HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/21/2010 - RESOLUTION 2010-076 AUTHORIZING THE CITY MANAGER T DATE: December21, 2010
STAFF: Joe Frank _
Megan Bolin
Resolution 2010-076 Authorizing the City Manager to Submit to the U.S. Department of Housing and Urban
Development an Application for the Section 108 Loan Guarantee Program.
EXECUTIVE SUMMARY
Staff has prepared an application requesting a $5 million loan pool from the Section 108 Loan Guarantee Program
offered by the U.S. Department of Housing and Urban Development(HUD). Section 108 is the loan provision of the
Community Development Block Grant (CDBG) Program, and allows communities to leverage their annual CDBG
entitlement grant and provide loans for local economic and community development projects. Eligible projects must
meet one of HUD's national objectives,and must be an eligible activity as defined by CDBG Program regulations. The
$5 million loan pool allows the City to provide smaller loans to eligible projects on a case-by-case basis. Loans are
anticipated to be at least$1 million per project.
BACKGROUND / DISCUSSION
Staff has prepared an application requesting a $5 million loan pool from the Section 108 Loan Guarantee Program
offered by the U.S. Department of Housing and Urban Development. The Application is included in its entirety as
Attachment 1. Section 108 is the loan provision of the Community Development Block Grant(CDBG) Program, and
allows communities to leverage their annual CDBG entitlement grant and provide loans for local economic and
community development projects. Eligible projects must meet one of HUD's national objectives, and must be an
eligible activity as defined by CDBG Program regulations. National objectives include the following: (1) principally
benefit low and moderate income persons; (2)aid in the elimination or prevention of slums and blight or; (3) meet an
urgent need of the community. Attachment 2 is a Section 108 Loan Program Fact Sheet that concisely explains
additional details of the program. The$5 million loan pool allows the City to provide smaller loans to eligible projects
on a case-by-case basis. Loans are anticipated to be at least$1 million per project. A minimum loan amount is not
specified in the application; however, in consideration of City resources, no more than five loans are expected.
The advantage of the Section 108 Program is that it adds another tool for the City to financially leverage non-profit or
for-profit developments that provide positive economic and social benefits to the community. The City's goal is to
provide loans for projects that add employment opportunities for low and moderate income persons.
The Section 108 Program requires the City to pledge current and future CDBG entitlement grants as collateral for any
loans made to third-party borrowers. If the borrower is not able to repay, no matter what the circumstances, the City
is still responsible to fulfill its repayment obligations to HUD. Most communities either purposefully identify their CDBG
entitlement grant as a repayment source,or dedicate other revenue such as General Fund or Tax Increment as a debt
reserve. Attachment 3 provides information on how several other communities have used the Section 108 Loan
Program. If the City has no other repayment source and is unexpectedly forced to use CDBG funds to make payments
on the Section 108 Loan, the housing and human service projects that are typically supported by CDBG may not
receive the level of funding currently allocated until the loan is repaid to HUD.
Key to this process is understanding that the application is purposefully general and non-project specific. The City's
borrowing capacity is dependent upon the amount of its CDBG entitlement grant allocated annually by Congress;
therefore, the strategy is to apply for the loan pool now, while the entitlement grant remains substantial (Fort Collins'
2010 CDBG entitlement grant was slightly greater than $1 million). If HUD agrees to the$5 million loan, the City will
have five years to distribute the money to eligible projects. Each potential project will be thoroughly evaluated for its
financial feasibility and community benefit by both the City and HUD. Due to the multiple layers of analysis and
oversight, staff is confident that only sound projects will be funded, and Section 108 will prove itself as a valuable
addition to the City's economic development toolbox.
December 21, 2010 -2- ITEM 17
FINANCIAL/ ECONOMIC IMPACTS
If Council adopts the Resolution, and HUD accepts the City's application, the City will have a $5 million loan pool to
use at its discretion for eligible economic development projects as described in the application. Until the City draws
money from that loan pool, it will not have any financial obligations to HUD. Once money is drawn down and loaned
to a third party, the City will be responsible for quarterly interest payments and annual principal payments to HUD.
Payments from the third party borrower will provide the revenue to make repayments to HUD.
If the third party borrower is not able or otherwise does not fulfill its repayment obligations to the City,the City remains
responsible to make its repayments to HUD. By submitting the application,the City is pledging its CDBG Entitlement
Grant as collateral should the City not have any other source, i.e., General Fund, to fulfill its dept obligations to HUD.
It is expected, as outlined in the application, that the City will require adequate security from the third-party borrower
that the City could collect in the event of a loan default, and therefore fulfill its debt obligations to HUD so that the
CDBG Entitlement Grant is not at risk.
If the City has no other repayment source and is unexpectedly forced to use CDBG funds to make payments on the
Section 108 Loan,the housing and human service projects that are typically supported by CDBG may not receive the
level of funding currently allocated until the loan is repaid to HUD.
ENVIRONMENTAL IMPACTS
Section 108 loan recipients are required to adhere to environmental review requirements set forth in the National
Environmental Policy Act and Housing and Urban Development Act.
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BOARD / COMMISSION RECOMMENDATION
On November 4, 2010,the CDBG Commission voted unanimously to recommend to the City Council that the Section
108 Application be submitted to HUD for approval. A copy of the Commission's minutes is attached(see Attachment
5).
On December 2,2010,the Affordable Housing Board(AHB)voted unanimously to recommend to the City Council that
the Section 108 Application be submitted to HUD for approval. A copy of the Board's minutes is attached (see
Attachment 6). The AHB has also submitted a letter discussing some concerns the Board has with the Section 108
Program (see Attachment 7).
The Economic Advisory Commission will provide a recommendation at its meeting on December 15; staff will forward
its recommendation prior to the December 21 Council meeting.
PUBLIC OUTREACH
The CDBG Commission and Affordable Housing Board have been closely involved in crafting the language of the
Section 108 application. Staff has presented information and draft applications to both on numerous occasions and
has the support of both bodies.
The Affordable Housing Coalition of Larimer County was presented information about the Section 108 Program at its
monthly meetings on several occasions. Many of the housing and human service agencies that apply and receive
December 21, 2010 -3- ITEM 17
CDBG funding from the City are members of the Coalition,and therefore,have an interest in assuring that those funds
are not put at undue risk.
A public hearing was held on August 5, 2009, to solicit comments on the application. Notice was given 30 days prior
to the hearing, and the application was available on the City's affordable housing website prior to the hearing. No
public comments were received.
The Section 108 Program and draft'application were presented to the City Council Finance Committee on April 19,
2010.The Committee supported the application and directed staff to proceed and submit the application for Council's
consideration. A Council work session was'not recommended. A copy of the minutes from the Committee's meeting
is attached (see Attachment 4).
ATTACHMENTS
1. Section 108 Loan Guarantee Program Application
2. Section 108 Loan Guarantee Program Fact Sheet
3. Section 108 Loan Guarantee Program Case Studies
4. City Council Finance Committee Minutes, April 19, 2010
5. CDBG Commission Minutes, November 4, 2010
6. Affordable Housing Board Meeting Minutes, December 2, 2010
7. Letter from the Affordable Housing Board to City Council
Section 108Application 12-21-2010_ATTACHMENT 1
Application to the U . S . Department of Housing and Urban Development
Section 108 Loan Guarantee Program
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Submitted by the City of Fort Collins, Colorado
City of
Fort Collins
Contents
I . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II . Public Benefit, National Objective, Eligible Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A . Community Development Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Be Compliance with 24 CFR 570 . 208 — National Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C . Compliance with 24 CFR 570 , 703 — Eligible Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
III . City' s Loan Program Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
IV . Underwriting Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A . Project Preference Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1 . Project Need and Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2 . Project Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3 . Project Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . weave . . . . 6
4 . Project Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Be Project Loan Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1 . Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2 . Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3 . Loan Fees to City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4 . Payments/Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
C . Application Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1 . Discussions with Lending Institutions . . 7
2 . Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
D . Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
E . Project Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
F . Special Program Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
V . Pledge of CDBG Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
VI . City of Fort Collins Contact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXHIBIT A- 1 : Map of the North College Urban Renewal Plan Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EXHIBIT A- 2 : Map of the Downtown Development Authority Boundary . . . . . . . . . . . . . . . . . . . . . . . . . 15
EXHIBIT A- 3 : Map of Qualified Census Tracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
EXHIBIT A-4 : Map of Enterprise Zones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
EXHIBIT B : Explanation of Special Program Requirements ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXHIBIT C : Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
EXHIBIT D : Entitlement Public Entity Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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I . Introduction
The City of Fort Collins ( " City" ) seeks a Section 108 Guaranteed Loan of $ 5 , 000, 000 to create a
loan pool targeted to help finance projects that will have positive economic and community
development benefits . Targeted areas include the North College Urban Renewal Plan area
( URP ) , Downtown , Qualified Census Tracts ( QCT) , and Enterprise Zones ( Exhibits A- 1 — A-4 ) .
