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05-F thru H Homestead Program AGENDA INFORMATION SHEET SUBJECT: Approval of an Ordinance, Interlocal Agreement and draft resolutions implementing certain clean-up initiatives, including programs to provide lots foreclosed for tax delinquency for use in constructing new single family homes. BACKGROUND: The City of Paris has since its inception been an active participant and strong supporter of the Keep Paris Beautiful Program. Indeed, former Mayor Charles Neeley was one of the co-founders of this effort. Besides providing financial support, and active participation by City staff members, the City has adopted several ordinances as part of a comprehensive program of addressing various clutter, litter, and substandard structural problems throughout the City. By way of review, the City has progressively adopted the following ordinances: 1.Ordinance No. 2000-020, adopted April 10, 2000, which implemented a comprehensive new program to control weeds, junk and litter throughout the City; 2.Ordinance No. 2000-058, adopted November 13, 2000, which implemented new ordinance provisions regulating and controlling junk vehicles; 3.Ordinance No. 2000-067, adopted December 11, 2000, which established a new program for regulating commercial and industrial solid waste collection and collectors, including provisions to control waste on the streets of the City; 4.Ordinance No. 2002-027, adopted May 13, 2002, which implemented a new program authorizing issuance of administrative search warrants in support of the City's various litter control programs; 5.Ordinance No. 2002-032, adopted June 10, 2002, which adopted a new comprehensive program for regulation of substandard and dangerous buildings and structures; 6.Ordinance No. 2002-033, adopted June 17, 2002, which adopted a new program of historic preservation; and, 7.Ordinance No. 2003-019, adopted May 8, 2003, which amended the City's Zoning Ordinance to implement the requirements of the new Historic Preservation Ordinance. In addition, the City has adopted numerous amendments to these ordinances to clarify and improve their implementation. One of the problems identified through the process of considering ordinance initiatives was the fact the City under its prior programs was mowing and cleaning up numerous lots throughout the City, but was doing so at a cost which actually made the City competitively superior to property owners doing the mowing themselves. Because this kind of mowing and cleanup activity is really not a core City activity, the new weed, junk, and litter ordinance changed the situation by making the City, through the implementation of a $220 plus administrative fee in addition to the actual cost of the mowing and cleanup, and by requiring the filing of liens for collection of those amounts, a much less desirable option for property owners in terms of cost of cleaning up the property. However, even though the recidivism in the number of lots maintained by the City has diminished as a result of this program, there continue to be many lots throughout the City which are not only a strain on City resources because the property owners themselves are not maintaining them, but those very same lots are usually lots for which taxes are not paid. As a consequence, the next and most logical step in the progression of ordinances and programs adopted by the City in support of the cleanup effort is to identify a way to redirect ownership of these lots into programs where new homes could be built on those lots. With such a program, the taxing entities where the properties are located will see an increase in their tax base, qualified individuals who can participate in such programs have the opportunity to own their own home, and the lots on which their homes are built no longer become a long term maintenance problem for the City of Paris. The problem is identifying and creating a program which will accomplish this desired goal. Already, the City has been blessed with the successful efforts of Paris Living, a Community Development Corporation, and Paris Habitat for Humanity, building new homes for low and moderate income buyers. In addition, the City has for a number of years participated in various grant programs to assist potential low and moderate income home buyers with their down payments and other costs associated with building new homes. As part of this agenda, the City Council is being presented an ordinance and three resolutions associated with the effort to accomplish this potentially culminating stage in the implementation of the clean-up program. DESCRIPTION: Initiatives being presented to City Council for their consideration to culminate the various programs associated with the Keep Paris Beautiful effort consist of one new ordinance and three resolutions. The Ordinance is a logical extension of the City's current ongoing cleanup efforts. The ordinance change would require those parties who obtain demolition permits, either because they are compelled to do so under the City's substandard building ordinance, or because they do so on their own initiative, to provide evidence to City Code Enforcement Inspectors and the Community Development Department that the materials which have been generated through their demolition efforts have been properly disposed of, especially where those materials are required to be disposed in a state licensed landfill. The three resolutions contained in this package may be loosely referred