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2018 11 20 HA Special MeetingHOUSING AUTHORITY 1 November 20, 2018 SPECIAL MEETING NOTICE AND CALL OF SPECIAL MEETING OF THE LA QUINTA HOUSING AUTHORITY TO THE MEMBERS OF THE HOUSING AUTHORITY OF THE CITY OF LA QUINTA AND TO THE CITY CLERK/AUTHORITY SECRETARY: NOTICE IS HEREBY GIVEN that a special meeting of the Housing Authority of the City of La Quinta is hereby called to be held on November 20, 2018 at 4:00 p.m. at La Quinta City Hall, 78495 Calle Tampico, La Quinta, California. CONSENT CALENDAR 1. APPROVE SPECIAL MEETING MINUTES OF AUGUST 7, 2018 2. ADOPT RESOLUTION TO APPROVE AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS BETWEEN THE LA QUINTA HOUSING AUTHORITY AND JOE W. STEMMER, JR. CONSTRUCTION FOR TWO VACANT PARCELS LOCATED IN THE LA QUINTA COVE (APNs 773-234-015 and 773- 223-022) BUSINESS SESSION 1. RECEIVE AND FILE FISCAL YEAR 2017/18 HOUSING AUTHORITY YEAR-END BUDGET REPORT AND APPROVE THE AMENDED CARRYOVERS 2. RECEIVE AND FILE FISCAL YEAR 2018/19 FIRST QUARTER HOUSING AUTHORITY BUDGET REPORT AND APPROVE THE RECOMMENDED BUDGET ADJUSTMENTS STUDY SESSION 1. DISCUSS FUNDING FOR HOMELESS PREVENTION PROGRAMS Dated: November 16, 2018 Steve Sanchez STEVE SANCHEZ, Chairperson DECLARATION OF POSTING I, Monika Radeva, Authority Secretary, do hereby declare that the foregoing notice for the Special La Quinta Housing Authority meeting of November 20, 2018 was posted on the outside entry to the Council Chamber at 78495 Calle Tampico and on the bulletin boards at 51321 Avenida Bermudas and 78630 Highway 111 on November 16, 2018. DATED: November 16, 2018 Monika Radeva, Authority Secretary La Quinta Housing Authority HOUSING AUTHORITY AGENDA 1 NOVEMBER 20, 2018 SPECIAL MEETING HOUSING AUTHORITY AGENDA CITY HALL COUNCIL CHAMBER 78495 Calle Tampico La Quinta SPECIAL MEETING TUESDAY, NOVEMBER 20, 2018 AT 4:00 P.M. CALL TO ORDER ROLL CALL: Authority Members: Evans, Fitzpatrick, Peña, Radi, Chairperson Sanchez VERBAL ANNOUNCEMENT – AB 23 [AUTHORITY SECRETARY] PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA At this time, members of the public may address the Housing Authority on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. The Housing Authority values your comments; however in accordance with State law, no action shall be taken on any item not appearing on the agenda unless it is an emergency item authorized by GC 54954.2(b). CONFIRMATION OF AGENDA CLOSED SESSION – NONE ANNOUNCEMENTS, PRESENTATIONS, AND WRITTEN COMMUNICATIONS - NONE CONSENT CALENDAR NOTE: Consent Calendar items are routine in nature and can be approved by one motion. PAGE 1. APPROVE SPECIAL MEETING MINUTES OF AUGUST 7, 2018 5 Housing Authority agendas and staff reports are available on the City’s web site: www.laquintaca.gov HOUSING AUTHORITY AGENDA 2 NOVEMBER 20, 2018 SPECIAL MEETING 2. ADOPT RESOLUTION TO APPROVE AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS BETWEEN THE LA QUINTA HOUSING AUTHORITY AND JOE W. STEMMER, JR. CONSTRUCTION FOR TWO VACANT PARCELS LOCATED IN THE LA QUINTA COVE (APNs 773- 234-015 and 773-223-022) [RESOLUTION NO. HA 2018-004] 9 BUSINESS SESSION PAGE 1. RECEIVE AND FILE FISCAL YEAR 2017/18 HOUSING AUTHORITY YEAR-END BUDGET REPORT AND APPROVE THE AMENDED CARRYOVERS 47 2. RECEIVE AND FILE FISCAL YEAR 2018/19 FIRST QUARTER HOUSING AUTHORITY BUDGET REPORT AND APPROVE THE RECOMMENDED BUDGET ADJUSTMENTS 65 STUDY SESSION PAGE 1. DISCUSS FUNDING FOR HOMELESS PREVENTION PROGRAMS 71 PUBLIC HEARINGS – NONE DEPARTMENTAL REPORTS – NONE CHAIR AND BOARD MEMBERS' ITEMS REPORTS AND INFORMATIONAL ITEMS – NONE ADJOURNMENT *************************************** The next regular quarterly meeting of the Housing Authority will be held on January 15, 2019, at 4:00 p.m. in the City Council Chambers, 78495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Monika Radeva, Authority Secretary of the La Quinta Housing Authority, do hereby declare that the foregoing agenda for the La Quinta Housing Authority was posted near the entrance to the Council Chambers at 78495 Calle Tampico and on the bulletin boards at 51321 Avenida Bermudas and 78630 Highway 111, on November 16, 2018. HOUSING AUTHORITY AGENDA 3 NOVEMBER 20, 2018 SPECIAL MEETING DATED: November 16, 2018 MONIKA RADEVA, Authority Secretary La Quinta Housing Authority Public Notices  The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City Clerk’s Office at (760) 777-7092, twenty-four (24) hours in advance of the meeting and accommodations will be made.  If special electronic equipment is needed to make presentations to the Housing Authority, arrangement should be made in advance by contacting the City Clerk's Office at (760) 777-7092. A one (1) week notice is required.  If background material is to be presented to the Housing Authority during a meeting, please be advised that eight (8) copies of all documents, exhibits, etc., must be supplied to the City Clerk for distribution. It is requested that this take place prior to the beginning of the meeting.  Any writings or documents provided to a majority of the Housing Authority regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78495 Calle Tampico, La Quinta, California, 92253, during normal business hours. HOUSING AUTHORITY MINUTES Page 1 of 3 AUGUST 7, 2018 SPECIAL MEETING HOUSING AUTHORITY MINUTES TUESDAY, AUGUST 7, 2018 CALL TO ORDER A special meeting of the La Quinta Housing Authority was called to order at 3:05 p.m. by Chairperson Sanchez. PRESENT: Authority Members: Evans, Fitzpatrick, Peña, Radi, Chairperson Sanchez ABSENT: None VERBAL ANNOUNCEMENT – AB 23 was made by the Authority Secretary PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA – None CONFIRMATION OF AGENDA – Confirmed CLOSED SESSION 1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54956.8 FOR VACANT PROPERTIES LOCATED IN THE COVE BEARING ASSESSOR’S PARCEL NUMBERS (APNs) 773-223-022, 773-234-015 CITY NEGOTIATOR: FRANK J. SPEVACEK, EXECUTIVE DIRECTOR PROPERTY OWNER: CITY OF LA QUINTA HOUSING AUTHORITY UNDER NEGOTIATION: PRICE AND TERMS OF PAYMENT AND/OR DISPOSITION OF THE PROPERTIES IDENTIFIED AUTHORITY RECESSED THE OPEN SESSION PORTION OF THE MEETING AND MOVED INTO CLOSED SESSION AT 3:06 P.M. CHAIRPERSON SANCHEZ RECONVENED THE OPEN SESSION PORTION OF THE AUTHORITY MEETING AT 4:37 P.M. WITH ALL MEMBERS PRESENT REPORT ON ACTION(S) TAKEN IN CLOSED SESSION: Authority Attorney Ihrke reported no actions were taken in Closed Session that require reporting pursuant to Government Code section 54957.1 (Brown Act). ANNOUNCEMENTS, PRESENTATIONS, AND WRITTEN COMMUNICATIONS – None CONSENT CALENDAR ITEM NO. 1 5 HOUSING AUTHORITY MINUTES Page 2 of 3 AUGUST 7, 2018 SPECIAL MEETING CONSENT CALENDAR 1. APPROVE MINUTES OF JULY 3, 2018 2. ADOPT RESOLUTION TO APPROVE CAPITAL ASSET POLICY [RESOLUTION NO. HA 2018-003] MOTION – A motion was made and seconded by Authority Members Evans/Radi to approve the Consent Calendar as recommended, with Item No. 2 adopting Resolution No. HA 2018-003. Motion passed unanimously. BUSINESS SESSION 1. INTERVIEW CANDIDATES AND APPOINT ONE RESIDENT TO SERVE ON THE HOUSING COMMISSION Authority Secretary Radeva presented the staff report, which is on file in the Clerk’s Office. The following candidates gave a brief presentation of their qualifications:  Aileen Buckley  Gia Casto Authority Members thanked the candidates for their community engagement and willingness to serve the City. Results of ballot vote: Authority Member Evans – Gia Casto Authority Member Fitzpatrick – Gia Casto Authority Member Peña – Gia Casto Authority Member Radi – Gia Casto Chairperson Sanchez – Gia Casto MOTION – A motion was made and seconded by Authority Members Evans/Radi to appoint Gia Casto to serve on the Housing Commission for an unexpired two- year term ending June 30, 2020. Motion passed unanimously. STUDY SESSION – None PUBLIC HEARINGS – None DEPARTMENTAL REPORTS – None CHAIR AND BOARD MEMBERS' ITEMS – None 6 HOUSING AUTHORITY MINUTES Page 3 of 3 AUGUST 7, 2018 SPECIAL MEETING REPORTS AND INFORMATION ITEMS – None ADJOURNMENT There being no further business, it was moved and seconded by Authority Members Fitzpatrick/Radi to adjourn at 4:49 p.m. Motion passed unanimously. Respectfully submitted, MONIKA RADEVA, Authority Secretary La Quinta Housing Authority 7 8 City of La Quinta HOUSING AUTHORITY MEETING: November 20, 2018 STAFF REPORT AGENDA TITLE: ADOPT RESOLUTION TO APPROVE AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS BETWEEN THE LA QUINTA HOUSING AUTHORITY AND JOE W. STEMMER, JR. CONSTRUCTION FOR TWO VACANT PARCELS LOCATED IN THE LA QUINTA COVE (APNs 773- 234-015 AND 773-223-022) RECOMMENDATION Adopt a resolution to approve an Agreement for Purchase and Sale and Escrow Instructions between the La Quinta Housing Authority and Joe W. Stemmer, Jr. Construction for two vacant parcels located in the La Quinta Cove (Assessor’s Parcel Numbers 773-234-015 and 773-223-022); and authorize the Executive Director to make minor revisions and additions that do not substantively change the business terms and execute the agreement. EXECUTIVE SUMMARY • The La Quinta Housing Authority (Authority) (Seller) proposes to dispose of two (2) vacant parcels each approximately 4,792 square feet in size and located in the Cove Neighborhood (Attachment 1). The price of the land is consistent with market rates and confirmed by a local real property appraiser. • In March 2018, the Housing Commission recommended, and the Housing Authority authorized, Staff to declare the parcels as no longer needed and to make available to residential developers. • The sale of these parcels would place the properties back on the tax rolls and facilitate development of two single-family homes. • Escrow is not authorized to close until all building permits and entitlements have been secured by Joe W. Stemmer, Jr. Construction (Buyer). FISCAL IMPACT The proceeds in the amount of $120,000, less escrow fees, would be deposited into the Authority, Sale of Assets Account (241-0000-45000), which will be utilized for future affordable housing development. CONSENT CALENDAR ITEM NO. 2 9 BACKGROUND/ANALYSIS In March of 2018, the Housing Commission recommended, and the Authority authorized Staff to declare four (4) Authority parcels as no longer needed and suitable for disposition. Staff first reached out to state and local entities, local school districts, and non-profit affordable housing developers to see if they needed the parcels for affordable housing development. Staff provided a 60- day response period which expired May 19, 2018 and had no interested parties. The Buyer contacted Staff to inquire if the City had any lots suitable single- family home development. The Buyer was advised that the City did not have any lots that met their needs; however, the Authority had several lots scattered throughout the La Quinta Cove that were zoned for single family development. Out of the four available lots, the Buyer submitted an offer on two lots, assessor’s parcel number 773-234-015 (a vacant lot on Avenida Navarro and Calle Durango) and 773-223-022 (a vacant lot on Avenida Herrera and Calle Sonora). The Buyer proposes to build two single-family homes similar to the homes they constructed in the Cove located at 77975 Calle Colima and 52590 Avenida Villa (Attachment 1). They’ve also agreed that escrow shall not close until they have secured all building permits and entitlements from the City. ALTERNATIVES: The Authority may elect to not approve the purchase and sale agreement. Prepared by: Angela Ferreira, Management Specialist Approved by: Frank J. Spevacek, Executive Director Attachments: 1. Property Map and Proposed Construction 2. Agreement for Purchase and Sale and Escrow Instructions 10 RESOLUTION NO. HA 2018- A RESOLUTION OF THE LA QUINTA HOUSING AUTHORITY APPROVING AN AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS BETWEEN THE LA QUINTA HOUSING AUTHORITY AND JOE W. STEMMER, JR. CONSTRUCTION FOR TWO VACANT LOTS LOCATED IN THE LA QUINTA COVE APNs: 773-234-015 AND 773-223-022 WHEREAS, Joe W. Stemmer, Jr. Construction is a California Corporation (“Buyer”); and WHEREAS, the La Quinta Housing Authority (the “Authority”) is a public body, corporate and politic, organized and existing under the California Housing Authorities Law (California Health and Safety Code Section 34200 et seq.); and WHEREAS, pursuant to California Health and Safety Code Section 34315, the Authority has the power to sell, lease, exchange, transfer, assign, pledge, or dispose of any real or personal property or any interest in it; and WHEREAS, the Authority acquired the Properties in 1993 in the Cove Neighborhood to eliminate blight, APNs 773-234-015 and 773-223-022, described in the attached Purchase and Sale Agreement that is the subject of this Resolution and incorporated by this reference (the “Property”), which the Authority has negotiated to sell the properties for $120,000 for development of two (2) single family homes; and WHEREAS, there is an appraisal of the current fair market value of comparable properties indicating that the negotiated purchase price reflects the current fair market value thereof; and WHEREAS, the City of La Quinta Housing Commission reviewed and recommended the disposition of the properties on March 13, 2018; and WHEREAS, the Authority would accept the purchase price from the Buyer and add it to the unreserved Housing Authority Project Area fund balance; and 11 Resolution No. HA 2018- Agreement for Purchase and Sale and Escrow Instructions – Stemmer Construction Adopted: Page 2 of 3 WHEREAS, the Authority now desires to authorize the Executive Director to authorize disposition of the Properties for $120,000; and WHEREAS, the purchase and sale of the Property is subject to a Purchase and Sale Agreement, attached to the staff report for this Resolution, and on file with the City Clerk’s Office, and incorporated herein by reference; and WHEREAS, this Resolution has been reviewed with respect to applicability of the California Environmental Quality Act (“CEQA”), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the “State CEQA Guidelines”), and the Authority’s environmental guidelines; and WHEREAS, pursuant to Section 15301 of the State CEQA Guidelines, the transfer of the Property is exempt from environmental review under CEQA because the transfer will result in a continuation of the existing use for development of single-family homes and is therefore exempt from environmental review; and WHEREAS, all of the prerequisites with respect to the approval of this Resolution have been met. NOW, THEREFORE, BE IT RESOLVED by the La Quinta Housing Authority, as follows: SECTION 1. The foregoing recitals are true and correct and are incorporated herein by this reference. SECTION 2. The Authority hereby approves the Purchase and Sale Agreement, attached to the staff report for this Resolution and on file with the City Clerk’s Office. The Authority consents to the Authority’s Executive Director and Authority’s Legal Counsel making any final modifications to the Agreement that are consistent with the substantive terms of the Agreement approved hereby, and to thereafter sign the Agreement and transfer the property pursuant to a Grant Deed on behalf of the Authority. SECTION 3. The Authority’s Executive Director is authorized to effectuate the conveyances described in Section 2, at such time as the conveyances is effectuated, and to take such other and further actions, and execute such other and further documents, as are necessary and proper in order to implement this Resolution on behalf of the Authority. 