AGENDA ITEM NO. 11
CITY OF HAWTHORNE
City Council
AGENDA BILL
For the meeting of March 26, 2024
Originating Department: Finance
City Manager: __________
Vontray Norris
City Treasurer: ___________
Marie Hornback
SUBJECT:
Increased Investments in 1-5 year lettered fixed investments through Multi-Bank Securities (MBS).
RECOMMENDED MOTION:
Approve City Treasurer’s request to increase investments through MBS and authorize certain designated City of Hawthorne Officers (pursuant to Resolution 8010) to execute transfers of up to $5.5 million of City's General Fund to invest in fixed investments through Multi-Bank Securities.
DISCUSSION:
The City Treasurer has determined that the City has amble reserves for operation and believes the City should add diversity to its fixed investment portfolio at Multi-Bank Securities to earn better returns. The Treasurer plans to add to the City’s fixed income ratio portfolio on a rolling basis as she sees good options for the City.
The City Treasurer plays a crucial role in managing the financial affairs of a city or municipality.
City Treasurers, duties and responsibilities will align with the city's mission statement. I'm recommending a strategic investment opportunity that will benefit our city's financial portfolio and ensure the prudent management of our resources. After thorough analysis and consultation with economic experts, I recommend the city consider investing some of our surplus funds in a money market account. I have outlined the rationale behind this proposal and its potential benefits for our community. I have provided best practices I will continue to work on during my time as the Elected City Treasurer.
• Safety and Liquidity
• Competitive Returns
• Flexibility and Accessibility
• Stability and Security
• Prudent Financial Management
I respectfully request that the Council authorize the allocation of a portion of our surplus funds ($5,500,000) to the existing MBS account. This decision reflects our commitment to safeguarding the financial interests of our community and ensuring the long-term prosperity of our city.
Benefits and Risks:
All investments will be bound by the City's investment policies. These investments will be in fixed income securities mainly CDs and have no loss of principle risk if held to maturity. These investments can provide returns of .65% - 4.92% vs. LAIF current returns of 4.10%. The only risk, the city could face is if they need to cash out the fixed securities before their term is up. This loss could occur if the current interest rates increase and the fix security needs to be sold at a discount. That is why the city is only investing excess reserves that it plans to hold to maturity. .
FISCAL IMPACT:
Increase City’s interest income.
NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act
AGENDA ITEM NO. 12
CITY OF HAWTHORNE
City Council
AGENDA BILL
For the meeting of March 26, 2024
Originating Department: City Attorney
City Attorney: ___________
Robert Kim
SUBJECT:
Claim For Damages From Jaques Benoit
RECOMMENDED MOTION:
Deny the Claim of Jaques Benoit
DISCUSSION:
Jacques Benoit brings this claim seeking damages alleging that Hawthorne police officers falsely arrested and detained him for forty-five minutes in the back seat of a patrol car. Mr. Benoit asserts that this aggravated his claustrophobic and PTSD conditions.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
FISCAL IMPACT:
None.
NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):
1. None
AGENDA ITEM NO. 13
CITY OF HAWTHORNE
City Council
AGENDA BILL
For the meeting of March 26, 2024
Originating Department: Housing
City Manager: __________
Vontray Norris
Dir. of Housing: ___________
Kimberly Mack
SUBJECT:
Receive and file Housing Successor Agency Reports for Fiscal Year Ending 2022-23.
RECOMMENDED MOTION:
Staff recommends that the City Council receive and file the City of Hawthorne Housing Successor Agency Annual Report for Fiscal Year 2022-23 (Attachment #1).
DISCUSSION:
Background:
The City of Hawthorne (“City”) serves as the Housing Successor Agency to the former Hawthorne Redevelopment Agency (“Agency”), which was dissolved on February 1, 2012. Each Housing Successor Agency is required to prepare an annual report documenting its assets, revenues, expenditures, and how it is meeting requirements imposed by Health and Safety Code Section 34176.1.
