HomeMy WebLinkAboutAgenda Packet 2018_04_10April 10, 2018City Council Agenda
A. RESOLUTION OF THE HOUSING AUTHORITY OF THE
CITY OF CHULA VISTA APPROVING MULTIFAMILY
MORTGAGE REVENUE BOND POLICIES
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA ADDING CHAPTER 19 (HOUSING
AUTHORITY FEES) TO THE MASTER FEE SCHEDULE
AND ESTABLISHING FEES RELATED TO HOUSING
AUTHORITY BOND ISSUANCES
17-05602.17-0560
Development Services Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required. Notwithstanding the foregoing, the activity qualifies
for an Exemption pursuant to Section 15061(b)(3) of the California
Environmental Quality Act State Guidelines. This activity is also exempt
from review under the National Environmental Policy Act as no federal
funding is involved in this action.
Environmental Notice:
Authority adopt resolution A and Council adopt resolution B. Staff Recommendation:
ITEMS REMOVED FROM THE CONSENT CALENDAR
PUBLIC COMMENTS
Persons speaking during Public Comments may address the Council on any subject matter
within the Council’s jurisdiction that is not listed as an item on the agenda. State law generally
prohibits the Council from discussing or taking action on any issue not included on the agenda,
but, if appropriate, the Council may schedule the topic for future discussion or refer the matter
to staff. Comments are limited to three minutes.
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April 10, 2018City Council Agenda
PUBLIC HEARINGS
The following item(s) have been advertised as public hearing(s) as required by law. If you wish
to speak on any item, please fill out a “Request to Speak” form (available in the lobby) and
submit it to the City Clerk prior to the meeting.
A. ORDINANCE OF THE CITY OF CHULA VISTA
AMENDING CHULA VISTA MUNICIPAL CODE, SECTION
19.58.022 (ACCESSORY SECOND DWELLING UNITS);
CHAPTER 19.04 (DEFINITIONS); CHAPTER 19.20
(AGRICULTURAL ZONE); CHAPTER 19.22 (RESIDENTIAL
ESTATES ZONE); CHAPTER 19.24 (SINGLE-FAMILY
RESIDENCE ZONE); CHAPTER 19.26 (ONE- AND
TWO-FAMILY RESIDENCE ZONE); CHAPTER 19.28
(APARTMENT RESIDENTIAL ZONE); AND CHAPTER 19.48
(PLANNED COMMUNITY ZONE) WITH REGARD TO
ACCESSORY DWELLING UNITS (FIRST READING)
B. ORDINANCE OF THE CITY OF CHULA VISTA
AMENDING CHULA VISTA MUNICIPAL CODE CHAPTER
3.32 (RESIDENTIAL CONSTRUCTION TAX) TO EXEMPT
ACCESSORY DWELLING UNITS AND JUNIOR
ACCESSORY DWELLING UNITS FROM THE RESIDENTIAL
CONSTRUCTION TAX AND AMENDING CHAPTER 17.10
(PARKLANDS AND PUBLIC FACILITIES) TO WAIVE
ASSESSMENT OF PARKLAND ACQUISITION AND
DEVELOPMENT FEES FOR ACCESSORY DWELLING
UNITS AND JUNIOR ACCESSORY DWELLING UNITS
(FIRST READING)
18-00843.18-0084
Development Services Department Department:
The Accessory Dwelling Unit Ordinance Amendments qualify for a
Class 3 Categorical Exemption pursuant to Section 15303 (New
Construction or Conversion of Small Structures) of the California
Environmental Quality Act State Guidelines. In addition, the Accessory
Dwelling Unit Ordinance Amendments qualify for an Exemption
pursuant to Section 15061(b)(3) of the California Environmental Quality
Act State Guidelines. The Fee Waiver Ordinance Amendment is not a
“Project” as defined under Section 15378 of the California
Environmental Quality Act State Guidelines; therefore, pursuant to State
Guidelines Section 15060(c)(3) no environmental review is required.
Environmental Notice:
Council place the ordinances on first reading. Staff Recommendation:
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April 10, 2018City Council Agenda
CITY MANAGER’S REPORTS
MAYOR’S REPORTS
COUNCILMEMBERS’ COMMENTS
CITY ATTORNEY'S REPORTS
CLOSED SESSION
Announcements of actions taken in Closed Session shall be made available by noon on
Wednesday following the Council Meeting at the City Attorney’s office in accordance with the
Ralph M. Brown Act (Government Code 54957.7).
CONFERENCE WITH LEGAL COUNSEL REGARDING
EXISTING LITIGATION PURSUANT TO GOVERNMENT
CODE SECTION 54956.9 (d)(1)
A. Name of case: Jason Jones v. City of Chula Vista, et al.,
San Diego Superior Court, Case No. 37-2017-33222
-CU-PO-CTL
B. Name of case: Connie Romero v. City of Chula Vista, et
al., San Diego Superior Court, Case No. 37-2017-815
-CU-PO-CTL
18-01404.18-0140
ADJOURNMENT
to the Regular City Council Meeting on April 24, 2018, at 5:00 p.m., in the Council Chambers.
Materials provided to the City Council related to any open-session item on this agenda are available for
public review at the City Clerk’s Office, located in City Hall at 276 Fourth Avenue, Building A, during
normal business hours.
In compliance with the
AMERICANS WITH DISABILITIES ACT
The City of Chula Vista requests individuals who require special accommodations to access, attend,
and/or participate in a City meeting, activity, or service, contact the City Clerk’s Office at (619)
691-5041(California Relay Service is available for the hearing impaired by dialing 711) at least
forty-eight hours in advance of the meeting.
Most Chula Vista City Council meetings, including public comments, are video recorded and aired live
on AT&T U-verse channel 99 (throughout the County), on Cox Cable channel 24 (only in Chula Vista),
and online at www.chulavistaca.gov. Recorded meetings are also aired on Wednesdays at 7 p.m. (both
channels) and are archived on the City's website.
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April 10, 2018City Council Agenda
NOTICE OF REVIEW AND PENDING APPROVAL OF FINAL MAP
In accordance with California Government Code Section 66458(d), notice is hereby given that the City Engineer has
reviewed and, immediately following this City Council meeting of April 10, 2018, will approve the following final map:
Chula Vista Tract No. 09-03 Otay Ranch Millenia Genesis Lots 7, 8, "F:, and "G", a copy of which is available for
public viewing at the Office of the Chula Vista City Clerk.
Specifically, the City Engineer has caused the map to be examined and has made the following findings:
(1) The map substantially conforms to the approved tentative map, and any approved alterations thereof and any
conditions of approval imposed with said tentative map.
(2) The map complies with the provisions of the Subdivision Map Act and any local ordinances applicable at the
time of approval of the tentative map.
(3) The map is technically correct.
Said map will be finalized and recorded, unless an interested party files a valid appeal of the City Engineer ’s action
to City Council no later than 2:00 p.m., 10 calendar days from the date of this City Council meeting. A valid appeal
must identify the improper/incorrect finding and the basis for such conclusion.
If you have any questions about the map approval findings or need additional information about the map or your
appeal rights, please feel free to contact Boushra Salem, Principal Civil Engineer, at (619) 409-5483.
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City of Chula Vista
Staff Report
File#:18-0092, Item#: A.
PRESENTATION OF QUARTERLY EMPLOYEE RECOGNITION RECIPIENTS
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City of Chula Vista
Staff Report
File#:18-0122, Item#: B.
EMPLOYEE SERVICE RECOGNITION HONORING STAFF WITH MILESTONE SERVICE ANNIVERSARIES
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City of Chula Vista
Staff Report
File#:18-0106, Item#: C.
PRESENTATION OF A PROCLAMATION TO PUBLIC WORKS DIRECTOR RICK HOPKINS,
PROCLAIMING FRIDAY, APRIL 27, 2018 AS ARBOR DAY IN THE CITY OF CHULA VISTA
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City of Chula Vista
Staff Report
File#:18-0121, Item#: D.
PRESENTATION OF A PROCLAMATION TO BRIAN HIATT-ALEU FOR SPECIAL RECOGNITION
OF THE BOYS 2005 REBELS SOCCER CLUB FOR WINNING NUMEROUS CHAMPIONSHIPS
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City of Chula Vista
Staff Report
File#:18-0123, Item#: E.
PRESENTATION OF A PROCLAMATION PROCLAIMING APRIL 8 THROUGH APRIL 14, 2018 AS
NATIONAL PUBLIC SAFETY TELE-COMMUNICATORS WEEK IN THE CITY OF CHULA VISTA,
POLICE DISPATCHER SARAH MC DONALD ACCEPTING ON BEHALF OF THE
TELECOMMUNICATION OPERATORS
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City of Chula Vista
Staff Report
File#:18-0116, Item#: 1.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING
RESOLUTION 2018-004 TO REMOVE THE ELECTION OF MEMBER OF THE CITY COUNCIL,
REPRESENTING DISTRICT 1, AND CITY ATTORNEY FROM THE JUNE 5, 2018 GENERAL
ELECTION AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
On January 16, 2018, the Council adopted Resolution No. 2018-004 to set June 7, 2016 as the date
of the General Municipal Election to elect a Mayor, two members of the City Council, representing
Districts 1 and 2, and a City Attorney. Adoption of the attached resolution removes the District 1 City
Council position and the City Attorney position from the General Municipal Election since only two
candidates for each seat qualified for placement on the ballot, and appropriates funds to account for
the two remaining seats and the ballot measure that was previously approved by Council. The two
qualified candidates for District 1 and for City Attorney will be placed on the ballot for the November
runoff election, pursuant to Chula Vista Charter section 300.A.3.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical
change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
On January 16, 2018, the City Council adopted Resolution 2018-004 to call for a June 2018 General
Municipal Election to elect a Mayor, two members of the City Council, representing Districts 1 and 2,
and a City Attorney, each for a full term commencing December 2018. Only two candidates for each
District 1 and City Attorney submitted sufficient nomination papers and qualified for placement on the
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District 1 and City Attorney submitted sufficient nomination papers and qualified for placement on the
ballot. In accordance with Section 300.A.3 of the Chula Vista Charter, it is recommended that the City
Council remove the District 1 City Councilmember and the City Attorney positions from the June 2018
ballot. Because there are only two qualified candidates per seat, election to the positions will occur at
the November runoff election.
Section 300.A.3 of the Chula Vista Charter provides, in part, that if only two qualified candidates from
a Council district file nomination papers to participate in the general municipal election for that district,
no general election shall be held for the office of City Councilmember for that district and the two
candidates shall be candidates at the run-off election (November) for that office. The Charter applies
this same process to the office of City Attorney. [Charter sections 503(c) and 300.E].
Based on initial estimates from the Registrar of Voters for the conduct of the General Election for
Mayor, Council Districts 1 and 2, and City Attorney, approximately $160,000 was budgeted for the
election. Subsequently, the Registrar of Voters has revised their estimate, which now includes the
two elected positions and the ballot measure previously approved by the Council. The current
estimate for the election is now $200,000. Adoption of the resolution also appropriates $40,000 to
the City Clerk’s election budget account for the increased cost.
Related Background Information
The Charter provisions providing that the top two candidates proceed to a run-off election in June
were adopted by the electorate in 2012. The first elections held under the new provisions were in
2014. That election was for the purpose of electing the Mayor, City Councilmembers for Districts 1
and 2, and the City Attorney. With the exception of the City Attorney, there were more than two
candidates for each office in that election. There was only one qualified candidate for the office of
City Attorney. As a result, the City Attorney election was held in November.
In 2016, City Council seats for Districts 3 and 4 were up for election. There were only two qualified
candidates for the District 3 seat. Accordingly, the June election for District 3 was canceled and the
candidates vied in the run-off election in November. At that time, we advised the Council of certain
ripple effects of cancelling a June election for a particular seat or seats. Those matters are still
relevant and are restated below for the Council’s consideration.
Write-in Candidates
The first ripple effect is the impact on write-in candidacy. Since the June election for District 1 and the
City Attorney will not be held, there can be no opportunity for write-in candidates in June. As for
November, the Charter, as amended in 2012, does not directly address whether write-in candidates
would be permitted in the November run-off election. The plain language of the Charter does,
however, clearly indicate that the November election was intended to be a run-off election between
the top two vote-getters, only. As such, the City Clerk and the City Attorney agree that overall
structure of this system suggests that write-in candidates in November were not intended to be
allowed. The City Council could propose a Charter amendment or adopt an ordinance supplementing
the Charter if it wishes to address this issue with respect to future elections. Staff may bring this item
forward for City Council consideration if a clarifying ordinance becomes necessary.
Campaign Contributions
Another ripple effect that may arise in light of the cancellation of these elections relates to campaign
contributions. Chapter 2.52 of the City’s Municipal Code places certain limits on campaignCity of Chula Vista Printed on 4/5/2018Page 2 of 3
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File#:18-0116, Item#: 1.
contributions. Chapter 2.52 of the City’s Municipal Code places certain limits on campaign
contributions for City election contests. It provides that a candidate may receive up to $330.00 from a
person and $1,120 from a Political Party committee (both limits are adjusted biannually) in each of
the general and special election contests. It further provides that a candidate may not solicit funds
more than eleven months prior to an election contest and may not solicit funds for the special
(November) election prior to the holding of the general (June) election. The Code does not address
what occurs if the June election is cancelled. Based on this ordinance, the contributions that have
been raised by the candidates to-date, could only have been raised for the June election contest.
Candidates are permitted to solicit funds from the same source for each election contest. Thus, our
interpretation of the ordinance is that the candidates for the cancelled elections should be permitted
to solicit funds for the November election contest once the June election is cancelled, even if the
source of the funds has already contributed to their campaign. In the future, we will be bringing
forward proposals for an updated campaign contribution ordinance for the Council’s consideration
which will address this and other issues.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2,
section 18702.2(a)(11), is not applicable to this decision for purposes of determining a
disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal.
Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Councilmember, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. While conducting the
election is not specifically associated with one of the City’s strategic goals, carrying out this important
function in an ethical, impartial, transparent manner aligns with the City’s goals of Operational
Excellence and Connected Community.
CURRENT YEAR FISCAL IMPACT
While final election costs will not be known until after the election is conducted, the updated estimate
from the Registrar of Voters for the General Election is approximately $200,000 for the positions of
Mayor and District 2 City Councilmember, and for the ballot measure. The current budget for the
election is $160,000. Staff recommends an appropriation of $40,000 at this time to account for the
increased costs. Funds will be identified to offset the costs.
ONGOING FISCAL IMPACT
There are no ongoing costs associated with adoption of this resolution.
ATTACHMENTS
None
Staff Contact: Kerry Bigelow
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RESOLUTION NO. 2018-___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AMENDING RESOLUTION 2018-004 TO REMOVE THE
ELECTION OF MEMBER OF THE CITY COUNCIL, REPRESENTING
DISTRICT 1, AND CITY ATTORNEY FROM THE JUNE 5, 2018
GENERAL ELECTION AND APPROPRIATING FUNDS THEREFOR
WHEREAS, on January 16, 2018, in accordance with the provisions of the Chula Vista
Charter and State law, the City Council, through Resolution No. 2018-004, called a General
Municipal Election to be held on June 5, 2018 for the purpose of electing a Mayor, two Members
of the City Council, representing Districts 1 and 2, and a City Attorney, each for the full term of
four years, commencing in December 2018; and
WHEREAS, only two candidates submitted sufficient nomination papers and qualified
for placement on the ballot for the General Municipal Election for the positions of Member of
the City Council, District 1, and City Attorney; and
WHEREAS, Chula Vista Charter Sections 300.A.3, 300.E., and 503(c) provide that in
this situation no General Municipal Election shall be held for the positions and, instead, the
qualified candidates should be considered for election at the November runoff election; and
WHEREAS, in accordance with the Chula Vista Charter and State law, the two qualified
candidates for the position of Member of the City Council, District 1 and the two qualified
candidates for the position of City Attorney shall therefore be placed on the ballot for the
November runoff election; and
WHEREAS, the updated cost estimate from the Registrar of Voters is $200,000 for
conducting the General Municipal Election for the positions of Mayor and Member of the City
Council, District 1, and the ballot measure previously approved by Council, which is
approximately $40,000 more than the amount budgeted for the election.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
as follows:
SECTION 1. All of the foregoing recitals are true and correct.
SECTION 2. This resolution amends City Council Resolution No. 2018-004 to remove
the Member of the City Council, District 1 and the City Attorney positions from the ballot for the
Tuesday, June 5, 2018 General Municipal Election because only two candidates for each seat
submitted sufficient nomination papers and qualified for placement on the ballot for those
positions. In accordance with the Chula Vista Charter and State law, the General Municipal
Election for the Member of the City Council, District 1 and City Attorney called for in
Resolution No. 2018-004 will not be held and the two qualified candidates for each position shall
be placed on the ballot for the November runoff election.
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SECTION 3. The City Clerk is hereby directed to provide a copy of this resolution to the
Registrar of Voters.
SECTION 4. The City Clerk shall certify to the passage and adoption of this resolution
and file it with the City’s original resolutions.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
appropriates $40,000 to the City Clerk’s budget for elections to account for the increased costs of
conducting the election.
Presented by Approved as to form by
Kerry K. Bigelow, MMC Jill D.S. Maland
City Clerk Assistant City Attorney
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City of Chula Vista
Staff Report
File#:17-0560, Item#: 2.
A. RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF CHULA VISTA
APPROVING MULTIFAMILY MORTGAGE REVENUE BOND POLICIES
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADDING CHAPTER
19 (HOUSING AUTHORITY FEES) TO THE MASTER FEE SCHEDULE AND ESTABLISHING
FEES RELATED TO HOUSING AUTHORITY BOND ISSUANCES
RECOMMENDED ACTION
Authority adopt resolution A and Council adopt resolution B.
SUMMARY
The Chula Vista Housing Authority’s Multifamily Mortgage Revenue Bond Program (“Bond Program”)
has been utilized since 1993 to support the development of affordable housing in the City of Chula
Vista (“City”). In accordance with new requirements set forth in California Debt Limit Allocation
Committee (“CDLAC”) Regulation Section 5031(c), governing the issuance of debt for Bond
Programs, issuers, such as the Housing Authority, must submit to CDLAC for their approval bond
issuance and post-compliance policies. Tonight's action is the adoption of such policies for the
administration of the Housing Authority’s Bond Program.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality
Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to
Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. This activity is also
exempt from review under the National Environmental Policy Act as no federal funding is involved in
this action.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical
change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines,
the activity is not subject to CEQA. In addition, notwithstanding the foregoing, the Director of
Development Services has also determined that the activity qualifies for an Exemption pursuant to
Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no
environmental review is required. This activity is also exempt from review under the National
Environmental Policy Act as no federal funding is involved in this action.
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File#:17-0560, Item#: 2.
BOARD/COMMISSION RECOMMENDATION
With the current vacancies on the Housing Advisory Commission, the Commission was unable to
consider the Bond Program Policies due to a lack of quorum.
DISCUSSION
Federal and state legislation authorizes issuance of mortgage revenue bonds (“Bonds”) by local
governments to finance the development, acquisition, and rehabilitation of multifamily housing rental
projects by a private property owner/developer. The Chula Vista Housing Authority is an issuer of
these tax-exempt mortgage revenue Bonds for eligible multifamily housing rental projects in the City
of Chula Vista (City).
The Chula Vista Housing Authority’s Multifamily Mortgage Revenue Bond Program (Bond Program)
has been utilized since 1993 to support the development of affordable housing in the City. Since
inception, the Bond Program has issued over two hundred million dollars in tax-exempt bonds to
provide below-market rate financing for affordable housing developments. As of June 2017,
approximately $155,200,000 of multifamily mortgage revenue bonds are outstanding. Since its
inception, the Bond Program has provided financing for development of 2,343 total residential units of
which 1,521 units were for lower income households.
With interest on the Bonds exempt from federal and state taxation, Bonds provide below market
financing for qualified rental projects. The Bond Program is able to provide below-market rate
financing because interest earnings on bonds issued for eligible projects are excluded from federal
gross income and is therefore exempt from federal income taxation. Tax exempt bonds generate a
lower interest rate than comparable taxable bonds; therefore, allowing borrowers to borrow at a lower
rate. Additionally, projects issuing Bonds are eligible for allocations of federal 4 percent low-income
housing tax credits. Equity from the sale of tax credits can provide a significant portion of the
financing necessary to develop affordable housing (approximately 30 percent of the development
cost).
Under federal and state law, to be eligible for bond financing, multifamily housing projects must set
aside at least 20 percent of their units at affordable rents by households earning no more 50 percent
of Area Median Income (AMI) ($45,450 for a family of four during 2017). Alternatively, a minimum of
40 percent of the units may be restricted at 60 percent AMI ($54,550 for a family of four during 2017).
Due to the combined requirements of state, local, and federal funding sources, projects financed
under the Bond Program are normally deed restricted as affordable for 55 years and often provide
deeper affordability levels than the minimum levels required under the Bond Program.
For the issuance of Bonds, the Housing Authority must acquire an allocation of the State’s available
tax-exempt debt from the California Debt Limit Allocation Committee (CDLAC), as the State Bond
Authority. Pursuant to CDLAC Regulation 5031(c), adopted in December 2016, all issuers must
submit for CDLAC’s review and approval policies setting forth the issuer’s bond issuance procedures
and post-issuance compliance procedures.
The attached Bond Program Policies proposed to respond to requirements of CDLAC for the
adoption of bond policies consistent with its regulations and in compliance with Internal Revenue
Service (IRS) requirements. Additionally, adoption of Bond Policies will provide efficiency in
administration of the Bond Program and program clarity to staff and the public to remain a useful
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incentive in the production of affordable housing within the City.
The proposed policy will apply only to new project applications received after the proposed approval
by the Housing Authority, and to bond projects in process; however, not to bond projects already
issued.
While the Housing Authority acts as the issuer of the bonds, there is no direct liability of the City or
the Housing Authority in connection with the issuance or repayment of the Bonds. There is no pledge
of the City’s or Housing Authority’s faith, credit, or taxing power and the Bonds do not constitute
general obligations of the City or Housing Authority. The bonds are special, limited obligations of the
Housing Authority payable solely from private revenue sources, such as project cash flows and equity
payments, and secured by a first deed of trust on the Bond-financed property.
To ensure that the Bond Program is self-supporting with the Project Owner responsible for the
payment of all costs of issuance and other costs and repayment of the obligations, the proposed
Bond Policies reflect the Housing Authority’s past practice of collection of fees for the preparation,
issuance, administration and ongoing compliance and monitoring of bonds for private projects that
have a qualified public benefit, consistent with CDLAC’s regulations and guidance and in compliance
with IRS requirements.
Consistent with the Bond Policies, three administrative fees are proposed as an addition to the City’s
Master Fee Schedule, as Chapter 19 (Housing Authority Fees) to achieve full and equitable cost
recovery for bond issuance, administration, compliance and monitoring services required:
§TEFRA Hearing
As required by Section 147(f) of the Internal Revenue Code, in compliance with the Tax Equity
and Fiscal Responsibility Act of 1982 (TEFRA), a public hearing (the “TEFRA hearing”)either by
an elected official or body of elected officials of the applicable governmental entity following
reasonable public notice is required for qualified private activity bonds to provide a reasonable
opportunity for interested individuals to express their views, either orally or in writing, on the
issuance of bonds and the nature of the improvements and projects for which the bond funds will
be allocated. The cost of service associated with preparing for and holding a TEFRA Hearing is
estimated to total $3,500, as calculated in Attachment 2. Full cost recovery of the estimated cost
of service is recommended. This non-refundable fee shall only be charged in those instances
where the City or Chula Vista Housing Authority, at its discretion, will not serve as the issuer of the
bonds. No separate TEFRA hearing fee shall be charged if the City or Housing Authority serves
as the Issuer of the bonds.
§Issuance Fee
The Housing Authority provides its services to a limited segment of the public, more specifically
housing developers, to obtain unique services and substantial economic benefits available to
them only under the State of California’s tax-exempt bond program to issue the debt, not the least
of which may be financing at interest rates substantially lower than conventional financing interest
rates, if such rates are available, and/or the ability to obtain financing without equity compensation
to the lender. In consideration of the Housing Authority’s application to the State and preparation
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to the lender. In consideration of the Housing Authority’s application to the State and preparation
and issuance of multifamily housing revenue bonds for the financing of such private projects that
have a qualified public benefit and economic benefit to the Project Owner, the Housing Authority
charges issuance fees. The cost of such services associated with preparing, applying and issuing
multifamily housing revenue bonds on behalf of a private project varies based on the size of the
original principal amount. As a result, a fee that escalates based on the principal amount is
appropriate. A fee of 20 basis points (0.20%) of the total original principal amount of the bonds
(both tax-exempt and taxable) to be issued is recommended. This fee is consistent with fees of
other conduit issuers allowed to issue bonds, as shown in Table 1 below. This fee is inclusive of
the TEFRA Hearing fee and consistent with fees of other conduit issuers allowed to issue bonds.
§Annual Administrative Fee
The cost of service associated with the ongoing administration and monitoring costs (e.g. financial
and site monitoring, and annual reporting) of Housing Authority issued Bonds required throughout
the Qualified Project Period and until expiration of the CDLAC Compliance Period, reportable to
CDLAC is set by size of the project as follows:
o 50 units or less $13,000
o 51 - 199 units $17,000
o 200 or more units $20,500
An analysis of the staff effort and the current fully burdened hourly rates for impacted staff
associated with the ongoing administration, compliance and monitoring of bonds for private
projects was conducted to determine the cost of service associated with providing these
administrative services, as calculated in Attachment 2. Such analysis concludes that the fees
proposed do not exceed the estimated reasonable cost of providing the associated services.
Table 1 - Comparative Summary of Bond Fees
Agency Application Fee/
Issuance Deposit
Issuance Fee (Basis Points
“bps”)
Annual Administrative
Fee
TEFRA Hearing
Chula Vista Housing
Authority
$3,500 (applied to
issuance fee)
20 bps ($15,000 minimum)$13,000 < 51 dus
$17,000 51-199 dus
$20,500 200+ dus
$3,500 only if NOT the
Issuer
San Diego Housing
Commission
$3,000 (applied to
issuance fee)
25 bps 12.5 bps $10,000
minimum
Included in Issuance Fee
California Municipal
Finance Agency
(CMFA)
$2,500 (applied to
issuance fee)
$37,500 + 5 bps 18.75 bps
> $20 million
5 bps $4,000 minimum
25% shared with Local
Municipality
Included in Issuance Fee
California Statewide
Communities
Development
Authority (CSCDA)
$2,500 (applied to
issuance fee)
$40,000 + 12 bps 20 bps
($15,000 minimum) > $20
million
5 bps $5,000 minimum Included in Issuance Fee
CalHFA $5,000 (applied to
issuance fee)
$15,000 or 20 bps (greater
of) < $20 million $40,000 +
1 bp > $20 million
$7,500 Additional Fee for
Scattered Sites
Included in Issuance Fee
City of Chula Vista Printed on 4/5/2018Page 4 of 5
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File#:17-0560, Item#: 2.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2 (a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100,
et seq.).
Staff is not independently aware, and has not been informed by any Housing Authority member, of
any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The development and
provision of quality affordable housing for low and moderate-income families supports the Economic
Vitality goals as it expands the availability of housing opportunities for all economic segments of the
community. With 57 percent of Chula Vista households earning less than the U.S. Department of
Housing and Urban Development’s area median income, the development of affordable housing
addresses the City’s Connected Community goals as it provides housing to meet residents’ needs
and priorities.
CURRENT YEAR FISCAL IMPACT
Staff costs associated with the preparation of this staff report and for the Chula Vista Housing
Authority Multifamily Mortgage Revenue Bond Policies are offset by administrative fees charged for
ongoing administration and monitoring costs of its bond issuances.
ONGOING FISCAL IMPACT
Bond financing is a self-supporting program with the Project Owner responsible for the payment of all
costs of issuance and other costs and repayment of the bonds. All costs related to the issuance of
the bonds will be paid from bond proceeds or profits. The bonds will be secured by the project and
will not constitute a liability to or obligation of the City of Chula Vista or Housing Authority.
The Chula Vista Housing Authority will receive compensation for its services in preparing future bond
issuances by charging an issuance fee of 20 basis points (0.20%) of the total original principal
amount of the bonds. Staff costs associated with ongoing monitoring compliance regulatory
restrictions and administration of the outstanding bonds will be funded via an annual administrative
fee set at $13,000 for projects with 50 units or less, $17,000 for projects of 51 - 199 units and
$20,500 for projects with 200 or more units.
ATTACHMENTS
1. Chula Vista Housing Authority Multifamily Mortgage Revenue Bond Policies
2. Cost of Service Analysis
Staff Contact: Leilani Hines, Housing Manager
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RESOLUTION NO. __________
RESOLUTION OF THE HOUSING AUTHORITY OF THE
CITY OF CHULA VISTA APPROVING MULTIFAMILY
MORTGAGE REVENUE BOND POLICIES
WHEREAS, in 1993, the City Council of the City of Chula Vista (City Council) by its
Resolution 1993-17021, established the Chula Vista Housing Authority (Housing Authority) to
develop, finance and own low income housing;
WHEREAS, since 1993, the Housing Authority has exercised its powers as set forth in
California Health and Safety Code Section 34350 et. seq. to issue bonds in support of the
development and financing of affordable housing in the City of Chula Vista (City);
WHEREAS, the California Debt Limit Allocation Committee (CDLAC) was created to
set and allocate California’s annual debt ceiling, and administer the State’s tax-exempt bond
program to issue the debt through its adopted CDLAC Regulations;
WHEREAS, on December 15, 2016 adopted new regulations contained in CDLAC
Regulation Section 5031(c) requiring submission by all applicants seeking an allocation of the
annual State ceiling of debt issuance of their bond issuance and post-issuance compliance
policies;
WHEREAS, the Housing Authority desires to continue to utilize the issuance of
multifamily mortgage revenue bonds to support the development and financing of affordable
housing for low income households within the City;
WHEREAS, staff has prepared the Chula Vista Multifamily Mortgage Revenue Bond
Policies consistent with CDLAC’s regulations and guidance and in compliance with IRS
requirements for the Housing Authority’s consideration for submission and approval by CDLAC
upon its adoption; and,
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the activity is not a “Project” as defined under Section 15378 of
the California Environmental Quality Act State Guidelines; therefore, pursuant to State
Guidelines Section 15060(c)(3) no environmental review is required,
2018-04-10 Agenda Packet Page 22
Resolution No.
Page 2
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Chula
Vista Housing Authority, that it (1) approves the Chula Vista Multifamily Mortgage Revenue
Bond Policies consistent with CDLAC’s regulations and guidance and in compliance with IRS
requirements, in the form presented as Exhibit 1, with such minor modifications as may be
required or approved by Legal Counsel, a copy of which shall be kept on file in the Development
Services Department, and (2) and authorizes and directs the Housing Authority Director or
Assistant Director to submit the Bond Policies to CDLAC.
Presented by
Kelly G. Broughton, FASLA
Director of Development Services
Approved as to form by
Glen R. Googins
Housing Authority Counsel
2018-04-10 Agenda Packet Page 23
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ADDING CHAPTER 19 (HOUSING
AUTHORITY FEES) TO THE CITY’S MASTER FEE
SCHEDULE AND ESTABLISHING FEES RELATED TO
HOUSING AUTHORITY BOND ISSUANCES
WHEREAS, the California Debt Limit Allocation Committee (CDLAC) was created to
set and allocate California’s annual debt ceiling, and administer the State’s tax-exempt bond
program to issue the debt through its adopted CDLAC Regulations;
WHEREAS, private activity bonds, specifically multifamily mortgage revenue bonds, are
a significant funding source to support the development and financing of affordable housing for
low income households and require an allocation of bond authority from CDLAC;
WHEREAS, to receive an allocation of bond authority from CDLAC, a local or state
governmental agency or joint powers authority must submit an application to CDLAC on behalf
of a private project that has a qualified public benefit;
WHEREAS, since 1993, with the establishment of the Chula Vista Housing Authority
(Housing Authority) by the City Council of the City of Chula Vista (City Council) by its
Resolution 1993-17021, the Housing Authority has exercised its powers as set forth in California
Health and Safety Code Section 34350 et. seq. to issue bonds in support of the development and
financing of affordable housing in the City of Chula Vista (City);
WHEREAS, staff has prepared the Chula Vista Multifamily Mortgage Revenue Bond
Policies, inclusive of fees for the administrative costs associated with holding a public hearing in
compliance with the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), preparation of
the bond issuance, and ongoing administration and monitoring costs (e.g. financial and site
monitoring, and annual reporting) required throughout the Qualified Project Period and until
expiration of the CDLAC Compliance Period, consistent with CDLAC’s regulations and
guidance and in compliance with IRS requirements;
WHEREAS, the Housing Authority, in its collection and establishment of fees for the
preparation, issuance, administration and ongoing compliance and monitoring of bonds for
private projects that have a qualified public benefit, provides its services to a limited segment of
the public, specifically housing developers, to obtain unique services and substantial economic
benefits available to them only under the State of California’s tax-exempt bond program to issue
the debt, not the least of which may be financing at interest rates substantially lower than
conventional financing interest rates, if such rates are available, and/or the ability to obtain
financing without equity compensation to the lender;
WHEREAS, an analysis of the staff effort and the current fully burdened hourly rates for
impacted staff associated with preparing, issuing and the ongoing administration, compliance
2018-04-10 Agenda Packet Page 24
and monitoring of bonds for private projects has been conducted to determine the cost of service
associated with providing these administrative services;
WHEREAS, in order to achieve full and equitable cost recovery for bond issuance,
administration, compliance and monitoring services provided, the Council and the Housing
Authority wishes to add Chapter 19 of the City’s Master Fee Schedule, as set forth in Exhibit 1,
attached hereto and incorporated herein by reference as if set forth in full;
WHEREAS, the proposed fees do not exceed the estimated reasonable cost of providing
the associated services;
WHEREAS, Article XIII C of the California Constitution requires a vote of the electorate
to increase any levy, charge, or exaction imposed by a local government, unless specifically
exempted;
WHEREAS, the proposed fees are exempt from the vote requirement per Sections 1(e)(2)
and 1(e)(3);
WHEREAS, the proposed amendments to the Master Fee Schedule Chapter 19 shall
become effective upon adoption of this Resolution by the City Council and the Housing
Authority; and,
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the activity is not a “Project” as defined under Section 15378 of
the California Environmental Quality Act State Guidelines; therefore, pursuant to State
Guidelines Section 15060(c)(3) no environmental review is required,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
and the Chula Vista Housing Authority, that it does hereby amend the City’s Master Fee
Schedule to add Chapter 19 (Housing Authority) to establish administrative fees related to the
Housing Authority Multifamily Housing Revenue Bond financing program as set forth in Exhibit
1 to this Resolution.
