HomeMy WebLinkAbout12/13/1999, 1 - HOUSING AUTHORITY REQUEST FOR CONDUIT FINANCING council
j agcnaa Report IrN=ba
CITY OF SAN LUIS O B I S P O
FROM: Bill Stader, Director of Finance
SUBJECT: HOUSING AUTHORITY REQUEST FOR CONDUIT FINANCING
CAO RECOMMENDATION
Adopt a resolution approving the issuance of multi-family housing revenue bonds by the Housing
Authority.
DISCUSSION
Overview
As set forth in the attached memorandum (Exhibit A) from the City's bond counsel (Jones Hall),
the Housing Authority is requesting that the City approve their issuance of multi-family housing
revenue bonds (Exhibit B). The Housing Authority will loan the proceeds from this "conduit"
issue (about $16 million) to the DeVaul Ranch Company to assist them in financing the
construction of a 122-unit apartment complex. Of these units, 20% (24) would be set aside for
very-low income residents for the life of the bond issue (30 years).
This will not change the total number of affordable units required in the apartment complex (26)
under the terms of the planned development permit (approved by the Council on November 16,
1999). However, it is likely to change the composition: instead of 13 "low" income and 13
"moderate" income units,there will probably be 24"very-low" and 2 "moderate" income units.
As discussed below, neither the City nor the Housing Authority has any liability for the
repayment of these bonds. The developer is solely responsible for making these payments.
Benefits of the.Proposed Financing
For the Developer. Since the interest income from these bonds will be exempt from state and
federal income taxes, this form of financing will reduce the developer's financing costs, and thus
reduce the overall cost of developing this project.
For the City. This financing will assist the developer in meeting the City's inclusionary housing
requirements. Additionally, this will result in the creation of 24 "very-low" income units, which
is a much more difficult unmet need to fill than low or moderate-income housing. (In fact, the
City's inclusionary housing regulations do not even address "very-low" income housing.) The
following summarizes this project's requirements for low and moderate-income housing from all
269 housing units in the DeVaul project:
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Council Agenda Report—Housing Authority Request for Conduit Financing
Page 2
DeVaul Ranch Inclusio Housin R nirements:All Units
Percent .-
Low-Income Housing 5% 13
Moderate-Income Housing 10% 27
Market-Rate Housing 85% 229
Total 100% 269
As reflected above, 15% of the units will be "affordable," with 5% set aside for low-income
households and 10% for moderate-income households. The following summarizes inclusionary
requirements by housing types:
DeVaul Ranch Inclusio Ho ' R ents-Affordable Units
Apartments Duple Total
Low Income Housing 13 0 13
Moderate Income Housing 13 14 27
Total 26 14 40
As summarized above, the 122-unit apartment development is required to include 13'units for
low-income residents and 13 for moderate-income residents. The following summarizes how
these project-specific requirements relate to the City's general inclusionary housing policies as
well as federal tax-exempt housing bond regulations.
■ City's inclusionary housing policies. Under the City's inclusionary housing regulations,
at least 5% of housing units in expansion areas must be for low-income households; and
10% for moderate-income households. There
are no `very-low" income requirements. As Affordable Housing Definitions
reflected above, the project meets these Very-Low Income 50%or less of
requirements. Households median area
income
■ Federal requirements. Under federal Low-Income Households 80%or less of
median area
regulations for tax-exempt housing bonds, at, income
least 20% of the units must be set aside for
very-low income households for as long as the Moderate-Income 120%or less
Households of median
bonds are outstanding. area income
Under the federal regulations, the developer will be required to set aside 24 of the 122 units for
very-low income housing. It is likely that the developer will want these 24 units to apply to the
City's overall affordability requirement of 26 units in the apartment complex. (The moderate
income housing requirements for the duplex/single family units are unaffected by the bond
issuance).
