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HomeMy WebLinkAbout08340ORDINANCE NO. 8340 AN ORDINANCE BUDGETING AND APPROPRIATING FUNDS IN THE AMOUNT OF $1,460,506 FOR ELIGIBLE PROJECTS, AND APPROVING AND AUTHORIZING THE EXECUTION OF A GRANT AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) CONCERNING THE NEIGHBORHOOD STABILIZATION PROGRAM 3 BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Grant Agreement between the U S Department of Housing and Urban Development “HUD” and the City of Pueblo, a Municipal Corporation which is identified as Grant Number B-11-MN- 08-0005 for the Neighborhood Stabilization Program 3, copies of which are attached hereto, are hereby approved in all respects. SECTION 2. The President of the City Council is hereby authorized and directed to execute said Grant Agreement in the name of the City and the City Clerk is hereby authorized and directed to affix the official seal of the City of Pueblo and attest same. SECTION 3. The City Manager, or his duly authorized representatives, and other officials of the City are hereby authorized and directed to do all things required to be done in order to obtain payments under the Grant Agreement, including, but not limited to, making required certifications, submitting requests for payment, contracting with persons and organizations in order to carry out the provisions of the Grant Agreement, filing reports and keeping records relating to fiscal, performance and evaluation matters, and submitting other materials, as required to HUD. SECTION 4. The payments made by the HUD to the City pursuant to and under the Grant Agreement shall be transmitted to the Finance Department of the City and credited to Special Fund No. 241 for Community Development Block Grant- Neighborhood Stabilization Program 3. SECTION 5. Monies received as program income including principal and interest loan repayments, or other sources of private receipts by the fund account listed in Section 4 of this Ordinance, shall be transmitted to the Finance Department of the City and credited to Fund No. 241, and shall be re- programmed for eligible activities as outlined in the Grant Agreement. SECTION 6. The Director of the Department of Housing and Citizen Services is authorized to execute all documents associated with the Neighborhood Stabilization Program 3 implementation related with the purchase, rehabilitation and conveyance of abandoned and foreclosed upon properties, and is further authorized to move funding among NSP 3 activities as required to ensure timely expenditures. SECTION 7. The NSP3 grant in the amount of $1,460,506 is hereby budgeted and appropriated. HOME funds available in the 251 Fund in the amount of $550,000 are also hereby budgeted, and projects established, as follows: NSP301 NSP302 NSP303 NSP304 Housing Acquisition & Land Banking Administration Redevelopment Rehabilitation NSP3 $700,000 $460,000 $154,456 $146,050 HOME $350,000 $200,000 $0 $0 $1,050,000 $660,000 $154,456 $146,050 INTRODUCED: April 11, 2011 BY: Larry Atencio COUNCILPERSON PASSED AND APPROVED: April 25, 2011 _ Background Paper for Proposed ORDINANCE # R-4 DATE: APRIL 11, 2011AGENDA ITEM DEPARTMENT: HOUSING AND CITIZEN SERVICES DIRECTOR – ADA RIVERA CLARK TITLE AN ORDINANCE BUDGETING AND APPROPRIATING FUNDS IN THE AMOUNT OF $1,460,506 FOR ELIGIBLE PROJECTS, AND APPROVING AND AUTHORIZING THE EXECUTION OF A GRANT AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) CONCERNING THE NEIGHBORHOOD STABILIZATION PROGRAM 3 ISSUE Should the City Council approve the grant agreement, and appropriate and budget funds to carry out eligible projects under the grant? RECOMMENDATION Approval of the Ordinance BACKGROUND The City of Pueblo made application for an entitlement grant called Neighborhood Stabilization Program 3 (NSP3) from the Department of Housing and Urban Development (HUD) in February of 2011. The City’s allocation is $1,460,506. The City submitted 4 projects to be funded as per the eligibility criteria established by HUD. Attachment 1 contains the Activity Worksheets submitted to and approved by HUD. The Grant was approved in March of 2011. The purpose of the NSP grant is to address the high number of vacant and abandoned properties in neighborhoods caused by foreclosures. This Ordinance appropriates the grant and budgets for the listed activities. FINANCIAL IMPACT This Ordinance accepts the grant and budgets and appropriates the funding for the projects. There is no requirement for matching funds, however, some of the projects will require additional funding to complete, as identified in the Activity Worksheets. The additional funding needed is $550,000 and is available in the HOME grant in Fund 251. The City will be reimbursed for project expenditures