HomeMy WebLinkAbout07 QUARTERLY REVOLVING DEFAULT LOAN REPORTAgenda Item
Reviewed
AGENDA REPORT City Manager
Finance Director N/A
MEETING DATE: MAY 15, 2012
TO: JEFFREY C. PARKER, CITY MANAGER AND TUSTIN HOUSING
AUTHORITY EXECUTIVE DIRECTOR
FROM: TUSTIN HOUSING AUTHORITY
SUBJECT: QUARTERLY REPORT FOR AFFORDABLE HOUSING DEFAULT
REVOLVING FUND
SUMMARY
The Tustin Housing Authority ("Housing Authority") has assumed all housing functions of
the dissolved Tustin Community Redevelopment Agency, including the Affordable Housing
Default Revolving Fund's quarterly report. Housing Authority staff has prepared the report,
which details any default activity within the City's Affordable Housing Program and identifies
costs associated with curing any potential defaults.
Receive and file.
FISCAL IMPACT
There is no fiscal impact associated with this Agenda Item.
BACKGROUND
On February 1, 2011, the City Council and Tustin Community Redevelopment Agency
approved a Cooperative Agreement authorizing the creation of an Affordable Housing
Default Revolving Fund to exercise redemption and reimbursement rights and/or option to
purchase rights under the City and Agency's Affordable Housing Programs for units at risk
of foreclosure. The authorization included a requirement that staff provide quarterly
updates on fund activity. On January 17, 2012, the Redevelopment Agency authorized the
transfer of all housing obligations, responsibilities and assets, including the reporting
requirements listed in the Cooperative Agreement, to the Tustin Housing Authority effective
February 1, 2012 conditioned upon dissolution of the Tustin Community Redevelopment
Agency. The attached Affordable Housing Default Revolving Fund Report identifies
Redevelopment Agency expenditures prior to dissolution of the Agency, February 1, 2012,
and the expenditures assigned to the Housing Authority.
Agenda Report
Quarterly Report for Affordable Housing Default
Revolving Fund
May 15, 2012
Page 12
On March 1, 2011, the City Council authorized the purchase of 14554 Newport Avenue #3,
a moderate-income affordable housing unit prior to foreclosure sale of the subject property
and, on May 16, 2011, the City purchased the unit for $362,476.73. The City is currently
paying homeowners' association dues and preparing the unit for listing. When 14554
Newport Avenue #3 is sold to another affordable homeowner, the proceeds from the sale
will become an asset of the Tustin Housing Authority pursuant to the Council's action on
January 17, 2012.
On October 18, 2011, the City Council authorized the City Attorney to pursue exercise of
the City's right of redemption and/or option to purchase the moderate-income unit at 103
Liberty Street. In order to cure the default and avoid losing the home to foreclosure, the
City paid $26,047.96 to Bank of America to reinstate the homeowner's loan. The City
Attorney issued a "Written Demand for Reimbursement" notice to the property owners,
requiring they reimburse the City within 30 days or the City would exercise its option to
purchase their property at the affordable housing price pursuant to the Affordable Housing
Option Agreement. On February 3, 2012, the property owner reimbursed the City for
reinstating their loan.
Although the balance in the Revolving Fund Account was $858,785.31 on
December 31, 2011, the reimbursement received from the property owner increased the
balance in the Revolving Fund Account, as of March 31, 2012, to $884,233.27. The City
Attorney's office is currently assisting with one (1) Notice of Sale and one (1) Bankruptcy.
The Agency has expended $22,386 for City Attorney services associated with monitoring
the status of these units and expenses were billed against FY 2010-2011 and FY 2011-
2012 approved budget accounts: 553-35-00-6016; 556-35-00-6016; and 559-35-00-6016.
The attached report contains the expenditures from the period of January 1, 2011 to
January 31, 2012 for the former Redevelopment Agency and from the period of February 1,
2012 to March 31, 2012 for the Tustin Housing Authority. The Redevelopment Agency
expended $22,386 in Agency funds for Legal Services prior to the Agency's dissolution. The
balance of Agency expenditures prior to dissolution was assigned to the City's Default
Revolving Fund account, 100-00-00-2700. Given the nature of the legal services billing
process, expenditures for February and March 2012 will not likely be recorded until May
2012. All expenditures from February forward will be billed against the Housing Authority.
On April 20, 2012, the California State Controller ordered cities receiving redevelopment
agency assets, including cash funds, after January 1, 2011 to immediately reverse the
transfer and return the applicable assets to the successor agency. The Default Revolving
Fund account was established by transferring Agency funds to this account. As a result of
the State Controller's order, the balance of the Affordable Housing Default Revolving Fund
will be transferred back to the Tustin Housing Authority, as the Housing Successor Agency
and the account will be closed. Staff will be exploring options to create a Default Revolving
Agenda Report
Quarterly Report for Affordable Housing Default
Revolving Fund
May 15, 2012
Page 13
Fund under the Housing Authority in order to cure potential defaults and maintain the City's
supply of affordable housing.