The annual report is required to contain the following:
1) A summary of housing successor agency duties;
2) The balance of the Low- and Moderate-Income Housing Asset Fund (“Housing Asset Fund”);
3) An inventory of properties held in the Housing Asset Fund; and 4) Reports on the City’s performance thus far in meeting the income and age proportionality requirements of Health and Safety Code (“HSC”) Section 34176.1.
The report is due to the California Department of Housing and Community Development by April 1 each year and must be posted on the City’s website. The report for Fiscal Year 2022-23 is being presented to the City Council to receive and file.
Analysis:
The City’s progress on major requirements in the Fiscal Year 2022-23 is summarized below.
Housing Asset Fund Activity
The City deposited $480,171 into the Housing Asset Fund during Fiscal Year 2022-23. Revenues were from investment earnings and rental property income (security deposits, rents, and machine income).
Real Property Assets and Loans Receivables
As the Housing Successor Agency, the City inherited six (6) real properties, one (1) loan, and two (2) deferrals from the former Agency when it dissolved on February 1, 2012. The value of real properties and loans receivable was $5 million as of June 30, 2020. Of the six (6) properties, five (5) are developed and operating as affordable housing, and one (1) is in the process of being sold/developed.
Expenditure Proportionality Requirements
Expenditures from the Housing Asset Fund must meet specific proportionality requirements by income level and age:
• Administrative and monitoring expenses are capped at $200,000 annually, adjusted for inflation, or five (5) percent of the value of real properties and loans receivable, whichever is higher.
• Up to $250,000 may be spent annually on rapid re-housing solutions for homelessness. • If Housing Asset Funds are spent on housing projects and programs, within each five-year compliance period:
o At least 30% must be spent on extremely low-income households (earning up to 30% of the Area Median Income);
o No more than 20% may be spent on low-income households (earning 60-80% of the Area Median Income); and
o No monies may be spent on moderate or above moderate-income households (earning more than 80% of the Area Median Income).
• No more than 50% of rental housing units assisted by the City or the former Redevelopment Agency in the prior 10 years may be restricted to seniors.
The City only incurred administrative expenses during Fiscal Year 2022-23 and is meeting all requirements for rapid rehousing, projects and programs, and senior expenditures. However, the $254,500 limit for administrative expenditures was exceeded with a total of $304,542 spent. Staff is working to reduce annual administrative expenditures to ensure requirements are met in the future.
Steps Following Approval:
City Staff will post the Fiscal Year 2022-23 Housing Successor Annual Report on the City’s website.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
None
FISCAL IMPACT:
None
NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):
1. Hawthorne Housing Successor Agency Annual Report for Fiscal Year 2022-23 FY 2022-23 Housing Successor Annual Report 1-1 April 2024 City of Hawthorne
2022-23 Housing Successor
Agency Annual Report
CITY OF HAWTHORNE
Housing Successor Agency to the Former Hawthorne
Redevelopment Agency
April 1, 2024
Prepared for:
CITY OF HAWTHORNE
Prepared by:
101 Progress, Suite 250
Irvine, California 92618
(949) 655-3900
FY 2022-23 Housing Successor Annual Report 1-2 April 2024 City of Hawthorne
Table of Contents
Section 1 Introduction .........................................................................................................1-3
1.1 Reporting Requirements...............................................................................1-3
1.2 Expenditure Requirements ...........................................................................1-4
1.3 Assets Transferred to the Housing Successor Agency ................................1-5 Section 2 Low and Moderate Income Housing Asset Fund .............................................2-1
2.1 Housing Asset Fund Deposits and Ending Balance .....................................2-1
2.2 Expenditure Limitations ................................................................................2-1
2.3 Statutory Value of Real Properties and Loan Receivables...........................2-2 Section 3 Property Development & Disposition................................................................3-1 Section 4 Outstanding Inclusionary & Replacement Housing.........................................4-1 Section 5 Senior Housing Expenditure Proportionality ...................................................5-1 Section 6 Excess Surplus....................................................................................................6-2 Section 7 Inventory of Homeownership Units...................................................................7-1 Section 8 Deposits from City to Agency Loan Repayments ........................................8-1
APPENDICES
A Housing Asset Transfer Form
FY 2022-23 Housing Successor Annual Report 1-3 April 2024 City of Hawthorne
Section 1 Introduction
This Housing Successor Annual Report (“Report”) has been prepared pursuant to the California Health and Safety Code (“HSC”) Section 34176.1(f) and sets forth certain details of the City of Hawthorne (“City” or “Housing Successor”) as the Housing Successor of the Hawthorne Redevelopment Agency (“Agency”).
