City of Davis*

The City and the Agency believe that DACHA was an independent entity and that neither the City nor the Agency had any authority to require DACHA to take any particular action. Both the City and the Agency provided information and assistance to DACHA; however, neither the City nor the Agency was responsible for the decisions of DACHA. Neither the City nor the Agency had any formal regulatory oversight over DACHA. The only legal remedies that the City and the Agency had were remedies if DACHA defaulted on its Agency loan or if DACHA violated the affordability restrictions on the housing units. The City maintains that it could not force an organization to accept units it did not wish to receive/purchase from a project developer. The Davis Area Cooperative Housing Association (DACHA) Board provided a letter to the City in June 2006 requesting that new units not be provided to DACHA, as new units were seen by the DACHA Board to "represent a financial risk to the organization." Requiring an unwilling third party organization to accept units goes beyond what the City can or should control. The City also received correspondence from the project developer in which it noted that it understood the City was under no legal obligation to provide affordable units to DACHA. Response to Cirand Jury 2.