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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 06/12/2003CITY OF FORT COLLINS COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION Meeting Minutes June 12, 2003 Phil Majerus, Chair Terri Bryant, Vice Chair Bill Bertschy, City Council Liaison Vice Chair Terri Bryant called the meeting of the Community De)Mlopment Block Grant Commission to order at 6:40 p.m., at 281 North College Avenue, Fort Collins, Colorado. Board members present included: Vice Chair Terri Bryant, Bob Browning, Michael Kulisheck, Tia Molander, and Cheryl Zimlich. Staff present: Ken Waido, Maurice Head, Heidi Phelps, and Julie Smith. It was noted that a quorum was not yet present. APPROVAL OF MARCH 6, 2003, AND APRIL 10, 2003 MINUTES No changes were noted on the March 2003 minutes. In regard to the April 2003 minutes, Ms. Bryant stated that she had abstained in the vote on the "Hot ABC" issue, and that vote should be noted as passed with one abstention. Lacking a quorum, approval of the minutes was tabled to the next meeting. DEBRIEFING OF THE COMPETITIVE PROCESS Mr. Waido noted, with approval, the positive interaction between City Council and the Commission. A question was raised concerning e-mailed questions by Commission members and whether that allows applicants additional time over and above that granted at the public hearing before the Commission. Mr. Waido stated these questions are usually generated by Commission members' need for clarification. Answering questions makes for better final applications. The applications are ultimately recommended for funding based on all relevant facts. Bruce Croissant entered the room, and a quorum was achieved. The group reviewed the competitive process application forms. Audits of program budgets are available. The program budget is requested rather than the whole agency budget. Some agencies will have a reach far beyond the project at hand. Having a project budget presents a better context for review. There is further concern about the propriety of reviewing a complete agency budget. Example: If the City presents an application, should the entire Community Development Block Grant Commission Meeting of June 12, 2003 Page 2 departmental budget or even the entire City budget be open for review? Ms. Zimlich expressed a desire to see both the program budget and the agency budget as it related to the program in question. Ms. Phelps noted on page 2, item 7, that the goals are to get information needed for the project and to be as seamless as possible with the Division of Housing. The Commission is not in the development review process except to have an interest in timing and feasibility. Staff will be informed through these items that due diligence has been performed for the project. The "management fee" block is reflective of a profit item for the project. It may be possible for a program to bundle management fees into other items. Staff's preference would be to see profit items such as management and development fees be capped at a certain percentage. Some discomfort was expressed with the concept of subsidizing profit. The general consensus of the Commission was that the process worked well and was run smoothly. PROJECT UPDATES Neighbor to Neighbor. The deal has fallen through due to a low appraisal and owner unwillingness to come down in price. Neighbor to Neighbor is now eyeing two lots on Blue Spruce and Conifer through a potential process of both Fort Collins and Loveland money. This area is attractive because of the proximity to the Food Bank and Social Services. If another property becomes available, the applicant could fly through the approval process through an administrative hearing; if so, the appropriated CDBG funding could possibly be used for that property. Funding is not site -specific, although Commission review is prudent. Issues still need to be addressed concerning approaches, perspectives, and the relationship of Catholic Charities Northern. The eight-plex at Clearview has closed. Minor rehab is needed. Sleepy Willows. The deck project is in process and is ready to use City money. Crossroads Safehouse. This project suffers from a lack of communication and understanding about the work to be done and the funding source. Answers to queries are not always Community Development Block Grant Commission Meeting of June 12, 2003 Page 3 completely forthcoming. Items have been added or completed without full communication. Ms. Smith will visit this project in the near future. Homebuyer Assistance. The 657th loan has been completed in this program. One week saw 13 closings. The trend is towards condominiums, with a few older houses being seen as well. Mr. Browning raised a question of charging interest in order to make the ultimate return more equitable to the agency providing funding. The owner would now see a windfall profit. An interest schedule could incorporate a due -on -sale clause rather than adding the administrative burden of loan servicing. Discussion was held over potential rates and the widespread practice of agencies realizing fees or interest