The purpose of this Report is to provide the governing body of the Housing Successor an annual report on the housing assets and activities of the Housing Successor under Part 1.85, Division 24 of the HSC – In particular, Sections 34176 and 34176.1 (“Dissolution Law”). The Report is due to the California Department of Housing and Community Development (“HCD”) by April 1st each year.
1.1 Reporting Requirements
Senate Bill (“SB”) 341 (2013-14) established that all former redevelopment agency housing assets must be maintained in a separate fund called the Low- and Moderate-Income Housing Asset Fund (“Housing Asset Fund”). HSC Section 34176.1(f) contains a series of annual reporting requirements for housing successor agencies regarding Housing Asset Funds. These requirements are presented below:
• Revenues and Expenditures
o Total amount deposited for the fiscal year.
o Statement of balance at the close of the fiscal year. o Description of expenditures for the fiscal year, broken out as follows:
▪ Rapid rehousing for homelessness prevention;
▪ Administrative expenses;
▪ Monitoring expenses (included as an administrative expense); ▪ All other expenditures must be reported as spent for each income group as defined by SB 341.
o Description of any transfers to another housing successor agency for a joint project. • Other Assets and Active Projects
o Description of any housing project(s) still funded through the Recognized Obligation Payment Schedule (“ROPS”).
o Update on property disposition or development for any property owned by the housing successor.
o Other “portfolio” balances, including the statutory value of any real property transferred from the former Agency or purchased by the Housing Asset Fund, and the value of loans and grants receivable.
FY 2022-23 Housing Successor Annual Report 1-4 April 2024 City of Hawthorne
o Inventory of homeownership units assisted by the former Agency or the City, subject to covenants, restrictions, or an adopted program that protects the former Agency’s investment of monies from the Low- and Moderate-Income Housing Fund.
• Obligations & Proportionality
o Description of any outstanding production obligations of the former Agency that are inherited by the City.
o Compliance with proportionality requirements (income group targets), which must be upheld on a five-year cycle.
o Percentage of deed-restricted rental housing restricted to seniors and assisted by the entity assuming housing functions, the former Agency, or the county within the past ten years compared to the total number of units assisted by any of those three agencies.
SB 341 also mandates that housing successor agencies conduct an independent financial audit of the Housing Asset Fund within six months of the end of each fiscal year - This financial audit may be included in the independent financial audit of the host jurisdiction. The City’s Annual Comprehensive Financial Report (“ACFR”) for Fiscal Year (“FY”) 2022-23 was completed in December 2022, includes an audit of the Housing Asset Fund1, and is available on the City’s website.
This Report presents the activities of the Housing Successor for FY 2022-23.
1.2 Expenditure Requirements
The law provides the following guidelines for expenditures from the Housing Asset Fund:
1. Administrative costs, including housing monitoring, are capped at $200,000 adjusted annually for inflation or 5% of the statutory value of any land owned by the housing successor agency and of loans and grants receivable.
a. In the City’s case, 5% of $4,910,822, or $254,500.
