REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Amending Resolution Number 712-15, the Executive Mortgage Assistance Policy for the Provision of Housing Assistance to Newly Appointed Charter Officers and Department Directors (the “Executive Mortgage Assistance Program”) to Update the Index Used to set the Interest Rate on New Mortgages.
Report
BACKGROUND
The City has had a long-standing Executive Mortgage Assistance Program (the “Program”). The Program was established in 1981 by Council Resolution Number 256-81. The Program was amended in 1988, 1989, 1996, 2015, and 2019 by Council Resolution Numbers 226-88, 125-89, 160-96, 712-15, and 933-19 respectively. The 2019 resolution amended resolution 712-15 to add the Deputy City Manager classification to the resolution. All other provisions of 712-15 remained in place.
EXISTING POLICY
Council Policy 7.3.1 Legislative Management - Goals and Policies, Goal 7.3D: Maintain a quality work force, consistent with state and federal laws, City Charter, and adopted policies in order to assure that City services are provided in an effective, efficient, and high quality manner.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment and 15378(b)(4) in that is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
DISCUSSION
Given the high cost of the housing market in Sunnyvale, the Program was enacted to enhance the City’s ability to hire top quality executives, as well as encourage executives to live within Sunnyvale corporate limits.
The interest rate index used to set the mortgage rate in the resolution was historically the 11th District Cost of Funds Index (COFI), maintained by the Federal Home Loan Bank of San Francisco. However, the index was discontinued in January 2022 due to a decline in data available to calculate the index. The index has been succeeded by the Enterprise 11th District COFI Replacement Index administered by Freddie Mac and was developed specifically as a replacement to the 11th District COFI.
The attached resolution amends the existing policy to update the index for setting interest rates for the program to the Enterprise 11th District COFI Replacement Index or the closest successor index should the Enterprise 11th District COFI be retired.
FISCAL IMPACT
There is no fiscal impact with this change. The Enterprise 11th District COFI Replacement Index yields an interest rate similar to the 11th District Cost of Funds.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Adopt a Resolution amending Resolution Number 712-15, the Executive Mortgage Assistance Policy for the provision of housing assistance to newly appointed Charter Officers and Department Directors (the “Executive Mortgage Assistance Program”) to update the index used to set the interest rate on new mortgages.
Staff
Prepared by: Tim Kirby, Director of Finance
Reviewed by: Jaqui Guzmán, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Resolution No. 712-15
2. Draft Resolution Amending Resolution No. 712-15 to Update the Interest Rate Index Used to Set the Interest Rate on New Mortgages