2011-27657 Reso 2011 -27657
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AMENDMENT NO. 3 TO THE AGREEMENT
BETWEEN THE STATE OF FLORIDA DEPARTMENT OF COMMUNITY AFFAIRS
(DCA) AND THE CITY, DATED NOVEMBER 24, 2009, FOR THE ALLOCATION OF
NSP1 FUNDS; AND ALSO APPROVING AND AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AMENDMENT NO. 5 TO THE RELATED
AGREEMENT BETWEEN THE CITY AND MIAMI BEACH COMMUNITY
DEVELOPMENT CORPORATION (MBCDC), DATED JANUARY 21, 2010, FOR
THE ALLOCATION OF NSP1 FUNDS; SAID AMENDMENTS EXTENDING THE
RESPECTIVE TERMS OF EACH AGREEMENT TO COINCIDE WITH THE
EXPIRATION DATE OF THE PROGRAM ON MARCH 1, 2013.
WHEREAS, on July 31, 2008, the United States Congress enacted the Housing and
Economic Recovery Act of 2008, thereby creating the Neighborhood Stabilization Program 1
(NSP1), which directed the Department of Housing and Urban Development (HUD) to allocate $3.93
billion to states and units of local government as emergency assistance for the purchase and
redevelopment of abandoned and foreclosed homes; and
WHEREAS, on March 18, 2009, the City approved Resolution No. 2009 - 27039, approving
the City's planned use of and application of NSP1 funds to purchase and rehabilitate one or more
foreclosed or abandoned multi - family buildings to be made available as rental housing properties for
income qualified households; and
WHEREAS, the City was awarded a total of $9,305,268 in NSP1 funds through several
allocations, and the State of Florida Department of Community Affairs (DCA) is the entity managing
HUD's NSP1 allocation to the City of Miami Beach; and
WHEREAS, on September 9, 2009, the City approved Resolution No. 2009 - 27175,
approving the Federally - funded NSP1 Subgrant Agreement between DCA and the City; said
Agreement was executed on November 24, 2009, in the amount $2,549,551, which was amended to
include the next allocations in the amounts of $4,755,717 and $2,000,000 awarded on March 24,
2010, and July 30, 2010, respectively; and
WHEREAS, the expiration date of the NSP1 Subgrant Agreement is November 23, 2011;
and
WHEREAS, the City, after conducting a competitive process, awarded $2,376,181.53 of the
initial allocation ($2,549,551 less the City's allowable $173,369.47 administration funds) to Miami
Beach Community Development Corporation (MBCDC), which was also approved by the City on
September 9, 2009, per Resolution No. 2009 - 27194, said Agreement was executed on January 21,
2010, in the amount of $2,376,181.53, and was amended to include the next allocations, in the
amounts of $4,432,328 and $1,864,000; executed on July 21, 2010 and July22, 2010, respectively;
and
WHEREAS, the expiration date of the MBCDC Agreement is July 20, 2011; and
WHEREAS, while 82% of the NSP1 funds allocated to MBCDC have been expended,
current economic and banking conditions have impacted MBCDC's ability to obtain construction
lines of credit and have delayed completion of the contractually required activities; and
WHEREAS, DCA/NSP1 representatives have informed City staff that the majority of its
NSP1 sub - recipients are likewise experiencing similar delays, and have also requested extensions
of time to expend funds; and
WHEREAS, the Administration hereby recommends and requests amending the end date of
both the NSP1 Subgrant Agreement and the MBCDC Agreement, so that they are co- terminous and
both expire on March 1, 2013, in accordance with the four year NSP1 expenditure plan established
by HUD; and
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve
and authorize the Mayor and the City Clerk to execute Amendment No. 3 to the Agreement
between the State of Florida Department of Community Affairs and the City, dated November 24,
2009, for the allocation of NSP1 funds; and also approve and authorize the Mayor and City Clerk
to execute Amendment No. 5 to the related Agreement between the City and Miami Beach
Community Development Corporation, dated January 21, 2010, for the allocation of NSP1 funds;
said amendments extending the respective terms of each Agreement to coincide with the State's
DCA expiration date of the Program on March 1, 2013.
PASSED AND ADOPTED this day of / °� a 2011.
