2010-27550 Reso RESOLUTION NO. 2010 - 27550
A RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER
OR HIS DESIGNEE TO SUBMIT A GRANT APPLICATION TO THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) FOR
NEIGHBORHOOD T
S ABILIZATION PROGRAM ROUND THREE (NSP3)
FUNDS IN AN AMOUNT NOT TO EXCEED $1,475,088 FOR THE
ACQUISITION AND REHABILITATION OF ELIGIBLE PROPERTIES FOR
AFFORDABLE HOUSING FOR INCOME - ELIGIBLE RESIDENTS;
FURTHER AUTHORIZING THE APPROPRIATION OF THE ABOVE
FUNDS, THE INCURRING OF REIMBURSABLE PRE -AWARD COSTS;
AND AUTHORIZING THE EXECUTION OF ALL NECESSARY
DOCUMENTS RELATED TO THIS APPLICATION.
WHEREAS, on October 20, 2010, the City of Miami Beach received the U.S.
Department of Housing & Urban Development Notice of Formula Allocations and Program
Requirements for Neighborhood Stabilization Program Formula Grants, originally
established under the Housing and Economic Recovery Act of 2008 (the HUD Notice),
which outlines the allocation amounts, methods, and program requirements for the third
round of Neighborhood Stabilization Program funding (NSP3); and
WHEREAS, under NSP3, which is funded under the Dodd -Frank Wall Street Reform
and Consumer Protection Act, the City of Miami Beach will be granted $1,475,088 on a
formula basis; and
WHEREAS, HUD has instructed entitlement communities receiving NSP3 funds to
immediately begin to prepare and submit their action plan substantial amendments in
accordance with the HUD Notice by March 1, 2011, which should outline how the City will
carry out its NSP3 activities; and
WHEREAS, HUD encourages each local jurisdiction receiving an allocation to
carefully consider its administrative capacity to use the funds within the statutory deadline
and therefore, the HUD Notice grants permission to jurisdictions receiving a direct
allocation of NSP3 funds to incur pre -award costs as if they were preparing to receive their
first allocation; and
WHEREAS, NSP3 grantees will be allowed to incur costs necessary to develop the
NSP3 substantial action plan amendment and undertake other administrative actions
necessary to receive its grant, prior to the costs being included in the final plan; and
WHEREAS, a formal application showing the planned use of the funding is due to
HUD by March 1, 2011; and
WHEREAS, the Administration requests authorization to submit a grant application
to HUD for NSP3 funds in an amount not to exceed $1,475,088 for the acquisition and
rehabilitation of eligible properties for affordable housing for income - eligible residents, and
further authorize the appropriation of the funds allow the incurring of reimbursable
funds,
9 re-
p
award costs, and authorize the execution of all necessary documents related to this
application.
NOW, THEREFORE, BE IT RESOLED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby
approve the City Manager or his designee to submit a grant application to the U.S.
Department of Housing and Urban Development for Neighborhood Stabilization Program
Round Three funds in an amount not to exceed $1,475,088 for the acquisition and
rehabilitation of eligible properties for affordable housing for income - eligible residents;
further authorizing the appropriation of the above funds, the incurring of reimbursable pre -
award costs, and authorizing the execution of all necessary documents related to this
application.
Passed and adopted this 17+1 day of 11 cve14 (cr , 2010.
AY R
Matti Herrera Bower
ATTEST:
4( tV d
CITY CLERK
Robert Parcher APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
f AUorney%\ J D te
V.,:.\\--
COMMISSION ITEM SUMMARY
Condensed Title:
A resolution authorizing the City Manager or his designee to submit a grant application to US HUD for NSP3 entitlement funds in an
n not exceed 088 for the acquisition and rehabilitation of eligible properties for affordable housing for income-eligible
amount of to e c d 1 475
q 9 P P 9 9
residents; authorizing the appropriation of the NSP3 funds, the incurring of reimbursable pre -award costs, and authorizing the
execution of all necessary documents related to this application.
Key Intended Outcome Supported:
Increase access to workforce or affordable housing.
Supporting Data (Surveys, Environmental Scan, etc.): Based on the 2009 Customer Satisfaction Survey, 38% of residents
rated availability of workforce housing as acceptable /the right amount.
Issue:
Shall the City submit its grant application for NSP3 entitlement funds, appropriate the use of the funds, and incur allowable pre -award
costs pursuant to HUD rules?
