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HomeMy WebLinkAbout2018.08.13 Council Workshop PacketWorkshop Meeting AGENDA PASCO CITY COUNCIL 7:00 p.m. August 13, 2018 Page 1. CALL TO ORDER: 2. ROLL CALL: (a) Pledge of Allegiance 3. VERBAL REPORTS FROM COUNCILMEMBERS: 4. ITEMS FOR DISCUSSION: (a) Overview of Public Works Operations Presented by John Millan, Public Works Superintendent (b) State Law Implementation for General Business License (EHB-2005) Presented by Richa Sigdel, Finance Director 3 - 8 (c) 2019 Community Development Block Grant (CDBG) Annual Work Plan and Allocations (MF# BGAP 2018-003) 9 - 13 (d) 2019 HOME Annual Work Plan and Allocation (MF# BGAP 2018-004) 14 - 18 (e) 2019 Neighborhood Stabilization Program (NSP) Annual Work Plan Allocation (MF# BGAP 2018-005) 19 - 42 (f) CDBG Program Section 108 Guaranteed Loan Program (MF# BGAP 2018-007) 43 - 47 (g) Providing for the Listing of Real Property on a Sale Procedural Alternative 48 - 52 (h) Quad-Cities Agreement - Stormwater Education 5. MISCELLANEOUS COUNCIL DISCUSSION: 6. EXECUTIVE SESSION: Page 1 of 52 Workshop Meeting August 13, 2018 7. ADJOURNMENT. REMINDERS: 1. 11:45 a.m., Monday, August 13, Pasco Red Lion – Pasco Chamber of Commerce Membership Luncheon. 2. 5:30 p.m., Tuesday, August 14, Clover Island Inn, 435 Clover Island Drive, Kennewick - Benton, Franklin & Walla Walla Counties Good Roads & Transportation Association Meeting (COUNCILMEMBER RUBEN ALVARADO, Rep.; COUNCILMEMBER SAUL MARTINEZ, Alt.). 3. 12:30 p.m., Thursday, August 16, Tri-Cities Community Health Board Room, 800 W. Court St. – Greater Columbia ACH Leadership Council & Board Meeting (COUNCILMEMBER RUBEN ALVARADO). 4. 4:00 p.m., Thursday, August 16, Bechtel Board Room, Tri-Cities Regional Business & Visitor Center - Tri-Cities National Park Committee Meeting (MAYOR MATT WATKINS). 5. 11:30 a.m., Friday, August 17, El Chapala, 107 E. Columbia Drive, Kennewick - Benton-Franklin Council of Governments Board Meeting (COUNCILMEMBER BLANCHE BARAJAS, Rep., COUNCILMEMBER RUBEN ALVARADO, Alt.). This meeting is broadcast live on PSC-TV Channel 191 on Charter Cable and streamed at www.pasco-wa.gov/psctvlive. Audio equipment available for the hearing impaired; contact the Clerk for assistance. Spanish language interpreter service may be provided upon request. Please provide two business day's notice to the City Clerk to ensure availability. (Servicio de intérprete puede estar disponible con aviso. Por favor avisa la Secretaria Municipal dos días antes para garantizar la disponibilidad.) Page 2 of 52 AGENDA REPORT FOR: City Council August 6, 2018 TO: Dave Zabell, City Manager Rick White, Director Community & Economic Development Workshop Meeting: 8/13/18 FROM: Angie Pitman, Urban Development Coordinator Community & Economic Development SUBJECT: 2019 Community Development Block Grant (CDBG) Annual Work Plan and Allocations (MF# BGAP 2018-003) I. REFERENCE(S): Proposed Resolution Planning Commission Minutes Dated: 6/21/18 and 7/19/18 II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: CDBG Entitlement for 2019 is estimated at $700,000 (plus program income) IV. HISTORY AND FACTS BRIEF: The City of Pasco receives an annual entitlement grant from United States Department of Housing and Urban Development for the Community Development Block Grant (CDBG) program authorized by Title I of the Housing and Community Redevelopment Act. The City’s grant allocation process is guided by Resolution 1969, approved in 1991, which designates the Planning Commission as the Block Grant advisory committee and addresses several community needs for which the CDBG program will provide funding. The resolution places the highest priority on bricks and mortar physical improvements and specifically excludes social service programs carried on by non- profit organizations and governmental agencies designed to provide health, welfare, and educational activities for individual persons. Recreation programs operated by the City do not fall under this definition of social service programs. Page 3 of 52 A "Request for Proposals" for 2019 CDBG funds was published in the Tri -City Herald and Tu Decides newspapers in May. Thirteen (13) requests for grant funding were received totaling $1,108,599. The Planning Commission held public hearings and discussion at the June 21, 2018 and July 19, 2018 meetings. The public hearings solicited public comment on any application for funding, or reallocation for the City of Pasco 2019 Community Development Block Grant (CDBG) Program. At the public hearings, thirteen (13) presentations were made relating to proposed activities. V. DISCUSSION: Staff presented recommendations for funding at the July 19, 2018 Planning Commission Meeting. The Planning Commission recommended approval of funding recommendations as presented. There is always some question regarding funding levels approved by Congress. Actual available funding for these FY 2019 activities will remain in question until the early part of 2019 when the award is made. Staff recommends all projects not recommended for whole or partial funding be put in the 2019 annual action plan as a contingency projects should funds become available. An amendment to the Annual Action Plan would be necessary to allocate unobligated funds to any project not in the plan. If funding levels are lower than estimated, activity funding will be reallocated prior to submission of the plan. Page 4 of 52 RESOLUTION NO. _________ A RESOLUTION approving the Program Year 2019 Community Development Block Grant Allocations and Annual Work Plan. WHEREAS, staff has prepared the Program Year 2019 Annual Work Plan for activities totaling $700,000 from estimated entitlement, program income and unobligated funds; AND Now, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO: Section 1. That the Pasco City Council hereby approves the Annual Work Plan as follows: Activity Funding CDBG Program Administration $ 139,000.00 Civic Center -Youth Recreation Specialist $ 20,000.00 Martin Luther King Community Center Recreation Specialist $ 20,000.00 Senior Citizen's Center Recreation Specialist $ 20,000.00 Martin Luther King Recreation Programs $ 20,000.00 Theraputic Recreation Program Scholarship $ 5,000.00 Recreation Scholarship Program $ 4,000.00 Pasco Specialty Kitchen $ 57,500.00 Code Enforcement Officer $ 70,000.00 **Contingency: CHIP Owner Occupied Minor Rehabilitation **Contingency: CHIP Rental Minor Rehabilitation **Contingency: PSK Facility Improvements-Hood Expansion Project **Contingency: Downtown Physical Improvements $144,500.00 DEBT REPAYMENT - SECTION 108 LOAN $200,000.00 TOTAL $ 700,000.00 Section 2. That the Pasco City Council hereby approves unfunded and partially funded projects above as contingencies in the annual action plan; and Section 3. If entitlement funds are less than estimated, program administration and public services will be reduced to do not exceed limits, City projects may be voluntarily reduced, and all other projects will be proportionately reduced; and Section 3. That the City Manager or his delegate is authorized to sign all agreements in accordance with the 5-Year Consolidated Plan and Annual Action Plan Supplements previously approved by Council. PASSED by the City Council of the City of Pasco this _____day of _______________, 2018. _____________________________ Matt Watkins Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Daniela Erickson Leland B. Kerr City Clerk City Attorney Page 5 of 52 PLANNING COMMISSION MINUTES 6/21/2018 D. Block Grant 2019 Community Development Block Grant (CDBG) Program Allocation and Annual Work Plan (MF# BGAP 2018-003) Chairwoman Roach read the master file number and asked for comments from staff. Rick White, Community & Economic Development Director, discussed the 2019 Community Development Block Grant Program Allocation and Annual Work Plan. Pasco is an entitlement city, meaning the city doesn’t have to apply for funds, they are given. Pasco is expected to receive $700,000 in 2019. The Planning Commission is the City Council’s advisory committee per HUD regulations. Mr. White gave the history of the Block Grant Program and how allocations are made in regards to the goals adopted by City Council. Mr. White briefly went over the applications for funding that were received by the Community & Economic Development Department, for both City departments requested funds and requests made by outside agencies. Commissioner Campos asked if there was any funding requested for the 4 th Street Corridor Project. Mr. White said not for block grant funding at this time but it might be requested in future years. Commissioner Campos asked if there was an ETA for that project. Mr. White replied not at this time and it may be difficult for block grant funding. Chairwoman Roach asked if the amount requested for a Code Enforcement Officer was for just one officer’s salary. Mr. White replied yes, salary and benefits. Chairwoman Roach asked if the city had more than one Code Officer. Mr. White said that the city has five. Chairwoman Roach asked about the 20% cap on funding for Program Administration and the $112,000 cap. Mr. White responded that the $112,000 cap is for non-brick and mortar projects and was separate from the Program Administration cap. The non-brick and mortar projects are capped at 15%. Page 6 of 52 Commissioner Myhrum asked for clarification on personnel expenditures and if that was for new personnel. Mr. White answered that it was not for new personnel but is an annual request for current personnel. Commissioner Myhrum asked what would happen if the funding was scaled back from personnel. Mr. White said it would become a budgeting issue and the funds would h ave to come from elsewhere or the positions eliminated. Steve Howland, 1234 Columbia Park Trail, Richland, WA spoke on behalf of his application for the YMCA of the Greater Tri-Cities with their project at the Martin Luther King Jr. Center. The largest program they run is soccer and he explained the program and how the block grant funds are used. Chairwoman Roach thanked Mr. Howland for his presentation and for what their program does for the community. Donna Tracey, 9904 Winthrop Drive, spoke on behalf of her application for the Arc of Tri-Cities with their