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HomeMy WebLinkAboutRelease of Fiscal Year 2021-22 Housing Successor Annual Repo ©AA MrCITY OF HUNTINGTON BEACH 4b-1, Interdepartmental Memo TO: Honorable Mayor and Members of the City Council VIA: Al Zelinka, City Manager From: Ursula Luna-Reynosa, Director of Community Development�-# DATE: December 28, 2022 SUBJECT: Release of Fiscal Year 2021-22 Housing Successor Annual Report Attached for your review is the FY 2021-2022 Housing Successor Annual Report ("Report"). Upon the dissolution of redevelopment agencies in California in February 2012, the City Council on January 9, 2012 designated the Housing Authority ("Authority") to serve as the City's Housing Successor in order to receive all of the housing assets, rights, powers, duties, and obligations of the former Huntington Beach Redevelopment Agency for ongoing housing activities. The purpose of the attached annual Report is to provide the governing body of the Housing Successor, in this case the City Council, information on the status of assets and activities of the Housing Successor as required by redevelopment dissolution law. The Report was prepared pursuant to California Health and Safety Code Section 34176.1(f) and it summarizes assets held, revenues received, and expenditures made between July 1, 2021 and June 30, 2022. This financial information is also reported in the City's Independent Financial Audit of the Low and Moderate Income Housing Asset Fund (LMIHAF), which is the primary funding source for Housing Successor activities. Attachment: FY 2021-2022 Housing Successor Annual Report C: Travis Hopkins, Assistant City Manager Michael Gates, City Attorney Robin Estanislau, City Clerk Jennifer Villasenor, Deputy Director of Community Development Steve Holtz, Deputy Director of Community Development Charles Kovac, Housing Manager Matt Schneider, Planning Manager HOUSING SUCCESSOR ANNUAL REPORT REGARDING THE LOW AND MODERATE INCOME HOUSING ASSET FUND FOR FISCAL YEAR 2021/22 PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(F) FOR THE HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH This Housing Successor Annual Report(Report) regarding the Low and Moderate Income Housing Asset Fund(LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1(f)and is dated as of December 31, 2022. This Report sets forth certain details of the Housing Authority of the City of Huntington Beach (Housing Successor)activities during the twelve-month period ending June 30, 2022. The purpose of this Report is to provide the governing body of the Housing Successor an annual report on the housing assets and activities of the Housing Successor under part 1.85, Division 24 of the California Health and Safety Code, in particular, Sections 34176 and 34176.1 (Dissolution Law). The following Report is based upon information prepared by Housing Successor staff and information contained within the independent financial audit of the Low and Moderate Income Housing Asset Fund (Annual Comprehensive Financial Report, or'ACFR')for the twelve-month period ending June 30, 2022 (Fiscal Year)as prepared by City of Huntington Beach Finance Department. The ACFR is separate from this annual summary Report; further this Report conforms with and is organized into sections I through XII, inclusive, pursuant to Section 34176.1(f)of the Dissolution Law. I. Amounts Received and Deposited Pursuant to 34191.4(b)(3)(A): This section provides the total amount of funds paid to the Housing Successor and the amount deposited into the LMIHAF allocable to 20%of the repayments on reinstated City/Agency loans per Section 34191.4. II. Amount Deposited into LMIHAF: This section provides the total amount of funds deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for items listed on the Recognized Obligation Payment Schedule(ROPS) must be distinguished from the other amounts deposited. III. Ending Balance of LMIHAF: This section provides a statement of the balance in the LMIHAF as of the close of the Fiscal Year. Any amounts deposited for items listed on the ROPS must be distinguished from the other amounts deposited. IV. Description of Expenditures from LMIHAF: This section provides a description of the expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be categorized. V. Statutory Value of Assets Owned by Housing Successor: This section provides the statutory value of real property owned by the Housing Successor, the value of loans and grants receivables, and the sum these of these two amounts. VI. Description of Transfers: This section describes transfers, if any, to another housing successor agency made in previous Fiscal Year(s), including whether the funds are unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used. The sole purpose of the transfers must be for the development of transit priority projects, permanent supportive housing, housing for agriculture employees or special needs housing. Housing Authority of the City of Huntington Beach Page 1 • VII. Project Descriptions: This section describes any project for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS and the status of that project. VIII. Status of Compliance with section 33334.16: This section provides a status update on compliance with Section 33334.16 for interests in real property acquired by