00-0227R

RESOLUTION AUTHORIZING AN AMENDMENT TO THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) REVOLVING LOAN FUND AGREEMENT AND A CDBG ADMINISTRATIVE AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF DULUTH, INC.

BY PRESIDENT GILBERT:

RESOLVED, that the proper city officials are hereby authorized to enter into an amendment to City Contract No. 18400 with Neighborhood Housing Services of Duluth, Inc. (NHS), substantially in the form of that on file in the office of the city clerk as Public Document No. _______________, reducing the amount of the agreement by $81,871 and extending the term of the agreement.

FURTHER RESOLVED, that the proper city officials are hereby authorized to enter into an agreement, substantially in the form of that on file in the office of the city clerk as Public Document No. with NHS in an amount not to exceed $81,871, payable from 1997 Program Fund, Agency 620.



STATEMENT OF PURPOSE: The purpose of this resolution is to authorize an amendment to the CDBG revolving loan fund agreement with NHS reducing the amount of the agreement by $81,871 from $132,000 to $50,129) and extending the agreement from June 30, 2000, to June 30, 2001. This resolution also authorizes an agreement for project administration in the amount of $81,871. The amendment and agreement will fill an administration funding shortfall recently identified. NHS overestimated the amount of administrative funds available for Year 2000 and Year 2001. This error will leave NHS 1½ months short in administrative funding for Year 2000 and four months short in Year 2001. Also, due to loan sales, other recapitalization opportunities, and accounting procedures, NHS has seen insufficient use of the revolving loan funds in the current contract. The original revolving loan fund agreement has $81,871 uncommitted, and it is unlikely that the funds will be used by the end of the contract term (6/30/00).