06 Staff Report - Budget Adjustment to Program 2218COUNCIL AGENDA REPORT
DATE: November 11, 2003
TO: MAYOR AND TOWN COUNCIL
FROM: DEBRA J. FIGONE, TOWN MANAGER
SUBJECT:
MEETING DATE: 11/17/03
ITEM NO. (p
AUTHORIZE BUDGET ADJUSTMENT TO PROGRAM 2218, HOUSING
CONSERVATION PROGRAM - LOANS
RECOMMENDATION:
Authorize the following budget adjustment to Program 2218, Housing Conservation Program -
Loans:
Account
FY 2003-2004
Adopted Budget
FY 2003-2004
Proposed Budget
2218-72504
Home Rehab Transfer to SCC
$50,000.00
$235,000.00
PURPOSE:
The purpose of the recommended action is to ensure that sufficient funds are available for Housing
Conservation Program loan activity during FY 2003-04. The recommended action will appropriate
funds from an existing balance of funds set aside for use only as loan capital.
BACKGROUND:
Since 1976, the Town has provided home rehabilitation loans to hundreds of Los Gatans through its
Housing Conservation Progam. Funded through the federal Community Development Block Grant
(CDBG) program, the Housing Conservation Program provides low -interest loans to income -eligible
homeowners, for home repairs which correct housing code violations, alleviate overcrowding,
minimize potential fire hazards, and improve health, safety, accessibility, and home security
PREPARED BY: REGINA A. FALKNER 6 r
Community Services Director 1
N:1CSDITCRPTS\Budget Adj 4 HCP.wpd
Reviewed by: Q5 S Assistant Town Manager kA7 Town Attorney Clerk ;,Finance
Community Development Revised: 11/11/03 9:44 am
Reformatted: 5/30/02
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE BUDGET ADJUSTMENT TO PROGRAM 2218, HOUSING
CONSERVATION PROGRAM - LOANS
November 11, 2003
conditions. Examples of eligible work include electrical and plumbing repairs, new flooring, heating
and weatherization improvements, kitchen and bathroom remodels, painting, roof repair, room
expansion or addition, structural reinforcement, and repair of termite damage.
Program eligibility is based on federal income limits by household size. In order to qualify, a
household's annual income must not exceed 80% of the current median income in Santa Clara
County, as determined by the federal Department of Housing and Urban Development. For example,
a family of four must have an annual income no greater than $82,100; a two -person household may
not exceed an annual income of $65,650.
Loans up to $100,000 are available to qualified homeowners, at an interest rate of three percent.
Loan repayment may be amortized or deferred for up to 15 years, and all loans are secured by a Deed
of Trust.
The Housing Conservation Program offers a practical solution to lower income residents, particularly
seniors and others on fixed incomes, faced with a list of costly home repairs. The program helps
residents stay in their homes when they might otherwise be forced to sell, and contributes to the
general safety and attractiveness of Los Gatos neighborhoods.
The Town's Housing Conservation Program is administered by the Santa Clara County Housing and
Community Development Department, under an annual contract. The Town provides the loan
capital from its balance of CDBG funds, and the County manages the repair projects and services
the loans.
DISCUSSION:
The Town made an initial transfer of CDBG funds to the County in FY 2002-2003, in the amount
of $200,000, to be used as loan capital. A total of $105,000 in loans was disbursed during the year,
leaving a balance of $95,000. Three new loans have been approved for FY 2003-2004, with a total
value of $230,000. The County has sent a request to the Town for the transfer of $135,000 in new
loan capital, to cover the balance of approved loans. This request is not attached to this report, as
it contains confidential information regarding the Los Gatos homeowners who have been approved
for loans.
