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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/16/2017 - FIRST READING OF ORDINANCE NO. 069, 2017, WAIVINGAgenda Item 7 Item # 7 Page 1 AGENDA ITEM SUMMARY May 16, 2017 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist SUBJECT First Reading of Ordinance No. 069, 2017, Waiving Certain Fees for Housing Catalyst's Village on Redwood Affordable Housing Project and Appropriating Prior Year Reserves in Various City Funds to Refund Specified Fees. EXECUTIVE SUMMARY The purpose of this item is to ask City Council to determine whether development fee waivers in the amount of $100,708 will be provided to Housing Catalyst for their Village on Redwood affordable housing project pursuant to City Code, the Land Use Code and an Intergovernmental Agreement between the City of Fort Collins and the Fort Collins Housing Authority dated July 3, 2013 and, if granted, to make an appropriation to refund this amount to Housing Catalyst. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION Housing Catalyst (HC), formerly the Fort Collins Housing Authority, is a Fort Collins, mission-driven real estate developer that designs, builds and serves affordable communities in Northern Colorado. HC owns and operates a variety of properties located throughout Fort Collins and serves over 1,700 households in need of affordable housing. HC also manages the affordable housing properties owned by Villages, Ltd. HC is an experienced developer and property manager with a good history of running quality developments in Fort Collins. The purpose of this item is to present HC’s waiver request for $100,708 of certain permissible impact fees for the portion of the Village on Redwood development that targets households earning no more than 30% area median income. (AMI) HC is seeking the waiver of certain development and capital improvement expansion fees for the Village on Redwood affordable housing project as allowed by City Code, the Land Use Code, and an Intergovernmental Agreement between the City of Fort Collins and the Fort Collins Housing Authority dated July 3, 2013. The Village on Redwood is a 72 unit affordable housing community being constructed at 1331 Redwood Street in Fort Collins (Attachment 1). Of the 72 units the Village on Redwood will deliver, 13 (or 18% of the total development) will be dedicated to households making no more than 30% of the area median income (AMI). The request from HC is attached (Attachment 2). The total of these fees for the project is $559,489. The request is for 18% of that, $100,708, to be waived. See figure below for breakdown of fees. Agenda Item 7 Item # 7 Page 2 Fee Type Total Fees Collected 18% Rebate Amount Development Review $22,290 $4,012 Building Fees $88,404 $15,913 Capital Improvement Expansion Fees $445,176 $80,132 Utilities - Stormwater Review Fee $3,619 $651 TOTAL $559,489 $100,708 The capital expansion fees are further broken down as follows: Capital Expansion Fees Total Fees Collected 18% Rebate Amount General Government $32,250 $5,805 Police $13,155 $2,368 Fire $26,307 $4,735 Street Oversizing $154,296 $27,773 Community Parkland $100,572 $18,103 Neighborhood Parkland $118,596 $21,347 TOTAL $445,176 $80,132 The 2017 income limits published by the U. S. Department of Housing and Urban Development for 30% of the Fort Collins AMI is $16,150 for a household of 1 and $24,600 for a household of 4. Households at this income level are some of the City’s most vulnerable residents. The 13 units at Redwood fit the definition and are eligible for fee waivers as established by City Code, the Land Use Code, and the Intergovernmental Agreement (Attachment 3). The City has established affordable housing production goals in the 2015-2019 Affordable Housing Strategic Plan. The need for financial support for these goals to be met is also stated in the Plan. The annual production goal for this five year plan is 188 units. This project’s 72 units are 38 % of the City’s goal. Since the City does not develop housing, development partners are relied on to bring this necessary housing product to the community. This project will increase the inventory of affordable rental units which are one of the strategies listed in the Strategic Plan. Under Colorado Statutes and City of Fort Collins ordinances and resolutions dating back to 1988, projects of housing authorities are exempt from taxes and some fees. For many years, the City waived building permit and development review fees and some capital expansion fees for housing authority projects. Historically they had been small amounts. Waiver policy change 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 authority sponsored projects for which City fees should be waived. This was after a large waiver was granted to a project that was being developed primarily by CARE Housing with the housing authority