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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/04/2007 - PUBLIC HEARING AND RESOLUTION 2007-104 APPROVING T ITEM NUMBER: 20 AGENDA ITEM SUMMARY DATE: December4, 2007 FORT COLLINS CITY COUNCIL STAFF: Ken Waido SUBJECT Public Hearing and Resolution 2007-104 Approving the Programs and Projects That Will Receive Funds from the Federal Community Development Block Grant (CDBG) Program and Home Investment Partnership (HOME) Program Grants, and the City's Affordable Housing Fund. RECOMMENDATION Staff recommends adoption of the Resolution. The CDBG Commission presents a list of recommendations as to which programs and projects should receive funding. FINANCIAL IMPACT The Community Development Block Grant (CDBG) Program and Home Investment Partnership (HOME)Program provide Federal funds from the Department of Housing and Urban Development (HUD) to the City of Fort Collins which can be allocated to housing and community development related programs and projects, thereby,reducing the demand on the City's General Fund Budget to address such needs. City funds for this item have been appropriated as part of the Affordable Housing Fund in December 2006. EXECUTIVE SUMMARY The Resolution will complete the fall cycle of the competitive process for allocating City financial resources to affordable housing programs/projects and community development activities. BACKGROUND This Resolution establishes which programs and projects will receive funding with CDBG and HOME funds for the FY 2007 Program year, which started on October 1, 2007, including the use of Cant'-over CDBG Entitlement Grant funds, Carry-over HOME funds, funds from the FY 2007 HOME Grant,funds from the HOME Community Housing Development Organization(CHDO)Set Aside, HOME Program Income, and funds from the City's Affordable Housing Fund. The CDBG Commission presents a list of recommendations as to which programs and projects should receive funding. December 4, 2007 -2- Item No. 20 The following table summarizes the amount and sources of available funds: AMOUNT SOURCE $361,920 FY 2006 CDBG Reprogrammed Funds 312,937 FY 2007 CDBG Unprogrammed Funds 120,187 FY 2006 HOME Reprogrammed Funds $172,499 FY 05/FY 06 HOME CHDO Reprogrammed Funds 480,792 FY 2007 HOME Grant 96,139 FY 2007 HOME CHDO Funds 50,000 FY 2007 HOME Program Income 83,000 FY 2006 Affordable Housing Fund 133,000 FY 2007 Affordable Housing Fund $1,810,474 Total Funding Available Reprogrammed funds are funds returned to the City from projects that were previously allocated funding but the project failed to materialize. Unprogrammed funds are from previous grants that have yet to be allocated to specific projects. HOME Community Housing Development Organization(CHDO)set aside funds represent a portion ofthe HOME grant that must be earmarked for CHDO agencies. The CDBG Commission presents recommendations as to which programs and projects should receive funding from the available funding sources presented above. The following tables present the allocations recommended by the Commission to the City Council within each major category: Affordable Housing Applicant Funding Commission's Unfunded Project/Program Request Recommendation Balance HO-1 City of Fort Collins— $250,000 $250,000 $0 Home Buyer Assistance HO-2 Fort Collins Housing $14,613 $0 $14,613 Corporation—First Step Expansion - Administration HO-3 Fort Collins Housing $192,144 $0 $192,144 Corporation—First Step Expansion HO-4 Neighbor-to-Neighbor $244,866 $244,866 $0 — Coachlight Driveway Parking Lot Repairs & Improvements Total $701,623 $494,866 $206,757 All funding recommendations in the Affordable Housing category are in the form of a"Due on Sale Loan + 5% Simple Interest Loan." December 4, 2007 -3- Item No. 20 Public Facility Applicant Funding Commission's Unfunded Project/Program Request Recommendation Balance PF-1 City of Fort Collins— $55,671 $55,671 $0 Crossroads Safehouse: Facility Safety Rehabilitation The funding recommendation in the Public Facilities category is in the form of a "Due on Sale Loan+ 5% Simple Interest Loan." A summary of the Commission's funding recommendations by category is presented in the following table: Recommended Funding % of Total Category $494,866 89.9% Affordable Housing $55,671 10.1% Public Facilities $550,537 100.0% Total Allocated to Programs and Projects The CDBG Commission has recommended that$550,537(30.4%)of the available funding amount of$1,810,474 be allocated leaving a balance of$1,259,937(69.6%)from all of the funding sources to be carried over and made available for allocation in the 2008 spring cycle of the competitive process. The following table summarizes the utilization of funds from all sources. Recommended Funding % of Total Category $550,537 30.4% Allocated to Programs and Projects $1,259,937 69.6% Carry-over to 2008 Spring Cycle $1 810 474 100.0% Total Funds Available ATTACHMENTS 1. Background and Summary of the CDBG Commission's Recommendations for Funding. 2. Background Information on the Competitive Process. 3. Affordable Housing Board's List of Priority Projects. 4. Background Information on the CDBG and HOME Federal Programs. 5. CDBG Commission's Comments on Proposal. 6. Formulation of Funding Recommendations Session. 