AGENDA #4f

 

MEMORANDUM

 

TO:                  Mayor and Town Council

           

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Request from Habitat for Humanity

 

DATE:             June 14, 2004

 

 

The purpose of this memorandum is to respond to a request from Habitat for Humanity to reallocate $19,682 of 2001-2002 Community Development funds approved for the Rusch Hollow subdivision for infrastructure construction (please see Attachment 1).  Funds were initially allocated to Habitat to purchase property for the subdivision.

 

The attached resolution would reallocate $19,682 of 2001-2002 Community Development funds to be used by Habitat for Humanity for infrastructure construction for the Rusch Hollow subdivision.

 

THE REQUEST

 

In a letter dated May 17, 2004, Habitat for Humanity Executive Director Susan Levy requested that funds previously allocated to acquire property for the subdivision be reallocated for construction of infrastructure.  The letter states that Habitat initially attempted to purchase additional land adjacent to property it already owned on Rusch Road but was unable to reach agreement with the property owners.  As stated in the letter, the Council has approved a rezoning of this property to Residential Special Standards – Conditional (R-SS-C) and has approved a special use permit for the property.  Habitat is now in the process of applying for a Zoning Compliance Permit.  Habitat expects to break ground for this project in July 2004. 

 

A supplemental letter dated June 7, 2004, notes that Habitat’s development budget for infrastructure costs has risen from $350,000 to $420,000.  The additional funds would help close the gap in infrastructure funding (please see Attachment 2).

 

BACKGROUND

 

On April 23, 2001, the Council budgeted $50,000 of 2001-2002 Community Development funds to Habitat for Humanity to acquire property for the Rusch Hollow subdivision.  Habitat intends to develop at least twelve detached single-family homes for first-time homebuyers earning less than 50% of the area median income on this site.  The Town entered into a Performance Agreement with Habitat for these funds, and $50,000 from the Housing Loan Trust Fund for predevelopment costs on June 3, 2002. 

 

To date, Habitat has used $30,318 in Community Development funds to purchase property for the Rusch Hollow development, leaving a balance of $19,682. 

 

DISCUSSION

 

Use of funds for construction of infrastructure is an eligible use of funds under the federal Community Development guidelines.  We have determined that a public hearing is not required because this request does not involve a change in the project (Rusch Road Subdivision) or the purpose, scope, location, or beneficiaries of the project.

 

If the Council approves this request, we would amend the Town’s Performance Agreement with Habitat for this project to indicate that funds would be used for infrastructure construction instead of property acquisition.  As stated in the current Performance Agreement, the Community Development funds along with the funds from the Town’s Housing Loan Trust Fund ($50,000) would be converted into deferred loans for each of the households that purchase a home.     

 

If the Council chooses not to approve this request, funds could be reprogrammed for other eligible Community Development activities.  The reprogramming process would involve a public hearing to receive citizen comments on the use of funds. 

 

No change to the project budget ordinance for the 2001-2002 Community Development Grant is needed.  That ordinance budgeted $50,000 for Habitat’s Rusch Road Subdivision.

 

RECOMMENDATION

 

Because Habitat has been unable to acquire additional property for the subdivision, we believe that it would be reasonable to use funds for the construction of infrastructure in the same project.   The additional funds would help Habitat meet the increased costs of construction for this line item in its development budget for the property.

 

We recommend that the Council adopt the attached resolution reallocating $19,682 of 2001-2002 Community Development funds for infrastructure construction for the Rusch Hollow subdivision. 

 

ATTACHMENTS

 

1.         Letter of May 17, 2004 from Habitat for Humanity (p. 4).

2.         Letter of June 7, 2004 from Habitat for Humanity (p. 21).

 

A RESOLUTION REALLOCATING $19,682 OF 2001-2002 COMMUNITY DEVELOPMENT FUNDS FOR HABITAT FOR HUMANITY TO USE FOR INFRASTRUCTURE CONSTRUCTION FOR THE RUSCH HOLLOW SUBDIVISION   (2004-06-14/ R-8)

 

WHEREAS, by Resolution 2001-04-23/R-2, the Town Council budgeted $50,000 of Community Development Block Grant Program funds to Habitat for Humanity to purchase property for the Rush Hollow subdivision; and

 

WHEREAS, on May 17, 2004, Habitat requested that the Town reallocate the balance of funds ($19,682) for construction of infrastructure on this site;

 

NOW, THEREFORE, BE IT RESOLVED that the Council of the Town of Chapel Hill authorizes reallocating $19,682 of 2001-2002 Community Development funds for infrastructure construction for the Rusch Hollow subdivision. 

 

BE IT FURTHER RESOLVED that the Council authorizes the Town Manager to amend the Town’s Performance Agreement with Habitat for Humanity to reflect this change.

 

This the 14^th day of June, 2004.