HomeMy WebLinkAbout2010-10-7742128886
ORDINANCE NO. 2010-10-7742
AN ORDINANCE ESTABLISHING AND APPROVING THE FOUNTAIN
AVENUE HOMEOWNER REHABILITATION PROGRAM AND AUTHORIZING THE
RENEWAL AND COMMUNITY DEVEDOPMENT AGENCY OF PADUCAH TO
ADMINISTER THE PROGRAM AND PROVIDE FINANCICAL ASSISTANCE TO
ELIGIBLE APPLICANTS FOR THE REHABILITIATION OF EXISTING HOMES IN THE
FOUNTAIN AVENUE NEIGHBORHOOD.
WHEREAS, the City of Paducah is charged with the responsibility of overseeing
the proper and orderly development or redevelopment of vacant, orphaned, or underutilized
residential properties located within its corporate boundaries and of insuring the integrity and
quality of its existing residential neighborhoods; and
WHEREAS, the City of Paducah's economic well-being is related to and in many
respects dependent upon, sustained growth of its population and tax revenue base through the
proper and orderly development or redevelopment of vacant, orphaned, or underutilized
residential properties located within its corporate boundaries; and
WHEREAS, in order to fulfill the aforesaid public purpose the City of Paducah is
presently engaged in a neighborhood redevelopment program known as the "Fountain Avenue
Neighborhood Revitalization Project" whose primary purpose is to revitalize the Fountain
Avenue neighborhood through the rehabilitation of existing homes which will maintain the
residential appearance of such area; and
WHEREAS, the goals of the Phase 1 Fountain Avenue Neighborhood
Revitalization Plan (the "Plan"), which was adopted by the City Commission on April 17, 2007,
are to promote the redevelopment of the Fountain Avenue Neighborhood by i) providing
incentives to encourage rehabilitation of existing structures and promote quality new infill
construction and ii) seeking opportunities to help low or moderate -income families to remain
residents m the neighborhood;
WHEREAS, the City of Paducah desires to commitment funds for the
establishment of the Fountain Avenue Homeowners Rehabilitation Program (the "Program"),
which will be utilized to accomplish the goals of the Plan by providing forgivable payment loans
to eligible applicants for the purpose of residential rehabilitation in the Fountain Avenue
neighborhood;
WHEREAS, this Program will encourage rehabilitation of owner -occupied
housing units located in the Fountain Avenue neighborhood of Paducah where infrastructure and
services are in place and promote quality housing consistent with the character of the adjacent
residential neighborhood.
BE IT ORDAINED BY THE CITY OF PADUCAH, KENTUCKY:
ARTICLE I
Section I Title
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1.1 This Ordinance shall be known and may be a cited as the "Fountain Avenue Homeowner
Rehabilitation Program Ordinance of the City of Paducah".
Section 2 Purpose
2.1 This ordinance is intended to establish and facilitate how housing rehabilitation can be
provided for low and moderate -income households within the City of Paducah Fountain Avenue
Neighborhood in order for the City of Paducah to meet its housing obligations as determined by
the Fountain Avenue Neighborhood Plan.
Goal 4-1: Increase the number of owner occupied standard structures to 60% plus.
Goal 4-2: Provide incentives to encourage rehabilitation of existing structures and promote
quality new -infill construction.
Goal 4-3: Seek opportunities to help low income families remain residents in the neighborhood
Goal 4-4 Promote ideas and controls that help maintain the historic style and character of the
neighborhood on both existing structures and new infill construction.
Goal 7-1: Improve the health, safety, and welfare of all residents within FASA.
2.2 It is intended to provide technical and financial assistance to eligible Homeowners to
rehabilitate homes occupied by low and moderate - income households.
2.3 It is intended to provide a mechanism for eligible Homeowners to gain access to grants from
the City of Paducah.
2.4 Forgivable payment loans for rehabilitation awarded under the Program may be funded by
(1) annual budgetary appropriation by the City Commission as it deems appropriate, in its sole
discretion, (2) State and Federal grant programs sponsored by the City of Paducah and/or other
sources to be determined.
Section 3 Definitions
3.1 Words and phrases defined in the "Fair Housing Act," shall be incorporated in this ordinance
as if written herein.
