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HomeMy WebLinkAbout4.04 Neighbrhd Stabil Program~FDU~~~ CITY CLERK ~~ X11 File # ^®©~-~~ ._' -~ s~ ~~ ~C'~Tr„~r~~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: July 7, 2009 SUBJECT: Consortium Agreement with the County of Alameda and cities within the County for the Purpose of Submitting an Application to the Department of Housing and Urban Development for the Neighborhood Stabilization Program, Phase 2. Report Prepared by John Lucero, Housing Specialist ATTACHMENTS: 1) Information on the Neighborhood Stabilization Program, Phase 2 (NSP2). 2) Map of Qualified Census Tracts in Alameda County for NSP2 Funding. 3) Resolution Authorizing the City Manager to Enter Into a Consortium Agreement with the County of Alameda and cities within the County for the Purpose of Submitting an Application to the Department of Housing and Urban Development for the Neighborhood Stabilization Program- Phase 2 Created Through the American Recovery and Reinvestment Act of 2009 with the Consortium Agreement attached as Exhibit A. RECOMMENDATION: Adopt a Resolution Authorizing the City Manager to Enter into a Consortium Agreement with the County of Alameda and cities within the County far the Purpose of Submitting an Application to the Department of Housing and Urban Development for the Neighborhood Stabilization Program- Phase 2 Created through the American Recovery and Reinvestment Act of 2009. FINANCIAL STATEMENT: There is no financial impact to the City of Dublin by entering into the Consortium Agreement with the County. The County will submit the application to the NSP2 Program on behalf of all the Consortium member jurisdictions and then run the Program on behalf of the cities should funds be granted. ------------------------------------------------------------------------------------------------------------- COPY TO: Page 1 of 3 ITEM NO. ~ • '~" K: ISta,~j'Reports- PC and CCI20091CCINSP-2 7-7-091CCSR 7-7-09.doc PROJECT DESCRIPTION: The Neighborhood Stabilization Program (NSP) was originally signed into law by former President Bush on July 30, 2008 as part of the Housing and Economic Recovery Act (HERA). The Program provides targeted assistance to state and local governments to acquire and redevelop abandoned and/or foreclosed homes and residential properties that might otherwise become sources of blight within their communities. While the Alameda County Urban County received an allocation in the 2008 funding, Dublin was assigned a low priority area by the Alameda County Housing and Community Development Department (HCD), and as such was not eligible for the first round funding. In February of 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA), which authorized an additional $2 billion nationwide for a second round of NSP which maybe used for the same purposes as provided in the original NSP Program. In early May, HUD issued a Notice of Funding Availability and Program Guidelines for the NSP Round 2 (NSP2) funding (Attachment 1). Unlike the first round of NSP, allocation of NSP2 funding is competitive at the national level through the Department of Housing and Urban Development (HUD). The minimum application amount is $5 million and the recipient of NSP funds must deliver 100 productive units within 3 years. Unlike the first round, several more cities within Alameda County are qualified to apply for NSP2, including a portion of the City of Dublin, as shown on Attachment 2. NSP2 program has developed a set foreclosure related risk scores to designate if census tracts meets the minimum threshold for NSP2 funding. HUD's criteria for determining foreclosure risk draws upon neighborhood characteristics that are estimated to have high level of risk for foreclosure, notably a concentration of loans made between 2004 and 2007 that were determined to have been high cost relative to other loans made at the same time, highly leveraged loans, which are loans where the mortgage-to-income ratio is very high, falling home values and both the average unemployment rate for the County in 2008 and the change in average unemployment rate between 2007 and 2008. The qualifying threshold for the competition is an average index score of 18. Alameda County had determined that many of the cities in the County fit into this category, including four census tracts in Dublin (4501, 4504, 4505, and 4507.21). Alameda County Program Concept Staff met with representatives of Alameda County and other Alameda County cities in early June to discuss the potential of submitting a joint application to HUD for Round 2 NSP, with the intention of establishing a "consortium" or collaborative effort in order to be more competitive in the funding application. There is a very short turnaround on the application deadline of July 17, 2009. The funding application requires that participating entities of a joint application enter into a consortium agreement to establish the broad terms of participating. The discussions with the County and other jurisdiction