Honorable Mayor and Members of the City Council. Submitted by: Kathryn Hoover, Secretary, Housing Advisory Commission

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1 Housing Advisory Commission ACTION CALENDAR April 3, 2012 To: From: Honorable Mayor and Members of the City Council Housing Advisory Commission Submitted by: Kathryn Hoover, Secretary, Housing Advisory Commission Subject: Housing Trust Fund Reservations for Savo Island Cooperative Homes and the Berkeley Housing Authority Low Income Public Housing Units RECOMMENDATION Adopt a Resolution that: 1) Approves the following allocations from the Housing Trust Fund (HTF): a) Savo Island Cooperative Homes HOME funds - $135,000; b) Berkeley Housing Authority Public Housing Units General funds - $100,000; and 2) Waives the existing HTF Guidelines in order to approve the above funding reservations. FISCAL IMPACTS OF RECOMMENDATION Approval of these allocations will encumber $135,000 in HOME funding to replace a commitment of $135,000 previously allocated by resolution of the Berkeley Redevelopment Agency (BRA), and $100,000 in HTF General funds to pay for relocation benefits to those tenants of the Berkeley Housing Authority (BHA) who desire to move out of low income public housing units prior to the disposition of the units to the Related Company. The City Manager has two companion items on tonight s agenda for Council consideration. See the City Manager report for more details on the fiscal impacts of those recommendations. CURRENT SITUATION AND ITS EFFECTS On December 13, 2011, the Council approved a second extension of the 2010 HTF Notice of Funding Availability (NOFA) in order to allow the approval of funding reservations through 2012 for projects in the HTF pipeline. These are the first two funding requests being brought to the Council for consideration during this period Milvia Street, Berkeley, CA Tel: (510) TDD: (510) Fax: (510) manager@cityofberkeley.info Website:

2 Housing Trust Fund Reservations for Savo Island Cooperative Homes and the ACTION CALENDAR Berkeley Housing Authority Low Income Public Housing Units April 3, 2012 BACKGROUND Although, the HAC traditionally comes to the Council having reviewed all the HTF projects requesting funding during a fiscal year, the decrease in projected funding along with changing program rules at HUD have made that difficult and, in response, we are adopting an over-the-counter application processing approach. The two requests before the Council tonight are the result of the need to respond to timing needs for both the Savo Island Co-operative Homes and the BHA low income public housing disposition project. The first project the HAC recommends funding is Savo Island. Savo Island previously received predevelopment funding from the BRA on December 8, 2009, which was intended to be rolled over into permanent financing once the financing was approved by HUD. However, the elimination of all redevelopment agencies in California as a result of the 2011 Matosantos case has placed that rollover possibility in jeopardy since all decisions regarding any future changes to the use of those funds will have to be approved by an Oversight Board which includes taxing entities in addition to the City of Berkeley. In order to protect the project s financial stability, at its regularly scheduled meeting of March 1, 2012, the HAC agreed with the staff recommendation to approve the replacement of $135,000 in BRA funding for the Savo Island project with HOME funding but recommended that the City continue to request that the Oversight Board approve the previously allocated funding for HTF projects (M/S/C: Wolfe/Soto-Vigil. Ayes: Casalaina, Soto-Vigil, Sanchez (for Kingeter), Levenson, Wolfe, Tregub, Murphy; Noes: None; Abstentions: None; Absent: Feller). The second project HAC recommends funding is the Berkeley Housing Authority (BHA) Public Housing Disposition Project. The BHA requested $300,000 to cover predevelopment expenses associated with the relocation and disposition of their public housing units to the Related Company prior to applying for tax credit financing for the project. Members of the HAC expressed concern about the amount of consultant fees being charged to the project and to the lack of specificity regarding the use of the funds. At its regularly scheduled meeting of March 1, 2012, the HAC recommended that the Council approve an HTF reservation in the amount of $100,000 for direct relocation benefits to tenants only (M/S/C: Wolfe/Soto-Vigil. Ayes: Casalaina, Soto-Vigil, Sanchez (for Kingeter), Levenson, Wolfe, Tregub, Murphy; Noes: None; Abstentions: None; Absent: Feller). Section V.A.2 of the HTF Guidelines limits predevelopment loans to $50,000 per project and Section VI.A.1 limits total predevelopment assistance to $100,000 per fiscal year. The HAC also recommends that Council waive both of these sections of the HTF Guidelines in order to approve funding these funding requests. RATIONALE FOR RECOMMENDATION The limitations on the use of redevelopment funding the Savo Island project and the need to assist tenants who wish to relocate out of the BHA low income housing project Page 2

