HomeMy WebLinkAbout20C - AA - RECEIVERSHIP PROGRAMCITY COUNCIL MEETING DATE:
AUGUST 2, 2016
TITLE:
AUTHORIZE CONTINUATION OF
RECEIVERSHIP PROGRAM AND
APPROPRIATION ADJUSTMENT
ALLOCATING GENERAL FUND YEAR -END
FUND BALANCE TO THE RECEIVERSHIP
PROGRAM
{STRATEGIC PLAN NO. 3, 3; 5, 4E}
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RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
FIT00-:T071ark
As Recommended
As Amended
❑ Ordinance on 16� Reading
❑ Ordinance on 2nd Reading
Implementing Resolution
Set Public Hearing For
CONTINUED TO
FILE NUMBER
1. Authorize the City Attorney to continue to file receivership actions to successfully resolve
difficult code enforcement matters in both commercial and residential areas and retain special
counsel with Silver and Wright, LLP to assist initiation of receivership actions until such time a
new Request for Proposal is completed.
2. Approve an Appropriation Adjustment recognizing $100,000 from the Fiscal Year 2015 -16
General Fund Balance and appropriating the same amount to the Fiscal Year 2016 -17
Planning and Building Agency (General Fund) budget for receivership activities.
DISCUSSION
The City has utilized the California Health and Safety Code Receivership action to successfully
resolve difficult code enforcement matters in both commercial and residential areas.
Receivership is a legal process through which control of a real property is temporarily taken from
the owners and placed with a court- appointed officer; the Receiver. These receiverships are
used for abandoned and substandard properties where the owner has a history of noncompliance
with the city's code enforcement efforts or, in emergency situations, where the real property
presents an immediate threat to health and safety.
The receivership option is a comprehensive process which eliminates substandard conditions or
uninhabitable slum -like properties and allows the referring agency, when it is the prevailing party,
to recuperate its enforcement costs. This process also communicates to the public that the City
is actively protecting residents and tenants from dangerous conditions created by absentee or
non - responsive property owners.
20C -1
Appropriation Adjustment allocating General
Fund monies to the Receivership Program
August 2, 2016
Page 2
On March 21, 2013 the City entered into a Legal Services Agreement with Silver & Wright, LLP
for code enforcement and receivership activities in the amount of $25,000. On November 18,
2013 a subsequent Legal Services Agreement was entered with Silver & Wright, LLP for an
additional $40,000 for receivership services. Actions in these cases were paid for through a
combination of both receivership recoveries and Community Development Block Grant (CDBG)
funding. On June 17, 2014 the Council approved a subsequent three year agreement with Silver
& Wright, LLP for receivership services with no dollar cap based on cost recovery through
receiverships with the understanding that the services would be funded with CDBG funds.
Additionally, on March 3, 2015 the City Attorney and the Planning and Building Agency received
Council approval to file receivership actions against ten additional properties, eight of which were
CDBG eligible. As described above, funding for the receivership actions were to be paid through
CDBG accounts and receivership recovery funds upon receipt.
However, for the eight identified CDBG properties only $50,000 remained of CDBG funds which
was set aside to pay for Silver & Wright invoices. In addition, it was determined that receivership
cost recovery is not immediate and reimbursement can range from a few months up to a year. As
such, the City was not in receipt of recovery funds in order to offset incurred legal expenses
resulting in insufficient funding to allow for timely processing of invoices.
In order to ensure prompt payment of future invoices, along with continued funding for the
receivership program, it is recommended that an appropriation adjustment recognizing $100,000
from Fiscal Year 2015 -16 fund balances be used. However, it should be noted that while the City
has experienced receivership cost reimbursement of over 80 %; reimbursement is not a
guarantee.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal #3 - Economic Development,
Objectives #3 (Promote a solution -based customer focus in all efforts to facilitate development
and investment in the community); Goal #5 — Community Health, Livability, Engagement &
Sustainability, Objective #4 (Support neighborhood vitality and livability), Strategy E (Implement
innovative code enforcement practices and strategies including the use of volunteers, enhanced
technologies and increased collaboration with other City departments and outside agencies to
address critical livability issues citywide [e.g. overcrowding, absentee landlords, landlord /tenant
rights and responsibilities, etc.]).
20Ci -2
Appropriation Adjustment allocating General
Fund monies to the Receivership Program
August 2, 2016
Page 3
FISCAL IMPACT
Approval of the appropriation adjustment will designate $100,000 from Fiscal Year 2015 -16
General Fund Balance. The prior year (fiscal year 2015 -16) fund balance in the amount of
$100,000 will be allocated to Planning and Community Preservation — Other Contractual Services
(01116540- 62300).
Hassan Hagha i, AIC
Executive Director
Planning & Building Agency
frSonls R. Carvalho
Clty Attorney
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APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
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Finance and Management Services Agency
20C -3
SANTA ANA
COST RECOVERY OBTAINED FOR CITY BY SILVER & WRIGHT LLP
Saddleback Inn
............
$102,184.32
US Bank - 805 Chestnut
$34,637.95
1705 W. Woodland
$5,702.22
2021 -2025 N. Fairview
$15,146.03
1010 W. McFadden
$37,367.05
1534 -1538 W. First
$8,793.33
1046 W Bishop
$24,017.88
1701 S. Flower
$34,531.21
315 E. Camile
$18,069.10
2016 -2020 W. 5th Street
$27,789.14
TOTAL
$308,238.23
20C -4