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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/06/2001 - ITEMS RELATING TO THE COMPLETION OF THE FALL CYCLE AGENDA ITEM SUMMARY ITEM NUMBER: 31 A-C DATE: November 6, 2001 FORT COLLINS CITY COUNCIL STAFF: Ken Waido SUBJECT: Items Relating to the Completion of the Fall Cycle of the Competitive Process for Allocating City Financial Resources to Affordable Housing Projects/Programs and Community Development Activities: The City's Fiscal Year 2001-2002 Home Investment Partnerships HOME) Program, the City's Affordable Housing Fund, and Reprogrammed Community Development Block Grant(CDBG) Program Funds. RECOMMENDATION: Staff recommends adoption of the Resolutions. The CDBG Commission presents a list of recommendations as to which program and projects should receive funding. EXECUTIVE SUMMARY: The Home Investment Partnerships (HOME) Program and the Community Development Block Grant (CDBG) Program provide funds from the Department of Housing and Urban Development (HUD) to the City of Fort Collins which can be allocated to affordable housing related programs and projects, thereby, reducing the demand on the City's General Fund Budget to address such needs. The City Council is being asked to consider the adoption of three resolutions. The first resolution establishes which programs and projects will receive funding with HOME funds for the FY 2001-2002 Program year, which started on October 1, 2001. The second resolution establishes which programs and projects will receive funding from the City's Affordable Housing Fund. And, the third resolution establishes which programs and projects will receive funding from reprogrammed CDBG Program funds. A. Public Hearing and Resolution 2001-151 Approving the FY 2001-2002 Home Investment Partnerships Program for the City of Fort Collins. B. Public Hearing and Resolution 2001-152 Allocating Funding from the City's Affordable Housing Fund. C. Public Hearing and Resolution 2001-153 Approving the Allocation of Reprogrammed I Community Development Block Grant Funds. ( BACKGROUND: The City Council is being asked to consider the adoption of three resolutions. The first resolution establishes which programs and projects will receive funding with HOME funds for the FY 2001-2002 Program year, which started on October 1, 2001. The second resolution establishes which programs and projects will receive funding from the City's Affordable Housing Fund. And, the third resolution establishes which programs and projects will receive funding from reprogrammed CDBG Program funds. Additional background material about the competitive process is included in Attachment "A". DATE: November 6, 2001 2 ITEM NUMBER: 31 A-C Since early January of this year, the CDBG Commission and members of the City staffs Affordable Housing Team have conducted public hearings to assess community development and housing needs in Fort Collins, conducted technical assistance training workshops for applicants, and solicited applications for funding. The CDBG Commission reviewed 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 their 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 that have completed successful projects in the past (have good track records). The ranking sheet used to assist the CDBG Commission is presented in Attachment A. The Commission also considered the funding guidelines contained in the Priority Affordable Housing Needs and Strategies report adopted by the Council on February 2, 1999. These guidelines include: • HOME funds should 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; 10% for Program Administration; 10% for Public Facilities; and 15% for Public Services. • funds allocated to housing should generally be divided as follows: 70% for rental projects and 30%for homeownership opportunities; and • the average subsidy should be $5,000 per unit, with relatively more funding to projects producing housing for 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 DATE: November 6, 2001 3 ITEM NUMBER: 31 A-C 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 CDBG and HOME Programs is presented in Attachment B. AVAILABLE FUNDS The amount of the City's HOME Grant for FY 2000-2001 is $685,000. Added to the HOME grant will be $100,000 of HOME Program Income to make a combined amount of $785,000 available for projects and administrative purposes. Subtracting $78,500 (10% maximum allowed by HOME regulations) for administrative purposes, leaves $706,500 available for projects and programs. The HOME funds will be combined with $671,950 from the City's Affordable Housing Fund and $1,090,000 of reprogrammed CDBG funds to create a potential pool of $2,468,450 of funds available for programs from the fall cycle of the competitive process. CDBG funds are typically allocated in the spring and are, thus, not available for use in the fall cycle of the competitive process. However, of some projects previously allocated CDBG funds, one has been canceled, another changed the scope of its funding from acquisition to construction, and the Denver Office of the Department of Housing and Urban Development has reversed a previous ruling concerning the eligible use of CDBG funds to pay City development impact fees effecting two other projects. Since the City