3 Housing Trust Fund Reservations for Savo Island Cooperative Homes and the ACTION CALENDAR Berkeley Housing Authority Low Income Public Housing Units April 3, 2012 prior to the commencement the disposition and rehabilitation of the units justify the use of HTF funding for these projects. ALTERNATIVE ACTIONS CONSIDERED None. CITY MANAGER The Interim City Manager agrees with the HAC recommendation for the Savo Island project. See the companion report for the Replacement Loan to Savo Island Cooperative Homes on tonight s agenda. The Interim City Manager does not agree with the HAC recommendation for BHA project. See the companion report for the Predevelopment Loan to the Berkeley Housing Authority on tonight s agenda. CONTACT PERSON Kathryn Hoover, Secretary, Housing Advisory Commission, Vincent Casalaina, Commission Chair Attachments: 1: Resolution Page 3

4 RESOLUTION NO. ##,###-N.S. HOUSING TRUST FUND RESERVATIONS FOR SAVO ISLAND COOPERATIVE HOMES AND THE BERKELEY HOUSING AUTHORITY LOW INCOME PUBLIC HOUSING UNITS WHEREAS, the City Council established a Housing Trust Fund Program (HTF) to assist in the development and expansion of housing affordable to low and moderate income persons who either work or reside within the City of Berkeley, and authorized the City Manager to implement the Program; and WHEREAS, there is a great need for affordable and special needs housing in the City of Berkeley as stated in the General Plan Housing Element and the City of Berkeley s Consolidated Plan; and WHEREAS, the Housing Advisory Committee wished to set up an expedited review process for awarding fund reservations from the HTF to projects in the HTF pipeline established in 2010 ; and WHEREAS, the expedited review process requires the City Council to approve a waiver of the approved HTF program Guidelines in order to approve fund reservations; and WHEREAS, on March 1, 2012, the Housing Advisory Commission received requests to approve an additional $135,000 in HOME funding to the Savo Island Cooperative Homes to replace $135,000 in predevelopment funding approved by the former Berkeley Redevelopment Agency; and WHEREAS, on March 1, 2012, the Housing Advisory Commission received a request to approve $300,000 in HTF General Funds to the Berkeley Housing Authority for predevelopment activities associated with relocation and consultant services needed for the disposition of the BHA s low income public housing units to the Related Company; and WHEREAS, the Housing Advisory Commission members discussed at length the need for funding both requests and voted for full funding for Savo Island and partial funding for the BHA low income housing public housing units project. NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Berkeley that the Council waives Sections V.A.2 and VI.A.1of the Housing Trust Fund Guidelines to allow approval of the following HTF predevelopment reservations: Savo Island Cooperative Homes - $135,000 in HOME funding to replace the existing predevelopment loan of $135,000 from the Berkeley Redevelopment Agency;

5 Berkeley Housing Authority - $100,000 in HTF General Funds for direct relocation payments to existing tenants of the BHA s low income public housing units. BE IT FURTHER RESOLVED, that the Members of the Housing Advisory Committee recommend that the City of Berkeley continue to request that the new Oversight Board for the Successor Agency to the Berkeley Redevelopment Agency approve the funding previously approved by the Berkeley Redevelopment Agency be used for affordable housing within the City of Berkeley. BE IT FURTHER RESOLVED, all HOME funding reservations are conditioned upon the completion of the environmental review process, except as authorized by 24 CFR, Part 58, and that should HOME funds constitute a portion of the funding for any project, a final commitment of HOME funds shall occur only upon the satisfactory completion of the appropriate level of environmental review and also upon the receipt of approval of the request for release of funds and related certification from the U.S. Department of Housing and Urban, when applicable. The funding reservation for any HOME funded project is conditioned upon the City of Berkeley s determination to proceed with, modify, or cancel the project based on the results of subsequent environmental review under the National Environmental Policy Act. BE IT FURTHER RESOLVED, the Interim City Manager, or her designee, is hereby authorized to execute all original or amended documents or agreements necessary to effectuate these actions; a signed copy of said documents, agreements and any amendments will be kept on file in the Office of City Clerk. Page 2

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