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HomeMy WebLinkAboutMINUTES-02/02/1999-RegularFebruary 2,1999 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Regular Meeting - 6:00 p.m. A regular meeting of the Council of the City of Fort Collins was held on Tuesday, February 2, 1999, at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered by the following Councilmembers: Azari, Bertschy, Byrne, Mason, Smith and Wanner. Councilmembers Absent: Kneeland arrived at 6:10 p.m. Staff Members Present: Fischbach, Krajicek, Roy. Citizen Participation Richard Dunn, Co-chair of the Council for a Northeast Bypass, thanked staff and Council for their work regarding the truck route selection. Matt Leetham, 2936 Bozeman Court, spoke regarding an incident with handicapped parking on private property and asked for assistance in enforcement. Lou Lachman, AARP representative, expressed appreciation for the path between the Senior Center and Rolland Moore Park. David Lipp, 626 Remington, thanked a number of City departments with which he has had positive contacts and noted problems he has had with several other departments. He stated that at the last meeting Councilmember Byrne made an egregious remark regarding victims in response to citizen participation comments that he made at the last Council meeting. He spoke on behalf of Shelly Stephens. David Lauer, 1404 Robertson Street, spoke regarding the need for minority representation on the Citizen Review Board. He spoke regarding Councilmember Byrne's comments regarding victimization at the last Council meeting. Citizen Participation Follow-up Councilmember Smith noted the constraints regarding handicapped parking enforcement on private property. He spoke regarding the importance of transportation connections such as the path between the Senior Center and Rolland Moore Park. He commented concerning the annual Boards and Commissions application process and encouraged people to apply for a broad range of boards. El February 2, 1999 Councilmember Bertschy stated that he would like to see the Citizen Review Board process proceed and spoke regarding the status of the process. Councilmember Mason stated that Council does not condone any type of harassment and spoke regarding the purpose of the Citizen Review Board. Councilmember Byrne apologized for his remarks regarding victimization at the last meeting. He noted that there is a process to make police misconduct complaints and spoke regarding the intent of the Citizen Review Board. Councilmember Kneeland thanked Assistant City Manager Atteberry for his response to a call from Mr. Lipp regarding a woman who receives Section 8 vouchers and is fighting eviction. Councilmember Wanner spoke regarding the Citizen Review Board appointment process and stated that he would not support changing the process at this point. Councilmember Bertschy spoke regarding the expansion of the Citizen Review Board and improvements to the Boards and Commissions recruitment process. City Manager Fischbach spoke regarding enforcement concerning handicapped parking complaints and the City's volunteer "citation" program. Aizenda Review City Manager Fischbach noted that there is a revised Agenda Item Summary for item #15 Resolution 99-14 Authorizing the Mayor to Enter into an Intergovernmental Agreement with Larimer County for the Provision of Social and Human Services for the First Half of 1999. Consent Calendar Consideration and approval of the Council meeting minutes of January 5, 1999, January 19, 1999, and the special meeting minutes of January 12, 1999. Second Reading of Ordinance No. 11, 1999, Appropriating Unanticipated Revenue in the Community Development Block Grant Fund for the Renovation of the Kitchen at the Catholic Charities Northern Mission. Ordinance No. 11, 1999, was unanimously adopted on First Reading on January 19, 1999, and appropriates unanticipated revenue in the Community Development Block Grant fund for the kitchen renovation at the Catholic Charities Northern Mission. !y7 February 2, 1999 9. Second Reading of Ordinance No. 12, 1999, Appropriating Unanticipated Revenue in the General Fund for the Latimer County Multi -Jurisdictional Drug Task Force. On November 17, 1998, Ordinance No. 195, 1998, appropriating $202,101 for Fort Collins Police Services as the administrator of the Multi -jurisdictional Drug Grant, was adopted on second reading. At the time the agenda summary was prepared for Ordinance No. 195, 1998, Fort Collins Police Services neglected to include $22,966 in unanticipated revenue from the Task Force participating agencies. These dollars ($22,966) represent a portion of the $202,101 match that participating agencies must provide. The required City of Fort Col lins match share of $87,608 is already appropriated and available. Ordinance No. 12, 1999, was unanimously adopted on First Reading on January 19, 1999. 10. Second Reading of Ordinance No. 13, 1999, Authorizing the Grant of a Non -Exclusive Utility Easement on the Ute-Snowy Ridge Property to the South Fort Collins Sanitation District. Ordinance No. 13, 1999, which was unanimously adopted on First Reading on January 19, 1999, authorizes the grant of a non-exclusive utility easement on the Ute-Snowy Ridge Property. 11. First Reading of Ordinance No. 15, 1999 Appropriating Prior Year Reserves. Funds were appropriated in 1998 for specific purposes as described below, but not spent. The unspent funds were added to fund reserves at the end of 1998. Appropriations were typically not spent because: • There was not sufficient time to complete bidding in 1998 and thus there was no known vendor or binding contract to encumber the funds for expenditure in 1999. • The project for which the funds were originally appropriated could not be completed during 1998 and, therefore, appropriation of those funds is necessary for completion of the project in 1999. This ordinance reappropriates the 1998 funds for the same uses in 1999 as were originally approved by Council in 1998. 12. First Reading of Ordinance No. 16, 1999, Approving the Terms of the Lease Agreement for 101 Remington Street, Suites F, M, O and O. Adoption of this Ordinance authorizes the terms of the lease for 101 Remington Street and will permit the Larimer County Treasurer's office to remove the Leased Property from the tax rolls in accordance with Section 31-15-(801 and 802) C.R.S. This will result in lower 43 February 2, 1999 lease costs for the City. In order to have this leased space become tax exempt, it is necessary to have the Council approve the terms of the lease by Ordinance. 13. First Reading of Ordinance No. 17, 1999, Vacating a Portion of the Right -of -Way for Stetson Creek Drive as Dedicated on the Stetson Creek P.U.D., First Filing Plat. This ordinance vacates a portion of the street right-of-way for Stetson Creek Drive. The plat of Stetson Creek P.U.D., First Filing dedicated rights -of -way for future street intersections along Stetson Creek Drive. Not all of the street intersections are proposed to be used by the development proposal Stetson Creek, 5th Filing, Townhomes at Stetson Creek and therefore the right-of-way for one of the intersections is no longer necessary and proposed for vacation at this time. As there are currently utilities in place that cross this area, the street right-of- way will be retained as a utility easement. 14. Items Relating to Traffic Signal Safety on US Highway 287 (College Avenue Corridor). A. Resolution 99-13 Authorizing the City Manager to Execute an Intergovernmental Agreement with the Colorado Department of Transportation Allocating $72,600 of Unanticipated Revenue for Safety Improvements to 18 Traffic Signals on the College Avenue Corridor. B. First Reading of Ordinance No. 18, 1999, Appropriating Unanticipated Revenue in the Transportation Services Fund For Safety Improvements to 18 Traffic Signals on the College Avenue Corridor. The City of Fort Collins successfully applied for Federal Highway safety dollars in 1998. Traffic Operations applied for $72,600 that would be used for upgrading eighteen (18) traffic signals on the College Avenue Corridor from Cherry Street to Boardwalk. The upgrades includes new signal heads and faces (8 inch heads to 12 inch heads) to improve visibility. Backplates on the signal heads that eliminate background light are also included in the project. The improving of visibility will reduce accidents along the corridor. 