HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/19/2019 - FIRST READING OF ORDINANCE NO. 140, 2019, APPROPRIAgenda Item 5
Item # 5 Page 1
AGENDA ITEM SUMMARY November 19, 2019
City Council
STAFF
Sue Beck-Ferkiss, Social Policy and Housing Program Manager
Ingrid Decker, Legal
SUBJECT
First Reading of Ordinance No. 140, 2019, Appropriating Prior Year Reserves in Various City Funds to
Reimburse Capital Expansion and Utility fee Funds and Housing Catalyst for Fees Waived for the Mason
Place Affordable Housing Project.
EXECUTIVE SUMMARY
The purpose of this item is to appropriate funds from the Affordable Housing Capital Fund in the Community
Capital Improvement Program and General Fund reserves to reimburse certain City Departments and Housing
Catalyst for fees that were waived for the Mason Place affordable housing project.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
City Council approved percentage-based Affordable Housing fee waivers for the Mason Place permanent
supportive housing project being developed by Housing Catalyst on First Reading on July 16, 2019 and on
Second Reading on August 20, 2019. This development will offer 60 units targeted to residents making no
more than 30% area median income. The 2019 income limits published by the U. S. Department of Housing
and Urban Development for 30% of the Fort Collins AMI is $18,350 for a household of 1 and $20,950 for a
household of 2. The units at Mason Place will be primarily one-bedroom units with a few two-bedroom units.
Households at this income level are some of the City’s most vulnerable residents. Most of the residents will be
escaping homelessness and have disabilities. This development will be located at 3750 South Mason Street,
the site of the former Midtown Arts Theatre. See attachment 1 for map of location.
In addition to fee waivers, Mason Place received more than $1.1M of HOME and Community Development
Block Grant funding from the City’s Competitive Process and almost $900,000 in direct capital assistance from
the Affordable Housing Capital Fund from the Community Capital Improvement program. Here is a summary of
the City’s investment in this project:
Project Total City
Investment
Total Development
costs
% City
Support
Total Waiver
Amount
Waiver per
qualifying unit
Mason Place (60:60) $2,326,081 $18.7 M 12% $326,081 $5,435
The percentage of units qualifying for the waiver, in this case 100%, was approved by Council before the fee
amounts were finalized. Council approved fee waivers not to exceed $330,000. The amounts are now final,
and the amount of the total fee waiver is $326,081.
Agenda Item 5
Item # 5 Page 2
Details of foregone revenue due to fee waivers:
Fee Amount
Building Permit Fees $31,977
Demo Permit Fees $50
Total foregone revenue $32,027
Details of fees received to be refunded to Housing Catalyst:
Fee Amount
Development Review Fees $5,000
Major Amendment Fees $3,206
Mailing Fees $204
Sign Posting Fees $50
Plan Check Fees $15,397
Total refund to developers $23,857
It is the City’s practice to reimburse the fee accounts for capital expansion and utility fees that are waived. For
Mason Place, a total of $270,197 is needed to reimburse capital expansion and utility fee funds. A breakdown
of that amount follows:
Fee Amount
Fire Capital Expansion $13,695
General Government Capital Expansion $4,271
Parkland: Community $139,560
Parkland Neighborhood $98,820
Police Capital Expansion $7,698
Sewer Development Review Fee $2,580
Stormwater Development Review Fee $993
Water Development Review Fee $2,580
Total reimbursement amount to departments $270,197
Historically, the City has used unrestricted funds to reimburse the appropriate fee funds for affordable housing
fee waivers. Traditionally the reimbursement of capital expansion fees has come from General Fund reserves.
Funds from the Affordable Housing Capital Fund (AHCF) approved by the voters as part of the City Capital
Improvements Program have also been used to partially match the general fund reserves to reimburse waived
fees. This fund will accumulate $4 million over ten years. While most of the current balance in the AHCF is
already committed to this project, $100,000 was withheld for the purpose of matching general fund reserves for
fee waiver reimbursements. The Council Finance Committee recommended that $100,000 be used from the
AHCF for this reimbursement and that the balance be paid from General Fund reserves.
CITY FINANCIAL IMPACTS
The total fee waiver amount is $326,081. Of that amount, $32,027 is foregone revenue. The remaining
$294,054 is comprised of $23,857 to be refunded to Housing Catalyst and $270,197 to be reimbursed to
departments as detailed above. The $294,054 will be funded through an existing $100,000 appropriation in
the AHCF within CCIP, $3,500 will come from an appropriation of reserves in the Transportation Fund and the
remaining $190,554 will come from an appropriation of reserves in the General Fund.
