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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 09/07/2004 - OPTIONS FOR THE CITYS MATCH TO FUND A TENANT BASED ITEM NUMBER : 28 AGENDA ITEM SUMMARY DATE : September 7 , 2004 FORT COLLINS CITY COUNCIL STAFF : Diane Jones SUBJECT Options for the City ' s Match to Fund a Tenant Based, Pilot Rental Assistance Program. (Options 11 2 , and 3 ) RECOMMENDATION Staff developed three proposals for consideration by Council, but recommends using existing Affordable Housing appropriations (Option 1 ) . There is no need for an appropriation ordinance if City Council accepts the staff recommendation. FINANCIAL IMPACT The City will use $ 169,651 of existing funds to provide a local cash match for a two-year Tenant Based, Pilot Rental Assistance Program. There are no ongoing expenses . EXECUTIVE SUMMARY On July 6, Council approved the use of monies in the Affordable Housing Trust fund - $ 169,651 over a two-year period. Subsequently, on July 20, 2004, Council directed that this item. be reconsidered. The Colorado Division of Housing ("DOH") approached the City and the Fort Collins Housing Authority ("FCHA") regarding a Tenant Based, Pilot Rental Assistance Program ("Program") for a two-year pilot period. DOH, with the lead of a new director, is focusing on responding quickly to changing local market conditions for affordable housing. Consequently, DOH identified three communities with unique needs : Colorado Springs, Denver Metro area, Fort Collins/Loveland. The identified unique needs include double digit rental market vacancy rates, financially challenged low-income affordable housing projects, demand exceeding capacity in homeless shelters, and large waiting lists for deep subsidy programs like Section 8 vouchers . The State Housing Board has committed $2 . 8 million of DOH money to these three communities ; Fort Collins/Loveland is to receive $465 ,000 . The funds are for a two-year, stop-gap, rental assistance program that would target between 35 and 70 families earning 0-30% of Area Median Income, working families in shelters, homeless individuals and families , those on Section 8 waiting lists, and other local preferences to be defined. The funding will provide rental assistance, security deposit assistance, case management for self-sufficiency and project administration. September 7 , 2004 -2 - Item No . 28 The economy has created a great burden on extremely low-income families. Staff research shows that Housing and Urban Development ("HUD") economists do not foresee the market changing until mid-2006 . The Program' s expected lifetime is two years and participants will be required to sign contracts indicating their understanding that the assistance will not continue beyond that time . Participants will also be required to participate in goal setting and intensive case management in order to help them become more self-sufficient during that time . As a family becomes more self- sufficient and its income increases, the amount of subsidy will decrease, thus freeing up subsidy for other families . The FCHA negotiated the Fort Collins community local cash contribution with DOH to be $ 169,651 which can be dispersed semi-annually beginning no later than September 2004 . Each of the semi- annual payments would be $42 ,412 . 75 , for a total of $ 169,651 over the two-year period. The FCHA will be the administrative agent for this Program and the funding will be dispersed to FCHA. City Council approved Resolution 2004-045 in March 2004, and directed the City Manager to identify a source for funding the cash portion of the local contribution that will be required by the DOH from the City. There are three options to fund the required local cash contribution OPTIONS . 1 . Affordable Housing Trust Attached (Attachment A) is a cash flow schedule for affordable housing that includes the withdrawal of monies to fund the DOH required local cash match over the two-year period. Based on cash flow estimates, there would not be a significant effect on the Affordable Housing Trust balance . No appropriation is required as historically, any year-end balance is reappropriated for use in the following year. 2 . General Fund Undesignated Reserves The estimated General Fund reserves available to fund the required contribution are currently $3 , 564, 834 this includes $2 ,392,279 which is the TABOR overage for 2003 . A Council approved appropriation would be required (First Reading of Ordinance No . 143 , 2004, Appropriating Prior Year Reserves in the General Fund for Matching Funds for a Tenant Based, Pilot Rental Assistance Program) to use the reserves for this purpose . The total amount required for this two- year program ($ 169,651 ) could be appropriated and encumbered. Monies required for each of the four payment periods would be released per the disbursement schedule. 3 . Community Opportunity Account The current balance in the Community Opportunity Account is $279,980 . This money is currently appropriated for use. Each year, $ 190,200 of ongoing funds is added to the account. Any end of year balance is reappropriated for use in the following year and is added to the $ 190,200 . No appropriation is required. RECOMMENDATION . Since the Program is an affordable housing program, it would be appropriate to use Affordable Housing Trust monies for the two-year period. No appropriation is needed because balances in the September 7 , 2004 -3 - Item No . 28 Trust are reappropriated for use in the coming year. The use of Affordable Housing Trust monies for the Program will not have a significant effect on the Trust' s cash flow. If Council selects Option 2, the appropriation ordinance included with this Agenda Item Summary should be adopted. If Council selects Option 1 or Option 3 , no additional action by ordinance is necessary. The Council previously considered this item on July 6, 2004, and voted 3 -2 (Nays : Councilmembers Bertschy and Tharp ; Councilmembers Hamrick and Roy were absent) in favor of Option # 1 . However, at its meeting on July 20, 2004, the Council agreed to reconsider the item, which is why it is being presented again for Council's consideration. ORDINANCE NO, 143 , 2004 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND FOR MATCHING FUNDS FOR A TENANT BASED, PILOT RENTAL ASSISTANCE PROGRAM WHEREAS , the City of Fort Collins is committed to the availability of affordable housing; and WHEREAS, Fort Collins and other Front Range cities are currently facing double-digit rental market vacancy rates, financially challenged low income affordable housing projects, and large waiting lists for heavily subsidized housing programs such as Section 8 vouchers ; and WHEREAS, the State Housing Board of the Colorado Division of Housing ("DOH") has committed $2 . 8 million for a two-year, stop gap, rental assistance program that would target between 25 and 70 families earning 0% to 30% of Area Median Income, working families in shelters, homeless individuals and families, those on Section 8 waiting lists, and others in need of affordable housing; and WHEREAS , the funding will provide rental assistance, security deposit assistance, case management for self-sufficiency and project administration; and WHEREAS , $465 , 000 of the DOH committed funds are targeted for the Fort Collins/Loveland area; and WHEREAS , the grant money from the DOH requires a local cash contribution by the City of Fort Collins in the amount of $ 169,651 ; and WHEREAS , funds are available from the General Fund prior year reserves ; and WHEREAS , Article V, Section 9 , of the Charter of the City of Fort Collins 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. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated for expenditure from General Fund prior year reserves the sum of ONE HUNDRED SIXTY-NINE THOUSAND SIX HUNDRED FIFTY-ONE DOLLARS ($ 169 ,651 ), for matching funds for a two-year tenant based, pilot rental assistance program. Introduced, considered favorably on first reading, and ordered published this 7th day of September, A.D . 2004, and to be presented for final passage on the 21 st day of September, A.D . 2004, Mayor ATTEST : City Clerk Passed and adopted on final reading this 21 st day of September, A.D . 2004 . Mayor ATTEST : City Clerk w 9 a w x 7 x a n w x x x as n -2 w 7 x x n 91 a a w a a s „ m $ x ; 1 g� mI m $ A w �• � � � 8 g#��gg �N 8 gf $ $ 8i nsy gY `ag� a $ x x s x g a € PE E Y °J LL g p q