City of Culver City, California
Agenda Item Report
Meeting Date: _01/09/12 Item Number: A-X
CITY COUNCIL AGENDA ITEM: Adoption of (1) a Resolution Activating the Culver
City Housing Authority and Approving a Cooperation Agreement with the Culver City
Housing Authority and (2) a Resolution Designating the Culver City Housing
Authority to Receive the Transfer of all Housing Assets, Rights, Powers, Duties,
Obligations, Liabilities and Functions Previously Performed by the Culver City
Redevelopment Agency.
Contact Person/Dept.:Tevis Barnes/CDD Phone Number: (310) 253-5782
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification:Agendas and Meetings – City Council (01/06/12
Department Approval:
Sol Blumenfeld: (01/06/12)
City Attorney Approval:
Carol Schwab (by H. Baker) (01/06/12)
Fiscal Impact Approval:
Jeff Muir (by M. Noller) (01/06/12)
City Manager/Executive Director Approval:
John Nachbar (01/06/12)
RECOMMENDATION:
Staff recommendsthat the City Council:
1) Adopt a Resolutionactivating the Culver City Housing Authority in accordance with
the California Housing Authorities Law and making certain determinations and
findings related thereto and approving a Cooperation Agreement with the Culver
City Housing Authority; and
2) Adopt a Resolution designating the Culver City Housing Authority to receive the
transfer of all housing assets, rights, powers, duties, obligations, liabilities and
functions previously performed by the Culver City Redevelopment Agency.
.
BACKGROUND:
On December 29, 2011, the California Supreme Court issued its final opinion in the
redevelopment-related litigation action, California Redevelopment Association et al.
v. Ana Matosantas et al. (“CRA Litigation”). Specifically, the Court upheld as
constitutional Assembly Bill 1X 26 (“AB 26”), the legislation that freezes
redevelopment activities and dissolves community redevelopment agencies
throughout the State, and struck down as unconstitutional Assembly Bill 1X 27 (“AB
27”), the legislation that would have allowed cities and counties to continue to
operate their redevelopment agencies by voluntarily making continuation payments
to the State, counties, school districts and other local government bodies. The Court
found that AB 26 was a proper exercise of the legislative power vested in the
Legislature by the California Constitution but found that AB 27 violated Proposition
22 (specifically, Cal. Const. Art. XIII, § 25.5, subd. (a)(7)). This result, unfortunately, City of Culver City, California
Agenda Item Report
was the worst potential outcome of the CRA Litigation for redevelopment and local
agencies.
The Court’s decision to uphold AB 26 and strike down AB 27 will eliminate, upon the
effectiveness of AB 26, the authority that local governments have had for 60 years of
utilizing property tax increment revenues and exercising governmental powers
provided in the California Community Redevelopment Law to address blighting
conditions, facilitate economic revitalization and expand affordable housing within
their communities. Under this ruling, and when AB 26 is effective, redevelopment
agencies will be dissolved and successor agencies and oversight boards will
oversee the winding down of each agency’s affairs and the liquidation of each
agency’s non-housing assets for distribution to counties, school districts and other
local public agencies.
Under AB 26, the city, county, or city and county that authorized the creation of a
redevelopment agency may elect to retain the housing assets and functions
previously performed by its redevelopment agency or may select the city’s housing
authority to hold those assets and perform housing functions. If the City of Culver
City does not elect to retain the housing assets and functions previously performed
by the Culver City Redevelopment Agency (the “Agency”), and if there is no City
housing authority, those assets and functions would be transferred to the Los
Angeles County Housing Authority.