having only a very small interest. By adopting Ordinance No. 37, 2013, City Council limited the types of projects for which HC could ask for waivers. These projects are constructed for:  persons experiencing homelessness  disabled persons,  or for households whose income is no greater than 30% of the area median income (AMI) of all City residents. Agenda Item 7 Item # 7 Page 3 Furthermore, these waivers will be granted at the discretion of 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 change also limited waiver eligibility to only the housing authority. The City recently created an Internal Housing Affordability Task Force which plans to reexamine the City’s waiver policy as well as other housing related policies. The purpose of the task force is to convene a group of representatives from diverse City departments that affect housing affordability, to brainstorm ideas that might help incentivize or remove barriers to the development of a wide range of housing, to vet ideas internally in an effort to speak for the City with a unified voice, and to analyze external information and perspectives about the City’s housing system. Funding for this $18.3 million project is a combination of city and state grants, Low Income Housing Tax Credit financing, owner equity and conventional financing. Current pro formas rely upon these fee waivers to complete the project’s funding. 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 in the City is currently over $1,200 a month. A one person household at 30% AMI would need to pay 89% of their income to pay the average rent. A four person household would need to pay 59% of their income to afford the average market rate. 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 supports granting this waiver request. CITY FINANCIAL IMPACTS Because Housing Catalyst has already paid the fees to the City, a rebate will need to be issued. The total rebate amount is $100,708. The development review fees and building permit fees will be paid with $20,577 from prior year General Fund Reserves. The following amounts will come from the Capital Improvement Expansion Funds:  General Government: $5,805  Police: $2,368  Fire: $4,735  Street Oversizing: $27,773  Community Parkland: $18,103  Neighborhood Parkland: $21,347 The Ordinance requires the City Manager to present to City Council later in 2017 a proposal for how much, if any, of the City funds and accounts for the applicable Capital Improvement Expansion Fees waived by this Ordinance should be reimbursed with monies from the City’s General Fund. BOARD / COMMISSION RECOMMENDATION The Affordable Housing Board and the Council Finance Committee support granting this waiver request. (Attachments 4 and 5) PUBLIC OUTREACH While extensive public outreach was done on the issue of waivers for the City’s Housing Affordability Policy Study and the Affordable Housing Strategic Plan, outreach beyond the AHB and the CFC meetings has not been conducted specifically on this request. Agenda Item 7 Item # 7 Page 4 ATTACHMENTS 1. Location Map - 1331 RedwoodSt (PDF) 2. Housing Catayst Fee-Waiver-Request-Redwood (PDF) 3. Intergovernmental Agreement- City Fee Waiver (PDF) 4. Affordable Housing Board Minutes - April 6, 2017 (PDF) 5. Finance Committe Minutes 042817 partial (PDF) ATTACHMENT 1 March 6, 2017 Sue Beck‐Ferkiss, Social Sustainability Specialist Office of Social Sustainability 22 Laporte Avenue Fort Collins, CO 80521 Re: Village on Redwood Development Fee Waivers Dear: Mrs. Beck‐Ferkiss, On behalf of Housing Catalyst, I am writing this letter to formally request $100,708.06 in certain fee waivers for the above referenced project under the City of Fort Collins City Council Ordinance: No. 037, 2013 and the associated intergovernmental agreement. To assist in this fee waiver request, I have enclosed the following information: 1. Schedule of units that will be at or below 30% of the Fort Collins/Loveland adjusted median income (13 units). 2. Schedule of waived fees. 3. Paid and reimbursement request amounts for development fee waiver values. 4. Village on Redwood Development timeline. Thank you for your time and attention to this request. Please contact me if you require additional information. Sincerely, Julie J. Brewen Executive Director ATTACHMENT 2 Project Overview Village on Redwood is a 72‐unit affordable housing community being constructed at 1331 Redwood Street on Fort Collins. Of the 72 total units, 13 units (18% of the total development) will be dedicated to households at the 0‐ 30% Area Median Income level. Target Population Number of Units Area Median Income * 13 units 0‐30% AMI 10 units 31‐40% AMI 19 units 41‐50% AMI 30 units 51‐60% AMI 72 units total  Eligible for Fee Waivers ATTACHMENT 2 Waived Fees Schedule 1. Development Review Fees  Project Development Plan w/ Subdivision Plat  Planning – Sign Posting  Planning – APO Label