project to fund scholarships for children in Pasco and about the services they provide for the community. Tiffany Tracey, 9904 Winthrop Drive, spoke in support of the application for the Arc of Tri-Cities. Chairwoman Roach asked what services the Arc provides for adults with special needs. Ms. Tracey explained the difficulties adults with disabilities have and what their center does for them. There were no further questions or comments. Page 7 of 52 PLANNING COMMISSION MINUTES 7/19/2018 I. Block Grant 2019 Community Development Block Grant (CDBG) Program Allocation (MF# BGAP 2018-003) Chairwoman Roach read the master file number and asked for comments from staff. Rick White, Community & Economic Development Director, discussed the applications for the 2019 CDBG Program Allocation. Staff reviewed the agency requests and staff recommended amounts. There were no questions or comments. Commissioner Bykonen moved, seconded by Commissioner Greenaway, to close the public hearing and recommend the City Council approve the use of funds for the 2019 Community Development Block Grant program as set forth in the “2019 Fund Summary” as recommended by Staff. The motion passed unanimously. Page 8 of 52 AGENDA REPORT FOR: City Council August 6, 2018 TO: Dave Zabell, City Manager Rick White, Director Community & Economic Development Workshop Meeting: 8/13/18 FROM: Angie Pitman, Urban Development Coordinator Community & Economic Development SUBJECT: 2019 HOME Annual Work Plan and Allocation (MF# BGAP 2018-004) I. REFERENCE(S): Proposed Resolution Planning Commission Minutes Dated: 6/21/18 and 7/19/18 II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Pasco's share of Federal HOME funds is $107,000 (plus program income). IV. HISTORY AND FACTS BRIEF: Pasco entered into a HOME Consortium Agreement with Richland and Kennewick in 1996 making the City eligible for Federal HOME funds. Every three years, during the renewal cycle, member cities are given the opportunity to withdraw from the consortium, make changes to the cooperative agreement, or select a new Lead Agency. In April 2016, the Consortium renewed the Agreement through December 31, 2019. HOME funds are allocated based on need and income eligibility and may be used anywhere within the city limits, however, neighborhoods designated as priority by Pasco City Council receive first consideration. Funding is first targeted in the Longfellow and Museum neighborhoods, then within low-moderate income census tracts (201, 202, 203 and 204). If HOME funds cannot be applied to those areas, then they are used as needed within Page 9 of 52 the Pasco city limits for the benefit of eligible low-moderate income families. V. DISCUSSION: The City is restricted to using HOME funds for down payment assistance for first time homebuyers in accordance with the Tri-Cities HOME Consortium Cooperative Agreement approved by all three cities in 2010, renewed in 2016. During this 2015-2019 Consolidated Plan cycle, HOME funds provided down payment assistance to 71 Pasco first time homebuyers to date. This is an average of 20 low - moderate income families per year assisted with purchase of their first home. Estimated HOME entitlement funds totaling $107,000 (plus program income received) will be available to provide down payment assistance for approximately 10 first time homebuyers in 2019. Staff presented recommendations for funding at the July 19, 2018 Planning Commission meeting. The Planning Commission recommended approval of staff funding recommendations as presented. If Council concurs with the recommendation of the Planning Commission, the proposed resolution will be returned for Council action. Page 10 of 52 RESOLUTION NO. __________ A RESOLUTION APPROVING FEDERAL 2019 HOME ANNUAL WORK PLAN AND ALLOCATION WHEREAS, the City of Pasco together with Kennewick and Richland renewed a cooperative agreement 2016 continuing participation in the Consortium originally formed in 1996 under the Home Investments Partnership (HOME) Program through 2019; and WHEREAS, the Consortium allows the three cities to be eligible for federal HOME funds; and WHEREAS, the City has established a Community Housing Improvement Program (CHIP); and WHEREAS, $107,000 is expected to be available from entitlement funds, plus program income, for Pasco HOME projects in program year 2019, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO: Section 1.That the 2019 HOME funds received by the City of Pasco shall be allocated to the Community Housing Improvement Program (CHIP) First Time Homebuyer Assistance program which operates city-wide with priority given to neighborhood improvement areas and low-moderate income census tracts; and Section 2.That the City Manager or his delegate is hereby authorized to sign all agreements in accordance with the 5-Year Consolidated Plan, and Annual Action Plan Supplements previously approved by Council. PASSED by the City Council of the City of Pasco this day of , 2018. CITY OF PASCO: _____________________________ Matt Watkins Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Daniela Erickson Leland B. Kerr City Clerk City Attorney Page 11 of 52 PLANNING COMMISSION MINUTES 6/21/2018 E. Block Grant 2019 HOME Investment Partnerships (HOME) Program Allocation and Annual Work Plan (MF# BGAP 2018-004) Chairwoman Roach read the master file number and asked for comments from staff. Rick White, Community & Economic Development Director, discussed the 2019 HOME Investment Partnerships Program Allocations and Annual Work Plan. He explained the consortium that was formed between Pasco, Richland and Kennewick to receive these funds devoted specifically to housing. The City of Richland is the administrative lead of the program. It is estimated that the consortium will receive approximately $430,000 and about 10% of that will go to Richland for administration costs. Pasco will receive approximately $107,000 for down payment assistance along with program income received from homes that are paid off and funds repaid. Commissioner Bowers asked if not enough individuals qualify for down payment assistance funds, would individuals above the income limit receive funds. Mr. White answered no, only low-moderate income individuals could qualify to receive funds. Commissioner Myhrum asked how the home buyers were vetted and selected. Mr. White replied that there isn’t a shortage of need. People are approved by a lending institution and based on first come first serve the allocations are distributed. Commissioner Myhrum asked if that was a function the City provided. Mr. White said yes. Commissioner Campos added his personal experience with the down payment assistance process. There were no further questions or comments. Page 12 of 52 PLANNING COMMISSION MINUTES 7/19/2018 J. Block Grant 2019 HOME Investment Partnerships (HOME) Program Allocation and Annual Work Plan (MF# BGAP 2018-004) Chairwoman Roach read the master file number and asked for comments from staff. Rick White, Community & Economic Development Director, discussed the 2019 HOME Program Allocation and Annual Work Plan. In conformance with the HOME Consortium Agreement with Richland, Kennewick and Pasco, the funds are proposed to be used to continue the downpayment assistance program. There were no questions or comments. Commissioner Greenaway moved, seconded by Commissioner Mendez, to recommend the City council approve the use of funds for the 2019 HOME Investment Partnerships entitlement as recommended by Staff. The motion passed unanimously. Page 13 of 52 AGENDA REPORT FOR: City Council August 6, 2018 TO: Dave Zabell, City Manager Rick White, Director Community & Economic Development Workshop Meeting: 8/13/18 FROM: Angie Pitman, Urban Development Coordinator Community & Economic Development SUBJECT: 2019 Neighborhood Stabilization Program (NSP) Annual Work Plan Allocation (MF# BGAP 2018-005) I. REFERENCE(S): Proposed Resolution Planning Commission Minutes Dated: 6/21/18 and 7/19/18 II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: $81,700 from NSP Program Income IV. HISTORY AND FACTS BRIEF: The City of Pasco received Neighborhood Stabilization Program (NSP) entitlement pass-through grant funds, authorized under Title III of the Housing and Economic Recovery Act of 2008 (HERA) from Washington State Department of Commerce (WA DOC). Total NSP entitlement authorized $426,343 Total grant expenditures $384,665 Unobligated funds transferred to WA DOC $ 41,688 Page 14 of 52 Total NSP program income earned $365,188 Program Income expended $300,369 Unexpended program income $ 64,819 In May, 2016, NSP Closeout Agreement 08-F6401-014 was executed which included a Program Income Reuse plan requiring at least 25% of program income received be used to benefit persons 50% or below Area Median Income (AMI). At closeout, the City had $64,819 of unexpended program income remaining. The City has utilized NSP funds to recover 16 foreclosed properties, four (4) of the homes were purchased and rehabilitated with NSP and HOME. The pro -rata share of program income received from the sales of those homes and, more recently, three (3) down payment assistance loans repaid, less NSP program expenditures, leaves approximately $81,700 in program income remaining. V. DISCUSSION: The City is able to use NSP funds to recover foreclosed properties in Pasco. The funds may be used for down payment assistance, acquisition, and rehabilitation of foreclosed properties. Staff proposes that the 2019 annual work plan allocate $6,700 for administration, and the balance of $75,000 be used for down payment assistance and/or minor rehabilitation for three (3) foreclosed properties ($53,500 is reserved for households 50% and below AMI). Staff presented recommendations for funding at the July 19, 2018 Planning Commission meeting. The Planning Commission recommended approval of staff funding recommendations as presented. If Council concurs with the recommendation of the Planning Commission, the proposed resolution will be returned for Council action. Page 15 of 52 RESOLUTION NO. __________ A RESOLUTION APPROVING THE 2019 NSP PROGRAM YEAR ANNUAL WORK PLAN AND ALLOCATION WHEREAS, the Neighborhood Stabilization Program (NSP) is authorized under Title III of the Housing and Economic Recovery Act of 2008 (HERA), administered by the US Department of Housing & Urban Development (HUD), and subject to both CDBG and HOME regulations for the purpose of stabilizing neighborhoods negatively affected by foreclosures and abandoned properties, and WHEREAS, it is estimated NSP funds totaling $81,700 (plus program income received) will be available for NSP eligible projects, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO: Section 1.That the Pasco City Council hereby approves the 2019 Neighborhood Stabilization Program (NSP) Plan work plan allocation as follows: 2019 Proposed Activities Budget Units Restricted for Administration 10% of PI (09-8009)$ 6,700.00 Down Payment Assistance/Minor Rehab (03-8009)$ 21,500.00 1 Down Payment Assistance/Minor Rehab **25% (04-8009)$ 53,500.00 2 **Households < 50% AMI $ 81,700.00 3 PASSED by the City Council of the City of Pasco this _____ day of ___________, 2018. _____________________________ Matt Watkins Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Daniela Erickson Leland B. Kerr City Clerk City Attorney Page 16 of 52 PLANNING COMMISSION MINUTES 6/21/2018 F. Block Grant 2019 Neighborhood Stabilization Program (NSP) Allocation and Annual Work Plan (MF# BGAP 2018-005) Chairwoman Roach read the master file number and asked for comments from staff. Rick White, Community & Economic Development Director, discussed the 2019 Neighborhood Stabilization Program (NSP) Allocation and Annual Work Plan. The City received federal stimulus money several years ago to prevent foreclosures to become neighborhood blight. The City used these funds to rehab homes and provide down payment assistance. With program income returning to the City, the City still has funds to spend. The recommendation is to continue to turn it over for down payment assistance and home owner rehabilitations. For 2019 there is roughly $56,000 that must be used on foreclosures. Commissioner Campos asked if the funds could be used to purchase a foreclosure that needs repairs and the funds go towards those repairs. Mr. White replied yes, as long as the home is in foreclosure. Commissioner Bowers asked if it is the homeowner who can use the funds. Mr. White said the pre-qualified potential buyer. Chairwoman Roach asked if there is additional criteria for potential homebuyers. Mr. White said the banks take care of pre-qualifications to make sure the buyer is solid. Commissioner Campos added his own personal experience with the lending institutions and that they are good gatekeepers. Chairwoman Roach said she was wondering if an individual or family would be better candidates. Mr. White said that is based on a scale for how many members are in the home as far as income. There were no further questions or comments. Page 17 of 52 PLANNING COMMISSION MINUTES 7/19/2018 K. Block Grant 2019 Neighborhood Stabilization Program (NSP) Allocation and Annual Work Plan (MF# BGAP 2018-005) Chairwoman Roach read the master file number and asked for comments from staff. Rick White, Community & Economic Development Director, discussed the 2019 NSP Allocation and Annual Work Plan. Staff proposed the funds be used for downpayment assistance of foreclosed homes and minor rehabs on foreclosed homes. There were no questions or comments. Commissioner Myhrum moved, seconded by Commissioner Greenaway, to recommend the City Council approve the use of funds for the 2019 Neighborhood Stabilization Program (NSP) entitlement set forth, as recommended by Staff. The motion passed unanimously. . Page 18 of 52 AGENDA REPORT FOR: City Council August 6, 2018 TO: Dave Zabell, City Manager Rick White, Director Community & Economic Development Workshop Meeting: 8/13/18 FROM: Angie Pitman, Urban Development Coordinator Community & Economic Development SUBJECT: CDBG Program Section 108 Guaranteed Loan Program (MF# BGAP 2018- 007) I. REFERENCE(S): Proposed Resolution - Amending Section 108 Application Resolution 3814 Section 108 Draft Application Staff Memo to Planning Commission: 7/19/18 Planning Commission Minutes: 7/19/18 II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Potential impact to future annual CDBG allocations. IV. HISTORY AND FACTS BRIEF: The Department of Housing and Urban Development (HUD) has established the Section 108 Loan Guarantee Program ("Program") in order to provide below market rate loans for qualified projects that serve the needs of low and moderate income persons. This program is critical towards funding important pieces of Downtown Revitalization - such as the Peanuts Park/Farmers Market rehabilitation effort. As an Entitlement Grantee receiving funds through the HUD Community Development Block Grant Program (CDBG), the City of Pasco meets the criteria to participate in the Program. City Council approved Resolution 3787 in September of 2017 authorizing staff to Page 19 of 52 begin the Section 108 Program application. Pasco may borrow up to five times the annual CDBG grant, enabling the City to maximize the impact of available public funds. Section 108 is a loan guarantee program, not a grant. It offers lower rates both variable and fixed, and flexible repayment terms to meet specific needs and can provide funding to finance a wide variety of eligible activities. For example, instead of allocating $200,000 each year for the next five (5) years for infrastructure projects, a total amount of $1,000,000 may be used to complete projects in one year, and repaid over time. In January 2018, Council approved Resolution 3814 authorizing submission of the Section 108 application in the amount of $3.475 million (5 times the 2017 entitlement funds.). Based on our 2018 Program Year award of $756,200 - the current Section 108 loan capacity is $3,781,150. At the July 19, 2018 Planning Commission meeting - the Commission reviewed and recommended approval of the proposed amendment to increase the Section 108 loan to the higher 2018 maximum allowable. V. DISCUSSION: A portion of the City's annual CDBG entitlement allocation or program income would be pledged - other collateral may be required and a city is always required to pledge CDBG as a guarantee. Repayment of the loan would be over twenty (20) years. If the loan were repaid strictly from the CDBG entitlement funds, the annual allocation typically awarded by Council for infrastructure projects would be reduced for the amount of the loan repayment. Staff requests Council approval of the proposed amendment to Resolution 3814. The City Manager has been previously authorized to sign the appropriate documents associated with the CDBG Program. Page 20 of 52 RESOLUTION NO. _________ AMENDING RESOLUTION 3814 OF THE PASCO CITY COUNCIL AUTHORIZING THE SUBMISSION OF APPLICATION AND AGREEMENT TO CERTIFICATIONS TO THE US DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR SECTION 108 LOAN GUARANTEE PROGRAM WHEREAS, the City of Pasco has identified opportunities for redevelopment consistent with the CDBG Entitlement and Section 108 Loan Guarantee programs; and WHEREAS, public hearings were held on December 21, 2017 and January 16, 2018 to discuss community and economic development and housing needs, and WHEREAS, Section 108 loan funds will be used for the redevelopment of the Pasco Farmers Market, Peanuts Park, related infrastructure and property acquisition, subject to HUD eligibility and underwriting; and WHEREAS, the City Manager is the designated Certifying Official, authorized to sign and submit applications and certifications to the U.S. Department of Housing and Urban Development on behalf of the City of Pasco and to act on behalf of the City of Pasco in regard to the applications, and to provide such additional information as may be required; WHEREAS, the Section 108 application has passed the 2017 submission date, five times higher entitlement for 2018 will be applied, for a maximum available of $3.781; Now, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO: Authorizes an application to HUD be submitted in the City of Pasco’s name for $3.781 million in Section 108 loan funds to be used for redevelopment activities that benefit low- and moderate-income persons. PASSED by the City Council of the City of Pasco this _____day of _______________, 2018 _____________________________ Matt Watkins Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Daniela Erickson Leland B. Kerr City Clerk City Attorney Page 21 of 52 RESOLUTION NO.2Y>/`t--- RESOLUTION OF THE PASCO CITY COUNCIL AUTHORIZING THE SUBMISSION OF APPLICATION AND AGREEMENT TO CERTIFICATIONS TO THE US DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR SECTION 108 LOAN GUARANTEE PROGRAM WHEREAS,the City of Pasco has identified opportunities for redevelopment consistent with the CDBG Entitlement and Section 108 Loan Guarantee programs;and WHEREAS,public hearings were held on December 21,2017 and January 16,2018 to discuss community and economic development and housing needs,and WHEREAS, Section 108 loan funds will be used for the redevelopment of the Pasco Farmers Market,Peanuts Park and related infrastructure. The projected loan amount for the first project is 2,500,000,subject to HUD eligibility and underwriting;and WHEREAS,the City Manager is the designated Certifying Official,authorized to sign and submit applications and certifications to the U.S.Department of Housing and Urban Development on behalf of the City of Pasco and to act on behalf of the City of Pasco in regard to the applications,and to provide such additional information as may be required. Now,THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO: Authorizes an application to HUD be submitted in the City of Pasco's name for$3.475 million in Section 108 loan funds to be used for redevelopment activities that benefit low-and moderate-income persons. PASSED by the City Council of the City of Pasco this Kith day of.J4NUAky( ,2018 Matt Watkins Mayor A EST: APPROVED AS TO FORM: L/ ` Daniela Erickson Leland B.Kerr City Clerk City Attorney Page 22 of 52 CITY OF PASCO APPLICATION FOR LOAN GUARANTEE FROM U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR AN ECONOMIC AND COMMUNITY DEVELOPMENT LOAN FUND IN THE AMOUNT OF $3,781,150 August 2018 Page 23 of 52 ECONOMIC DEVELOPMENT LOAN FUND PASCO, WASHINGTON Project Description The purpose of this Section 108 application is to assist with economic