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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/17/2009 - PUBLIC HEARING AND RESOLUTION 2009-103 APPROVING T f DATE: November 17, 2009 AGENDA ITEM SUMMARY -, STAFF: Ken Waido FORT • Public Hearing and Resolution 2009-103 Approving the Programs and Projects That Will Receive Funds from the Federal Community Development Block Grant(CDBG)and Home Investment Partnerships(HOME) Programs, and the City's Affordable Housing Fund. EXECUTIVE SUMMARY The Resolution will complete the fall cycle of the competitive process for allocating $1,001,776 of City financial resources to affordable housing and community development programs/projects. BACKGROUND / DISCUSSION This Resolution establishes which programs and projects will receive funding for the FY 2009 Program year, which started on October 1, 2009, including the use of HOME grant funds and program income, carry-over FY 2009 CDBG funds,and funds from the City'sAffordable Housing Fund. The CDBG Commission presents a list of recommendations as to which programs and projects should receive funding. The following table summarizes the amount and sources of available funds: AMOUNT SOURCE $515,230 FY 2009 HOME Grant 103,046 FY 2009 HOME CHDO Funds 34,385 FY 2009 HOME Program Income 88,865 FY 2009 CDBG Unprogrammed 119,350 FY 2009 Affordable Housing Fund 140,900 FY 2008 Affordable Housing Fund Unprogrammed $1,001,776 Total Funding Available Community Housing Development Organization (CHDO) funds are HOME grant funds required to be specifically earmarked for use by CHDOs in the City. City CHDOs include CARE Housing, Neighbor-to-Neighbor, and the Fort Collins Housing Corporation. Unprogrammed funds are funds from a funding source that have yet to be allocated to specific projects. The CDBG Commission presents recommendations as to which programs and projects should receive funding from the available funding sources presented above. The following table presents the allocations recommended by the Commission to the City Council: November 17, 2009 -2- ITEM 16 AFFORDABLE HOUSING Applicant Funding Commission's Unfunded Percentage of Project/Program Request Recommendation Balance Request Funded HO-1 CARE — PROVINCETOWNE $700,000 $505,011 $194,989 72.1% INFRASTRUCTURE HO-2 CITY —HOME BUYER ASSISTANCE $100,000 $100,000 $0 100% (RENTALS) HO-3 FCHA— $167,900 TENANT-BASED $167,900 (Grant) $0 100% RENTAL ASSISTANCE HO-4 FCHA—TBRA $40,000 $40,000 $0 100% ADMINISTRATION (Grant) HO-5 HABITAT FOR HUMANITY—LAND $75,000 $63,865 $11,135 85.2% ACQUISITION HO-6 LOVELAND $100,000 HOUSING AUTHORITY $100,000 (Grant) $0 100% — LHIP PROGRAM TOTAL $1,182,900 $976,776 $206,124 82.6% PUBLIC FACILITIES Applicant Funding Commission's Unfunded Percentage of Project/Program Request Recommendation Balance Request Funded PF-1 NEIGHBOR TO NEIGHBOR— $60,500 $25,000 $35,500 41.3% PLAYGROUND & LANDSCAPING Except for the grants noted above, funding recommendations in the Affordable Housing and Public Facility categories are in the form of a "Due on Sale Loan + 5% Simple Interest Loan." The following table summarizes the utilization of funds from all sources. - Recommended Funding % of Total Category $976,776 97.5% Affordable Housing Programs and Projects 25,000 2.5% Public Facilities Project $1,001,776 100.0% Total Funds Available November 17, 2009 -3- ITEM 16 FINANCIAL IMPACTS The Home Investment Partnership (HOME) and Community Development Block Grant (CDBG) Programs 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 2007. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BOARD / COMMISSION RECOMMENDATIONS The CDBG Commission presents a listof recommendations as to which programs and projects should receivefunding. The CDBG Commission has recommended that $1,001,776 (100.0%) of the available funding be allocated with $976,776(97.5%)going to Affordable Housing programs and projects and$25,000(2.5%)going to Public Facilities. PUBLIC OUTREACH HUD's CDBG and HOME rules and regulations require the City to place a legal notice in a local newspaper listing the proposed funding for the federally funded programs and projects and inviting the public to submit comments. Such a notice was published in the Fort Collins Coloradoan and no comments were received by the City. 