08-11-75 Council Meeting Minutes

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REGULAR MEETING AUGUST 11, 1975 COMMITTEE OF THE WHOLE MEETING (CONTINUED) responsibility lies with the city on determining where the programs should be utilized. He did n like to see people in the community with a negative attitude of denying other people within an ar the right to improve their homes with financial assistance. He felt the persons who could not afford to improve their homes should be given this assistance. He felt the area chosen was the most effective area with the amount of money available. Mr. Hojnacki indicated that surveys had been conducted in order to arrive at the designated areas for the projects, and these determinati were based upon the most deterioration and lowest income level. He knew the program was not per- fect and some people would be treated differently; however.,.he did not feel this could be considered discrimination. He indicated that, in six months, a new application would have to be submitted and the priorities would be re- written and the money would be re- distributed in other areas. Councilman Horvath wondered how much of the $9 million would be going into housing within the next three years. Mr. Hojnacki indicated that he would put all the money into housing if he could; however, he guessed about $1 million would go toward housing improvements over the next three years. Councilman Horvath felt the program should be utilized in a wider area but he could understand why the money was being concentrated in certain areas. He hoped the money next time could be utilized in another area. Councilman Taylor requested a roll call vote on the motion to delay the matter. The motion was defeated by a roll call vote of six nays (Councilmen Serge, Miller, Taylor, Horvath, Nemeth and Newburn) and two ayes (Councilmen Szymkowiak and Kopczynski). Councilman Miller then made a motion that the ordinance be recommended favorably to the Common Council, seconded by Councilman Taylor. The motion carried, with Councilmen Szymkowiak and Kopczynski opposing. Councilman Taylor made a motion to recess, seconded by Councilman Horvath. The motion carried, a the Committee of the Whole recessed at 10:22 p.m. Reconvened at 10:40 p.m. ORDINANCE AN ORDINANCE APPROVING THE ALLOCATION OF FUNDS FROM THE COMMUNITY DEVELOPMENT BLOCK GRANT FOR THE ESTABLISHMENT OF AN HISTORIC PRESERVATION REVOLVING FUND TO BE ADMINISTERED BY THE SOUTHOLD HERITAGE FOUNDATION, INC. This being the time heretofore set for public hearing on the above ordinance, proponents and opponents were given an opportunity to be heard. Mr. William Hojnacki, Director of the Department of Human Resources and Economic Development, made the presentation of the ordinance. He indicated that the ordinance was part of a package for residential housing units for which Community Development funds would be used. He introduced Mr. William Welsheimer, 1825 Wilbur Street, President of the Southold Heritage Foundation. Mr. Welsheimer indicated that Southold Heritage Foundation had been incorporated under the laws of the State of Indiana a little over one year ago. He indicated that the proposed ordinance would establish a revolving fund for housing preservation in the West Washington Historic Preservation District. He stated that, with the grant received, help would be given to people to improve and restore buildings within that area. Councilman Serge wondered if this involved a commission, and Mr. Welsheimer indicated that there would be a board to consist of two committees: a real estate committee and a loan committee. Councilman Serge wondered who would determine what improvements would be made. Mr. Welsheimer indicated that the individual would have to restore or preserve his home in the style in which it was built. He indicated that guidelines would be established. Councilman Kopczynski wondered if the banks were willing to loan money to the residents in that area. Mr. Welsheimer felt the banks would be willing once the homes were brought up to standard. Councilman Kopczynski indicated that not over 10% of the $75,000 would be used for administrative costs. Mr. Welsheimer indicated that Councilman Kopczynski was correct. 'He indicated that there would be no paid employees; however, some funds would have to be used for architects and engineers. Councilman Kopczynski wondered about the rate of interest charged to the borrower, and Mr. Welsheimer indicated that the rate would be below the prime rate. Councilman Kopczynski wondered if the Southold Heritage Foundation would be willing to submit its records to the Council periodically, and Mr. Welsheimer indicated that the foundation would be willing to do that. He indicated that an audit would also be con- ducted. Councilman Nemeth wondered about the terms as far as time periods were concerned. Mr. Welsheimer indicated that there would be six months to a year on a re- payment. Councilman Nemeth wondered if a limit would be imposed, and Mr. Welsheimer indicated that that had not been decided yet. Councilman Horvath wondered if the foundation would be coming back to the Council for addi- tional funding, and Mr. Welsheimer indicated that it would not be; $20,000 would be` received from the National Trust and the foundation would be going to the Lily Foundation for some funds for historic preservation. Councilman Serge wondered if the city would receive the funds back, and Mr. Welsheimer indicated that the fund would receive the money back. He stated that the money would be kept moving. Councilman.Szymkowiak made a motion that the ordinance be recommended favorably to the Common Council, seconded by Councilman Taylor. The motion carried. ORDINANCE AN ORDINANCE APPROVING THE EXPENDITURE OF COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS TO ESTABLISH A GUARANTEED LOAN PROGRAM. This being the time heretofore set for public hearing on the above ordinance, proponents and opponents were given an opportunity to be heard. Mr. William Hojnacki, Director of the Department of Human Resources and Economic Development, made the presentation of the ordinance. He explained that the amount of $1001000 would be set aside as a loan insurance fund to be put on deposit in the five major banks in South Bend, as a guarantee for high risk loans to be made by the banks. He stated that program guidelines had been established. Councilman Nemeth wondered about the advantages of the program. Mr. Hojnacki indicated that the program would make $200,000 in loans available to persons who could not receive a loan for rehabil tation. He indicated that it was expected there would be some shrinkage in the fund. Councilman Nemeth wondered who would be responsible for making decisions concerning the loans. Mr. Hojnacki indicated that a committee would be established consisting of one person from each of the five major banks, and three staff persons would also serve on that committee. Councilman Nemeth wondered if anyone representing the city on that committee had any financial background, and Mr. Hojnacki indicated that Mr. Crighton had financial background. He stated that the five people fro the banks would bring that expertise to the committee. Councilman Nemeth wondered about the