To assure that Culver City’s housing assets and functions remain under local
control, staff recommends that the City Council activate the Culver City Housing
Authority and designate the Housing Authority as the entity that will receive the
housing assets and perform the housing functions of the Agency, subject to an
express reservation of rights, as applicable. Staff further recommends that, upon its
formation, the Housing Authority accept the transfer of the Agency’s housing assets
to the Housing Authority as authorized under AB 26. This will provide the City,
through the Culver City Housing Authority, with the legal authority to continue
monitoring ongoing rent and income compliance at affordable housing developments
and partner with developers to construct and operate affordable housing in Culver
City. If the City Council approves the activation of the Culver City Housing Authority,
the Housing Authority should convene its noticed meeting to consider acceptance of
the transfer of the Agency’s assets and functions.
DISCUSSION:
California Health and Safety Code (H&SC) Section 34240, et seq (“Housing
Authorities Law”), stipulates that every county and city in California has a dormant
public body identified as a housing authority. A county or city may, by resolution,
declare that there is a need for that housing authority to function to ensure the
provision of safe and sanitary housing for persons of low income. In light of the
California Supreme Court’s ruling upholding AB 26 and invalidating AB 27, it is in the City of Culver City, California
Agenda Item Report
City’s best interest to declare the need for and establish the Culver City Housing
Authority to help assure the protection and use of housing funds for the residents of
Culver City.
In order to establish a housing authority, the City must find that either unsanitary or
unsafe dwelling units exist within the City or that there is a shortage of safe or
sanitary dwellings for persons of low income at affordable rents within the City. The
unmet demand for affordable safe and sanitary housing units is exemplified by the
City’s experience with two programs currently administered by the City’s Housing
Division.
The Section 8 Housing Choice Voucher Program:There are currently 762
applicants actively waiting for rental assistance through the Section 8 Housing
Choice Voucher Program. Some applicants have been on the list since 1998, a
waiting period of fourteen (14) years. Once an applicant receives a Section 8
voucher they are given 90 days to locate a unit in Culver City. Due to lack of
available affordable decent, safe and sanitary units, many voucher holders exhaust
the 90-day time period and are forced to seek units outside of Culver City. These
forced relocations can result in the loss of jobs and the removal of children from their
schools.
Rental Assistance Program (RAP): This program assists extremely-low and up to
moderate-income households to subsidize their housing through the Rental
Assistance Program. There are currently 1,062 applicants waiting to receive rental
assistance. Some applicants have been on this waiting list since 1990, a waiting
period of twelve (12) years. The average search time for voucher holders to locate
and lease a unit on this program ranges from 60 days to 90 days.
Low income families, aging population and special needs groups have greater
difficulty in finding decent, affordable housing based on their special circumstances.
According to the 2008-2014 Culver City Housing Element, the rental vacancy rate in
Culver City is 2.1%. Based on the low vacancy rate and the limited number of
affordable rental units available, this shortage of affordable units makes it extremely
difficult for Section 8 and RAP families to utilize their vouchers for rental assistance
in the City.
An additional cause of the shortage of affordable, decent, safe and sanitary housing
units is the lack of housing production. Culver City has not increased the supply of
low and moderate income affordable housing units for low income, special needs
and homeless families in more than 10 years. With the recent approval of the Irving,
Tilden Terrace and Globe housing projects, Culver City will produce affordable
housing units for the first time in over ten years.
The establishment of the Culver City Housing Authority will enable the Authority to
continue the housing functions previously performed by the Culver City City of Culver City, California
Agenda Item Report
Redevelopment Agency and will allow the transfer of those housing functions and
assets under AB 26.
Housing Authorities Law authorizes the City Council to appoint itself as the
commissioners of the Housing Authority. The first chairperson of the Housing
Authority is appointed by the Mayor and successor chairpersons are selected by the
commissioners. If the Housing Authority chooses to own or operate housing
projects, then within one year after taking title to the property, the commissioners
must appoint two tenants of those projects to serve as additional commissioners, at
least one of which shall be at least 62 years of age, if there are tenants of that age.
The terms of Housing Authority Commissioners shall range from one to four years
and may be coterminous with the City Council terms. Commissioners may receive
limited per diem payments and travel expenses only.
