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WILLITS CITY COUNCIL
SPECIAL MEETING AGENDA
November 28, 2022 ♦ 6 PM ♦ Via Teleconference
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1. OPENING MATTERS
a) Call to Order; b) Pledge to the Flag; c) Roll Call
2. Noticed Public Hearing – Discussion and Possible action Including Adoption of Resolution Authorizing an Application and Adoption of the Permanent Local Housing Allocation Plan (PLHA) for the Permanent Local Housing Allocation Program in the Amount of $553,857 to Support an Owner-Occupied Housing Rehabilitation Loan Program for the Rehabilitation of Affordable Ownership Housing up to 120% Area Median Income.
3. ADJOURNMENT
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Willits City Hall, located at 111 East Commercial Street, Willits, California, not less than 24 hours prior to the meeting set forth on this agenda.
Dated this 17th day of November, 2022.
Delores Pedersen, City Clerk
AMERICANS WITH DISABILITIES ACT (ADA) COMPLIANCE
The meeting room is wheelchair accessible and disabled parking is available. If you are a person with a disability and need disability-related modifications or accommodations to participate in this meeting, please contact Cathy Moorhead at (707) 459-7121 or Fax (707) 459-1562. Requests for such modifications or accommodations must be made at least two full business days prior to the meeting.
ADDITIONAL MEETING INFORMATION FOR INTERESTED PARTIES
Materials related to an item on this Agenda submitted to the Willits City Council, Planning Commission, or Community Development Agency after distribution of the agenda packet are available for public inspection at City Clerk’s office at 111 E. Commercial Street, Willits, during normal business hours.
Willits City Council Agenda – November 28, 2022
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Item No. 2
Meeting Date: 11/28/2022
AGENDA SUMMARY REPORT
To: Honorable Mayor and Council Members
From: Dusty Duley, Community Development Director
Agenda Title: NOTICED PUBLIC HEARING – DISCUSSION AND POSSIBLE ACTION INCLUDING
ADOPTION OF RESOLUTION AUTHORIZING AN APPLICATION AND ADOPTING THE PLHA (PERMANENT LOCAL HOUSING ALLOCATION) PLAN FOR THE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM IN THE AMOUNT OF $553,857 TO SUPPORT AN OWNER-OCCUPIED
HOUSING REHABILITATION LOAN PROGRAM FOR THE REHABILITATION OF AFFORDABLE OWNERSHIP HOUSING UP TO 120% AREA MEDIAN INCOME.
Type: Presentation Consent Regular Agenda Public Hearing Urgent Time: 20 min Summary of Request: The California Department of Housing and Community Development (HCD) has made formula funding available through the Permanent Local Housing Allocation (PLHA) Program for housing-related projects and programs that assist in addressing the unmet housing needs of local communities. The City has been allocated an estimated $553,857 for the calendar years 2019-2023. This funding application would allow the City to access $371,856 in 2019-2021 funding. After discussion, staff determined that developing an owner-occupied housing rehabilitation program is an eligible use of PLHA funds which would provide a valuable resource to homeowners to support the City’s goals to preserve housing stock.
PLHA funding is a durable, annual funding allocation which requires a public hearing to adopt an approved usage plan and annual, streamlined reapplication to secure subsequent year’s allocations. Should the City determine at a later date that another project or program is a more effective use of PLHA funding, the City can adjust its allocation at any time by holding another public hearing to adopt a revised PLHA usage plan. The PLHA funding application is due on November 30th, 2022.
Recommended Action: Adopt the accompanying resolution adopting the attached PLHA Plan and approving application for PLHA funds.
Alternative(s): None.
Fiscal Impact: City’s staff and consultant time to develop and administer the proposed Owner-occupied Housing Rehabilitation Program is fundable through the grant, thereby minimizing the impact on the General Fund.
Personnel Impact: Both the Community Development and Finance Departments will be necessary to support the project. The intent is to utilize the consultant to oversee the program to limit the overall impact on staff resources.
