Citizens District Council Minutes 04-07-2008

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Citizen’s District Council Meeting
City of Muskegon CDBG
Muskegon, Michigan
Monday, April 7, 2008


The meeting was called to order by Patricia Montney at 5:37 p.m.


Roll call was taken by Liz Parker.

Present:             Patricia Montney, Marcia Hovey-Wright, James A. Dalum, G.
                     Ellouise Hieftje, Dan Rinsema-Sybenga, Addie Sanders-Randall,
                     Virgie Jackson, Michael J. Miller, Ryan McCabe

Excused:             Stephen Gawron

Staff Present:       Wilmern Griffin, Liz Parker


Dan made a motion to approve the minutes from the last meeting (February 4, 2008).
Ellouise seconded. Motion passed.


    • Commission Preliminary Response to Grant Reviews Discussion
Wil advised the group the City Commission preliminary took $10,000 each from NIC and
Habitat for Humanity and gave it to the HOME program and the final recommendation
should be done at the April 8 meeting. The group wanted to know why the Commission
would give the HOME program more than what was originally requested. Wil stated
both Commission Spataro and Carter said the HOME program got the most use for the
City out of the money. Virgie wanted to know about the homes currently for sale since
the economy is so bad. Wil said there is one person who is trying to get financing for
214 Myrtle. There have been a lot of inquiries on all the homes and 237 E. Walton has
been shown to people. Marcia said after the City Commission meeting, when the
preliminary response was done, she saw an article in the paper that an additional

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$900,000 in higher revenue than was projected was in the general fund that they didn’t
know what to do with. She wanted to know why it couldn’t be used for some of the
HOME programs or some of the City CDBG requests. Wil said the money can’t be used
for HOME programs and activities.


    • Review Action Plan
Wil stated the Action Plan is how funds this year are allocated and justified. Dan
wanted to know if the map was current. Wil said it was from the 2000 Census. He also
said any comments from the group tonight and at the public hearing (City Commission
Meeting) will also be added to the Action Plan. Marcia wanted to know what the 5%
was on the Public Facilities – Assessment. Wil said it was just a percentage of the
allocation. Pat wanted to know how many Rental Rehabs have been done this year.
Wil said they were currently working on one two-unit project. He said they did four to six
in 2006 – 2007. Addie wanted to know why landlords didn’t get involved in this
program. Wil said many are absentee landlords and others are afraid because of the
liability and money out of their pocket. The program is a 50/50 match. We will match
funds for repairs up to $14,999 per unit. Pat wanted to know how far away CNS is from
meeting the commitment of rehabbing 16 rental units by the year 2010. Wil said they
were only four to five units away from meeting the goal. Marcia wanted to know how
the goals are established. Wil said they were from the 2005 – 2010 Consolidated
Annual Performance and Evaluation Report (CAPER). They met with neighborhoods,
service providers, had surveys and a town hall meeting and looked at the overall
conditions in the community. Marcia also wanted to know who was on the HUD
Troubled List. Wil said it was Muskegon Heights and the Housing Commission.
Muskegon has been off the list for the last three to four years.

    • Lease with Option to Purchase Pilot Program
Wil wants to start the program with 435 Monroe and 867 Williams, two homes CNS
owns. The program is to get people who really want to buy, but can’t get a mortgage
from the bank, to rent these homes for three years. This gives the lessee three years to
get a mortgage and buy our home. If they get a mortgage in the first year, they get
approximately a 9% discount. If they get a mortgage in the second year, they get
approximately a 5% discount. There is no discount if you get a mortgage in the third
year. The benefit of the plan is to get the houses occupied, great advertising, this is a
tight market and a good way to get into a home. Wil is hoping the economy will
rebound. This program is on the agenda for the City Commission meeting tomorrow
(April 8). If this gets approved, Wil wants to start this program ASAP. The tenant will be
responsible for upkeep and all utilities, while the City will be responsible for insurance
on the structure only. The tenant is responsible for contents. The houses will be
inspected twice each year. If the tenant is not able to get a mortgage after three years,
they will be evicted. Wil wants the tenants to get together with a bank and get a plan
together so they can attain a mortgage within the three years. Wil is looking for people
who want to buy and not just rent out the house. Between the first month’s rent and

