City Council
MEETING DATE: 7/22/2015
TITLE:
Title
Approve an ADFAP & SHARP Assistance Program
End
FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
Staff recommends the City Council approve funding in the amount of $75,000 for the re-implementation of two programs- the Assessment District Financial Assistance Program (ADFAP) and Sewer Hook-up Assistance Residential Program (SHARP) for a period of one year, ending June 30, 2016 on a first come first serve basis.
Body
BACKGROUND:
Both ADFAP and SHARP programs provided assistance in the form of a deferred zero-interest loan, to low and moderate income homeowners who are subject to sewer assessments.
During the initial assessment formation meetings, residents were informed of the availability of both ADFAP and SHARP programs through the Redevelopment Agency Housing Fund. No expectation of funds being available indefinitely was conveyed.
Under State Law, residents in the Cove were required to be connected to the sewer by January 1, 2012. Under the City’s Municipal Code, residents in the remainder of the City that are subject to sewer assessments are also required to connect by January 1, 2012 if sewer is available within 200 feet of the residence.
DISCUSSION:
Both Programs commenced in FY 2005/2006. Only pre-2006 home owners were eligible (post January 1, 2006 homeowners would have been aware their property was located in an assessment district and of the requirement that the property be connected to sewer). Assistance was provided on a first-come, first-served basis until funds were exhausted. Participants were required to execute a note and deed of trust, which is recorded against their property to ensure recovery of assistance when the property is sold or refinanced. Assistance was only provided to homeowners who were current on their existing mortgages, had no outstanding late charges and were current on their property taxes or on a property tax payment plan.
Since RDA Dissolution, 02/01/2012, there are no available funds to offer these same programs. CDBG funds are currently committed; however, in 2012 City Council approved the allocation of approximately $224,292 for a revolving loan program specifically for SHARP. The loan program carried a 1% interest rate and the payback period was 3-7 years depending on Income Level qualifications. Significant outreach was done to the community resulting in 10 loans. Generally, there was not a desire by the public to pay back interest or have monthly loan payments for this purpose. Due to lack of interest in the program, the funds were subsequently reallocated to CDGB qualified programs presented annually to the City Council for approval.
The current issue at hand is there are a number of residents requesting assistance from the City for ongoing Assessment District obligations as well as assistance with hooking up to the sewer as required under the City's Municipal Code.
During the June 22, 2015 Council meeting, Council considered a number of options and directed staff to bring back for consideration the ADFAP and SHARP program for a period of one year along with looking to provide an educational forum on reverse mortgages. It is anticipated that the one year period would commence for the FYE 15/16 property tax year. Effective July 1, 2016, the State, via AB2331, reinstates the Senior Citizen and Disable Citizens Property Tax Postponement Program, which will then assist residents in postponing their ad valorem property tax obligation under certain conditions thus freeing up resources to pay the special assessment.
Program Guidelines-
-Assistance in the form of a deferred zero-interest loan, to low and moderate income homeowners who are subject to sewer assessments.
-Only pre-2006 home owners eligible.
-Assistance provided on a first-come, first-served basis until funds are exhausted.
-Participants are required to execute a note and deed of trust, which is recorded against their property to ensure recovery of assistance when the property is sold.
-Assistance only provided to homeowners who are current on their existing mortgages, have no outstanding late charges and are current on their property taxes or property tax payment plan.
-Assistance provided based on the following scale:
|
Income Category |
Agency Assistance |
|
Very Low of AMI (50% and below) |
100% of Costs |
|
Low of AMI (51% to 80%) |
65% of Costs |
|
Moderate of AMI (over 80%) |
20% of Costs |
|
AMI= Area Median Income |
|
--Must be hooked up to the sewer to qualify for ADFAP assistance.
-If not hooked up to sewer, will be required to participate in SHARP.
-May not exceed lifetime cap of $20,000 for Cove, $15,000 for Panorama & 35th Avenue and $10,000 for Dream Homes.
FISCAL IMPACT:
$75,000 for FY 2015/2016 not currently budgeted. Funds would come from the Housing Fund for qualified applicants below 80%AMI. For those applicants above 80% AMI SB341 prohibits the use of Housing Funds therefore the General Fund will be required to fund such assistance.
ATTACHMENTS:
None