7. PowerPoint presentation. ATTACHMENT 1 BACKGROUND AND SUMMARY OF CDBG COMMISSION'S RECOMMENDATIONS FOR FUNDING At the November 20, 2007, regular City Council meeting, the Council will be conducting a public hearing and consider the adoption of a resolution establishing which programs and projects will receive funding with Community Development Block Grant (CDBG), Home Investment Partnership (HOME), Affordable Housing Program funds for the FY 2007-2008 Program year. The resolution establishing which programs and projects will receive funds represents the culmination of the 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 2. Since early January of this year, the CDBG Commission and members of the City staffs Affordable Housing Team have conducted public hearings to assess community development and housing needs in Fort Collins, conducted technical assistance training workshops for applicants, and solicited applications for funding. The City's Affordable Housing Board reviewed the written applications for affordable housing projects and forwarded a priority ranking of proposals, as well as comments and questions, to the CDBG Commission. See Attachment 3 for a copy of the Board's materials sent to the CDBG Commission. The CDBG Commission, in addition to reviewing the written applications, personally interviewed each applicant, analyzed the applications, and formulated a list of recommendations to the City Council as to which programs and projects should receive 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 its 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 ImpactBenefit criteria provide greater rewards to proposals that target lower income groups. The Need/Priority criteria help assure the proposal meets adopted City goals and priorities. The Feasibility criteria reward projects for timelines and documented additional funding. The Leveraging Resources criteria reward proposals which will return funds to the City(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 who have completed successful projects in the past (have good track records). A sample ranking sheet used to assist the CDBG Commission and the Affordable Housing Board is also presented in Attachment 2. 1 The Commission also considered the funding guidelines contained in the Priority Affordable Housing Needs and Strategies report adopted by the Council on July 20, 2004. These guidelines include: • HOME funds should generally be allocated as follows: 90% for Housing projects and 10% for Program Administration. HUD HOME Program regulations also require the City to set aside 15% for Community Housing Development Organization (CHDO) projects and allow an allocation of 5% for CHDO operations; • CDBG funds should generally be allocated as follows: 65% for Housing projects; 15% for Public Services, and the balance for Public Facilities and Program Administration. • 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 $7,400 per unit, with relatively more funding to projects producing housing for lower income families. The CDBG and HOME Programs are ongoing grant administration programs funded by the Department of Housing and Urban Development (HUD). The City 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 is presented in Attachment 4. AVAILABLE FUNDS The following table summarizes the amount and sources of available funds: AMOUNT SOURCE $361,920 FY 2006 CDBG Reprogrammed Funds 312,937 FY 2007 CDBG Unprogrammed Funds 120,187 FY 2006 HOME Reprogrammed Funds $172,499 FY 05/FY 06 HOME CHDO Reprogrammed Funds 480,792 FY 2007 HOME Grant 96,139 FY 2007 HOME CHDO Funds AFY 2007 HOME Pro ram Income FY 2006 Affordable Housin Fund FY 2007 Affordable Housin Fund Total Funding Available 2 SELECTION PROCESS The selection process for the City's FY 20076-2008 Competitive Process began on January 11, 2007, when the CDBG Commission held a public hearing to obtain citizen input on community development and affordable housing needs. The City Planning and Community Development office placed legal advertisements in local and regional newspapers starting in July to solicit requests for housing and community development projects for FY 2007-2008. The application deadline was Thursday August 16, 2007. At the close of the deadline the City received five (5) applications requesting a total of approximately$757,294. Copies of all applications were forwarded through the City Manager's office to the City Council on September 6, 2007 and placed in the Council Office for review. Copies of the housing applications were distributed to the Affordable Housing Board and copies of all applications were distributed to the CDBG Commission. On Thursday September 13 the Affordable Housing Board conducted a special meeting to review the housing proposals and prepared a priority listing of applications to the CDBG Commission. On Thursday September 27 the Commission met to hear presentations and ask clarification questions from each applicant. The Commission then met on Thursday October 11 for the purpose of preparing a recommendation to the City Council as to which programs and projects should be funded for the FY 2007-2008 program year. At this meeting the Commission reviewed the written applications, the applicant's verbal presentation, the information provided during the question and answer session, and reviewed the performance of agencies who received funding in other previous years. The Commission then worked on the formulation of their list of recommendations. CDBG COMMISSION'S LIST OF RECOMMENDATIONS The Commission had to decide which applicants presented programs and projects which best fit the City's needs, had to insure funding allocations were kept within HUD regulations, and followed 