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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 04/03/2002CITY OF FORT COLLINS COMMUNITY DEVELOPMENT BLOCK GRANT Meeting Minutes Question and Answer Session April 3, 2002 Phil M errVic;ir Terri yaChair Bill Be scCouncil Liaison Themeeting of the Community Development Block Grant Commission was called to order by Chairman Phil Majerus, beginning at 6:05 p.m., at 281 North College Avenue, Fort Collins, Colorado. Board members present included: Chairman Phil Majerus, Terri Bryant, Robert Browning, Linda Coxen (late), Vi Guthrie, Brett Hill (late), Jennifer Molock (late), Billie Rosen, Dennis Vanderheiden, and Cheryl Zimlich. Not present: Tia Molander. Staff present: Ken, o, Julie Smith, Heidi Phelps, Maurice Head, and Stacy Kelley. G ests present: Isabel Garity and Dave McKelfresh, from the Affordable Housing Board. Affordable Housing Board Isabel Garity presentation. Kay Rios sends her regrets for her inability to attend. Ms. Garity gave an overview of the criteria used in reviewing the applications and referred to a letter sent regarding concerns and recommendations. Ms. Garity outlined the Board's priorities: Increase stock of affordable housing through incentives. Preserve existing stock. Provide rental and home -buying assistance. Mix of housing distributed through city. Funding levels were not reviewed. The priorities were allocated according to the goals as defined. Every member of the Board individually reviewed every application. A global discussion was held and priorities decided. Ms. Garity looked for guidance concerning the best manner in addressing the concerns of the Commission. Commission members stated that they had reviewed the written material. Ms. Garity noted that CARE Housing has a fantastic record and is supported; the concern is the lack of a site. Crossroads and Beaucaire are not within the domain of the Board and as such do not appear on the list of priorities. The list by the Board addresses all housing applicants with the exceptions of these two entities. Community Development Block Grant Commission Meeting of April 3, 2002 Page 2 The following dialogue was held between Commission and Board members. The Board takes a general look at the priorities of the Commission, but as long as an applicant demonstrates financial competence, funding levels were not critiqued by those critera. The adherence to the Commission's criteria is an area for the Commission and not the Board. Mr. Majerus noted the difficulty of finding property on the part of applicants. Ms. Garity agreed that there were several applicants that fell into this category. Ms. Phelps stated that Staff appreciated the concise, comprehensive reports. This is an outstanding presentation by the Board. Mr. Waido noted a distinction between HOME and CDBG funding for sites. HOME requires a site. CDBG does not; applications can be speculative to that extent. Staff has explained to applicants without an identified site that this is a competitive process, and applicants with an identified site may have an advantage in terms of funding priorities. CARE Housing Following presentation by Chadrick Martinez, the following questions were asked and areas addressed by the Commission: How are precautions taken not to overspend? Mr. Waido noted that overpricing is not allowed. Mr. Martinez stated that cost centers can only be so high to sustain the development. Extensive due diligence is done, including competitive bids. CARE has a very dynamic system to ensure that. The land search committee evaluates all proposed land across all aspects. Are subsidies used for infrastructure costs? Staff stated that HOME funds can be used for infrastructure, and CDBG funds can be used for some areas within that category: Mr. Martinez stated that there are different groups of sources, and when one source cannot supply, other sources are looked to. These are common barriers that have to be overcome with each project. Land is a big cost center initially, with bricks and mortar at the far end. The program is very confident in its ability to make things work to defer and adjust when needed. Development fees, for instance, are pushed off for years as necessary. What is the total amount requested in this application? $300,000. The targeted development would require three to six acres to develop the targeted number of units. Community Development Block Grant Commission Meeting of April 3, 2002 Page 3 Must funds be expended in two years? Mr. Waido stated that an applicant has two years to either spend the funding or show significant progress. Staff will not close on property until there is land development approval from the City. Will funds be returned if the development fails to proceed? Mr. Martinez affirmed this. The targeted piece of land should be found and site plan developed by the next round in October. It takes two to three years for full development. Is it feasible to find an appropriate site in two years? Mr. Martinez stated that this is difficult. CARE is looking at partnerships with other developers. No deadlines have been missed yet. Has the project teamed with private development in the past? Yes, on Eagle Tree. Do funds exist in-house to go to contract if a piece of land is found, with the option to apply in October without losing the site? The applicant stated that CARE could put down money on an option but doesn't know if the owner would be