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HomeMy WebLinkAbout79-0912 National Neighborhood Reinvestment Corp RESOLUTION AUTHORIZING AN AGREEMENT WITH THE NATIONAL NEIGHBORHOOD eft' REINVESTMENT CORPORATION WHEREAS, it is necessary and desirable to develop a Neighborhood Housing Services program in the City of Elgin; and WHEREAS, the National Neighborhood Reinvestment Corporation is a non-profit, non-governmental corporation chartered by the United States Congress for the purpose of assisting units of local government in the development of Neighborhood Housing Services programs; and WHEREAS, it is in the best interest of the City of Elgin to enter into an agreement with the National Neighborhood Reinvestment Corporation for the development of a Neighborhood Housing Services program in the City of Elgin. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Leo I. Nelson, City Manager, be and is hereby authorized to execute on behalf of the City of Elgin a Neighborhood Housing Services Development Agreement with the National Neighborhood Reinvestment Corporation, a copy of which is attached hereto and made a part hereof by reference. Richard L. Verbic, Mayor Presented: September 12, 1979 Adopted: Vote: Yeas Nays Recorded: Attest: Marie Yearman, City Clerk / j NATIONAL NEIGHBORHOOD REINVESTMENT CORPORATION NHS DEVELOPMENT AGREEMENT This agreement, made between the National Neighborhood Reinvestment Corporation (Neighborhood Reinvestment) , a non-profit, non-governmental corporation chartered by the Congress , and the City of Elgin, Illinois (City) , provides for the development of a Neighborhood Housing Services (NHS) program in the City of Elgin , Illinois in accordance with the following provisions : The NHS Program A NHS program includes the development of a working relationship between residents of a specific neighborhood and a group of financial institu- tions in cooperation with city government. It involves the creation of a Revolving Loan Fund which would be controlled by the NHS. The NHS assists residents of the neighborhood to improve their homes and bring them at least to minimum code standards , by providing counseling, assistance in dealing with contractors , referrals to private financial institutions , and in cases where the homeowners are unable to meet commercial credit standards , by providing direct loans at flexible rates and terms. r Developmental Process Bringing a viable NHS into operation envisages an effort lasting at least 10 to 12 months, involving a careful process which_ has been developed over the oast four years of successful implementation of NHS programs in over 50 cities. NHS represents a sophisticated blend of private-public-community in- volvement, and must be constructed with the greatest care. The first months are spent in developing working relationships with local government, community and financial industry representatives , and selecting a local staff person with the skills and knowledge about the local scene needed to work out cooperative relationships , under the supervision of Neigh- borhood Reinvestment's Field Representative and Field Supervisor. In cooperation with the District Federal Home Loan Bank, the District Federal Reserve Bank, the Federal Deposit Insurance Corporation, the Office of the Comotroller of the Currency, regional officials of the National Credit Union Administration , and State bank and savings and loan supervisors , as appropriate, Neighborhood Reinvestment will help convene financial institutions, and obtain their interest i`n the program. One or more meetings of industry leaders called by the regulatory agency heads should take place before the actual Workshop program begins. r Page 2 When the necessary relationships have been developed, a 24-week workshop process is commenced wherein the concept is introduced to a group of approximately 45 persons (about one-third each from financial institu- tions , the community at large , and local government and regulatory bodies) . These individuals adapt the NHS model to local institutions and situations and form a committee structure which works out the details of incorpora- tion , funding, neighborhood priorities , etc. The Workshop activities include: (1) a two or three-day session (Planning and Orientation Workshop) followed by six to eight weeks of committee work; (2) a two-three hour session (Site Selection Workshop) followed by six to eight weeks of committee work; (3) a one and a half day session (Resident Inclusion Workshop) followed by four to six weeks of committee work; (4) a two-three hour session (Organizational Meeting) followed by a month of committee work; and (5) a two-three hour session (Incorporation Meeting) resulting in the actual incorporation of a local , non-profit NHS. After incorporation , the new organization is aided in obtaining its non- profit tax status , in obtaining foundation support and in selecting and training permanent staff. Neighborhood Reinvestment's staff (local and regional) then works for a short period with the NHS board and the newly hired NHS staff in setting up work procedures and defining roles and responsibilities. When the program has become fully operational , an informational seminar is arranged for lending officers and appraisers of participating financial institutions , fee appraisers, representatives of private mortgage companies , and regulatory agencies for liaison and informational assistance, and the NHS becomes an independent private entity. Time and Performance Neighborhood Reinvestment estimates that 10 to 12 months of developmental work will be necessary before the NHS program can be incorporated. This time period is based on past experience; failure to complete the NHS developmental process within the estimated time period shall not constitute by itself a breach of the contract. Program implementation typically comes a few months after incorporation. City Involvement in the Developmental Process City representatives shall work closely with the developmental program by participating in decisions on reinvesting in the selected neighborhood. 