upon proper completion of each activity undertaken. The funds will be drawn down through HUD’s IDIS system. The Grant will be set- up in the 241 Fund. Attachment 1 Activity Number 1 Activity Name Housing Redevelopment Select all that apply ❑ Eligible Use A. Financing Mechanisms E Eligible Use B Acquisition and Rehabilitation Uses ❑ Eligible Use C. Land Banking ❑ Eligible Use D Demolition ® Eligible Use E Redevelopment 24 CFR 570.201(a) Acquisition, (b) Disposition, (c) Public facilities and improvements, (e) Public services for housing counseling, but only to the extent that counseling beneficiaries are limited to prospective purchasers or tenants of the redeveloped properties, CDBG Activity or (i) Relocation, and Activities (n) Direct homeownership assistance (as modified below) 24 CFR 570.202 Eligible rehabilitation and preservation activities for demolished or vacant properties. 24 CFR 570.204 Community based development organizations. HUD notes that any of the activities listed above may include required homebuyer counseling as an activity delivery cost. National Objective Low Moderate Middle Income Housing (LMMH) The City will redevelop 6 homes to be sold to those clients whose income does not exceed 120% AMI Once the redevelopment work is completed, the homes will be marketed for sale Duration of Assistance Assistance will be regulated by HOME Affordability Requirements to ensure long -term affordability Tenure Ownership and rental Rate of Interest Rate Funding will be provided as a soft second at 0% interest. Activity Description Beneficiaries Properties will be sold to households at 120% or below of the area median income The City of Pueblo will give local contractors priority rating on the RFP Contractors who hire new employees must, to the maximum extent possible, hire workers who live in the NSP3 program area and contract with small businesses that are either owned or operated by persons residing in the vicinity of the project. A provision will be inserted in all contracts incorporating this requirement. Location Description Bessemer, Eastside URA, Westside /Downtown Budget Source of Funding Dollar Amount Attachment 1 NSP3 $700,000 HOME Investment Partnership Act $350,000 (Other funding source) $0 00 Total Budget for Activity $1,050,000 Performance Measures Six properties will be redeveloped as housing and sold to clients at or below 120% AMI Projected Start Date 4/1/2011 Projected End Date 4/1/2014 Department of Housing and Citizen Name Responsible Services Organization Location 2631 E 4 St. Pueblo, CO 81003 Administrator Contact Info Ada Clark, Director adaclark@pueblo.us, 719 - 553 -2850 Activity Number 2 Purchase and rehabilitate homes and residential properties that have been Activity Name abandoned or foreclosed upon, in order to sell or rent such homes and properties Select all that apply n Eligible Use A. Financing Mechanisms ® Eligible Use B Acquisition and Rehabilitation Use ❑ Eligible Use C. Land Banking ❑ Eligible Use D Demolition ❑ Eligible Use E Redevelopment 24 CFR 570.201(a) Acquisition 24 CFR 570.201(b) Disposition CDBG Activity or 24 CFR 570.201(e) Public services for housing counseling, but only to Activities the extent that the counseling beneficiaries are limited to prospective purchasers or tenants of the assisted properties. 24 CFR 570.201(i) Relocation National Objective Low Moderate Middle Income Housing (LMMH) DHCS will acquire 5 foreclosed and abandoned properties in the targeted area for sale or lease to eligible families. The ownership program will be substantially the same as the NSP1 program now being administered by DHCS for the City The homes will be sold to eligible families for the appraised price or the cost of acquisition and rehabilitation, whichever is less. At the time of sale of the home, the sales price, less any subsidy needed to make the home affordable to the Activity Description borrower, will be repaid to the NSP program and used for other NSP3 eligible activities. The rental program will also be substantially the same as the NSP 1 program being administered by the DHCS Upon completion of the rental units, the property will be transferred to a local non - profit for ownership To insure that the rents are affordable, the maximum that the non ❑profit will be able to charge for rent will be the HOME high rents. The subsidy will be structured to provide long term affordability Attachment 1 This activity will address local housing market conditions by rehabilitating structures in high risk neighborhoods. This target area has many homes that were built in the earlier part of the century and the systems have become obsolete, as well as the structure not meeting code The rehabilitation of these units will allow for safe, decent and sanitary