12 Resolution No. HA 2018- Agreement for Purchase and Sale and Escrow Instructions – Stemmer Construction Adopted: Page 3 of 3 SECTION 4. The Authority Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED and ADOPTED at a special meeting of the La Quinta Housing Authority held this 20th day of November, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ___________________________ STEVE SANCHEZ, Chairperson La Quinta Housing Authority, California ATTEST: ________________________________ MONIKA RADEVA, Authority Secretary La Quinta Housing Authority, California (CITY SEAL) APPROVED AS TO FORM: ________________________________ WILLIAM H. IHRKE, Authority Attorney La Quinta Housing Authority, California 13 14 Attachment 1 Avenida Herrera/Calle Sonora 773-223-022 77975 Calle Colima- Proposed Construction Avenida Navarro 773-234-015 15 2 Avenida Navarro/Calle Durango 773-234-015 52590 Avenida Villa- Proposed Construction 16 882/015610-0040 12712133.2 a11/15/18a10/23/18 AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS This AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS (“Agreement”) is made and entered into as of _________________, 2018 (“Effective Date”), by and between LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic (“Seller”), and JOE W. STEMMER, JR. CONSTRUCTION, a California corporation (“Buyer”). R E C I T A L S: A. Seller is the owner of certain unimproved, vacant real property bearing Assessor’s Parcel Numbers 773-234-015 and 773-223-022, located in the City of La Quinta, County of Riverside, State of California (the “Property”). The Property is legally described in Exhibit “A”, which is attached hereto and incorporated herein by this reference. B. Buyer desires to purchase the Property from Seller and Seller desires to sell the Property to Buyer, on the terms and conditions set forth herein. A G R E E M E N T: NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and the mutual covenants herein contained, the parties hereto agree as follows: 1. PURCHASE PRICE. 1.1 Amount. Subject to the terms of this Agreement, Buyer hereby agrees to purchase the Property from Seller and Seller agrees to sell the Property to Buyer, for the purchase price of One Hundred Twenty Thousand Dollars ($120,000) (the “Purchase Price”). 1.2 Payment of Purchase Price. The Purchase Price shall be paid in accordance with the following: 1.2.1 Within five (5) days after an “Opening of Escrow,” Buyer shall deposit with “Escrow Holder” (as those terms are defined in Section 3.1) in “Good Funds” (as used in this Agreement, the term “Good Funds” shall mean a confirmed wire transfer of immediately available funds, cashier’s or certified check drawn on or issued by the office of a financial institution located in Riverside County, or cash) (i) the sum of One Hundred Dollars ($100) (the “Independent Contract Consideration”) as consideration for Seller’s execution and delivery of this Agreement and Buyer’s right to approve or disapprove any Buyer contingencies set forth in this Agreement with respect to the Property, and (ii) the sum of Six Thousand Dollars ($6,000) as an earnest money deposit (the “Earnest Money Deposit”). ATTACHMENT 2 17 882/015610-0040 12712133.2 a11/15/18a10/23/18 -2- In the event the “Escrow” (as that term is defined in Section 3.1) closes, the Independent Contract Consideration and the Earnest Money Deposit shall each be applicable towards the Purchase Price. 1.2.2 On or before 10:00 a.m. on the “Closing Date” (as that term is defined in Section 4.1), Buyer shall deposit with Escrow Holder in Good Funds the Purchase Price, less the Independent Contract Consideration and Earnest Money Deposit, and such additional funds as may be required to meet Buyer’s portion of the closing costs as hereinafter provided. 2. DUE DILIGENCE. As used herein, the term “Due Diligence Period” shall refer to the thirty (30) day period commencing upon the Effective Date. Unless Buyer terminates the Escrow and this Agreement prior to the expiration of the Due Diligence Period, then upon expiration of the Due Diligence Period, Escrow Holder shall release to Seller t he Earnest Money Deposit; provided, however, that in the event the Escrow is terminated and fails to close as a result of Seller’s default of the terms hereof, Seller shall promptly return the Earnest Money Deposit to Escrow Holder, no later than five (5) business days after said termination, and Escrow Holder shall immediately release the Earnest Money Deposit to Buyer. Buyer’s obligation to consummate the transactions contemplated by this Agreement is subject to and conditioned upon Buyer’s approval, deemed approval or waiver of the right to approve of the following contingencies set forth in this Section 2 (collectively, the “Contingencies”): 2.1 Title/Survey. Seller shall deliver to Buyer, within five (5) days after the Effective Date of this Agreement, a preliminary title report prepared by Stewart Title (the “Title Company”), dated not more than thirty (30) days earlier than the Effective Date describing the state of title of the Property together with copies of all underlying documents (collectively the “Preliminary Title Report”). Buyer may, at its sole cost and expense, obtain a current survey of the Property or any portion thereof (the “Survey”), provided it commences to do so within thirty (30) days after the Effective Date. 2.1.1 Notwithstanding anything herein to the contrary, Seller shall be obligated to remove all monetary encumbrances against the Property excluding non - delinquent real property taxes and assessments. Buyer shall notif y Seller in writing of any objections Buyer may have to title exceptions contained in the Preliminary Title Report or matters shown on the Survey (if Buyer obtains) no later than the date which is thirty (30) days after the later of (i) Buyer’s receipt of the Preliminary Title Report or (ii) Buyer’s receipt of the Survey (if Buyer obtains) (“Buyer’s Objection Notice”). Buyer’s approval or disapproval of the matters set forth in the Preliminary Title Report and the Survey (if Buyer obtains) may be granted or withheld in Buyer’s sole and absolute discretion. Buyer’s failure to provide Seller with a Buyer’s Objection Notice within said period shall constitute Buyer’s approval of all exceptions to title shown on the Preliminary Title Report and all matters shown on the Survey (if Buyer obtains). Seller shall have a period of fifteen (15) days after receipt of Buyer’s Objection Notice in which to deliver written notice to Buyer (“Seller’s Notice”) of Seller’s election to either (i) agree to remove 18 882/015610-0040 12712133.2 a11/15/18a10/23/18 -3- the objectionable items on the Preliminary Title Report and/or Survey (if Buyer obtains) prior to the “Close of Escrow” (as that term is defined in Section 4.1), or (ii) decline to remove any such title exceptions and/or Survey matters (if Buyer obtains) and terminate the Escrow and the obligations of Buyer and Seller to purchase and sell the Property under this Agreement, and upon such termination the Earnest Money Deposit shall be returned to Buyer. Seller’s failure to provide Buyer with Seller’s Notice within said period shall constitute Seller’s election not to remove the objectionable items on the Preliminary Title Report and/or the Survey (if Buyer obtains). If Seller notifies Buyer of its election, or is deemed to have elected, to terminate rather than remove the objectionable items on the Preliminary Title Report and/or Survey (if Buyer obtains), Buyer shall have the right, by written notice delivered to Seller within five (5) days after Buye r’s receipt of Seller’s Notice or the date Seller is deemed to have elected to terminate, to agree to accept the Property subject to the objectionable items, in which event Seller’s election to terminate shall be of no effect, and Buyer shall take title to the Property subject to such objectionable items without any adjustment to or credit against the Purchase Price. 2.1.2 Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions, including any survey exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement. The process set forth above for Buyer’s review and Seller’s response shall apply to any review and response with respect to any amendment or supplement to the Preliminary Title Report, and the Close of Escrow shall be extended for such period as is necessary to allow for that review and response process to be completed. 2.2 Environmental Condition. Buyer shall have access to the Property, as described in this Section 2.2, in order to permit Buyer or its engineers, analysts, employees, agents, contractors, representatives, attorneys or advisors (collectively, the “Buyer Representatives”) to investigate the Property. 2.2.1 During the Due Diligence Period, Seller shall permit Buyer and Buyer Representatives, at the sole cost and expense of Buyer, to conduct physical inspections of the Property, including the site work, soil, subsurface soils, drainage, seismic and other geological and topographical matters, location of asbestos, toxic substances, hazardous materials or wastes, if any, and any other investigations as Buyer deems prudent with respect to the physical condition of the Property in order to determine the Property’s suitability for Buyer’s intended development. In no event shall Buyer conduct any intrusive testing procedures on the Property without the prior written consent of Seller, which consent shall not be unreasonably withheld. Seller shall cooperate to assist Buyer in completing such inspections and special investigations at no cost or expense to Seller. Such inspections and investigations shall be conducted only upon no less than forty-eight (48) hours’ notice to Seller and shall be conducted at such times and in such a manner as to minimize any disruption to the Property. Seller shall have the right, but not the obligation, to accompany Buyer during such investigations and/or inspections. 2.2.2 As a condition to any such entry, Buyer shall (i) conduct all work or studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Property during or after such investigation; 19 882/015610-0040 12712133.2 a11/15/18a10/23/18 -4- (ii) comply with all applicable laws and governmental regulations; (iii) keep the Property free and clear of all materialmen’s liens, lis pendens and other liens arising out of the entry and work performed under this paragraph; (iv) maintain or assure maintenance of workers’ compensation insurance (or state approved self -insurance) on all persons entering the property in the amounts required by the State of California; (v) provide to Seller prior to initial entry a certificate of insurance evidencing that Buyer and/or the persons entering the Property has procured and has in effect an all -risk public liability insurance policy meeting the following requirements: (1) the insurance shall be written on a per occurrence and not claims-made basis; (2) the amount of insurance shall be a combined single limit of not less than Two Million Dollars ($2,000,000) with a deductible or self-insured retention amount of not more than One Hundred Thousand Dollars ($100,000); (3) the policy shall name or be endorsed to Seller and Seller’s officers, officials, members, employees, agents, representatives, and volunteers (collectively, “Seller & Seller Personnel”) as additional insureds; (4) the insurance shall not contain any special limitations on the scope of protection afforded to Seller & Seller Personnel; (5) the policy shall not be canceled by the insurer or Buyer unless there is a minimum of thirty (30) days prior written notice to Seller; (6) the insurer shall waive subrogation rights against the Seller & Seller Personnel; and (7) the insurance shall be primary insurance and not contributory with any insurance any of Seller & Seller Personnel may have; and (8) the insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability; and (vi) following Buyer’s entry, repair any and all damage to the Property caused by such inspections or investigations in a timely manner. 