County of Santa Clara
Office of the County Executive
Item#13
county Government Center. East Wing
70 west Hedding Street
San Jose. California 951 10

(408)299-2424

MEMORANDUM

Ta

Supervisor Don Gage

Supervisor Pete McHugh
Housing,Land Use,Environment,and Transportation Committee
FROM:

Ray Villarreal,Interim Housing Coordinatf^^^^

DATE:

February 12,2002

SUBJECT:

Status Report on Housing Task Force Steering Committee

Since our report oflast month,the Steering Committee has been exceedingly busy
accomplishing several objectives and now is engaged in the development of a final
report It is our intention to present this final report at the next HULET Committee
meeting on March 21,2002

The accomplishments of the Steering Committee are as follows:

1) The Steering Committee has completed a thorough examination of the Housing
Task Force Recommendations.

2) The Steering Committee has reorganized the recommendations under the three
initiatives recommended by the Housing Task Force.

3) The Steering Committee hi developed a formatfor presenting each of the8
major recommendations to the Board of Supervisors.

Atthis time the Steering Committee has divided into three Subcommittees:1)Regional
Leadership & Advixacy,2)Infrastructure & Organization and,3)Resource Acquisition
and Allocation. The subcommittees are drafting tiieir reports of the 8recommendations
and will be presenting them to the whole Steering Committee at our meeting of
February 20,2002 Next,the8 reports will be merged into a single report,which the

Steering Committee will then submit to a "feasibility analysis" at our February 27,2002
meeting.

The resulting changes and adjustments will then be incorporated into a draft report
formatfor review by the Steering Committee at our March 8,2002 meeting. A final
report will be approved by the Steering Committee no later than March 12,2002 and
presented to the HULET Committee on March 21,2002
Board of Supervisors: Donald F. Gage. Blanca Alvarado. Pete McHugh. James T. Beall Jr.. Liz Kniss
County Executive: Richard Wittenberg

County of Santa Clara
Office of the County Executive
'.XT

CE03 040902

Prepared by: Jane Decker
Deputy County Executive
DATE:

April 9, 2002

TO:

Board of Supervisors

FROM:

Richard Wittenberg
County Executive
SUBJECT:

Recommendations regarding Board Referrals from Elousing Task Force

RECOMMENDED ACTION

Consider recommendations relating to Elousing Task Force
Possible action:

a. Approve the creation of a Housing Unit and direct the Administration to develop
implementation plans depending on availability of revenue,

b. Consider the use of up to 30% of the Redevelopment Settlement Agreement delegated
revenues for housing purposes.
FISCAL IMPLICATIONS

There should be no general fund costs as a result of Board action. Support will come from
existing revenues, redevelopment settlement revenues or exchanges of revenue sources.

Board of Supervisors: Donald K. Gage, Blanca Alvarado, Pete McHugh, James T. Beall Jr., Liz Knias
County Executive: Rjchard Wittenberg

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REASONS FOR RECOMMENDATTON

On December 4, 2001, the Board of Supervisors referred two recommendations from the
Housing Task Force to the Administration for analysis:
• Creation of an affordable housing unit in the County Executive's Office
• Use of up to 30% of Redevelopment Settlement revenue for affordable housing
purposes.

A full discussion by the Administration follows below.
BACKGROUND

The County currently is engaged in a number of housing activities located throughout County
Agencies and Departments. In the County Executive's Office, the Housing Bond Coordinator
administers the Housing Bond, Mortgage Credit Certificate, and Housing Bond Trust Fund
programs. The Homeless Services Coordinator administers the Shelter Plus Care and Cold
Weather Shelter programs and also works with other entities to expand housing opportunities
for the homeless. In addition, the Fairgrounds Revitalization Pproject, which includes the
largest affordable housing project currently being developed in the State, is managed by
County Executive staff And last, the contract interim Housing Coordinator prepared a report
last year on special needs housing issues which recommended a higher level of emphasis and
coordination needed to be directed toward the County's special needs housing issues which
recommended a higher level of emphasis and coordination needed to be directed toward the
County's special needs clients. He has continued to work with departments, some city staff
and the Housing Task Force to develop recommendations for County housing efforts.
The Environmental Resources Agency administers several important housing programs
including the Community Development Block Grant Program(CDBG),the HOME program.
Emergency Shelter Grants Program, and other related housing programs. The Social Services
Agency has an extensive housing program and recently established a Housing unit to
coordinate their Agency efforts in finding housing opportunities for CalWORKS clients,
Foster care children, domestic violence victims, aging adults, and other clients of the Agency.
The Santa Clara Valley Health and Hospital System performs the same functions for their
clients in Mental Health, Department of Drug and Alcohol, and Public Health.
The above narrative is intended to demonstrate the range of housing activities in which the
County is engaged and is not inclusive of all County housing programs.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh, James T. BcallJr., Liz Ivnias
Count>' Executive: Richard Wittenberg

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After review of our current housing program organization, it is clear that there are benefits to
consolidation and coordination. Ongoing communication and interaction among the
departments engaged in housing activities could create opportunities to use resources in ways
not currently contemplated. Some of this activity could conceivably occur without
consolidation, through regular meetings of the housing staff, but there is more that could be
gained through consolidation of programs.

A centralized office with an active Housing Director would have a countywide perspective.

He/She would be knowledgeable about all of the County housing programs and would be able
to identify ways to leverage resources. A Housing Director could be involved at high levels of
the organization to identify opportunities to include housing in County projects. The Director
would work closely with GSA and the Departments. A Housing Director could also work with
other jurisdictions and housing providers to expand housing for County clients.

County departments with specific responsibilities in the special needs housing area need the
help of bolder, more directed activity at a high level of the organization to create new
affordable housing opportunities for their clients. Existing housing and service dollars
currently used by departments could be leveraged and expanded in areas that departments
don't have the resources to address. An increase in the number of housing units for special

needs is absolutely critical to the mission of the departments who are, on a daily basis,
searching for appropriate housing for their clients.
Housing Office Proposal

The Administration is proposing that the Housing Bond Programs, the Homeless Services
Program, and the Community Development Block Grant Program be consolidated under the
direction of the County Executive's Office. This would allow for better communication among
the programs and create a single focus for County housing efforts. By consolidating these
programs, revenues associated with each of them could be better targeted and leveraged for
maximum benefit. Spending by these programs has benefited worthy projects but has not
necessarily been part of an overall strategic County effort to accomplish specific goals.

The special needs housing efforts in the Social Services Agency and Health and Hospital
System would remain in place. Staff in those agencies know the needs of their clients and the
specialized revenue sources that can be drawn down to provide housing. Housing office staff
would interact with special needs housing staff and hold regular meetings of all of the

Board of Supervisors: Donald R Gage, Blanca Alvarado, Pete McHugh, James T. Beall

Liz Knisa

Count>' Executive: Richard Wittenberg
3

departmental speeial needs housing staff. The housing office would enhance the efforts of the
departments and identify opportunities to create new housing units; something the
departments have indicated is critical to the success of their mission. Departments have
indicated that they need help in working with other jurisdictions to develop partnership
opportunities and they have resources that can be brought to the table. In the County
Executive's Supportive Housing Initiative, presented to the Board in March, 2001, the special
needs housing crisis was identified as the most important housing focus for the County. Crisis,
transitional, and permanent housing is needed. The special needs clients, who are in the very
low-income category and may be receiving SSI, have felt the affordable housing shortage
more that most.

