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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/16/2010 - PUBLIC HEARING AND RESOLUTION 2010-071 APPROVING T DATE: November 16, 2010 AGENDA ITEM SUMMARY ' STAFF: Ken Waido FORT COLLINS CITY COUNCIL Public Hearing and Resolution 2010-071 Approving the Programs and Projects that Will Receive Funds from the Federal Community Development Block Grant(CDBG) and Home Investment Partnership (HOME) Programs, and the City's Affordable Housing Fund. EXECUTIVE SUMMARY Adoption of this Resolution will complete the fall cycle of the competitive process for allocating $1,295,603 of City financial resources to affordable housing and community development programs/projects and planning and administrative purposes. BACKGROUND / DISCUSSION Resolution 2010-070 establishes which programs and projects will receive funding for the FY 2010 Program year, which started on October 1, 2010, including the use of HOME grant funds and program income, unprogrammed FY 2010 CDBG funds, 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. The following table summarizes the amount and sources of available funds: AMOUNT SOURCE $379,315 FY 2010 CDBG Entitlement Grant 35,535 FY 2010 CDBG Entitlement Grant Available for Planning/Administration 511,906 FY 2010 HOME Participating Jurisdiction Grant 102,381 FY 2010 HOME CHDO Set-aside 73,133 FY 2010 HOME Program Income 4,443 FY 2010 HOME Program Income Available for Program Administration 188,890 2010 Affordable Housing Fund 1 295 603 1 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. Available CDBG funds are funds from the FY 2010 CDBG Entitlement Grant that are unprogrammed and are available to be allocated to specific programs and projects. This past spring, staff reported to Council that the City's FY 2010 CDBG Entitlement Grant and Program Income totaled an amount of$1,189,054. HUD regulations limit a maximum of 20%of these funds,or$237,811,for planning and program administrative purposes. On June 15, 2010, Council adopted Resolution 2010-033, which included $202,276 for CDBG Program Administration,leaving$35,535 of CDBG funds for planning and administrative purposes available for allocation during the fall cycle of the competitive process. Also this past spring, staff reported that the FY 2010 HOME Participating Jurisdiction Grant totaled $682,541. HUD regulations allow a maximum of 10% of the grant for administrative purposes, or $68,254. Since the spring, the Finance Department has determined there will be$43,430 of FY 2010 HOME Program Income available for the fall cycle. HUD regulations also permit a maximum of 10% of HOME Program Income, or $4,443, for program administration. The$35,535 of CDBG funds and the $4,443 of Home funds available for planning and administration purposes are included in the table above,which lists the funds available for allocation during the fall cycle of the competitive process. Subtracting out the total of$39,978 of CDBG and HOME funds available for planning and administration leaves a total of$1,255,625 available for affordable housing programs and projects. November 16, 2010 -2- ITEM 20 FINANCIAL/ ECONOMIC IMPACTS The Home Investment Partnership(HOME)Program and the Community Development Block Grant(CDBG)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. Together, the HOME and CDBG programs provide almost $2 million of federal funds to the City. The City's General Fund contributes $189,890 from the Affordable Housing Fund for allocation during the competitive process. Through the provision of affordable housing, more of Fort Collins'work force can reside within the community. This means there is an available labor pool within the city, which is a positive benefit to economic sustainability. ENVIRONMENTAL IMPACTS Affordable housing programs help provide for a healthy environment. By offering affordable housing options for lower income people, more of Fort Collins'work force can live in the community instead of being forced to live outside the community and commute into the city for work. This helps reduce traffic congestion and, thus, improves air quality. Affordable housing developers, including for-profit and non-profit agencies, are utilizing green building practices. Green building practices are being used in both new construction and major rehabilitation of existing unit projects. These practices include geo-thermal applications and other energy saving techniques. All affordable housing projects utilizing federal funds are required to pass a HUD environmental review which covers such items as noise impacts, floodplains, hazardous materials, etc. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BOARD / COMMISSION RECOMMENDATION 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: PLANNING AND ADMINISTRATION Applicant Funding Commission's Unfunded Percentage of Project/Program Request Recommendation Balance Request Funded AD-1 CITY.