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HomeMy WebLinkAbout09-23-2004 Meeting - - ADMINISTRATIVE SERVICES AGENDA COMMITTEE ROOM - September 23,2004 1:00P.M. 1. Approve early retirement of Mr. John Bailie under the 1977 Pension Plan. 2. Approve a request from the Planning Commission, the Department of Housing & Economic Development and the Department of License & Inspections to initiate the process of rescinding the designation of the Bethlehem Local Historic District. 3. A Approve redesign of and operating principles for the Fll9ade Rehabilitation Grant Program. B. Approve new program boundaries reflected in the Statement of Program Guidelines. C. Reprogram existing economic development funds to be utilized as loan pool to fund fa~ade projects located outside "Central Business District" and additional fa~ade and exterior wall repair requests. 4. Receive as information status report regarding Laney Walker Community Development Corporation. 5. Approve two contracts for Economic Development Ombudsman (EDO) (Business Liaisons) Iriitiative subj ect to the approval of the contract by the City Attorney. 6. Motion for authorization to negotiate sale of property and purchase of Griggs School site using available federal funds. 1 I 1 ADMINISTRATIVE SERVICES COMMITIEE COMMITTEE ROOM - September 23, 2004 1:00P.M. PRESENT: Hons. Hankerson, Chairman; Grantham, Co-Chairman; Cheek and Mays, members; Steve Shepard, Attorney; Fred Russell, Interim Administrator; Warren Smith, RED Director; Doug Manning, RED Department; George Patty, Planning Director; Lena Bonner, Clerk of Commission. ABSENT: Hon. Bob Young, Mayor. Also Present: Hon. Williams, Boyles and Beard, Commissioners. 4. Receive as information status report regarding Laney Walker Community Development Corporation. Mr. Smith: We have been trying to resolve some issues regarding the management of the organization having to do with the use and investment of federal funds that were done counter to federal law. Mr. Manning: HUD officials have reviewed the files of the CHDOs and they have looked at the files concerning the construction and development of new homes in Summerfield East. There appears to have been a situation where some money was not accounted for, and we are trying to work with the organization to identify those dollars. An audit is presently being conducted and should be completed shortly. After that we have to conduct another audit to identify where the funds are or how they've been reported in relationship to dollars associated with the project. The contract required 75% of the sales proceeds to be used as a revolving fund in order to produce future homes. The balance of25% was to be used by the organization as a developers' fee. The money in question now is the 75% amount and a specific audit needs to be conducted to see what is going on. HUD has directed that we not fund any further operational expenses until the situation is resolved. Mr. Smith: After the June review by HUD, we had a finding regarding at least one issue that had to be resolved and HUD gave us a directive about an account that was opened. There was a line of credit, I think it was for, $50,000, federal money was used as collateral. $33,000 had been drawn down on that and HUD told us that was something that was illegal and not appropriate and we needed to pull that money back. They gave us other directives and there are some things that an audit can clarify in terms oflooking at 2003 and 2004 and fmding out what is happening. We talked with the Chairman about this and he recommended we give you this presentation today. At this time representatives ofthe Laney Walker Development Corporation appeared before the committee regarding the above issue. Mr. Johnson: We used the $50,000 loan as collateral to get a $50,000 loan. We were promised $50,000 in administrative funds before you came on board. They told us 1 they would give these funds to us when the new allocation came down. At that point we were in dire straits operationally so we secured a $50,000 line of credit with the understanding that when the funds were allocated, we would get a $50,000 administrative allotment. Weare now in default on that loan because they held up those funds and we canoot pay the bank back at this point. We also cannot use the rents that we have collected to continue to operate. " I I I II After further discussion, Mr. Chairman: Was the operational money withheld? Mr. Manoing: I learned that the $50,000 was to have paid to the organization to address administrative expenses. We have no written record of that and we spoke to HUD about it and they have no recollection of that as well. After this last year