had previously allocated CDBG funds to several entities for their projects, substitute funds had to be found to honor the City's commitments. The $1,090,000 of reprogrammed CDBG funds comes from the following sources: $250,000 Concorde Capital—project canceled $300,000 CARE Housing—changed from acquisition to construction $250,000 Elizabeth Street Apartments - impact fees $290,000 Volunteers of America- impact fees The following summarizes the amount and sources of available funds: AMOUNT SOURCE $ 796,950 FY 2001 HOME Grant and Program Income 671,950 City's Affordable Housing Fund 1,090,000 Reprogrammed CDBG Funds -----------------------------------------------------------—---------------------------- $2,558,900 Total SELECTION PROCESS On January 11, 2001, the CDBG Commission held a public hearing to obtain citizen input on community development and affordable housing needs. The HOME Program office placed legal advertisements in local and regional newspapers starting in July to solicit requests for HOME funded programs and projects and for proposals for the use of funding from the City's Affordable Housing Fund.. The application deadline was Thursday August 23. At the close of the deadline the City received I 1 applications requesting a total of approximately $4.1 million. I DATE: November 6, 2001 4 ITEM NUMBER. 31 A-C Copies of all applications were forwarded through the City Manager's office to the City Council on September 13 and placed in the Council Office for review. Also on September 13 copies of the applications were distributed to the CDBG Commission. On Thursday October 4, the CDBG Commission met to hear presentations and ask clarification questions from each applicant. The Commission then met on Thursday October 11 for the purpose of preparing a recommendation to the City Council as to which programs and projects should be funded within funds available from the fall cycle of the competitive process. 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 HOME funds or funding in other previous years. The Commission then worked on the formulation of their list of recommendations. CDBG COMMISSION'S LIST OF RECOMMENDATIONS HUD HOME regulations limit the amount of available funds that can be allocated to various categories. Funds for Administrative purposes are limited to 10% of the HOME Grant which means 90% of the Grant must be used for housing projects. Within the 90% required for projects, the City is required to set aside 15% for Community Housing Development Organization (CHDO) projects and allow an allocation of 5% for CHDO operations. CDBG funds can not be used for construction purposes The Commission, thus, not only had to decide which applicants presented programs and projects which best fit into the City's HOME and CDBG Programs, but also had to insure funding allocations were kept within HUD regulations and follow the funding guidelines contained in the Priority Affordable Housing Needs and Strategies report. Listed below is a summary of each applicant's initial request for funding and the Commission's list of recommendations. City of Fort Collins - Home Buyer Assistance Request: $300,000 Recommendation: $200,000 HOME funds and$100,000 Affordable Housing Fund(AHF) This program is administered by the Advance Planning Department and provides zero- percent interest loans to eligible first-time homebuyers. The assistance covers down payment and closing costs to a maximum of$8,000 for households at 5 1% to 80% of Area Median Income (AMI) and $16,000 for buyers at or below 50% of AMI. The $100,000 requested from the AHF will be used in those cases where properties are currently rented and subjected to Federal relocation requirements. Approximately 62 households will be assisted in the next year with this program. Habitat for Humanity—Development Fees and Down Payment Assistance Request: $73,242 Recommendation: $47,000: $15,000 AHF for development fees and $32,000 AHF for n 7— DATE: November 6, 2001 5 ITEM NUMBER: 31 A-C homebuyer assistance • Habitat is requesting HOME funds to acquire two new lots in the Waterglen subdivision and funding to pay for Development and Building Permit Fees for two current lots soon to be under construction. In addition, Habitat requests AHF funding for down payment to support large family acquisition(four bedrooms), because values of these homes may exceed the FHA maximum cost limits ($175,750) imposed by federal regulations on the HOME Program. Care Housing—Fairbrooke Heights Development Request: $500,000 Recommendation: $470,000: $206,250 HOME funds, $194,700 CHDO funds, and $69,050 AHF CARE plans to use HOME funds for construction purposes. The project will be a 36 unit multi-family rental development, which will consist of two- bedroom units. The site is located at 1827 Somerville Drive, which is east of the intersection of Somerville Drive and Langshire Drive. Bethphage - Acquisition of Group Home . Request: 195,000 AHF Declining Balance Loan Recommendation: $111,900 AHF Bethphage is interested in acquiring and rehabilitating a single-family home for five individuals with developmental disabilities. All individuals identified to live in the project will be disabled and have incomes at or below 30%of AMI. Fort Collins Housing Authority - Rigden Farm Land Acquisition