3.2 Gross Income shall mean the total income of all members of an applicant's household
including but not limited to: wages, tips, interest, dividends, and retirement funds.
3.3 Project Manager shall be the Director of Planning or his designee.
3.4 Indigenous Housing Need means deficient housing units occupied by low and moderate -
income households within a municipality.
3.5 Rehabilitation shall mean the restoration of a deficient or substandard dwelling unit to a safe
and sanitary condition in compliance with all applicable building codes, the Fountain Avenue
Enhanced Standards and Design Guidelines.
Section 4 General Provisions
4.1 Eligibility
Eligibility for forgivable payment loans under the Program will be reviewed and preliminarily
approved by the Project Manager upon the criteria outlined herein. Eligibility will be determined
on a "first come, first serve basis." All property receiving the financial assistance under the
Program shall be located within the Fountain Avenue neighborhood as that neighborhood is
defined in the Plan. Final approval of eligibility for the forgivable payment loan shall be by
Urban Renewal.
a. A Homeowner who is a member of either a low or moderate -income household who
occupies the dwelling unit to be rehabilitated. Proof of income of the household
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occupying the rehabilitated unit shall be required and reviewed by the Project Manager.
Income shall not exceed 120% of median area income.
Graph 1
FY 2010 Income Limits for 120% of HUD Area Median Income
i.
1 Person Household
$45,450
ii.
2 Person Household
$51,950
iii.
3 Person Household
$58,450
iv.
4 Person Household
$64,900
v.
5 Person Household
$70,100
vi.
6 Person Household
$75,300
vii.
7 Person Household
$80,500
viii.
8 Person Household
$85,700
b. Any dwelling unit, which is proposed for rehabilitation, shall be located in the Fountain
Avenue Project area and shall be considered deficient or substandard as determined by the
Project Manager who may seek advice from the Chief Building Official. In order to be deficient,
a unit must need a minimum of $25,000 worth of improvements. Program parameters include:
1. Eligible applicants must earn under 120% Area Median Income.
2. The Program will target structures in need of rehabilitation.
3. Rehabilitation will be evaluated on need and overall completion of
application.
4. Project applications will have a deadline date.
5. Third party construction estimates and proof of financial ability to
complete project will be required.
6. A City of Paducah letter of financial commitment will be given upon final
approval of the forgivable payment loan by Urban Renewal.
7. The Program will be open to existing Homeowners that reside in the
residence at the time of the adoption of the Ordinance.
8. Eligible applicant rehabilitation costs must exceed $25,000 to be eligible
under the Program.
9. Each forgivable payment loan awarded to eligible applicants under this
Program shall not exceed a maximum of $30,000 per residence or a
minimum $8,333 per residence.
10. Each forgivable payment loan shall not exceed 1/3 of Homeowner
contributions to the total rehabilitation costs.
11. Eligible rehabilitation improvements must be permanent. Eligible
rehabilitation improvement shall include without limitation: roofs,
windows, electrical, hot water heaters, structural repair, plumbing,
insulation, painting and others improvements as required by all applicable
building codes, the Fountain Avenue Enhanced Standards and Design
Guidelines.
12. Liquid assets shall not exceed $10,000 unless proof of 75% of assets will
be used on the rehabilitation project.
c. Upon completion, a rehabilitated unit shall be safe and sound and meet all applicable building
codes and Fountain Avenue Enhanced Standards as set out in Section 2006-4-7104 of the
Paducah Code of Ordinances.
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d. Eligible applicants shall, in writing, agree to comply with all the requirements of this
Ordinance, and any other applicable ordinance of the City of Paducah at the time the forgivable
payment loan documents under this Ordinance is executed.
4.2 , Repayment of Loan.
a. The forgivable payment loan is a 0% interest loan evidenced by a promissory note in
form and substance satisfactory to the City of Paducah and payable to the City of Paducah and
secured by a mortgage interest in favor of the City of Paducah. The City of Paducah will prepare
a promissory note and mortgage to be recorded. The mortgage would be considered second or in
some cases third mortgage.
b. The entire amount of the forgivable payment loan shall be forgiven by the City of
Paducah over a period of five (5) years so long as Homeowner is not in default, as described
below. This loan shall be forgiven by amortizing the amount of the loan over a five (5) year
period from the date of the issuance of the certificate of compliance according to the schedule set
forth below with the note automatically retiring after five (5) years.