in many of the contracts the CHDOs were appropriated monies administratively where they should not have and it was illegal for our department to do so. Those are the 2003 contracts and they were taken back and they were revised and amended. We explained what happened there, but this was a situation that preceded thatsituation. The line of credit came out in June of2000 and in 2004 the monies that were held up is the operational money which was $1,400 per month for five months and that money was paid to the organization. We have subsequently gone into contracts with the other CHDOs once they provided the information as far as their projects, and we were doing that with Laney Walker as well until this situation came up. This came up through the HUD reVIew. Mr. Chairman: When was the $1,400 per month paid? I Mr. Manning: That was in April when the moratorium was lifted. Ms. Valerie White: We only received those funds. We expected to receive more. Mr. Johnson: We expected to receive the $50,000. Mr. Manning: The 2004 contract does not into consideration the $50,000. That's the new contract that was signed. Those contracts were pulled back and HUD found out that those contracts were illegal because there is no CHDO administrative money. There is CHDO operating money. There is $77,000 for CHDO operating and that is divided by the number ofCHDOs in the system and that's how we get to the $14,000. When we found out that those 2003 contracts were illegal, we wrote and called the CHDOs and talked to the Mayor and Commission and pulled back those contracts and re-amended the contracts to make them legal. After further discussion, Mr. Chairman: I think we need to have a meeting to help this organization resolve the situation. We are going to meet with the CHDOs individually so that if they are out of compliance, we can get them into compliance so they can continue their work. We will have a work session on that, but I want us to meet , with Laney Walker Development Corporation and the department heads involved on this issue at 10:00 on October 4. I 2 I I I Mr. Mays: I'm going to make a motion to approve those suggestions for meetings from the Chairman. Mr. Grantham: Second. Mr. Mays: For the record Laney Walker did not initiate a meeting to put anything together against RED. I asked for it to be called and we only used their facilities. Motion adopted unanimously. 5. Approve two contracts for Economic Development Ombudsman (EDO) (Business Liaisons) Initiative subject to the approval of the contract by the City Attorney. Mr. Grantham: I make a motion we approve. Mr. Mays: Second. Motion adopted unanimously. 1. Approve early retirement of Mr. John Bailie under the 1977 Pension Plan. Mr. Mays: So move. Mr. Grantham: Second. Motion adopted unanimously. 2. Approve a request from the Planning Commission, the Department of Housing & Economic Development and the Department of License & Inspections to initiate the process of rescinding the designation of the Bethlehem Local Historic District. Mr. Patty: We believe that this designation is actually an impediment to positive change in that neighborhood. It has been debated for several years and we recommend that you begin the process. Mr. Grantham: I so move. Mr. Mays: I second it. The attorney probably also needs to review the process of the designation because if it was not originally done in its full course, then you don't have a true designation anyway. Motion adopted unanimously. 3 3. A. Approve redesign of and operating principles for the Fat;:ade Rehabilitation Grant Program. B. Approve new program boundaries reflected in the Statement of Program Guidelines. C. Reprogram existing economic development funds to be utilized as loan pool to fund fat;:ade projects located outside "Central Business District" and additional fat;:ade and exterior wall repair requests. I Mr. Smith: This will expand the program and provide a little more money to do additional work. Mr. Grantham: So move. Mr. Mays: Second. Motion adopted unanimously. 6. Motion for authorization to negotiate sale of property and purchase of Griggs School site using available federal funds. Mr. Smith: We have talked with the School Board about purchasing this property and it would be converted into a mixed income housing complex with 52 units. It would help people who want to transition into becoming homeowners. Mr. Manning presented a model of the project. I After a discussion of the project, Mr. Mays: I move that we receive this as information for further study. Mr. Grantham: Second. Motion adopted unanimously. ADJOURNMENT: There being no further business, the meeting was adjourned. Lena J. Bonner Clerk of Commission nWffi I 4