2. If the former Agency did not have outstanding housing production requirements, the housing successor agency is authorized to spend up to $250,000 per year on homeless prevention and rapid rehousing services to individuals and families who are homeless or would be homeless without this assistance.
a. In the City’s case, the former Agency had a surplus of affordable housing production units. Therefore, the City is allowed to make this expenditure if it chooses, and funding is available for such expenditures. 1 Housing Asset Fund balances, revenues, and expenditures in this report differ slightly from the ACFR because the ACFR includes activity from Fund 463.
FY 2022-23 Housing Successor Annual Report 1-5 April 2024 City of Hawthorne
3. Remaining allowable expenditures must be spent to improve housing options affordable to households in the following income groups:
a. Extremely low income (households earning 30% or less of the Area Median Income (“AMI”)) – Minimum of 30% spent on housing options must be spent in this category.
b. Very low income (households earning 31% to 60% of the AMI) – No requirements. c. Low income (households earning 61% to 80% of the AMI) – Maximum of 20% spent on housing options may be spent in this category. d. No funding may be spent on moderate income households (earning 81% to 120% of the AMI), as was previously authorized by redevelopment law.
Failure to comply with the extremely low-income requirement in any five-year compliance period will result in the City having to ensure that 50% of remaining funds be spent on extremely lowincome rental units until in compliance. Exceeding the expenditure limit for lower income households in any five-year reporting period will result in the City not being able to expend any funds on that income category until in compliance.
Housing successor agencies must report expenditures by category each year, but compliance with expenditure limitations is reported at the end of each five-year compliance period. For instance, a housing successor agency could spend all its funds in a single year on lower-income households, as long as it was 20% or less of the total expenditures during the five-year compliance period. The second five-year compliance period began on July 1, 2019, and ends on June 30, 2024.
1.3 Assets Transferred to the Housing Successor Agency
The City prepared a Housing Asset Transfer Form (“HAT”) in 2012 that provided an inventory of all housing-related assets transferred from the former Agency to the City following the dissolution of redevelopment. The HAT was approved to the California Department of Finance (“DOF) on August 30, 2012, and included:
• Real properties;
• Loans/Grants Receivables;
• Rents; and
• Deferrals.
FY 2022-23 Housing Successor Annual Report 2-1 April 2024 City of Hawthorne
Section 2 Low- and Moderate-Income Housing Asset Fund
The Housing Asset Fund replaced the former Agency’s Low- and Moderate-Income Housing fund.
It includes all assets transferred from the Agency to the City via the HAT.
2.1 Housing Asset Fund Deposits and Ending Balance
The City deposited $480,171 into the Housing Asset Fund during FY 2022-23. Revenues were generated from investment earnings and rental property income (security deposits and rents).
As shown on Table 2 below, the Housing Asset Fund closed FY 2022-23 with $7.6 million in assets2, none of which is held to pay for enforceable obligations on the ROPS.
2.2 Expenditure Limitations
Table 3 summarizes Housing Asset fund expenditures on administrative costs and homeless prevention in FY 2022-23, and affordable housing activities by income level from July 1, 2019 through June 30, 2024.
2 Excludes the statutory value of real properties held by the Successor Agency in Fund 463.
Revenue Source Amount
Investment Earnings $ 125,555
Rents & Security Deposits 354,616
Total $ 480,171
Table 1. Fiscal Year 2022-23 Housing Asset Fund Deposits Source: City of Hawthorne, Funds 462 & 464-468 Trial Balance Detail Reports Balance Type 1
Amount
Cash $ 7,297,254
Interest Receivable 8,400
Accounts Receivable -
Loans Receivable 328,743
Total $ 7,634,397
Table 2. Fiscal Year 2022-23 Housing Asset Fund Ending Balance Source: City of Hawthorne, Funds 462 & 464-468 Trial Balance Detail Reports 1 Excludes statutory value of Land Held for Resale, as it is not a part of the ACFR Asset Balance FY 2022-23 Housing Successor Annual Report 2-2 April 2024 City of Hawthorne
All Housing Asset Fund expenditures have been administrative for the second five-year compliance period that started on July 1, 2019. In Fiscal Year 2022-23, the City expended $304,542 in administrative expenditures which is over the limit for the year. The City will continue its efforts to decrease administrative expenditures and ensure that future expenditures meet proportionality requirements.