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 ATTACHMENT I BACKGROUND AND SUMMARY OF CDBG COMMISSION'S RECOMMENDATIONS FOR FUNDING At the November 17, 2009, 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 from the federal Home Investment Partnership (HOME) and Community Development Block Grant (CDBG) Programs and the City's Affordable Housing Fund for the FY 2009 Program year. The resolution establishing which programs and projects will receive funds represents the culmination of the fall cycle of the 2009 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 staff s 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. Impact/Benefit 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 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 1 l Commission and the Affordable Housing Board is also presented in Attachment 2. 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 $515,230 FY 2009 HOME Grant 103,046 FY 2009 HOME CHDO Funds 34,385 FY 2009 HOME Program Income 88,865 FY 2009 CDBG Unprogrammed 119,350 FY 2009 Affordable Housing Fund 140,900 FY 2008 Affordable Housing Fund Unprogrammed $1,001,776 Total Funding Available Unprogrammed funds are funds from a funding source that have yet to be allocated to specific projects. 2 SELECTION PROCESS The selection process for the City's FY 2009 Competitive Process began on January 8, 2009, when the CDBG Commission held a public hearing to obtain citizen input on community development and affordable housing needs. The City's Advance Planning Department placed legal advertisements in local and regional newspapers starting in July to solicit requests for housing and community development projects for FY 2009. The application deadline was Thursday August 20, 2009. At the close of the deadline the City received seven (7) applications requesting a total of approximately $1,243,400. Copies of all applications were forwarded through the City Manager's office to the City Council on September 3, 2009 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 24, 2009, 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 24 the Commission met to hear presentations and ask clarification questions from each applicant. The Commission then met on Thursday October 8, 2009, for the purpose of preparing a recommendation to the City Council as to which programs and projects should be funded for the FY 2009 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 funding recommendations. AFFORDABLE HOUSING APPLICATIONS HO-1 CARE Housing—Provincetowne On-site Infrastructure Amount of request. $700,000 Funding Recommendation: $505,011 HOME and Affordable Housing funds, due on sale loan, 5%simple interest loan CARE `s application in the amount of$700,000 is for a portion of the on-site infrastructure construction costs for Provincetowne, a new construction, 85-unit"Green Communities" multi- 3 family affordable housing rental development, targeted towards families between 30% - 50% of Area Median Income (AMI). The Provincetowne site is located near the intersection of Trilby Road and Lemay Avenue, at the southern edge of Fort Collins. The entire project will eventually total 156 units. HO-2 City of Fort Collins—Home Buyer Assistance-Rentals Amount of request: $100,000 Funding Recommendation: $100,000 Affordable Housing funds, due on sale loan, 5% simple interest loan The City of Fort Collins Advance Planning Department administers a Home Buyer Assistance Program that provides downpayment assistance to households between 51-80% of AMI. The application requests $100,000 from the Affordable Housing Fund because non-federal funding allows the program to provide downpayments to households purchasing properties that have been recent rentals and are not eligible for federal funding. HO-3 Fort Collins Housing Authority—Tenant-Based Rental Assistance Amount of request: $167,900 Funding Recommendation: $167,900 HOME funds, grant The Fort Collins Housing Authority's application is for rental assistance to support chronically homeless people who have severe mental illness and substance use disorders and who are receiving comprehensive treatment and case management provided by Community Dual Disorders Team. The request for$167,900 would subsidize housing for at least 12 chronically homeless individuals/families. HO-4 Fort Collins Housing Authority—Tenant-Based Rental Assistance-Administration Amount of request: $40,000 Funding Recommendation: $40,000 Affordable Housing funds, grant The Fort Collins Housing Authority is requesting $40,000 from the Affordable Housing Fund for housing assistance administration that supports the currently requested Tenant Based Rental Assistance funds for the Community Dual Disorders Team participants. The housing eligibility, compliance, coaching, housing search, lease negotiations, housing retention and re-housing issues are among the functions of the administrative support. HO-5 Habitat for Humanity—Land Acquisition Amount of request: $75,000 Funding Recommendation: $63,865 FY 09 CDBG funds, due on sale.loan, 5% simple interest loan Habitat for Humanity is requesting $75,000 to purchase four lots in the Geothermal Community, 4 Union Place, located west of N. College Avenue and south of Willox Lane. A contract exists between Habitat and Merten, Inc. (project developer) and it is Habitat's intention to build LEED- certified homes. 