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Home My WebLink AboutAgenda Statement 1985/09/24 Item 28a,b COUNCIL AGENDA STATEMENT Item 28 Meeting Date 9/24/85 ITEM TITLE: a. Resolution Avrcz Approving an agreement with United States Escrow with regard to the performance of services for the City' s Rental Rehabilitation Program b. Resolution /a./ S�Appropriating FY 1985-86 Rental Rehabilitation Program funds t SUBMITTED BY: Community Development Director` �/_ REVIEWED BY: Executive Director+ (4/5ths Vote: Yes X No ) The City has received $120,800 from the U. S. Department of Housing and Urban Development (HUD) for a City approved Rental Rehabilitation Program to increase the supply of standard rental housing units affordable to lower income households. Under the program regulations, the City is required to collect and report data to HUD relating to properties rehabilitated and tenants assisted, manage and disburse grant funds and private funds and process loan applications. United States Escrow, an escrow corporation, has the experience and expertise to perform these duties, at no cost to the City. In a related matter, the Council approved the Rental Rehabilitation Program for FY 1985-86 and must now appropriate the FY 1985-86 program funds. RECOMMENDATION: That the Council adopt the resolutions approving an agreement with United States Escrow to provide services for the Rental Rehabilitation Program and appropriating Rental Rehabilitation funds for FY 1985-86. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The City's Rental Rehabilitation Program uses a dual approach to increase the supply of rental housing. It provides a 10-year deferred forgivable loan, at 0% interest, of an amount not to exceed $5,000 per unit or 50% of the cost, for rehabilitation assistance to private property owners of substandard multi-family units occupied by lower-income families. It also provides rental subsidies, when available, in the form of Section 8 vouchers/certificates through the County Housing Authority to qualified low-income tenants of those rehabilitated units, to assure housing affordability. The Community Development Department will manage the program, making inspections, overseeing contractor bidding and negotiation, determining tenant income and approving all fund disbursements. The CHIP Loan Committee (the Mayor, Finance Director, Community Development Director, and Building and Housing Director) will select the projects to be funded. For this program HUD Page 2, Item 28 Meeting Date 9/24/85 has developed a cash management system, with a central office releasing funds on a project progress payment basis, via an electronic transfer mechanism. Project set-up and completion documents must be submitted to HUD detailing the projects to be rehabilitated, the tenants assisted, and the amount of the loans. Separate escrow accounting records must be kept of Rental Rehabilitation funds and non-Rental Rehabilitation funds. U. S. Escrow is currently the only escrow company providing services for the Rental Rehabilitation program. The agency currently provides these services to several cities throughout the State. U. S. Escrow will charge all costs for services to the borrowers of Rental Rehabilitation funds. The agreement attached to the resolution outlines the services that will be provided to the City on behalf of those borrowers. In a separate, but related issue, the City must appropriate the FY 1985-86 Rental Rehabilitation funds. Once these funds are appropriated and once an agreement with U. S. Escrow is approved, the City can begin making the Rental Rehabilitation loans. No loans have been made to date, due to the unavailability of the Section 8 vouchers from the County. These vouchers are now available. FISCAL IMPACT: There are no costs to the City for contracting with U. S. Escrow. The FY 1985-86 Rental Rehabilitation funds of $59,000 will be appropriated to Account #642-6420-RG02. WPC 1792H by the City Council of Chula Vista, California Dated f' .Y.1'( COUNCIL AGENDA STATEMENT Item 28 Meeting Date 9/24/85 ITEM TITLE: a. Resolution /2 /15/Approving an agreement with United States Escrow with regard to the performance of services for the City' s Rental Rehabilitation Program b. Resolution /*?/ Appropriating FY 1985-86 Rental Rehabilitation Program funds (T SUBMITTED BY: Community Development Director E: BY: Executive Directo (4/5ths Vote: Yes X No ) The City has received $120,800 from the U. S. Department of Housing and Urban Development (HUD) for a City approved Rental Rehabilitation Program to increase the supply of standard rental housing units affordable to lower income households. Under the program regulations, the City is required to collect and report data to HUD relating to properties rehabilitated and tenants assisted, manage and disburse grant funds and private funds and process loan applications. United States Escrow, an escrow corporation, has the experience and expertise to perform these duties, at no cost to the City. In a related matter, the Council approved the Rental Rehabilitation Program for FY 1985-86 and must now appropriate the FY 1985-86 program funds. RECOMMENDATION: That the Council adopt the resolutions approving an agreement with United States Escrow to provide services for the Rental Rehabilitation Program and appropriating Rental Rehabilitation funds for FY 1985-86. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The City's Rental Rehabilitation Program uses a dual approach to increase the supply of rental housing. It provides a 10-year deferred forgivable loan, at 0% interest, of an amount not to exceed $5,000 per unit or 50% of the cost, for rehabilitation assistance to private property owners of substandard multi-family units occupied by lower-income families. It also provides rental subsidies, when available, in the form of Section 8 vouchers/certificates through the County Housing Authority to qualified low-income tenants of those rehabilitated units, to assure housing affordability. The Community Development Department will manage the program, making inspections, overseeing contractor bidding and negotiation, determining tenant income and approving all fund disbursements. The CHIP Loan Committee (the Mayor, Finance Director, Community Development Director, and Building and Housing Director) will select the projects to be funded. For this program HUD Page 2, Item 2 8 Meeting Date 9/24/85 has developed a cash management system, with a central office releasing funds on a project progress payment basis, via an electronic transfer mechanism. Project set-up and completion documents must be submitted to HUD detailing the projects to be rehabilitated, the tenants assisted, and the amount of the loans. Separate escrow accounting records must be kept of Rental Rehabilitation funds and non-Rental Rehabilitation funds. U. S. Escrow is currently the only escrow company providing services for the Rental Rehabilitation program. The agency currently provides these services to several cities throughout the State. U. S. Escrow will charge all costs for services to the borrowers of Rental Rehabilitation funds. The agreement attached to the resolution outlines the services that will be provided to the City on behalf of those borrowers. In a separate, but related issue, the City must appropriate the FY 1985-86 Rental Rehabilitation funds. Once these funds are appropriated and once an agreement with U. S. Escrow is approved, the City can begin making the Rental Rehabilitation loans. No loans have been made to date, due to the unavailability of the Section 8 vouchers from the County. These vouchers are now available. FISCAL IMPACT: There are no costs to the City for contracting with U. S. Escrow. The FY 1985-86 Rental Rehabilitation funds of $59,000 will be appropriated to Account #642-6420-RG02. WPC 1792H S f � by the. Cidy :,ourl,Mcl of Chula Vista C.7.1 Dated -_. ,tinxed," crow 8121 E. FLORENCE AVENUE • DOWNEY, CALIFORNIA 90240 • (213)927-6686 1330 BROADWAY, SUITE 1429 • OAKLAND,CALIFORNIA 94612 • (415)763-9833 2667 CAMINO DEL RIO SOUTH, SUITE 259 • SAN DIEGO, CALIFORNIA • (619)297-2922 October 3 , 1985 City of Chula Vista 276 Fourth Avenue Chula Vista, CA 92010 Attention: Jennie M. Fulasz , CMC City Clerk Dear Ms . Fulasz : Enclosed please find a fully executed copy of the services agreement between the City of Chula Vista and United States Escrow for the Rental Rehabilitation Program. We look forward to working with the City of Chula Vista in the implementation of this new HUD Program in the upcoming year. Si, - - , 10( wi G.ry M. Parsons Vice President Enclosure cc : Gayle Bloomingdale e C: tif'= .m C-1 n +- cn