To assure proper operations, the newly formed Housing Authority must also formally
adopt a name, the Culver City Housing Authority; designate the initial permanent
chairperson, vice chairperson, and officers of the Housing Authority; establish the
commissioners' terms of office and succession; adopt rules for procedure, personnel
rules and regulations, and a conflict of interest code; and provide for the time and
place to hold regular meetings.
Upon its formation, the Culver City Housing Authority would then be able to approve
and accept the transfer of the housing assets and functions of the Culver City
Redevelopment Agency.
FISCAL ANALYSIS:
The Culver City Housing Division receives approximately $1.9 million from the US
Department of Housing and Urban Development (HUD) for the rental subsidies and
administration of the Section 8 Housing Choice Voucher Program. As of June 30,
2011, the cash balance of Housing Set Aside funds held by the Agency was
approximately $3 million. Additionally, the Housing Fund is currently owed
approximately $45.4 million by the Redevelopment Agency to repay ERAF/SERAF
payments ($10.5 million payable by June 2015) and repayment of housing set aside
funds that were deferred between 1985 and 1996 ($34.9 million to be repaid in
future years). These amounts are enforceable obligations of the Agency and will be
repaid to the Housing Authority by the Successor Agency per the enforceable
obligations payment schedule. Upon approval of the City Council, the cash and
assets held by the low moderate income housing fund (fund 554) will transfer to the
Culver City Housing Authority.
The costs associated with the administration of the Culver City Housing Authority is
estimated at $1,316,500. Should the City Council activate the Housing Authority, the
Authority accept the transfer of assets, and the Redevelopment Agency be dissolved City of Culver City, California
Agenda Item Report
effective February 1, 2012, then staff will prepare a budget for consideration by the
Housing Authority Board.
ATTACHMENTS:
1. Proposed Resolution activating the Culver City Housing Authority in accordance
with the California Housing Authorities Law and making certain determinations
and findings related thereto and approving a Cooperation Agreement with the
Culver City Housing Authority.
2. Proposed Resolutiondesignating the Culver City Housing Authority to receive the
transfer of all housing assets, rights, powers, duties, obligations, liabilities and
functions previously performed by the Culver City Redevelopment Agency.
MOTION:
That the City Council:
1) Adopt a Resolution activating the Culver City Housing Authority in
accordance with the California Housing Authorities Law and making certain
determinations and findings related thereto and approving a Cooperation
Agreement with the Culver City Housing Authority;
AND
2) Adopt a Resolution designating the Culver City Housing Authority to receive
the transfer of all housing assets, rights, powers, duties, obligations, liabilities
and functions previously performed by the Culver City Redevelopment
Agency.
AND
3) Authorize the City Manager and Chief Financial Officer to create additional
Special Revenue Funds, as appropriate, and administratively transfer
appropriations between funds as needed to carry out this action.
MEETING DATE: 01.09.12
AGENDA ITEM: CITY COUNCIL AGENDA ITEM: Adoption of (1) a
Resolution Activating the Culver City Housing Authority and
Approving a Cooperation Agreement with the Culver City
Housing Authority and (2) a Resolution Designating the
Culver City Housing Authority to Receive the Transfer of all
Housing Assets, Rights, Powers, Duties, Obligations,
Liabilities and Functions Previously Performed by the Culver
City Redevelopment Agency.
ATTACHMENTS
Pages
1. Proposed Resolution activating the Culver City 1-4
Housing Authority in accordance with the
California Housing Authorities Law and making
certain determinations and findings related thereto
and approving a Cooperation Agreement with the
Culver City Housing Authority.
2. Proposed Resolution designating the Culver City 5-7
Housing Authority to receive the transfer of all
housing assets, rights, powers, duties, obligations,
liabilities and functions previously performed
by the Culver City Redevelopment Agency. ATTACHMENT 1
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4ATTACHMENT 2
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