A. Minutes of the Special Annual Meeting held August 29, B. Minutes of the Special Meeting held September 11, 2018

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1 1. Roll Call HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ AGENDA OF THE REGULAR BOARD MEETING September 26, :30 a.m. TO BE HELD AT: HOUSING AUTHORITY OFFICES st Avenue, Capitola, CA Consideration of Late Additions and Changes to the Agenda 3. Consent Agenda A. Minutes of the Special Annual Meeting held August 29, 2018 Motion to Approve as Submitted B. Minutes of the Special Meeting held September 11, 2018 Motion to Approve as Submitted 4. Oral Communications (All oral communications must be directed to an item not listed on this agenda and must be within the jurisdiction of the Board. Presentations must not exceed three minutes in length. The Board will not take action or respond immediately to any Oral Communication presented, but may choose to follow up at a later time or schedule item for a subsequent agenda. The Board may limit the total amount of time allowed for oral communication). Anyone addressing the Board of Commissioners is asked to complete a card and leave it with the Board secretary so that their names may be accurately recorded in the Minutes. 5. Unfinished Business 6. New Business A. Presentation Regarding Proposed Affordable Housing Solutions Bond (Measure H) Receive Presentation B. Employee Compensation: COLA, Flex Fund, Cash in Lieu Motion to approve 3% COLA, no change to Flex Fund contribution or Cash in Lieu C. Amendment to the Administrative Plan Waiting List Motion to approve the amendment to the Section 8 Housing Choice Voucher Administrative Plan. 7. Written Correspondence 8. Report of Executive Director 9. Reports from Board Members

2 (Board members may report on meetings attended, if any, or other items of interest.) 10. Closed Session (The Board will recess to discuss those items listed, if any.) 11. Report on Closed Session 12. Adjournment *The Housing Authority complies with the Americans with Disabilities Act. If you are a person with disabilities and you require special assistance in order to participate, please contact the Board secretary at , ext. 201 at least 72 hours in advance of the meeting in order to make arrangements. Persons with disabilities may request a copy of the agenda in an alternative format. Spanish language translation is available on an as needed basis. Please make arrangements 72 hours in advance by contacting the Housing Authority at , ext Agendas can be obtained from the Housing Authority of the County of Santa Cruz Administration Department.

3 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL ANNUAL MEETING AUGUST 29, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CA AGENDA ITEM NO. 1 Roll Call Chairperson Berg called the meeting to order at 11:31a.m. Members present Commissioners Berg, Brunner, Eligio, Garcia, Pomerantz, Schiffrin and Schmale Members Absent None. Staff Present Jennifer Panetta and Courtney Byrd of the Housing Authority AGENDA ITEM NO. 2 None. AGENDA ITEM NO. 3 Consideration of Late Additions or Changes to the Agenda Consent Agenda Chairperson Berg asked for a motion to approve the Consent Agenda. Commissioner Schiffrin moved for approval of the Consent Agenda; Commissioner Brunner seconded the motion and it was passed by the following vote: AYES: NOES: ABSENT: ABSTAIN: Commissioners Berg, Brunner, Eligio, Garcia, Pomerantz, Schiffrin and Schmale None None None Agenda Item 3A. Approval of Minutes of the Regular Meeting held June 27, 2018 Agenda Item 3B. Adopted Resolution No Resolution Authorizing the Submittal of Renewal and Expansion Grant Applications, the Execution of Renewal and Expansion Grant Agreements and Any Amendments Thereto, and Any Other Documents Necessary to Secure U.S. Department of Housing and Urban Development (HUD) Shelter Plus Care (S+C) and New Beginnings Program Grants Agenda Item 3C. Adopted Resolution No Resolution Authorizing the Submittal of a Grant Application, the Execution of a Grant Agreement and Any Amendments Thereto, and Any Other Documents Necessary to Secure a U.S. Department of Housing and Urban Development (HUD) Continuum of Care Supportive Housing Program Grant Agenda Item 3D. Adopted Resolution No Resolution Retroactively Authorizing Submission of an Application to the U.S. Department of Housing and Urban Development (HUD) and Authorizing Execution of an Annual Contributions Contract (ACC) for 24 Additional Housing Choice Vouchers under the Veterans Affairs Supportive Housing (VASH) Program 1