Presented by Approved as to form by
Kelly G. Broughton, FASLA Glen R. Googins
Development Services Director City Attorney/Housing Authority Counsel
2018-04-10 Agenda Packet Page 25
MASTER FEE SCHEDULE FEE BULLETIN
Chapter 19 – Housing Authority 19-100General Housing Authority Fees
City of Chula Vista Development Services
276 Fourth Avenue, Chula Vista, CA 91910 March 2018
City of Chula Vista www.chulavistaca.gov 619.585.5600
TEFRA HEARING FEE
Applies to public hearings conducted pursuant to
Section 147(f) of the Internal Revenue Code, in
compliance with the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA). The TEFRA
Hearing Fee shall only be charged if the City or
Housing Authority does not serve as the Issuer of
the subject bonds.
TEFRA Hearing fee, non-refundable ............$3,500
ISSUANCE DEPOSIT & FEE
Issuance Deposit
An issuance deposit shall be collected at the time
of application submission. The deposit is
nonrefundable, unless the Housing Authority or
CDLAC declines the proposed financing. If the
financing proceeds, the issuance deposit is
applied to offset issuance fees at closing.
Issuance deposit...........................................$3,500
Issuance Fee
The Housing Authority charges issuance fees
associated with the application, preparation and
issuance of multifamily housing revenue bonds on
behalf of a Project Sponsor. Issuance fees shall be
assessed based on the total original principal
amount of the bonds (both tax-exempt and
taxable) to be issued, and are inclusive of the
TEFRA Hearing.
Issuance fee .......................20 basis points (0.20%)
Minimum Issuance fee...............................$15,000
ANNUAL ADMINISTRATIVE FEE
An annual fee for the ongoing administration and
monitoring costs (e.g. financial and site
monitoring, and annual reporting) of Housing
Authority issued Bonds required throughout the
Qualified Project Period and until expiration of
the CDLAC Compliance Period, reportable to
CDLAC. Administrative fees shall be assessed on a
dwelling unit (DU) basis.
Annual Administrative Fee
0 – 50 DUs..................................................$13,000
51 – 199 DUs..............................................$17,000
200 or more DUs........................................$21,000
Additional Staff Services............Full Cost Recovery
FULL COST RECOVERY
For all full cost recovery fee items, an initial
deposit shall be collected to cover the City’s full
cost, including overhead, incurred in conjunction
with review and processing as request by the
applicant. Additional funds may be collected, as
requested by applicant. Additional funds may be
collected as required, to cover City costs. Should
the application be withdrawn at any time, the
deposit shall be adjusted to cover the City’s actual
costs, including overhead, up to that time. Any
funds remaining on deposit at the time of the
completion or withdrawal of the application shall
be returned to the depositor, after accounting for
expenses incurred to date.
See Master Fee Schedule Bulletins 1-100 and 1-
200 for additional discussion of full cost recovery
and current hourly rates.
ATTACHMENT 1
2018-04-10 Agenda Packet Page 26
Chula Vista
Housing Authority
Multifamily Mortgage Revenue Bond Policies
The City of Chula Vista expands the supply of affordable housing by issuing multifamily
mortgage revenue bonds through the Chula Vista Housing Authority (“Housing Authority”),
as allocated by the California Debt Limit Allocation Committee (“CDLAC”). Since 1993, the
Housing Authority has issued mortgage revenue bonds to private developers to finance low-
and moderate-income housing for families. Pursuant to CDLAC Regulation 5031(c), as an
Issuer of bonds, the Housing Authority must have written policies setting forth its bond
issuance procedures and post-issuance compliance procedures in conformance with the
governing laws and regulations.
276 FOURTH AVENUE • BLDG C • CHULA VISTA • CA • 91910 • (619) 691-5047 • FAX (619) 585-5698
www.chulavistaca.gov/housing
2018-04-10 Agenda Packet Page 27
Chula Vista Housing Authority
Summary 1
Chula Vista Housing
Authority
Multifamily Mortgage Revenue Bond Policies
Summary
Federal, state, and local legislation authorizes issuance of mortgage
revenue bonds (“Bonds”) by local governments to finance the
development, acquisition, construction and rehabilitation of
multifamily housing rental projects (a “Project” or “Projects”) by a
private property owner/developer, also known as the “Project
Sponsor”. The interest on the Bonds is exempt from federal and
state taxation. As a result, Bonds provide below market financing
for qualified multifamily rental projects located in the City of Chula
Vista (the "City”). This program is administered by the Housing
Authority and uses tax-exempt mortgage revenue bonds (“Bonds”)
issued by the Housing Authority.
There is no direct liability of the City or the Housing Authority in
connection with the issuance or repayment of the Bonds. There is
no pledge of the City’s or Housing Authority’s faith, credit, or
taxing power and the Bonds do not constitute general obligations of
the City or Housing Authority because the security for repayment
of the bonds is limited to Project revenue and other sources
specified in the documentation for the financing of the Project.
Project loans are, in most cases, structured as a real estate loan, with
the obligation to repay the bonds secured by a first deed of trust on
the Bond-financed property. The program is self-supporting with
the owner responsible for the payment of all costs of issuance and
other costs and repayment of the obligations.
Mission
Our mission is to build
strong families and to
strengthen the social
and physical fabric of
the Chula Vista
community by creating
and sustaining decent,
safe and affordable
living environments to
foster stability in the
home and the
neighborhood and
empowering our
diverse residents as
change agents for their
quality of life.
2018-04-10 Agenda Packet Page 28
Chula Vista Housing Authority
Summary 2
The goals of the Bond financing program include:
Preserving and increasing availability of quality affordable rental housing;
Encouraging economic integration within residential neighborhoods; and
Maintaining and enhancing a quality living environment for residents of affordable housing
communities and the surrounding properties.
All Projects requesting mortgage revenue Bond issuance are subject to the
requirements in these guidelines. The Housing Authority reserves the right to make
exceptions, at its sole discretion when deemed necessary.
The Housing Authority guidelines and policies are subject to change.
2018-04-10 Agenda Packet Page 29
Chula Vista Housing Authority
Issuer 3
Issuer
The Chula Vista Housing Authority (the “Housing Authority”) shall be the issuer of all Bonds
financing Projects within the City, except as provided below. Bonds for Projects are intended to be
non-recourse conduit financing in which the Housing Authority or the City will not be responsible for
the repayment of debt.
The Housing Authority and City will consider other issuing agencies as follows:
CSCDA and Other Conduits
Project Sponsors considering the use of any issuers other that the Housing Authority should contact
Housing Authority staff prior to proceeding with the Project. The Housing Authority may agree to the
issuance of Bonds by the California Statewide Community Development Authority (“CSCDA”) or a
similar issuing conduit provided that the Housing Authority is not making a loan or grant to the
Project and the Project is one of multiple projects being financed by the Project Sponsor through such
issuing conduit agency in the same California Debt Limit Allocation Committee (“CDLAC”) round
under a similar financing program so as to result in economies of issuance or financial feasibility of the
projects.
Special Circumstances
Another agency may issue Bonds when merited by special circumstances of the Project and attendant
financing. Where the Housing Authority is not the issuer of Bonds for a Project, it shall be the Housing
Authority’s policy to require the issuer to assume full responsibility for issuance and on-going
compliance of the Bond issue with federal tax and state laws. Where feasible, however, the City of
Chula Vista/Housing Authority shall seek to hold a “The Equity and Fiscal Responsibility Act of 1986”
hearing, better known as the “TEFRA Hearing” for such Project.
2018-04-10 Agenda Packet Page 30
Chula Vista Housing Authority
Public Benefit 4
Public Benefit
Each Project to be financed must demonstrate tangible public benefits to the community in which it
resides before the Housing Authority is willing to act as an issuer for tax-exempt multifamily mortgage
revenue Bonds. These benefits must conform to all federal and state requirements for tax-exempt
multifamily mortgage revenue Bonds.
Affordability for Rental Projects
To ensure a public benefit, Project Sponsors must set aside a minimum number of the units in each
project for lower income households. These units must be rented to, or held available for rent to, very
low-income or low-income tenants. The restricted units must proportionately reflect the mix of all
units in the project, be distributed throughout the project, and have the same floor area, amenities, and
access to project facilities as market-rate units.
To be eligible for tax-exempt financing, Projects must provide a minimum of:
Federal
Twenty percent (20%) affordable to those very low-income households at fifty percent (50%) or
below the Housing Authority Median Income, adjusted for household size
OR
Forty percent (40%) of the units affordable to those low-income households at sixty percent
(60%) or below the Housing Authority Median Income, adjusted for household size.
State
A minimum of ten percent (10%) of the units affordable to those very low-income households at
fifty percent (50%) or below the Housing Authority Median Income , adjusted for household, at
specified rent levels.
Project owners must certify their tenants’ eligibility annually or as otherwise required by the Housing
Authority in the applicable Regulatory Agreement. If a tenant is no longer eligible, the next available
unit (if federal tax credits apply to the project, in the building in which the unit was located) must be
rented to a new eligible tenant and the current tenant’s rent can be raised to a market level. A unit
occupied only by students may not count towards the very low and low-income unit set-aside
requirement.
Affordability definitions are based on the AMI for the County of San Diego as established by the U.S.
Department of Housing and Urban Development. The median income is subject to change annually.
2018-04-10 Agenda Packet Page 31
Chula Vista Housing Authority
Public Benefit 5
Rent Restrictions
For purposes of the Housing Authority’s Bond Program, the maximum rent calculations for those units
required as the minimum set-aside for very low or low-income households and those required by the
adopted CDLAC Resolution may not exceed one-twelfth of 30% of 50% of Area Median Income
(“AMI”) for very low-income households or one-twelfth of 30% of 60% of AMI, adjusted for
appropriate household size, as further defined in Section 50053 of the California Health and Safety
Code. “Appropriate households size” is determined under Section 34312.3 (c)(1)(B) and (c)(2)(B) of the
California Health and Safety Code consistent with Section 42 (g)(2)(C) of the Internal Revenue Code
(the “Code”). Section 42 (g)(2)(C) requires that in calculating rents, occupancy of units is assumed to be
one person in the case of a studio unit, two persons in a one-bedroom unit, three persons in a two-
bedroom unit, four persons in a three-bedroom unit, and five persons in a four-bedroom unit.
Maximum rents are further reduced by a utility allowance for tenant-paid utilities in the amounts
determined by the Housing Authority.
In the event tax-exempt bonds are used with Low-Income Housing Tax Credits, or any public funds,
the more restrictive rents apply. The maximum rent amounts will also apply to the contract rent if
Housing Choice Voucher (HCV) tenants occupy the set-aside units.
Term of Rental and Affordability Restrictions
The Project must remain as rental housing and continuously meet the affordability requirements for the
longest of (a) the Qualified Project Period (as defined in Internal Revenue Code of 1986), (b) such
period as may be required by CDLAC (typically, 55-years from the date of the original issuance), (c) as
long as the Bonds remain outstanding, or (d) such period as may be required, in the opinion of the
City’s or Housing Authority’s Bond Counsel, to meet federal or state law. The City and/or Housing
Authority reserve the right to impose additional affordability restrictions if the City or Housing
Authority determines it is necessary to be competitive in the state allocation process or in compliance
with applicable State laws.
The affordability covenant remains in effect for not less than the agreed upon term, which may
continue beyond the Qualified Project Period. It is intended that the affordability term will remain in
effect beyond the retirement of the Bonds and expiration of any loan agreements.
Projects that are financed with Low-Income Housing Tax Credits or any other public funds will be
required to meet the requirements of TCAC or the more restrictive requirements of the applicable
financing sources.
A Bond Regulatory Agreement (“Regulatory Agreement”) containing the rental and affordability
restrictions will be recorded against the property and must be complied with by subsequent owners, as
the Regulatory Agreement is a covenant that runs with the land. The Regulatory Agreement will be
2018-04-10 Agenda Packet Page 32
Chula Vista Housing Authority
Public Benefit 6
terminated upon expiration of restrictions or in the event of casualty loss or foreclosure, and the
subsequent retirement of Bonds as a result of foreclosure.
Project Sponsors must regularly verify compliance with the affordability terms outlined within the
applicable Regulatory Agreement(s). The Housing Authority reserves the right to impose additional
restrictions.
State law requires advance notice and other requirements upon the termination of the affordability
requirements. Some requirements also place restrictions on the sale of previously affordable housing
projects. In addition, at the conclusion of the required affordability period, the rent of those “in-place”
tenants will continue to be governed by the applicable affordability restriction, so long as those tenants
continue to live in the development.
2018-04-10 Agenda Packet Page 33
Chula Vista Housing Authority
Priority Projects 7
Priority Projects
Projects must consist of complete rental units, including kitchens and bathrooms. Projects are
considered on a priority basis. They include Projects that will be instrumental to neighborhood turn-
around, provide significant public benefit and preserve existing affordable housing.
Affordable housing priorities:
Preservation
Preservation of projects which are currently publicly subsidized, but at risk of losing affordability
restrictions due to sale, termination, or public subsidy reductions.
Recapitalization
Substantial rehabilitation of projects with affordability restrictions, including Projects that have reached
the expiration of their 15-year tax credit compliance period, but only in conjunction with new mortgage
revenue bonds, tax credits, and/or other affordable housing resources to the greatest extent feasible.
Balanced Communities Housing
New construction to meet the Balanced Communities Policy of the City of Chula Vista’s Housing
Element.
Rehabilitation and new production
Substantial rehabilitation of other projects and new construction of affordable housing including low-
income, mixed income, or workforce housing, with preference to projects in census tracts where the
poverty rate is less than 30 percent; projects that meet revitalization goals.
2018-04-10 Agenda Packet Page 34
Chula Vista Housing Authority
Loan Terms & Conditions 8
Loan Terms & Conditions
The terms and conditions of mortgage revenue bond loans shall be in accordance with CDLAC and
TCAC requirements and the requirements of the lending institution specific to the Project. The
following represents general terms.
Maximum/Minimum Loan Amount
The bond issuance and related loan amounts for individual projects are based upon project costs, interest
rates, revenues available to pay debt service and the appraised value of the Project being financed. The
Housing Authority may consider multiple properties as part of a single bond financing on a case by
case basis.
Interest Rate
The effective Mortgage Rate is the aggregate of the applicable bond rate and the add-on fees charged
under the program, such as lender, trustee, issuer’s fee, etc. The bond rate, for fixed rate bonds, is
determined at the time of a bond sale and the resulting mortgage is typically below conventional
mortgage rates.
Loan Term
The Project loans generally reflect a 30-year amortization schedule, although the bond maturity may be
shorter.
Affordability Term
The affordability term is the lesser of 55 years or the longest affordability period of other financing
sources, and is enforced through a recorded regulatory agreement
2018-04-10 Agenda Packet Page 35
Chula Vista Housing Authority
Application Requirements 9
Application Requirements
The Housing Authority requires each Project Sponsor complete a Housing Authority
application. Applications must be submitted for all Projects seeking Bond financing where
the Housing Authority will act as issuer or where the Housing Authority will sponsor or hold a TEFRA
hearing. This includes all new money issuances requiring an allocation of bond authority from the
California Debt Limit Allocation Committee (CDLAC), new 501(c)(3) issues, and refunding of existing
bond issues.
Applications must be submitted at least 90 days before the relevant CDLAC application deadline to
allow enough time for Housing Authority review and approval. Applications that do not need CDLAC
approval must be submitted at least 90 days before the desired Bond closing date. Any information
provided in the application must be considered public information by State law.
Chula Vista Affordable Housing Application
Relocation Plan, if applicable – As required by CDLAC regulations (Section 5211 “Tenant
Relocation”) if low-income tenants will receive a rent increase exceeding five percent (5%) of their
current rent, then a relocation plan is required to address economic displacement. The relocation
plan should be consistent with the Uniform Relocation Assistance and Real Property Acquisition
Policy Act (42 U.S.C. 61).
Project Sponsor Qualifications, Experience and Performance
Project Sponsors, or its general partners, including administrative and managing general partners, or a
principal in each, are required to have previous experience in the development and ownership of
multifamily rental affordable housing projects. Housing Authority staff will review and approve the
qualifications of the Project Sponsor and all partners in the ownership entity.
As part of the Affordable Housing Application, Project Sponsors are required to submit:
Proposed or executed organizational documents of the Project Sponsor and ownership entity,
including a detailed description of the role of each, if separate entities, throughout the regulatory
period of the Project; and
Evidence of successfully participating in at least two projects over ten units in size and subject to a
recorded regulatory agreement for at least three years prior to the application.
The Housing Authority may require evidence projects have maintained positive operating cash flows
and that all required reserves have been funded throughout the ownership period.