Beginning Balance
$200,000
Loans Disbursed
$105,000
Ending Balance
$95,000
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE BUDGET ADJUSTMENT TO PROGRAM 2218, HOUSING
CONSERVATION PROGRAM - LOANS
November 11, 2003
FY 2003-2004
Beginning Balance
(Ending Balance from FY 2002-2003)
$95,000
New Loans Approved
$230,000
Current Balance
($13 5,000)
During the Town's FY 2003-2004 budget development process, the County was not able to provide
an estimate of the amount of new loan capital it would need for the new fiscal year. A best guess
of $50,000 was budgeted. Thanks to increased publicity about the program, and the efforts of
County staff, more loans were approved than were budgeted for. Therefore, staff recommends that
the budget for this item be increased, for the $135,000 in new loan funds that are needed, plus an
additional $100,000 for any new loans that may be approved during the balance of the fiscal year,
for a total of $235,000, as follows:
Account
FY 2003-2004
Adopted Budget
FY 2003-2004
Proposed Budget
2218-72504
Home Rehab Transfer to SCC
$50,000.00
$235,000.00
The Town has already transferred to the County the adopted budget amount of $50,000. If the
requested budget amendment is approved, the Town will make a second transfer to the County, for
the balance amount of $85,000, a total of $135,000. The remaining $100,000 will be held until any
additional new loans are approved, and a new transfer request is received from the County.
CONCLUSION:
Staffrecommends that Council authorize the proposed budget adjustment to Program 2218, Housing
Conservation Program - Loans.
ENVIRONMENTAL ASSESSMENT:
The recommended action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The Housing Conservation Program is fully funded by federal Community Development Block Grant
funds. No General Fund monies are affected. If the requested budget adjustment is approved, the
additional loan monies will be taken from the Town's balance of CDBG funds, which totaled
$1,144,573.31 as of July 1. These CDBG funds must be used for housing -related activities for
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE BUDGET ADJUSTMENT TO PROGRAM 2218, HOUSING
CONSERVATION PROGRAM - LOANS
November 11, 2003
income -eligible households, per federal CDBG program regulations.
Distribution:
Charles Chew, HCD Program Manager, County of Santa Clara Office of Affordable Housing, 1735
North First Street, Suite 265, San Jose, CA 95112
RAF:jlm
MEETING DATE: 11/17/03
ITEM NO. 6
DESK ITEM
COUNCIL AGENDA REPORT
DATE: November 11, 2003
TO: MAYOR AND TOWN COUNCIL
FROM: DEBRA J. FIGONE, TOWN MANAGER
SUBJECT: AUTHORIZE BUDGET ADJUSTMENT TO PROGRAM 2218, HOUSING
CONSERVATION PROGRAM - LOANS
This Desk Item responds to Council inquiry regarding the recommended budget adjustment.
1. According to United States census data, more than 2,900 Los Gatos households are income
eligible to participate in the program. It is not clear from an initial viewing of the census data what
portion of these reside in owner -occupied housing. It is probably reasonable to assume that at least
1,000 households may be eligible for the Program.
2. More applications have been received and approved than originally anticipated. The increased
activity is partially the result of increased publicity. The Program has been publicized regularly in
the Town's newsletter. We have also specifically targeted Seniors: the Town's Senior Center has
publicized the Program through its newsletter and the Senior Coordinator makes referrals, as
appropriate. Program information has also been provided to the Senior Consortium. Increased
activity is also the result of County Staff efforts in the area of follow-up and other customer service
areas.
3. Loan payments received from Program participants are recorded in a "revolving fund". It is these
revenues that will be used to cover the budget adjustment. If $235,000 is spent this year, the fund
will have a remaining balance of approximately $426,000 that can be drawn upon in future years.
Additionally, a portion of future grant allocations to the Town can be earmarked for the Program.
PREPARED BY: REGINA A. FALK r,!
Community Servic:�1ri'� ector
N:\CSD\TCRPTS\Budget Adj 4 HCPdeskitem.wpd
Reviewed by: Assistant Town Manager Town Attorney Clerk Finance
Community Development Revised: 11/17/03 12:57 pm
Reformatted: 5/30/02