Reviewed by: City Manager City Attorney Assistant City Manager City Clerk Finance Director Human Resources Risk Manager
Council Action: Approved Denied Other: ________________________________________ Records: Agreement Resolution #_________ Ordinance #_________ Other _________ City of Willits
Permanent Local Housing Allocation Application
Program Income Reuse Plan
November 2022
1 Appendix A: Program Income Reuse Plan
I. Introduction
A. The purpose of this plan is to establish guidelines for the administration and utilization of loan repayments of principal and interest received by the City of Willits (City) as a result of activities funded under the California Permanent Local Housing Allocation Program (PLHA).
B. All repayments of loan principal and any loan interest shall be deposited into a separately maintained PLHA reuse Project Ledger governed by a reuse plan approved by the California Department of Housing and Community Development (HCD).
C. PLHA was established by Chapter 364, Statutes of 2017 (SB2, Atkins) and was part of a 15-bill package aimed at addressing the state’s housing shortage and high housing costs. SB 2 was authorized by Health and Safety Code (HSC) Section 50470.
II. Definition of Program Income
A. Program Income (PI) is defined as the gross income which is received by the jurisdiction that has been directly generated from the use of PLHA funds. Most commonly, PI is generated from payments of principal and interest on loans made using PLHA funds.
B. Other examples of PI include:
1. Interest earned on PI pending its disposition; and
2. Interest earned on funds that have been placed in a Reuse Project and Activity Account.
C. The actual amount accounted for as PLHA PI shall be directly proportionate to the actual percentage of PLHA participation in a project.
D. If PLHA loan funds are allocated for a project but not spent, they shall be returned to the City’s PLHA loan pool as unspent (unused) funds.
III. Reuse limits
A. All assistance provided to activities under this Reuse Plan shall be used for activities that are located within the City’s boundaries.
B. The PI shall provide one hundred percent (100%) benefit to the Targeted Income Group (TIG), defined as one hundred twenty (120%) or less of the area median income as determined annually by HCD.
C. PLHA funding of loans using PI funds will be consistent with the most recent PLHA Program Guidelines adopted by the City.
IV. Eligible use of funds
A. Eligible uses of funds must be consistent with Section 301 in the State’s PLHA Guidelines.
V. PLHA reuse account requirements
A. All PI will be deposited into the Project and Activity Ledger specifically designated for PLHA funds so that it will be separated from any other funding source. The Project and Activity Ledger will provide:
City of Willits
Permanent Local Housing Allocation Application
Program Income Reuse Plan
November 2022
2 1. A tracking system to ensure reuse of funds are used for appropriate activities;
2. Appropriate reporting ability;
3. Timely processing; and
4. Any accrued interest earned on PLHA funds is to accrue to the PLHA Reuse Project and Activity Ledger.
B. The City will monitor the reuse Project and Activity Ledger according to the most current PLHA requirements.
VI. Tracking PLHA PI
A. All PI will be tracked by one or more of the following:
1. Borrower Name
2. Date of Agreement Execution
3. Grant Agreement
4. Site Address
5. Amount
6. Interest rate
B. As PLHA loans are paid in full, all principal and interest from the payoff will be deposited into the PLHA Reuse Project and Activity Ledger for future projects to take place. 1 Permanent Local Housing Allocation Application Narratives Applicant: City of Willits
Submittal Deadline: November 30, 2022
November 2022
§302(c)(4)(A) Describe the manner in which allocated funds will be used for eligible activities.
The City of Willits proposes using its 2019-2023 PLHA allocation to support one eligible activity: the development and implementation of an owner-occupied housing rehabilitation (OOR) loan program to support the rehabilitation of affordable ownership housing that meets the needs of a growing workforce earning up to 120% AMI (Section 301(a)(2)). For the OOR loan program, any program income such as repayment of funds used to provide 0% interest loans will be used in the same manner as originally allocated by being placed back into the rehabilitation program fund.