— $35,535 $35,535 $0 100% CONSOLIDATED PLAN _ IMPLEMENTATION AD-2 CITY—HOME $4,443 $4,443 $0 100% PROGRAM ADMINISTRATION November 16, 2010 -3- ITEM 20 AFFORDABLE HOUSING Applicant Funding Commission's Unfunded Percentage of Project/Program Request Recommendation Balance Re uest Funded HO-1 CITY —HOME $50,000 $50,000 $0 100% BUYER ASSISTANCE HO-2 CARE — $50,000 $0 $50,000 0% CONSTRUCTION (Grant) CONSULTANT AND LEASING AGENT HO-3 FC CARIBOU II $300,000 $300,000 $0 100% —CARIBOU APARTMENTSII HO-4 FORT COLLINS $720,600 $290,000 $430,000 40% HOUSING CORPORATION & CORNERSTONE— LEGACY SENIOR RESIDENCES HO-5 HARVEST $585,000 $0 $585,000 0% CONSTRUCTION & FORT COLLINS HOUSING AUTHORITY —SPRING CREEK APARTMENTS HO-6 LOVELAND $110,000 $110,000 $0 100% HOUSING AUTHORITY (Grant) —LHIP PROGRAM Except for the Grant noted above, funding recommendations in the Affordable Housing category 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 $750,000 57.9% Affordable Housing Programs and Projects 39,978 3.1% Planning and Administration 505,625 39.0% Unallocated 1 295 603 100.0% Total Funds Available The$505,625 of unallocated funding will be carried over to the 2011 spring cycle of the competitive process. PUBLIC OUTREACH The CDBG Commission holds at least two public hearings during a program year to solicit public comments regarding the use of federal funds by the City. One hearing is conducted in January where the public is asked to comment on the priorities for the use of federal funds in the city. The second hearing is conducted in September where the Commission reports back to the community and covers the previous year's utilization of federal funds and previews the upcoming year's proposed use of federal funds. HUD regulations also require a 30-day public comment period on the proposed allocation of HOME and CDBG funds as recommended by the CDBG Commission. Staff placed an ad in the Coloradoan newspaper presenting the list of November 16, 2010 -4- ITEM 20 recommended funding for programs/projects and indicated the public comment period would start on October 15, 2010, and end on November 15, 2010. No comments were received. 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. Minutes of the CDBG Commission's October 16, 2010 Meeting 6. Formulation of Funding Recommendations Session ATTACHMENT 1 BACKGROUND AND SUMMARY OF CDBG COMMISSION'S RECOMMENDATIONS FOR FUNDING At the November 16, 2010, 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 2010 Program year. The resolution establishing which programs and projects will receive funds represents the culmination of the fall cycle of the 2010 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 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. SELECTION PROCESS The selection process for the City's FY 2010 Competitive Process began in January 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 newspapers starting in July to solicit requests for housing and community development projects for FY 2010. The application deadline was Thursday August 18, 2010. At the close of the deadline the City received eight (8) applications requesting a total of approximately 1 $1,854,978. 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 16, 2010, 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 23 the Commission met to hear presentations and ask clarification questions from each applicant. The Commission then met on Thursday October 14 for the purpose of preparing a recommendation to the City Council as to which programs and projects should be funded for the FY 2010 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 priorities contained in the Affordable Housing Strategic Plan. Listed below is a summary of each applicant's initial request for funding and the Commission's funding recommendations. AFFORDABLE HOUSING APPLICATIONS HO-1 City of Fort Collins—Home Buyer Assistance Amount of initial request: $200,000 Amount of revised request: $ 50,000 Funding Recommendation: $ 50,000 The City of Fort Collins Advance Planning Department administers a Home Buyer Assistance Program that provides downpayment and closing cost loans to income-eligible households, usually households between 51-80% of Area Median Income (AMI). The revised application requests $50,000. The recipients of the loans typically are able to afford to own a home but lack the required out of pocket expenses to complete the purchase. The program plans to provide assistance to a minimum of 10 households with the funding. HO-2 CARE Housing—Provincetowne Construction Consultant and Leasing Agent Amount of request: $50,000 Funding Recommendation: $0 CARE has submitted an application requesting $50,000 for a CHDO capacity grant for hiring both a construction manager and part time leasing agent through construction and stabilized occupancy. Provincetowne is a new construction, 85-unit "Green Communities" multi-family affordable housing rental development, targeted towards families between 30% - 50% of Area Median Income (AMI). The Provincetowne site is located west of the intersection of Trilby Road 2 and Lemay Avenue, at the southern edge of Fort Collins. The entire project will eventually total 156 units. HO-3 FC Caribou I1 L.P.