HomeMy WebLinkAbout15-001 CDBG Terms and Limits of the Loan Program Resolution 15-001
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RESOLUTION NO. 15-001
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON RELATED TO THE COMMUNITY DEVELOPMENT BLOCK GRANT
FUND, AMENDING THE TERMS AND LIMITS OF THE LOAN PROGRAM, AND
RESCINDING AND SUPERSEDING RESOLUTIONS 88-58 AND 09-012
WHEREAS,the City of Port Townsend received $54,716 in Community Development
Block Grant Funds during 1988 and appropriated $50,216 for loans to replace sidewalks and
improve buildings in the business districts of the city; and,
WHEREAS,the Port Townsend City Council established a HUD Loan Panel to screen
applications and approve loans under guidelines established by the Department of Housing and
Urban Development; and,
WHEREAS, on August 2, 1988, the City adopted Resolution 88-58 setting terms and
limits for the Community Development Block Grant Fund("Fund"); and,
WHEREAS,the Council amended those terms and loan limits in Resolution 09-012,
adopted March 16, 2009; and,
WHEREAS, current City practice is to require that the property owner who obtains a
loan through the program pay the owner's contractor first, then submit for reimbursement; and,
WHEREAS,the HUD Fund Loan Committee ("Committee") has conveyed to the City
that several eligible business have not applied for the program, citing the need to obtain interim
financing to carry them through until the City reimbursed them; and,
WHEREAS, the Committee has requested that the City change its practice to allow the
City to pay on an invoice once the City has inspected the work and found it to be compliant with
City Code and the terms of the loan agreement; and,
WHEREAS,there are no restrictions in the HUD program, State, or City law that would
prohibit the City from changing its practice;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port
Townsend as follows:
Section 1. The City Council re-establishes the policies and for the HUD loan program as
follows:
1. All eligible property owners will be granted an equal opportunity to apply for loans
during the application periods established by the HUD Loan Panel.
2. Loans for sidewalk replacement must be at least $1,000 but may not exceed $5,000.
Resolution 15-001
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Loans for rehabilitation and preservation must be at least $1,000 but may not exceed $40,000.
3. The maximum term of the loans may not exceed ten years and all contracts will include
a "Due on Sale" clause with annual or semi-annual payments.
4. The interest rate on all contracts will be five percent(5%)per annum with a rebate
offered for early repayment according to the following schedule:
a. All interest charges will be rebated for loans paid off within 12 months of the date of
recorded lien.
b. All interest in excess of I% will be rebated for loans paid off within 24 months of the
date of recorded lien.
c. All interest in excess of 2%will be rebated for loans paid off within 36 months of the
date of recorded lien.
d. All interest in excess of 3%will be rebated for loans paid off within the 48 months of
the date of recorded lien.
e. All interest in excess of 4% will be rebated for loans paid off within the 60 months of
the date of recorded lien.
5. Final allocation of funds by the HUD Loan Panel will be made as soon as possible
after the close of the application period.
6. Interest charges and loan periods begin when the lien is recorded and funds are
disbursed.
7. Funds not disbursed within six (6)months of the "Notice of Award" may be
reallocated at the discretion of the HUD Loan Panel.
8. Each loan will be evidenced by a promissory note secured by a mortgage or deed of
trust recorded against the property. As a rule a title search will be made to establish ownership,
the cost of which will be paid by the property owner. However, in consideration of the cost for a
title search, the HUD Loan Panel may waive a title search for projects under$10,000.
9. Funds may be disbursed upon submission of an invoice for the work, and certification
by the appropriate City Departments that the work has been inspected and completed to the
applicable standards, and that the work performed is consistent with the work plan that was
approved by the City. The City will enact procedures to ensure that the contractor receives
payment for the allowable work performed.
Resolution 15-001
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Section 2. Resolutions 88-58 and 09-012 are rescinded and superseded by this Resolution.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this 5th day of January 2015.
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David King
Mayor
Attest: Approved as to form:
Joanna San ers, CMC Steven L. Gross
City Clerk City Attorney