Title
Ordinance Approving and Authorizing Loan Guarantee Contract Under Section 108 of the Housing and Urban Development (HUD) Act of 1974 for Downtown Safety Improvements Project
Recommended Action
City Manager Recommendation:
Move to suspend Council's usual Guideline and approve on first and final reading the ordinance authorizing Section 108 loan guarantee contract for Downtown Safety Improvements Project.
[Note: Two-thirds affirmative vote of those present is needed for first and final reading.]
Report
Issue:
Should the City enter into a loan agreement with U.S. HUD Department for federal Section 108 funds to fund the Downtown Safety Improvements Project?
Staff Contact:
Leonard Bauer, Deputy Director, Community Planning and Development, 360.753.8206
Presenter(s):
Leonard Bauer, Deputy Director, Community Planning and Development
Background and Analysis:
The City Council approved Downtown Safety Improvements as Olympia's first project to be funded from its Section 108 loan program on January 14, 2014, after a 30-day public comment period. The project includes installing alleyway lighting in the downtown core, and sidewalk and ADA improvements at State and Columbia Streets near the Olympia Senior Center. A summary of the project is attached.
HUD has completed its review of the project and the loan documents attached to the ordinance. To meet Council's goal of completing the alleyway lighting portion of the project for winter of 2014-2015, it would be necessary to suspend second reading and approve the ordinance at this time.
The total loan amount is $325,000. Terms of the loan are included as attachments to the ordinance. Repayment of the loan would be pledged from the City's future CDBG federal allocations over a five-year repayment period and must be backed by the full faith and credit of the City of Olympia.
HUD approved Olympia's Section 108 Loan Guarantee Fund in 2013 in the amount of $1,756,000. The balance of the loan fund will continue to be available for other eligible activities through September 30, 2018, or until all funds are expended. Eligible activities include certain types of land acquisition, clearance, demolition, removal, site preparation, housing rehabilitation, economic development activities, or public facilities.
Since a public hearing has been held, staff recommends adopting the ordinance on first and final reading so that documents can be quickly executed.
Neighborhood/Community Interests (if known):
The Downtown Safety Improvements Project is supported by the Olympia Downtown Association and is of interest community-wide. A public hearing and 30-day public comment period were held before the City Council approved the project in January 2014.
Options:
1. Suspend second reading and approve ordinance on first reading to enter into loan agreement for Downtown Safety Improvements Project.
2. Consider ordinance on first reading and direct staff to schedule for second reading.
3. Decide not to adopt ordinance, and not enter into loan agreement for Downtown Safety Improvements Project.
Financial Impact:
$325,000 in Section 108 loan funds to the City would be approved by HUD for this public project. Repayment of the loan would be pledged from future federal allocations of CDBG funds to the City over a five-year period, and must be backed by the full faith and credit of the City of Olympia. This means the City's debt capacity is reduced by the outstanding amount of the loan. The balance of $1,431,000 will be available to loans for eligible activities until 2018.