In the event of default, Homeowner shall immediately pay to the City of Paducah the loan
amount less the yearly reductions in the total amount of the loan which sum shall be calculated
according to the following schedule:
i) Sale of property less than one year* 100% repayment
ii) Sale of property after one year but less than two years* 80% repayment
iii) Sale of property after two years but less than three years* 60% repayment
iv) Sale of property after three years but less than four years* 40% repayment
v) Sale of property after four years but less than five years* 20% repayment
vi) Sale of property more than five years* 0% repayment
4.3 Events of Default.
The occurrence of one or more of the following events will, at the option of the City of Paducah,
constitute an event of default under the aforesaid note and mortgage:
(a) In the event Homeowner shall sell or transfer ownership of the property or fails to
occupy the property as Homeowner's principal residence for five (5) years after the issuance of
the certificate of compliance;
(b) Default in the performance of any other terms of the aforesaid note and mortgage;
(c) Homeowner's insolvency, the appointment of a receiver for Homeowner or the
institution of any bankruptcy proceedings by or against Homeowner; or
(d) Any statement or document submitted to the City of Paducah or its agents by
Homeowner contains any untrue statement of a material fact or omits to state a material fact
required to be stated therein or which should be included therein for the purpose of determining
Homeowner's eligibility for the forgivable payment loan, or which is necessary in order to make
the statements therein not misleading.
4.4 Remedies Upon Default. Upon the occurrence of any event of default by Homeowner, City
of Paducah may declare the note immediately due and payable according to the schedule set
forth in Section 4.2 and institute proceedings for its collection, including without limitation the
foreclosure on the aforesaid mortgage securing the note.
Section 5 Administration
Under this section, the City of Paducah undertakes to actively market through advertising in the
media, distributing flyers, etc. the Homeowner Rehabilitation Program.
5.1 Staff
a. The Project Manager shall perform the following duties:
1. Conducting a Marketing Program to assure compliance with all Federal Fair Housing
requirements:
El
a. Mailing to all Homeowners at lease once a year, an announcement of the Homeowner
Rehabilitation Program. This announcement shall include an explanation of the eligibility
requirements as well as the procedures for making application for rehabilitation assistance under
the program.
b. Conducting at least one well publicized public meeting to outline and answer questions about
the Homeowner Rehabilitation Program.
d. Preparation of information/application packets for distribution to interested Homeowners.
2. Preparation of the necessary applications, financial statements, a summary of the
commitments to the rules and regulations of the program, and such other forms to be executed in
administering the program. The appropriate forms shall include, along with other data deemed
appropriate, Homeowner Rehabilitation application, proof of ownership, income qualifications
and deed restrictions.
3. Review the eligibility of the applicant based on the requirements of this Ordinance and the
data provided on the forms required as part of the application procedure and make a
recommendation to Urban Renewal.
4. Maintenance of an updated file on available governmental and non-governmental programs
for financial assistance for low and moderate income households, including eligibility
requirements, application forms, filing deadlines, and whether funding is currently available.
5. Providing technical assistance to eligible low or moderate - income applicants.
6. Reviewing the deficiencies of an applicant's dwelling unit and submit the findings in writing
to be kept on file as part of the application for financial assistance.
7. Maintaining a list of approved contractors based upon satisfactory references on past work
performed.
8. Determining whether the proposed work to be performed meets the parameters of this
Ordinance and whether the cost to complete that work is reasonable. Said determination shall be
in writing and kept on file as part of the application.
9. Conducting appropriate, periodic inspections of the work being done and, when satisfactorily
completed, issue a certificate of compliance bearing the date the certificate was issued. A copy of
this certificate shall be kept as part of the file on the application.
10. Preparation and periodic presentation (at least once a year) to the City Commission of a
report on the number and type of rehabilitation applications received and the amount of technical
assistance provided by the project manager. The report shall contain, at a minimum:
a. The number of applications received and approved.
b. The income levels of those approved.
c. The number of rehabilitated dwelling units completed.
d. The rehabilitation cost of each unit.
e. A summary of the type of work completed.
f. How many applications are currently being processed.