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ATTEST:
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CITY CLERK �� ���,�� t1 M a OR
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INCORP ORATED:
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APPROVED AS TO
FORM & LANGUAGE
& Fft-1 EXECUTION
1— • 11
41 City • t orne , t-
COMMISSION ITEM SUMMARY
Condensed Title:
A resolution authorizing the City Mayor and City Clerk to execute an amendment to the Federally- Funded Subgrant
Agreement for Neighborhood Stabilization Program (NSP1) dated November 24, 2009, between the City and the State of
Florida Department of Community Affairs (DCA) and the related agreement between the City and Miami Beach Community
Development Corporation, to extend the expiration date of both Agreements, to March 1, 2013 in accordance with HUD's
four year expenditure plan, and to facilitate the draw down of funds instead of a reimbursement basis.
Key Intended Outcome Supported:
Increase access to workforce or affordable housing.
Supporting Data (Surveys, Environmental Scan, etc.): Based on the 2007 Customer Satisfaction Survey, affordable
housing was a concern for 82% of those surveyed.
Issue:
Shall the City approve amendments for contract extensions with DCA and MBCDC to coincide with the State's ECA
expiration date of the program of March 1, 2013 and corresponding amendments to facilitate a draw down basis instead of a
reimbursement basis?
Item Summary /Recommendation:
The City of Miami Beach was awarded a total of $9,305,268 from HUD's Neighborhood Stabilization Program (NSP1)
through an initial allocation and two subsequent allocations. The State's Department of Community Affairs (DCA) is the
pass- through entity handling HUD's NSP1 allocation to the City of Miami Beach. On September 9, 2009, the City approved
Resolution No. 2009 -27175 approving the Federally- funded Subgrant Agreement with DCA in the amount of $2,549,551,
which was subsequently amended to include the additional allocations of NSP1 funds to the City. The expiration date of the
initial Agreement is November 23, 2011.
After conducting a duly- noticed procurement process, the City Commission awarded $2,376,181.53 of the initial NSP1
funds to Miami Beach Community Development Corporation (MBCDC), to acquire a 16 -unit building, which was also
amended to allow for the allocation of additional NSP1 funds received by the City to MBCDC which were used to acquire
two more buildings, providing a total of 60 units to be rehabilitated to assist income eligible persons, as well as stab lize
neighborhoods affected by foreclosure. The expiration date of the MBCDC Agreement for NSP1 funds is July 20, 2011.
Current economic and banking conditions have restricted MBCDC's ability to obtain construction lines of credit and have
delayed completion of the contractually required activities. After conferring with DCA/NSP1 representatives, City staff was
informed that the majority of the DCA's NSP1 sub - recipients are experiencing similar delays and have also requested
extensions of time to expend funds. In addition, many other communities have also requested and been granted
permission to draw down funds for rehabilitation activities instead of paying costs from out -of- pocket and then seeking
reimbursement. Therefore, City staff is proposing to extend both agreements (DCA/City and City /MBCDC) so that they are
co- terminus and both expire on March 1, 2013 in accordance with the four year NSP1 expenditure plan established by HUD,
and that both agreements are amended to include the option of a "draw down" of funds versus a reimbursement process to
cover the costs of rehabilitation of the projects.
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
Sign -Offs:
Department Director Assistant City Manager City Manager
AP t '�/a°> HF JMG
T:WGENDA\2011 \5 -11 -11 \NSP Agreement EXTENSION for DCA & MBCDC- SUMM.doc
m+ AGENDA ITEM C7 n
5 - l
DATE �� /
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
(r'
DATE: May 11, 2011
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AN AMENDMENT TO THE
AGREEMENT BETWEEN THE STATE OF FLORIDA DEPARTMENT OF
COMMUNITY AFFAIRS (DCA) AND THE CITY, DATED NOVEMBER 24, 2009,
FOR THE ALLOCATION OF NSP1 FUNDS; AND AN AMENDMENT TO THE
RELATED AGREEMENT BETWEEN THE CITY AND MIAMI BEACH
COMMUNITY DEVELOPMENT CORPORATION (MBCDC), DATED JANUARY
21, 2010, FOR THE ALLOCATION OF NSP1 FUNDS; SAID AMENDMENTS
EXTENDING THE RESPECTIVE EXPIRATION TERMS OF EACH
AGREEMENT TO MARCH 1, 2013, AND AMENDING BOTH AGREEMENTS
TO FACILITATE THE DRAW DOWN OF FUNDS; FURTHER AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE ANY NECESSARY
AMENDMENTS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
Resolution No. 2009 -27039 was adopted by the City Commission on March 18, 2009, approving
the City's application for and planned use of funds available through the United States
Department Of Housing and Urban Development's (HUD) Neighborhood Stabilization Program 1
(NSP1) funds for the purchase and rehabilitation of one or more multi - family buildings to be kept
as rental properties to benefit income qualified households in accordance with the NSP1
regulations, with an end goal of stabilizing neighborhoods impacted by foreclosures.
