AGENDA #10a
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Proposed Amendment to the Community Development Program
DATE: February 28, 2000
The purpose of this memorandum is to recommend amendment of the 1999 – 2000 Community Development Program.
The attached resolution amends the Community Development program and reallocates $113,000 of Community Development Program funds as follows:
EmPOWERment Inc.(Midway Business Center) $ 60,120
Neighborhood Revitalization $ 52,880
$113,000
On November 22, 1999, the Council adopted a process to amend the 1999-2000 Community Development program to reallocate Community Development funds, and scheduled a public hearing on January 10, 2000. Notice of the hearing was sent to our Community Development mailing list and was published in the Chapel Hill Herald on December 26, 1999 and January 9, 2000. The process also included review of the proposal by the Housing and Community Development Advisory Board.
Sources of funds totaling $113,000 for this amendment are:
EmPOWERment Inc.
On April 26, 1999, the Council approved a budget for the 1999 – 2000 Community Development program that included $75,000 for EmPOWERment Inc. to purchase an apartment building on Sykes Street in the Northside neighborhood. EmPOWERment has informed us that negotiations with the property owner have not been successful and that they will not need the funds for this purpose.
GOOD WORK
In 1997 – 98, the Council budgeted $38,000 of Community Development funds to GOOD WORK to create a small business development program in Chapel Hill. GOOD WORK did not maintain sufficient records to document the low- and moderate-income status of program participants, and did not establish eligibility to draw down the allocated funds. Therefore, we recommend that the Council reallocate these funds for other Community Development activities. (Note: We have entered into a contract with GOOD WORK for $10,000 for the 1999-2000 fiscal year.)
DISCUSSION
The Council held a public hearing on January 10, 2000, to receive citizen comments on how to reallocate funds. The following summarizes the requests the Council received for funding:
Will Alexander, Volunteer Chair, and Kelly Welch, Director of Community Cuisine requested that the Council fully fund their original request and budget an additional $21,500 for their adult and youth culinary skills programs (Please see Attachment 1). [Note: On April 26, 1999, the Council budgeted $16,000 of 1999-2000 Community Development funds for this program. Community Cuisine had originally requested $37,000.]
Staff Recommendation: On February 21, 2000, we received a letter from Community Cuisine withdrawing their request for funds (Please see Attachment 2). The organization recognizes that additional funds could be allocated after a positive six-month performance review. We recommend that once programs begin, we evaluate the progress and consider budgeting 2000 – 2001 Community Development funds for this activity.
Myles Presler requested $60,120 from the Town to assist with the
construction of the Midway Business Center.
Mr. Presler noted that the original request was reduced by $6,000
because EmPOWERment had received a grant from the Town of Carrboro. Mr. Presler also reported that EmPOWERment
intends to begin construction of the Midway Business Center in February (Please
see Attachment 3).
Staff Recommendation: On
November 23, 1999, the Council adopted a resolution pledging to find funds
enabling construction to move forward.
We propose to budget $60,120 as a grant for this activity. If the Council approves this amendment, we
would amend our current contract with EmPOWERment to include the additional
funds.
3. Request from the Knolls Development Association
In a letter dated January 23, 2000, the Knolls Development Association requested $17,000 of Community Development funds to remove mold from the Pine Knolls Community Center on Johnson Street. Funds were also requested to repair the roofs of three homes (Please see Attachment 4).
Staff Recommendation: We do not recommend budgeting Community Development funds to the Knolls Development Association. From 1993 through 1996, the Town worked with the Pines Community Center to purchase and rehabilitate nine homes in the Pine Knolls community as part of this program (The Pines Community Center is the legal entity that entered into Performance Agreements with the Town). The Town completed a Performance Review and determined that the program had not met the objective of homeownership. After unsuccessful negotiations with the Center to hire an administrator for the program, on January 25, 1999, the Council declared the Pines Community Center in default with the Town’s Performance Agreements, Promissory Notes and Deeds of Trust based on the following terms of the Performance Agreements:
1. “ the Center has significantly reduced its services or accessibility to Chapel Hill residents and
2. the Center has failed to render a satisfactory accounting as provided… in the Performance Agreements.”
In addition, the Department of Housing and Urban Development completed an audit of the program and concluded the following:
1. “The Town needed to improve the effectiveness of the Homeownership Program.
2. The Center did not repair houses in a timely manner.
3. The objective of homeownership was not met.”
The report also included HUD’s recommendations on how to proceed with the program:
1. “Ensure the remaining houses are repaired and sold.
2. Repay $181,000 to the Town’s Community Development program.
3. Ensure the Pines Knolls Neighborhood Revitalization Program administrator establishes effective management procedures, if the program is continued.”
The Pines Community Center repaid the Town’s funds invested in four homes and the program was terminated.
Based on our past experience, we cannot recommend allocating funds to the
Knolls Development Association.
We propose to amend the 1999 – 2000 Community Development program as follows:
Existing Proposed Revised
Budget Addition Budget
EmPOWERment (Midway Business Center) $150,000 $60,120 $210,120
Neighborhood Revitalization $132,500 $52,880 $185,380
Manager’s Recommendation: That the Council adopt the attached resolution to reallocate $113,000 of Community Development funds as follows:
EmPOWERment (Midway Business Center) $ 60,120
Neighborhood Revitalization $ 52,880
$113,000
Housing and Community Development Advisory Board’s
Recommendation: On February 22,
2000, the Housing and Community Development Advisory Board reviewed a proposed
amendment and voted 4-0 recommending that the Council approve reallocating
funds as proposed.
1. Request from Community Cuisine (p. 6)
2. February 21, 2000 letter from Community
Cuisine (p. 7)
3. Request from EmPOWERment Inc. (p. 9)
4. Request from the Knolls Development
Association (p.10)
A RESOLUTION AMENDING THE 1999 – 2000
COMMUNITY DEVELOPMENT PROGRAM (2000-02-28/R-11)
WHEREAS, on November 22, 1999, the Council adopted a process to amend the 1999 – 2000 Community Development program to reallocate $113,000 of Community Development funds; and
WHEREAS, on January 10, 2000, the Council held a public hearing to receive citizen comments on how to reallocate $113,000 of Community Development funds; and
NOW, THERFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council amends the 1999 – 2000 Community Development program to reallocate $113,000 of Community Development funds as follows:
EmPOWERment (Midway Business Center) $ 60,120
Neighborhood
Revitalization $ 52,880
$113,000
BE IT FURTHER RESOLVED that the Council authorizes the Town Manager to submit an amended 1999 – 2000 Annual Update to the Consolidated Plan to the U.S. Department of Housing and Urban Development to reflect this amendment.
This the 28th day of February, 2000.