C7H-Approve One-Time Use Of Advance Drawdowns Of HOME Program FundsCOMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and City Commission of the City of Miami Beach, Florida, approving the one-time use of advance
drawdowns of HOME Program funds by Carrfour Supportive Housing to fund its Harding Village rehabilitation project to
facilitate the City's timely expenditure of U.S. HUD HOME Program affordable housing funds and avoid any recapture of the
funds by HUD; and further the Citv Manaoer. or his , to review and such draw requests.
Revitalize Key Neighborhoods, Starting with North Beach and Ocean Drive
Supporting Data (Surveys, Environmental Scan, etc.: Based on the 2014 Community Satisfaction Survey, 81oh of
residents would recommend the City to family and friends as a place to live.
Item Su mmarv/Recommendation :
The City is facing the possibility of the de-obligation/recapture of $185,272 of HOME funds by U.S. HUD based on its
September 30, 2014 expenditure deadline. This condition is related to the City's history of allocating all of its HOME funds to
Miami Beach Community Development Corporation (MBCDC). Due to that organization's inability to successfully complete
some of the proposed projects, and the City's need to cancel projects and recapture the funds, the City must adjust its
funding/spending to meet the required expenditure deadlines.
While the City traditionally manages its HUD-funded contracts on a reimbursement basis, HUD allows for advance draws.
According to the Code of Federal Regulations, 24 CFR92.502, HOME Program funds drawn from the United States Treasury
account must be expended for eligible costs within fifteen (15) days. Currently, the City policy is to reimburse Sub-recipients
after they have expended their own funds for all eligible expenses incurred under the contract with the City. The proposed
advance draw will ensure that the City does not have to surrender otherwise expiring funds to HUD and ensuring their use to
preserve much-needed affordable housing. Further, the advance amount will not exceed the value of those funds subject to
recapture ($185,272) and the documentation of the appropriate expenditure of these funds must be submitted prior to the
reimbursement of any remaining funds ($'136,280). ln addition, the City's financial interests for the full value of the award will
be secured through the execution of a 30-year mortgage to ensure the property's use as affordable housing. The mortgage is
executed at the same time as the HOME funding documents and further ensures that HUD funds are expended as required.
The Administration recommends that the Mayor and City Commission approve the one-time use of advance drawdowns of
HOME Program funds by Carrfour Supportive Housing to fund its Harding Village rehabilitation project to facilitate the City's
timely expenditure of U.S. HUD HOME Program affordable housing funds and avoid any recapture of the funds by HUD; and
further authorizing the City Manager, or his designee, to review and approve such draw requests to ensure compliance with
HUD rules.
Financial lnformation:
Source of Funds:Amount AccounUFunding
I $185,272 HOME lnvestment Partnership Funds
2
3
Total
Financial lmpact Summary:
Clerk's Office
Maria Rui/Housing & Community Development
AGET1DA fiEln C7 H
D*78 ? -/o 4/{s MIAMIBHACH 245
g MIAMIBEACH
City of Miomi Beoch, I700 Convention Center Drive, Miomi Beoch, Florido 33,l 39, www.miomibeochfl.gov
COMMISSION MEMORANDUM
TO:
FROM:
DATE: September 10,2014
SUBJECT: A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING THE ONE.TIME USE OF
ADVANCE DRAWDOWNS OF HOME INVESTMENT PARTNERSHIP
(HOME) PROGRAM FUNDS BY CARRFOUR SUPPORTTVE HOUSTNG TO
FUND ITS HARDING VILLAGE REHABILITATION PROJEGT TO
FACILITATE THE CITY'S TIMELY EXPENDITURE OF SAID FUNDS AND
AVOID ANY RECAPTURE OF THE FUNDS BY HUD; AND FURTHER
AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO REVIEW
AND APPROVE SUGH DRAW REQUESTS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
The City is a U.S. Department of Housing and Urban Development (HUD)-designated
entitlement community, as determined by the decennial census information on population
growth lag, age of housing stock, and poverty. As an entitlement community, the City qualifies
for an annual allocation under HUD's grant programs. The HOME Program was started in 1992
to provide funding specifically for affordable housing. HUD allocates these housing funds to
strengthen public/private partnerships and expand the supply of affordable housing that is
decent, safe, and sanitary.
