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HomeMy WebLinkAbout2004-07-12 City Council (4)TO: FROM: City of Palo Alto ....................................................................................... CitY Manag Re ort HONORABLE CITY COUNCIL 12 CITY MANAGER DEPARTMENT: PLANNING & COMMUNITY ENVIRONMENT DATE:JULY 12, 2004 CMR: 349:04 SUBJECT:APPROVAL OF CONTRIBUTION TO THE HOUSING TRUST OF SANTA CLARA COUNTY IN THE AMOUNT OF $150,000 FROM THE RESIDENTIAL HOUSING IN-LIEU FUND RECOMMENDATION Staff recommends that Council: 1..Pledge a contribution to the Housing Trust of Santa Clara County in the " amount of $150,000 to be funded from the Residential Housing In-Lieu Fund; $100,000 to be expended in FY04/05, $50,000 to be expended in FY05/06. o Specify that the City’s contribution shall be used exclusively for qualifying affordable housing projects located within the City of Palo Alto; Authorize the City Manager to amend the existing Agreement with the Housing Trust to reflect the additional contribution. BACKGROUND The Housing Trust of Santa Clara County (HTSCC) was created in 2000 to provide additional financial resources to address the County’s affordable housing deficit. The Housing Trust’s initial targeted funding endowment of $20 million was met in two years and included contributions from public jurisdictions in the County, major employers and private foundations. The City Council approved a contribution of $500,000 to the Santa Clara Housing Trust Fund Endowment on October 23, 2000 from the City’s Residential Housing In-Lieu Fund, with the provision that the City’s fund be used exclusively for qualifying affordable housing projects located within the City of Palo Alto. On May 7, 2001, the City CMR 349:04 Page 1 entered into an agreement with HTSCC for the $500,000 contribution to the Trust Fund Endowment. Since it began distributing funds in 2000, the Trust has assisted more than 1,000 families in buying their first homes, enabled the development of hundreds of units of affordable rental housing and helped create hundreds of units of shelter and special-needs housing. DISCUSSION The HTSCC is currently undertaking a campaign to increase resources to enable further funding for various affordable housing projects throughout the County. Several other cities in the County have already made contributions to this current campaign, including Mountain View ($100,000), Sunnyvale ($500,000) and Santa Clara ($250,000). Participating in the Housing Trust has increased the available housing funding for Palo Alto projects over the past three years. Since the execution of the Agreement with the City, the HTSCC has loaned $1,050,000 for two Palo Alto projects: $400,000 for the Oak Court Apartments (53 units), leveraging $20.1 million; and $650,000 for the Opportunity Center (89 units), leveraging $20.7 million. The additional commitment by the City for $150,000 over a two-year period should enable future housing projects in Palo Alto to continue the successful leveraging of funding exemplified by the Oak Court and Opportunity Center projects. The FY04/05 budget approved by Council includes the allocation of $100,000 to the HTSCC for this year’s contribution. Since the City has already entered into an agreement with the HTSCC and the terms for the use of the funds are unchanged, the existing Agreement needs only to be amended to reflect the additional contribution. RESOURCE IMPACT The contribution of $150,000 will reduce the Residential Housing In-Lieu Fund to approximately $1.65 million from its available unrestricted current balance of approximately $1.8 million. POLICY IMPLICATIONS The recommendation is consistent with Palo Alto Comprehensive Plan policies that encourage housing opportunities and housing diversity. This additional contribution furthers Comprehensive Plan policies that support addressing housing needs on a regional basis and working with outside agencies and other jurisdictions to develop and implement housing programs. CMR 349:04 Page 2 ENVIRONMENTAL REVIEW This action is not considered a project subject to the California Environmental Quality Act since it would not cause a physical change in the environment. ATTACHMENTS Attachment A:Agreement between the Housing Trust and the City of Palo Alto PREPARED BY: DEPARTMENT HEAD:1 Director of Planning and Community Environment CITY MANAGER APPROVAL: ’ EMILY~flaRRISON Assistant City Manager CMR 349:04 Page 3 ATTACHMENT A BETWEEN CITY OF PALO ALTO HOUSING TRUST OF SANTA CLARA COUNTY, INC. REGARDING A CONTRIBUTION TO THE SANTA CLARA COUNTY HOUSING TRUST FUND ENDOWMENT THIS AGREEMENT is made and entered~ into as of ~ ~ , 2001, by and between THE CITY OF PALO ALTO (City) ’and HC~SING TRUST OF SANTA CLARA COUNTY, INC. .