representatives have focused on these broad parameters, should the Consortium receive competitive NSP2 funding: • Alameda County HCD would serve as the lead for purposes of submitting the application, preparing subsequent contractor selection procedures (including potential additional Request for QLialifications/Proposals (RFQ/RFP) for non-profit developers to acquire and rehabilitate foreclosed properties, completing required environmental review, and entering into sub-recipient agreements with non-profit developers; • A pool of non-profit developers will be selected, through either the previously held RFQ/RFP process or an additional one to be conducted subsequent to award of funds, that will acquire and rehabilitate foreclosed upon properties, or vacant and abandoned properties; Page 2 of 3 • 25% of the NSP2 funds must be used to serve households at very low income (50% of the Area Median Income). Units renovated at these levels will be offered as rental units; • The remainder of funds will be used to serve lower income households as first-time homeownership opportunities; • Because funds must be committed in a short time-frame (50% within 24 months) and 100 units must be completed in the Program, funds will be released on a first-come, first-served basis to the non-profit partners; • Non-profits will collaborate with local city staff to ensure that up-to-date foreclosure data and other local housing issues are communicated to the non-profits; and • The County will enter Consortium Agreements with the cities of Dublin, Emeryville, Alameda, San Leandro, Newark, Pleasanton, Livermore, Fremont, Hayward, Pleasanton, and Union City. • The program guidelines and criteria for making decisions on first time homebuyer loans and where homes would be purchased will be developed should the funds be granted, therefore, it is unknown at this time the level of Dublin's participation in the program. The Resolution accompanying this report (Attachment 3) authorizes the City Manager to enter into the Consortium Agreement (Exhibit A to Attachment 3) with Alameda County and includes these terms: • The purpose of the Consortium is to submit a joint application for NSP2 Program grant funds; • Alameda County HCD will serve as lead member and enter into the standard agreement with HUD should the Consortium be funded; • Alameda County HCD will serve as the program manager, and administer the funds on behalf of the Consortium; • Each member city of the Consortium agrees to execute a funding agreement with the County by December 1, 2009 should the Consortium be funded, with greater detail on program requirements and timetables for completion of NSP2 activities; • The County will undertake required environmental review for any funded activity; and • The term of the agreement is until HUD either denies the application or all NSP2 funds are expended and activities are completed, whichever is earlier. The Resolution pertains to entering into a Consortium Agreement with the County of Alameda and cities within the County in order to apply for Neighborhood Stabilization Program Round 2 ("NSP2") funds made available when President Obama signed the stimulus package in February 2009. Due to the very tight timeframe on the release of the funding announcement and HUD's deadline for applications of July 17, 2009, Staff is recommending the City Council adopt the attached Resolution so that the City of Dublin may participate in the funding application. RECOMMENDATION: Staff recommends that the City Council adopt a Resolution Authorizing the City Manager to Enter Into a Consortium Agreement with the County of Alameda and cities within the County for the Purpose of Submitting an Application to the Department of Housing and Urban Development for the Neighborhood Stabilization Program- Phase 2 Created Through the American Recovery and Reinvestment Act of 2009. Page 3 of 3 ~~~ 6/11/2009 Printer-friendly page from www.h... This page is located on the U.S. Department of Housing and Urban Development's Homes and Communities Web site at http: //www.hud.gov/offices/cod/co mmunitvdevelopment/programs/neighborhoodspg/index.cfm. Neighborhood Stabilization Program Grants On May 4, HUD issued two NOFAs for ,.~- the second round of NSP program funding, appropriated by the Recovery Act. There will be two NSP2 competitions. Under the program round in this notice, states, local WIlEC1OSEU. governments, non-profits and a "" consortia of non-profit entities will compete for up to $1.93 billion of NSP2 funds to carry out neighborhood stabilization programs to combat the effects of home foreclosures. Applications for NSP2 program funds will be due July 17, 2009. See NSP2 NO FA for details. Introduction Information by State ~] Esta paging en espanol Print version NSP2-Correction NO FA - NSP2 - NSP Foreclosure Need Map - NSP-TA - NSPI The Neighborhood Stabilization Program (NSP) was - NSP1 Federal Register Bridge Notice -Coming Soon established for the purpose of stabilizing - NSP1 Frequently Asked coml'rx.lnities that have suffered