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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/15/2011 - PUBLIC HEARING AND RESOLUTION 2011-101 APPROVING TDATE: November 15, 2011 STAFF: Ken Waido AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 22 SUBJECT Public Hearing and Resolution 2011-101 Approving the Programs and Projects that Will Receive Funds from the Federal Home Investment Partnerships (HOME) Program and the City’s Affordable Housing Fund. EXECUTIVE SUMMARY The Resolution will complete the fall cycle of the competitive process for allocating $813,577 of City financial resources to affordable housing programs/projects. BACKGROUND / DISCUSSION Resolution 2011-101 establishes which programs and projects will receive funding for the FY 2011 Program year, which started on October 1, 2011, including the use of Federal HOME grant funds and program income from the US Department of Housing and Urban Development, 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 $449,446 FY 2011 HOME Participating Jurisdiction Grant 89,888 FY 2011 HOME CHDO Set-aside 39,107 FY 2011 HOME Program Income 325,024 2011 Affordable Housing Fund $903,465 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 Villages (formerly the Fort Collins Housing Corporation). However, none of the eligible CHDOs applied for funding during the fall cycle of the competitive process, therefore, the $89,888 will be carried-over to the 2012 spring cycle. The total amount of funding thus available for allocation is $813,577. FINANCIAL / ECONOMIC IMPACTS The Home Investment Partnerships (HOME) Program provides federal 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’s General Fund contributes $325,024 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. November 15, 2011 -2- ITEM 22 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 projects and major rehabilitation of existing units 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 Community Development Block Grant (CDBG) Commission recommendations The CDBG Commission presents recommendations as to which programs and projects should receive funding from the available funding sources presented above. The following table presents the allocations recommended by the Commission to the City Council: AFFORDABLE HOUSING Applicant Project/Program Funding Request Commission’s Recommendation Unfunded Balance Percentage of Request Funded HO-1City of Fort Collins – Analysis of Impediments to Fair Housing Choice $25,000 (Grant) $25,000 (Grant) $0 100% HO-2FC Caribou II – Caribou Apartments Phase II $500,000 Proposal withdrawn by the applicant HO-3Fort Collins Habitat for Humanity – Rigden Cottages East, Land Acquisition $82,500 $82,500 $0 100% HO-4Fort Collins Housing Authority – Supportive Housing Development $600,000 $586,077 $13,923 97.7% HO-5 Housing Authority of Loveland – Larimer Home Improvement Program $120,000 (Grant) $120,000 (Grant) $0 100% Totals $827,500 $813,577 $13,923 98.3% Except for the grants noted above, funding recommendations in the Affordable Housing category are in the form of a “Due on Sale Loan + 5% Simple Interest Loan.” November 15, 2011 -3- ITEM 22 Recommended Funding % of Total Category $813,577 90.0% Affordable Housing Programs and Projects 89,888 10.0% Unallocated $903,465 100.0% Total Funds Available The $89,888 of unallocated funding will be carried over to the 2012 spring cycle of the competitive process. This $89,888 is the amount the City is required to reserve for CHDOs and there were no CHDO proposals submitted for funding during the fall 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. Prior to its meeting on October 13, 2011, when the CDBG Commission formulated its funding recommendations to the City Council, the Commission received two memorandums, one from the City’s Economic Health staff and the other from the staff of the Fort Collins Housing Authority. Copies of these memoranda are included in Attachment 7. The Commission’s position regarding the points and counter-points of these memorandums is that their role is to make funding recommendations on affordable housing and community development proposals; they are not charged with making “land use” decisions. HUD regulations also require a 30-day public comment period on the proposed allocation of HOME funds as recommended by the CDBG Commission. Staff placed an ad in the Coloradoan newspaper presenting the list of recommended funding for programs/projects and indicated the public comment period would start on October 14, 2011, and end on November 14, 2011. 