Fee  Final Development Plan w/ Subdivision Plat  Transportation Development Review ‐ Residential  Transportation Development Review – Commercial  Transportation Development Review – Project Development Plan  Transportation Development Review – Area to be developed  Transportation Development Review – ROW Vacation  Transportation Development Review – Final Plan  Planning – Minor Amendment  Transportation Development Review – Minor Amendment 2. Building Permit Fees  Building Permit Fee w/ Subs  Building Plan Check Fee 3. Capital Improvement Expansion Fees  Residential Capital Improvement Expansion (Fire)  Commercial Capital Improvement Expansion (Fire)  Residential Capital Improvement Expansion (Government)  Commercial Capital Improvement Expansion (Government)  Residential Capital Improvement Expansion (Police)  Commercial Capital Improvement Expansion (Police)  Residential Street Oversizing Fee  Commercial Street Oversizing Fee  Residential Capital Improvement Expansion (Community Parkland)  Residential Capital Improvement Expansion (Neighborhood Parkland) ATTACHMENT 2 Eligible City Fees and Waiver Schedule Fee Amount Reimbursement Request - Waiver (18%) Paid by FCHA Development Review Fees $22,290.31 $4,012.26 $18,278.05 Building Fees $88,403.93 $15,912.71 $72,491.22 Capital Impact Expansion Fees $445,176.00 $80,131.68 $365,044.32 Storm Drainage Dev. Review Fees $3,619 $651.42 $2,967.58 TOTAL $559,489.24 $100,708.06 $457,781.18 ATTACHMENT 2 Village on Redwood Development Timeline Low Income Housing Tax Credit (LIHTC) Award ‐ May 2015 Project Development Plan Approval – October 2015 Building Permit submitted to City of Fort Collins – November 2015 LIHTC Partnership Closing – February 2016 Construction Start – March 2016 Fee Waiver Request – March 2017 Construction Complete – May 2017 Lease‐up Complete – February 2018 Construction – Permanent Loan Conversion – February 2018 ATTACHMENT 2 ATTACHMENT 3 ATTACHMENT 3 ATTACHMENT 3 ATTACHMENT 3 5 | P a g e o Sue: Could do another memo on locking in rate at submittal, with a specific time frame to get the project complete, as a benefit to all housing affordability. ACTION ITEMS: Board will draft a memo to staff. AGENDA ITEM 2: Fee Waiver Request from Housing Catalyst Letter of request provided in board packet. Last fee waiver request was for Redtail Ponds. Housing Catalyst is only organization eligible for fee waivers at this time, and only for units serving those at 30% AMI and below. Requesting reimbursement for fees paid on 13 units, ~$100K. Disaster relief funds had timeliness deadlines, which is why fees were paid in advance. Reimbursement is at Council’s discretion—will be approved unless could jeopardize finances of the City. Therefore Sue will take to Council Finance before going to Council. Eloise moved and Jeff seconded a motion to recommend approval of the Housing Catalyst waiver request for qualifying units on Village on Redwood. Motion passed unanimously, 5-0-0. AGENDA ITEM 3: Other Business Council Comments • Land Use Code update on consent. • Community Based Sheltering Services—acknowledged that community based, in nonprofits and churches, up to 15 people—will not be regulated. • Density Bonus—Currently if development is bigger than 10 acres, must ask for variance or modification for density bonus over 10 acres. Added language—if providing units at lower AMI level density bonus increases automatically, incrementally, up to 25 acres. • Competitive Process—May 16—Can thank Council for awarding dollars to affordable housing. • Safe Place to Rest Report in June. • Board agreed no Council Comments necessary this month. Will consider above topics for May. Listening Session • Bring Affordable Housing Strategic Plan, pipeline, completed units, etc. • Develop ½ sheet informational handout. • Need a one-pager that ties AMI or hourly wage to occupation. Confusion about “affordable housing”—most don’t understand that it is for people who are working. Want to know who their neighbors will be. Put in context of people they know and work with every day. o Redwood has many one-two bedrooms—typical renter will make $20-30K/year. o Have to make enough to be able to pay rent. Land Bank Briefings • About 100 total people attended 3 briefings. Have had both positive and negative follow up comments/emails. Many people came in to briefings concerned about housing values, misinformation from real estate agents, etc. However, most left feeling process is reasonable and that City is being transparent. ATTACHMENT 4 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 Minutes 04/28/17 2:30 - 4:30 pm CIC Room Council Attendees: Mayor Wade Troxell, Gerry Horak, Ross Cunniff, Bob Overbeck Staff: Mike Beckstead, Jeff Mihelich, Jackie Thiel, Carrie Daggett Sue Beck-Ferkiss, John Duval, Travis Storin, John Voss, Tiana Smith, Lawrence Pollack, Andres Gavaldon, Noelle Currell, Ginny