("HTSCC"), a California nonprofit corporation. RECITALS The Housing Trust of Santa Clara County, Inc. Endowment Fund ("Endowment Fund"), an investment pool fund in which private corporations and public agencies participate, has been created by the HTSCC for the purpose of establishing a revolving loan fund and grant-making program to address the issue of affordable, available housing in Santa Clara County. On January 22, 2001 the City Council of the City of Palo Alto adopted Budget Amendment Ordinance No. 4677. The Budget Amendment Ordinance provides for the transfer of Five Hundred Thousand Dollars ($500,000) in Residential Housing In-Lieu Funds to the Endowment Fund. The City’s Housing Reserve Guidelines require that the funds be used to provide assistance in expanding, preserving, or improving the supply of low and moderate housing in the City as defined in the City’s Comprehensive Plan. The City desires to increase, improve, or preserve affordable housing for persons and families of low and moderate income in the City of Palo Alto, by participating in the Endowment Fund as specified in this Agreement. The purpose of this Agreement is to set forth the mutual agreement of the City and the HTSCC regarding the use of the City’s Residential Housing In-Lieu Funds through the 1010427 syn 0090828 Endowment Fund. follows: In view of the above, the parties agree as SECTION i.AUTHORITY AND STATUS OF HTSCC HTSCC represents and warrants that the informat.ion contained in this Agreement is true and accurate to the best of its knowledge, and that it is a duly organized, validly existing nonprofit corporation in good standing under the laws of its place of incorporation; that its signatory to this Agreement is authorized by resolution, bylaws, or constitution of the nonprofit corporation, currently, in full force and effect, .to execute this Agreement on HTSCC’s behalf. SECTION 2.DEPOSIT OF CITY’S RESIDENTIAL HOUSING IN-LIEU FUNDS INTO ENDOWMENT FUND City agrees to deposit the sum of $500,000 into the Endowment Fund within 30 days after the mutual execution and delivery of this Agreement. SECTION 3.USE OF CITY’S RESIDENTIAL HOUSING IN- LIEU FUNDS 3.1 HTSCC agrees that no fees will be charged to City’s Residential Housing In-Lieu Mitigation Funds on deposit in the Endowment Fund for administrative or overhead costs, including but not limited to fundraising expenses. The sole administrative expenses which may be charged to City’s Residential Housing In-Lieu Funds on deposit in the Endowment Fund shall be as sot forth in Section 6. 3.2 The Community Foundation Silicon Valley shall serve as the Endowment Fund’s fiscal agent, and the City’s funds shall be paid directly to’ them. All disbursements of the City’s Residentia! Housing In-Lieu Funds from the Endowment Fund shall be in the form of loans secured by a deed of trust recorded against the property. The HTSCC shall consult, in advance, with the City Manager of Palo Alto, prior to making any loans. The initial disbursement of the funds shall be used only for one or more projects that meet all of the following criteria: 3.2.1 The project must provide rental housing or housing for the homeless. A project to provide home ownership assistance is not eligible. 010427 syn 0090828 2 3.2.2 The project must increase, improve or preserve affordable housing, or housing for the homeless, in the ~City of Palo Alto. 3.2.3 Such housing must be affordable to persons and families of low or very low income households ~s those terms are defined by the Department of Housing and Urban Development as pertains to-the San Jose Metropolitan Statistical Area. 3.2.4 The HTSCC shall use the City’s Residential Houslng In-Lieu Funds to increase, improve or preserve affordable housing for homeless individuals and families and/or affordable rental housing for persons and families of low or very low income households, by methods of providing financial assistance that include, but are not limited to, the methods set forth in California Health and Safety Code Section 33334.2 e), excluding subsections (4) and (8). 