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 HOME Federal Program 5. Minutes of the CDBG Commission’s October 13, 2011 Meeting 6. Formulation of Funding Recommendations Session 1 ATTACHMENT 1 BACKGROUND AND SUMMARY OF CDBG COMMISSION’S RECOMMENDATIONS FOR FUNDING At the November 15, 2011, 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 Partnerships (HOME) Program and the City’s Affordable Housing Fund for the FY 2011 Program year. The resolution establishing which programs and projects will receive funds represents the culmination of the fall cycle of the 2011 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 and Human Services Work Group 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 HOME Program is an ongoing grant administration program funded by the Department of Housing and Urban Development (HUD). The City of Fort Collins has received HOME Program funds since 1994. The City is 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 program 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 Program is presented in Attachment 4. SELECTION PROCESS The selection process for the City's FY 2011 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 2011. The application deadline was Thursday August 18, 2011. At the close of the deadline the City received five (5) applications requesting a total of approximately $1,327,500. One proposal, a funding request for Caribou Apartments Phase II was subsequently withdrawn by the applicant reducing the total amount of funding being requested to $827,500 2 Copies of the housing applications were distributed to the Affordable Housing Board and to the CDBG Commission in early September.. On Monday September 19, 2011, the Affordable Housing Board conducted a special meeting to review the housing proposals and prepared a priority listing of applications to the CDBG Commission (see Attachment 3). On Thursday September 25, the Commission met to hear presentations and ask clarification questions from each applicant. The Commission then met on Thursday October 13 for the purpose of preparing a recommendation to the City Council as to which programs and projects should be funded for the FY 2011 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 – Analysis of Impediments to Fair Housing Choice Amount of request: $25,000 (Grant) Affordable Housing Funds Funding Recommendation: $25,000 (Grant) Affordable Housing Funds The Advance Planning Department is requesting $25,000 in Affordable Housing Fund dollars, to hire a consultant to update the City of Fort Collins’ Analysis of Impediments to Fair Housing Choice (AI). This project will satisfy Certifications in the Consolidated Plan that the City will affirmatively further fair housing, including that it will conduct a study to identify the impediments to fair housing choice within Fort Collins, and list appropriate actions to overcome the effects of any impediments identified through that analysis. Funding for this project must come from the City’s Affordable Housing Fund as there are no federal funds available. HO-2 FC Caribou II – Caribou Apartments Phase II Amount of request: $500,000 This proposal was withdrawn by the applicant. Caribou Apartments II is a 96 unit apartment complex, the second phase of an existing affordable housing development called Caribou Apartments, located on the west side of Timberline Road between Harmony Road and Horsetooth Road. The first phase was completed in 2008. Phase II will be 100% affordable with units at multiple income levels ranging from 30% to 60% AMI. 3 HO-3 Fort Collins Habitat for Humanity – Rigden Cottages East, Land Acquisition Amount of request: $82,500 Funding Recommendation: $82,500 Affordable Housing Funds Habitat for Humanity is requesting $82,500 to purchase lot M-6 in Rigden Farm to construct three owner-occupied units. HO-4 Fort Collins Housing Authority – Supportive Housing Development Amount of request: $600,000 Funding Recommendation: $586,077total, including $449,446 FY 2011 HOME Grant, $39,107FY 2011 HOME Program Income, and $97,524 from the Affordable Housing Fund This request is to provide funding for one of four 2011 strategic initiatives of Homeward 2020’s Ten-Year Plan to End Homelessness. The FCHA, Larimer Center for Mental Health, and other partners request funding for land acquisition to develop Northern Colorado’s first Permanent Supportive Housing Program of 40 units using nationwide best practice models and technical assistance. Supportive housing combines affordable housing with services that help people who face the most complex challenges live with stability, autonomy, and dignity. HO-5 Housing Authority of Loveland – Larimer Home Improvement Program Amount of request: $120,000 (Grant) Funding Recommendation: $120,000 (Grant) Affordable Housing Fund This a request from the Loveland Housing Authority to provide funding for the Larimer Home Improvement Program (LHIP) which provides low to no interest loans for home owners in Larimer County, including the city limits of Fort Collins, to address health, safety, and energy efficient repairs to their homes. The program is available to families earning no more than 80% of the AMI, but the average participant is closer to 50% AMI. The Emergency Funds Program provides one time only grants of up to $1,000 to very low income families (50% or