HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/02/2003 - ITEMS RELATING TO THE COMPETITIVE PROCESS FOR ALLO ITEM NUMBER: 12 A-B
AGENDA ITEM SUMMARY DATE: December2, 2003
FORT COLLINS CITY COUNCIL STAFF: Ken Waldo
SUBJECT
Items Relating to the Competitive Process for Allocating City Financial Resources to Affordable
Housing Projects/Programs and Community Development Activities: the Fiscal Year 2003-2004
Home Investment Partnerships (HOME) Program, the Fiscal Year 2003-2004 Community
Development Block Grant (CDBG) Program, and the City's Affordable Housing Fund.
RECOMMENDATION
Staff recommends adoption of the Ordinances on Second Reading.
EXECUTIVE SUMMARY
A. Second Reading of Ordinance No. 162, 2003, Appropriating Unanticipated Revenue in the
Home Investment Partnerships Fund.
B. Second Reading of Ordinance No. 163, 2003, Appropriating Unanticipated Revenue in the
Community Development Block Grant Fund.
Ordinance No. 162 and 163,2003,which were unanimously adopted on First Reading on November
18, 2003, appropriate unanticipated program income revenue for the HOME and CDBG programs
respectively.
ORDINANCE NO. 162, 2003
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING UNANTICIPATED REVENUE
IN THE HOME INVESTMENT PARTNERSHIPS FUND
WHEREAS, the City will receive unanticipated HOME Program income in the 2003-2004
federal fiscal year in the amount of$100,000; and
WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins permits the City
Council to make supplemental appropriations by ordinance at any time during the fiscal year,
provided that the total amount of such supplemental appropriations,in combination with all previous
appropriations for that fiscal year,does not exceed the then current estimate of actual and anticipated
revenues to be received during the fiscal year; and
WHEREAS, City staff has determined that the appropriation of unanticipated HOME
Program income will not result in total appropriations in excess of the current estimate of actual and
anticipated revenues for fiscal year 2003; and
WHEREAS, by adoption of Resolution 2003-127 the City Council approved Programs and
Projects for the 2003-2004 Home Investment Partnerships Program.
NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that there is hereby appropriated from unanticipated program income revenue for
approved Home Investment Partnerships projects, upon receipt thereof into the Home Investment
Partnerships Grant Fund,the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000)for
approved Home Investment Partnerships projects.
Introduced, considered favorably on first reading, and ordered ublished this 18th day of
November,A.D.2003,and to be presented for final passage on the 2 ay of December,A.D.2003.
ayor
ATTEST:
,Z�,�.«ems
City Clerk lG`19i<I- �i'�
Passed and adopted on final reading this 2nd day of December, A.D. 2003.
Mayor
ATTEST:
City Clerk
ORDINANCE NO. 163, 2003
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING UNANTICIPATED REVENUE
IN THE COMMUNITY DEVELOPMENT BLOCK GRANT FUND
WHEREAS, the City will receive unanticipated Community Development Block Grant(CDBG)
Program income in the 2003-2004 federal fiscal year in the amount of$100,000; and
WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins permits the City
Council to make supplemental appropriations by ordinance at anytime during the fiscal year,provided that
the total amount of such supplemental appropriations,in combination with all previous appropriations for
that fiscal year,does not exceed the then current estimate of actual and anticipated revenues to be received
during the fiscal year; and
WHEREAS, City staff has determined that the appropriation of unanticipated CDBG Program
income will not result in total appropriations in excess of the current estimate of actual and anticipated
revenues for fiscal year 2003; and
WHEREAS, by adoption of Resolution 2003-128 the City Council approved Additional
Programs/Projects for the 2003-2004 Community Development Block Grant Program.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that there is hereby appropriated from unanticipated program income revenue for approved
Community Block Grant projects, upon receipt thereof into the Community Development Block Grant
Fund, the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000) for approved Community
Development Block Grant projects.
Introduced, considered favorably on first reading, and ordered published this 18th day of
November, A.D. 2003, and to be presented for final passage on the 2nd ay of December, A.D. 2003.