The HOME Program has timeliness requirements regarding the expenditure of funds. HOME
funds must be committed to a project within two years of City's receipt, and expended within five
years. HUD further requires its entitlement jurisdictions to ensure that funded activities are
carried out in the defined project scope and within the timeframe allowed. The City's Action Plan
is monitored throughout the year to ensure compliance with federal regulations and progress
towards the National Objective, which stipulates that HOME-funded activities must create
housing units that benefit low- and moderate-income persons who earn at or below 807o of the
area median income (AMl).
ANALYSIS
The City is facing the possibility of the de-obligation/recapture of $185,272 of HOME funds by
HUD based on its September 30, 2014 expenditure deadline. This condition is related to the
City's history of allocating all of its HOME funds to Miami Beach Community Development
Corporation (MBCDC). Due to that organization's inability to successfully complete some of the
Jimmy L. Morales, City Manager
246
Commission Memorandum - Carrfour Advance Draw
September 10,2014
Page 2 of 3
proposed projects, and the City's need to cancel projects and recapture the funds, the City must
adjust its funding/spending to meet the required expenditure deadlines.
Carrfour Supportive Housing requested, and has been allocated, a total of $321,552 of HOME
funds for the repair/rehabilitation of its 92-unit Harding Village Apartments located at 8520
Harding Avenue. This property, which is currently occupied, provides affordable housing for
formerly homeless and low-income individuals (including veterans) but has fallen into disrepair
and is in need of rehabilitation. Carrfour will not be able to complete the project, but can perform
enough of the construction to cover the amount necessary to satisfy the expenditure
requirement. However, the time constraints are so limited that the City may need to provide an
advance draw in order that the expenditure deadline can be satisfied.
While the City traditionally manages its HUD-funded contracts on a reimbursement basis, HUD
allows for advance draws. According to the Code of Federal Regulations, 24 CFR 92.502,
HOME Program funds drawn from the United States Treasury account must be expended for
eligible costs within fifteen (15) days. Currently, the City policy is to reimburse Sub-recipients
after they have expended their own funds for all eligible expenses incurred under the contract
with the City. The proposed advance draw will ensure that the City does not have to surrender
otherwise expiring funds to HUD and ensuring their use to preserve much-needed affordable
housing. Further, the advance amount will not exceed the value of those funds subject to
recapture ($185,272) and the documentation of the appropriate expenditure of these funds must
be submitted prior to the reimbursement of any remaining funds ($136,280). ln addition, the
City's financial interests for the full value of the award will be secured through the execution of a
3O-year mortgage to ensure the property's use as affordable housing. The mortgage is executed
at the same time as the HOME funding documents and further ensures that HUD funds are
expended as required.
To ensure that all expenses are eligible, accurate, and properly reflect work completed, Housing
and Community Services (HCS) staff will require the submission of the following documentation
within 15 days of the advanced draw:
. Application and Certification for Payment AIA Document G702 and G703 (Schedule of
Values) signed by the contractor and architect, and notarized;o Any change orders or deviations from the original Scope of Work or Budget for Scope of
Work will require City Manager approval and will be submitted on an Application and
Certification for Payment AIA Document G701, signed by the contractor and architect,
and notarized;. Lien waivers from each General Contractor, contractor, andlor subcontractor for the
funds being requested will be submitted with the Application and Certification for
Payment;. Verification of payment of Davis-Bacon Wages and other labor standards, including
original, signed payroll certificates for previous work completed; ando Construction status reports as required by contract.
HCS staff will review the draw request and provide comments, notations and recommendations
on the request, including review of the back-up documentation to ensure documentation is
consistent with the Scope of Work and Budget for Scope of Work attached to the grant
agreement. lf the City finds fault with any aspect of the expenditures or documentation of such,
Carrfour will be required to cure as per the City's agreement. Failure to cure will trigger a default
and Carrfour's full repayment of all HOME funds to the City. These processes ensure that all
advance funds are expended according to HUD requirements and that the City's interests are
protected.
247
Commission Memorandum - Carrfour Advance Draw
September 10,2014
Page 3 of 3
HCS staff will require submission of copies of cancelled check(s) evidencing full payment to the
construction contractor(s) for the goods and services provided, as reflected in the draw request.
Failure to provide a cancelled check(s) will result in the withholding of any future draw request
payments. Site visits will also be performed to confirm that documentation and work completed
are consistent as well as ensure compliance with Davis-Bacon Act and other federal
expend iture req uirements.