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. AFFORDABLE HOUSING APPLICATIONS HO-1 CITY OF FORT COLLINS -HOME BUYER ASSISTANCE Request: $250,000(HOME Funds) Recommendation: $250,000 ($120,187 FY 06 HOME Funds, $79,813 FY 07 HOME Funds, and $50,000 HOME Program Income) This program is administered by the City Planning and Community Development Department and provides zero-percent interest, deferred loans to eligible first-time homebuyers. A five percent fee 3 is added to the loan balance at the time of repayment. The assistance covers down payment and closing costs to a maximum of$10,600 for households at 51%to 80% of Area Median Income. Approximately 45 households will be assisted with the program this year. HO-2 FORT COLLINS HOUSING AUTHORITY- FIRST STEP EXPANSION - HOMELESS INDIVIDUALS MENTAL HEALTH AND SUBSTANCE ABUSE ISSUES: ADMINISTRATION OF AFFORDABLE HOUSING FUNDS Request: $14,613 (Affordable Housing Funds) Recommendation: $0 Request for Administration funds from the Affordable Housing Fund for an expansion of the existing First Step tenant-based rental assistance (TBRA)program targeting single homeless or near homeless individuals with complex needs in conjunction with the Single Room Occupancy (SRO) or Integrated Dual Disorders Treatment (IDDT) programs. HO-3 FORT COLLINS HOUSING AUTHORITY- FIRST STEP EXPANSION - HOMELESS INDIVIDUALS MENTAL HEALTH AND SUBSTANCE ABUSE ISSUES Request: $192,144 (HOME Funds) Recommendation: $0 FCHA proposes to expand its First Step transitional housing assistance program in order to provide housing assistance for additional homeless and near homeless adults who have substance abuse and mental health issues and who are willing to participate in treatment. This expansion would supplement the existing First Step Program and the Single Room Occupancy(SRO) program. This effort is in coordination with the Community Mental Health and Substance Abuse Partnership of Larimer County with the Larimer Center for Mental Health (LCMH) as the primary partner agency. LCMH has submitted a five-year grant application to the Federal Substance Abuse and Mental Health Services Administration (SAMHSA) for an Integrated Dual Disorders Treatment(IDDT)program to serve this population. IDDT is an evidence-based treatment approach which has been successful in serving the "Library Park" individuals in other cities. If the SAMHSA grant is not successful, LCMH and the Partnership members are still committed to serving this population and the housing piece is critical to people's success. HO-4 NEIGHBOR TO NEIGHBOR COACHLIGHT PLAZA APARTMENTS DRIVEWAY & PARKING LOT REPAIRS & IMPROVEMENTS Request: $244,866 (HOME Funds) Recommendation: $244,866 (CDBG Funds) Neighbor to Neighbor(N2N) is seeking assistance to preserve existing affordable housing at Coachlight Plaza Apartments, which has 68 project-based Section 8 units. In the past year, N2N has begun work on Phase I of curb, gutter and sidewalk repairs to improve ADA accessibility and 4 neighborhood safety by adding cut-ins for wheelchair access and repairing cracked and damaged sidewalks and curbs. N2N prioritized these safety and accessibility improvements in the first phase of repairs to the sidewalks and curbs for their 2006 request, and is now seeking funds for Phase II, which will include full asphalt replacement, the addition of speed bumps, sealing & striping, and addition of signage to include handicapped parking, fire lane, no parking, speed limit, and visitor parking. PUBLIC FACILITY APPLICATIONS PF-1 CITY OF FORT COLLINS, ON BEHALF OF CROSSROADS SAFEHOUSE: CROSSROADS FACILITIES SAFETY REHABILITATION Request: $55,671 (CDBG Funds) Recommendation: $55,671 (CDBG Funds) Crossroads Safehouse requests target safety and security issues for: 1. alarms for: a) 33 bedroom and upstairs windows,b) 6 windows in staff offices on the first floor; and c) 2 basement windows; 2. an intercom system to notify of an intruder, explosion, flooding, danger or natural disaster, including fire; 3. replacement of tom, uneven, waffling and dangerous first-floor carpeting with ADA- appropriate flooring; 4. replacement of inadequate front door and adjacent unalarmed pane glass window; 5. four additional cameras that will make visible four currently invisible potential Safehouse break-in locations; 6. exterior perimeter lighting, i.e., via photo cells; and 7. replacement of the existing security fence for the facility. A summary of the Commission's funding recommendations by category is presented in the following table: Recommended Funding % of Total Category $494,866 89.9% Affordable Housing $55,671 10.1% Public Facilities $550,537 100.0% Total Allocated to Programs and Projects The CDBG Commission has recommended that $550,537 (30.4%) of the available funding amount of$1,810,474 be allocated leaving a balance of$1,259,937 (69.6%) from all of the funding sources to be carried over and made available for allocation in the 2008 spring cycle of the competitive process. The following table summarizes the utilization of funds from all sources. Recommended Funding % of Total Category $550,537 30.4% Allocated to Programs and Projects $1,259,937 69.6% Cary-over to 2008 Spring (CDBG Funds) $1,810,474 100.0% Total Funds Available 5 The CDBG Commission has recommended full funding for two (2) affordable housing proposals and full funding for the one public facility proposal. The Commission has also recommended no funding for two (2) affordable housing proposals. In the Commission's opinion, the two applications recommended