Sawyer, Jackson Brockway, Lance Smith Others: Julie Brewen, CEO of Housing Catalyst, Kevin Jones (Chamber of Commerce), Dale Adamy (Citizen) Meeting called to order at 2:35 p.m. Gerry Horak moved to approve Minutes for the March 20th and March 28th Council Finance Meeting. Ross Cunniff seconded the motion. Minutes were approved unanimously. Agenda Review - walk on item added -Capital Expansion Fees -( with or without Twin Silos) Broadband update moved to item #3 on the agenda A. Guest - Housing Catalyst - Tax Credit Review Julie Brewen CEO of Housing Catalyst Duane Hopkins, CFO of Housing Catalyst SUBJECT FOR DISCUSSION Low Income Housing Tax Credit Program Primer and Impact of President Trump’s Tax Reform Proposals EXECUTIVE SUMMARY The Low Income Housing Tax Credit Program, Section 42 of the IRS Code, is the primary financing tool for new affordable housing. A result of the recent national election and possible changes to the corporate tax rate have had an immediate detrimental effect on current and future affordable housing development in Fort Collins. A presentation will explain how the program works and how the investor market has been impacted. $2.34 per capita - 60% of area median income - Village on Horsetooth funding sources – formal LOI pulled after election – created a $4m gap in the debt – equity investors are nervous – assuming a 20-25% corporate tax rate – tax credit dropped significantly – gap between mortgage and tax credits – tv show front line – subsequent NPR stories – see how that show on 5/9 impacts GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED ATTACHMENT 5 2 Discussion may include ways the City of Fort Collins has provided gap financing in the past and needs for this funding going forward. TV Show Frontline to air on May 9th regarding Affordable Housing Gerry Horak; how do you plan to get message out to media ahead of this show? (not reactionary) Makes sense for someone to contact public radio - Gerry mentioned a name (Grace) to get the message out - for them to know before the story comes out – Julie Brewen; they are creating speaking points now for mayors, media, etc. Gerry Horak; How will the Governor’s proposal for affordable housing that is in the proposed budget be used? Julie Brewen; two pieces; 1) The Affordable Housing Trust Fund will go to the Colorado Housing Authority - (approx. $10m) allocated in a competitive process, 2) Marijuana revenue might still happen (approx. $12.3m) would go to the Colorado Division of Housing and be earmarked that for homeless and permanent support housing. Mayor Troxell; in light of CBDG we asked for additional funding within our community Julie Brewen; at 60% of median income the rent is fixed but that amount is not always adequate to cover all operating expenses so we need to decrease that debt Darin Atteberry; the City receives between $ 1.1 and $1.5m of funding which is less than 1% of our General Fund Budget – this amount was much higher in the past - it is very important to convey message to other regional partners Mayor Troxell; I did talk with both senators, Mike Wallace at NLC regarding this - they are looking for broader impacts. In terms of filling the gap Julie Brewen – We did get some addn. CBDG funding and also created some value engineering of approx. $1m for Horsetooth based on what we learned at Red Wood Gerry Horak; can we get a story on KUNC? Jackie Thiel; we will work with Julie on a local communication strategy - also reaching out to the Coloradoan Editorial Board - they have some new members who are very interested in this topic Mayor Troxell; you may want to also work with Lisa White, Colorado Municipal League Darin Atteberry; would like to get Julie Brewen’s perspective - your board had a conversation about CE fees - fair to say that Council is heading in the direction of updating their fees - all of that is difficult now but the deferral only exasperates the problem . The staff’s recommendation to Council is that we move forward on these – the more we defer cost they get more expensive – my expectation is that Council will move forward in the very near term. Julie Brewen; we did not take a formal position as we understand all sides. We have a gap. ATTACHMENT 5 3 B. Housing Catalyst - Fee Waiver Request Sue Beck-Ferkiss, Social Sustainability Specialist SUBJECT FOR DISCUSSION Fee Waiver Request from Housing Catalyst for the Village on Redwood – 72 new units EXECUTIVE SUMMARY The Fort Collins Housing Authority, doing business as Housing Catalyst (HC), has requested that certain development and capital improvement expansion fees be waived for qualifying units at the Village on Redwood. 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 amount of $100,708 for the 13 qualifying units at the Village on Redwood. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does the Council Finance Committee (CFC) support granting the fee waiver request (approximately $100K out of $18M project) for Village on Redwood? 