HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/06/2004 - MOTION TO SELECT AN OPTION FOR THE CITY'S MATCH TO ITEM NUMBER: 37
AGENDA ITEM SUMMARY DATE: July6, 2004
FORT COLLINS CITY COUNCIL STAFF: Diane Jones
SUBJECT
Options for the City's Match to Fund a Tenant Based, Pilot Rental Assistance Program.
(Options 1, 2, and 3)
RECOMMENDATION
Staff has developed three proposals for consideration by Council, but recommends using existing
Affordable Housing appropriations (Option 1). There is no need for an appropriation ordinance if
City Council accepts the staff recommendation.
FINANCIAL IMPACT
The City will use $169,651 of existing funds to provide a local cash match for a two-year Tenant
Based, Pilot Rental Assistance Program. There are no ongoing expenses.
EXECUTIVE SUMMARY
The Colorado Division of Housing ("DOH") approached the City and the Fort Collins Housing
Authority("FCHA") regarding a Tenant Based, Pilot Rental Assistance Program ("Program") for
a two-year pilot period. DOH, with the lead of a new director, is focusing on responding quickly
to changing local market conditions for affordable housing. Consequently, DOH identified three
communities with unique needs: Colorado Springs,Denver Metro area,Fort Collins/Loveland. The
identified unique needs include double digit rental market vacancy rates,financially challenged low-
income affordable housing projects, demand exceeding capacity in homeless shelters, and large
waiting lists for deep subsidy programs like Section 8 vouchers.
The State Housing Board has committed $2.8 million of DOH money to these three communities;
Fort Collins/Loveland is to receive $465,000. The funds are for a two-year, stop-gap, rental
assistance program that would target between 35 and 70 families earning 0-30% of Area Median
hicome,working families in shelters,homeless individuals and families,those on Section 8 waiting
lists, and other local preferences to be defined. The funding will provide rental assistance,security
deposit assistance, case management for self-sufficiency and project administration.
The economy has created a great burden on extremely low-income families. Staff research shows
that Housing and Urban Development("HUD")economists do not foresee the market changing until
mid-2006. The Program's expected lifetime is two years and participants will be required to sign
contracts indicating their understanding that the assistance will not continue beyond that time.
Participants will also be required to participate in goal setting and intensive case management in
order to help them become more self-sufficient during that time. As a family becomes more self-
July 6, 2004 -2- Item No. 37
sufficient and its income increases,the amount of subsidy will decrease,thus freeing up subsidy for
other families.
The FCHA negotiated the Fort Collins community local cash contribution with DOH to be$169,651
which can be dispersed semi-annually beginning July 2004. Each of the semi-annual payments
would be $42,412.75, for a total of$169,651 over the two year period. The FCHA will be the
administrative agent for this Program and the funding will be dispersed to FCHA.
City Council approved Resolution 2004-045 in March 2004, and directed the City Manager to
identify a source for funding the cash portion of the local contribution that will be required by the
DOH from the City. There are three options to fund the required local cash contribution
OPTIONS:
1. Affordable Housing Trust
Attached(Attachment A)is a cash flow schedule for affordable housing that includes the withdrawal
of monies to fund the DOH required local cash match over the two-year period. Based on cash flow
estimates, there would not be a significant effect on the Affordable Housing Trust balance. No
appropriation is required as historically, any year-end balance is reappropriated for use in the
following year.
2. General Fund Undesignated Reserves
The estimated General Fund reserves available to fund the required contribution are currently
$3,564,834 this includes$2,392,279 which is the TABOR overage for 2003. A Council approved
appropriation would be required(First Reading of Ordinance No. 118,2004,Appropriating Prior
Year Reserves in the General Fund for Matching Funds for a Tenant Based, Pilot Rental
Assistance Program) to use the reserves for this purpose. The total amount required for this two-
year program ($169,651)could be appropriated and encumbered. Monies required for each of the
four payment periods would be released per the disbursement schedule.
3. Community Opportunity Account
The current balance in the Community Opportunity Account is$306,080. This money is currently
appropriated for use. Each year, $190,200 of ongoing funds is added to the account. Any end of
year balance is reappropriated for use in the following year and is added to the $190,200. No
appropriation is required.
RECOMMENDATION:
Since the Program is an affordable housing program, it would be appropriate to use Affordable
Housing Trust monies for the two-year period. No appropriation is needed because balances in the
Trust are reappropriated for use in the coming year. The use of Affordable Housing Trust monies
for the Program will not have a significant effect on the Trust's cash flow.
If Council selects Option 2,the appropriation ordinance included with this Agenda Item Summary
should be adopted. If Council selects Option 1 or Option 3, no additional action by ordinance is
necessary.
ORDINANCE NO. 118, 2004
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND
FOR MATCHING FUNDS FOR A TENANT BASED, PILOT RENTAL
ASSISTANCE PROGRAM
and WHEREAS,the City of Fort Collins is committed to the availability of affordable housing;
WHEREAS,Fort Collins and other Front Range cities are currently facing double-digit rental
market vacancy rates, financially challenged low income affordable housing projects, and large
waiting lists for heavily subsidized housing programs such as Section 8 vouchers; and
WHEREAS, the State Housing Board of the Colorado Division of Housing ("DOH") has
committed$2.8 million fora two-year,stop gap,rental assistance program that would target between
25 and 70 families earning 0% to 30% of Area Median Income, working families in shelters,
homeless individuals and families,those on Section 8 waiting lists,and others in need of affordable
housing; and
WHEREAS, the funding will provide rental assistance, security deposit assistance, case
management for self-sufficiency and project administration; and
WHEREAS, $465,000 of the DOH committed funds are targeted for the Fort
Collins/Loveland area; and
WHEREAS, the grant money from the DOH requires a local cash contribution by the City
of Fort Collins in the amount of$169,651; and
WHEREAS, funds are available from the General Fund prior year reserves; and
WHEREAS,Article V,Section 9,of the Charter of the City of Fort Collins permits the City
Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as
may be available from reserves accumulated in prior years,notwithstanding that such reserves were
not previously appropriated.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that there is hereby appropriated for expenditure from General Fund prior year reserves
the sum of ONE HUNDRED SIXTY-NINE THOUSAND SIX HUNDRED FIFTY-ONE DOLLARS
($169,651), for matching funds for a two-year tenant based, pilot rental assistance program.
Introduced,considered favorably on first reading,and ordered published this 6th day of July,
A.D. 2004, and to be presented for final passage on the 20th day of July, A.D. 2004.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading this 20th day of July, A.D. 2004.
Mayor
ATTEST:
City Clerk
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