4 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL ANNUAL MEETING AUGUST 29, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CA Agenda Item 3E. Adopted Resolution No Naming the Main Offices of the Housing Authority of the County of Santa Cruz the Mary McKenzie James Office Building AGENDA ITEM NO. 4 Oral Communications Six members of the public addressed the Board of Commissioners: Cynthia Berger, Janine Theodore, Nora Hochman, Sarah Anderson, Paula Mack, Ernestina Saldana. AGENDA ITEM NO. 5 None. AGENDA ITEM NO. 6A Unfinished Business Presentation Regarding Proposed Rent Control and Just Cause Eviction Ordinance Fred Antaki, Chair of Local Government Affairs Committee and Board Director of the Santa Cruz County Association of Realtors, and Lynn Renshaw, Director of Santa Cruz Together presented information opposing the proposed Rent Control and Just Cause Eviction Ordinance which will be appearing on the City of Santa Cruz ballot this November. Four members of the public addressed the Board of Commissioners regarding the proposed Rent Control and Just Cause Eviction Ordinance: Cynthia Berger, Janine Theodore, Jeffrey Smedberg, Sandy Brown. A discussion followed. The Board of Commissioners discussed how the proposed ordinance could impact the Section 8 program. Additionally, the Board discussed the Agency s role in providing information to program participants regarding the temporary emergency ordinances. The Board directed staff to add additional information on the Housing Authority website summarizing the provisions of the temporary ordinances and noting their applicability to Section 8. The Board also suggested staff having further training on the ordinances in order to answer questions from Housing Choice Voucher participants, and direct them to the resources where they can get additional information and assistance. Secretary Panetta and the Board of Commissioners thanked the presenters and the public members for addressing the Board. AGENDA ITEM NO. 6B Election of Officers Chairperson Berg opened the nominations for the position of Chairperson and Vice-Chairperson for the Board of Commissioners as the August meeting is the Annual Meeting. Commissioner Garcia nominated Commissioner Berg as Chairperson. Commissioner Berg declined the nomination. Commissioner Berg nominated Commissioner Brunner as Chair. Commissioner Brunner nominated Commissioner Schiffrin. Commissioner Schiffrin declined the nomination. Commissioner Brunner accepted the nomination. 2

5 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL ANNUAL MEETING AUGUST 29, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CA Commissioner Schiffrin moved to close nominations for Chairperson; Commissioner Brunner seconded the motion and it was passed by the following vote: AYES: NOES: ABSENT: ABSTAIN: Commissioners Berg, Brunner, Eligio, Garcia, Pomerantz, Schiffrin and Schmale None None None Commissioner Brunner nominated Commissioner Schiffrin as Vice-Chairperson. Commissioner Pomerantz nominated Commissioners Schmale, Garcia and Eligio as Vice- Chairperson each declined the nomination. Commissioner Schiffrin accepted the nomination as Vice-Chairperson. Commissioner Schiffrin moved to close nominations for Vice-Chairperson; Commissioner Garcia seconded the motion and it was passed by the following vote: AYES: NOES: ABSENT: ABSTAIN: Commissioners Berg, Brunner, Eligio, Garcia, Pomerantz, Schiffrin and Schmale None None None The nominations of Commissioner Brunner for Chairperson and Commissioner Schiffrin for Vice- Chairperson were passed by the following vote: AYES: NOES: ABSENT: ABSTAIN: Commissioners Berg, Brunner, Eligio, Garcia, Pomerantz, Schiffrin and Schmale None None None Commissioner Brunner took over as Chairperson. AGENDA ITEM NO. 6C Section 8 Management Assessment Program (SEMAP) Secretary Panetta explained to the Board that this is the annual self-assessment for the Section 8 program for the Housing Authority of the County of Santa Cruz. According to our internal analysis, we expect the Housing Authority to once again be designated High Performer. A discussion followed. The Board thanked staff for their excellent work. Commissioner Schiffrin moved to adopt Resolution No ; Commissioner Garcia seconded the motion and it was passed by the following vote: 3

6 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL ANNUAL MEETING AUGUST 29, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CA AYES: NOES: ABSENT: ABSTAIN: Commissioners Berg, Brunner, Eligio, Garcia, Pomerantz, Schiffrin and Schmale None None None AGENDA ITEM NO. 6D Consideration of the Role of the Housing Authority in the Development of Affordable Housing Secretary Panetta explained to the Board that the Housing Authority (HA) has historically engaged in affordable housing development. The Housing Authority was an active developer from , but ultimately stopped developing housing due to the difficulties and costs of developing in this housing market. When the HA was an active developer, the HA had a Development Director on staff. With current staff, HA has limited capacity to increase its role in affordable housing development. Previously, one Commissioner suggested that the HA inquire with the County about the possibility of utilizing funds from the Housing Services Contract to help support the cost of a Development Director on staff. Planning department staff indicated that this may be possible, but that the County would need specific information about how the County and community would benefit from investing in the Housing Authority s capacity to develop housing. The HA purchased the adjacent property on Natural Bridges Drive with the intention of developing affordable housing on the site. Based on Board feedback, the HA has already begun a conversation with the City of Santa Cruz to discuss a zoning change that may increase the allowable density, and will pursue information about increasing the size of the parcel (encroaching into the parking lot of 2931 Mission Street) once the Mission Street building is under lease. A discussion followed. At this time, the Board directs staff to proceed with developing affordable housing on the Natural Bridges Drive property and to provide the Board with a plan and timeline for the development. AGENDA ITEM NO. 8 Report of Executive Director Chairperson Brunner asked the Board of Commissioners if they had any questions on the Report of Executive Director. Commissioner Garcia informed the Board that there will be a Yes on H Campaign kickoff (the Affordable Housing Bond) at the MAH, on September 4 th. Commissioner Pomerantz requested that there be an agenda item on the agenda regarding the Affordable Housing Bond at the September meeting. 4

