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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 06/13/2002CITY OF FORT COLLINS COMMUNITY DEVELOPMENT BLOCK GRANT Meeting Minutes June 13, 2002 Phil Majerus, Chair Terri Bryant, Vice Chair Bill Bertschy, City Council Liaison Chairman Phil Majerus called the meeting of the Community Development Block Grant Commission to order at 6:40 p.m., at 281 North College Avenue, Fort Collins, Colorado. Board members present included: Chair Phil Majerus, Bob Browning, Linda Coxen, Vi Guthrie, Dennis Vanderheiden, and Billie Rosen. Not present: Terri Bryant, Brett Hill, Tia Molander, Jennifer Molock, and Cheryl Zimlich. Staff present: Ken Waido, Maurice Head, Heidi Phelps, and Julie Smith. APPROVAL OF APRIL 2002 MINUTES Moved by Ms. Coxen, seconded by Mr. Browning: To approve the March 7, April 3, April 4, and April 11, 2002 minutes. Motion approved unanimously. UPDATE ON RIGDEN FARM Housing Authority report by Julie Brewen and Kimberly Stimberg. Rigden Farm was an example of a nice, textbook project, with mixed housing types, mixed income levels, and the presence of market rate units to offset the prices of affordable units. The risk position went back and forth with Sierra. The real estate community had concerns related to higher -end products ($160,000- 190,000), in that people have choices in that price range and could purchase units without strings attached. Further concern was that people would not want to buy a unit with deed restriction and the cap that is entailed. The Housing Authority felt that it needed to be responsible with public money. It made the decision to hold back, review the issues, and as a result, ultimately asked Sierra to step up and assume more of risk. A sizable tax deduction was involved for separate action. By March, the Housing Authority could not close without resolution of outstanding issues, and Sierra lost the contract. All entities are assessing issues, needs, and the market. Sierra is attempting to get the land back under contract, but costs have risen. The Housing Authority is trying to determine where best to use the money and is reluctant to mingle its resources with the private sector. The Affordable Housing Coalition has discussed deed restrictions. A product must be 20-25% below the market to succeed with deed restrictions. A focus Community Developmen, —iock Grant Commission Meeting of June 13, 2002 Page 2 group was formed, consisting with various realtors, government employees, and housing providers. Although there is a shortage of product, that is not the primary outstanding issue. Families particularly want single-family homes with a yard and a fence. If they have a choice of buying a condo instead of house, they will often continue with rental. The Housing Authority specifically requests the Commission to continue funding down payment. The issue with Rigden Farm had nothing to do with the Housing Authority's capacity. All players need to continue to look at the changing market and changing needs and how public money is being spent. Mr. Waido noted that some techniques to protect public investment in affordable housing obviously are not working. The Homebuilders Association was challenged to offer workable proposals that provide product as well as protect the public investment. The deed restriction on equity is not workable without a very low sale price. The Oregon and Boulder propositions have been studied without real hope of success. The City would like input from the private sector on workable solutions. Perhaps money can go for down payment, go to the buyer, and bypass the builder. These are the same issues that were seen with the proposal brought forth by Jon Prouty. A clear explanation was lacking on how the subsidy does not result in lowered cost of housing. In discussion by the Commission, it was explained that the Housing Authority had tried to entice Sierra Land Corp. into participating in a charitable effort. Another entity has title to the Rigden property, and Sierra had the contract. Issues were not resolved, leading to loss of the contract. Other comments: An appreciation cap is unworkable. An extremely low interest rate may work better. Realtors would steer clients away from an equity cap. If a workable solution is found and can be persuasive to realtors, they would be very effective proponents of such a solution. When an equity -capped house can only be sold to other qualified buyers, if the interest rate has risen in the meantime, the concept becomes untenable. The Housing Authority, with Rigden, tried to construct a model that would work, incorporating everything it wanted to do in Fort Collins, with a mix of all elements. The attempt came very close to fruition, and all parties were very upset when it did not happen. Problems with the present deed restrictions: No one can tell what interest rates and the market will do, and those have profound impacts on deed restrictions. Lagunitas provided an example of questionable effectiveness. If a family can Community Development iock Grant Commission Meeting of June 13, 2002 Page 3 qualify for a loan related to the affordable housing in that development, it could probably qualify for a market -rate home; and the market -rate home will not cripple or hinder the home owner with ability to resell or a reasonable return on investment. The money that is realized by CDBG is reprogrammed. Most of it will go to the fall cycle for such applicants as the Housing Authority. There is an ongoing need for affordable housing, with the ongoing flux in the marketplace, the Housing Authority does not wish to be penalized for protecting the money. Oregon and Boulder are trying to accomplish their goals through deed restrictions. Every community has a different market and different needs. Deed restrictions may work for a community such as Boulder and not work in Fort Collins. Fort Collins has not reached a point of critical need yet. It is difficult to plan for all the possibilities that may arise from market dynamics and city planning. The Housing Authority Board is concerned with the public response to this circumstance. The project is still proceeding without the same elements in place. The Board will do its best to keep all parties updated. It is problematic what the Coloradoan response may be. It was suggested that the Board be proactive with the story. It was noted that all parties pursued this project in good faith; but without some critical questions being answered comfortably, the Housing Authority had to withdraw. A charitable contribution was sought without the involvement of an LLC, but the Housing Authority would end up with all the risk — an unacceptable situation. Staff noted that the Housing Authority did a fine job of keeping all affected interests informed as developments with the Rigden project unfolded. UPDATE ON SLEEPY WILLOW Ms. Brewen, of the Housing Authority, reported. The project is closing on Monday for 95 units. There was not a need for substantial rehabilitation. The Authority may return to request $60,000 spent on development costs. Ms. Phelps informed the Authority that those funds cannot be awarded in hindsight. DEBRIEFING OF THE COMPETITIVE PROCESS Mr. Waido solicited feedback from the Commission. Is there anything that needs to be looked at with the application form, the procedures, or any other aspect? How did the last cycle go? Do things need to be changed? Community Development .,lock Grant Commission Meeting of June 13, 2002 Page 4 It was noted that while the questions on the application are not redundant, the answers provided by applicants often are. Can the questions be rephrased to avoid redundant answers? Mr. Head noted that the technical assistance phase is helpful with this issue. Mr. Waido stated that the next cycle is strictly housing, so fewer applications are expected. A HUD requirement exists to get feedback from the families, and that is noted in the application form. It was stated that HUD should require input from neighborhoods as well. Neighborhood meetings are required for the City process. It was suggested that a cost per unit measurement be included with the analysis of public service applications. Different cost levels were discussed. Staff will attempt to put this figure on its pro/con analysis. Presently, Staff does rough figuring to aid the Commission in its deliberations. Staff will look to be more consistent in that aspect. Concerns were expressed by the Commission over the 5% across-the-board reduction by Council, the cancellation of the study session, and the lack of opportunity for response at the Council meeting. It is doubtful that the work study session will ever be canceled again. The cancellation of the study session was a ..recipe for disaster' with the issues that arose at the Council meeting. At a Council meeting, the Commission is in a defensive mode, whereas in a study session, the effort is proactive and focuses on applicable facts. It is questionable whether the study session would have mattered, because the idea for a 5% cut was a surprise. The proposal was advanced and seen as a way for Council to get out of a tough political spot. The applicants did not feel that they were able to address the Council after that proposition was made, but that is an issue for the Council process. For a study session, Commission members are assigned to be the "mini -experts" for a given proposal. In a contentious situation, the person responsible for that item should have an opportunity to speak so that the person most knowledgeable about it makes the presentation. Mr. Majerus, who was present at the Council meeting, cannot be an expert on every proposal. Commission members were encouraged to attend at the Council meeting, which is where the ultimate decision is made. In prior sessions, the decisions of the Commission have nearly been rubber-stamped. The study session offers an opportunity for previewing Council thoughts. The Commission should stand fast for their opportunity for a study session. Community Development . lock Grant Commission Meeting of June 13, 2002 Page 5 Commission members felt that discussion items should not be reviewed which were not part of the application process. If it occurs, the assigned expert for that application should notify the Council. The Commission was in such a defensive posture at the Council meeting that it did not go into the facts of the application and detail each criterion to highlight the problems of the application. Opinions were offered in the following matters: In the political arena, results can be unpredictable. The Women's Center has risked a certain element of resentment from other entities by affecting other entities' funding. If the Commission is to feel required to fund groups in order for groups to receive matching income, that then becomes a de facto entitlement program. The Women's Center may have been under the assumption that any adjusted award would come from general fund moneys. Funding cannot come from housing because public service funding is a separate CDBG category. An obvious source of any excess funding would be the general fund, but those moneys were not going to be accessed for this cycle. A desire was expressed for the study session to be scheduled earlier. Council did not discuss the history of the funding levels advanced to the Women's Center historically. It appeared that certain Council members were already set on a decision and suggested that the Commission simply "find" the funding. The funding is finite; in order for the funding to be "found," it must be disallowed for someone else. There may be some resentment among other applicants who found their suggested level of funding cut as part of this political compromise. The application should indicate that prior funding does not matter to the present process. This process resulted in even the highest -rated program being cut. Suggested topic for a study session: A plan is needed if funding is cut or increased. A study session is needed to present facts; politics cannot be effectively fought at the Council session. A study session briefing is needed to alert Council of the issues involved. The information cannot be withheld prior to the study session or Council meeting. The information is public and is made available in the prior week. Upon request of the Commission, Staff agreed to draft a letter outlining the Commissions concerns and the overriding need for a study session with Council prior to the final funding decision. Community Development . lock Grant Commission Meeting of June 13, 2002 Page 6 CDBG PERIODIC REVIEW BY THE CITY COUNCIL The survey forms were reviewed. Upon questioning by the Commission, staff advised that collective responses to the questions need to be made, copied down, and submitted by July 7. The current duties are realistic. In looking at the attached City Code provisions, some of them are provided in full; some, not at all. The Commission provides recommendations and assesses community needs in the public session hearings. The referred -to programs are what Staff brings to the Commission at various times. The strategy areas are the low-income elements of the community. The BAVA area is an example. Some of the areas were eligible, if there was money committed to the project when the engineering study was done. An SID was going to be set up, and there was no way to predict that outcome; the use became ineligible. Census data will be used to identify areas of the City to enable funding for places that were not previously eligible. The program is promoted in the neighborhoods. The workload is heavy, with two funding cycles. The workload is intense for two times a year; the rest of the time is more relaxed. Meetings are canceled if there is no need to have one. The workload is about right to meet the demands of the program. There has been an increase in the workload to meet the additional funding cycle. The workload does decrease when the study session with Council is canceled, but that is a task that the Commission prefers to undertake. The goals are appropriately accomplished, barring lack of interference. Meetings are effectively conducted. The current size of the Commission is generally appropriate. The Commission seeks to achieve diversity. It lacks a good set of bylaws, which are held over from its "steering committee" days. Commission requirements call for members who are residents from strategy areas. Representation is further decided by the pool of applicants. Communication between the Commission and Council is critically affected by whether a study session takes place. Staff advised that the Commission will have a review with Council as a part of five boards and commissions that will be reviewed. Staff outlined the procedures of the review. Community Developmem dock Grant Commission Meeting of June 13, 2002 Page 7 Staff was queried as to why boards, commissions, and authorities are term - limited. Staff replied that such is the political sensibilities of the times. BAVA NEIGHBORHOOD PLAN FUNDING EXTENSION Funding was approved two cycles ago, with Council matching the funding level. The problem has been resource allocation. Mr. Waido has been bogged down in the 1-25 Plan. The East Mulberry Plan is being developed, with completion by August or September; the staffer for that plan may then be available for this project. Current policy dictates that if a program is not progressing for two years, the Commission is informed and requested, if necessary, for a funding extension. Staff requests that an extension be approved. The original award was $80,000, contingent on a matching contribution by Council, which was done. Moved by Mr. Browning, seconded by Ms. Rosen: To extend funding 12 months, with the program to show significant progress within that time. Staff advised that the contemplated staffer could start by late fall; this plan is probably a 12- or 14-month process. It could be done by early 2004. The plan is comprehensive in scope, with the affected neighborhood kept informed of developments. Motion approved unanimously. E-MAILS — "COLORADO OPEN RECORDS ACT" Public access of a -mails is at issue. The question: Are rules and regulations that apply to Council also applicable to boards, commissions, and authorities? Yes, if the subject communications discuss City issues. The public has right to ask members to show a -mails concerning Commission business. POSTERS The second round of posters has gone out, entitled "Faces of Homelessness." 750 to 800 have been distributed to the appropriate centers. The distribution is proceeding according to plan. OTHER BUSINESS The down payment program is out of money. A creative approach: Staff requests to take $120,000 in program income from HOME, match it with Rigden reprogrammed funds, and reopen the program Community Development .,lock Grant Commission Meeting of June 13, 2002 Page 8 Moved by Ms. Coxen, seconded by Ms. Rosen: To apportion $120,000 of program income from HOME, to be matched with funding reprogrammed from the Rigden project, for a total of $240,000 in additional down payment assistance funding. Mr. Vanderheiden objected on the basis that this does not address as -yet unseen future funding needs. Motion approved 5-1. Ms. Phelps reported on the Fossil Creek tour. It is proceeding with activity bonds, and the effort appears exemplary. A tour of Provincetowne will be conducted on July 10, at 10:00 a.m. Commission members were encouraged to attend. Staff noted that in the budget cuts made by Governor Owens, many nonprofits efforts got slaughtered. They will queuing up, seeking additional funding. The Division of Housing took a $3 million hit. Projects will not even be considered by that agency unless they target 30% AMI or special needs. The meeting adjourned at 6:55 p.m.