Item Summary /Recommendation:
On October 20, 2010, the City received the U.S. Department of Housing & Urban Development Notice of Formula Allocations and
Program Requirements for Neighborhood Stabilization Program Formula Grants (the HUD Notice), which outlines the allocation
amounts, methods, and program requirements for the third round of Neighborhood Stabilization Program funding (NSP3). Under
NSP3, the City will be granted $1,475,088 on a formula basis. HUD has instructed entitlement communities receiving NSP3 funds to
immediately begin to prepare and submit their "action plan substantial amendments" (Plan) for their grant applications due to HUD by
March 1, 2011. The City's Plan should outline how we will carry out the NSP3 activities in the context of a comprehensive plan for the
community's vision of how it can make its neighborhoods not only more stable, but also more sustainable, inclusive, competitive, and
integrated into the overall metropolitan fabric, including access to transit, affordable housing, employers, and services. HUD
encourages each local jurisdiction receiving an allocation to carefully consider its administrative capacity to use the funds within the
statutory deadline. The HUD Notice grants permission to jurisdictions receiving a direct allocation of NSP3 funds to incur pre -award
costs as if they were preparing to receive their first allocation. Therefore, NSP3 grantees will be allowed to incur costs necessary to
develop the NSP3 substantial action plan amendment and undertake other administrative actions necessary to receive its grant, prior
to the costs being included in the final plan. HUD has determined that an amount of up to ten (10) percent of the NSP3 grant may be
used for general administrative and planning activities.
NSP3 - eligible strategies for the use of funds are:
(A) Establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential
properties, including such mechanisms as soft - seconds, loan Toss reserves, and shared - equity loans for low- and
moderate - income homebuyers.
(B) Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in
order to sell, rent, or re- develop such homes and properties.
(C) Establish and operate land banks for homes and residential properties that have been foreclosed upon.
(D) Demolish blighted structures
(E) Redevelop demolished or vacant properties as housing.
The Administration will be developing the City's recommended strategy for use of the funds in order to submit a timely
amendment.
The Administration requests authorization to submit a grant application to HUD for NSP3 funds in an amount not to exceed $1,475,088,
for the acquisition and rehabilitation of eligible properties for affordable housing for income eligible residents, and further authorize the
appropriation of the funds, allow the incurring of reimbursable pre -award costs, and authorize the execution of all necessary
documents.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Funds: Amount Account Approved
1
NSP 2
OBPI Total
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Anna Parekh x7260
Sign -Offs:
Department Director ista t City Manager A C' y Mana • er
Ner2M17 ILIWPAAVEMSIKVIIMPLIMP741
T:\AGENDA\2009 \November 17 \Consent \NSP3 Pre - Award ` mary.do'
A GENDA ITEM 7
MIAMI BEACH //
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City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Ma •'' -t i H rrera Bower and Memb-rs •f the City Commission
I ,1• 4
FROM: Jorg- ► . Gonzalez, City Manager 4"
DATE: November 17, 2010
SUBJECT: A RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER OR HIS
DESIGNEE TO SUBMIT A GRANT APPLICATION TO THE U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT (HUD) FOR NEIGHBORHOOD
STABILIZATION PROGRAM ROUND THREE (NSP3) FUNDS IN AN AMOUNT NOT
TO EXCEED $1,475,088 FOR THE ACQUISITION AND REHABILITATION OF
ELIGIBLE PROPERTIES FOR AFFORDABLE HOUSING FOR INCOME - ELIGIBLE
RESIDENTS; FURTHER AUTHORIZING THE APPROPRIATION OF THE ABOVE
FUNDS, THE INCURRING OF REIMBURSABLE PRE -AWARD COSTS; AND
AUTHORIZING THE EXECUTION OF ALL NECESSARY DOCUMENTS RELATED
TO THIS APPLICATION.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
The Housing and Economic Recovery Act of 2008 provided for the development of certain
programs to help stabilize neighborhoods and communities impacted by the high rate of
foreclosures. With a goal of reducing blight created from abandoned properties, the first round
of the Neighborhood Stabilization Program (NSP) allocated funds through a formula basis to
help communities address this issue. Each community developed a strategy to use the funds
within specifically delineated program areas. The City chose to allocate its formula funds
(provided to the City via the State) for the purchase of foreclosed multi- family housing. This
approach was practical since the majority of our housing units are multi - family, but also allowed
for us to expend the funds much quicker than other communities whose strategy involved
multiple individual single family properties — resulting in a lengthy process to expend funds.
These NSP1 funds had a very aggressive expenditure timeline and, as a result of the City's
success in expending these funds quickly, you may recall that the State made additional
allocations to the City from the NSP1 funds they recaptured from other cities.
A total of $9.2 million was allocated to the City under NSP1, allowing for the purchase of three
foreclosed buildings. All told, the three buildings will provide 60 units of affordable housing,
including nine large units for families.