from foreclosures Questions and abandonment. Through the purchase and - Contact Us redevelopment of foreclosed and abandoned homes and residential properties, the goal of the program is being realized. NSP1, a term that references the NSP funds authorized under Division B, Title III of - Requirements the Housing and Economic Recovery Act (HERA) of - Policy Guidance 2008, provides grants to all states and selected - NSP Contacts local governments on a formula basis. NSP2, a - Program Management term that references the NSP funds authorized Resources under the American Recovery and Reinvestment Act (the Recovery Act) of 2009, provides grants to states, local governments, nonprofits and a consortium of nonprofit entities on a competitive basis. The Recovery Act also authorized HUD to establish NSP-TA, a $50 million allocation made available to national and local technical assistance providers to support NSP grantees. NSP1 Under NSP1, HUD allocated $3.92 billion on a formula basis to 309 grantees including 55 states and territories and 254 selected local governments. The program was designed to stabilize communities across America hardest hit by foreclosures. Grant agreements for these funds have already been signed. NSP2 Under NSP2, HUD allocated $1.93 billion on a competitive basis to states, local governments, and non profit organizations. The program objectives and eligible uses did not change under the Recovery Act, but the allocation process and some regulations on the funds have changed. The deadline to apply for NSP2 funding is )uly 17, 2009. See NSP2 NOFA for details. hud.gov/utilities/print/print2.cfm?... Attachment 1 ~~ 1 6/11/2009 Printer-friendly page from www.h... NSP-TA Under NSP-TA, HUD allocated $50 million on a competitive basis to TA providers supporting HUD's community development program grantees and subrecipients. The NSP-TA program is open to both national and local TA providers. Applications are currently being reviewed, but new applications are no longer being accepted. Nature of Program NSP is a component of the Community Development Block Grant (CDBG). The CDBG regulatory structure is the platform used to implement NSP and the HOME program provides a safe harbor for NSP affordability requirements. NSP grantees develop their own programs and funding priorities. However, NSP grantees must use at least 25 percent of the funds appropriated for the purchase and redevelopment of abandoned or foreclosed homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of the area median income. In addition, all activities funded by NSP must benefit low- and moderate-income persons whose income does not exceed 120 percent of area median income. Activities m>ay not qualify under NSP using the "prevent or eliminate slums and blight" or "address urgent community development needs" objectives. Eligible Uses NSP funds may be used for activities which include, but are not limited to: • Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties; • Purchase and rehabilitate homes and residential properties abandoned or foreclosed; • Establish land banks for foreclosed homes; • Demolish blighted structures; • Redevelop demolished or vacant properties Requirements There are a variety of statutory and regulatory limitations that appy to NSP. Allocations awarded under NSP1 and NSP2 are restricted to the same eligible uses listed above, but NSP I awards are distributed on a formula basis while NSP II awards are distributed on a competitive basis. Please see links above for details on NSP I and NSP II. Contact Us If you would like additional information on the program please use this form to contact a HUD NSP Representative. To view frequently asked questions and responses visit this page. Content current as of it June 2009 U.S. Department of Housing and Urban Development 451 7th Street, S.W., Washington, DC 20410 Telephone: (202) 708-1112 Find the address of a HUD office near vo hud.gov/utilities/print/print2.cfm?... 2/2 3~q ~ Mile ~ Source: HUD NSP2 EligibleAreas by Census Trac!: Tiger 2000, U.S. Census Bureau and Alameda County Base Map -June 1, 2009 /,+'~ Alameda County Community Development Agency l~ ~/ Housing and Community Development Department, June 1, 2009 ATTACHMENT2 3~q D Mile ~ Source: HUD NSP2 Eligible Areas by Census Trac' Tiger 2000, U.S. Census Bureau and Alameda County Base Map -June 1, 2009 Alameda County Community Development Agency Housing and Community Development Department, June 1, 2009 ATTACHMENT 2 ~t~~ RESOLUTION NO. XX-09 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONSORTIUM AGREEMENT WITH THE COUNTY OF ALAMEDA AND CITIES WITHIN THE COUNTY FOR THE PURPOSE OF SUBMITTING AN APPLICATION TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR THE NEIGHBORHOOD STABILIZATION PROGRAM -PHASE 2 CREATED THROUGH THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009. WHEREAS, the American Reinvestment and Recovery Act of 2009 includes an allocation of funds for additional activities under Division B, Title III of the Housing and Economic