—Caribou Apartments II Amount of request: $300,000 Funding Recommendation: $300,000 Caribou Apartments II is a 96 unit apartment complex, the second phase of an existing affordable housing development called Caribou Apartments. The first phase was completed in 2008. Phase 11 will be 100% affordable with units at multiple income levels ranging from 30% to 60% AMI. There will be 36 one bedroom/one bath units and 60 two bedroom/two bath units. Funds will be used for construction costs (tap fees). HO-4 Fort Collins Housing Corporation/Cornerstone Associates—Legacy Senior Residences Amount of request: $720,000 Funding Recommendation: $290,000 Legacy Senior Residences is a joint venture between the Fort Collins Housing Corporation and Cornerstone Associates, LLC to provide affordable senior housing in downtown Fort Collins. The applicant wishes to utilize CDBG funding for specific costs related to the development of a new- construction 72 unit affordable senior complex to be located at 411 Linden. The funds will be used for the following project-specific costs: on-site infrastructure, engineering and construction costs related to green development. HO-5 Harvest Construction/Fort Collins Housing Authority—Spring Creek Apartments Amount of request: $585,000 Funding Recommendation: $0 Spring Creek Apartments is a new construction affordable housing rental project that will consist of 120 units. Units will be affordable for families ranging from 30 % to 60% AMI. The project will be located at the NW corner of Timberline and Drake. The project will be built "Green" with the latest technologies applied to lower utilities usage. and costs. Funding will be used for construction costs (tap fees). HO-6 Housing Authority of Loveland—Larimer Home Improvement Program (LHIP) Amount of request: $110,000 Funding Recommendation: $110,000 The Larimer Home Improvement Program offers single family owner-occupied households with incomes that do not exceed 80% of the AMI, 0% to 5% interest rate loans to make needed repairs, specifically aimed at improving health, safety, over-crowding, and energy efficiency. The interest rate is determined by the family's income. The program offers up to $24,999 with flexible terms to fit within the family's budget. This request is for $110,000 of which $10,000 would be for the emergency funds program, $80,000 in client dollars, and $20,000 for program administration. 3 PLANNING AND ADMINISTRATION APPLICATIONS AD-1 City of Fort Collins—Consolidated Plan Implementation Amount of request: $35,535 Funding Recommendation: $35,535 This is a request to utilize the balance of the eligible FY 2010 CDBG Entitlement Grant and Program Income funding for Planning and Administration purposes related to the CDBG Program and implementation of the Consolidated Plan, which was adopted by the City Council in June. Funds for Planning and Administration are limited to a maximum of 20% of the Entitlement Grant and Program Income. This past spring, the Council approved the use of$202,276 out of the maximum of $237,811 of CDBG funds from the Planning and Administration category for direct administration of the CDBG Program, including contract preparation, recipient monitoring, completing required HUD reports, etc. Coordinated with the City's 2011-2012 Budget, this request reflects the need for additional financial resources to be used for CDBG Program related Consolidated Plan implementation staff work. The funding will cover costs for personnel services for the Chief Planner position in the Advance Planning Department. AD-2 City of Fort Collins—HOME Program Administration Amountofrequest: $4,443 Funding Recommendation: $4,443 This is a housekeeping request to allocate 10% of FY 2010 HOME Program Income for administrative purposes. HUD HOME Program regulations allow the use of 10% of the HOME Participating Jurisdictions Grant and Program Income for administrative purposes. When the initial FY 2010 HOME Program administration budget was estimated last spring, only the FY 2010 HOME Entitlement Grant ($682,541) was used to calculate the 10% Administrative Budget ($68,254). The Finance Department has since reported that $44,430 of HOME Program Income would also be available, thus, the request to add $4,443 