The City will use the Section 108 loan pool to fund projects located within the targeted areas or
projects located immediately adjacent that would provide clear economic benefit .
In 2004, prior to its approval , the North College URP area was thoroughly evaluated for existing
conditions to determine if there were " blight factors" present . According to the Colorado
Revised Statutes ( CRS ) , an area cannot be designated a URP without a minimum of four blight
factors present . In fact, 10 of the 11 statutory conditions were identified :
■ Slum , deteriorated , or deteriorating structures ;
■ Predominance of defective or inadequate street layout;
■ Faulty lot layout in relation to size, adequacy, accessibility, or usefulness ;
■ Unsanitary or unsafe conditions;
■ Deterioration of site or other improvements ;
■ Unusual topography or inadequate public improvements or utilities ;
■ The existence of conditions that endanger life or property by fire or other causes ;
■ Buildings that are unsafe or unhealthy for persons to live or work in ;
■ Because of building code violations, dilapidation , deterioration , defective design ,
physical construction , of faulty or inadequate facilities;
■ Environmental contamination of buildings or property; and
■ The existence of health , safety, or welfare factors requiring high levels of municipal
services or substantial physical underutilization or vacancy of sites, buildings, or other
improvements .
Targeted areas may also include any future Urban Renewal Plan areas designated by the City .
The North College URP is adjacent to three of five designated Qualified Census Tracts ( QCT) . All
QCTs will be eligible areas to receive Section 108 assistance because of their percentage of low-
income households .
Fort Collins' Downtown has had great success in redevelopment activities since the creation of
a Downtown Development Authority ( DDA ) in 1981 . The DDA has made significant progress
towards revitalizing the Downtown area , however there is much more that needs attention .
The Downtown has become the "jewel " and heart of Fort Collins, and will remain a priority for
continued financial investment to ensure that it remains a vital retail , entertainment, and
cultural center of the community . Finally, Section 108 assistance will be targeted to Enterprise
Zones, which offer tax advantages and incentives to businesses in order to encourage economic
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growth and investment . These four targeted areas have all been identified due to their need for
additional economic and community development assistance ; the Section 108 loan pool will be
another tool to continue to leverage private investments and support public- private
partnerships that benefit those areas and the community as a whole .
The loans made from the proposed Section 108 loan pool will qualify for one or more eligible
activities provided in HUD' s Code of Federal Regulations ( CFR ) at 24 CFR 570 . 703 . Similarly, 108
loans will qualify under one or more criteria for compliance with national objectives including
24 CFR 700 . 208 ( a —c ) . Projects funded under 24 CFR 570 . 703 ( i ) will meet the public benefit test
pursuant to 24 CFR 570 . 209 ( b ) , where applicable .
As each project becomes ready for commitment and is approved by the City Council ( " City
Council " ) , the City will submit an application to HUD with a full description of the project, an
explanation of the eligible activity and national objectives to be achieved , and an analysis of the
project' s compliance with the City' s underwriting guidelines .
II . Public Benefit, National Objective, Eligible Activity
A . Community Development Objectives
The Section 108 loan pool will result in lending for economic and community development
that impacts targeted areas . The City of Fort Collins' Five -Year Consolidated Plan for
FY2010- 2014 includes the use of Section 108 Loan funds to address community
development issues in Fort Collins over the period covered by the Plan . The vision and
goals outlined in the Plan that support the Section 108 Loan Guarantee Program are :
Economic Development — in order to provide economic opportunity, the City of Fort Collins
will improve the availability and sustainability of economic development by the following :
■ Support, promote or expand development of the Fort Collins Urban Renewal
Authority ( URA ) .
■ Remove severely blighted properties, especially to promote infill and
redevelopment .
■ Continue to expand use of tools for development such as the Section 108 Loan
Program , Brownfields, and Economic Development initiatives .
■ Use CDBG funds to leverage public and private funds .
■ Support, establish or expand programs that provide job training or career
development for low- and moderate - income persons .
■ Implement revitalization efforts in neighborhoods to improve housing and/or
economic development opportunities .
■ Promote or support sustainable energy resources .
The Annual Action Plan for FY2010 addresses the use of Section 108 funds as follows :
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"The City is also pursuing implementation of the Section 108 program which will be
referred to City Council for consideration within the next year . "
B . Compliance with 24 CFR 570 . 208 — National Objectives
Projects assisted with Section 108 funds will comply with one or more national objectives
under 24 CFR 570 . 208 ( a ) activities benefiting low- and moderate - income persons, ( b )
activities which aid in the prevention or elimination of slums or blight, and/or ( c ) activities
designed to meet community development needs having a particular urgency .
C . Compliance with 24 CFR 570 . 703 — Eligible Activities
Section 108 funds may be used for one or more of the eligible activities described at 24 CFR
570 . 703 ( a - m ) . None of the projects assisted with 108 funds will be used for the ineligible
activities provided at 24 CFR 570 . 207 .
III . City' s Loan Program Management
The City' s Advance Planning Department will manage the loan pool in conjunction with staff
from the Economic Development Department . Staff will provide the initial assessment of the
pre - application . If the pre-application is satisfactory, a more detailed application will be
forwarded to the Loan Review Committee ( LRC ) who will be responsible for an in - depth project
analysis of financial feasibility . The LRC will be comprised of city staff, a member of the CDBG
Commission , and a member of the private banking industry . If the project is deemed sound , the
CDBG Commission will be consulted and a recommendation on whether or not to submit the
application will be sought . Final approval to submit the application to HUD must come from the
City Council .
IV. Underwriting Guidelines
In evaluating proposed projects the City intends to use the following criteria :
A . Project Preference Criteria
Proposals will be selected for funding if they lead to economic revitalization , are financially
feasible, within reasonable risk, likely to be repaid , and provide permanent, full -time
employment for low- and moderate - income individuals .
The Project Preference Criteria will be the first step in reviewing proposals . The criteria are
designed to provide an objective evaluation of the applicant' s ability to provide an effective
and timely outcome , and of the project impact . The Project Preference Criteria to be used
are : Project Need and Location , Project Effectiveness, Project Impact, and Project Period .
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1 . Project Need and Location
Project need is defined as the number of blight factors amount various locations in the
community . For the Section 108 loan pool , consideration will be given to proposals
located in existing and future Urban Renewal Plan areas, Downtown , Qualified Census
Tracts, and/or Enterprise Zones .
2 . Project Effectiveness
Project effectiveness is the evaluation of substantive content, administrative costs, and
compliance with policies and laws . Proposed projects will clearly identify the public
benefit ( s ) including the CDBG national objectives to be achieved .
3 . Project Impact
Project impact is defined as the beneficial results and tangible effects the project will
have on the community . Projects will be evaluated on the basis of commitments
supported in the application . The determination of impacts for business development
proposals will include the following, with greater preference to projects that :
a . Leverage public funds with private funds — minimum of 1 : 1 .
b . Use lesser amounts of public funds per job created — minimum of one job per
$ 35 , 000 loaned .
c . Create jobs that benefit low and moderate income individuals — minimum of
51 % .
4 . Project Period
Physical construction associated with a proposal will generally start within twelve
months from the date that a loan is approved , except in cases where there is substantial
new construction that involves land - use action and/or public improvements . The
completion date of a project will be included in the Loan Agreement, with date changes
subject to the written approval of City staff.
Jobs must be created and retained per the time schedule stipulated in the Loan
Agreement . Staff may grant written approval for revisions . Failure to create or retain
jobs may constitute default under the Loan Agreement and result in acceleration of the
loan . Staff will monitor job creation and retention until the developer' s commitment is
completed .
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B . Project Loan Structure
1 . Term
Section 108 project loans shall not exceed the overall 20 year term of the City' s Section
108 Guaranteed Loan from HUD, or the useful life of the financed asset .
2 . Interest Rate
Section 108 project loans will carry a fixed rate for each maturity of principal pursuant
to a HUD public offering, or a floating rate based on a formula — presently the 90 day
London Interbank Offered Rate ( LIBOR ) , as adjusted monthly, plus 20 basis points . The
City may charge the borrower an interest rate that is higher or lower than the rate on
the City' s note from HUD .
3 . Loan Fees to City
The City may assess a fee equal to or less than the actual amount of the City' s out of
pocket costs for entering into the transaction , such as the HUD fee of 0 . 5 to 1 . 0% of
the loan amount, any additional HUD underwriting expenses, and the City' s fees for
bond counsel , city attorney, or other issuance costs .
