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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 06/14/2012COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION REGULAR MEETING 281 N. COLLEGE AVENUE, FORT COLLINS June 14, 2012, 6:30 P.M. COMMISSION MEMBERS PRESENT: Kay Rios, Chair Jamaal Curry Anita Basham Margaret Long Robert Browning Emily Sander Catherine Costlow COMMISSION MEMBERS ABSENT: STAFF MEMBERS PRESENT: Gordon Coombes Heidi Phelps Kristin Stephens Sharon Thomas VISITORS PRESENT: Bill Reinke, Executive Director, CARE Housing Kristin Candella, Incoming Executive Director, Fort Collins Habitat for Humanity Ray Roth, Citizen CALL TO ORDER: The meeting was called to order by Chair Kay Rios at 6:35 p.m. PUBLIC COMMENT: None. APPROVAL OF MINUTES: Bob Browning moved to approve the minutes of the Jan. 12, 2012, meeting as presented. Anita Basham seconded; passed unanimously. FEE WAIVERS PRESENTATION AND DISCUSSION: Diane Jones, Deputy City Manager and Director, Policy, Planning and Transportation, presented a working paper on fee waivers related to the Fort Collins Housing Authority. The Housing Authority’s minimal financial percentage participation in the Provincetowne project, as CARE Housing’s non‐profit partner resulted in the waiver of $557,000 in infrastructure‐related fees. That amount needed to be made up from the City’s General Fund. While there are still questions about whether current State statutes apply to projects not wholly owned by the Housing Authority, City Council has City of Fort Collins CDBG Commission Regular Meeting June 14, 2012 2 asked for additional options for future projects, especially those in which the Housing Authority has only a minor interest. Ms. Jones presented four options: A. Use Community Development Block Grant and HOME funds to cover the fees The Housing Authority suggested that the fee waivers focus on permanent supportive housing projects that target the chronically homeless. The U.S. Department of Housing and Urban Development (HUD) prohibits the use of CDBG funds for impact fees. HOME funds can be used to pay individual or fractional impact fees on specific projects only, but may not be used on some other community‐wide development fees. Neither federal funding stream may be used to “backfill” waived fees. B. Affordable housing/human services tax or fee Other communities assess such a tax, but the possibility of passage of a tax increase at this time is relatively remote. C. Defer fees to the end of the first financing period The fees would not be assessed until the ownership is transferred‐‐for example, after the tax credit period of 15 years has passed, and the new owner would pay them. However, if the ownership is not transferred, would the fees still come out of the General Fund? Would deferment provide enough money upfront to expand public facilities to accommodate the development? D. Make the fee waivers optional, according to established criteria Under this option, the existing ordinance would be changed from “the City shall exempt the Housing Authority from payment of any of the following fees” to “the City may exempt the Housing Authority from payment of any of the following fees.” Each Housing Authority project would be reviewed with two general criteria as guidelines for exemption: projects that are constructed for persons who are homeless or have disabilities and/or projects that are constructed for occupants whose income is less than 30 percent of Area Median Income (AMI). City and Housing Authority staff are recommending Option D. Ms. Jones asked for input from the CDBG Commission to present to Council’s July 10 work session. Catherine Costlow suggested that waivers only apply to projects with a greater percentage of Housing Authority participation. Otherwise, developers might partner with the Authority just to get the Low Income Housing Tax Credits, when applicable. City of Fort Collins CDBG Commission Regular Meeting June 14, 2012 3 Ms. Jones said that might be possible, but the question remains as to how to manage the waivers. Kay Rios pointed out that while State law says housing authorities are exempt from fees and taxes, it is up to the City to determine which fees. Bob Browning suggested the City should waive fees for all affordable housing projects, not just the ones involving the Housing Authority. Ms. Jones said State law singles out housing authorities, and when fees are waived, that doesn’t mean they disappear. They have to be covered. Chair Rios pointed out that fee waivers give Housing Authority projects a significant leg up on other projects that come before the Commission in the City’s Competitive Process for funding. While she understands that it is not financially feasible to exempt all affordable housing projects, the advantage given to the Authority discourages other projects from competing. Even if the waivers were optional, Chair Rios believes the Housing Authority would always get them, no matter what. She asked where the list of fees to be waived specified in the existing ordinance originated. Chair Rios wondered whether the Council could pick and choose which fees to waive. Ms. Jones was unsure, but noted that in the past, fee waivers have been all or nothing. She confirmed that under Option D, waivers would only be granted to projects within the parameters specified. Chair Rios asked for confirmation that, with this ordinance, fees for other projects would not be waived as a matter of