for full funding all fit the City's funding objectives, the selection criteria, and the funding guidelines while the two applications recommended to not receive funding did not meet the criteria. The Commission did not recommend funding for all applications simply because there were sufficient funds to cover all requests. The Commission's reasons for full or no funding are presented in Attachment 5. The carry-over amount of$1,053,180 may seem high. However, staff has received information indicating the Housing Authority and CARE Housing are preparing to submit proposals in the 2008 Spring cycle of the competitive process requesting over $2.2 million. The Authority and CARE requests do not include potential amounts from Habitat for Humanity or Neighbor-to- Neighbor, agencies that also traditionally apply to the City for funding assistance. Attachment 6 contains information on how the Commission's session where they formulate their funding recommendations was to be conducted. 6 ATTACHMENT 2 Background Information on the Competitive Process for the Allocation of City Financial Resources to Affordable Housing Programs/Projects and Other Community Development Activities In February of 1999, the City Council approved the initial Priority Affordable Housing Needs and Strategies report,which contained the following strategy: Change from an administrative funding mechanism...to a competitive application process for the Affordable Housing Fund. Between September and November of 1999, a subcommittee consisting of members from the Affordable Housing Board and the Community Development Block Grant (CDBG) Commission met with staff to review issues and develop options for establishment of a Competitive Process. In addition, the staff solicited ideas from existing affordable housing providers. The subcommittee established the following Mission Statement for their work: Develop a competitive application process and establish a set of shared criteria for the allocation of the City's financial assistance resources to affordable housing projects/programs that address the City's priority affordable housing needs. Competitive Process Five options for a Competitive Process were reviewed and discussed by the subcommittee. The subcommittee reached a general consensus to support a Competitive Process that involved both the Affordable Housing Board and the CDBG Commission. The option selected would have the Affordable Housing Board providing recommendations to the City Council in regards to affordable housing policy. In addition, the option would have the Affordable Housing Board reviewing all affordable housing applications for CDBG, HOME and Affordable Housing funds. The Board would then provide a priority listing of proposals to the CDBG Commission. The CDBG Commission would then make the final recommendations to the City Council for funding. Funding Cycles The subcommittee also agreed that there should be two funding cycles per year, one in the spring and the other in the fall. CDBG Program funds would be allocated in the spring to affordable housing programs/projects and other community development activities (public services, public facilities, etc.). HOME Program and Affordable Housing funds would be allocated in the fall primarily to affordable housing programs/projects. 7 The staff and subcommittee agreed that overlaying the new process and cycles would be heightened staff technical assistance to applicants. Both the subcommittee and staff recognize that a semi-annual process will require additional meetings by both the CDBG Commission and Affordable Housing Board, and will require more time from current City staff, and increase the City Council's involvement. Schedule The subcommittee also discussed two alternative schedules for the funding cycles. The option selected incorporates a spring cycle that starts in January and ends in May, and a fall cycle that starts in July and ends in November. Review Criteria The subcommittee also discussed and agreed to a new set of review criteria to be used to rank proposals. The criteria are divided into the following five major categories: 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 and provide longer benefits. The Need/Priority criteria help assure the proposal meets adopted City goals and priorities. The Feasibility criteria reward projects for timeliness and documented additional funding. The Leveraging Resources criteria reward proposals which will return funds to the City(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). See next page for a detailed criteria scoring sheet. Application Forms Three application forms have also been developed. One form for Housing proposals, one form for Public Facility proposals, and one form for Public Service proposals. City Council Adoption On January 18, 2000, the City Council approved Resolution 2000-13, formally adopting the Competitive Process for the allocation of City financial resources to affordable housing programs/projects and community development activities and the component parts discussed above. 8 RANKING CRITERIA The ranking criteria are divided into five major categories. Each category is given a total number of points that has been weighed according to its importance with respect to local and federal priorities. Im act/Benerrt maximum 30 Dointsl 1. Primarily targets low incomepersons? 