Request: $241,000 Recommendation: $241,000 CDBG funds The Fort Collins Housing Authority and Sierra Land Corporation are forming a joint venture to develop 120 affordable housing units at Rigden Farm located at Timberline and Drake. HOME funds are requested to acquire the land for 33 rental units at 50% of AMI. Specifically, the total project will consist of 33 rental units at 50% of AMI, 38 for-sale units at 40-60% of AMI, 32 single-family units at 60-80% of AMI, 6 carriage houses renting at 60-80% of AMI, 56 single family detached units at 75-95% of AMI, of which 45 units will be market rate. DATE: November 6, 2001 6 ITEM NUMBER: 31 A-C Fort Collins Housing Corporation—Stanford Road Tri-plea Acquisition and Rehabilitation I Request: $92,250 Recommendation: $92,250 CDBG funds The Fort Collins Housing Corporation requests funds to purchase a triplex consisting of one each two bedroom, three bedroom and four bedroom units. This property requires approximately $12,000 of rehabilitation. Financing will be secured through First National Bank at a rate of 5.75% for 80% loan, adjustable every 5 years. Neighbor to Neighbor—Northern Front Range Family Transitional Housing Request: $20,000 Recommendation: $0 Neighbor to Neighbor is requesting funding for Tenant Based Rental Assistance to provide gap funding that will keep formerly homeless families and individuals with mental illness in transitional housing to allow for opportunities of self-sufficiency. Funds would support the Northern Front Range Continuum of Care, a regional partnership that supports homeless in Northern Colorado. Lagunitas -Redtail Affordable Housing Request: $1,260,000 Recommendation: $0 The Lagunitas Company is requesting funding for acquisition and construction of an 84-unit condominium development. All of the units will be for purchase and will be affordable to households between 50% and 80% of AMI. Units in this development will be one, two, and three bedroom units configured in 8-12 units per building, and all will include either an attached or detached garage. KB Home-Provincetowne Request: $927,598 Recommendation: $0 KB Home is requesting funds to subsidize four areas in the development of the Provincetowne project: general construction, handicap modifications for 12 units, permitting and development fees, and down payment assistance for homeowners. DATE: November 6, 2001 7 L ITEM NUMBER: 31 A-C Provincetowne is a new subdivision in Fort Collins located at Lemay and Trilby. • Approximately 850 units are planned in a variety of housing types, including single-family detached and townhouse style. KB Home has already committed to making 30% of these units or 255 units affordable. In this particular development phase, there will be 141 affordable housing units. The designs include two and three bedroom floor plans, and one story ranch units at the ends of the multiple unit buildings. Volunteers of America—Elderly Housing Request: $290,000 Recommendation: $71,000 HOME funds and$219,000 AHF Volunteers of America is proposing a 60-unit independent living apartment complex reserved for very low-income elderly located at 1401 Horsetooth Road. This project is a HUID 202 project, with commitments of$4,156,400 for construction-related activities and $800,500 for a five-year rental subsidy to support the project. The project has previously received $250,000 of HOME funds from the City. Elizabeth Street Apartments—Elderly Housing • Request: $250,000 Recommendation: $125,000 HOME funds and$125,000 AHF Request by Simpson Housing for funds to pay City development Impact/Building permit Fees to help construct 50 senior apartments on West Elizabeth Street. Total amount of funding requested=$4,149,090 Total amount of funding available=$2,558,900 Total amount of funding allocated= $1,802,150 The total amount of funding requests considered by the CDBG Commission was approximately $4.1 million, however, only about $2.5 million of Rinds are available. With the amount of total requests far exceeding available funding, obviously not all applications could be funded. Also, some applicants requested funds for projects that are ineligible for the use of CDBG funds. The CDBG Commission has recommended full funding for five (5) proposals, and partial funding for two (2) other projects. Proposals, which did not receive full funding, were deemed of a lower priority and, in some cases, a lack of funds, program category limitations, or funding guidelines prohibited their full funding. The Commission has recommended no funding for three (3) proposals. The Commission's reasons for either full funding, partial funding, or no funding are presented in Attachment C. The Commission has recommended allocation of$333,250 of the $1,090,000 of reprogrammed CDBG funds. The balance of $756,750 of the reprogrammed CDBG funds will be available for allocation in the 2002 spring cycle of the competitive process. DATE: November 6, 2001 8 ITEM NUMBER: 31 A-C I Summary of the Community Development Block Grant Commission's Recommendations for Funding Request Recommendation Applicant—Project $92,250 $92,250 Ft. Collins Housing Corporation—Housing rehabilitation $250,000. $250,000 Elizabeth Street—Development fees $290,000 $290,000 Volunteers of America- Development fees $500,000 $470,000 CARE Housing, Inc.