HomeMy WebLinkAbout0158.091February 14, 1991
HONORABLE {ITY COUNCIL
Palo Alto t CaliforDia
SAl!TA ClARA COONTY PfORTGAGE REVENUf BONO PRCoGRAM: AOOPTlO~ Of
A COOPERATiVE AGREEHENT FOR PARTICIPATION IN THE COUNTY'S
MQRTGAGE CREO:r CERTIFICATE PROGRAM
Melbers of the CounCil:
Report jn er1ef
The attached resolution autho~izes the (it1 to enter into a Cooperative
Agreement with Sa~ta Clara County to participate fn the Mortgage Credit
Certificate Program for first-time home buy~rs.
Background
The Nortgage Credit Certiffcate (HCC) Program is a feder.l income t •• credit
which allow. an eligible purchaser to tike 20 percent of the annual mortgage
interest payoents as dollar-for-doll.r tax credit against federal personal
fncvme tax. The tax credit is in addit~on to the gS~il deduction of mortgage
interest from gross income which the homeowner can utiliZE for the remaining
80 percent of t~e mortgage interest amount~
Since 1981, the tity of Palo Alto has participated in the HeC program, Which
provjdes fi~anc;al assistance to Qualiffe1 first~time ~ome h~Yfrs. lhe
program has been administered by Santa CJara County through a cooperatfve
agreement with the tity,
In 199~, Palo Alto atte~ted t. obtai. additional funds for the City by
submitting a separite applicitl~n. However, due to the competition for these
funds, the City received a mortgage bond allocation that did not exceed the
amount pre~iou$h reconmended by Sanh Clira Cou"ty. The pro'3rara
continues to be administered by the County.
For 1991, tity staff is recommending that the City be included in the county
appljcation for i mortgage revenue bond allocation of $800,000, which converts
to mortgage credit certificates to be issued in the amount of S200,OOO.
lbirty·five percent Qf the .ortgag! credit certificates will be targeted for
resfdential ynits priced it 80 percent of average area purchase price (AAPP).
and that currently is S172,194_ The r~.i.ing fund •• ay be used for purchase.
up to 9D percent AAPA, .hich is currently S194,394_
CIIR:158:91
ffnancia} COmmitment
Tne California Debt limit Al1oc~tion Comm1ttee~ which Idm1~isters the bond
progrlm for the state. requires that in amount equal to one perc!nt of the
mortgage bond .110c,t'on ($8,OOO) be set is'de is • good f.ith 9",rant •• to
en,ure that the City .'11 imp10Ment the MeC program. Th. perfonnanc. deposit
a., be 13 the fDru of funds that hive bten set aside for other pur~~ses, such
as the Residential Housfng I"~litu Reser~e Fund. Tne req~ir~nt for the
performa.nce deposH is rel ieved IS soon as one ,,*,C is issued within Santa
Clo .. County.
[t is our intention tnat th~ attached deposit certification form will be
completed by the City Man'ger, and that in the highly unlikely ,"ent
disbursement of these funds is required in the future, Count;l will be
informed.
Recomeodjl!t i on
Staff recommends that the City Co"nci1 idopt the ,ttach.d Resolution and
Cooperative Agreement and authorize the Cit1 "anager ta executp the Oeposit
Certified hn.
ih.;lteZ-£ £-dd~4(-~ c
KENNETH R. SCHREIBER ""
Dirtctor cf Planning and
Cornmu~ity f"vironment
Cooperative Agreement between the (ount1 of Santa (lara and
City of P,10 Alt.
Reso1ution of the Council, Cttl of Palo Alto
Deposit Certification
cc: Sylvia Seman, PalQ Alto Housing Corpor.tlon
Tracy Cunnin9~aa, Santa C1ara County Executive Offices
Nap~tali Knol t Housing Bond Coordinator
00:158:91
p: \CIIR\MCC l/14/91
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COOl'l!!<A'fIVlI AGJlEDlZII'f
IIB'l'lr2l!lR 'rlIl! COVlll'H OP .AliTA CLARA
AlII) TBB CITY 0., PALO ALTO
THl'S COOPERATIVE AGREEMENT (the ·Cooperative Agreement .. )
is made and entered into this clay of ~
1991" by and betG'een the COL'"NT'i OF SANTA CLARA , a legal subdivisi:::m
and body corporate and politic of the State of Califor-nia (the
·County-), and the city of Palo Alto, a municipal corporation of
the State of California (the ·City·).