Recovery Act of 2008, and the additional funds are referred to as the Neighborhood Stabilization Program 2 ("NSP2"); and WHEREAS, the purpose of NSP2 is to assist in the redevelopment and rehabilitation of abandoned and foreclosed properties, and NSP2 is a component of the federal Community Development Block Grant Program ("CDBG"); and WHEREAS, on May 4, 2009, the United States Department of Housing and Urban Development ("HUD") issued a Notice of Fund Availability ("NOFA") seeking applications for grants of NSP2 funds for the purpose of carrying out neighborhood stabilization programs; and WHEREAS, the NOFA permits a consortium of nonprofit entities (which may include governmental entities, local governments, and private nonprofit organizations) to apply for NSP2 funds; and WHEREAS, the County of Alameda, (the "County"), the City of Dublin, a municipal corporation ("Dublin"), the City of Alameda, a municipal corporation ("Alameda"), the City of San Leandro, a municipal corporation ("San Leandro"), the City of Hayward, a municipal corporation ("Hayward"), the City of Union City, a municipal corporation ("Union City"), the City of Fremont, a municipal corporation ("Fremont"), the City of Newark, a municipal corporation ("Newark"), the City of Pleasanton, a municipal corporation ("Pleasanton"), the City of Emeryville, a municipal corporation ("Emeryville"), and the City of Livermore, a municipal corporation ("Livermore"), wish to form a consortium ("Consortium") for the purpose of submitting an application to HUD for NSP2 funds and together constitute the Consortium Members; and WHEREAS, Alameda County Housing and Community Development Department is designated as the lead member (the "Lead Member") of the Consortium and will submit a grant application for NSP2 funds to HUD on behalf of the Consortium in the minimum amount of Five Million Dollars ($5,000,000) (the "Application") by HUD's deadline of July 17, 2009, and will act in a representative capacity for all Consortium Members in the submission of the Application; and WHEREAS, if the Application is approved by HUD, the County will be the direct grant recipient, will execute the NSP2 grant standard agreement with HUD on behalf of the Consortium, and will administer the NSP2 grant in accordance with NSP2 program requirements; and WHEREAS, in order to submit the Application, it is necessary for each Consortium Member to enter into a Consortium Agreement with the County. Page 1 of 2 Attachment 3 ym~ cl NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Dublin hereby authorizes the City Manager to enter into a Consortium Agreement with Alameda County and the Consortium Members, attached hereto as Exhibit A, for the purpose of submitting an application for NSP2 funds. PASSED, APPROVED AND ADOPTED this 7th day of July, 2009 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST City Clerk K.•IStafJ'Reports- PC and CCI20091C,CINSP-2 ~-7-091m1s emeryville NSP2 Reso.doc Page 2 of 2 rQ= ~~ CONSORTIUM AGREEMENT ALAMEDA COUNTY NEIGHBORHOOD STABILIZATION PROGRAM 2 THIS CONSORTIUM AGREEMENT ("Agreement") is entered into as of July 7, 2009, and is between the County of Alameda, a political subdivision of the State of California (the "County"), the City of Dublin, a municipal corporation ("Dublin"), the City of Alameda, a municipal corporation ("Alameda"), the City of San Leandro, a municipal corporation ("San Leandro"), the City of Hayward, a municipal corporation ("Hayward"), the City of Union City, a municipal corporation ("Union City"), the City of Fremont, a municipal corporation ("Fremont"), the City of Newark, a municipal corporation ("Newark"), the City of Pleasanton, a municipal corporation ("Pleasanton"), the City of Emeryville, a municipal corporation ("Emeryville"), and the City of Livermore, a municipal corporation ("Livermore"). Each of the parties to this Agreement is a "Member." Alameda, Dublin, Emeryville, Fremont, Hayward, Livermore, Pleasanton, Newark, San Leandro, and Union City are the "Cities". RECITALS A. The American Reinvestment and Recovery Act of 2009 includes an allocation of funds for additional activities under Division B, Title III of the Housing and Economic Recovery Act of 2008. The additional funds are referred to as the Neighborhood Stabilization Program 2 ("NSP2"). The purpose of NSP2 is to assist in the redevelopment and rehabilitation of abandoned and foreclosed properties. NSP2 is a component of the federal Community Development Block Grant Program ("CDBG"). B. On May 4, 2009, the United States Department of Housing and Urban Development ("HUD") issued a Notice of Fund Availability ("NOFA") seeking applications for grants of NSP2 funds for the purpose of carrying out neighborhood stabilization programs. The NOFA permits a consortium of nonprofit entities (which may include governmental entities, local governments, and private nonprofit organizations) to apply for NSP2 funds. C. Each Member of this Agreement is either a governmental entity, or a local government. D. Together, the Members have the capacity and experience to conduct an NSP2 program in Alameda County that is in compliance with NSP2 requirements (the "NSP2 Program"). E. The purpose of this Agreement is to form a consortium that will (i) apply for NSP2 funds and (ii) carry out the NSP2 Program (the "Consortium"). Page 1 of 4 EXHIBIT A TO ATTACHMENT 3 ~7 ~~ ~ The parties therefore agree as follows: AGREEMENT 1. Formation of Consortium. The parties hereby form the Consortium for the purpose of (i) preparing and submitting a joint application for a grant of NSP2 funds in support of the NSP2 Program, and (ii) jointly carrying out the NSP2 Program. 