to the HOME Program Administration budget. The CDBG Commission has recommended that $789,978 (61.0%) of the available funding be allocated with $750,000 (57.9%) going to Affordable Housing programs and projects and $39,978 (3.1%) going to Planning and Administration. The remaining $505,625 of unallocated funding will be carried over for use in the 2011 spring cycle of the competitive process. The following table summarizes the utilization of funds from all sources. Recommended Funding % of Total Category $750,000 57.9% Affordable Housing Programs and Projects 39,978 3.1% Planning and Administration 505,625 39.0% Unallocated $1,295,603 100.0% Total Funds Available Attachment 5 contains information on how the Commission's session where they formulate their funding recommendations was conducted. 4 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. 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 5 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 Competitive Process established review criteria to determine the differences between proposals received by the City. The review criteria are designed to address major issues the City needs to consider when making funding decisions. The five major review categories are: 1. Impact/Benefit 2. Need/Priority 3. Feasibility 4. Leveraging Resources 5. Capacity and History The Impact/Benefit criteria provide 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 rewards 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). On July 20, 2010, the City Council adopted the Affordable Housing Strategic Plan and the HUD required Consolidated Plan and established goals and strategies for the City of Fort Collins' affordable housing programs for the five-year period of 2010-2014. Based on the most significant affordable housing needs, four goals have been identified and prioritized as follows: 1. Increase the inventory of affordable rental housing units 2. Preserve existing affordable housing units 3. Increase housing and facilities for people with special needs 4. Provide financial assistance for first-time homebuyers The Commission also considered the funding guidelines contained in the Affordable Housing Strategic Plan. 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; 6 a • CDBG funds should generally be allocated as follows: 65% for Housing projects and Public Facilities; 15% for Public Services, and 20% for Program Administration. 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 ATTACHMENT 3 Affordable Housing Board's List of Priority Projects On Thursday September 16, 2010, 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 $300,000 $300,000 $0 11-00% FC Caribou II Caribou Apartments 11 2 HO-1 $200,000 $50,000 $0 100% City of Ft. Revised to Collins $50,000 HBA Program 3 HO-6 $110,000 $110,000 $0 100% HA of Loveland LHIP 4 Ho-4 $720,000 $290,000 $430,000 40% FCHC Legacy Senior Apartments. 5 HO-2 $50,000 $0 $50,000 0% CARE Provincetowne Green Communities 6 HO-5 $585;000 $0 $585,000 0% Harvest Construction Spring Creek Apartments 8 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: 2009 100% 0% 0% 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% 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; 9 (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. 10 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: I. 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. 11 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. 12 ATTACHMENT 5 OCTOBER 2010 FUNDING RECOMMENDATIONS COMMUNITY DEVELOPMENT BLOCK GRANT Meeting held Thursday; October 143 2010 6:00.pm 6.45prn `. 218,North College Avenue Fort Collins; Colorado Commission members present: Kay Rios, Chair Kristin Chatnani Catheirne Costlow Michael Kulisheck Jeff Taylor Jennifer Wagner Staff: Ken Waido Heidi Phelps Sharon Thomas 13 MEETING HIGHLIGHTS Ms. Rios called the meeting to order at 6:00 p.m. The Commission deliberated and passed motions for funding recommendations for all proposals in each funding category for the Fall 2010 Competitive Process. A motion was made by Mr. Taylor to accept the Fall 2010 Competitive Process Funding Matrix as currently shown on the funding matrix. Mr. Kulisheck seconded the motion. Motion passed 6-0. A subcommittee was formed consisting of Jennifer Wagner and Catherine Costlow to create a letter of evidence to be used by banks and provided to the CDBG Commission to indicate financial stability of a for-profit applicant. Waido informed Commission members that any budget comments would need to be forwarded to Kelly DiMartino by Friday, October 15th. Ms. Rios is formulating a letter advocating to keep the funding levels as currently proposed in the City Manager's budget. That document will be forwarded to CDBG members on Friday before it is sent to DiMartino. Waido stated that because November 11th is a holiday, the next CDBG meeting will be held on November 4th at 6:30 p.m. The purpose of the meeting will be to discuss the Section 108 application and make a recommendation to City Council. A copy of the application will be forwarded to all Commission members next week. The meeting adjourned at 6:43 p.m. , Note: All applications and all motions appropriate to each application are listed below. It should be noted that this listing represents a summary of discussions and motions rather than a chronological record of such proceedings. 