AGENDA #5c
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Information Report: Request from First Baptist Church and Manley Estates
DATE: March 4, 2002
The purpose of this report is to respond to a request from the First Baptist Church to provide funds for furnishings for its Section 202 Elderly Housing project on Park Road (please see Attachment 1).
On February 22, 1999, the Council authorized a $25,000 grant from the Housing Loan Trust Fund to the First Baptist Church to conduct a feasibility study for a HUD Section 202 Elderly Housing project. Orange County contributed $10,000 to the Church for the cost of conducting the study for a total of $35,000.
On May 10, 1999, the Council authorized an additional $10,000 from the Housing Loan Trust Fund to pay a $2,000 per month land option cost to the Pines Community Center, the current owner of the property.
In December 1999, the U.S. Department of Housing and Urban Development notified the First Baptist Church that it had received fund reservation in the amount of $3,261,300 for this project.
On May 22, 2000, the Council budgeted an additional $10,000 from the Housing Loan Trust Fund for an increase in the cost of a land option to secure the project site.
On September 11, 2000, the Council authorized an additional $100,000 grant from the Housing Loan Trust Fund to First Baptist Church and Manley Estates for land acquisition and construction costs for the project.
In total, the Town contributed $145,000 from the Housing Loan Trust Fund towards this project.
Construction of the 40-unit rental housing facility for very low income elderly households is complete.
At a public hearing on the Town budget and the Community Development and HOME Programs on January 29, 2002, Reverend J.R. Manley of First Baptist Church requested that the Town provide additional funds to First Baptist Church and Manley Estates for furnishings for its Section 202 Elderly Housing project located on Park Road. In a letter dated January 31, 2002, Ms. Ann Hanson, Managing Agent for First Baptist and Manley Estates, requested $63,326 from the Town to provide furnishings for the facility that includes office furniture, lawn equipment, and common area furnishings (please see Attachment 1).
We have reviewed sources of funds that have historically been used to fund requests from community agencies.
Community Development Funds
We have reviewed the federal Community Development regulations and confirmed with our representative from the U.S. Department of Housing and Urban Development that use of funds for furnishings or for operating expenses for an elderly facility are not eligible activities for use of these funds.
We note that the letter submitted by the Managing Agent states that the organization intends to provide a literacy center and a computer training center for the residents. The budget includes $3,000 to purchase computers and work stations for computer usage. Community Development funds could be used purchase computer equipment if a specific program were developed to support these activities. With consent of the Council we will continue to work with the Managing Agent to discuss the organization’s plans for developing these programs and determine the eligibility under the Community Development regulations. If the Church develops a literacy program, we would recommend that the Council consider this portion of the request during the 2002-2003 Community Development budget process. We have notified the Managing Agent that applications for funding are due March 1, 2002 for the 2002 -2003 Community Development program.
Housing Loan Trust Fund
The current guidelines of the Housing Loan Trust Fund do not allow funds to be used for furnishings or operating expenses. We also note that the balance of the Housing Loan Trust Fund was significantly depleted when the Council established the Revolving Acquisition Fund in January 2002.
General Fund
Due to recent reductions in the Town budget, we do not believe that there are funds available in the General Fund to fulfill this request.
HOME Program Funds
We have reviewed the HOME Program guidelines and verified with the lead staff of the Orange County HOME Consortium that use of HOME funds for furnishings and operating expenses is not an eligible activity. We note that HOME funds can be used to provide rent subsidies; however, all HOME Program funds are currently committed. If First Baptist Church would like to apply for 2002-2003 HOME Program funds for rent subsidies, an application should be submitted to the Orange County Department of Housing and Community Development by March 1, 2002. We have notified the Church of the application process for use of these funds.
RECOMMENDATION
We recommend that the Council take no action at this time. We cite the following reasons for this recommendation:
1. The use of funds to purchase furnishings and for operating expenses is not eligible under the Community Development, Housing Loan Trust Fund or HOME Program guidelines.
2. There are currently not funds available in the General Fund for furnishings or operating expenses, or the HOME Program to provide funds for rent subsidies.
With the consent of the Council, we will continue to discuss the literacy center idea with the Managing Agent to determine if Community Development funds could be used for this activity. If a program was developed, First Baptist Church and Manley Estates could submit an application for 2002-2003 Community Development funds for the project.
ATTACHMENTS
EXCEL PROPERY MANAGEMENT, INC.
________________________________________________________________________
January 31, 2002
Mr. W. Calvin Horton
City Manager
City of Chapel Hill
N. Columbia Street
Chapel Hill, NC
RE: First Baptist and Manley Estates
Dear Mr. Horton:
Enclosed for your review and consideration is our request for Council funding for First Baptist and Manley Estates which would provide for the needs of the residents who will reside in this new affordable housing community for senior adults.
This property will offer our senior residents many comforts and opportunities for the quality of life they deserve if we are able to furnish this property and cover its operating expenses during this first year of operations. The greatest over run expense is insurance expense which increased 45% over the original estimate when the property was proposed. Additional cost include tenant paid utilities and the need now to have a minimum of five telephone lines required for the elevator and security system.
Attached is a detailed operating budget for a 12 month period. As you see we will experience negative cash flow during this first year. Our budget request to HUD for the second year of operation will allow the property to operate within the funding provided by HOD for this property. HUD has indicated that they will not consider a funding increase for the first year.
1004 Bullard Court, Suite 106, Raleigh, NC 27615 - (919) 878-0522 FAX (919) 878-9962
Current funding is not sufficient to provide the needed furnishings for this building. We are requesting Council approval for funding for these needs. With the building furnished, we will be able to provide a literacy center for seniors, a computer training center and meals on wheels center for the seniors in the area.
We are available to review this request with the council and answer any questions that you may have. Thank you for the opportunity to talk with you as you consider this request to enhance this affordable housing community for the senior adults of Chapel Hill.
Sincerely,
Ann D. Hanson
Managing Agent for
First Baptist and Manley Estates
EXCEL PROPERY MANAGEMENT, INC.
________________________________________________________________________
January 31, 2002
Mr. W. Calvin Horton
City Manager
City of Chapel Hill
N. Columbia Street
Chapel Hill, NC
RE: First Baptist and Manley Estates
Dear Mr. Horton:
Enclosed for your review and consideration is our request for Council funding for First Baptist and Manley Estates which would provide for the needs of the residents who will reside in this new affordable housing community for senior adults.
This property will offer our senior residents many comforts and opportunities for the quality of life they deserve if we are able to furnish this property and cover its operating expenses during this first year of operations. The greatest over run expense is insurance expense which increased 45% over the original estimate when the property was proposed. Additional cost include tenant paid utilities and the need now to have a minimum of five telephone lines required for the elevator and security system.
Attached is a detailed operating budget for a 12 month period. As you see we will experience negative cash flow during this first year. Our budget request to HUD for the second year of operation will allow the property to operate within the funding provided by HOD for this property. HUD has indicated that they will not consider a funding increase for the first year.
1004 Bullard Court, Suite 106, Raleigh, NC 27615 - (919) 878-0522 FAX (919) 878-9962
Current funding is not sufficient to provide the needed furnishings for this building. We are requesting Council approval for funding for these needs. With the building furnished, we will be able to provide a literacy center for seniors, a computer training center and meals on wheels center for the seniors in the area.
We are available to review this request with the council and answer any questions that you may have. Thank you for the opportunity to talk with you as you consider this request to enhance this affordable housing community for the senior adults of Chapel Hill.
Sincerely,
Ann D. Hanson
Managing Agent for
First Baptist and Manley Estates