(Yolo County) Woodland responds to Grand Jury report on loan program

July 12, 2014

Daily Democrat

By Democrat staff

The city of Woodland has either implemented protocols or working to conform with recommendations by the Yolo County Grand Jury when it comes to managing its real estate loans.

Woodland City Manager Paul Navazio submitted a list of responses to the late May report for consideration by the City Council this Tuesday. The council meets at 6 p.m. in City Hall, 300 First St. The council can accept Navazio's recommendations without comment or choose to add additional information.

The Grand Jury called for a series of actions to more effectively manage its affordable housing loan program, including developing and implementing policies, preparing annual reports and generally "make it a priority to maintain trained administrative services necessary to effectively manage its affordable housing loan portfolio." The report was issued May 28.

Jane Naekel, forewoman for the 2013-14 Grand Jury, reported the body undertook the investigation after receiving a complaint the city was not properly executing its duties on a loan it made in 1995 to Leisureville Community Association. The city manages and administers a portfolio of affordable housing loans in excess of $24 million, according to the report.

However, the city had "not established a viable system for tracking or reporting on these loans," according to the Grand Jury.

In his response to Yolo County Superior Court Judge Dan Maquire, who is responsible for the Grand Jury, Navazio basically indicated the city is taking action to correct problems.

For example, the Grand Jury suggested the city create a database of affordable housing loans. Navazio responds stating the city has created such a data base. An earlier version of the database was provided to the Grand Jury during its investigation, Navazio noted, and now additional information has been added to address the Grand Jury recommendation.

Additionally, the Grand Jury recommended the city direct its Community Services Department — the current agency administering the city's loan portfolio — to develop a policy and procedure manual for real estate loans, identifying who is required to manage loans and how, and on whose authority, a loan can be modified. This policy and procedure manual should be completed by Jan. 31, 2015.

Navazio responded, writing that the city has done just that, with the City Council scheduled to review the draft manual on Tuesday. The manual is scheduled to be finalized later in the year.

The city is also now preparing annual reports and is working to provide for greater management and oversight.

"The city's efforts to improve the management of its housing loan portfolio have been under way before, during, and after the Grand Jury's investigation," Navazio stated. "This work focuses on the organization and maintenance of the physical files; establishing an electronic database of loan agreements, promissory notes, deeds of trusts, and affordability agreements; preparing a spreadsheet system for tracking individual loans with key borrower information (property address, borrower name, assessor parcel number, source of funds for loan, principal amount of loan, start date of loan, loan term, interest rate, and other information); and verifying ongoing City responsibilities."

However, as Navazio noted, situations can change depending on personnel. "While the staffing situation for administration of the city's affordable housing loan portfolio is stable at this time with the assigned staff member also responsible for affordable housing projects/programs and the City's Community Development Block Grant program, the city recognizes over time staff assignments change as staff members leave or their work is restructured," he wrote.

"Accordingly, the City values the importance of putting systems and procedures in place to ensure continuity when the duties for administering the affordable housing portfolio are transitioned," he concluded.