Item 13 Staff Report Housing Conservation ProgramCOUNCIL AGENDA ,
DATE: 4/17/95
ITEM NO. I3
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
DATE: April 13, 1995
TO: MAYOR AND TOWN COUNCIL
FROM: TOWN MANAGER
SUBJECT: HOUSING CONSERVATION PROGRAM
RECOMMENDATION:
Informational report; no action required.
BACKGROUND:
The Housing Conservation Program (HCP) assists very low and low income Los Gatos residents rehabilitate
their homes. Income eligible residents may receive either a low interest installment loan, deferred loan or
grant. Housing rehabilitation includes home repairs, earthquake and other safety improvements and
accessibility modifications.
The Program began in 1976. To date, it has assisted over 320 households with rehabilitating their homes.
After the 1989 Loma Prieta earthquake, over 50 households were assisted with obtaining State and American
Red Cross loans and grants in excess of $3,000,000.
The Program meets Town objectives: very low and low income Los Gatos residents are assured a safe and
comfortable living environment; the existing housing stock is maintained; and the Town's General Plan
housing objectives are furthered.
DISCUSSION:
The HCP receives annual funding through the Community Development Block Grant (CDBG)Program. CDBG
funds are allocated to three housing related activities program: Rehab Project Support, Housing Rehabilitation
Loans, and County Rehab Specialist. Funds can be reprogrammed to other CDBG activities. Eliminating the
HCP will not result in general fund savings.
PREPARED BY: Regina A. Falk
Community Sr-i
RAF:SG:dr A
CSD18:A:\CNCLRPTS\HCPRPT
Attachment: 1. HCP Loan Revenues
'rector
Revised: 4/13/95 2:25 pm
Distribution: Jim Lewis, 156 Vista Del Monte, Los Gatos 95032
Jo Bartlett, 166 Oak Hill Way, Los Gatos 95030
Reviewed by: Attorney Clerk Finance Treasurer
COUNCIL ACTION/ACTION DIRECTED TO:
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: HOUSING CONSERVATION PROGRAM
DATE April 13, 1995
a. Housing Program: Rehab Project Support
The Community Services Department's Housing Program receives an annual CDBG
allocation of about $45,000. This grant is used to offset staffing costs. The Housing
Program's $46,490 budget also includes a $1,490 general fund allocation. Housing staff
provides services including: processing new rehab projects from outreach to rehab
completion; managing and monitoring 43 existing loans (totalling $1.3 million); providing
information on low income housing in Los Gatos; assisting with the Below Market Price
Program; assisting with affordable housing projects/programs; and managing special housing
grant/loan funds (i.e. Red Cross and CALDAP).
b. Housing Rehabilitation Loans
Funding for Housing Rehabilitation Loans includes annual CDBG allocations and program
income. Loan revenues (monthly payments and loan payoffs) are deposited into a Bank of
the West revolving account and are "recycled" for loans to future clients.
Attachment 1 shows a projected balance for loans and grants at approximately $5,000 at the
end of FY 1995-96. If the fund balance is greater than projected than dollars can be
reprogrammed to other CDBG activities, except public services. Over the years, funds have
been transferred to affordable housing developments such as Open Doors. Community
Services and Planning departments staff are developing a Redevelopment Agency required
plan to address the need for more affordable housing in Los Gatos.
c. County Rehab Specialist
The HCP Program currently uses County Rehab Specialist services for home inspections,
work write-ups, contractor bidding, and rehab monitoring. In the last round of CDBG grant
negotiations, the County and the eight Urban County Pool cities agreed that the County could
charge for rehab services. A flat fee of $15,000 was established for FY 1994-95 and FY
1995-96. Town Staff is exploring the possibility of providing these services in house.
The HCP annual goal is to provide eight loans or grants. In the early 1990's, the Program exceeded this goal
by assisting households with earthquake repairs. Staff used CDBG funds to leverage other funds. As a result
of staff efforts, over $3,000,000 was allocated to Los Gatos households from the State and the American Red
Cross. Over the past two years, the demand for rehabilitation has decreased. Possible reasons for lower
demand include: 1.) many homes with deferred maintenance were rehabilitated soon after the earthquake;
2.) the slower growing local economy may be deterring people from incurring debt; and, 3.) lower commercial
interest rates in the past two years.
Staff continues to actively market the HCP. For FY 1994-95, staff developed a new flyer and did a bulk
mailing to local churches and over 500 Los Gatos senior households. Flyers have been posted at Town Hall.
Presentations were made to several senior organizations. A public service announcement was placed on
Channel 6, KCAT. Newspaper ads were placed in the Los Gatos Weekly twice in November and twice in
April.
Through informal surveys, we have been able to gauge that customers are generally satisfied with the HCP.
In situations where the owner and contractor are in dispute, both the program coordinator and rehab specialist
make every effort to mediate and reach a mutually beneficial resolution. There are some inherent tensions
given the nature of housing rehabilitation: it disrupts daily living patterns, affects households most valuable
assets, and scheduled work can be delayed due to weather or availability of materials.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: HOUSING CONSERVATION PROGRAM
DATE April 13, 1995
ENVIRONMENTAL ASSESSMENTS:
This is not a project as defined under CEQA, and no further action is required.