0-10 (all units 0-30%of AMI= 10 pis;at least half of the units at or below 30%of AMI and the remaining units at 31-50%of AMI=8 pts;at least half of the units at 31-50%of AMI and at least half of the units at 51-60%of AMI=6 pts; at least half of the units at 51-60%of AMI and half the units at 61-80%of AMI=4 is;all units between 61-80%AMI=2 is 2. Project produces adequate community benefit related to cost? (0-5) Does the project provide assistance for persons to gain self-sufficiency or maintain independence,or 3. serve a special population? (0-5) 4. Does the project provide lon -term benefit or affordability? (0-10) 1-10 s=3 pts, 11-19 yrs=6 pts, 20-30 s=8 pts,permanent= 10 is Sub-total Need/Priority maximum 15 polatsl 1. Meets a Consolidated Plan priority? 0-5) 2. Project meets goals or objectives of City Plan and Priority Needs and Strategies study? 0-5 3. Has the applicant documented efforts to secure other funding? 0-5) Sub-total Feasibilit maximum 15points) 1. The preject will be completed within the required timeperiod? (0-3 2. Project budget is justified? Costs are documented and reasonable. 0-4) 3. The level of public subsidy is needed? Private funds are not available.) 0-4 4. Has the applicant documented efforts to secure other funding? (0-4) Sub-total Leveraging Resources maximum 20 poinLsi 1. Does theproject-allow the reuse of our funding? 0-10 A. Princi al and interest(30-year amortization or less) 10 oint B. Princi al and no interest or principal and balloon payment(repayment) 6 points C. Due-on-sale loan 4 points 2. PT ectlevera es other financial resources? Includin in-kind (0.10 A. Less than 1:1 0 points B. 1:1 to 1:3 4 points C. 1:4 to 1:6 7 points D. More than 1:7 10 poini Sub-total CaDacity and History maximum 20 DOintSJ 1. Applicant has the capacity to undertake the Proposed roject? 0-10) 2. If previously funded,has the applicant completed prior projects and maintained regulatory compliance? 0-10 3. If new,applicant has capacity to maintain regulatory compliance? (0-20 Sub-total GRAND TOTAL 9 ATTACHMENT After careful review and discussion of the housing applications, the Fort Collins Affordable Housing Board established a list of priorities as a means for assisting the CDBG Commission as they prepare for applicant interviews. The following table presents the Board's listing of priority projects, the applicant's initial funding request, and the CDBG Commission's funding recommendation. AHB's Ranking Applicant's CDBG of Priority Project Initial Funding Commission's Unfunded Projects Request Recommendation Balance 1 HO-1 City of $250,000 $250,000 $0 Fort Collins— Home Buyer Assistance 2* HO-2 Fort $14,613 $0 $14,613 The Affordable Collins Housing Housing Board Corporation— considered these First Step two requests Expansion - together as one Administration re nest. 2* HO-3 Fort $192,144 $0 $192,144 The Affordable Collins Housing Housing Board Corporation— considered these First Step two requests Expansion together as one request. 4 HO-4 Neighbor- $244,866 $244,866 $0 to-Neighbor— Coachlight Driveway Parking Lot Repairs & Improvements 10 ATTACHMENT 4 ADDITIONAL BACKGROUND INFORMATION on the COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM CDBG PROGRAM NATIONAL OBJECTIVES The primary objective of the CDBG Program is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities,principally for persons of low and moderate income. Programs and projects funded with CDBG funds must address at least one of the following three broad National Objectives: (1) provide a benefit to low or moderate income households or persons, (2) eliminate or prevent slum and blight conditions, or (3) meet urgent community development needs which pose an immediate and serious threat to the health and welfare of the community. Presented below is a comparison of City CDBG expenditures for programs and projects categorized according to the National Objectives: National Objectives Low/Moderate Slum/Blight Urgent Income Benefit Elimination Need National Average 90% 10% 0% City Expenditures for: 2006 100% 0% 0% 2005 100% 0% 0% 2004 100% 0% 0% 2003 100% 0% 0% 2002 100% 0% 0% 2001 100% 0% 0% 2000 100% 0% 0% 1999 100% 00X 0% 1998 100% 1997 100% 1 0% 0% CDBG PROGRAM ELIGIBLE ACTIVITIES CDBG funds can be used on a wide range of activities including: (1) acquiring deteriorated and/or inappropriately developed real property (including property for the purpose of building new housing); (2) acquiring, constructing, rehabilitating or installing publicly owned facilities and improvements; 11 (3) restoration of historic sites; (4) beautification of urban land; (5) conservation of open spaces and preservation of natural resources and scenic areas; (6) housing rehabilitation can be funded if it benefits low and moderate income people; and (7) economic development activities are eligible expenditures if they stimulate private investment of community revitalization and expand economic opportunities for low and moderate income people and the handicapped. Certain activities are ineligible, under most circumstances, for CDBG funds including: (1) purchase of equipment, (2) operating and maintenance expenses including repair expenses and salaries, (3) general government expenses, (4) political and religious activities, and (5) new housing construction. 