As set forth in Exhibit C, the City's regulations do not explicitly allow for additional `very-low
and low" income units to meet the "moderate" income requirements. However, Community
Development believes that it is reasonable to include very-low and low-income units in meeting
the moderate-income housing requirement, since this will help us meet an even greater need for
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Council Agenda Report—Housing Authority Request for Conduit Financing
Page 3
very-low and low income housing. In short, this is better for us in achieving our most difficult
affordable housing goals. The following summarizes the likely change in the composition of
affordable apartment units if the Council approves this bond issue:
DeVaul Ranch Indusiqnary Hoydng Requirements:Likely Change in Aparonent Affordable Units
Current Likely Change
Very-Low Income Housing — 24
Low-Income Housing 13 —
Moderate-Income Housing 13 2
Total 26 26
City's Conduit Financing Policy
Under the City's debt financing and management policies (Exhibit D), consideration of a request
for conduit financing is generally a two-step process:
■ First asking the Council if they are interested in considering the request, and establishing
the ground rules for evaluating it.
■ And then returning with the results of this evaluation, and recommending approval of
appropriate financing documents if warranted.
This two-step approach ensures that the issues are clear for both the City and applicant, and that
key policy questions are answered. However, due to timing constraints, the Housing Authority
has requested that these issues be addressed in one meeting on December 13, 1999.
Given the close and ongoing working relationship that the City has with the Housing Authority,
and the clear relationship of this project in meeting the City's adopted housing affordability
goals, we believe a "one-step" process will be adequate
in addressing the City's criteria (see sidebar) for
assisting with conduit financings.
• The City s bond counsel will review
the terms of the financing,and
Compliance with the City's Policy. The City's bond render an opinion that there will be
counsel (Jones Hall) is also the bond counsel for this no liability to the City in issuing the
issue. Their assurance that there will be no liability to bonds on behalf of the applicant
the City in issuing these bonds is provided in Exhibit A. • There is a clearly articulated public
This finding is also stated in the attached resolution. purpose in providing the conduit
financing.
As discussed above, we believe there is a clearly • The applicant is capable of
articulated public purpose in approving the Housing achieving this public purpose.
Authority's conduit financing request, and that they are
capable of achieving this public purpose. Accordingly, since there is no City liability for these
bonds, we believe that the proposed bond issue complies with the City's conduit financing
policy.
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Council Agenda Report—Housing Authority Request for Conduit Financing
Page 4
Developer's Role in the Financing. It should be noted the developer is responsible for actual
construction of the units, and repayment of the bonds; While we have not performed any "due
diligence" on their financial ability to do this, we believe it is likely that they will successfully
develop and.operate these units. In terms of financial capacity to repay these bonds, this is an
issue that will be closely scrutinized by the.underwriter and bondholders. However, as noted in
Jones Hall's memorandum, under the proposed .bond terms, the Federal National Mortgage
Corporation (an agency of the federal government) will guarantee payment of the bonds; and
during construction, repayment will be guaranteed through a.letter of credit issued by Bank of
America. This should result in an"AAA" credit rating (the highest possible).
In summary,while there is always some possibility of default in any conduit bond issue,there are
a number of safeguards planned for this issue. Ultimately, however, the bondholders are
assuming all risks that the bonds will be repaid; and neither the City nor the Housing Authority is
assuming any responsibility for their repayment.
City's Past Experience with Conduit Housing Bonds
The City has approved two"conduit" housing bond issues in the past:
■ 1985. 168-unit development on Southwood Drive (refinanced in 1993).
® 1998. 30-unit development (all "affordable"-for seniors and persons with disabilities) on
Bri'zzolara Street. The Housing Authority is the developer of this project.
There have been no financial difficulties with the 1985 issue. The Brizzolara Street development
is still under construction.
City's Role in this Process
Why are we involved? Under federal laws allowing for the issuance of tax-exempt housing
bonds, the legislative body of a general-purpose government must approve these types of bonds.
This means approval by cities (or counties in the case of unincorporated areas).