Mayor
ATTEST:
City Clerk t4tr<F Cf✓tti�j
Passed and adopted on final reading this 2nd day of December, A.D. 2003.
Mayor
ATTEST:
City Clerk
ITEM NUMBER: 19 A-F
AGENDA ITEM SUMMARY DATE: November 18, 2003
FORT COLLINS CITY COUNCIL STAFF: Ken Waido
SUBJECT
Items Relating to the Competitive Process for Allocating City Financial Resources to Affordable
Housing Projects/Programs and Community Development Activities: the Fiscal Year 2003-2004
Home Investment Partnerships (HOME) Program, the Fiscal Year 2003-2004 Community
Development Block Grant (CD ogram,.and ty' ff ble Housing Fund.
a mx.:
RECOMMENDATION
Staff recommends adoption of the Resolutions and the Ordinances on First Reading. The CDBG
Commission presents a list of recommendations as to which programs and projects should be funded.
The Commission also presents a recommendation for a policy change for allocating CDBG,HOME,
and Affordable Housing Fund loans by adding 5% to the principal repayment amount.
EXECUTIVE SUMMARY
A. Public Hearing and Resolution 2003-127 Approving the FY 2003-2004 Home Investment
Partnerships Program for the City of Fort Collins.
B. Public Hearing and Resolution 2003-128 Adopting Additional Programs/Projects for the FY
2003-2004 Community Development Block Grant Program for the City of Fort Collins.
C. Public Hearing and Re utt 03-1' 9locin ung from the City's Affordable
Housing Fund.
D. Public Hearing and Resol"Stl n 200 0 pproving a olicy Change in the Manner Loans
are Made with CDBG, Home, and Affordable Housing Funds by Adding A 5% Fee to the
Principal Repayment Amount.
E. First Reading of Ordinance No. 162, 2003, Appropriating Unanticipated Revenue in the
Home Investment Partnerships Fund.
F. First Reading of Ordinance No. 163, 2003, Appropriating Unanticipated Revenue in the
Community Development Block Grant Fund.
The Home Investment Partnerships (HOME) Program and the Community Development Block
Grant (CDBG) Program provide funds from the Department of Housing and Urban Development
to the City of Fort Collins that can be allocated to community development and affordable housing
related programs and projects, thereby reducing the demand on the City's General Fund Budget to
November 18, 2003 -2- Item No. 19 A-F
address such issues. The City Council is being asked to consider the adoption of four resolutions
and two ordinances. The first resolution (Resolution 2003-127) establishes which programs and
projects will receive funding with HOME funds for the FY 2003-2004 Program year, which started
on October 1, 2003. The second resolution (Resolution 2003-128) establishes which additional
programs and projects will receive funding with CDBG funds for the FY 2003-2004 Program year,
which also started on October 1,2003. The third resolution(Resolution 2003-129)establishes which
programs and projects will receive funding from the City's Affordable Housing Fund. And, the
fourth resolution(Resolution 2003-130)approves a policy change in the manner loans are made with
CDBG,HOME,and Affordable Housing Funds by adding 5%to the Principal Repayment Amount.
The two ordinances (Ordinance No. 162, 2003, and Ordinance No. 163, 2003) appropriate
unanticipated program income - u,�n
O d" BGprograms respectively.
BACKGROUND
The City Council will conduct a public hearing and consider the adoption of a series of resolutions
establishing which programs and projects will receive funding from the City's HOME Program for
the FY 2003 Program year, which programs and projects will receive funding from available
Community Development Block Grant (CDBG)Program funds, and which programs and projects
will receive funding from the C' f0ab d.
The resolutions establishing ich pro ects wi receive HOME, CDBG, and City
Affordable Housing Fund dol a,repr , , nation he fall cycle of the competitive
process approved in January 2000 by the Council for the allocation of the City's financial resources
to affordable housing programs/projects and community development activities. Additional
background material about the competitive process is included in Attachment A.
Since early January of this year,the CDBG Commission and members of the City staff's Affordable
Housing Team have conducted public hearings to assess community development and housing needs
in Fort Collins, conducted tec Can �pr
, G t wQ•ksho�ps for applicants, and solicited
applications for funding. T ' CDB si r ie written applications, personally
interviewed each applicant, analyzed thc o ,and fo lated a list of recommendations to
the City Council as to which prbpams • ect hould r e funding.
