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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/20/2018 - FIRST READING OF ORDINANCE NO. 033, 2018, APPROPRIAgenda Item 16 Item # 16 Page 1 AGENDA ITEM SUMMARY February 20, 2018 City Council STAFF Beth Sowder, Director of Social Sustainability Wendy Bricher, Financial Coordinator Ingrid Decker, Legal SUBJECT First Reading of Ordinance No. 033, 2018, Appropriating Unanticipated Revenue in the General Fund for a Housing Catalyst PILOT Refund. EXECUTIVE SUMMARY The purpose of this item is to appropriate unanticipated revenue in the General Fund to be remitted to the Fort Collins Housing Authority to fund affordable housing and related activities. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION Public housing authorities are formed by the local governing body under State of Colorado enabling legislation. The Fort Collins Housing Authority (FCHA), now called Housing Catalyst, was formed by the Fort Collins City Council on May 20, 1971. The federal Department of Housing and Urban Development (HUD) requires a public housing authority to submit to HUD for approval a Cooperation Agreement between the housing authority and the local government before the housing authority can submit an application for a public housing project. HUD’s standard form of Cooperation Agreement must be used unless modifications are approved to comply with state or local requirements. The Payment In Lieu of Taxes (PILOT) is covered in Section 3 (a) of the Cooperation Agreement form. On December 16, 1971, to meet this requirement, the City and FCHA entered into a Cooperation Agreement, which provided that FCHA must make annual PILOT payments to the City for the public services and facilities furnished by the City. The PILOT applies only to those properties specifically funded by the HUD “Public Housing” program. The computation of the Payment in Lieu of Taxes is done on form HUD-52267, and is calculated using the total tenant revenue less utility expenses for those units. A copy of the 1971 Cooperation Agreement, as amended in 1986, is included as Attachment 2. In 1986, upon request of FCHA, the City Council adopted Resolution 1986-177 which relieved the Authority of its obligation to make the PILOT payments. Based on that resolution, FCHA did not make PILOT payments from 1987 through 1990. The City also refunded FCHA’s PILOT payments for the years 1984, 1985 and 1986. In 1992, the City Council adopted Resolution 1992-093, repealing Resolution 1986-177 and reinstating the requirement that FCHA pay the annual PILOT payment. The change was made to assure compliance with Department of Housing and Urban Development regulations. Since that time, the City has returned the annual PILOT payments to FCHA at its request. In recent years, Congressional appropriations have been at 80% of Agenda Item 16 Item # 16 Page 2 the HUD operating subsidy for Public Housing units, and the PILOT refund helps make up for Congressional underfunding of operations and services to these units. Staff recommends that the 2016 PILOT payments of $10,153 be appropriated as unanticipated revenue in the General Fund and remitted to Housing Catalyst. As a condition of receiving the funds, the City will require Housing Catalyst to sign a letter agreement obligating it to use the funds for creating or maintaining affordable housing in a manner consistent with HUD guidelines. CITY FINANCIAL IMPACTS The City received unanticipated revenue from the Fort Collins Housing Authority in the amount of $10,153 as 2016 payments for public services and facilities. The revenue was placed in the General Fund. This Ordinance will return the funds to Housing Catalyst to be used for affordable housing and related activities. ATTACHMENTS 1. Housing Catalyst Letter of Request (PDF) 2. 1986 FCHA Cooperation Agreement (PDF) ATTACHMENT 1 ATTACHMENT 2 -1- ORDINANCE NO. 033, 2018 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING UNANTICIPATED REVENUE IN THE GENERAL FUND FOR A HOUSING CATALYST PILOT REFUND WHEREAS, the City has received in 2018 a payment from the Fort Collins Housing Authority (the “Authority”) of $10,153 as a payment in lieu of taxes (“PILOT”) for 2016 for public services and facilities under a Cooperation Agreement dated December 16, 1971, pertaining to a public housing program financed by the federal Department of Housing and Urban Development (HUD); and WHEREAS, since at least 1992, the City has remitted such PILOT payments to the Authority; and WHEREAS, the Authority has requested that the 2016 PILOT payments be appropriated by the City Council for return to the Authority to fund much-needed affordable housing related activities and to attend to the housing needs of low-income Fort Collins residents; and WHEREAS, said payment of $10,153 was not projected as a revenue source in the 2018 City budget; and WHEREAS, the City may spend the PILOT revenues as it deems appropriate in accordance with law, including remitting the funds to the Authority if Council determines that such remittal serves a valid public purpose; and WHEREAS, it is a City Council priority to support programs for providing additional affordable housing in the community; and WHEREAS, the City Council has determined that the provision of affordable housing serves an important public purpose and is an appropriate use of these funds; and WHEREAS, as a condition of receiving these funds, the City will require the Authority to sign a letter agreement obligating the Authority to spend the funds for creating or maintaining affordable housing in a manner consistent with HUD guidelines; and WHEREAS, Article V, Section 9, of the City Charter permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year, provided that the total amount of such supplemental appropriations, in combination with all previous appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, the Financial Officer has determined that the appropriation of the revenue as described herein will not cause the total amount appropriated in the General Fund to exceed the current estimate of actual and anticipated revenues to be received in that fund during any fiscal year. -2- NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That there is hereby appropriated from unanticipated revenue in the General Fund the sum of TEN THOUSAND ONE HUNDRED FIFTY-THREE DOLLARS ($10,153) for expenditure in the General Fund to be remitted to Housing Catalyst as a PILOT Refund to fund affordable housing and related activities for Fort Collins residents consistent with HUD guidelines and the terms of this Ordinance. Introduced, considered favorably on first reading, and ordered published this 20th day of February, A.D. 2018, and to be presented for final passage on the 6th day of March, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 6th day of March, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk