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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 05/03/1995CDBG COMMISSION MEETING MINUTES May 3, 1995 The meeting of the CDBG Commission began at 5:55 p.m. in the Ludlow Room of the Lincoln Center, Fort Collins, Colorado. Commission members present at the meeting included Chairman Linda Coxen, Bill Bertschy, Jim Elias, Bobbie Guye, Dan MacArthur, Tim Ostic, Richard Ramirez, William Steffes, and Joe Zimlich. Staff members present included Ken Waido, Jackie Davis, and Mary Hile. PRESENTATIONS City of Fort Collins - CDBG Administration; $103,000. PA1. Ken Waido presentation. Mr. Waido noted that this year's request was 3 percent higher than last year's. 20 percent of CDBG funds may be used for administration; this request represents 9 percent of funds. Historically, the percentage of funds used for administration has been decreasing. In response to questions by the Commission, Mr. Waido stated that: all personnel costs were included in the figure, including benefits; the 3 percent increase was gleaned from Human Resources Department; salaries are determined by a comparison survey from other Front Range cities. Project Self -Sufficiency of Loveland -Fort Collins - $25,000. PS6. Mary Cosgrove presentation. Ms. Cosgrove reviewed the goals of Project Self - Sufficiency for new Commission members. $15,000 of the grant would allowed continued services; $10,000 is requested to increase the program size by adding, in conjunction with other grants, a new staff position to the program. John Kefalas spoke of the experiences of two clients of the program who are successfully attending or completing postsecondary education. Ms. Cosgrove spoke further of the car repair program and children's participation program. In response to questions by the Commission, Ms. Cosgrove and Mr. Kefalas stated that: Mr. Kefalas has a caseload of about 30 families; referrals come from word of mouth and such places as the Women's Center and Job Service Center; that the $10,000 requested of CDBG, combined with the $5,000 requested from Loveland CDBG, would enable a 30-hour-a-week staff member, but does not include benefits; the case worker would need to spend more time in Fort Collins than Loveland; office space and some supplies are donated; travel for caseworkers is reimbursed; the waiting list is presently 30 families. The Resource Assistance Center for Nonprofits, Inc. - CHDO - $18,900. PA2. Lou Stitzel and Larry Dunn presentation. Ms. Stitzel distributed a handout outlining the points in her presentation. "Affordable housing" would mean a client base of 80 percent or less of median income, and no more than 30 percent of CDBG Commission Minute_ May 3, 1995 Page 2 gross income used for rent or house payment. Ms. Stitzel spoke of: the need of affordable housing to "retain" as well as "maintain'; the importance of developing community/neighborhood groups; sustaining housing as affordable to get value for the investment. Ms. Stitzel outlined income gaps shown in her handout. In response to questions by the Commission, Ms. Stitzel stated that: The CHDO application for $18,900 is for two ten -unit projects. The square footage on the units: three -bedroom, 1040 square feet; four -bedroom, 1412; five -bedroom, 1630. Administrative dollars are hard to come by, but administration has only been 3.4 percent of budget, with plans not to exceed 4 percent for the next two projects. $18,000 of the $94,000 application is for administration costs. Those costs are included in the total project costs. In response to questions by the Commission, Mr. Dunn stated that land has not yet been acquired for the project. 400 acres may soon be donated. If that donation falls through, Mr. Dunn is over 50 percent sure that other land could be found within 18 months. Ms. Stitzel noted that tax credits are available because they are a nonprofit enterprise zone business. If donations are received, they would go to building more units to meet the area's needs. The Resource Assistance Center for Nonprofits, Inc. - $100,000. HA2. Lou Stitzel presentation. Ms. Stitzel stated that this grant would be earmarked for development fees to proceed on two ten -unit developments. Discussion was held on the cost per unit. Ms. Stitzel stated that the $900,000 for ten units included training costs that should be subtracted, for a cost of $45-50 per square foot for construction. Ms. Stitzel will check the figures on Page 4, 3(e), and contact Ms. Davis. The San Cristo project came in with lower costs, at $38 per square foot. On Page 5, the $1,847,000 figure should be corrected to $1,817,000. No HOME grants have been applied for yet; they must be site -specific. Several banks and the Federal Home Loan Bank Board are expected to be funding sources, so lack of HOME funding does not create a problem. The projects will have four three -bedroom units; four four -bedroom units; and two five -bedroom units. $440,000 will come from selling mortgages. The other $996,000 will come from grants, discounts, and rebates. Mr. Dunn will break out those sources. Funding sources are HOME, CDBG, development impact fees, Kellogg grant, and Colorado National Bank. Default insurance and a three-month escrow is covered by the mortgage payments to allow the client families to begin their climb up Maszlow's hierarchy of needs. Further discussion was held on cost per unit and square foot. Commissioners calculated cost at $70/square foot, for all costs. Mr. Dunn stated that they had not calculated in that fashion. In discussion, the Commission asked the applicants to submit cost estimates per square foot in two ways: including all costs; and CDBG Commission Maes May 3, 1995 Page 3 backing out administration costs. Ms. Stitzel noted that they were the only home ownership program for families in the 30 to 60 percent category. City of Fort Collins - Land Acquisition AQ1. Ken Waido presentation. Mr. Waido been considered by staff long ago but competing with other entities for CDBG mo made for the City to participate in affor decided to submit a grant. for