• IT» I 8 SIT I:
WHEREAS, the Tax Reform Act of 19B4 established the
Kcrtqaqe credit Certificate Program (hereinafter referred to as
-NCC Program-) as a means of assisting-qualified individuals with
the acquisition of new and existlnq single family housing; and
'Wl:tEREAS... the COUTlty and 'the City have heretofore
determined to engage in an MCC Program pursuant to Chapters 1399 r
Statues of 1985 Section 50197 ... et seq. ~ of the Health and Safet:r~
Code of the state of California (the -Act-) in order to assist
individual hOJ!le purchasers in the City to afford both new and
existing homes within the statutory limit~ ~s provided for in said
Act; and
WHEREAS~ in furtherance of the MCC Proqram, the city
Council has authorized the county to apply to the state of
California Debt Limit Allocation COMmittee (CDLAC} in the name of
the City of Palo Alto for a mortqaqe bond allocation in the amO\L~t
of $800,000 to be traded for authority to issue ,Mortgage Credit
Certificates in the face amount of $200~OOO (based upon the 4:1
trade-in value of bond allocation); and
WHEREAS, the cOQn~y Housing Bond Coordinator is adminis
tering a county-wide MCC Program; and
WHEREAS, the city and the County ~ish to cooperate with
one another pursuant to the Act in the exercise of their powers
under the Act for the purposes of the )fCC Progra;,n; and
WHEREAS, the County will be operating an Mee Program in
the county~ and the City desires that the Program be applicable to
otherwise eliqible real property in the city;
NOW~ THEREFORE, in consideration of the covenants
hereinafter provided, the parties hereto agree as follows:
~~ The words and phrases of this cooperative
Agreement shall, fer all purposes hereof unless otherwise defined
herein, have the meanings assigned to such vords and phrases in the
Act.
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SECTIQN 2, The City represents and _arrants tn the
County that: (i) the City has heretofore adopted a qeneral plar.
tor the city in conformance with the provisions of the Pla~~in9 and
Zoning Law of the state of California (Government Code Sections
65000 et seq.), (ii) said qeneral plan includes a land use element
and. a bousing element as required by Governmer,t Code section 65302 ...
and (iii) the Program complies with said land use element and
housinq element.
SECTION 3 t The county shall continue to staff a
program for the effective administration of the HCC program ~ithin
the qeographical boundaries of the county. The County shall
continue its cooperation with local real estate and lenaing
institutions in order to maintain their rarticipation in securing
applications from eliqible applicants tor review and approval by
county representatives on behalf of the County and the City.
SECTION 4~ Specific duties of the County shall
include ... but not be limited to, the intake: and approval of home
bUyers' MCC applications, the issuance of Mortqaqe credit Certifi
cates... the monitoring of the City's MCC pr-ogralb status... and
preparation of local or State reports req~ired in the performance
of atores~id outies_
SECTION 5. If, during the t.erm of this agreement .. the
City determines tbat it cannot utilize all of the MCC allocation
provided by the CDLAC, the City wi.ll have. the option to assign a
portion of the allocation to the county for redistribution among
the county and other participating cities.
SECTION 6. This agreem~nt may be-terminated by either
party upon 90 days written notice delivered to the other party.
The term cf this agreement shall extend until such termination by
written notice.
SECTION 7 t The city agrees to undertake such further
proceedings or actions as may be necessary to carry out the te~s
and intent of this agreement as expr£ssed in the recitals hereto;
pro~lded, however, that nothing herein shall require the City to
appropriate any funds to the county tor services under this
a9Yeement. FUnds for the administration of the program shall be
deriveCS: by the County from the application teta paid by MCC
applications administered by the county. These fees shall :be
collected and retained by the County in all cases administered by
the COunty including those where the City's MCC allocation is
debited.
SECTION 8. Nothing in this Cooperative Agreement
E.ha.ll prevent the county from entering into one or Blore agreements
with other municipal corporations within the county, if deem~d
necessary and advisable to do so by the County.
SECTION 9, This Cooperative Aqreement may be amended
by one or aore supplemental aqreements executed by the County and
the City at any time.
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SECTION 10. Nothing cont~ined herein shall be
interpre.ted to illlpose a relationsl'l,ip of partners or joint ventUl':'2S
betwe~n the City and the County.
