Minutes 03/26/2013 - Laserfiche WebLink

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March 26, 2013 1. Terry Danaher, 413 Dinwiddie Street, spoke in support of this item. Motion by Mr. Moody, and seconded by Mr. Meeks, to adopt the following ordinance, and was adopted by the following vote: "ORDINANCE TO APPROPRIATE $50,000 IN THE FY 2012-13 GENERAL FUND FOR THE PURPOSE OF REIMBURSING THE ECONOMIC DEVELOPEMNT AUTHORITY OF THE CITY OF PORTSMOUTH, VIRGINIA FOR PAYMENT OF LEGAL FEES INCURRED IN OPPOSING THE IMPOSITION OF TOLLS ON THE DOWNTOWN AND MIDTOWN TUNNELS AND THE MARTIN LUTHER KING CONNECTOR." Ayes: Cherry, Edmonds, Meeks, Moody, Psimas, Randall, Wright Nays: None 13 - 141 -Adoption of a resolution requesting a reduction of $313,032.16 in the City of Portsmouth's FY 2013-14 (FFY 13) U.S. Department of Housing and Urban Development HOME Investment Partnerships Grant. Vision Principle: Change and New Directions. Background: • HUD administers the HOME Investment Partnerships program which promotes the expansion of decent, affordable housing for low and very low income families. The City of Portsmouth is a HUD HOME entitlement community and receives an annual allocation of HOME dollars each year. • The City partners with Community Housing Development Organizations (CHDOs) to use these funds for activities such as acquiring and rehabilitating housing and providing financial assistance to low income families to promote home ownership. • The Center for Community Development, Inc. (CCDI) was a certified CHDO that used $313,032.26 in HOME funds to acquire and partially rehabilitate properties at 2231 Elm Avenue, 1029 Ann Street, and 2309 Peach Street. CCDI used these houses as collateral to obtain a loan from BB&T. The loan proceeds were not used to redevelop these properties. • CCDI did not complete the work required and these properties went into foreclosure and auction. • Because these projects were not completed according to HOME regulations, the City is required to repay $313,032.16 to HUD. Discussion: • The City investigated all possibilities to salvage these three projects and avoid foreclosure by the bank. However, the City determined that it made no financial or economic sense to continue to complete these three homes as the City would ultimately spend more than $313,032.16 to complete the necessary work and satisfy the bank's deeds of trust. • The City met with HUD and determined that it is possible to request a reduction of future allocations to satisfy repayment. This is a better alternative than using general fund dollars to repay HUD. • We advertised a notice of intent to seek a reduction of HOME funds and asked for public comment on a proposed reduction. The 30 day comment period ended on March 5, 2013 and we received no comments. • HUD requires the adoption of the attached resolution as well as a letter signed by the chief elected official of the City. Financial Impact • HUD will reduce the City's FY2014 allocation of HOME dollars by $313,032.16. As a result, the City and its CHDOs will complete fewer HOME projects. Adoption of the resolution will enable the City to save $313,032.16 in General Fund dollars. Recommended Action: • Adoption of the resolution. Vision Principle: Change and New Directions. 1. Mark Geduldig-Yatrofsky, P. O. Box 50141, spoke in support of this item.