BOARD / COMMISSION RECOMMENDATION
At its June 6, 2019 meeting, the Affordable Housing Board supported granting the original waiver request.
(Attachment 2)
Agenda Item 5
Item # 5 Page 3
At its June 17, 2019 meeting the Council Finance Committee supported granting the original waiver request.
(Attachment 3)
ATTACHMENTS
1. Location Map (PDF)
2. Affordable Housing Board Minutes, June 6, 2019 (PDF)
3. Council Finance Committee Minutes, June 17, 2019 (PDF)
ATTACHMENT 1
AFFORDABLE HOUSING BOARD
REGULAR MEETING
6/6/2019 – MINUTES Page 2
B. Consider Fee Waiver Request for Mason Place, Permanent Supportive Housing—Sue,
Social Sustainability Department
Request from Housing Catalyst for the Mason Place waiver. There wasn’t a fee worksheet
included because we have been meeting with Housing Catalyst and Planning,
Development, and Transportation (PDT) to work through the fees. There are 21 waivable
fees; the rest are not waivable. We’ve created a process that gives the developer flexibility
in when they request the waiver. The backfill amount is also moving around. In this case,
the overall fees for the project will be about $650k; the estimate for the waivable portion is
$325k with about 80% of that requiring backfill.
Comments/Q&A:
• Rachel: What is backfill?
o Sue: In Fort Collins, because of the TABOR (Taxpayer Bill of Rights)
amendment, our attorneys are concerned about absorbing funds without
reimbursement, especially of capital expansion fees. We tell developers they
don’t have to pay, and we typically pull from general fund reserves to pay those
fees.
• Diane: What is the total cost of the development?
o Sue: $18.7 million
• Sue: I would like to ask the board if you’d like to make a recommendation about this
request.
Diane made a motion to support the fee waiver request for Mason Place.
Catherine seconded. Approved 5-0-1
ATTACHMENT 2
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Meeting Minutes
06/17/19
10 am - noon
CIC Room - City Hall
Council Attendees: Mayor Wade Troxell, Ross Cunniff, Ken Summers
Staff: Darin Atteberry, Kelly DiMartino, Mike Beckstead, Travis Storin, John Voss, Jackie Thiel,
Kevin Gertig, Lance Smith, Don Klingler, Noelle Currell, Sue Beck-Ferkiss, Kristin
Fritz,John Duval, Tyler Marr, Jo Cech, Katie Ricketts, Zach Mozer, Carolyn Koontz, Bob
Adams, Marc Rademacher
Others: Kevin Jones, Chamber of Commerce
______________________________________________________________________________
Meeting called to order at 10:09 am
Approval of Minutes from the May 20, 2019 Council Finance Committee Meeting. Ken Summers moved for approval
of the minutes as presented. Mayor Troxell seconded the motion. Minutes were approved unanimously.
A. Mason Place Affordable Housing Fee Waivers
Noelle Currell, Manager, FP&A
Sue Beck-Ferkiss, Social Policy and Housing Programs Manager
SUBJECT FOR DISCUSSION
Affordable Housing Fee Waiver Request for Mason Place, a permanent supportive housing community.
EXECUTIVE SUMMARY
Housing Catalyst (HC), formerly known as the Fort Collins Housing Authority, has requested that certain
development and capital improvement expansion fees be waived for all 60 qualifying units at Mason Place. In
March 2013, City Council limited the types of projects for which fee waivers may be requested and made these
waivers discretionary. Eligible projects are those constructed for homeless or disabled persons, or for
households whose income falls at or below 30% of the area median income of all City residents. HC is
requesting fee waivers in the approximate amount of $325,000 for the 60 qualifying units at Mason Place.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does the Council Finance Committee (CFC) support granting the fee waiver request?
2. If CFC desires the Capital Expansion Fees to be backfilled, should this funding come from General Fund
Reserves only, or from both General Fund Reserves and the Affordable Housing Capital Fund?
ATTACHMENT 3
2
BACKGROUND/DISCUSSION
HC is seeking the waiver of certain development and capital improvement expansion fees for Mason Place, an
affordable housing project as allowed by City Code and the Land Use Code. Mason Place is currently under
development and will deliver 60 income restricted units, all of which will be targeted to households making no
more than 30% of the area median income (AMI). The request from HC is attached as attachment 1. While HC
will be the ultimate owner of the building, it is being developed by Housing Catalyst LLC and any fee waiver
granted would be to Mason Place LLLP, which is the ownership entity for the tax credit partnership.
