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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 04/09/1998City Council Liaison: Staff Liaison: Commission Chairman: CDBG COMMISSION MEETING MINUTES April 9, 1998 Bill Bertschy Ken Waldo Holly Sample REC'e/VEC MAY 13 7998 CITY 41ANACER The meeting of the CDBG commission began at 6:30 p.m. in the Community Planning Conference Room, 281 North College Avenue, Fort Collins, Colorado. Commission members present included: Holly Sample, Linda Coxen, Al Flores, Dave Gordon, Violet Guthrie, Bobbie Guye, Philip Majerus, Andy Smith, and William Steffes. Commission members absent: Tim Ostic and Joe Zimlich. Staff members present: Ken Waido, Julie Smith, and Mary Hile. Approval of minutes Moved by Mr. Steffes, seconded by Ms. Guthrie: To approve the minutes of February 12, 1998. Motion approved unanimously. FLOOD RECOVERY PLAN Affordable Housing Board. Sylvie Glass spoke on behalf of the Affordable Housing Board. The Board encourages all of the available funds to go toward housing. A large number of units have been lost due to both the flood and mobile home parks closing. This number of units is not being replaced. Special attention should be paid to the Housing Authority, CARE, and Neighbor to Neighbor, as they address lower - income needs not met by private development. Funding for housing is particularly appropriate for moneys made available by the Department of Housing and Urban Development. CARE. Sister Mary Alice spoke on behalf of CARE. CARE is requesting $45,000 to aid in its purchase of land close to Rolland Moore Park for low-income families and senior units. CARE's Board has encouraged development of affordable housing for seniors as well as families. The land cost is $345,000; $300,000 is available from CDBG, and the remaining $45,000 could be made available from the flood recovery funds. Priority would be given to flood victims who meet the CARE housing criteria. CARE could have acquired less expensive land outside of the city, but the location would have presented transportation problems for the residents. The proposed location is more centrally located; residents can benefit from the proximity of services. The Senior Center is very close to the senior housing. The cost per unit is inflated by the need to use some of the acreage for nonhousing functions, such as streets and detention pond. This results in higher -than -usual costs, as demonstrated by the following cost -per -unit comparison for CARE projects: CDBG Commission Meeting--,,Ainutes April 9, 1998 Page 2 Greenbriar, $3,294; Swallow, $5,228; Eagletree, $4,167; the proposed project, $6,900. In response to a question by the Commission, Sister Mary Alice stated that the project will serve residents in the 30-40 AMI range. Neighbor to Neighbor. Mr. Rusty Collins spoke on behalf of Neighbor to Neighbor. Mr. Collins informed the Commission that the $145,000 of CDBG funding originally slated for the rehabilitation project has been used for down payment on an eight- plex unit. The down payment is used in conjunction with an attractive loan package from Funding Partners. Four of the units would be rented at $350/month and remain in Neighbor to Neighbor's stock as permanently affordable. The remaining four units would be sold as affordable units. The units would be offered at market rate, $67,000 each; Funding Partners would provide, on paper, $13,000 or 20 percent of the price. The family purchasing the unit would need no down payment nor mortgage insurance and would buy the unit for $54,000. A family at 35 percent AMI would thus qualify for ownership. Flood victims would have highest priority for all units. The 20 percent provided by Funding Partners would be realized upon eventual sale of the unit. Those proceeds would be returned to a limited partnership community pool to be recycled for affordable housing. Mr. Collins requested that the Commission recommend $70,000 for funding this project. If the building is not acquired by Neighbor to Neighbor, it will probably be purchased by private concerns and rented for approximately $700/month. Additionally, should Neighbor to Neighbor acquire this property, it could be closed by the end of the month and the units made available almost immediately. Without the $70,000 funding, the four rental units would rent at $450/month. In response to questions by the Commission, Mr. Collins reiterated that the four rental units would remain affordable in perpetuity; however, he cannot promise that the units for sale can remain permanently affordable. Mr. Waido added his understanding that any appreciation