willing to hold it until October. A significant portion of money in 2001 received in 2002 goes to Windtrail permanent financing. The program has put down $20,000 in the past. Are discussions presently taking place for partnership possibilities? Discussions are in the preliminary stage. Opportunities need to be pursued. Have Eagle Tree neighbors returned comments? Because affordable units are mixed in with market units, the neighbors don't know who is in affordable stock and who is not. This has presented a bit of a puzzle for tax credits, but the results have been fabulous. Is rehab being pursued as opposed to completely new develoments? That possibility is being looked at now, particularly as land becomes very tough to find. The program is looking at Section 8's and using tax credits to follow that money. What are the approaches for maintenance and replacement reserves? The results are good so far. These are built into the front end of development. CARE has never tapped into it, even with the oldest development. The reserves are restricted. Mr. Martinez concluded with kudos to Ms. Phelps for her excellent and diligent work on Fairbrooke. Community Development Block Grant Commission Meeting of April 3, 2002 Page 4 Habitat for Humanity Following presentation by Candace Mayo, the following questions were asked and areas addressed by the Commission: The three existing lots yet undetermined; when will they start? One will be by the end of summer; the family selection process is in effect for the others. Optimally, there will be three months from groundbreaking to finish. Habitat works on weekdays and weekends. The construction schedule is dependent on volunteers and weather. Who picks up the homeowners association fees in Waterglen? The homeowner, at about $80 per month. The association pays for such things as snow removal, garbage, and cable. Therefore, the fees are high but provide more than the normal homeowners association. The fee is taken into consideration in determining affordability. The house payment is never more than 30% of gross salary. What safeguards are taken to prevent a homeowner from transferring title to cash out the house? Habitat takes a second deed of trust. It computes the family's payment based on 30% of income. The second deed of trust is for the difference between the first deed of trust and the appraised value of the house. The family cannot rent the house. The family can build equity in the house. Habitat has a first right of refusal but from a practical standpoint cannot really afford to buy the house back and, in fact, has never done so. One homeowner has sold a house; no defaults have yet occurred locally. Training is done for predatory lending so that clients do not fall into that trap. Residents cannot refinance without paying off all encumbrances on the house. Could CDBG funding be extended as a due -on -sale no -interest loan rather than a grant? That has happened in the past and is possible in this scenario. The burden to repay is on the family, not on Habitat. Is the store a drain on the organization? No. This operation was begun in September and is already out of the red. The store is currently making enough money to pay overhead expenses. Habitat is thrilled with the response. The national organization helped fund this effort. All items are donated. The Loveland store netted $750,000 last year. The Fort Collins store hopes for similar results in a couple of years. Since everything is donated, including volunteers, the only things to fund are overhead. A committee runs the store. The store owns the domain www.habitatstore.org. The store also offers the opportunity to train workers and help them learn a trade. Different volunteers provide aid, an equivalent of three employees, for Community Development Block Grant Commission Meeting of April 3, 2002 Page 5 zero cost through the Green Thumb program. Habitat can use these employees as long as the Green Thumb program is funded. Where do the clients come from? Newspaper ads; applications in churches and the Habitat store. Over 150 applications were given out in last outreach process. This last round resulted in seven families, with 65 applications to sift through. Word of mouth is working well. Ms. Smith noted that the homebuyer assistance program provides referrals as well. What is the ethnic diversity? Two Hispanic families; three families with disabilities. The program makes every effort to get the word out to everybody. How do "canned" house plans fit into the various neighborhoods? The standard plans seem to have an appropriate fit everywhere. If brick or other materials are required, they can be built in. The plans have been up for review; all plans have been built out in various neighborhoods. These houses fit well on the newer type of sized lots. With architects on the committee, changes can be made quickly. Comments were made about the levels of expertise that is donated to Habitat on a widespread basis. Lagunitas — Hill Top Farm Following presentation by Jon Prouty, the following questions were asked and areas addressed by the Commission: Is the market price limited upon resale? Yes. Residents in affordable housing receive a 3% increase in value of the property, much less than private market. Does this limit economic growth on the affordable side? Yes. The program presents a balance. There is enough appreciation in three years to provide a nest egg of $15,000. The