14 PLANNING and ADMINISTRATION AD-1 City of Fort Collins. Consolidated Plan Implementation. Request: $35,535 Moved by Mr. Kulisheck, seconded by Mr. Taylor: To recommend full funding. Staff is the backbone of these projects and does a wonderful job. Without them, we wouldn't be able to do our job or fulfill our responsibilities to the community. Motion passed: 4-1, 1 abstention. Funding recommendation: $35,535 AD-2 City of Fort Collins. Home Administration. Request: $4,443 Moved by Mr. Kulisheck, seconded by Mr. Taylor: To recommend full funding. These administrative funds are necessary to implement the programs. The same comments were offered as in AD-1. Motion passed: 6-0. Funding recommendation: $4,443 AFFORDABLE HOUSING HO-1 City of Fort Collins: Home Buyer Assistance. Request: $50,000 Moved by Mr. Kulisheck, seconded by Ms. Wagner: To recommend full funding. This program has served an important role in the community helping people get into homes they can afford, and it has a long track record of success. It is a well administered program, and it is important to continue to support it. Staff also did a really good job of adjusting their budgetary request based on current demand for assistance. Motion passed: 6-0. 15 Funding recommendation: $50,000 HO-2 CARE: Provincetowne Green CHDO Capacity Grant. Request: $50,000 Moved by Mr. Taylor, seconded by Ms. Costlow: To recommend no funding. Based on other funding, this type of application does not qualify for funding. Funding this would set a bad precedence for the City to start funding staffing requests of this nature. The application appears to be based on a cash flow issue and it appears it will be resolved in a short period of time. Good project, just an inappropriate use of funds. There was discussion about increasing the period of affordability, but the project has tax credits so probably has a minimum of 30 years affordability at this point. Motion carried 4-2. Funding recommendation: $0 HO-3 FC Caribou II: Caribou Apartments Phase II: Request: $300,000 Moved by Mr. Taylor, seconded by Ms. Chatnani: To recommend full funding. This project provides matching funds for the Colorado Division of Housing funding. Ninety to ninety-six units are at 50% AMI or below. The location is solid with a good past history with the Caribou Apartments, and there's a good leverage of existing construction as far as all the amenities are in place. It is one of the top rated projects by the Affordable Housing Board. It seems like it was the best leveraged of all the applicants. The applicant has said they will make the housing affordability permanent. Discussion ensued regarding the rationale behind the two votes that opposed funding for this project. A Commission member stated that while it was felt that the owner had the wherewithal to manage the project successfully, there was a lack of financial documentation being a for-profit developer. The owner's concern was the ability of the City to keep financial information confidential. The application is an open record, and therefore, is available to the public for inspection. A comment was made that partnering with the Housing Authority would remove that risk. Discussion ensued around the fact that there have not been many private sector applicants in the past. Ms. Wagner made a suggestion that, in the future, a reputable lender could provide some qualification factors that would give the CDBG Commission financial capability feedback. Motion carried 4-2. Funding recommendation: $300,000 16 HO-4 FCHC: Legacy Senior Residences: Request: $720,000 Moved by Mr. Taylor, seconded by Ms. Wagner: To recommend no funding. Motion failed 0-6. Neutral opinions were expressed about the project because of a desire to see it partially funded, but questions remained as to whether it should be fully funded. Legacy has a good track record and has worked with the Colorado Springs Housing Authority. The project will be owned by the FCHA after 15 years. There is a need to provide housing for seniors. Their debt is secured. It is a good project. There was discussion around their land acquisition closing date (set for the end of October). None of the requested dollars will be used for land acquisition. Members