—Fairbrooke $300,000 $300,000 City of Fort Collins—Downpayment assistance $73,242 $47,000 Habitat for Humanity—Homebuyer assistance& Development fees $195,000 $111,900 Bethphage—Group home $241,000 $241,000 Ft. Collins Housing Authority—Rigden Farm $20,000 $0 Neighbor to Neighbor—Tenant based rental assistance $927,000 $0 KB HOME—Provincetowne $1,260,000 $0 Lagunitas - Condos RESOLUTION 2001-151 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE FY 2001-2002 HOME INVESTMENT PARTNERSHIPS PROGRAM FOR THE CITY OF FORT COLLINS BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that City staff is hereby authorized to submit the FY 2001-2002 Home Investment Partnerships (HOME) Program application as follows: Amount Applicant- Project $125,000 Elizabeth Street—Development fees $ 71,000 Volunteers of America- Development fees $206,250 CARE Housing, Inc.—Fairbrooke $200,000 City of Fort Collins—Downpayment Assistance Community Housing Development Organization Funds Amount Applicant-Project $194,700 CARE Housing, Inc. —Fairbrooke Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 6th day of November A.D. 2001. Mayor ATTEST: City Clerk • • RESOLUTION 2001-152 OF THE COUNCIL OF THE CITY OF FORT COLLINS ALLOCATING FUNDING FROM THE CITY'S AFFORDABLE HOUSING FUND BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that $671,950 from the City's Affordable Housing Fund is hereby allocated as follows: Amount Applicant- Project $125,000 Elizabeth Street—Development fees $219,000 Volunteers of America-Development fees $69,050 CARE Housing, Inc.—Fairbrooke $100,000 City of Fort Collins—Downpayment assistance $15,000 Habitat for Humanity—Development fees $32,000 Habitat for Humanity—Homebuyer assistance • $111,900 Bethphage—Group home Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 6th day of November A.D. 2001. Mayor ATTEST: City Clerk • . RESOLUTION 2001-153 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE ALLOCATION OF REPROGRAMMED COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that $333,250 of reprogrammed Community Development Block Grant funds is hereby allocated as follows: Amount Applicant- Project $92,250 Ft. Collins Housing Corporation—Housing rehabilitation $241,000 Ft. Collins Housing Authority—Rigden Farm Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 6th day of November A.D. 2001. Mayor ATTEST: City Clerk • Attachment"A" 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 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 spritog 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 bi-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 end 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 Two new application forms have also been developed. One form would be used for Housing proposals while to other form would be used for Non-Housing Proposals (public services,public facilities, etc.). 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. Ranking Criteria for CDBG,HOME and Affordable Housing Funding The ranking criterion is divided into five major categories.Each category is given a total number of points that has been weighed according to their importance with respect to local and federal priorities.This ranking sheet will be used to assist the Community Development Block Grant Commission(CDBGC)and the Affordable Housing Board(AHB)in the FYOI Competitive Funding Process.CDBG and AHB members will rank projects according to the questions and criteria shown below. ImosetlBenefit(maximum 30 points) I. Primarily targets low income persons? (0-10) (0-30%of AMI= 10 pts,31-50%=8 pts,51-80%=4 pts) 2. Project produces adequate community benefit related to cost? (0-5) 3. Does the project provide direct assistance for persons to gain self-sufficiency? (0-5) 4. Does the project provide long-term benefit or affordability? (0-10) (I-10 yrs=3 pts, 11-19 yrs=6 pts,20 to 30 yrs=8 pts,and Permanent=10 pis) Sub-total Need/Priority(maximum 15 points) I. 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 a need for this project? (0-5) Sub-total Feasibility(maximum 15 points) I. The project will be completed within the required time period? (0-3) 2. Project budget is justified?(Costs are documented and reasonable)? (0-4) 3. The level of public subsidy is needed?(Private funds not available)? (0-4) . 4. Has the applicant documented efforts to secure other funding? (0-4) Sub-total Leveraeina Resources(maximum 25 Points) I. Does the project allow the reuse of our funding? (0-8) A. Principal and interest(30 year Amortization or less) 8 poim B. Principal and no interest or Principal and balloon payment 4 point C. Declining balance lien(amount forgiven over time) I point D. Grant(no repayment) 0 poini 2. Project or agency leverages human resources(Volunteers) (0-7) 3. Project leverages financial resources?