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Regular City Council Meeting Monday, September 10, 2012 Page 10 Roll Call Ayes: McGehee;Willmus; and Roe. Nays: None. In response to citizen comments previously directed to her suggesting that the "City Council give the budget back to staff to fix and adjust," Councilmember McGehee advised that those items included had already been discussed by the City Council and Council had directed staff to include them in the budget. Mayor Roe noted that, specific to the bond issue debt service for the $10 million in bonds issued in 2011, the City was obliged by law to pay that debt; and even if additional budget cuts are found, that obligation would remain. c. Adopt the 2013 Preliminary HRA Tax Levy Mayor Roe referenced an e-mail received by the City Council from HRA Exec- utive Director Patrick Trudgeon that included the HRA Budget and Strategic Plan as background documentation for their budget request. Mayor Roe sought clarification on the residential rehabilitation program of $200,000._ HRA Executive Director Trudgeon advised that this item had not been detailed during the HRA's joint meeting with the City Council and expanded on the pur- pose for this $200,000 Housing Replacement Program, identified in Goal 3 (Single-Family Housing) of the Strategic Plan's Implementation Program grid. Mr. Trudgeon noted that the City Council and HRA had identified this as an important need, and the intent of this trial program was to purchase homes de- termined dilapidated or beyond repair, demolish them, and put the lot back on the market for in-fill new homes. Mr. Trudgeon clarified that it was not the in- tent for the HRA to own those homes, and provided a recent home available on Rice Street, an older home in foreclosure, that the City could have purchased for $69,000 and demolished, but was unable to do so do to a lack of available re- sources and time to do so. Mr. Trudgeon advised that the rationale was that by new homes being constructed in neighborhoods, it would serve to raise the mar- ket values of adjacent homes within that neighborhood. Mr. Trudgeon noted that this was a new program, and the HRA had no past experience with such a program. In response to Mayor Roe's attempt to determine the net cost to the City, and not intending to make money, Mr. Trudgeon advised that the $200,000 was in- tended as seed money, and while the HRA hoped to recapture some costs, with demolition costs and original purchase price, it may not be self-supporting but could provide for a revolving loan fund, if 1-2 homes per year could be ad- dressed.