housing to the low to moderate - income population Duration of Assistance Assistance will be regulated by HOME Affordability Requirements to ensure long -term affordability Tenure Ownership and rental Rate of Interest Rate Funding will be provided as a soft second at 0% interest. Beneficiaries Properties will be sold to households at 120% or below of the area median income The City of Pueblo will give local contractors priority rating on the RFP Contractors who hire new employees must, to the maximum extent possible, hire workers who live in the NSP3 program area and contract with small businesses that are either owned or operated by persons residing in the vicinity of the project. A provision will be inserted in all contracts incorporating this requirement. Location Description Bessemer, Eastside URA, Westside /Downtown Source of Funding Dollar Amount Budget NSP3 $460,000 HOME Investment Partnership Act $200,000 (Other funding source) $0 00 Total Budget for Activity $660,000 Performance Measures Purchase and Rehabilitation of 5 abandoned or foreclosed properties Projected Start Date 4/1/2011 Projected End Date 4/1/2014 Department of Housing and Citizen Name Responsible Services Organization Location 2631 E. 4 St. Pueblo, CO 81003 Administrator Contact Info Ada Clark, Director adaclarkPpueblo.us, 719 - 553 -2850 Activity Number 3 Activity Name Land Banking Select all that apply ❑ Eligible Use A. Financing Mechanisms ❑ Eligible Use B Acquisition and Rehabilitation Use ® Eligible Use C. Land Banking ❑ Eligible Use D Demolition ❑ Eligible Use E Redevelopment t$ Attachment 1 CDBG Activity or 24 CFR 570.2019(a)Acquisition, and (b)Disposition Activities National Objective Low Moderate Middle Income Housing (LMMH) The City will acquire and dispose of property within 10 years by 1) holding and maintaining the home in its portfolio for future redevelopment, 2) demolishing the home if it is blighted and maintain the property in its portfolio, 3) selling the cleared site to a developer for redevelopment; or 4) rehabilitating the home and either selling it to an eligible homebuyer or to a local non - profit partner as a rental property The City will hold properties within its Vacant Lot Recycle Program This activity will address local housing market conditions by demolishing and land banking blighted structures in high risk neighborhoods These lots will be maintained and redeveloped as the neighborhood is stabilized and demand for rental or homeownership opportunities returns. Duration of Assistance Assistance will be regulated by HOME Affordability Requirements to ensure long -term affordability Tenure Ownership and rental Rate of Interest Rate Funding will be provided as a soft second at 0% interest. Beneficiaries Properties will be sold to households at 120% or below of the Activity Description area median income Benefits The demolition of blighted properties will eliminate health and safety concerns of existing neighbors, as well, as providing for the immediate aesthetic improvements that the demolition of such structures provides. In the long -term it will provide for safe and decent affordable housing for low to moderate - income families. New homes and gut rehabilitation projects will also be required to meet the standard for Energy Star Qualified New Homes, which will provide for continued affordability through savings in energy consumption The City of Pueblo will give local contractors priority rating to contractors who hire, to the maximum extent possible, workers who live in the NSP3 program area and contract with small businesses that are either owned or operated by persons residing in the vicinity of the project. A provision will be inserted in all contracts incorporating this requirement. Eligible activities are costs directly associated with deconstruction and demolition (includes utility shut -off and hazardous materials testing and removal), clearance, removal and disposition of materials, site restoration (grading, seeding, curb replacement) Attachment 1 Location Description Bessemer, Eastside URA, Westside /Downtown Source of Funding Dollar Amount Budget NSP3 $154,456 $0 (Other funding source) $0 Total Budget for Activity $154,456 Performance Measures Properties acquired estimated at 5 Projected Start Date 4/11/2011 Projected End Date 4/11/2014 Name Department of Housing and Citizen Responsible Services Organization Location 2631 E 4 St. Pueblo, CO 81003 Administrator Contact Info Ada Clark, Director adaclarkPpueblo.us, 719 - 553 -2850 Activity Number 4 Activity Name Administration Select all that apply ❑ Eligible Use A. Financing Mechanisms ❑ Eligible Use B Acquisition and Rehabilitation Uses ❑ Eligible Use C. Land Banking ❑ Eligible Use D Demolition ❑ Eligible Use E Redevelopment