1. The Neighborhood Reinvestment staff will maintain liaison with the City during the developmental program. Appropriate City staff members shall be invited to participate in the Workshop activities. 2. During the developmental program, expressions of neighborhood desires in regard to services and public improvements and amenities will be obtained. In discussion with City officials , an agreement will be reached on attainable goals and timetables of improvements. 0,64 Page 3 3. Where City services are in need of improvement to upgrade the neighborhood environment, these services shall be improved by the City. Where public improvements and amenities are in dis- repair or lacking, the City shall improve or provide them. 4. The City agrees to provide sensitive, systematic, door-to-door housing code inspection to be undertaken in the NHS neighborhood with appropriate staff. 5. The City agrees to provide a mechanism to place Section 8 rental housing assistance in the NHS neighborhood. 6. The City agrees to provide City staff resources in data gathering and analysis for program development. Termination by Neighborhood Reinvestment due to Adverse Factors Adverse factors could arise which would make the development of a NHS program impossible. These include the inability to retain the coopera- tion of a sufficiently large number of financial institutions to support the program, determination that there were not sufficient public or philanthropic resources to develop adequate revolving loan funds , or the development of neighborhood antagonism to the program or political opposition to it. In the event such conditions arose and could not be overcome, Neighborhood Reinvestment would inform the City and return any unused portion of budgetary support which has been provided for the developmental program. Developmental Cost The City agrees to pay the sum of $35,000 to the National Neighborhood Reinvestment Corporation upon execution of this agreement as budgetary support for the developmental program. It is understood that this amount is provided for the development of the NHS program in one neighborhood in the City of Elgin , Illinois. It is further understood that if, during the NHS developmental process , a multi-neighborhood NHS development strategy is adopted, the City agrees to pay the National Neighborhood Reinvestment Corporation, upon request, the additional sum of $15,000 as additional budgetary support for the developmental program. Payment must be made payable to the National Neighborhood Reinvestment Corporation and forwarded to the: Finance Department National Neighborhood Reinvestment Corporation 1700 G Street, N.W. - 5th Floor Washington, D.C. 20552 r Page 4 Developmental Budget The following budget indicates the estimated expenses comprising the developmental cost of $35 ,000. Neighborhood Reinvestment Corporation reserves the right to change allocations among the budget items in accordance with actual expenses. Local Staff (full-time , approximately 11 months) $13,500 Fringe Costs (FICA, life and health insurance for local staff) 2,750 Workshop Expenses Lodging, meals , meetings 6,000 speakers , resource persons 3,000 participants ' travel 5,000 Support Services Board orientation , and (as needed) Executive Director training, training for housing code officials , and loan committee training, resources for board committees 2,000 Miscellaneous Materials , postage, printing, telephone , contingencies 2 ,750 TOTAL $35,000 Any unexpended balance of developmental funds will be made available to the NHS corporation. Support of the NHS Operating Budget Operating expenses for the NHS organization will approximate $70,000 - $75,000 per year, per neighborhood, on an ongoing basis. Neighborhood Reinvestment will , as part of the developmental process , endeavor to obtain private sector support for the operating budget. If necessary the City shall contribute the balance of the NHS's operating budget. Support of the NHS Revolving Loan Fund The NHS Revolving Loan Fund must be built up to a total of $350,000 or more per neighborhood over a two or three-year period. In order to help capital- ' ize the Revolving Loan Fund, Neighborhood Reinvestment agrees that upon successful development of the NHS, it shall grant $50,000 for a single- neighborhood program, or $100,000 for a multi-neighborhood program. Page 5 r The City agrees that, upon establishment of the NHS Corporation , it shall grant the sum of $300,000 over a three year period to the NHS to capitalize its Revolving Loan Fund. Said funds shall be conveyed to the NHS corporation in lump sums : $75,000 during the program's first year of operation; $100,000 during the program's second year of operations ; and, $125,000 during the program's third year of operations . IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed as of the date first above written. Executed this day of , 197 The City of Elgin , Illinois : Signed: Title: National Neighborhood Reinvestment Corporation : r Wm. A. Whiteside, Executive Director Date: The Federal Home Loan Bank of Chicago agrees to cooperate with the National Neighborhood Reinvestment Corporation and the City of Elgin, Illinois in carrying out the development of the Neighborhood Housing Services coopera- tion in the City of Elgin as set forth above. Federal Home Loan Bank of Chicago Date: r