2.2.3 Buyer shall promptly pay and discharge all demands for payment relating to Buyer’s entry on and investigation of the Property and take all other steps to avoid the assertion of claims of lien against the Property. In the event a claim of lien is recorded by reason of Buyer’s entry on the Property, Buyer, within twenty (20) days of such recordation, shall either (i) record or deliver a surety bond sufficient to release such claim or lien in accordance with applicable law; or (ii) provide Seller with such other assurance as Seller may require for the payment of the claim or lien. Seller may elect to record and post notices of non-responsibility from time to time on and about the Property. 2.2.4 Prior to expiration of the Due Diligence Period, Buyer shall notify Seller in writing (i) of Buyer’s election to terminate the Escrow and this Agreement, if Buyer disapproves of the physical or environmental conditions of the Property and, as a result, does not wish to proceed with purchasing the Property (“Buyer’s Property Termination Notice”), or (ii) of any objections Buyer may have (the “Disapproved Property Matters”) to any physical or environmental conditions of the Property (“Buyer’s Property Objection Notice”). Buyer’s approval or disapproval of the physical and environmental conditions of the Property may be granted or withheld in Buyer’s sole and absolute discretion. In the event Buyer terminates this Agreement pursuant to this Section, Buyer and Seller shall be relieved of all further liability under this Agreemen t, except for Buyer’s indemnification obligations set forth in this Agreement and any other obligations that expressly survive termination of this Agreement, and except that Seller shall be entitled to the Independent Contract Consideration (but not the Earnest Money Deposit, which shall be returned to Buyer). Buyer’s failure to provide Seller with a Buyer’s 20 882/015610-0040 12712133.2 a11/15/18a10/23/18 -5- Property Termination Notice or a Buyer’s Property Objection Notice prior to the expiration of the Due Diligence Period shall constitute Buyer ’s disapproval of the condition of the Property, and this Agreement shall terminate, except for Buyer’s indemnification obligations set forth in this Agreement and any other obligations that expressly survive termination of this Agreement, and except that Seller shall be entitled to the Independent Contract Consideration (but not the Earnest Money Deposit, which, upon such termination, shall be returned to Buyer). If Buyer provides to Seller Buyer’s Property Objection Notice, Seller shall have a period of fifteen (15) days after receipt of Buyer’s Property Objection Notice in which to deliver written notice to Buyer (“Seller’s Response”) of Seller’s election to either (i) agree to remove the Disapproved Property Matters prior to the Close of Escrow, or (ii) decline to remove the Disapproved Property Matters and terminate the Escrow and the obligations of Buyer and Seller to purchase and sell the Property under this Agreement. Seller’s failure to provide Buyer with Seller’s Response within said period shall constitute Seller’s election not to remove the Disapproved Property Matters prior to the Close of Escrow. If Seller notifies Buyer of its election, or is deemed to have elected, to terminate rather than remove the Disapproved Property Matters, Buyer shall have the right, by written notice delivered to Seller within five (5) days after Buyer’s receipt of Seller’s Response or the date Seller is deemed to have elected to terminate, to agree to accept the Property subject to the Disapproved Property Matters, in which event Seller’s election to terminate shall be of no effect, and Buyer shall take title subject to such Disapproved Property Matters without any adjustment to or credit against the Purchase Price. 3. ESCROW . 3.1 Opening of Escrow. Closing of the sale of the Property shall take place through an escrow (“Escrow”) to be established within three (3) business days after the Effective Date with Four Seasons Escrow, at its office located at 51351 Avenida Bermudas, La Quinta, California 92253 (“Escrow Holder”). The opening of the Escrow (the “Opening of Escrow ”) shall be deemed to be the date that a fully executed copy of this Agreement is delivered to the Escrow Holder. Escrow Holder is instructed to notify Buyer and Seller in writing of the date of the Opening of Escrow. 3.2 Escrow Instructions. This Agreement, once deposited in Escrow, shall constitute the joint escrow instructions of Buyer and Seller to Escrow Holder. Additionally, if Escrow Holder so requires, Buyer and Seller agree to execute the form of escrow instructions that Escrow Holder customarily requires in real property escrows administered by it. In the event of any conflict or inconsistency between Escrow Holder ’s standard instructions and the provisions of this Agreement, the provisions of th is Agreement shall supersede and be controlling. 4. CLOSE OF ESCROW . 4.1 Close of Escrow; Outside Closing Date. Provided that all of the conditions of this Agreement precedent to the “Close of Escrow” (as hereinafter defined) have been satisfied (or waived by the appropriate party) prior to or on the “Outside Closing Date,” (as hereinafter defined) the closing for the sale and purchase of the Property shall take 21 882/015610-0040 12712133.2 a11/15/18a10/23/18 -6- place on the date which is thirty (30) days after the date on which all of “Buyer’s Conditions to Closing” and all of “Seller’s Conditions to Closing” (as those terms are defined in Section 8) have been satisfied (or waived by the appropriate party); provided, however, in no event shall the closing occur, if at all, later than ninety (90) days after the Effective Date (“Outside Closing Date”). The terms “Close of Escrow” and the “Closing Date” are used herein to mean the time Seller’s grant deed conveying fee title to the Property to Buyer is recorded in the Official Records of the Office of the County R ecorder of San Bernardino (“Official Records”). If the Escrow is not in a condition to close by the Outside Closing Date, either party not then in default hereunder may, upon five (5) days advance written notice to the other party and Escrow Holder, elect to terminate this Agreement and the Escrow. No such termination shall release either party then in default from liability for such default. If neither party so elects to terminate this Agreement and the Escrow, Escrow Holder shall close the Escrow as soon as possible. 4.2 Recordation; Release of Funds and Documents. 4.2.1 Escrow Holder is directed, on the Closing Date, to record in the Official Records, the following documents in the order listed: (i) a grant deed substantially in the form attached hereto and incorporated herein as Exhibit ”B” transferring title to the Property to Buyer (“Grant Deed”); and (ii) such other and further documents as may be directed jointly by Buyer and Seller. 4.2.2 Upon the Closing Date, Escrow Holder shall deliver (i) the Purchase Price, less any of Seller’s closing costs, to Seller, and (ii) conformed copies of all recorded documents to both Buyer and Seller. 4.3 Escrow Cancellation Charges. If the Escrow does not close due to a default by one of the parties, the defaulting party shall bear all “Escrow Cancellation Charges” (as that term is defined below). If the Close of Escrow does not occur for any reason other than the default of a party, then Buyer and Seller shall each pay fifty percent (50%) of any Escrow Cancellation Charges. As used herein, “Escrow Cancellation Charges” means all fees, charges and expenses incurred by Escrow Holder or third parties engaged by Escrow Holder, as well as all expenses related to the services of the Title Company in connection with the issuance of the Preliminary Title Report and other title matters. 5. DELIVERY OF DOCUMENTS REQUIRED FROM BUYER AND SELLER. 5.1 Buyer’s Obligations. Buyer agrees that on or before 10:00 a.m. of the Closing Date, Buyer shall deposit or cause to be deposited with Escrow Holder the following: (a) the Purchase Price, less the Independent Contract Consideration and Earnest Money Deposit; (b) any and all additional funds, instruments or other documents required from Buyer (executed and acknowledged where appropriate) as may be 22 882/015610-0040 12712133.2 a11/15/18a10/23/18 -7- reasonably necessary in order for the Escrow Holder to comply with the terms of this Agreement. 5.2 Seller’s Obligations. Seller agrees that on or before 10:00 a.m. of the Closing Date, Seller shall deposit or cause to be deposited with Escrow Holder each of the following: (a) the executed and acknowledged Grant Deed; (b) a Certificate of Non-Foreign Status (the “Non-Foreign Affidavit”) executed and acknowledged by Seller in the form attached hereto as Exhibit ”C”; and (c) all other funds, items, and instruments required from Seller (executed and acknowledged where appropriate) as may be reasonably necessary in order for Escrow Holder to comply with the provisions of this Agreement. 6. TITLE INSURANCE POLICY. 6.1 Title Policy. At the Closing Date for a Phase, the Title Company, as insurer, shall issue a CLTA extended coverage owner’s policy of title insurance (the “Title Policy”), in favor of Buyer, as insured, with liability in the amount of the Purchase Price, subject to the following: (a) non-delinquent real property taxes and assessments; (b) title exceptions approved or deemed approved by Buyer pursuant to Section 2.1 above; (c) title exceptions, if any, resulting from Buyer’s entry onto the Property pursuant to the provisions of Section 2.2 above; (d) any other exceptions approved by Buyer; and (e) the standard printed conditions and exceptions contained in an ALTA standard coverage owner’s policy of title insurance regularly issued by the Title Company. 6.2 Payment for Title Policy. Seller shall be responsible to pay for the costs of a standard ALTA owner’s policy of title insurance. Buyer shall be responsible for all other costs for the Title Policy, including, without limitation, the additional costs for an extended ALTA owner’s policy of title insurance, plus any title endorsements requested by Buyer. Buyer shall also pay for the ALTA survey, if applicable. 7. REAL PROPERTY TAXES. Buyer acknowledges that due to Seller’s status as a public entity, during the pendency of Seller’s ownership, the Property has been exempt from the payment of property taxes and assessments. After the Closing, Buyer shall be responsible for paying for all property taxes or assessme nts assessed against the Property for any period after the Closing. 23 882/015610-0040 12712133.2 a11/15/18a10/23/18 -8- 8. CONDITIONS PRECEDENT TO CLOSING. 8.1 Conditions Precedent to Buyer’s Obligations. The obligations of Buyer under this Agreement to purchase the Property and close the Escrow shall be subject to the satisfaction or signed written waiver by Buyer of each and all of the following conditions precedent (collectively “Buyer’s Conditions to Closing”): (a) Buyer shall have approved the condition of the title to the Property, in accordance with Section 2.1 hereof; (b) Buyer shall have approved the condition of the Property, in accordance with Section 2.2 hereof; (c) on the Closing Date, the Title Company shall be irrevocably committed to issue the Title Policy pursuant to Section 6 above insuring fee title to the Property as being vested in Buyer; (d) Escrow Holder holds all instruments and funds required for the Close of Escrow and will deliver to Buyer the instruments and funds, if any, accruing to Buyer pursuant to this Agreement; (e) except as otherwise permitted by this Agreement, all representations and warranties by the Seller in this Agreement shall be true on and as of the Closing Date as though made at that time and all covenants of Seller pursuant to this Agreement shall have been fulfilled by the Closing Date; (f) Seller is not in material default of any term or condition of this Agreement. In the event that any of Buyer’s Conditions to Closing are not satisfied, or waived in a writing signed by Buyer, prior to the expiration of the applicable period for satisfaction or waiver, Buyer may terminate this Agreement. In the event of such termination, neither party shall thereafter have any obligations to, or rights against, the other under this Agreement, except for any obligations that expressly survive the termination of this Agreement. 8.2 Conditions Precedent to Seller’s Obligations. The obligations of Seller under this Agreement shall be subject to the satisfaction or signed written waiver by Seller of each and all of the following conditions precedent (“Seller’s Conditions to Closing”): (a) Escrow Holder holds the Purchase Price and all other instruments and funds required for the Closing and will deliver to Seller the instruments and funds, including but not limited to the Purchase Price (less Seller ’s closing costs), accruing to Seller pursuant to this Agreement; (b) Buyer shall have obtained all approvals and permits required to develop the Property, including, without limitation, building permits; 24 882/015610-0040 12712133.2 a11/15/18a10/23/18 -9- (c) except as otherwise permitted by this Agreement, all representations and warranties by the Buyer in this Agreement shall be true on and as of the Closing Date as though made at that time and all covenants of Buyer pursuant to this Agreement shall have been fulfilled by the Closing Date; (d) there shall exist no pending or threatened actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against the Buyer that would materially and adversely affect Buyer’s ability to unconditionally perform its obligations under this Agreement; and (e) Buyer shall have delivered the funds required hereunder and all of the documents to be executed by Buyer set forth in Section 5.1 and shall not be in default under this Agreement. In the event that any of Seller’s Conditions to Closing are not satisfied, or waived in a writing signed by Seller, prior to the expiration of the applicable period for satisfaction or waiver, Seller may terminate this Agreement. In the event of such termination, neither party shall thereafter have any obligations to, or rights against, the other under this Agreement, except for any obligations that expressly survive the termination of this Agreement. 