HomeMy WebLinkAbout2011 Ordinance No. 002ORDINANCE NO. A
SERIES OF 2011 -
BY AUTHORJTY
COUNCIL BILL NO. 2
INTRODUCED BY COUNCIL
MEMBER GILLIT
AN ORDINANCE AUTiiORlZING AMENDMENT NO . 2 TO A STATE OF COLORADO
DEPARTh1ENT OF LOCAL AFFAIRS NEIGHBORHOOD ST ABIL!ZATION PROGRAM
(NSPI) GRANT TO ALLOW RETENTION OR REUSE OF MONJJ::S COLLECTED FROM THE
SALE OF PROPERTIES UNTIL TI!E END OF THE GRANT PERIOD .
WHEREAS, the Housing and Economic Rc-covcry Act (HERA) appropriated $3.92 billion for
fac Neighborhood Stabilization Program (NSPI) to support the acquisition, rehabilitation, or
uemolitiou of foreclosed and abandoned properties; nnd
WJfr:JiliAS, the City Council of tlic City of Englewood, Colorado authorized the City's
application for Federal funding through the Neighborhood Stabiliwtion Program (NSP I) by :he
passage of Resolution No. 34, Series of 2009; and
WHEREAS, the Colorado S:ate Housing Board approved that Project Rebuild NSPl application
on July 14, 2009 and awarded the City of Englewood, Colorado $1,253,379; the contract was
approved by the passage of Ordinance No. 37, Series of2009; and
WHEREAS , the Project Rebuild is to purchase and rehabilitate abandoned or ~oreeloscd single-
family properties in the City of Englewood; and
WHEREAS , the Englewood City Council authorized the acquisition of ten (I 0) single-family
,·asant foreclose.d properties hy the passage Ordinance No. 49, Series of 2009 and later autb~.;zed
an additional 3 houses by the passage ofOrdinanec No. 27, Series of 2010 with these grant nmds;
and
WHEREAS, this second amendment will modify the terms of the original grant to allow the
City to retain the grant funds until the end of the grant period (2013) rather than returning the funds
upon the sale of each property;
NOW , THEREFORE, BE IT ORDAINED BY TI:!E CITY COL'NCILOF THE CITY OF
ENGLEWOOD, COLORADO, AS FOLLOWS:
S.t;£!iQnl The City Cou11cil of lhe City of Englewood, Colorado hereby authori zes a second
amendment to the Intergovernmental Grant Agreement attached as Exhib it A, "Program Income
Reuse Plan" for and on behalf of the City of Englewood, Colorado.
Section 2. The Mayor Pro Tern is authorized 10 execute the second amendment of the
Intergovernmental Grant Agreement atloched as "Pragrsun lnco:n• Reuse Plan" for and on behalf of
the City of Englewood, Colorado.
Introduced, read in full , and passed on first reading on the 4th day of January, 201 I .
Puhlishc<l by Title aN o Dill for an Ordinance in the City's offk.ial newsp aper on the 14th dr.y of
.l rur.rn ry, 2011.
l"ubl is hccl as a Bill for an Ordinance on the Ci ty 's officio! website beginning on the 5th doy of
.l ;111u;il'y, 2011 for thirty (30) days.
Read hy 11tl c :111cl passed on final readin g on the IS"' cla)' or .lmurnry, 20 11.
P11 :·i1h~hcd hy I \lie in th e C it y's orrii:i:,I n,:w~1,:-ip1 :r n!; ()rclinnncc \Jo ,6,. .... Serie$ of '.W 11 , nn
th e 21" day of Januory, 2011
l'ui,lishcd by title on the City'< official wchsitc beginning on the 19•h day of
.lanua l'y, 2011 fo r thirty (30) da ys.
--· --7;, '/ . ,-'j ~-~-,:: Y c....e ·Jc v .2 ~ ill Wil so n, Mit yor Pro Te,111
l, I..nu1;rishia A. Ell is, Ci ty C!c 1k (l rth c Ci ty o f Eng lcwo1.1cl, CalurnJ o, he reby c~rt ify tha t the
:1hc 1vc Zlncl f'orcgo111g i!:: a 1n1c CO?Y of lhc Orc:in .,1 11 cc p:issed on final reading mid publisl1cd hy
title as Ordinance No .-~' Series of 2011.
