AGENDA #4e

MEMORANDUM

TO:	Roger L. Stancil, Town Manager
FROM:	Loris Colclough, Interim Finance Director J.B. Culpepper, Planning Director
	Loryn Clark, Housing and Neighborhood Services Coordinator
SUBJECT:	Budget Ordinance Amendment for the Affordable Housing Fund
DATE:	September 10, 2007

PURPOSE

The purpose of this memorandum is to appropriate in accordance with North Carolina General Statutes payments received in lieu of affordable housing. Enactment of the attached budget ordinance would budget $162,000 to the revolving loan activity of the Affordable Housing Fund.

BACKGROUND

On March 26, 2007, the Council adopted a resolution to:  (1) change the name of the fund to the Affordable Housing Fund; (2) allow the Fund to be used for the acquisition of properties, renovation of properties, and to reduce the cost of housing to create affordable homeownership opportunities; and (3) require Council approval prior to providing grants of over $40,000 for renovation or homeownership assistance expenses.

The Fund was established with $150,000 from the Housing Loan Trust Fund.  Funds received by the Town for payments in lieu of affordable housing are also directed to the Affordable Housing Fund.  To date, the Town has received $428,500 for payments in lieu of affordable housing.  Of this amount, $162,000 has not been budgeted for eligible activities. 

DISCUSSION

Before using the funds received for payments in lieu of affordable housing for eligible activities, the funds must be appropriated in the Annual Budget by the Council.  We recommend allocating the funds to the revolving fund line item in the Affordable Housing Fund.  We are currently working with Orange Community Housing and Land Trust on the acquisition of several properties in the Culbreth Park neighborhood.  Access to these additional funds would assist with the purchase of the homes.

RECOMMENDATION

That Council enact the attached budget ordinance budgeting $162,000 of revenue received to the revolving fund activity in the Affordable Housing Fund.