STAFF REPORT
DATE: February 28, 2023
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director VIA: Simone McFarland, Assistant Community Development Director BY: Maribel Leyland, Housing Authority Manager
SUBJECT: Consideration of the Burbank-Glendale-Pasadena Regional Housing Trust Joint Exercise of Powers Agreement and Appointment of a City Council Member to the Board of Directors
RECOMMENDATION
Approve the Burbank -Glendale-Pasadena Regional Housing Trust Joint Exercise of Powers Agreement (JPA) and Appoint a City Council Member to serve on the Board of Directors for a two-year term.
BACKGROUND
In February 2022, staff presented a proposal to the City Council for the formation of the Burbank-Glendale-Pasadena Regional Housing Trust (BGPRHT); a tool to coordinate and receive funds for the creation of affordable housing in the tri -city area . The key characteristic of a local housing trust is that it can receive revenue to fund trust objectives (in this case fund the creation of affordable housing more fully described later in this report). During the last legislative session, State Senator Anthony Portantino introduced Senate Bill ( SB) 1177 that authorized a Joint Powers Authority between the cities of Burbank, Glendale, and Pasadena. The legislation was approved by Governor Newsom on Aug ust 22, 2022, and became effective January 1, 202 3. In addition, a budget appropriation of $23 million was approved in the Governor’s 2022 -2023 budget for the BGPRHT. This report summarizes the approved legislation and the next steps in the formation process.
COMMUNITY
DEVELOPMENT
2 DISCUSSION
SB 1177 authorized the formation of the BGPRHT, and s pecifically, the bill allows the three cities to enter into a JPA to create and operate a joint powers agency to fund housing to assist the homeless population and persons and families of extremely -low, very-low, low, and moderate- income, within the tri-city area . The legislation includes annual financial reporting and auditing requirements that maximize transparency and public information related to the receipt and use of funds by the BGPRHT (Attachment 1).
JOINT POWERS AGREEMENT AND BYLAWS
As authorized by the legislation, a JPA and Bylaws1 for the BGPRHT have been developed by the three participating cities (Attachment 2) for City Council approval. The documents contain the specific legal parameters of the BGPRHT as outlined in the legislation. The specifics on goals, objectives , and the financing of affordable housing are yet to be negotiated. These specifics will be outlined in a future operations agreement discussed later in this report.
The JPA establishes the BGPRHT per State law under the following categories:
1. Creation and Purpose
2. Term of the BGPRHT
3. Powers and Duties
4. Members
5. Board of Directors
6. Additional Officers and Employees
7. Financial Provisions
8. Amendment Procedures
9. Non-Liability for Obligation Provisions
10. Withdrawal of Parties Provisions
11. Notices and Miscellaneous Provisions
Once established, the BGPRHT can be terminated by agreement of all parties, subject to the retirement of all outstanding loans and bonds. If terminated, the assets of the BGPRHT would be distributed to the members in proportion to contributions. In addition to funding and financing affordable housing, the BGPRHT has the ability to:
1. Enter into contracts
2. Contract and hire staff and consultants
3. Sue and be sued
4. Receive funding
5. Invest funding
6. Apply for letters of credit
7. Incur debt
8. Employ legal counsel and other professional services
9. Enforce affordable housing covenants
10. Rent space
11. Acquire, hold, or dispose of property
1 Bylaws are a set of rules or regulations adopted by an organization for internal management. In this case the management of the BGPRHT.
3 Also included in Attachment 2 are the draft B ylaws that would be adopted as presented and/or amended by the BGPRHT by motion at the first meeting of the Board ; tentatively scheduled for March 2023.
BGPRHT BOARD APPOINTMENT
Staff requests that Council appoint a Council Member to the BGPRHT Board. The legislation provides the following information regarding the Board of Directors:
1. Requires the Board of Directors to consist of a minimum of three directors who are elected officials representing the cities involved in the JPA.
2. Requires the Board of Directors to consist of members equally appointed by each of the three representative cities.
3. Specifies that the Board of D irectors elect a C hairperson and V ice Chairperson from among its members at the first meeting held in each calendar year.
