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5. Grant Acceptance - Neighborhood Stabilization Program201 1 st Avenue East Kalispell, MT 59901 406.758.7740 Fax: 406.758.7758 City of Kalispell • www.kalispell.com Office of Community & Economic Development TO: Honorable Mayor Kennedy; City Council Members CC: Jane Howington, City Manager FROM: Katharine Thompson, Community Development Manager MEETING DATE: October 5, 2009 RE: Neighborhood Stabilization Program $4 Million Grant Acceptance BACKGROUND: City Council has listed moderate to low income housing as a priority of the City of Kalispell and included this in the Growth Policy 2020 planning document. Following this direction, and with Council approval at the June 15, 2009 meeting, the Community and Economic Development (CED) Department submitted an application to the Montana Department of Commerce, Community Development Division for $4 million in Neighborhood Stabilization Program (NSP) funding for the following purpose: To purchase foreclosed upon homes within the city of Kalispell to be placed in a newly formed community land trust and sold to income qualified households. Of these qualifying households, 25% must have household income less than 50% of the area median income and 75% will have household income between 80% and 120% of area median income (addressing what is commonly referred to as workforce housing). The NSP grant was sponsored by the City of Kalispell and written in partnership with Community Action Partnership of Northwest Montana under the Memorandum of Understanding approved by Council in Resolution No. 5372 at the June 15, 2009 meeting. RECOMMENDATION: City Council accept the Montana Department of Commerce, Community Development Division's approval of $4 million for Kalispell's Neighborhood Stabilization Program Community Land Trust project. FISCAL IMPACT: The City will handle this as a pass -dim grant with Community Action Partnership responsible for accounting of the grant funds and on -going implementation of the project. The NSP program allows for a 5% administrative fee and this will be directed to CAP. Several years ago CED earmarked $20,000 toward a CLT project. The balance of the earmark is $18,000. Council has committed these funds through a Memorandum of Understanding with Community Action Partners for the submission of the NSP grant application and state filing of the community land trust formative documents. The $18,000 will come from the CED Operations Fund and is a one-time contribution to the CLT. CAP has committed $24,000 to the project. Respectfully submitted, K tharine Thompson ane Howington Community Development Manager City Manager Community and Economic Development d Department of Commerce Community Development Division 301 S. Park Ave. * P.O. Box 200523 * Helena, Montana 59620-0523 Phone:406-841-2770 * Fax: 406-841-2771 * TDD: 406-841-2702 * http://comdev.mt.gov/ September 17, 2009 Mayor Pamela B. Kennedy PO Box 1997 Kalispell MT 59901 Dear Mayor Kennedy, The Montana Department of Commerce (MDOC) has concluded the review of your program application to the Neighborhood Stabilization Program (NSP). As you are aware, the purpose of NSP funds is to address the negative ramifications of the national housing crisis that has occurred over the past five years, primarily the increase of foreclosed, abandoned, and vacant properties. While Montana has not exhibited the extent of housing foreclosures as other areas of the nation, Governor Brian Schweitzer recognizes the need for assistance to local governments and Montana Indian tribes to improve our neighborhoods across Montana. He has worked very hard to make these funds available and to quickly and effectively utilize and distribute the funds to meet the needs of worthy recipients such as your community. I am pleased to inform you that your general program proposal for the Northwest Montana Community Land Trust to purchase and rehabilitation of foreclosed or abandoned homes and provide financing mechanisms to families or individuals with incomes at or below 120% area median income with emphasis on families earning less than 50% area median income, as set forth in your application to the MDOC dated July 27, 2009, has been approved as eligible for NSP funds. Please be aware that MDOC will need to begin meeting the 25% set aside as the highest priority as directed by NSP regulations; therefore, we would ask that your project activities focus first on specific projects that will help meet this set aside before requesting other non set aside funds. Once you have found a project that meets the approved eligible NSP purpose as listed above, please send project specific information as listed below for MDOC approval. Once MDOC has approved the specific project a specific award of funds to your grant contract will be made. BRIAN SCHWEITZER, GOVERNOR 09/08/2009 Page 2 of 2 A grant contract between you and the MDOC outlining the terms and conditions of your use of the NSP funds for the project(s) set forth above will be forthcoming. MDOC will approve and award any additional NSP funds for successive project activities identified for your approved program on an incremental basis. Such additional projects must be reviewed, approved, and processed by MDOC as amendments to your grant contract. The following information, contained in the NSP Project Request Form, will be required for each additional project proposal: 1. Location address of specific project; 2. Appraisal of property; 3. Documentation that property has been foreclosed, abandoned, or vacant (i.e. letter from financial institution) ; 4. Proposed budget of the project; and 5. Projected timeline of completion of project. By accepting this award, you agree to carry out the grant in accordance with the terms, conditions, and assurances contained in the grant application, the MDOC Community Development Block Grant (CDBG) and Neighborhood Stabilization Program (NSP) Grant Administration Manual, the Housing and Economic Recovery Act (HERA) of 2008, and any other requirements for NSP as set forth by HUD, including but not limited to the Federal Register Notice dated October 6, 2008, Vol. 73, No. 194 and any revisions thereto. You must submit detailed quarterly reports regarding your use of NSP funds as well as the number of households assisted as a result of the project(s). A follow up letter regarding specific start up activities will be sent to you by NSP staff. We look forward to working with you to complete your program objectives. If you have any questions regarding this award, please contact Program Manager, Jennifer Olson; by telephone at (406) 841-2773 or email at jeolson@mt.gov. Sincerely, !1 Anthony . Preite, Director Department of Commerce Cc: Katharine Thompson, Office of Community and Economic Development Doug Rauthe, Community Action Partnership of Northwest Montana