COUNCIL COMMUNICATION

 

DATE:

 

  4/21/03

 

SUBJECT: FINANAL READING OF ORDINANCE 2003-O-096

Amending the Laredo Municipal Housing FY 2003 budget by drawing down and appropriating $865,000 from the opening balance to the City’s Capital Improvement Fund.  This transfer will be set up to carry out necessary repairs associated with the owner-occupied units constructed by the Laredo Affordable Housing Corporation as part of Los Obispos Affordable Housing Project.  The amendment is authorized by the Laredo Municipal Housing Corporation’s Article’s of Incorporation.

 

INITIATED BY:

Ms. Cynthia Collazo

Assistant City Manager

 

STAFF SOURCE:

Mr. Erasmo Villarreal

Community Development Director

 

PREVIOUS BOARD ACTION: 

4/7/03- Public hearing was held, and the ordinance was introduced.

BACKGROUND: 

The Laredo Affordable Housing Corporation in partnership with the City of Laredo constructed 50 single family housing units which were made available for purchase by first time homebuyers of low to moderate income.  Construction of the homes was initiated in 1998 and completed in 2000.  The LAHC utilized HOME Investment Partnerships Program funds awarded to them by the City to finance interim construction, and the City provided the land on which the homes were constructed.  The LAHC subcontracted all work, and the Dept. of Community Development provided general project construction oversight. 

 

In follow-up to concerns from residents regarding housing construction defects and visible evidence of structural distress, the Laredo Affordable Housing Corporation contracted the firm of Howland Surveying Co. to conduct an independent structural analysis of 3 homes within the Los Obispos Housing Project.   Howland Surveying Co. determined that there was structural distress caused by faulty soil compaction below the foundation.  Based on the findings of this initial report, staff considered it prudent to conduct a structural assessment of all the homes constructed as part of this project.   As authorized by City Council on March 25, 2002, the City of Laredo contracted Howland Foundations Co. Inc. to conduct a structural analysis of each of the remaining 47 units.  The results of the second study noted that structural distress was present at varying degrees within the homes tested.  Mr. Roberto Martinez, Jr., the project engineer, determined the structural condition of each of the homes to be fair, significant, or severe.   (Continued on next page.) 

 

FINANCIAL IMPACT:    

                                                  ANNUAL BUDGET       PROPOSED AMENDMENT        AMENDED BUDGET 2003

Laredo Municipal Housing

 Transfer Out: CIF Fund                             0                                 $865,000                                 $865,000

CIF Fund:

Revenue: Transfer In-Mun. Housing          0                                      $865,000                                   $865,000

Expense: Los Obispo’s Housing Proj         0                                      $865,000                                   $865,000    

 

COMMITTEE RECOMMENDATION:

 

STAFF  RECOMMENDATION: That this ordinance be passed.  

 

 

 

 

 

 

 

 

 

Background Continued:

 

The individual tests conducted on each lot by Howland indicated that clay was present in the soil.  Moisture or lack of moisture causes clay soil to expand or contract, which explains why there was movement on the slab-on-grade foundation.     

 

City staff also contacted Arredondo Group, engineering and construction firm from San Antonio, TX to provide concurrence with the remedies proposed by Howland and to provide an estimate of foundation repair.  Arredondo group recommended that 27 of the 50 units with a recorded differential movement of more than 1¼ inches be addressed by piering to repair and or stabilize the foundation from future movement and settlement.   Arredondo group noted that the remaining homes with differentials of 1¼ inches or less would not require underpinning.    Repairs in the form of drainage, cosmetic and foundation improvements as may be applicable depending on the level of distress for each home, and anticipated contingency and engineering costs are estimated to total $865,000. 

 

The HUD San Antonio Field Office had initially informed staff that the City could not utilize federal funds through the HOME and/or Community Development Block Grant program to address housing repairs.  City staff, however, did seek a waiver from HUD to allow for the reinvestment of HOME Program Income and that HUD consider match contribution from a non-federal source to offset the use of HOME Program Income.  A response from HUD is still pending.  In light of the existing suit, City staff, however, recommends that the City move forward with the improvements from a non-federal source.  The City of Laredo does not have funds available through its General Fund; however, an alternative funding source is the Laredo Municipal Housing Corporation. 