4. Provides that the members of the Board of Directors serve without compensation.
5. Authorizes the BGPRHT to reimburse Board of Directors for pre-approved actual expenses.
6. Requires one (1) member of the Board of Directors to serve a term of two years.
7. States that if a vacancy occurs on the Board of Directors, an individual shall fill the vacancy as outlined in the JPA, and provides that an appointment to fill a vacancy shall be effective only for the remainder of the term of the office that became vacated.
The City of Glendale is scheduled to make their appointment to the Board of Directors in March 2023; the City of Pasadena has appointed Mayor Victor Gordo to the Board.
OPERATIONS AGREEMENT
Once the BGPRHT Board is in place and they adopt B ylaws, the next step will be to develop an Operations Agreement to flesh out and formalize the activities of the BGPRHT as outlined in the legislation:
1. Fund the planning, acquisition, and construction of housing of all types and tenures for the homeless population and persons and families of extremely-low, very-low, low, and moderate income, including but not limited to permanent supportive housing.
2. Receive public and private financing and funds.
3. Authorize and issue bonds, certificates of participation, or any other debt instrument repayable from funds and financing received and pledged by the BGPRHT.
There are several areas to be negotiated in an Operations Agreement including, but not limited to : 1) fair share of f unds to each city; 2) criteria for d istributing funds; and 3) program management and staffing. Staff from all three cities recommend utilizing a consultant to assist with the development of an Operations Agreement to ensure an equitable agreement for all parties . Furthermore, a consultant could assist wit h the recruitment and selection of BGPRHT staff if that is agreed to in the Operations Agreement. As of the writing of this report, a Request for Proposal (RFP) has been issued 4 for a consultant. Proposals received will be presented to the BGPRHT Board for review and selection. If the Board agrees to utilize a consultant , and makes a selection, the consultant will be funded through the initial funding allocation to the BGPRHT.
NEXT STEPS
Once all members are appointed to the BGPRHT Board, the first meeting will be scheduled by staff. The following is a tentative timeline for the continued formation of the BGPRHT.
Spring 2023: 1) First BGPRHT Board Meeting
2) Appointment of Chairperson and Vice Chairperson
3) Possible selection of a consultant
Summer 2023: Development of the Operations Agreement
Fall 2023: First Round of Projects Funded
Staff will return with updates to the Council throughout the process.
FISCAL IMPACT
The BGPRHT Board appointment and JPA approval have no fiscal impact. Once the BGPRHT Board adopts the Operations Agreement, any fiscal impacts to the city will be analyzed at that time.
ENVIRONMENTAL REVIEW
The recommended actions to approve the JPA and appoint a BGPRHT Board member do not have the potential to cause a significant effect on the environment and has been determined to be categorically exempt from environmental review pursuant to the California Environmental Quality Act (CEQA), State CEQA Guidelines Section 15320 (changes in organization of local agencies). This exemption applies whenever local governmental agencies are organizing and this organization does not change the geographical area in which previously exist ing powers are exercised, and include as an example, the creation of a s ubsidiary organization or consolidation of orga nizations having identical powers. The JPA envisioned falls under both of the exemption examples.
CONCLUSION
SB 1177 authorized the creation of the BGPRHT and was approved by the California State Legislature and Governor Newsom in August 2022. Additionally, an appropriation of $23 million was made in the state budget for the BGPRHT. The legislation allows the three cities to enter into a JPA and develop Bylaws for the Regional Housing Trust. The BGPRHT will be a critical tool to generate funding to the tri-city area for the creation of affordable housing. Once the appointments to the BGPRHT Board are made, the Board will meet and move forward with the creation of the Operations Agreement that will outline all parameters to utilize BGPRHT funds for the development of affordable housing in the tri-city area . Therefore, staff recommends Council approve the JPA and make an appointment to the Board of Directors.
5 ATTACHMENTS
Attachment 1 – SB 1177 Bill Text
Attachment 2 – Burbank-Glendale-Pasadena Regional Housing Trust Joint Exercise of Powers Agreement and Bylaws