CONCLUSION
The Administration recommends that the Mayor and City Commission approve the one{ime use
of advance drawdowns of HOME Program funds by Carrfour Supportive Housing to fund its
Harding Village rehabilitation project to facilitate the City's timely expenditure of U.S. HUD
HOME Program affordable housing funds and avoid any recapture of the funds by HUD; and
further authorizing the City Manager, or his designee, to review and approve such draw
requests to ensure compliance with HUD rules.
/MLR/ARB
T:\AGENDA\201 4\Septem ber 1 0\Carrfour Harding Village Draw Memo
248
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND THE CIry COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, APPROVING THE ONE.TIME USE OF
ADVANCE DRAWDOWNS OF HOME INVESTMENT PARTNERSHIP
(HOME) PROGRAM FUNDS BY CARRFOUR SUPPORTTVE HOUSING, tNC.
(GARRFOUR), WHICH DRAWDOWN W|LL FUND CARRFOUR'S HARDTNG
VILLAGE REHABILITATION PROJECT, FACILITATE THE CITY'S TIMELY
EXPENDITURE OF SAID FUNDS BY SEPTEMBER 30, 2014, AND AVOID
ANY RECAPTURE OF THE FUNDS BY HUD; AND FURTHER
AUTHORIZING THE CIry MANAGER, OR HIS DESIGNEE, TO REVIEW
AND APPROVE SUGH DRAW REQUESTS.
WHEREAS, the City is an entitlement recipient of HUD formula grant program funds,
including the HOME lnvestment Partnerships (HOME) Program funds; and
WHEREAS, HOME funds are used for affordable housing activities, including multi-
family rentals and flrst-time homeownership; and
WHEREAS, the City expects to continue to receive entitlement funds grant programs to
operate the City's housing and community development activities; and
WHEREAS, HOME stipulates that funds be expended within timeliness guidelines as
delineated in 24 CFR Part92, among others; and
WHEREAS, HOME funds, in the amount of $185,272 (At-Risk Funds), have not been
expended; and
WHEREAS, if the At-Risk Funds are not expended by September 30, 2014 (Expenditure
Deadline), said funds may be subject to recapture by U.S. HUD; and
WHEREAS, Carrfour Supportive Housing, lnc. (Carrfour), a not-for-profit Florida
corporation, is a registered Community Housing Development Organization (CHDO), which is
sponsoring the rehabilitation of the property located at 8520 Harding Avenue, Miami Beach, FL
(Harding Village), to be used as affordable housing; and
WHEREAS, the Carrfour Harding Village project was awarded HOME funds in the
amount of $321,552 (Carrfour HOME Loan), and can expend enough project funds to timely
satisfy the Expenditure Deadline; and
WHEREAS, in order to meet the Expenditure Deadline the City must provide Carrfour
advance draws to the extent of the At-Risk Funds; and
WHEREAS, current City policy requires funding on a reimbursement basis only; and
WHEREAS, the Administration wishes to provide necessary advance draws as needed
to satisfy the Expenditure Deadline on a one-time only basis, subject to submission by Carrfour
of all required expenditure documentation within 15 days of the receipt of said At-Risk Funds;
and
249
WHEREAS, the Carrfour HOME Loan will be divided into two separate loans, one for
$228,667 and one for $92,885, both of which will be evidenced by a HOME Program
Agreement, a Promissory Note and a Mortgage and Security Agreement, which loan documents
will provide for accountability for the use of said funds and contain restrictive covenants,
ensuring that the property will continue to be used for affordable housing; and
WHEREAS, the City Manager is the designated agent for all HUD formula grants, and
executes the grant applications, grant agreements, and other applicable HUD documents on
behalf of the City.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE C!ry OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby approve the onetime use of advance drawdowns of HOME lnvestment
Partnership (HOME) Program funds by Carrfour Supportive Housing, lnc. (Carrfour), which
drawdown will fund Carrfour's Harding Village rehabilitation project, facilitate the City's timely
expenditure of said funds by September 30, 2014, and avoid any recapture of the funds by
HUD; and further authorize the City Manager, or his designee, to review and approve such draw
requests.
PASSED AND ADOPTED this 1Oth day of September,2014.
ATTEST:
Rafael E. Granado, CITY CLERK Philip Levine, MAYOR
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
V -+Qun- srutf.r
CityAttomey'-i.'frT Dote
201/'14lSeptember 1O/Carrfour Harding Village CC Draw Reso
250