(Including in-kind) (0-10) A. Less than 1:1 - 0 poim B. 1:1 to 1:3 4 point C. 1:4 to 1:6 7 point D. More than 1:7 10 Pon Sub-total Capacity and History(maximum 15 points) I. Applicant has the capacity to undertake the proposed project? (0-10) 2. If previously funded,has the applicant completed prior project and maintain regulatory compliance? (0-5) 3. If new,applicant has capacity to maintain regulatory compliance? (0-15) Sub-total GRAND TOTAL • Attachment"B" • ADDITIONAL BACKGROUND INFORMATION r 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. To help low-income individuals to purchase housing for their principal residence. . Applicants must meet income guidelines of no more than 80% of the 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$5,000 to help cover downpayment and closing cost expenses. The funding is repaid when the property is sold or transferred out of the buyerEs name. See Eligible Property Types section below for a list of property types eligible for HOME assistance and purchase price restrictions. Restrictions will apply which will assure the property remains affordable. This is accomplished by the E recapturing[I of the HOME investment. Income Limits: 1 person $29,850 2 persons $34,100 3 persons $38,400 4 persons $42,650 5 persons $46,080 6 persons $49,440 7 persons $52,880 8 persons $56,320 2. For 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 1 community housing development organizations(CHDOs), non-profit agencies, and for- profit developers. 3. For 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. 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 $151,905. HOME PROGRAM PRIORITIES The 1995-99 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. 2 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. 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; (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. • 3 Development Standards in the Fort Collins Growth Management Area Growth Management Lead Team Discussion October 16, 2001 The Problem: How can we insure that development in the City's Growth Management Area occurs according to City standards? Background: Until very recently, the City has relied on the GMA Intergovernmental Agreement between the City and the County to insure that development in the GMA occurs according to City standards. The first "Now, therefore..." in the IGA states: The GMA, and the areas inside the city limits of the City, represent the areas that the County and the City agree are appropriate for urban development with urban levels of public services and facilities. The remainder of the IGA defines the specific processes that should be used to accomplish urban standards for development in the GMA. The City has assumed that as a signatory to the IGA, the County would take the necessary internal steps to assure that the intent of the IGA was fulfilled. However, recent events have raised serious questions about whether this result can and is being realized. Recently, some developments have been approved by the County that are in the GMA, and City standards have not been applied. The Ironwood Plaza is a good example. City staff reviewed the development proposal and notified the County of several requirements to insure that when the property is annexed, the site and surrounding infrastructure would meet City standards. Many of the City comments were not implemented. When questioned, County staff stated they do not have authority under the IGA to make requirements of developers, and that if the requirements are not explicitly in their land use code, the terms of the IGA are unenforceable. In an email between County Planner Larry Tim and Ken Waido, Larry states: The intergovernmental agreement is a contract that only binds the two parties to the contract and addresses primarily administrative issues between the County and the City. These administrative matters generally aren't anything a developer needs to be involved in. Additional info needed: Before we can proceed with a strategy to insure our objectives are met in the GMA, we need to answer two questions: I) Does the County still agree that development in the GMA should occur according to City standards, and is this still official County policy? This is a question that should be relayed to County Administrator Frank Lancaster and the County Board of Commissioners. Attachment"C" i �hwsw�� ae•F„�'k a ��i �_e , COMMtJ1�lTY t�lELOP � (3CK O�I�'C RM 'a^s ` `' s 5� �1l�@etfn i• tU •:: `'�.�_r�,pa ??s^7s .c� r a u ux iyTa ' u,.,Y"Xp.m« 3 'x' r� �s'ry�{' �8 � x E � Tiry� Oi O�IIRS �fff3CfiOlia� , ' „ k� ' . YY. Commission members present: Phil Majerus Terri Bryant Vi Guthrie Brett Hill Jennifer Molock Bill Steffes Dennis Vanderheiden Cheryl Zimlich . Linda Coxen Staff: Ken Waido Heidi Phelps Maurice Head Julie Smith Stacy Kelley Produced by Meadors Court Reporting, LLC 140 West Oak Street, Suite 266 Fort Collins, Colorado 80524 970.482.1506 • 970.482.1230 fax meadors@reporterworks.com e-mail 1 MEETING HIGHLIGHTS r Mr. Waido briefed the Commission on the new developments concerning funding eligibility among the various sources. HUD has revised its policy of paying City impact fees from CDBG funding. That activity is now ineligible. This decision has increased the availability of CDBG funding due to various applicants being approved for payment of impact fees. The previously allocated CDBG funds must be replaced by Affordable Housing Fund monies and/or HOME funds. Mr. Waido noted that in addition to the eight pending proposals, the sheet before the Commission included the Elizabeth Street project, Volunteers of America, CARE, and the Housing Authority as current applicants for funding. Ms. Smith noted that the only items eligible for CDBG are the Fort Collins Housing