Explanation
BACKGROUND: The U.S. Department of Housing and Urban Development (HUD) requires grantees and their subrecipients to maintain Community Development Block Grant (CDBG) revolving loan funds in interest bearing accounts, and to remit said interest to the federal treasury no less frequently than annually. During 2007, the City's revolving loan fund earned $165,888.94 of interest. Also during 2007, the Department of Development failed to make a timely payment to HUD of $113,430.00 for a Section 108 loan, resulting in HUD reducing the City's line of credit for the missed payment. Payment was subsequently made to HUD for the 108 loan, however the wiring instructions referred in error to interest earnings. Therefore, $113,430.00 was deemed by HUD to be interest and remitted to the U.S. Treasury. This legislation will authorize the expenditure of monies from the revolving loan subfund to replenish the City's line of credit with HUD for $113,430.00 and to remit $52,458.94 of additional 2007 interest earnings to HUD for the U.S. Treasury.
This legislation is presented as an emergency to facilitate the timely remittance of monies to HUD.
FISCAL IMPACT: Interest earnings have been deposited into the CDBG revolving loan fund and are available for disbursement to HUD from said fund.
Title
To authorize the Director of the Department of Finance & Management to expend $165,888.94 from the CDBG revolving loan fund for payment of interest earnings to the U.S. Department of Housing and Urban Development (HUD); and to declare an emergency. ($165,888.94)
Body
WHEREAS, federal regulations require Community Development Block Grant (CDBG) grantees and subrecipients to remit to the federal treasury all investment earnings paid on CDBG revolving loan accounts; and
WHEREAS, interest earnings have been deposited into the CDBG revolving loan subfund and are available for this expenditure; and
WHEREAS, a correction is needed wit...
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