The competitive process established refined criteria to determine priorities between proposals
received by the City. The ranking criteria are divided into five major categories. Each category is
given a total number of points that has been weighed according to their importance with respect to
local and federal priorities. The five major categories are:
1. ImpactBenefit
2. Need/Priority
3. Feasibility
4. Leveraging Resources
5. Capacity and History
The Impact/Benefit criteria provide greater rewards to proposals that target lower income groups.
The Need/Priority criteria help assure that the proposal meets adopted City goals and priorities. The
November 18, 2003 -3- Item No. 19 A-F
Feasibility criteria reward projects for timelines and documented additional funding. The Leveraging
Resources criteria reward proposals which will return funds to the City (via loans) and for their
ability to leverage other resources. And, the Capacity and History criteria help gage an applicant's
ability to do the project and reward applicants that have completed successful projects in the past
(have good track records). The ranking sheet used to assist the CDBG Commission is presented in
Attachment A.
The Commission also considered the funding guidelines contained in the Priority Affordable
Housing Needs and Strategies report adopted by the Council on February 2, 1999. These guidelines
include:
• HOME funds should e le rally a alloca d fo ow o for Housing projects and 10%
for Program Administ ion. HOW�ogram regulations also require the City to set
aside 15%for I jni ou`sin D lop�nent Organization(CHDO)projects and allow
an allocation of 5% for CHDO operations;
• CDBG funds should generally be allocated as follows: 65% for Housing projects; 10% for
Program Administration; 10% for Public Facilities; and 15% for Public Services;
• funds allocated to housing should generally be divided as follows: 70% for rental projects
and 30% for homeownership opportunities; and
• the average subsidy should be $5,000 per unit, with relatively more funding to projects
producing housing for(pW"c� e iV�nt )adml
The CDBG and HOME Pro areongoi gation programs funded by the
Department of Housing and Deveibpment . Th ity of Fort Collins has received
CDBG Program funds since 1975 and HOME Program funds since 1994. The City is an Entitlement
recipient of CDBG funds and a Participating Jurisdiction recipient of HOME funds, meaning the
City is guaranteed a certain level of funding each year. The level of funding is dependent on the total
amount of funds allocated to the programs by Congress and on a formula developed by HUD,which
includes data on total population, minorities as a percentage of population, income levels, housing
stock conditions,etc. Additional background information on the City's HOME and CDBG Programs
are presented in Attachments nd D respective] �{
AVAILABLE FUNDS
The amount of the City's FY 2003 HOME Grant available for projects is $830,039. Added to the
HOME Grant will be $100,000 of estimated HOME Program Income to make a combined amount
of$930,039 available for projects. The HOME funds will be combined with $1,087,924 from the
City's Affordable Housing Fund and $762,081 of unallocated CDBG funds plus $100,000 of
estimated CDBG Program Income to create a potential pool of$2,880,044 of funds available for
programs from the fall cycle of the competitive process.
CDBG funds are typically allocated in the spring and are,thus,not available for use in the fall cycle
of the competitive process. However, the City did not allocate all of its CDBG funds in the spring
cycle of 2003 carrying over an amount of$762,081 for allocation in the fall cycle.
November 18, 2003 -4- Item No. 19 A-F
The following summarizes the amount and sources of available funds:
AMOUNT SOURCE
--------------------------------------------------------------
--------------------------------------------------------------
$ 930,039 FY 2003 HOME Grant and Estimated Program Income
1,087,924 City's Affordable Housing Fund
862,081 Unallocated CDBG Funds and Estimated Program Income
------------------------------------------------------------------------------------------------------------
$2,880,044 Total
SELECTION PROCESSCGCom
On January 9, 2003, the CD ssion el a public earing to obtain citizen input on
community development and e h usi g ne s. The CDBG Program office placed
legal advertisements in local and regional newspapers starting in July to solicit requests for HOME
and CDBG funded programs and projects and for proposals for the use of funding from the City's
Affordable Housing Fund. The application deadline was Thursday August 21. At the close of the
deadline the City received twelve(12)applications requesting a total of approximately$4.8 million.