The City's approval.of the attached resolution does not.immediately result in the issuance of
bonds. Although the Housing Authority has adopted a "Resolution of Intent" to issue these
bonds, this will be subject to subsequent approval of formal bond documents by the Housing
Authority. However,the City's approval is required before this next step can take-place.
CONCURRENCES
The Department of Community Development concurs with this-recommendation.
FISCAL HVIPACT
The City will not incur any costs—directly or indirectly:.in approving this bond issue.
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Council Agenda Report–Housing Authority Request for Conduit Financing
Page 5
ALTERNATIVES
■ Do not approve the requested financing. Given the clear relationship between the
purpose of this financing and the City's adopted housing goals, this option is not
recommended.
■ Defer consideration of the request. Due to the time requirements for this financing,this
option is not recommended.
SUMMARY
As the Council is aware, there are very few "arrows" in the City's quiver in targeting the
production of affordable housing (let alone housing for very-low and low-income households).
Tax-exempt housing revenue bonds are one of the few "arrows" available to us since they help
make it economically feasible for new developments to meet our inclusionary housing
requirements. While we have limited experience with them in San Luis Obispo, they are widely
used throughout the state and nation in helping to produce affordable housing. Accordingly,
given our inclusionary housing requirements, we can expect to receive additional developer
requests for the use of housing revenue bonds in the future as housing development in expansion
areas goes forward.
This does not mean we should "blanketly" approve these requests—we should continue to
consider the merits of each one on a case-by-case basis in accordance with the criteria set forth in
our conduit financing policy. However, it does mean we should be receptive to these requests.
This will not only help in funding more affordable housing in San Luis Obispo, but it will also
signal to the development community our willingness to take reasonable, commonly-accepted
steps in helping them meet our affordable housing goals.
ATTACENMNT
Resolution approving the issuance of multi-family housing revenue bonds by the Housing
Authority.
EDITS
A. Memorandum from the City's bond counsel on our liability for this project and other
related issues
B. Request from the Housing Authority for the City to approve issuance of these bonds
C. Excerpt from the City's inclusionary housing regulations
D. City's conduit financing policy
_ ... . ..,
H:Housing Authority conduit Financing RequesuDeVaul Ranch/Council Agenda Report
1-5
RESOLUTION NO. (1999 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS
BY THE HOUSING AUTHORITY OF THE CITY OF SAN LUIS OBISPO
WHEREAS, the Housing Authority of the City of San Luis Obispo (the "Housing
Authority') has been asked to issue tax-exempt obligations in a principal amount not to exceed
$13,000,000 (the "Obligations") for the purpose, among other things, of making a loan to
DeVaul Ranch, LLC, a California limited liability company ("Developer"), the proceeds of
which will be used by the Developer to finance (1) the acquisition, construction, rehabilitation
and development of a 122-unit multifamily housing facility located at the Southwest comer of
Los Osos Valley Road and Madonna Road in the City of San Luis Obispo (the "City'), and (2)
the acquisition of vacant real property adjacent thereto(the "Project"); and
WHEREAS, the Housing Authority is authorized by the Health and Safety Code of the
State of California (the "Law") to issue and sell revenue bonds for the purpose of financing the
acquisition, construction, rehabilitation and development of multifamily rental housing facilities
to be occupied in part by low and very low income tenants; and
WHEREAS, neither the Housing Authority nor the City will have any obligation to pay
debt service on the Obligations except from loan repayments made by the Developer; and
WHEREAS, the Obligations will be considered to be "qualified exempt facility bonds"
under Section 142(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and
Section 147(f) of the Code requires that the "applicable elected representative" with respect to
the geographical area in which the Project is to be located hold a public hearing relating to and
approve the issuance of the Obligations; and
WHEREAS, the Council of the City of San Luis Obispo is the applicable elected
representative of the City; and
WHEREAS, a notice of public hearing in a newspaper of general circulation in the City
has been published, to the effect that a public hearing would be held by this City Council
regarding the issuance of the Obligations by the Housing Authority and the nature and location
of the Project; and
WHEREAS, the Council held said public hearing on such date, at which time an
opportunity.was provided to present arguments both for and against the issuance of such
Obligations and the nature and location of the Project.