7 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL ANNUAL MEETING AUGUST 29, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CA AGENDA ITEM NO. 9 Reports from Board Members Commissioner Garcia informed the Board that she attended a workshop for Commissioners at the NAHRO s Summer Conference in San Francisco. Deputy Executive Director Mark Failor entered the meeting at 2:20 p.m. The Board of Commissioners entered Closed Session at 2:20 p.m. AGENDA ITEM NO. 10 Closed Session A. Lease negotiations for 2931 Mission The Board of Commissioners exited Closed Session at 2: 50 p.m. AGENDA ITEM NO.11 Report on Closed Session No action taken. AGENDA ITEM NO. 12 Adjournment The Board of Commissioners meeting was adjourned at 2:51 p.m. I hereby certify that these minutes were approved by the Housing Authority of the County of Santa Cruz, on the Twenty Sixth day of September, ATTEST: Chairperson of the Authority Secretary 5

8 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL MEETING HELD SEPTEMBER 11, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CALIFORNIA AGENDA ITEM NO. 1 Roll Call The Special Meeting was called to order at 1:30 p.m. Members present at Housing Authority site; Commissioner Schmale. Members in attendance via teleconference: Commissioner Brunner Commissioner Garcia Commissioner Pomerantz Members Absent Commissioners Eligio, Berg and Schiffrin (excused) Staff Present Jenny Panetta and Mark Failor of the Housing Authority AGENDA ITEM NO. 2 None. AGENDA ITEM NO. 3 None. AGENDA ITEM NO. 4 Changes and Additions to the Agenda Oral Communications Closed Session A. Lease Negotiations for 2931 Mission Street Commissioner Garcia moved to approve the Lease Terms and Direct the Executive Director to Execute a Lease with Toadal Fitness for 2931 Mission Street, Santa Cruz, CA; Commissioner Schmale seconded the motion and it was passed by the following vote: AYES: NOES: ABSENT: ABSTAIN: Commissioners Brunner, Garcia, Pomerantz and Schmale None Commissioners Berg, Eligio and Schiffrin None AGENDA ITEM NO. 5 Adjournment The Special Meeting of the Board of Commissioners adjourned at 2:00 p.m. 1

9 HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, MINUTES OF THE SPECIAL MEETING HELD SEPTEMBER 11, 2018 AT THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ, ST AVENUE, CAPITOLA, CALIFORNIA I hereby certify that these minutes were approved by the Housing Authority of the County of Santa Cruz, on the Twenty Sixth of September, 2018 Chairperson of the Authority ATTEST: Secretary 2

10 AGENDA ITEM SUMMARY MEETING DATE: September 26, 2018 ITEM NUMBER: 6A FROM: Executive Director SUBJECT: Presentation Regarding Proposed Affordable Housing Solutions Bond (Measure H) RECOMMENDATION: Receive Presentation BACKGROUND SUMMARY: The Affordable Housing Bond working group known as Affordable Housing Santa Cruz County submitted a proposal to the Santa Cruz County Board of Supervisors at their August 7 th meeting, to request placing a Housing Solutions Bond on the November ballot. After taking input from community members and elected officials, a specific proposal was shaped for a $140 million bond measure. On Tuesday August 7 th, the Board of Supervisors unanimously approved the proposal to place the Affordable Housing Solutions Bond (Measure H) on the ballot for the November election. Former Santa Cruz Mayor Don Lane will attend the meeting to conduct a presentation regarding Measure H. Attached for review is the full text of the ballot measure itself, as well as the County Board of Supervisors staff report with additional detail. RECOMMENDATION: Receive Presentation HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ

11 Full text of Measure H BOND AUTHORIZATION The Board of Supervisors of the County of Santa Cruz recognizes the existence of a housing crisis in Santa Cruz County: The rising costs of home ownership and the increasing cost of rental units throughout the county have resulted in housing insecurity and a persistently high number of homeless individuals within Santa Cruz County. The latest homeless count revealed a total of 2,250 homeless individuals in Santa Cruz County with 1,800 unsheltered. In response to this housing crisis, the Board of Supervisors is placing a general obligation bond on the ballot to generate up to $140,000,000 to aid in the acquisition or improvement of real property in order to provide affordable local housing for working families and vulnerable populations including veterans, seniors, low- and moderate-income households, persons with disabilities, homeless individuals and families; and supportive housing for individuals suffering from mental health illnesses or substance abuse disorders. "Low-income" means households whose income does not exceed 80% of area median income. "Moderate-income" means households whose income lies in the range of 80% to 120% of area median income. The housing may be provided at below market rates. A portion of the proceeds, not to exceed $119,000,000, with not more than $14,000,000 for firsttime homebuyers, may be used to provide housing that is affordable for low- and moderateincome households; such portion may be used, by way of example only, for first-time homebuyers or to promote housing that is in proximity to employment. Even though housing for working families and vulnerable populations is currently being built, the number of units available does not satisfy the projected demand within our community. The Board of Supervisors intends to distribute the new affordable housing units within the County and to leverage the resources acquired through this bond to attract both private and public matching funds, including from state and federal sources. Different forms of assistance for working families and vulnerable populations may be provided based on programs and spending as determined by the Board of Supervisors. The Board of Supervisors views housing as a critical need of working families and vulnerable populations, without which individuals in these populations are unlikely to achieve any level of stability. Creating and improving housing for the County's working families and vulnerable populations is consistent with the County s vision to promote a healthy, safe and more affordable community, the County's mission to deliver quality, data-driven services that strengthen our community and enhance opportunity, and the County s goals in the area of Attainable Housing. The County is seeking to achieve this in a cost-effective way. Approval of this general obligation bond proposition shall constitute the approval of the provision of up to 1,041 units of affordable housing as required by Article XXXIV of the California Constitution. ACCOUNTABILITY SAFEGUARDS Statement of Purpose: The specific purposes of the bond are to fund the acquisition or improvement of real property in order to provide affordable local housing for working families