4 . Payments/Amortization
Section 108 project loans may be amortized over the full term of the loan ( i . e . , 20 year
amortization for a 20 year loan ) . If the anticipated financial condition of the project is
sufficient to sustain a balloon payment at the end of the term , amortization for greater
than the term of the loan may be considered ( i . e . , 30 year amortization for a 20 year
loan ) .
C . Application Process
1 . Discussions with Lending Institutions
It is expected that the applicant will have discussed the project with a financial
institution prior to applying to the City for a Section 108 loan . If a financial institution is
willing to make the entire loan , the City will not consider making a loan from the 108
fund .
2 . Procedures
The procedures to be followed when applying for a 108 project loan consist of six basic
steps :
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a . Pre-application — Informal project information will be submitted by
prospective applicants as soon as they decide to seek a loan from the Section 108
pool . The pre - application includes :
1 . Identification of applicant .
2 . Identification of project .
3 . History of development of the project .
4 . Description of the project ( what, where , when , why, by whom ) .
5 . Tentative project budget by major activity .
6 . Anticipated project benefits .
7 . Job descriptions with skill /experience requirements for jobs being
created .
8 . Project timing .
9 . Details of the terms of any additional financing for the project .
Based on the pre -application , staff will determine the eligibility of the project . If it
is acceptable, the applicant will be encouraged to formally apply .
b . Application — A formal document that includes detailed information and
documentation on the project proposal , financing commitments, administration ,
and various assurances for meeting program requirements . The successful
applicant will address the Project Preference Criteria . In general , the loan
application may :
1 . State the amount of funds requested and explain other monies that are
available , will be used , or have been sought .
2 . Describe the nature, purpose , and location of the project .
3 . Provide building and site plans, a detailed description of the planned
construction , operation , and maintenance of the project; an estimate of
the cost of construction ; and projections of annual revenues, operating,
and maintenance costs .
4 . Describe the proposed security for the loan , and show that the applicant
holds, or can acquire, all lands and /or other necessary interests .
5 . Include an explanation of any environmental impacts of the project and
describe the steps that will be taken to assure that construction and
operation of the project will be consistent with preservation of
environmental quality .
6 . Include a list of required permits and licenses from City, County, State ,
and Federal agencies , and other affected parties, and a statement that all
applicable permits and licenses will be obtained before construction
begins .
7 . Include other information necessary to evaluate a project' s practical and
economic feasibility; the qualification , credit worthiness, and
8
responsibility of the applicant; or other matters consistent with the
Section 108 regulations .
Upon receipt of the application , staff will determine if the application includes
all information needed for review and evaluation . Incomplete applications
may be returned with a request to submit additional information . Only
completed applications will be formally accepted . Applicants will be notified
when their application has been formally accepted for review .
c . Loan Review Committee ( LRC) — Once accepted , the application will be given
to the LRC for formal review and analysis . The LRC will be comprised of City staff
from the Advance Planning, Economic Development, and Finance Departments, a
member of the CDBG Commission , and a member of the private banking industry .
The LRC will evaluate applications in terms of their compliance with Federal , State,
and local laws, policies, and requirements . The bulk of the LRC review will involve
checking the financial and technical support information . Throughout the
evaluation of the application , contact with the applicant may occur . As necessary,
applicants may be requested to submit additional information . During review,
applicants are expected to keep staff and the LRC fully informed of any
developments affecting the proposed project . The following nine elements will be
thoroughly reviewed by the LRC .
1 . Evidence of Site Control — Applicants must demonstrate evidence of site
ownership or control , such as a purchase and sale agreement or an executed
option .
2 . Ability to Repay — Project analysis will identify the primary, secondary
and , where necessary, tertiary sources of repayment for the loan . Projects will
be expected to have at least a 1 . 20 : 1 projected debt coverage ratio . A lower
debt coverage ratio may be considered if the project' s financial condition
allows .
Repayment risk will be analyzed in detail , including the project' s financial
assumptions compared to actual market conditions . The analysis will compare
lease and vacancy rates for similar properties, where applicable , and will
describe the projected leasing time frame to achieve project stabilization and
the presence of reserves to offset delays . If a balloon payment is applicable,
the LRC will analyze the projected financial condition of the property on the
maturity date , the project' s ability to make the final payment, and the efforts
to mitigate risk . Debt service reserves may also be required . The LRC will
review appropriate supporting documentation , such as a recent appraisal and
multi -year operating pro forma to support the analysis .
9
3 . Collateral — Consistent with customary underwriting practice , loan to
value coverage will be determined based on expected value as of project
stabilization . Loan to value must be supported by an appraisal prior to
funding . Section 108 project loans will target a loan to value ratio not to
exceed 80 percent at project stabilization , not to exceed 100% of hard costs .
The analysis will first use the property being financed as the sole source of
value to determine the loan to value ratio . If such a calculation exceeds 80
percent, the project may then be required to include outside collateral to
meet the targeted loan to value requirement . The City' s security interest will
typically be in the form of a deed of trust . In certain cases, outside guarantees
will suffice for additional collateral depending on the resources and financials
of the individuals or entities providing such guarantees . The LRC will decide
whether or not to accept outside collateral and/or guarantees to meet the
loan to value expectations .
4. Proposed Costs - The analysis will compare estimated development costs
to costs of similar properties and verify that estimated development costs
have been prepared by a credible third party, such as a contractor or other
cost estimator . The City' s loan commitments will be conditioned on a finalized
project budget .
5 . Commitment of Funds — Projects seeking Section 108 funding will have
commitments of construction and permanent financing . If private financing
includes a right to adjust the interest rate after a certain point in time, the
analysis will describe the effect of such a change on the repayment of the
Section 108 project loan . Loan documents will contain adequate lender
protections for the City ( i . e . default and cure privileges ) , subject to reasonable
conditions of other lenders having priority over the 108 project loan .
6 . Need for Public Assistance — The analysis will determine whether the
project requires public financial assistance . The LRC will examine the
reasonableness of a for- profit developer' s fee compared to market rates . If
the for- profit developer has an ownership stake in the project, the LRC will
also examine the reasonableness of the developer' s return under cash -on -
cash return ( CoC ) and internal rate of return ( IRR ) . CoC return measures the
developer' s cash return on a cash investment ( cash flow divided by equity ) .
IRR measures the rate at which the developer' s investment grows over a long
term period , taking into account periodic cash flows and property
appreciation . As part of such analysis, an excessive developer fee/ return will
be reduced and put back into the project in the form of additional equity
and/or reserves .
7 . Development Team Capacity and Experience — Projects to be funded
should have a development team that has both the capacity and experience
10
to complete the project as evidenced by past projects of similar size and
scope, and by financial strength . The analysis will include resumes of
development team members and a list of prior comparable projects
completed by the development team members with a description of project
size, cost, timeliness, and adherence to budget . Also, the analysis will include
the development team members' experience with public funding sources and
accompanying regulations, as applicable ( i . e . , housing tax credits, Davis -
Bacon , relocation ) .
8 . Developer/Owner Commitment — Developer/owner commitment can
include : developer/owner equity, guarantees of completion , guarantees to
fund shortfalls, or guarantees of minimum cash flow . The developer' s
financial statements and pro forma analyses will also be evaluated .
9 . Character — Projects to be funded will have developers with good credit
histories, demonstrated integrity, and quality references .
d . Citizen Participation — Upon favorable LRC review, staff will follow the Citizen
Participation Plan ( as outlined in the 2005 - 2009 Consolidated Plan ) by publishing
the project details, allowing a 30-day written public comment period , and holding
a public hearing before the CDBG Commission . The CDBG Commission will make a
recommendation on the proposed project after reviewing the application
materials and holding the public hearing .
e . Final Review — Following a recommendation from the CDBG Commission ,
staff will present the project before City Council for final approval . The City may
approve a project if it finds that :
1 . The proposed project has substantially met the intent of the Project
Preference Criteria ;
2 . The proposed project is financially feasible, within reasonable risk from
practical and economic standpoints, and has reasonable prospect of
repayment;
3 . The proposed project includes sufficient collateral ;
4 . Section 108 loans are , or will be, available for the proposed project ; and
5 . The beneficiary has adequate resources to provide working capital
necessary to assure success of the project .
A project that receives all necessary approval under the City' s application process
will then be sent to the HUD field office for approval .