course. The only time fees “might” be waive would be for projects as defined in the ordinance. Currently, all applicable fees for all FCHA projects are waived, so this would limit the automatic fee waiver. Ms. Jones confirmed that that would be the case. Margaret Long said she liked that restriction, because projects for persons who are homeless, have a disability and/or are very low‐income, are the most difficult for investors, since they have the least potential for profit. It makes sense to level the playing field somewhat between the Housing Authority and other developers. Ms. Long added that she doesn’t like deferring fees, because after 15 years of inflation, what are you really getting? Emily Sander said Option D was good because the actual percentage of Housing Authority participation isn’t the issue. She wanted to know if the waivers would always be granted to projects meeting the criteria. Ms. Jones said the language was “may,” and Council could deny them based on the City’s ability to cover the fees. Jamaal Curry was concerned that the language was too open‐ended. Mr. Browning was concerned that eventually the definitions would expand back to where the Housing City of Fort Collins CDBG Commission Regular Meeting June 14, 2012 4 Authority is exempt from everything again. Ms. Rios thought limiting the exemptions was a good place to start. She was comfortable with waivers being limited only to specific types of projects, with an option to not waive them included. Ms. Jones pointed out that Council can waive fees, but that doesn’t preclude the Housing Authority from asking for additional project support from the Competitive Process (CDBG, HOME, or Affordable Housing Fund dollars) in the future. The Commission agreed with her recap of the discussion: Option D is preferred, in order to level the playing field between the Housing Authority and other developers of affordable housing. The Commission’s preference would be to see fee waivers extended to other nonprofit developers as they are currently offered to FCHA. UNITED WAY FUNDING DISCUSSION AND UPDATE: As members of the funding advisory board for United Way of Larimer County, Kay Rios and Margret Long both signed a letter of protest over the recently completed round of nonprofit funding. Chair Rios described it as the worst process ever. She objected to United Way staff involvement in rankings of organizations to be funded and changes made after her subcommittee on Education had turned in its recommendations, especially in regard to the amount of funding available. Member Long said she didn’t find her subcommittee on Income to be staff‐driven, but she still felt the process excluded many worthy organizations from funding. She said part of the problem is that United Way is still scoring projects based on poverty reduction. Nonprofits that meet basic needs but don’t get people out of poverty — for example, programs for seniors — don’t score as well and that plays havoc with the rankings. She also had a problem with the transparency of the process, which she said was arduous for organizations to get through, and felt the hard work of the advisory committee was disregarded in the final decision making. Chair Rios pointed to the CDBG Competitive Process as much more transparent. Member Long said she hopes the United Way process can be corrected. She plans to stick with it, but will continue to be outspoken, especially on behalf of seniors. Sharon Thomas asked Member Long and Chair Rios to keep the Commission and staff informed of any developments. SPRING 2012 COMPETIVITE PROCESS DEBRIEF: Kay Rios recapped the controversy that arose from the CDBG’s decision to fully fund the Disabled Resource Services’ (DRS) purchase of its building rather than provide the lesser amount requested. The Fort Collins Housing Authority’s request for additional funding for its supportive housing project was also funded, but reduced by $131,892. FCHA City of Fort Collins CDBG Commission Regular Meeting June 14, 2012 5 appealed the decision to City Council, which ultimately decided to allow the DRS funding to stand and award FCHA $131,892 from the Affordable Housing Fund (AHF) , reducing the amount of AHF money available for the Fall 2012 Competitive Process cycle. Chair Rios pointed out that the original decision was based in part on the lack of a specific site for the 40‐unit FCHA project at the time of deliberations, and the fact that there were no financials submitted. Ms. Thomas said a site is now under consideration. Catherine Costlow said she thought she was prepared for the final funding deliberations, but the FCHA/DRS discussion took her by surprise. She said she didn’t know the Commission could give more money than requested. As a result, she got lost and didn’t vote the way she wanted. Ms. Thomas said that while it is unusual, there are precedents for a larger award. She added that DRS had asked for the lower amount at staff direction. She said that was based on the fact that there were originally three projects asking for funding and staff didn’t want to give DRS false hope. However, one large project withdrew before the process came before the Commission. Chair Rios said that a project like the one from DRS usually doesn’t do well against new affordable housing construction. Member Costlow asked why the City didn’t let organizations ask for what they needed. She thought the CDBG Commission could lower the funding amount later based on availability