9. POSSESSION. Possession of the Property shall be delivered by Seller to Buyer on the Closing Date. 10. ALLOCATION OF COSTS. 10.1 Buyer’s Costs. Buyer shall pay the following costs in connection with the Closing: (a) fifty percent (50%) of Escrow Holder’s escrow fee; (b) Buyer’s own attorney’s fees incurred in connection with this Agreement and the transactions contemplated hereby; (c) All additional costs for an extended ALTA owner’s policy of title insurance, plus any title endorsements requested by Buyer. 10.2 Seller’s Costs. Seller shall pay the following costs in connection with the Closing: (a) fifty percent (50%) of the Escrow Holder’s escrow fee; (b) Seller’s own attorney’s fees in connection with this Agreement and the transactions contemplated hereby; (c) Any documentary transfer taxes associated with the conveyance; 25 882/015610-0040 12712133.2 a11/15/18a10/23/18 -10- (d) All of the charges, if any, for recording the Grant Deed, if any; and (e) All of the costs for a standard ALTA owner’s policy of title insurance. 11. REPRESENTATIONS AND WARRANTIES. 11.1 Buyer’s Representations, Warranties and Covenants. Buyer hereby makes the following representations and warranties to Seller, each of which is true in all respects as of the date hereof and shall be true in all respects on the Closing Date: 11.1.1 Buyer is duly organized and existing. 11.1.2 Buyer has the legal power, right, and authority to execute, deliver and perform Buyer’s obligations under this Agreement and the documents executed and delivered by Buyer pursuant hereto. 11.1.3 All requisite action (corporate, trust, partnership, or otherwise) has been taken by Buyer in connection with entering into this Agreement and the instruments referenced herein and the consummation of the transactions contemplated hereby. No consent is required which has not been obtained to permit Buyer to enter into this Agreement and consummate the transaction hereby. 11.1.4 The entering into this Agreement does not violate any provision of any other agreement to which Buyer is bound. 11.2 Seller’s Representations and Warranties. Seller hereby makes the following representations and warranties to Buyer, each of which is true in all respects as of the date hereof and shall be true in all respects on the Closing Date: 11.2.1 Seller is duly organized and existing. 11.2.2 Seller has the legal power, right, and authority to execute, deliver and perform Seller’s obligations under this Agreement and the documents executed and delivered by Seller pursuant hereto. 11.2.3 All requisite action has been taken by Seller in connection with entering into this Agreement and the instruments referenced herein and the consummation of the transactions contemplated hereby. No consent is required which has not been obtained to permit Seller to enter into this Agreement and consummate the transactions contemplated hereby. 11.2.4 To Seller’s actual knowledge, the entering into this Agreement does not violate any provision of any other agreement to which Seller is bound. 11.2.5 To Seller’s actual knowledge, there is no pending or threatened litigation, lawsuit or administrative proceeding which would adversely affect the Property. 26 882/015610-0040 12712133.2 a11/15/18a10/23/18 -11- 11.2.6 To Seller’s actual knowledge, there are no contracts or leases affecting the Property and no agreements entered into, by or under Seller which shall survive the Close of Escrow. 11.2.7 Seller has no actual knowledge of the presence of any Hazardous Materials on the Property, or any portion thereof, and Seller has not been advised or notified by any third parties, prior owners of the Property, or any federal, state or local governmental agency, of the presence of any Hazardous Materials on the Property. Throughout this Agreement, terms such as “to Seller’s actual knowledge,” “Seller has no actual knowledge,” or like phrases mean the actual present and conscious awareness or knowledge, without a duty to inquire or investigate, of the Executive Director of the La Quinta Housing Authority. In the event Seller becomes aware of a change in circumstance during the term of the Escrow which would cause any of the representations or warranties of Seller unde r this Section 11 to be untrue, Seller shall advise Buyer of such change in circumstance in writing within five (5) business days from Seller’s discovery thereof. Buyer shall then have fifteen (15) business days from receipt of such notice from Seller to deliver written notice to Seller of Buyer’s election to either (i) terminate this Agreement, or (ii) waive objection to such change in circumstance and to accept title to the Property subject to such change in circumstance. Buyer’s failure to notify Seller in writing within said fifteen (15) business day period shall conclusively be deemed Buye r’s election to waive objection to such change in circumstance and to proceed to close the Escrow subject to such change in circumstance. It is understood and agreed that with the exception of the limited representations expressly set forth in this Section 11, Seller has not at any time made and is not now making, and Seller specifically disclaims, any warranties or representations of any kind or character, express or implied, with respect to the Property, or any improvements thereon, including, but not limited to, warranties or representations as to (a) matters of title, (b) environmental matters relating to the Property or any portion thereof, including, without limitation, the existence or lack thereof of “Hazardous Materials” (as defined below) in, on, under or in the vicinity of the Property, or migrating to or from the Property, either in soil, vapors or surface water or groundwater, (c) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water, and geologic faults and the resulting damage of past and/or future faulting, (d) whether, and to the extent to which the Property or any portion thereof is affected by any stream (surface or underground), body of water, wetlands, flood prone area, flood plain, floodway or special flood hazard, (e) drainage, (f) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (g) the presence of endangered species or any environmentally sensitive or protected areas, (h) zoning or building entitlements to which the Property or any portion thereof may be subject, (i) the availability of any utilities to the Property or any portion thereof including, without limitation, water, sewage, gas and electric, (j) the permitted uses and restrictions on uses on the Property, (k) usages of adjoining property, (l) access 27 882/015610-0040 12712133.2 a11/15/18a10/23/18 -12- to the Property or any portion thereof, (m) the value, compliance with any applicable plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, operation, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, (n) the condition or use of the Property or compliance of the Property with any or a ll past, present or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (o) the existence or non-existence of underground storage tanks, surface impoundments, or landfills, (p) the merchantability of the Property or fitness of the Property for any particular purpose, (q) tax consequences, or (r) any other matter or thing with respect to the Property. Buyer acknowledges and agrees that Seller is selling and conveying to Buyer, the Property, “AS IS, WHERE IS, WITH ALL FAULTS,” and that with the exception of the limited representations expressly set forth in this Section 11 Buyer has not relied on and will not rely on, and Seller has not made and is not liable for or bound by, any express or implied warranties, guarantees, statements, representations or information pertaining to the Property or relating thereto, made or furnished by Seller or any real estate broker, agent or third party representing or purporting to represent S eller, to whomever made or given, directly or indirectly, orally or in writing. Buyer represents that it is a knowledgeable, experienced and sophisticated purchaser of real estate, and that Buyer is relying solely on its own expertise and that of Buyer’s consultants and representatives in purchasing the Property, and shall make an independent verification of the accuracy of any documents and information provided by Seller. Buyer will conduct such inspections and investigations of the Property as Buyer d eems necessary, including, but not limited to, the physical and environmental conditions thereof, and shall rely solely upon the same. By failing to terminate this Agreement prior to the expiration of the Due Diligence Period, Buyer acknowledges that Seller has afforded Buyer a full opportunity to conduct all such investigations of the Property as Buyer deemed necessary to satisfy itself as to the condition of the Property and the existence or non-existence or removal or remediation action to be taken with respect to any Hazardous Materials in, on, within or migrating to or from the Property, and that Buyer will rely solely upon the same and not upon any information provided by or on behalf of Seller or its agents or employees with respect thereto. Upon Closing, Buyer shall assume the risk with respect to the Property, that adverse matters, including, but not limited to, adverse physical or construction defects, or adverse environmental or health and safety conditions, may not have been revealed by Buyer’s inspections, assessments, investigations, and/or testing. BUYER’S INITIALS: _________ Buyer hereby acknowledges that it will have had full opportunity to investigate, assess, test, and inspect the Property during the Due Diligence Period, and during such period, to observe the physical and environmental characteristics and existing conditions, including but not limited to, the opportunity to conduct such investigation, assessment, testing, monitoring and study on and of the Property and of adjacent areas , as Buyer deems necessary, in accordance with law. Buyer, therefore, individually and collectively, for itself and its members, partners, officers, directors, employees, agents, successors, 28 882/015610-0040 12712133.2 a11/15/18a10/23/18 -13- assigns, and all entities related to any of the foregoing, and o n behalf of all persons claiming any interest in the Property or this Agreement, including but not limited to any and all future owners, lessees, and/or operators, of the Property and their successors, hereby expressly waives, releases, discharges and fore ver relinquishes any and all claims, rights of action, causes of action, rights and/or remedies Buyer has or hereafter may have, whether known or unknown, fixed or contingent, against Seller and Seller’s directors, members, officers, officials, attorneys, employees, representatives, and agents (a) regarding any matters affecting the Property and any condition of the Property whatsoever; and (b) regarding: (i) the existence or potential existence of any Hazardous Materials in, on, under, within or migrating to or from the Property, either in soil, vapor, surface water or groundwater, and (ii) any violations or alleged violations of any “Environmental Laws” (as defined below) regarding the Property. BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 (“SECTION 1542”), WHICH IS SET FORTH BELOW: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” BUYER ACKNOWLEDGES AND AGREES THAT IT MAY HEREAFTER DISCOVER FACTS OR LAW DIFFERENT FROM OR IN ADDITION TO THOSE WHICH IT NOW BELIEVES TO BE TRUE WITH RESPECT TO THE RELEASE OF CLAIMS. BUYER ACKNOWLEDGES AND AGREES THAT THE RELEASE IT IS PROVIDING SHALL REMAIN EFFECTIVE IN ALL RESPECTS NOTWITHSTANDING SUCH DIFFERENT OR ADDITIONAL FACTS OR LAW OR ANY PARTIES’ DISCOVERY THEREOF. BUYER SHALL NOT BE ENTITLED TO ANY RELIEF IN CONNECTION THEREWITH, INCLUDING BUT NOT LIMITED TO ANY DAMAGES OR ANY RIGHT OR CLAIM TO SET ASIDE OR RESCIND THIS AGREEMENT. BY INITIALING BELOW, BUYER HEREBY WAIVES AND RELEASES ANY AND ALL RIGHTS PROVIDED UNDER THE PROVISIONS OF SECTION 1542 AND ALL SIMILAR OR RELATED STATUTES THERETO, IN CONNECTION WITH THESE MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES: BUYER’S INITIALS: _________ Buyer acknowledges and agrees that the disclaimers, waivers and releases along with the other agreements set forth in this section 11, are all an integral part of this Agreement, and Seller would not have agreed to enter into this Agreement without such terms, and that all such terms shall survive the Close of Escrow. 