Impacts of Affordable Housing Policies  Payment In Lieu Of Taxes (PILOT)  Fee Waivers

Council Actions: Affordable Housing Policies & Housing Authority  January 20, 1975: Fees waived for Westview and future Housing Authority projects.  January 9, 1979: Payment In Lieu Of Taxes (PILOT) established.  February 28, 2005: Waived administrative fees up to $25,000.  August 4, 2008: PILOT Agreement amended to allow Housing Authority to use funds for new affordable housing projects.  April 26, 2010: In considering fees, deferred fiscal impacts of policies related to Housing Authority to FAB Committee.  May 4, 2010: FAB Committee directed staff to do further research.  August 2, 2010: Council considers fiscal impacts findings.

PILOT Cooperation Agreement  PILOT = offset to property taxes that Housing Authority is exempt from paying.  PILOT based on 10% of Authority’s public housing units; PHAs allowed to use federal funds for PILOT payments.  – Housing Authority pays PILOT; distributed amongst taxing entities (incl. County, School District, City).  – Housing Authority requests waiver of PILOT; stops making payments, establishes Housing Trust Fund.  August 2008 – Council amends Agreement, allowing Authority to stop PILOT payments & use for HTF.

Fiscal Impacts of PILOT  PILOTs calculated for *:  2005: $244,373  City’s share = $40,736  2006: $245,982  City’s share = $41,005  2007: $233,794  City’s share = $38,973  2008: $256,045  City’s share = $42,683  City’s 4-Year total = $163,397  PILOT ($980,194) monies not paid to taxing entity were directed to Housing Trust Fund for development of new affordable housing units. *Calculations are approximate; City share calculations based on a 16.67% share.

Property Tax Exemption = No Property Taxes paid to County, no property tax funds dispersed to taxing entities.  As Public Housing Authority, all units owned & operated by HACSB exempt from property tax.  State Law allows non-profit affordable housing owners/ operators a “welfare exemption,” exempting from property tax. Fiscal Impacts of Property Tax Exemption

Cost of Providing Services to Residential Properties:  Regardless of property taxes collection, there is a cost to taxing entities to serve residential properties.  Estimated cost for general City services = $2.09/person/day.*  Estimated annual cost for City services for 4-person household = $3,000.  PILOT designed to offset costs of providing services to tax-exempt residential properties. * Does not include costs to other agencies such as school district, county, etc. Fiscal Impacts of Residential Properties

Housing Authority – Fee Waivers  1975: Council granted Housing Authority request to waive permit fees for Westview and future contracts.  2004: Housing Authority requests waiver of fees for Chapel Lane Apartment project; City Attorney concluded 1975 Resolution was outdated (30 years of court decisions and changes in laws).  : Housing Authority requests City reimburse $252,191 already paid in fees for Chapel Lane.  2005: Council approved waiver of certain administrative fees up to $25,000 for Chapel Lane and other Housing Authority residential housing projects.

Housing Authority – Fee Waivers  April 2010: Housing Authority requested waiver of all development fees for Soho Apartment project.  Based on 2005 Chapel Lane action:  Waiver of $25,000 in administrative fees for Soho project granted.  Waiver of up to $25,000 in administrative fees for Encanto del Mar project available.

Fiscal Impacts PILOT Waiver  $40,000+ per year loss of general fund revenue. Fee Waivers  $25,000 Waiver = Loss of $25,000 general fund revenue.  Additional Waiver = Dollar-for-Dollar loss to general fund revenue.

Recommended Action a.Accept and review Administrative Report. b.Provide staff direction, if any, for further consideration