Two (2) proposals were withdrawn by the applicants leaving ten (10) applications requesting
approximately $4.2 million in the review/selection process.
Copies of all applications wer orward throu t NM er's office to the City Council on
September 4, 2003 and placed the Co cil O c or review lso on September 4, 2003 copies
of the applications were distribu the G ssion d the Affordable Housing Board.
On September 18, 2003 the Affordable Housing Board conducted a special meeting to review the
affordable housing proposals and formulate a list of priority projects which was forwarded to the
CDBG Commission (see Attachment B). On September 25, 2003, the CDBG Commission met to
hear presentations and ask clarification questions from each applicant. The Commission then met
on October 2 for the purpose of preparing a recommendation to the City Council as to which
programs and projects should b unCn ?)(twe fallcycle of the competitive
process. At this meeting the mmissieanons, the applicant's verbal
presentation, the information vided aersession, and reviewed the
performance of agencies who rece fedfununds, or other funding in previous
years. The Commission then worked on the formulation of its list of recommendations.
CDBG COMMISSION'S LIST OF RECOMMENDATIONS
HUD HOME regulations limit the amount of available funds that can be allocated to various
categories. Funds for Administrative purposes are limited to 10%of the HOME Grant which means
90% of the Grant must be used for housing projects. Within the 90%required for projects,the City
is required to set aside 15% for Community Housing Development Organization (CHDO)projects
and allow an allocation of 5% for CHDO operations (if any applications are received). Similarly,
HUD CDBG regulations limit the amount of available funds that can be allocated to various
categories. Funds for Administrative purposes are limited to 20%of the CDBG Grant and estimated
Program Income and funds for Public Services are limited to 15%. The City allocated all eligible
November 18, 2003 -5- Item No. 19 A-F
funds for public services during the spring cycle of the competitive process and designated
approximately 11% for administrative purposes.
The Commission, thus, not only had to decide which applicants presented programs and projects
which best fit into the City's HOME and CDBG Programs,but also had to insure funding allocations
were kept within HUD regulations and follow the funding guidelines contained in the Priority
Affordable Housing Needs and Strategies report.
Listed below is a summary of each applicant's initial request for funding and the Commission's list
of recommendations.
1. Administration Proptal
City of Fort Collins— CDBG PrograOdnistion
Request: $53,910 (CDBG Grant)
Recommendation: $53,910 (CDBG Grant)
This is a request to increase the amount of CDBG funds utilized for administration of the CDBG
Program. HUD regulations limit the amount of CDBG funds that can be used for administrative
purposes to no more than 20% rOdindr fythe �
rogram Income. In the spring,
the City allocated$158,392 fo DBG dses(approximately 11%of the
maximum allowed). The adjonal alaise ntage used for administrative
purposes to approximately 15%."
2. Affordable Housing Projects
City of Fort Collins - Home Buyer Assistance
Request: $1,000,000 Loan ($500,000 HOME, $500,000 CDBG)
Recommendation: $1,OOQ (3Qes.
8 y
2 CDBG)
This program is administere the tI Wing me
and provides zero-percent
interest loans to eligible first-tim ome e assistance covers down payment and closing
costs at a current loan rate of$9,000 for households at 51% to 80% of Area Median Income (AMI)
and $18,000 for buyers at or below 50% of AMI. The funding would provide a minimum of 111
loans at the current loan rate of$9,000 over the 2003 Fiscal Year.
3. City of Fort Collins - Home Buyer Assistance (Rental Properties)
Request: $200,000 Loan ($200,000 AHF)
Recommendation: $200,000 Loan ($200,000 AHF)
This program is administered by the Advance Planning Department and provides zero-percent
interest loans to eligible first-time homebuyers to purchase former rental properties. The assistance
covers down payment and closing costs at a current loan rate of$9,000 for households at 5 1% to
November 18, 2003 -6- Item No. 19 A-F
80% of Area Median Income(AMI) and$18,000 for buyers at or below 50%of AMI. The funding
would provide a minimum of 22 loans at the current loan rate of$9,000 over the 2003 Fiscal Year.