29 882/015610-0040 12712133.2 a11/15/18a10/23/18 -14- As used in this Agreement, the term “Hazardous Material(s)” includes, without limitation, any hazardous or toxic material, substance, irritant, chemical, or waste, including without limitation (a) any material defined, classified, designated, listed or otherwise considered under any Environmental Law, including, without limitation, as defined in California Health & Safety Code Section 25260, as a “hazardous waste,” “hazardous substance,” “hazardous material,” “extremely hazardous waste,” “acutely hazardous waste,” “radioactive waste,” “biohazardous waste,” “pollutant,” “toxic pollutant,” “contaminant,” “restricted hazardous waste,” “infectious waste,” “toxic substance,” or any other term or expression intended to define, list, regulate or classify substances by reason of properties harmful to health, safety or the indoor or outdoor environment, (b) any material, substance or waste which is toxic, ignitable, corrosive, reactive, explosive, flammable, infectious, radioactive, carcinogenic or mutagenic, and which is or becomes regulated by any local governmental authority, any agency of the State of California or any agency of the United States Government, (c) asbestos, and asbestos containing material, (d) oil, petroleum, petroleum based products and petroleum additives and derived substances, (e) urea formaldehyde foam insulation, (f) polychlorinated biphenyls (PCBs), (g) freon and other chlorofluorocarbons, (h) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources, (i) mold, fungi, viruses or bacterial matter, and (j) lead-based paint. As used in this Agreement, the term “Environmental Laws” means any and all federal, state and local laws, statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, rele ase, generation, use, handling, assessment, investigation, study, monitoring, removal, remediation, cleanup, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, inclu ding, without limitation, the following statutes and their underlying regulations, as they have been amended from time to time, and the following referenced common laws: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as a mended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne Water Quality Control Act (Cal. Wat. Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65 – Cal. Health & Safety Code § 25249.5 et seq.), the California Hazardous Waste Control Law (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), the Carpenter-Presley-Tanner Hazardous Substances Account Act (California Health and Safety Code, Section 25300 et seq.), the California Underground Storage of Hazardous Substances Laws 30 882/015610-0040 12712133.2 a11/15/18a10/23/18 -15- (Chapter 6.7 of Division 20 of the Cal. Health and Safety Code, §25280 et seq.) and the California common laws of nuisance, trespass, waste and ultra-hazardous activity. 12. CONDEMNATION. In the event that, prior to the Close of Escrow, any governmental entity shall commence any proceedings of or leading to eminent domain or similar type proceedings to take all or any portion of the Property, Buyer and Seller shall promptly meet and confer in good faith to evaluate the effect of such action on the purposes of this Agreement and following such meeting either Buyer or Seller may terminate this Agreement. 13. RISK OF PHYSICAL LOSS. Risk of physical loss to the Property shall be borne by Seller prior to the Close of Escrow and by Buyer thereafter. In the event that the Property shall be damaged by fire, flood, earthquake or other casualty B uyer shall have the option to terminate this Agreement, provided notice of such termination is delivered to Seller within fifteen (15) business days following the date Buyer learns of the occurrence of such casualty. If Buyer fails to terminate this Agree ment pursuant to the foregoing sentence within said fifteen (15) business day period, Buyer shall complete the acquisition of the Property, in which case Seller shall assign to Buyer the interest of Seller in all insurance proceeds relating to such damage. Seller shall consult with Buyer regarding any proposed settlement with the insurer and Buyer shall have the reasonable right of approval thereof. Seller shall hold such proceeds until the Close of Escrow. In the event this Agreement is terminated for any reason, Buyer shall have no right to any insurance proceeds. 14. WAIVER OF DAMAGES; SPECIFIC PERFORMANCE. In the event a party defaults under this Agreement, the non-defaulting party’s sole and exclusive remedy will be for specific performance of this Agreement. EACH PARTY HEREBY WAIVES ANY RIGHT TO PURSUE DAMAGES RESULTING FROM A DEFAULT OR BREACH OF THIS AGREEMENT, AND IN NO EVENT SHALL THE DEFAULTING PARTY BE LIABLE FOR DAMAGES FOR A DEFAULT OR BREACH OF DEFAULTING PARTY’S OBLIGATION UNDER THIS AGREEMENT, ALL OF WHICH RIGHTS ARE HEREBY WAIVED AND RELINQUISHED BY THE NON-DEFAULTING PARTY. The parties agree that the foregoing limitation on their respective remedies and measure of damages is reasonable under all of the circumstances of this Agreement, and is a material consideration for the parties entering into this Agreement. Seller’s Initials Buyer’s Initials 15. MISCELLANEOUS. 15.1 Assignment. This Agreement shall be binding upon and shall inure to the benefit of Buyer and Seller and their respective heirs, personal representatives, successors and assigns. Neither party to this Agreement may assign this Agreement or any interest or right hereunder or under the Escrow without the prior written consent and approval of the other party, which consent and approval may be withheld in the sole and absolute discretion of such other party, and any assignment made in violation of this 31 882/015610-0040 12712133.2 a11/15/18a10/23/18 -16- Section 15.1 shall be null and void. With the exception of the express rights of the City under this Agreement, no provision of this Agreement is intended nor shall in any way be construed to benefit any party not a signatory hereto or to create a third party beneficiary relationship. 15.2 Choice of Laws. This Agreement shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law without regard to conflict of law principles. Service of process on Buyer shall be made in accordance with California law. Service of process on Seller shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 15.3 Attorney’s Fees. In the event of any action between Buyer and Seller seeking enforcement of any of the terms and conditions to this Agreement o r an Escrow or otherwise in connection with the Property, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney’s fees. 15.4 Notices. All notices under this Agreement shall be effective (i) upon personal delivery, (ii) upon delivery by reputable overnight courier that provides a receipt with the date and time of delivery, or (iii) three (3) business days after deposit in the United States mail, registered or certified, postage fully prepaid and addressed to the respective parties as set forth below or as to such other address as the parties may from time to time designate in writing: To Buyer: Joe W. Stemmer, Jr. Construction __________________________ __________________________ Phone No.: ________________ Attention: __________________ Copy to: _______________________ _______________________ _______________________ Attn: ___________________ To Seller: La Quinta Housing Authority 78495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-____ Attention: Executive Director Copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92628-1950 Phone No.: (714) 641-5100 Attention: William H. Ihrke, Esq. 32 882/015610-0040 12712133.2 a11/15/18a10/23/18 -17- 15.5 Fair Meaning. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. 15.6 Headings. The headings at the beginning of each numbered Section of this Agreement are solely for the convenience of the parties hereto and are not a part of this Agreement. 15.7 Nonliability of Seller Officials. No officer, official, member, employee, agent, or representative of Seller shall be liable for any amounts due hereunder, and no judgment or execution thereon entered in any action hereon shall be personally enforced against any such officer, official, member, employee, agent, or representative. 15.8 Gender; Number. As used in this Agreement, masculine, feminine, and neuter gender and the singular or plural number shall be deemed to include the others wherever and whenever the context so dictates. 15.9 Survival. This Agreement and all covenants to be performed after the Closing Date, and, except as otherwise set forth herein, all representations and warranties contained herein, shall survive the Closing Date and shall remain a binding contract between the parties hereto. 15.10 Time of Essence. Time is of the essence of this Agreement and of each and every term and provision hereof, it being understood that t he parties hereto have specifically negotiated the dates for the completion of each obligation herein. 15.11 Waiver. A waiver of a provision hereof shall be effective only if said waiver is in writing, and signed by both Buyer and Seller. No waiver of any brea ch or default by any party hereto shall be considered to be a waiver of any future breach or default unless expressly provided herein or in the waiver. 15.12 Broker’s/Consulting Fees. Seller and Buyer represent and warrant to the other that neither Buyer nor Se ller has employed any real estate broker to represent its interest in this transaction. Each party agrees to indemnify and hold the other free and harmless from and against any and all liability, loss, cost, or expense (including court costs and reasonable attorney’s fees) in any manner connected with a claim asserted by any individual or entity for any broker’s commission in connection with the conveyance of the Property arising out of agreements by the indemnifying party to pay any commission. 15.13 No Withholding Because Non-Foreign Seller. Seller represents and warrants to Buyer that Seller is not, and as of the Close of Escrow will not be, a foreign person within the meaning of Internal Revenue Code Section 1445 or an out -of-state seller under California Revenue and Tax Code Section 18805 and that it will deliver to Buyer on or before the Close of Escrow a Certificate of Non-foreign Status on Escrow Holder’s standard form pursuant to Internal Revenue Code Section 1445(b)(2) and the regulations promulgated thereunder and a California Form 593-C. 15.14 Counterparts. This Agreement may be executed in any number of counterparts, all of which shall be of equal legal force and effect. 33 882/015610-0040 12712133.2 a11/15/18a10/23/18 -18- 15.15 Severability. If any term, covenant or condition of this Agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant, or condition to persons, entities, or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 15.16 Exhibits. The following exhibits are attached hereto and incorporated herein by this reference: Exhibit “A” Legal Description of Property Exhibit “B” Form of Grant Deed Exhibit “C” Certificate of Non-Foreign Status 15.17 Covenants of Seller. Seller agrees that during the period between the Effective Date of this Agreement and the Closing Date: (a) Seller shall maintain the Property in not less than the state of repair as that existing on the Effective Date (excepting ordinary wear and tear; (b) Seller shall not convey, grant, lease, rent, license, assign, mortgage, hypothecate, encumber, or otherwise transfer (on or off record) the Property or any interest therein; (c) Seller shall not alter the physical condition of the P roperty or introduce or release, or permit the introduction or release, of any Hazardous Material in, from, under, or on the Property; (d) Prior to the Closing Date, Seller shall maintain Seller’s existing insurance on the Property. 15.18 Covenant Against Discrimination. Buyer covenants that in its performance of this Agreement it shall not discriminate against any person or group of persons on account of any impermissible classification including but not limited to race, color, creed, gender, sexual orientation, age, religion, marital status, national origin, or ancestry. 15.19 Entire Agreement; Amendment. Except as set forth above, this Agreement and the exhibits incorporated herein contain the entire agreement of Buyer and Seller with respect to the matters contained herein, and no prior agreement or understanding pertaining to any such matter shall be effective for any purpose. No provisions of this Agreement may be amended or modified in any manner whatsoever except by an agreement in writing signed by duly authorized officers or representatives of each of the parties hereto. 15.20 Facsimile Signatures. Signatures of the parties transmitted by facsimile shall be deemed binding. However, each party agrees to submit their original signature to the other party within five (5) business days after execution hereof. 