Agenda Report
Fullerton City Council
MEETING DATE: September 17, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: SUNAYANA THOMAS, DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT PREPARED BY: ELLIS CHANG, DIRECTOR OF ADMINISTRATIVE SERVICES
TAYLOR SAMUELSON, SENIOR ANALYST
SUBJECT: INTERFUND LOAN BETWEEN HOUSING AUTHORITY AND SB 2 PERMANENT LOCAL HOUSING ALLOCATION FUNDS FOR NORTH SPA YEAR 4 OPERATING COSTS
SUMMARY
City Council consideration of an interfund loan from the Housing Authority Fund (Fund 26) to the SB 2 Permanent Local Housing Allocation (PLHA) Fund (Fund 28) to cover the City $972,987 Year 4 (FY 2022-23) payment for North SPA Navigation Centers operating costs to the City of La Habra.
PROPOSED MOTION:
Approve $972,987 Interfund Loan from Housing Authority Fund (Fund 26) to SB 2 Permanent Local Housing Allocation (PLHA) Fund (Fund 28).
Authorize City Manager to make budget adjustments related to the Interfund Loan.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Direct staff to not pay North SPA Year 4 Operating Costs to the City of La Habra Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
The interfund loan is to enable the City to pay the $972,987 to the North Spa with the intent to have a partial repayment from PLHA Fund once the City has an approved housing element from HCD.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Public Safety.
FISCAL IMPACT
Staff expects HCD to release outstanding calendar year 2021 ($1,177,577) and 2022 ($590,205) PHLA allocations following City Housing Element adoption, enabling the SB2 PHLA Fund to repay the Housing Authority Fund. This fund release depends on the City adopting the City Housing Element. City Council previously approved transferring $399,603.75 from the Housing Authority Fund for a Year 3 cost partial payment, which the City would repay once it receives PHLA funds.
BACKGROUND AND DISCUSSION
The City participates in a multi-agency collaborative known as the North Service Planning Area or North SPA as part of City efforts to address homelessness. This collaborative program facilitates state program funding for the Buena Park and Placentia homeless shelters that serve Fullerton homeless individuals and the broader North Orange County region.
The program requires agencies pay annual operation dues based on their share of operational costs. Fullerton, as one of the larger participating agencies, carries a moderately-sized financing responsibility for the program. The City has outstanding program operating costs set for funding through deferred grants from CA Housing and Community Development (HCD). The City will not receive these grants until the City certifies its Housing Element. Many state grant programs, including the SB2 PLHA program, require agencies to certify housing law compliance, including adopting a Housing Element. The outstanding Fullerton funding includes grants for two calendar years. The first outstanding amount equals $1,177,577 and the second amount equals $590,205, totaling approximately $1.7 million. Both grant amounts remain on hold until the City adopts a Housing Element with a February 28, 2025 compliance cutoff date. Staff anticipates receiving funds with an adopted element, given the stipulated judgement pertaining to Housing Element adoption.
The City Housing Authority may provide an interfund loan to cover outstanding invoice costs in the interim. The Fullerton Housing Authority supports housing opportunities for community members by facilitating housing loans, advancing housing support programs and preventing displacement. The Housing Authority funds housing staff as well as homeless case manager outreach efforts. California Health and Safety Code Section 34312(4)(e) designates power to the Authority to provide counseling, referral and advisory services to low or moderate income persons and families to purchase, rent, occupy, maintain or repair housing. The North SPA services have a nexus to housing occupancy through shelter programs and provide referral and support services to displaced persons. Staff anticipates the Housing Authority will receive an interfund loan reimbursement within the subsequent Fiscal Year ensuring no material impact on housing division operations. cc: City Manager Eric J. Levitt
Interfund Loan from Housing Authority Fund to SB2 PHLA Fund September 17, 2024 - Page 2