11
D . Loan Agreement
If the City Council approves a loan proposal , the City and the applicant may enter into a
loan contract, which shall set forth , among other matters :
1 . Commencement date of repayment of principal and interest no later than one
year after the date of the loan contract, or at such time as the City may provide ;
2 . Evidence of debt assurance of, and security for, repayment by the applicants, as
considered necessary by the City ( including any debt coverage ratios and reserve
requirements ) ;
3 . A schedule of payments and the period of the loan that shall not exceed the life of
the contracted project up to a maximum term of 20 years and shall also set forth
the manner of determining when loan payments are delinquent;
4 . Events of default and effect of an event of default;
5 . A procedure for formal declaration of default of payment by the applicant, with
formal notification of all relevant Federal , State, and loan agencies; a procedure
for notification of all relevant Federal , State , and loan agencies that declaration of
default has been rescinded when appropriate ; and the remedies for default;
6 . Provisions, satisfactory to the City, for field engineering and inspection , with the
City as the final judge of completion of the contract;
7 . The liability of the City under the contract is contingent upon the availability of
monies in the Section 108 loan pool for use in the project;
8 . Such further provisions as the City considers necessary to ensure disbursement
and expenditure of the funds for the purposes set forth in the approved
application including demonstrable evidence of verifiable project expenditures;
9 . The release date of approved loan monies, contingent upon approval of other
funds from private or other sources;
10 . That the beneficiary will submit annual financial reports to ensure compliance
with reserve requirements and debt coverage ratios, as well as the ability to repay
the debt, per the City' s debt policy; and
11 . The completion date of the project .
E . Project Monitoring
Throughout the duration of a project, City staff will monitor fund recipients, including on -
site visits as appropriate . The objective of monitoring activities will be to determine the
status of funds and to ensure that projects are being administered properly and in
accordance with the Loan Agreement, special program requirements, and applicable City,
State, and Federal laws, rules, and regulations . Fund recipients are expected to maintain
necessary records that demonstrate the progress of projects and adherence to the special
programs requirements . Special attention will be given to fund recipients where issues and
compliance matters are surfaced based on review of financial and program progress
reports .
12
Instances of delays in the progress of project activities and/or non - compliance with special
program requirements will be addressed on an individual basis . Where project issues and
acts of non -compliance arise, City staff will determine and apply appropriate remedies and
levels of sanction , such as corrective action by fund recipients, reimbursement of funds, or
termination of a loan agreement for cause or convenience .
F . Special Program Requirements
Section 108 project loan recipients must comply with all applicable local and State laws .
Recipients will also be specifically bound by Federal requirements covering the following
subject areas :
1 . Civil rights and equal opportunity
2 . Environmental review
3 . Flood plain insurance
4 . Labor standards ( Davis- Bacon prevailing wage )
5 . Real property acquisition
6 . Relocation and displacement
7 . Replacement of low- moderate income housing
Applicants are encouraged to consider these requirements in the design of project
proposals and in preparation of an application , particularly if the proposal involves
construction . A general explanation of each of the Federal requirements can be found in
Exhibit B .
V. Pledge of CDBG Guarantee
The City of Fort Collins understands that should the Section 108 project loan borrowers fail to
make timely payments and should the City subsequently fail to make required payments, HUD
would deduct that payment from the City' s annual CDBG allocation . In accepting the Section
108 Guaranteed Loan , the City will pledge all grants made to the City or for which the City may
become eligible described in 24 CFR Part 570 as security for the loan .
VI . City of Fort Collins Contact
Joe Frank, Advance Planning Director
281 North College Avenue
PO Box 580
Fort Collins, CO 80522
970- 221 - 6376
13
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EXHIBIT Be Explanation of Special Program Requirements
A . Civil Rights and Equal Opportunity — Section 108 project loan recipients must comply with
Federal civil rights requirements in the design and implementation of projects funded in whole
or in part by the Section 108 loan pool . Applicable requirements include :
1 . Title VI of the Civil Rights Act of 1974 provides that no person shall be excluded from
participation , denied program benefits, or subjected to discrimination on the basis of
race, color, or national origin under any program or activity receiving Federal financial
assistance .
2 . Title VII of the Civil Rights Act of 1968, as amended , prohibits discrimination in housing
on the basis of race, color, religion , sex, or national origin .
3 . Section 3 of the Housing and Urban Development Act of 1968, as amended , provides
that to the greatest extent feasible, opportunities for training and employment that
arise through HUD -financed projects shall be given to lower income residents of the
project area . Section 3 also provides that contracts awarded in connection with such
projects be awarded to businesses located in the project area or businesses owned in
substantial part by residents of the project area . The Housing and Community
Development Act of 1980 defines " project area " as the unit of local government or
metropolitan area or the non - metropolitan county in which the project is located .
4 . Section 504 of the Rehabilitation Act of 1973 , as amended , provides that no otherwise
qualified individual shall , solely by reason of his/ her handicap, be excluded from
participation , including employment, denied program benefits, or subjected to
discrimination under any program or activity receiving Federal funds .
5 . Section 109 of the Housing and Urban Development Act of 1974, as amended ,
provides that no person shall be excluded from participation , including employment,
denied program benefits, or subjected to discrimination on the basis of race, color,
national origin , or sex, under any program or activity funded in whole or in part under
Title I of the Act .
6 . The Age Discrimination Act of 1975 , as amended , provides that no person shall be
excluded from participation , denied program benefits, or subjected to discrimination
on the basis of age under any program or activity receiving Federal funds .
7 . Executive Order 11063 , as amended , provides that no person shall , on the basis of
race, color, religion , sex, or national origin , be discriminated against in housing and
related facilities provided with Federal assistance, or lending practices with respect to
residential property when such practices are connected with loans ensured or
guaranteed by the Federal government .
8 . Executive Order 11246, as amended , provides that no person shall be discriminated
against on the basis of race , color, religion , sex, or national origin in any phase of
employment during the performance of Federal or Federally- assisted construction
contracts in excess of $ 2 , 000 .
18
B . Environmental Review — Section 108 project loan recipients are required to adhere to
environmental review requirements set forth in the National Environmental Policy Act of 1969
( 91 -90 ) and Title 1, Section 104 ( f) of the Housing and Community Development Act
Amendments of 1981 ( P . L . 97 - 35 ) . Environmental review requirements are further
implemented through Federal regulations including Environmental Review Procedures for Title I
Community Development Block Grant Programs ( 24 CFR Part 58 ) and National Environmental
Policy Act of 1969 and implementing regulations ( 40 CFR Part 1500- 1508 ) .
Prior to incurring cost and before funds can be released under the Section 108 loan pool ,
applicants must comply with environmental review procedures . Completion of environmental
review procedures including either a full environmental assessment when acquisition of
property or environmental changes are involved or only the "other authorities" under 24 CFR
Part 58 paragraph 58- 5 when criteria for "categorical exclusions" under paragraph 58 . 35 are
met and includes legally required time periods, with published notices, for public review and
comments on environmental aspects of the project .
An applicant will be provided additional information on environmental review procedures when
an application is accepted for review by the LRC .
C . Flood Plain Insurance — Any project located on a flood plain will need to obtain and
maintain flood plain insurance in accordance with Federal law .
D . Labor Standards — Project loan recipients with project involving construction activities are
required to comply with the following Federal labor standards provisions :
1 . Davis- Bacon Act which requires that workers receive no less than the prevailing wages
being paid for similar work in the locality . Prevailing wages are computed by the
Department of Labor and are issued in the form of Federal wage decisions for each
classification of work . The law applies to most construction , alteration , or repair
contracts over $ 2 , 000 .
2 . Copeland "Anti - Kickback" Act requires workers be paid at least once a week without
any deductions or rebates except permissible deductions . Permissible deductions
include taxes, deductions the worker authorizes in writing, and those required by court
procedures . The Act also requires contractors to maintain payroll records and submit
weekly Statements of Compliance to the contracting agency . It applies to all contracts
covered by the Davis - Bacon Act .
3 . Contract Work Hours and Safety Standards Act applies to contracts of more than
$ 100, 000 and requires all work in excess of 40 hours per week to be paid at the rate of
one and one - half times the prevailing hourly wage . In addition , for each calendar day
that overtime compensation due to the employee is not paid , $ 10 per day in liquidated
damages shall be assessed against the contractor .
E . Real Property Acquisition — The acquisition of real property with Section 108 Loan
Guarantee funds will be done in accordance with the Uniform Relocation Act acquisition
19
process cited at 49 CFR Part 24 and detailed in Handbook 1378 -Tenant Assistance , Relocation
and Real Property Acquisition . An acquisition will be a voluntary, arm ' s length transaction . The
owner will be informed by the project loan recipient of the fair market value of the property .
The owner will be informed by the project loan recipient that if negotiations fail to result in an
amicable agreement, the City will not acquire the property though eminent domain .