110-6 Housing Authority of Loveland—Larimer Home Improvement Program (LHIP) Amount of request: $100,000 Funding Recommendation: $100,000 Affordable Housing funds, grant LHIP offers single family, owner occupied households with incomes at 80% or below of AMI, loans at 0-5% interest rates to make needed repairs, specifically aimed at health, safety, over- crowding, and energy efficiency. The program offers up to $24,999 with flexible terms to fit within the household's budget. This request will be used to serve households within Fort Collins. Of the total requested amount, $80,000 will be used for the program and the remaining $20,000 will be used for administrative costs. PUBLIC FACILITY APPLICATIONS PF-1 Neighbor to Neighbor—Playground/Landscaping Amount of request: $60,500 Funding Recommendation: $25,000 FY 09 CDBG funds, due on sale loan, 5% simple interest loan Neighbor to Neighbor aims to improve the safety, structural, aesthetic, and environmental features of outdoor spaces at Coachlight Plaza Apartments by replacing outdated, unsafe playground equipment and creating low-maintenance landscaping and xeriscaping in the common areas. The apartment community is home to over 100 low-income children that would benefit from the. improvements. The CDBG Commission has recommended full funding for four (4) of the six (6) affordable housing proposals and partial funding for the one public facility proposal. The Commission's reasons for full or partial funding are presented in Attachment 5. The CDBG Commission has recommended that $1,001,776 (100.0%) of the available funding be allocated with $976,776 (97.5%) going to Affordable Housing programs and projects and $25,000 (2.5%) going to Public Facilities. The following table summarizes the utilization of funds from all sources. Recommended Funding % of Total Category $976,776 97.5% Affordable Housing Programs and Projects 25,000 2.5% Public Facilities Project $1,001,776 100.0% Total Funds Available Attachment 6 contains information on how the Commission's session where they formulate their funding recommendations was conducted. 5 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. 6 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. Impact/Benefit 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. 7 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/Benefit maximum 30 oints 1. Primarily targets low incomepersons? (0-10) (all units 0-30%of AMI= 10 pts; 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=4pts;all units between 61-80%AMI=2pts) 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 long-term benefit or affordability? (0-10) (1-10 yrs=3 pts, 11-19 yrs=6 pts,20-30 yrs=8 pts,permanent= 10pts) Sub-total 0 Need/Priorit maximum 15 oints 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 0 Feasibilit maximum 15 oints 1. I The project will be completed within the required timeperiod? (0-3) 2. Project bud et 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 0 Le ernine Resources maximum 20 oints 1. Does the project allow the reuse of our funding? (0-10) 10 A. Principal and interest(30-year amortization or less) oints 6 B. Principal and no interest or principal and balloon payment(repayment) points 4 C. Due-on-sale loan points 2. Project leverages other financial resources?(including in-kind) (0-10) 0 A. Less than 1:1 oints 4 B. 1:1 to 1:3 oints 7 C. 1:4 to 1:6 oints 10 D. More than 1:7 points Sub-total 0 Canacitv and History maximum 20 oints 1. Ap licant has the capacity to undertake the proposedproject? (0-10) 2. If p eviously 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 0 GRAND TOTAL 0 8 ATTACHMENT 3 AFFORDABLE HOUSING BOARD'S LIST OF PRIORITY PROJECTS On Thursday September 24, 2009, the Affordable Housing Board (AHB) conducted a special meeting to prepare a listing of priority affordable housing proposals seeking funding from the City competitive process. After careful review and discussion of the housing applications, the Board established a list of priorities as a means of assisting the CDBG Commission as they prepare for applicant interviews and recommended funding allocations. 