2. If so, does the CFC support a waiver of fees and backfilling or waiver without a backfill? 3. If CFC desires the CEFs to be backfilled, should this funding come from the General Fund or the Affordable Housing Capital Fund? BACKGROUND/DISCUSSION HC is seeking the waiver of certain development and capital improvement expansion fees for the Village on Redwood affordable housing project as allowed by City Code, the Land Use Code, and an Intergovernmental Agreement between the City of Fort Collins and the Fort Collins Housing Authority dated July 3, 2013. The Village on Redwood will deliver 72 units, of which 13 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. Under Colorado Statutes and City of Fort Collins ordinances and resolutions dating back to 1988, projects of housing authorities are exempt from taxes and some fees. For many years, the City waived building permit and development review fees and some capital expansion fees for housing authority projects. Historically they had been small amounts. 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 authority sponsored projects for which City fees should be waived. This was after a large waiver was granted to a project that was being developed primarily by CARE Housing with the housing authority having only a very small interest. By adopting Ordinance No. 37, 2013, City Council limited the types of projects for which HC could ask for waivers. These are 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. Furthermore, these waivers will be granted at the discretion of 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 change also limited waiver eligibility to only the housing authority. The City created an Internal Housing Affordability Task Force this year which plans to look the City’s waiver policy as well as other housing related ATTACHMENT 5 4 policies. The purpose of the task force is to convene a group of representatives from diverse City departments that affect housing affordability, to brainstorm ideas that might help incentivize or remove barriers to the development of a wide range of housing, to vet ideas internally in an effort to speak for the City with a unified voice, and to analyze external information and perspectives about the City’s housing system. The Village on Redwood is a 72 unit affordable housing community being constructed at 1331 Redwood Street in Fort Collins. See attachment 2 for map of location. Of the 72 total units, 13 units, equaling 18% of the total development, will be dedicated to households making no more than 30% AMI. HC is seeking the waiver of certain fees for those 13 qualifying units. The total of these fees for the project is $559,489. The request is for 18% of that, $100,708, to be waived. The 2017 income limits published by the U. S. Department of Housing and Urban Development for 30% of the Fort Collins AMI is $16,150 for a household of 1 and $24,600 for a household of 4. Households at this income level are some of the City’s most vulnerable residents. These units fit the definition and are eligible for fee waivers as established by City Code, the Land Use Code, and the Intergovernmental Agreement (attachment 3). Funding for this $18.3 million project is a combination of city and state grants, Low Income Housing Tax Credit financing, owner equity and conventional financing. Current pro formas rely upon these fee waivers to complete the project’s funding. 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 this 5 year plan is 188 units. This project will deliver 72 units which is 38 % of the City’s goal. Since the City does not develop housing, development partners are relied on to bring this necessary housing product to the community. This project will increase the inventory of affordable rental units which is one of the strategies listed in the Plan. It is estimated that approximately $80,132 would be subject to backfill by the City to reimburse city departments for capital impact expansion fees if this waiver is granted, as has been the City’s custom to date. While backfill is now considered discretionary, traditionally backfill of waived 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. Of that amount, $200,000 was scheduled for 2016 and $250,000 for 2017. 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 89% of their income to pay the average rent. A four person household would need to pay 59% of their income to afford the average market rate. 