SECTION 11. The County agrees to indemnify., defend l'.nd
hold the City, its officers,. attorneys. employees and aqt:'!nts
harsless against any and all claims, damaqes or causes of action
arising from any act or omission on the part of the county,. its
officers, attorneys., e~ployees and aqents.
IN ~TNESS WHEREOF., the parties hereto have caused this
Cooperative Agreement to be executed and attested by their proper
officers thereunto duly authorized., and their official seals to be
hereto affixed,. all as ot the day and year first above vritten4
ATTEST:
Clerk, Bo3rd of Supervisors
APPROVED J\ S TO FORK AND LEGALIT~:
County Counsel
ATTEST:
City Clerk
APPROVED AS TO FORK:
~W.W4'
senior Asst. city Attorney
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COUNTY OF SANTA CLARA
Chairperson of the Board of
supervisors
CITY OF PALO ALTO
:Mayor
APPROVED:
Assistant City Manager
Director of Planning and
Community Environment
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USOLtI'UOIII aIO.
USOLtlTrOIll OF !'HB oo!llllcn OJ' 'l1III crn OF PALO ALTO
APPlIOVllllG !'HB crn' 8 PARTICIPA'llOIll rill !'HB .AJlTA
CLlUlA OOtIJITY JIIl)RNAGI! CRIIDI'r Cl!RUJ"rCA'I'B PltOGltAI(
WHEREAS, santa Cl~ra County ("County") has initiated a
program to provide financial assistance to qualified first-time
homebuyers throuqh tha issuance of Mortqage credit certificates;
and
WHEREAS, in order for the Mortqaqe Credit certificates to
be used. for the purchase o~ hOllies in Palo Alto, Palo Alto must
enter into a Cooperative Agreement 'With the County stating-that the
Mortgage Credit Certificate program complies with the land use and
hooslnq elements of Palo Alto's Comprehensive Plan; and
WHEREAS, Palo Altc would lik~ to promote affordable home
ownership opportunities within the Coanty, particularly for
h~sebolds at the lower end of the purchasing spectrum;
NOW, THEREFORE, the council of the city of Palo Alto does
bereby RESOLVE as follows:
SECTION 1. The city Council approv~s the attached
Cooper-ative Agreement between the county of Santa Clara and the
City ot palo Alto regarding the Mortqaqe credit Certificate Program
and authorizes the Mayor to $xecute the agreeRent on its behalf.
SECTION 2. The Council agrees that thirty-rive percent of
the Mortgage Credit Certificate aJIIount allocated to the City of
Palo Alto will be targeted for residential units priceQ at eighty
percent of average area purchase price (·~APP~).
SECTIO~. The Council finds that entering into this
agreement is not a project for the purposes of tbe California
Environmental Quality Act.
INTROOOCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTEIITIONS:
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A'I'l'EST:
city Cleric
APi'lIOVED AS TO FORM:
4v., .. ~W. (lAd'
Senior Asst. City Attorney
APPROVED:
Mayor
City Manage!"
Director of Planning ana
Coamunity Enviror~ent
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DEPOSIT CERTIFICATION FORM
FOR AN APPLICATION FOR 1991 ALLOCATION OF PRIVATE ACTIVITY BONDS
Calirorcia Debt Limit Allocatic.D. Committee
91.5 Capitol Mall. Rvom 2&0
P.O. Box 942809
Sac;:nmcntc. CA 94809-000 I
(916) 324-0310
CERTIFICATION OF THE CHIEF ADMINISTRATIVE OFFICER
OF THE (Applicant)
REGARDING AN APPLICATION FOR PRJVA TE ACTIVITY BOND ALLOCATION
10 connec:tioD. with the (ollowing pri"3tc: I~tjvit)' bond apptkation:
APPLICANT:
ISSUER;
AMOUNT: S
PROJECT NAME/PROGRAM TYPE;
Ihe vndersigDcd officer or Ihe (Applicac.t)
heecby c;crtifies as follows: ------------------
1. I, :-_______________ (Name}. am the Chjcf Administt"ltivc: Officer
of the (Applicant).
2. The: (Applicant) has collc:ct¢d aod bas
plaoec:d on deposil 1a aD account in :I [inaociaJ institution, $
... hicb equals one: percent of the amoun.t of private actlyjty 7b~o-"-::d".""'1"lo"'<a-:t~io"'n:-:be=in--g--
reCj,uestcd.