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 Applicant's Ranking of Initial CDBG Unfunded Percentage Priority Project Funding Commission's Balance of Request Projects Request Recommendation Funded 1 HO-3 & HO-4 $167,900 $167,900 $0 100% FCHA— (Program) Tenant-Based $40,000 $40,000 $0 100% Rental Assist (Admin) and Admin 2 HO-1 CARE $700,000 $505,011 $194,989 72.1% Housing— Provincetowne On-site Infrastructure 3 HO-5 Habitat $75,000 $63,865 $11,135 85.2% for Humanity— Land Acquisition 4 HO-2 City of $100,000 $100,000 $0 100% Fort Collins— Home Buyer Assistance- Rentals 5 HO-6 HA of $100,000 $100,000 $0 100% Loveland— Larimer Home Improvement Program 9 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: 2008 100% 0% 0% 2007 100% 0% 0% 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% 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; 10 (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. 11 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 is repaid with a 5% 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. 12 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. 13 ATTACHMENT 5 %200.9:FU:FUNDING RECOMMENDATIONS �.G MMUNITY DEVELO,P.MENT BLOC=KZRANT'`' ir Meeting held,:Thursday,; October8, 2009 t ' 6:00 p m.,- 7.23:,p.m.. 21.8,North College Avenue cy E v r ,. . r ry� a Fort '.Collins, Colorado'.. Commission members present: Bob Browning, Chair Eric Berglund, Vice Chair David Carr Catherine Costlow Michael Kulisheck Kay Rios Vickie Traxler Jennifer Wagner Staff present: Ken Waido, Staff Liaison Heidi Phelps Julie Smith Sharon Thomas Megan Woodman 14 MEETING HIGHLIGHTS Chair Browning called the meeting to order at 6:00 p.m. The Commission deliberated and passed motions on funding recommendations for each proposal in each funding category for the Fall 2009 Competitive Process. A summary of the Commission's recommendations is: ID Project Requested Recommended CARE Housing: Provincetowne HO-1 On-site Infrastructure $ 700,000 $ 505,011 City of Fort Collins: Home Buyer HO-2 Assistance — Rentals $ 100,000 $ 100,000 Fort Collins Housing Authority: Tenant-Based HO-3 Rental Assistance (TBRA) $ 167,900 $ 167,900 Fort Collins Housing Authority: HO-4 TBRA-Admin $ 40,000 $ 40,000 HO-5 Habitat for Humanity: Land Acquisition $ 75,000 $ 63,865 Housing Authority of the City of Loveland: HO-6 Larimer Home Improvement Program (LaHIP) $ 100,000 $ 100,000 PF-1 Neighbor to Neighbor: Playground/Landscaping $60,500 $25,000 Overall funding recommendations approval. Moved by Mr. Carr, seconded by Ms. Rios: To accept the 2009 Fall Competitive Cycle funding recommendations as listed, in summary of the meeting's deliberations and decisions. Motion passed: All proposals were considered eligible for funding, and were subject to criteria ranking. There were $1,243,400 in requests and $1,001,776 in available dollars. All funds were recommended to be allocated, with no monies being carried over to the Spring 2010 Competitive Process cycle. City Council will make its final allocation decision based on the Commission's recommendations and any additional public input, on Tuesday, November 17, 2009, 6:00 p.m., Council Chambers, 300 W. Laporte Ave., Fort Collins, CO. That meeting is also considered a Public Hearing for the Fall 2009 Competitive Process. The meeting adjourned at 7:23 p.m. Note: All applications and all motions appropriate to each application are listed as follows. It should be noted that this listing represents a summary of discussions and motions rather than a chronological record of such proceedings. 15 HOUSING CATEGORY (various funding sources) HO-1 CARE Housing — Provincetowne Development Fees. Request: $700,000 Moved by Mr. Carr, seconded by Ms. Wagner: To recommended $500,000 in funding. The agency has a proven track record for capacity to do this kind of project. There is a proven need for affordable housing on the south side of Fort Collins. Given the overall available funding this cycle, there is limited capability to fund this project in full, given the other requests. Conversely, another Commission member favored full funding [and would not be supporting this motion], precisely because the market study highlighted the great need for affordable housing in this section of town. This project would serve lower end income levels, and is worthy of full funding. Motion failed: 2-5. Moved by Ms. Rios, seconded by Mr. Berglund: To recommend full funding. Reasons are as noted in discussion of previous motion. Motion failed: 4-4. Moved by Ms. Rios, seconded by Mr. Kulisheck: To recommend full funding. Again, the location and client population were mentioned. CARE's proven track record was reiterated. It was noted that it is difficult to find funding anywhere right now. The Commission has, through its previous support, in essence, carried the "baby". Now it's time to see the process through and deliver the "baby". Motion failed: 4-4. l Moved by Mr. Carr, seconded by Ms. Traxler: To recommend a funding level of $600,000. There was clarification on what funding was available for other projects. This early in the process, construction financing is hard to obtain right now. A portion of this request could be delayed for allocation (if an additional, new proposal was submitted) until the Spring 2010 cycle, since previously allocated 2008 money for this project has yet to be spent, due to other pieces of the project needing to fall into place first. The timeliness issue was further addressed by stating that this funding level provides CARE with a show 16 of good faith, while still allowing other projects to be funded. While tax credits for financing are not paying nearly what they were, construction costs are down in this economy. At the same time, CARE getting tax credits approved was huge, and there is a need for the City to support that key financing effort. Motion failed: 5-2-1. Moved by Mr. Carr, seconded by Ms. Traxler: To recommend a funding level of $600,000. Financing is hard to obtain right now. A portion of this request could be delayed for allocation (with an additional, new proposal) until the Spring 2010 cycle. Motion failed: 5-2-1. Moved [as amended] by Ms. Wagner, seconded by Mr. Carr: To recommend $533,376 in funding. An initial motion and second of$553,376 took into consideration the motion maker's thoughts for what that member might recommend for remaining projects. The ensuing discussion noted that motions for one project should not be contingent on what could potentially be awarded for other proposals. Given that, a friendly amendment was made for the amount to be lowered to $533,376. The amount recommended is slightly more than CARE's minimum request. Depending on what happens with other financing, and other project implementation factors, this lowered amount could potentially delay the project, but not kill it. Motion passed: 7-1. FINAL CARRYING MOTION: Moved by Mr. Kulisheck, seconded by Ms. Wagner: To recommend $505,011. After a correction by staff regarding funding-amounts available in certain categories and continued discussion, most Commission members agreed to adjust the recommended funding amount for CARE downward. Motion carried: 5-3. Funding recommendation: $505,011 HO-2 City of Fort Collins: Home Buyer Assistance - Rentals. Request: $100,000 Moved by Ms. Rios, seconded by Mr. Carr:To recommend full funding. 17 It is a program that has proven itself. The program also serves a great purpose in transferring properties from investor-owned to owner-occupied. Motion failed: 4-4. FINAL CARRYING MOTION: Moved by Ms. Rios, seconded by Mr. Carr: To recommend full funding for HO-2. Previous positive statements regarding the proposal were noted. It is funding that historically has been well spent. With the current economy and the current opportunities for homeownership, the funds are needed. Motion carried: 8-0. Funding recommendation: $100,000 HO-3 Fort Collins Housing Authority (FCHA): Tenant-based Rental Assistance. Request: $167,900 FINAL CARRYING MOTION. Moved [as amended] by Ms. Wagner, seconded by Mr. Carr: To recommend full funding. The proposal is high dollars in terms of unit cost, but the proven outcomes are impressive. The cost of this program is still less expensive that the alternative community cost. The program has not lost clients, which is quite a feat, given the population it serves. The dollars are multiplied. The applicant team gave a great presentation in advocating for its funding request. The program has done amazing things. This client population is not effectively served in other places. Motion passed: 7-0. Funding recommendation: $167,900 HO-4 Fort Collins Housing Authority: Tenant Based Rental Assistance — Administration. Request: $40,000 Moved by Ms. Rios, seconded by Mr. Berglund: To recommend zero funding. There is an issue with using housing money to cover staffing for a project. The two aspects are separated out into two different projects due to regulatory limitations on the HOME funding source, and other constraints. It was noted, however, that there are no other funding sources for administration (HO-4) of the HO-3 project, and that HO-3 and HO-4 were truly tied together. Funding recommendations need to be either for, or against, both. 18 It was noted that the Housing Authority initially stepped up in covering administration for the pilot portion of the project. However, the program is complex and time-consuming, and requires resources way beyond what the Housing Authority is able to provide. It is an outcome intensive program. Admin is needed to make