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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JULY 16, 2019 <br />TITLE: <br />APPROVE AMENDMENT TO LOAN <br />AGREEMENT WITH SANTA ANA VILLAGE <br />L.P. FOR THE SANTA ANA VETERANS <br />VILLAGE PROJECT IN THE AMOUNT OF <br />$124,383 (GRANT FUNDED) <br />(STRATEGIC PLAN NOS. 5,3A; 5,3C) <br />CLERK OF COUNCIL USE ONLY: <br />F.11=ii0 <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on V1 Reading <br />❑ Ordinance on 2n1 Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />CITY MANAGER <br />RECOMMENDED ACTION <br />Authorize the City Manager and the Clerk of the Council to execute an amendment to the loan <br />agreement with Santa Ana Village, L.P. for an additional $124,383 in HOME Investment <br />Partnerships Program funds for a total loan amount not to exceed $477,346, subject to non - <br />substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />As an entitlement jurisdiction, the City of Santa Ana annually receives federal grant funds through <br />the HOME Investment Partnerships Program (HOME) for the development of affordable housing. <br />The HOME Program regulations requires a HOME participating jurisdiction (PJ) to expend its <br />annual allocation of HOME funds within no more than five (5) years of receiving its HOME grant. <br />Compliance with this requirement is based on a review of the PJ's allocations and expenditures <br />as reported in the Integrated Disbursement and Information System at the time of its deadline. <br />On May 16, 2019, the City received a letter from the U.S. Department of Housing and Urban <br />Development (HUD) stating that the City was facing a shortfall of $241,084 (Exhibit 1). If the City <br />did not commit and expend these funds before July 31, 2019, HUD would recapture these funds. <br />Staff reviewed the letter from HUD and created a projection of how much in funding would be <br />recaptured by HUD. Upon further review and analysis, staff found that the letter from HUD was <br />not taking into consideration the most recent expenditures by the City. Based on this revised <br />projection, staff determined that only $124,383 would be recaptured by HUD on July 31, 2019 if <br />the City did not take action. <br />Other similar -sized jurisdictions throughout the country also have HOME Program grant funds <br />that are subject to recapture on that date as shown on HUD's Cumulative Deadline Compliance <br />Status Report (Exhibit 2) as of January 31, 2019. This report includes the City of Santa Barbara <br />and Santa Clara County. <br />25B-1 <br />