and community development activities in the City of Pasco. The guaranteed loan funds will be used to create a loan pool to fund public facilities projects that will provide an area wide benefit and positive economic impacts within East Pasco's neighborhood business district, that is located in a federal Opportunity Zone. Individual projects will be evaluated by City of Pasco's staff, as well as by consultant experts. The City has identified three projects that will make use of this fund. The first of these, the Pasco Market Plaza, is located on 4th Avenue between Lewis and Columbia Streets. The project includes renovation of the Pasco Farmers Market Pavilion, as well Peanuts Park. The Pasco Farmers Market celebrates its 30th Anniversary in 2018. Adjacent to Peanuts Park, this section of downtown is a community resource and gathering place for a lower income, predominately minority community. The second project is the acquisition of property to provide public parking to replace parking stalls in the Farmers Market pavilions that will be removed as part of the redevelopment project, and as a result of a private economic development project adjacent to the market. Subject to funding availability, a third project is the replacement of deteriorated sidewalks and installation of pedestrian amenities that connect the Market Plaza to the parking structure and surrounding neighborhoods that includes a new Union Gospel Mission campus that will open in 2019. The repayment source for these Section 108 loans will come from the city’s annual entitlement grant of CDBG funds. Section 108 Submission Requirements A. Community Development Objectives The Section 108 loan fund will result in the redevelopment and/or replacement of public infrastructure in the downtown area. This activity will further the City of Pasco's Economic Development Goals as listed in the City's Consolidated Plan, all of which are applicable. Policies B. Description of how the Proposal meets one of the Criteria in 24 CFR 570.200(a)(2) - National Objectives. Section 570.200(a)(2) lists the National Objectives that must be met by all Community Development Block Grants and therefore Section 108 projects. This section requires that all funded activities meet one of three national objectives. These objectives are: 1) benefit to low and moderate income families; 2) aid in the prevention or elimination of slums or blight; and 3) meeting other community development needs having a particular urgency because existing conditions pose a Page 24 of 52 serious and immediate threat to the health or welfare of the community where other financial resources are not available. Section 570.208 defines the criteria under which an activity may meet the requirements of Section 570.200(a)(2). Each project funded through the Section 108 loan fund will meet the National Objectives listed in Section 570.200(a)(2) as detailed in Section 570.208. The City of Pasco's Section 108 loan fund will provide infrastructure to create economic and housing opportunities for low-moderate income individuals, and/or eliminate conditions of spot slum blight as defined in Section 570.208. The project will also attract private investment in adjacent properties that will create jobs and business opportunities for low-moderate income residents. C. Community Development Block Grant Eligibility In addition to furthering National Objectives, all Section 108 loans must also meet the eligibility requirements of the Community Development Block Grant program. All activities funded through the City of Pasco's Section 108 loan fund will meet the program eligibility requirements as set forth in Sections 570.201, .202, .203, or .204. The projects currently identified meet the eligibility requirements of Section 570.20l(c). Under 570.201(c), the City can undertake public facilities and improvements through: "Acquisition, construction, reconstruction, rehabilitation or installation of public facilities and improvements, except as provided in Section 570.207(a)." Section 570.207(a) excludes "buildings or portions thereof, used for the general conduct of government, general governmental expenses and political activities." None of the projects to be assisted with Section 108 proceeds will include buildings used for the general conduct of government, general governmental expenses, nor for political activity. If the City identifies activities under Section 570.203, it will ensure that those activities additional comply with Section 570.209 Section 570.209 Guidelines A. Guidelines and Objectives for Evaluating Project Costs and Financial Requirements. All activities eligible under Section 570.203 must meet the requirements of Section 570.209. This section outlines guidelines for ensuring that a proposed project carries out an economic development objective in an appropriate manner. These guidelines under 570.209(a) are not mandatory but serve as a framework for financially underwriting economic development projects. Page 25 of 52 B. Project Management The City of Pasco, Department of Community and Economic Development (DCED) will administer the Section 108 loan funds. Property acquisition will be managed by the city’s Office of the City Manager, in coordination with DCED. Construction of public projects will be managed by the city’s Public Works Department. The Public Works Department staff have experience in managing all aspects of federally funded projects, including NEPA, property acquisition, consultant selection and oversight, engineering design, formal bid processes and construction contract management that includes compliance with MWBE and prevailing wage requirements. Eligibility under 24 CFR 570.703 Each of the projects to be assisted with Section 108 guaranteed loan funds and must meet one of the eligibility requirements listed in 24 CFR 570.703. The initial projects described in this application are eligible under 570. 703(1): Acquisition, construction, reconstruction, rehabilitation, or installation of public facilities (except for buildings for the general conduct of government), public streets, sidewalks and other site improvements and public utilities. Other projects to be funded under the program may also qualify under 570.703(a)(b)(c)(d)(e)(f)(h)&(l). A. Substitution of CDBG funds for Private Sources City staff assisted by consultants will review all projects to ensure that each loan minimizes the use of CDBG funds. It is in the City of Pasco's self-interest to ensure that there is no substitution of CDBG funding for non -federal funding. Given the limited availability of federal funds, the city staff will work diligently to maximize the use of private, local and state funding in all projects. B. A Description of the Pledge of CDBG Guarantee The City of Pasco intends to use its CDBG funds to repay the Section 108 loan, and understands that if the City of Pasco fails to make a required payment on its notes, HUD will deduct that payment from the City of Pasco's CDBG Letter of Credit. In accepting this loan guarantee, the City of Pasco has pledged its CDBG funds and all other applicable grants as security for the guarantee. (Please refer to Attachment A - Certifications.) In requesting approval of this loan guarantee fund the City of Pasco is requesting a commitment for a 20-year term. The principal repayment term will be determined for each loan at time of closing. C. Certifications The City of Pasco will comply with all certification required under 570.704. Page 26 of 52 Schedule for Repayment of the Loan HUD-424-M Funding Matrix The applicant must provide the funding matrix shown below, listing each program or program component for which HUD funding is being requested and submit this information with the application for federal financial assistance. Grant Program* HUD Matching Other HUD Other Federal State Local/Tribal Other Program Total Share Funds Funds Share Share Share Funds Income Section 108 Economic Development Loan Fund City of Pasco $ 3,781,150.00 $ 3,781,150.00 Grand Totals $ 3,781,150.00 $ - $ - $ - $ - $ - $ - $ - $ 3,781,150.00 Page 27 of 52 Instructions for the HUD-424-M Public reporting burden for this collection of information is estimated to average 30 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless that collection displays a valid OMB control number. This form should only be used to identify HUD funding for which you are applying under an application for federal financial assistance. This form must only be submitted if you are applying for multiple programs or program components in a single application submission. Item Number Instructions Enter the following information: Grant Program: The HUD funding programs or program components under which you are applying. HUD Share: Please check the program requirements. Enter the amount of HUD funds you are requesting in your application. Matching Funds: Enter the amount of funds or cash equivalent or in-kind contributions being contributed to meet the project or program matching requirement. Other Federal Share: Enter the amount of other Federal funds being used to implement your program of activities. State Share: Enter the amount of funds or cash equivalent or in-kind services the State is providing to help you implement your project or program of activities. Local/Tribal Share: Enter the amount of funds or cash equivalent or in-kind services your local/tribal government is providing to help you implement your project or program of activities. Other Funds: Enter the amount of other sources of private, non-profit, foundation or other funds or cash equivalent or in-kind services being provided to help you implement your project or program of activities. Program Income: Enter the amount of program income you expect to generate over the life of your award. Total: Enter the total of each row. Grand Totals: Enter the total of each column. Form HUD-424-M (03/2003) Page 28 of 52 ATTACHMENT A - CERTIFICATIONS Page 29 of 52 MEMORANDUM DATE:July 19,2018 TO:Planning Commission FROM:Angela R.Pitman,Block Grant Administrator Mg SUBJECT:COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)PROGRAM SECTION 108 GUARANTEED LOAN PROGRAM AMENDED APPLICATION (MF#BGAP2017-007) Reference:1)Draft Section 108 Application Background The Department of Housing the