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PROGRAM INCOME REUSE PLAN
Neighhorhood Stabilization Program (NSP)
Colorado Department of Local Affairs -Division of Housing (DOH)
Tho following are resou·ces including Federal regulations and State guidelines goveming NSP Program Income :
24 CFR 570.500;
DOH Substantial Amendment to the NSP Action Plan {NSP Action Plan); and
DOH (NSP) Program Income Guide {NSP Pl Guide).
I he !;fate of Colorado's NSP Program lncurne :'louse Plan has two main objectives:
1. To r:,aximlze the banefil of NSP program income for Colorado's futwe affordable housing nee:ls, and
2. To preoare the: State and DOH programmalically for HUD's final guidance on the future of Program
Income upon the c10,eout at NSt' contracts, post Marc.h 10, 2013. In anticipation or HUD's guidance, OOH is
limiting tte timeframe o: each grantee's NSP Program Income Reuse Plan to expire by March 10, 2012.
The purpose of this plan is lo establish guidelines for program income generaled through activities funded under
the Neighborhood Stabilization Program {NSP). In order to use Program Income, grantAes must submit a
Program Income Reuse Plan, in the fcrmat below, for approval by the Division of Housing. Unless otherwise
stated, NSP falls under the same rules as those established for Community Development Block Grant (<..:Dt:1<,;)
fonds . This is a waiver to the State of Colorado's Program Income Guide and the NSP Action Plan.
Definition of Program Income
As defined in the DOH Neighborhood Stabilization Program {NSP) Program Income Guide (NSP Pl Guide).
Eligible Activities and Use of NSP Program Income
Program income must be used for NSP eligible housing activities which benefit low-, moderate•, and middle-
Income {LMMI) individuals and families. In addlt :on, the use of program income is limited to thos, activities
described in the Grantee's NSP r.nntrar.t
Cash Management
No profit can be earned on the sale of an abandoned or foreclosed home or residential property to an
individual as a primary rcsidonce . The sale must be the lesser of either lhe appraised value at lime of
resale, or an amount equal to or less lhan the cost to acquire, redevelop or rehabilitate the home or
property up to decent, safe, aad habitable condition .
All NSP Pr~gram Income generated by NSP-funded and/or Program Income-funded activities must be
placed in a separate NSP Program Income account.
Grantees must maintain financial records on the receipt and expenditure of Program Income funds
separately from other NSP program funds being administered.
The total amou~t of Program Income on hand must also be reporteci when submitting a drawdown
request for NSP funds.
In addition, documentation must be maintained, by activity, as to how the Program Income expenditure(s)
meets NSP eligible activ ities as well as other program requirements .
All NSP Program Income must be disbursed for eligible NSP acliviliP.s before additional NSP funds are
made available lo the Grantee for an adva~ce or reimbursement.
Reporting
The Grantee shall comply with all NSP reporting requirements . including but not limited to :
Section 3 Report · by July 31 of each year
• Wage Compliance Report OctolM 31 and April 30
Final Wage Compliance Report 30 days after construction is complete
Funds Reques! Form .·•. funds are needed
Monthly PerformaPce due 10 days after the end of each ,nonth
lvlonthly NSP Program Income Report due 10 days afler the end of each month
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/iaf._Program Income Reuse Plan
Financial Swnrnary (from lalesl Financial Report)
--..
1 . CDOH NSP 1 Award amount -2 . Funds Exoemled as ol ldalel: 11-30-2010
3 . .~unds [!l_q!•!!:~s!.I<? !,0_.11pleto1emaii1inq-acliviiies _____
4 , Proaran, income rocolvod as of (dale) 11-30-2010
I
I S1.,].!i1_37E
I $1 533 675
··-·-· I S 220,000
-0-
·-5~ ··---Projected nr£9ram income for remail'der of contract 2eriod s 750 ooc ---_fi . .2_l_!!~lu s from oriqinal CDOH awardJL::._(?.:.!.211. -0-
__ _L _E_~_li!11a_~d fund s available lor additional activities [4 . + 5 .1 s mnooo
'"' --
Swnmary of ?I sources (sales or NSP acquired properties , P&I on NSP financing, etc):
Hcntat !JI -0-
S,,los Pl $750,000
11 Ullilt X II 111011tl l::i -0-
Repaid finance mechanism fu nds •0-
rroposcd 3cti vitlc3 :
(NOTE : n,·Jsl conti nue axit;ling co ntract ed NSP eligib le activity . Any program pkm to mar kol r.ing le family homes
ut or be'o w 50% of AMI must be includ ed and appruved by the S'.ale .)
