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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 11/02/2021 - RESOLUTION 2021-101 APPROVING A WAIVER OF THE 2018 Agenda Item 14 Item # 14 Page 1 AGENDA ITEM SUMMARY November 2, 2021 City Council STAFF Wendy Bricher, Financial Analyst Meaghan Overton, Housing Manager Ingrid Decker, Legal SUBJECT Resolution 2021-101 Approving a Waiver of the 2018, 2019 and 2020 PILOT for Housing Catalyst. EXECUTIVE SUMMARY The purpose of this item is to approve a waiver for the 2018, 2019 and 2020 PILOT of $9,447, $12,069, and $14,524 per the Cooperative Agreement dated in 1971. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BACKGROUND / DISCUSSION Public housing authorities are formed by the local governing body under State of Colorado enabling legislation. The Fort Collins Housing Authority (FCHA), now called Housing Catalyst, was formed by the Fort Collins City Council on May 20, 1971. The federal Department of Housing and Urban Development (HUD) requires a public housing authority to submit to HUD for approval a Cooperation Agreement between the housing authority and the local government before the housing authority can apply for a public housing project. HUD’s standard form of Cooperation Agreement must be used unless modifications are approved to comply with state or local requirements. The Payment In Lieu of Taxes (PILOT) is covered in Section 3 (a) of the Cooperation Agreement form. On December 16, 1971, to meet this requirement, the City and FCHA entered into a Cooperation Agreement, which provided that FCHA must make annual PILOT payments to the City for the public services and facilities furnished by the City. The PILOT applies only to those properties specifically funded by the HUD “Public Housing” program. The computation of the Payment in Lieu of Taxes is done on form HUD-52267 and is calculated using the total tenant revenue less utility expenses for those units. A copy of the 1971 Cooperation Agreement, as amended in 1986, is included. (Attachment 2) In 1986, upon request of FCHA, the City Council adopted Resolution 1986-177, which relieved FCHA of its obligation to make the PILOT payments. Based on that resolution, FCHA did not make PILOT payments from 1987 through 1990. The City also refunded FCHA’s PILOT payments for the years 1984, 1985 and 1986. In 1992, Council adopted Resolution 1992-093, repealing Resolution 1986-177 and reinstating the requirement that FCHA pay the annual PILOT payment. The change was made to assure compliance with Department of Housing and Urban Development regulations. After that, the City returned the annual PILOT payments to FCHA at its request. In recent years, Congressional appropriations have been at 80% of the HUD operating subsidy for Public Housing units, and the PILOT refund helps make up for Congressional underfunding of operations and services to these units. Agenda Item 14 Item # 14 Page 2 In January 2019, Council approved Resolution 2019-003, approving a waiver of the 2017 PILOT for Housing Catalyst rather than having Housing Catalyst pay the PILOT funds to the City and then appropriating funds to repay it as in past years, simplifying the process. Similarly, staff recommends that Council approve waivers of the 2018, 2019 and 2020 PILOT payment for Housing Catalyst. As a condition of the waiver, the City will require Housing Catalyst to sign a letter agreement obligating it to use the funds for creating or maintaining affordable housing in a manner consistent with HUD guidelines. ATTACHMENTS 1. 2018-2020 PILOT Waiver Requests (PDF) 2. 1971 HUD agreement (PDF) October 6, 2021 Mayor Arndt and Honorable City Council City of Fort Collins 300 LaPorte Avenue Fort Collins, Colorado 80521 Dear Honorable Mayor Arndt and City Council, As you may know, Housing Catalyst and the City of Fort Collins entered into a Cooperative Agreement when the Authority was formed in 1971. As a part of that agreement and in accordance with state and federal law, a Payment in Lieu of Taxes (“PILOT”) is accepted for the 70 federally funded Low Income Public Housing units owned and operated by the Authority. The PILOT is calculated using tenant rental revenue, less utility expenses. Historically, the Council has graciously returned this PILOT to Housing Catalyst to help support these properties which serve families and seniors typically earning between 0% and 30% of the Area Median Income. As we discussed with City of Fort Collins Finance Department staff last December, we appreciate the willingness of the Council to consider a waiver of PILOT obligations for 2018 and going forward to facilitate a more efficient transition of these funds. This program’s operating subsidy is dependent upon Congressional appropriations which have fallen short of the operating needs for many years; accordingly, the refunded PILOT continues to be very important to the operation of this program. We respectfully request a waiver of the PILOT balance due of $9,447 for the year 2018, $12,069 for the year 2019 and $14,524 for the year 2020. On behalf of the 70 families residing in these properties, I would like to express our sincere appreciation. Your commitment to supporting affordable housing for our community’s lowest income families is very apparent and commendable. Sincerely, Julie J. Brewen Chief Executive Officer Attachments ATTACHMENT 1 ATTACHMENT 2 -1- RESOLUTION 2021-101 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING A WAIVER OF THE 2018, 2019 AND 2020 PILOT FOR HOUSING CATALYST WHEREAS, on December 16, 1971, the City and the Fort Collins Housing Authority, now called Housing Catalyst, entered into a Cooperation Agreement (the “Agreement”) to comply with the requirements of a public housing program financed by the federal Department of Housing and Urban Development (“HUD”); and WHEREAS, the Agreement requires Housing Catalyst to make an annual payment in lieu of taxes (“PILOT”) to the City for the public services and facilities provided by the City to Housing Catalyst projects; and WHEREAS, from approximately 1992 until 2017, the City remitted such PILOT payments to Housing Catalyst to help fund affordable housing-related activities and meet the needs of low-income Fort Collins residents; and WHEREAS, in January 2019 the City Council approved Resolution 2019-003, approving a waiver of the 2017 PILOT for Housing Catalyst rather than having Housing Catalyst pay the PILOT funds to the City and then appropriating funds to repay it as in past years, simplifying the process; and WHEREAS, Housing Catalyst is scheduled to make PILOT payments of $9,447 for 2018, $12,069 for 2019, and $14,524 for 2020; and WHEREAS, City staff is recommending that the Council again waive the requirement that Housing Catalyst pay the PILOT funds; and WHEREAS, the parties to a contract can agree to waive an obligation required of a party to such contract; and WHEREAS, as a condition of agreeing to such waiver, the City will require Housing Catalyst to sign a letter agreement obligating Housing Catalyst to spend the funds for creating or maintaining affordable housing in a manner consistent with HUD guidelines. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Council hereby waives Housing Catalyst’s obligation to make PILOT payments for 2018, 2019 and 2020 pursuant to the 1971 Cooperation Agreement on the condition that Housing Catalyst spend such funds for affordable housing and related activities for Fort Collins residents consistent with HUD guidelines. -2- Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 2nd day of November, A.D. 2021. __________________________________ Mayor ATTEST: _____________________________ Interim City Clerk