Corp rehab project and the Fort Collins Housing Authority Rigden project. This leaves over $700,000 of CDBG funding for the Spring cycle. Only 1.5 times the grant can be held in active abeyance. Presently, the funds are .7 of the total, and this reprogramming could push the envelope on the requirements. There may be over$2 million of CDBG funds available in the Spring. In response to questions by the Commission, Staff noted that these applicants are not new applicants, but funding recipients who, due to the changes in regulations, need their funding allocated from new sources. Mr. Waido reviewed the handout regarding available funds versus the requests in the various categories. Following discussion, motions, and voting, moved by Ms. Molock, seconded by Ms. Coxen: To adopt the final recommendations in toto, to be forwarded to City Council for its determination. Motion passed 7-2. The meeting adjourned at 8:30 p.m. 2 FUNDING RECOMMENDATIONS • Neighbor to Neighbor — Tenant-based Rental Assistance — fees. Request $20,000 (Eligible from Affordable Housing Fund.) Moved by Ms. Zimlich, seconded by Ms. Guthrie: To allocate $20,000 from the Affordable Housing Fund. Motion failed 4-4. Moved by Mr. Steffes, seconded by Ms. Coxen: To recommend no funding, on the basis that the City has committed to funding this project from the general fund. Motion approved unanimously. Total recommended funding level - $0 Pros of Application Cons of Application The program is well leveraged. The need The City of Fort Collins needs to make its is high, and the project is worthy. CDBG participation felt in this project. The funds are more than adequate. This program will be funded by the City without project was worthy for this award before CDBG subsidy. and still is. [FortCollins Housing Corp - Rehabilitation. Request $92,250 (Eligible fromor HOME.) Moved by Mr. Vanderheiden, seconded by Ms. Zimlich: To recommend full funding from CDBG funds. Motion passed unanimously. Total recommended funding level - $92 250 Pros of Application Cons of Application This project has been previously approved and addresses an urgent need. 40 3 Elizabeth Street — Amended request. Request: $250,000 (Eligible from HOME and Affordable Housing Fund) Moved by Mr. Hill, seconded by Ms. Coxen: To recommend funding of $250,000 from HOME funds. Motion failed 2-6. Moved by Mr. Steffes, seconded by Mr. Majerus: To recommend funding of $125,000 from HOME funds and $125,000 from the Affordable Housing Fund. Motion carried 7-1. In discussion by the Commission and Staff: Worthy projects are competing for funding that is inadequate overall. This project is under construction, with an assurance of $250,000, and that funding will be needed soon. A competing project, Volunteers of America, is in position for the planning process and may not need funding for some time. Total recommended funding level - $250,000 Pros of Application Cons of Application Good program. Commitment for funding already made. Volunteers of America — Amended Request. Request: $71,000 from HOME; $219,000 from Affordable Housing Fund. Total request: $290,000. Moved by Mr. Steffes, seconded by Ms. Coxen: To recommend funding of $71,000 from HOME funds; $219,000 from the Affordable Housing Fund in the form of a grant. Motion passed unanimously. In discussion by the Commission and Staff: The need exists, and funding for this project is already approved. This strategy would leave more funds with HOME and the pressing needs that exist for that source. The applicant's plan is in process, but will not be presented to Planning & Zoning before January. This is a worthy project, and the prior commitment needs to be followed. The funding is already allocated, and that should not be changed. The construction could be funded in the next cycle; HOME dollars will not be available in the spring cycle. Total recommended funding level - $290,000 Pros of Application I Cons of Application Good program. The commitment to fund Funding could possibly be delayed in favor has already been made. I of more urgent needs with other projects. 4 . CARE — Amended request and new request. Request: $305,300 from CDBG; $92,250 from HOME; $102,450 from CHDO. (Affordable Housing Fund also applicable.) Total request: $500,000. Moved by Mr. Steffes: To recommend funding of $206,250. Motion died for lack of a second. Moved by Mr. Vanderheiden, seconded by Ms. Zimlich: To recommend funding of $92,250 from HOME funds CHDO 2000; and $102,450 from CHDO 2001 funds. Motion carried unanimously. Moved by Ms. Zimlich, seconded by Mr. Steffes: To reduce the recommended Bethphage funding by $99,050; to allocate that $99,050 to the CARE application; to allocate $206,250 of HOME funds to CARE; for a total recommended allocation of $95,950 from the Affordable Housing Fund to Bethphage and total recommended funding of $305,300 to CARE. Motion passed 6-3. Moved by Mr. Majerus, seconded by Mr. Hill: To recommend reduction of the CARE funding by $30,000 from the $99,050 Affordable Housing Fund portion; to allocate half of that reduction ($15,000) to Bethphage; to allocate the other half of that reduction ($15,000) to Habitat for Humanity; noting the reluctance of the Commission to participate in payment of $60,000 of arguably unnecessary attorney fees. Motion