Affordable Housing - $500,000. explained that this type of grant had that Council had resented the City neys. Now that suggestions had been dable housing endeavors, staff had The application is for acquisition of property to be used in alleviating the Pioneer situation. After research, staff decided to concentrate on smaller parcels scattered throughout the city. At this time, it appears the funds being requested would be used for a 4.5-acre site. The City would purchase the property and send out an RFP for a developer to assist with affordable housing. In response to questions by the Commission, Mr. Waido outlined the means by which CDBG regulations would be followed in acquiring property. The time frame involved: Council decision in June; RFP advertised in July; study proposals August and September; be prepared to move forward in October when funds become available. Using SID properties would be difficult, as the City cannot use CDBG funds to repay itself. Ultimate land ownership for the purchased parcel is undefined as yet. Restrictions would be attached to ensure that housing is, and stays, affordable. The application is a response to some public comments that the City should be in the land provision business. The City as an entity would compare favorably with another housing entity, as it already has administrative costs covered. It is unknown if Council will support the proposal. The affordable housing fund is earmarked for rebate programs and is not available for this project. HOME funds would be available. Fort Collins Housing Authority - Special Request for Set -aside - $300,000. AQ2. Shelley Stephens presentation. Ms. Stephens noted that a parcel had not been identified. Mayor Azari has asked the Housing Authority to become a lead entity in response to the Pioneer situation. Ms. Stephens asked the Commission to consider $300,000 as a fund to acquire property to deal with the Pioneer relocation. In response to questions by the Commission, Ms. Stephens stated: The dollars will be necessary to maintain an affordable component for park residents; 180 homes have been identified, with other nontraditional means of housing residents not yet enumerated; the Donaldsons will spend between $8,000 and $12,000 an acre, but are encountering problems when they view land of having the land price suddenly rise; this application does not look at relocation costs. In response to further questions, Mr. Waido and Mr. Stephens stated: About 35 percent of the city is undeveloped; first preference for location is within city limits, CDBG Commission Minutr, May 3, 1995 Page 4 with second option being within the Urban Growth Area; the Housing Authority currently has a waiting list of 2500 households, and has been asked to take the lead on resolving the Pioneer situation; and that a perpetuity mechanism for affordability should be built into whatever is ultimately acquired to resolve this issue. Fort Collins Housing Authority - Acquisition of Existing Apartment Complex - $2000000. AQ3. Shelley Stephens presentation. The Fort Collins Housing Corporation wishes to purchase an existing apartment complex of 24 one- and two -bedroom units. Being under the Housing Corporation, they would not fall under the auspices of the Federally mandated waiting lists. Minimal rehabilitation is required. In response to questions by the Commission, Ms. Stephens and Mr. Waldo stated: The apartments will be made disabled -accessible as vacancies occur, at levels beyond the ADA guidelines. Larimer Home Improvement Program and architectural barrier removal moneys are available for rehabilitation. Some Pioneer residents may take precedence over the Housing Authority waiting list as the building would be under the Housing Corporation ownership. Students presently occupy most of the units. No forced vacancies would occur. Existing leases will be honored. The current owner's name can be made available. An appraisal will be done on the property; a donation for below -market sale, with resulting tax benefit, is contemplated. The seller will hold the paper. Note terms will be competitive with bank rates. No existing use is being changed, so it is not subject to PUD process and neighborhood concerns. Vacancies will occur through attrition. The CDBG expense of $454,000 is for acquisition of the Myrtle and Hillcrest properties. Ms. Stephens will provide a breakdown for the next meeting. Ms. Stephens stated the following in response to later questions by the Commission: Renewal of present leases would be allowed indefinitely. Renewals would be regardless of whether the tenant met low-income eligibility. The building would not be under HUD mandates. Rents would be reduced to meet affordability criteria, set by the corporation board, for eligible tenants. If the building is sold to a private owner, market -rate rents could be charged. Ms. Stephens commended Holly Sample for her cooperation in allowing Ms. Stephens to speak with classes at the high schools concerning independent living for challenged students. Fort Collins Housing Authority - 1300 Block, West Swallow Road - $120,000. A04. Shelley Stephens presentation. Using $100,000 of unused funds from the prior year and this grant, the Housing Authority contemplates purchase of a three - acre parcel, for 56 units. The current seller would take the property through final PUD. In response to questions by the Commission, Ms. Stephens stated: Generally, two -bedroom units are 700-750 square feet; three -bedroom, 800-1100. Due to the diverse nature of three projects, the Housing Authority could process all three CDBG Commission Mees May 3, 1995 Page 5 at the same time. The Housing Authority has its own general contractor on staff. Engineering and architectural would be bid out. Ms. Stephens will provide a detailed budget for construction costs. Neighbor -to -Neighbor, Inc. - Acquisition of Real Property - $185,000. AQ6. Rusty Collins presentation. Mr. Collins gave an overview of the Neighbor -to - Neighbor program and its role in transitional housing. It currently manages 20 units in Fort Collins. The