5.2 Funding
a. The City of Paducah may make annual budgetary appropriation as it deems necessary to fund
the forgivable payment loans to be awarded under this Ordinance and the administrative costs
associated therewith.
b. Other sources of funding to administer and implement the Program may include without
limitation state and federal programs when available.
c. State and federal funds shall be disbursed according to the rules and regulations of the agency
administering the funds.
d. Each year the City Commission will review the Program and the market conditions in the
Fountain Avenue neighborhood to determine whether to continue the Program, amend the
Program or terminate the Program and rely fully on market conditions to complete the
redevelopment of the neighborhood.
Section 6 Procedures for Making Application, Review and Approval
6.1 Application
Applications and other required forms shall be made available at the Department of Planning.
Technical assistance shall be available from that office to assist applicants in completing and
submitting an application. There shall be no fee for filing an application. Notice of application
deadlines will be given.
6.2 Review
a. The Project Manager shall determine the completeness of the application. Incomplete
applications will not be processed.
b. Upon a determination of completeness, the Project Manager shall make a determination as to
whether the applicant meets the eligibility criteria under the Program.
c. Upon a determination that the applicant is eligible under the Program, the Project Manager
shall inspect the property to determine whether it qualifies as deficient under this Ordinance.
d. Upon a determination that the dwelling unit is deficient, the Chief Building Inspector and
Project Manager shall cause a written description of the work required to be completed in order
to meet the criteria of this Ordinance, Enhanced Standards, related building codes and submit a
copy to the applicant and retain one copy to be kept as part of the applicant's file.
e. Upon receipt of the description of the work required to be completed, the applicant shall
indicate any discrepancies or omissions in writing to the Project Manager. The Project Manager
shall review the applicant's comments and provide a written response, including any appropriate
adjustments to the original report. A copy of this response shall be submitted to the applicant
with a copy to be kept as part of the applicant's file.
f. Following the final determination of the work to be performed by the Project Manager and
acceptance by the Homeowner, the Project Manager shall seek written proposals together with
the cost to complete the work from appropriate qualified contractors. A list of these contractors
shall be kept in the office of the Project Manager. The Project Manager shall recommend a
contractor based upon completeness of the proposal and the lowest overall cost submitted. This
recommendation shall be submitted to the applicant for review and concurrency.
6.3 Action on the Application
a. Upon review of the approved contractor's written proposal and cost estimate, the Project
Manager shall preliminarily approve, disapprove, or modify the proposal as might be appropriate
to meet the requirements of the applicable ordinances of the City of Paducah and requirements of
the Program and the reasonableness of the cost. If the proposal is modified or disapproved, the
applicant and the approved contractor may meet with the Project Manager to make appropriate
modifications until the application is approved.
b. Upon approval of the work to be performed and the related cost, the Project Managers shall
submit the application and the work proposal together with all supporting documentation to
Urban Renewal for final approval.
6.4 Homeowner's Obligations Upon Approval.
Homeowner shall deliver to the Project Manager the following documents in fully executed
form:
a. A promissory note in the amount of the forgivable payment loan with terms as required
by this Ordinance.
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b. A mortgage agreement in favor of the City of Paducah with terms as required by this
Ordinance.
c. A builder's risk policy which names the City of Paducah as a loss payee which has
terms and provisions as acceptable to the City of Paducah;
d. A duly executed contract between Homeowner and the approved contractor outlining
the rehabilitation work to be performed, the cost to be incurred, including an amount for
retainage, to assure the acceptable completion of the construction, and the time of performance.
This contract must be reviewed by and acceptable to the Project Manager; and
e. Any other documents which may be requested by City of Paducah upon approval.