2. Lead Member. Alameda County Housing and Community Development Department is designated as the lead member (the "Lead Member") of the Consortium and is hereby authorized to submit a grant application for NSP2 funds to HUD on behalf of the Consortium in the minimum amount of Five Million Dollars ($5,000,000) (the "Application"). If the Application is approved by HUD, the Lead Member will be the direct grant recipient and will execute the NSP2 grant standard agreement with HUD on behalf of the Consortium. The Lead Member is authorized to act in a representative capacity for all Members in the submission of the Application. If the Application is approved, the Lead Member will administer the NSP2 grant in accordance with all NSP2 program. requirements and the Application. 3. Cooperative Effort. All Members shall cooperatively carry out the NSP2 Program, if funded, as defined in the Application. As part of the cooperative effort, Members may form a steering committee to provide guidance and oversight to the implementation of the NSP2 Program. Each Member shall carry out those NSP2 activities ascribed to it in the Application. 4. Funding Agreements. Each Member agrees to execute a Consortium funding agreement with the Lead Member no later than December 1, 2009, if so requested by HUD after its initial screening of the Application. The Consortium funding agreement will describe the specific activities to be carried out by the Lead Member, and the other participating Members as needed, under the NSP2 Program, the NSP2 funds allocated to the Members' activities, timetables for completion of the Members' activities, and the Members' obligation to comply with applicable NSP2 program requirements. In the event of a conflict between this Agreement and the Funding Agreements, the Funding Agreements shall prevail. 5. Environmental Review. The Members hereby authorize the County and the Cities to undertake environmental review of any NSP2 activity located within their jurisdictions as required by the National Environmental Policy Act of 1969 and related federal environmental authorities and regulations at 24 CFR part 58. The Application will not include activities outside the jurisdiction of the County or the Cities. This Agreement is not a project under the California Environmental Page 2 of 4 ~~ ~~ J f~.~ Quality Act as it is a governmental funding activity that does not involve a commitment to any specific project site (CEQA Guidelines Section 15378(b)(4)). 6. Internal Audits. The Application will include a description of the internal audit process to be carried out by Members to audit NSP2 Program activities (the "Audit Process"). Each Member shall cooperate in the Audit Process. 7. Term of Agreement. This Agreement is in effect until (i) HUD reaches a final decision to deny the Application in its entirety, or (ii) all NSP2 funds and any program income received pursuant to the Application are expended and the funded activities completed, whichever is earlier. Members may not terminate or withdraw from the Agreement while it remains in effect. 8. Amendments. No amendment or modification to this Agreement is valid unless made in writing and approved and signed by the Members. This Agreement supersedes any oral promises, representations, or other agreements with respect to the subject matter of this Agreement. 9. Remedy. The sole remedy for violation of this Agreement is the specific performance of this Agreement. Members waive their respective rights to trial by jury of any claim or cause of action arising out of this Agreement. Members have no liability for damages to one another or to any other person or entity resulting from any violation of this Agreement. 10. Approval of Agreement. By execution of this Agreement, the signatories of each Member certify and represent that this Agreement has been authorized by its governing body or authorized officer, as applicable. [Remainder of Page Intentionally Left Blank] Page 3 of 4 i xi 11. Counterparts. This Agreement maybe executed in counterparts. The parties are executing this Agreement as of the date first written above. COUNTY ALAMEDA COUNTY, a political Subdivision of the State of California Approved as to form: Approved as to form: By: City Attorney By: By: Housing Director Andrea Weddle Deputy County Counsel CITY OF DUBLIN By: Joni Pattillo, City Manager Attest: Caroline Soto, City Clerk Page 4 of 4