NOW, THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The above recitals are true and correct.
SECTION 2. The Council hereby approves the issuance of the Obligations by the
Housing Authority. It is the purpose and intent of the Council that this resolution constitutes
1-6
Resolution No. — (1999 Series)
Page 2 _
approval of the Obligations for the puiposes of Section 147(f) of the. Code by the applicable
elected representative of the governmental unit having.jurisdiction over the area in which the
Project is located, in accordance with said Section 147(f).
SECTION 3. Issuance of the Obligations shall be subject to further approval by the
Housing Authority of the documents relating to the.Obligations.
SECTION 4. This Resolutionshall take effect immediately upon.its passage
Upon motion of. -- , seconded by --- - -
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this._._ __ .day of 1999.
Mayor Allen Settle
ATTEST:
Lee Price,City Clerk
APPROVED AS TO FORK
J .J- gense City ttomey
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Exhibit A .
JONEs Hmj-.
A PROFESSIONAL LAW CORPORATION
ATTORNEYS AT LAW
CHARLES F.ADAMS 650 CALIFORNIA STREET
STEPHEN R.f ASAI cGGIO EIGHTEENTH FLOOR
THOMAS A.DOWNEY SAN FRANCISCO,CA 941as
SCOTT R. FERGUSON
ANDREW G HALL,JR TELEPHONE
COURTNEY L JONES (415)391-5780
WuuAM J.ICADI
CHRISTOPHER K LYNCH FACSIMILE
WILLIAM H.MADISON (415)391-5784
STEPHEN G.MFT TITIAN
DAVID J.OSTER
DAVID A.WALTON
KENNETH L JONES,OF COUNSII. HOMEPAGE hap://m .jhhw.mm
dynch 17Thm.c
MEMORANDUM
To: Bill Stader
Director of Finance
City of San Luis Obispo
909 Palm Street
San Luis Obispo,CA 93401
From: Chris Lynch
Date: November 17, 1999
Re: Housing Authority of the City of San Luis Obispo,Multifamily Housing Revenue Bonds,De Vaul
Ranch Apartments
In connection With the proposed issuance of the above-referenced bonds and the public hearing to
be held by the City Council on December 13, 1999,you have asked Jones Hall, as bond counsel to the City,
to address the following issues:
1. The nature of the multifamily housing development to be financed with the proposed
bonds.
2. The benefits to the City of the proposed bond financing.
3. The st acture of the proposed bond financing.
4. The liability of the City and the Housing Authority arising out of their participation in the
proposed financing.
1. The Project
The Housing Authority has been asked to issue tax-exempt bonds for the purpose of making a loan
to DeVaul Ranch,LLC,a California limited liability company. De Vaul Ranch,LLC will use the proceeds of
the loan to finance (1) development of a 122-unit multifamily housing facility located at the Southwest comer
of Los Osos Valley Road and Madonna Road in the City,and (2) acquisition of vacant real property adjacent
to the proposed development(the"Project D.
The Projectwill include 16 efficiency units,56 one-bedroom units and 50 two-bedroom units.
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2. Benefits to the City.
The Housing Authority has agreed to consider issuing bonds to finance the Project in order to
promote low and moderate income occupancy in the City. In connection with issuance of the bonds, De
Vaul Ranch, LLC will agree to set aside 20 percent of the units in the Project for occupancy by `very low
income residents,"ie.,residents with an income equal to or less than 50 percent of area median income.Half
of the units set aside for occupancy by very low income tenants must be rented at an annual rental equal to or
less than 30 percent of 50 percent of area median income. Both of these requirements will last for as long as
the bonds are outstanding. The occupancy restrictions described above exceed the restrictions imposed by
the City under its zoning regulations.
3. Description of the Proposed Bond Financing.
The bonds will be 30-year, fixed-rate conduit revenue bonds payable solely from loan payments
made by De Vaul Ranch,LLC to the Housing Authority. De Vaul Ranch,LLC and the underwriter,Banc of
America Securities LLC, have proposed that the Federal National Mortgage Association ("Fannie Mae')
guarantee payment of debt service on the bonds. As a result of the Fannie Mae guarantee, the bonds will be
rated"AAA",which is the highest possible rating.
In addition, during the period after issuance of the bonds while the Project is being constructed,
De Vaul Ranch, LLC will provide Fannie Mae with a letter of credit from Bank of America. This letter of
credit will eliminate the risk to Fannie Mae,as guarantor of the bonds,that the Project is not built
4. Liability of the City and Housing Authority.
The City. The City's only involvement in the financing will be to hold a public hearing and,
following the public hearing, approve issuance of the bonds. The City's participation is necessary because
federal tax law, as a condition to tax-exemption,requires the City Council (the elected legislative body in the
Housing Authority's jurisdiction) to approve issuance of the bonds. Issuance of the bonds will be subject to
the Housing Authority's subsequent approval of the legal documentation.
The Hounng Authority. Without the Housing Authority's participation as issuer of the bonds, the
bonds could not be tax-exempt However, the Housing Authority will have no moral or legal obligation to
repay the bonds from any source other than (1) loan payments made by De Vaul Ranch, LLC and (2)
payments by Fannie Mae under its guarantee. As part of the bond documentation,De Vaul Ranch,LLC will
agree to indemnify the Housing Authority for all legal expenses and liability arising from the Housing
Authority's participation in the financing.
I hope this letter is responsive to your request Please call me with any comments or questions at
your convenience.
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- Exhibit 6
November 11, 1999
Bill:
I have been told that you indicated you were not aware of the TEFRA hearing needed for
the building of the 122 unit apartment complex that is to be part of the DeVaul Ranch
annexation at 11855 Los Osos Valley Road. I'll take at least partial responsibility for that
oversight.
At their August 19a'meeting the Commissioners of the Housing Authority adopted the
attached resolution No. 757 (1999 Series). My assumption was that the developer's
financing team led by bond counsel would schedule the necessary TEFRA hearing with
you. That obviously didn't happen until very recently. I understand that you and Lee
Price now have a copy of the resolution, which the City is being asked to consider. I also
understand that Jones Hall,the city's bond counsel,has prepared the resolution.
I also have been told you are looking for some details as to the proposal itself as well as
some background information on the development team, etc. So let me make an attempt
at that
The process and development team are very similar to something the City approved back
in 1985,before we were here, and which led to the 168 unit development on Southwood
Drive which we refer to as either Parkwood or Southwood Apartments. Those were built
with the Housing Authority issuing the bonds and the developer in return setting side
20%of the units for use by low income individuals and families using the Housing
Authority's Section 8 Housing Assistance Program. Those units came into management
in late 1986 early 1987 and we have had a successful relationship since that date.
The original commitment to the Housing Authority was for 10 years.However,when
interest rates dropped the developer asked that the city and we assist in the refinancing of
the development. In return the Section 8 commitment would be extended for 25 years to
the year 2018.
A TEFRA hearing for that re-financing was held by the City Council on July 20, 1993
and the City Council adopted Resolution No. 8192 (1993 Series) at that time and the
refinancing was put in place.
The Section 8 commitment on this new development will be for a minimum of 30 years.
My understanding is that the market range of rents on the new units will be from
approximately$675 to$1,150 with bedroom breakdown as follows:
16—Efficiency or 0-bedroom units
56—One bedroom units
50—Two bedroom units
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The developer hopes to begin construction in April or May of next year and the complex
will be managed by Avila Beach Realty Inc. the same people who manage the
Parkwood/Southwood development.