were advised that CDBG funds could be used for predevelopment costs and offsite infrastructure costs could be funded through the Affordable Housing Fund or HOME funds. Waido reported that they just missed being funded by CHFA in the Spring LIHTC process. The fact that Legacy is partnering with the Housing Authority is positive. Discussion ensued around the lack of financial confirmation. Wagner stated that funding approved without appropriate financial information is not a good lending practice. It was suggested that adequate funding be provided in this cycle to assist with the architecture, engineering, and offsite infrastructure. Legacy can return for the spring competitive cycle once they have received tax credits and request additional funding. This approach appears to be a prudent cautious way to spend taxpayer dollars. Moved by Ms. Wagner, seconded by Mr. Taylor: To recommend,$290,000 funding. Ms. Wagner moved that the funds specifically be used as follows: $170,000 for architecture fees, $70,000 for engineering fees, and $50,000 for the offsite. infrastructure. Fund disbursement will be as follows: To fund the $50,000 for offsite infrastructure, $28,890 will be utilized from the Affordable Housing Fund, and $21,110 from CDBG funds; $240,000 will be allocated from the CDBG and HOME Grants to fund the architectural and engineering fees. A member stated that it is a great project. There are valid reasons for waiting until the Spring Competitive Cycle to see if the tax credits are in place. This decision will not put the project at risk in terms of timing. Motion carried 6-0. Funding recommendation: $290,000 HO-5 Harvest Construction: Spring Creek Apartments: Request: $585,000 Moved by Ms. Costlow, seconded by Mr. Taylor: To recommend no funding. 17 A Commission member applauded a group that is attempting to get into affordable housing. (Couldn't hear, affordable housing was a guess). It is the applicant's first run at this process. There were too many unknowns on where all the funding was coming from. At this time, they need to spend a little more time with the Housing Authority to get the proposal more concrete. They should be encouraged to return in a later cycle when they have things more refined on the management side. The Commission member doesn't mind us being earlier on the money, but does not want to be the first money committed in the project and have that money tied up when it could be used elsewhere. They have not put together the partnership previously discussed, and it needs to be solid before they can move forward. Motion carried 6-0. Funding recommendation: $0 HO-6 Housing Authority of Loveland: Larimer Home Improvement: Request: $110,000 Moved by'Ms. Wagner, seconded by Mr. Taylor: To recommend full funding. Although this does use a large amount of the Affordable Housing Fund dollars, it is an unduplicated service that serves a real need. Particularly in this economy, it may help to keep people in their homes and keep them functioning well. They are also doing a lot of rehab to homes that would otherwise not be habitable. Motion carried 6-0. Funding recommendation: $110,000 18 ATTACHMENT 6 Citv 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. 19 RESOLUTION 2010-071 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 and 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 and projects, and community development activities; and WHEREAS, on January14, 2010, the CDBG Commission held a public hearing to obtain citizen input on community development and affordable housing needs, and since then has heard presentations and asked clarification questions from each applicant that submitted a proposal to the City requesting funding; and WHEREAS,on October 14, 2010, 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 2010 CDBG funds, HOME funds from the FY 2010 HOME grant, 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 to the Department of Housing and Urban Development as follows: PLANNING AND ADMINISTRATION FY 10 CDBG Grant $35,535 CITY OF FORT COLLINS —CONSOLIDATED PLAN IMPLEMENTATION FY 10 Home Program Income $4 443 1 CITY OF FORT COLLINS —HOME Program Administration AFFORDABLE HOUSING FY 10 CDBG Grant $187,977 FORT COLLINS HOUSING CORPORATION—LEGACY SENIOR RESIDENCES FY 10 HOME Grant $300 000 1 FC CARIBOU II—CARIBOU APARTMENTS PHASE II FY 10 HOME Program Income $73,133 FORT COLLINS HOUSING CORPORATION—LEGACY SENIOR RESIDENCES 2010 Affordable Housing Fund $50,000 City of Fort Collins—Home Buyer Assistance Program (FORMER RENTAL PROPERTIES $28,890 FORT COLLINS HOUSING CORPORATION—LEGACY SENIOR RESIDENCES $110,000 LOVELAND HOUSING AUTHORITY—LARIMER HOME IMPROVEMENT PROGRAM Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 16th day of November A.D. 2010. Mayor ATTEST: Chief Deputy City Clerk