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CITY OF CONCORD COMMUNITY DEVELOPMENT ADVISORY COMMITTEE MINUTES March 25, 2009 The meeting was convened at 12:10 P.M. in the Second Floor Conference Room, City Hall, 41 Green Street, Concord, NH 03301. Present: Absent: Staff: 1. Jeff Bart, Allen Bennett, Elizabeth Blanchard, Mark Coen, Michael Gfroerer, Dan St. Hilaire, Nadine Salley, and Janet Sprague Todd Haywood Matt Walsh, Assistant for Special Projects Bev Rafferty, Administrative Assistant Minutes of February 25, 2009 meeting Nadine Salley noted two edits: page 4, third paragraph, change “1970” to “1976” and in the fifth paragraph, second sentence, change “Sally” to “Salley”. Ms. Salley made a motion to accept the minutes with these amendments; seconded by Elizabeth Blanchard; motion passed unanimously.
190 Manchester Street resident Matt Walsh informed CDAC that Dzioba Construction had been hired to do the work. A purchase order for the work will be issued once an insurance certificate is provided by the contractor. The work should be done within the next couple of weeks. Mr. Walsh thanked CDAC members for their prompt responses to his e-mail requesting the use of additional monies for this project. The resident is extremely happy.
Program Income Reuse Plan (PIRP) Amendments Mr. Walsh explained that the CDAC had started a review of the PIRP with respect to late payment penalties last Fall, but had been unable to focus much effort on this initiative due to other pressing matters. He reported to CDAC that with respect to late payment penalties, the proposed amended language was basically the same through all applicable sections of the PIRP. In addition to new language regarding late payments, he also reported that language concerning the application process for emergency grants had been inserted on page 5 of the draft PIRP.
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Mr. Walsh then reviewed the proposed late payment penalty clause with CDAC. Members of CDAC observed that a similar clause was not included within the Economic Development Section of the PIRP. Bev Rafferty noted she recalled a brief discussion about the Economic Development section when the PIRP amendment was first brought to CDAC’s attention months ago. She will do some research and report to Matt Walsh her findings. Review of the late payment penalty language continued. Dan St. Hilaire suggested that the language be modified from “shall be subject to a penalty...” to “may be subject to a penalty” in order to give CDAC more flexibility on a case by case basis. It was the consensus of CDAC to make this change. Another item that was brought to CDAC’s attention was staff had met with the City Controller Diane Savoie. Ms. Savoie had advised that since the penalty language being inserted notes CDAC has the right to assess or waive the penalties on past due loan payments, there should a waiver clause inserted that provides CDAC the opportunity to assess or not assess the penalty. Ms. Savoie noted that the PIRP and respective CDAC minutes will be the authoritative documents for Finance to assess or waive a current penalty. The main objective is to have language in the PIRP so there are no questions later on about CDAC’s authority to assess or waive late payment penalties. Mark Coen inquired as to the purpose and intent of the late payment penalty and expressed concern that it might be overly regressive when dealing with the majority of CDAC’s clientele. Chairperson Bart noted that most of CDAC’s residential clients are very punctual with their payments and that he anticipated the penalty would more typically be applied for loans made to commercial or not-for-profit entities. Staff reiterated this prediction and recalled several instances with late payments from certain for profit businesses and not-for-profit agencies which had received loans through the program, namely the Racquet Club of Concord, YMCA, as well as the 2 Pillsbury Street development. Matt Walsh predicted that this tool would be used sparingly, and would likely only be applied by CDAC in rare instances when chronic lateness is encountered with a particular loan recipient without reasonable cause. Mr. Coen inquired about the process to assess a penalty. Staff responded that they anticipate the penalty would be applied by CDAC each month when CDAC reviews the outstanding loans report provided them by staff. At such time, CDAC will then decide if a penalty needs to be assessed to any customer. Bev Rafferty reported that the current loan report only showed one customer slightly behind in payments but staff had contacted that client and provided an explanation of his tardiness to CDAC. CDAC members noted this was a good report given the current economic times. Nadine Salley inquired if CDAC wanted to give staff the authority to assess penalties if CDAC provided parameters for staff to follow. However, it was ultimately determined that such decisions should be left to the CDAC, not staff.