12 ADDITIONAL BACKGROUND INFORMATION on the HOME INVESTMENT PARTNERSHIP PROGRAM HOME INVESTMENT PARTNERSHIP PROGRAM GUIDELINES (Adopted by the Fort Collins City Council, July 18, 1995) PURPOSE: The purpose of the Home Investment Partnership (HOME)Program is to increase the supply of decent, safe, and affordable housing in the City of Fort Collins for an extended period of time. All of the HOME funds must benefit low and very low income households which are defined by the Department of Housing and Urban Development as having a total household income not exceeding 80% of the median household income for the Fort Collins area. ELIGIBLE PROJECTS: HOME funds must be used in the following ways: 1. DIRECT HOUSING ASSISTANCE: Down payment assistance: To help low-income individuals to purchase housing for their principal residence. Applicants must meet income guidelines of no more than 80% of the current median household income for the Fort Collins area and will be required to attend a homebuyer workshop. Assistance is in the form of zero percent deferred loan up to a maximum of$10,000 to help cover downpayment and closing cost expenses. The funding o is repaid with a 5/o simple interest charge when the property is sold or transferred out of the buyer's name. Restrictions will apply which will assure the property remains affordable. This is accomplished by the "recapturing" of the HOME investment. Tenant based rental assistance: To help low-income households avoid eviction and homelessness, TBRA provides up to two years of housing subsidy and case management services to stabilize households and put them on the road to self-sufficiency. 2. NEW CONSTRUCTION of units for homeownership as well as rental occupancy targeted for low-income individuals and families which are developed, sponsored, or owned by community housing development organizations (CHDOs), non-profit agencies, and for- profit developers. 3. ACQUISITION of undeveloped, or developed, land resulting in the development or purchase of units for homeownership as well as rental occupancy. All regulations regarding income guidelines, purchase price limitations, resale limitations, rental rates, etc., will apply to acquisition projects. 13 ELIGIBLE PROPERTY TYPES: Eligible property types for purchase include both existing property or newly constructed homes. Eligible property includes a single-family property, a condominium unit, a manufactured home (including mobile homes on a permanent foundation), or a cooperative unit. For purposes of the HOME program, homeownership means: (1) ownership in fee simple title, or (2) a 99 year leasehold interest, or (3) ownership or membership in a cooperative, or (4) an equivalent form of ownership which has been approved by the Department of Housing and Urban Development. The value and purchase price of the HOME assisted property to be acquired must not exceed 95% of the area median purchase price for that type of housing as established by HUD. RECAPTURE RESTRICTIONS WILL APPLY. (The value must be verified by a qualified appraiser or current tax assessment.) Initial purchase price limit established by HUD is currently $212,015. HOME PROGRAM PRIORITIES The 2005-2009 Consolidated Plan identifies the following priorities for housing related needs: 1. Stimulate housing production for very low, low and moderate income households. 2. Increase home ownership opportunities for very low, low and moderate income households. 3. Increase the supply of public housing for families and those with special needs. Implementation and funding of activities to address these priorities will come, in part, from the City of Fort Collins HOME Investment Partnership Program. 14 ATTACHMENT 5 r 11 , 2007 r � � Commission members present: Bob Browning, Chair Eric Berglund, Vice-Chair Jeff Taylor Kay Rios Cynthia Torp Dennis Vanderheiden Jennifer Wagner Tom LeSavage Staff: Ken Waido Heidi Phelps Julie Smith Sharon Thomas 15 MEETING HIGHLIGHTS Mr. Browning called the meeting to order at 6:00 p.m. Preliminary comments were made. Although monies exist to fund each of the applicants on this cycle, the Commission reaffirmed its belief that it bears a fiduciary responsibility to City Council and the taxpayers to be prudent in its funding decisions. Funding recommendations are to be made based on the merits, or lack thereof, of each program and not because funds are available. In the Commission's view, the one project not recommended for funding, the Fort Collins Housing Authority's First Step Expansion Program, is not a housing proposal at all: it is a counseling program, a substance-abuse program, or a case management program — but not a housing program. With this in mind, the success of the program isn't measured by how many people receive housing, but in how many people achieve the goals of the program, and these goals, as well as the program success rate to date, are insufficiently delineated. The applicant could not provide sufficient evidence to justify maintaining the existing program, much less its expansion. More importantly, because the City has already maximized the amount of administrative funding taken from Federal grants, the only money left is the Affordable Housing Fund. This fund was not intended to pay salaries, especially salaries of people already employed by the FCHA. Following discussion, moved by Ms. Rios, seconded by Mr. Berglund: To adopt the proposed funding recommendations for presentation to City Council. Motion carried unanimously. The meeting adjourned at 6:30 p.m. 16 HOUSING HO-1 City of Fort Collins - Homebuyer Assistance. Request: $250,000 Moved by Ms. Wagner, seconded by Ms. Rios: To recommend full funding. Given the current state of the economy and lack of availability in conventional financing, this program represents an absolute need. The starter home market will also see more home buyers, given the current