F . Relocation and Displacement — The City of Fort Collins will provide the full scope of
relocation assistance and benefits, as required by the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970, as amended , to each eligible household displaces as a
direct result of assisted activities . Consistent with 24 CFR 570 . 606, the City of Fort Collins shall
ensure that all reasonable steps are taken to minimize the displacement of persons ( families,
individuals, businesses, and nonprofit organizations ) as a result of activities assisted with
Section 108 Loan Guarantee funds . If displacement directly results from the acquisition ,
rehabilitation , or demolition funded with Section 108 Loan Guarantee funds, all relocation
assistance will be provided at levels described at 49 CFR Par 24, the government wide
regulations implementing the Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 ( URA ) .
G . Replacement of Low- Moderate Housing — Section 104 ( d ) — The City of Fort Collins will
replace all occupied and vacant occupiable low- and moderate - income dwelling units
demolished or converted to a use other than low- or moderate - income housing as a direct
result of activities assisted with Section 108 Loan Guarantee funds in accordance with the
Housing and Community Development Act of 1974, as amended , and described in 24 CFR
570 . 606 ( b ) ( 1 ) and the Cranston -Gonzalez National Affordable Housing Act, as described at 24
CFR 92 , 353 ,
Replacement of housing as described in the foregoing paragraph will be completed within three
years of commencement of the demolition or rehabilitation relating to conversion . Before
obligating or expending funds that will directly result in such demolition or conversion , the City
of Fort Collins will make public and submit to the HUD field office the following information :
1 . A description of the proposed assisted activity;
2 . The general location on a map and approximate number of dwelling units by the size
( number of bedrooms ) that will be provided as replacement dwelling units ;
3 . A time schedule for the commencement and completion of the demolition /conversion ;
4 . The source of funding;
5 . A time schedule for the provision of replacement dwelling units; and
6 . The basis for concluding that each replacement dwelling unit will remain available and
affordable to low- moderate income residents for at least ten years from the initial
date of occupancy .
20
EXHIBIT C : Resolution
RESOLUTION , 2010
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE ZITY MANAGER TO SUBMIT TO THE
U . S . DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
21
EXHIBIT D : Entitlement Public Entity Certification
In accordance with Section 108 of the Housing and Community Development Act of 1974, as
amended , ( the "Act" ) and with 24 CFR § 570 . 704 ( b ) the public entity certifies that :
A . It will affirmatively further fair housing, which means it will conduct an analysis of
impediments to fair housing choice within the jurisdiction , take appropriate actions to
overcome the effects of any impediments identified through that analysis, and maintain
records reflecting that analysis and actions in this regard .
B . It will comply with the acquisition and relocation requirements of the Uniform Relocation
Assistance and Real Property Acquisitions Policies Act of 1970, as amended , and implement
regulations at 49 CFR 24, and it has in effect and is following a residential anti -displacement
and relocation assistance plan required under Section 108 ( d ) of the Housing and
Community Development Act of 1974, as amended , in connection with any activity assisted
with funding under the CDBG or HOME programs .
C . It will or will continue to provide a drug-free workplace by :
1 . Publishing a statement notifying employees that the unlawful manufacture,
distribution , dispensing, possession , or use of a controlled substance is prohibited in
the grantee' s workplace and specifying the actions that will be taken against
employees for violation of such prohibition ;
2 . Establishing an ongoing drug-free awareness program to inform employees about :
a . The dangers of drug abuse in the work place ;
b . The grantee' s policy of maintaining a drug-free workplace ;
c . Any available drug counseling, rehabilitation , and employee assistance
programs ; and
d . The penalties that may be imposed upon employees for drug abuse violations
occurring in the workplace ;
3 . Making it a requirement that each employee to be engaged in the performance of the
grant be given a copy of the statement required by Paragraph 1 ;
4 . Notifying the employee in the statement required by Paragraph 2 that, as a condition
of employment under the grant, the employee will :
a . Abide by the terms of the statement ; and
b . Notify the employer in writing of his or her conviction for a violation of a
criminal drug statute occurring in the workplace no later than five calendar
days after such conviction ;
22
5 . Notifying the agency in writing, within ten calendar days after receiving notice under
Subparagraph 4 ( b ) from an employee or otherwise receiving actual notice of such
conviction . Employers of convicted employees must provide notice, including position
title, to every grant officer or other designee on whose grant activity the convicted
employee was working, unless the Federal agency has designated a central point for
the receipt of such notices . Notice shall include the identification number( s ) of each
affected grant;
6 . Taking one of the following actions, within 30 calendar days of receiving notice under
Subparagraph 4 ( b ) , with respect to any employee who is so convicted :
a . Taking appropriate personnel action against such an employee, up to and
including termination consistent with the requirements of the Rehabilitation
Act of 1973 , as amended ; or
b . Requiring such employee to participate satisfactorily in a drug abuse
assistance or rehabilitation program approved for such purposes by the
Federal , State , or local health , law enforcement, or other appropriate agency;
7 . Making a good fait effort to continue to maintain a drug-free workplace through
implementation of Paragraphs 1, 2 , 3 , 4, 5, and 6 .
D . To the best of the jurisdiction ' s knowledge and belief:
1 . No Federal appropriated funds have been paid or will be paid , by or on behalf of it, to
any person for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan , the entering into of any
cooperative agreement, and the extension , continuation , renewal , amendment, or
modification of any Federal contract, grant, loan , or cooperative agreement .
2 . If any funds other than Federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer of employee of any agency,
a Member of Congress, an officer or an employee of Congress, or an employee of a
member of congress in connection with this Federal contract, grant, loan , or cooperative
agreement, it will complete and submit Standard Form LLL, " Disclosure Form to Report
Lobbying, " in accordance with its instructions ; and
3 . It will require that the language of Paragraph 1 and 2 of this anti - lobbying certification
be included in the award documents for all sub - awards at all tiers ( including sub -
contracts, sub-grants, and contracts under grants, loans, and cooperative agreements )
and that all subrecipients shall certify and disclose accordingly .
23
E . The consolidated plan is authorized under State and local law ( as applicable ) and the
jurisdiction possesses the legal authority to carry out the programs for which it is seeking
funding, in accordance with applicable HUD regulations .
F . The housing activities to be undertaken with CDBG funds are consistent with the strategic
plan .
G . It will comply with Section 3 of the Housing and Urban Development Act of 1968, and
implementing regulations at 24 CFR Part 135 .
H . Before submission of its application to HUD, it has :
1 . Furnished citizens with information required by § 570 . 704 ( a ) ( 2 ) ( i ) ;
2 . Held at least one public hearing to obtain the views of citizens on community
development and housing needs ; and
3 . Prepared its application in accordance with § 570 . 704 ( a ) ( 1 ) ( iv ) and made the
application available to the public .
I . Is following a detailed citizen participation plan which meets the requirements described in
§ 570 . 704 ( a ) ( 2 ) .
J . Assures and certifies with respect to its application for a loan guarantee pursuant to
Section 108 of the Housing and Community Development Act of 1974, as amended , that it
has made efforts to obtain financing for the activities described herein without the use of
such guarantee , it will maintain documentation of such efforts for the term of the loan
guarantee, and it can not complete such financing consistent with the timely execution of
the project without such guarantee .
K . The prospective primary participant certifies to the best of its knowledge and belief, that it
and its principals :
1 . Are not presently debarred , suspended , proposed for debarment, declared ineligible ,
or voluntarily excluded from covered transactions by any Federal department or
agency;
2 . Have not within a three -year period preceding this proposal been convicted of or had a
civil judgment rendered against them for commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain , or performing a public ( Federal , State
or local ) transaction or contract under a public transaction ; violation of Federal or
State antitrust statutes or commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements, or receiving stolen
property;
24
3 . Are not presently indicted for or otherwise criminally or civilly charged by a
governmental entity ( Federal , State or local ) with commission of any of the offenses
enumerated in paragraph ( 1 ) ( b ) of this certification ; and
4 . Have not within a three year period preceding this application/ proposal had one or
more public transactions ( Federal , State or local ) terminated for cause or default .
Where the prospective primary participant is unable to certify to any of the statements in
this certification , such prospective participant shall attach an explanation to this proposal .
Darin Atteberry, City Manager
Date
25
ATTACHMENT 2
Department of Housing and Urban Development (HUD)
Section 108 Loan Guarantee Program -fact sheet
Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG)
Program. HUD allows Section 108 to provide communities with a source of financing for
economic development, housing rehabilitation, public facilities, and large-scale physical
development projects. The City of Fort Collins would use the Program to provide loans for
economic development projects that add employment opportunities for low- and moderate-
income persons.
Regulations
Regulations governing the Section 168 Program can be found at HUD's Code of Federal
Regulations (CFR): 24 CFR 540, Subpart M, "Loan Guarantees'.