Department of Housing and Urban Development (HUD)has established the Section 108 Loan Guarantee Program (“Program")in order to provide below-market rate loans for quali?ed projects that serve the needs of low and moderate income persons.The City of Pasco meets the criteria to participate in the Program as a Grantee,receiving funds through the HUD Community Development Block Grant Program (CDBG).City Council approved participation in the Peanuts Park Renovation project that is partially funded with CDBG funds.The project will substantial bene?t low and moderate income persons in east and central Pasco.Together with other improvements,the Peanuts Park renovation project is expected stimulate economic growth in the Downtown Revitalization area,and create jobs for low and moderate income persons. Estimated Funds Available Recipients may borrow up to ?ve times their annual CDBG grant,enabling them to maximize the impact of available public funds by leveraging grant resources into private loans.Section 108 is a loan guarantee program,not a grant.It offers lower rates both variable and ?xed,and ?exible repayment terms to meet project-speci?c needs and provides funding to ?nance a wide variety of eligible activities.The maximum Section 108 loan capacity would be $3,781,150,based on the program year 2018 award of $756,230. Citizen Participation A display advertisement was published in the local section of the Tri-City Herald on December 1 and 10, and in Spanish in Tu Decides on December 1 and 9 notifying the public of this Public Hearing before the Planning Commission on December 21,2017.The publication also initiated the public comment period beginning December 15,2017 and ending January 16,2018.A copy of the draft Section 108 Application was made available at the Planning Department,public libraries and Housing Authorities as well as on the city’s website. Application The City of Pasco proposes to submit the dra?application (Reference 1)for the Section 108 Guaranteed Loan Program to HUD.The draft application proposes to establish an Economic &Community Development Loan Pool to bene?t the revitalization of Downtown Pasco and surrounding neighborhoods. The loan pool may be used for area wide infrastructure improvements,as well as provide loans to for-pro?t businesses.The application must include a repayment schedule and security (CDBG funds, additional loan security)for loan repayment.If approved,HUD will issue a federal guarantee for the note to an approved Lender/Investor upon approval which serves as loan commitment to the application. Page 30 of 52 Loan Amount The requested loan amount for the City is as follows: Program HUD Allocation Program Income Total Section 108 Loan $3,781,150 To be determined $3,781,150 Guarantee Requested Requested Projects The City of Pasco will propose projects expected to be performed or completed with the loan and estimated accomplishments upon completion of the projects.As projects are initiated,the City would request advances or reimbursements (drawdowns from the line of credit).All program income received will be used to make repayment to the line of credit.In the case of infrastructure projects where program income is not received,the City will be using CDBG funding to repay the Sectionl08 activities. The first project proposed in the fund is the redevelopment of the Pasco Farmers Market,Peanuts Park and related infrastructure.The projected loan amount for the first project is $2,500,000,subject to HUD eligibility and underwriting. Eligibilig and National Objective Eligibility for the Section 108 program is the substantially the same as participation in CDBG.All projects must meet Eligibility and National Objective requirements specified in 24 CFR 570.The first project proposed meets eligibility requirements under HUD Matrix Code 03F Park,Recreational Facility improvements [24 CFR 570.200 and 24 CFR 570.703(b)]and National Objectives under Low-Moderate Area Benefit (24 CFR 570.208(a)(1)). Examples of project National Objective bene?ciaries: o Low-mod Housing (LMH)—$1.5 million in giaranteed funds used for rehabilitation of housing units (LMH).Units will be occupied by low-moderate households. 0 Low-moderate Jobs (LMJ)-$1.3 million in guaranteed funds used to provide loans to small businesses,and $220K to micro-borrowers;businesses expect to create or retain 44 full—time equivalent pm. o Low-moderate Jobs (LMI)—$15.1 million in guaranteed 3rd party loans to businesses (eg.for- profit business manufacturing cosmetics and skin care products,created 700 jo_bs,and leveraged $17.2 million in private investment. -Low-moderate Clientele (LMC)-$1.6 million in permanent ?nancing to leverage $2.4 million for construction of an education center,one of three built in a high poverty area of the city for to low income clientele. 0 Low-moderate Area (LMA)—$6 million in guaranteed loan funds for rehabilitation of an existing public facility that is no longer adequate to meet community needs,construction of multipurpose recreation center located in an area serving population that is >60%LMI. o Elimination of Slum &Blight —served as catalyst for redevelopment of entire neighborhood, dilapidated deteriorated buildings and structures,soil and groundwater contamination.Produced 227,000 sf of retail space and 27,000 sf of restaurant space.Slum &Blight must be designated by Council. Activities must primarily bene?t low-moderate income (70%LMI Bene?t),and meet applicable public benefit standards (such as no more than $10,000 per job created for business providing services to low- moderate income areas,or $35,000 per job created for business creating jobs available to or held by low- moderate income persons). Page 31 of 52 Other regulatory requirements applicable to projects include Procurement,Environmental Review, Uniform Administrative Requirements (2 CFR 200),Labor Compliance (Davis Bacon),Relocation (URA),Fair Housing,and Lead Based Paint. Loan Guarantee Financing Fee In FY 2016,HUD regulations were changed to add a one time,upfront cost that is not annual and not added into the interest rate of the loan.The fee may be ?nanced as part of the guaranteed loan and paid for with CDBG or another source of funding.The 2018 fee is 2.365%of the principal;for a loan of $2.5 million,this fee would be $59,125. Discussion The Planning Commission should evaluate the Section 108 Application and provide staff direction to formulate a recommendation for City Council. The Section 108 Program is a strong tool for economic revitalization.Proposed schedule for meeting requirements to apply for HUD Section 108 Loan Guarantee is as follows: 1.Completion of a Citizen Participation Process —January 16,2018 2.Council Approval of Section 108 Application —January 16,2018 3.Submittal to HUD —Upon completion of amendments —TBD The City Staff would like to thank the members of the Planning Commission for your time and assistance. MOTION:I move the Planning Commission close the public hearing and recommend the City Council approve the Section 108 Loan Guarantee amended application and proposed use of funds for the Peanuts Park Renovation/Farmers Market Redevelopment and Infrastructure Project. Page 32 of 52 CITY OF PASCO APPLICATION FOR LOAN GUARANTEE FROM U.S.DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR AN ECONOMIC AND COMMUNITY DEVELOPMENT LOAN FUND IN THE AMOUNT OF $3,781,150 August 2018 Page 33 of 52 ECONOMIC DEVELOPMENT LOAN FUND PASCO, WASHINGTON Project Description The purpose of this Section 108 application is to assist with economic and community development activities in the City of Pasco.The guaranteed loan funds will be used to create a loan pool targeted to projects that will have positive economic and community development benefits within East Pasco's neighborhood business district. Individual projects will be evaluated by City of Pasco's staff,as well as by consultant experts in financial underwriting. The City has identified two projects that will likely make use of this fund.The first of these,the Pasco Plaza Mercado (Market Plaza),is located on 4"‘Avenue between Lewis and Columbia Streets.The project includes renovation of the Pasco Farmers Market Pavilion,as well Peanuts Park.The Pasco Farmers Market celebrates its 30"‘Anniversary in 2018,and is a community resource and gathering place for a lower income,predominately minority community.The second project is the replacement of deteriorated sidewalks and installation of pedestrian amenities that connect the Market Plaza to the surrounding neighborhoods.The Section 108 loans for both of these projects will be debt serviced with CDBG funds. Section 108 Submission Requirements A.Community Development Objectives The Section 108 loan fund will result in lending for economic and community development in Pasco.This activity will further the City of Pasco's Economic Development Goals as listed in the City's Consolidated Plan,all of which are applicable. Policies B.Description ofhow the Proposal meets one ofthe Criteria in 24 CFR 570.200(a)(2)-National Objectives. Section 570.200(a)(2)lists the National Objectives that must be met by all Community Development Block Grants and therefore Section 108 projects.This section requires that all funded activities meet one of three national objectives. These objectives are:1)benefit to low and moderate income families;2)aid in the prevention or elimination of slums or blight;and 3)meeting other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community where otherfinancial resources are not available.Section 570.208 defines the criteria under which an activity may meet the requirements of Section 570.200(a)(2).Each project funded through the Section 108 loan fund will meet one of the National Objectives listed in Section 570.200(a)(2)as detailed in Section 570.208. The City of Pasco's Section 108 loan fund will create jobs for low and moderate income persons,provide services to low income areas,provide infrastructure to create housing opportunities for low income individuals,and/or eliminate conditions ofblight as defined in Section 570.208.Page 34 of 52 C.Community Development Block GrantEligibi|ity In addition to furthering National Objectives,all Section 108 loans must also meet the eligibility requirements of the Community