City Council and Redevelopment Agency Report
City Council Meeting: December 13, 2011
Agenda Item: 3-O
To: Mayor and City Council
Chairperson and Redevelopment Agency
From: Andy Agle, Director of Housing and Economic Development
Subject: Redevelopment Agency Annual Report and Determination
Staff recommends that the City Council receive the Redevelopment Agency’s Annual Report for Fiscal Year 2010-2011.
Staff recommends that the Redevelopment Agency:
1. Direct the Agency Executive Director to transmit the report, in substantial conformance with the attached draft, to the State Controller for filing; and
2. Adopt the attached Resolution determining that the planning and administration expenses paid from the Low and Moderate Income Housing Funds in FY 2010-2011 are necessary and not disproportionate to the amount spent for the production, improvement, or preservation of low and moderate income housing.
The Finance Department prepares annual statements that disclose the Agency’s financial operations for the fiscal year. Macias Gini and O’Connell, independent auditors, are in the process of completing their audit of these financial statements for the period of July 1, 2010 through June 30, 2011, in accordance with Section 33080.1 of the California Health and Safety Code. Attached is a draft of the financial statements, which are not anticipated to change materially.
In addition to providing a copy of the independent financial audit from Macias Gini and O’Connell, the attached annual report for FY 2010-2011 includes a summary of Agency-funded activities and projects, the Redevelopment Agency Financial Transactions Report to the State Controller’s Office, and the Housing Activity Report to the California Department of Housing and Community Development (HCD). The annual report is required to be received by the Council and transmitted to the State Controller and HCD by December 31, 2011.
Additionally, Macias Gini and O’Connell performed tests of the Agency’s compliance with certain provisions of laws, regulations, contracts, and grants. The auditors are prepared to report no instances of noncompliance in accordance with government auditing standards upon the Agency's adoption of the attached resolution determining that the expenditure of low- and moderate-income housing funds for planning and administrative expenses are necessary for the production, improvement, or preservation of low- and moderate-income housing. California Health and Safety Code Section 33334.3 (d) provides that the amount of low- and moderate-income housing funds spent for planning and general administrative activities associated with affordable housing activities should not be disproportionate to the amount actually spent for the production, improvement, or preservation of low- and moderate-income housing. Adoption of the attached resolution satisfies the requirement for determining that planning and administrative expenses paid from low- and moderate-income housing funds were necessary for these purposes in FY 2010-2011. Administrative expenditures used to carry out low- and moderate-income housing activities in FY 2010‑2011 were approved by the Agency as part of the FY 2010-11 Budget. The administrative expenditures include $140,000 of staff costs associated with the Senior Homeless Prevention and Rental Assistance Program, and $1,000 of bank service fees. The total planning and administrative expenses of $141,000 represent less than one percent of the Agency’s total low-income and moderate-income housing fund expenditures of nearly $25 million. The expenditure of funds is far below the industry average for housing fund administration and is clearly not disproportionate to the total funds spent on affordable housing.