TO: Board of Supervisors
FROM: Jennifer Yasumoto, Director of Health and Human Services Agency
REPORT BY: Gaby Angeles, Staff Services Analyst II
SUBJECT: Agreement No. 260078B with California Housing Finance Authority
RECOMMENDATION
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Approve and authorize Agreement No. 260078B with California Housing Finance Authority for the term May 6, 2025 through June 30, 2026 for a contract maximum of $1,264,000 to manage the Capitalized Operating Subsidy Reserve for the Hartle Court Supportive Housing Complex. (Fiscal Impact: $1,264,000 Expense; Health and Human Services Agency Fund; Budgeted; Discretionary)
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BACKGROUND
In 2004, voters approved Proposition 63, which established the Mental Health Services Act (MHSA) and the Mental Health Services Fund. MHSA required counties to invest in community-based services and supports, including housing for individuals with serious mental illness.
In 2008, the State Department of Mental Health, California Housing Finance Authority (CalHFA), and the County Behavioral Health Directors Association launched the MHSA Housing Program. This program allowed counties to commit MHSA housing dollars to CalHFA, which then managed those funds to finance and sustain supportive housing developments statewide.
In 2012, Napa County assigned $1,827,900 in MHSA Housing funds to CalHFA to help finance the development of Progress Foundation’s Hartle Court Supportive Housing Complex. The complex is comprised of 18 one-bedroom units and 6 two-bedroom units for clients experiencing severe mental illness. Of the initial amount, $609,300 was set aside in a Capitalized Operating Subsidy Reserve (COSR). The COSR was created to ensure the long-term viability of the project by covering operating costs not met by tenant rents, including upkeep costs and capital expenditures.
Since that time, CalHFA has managed the COSR and distributed funds to Progress Foundation to maintain operations at Hartle Court. The current COSR balance is $59,681. To ensure continued financial stability over the next ten years, Napa County will, through this agreement, assign an additional $1,264,000 in MHSA Housing funds to the COSR, bringing the total balance to $1,323,681. This transfer of funds was included in the approved Napa County MHSA Three Year Plan for FY 23-24 to FY 25-26 in December of 2023.
Requested Actions:
1. Approve and authorize Agreement No. 260078B with California Housing Finance Authority for the term May 6, 2025 through June 30, 2026 for a contract maximum of $1,264,000.
FISCAL IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
Health and Human Services Agency, Behavioral Health Division |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
This agreement allows Progress Foundation to subsidize operating costs in order to provide supportive living facilities to mentally ill clients and their families. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
Appropriations are included in the FY 2025-2026 budget. |
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Consequences if not approved: |
If not approved, residents of Hartle Court may lose housing stability if Progress Foundation is unable to cover operating costs. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.