in the property would be realized by both the family and Funding Partners. Funding Partners would roll their appreciation back into the unit to keep it affordable. In response to further questions, Mr. Collins stated his understanding that with a 20 percent down payment, mortgage insurance was not needed on the units. The units are all in good shape; an application is being made in the upcoming CDBG funding year to do some touch-up rehab. No handicapped units are available. The total purchase price is $430,000, or approximately $53,000 per unit. The appraisal is in progress, but it is anticipated to come out at about $467,000. All units are two - bedroom, 800 square feet. Mr. Collins further stated that Funding Partners is contemplating a six-month bridge loan in the view that the four units for sale would be sold within six months of CDBG Commission Meting Minutes • April 9, 1998 Page 3 closing. Seven of the eight units have leases that expire in the summer, so those units would be available at that time. Funding Partners is a CDC initiated by Fort Collins, Loveland, and Larimer County to provide gap and other financing to allow these types of projects. It is a partnership of cities, businesses, and CSU that provides financial expertise. Housing Authority. Shelley Stephens spoke on behalf of the Housing Authority. Ms. Stephens is requesting $165,000 of flood recovery funds for down payment assistance for low-income households, specifically targeting the Via Lopez project. Via Lopez is a home ownership project with $375,000 funding by CDBG with 33 single-family dwelling units. Ownership is by fee simple mortgage. She also requested that the HOME funds spent for flood victims be replenished in order to aid families further. The Housing Authority realized that the original request of $511,000 far exceeded the available funding. The Housing Authority is working with Neighbor to Neighbor to do application screening in regard to Via Lopez. Several interested buyers are flood victims. Therefore, the Housing Authority is requesting $220,000 to be made available for HOME down payment assistance for Via Lopez and other affordable housing. Families may also receive assistance from RCC. CHFA has a 6.95 percent loan program for first-time homeowners, with 4 percent down payment assistance, or a 6 percent program for families providing 3 percent down. That 3 percent can be met with HOME assistance. The Via Lopez project is targeting 40 to 60 percent AMI, or $18,000-20,000/year. In addition to CDBG, the project is receiving subsidy from the State of Colorado and Federal Home Loan Bank of Topeka. Water Board. David Frick spoke on behalf of the Water Board. The Water Board was asked for assistance in optimal expenditures for flood mitigation after the initial CDBG recommendation. The Water Board focused on improvements to the New Mercer Canal. This canal captures much of the Avery area runoff and diverts it to Spring Creek, and improvements would help reduce flooding in that area. After exploring alternatives, the Water Board's recommendation is to enlarge the Avery Park pond, allowing considerably more storage water in the area, reducing the release rate into the canal. This procedure is expected to dramatically reduce the frequency of water overrunning the canal, which is the primary cause of the area's chronic flooding. In response to questions from the Commission, Mr. Frick, City staff members, and Avery neighborhood residents stated the following: The ditch can currently be overtopped in a two-year rainstorm; the proposed action would improve that performance to a 25-year event. The July'97 flood far exceeded CDBG Commission Meetir, linutes April 9, 1998 Page 4 that amount. The pond enlargement is part of the overall flooding solution for the area. The improvements are in the long-range plan but would not be accomplished for another 10 to 20 years; $27 million of work is slated for that flood basin. Flooding in the area affects half a dozen homes on a routine basis. From 90 to over 100 houses were affected during the July `97 flood. Multifamily units are affected as well; 32 units in Woodbox were damaged. Increased homeowner fees can be used for funding as well, but that affects housing values and affordability. The present fees are used to pay off debt service and pay for improvements south of Prospect; improvements must start downstream and work up. Other upstream projects, in other neighborhoods and bridge crossings, must be accomplished as well. The pond improvements would enlarge the pond footprint to the west. The City owns the land, so right-of-way purchases are not needed. Funding sources other than the flood recovery moneys are not being considered for this project. Spending the money within 12 months for this project presents no problem. Average fees for a homeowner in an 8600 square -foot single-family house is approximately $3.58. The pond has been silted in considerably due to the flooding. The City is working to restore it as a natural area. The enlargement of the pond would be accomplished in concert with Natural Resources expanding the natural sanctuary. The problem presented in this area is comparable to the Old Town basin, because both areas are older and need more expensive, retrofitted improvements. Avery Park Neighborhood. Dave Baumgardner spoke on behalf of the Avery Park Neighborhood Leadership Team. The Team fully supports the funding request for the project. Unfortunately, the cost structure for the initial CDBG recommendation was not appropriate for the proposed improvements. The Team feels that the present proposal is doable and the correct course of action. Mr. Baumgardner stated that the proposed funding is geared to fixing a problem. All the programs presented are legitimate and worthwhile, but address programs after the flood occurs. This proposal addresses elements of the original $40 million request to HUD, i.e., flood mitigation. In response to questions from the Commission, City staff members stated that a smaller funding package would result in a smaller project. In the event of reduced HUD funds, either the project would be smaller or alternative funding would have to be found. The neighborhood feels a certain sense of urgency due to the likelihood of continued flooding and the effect of excess neighborhood drainage cascading to other parts of the city, such as CSU. The neighborhood has not discussed fee raises at present, although fee raises are expected. The problem is exacerbated by CDBG Commission Aing Minutes • April 9, 1998 Page 5 newer neighborhoods to the west with their mandated more sophisticated drainage solutions adding water to the Avery neighborhood downstream. Frank Oss of the Avery Park neighborhood related his experience of the New Mercer Ditch flooding his back yard, crawl space, and neighbors' houses. His property was devalued, and the same thing could happen this summer. Mr. Oss stated that although he did not have statistics readily available, his home and others' homes are threatened, and they have a sense of defensiveness, anxiety, and urgency. Resource Coordination Committee. Tess Heffernan spoke on behalf of the Resource Coordination Committee. The Committee is a group of community members, representing a number of different foundations, working to coordinate donations and provide case management to flood victims. The Committee has been working with the various applicants to try to find consensus for the amounts requested from the grant. Ms. Heffernan posted a list demonstrating a common ground of approximately $636,000 that the various applicants had acquiesced to in reducing their programs. Mr. Collins noted that, based upon re-evaluation, the Neighbor to Neighbor counseling request had been trimmed from $65,000 to $50,000. In response to questions by the Commission, Ms. Heffernan stated that other funding sources had potential, such as the Coors Foundation. Such other sources are problematic at present. There were no other speakers. Ms. Sample closed the public comment session of the meeting. The Commission engaged in the following discussion and courses of action: Amount to be disbursed - $511,740. Amounts requested at the public hearing: CARE $ 45,000 Neighbor to Neighbor 70,000 Housing Authority, Via Lopez 165,000 (down payment assistance) Avery neighborhood improvements 327,000 HOME 56,000 (fund replenishment) Concerns expressed by Commission members during the course of discussion: CARE is already receiving significant CDBG funding. Balancing needs to be accomplished between housing needs and flood relief and mitigation HUD money was specified for improvements CDBG Commission Meeting ..iinutes April 9, 1998 Page 6 Many applicants frequently receive CDBG funding; Avery neighborhood does not. • Other funding is available for housing; flood relief/mitigation funding is more limited. Funding Avery neighborhood improvements is a high priority. Funding down payment assistance (Housing Authority and/or HOME) is needed to provide for flood -displaced persons. • Storm water improvement is needed to relieve chronic flooding in affected areas. • Due to the difference in amounts requested and amounts available, reduced awards, at best, should be expected by any applicant. Staff comments in response to Commission questioning. Reduction in the amount to Avery neighborhood improvements would result in either a smaller project or reliance on other funding sources. Construction on the project is to begin next fall. The existing surplus for the Avery neighborhood project has already been earmarked. The $56,000 for HOME is to replenish funds that were used specifically for relief for flood victims at higher -than -normal limits. The new HOME funding cycle begins in October. The Via Lopez project is slated for completion in late July or August. Mr. Rusty Collins comments in response to Commission questioning: Lowering the Neighbor to Neighbor amount to the $45,000 range would increase the rental units from approximately $350 to $380; would increase the AMI target by about 3 percent, to 38 percent AMI. The funding has no bearing on the home ownership element of the proposal. The Neighbor to Neighbor project is giving priority to flood victims. Motions by the Commission during the course of discussion: Moved by Mr. Gordon: To recommend funding of $300,000 to improvements in the Avery Park neighborhood. Motion failed for lack of a second. Moved by Mr. Steff es, seconded by Mr. Majerus: To recommend funding of: Neighbor to Neighbor, $70,000; Housing Authority, $165,000; HOME, $56,000; Avery Park, $220,740. Moved to amend by Ms. Coxen, failed for lack of a second: To encourage Neighbor to Neighbor to pursue Coors Foundation funding; any Federal funds released by such funding be applied to CARE. Motion failed, 4-5. Final group of motions by the Commission: Moved by Ms. Coxen, seconded by Mr. Gordon: To recommend funding of: Housing Authority, $165,000; Avery neighborhood improvements, $327. CDBG Commission Sing Minutes • April 9, 1998 Page 7 Moved to amend by Mr. Steffes, failed for lack of a second: To recommend the remaining funds be applied to down payment assistance. Amended by Ms. Coxen, with consent of the second: Housing Authority, $165,000; Avery neighborhood improvements, $300,000; Neighbor to Neighbor, $46,740. At the suggestion of Ms. Guthrie, with the consent of Ms. Coxen and the second, the motion was amended to read: To recommend funding of: Neighbor to Neighbor, $70,000; Housing Authority, $141,740; Avery neighborhood improvements, $300,000. Moved to amend by Mr. Gordon, seconded by Mr. Steffes: To reduce the recommended funding to Neighbor to Neighbor to $46,750 and Housing Authority, $141,000; and HOME, $23,260. Motion to amend passed, 6-2. At the suggestion of Mr. Steffes, with the consent of Ms. Coxen and Mr. Gordon, the motion was amended to recommend to City Council that the remaining $27,000 needed for Avery neighborhood improvements be found in general fund moneys. Final motion, with approved amendments To recommend funding of: Housing Authority, $141,000; Avery neighborhood improvements, $300,000; Neighbor to Neighbor, $46,740; HOME, $24,000. Further, to recommend to City Council that $27,000 be appropriated from another source, such as general fund moneys, to provide complete funding for the Avery neighborhood improvements. Motion passed, 6-2. OTHER BUSINESS: Ms. Sample distributed a proclamation from Mayor Azari concerning Community Development Week. Attendance and voting by proxy, telephone, or electronic means. Carrie Daggett of the City Attorney's Office advised the Commission on the following aspects of the discussion item: A proxy vote, where a representative of a Commission member attends with specific voting instructions, would not be permissible. The duties of the Commission members in listening to presentations and debating issues is not delegable. Proxy voting is customarily found in corporate board settings rather than commissions. Telephone attendance is used on occasion in different forums. Attendance needs to be by speaker phone to provide appropriate interaction. Sometimes visual CDBG Commission Meeti. Minutes April 9, 1998 Page 8 aids are discouraging for audio -only attendance. This is a policy decision for the Commission. If the Commission is interested in attendance by telephone, it should address its request to the City Council through the City Clerk's office. Approval would probably be dependent on the specific conditions of the meeting. Attendance is subject to the Open Meetings Law, which has certain limiting factors. Audio -only attendance would also tend to reduce the quality of the public nature of the proceedings. Mr. Waido presented Staff's position as opposed to proxy voting. He noted the discussion that ensued on the flood recovery funds that would have made a proxy vote ludicrous. In regards to attendance by teleconferencing, he stated that the following year's agenda was sent in September; while there may be unforeseen circumstances, the likelihood of having sudden emergencies so as to frustrate a quorum was unlikely. Although Staff was not opposed to phone conferences in limited circumstances, it was felt that meetings lasting several hours could be attended personally more easily than by phone. Ms. Coxen noted the acceptability of attending by phone in present corporate settings. In an electronic age, there are reasonable alternatives available when a Commission member cannot attend personally. She clarified that her prior suggestion of a proxy vote was in the realm of trusting the proxy to conduct voting using best judgment, rather than being locked into a predetermined position. Other Board members expressed their preference for personal attendance at the meetings. Ms. Sample noted improved attendance since the discussion arose. Ms. Daggett further noted that although Council members may participate by telephone, this has not yet been done. Such a problem is generally in City-wide disfavor. HOME report Julie Smith reported on this item. Approximately $25,000 of program income has been realized from property sales and represents the only change in the report. This figure could expand to $50,000 over next year. Ms. Smith recommended that these funds be reprogrammed to their original intent, which is homebuyer assistance. Ms. Smith noted that applicants have requested over $500,000 in construction acquisition; Staff is proposing a budget level of $200,000 for acquisition. In response to questions by the Commission, Ms. Smith stated that approximately $40,000 is represented in personnel costs. That is contained within the 10% maximum administrative line item, along with such items as homebuyer classes and environmental statements. An increase in administrative expense would be used on such things as environmental statements and classes as the program grows. HUD computer requirements have necessitated yearly upgrading. Many things that CDBG Commission ling Minutes April 9, 1998 Page 9 HOME presently does is not charged to the administrative budget Moved by Mr. Steffes, seconded by Mr. Majerus: To accept the proposed HOME budget, with program income allocated to homebuyer assistance. Motion approved unanimously. TRAC Update Mr. Waido informed the Commission that the Housing Authority purchased the promissory note from First National Bank and has begun foreclosure proceedings. TRAC has 45 days to cure the debt. TRAC is negotiating funding from a Wellington bank; Staff has concerns with the manner in which that funding may be proceeding. The loan would be at 9.5%, with a three-year balloon. TRAC would use the loan as a bridge loan and find lower interest rates once the project is closed. The Housing Authority has access to 6.9%, or possibly 6.0%, funding. If TRAC closes the project, the present tenants would not be considered first-time homeowners for homebuyer assistance programs. Ms. Daggett further mentioned that the Housing Authority is searching for resolution in ways other than foreclosure, but a meeting of the minds between the parties may not occur. Bylaws Mr. Waido distributed the CDBG Commission bylaws. The City Clerk's Office has requested review and suggested changes of bylaws from its assorted boards and commissions. Moved by Ms. Coxen, seconded by Mr. Steffes: To refer review of bylaws to committee. Ms. Coxen and Mr. Steffes will coincidentally sere on that committee. Motion passed unanimously. Applications Mr. Waido noted that Staff has received 32 requests for funding, totaling $4.7 million. $1.4 million is available in CDBG funding, and $200,000 available from HOME. Mr. Waido reviewed the upcoming interview process; five minutes for presentation and ten minutes for questions and answers. The following meeting, set for one or two evenings, will be the appropriate time to bring the applications as scored by Commission members. It was noted that these scores are a guideline to begin discussion and not binding in any way. Conflict of interest Ms. Coxen noted that Jason Meadors, who reports Commission meetings and produces the minutes, appears on the DDA application. She inquired whether the situation constitute a conflict. Ms. Daggett stated that the situation was unusual. She CDBG Commission Meeting „Ainutes April 9, 1998 Page 10 will review the matter and report to Staff. Upon motion to adjourn by Ms. Coxen, approved unanimously, the meeting adjourned at 9:20.