TITLE
Recommendation to request full forgiveness of $2.9 million in an outstanding loan made by the City of Long Beach to the Housing Authority of the City of Long Beach, California under a Loan Agreement entered into on July 6, 2004.
DISCUSSION
In the Spring of 2004, the Housing Authority faced significant financial issues caused by rising housing costs, decreasing income of participating families, and program funding changes implemented by HUD. To provide assistance, the City loaned the Housing Authority $2.9 million (Exhibit A) from excess funds that were part of the City’s Rental Rehabilitation Program (RRP), which utilized HOME funds through the Housing Services Bureau program. The RRP funds loaned to the Housing Authority (HA) could only be used for affordable housing programs and they were non-General Fund dollars.
The loan documents state:
· Loan must be repaid on or before the 10th anniversary of the loan agreement (July 2014), with zero interest added to the loan.
· As an alternative to repayment of the loan, the principal balance of the loan can be reduced by an amount equal to the costs incurred by the Housing Authority for its programs and activities, plus the monetary contributions made by the Housing Authority for the furtherance and advancement of City Services.
· The City has the right to forgive all or a portion of the City Loan for services and/or facilities provided by the Housing Authority to support City of Long Beach activities pursuant to Section 2 of the loan agreement.
Since the inception of the loan, the Housing Authority, as outlined and allowed in the loan agreement, has made significant contributions to the City’s Consolidated Plan, Continuum of Care for the Homeless Assistance and Housing Element.
Listed below are those Housing Authority Contributions to Affordable Housing to be considered as credit towards the loan payoff. Additional details are included in Exhibit B.
· Since Fiscal Year 2005, the Housing Authority has pro...
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