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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 10/11/2001Commission members present: Staff: Phil Majerus Terri Bryant Vi Guthrie Brett Hill Jennifer Molock Bill Steffes Dennis Vanderheiden Cheryl Zimlich Linda Coxen Ken Waido Heidi Phelps Maurice Head Julie Smith Stacy Kelley Produced by Meadors Court Reporting, LLC 140 West Oak Street, Suite 266 Fort Collins, Colorado 80524 970.482.1506 970.482.1230 fax meadors@reporterworks.com e-mail MEETING HIGHLIGHTS Mr. Waido briefed the Commission on the new developments concerning funding eligibility among the various sources. HUD has revised its policy of paying City impact fees from CDBG funding. That activity is now ineligible. This decision has increased the availability of CDBG funding due to various applicants being approved for payment of impact fees. The previously allocated CDBG funds must be replaced by Affordable Housing Fund monies and/or HOME funds. Mr. Waido noted that in addition to the eight pending proposals, the sheet before the Commission included the Elizabeth Street project, Volunteers of America, CARE, and the Housing Authority as current applicants for funding. Ms. Smith noted that the only items eligible for CDBG are the Fort Collins Housing Corp rehab project and the Fort Collins Housing Authority Rigden project. This leaves over $700,000 of CDBG funding for the Spring cycle. Only 1.5 times the grant can be held in active abeyance. Presently, the funds are .7 of the total, and this reprogramming could push the envelope on the requirements. There may be over $2 million of CDBG funds available in the Spring. In response to questions by the Commission, Staff noted that these applicants are not new applicants, but funding recipients who, due to the changes in regulations, need their funding allocated from new sources. Mr. Waido reviewed the handout regarding available funds versus the requests in the various categories. Following discussion, motions, and voting, moved by Ms. Molock, seconded by Ms. Coxen: To adopt the final recommendations in toto, to be forwarded to City Council for its determination. Motion passed 7-2. The meeting adjourned at 8:30 p.m. FUNDING RECOMMENDATIONS Neighbor to Neighbor — Tenant -based Rental Assistance — fees. Request $20,000 (Eligible from Affordable Housing Fund.) Moved by Ms. Zimlich, seconded by Ms. Guthrie: To allocate $20,000 from the Affordable Housing Fund. Motion failed 4-4. Moved by Mr. Steffes, seconded by Ms. Coxen: To recommend no funding, on the basis that the City has committed to funding this project from the general fund. Motion approved unanimously. Total recommended fundina level - $0 Pros of Application Cons of Application The program is well leveraged. The need The City of Fort Collins needs to make its is high, and the project is worthy. CDBG participation felt in this project. The funds are more than adequate. This program will be funded by the City without project was worthy for this award before CDBG subsidy. and still is. Fort Collins Housing Corp - Rehabilitation. Request $92,250 (Eligible from CDBG and/or HOME.) Moved by Mr. Vanderheiden, seconded by Ms. Zimlich: To recommend full funding from CDBG funds. Motion passed unanimously. Total recommended fundina level - $92,250 Pros of Application Cons of Application This project has been previously approved and addresses an urgent need. Q Elizabeth Street — Amended request. Request: $250,000 (Eligible from HOME and Affordable Housing Fund) Moved by Mr. Hill, seconded by Ms. Coxen: To recommend funding of $250,000 from HOME funds. Motion failed 2-6. Moved by Mr. Steffes, seconded by Mr. Majerus: To recommend funding of $125,000 from HOME funds and $125,000 from the Affordable Housing Fund. Motion carried 7-1. In discussion by the Commission and Staff: Worthy projects are competing for funding that is inadequate overall. This project is under construction, with an assurance of $250,000, and that funding will be needed soon. A competing project, Volunteers of America, is in position for the planning process and may not need funding for some time. Total recommended funding level - $250,000 Pros of Application Cons of Application Good program. Commitment for funding already made. Volunteers of America — Amended Request. Request: $71,000 from HOME; $219,000 from Affordable Housing Fund. Total request: $290,000. Moved by Mr. Steffes, seconded by Ms. Coxen: To recommend funding of $71,000 from HOME funds; $219,000 from the Affordable Housing Fund in the form of a grant. Motion passed unanimously. In discussion by the Commission and Staff: The need exists, and funding for this project is already approved. This strategy would leave more funds with HOME and the pressing needs that exist for that source. The applicant's plan is in process, but will not be presented to Planning & Zoning before January. This is a worthy project, and the prior commitment needs to be followed. The funding is already allocated, and that should not be changed. The construction could be funded in the next cycle; HOME dollars will not be available in the spring cycle. Total recommended funding level - $290,000 Pros of Application Cons of Application Good program. The commitment to fund has alread been made. Funding could possibly be delayed in favor of more urgent needs with other ro ects. CARE — Amended request and new request. Request: $305,300 from CDBG; $92,250 from HOME; $102,450 from CHDO. (Affordable Housing Fund also applicable.) Total request: $500,000. Moved by Mr. Steffes: To recommend funding of $206,250. Motion died for lack of a second. Moved by Mr. Vanderheiden, seconded by Ms. Zimlich: To recommend funding of $92,250 from HOME funds CHDO 2000; and $102,450 from CHDO 2001 funds. Motion carried unanimously. Moved by Ms. Zimlich, seconded by Mr. Steffes: To reduce the recommended Bethphage funding by $99,050; to allocate that $99,050 to the CARE application; to allocate $206,250 of HOME funds to CARE; for a total recommended allocation of $95,950 from the Affordable Housing Fund to Bethphage and total recommended funding of $305,300 to CARE. Motion passed 6-3. Moved by Mr. Majerus, seconded by Mr. Hill: To recommend reduction of the CARE funding by $30,000 from the $99,050 Affordable Housing Fund portion; to allocate half of that reduction ($15,000) to Bethphage; to allocate the other half of that reduction ($15,000) to Habitat for Humanity; noting the reluctance of the Commission to participate in payment of $60,000 of arguably unnecessary attorney fees. Motion passed 6-2, with one abstention. (Motion repeated in Bethphage and Habitat sections.) In discussion by the Commission and Staff: CARE is the only eligible recipient of CHDO funds. Either CARE receives the funds, or no one does. The funding represents a commitment that has already been made. Discussion was held on comparisons between Bethphage and CARE and each applicant's ability to fund any shortages. CARE addresses more people per dollar. It was further noted the complexity of tax credit financing, the scarcity of legal professionals with that expertise, and the circumstances that led to the applicant's current crisis. Other factors considered: The management strategies; the shortfalls of legal representation; the accountability of the project for the present problems; the application of developer fees to combat this problem; and the need for retainage. Total recommended fundina level - $470,000 Pros of Application Cons of Application The applicant is trying hard and being responsible with the project. Good track record. The applicant does a better job than anyone else with the AMI level addressed. Home Buyer Assistance. Request: $200,000 (HOME) and $100,000 (Affordable Housing Fund). Total request - $300,000. Moved by Mr. Majerus, seconded by Ms. Coxen: To recommend allocation of $100,000 from the Affordable Housing Fund. Moved by Mr. Steffes, seconded by Ms. Molock: To amend the motion to recommend allocation of $200,000 from HOME funds; $100,000 from the Affordable Housing Fund. Motion to amend passed 7-1with one abstention. The motion, as amended, passed unanimously. In discussion by the Commission: The allocation is recommended in this fashion in order to combine the resources of the applicable funding sources as well as to allow the flexibility gained from each one. Total recommended funding level - $300,000 Pros of Application Cons of Application Good program. Good track record. Numbers are better than ever. Program is highly successful. M KB Home. Request: $632,485 from