The proposed owner-occupied rehabilitation program will offer 0% interest loans to homeowners under 120% AMI to implement necessary home (including manufactured homes on permanent foundations) repairs, including upgrades to comply with current codes, energy efficiency and weatherization improvements, accessibility improvements, and repairs to alleviate health and safety concerns and prolong the lifespan of the dwelling.
§302(c)(4)(B) Provide a description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below 60 percent of Area Median Income (AMI).
The City’s proposed PLHA activities will increase the supply of housing for households with incomes at or below 60% AMI via preservation and improvement of existing housing stock through the proposed OOR program. Under Section 301(a)(2), the implementation of an OOR program for homeowners with incomes up to 120% AMI, will preserve existing housing stock and limit pressure on the housing market by families who are displaced from deteriorated or non-code compliant housing. The City also anticipates that homeowners with incomes below 60% AMI may access the program, providing further direct benefits to households meeting that income criteria. While the City does not have an existing Owner-Occupied Rehabilitation program from which to glean potential usage projections by income level, the City’s median household income is $33,007 (Per 2020 American Community Survey 5-year estimates), or approximately 41% of the Area Median Income for Mendocino County which, per HCD, was $80,300 in 2022. While estimating the number of households below 60% AMI which would actually access the program is challenging, the City’s overall income demographics indicate a high likelihood that a plurality, if not a majority, of participants in the program would be households at or below 60% AMI.
2 §302(c)(4)(C) Provide a description of how the Plan is consistent with the programs set forth in the Local Government’s Housing Element.
The activities proposed in this PLHA plan are consistent with the following policies and programs described in the City of Willits Housing Element:
Program HE-1.A: Continue the City’s Rehabilitation Loan Program, which provides financial assistance to lower-income…owner households for housing rehabilitation.
PLHA funds for years 2019-2023 will be used to implement a rehabilitation loan program for occupants below 120% AMI.
Policy HE-2.D: Encourage the maintenance of existing housing to prevent deterioration and promote dwelling lifespan.
Offering low interest loans to homeowners for rehabilitation projects will prevent deterioration and promote dwelling lifespan.
§301(a)(2) The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory Dwelling Units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in highcost areas. ADUs shall be available for occupancy for a term of no less than 30 days. §302(c)(4)(E)(i) Provide a detailed and complete description of how allocated funds will be used for each proposed Affordable Rental and Ownership Housing Activity.
The City will use the entirety of its PLHA allocation for years 2019-2023 to develop and implement an owner-occupied home rehabilitation loan program for homeowners up to 120% AMI. Generally, applicants will be eligible for rehabilitation home loans for activities including but not limited to bringing properties up to current code standards, implementing energy efficiency upgrades, accessibility upgrades, repair or replacement of major systems such as HVAC or plumbing, abatement of asbestos or lead paint, or other activities which will prevent deterioration, extend the lifespan of the dwelling, and support homeowner affordability. The final term and rates of each loan will be determined at time of loan commitment/approval, though the City anticipates most loans will be provided at a 0% interest rate. As indicated by the “owner-occupied” component of the title, applicants must own and live in the home for which they are applying for funding, and the City will require that loans be secured with a deed of trust or title upon execution.
The City will contract with a third-party vendor(s) to underwrite and administer loan funding as well as manage grant reporting and monitoring. Loan underwriting and administration will be funded directly by PLHA funds as activity costs, while grant reporting and monitoring will be administrative costs.
3 §302(c)(4)(E)(iii) A description of major steps/actions and a proposed schedule for the implementation and completion of each Affordable Rental and Ownership Housing project.