limitation could be 4% instead of 3%, but the tradeoff is affordability in perpetuity and to have a down payment exit when the residents leave. Will people gravitate to market homes with higher appreciation, e.g., 15% rather than a limit of 3%? Yes. If given choice, residents will go to the free market. However, the $10,000 buy -down opens up a strata of market not currently available. Will a portion of the 3% allowable appreciation go to such items as realtor fees? No. The allowed appreciation is 3% plus costs, including realtor fees, closing costs, and title insurance. Community Development Block Grant Commission Meeting of April 3, 2002 Page 6 Does the rendering as displayed represent the look of the project? No. The subject rendering is an example of Landings Bay across from the Post Office. Quality building can be done even at a lower cost per square foot. The rendering represents a project with a price of $129,000 per unit. Does the project have approval for the acreage? The development has been in the approval process for 18 months. It is approaching conclusion, with no doubt of it being approved. Approval is anticipated in July. What happens to the construction loans if the units do not sell out expeditiously? Will the construction loans be serviced or will the units go to the private sector? The applicant has committed to the program as outlined. The developer is brainstorming with banks and Larry Kendall. The prices are $120,00 and $140,000 now and may go lower. Over half of the units will be presold. It is the two -bedroom units that will sell for $120,000. Isn't the developer's fee of $1.6 million, as 15% of the overall cost of the project, rather high? No, it is low in comparison to other projects. Generally, these figures are put at 15 or 20 or a higher percentage in hopes that the numbers do not change. When they change, they typically go to 5 or 10 percent. The applicant can lower this figure if approval is contingent upon the level. Someone is benefiting from the subsidy, and it does not appear to be the homeowner. Who is seeing the benefit of the funding of $480,000 on 48 units? The funding would be used 100% for price reduction. Units at $130,000 will be reduced to $120,000. The benefit seen is bringing the private sector into the effort to limit the market by applying a deed restriction in perpetuity. The benefit is then forever. Discussion was held among Commission members as to goals and benefits. The Chairman reminded the Commission to engage in questions rather than discussion. Have HUD environmental requirements been met with regard to the railroad tracks? Yes. Is the entire project planned as affordable? Yes. $480,000 would cover the entire project, whatever the funding source may be. Could the project be distributed as 24 units market rate and 24 affordable? No. There are 84 free market units immediately adjacent to this property; they are not part of this corporation. The State desired this project to be a totally autonomous and separate entity. Community Development Block Grant Commission Meeting of April 3, 2002 Page 7 Has the noise issue been addressed? Yes. The housing has been moved away from the tracks. Noise assessment numbers are available. Upon conclusion of questions, the applicant urged Commission members to contact him for any questions. Staff cautioned the Commission not to engage in ex parte discussions. Questions should be funneled through Staff, and answers will be supplied to all. Turning Point Following presentation by Jim Becker, the following questions were asked and areas addressed by the Commission: What are the provisions for catastrophes, given a net operating cash flow of $130? Turning Point has a $4 million budget. Reserves are in place. It owns $3.5 million in real estate. Its goal is to reinvest money back into the community. Catastrophes are covered by reserves. Would a due -on -sale loan rather than a grant be acceptable? That would be welcome, assuming Board approval. What are the $145,000 cash reserves used for? Monthly expenses are $230,000 per month. Some services are paid for once a month, some twice a month, and contributions are received sporadically. The cash reserves are used for account balancing. How many properties does the project own? Four: The administration building and house next to it; Newton Center on Shields and Plum; 20-bed group home on Matthews Street; the building on Prospect. How long will did take the 33-bed facility to approach its capacity? The project expects a census of 18 within nine months. The staffing patterns change with more than 20 in a facility. It has taken about 18 months to get into the steady upper level. How long will it take the eight Alex to reach capacity? Approximately four months, depending on the referral agent. The program has a "share -the -burden" concept and establishes partners with such entities as Beaucaire and Larimer County Mental Health. Community Development Block Grant Commission Meeting of April 3, 2002 Page 8 Would the project consider renting to other income -qualified tenants if needed economically? If it would take time to fill out the units, and if an entity such as Neighbor to Neighbor had clients in need, Turning Point could partner with that project to lease the unit, even if it meant longer -term rentals. Does this property exist? It is difficult to find a readily available property in a reasonable location that stays available