DevelopmentB|ock Grantprogram. All activities funded through the City ofPasco's Section 108 loan fund willmeetthe program eligibility requirements as setforth in Sections 570.201 ,.202,.203,or .204. The two projects currently identified meet the eligibility requirements of Section 570.20l(c).Under 570.201(c),the City can undertake public facilities and improvements through:"Acquisition,construction,reconstruction,rehabilitation or installation ofpublic facilities and improvements,except as provided in Section 570.207(a)." Section 570.207(a)excludes "buildings or portions thereof,used forthe general conduct of government,general governmental expenses and political activities." None of the projects to be assisted with Section 108 proceeds will include buildings used for the general conduct of government,general governmental expenses,norforpolitical activity. If the City identifies activities under Section 570.203,it will insure that those activities additional complywith Section 570.209 Section 570.209 Guidelines Guidelines and Objectives for Evaluating Project Costs and Financial Requirements. All activities eligible under Section 570.203 must meet the requirements of Section 570.209.This section outlines guidelines for ensuring that a proposed project carries out an economic development objective in an appropriate manner.These guidelines under 570.209(a)are not mandatory but serve as a framework for financially underwriting economic development projects. In evaluating proposed projects eligible under Section 570.203 and to be funded from the Section 108 Economic and Community Development Loan Fund,the City of Pasco willusethefollowing criteria. Project Management The City of Pasco,Department of Community and Economic Development (DCED) will administer the fund.DCED will underwrite all loans.Should a project to assist a for profit business emerge as a candidate for loan funding,the city will use an experienced consultantto advise on projectfeasibility. Underwriting Standards for City of Pasco Section 108 Loan Fund 1.Nationalobiective All loans shall meet a national objective as specified in 24 CFR 570.208.No loan shall be approved without verification of compliance with the national objective requirements,specified in 24 CFR 570.208,by the Washington State Office of the United States Department of Housing and UrbanPage 35 of 52 Development. Eligibility In addition to meeting one of the program's National Objectives,all projects assisted through the loan fund must fall within one ofthe eligible activities listed in 570.703. Guidelines for evaluating and selecting economic development projects For all activities eligible under 570.703(i),economic development activities, the project will be required to meet the guidelines listed under 570.209: Guidelines for evaluating and selecting economic development projects.No loan shall be approved without verification of compliance with the public benefit standards as specified in 24 CFR 570.209(b)by the Washington State Office of the United States Department of Housing and Urban Development. Financial Undewvriting In loan underwriting the City shall adhere to the following criteria. a.Real Estate Loans Real Estate Loans shall be evaluated based on: Abilityto Repay Collateral Development Team Capacity and Experience Developer Commitment Character ofthe Developer Page 36 of 52 Ability to Repay: Projects to be funded will have at least a 1.1 projected debt coverage ratio.If the project includes more than a small percentage ofits rental income from start-up or financially weak tenants then a higher debt coverage ratio shall be required. Collateral: Projects to be funded should have a loan to value ratio of not greater than 80 percent.This value must be supported by an appraisal priorto funding.lfgreater than an 80 percent loan to value ratio is proposed,outside collateral sufficient to provide an 80 percent loan to value shall be required.In certain cases outside guarantees maysufficeforadditionalcollateral. Development Team Capacity and Experience: Projects funded shall have a development team that has both the capacity and experience to complete the project as demonstrated by past projects and financial strength. Developer Commitment: Developer commitment can take many forms.While each project is likely to be different,the forms of developer commitment that can be expected include:adequate equity, guarantees of completion,guarantees to fund shortfalls or guarantees of minimum cashflow. Character: Projects to be funded should have developers with good credit histories,demonstrated integrity,and quality references. Business Loans Business Loans shall be evaluated based on: Abilityto Repay Collateral Guarantees Financial Strength Management Experience Character of the Principals Page 37 of 52 Ability to Repay: All businesses funded with the program shall have existing cash flow (profits after tax,plus depreciation,plus excess officers income,plus rent savings if applicable)sufficient to repay the loan.Projections must be supported by strong evidence thatthey will materialize. Collateral: All business loans must be supported by collateral.Real Estate must be supported by an appraisal and will be generally accepted up to 80 percent of its value.Machinery and equipment,depending on its nature,will be accepted from 40 percent to 60 percent of its fair market value.Accounts receivable and inventory will normally be used to secure operating debt and will generally not be taken as collateral. Outside collateral,such as personal residences,shall be valued up to 80 percent oftheirfair market value net ofexisting debt. Guarantees: All principals with 20 percent or more or a controlling interest,if less than 20 percent,shall provide personal guarantees. Financial Strength: Three years of financial statements on the business,plus a personal financial statement on all principals of the business shall be analyzed to determine if the company is well run and has the abilityto manage its accounts and pay its obligations. Management Experience: The management must have experience in the business or in a similar business,be able to demonstrate an ability to manage, and have the depth in management to withstand unforeseen transitions. Character of the Principals: The personal financial statements and credit history of the principals must demonstrate honesty and trustworthiness. Eligibility under 24 CFR 570.703 Each ofthe projects to be assisted with Section 108 guaranteed loan funds and Economic Development Incentive grant funds must meet one of the eligibility requirements listed in 24 CFR 570.703.The initial two projects detailed in this application are eligible under 570.703(1):Acquisition,construction,reconstruction,rehabilitation,orinstallation of publicfacilities(exceptforbuildingsforthe general conduct of government), public streets,sidewalks and other site improvements and public utilities.Other Page 38 of 52 projects to be funded underthe program may also qualify under 570-703(a)(b)(C)(d)(e)(f)(h)&(|)- c.Substitution of CDBG funds for Private Sources City staff assisted by consultants will review all projects to ensure that each loan minimizes the use ofCDBG funds.It is in the City of Pasco's selfinterest to insure thatthere is no substitution ofCDBG funding for non-federal funding.Given the limited availability of federal funds,the city staffwill work diligently to maximize the use ofprivate,non-federal funding in all projects. All projects will be reviewed to ensure that private sources of financing have been maximized and that the rate of return on equity is reasonable and within general standards. A Description ofthe Pledge of CDBG Guarantee The City of Pasco understands that if the participants in this Section 108 loan fund fail to make timely payments and the City of Pasco therefore fails to make a required payment on its notes,HUD will deduct that payment from the City of Pasco‘s CDBG Letter of Credit.In accepting this loan guarantee,the City of Pasco has pledged its CDBG funds and all other applicable grants as security for the guarantee.(Please refer to Attachment A —Certifications.) In requesting approval of this loan guarantee fund the City of Pasco is requesting a commitment for a 20-year term.The principal repayment term will be determined for each loan at time of closing. Certifications The City of Pasco will comply with all certification required under 570.704. Page 39 of 52 ScheduleforRepaymentofthe Loan HUD-424-M Fun The applicant must provide the funding matrix shown below,listing each program or program component for which HUD funding is being requested and submit this information with the application for federal financial assistance. Grant Program‘HUD Matching Other HUD Other Federa State Local/Tribal Other Program Total Share Funds Funds Share Share Share Funds Income Section 108 Economic Development Loan Fund City of Pasco $3,781,150.00 85 3,781 ,150.00 Page 40 of 52 OMB Approval No.2501-0017 (exp.03/31/2011) HUD-424-M Funding Matrix The applicant must provide the funding matrix shown below,listing each program or program component for which HUD funding is being requested and submit this information with the application for federal financial assistance. G rant HUD Matching Other HUD Other Federa State Localffribal Other Program Tolal Share Funds Funds Share Share Share Funds Income Program-Section 108 Economic Development Loan Fund $3,781,150 $3,781,150 City of Pasco.A Grand Totals $3,781,150 $3,781,150 Form HUD-424-MPage109(o3/2oo3) Page 41 of 52 PLANNING COMMISSION MINUTES 7/19/2018 L. Block Grant CDBG Program Section 108 Guaranteed Loan Program Amended Application (MF# BGAP 2018- 007) Chairwoman Roach read the master file number and asked for comments from staff. Michael Morales, Community & Economic Development Deputy Director, discussed the Section 108 Loan Program amended application. The Section 108 Program allows CDBG recipient communities to leverage their CDBG entitlement for lending instrument that could be used for qualifying economic development and housing activities. This was discussed by the Planning Commission a few months ago for $3.4 million and City Council approved. Since that time, the allocation has increased so the increase allows the City to borrow an