1. The deposit will be hetd Dotil receipt of I IIr'rittcn Dcti!"ieation Crorn the California
Debt Lim';t Allocatioll C"mmru~e that lh~ deposit is autborized to be released or
forfeiled, in .... hole or in ~art. pursuant to the procedures or the Committee.
4+ To the extent that any portion DC the deposit is forfeited. tne applkant agrees to send
the reQuired amount jn a c.heck madc payabJe to the ·Ce:lifoTo:a Debt Limit Allocatjon
CommiUee .... Such checlt shall be mailed to the Committee at the address noted above
immediately upon neeipl of ch~ wriuc!l notif:k:ation trom the Committe.:.
S. The undersigned has ~~ad: the procedures. of tbe Calif<lraja Debt Limit A!loca[:oc.
Commitlee IDd onderstands that if any pouion ot an approved private activity bood
allocatioD is not Bsed lor the purpose Cor which it .. as lranted~ then the corcc:srondin8
portio.D or the performance deposit mL1st be (c;Cdted to Ihe Committee.
Due Signature
Rev. 12/90
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GENERAL INSTRUCTIONS FOR DEPOSIT CERTIFICATION FORM
I. Each applicant tor. pri\latc a=tivity 'boc.\f .Hocation mUSI !ubmi~ C'vidence to the
Commince that jt has OD dcposil in aD accounl in • financial institution, aD amouc.[ equal
10 ODe pc:rcenC of tbe amOQllt of private activit)' bond IlIocatioD beiD, rcques:lcd. The:
Commitlee'. procedures 'provide (or ccrta.ic. ahcrnxt.Lvcs; te.l ... a Jenel' or credil) [" a
deposit in a linanelat iDstl;ution. Please (on.suit tb~ proccilure.s (or inlor.rnalioD
cancerniDI ac:-ceptablc alternatives.
2. Tbe Deposit CertificatioQ Form (see other side) mllsl be filed \ilIjU. the Committee at
Il'le same time the applicatioll is submitted .
.3. The: Committee will authiJrize release t'U-require rorreiture oC Ihe deposit as fOllows:
I. If l1!c Comm;ltce provides no a!location, or al1 amoLlnt lOwer than reQ.uested by the
applicanr.. the Committee ... ill autborjze reiease of a 'prO rata amount or [he deposit so
that only one pereerlt or [he allocation gracled 1s on deposit.;
b. I!' the Ipplicant (or the issuer. if dirrc:-ec.t Irom the a""ljeant) uses only a P<lrtioc.
of the aJloc:atioJl granu:d to i:!lsue bonds (or to eoc.vert too mortgage credit certificate
autbority and 10 issue al least onc morr,aJe credit certific'lte).. the Committee wiU
a:liltbor-ize tbe relea$C ot a pro rail portion or the dcpo'.lit and require torfeit'l:re of the
remainder;
c. Jr the applicant (or the hsuer, if diUerec.c Cram the applicant). doC! not use any of
the allocation to issue bonds (or too convert t.e mortgage ercd.it certificate au.thority aDd
issue at least one mortgage credit certificate), tbe cnthe d-eposit will b<" forfeited; and
d. If the applicanr wIthdraws the applicalioa in writlng prior to ~he Committee's
consideratioD or tbe 3pplic.at.tOD, tbe perrorm3nc~ deP*it ;ha[l be automatically rdeued.
4.. The Committee may "'aive the (orfeit"dre of the performance deposit if Jl.Ib!t3nliall),
aU the ailoca.rioa graQted was used (or the purpose (or wh.ich it was graDtc:d or j( the
failure to ilsue bonds {"r to CO'Dvert to mortla,e credit certificate ambodtJ and to issuc
at least one mort,al!t: credit certif:tcale) caD be: ShO .... A 10 be the result o! facrors which
could not have bee9 antidpated and which WelC outside the control of the proposed
issuer. bond: counseL. undcrwriter(s). credit provIder. developer 0[' company, and other
parties to the proposed is.sl!ance..
S. If the applicant (or Iht issuer if dirferent from tbe appBcanr). forfeits ~U or a part of
I deposit pursuant to the procedures CIt tbe Committee, the appiicant shall send tf..c
reqaircd amo:..r:nt to tbe. Commiltee in l check made payable to the California Debt Limit
AUoe.ation Comminee. Amount! rt'':cived will be deposited in the Committee's Fund.
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