for very long. Are clients from Fort Collins? The project serves clients from all over Colorado, 25 different counties. More than half of the clients are from Larimer County. Most of the Larimer County clients are from Fort Collins. Documentation on demographics is in the literature that was distributed. What other entities support the project? The Human Relations Commission from Loveland. The Judicial District supplies some funding. Larimer County Mental Health gives some support. Other entities have contributed. This program does not exclusively handle youth offenders, but various situations of troubled family dynamics. The typical clients are older adolescents, where it is not safe or best to go back home at the moment. The program works with the social situation of these clients and their development level in order to give them practice and emancipation skills and thereby increase their chances of success in the world. After recess, Mr. Waido related the compliments by the Mayor for the work of the Commission. Fort Collins Housing Corporation Following presentation by Julie Brewen, the following questions were asked and areas addressed by the Commission: Sleepy Willow project Is partial funding not an option? The program is in need of the entire grant, particularly in hitting the 30% AMI level. Is there a concern of a conflict of interest? HUD has approved the project. One of the directors is the realtor for the purchase. That director has abstained from all discussions and interactions on the board concerning this matter. Guadalupe Herrera from HUD gave approval to the process. Community Development Block Grant Commission Meeting of April 3, 2002 Page 9 Why only 30 years affordability and not affordability in perpetuity? The project could do that. The 30 years mentioned is a result of the State application. That application says 30 years, even if the project is intended to be affordable in perpetuity. The project has sold a unit in the past in order to leverage other units. This project could be in perpetuity. With a management fee of $100,000, good replacement reserves, a worst- caset cash flow of $34,000, why can't this be a loan? Bank requirements made it infeasible. The management fee covers expenses. There is no profit. With a $95,000 startup and $300/unit annually, are the replacement reserves adequate? Probably. The contract with the buyer asks to set aside $50,000 as additional capital replacement reserve for the first year of operation. Roofs were replaced in the last four to five years. There are no immediate maintenance problems envisioned. The project's maintenance manager has visited nearly every unit. Is another unit just to the north, under different ownership? Yes. It is owned by the property manager. It is not in very good shape. Do students need to be emancipated to qualify for the appropriate AMI level? Yes. Clients cannot be dependents. Explain the items contained within the $100,000 management fee. It is a full absorption cost method. It include salaries; a technician for renting; office administration and overhead. Total cost is closer to $1.5 million. This is a pro rata allotment based on number of units, adding up to approximately $1200 per unit. The area of "maintenance" covers staff, trucks, facility, supplies, vehicles, phones, computer systems, groundskeeping. Staff noted that their analysis concluded that a loan would not be feasible in providing an acceptable debt ratio. The program needs a grant in order to be viable. Will the addition of maintenance for this project require more maintenance personnel? Yes. The program hires one tech for every 60 units. This project would entail the hiring of another tech. At a current level of 287 units, does this comprise a 30% increase? Yes. The Corporation has 287 units. The Housing Authority as a whole has additional units. Community Development Block Grant Commission Meeting of April 3, 2002 Page 10 Is the project approved for the bank loan? The loan has not gone to the loan committee. Wells Fargo may provide a good rate similar to First National. Nearly all the loan portfolio is with First National, and it may be advantageous to expand to other institutions. The project will hear from Wells Fargo this week, and the Commission can be supplied with a copy of those terms. Do relocation issues exist? No. There will be no relocation of existing tenants. What does the reference of "family housing" encompass? The HUD definition refers to any household as a family. Three men could be a family. Lakeside at Rigden Farm project Could this application be revisited in the fall? Yes. Or the application could entail half from CDBG now, half from HOME in the fall. Why is this application being added to an already existing program? The applicant is assuming that with this influx of applicants, the existing program would be quickly depleted. Applicants cannot receive a double dose of down payment assistance; it must be one or the other. This process, if approved, would act as a set -aside fund for the normal HOME down payment assistance fund. How many houses are encompassed in this application? What are the prices? The first application is for 50 homes, ranging in price from $65,000 to $180,000. Some are attached; some are carriage; some are single-family detached. This program involves a due -on -sale loan for down payment assistance, ultimately reimbursed to the City. This would not affect other