to as implementation of the City's Homestead Program. The City Council has previously received briefings on the nature of this over-all program. The program may be broken down into the following components: 1.The first resolution would authorize an interlocal agreement by and among the City of Paris, the County of Lamar, Paris Independent School District, North Lamar Independent School District, and Paris Junior College. The purpose of the interlocal agreement would be to designate the City of Paris as sole trustee, empowered through a limited power of attorney, to act on behalf of the other taxing entities in utilizing lots foreclosed for delinquent tax purposes in two new programs intended to create opportunities for low and moderate income individuals to build houses on those lots. The lots are identified generally as those lots zoned for single family purposes which have been foreclosed and passed through a sheriff's sale for delinquent ad valorem taxes, and have not been redeemed by any property owner or the delinquent tax payer. The interlocal agreement obligates the City of Paris, as sole trustee, through the limited power of attorney, to restrict its trsuteeship of those lots to use in two designated programs intended to make those lots available for single family home construction. 2.The second resolution would authorize the implementation of one of the new programs intended to funnel the identified lots to qualified home buyers. This resolution, identified as the non-profit home building resolution, would authorize the City, as sole trustee, to make the identified lots available to Paris Living, the Community Development Corporation, and Paris Habitat for Humanity, at their discretion and selection, in their ongoing programs of home building. Obviously not all the lots will fit the profiles these two organizations are using in their programs, and there will be a number of lots still remaining. 3.The third and final resolution will adopt another program, identified as the homestead program, currently to be run by the City of Paris through its Community Development Department, which will take applications for identified low and moderate income home buyers to select lots located throughout the City, enter into an earnest money contract with the City for that lot, and approach lenders and title underwriters with an earnest money contract granting them a lot by special warranty deed as part of the collateral for them to obtain a loan to build a house. In addition, these individuals may qualify for other home building incentives, such as the City's current down payment assistant grant program. Ultimate adoption of the three resolutions associated with the Homestead Program will not by any means put the program into immediate action. First, all the other affected taxing entities will have to approve the interlocal agreement before the program can be effective. It would be the City staff's intention to approach the governing bodies of each of the taxing entities during the next month seeking their approval of the interlocal agreement to begin the program. In addition, separate agreements between the City and Paris Living and between the City and Paris Habitat for Humanity will be a necessary component of finally implementing the program. There will be many other actions necessary to fully implement the program. the City will need to train its staff with regard to the application process for the Homestead Program and generate the necessary forms associated with that program. The City's tax attorneys will have to assist in identifying the current inventory of lots which meet the profile for such lots as defined in the interlocal agreement and the two program resolutions. These proposed documents have been reviewed not only by the City staff, but by the City's tax attorneys, representatives of local title companies, and various local attorneys who specialize in real estate transactions. If all the taxing entities approve the proposed interlocal agreement, there will still be a great deal to do to refine the program, to publicize the program, and to educate other entities, such as banks, real estate agents, home builders, etc. as to the nature of the program. Finally, if the program is approved by the other taxing entities, the City Council may want to consider additional inducements to the programs, such as waiver or reduction of building permit fees and/or sewer and water tap fees. RECOMMENDED ACTION: Consideration of the proposed ordinance requiring proof of proper disposal of demolition materials, and the agreement and resolutions required to implement the home building programs. STAFF CONTACT: City Attorney Larry W. Schenk, Assistant City Attorney John Lestock, and Community Development Director Lisa Wright. SCHEDULE: Consideration for endorsement and possible approval at City Council's April 12, 2004, regular Council Meeting, and if not fully approved, then final approval at City Council's May 2004 regular Council Meeting. COST: The costs associated with implementation of this program primarily will be the internal costs of staff time in implementing the various initiatives. LOCATION: The lots which would ultimately be utilized in this program are located throughout the City. SUPPLEMENTARY MATERIALS: See proposed ordinance, interlocal agreement, and implementing resolutions included in the agenda packet. COUNCIL DATE: First consideration of the package at City Council's April 12, 2004, Council Meeting.