Fee Waiver history:
For many years, the City provided affordable housing fee waivers for some building permit fees, development
review fees and some capital expansion fees as an incentive to encourage the development of affordable
housing.
• In March 2013, City Council amended its policies on fee waivers for affordable housing to allow for more
discretion in determining the kinds of housing projects for which City fees should be waived.
• This was after a large waiver was granted.
• By adopting Ordinance No. 37, 2013, City Council limited eligibility of fee waivers to the local housing
authority and limited what types of units would qualify for fee waivers. Only projects that are constructed
for homeless or disabled persons, or for households whose income is no greater than 30% of the area
median income of all City residents qualify.
• Furthermore, waivers were made discretionary by City Council upon a determination that the proposed
waiver will not jeopardize the financial interests of the City or the timely construction of the capital
improvements to be funded by the fees for which a waiver is sought.
• This policy was changed by City Council in 2017 so that any developer providing qualifying units is eligible to
seek discretionary fee waivers.
• Staff has been working on improving the method of processing requests for fee waivers. In addition to
working with the applicant to confirm fee amounts, the process allows for the percentage of eligible units to
be approved even before the fee amounts are finalized. However, if the waiver request is processed when
fee amounts are final, the waiver approval can be for both the percentage of qualifying units and the fee
amount. The process allows the applicant to decide on the timing of the fee waiver request. This only makes
a difference in how the City handles the reimbursement of capital expansion fees and does not influence the
project being constructed.
Current Request:
Mason Place is a 60-unit affordable housing community being constructed at 3750 South Mason Street in Fort
Collins. See attachment 2 for map of location. The developer is HC. The total development of 60 units, will be
dedicated to households making no more than 30% AMI. This will be a permanent supportive housing
development where people can live for an unlimited term and be provided on site supportive services to help
tenants achieve and sustain housing stability. This is a best practice for housing persons experiencing chronic
homelessness, most of whom have disabilities too.
HC is seeking the waiver of certain fees for those 60 qualifying units. The total fees for this $18.7 million
development project are estimated to be in excess of $656,000. The request is for 100% of eligible fees, about
$325,000 (currently calculated at $324,714), to be waived. Of that amount, about $264,000 (currently calculated
at $263,244) are for capital expansion fees which the City has traditionally reimbursed. This project is adaptive
reuse and not new construction, so the fees are offset with fees previously collected for this location and are
therefore not as high as a new construction project would be. Because the plans for this development could still
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change slightly, HC has requested that Council approve the percentage to be waived at this time. The fee
amounts are not expected to change significantly, but by approving the percentage, more time is provided to
finalize the fee amounts.
The 2019 income limits published by the U. S. Department of Housing and Urban Development for 30% of the
Fort Collins AMI is $18,350 for a household of 1 and $20,950 for a household of 2. The units at Mason Place will
be primarily one-bedroom units with a few two-bedroom units. Households at this income level are some of the
City’s most vulnerable residents. Most of the residents will be escaping homelessness and have disabilities. All
units at Mason Place are eligible for fee waivers as established by City Code, and the Land Use Code.
The City has established affordable housing production goals in the 2015-2019 Affordable Housing Strategic Plan
(Plan). The need for financial support for these goals to be met is also stated in the Plan. The annual production
goal for the current 5-year plan is 188 units. This project will deliver 60 units which is 32% of the City’s current
annual goal. Since the City does not develop housing, development partners are relied upon to bring this
necessary housing product to the community. This project will increase the inventory of affordable rental units
and is targeting special needs populations - which are two of the strategies listed in the Plan.
It is recommended that any capital expansion fees waived be subject to backfill by the City to reimburse city
departments for fees if this waiver is granted, as has been the City’s custom to date. Traditionally backfill of
capital expansion fees occurred and has come from General Fund reserves. Alternatively, funds for this request
could come from the Affordable Housing Capital Fund that was approved by the voters as part of the City Capital
Improvements Program. This fund will accumulate $4 million over ten years. While most of the current balance
in this fund is already committed to this project, $100,00 was withheld for the purpose of matching general fund
reserves for fee waiver backfill. This project is the first to seek fee waivers this year.
