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 

 

Recommended Action

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.  

 

Executive Summary

State law requires each Redevelopment Agency to present an annual report to its City Council and file the report with the State Controller no later than December 31st.  The report includes a summary of the Agency’s programs and activities, a financial audit and a fiscal statement.  The report also includes a description of the Agency’s housing activities, which is submitted to the California Department of Housing and Community Development.  The Agency is also required to prepare an annual written determination stating that planning and administrative expenses are necessary for the production, improvement, or preservation of low- and moderate-income housing. 

 

Discussion

 

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.

Financial Impacts & Budget Actions

 

No financial impact will result from these actions.

 

 

Prepared by: Elsa Trujillo, Senior Development Analyst

 

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Andy Agle, Director

Housing and Economic Development

 

Rod Gould

City Manager

 

 

Attachments:

 

Attachment A:         Annual Report Summary

Attachment B:         Macias Gini and O’Connell Independent Auditor’s Report (Draft Financial Statements)

Attachment C:         State Auditor Controller’s Report of Financial Transactions

Attachment D:         State Housing and Community Development Department Annual Report of Housing Activity of Community Redevelopment Agencies

Attachment E:         Resolution Determining the Necessity of Expending Low and Moderate Income Housing Funds for Planning and Administration Costs