the former redevelopment agency prior to February 1,2012. For interests in real property acquired on or after February 1, 2012, provide a status update on the project. IX. Description of Outstanding Obligations under Section 33413: This section describes the outstanding inclusionary and replacement housing obligations, if any, under Section 33413 that remain outstanding prior to dissolution of the former redevelopment agency as of February 1, 2012 along with the Housing Successor's progress in meeting those prior obligations, if any, of the former redevelopment agency and how the Housing Successor plans to meet unmet obligations, if any. X. Income Test: This section provides the information required by Section 34176.1(a)(3)(B), or a description of expenditures by income restriction for a five-year period, with the time period beginning January 1, 2014 and whether the statutory thresholds have been met. This information is not required to be reported until 2024 for the FY 2019/20—FY 2023/24 reporting period. Xl. Senior Housing Test: This section provides the percentage of units of deed-restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its former redevelopment Agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted individually or jointly by the Housing Successor, its former Redevelopment Agency and its host jurisdiction within the same time period. For this Report the ten year period reviewed is July 1, 2012 through June 30, 2022. XII. Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus, and the Housing Successor's plan for eliminating the excess surplus. XIII. Inventory of Homeownership Units: This section provides a summary of covenanted homeownership units assisted by the former redevelopment agency or the housing successor that include an equity sharing and repayment provisions, including (a) number of units; (b) number of units lost to the portfolio in the last fiscal year and the reason for those losses, and (c) any funds returned to the housing successor pursuant to losses or repayments. This Report is to be provided to the Housing Successor's governing body by December 31, 2022. In addition, this Report, ACFR and the former redevelopment agency's pre-dissolution Implementation Plans are to be made available to the public on the City's website. I. Amounts Received and Deposited Pursuant to 34191.4(B)(3)(A) The former redevelopment agency and City did not enter into any loans that are to be repaid. II. Amount Deposited into LMIHAF A total of$1,540,222 was deposited into the LMIHAF during the Fiscal Year, of which none of the funds deposited into the LMIHAF were held for items listed on the ROPS. The deposits are allocated as follows: Housing Authority of the City of Huntington Beach Page 2 FY 2021/22 / of Totals Total Payment from Loans' $1,486,440 97% Interest Income 39,549 3% Other Income 14,233 <1% Total LMIHAF De.osits $1 540,222 100% III. Ending Balance of LMIHAF At the close of the Fiscal Year, the ending balance in the LMIHAF was$21,308,610, of which$4,755,095 is available. None of the funds were held for items listed on the ROPS. IV. Description of Expenditure from LMIHAF The following is a description of expenditures from the LMIHAF by category: FY 2021/22 Monitoring&Administration Expenditures $55,431 Homeless Prevention &Rapid Rehousing Services Expenditures $3,674 Housing Development Expenditures > Expenditures on Low Income Units 2 $67,080 > Expenditures on Very-Low Income Units 3 156,520 > Expenditures on Extremely-Low Income Units Total Housing Development Expenditures $223,600 Total LMIHAF Expenditures $282,706 The Housing Successor is allowed to spend up to the greater of$200,000 or 5% of the value of the Housing Assets Portfolio(defined and calculated in Section V), which totals$745,585, on Monitoring and Administration Expenditures. Therefore, the Housing Successor is only using approximately 7%of the maximum allowable$745,585 for Monitoring and Administration Expenditures. V. Statutory Value of Assets Owned by Housing Successor in LMIHAF Under the Dissolution Law and for purposes of this Report, the"statutory value of real property" means the value of properties formerly held by the former redevelopment agency as listed on the housing asset transfer schedule approved by the State Department of Finance(DOE)as listed in such schedule under Section 34176(a)(2), the value of the properties transferred to the Housing Successor pursuant to Section 34181(f), and the purposes price of property(ies) purchased by the Housing Successor. Further, the value of loans and grants receivable is included in these reported assets held in the LMIHAF. 1 Includes$900,000 in HOME loan payments resulting from the loan restructure that occurred in February 2022. 2 The Housing Successor made a$223,600 payment on the Emerald Cove bonds. Approximately 30%of the payment is attributed to low income units. This expenditure is not to be included in the Income Targeting Test (Section X). 