Explanation
BACKGROUND: This legislation authorizes the Director of the Department of Development to enter into an agreement with the Affordable Housing Trust for Columbus and Franklin County (AHT) in partnership with the Whitney Young Collaborative (WYC). This legislation authorizes the expenditure of $700,000.00 of existing capital funds to the AHT and the amendment of the capital budget to allow for the transfer, appropriation and expenditure of $2,700,000 of funds from the Special Income Tax Fund. The funds provided by the agreement will be used to refinance and complete construction on the Whitney condominium project and provide capital funding for other housing projects on the Near East Side. The WYC has a 28 unit condominium project under development at 733 Mt. Vernon Avenue, Columbus. Changes in the housing market as well as changes to financing rules for purchase of condominiums as homeownership units has negatively affected the economics of this project. The most efficient and effective way of guarding against further market impacts is to refinance the private construction loan with City capital funds. A portion of these funds will be returned to the City upon sale of the units to homebuyers and can be used for other housing activities on the Near East Side.
The Housing Preservation Fund represents the City's commitment to the redevelopment of housing in the City's urban areas. The Whitney Young Housing Capital Fund (Fund 717) represents the City's commitment to the revitalization of urban neighborhoods.
Emergency action is necessary to allow for the best economic outcome for this project.
FISCAL IMPACT: The Development Department has $700,000.00 in the 2010 Capital Improvement Budget for Housing Preservation projects. For the remaining $2,700,000.00, bonds have yet to be sold necessitating a certification of $2,700,000.00 against the Special Income Tax Fund. Upon the sale of the bonds, the Special Income Tax Fund will be reimbursed.
Title
To authorize the Director of the Department of Development to enter into an agreement with Affordable Housing Trust for Columbus and Franklin County to refinance the construction loan for the completion of the Whitney Young Condominium Development; to authorize the appropriation of $2,700,000.00 from the Special Income Tax Fund; to authorize and direct the City Auditor to transfer $2,700,000.00 from the Special Income Tax Fund to the Whitney Young Housing Capital Fund; to authorize the appropriation of $2,700,000.00 within the Whitney Young Housing Capital Fund; to amend the 2010 Capital Improvement Budget; to authorize the expenditure of $2,700,000.00 from the Whitney Young Housing Capital Fund and $700,000.00 from the Housing Preservation Fund; and to declare an emergency. ($3,400,000.00)
Body
WHEREAS, the Department of Development, Housing Division desires to administer a Housing Preservation Fund from city bond proceeds; and
WHEREAS, the Department of Development, Housing Division desires to administer a Whitney Young Housing Capital Fund with funds from the Special Income Tax Fund; and
WHEREAS, the Department of Development desires to enter into an agreement with the Affordable Housing Trust for Columbus and Franklin County (AHT) in partnership with the Whitney Young Collaborative LLC (WYC) and to expend $3,400,000 in bond and special income tax proceeds; and
WHEREAS, these monies will be used to assist in refinancing and completing the site and building for 28 condominium units at 773 Mt. Vernon Avenue; and
WHEREAS, it is necessary to transfer funds from the Special Income Tax fund to this project; and
WHEREAS, the City will sell notes or bonds to fund the Whitney Young Housing Capital Fund and will reimburse the Special Income Tax Fund; and
WHEREAS, this transfer should be considered as a temporary funding method; and
WHEREAS, the aggregate principal amount of obligations which the City will issue to finance this fund is presently expected not to exceed $2,700,000; and
WHEREAS, the City anticipates incurring certain Original Expenditures (as defined in Section 1.150-2(c) of the Treasury Regulations (the "Treasury Regulations") promulgated pursuant to the Internal Revenue Code of 1986, as amended, with respect to the project described in the ordinance (the "Project"); and
WHEREAS, the 2010 CIB will be amended to reflect the transfer credited to Project No. 717001-100000; and
WHEREAS, emergency action is necessary to allow for the refinance to occur as quickly as possible and minimize the accrual of additional interest expense; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, Housing Division, in that it is immediately necessary to expend said funds thereby preserving the public health, peace, property, safety, and welfare; and 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 an agreement with Affordable Housing Trust for Columbus and Franklin County (AHT) to refinance the construction loan for the completion of the Whitney Young Condominium Development.
