HomeMy WebLinkAboutStaff Report 7135
City of Palo Alto (ID # 7135)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 9/12/2016
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Summary Title: Budget Amendment for 110-130 El Dorado Loan
Title: Approval of a Budget Amendment in the Residential Housing Fund for
the Rehabilitation of 110-130 El Dorado Avenue Consistent With Prior Loan
Approval and Approval of an Exemption Under Section 15301 of the
California Environmental Quality Act Guidelines
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that Council amend the Fiscal Year 2017 Budget Appropriation Ordinance for
the Residential Housing Fund by
a. Increasing the Planning and Community Environment Department appropriation by
$375,000 for the rehabilitation of affordable units located at 110-130 El Dorado Avenue
consistent with a June 2015 loan approval; and,
b. Decreasing the fund balance by $375,000.
Background and Discussion
On June 22, 2015, the City Council approved a $375,000 loan (Attachment A) and an associated
Budget Amendment from the Residential Housing In-Lieu Fund to the Palo Alto Housing
Corporation (PAHC) for the rehabilitation and preservation of affordable units located at 110-
130 El Dorado Avenue (Staff Report 5712 is available on the City’s website at:
http://www.cityofpaloalto.org/civicax/filebank/documents/47797. In exchange for the loan,
PAHC entered into a Regulatory Agreement guaranteeing the long term affordability of the
project. Under the agreement, monies are to be remitted to PAHC against the funds as the
rehabilitation is completed. No General Fund monies are to be used for this affordable housing
activity.
To support the City’s prior commitment, it is necessary to again appropriate $375,000 from the
Residential Housing In-Lieu Fund because the funding for the loan lapsed at the conclusion of
fiscal year 2016 when none of the appropriated money had been spent. Since funding is needed
immediately, staff is requesting a project-specific re-appropriation of the committed funds,
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rather than addressing the issue through the regular budget re-appropriation process. It is
anticipated that the rehabilitation work will be completed by the end of fiscal year 2017.
Resource Impact
There is sufficient fund balance available in the Residential Housing In-Lieu Fund (Fund 233) for
the re-appropriation of $375,000. This loan from the Residential Housing In-lieu Fund was
originally approved by the City Council on June 22, 2015. The appropriation for this loan lapsed
at the conclusion of FY 2016. The terms of the loan include a simple interest at 3% per annum
with payments deferred until the expiration of the loan term of 55 years, with a possible
extension of an additional 44 years, or in the event of a default.
Environmental Review
The work completed under the loan agreement is in the nature of maintenance and
rehabilitation of the existing facility, which is exempt from review under the California
Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15301 (Existing
Facilities).
Attachments:
Attachment A: 110-130 El Dorado Avenue Loan Agreement (PDF)