below of AMI) who have emergency repair needs. The CDBG Commission has recommended that $813,577 (100.0%) of the available funding be allocated to Affordable Housing programs and projects. The remaining $89,888 of required CHDO set-aside funding will be carried over for use in the 2012 spring cycle of the competitive process, there were no CHDO proposals submits for funding during the fall cycle of the competitive process. The following table summarizes the utilization of funds from all sources. Recommended Funding % of Total Category $813,577 90.0% Affordable Housing Programs and Projects 89,888 10.0% Unallocated $903,465 100.0% Total Funds Available Attachment 5 contains information on how the Commission’s session where they formulate their funding recommendations was conducted. 1 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 2 Affordable Housing Board, and will require more time from current City staff, and increase the City Council’s involvement. Schedule The subcommittee also discussed two alternative schedules for the funding cycles. The option selected incorporates a spring cycle that starts in January and ends in May, and a fall cycle that starts in July and ends in November. Review Criteria The 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 3 operations;  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 for Public Facility proposals, and one 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. 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 Ranking of Priority Projects Project Applicant’s Initial Funding Request CDBG Commission’s Recommendation Unfunded Balance Percentage of Request Funded 1 HO-1 City of Fort Collins – Analysis of Impediments to Fair Housing Choice $25,000 $25,000 $0 100% 2 HO-5 Housing Authority of Loveland – Larimer Home Improvement Program $120,000 $120,000 $0 100% 3 HO-4 Fort Collins Housing Authority – Supportive Housing Development $600,000 $586,077 $143,923 97.7% 4 HO-3 Fort Collins Habitat for Humanity – Rigden Cottages East, Land Acquisition $82,500 $82,500 $0 100% 1 ATTACHMENT 4 ADDITIONAL BACKGROUND INFORMATION on the HOME INVESTMENT PARTNERSHIPS PROGRAM HOME INVESTMENT PARTNERSHIPS PROGRAM GUIDELINES (Adopted by the Fort Collins City Council, July 18, 1995) PURPOSE: The purpose of the Home Investment Partnerships (HOME) Program is to increase the supply of decent, safe, and affordable housing in the City of Fort Collins for an extended period of time. All of the HOME funds must benefit low and very low income households which are defined by the Department of Housing and Urban Development as having a total household income not exceeding 80% of the median household income for the Fort Collins area. ELIGIBLE PROJECTS: HOME funds must be used in the following ways: 1. DIRECT HOUSING ASSISTANCE: Down payment assistance: To help low-income individuals to purchase housing for their principal residence. Applicants must meet income guidelines of no more than 80% of the current median household income for the Fort Collins area and will be required to attend a homebuyer workshop. Assistance is in the form of zero percent deferred loan up to a maximum of $10,000 to help cover downpayment and closing cost expenses. The funding is repaid with a 5% simple interest charge when the property is sold or transferred out of the buyer’s name. Restrictions will apply which will assure the property remains affordable. This is accomplished by the “recapturing” of the HOME investment. Tenant based rental assistance: To help low-income households avoid eviction and homelessness, TBRA provides up to two years of housing subsidy and case management services to stabilize households and put them on the road to self-sufficiency. 2. NEW CONSTRUCTION of units for homeownership as well as rental occupancy targeted for low-income individuals and families which are developed, sponsored, or owned by community housing development organizations (CHDOs), non-profit agencies, and for-profit developers. 3. ACQUISITION of undeveloped, or developed, land resulting in the development or purchase of units for homeownership as well as rental occupancy. All regulations regarding income guidelines, purchase price limitations, resale limitations, rental rates, etc., will apply to acquisition projects. 2 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. 