3.2.5 Any new or substantially rehabilitated housing that is developed, financed or asslsted, in whole or in part, with the City’s Residential Housing In Lieu Funds shall remain available at affordable housing., costs to persons and familiesof~!ow or very low income households, as the case may be, for the longest feasible time, but not less than thirty (30) years for rental units. The HTSCC ~shall require the recording in the Office .of the County Recorder ~ of covenants or restrictions implementing this Section 3.2.5 for each parcel or unit of real property subject to this Section 3.2.5, which covenants or restrictions shal! run with the land and shall be enforceable against the original owner and successors in interest, by the City or the HTSCC. 3.2.6 There -shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, religion~ national origin, ancestry, gender, marital status, sexual preference, or handicap status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of any such project, or any part thereof, nor shall any recipient of the City’s Residential Housing In-Lieu Funds, or any persQn claiming under or through such person, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of any such project. 010427 syn 0090828 3.2.7 The restrictions of this Section 3.2 shall apply to the initial use of the City’s Residential In-Lieu Housing Funds by the HTSCC. 3.2.8 The HTSCC shall refund to the City any portion of the City Residential Housing In-Lieu Funds that have not been disbursed or contractually committed to be disbursed in accordance with this Section 3.2 by the date that is thirty, six .(36) months after the date of this Agreement. If the City’s Residential Housing In-Lieu Funds are disbursed or Contractually committed to be disbursed in accordance with this Section 3.2 within such 36-month period, the HTSCC shall have no obligation to repay any portion of the City’s Residential Housing In-Lieu Funds to the City. 3.3 Al! disbursements by the HTSCC shall be made afterconsultation with the City Manager of Palo Alto and with the advice and suggestion of the HTSCC Board Of Directors which includes two members of the Santa Clara County Board of Supervisors. The HTSCC shall follow the recommendations regarding disbursements rendered by the Endowment Fund Steering Committee unless to do so would be a violation of law, this Agreement, or the HTSCC’s Articles of Incorporation or Bylaws. SECTION 4.INVESTMENT OF THE FUND The HTSCC shall hold, manage, invest and reinvest the Endowment Fund in accordance with the "reasonably prudent person standard. Provided, inyestment ’of the funds contributed by the City under this Agreement shal! be limited to money-market funds of the type described in Government Code Section 53601 k) (2). SECTION 5.FINANCIAL REPORTS 5.1 The HTSCC shall establish and maintain, in accordance with generally accepted accounting principles, a complete record of all financial transactions related to the Endowment Fund. 5.2 The HTSCC shall provide City with quarterly reports which shall set forth in detail all financial transactions related to -the Endowment Fund. The HTSCC shall also provide City with a copy of its audited report, prepared by independent certified public accountants annually. 010427 syn 0090828 5.3 The HTSCC shall p£ovide City with a written report on the initial expenditure of the City’s Residential Housing In Lieu Funds, including, at a minimum, for each project assisted with City’s Residential Housing In-Lieu Funds, the following information: location and description of t.he assisted project(s); number of units; rent and income restrictions; and term of restrictions. SECTI’ON 6.ADMINISTRATIVE FEES The HTSCC may charge an annual administrative fee equal to one percent (1%). of the fair market value of the Endowment Fund against the Endowment Fund. The HTSCC may also charg9 against the Endowment Fund reasonable bank fees. One-Twelfth (1/12) of the annual fees will be deducted monthly. The HTSCC shall report the fees charged against the Endowment Fund in its quarterly and annual reports. SECTION 7.NOTICES A~y communication or notice which either party is required to send to the other or which either party desires to send to the other, shal! be in writing and shall be .either personally delivered or mailed in the United States mail, postage prepaid, to the respective parties addressed as follows: City:City Manager City of Palo Alto P.O. Box 10250 Palo Alto, CA 94303 HTSCC:Housing Trust of Santa Clara County, Inc. Ill West St. John Street, Suite 710 San Jose, CA 95113 Either party may change its address by sending notice of the new address to the other party pursuant to this Section. SECTION 8.COMPLIANCE WITH ALL LAWS The HTSCC shal! comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments. 