15. Resolution 99-14 Authorizing the Mayor to Enter into an Intergovernmental Agreement with Latimer County for the Provision of Social and Human Services for the First Half of 1999. This Resolution authorizes the Mayor to enter into an Intergovernmental Agreement with Latimer County for the purpose of providing social and human services to the City of Fort Collins for the first half of 1999. The Resolution also allocates one-half of the funds from the 1999 budget for these purposes. Since 1981, the City has contracted with Larimer County to allocate and administer the distribution of human services funds via the Human Resource Grant Program administered by the County. Due to changes in the process of February 2, 1999 administering these grants, the funding allocations will be made each six months, rather than on an annual basis, as in the past. 16. Routine Deeds and Easements. A. Deed of Dedication for Easement from Symbios, Inc., for a utility easement located at the northwest corner of Harmony Road and County Road No. 9. Monetary consideration: $10. B. Deed of Dedication for Right -of -Way from the Archdiocese of Denver, for a Right - of -Way Dedication on Seton Street, located east of South Lemay Avenue and north of Southridge Greens Boulevard. Monetary consideration: $10. C. Deed of Dedication for Easement from Rose Development Group, Ltd, (Kenneth Scavo), for a sanitary sewer easement located north of West Stuart Street and east of South Overland Trail. Monetary consideration: $10. D. Deed of Dedication for Easement from Willing Acres Company, for grading and slope easements located at South Shields Street and north of Trilby Road, as well as Trilby Road and east of Shields Street. Monetary consideration: $10. E. Right -of -Way Dedication from Odum Enterprises, for a right-of-way dedication for Willox Lane and College Avenue, located at the southwest corner of North College Avenue and Willox Lane. Monetary consideration: $]0. F. Right -of -Way Dedication from Odum Enterprises, for a right-of-way dedication for Willox Lane, located on the south side of Willox Lane and west of North College Avenue. Monetary consideration: $10. G. Drainage Easement from Odum Enterprises, for a storm drainage and detention easement, located at the southwest corner of Willox Land and North College Avenue. Monetary consideration: $ 10. H. Deed of Dedication for a permanent slope easement from Buderus Family Farm, LLC, located on the south side of East Vine Drive and Yz mile west of Interstate 25. Monetary consideration: $10. I. Deed of Dedication for a permanent slope easement from Linda and Robert Buderus, located on the north side of East Vine Drive, east of the railroad tracks, and 1400 feet east of County Road 9E. Monetary consideration: $10. 45 February 2, 1999 J. Deed of Dedication for a permanent slope easement from Hartshorn Farm, Inc., located on the north side of East Vine Drive and 1/2 mile west of Interstate 25. Monetary consideration: $10. K. Deed of Dedication fora permanent slope easement from Marilyn and Herbert Pedri, located on the south side of East Vine Drive and 2000 feet west of I-25. Monetary consideration: $10. L. Deed of Storm Drainage Easement from Marilyn and Herbert Pedri for storm drainage, located on the south side of East Vine Drive and 200 feet west of I-25. Monetary consideration: $0. Items on Second Reading were read by title by City Clerk Wanda Krajicek. 8. Second Reading of Ordinance No. 11, 1999, Appropriating Unanticipated Revenue in the Community Development Block Grant Fund for the Renovation of the Kitchen at the Catholic Charities Northern Mission. 9. Second Reading of Ordinance No. 12, 1999, Appropriating Unanticipated Revenue in the General Fund for the Latimer County Multi -Jurisdictional Drug Task Force. 10. Second Reading of Ordinance No. 13, 1999, Authorizing the Grant of a Non -Exclusive Utility Easement on the Ute-Snowy Ridge Property to the South Fort Collins Sanitation District. Items on First Reading were read by title by City Clerk Wanda Krajicek. if. First Reading of Ordinance No. 15, 1999 Appropriating Prior Year Reserves. 12. First Reading of Ordinance No. 16, 1999, Approving the Terms of the Lease Agreement for 101 Remington Street, Suites F, M, O and O. 13. First Reading of OrdinanceNo. 17, 1999, Vacating a Portion of the Right -of -Way for Stetson Creek Drive as Dedicated on the Stetson Creek P.U.D.. First Filing Plat. 14. First Reading of Ordinance No. 18, 1999, Appropriating Unanticipated Revenue in the Transportation Services Fund For Safety Improvements to 18 Traffic Signals on the College Avenue Corridor. 46 February 2, 1999 22. Items Relating to Affordable Housing. A. First Reading of Ordinance No. 19, 1999, Revising the Definitions for "Affordable Housing Project" and "Affordable Housing Unit", Revising the City's Development Review Fee Waiver Provisions for Affordable Housing and Revising the City's Impact Fee Delay Program for Affordable Housing. B. First Reading of Ordinance No. 20, 1999, Repealing Article IX of Chapter 5 of the City Code Regarding the Offset of Impact Fees for Affordable Housing. Councilmember Mason made a motion, seconded by Councilmember Smith, to adopt and approve all items on the Consent Calendar. The vote on the motion was as follows: Councilmembers Azari, Bertschy, Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. THE MOTION CARRIED. Consent Calendar Follow-up Councilmember Mason spoke regarding item #15 Resolution 99-14 Authorizing the Mayor to Enter into an Intergovernmental Agreement with Larimer County, for the Provision of Social and Human Services for the First Half of 1999. He noted that funding recommendations are made by a nine - member citizen advisory committee and asked about increasing City representation on the committee because of the proportion of funding provided by the City. Councilmember Smith noted that a number of agencies receiving funds through this process also receive CDBG funding and asked about the possibility of combining the grant application processes. He spoke regarding County library funding. Councilmember Wanner agreed with the comments made by Councilmember Mason regarding the funding. Mayor Azari suggested feedback from the funding committee regarding how the new process is working. Staff Reports City Manager Fischbach reported on post-Superbowl problems in two parts of town, primarily in the Old Town area, where there was property and vehicle damage. He noted that 25 trained and equipped officers were at the scene, and additional trained and equipped officers were needed. Additional training and equipment had been planned for September, 1999, and staff is now looking at speeding up the time frame for obtaining this training and equipment. He stated that the incident 47 February 2, 1999 was resolved when tear gas was used and that only one arrest was made because of the lack of manpower. Councilmember Wanner stated that there have been five substantial civil disturbances of this nature in Fort Collins in the past two years. He supported obtaining training and equipment for additional officers quickly. Councilmember Byrne spoke regarding the widespread acceptance of this type of disturbance and the need for people to obey the law. Councilmember Kneeland noted that a small segment of the population is causing problems and any solution to the problem needs to preserve the ability of the community to enjoy the downtown and other public areas. Councilmember Reports Councilmember Mason reported on the Finance Committee's discussions regarding affordable housing, the ten-year budget plan, and revenue raising mechanisms. Councilmember Byrne reported that the Finance Committee also discussed gearing up for the next budget cycle and ideas to set goals for the budget. Councilmember Bertschy on the regional cities meeting hosted in Fort Collins, and discussions regarding the I-25 corridor and regional interagency cooperation. Councilmember Smith reported on the Legislative Review Committee's discussions concerning legislation regarding responsible growth and CML lobbying efforts. Resolution 99-15 Amending the Fossil Creek Reservoir Area Plan, Adopted The following is staff's memorandum on this item. "Executive Summary On October 5, 1998 the Board of County Commissioners recommended unanimously to the Larimer County Planning Commission that they "not approve the proposed amendment to the Fossil Creek Reservoir Area Plan. " As a result, City staff recommended that City Council pull the Item f rom the October 6 Agenda and consequently pull the same item from the October 21 agenda of the Larimer County Planning Commission. The following issues were identified for further discussion: W. February 2, 1999 Other sites for the Neighborhood Commercial Center (NCC) and Medium Density Mixed - Use Neighborhood (MMN) land uses should be explored within the Fossil Creek Reservoir Area as an alternative to the proposed location (Hansen Property), including locations east and west of'Timberline Road. The proposed land uses should be explored for the potential of integrating these uses into the adopted TDU Program to achieve the upzoning. Determining a new schedule for making a joint decision on the item. As a follow-up, staff scheduled a joint Council Growth Management Committee Lorimer County Commissioners/Larimer County Planning Commission meeting on December 8, 1998. Staff provided an assessment of alternative locations and the group concluded that the original location recommended by staff was still appropriate to add the NCC and MMN land uses to the Fossil Creek Reservoir Area Plan within the Hansen, Rennot, Johnson properties. The second issue discussed was incorporating the proposed land uses into the adopted TDU Program, and application of TDU's inside the Fort Collins Growth Management Area (UGA). An agreement was reached by the group to assess this item separately as a future discussion. Staff has proceeded with a first step and scheduled a joint staff meeting in February. With the first two issues resolved, a revised hearing schedule was developed by staff to include the following dates: Board of County Commissioners: January 25, 1999. Fort Collins City Council: February 2, 1999. Larimer County Planning Commission: February 18, 1999. BACKGROUND: In March 1998, the City of Fort Collins and Larimer County adopted the Fossil Creek Reservoir Area Plan as well ascertain actions to implement this Plan. The preparation of the Plan was a joint effort of the City and County staffs and took more than two