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. New fund available - Affordable Housing Capital Fund - potential source for backfill if fees waived. Currently have $200k in fund which will grow over time to a total of $4m over 10 years. Affordable Housing Board and Social Sustainability support the request for waiver. Request for $100K with potentially $80K potentially being backfilled ATTACHMENT 5 5 Ross Cunniff; I think it makes sense to waive and backfill. I am supportive of the waiver and then backfill either entirely from the capital fund or from a mix of capital fund and general fund. Example of why we would want to have a flexible capital fund. Gerry Horak; deal with the waiver request first - then decide how we want to use the other fund and not tie it to this request. The level of fee waivers hasn’t really been that much money over time. Maybe we backfill when we have a year with a lot of sales tax. Mike Beckstead; based on the ballot language - this is an alternative Gerry Horak; what is the policy - how do we want to use it? The new Council should set up the rules for the use of the funds - this should be scheduled into the Council work plan 6 month calendar. Darin Atteberry; Council has this option - stay true to the language - in the early days we were talking about the permanent supportive housing for the chronically homeless as well – this language became more flexible. Agree with Gerry - let’s have a conversation about the bigger purpose of this. I am hearing go ahead and move forward with the waiver then later talk about how to fund. Jackie Thiel; as part of that visioning process we could focus what the different approaches would get us. Gerry Horak; give some assurance into the community - we could focus looking at low income and special populations and once fee waivers reach a certain level we quit giving them if we don’t backfill. Mike Beckstead; 2014 was the last time we waived fees of $224k. This is the 3rd request we have brought forward in the last 7 years. Mayor Troxell; I agree with the direction and the visioning Next Steps; Council Finance recommendation is for this request to be presented to Council l for their consideration. We will work on a strategy and policy on how to deal with the funding and how we navigate the backfill requirements. ATTACHMENT 5 -1- ORDINANCE NO. 069, 2017 OF THE COUNCIL OF THE CITY OF FORT COLLINS WAIVING CERTAIN FEES FOR HOUSING CATALYST’S VILLAGE ON REDWOOD AFFORDABLE HOUSING PROJECT AND APPROPRIATING PRIOR YEAR RESERVES IN VARIOUS CITY FUNDS TO REFUND SPECIFIED FEES WHEREAS, Housing Catalyst (“HC”), formerly the Fort Collins Housing Authority, was formed by the City Council in 1970 pursuant to the authority contained in Section 29-4-101, et seq. of the Colorado Revised Statutes, for the purpose of providing affordable, safe and sanitary housing in the City that is within the means of families of low or moderate income; and WHEREAS, by adoption of Ordinance No. 065, 1999, the City Council exempted from the imposition of the City’s capital improvement expansion fees the land development projects of housing authorities formed pursuant to the provisions of Section 29-4-101, et seq., and specified various other City fees from which such projects are also to be exempted; and WHEREAS, the financial impact of such fee waivers on the City can be substantial, depending upon the size of the project that is exempted, and whether the lost fee revenues need to be replaced by the City; and WHEREAS, on March 19, 2013, the City Council adopted Ordinance No. 37, 2013 (the “2013 Ordinance”), which made amendments to the City Code and Land Use Code limiting the types of projects for which HC could request fee waivers, and specifying that those waivers are to be granted at the discretion of City Council upon a determination that proposed waivers will not jeopardize the financial interests of the City or the timely construction of capital improvements to be funded by the fees; and WHEREAS, the 2013 Ordinance also authorized and directed the Mayor to enter into an intergovernmental agreement between the City and HC documenting HC’s intent to limit future fee waiver applications to affordable housing projects that meet the criteria established by such Ordinance (the “Intergovernmental Agreement”); and WHEREAS, the Intergovernmental Agreement was executed on July 3, 2013; and WHEREAS, the 2013 Ordinance states that the City Council can waive, by ordinance, fees that would otherwise be imposed for an affordable housing project wholly or partially owned by a housing authority only if the City Council determines that: (1) the proposed project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development (HUD), or households with an annual income that does not exceed 30% of the area median income (AMI) for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by HUD; and (2) 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; and WHEREAS, HC is seeking the waiver of certain development and capital improvement expansion fees it previously paid for the Village on Redwood, a 72-unit affordable housing -2- community being constructed at 1331 Redwood Street in Fort Collins (the “Project”); and WHEREAS, the