1 ATTACHMENT 5 2011 FALL FUNDING RECOMMENDATIONS COMMUNITY DEVELOPMENT BLOCK GRANT Meeting held Thursday, October 13, 2011 6:00 p.m. – 6:45 p.m. 218 North College Avenue Fort Collins, Colorado CITY OF FORT COLLINS COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION Meeting Notes October 13, 2011 CDBG Commission Members Attending: Kay Rios, Chair Jeff Taylor, Vice Chair Robert Browning Emily Sander Catherine Costlow Kristin Stephens Jennifer Wagner CDBG Commission Members Absent: Gordon Coombes Jamaal Curry Staff Attending: Ken Waido Heidi Phelps Gail Neben Sharon Thomas Citizen/Guests Attending: Julie Brewen, Fort Collins Housing Authority Chadrick Martinez, Fort Collins Housing Authority Bryce Hach, Homeward 2020 2 Call to Order: Meeting was called to order at 6:00 PM. Citizen Comments: No comments. Deliberations: Rios: A couple of things I want to run over especially for new members: As you make recommendations, so we can get all of that on tape. Make sure to give reasons that are factual and based on the information we have and if the second has the same thing to say, just say “ditto.” Let’s make sure we are putting all that information out there and, as a reminder, we are basing that on a Consolidated Plan and on the Affordable Housing Strategic Plan. That is where we look at what the priorities are. Phelps: Kay said everything in terms of the parameters. We want to let applicants know, the City works hard to have an open process. This is kind of like walking into Act II, Scene III of a play. There are many other components. This is not a board that makes an actual decision, and there is no formal appeal process. This is a recommending body only. If you have some concerns about the decisions or recommendations the board has made tonight, your option is to go to Ken Waido, who is the board liaison, and it will work up the chain of command. If you have concerns about what staff has said or done this evening, the path would be to take it to Joe Frank. If there are any issues, we ask that you submit them by Monday at 5:00, or let us know if you need more time. Any Questions? (No questions.) Thank you. Wagner: As I understand it, out of the CHODO funds, $89,888 will be available in the spring? Waido: Yes that is correct. Rios: Let’s get started. Does anyone want to jump in? Taylor: I move for full funding for HO1, the City of Fort Collins Analysis of Impediments to Fair Housing Choices. Wagner: Second. Taylor: This is a required analysis that needs to be done to be eligible to retain the CDBG and HOME programs. While difficult and time consuming, I think it is a good use of the money. Wagner: Ditto. 3 Discussion: Browning: I understood from what was said at the last session that the product is only used to satisfy HUD. You said you had bids at $19,435 and about $39,000. Why are we not going to the lowest bid? Waido: In the Review Committee’s opinion, which is five of us, the quality of the lowest bid was not commensurate with the money. You got what you paid for and it was not up to snuff in terms of what we believe is required for this project. Phelps: I would add to that. It was not some sort of back door regulatory check-off list. If that were the case, we would be less concerned. We are always concerned about quality, but in particular because fair housing issues have come to the forefront and we in fact have several cases in the City of Fort Collins right now where there are some challenges to fair housing. So, there are some legal issues. Taylor: Let me just inject a question. Since staff is the applicants, they probably should not be offering additional information. We are not just asking for clarification. We were asking for information, and I don't think that is correct. Phelps: Good point. Rios: I should have caught that, but it was appropriate for Bob to ask. Rios: We have a motion and a second for full funding for HO1. Is there any additional discussion? All in favor raise your hand. Six for, one opposed. Motion passes. HO1 City of Fort Collins – Analysis of Impediments to Fair Housing Choice Final Funding Recommendation: $25,000 Affordable Housing Funds Rios: Is there another motion? Wagner: I make a motion for HO3 - Habitat for Humanity: Rigden Cottages East Land Acquisition for $82,500 for full funding. Rios: Is there a second? Costlow: I second. Wagner: I believe this agency has a proven track record of success. I believe where the project is at and continuing through that development makes sense for them to continue to build further out. Costlow: Just to add to that, I think the land acquisition price seems reasonable and then I would ditto what Jennifer said. . 4 Discussion: Taylor: I’m going to be in support of this, but I have some concerns as far as direction in general as far as the cost. As an outgoing board member, I would just say that we should make sure we are putting the pencil to the math, as far as the amount of subsidy. And, going forward there are questions to ask them as far as the qualifying piece for the homeowners themselves. I am a little concerned about how they are coming up with those. It is workable, but I think it is not a great sustainable model. We might find our money going elsewhere for affordable housing than just trying to promote the home ownership subsidies. . Browning: I am concerned we are in the third and fourth positions on the loans. If they’re relying on us for money, I would rather see us in first or second place. I am not convinced it is appropriate for us to be loaning more than $1000 for down payment