6.5 Disbursement of Forgivable Payment Loan Proceeds.
Subject to the terms and conditions hereinafter provided, the Homeowner shall be entitled to
draw proceeds on the forgivable payment loan up to the extent which is commensurate with the
percentage of completion of the construction of the rehabilitation work as approved by the
Project Manager. For example, if rehabilitation work has been completed to the extent of 50
percent, the Homeowner shall be entitled to draw up to 50 percent of the forgivable payment
loan. However, notwithstanding the foregoing, disbursement shall only be made when the
following condition precedents shall have been satisfied:
a. The Homeowner shall submit for the Project Manager's review a written request of
voucher for loan disbursement, which shall have been prepared by the approved contractor. The
written request or voucher shall be signed by both the approved contractor and the Homeowner.
The written request or voucher shall fully set forth a specific description of the costs incurred in
the construction process to the date of request.
b. The Homeowner shall provide to Project Manager a certification executed by the
approved contractor which shall certify the aforesaid costs incurred in the construction process,
and that the same are due pursuant to the contractor agreement, and further, certify that all
contractor fees and costs and all payments due the subcontractors (and their employees, agents,
etc.), materialmen, and all other employees, agents, or others employed or contracted with
directly or indirectly in the construction process have been fully paid to the date of the written
request or voucher for loan disbursement; provided, however, that this latter provision shall not
apply to any payments which may be due and owing and which are a part of the request for the
loan disbursement, for which the approved contractor shall certify that such payments shall be
made immediately following disbursement.
c. That there does not exist any liens or adverse interests against the real property of the
Homeowner, nor has any notice been given regarding any person's intent to file such a lien or
adverse interest.
d. At the request of the Project Manager, the Homeowner shall provide to Project
Manager interim mechanics' or materialmen lien waivers to be executed by the approved
contractor, subcontractors, materialmen and/or their employees or agents.
e. The Project Manager has verified the percentage of completion of construction, and
further, has verified that the construction process is in accordance with building and construction
plans and specifications.
f. The Homeowner has complied with the terms of this Ordinance and is not in default of
any term or provision of the note, mortgage, and any other collateral agreement relating thereto.
In the event all of the foregoing condition precedents are fully satisfied, the Project Manager
shall within five (5) business days following date of request remit directly to the approved
contractor the permitted amount of draw from which costs shall be paid and fully satisfied, and
the approved contractor shall pay and satisfy all sums due and owing to subcontractors and
materialmen, and upon request, the Homeowner and the approved contractor shall provide to
Project Manager receipts evidencing such payments.
In the event all of the foregoing condition precedents are not fully satisfied, the Project Manager
shall have the right, in its discretion, to refuse the request in total until such time as all condition
precedents are satisfied, or pay such portion of the request that the Project Manager deems
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appropriate. Additionally, the Project Manager shall have the right to pay any the forgivable
payment loan proceeds directly to any creditors who have provided labor or materials for the
construction of the rehabilitation work, which payments shall be deemed for and in behalf of the
Homeowner and as a part of the forgivable payment loan hereunder. The Project Manager's
determination shall be binding and final upon the Homeowner and the approved contractor.
6.6 Issuance of Certificate of Compliance.
Following completion of the work, the Project Manager shall inspect the dwelling unit and
certify whether or not the work has been satisfactorily completed. If the work is sufficient, a
Certificate of Compliance shall be issued and any retainage being held shall be paid directly to
the approved contractor subject to the satisfaction of the conditions precedent set forth in Section
6.5 above. If the work is insufficient, the approved contractor shall be notified and given 90 days
to remedy the conditions cited. If the conditions are not corrected within 90 days, the Project
Manager shall be authorized to either use remaining loan proceeds, if any, and the retainage; and
such other remedies as appropriate, to complete the rehabilitation work in a manner satisfactory
to the Project Manager.
ARTICLE II
If any section, subparagraph, sentence, clause or phrase of this Ordinance shall be held to be
invalid, such decision shall not invalidate the remaining portion of this Ordinance.
ARTICLE III
All Ordinances and parts of Ordinances inconsistent herewith are hereby repealed.
ARTICLE IV
This Ordinance shall be read on two separate days and will become effective upon summary
publication pursuant to KRS Chapter 424.
A TEST:
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Tammara S. Brock, City Clerk
Introduced by the Board of Commissioners, September 28, 2010
Adopted by the Board of Commissioners, October 12, 2010
Recorded by City Clerk, October 12, 2010
Published by The Paducah Sun, October 18, 2010
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