Project Sponsors who are unable to meet qualifications and experience requirements will be required to
partner with an entity that does have the necessary experience.
2018-04-10 Agenda Packet Page 36
Chula Vista Housing Authority
Application Requirements 10
The Housing Authority will NOT consider an application from a Project Sponsor if the following
conditions exist:
Failure to use an allocation from CDLAC;
Out of compliance with or in default of the terms of any other City/Housing Authority
financings or loans.
Bonds & Tax Credits
Due to Internal Revenue Service (IRS) limitations applicable to the fees charged by issues of tax-exempt
bonds where the bond purchaser and the tax credit investor are the same or related entities, the
Housing Authority will not issue bonds for Projects where the tax credit investor is all the same or a
related entity to the bond purchaser. Exceptions may be granted on a case-by-case basis, at the
discretion of the Housing Authority.
2018-04-10 Agenda Packet Page 37
Chula Vista Housing Authority
The Process 11
The Process
Application
Applications must be submitted for all Projects seeking Bond financing where the Housing
Authority will act as issuer or where the Housing Authority will sponsor or hold a TEFRA
Hearing. Housing staff will review the application for feasibility. The Housing Authority reserves the
right to require an independent study of any proposed Project, with all associated costs to be borne by
the Project Sponsor.
Determination of Readiness
In its review of the submitted application, Housing staff shall determine if the project is in a state of
sufficient “readiness” to proceed with the CDLAC application process. This includes the status of the
Project in terms of the development process. All Projects must be in compliance with the City’s land
use requirements and adopted plans. In general, a Project will be deemed “not ready” if the
administrative or discretionary planning approvals will not be completed by the time of the CDLAC
application.
Issuance Deposit
At the time of application, the Project Sponsor must pay an “Issuance Deposit” of $3,500 to fund
preliminary costs incurred by the Housing Authority and its consultants. The remaining balance of the
Issuance Fee shall be paid upon the closing of the Bonds.
The Issuance Deposit is nonrefundable, unless the Housing Authority declines the proposed financing.
If the financing goes forward, the fee will be applied to offset the Issuance Fee as a required cost of
issuance at Bond closing. The Issuance Deposit may be waived by the Housing Authority Director or
his designee.
The Housing Authority Director or his designee may issue a waiver of the issuance deposit upon
written request by the Project Sponsor along with evidence or other information establishing payment
of such fee would impact the financial feasibility of the Project. The Housing Authority Director may
approve, partially approve or deny such waiver within 10 business days of such request by providing
written notification to the Project Sponsor.
Project Sponsor’s Development Team
Project Sponsors must submit a Disclosure Statement, identifying of all parties authorized to negotiate
on behalf of the development entity, and identification of the development team responsible for the
Project and credentials provided for the development team. The development team must include team
members with a successful record of accomplishment in developing at least one affordable rental
housing project of the type and scale proposed. Bonds should be placed with investors who are
experienced in municipal securities investing and analysis or real estate credit underwriting.
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Chula Vista Housing Authority
The Process 12
To the extent that consultants/contractors will be providing services on behalf of a Project Sponsor
related to the requirements of these Policies, the Project Sponsor shall provide the Housing Authority
with a written statement describing their relationship with the consultant/contractor and any rights the
consultant/contractor has to income and obligations generated from any proposed bond issuance
activity.
Project Sponsors must not have a record of violation of Fair Housing and Employment Practice laws or
regulations or of affordability clauses in recorded regulatory agreements of the City or other housing
agencies or of discrimination. The Housing Authority shall approve each team member proposed by
the borrower and reserves the right to require an independent study of the Project, at the sole cost of
the Project Sponsor.
Housing Authority Bond Counsel & Financing Team
The Housing Authority shall reserve the right to select and approve the municipal advisor, underwriter
(if applicable), and bond counsel for the financing. The Housing Authority’s municipal advisor,
underwriter, and bond counsel shall be selected as provided for by the City’s Charter and attendant
Municipal Code and City requirements. Bond counsel and the municipal adviser specifically represent
the interests and concerns of the Housing Authority and the City in ensuring the integrity of the bond
transaction. The Project Sponsor will reimburse these costs at bond closing.
The Project Sponsor may, at its own expense, add additional members to the finance team to represent
its interests.
Housing Authority Municipal Advisor
The municipal advisor for each transaction will prepare a feasibility study considering the economics of
the financing, including: evaluation of the financial strength of the project; assumptions regarding
income and expense; sources of security bonds in addition to a mortgage on the project; the Project
Sponsor’s financial situation and experience in operating and managing multifamily rental projects;
marketability of the bonds; and rights and resources of parties to the transaction in the event of default.
Further, the municipal advisor will provide finance advice on all relevant issues to best protect the
interests of the Housing Authority and the City.
Housing Authority Bond Counsel
Bond counsel will prepare the necessary legal documentation for the bonds, including provisions
regarding compliance with any applicable continuing disclosure requirements, provide and opinion
regarding compliance with any applicable continuing disclosure requirements, provide an opinion
regarding the validity of the bonds and their tax-exempt status (if applicable), and provide legal advice
on relevant issues to best protect the interest of the Housing Authority and the City, including but not
limited to the project monitoring requirement for federal tax, State Law and CDLAC purposes.
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Chula Vista Housing Authority
The Process 13
Bond Underwriter/Remarketing Agent/Private Placement Purchaser
The Project Sponsor shall select the construction and permanent lender/bond purchaser and the
method of selling bonds for a given transaction subject to the requirements set forth herein and the
approval of the Housing Authority. Except as provided in these Policies the Housing Authority will
not allow a bond transaction where the tax credit investor is also the bond purchaser or a related party
thereto. The practice of allowing the Project Sponsor to propose the lender and bond structure is
intended to create an incentive for qualified financial firms to actively work the Project Sp onsor to
structure and present feasible financing proposals that meet program requirements.
In the event the Project Sponsor has not identified a proposed financing structure for a given
transaction, the Housing Authority will select an underwriter, lender or private placement purchaser
through a request for proposals process.
Bond Trustee/Fiscal Agent
The Housing Authority shall select the Bond Trustee or fiscal agent (a financial institution designated
by the Housing Authority as the custodian of funds and official representative of bondholders).
Housing Authority Consideration
In consideration of an application to CDLAC for a Bond allocation and the issuance of Bonds by the
Housing Authority, the City and the Housing Authority must complete certain actions.
Inducement Resolution
A Bond inducement resolution (“Inducement Resolution”) will be drafted and approved by the
Housing Authority. This is a conditional expression through the public record of the Housing
Authority’s “official intent” to issue Bonds for a Project in order to induce others to provide project
financing and is required for tax-exempt financing under Treasury Regulation Section 1.150-2(e).
Adoption of the inducement resolution establishes, through the public record, the date from which
project costs incurred may be determined to be eligible for financing under the Program with proceeds
of tax-exempt bonds. Additionally, the Inducement Resolution authorizes the filing of an application
to CDLAC on behalf of the Project Sponsor. Adoption of the Inducement Resolution does not represent
any commitment by the Housing Authority, City, or the Project Sponsor to proceed with the financing.
The Housing Authority retains absolute and unfettered discretion over the issuance of Bonds through
adoption of a resolution authorizing such issuance.
Adoption of the inducement resolution does not authorize any subordinate financing by the Housing
Authority of the City. Furthermore, the adoption of the inducement resolution shall not be construed
to signify the Project complies with the planning, zoning, subdivision and building laws and
ordinances of the City or suggests that the Housing Authority or the City will grant any such approval,
consent or permit that may be required in connection with the development of a given project.
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Chula Vista Housing Authority
The Process 14
TEFRA Hearing and Approval
In accordance with the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 and Section 147(f) of
the Internal Revenue Code of 1986, the issuance of Bonds must be approved by representatives of the
governmental unit with jurisdiction over the area in which the project is located. The TEFRA Hearing
will be conducted as a public hearing by the City Council on a date specified in a notice published at
least 14 days in advance of the TEFRA hearing in a newspaper of general circulation within the City.
The purpose of the public hearing is to provide an opportunity for interested persons to express their
views on the proposed Bond issuance and on the nature and location of the Project.
City’s Disclosure
As a related entity of the City, the Housing Authority will adhere to the City’s Debt Issuance Policies
(City Council Policy 220-05) as it may be amended from time to time, which applies to publicly offered
bonds. The Housing Authority will present offering statements and disclosure documents for review
and approval, as appropriate, by the City.
Final Approval Staff Report
If recommended for financing by CDLAC, the City’s Housing Department and Housing Authority’s
Legal Counsel (including Bond Counsel) will proceed with a recommendation and all necessary
documents for final approval of the Bond issuance by the Housing Authority. The report to the
Housing Authority shall specify the approvals that are recommended, provide background on the
project being financed, describe the financing structure, indicate any exceptions to the City’s
investment policy, and describe the financing documents to be approved. The staff report should
indicate if a separate City or Housing Authority financial assistance is being provided. However, the
terms of that loan should be discussed in a separate staff report which, whenever possible, shall be
submitted for the same agenda. The staff report may note that the Bond issue is contingent upon
certain other approvals and may identify certain issues to be resolved at a later time.
Substantially Final Documents
The Housing Authority shall approve documents that are “substantially final” documents. Documents
are in “substantially final” form if they identify the final security provisions and financing structure for
the transaction. The Housing Authority’s Legal Counsel (including Bond Counsel) shall determine
whether documentation is in substantially final form.
CDLAC Applications for Bond Allocation
Tax-exempt bonds (except 501(c)(3) bonds) require an allocation of Bond authority from CDLAC. To
receive the allocation, the Housing Authority must submit an application to CDLAC on behalf of the
Project Sponsor. The Inducement Resolution authorizes the submission of an application to CDLAC.
The application must demonstrate readiness to proceed with Bond financing and compliance with
applicable CDLAC regulations. Project Sponsors approved by CDLAC to receive an allocation of the
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Chula Vista Housing Authority
The Process 15
State ceiling on qualified tax-exempt bonds must be prepared to use those allocations to issue Bonds
within 90 days. The Project Sponsor must pay all required CDLAC fees in advance of application
submittal.
Housing Authority to File
The Housing Authority is the applicant to CDLAC for each Project to be financed with tax-exempt
Bonds issued by the Housing Authority. Submittal of the application is at the discretion of the Housing
Authority, not the Project Sponsor. The Housing Department will submit all applications to CDLAC
on behalf of Project Sponsors. The Housing Authority will not file a Project Sponsor’s CDLAC
application unless the Project Sponsor had provided the Housing Authority with the CDLAC
Performance Deposit and the Housing Authority’s Issuance Deposit.
Project Sponsor to Prepare Application
Each Project Sponsor shall take responsibility for preparing the CDLAC application for its Project with
input from Housing Authority representatives, including its financing team and bond counsel.
Performance Deposit
At the time of application to CDLAC, the Project Sponsor must deposit with the Housing Authority
one half of one percent (0.05%) of the requested allocation (or such other amount as may be required by
CDLAC) as a performance deposit. The deposit will be returned to the Project Sponsor according to
CDLAC procedures; the deposit is subject to reversion to CDLAC should the financing not close
accordingly. Project Sponsors are advised to read CDLAC regulations.
Bond Sale and Closing
Timing
The Bond sale and closing may commence only after the Housing Authority authorizes the Bond issue,
including the distribution of a Preliminary Official Statement, if applicable.
Investment Agreements
If authorized by the Housing Authority, the Project Sponsor, through its representative, which may
include the underwriter or municipal advisor, may solicit investment agreement providers for the
purpose of reinvesting Bond proceeds and revenues. The investment agreement providers must meet
the Housing Authority’s requirements and the requirements in the Bond resolution and trust indenture
for the Bonds. The Housing Authority’s Bond counsel and the municipal advisor shall review the
investment agreement solicitation forms, the eligible providers, and the investment agreements.
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Chula Vista Housing Authority
The Process 16
Housing Authority Indemnity
The Project Sponsor shall be required to provide to the Housing Authority, as a part of Bond
documentation, an indemnity agreeing to defend and indemnify the Housing Authority, its members,
officers, agents, employees, against any claim, judgment or settlement costs arising out of or involved
in the financing, or in any of the documentation related thereto and the Project and volunteers to
reimburse for all costs, expenses and attorney fees, in issuing the bonds and monitoring the Project.
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Chula Vista Housing Authority
Types of Bonds 17
Types of Bonds
The Housing Authority may issue either tax-exempt or taxable bonds (which includes notes or other
debt instruments), or both. Taxable bonds would generally be issued only in combination with tax-
exempt bonds.
Tax-Exempt Private Activity Bonds
For all tax-exempt financing, bond and related loan amounts will be subject to the procedures of
CDLAC.
Private Activity Bonds
Private activity bonds require an allocation of bond authority from CDLAC. To get the allocation, the
Housing Authority must submit an application to CDLAC on behalf of the Project Sponsor. Submittal
of the application is at the discretion of the Housing Authority, not the Project Sponsor. The Project
Sponsor must pay all required CDLAC fees in advance of application submittal.
501(C)(3) Private Activity Bonds
The Housing Authority may issue bonds described in Section 145 of the federal tax code on behalf of
qualified not-for-profit organizations (“501(c)(3) bonds”). The interest on these 501(c)(3) bonds are tax-
exempt and the bonds do not require an allocation from CDLAC. However, 501(c)(3) bonds cannot be
used with the Low-Income Housing Tax Credit Program (LIHTC).
Taxable Bonds
The interest on taxable bonds is not exempt from either federal or state taxation. These bonds are not
subject to federal volume "cap" limitations and therefore do not require an allocation from
CDLAC. Taxable bonds can be used in combination with LIHTC. Taxable bond issues must meet all
applicable requirements of State law requirements governing the Housing Authority’s authority to
issue bonds and these Policies and Procedures (including rating requirements) and any such added
regulations which may, from time to time, be promulgated by the Housing Authority.
Bond Rating and Credit Enhancement
The Authority requires that bonds for which it acts as issuer have a minimum rating in the “A”
category, or its equivalent, or better by Standard and Poor’s (equivalent Moody’s or other bona fide
agency rating also acceptable), except as noted below, OR the bonds be privately placed with a
“sophisticated investor” as defined by the Housing Authority. The Housing Authority reserves the
right to impose these minimum requirements on bond issues for which the Housing Authority issues
bonds, or the Housing Authority or City holds a TEFRA hearing.
A preferred way of obtaining the required rating on the Bonds is through credit enhancement.
Additional outside credit support may be provided in a number of forms, including a letter of credit
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Chula Vista Housing Authority
Types of Bonds 18
(LOC), mortgage backed security (MBS), collateral pledge, bond insurance, etc., by rated, financial
strong private institutions, such as government sponsored entities (including the Federal National
Mortgage Association [Fannie Mae] or Federal Home Loan Mortgage Corporation [Freddie Mac]),
other government insured mortgage programs, or other qualified credit enhancement providers. The
form of credit enhancement must provide for a minimum rating in the “A” category by Standard and
Poor’s (or the equivalent). The bond rating must be obtained by the closing of the bond issue.
As the primary source of security for the repayment of the bonds, the credit enhancement provider will
review and approve the borrower (credit, financial capability, experience, etc.) and the Project and its
feasibility, including the size of the loan and the terms or repayment, using their own underwriting
criteria.
Fixed rate bonds can be issued without credit enhancement if the proposed financing structure results
in the required minimum rating on the bonds. However, bonds issued without credit enhancement
will only be sold to Qualified Institutional Buyer (“QIBs”) as defined under Rule 144A of the Securities
Act of 1933 and in minimum $250,000 denominations, unless waived by the Housing Authority
Director in his sole discretion.
The Housing Authority Director or his designee may issue a waiver of the requirements of a QIB or
minimum denominations upon written request by the Project Sponsor along with evidence or other
information establishing justification. Upon consultation with its municipal advisor and legal counsel,
the Housing Authority Director may approve, partially approve, or deny such waiver within ten (10)
business days of such request by providing written notification to the Project Sponsor.
Private Placement
The bond rating requirement is waived if the entire bond issue is privately placed with QIBs or
institutional “accredited investors,” (as defined in Sections 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act of 1933 or an entity in which all of the equity owners meet the
requirements of at least one such subsection). It is the Housing Authority’s intent that bonds are
placed with those investors who are experienced in investing in unrated municipal securities and can
conduct their own analysis of real estate credit underwriting.
Bonds must be sold in minimum $250,000 denominations, unless waived by the Housing Authority
Director in his sole discretion. Unless approved by the Housing Authority, the bonds may not be held
at any time by more than 15 investors. The Housing Authority reserves the right to require that a
trustee or fiscal agent participate in privately placed bond transactions.
All purchasers (including purchasers of participation interest in the bonds) would be required to sign
an investor letter (“Investor Letter”) certifying the investor’s sophistication to understand the risk
associated with the purchase of the debt instrument and restricting transfer of the bond issue to other
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Chula Vista Housing Authority
Types of Bonds 19
accredited or qualified investors in denominations of $250,000 and greater. While the note remains
unrated, its transferability will be restricted to QIBs or institutional accredited investors who sign an
Investor Letter and who would represent to the Housing Authority that they are accredited investors
or QIBs, are buying for investment and not for resale, and have made due investigation of the
information they would deem material in connection with the purchase of the bonds.