Depending upon funding available, there are different forms a new housing unit could take.
Under optimum circumstances, revenue could be made available to fund a Housing Director
position and support staff. If the Board chooses to dedicate a portion of the Redevelopment
Settlement Agreement revenue to housing, it may be possible to use that revenue for staff.
However, there are certain constraints on the use of the delegated revenue. For one, staff must
be actively engaged in overseeing housing construction. It may be possible to exchange a
portion of the redevelopment revenue for general fund dollars, but additional analysis will be
required to determine under what conditions that can occur. In the absence of new revenue
sources to fund a housing office, an interim configuration could be developed using existing
staff to begin addressing the needs at no cost to the general fund. When general fund revenues
have stabilized in the future, augmentations to interim staff could be made. We are also

assessing the benefits of co-locating the economic development program with housing to take
advantage of obvious opportunities for synergy and use of existing resources and staff. The
Fairgrounds Revitalization Project demonstrates how housing can be integrated with
economic development.

The Board referral also asked the Administration to review housing activity organization in
other counties. The attached matrix reviews the organization of five counties and

demonstrates very different approaehes. Ventura County's department within the County
Executive's Office appears to be the most similar to what the Administration is
recommending.

Use of Redevelopment Settlement Revenue for Housing
The Board asked the Aadministration to analyze using up to 30% of the San Jose

Redevelopment Settlement Agreement revenue for housing. There are distinct revenue

Board of Supcnrisora: Donald F. Gage, Blanca Alvarado, Pete McHugh, James T. Boall Jr., Liz Knisa
Countj' Executive; Richard Wittenberg
4

streams that resulted from the agreement. The pass through revenue, or discretionary revenue,

has been budgeted in the general fund for ongoing expenditures. For purposes of this analysis,
the Administration focused on the stream of revenue known as the delegated revenue. That

revenue consists of proceeds of tax exempt bonds and is subject to certain restrictions on its
use, including that it be spent on capital projects. As demonstrated in the attached chart
prepared by the Department of Finance, over the four year period beginning in FY2001,the
total delegated revenue produced by the agreement is $6.11 million to $18.36 million over the
four year period. After FY2004, the delegated revenue will come from future San Jose
Redevelopment bond sales that are not predictable and, therefore, not shown at this time.
As mentioned above there are restrictions on the use of the tax exemption bond proceeds.

According to the attached County Counsel opinion, direct administrative costs associated with
a capital project are reimbursable from the proceeds. Because of caps on private activity
reached already by San Jose, the County's revenue must be used for public projects that are
owned and managed by the County or another public agency. The funds must be used in San
Jose or, generally, in areas contiguous to San Jose.

An option to explore is exchanging delegated redevelopment revenues for general fund
revenues currently being used for capital projects. The exchange would create potentially
unrestricted revenues to be used for housing or other purposes. There are various permutations

of this kind of swap that could provide more flexibility in the use of the money. Once a policy
decision on using redevelopment money has been made by the Board of Supervisors, the
Administration will develop options for using the revenue to expand housing opportunities.
The Board referral asked the Administration to investigate possible partnerships with the

Housing Trust of Santa Clara County if these revenues were to be used for housing. After
meeting with the Housing Trust, it appears there are projects that could be accomplished with
them that would expand affordable housing units and that could be targeted to special needs
clients. However, because of the restriction that the delegated monies be used for public

projects, there may be constraints on our ability to work with the Housing Trust unless we are
able to exchange redevelopment revenue for unrestricted general fund revenue.
We also met with the Housing Authority. As a public agency, they are in a position to partner

with the County using these revenues. They would be able to develop projects, as well as
manage them, thereby satisfying the legal requirements related to the revenue. The Housing
Authority is assessing options for working with the County.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh, James T. Beall Jr., Liz Kniss
Countj' Executive; Richard Wittenberg
5

In summary, the Administration is supportive of the creation of a housing office in the County
Executives' office at no expense to the general fund. In the event the Board of Supervisors
decides to spend redevelopment settlement revenues for housing, the Administration will
analyze specific ways the revenue could be spent.

ATTACHMENTS

• RDA Funds (Miscellaneous)

Board of Supervisors: Donald R Gage, Blanca-J^ilvarado, Pete McHugh, James T. Beall Jr., Liz Kniss
County Executive; Richard Wittenberg
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