010427 syn 0090828 Do SECTION 9.MISCELLANEOUS PROVISIONS The parties agree that this Agreement shall be gmverned and construed in accordance with the laws of the State of California. In the event that suit shall be brought by either party to. this Agreement, the parties agree that venue shall be exclusively vested in the state courts of the County of Santa .Clara, or where otherwise appropriate, exclusively in the United States District Court] Northern District of California, San Jose, California. The headings of the sections and subsections of this Agreement are inserted for convenience only. They do not constitute, a part of this agreement and shall not be used in its construction. The waiver by any. party to this Agreement of a breach of any provision of this Agreement shall not be deemed .a continuing waiver or a waiver of any subsequent breach of that or any other provision of this Agreement. Any and all ~exhibits, which are referred to in this Agreement, are incorporated herein ~by reference and are deemed a part of this Agreement. This Agreement may only be amended by formal written agreement executed by both parties. If a court of competent jurisdiction adjudges any provision of this.Agreement as void or unenforceable, the remaining provisions shall not be affected hereby and shall remain in full force and effect; provided that construction of the agreement without, the invalid or unenforceable provision does not deprive the parties of the benefit of their bargain. // // // // // 010427 syn 0090828 Where this agreement refers to City and no Officer of the.City is named, the City Manager. shall have the authority to act on the City’s behalf. CITY OF PALO ALT( Frank ~nest City Manager HOUSING TRUST OF SANTA CLARA COUNTY, INC. By: o ~~s Block Executive Director APPROVED AS TO FORM: Seni~ Asst. City Attorney APPR( Director of Community Envi nment Taxpayer Identification No. 77-0545135 (Compliance with Corp Code § 313 is required if the entity on whose behalf this contract is signed is a corporation. In the alternative, a certified c~rporate resolution attesting to the signatory authority of the individuals signing in their respective capacities is acc.eptable). 010427 syn 0090828 7 CERTIFICATE OF ACKNOWLEDGMENT (Civil Code 1189) On ~q q , 2001, before me, the undersigned, a Notary Public in and for said County and State, personally appeared I]~~ ~ ]9 LO {~, personally known to me or proved to me on the basis of satisfactory evidence to be the person(U) whose name(y) is/a~e subscribed to the within instrument and acknowledged to me that he/~e/th~y executed the same in his/h~[/tb~ir authorized capacity(i~), and that by his/h~/t~ir s~gnature(~0 on the instrument the person(~), or the entity upon ~behalf of which the person(~ acted, executed the~instrumento WITNESS my hand and official seal. :ure of Public 010427 syn 0090828 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of Califor.nia "~ County of ~ ~ ~J 1~ ~ SS. On ~ ,~ ~1 (:~00/ , before me, Date personally appeared ~} ~"~T Name and Title of Officer (e.g., "Jane Doe, Nota~ Public") ,Name(s) of S~gner(s) [] personally known to me i~eevPrOved to me on the basis of satisfactoryidence to be the person~j0 whose name(~ is/a~ subscribed to the withj, g...instrument and acknowledged to me that~l~/t’l~y executed the same in his/Hh’~r/t~ r/tI~ ir authorized capacity0"~), and that ’By his/h~r/t.h~ signature(~,on the instrument the persor[J~, or the entity ’upon behalf of which the person.0~) acted, executed the instrument, -- Place Notary Seal Above Though the information below is not required by law, it may prove valuable to persons relying on the document WITNESS my hand and official seal. VOPTIONAL and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Title or Type of Document: Document Date:Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer’s Name:,~ ,~.4~ ,.~~ Iq, Individual ~,~ Corporate Officer-- Title(s):Partner- [] Limited [] General []Attorney in Fact []Trustee []Guardian or Conservator []Other: Signer Is Representing: Top of thumb here © 1999 National Notary Association ’ 9350 De Soto Ave., P,O. Box 2402. Chatsworth, CA 91313-2402 ¯ www, nationalnotary.orgProd, No. 5907 Reorder: Call Toll-Free 1-800-976-6827