Purcnase, re ha ~ '.!Italian, a nd rasa1o .
Proposed properly(i"s):
(NOTE: provide infr.rmalion on number, lype (SF/MF ,) reuse (owner or rental), location (eligible area(s)),
sourcP.(s))
Acqt.i rc Uiree single-family units .
Reu se -se ll a!i uwn er occuj)ied units .
Acqeisilicn within the 11 eligible CensJs Tracts.
Estimated costs (p,oposed budget):
Maximum NSP admln: 2%
Amount prioritized for us9 In Pro1ect Delivery Casis (by dollar amount and percentage)
Am ounl p rio ritized to serve households aVbelow 50% AMI : $187,500
Acquis,t icn
Ruh ;.11J
Appraisals
Pre-Purchaso Counseling
Marketing
Project D ovclaµ,ncnl
Project C~urying Co~ts
Admini stratiu n
TOTAL
$450,000
$1 80 ,000
$ 1,000
$ 500
$ 30 ,000
$ 69,000
S ~.500
S 15000
$750 ,000
Fxrlain plan lo conlin11e lo e•pend both remaining awarded funds anc' pro~ram income prior lo Marer. 10 , 7.01?..
Current awarded funds aie fully obligated . !\s units are sold, Pl will be used lo acquire, rehab. and sell additional
single-family unit s.
Maj or milestones for completio n (prior lo, and concluding March 10, 21112)
ldentlflcaliori or properlies: 10·31 ·2011
Acquisllio11/Closi119 : 12-31-2011
Redeveloµmenl : 2·28-2012
Marketing: 12-31-2012
Occuµa11cy (s~lt orrenlal): 12·31 -2012
R~~urning NSP Program Income
. 3.
All ou\slanding program income will be returned lo DOH by March 10, 2013, if not requesled al an earlier dale by
DOH.
The /I/SP Program Income Reuse Plan must be accepted and cert/ned by the certifying official of the /I/SP
grant, and written acceptance by the Dlv/s,on of Housing must be obtained.
Name or Certifying Official or Iha NSP Granl:
James K. Woodward
Signature
Tille of Certifying Official :
Mayor
Dale: January 4, 2011
Accepted and Certified by the Division ol Housing
Dale:
Contract: # HONSP09308
Grantee Name : Cily of Englewood
Conlracled NSP Aclivily: Homeownership
Granlee Address : 1000 Englewood Parkway, Englewood, CO 80110-2373
Telephone: 303 762-2349
E-mail : jgrimmett@englewoodgov.org
Contact Persoa : Janel Grimmen
COUNCIL COMMUNICATION
I Date: Agenda Item: Subject:
January 4, 2011 11 a i An Ordinance amending Neighborhood
Stab ilization Program Grant Budge! 10 include a
Program Income Reuse Pl an
Initiated By: Staff Source:
Community D evelcpmen l Department Janet Grimmett, Housing Finance Specialist
H arold J. Stitt, Senior Planner
COUNCIL GOAL AND rREVIOUS COUNCIL ACTION
City Council app ·oved Resolution 34, Series of 2009 on March 23, 2009 authorizing the
Community De ve lopment Department to file an application fc• Federal fu nding through the
Neighborhood Stabilization Program (NSPl); Ordinance 37, Series of 2009, approved on
September 21 , 2009, authorizing the Neighborhood Stabilization Program (NSP 1) Gran!