people applying for a HOME grant. Why is this proposal being presented now when it was not in the earlier proposals? Are construction costs driving this application? No. The early pro formas assumed buyers would get $8,000 assistance, total, per house. Families will be eligible for down payment assistance with this proposal or without. The land proposal was a two-cycle process. What types of projections have been done to come to the conclusion that this additional $209,000 is needed in the HOME program? The HOME program is asking, in its normal course, for down payment assistance for 60 homes, which is the average number of applicants assisted annually. If this project alone generates 50 applications, there will be a shortfall. Community Development Block Grant Commission Meeting of April 3, 2002 Page 11 What is the limit of down payment assistance and what is the standard amount applied for? The limit is $8,336; the standard application is about $7,000. What is the anticipated time line for housing availability? Houses will begin to be available next January. Four to five per month are anticipated after that, with the last units projected for October. What is the projected affordability level? All units are under 80% AMI. 45 units were initially market, but those may be able to be brought to affordable status. What is the alternative if the grant is not approved? Families may individually apply for HOME down payment assistance, with the hope that HOME will have the resources for all the qualified applicants. What is the projected available housing stock in the first year? Four to six per month, starting in January, resulting in at least 48 in first year. Are the units side by side or scattered throughout the development? The units are in one 35-acre parcel. Beaucaire Following presentation by Lynette McClain, the following questions were asked and areas addressed by the Commission: How will the project reutilize the rental cost it is presently paying? The project has a waiting list representing a pressing need. The money would be put into a building fund. All services would be at the location that is now being rented. Montly rent is currently $1300 at one property and $1700 at the other. Combining these expenses would result in significant savings. The appraisal was for $222,000, and the owner is happy to take $178,000 as the purchase price. Are there estimates for building additions? Affordability of additions is still in question. A guess right now is $150,000. Why not move to a larger facility? The project has been searching for an appropriate location for five years. This location is perfect; proximity to bus service, proximity to downtown, good neighborhood, good price, good potential for additions. Community Development Block Grant Commission Meeting of April 3, 2002 Page 12 Is the program leveraged through other funding? The application has 13 letters of rejection attached. Some sources want to see the project in full operation before considering an application. Others simply decline to fund this type of project. What is the benefit of purchasing the property? The project can expand to meet increased demands. Considering this purchase price, how can the project afford further add- ons?Through fund-raisers and perhaps through an equity loan. Fund-raising is apparently difficult; some of the letters of rejection are two years old. Fund-raising and startup is a tough process. Licensing took a year. Medicaid approval took eight months. $150,000 was needed for startup. Medicaid paid 75% of available funds. The project is running now and funding is a higher possibility. Those involved in the project are writing grant proposals. Could CDBG funding be extended as a due -on -sale no -interest loan rather than a grant? Yes. If the program did not succeed, it would be expected that the property would be sold and funds returned to the CDBG program. How does the program differentiate where it receives clients? The program accepts anyone, but due to local demand, outside clients are few and far between. There have probably been three kids, total, outside of Larimer County. Can the program decline referrals from the Department of Youth Corrections? Yes, but it hasn't been done. It's possible. Not many programs like this are in existence, and parole officers try to find the placement that fits the youth. How many facilities does the program have? Three; the business office, day treatment and counseling, and the supervised apartment setting that provides a step to emancipation. In the house, one bedroom is an office; the other three bedrooms have two kids each. What are the terms with the seller? If the sale is funded, he is then paid. The mortgage does not allow seller -carried paper. It was noted that a wraparound or seller -carried mortgage is not permissible in this setting. Can the property be put into a trust and the program become the financier? Staff stated they would have to call the Denver HUD office for guidance on that concept. The applicant noted a possible return to the HOME program to request construction funding. Community Development Block Grant Commission Meeting of April 3, 2002 Page 13 Who supplies the income of over $200,000 for consulting fees? Medicaid pays $122 per day per child. The Department of Youth Corrections pays $45 per day per child for room and board. If the client departs suddenly, the bed is held open but is not paid for. When