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Consent-General Government # 10.
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| Board of Supervisors |
County Administrator |
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| Subject |
| Review and approve offering loans for Westucky Water & Sewer Project Homeowner Rehabilitation Loan Program. (General fund impact $56,710) (Nunes) |
| Recommended Action |
- Review and approve a total of $56,710 in loans for up to three Westucky Water & Sewer Project homeowners; and
- Authorize the Assistant County Administrator to execute and sign all loan documents as required and requested by up to three Westucky Water & Sewer Project Homeowners.
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| Strategic Plan Goal(s) |
| Thriving Residents |
| Reason for Recommended Action/Background |
In September, 2013, the County was awarded $851,900 from the State of California Department of Housing and Community Development Department (HCD) for Water/Sewer Improvements for the Westucky Water & Sewer Project.
The Water/Sewer Project and was approved by HCD to connect up to 15 properties to City of Woodland sewer and water and abandon/demolish the current privately-owned system. Health and safety issues, along with numerous citations, have been prevalent with the current system, making this a high priority project with County Environmental Services and the State of California’s Water Resources Control Board.
The original approved project was one component covering all aspects of the project. The State later required changes to the project, which resulted in 3 different projects. The three projects are:
1) The Public Facilities water/sewer project funded by the CDBG grant includes the main lines and infrastructure that goes into the street. This is the first component of the construction process.
2) The residential connections, under the CDBG residential rehabilitation program, requires individual households to submit an application and comply with an income verification process to qualify for financial assistance for the actual connections to the home. This is the second component of the construction process. For those who do not income qualify, the County is proposing a property bill financing option for those who are unable to obtain separate financing.
3) Commercial customers – those who have a commercial connection, must pay all costs or may ask for special economic development funding for the costs based on low to moderate income jobs that will be retained and not lost. This is the third component of the construction process.
All residents within the Westucky community are required to connect to the City Woodland water and sewer services and the existing well is being decommissioned. Construction work began in December, 2018 and despite rain delays, the project is approximately 95% complete.
Approximately four residences are not income eligible under the second component to qualify for grant funding to cover the cost of construction and City connection fees for connection to the City of Woodland sewer and water system. Without CDBG funding, the four residences are required to pay for the total costs. Costs range from bid estimates of $8,210 to $24,500. Three of the four residences have reported that they will not have available cash or qualify for personal loans to pay the Contractor and the City of Woodland by the end of construction, which is slated for May 6, 2019.
Residence owners were notified in February and March, 2019, that they must apply for funding from a traditional finance company or bank first, if they don’t have the current ability to pay the costs directly. They were also notified that if they were declined credit, or received only partial approval for the amount needed, the County could consider offering a loan for the full or partial amount needed upon proof of denial. The affected homeowners were asked to notify staff if they felt they would need this option. Three have notified the County of their interest.
Based on this, it is recommended that the County offer a rehabilitation loan program with repayment made through on-bill property tax payments. Loans would be offered at a three percent (3%) fixed rate amortized over a 5 year term. A proposed method of repayment would be through their property tax bill with no penalties for early or frequent payments. Payments would begin with the November 1, 2019 installment payment and continue with the February 1, 2020 installment payment for each year.
This County loan option is being recommended as a means of last resort, in order for the County to meet the HCD Grant project milestones, the deadline for completion of the project and grant close out requirements.
The County has experience and approved guidelines through the Yolo County Housing Rehabilitation Program through the HCD CDBG Program, managing loans and grants for repairs for low-income owner-occupied homes or for units occupied by low income tenants of owner-investors within the unincorporated area of Yolo County. The County Administrator’s Office (CAO) manages the awards and program income (received through paid loans) from the State and acts as a lender to qualified households. The County has HCD-approved templated loan documents such as a promissory note, and deed of trust that are available for use in this matter. |
| Collaborations (including Board advisory groups and external partner agencies) |
Yolo County Housing, Department of Financial Services.
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| Competitive Bid Process |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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Explanation (Expenditure and/or Revenue) |
| Further explanation as needed: |
| The $56,710 amount reflects the maximum potential loan amount. Exact amounts will not be known until each resident produces evidence of not being able to obtain other financing and the cost of the connection is determined. If approved, staff will return to the Board with a request for General Fund contingency to fund these loans once exact loan amounts are known. Initial expenditure will be recovered in five years through assessment on property owner tax bill. |
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