additional $400,000. The City wishes to reapply for the new maximum amount of $3.8 million. The use for the program funds do not change. HUD will ultimately determine what qualifies and for what amount but the City would like to maximize their request. Chairwoman Roach asked if these funds would be used on the Lewis Street Overpass. Mr. Morales said no. This would be a loan pool with the funds will be used for Peanuts Park and the Farmer’s Market Plaza and if the funding allows continue with improvements in those areas. There may be opportunities for relending in the future but that is not in the plans at this time. Chairwoman Roach asked for clarification on relending activities as it pertains to business owners. Mr. Morales replied yes, to business owners, but there are no plans to do so at this time. Commissioner Bykonen asked if the dollar amount they approved the first time was an anticipated amount and this is the actual amount. Mr. Morales said no, it was based on the 2017 allocation but since that time, the 2018 numbers are reflected and it worked in the City’s benefit and it is best to apply for as much possible. Commissioner Greenaway moved, seconded by Commissioner Bykonen, to close the public hearing and recommend the City Council approve the Section 108 Loan Guarantee amended application and proposed us of funds for the Peanuts Park Renovation/Farmers Market Redevelopment and Infrastructure project. The motion passed unanimously. Page 42 of 52 AGENDA REPORT FOR: City Council August 7, 2018 TO: Dave Zabell, City Manager Workshop Meeting: 8/13/18 FROM: Stan Strebel, Deputy City Manager Executive SUBJECT: Providing for the Listing of Real Property on a Sale Procedural Alternative I. REFERENCE(S): Proposed Ordinance II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: N/A IV. HISTORY AND FACTS BRIEF: In recent weeks, Council has reviewed surplus City properties for possible sale. At times, the use of a real estate broker may be in the best interest of the City, both for buying, as well as selling real property. The attached proposed ordinance amends current sections in the Pasco Municipal Code to add "Realtor Listing" as an alternative to other methods such as negotiated sale and competition bid auction. The proposed ordinance also makes updates to the code to improve consistency, correct an error, and add "market analysis" as an alternative to appraisal. V. DISCUSSION: Staff recommends discussion on the ordinance and requests direction from Council. Page 43 of 52 Ordinance Amending PMC 2.46 “Sale of City Property” - 1 ORDINANCE NO.__________ AN ORDINANCE of the City of Pasco, Washington Amending PMC 2.46 “Sale of City Property” Providing for the Listing of Real Property as a Sale Procedural Alternative WHEREAS, the City Council may determine that certain real property owned by the City may not be necessary for the present or future municipal uses of the City, and determine such property “surplus” to the needs of the City; and WHEREAS, to provide for an efficient and equitable means for the sale or disposal of such property, the City may utilize alternative methods to provide for the prompt and most beneficial means to the City and its citizens for the disposal of such property; and WHEREAS, the City’s interest in disposing of such property may be benefitted by the assistance of a real estate professional; and WHEREAS, the City Council has determined that this alternative method may be in the best interest of the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. That Section 2.46.010 of the Pasco Municipal Code entitled "Authority to Sell Real Property” shall be and hereby is amended and shall read as follows: 2.46.010 AUTHORITY TO SELL REAL PROPERTY. Whenever it appears to the City Council that it is for the best interest of the City and the people thereof that real property belonging to the City should be sold, the City Council shall, by Resolution, declare such property surplus to the needs of the City and authorize the sell and conveyanceconvey of such property under the limitations and restrictions and in the manner hereinafter provided. In making such sales, the City Council may sell timber, mineral, water rights, or other resources on any land owned by the City separate and apart from the land or may reserve such rights to the City.in the same manner and upon the same terms and conditions as provided in Sections 2.46.020 – 2.46.070 for sale of real property. The City Council may reserve mineral rights in such land. (Prior code Sec. 2-10.04.) Section 2. That Section 2.46.020 of the Pasco Municipal Code entitled “Minimum Price of Real Property” shall be and hereby is amended and shall read as follows: 2.46.020 MINIMUM PRICE OF REAL PROPERTY. The Council shall, by Resolution, fix a minimum price, or authorize determination of the minimum price by appraisal or market analysis, at which the real property may be sold by bid. The factor for consideration of the sale price shall include: A) Appraisal or market analysis price. Page 44 of 52 Ordinance Amending PMC 2.46 “Sale of City Property” - 2 B) Property tax or sales tax generation capacity by potential purchaser. C) Essential services to be provided by potential purchaser needed by the community. D) The purchaser’s use consistent with neighborhood plan or improvements. E) Availability to other governmental entities for siting essential services. No sale shall me made for less than unless at least the minimum price fixed by the Council.is bid. (Ord. 1991 Sec. 1, 1978; prior code Sec. 2-10.08.) Section 3. That Section 2.46.030 of the Pasco Municipal Code entitled “Procedures for Sale of Real Property Exception” shall be and hereby is amended and shall read as follows: 2.46.030 PROCEDURES FOR SALE OF REAL PROPERTY. EXCEPTION. The City Council shall determine which of the following methods shall be used to facilitate the sale of real property owned by the City and shall set forth such determination in the Resolution. Passage of such Resolution does not bind the City Council to sell the property using only such method if such method proves, over a reasonable period of time, to be unsuccessful. The sale may be facilitated by: A) Competitive Bid Auction. Following solicitation of bids, a reasonable period for response, and the opening of bids, the City may sell the property to the highest responsible bidder under the terms and conditions as approved by the City. B) Realtor Listing. The property may be listed for sale through a qualified licensed realtor. The realtor may be selected upon the request for qualifications, for either continuing professional services or for an individual property. C) Negotiated Sale. The City Council shall set forth its reasons in the Resolution declaring its desire to attempt a negotiated sale. D) Intergovernmental Transfer Pursuant to Chapter 39.33 RCW. E) Other Method Authorized by Statute. When a sale by a method other than through a competitive bid or as provided above is authorized by State or Federal law. F) Emergency Sales. When the City Council setting forth the facts by Resolution has declared an emergency exists, the City Council may direct the manner of sale appropriate to meet the emergency. (Ord. 1991 Sec. 2, 1978; prior code Sec. 2-10-12.) The City Clerk shall advertise for written competitive bids on any sale of real property except: Page 45 of 52 Ordinance Amending PMC 2.46 “Sale of City Property” - 3 A) When sale by a method other than through a competitive bid is specifically authorized by state law; B) When the value of the property to be sold is less than one thousand dollars based on a reasonable estimate accepted by the Council; C) When the Council setting forth its reasons by resolution declares its desire to attempt a negotiated sale. Passage of such a resolution does not bind the Council to sell the property by negotiation; D) When the Council setting forth the facts by resolution has declared an emergency to exist. The Council shall further direct by resolution the manner of sale appropriate to meet the emergency. Unless otherwise provided by law, all sales by competitive bid shall be as provided in this chapter. Section 4. That Section 2.46.035 of the Pasco Municipal Code entitled “Negotiated Sales” shall be and hereby is amended and shall read as follows: 2.46.035 NEGOTIATED SALES. Following the passage of a resolution as provided herein in subsection (C) of Section 2.46.030, the Council shall direct the obtaining of at least one appraisal or a market analysis for the property being considered for sale. The appraisal or market analysis shall be performed by an independent qualified appraiser or realtor to The appraisal shall determine the value of the property for the purpose it is intended to be used, and the value of the property for such other circumstances as the Council may direct. The appraisal or market analysis shall be performed not more less than six months prior before to the date of sale unless the Council by Resolution setting forth its reasons provides for a longer period of time. The results of the appraisal or market analysis shall be made public prior to the Council’s approval of the sale of the real property. No real property shall be sold for less than the appraisal or market analysis price unless any appraisal obtained without the Council sets setting forth its reasons by Resolution. (Ord. 1991 Sec. 3, 1978.) Section 5. That Section 2.46.040 of the Pasco Municipal Code entitled “Advertisement of Sale of Real Property Publication – Posting” shall be and hereby is amended and shall read as follow: 2.46.040 COMPETITIVE BID AUCTION SALE. A sale by method of auction via competitive bidding shall conform to the following requirements: ADVERTISEMENT OF SALE OF REAL PROPERTY PUBLICATION – POSTING. The City Clerk shall publish an advertisement for bids once each week for two successive weeks in the official city newspaper. All pending sales shall also be advertised by any notice posted on a public bulletin board in a conspicuous place at the City Hall. Both posting and the date of last publication must be at least five calendar days before the final date for submitting the bids. A) Advertisement of Sale of Real Property-Publication and Posting. The City Clerk shall publish an advertisement