Eligible Applicants
Eligible applicants include the following public entities:
■ Metropolitan cities and urban counties, also known as CDBG entitlement recipients.
The City of Fort Collins is an entitlement recipient.
■ Non-entitlement communities that are assisted by states that administer the CDBG
program.
■ Non-entitlement communities eligible to receive CDBG funds under the HUD-
administered Small Cities CDBG Program.
The public entity may be the borrower or it may designate a public agency as the borrower. The
loans can also be passed through to third-party non-profit or for-profit entities.
Eligible Activities
Activities eligible for Section 108 financing include:
■ Economic development activities eligible under the CDBG Program.
■ Acquisition of real property.
■ Rehabilitation of publicly owned real property.
■ Housing rehabilitation eligible under the CDBG Program.
■ Construction, reconstruction, or installation of public facilities (including street,
sidewalk, and other site improvements).
■ Related relocation, clearance, and site improvements.
■ Payment of interest on the guaranteed loan and issuance costs of public offerings.
■ Debt service reserves.
■ Public works and site improvements in colonias.
National Obiectives
Consistent with the CDBG Program, all eligible projects and/or activities using Section 108
financing must meet at least one national objective: 1) principally benefit low- and moderate-
income persons; 2) aid in the elimination or prevention of slums and blight and/or; 3) meet an
urgent need of the community.
1
ATTACHMENT 2
Loan Amount
Entitlement recipients may apply for up to five times the entity's latest approved CDBG
entitlement grant, minus any outstanding Section 108 commitments and/or principal balances
of Section 108 loans.
Security
The principal security for the loan guarantee is a pledge by the applicant (public entity) or the
State (in the case of a non-entitlement public entity) of its current and future CDBG funds. In
addition to the CDBG pledge, full collateralization is required to assure repayment of
guaranteed obligations. The additional security requirements are determined by the amount of
the obligation and the value of assets committed for collateral. HUD remains flexible on the
types of assets used for collateral; assets could include, but are not limited to the following:
■ Liens on real or personal property.
■ Program income from CDBG or other HUD funded assets.
■ Debt service reserves. These reserves could come from the proceeds of a Section
108 Loan Guarantee or from another public or private source.
■ Tax increments.
Loan Repayment
The maximum repayment period for a Section 108 loan is 20 years. HUD has the flexibility to
structure the principal amortization to match the needs of the project and borrower.
Financing Source
Section 108 obligations are financed through underwritten public offerings. Financing between
public offerings is provided through an interim lending facility established by HUD. Generally,
public offerings are held annually.
A Section 108 Loan Guarantee is a mechanism that HUD uses to pledge the full faith and credit
of the Department (and the Federal Government)to secure a loan between the private sector
and the eligible applicant. HUD is not the lender; rather, HUD is the guarantor of the Section
108 loan.
Interest Rate
All Section 108 loans begin with a variable interest rate priced at the three-month London
Interbank Offered Rate (LIBOR) plus 20 basis points. Annually, HUD will make a public offering
and give the entity the opportunity to fix the interest rate based on the market conditions when
that obligation is sold.
2
ATTACHMENT 3
Section 108 Economic Development Project Examples'
Alameda, CA—Alameda Downtown Revitalization, $7,000,000
The City of Alameda will provide financial assistance to the Community Improvement
Commission (CIC) for the construction of a new 325-space public parking garage on Oak Street
as a part of the expansion of the City's historic business district. The lack of off-street parking
spaces in the City's downtown historic district has limited investment and the revitalization of
the area. The development of the garage, however, will facilitate the renovation and economic
development of the historic Alameda Theater. Also, it will provide needed spaces which will
assist business owners in the leasing of 46,000 square feet of vacant retail space and
approximately 26,000 square feet of vacant office space within two blocks of the parking
structure. The renovation of the Alameda Theater will address the structure's problems with
asbestos contamination, lead-paint, and mold, and it will include the removal of the
underground storage tanks on the site.
The City will re-lend the Section 108 Guaranteed Loan to CIC for the construction costs of the
garage. In conjunction with the guaranteed loan funds, the City will lend an $800,000
Brownfields Economic Development Initiative (BEDI) grant awarded to the City in 2004. The CIC
will use the BEDI funds to pay interest for the first three or four years on its loan from the City
for garage construction. The CIC will also use $1,125,000 in existing taxable bond proceeds for a
total cost of$8,925,000.
The Community Development Block Grant (CDBG) national objective for the City's use of the
Section 108 Guaranteed Loan is to benefit low-moderate income persons through job creation.
The project will create an estimated 335 new full-time jobs from the surrounding retail and
office space.
The City will repay the guaranteed loan funds over a twenty-year period, paying interest only
for the first two years. The City will use parking meter revenues and CIC repayment of its loan
from the City to repay the Section 108 Guaranteed Loan. To secure repayment of the
guaranteed loan funds, the City pledges a first lien on the parking structure, as well as its CDBG
funds.
Colorado Springs, CO— Business Assistance Loan Pool, $14,000,000
The City of Colorado Springs and the Economic Development Division of the City of Colorado
Springs will establish a business loan fund that will assist existing businesses and attract new
businesses to distressed areas of the City of Colorado Springs. Loans will also be provided to
non-profit service providers and public housing entities. The Loan Fund will be open for any and
all distressed areas within the City of Colorado Springs, but the focus will primarily be on three
separate districts of the City, two of which are State-designated urban renewal areas.
1 U.S. Department of Housing and Urban Development, 2006 Economic Development Projects,
http://www.hud.gov/offices/cpd/communitydevelopment/programs/108/casestudies.cfm
1
ATTACHMENT 3
The Community Development Block Grant (CDBG) national objective for the City's use of its
guaranteed loan proceeds is to benefit low-moderate income persons through job creation and
the elimination of slums or blight. The Loan Fund will cause the creation of approximately 400
new jobs as the City will require that borrowers create one full-time job per$35,000 borrowed.
The City will repay its Section 108 Guaranteed Loan over a twenty-year period, utilizing the
repayments of its borrowers. To secure the repayment of its guaranteed loan, the City will
pledge its interest in third party loans secured by first lien positions on real property, personal
guarantees, equipment, accounts receivable, and/or inventory. Also, the City pledges its CDBG
funds.
Denver, CO—Taxi Redevelopment Project, $6,000,000
The City of Denver will provide financing assistance to the Zeppelin Development, Limited
Liability Corporation (LLC), for the construction of a 550-foot long, three story structure that will
have 60,000 square feet of commercial space on the first and second floors and approximately
34,000 square feet of residential space containing 29 affordable loft condominium units on the
third floor. The site is a 9-acre parcel situated on the South Platte River and was formerly an
industrial site with soil, groundwater, asbestos and lead based paint contamination, and
underground storage tanks. The remediation of the site may necessitate the installation of a
methane venting system.
The City will use a $2,000,000 Brownfields Economic Development Initiative (BEDI) grant in
conjunction with its Section 108 Guaranteed Loan. The total project cost is $17,433,850 of
which the developer, Zeppelin Development, LLC, has bank financing commitments of
approximately$9,000,000. The City will loan the Section 108 funds to Zeppelin Development,
LLC, to finance a portion of the commercial construction costs.
The Community Development Block Grant (CDBG) national objective for the City's use of its
guaranteed loan proceeds is to benefit low-moderate income persons through job creation. The
project will create an estimated 200 new full-time jobs.
The City plans on repaying the Section 108 Guaranteed Loan over a three year period, paying
interest only for the first two years. It plans on repaying this interest using some of the BEDI
grant. The City will also use revenue generated from the sale of the condominiums to repay the
loan. To secure repayment, the City has pledged its interest in its third party loan to Zeppelin
Development, LLC, secured by a second deed of trust on the project property, and its CDBG
funds.
Deluth, MN— Deluth Rental Housing Development Program, $10,000,000
Duluth will use the Section 108 guaranteed loan to create a loan fund for the development of
rental housing. Through this loan fund the city will finance property acquisition, construction of
public facilities, and related site improvements for rental housing development. At least 51% of
the units in the completed rental housing development will be occupied by low- and moderate-
income persons.
2
ATTACHMENT 3
Palm Beach County, FL—Business Loan Program, $15,000,000 Section 108 Loan
The County of Palm Beach has solidified commitment to its Community Development Business
Loan Program by securing $15,000,000 in Section 108 loan funds for the program's related
economic development activities. This program provides loans up to $1,000,000, which will be
used to develop new business opportunities. The loan funds will be made available to
businesses within the boundaries of Palm Beach County, with priority given to projects located
in distressed areas. The County expects that these activities will ultimately create over 1000
jobs.