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Chula Vista Housing Authority
Use of Bonds 20
Use of Bonds
Bonds issued may be used for both construction or rehabilitation and permanent financing. Bond
proceeds may be used for costs of land acquisition (up to twenty-five percent (25%) of tax-exempt bond
proceeds), construction rehabilitation, improvements, architectural and engineering services,
construction interest, loan fees and other capital costs of the project incurred up to sixty days prior to
the bond inducement date.
Limitations on Use of Bonds
Bond proceeds cannot be used to acquire property from a related party, as defined in CDLAC
Regulations Section 5000, to the buyer. No more than 2 percent (2%) of the tax-exempt bond proceeds
can be used to finance costs of issuance, such as the services of the financing team members, rating and
printing of bonds, costs related to bond allocation, etc.
Pursuant to federal tax-exempt requirements, if bonds are used for acquisition and rehabilitation, an
amount equal to at least 15 percent (15%) of the portion of the acquisition costs of the building and
related equipment financed with the proceeds of the bonds must be used for rehabilitation of the
Project.
The loans are assumable upon transfer of the Project with the approval of the credit enhancement
provider or bond purchaser, and the Housing Authority Director or Assistant Director.
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Chula Vista Housing Authority
Costs of Issuance 21
Costs of Issuance
The Multifamily Revenue Bond program is self-supporting. Project Sponsors must pay all costs of
issuance at bond closing, including, but not limited to, bond counsel, underwriter, trustee and
municipal advisor fees, as well as rating agency fees. Any deposits will be credited toward the cost of
issuance at closing.
Only two percent (2%) of the proceeds of a tax-exempt bond issue may be used to pay costs of
issuance. Costs over two percent (2%) must be paid from other sources secured by the Project Sponsor
including, potentially, the proceeds of taxable bonds.
Housing Authority Fees
TEFRA Hearing Fee
The City of Chula Vista shall charge a fee of $3,500 for the administrative costs associated with holding
a TEFRA hearing relating to a Project. The fee shall be payable prior to the date that notice of the
TEFRA hearing is published. No separate TEFRA hearing fee shall be charged if the City or Housing
Authority is issuing the bonds for the Project.
Issuance Fee
The Housing Authority provides its services to a limited segment of the public, more specifically
housing developers, to obtain unique services and substantial economic benefits available to them only
under the State of California’s tax-exempt bond program to issue the debt, not the least of which may
be financing at interest rates substantially lower than conventional financing interest rates, if such rates
are available, and/or the ability to obtain financing without equity compensation to the lender. In
consideration of its application to the State and issuance of tax-exempt bonds for the financing of such
private projects that have a qualified public benefit and economic benefit to the Project Sponsor, the
Housing Authority receives compensation for its services in preparing bond issuances by charging an
up-front fee payable at bond closing. The Issuance Fee shall be in an amount equal to 20 basis points
(0.20%) of the total original principal amount of the bonds (both tax-exempt and taxable) to be issued,
with a minimum fee of $15,000. The Issuance Fee shall not exceed the amount otherwise allowed by
the Internal Revenue Service (“IRS”) for tax-exempt bonds.
An Issuance Deposit of $3,500 will be collected at the time of application submission. The Issuance
Deposit is nonrefundable unless the Housing Authority or CDLAC declines the proposed financing.
The Issuance Fee Deposit is applied to the Issuance Fee at closing. The Issuance Deposit shall be
applied to the Issuance Fee at closing.
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Chula Vista Housing Authority
Costs of Issuance 22
All remaining Issuance Fees will be collected at the closing of the bond issue except for issues requiring
State of California volume cap. Issuance Fees for applications requiring State volume cap will be
collected at the time of application submission to the State.
No other fees will be collected unless and until the project financing closes, with the exception of
projects requiring allocation of State volume cap. For projects requiring volume cap, the entire Issuance
Fee is forfeited if the financing fails once the volume cap has been awarded by the State. If the
application is withdrawn by the Project Sponsor, after submission to the State, but prior to the award of
allocation, all fees except the Issuance Fee Deposit are refundable.
Annual Administrative Fee
The Housing Authority shall charge an annual fee (“Annual Administrative Fee”) to cover its ongoing
costs associated with administration and oversight of outstanding bond issues and monitoring of
regulatory restrictions (e.g. financial and site monitoring, and annual reporting) for bond issues
required throughout the Qualified Project Period and until expiration of the CDLAC Compliance
Period. The Annual Administrative Fee shall be in an amount equal to $13,000 for those Projects with
50 units or less, $17,000 for projects of 51 to 199 units and $21,000 for those projects of 200 units or
more. Under no circumstances shall the Ongoing Issuer Fee exceed any limitation under Section 148 of
the federal tax code.
The first year Annual Administrative fee shall be paid at bond closing. Thereafter, the ongoing Annual
Administrative will be due and payable, without the requirement for any invoice to be delivered to the
Project Sponsor, in advance in equal semi-annual installments by January 15th and July 15th each year.
The Annual Administrative fee will be paid throughout the CDLAC Compliance Period and as
specified within the Regulatory Agreement, even if bonds are fully repaid prior to the expiration of the
compliance period.
The Housing Authority Annual Administrative fee shall be paid “above the line,” i.e., on a parity with
bond debt service and trustee fees. This parity provides the greatest assurance that the Housing
Authority’s fee will be paid, although it may reduce the amount that the Project Sponsor’s lender may
be willing to underwrite.
Additional monitoring fees may be charged for monitoring affordable housing units not governed by
the Regulatory Agreement.
Other Fees
Additional fees may be applicable on a case-by-case basis for certain issues that arise that are outside
the normal bond issuance process. Examples of such fees are, but not limited to, an IRS audit
associated with bond issuance. The Housing Authority shall not be liable for any such fees and the sole
responsibility of these other fees that may arise shall be the sole responsibility of the Project Sponsor.
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Chula Vista Housing Authority
Costs of Issuance 23
For staff time incurred, including legal counsel, the Project Sponsor may be charged for such time
according to the then current hourly full cost recovery rate charged by the Housing Authority or legal
counsel.
Table 1: Summary of Housing Authority Fees
TEFRA Hearing $3,500
Issuance Fee 20 basis points (0.20%) of the total original principal amount of bonds issued
Issuance Deposit $3,500
Annual Administrative
Fee
$13,000 for 50 units or less
$17,000 for 51-199 units
$21,000 for 200 units or more
Other Fees Full cost recovery
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Chula Vista Housing Authority
Refunding/Restructuring/Remarketing 24
Refunding/Restructuring/Remarketing
On occasion, a Project Sponsor may ask the Housing Authority to refund its bonds to lower the interest
rate, to remarket the bonds with a new credit enhancement, and/or to remarket the bonds as fixed rate
bonds. The Project Sponsor will be responsible for all costs and fees related to the refunding.
Optional Refunding
Reasons to Refund Outstanding Bonds
A Project Sponsor may ask the Housing Authority to refund its outstanding bonds for one of several
reasons:
Lower the interest rate on fixed rate bonds at the call date (through the issuance of fixed rate or
variable rate refunding bonds);
Substitute a new credit structure that was not expressly provided for in the existing documents;
or
Restructure the existing debt.
Bond Counsel & Financing Team
The Housing Authority shall reserve the right to select and approve the municipal advisor, underwriter
(if applicable), and bond counsel to implement the refunding. Where possible and if desired by the
Housing Authority, the financing team shall consist of the bond counsel, municipal advisor and, if
applicable, underwriter that were retained for the original financing. The Project Sponsor will
reimburse these costs at bond closing.
Legal/Documentation
New documents shall be prepared to meet the Housing Authority’s then-current legal, credit, financial,
and procedural requirements and applicable then-current state or federal requirements. The Housing
Authority shall follow the documentation process applicable to new bonds.
Because the Housing Authority’s primary purpose in issuing multifamily housing bonds is to preserve
and increase the supply of affordable housing in the Housing Authority, additional public benefit in
the form of deeper income targeting, additional rent restrictions, including additional rent restricted
units, the extension of the existing term of restrictions, or any combination therefore may be negotiated.
The level of additional restrictions for public benefit will be determined in the context of the overall
financial feasibility of each financing.
Additionally, if federal or state affordability, income, and/or rent restrictions have changed between the
time of the original financing and the refunding bonds, the more restrictive provisions shall apply. If
new requirements are more restrictive than existing requirements, the new requirements shall be
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Chula Vista Housing Authority
Refunding/Restructuring/Remarketing 25
applied in phases to new tenants over a period of time, not to exceed five (5) years, as determined by
the Housing Department staff and it’s Attorney.
The provisions of Section 52080(g) the California Health and Safety Code shall apply to projects
financed under this Program, which requires that low-income units remain affordable, except in certain
circumstances, until thirty (30) years after the commencement of the Qualified Project Period. Except in
limited circumstances, the provisions of Sections 65863.10 and 65863.11 of the California Government
Code shall apply to projects financed under this Program and Project Sponsors are advised to review
the requirements of these Sections.
Bond Maturity
Subject to the approval of bond counsel, the final maturity of the refunding bonds may be later than the
final maturity of the prior bonds so as to allow the Project Sponsor the longest possible period for
repayment under federal law. A minimum of ten percent (10%) of the units in the Project will be
required to be set aside for occupancy by very low-income households at fifty percent (50%) or below
the Housing Authority Median Income, with rents set at the corresponding affordability level for the
term of the restructured bonds.
Compliance
The Housing Authority shall not proceed with a refunding if the Project is not in compliance with the
current regulatory agreement, continuing disclosure reporting, or arbitrage rebate reporting and
payment.
Fees
The Project Sponsor shall pay the following Housing Authority fees in connection with the refunding:
Issuance Fee
The Housing Authority shall charge an Issuance Fee in accordance with the Housing
Authority’s current policy on Issuance Fees for new projects.
Annual Monitoring Fee
The Housing Authority shall continue to charge the same annual fee for monitoring the Project
as for the original bonds. Such fee shall not be reduced even if the refunding bond size is lower.
The Project Sponsor is also responsible for all other costs of the Housing Authority to cover the
issuance of bonds to refund outstanding bonds (e.g. costs of municipal advisor, bond counsel and
trustee, if applicable).
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Chula Vista Housing Authority
Refunding/Restructuring/Remarketing 26
Cash Flow Savings
Cash flow savings from refunding fixed rate bonds at a lower fixed interest rate or a variable rate shall
be applied as follows:
Projects with a Housing Authority or City Loan
A portion of the projected cash flow savings, to be determined by the Housing Division, shall be
used to accelerate the repayment of the Housing Authority loan, subject to restrictions in
existing documents.
Projects with No Housing Authority or City Loan
The Housing Authority Housing Department shall require the Project Sponsor to provide
affordability or other financial concessions to the Housing Authority as a condition for
refunding. Such concessions may include increasing the percentage of affordable units and
extending the term of affordability restrictions.
Housing Authority Approval
All refunding bonds and related legal documentation must be approved by the Housing Authority in
accordance with the procedures set for the issuance of new bonds.
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Chula Vista Housing Authority
Refunding/Restructuring/Remarketing 27
Default Refunding
In the event of a default on the bonds or the underlying mortgage, a fixed rate bond issue may be
refundable in advance of the call date without premium. The issue does not arise with variable rate
bonds, as such bonds are callable at any time. Default refunding bonds are an area of potential
sensitivity for the Housing Authority as it will not want a Project Sponsor to manufacture a default to
take advantage of more favorable interest rates.
Bond Counsel & Financing Team
The Housing Authority shall reserve the right to select and approve the municipal advisor, underwriter
(if applicable), and bond counsel to implement the refunding. Such selection shall be made in
compliance with the City’s Charter and attendant Municipal Code requirements. Where possible and if
desired by the Housing Authority, the financing team shall consist of the bond counsel, municipal
advisor and, if applicable, underwriter that were retained for the original financing. The Project
Sponsor will reimburse these costs at bond closing.
Confirming the Default
To confirm a default, the Housing Authority must receive a notice from an independent party, such as
the bond trustee. If applicable, notice of cash flow insufficiency is then filed as part of the Continuing
Disclosure Certificate. In addition, the Housing Authority shall retain, at the expense of the Project
Sponsor, an independent feasibility consultant to review the default. The Housing Authority will
proceed with the transaction only if a review by staff and the independent consultant indicates that:
Net cash flow from the Project is currently insufficient to pay debt service on the outstanding
bonds and is unlikely to do so within a reasonable period;
The Project is being operated in accordance with reasonable real estate management practices
and the net operating income has not been artificially reduced by failing to rent units actively,
inflating operating expenses, or other reasons within the control of the Project Sponsor; and
The Project Sponsor has provided audited operating statements, Continuing Disclosure filings
(if applicable), and arbitrage rebate reports for all years, has cooperated in providing requested
information, and has used operating income and other resources to pay debt service.
Additional Requirements
Indemnification
The Housing Authority shall be indemnified as to any costs incurred as a result of the
refunding, under terms approved by the Housing Authority’s Legal Counsel. Such
indemnification shall come from a party or parties with adequate net worth or other financial
capacity and whose assets are not limited to ownership of the Project.
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Refunding/Restructuring/Remarketing 28
Future Debt Coverage
The analysis of the feasibility consultant shall show that, upon the refunding, the Project’s
current net operating income will be at least sufficient to pay the revised debt service plus a
reasonable coverage ratio (or adequate non-bond proceeds will be available to cover such
deficiencies). In other words, the Housing Authority shall not proceed with the refunding if it will not
cure the cash flow problem.
Bond Counsel Review
Bond counsel shall have determined that the original bond and disclosure documents provided
adequate disclosure of such a potential redemption and that the provisions of the prior
documents have been satisfied.
Compliance
The Housing Authority shall not proceed with a refunding if the Project is not in compliance
with the current regulatory agreement, continuing disclosure reporting, or arbitrage rebate
reporting and payment.
Fees
The fees and expenses of the feasibility consultant, municipal advisor and bond counsel shall not be
contingent on their findings or completion of a refunding. The Housing Authority shall require that the
Project Sponsor deposit the estimated fees and expenses with the Housing Authority prior to the
commencement of any analysis.
Affordability Restrictions
The affordability requirements for a default refunding shall be the same as those listed under
“Legal/Documentation” for an optional refunding.
Housing Authority Approval
The Development Services Department’s Housing Division, in conjunction with the Finance
Department and Housing Authority’s Legal Counsel, shall obtain final Housing Authority approval
authorizing the bond issue and execution of the relevant documentation. A recommendation of default
refunding by Housing Authority staff shall only be given after an initial analysis of feasibility is
performed, a default is confirmed, and it is determined that a refunding will cure the cash flow
problem.
Housing Authority Fees
The Housing Authority shall charge the same Issuance Fee and annual monitoring fee that it otherwise
would in conjunction with a new bond issue.
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REMARKETING
A Project Sponsor may ask the Housing Authority to remarket outstanding bonds under one of three
basic scenarios: (1) converting variable rate bonds to fixed rate bonds; (2) a mandatory tender of bonds;
or (3) substituting a new credit enhancement for the bonds in accordance with existing documentation.
Bond Counsel & Financing Team
The Housing Authority shall reserve the right to select and approve the municipal advisor, underwriter
(if applicable), and bond counsel to implement the refunding. Where possible and if desired by the
Housing Authority, the financing team shall consist of the bond counsel, municipal advisor and, if
applicable, underwriter that were retained for the original financing. The Project Sponsor will
reimburse these costs at bond closing.
Legal/Documentation
A remarketing of fixed rate bonds will not require new legal documentation. However, the Housing
Authority’s Legal Counsel, in conjunction with bond counsel, may require a new disclosure document.
A remarketing of bonds with a new credit enhancement may require amended documentation, as well
as a new disclosure document, as determined by the Housing Authority’s Legal Counsel and bond
counsel.
Fees
A remarketing will not result in the payment of additional or revised Housing Authority issuance or
annual fees. However, the Housing Authority shall recover its actual remarketing administrative costs
incurred (estimated to range from $10,000 to $25,000) from the Project Sponsor.
Housing Authority Approval
All remarketed bonds and any related documentation shall be approved by the Housing Authority
prior to any remarketing.
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Post-Issuance Compliance Procedures 30
Post-Issuance Compliance Procedures
As an issuer of Bonds awarded allocations from CDLAC, the Housing Authority must attest to the
adherence with CDLAC requirements for each development that is still in its monitoring period to
ensure that Bond funds are spent appropriately and to ensure that rents assessed to tenants meet the
terms of the Bond Regulatory Agreement. The Housing Authority performs Bond compliance
monitoring duties for CDLAC as defined under Section 5220 of the CDLAC regulations. The Housing
Authority shall maintain documents related to its issuance of the Bonds, loan, and ongoing monitoring
of the Project in compliance with the City’s Document Retention Policy.