3 Approximately 70%of the Emerald Cove bond payment is attributed to very-low income units. This expenditure is not to be included in the Income Targeting Test(Section X). Housing Authority of the City of Huntington Beach Page 3 The following provides the statutory value of assets owned by the Housing Successor: As of End of FY 2021/22 Statutory Value of Real Property Owned by Housing Successor $6,979,846 Value of Loans and Grants Receivables 7 931,852 Total Value of Housin! Assets $14,911,698 VI. Description of Transfers The Housing Successor did not make any LMIHAF transfers to other Housing Successor(s) under Section 34176.1(c)(2)during the Fiscal Year. VII. Project Descriptions The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS. VIII. Status of Compliance with Section 33334.16 With respect to interests in real property acquired by the former redevelopment agency prior to February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have commenced on the date that the DOF approved the property as a housing asset in the LMIHAF; thus, as to real property acquired by the former redevelopment agency now held by the Housing Successor in the LMIHAF, the Housing Successor must initiate activities consistent with the development of the real property for the purpose for which it was acquired within five years of the date of the DOF approved such property as a housing asset. The following provides a status update on the real property or properties housing asset(s)that were acquired prior to February 1, 2012 and compliance with five-year period: Date Approved by DOF as Development Address Housing Asset Activity Status of Activity Bowen Court 2/1/2002 N/A The property is encumbered with a 1968-82 Lake Street 'round lease that ex.ires in 2062. The following property was acquired by the Housing Successor using LMIHAF on or after February 1, 2012: Date Acquired by Housing Development Address Successor Activity Status of Activity 15311-15323 Pipeline Lane 5/8/2019 N/A The Housing Authority sold the property for$2,667,000, of which$781,000 was deposited back into the LMIHAF _ account. 17631 Cameron Lane 8/19/2020 On June 7, 2022, The Housing Authority entered into a the City Council Purchase and Sale Agreement on approved entering 3/16/2020 to purchase the property for into an Exclusive $3,041,669, of which $50,000 in LMIHAF Negotiating money was paid in FY 2019/20 as a Agreement with deposit. The property closed escrow in Jamboree Housing early FY 2020/21 and is the current site Corporation to of a temporary homeless shelter determine the (Navigation Center). feasibility for developing a mixed- use •ro.ect Housing Authority of the City of Huntington Beach Page 4 consisting of a homeless shelter, affordable housing, and ancillary uses. 17642 Beach Blvd 01/05/2021 On June 7, 2022, The Housing Authority entered into an the City Council Option Agreement to purchase the Site approved entering for$3,053,177 on 01/05/2021. The into an Exclusive property closed escrow in FY 2020/21 Negotiating and is the current site of a temporary Agreement with homeless shelter(Navigation Center). Jamboree Housing Corporation to determine the feasibility for developing a mixed- use project consisting of a homeless shelter, affordable housing, and ancillary uses. IX. Description of Outstanding Obligations Pursuant to Section 33413 Replacement Housing: According to the 2009-2014 Implementation Plan for the former redevelopment agency, no Section 33413(a) replacement housing obligations were transferred to the Housing Successor. lnclusionary/Production Housing: According to the 2009-2014 Implementation Plan for the former redevelopment agency, no Section 33413(b) inclusionary/production housing obligations were transferred to the Housing Successor. The former redevelopment agency's 2009-2014 Implementation Plan is posted on the City's website. X. Income Targeting Test Section 34176.1(a)(3)(A) states that all funds remaining after the monitoring and administration and homeless prevention and rapid rehousing services expenditures are deducted must be used for the development of housing affordable to and occupied by households earning 80%or less of the area median income(AMI), with at least 30%of these remaining funds expended for the development of rental housing affordable to and occupied by households earning 30%or less of the AMI and no more than 20% of these remaining funds expended for the development of housing affordable to and occupied by households earning between 60% and 80%of the AMI. The Housing Successor must demonstrate in the 2019 annual report, and every five years thereafter, that the Housing Successor's expenditures from January 1, 2014 through the end of the latest fiscal year covered in the report comply with these requirements. If the Housing Successor fails to comply with the Extremely-Low Income requirement in any five-year period, then the Housing Successor must ensure that at least 50%of the funds remaining in the LMIHAF be expended in each fiscal year following the latest fiscal year following the report on households earning 30%or less of the AMI until the Housing Successor demonstrates compliance with the Extremely-Low Income requirement. If the Housing Successor exceeds the expenditure limit for households earning between 60%and 80%of the AMI in any five-year report, the Housing Successor shall not expend any of the remaining funds for Housing Authority of the City of Huntington Beach Page 5 households earning between 60% and 80%of the AMI until the Housing Successor demonstrates compliance with this limitation in an annual report. For purposes of this calculation, "development" means new