City has established affordable housing production goals in the 2015- 2019 Affordable Housing Strategic Plan (Plan) with an annual production goal for this five-year plan of 188 units; and WHEREAS, the Project will deliver 72 units, 38 % of the City’s goal; and WHEREAS, 13 of the Project units (or 18% of the total development) will be dedicated to households making no more than 30% of AMI; and WHEREAS, HC is therefore requesting waivers equal to 18% of the total fees for the Project based on the number of units eligible for such fee waivers; and WHEREAS, the Project is partially owned by HC, as HC is the sole member of a limited liability company that has a .009% ownership interest in a limited liability, limited partnership that owns the Project; and WHEREAS, the Project fits the definition of a project eligible for fee waivers under the City Code and Land Use Code as amended by the 2013 Ordinance, and the Intergovernmental Agreement; and WHEREAS, because the fees were already paid and any fees waived will have to be refunded to HC, funds to cover the waived fees must be appropriated by the City Council; and WHEREAS, City Finance staff has determined that waiver of these fees 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 the waiver is sought; and WHEREAS, if City Council grants the fee waivers, staff is requesting the appropriation of $100,708 from various fund reserves to cover the fees waived; and WHEREAS, included in the $100,708 total amount are appropriations from the following funds: General Fund $20,577 Capital Expansion Fund General Gov't. $5,805 Police $2,368 Fire $4,735 Community Parkland $18,103 Total Capital Expansion Fund $31,011 Neighborhood Parkland Fund $21,347 Street Oversizing Fund $27,773 Total Request $100,708 -3- 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, City staff have determined that the appropriations as described herein are available and previously unappropriated in the various funds. 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 the City Council hereby finds that 18% of the Project is intended to house households with an annual income that does not exceed 30% of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by HUD. Section 3. That the City Council further finds that the fee waiver requested by HC 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. Section 4. That the City Council hereby approves the waiver of $100,708 in fees that were previously paid to the City upon the issuance of building permits for the Project, consisting of: Development Review Fees $ 4,012 Building Fees 15,913 Capital Improvement Expansion Fees 80,132 Storm Drainage Development Review Fees 651 Total $ 100,708 Section 5. That there is hereby appropriated for expenditure from reserves in the General Fund the sum of TWENTY THOUSAND FIVE HUNDRED SEVENTY-SEVEN DOLLARS ($20,577) to cover the waived Development Fees for the Village on Redwood Affordable Housing Project. Section 6. That there is hereby appropriated for expenditure from reserves in the Capital Expansion Fund the sum of THIRTY-ONE THOUSAND ELEVEN DOLLARS ($31,011) to cover the waived General Government, Police, Fire and Community Parkland Capital Improvement Expansion Fees for the Village on Redwood Affordable Housing Project with the intent of this appropriation being to supersede any provision to the contrary in City Code Chapter 7.5. -4- Section 7. That there is hereby appropriated for expenditure from reserves in the Neighborhood Parkland Fund the sum of TWENTY-ONE THOUSAND THREE HUNDRED FORTY-SEVEN DOLLARS ($21,347) to cover the waived Neighborhood Parkland Capital Expansion Improvement Fees for the Village on Redwood Affordable Housing Project with the intent of this appropriation being to supersede any provision to the contrary in City Code Chapter 7.5. Section 8. That there is hereby appropriated for expenditure from reserves in the Street Oversizing Fund the sum of TWENTY-SEVEN THOUSAND SEVEN HUNDRED SEVENTY-THREE DOLLARS ($27,773) to cover the waived Street Oversizing Capital Expansion Improvement Fees for the Village on Redwood Affordable Housing Project with the intent of this appropriation being to supersede any provision to the contrary in City Code Chapter 7.5. Section 9. That the City Manager is hereby directed to present to City Council later in 2017 a proposal for how much, if any, of the City funds and accounts for the applicable Capital Improvement Expansion Fees waived by this Ordinance should be reimbursed with monies from the City’s General Fund. Introduced, considered favorably on first reading, and ordered published this 16th day of May, A.D. 2017, and to be presented for final passage on the 6th day of June, A.D. 2017. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 6th day of June, A.D. 2017. _________________________________ Mayor ATTEST: _____________________________ City Clerk