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Members asked if the fee could be assessed retroactively or whether CDAC could waive some of the months’ payments and assess only the current amount due. Mr. Walsh stated that such questions should be addressed within the PIRP and thus the proposed language would require additional revision. Matt Walsh noted he needs to work on the additional penalty language and note the assessment or waiver is at the sole discretion of CDAC, etc. Staff will make the necessary revisions and provide a fresh version for CDAC to review at next month’s meeting. 4. FY 2010 Budget Matt Walsh informed CDAC of the proposed CDBG division FY 2010 budget. The proposed amount is $42,663 which is arrived at by $24,333 from the anticipated Second Start administration budget, $11,000 from the Revolving Loan Fund (RLF), and approximately $7,330 from the General Fund. This is a huge decrease from the FY 2008 budget which was over $82,250. Mr. Walsh explained that the reduction of the Grants and Projects Specialist’s position from full time (40 hours per week) to part-time (up to 8 hours per week in FY 2010) is the main reason for this decrease. Mr. Walsh continued that the City Manager and Deputy City Manager-Finance plan to allocate $11,000 from the Revolving Loan Fund to support the Grants and Projects Specialist’s position. He further explained that the interest earnings on the Revolving Loan Fund from July 1, 2008 to March 25, 2009 was $6,736 and he did not expect the interest earnings to come to $11,000 by fiscal year end. If the $11,000 is allocated, city administration would have to use some of the loan fund’s principal in order to staff the position at 8 hours per week. There was lengthy discussion about using loan fund monies to cover staff expenses. Mr. Walsh reported that the City has periodically used monies from the RLF to cover the cost of administering the RLF program and a brief historical accounting was provided. He further noted that due to the poor condition of the City’s General Fund, it is very likely that contributions from the RLF will be required in order to cover the costs of operating the program. Members of CDAC asked if the contribution of the Revolving Loan Fund could be “up to” the $11,000 being requested, as well as further stipulated that the monies only be used to support the Grants and Project Specialist position (currently staffed by Joia Hughes). Others inquired as to whether the City would need the $11,000 in the event administration funds associated with the pending Second Start Community Development Block Grant did not materialize. Mr. Walsh explained that the RLF program and CDBG administration must be viewed separately as CDBG administration funds cannot be used to underwrite administration of the RLF program. Thus, to operate the RLF program as proposed, the $11,000 from the RLF would be required regardless of whether administration fees from the Second Start CDBG accrue or not.
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Chairperson Bart noted he does not feel comfortable contributing more than the interest revenues which the fund has earned, as contributing principal would slowly cripple CDAC’s ability to make loans and grants. Discussion ensued. Michael Gfroerer noted it is appropriate that CDAC recommend to the City Council what an appropriate amount of funding from the RLF would be to support the Grants and Projects Division. Additional discussion ensued about the specifics of exactly what the $11,000 contribution from the Revolving Loan Program supports within the Grants and Projects Division budget. Matt Walsh reiterated that the $11,000 would be used to fund Joia Hughes’ position, as well as other overhead expenses such as telephone, printing, public notice advertising, etc. He further explained that while Bev Rafferty and he both work on other aspects of administering the Revolving Loan and Emergency Grant program, the fund does not support these costs. Rather, these expenses are supported by the General Fund through the City Administration and Community Development Department operating budgets. Thus, the $11,000 used to support operating costs for the RLF program are far below the true cost of operating the program. After additional discussion, Michael Gfroerer moved that CDAC recommend to the City Council and City Administration that not more than the estimated amount of interest generated during FY 2009 on the Revolving Loan Fund be dedicated to support the Grants and Projects Division’s FY 2010 operating budget. Further, this amount is a “not to exceed” figure and shall only be used if needed. He continued that it is not good practice to use up the principal and all the interest in the fund as it will never get built up. Allen Bennett seconded the motion and it passed unanimously. 5. Revolving Loan Fund Bev Rafferty gave a brief update on the outstanding loans report. There were no questions from CDAC. 6. Adjournment There being no other business brought before CDAC, and upon a motion duly made and seconded, with unanimous approval, the meeting adjourned at 12:55 P.M. Respectfully Submitted,
Beverly A. Rafferty Administrative Assistant