passed 6-2, with one abstention. (Motion repeated in . Bethphage and Habitat sections.) In discussion by the Commission and Staff: CARE is the only eligible recipient of CHDO funds. Either CARE receives the funds, or no one does. The funding represents a commitment that has already been made. Discussion was held on comparisons between Bethphage and CARE and each applicant's ability to fund any shortages. CARE addresses more people per dollar. It was further noted the complexity of tax credit financing, the scarcity of legal professionals with that expertise, and the circumstances that led to the applicant's current crisis. Other factors considered: The management strategies; the shortfalls of legal representation; the accountability of the project for the present problems; the application of developer fees to combat this problem; and the need for retainage. Total recommended funding level - $470 000 Pros of Application Cons of Application The applicant is trying hard and being responsible with the project. Good track record. The applicant does a better job than anyone else with the AMI level • addressed. 5 Home Buyer Assistance. Request: $200,000 (HOME) and $100,000 (Affordable Housing Fund). Total request -$300,000. Moved by Mr. Majerus, seconded by Ms. Coxen: To recommend allocation of $100,000 from the Affordable Housing Fund. Moved by Mr. Steffes, seconded by Ms. Molock: To amend the motion to recommend allocation of $200,000 from HOME funds; $100,000 from the Affordable Housing Fund. Motion to amend passed 7-1 with one abstention. The motion, as amended, passed unanimously. In discussion by the Commission: The allocation is recommended in this fashion in order to combine the resources of the applicable funding sources as well as to allow the flexibility gained from each one. Total recommended funding level - $300,000 Pros of Application Cons of Application Good program. Good track record. Numbers are better than ever. Program is highly successful. 6 • KB Home. Request: $632,485 from HOME; $295,113 from Affordable Housing Fund. Total request: $927,598. i Moved by Mr. Steffes, seconded by Mr. Vanderheiden: To recommend no funding. Motion carried unanimously. Concerns and responses of the Commission and Staff: Because of regulations that have recently come to light, a severe funding shortfall exists. Resources have been committed to other programs prior to this application coming forward. This project will in all likelihood proceed regardless of CDBG participation. Total recommended funding level - $0 Pros of Application Cons of Application The proposed project is worthy and well Some of the applied-for items are planned. appropriate, but other items such as the square-foot request should not be considered. The AMI level served is at the high end and does not serve the highest need. • • Habitat for Humanity. Request: $41,242 from HOME; $32,000 from Affordable Housing Fund. Total request: $73,242. Moved by Ms. Coxen: To recommend funding of $32,000 from the Affordable Housing Fund; that any funds not expended by the applicant be awarded to Tenant-Based Rental Assistance. Motion withdrawn. Moved by Ms. Coxen: To award any funding not used by the applicant to Bethphage for purchase of property. Motion died for lack of a second. Moved by Mr. Hill, seconded by Mr. Majerus: To recommend no funding from HOME funds. Motion carried 5-4. Moved by Mr. Majerus, seconded by Mr. Vanderheiden: To recommend funding of $32,000 for down payment assistance as a loan; if fee appraisals do not exceed the FHA limit of the house, the funds would be reprogrammed to the Affordable Housing Fund. Motion carried unanimously. Moved by Mr. Majerus, seconded by Mr. Hill: To recommend reduction of the CARE funding by $30,000 from the $99,050 Affordable Housing Fund portion; to allocate half of that reduction ($15,000) to Bethphage; to allocate the other half of that reduction ($15,000) to Habitat for Humanity; noting the reluctance of the Commission to participate in payment of $60,000 of arguably unnecessary attorney fees. Motion passed 6-2, with one abstention. (Motion repeated in Bethphage and CARE sections.) Concerns and responses of the Commission and Staff: Staff is wary whether any fees for a project are eligible for funding. The loan would be 0% interest, due on sale. The money may not be needed, depending on the appraisal. The money would be reprogrammed if not used. Total recommended funding level - $47.000 Pros of Application Cons of Application A family with four children in the lower AM] The subsidy level at $20,000 per unit is is extraordinarily stretched in its ability for higher than guidelines. Other projects home purchase. This program would have higher priority, as well as prior greatly help that type of applicant. commitments, with the limited funding available. The project is somewhat remote from the Fort Collins community as a practical matter. (Although within City limits a Bethphage: Request: $195,000 from Affordable Housing Fund. Moved by Ms. Bryant, seconded by Mr. Steffes: To recommend funding of $195,000 from the Affordable Housing Fund, in the form of a 0% interest loan, due on sale. Motion carried 6-2. Moved by Ms. Zimlich, seconded by Mr. Steffes: To reduce the recommended Bethphage funding by $99,050; to allocate