|Official site of the City of Fort Worth, Texas|
|City Council Agenda|
|COUNCIL ACTION: Approved on 6/11/2019 - Ordinance No. 23687-06-2019|
|DATE:||6/11/2019||REFERENCE NO.:||**G-19551||LOG NAME:||19SECTION 108 LOAN FUND APPRORIATION CLEANUP/CONVERSION|
|SUBJECT:||Adopt Appropriation Ordinance Correcting Certain Financial Accounts by Increasing the Estimated Receipts and Appropriations in the HUD Section 108 Loan Fund in the Amount of $28,539,931.80 (COUNCIL DISTRICTS 2 and 8)|
It is recommended that the City Council adopt the attached Appropriation Ordinance increasing the estimated receipts and appropriations in the HUD Section 108 Loan Fund (30107) up to $28,539,931.80 for appropriations in a total amount of $38,180,494.95 consisting of up to $8,811,256.73 in the Minyard Section 108 loan project, up to $2,404,908.33 in the Trinity River Master Plan, up to $7,525,315.28 in the Mercado Section 108 loan project, up to $10,498,451.46 in the Evans/Rosedale Section 108 loan project, up to $3,311,431.82 in the United Community Centers Bethlehem Center Section 108 project, and up to $4,934,984.33 in the Shamblee Library Section 108 project.
The Neighborhood Services Department is requesting that an appropriation ordinance be adopted in various projects in the HUD Section 108 Loan Fund (30107) to properly record revenue received along with interest earned or anticipated interest earned and future debt service payments related to various projects funded by the United States Department of Housing and Urban Development (HUD). These appropriations were not originally created in the MARS financial system and the corrections listed below are needed to allow for future debt service transactions and to clean up the previous financial transactions that were converted into the PeopleSoft Financial System. The corrections will allow four projects to be closed and properly record appropriations in the active projects. This M&C does not approve any further project expenditures with the exception of the Evans/Rosedale debt payments.
Section 108 of the Housing and Community Development Act of 1974 (Section 108) provides funds for loan guarantees as part of HUD's Community Development Block Grant (CDBG) program. The Section 108 Loan Guarantee Program provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and other physical development projects including improvements to increase a project's resilience against natural disasters. The funds can be used by a designated public entity to undertake eligible projects or can loaned to a third party developer to undertake eligible projects.
The adjustments in the Section 108 Loan Fund appropriations are shown in the attached table. The history of each project is described below.
TRINITY RIVER MASTER PLAN: B03000
In September 2001, the City and Fort Worth Mercado 1, L.P. began discussion regarding the development of a "Mercado" style building in the 1500 block of North Main Street. An agreement to construct the building was finalized in August 2003, and work began in October 2003. In February 2004, the developer informed the City that it was not able to secure a loan to complete the project. On August 31, 2004, the City Council accepted an assignment of the developer's construction contract with Muckleroy & Falls for the project. The LDC provided funding of $1.3 million to complete the 58,000 square foot building (M&C C-20251).
On January 10, 2006, the City Council authorized the sale of the Mercado to 11211 Katy Freeway, L.P. for $2.5 million (M& C L-14158). The sales proceeds were deposited into a Wells Fargo Bank account to use for future debt service payments. The last debt service payment of $265,000 to HUD for the project was made on July 31, 2017. The City has fulfilled its HUD Section 108 obligation and the remaining $169,575.71 was returned to the City on March 22, 2018 as CDBG program income in accordance with HUD regulations. This property is located in COUNCIL DISTRICT 2.
This appropriation request of $7,525,315.28 will allow the project to be closed out in PeopleSoft.
EVANS/ROSEDALE SECTION 108 LOAN: B06000
On November 18, 2003, the City Council authorized an expansion of the project to allow for the construction/rehabilitation of a public facility or facilities to house a public use library/research center and/or a public health center (M&C C-19859). In order to develop a catalyst project to spur development within the project footprint, the City Council authorized an amendment to the Section 108 Loan Guarantee application to redirect $6 million to construct the Shamblee Library, of which $4,934,984.33 was actually spent (City Secretary Contract No. 32336). The project is located in Council District 8, Mapsco 77K.
On February 17, 2005, the City Council adopted an appropriation ordinance for $7.5 million but did not fully appropriate debt service payments, interest payments and income (M& C G-14681). This appropriation request of $10,498,451.46 will allow appropriation conversion/cleanup and allow for future debt service transactions to be processed. The last semi-annual payment will be due in August 2020.
The remaining available balance of $3,311.431.82 was reallocated to fund the United Community Centers Bethlehem Center as explained below.
UCC BETHLEHEM CENTER: B06800
On October 25, 2016, the City Council authorized the change in use and expenditure of $600,000.00 in EDI grant funds and Section 108 Loan funds to UCC, in the form of a grant for eligible costs associated with the finish-out of the community facility commonly known as the Bethlehem Community Center located at 951 Evans Avenue (M&C C-27973). The project is located in Council District 8, Mapsco 77K.
The City has fulfilled its HUD Section 108 obligation for this project and this appropriation request of $3,311,431.82 will allow the project to be closed out in PeopleSoft.
SHAMBLEE LIBRARY: X106CL
This M&C does not request approval of a contract with a business entity.
The Director of Finance certifies that upon approval of the above recommendation, adoption of the attached appropriation ordinance, funds are available in the current operating budget of the HUD Section 108 Loan Fund.
|Submitted for City Manager's Office by:||
|Originating Department Head:||
|Additional Information Contact:||
|119SECTION 108 LOAN FUND APPRORIATION CORRECTION CLEANUP_30107_AO19.VGclean.docx|
|Section 108 Table.pdf|