assistance. I would like to see us move up in position on the loans. Wagner: I think you have a good points Bob and Jeff. To the ongoing board members maybe discussions early next year with Habitat as to where the model is going. I think funding them today is the responsible thing to do with the dollars we have available and the project they have at hand, and letting them know some of the concerns prior to being at a funding decision so they can position appropriately in the future. Taylor: If I remember correctly from the email I sent out is that their position is they are not opposed to the change in the position ultimately. Should maybe this should be directed to on- going contracts. Browning: Why doesn't this affect them now? Taylor: I don't think it does. Costlow: So you wouldn't want to change it to say that we were a second instead of a third? Browning: As far as the number three and four positions, my thought would be to specify the land portion is number one and the down payment is number two. They said they have not had a foreclosure. I know a couple of the houses have sold. Wagner: I would be more in favor of that for a next time agreement. I know they said it is not an issue with that, but, are they fully on board? I think we are on questionable ground if we make that a condition today. Taylor: As a mortgage person, I would opt for a compromise position for the down payment portion. Historically, the down payment goes at the tail end. It is the last dollars in, so the position is last, but the subsidy on the land should go toward the project. That is typically how the lending side goes. Browning: Is the motion amended? 5 Taylor: At this point it’s not. . I make a friendly amendment. Bob, what would you feel about the language? Browning: I would be happy if the land loan goes to one and down payment assistance to the fourth as long as we address it with them. Taylor: Amended with the subsidy on the land acquisition go to first position and the down payment assistance applied for by the homeowner, not the applicant, to go into the traditional fourth position and that staff have an ongoing discussion with the applicant. Wagner: Amendment accepted with a comment that I would add the discussions to also include the increasing level of income. Costlow: Second accepts the amendment. Rios: Other comments? All in favor of full funding for HO3 with all of the other verbiage that went with it raise your hands. Motion passes unanimously. HO3 - Habitat for Humanity: Rigden Cottages East, Land Acquisition Final Funding Recommendation: $82,500 Affordable Housing Funds including a stipulation that the land loan goes to first position. Wagner: I make a motion to fund HO4, Fort Collins Housing Authority in support of housing development, out of the HOME fiscal year 2011, in the amount of $449,446 and out of the Affordable Housing Fund fiscal year 2011, in the amount of $97,524. Rios: Does that come up to $600,000? Wagner: No, that comes up to $53,030 short. Thomas: The total is $546,970. Rios: I’ll second? Wagner: To address how I came up with these numbers, we are short funding this cycle completely. However, there will be funds available in the HOME CHDO fund set-aside in the spring. I feel that this request should be supported. There is something we have not seen before and there is definitely a need. The Housing Authority has the ability, the expertise, and the track record to administer it successfully. I think they could work with this request being $53,000 short as their seed money and come back for additional funds out of CHDO funds in the spring. I would also add that the late information we received from City staff (the URA) is not a decision to be made by this Commission. I don't think it is relevant to our Commission's recommendation to City Council based on the criteria that we were given for making a decision. Thomas: To clarify, in order to use the CHDO funds, they had to come in as a CHDO and they did not this year. 6 Wagner: But that is something they could do, correct? Waido: They would have to come in as have the Villages as a CHDO. It’s a different entity. Thomas: It used to be the Housing Corporation but it’s now the Villages Wagner: By being $53,000 short, this gives them all but the 8.3% of the requested funding which is the seed money and I feel it’s reasonable to work with that. . That is something which I feel would be reasonable to work with. And, it is something that I think we do want to fund. Rios: And, I would say ditto to that and add that I like the structure, and that it can be permanent housing. Discussion: Waido: What did you just say? What did you mean, permanent housing? Rios: That is part of my notes that is can be permanent housing because they are using project based vouchers. Costlow: People do not have to move out. They can stay there once they’re in... Rios: Other comments? We have a motion on the floor to fund $449,446 from the HOME