construction, acquisition and rehabilitation, substantial rehabilitation as defined in Section 33413, acquisition of long-term affordability covenants on multifamily units as described in Section 33413, or the preservation of an assisted housing development that is eligible for prepayment or termination or for which within the expiration of rental restrictions is scheduled to occur within five years. The FY 2018/19 Summary Report found the Housing Successor to be in compliance with the Income Targeting Test for the period of January 1, 2014 through FY 2018/19(First Reporting Period). This information is not required to be reported again until 2024 for the Second Reporting Period, or FY 2019/20 through FY 2023/24. Xl. Senior Housing Test The Housing Successor is to calculate the percentage of units of deed-restricted rental housing restricted to seniors and assisted by the Housing Successor, the former redevelopment agency and/or the City within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted by the Housing Successor, the former redevelopment agency and/or City within the same time period. If this percentage exceeds 50%, then the Housing Successor cannot expend future funds in the LMIHAF to assist additional senior housing units the Housing Successor or City assists and construction has commenced on a number of restricted rental units that is equal to 50% of the total amount of deed- restricted rental unit. The following summarizes the number of deed-restricted rental housing units produced by the former- redevelopment agency and Housing Successor over the past 10 years(July 1, 2012—June 30, 2022): Year # of Senior #of Non- Total# Project Name Built Units Senior Units of Units Oceana 2016 0 48 48 OCCHC- Barton 2016 0 4 4 OCCHC—11th Street 2017 0 4 4 Total Units 0 56 56 The following provides the Housing Successor's Senior Housing Test for the 10-year period of July 1, 2011 to June 30, 2021: FY 2021/22 #of Assisted Senior Rental Units 0 #of Total Assisted Rental Units 56 Senior Housin• Percents•e 0% As illustrated above, the Housing Successor is in compliance with the Senior Housing Test. XII. Excess Surplus Test Excess Surplus is defined in Section 34176.1(d)as an unencumbered amount in the account that exceeds 1)the greater of one million dollars($1,000,000)or 2)the aggregate amount deposited into the account during the Housing Successor's preceding four Fiscal Years, whichever is greater. The following provides the Excess Surplus test for the preceding four Fiscal Years: Housing Authority of the City of Huntington Beach Page 6 Available Housing Funds — FY 2021/22 LMIHAF Balance FY 2021/22 $21,308,610 (Less)Accounts Receivables (1,644,206) Add: Accounts Payable 2,389 (Less) Notes and Loans (7,931,852) (Less) Land (6,979,847) Available Housing Funds—FY 2021/22 $4,755,095 Limitation on Available Housing Funds FY 2021/22 Greater of: ➢ Base Amount $1,000,000 ➢ Four Years of Deposits FY 2017/18 98,736 FY 2018/19 977,593 FY 2019/20 6,518,471 FY 2020/21 996,679 Total Deposits $8,591,479 Limitation on Available Housing Funds $8,591,479 A total$8,591,479 has been deposited into the account during the previous four fiscal years while the ending available cash balance in the account is$4,755,095. Therefore, the LMIHAF does not have Excess Surplus. XIII. Homeownership The Housing Successor is to provide an inventory of homeownership units assisted by the former redevelopment agency or the Housing Successor that are subject to covenants or restrictions or to an adopted program that protects the former redevelopment agency's investment of moneys from the LMIHAF pursuant to Section 33334.3(f). The inventory for the Housing Successor is as follows: ➢ The following summarizes the current inventory of the Housing Successor's homeownership portfolio: #of ' ,, Units *4.+-.f �C'c�`.` '€ zs� �.i'" ( �'�'e.9��s r^:g� � -''»i ��$'���' `-,s�r�-..x r,fF"���' �'�y 1 "�,� txu>-�ilaa� Sri sf.,. :,....� ,...L.2-EFT7 .,���.t t:.. R .caa. .: �nsw.t .�t� ae. e-�b�.a,�..,>, reb.a-,F.a raaae9 Add: Restricted homeownershi• units added b Housin• Successor Jul,s; 1, 2021 throu•h June 30, 2022 0 1.� �:<.;�� � n ,� �i ��air �'- ,. -7� �:�: �n �,aJy e �' W ="4a7,7a '".'0.saer itlsoA,'.ME Housin• Successor Homeownershi Portfolio as of June 30, 2022 34 ➢ The Housing Successor has not contracted with an outside entity for the management of the ownership portfolio. Housing Authority of the City of Huntington Beach Page 7 Esparza, Patty From: Zelinka, Al Sent: Wednesday, December 28, 2022 4:02 PM To: Kovac, Charles Cc: Hopkins, Travis;Jun, Catherine;Yoon-Taylor, Grace; Luna-Reynosa, Ursula; Holtz, Steve; Gates, Michael; Estanislau, Robin; Esparza, Patty;Villasenor, Jennifer; Schneider, Matthew Subject: Re: FY 2021-2022 Housing Successor Annual Report (SB 341) Attachments: FY 21-22 Housing Successor (SB 341) Report-CC Memo Packet.pdf Thx. Sent to Councilmembers. Sent from my iPhone On Dec 28, 2022, at 12:43 PM, Kovac, Charles<charles.kovac@surfcity-hb.org>wrote: Hi Al, Attached is the revised memo and report for distribution to the City Council ... Charles From:Zelinka,Al<AI.Zelinka@surfcity-hb.org> Sent:Wednesday, December 28, 2022 10:51 AM To: Kovac, Charles<charles.kovac@surfcity-hb.org> Cc: Hopkins,Travis<thopkins@surfcity-hb.org>;Jun, Catherine<catherine.jun@surfcity-hb.org>; Yoon- Taylor, Grace<grace.yoon-taylor@surfcity-hb.org>; Luna-Reynosa, Ursula <ursula.luna- reynosa@surfcity-hb.org>; Holtz, Steve<steve.holtz@surfcity-hb.org>; Gates, Michael <Michael.Gates@surfcity-hb.org>; Estanislau, Robin<Robin.Estanislau@surfcity-hb.org>; Esparza, Patty <PEsparza@surfcity-hb.org>;Villasenor,Jennifer<JVillasenor@surfcity-hb.org>; Schneider, Matthew <Matthew.Schneider@surfcity-hb.org> Subject: Re: FY 2021-2022 Housing Successor Annual Report(SB 341) Thanks Charles.Can you write a little more so the Council members are educated about why they are receiving this information and how their review of the information will be useful to their roles? Sent from my iPhone On Dec 28, 2022, at 10:47 AM, Kovac, Charles<charles.kovac@surfcity-hb.org>wrote: Hi Al, Attached for distribution to the City Councilmembers is the 2021-2022 Housing Successor Annual Report(with cover memo) prepared pursuant to Senate Bill 341 and 1 Section 34176(f) of the Health and Safety Code ...this report should be distributed to the Council by December 31 ... If you have any questions just let me know ... Thanks, Charles 2 o CITY OF HUNTINGTON BEACH °' Interdepartmental Memo TO: Honorable Mayor and Members of the City Council VIA: Al Zelinka, City Manager From: Ursula Luna-Reynosa, Director of Community Development*, DATE: December 28, 2022 SUBJECT: Release of Fiscal Year 2021-22 Housing Successor Annual Report Attached for your review is the FY 2021-2022 Housing Successor Annual Report ("Report"). Upon the dissolution of redevelopment agencies in California in February 2012, the City Council on January 9, 2012 designated the Housing Authority ("Authority") to serve as the City's Housing Successor in order to receive all of the housing assets, rights, powers, duties, and obligations of the former Huntington Beach Redevelopment Agency for ongoing housing activities. The purpose of the attached annual Report is to provide the governing body of the Housing Successor, in this case the City Council, information on the status of assets and activities of the Housing Successor as required by redevelopment dissolution law. The Report was prepared pursuant to California Health and Safety Code Section 34176.1(f) and it summarizes assets held, revenues received, and expenditures made between July 1, 2021 and June 30, 2022. This financial information is also reported in the City's Independent Financial Audit of the Low and Moderate Income Housing Asset Fund (LMIHAF), which is the primary funding source for Housing Successor activities. Attachment: FY 2021-2022 Housing Successor Annual Report C: Travis Hopkins, Assistant City Manager Michael Gates, City Attorney Robin Estanislau, City Clerk Jennifer Villasenor, Deputy Director of Community Development Steve Holtz, Deputy Director of Community Development Charles Kovac, Housing Manager Matt Schneider, Planning Manager HOUSING SUCCESSOR ANNUAL REPORT REGARDING THE LOW AND MODERATE INCOME HOUSING ASSET FUND FOR FISCAL YEAR 2021/22 PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(F) FOR THE HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH This Housing Successor Annual Report(Report) regarding the Low and Moderate Income Housing Asset Fund(LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1(f) and is dated as of December 31, 2022. This Report sets forth certain details of the Housing Authority of the City of Huntington Beach (Housing Successor)activities during the twelve-month period ending June 30, 2022. The purpose of this Report is to provide the governing body of the Housing Successor an annual report on the housing assets and activities of the Housing Successor under part 1.85, Division 24 of the California Health and Safety Code, in particular, Sections 34176 and 34176.1 (Dissolution Law). The following Report is based upon information prepared by Housing Successor staff and information contained within the independent financial audit of the Low and Moderate Income Housing Asset Fund (Annual Comprehensive Financial Report, or`ACFR')for the twelve-month period ending June 30, 2022 (Fiscal Year)as prepared by City of Huntington Beach Finance Department. The ACFR is separate from this annual summary Report;further this Report conforms with and is organized into sections I through XII, inclusive, pursuant to Section 34176.1(f)of the Dissolution Law. I. Amounts Received and Deposited Pursuant to 34191.4(b)(3)(A): This section provides the total amount of funds paid to the Housing Successor and the amount deposited into the LMIHAF allocable to 20% of the repayments on reinstated City/Agency loans per Section 34191.4. II. Amount Deposited into LMIHAF: This section provides the total amount of funds deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for items listed on the Recognized Obligation Payment Schedule(ROPS) must be distinguished from the other amounts deposited. III. Ending Balance of LMIHAF: This section provides a statement of the balance in the LMIHAF as of the close of the Fiscal Year. Any amounts deposited for items listed on the ROPS must be distinguished from the other amounts deposited. IV. Description of Expenditures from LMIHAF: This section provides a description of the expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be categorized. V. Statutory Value of Assets Owned