CDBG Activity or Administration — General Management and Oversight as allowed under 24 CFR 570 206 Activities National Objective N/A Funding will provide for the administration of the NSP 3 program over a 3 Activity Description year - period Staff will develop request for proposals for professional services and contractors, construction supervision, accounting and reporting to HUD Location Description Department of Housing and Citizen Services Source of Funding Dollar Amount Budget NSP3 $146,050 HOME Investment Partnership Act $0 00 (Other funding source) $0 00 Total Budget for Activity $146,050 Performance Measures N/A Projected Start Date 4/1/2011 Projected End Date 4/1/2014 Name Department of Housing and Citizen Services Responsible Location 2631 E 4 St. Pueblo, CO 81003 Organization Administrator Contact Info Ada Clark, Director adaclark @pueblo.us, 719 - 553 -2850 FUNDING APPROVAL AND GRANT AGREEMENT FOR NEIGHBORHOOD STABILIZATION PROGRAM 3 (NSP3) FUNDS AS AUTHORIZED AND APPROPRIATED UNDER THE WALL STREET REFORM AND CONSUMER PROTECTION ACT OF 2010, AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 AND THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 (PUBLIC LAWS 111 - 203,111 -005 and 110 -289) NSP3 GRANTEE Pueblo, Colorado NSP3 GRANT NUMBER: B- 11 -MN -08 -0005 NSP3 GRANT AMOUNT. $1,460,506 NSP3 APPROVAL DATE: March 16, 2011 NSP3 EXPENDITURE DEADLINE (2 YEAR). March 16, 2013 NSP3 EXPENDITURE DEADLINE (3 YEAR). March 16, 2014 GRANTEE DUNS NUMBER. 010620284 1 This Grant Agreement between the U S Department of Housing and Urban Development (HUD) and Pueblo, Colorado (Grantee) is made pursuant to the authority of section 1497 of the Wall Street Reform and Consumer Protection Act of 2010 (Pub L. 111 -203 (July 21, 2010)) (Dodd -Frank Act) title XII of Division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111 -5 (February 17, 2009)) (Recovery Act) and sections 2301 — 2304 of the Housing and Economic Recovery Act of 2008 (Public Law 110 -289 (July 30, 2008)) (HERA) The program established pursuant to section 2301- 2304 of HERA is known as the "Neighborhood Stabilization Program" or "NSP " The term "NSP2" refers to the second appropriation of NSP funds provided under the Recovery Act. The additional allocation under the Frank Dodd Act represents the third round of Neighborhood Stabilization Program funding and is referred to as "NSP3 " Notice of Formula Allocations and Program Requirements for Neighborhood Stabilization Program Formula Grants (Docket No FR- 5447 -N -01, October 19, 2010) (NSP3 Notice), the Dodd -Frank Act; the Recovery Act; HERA, the Grantee s application for NSP3, the HUD regulations at 24 CFR Part 570 (as modified by the NSP3 Notice as now in effect and as may be amended from time to time) (Regulations), and this Funding Approval, including any special conditions, constitute part of the Grant Agreement. In the event of a conflict between a provision of the Grantee's Application and any provision of this Grant Agreement, the latter shall control. 2 2. The Grantee shall comply with reporting requirements established by HUD and OMB (including all revisions to such reporting requirements) and the Federal Funding Accountability and Transparency Act (Pub L 109 -282) (including implementing guidance). 3 Subject to the provisions of this Grant Agreement, HUD will make NSP3 Grant Funds in the amount of $1,460,506 available to the Grantee upon execution of this Grant Agreement by the parties. Of that amount, $365,126 must be used to house individuals or families whose incomes do not exceed 50 percent of area median income, pursuant to Dodd -Frank Act. The Grantee shall have 24 months from the date of HUD's execution of this Grant Agreement to expend half of the NSP3 Grant amount pursuant to the requirements of this Agreement, the Dodd -Frank Act, the Recovery Act, HERA and the NSP3 Notice, as amended. The Grantee shall have 36 months from the date of HUD's execution of this Grant Agreement to expend the total NSP3 Grant amount pursuant to the requirements of this Agreement, the Dodd -Frank Act, the Recovery Act, HERA and the NSP3 Notice, as amended. The NSP3 Grant Funds may be used to pay eligible costs arising from eligible uses incurred after the NSP3 Approval Date provided the activities to which such costs are related are carried out in compliance with all applicable requirements. Pre -award planning and general administrative costs may not be paid with funding assistance except as permitted in the NSP3 Notice, as amended. Other pre -award costs may not be paid with funding assistance except as permitted by 24 CFR 570.200(h), for purposes of NSP3, such costs are limited to those incurred on or after the date that the NSP3 Notice was published by HUD 4 The