Department
Community Development
Requested Action (Identify appropriate Action or Motion, purpose, cost, timeframe, etc.)
title
Request approval by the Board of Commissioners authorizing the Chairman or the County Manager to execute a cancellation and release of a Deed to Secure Debt and any other security documents given to the County by The Christian City, Inc., to secure a loan that matured in January 2021; after preparation, review and approval as to form by the County Attorney. (APPROVED UPON ADOPTION OF THE CONSENT AGENDA)
body
Requirement for Board Action (Cite specific Board policy, statute or code requirement)
Pursuant to O.C.G.A. § 36-5.22.1(a)(1), the Board of Commissioners has original and exclusive jurisdiction over the directing and controlling of all property of the County. See O.C.G.A. § 44-14-3, which requires a lender to deliver a cancellation of security instruments within 60 days of a loan’s maturity.
Strategic Priority Area related to this item (If yes, note strategic priority area below)
Health and Human Services
Commission Districts Affected
All Districts ☒
District 1 ☐
District 2 ☐
District 3 ☐
District 4 ☐
District 5 ☐
District 6 ☐
Is this a purchasing item?
No
Summary & Background (First sentence includes Agency recommendation. Provide an executive summary of the action that gives an overview of the relevant details for the item.)
In 2005, Fulton County (the “County”), as lender, on behalf of its Department of Community Development, entered into a forgivable loan agreement with The Christian City, Inc. (“CCI”), as borrower, under which according to the loan agreement the County loaned CCI $1,000,000 towards the construction of two residential group homes for children, an administrative building, and parking and recreational facilities. The loan was made as part of the US Department of Housing and Urban Development’s (“HUD”) HOME program. Under the program, principal and interest was deferred for 15 years, until loan maturity, and if CCI performed all of its obligations under the loan documents, the loan would be forgiven.
Shortly after the loan was made, HUD informed the County that CCI’s project was not an eligible project under the program and the County would need to repay the loan funds advanced back to its HOME trust fund. After being informed of this, the County worked with HUD and CCI in an attempt to make the project work within the HOME program parameters.
Based on the limited records available regarding this loan, bringing the project and CCI into compliance does not appear to have been possible. Nonetheless, the records indicate that the County and HUD continued to try to work with CCI, and CCI being told that it would not have to pay the County back the HUD funds which CCI could use to fulfil the goals intended. The County ended up repaying the funds from this loan to HUD, and several other failed HOME program loans, around this time (2007-2008). As such, HUD is not involved in this transaction, as no HUD funds are at stake.
CCI did use the loan proceeds to build several group homes for children, an administrative building, and parking and recreational facilities. County staff recently visited the location confirmed the structures are still in existence. At the location, there are 7 Children’s Village Cottages (along with the Administration Building, Training Building, Food Storage Building, and the Recreational Pavilion. The “cottages” are actually 5000+ square foot homes with a married couple in each as full-time House Parents. CCI is licensed to house up to 32 children at a time between the ages of 5 and 18. CCI also have a “Safe Place” cottage for homeless or runaway children in the complex and have a Foster Care program there as well.
As such, it appears that the money loaned to CCI was put to its intended purpose with the knowledge of the County working with CCI to be compliant with HUD’s HOME program. The Department of Community Development is also aware that CCI is also seeking additional funding through HUD sponsored grants to renovate the structures that were built as part of this project back in 2006-2007 and funded by the HUD funds, as being consistent with the County Consolidated Plan
Scope of Work:
Community Impact: The Department is not aware of any community impact.
Department Recommendation: Community Development recommends that the County cancel and release all security instruments given to the County by The Christian City, Inc. as part of this loan so as to not run afoul of O.C.G.A. § 44-14-3, which requires a lender to deliver a cancellation of security instruments within 60 days of a loan’s maturity.
Project Implications: None of which the Department is aware.
Community Issues/Concerns: None of which the Department is aware.
Department Issues/Concerns: None of which the Department is aware.