Miami-Dade Legislative Item
File Number: 131250
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File Number: 131250 File Type: Resolution Status: Adopted
Version: 0 Reference: R-697-13 Control: Board of County Commissioners
File Name: SECURING HOUSING & COMMUNITY DEVELOPMENT LOANS Introduced: 6/14/2013
Requester: NONE Cost: Final Action: 9/4/2013
Agenda Date: 9/4/2013 Agenda Item Number: 11A1
Notes: Title: RESOLUTION ESTABLISHING A POLICY THAT ANY ALLOCATIONS OF HOUSING AND COMMUNITY DEVELOPMENT FUNDS AND BUILDING BETTER COMMUNITIES GENERAL OBLIGATION BOND PROGRAM FUNDS FOR THE PURPOSE OF ACQUIRING OR IMPROVING REAL PROPERTY OR FOR PAYING OFF SECURED DEBTS ON REAL PROPERTY IN EXCESS OF $25,000.00 SHALL BE IN THE FORM OF A SECURED LOAN OR GRANT WITH RESTRICTION ON FUTURE USE OF THE PROPERTY; AND DIRECTING THE MAYOR OR MAYOR’S DESIGNEE TO INCORPORATE THIS POLICY INTO SELECTION PROCESSES AND CONTRACTS FOR HOUSING AND COMMUNITY DEVELOPMENT FUNDS AND BUILDING BETTER COMMUNITIES GENERAL OBLIGATION BOND PROGRAM FUNDS
Indexes: COMMUNITY DEVELOPMENT
  HOUSING
Sponsors: Lynda Bell, Prime Sponsor
  Jean Monestime, Co-Sponsor
Sunset Provision: No Effective Date: Expiration Date:
Registered Lobbyist: None Listed


Legislative History

Acting Body Date Agenda Item Action Sent To Due Date Returned Pass/Fail

Board of County Commissioners 9/4/2013 11A1 Adopted P

Finance Committee 7/9/2013 2A Forwarded to BCC with a favorable recommendation P
REPORT: Assistant County Attorney Geri Bonzon-Keenan read the foregoing proposed resolution into the record. Commissioner Heyman questioned the rationale for this resolution. Deputy Mayor Edward Marquez explained that secured loans provided the County with additional protection. Commissioner Heyman noted the County was already protected by requiring performance and surety bonds, obtaining proof of insurance, vetting award recipients for County relationships, checking against debarment lists, and pursuing breach of contracts. She inquired whether it was possible for the County to avoid being in second position on these loans. Assistant County Attorney Brenda Neuman explained that the County had numerous programs with different requirements depending upon the service provided, the use of the funds or the funding source. She noted previous instances where there were unsecured loans which resulted in unforeseen consequences. Assistant County Attorney Neuman said the proposed resolution would establish a policy that would memorialize business practices already used by the County Administration. Commissioner Heyman noted the County Commission and members of the Administration had diligently worked to ensure that County residents’ money was spent appropriately. She inquired about the costs required to securitize a $25,000 loan on real property and whether the County currently required this practice. Deputy Mayor Marquez noted additional costs were associated with the time that would be required by the finance and legal department staff to evaluate the security documents. He pointed out that the Administration vetted applicants for Better Building Communities General Obligation Bonds (BBC-GOB) and had an adequate system in place to address security issues. Deputy Mayor Marquez noted requiring a mortgage or a secured property right would guarantee the County future repayment. Commissioner Heyman observed that the additional cost to securitize properties valued at $25,000 could make the difference between helping small companies start small projects versus larger companies start large projects. She inquired whether this practice was really necessary considering all the other protections that were currently in force. Assistant County Attorney Bonzon-Keenan explained that the Administration currently required that BBC-GOB programs contain restrictive covenants or other security agreements as sound business practice. She said that there was no current administrative rule governing this practice and that it would become policy through the foregoing proposed resolution. Commissioner Heyman inquired whether any language, precedent, or legislative intent existed that already satisfied this intent. Assistant County Attorney Bonzon-Keenan clarified that some of the language contained in the foregoing proposed resolution had already been adopted and memorialized as it pertained to the BBC-GOB program and the administrative rules approved by the Board. She noted, however, the proposed resolution contained provisions that had not been previously adopted by this Board, even though those provisions were already implemented by the Administration as part of its daily business practice. Commissioner Heyman reiterated that she did not believe it was necessary to incur the additional costs associated with obtaining $25,000 secured loans or grants. Commissioner Moss inquired whether the Administration had any discussion with industry about these issues; and who determined whether or when a loan was converted to a grant. Deputy Mayor Marquez indicated that he was not aware of any conversations with industry representatives. Assistant County Attorney Neuman clarified that the foregoing proposed resolution would establish a policy for the Mayor and County Administration to require secured loans, noting the decision whether to obtain secured loans was currently at the Mayor’s discretion. Commissioner Moss asked whether the proposed resolution would remove the Mayor’s discretion. Assistant County Attorney Neuman confirmed that the foregoing proposed resolution removed some of the Mayor’s discretion, noting the Mayor was currently responsible to determine whether or not a particular form of security or particular covenant would be in the best interest of the County. She said that the Board would consider the item in the event that the Mayor was not able to make a determination. Commissioner Moss asked whether obtaining secured loans was currently conducted as a matter of practice without the policy. Assistant County Attorney Bonzon-Keenan clarified that the Administration required restrictive covenants for BBC-GOB programs when using funds to purchase properties. Hearing no further questions or comments, the Committee members proceeded to vote on this proposed resolution, as presented.