Grantee agrees to assume all of the responsibilities for environmental review, decisionmaking, and actions, as specified and required in regulations issued by the Secretary pursuant to section 104(g) of Title I of the Housing and Community Development Act, as amended (42 U S C 5304) and published in 24 CFR Part 58 5 The Grantee agrees that it will demolish or convert units using NSP3 funds only to the extent and scope described in the NSP3 substantial amendment. The Grantee agrees that under no circumstances will NSP3 funds be used to demolish any public housing (as defined in section 3 of the United States Housing Act of 1937 (42 U S C 1437a)) 6 The Grantee agrees to comply with the Recovery Act provisions concerning tenant protections applicable to NSP3 acquisitions of foreclosed property The Grantee must document its efforts to ensure that the initial successor in interest (ISII) in a foreclosed upon dwelling or residential real property (typically, the initial successor in interest in property acquired through foreclosure is the lender or trustee for holders of obligations secured by mortgage hens) has provided bona fide tenants with the notice and other protections outlined in the Recovery Act. The Grantee will not use NSP3 funds to finance the acquisition of property from any initial successor in interest that failed to comply with applicable requirements unless the Grantee assumes the obligations of such initial successor in interest with respect to bona fide tenants. If the Grantee elects to assume such obligations, it may only do so if the tenant is still occupying the property and will provide any tenant displaced as a result of the NSP3 funded acquisition with the 3 assistance outlined in 24 CFR 570 606 If the Grantee knows that the ISII did not comply with the NSP tenant protection requirements and vacated the property contrary to the NSP requirements, NSP3 funds cannot be used to acquire such properties. 7 The Grantee further acknowledges its responsibility for adherence to all applicable terms and conditions of this grant award by sub - recipient entities and contractors, including obtaining a DUNS number (or updating the existing DUNS record), and registering with the Central Contractor Registration. 8 This Grant Agreement may be amended only with the prior written approval of HUD In considering proposed amendments to this Grant Agreement, HUD shall also review, among other things, whether the amendment is otherwise consistent with the Dodd -Frank Act, the Recovery Act, HERA, the NSP3 Notice, as amended, and the Regulations. 9 The Grantee may not amend its Grantee Submission other than as described above; however, such amendments will be subject to the requirements of the NSP3 Notice and any revisions HUD may make to the NSP3 Notice (or any successor Notice or regulation) 10 The Grantee must respond in writing to any citizen complaint within 15 working days, if feasible, and send a copy of the response to HUD The Grantee shall at all times maintain an up -to -date copy of its Grantee Application, including all amendments approved by HUD, on its Internet website. Further, the Grantee shall maintain information on all drawdowns, deposits, and expenditures of grant funds and program income under this Funding Approval and Grant Agreement and any other records required by 24 CFR 570.506 and the NSP3 Notice, as amended, in its files and shall make such information available for audit or inspection by duly authorized representatives of HUD, HUD's Office of the Inspector General, or the Comptroller General of the United States. 11 The Grantee is advised that providing false, fictitious or misleading information with respect to NSP3 Grant Funds may result in criminal, civil or administrative prosecution under 18 USC § 1001, 18 USC § 1343, 31 USC § 3729, 31 USC § 3801 or another applicable statute. 12. Close -out of this grant shall be subject to the provisions of 24 CFR 570.509 or such close -out instructions as may hereafter be issued by HUD specifically for NSP3 grants. [Remainder of this page blank] 4 This NSP3 Grant Agreement is binding with respect to HUD in accordance with its terms upon the execution by HUD in the space provided below, subject to execution on behalf of the Grantee. The United States Department of The Grantee Housing and Urban Development [Insert Grantee Name] (1< „----.-' ---- ' iit- / ACtikA" Si ature of Authorized Official Signatur of Authorized Offical eRoy P. Brown Agui lira Name of Authorized Official Name of Authorized Official Director, Community Planning and Development President of City Council Title of Authorized Official Title of Authorized Official o/ 6o --U// 4/ /4,1, Date Sig ature Date of Signature 84 6000 615 Grantee Tax Identification Number