HOME; $295,113 from Affordable Housing Fund. Total request: $927,598. Moved by Mr. Steffes, seconded by Mr. Vanderheiden: To recommend no funding. Motion carried unanimously. Concerns and responses of the Commission and Staff: Because of regulations that have recently come to light, a severe funding shortfall exists. Resources have been committed to other programs prior to this application coming forward. This project will in all likelihood proceed regardless of CDBG participation. Total recommended fundina level - $0 Pros of Application Cons of Application The proposed project is worthy and well Some of the applied -for items are planned. appropriate, but other items such as the square -foot request should not be considered. The AMI level served is at the high end and does not serve the highest need. 7 Habitat for Humanity. Request: $41,242 from HOME; $32,000 from Affordable Housing Fund. Total request: $73,242. Moved by Ms. Coxen: To recommend funding of $32,000 from the Affordable Housing Fund; that any funds not expended by the applicant be awarded to Tenant -Based Rental Assistance. Motion withdrawn. Moved by Ms. Coxen: To award any funding not used by the applicant to Bethphage for purchase of property. Motion died for lack of a second. Moved by Mr. Hill, seconded by Mr. Majerus: To recommend no funding from HOME funds. Motion carried 5-4. Moved by Mr. Majerus, seconded by Mr. Vanderheiden: To recommend funding of $32,000 for down payment assistance as a loan; if fee appraisals do not exceed the FHA limit of the house, the funds would be reprogrammed to the Affordable Housing Fund. Motion carried unanimously. Moved by Mr. Majerus, seconded by Mr. Hill: To recommend reduction of the CARE funding by $30,000 from the $99,050 Affordable Housing Fund portion; to allocate half of that reduction ($15,000) to Bethphage; to allocate the other half of that reduction ($15,000) to Habitat for Humanity; noting the reluctance of the Commission to participate in payment of $60,000 of arguably unnecessary attorney fees. Motion passed 6-2, with one abstention. (Motion repeated in Bethphage and CARE sections.) Concerns and responses of the Commission and Staff: Staff is wary whether any fees for a project are eligible for funding. The loan would be 0% interest, due on sale. The money may not be needed, depending on the appraisal. The money would be reprogrammed if not used. Total recommended funding level - $47,000 Pros of Application Cons of Application A family with four children in the lower AMI The subsidy level at $20,000 per unit Is- is extraordinarily stretched in its ability for higher than guidelines. Other projects home purchase. This program would have higher priority, as well as prior greatly help that type of applicant. commitments, with the limited funding available. The project is somewhat remote from the Fort Collins community as a practical matter. (Although within City limits n Bethphage: Request: $195,000 from Affordable Housing Fund. Moved by Ms. Bryant, seconded by Mr. Steffes: To recommend funding of $195,000 from the Affordable Housing Fund, in the form of a 0% interest loan, due on sale. Motion carried 6-2. Moved by Ms. Zimlich, seconded by Mr. Steffes: To reduce the recommended Bethphage funding by $99,050; to allocate that $99,050 to the CARE application; to allocate $206,250 of HOME funds to CARE; for a total recommended allocation of $95,950 from the Affordable Housing Fund to Bethphage and total recommended funding of $305,300 to CARE. Motion passed 6-3. Moved by Ms. Zimlich, seconded by Mr. Vandenheiden: To recommend funding of the $950 in the Affordable Housing Fund that remains, following all other recommendations. Motion passed 7-0 with 2 abstentions. Moved by Mr. Majerus, seconded by Mr. Hill: To recommend reduction of the CARE funding by $30,000 from the $99,050 Affordable Housing Fund portion; to allocate half of that reduction ($15,000) to Bethphage; to allocate the other half of that reduction ($15,000) to Habitat for Humanity; noting the reluctance of the Commission to participate in payment of $60,000 of arguably unnecessary attorney fees. Motion passed 6-2, with one abstention. (Motion repeated in CARE and Habitat sections.) Concerns and responses of the Commission and Staff: A question surfaced