by Housing Successor: This section provides the statutory value of real property owned by the Housing Successor, the value of loans and grants receivables, and the sum these of these two amounts. VI. Description of Transfers: This section describes transfers, if any, to another housing successor agency made in previous Fiscal Year(s), including whether the funds are unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used. The sole purpose of the transfers must be for the development of transit priority projects, permanent supportive housing, housing for agriculture employees or special needs housing. Housing Authority of the City of Huntington Beach Page 1 VII. Project Descriptions: This section describes any project for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS and the status of that project. VIII. Status of Compliance with section 33334.16: This section provides a status update on compliance with Section 33334.16 for interests in real property acquired by the former redevelopment agency prior to February 1, 2012. For interests in real property acquired on or after February 1, 2012, provide a status update on the project. IX. Description of Outstanding Obligations under Section 33413: This section describes the outstanding inclusionary and replacement housing obligations, if any, under Section 33413 that remain outstanding prior to dissolution of the former redevelopment agency as of February 1, 2012 along with the Housing Successor's progress in meeting those prior obligations, if any, of the former redevelopment agency and how the Housing Successor plans to meet unmet obligations, if any. X. Income Test: This section provides the information required by Section 34176.1(a)(3)(B), or a description of expenditures by income restriction for a five-year period, with the time period beginning January 1, 2014 and whether the statutory thresholds have been met. This information is not required to be reported until 2024 for the FY 2019/20—FY 2023/24 reporting period. Xl. Senior Housing Test: This section provides the percentage of units of deed-restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its former redevelopment Agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted individually or jointly by the Housing Successor, its former Redevelopment Agency and its host jurisdiction within the same time period. For this Report the ten year period reviewed is July 1, 2012 through June 30, 2022. XII. Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus, and the Housing Successor's plan for eliminating the excess surplus. XIII. Inventory of Homeownership Units: This section provides a summary of covenanted homeownership units assisted by the former redevelopment agency or the housing successor that include an equity sharing and repayment provisions, including (a) number of units; (b) number of units lost to the portfolio in the last fiscal year and the reason for those losses, and (c) any funds returned to the housing successor pursuant to losses or repayments. This Report is to be provided to the Housing Successor's governing body by December 31, 2022. In addition, this Report, ACFR and the former redevelopment agency's pre-dissolution Implementation Plans are to be made available to the public on the City's website. I. Amounts Received and Deposited Pursuant to 34191.4(B)(3)(A) The former redevelopment agency and City did not enter into any loans that are to be repaid. II. Amount Deposited into LMIHAF A total of$1,540,222 was deposited into the LMIHAF during the Fiscal Year, of which none of the funds deposited into the LMIHAF were held for items listed on the ROPS. The deposits are allocated as follows: Housing Authority of the City of Huntington Beach Page 2 FY 2021/22 % of Totals Total Payment from Loans' $1,486,440 97% Interest Income 39,549 3% Other Income 14,233 <1% Total LMIHAF De s osits $1,540,222 100% III. Ending Balance of LMIHAF At the close of the Fiscal Year, the ending balance in the LMIHAF was$21,308,610, of which $4,755,095 is available. None of the funds were held for items listed on the ROPS. IV. Description of Expenditure from LMIHAF The following is a description of expenditures from the LMIHAF by category: FY 2021/22 Monitoring &Administration Expenditures $55,431 Homeless Prevention &Rapid Rehousing Services Expenditures $3,674 Housing Development Expenditures > Expenditures on Low Income Units 2 $67,080 > Expenditures on Very-Low Income Units 3 156,520 > Expenditures on Extremely-Low Income Units Total Housing Development Expenditures $223,600 Total LMIHAF Expenditures $282,706 The Housing Successor is allowed to spend up to the greater of$200,000 or 5% of the value of the Housing Assets Portfolio(defined and calculated in Section V),which totals$745,585, on Monitoring and Administration Expenditures. Therefore, the Housing Successor is only using approximately 7%of the maximum allowable$745,585 for Monitoring and Administration Expenditures. V. Statutory Value of Assets Owned by Housing Successor in LMIHAF Under the Dissolution Law and for purposes of this Report, the"statutory value of real property" means the value of properties formerly held by the former redevelopment agency as listed on the housing asset transfer schedule approved by the State Department of Finance(DOF)as listed in such schedule under Section 34176(a)(2), the value of the properties transferred to the Housing Successor pursuant to Section 34181(f), and the purposes price of property(ies) purchased by the Housing Successor. Further, the value of loans and grants receivable is included in these reported assets held in the LMIHAF. 