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Agenda 03/26/2013 Item #16D3W 3/26/2013 16.D.3. EXECUTIVE SUMMARY Recommendation to authorize a budget amendment recognizing $64,822.16, in_ program income revenue generated by properties acquired under the Neighborhood Stabilization Program (NSP1). OBJECTIVE: To accurately account for program income generated from NSPlactivities. CONSIDERATIONS: Collier County has used Neighborhood Stabilization Program funds to acquire and rehabilitate foreclosed and abandoned properties. Once rehabilitation is complete, the homes are sold to income - qualified persons or families. Upon sale, the net proceeds are returned to Collier County as program income to be used for other eligible Neighborhood Stabilization Program activities, including administration. Neighborhood Stabilization Program funds have also been used to provide affordable rental housing according to the requirement that 25% of NSP funds be used to provide benefit to households whose income is no greater than 50% of area median income. The following tables list the properties which generated the program income. Property Address December 2012 January 2013 February 2013 Net Proceeds Down Payment Rent Rent Rent (Total Rents) 5318 Gilchrist St Naples Fl and Rehab) price Assistance Costs 34113 $500 $500 $500 $1,500 5320 Gilchrist St Naples Fl venue NE, 34113 $550 $550 $550 $1,650 5322 Gilchrist St Naples Fl Naples 34113 $550 $550 $550 $1,650 5324 Gilchrist St Naples Fl $114,283.98 ($4,910.23) $109,373.75 $71,000 34113 $550 $550 $550 $1,650 5326 Gilchrist St Naples Fl 34113 $650 $650 $650 $1,950 5328 Gilchrist St Naples Fl 34113 $550 $550 $550 $1,650 5330 Gilchrist St Naples Fl 34113 $550 $550 $550 $1,650 5334 Gilchrist St Naples Fl 34113 $550 $550 $550 $1,650 5336 Gilchrist St Naples Fl 34113 $550 $550 $550 $1,650 TOTAL $5,000 $5,000 $5,000 $15,000 Property Address Total Expenditures Unrecoverable Funds* Expenditures (Acquisition Contract ** Down Payment Misc Closing Net Proceeds by Property and Rehab) price Assistance Costs (Revenue) 4040 3.1 st venue NE, $114,283.98 ($4,910.23) $109,373.75 $71,000 ($19,170) ($2,007.84) $49,822.16 Naples TOTAL $114,283.98 ($4,910.23) $109,373.75 $71,000 ($19,170) ($2,007.84) $49,822.16 Packet Page -744- 3/26/2013 16.D.3. *Unrecoverable funds are those expenditures for carrying the property before sale (i.e. lawn care and routine maintenance). * *The "Contract Price" is determined per the policy set forth in the County approved NSP Administrative Plan regarding the final _sales price. The final sale price m4, be lesser of (a) the aggregate of all acquisition, rehabilitation, and redevelopment costs, minus $1, 000, rounded down to the nearest thousand, or (b) the appraised value established by a licensed third parry appraiser during the process of qual Ong for first mortgage financing from a private financial institwtion. Per Federal NSP Policy Alerts, the maximum sales price for any property purchased and rehabilitated with NSP funds must be less than the total expenditures minus carrying costs (Unrecoverable Funds) per property. The "Down Payment Assistance" (i.e. subsidy retention) is secured by a second rortgage recorded in the Public Records of Collier County and will be repaid when a home is sold, refinanced, or no longer used as a principal residence. The "Net Proceeds" listed above represents the amount of net revenue generated in compliance with grant regulations and does not represent a profit figure. With limited exceptions, "program income" is defined at 24 CFR 570.500 as "gross income received by the recipient or a subrecipient directly generated from the use of CDBG funds." Using this definition any revenue generated through the sale or rental of a NSP property will generate program income. Program income must be used towards NSP eligible uses also known as eligible activities (Acquisition, Rehabilitation, Redevelopment, Land Banking, and Demolition). Program income may also be used to pay developer fees for the NSP program through program delivery to a developer. Program income generated from these units will, in addition, be used to fund the costs of improvement, maintenance and upkeep of the rental properties. Any remaining program income at the time of grant closeout will be disposed of per Federal guidelines. The Department of Housing and Urban Development (HUD) plans to publish closeout guidelines pertaining to program income for grantees during the early part of 2013. This revenue will be used in compliance with federal grant regulations and will fund eligible expenses, including administration. The chart below illustrates how the revenue will be properly allocated between allowable administration (10 %) and program activities when the budget amendment is completed. Property Address Net Proceeds Admin Program Activities 5318 Gilchrist St Naples Fl 34113 $1,500 $150 $1,350 5320 Gilchrist St Naples F134113 $1,650 $165 $1,485 5322 Gilchrist St Naples Fl 34113 $1,650 $165 $1,485 5324 Gilchrist St Naples F134113 $1,650 $165 $1,485 5326 Gilchrist St Naples F134113 $1,950 $195 $1,755 5328 Gilchrist St Naples Fl 34113 $1,650 $165 $1,485 5330 Gilchrist St Naples F134113 $1,650 $165 $1,485 Packet Page -745- 3/26/2013 16.D.3. Property Address Net Proceeds Admin Program Activities 5334 Gilchrist St Naples Fl 34113 $1,650 $165 $1,485 5336 Gilchrist St Naples FI 34113 $1,650 $165 $1,485 TOTAL ES 15,000 $1,500 $13,500 Property Address Net Proceeds Admin Program 4040 31st Avenue NE, Naples $49,822.16 $4,982.22 $44,839.94 Total Net Proceeds $49,822.16 $4,982.22 $44,839.94 Any remaining program income at the time of grant closeout will be disposed of per Federal guidelines. FISCAL IMPACT: A budget amendment is necessary to recognize program income revenue in the amount of $64,822.16 within Urban Improvement Grants Fund 121, NSP1 Project 33050. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney's Office, raises no legal issues, and requires majority vote for Board approval. - JBW GROWTH MANAGEMENT IMPACT• The Neighborhood Stabilization Program facilitates the goals, objectives and policies set forth in the Housing Element of the Growth Management Plan. RECOMMENDATION: To recognize $64,822.16 in revenue and authorize the corresponding budget amendment. Prepared By: Geoffrey Magon, Grants Coordinator, Housing, Human & Veteran Services Packet Page -746- 3/26/2013 16.D.3. COLLIER COUNTY Board of County Commissioners Item Number: 16.16.D.16.D.3. Item Summary: Recommendation to authorize a budget amendment recognizing $64,822.16 in program income revenue generated by properties acquired under the Neighborhood Stabilization Program (NSP1). Meeting Date: 3/26/2013 Prepared By Name: MagonGeoffrey Title: Grants Coordinator 2/28/2013 8:45:50 PM Approved By Name: LarsenKathleen Date: 3/5/2013 12:30:34 PM Name: GrantKimberley Title: Interim Director, HHVS Date: 3/7/2013 11:07:27 AM Name: SonntagKristi Date: 3/7/2013 11:14:41 AM Name: AlonsoHailey Title: Operations Analyst, Public Service Division Date: 3/7/2013 1:56:31 PM Name: CarnellSteve Title: Director - Purchasing/General Services,Purchasing Date: 3/11/2013 1:06:09 PM Name: Joshua Thomas Title: Grants Support Specialist, Date: 3/12/2013 3:17:36 PM Name: WhiteJennifer Packet Page -747- Title: Assistant County Attorney,County Attorney Date: 3/19/2013 8:30:21 AM Name: Klatzkowieff Title: County Attorney Date: 3/19/2013 8:41:45 AM Name: FinnEd Title: Senior Budget Analyst, OMB Date: 3/19/2013 9:44:56 AM Name: StanleyTherese Title: Management/Budget Analyst, Senior,Office of Manage Date: 3/19/2013 9:51:01 AM Name: OchsLeo Title: County Manager Date: 3/19/2013 3:31:42 PM Packet Page -748- 3/26/2013 16.D.3. 3/26/2013 16. 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