purchase is completed, who is the owner? Beaucaire. The present owner noted that the facility is run like a military barracks. The house has never been in better shape. A regimented schedule is adhered to, including cleaning chores. The clients are polite and respectful. Crossroads (two projects) Following presentation by Melissa Woodward, the following questions were asked and areas addressed by the Commission: Is there just one bid from one contractor? For one bathroom, a couple bids were received. The project has spoken with the City's contractor. There was a full walk-through with the facilities manager and a fax from him concurring with the estimate. How does the specialized advocate work with the District Attorney's office? That person would be able to support the present advocate, attend bond hearings, work with clients on civil issues, and generally explain aspects in greater detail. What has changed from using volunteers? The program does use volunteers. 40 volunteers are on staff. The DART advocate on occasion does advocacy and bond hearing and services during the day. There is a need for consistency that is not always available from volunteers. The present staff person does the work of two people, addressing any issues that come up. Specialized advocacy is targeted more toward legal issues. They are being handled at the present, but bigger and more complex needs are arising. In the proposal for repairs, would $29,000 be acceptable, pending the determination of funding by Loveland? After discussion, the applicant noted that the application was based upon a specific need. The $93,000 is the correct figure, with no minimum. How are people referred to the facility? There are direct referrals from outreach sources. Also through doctors, the hospital, legal services, the court system, and the school system. Community Development Block Grant Commission Meeting of April 3, 2002 Page 14 Is this the only facility of its kind in Northern Colorado? It's the only facility in Larimer County for women and children. A house in Loveland does outreach. If 100% funding is unavailable, what is the breakdown of priorities and the numbers needed? Bathroom renovations are high property at $31,093. The kitchen renovation is next in priority. The carpeting/tiling would be next. Painting would rank fourth. What is the children/women ratio and trends of the available beds? Overall, there is an increase in need. The ratio seems to hold constant. The average number of children seen is 10 or 11; around 17 during the holidays; and average of two children per family. What is the comfort level with the contractor? The contractor being used for renovation has references, and the applicant is comfortable with this person. There have been more conversations with Ron, with the City. The Facilities Committee will meet with Ron to talk about the other two contractors. People on the board recommended the first contractor. How have donations been solicited for this project? Several private foundations have advanced funds. The project enjoys a good volunteer base. White Construction has contributed in -kind. $13,000 has come from other sources. Despite a high level of participation by volunteers, there are now more substantive pieces requiring a higher level of skill. What is the incidence of men who are victims, whether they need housing? Five men served last year in outreach. The same advocacy is provided to men and women, although housing is not appropriate at the facility. The program can still provide services in a hotel, patrolled by police. The program will collaborate with other agencies to work with men. What is the maintenance budget? $8800. A minimum of $12,000 is needed to enhance specialized training and advocacy? Yes. This amount just covers the salary. There is a staff of 16. What generates the interest dividend/sale of stock figure? The project sometimes receives stock donations. A reserve is needed in order to meet United Way standards of three months of operating expenses. Of the $191,000 cash, the majority was rolled into a money market. A one-time donor inflated the figure last year. The executive director position was unfilled for several months, generating extra money from the unpaid salary. Those funds have gone to reserves. Community Development Block Grant Commission Meeting of April 3, 2002 Page 15 How many kids were served in the shelter and how many in outreach? 150 in the shelter, about 170 in outreach. Was the $7400 from sale of stock all from donated stock? For the most part. A small portion was turned over prior to the presenter's tenure. Phil wants to know how much was investment, how much was gift. What drives the depreciation figure? Capital expenditures, equipment, a vehicle, furniture, photocopier, the computer. What size are the kitchens? These are converted house kitchens. if the locations are confidential, why are they printed on the application? That was a mistake. The shelter location is not disclosed to anyone until a woman is ready to come in. Precautions are taken to protect the location. It has the appearance of a typical house. Neighbor to Neighbor (four projects) Following presentation by Beth Cross and Rusty Collins, the following questions were asked and areas addressed by the Commission: Since all four projects total $810,000, prioritize the projects for the Commission. Social service; rehab; acquisition; office. Will an application