Explanation
BACKGROUND: This legislation will authorize the Director of the Department of Development to enter into a contract with Columbus Neighborhood Housing Services (CNHS). The purpose of this contract is to ensure the orderly and proper dissolution of the corporation and liquidation and return of assets to original sources.
Columbus Neighborhood Housing Services has received Community Development Block Grant (CDBG) funds from the City of Columbus since at least 1982 for the purpose of operating a home improvement and down payment revolving loan fund (RLD). This year the Board of CNHS has evaluated the current and potential capacity of the organization and decided that it is in the best interests of the investors and borrowers from CNHS to dissolve, liquidate assets and transfer the loan portfolio to its respective investors to ensure adequate loan servicing.
City Auditor Dorrian has directed that an accurate accounting of funds and assets be done and that funds are best used to ensure an orderly process. Funds from this contract will be used for a consultant to assist in handling the day-to-day activities to assist outside auditors and manage the transition, to arrange loan serving agreements, to segregate the loan portfolio and transfer ownership of the loans to investors, to collect, review, index, store and/or dispose of aged or unneeded files, to liquidate fixed assets, to identify the source of all capital assets and to return the remainder to the source. Contract funds will also be used for office expense such as rent, telephone, copying, legal expenses, an outside audit and outstanding payables. This is expected to take six months.
FISCAL IMPACT: $90,000 has been allocated for this purpose from the CDBG fund. The funds are available through the cancellation of Auditors Certificate AC 020226.
Title
To authorize the Director of the Department of Development to enter into contract with Columbus Neighborhood Housing Services; to authorize the expenditure of $90,000 from the 2003 Community Development Block Grant Fund; and to declare an emergency. ($90,000)
Body
WHEREAS, the Board of Directors of Columbus Neighborhood Housing Services finds it in the best interest of the investors and borrowers to dissolve the corporation and arrange for the orderly transfer and return of assets to the City of Columbus and other investors, and
WHEREAS, Columbus Neighborhood Housing Services has received Community Development Block Grant (CDBG) funds from the City of Columbus since at least 1982 for the purpose of operating a home improvement and down payment revolving loan fund; and
WHEREAS, City Auditor Dorrian has directed that an accurate accounting of funds and assets be done and that funds are best used to ensure an orderly process; and
WHEREAS, the Director of the Department of Development desires to enter into a contract with Columbus Neighborhood Housing Services to retain a consultant who will oversee the orderly and proper dissolution of the corporation and liquidation and return of assets to original sources; and
WHEREAS, the Director of the Department of Development requests the cancellation of Auditors Certificate AC020226 to provide the funds necessary for this contract; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, in that it is immediately necessary to enter into contract with Columbus Neighborhood Housing Services in order to preserve the public health, peace, property, safety, and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development be and is hereby authorized to enter into a contract with Columbus Neighborhood Housing Services for the activities necessary to dissolve the corporation.
Section 2. That this contract is awarded pursuant to Section 329.15 of the Columbus City Codes, 1959 as amended.
Section 3. That for the purpose as stated in Section 1, the expenditure of $90,000 or so much thereof as may be necessary, be and is hereby authorized to be expended from the Department of Development, Department No. 44-10, Fund 248, Object Level One 03, Object Level Three 3337, OCA Code 440260.
Section 4. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.