4. Fort Collins Housing Corporation—Rehabilitation and Refinancing of Apartments
Request: $222,565 ($103,565 HOME Grant and$119,000 HOME Loan)
Recommendation: $222,565 ($222,565 CDBG Loan)
The FCHC proposes to rehabilitate and refinance the Myrtle Street Single Room Occupancy(SRO)
building located at 811 East Myrtle Street. The project involves replacing the heating system,roof
and several other Housing Qua, y'Stgtd 9P Y-which is home to 15 at risk of
becoming homeless individu `
In addition,the application incl os-rdfmancing thAxistinensure long-term affordability.
If HUD subsidy is lost, the project may not be able to support the current mortgage loan balance
($119,000).
5. Neighbor to Neighbor—Acquisition and Rehabilitation of Apartments
Request: $235,500 ($75,000 HOME Loan and$160,000 CDBG Loan)
Recommendation: $235,50 OFe
$ 5,919 CDBG Loan)
Neighbor to Neighbor request nds tox loc ed at 1041 Ponderosa Street in Fort
Collins. The units in the project be at 30o'and 40%of AMI. Some deferred
maintenance will be required to bring the property up to acceptable health and safety standards.
This property adjoins two other Neighbor to Neighbor properties on Clearview and Crabtree Streets.
The arrangement allows for an efficient economy of scale for property management and maintenance
purposes.
6. Paradigm Real Estat ar �r C" L` es e` ' lage at Rigden Farm
Request: $600 00,00 ($2 0 HO an, CDBG Loan and$200,000 AHF
Loan) ' "
Recommendation: No funding
Paradigm Real Estate Partners is requesting funds for the acquisition of land to build 44 single-
family homes targeted to the first-time homebuyers. The Rigden Farm Community is located south
of Drake Road and east of Timberline Road.
All of the units within this first phase will be assisted with public funds and sold to qualified
homebuyers eaming no more than 80% of AMI. Home values will be protected and maintained as
affordable as each new homeowner must commit to preserving the affordability of the neighborhood
by agreeing to limit price appreciation on their home to 4% accrued/year or less.
November 18, 2003 -7- Item No. 19 A-F
7. Habitat for Humanity — Multi-Family Partnership for Land Acquisition and
Infrastructure
Request: $695,500 ($695,500 HOME Loan)
Recommendation: $695,500 ($250,000 HOME Loan, $445,500 CDBG Loan)
Habitat for Humanity is requesting funds for the acquisition of land and infrastructure improvements
to develop the Richard Lake PUD. The City has approved this PUD for 54 units of affordable
housing. The project is located north of County Club Road and west of County Road 11.
Habitat for Humanity plans t ve iC h 7 ofthe development, Scott Price,
Stonebridge Properties LLC. discuss' s wit th fo ro ner,Habitat would receive 50%
of the units, or 27 units. H 'tat wou use 5 000 of th request for land acquisition and
$445,500 for infrastructure imp ent . ita nits wou abe affordable at or below 50% of
AMI and the for-profit partner units would be affordable at 80%and below AMI. This would ensure
a 3-4 year supply of lots for Habitat.
8. Habitat for Humanity—Land Acquisition
Request: $240,000 ($240,000 CDBG Loan)
Recommendation: $ 62,56 4 24 `- F Loan)
Habitat for Humanity is requ ing CD fu F
uire f r newlots ($60,000 per lot). The
organization is actively search or pr pe ieswill t their needs. Habitat provides
homeownership opportunities for families at or below 50% of AMI.
9. City of Fort Collins Land Bank Program—Interstate Land Site
Request: $410,000 ($410,000 AHF Loan)
Recommendation: $410,000 ($410,000 AHF Loan)
This proposal requests the b nce of fds ne YAdatb
portion of the Interstate Land
Property neighborhood locate n the.no? hwes c er ofRoad and I-25 within the city
limits. In the spring, the City designated$40000 rom thle Housing Fund for a portion
of the$810,000 needed for this project. The property is zoned LMN and is currently going through
the City's development review process.
