011, in California Redevelopment Association v. Matosantos, Case No. S194861, the California Supreme Court upheld AB X1 26, which dissolves all of the redevelopment agencies in California, and invalidated AB X1 27, which would have allowed redevelopment agencies to remain in existence if they opted in to the "Voluntary Alternative Redevelopment Program" ("Program"); and WHEREAS, the City of Costa Mesa is a municipal corporation of the State of California ("City"); and WHEREAS, the Costa Mesa Housing Authority ("CMHA") is a California housing authority formed and existing pursuant to the Housing Authorities Law, Health and Safety Code §34200, et seq. ("HAL"); and WHEREAS, pursuant to Health and Safety Code Section 34176, the City may elect to assume the housing assets and functions previously performed by the Agency or allow transfer of those assets and functions to the CMHA; and WHEREAS, the City Council declined to assume such housing assets and functions and stated its desire that the CMHA assume all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the former Agency; and WHEREAS, pursuant to Health and Safety Code Section 34176, if the City has declined to retain the responsibility for performing housing functions previously performed by the former Agency, all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the Agency, excluding amounts in the low and moderate income Housing Fund, shall be transferred to the local housing authority; and WHEREAS, the CMHA does hereby accept said responsibility and assets. NOW, THEREFORE, BE IT RESOLVED by the Costa Mesa Housing Authority as follows: 1. CMHA accepts the assets and responsibilities and assumes the housing functions previously performed by the Costa Mesa Agency for Community Development pursuant to Section 34176. 2. The Chief Executive Officer and Executive Director are hereby authorized to take any action necessary to implement this resolution and the transfer of those assets and responsibilities. 3. The CMHA Secretary shall certify to the adoption of this Resolution. PASSED AND ADOPTED by the Costa Mesa Housing Authority at a special meeting this 17th day of January 2012. AYES: NOES: ABSTAIN: ABSENT: Chair Costa Mesa Housing Authority ATTEST: Housing Authority Secretary APPROVED AS TO FORM: Housing Authority Counsel STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF COSTA MESA I, , Secretary of the Costa Mesa Housing Authority, do hereby certify that the foregoing Resolution No. was introduced and adopted at a regular meeting of the Housing Authority held on the 17th day of January 2012 by the following vote of the members thereof: AYES: MEMBERS: NOES: MEMBERS: ABSENT: MEMBERS: ABSTAIN: MEMBERS: COSTA MESA HOUSING AUTHORITY Housing Authority Secretary HOUSING ACCOUNT RECEIVABLES ATTACHMENT 7 Potential Receivable Description Receivable Value Due Date First Time Deferred loans to first time $ 3,768,863 Pre -2007 loans deferred for 10 years; Home Buyer homebuyers for purchase of a 2007+ loans deferred for 30 years. Program home in the City. 6 loans currently in repayment of w15% simple interest. 31 pre -2007 loans will profits. To date, -0- has been paid thru commence payments before 2016 residual receipts payments. 13 (2007+) loans are deferred for 30 years with no payment due until 2037. Single Family Deferred loans to homeowners to $ 142,500 Original loan date: 2009. Rehabilitation make home improvements and fix 3 loans deferred until property is sold, Program code violations. refinanced, etc. wlzero interest. Due date unknown but typically not paid back for many years. Civic Center Barrio 8 unit multi -family rental project. $ 564,699 Loan deferred until 2050 wlzero interest. 707 & 711 W. 18th St Payments are only due during deferment if residual receipts analysis show net profits. To date, $12,493 has been paid thru residual receipts payments. St. John's Manor 36 unit senior rental project. $ 451,553 Loan deferred until 2062 w13% interest. Payments are only due during deferment if residual receipts analysis shows net profits. To date, -0- has been paid thru residual receipts payments. CONTINUED MONITORING REQUIRED Costa Mesa Village 96 unit SRO project -joint $ 500,000 Orig loan date: 1993- Deferred until 2005. w1OCHA and private developer 3% interest. Interest only payments due from 2005 - 2015. Principal and interest payment due from 2015+. Costa Mesa Family Ground lease of 3 parcels for a $ 3,843,251 Orig lease date: 1983 Village 72 unit multi -family rental project. 55 year ground lease until 2038. Annual Rent is greater of 8% of gross receipts or $54,000. Deferred rent is allowed wlinterest rate of up to 7.8% and current balance is $2,439,561. CONTINUED MONITORING REQUIRED Rental Rehabilitation Deferred loans to owners of $ 77,464 Orig loan dates: mid 90's Program multi -family properties to make Deferred until sale, transfer or default. 4% improvements and repair code interest rate. Most have paid off and only 3 violations. loans remain. Habitat for Humanity Underwrote land to Developer for NIA Ong dates: 2004 development of 5 single family Houses to be maintained as affordable in homes in the City. perpetuity. No loan repayment unless default. City maintains enforceable covenants on property. CONTINUED MONITORING REQUIRED $ 9,348,330.00 ITotal Potential Receivables