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U. City council votes down stop-gap funding of loan program
(by Jenny Fisher - January 20, 2010)
Homeowners who request a loan from University City’s home improvement loan program could wait up to 20 years at the rate money is currently being given out. And with less revenue coming into the program from homeowners repaying their loans, that trend could continue. The issue came to head at a recent city council meeting.
Torn between the demands of a tight budget and the desire to help citizens who have fallen on tough times, University City council members ultimately decided not to provide additional funding to the city’s home improvement loan program, which offers five- to 10-year loans and grants to needy citizens for home repairs that are necessary for a property to meet the city’s strict building and maintenance codes.
Council member Byron Price, supported by council member Arthur Sharpe Jr., advocated taking $20,000 out of the city’s reserves to fund the program.
“When I look at the levels that we are funding this, that means some of these people would never be able to receive this,” Price said. “Are we going to do this or not do this?”
According to long-range planning manager Andrea Riganti, who oversees the program, there are currently 40 people on the waiting list. While in the past the city has been able to assist four to six people a year with loans up to a maximum of $5,000, Riganti said the city has been able to make fewer loans in recent years — just three in 2008 and two in 2009. That’s because the program is supported entirely with repayments made by homeowners who have taken out loans in the past, and, Riganti said, less money has been coming in from loan repayments in the last few years.
Council members Robert Wagner and L. Michael Glickert spoke in opposition to Price’s proposal to take money from reserves, saying it was more important than ever in this economy to stick to the city’s budget.
Glickert suggested funding the program with $10,000 from money the city had budgeted for marketing but never used. The city’s reserves, he emphasized, should be left alone because he anticipated that revenues in the coming year would be down due to the economy. His proposal failed, as did Price’s.
University City’s home improvement loan program is unlike programs in St. Louis city and other county municipalities, which are supported by Community Development Block Grants, federal money given to cities for community improvement projects. University City’s program was initiated by Mayor Joe Adams several years ago as a revolving fund with the idea that it would support itself on the money coming in as citizens repaid their loans.
St. Louis County administers five-year forgivable loans funded by block grants for a little more than half the municipalities in the county, according to St. Louis County Home Improvement Loan Specialist Tim Putnam.
The county also administers a loan program for University City, structured identically to the city’s as a revolving fund, with additional yearly funding from University City’s Community Development Block Grants. University City homeowners who apply to the city’s program are always referred to the county, Riganti noted. Citizens may receive loans from both programs.
“For people who are struggling, and they’re making necessary payments for their monthly bills, like phone and electric and heat and all that, it’s an added burden,” Putnam said of University City’s system.
But, he added, because of the way University City’s program is set up, the county is able to help more people per year than they can for other municipalities, where the only money available comes from the block grants. For smaller cities like Rock Hill and Richmond Heights, that figure can be as low as $20,000, enough to loan the maximum amount to just four people.
According to Riganti, University City has its own program in addition to the one the county administers for the city because the need is so great.
“Are we duplicating each other? Yes, but I think it’s necessary,” Riganti said. “I believe it’s important because we have an older housing stock in University City, some low- to moderate-income individuals and a really great code enforcement program. So when you put those three things together, the need is there.”
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