HomeMy WebLinkAbout11 - CC-7 - Recognize and Allocate Home Program Inc. - 2/18/2014CITY OF COSTA MESA
COSTA MESA HOUSING AUTHOR/TY
CITY OF COSTA MESA SUCCESSOR
A GENC Y TO THE REDEVELOPMENT
AGENCY
MEETING DATE: FEBRUARY 18, 2014 ITEM NUMBER:
SUBJECT: RECOGNIZE AND ALLOCATE HOME PROGRAM INCOME
DATE: FEBRUARY 6, 2014
FROM: DEVELOPMENT SERVICES DEPARTMENT/HOUSING AND COMMUNITY
DEVELOPMENT
PRESENTATION BY: WILLA BOUWENS-KILLEEN, PRINCIPAL PLANNER
SILVIA KENNERSON, MANAGEMENT ANALYST
FOR FURTHER INFORMATION WILLA BOUWENS-KILLEEN, PRINCIPAL PLANNER
CONTACT: 714. 754.5153 willa.bouwens-killeen@costamesaca.gov
SILVIA KENNERSON, MANAGEMENT ANALYST
714. 754.5023 silvia.kennerson@costamesaca.gov
RECOMMENDATION
1. Recognize $247,050 in HOME program income funds and allocate these funds for
HOME Administration and the HOME Single Family Rehabilitation Program.
2. Authorize the City Chief Executive Officer to appropriate any additional HOME
program income for FY 2013-2014.
3. Approve Budget Adjustment No. 14-025 in the amount of $247,050 to increase
revenue and appropriate HOME program income fund to Housing and Community
Development's operating budget.
BACKGROUND
The City of Costa Mesa is a recipient of HOME Investment Partnerships (HOME) grant
funds from the U.S. Department of Housing and Urban Development (HUD). HOME
funds may be used to develop, expand or preserve housing that is available to low and
moderate -income households. The City has used HOME resources to fund tenant -based
rental assistance (TBR), acquire/rehabilitate rental housing, and for owner -occupied
housing rehabilitation. Ten percent of HOME funds may be used for program
administration. The City is required to commit HOME funds within 24 months from the
receipt of funds, and must spend funds within 60 months.
ANALYSIS
In addition to its annual allocation of HOME funds by HUD, HCD also receives income
when prior funded housing rehabilitation loans are repaid. Program income may be used
for any HOME eligible activity. The City is also allowed to keep up to 10% of program
income funds for HOME administration expenditures. Based on Finance Department
records, the City has $247,050 in program income on hand. HUD requires these funds be
spent prior to the commitment/expenditure of regular HOME funds. While this income is
of great value to the City, as the City spends program income, the commitment of regular
HOME funds is delayed. A delay in committing funds can result in the recapture of
HOME funds for failing to meet the 24 month commitment deadline.
In recent years, HOME allocations have steadily been reduced. The most significant
reduction was in 2012 when the City's grant was reduced over 50%. During this time
period, the City's Community Development Block Grant (CDBG) was also reduced and
the City's Redevelopment Agency was dissolved by the State. In response, HCD staff
was reduced to two full-time management analysts and a part-time consultant.
At the time HCD prepared the FY 2013-2014 Action Plan/Budget, HOME program
income was not recognized as revenue. Staff is requesting Council recognize and
allocate HOME program income funds. This action is required in order to ensure
upcoming HOME program expenditures can be drawn against program income funds as
required by HUD. As part of this action, HCD staff is requesting that the Council allocate
10% of program income for HOME administration ($20,800). These funds would be
allocated as follows:
Part-time Intern (20 hours/week) *
$ 4,800
Consulting Services (Keyser Marston
$10,000
Associates
Legal Services (Stradling, Yocca, Carlson
$ 6,000
and Rauth
Of the remaining program income funds ($226,250), staff recommends the allocation of
funds to be used for single-family housing rehabilitation loans and grants.
HOME Single Family Rehabilitation Program $226,250
Due to a shortage in staff and additional duties and responsibilities assumed by both
management analysts, HCD is proposing hiring a part-time intern to assist HCD staff to
qualify homeowners, community outreach, dissemination of documents, research, etc. for
housing rehabilitation loans and grants in order to spend down program income funds.
Additional housing financial consulting and legal services are needed to assist staff with
housing issues such as the annual financial analysis of completed affordable housing
units, and analysis of potential supportive housing programs.
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Additionally, staff is requesting Council provide authority to the City Chief Executive
Officer to appropriate any additional HOME program income funds for the remainder of
FY 2013-2014.
ALTERNATIVES CONSIDERED
Council may choose not to recognize and allocate HOME program income funds;
however, if this is the case, the funds will most likely be returned to the U.S. Treasury.
FISCAL IMPACT
The City has $247,050 in program income from repayment of housing rehabilitation loans
to allocate for the HOME Single Family Rehabilitation Program, consulting costs, legal
costs, and a part-time intern. The General Fund will not be impacted. The attached
budget adjustment will recognize these funds and make them available for program use.
LEGAL IMPACT
There is no adverse legal impact anticipated by the Council's taking the recommended
action(s), based upon the documents and information provided to this office.
CONCLUSION
Staff recommends recognition and allocation of HOME program income funds as detailed
in this report.
GARY ARMSTRONG
Economic and Development Services
Director
STEPHEN DUNIVENT
Interim Finance Director
WILLA BOUWENS-KILLEEN
Principal Planner
SILVIA KENNERSON
Management Analyst
Attachments: Attachment A — Budget Adjustment
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