Use of Bond Proceeds and Bond-Financed or Refinanced Assets
The Project Sponsor shall be responsible for:
Monitoring the use of bonds proceeds and the use of bond-financed or refinanced assets (e.g.
facilities, furnishings or equipment) throughout the term of the bonds to ensure compliance
with covenants and restrictions set forth in the documents relating to the bonds;
Maintaining records identifying the assets or portion of assets that are financed or refinanced
with proceeds of each issue of bonds, including a final allocation of bond proceeds;
Consulting with bond counsel and other legal counsel and advisors in the review of any
contracts or arrangements involving use of bond-financed or refinanced assets to ensure
compliance with all covenants and restrictions set forth in the documents related to the bonds;
Maintaining records for any contracts or arrangements involving the use of bond-financed or
refinanced assets;
Conferring at least annually with personnel responsible for bond-financed or refinanced assets;
and,
The extent that the Project Sponsor discovers than any applicable tax restrictions regarding use
of bond proceeds and bond-financed or refinanced assets will or may be violated, consult
promptly with Bond Counsel and other legal counsel and advisors to determine a course of
action to remediate all nonqualified bonds, if such counsel advises that a remedial action is
necessary.
Record Keeping
The Project Sponsor shall be responsible for maintaining the following documents for the term of each
issue of bonds (including refunding bonds, if any), and at least three additional years:
A copy of the bond closing transcript(s) and other relevant documentation delivered to the
Project Sponsor or in connection with the closing of the bond issue;
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Post-Issuance Compliance Procedures 31
A copy of all material documents relating to capital expenditures financed or refinanced by
bond proceeds, including (without limitation) construction contracts, purchase orders, invoices,
trustee requisitions and payment records, draw request for bond proceeds and evidence as to
the amount and date of each expenditure of bond proceeds, as well as documents relating to
costs paid or reimbursed with bond proceeds and records identifying the assets or portion of
assets that are financed or refinanced with bond proceeds, including a final allocation of bond
proceeds;
A copy of all contracts and arrangement involving the use of bond-financed or refinanced
assets; and
With respect to any investment of bond proceeds or collateral securing the repayment of the
bonds, a copy of all records of investments, investment agreements, arbitrage reports and
underlying document, including trustee or fiscal agent statements, in connection with any
investment agreements, and copies of all bidding document, if any.
For housing bond financings subject to the requirement of Section 142 (d) of the Code, as amended, the
Project Sponsor shall be responsible for maintaining, until the end of the qualified project period within
the meaning of Section 142 (d)(2)(A) of the Code, and at least three (3) additional years a copy of all
records evidencing compliance with the requirements of Section 142 (d) of the Code, including tenant
income verifications, leases and tenant records. Such records shall be made available to the Housing
Authority at its reasonable request. Records for the current year and preceding two (2) years shall be
available at the Project site at such time the Housing Authority provides notification of a monitoring of
the Project at the site.
The Project Sponsor, in the document relating to the bonds and/or other documents finalized at or
before the issuance of the bonds, shall agree to the forgoing records retention requirements and
procedures.
Annual Certification of Public Benefits and On-going Compliance
As required by CDLAC regulations, all projects that receive a CDLAC bond allocation and are within
an existing regulatory period and/or compliance period, shall be monitored by the Housing Authority
for compliance with the terms and conditions of the CLDAC resolution. The Housing Authority may
choose to hire an outside compliance monitoring firm to assist with such requirements. The Housing
Authority utilizes FOCUS® a housing compliance monitoring and reporting software for submittal of
Project rent rolls.
It is acknowledged that the Housing Authority is required to collect, review, and submit to CDLAC the
Certification of Compliance I, Certification of Compliance II and CDLAC Completion Certificate for
each issuance bonds, when applicable. Each year, by March 1st, the Housing Authority submits such
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Post-Issuance Compliance Procedures 32
certifications to CDLAC in such format as required by CDLAC, and must certify as the issuer that all of
its Bond-funded developments are complying with the features originally identified in application to
CDLAC and contained in Attachment A to the CDLAC resolution.
Annually, on or before February 1st of each year until the expiration of the later of the qualified project
period or compliance period under the applicable CDLAC Resolution and Regulatory Agreement,
Project Sponsor and/or their representatives, are required to submit to the Housing Authority the
following information and forms as follows:
Certification of Delivery of Public Benefits and Continuing Program Compliance (attach
validating back-up information on services contracts, services types, and services frequency)
Annual QRRP Certification of Compliance I or II form, as applicable (Must be submitted and
signed on project sponsor letterhead)
IRS Form 8703 Annual Certification of a Residential Rental Project
If property did not already submit its rent roll for this previous year via FOCUS®, the
City’s/Housing Authority’s housing compliance monitoring and reporting software , then
submit rent roll as of December 30th. Else, resubmission of September 30th rent rolls is not
required.
If CDLAC adopted a new Exhibit A to its CDLAC resolution in the most recent year, the most
recent Exhibit A
If the project ownership has changed since the Bonds were first issued, provide:
o Completed Legal Status Questionnaire (attached to Certification of Delivery of Public
Benefits form)
o W-1 Attachment
o Partnership organizational chart with principals and officers of each entity of the new
partnership identified (see sample forms attached).
Project Sponsors and/or representatives are required to maintain the above records and any other
records required by the Housing Authority or CDLAC for the term prescribed in the Bond, Regulatory
Agreement, or any other legal requirement (including applicable period which may be subject to audit)
whichever is the longest.
All required forms for submittal to the Housing Authority for monitoring purposes can be found on
the City of Chula Vista Rental Housing Compliance website at
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http://www.chulavistaca.gov/departments/development-services/housing/building-
affordable-housing/rental-housing-compliance.
The Housing Authority shall review the Project Sponsor’s Certificate of Compliance, all other
documents submitted and may request additional supporting documents that evidence compliance as
necessary in the sole reasonable discretion of the Housing Authority.
IRS Form 8703
The Project Sponsor is required to submit IRS Form 8703 annually to the IRS on or before each March
31st as long as the bonds are outstanding. Form 8703 provides annual information to the IRS to help
them determine whether a project continues to be a qualified residential rental project under Section
142 (d) of the Code, as amended.
Monitoring
For projects receiving an allocation of bond authority from CDLAC after December 31, 2016, CDLAC
requires that a review of twenty percent (20%) of all management files associated with federally bond-
restricted units either on-site or electronically be performed upon project completion and a minimum
of every three (3) years thereafter.
Non-Compliance
For projects which are not satisfying the terms and conditions stated in the CDLAC Resolution, the
Housing Authority will provide written notification of such non-compliance to the Project Sponsor and
provide two (2) weeks for Project Sponsors to provide any further information or documentation that
may demonstrate continuing compliance. Should the Housing Authority determine such non-
compliance continues to exist, the Housing Authority will work with its legal counsel and CDLAC staff
to institute remedial action, as necessary, including an action for specific performance or other
available remedy, as may be specified within the Regulatory Agreement, Loan Agreement or other loan
related documents. The Housing Authority may disqualify a bond application from any Project
Sponsor or member of the development partnership who is not in compliance with the Housing
Authority’s or CDLAC’s post issuance compliance requirements, guidelines, policies as determined by
the Housing Authority and/or by CDLAC.
Transfer of Ownership
The Housing Authority reserves the right to approve any voluntary change in ownership of a bond-
financed project (i) to another owner; (ii) that results in a transfer of fifty percent (50%) or more of the
total equity interests in a project owner or (iii) that results in a transfer of any general partner or
managing member interest in the project owner. Such approval of transfer ownership shall be at the
discretion of the Housing Authority subject to any additional requirements set for in the applicable tax
certificate or Regulatory Agreement. The Housing Authority shall review management practices of the
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Post-Issuance Compliance Procedures 34
proposed transferee’s current and previously owned multifamily housing rental properties. Any
proposed transferee (including individuals with an ownership) whose currently owned multifamily
housing rental properties have been found by the Housing Authority to have deficiencies that have not
been resolved within the time frame prescribed by the City, Housing Authority, or other local
government authorities, may not assume ownership of or an ownership interest in an any bond-
financed project. The Housing Authority may initiate additional inspections to verify findings.
Carryforward Election
With respect to each allocation of tax-exempt private activity bond issue authority to the Housing
Authority in a given calendar year for which less than all of the allocation volume cap was used, the
Housing Authority staff shall contact CDLAC requesting confirmation of the amount, if any, of
carryforward election the Housing Authority shall make under Section 146(f) of the Code and the
Housing Authority will timely file a Form 8328 with the IRS.
Arbitrage Rebate Compliance
The Project Sponsor shall comply with all applicable federal tax laws set forth in the tax or arbitrage
certificate and bond documents, including arbitrage rebate compliance. Upon request, the Project
Sponsor shall provide the Housing Authority documentation that verifies the Project Sponsor’s
compliance with federal tax laws set forth in the tax or arbitrage certificate and bond documents,
including rebate compliance reports.
Other Required Disclosures
The Project Sponsor shall be solely responsible of any and all disclosures under any applicable
Securities and Exchange Commission and any Municipal Securities Rulemaking Board (MSRB) rules,
requirements and regulations, including but not limited to fixed rate bond issuance with Fannie Mae
and/or Freddie Mac involvement.
SAMPLE FORMS TO FOLLOW
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INDEX 47
INDEX
Bond Issuance
Application and supporting documents requirements ............................................................................... 9
Fee Structure for issuance and ongoing annual administration............................................................... 21
Requirements for inducement & TEFRA Resolutions and TEFRA public hearings ............................. 13
Parameters for issuer liability for bond issuance or repayment of bonds ............................................... 1
Indemnification requirements with respect to the financing and the project ....................................... 15
Procedures and requirements for private placement purchases and public sales of bonds ............... 17
Underwriter selection criteria and procedures .......................................................................................... 13
Credit enhancement requirements .............................................................................................................. 17
Bond Counsel selection criteria and procedures ....................................................................................... 12
Loan to value restrictions/limits .................................................................................................................... 8
Interest rate restrictions/limits ....................................................................................................................... 8
Requirements for offering materials or disclosure documents ............................................................... 14
Maximum loan amount .................................................................................................................................. 8
Minimum bond ratings ................................................................................................................................. 16
Minimum/maximum bond denominations ................................................................................................ 17
Limitations on uses of bond proceeds ......................................................................................................... 20
Rent and income limitations (if applicable) ................................................................................................. 4
Affordability requirements ............................................................................................................................. 5
Public benefit requirements ............................................................................................................................ 4
Debt to income requirements ......................................................................................................................... 8
Local review and approval requirements ................................................................................................... 11
Review procedures and requirements for financing structure, financing documents and
tax-exempt status ........................................................................................................................................... 11
Developer and ownership partnership requirements and limitations ..................................................... 9
Property management requirements and limitations ............................................................................. n/a
Management plan requirements ................................................................................................................ n/a
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INDEX 48
Procedure for determining developer fee and developer fee limits ......................................................... 8
ID any third-party contractors and describe rights, obligations and limitations of third-
party contractors ............................................................................................................................................ 12
Exceptions/waivers of policy requirements and procedures for requesting a waiver ................... 11, 18
Post Issuance Compliance
Identification of third-party contractors engaged in compliance verification, reporting and/or
auditing and describe rights, obligations and limitations of third-party contractors ........................... 30
Identification of parties responsible for compliance verification and reporting ................................... 29
Commencement of Qualified Project Period and reporting requirements
and procedures ................................................................................................................................................ 30
Compliance forms for reporting ................................................................................................................... 34
Compliance verification, reporting and auditing procedures: ................................................................. 30
Affordability (i.e.: # of units at 50% AMI and 60% AMI) (QRRP only) ......................................................
Income limits (QRRP only) ............................................................................................................................
Utility allowances (QRRP only) .....................................................................................................................
Service amenities and other public benefits required by CDLAC resolution ..................................................
Arbitrage rebate ...............................................................................................................................................
Frequency of compliance verification, reporting and audits .................................................................... 30
Issuer document retention procedures and time limits ............................................................................. 29
Site-based document retention procedures and time limits ..................................................................... 30
Procedures for reporting compliance/non-compliance to regulatory agencies and other
external entities (i.e.: CDLAC, TCAC, etc.) ................................................................................................. 30
Criteria and procedures for seeking revised resolutions and/or regulatory agreements .........................
Non-compliance correction procedures and penalties ............................................................................. 32
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Attachment 2
TEFRA Hearing
Staff FCR Hours TOTAL
Sr Management Analyst 119.70$ 10 1,197.00$
Deputy City Attorney 228.10$ 3 684.30$
Bond Counsel 525.00$ 3 1,575.00$
Housing Authority Members 50.00$ 5 250.00$
Publication of Public Hearing Notice 250.00$
TOTAL Estimated Cost of Service 3,956.30$
Proposed Fee 3,500.00$
Annual Administrative Fee
Hours TOTAL Hours TOTAL Hours TOTAL
Sr Management Analyst 119.70$ 60 7,182.00$ 80 9,576.00$ 100 11,970.00$
Housing Manager 166.57$ 12 1,998.84$ 16 2,665.12$ 20 3,331.40$
Sr. Fiscal Office Specialist 77.23$ 10 772.30$ 10 772.30$ 10 772.30$
Accountant 106.75$ 6 640.50$ 6 640.50$ 6 640.50$
Fiscal & Management Analyst 154.86$ 6 929.16$ 6 929.16$ 6 929.16$
Bond Counsel 525.00$ 1 525.00$ 3 1,575.00$ 3 1,575.00$
Deputy City Attorney 228.10$ 3 684.30$ 3 684.30$ 3 684.30$
Software Costs (Third Party Vendor)6.00$ 50 300.00$ 100 600.00$ 200 1,200.00$
TOTAL Estimated Cost of Service 13,032$ 17,442$ 21,103$
Proposed Fee 13,000$ 17,000$ 21,000$
COST OF SERVICE ANALYSIS
Mid
(51-199 dus)
Small
(<51 dus)
Large
(200+ dus)
FCR
Staff
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City of Chula Vista
Staff Report
File#:18-0084, Item#: 3.
A. ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHULA VISTA MUNICIPAL
CODE, SECTION 19.58.022 (ACCESSORY SECOND DWELLING UNITS); CHAPTER 19.04
(DEFINITIONS); CHAPTER 19.20 (AGRICULTURAL ZONE); CHAPTER 19.22
(RESIDENTIAL ESTATES ZONE); CHAPTER 19.24 (SINGLE-FAMILY RESIDENCE ZONE);
CHAPTER 19.26 (ONE- AND TWO-FAMILY RESIDENCE ZONE); CHAPTER 19.28
(APARTMENT RESIDENTIAL ZONE); AND CHAPTER 19.48 (PLANNED COMMUNITY
ZONE) WITH REGARD TO ACCESSORY DWELLING UNITS (FIRST READING)
B. ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHULA VISTA MUNICIPAL CODE
CHAPTER 3.32 (RESIDENTIAL CONSTRUCTION TAX) TO EXEMPT ACCESSORY
DWELLING UNITS AND JUNIOR ACCESSORY DWELLING UNITS FROM THE
RESIDENTIAL CONSTRUCTION TAX AND AMENDING CHAPTER 17.10 (PARKLANDS AND
PUBLIC FACILITIES) TO WAIVE ASSESSMENT OF PARKLAND ACQUISITION AND
DEVELOPMENT FEES FOR ACCESSORY DWELLING UNITS AND JUNIOR ACCESSORY
DWELLING UNITS (FIRST READING)
RECOMMENDED ACTION
Council place the ordinances on first reading.
SUMMARY
The item is an amendment to various sections of the Chula Vista Municipal Code (CVMC), related to
Accessory Dwelling Units (ADUs), to comply with state law and its stated intent. In January 2017, the
State of California enacted laws: Senate Bill 1069; Assembly Bill 2299; and Assembly Bill 2406, to
address the statewide affordable housing demand. Generally, the bills require a ministerial approval
process for ADUs and Junior Accessory Dwelling Units (JADUs) and other requirements described
later in this report. These laws went into effect on January 1, 2017, and, arguably, had the effect of
nullifying and voiding the City’s existing Accessory Second Dwelling Unit (ASDU) ordinance. In
January 2018, the state enacted two additional laws: Senate Bill 229; and Assembly Bill 494. These
bills further define provisions to allow ADUs on lots with a proposed or existing primary residence,
allowed limited or no parking requirement, and a limitation on utility connection requirements and
fees. Staff reviewed the City’s existing ASDU ordinance, which is still contained in the CVMC, and
prepared a draft amendment to incorporate the new requirements, and to be in compliance with state
law. Further, ADUs generally serve low- and moderate-income families, and the findings in
Government Code Section 65852.150(b) as amended by Senate Bill 1069 indicate that ADUs are an
essential component of California’s housing supply that should not be subject to excessive local
agency requirements, including fees. Therefore, Ordinance B would waive the Residential
Construction Tax (RCT) and Parkland Acquisition and Development (PAD) Fees for ADU building
permits.
ENVIRONMENTAL REVIEW
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Environmental Notice
The Accessory Dwelling Unit Ordinance Amendments qualify for a Class 3 Categorical Exemption
pursuant to Section 15303 (New Construction or Conversion of Small Structures) of the California
Environmental Quality Act State Guidelines. In addition, the Accessory Dwelling Unit Ordinance
Amendments qualify for an Exemption pursuant to Section 15061(b)(3) of the California
Environmental Quality Act State Guidelines. The Fee Waiver Ordinance Amendment is not a
“Project” as defined under Section 15378 of the California Environmental Quality Act State
Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is
required.