Upon approval of PLHA funding, the City will procure, select, and contract with a qualified third-party consultant with experience underwriting and administering comparable loan funds. The City will work with the consultant to develop the formal guidelines, application process, and underwriting process for the owner-occupied rehabilitation program. After these guidelines and procedures are in place, the City will request fund disbursement from HCD and initiate the program. The program will be advertised through posting on the city website, press releases, brochures or flyers at the City offices, and social media posts. Upon receipt of an application, the City will screen the application for completeness and work with its consultant to verify the information provided, determine the appropriate rate and term of the loan, and move through the loan approval process. Applicants will be requested to provide proof of income, proof of ownership/residence, and other relevant information to demonstrate their eligibility for the program. Upon application approval and completion of underwriting and due diligence, the City will execute a loan agreement with the applicant and disburse the loan funds per the terms of the loan agreement, at which point the homeowner will hire a licensed contractor and proceed with the rehabilitation activities, making loan payments within the agreed-upon term per their approved lending agreement. The City anticipates requiring approximately 6 months from initial disbursement of funds to program rollout, with all activities occurring on an ongoing basis thereafter. For the purposes of this application, the City has estimated receipt of 10 qualifying applicants and subsequent loan disbursements per year for the first five years of the program; however, given the lack of data available to forecast demand for this program, the City may adjust this target over time as program data regarding participation rates is developed. Overall results of the program will be communicated to HCD via the required annual PLHA progress reports.
Resolution No. 2022-__ Page 1 of 1 November 28, 2022
RESOLUTION NO. 2022-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WILLITS AUTHORIZING THE
APPLICATION AND ADOPTION OF THE PLHA PLA FOR THE PERMANENT LOCAL HOUSING ALLOCATION PROGRAM.
WHEREAS, the State of California (the “State”), Department of Housing and Community Development (“Department”) issued a Notice of Funding Availability (“NOFA”) dated 5/3/2021 under the Permanent Local Housing Allocation (PLHA) Program; and WHEREAS, the Department is authorized to provide up to $304 million under the SB 2 Permanent Local Housing Allocation Program Formula Component from the Building Homes and Jobs Trust Fund for assistance to Cities and Counties (as described in Health and Safety Code section 50470 et seq.(Chapter 364, Statutes of 2017 (SB 2)); and WHEREAS, the City of Willits (the “City”) is an eligible local government who has applied for program funds to administer one or more eligible activities, or a Local or Regional Housing Trust Fund to whom an eligible local government delegated its PLHA formula allocation; and WHEREAS, the Department may approve funding allocations for PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement, and other contracts between the Department and PLHA grant recipients.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Willits hereby that:
1. If the City receives a grant of PLHA funds from the Department pursuant to the above referenced PLHA NOFA, it represents and certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA Program, as well as any and all contracts. The City may have with the Department.
2. The City is hereby authorized and directed to receive a PLHA grant, in an amount not to exceed the five-year estimate of the PLHA formula allocations, as stated in Appendix C of the current NOFA $553,857.00 in accordance with all applicable rules and laws.
3. The City hereby agrees to use the PLHA funds for eligible activities as approved by the Department and in accordance with all Program requirements, guidelines, other rules and laws, as well as in a manner consistent and in compliance with the Standard Agreement and other contracts between the City and the Department.
4. Pursuant to Section 302(c)(4) of the Guidelines, the City PLHA Plan for the 2019-2023 Allocations are attached to this resolution, and the City hereby adopts this PLHA Plan and certifies compliance with all public notice, public comment, and public hearing requirements in accordance with the Guidelines.
5. The City certifies that, if funds are used for the acquisition, construction or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the requirements stated in Guidelines Section 302(c)(6)(A)(B) and (C).
Resolution No. 2022-__ Page 1 of 1 November 28, 2022
6. The City shall be subject to the terms and conditions as specified in the Standard Agreement, the PLHA Program Guidelines and any other applicable SB 2 Guidelines published by the Department.
7. The City Manager of the City of Willits or their designee is authorized to execute the PLHA Program Application, the PLHA Standard Agreement and any subsequent amendments or modifications thereto, as well as any other documents which are related to the Program or the PLHA grant awarded to the City, as the Department may deem appropriate.
The above and foregoing Resolution was introduced by Councilmember seconded by Councilmember , and passed and adopted at a regular meeting of the City Council of the City of Willits, held on the 28th day of November, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ATTEST:
__________________________
_________________________________
SAPRINA RODRIGUEZ, Mayor
City Council of the City of Willits
DELORES PEDERSEN, City Clerk