 

The Laredo Municipal Housing Corporation currently maintains a fund balance of over $1.8 million that has been built up throughout the course of the Corporation’s existence.  Transfer of these funds for the stated purpose is allowable under the Municipal Housing Corporation’s Articles of Incorporation and would not impede operations and/or planned capital improvements. 

 

Therefore, staff proposes that the fund balance of $865,000 of the Laredo Municipal Housing Corporation be transferred to a City of Laredo CIF fund to facilitate the necessary repairs to the homes constructed as part of the Los Obispos Housing Project by the Laredo Affordable Housing Corporation.  

 

                                               

 

 

ORDINANCE No.2003-O-096

 

Amending the Laredo Municipal Housing FY 2003 budget by drawing down and appropriating $865,000 from the opening balance to the City’s Capital Improvement Fund.  This transfer will be set up to carry out necessary repairs associated with the owner-occupied units constructed by the Laredo Affordable Housing Corporation as part of Los Obispos Affordable Housing Project.  The amendment is authorized by the Laredo Municipal Housing Corporation’s Article’s of Incorporation.

 

 

WHEREAS, as part of the Los Obispos Affordable Housing Project funded through the HOME Investment Partnerships Program (HOME), the Laredo Affordable Housing Corporation partnered with the City of Laredo in the construction of 50 single family housing units that were made available for purchase by first time homebuyers of low to moderate income; and

 

WHEREAS, in follow-up to concerns from assisted homeowners regarding housing construction defects and visible evidence of structural distress, the City of Laredo contracted with the firm of Howland Surveying, Inc. to conduct a structural assessment of the Los Obispos housing units; and

 

WHEREAS, the results of the study conducted by Howland Surveying, Inc. confirmed that structural distress was present at varying degrees within all the homes tested; and

 

WHEREAS, the HUD San Antonio Field Office had initially stated that the City could not utilize federal funds through the HOME and/or Community Development Block Grant Program to address housing repairs; and

 

            WHEREAS, the City did seek a waiver from HUD to allow the reinvestment of HOME Program Income and further consideration that match contributions from a non-federal source be allowed to off-set the use of HOME Program Income, and HUD’s response is still pending; and

 

            WHEREAS, it is in the best interest of the affected property owners’ that the City move forward with the needed repairs; and

 

WHEREAS, the estimated cost of remediation varies based on the severity of the structural distress of each unit and the individual unit costs associated with foundation and general repairs, drainage improvements, as well as the proposed purchase of some homes that had severe structural distress, and

  

WHEREAS, the City of Laredo does not have funds available through its General Fund to undertake the needed remediation efforts; and

 

WHEREAS, the Laredo Municipal Housing Corporation currently maintains a fund balance of over $1.8 million that has been built up throughout the course of the Corporation’s existence; and

 

WHEREAS, transfer of these funds for the stated purpose is allowable under the Municipal Housing Corporation’s Articles of Incorporation and would not impede the Municipal Housing Corporation’s operations and/or planned capital improvements. 

 

 

NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAREDO, THAT:

 

1.      The City Of Laredo Budget will be amended for the Laredo Municipal Housing FY 2003 budget by drawing down and appropriating $865,000 from the opening balance to the City’s Capital Improvement Fund.  This transfer will be set up to carry out necessary repairs associated with the owner-occupied units constructed by the Laredo Affordable Housing Corporation as part of Los Obispos Affordable Housing Project.  The amendment is authorized by the Laredo Municipal Housing Corporation’s Article’s of Incorporation.

2.      Budget Amendment will consist of:

 

                                                  ANNUAL BUDGET       PROPOSED AMENDMENT        AMENDED BUDGET 2003

Laredo Municipal Housing

 Transfer CIF Fund                                     0                                 $865,000                    $865,000

CIF Fund:

Revenue: Transfer In-Mun. Housing          0                                      $865,000                    $865,000

Expense: Los Obispo’s Housing Proj         0                                      $865,000                    $865,000

 

 

PASSED BY THE CIY COUNCIL AND APPROVED BY THE MAYOR ON THIS THE __________ DAY OF ______ 2003.

 

 

 

 

______________________

ELIZABETH G. FLORES

MAYOR

 

ATTEST:

 

 

_______________________          

GUSTAVO GUEVARA, JR.

CITY SECRETARY

 

APPROVED AS TO FORM:

JAIME L. FLORES

CITY ATTORNEY

 

BY: ______________________ 

ANTHONY MCGETTRICK

      ASSISTANT CITY ATTORNEY