economy and climate in the mortgage industry. It is likely that the demand will exceed this level of funding. A concern does exist for the amount of administrative costs being funded. Motion approved unanimously. Funding recommendation: $250,000 HO-2 FCHC: First Step Expansion - ADMIN Request: $14,613 Moved by Ms. Rios, seconded by Mr. Browning: To recommend no funding. The element of administrative costs is particularly challenging. The Affordable Housing Fund was not established in order to pay salaries, and this portion of the request would constitute a departure from the intended use of those funds. The original intent of the Fund was to pay for bricks, sticks, and to cover the gap in federal housing programs. Unfortunately, tenant-based rental assistance (TBRA) cannot be funded as a Public Service through CDBG. Short-term rental assistance available under CDBG is limited to three months or less. HOME does have a specific category for this use. However, the only other resource for TBRA administration is through the City's overall HOME administrative budget, which is already at maximum. Motion carried 7-0, with one abstention. Funding recommendation: $0 HO-3 FCHC: First Step Expansion Request: $192,144 Moved by Mr. Taylor, seconded by Ms. Rios: To recommend no funding. 17 The project itself could well be valuable and needed on its own. The program's success, however, hasn't been adequately demonstrated. Additionally, the Commission traditionally provides housing funds to create and preserve affordable housing inventory and structures its funding allocations to recoup its investment. The presentation made reference to a four- to six-year process for a given participant. Perhaps the biggest issue with this application is the funding request encompassing a project over a two-year time period representing funding for a program that, once implemented, cannot be sustained. The funding request for the first two years will not generate the monies needed for the projected longer timeline. Self-sufficiency was stated as not being a goal of the program, but no long range goals were given. The applicant's presentation did not resolve questions of feasibility and viability of the program as a whole. The first program funded for 2006 is still unproven in its results, and the project should reach some measurable goals before being considered for expansion, in terms of City funding. The start of the initial project was hampered because of other funding delays and front-end issues with identifying and gathering the right people for the program. The number of security deposits requested (48) versus the number needed (24) is not only a concern from a fiscal prudence standpoint, but speaks to client instability. The Commission discussed a reduction in recommended funding, looking at a lesser funding amount for the security deposit portion, in particular. However, the applicant's funding request stated a "Full Funding Only" proviso. Lastly, the Commission is not suggesting that this program not be funded, only that it should not be funded now. There might be, given adequate proof of prior success, a place for funding the expansion of this project in the future. Motion carried, 7-0, with one abstention. Funding recommendation: $0 HO-4 Neighbor to Neighbor: Coachlight Driveway Parking Lot Repairs and Improvements Request: $244,866 Moved by Ms. Rios, seconded by Mr. Berglund: To recommend full funding. The applicant provides decent, affordable housing. The renovations on the property are an indication of the good efforts to keep the property at that level and set that standard. The applicant helps to maintain affordable housing inventory and has made great strides in putting its finances in order. The program has a good track record that encourages 18 continued support. This program serves the housing needs of low-income residents of the City. Motion carried 6-1, with one abstention. Funding recommendation: $244,866 PUBLIC FACILITIES PF-1 City of Fort Collins/Crossroads Safehouse: Facility Safety Rehab Request: $55,671 Moved by Mr. Berglund, seconded by Ms. Torp: To recommend full funding. This is a program that provides a great service for the community without duplication elsewhere. While this is a City-owned facility with an overarching need for continued, maintenance, this program maximizes its dollars for the fundamentals of their program with the result that some upkeep cannot be done on the remaining budget. The safety issue is an additional call for funding support. A significant amount of CDBG money has already been invested in this property, and the work needs to be finished. However, in terms of repayment from a property sale standpoint, the amount of CDBG funding already invested exceeds, or will soon exceed, market value of the properties. Future CDBG monies invested would, in effect, function as a grant rather than the intended due on sale loans. Motion carried unanimously. Funding recommendation: $55,671 Report produced by Meadors Court Reporting, LLC 315 West Oak Street, Suite 710 Fort Collins, Colorado 80521 970.482.1506 970.482.1230 fax meadors()renorterworks.com e-mail 19 ATTACHMENT6 City of Fort Collins Community Development Block Grant (CDBG) Commission Formulation of FundinE Recommendations Session The CDBG Commission has prepared this hand-out to help you to understand how the Commission's meeting for the purpose of formulating funding recommendations to the City Council is conducted. It is the Commission's wish that our