FISCAL IMPACT:
CDBG funds are allocated to three separate housing functions: 1.) Community Services Department's
Housing Program, which pays for staff; 2.) Housing Rehabilitation Loans; and, 3.) County Rehabilitation
Services.
FY 1994-95
Projected
FY 1995-96
1. COMMUNITY SERVICES DEPARTMENT HOUSING PROGRAM
CDBG: Project Support $45,000 $45,000
General Fund: BMP Support $ 1,490 $ 1,490
2. HOUSING REHABILITATION LOANS $38,000 $18,250
(See attachment 1)
3. COUNTY REHABILITATION SERVICES
$15,000 $15,000
Cuts in this area will result in reduced staff and housing services. Housing Program Funds pay for the
Community Services Director (.10 FTE), Community Services Program Coordinator (.65 FTE), Administrative
Secretary (.05 FTE) and Secretary I (.05 FTE) salaries.
Housing Rehabilitation Loans reflect the annual funding to provide loans and grants. Reprogramming of these
funds will affect the Programs' ability to provide loans/grants
Rehab Loan funds can be transferred to other CDBG activities, except public services which has a cap. An
allocation to County Rehabilitation Services is required since Los Gatos uses these services as part of the
HCP. For the current fiscal year and FY 1995-96, the County is charging a flat fee for these services.
Community Services is exploring the possibility of providing these services in house.
REVENUE/EXPENSE
Housing Rehab Project Support; 8030-45050 - $45,000 (Expense 8030)
Housing Rehab Loans; 218-45040 - $23,000 (Loans 218-12300; Deferred Loans 218-12310)
County Rehab Specialist - $15,000
Affordable Housing fund; 218-45040 - $10,000 (Expense 2218)
Attachment 1
HCP LOAN REVENUES
ACCOUNT BALANCES:
Bank of West (2/28/95) $30,679.72
HCD-218-45040 $35,000.00
(*)Rehab Loans LG-00-51 $6,792.00
Rehab Loans LG-93-51 $66,781.76
Rehab Loans LG-94-51 $85,892.00
Rehab Loans LG-95-51 $38,250.00
Encumbered ($9.500.00)
TOTAL $253,895.48
(*) Rehab Loans line items (LG-00-51 through LG-95-51) represent lines of credit available through
the County CDBG Program.
REHAB GOAL:
Our goal for the period 1/1/95 to 6/30/96 is to do 3 grants and 8 loans. Grants average $3,000
and loans average $30,000.
3 grants ($3,000) = $9,000
8 loans ($30,000) = $240,000
11 total projects $249,000
FUNDS STATUS:
Loan & grant funds available
Expenditure based on rehab goal
Surplus/Funds for affordable housing
$253,895.48
($249.000.00)
$4, 895.48
We plan to use surplus funds for affordable housing projects.
HCPREV.XLS Page 1 4/12/95
April 17, 1995
Los Gatos, California
THIRD QUARTER BUDGET REPORT CONT.
Motion by Mrs Lubeck, seconded by Mr. Blanton, that Council accept the third quarter budget
report. Carried unanimously.
HOUSING CONSERVATION PROGRAM (13.16)
Jim Lewis, 156 Vista Del Monte, suggested that the Town use a portion of the housing set aside
funds for fulfilling ADA requirements.
Council consensus to accept and file the informational report on the housing conservation
program.
LANDSCAPING/LOS GATOS WOODS/TRAFFIC AUTHORITY/RESOLUTION 1995-45 (17.40)
Andrew Palmisano, 702 More Ave, addressed the use of taxpayers money for funding an
individual homeowners association needs. Staff pointed out that this was designated landscaping
funds provided for within the Traffic Authority's budget.
Motion by Mrs Lubeck, seconded by Mr. Attaway, that Council adopt Resolution 1995-45
entitled, RESOLUTION OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN
MANAGER TO EXECUTE AGREEMENTS FOR ADDITIONAL ROUTE 85 LANDSCAPING.
Carried unanimously.
COMMITTEE REPORTS (27.10)
Brazilian Host Committee
Randy Attaway spoke of the Brazilians celebrating the 1994 World Cup win and their request
to visit Los Gatos during this celebration. The Brazilian General Consul asked that we
coordinate the event with them.
ABAG Conference
Linda Lubeck noted her attendance at the spring conference and the anticipated topic of
Constitutional Revision which is on the agenda.
Transit District
Joanne Benjamin spoke of the District's proposal for transit shelters to bear advertisement
notices which may violate the Town's sign ordinance
ADJOURNMENT
Motion by Mr. Blanton, seconded by Mrs. Benjamin, that this evening's meeting be adjourned
at 10:35 p.m. Carried unanimously.
TC:D7:MM041795
ATTEST:
Marian V. Cosgrove
Town Clerk
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