funds, and $97,524 from Affordable Housing. All those in favor raise your hands. Motion passed unanimously. HO4 – Fort Collins Housing Authority: Supportive Housing Development Funding Recommendation: $546,970; including $449,446 FY11 HOME and $97,524 Affordable Housing funds Taylor: I move for full funding for HO5, the Loveland Housing Authority Home Improvement Program for $120,000. Browning: I second the motion. Taylor: This was ranked consistently as second and third priority from the Affordable Housing Board. The application says the money will be used to leverage additional funds from the state. I love the way the program works, where it allows for assistance for emergency repairs, and, helps with rehabilitation of properties and lets people stay in their homes. It also helps with equipment failures such as furnaces. . Browning: Ditto. 7 Discussion: Rios: Other comments? All in favor for full funding for HO5 raise your hands. Motion passed unanimously. HO5 - Loveland HA: Larimer Home Improvement Program Final Funding Recommendation: $120,000 Wagner: I move to fund HO4, Fort Collins Housing Authority, for the remaining balance available of $39,107. Rios: I second that. I have a question. Would that still leave a shortage for HO4? Waido: That leaves the application $13,923 short. Stephens: Because we had saved money for the rehabilitation project. Wagner: Same comments. Rios: Ditto. Other discussion? All in favor to fund HO4 an additional $39,107 raise your hands Motion passed unanimously. HO4 – Fort Collins Housing Authority: Supportive Housing Development Final Funding Recommendation: $586,077; including $449,446 FY11 HOME, $97,524 Affordable Housing funds, and $39,107 FY11 HOME Program Income Waido: We have discussed all the proposals and have allocated all the funds, unless someone wants to change something. Rios: I ask for a motion to approve the entire package. Wagner and Taylor made a joint motion. Stephens: I second. Rios: Are there any concerns? All in favor to send the recommendations to Council raise your hands. Motion passed unanimously. Rios: Do we have anything else we need to discuss tonight? Waido: I just want to let you know that we have received a couple of Section 108 applications, but really only one live one. The Loan Review Committee is looking at them and is still in the process, but it is not ready to bring to this Commission. Rios: I make a motion to adjourn. 8 Taylor: I second. Adjournment: The meeting adjourned at 6:34 PM. On November 4, 2011, the CDBG Commission conducted discussions via email and the majority of the Commission agreed to rescind the condition that the City should be in the first lien position, on their recommendation to allocate $82,500 to Habitat for Humanity’s land acquisition proposal (Habitat had an issue with the City being in first position), and instead, the City should be in the second lien position (with which Habitat has no problem). 1 ATTACHMENT 6 City of Fort Collins Community Development Block Grant (CDBG) Commission Formulation of Funding Recommendations Session The CDBG Commission has prepared this hand-out to help you to understand how the Commission’s meeting for the purpose of formulating funding recommendations to the City Council is conducted. It is the Commission’s wish that our methodology be understandable to even the most casual observers. As you might imagine, the entire process is complex and time- consuming, especially given that grant requests greatly exceed the amount of available funding. City Staff will prepare an electronic matrix showing each application, the funding requested, and the total funds available. The Commission will discuss the pros and cons of every application. The order which applications are discussed is not important and there is no danger of ‘running out’ of funds before all applications are fully discussed. There will be preliminary funding motions made, seconded, and approved throughout the process and these recommendations will be added into the matrix. It must be emphasized that the matrix is a working document, and any figures used, whether they be for full, partial, or zero funding, are for discussion purposes only. It is also possible that the total funds listed in the matrix might exceed the total of funds available at any point in the process. After each application has been discussed, the Commission will start to adjust the matrix to start producing its recommendation for funding to Council. Funding contained on the matrix may be drastically changed in either a positive or negative manner during this part of the process. When the Commission agrees on the matrix as indicated by a motion to accept it, a second to the motion, and a positive majority vote, the process is over and the recommendation will be forwarded to the Council. While the Commission’s main purpose is to provide Council with the best funding alternative, the Commission is also sensitive that the funds being recommended for expenditure are taxpayer- provided. For this reason, it is entirely possible that not all funds will be recommended for expenditure, even if there are some applicants recommended for zero, or reduced, funding. The last point to be made is while this meeting is open to the public, to be fair to applicants who are not present at the meeting, no public comments will be taken. CITY OF FORT COLLINS PRIORITIES FOR HOUSING AND COMMUNITY DEVELOPMENT FUNDING 2010 - 2014 HOUSING 1. Increase the inventory of affordable rental units through the production of new rental units, or the acquisition and rehabilitation of former market rate units, converting them to affordable housing. 