COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Housing

DATE:

April 6, 2006

BOARD MEETING DATE:

April 18, 2006

SPECIAL NOTICE/HEARING

None

VOTE REQUIRED

majority

TO:

Honorable Board of Supervisors

FROM:

Duane Bay, Director, Department of Housing

SUBJECT:

Approve an Agreement with Mental Health Association of San Mateo County for $1,050,000

Recommendation

Adopt a Resolution:

1.

Authorizing execution of an Agreement with Mental Health Association of San Mateo County in the amount of $1,050,000 for the acquisition of real property for the developoment of affordable rental housing for the mentally ill for the term of May 1, 2006 through April 30, 2009; and

2.

Authorizing the Director of the Department of Housing to execute subsequent amendments to the Agreement, and to make minor modifications in the types of services and activities provided under the Agreement, the cumulative cost of which amendments and modifications is not to exceed $25,000.

Vision Alignment

Commitment: Offer a full range of housing choices.
Goal 9: Housing exists for people at all income levels and for all generations of families.

The action contributes to this commitment and goal by assisting with the development of 14 units of affordable rental housing for extremely low income people.

Performance Measures:

Measure

FY 2004-05
Actual

FY 2005-06
Projected

Number of County-supported units under development during the Fiscal Year

667

960

Number of County-supported affordable housing units developed and occupied

53

252

Background

In 2002 the County applied for and was awarded a 10 year, $500,000 loan from the State of California HELP Program specifically to fund a revolving loan program to provide short term funding assistance to acquire real property for the development of affordable rental housing. These funds were initially used to assist with the acquisition of property for the development of 24 affordable rental units in the City of Belmont. This project has been completed and the HELP funds paid back so that they are again available for the County to lend out.

The County Human Services Agency (HSA) often finds itself serving the same clientele as the Mental Health Association and realizes that having stable, affordable housing is important to reducing the dependence on other HSA programs. HSA has offered to provide short term fund balances not needed until the next fiscal year through a Memorandum of Understanding with the Department of Housing to provide these funds to assist with a development serving the Mental Health Association clients.

Discussion

Mental Health Association (MHA) has found an opportunity to purchase two adjacent parcels of land in Redwood City which would be appropriate for the development of approximately 14 studio apartments. They have been encouraged by the City of Redwood City to pursue this opportunity and have applied to the City for funding from the City's 2006-07 CDBG/HOME funds. Because those funds are not available before July 1, 2006, MHA needs some short-term assistance to close the acquisition escrow.

It is anticipated that the HELP funds will be lent to the project on a 3 year term to be paid back upon completion of contruction. The HSA funds will be paid back at the beginning of the next fiscal year. MHA is applying to other funding sources to provide this refinance. The housing developed would remain affordable for a period of at least 55 years.

The agreement includes all provisions that are required by county ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination, equal benefits and jury service policy. Real Property Services has reviewed the agreement and County Counsel has reviewed and approved the Resolution and Agreement as to form. Risk Management has reviewed and approved the insurance coverage provided by the Contractor.

Fiscal Impact

The County’s total obligation under this Agreement is $1,050,000 with $550,000 coming from the HELP loan from the State of California and the remaining $500,000 coming as a loan from HSA. There is no Net County Cost.