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Home My WebLink AboutRedevelopment Agency - RDA - Budget Appropriation Adjustment Council/Agency Meeting Held: Deferred/Continued to: *Appro ed ❑ Conditionally Approved ❑ Denied I i Cler '6 Signalt r Council Meeting Date: 4/5/2010 Department ID Number: ED 10-14 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBMITTED BY: FRED A. WILSON, EXECUTIVE DIRE PREPARED BY: STANLEY SMALEWITZ, DEPUTY EXE TIVE DIRECTOR SUBJECT: REDEVELOPMENT AGENCY BUDGET APPROPRIATION ADJUSTMENTS Statement:of Issue,Funding Source, Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Since adoption of the Redevelopment Agency's (RDA) budget in September 2009, there have been legislative.changes, contractual obligations, and spending priorities that impact the RDA budget. Due to these changes, it is necessary to increase appropriations to several funds managed by the RDA. Funding Source: The total amount of additional appropriations requested is $3,009,510. The funding source for this is a combination of unanticipated revenue ($300,000) and Undesignated/Unreserved fund balance ($2,709,510). Recommended Action: Motion to: Increase appropriations in the respective Redevelopment Agency (RDA) funds: Increase Merged Project Area Fund 30580101.69300 by $490,000 Increase Low-Income Housing Fund 30680301.69300 by $40,000 Increase Low-Income Housing Fund 30680301.75000 by $1,587,706 Increase Low-Income Housing Fund 30680302.89250 by $500,000 Increase Merged Project Area Debt Service Fund 40780101.75000 by $391,804 Alternative Action(s): Do not approve the increase in appropriations for the Redevelopment Agency (RDA) funds and provide direction to staff. REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 4/5/2010 DEPARTMENT ID NUMBER: ED 10-14 Analysis: Several expenditures for Fiscal Year 2009/10 were not fully anticipated during the budget development process and changes have occurred since adoption. The table below provides a summary view of the additional appropriations requested: Additional Appropriations Requested 1st Time Homebuyers Professional SERAF Program Services Merged Project Area Fund 30580101.69300 $ 490,000 Low-Income Housing Fund 30680301.69300 $ 40,000 Low-Income Housing Fund 30680301.75000 $ 1,587,706 Low-Income Housing Fund 30680302.89250 $ 500,000 Merged Project Area Debt Sery Fund 40780101.75000 $ 391,804 $ 1,979,510 1 $ 500,000 1 $ 530,000 1 $3,009,510 A detailed explanation of the requested appropriations follows: State of California SERAF Shift (Merged Proiect Area Debt Service/Low-Income Housing) Adoption of the City's FY 2009/10 budget occurred while the State of California was still determining the method and amount of the Supplemental Educational Revenue Augmentation Funds (SERAF) transfer. Based upon preliminary numbers, the City had to estimate appropriations of this State take of redevelopment funds. With the State adoption of AB 26 4X, the Huntington Beach Redevelopment Agency's (RDA) share of the total $2.05 billion statewide taking of redevelopment funds is actually $5,379,510. Hence, an additional $1,979,510 in appropriations is requested to meet this obligation. Although AB 26 4X has been challenged by the California Redevelopment Association, the funds must be appropriated and ready for transfer by May 10, 2010. The $5,379,510 SERAF transfer is being funded by a 60/40 split between Low-Income Housing (Fund 306) and Merged Project Area Debt Service (Fund 407). The additional appropriations of $1,979,510 (from U ndesig nated/U n reserved fund balance in each respective fund) would therefore be split between the Merged Project Area Debt Service (Fund 407) by increasing appropriations by $391,804 and the Low-Income Housing Fund (Fund 306) with an increase in appropriations of $1,587,706. This State take away has impacted the Agency's ability to provide affordable housing, incentivize economic development, and infrastructure improvements. Low-Income Housing Fund— First Time Home Buyers/Revenue/Legal Services In May 2009, Council approved a First-Time Home Buyers Program funded with $1.0 million from the Low-Income Housing Fund and Federal Stimulus funding. The program commenced in September 2009, with the first escrow closing occurring in December 2009. The program has been very successful and has created six new homeowners. The program has expended $469,010 to date for these six new homeowners. Additionally, three homeowners are in escrow for $209,700 and three homeowners are entering into escrow -2- 3/29/2010 4:12 PM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 4/5/2010 DEPARTMENT ID NUMBER: ED 10-14 within the next two weeks for $200,000. There are also thirty-two eligible applicants in other stages of the homeowner process. With these applications, the City will use the remaining funds initially approved by City Council. Therefore, staff is recommending an increase of $500,000 in appropriations to extend the program through October 2010, and assist the additional first-time home buyers (for a total of$1.5 million in first-time homebuyer assistance). The Low-Income Housing Fund will be receiving additional rental income from Emerald Cove, due to a delay in the close of escrow on the property. The additional revenue is estimated at $300,000 for FY 2009/10. The City Attorney's Office anticipates the need to increase legal services appropriations by $40,000 in Professional Services. The increase in legal services anticipates three new housing projects. Therefore, the $540,000 in additional appropriations will be offset by the unanticipated Emerald Cove revenue, with the additional appropriations coming from the Low-Income Housing Fund's (Fund 306) Undesignated/Unreserved fund balance. Professional Services (Agency/Administration) The FY 2009/10 adopted RDA budget (Merged Project Area Fund 305) included $530,500 for professional services. The professional services included appraisers, economic analysis, engineering services, financial/bond services, and graphic services. The budget did not account for the Plan Amendment consultant, since the Request for Proposal (RFP) for the noted services was not finalized and the amount required was unknown at the time of budget adoption. In November 2009, the RDA entered into a contract with the consultant, RSG, for the Plan Amendment process. At the March 1, 2010, City Council meeting, the RDA provided additional Professional Services funds for the PBS&J contract for the Beach and Edinger EIR. In addition, the Agency will need to increase the legal services appropriations due to upcoming projects by $60,000. Since these professional services needs were not included in the adopted budget, an appropriation of funds for Professional Services from the Merged Project Area Fund's (Fund 305) Unreserved/Undesignated fund balance in the amount of $490,000 is requested. The total amount requested for Fund 305 is $881,804, which includes the Professional Services and State take away. Strategic Plan Goal: Enhance Economic Development Environmental Status: Not Applicable -3- 3/29/2010 4:12 PM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 4/5/2010 DEPARTMENT ID NUMBER: ED 10-14 Attachment(s): • - Number D- 1. Fiscal Impact Statement -4- 3/29/2010 4:12 PM ATTACHMENT # 1 ----Jl CITE' OF HUNTINGTON BEACH =r = INTERDEPARTMENTAL COMMUNICATION FINANCE DEPARTMENT TO: FRED A. WILSON, CITY ADMINISTRATOR FROM: BOB WINGENROTH, DIRECTOR OF FINANCE SUBJECT: FIS 2009-10-09 REDEVELOPMENT AGENCY BUDGET APPROPRIATION ADJUSTMENTS DATE: MARCH 29, 2010 As required by Resolution 4832, this Fiscal Impact Statement has been prepared for "Redevelopment Agency Budget Appropriation Adjustments." If the Council approves this action, below are the effects of this action on the various funds of the Redevelopment Agency: Fund Additional Appropriations Available Balance after Council Approval Merged Project Area Debt $881,804 $1,144,819 Service Fund $2,127,706 Low Income Housing Fund (with increased estimated $7,981,802 revenue of$300,000) BW/rs RCA ROUTING HEFT INITIATING DEPARTMENT: Economic Development SUBJECT: Redevelopment Agency Budget Appropriations Adjustments COUNCIL MEETING DATE: April 5, 2010 CA ATTACH ENT STATUS . Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached Not Applicable ❑ Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPILANQTM FOR MIS NG ATTAC G 1V ,. REVIEE® ;' RETURNS® `" FOR, A DE® Administrative Staff ( ) ) Deputy City Administrator (Initial) ( ) City Administrator (Initial) ( ) ( ) City Clerk ( ) EXPL,4NATIOWFOR RETURN OF-ITEM: RCA Author: Fritzal 1519