1 CITY OF NAPA CITY COUNCIL
AGENDA REPORT
CONSENT CALENDAR
AGENDA ITEM 13. B.
Date: June 04, 2013
To: Honorable Mayor and Members of City Council
From: Rick Tooker, Community Development Director
Prepared by: Lark Ferrell, Housing Manager
Subject: Adopt a resolution to approve Amendments to CDBG Agreements with Family Services of the North Bay
ISSUE STATEMENT:
Adopt a Resolution approving Amendment Number 2 to Agreement Number 6355, Amendment Number 1 to Agreement Number 6505, and Amendment Number 1 to Agreement Number 6766 between the City and Family Services of the North Bay Regarding Community Development Block Grant Program Loans.
DISCUSSION:
The non- profit organization, Family Services of the North Bay (“ Family Services”) operates supportive housing programs in Napa for low- income, mentally disabled adults. In 1992, the City provided Family Services with a deferred $ 150,000 loan from the City’ s Community Development Block Grant ( CDBG) Program. Family Services utilized these funds to acquire 713 Carolina Street. In 1993, Family Services received a second deferred $ 150, 000 CDBG loan for the acquisition of 2445 Yajome Street. Both of these properties are operated as supportive housing for mentally disabled adults.
Finally, in 1995 the City provided a third CDBG loan in the amount of $ 150, 000 to Family Services. These funds were used to acquire 709 Franklin Street, which houses Family Services’ administrative offices. Family Services also operates out- patient counseling and other mental health service programs at this location.
Family Services has requested the City amend the CDBG agreements for these properties to extinguish the notes previously recorded against the properties securing the loan obligation in exchange for recording deed restrictions against each of the properties. Under the terms of the deed restrictions, the properties at 713 Carolina Street and 2445 Yajome Street would continue to be operated as supportive housing for mentally disabled adults until such time as the City determines there is no longer a need for this type of housing. Similarly, 709 Franklin Street would continue to be used as administrative offices for housing programs until such time as the City sees no further benefit in doing so.
The City’ s CDBG Program is a federally funded program. It provides funding for programs and projects primarily benefitting low- income persons. Under the current 145-
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2 terms of the Family Services’ agreements, each loan bears no interest and is due in full upon the earlier of the sale of the property or when the property is no longer used for its intended purpose. Because the proposed amendments require deed restrictions ensuring the properties are used for supportive housing programs ( and the administration of supportive housing programs) until the City determines there is no further need for these services, the CDBG objectives would continue to be realized under the proposed amendments.
Under the terms of the proposed amendments, the Gasser Foundation (“ Gasser”) would provide a guaranty for building maintenance and repairs for up to $ 25, 000 per year and building maintenance for up to $ 10, 000 per year at each of the properties. In exchange for this guaranty, if Family Services decides to sell any of the properties, Gasser would be given first right of refusal.
Also, under the proposed amendments, Family Services cannot apply for CDBG funding for capital improvements or repairs at the sites and must maintain the properties in accordance with all City of Napa building codes and federal Housing Quality Standards.
The City has made CDBG loans to two other local non- profit agencies to acquire properties. These properties are currently owned and operated by Community Action Napa Valley and by Napa Emergency Women’ s Services. Neither of these two agencies wishes to pursue similar amendments to their CDBG agreements at this time.
FINANCIAL IMPACTS:
There is no General Fund impact from this resolution. However, under the terms of the proposed amendments, the City would extinguish a total of $450,000 in CDBG loans made to Family Services. Under the existing agreements, these loans must be repaid if the properties are ever sold.
CEQA:
The Community Development Director has determined that the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060( c).
DOCUMENTS ATTACHED:
1. Attachment 1: Resolution
2. Attachment 2: Amendment Number 2 to Agreement Number 6355
3. Attachment 3: Amendment Number 1 to Agreement Number 6505
4. Attachment 4: Amendment Number 1 to Agreement Number 6766 NOTIFICATION:
Community Action Napa Valley and Napa Emergency Women’ s Services were notified about the proposed amendments.
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3 RECOMMENDED ACTION:
Staff recommends that the City Council move, second and approve each of the actions set forth below, in the form of the following motion. Move to:
Adopt a Resolution approving Amendment Number 2 to Agreement Number 6355, Amendment Number 1 to Agreement Number 6505, and Amendment Number 1 to Agreement Number 6766 between the City and Family Services of the North Bay Regarding Community Development Block Grant Program Loans 147-
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