2 2. Preserve affordable housing units by monitoring the status of existing affordable units to maintain or add to the inventory. 3. Increase housing and facilities for people with special needs. 4. Provide financial assistance for first-time homebuyers. HOMELESSNESS Provide support and assistance to agencies and organizations that provide permanent supportive housing. NON-HOUSING Public Services: The City will support and enhance public services which focus on providing basic services to low-income citizens and families. Public Facilities: The City will acquire, support and enhance public facilities which focus on providing basic services to low-income citizens and families. Economic Development: a. Support, promote or expand development of the Fort Collins Urban Renewal Authority (URA). b. Remove severely blighted properties, especially to promote infill redevelopment. c. Continue to expand the use of tools for development such as the Section 108 Loan Program, Brownfields, and Economic Development Initiatives. d. Use CDBG funds to leverage public and private funds. e. Support, establish or expand programs that provide job training or career development for low- and moderate-income persons. f. Implement revitalization efforts in neighborhoods to improve housing and/or economic development opportunities. g. Promote or support sustainable energy resources. Non-Homeless Special Needs: The City will provide funding to projects that address housing and supportive service needs for the elderly, persons with disabilities, at-risk/endangered teens and young adults, victims of domestic violence, and persons with mental illness and/or substance abuse issues, and persons with HIV/AIDS and their families. 3 Special Needs: The City will support and enhance Housing and Public Service projects that directly address the needs of special needs populations, including the elderly/frail elderly, persons with disabilities, at-risk/endangered teens and young adults, victims of domestic violence, persons with mental illness and/or substance abuse issues, and persons with HIV/AIDS and their families. RESOLUTION 2011-101 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE PROGRAMS AND PROJECTS THAT WILL RECEIVE FUNDS FROM THE FEDERAL HOME INVESTMENT PARTNERSHIPS (HOME) PROGRAM, AND THE CITY’S AFFORDABLE HOUSING FUND WHEREAS, the Home Investment Partnerships (HOME) Program is an ongoing grant administration program funded by the Department of Housing and Urban Development (HUD); and WHEREAS, the City has received 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 2000-013, formally adopting a competitive process for the allocation of City financial resources to affordable housing programs and projects and community development activities; and WHEREAS, since January 2011, the CDBG Commission has held two public hearings to obtain citizen input on community development and affordable housing needs, and has heard presentations and asked clarification questions from each applicant that submitted a proposal to the City requesting funding; and WHEREAS, on October 13, 2011, 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 FY 2011 HOME funds, 2011 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 HUD as follows: AFFORDABLE HOUSING FY 11 HOME Grant $449,446 FORT COLLINS HOUSING AUTHORITY – SUPPORTIVE HOUSING DEVELOPMENT FY 11 HOME Program Income $39,107 FORT COLLINS HOUSING AUTHORITY – SUPPORTIVE HOUSING DEVELOPMENT 2011 Affordable Housing Fund $25,000 CITY OF FORT COLLINS – ANALYSIS OF IMPEDIMENTS TO FAIR HOUSING CHOICE $82,500 FORT COLLINS HABITAT FOR HUMANITY – RIGDEN COTTAGES EAST, LAND ACQUISITION $97,524 FORT COLLINS HOUSING AUTHORITY – SUPPORTIVE HOUSING DEVELOPMENT $120,000 LOVELAND HOUSING AUTHORITY – LARIMER HOME IMPROVEMENT PROGRAM Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 15th day of November A.D. 2011. Mayor ATTEST: City Clerk The initial amount of funding requests received by the City was $1,327,500. However, a $500,000 proposal for the second phase of Caribou Apartments was withdrawn by the applicant making the final total of funding requests $827,500. The Commission has recommended $813,577 be allocated. The following table summarizes the utilization of funds from all sources.