12 and vulnerable populations including veterans, seniors, low- and moderate-income households, persons with disabilities, homeless individuals and families; and supportive housing for individuals suffering from mental health illnesses or substance use disorders. The proceeds of any bonds issued pursuant to this bond measure will be applied only to these specific purposes. Special Bond Proceeds Account: The proceeds of the bonds issued pursuant to this measure shall be deposited in a special account created by the County. Annual Report: The County will ensure that an annual report pursuant to Government Code section describing the amount of funds collected and expended, and the status of any project required or authorized to be funded, shall be filed with its governing body; Independent Oversight Committee: An Oversight Committee including citizen representatives will be established and will review the annual report each year to ensure fiscal accountability. Independent and External Audit: An independent, external auditor will review the County's spending of bond proceeds to ensure accountability.

13 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 1 8/8/2018 Santa Cruz County CA Agenda Item DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a maximum of $140 million for the purpose of financing affordable housing projects and programs to the qualified voters of the County of Santa Cruz at the General Election to be held on November 6, 2018, and take related actions, as outlined in the memorandum of Supervisors Friend and Coonerty Information Department: Board of Supervisors: Administration Sponsors: Second District Supervisor Zach Friend, Third District Supervisor Ryan Coonerty Attachments Board Memo Resolution Calling Election, Affordable Housing (esign) 04 revised Memo, packet page 14 (clean & strikeout-underline) 04_Web comments, Citizens_UserDiscussion (Upload New Attachment) Financial Impact Expenses related to issuance of the bonds, program/project delivery and bond-funded programs would be paid out of the bond proceeds. Housing Bond debt service would be paid through a property tax on assessed value. Bond proceeds are restricted to capital investments for a public purpose. The capital project cost can also include all the soft costs associated with the improvement such as constructiondesign, architecture, land use actions, and construction management. Costs for administering specific programs or overseeing specific projects could have an impact on the General Fund by requiring additional staff time or contracted services to carry out these responsibilities. Board Letter Recommended Action(s): 1) Accept and file report on an affordable housing bond measure; 2) Adopt resolution calling and providing for bond election to be consolidated with the November 6, 2018 General Election for the purpose of submitting to the qualified electors of Santa Cruz County the proposition of whether or not to authorize the issuance of general obligation bonds in an amount not to exceed $140 million for affordable housing and reduction of homelessness. Bonds will be repaid through a property tax assessment of an estimated maximum levy of $16.77 per $100,000 of assessed valuation through maturity; 3) Advise the Auditor-Controller-Treasurer-Tax-Collector and County Counsel of the requirements for independent analysis contained in the resolution and to transmit it to the Santa Cruz County Clerk no later than 5:00 pm on August 17, 2018;

14 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 2 8/8/2018 4) Direct the Clerk of the Board to file a certified copy of the resolution and order with the Santa Cruz County Clerk no later than 5:00 pm on August 10, 2018; 5) Direct the Clerk of the Board to publish in one or more newspapers the order calling and providing for the bond election once a week for at least four weeks, per California Government Code Section 29906; and 6) Direct the County Administrative Office and County Counsel to return after the November 6, 2018 General Election with an ordinance to guide use of the proceeds of the $140 million general obligation bond for affordable housing and reduction of homelessness should the measure be authorized by voters. Executive Summary In November 2018, Santa Cruz County voters will have an opportunity to direct more resources towards addressing a range of critical affordable housing needs and reducing the homeless population by passing a general obligation bond measure. The measure, a $140 million general obligation bond, will create new affordable rental and homeowner housing units and assist existing low-income and vulnerable residents in need. Background The Need for Affordable Housing Santa Cruz County is one of the least affordable places in the world according to a recent international affordable housing study. With a median home price of over $900,000 for a singlefamily residence and $570,000 for a condominium or townhouse, homeownership is out of reach for the vast majority of Santa Cruz County residents. According to the California Association of Realtors Traditional Housing Affordability Index, only about 15% of households can afford to purchase the median priced home. The rental housing market fares no better, with the rent for a two-bedroom apartment registering at around $3,200 according to data on Zillow for May 2018 and Rent Jungle for June High housing costs inhibit the sustainability of our community and of our workforce. Individuals and families are increasingly locked out of the local housing market and forced to take on increasingly long commutes to reach employment. High housing costs also exacerbate other challenges our community is confronting, including economic opportunity and vitality, traffic congestion, greenhouse gas generation and homelessness. In addition, when households spend more than half their incomes on housing costs, they have significantly less money to pay for other necessary expenses such as childcare, medical expenses, and food, as well as less discretionary income to spend at local businesses. The difference between an affordable housing cost and market-rate housing cost is commonly called the housing affordability gap. In recent years, the impact of this affordability gap has expanded beyond low-income households, which traditionally have been the focus of governmental assistance programs, to include moderate income households, such as those of teachers and public safety first responders. The charts below indicate the affordability gap at various levels of area median income for both a two-bedroom rental and homeownership in Santa Cruz County. The information is based on monthly prices and a median household income of $77,613. Home ownership pricing assumes a $900,000 home with 20% down ($180,000) and a 30-year fixed rate mortgage at 4.35%.