years to finish. The success of the Plan depended upon the advice of the many residents and property owners in the area. During the final days of the planning process a few, new issues arose. One of these issues relates to a property within the planning area located on the west side of Timberline Road, approximately 1'/2 miles south of Harmony Road (south of and adjacent to the Willow Springs development). The Hansen family (owners) has been using the 70 acres (+/-) property over the past thirty years for farming purposes. Ma February 2, 1999 In developing the Fossil Creek Reservoir Area Plan, the future uses of the Hansen property as well as adjoining properties were discussed at length by staff, consultants and input from the public. Several alternative land use plans were developed early on in the planning process and eventually a single, draft Land Use Framework Plan was selected for further detailed analysis and public comment. During the final months of the public comment stage, Doug Hansen, representing his parents, asked that the draft Plan be revised to maintain the land use designations as shown on the City's Structure Plan, an element of the City's comprehensive plan. The adopted Structure Plan map shows the Hansen Farm as Medium Density Mixed -Use Residential (MMN), and includes a Neighborhood Commercial Center (NCC). Prior to and at adoption, the draft Fossil Creek ReservoirArea Plan has shown this same property as Low Density Mixed -Use Residential (LMN). This issue was brought to Mr. Hansen's attention with the realization that MMN and LMN land use designations were actually included in the preliminary land use alternatives for this area, and as a result of continued public opposition by area land owners and developers, both uses were removed from the plan. Mr. Hansen was informed by City planning staff in early February that even though these uses were not presently included in the final plan, City and County staff and Consultants were still under the direction to support the City Structure Plan and show both the Medium Density Mixed -Use Residential, andNeighborhood Commercial Centerin the Fossil Creek ReservoirLand Use Framework Plan. Initial opposition by area land owners and developers to showing the two land uses in the Framework Plan (Chapter 2 of the Fossil Creek Reservoir Area Plan) was centered around the notion that what both the Medium Density Mixed -Use Residential and Neighborhood Commercial Center uses represented was too intense for the Fossil Creek Reservoir area. In addition, developers expressed concern that the market would not support a neighborhood commercial shopping center size development south of Harmony Road, due to several other shopping centers being planned along the Harmony Road Corridor. However, in working through many of these and other issues throughout the planning process, the final Framework Plan as contained in Chapter 2 of the Fossil Creek Reservoir Area Plan, which acknowledged the Fossil Creek Area as a future urban area, received substantial supportfrom the community. Furthermore, since the summer of 1996, the market has changed somewhat regarding commercial shopping center development along Harmony corridor. Recent development activity has shown that additional neighborhood shopping centers that were shown on the City Structure Plan have not occurred as originally anticipated (with grocery stores) and instead other commercial uses have been planned along Harmony Road. Along with the projected future residential development within the Fossil Creek Reservoir area, this further supports the need for an eventual neighborhood commercial center south of Harmony Road. Prior to adoption of the Fossil Creek Reservoir Area Plan and during the public review period, Mr. Hansen requested placing these two land uses back on the Framework Plan and map. Again both the City and County appointed and elected officials indicated their supportfor the Hansen's request to further implement the City Structure Plan. However, since this change came up so late in the planning process, they were concerned that the surrounding property owners had not been given 50 February 2, 1999 sufficient opportunity to learn more about what these designations mean. Therefore, amending the Framework Plan and map was tabled until surrounding property owners were notified and given an opportunity to understand the changes and provide comment (see attached Exhibit B). In May written notification was sent to the adjacent property owners and an adoption schedule was identified. In response to this notification, a significant number of area residents were concerned about the impacts of the proposed uses. As a result, a series of neighborhood meetings were held to continue working through issues between staff, neighbors, land owners and developers (see meeting log attached). In assessing the appropriate location and size of the proposed land uses, staff determined that the NCC and MMN land use designations should be located on three properties including the Hansen, Rennat, and Johnson parcels. Based on input received, adjustments to the policy language and map have been made (see attachment). Making these changes will require an amendment to the Fossil Creek Reservoir Area Plan which requires the approval by both the City and County. There are certain "steps" to making an amendment to the Plan including several opportunities for public testimony at formal public hearings. " Pete Wray, City Planner, presented background information regarding the item and showed slides of the area. He spoke regarding the Fossil Creek planning, review and public participation processes and presented the staff recommendations. Councilmember Mason made a motion, seconded by Councilmember Kneeland, to adopt Resolution 99-15. Councilmember Bertschy asked for the County's point of view regarding the matter. Russ Legg, Chief Larimer County Planner, stated that the Board of County Commissioners had an opportunity to look at the alternatives and that the County is pleased that the City is looking at the possibility of transferable density units inside the growth management area. He noted that the County Planning Commission will be looking at the issue on February 18. Councilmember Byrne asked what factors are reviewed to determine that the supporting residential area is sufficient to make a neighborhood commercial center viable. Wray stated that staff identified the existing and future neighborhoods in the southeast part of the City. Joe Frank, Director of Advance Planning, stated that one consideration in reducing the size of the center was the size of the market area. Councilmember Mason asked if this will be discussed by the Council Growth Management Committee. Greg Byrne, Community Planning and Environmental Services Director, stated that the matter is scheduled for the next meeting of the Growth Management Committee. Eerik Rennat, 1001 Strachan Drive, speaking on behalf of his parents who own a parcel directly affected by the proposal, expressed concerns about the plan and the process and stated objections that he believes have not been adequately heard. He questioned commercial viability, spoke regarding 51 February 2, 1999 traffic hazard concerns and the railroad as a barrier, and stated that there is no documentation that alternate sites have been considered. Doug Hansen, representing his parents who own a farm at 6029 South County Road 11, stated that no development plans are in place for the property. He spoke regarding the City Structure Plan, the concept of self supporting neighborhoods in City Plan, and the transportation options available in the area. He stated that his family's plans for development of the property are relatively long term, which is consistent with the requirement that there be an adequate number of homes in the area to support the neighborhood commercial center when it is finally built. He spoke regarding the need to establish a consistent land use structure in the area. Councilmember Mason asked about the staff analysis of alternate locations for the center. Greg Byrne stated that alternative locations were reviewed and evaluated at a joint meeting of the Growth Management Committee and County representatives. Councilmember Bertschy asked about traffic concerns for this location. Wray stated that transportation modeling assessment was conducted during the Fossil Creek area planning, and he outlined transportation planning for the area to improve connectivity. Frank stated that the railroad is a barrier to connectivity and that this is the best location for a neighborhood commercial center needed to meet the future needs of the area given the circumstances. Councilmember Bertschy asked about allowable uses in the MMN area. Frank outlined the allowable uses. Councilmember Byrne stated that he would support the motion and commended the County for its cooperation. Councilmember Kneeland spoke in support of the motion and commended those who have worked hard to get to this point. Councilmember Smith clarified that this Resolution does not accomplish the zoning, and that the zoning will take place at the time of annexation. The vote on Councilmember Mason's motion was as follows: Yeas: Councilmembers Azari, Bertschy, Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. THE MOTION CARRIED. Councilmember Smith stated that transferrable development units (TDU's) is a critical issue and asked that this be discussed at the next City/County joint meeting. 