that $99,050 to the CARE application; to allocate $206,250 of HOME funds to CARE; for a total recommended allocation of $95,950 from the Affordable Housing Fund to Bethphage and total recommended funding of $305,300 to CARE. Motion passed 6-3. Moved by Ms. Zimlich, seconded by Mr. Vandenheiden: To recommend funding of the $950 in the Affordable Housing Fund that remains, following all other recommendations. Motion passed 7-0 with 2 abstentions. Moved by Mr. Majerus, seconded by Mr. Hill: To recommend reduction of the CARE funding by $30,000 from the $99,050 Affordable Housing Fund portion; to allocate half of that reduction ($15,000) to Bethphage; to allocate the other half of that reduction ($15,000) to Habitat for Humanity; noting the reluctance of the Commission to participate in payment of $60,000 of arguably unnecessary • attorney fees. Motion passed 6-2, with one abstention. (Motion repeated in CARE and Habitat sections.) Concerns and responses of the Commission and Staff: A question surfaced regarding the placing of restrictions in order to see a reflection of the grant in the number of Fort Collins clients. Although clients may come from outside of Fort Collins, the home is within the Fort Collins area as a practical matter, and residents of the home are Fort Collins residents as a practical matter. A deed restriction would be placed on the funds, with a due-on-sale clause. Discussion was held on the possibility of the funding benefiting from the appreciation of the property. Total recommended funding level - $111,900 Pros of Application Cons of Application The project is worthy. Although not within The project is outside of city limits. Clients city limits, the project is in the Fort Collins come from other locations than Fort area as a practical matter. There is a Collins. It shows a higher ratio of clients to demonstrable need in the community. dollars than some other programs. Ownership is in perpetuity. The program tries to keep families together rather than displacing the client from the family in . another community. 9 Fort Collins Housing Authority. Rigden Acquisition. Request: $241,000 from CDBG; HOME and Affordable Housing Fund also eligible. Moved by Mr. Hill, seconded by Ms. Coxen: To recommend funding of $241,000 from CDBG funding in the form of a grant. Motion carried 5-4. Concerns and responses of the Commission and Staff: Inadequate reserves are planned for maintenance and management issues. Total recommended funding level - $241,000 Pros of Application Cons of Application Project going forward with nice-looking Inadequate showing of good strategy housing. Need is high. Provides for a good concerning reserves. mix of housing types and needs. Lagunitas. Request: $630,000 from HOME; $630,000 from Affordable Housing Fund. Total request: $1,260,000. Moved by Mr. Steffes, seconded by Ms. Zimlich: To recommend no funding. Motion carried 6-2. Concerns and responses of the Commission and Staff: The Commission wished to encourage the applicant to return in another cycle. There may be good concepts and approaches in this project, but it is presently more conceptual. Development review may help resolve concerns. Staff was asked to draft a letter to show interest by the Commission but not bind the Commission as to intent. Total recommended funding level - $0 Pros of Application Cons of Application There is a possibility of other programs Developer has no previous track record completed that have been successful. The developing Affordable Housing projects. deed in perpetuity concept is attractive. There were concerns about the ability to complete. Funds are short when compared to the solidity and confidence of this project. A noise problem exists with the railroad tracks. The subsidy amount is extremely large. The applicant seemed to have a vague grasp of some of the concepts that the Commission looks for. No levera in demonstrated. 10 Appendix t Commission representatives, by issue, for the study session with City Council: Neighbor to Neighbor—TBRA Dennis Vanderheiden Fort Collins Housing Corp. Mr. Steffes Elizabeth Street Brett Hill Volunteers of America Brett Hill CARE Linda Coxen Home Buyer Assistance Bill Steffes KB Home Bill Steffes Habitat for Humanity Vi Guthrie Beth ha a Terri Brvant Fort Collins Housing Authority— Ri den La unitas Bill Steffes Appendix 2 - Programs, Requests, and Commission Recommendations (Prepared by City Staff) October 11, 2001 Application Request HOME CHDO CHDO AFH CDBG' Funding ($602,250) 2000 2001 ($671,950) ($1,090,000) Recommendation $92,250 $102,450 N2N-TBRA $20,000 0 0 0 0 0 0 FCHC-rehab $92,250 0 0 0 0 $92,250 $92,250 reprogrammed Elizabeth $250,000 $125,000 0 0 $125, 000 0 $250.000 reprogrammed VOA $290,000 $71,000 0 0 $219,000 0 $290,000 re ro rammed CARE $300,000 $206,250 $92,250 $102,450 $89,050 0 $470,000 Reprogrammed $200,000 New HBA $300 000 $200,000 0 0 $100.000 0 $300,000 KB Home $927 598 0 0 0 0 0 0 Habitat $73,242 0 0 0 Fees$15,000 0 $47,000 HBA$32.000 Beth ha a $195,000 0 0 0 $111.900 0 $111,900 FCHA Ri den $241 000 $241 000 $241,000 La unitas $1,260,000 0 0 0 0 0 0 Total $4,149,090 $602,250 $92.250 $102,450 $571,950 $333,250 $1,802,150 CDBG reprogrammed funding: Concorde $250,000 CARE $300,000 Elizabeth $250,000 VOA $290,000 Total $1,090,000 12