Adopt the resolution.

BACKGROUND

As an entitlement community, the City receives an annual allocation under HUD funding through the Community Development Block Grant (CDBG) and HOME Investments Partnership (HOME) programs. HUD requires entitlement jurisdictions to submit a Five-Year Consolidated Plan, which establishes the strategic framework upon which the City utilizes its funds. The Consolidated Plan is augmented and refined by the City’s annual submission of a One-Year Action Plan, which delineates the specific projects and activities funded by each year’s HUD allocation.

A “Substantial Amendment” to the Five-Year Consolidated Plan or the One-Year Action Plan is required whenever the City funds new activities, modifies existing activities, or takes other program administrative actions.

A substantial amendment is:

• subject to the Citizen Participation process (30-day public comment period);

• requires formal action by the City Commission; and

• requires approval by HUD.

Please note that whenever an award is amended, added or rescinded, both the Action Plan and Consolidated Plan must be updated. The Consolidated Plan, which dictates the types of activities that can be funded through the Annual Allocations, can be amended through public notice, a public hearing and compliance with the remaining CDBG expenditure rules (including environmental clearance, project eligibility, and applicant eligibility). Please note that the Neptune Apartments project has met all eligibility criteria including environmental clearance which is approved through HUD and can take several months to obtain.

The City allocated $421,702.31 in FY 16/17 Community Development Block Grant (CDBG) funds previously allocated to the Lottie Apartments to the Madeleine Village Apartments via resolution No. 2018-30135. However, subsequent to this action, the scope of work for the Madeleine Village project was reduced to comply with Building Department guidelines. As such, the City would like to recapture $178,378.09 and assign these funds to the Neptune Apartments project to cover the funding shortfall for this project and ensure the timely commitment of these funds to meet expenditure ratio. The City is obligated to not exceed a 1.5 funds ratio by August 2, 2018. In order to meet this ratio, the City must expend $477,951 and withdraw these funds from the Treasury by August 2, 2018 to ensure compliance with the timeliness standard. Please refer to the attached letter received from HUD on April 9, 2018 as reference.

The Neptune Apartments were acquired in 2015 from Miami Beach Community Development Corporation. The building requires substantial rehabilitation due to neglect, poor workmanship and inferior building products used by the prior property owner.

The scope of the $2,066,826 project includes:

• termite treatment;
• roof replacement;
• building envelope and facade repairs and restoration;
• exterior paint;
• replacement of air conditioning units;
• common area floor finishes replacement;
• renovation of apartment bathrooms;
• kitchen cabinets, fixtures and appliances replacement;
• interior flooring repairs and insulation;
• drywall repair and paint;
• common area painting and landscape;
• electrical work; and
• irrigation and landscaping.

To date, $82,449 has been spent to address 11 units with shower and water heater replacement as these were critical. The City has allocated an additional $333,860 which is pending expenditure to address the larger aspects of this project including termite treatment, common area floors and kitchen remodeling as many of the cabinets have begun to fail. The pending funding gap for this project is $1,650,516. The $178,378.09 being requested here would  be used to fund the Neptune's termite treatment, temporary tenant relocation, common area floor replacement, and bathroom and kitchen rehabilitation.

By reallocating funds from the Madeleine Village project—which has been deemed overfunded because of project construction limits calculated recently—the City can expend these funds to cover capital needs at the Neptune Apartments. Accordingly, the following actions are sought:

1. Recapture $178,378.09 of CDBG funds from FY 16/17 previously allocated to the Madeleine Village Apartments for reallocation to the Neptune Apartments project.
2. Authorization for the City Manager to submit the revised Action Plans and Consolidated Plans noted herein for amendment to ensure HUD compliance.

3. Authorization for the City Manager to execute all necessary documents delineating the actions taken herein including the allocation of funds.

In addition, these funds can serve as the required match for the Hazard Mitigation Grant Program, a Federal Emergency Management Agency (FEMA) grant the City is seeking for the Neptune Apartments, which could add up to $600,000 in funding to the project and further reduce the funding gap.

Please further note that the City can award these capital funds as delineated in the City’s HUD approved Consolidated Plan.  The City's Consolidated Plan states that awards to sub-recipients must be via one of these four methods:

1. Application  with grantee follow-up (Request For Proposal process);

2. Grantee survey of qualified organizations, with direct solicitation thereafter (survey of organizations followed by Request For Proposal from interested organizations);

3. Response to unsolicited application with adherence to City's Consolidated Plan and HUD rules; and

4. Review of existing sub-recipients' performance for compliance before renewing their participation via new funding agreement (ongoing funding of compliant existing provider).

Please note that no organization seeking a capital project would qualify for existing year funds as:

* They are not an existing sub-recipient of CDBG funds;

* They have not submitted an eligible unsolicited funding proposals; and

* Issuance of  Requests For Proposals and resulting  environmental reviews and HUD approval for selected projects would not meet the August 2^nd deadline.

This item was originally presented at the April 11, 2018 City Commission and was subsequently referred to the April 20, 2018 Finance and Citywide Projects Committee (FCWPC).  Due to the time sensitive nature of ensuring that the City make funding ratio by August 2, 2018, the item was presented at the  April 20, 2018 FCWPC where it was approved unanimously.

Please note that a separate item regarding a Discussion Regarding The City’s Fiscal Year 2018/19 Federal Allocation From The U.S. Department Of Housing And Urban Development (HUD) And Their Uses was also referred to FCWPC at the April 11, 2018 City Commission.  This item was not time sensitive and is scheduled to be presented on May 18, 2018.

The Administration recommends approval and authorization of this item to:

1. Enable the timely expenditure of funds to ensure achieving funds ratio.
2. Further address the funding gap for the Neptune Apartments project that impedes the City’s ability to provide safe, decent and sanitary housing to its tenants.
3. Utilize these funds as leverage to secure FEMA funds to close the Neptune Apartments project’s funding gap.