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deposit, the tenant must come up with $1,400 - $1,500 to move in. Dan wanted to know
the benefit of this program for the tenant. Wil said they will have the extra deduction on
their taxes if they own the home vs. just renting and they get the discount on the
purchase price if they get a mortgage within the first two years. Mike wanted to know
the barriers to getting a mortgage. Wil said it was financial issues and bills; credit score
bills. Wil wants to send these people to a Home Ownership program that is put on by
the bank since the bank will have an established program so issues can be resolved.
Marcia wanted to know what banks were involved. Wil stated LaSalle (now Bank of
America), Fifth Third and Huntington Bank. Virgie wanted to know if they needed a
decent work record and Addie stated it takes time to clean up a credit report. Wil said
he’s already met with the banks, had met with the CDC and will meeting with the City
Commission tomorrow. If the program is approved, Wil’s going to meet with the banks
again, set an income range and establish guidelines. He thought they were going to
use a credit score of 625 – 650. Dan, Marcia and Addie said this seems like a
reasonable plan. When asked why they just don’t do this with a regular landlord, Wil
said many times their house isn’t up to code, they can sign a land contract that has
many other hands in the pot and the CNS houses are new construction or rehabbed
and come with a stove and refrigerator. Wil also said there is an image problem in
Muskegon. Wil also said since 2000 the 30 homes sold by CNS that only one has gone
into foreclosure. People have to own these homes for five years before they can sell.
Dan wanted to know if the garage was done on Monroe. Wil said the garage is done
and is also landscaped. Ellouise wanted to know what will prevent these people from
buying these homes and then have additional family members move in. Wil said there
are City codes people need to abide buy, but at the same time there is nothing
preventing these people from having family members stay during these trying economic

   • Proposed Orchard Project
Wil said this project is possibly for the 2009 – 2010 fiscal year. CNS has already built
539 Orchard. Surrounding that house are seven houses of which three to four are
vacant. Wil wants to acquire those houses, tear them down and built three new homes.
The current houses there are small, blighted rentals or vacant. He wants to do this with
a bond of $40,000 a year from the HOME program for ten years. This is not yet in
stone, it is just a proposal. Wil will ask people if they want to sell. The SEV on some of
these houses is only $10,000 - $13,000. The houses can only be purchases for the
appraised value since Wil is using government money. Addie stated that if building up
downtown that more people would want to buy near that area. Dan said more people
are coming downtown everyday and close to the parks. Since the bond would be for 10
years, Pat wanted to know how this would affect the HOME program. Wil said part of
the HOME program is administration and Oneata Bailey’s salary would now be coming
out of the Lead Program. Also CNS wouldn’t be doing any new construction because of
the inventory currently on hand. Dan said a bond is cheaper but you’re still paying
something for money. Wil said bonds are about 3 – 4.5% or possibly they could get a
bond in house. Mike mentioned investors are now putting their money into municipal
bonds. Wil is hoping that with the new administration there will be improvement in the
economy. Wil said the properties in questions are at the following locations: From 539

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Orchard, go to the next corner going west; Orchard and Scott to Orchard and Williams.
He is also adding Walton to the project. There is only one house left on Walton. If they
do the same as they did for the rest of Walton then it would be a complete
neighborhood. Pat wanted to know if there is a lien on the properties would it be a wall
to the project. Wil said yes, any liens would be a problem as would a lot of owners
within each property. These problems would stop the project. He said currently four
properties are owned by the same two people: Jay Dee and Singleton.


Liz handed out the CDC By-laws to anyone who didn’t have a copy.


Patricia Montney adjourned the meeting at 6:36 p.m.

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