15 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 3 8/8/2018 A monthly rental cost of $3,200 is almost 55% of monthly median income, while the standard advocated is to spend no more than 30% of your income on housing. With monthly market rate costs for housing at $3,200 for a two-bedroom rental, even at 120% of Area Median Income (AMI), or $93,316 annually, a household would only be able to afford monthly rent costs of $2,910, which is more than 37% of income. A monthly mortgage cost of $3,584 is over 51% of monthly median income. Thus, a median income earner could only afford $2,166 for a mortgage (not even considering the amount needed to save for a down payment). Santa Cruz County has a poverty rate of 15.08% according to American Community Survey 5-Year Estimates from the U.S. Census bureau. The Federal government defines the poverty line as income of $25,100 a year for a family of four and $12,140 for an individual based 2018 guidelines. At the 30% of income threshold, housing costs could not exceed $628 per month for a family of four. But even for those with higher wages, increases in incomes are not keeping pace with rapidly

16 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 4 8/8/2018 increasing housing costs. Therefore, housing production and the availability of housing affordable to a wider range of households has become more important than ever. Note 2018 median income is 2016 data adjusted for inflation Projected Future Housing Needs The Association of Monterey Bay Area Governments (AMBAG) provides estimates of housing need through its Regional Housing Need Assessment (RHNA), conducted every seven years. Limited funding resources and the high cost of housing development mean that the County s supply of affordable housing will be challenged to keep pace with future demand. The table below summarizes the RHNA allocations for each jurisdiction within Santa Cruz County for the period of 2014 through State Housing Bond In 2017, the State Legislature passed a series of bills that made changes to Accessory Dwelling Unit regulations and provided new pathways for the creation of housing if it met certain affordability requirements. Part of the package of bills included the placement of a $4.1 billion bond on the November 2018 statewide ballot for the specific purpose of creating affordable housing. State housing funding programs typically favor local projects that demonstrate a local fund match. If the current state housing bond is approved by voters as expected, Santa Cruz County jurisdictions will be significantly disadvantaged in seeking state funds if a local funding source is not available. A

17 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 5 8/8/2018 local housing bond proposal would eliminate that disadvantage, allowing County jurisdictions to compete effectively for state funds. Local Housing Bond Community stakeholders and leaders concerned about the severe shortage of affordable housing for local working families and other vulnerable community members began meeting approximately 16 months ago to discuss the potential of placing a bond measure before local voters to assist in funding affordable housing within Santa Cruz County. The team, known as Affordable Housing Santa Cruz County, conducted community meetings, stakeholder meetings and public opinion surveys to develop several priorities and criteria for such an action. Their work was based in part on that of several Bay Area counties who have successfully passed housing bonds or otherwise developed voter supported funding for the creation of affordable housing and reduction of homelessness within their communities. Affordable Housing Santa Cruz County identified the following as priority housing needs and stakeholders have expressed a desire for any affordable housing bond to address the following: 1. Housing that addresses the RHNA of Santa Cruz County and its incorporated cities, which provides a roadmap to address the needs of local workers, including farmworker and tourism industry employees and their families, as well as essential public servants like teachers, first responders, and health workers, via a mix of affordable rental and ownership opportunities. 2. Interim shelter and permanent supportive housing for families and individuals experiencing homelessness. 3. Accessible, well-located housing for seniors on fixed or limited incomes, veterans, families, and people living with disabilities. 4. Housing near transit and job and service centers that incorporates green-building and alternative-building technologies and focuses housing development in the county s urban service area and areas that each city has already zoned for housing. Acknowledging the well-documented affordability gap for both rental and ownership housing across a range of income levels, in May 2018 the Board of Supervisors directed the County Administrative Officer and County Counsel to work with County staff and other jurisdictions to research funding opportunities and develop affordable housing options that can be created using these funding opportunities, and to develop a list of affordable housing priorities to be recommended to the Board. To that end the interjurisdictional Housing Task Force (HTF) was created. The HTF consisted of representation from each city and the County and was tasked with the following: 1. Review the work done to date by Affordable Housing Santa Cruz County regarding the affordable housing bond measure at a local level. 2. Determine a recommended distribution of the proceeds of potential local housing bonds among different types of housing initiatives and jurisdictions. 3. Recommend a governance structure for the distribution of the proceeds. 4. Review a list and timing of potential affordable housing projects in each of the jurisdictions that will be key for the development of the Tax Rate Statement for such bonds.

18 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 6 8/8/2018 The HTF identified the following as the goals for their work and any funds received through the successful passage of a local bond measure for affordable housing: Build new housing that benefits very low, low and moderate income economic sector of our community. Have a preponderance of rental housing for new construction. Build in flexibility for programs and cross-jurisdictional collaboration. Create funding to encourage capital investments. In addition, the HTF had as guiding principles that: All parts of the County should share in the benefits of serving their residents through a range of programs. Jurisdictions should maintain maximum control over their project funding, while creating the most affordable housing possible by leveraging funding dollars for the greatest impact. Build on successful program models already in place such as Manufactured home change-outs and project-based first-time home-buyer programs. Keep project costs reasonable by leveraging funds wherever possible. Analysis Program Description Following on the work done by Affordable Housing Santa Cruz County, the HTF determined that a maximum $140 million bond issuance, with a recommended $100 million to be issued in 2020 and $40 million to be issued in 2027, will help to address the affordability gap, as well as the destabilization that occurs when market pressures in communities result in residents being forced out of the County entirely to find housing they can afford. The HTF recommends the following for the categorical allocation of funds based on the assumption of a $140 million bond issuance.

19 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 7 8/8/2018 Funding Allocations The HTF determined that for the most effective use of funding, the homelessness allocation of $21 million would not be allocated by jurisdiction but would be one regional pool used to develop specific projects that would serve all regions of the County. However, the other two categories of Housing Preservation and Production and Homeownership, totaling $119 million, would be allocated across the five jurisdictions. The HTF examined a variety of methods for equitable distribution of the $119 million of housing bond proceeds, including population, proportion of assessed value, RHNA allocation for low and very low income, and percentage of population in poverty. Each method individually and in a mixture of blends had an impact on jurisdictional allocation - either advantaging or disadvantaging some jurisdictions over others. The HTF concluded that a blended allocation which includes all the elements of population, assessed value, RHNA allocation and poverty (weighted equally) resulted in the most equitable allocation of the funding. The base values for each category would be updated prior to each issuance of the two bond issuances.

20 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 8 8/8/2018 Housing Production The HTF examined the potential in each jurisdiction for housing development based on land availability, potential tax credits, community need, and type of units (rental housing, ADUs, etc.). Some jurisdictions have identified opportunity sites, while others considered housing production more in terms of types of housing needed, such as specific estimates for farmworker or workforce housing. Based on all of these factors and the total allocation amount by jurisdiction, a total of 1,041 projected units were estimated for all jurisdictions. Governance The HTF is recommending that each jurisdiction s elected body govern the use of their allocation, including project selection. In the case of the regional funding allocation for Homelessness, the HTF recommends that for efficacy, it is best to use a structure already in place. Therefore, the Housing Advisory Partnership (HAP) Executive Committee, which includes representation from all jurisdictions, should serve as the governing body for the use of the homelessness allocated funds. Accountability Safeguards In addition, the following accountability safeguards are recommended: Creation of an Oversight Committee that would include one elected member (or their appointed subject matter expert) from each jurisdiction and one citizen appointed member for each city and two citizen appointed members for the County. This Oversight Committee would be established to review each year a comprehensive annual report to ensure that bond proceeds are being spent in compliance with the bond measure. In addition, the Committee would ensure that units are being produced and that other programs are functioning which meet community needs such that the goals of the program are being attained. It is recommended that the County provide staff to assist the Oversight Committee in its duties. Creation of a Special Bonds Proceeds Account by the County into which all of the bonds proceeds shall be deposited.

21 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of a... Page 9 Development of Annual Reports by each jurisdiction for reporting to their elected bodies and the public and one comprehensive report for the Oversight Committee. These annual reports should roughly parallel the timing of the General Plan Annual Reports and Redevelopment Successor Agency Annual Housing Reports that each jurisdiction is already required to prepare. Requirement that each jurisdiction must make a Commitment of Jurisdictional Funds to projects or programs within a maximum of 10 years from receipt of their allocation. Should funds not be committed within ten years of distribution, jurisdictions must distribute uncommitted funds to other jurisdictions in a manner of their choosing within the following year. A commitment will be defined as funds encumbered in an enforceable third-party contract. Requirement that jurisdictional allocations to projects reflect Maximum Funding of $170,000 per unit for new housing built and $80,000 per unit for Accessory Dwelling Units or Manufactured Home change-outs to ensure that each jurisdiction retain individual control over their own allocation while also safeguarding significant production of affordable housing units with the funding provided by the bond proceeds. Proposed funding above these limits would be subject to the approval of the Oversight Committee. Project Selection Criteria Each jurisdiction will provide detailed program policies and selection criteria and processes for the bond program to their elected bodies for approval. For the Unincorporated County, specific affordable housing developments to be financed with bond proceeds will be identified and presented to the County Board of Supervisors for approval after successful passage of the bond measure. Body Strategic Plan Elements: The Affordable Housing Bond Program address the County s goals in the area of Attainable Housing, including Affordable Housing, Local Inventory and Homelessness by developing funding to create more affordable housing countywide. Meeting History Aug 7, :00 AM Video Board of Supervisors Regular Meeting Draft 1) ACCEPTED AND FILED report on affordable housing bond measure; 2) ADOPTED Resolution No calling and providing for bond election to be consolidated with the November 6, 2018 General Election for the purpose of submitting to the qualified electors of Santa Cruz County the proposition of whether or not to authorize the issuance of general obligation bonds in an amount not to exceed $140 million for affordable housing and reduction of homelessness. Bonds will be repaid through a property tax assessment of an estimated maximum levy of $16.77 per $100,000 of assessed valuation through maturity; 3) Advised the Auditor-Controller-Treasurer-Tax-Collector and County Counsel of the requirements for independent analysis contained in the resolution and to transmit it to the Santa Cruz County Clerk no later than 5:00 pm on August 17, 2018; 4) Directed the Clerk of the Board to file a certified copy of the resolution and order with the Santa Cruz County Clerk no later than 5:00 pm on August 10, 2018; 5) Directed the Clerk of the Board to publish in one or more newspapers the order calling and providing for the bond election once a week for at least four weeks, per California Government Code Section 29906; and 6) Directed the County Administrative Office and County Counsel to return after the November 6, 2018 General Election with an ordinance to guide use of the proceeds of the $140 million general obligation bond for affordable housing and reduction of homelessness should the measure be authorized by voters RESULT: MOVER: ADOPTED [UNANIMOUS] Ryan Coonerty, Vice Chair, Third District Supervisor 8/8/2018

22 DOC Consider report and resolution to provide for the submission of a proposition incurring bonded debt of... Page /8/2018 SECONDER: AYES: Bruce McPherson, Fifth District Supervisor John Leopold, Zach Friend, Ryan Coonerty, Greg Caput, Bruce McPherson

23 AGENDA ITEM SUMMARY MEETING DATE: September 26, 2018 ITEM NUMBER: 6B FROM: Executive Director SUBJECT: Employee Compensation: COLA, Flex Fund, Cash in Lieu RECOMMENDATION: Approve 3% COLA, no change to Flex Fund contribution or Cash in Lieu BACKGROUND SUMMARY: 1- COLA: Cost of Living Adjustment The Housing Authority s Personnel Policies state, It is the policy of the Authority to consider cost of living adjustments annually. The most recent COLA of 2% was provided in July of This table shows the agency s history of COLAs over the past 10 years. Fiscal Year COLA % % % % % % % % % % According to the United States Bureau of Labor Statistics, the Consumer Price Index (CPI-U) for the San Francisco Area increased by 3.9% over the previous 12 months (July 2017 through June 2018). In order to keep our salaries competitive and respond to actual increases in the cost of living, management is proposing a 3% COLA to be effective July 1, The attached salary schedule reflects an across-the-board 3% increase. A 3% COLA would add approximately $140,000 to the agency personnel budget for FY As discussed during the budget approval process, Section 8 admin fee proration levels and lease up rates are the main determining factors in the agency s ability to afford a COLA. HUD recently announced a significant increase in the admin fee proration level for calendar year The new 80% admin fee proration level will increase funding by

24 roughly $175,000 compared to the budgeted 77% proration level for calendar year Furthermore, as of mid-september, the agency is on track to exceed the budgeted projections for voucher utilization for HUD has not announced admin fee proration levels for calendar year 2019 so there is uncertainty whether this funding trend will continue for the second half of the agency s fiscal year. 2- Flex Fund Contribution Attached is a spreadsheet showing: 1) the history of agency contributions towards employees Flex Fund accounts, and 2) the percentage of the cheapest health insurance plan covered by the agency contribution. Though rates will increase significantly on several CalPERS health insurance plans in 2019, the rates will decrease on three plans available to all staff, including a large decrease in the rate of the cheapest PPO (PERS Select, which will undergo significant plan design revisions) and a small decrease in the rates of the two cheapest HMOs (Kaiser Permanente and Anthem Select). If the agency Flex Fund contributions remain at current levels, the cheapest PPO (PERS Select) will cost employees $0 for any level of coverage (Single, 2 Party, or Family), and the cheapest HMO (Kaiser Permanente) will cost employees $ (Single), $ (2 Party), and $ (Family) per month. Management is proposing to maintain the flex fund contribution at current levels for 2019: $615 (Single), $1,229 (2 Party), and $1,598 (Family). 3- Cash-in-Lieu of Medical Insurance In 2011, the agency implemented a Cash-in-Lieu program, which provides monthly, taxable compensation to employees who: 1) are covered by other health insurance (usually a spouse s plan), and 2) waive health insurance through the Housing Authority. Twelve employees currently participate in this program. Management is proposing to maintain the Cash-in-Lieu payment for 2019 at the current level of $500. HOUSING AUTHORITY OF THE COUNTY OF SANTA CRUZ

25 Housing Authority of the County of Santa Cruz Proposed Salary Range/Step Chart Effective 7/1/2018 Pending Approval by Board of Commissioners 9/26/18 Monthly Hourly Job Title Range Step 1 Step 2 Step 3 Step 4 Step 5 Step 1 Step 2 Step 3 Step 4 Step 5 * * Administrative Clerk I * * Account Clerk I Maintenance Worker, Migrant Ctr. Administrative Clerk II Receptionist Administrative/Account Clerk * Account Clerk II Administrative Clerk III Assistant Migrant Ctr. Maintenance Mgr. Maintenance Worker I * Eligibility & Occupancy Specialist Property Specialist Administrative Clerk IV Housing Program Specialist Housing Resource Specialist Senior Eligibility & Occupancy Specialist Accounting Technician Leasing Specialist Maintenance Worker II * Eligibility & Occupancy Spec. Supervisor Housing Inspector

26 Migrant Center Manager Executive Secretary Housing Program Specialist Supervisor Housing Resource Specialist Supervisor Program Integrity Specialist Senior Accounting Technician * * * * Maintenance Coordinator * * Accountant Administrative Analyst Facilities Manager * Computer Tech. Support Analyst Senior Accountant Senior Administrative Analyst * * * Controller Human Resources Manager/Director Principal Administrative Analyst Information Technology Coordinator * * * Eligibility & Occupancy Director Property Management Director * * *

27 Finance Director * * * * * * * Deputy Executive Director * * * * * * Executive Director NOTES: 1) Empty Ranges are unfilled and reserved for future board action. 2) $164,200 maximum annually paid from PH or HCV funds toward Executive Director salary.

28 Flex Fund Board Approved History H.A. Monthly Contribution: % of Cheapest Plan Avail to All Employees Covered by H.A. Contribution: Year 1-Party 2-Party Family % Year 1-Party % 2-Party % Family % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % 2016: % 2016: % % % 2016: % 2016: % % % % % % % % % % 1, % 2019 (TBD) % 2019 (TBD) % % 1, % Notes: 1) 2019 proposed figures in bold/italics assume no change in H.A. Contribution. 2) 2019 proposal will cap the H.A. Contribution at 100% of the cost of the plan selected by employees.

29 AGENDA ITEM SUMMARY MEETING DATE: September 26, 2018 ITEM NUMBER: 6C FROM: Executive Director SUBJECT: Amendment to the Administrative Plan Waiting List RECOMMENDATION: Approve the amendment to the Section 8 Housing Choice Voucher Administrative Plan. BACKGROUND SUMMARY: The Department of Housing and Urban Development (HUD) offers Housing Choice Voucher/Section 8 (HCV/S8) Waiting List administration guidance and requirements. HUD requires certain policies and procedures regarding waiting list administration to be documented in the Housing Choice Voucher Administrative Plan. Currently, the Administrative Plan reflects the Housing Authority s historical practice of sequencing applications by date of placement on the waiting list. The Housing Authority has researched best practices and HUD guidance, and has discussed this information with the Board. Staff recommends that future waiting lists be opened for a finite period of time (rather than remaining open indefinitely) and that such lists shall be sequenced by a computerized random number generator, commonly known as a lottery. Waiting list lotteries have become the most common practice for housing authority lists, and are generally considered to be fairer, especially for persons that lack computer access or persons with disabilities who may not be able to be the first in line to turn in an application when the Waiting List opens. Waiting lists sequenced by a lottery also reduce the sense of urgency, which can prevent unsafe situations for applicants competing to be first in line. Additionally, the Housing Authority will announce the waiting list opening on the opening date, rather than pre-announcing the opening ahead of the opening date. The Housing Authority would use this new method for subsequent waiting list openings. Applicants already on our current waiting list will continue to be contacted based on their date of placement on the list. Most of the waiting list information can be found on pages 3-8 of the Administrative Plan, which is attached for review. RECOMMENDATION: Approve the amendment to the Section 8 Housing Choice Voucher Administrative Plan.

30 A DMINISTRATIVE P LAN Section 8 Housing Choice Voucher Program Housing Authority of the County of Santa Cruz The Administrative Plan contains those policies of the Housing Authority of the County of Santa Cruz that have been adopted by the Board of Commissioners, as required by 24CFR , governing the establishment and administration of a waiting list, the issuance of Section 8 Housing Choice Vouchers, and overall program administration. The Housing Authority reserves the right to amend the Administrative Plan. July September 2018 Please note that the electronic copy of this document contains hyperlinks to applicable HUD regulations and other references. An electronic copy of this document is available at the following website: If you cannot access the electronic copy of this document, copies of the referenced links and regulations will be available upon request. 1