AgdaPkt 2003-05-05 - Laserfiche WebLink

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All f�EPORT _ To the Hoinolrab e a nd: ., Pound aF 9e; May 5, 2003 Subject Department Head Housing Assistance Program Recommendatlon It is recommended that the City Council approve the recommended Department Head Housing Assistance Program. Background During the recruitment for the City Attorney two years ago and during the current recruitment for the Fire Chief, staff has become aware of the difficulty in attracting qualified candidates from outside the immediate area due to the high cost of housing on the San Francisco peninsula. Accordingly, it is recommended that Redwood City implement a housing assistance program to facilitate the recruitment of qualified applicants for vacant department head positions. The Human Resources Department recently surveyed cities in the surrounding area and learned that at least ten cities have some form of employee housing assistance program in place. The characteristics of each of the programs vary among cities, but common components are low interest loans and equity sharing (under an equity sharing arrangement, the city invests funds in the purchase of a home and owns a fractional interest proportionate to the city's investment to the total cost of the home). After reviewing the various types of housing assistance programs in existence and examining the City's needs, staff reviewed the following housing assistance program with the Mayor and Vice Mayor who endorsed the proposed program: Applies only to newly appointed department heads. Council appointees (City Attorney, City Manager, and City Clerk) will negotiate their housing assistance benefits with Council separately. • "Below market rate loan" (loan) provided by the City — The interest rate will be the Internal Revenue Service's "Applicable Federal Rate" or the yield on the City's investment portfolio, whichever is greater. t • The loan or equity share must be repaid in full (principal and all accrued interest) within one year of the employee separating from service. • Payments on loans will be made monthly and will be fully amortized with no provisions for deferred interest. It the interest rate on a loan made by an employer to an employee is less than the "Applicable Federal Rate," the Internal Revenue Service then requires that the difference be computed and reported as taxable income to the employee.