Board and staff support:
• The Affordable Housing Board supports this waiver request. The City’s waiver policy has greatly limited the
types of projects that qualify for waivers. This policy recognizes that households earning no more than 30%
AMI cannot afford market rate housing in our City at this time. The average rent is currently over $1,200 a
month. A one-person household at 30% AMI would need to pay 78% of their income to pay the average
rent. Ideally, renters would never pay more than 30% of their income on housing. Developers need public
subsidy to produce housing that this demographic can afford.
• Staff also supports granting this waiver request.
Next Steps
• This request is ready to be presented to Council after this committee’s review.
DISCUSSION / NEXT STEPS:
$686k is the total
Total waivable fees $325k - we may ask for $330k to make sure we have some flexibility
Through 2018 we appropriated $700K through the CCIP dedicated support
$500K of that is still unspent and that amount will be dedicated to this project.
In 2019 we appropriated $400K from the CCIP will go to this project as well
All total - just over $1M of support from the City for this project
Fee waivers as investment
4
Direct subsidy – retain no more than 25% of any fund for backfill
We are requesting that you approve the waiver of 100% of waivable fees
The estimate today is $325K = Could be a bit of movement $330K is the ask - Affordable Housing Board has
approved this request.
Ken Summers; review the support categories
Total of $1M City support
Fee Waivers = $325k
$900K coming from affordable housing capital fund
Total is $1.2M between two awards
Competitive process – annual competition for CDBG home funds
Darin Atteberry; the most important information is the cumulative ask - not just the one time ask
$1.3 - 1 .5M is the actual total - Council doesn’t remember all of these different pieces from 2017
Ken Summers; CDBG allocations we approved - this request is for fee waiver
Outside of what is available through Housing Catalyst - How does that work? Being ask for fee waiver
Sue Beck-Ferkiss; in 2018 Affordable Housing Funds were committee to Housing Catalyst
CDBG funds were from 2018 as well and have been approved by Council
A lot of projects quality for the competitive process and could quality for the capital
Only projects that target 30% AMI or less are eligible for waivers - lowest wage earner units which don’t spin off
rent income so more $$ are required – more subsidy on the front end. Providing permanent support housing
Kristin Fritz; Housing Catalyst
$876k Committee
$1.1M competitive
Total commitment is almost $2M before before the fee waivers
Mayor Troxell; the project is $18.7M - How is this going to be financed?
Kristin Fritz; this is a competitive tax credit project = awarded tax credits on its first round
City funding commitment was prior to the tax credit commitment
Whether or not we received federal low income tax credit
We received state money from Colorado Division of Housing
Lender – all of the financing is fully awarded – underwriting due diligence is in progress and we are set to close
On September 2nd - working its way through - fully funded – completely penciled out
It is typical with the City funding process – that after an award is made we still need to go obtain the remaining
pieces and then go through a contracting process
Mayor Troxell; Will the $18.7M will hold?
Kristin Fritz; Yes, that is the number - we are committed to that number and under contract
5
Some of that background info -overall investment - Hard complete wrap around services
0-30% AMI - tough crowd
Ross Cunniff; I sit on the housing Catalyst Board - I do support taking the waivable fees out of the General Fund
other than out of the Capital Expansion Fees
Mike Beckstead; for clarification - shared or 100% out of the General Fund
Ross Cunniff; 100% out of the General Fund
Sue Beck-Ferkiss; would it all come from the General Fund reserve or should we use the money ($100K) we set
aside?
Ken Summers; use the money we set aside first then the remainder from the General Fund
Mike Beckstead; I put the fees into 3 categories
1) Utility TIFS not being waived
2) Development Fees - waiver is requested – not backfilled
3) Capital Expansion Fees - $264K which would get backfilled
Ross Cunniff; trying to make the Development Review Fees like a dedicated fund – so that is the only thing they
are used for is development review – I would prefer it be portrayed as coming from General Fund reserves
ACTION ITEM:
In the future, I would like to find a structured way we can call these pre application proposed rebates - other
than a waiver - with Housing Catalyst that could cause some financial stress
Source of funding available for projects that pre quality – pre development -Contingent on it actually being built
Being deliberate about setting aside money for these affordable housing purposes and not making it look like we
are playing some kind of shell game.