34 882/015610-0040 12712133.2 a11/15/18a10/23/18 -19- [SIGNATURES ON NEXT PAGE] 35 882/015610-0040 12712133.2 a11/15/18a10/23/18 -20- IN WITNESS WHEREOF, Buyer and Seller each hereby represents that it has read this Agreement, understands it, and hereby executes this Agreement to be effective as of the day and year first written above. Date:____________________, 2018 “Seller” LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic By: Name: Frank J. Spevacek Its: Executive Director ATTEST: Monika Radeva , Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: William H. Ihrke, Authority Counsel Date:____________________, 2018 “Buyer” JOE W. STEMMER, JR. CONSTRUCTION, a California corporation By: ______________________________ Name: Joe W. Stemmer, Jr. Its: Stewart Title agrees to act as Escrow Holder in accordance with the terms of this Agreement. Date:____________________, 2018 STEWART TITLE By: Name: 36 882/015610-0040 12712133.2 a11/15/18a10/23/18 EXHIBIT A EXHIBIT “A” LEGAL DESCRIPTION OF PROPERTY The land situated in the City of La Quinta, in the County of Riverside, State of California, described as follows: APN: 773-223-022 and 773-234-015 37 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 EXHIBIT B EXHIBIT “B” FORM OF GRANT DEED [SEE FOLLOWING PAGES] 38 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 -1- RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Joe W. Stemmer, Jr. Construction _________________________ _________________________ Attn: Joe W. Stemmer SPACE ABOVE THIS LINE FOR RECORDER’S USE (Exempt from Recordation Fee per Gov. Code § 27383) GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic (the “Grantor”), hereby grants to JOE W. STEMMER, JR. CONSTRUCTION, a California corporation, that certain real property (“Property”) located in the City of La Quinta, County of Riverside, State of California, described in the legal description attached hereto as Attachment No. 1 and incorporated herein by this reference, subject to all matters of record. “Grantor” LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic By: Name: Frank J. Spevacek Its: Executive Director ATTEST: Monika Radeva, Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: William H. Ihrke, Authority Counsel 39 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 -2- A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of Riverside ) On _________________________, before me, , (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and a cknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 40 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 -3- ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY The land situated in the City of La Quinta, in the County of Riverside, State of California, described as follows: APN: 773-223-022 and 773-234-015 41 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 EXHIBIT C EXHIBIT “C” CERTIFICATE OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest in the La Quinta Housing Authority, a public body, corporate and politic (“Seller”), the undersigned hereby certifies the following on behalf of the Seller: 1. Seller is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. Seller’s U.S. employer identification number is 953740431; and 3. Seller’s office address is 78-495 Calle Tampico, La Quinta, California 92253. Seller understands that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete. I further declare that I have authority to sign this document on behalf of Seller. “Seller” LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic Date:____________________, 2018 By: Name: Frank J. Spevacek Its: Executive Director 42 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS by and between LA QUINTA HOUSING AUTHORITY (“SELLER”) and JOE W. STEMMER, JR. CONSTRUCTION (“BUYER”) 43 TABLE OF CONTENTS Page 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 -i- 1. PURCHASE PRICE ............................................................................................ 1 1.1 Amount .................................................................................................... 1 1.2 Payment of Purchase Price ..................................................................... 1 2. DUE DILIGENCE ................................................................................................ 2 2.1 Title/Survey .............................................................................................. 2 2.2 Environmental Condition .......................................................................... 3 3. ESCROW ........................................................................................................... 5 3.1 Opening of Escrow .................................................................................. 5 3.2 Escrow Instructions .................................................................................. 5 4. CLOSE OF ESCROW ........................................................................................ 5 4.1 Close of Escrow; Outside Closing Date ................................................... 5 4.2 Recordation; Release of Funds and Documents ..................................... 6 4.3 Escrow Cancellation Charges .................................................................. 6 5. DELIVERY OF DOCUMENTS REQUIRED FROM BUYER AND SELLER .............................................................................................................. 6 5.1 Buyer’s Obligations .................................................................................. 6 5.2 Seller’s Obligations .................................................................................. 7 6. TITLE INSURANCE POLICY.............................................................................. 7 6.1 Title Policy ............................................................................................... 7 6.2 Payment for Title Policy ........................................................................... 7 7. REAL PROPERTY TAXES ................................................................................. 7 8. CONDITIONS PRECEDENT TO CLOSING ....................................................... 8 8.1 Conditions Precedent to Buyer’s Obligations ........................................... 8 8.2 Conditions Precedent to Seller’s Obligations ........................................... 8 9. POSSESSION .................................................................................................... 9 10. ALLOCATION OF COSTS.................................................................................. 9 10.1 Buyer’s Costs ........................................................................................... 9 10.2 Seller’s Costs ........................................................................................... 9 11. REPRESENTATIONS AND WARRANTIES ..................................................... 10 11.1 Buyer’s Representations, Warranties and Covenants ........................... 10 11.2 Seller’s Representations and Warranties ............................................... 10 44 Page 882/015610-0040 12712133.2 a11/15/18a10/23/18a10/04/18 -ii- 12. CONDEMNATION ............................................................................................ 15 13. RISK OF PHYSICAL LOSS .............................................................................. 15 14. WAIVER OF DAMAGES; SPECIFIC PERFORMANCE ................................... 15 15. MISCELLANEOUS ........................................................................................... 15 15.1 Assignment ............................................................................................ 15 15.2 Choice of Laws ...................................................................................... 16 15.3 Attorney’s Fees ...................................................................................... 16 15.4 Notices ................................................................................................... 16 15.5 Fair Meaning .......................................................................................... 17 15.6 Headings ................................................................................................ 17 15.7 Nonliability of Seller Officials .................................................................. 17 15.8 Gender; Number .................................................................................... 17 15.9 Survival .................................................................................................. 17 15.10 Time of Essence .................................................................................... 17 15.11 Waiver .................................................................................................... 17 15.12 Broker’s/Consulting Fees ....................................................................... 17 15.13 No Withholding Because Non-Foreign Seller ......................................... 17 15.14 Counterparts .......................................................................................... 17 15.15 Severability ............................................................................................ 18 15.16 Exhibits .................................................................................................. 18 15.17 Covenants of Seller ............................................................................... 18 15.18 Covenant Against Discrimination ........................................................... 18 15.19 Entire Agreement; Amendment .............................................................. 18 15.20 Facsimile Signatures.............................................................................. 18 EXHIBIT “A” LEGAL DESCRIPTION OF PROPERTY EXHIBIT “B” FORM OF GRANT DEED EXHIBIT “C” CERTIFICATE OF NON-FOREIGN STATUS 45 46 City of La Quinta HOUSING AUTHORITY MEETING: November 20, 2018 STAFF REPORT AGENDA TITLE: RECEIVE AND FILE FISCAL YEAR 2017/18 HOUSING AUTHORITY YEAR-END BUDGET REPORT AND APPROVE THE AMENDED BUDGET CARRYOVERS RECOMMENDATION Receive and file 2017/18 Housing Authority Year-End Budget Report and approve the amended budget carryovers from 2017/18 to 2018/19. EXECUTIVE SUMMARY •After closing the prior fiscal year, Finance presents a year-end summary that compares the final budget to actual transactions. •Overall revenue was $575,006 higher than budgeted. •Expenditures were $8 million under budget and $8.8 million was carried over to 2018/19 for the Washington Street Apartments’ renovation. FISCAL IMPACT Amended budget carryovers from 17/18 to 18/19 total $8,827,947 and are fully funded with 2004 and 2011 Bond proceeds restricted for housing programs. BACKGROUND/ANALYSIS Total revenues were over budget by $575,006; mostly due to loan repayments, second trust deed payments, and interest earnings. Total expenditures were under budget by $8 million with $8.8 million carried over to 2018/19 for the Washington Street Apartments rehabilitation project. Revenues, expenditures, carryover, and fund balances are discussed in the FY 2017/18 Housing Authority Year-End Budget Report (Attachment 1). ALTERNATIVES No alternatives are applicable. Prepared by: Karla Campos, Finance Director Approved by: Frank J. Spevacek, City Manager Attachment: 1. FY 2017/18 Housing Authority Year-End Budget Report BUSINESS SESSION ITEM NO. 1 47 48 HOUSING AUTHORITY FISCAL YEAR-END 17/18 BUDGET REPORT The La Quinta Housing Authority oversee four funds, which are restricted for housing programs. This report focuses on significant activities and variances from the final budget during the fiscal year ending June 30, 2018. REVENUES Total revenues were over budget by $575,006; mostly due to loan repayments, second trust deed payments, interest earnings. Revenue details are provided in Exhibit A. Negative interest earnings in funds reflect an annual investment valuation entry governed by the Government Accounting Standards Board, whereby, the fair market value of investments as of June 30th of each year lowers or increases interest earnings. This entry does not reduce the cash received from interest earnings in each fund. EXPENSES Housing Authority expenses by fund are summarized below. Housing Authority Revenues Final Budget Actual Variance Housing Authority Fund 1,012,800 1,344,262 331,462 RDA Low-Mod Housing Fund - 17,876 17,876 2004 Bond Fund - (8,367) (8,367) 2011 Bond Fund - 234,034 234,034 Total Revenues 1,012,800 1,587,806 575,006 Housing Authority Expenditures Final Budget Actual Variance Housing Authority Fund Administration 234,220 173,083 (61,137) Washington Street Apartments 718,700 1,541,692 822,992 La Quinta Cove Properties 250,000 153,309 (96,691) RDA Low-Mod Housing Fund 259,000 259,000 - 2004 Bond Fund 1,704,900 347,982 (1,356,918) 2011 Bond Fund 9,400,000 2,023,975 (7,376,025) Total Expenditures 12,566,820 4,499,041 (8,067,779) Capital Projects Carryovers 8,827,947 Operational Carryovers - Total Expenditures After Carryovers 12,566,820 13,326,988 760,168 49 HOUSING AUTHORITY FUND (241) This fund recognizes administrative expenses and housing activities for Washington Street Apartments (WSA) and several properties in the La Quinta Cove. WSA ownership was transferred to the Coachella Valley Housing Coalition (CVHC) on March 15, 2018. This disposition lowered revenues and expenses in this fund when compared to last fiscal year. With the transfer of ownership and project loan, the CVHC assumed the outstanding USDA – Rural Development Loan ($628,448) and the Housing Authority paid off the Provident Bank Loan ($1,280,221) as a contribution to the project. Full note disclosures for these transactions will be incorporated into the 17/18 Comprehensive Annual Financial Report (CAFR) issued in late December 2018. The largest budgetary variance in this fund is derived from the transfer of funds held by the City for WSA. Operational funds totaling $1,193,428 were transferred to CVHC and are noted as financial expenses in Exhibit B. As of June 30, 2018, the available balance in this fund is $10,369,688. LOW-MOD HOUSING FUND (243) Revenue in this fund is solely derived from Redevelopment Agency loan repayments. Annually loan repayments are allocated 80% to the General Fund and 20% to the Low-Mod Housing Fund. The total outstanding loan balance as of June 30, 2018 is $37,014,634; with $7,402,927 or 20% recognized in this fund as a future receivable. In 17/18, a total of $259,000 was expensed for homelessness programs in the greater Coachella Valley. As of June 30, 2018, the available balance in this fund is $1,558,064. 2004 BOND FUND (248) & 2011 BOND FUND (249) WSA’s rehabilitation and relocation plan was incorporated in the 2004 and 2011 Bond Funds budgets, these bonds were refinanced in 2014 and 2016 respectively. These project expenses met the original intended purpose of the bond proceeds and a portion of the unexpended amount is being carried over into 18/19 with the projected completion date anticipated to be in the Fall of 2019. Construction, planning and design costs have been disbursed through monthly draws to CVHC as expenses are incurred. An increase in relocation benefits was a result of a strategy change whereby the CVHC elected to temporarily relocate all residents off- 50 site for the duration of the rehabilitation versus waiting until new units were completed onsite. This resulted in a $1,000,000 increase to the relocation benefits budget, with the primary cost being hotel accommodations for residents during their displacement. This strategy reduced construction costs as it shortened the overall construction schedule and reduced interest carry cost, therefore, savings offset the increase in relocation costs. This construction change altered the original 17/18 budget. When the 18/19 budget was adopted, staff provided an estimate of carryovers from 17/18 to 18/19 based on the original 17/18 budget and all carryovers were limited to the WSA rehabilitation project. Amended carryovers are presented in Exhibit C. Carryovers will fully deplete resources in the 2004 Bond Fund, as originally anticipated. The 2011 Bond Fund is projected to have an estimated ending balance of $16,364,650 as of June 30, 2019. 