2.3 Statutory Value of Real Properties and Loan Receivables The City inherited six (6) properties, one (1) loan, and two (2) deferrals from the former Agency when it dissolved on February 1, 2012. Table 4 below shows the total value of real properties and loans receivable. The Housing Asset Transfer Form in Appendix A shows more detailed information about each property and loan receivable.
Admin/
Monitoring
Rapid
Rehousing
Ext. Low <30%
AMI
Very Low 31-
60% AMI
Low 61-80%
AMI
FY 2019-20 $647,358 $0 $0 $0 $0
FY 2020-21 374,058 0 0 0 0
FY 2021-22 237,137 0 0 0 0
FY 2022-23 304,542 0 0 0 0
FY 2023-24 0 0 0
Total Expenditures $304,542 $0 $0 $0 $0
SB 341 Limitation $254,500 $250,000 >30% N/A <20%
Compliant (Yes/No) No Yes Yes Yes Yes
Source: City of Hawthorne, Funds 462 & 464-468 Trial Balance Detail Report Table 3. Fiscal Year 2022-23 Housing Asset fund Expenditures Annual Limits Five-Year Limits
2022 - 23 July 1, 2019 - June 30, 2024
Asset Amount
Real Properties
12726 Grevillea Avenue $ 332,928
11529 Gale Avenue 1,575,064
11537 Gale Avenue 828,169
11605 Gale Avenue 883,585
12529 Truro Avenue 729,873
14115 Cordary Avenue 232,460
Subtotal $ 4,582,079
Loan Receivables
Southern California Housing Development Corp (Hawthorne Terrace) $ 328,743 Subtotal $ 328,743
Total $ 4,910,822
Table 4. Fiscal Year 2022-23 Real Properties & Receivables Source: City of Hawthorne, Hawthorne Housing Asset Transfer Form FY 2022-23 Housing Successor Annual Report 2-3 April 2024 City of Hawthorne
The total statutory value of real properties is $4,582,079 and outstanding loan receivables total is $328,743, for a combined value of $4,910,822.
FY 2022-23 Housing Successor Annual Report 3-1 April 2024 City of Hawthorne
Section 3 Property Development & Disposition
HSC Section 34176.1(e) requires that all real properties acquired by the Agency prior to February 1, 2012, and transferred to the City be developed for affordable housing purposes or disposed of within five years from the date DOF approved the HAT, or September 30, 2017. However, the law allows for a five-year extension via adoption of a resolution – The City adopted Resolution No. 7915 on July 25, 2017, allowing for a five-year extension. The City is compliant under the law due to continued efforts to dispose and develop the properties within the five-year deadline.
The Agency transferred six (6) real properties to the City on the HAT, five (5) of which are developed and operating as affordable housing and one (1) of which is in the process of being sold/developed. The Agency also transferred affordability covenants with three (3) properties that are overseen by the City. The properties are described below. • 12726 Grevillea Avenue
This multifamily rental property has eight (8) moderate income units. The former Agency acquired the property in 1991 and recorded a 55-year affordability covenant that expires in 2064.
• 11529 Gale Avenue
This multifamily rental property has twelve (12) moderate income units. The former Agency acquired the property in 2008 and recorded a 55-year affordability covenant that expires in 2064.
• 11537 Gale Avenue
This multifamily rental property has five (5) very low-income units. The former Agency acquired the property in 2009 and recorded a 55-year affordability covenant that expires in 2064.
• 11605 Gale Avenue
This multifamily rental property has ten (10) very low-income units restricted to seniors.
The former Agency acquired the property in 2008 and recorded a 55-year affordability covenant that expires in 2064.
• 12529 Truro Avenue
This multifamily rental property has three (3) very low-income units. The former Agency acquired the property in 2009 and recorded a 55-year affordability covenant that expires in 2064.