County Attorney 6/17/2013 Referred Finance Committee 7/9/2013

County Attorney 6/17/2013 Assigned Brenda Kuhns Neuman 6/25/2013

Legislative Text


TITLE
RESOLUTION ESTABLISHING A POLICY THAT ANY ALLOCATIONS OF HOUSING AND COMMUNITY DEVELOPMENT FUNDS AND BUILDING BETTER COMMUNITIES GENERAL OBLIGATION BOND PROGRAM FUNDS FOR THE PURPOSE OF ACQUIRING OR IMPROVING REAL PROPERTY OR FOR PAYING OFF SECURED DEBTS ON REAL PROPERTY IN EXCESS OF $25,000.00 SHALL BE IN THE FORM OF A SECURED LOAN OR GRANT WITH RESTRICTION ON FUTURE USE OF THE PROPERTY; AND DIRECTING THE MAYOR OR MAYOR’S DESIGNEE TO INCORPORATE THIS POLICY INTO SELECTION PROCESSES AND CONTRACTS FOR HOUSING AND COMMUNITY DEVELOPMENT FUNDS AND BUILDING BETTER COMMUNITIES GENERAL OBLIGATION BOND PROGRAM FUNDS

BODY
WHEREAS, Miami-Dade County provides funding from state, local and federal sources for the provision of economic development, community development, and affordable housing activities throughout the County, which include but are not limited to local Documentary Surtax funds, State Housing Initiative Partnership funds, Home Investment Partnerships funds, Emergency Services Grant funds, and Community Development Block Grant funds (hereinafter ''Housing and Community Development Funds'') and Building Better Communities General Obligation Program (''the Bond Program'') funds; and
WHEREAS, Housing and Community Development Funds and Bond Program funds are often granted to private for-profit and not-for-profit entities and governmental entities for the purpose of acquiring or improving real property or for paying off secured debts on real property; and
WHEREAS, the County’s need is great but its resources are limited; and
WHEREAS, the Board desires to protect the County’s limited Housing and Community Development Funds and Bond Program funds from fraud, misuse, or waste,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that:
Section 1. The Board hereby establishes the policy that any allocations of Housing and Community Development Funds made to non-governmental entities for the purpose of acquiring or improving real property or for paying off debts secured by real property in excess of $25,000 shall be in the form of a loan. These loans shall be secured by a mortgage or other security instrument which shall immediately be recorded in the public records of Miami-Dade County and may be forgivable and/or defer interest and payments so long as the obligations of the recipient are fully performed. Additionally, in the event that Housing and Community Development Funds will be allocated to a person or agency leasing real property for the purpose of improving the property, the owner of the property shall be requested to secure the loan by a mortgage or other security instrument on the subject property and upon agreement such mortgage or security interest shall immediately be recorded in the public records of Miami-Dade County. If the property owner does not agree to the securing of the loan by a mortgage or other security instrument on the subject property, the Mayor or Mayor’s designee may secure the loan with a leasehold mortgage upon a determination that such a security is in the best interest of the County.
Section 2. Notwithstanding any provision of Section 1 above, in the event that a mortgage is deemed by the Mayor or Mayor’s designee not to be in the best interest of the County due to prior encumbrances on the real property or other factors, the Mayor or Mayor’s designee shall select an alternative form of security/collateral or restriction on the future use of the property in consultation with the County Attorney’s Office. If the Mayor or Mayor’s designee determines that it is not possible for the County to obtain a form of security/collateral or restriction on the future use of the property sufficient to protect the County’s interest in the Housing and Community Development Funds allocated toward a particular project, the Mayor or Mayor’s designee shall submit a recommendation to the Board to either proceed with the allocation, which shall require a two-thirds (2/3) vote of the Board members present, or to rescind or otherwise modify the allocation.
Section 3. The Board hereby establishes the policy that any allocations of Bond Program Funds to a non-governmental entity for the purpose of acquiring real property, improving real property owned by the recipient, or paying off debts secured by real property in excess of $25,000 shall be in the form of a grant, conditioned upon the execution and recordation of a restrictive convenant with a right of reverter or other restriction on the future use of the property in the public records of Miami-Dade County, and County approval of any further encumbrances of the real property.
Section 4. The Mayor or Mayor’s designee is directed to incorporate the policy set forth in Sections 1 and 2, above, into the County’s competitive and other processes for the selection of recipients of Housing and Community Development Funds and into contracts and agreements for Housing and Community Development Funds. The Mayor or Mayor’s designee is directed to incorporate the policy set forth in Section 3 above into the County’s competitive and other processes for the selection of recipients of Bond Program funds, if any, and into contracts and agreements for Bond Program funds.
Section 5. This resolution is intended to apply only to grant agreements for allocations of Bond Program Funds to a non-governmental entity for the purpose of acquiring real property, improving real property owned by the recipient, or paying off debts secured by real property in excess of $25,000 that are entered into by the County after the effective date of this resolution, and recommendations by the Mayor or Mayor’s designee for allocations of Housing and Community Development Funds for the purpose of acquiring or improving real property or for paying off debts secured by real property in excess of $25,000 which are submitted to the Board after the effective date of this resolution.



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