transitional program is designed to take a family from homelessness through a continuum that includes counseling and training, resulting in permanent residence. Mr. Collins cited an example of a woman who in two years went from homelessness to finishing her degree and applying for law school. In 1994, 42 families, representing 168 people, were supported through the 20 units. The average wait for emergency housing is two to six weeks. The wait for the long-term program is up to six months. There has been no vacancy for three years. Mr. Collins read quotes from a CHAS document endorsing the need for transitional housing and Neighbor -to -Neighbor's competence in meeting that need. In response to questions by the Board, Mr. Collins stated: The HOME application is being written and has not been submitted. The items of case management, counseling, and administration that comprise the difference between the budgeted cost and the application amount will be submitted to the Commission in writing. There are prospects for a sites being developed. One resident manager oversees the 20 units. The price of the prospective properties are close to market rate; Mr. Collins feels that with offering tax breaks, property can be obtained for $180,000. Neighbor-to-Neighor, Inc. - Comprehensive Housing. Counseling - $58,700. PS7. Rusty Collins presentation. In 1994, 1501 people were counseled, an increase of 14 percent from 1993. If the current rate continues for 1995, almost 2100 people will be seen, a 28 percent increase from 1994. Mr. Collins summarized the counseling programs: homeless prevention for people facing eviction or foreclosure; damage deposit program; housing counseling; three mortgage counseling programs; down payment assistance; and a home -sharing program to match single families moving out of transitional housing. Mr. Collins summarized the changes that have occurred with Neighbor -to - Neighbor in reestablishing the Board and automating the office. The request has been increased from $39,000 to $58,000 to staff a new housing counseling position to cope with the increased demand. CDBG has been supportive of Neighbor -to -Neighbor in the past, particularly with the Rosetree Village project. In response to questions by the Commission, Mr. Collins stated: If grants exceed the funds needed, Neighbor -to -Neighbor would probably look to acquire more units. The retirement and fringe benefit figure, at 15 percent, is low because of offsets from United Way funding. The new counselor position would be a full-time CDBG Commission MinutE- May 3, 1995 Page 6 housing counselor. The CDBG grant applied for would pay 40 percent of that position. Loveland CDBG has granted $9,000 for the Loveland office. The wages cited are comparable to positions within the nonprofit arena. Some counseling is done by phone; statistical breakdowns are available on types of counseling. The need for another counselor is distributed among all the services provided. Data collection methods have not changed since Mr. Collins came to Neighbor -to -Neighbor. The fund-raiser was successful and will probably net $12,000. CARE Housing - Acquisition of Land/Development Costs - $280,000. AQ7. Sister Mary Alice, Myra Powers, and Terry Wall presentation. CARE is concerned about building affordable housing, strengthening families, and advocating affordable housing. CDBG helped CARE complete the 40-unit development at Greenbrier. CDBG has helped with acquisition for another CARE project of 40 units in the south end of the city. Another 50 units may be built in collaboration with the Housing Authority. $20,000 is being applied for development of water and sewer. $260,000 is being requested for the next project, CARE Housing North. Negotiations are being held with local developers for a property. The average income of CARE clientele is $16,500 per household, or 40 percent of median income. CARE has improved its financial picture tremendously and has raised $10 for every $1 of CDBG money spent. The tax credit partnership is presently the most effective structure for helping the income levels that CARE deals with and providing seed money for future projects. In response to questions by the Commission, the applicants stated: The loan receivable asset of $1.2 million is a second mortgage loan made to CARE Housing at a below -market interest rate. On the partnership books, it is shown as a liability. The limited partnership owns the property. There is an option to purchase back at 15 years in the future; the project must then stay affordable for 15 years following the purchase. The 3.3 percent of salaries and wages are out of the total revenues. That figure covers 3.5 positions. The Housing Authority partnership is to buy a three -acre parcel adjoining the parcel that the Housing Authority is attempting to purchase. CARE found the property but could not afford all six acres; by entering into cooperation with the Housing Authority, the units being made available on those two parcels may be more than doubled. There will be shared resources, such as a community center, detention pond, and maintenance, to reduce expenses. The cost per unit is $62,500. Square footage is 768 square feet for a two - bedroom; 888 for three -bedroom. Costs may be saved by beginning construction on both projects at the same time. If groundbreaking occurs in the fall, the project may be finishing by July or August of 1996. Mr. Wall feels that funding can occur within that time. If funding does not occur, the project could still be started with the HOME grant or tax credit money, . -* CDBG Commission Mees May 3, 1995 Page 7 If CARE can continue to build four to eight units a year, within a three- to four- year period, the cash flow may result in enough seed money for CARE to begin projects on its own. Within the limited partnership, $200,000-300,000 of reserves exist for unforeseen problems. New moneys coming in would go to capital projects rather than operating expenses. Mercy Housing Colorado - Acquisition of Land - $200,000. AQ5. Applicant did not appear. Meeting concluded at 8:50 p.m.