Council Finance Committee (Mayor Troxell, Ken Summers and Ross Cunniff) unamiously recommended that this
go forward to the full Council
ACTION ITEM: Darin Atteberry; 10% City participation - to Mike – please work with Jackie and Sue - it would be
good to see where those trends are; trending up? trending down? What have we done in prior projects? A
macro perspective. I agree with what Wade and Ross both said, this is a great project that will help with some
serious needs. The complete stack is always important for Council
Mike Beckstead; We will make sure both the complete stack and trends are included in the Council materials.
Ken Summers; what is rate contribution for residents? Do they pay on a sliding scale?
Sue Beck-Ferkiss; housing choice vouchers that are connected to these units - residents pay 30% of their income
and the government pays the rest up to the fair market standard.
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ORDINANCE NO. 140, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN VARIOUS CITY
FUNDS TO REIMBURSE CAPITAL EXPANSION AND UTILITY
FEE FUNDS AND HOUSING CATALYST FOR FEES WAIVED FOR
THE MASON PLACE AFFORDABLE HOUSING PROJECT
WHEREAS, the Fort Collins Housing Authority, doing business as Housing Catalyst, is
currently developing the Mason Place permanent supportive housing project (the “Project”) in
Fort Collins; and
WHEREAS, on August 20, 2019, the City Council adopted Ordinance No. 096, 2019,
approving the waiver of eligible development review fees, building fees, and capital
improvement expansion fees, in an amount not to exceed $330,000, for the Project; and
WHEREAS, Ordinance No. 096, 2019 also directed the City Manager, once the Project
fees were finalized, to bring forward an ordinance appropriating funds to reimburse the
appropriate funds for the fees waived; and
WHEREAS, historically the City has reimbursed utility funds for utility development
review fees waived, and reimbursed funds for waived capital improvement expansion fees; and
WHEREAS, the final amount of the fees has been calculated and the total amount waived
is $326,081, with $270,197 of that amount being utility fees and capital expansion fees and
$23,857 being fees already paid to be refunded to Housing Catalyst; and
WHEREAS, the City Council desires to appropriate funds to reimburse various Capital
Expansion and Utility Fee funds for waived fees in the following amounts:
Fire Capital Expansion $ 13,695
General Government Capital Expansion 4,271
Parkland: Community 139,560
Parkland: Neighborhood 98,820
Police Capital Expansion 7,698
Sewer Development Review Fee 2,580
Stormwater Development Review Fee 993
Water Development Review Fee 2,580
TOTAL $270,197; and
WHEREAS, the City Council further desires to appropriate funds to refund to Housing
Catalyst the following fees already paid by Housing Catalyst, in the following amounts:
Development Review Fees $ 5,000
Major Amendment Fees 3,206
Mailing Fees 204
-2-
Sign Posting Fees 50
Plan Check Fees 15,397
TOTAL $23,857; and
WHEREAS, building fees in the amount of $32,027 would not be reimbursed; and
WHEREAS, Article V, Section 9, of the City Charter permits the City Council to
appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be
available from reserves accumulated in prior years, notwithstanding that such reserves were not
previously appropriated; and
WHEREAS, this appropriation benefits public health, safety, and the welfare of the
citizens of Fort Collins; and
WHEREAS, the City Manager has recommended the appropriation described herein and
determined that these appropriations are available and previously unappropriated from the
Community Capital Improvement Program Fund, the General Fund and the Transportation Fund,
as applicable, and will not cause the total amount appropriated in the Community Capital
Improvement Fund Fund, the General Fund or the Transportation Fund, as applicable, to exceed
the current estimate of actual and anticipated revenues to be received in these funds during the
fiscal year.
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 for expenditure from reserves in the
Affordable Housing Capital Fund within the Community Capital Improvement Program Fund
the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000) to cover a portion of the
waived fees for the Mason Place Affordable Housing Project.
Section 3. That there is hereby appropriated for expenditure from reserves in the
General Fund the sum of ONE HUNDRED NINETY THOUSAND FIVE HUNDRED FIFTY-
FOUR DOLLARS ($190,554) to cover a portion of the waived fees for the Mason Place
Affordable Housing Project.
Section 4. That there is hereby appropriated for expenditure from reserves in the
Transportation Fund the sum of THREE THOUSAND FIVE HUNDRED DOLLARS ($3,500)
to cover a portion of the waived fees for the Mason Place Affordable Housing Project.
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Introduced, considered favorably on first reading, and ordered published this 19th day of
November, A.D. 2019, and to be presented for final passage on the 3rd day of December, A.D.
2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 3rd day of December, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk