Fiscal Year 2013-2015 Special Budget Meeting

HONORABLE MAYOR AND CITY COUNCIL Subject: Update on Funding for Housing Project Staff Costs Date: June 24, 2013 ' Page 2 (among other obligations). During the review of ROPS 13-14A covering the next period - July 1 through December 31, 2013 - staff continued discussions with DOF regarding housing project staff costs in order to reach an agreement through administrative remedies. Additional documentation linking housing project staff costs to housing projects approved as enforceable obligations on the ROPS was provided to the DOF. The result of these efforts is the June 21, 2013 letter providing approval of housing project staff costs. OUTCOME This approval relieves the General Purpose Fund from being required to cover $849,314 in costs for the past six months (January-June 2013) as previously indicated in fund balance reports provided to Council. It will also alleviate the use of one-time funds (e.g. bond funds not General Fund Balance) totaling $870,142 to cover housing project staff costs as currently proposed in the FY 2013-14 budget. However, because the RPTTF funds have already been distributed for the ROPS III and ROPS 13-14A periods, funds from RPTTF will not be available until January 2014. In the short-term, the City will need to cover these expenses on a cash basis as suggested by the DOF letter. •' As a reminder, the Mayor's budget proposal used one-time bond funds and other one-time restricted housing sources to cover the cost of these staff for FY 2013-14. These funds will be returned to the housing program and available for other housing expenditures. In order to substantiate eligibility of Housing staff in future ROPS, the City needs to ensure that there are sufficient housing projects to enable funding for future staff costs through the ROPS proceeds. The Mayor proposed to use the "triple flip" administration fees assessed by the County estimated to total $2.1 million for the housing project staff or projects for FY 2014-15. However; this does not address the long-term future fiinding of affordable housing in Oakland, which is still a policy decision under consideration by City Council. The Mayor is proposing to adopt a policy to allocate 25 percent of the on-going and any one-time boomerang funds for the affordable housing program beginning in FY 2015-16. A portion of these fiands would be needed to cover housing project staff costs in order to implement future affordable housing projects. For questions regarding this memo, please contact Sarah Schlenk, Agency Administrative Manager, City Administrator's Office, at 510-238-3982. Respectfully submitted. FRED BLACKWELL Assistant City Administrator Attachment (1)'V; > -' -June 21, 2013'letter from the State Department of Finance