methodology be understandable to even the most casual observers. As you might imagine, the entire process is complex and time- consuming, especially given that grant requests greatly exceed the amount of available funding. City Staff will prepare an electronic matrix showing each application, the funding requested, and the total funds available. The Commission will discuss the pros and cons of every application. The order which applications are discussed is not important and there is no danger of `running out' of funds before all applications are fully discussed. There will be preliminary funding motions made, seconded, and approved throughout the process and these recommendations will be added into the matrix. It must be emphasized that the matrix is a working document, and any figures used, whether they be for full, partial, or zero funding, are for discussion purposes only. It is also possible that the total funds listed in the matrix might exceed the total of funds available at any point in the process. After each application has been discussed, the Commission will start to adjust the matrix to start producing its recommendation for funding to Council. Funding contained on the matrix may be drastically changed in either a positive or negative manner during this part of the process. When the Commission agrees on the matrix as indicated by a motion to accept it, a second to the motion, and a positive majority vote, the process is over and the recommendation will be forwarded to the Council. While the Commission's main purpose is to provide Council with the best funding alternative, the Commission is also sensitive that the funds being recommended for expenditure are taxpayer- provided. For this reason, it is entirely possible that not all funds will be recommended for expenditure, even if there are some applicants recommended for zero, or reduced, funding. The last point to be made is while this meeting is open to the public, to be fair to applicants who are not present at the meeting, no public comments will be taken. 21 2007 FALL CYCLE COMPETITIVE PROCESS Allocating City Financial Resources to Affordable Housing Programs and Community Development Activities AVAILABLE FUNDING AMOUNT SOURCE $674,857 CDBG Program 747,118 HOME Program 172,499 HOME CHDO 216,000 City's Affordable Housing Fund $1,810,474 TOTAL FUNDING AVAILABLE 1 APPLICATIONS RECEIVED CATEGORY NUMBER of REQUESTED PROPOSALS FUNDING Affordable 4 $701 ,623 Housing Public Facilities 1 $55,671 TOTALS 5 $757,294 R REVIEW PROCESS • Affordable Housing Board — Reviews Written Affordable Housing Proposals — Provides Listing of Priority AH Projects • CDBG Commission — Reviews All Written Proposals — Interviews Each Applicant — Provides Funding Recommendations to the City Council • City Council — Final Decision on Funding Allocations 2 SUMMARY OF THE CDBG COMMISSION'S FUNDING RECOMMENDATIONS RECOMMENDED % of FUNDING TOTAL CATEGORY $494,866 89.9% Affordable Housing $55,671 10.1% Public Facilities $550,537 100.0% TOTAL ALLOCATED $550,537 30.4% Total Allocated $1 ,259,937 69.6% Carry-over to 2008 $1,810,474 100.0% AVAILABLE FUNDS 3 RESOLUTION 2007-104 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE PROGRAMS AND PROJECTS THAT WILL RECEIVE FUNDS FROM THE FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIP (HOME) GRANTS, AND THE CITY'S AFFORDABLE HOUSING FUND WHEREAS, the Community Development Block Grant (CDBG) Program and the Home Investments Partnership (HOME) Program are ongoing grant administration programs funded by the Department of Housing and Urban Development (HUD); and WHEREAS, the City of Fort Collins has received CDBG Program funds since 1975 and HOME funds since 1993; and WHERAS,the City Council has budgeted General Fund dollars into an Affordable Housing Fund for use in assisting affordable housing programs/projects; and WHEREAS,on January 18,2000,the City Council approved Resolution 2000-013,formally adopting a competitive process for the allocation of City financial resources to affordable housing programs/projects and community development activities; and WHEREAS,since January 2007,the CDBG Commission has held a public hearing to obtain citizen input on community development and affordable housing needs,and has heard presentations and asked clarification questions from each applicant that submitted a proposal to the City requesting funding; and WHEREAS, the CDBG Commission met in a special meeting for the purpose of preparing a recommendation to the City Council as to which programs and projects should be funded with carry-over CDBG Entitlement Grant funds, Carry-over HOME funds, funds from the FY 2007 HOME Grant,funds from the HOME Community Housing Development Organization(CHDO)Set Aside, HOME Program Income, and funds from the City's Affordable Housing Fund. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the administration is authorized to submit an application to HUD as follows: AFFORDABLE HOUSING FY 06 CDBG Entitlement Grant $244 866 Neighbor-to-Neighbor—Coachlight Driveway Parking Lot Repairs FY 06 HOME Grant $120 187 City of Fort Collins—Home Buyer Assistance Program FY 07 HOME Grant $79 813 1 City of Fort Collins—Home Buyer Assistance Program FY 07 HOME Program Income $50 000 1 City of Fort Collins—Home Buyer Assistance Program PUBLIC FACILITIES FY 06 CDBG Entitlement Grant $55 671 I Crossroads Safehouse—Facility Safety Rehabilitation Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 4th day of December, A.D. 2007. Mayor ATTEST: City Clerk