Redevelopment: City of Santa Cruz: bond proceeds: affordable housing.

Existing law dissolved redevelopment agencies and community development agencies as of February 1, 2012, and provides for the designation of successor agencies that are required to wind down the affairs of the dissolved redevelopment agencies. Existing law requires the Department of Finance to issue a finding of completion to a successor agency upon confirmation by the county auditor-controller that specified payments have been fully made by the successor agency. Existing law requires any successor agency that has been issued a finding of completion to use bond proceeds derived from bonds issued on or after January 1, 2011, in excess of the amounts needed to satisfy approved enforceable obligations, in a manner consistent with the original bond covenants, subject to certain requirements, including a requirement that no more than 5% of the proceeds derived from the bonds be expended, unless the successor agency has an approved Last and Final Recognized Obligation Payment Schedule, in which case the agency is authorized to expend no more than 20% of the proceeds derived from the bonds, subject to specified adjustments. Existing law requires remaining bond proceeds that cannot be spent pursuant to those requirements to be used at the earliest possible date to defease the bonds or to purchase those same outstanding bonds on the open market for cancellation. This bill, notwithstanding the requirement that the remaining bond proceeds be used to defease the bonds or to purchase those same outstanding bonds on the open market for cancellation, would authorize the City of Santa Cruz to use the remaining bond proceeds for the purposes of increasing, improving, and preserving affordable housing, as defined, and facilities for homeless persons, so long as those proceeds are used in a manner consistent with any original bond covenant. The bill would authorize the use of up to 10% of these bond proceeds for affordable housing for persons and families of moderate income, as defined, and require that the remainder be expended in accordance with specified provisions regarding the use of housing funds of a former redevelopment agency. The bill, if the City of Santa Cruz uses the remaining bond proceeds for these purposes, would require the Last and Final Recognized Obligation Payment Schedule to be adjusted to allow for the allocation of revenues from the Redevelopment Property Tax Trust Fund to the Santa Cruz Successor Agency for purposes of paying the remaining principal and interest on the bonds. This bill would incorporate additional changes in Section 34191.4 of the Health and Safety Code made by SB 532 that would become operative if both this bill and SB 532 are enacted and this bill is chaptered last. This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Santa Cruz.