HomeMy WebLinkAboutAgenda Statement 1983/11/15 Item 11 COUNCIL AGENDA STATEMENT
Item 11
Meeting Date 11/15/83
ITEM TITLE: Resolution /04-5-7 Approving Joint Powers Agreement for
the Purpose of Financing Home Mortgages
SUBMITTED BY: Community Development Director/s, 5ths Vote: Yes No x )
REVIEWED BY: City Manager
Since January of this year, the City has been involved with the State of
California in order to obtain lower interest rate, long-term mortgages for
first time home buyers within the City. The State of California, through a
lottery allocation, designated certain cities to participate. The City was
supposed to have been involved in an issue as early as spring of this year.
It was not until September of this year, however, that the State informed us
that $10 million in mortgage financing through tax-exempt bonds would be
available to the City. Four developers that have projects have asked to be
included so that their properties could be financed via this method. Through
our conversations with underwriters, the Cities of Livermore and Menlo Park in
northern California and El Dorado County have also been allocated mortgage
amounts from the State. In order to capitalize on issuance costs and lower
interest rates, a Joint Powers Agreement is proposed to facilitate the sale of
bonds and the pooling of resources.
RECOMMENDATION: That the City Council accept the report and authorize the
creation of a Joint Powers Authority and appoint two members of the City
Council to sit on said Authority.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The resolution before you will provide the means in which the City will
participate with El Dorado County and the cities of Livermore and Menlo Park
in a Housing Finance Agency to facilitate the sale of mortgage revenue bonds.
The City of Chula Vista is the lead agency in this undertaking and, therefore,
has the ability to have our Community Development Director as the Secretary
and our Finance Director as the Treasurer and Auditor of the Joint Powers
Authority. All costs associated with the City' s activities will be paid for
out of the bond fund.
In order to evaluate the marketability of the projects proposed for Chula
Vista, Empire Economics was hired to provide a feasibility study. Over $20
million in projects were proposed for the City. As you will recall, last
January developers submitted proposals worth $4 million in project proposals.
The Redevelopment Agency, through its low and moderate income housing account
provided a deposit with the State in order to secure a $10 million
allocation. Since that time, other developments have come forth stating they
wish to be involved. Thus, a total request of $20 million was evaluated by
Empire Economics. These projects will be brought forth to you to be included
Page 2, Item 11
Meeting Date 11/15/83
in the bond issue at another time. It appears, however, that the City will be
able to use all of the $10 million allocated to it. The funds will be
primarily of benefit to moderate income persons purchasing homes between
$75,000 and $90,000 to persons who are first time home buyers, or have not had
a single family home for three years. The income restrictions generally
relate to the median income, with a forecasted range of $27,943 to $41,914 in
annual gross income as defined by the State and Federal guidelines.
Article #3, Internal Organization of the Agreement, states that the Board of
Directors shall consist of eight persons from their respective City
Councils/Board of Supervisors. It is anticipated that there will be two to
three meetings prior to the end of the y ear and several others within the next
nine months. Five members will constitute a quorum, and all expenses for
travel will be paid as a cost of the issue.
FISCAL IMPACT: Not applicable. Costs associated with this issue will be
included in the bond proceeds, and thus reimburseable to the City.
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