52 February 2, 1999 Resolution 99-16 Adopting the Priority Affordable Housing Needs and Strategies Report, Adopted as Amended The following is staff's memorandum on this item. "Financial Impact The "Priority Affordable Housing Needs and Strategies" report discusses a variety of ways that the City can be smarter in using its funding for affordable housing. Regardless of whether any additionalfunds become available, those strategies shouldhelp the City be more effective at meeting the housing needs of its low-income citizens. The report analyzes the number of affordable housing units needed in Fort Collins. It concludes that just over 4,400 units would be required to meet the community's need for affordable housing from 1999 to 2008. City Council has a range of funding choices, framed by two options -- to add no funding to affordable housing, or to add enough to potentially meet the need in the next 10 years. In 1999, the City's existing resources should be enough to fund 285 units. If no additional funding is made available by the Cityfar new units, then approximately 2,874 units could be funded by 2008. That would leave the community in need of about 1,542 units. On the other hand, if enough City funding was added to increase the number of units funded by 10% each year, the City could potentially fund 4,542 units (126 more than it needs) by 2008. These two options are illustrated by the charts on the following page. For both charts, the federal sources of funding for new unit production include 60% of the City's 1999-2000 CDBG allocation and 90% of'its 1999-2000 HOME allocation. It also includes 90% of estimated "program income, " or payments to be made on loans from those federal programs. Any growth in the "Federal Funding" column is attributable to growth in program income. The local source of funding for new unit production includes the current balance of the Affordable Housing Fund ($478,083 at the end of 1998), funds currently budgeted for the Affordable Housing Fund ($283,000 in 1999), less funds to support the Larimer Home Improvement and Impact Fee Rebate Programs. It does not include Cityfunds for staff who work on affordable housing planning and programs. The Larimer Home Improvement Program (LHIP) has received $22,500 annually from the Affordable Housing Fund, and the report proposes continuation of that funding. 53 February 2, 1999 Sumrory of hits that Could be Furdeed Wth no Increase to CityContribution YEAR # NEW UNITS TO FUND TiMIRAL FUNDING CfTY FUNDING REBATES &LE111) 1998 n/a 478,083 478,083 1999 285 1,425,000 283,(M 283,000 2000 310 1,437,900 283,(X)O 100,327 200I 308 1,424,(M 283,(M _ 22,500 2002 301 1,471,900 283,000 22,500 2003 296 1,507,300 283,000 22,500 2004 289 I54ZWO 283,000 22,500 2005 291 1578200 283,0OD 22500 2006 274 1613,600 283,000 22,500 2007 267 1649100 - 283,000 22,500 2008 261 1684,600 283,000 22,500 TOTAL 1 2.874 1 $ 15,334,300 $ 3,308,083 $ 1,041,410 Staff and the Affordable Housing Board support ending the Impact Fee Rebate program in favor of establishing a competitive process. However, there are 11 qualified projects that have received preliminaryapprovalfromthe Planning and Zoning Board. These projects need Impact Fee Rebate program funds to remain feasible. To be fair to those projects, $816,4/0 from the Affordable Housing Fund should be set aside for these Rebates. To meet the proposedfunding goalsfor New Units, Rebates, and LHIP, the City would need to make an ongoing appropriation of about $21,400 to the Affordable Housing Fund in 2000 and an additional $179,900 in 2001. Each year thereafter, it would need to make ongoing appropriations ranging from $235,800 to $624,400. Summary of Funding Needed to Reach 10-year Goals for NewWt Production YEAR #NEWUNITS TO FUND FEDIItAI, FUNDING CITYFUNDING TOTAL$ ADDITIONAL$ REBATES &LHIP 1998 n/a 478,083 478,083 1999 285 1,425,0 0 283,000 0 283,OOD 2000 314 1,437,900 304,390 21,390 11 100,327 2001 345 1,424,000 484,34) 179,910 _ 22,500 2002 379 - 1,471,900 720,141 235,841 22500 2003 417 1,507,3W 1,011,298 291,158___. 22,500 2(X)4 459 1,542700 1.351,753 340,455 22,5W 2005 505 1.578200 1,748,867 397,114 22,50D 2006 555 1,613,600 2,211.439 462,572 22, 2007 611 _ 1,649,100 2,746,175 537,736 22,50D 2008 672 1,694,600 3.373,583 _ 624408 22,500 TOTAL 4,542 $ 15,334300 $ 14,716.029 $ 1,041,410 54 February 2, 1999 The report also proposes investigation of the feasibility of a Land Banking Program for Affordable Housing. A team of City staff and community leaders has developed the program concept, and is preparing to begin a detailed financial feasibility analysis. The team's preliminary budget request is for $500,000 per year in 2000, 2001 and 2002. BACKGROUND: The goal of the "Priority Affordable Housing Needs and Strategies" study is to help the City be more strategic in getting housing assistance to the people who need it most. It is also about using City resources smarter, to get the most "bang for the buck. " The study began with an investigation of what kind of'affordable housing exists in this community, what kinds are needed, and what the most urgent need is. It includes an assessment of existing financial resources that support affordable housing, both public and private. The report also contains a description of the roles of various players in the affordable housing community within Fort Collins, including a comprehensive analysis of current City roles, responsibilities and programs. Finally, it presents recommendations from stuff and the Affordable Housing Board for the City's future roles, responsibilities, and programs, including specific and measurable goals, objectives and strategies for meeting its affordable housing needs. The strategies would be effective regardless of whether additional funding is made available. However, if the goals and objectives are not fully funded, the numbers of units to be funded should be recalculated. The strategies can be summarized as follows: 1. Use the City's subsidy dollars to help affordable housing projects leverage funding from other sources. 2. Award an average of $5, 000 per unit to projects from CDBG, HOME, program income, and the City's Affordable Housing Fund. 3. Use 60% of CDBG, 90% of HOME, and 90% of program income dollars for awards to affordable housing projects. 4. Replace the Impact Fee Rebate program with a competitive process. 5. Award approximately 70% of the City's subsidy dollars to projects that will provide affordable rental housingfor very low-income households (at or below 50% ofAMI). Equal priority should be given to two types of project - (1) those that would build new units; and (2) those that would preserve existing affordable rental projects. 6. Award Private Activity Bondfinancing to projects that willprovide affordable rental housing for low-income households (between 50% and 60% of AMI). 7. Award approximately 30% of the City's subsidy dollars to homeownership programs or projects. The vast majority would be awarded to potential first-time homebuyers through the existing Homebuyer's Assistance Program. 55 February 2, 1999 8. All projects that receive ,funding must commit to keeping their units affordable for a minimum of 20 years. The highest priority should be given to projects that will commit to permanent affordability. 9. Award most funding as loans, not grants. 10. The City needs to actively solicit private developers to work in Fort Collins, and assist existing developers to increase their capacity to create more affordable units. 11. Funding targets must remain flexible, to allow CDBG and HOME program dollars to be fully utilized. Conclusions — Fort Collins' Priority Affordable Housing Needs: • Rental Housing. This community's highest priority needs to be producing new rental units affordable to households earning below 50% ofAMI. In 1997, there were approximately 2,230 of these very low-income family or elderly households paying over 30% of their income for rent. This community also needs to maintain a supply of multifamily rental units that are affordable for people earning 50% to 80% of AMI. In 1997, there were approximately 710 of these low- income family or elderly households paying over 30% of their income for rent. • For Sale Housing. This community needs to continue to help first time homebuyers earning below 80% ofAMI to get into affordable homeownership. In 1997, there were approximately 960 of these low-income family households (earning between 50% and 80% of AMI) that could become first time homebuyers with downpayment or closing cost assistance. • Housing Production. This community needs to be more proactive in identifying and securing sites forfuture affordable housing development, it needs to examine any regulatory barriers and consider reforming them, and it needs to be supportive of proposed developments in their quest for identifying development subsidies. In addition, it needs to preserve its existing affordable housing stock. There are a number of assumptions underpinning staff's estimate of the number of affordable housing units needed in Fort Collins. It is based on datafrom HUD, which has run projections from the 1990 census to estimate the 1997 need. In order to compensate for the impact of student households, the need was restricted to only family and elderly households. This gives a very conservative estimate of units needed. The estimate of very -low income households who currently need affordable rental housing (2,230) is much higher than the potential pool of first time homebuyers (960). To account for growth in the need for affordable housing into the future, an annual growth factor of 3% has been added to the 1997 figures. Therefore, the goal for funding units becomes 3,087 for rental housing and 1,329 for homeownership assistance. The numbers are split, 70% renter to 30% potential homebuyers, so staff proposes that the City's financial resources be allocated proportionately. 56 February 2, 1999 Strategies for meeting Fort Collins' Priority Affordable Housing Needs: 1. Use the City's subsidy dollars to help affordable housing projects leverage funding from other sources. The fundamental role of the City in affordable housing production is to provide enough funding to projects, early in their planning process, so that their developers can approach other funding sources with concrete evidence that the City supports project. Leveraging public and private, national, state and local funding sources is the key. 2. Award an average of $S,OOOper unit to projects from CDBG, HOME, program income, and the City's Affordable Housing Fund. Staff estimates that an average $5,000 per unit subsidy would be enough to leverage other funding sources. Actual awards should vary based on the relative merits of different project proposals. For example, relatively more funding should be awarded to projects serving lower incomes. In addition, the amount per unit should increase over time as construction costs and sale prices increase. These figures need to be reevaluated periodically. The value of incentive programs like priority processing, development review fee waiver, and impact fee delay would not be included in the $5,000. 3. Use 60% of CDBG, 90% of HOME, and 90% of program income dollars for awards to affordable housingprojeets. This is essentially a continuation of existing practice, from over the past 5 years. 4. Replace the Impact Fee Rebate program with a competitive process. Currently the City's Affordable Housing Fund is being used to provide impact fee rebates or offsets. This program was designed as an administrative mechanism to refund some of the Impact Fees paid by affordable housing projects, using General Fund dollars. It is a simple way to counter charges that the City's impact fees are too high. However, it does not allow the City any flexibility to fund either the projects that best meet its priorities or the projects that most need its assistance. This report proposes eliminating that program in favor of a competitive process. 5. Award approximately 70% of the City's subsidy dollars to projects that will provide affordable rental housingforvery low-income households (at orbelow 50%ofAM7). Equal priority should be given to two types of projects: (1) those that would build new units; and (2) those that would preserve existing affordable rental projects. There are a number of existing subsidized apartment complexes that are affordable to very low-income households that are in danger of being lost to the affordable housing stock. The preservation of those units should be as important as building new units. 6. Award Private Activity Bond financing to projects that will provide affordable rental housing for low-income households (between 50% and 60% of AMI). This category of renters is also in need of help, but to much less an extent than those earning below 50% of AMI. Although rents that are affordable to people earning 60%gfAMI are close to the City's current average rents, new units cannot be built at that rent level without assistance of some kind. Private Activity Bonds (PABs) are designed to produce such units. 57 February 2, 1999 7. Award approximately 30% of the City's subsidy dollars to homeownership programs or projects. The vast majority would be awarded to potential first-time homebuyers through the existing Homebuyer's Assistance Program. This will result in a reduction of the amount offunding that is currently available to help first-time homebuyers. While the City recognizes the value of homeownership, the number of very low-income renters who need affordable housing is so overwhelming that it should give the highest priority, and the vast majority of its resources, to serving that population. 8. All projects that receive funding must commit to keeping their units affordable for a minimum of 20 years. The highest priority should be given to projects that will commit to permanent affordability. Housing affordability is not a short-term problem. Therefore, in order to receive City subsidies or incentives, housing projects must commit to keeping their units affordable for a minimum of 20 years. Those that commit to longer periods should receive preference. The highest priority and level of'support should be given to those that commit to permanent affordability. Most buildersoffor-salehomes will consider this standard too difficult to meet. It will effectively eliminate their interest in applying for City subsidies. However, those that can assure the ongoing affordability of the homes they sell may be able to access the 30% of subsidy dollars set -aside for homeownership. 9. Award mostfunding as loans, not grants. Loans enable the City to recycle funding that can be usedforfuture affordable housing projects. Only not -for -profit organizations that promise permanent affordability should receive grants. For -profit rental developers may receive low - interest loans, with terms that can be negotiated on a case -by -case basis. Homebuyer Assistance is already being provided as a no -interest loan, due on sale of the home. 10. The City needs to actively solicit private developers to work in Fort Collins, and assist existing developers to increase their capacity to create more affordable units. The City's direct roles in affordable housing do not include acting as a developer. Therefore it needs to work in partnership with the private sector, both for -profit and not for -profit. 11. Funding targets must remain flexible, to allow CDBG and HOME program dollars to be fully utilized. Some options include: a. Set aside some funding for specific types of mid -year projects. b. Make small awards to assist low-income rental units (50 to 60% of AMI), but only if there are not enough feasible projects that will serve 50% AMI or less. C. More than 30% of total funds available could be awarded to homeownership programs or projects, but only if there are not enough feasible projects that will serve renters earning 50% AMI or less. d. Private Activity Bonds could be used for low -interest mortgage loans, if there are no feasible rental projects to use them. e. Program income and Affordable Housing Fund dollars could be held for future funding rounds. 0 February 2, 1999 Previous Council Actions: The 1997-99 Staff Work Plan calls for an Affordable Housing Needs Study to be completed in the summer of 1998. The first phase of the "Priority Affordable Housing Needs and Strategies" report was presented to City Council at its study session on June 9, 1998. Based on that information, City Council approved Resolution 98-125 Establishing Affordable Housing Priorities at its August 18, 1998 meeting. The second phase of the report, with enhanced "Goals and Strategies, " was presented to City Council at its study session on October 27, 1998. Since then, staff and the Affordable Housing Board have worked together to revise the "Goals and Strategies" and prepare them for adoption by City Council. Citizen Participation: After the October Study Session, the draft report was widely distributed to the following groups of interested parties: • U.S. Dept. of Housing & Urban Development, Denver Office • Colorado Division of Housing • Colorado Housing Finance Agency • Larimer County Commissioners • Fort Collins CDBG Commission • Affordable Housing Coalition of Larimer County • Larimer County Office on Aging, Senior Attainable Housing Committee • Not -for -profit developers • For -profit developers • Realtors Public comments were reviewed by staff and the Affordable Housing Board, and incorporated into the document as appropriate. A summary of the comments and responses has been added to the report, in Appendix 4. The same people have been mailed copies of the "Final Draft" of the report, so that they might be prepared to comment on it at the upcoming City Council meeting. 59 February 2, 1999 Affordable Housing Board Recommendation: The Affordable Housing Board has been closely involved in the development of the study, especially "The City of Fort Collins' Role" and the "Goals and Strategies... " chapters. Since the October 27th Study Session, the Board has held 6 meetings to review and debate the document. At a special meeting on January 14th, 1999, the Board voted to support adoption of'the study by City Council. Attached is a memo from Bob Browning, Chairman, explaining the Board's position." City Manager Fischbach noted that material relating to the CSU student population and the ten-year budget was included in Council's reading material. Greg Byrne, Community Planning and Environmental Services Director, summarized the proposed changes to the City's affordable housing policies and priorities. Ann Watts, City Planner, presented a summary of strategies, including leveraging other funding sources. She stated that the $5,000/unit figure used to calculate the amount of money needed to meet the goals is an average and will vary based on the relative merits of different projects. She spoke regarding the percentage of CDBG money used for housing production over the past five years. She stated that one of the key issues in process is replacing rebates with competition. She spoke regarding the recommended priorities and the potential financial impact of the program. Councilmember Wanner made a motion, seconded by Councilmember Bertschy, to adopt Resolution 99-16 as amended with the suggestion that the City fully fund the program, amounting to approximately $13 million over the next ten years. Councilmember Smith clarified that the motion includes a close inspection of budget effects in two years. Councilmember Wanner stated that the policy is a total review every two years. Councilmember Mason asked when the City can expect to receive census data, noting that many of the assumptions are based on 1990 census data. Ken Waido, Chief Planner, stated that the detailed socioeconomic data can be expected by mid 2001. Joy Allen, ASCSU member, spoke regarding the importance of affordable housing and making sure that students are included as a priority. Betty Maloney, 1309 City Park Avenue, commended the work that has gone into the report and spoke in support of the new emphasis on lower income groups. She supported land banking and involving the university to play a larger role in student housing. Ernest Giron, Director for Catholic Charities Northern, expressed concerns that the use of 65% of CDBG funds for housing would impact other nonprofit groups such as his agency. K1 February 2, 1999 Rusty Collins, Neighbor -to -Neighbor, commended the staff work on this item and stated that this report is a proactive step regarding affordable housing. He supported continuing research regarding land banking. Karen Girard, Executive Director of Funding Partners for Housing Solutions, supported Councilmember Warmer's amendment to the Resolution. City Attorney Roy read proposed language to be inserted in the Resolution for the amendment suggested by Councilmember Wanner: to add a new Section 2 stating "That the Council hereby expresses its support for fully funding, over a period of the next ten years, the new unit production goals found on pages 70-71 of the report." Councilmember Wanner stated that this would meet the intent of his proposed amendment. Councilmember Mason asked for an estimate of the in -kind cost for staff who work on affordable housing issues. Councilmember Bertschy clarified that students would not be excluded if they met the criteria. Watts stated that students would be included if they meet the criteria. Councilmember Smith asked if CSU could apply for these monies as a provider of affordable housing and if CSU has ever applied for such funds. City Manager Fischbach stated that this is on the agenda to discuss with CSU at the next CSU Liaison Committee meeting. Councilmember Bertschy spoke regarding the competitive nature of the program and university housing goals. Councilmember Smith requested information regarding what percentage of students the university is planning to provide housing for and spoke regarding the importance of creating new units. Mayor Azari spoke regarding new opportunities for leveraging funds and new partnerships. Councilmember Smith asked about the County's commitment to affordable housing and suggested exploring opportunities to include the County in the affordable housing solution. Councilmember Byrne asked if the affordable housing picture is getting better or worse and what impact the implementation of City Plan might have on affordable housing. Greg Byrne stated that nothing has been built and marketed at this point under the new land use code and that much of the increase in the median price of homes is due to changes in the size of the median home. He stated that the problem is getting worse because of the rates of growth, the loss of housing stock, and changes in the service sector of the economy. Councilmember Wanner spoke regarding concerns expressed about the loss of social services funding. Greg Byrne stated that there is a 15% cap regarding this funding. 61 February 2, 1999 Councilmember Mason spoke regarding protection of existing trailer parks and the impact of creating low paying jobs by bringing in low paying retail stores. He suggested discussion of a policy to set aside some portion of the first year's sales tax from "big box" retail stores to subsidize affordable housing. He spoke regarding the fears of neighborhoods relating to affordable housing, and suggested that members of the Affordable Housing Board attend neighborhood meetings. Councilmember Kneeland stated that she would support the Resolution and spoke regarding the need to have a full spectrum of housing available for the community. She suggested putting together a slide show to show the successful affordable housing projects in the community. Councilmember Byrne stated that he would support the motion and commended the work on this strategy. Councilmember Bertschy spoke regarding the loss of housing stock and future needs for affordable housing. Mayor Azari stated that other cities have similar affordable housing problems and the need to become more aggressive to gain access to new funding. The vote on Councilmember Warmer's motion was as follows: Yeas Councilmembers Azari, Bertschy, Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. THE MOTION CARRIED. Items Relating to Affordable Housing, Adopted on First Reading The following is staff's memorandum on this item. "Financial Impact Definitions of Affordable Housing Projects and Affordable Housing Units: The financial impact from this change is described below, as it affects the Impact Fee Delay Program. Other programs are not significantly qflected by this revision. Development Review Fee Waiver: There will be no significant impact. Impact Fee Delay: To qualify as an Affordable Housing Project under the revised definition, a residential project would have to make at least 10% of its units affordable and restrict them for at least 20 years so they could only be sold (at an affordable price) to low-income households. Any project that meets that standard would be eligible for the delay of all impact fees on the entire project. Previously, at least 50% of the units had to be affordable to be eligible for this program, without any restrictions on occupancy or duration of'affordability. Presumably, the reduction from the 50% to the 10% standard should increase the number of eligible projects. However, the addition 62 February 2, 1999 of the 20-,year occupancy/affordability restrictions may cause private for -profit developers of for - sale housing to avoid the program entirely. Financial impacts from a deferral of certain impact fees fall into three categories: (1) permanent reduction in the fiscal year spending base (2) lost interest income for all funds, and (3) reduced debt service coverage for bonds. Lost interest income is the most significant impact to the City. However, this loss to the City is less than the savings generated for the developer. This program saves a typical project about $500 per unit, at a cost to the City of about $300-350 per unit. Over $150 is "created" by the difference in interest rates between construction interest loans and the City's investments. City staff knows of 590 rental units and 167for sale units that either were built in 1997-1998 or will be built in 1999, for an average annual production of about 250 units. All of them would be eligible for this program under the proposed regulations. If production continues at that level, Impact Fee Delays could cost the City roughly $80,000 annually, but would save developers over $120,000. City staff hopes that there will be an increase in affordable housing production with the implementation of the "Goals and Strategies" detailed in the "Priority Affordable Housing Needs and Strategies" report. The ultimate goal is to fund 3,087 rental units and 1,329 homebuyers between 1999 - 2008. If this goal is realized, Impact Fee Delays on these units could cost the City about $1.44 million over 10 years, or an average of roughly $144, 000 per year. The program could save developers almost $2.16 million, or $216,000 per year. The chart on the following page demonstrates these calculations: Financial Impact Analysis of the Impact Fee Delay Program 63 February 2, 1999 PER - ... RENTAL FOR SALE ---- . FOR SALE _.------- 1 .,. restricted (min 10%) unrestricted (max 90%) Estimated amount of fees delayed 7,000 1 14,000 .` 14,000 ` ....,.._.,..._... .. _...._......__ __ _g constmchon loan terms LInterests _.... 9 . c._,. 5 ` ..,_........ :.... .. 5 ' aved b y Developers @ ,9% 473 525 Cost to City of foregoing interest @ :6%r 315 350 � 350 i Difference ._. ... _... ... 158 ........ 175 i....I 175 _... _... ESTIMATED ANNUAL PRODUCTION _ RENTAL FORSALE TOTAL _FORSALE restricted (min 10%) l unrestricted (max 90%) Number of units built or pearlanned, 1997-1999 590 72 95 .Z 757 average er ... g Q.. Y 197 -......... ,. 24..._i ,., _.... .. 32.,_..�_ 252. _ ..._. .._ .�_ Interest saved by Developers@ _19% _ ,.. _. 92,9251 .._.. .. 12600 ' ,�.......... :....,.. 16625 ,..... 122,150 Cost to City of foregoing interest @ 16% 61,950 1 8,400 11,083 ; 81,433 __... ... .. ... Difference i ......,, .I 30,975 i ._....._.. _ ...... 4,200 ......._.. 5,542 . ..... 40,717 I 10-YEAR PRODUCTION GOALS RENTAL FOR SALE FOR SALE ''. TOTAL :restricted (min 10%) unrestricted (max 90%)', Funding goal for 1999-2008 3,087 ! 133� 1,196 4 4,416 _ Y P. Interest saved b Developers @ 9% .. 1,458,608 69,773 _ 627,953 j 2,156,333 --- --. Cost to City of toregomg interest @ _._. ..� ---- --, 16% 972,405 ..,...-- c-. 46 515 : ....---..__._ ._..... 418,635 ......._.. 1,437,555 Difference _..... ._..__._� 203. 486, _ 23258 ._.. ,�.. �_.. i 209,318 1 ..... . E _.-- 718,778 .__.. '.' Only units that are restricted as affordable for 20 years are included in this column. ..__....,___..min.. _.._... __....__, , ._..._..___ „ ..... _ 3 Units in this column are unrestricted, but eligible because they are part of an affordable project. The City's goal is to fund 1,329 homet1 yers, but that does little to create new construction Therefore this: ...__. _.. ...,d�._._..... ....._____ __..... ............. ...... m __ . _...,.... estimate is very high. ------------ 4 Assumes the maximum, 90%, of the eligible for sale production will be unrestricted. Impact Fee Rebate: The current annual average of rebates is about $113,000 per year. If the Ordinance is adopted, the Rebate Program would be eliminated except for eleven (H) projects which have received preliminary planning approval from the City and have financially relied on receiving a rebate of fees from the City. Thus, $816,410 from the Affordable Housing Fund will need to be earmarked to cover the costs from these projects if they are completed. Assuming the Affordable Housing Fund continues to receive a budget of at least $283, 000 a year, there will be sufficient funds to cover the estimated costs. EXECUTIVE SUMMARY. A. First Reading of Ordinance No. 19, 1999, Revising the Definitions for "Affordable Housing Project" and "Affordable Housing Unit, " Revising the City's Development Review Fee Waiver Provisions for Affordable Housing and Revising the City's Impact Fee Delay Program for Affordable Housing. On August 18, 1998, City Council adopted Resolution 98-125 identifying the City's priority affordable housing needs. The City Council intends to target City resources on priority needs. The existing affordable housing incentives offered in the Land Use Code and the City Code do not 64 February 2, 1999 necessarily target those priorities. They do not share a common definition ofaffordable housing and so, in some ways, they function at odds with one another. Staff has worked with the Affordable Housing Board to create definitions of an affordable housing project, rental unit and for sale unit. Applying those definitions throughout the Codes will help clarify the City's affordable housing incentive programs and make them easier to work with. Staff and the Affordable Housing Board have also agreed to propose revising the Development Review Fee Waiver so that the proportion of fees waived would equal the proportion of affordable units within an affordable housing project. The Planning and Zoning Board reviewed the proposed changes at its November 19, 1998 meeting. That Board requested the addition of a 20-year minimum affordability period and a more detailed analysis of financial impacts. The result is Ordinance No. 19,1999, which revises the definitionsfor "Affordable housing project, " "Affordable housing unit for rent" and "Affordable housing unit for sale" in the Land Use Code, the Transitional Land Use Regulations, and the City Code. It revises Fort Collins' Development Review Fees Waiver for Affordable Housing in both the Land Use Code and the Transitional Land Use Regulations. Finally, this Ordinance revises Fort Collins' Impact Fee Delay Program for Affordable Housing in the City Code. B. First Reading of Ordinance No. 20, 1999, Repealing Article IX oj'Chapter 5 of the City Code Regarding the Offset of Impact Fees for Affordable Housing. One of the programs established by the City of Fort Collins to promote the development of affordable housing units inside the city limits is known as the Development Impact Fee Rebate Program. The program provides a partial rebate to an affordable housing developer of the impact fees paid to the City, other governmental entities, and/or special purpose utility districts. Currently, the amount of per unit rebate is based on a graduated scale dependent upon the commitment of the developer to provide units as certain income levels, with higher rebates given for housing units reserved for lower income families. In mid-1996, the City Council asked the Affordable Housing Board to re-examine the Rebate Program and to consider making rebates based on a percentage of fees paid instead of flat dollar amounts. The Board has reexamined the Program and in the context of the recently completed `Priority Affordable Housing Needs and Strategies "report now believes the Rebate Program should be eliminated and eventually replaced with a competitive process. Elimination of the Rebate Program would not affect the Development Impact Fee Delay Program. If adopted, the proposed Ordinance would eliminate the Rebate Program except for eleven (11) projects that have received preliminary planning approval and have financially relied on receiving a rebate of fees from the City. Thus, $816,410 from the Affordable Housing Fund will need to be earmarked to cover rebates for these projects if they are completed. Assuming the Affordable Housing Fund continues to receive a budget of at least $283, 000 a year, there will be sufficientfunds to cover the estimated costs. 65 February 2, 1999 BACKGROUND: L First Reading of Ordinance No. 19, 1999, Revising the Definitions for "Affordable Housing Project" and "Affordable Housing Unit", Revising the City's Development Review Fee Waiver Provisions for Affordable Housing and Revising the City's Impact Fee Delay Program for Affordable Housing. The 1997-99 Staff Work Plan calls for an Affordable Housing Needs Study to be completed in the summer of 1998. The "Draft Priority Affordable Housing Needs and Strategies Study" was presented to City Council at its Study Session on June 9, 1998. This phase of the Study included an investigation of what kind of affordable housing exists in this community, what kinds are needed, and what the most urgent need is. The revised study, with enhanced "Goals and Strategies, " was presented to City Council at its Study Session on October 27, 1998. Since then, staff and the Affordable Housing Board have been working together to revise the "Goals and Strategies" and prepare them for adoption by City Council. Staff believes there is sufficient information from the research to form a reasonable recommendation in regard to the community's priority affordable housing needs. City Council, at its August 18, 1998 meeting, approved Resolution 98-125 Establishing Affordable Housing Priorities. To implement these priorities, staff and the Affordable Housing Board worked together to propose revisions to the City's existing Affordable Housing Programs. The Affordable Housing Board voted to support these revisions at its September 3, 1998 regular meeting. After learning of the Planning and Zoning Board's recommendations, it voted to support requiring minimum 20-year occupancy and affordability periods at its January 7, 1999 regular meeting. Changes to the definitions of "Affordable housing project" and "Affordable housing unit, " as well as revisions to the Development Review Fees Waiver and Impact Fee Delay Program forAffordable Housing are included in this Agenda Item. Definitions of Affordable Housing Projects and Affordable Housing Units : All programs are proposed to use the same definition of affordable housing. This requires revision to the Land Use Code, the Transitional Land Use Regulations and the City Code. Staff and the Affordable Housing Board recommend changing the definition of "Affordable housing project" as it exists in Section 5.1.2 of the Land Use Code. Currently, a project qualifies as affordable if 30% of its units will be affordable. The revised definition would decrease that to 10%, and would add 20-year occupancy and affordability restrictions. It would read as follows: Affordable Housing Project shall mean a development project in which: (1) at least seventy-five (75) percent of the gross acreage to be developed under the plan is to be developed as residential dwelling units or mobile home park spaces; (2) thirty (50) at least ten (1lt} percent of said dwelling units or spaces (the "affordable housing units ") are to be available for rent or purchase on the terms described in Section - the definitions of "Affordable housing unit for sale" or Februars2, 1999 -`Affordable housing unitfor rent" (as applicable); rtrm&(3the construction of the dwelling till its or spaces is to occur as part of die initial phase of the project anal (i) prior to the construction of the market rate units or (it) oil a proportional basis, according to the same ratio cis the number of affordable mots bears to the number of the market rate outs; and (4) the units will be required, by binding legal instrument acceptable to the City and duh� recorded with the Lorimer Count), Clerk - and Recorder, to be occupied by and affordable to low-income households for at least 20 vears. Stuff and the Affordable Housing Board ul.rn reconimend adding new definitions of an "Affordahle housing unit for rent" and an "Affordable housing unit for sale - to Section 5.1.2 of the Land Use Code. A variety of definitions afcin "Affordable housing unit" are now found is cGf Brent sections of the Land Use Code and the ON, Code. Instead, each program should adhere to a single, conhnonh' accepted definition of'an "Affin-dable housing unit. " The new definitions