HomeMy WebLinkAbout09-26-88 Personnel & Finance and Residential Neighborhood commit#rt gronrt
JOINT MEETING OF THE PERSONNEL AND FINANCE
AND RESIDENTIAL NEIGHBORHOOD COMMITTEE
03o the Comm Council of tip Ong of*Mfg :
The September 26, 1988 meeting of the Personnel and Finance .
Committee and the Residential Neighborhood Committee was
called to order by Personnel and Finance Chairman, Council
Member Ann Puzzello at 4:10 p.m. in the Council informal
meeting room.
Persons in attendance included Councilmen Luecke,
Niezgodski, Soderberg, Puzzello, Slavinskas, Zakrzewski,
Coleman, Duda, and Voorde; John Leisenring, Carolyn
Pfotenhauer, Max Moore, Beth Leonard, Jon Hunt, Hedy
Robinson, Robert Watkins, Betsy Harriman, Jim Wensits,
members of the public, and Kathleen Cekanski-Farrand.
Council Member Puzzello noted that the purpose of the joint
committee meeting.was to discuss Bill No. 82-88. Councilman
Lee Slavinskascthen reviewed Bill No. 82-88. He noted that
the overall purpose of the Bill was to establish a non-
reverting maintenance fund which would receive monies from
the South Bend Housing Authority which they would pay to the
City in lieu of taxes. The fund would be used as a back-up
funding source for maintenance on the 50 homes which are
currently being purchased under the "acquisition of existing
housing program. " He noted that there are areas which are
to be developed namely to establish a maximum dollar limit,
to establish who should be responsible for usage of the
funds, and to define what the funds may be used for.
Council President John Voorde then handed out Substitute
Bill No. 82-88. He noted that everyone wants to assist in
making sure that the Scattered Site Housing Program works to
the best of its ability. He further noted that a fund
should be established in the event that all other support
systems break down. He noted that assurance should be given
to the residence which carry out the overall intent of Mayor
Kernan and the Council. He noted that his Bill basically is
different than Councilman Slavinskas' by the fact that it
would be a reverting fund, that all of the money would
revert the General Fund at the end of each calendar year,
and that it permits additional funding from other sources.
Councilman Luecke questioned the appropriation process. The
Council Attorney noted that the funds for 1989 were
appropriated during the budgetary process completed in
August. Councilman Luecke noted that he prefers a non-
reverting fund so that a "cushion" could be established. He
also noted that he would prefer that the funds be used only
for exterior improvements and that a cap of somewhere
between $100,000.00 to $200,000.00 be allowed. He also
suggested that a loan mechanism be considered when a
Human Resources and Economic Development Committee Cont'd page 2
f
particular home would be up for sale. He stated that in his
opinion the $40,000.00 each year which would be set aside
through a reverting fund did not provide enough assurance.
The Council Attorney noted that both the Legal Department
and herself agree that both mechanisms, that being the
establishment of either a non-reverting or reverting fund,
are legal. Therefore, it would become a policy decision of
the Common Council as to which is the better vehicle to
create.
Councilman Voorde noted that if a non-reverting fund would
be established, that in his opinion, a self fulfilling
prophesy would be set up. He noted that basically we would
be purchasing a $40, 000.00 insurance policy on a yearly
basis. He noted that he expects high standards which would
be carried out by Mr. Watson as well as the South Bend
Housing Authority.
Councilman Niezgodski stated that he was against the non-
reverting ordinance. He stated that the Mayor pledged that
he would do everything in his power to provide back-up
assurance to the South Bend Housing Authority. Councilman
Niezgodski believed that the Common Council was jumping
ahead of itself.
Councilman Coleman stated that he saw the City's involvement
as a "third line of defense. " He had concern that the
Housing Development Corporation may be a possible source of
additional monies and therefore was reluctant to support a
non-reverting fund. He further stated that the money should
not be tied up when there are critical needs of the City to
be addressed.