Eugene, OR—Brownfields Redevelopment Loan Fund, $7,895,000
The City of Eugene's Community Development Division will create a business loan fund that will
assist existing businesses and help attract new businesses to distressed areas in the City. The
loan fund will focus primarily on the City's Downtown and Riverfront urban renewal districts.
The fund will provide loans to subrecipients for acquisition, relocation assistance, clearance and
demolition, site preparation, and construction of public facilities. It will also be available to non-
profit service providers and public housing entities, via subrecipient agreements.
In conjunction with the Section 108 Guaranteed Loan funds, the City will use a $2,000,000
Brownfield Economic Development Initiative (BEDI) grant to pay for part of the interest on the
Section 108 Guaranteed Loan, for site preparation, and for the creation of a debt service
reserve. The total cost of the project is $9,895,000.
The Community Development Block Grant (CDBG) national objective for the City's use of the
guaranteed loan proceeds is to benefit low-moderate income persons through job creation and
through the provision of affordable housing. Also, the national objective is to eliminate/prevent
blight or slums. The loan fund will create an estimated 200 new full-time jobs as the City will
require each Business Loan borrower to provide one full-time job for every$35,000 in Loan
Fund proceeds used.
The City will repay the Section 108 Guaranteed Loan over a twenty-year period using
repayments from its business borrowers and subrecipients. To secure repayment of the
guaranteed loan funds, the City pledges its interest in third party loans secured by first lien
deeds of trust on real property, personal guarantees, equipment, accounts receivable, and/or
inventory. The City also pledges its CDBG funds.
3
--- -- — ---- ATTACHMENT 4
'
Council Audit & Finance Committee F City
of
Collins
Minutes
April 19, 2010
elemental funding through 2050
�.- rreeze a Lump sums-to-active-emptoyees.
3. Freeze the Plana ear-end 2010 and allow for monthly ayments.
4. Reallocate the employer tribution from the contribution plan (ICMA) to the
GERP to earn additional years of se red' /31/2010. At the same time, the City
would also make an additional contri to the reallocated amount. Price tag of
Jill
$9.2 million in supplemental f through
The next steps
Get feed rom GERP members and bring back final plan to City Cound ding
all g the ER contribution of 3% retiree benefit contribution from the ICMA p a he
P for future years of service credit beginning 1/1/2011.
Section 108 Loan Program
Megan Bolin presented data on this topic for the purpose of determining whether the
Committee would support proceeding with a Section 108 Loan application.
The loan guarantees provision of the Community Development Block Grant (CDBG) Program.
The loan is the source of financing for economic development, housing rehabilitation, and
public facility projects.
Entitlement communities can leverage up to five times their annual CDBG allocation.
Benefit
Additional economic development tool
Supplements CDBG entitlement grant
Risk
CDBG entitlement must be pledged as collateral.
Loan Criteria
Consolidated Plan Et Annual Action Plan objectives
HUD national objectives
• CDBG eligible activity
• Public benefit
• Targeted areas
• Need for public assistance
• 1.20:1 debt coverage ratio
• 80% loan to value ratio
• Maximum 20-year loan term (flexible structure)
Interest rate = 90-day LIBOR plus 20 basis points
Committee does support proceeding with the application and stated that it is not necessary to
bring this topic to a Council Worksession.
2
ATTACHMENT 5
CITY OF FORT COLLINS
COMMUNITY DEVELOPMENT BLOCK GRANT MEETING
Meeting Minutes
November 4, 2010
Commission members attending:
Kay Rios, Vice Chair
Kristin Chatnani
Catherine Costlow
Michael Kulisheck
Jeff Taylor
Staff attending:
Ken Waido, Megan Bolin
Citizen/Guests Attending: None.
Vice Chair Rios called the meeting to order at 6:37, with a quorum present.
SECTION 108 APPLICATION DISCUSSION
Megan Bolin provided Commission members with background on the Section
108 Application. Bolin met with the City's Finance Committee in April and
received their approval to more forward. The application has been completed
and is ready for HUD approval. Bolin reported this is the final round of reviews,
which includes the CDBG Commission, the Affordable Housing Board, and the
Economic Advisory Commission. Staff is scheduled to present the Application to
City Council and ask them to adopt a resolution allowing the City to submit the
application on December 21. Bolin stated this is still a draft application and staff
would answer questions from the Commission members. Bolin explained that
the City is an eligible borrower, but traditionally cities have a pass-through role.
Section 108 is meant to be used for economic development, stimulus, or as a
catalyst to start large projects. They would like to receive a recommendation
from the CDBG to present to City Council as to whether or not the City should
pursue the application process.
Bolin read Ms. Wagner's comments into the record as follows: "I would
recommend adding verbiage related to loan to cost limitations in addition to loan
to value." A borrower who brings their land to a construction deal shouldn't-get
their money back out based on an appraised value. In Ms. Wagner's comments,
she stated she could give Bolin a specific recommendation, but at a minimum
she recommends the lower of loan to cost or loan to value in the language.
Commission members discussed that recommendation stating that by using the
lower of either LTC or LTV, the borrower has to come up with some equity.
Community Development Block Grant Commission
Meeting of November 4,2010
Page 2
Commission members commented that the underwriting standards are not very
detailed. Bolin responded that the application is generic because it is asking
HUD to give us the capacity to borrow that money. If they approve this
application, the City will solicit specific projects for loan(s), and those applications
to the City would be much more detailed. The question was asked if HUD has
underwriting standards with which the City must comply. Bolin responded they
are very minimal and adhere to typical banking standards. If HUD approves this
initial application, staff plans to formulate a specific loan policy document to
supplement the application.
There was discussion regarding loan limits. Bolin indicated that $5 million would
be the maximum loan. Staff is hoping that the minimum will be a $1 million loan.
A lot of administrative time will be required to complete the paperwork for each
loan. Therefore, larger loans would be more efficient to report on and process.
Waido stated he would prefer there not be more than three projects because the
reporting is too involved.
There was discussion regarding payment structure. If the money is lent out now,
in four or five years, the payment structure could change adversely for the people
that borrow the money. What appeared to be economically viable at the time
may no longer be so. The City needs to proactively protect borrowers when
payments are restructured.
Commission members discussed their opinions about a recommendation to
move forward with the Section 108 Application. General consensus was for
approval, but that more detail be required during the underwriting process. It is a
potential tool, but a lot of due diligence will be needed. Commission members
asked what the Affordable Housing Board decided. Waido stated that three out
of the four Board members were comfortable with the application. The decision
was tabled to the December meeting. Meanwhile, Bolin will provide them with
additional information and the members will do some research.
Mr. Taylor moved that the CDBG Commission recommend to City Council that
the City more forward with the application to HUD for the Section 108 loan. It is
also recommended that the City do some further vetting of its specific
underwriting guidelines. Mr. Kulisheck seconded the motion. Motion passed (5-
0).
Waido stated that as recruiting time approaches for new CDBG members, we
can inform Ms. Poppaw that members are needed with banking background. A
Board member also suggested that staff could-use consultants if it becomes
necessary.
/I-- — ` ATTACHMENT 6
i Affordable Housing Board
Informal Meeting Minutes
December 2, 2010 Green Building Program will be
- — --- - - --- -- idoption.
HUD Section 108 Loan Guarantee Program Application: Board members stated that
Mr. Byers succinctly stated in his email the concerns expressed at the November 4, 2010
Board meeting. All Board members felt comfortable with that email being drafted into
letter form and presented to City Council.
Mr. Byers questioned staff as to whether some of the suggestions in the email were
feasible; i.e., minimum standards that would be adopted and sources of repayment other
than CDBG Funds. He asked if there was a possibility that the City would consider
identifying other sources of repayment. Bolin stated she had talked to the Finance
Committee. They understand that the general funds and tax increments may be another
source. The Finance Committee understands the importance of CDBG, and they would
at least consider trying to use some other source of funding before they let CDBG be
affected.
Ms. Papastathis asked if an 80% loan to value or 1.2 is pretty traditional for regular
lending practices. If someone is coming to the City to ask for additional funding to make
some sort of economic development project work, they might not have that. Mr.
Sollenberger stated that they are then considered high risk and that is what concerns the
Board. Ms. Papastathis said she understood that was what the money was intended for.
Mr. Blonder stated that on page 9, the application references ability to repay. 1.2 to 1
projected debt coverage ratio. Lower debt coverage ratio may be considered if the
project's financial condition allows. What does that mean? Mr. Sollenberger said it
means that if they are willing to sign personally.
Ms. Papastathis stated that it was her understanding that the use of the money was for the
City to assist other financers to get projects going for economic development. Mr.
Sollenberger replied that the concern is that if it's a high risk loan that could jeopardize
affordable housing. It was her opinion that if someone approaches the City with 70%
financing and they need another 10%, but debt to coverage ratio is a little too high, the
standard should be a little looser.