1 Includes$900,000 in HOME loan payments resulting from the loan restructure that occurred in February 2022. 2 The Housing Successor made a$223,600 payment on the Emerald Cove bonds. Approximately 30%of the payment is attributed to low income units. This expenditure is not to be included in the Income Targeting Test (Section X). 3 Approximately 70%of the Emerald Cove bond payment is attributed to very-low income units. This expenditure is not to be included in the Income Targeting Test(Section X). Housing Authority of the City of Huntington Beach Page 3 The following provides the statutory value of assets owned by the Housing Successor: As of End of FY 2021/22 Statutory Value of Real Property Owned by Housing Successor $6,979,846 Value of Loans and Grants Receivables 7,931,852 Total Value of Housin• Assets $14,911,698 VI. Description of Transfers The Housing Successor did not make any LMIHAF transfers to other Housing Successor(s) under Section 34176.1(c)(2) during the Fiscal Year. VII. Project Descriptions The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS. VIII. Status of Compliance with Section 33334.16 With respect to interests in real property acquired by the former redevelopment agency prior to February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have commenced on the date that the DOF approved the property as a housing asset in the LMIHAF; thus, as to real property acquired by the former redevelopment agency now held by the Housing Successor in the LMIHAF, the Housing Successor must initiate activities consistent with the development of the real property for the purpose for which it was acquired within five years of the date of the DOF approved such property as a housing asset. The following provides a status update on the real property or properties housing asset(s)that were acquired prior to February 1, 2012 and compliance with five-year period: Date Approved by DOF as Development Address Housing Asset Activity Status of Activity Bowen Court 2/1/2002 N/A The property is encumbered with a 1968-82 Lake Street •round lease that ex.ires in 2062. The following property was acquired by the Housing Successor using LMIHAF on or after February 1, 2012: Date Acquired by Housing Development Address Successor Activity Status of Activity 15311-15323 Pipeline Lane 5/8/2019 N/A The Housing Authority sold the property for$2,667,000, of which$781,000 was deposited back into the LMIHAF account. 17631 Cameron Lane 8/19/2020 On June 7, 2022, The Housing Authority entered into a the City Council Purchase and Sale Agreement on approved entering 3/16/2020 to purchase the property for into an Exclusive $3,041,669, of which $50,000 in LMIHAF Negotiating money was paid in FY 2019/20 as a Agreement with deposit. The property closed escrow in Jamboree Housing early FY 2020/21 and is the current site Corporation to of a temporary homeless shelter determine the (Navigation Center). feasibility for developing a mixed- use •ro.ect Housing Authority of the City of Huntington Beach Page 4 consisting of a homeless shelter, affordable housing, and ancillary uses. 17642 Beach Blvd 01/05/2021 On June 7, 2022, The Housing Authority entered into an the City Council Option Agreement to purchase the Site approved entering for$3,053,177 on 01/05/2021. The into an Exclusive property closed escrow in FY 2020/21 Negotiating and is the current site of a temporary Agreement with homeless shelter(Navigation Center). Jamboree Housing Corporation to determine the feasibility for developing a mixed- use project consisting of a homeless shelter, affordable housing, and ancillary uses. IX. Description of Outstanding Obligations Pursuant to Section 33413 Replacement Housing: According to the 2009-2014 Implementation Plan for the former redevelopment agency, no Section 33413(a) replacement housing obligations were transferred to the Housing Successor. Inclusionary/Production Housing: According to the 2009-2014 Implementation Plan for the former redevelopment agency, no Section 33413(b) inclusionary/production housing obligations were transferred to the Housing Successor. The former redevelopment agency's 2009-2014 Implementation Plan is posted on the City's website. X. Income Targeting Test Section 34176.1(a)(3)(A)states that all funds remaining after the monitoring and administration and homeless prevention and rapid rehousing services expenditures are deducted must be used for the development of housing affordable to and occupied by households earning 80%or less of the area median income(AMI), with at least 30%of these remaining funds expended for the development of rental housing affordable to and occupied by households earning 30%or less of the AMI and no more than 20% of these remaining funds expended for the development of housing affordable to and occupied by households earning between 60% and 80% of the AMI. The Housing Successor must demonstrate in the 2019 annual report, and every five years thereafter, that the Housing Successor's expenditures from January 