of funds. Heidi Phelps said that as part of the City’s policies, affordable housing projects trump public facility projects. Public facility funding awards in more recent years have been used to pay for a downpayment or 20 percent of the property purchase. Bob Browning said fully funding DRS was a target of opportunity that could be accomplished without hurting FCHA. He admitted there wasn’t much public discussion before the final deliberations. Heidi Phelps called it a great out‐of‐the‐box solution, but admitted the memo to the City Manager explaining it, was a challenge to write since most staff members were taken by surprise on the recommendation, as well. Sharon Thomas praised the new members of the Commission for participating in the process and the deliberations. Anita Basham said it was very complex, and that she didn’t fully understand the different pots of money available for different types of projects. Ms. Thomas gave a quick overview, but Kay Rios suggested Anita or anyone who wanted a refresher should sit down with staff before the fall 2012 cycle begins. Ms. Thomas said staff was there to support the process and would help in any way they could. Chair Rios praised the work of staff, who catch it from both City administration and the public for Commission decisions, but always protect the process. City of Fort Collins CDBG Commission Regular Meeting June 14, 2012 6 Ms. Thomas said that the Affordable Housing Fund will also be expending $50,000 on a consultant to develop a relocation plan for low‐income residents displaced by redevelopment. This document will address broader concerns than the Bender Mobile Home Park issue. Funds to assist those residents came from the General Fund. The City is supporting the Bender residents because the land is in the Fort Collins Growth Management Area, even though it is currently in unincorporated Larimer County. The County Commissioners have declined to provide assistance. Ms. Thomas said one of the Social Sustainability Department BFO offers for 2013‐14 is to enhance the Human Services Program/Affordable Housing Fund Competitive Process funding availability by an additional $300,000. Member Long said the best way to weigh in on the City’s budget is on the website. Chair Rios said to just be sure to comment as a citizen, not a member of the Commission. Bob Browning reminded members that CDBG money is to buy specific things, not an allowance to run a business. He shared that the Commission isn’t here to pick up the slack from United Way cuts, and that it was not appropropriate to look at past funding levels to decide what requests to fund. The quality of the specific request each year is more important that the quality of the organization. Chair Rios said that’s why requests should list the organization’s top three funding priorities. Jamaal Curry asked about the City’s polices on how the money is spent. Ms. Thomas explained that the contract between the City and the nonprofit specifically states what is being funded. STAFF UPDATES Organizational Changes: Social Sustainability Department. Heidi Phelps said that the Advance Planning department is no more. All the current and long‐range planners are together in one division, under Community Development and Neighborhood Services.. All staff involved with grants administration and affordable housing and human services‐ ‐including Sharon Thomas and herself‐‐are now part of the Social Sustainability Department, headed by Joe Frank. She said the change will help bring the work of the Commission to the forefront of City operations. Analysis of Impediments. Staff is reviewing the working, in‐progress draft from the consultants and will present it at the Commission’s July 12 meeting. Ms. Phelps said staff would like to present it to the Affordable Housing Board (AHB) and the CDBG Commission in a joint meeting. The AHB has already rescheduled its meeting to July 12, so a time adjustment may be needed. Staff will be looking for discussion and input, rather than a recommendation, on the document. It is expected to be ready for review on July 2. City of Fort Collins CDBG Commission Regular Meeting June 14, 2012 7 Community & Agency Leadership Changes. Ms. Phelps reviewed some of the significant changes at the executive level and operational levels at several local nonprofits, including Neighbor to Neighbor, Crossroads Safehouse, and Habitat for Humanity. Affordable Housing Project Updates. Ms. Phelps said the department is fortunate to have Beth Rosen as a half‐time affordable housing administrator, which includes the complex job of reviewing affordable housing project proposals with tax credit financing, Ms. Phelps reported that the department has received information on the Fort Collins Housing Authority’s (FCHA) supportive housing project at Red Tail Ponds, near the south Transit Center. The Legacy project on Linden Street, a partnership between FCHA and Cornerstone, is facing building design and other issues. The Friends of the Poudre and the Landmark Preservation Commission have both espressed concerns. Ms. Thomas said that the bank take‐back of Merten Homes, Inc.’s Union Place may mean that the $750,000 in CDBG funding already granted to the developer may return to the the Competitive Process for the fall 2012 cycle. OTHER None. NEXT MEETING Thursday, July 12, 281 N. College Ave., Conference Room A. Possible partial joint meeting with Affordable Housing Board; time TBD. Meeting adjourned at 8:30 p.m.