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Continuation of PREP November 15, 2010 Page 2 The exemptions for rental owners currently participating in the Gold Seal program are scheduled to sunset along with the PREP program on December 31, 2011. The present funding for the Gold Seal program is $110,000, which provides for 6,285 units to receive exemptions from the existing $17.50 per unit annual fee. The PREP program has proven beneficial to Santa Ana by maintaining the City's rental housing at an acceptable standard. The program receives positive reviews from residents for the improved appearance of their neighborhoods and from the rental housing industry for abiding by the approved guidelines and not generating complaints to their respective associations. As both apartment associations will attest, there have been very few complaints regarding PREP since inspections began in 1993. Due to the proactive nature of the program, inspectors address conditions of the rental properties before adjacent impacted neighbors are compelled to file a complaint. Properties that rapidly deteriorate generate most of the complaints received by the PREP inspectors. One notable achievement of the PREP program since inception is the substantial financial reinvestment to upgrade Santa Ana's rental housing. In terms of reinvestment, from the inception of the program through 2009 PREP inspections have been responsible for in excess of $4.3 million dollars being reinvested back into the improvement and maintenance of the City's rental housing stock. With proven success in improving the appearance of rental properties and maintaining continued support of the rental housing industry, the Planning and Building Agency is requesting to increase the existing $17.50 per unit annual rental inspection fee to $19.50 effective January 1, 2011 to continue the successful operation of the PREP program. The Rental Housing Task Force has unanimously endorsed to the proposal to increase the existing annual rental inspection fee to $19.50 contingent upon no changes to program guidelines, policies, or funding, and continuation of the Gold Seal Incentive Program (Exhibit 1). Environmental Impact The PREP program is exempt from CEQA pursuant to Section 15061(b)(3) of CEQA Guidelines in that it can be seen with certainty that an increase in fees to support the existing rental inspection program will have no possible significant effect on the environment. Categorical Exemption No. ER 2010 -08 has been adopted for this program. 75A -2