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6.J. - Page 1 of 5 <br />/<�ik <br />Redwood <br />CitylCallifornia <br />Faunded 1867 <br />Ago/ <br />DATE: May 18, 2020 <br />SUBJECT <br />STAFF REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />Waive first reading and introduce an ordinance establishing special revenue funds for the accounting of <br />the Community Development Block Grant (CDBG) funds, HOME Investment Partnerships Program (HOME) <br />funds, and to create a Housing Support Fund derived from Transient Occupancy Tax (TOT) revenue from <br />short term rental uses and AB 1717 Prepaid Wireless Utility Tax revenue <br />RECOMMENDATION <br />Waive first reading and introduce an ordinance adding Sections 2.41.16 through 2.41.18 to Chapter 2, <br />Article IV of the Redwood City Municipal Code to establish special revenue funds in the City's financial <br />system to be known as the CDBG Fund, the HOME Fund and the Housing Support Fund. <br />STRATEGIC PLAN GUIDING PRINCIPLE <br />Excellence in Government Operations <br />BACKGROUND <br />Currently, the City's CDBG and HOME funds are combined in a single special revenue fund. U.S. <br />Department of Housing and Urban Development (HUD) staff has indicated that this was a concern during <br />theirJuly 2019 on-site monitoring visit and recommended that the City establish separate funds to ensure <br />the City has the ability to track revenues and expenditures at the fund level for each funding source. In <br />the City's response to HUD's monitoring report, staff indicated that separate funds would be established <br />by June 30, 2020. <br />The City's past practice has been to establish revenue funds by ordinance adoption. This is also consistent <br />with State law requirements that moneys received from sales and use taxes shall be paid into either the <br />General Fund, or into a special fund established by ordinance (Govt. § 43401). In keeping with past <br />Page 1 of 3 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />148 <br />