They really need the TEFRA hearing out of the way by January 1 because of the State's
bond cycle schedule so anything you can do to assist in the scheduling would be
appreciated. You may recall that just two years ago we did a similar TEFRA hearing for
our Brizzolara Street development. These are usually very short, not well attended
hearings. They are held simply to put the needed financing vehicle in place, with all the
hostilities behind us. Indeed in this instance the second reading of the ordinance
amending the zoning for this development is scheduled for next Tuesday, November 16.
Item C-4 on the council's agenda.
I do have one comment on bond counsels Notice of Public Hearing and that is written
comments are being directed to the Housing Authority. That's fine with us but I don't
think that's what the City wanted in the past.
If you need any additional information give me a call at 597-5302.
George Moylan
CG SEE P,gr��
141
RESOLUTION NO.757(1999 SERIES)
RESOLUTION OF INTENTION TO REIMBURSE EXPENDITURES
FROM THE PROCEEDS OF TAX-EXAMPT OBLIGATIONS
AND DIRECTING CERTAIN ACTIONS
WHEREAS,the Housing Authoring of the City of San Luis Obispo(the"Authority')
intends to issue tax-exempt obligations(the"Obligations")for the purpose,among other things,
of malting a loan to DeVaul Ranch,LLC,a California limited liability company("DeVauP),or
such limited partnership or limited liability company in which DeVaul acts as general partner or
managing member,respectively,or has an ownership interest,or such other legal entity estab-
lished by DeVaul(the"Developer"),the proceeds of which shall be used by the Developer to
finance the acquisition,construction and development of an 122-unit multifamily housing facility
located at the Southwest comer of Los Osos Valley Road and Madonna Road,San Luis Obispo,
California and the acquisition of vacant real property adjacent thereto(the"Project');and
WHEREAS,the United States Income Tax Regulations section 1.103-18 provides
generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds
are used for reimbursement of expenditures made prior to the date of issuance of such debt
unless certain procedures are followed,among which is a requirement that(with certain
exceptions),prior to the payment of any such expenditure,the issuer must declare an intention to
reimburse such expenditure;and
WHEREAS,it is in the public interest and for the pubic benefit that the Authority
declare its official intent to reimburse the expenditures referenced herein;
NOW,THEREFORE,BE IT RESOLVED that the Housing Authority of the City of
San Luis Obispo DECLARES and ORDERS as follows:
1. The Authority intends to issue the Obligations for the purpose of paying the costs of
financing the acquisition,construction and development of the Project
2. The Authority hereby declares that it reasonably expects that a portion of the proceeds of
the Obligations will be used for reimbursement of expenditures for the acquisition,construction
and development of the Project that are paid before the date of initial execution and delivery of
the Obligations.
3. The maximum amount of proceeds of the Obligations to be used for reimbursement of
expenditures for the acquisition,construction and development of the Project that are paid before
the date of initial execution and delivery of the Obligations is not to exceed$16,000,000.
4. The foregoing declaration is consistent with the budgetary and financial circumstances of
the Authority in that there are no fbn&(other than proceeds of the Obligations)that are reason-
ably expected to be(i)reserved,(ii)allocated or(iii)otherwise set aside,on a long-tom basis,by
or on behalf of the Authority,or any public entity controlled by the Authority,for the cgmndi-
tures for the acquisition and construction of the Project that are expected to be reimbursed from
the proceeds of the Obligations.
5. The Developer sball be responsible for the payment of all present and future costs in
connection with the issuance of the Obligations,including,but not limited to,any fees and
expenses incurred by the Authority in anticipation of the;ro,anM of the Obligations,the cost of
printing,any official statement,rating agency coats,bond counsel fees and expenses,under-
writing discount and costs,trustee fees and expense,and the costs of printing the Obligations.