regarding the placing of restrictions in order to see a reflection of the grant in the number of Fort Collins clients. Although clients may come from outside of Fort Collins, the home is within the Fort Collins area as a practical matter, and residents of the home are Fort Collins residents as a practical matter. A deed restriction would be placed on the funds, with a due -on -sale clause. Discussion was held on the possibility of the funding benefiting from the appreciation of the property. Total recommended funding level - $111,900 Pros of Application Cons of Application The project is worthy. Although not within The project is outside of city limits. Clients city limits, the project is in the Fort Collins come from other locations than Fort area as a practical matter. There is a Collins. It shows a higher ratio of clients to demonstrable need in the community. dollars than some other programs. Ownership is in perpetuity. The program tries to keep families together rather than displacing the client from the family in another community. 0 Fort Collins Housing Authority. Rigden Acquisition. Request: $241,000 from CDBG; HOME and Affordable Housing Fund also eligible. Moved by Mr. Hill, seconded by Ms. Coxen: To recommend funding of $241,000 from CDBG funding in the form of a grant. Motion carried 5-4. Concerns and responses of the Commission and Staff: Inadequate reserves are planned for maintenance and management issues. Total recommended funding level - $241,000 Pros of Application Cons of Application Project going forward with nice -looking Inadequate showing of good strategy housing. Need is high. Provides for a good concerning reserves. mix of housing types and needs. Lagunitas. Request: $630,000 from HOME; $630,000 from Affordable Housing Fund. Total request: $1,260,000. Moved by Mr. Steffes, seconded by Ms. Zimlich: To recommend no funding. Motion carried 6-2. Concerns and responses of the Commission and Staff: The Commission wished to encourage the applicant to return in another cycle. There may be good concepts and approaches in this project, but it is presently more conceptual. Development review may help resolve concerns. Staff was asked to draft a letter to show interest by the Commission but not bind the Commission as to intent. Total recommended fundina level - $0 Pros of Application Cons of Application There is a possibility of other programs Developer has no previous track record completed that have been successful. The developing Affordable Housing projects. deed in perpetuity concept is attractive. There were concerns about the ability to complete. Funds are short when compared to the solidity and confidence of this project. A noise problem exists with the railroad tracks. The subsidy amount is extremely large. The applicant seemed to have a vague grasp of some of the concepts that the Commission looks for. No leveraging demonstrated. to Appendix 1 Commission representatives, by issue, for the study session with City Council: Neighbor to Neighbor — TBRA Dennis Vanderheiden Fort Collins Housing Corp. Mr. Steffes Elizabeth Street Brett Hill Volunteers of America Brett Hill CARE Linda Coxen Home Buyer Assistance Bill Steffes KB Home Bill Steffes Habitat for Humanity Vi Guthrie Beth ha a Terri Bryant Fort Collins Housing Authority — Ri den La unitas I Bill Steffes 11 Appendix 2 - Programs, Requests, and Commission Recommendations (Prepared by City Staff) October 11, 2001 Application Request HOME ($602,250) CHDO 2000 $9 CHDO 2001 $100450 AFH ($671,950) CDBG' ($1,090,000) Funding Recommendation N2N-TBRA $20.000 0 0250 0 0 0 FCHC-rehab $92.250 reprogrammed 0 0 0 0 $92,250 $92,250 Elizabeth $250,000 re ro rammed $125,000 0 0 $125,000 0 $250.000 VOA $290,000 reproarammed $71,000 0 0 $219,000 0 $290,000 CARE Reprogrammed New $300,000 $200,000 $206,250 $92,250 $102,450 $69,050 0 $470,000 HBA $300,000 $200000 0 0 $100,000 0 $300000 KB Home $927,598 0 0 0 0 0 0 Habitat $73,242 0 0 0 Fees $15,000 HBA $32,000 0 $47,000 Beth ha a $195,000 0 0 0 $111,900 0 $111,900 FCHA Ri den $241,000 1 $241,000 $241,000 La unitas $1.260 000 0 0 0 0 0 0 Total $4,149090 $602.250 $92,250 1 $102450 1 $671950 1 $333250 1 $1,809150 CDBG reprogrammed funding: Concorde $250,000 CARE $300,000 Elizabeth $250,000 VOA $290,000 Total $1,090,000 12