08-27-01 Council Meeting Minutes

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REGULAR MEETING AUGUST 27, 2001 Councilmember Coleman made a motion that this bill go to full Council with a favorable recommendation. Councilmember Kelly seconded the motion which carried by a voice vote of nine (9) ayes. BILL NO 72 -01 PUBLIC HEARING ON A BILL APPROPRIATING $10,000 WITHIN FUND 212 FOR THE PURPOSE OF PAYING FOR COSTS OF COLLECTION Councilmember Aranowski reported that the Personnel & Finance Committee met on this bill and sends it to the Council with a favorable recommendation. Ms. Beth Leonard, Director, Financial and Program Management, Community & Economic Development, 1200 County -City Building, South Bend, Indiana, made the presentation for this bill. Ms. Leonard advised that this bill will allow the City to use ten thousand dollars ($10,000.00) to help protect its assets. She noted that the City has loans out on properties where unfortunately those properties are coming up for tax sale. This money is needed to protect those assets and to pay commission for rental property. There was no one present wishing to speak in favor of this bill. The following individuals spoke in opposition to this bill: Mr. Derek Dieter, 1145 Portage Avenue, South Bend, Indiana, asked how much money was out in loans that needed to be collected and what is Fund #212. Mr. Michael James Clark, 1121 North Olive Street, South Bend, Indiana, asked what loans, to who, how long, and why haven't they been collected. Also, if these properties are up for tax sale he asked where they are and who has been maintaining them. Mr. Tom Dixon, no address given, stated that this bill appropriates ten thousand dollars ($10,000.00) for the purpose of collections. As an attorney, he stated that the standard procedures for a collection attorney is to take a percentage of the money collected without any up -front fees. He also stated that he would be happy to supply the names of a number of different attorneys and law firms in the community that do collection work on a contingency basis. In rebuttal Ms. Leonard advised that the loans that are being discussed are through the City's Affordable Loan Program that has been running for ten (10) years. She noted that the City is not going out and asking for someone else to do any collections. These funds will be used to protect the City's assets because some of these properties are going out for tax sale and the Council's approval is needed in order to spend any of the money. Ms. Leonard noted that the Affordable Loan Program is a program funded by the federal government in the form of Community Development Block Grant dollars. These dollars must be used for CDBG eligible purposes. The City is not paying taxes for these people, the City is taking the house by way of the tax sale. She noted that they are protecting the assets. The City will have the mortgage and will take whatever steps needed to collect the City's money. She noted that Fund #212 is primarily the Community Development Block Grant Fund. Councilmember Varner noted that this bill was probably not titled as well as it could have been. Ms. Leonard noted that the term was used because that is the term HUD requires to allow this type of expense to be paid. There was no one else present wishing to address the Council regarding this bill. Therefore, Councilmember Coleman made a motion for favorable recommendation to full Council concerning this bill. Councilmember Kelly seconded the motion which carried by a voice vote of nine (9) ayes.