it successful. Others now need to move this forward. There was discussion as to whether this sets precedence in providing for admin. One member noted that providing for admin when necessary was not the original intent for the Affordable Housing Fund's use, but that times and needs have changed. Motion failed: 7-1. FINAL CARRYING MOTION: Moved by Ms. Wagner, seconded by Ms. Traxler: To recommend full funding. Motion carried: 7-1. Funding recommendation: $40,000 HO-5 Habitat for Humanity: Land Acquisition. Request: $75,000 Moved by Jennifer,Wagner, seconded by Michael Kulisheck: To recommend zero funding. The motion maker stated that she was not opposed to funding Habitat per se. The high price of the lots ($60K each) Habitat is seeking to purchase at Merton Homes' project, Union Place, came into question, however. The economic down-turn has allowed more entry-level suitable, single family lots to be available throughout the community at lower price points. The applicant did not show factual due diligence of more recent results in evaluating other lots in the community. There was divergence on the Commission regarding the LEED Certified aspects to the project—the geothermal component in particular. The energy savings from geothermal are realized over the long-term. Property value from the geothermal component is also hard to support on an appraisal, which is typically what financing is built upon. It was stated that Habitat's purpose was to maximize dollars for affordable housing, and that the organization needed to be following on the coat-tails of other with innovative efforts such as this. It's the role of for-profit builders to do a project like this, and iron out the wrinkles at the same time. Habitat does not need to be the party at the forefront. Conversely, one-Commission member noted that innovation needed to be celebrated and supported. It was also noted that, in having built over 40 homes in Fort Collins, the affiliate should be self-supporting at this point. There is no difficulty in carrying over the CDBG funding to the spring cycle, if it is not a good match for proposals this fall. There are only two proposals eligible for CDBG 19 funding this cycle. It may be more prudent to put money into straight housing, as opposed to a playground [the PF-1 proposal]. Motion carried: 5-3. Moved by Chair Browning, seconded by Ms. Rios: To recommend: $75,000 for HO- 5 (Habitat Land Acquisition), with the condition that Habitat pursue finding additional lots if they can be obtained less expensively elsewhere, and; $13,865 for PF-1 (N2N Playground). Mr. Browning noted that he was Past President of the Fort Collins Habitat affiliate, and wanted to support current efforts. At the same time, it was important not to pay more for certain lots when the agency could obtain others cheaper. Motion failed: 4-4. Moved (as amended) by Ms. Traxler, seconded by Ms. Rios: To recommend funding of$68,865 for HO-5 (Habitat Land Acquisition), and $20,000 for PF-1(N2N Playground). There was concern by one member about recommending funding for PF-1 (N2N Playground) beyond the $20,000 mark. Recommending more funding for Habitat will allow them to leverage more funding elsewhere. Another member believed that the funding recommendation for Habitat should be limited to $50,000, with remaining available funds redirected to PF-1, the playground proposal. Motion failed: 4-4. Moved by Mr. Berglund, seconded by Mr. Kulisheck: To recommend funding of $50,000 for HO-5. This action would grant Habitat its minimum request, while still allowing the agency to leverage for land costs. Motion failed: 4-4. FINAL CARRYING MOTION: Moved by Ms. Rios, seconded by Mr. Kulisheck: To recommend funding of$63,865. There were no comments in addition to what Commission members had previously discussed. Motion passed: 5-3. Funding recommendation: $63,865 20 HO-6 Housing Authority of the City of Loveland: LaHIP. Request: $100,000 Moved by Ms. Rios, seconded by Mr. Carr: To recommend full funding. The project supports a majority of senior clients on fixed incomes. The rehabilitation work also results In maintaining existing affordable housing stock. Not addressing needed maintenance results in more of a financial burden and cost over the long-term. The LaHIP program leverages other funding, especially State monies. This effort is the only local program for rehabilitating lower-income, owner-occupied housing units, and is key to keeping the American Dream [homeownership] alive. Motion passed: 5-1-1. Funding recommendation: $100,000 PUBLIC FACILITY CATEGORY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PF-1 Neighbor to Neighbor— Playground/Landscaping. Request: $60,500 Moved by Mr. Kulisheck, seconded by Ms. Rios: To recommend zero funding. This project, while worthy, is not as critical as the housing needs which have been presented in other proposals. Its potential use this cycle is restricted among two proposals. It is unlikely that work on the playground will happen over the winter, and it would be a spring or summer project. Historically, the City has not funded more than 50% of the cost of playgrounds for agencies. There was concern about setting precedent with this higher percentage. There was some discussion on timing for the project and what CDBG money would be available when. Motion failed: 1-7. Moved by Mr. Kulisheck, seconded by Mr. Carr: To recommend full funding of $60,500. The project addresses a valid health and safety concern. The upgraded playground makes an important improvement to the property. When compared to the other proposal, the project addresses needs that are not directly housing related. Motion failed: 4-4. Moved by Chair Browning, seconded by Ms. Rios : To recommend: $75,000 for HO-5 (Habitat Land Acquisition), with the condition that Habitat pursue finding additional lots if they can be obtained less expensively elsewhere; and $13,865 for 21 PF-1 (N2N Playground). Motion failed: 4-4. FINAL CARRYING MOTION. Moved by Mr. Kulisheck, seconded by Ms. Traxler: To recommend funding of$25,000. There were no comments in addition to what Commission members had previously discussed. Motion carried: 5-3. Funding recommendation: $25,000 ACCEPTANCE OF OVERALL RECOMMENDATIONS Moved by Mr. Carr, seconded by Ms. Rios: To accept the total Funding Matrix, with the funding amounts and sources as currently presented (copy attached). Motion carried: 6-1-1. The Commission member voting against the motion was not in favor of giving any funding to HO-5 (Habitat — Land Acquisition), for reasons noted in the discussion regarding that specific proposal. The Commission member abstaining from voting, did so because that member was not in favor of the Commission giving Habitat the flexibility to purchase "better-deal' lots that were not part of its specific proposal involving lots at Union Place. 22 ATTACHMENT 6 City of Fort Collins Community Development Block Grant (CDBG) Commission Formulation of Funding 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. 23 RESOLUTION 2009-103 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 PARTNERSHIPS (HOME) PROGRAMS, AND THE CITY'S AFFORDABLE HOUSING FUND WHEREAS, the Community Development Block Grant (CDBG) Program and the Home Investment partnerships (HOME) Program are ongoing grant administration programs funded by the Department of Housing and Urban Development (HUD); and WHEREAS, the City has received CDBG Program funds since 1975 and HOME Program funds since 1994; and WHEREAS,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 2000-13,formally adopting a competitive process for the allocation of City financial resources to affordable housing programs/projects and community development activities; and WHEREAS, on January 8, 2009, and September 10, 2009, the CDBG Commission held public hearings 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, on October 8, 2009, 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 FY 2009 CDBG funds, HOME funds from the FY 2009 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; and WHEREAS, the City Council has determined that the recommendation of the CDBG Commission is in the best interests of the City. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the administration is authorized to submit an application for funding to the Department of Housing and Urban Development as follows: AFFORDABLE HOUSING FY 09 CDBG Grant $63,865 HABITAT FOR HUMANITY—LAND ACQUISITION $25,000 NEIGHBOR-TO-NEIGHBOR—PLAYGROUND & LANDSCAPING FY 09 HOME Grant $381,715 CARE HOUSING—PROVINCETOWNE ON-SITE INFRASTRUCTURE $133,515 FORT COLLINS HOUSING AUTHORITY—TENANT-BASED RENTAL ASSISTANCE FY 09 HOME CHDO Funds $103,046 CARE HOUSING—PROVINCETOWNE ON-SITE INFRASTRUCTURE FY 09 HOME Pro ram Income $34,385 FORT COLLINS HOUSING AUTHORITY—TENANT-BASED RENTAL ASSISTANCE FY 08 Affordable Housing Fund Unprogrammed $100,000 LARIMER HOME IMPROVEMENT PROGRAM (LHIP) $40,000 FORT COLLINS HOUSING AUTHORITY—TBRA ADMINISTRATION $900 CITY OF FORT COLLINS —HOME BUYER ASSISTANCE (FORMER RENTAL PROPERTIES) FY 09 Affordable Housing Fund $99,100 CITY OF FORT COLLINS—HOME BUYER ASSISTANCE PROGRAM (FORMER RENTAL PROPERTIES) $20,250 CARE HOUSING—PROVINCETOWNE ON-SITE INFRASTRUCTURE Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 17th day of November A.D. 2009. Mayor ATTEST: City Clerk