from their funding aid. Mr. Browning posited that a simple due -on -sale clause incorporating simple interest could be sufficient. The Commission asked Staff to explore this option. Staff would need to seek Council approval and lenders' approval. With the small amount of interest applicable to a due -on -sale, lenders would probably not raise objections. The interest would not cover the inflated amount of funding but would provide a return of investment for other funding opportunities. Mr. Waido stated that available land will be exhausted in 10 to 20 years, and saturation will drive up prices. Public Service Projects. Ms. Phelps stated that the projects were generally proceeding smoothly, with special note on several applicants. Volunteers of America. Development fees have been paid. Mr. Browning was complimented for his conscientiousness in suggesting early payment of development fees with Federal funds in order to bring money into the City coffers as quickly as possible. Beaucaire. This project would not score high for funding, based on capacity. The development process is proving thorny. It was originally stated that if expansion is not approved, the applicant would not proceed with purchase of the property. It now appears that expansion may not be approved; the applicant may still intend to purchase the property. Staff is trying to keep the applicant mindful of the conditions of funding. A 90-day letter has been sent. The terms for financing will Community Development Block Grant Commission Meeting of June 12, 2003 Page 4 be reviewed closely due to attendant circumstances. Staff is wary of potential and overly creative funding approaches that would not be allowed. Habitat for Humanity. This project will use the entire allocation. Waterglen properties are being acquired. Construction is on schedule. A women -built project is proceeding. Rigden properties are a possibility. Some gifting has occurred that has helped to bring prices down. Catholic Charities Northern. This applicant is on probationary status. There has been difficulty with public service projects. The accounting is convoluted and difficult to review. Problems continue to surface. Monthly reports are now required and performance measures have been set. If the applicant does not meet expected performance, the contract may not be renewed for the new fiscal year. No formal action is yet needed from the Commission. Staff has two responsibilities: Fiduciary responsibility and support of the agency. If there is a conflict, fiduciary responsibility will prevail. NCAP. Dr. Figueroa is resigning as executive director. PREVIEW OF FALL COMPETITIVE PROCESS Ms. Phelps reported that advertising begins in two weeks. Postcards are completed. Application forms and the Web site will be done by July 1, with a press release to follow. Applications are due on August 14. Staff will try to keep presentations to one night. OTHER BUSINESS Mr. Waido advanced the notion of the City applying for its full 20% allocation for administrative expense from CDBG funding, in light of the current budget crisis. The present level is 11%. HOME administrative funding is capped at 10%, and those funds have been used. The City is contemplating requesting $55,000. A great deal of discussion has ensued among Staff as to the advisability of this approach. The City currently subsidizes CDBG administration with general fund revenues. Fort Collins is in a minority of communities that does not take the full 20%. Even if 20% were allocated, a portion of those funds could still be Community Development Block Grant Commission Meeting of June 12, 2003 Page 5 redirected to projects. It was noted that the hypothetical $55,000 level would not, in all likelihood, reach 20% funding. Salient points in the ensuing discussion: It is admirable that the City supports CDBG through general fund but ironic that in tough economic times, the City looks for added income from affordable housing. Other departments with capital project targets generally have administrative sections to the funding process. It would be prudent for the City to be consistent in its administrative funding approaches. If the administrative funding is not increased, the program will not go away. It would be preferable to see certain elements of City funding downgraded — e.g., computers, car fleets, and travel — than to see social programs suffer. It is contrary to the City's affordable housing goals to have affordable housing funds redirected to administration. Council can allocate increased funding for administration regardless of the Commission's preferences. There would need to be an application process. This situation has unique elements due to the Federal funding element. It would be helpful to know the level of consistency this program has with other City departments and programs. DECEMBER MEETING Ms. Phelps informed the Commission that due to a dearth of agenda items, the July and August meetings will probably be canceled. The December appreciation meeting may be subject to some changes, due to financial restraints. The meeting adjourned at 7:55 p.m.