The City of Miami Beach was awarded a total of $9,305,268 in NSP1 funds through an initial
allocation and two subsequent allocations. The State's Department of Community Affairs (DCA)
is the pass- through entity handling HUD's NSP1 allocation to the City of Miami Beach.
On September 9, 2009, the City approved Resolution No. 2009 -27175 authorizing the execution
of the Federally- funded Subgrant Agreement with DCA. That Agreement for $2,549,551 was
subsequently amended to include the additional allocations in the amounts of $4,755,717 and
$2,000,000 (awarded on March 24, 2010, and July 30, 2010, respectively). The expiration date of
the initial Agreement is November 23, 2011.
After conducting a duly - noticed procurement process, the City Commission awarded
$2,376,181.53 of the initial NSP1 allocation to Miami Beach Community Development
Corporation (MBCDC) for the acquisition of a 16 -unit building. That Agreement was subsequently
NSP1 Agreement Extension with DCA & MBCDC
05/11/2011
Page 2 of 2
amended (with Commission approval) to allow for the allocation of additional NSP1 funds
received by the City to MBCDC (in the amount of $4,432,328 and $1,864,000 respectively), which
was used to acquire two more buildings, providing for a total of 60 units being rehabilitated to
assist income eligible persons, as well as stabilize neighborhoods affected by foreclosure. The
expiration date of the MBCDC Agreement for NSP1 funds is July 20, 2011.
While 82% of the NSP1 funds allocated to MBCDC have been expended, one of the highe t
expenditure rates for this program in the State, current economic and banking conditions hav
impacted MBCDC's ability to obtain construction lines of credit and have delayed completion f
the contractually required rehabilitation activities. After conferring with DCA/NSP
representatives, City staff was informed that the majority of its NSP1 sub - recipients are likewis
experiencing similar delays and have also requested extensions of time to expend funds. Man
other communities have also requested and been granted permission to draw down funds fob
-
rehabilitation activities instead of paying costs from out -of- pocket and then seeking
reimbursement. Therefore, following the instructions of the DCA staff, City staff is requesting that
the contract between DCA and the City, as well as the corresponding contract between the City
and MBCDC, be amended to extend the expiration date of the agreement. Additionally, DCA staff
also further approved contract amendments to incorporate a draw schedule for construction
rehabilitation activities to alleviate the cash flow concerns of developers. Therefore, City staff is
proposing to extend both agreements (DCA/City and City /MBCDC) so that they are co- terminus
and both expire on March 1, 2013 in accordance with the four year NSP1 expenditure plan
established by HUD, and that both agreements are amended to include the option of a "draw
down" of funds versus a reimbursement process to cover the costs of rehabilitation of the
projects.
While at this time it is expected that the remaining NSP1 funds will be expended and the
rehabilitation of the three buildings will be complete by March 31, 2012 (please see Exhibit "A" f r
project timelines), extending the expiration date of both contracts will ensure compliance an ii
prevent unnecessary requests for future extensions should they be necessary. NSP prograh
rules define completion of the projects as having completed the construction activities and havin
the affordable housing units fully occupied by qualified, income - eligible persons.
CONCLUSION
The Administration recommends that the Mayor and City Commission authorize an amendment
to both NSP1 agreements with DCA and with MBCDC, to allow for an extension of time f•r
expenditure of funds through March 1, 2013, and corresponding amendments to facilitate a dra
down basis instead of a reimbursement basis; and further authorize the Mayor and the City Cler
to execute any documentation necessary to effectuate the amendments to the agreements.
JMG /HM F /AP /rs
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