City Commission Memorandum
NSP3
November 17, 2010
Page 2
ANALYSIS
On October 20, 2010, the City of Miami Beach received the U.S. Department of Housing &
Urban Development Notice of Formula Allocations and Program Requirements for
Neighborhood Stabilization Program Formula Grants, originally established under the Housing
and Economic Recovery Act of 2008 (the HUD Notice). The HUD Notice outlines the allocation
amounts, methods, and program requirements for the third round of Neighborhood Stabilization
Program funding (NSP3). Under NSP3, which is funded under the Dodd -Frank Wall Street
Reform and Consumer Protection Act, the City of Miami Beach will be granted $1,475,088 on a
formula basis. Recipients of NSP3 funds are required to meet HUD - outlined goals and
objectives by providing decent housing, a suitable living environment, and economic
opportunity, principally for persons of low- and moderate - income.
HUD has instructed entitlement communities receiving NSP3 funds to immediately begin to
prepare and submit their action plan substantial amendments (Plan) in accordance with the
HUD Notice by March 1, 2011. The City's Plan should outline how we will carry out the NSP3
activities in the context of a comprehensive plan for the community's vision of how it can make
its neighborhoods not only more stable, but also more sustainable, inclusive, competitive, and
integrated into the overall metropolitan fabric, including access to transit, affordable housing,
employers, and services. HUD encourages each local jurisdiction receiving an allocation to
carefully consider its administrative capacity to use the funds within the statutory deadline. The
HUD Notice grants permission to jurisdictions receiving a direct allocation of NSP3 funds to
incur pre -award costs as if they were preparing to receive their first allocation. Therefore, NSP3
grantees will be allowed to incur costs necessary to develop the NSP3 substantial action plan
amendment and undertake other administrative actions necessary to receive its grant, prior to
the costs being included in the final plan. HUD has determined that an amount of up to ten (10)
percent of the NSP3 grant may be used for general administrative and planning activities; any
pre -grant administrative expenses would be funded from this percentage.
NSP3- eligible strategies for the use of funds are:
(A) Establish financing mechanisms for purchase and redevelopment of
foreclosed upon homes and residential properties, including such mechanisms
as soft - seconds, loan loss reserves, and shared - equity loans for low- and
moderate - income homebuyers.
(B) Purchase and rehabilitate homes and residential properties that have been
abandoned or foreclosed upon, in order to sell, rent, or re- develop such homes
and properties.
(C) Establish and operate land banks for homes and residential properties that
have been foreclosed upon.
(D) Demolish blighted structures
(E) Redevelop demolished or vacant properties as housing.
With regular entitlement funds, a Citizen Participation Plan must be submitted before the
entitlement community submits its annual Action Plan to HUD. To expedite the process and to
i
City Commission Memorandum
NSP3
November 17, 2010
Page 3
ensure that the NSP3 grants are awarded in a timely manner, while preserving reasonable
citizen participation, HUD is waiving the requirement that NSP3 grantees follow its citizen
participation plan for this substantial amendment. HUD is shortening the minimum time for
citizen comments and requiring the substantial amendment or abbreviated plan to be posted on
the grantee's official Web site as the materials are developed, published, and submitted to HUD.
Proposed action plan amendments or abbreviated plans must be published via usual methods
and on the Internet for no less than 15 calendar days of public comment.
Under NSP3, and unlike under NSP1, grantees must use the HUD Foreclosure Need Web site
to submit to HUD the locations of its NSP3 areas of greatest need. On this site, HUD provides
estimates of foreclosure need and a foreclosure - related needs score at the Census Tract level.
The NSP3 expenditure timelines are tighter than under NSP1. HUD is requiring that 50 percent
of the allocation be expended within two years of receipt of the funds and 100 percent of the
allocation within three years of receipt of the funds or HUD will recapture and reallocate the
amount of funds not expended or provide for other corrective action(s) or sanction. A grantee
will be deemed by HUD to have received its grant at the time HUD signs its grant agreement. At
this time, the City Administration has not developed a recommendation on the strategy for use
of these funds, pending further review of eligibility criteria. As the City's proposed action plan for
use of NSP3 funds is developed, the Administration will bring the recommendation to the City
Commission for discussion, review and approval.
A copy of the 27 -page notice from HUD for the NSP3 program is available, should you like a
copy.
CONCLUSION
The Administration requests authorization to submit a grant application to HUD for NSP3 funds
in an amount not to exceed $1,475,088 for the acquisition and rehabilitation of eligible
properties for affordable housing for income - eligible residents, and further authorize the
appropriation of the funds, allow the incurring of reimbursable pre -award costs, and authorize
the execution of all necessary documents related to this application.
JMG /HMF /AP