FY 2022-23 Housing Successor Annual Report 3-2 April 2024 City of Hawthorne
• 14115 Cordary Avenue
This property was acquired in 2011. The City previously issued a Request for Proposals (RFP) in 2019 for the development of a permanent supportive housing project for veterans experiencing homelessness. A developer was chosen in December 2019, but the City and developer were unable to come to an agreement on the number of units. In 2020, the City issued another RFP for the property’s purchase and development but the development project with the selected developer failed to move forward in 2023. As of the date of this report, the City is in the process of issuing another RFP/Notice of Funding Availability (“NOFA”) in 2024.
• Hawthorne Terrace – 12923 & 12938 Kornblum Avenue
The City monitors an affordability restriction at this 100-unit multifamily rental property with 54 very low-income units and 46 low-income units. The 55-year covenant expires in 2059.
• TELACU Gardens – 13000 Doty Avenue
The City monitors an affordability restriction at this multifamily rental property.
Completed in September 1988, this senior housing development project was completed as a partnership between TELACU, the United States Department of Housing and Urban Development (“HUD”), and the former Agency. Known as Hawthorne Senior Gardens, this property is a 75-unit low- and moderate-income facility located on Doty Avenue. The Agency provided funding for an additional elevator and other capital improvements. • TELACU Terrace – 4536 W. 118th Street
The City monitors an affordability restriction at this multifamily rental property. Dedicated in October 1992, TELACU Terrace provides affordable housing to low-income seniors.
The 75-unit complex includes eight (8) units designated for special-needs seniors. Situated at the corner of 118th Street and Grevillea Avenue, this residential complex is centrally located to amenities including shopping areas, and community facilities and services.
Agency assistance included funding for the acquisition of land, relocation, and clearance of the property.
FY 2022-23 Housing Successor Annual Report 4-1 April 2024 City of Hawthorne
Section 4 Outstanding Inclusionary & Replacement Housing The former Agency had a surplus of over 100 affordable housing units when it dissolved in February 2012. There are no outstanding inclusionary or replacement housing obligations of the former Agency to be fulfilled by the City.
FY 2022-23 Housing Successor Annual Report 5-1 April 2024 City of Hawthorne
Section 5 Senior Housing Expenditure Proportionality
This report must include an accounting of deed-restricted senior rental units that were produced over the last 10 years. The City may use Housing Asset Funds to assist no more than 50% of the aggregate total number of senior housing units produced by either the City or former Agency during the past 10 years. Exceeding this limitation will prohibit the use of Housing Asset Funds to subsidize any senior rental units in the future.
As shown in Table 5 below, the City and former Agency assisted four (4) properties in the last ten years, of which 0% are restricted to seniors. The City may spend more money subsidizing senior rental units in the future; however, it must ensure that no more than 50% of the total aggregate number of rental units at all affordability levels produced within the preceding ten (10) years are restricted to seniors.
Property Address # Restricted
Units
# Senior
Restricted Units
Acquired/
Assisted
Covenant
Recorded Covenant Expires
11519 Cedar Avenue 5 0 6/16/2015 6/16/2015 15 years
14135 Cerise 127 0 6/21/2015 1/21/2015 55 years after first occupancy 14105-14137 Chadron Avenue 28 0 9/15/2014 11/21/2012 30 years after first occupancy 14004 Doty Avenue 7 0 8/4/2014 11/12/2013 30 years after first occupancy Total 167 0
% Senior Units 0%
Table 5. Deed-Restricted Rental Units Assisted Since Fiscal Year 2011-12 Source: City of Hawthorne
FY 2022-23 Housing Successor Annual Report 6-2 April 2024 City of Hawthorne
Section 6 Excess Surplus
Excess surplus calculations were once performed by redevelopment agencies on an annual basis and are intended to ensure that funds are expended to benefit low-income households in an expeditious manner. Funds should be encumbered within four years of receipt. SB 341 reinstates this calculation for housing successor agencies. Excess surplus is defined by HSC Section 34176.1(d) as “an unencumbered amount in the account that exceeds the greater of one million dollars, or the aggregate amount deposited into the account during the housing successor agency’s preceding four fiscal years, whichever is greater.”