Ag,eement; and Ordinance 49, Series of 2009, app roved on November 2, 2009, authorizing the
purchase of lrn houses in fulfillment of the NSPl contract; Resolution 35, Series of 2010, approved
~ transf Pr an rl supplemental appropriatir · nf long term asset reserve funds (LT AR) 10 fund
improve ments related to the F~der.l Neighborhood Stabilization Program (N~-Pl) project; and
Ordinance 27 , Series of 2010, amended the NSPl l,udget to add $500,000 to th e grant amount
and authorizing the purchase of up to three additional foreclosed si ngle-family homes .
RECOMMENDED ACTION
Staff recommends that Council approve a bill for an ordinance authorizing the execu tion of an
amendment to the agreer:ient of the Neighborhood Stabilization Program grant, incorporating a
Program Income Reuse Plan tha t allows the City to retain the grant funds until th e end of the grant
period (2013) rather than returning the funds upon the sale o: each property .
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
In 2008, the Federal governm ent plssed th e Housing an d Economic Recovery .A.cl (HERA), the first
new legislation in a generation for housing and economic development H~KA appropriated $:J.Yi
billion for the Neighborhood Stabilization Program (NSP1) to support the acqu isition, rehabilitati on,
or demolition of foreclosed and abandoned properties. The Stale of Colorado receive d a total of
$5 ~ milliun in NSPl fund, uf which $37.9 i, dirt!Llly dU111i11istered l,y the Stale .
On March 30 , 2009, the Community Development Department submitted an app li~a ti on to 1hr
Colorado Department of Local Affairs, Division of Housing for NSP1 funding ior Proj ect Reb uild.
Project Rebuild will purchase and rehabilitate abandone d or foreclosed single-family properties in
the City's ten eligible census tracts .
The S1,1w Ho11sing Board approved th e Project Rebuild NSPl application on Jul\' 14, 2009. The
BoJrd awarded rhe City $1,25),3 79 .
Ke y NSP requirem ents include:
N SP funds m ust be expended within 11\ mnntl>< ni rh e dale 1!1e Slat e received funding
(March :!009).
• A multi-yea r reinves 1111e111 peri od wilh a lerm end1•1g r 1arch 10, 20 13 .
• Households pu rcha sing properties mu st undergo a rni ,,imum of Pig hl ho ur i; nf HUn-
approv ed homeownership cou nsc li i,g.
I 00% of all fund s shall be used to serve fa milies w liose 'ncom e does nol exceed 110% of
Area Median In come (AMI).
25'Yo oi all funds shall be used 10 serve families whose income does not exce ed 50~~. of
AM !.
Re habili1at ,on Standards must Ile established (minimum of Housing Quality Standards and
l ocal codes, with green building and en ergy and water efficiency encour ar,ed).
• Sale prices of abandoned o r foreclosed homes purchased o r r~developed and sold to
individuals, as a primary res irlenc;,, sh,11 be equal to or le ss 1h an the cos, lo acquire and
re develop th e ho m e.
• Purchase prices of homes can include closin g costs .
• Appraisals are required o n all accui;it.ons using NSPl funds .
• Foreclo se d homes shall be purc:hased at a di ~c ounl of at lea st 11.1/u from lh e curr ent ma rket-
dµpraisecl value.
• At.!1,iiniS1ra1ive fees up to 2% for non-Direct and reas onable developer lees to operate the
NSP I proeram are all owed.
Tir e Colora do Division of Housing (DOI 1) has reques ted th at Community Development H ousing
staff provide a Program Income Reus e Plan to perm il the reu se of projected pr ogram income
derived from lhe sale of NSP units for the acquisition, rehab, and sale of additional units by March
10, 20 12 .
Tu date, Project Rebuild has acquired eleven si ngle,lamily vacan t foreclosed properties located in
the eligibl e cemus tracts . The currenl NS?l µrojecl called fo r the acquisiti on, rehab, and sale of
thi rteen ( 13) fo reclosed single-family pr operti es .
FINANCIAL IMPACT
Ex isting Community D ev?lopmenl staff has the required experlise tu acquire fu1eduwd µruµer:ies,
provide rehabilitation, and sell 1he properli es to elig ible buyers. All acq uisition and rehab expenses
will be covered by the NSP 1 grant.
LIST OF ATTACHMENTS
Pr o posed Bill for an O rdinance