The payment of the principal,redemption premium,if any,and purcbase price of and interest on
the Obligations shall be solely the responsibility of the Developer. The Obligations shall not
constitute a debt or obligation of the Authority.
6. The appropriate officers or staff of the Authority are hereby authorized,for and in the
name of and on behalf of the Authority,to make an application to the California Debt Limit
Allocation Committee for an allocation of private activity bonds for the financing of the Project
1=12
Resolution No.757
Page 2
7. The adoption of this Resolution shall not obligate(i)the Authority to provide financing
to the Developer for the acquisition,construction and development of the project or to issue the
Obligations for purposes of such financing;or(ii)the Authority,of or any department of the
Authority or the City of San Luis Obispo to approve any application or request for,or take any
other action in connection with,any environmental,General Plan,zoning or any other permit or
other action necessary for the acquisition,construction,development or operation of the Project.
8. This resolution shall take effect immediately upon its adoption.
On motion of Commissioner lemuS seconded by Commissioner
Koss and on the following roll call votes:
AYES:
NOTES;
ABSENT:
the following Resolution was duly adopted and passed this 19th Day of August, 1999.
D�,VID R BOOKER, TAN
SEAL:
ATTENTS:
UPIUMUE I MOYLAX,SECRETARY
Resolution#757
1-13
Exhlbit C
Housing Element
H 2.3.1: New Development •ecr
j �1 Requirements
The City shall require require that new development projects include affordable housing
units, dedicate land for affordable housing, or pay an in-lieu fee to assist in the
development of affordable housing Citywide. (p 14,1.22.10)
Table 1
Affordable Housing Requirements'
cs " Tp hof DCQOp1]1C°II � Ot � : x `s.
to
Build 3% low or 5%
moderate cost Affordable Build 1 ADU.per acre, but
Dwelling Units (ADUs�, not less than 1 ADU per
In City but not less than 1 ADU project; or pay in-lieu fee
per project; or pay in-lieu equal to 2% of building
fee equal to 5% of building valuation.
valuation.' a
,d:: n w, 3S31
�e a "w°• .�8. Yyy '.x �ysy`gv5 ,�;
a Y°"
..._ I iK r ..� x ?fir?. x�tt_. � _. �L'� ....-•.4:"'..
Build 5% low - and 10% uild 1 ADU per acre, but
In moderate - cost ADUs, but t less than 1 ADU per
not less than 1 ADU per
Fapansion project; or pay in-lieu fee roject; or pay in-lieu fee
Area uilding qual to 2% of building
equal to 10% of b
valuation.
valuation.
1 Developer may build affordable housing in the required amounts,pay an
in-lieu fee or dedicate land based on the above formula.
2 Affordable Dwelling Units must meet City affordability criteria listed in
Goal 2.1.1.
3 "Building Value" shall mean the total value of all construction work for
which a permit would be issued, as determined by the Chief Building
Official using the Uniform Building Code.
H-6 peneual plan alcest-clty of sal is Blspo
POUCIES AND OBJECTIVES Rybibi,t D
BUDGET AND FISCAL.POLICIES I
annual average debt service; or 10% of the service. The rate and method of
bond proceeds. apportionment should include a back-up tax
in the event of significant changes from the
5. Value-to-debt ratios. The minimum value- initial development plan,and should include
to-date ratio should generally be 4:1. This procedures for prepayments.
means the value of the property in the
district, with the public improvements, 10. Foreclosure covenants. In managing
should be at least four times the amount of administrative costs, the City will establish
the assessment or special tax debt In mininnumz delinquency amounts per owner,
special circumstances, after conferring and and for the district as a whole,on a case-by-
receiving the concurrence of the City's case basis before initiating foreclosure
financial advisor and bond counsel that a proceedings.