1, 2014 through the end of the latest fiscal year covered in the report comply with these requirements. If the Housing Successor fails to comply with the Extremely-Low Income requirement in any five-year period, then the Housing Successor must ensure that at least 50% of the funds remaining in the LMIHAF be expended in each fiscal year following the latest fiscal year following the report on households earning 30% or less of the AMI until the Housing Successor demonstrates compliance with the Extremely-Low Income requirement. If the Housing Successor exceeds the expenditure limit for households earning between 60% and 80%of the AMI in any five-year report, the Housing Successor shall not expend any of the remaining funds for Housing Authority of the City of Huntington Beach Page 5 households earning between 60% and 80% of the AMI until the Housing Successor demonstrates compliance with this limitation in an annual report. For purposes of this calculation, "development" means new construction, acquisition and rehabilitation, substantial rehabilitation as defined in Section 33413, acquisition of long-term affordability covenants on multifamily units as described in Section 33413, or the preservation of an assisted housing development that is eligible for prepayment or termination or for which within the expiration of rental restrictions is scheduled to occur within five years. The FY 2018/19 Summary Report found the Housing Successor to be in compliance with the Income Targeting Test for the period of January 1, 2014 through FY 2018/19 (First Reporting Period). This information is not required to be reported again until 2024 for the Second Reporting Period, or FY 2019/20 through FY 2023/24. XL Senior Housing Test The Housing Successor is to calculate the percentage of units of deed-restricted rental housing restricted to seniors and assisted by the Housing Successor, the former redevelopment agency and/or the City within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted by the Housing Successor, the former redevelopment agency and/or City within the same time period. If this percentage exceeds 50%, then the Housing Successor cannot expend future funds in the LMIHAF to assist additional senior housing units the Housing Successor or City assists and construction has commenced on a number of restricted rental units that is equal to 50% of the total amount of deed- restricted rental unit. The following summarizes the number of deed-restricted rental housing units produced by the former- redevelopment agency and Housing Successor over the past 10 years (July 1, 2012—June 30, 2022): Year #of Senior #of Non- Total# Project Name Built Units Senior Units of Units Oceana 2016 0 48 48 OCCHC-Barton 2016 0 4 4 OCCHC— 11th Street 2017 0 4 4 Total Units 0 56 56 The following provides the Housing Successor's Senior Housing Test for the 10-year period of July 1, 2011 to June 30, 2021: FY 2021/22 #of Assisted Senior Rental Units 0 #of Total Assisted Rental Units 56 Senior Housin• Percenta•e 0% As illustrated above, the Housing Successor is in compliance with the Senior Housing Test. XII. Excess Surplus Test Excess Surplus is defined in Section 34176.1(d)as an unencumbered amount in the account that exceeds 1)the greater of one million dollars($1,000,000) or 2)the aggregate amount deposited into the account during the Housing Successor's preceding four Fiscal Years,whichever is greater. The following provides the Excess Surplus test for the preceding four Fiscal Years: Housing Authority of the City of Huntington Beach Page 6 Available Housing Funds— FY 2021/22 LMIHAF Balance FY 2021/22 $21,308,610 (Less)Accounts Receivables (1,644,206) Add: Accounts Payable 2,389 (Less) Notes and Loans (7,931,852) (Less) Land (6,979,847) Available Housing Funds—FY 2021/22 $4,755,095 Limitation on Available Housing Funds FY 2021/22 Greater of: > Base Amount $1,000,000 > Four Years of Deposits FY 2017/18 98,736 FY 2018/19 977,593 FY 2019/20 6,518,471 FY 2020/21 996,679 Total Deposits $8,591,479 Limitation on Available Housing Funds $8,591,479 A total$8,591,479 has been deposited into the account during the previous four fiscal years while the ending available cash balance in the account is$4,755,095. Therefore, the LMIHAF does not have Excess Surplus. XIII. Homeownership The Housing Successor is to provide an inventory of homeownership units assisted by the former redevelopment agency or the Housing Successor that are subject to covenants or restrictions or to an adopted program that protects the former redevelopment agency's investment of moneys from the LMIHAF pursuant to Section 33334.3(f). The inventory for the Housing Successor is as follows: > The following summarizes the current inventory of the Housing Successor's homeownership portfolio: #of Units �'� .;%5,`•r.�,�..� �'e�d�b,,.s +�C..s ."P��� �'. a�_;.�.k3 s'dy. " S"..„ � • "`v• -s.7`�.. ems,... �� � "'.�.. w i+kt,,'}}���}�.-*x��.: ,+�r� � ,�,a*� �¢3��1 Add: Restricted homeownershi• units added b Housin• Successor Jul 1, 2021 throu•h June 30, 2022 0 , car + 4&fir- 3? a'i1:3(74' Housin• Successor Homeownershi• Portfolio as of June 30, 2022 34 > The Housing Successor has not contracted with an outside entity for the management of the ownership portfolio. Housing Authority of the City of Huntington Beach Page 7