Christine Shingleton
Jerry Craig
Assistant Executive Office Redevelo;�ePrdg �am Manager
Attachment: Affordable Housing Default Revolvihg_f und Report — Period Ending 3/31/12
JAIIIU
LL
0
4-
0
bA
c
0
B
fp
0
C4
ei
O
(n
Lo
00
U)
(3)
0
m
00
M
q
-
6
rn
Lfi
w
Ln
m
N
1-4
C3
L n
r-:
-It
6
0
C4
� 4
06
m
ai
r .
8
Gi
to �D
LD
0
m
�t
Ii
AA.
(14
C)
-t
m
A4
14
m
N
00 V),
rn
in C�
cy�
cq
Ls
V".
�T
1 1 4 A
N Ln
4 A
00
-r-j
r%j ko
rn
4A
11
C4
Q) Qj •
N
cz •
oj
Qj
(n
a
u
en
w
en
W W
m
W
0i
u
-
u
.
0
0) O2 q
m
q
ja
E
C
z
C
3:
r q
Z7
Qj Qj Qj
-j
u
M
Q) QJ
-j
0 0
0
V)
E
CD
m
8
8
CL
Zo
6
F 0 - kq
-r_
I
(A
0
I
-o
t.0
-.0
0
-1 0
t.0
c
t
z
O Ln
r-
0 try
-i
T
0 w
o
W
0
m
6
CD
"D
Ln
m
>.
m
0 Ln
Ln
6
0
6
9
"0'
Ln
6
m
LA
M c
I
Ln
co
1
Ln
o
o
0
4�
L
LA n
ro C:
Ln
0
cy
op
-, -: 1
m
r � *r,
r�
0
0
ro
0
Cl
t
3
(A
U)
L C�
n
�
r,
P,
(A
Ln
Ln
co
Ln
F,
1 � 1
F,
C �
t:
2
t
Ln
Ln
Ln
o
a
w
"a
I
Ln
C:>
m
t
a
� Ln
a
�o
9
9
t
c
-a
Qj
9
Qj
m
U- u
c
c
0
0
m
,
:3 U
Li-
c
z
8
CD
IV
m
LL
U-
LL
9
9
cr
1 5;
LL
.
9
c
tg
C7
m -0
1
m
1
1
0
0
C)
C)
a
a
0
CD
w
CL
C)
U .
uy
C
C
LZ
<
< w
<
c
r-
0
W
<
m
C:
-0
-1
-4
:3
Lj-
=)
LL
U.
U rq
u
LL
Ll-
0
Ll-
to
to
w
to
to
Qj
M
CL
x
uj
0
CL
C. 0
a.
>
>
-6
0
-Fo
CL
>
>
>
LA
c
(1) L A
0
I
Ln
c
—
0
—
0
—
0
—
m
co
rn
>
aj
>
Qj
x
cn
C:
OJ
a)
(
0
a) Ln
::3
F-
Ln
U
F-
IX
W
ig
U Ln
l
c 1
4
w
41
Ln
V)
Ln
c
V)
Z
j_- Ln
V)
z
M
75
Z c
N 0 :3
LL
CS
c
:3
U-
0 LL Z
(n
t
t
as
Q)
x
uj
tO
t0
t6
M
M
fu
W
:3
Or
D
M
cl
12
-C
-C
t
L
t
t
0
(14
0
N
:3
=1
1 -4
4
0
LL
0
LL
0
Lj- I
0
LL 1
—
:3
Va
.0
0
LL
0
L
aj
M
q
-i
0
r-4
-4
Q) -4
=3 0
0
0
c C)
N
0
N
c 0 �
N
C)
V '
-C C�
N
C: 0
(N
0 tio
E
In
'A
<
i <
m
0
2 0
0
0
0
0
m
�o
�o
Z
0
0
'A
Q)
U
(U
C:
V)
u
"
c
m
.
U
3:
y
Qj
c o
3:
0
Gi
i>
-
0
0)
0
4
V-4
to
V)
(U
A
0
E
(1)
V-4 E
V-4
i0
c0
is
76
0
fu
t6
w
E
0
N 0
w
w
w
to
w
V-4
m M
4*
m
O
u
W
Q)
rn
im
M
ci
w
cu
41
0
(D
w
0
>
N a
fA
(D
m
E
.r_
u
m
u
Ln
-0
1D
-0
1D
C
rn
rn
0
cL
cli
m
cn
CL
c CL
c
w
rl
1-4
w
zr
1-4
Ln
-1
w
z
w
z
x z
W
LU
Ln
Ln
Ln
Ln
Ln
Ln
1-4