SECTION 2. That the sum of $2,700,000.00 be and is hereby appropriated from the unappropriated balance of the Special Income Tax Fund, Fund 430, and from all monies estimated to come into said fund from any and all sources and unappropriated for any other purpose during the fiscal year ending December 31, 2010 to the City Auditor, Department 22-01, Object Level One 10, Object Level Three 5502, OCA Code 902023.
SECTION 3. That the City Auditor be and is hereby authorized and directed to transfer said funds to the Whitney Young Housing Capital Fund, at such time as is deemed necessary by the City Auditor, and to expend said funds, or so much thereof as may be necessary
SECTION 4. That the amount of $2,700,000.00 is hereby transferred and appropriated to the Development Department, 44-01, Whitney Young Housing Capital Fund, Fund 717, Project No. 717001-100000, Object Level One 06, Object Level Three Code 6616, OCA 717001.
SECTION 5. That upon obtaining other funds for this project, the City Auditor is hereby authorized and directed to repay the Special Income Tax Fund the amount transferred under Section 2.
SECTION 6. That the City Auditor is authorized to establish proper accounting project numbers and to make any accounting changes to revise the funding source for any contract or contract modification associated with the expenditure of funds transferred in Section 4, above.
SECTION 7. That the City intends that this ordinance constitute an "official intent" for purposes of Section 1.150-2(e) of the Treasury Regulations, and that the City reasonably expects to reimburse itself for certain Original Expenditures incurred with respect to the Project from the proceeds of obligations to be issued by the City in a principal amount currently estimated to be $2,700,000.00 (the "Obligations").
The City intends to make a reimbursement allocation on its books for the Original Expenditures not later than eighteen months following the later to occur of the date of the Original Expenditure to be reimbursed or the date the Project for which such Original Expenditures were made is "placed in service" within the meaning of the Treasury Regulations Section 1.150-2(c). Upon the issuance of the Obligations, the proceeds of such Obligations shall be used to reimburse the fund from which the advance for costs of the Project will be made.
SECTION 8. That the 2010 Capital Improvements Budget, Ordinance No. 0564-2010, is hereby amended as follows, in order to provide sufficient budget authority:
CURRENT CIB:
Whitney Young Housing Capital Fund No. 717 / Dept-Div 44-01 / Project No. 717001-100000 / Amount $0.00
REVISED CIB:
Whitney Young Housing Capital Fund No. 717 / Dept-Div 44-01 / Project No. 717001-100000 / Amount $2,700,000.00
SECTION 9. That for the purpose as stated in Section 1, the expenditure of $3,400,000 or so much thereof as may be necessary, is hereby authorized from the Department of Development, Division 44-10, as follows:
Dept/Div / Fund / Project No. / OCA Code / Object Level Three / Amount
44-01 / 782 / 782001-100000 / 782001 / 6616 / $700,000
44-01 / 717 / 717001-100000 / 717001 / 6616 / $2,700,000
TOTAL $3,400,000
SECTION 10. All funds necessary to carry out the purpose of this ordinance are hereby deemed appropriated.
SECTION 11. That the City Auditor is authorized to make any accounting changes to revise the funding source for all contracts or contract modifications associated with this ordinance.
SECTION 12. The City Auditor has the authority to expend the funds necessary to carry out the purpose of this ordinance directly from Fund 430 as a capital outlay rather than a transfer from Fund 430 to a bond fund if he deems it appropriate.
SECTION 13. 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 its passage if the Mayor neither approves nor vetoes the same.