AgdaPkt 2020-05-18 Joint SA PFA - Laserfiche WebLink

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6.J. - Page 2 of 5 practice, staff is recommending the creation of three different funds, via ordinance, to properly account for specific funds related to the City's CDBG, HOME, short-term rental TOT and prepaid wireless utility tax. In 2018, the City Council adopted Resolution No. 15637 committing the Transient Occupancy Tax (TOT) it collects from short-term rental uses (e.g. Airbnb) to the Affordable Housing Fund, which is intended to provide affordable housing to extremely -low to moderate income households. However, the Affordable Housing Fund also includes revenue from the City's Affordable Housing Impact Fee. Pursuant to the Mitigation Fee Act, impact fees should be kept in a separate fund to avoid commingling with other revenues. Additionally, under AB 1717 Prepaid Wireless Utility Tax, the City collects taxes from prepaid wireless customers and in 2015, the City Council adopted Resolution No. 15427 earmarking these funds for affordable housing purposes. Currently, the prepaid wireless tax funds are in the Housing In -Lieu Fees and Other Revenues fund. The Housing In -Lieu Fees fund also includes in -lieu fees the City collects pursuant to the Affordable Housing Ordinance. ANALYSIS CDBG Fund The proposed Ordinance establishes a new CDBG Fund for the recording and accounting of the City's annual entitlement allocation of CDBG funds as well as any program income generated from CDBG-funded activities and programs. HOME Fund The proposed Ordinance establishes a new HOME Fund for the recording and accounting of the City's annual entitlement allocation of HOME funds as well as any program income generated from HOME - funded activities and programs. Housing Support Fund The proposed Ordinance establishes a new Housing Support Fund for the recording and accounting of the City's short-term rental TOT and prepaid wireless utility tax. Staff recommends combining these two revenue sources into a single fund as both sources represent ongoing revenue sources whereas the housing impact and In -lieu fees are one-time sources of funding. The City's short-term rental TOT and Housing Impact Fees currently are comingled which makes it challenging to account for and allocate the Housing Impact Fees. FISCAL IMPACT None, this action is only for accounting purposes. Page 2 of 3 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 149