Mr. Blonder stated that he wants to have the $5 million available. It has good economic
value and good job creation value for the City. The Board knows and understands what
they are risking, so they are making a cautious recommendation.
Mr. Sollenberger made a motion that the Affordable Housing Board rewrite Mr. Byers'
email in letter form representing the Board and that all of the contents of the email be
contained in the letter for presentation to City Council. Mr. Blonder offered a friendly
amendment that Mr. Byers reword his email into a letter to City Council. Mr.
Sollenberger and Ms. Papastathis accepted the friendly amendment. Ms. Papastathis
seconded the motion. Motion passed: (6-1). Ms. Edwards voted in opposition to the
motion because she wants to see the letter before it is forwarded to City Council. Once
4
there was agreement that all Board members would review the letter before it was
forwarded to City Council, there was another vote. Motion passed (7-0).
Discussion: A Board member asked Bolin how she felt about the Board's
recommendation. She stated she was fine with it and would put a draft of tonight's
minutes in with the Agenda Item Summary that she will prepare.
Mr. Blonder asked Bolin if she was aware of other statistics on Section 108 loan defaults.
She responded that Denver has found it necessary to dip into their CDBG monies several
times. Their entitlement is significantly higher than the entitlement for the City of Fort
Collins. Mr. Sollenberger asked if it was different than the City's on a per capita basis.
Waido responded that it could be because their incomes could be lower and the amount
of minority population is higher.
Bolin added that Fort Collins does not really know how Denver uses their CDBG
funding. Every community is different. Fort Collins gives first priority to affordable
housing and economic development is an eligible use of CDBG funds. It may not be
quite as big a risk to affordable housing in other communities. Some communities will
identify CDBG as a repayment source.
Mr. Sollenberger stated that he thinks it is unacceptable to risk even one penny of CDBG
funds for economic development. The developer should not need these funds if they are
capitalized properly, and if they aren't they should not be in the business. He stated he
does not believe the City should subsidize entry-level players.
Ms. Papastathis stated that Colorado is different than South Dakota. In South Dakota
governing entities worked really hard to bring in any kind of economic development.
Sollenberger stated that he didn't think you would do it on the backs of their affordable
housing funds. Ms. Papastathis replied that she primarily worked with affordable
housing developers.
Bolin reiterated that the City does not have a specific project lined up. The application
sets the basic ground rules as far as the underwriting criteria, but it's meant to be general
so the City is able to use it as they need to when the time comes.
Fort Collins: Waido stated staff is preparing the documents to be adopte4lowt
Counct bruary. The public review drafts were distributed on NoveE14WIT There
were 26 boards ommissions that were being asked to review t cuments and
make comments and st ose are considered critical to ocess. The Affordable
Housing Board was one of those S.
Waido reviewed the document an se princip d policies that either directly
mention affordable housi ich the Board would be t ed in. He stated he then
wrote a reason w oard might be interested. Waido stated he d like the board
to make mmendation to City Council in January regarding the policie ifically
r to affordable housing and other principles and policies that the Board wants.
5
ATTACHMENT 7
December 3, 2010
To: Fort Collins City Council
From: Affordable Housing Board
Re: Section 108 Application to HUD
The Affordable Housing Board (AHB) has reviewed the City's proposed application to
the U.S. Department of Housing and Urban Development for a Section 108 Loan
Guarantee in the amount of$5,000,000.
The AHB agrees with the CDBG Commission that this loan guarantee program would
put a new `tool' in the City's toolbox to assist with economic development,job creation,
etc. The ultimate goal of these activities would be the creation of jobs for low to
moderate income individuals. Because of this, the Loan Guarantee program certainly
warrants our sincere consideration.
The AHB has voiced some concerns over the program however that we would like you to
consider: These concerns are:
1. That these funds would be lent into a project with significant risk, and that those
risks may, or may not, be properly analyzed.
2. That these funds would all be lent to one project, or a few large projects, rather
than several smaller projects. This would substantially increase the risk to the
City in the event of default.
3. That the City wouldn't have a clear course of action and secondary repayment
source defined for these funds, in the event that the City's borrower defaults.
In reviewing some of the examples from other City's that have used this program, we
noticed that many of them indicated how their respective City proposed to repay the loan,
and where those funds would be generated. In some cases, these sources of repayment
included revenues to the City that were in addition to, and outside of, funds received from
the City's borrower in repayment of the loan.
The AHB has voted to cautiously recommend to City Council they proceed with the
Section 108 loan application. In addition, however, the AHB would like to recommend
to Council the following items:
1. Council include lending professionals in their team of individuals that review and
recommend loan applications to HUD to assist in properly analyzing the risks
associated with each respective project considered.
2. The City develop minimum standards it would accept for any loan. i.e. 80% loan
to value, 1.20x debt coverage, personal guarantees, etc.
1
ATTACHMENT 7
3. With any loan application the City recommends for approval to HUD, they also
include a detailed analysis of how they propose to repay the loan that would
include funds not directly tied to the City's borrower. i.e. In the event of the
borrower defaulting to the City, the City would have another revenue source to
tap for repayment of the loan that would not put the CDBG funds in jeopardy.
The CDBG funds allocated to the City are critical tools the City has to maintain and
expand its support of Affordable Housing in the community. While this Section 108
loan program may provide additional support for low to moderate income individuals in
our community through the creation of jobs, it is imperative that these CDBG funds not
be put at undue risk. If the City were to lose these funds due to a default in this loan
guarantee program it could severely hamper the City's ability to support Affordable
Housing for several years to come.
Please accept our support of the Section 108 Loan Guarantee Program with the
recommendations noted above to help control and reduce the risk of the program.
The Affordable Housing Board
2
RESOLUTION 2010-076
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE CITY MANAGER TO SUBMIT TO THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
AN APPLICATION FOR THE SECTION 108 LOAN GUARANTEE PROGRAM
WHEREAS, the Community Development Block Grant (CDBG) is an ongoing grant
administration program funded by the Department of Housing and Urban Development(HUD);and
WHEREAS,the City of Fort Collins is an entitlement public entity under HUD regulations
and has received CDBG Program funds since 1975; and
WHEREAS,Section 108 is the loan guarantee provision of the CDBG program and provides
communities with a source of financing for economic development, housing rehabilitation, public
facilities, and large-scale physical development projects (the "Loan Guarantee Program"); and
WHEREAS, the City of Fort Collins has prepared an application to HUD requesting
$5,000,000 from the Loan Guarantee Program (the "Application") to create an economic
development loan pool (the "Loan Pool"); and
WHEREAS, a copy of the Application, dated December 21, 2010, is on file in the Office of
the City Clerk and available for review; and
WHEREAS,if the Application is accepted by HUD and the City makes loans from the Loan
Pool, the City would be obligated to repay the loans to HUD; and
WHEREAS, the HUD regulations require the City to pledge its current and future CDBG
entitlement grants and provide additional security as collateral for any loans the City makes from the
Loan Pool; and
WHEREAS,the City intends to require security from any borrowers to whom the City loans
funds from the Loan Pool; and
WHEREAS, on August 5, 2009, the City held a public hearing to solicit comments on the
Application,and the Application was made available on the City's website,but the City received no
comments; and
WHEREAS, On April 19,2010, staff presented the Application to the City Council Finance
Committee,which directed staff to submit the Application for the City Council's consideration;and
WHEREAS,the Community Development Block Grant Commission at its regular meeting
on November 4, 2010, and the Affordable Housing Board at its regular meeting on December 2,
2010, both recommended that the City Council adopt this Resolution; and
WHEREAS, The City has included the use of Section 108 Loan Guarantee financing as an
economic development tool in its Annual Action Plan and Consolidated Plan for HUD; and
WHEREAS,the federal regulations governing the Loan Guarantee Program require the City
to submit with its Application to HUD an official resolution of the City's governing body authorizing
the City's official representative to submit the Application and any amendments to the Application,
and to execute any documents necessary to implement the Application and the Loan Guarantee
Program.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows;
Section 1. That the City Manager is hereby authorized to submit the Application to HUD
in substantially the form that is on file in the Office of the City Clerk, including all understandings
and assurances contained in the Application, along with such changes or amendments to the
Application as the City Manager,in consultation with the City Attorney,determines to be necessary
or appropriate to protect the interests of the City or effectuate the purposes of this Resolution.
Section 2. That the City Manager is hereby authorized and directed to act in connection
with the Application, including providing such additional information to HUD as may be required,
and executing such documents as may be necessary in order to implement the Application and to
issue debt obligations pursuant thereto.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 21 st
day of December A.D. 2010.
Mayor
ATTEST:
City Clerk