for bids once each week for two successive weeks in the official newspaper of the City. All pending sales may be advertised by any notice posted on a public Page 46 of 52 Ordinance Amending PMC 2.46 “Sale of City Property” - 4 bulletin board in a conspicuous place at City Hall, upon the City’s website, or upon a third-party website suitable for the sale of real property. Both such posting and the date of last publication must be at least five (5) calendar days before the final date for submitting the bids. B) Contents of Advertisement for Sale of Real Property. The advertisement for bids shall particularly describe the property or portion thereof proposed to be sold; shall designate the place and time that the bids will be opened; shall set forth the minimum price; and shall set forth the terms of the sale. C) Opening Bids for Sale of Real Property; Rejection. The bids shall be opened in public at the time and place stated in the newspaper publication. The City Council may reject any and all bids, or bid for any one or more of the parcels of realty included in the advertisement for bids. (Prior code Sec. 2-10.16.) Section 6. That a new Section 2.46.045 of the Pasco Municipal Code entitled “Listed Sale” shall be and hereby is created and shall read as follows: 2.46.045 LISTED SALE. The City may list with a qualified realtor the property for sale under the terms of a negotiated listing agreement. The listing agreement shall provide the term of the listing, minimum asking price, services to be performed by the realtor, and the condition that the purchase price is subject to approval by the City Council. Section 7. All remaining terms and conditions of Chapter 2.46 “Sale of City Property” not amended herein, shall remain in full force and effect. PASSED by the City Council of the City of Pasco, Washington, and approved as provided by law this ____ day of _________________, 2018. _____________________________ Matt Watkins, Mayor ATTEST: APPROVED AS TO FORM: ______________________________ ____________________________________ Daniela Erickson, City Clerk Leland B. Kerr, City Attorney Page 47 of 52 AGENDA REPORT FOR: City Council August 8, 2018 TO: Dave Zabell, City Manager Workshop Meeting: 8/13/18 FROM: Steve Worley, Director Public Works SUBJECT: Quad-Cities Agreement - Stormwater Education I. REFERENCE(S): Quad-Cities Memorandum of Agreement (MOA) for Stormwater Education II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Stormwater Grant - Total of $31,603.10; Pasco's portion being 33.38% or $10,549.11. This amount will be increased by 2.5% each year for the next four years. In addition, one-fourth of $15,000 annually or $3,750. IV. HISTORY AND FACTS BRIEF: In September 2003, the Department of Ecology issued a regional water rights permit in the name of Pasco, Richland, Kennewick, and West Richland, referred to as the "Quad - Cities". A condition of the permit was for the cities to have water conservation programs, including a recommended school education program. Since 2010, the Franklin Conservation District (District) has provided public education and outreach activities to support the Quad-Cities. V. DISCUSSION: The District currently provides water conservation and stormwater education programs to the school districts and general public. The District has agreed to make the education Page 48 of 52 on stormwater part of their program. The cost to the City would be an annual lump sum base activities amount, plus actual costs for materials and supplies purchased for the Home & Garden Show and Fair. The Memorandum of Agreement outlines the program with the City of Kennewick being the lead agency. The Memorandum of Agreement meets the water right requirements. Page 49 of 52 MEMORANDUM OF AGREEMENT - Page 1 MEMORANDUM OF AGREEMENT BETWEEN CITIES OF KENNEWICK, PASCO, RICHLAND, WEST RICHLAND AND FRANKLIN CONSERVATION DISTRICT FOR PUBLIC EDUCATION PROGRAM SERVICES This MEMORANDUM OF AGREEMENT (MOA) is made and entered into this date by and between the Cities of Kennewick, Pasco, Richland, and West Richland, municipal corporations (hereinafter “Quad-Cities”) and the Franklin Conservation District, a governmental subdivision of the state (hereinafter “District”). I. RECITALS WHEREAS, the Quad-Cities and the District are public agencies as defined in RCW 39.34.020(1), who wish to enter into a Memorandum of Agreement; and WHEREAS, the Quad-Cities have public education and outreach responsibilities and conditions per both Water Right Permit S4-309676 and the Eastern Washington Phase II NPDES Municipal Stormwater Permit; and WHEREAS, the District currently provides water conservation and stormwater education programs to the school districts and general public; and WHEREAS, since 2010 the District has provided public education and outreach activities to support the Quad-Cities; and WHEREAS, the Quad-Cities desire to enter into a new Memorandum of Agreement with the District to continue to support the Quad-Cities through public education and outreach activities for the Quad-Cities area; NOW, THEREFORE, In consideration of the conditions, covenants and agreements contained herein, the parties agree as follows: II. TERMS 1. DUTIES. The District will offer the Drain Rangers stormwater curriculum (Grades 3-8) and the Jr. Drain Rangers water conservation curriculum (Grades K-2) to classrooms in the Quad-Cities to help fulfill the Quad-Cities shared Water Right requirements and Eastern Washington Phase II NPDES Municipal Stormwater Permit requirements. All lessons are aligned with Next Generation Science Standards and Common Core Standards in English/Language Arts. 2. DELIVERABLES. The District shall provide the following deliverables: a. Drain Rangers Stormwater curriculum will be offered to teachers (Grades 3-8) in three-hour teacher workshop format. Four no-cost workshops will be held each year, and the District will provide free clock hours, curriculum binders and dinner to participating teachers. Page 50 of 52 MEMORANDUM OF AGREEMENT - Page 2 b. The District will teach additional Drain Ranger lessons in participating teachers’ classrooms. c. The District will offer ice cream party supplies to teachers who measure the performance of the curriculum. d. The District will offer Jr. Drain Ranger lessons to all K-2 classrooms in the Quad- Cities area, with an estimate of 3,500 students being taught. e. Water conservation and stormwater pollution materials will be provided for each Drain Rangers and Jr. Drain Rangers lesson (shower timers/bookmarks). f. Each of the Quad-Cities will be recognized as Drain Rangers and Jr. Drain Rangers sponsors on all printed materials handed out to teachers, students and the public. g. District will provide an annual report summarizing the number of teachers, students and schools and lessons taught. h. District will coordinate and staff a booth at the Regional Home & Garden Show held at the TRAC in Pasco each February, and the Benton/Franklin Fair in Kennewick each August. i. Separately from the above base activities, the District will also purchase and distribute educational materials and supplies for the booths. 3. COMPENSATION TO THE DISTRICT. The District will semi-annually bill the Quad- Cities through the City of Kennewick in June and December of each year during the term of this MOA. The annual lump sum base activities amount due the District for the first year (July 1, 2018-June 30, 2019) will be $31,603.10, based on the detailed budget in attached Exhibit A-2018). For each year thereafter during the term of the Agreement, the District will bill a fixed 2.5% annual increase to this amount. The District will also semi- annually bill the actual costs for educational materials and supplies purchased for the Home & Garden Show and Fair, which are estimated to be $15,000.00 per year. 4. QUAD-CITIES COST SHARING. The four cities will divide the lump sum base activities compensation to the District based on population, per the July 1, 2017 US Census Bureau population estimates. The proportionate share for each City is 36.20% for Kennewick, 33.38% for Pasco, 24.95% for Richland, and 6.47% for West Richland. The estimated $15,000 in annual educational materials and supplies will be divided equally among the four cities. The City of Kennewick will invoice the other Quad-Cities based on the above proportions. Each of the Quad-Cities will pay Kennewick within 30 days of receipt of an invoice from Kennewick. The City of Kennewick shall be responsible for full payment to the District. 5. TERM. The term of this Agreement is for five years, from July 1, 2018 through June 30, 2023, unless otherwise extended in writing by agreement of all parties. 6. ADMINISTRATION. This MOA shall be administered by the City of Kennewick. Modifications to this Agreement may be done by written consensus of the Quad-Cities Public Works Directors and the District. All reimbursement to the District shall be administered through the City of Kennewick. Page 51 of 52 MEMORANDUM OF AGREEMENT - Page 3 7. TERMINATION. This MOA may be terminated by 30 days’ written notice from the party desiring to terminate the Agreement with the other parties. DATED this ______ day of ______________, 2018. IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written. CITY OF KENNEWICK CITY OF PASCO ___________________________________ ____________________________________ MARIE E. MOSLEY, City Manager DAVE ZABELL, City Manager Attest: Attest: ___________________________________ ____________________________________ TERRI L. WRIGHT, City Clerk DANIELA ERICKSON, City Clerk Approved as to Form: Approved as to Form: ___________________________________ ____________________________________ LISA BEATON, Kennewick City Attorney LELAND B. KERR, Pasco City Attorney CITY OF RICHLAND CITY OF WEST RICHLAND ___________________________________ ____________________________________ CINDY REENTS, City Manager BRENT GERRY, Mayor Attest: Attest: ___________________________________ ____________________________________ MARCIA HOPKINS, City Clerk JULIE RICHARDSON, City Clerk Approved as to Form: Approved as to Form: ___________________________________ ____________________________________ HEATHER KINTZLEY BRONSON BROWN Richland City Attorney West Richland City Attorney Page 52 of 52