The owners of the Interstate Land development project have approached the City about acquiring 8.3
acres for an affordable housing component in the development. The Interstate Land development
will be a 176-acre mixed-use neighborhood including commercial development, single-family
residential units, townhomes, condominiums and multiple small employment uses.
10. City of Fort Collins—Land Bank General Application
Request: $500,000 (AHF Loan)
Recommendation: No funding
November 18, 2003 -8- Item No. 19 A-F
This application is requesting funds to purchase a site for the City's Land Bank Program. The exact
site has not been identified. The City implemented the Land Bank Program to preserve scarce land
resources for affordable housing projects. Currently, the City has purchased 30 acres (three
properties), which will yield approximately 300-320 future affordable housing units.
Total amount of funding requested= $4,157,475
Total amount of funding available = $2,880,044
Total amount of funding allocated= $2,880,044
rt„
The total amount of funding re ests co dered' t CBG' mission was approximately$4.2
million, however,only about 9 milli of fu s availabI , With the amount of total requests
far exceeding available funding, ous o all a@pltcationsseould be funded.
The CDBG Commission has recommended full funding for seven(7)proposals,partial funding for
one (1) proposal, and no funding for two (2)projects.
The Commission's reasons for either full funding, or no funding, for all projects are presented in
Attachment E.
• The Commission has commeided al ' c n 1 ( o) of the available $862,081 of
CDBG funds.
• The Commission has rec mended alloca --al] (10 `of the$820,458 available HOME
funds.
• The Commission has recommended allocating all(100%)of the$109,581 available from the
HOME-CHDO set-aside.
• The Commission has recommended allocating all (100%)of the$1,087,924 available from
the Affordable Housing Fund.
Proposed Policy Chan e for C #&/ftD XW, ans ^6,
Presently, the City allocates f ° ing f the B and HO Federal Grant Programs, as well
as funds from the City's Affordab ousin nd, or non-pub is service programs as zero-interest,
due on sale, deferred loans. This means recipients of funds make no payments on their loans, but
are required to repay the full loan principal amount if the property is sold at some point in the future.
For example,in the Home Buyer Assistance Program,a family can receive$9,000 in downpayment
assistance to help them purchase a home. The family makes no payments on the loan and only pays
back the loan if they sell their home at some point in the future (or, they refinance,etc.). When the
family does sell, they pay the $9,000 back to the City, whether they sell their home in 1 year or 10
years in the future.
At the CDBG Commission meeting conducted on October 2, 2003, the Commission voted to
recommend to the City Council a policy change in the manner in which the City allocates funding
from the CDBG/HOME Programs and the City's Affordable Housing Fund by adding a fee to the
City's loans in the amount of 5% of the loan principal, to be paid at the time that the loan is repaid.
The Commission's concerns and rationale were twofold:
November 18, 2003 -9- Item No. 19 A-F
(1) Unknown budget constraints could adversely affect the availability of funds from the
three sources in the future and generating program income now could help ensure
that these programs continue in the light of future adverse financial situations.
(2) Families helped by these loans should have a participatory role in helping the next
family achieve their housing goals. Families receiving these loans certainly should
receive a financial benefit from taxpayer involvement; paying back the loans with a
fee to be used to help other families means the taxpayers' loans are reaping even
more benefits.
The Commission had a subco mate nd � Yaportant
se'
other options; however, the
Commission believes it to bej�realistictatte t rt�he
n representative"dollars,i.e.,
where the purchasing power oe repains power of new loans when new
loans are made. While this co °b c ed topic of the Commission
subcommittee's discussions, it would essentially require the City to administer extremely
cumbersome adjustable rate mortgages with monthly amortization. The Commission considered
traditional inflation rates, Consumer Price Indices, etc., and determined that 5% of the principal
amount,as a fee due on repayment,was the most efficient avenue to pursue to answer concerns listed
in numbers 1 and 2 above. The end result of this proposal would be that an original$9,000 loan,for
example,would repay$9,450 whenever the property was resold or refinanced. Of course,if the loan
is repaid within the first year,t e"e,wottld mh t e ensive. After the first year,the
fee becomes more reasonabl hen cup, ared ra nterest." The fee becomes less
burdensome for those who do t sell the' hom s ly.
. _ .:r q,