51 52 2016/17 Actual Revenues 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Revenues Variance w/ Final Budget 241 - HOUSING AUTHORITY 0000 - Undesignated (17,153.91)0.00 0.00 (426.00)(426.00)241-0000-41900 Allocated Interest 2,750,037.96 0.00 0.00 305,277.00 305,277.00241-0000-42706 Loan Repayments 0.00 0.00 93,800.00 93,800.00 0.00241-0000-45000 Sale of Other Assets 0000 - Undesignated Totals:2,732,884.05 0.00 93,800.00 398,651.00 304,851.00 9101 - Housing Authority - Admin 70,218.97 20,000.00 20,000.00 78,181.94 58,181.94241-9101-41900 Allocated Interest 655.09 0.00 0.00 795.29 795.29241-9101-41915 Non-Allocated Interest 0.00 0.00 0.00 1,001.00 1,001.00241-9101-42301 Miscellaneous Revenue 242,599.40 0.00 0.00 122,770.75 122,770.75241-9101-43504 2nd Trust Deed Repayments 9101 - Housing Authority - Admin Totals:313,473.46 20,000.00 20,000.00 202,748.98 182,748.98 9102 - Housing Authority - Wash St Apts 3,113.32 0.00 0.00 5,281.15 5,281.15241-9102-41916 Non-Allocated Interest/WSA 194,072.00 614,800.00 214,800.00 137,308.26 (77,491.74)241-9102-42112 Rent Revenue/Tenant/WSA (3,447.68)0.00 0.00 (1,501.00)(1,501.00)241-9102-42113 Rent Variance - WSA 8,073.48 4,200.00 4,200.00 3,307.63 (892.37)241-9102-42302 Miscellaneous Revenue/WSA 433,192.00 0.00 400,000.00 304,474.45 (95,525.55)241-9102-43520 Federal Government Assist. Prgm/WS 9102 - Housing Authority - Wash St Apts Totals:635,003.12 619,000.00 619,000.00 448,870.49 (170,129.51) 9103 - Housing Authority - LQRP 288,018.22 280,000.00 280,000.00 293,991.31 13,991.31241-9103-43502 Rent Revenue/LQRP 9103 - Housing Authority - LQRP Totals:288,018.22 280,000.00 280,000.00 293,991.31 13,991.31 241 - HOUSING AUTHORITY Totals:3,969,378.85 919,000.00 1,012,800.00 1,344,261.78 331,461.78 (17,153.91) 0.00 0.00 (426.00) (426.00) 2,750,037.96 0.00 0.00 305,277.00 305,277.00 0.00 0.00 93,800.00 93,800.00 0.00 2,732,884.05 0.00 93,800.00 398,651.00 304,851.00 70,218.97 20,000.00 20,000.00 78,181.94 58,181.94 655.09 0.00 0.00 795.29 795.29 0.00 0.00 0.00 1,001.00 1,001.00 242,599.40 0.00 0.00 122,770.75 122,770.75 313,473.46 20,000.00 20,000.00 202,748.98 182,748.98 3,113.32 0.00 0.00 5,281.15 5,281.15 194,072.00 614,800.00 214,800.00 137,308.26 (77,491.74) (3,447.68)0.00 0.00 (1,501.00)(1,501.00) 8,073.48 4,200.00 4,200.00 3,307.63 (892.37) 433,192.00 0.00 400,000.00 304,474.45 (95,525.55) 635,003.12 619,000.00 619,000.00 448,870.49 (170,129.51) 288,018.22 280,000.00 280,000.00 293,991.31 13,991.31 288,018.22 280,000.00 280,000.00 293,991.31 13,991.31 3,969,378.85 919,000.00 1,012,800.00 1,344,261.78 331,461.78 CITY OF LA QUINTA HOUSING AUTHORITY REVENUE DETAILS 2017/18 YEAR-END BUDGET REPORT EXHIBIT A 53 2016/17 Actual Revenues 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Revenues Variance w/ Final Budget 243 - RDA Low-Mod Housing Fund 0000 - Undesignated 0.00 0.00 0.00 17,876.10 17,876.10243-0000-41900 Allocated Interest 0000 - Undesignated Totals:0.00 0.00 0.00 17,876.10 17,876.10 243 - RDA Low-Mod Housing Fund Totals:0.00 0.00 0.00 17,876.10 17,876.10 0.00 0.00 0.00 17,876.10 17,876.10 0.00 0.00 0.00 17,876.10 17,876.10 0.00 0.00 0.00 17,876.10 17,876.10 CITY OF LA QUINTA HOUSING AUTHORITY REVENUE DETAILS 2017/18 YEAR-END BUDGET REPORT 54 2016/17 Actual Revenues 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Revenues Variance w/ Final Budget 248 - SA 2004 LO/MOD BOND FUND (Refinanced in 2014) 0000 - Undesignated (11,975.78)0.00 0.00 (8,366.65)(8,366.65)248-0000-41900 Allocated Interest 0000 - Undesignated Totals:(11,975.78)0.00 0.00 (8,366.65)(8,366.65) SA 2004 LO/MOD BOND FUND (Refinanced in 2014) Totals:(11,975.78)0.00 0.00 (8,366.65)(8,366.65) (11,975.78)0.00 0.00 (8,366.65)(8,366.65) (11,975.78)0.00 0.00 (8,366.65)(8,366.65) (11,975.78)0.00 0.00 (8,366.65)(8,366.65) CITY OF LA QUINTA HOUSING AUTHORITY REVENUE DETAILS 2017/18 YEAR-END BUDGET REPORT 55 2016/17 Actual Revenues 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Revenues Variance w/ Final Budget 249 - SA 2011 LOW/MOD BOND FUND (Refinanced in 2016) 0000 - Undesignated 0.00 0.00 0.00 52,385.17 52,385.17249-0000-41900 Allocated Interest 13,977.17 0.00 0.00 181,649.32 181,649.32249-0000-41915 Non-Allocated Interest 0000 - Undesignated Totals:13,977.17 0.00 0.00 234,034.49 234,034.49 A 2011 LOW/MOD BOND FUND (Refinanced in 2016) Totals:13,977.17 0.00 0.00 234,034.49 234,034.49 0.00 0.00 0.00 52,385.17 52,385.17 13,977.17 0.00 0.00 181,649.32 181,649.32 13,977.17 0.00 0.00 234,034.49 234,034.49 13,977.17 0.00 0.00 234,034.49 234,034.49 CITY OF LA QUINTA HOUSING AUTHORITY REVENUE DETAILS 2017/18 YEAR-END BUDGET REPORT 56 2016/17 Actual Expenses 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Expenses Variance w/ Final Budget 241 - HOUSING AUTHORITY 9101 - Housing Authority - Admin Salaries and Benefits 29,810.04 63,400.00 54,170.00 18,754.67 35,415.33241-9101-50101 Permanent Full Time 750.00 3,000.00 3,000.00 1,550.00 1,450.00241-9101-50110 Commissions & Boards 216.00 600.00 600.00 3.87 596.13241-9101-50150 Other Compensation 6,543.79 11,900.00 11,950.00 6,032.01 5,917.99241-9101-50200 PERS-City Portion 0.00 100.00 100.00 0.00 100.00241-9101-50210 PERS-Survivor Benefits 0.00 0.00 0.00 4.66 (4.66)241-9101-50215 Other Fringe Benefits 4,137.25 18,200.00 18,200.00 1,867.50 16,332.50241-9101-50221 Medical Insurance 56.06 0.00 0.00 32.02 (32.02)241-9101-50222 Vision Insurance 256.60 0.00 0.00 64.58 (64.58)241-9101-50223 Dental Insurance 29.95 0.00 0.00 17.75 (17.75)241-9101-50224 Life Insurance 291.75 700.00 700.00 149.63 550.37241-9101-50225 Long Term Disability 1,200.00 3,000.00 3,000.00 3,000.00 0.00241-9101-50230 Workers Comp Insurance 450.01 1,100.00 1,100.00 265.94 834.06241-9101-50240 Social Security-Medicare 68.20 0.00 0.00 102.30 (102.30)241-9101-50241 Social Security-FICA 50 - Salaries and Benefits Totals:43,809.65 102,000.00 92,820.00 31,844.93 60,975.07 Contract Services 61,901.25 0.00 70,000.00 63,768.49 6,231.51241-9101-60103 Professional Services 5,160.00 0.00 5,000.00 6,050.00 (1,050.00)241-9101-60106 Auditors 0.00 0.00 10,000.00 7,166.43 2,833.57241-9101-60125 Temporary Agency Services 32,983.78 25,000.00 25,000.00 32,617.79 (7,617.79)241-9101-60153 Attorney 950.00 0.00 0.00 0.00 0.00241-9101-60157 Rental Expenes 60 - Contract Services Totals:100,995.03 25,000.00 110,000.00 109,602.71 397.29 Maintenance & Operations 0.00 1,000.00 1,000.00 1,017.76 (17.76)241-9101-60320 Travel & Training 1,813.83 2,000.00 2,000.00 2,217.32 (217.32)241-9101-60420 Operating Supplies 62 - Maintenance & Operations Totals:1,813.83 3,000.00 3,000.00 3,235.08 (235.08) Internal Service Charges 13,000.00 20,000.00 20,000.00 20,000.00 0.00241-9101-91844 Earthquake Insurance 0.00 8,400.00 8,400.00 8,400.00 0.00241-9101-98110 Information Tech Charges 69 - Internal Service Charges Totals:13,000.00 28,400.00 28,400.00 28,400.00 0.00 9101 - Housing Authority - Admin Totals:159,618.51 158,400.00 234,220.00 173,082.72 61,137.28 9102 - Housing Authority - Wash St Apts Contract Services 0.00 70,000.00 10,000.00 0.00 10,000.00241-9102-60103 Professional Services 0.00 2,500.00 0.00 0.00 0.00241-9102-60106 Auditors 7,500.00 0.00 0.00 1,193,428.19 (1,193,428.19)241-9102-60160 Financial Expenses 60 - Contract Services Totals:7,500.00 72,500.00 10,000.00 1,193,428.19 (1,183,428.19) Maintenance & Operations 423,373.77 466,100.00 466,100.00 206,828.04 259,271.96241-9102-60157 Rental Expenses 62 - Maintenance & Operations Totals:423,373.77 466,100.00 466,100.00 206,828.04 259,271.96 Debt Service 107,883.46 109,100.00 109,100.00 79,255.79 29,844.21241-9102-61609 Interest Expense - Provident 17,119.89 17,000.00 17,000.00 10,191.69 6,808.31241-9102-61610 Interest Expense - USDA 45,374.98 45,300.00 45,300.00 36,600.04 8,699.96241-9102-61680 Principal Payment - Provident 21,250.35 21,200.00 21,200.00 15,388.47 5,811.53241-9102-61681 Principal Payment - USDA 67 - Debt Service Totals:191,628.68 192,600.00 192,600.00 141,435.99 51,164.01 Capital Expenses 0.00 50,000.00 50,000.00 0.00 50,000.00241-9102-72100 Building Improvements 68 - Capital Expenses Totals:0.00 50,000.00 50,000.00 0.00 50,000.00 9102 - Housing Authority - Wash St Apts Totals:622,502.45 781,200.00 718,700.00 1,541,692.22 (822,992.22) 9103 - Housing Authority - LQRP Contract Services 0.00 2,500.00 0.00 0.00 0.00241-9103-60106 Auditors 29,810.04 63,400.00 54,170.00 18,754.67 35,415.33 750.00 3,000.00 3,000.00 1,550.00 1,450.00 216.00 600.00 600.00 3.87 596.13 6,543.79 11,900.00 11,950.00 6,032.01 5,917.99 0.00 100.00 100.00 0.00 100.00 0.00 0.00 0.00 4.66 (4.66) 4,137.25 18,200.00 18,200.00 1,867.50 16,332.50 56.06 0.00 0.00 32.02 (32.02) 256.60 0.00 0.00 64.58 (64.58) 29.95 0.00 0.00 17.75 (17.75) 291.75 700.00 700.00 149.63 550.37 1,200.00 3,000.00 3,000.00 3,000.00 0.00 450.01 1,100.00 1,100.00 265.94 834.06 68.20 0.00 0.00 102.30 (102.30) 43,809.65 102,000.00 92,820.00 31,844.93 60,975.07 61,901.25 0.00 70,000.00 63,768.49 6,231.51 5,160.00 0.00 5,000.00 6,050.00 (1,050.00) 0.00 0.00 10,000.00 7,166.43 2,833.57 32,983.78 25,000.00 25,000.00 32,617.79 (7,617.79) 950.00 0.00 0.00 0.00 0.00 100,995.03 25,000.00 110,000.00 109,602.71 397.29 0.00 1,000.00 1,000.00 1,017.76 (17.76) 1,813.83 2,000.00 2,000.00 2,217.32 (217.32) 1,813.83 3,000.00 3,000.00 3,235.08 (235.08) 13,000.00 20,000.00 20,000.00 20,000.00 0.00 0.00 8,400.00 8,400.00 8,400.00 0.00 13,000.00 28,400.00 28,400.00 28,400.00 0.00 159,618.51 158,400.00 234,220.00 173,082.72 61,137.28 0.00 70,000.00 10,000.00 0.00 10,000.00 0.00 2,500.00 0.00 0.00 0.00 7,500.00 0.00 0.00 1,193,428.19 (1,193,428.19) 7,500.00 72,500.00 10,000.00 1,193,428.19 (1,183,428.19) 423,373.77 466,100.00 466,100.00 206,828.04 259,271.96 423,373.77 466,100.00 466,100.00 206,828.04 259,271.96 107,883.46 109,100.00 109,100.00 79,255.79 29,844.21 17,119.89 17,000.00 17,000.00 10,191.69 6,808.31 45,374.98 45,300.00 45,300.00 36,600.04 8,699.96 21,250.35 21,200.00 21,200.00 15,388.47 5,811.53 191,628.68 192,600.00 192,600.00 141,435.99 51,164.01 0.00 50,000.00 50,000.00 0.00 50,000.00 0.00 50,000.00 50,000.00 0.00 50,000.00 622,502.45 781,200.00 718,700.00 1,541,692.22 (822,992.22) 0.00 2,500.00 0.00 0.00 0.00 CITY OF LA QUINTA HOUSING AUTHORITY EXPENSE DETAILS 2017/18 YEAR-END BUDGET REPORT EXHIBIT B 57 2016/17 Actual Expenses 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Expenses Variance w/ Final Budget 60 - Contract Services Totals:0.00 2,500.00 0.00 0.00 0.00 Maintenance & Operations 256,545.13 250,000.00 250,000.00 153,308.65 96,691.35241-9103-60157 Rental Expenses 62 - Maintenance & Operations Totals:256,545.13 250,000.00 250,000.00 153,308.65 96,691.35 9103 - Housing Authority - LQRP Totals:256,545.13 252,500.00 250,000.00 153,308.65 96,691.35 241 - HOUSING AUTHORITY Totals:1,038,666.09 1,192,100.00 1,202,920.00 1,868,083.59 (665,163.59) 0.00 2,500.00 0.00 0.00 0.00 256,545.13 250,000.00 250,000.00 153,308.65 96,691.35 256,545.13 250,000.00 250,000.00 153,308.65 96,691.35 256,545.13 252,500.00 250,000.00 153,308.65 96,691.35 1,038,666.09 1,192,100.00 1,202,920.00 1,868,083.59 (665,163.59) CITY OF LA QUINTA HOUSING AUTHORITY EXPENSE DETAILS 2017/18 YEAR-END BUDGET REPORT 58 2016/17 Actual Expenses 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Expenses Variance w/ Final Budget 243 - RDA Low-Mod Housing Fund 0000 - Undesignated Other Expenses 0.00 0.00 259,000.00 259,000.00 0.00243-0000-60532 Homelessness Assistance 64 - Other Expenses Totals:0.00 0.00 259,000.00 259,000.00 0.00 0000 - Undesignated Totals:0.00 0.00 259,000.00 259,000.00 0.00 243 - RDA Low-Mod Housing Fund Totals:0.00 0.00 259,000.00 259,000.00 0.00 0.00 0.00 259,000.00 259,000.00 0.00 0.00 0.00 259,000.00 259,000.00 0.00 0.00 0.00 259,000.00 259,000.00 0.00 0.00 0.00 259,000.00 259,000.00 0.00 CITY OF LA QUINTA HOUSING AUTHORITY EXPENSE DETAILS 2017/18 YEAR-END BUDGET REPORT 59 2016/17 Actual Expenses 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Expenses Variance w/ Final Budget 248 - SA 2004 LO/MOD BOND FUND (Refinanced in 2014) 9102 - Housing Authority - Wash St Apts Contract Services 0.00 145,000.00 145,000.00 0.00 145,000.00248-9102-60103 Professional Services 0.00 229,700.00 229,700.00 228,869.60 830.40248-9102-60159 Relocation Benefits 363,507.86 330,200.00 330,200.00 106,289.86 223,910.14248-9102-60185 Design/Construction 0.00 1,000,000.00 1,000,000.00 12,822.85 987,177.15248-9102-60198 Planning & Development 60 - Contract Services Totals:363,507.86 1,704,900.00 1,704,900.00 347,982.31 1,356,917.69 9102 - Housing Authority - Wash St Apts Totals:363,507.86 1,704,900.00 1,704,900.00 347,982.31 1,356,917.69 SA 2004 LO/MOD BOND FUND (Refinanced in 2014) Totals:363,507.86 1,704,900.00 1,704,900.00 347,982.31 1,356,917.69 0.00 145,000.00 145,000.00 0.00 145,000.00 0.00 229,700.00 229,700.00 228,869.60 830.40 363,507.86 330,200.00 330,200.00 106,289.86 223,910.14 0.00 1,000,000.00 1,000,000.00 12,822.85 987,177.15 363,507.86 1,704,900.00 1,704,900.00 347,982.31 1,356,917.69 363,507.86 1,704,900.00 1,704,900.00 347,982.31 1,356,917.69 363,507.86 1,704,900.00 1,704,900.00 347,982.31 1,356,917.69 CITY OF LA QUINTA HOUSING AUTHORITY EXPENSE DETAILS 2017/18 YEAR-END BUDGET REPORT 60 2016/17 Actual Expenses 2017/18 Original Budget 2017/18 Final Budget 2017/18 Actual Expenses Variance w/ Final Budget 249 - SA 2011 LOW/MOD BOND FUND (Refinanced in 2016) 0000 - Undesignated Contract Services 250.00 0.00 0.00 0.00 0.00249-0000-60103 Professional Services 60 - Contract Services Totals:250.00 0.00 0.00 0.00 0.00 0000 - Undesignated Totals:250.00 0.00 0.00 0.00 0.00 9102 - Housing Authority - Wash St Apts Contract Services 0.