Environmental Determination
The City Council finds that the Accessory Dwelling Unit Ordinance Amendments are exempt from
environmental review under the California Environmental Quality Act (CEQA) pursuant to Section
15303 - New Construction or Conversion of Small Structures and Section 15061(b)(3) because it can
be seen with certainty that there is no possibility that the activity in question may have a significant
effect on the environment. The City Council finds that the Fee Waiver Ordinance Amendment is not a
“Project” as defined under Section 15378 of the California Environmental Quality Act State
Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3), no further environmental
review is required.
BOARD/COMMISSION RECOMMENDATION
The San Diego County Airport Land Use Commission reviewed Ordinance A and determined that it is
consistent with Airport Land Use Compatibility Plan (APLUCP) (Attachment 4), and on November 8,
2017 the City of Chula Vista Planning Commission recommended adoption of Ordinance A to the City
Council (Attachment 2).
DISCUSSION
The state determined that a substantial statewide storage of affordable housing is prevalent. In 2016
state law established SB 1069; AB 2406; and AB 2299 that allows local governments to create an
ordinance to regulate ADUs and JADUs in single-family and multifamily zones, and replaced the term
“second unit” with “accessory dwelling unit.” The intent is to create opportunities for residential
property owners to build accessory dwelling units as affordable housing stock, and for jurisdictions to
allow such units through a ministerial process; in January 2017 these bills became effective. In
January 2018, the State enacted SB 229 and AB 494. These bills require jurisdictions to allow these
units in single family and multi-family zones with proposed or existing primary residences, limited
parking and utility connection requirements for ADUs. As a result, the City’s Accessory Second
Dwelling Unit (ASDU) ordinance is now null and void until the City adopts an ADU ordinance that
complies with state law. Listed below are the key Chula Vista ASDU ordinance amendments that will
comply with state law:
• Changes the nomenclature from Accessory Second Dwelling Units to Accessory Dwelling
Units; and
• Allows ADUs on single-family and multi-family zoned lots developed with a proposed or an existing
single-family dwelling; and
• Eliminates the minimum lot size requirement; and
• Permits a maximum ADU unit size of 1,200 square feet; not exceeding 50 percent of the primary
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dwelling, whichever is less; and
• Does not require garage replacement when a garage for the primary dwelling is converted to an
ADU; and
• Allows replacement parking in any configuration including tandem parking; and
• Does not require parking for ADUs if located within ½ mile of public transit; and
• Allows for existing detached garages in the rear yard to be converted to an ADU and maintain the
existing setback; and
• Requires ADUs above a detached garage to maintain a minimum five-foot rear and side yard
setback from property lines; and
• Permits attached ADUs subject to the same development standards for the primary dwelling; and
• Allows for ADUs to be subject to design standards; and
• Allows the City to require owner-occupancy; and
• Allows for JADUs to be located within the existing dwelling (i.e. converted bedroom) not exceeding
500 square feet, with no parking requirement.
Additionally, the following code sections are amended to include provisions for ADUs and JADUs:
Chapters 19.04 (Definitions), 19.20 (Agricultural Zone), 19.22 (Residential Estates Zone), 19.24
(Single-Family Residence Zone), 19.26 (One- and Two-Family Residence Zone), 19.28 (Apartment
Residential Zone), and 19.48 (Planned Community Zone) will be amended to include ADUs and
JADUs as accessory uses in the respective sections (Attachment 2).
In keeping with the findings and intent of the mentioned state legislation, namely, that ADUs
represent an essential component of California’s affordable housing stock; and that Chapters 3.32
(Residential Construction Tax) and 17.10 (Parklands and Public Facilities) originally allowed for
waivers of the respective tax and fees for projects serving low- and moderate-income families,
Ordinance B would amend Municipal Code Chapters 3.32 and 17.10 to allow for waiving the
respective tax and fees for all ADU and JADU permits.
Public Outreach
On April 6, 2017 staff presented the draft Ordinance A to the Development Services Citizen Oversight
Committee; following discussion and review, the Committee recommended adoption of Ordinance A.
ANALYSIS
Senate Bill 1069 established state law authorizing local jurisdictions to create an ordinance for:
·The provision of accessory dwelling units (ADUs) in single-family and multi-family residential
zones; and
·Replace the term “second unit” with “accessory dwelling unit”; and
·Provide optional parking standards for ADUs under specific circumstances; and
·Require ministerial approval to create existing space within a single-family dwelling or
accessory structure for ADUs; and
·Prohibit local agencies from requiring the installation of a new or separate utility connection
between the ADU and the utility, or requiring a connection or capacity fee as they are not to be
considered as a new residential use; and
·Various development standards.
Senate Bill 1069 also amended Government Code Section 65852.150 to include the finding that
ADUs offer lower cost housing to meet the needs of existing and future residents, and that they
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ADUs offer lower cost housing to meet the needs of existing and future residents, and that they
represent an essential component of California’s housing supply. Part (b) indicates that it is the intent
of the state legislature that the provisions of a local agency ADU ordinance not be so arbitrary,
excessive, or burdensome so as to unreasonably restrict the ability of homeowners to create ADUs in
authorized zones.
Assembly Bill 2299 established state law authorizing local jurisdictions to create an ordinance for
similar provisions stated in SB 1069, and added a provision to reduce or eliminate parking
requirements.
Assembly Bill 2406 established State law for the provision of Junior Accessory Dwelling Units
(JADUs) within existing single-family residences. The provisions include:
·No parking requirement; and
·Limit the number of junior accessory dwelling units to one per single-family residential zoned
lot with an existing single-family residence; and
·An owner-occupancy requirement; and
·Various development standards.
In January 2018 Senate Bill 229 and Assembly Bill 494 established state law that provides for ADUs
to be located in single-family and multi-family zones with a proposed or existing primary residence,
and additional provisions that limit ADU parking requirements, specifically requiring one parking
space per bedroom or per unit, or eliminating parking requirements entirely.
SB 229 refined provisions previously established with SB 1069 and AB 2299 by allowing ADUs in
zones that allow a single-family or multifamily use with a proposed or existing single-family dwelling.
AB 494 also refined the previous bills and is similar to SB 229, but added flexible setback
requirements for existing garages, limited parking not to exceed a maximum of one space per ADU,
and further defined accessory structure.
State law does allow ADUs and JADUs as rentable units separate from the primary residence, but
the units cannot be sold separately. State law allows the City to require owner-occupancy for ADUs
and the proposed Ordinance A does make this a requirement along with the recordation of an
agreement with the County that stipulates the occupancy requirement.
CONCLUSION
The proposed ordinances, if adopted, will be consistent with state law and will encourage the
development of more ADUs and JADUs, thereby increasing the availability of affordable housing. If
Ordinance A is not adopted, the provisions outlined in State law will remain in effect. If Ordinance B
is not adopted, ADUs and JADUs will be assessed the Residential Construction Tax and Parkland
Acquisition and Development Fees with waivers being addressed by City Council on a case-by-case
basis.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-
specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
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File#:18-0084, Item#: 3.
18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100,
et seq.). Staff is not independently aware, and has not been informed by any City Councilmember, of
any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The Ordinances
support the Strong and Secure Neighborhoods goal as they seek to lower barriers to new affordable
housing development.
CURRENT YEAR FISCAL IMPACT
All staff costs associated with preparing the Ordinances is included in the adopted budget.
ONGOING FISCAL IMPACT
As a planning document, the adoption of Ordinance A will have no direct fiscal impact to the City.
However, as projects are implemented both a revenue stream and cost factors will be realized. As
implementation of Ordinance A occurs, additional information regarding specific fiscal impacts of
future individual projects will be evaluated.
Long-term implementation of Ordinance B will result in minor reductions in revenue to the Residential
Construction Tax and Parkland Acquisition and Development funds. Due to the low-impact nature of
ADUs relative to single- and multi-family dwellings, the fee amounts being waived do not represent a
significant anticipated reduction of revenue to the aforementioned funds.
ATTACHMENTS
1. Planning Commission Resolution MPA17-0008
2. Planning Commission Minutes
3. Airport Land Use Commission Letter
Staff Contact: Michael Walker, Senior Planner, DSD Advance Planning Division
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ORDINANCE NO.________
ORDINANCE OF THE CITY OF CHULA VISTA
AMENDING CHULA VISTA MUNICIPAL CODE,
SECTION 19.58.022 (ACCESSORY SECOND
DWELLING UNITS); CHAPTER 19.04 (DEFINITIONS);
CHAPTER 19.20 (AGRICULTURAL ZONE); CHAPTER
19.22 (RESIDENTIAL ESTATES ZONE); CHAPTER
19.24 (SINGLE-FAMILY RESIDENCE ZONE);
CHAPTER 19.26 (ONE- AND TWO-FAMILY
RESIDENCE ZONE); CHAPTER 19.28 (APARTMENT
RESIDENTIAL ZONE); AND CHAPTER 19.48
(PLANNED COMMUNITY ZONE) WITH REGARD TO
ACCESSORY DWELLING UNITS
WHEREAS, in January 2017, the State of California enacted the following laws:
Senate Bill 1069; Assembly Bill 2299; and Assembly Bill 2406; and in January 2018
Senate Bill 229; and Assembly Bill 494 to address the statewide affordable housing
demand requiring a ministerial approval process and limiting regulatory requirements for
Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs); and
WHEREAS, as a result of said recently enacted California Laws, the City’s current
Accessory Second Dwelling Unit (ASDU) Ordinance (Chula Vista Municipal Code
Section 19.58.022) became null and void; and
WHEREAS, staff reviewed the City’s ASDU Ordinance, and prepared a draft
amendment to incorporate the new requirements to be in compliance with State law; and
WHEREAS, the revisions to Title 19 “Planning and Zoning” of the Chula Vista
Municipal Code contained in this Ordinance address the required amendments; and
WHEREAS, staff presented the ADU Ordinance to the Development Services
Oversight Committee which recommended adoption of the Ordinance; and
WHEREAS, on November 8, 2017 the City of Chula Vista Planning Commission
held an advertised public hearing on the subject ADU Ordinance and voted 6-0-1-0 to
adopt Resolution No. MPA17-0008 and thereby recommended that the City Council
adopt the Ordinance; and
WHEREAS, The City Council reviewed the proposed activity for compliance with
the California Environmental Quality Act and hereby finds and determines that the
adoption of this Ordinance is exempt from environmental review under the California
Environmental Quality Act (CEQA) pursuant to Section 15303 - New Construction or
Conversion of Small Structures and Section 15061(b)(3) of the State CEQA Guidelines
because it can be seen with certainty that there is no possibility that the activity in
question may have a significant effect on the environment; therefore, no further
environmental review is required; and
2018-04-10 Agenda Packet Page 82
WHEREAS, the City Council set the time and place for a hearing on the subject
Ordinance and notice of said hearing, together with its purpose, was given by its
publication in a newspaper of general circulation in the City at least ten days prior to the
hearing; and
WHEREAS, the City Council held a duly noticed public hearing on said Ordinance
at a time and place as advertised in the Council Chambers located at 276 Fourth Avenue
and said hearing was therefore closed.
NOW THEREFORE the City Council of the City of Chula Vista does hereby
ordain as follows:
Section I.
Section 19.58.022 Accessory Dwelling Units
9.58.022 Accessory dwelling units.
A. The purpose of this section is to provide regulations for the establishment of accessory
dwelling units in compliance, inter alia, with California Government Code Section
65852.2. Said units may be located in residential zone districts where adequate public
facilities and services are available. Accessory dwelling units are a potential source of
affordable housing and shall not be considered in any calculation of allowable density of
the lot upon which they are located, and shall also be deemed consistent with the General
Plan and zoning designation of the lot as provided. Accessory dwelling units shall not be
considered a separate dwelling unit for the purpose of subdividing the property into
individual condominium or lot ownership.
B. For the purposes of this section, the following words are defined:
“Above” as used in this section shall mean an accessory dwelling unit that is attached,
and built over a primary residence including an attached garage, or above a detached
garage or similar building in the rear yard.
Exhibit B.1-“Behind”Exhibit B.2-“Buildable Pad Area”
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“
“Accessory dwelling unit” means an attached or a detached residential dwelling unit
which provides complete independent living facilities for one or more persons. It shall
include permanent provisions for living, sleeping, eating, cooking, and sanitation on the
same parcel as the single-family dwelling is situated. An accessory dwelling unit also
includes the following:
(A) An efficiency unit, as defined in Section 17958.1 of the Health and Safety Code.
(B) A manufactured home, as defined in Section 18007 of the Health and Safety Code.
“Attached” shall mean a wall, floor, or ceiling of an accessory dwelling unit is shared
with the primary residence on the property.
“Basement” shall mean the same as defined in CVMC 19.04.026.
“Behind” shall mean an accessory dwelling unit constructed either entirely between the
rear of the primary residence and the rear property line, or at the side of the primary
residence, and set back from the front plane of the primary residence at least 50 percent
of the distance between the front and back planes of the primary residence (Exhibit B.1).
“Buildable pad area” shall mean the level finish grade of the lot not including slopes
greater than 50 percent grade (Exhibit B.2).
“Detached” shall mean an accessory dwelling unit separated from the primary residence
as specified in subsection (C)(5)(e) of this section.
“Living area” shall mean the interior habitable area of a dwelling unit including
basements and attics, but does not include garages or any accessory structure.
“Primary residence” shall mean a proposed or existing single-family dwelling constructed
on a lot as the main permitted use by the zone on said parcel.
“Tandem parking” shall mean that two or more vehicles are parked on a driveway or in
any other location on the lot lined up behind one another.
C. Accessory dwelling units shall be subject to the following requirements and
development standards:
1. Zones. Accessory dwelling units may accompany a proposed or an existing primary
residence in single family zones, on multifamily zoned lots developed with a single-
family residence, or similarly zoned lots in the Planned Community (PC) zone.
Accessory dwelling units or junior accessory dwelling units are not permitted on lots
developed with condominiums, townhomes, apartments, or similar multifamily
developments. Construction of a primary residence can be in conjunction with the
construction of an accessory dwelling unit. Where a guesthouse or other similar
accessory living space exists, accessory dwelling units are not permitted. The conversion
2018-04-10 Agenda Packet Page 84
of a guest house, other similar living areas, or other accessory structures into an accessory
dwelling unit is permitted, provided the conversion meets the intent and property
development standards of this section, and all other applicable CVMC requirements.
Accessory dwelling units shall not be permitted on lots within a planned unit
development (PUD), unless an amendment to the PUD is approved and specific property
development standards are adopted for the construction of said dwelling units for lots
within the PUD.
2. Unit Size. The total floor space of an attached or detached accessory dwelling unit
shall not exceed 50 percent of the living area of the primary residence or 1,200 square
feet whichever is less. The original buildable pad area of a lot may be increased through
regrading and/or use of retaining walls or structures as allowed for a specific lot.
3. Unit Location. Accessory dwelling units are prohibited in the required front setback.
4. Height. An accessory dwelling unit, as measured from the ground, shall not exceed the
height limit for the primary residence in accordance with the underlying zone.
5. Development Standard Exceptions. Accessory dwelling units shall conform to the
underlying zoning and land use development requirements with regards to the setbacks
for primary residences with the following exceptions:
a. New detached single-story accessory dwelling units are allowed a setback of no more
than five feet from the side and rear lot lines.
b. For lots with up-slopes between the side or rear of the house, required yard setbacks
are measured from the toe of slope.
c. For lots with down-slopes between the side or rear of the house, required yard setbacks
shall be measured from the top of slope.
d. A detached accessory dwelling unit shall be located a minimum of 6 feet from a
primary residence.
e. No setback shall be required for an existing garage that is converted to an accessory
dwelling unit or to a portion of an accessory dwelling unit, and a setback of no more than
five feet from the side and rear lot lines shall be required for an accessory dwelling unit
that is constructed above a garage.
6. Lot Coverage. Other than conversions of other structures, new accessory dwelling
units and all other structures on the lot are limited to the maximum lot coverage permitted
according to the underlying zone. Other than conversions of other structures a new
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detached accessory dwelling unit and all other detached accessory structures combined,
shall not occupy more than 30 percent of the required rear yard setback.
7. Parking. Parking for an accessory dwelling unit is not required in any of the following
instances:
i. The accessory dwelling unit is within one-half mile from public transit.
ii. The accessory dwelling unit is within an architecturally and historically
significant historic district.
iii. The accessory dwelling unit is part of an existing primary residence or an existing
accessory structure.
iv. The accessory dwelling unit is in an area where on-street parking permits are
required, but not offered to the occupant of the accessory dwelling unit.
v. The accessory dwelling unit is located within one block of a car share area.
8. Accessory dwelling units not meeting any of the above requirements shall be subject to
the following access and parking regulations:
a. Parking. Parking requirements for accessory dwelling units shall not exceed one
parking space per unit or per bedroom, whichever is less. Parking spaces may be
provided in tandem on an existing driveway provided that access to the garage for the
primary residence is not obstructed. Off-street parking shall be permitted in setback areas
in locations or through tandem parking, unless specific findings are made that parking in
setback areas or tandem parking is not feasible based upon specific site or regional
topographical or fire and safety conditions.
b. The required parking space(s) shall be on the same lot as the accessory dwelling unit.
