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02. Resolution 5535 - NSP3 Grant Acceptance & Budget AppropriationCity of Kalispell Post Office Box 1997 - Kalispell, Montana 59903 w Telephone: (406) 758-7701 Fax: (406) 758-7758 MONTAIVA REPORT TO: The Honorable Mayor Fisher and Kalispell City Council Members FROM: Katharine Thompson, Community Development Manager SUBJECT: Neighborhood Stabilization Program 3 (NSP3) Grant Award MEETING DATE: December 5, 2011 BACKGROUND: The City of Kalispell has identified "affordable housing to meet the needs of low and moderate -income residents" as a policy within its Kalispell Growth Policy 2020. Under Neighborhood Stabilization Program 1 (NSP1) funding awarded to the City of Kalispell in October 2009, sixteen (16) foreclosed and abandoned homes were purchased and placed in the newly formed Northwest Montana Community Land Trust for the purpose of selling to income qualified low -to -moderate income households. Minor rehabilitation work has been completed on these homes, the Community Land Trust developed the necessary ground lease and other relevant documents, and the first house sale is set to close in December of this year. Under the Neighborhood Stabilization Program 3 (NSP 3), $1.5 million will be utilized to purchase additional foreclosed upon homes within the city of Kalispell. This second grant will be implemented just as the first has been with the City and Community Action Partnership of Northwest Montana continuing to work together under the Memorandum of Understanding approved by City Council in 2010. The purpose of the NSP 3 grant is: To purchase foreclosed upon homes within the city of Kalispell to be placed in the Northwest Montana Community Land Trust and sold to income qualified households. Of these qualifying households, 27% must have household income less than 50% of the area median income and 73% will have household income between 51 % and 120% area median income -- largely addressing what is commonly referred to as workforce housing. FISCAL IMPACT: The City will handle the NSP 3 grant in the same manner as NSP 1 and that is as a pass-duu with Community Action Partnership responsible for accounting of grant funds and on -going implementation and reporting of the project. The NSP 3 program allows for a 5% administrative fee and this will be directed to CAP for the above tasks. RECOMMENDATION: City Council approve the budget resolution allowing for the City to oversee $1.5 million in Neighborhood Stabilization Program 3 funds. Respectfully submitted, *Kata®rine&ThomP­son Oiane Howington Community Development Manager City Manager _ty-IN A Department of Commerce l r _ 301 S. Park Ave. * P.O. Box 200501 * Helena, Montana 59620-0501 Phone 406-841-2700 * Fax 406-841-2701 * TDD: 406-841-2702 * http://commerce.mt.gov November 22, 2011 Mayor Tammi Fisher City of Kalispell PO Box 1997 Kalispell, MT 59901 RE: Notice of Grant Award — Neighborhood Stabilization Program (NSP3) Dear Mayor Fisher: The Montana Department of Commerce (Commerce) notified the City of Kalispell of the conditional grant award of NSP3 funds on July 6, 2011, stating if sufficient funding became available to Commerce during the NSP3 timeframe to fund the City's project, you would be notified. It is my pleasure to announce that the City of Kalispell NSP3 grant application is fully awarded. This letter serves as formal notification that Commerce has received sufficient funding to award $1,500,000 in NSP3 funds to acquire foreclosed, abandoned, or vacant property to be rehabilitated and sold to low, moderate or middle income households, as stated in the City's application. This award is made possible through the Wall Street Reform Act of 2010 which allocated $5 million to Montana through the U.S. Department of Housing and Urban Development (HUD). Awardees must complete all project start-up requirements set forth in the CDBG/NSP 2011 Grant Administration Manual. These include, but are not limited to, the submission of a finalized budget and implementation scheduled, management plan, documentation of the property meeting NSP3 requirements, obtaining firm commitment of other funding sources, completion of environmental requirements, and executing a contract between the Department of Commerce and the City of Kalispell. When all start-up requirements have been met, you will receive a Release of Funds letter notifying you that you can begin to draw down funds for your project. If your project fails to meet start-up requirements, any costs incurred prior to the Release of Funds letter will be your sole responsibility. You will be contacted directly with more information in the upcoming weeks by the NSP staff assigned to your project. In the meantime, if you have any questions, please call Ms. Kelly Casillas, Division Administrator of our Community Development Division at 406-841-2770 or email DOCNSP(G)mt.gov . Congratulations on your award! We look forward to working with you to successfully complete your project. 7orewinde , ire or Department of Commerce 1"AW11,91RU1161 "a WHEREAS, on August 15, 2011, the City Council adopted Resolution 5513 adopting the annual appropriations of the City of Kalispell for fiscal year 2011-2012; and WHEREAS, on November 22, 2011, the City of Kalispell received additional Neighborhood Stabilization Program funds in an amount of up to $1,500,000 in order to assist Community Action Partnership to purchase foreclosed homes within the City of Kalispell to be placed in a community land trust and sold to income qualified households; and WHEREAS, said funds available to the City were not appropriated pursuant to Section 7-6- 4271, and an increase of appropriation authority is needed. NOW • BE IT RESOLVED• •, THE CITY • KALISPELL AS FOLLOWS: SECTION I. That the City of Kalispell hereby appropriates the sum of up to $1,500,000 and directs the Finance Director to allocate said amount to the following program activities: REVENUE CODE 2952-000-331011-000 $1,500,000 Grant Revenue EXPENDITURE CODE 2952-480-470210-354 $1,500,000 Contract Services Tammi Fisher Mayor ItT11�li�1C`III� Theresa White City Clerk