Pursuant to State law, the City must encumber any excess surplus amount within three fiscal years, or the funds must be transferred to HCD. As shown in Table 6 below, the Housing Asset Fund has no excess surplus in the Housing Asset Fund for FY 2022-23. Although the City encumbered $1,500,000 for the development of the 14115 Cordary Avenue property in FY 2021-22, the project was terminated in FY 2022-23 as previously mentioned. The City is issuing a 2024 RFP/ NOFA, will evaluate the proposals received in response, and will encumber at least the $4.1 million in Excess Surplus for a qualifying affordable housing development(s).
FY Deposits Cash Balance1 Encumbered
Funds
Unencumbered
Cash Balance
Greater of 4 Yrs of
Deposits or $1M2
Projected Excess
Surplus3
FY 2016-17 1,109,338 2,179,661 2,179,661 2,751,101 -
FY 2017-18 3,003,359 2,964,106 2,964,106 3,860,416 -
FY 2018-19 1,779,519 5,677,348 5,677,348 6,556,596 -
FY 2019-20 475,859 7,102,055 7,102,055 6,856,964 245,091 FY 2020-21 370,869 6,930,556 6,930,556 6,368,075 562,481 FY 2021-22 376,403 6,930,556 1,500,000 5,430,556 5,629,606 - FY 2022-23 480,171 7,118,441 7,118,441 3,002,650 4,115,791 Source: City of Hawthorne, Funds 462 & 464-468 Trial Balance Detail Report Table 6. Excess Surplus Projections
1 Represents the ending balance of the prior fiscal year or the beginning balance of the current fiscal year. 2 Excess surplus is an unencumbered amount that exceeds the greater of $1 million or the aggregate amount deposited during the preceding four years. Assumes the first year of Housing Asset Fund deposits is FY 2012-13, when redevelopment agencies dissolved effective 2/1/2012. 3 Projected excess surplus based on most current interpretation of the excess surplus calculation methodology. The Agency must encumber any excess surplus amount within three fiscal years, or the funds must be transferred to HCD for its Multifamily Housing Program or Joe Serna, Jr.
Farmworker Housing Grant Program. Projected excess surplus is subject to change, as deposits for past reports are to be reviewed.
Note: 2021-22 Encumbered Funds were allocated to assist in the development of the Encore Apartments project for a 19-unit, low-income veterans housing project. Because the project was terminated in 2023, the funds are still outstanding as excess surplus.
FY 2022-23 Housing Successor Annual Report 7-1 April 2024 City of Hawthorne
Section 7 Inventory of Homeownership Units
AB 1793 requires this report to include an inventory of homeownership units assisted by the former Agency or the Housing Successor Agency that are subject to covenants or restrictions or to an adopted program that protects the former Agency’s investment of moneys from the Low- and Moderate-Income Housing Fund. No homeownership properties were assisted by the former Agency that are subject to homeownership affordability covenants.
FY 2022-23 Housing Successor Annual Report 8-1 April 2024 City of Hawthorne
Section 8 Deposits from City to Agency Loan Repayments
HSC Section 34191.4(b)(3)(C) requires that 20 percent of any loan repayment made from a redevelopment successor agency to a city, for a loan that a city made to a former redevelopment agency, be deducted from the loan repayment amount and transferred to the Housing Asset Fund.
The repayment of loans made from low- and moderate-income housing set aside funds are payable 100 percent to the Housing Asset Fund. The remaining balance was paid to the Housing Asset Fund in FY 2017-18. This loan is no longer a loan receivable.
FY 2022-23 Housing Successor Annual Report April 2024
City of Hawthorne
APPENDIX A – Housing Asset Transfer Form
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