This parking is in addition to the parking requirements for the primary residence as
specified in CVMC 19.62.170.
c. Notwithstanding CVMC 19.62.190, if the accessory dwelling unit involves the
conversion of an existing garage used by the primary residence, replacement parking
shall be provided prior to, or concurrently with, the conversion of the garage into the
accessory dwelling unit. The replacement parking may be located in any configuration
on the same lot as the accessory dwelling unit, including, but not limited to, covered
spaces, uncovered spaces, tandem spaces, or by the use of mechanical automobile
parking lifts. If the existing driveway is no longer necessary for the access to the
converted garage or other required parking, said driveway may be used to satisfy the
required parking for the accessory dwelling unit when not exempt from CVMC
19.58.022(C)(7).
d. Access to all required parking shall be from a public street, alley or a recorded access
easement. Access from a designated utility easement or similar condition shall not be
permitted. For any lot proposing an accessory dwelling unit and served by a panhandle or
easement access, the access must be a minimum 20 feet in width.
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e. Curb cuts providing access from the public right-of-way to on-site parking spaces shall
be acceptable to the City Engineer. An encroachment permit from the City Engineer shall
be obtained for any new or widened curb cuts.
f. Required parking spaces or required maneuvering area shall be free of any utility poles,
support wires, guard rails, stand pipes or meters, and be in compliance with CVMC
19.62.150.
g. When a required parking space abuts a fence or wall on either side, the space shall be a
minimum of 10 feet wide. If this area also serves as the pedestrian access from an
accessory dwelling unit to the street, the paving shall be a minimum 12 feet wide.
h. All required parking spaces shall be kept clear for parking purposes only.
9. Utilities. The accessory dwelling unit within a single-family residential zone that is
contained within the existing space of a single-family residence or accessory structure
and which has independent exterior access shall be served by the same water and sewer
lateral connections that serve the primary residence. A separate electric meter and address
may be provided for the accessory dwelling unit. Accessory dwelling units that are not
contained within the existing space of a single-family residence or accessory structure
shall be served by their own separate water and sewer lateral connections. Separate
electric meter and addresses shall be provided for the separate accessory dwelling units.
10. Design Standards. The lot shall retain a single-family appearance by incorporating
matching architectural design, building materials and colors of the primary residence with
the accessory dwelling unit, and any other accessory structure built concurrently with the
accessory dwelling unit. However, the primary residence may be modified to match the
new accessory dwelling unit. The accessory dwelling unit shall be subject to the
following development design standards:
a. Matching architectural design components shall be provided between the primary
residence, accessory dwelling unit, and any other accessory structures. These shall
include, but are not limited to:
i. Window and door type, style, design and treatment;
ii. Roof style, pitch, color, material and texture;
iii. Roof overhang and fascia size and width;
iv. Attic vents color and style;
v. Exterior finish colors, texture and materials.
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b. A useable rear yard open space of a size at least equal to 50 percent of the required rear
yard area of the underlying zone shall be provided contiguous to the primary residence.
Access to this open space shall be directly from a common floor space area of the
primary residence such as living or dining rooms, kitchens or hallways, and without
obstruction or narrow walkways.
c. A useable open space that has a minimum dimension of six feet and an area not less
than 60 square feet in area shall be provided contiguous to an accessory dwelling unit. A
balcony or deck may satisfy this requirement for second story units.
d. Windows on second story accessory dwelling units should be staggered and oriented
away from adjacent residences closer than 10 feet. The location and orientation of
balconies or decks shall also be oriented away from adjacent neighbors’ backyard and
living space windows.
e. Trash and recycling containers must be stored between pick-up dates in an on-site
location that is screened from public view and will not compromise any required open
space areas.
11. Designated Historical Sites. An accessory dwelling unit may be allowed on
designated or historical sites, provided the location and design of the accessory dwelling
unit meets corresponding historical preservation requirements in place at the time the
accessory dwelling unit is built, and complies with the requirements of this section
including the following:
a. The accessory dwelling unit shall be located behind a primary residence that is
determined to be a historic resource.
b. The construction of the accessory dwelling unit shall not result in the removal of any
other historically significant accessory structure, such as garages, outbuildings, stables or
other similar structures.
c. The accessory dwelling unit shall be designed as to have a distinguishable
architectural style and finished materials composition from the historic primary
residence or structure.
d. Construction of an accessory dwelling unit shall not result in demolition, alteration or
movement of any historic structures and any other on-site features that convey the
historic significance of the structure and site.
e. If an historic house/site is under a Mills Act contract with the City, the contract shall be
amended to authorize the introduction of the accessory dwelling unit on the site.
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12. Occupancy Requirement. At the time of building permit submittal, and continuously
thereafter, the property owner(s) shall reside on the lot on which the accessory dwelling
unit is located or constructed. The Zoning Administrator shall have the authority to
suspend this occupancy requirement for a period not to exceed five years when evidence
has been submitted that one of the following situations exists:
a. The property owners’ health requires them to temporarily live in an assisted living or
nursing facility.
b. The property owner is required to live outside the San Diego region as a condition of
employment or military service.
c. The property owner is required to live elsewhere to care for an immediate family
member.
d. The property owner has received the property as the result of the settlement of an
estate.
13. Land Use Agreement. Concurrent with the issuance of building permits for the
construction of an accessory dwelling unit, the property owner shall sign and notarize a
land use agreement which sets forth the occupancy and use limitations prescribed in this
section. This agreement will be recorded with the County of San Diego Recorder on title
to the subject property. This agreement shall run with the land, and inure to the benefit of
the City of Chula Vista.
14. Accessory dwelling units shall not be required to provide fire sprinklers if they are
not required for the primary residence.
15. Recordation of a deed restriction is required, which shall run with the land, shall be
filed with the permitting agency, and shall include both of the following:
(a) A prohibition on the sale of the accessory dwelling unit separate from the sale of the
single-family residence, including a statement that the deed restriction may be enforced
against future purchasers.
(b) A restriction on the size and attributes of the accessory dwelling unit that conforms to
this section.
9.58.022(a) Junior Accessory Dwelling Units.
A. Definition: “Junior accessory dwelling unit” shall mean a unit that is no more than 500
square feet in size and contained entirely within an existing single-family structure. A
junior accessory dwelling unit may include separate sanitation facilities, or may share
sanitation facilities with the existing structure.
1) B. In single-family residential zones, a junior accessory dwelling unit is permitted
and shall meet all of the following:One junior accessory dwelling unit per residential lot
2018-04-10 Agenda Packet Page 89
zoned for single-family residences with a single-family residence already built, and no
ADU or guest house exists on the lot.
2) Owner-occupancy is required in the single-family residence in which the junior
accessory dwelling unit will be permitted. The owner may reside in either the remaining
portion of the structure or the newly created junior accessory dwelling unit. Owner-
occupancy shall not be required if the owner is another governmental agency, land trust,
or housing organization.
3) Recordation of a deed restriction is required, shall run with the land, and shall be
filed with the permitting agency, and shall include both of the following:
(a) A prohibition on the sale of the junior accessory dwelling unit separate from
the sale of the single-family residence, including a statement that the deed restriction may
be enforced against future purchasers.
(b) A restriction on the size and attributes of the junior accessory dwelling unit
that conforms to this section.
4) A permitted junior accessory dwelling unit shall be constructed within the existing
walls of the structure, and require the inclusion of an existing bedroom.
5) A separate entrance from the main entrance to the structure is required, with an
interior entry to the main living area. A permitted junior accessory dwelling may include
a second interior doorway for sound attenuation.
6) An efficiency kitchen for the junior accessory dwelling unit is required, and shall
include:
(a) A sink with a maximum waste line diameter of 1.5 inches.
(b) A cooking facility with appliances that do not require electrical service greater
than 120 volts or natural or propane gas.
(c) A food preparation counter and storage cabinets that are of reasonable size in
relation to the size of the junior accessory dwelling unit.
C. Additional parking is not required for a junior accessory dwelling unit.
D. For purposes of providing service for water, sewer, or power, including a connection
fee, a junior accessory dwelling unit shall not be considered a separate or new dwelling
unit.
Section II.
Chapter 19.04 DEFINITIONS
19.04.087 Dwelling, accessory dwelling unit.
2018-04-10 Agenda Packet Page 90
19.04.087 Dwelling, accessory dwelling unit.
“Accessory dwelling units or junior accessory dwelling units” are independent living
facilities of limited size that provide permanent provisions for living, sleeping, eating,
cooking, and sanitation on the same parcel as a single-family dwelling. This includes
efficiency units and manufactured homes, in conformance with the requirements for such
units as defined in State Government Code Section 65852.2.
Section III.
Chapter 19.20 AGRICULTURAL ZONE
19.20.030 Accessory uses and buildings.
Accessory uses and buildings customarily incidental to any of the above uses permitted in
the agriculture zone, subject to the regulations for such as required herein, include:
I. Accessory dwelling units, subject to the provisions of CVMC 19.58.022.
Section IV.
Chapter 19.22 R-E – RESIDENTIAL ESTATES ZONE
19.22.030 Accessory uses and buildings.
Accessory uses and buildings customarily incidental to any of the above uses shall be
permitted in the R-E zone subject to the regulations herein:
H. Accessory dwelling units,subject to the provisions of CVMC 19.58.022;
Section V.
Chapter 19.24 R-1 – SINGLE-FAMILY RESIDENCE ZONE
19.24.030 Accessory uses and buildings.
Accessory uses permitted in the R-1 zone include:
K. Accessory dwelling units,subject to the provisions of CVMC 19.58.022;
Section VI.
Chapter 19.26 R-2 – ONE- AND TWO-FAMILY RESIDENCE ZONE
19.26.030 Accessory uses and buildings.
The following are the accessory uses permitted in an R-2 zone:
G. Accessory dwelling units on lots developed with a single-family dwelling, subject to
the provisions of CVMC 19.58.022;
Section VII.
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Chapter 19.28 R-3 – APARTMENT RESIDENTIAL ZONE
19.28.030 Accessory uses and buildings.
Accessory uses and buildings in the R-3 zone include:
H. Accessory dwelling units on lots developed with a single-family dwelling, subject to
the provisions of CVMC 19.58.022.
Section VIII.
Chapter 19.48 P-C – PLANNED COMMUNITY ZONE
Sections:
19.48.145 P-C zone – Accessory dwelling units.
19.48.145 P-C zone – Accessory dwelling units.
Accessory dwelling units may be permitted within single-family residential areas within
the planned community zone subject to the provisions of CVMC 19.58.022 and the
provisions of the respective general development plans and sectional planning area plans
for each particular planned community.
Section IX. Severability
If any portion of this Ordinance, or its application to any person or circumstance, is for
any reason held to be invalid, unenforceable or unconstitutional, by a court of competent
jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability
or unconstitutionality shall not affect the validity or enforceability of the remaining
portions of the Ordinance, or its application to any other person or circumstance. The
City Council of the City of Chula Vista hereby declares that it would have adopted each
section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one
or more other sections, sentences, clauses or phrases of the Ordinance be declared
invalid, unenforceable or unconstitutional.
Section X. Construction
The City Council of the City of Chula Vista intends this Ordinance to supplement, not to
duplicate or contradict, applicable state and federal law and this Ordinance shall be
construed in light of that intent.
Section XI. Effective Date
This Ordinance shall take effect and be in force on the thirtieth day after its final
passage.
Section XII. Publication
The City Clerk shall certify to the passage and adoption of this Ordinance and
shall cause the same to be published or posted according to law.
2018-04-10 Agenda Packet Page 92
Presented by:Approved as to form by:
_____________________________________ ____________________________
Kelly G. Broughton, FASLA Glen R. Googins
Director of Developmental Services City Attorney
2018-04-10 Agenda Packet Page 93
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ORDINANCE NO.
ORDINANCE OF THE CITY OF CHULA VISTA AMENDING
CHULA VISTA MUNICIPAL CODE CHAPTER 3.32
(RESIDENTIAL CONSTRUCTION TAX) TO EXEMPT
ACCESSORY DWELLING UNITS AND JUNIOR ACCESSORY
DWELLING UNITS FROM THE RESIDENTIAL
CONSTRUCTION TAX AND AMENDING CHAPTER 17.10
(PARKLANDS AND PUBLIC FACILITIES) TO WAIVE
ASSESSMENT OF PARKLAND ACQUISITION AND
DEVELOPMENT FEES FOR ACCESSORY DWELLING
UNITS AND JUNIOR ACCESSORY DWELLING UNITS
WHEREAS, Chula Vista Municipal Code (CVMC) Chapter 3.32 requires that all
residential development constructed in the City of Chula Vista be assessed a residential
construction tax (RCT) to generate revenue to offset the burden imposed upon the public
facilities and infrastructure of the City as a result of new residential development; and
WHEREAS, CVMC Section 3.32.050 provides for waiving the RCT for dwelling units in
the City that would serve as housing for low- and moderate-income families with the
recommendation of the Planning Commission; and
WHEREAS, CVMC Section 17.10.010 requires that new residential development
dedicate land and develop improvements for park and recreation purposes; and
WHEREAS, CVMC Section 17.10.070 allows for the payment of in-lieu Parkland
Acquisition and Development (PAD) fees for land dedication and park development
improvements; and
WHEREAS, CVMC Section 17.10.070 provides for waiving PAD Fees by resolution of
the City Council in the interests of stimulating the construction of housing for low- and
moderate-income families; and
WHEREAS, in January 2017, the State of California enacted Senate Bill 1069, Assembly
Bill 2299, and Assembly Bill 2406 to address the statewide affordable housing demand requiring
a ministerial approval process for Accessory Dwelling Units (ADUs) and Junior Accessory
Dwelling Units (JADUs); and
WHEREAS, in conjunction with this item, the City Council is considering an ordinance
that revises Title 19 “Planning and Zoning” of the CVMC to address amendments required by
Senate Bill 1069 and Assembly Bill 2299; and
WHEREAS, the findings in Government Code Section 65852.150(b) as amended by
Senate Bill 1069 indicate that ADUs are an essential component of California’s housing supply
and that the intent of the legislation is to ensure that fees among other local agency imposed
2018-04-10 Agenda Packet Page 94
Ordinance
Page 2
requirements are not arbitrary, excessive, or burdensome to unreasonably restrict the ability of
homeowners to create ADUs in zones in which they are authorized; and
WHEREAS, waiving the RCT and PAD Fees assessed on building permits for ADUs and
JADUs is in accordance with the stated intent in Government Code Section 65852.150; and
WHEREAS, the City Council has reviewed the proposed action for compliance with the
California Environmental Quality Act (CEQA) and hereby finds and determines that the action is
not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore,
pursuant to Section 15060(c)(3) of the State CEQA Guidelines the action is not subject to
CEQA. Notwithstanding the foregoing, the City Council also hereby finds and determines that
the action qualifies for an Exemption pursuant to Section 15061(b)(3) of the State CEQA
Guidelines; therefore, no further environmental review is required.
NOW THEREFORE the City Council of the City of Chula Vista does hereby ordain as
follows:
Section I.The following paragraph is hereby added to the end of Section 3.32.030
“Definitions.”, part “A”of the CVMC:
The term “dwelling unit” for the purposes of this chapter excludes “Accessory Dwelling
Units” or “Junior Accessory Dwelling Units” as defined in CVMC 19.58.022 and
19.58.022(a), respectively.
Section II.Section 3.32.050 “Waiver of tax requirements.” of the CVMC is hereby
replaced in its entirety with the following:
Resolution of City Council. The City Council may, by resolution, waive this tax for any
of the said dwelling-unit types listed hereinabove in this chapter to be constructed or
converted within the already developed and previously subdivided urban core of the city
or for any dwelling unit types constructed anywhere within the city that would serve as
housing for low- or moderate-income families.
Section III.The following part “C” is hereby added to the end of Section 17.10.070
“In-lieu fees for dedication and/or park development improvements.” of the CVMC:
C. Land Uses Exempt from In-Lieu Fees. “Accessory Dwelling Units” and “Junior
Accessory Dwelling Units” as defined in CVMC 19.58.022 and 19.58.022(a),
respectively, are exempt from payment of in-lieu fees for park land dedication and park
development as they offer lower cost housing supply to low- and moderate-income
families.
Section IV. Severability
If any portion of this Ordinance, or its application to any person or circumstance, is for
any reason held to be invalid, unenforceable or unconstitutional, by a court of competent
jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or
unconstitutionality shall not affect the validity or enforceability of the remaining portions of the
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Ordinance
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Ordinance, or its application to any other person or circumstance. The City Council of the City of
Chula Vista hereby declares that it would have adopted each section, sentence, clause or phrase
of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses
or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional.
Section V. Construction
The City Council of the City of Chula Vista intends this Ordinance to supplement, not to
duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in
light of that intent.
Section VI. Effective Date
This Ordinance shall take effect and be in force on the thirtieth day after its final passage.
Section VII. Publication
The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause
the same to be published or posted according to law.
Presented by:Approved as to form by:
_____________________________________ ____________________________________
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
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City of Chula Vista
Staff Report
File#:18-0140, Item#: 4.
CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING LITIGATION PURSUANT TO
GOVERNMENT CODE SECTION 54956.9 (d)(1)
A. Name of case:Jason Jones v. City of Chula Vista, et al., San Diego Superior Court, Case
No. 37-2017-33222-CU-PO-CTL
B. Name of case:Connie Romero v. City of Chula Vista, et al., San Diego Superior Court,
Case No. 37-2017-815-CU-PO-CTL
City of Chula Vista Printed on 4/5/2018Page 1 of 1
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