COMMITTEE SUBSTITUTE
FOR ORDINANCE NO. 081169
Reducing an appropriation in the
amount of $300,000.00 from the Contingent Appropriation to correct the U.S.
Department of Housing and Urban Developments Finding No 4: Ineligible HOME
Activity in the Rockford Hills project.
WHEREAS, the
United States Department of Housing and Urban Development (HUD) performed a
monitoring visit at the City from January 14-February 2, 2008, and as a result
issued Finding No. 4: Ineligible HOME Activity (Finding) regarding the usage of
HOME funds with the Rockford Hill project; and
WHEREAS, in
August 2004, the Housing and Economic Development Financial Corporation (HEDFC)
sold the Rockford Hills property, located at 8208 Troost Avenue, to a private
borrower for $1,150,000.00 and in September 2004 issued a second mortgage loan
of $300,000.00 utilizing HOME Investment Partnership Program (HOME) funds. The
total cost of the overall redevelopment plan was $1,398,000.00 which included a
first mortgage loan of $920,000.00 from a private banking institution and an
additional $178,400.00 investment from the borrower; and
WHEREAS, the
borrower has never made any of the required payments to HEDFC, and a default
letter was sent on October 23, 2007. While the buyer has expressed a desire to
get the property into suitable conditions for resale, current market conditions
have prevented this from happening; and
WHEREAS, HOME
funding regulations require that all units must meet Housing Quality Standards
(HQS) in order to be rentable and this condition has not been met, thus
resulting in the Finding. Currently 51 of the 78 units are available to be
rented with one being used as an office; however, 18 units are in need of
repair and borrower estimates $135,000.00 is needed to complete renovations;
and
WHEREAS, the
repayment of $300,000.00 from a non-federal source is required to correct the
Finding; NOW, THEREFORE,
BE IT ORDAINED
BY THE COUNCIL OF KANSAS CITY:
Section 1. That the appropriation in the following account of the
General Fund is reduced by the following amount:
08-1000-179990-B Contingent
Appropriation $300,000.00
Section 2. That
the appropriation in the following account of the General Fund is increased in
the following amount:
08-1000-642356-B Housing
Planning Project $300,000.00
Section 3. That
the City Attorney is directed, if possible and appropriate, to devise an
agreement or other instrument with the lender of record, the Housing and
Economic Development Financial Corporation (HEDFC), stating that if any funds
are returned to HEDFC pursuant to this HOME loan that HEDFC will return such
funds to the Citys General Fund.
_____________________________________________
I hereby certify that
there is a balance, otherwise unencumbered, to the credit of the appropriation
to which the foregoing expenditure is to be charged, and a cash balance,
otherwise unencumbered, in the treasury, to the credit of the fund from which
payment is to be made, each sufficient to meet the obligation hereby incurred.
___________________________________
Jeffrey
A. Yates
Director
of Finance
Approved
as to form and legality:
___________________________________
Nicole
Rowlette
Assistant City Attorney