on the Chen property still be viable in October? Yes. Will this be the start of a yearly maintenance request? No, this is a one-time request. How is maintenance to be addressed? The program will be funding the reserve as noted. Reserves should be at $70,000-100,000 at the end of this year. The board is restructuring the development committee with different criteria, and deferred maintenance will be built into the funding requests, so this issue will be mitigated in the future. What is net increase for program funding that will be seen from the restructuring? Initially, there will be $35,000 per year in savings. The total loan is lower than projected, and this compromised the savings to some extent. Savings are not realized from increased cash flow but in reducing the principal balance faster and seeing the benefits of the amortization. Can the Coachlight project generate $20 per month per unit? Yes. The owners walked away with the replacement budget of $300,000 that was set aside at purchase. The residual receipt account of $20,00 stayed with the property. The stockpiled reserve left with the owners. Community Development Block Grant Commission Meeting of April 3, 2002 Page 16 Question to staff. In determining the funding target, must moneys be contributed specifically, or may they be contributed generically, such as in maintenance? Yes, because CDBG works on reimbursement. The project first does the rehab, then it is paid. How long would it take to spend the subject $1 million? 10-15 years, with priority in the next three. The project is not asking $1 million. It is requesting Fort Collins CDBG for $300,000, Loveland for $80,000, and the other $700,000 will be capitalized over the next 10-15 years. What happens with the prepurchase counseling fees received from the homebuyers assistance program? Clients who receive prepurchase counseling generate $50 in reimbursement fees from the down payment assistance program. HOME reimbursements do not come close to the cost of providing the classes. Staff noted that this has been a reimbursement item for five years and has been reduced from $75. The applicant added that when this program started, $16,000 would provide for a counselor. Now it is difficult to provide for a counselor for $38,000. If relocation is not done, how will the 50% AM/ target be reached? The mix is reached within a year. Five or six of the projects were already low-income; two or three are not, and they will turn over in the next year. Non -low-income people will not choose to reside there for long. Present contracts must be honored. Is rent lowered for low-income qualified? Yes. When the program takes over the units, if a resident is qualified, the rent goes down. If they are already rent - qualified, it stays the same on the contract. What would be the impact of partial funding on the Chen property? The applicant would have to run the cash flow to determine the impact. It would compromise the 30% units immediately and generate a higher mix of units. The mix would be tailored to the subsidy. Does the rehab budgeted for the Chen property cover the need? That is the hope. The budgeted figure could go up or down but this budget follows good rule of thumb. What is the interest rate on the Chen project? 7.25% with Community First. This rate was achieved through partnering with the Housing Authority, due to particular circumstances this year. It is not anticipated that these circumstances will continue. Community Development Block Grant Commission Meeting of April 3, 2002 Page 17 Would it be preferable to receive full funding on rehab, none on the acquisition, or partial funding on each? The applicant struggled with this question. The owner of the Chen property wishes to sell this by the fall or early spring. An option can be placed on the property. City of Fort Collins Mr. Waido declined to make a presentation and invited questions. How many down payment assistance applicants are targeted? 60. Since October, 30 have been accomplished, so the number is right on target. The biggest increase has been from the Fossil Creek Condominiums. The program is also working with Warren Farms, KB, and Provincetowne, with a few in Waterglen. The program income is $90,000 so far. Clarify the Housing Corp. application. That application is an insurance policy for this program. If the HOME project goes well, the money will be exhausted, and the people in the Rigden Farm project will not have funds available. That application is a good idea to protect other projects. How many staff is CDBG administration supporting? Two full-time FTE. It takes more than that number to run the program. People's time not charged to the program: Mr. Waido; department head; legal counsel; general fund adminstration; finance; Mr. Head's time with the program. Many cities take 20% off the top for administration. The City staff runs usually sees 11-12%. Ms. Phelps has cut line items in order to compensate for those line items with increased expenses, due to a cut in the CDBG allocation. Why not take the fu1120%? Staff doesn't need it. The values of the department dictate an allocation of as much money as possible for projects and least for admin. What would be the impact of 20%? 12% is $154,000; 20% would reach approximately $256,000. Therefore, an additional $100,000 is technically available for program costs. Upon motion, second, and unanimous approval, the meeting adjourned at 10:00 P.M.