Councilman Slavinskas noted that the establishment of either
a non-reverting fund or reverting fund would in both cases
tie up the $40,000.00 allocation each year. He agreed with
Councilman Niezgodski that the Council may be jumping the
gun, however, the citizens feel uncomfortable with the
current program. He stated that he would agree to a cap of
$100,000.00 or $120, 000.00 and would further agree to allow
the interest earned on such funds to be diverted to the
General Fund. He believed that there were alternatives
which could be discussed.
Council person Puzzello stated that all future Council
Members would be as interested in the program as current
ones. She stated that she prefers the reverting fund and
suggested that pagagraph (d) in Section 2-169 be amended to
read as follows: "Monies will be appropriated for this fund
from other sources, if necessary." She asked to the Council
Attorney whether such an amendment would be legal and the
Council Attorney advised her that it would be. It was
Human Resources and Economic Development Committee Cont'd page 3
noted, however, a separate appropriation must be necessary
to carry out this process.
Council person Loretta Duda stated that she preferred the
non-reverting fund with a cap of approximately $100,000. 00.
She further suggested that the money be used only for
exterior maintenance needs and would agree with Councilman
Luecke with regard to a possible loan concept if a
particular house was to be sold. She further agreed that
interest could be diverted to the General Fund. She stated
that she believed in her opinion that the Council would be
acting in "bad faith" if such a fund would not be created.
Councilman William Soderberg stated that a new Council could
repeal either fund once it was established. He stated that
the emphasis should be on the establishment of a proper
vehicle for the monies to insure the pledges made to the
community. He stated that it would be similar to a "rainy
day fund" and further noted that each of the 50 homes are
supposedly "maintenance free homes". He preferred the non-
reverting fund with a reasonable dollar figure included.
Councilman Duda noted that in the television program
yesterday, Mr. Watson noted that his budget had been cut 80%
and that the Council must consider that 50 homes are being
purchased and to consider the costs of materials and
supplies with regard to maintenance.
Councilman Voorde stated that much of the concern results
from statements made by Mr. Watson where he noted that he
could not provide "absolute guarantees". He further stated
that in his opinion that the more money that would be set
aside the more likely that those same monies would be used
for maintenance.
Councilman Slavinskas stated that he believed the substitute
bill proposed by Councilman Voorde was ambiguous in its
implementation and that his bill of creating a non-reverting
fund was specific and more defined. He further stated that
comments made to the public has created certain expectations
with regard to a safety net and therefore would prefer that
no City funds be involved, however, such funds as a back-up
were necessary.
Jon Hunt noted that in a response to a question raised by
Councilman Puzzello that the homes purchased through his
department are deteriorating and costs between $20,000 to
$25,000.00 to bring up to code with the emergency repairs
limited to $2,500.00. He stated as a result, that comparing
the two programs would be like comparing apples to oranges.
He stated that perhaps under the Housing Authority Program
that between 4 to 5 units may need assistance yearly. He
further noted that the Housing Development Corporation has
little reserve for anyone.
Human Resources and Economic Development Committee Cont'd page 4
Mr. Robert Watkins noted that the South Bend Citizens United
agree with the concept of the non-reverting fund. He stated
that such areas as whether the funds should be spent on
interior or exterior maintenance needs and whether the funds
should be allowed to address those item which HUD may not
such as carpeting, fireplaces, decorative lighting, etc. are
questions which should be addressed.
Max Moore, a citizen member, stated that he was not happy
with any City funds being set aside and that it should be
solely the Housing Authority's responsibility.
Council Member Puzzello suggested that in light of the new
concepts and discussion that has been raised that she
thought a continuance of the bill would be appropriate.
Following further discussion Councilman Voorde made a motion
seconded by Councilman Zakrzewski that Bill No. 82-88 be
continued until the October 10th meeting of the Common
Council and that a continuance of the discussion be had at a
future joint meeting of the Personnel and Finance and
Residential Neighborhoods Committee. The motion passed.
There being no further business to come before the joint
committees, the meeting was adjourned at 5:05 p.m.
Respectfully submitted,
Council Member Ann Puzzello, Chairman
Personnel and Finance Committee
Council Member Loretta Duda,
Residential Neighborhoods Committee