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:
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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.
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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
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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.