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73249-9102-60188 Construction 60 - Contract Services Totals:0.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 9102 - Housing Authority - Wash St Apts Totals:0.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 A 2011 LOW/MOD BOND FUND (Refinanced in 2016) Totals:250.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 250.00 0.00 0.00 0.00 0.00 250.00 0.00 0.00 0.00 0.00 250.00 0.00 0.00 0.00 0.00 0.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 0.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 0.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 250.00 9,400,000.00 9,400,000.00 2,023,975.27 7,376,024.73 CITY OF LA QUINTA HOUSING AUTHORITY EXPENSE DETAILS 2017/18 YEAR-END BUDGET REPORT 61 62 Vendor/Program Account Number Description Original Amended 2004 Bond Fund Washington Street Apts Rehabilition Project 248-9102-60103 Professional Services 145,000 145,000 Washington Street Apts Rehabilition Project 248-9102-60159 Relocation Benefits 190,000 1,200,000 Washington Street Apts Rehabilition Project 248-9102-60185 Design/Construction 240,200 106,947 Washington Street Apts Rehabilition Project 248-9102-60198 Planning & Development 807,000 - 2011 Bond Fund Washington Street Apts Rehabilition Project 249-9102-60188 Construction 8,895,000 7,376,000 Housing Authority Total 10,277,200$ 8,827,947$ Continuing Appropriations/Carryovers from 2017/18 to 2018/19 HOUSING AUTHORITY FUNDS CITY OF LA QUINTA HOUSING AUTHORITY AMENDED CARRYOVERS 2017/18 YEAR-END BUDGET REPORT EXHIBIT C 63 64 City of La Quinta HOUSING AUTHORITY MEETING: November 20, 2018 STAFF REPORT AGENDA TITLE: RECEIVE AND FILE FISCAL YEAR 2018/19 FIRST QUARTER HOUSING AUTHORITY BUDGET REPORT AND APPROVE THE RECOMMENDED BUDGET ADJUSTMENTS RECOMMENDATION Receive and file fiscal year 2018/19 First Quarter Housing Authority Budget Report and approve the recommended budget adjustments. EXECUTIVE SUMMARY •The 2018/19 First Quarter Housing Authority Budget Report (Attachment 1)provides an update of the Authority’s fiscal activities from July to September 2018. •A budget report is prepared quarterly to assess the adopted budget and incorporate adjustments based on current economic conditions and operational requirements. FISCAL IMPACT Staff recommends adjustments to four funds as outlined below: BACKGROUND/ANALYSIS Throughout the fiscal year staff monitors its budget and proposes adjustments to reflect current conditions and ongoing operational needs. Requests are reviewed and discussed before recommending approval in the budget report (Attachment 1). Funds with no adjustments from the originally presented 2018/19 Budget have been excluded from the report. BUSINESS SESSION ITEM NO. 2 Fund Revenues Expenses Housing Authority Fund (241)228,000 - Low-Mod Housing Fund (243)10,000 2004 Bond Fund (248)10,000 2011 Bond Fund (249)140,000 40,000 TOTAL HOUSING ADJUSTMENTS 388,000 40,000 2018/19 First Quarter Adjustment Requests 65 ALTERNATIVES The Council may delay, modify, or reject the requested budget amendments. Prepared by: Karla Campos, Finance Director Approved by: Frank J. Spevacek, City Manager Attachment 1: 2018/19 First Quarter Housing Authority Budget Report 66 OVERVIEW & MAJOR PROJECT UPDATE The Washington Street Apartments (WSA) rehabilitation and expansion project is vigorously being completed. Staff continues to provide support for temporary relocation services and will soon begin moving residents back into their fully renovated units. The following is a summary of budgetary adjustments requested for the first quarter of 2018/19. Account details are provided in Exhibit A and discussed in this report. REVENUES Second trust deed repayments continue to occur as homes are sold on the open market, thus far a total of three homes have transferred ownership in 18/19 for a total reimbursement to the Housing Authority of $188,000. Interest earnings in all four Housing Funds require an increase as indicated in Exhibit A. These increases reflect updated interest earnings projections based on the current rising interest rate market and strong economic conditions. EXPENSES Staff requests an additional $40,000 from 2011 Bond proceeds to evaluate future affordable housing project developments. These funds will be expended on appraisals, property site evaluations, and market research. Any potential acquisition of property will be presented and require Housing Authority approval prior to purchase. Currently the budget in this fund is limited to the WSA project. If the budget adjustments (revenue and expenditure) are approved, the 2011 Bond Fund is projected to have an estimated ending balance of $16,464,650 as of June 30, 2019. Fund Revenues Expenses Housing Authority Fund (241)228,000 - Low-Mod Housing Fund (243)10,000 2004 Bond Fund (248)10,000 2011 Bond Fund (249)140,000 40,000 TOTAL HOUSING ADJUSTMENTS 388,000 40,000 2018/19 First Quarter Adjustment Requests FIRST QUARTER 2018/19 HOUSING AUTHORITY BUDGET REPORT 67 68 City of La Quinta Housing Authority FY 2018/19 Recommended First Quarter Budget Adjustments Exhibit A Account No. Description Revenues Expenses 241-9101-41900 Allocated Interest 40,000 241-9101-43504 Second Trust Deeds 188,000 Account No. Description Revenues Expenses 243-0000-41900 Allocated Interest 10,000 Account No. Description Revenues Expenses 248-0000-41900 Allocated Interest 10,000 249-0000-41900 Allocated Interest 50,000 249-0000-41915 Non-Allocated Interest 90,000 249-0000-80050 New Affordable Housing Project Developments 40,000 TOTAL ALL HOUSING FUNDS 388,000 40,000 LOW-MOD HOUSING FUND (243) 2004 BOND FUND (248) HOUSING AUTHORITY FUND (241) 2011 BOND FUND (249) 69 70 City of La Quinta HOUSING AUTHORITY MEETING: November 20, 2018 STAFF REPORT AGENDA TITLE: DISCUSS FUNDING FOR HOMELESS PREVENTION PROGRAMS RECOMMENDATION Discuss allocation of funding for homeless prevention programs. EXECUTIVE SUMMARY  In 2017/18, the La Quinta Housing Authority (Authority) authorized $259,000 to assist area homeless service providers: Coachella Valley Rescue Mission (CVRM), Martha’s Village and Kitchen (MVK), and Coachella Valley Association of Governments (CVAG) for Path of Light.  Quarterly, Staff provided service metrics to the Authority (submitted by each service provider) and on items that can be measured equally.  Staff seeks direction as to what organization and amount of financial contributions, if any, the Authority would consider extending towards homeless prevention and programs; up to $250,000 is available. FISCAL IMPACT Should the Authority elect to extend financial contributions, there is $250,000 available in the Homeless Assistance account (243-0000-60532). BACKGROUND/ANALYSIS Last fiscal year, staff presented the Authority with three homeless service providers that were seeking funding: CVRM, MVK and CVAG. The Authority authorized staff to provide $259,000 in assistance with $53,000 to CVRM (CVRM had earlier received $50,000 from the City of La Quinta), $103,000 to MVK, and $103,000 to CVAG to be used in the east valley; the Desert Healthcare District (DHD) matched this investment by providing $103,000 for prevention measures in the west valley. Please note, CVAG’s and DHD’s service provider is Path of Life Ministries (POLM). The Authority required the service providers to submit quarterly reporting metrics for review. The following chart shows first quarter reporting metrics in black and second quarter in blue: STUDY SESSION ITEM NO. 1 71 Service Providers Martha’s Village & Kitchen $103,000 CVRM $53,000 CVAG/POL (East of Cook Street) $103,000 POL/DHD (West of Cook Street) Matched $103,000 Face to Face and or phone Contact 2,085 2,039 2,250 2,250 22 54 Housing Hotline: 236 (168) identified; 60 (49) diverted from emergency shelter; 206 (156) connected with assistance Rental/Utility Assistance $741 Non LQ Residents – 1 household $6,814 Rental Assistance – 27 clients $1,340.03 Utility assistance – 12 clients $363 Non LQ Residents- 3 households $0 $10,950 Non LQ Residents – 14 households east of cook street $28,836.94 Rental Assistance – 17 of 64 are LQ Residents $1,274.00 Utility assistance 23 (25) people assisted Sheltering 175 (105 from east valley and 70 from west valley) 198 (91 from east valley and 107 west valley) 784 – valley wide 844 – valley wide 27 – individuals east of Cook Street 20 – east of Cook Street Crisis Stabilization Housing: CVAG Placements: 35 (36) Other POL Shelter Placements:35 (11) Case Management 332 1,187 784 760 No number provided 20 Behavioral Support (CVAG and other program):112 (121) Provide Rapid Rehousing or similar type placement 9 (14) exited program to affordable permanent housing 61 (69) individuals secured affordable housing through their employment, as well as rental deposit only programs offered by 11 rapid rehousing 4 permanent supportive housing 7 section 8 165 placed in rapid rehousing, permanent supportive housing, or section 8 From Shelter: 4 (7) From Street: 4 (2) 2 (1) rapid rehousing; 2 (1) permanent supportive housing) Concurrently serving 36 (44) other individuals from east of Cook Street Rapid Rehousing: CVAG Program: 1 (5) Other Program: 5 (5) 72 After reviewing the reports submitted by the service providers, some providers such as MVK and CVRM cater to homeless individuals and provide shelter and wrap around services while CVAG/DHD/POL primarily caters to those that are already in housing and assist with maintaining their current living situation. To date, DHD has not indicated that they will continue the match-program with CVAG and POL. Staff only reported on services that can be measured equally by all service providers; however, it is important to note that some providers offer free childcare, meals, educational and occupational assistance, and food pantries to assists families and individuals in need. Staff is seeking Authority’s input on the allocation of funds, if any, for homeless prevention services and programs. Prepared by: Angela Ferreira, Management Specialist Approved by: Frank J. Spevacek, Executive Director collaborating partners. with permanent housing Employment Services 58 (89) clients, 1,207 (1,302) units of service 784 (844) clients, 3,136 (3,376) units of service 36 (39) clients, 113 (83) units of service (CVAG and other programs) 57 (42) 73 74 HAND OUTS - NONE HOUSING AUTHORITY MEETING NOVEMBER 20, 2018 POWER POINTS HOUSING AUTHORITY MEETING NOVEMBER 20, 2018 11/20/2018 40 Housing Authority November 20, 2018 SS1 - Homeless Funding Background •FY17/18 Authority approved $259,000 local homeless service providers: –$103,000 - Martha’s Village & Kitchen (MVK) –$53,000 - Coachella Valley Rescue Mission (CVRM); $50,000 previously received –$103,000 - CVAG/Path of Life Ministries (POL) matched by Desert Healthcare District (DHD) 11/20/2018 41 Metrics •Providers submit quarterly reports to track progress •Staff reports on services that are measured equally by all providers Metrics Continued •Reportable items calculated to reflect both reporting periods: –Face to Face or Phone Contact: •MVK: 4,124 •CVRM: 5,000 •CVAG/POL: 76 •POL/DHD: 404 11/20/2018 42 Metrics Continued –Rental/Utility Assistance: •MVK: $8,895 •CVRM: $363 •CVAG/POL: $41,060 •POL/DHD: No dollar amount provided – 48 people assisted Metrics Continued –Sheltering (clients served): •MVK: 373 (196 east of Cook Street) •CVRM: 1,628 valley wide •CVAG/POL: 47 east of Cook Street •POL/DHD: 117 11/20/2018 43 Conclusion •Seek direction on funding for 18/19 11/20/2018 44 Housing Authority Meeting November 20, 2018 B1 –Fiscal Year-End 2017/18 Housing Authority Budget Report Budget Summary Housing Authority Revenues Final Budget Actual Variance Housing Authority Fund 1,012,800 1,344,262 331,462 RDA Low-Mod Housing Fund - 17,876 17,876 2004 Bond Fund - (8,367) (8,367) 2011 Bond Fund - 234,034 234,034 Total Revenues 1,012,800 1,587,806 575,006 Housing Authority Expenditures Final Budget Actual Variance Housing Authority Fund Administration 234,220 173,083 (61,137) Washington Street Apartments 718,700 1,541,692 822,992 La Quinta Cove Properties 250,000 153,309 (96,691) RDA Low-Mod Housing Fund 259,000 259,000 - 2004 Bond Fund 1,704,900 347,982 (1,356,918) 2011 Bond Fund 9,400,000 2,023,975 (7,376,025) Total Expenditures 12,566,820 4,499,041 (8,067,779) Capital Projects Carryovers 8,827,947 Operational Carryovers - Total Expenditures After Carryovers 12,566,820 13,326,988 760,168 11/20/2018 45 Amended Carryovers Description Original Amended Professional Services 145,000 145,000 Relocation Benefits 190,000 1,200,000 Design/Construction 240,200 106,947 Planning & Development 807,000 - Construction 8,895,000 7,376,000 Housing Authority Total 10,277,200$ 8,827,947$ 2011 Bond Fund 2004 Bond Fund •From Restricted Bond Funds •Washington Street Apartment Project Discussion & Questions 11/20/2018 46 Housing Authority Meeting November 20, 2018 B2 –Fiscal Year 2018/19 First Quarter Housing Authority Budget Report 11/20/2018 47 Overview & Adjustments •Washington Street Apartments •Revenue Adjustments –Interest Earnings –Second Trust Deed Repayments •Expenditure Adjustment –From Bond Proceeds –For Evaluation of Future Housing Projects Fund Revenues Expenses Housing Authority Fund (241) 228,000 - Low-Mod Housing Fund (243) 10,000 2004 Bond Fund (248) 10,000 2011 Bond Fund (249) 140,000 40,000 TOTAL HOUSING ADJUSTMENTS 388,000 40,000 2018/19 First Quarter Adjustment Requests Discussion & Questions 11/20/2018 48