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HomeMy WebLinkAbout08051ORDINANCE NO. 8051 AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION OF GRANT AGREEMENTS BETWEEN THE CITY OF PUEBLO AND THE STATE OF COLORADO, FOR AND ON BEHALF OF THE DEPARTMENT OF LOCAL AFFAIRS FOR THE NEIGHBORHOOD STABILIZATION PROGRAM (NSP1), AND COMMUNITY DEVELOPMENT BLOCK GRANT FOR THE PURPOSES OF FORECLOSED HOME PURCHASE, REHABILITATION AND RESALE PROGRAM BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: cFCTTnN 1 The Grant Agreements between the State of Colorado, for and on behalf of the Department of Local Affairs and the City of Pueblo, which are identified as Grant Number 09- 318 for the Neighborhood Stabilization Program (NSP) Foreclosed Home Purchase, Rehabilitation and Resale Program, and 09 -303 for the Neighborhood Stabilization Program (NSP) Multi- family Acquisition and Rehabilitation Project, copies of which are attached hereto, are hereby approved. RFCTTn1\T The President of the City Council is hereby authorized and directed to execute said Grant Agreements 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 to 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 Agreements, including, but not limited to, making required certifications, submitting requests for payment, contracting on behalf of the City with persons and organizations in order to carry out the provisions of the Grant Agreements, filing reports and keeping records relating to fiscal, performance and evaluation matters, and submitting other materials, as required, to the State of Colorado. SECTION 4. The payments made by the State of Colorado to the City pursuant to and under the Grant Agreements shall be transmitted to the Finance Department of the City and credited to Special Fund No. 240 for $2, 906, 977. SECTION 5. Monies received as program income, including principal and interest loan repayments, or other sources of private receipts by the fund accounts listed in Section 4 of this Ordinance, shall be transmitted to the Finance Department of the City and credited to Fund No. 240. A77TSTDD SY: CITY CLERK INTRODUCED: August 10, 2009 BY: Randy Thurston COUNCILPERSON APPR D' } �- PRESIDENTof City Council PASSED AND APPROVED: August 24, 2009 4 Background Paper for Proposed Ordinance AGENDA ITEM # R — 7 DATE: August 10, 2009 DEPARTMENT: HOUSING AND CITIZEN SERVICES / ADA RIVERA CLARK TITLE AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION OF GRANT AGREEMENTS BETWEEN THE CITY OF PUEBLO AND THE STATE OF COLORADO, FOR AND ON BEHALF OF THE DEPARTMENT OF LOCAL AFFAIRS FOR THE NEIGHBORHOOD STABILIZATION PROGRAM (NSP1), AND COMMUNITY DEVELOPMENT BLOCK GRANT FOR THE PURPOSES OF FORECLOSED HOME PURCHASE, REHABILITATION AND RESALE PROGRAM ISSUE Should the City Council approve two grant awards from the Colorado Department of Local Affairs Division of Housing's (Division) Neighborhood Stabilization Program, which allows the City to purchase, rehabilitate and resell properties that are lender owned and have gone through the foreclosure process. RECOMMENDATION Approval of the Ordinance BACKGROUND In July 2008, President Bush signed the Housing Economic Recovery Act (HERA). A component of the Act was the Neighborhood Stabilization Program (NSP). Based upon an allocation formula the City was eligible for $2,906,977 of the $34 million allocation received by the State from the U.S. Department of Housing and Urban Development (HUD). The Department made a presentation to the City Council in January of 2009 outlining the eligible uses of the fund and also outlining the proposed projects. These projects are: 1) the purchase and rehabilitation of three multi - family buildings along E. 4th Street 2) the purchase and rehabilitation of 10 single - family foreclosed homes; and 3) possibly the purchase of 3 -5 vacant or blighted properties. The project scope is contingent on feasibility, eligibility and availability. The targeted neighborhoods are in the Eastside and Bessemer, which have been identified by the Division as having the largest number of foreclosures. The City's purchases under the Program must fall within the identified areas. These proposals are contingent on current owner's desire to sell the properties (as relates to multi - family) and the feasibility of the rehabilitation of the properties. If the multi - family complex proves not to be feasible, then the number of single - family units to be acquired will be increased. The Department of Housing and Citizen Services (DHCS) presented a resolution to the City Council on February 23, 2009 requesting approval to submit the application as presented to Council. Council approved the submittal. In April of 2009, the Housing Director and Kim Bowman of Posada made a presentation before the State Housing Board and answered questions regarding the application. On July 1, 2009, DHCS received two award letters from the State for the NSP funding. The contracts are separated into single - family and multi- family activities to be carried out by the City. The single - family allocation is $1,041,234 and the multi - family allocation is for $1,865,743. The federal regulations, as established by Congress, allow for an 18 -month period to spend the funds. The 18 -month period was initiated when the State signed its agreement with HUD in March 2009. The Department of Housing and Citizen Services (Department) will administer the grant on behalf of the City. We will partner with outside agencies to provide services such as the required homebuyer counseling, title services, appraisal, realtor, and lead and asbestos removal services. The NSP grant is part of the Community Development Block Grant Program, and with some minor exceptions, all the applicable laws and regulations apply. We have been informed by the State, HUD and the Office of the Inspector General and there will be intensive scrutiny in the administration of the funds, as the Office of Management and Budget has determined that the program has a high potential for fraud. Colorado will be one of 16 states of which the Office of the Inspector General will be closely monitoring. FINANCIAL IMPACT The grant will provide $2,906,977 in Community Development Block Grant funds for the specific purpose of purchasing foreclosed properties. There is no match requirement, and all funds recouped from the sale of the properties must be returned to the State for reprogramming.