lower value-to-debt ratio is financially
prudent under the circumstances, the City 11. Disclosure to bondholders. In general,each
may consider allowing a value-to-debt ratio property owner who accounts for more than j
of 3:1. Special findings should be made by 10% of the annual debt service or bonded
the Council in this case. indebtedness must provide ongoing
disclosure information annually as
6. Capfralized interest during construdion. described under SEC Rule 15(c}12. f
Decisions to capitalize interest will be made
on case-by-case basis, with the intent that if 12. Disclosure to prospective purchasers. Full
allowed,it should improve the credit quality. disclosure about outstanding balances and
annualpayments should be made by the
of the bonds and reduce borrowing costs,
benefiting both current and future property seller to prospective buyers at the time that
owners the buyer bids on the property. It should not
be deferred to after the buyer has made the
7. Maximum burdmL Annual assessments(or decision to purchase. When appropriate,
special taxes in the case of Mello-Roos or applicants or Property owner may be
similar districts) should generally not required to provide the City with a
exceed 1%of the sales price of the property; disclo
and total property taxes, special assessments
and special taxes payments collected ori the F. Conduit F iandngs
tax roll should generally not exceed 20/a.
1. The City will consider requests for conduit
8. Benefit apportionment Assessments and financing on a case-by-case basis using the
special taxes will be apportioned according following criteria:
to a formula that is clear, understandable,
equitable and reasonably related to the a The City's bond counsel will review the
benefit received by--or burden attributed terms of the financing, and render an
to.--each parcel with respect to its financed opinion that there will be no liability to
improvement Any annual escalation factor the City in issuing the bonds on behalf
should generally not exceed 2%. of the applicant
9. Special tax district adminfstrati L In the b. There is a clearly articulated public
case of Mello-Roos or similar special tax purpose in Providing the conduit
districts, the total maximum annual tax financing•
should not exceed 110% of annual debt J
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B-19
POLICIES AND OBJECTIVES
BUDGET AND FISCAL POLICIES
c. The applicant is capable of achieving a. Fill an authorized regular position-
this public purpose. b. Be assigned to an appropriate
bargaining unit.
2 This means that the review of requests for c. Receive salary and benefits consistent
conduit financing will generally be a two-
step process: first asking the Council if they with labor agreements or other
compensation plans.
are interested in considering the request,and
establishing the groundrules for evaluating 3. To manage the growth of the regular work
it; and then returning with the results of this force and overall staffing costs,the City will
evaluation, and recommending approval of follow these procedures:
appropriate king documents if
warranted. This two-step approach ensures
a. The Council will authorize all regular
that the issues are clear for both the City and positions.
applicant, and that key policy questions are
answered. b. The Human Resources Department will
to address these coordinate and approve the hiring of 211
3. The workscope necessary regular and temporary employees.
issues will vary from request to request,and
will have to be determined on a case-by- c. All requests for additional regular
case basis. Additionally, the City should
positions will include evaluations of:
generally be fully reimbursed for our costs
in evaluating the request; however, this • The necessity, term, and expected
should also be determined on a case by-case
results of the proposed activity.
i basis-
• Staffing and materials costs
HUMAN RESOURCE MANAGEMENT including salary, benefits,
!I equipment, uniforms, clerical
support,and facilities.
A Regular Sta,frIng The ability of private industry to
w� fully appropriate the provide the proposed service.
1. The budget o Additional revenues or cost savings
resources needed for authorized regular .
staffing and will limit programs to the which may be realized. .
regular staffing au&orized
4. Periodically, and prior to any request for
2. Regular employees will be the core work additional regular positions, programs will
force and the preferred means of staffing be evaluated to-determine if they can be
mgoin& year6 round program acdvrtres that accomplished with fewer regular
should be performed by full-time City employees. (See Productivity Review
employees rather than independent Policy)
contractors. The City will strive to provide
competitive compensation . and benefit 5. Staffing and contract service cost ceilmgs
schedules for its authorized regular work win limit total expeaditraes for regular
fame. Each regular employee will: employees, temporary employees, and
mdepandent contractors hired to provide
operating and maintenance services.
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R90