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Home My WebLink About2021-07-13 - AGENDA REPORTS - ENTER JPA TO FORM SPECIAL FIN AGENCY (2)23 Agenda Item: 23 CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL: DATE: July 13, 2021 SUBJECT: AUTHORITY TO ENTER INTO A JOINT EXERCISE OF POWERS AGREEMENT RELATED TO WORKFORCE HOUSING DEPARTMENT: Community Development PRESENTER: Michael Villegas RECOMMENDED ACTION City Council: 1. Adopt a resolution authorizing the City of Santa Clarita to enter into a Joint Exercise Powers Agreement in order to form the California Municipal Finance Authority's Special Finance Agency XI, for purposes of creating Workforce Housing. 2. Authorize the City Manager or designee to execute all documents to effectuate the City's membership, subject to City Attorney approval. BACKGROUND Currently, affordable housing programs in California have almost exclusively focused on providing housing for low- and moderate -income households, which are households that earn at or below 80 percent of the Area Median Income (AMI). In addition, state and federal funding sources are almost exclusively targeted to households at or below 60 percent of the AML This has left a "missing middle," comprised of households that earn too much to qualify for traditional affordable housing programs, but not enough to afford market rate housing. Households in this missing middle typically earn between 80 percent and 120 percent of the AMI. The current AMI for the City of Santa Clarita (City) is $80,000 for a family of four. To provide a solution, the California Municipal Finance Authority (CMFA) created the Essential Housing Program which aims to create middle income housing throughout the state by acquiring and converting existing apartment complexes into rent -restricted units through the issuance and sale of governmental revenue bonds. Financing projects in this manner avoids the use of traditional affordable housing subsidies, tax credits, or private activity bonds, while not putting cities' finances or credit ratings at risk. This concept is referred to as Workforce Housing. Page 1 Packet Pg. 227 23 As part of Workforce Housing, acquired properties are converted to income and rent -restricted units with rental rates that are below market levels for middle -income households. These properties are owned by a Joint Powers Authority and are operated and managed by a Project Administrator in accordance with a Public Benefit Agreement (PBA), which would be executed once a project has been selected. In addition, the PBA includes provisions restricting the occupancy of the units to income -eligible households, limiting annual rent increases, preventing the displacement of current tenants who do not meet the income requirements, and allowing for the implementation of local preference policies. In recent weeks, the City has been approached by several private firms gauging the City's interest in Workforce Housing, including two formal project proposals. After careful review and consideration, both proposals were deemed infeasible by City staff, as they did not align with the needs of the community. However, firms remain committed to working with City staff to identify an appropriate project, with a new proposal having been presented for the City's consideration, which is currently being reviewed. There were two City Council Development Committee meetings held on May 26 and June 1, where Committee members Gibbs and McLean received presentations with information and the background on Workforce Housing. A third meeting with the Development Committee was held on July 8 to provide an update on steps taken by staff since the meeting on June 1. The recommended action for the City Council is to approve a resolution authorizing the City to enter into a Joint Exercise of Powers Agreement with CMFA, in order to form the CMFA Special Finance Agency XI. Entering into an agreement does not obligate the City in any way, nor expose it to any financial risk. It simply allows staff to actively work on identifying projects that meet the needs of the community. If a suitable project is identified, a subsequent item will be brought forward for the City Council's consideration. ALTERNATIVE ACTION Other action as determined by the City Council. FISCAL IMPACT There is no fiscal impact associated with this item. ATTACHMENTS Resolution Page 2 1 Packet Pg. 228 23.a RESOLUTION NO. 2 1 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, APPROVING, AUTHORIZING, AND DIRECTING EXECUTION OF A JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY SPECIAL FINANCE AGENCY XI WHEREAS, pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (Act), the City of Santa Clarita (City) and the California Municipal Finance Authority (CMFA, and together with the City: Members) propose to enter into a Joint Exercise of Powers Agreement (Agreement) in order to form the CMFA Special Finance Agency XI (Agency); WHEREAS, the City has determined that it is in the public interest and for the public benefit that the City become a member of the Agency for the purpose of promoting economic, cultural, and community development, including the financing of projects therefore by the Agency, and in order to exercise any powers common to the Members or granted by the Act; and WHEREAS, the Agreement has been filed with the City, and the members of the City Council of the City (City Council), with the assistance of its staff, have reviewed the Agreement. NOW, THEREFORE, the City Council of the City of Santa Clarita, California, does hereby resolve as follows: SECTION 1. The foregoing recitals are true and correct. SECTION 2. The City hereby requests to become a member of the Agency. The Agreement is hereby approved, and the Mayor or the designee is hereby authorized and directed to execute said document. SECTION 3. The adoption of this resolution shall not obligate the City or any department thereof, except as provided in this resolution, to take any further action with respect to the Agency or its membership therein. SECTION 4. The executing officers(s), the City Clerk, and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreements, documents, and certificates, and to perform such other acts and deeds, as may be necessary or convenient to affect the purposes of this resolution and the transactions herein authorized. SECTION 5. The City Clerk shall certify to the adoption of this resolution and shall forward a certified copy of this resolution and an originally executed Agreement to the Agency to: Jones Hall, A Professional Law Corporation 475 Sansome Street, Suite 1700 San Francisco, CA 94111 Attention: Ronald E. Lee, Esq. Page 1 of 2 I Packet Pg. 229 1 23.a PASSED, APPROVED, AND ADOPTED this th day of MAYOR ATTEST: CITY CLERK DATE: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) 2021. I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 21- was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the th day of 2021, by the following vote: AYES: COUNCIL,MEMBERS: NOES: COUNCIL,MEMBERS: ABSENT: COUNCIL,MEMBERS: CITY CLERK Page 2 of 2 I Packet Pg. 230 1 23.a SIGNATURE PAGE FOR JPA AGREEMENT IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their duly authorized representatives as of the day and year first above written. Charter Member: California Municipal Finance Authority By Name: Title: Charter Member: City of Santa Clarita By Name: Bill Miranda Title: Mayor ATTEST: City Clerk Date: I Packet Pg. 231 1