wondd read as follows: Affordable housing unit for rent shall mean a dwelling unit which is available for rent on terms that would be affordable to households earning eighty (80) percent or less of the median income of city residents, as adjusted,for family size, and paving less than thirty (30) percent of their gross income.for housing, including rent and utilities. The unit must be occupied by and affordable to such low-income household(s) for a period of not less than twenty (20) vears. Affordable housing unit for sale shall mean. a dwelling unit which is available for purchase on terms that would he affordable to households earning eight), (80) percent or less of the median income of city residents, as adjusted for family sir e, and paying less than thirty-eight(38)percentoftheirgrossirncomeforhousing including principal, interest, taxes, insurance, utilities and honneowraers'associationfees. The unit must be occupied by and affordable to such low-income household(s)for a period of not less than twenty (20) years. All three definitions should he added to Section 29-1 of the Transitional Land Use Regulations. Thev should also replace Section 26-631 of the Cite Code, which affects the Impact Fee Delos, Progrcon. Affordable gross rents will be established In- the City's Advanced Planning DeparnmenI liaised on the Department of Housing and Urban Developnient's (HUD) estimate of Area Median Fanaly Income, which is generally released each Januarv. The calculation of affordable gross rents assin nes an average of 15 persons per bedroom. in 199& affordable rents were. 67 February 2, 1999 Affordable home sale prices will be estimated by the City's Advanced Planning Department based on the Department of Housing and Urban Development's (HUD) estimate of Area Median Family Income, which is generally released each January. The calculation may be modified more frequently to reflect changes in prevailing interest rates or other terms. In 1998, estimated affordable sale prices were calculated as follows: Development Review Fee Waiver: Section 2.2.3(E)(3) of the Land Use Code and Section 29-3(c) of the Transitional Land Use Regulations provide for an "Affordable Housing Exemption" from Development Review Fees. It currently allows for these fees to be reduced by one-half (112) if at least fifty-one percent (51 %) of the dwelling units within the project are affordable to individuals earning between 80% and 95% of median income. This is no longer consistent with the City's definition of affordable housing. There is no need for these sections to contain the definitions of "Affordable housing project, " "Affordable housing unit for rent, " and `Affordable housing unit for sale. " Readers should refer to the definitions in Section 5.1.2 of the Land Use Code or Section 29-1 of the Transitional Land Use Regulations (as applicable). Staff and the Affordable Housing Board propose that fees be waived in direct proportion to the number of dwelling units within the project that are affordable. At least 10% of the dwelling units February 2, 1999 must be affordable in order to meet the definition of "Affordable housing project" and receive any waiver. For example, if a project proposes 75% of its units as affordable housing, then the City would waive 75% of its normal development review fees and the project would pay only 25% of those fees. The program would continue to require that the project verify the percent of units that are affordable prior to the issuance of a certificate of occupancy. If the project composition has changed so that fewer units meet the definition of affordable housing, then the developer would be required to pay development review fees for those units that are no longer affordable. If the project mentioned above drops from 75% affordable to 50% affordable, then it would owe an additional 25% of its normal development review fees before it could receive a certificate of occupancy. Impact Fee Delay: "Deferral of Fees forAffordable Housing" currently exists in two places in the City Code. Section 7.5-26 authorizes the deferral of "...fees established under this Article..." No specific fees are mentioned in this section, but it is assumed that they include all capital improvement expansion fees, including Library, Community Parkland, Police, Fire, General Government, and Street Oversizing. Section 26-632 authorizes the deferral of fees related to utilities, and specifically lists "...the Water Plant Investment Fee ("WPIF"), Sewer Plant Investment Fee ("SPIF"), Storm Drainage Basin Fee and the Raw Water Requirement In -Lieu Cash Payment... " Each Section of the City Code that describes this program should use the same definition of "Affordable housing project, " "Affordable housing unitfor rent" and "Affordable housing unitfor sale" as the Land Use Code. Therefore Section 26-631 should be replaced by those definitions. Ordinance No. 147, 1996, changed Section 26-632 to eliminate the requirement to secure the future payment of deferred fees by means of a letter of credit or certificate of deposit. A similar change was not implemented for Section 7.5-26, although it may have been the intent of the City Council to do so. This change should be made to keep the two sections consistent with each other. Section 7.5-26 and Section 26-632 both state that "...fees... shall... be deferred until the date of issuance of a certificate of occupancy (whether temporary or permanent)... " There is an additional sentence at the end of Section 26-632 that states "The city shall not issue any certificate of occupancy, whether temporary or permanent, for the occupation of any building or structure for which a deferral offees has been obtained pursuant to this Section until such time as such deferred fees have been fully paid." That sentence is redundant and unnecessary. In the interest of matching sections, it should be deleted. Section 7.5-26 should be revised to read "With respect to any building permit for a dwelling unit which is contained within or which contains constitutes an affordable housing project..." This would match the existing phrase in Section 26-632. II. First Reading of Ordinance No. 20, 1999, Repealing Article IX of Chapter 5 of the City Code Regarding the Offset of Impact Fees for Affordable Housing. .' February 2, 1999 In 1994, the City Council established the Development Impact Fee Rebate Program as an administrative program permitting a partial rebate of City impactfees for the purpose of promoting the development of additional affordable housing units. Fees eligible for rebate include almost all City fees as well as fees from special purpose utility districts and the school district. The Affordable Housing Board considered proposing a series of changes to the Rebate Program but in the context of the recently completed `Priority Affordable Housing Needs and Strategies "report now believes the Rebate Program should be eliminated and eventually replaced with a competitive process. This Ordinance would eliminate the Rebate Program except for eleven (H) projects which have received preliminary planning approval from the City and have financially anticipated rebates. The projects listed below, if completed, have an estimated cost of $816,410. $103,070 CARE Eagle Tree (17 rental units @ 50% AMI, 5 @ 45% & 14 @ 40%) 35,040 FCHA, Parkway Townhomes (12 homeownership units @ 50% AMI) 19,710 C&A Scenic Views, Saddle Ridge (27 homeownership units @ 80%AMI) 10,220 Brandt, Willow Wood (14 homeownership units @ 80%AMI) 207,450 Brisben, Buffalo Run (13 rental units @ 40% AMI & 73 @ 50%) 179,580 Brisben, Bull Run (35 rental units @ 50% AMI & 141 @ 60%) 96,360 FCHA, Via Lopez (33 homeownership units @ 50% AMI) 2,920 Habitat for Humanity, Albion Way (I homeownership unit @ 50% AMI) 2,920 Habitat for Humanity, Albion Way (1 homeownership unit @ 50% AMI) 86,140 Brisben, Country Ranch (118 rental units @ 60%AMI) 73,000 CARE, Windtrail (50 rental units @ 55%AMI) $816,410 Approximate Total Assuming the Affordable Housing Fund continues to receive a budget of at least $283,000 a year, there will be sufficient funds to cover the estimated costs. AFFORDABLE HOUSING BOARD RECOMMENDATION. The Affordable Housing Board, at its regular monthly meeting on September 3, 1998, voted to support the proposed revisions to the Land Use Code and City Code. These revisions affect the definitions of "Affordable housing project" and "Affordable housing unit, " the Development Review Fees Waiver and the Impact Fee Delay Program for Affordable Housing. After learning of the Planning and Zoning Board's recommendations, it voted to support requiring minimum 20-year occupancy and affordability periods at its January 7, 1999 regular meeting. The Affordable Housing Board, at its regular monthly meeting on January 7, 1999, agreed that the Development Impact Fee Rebate Program should be eliminated and eventually replaced with a competitive process." 70 February 2, 1999 Ann Watts, City Planner, presented background information regarding the two proposed Ordinances. Councilmember Smith asked if there will be a periodic review to determine if the program is working. Watts stated that a monitoring process could be established. Councilmember Bertschy stated that he received a call from a citizen questioning a twenty-year affordability period and the difficulty it could create in attracting private investors. Watts stated that the majority of affordable rental housing is built through the low income tax credit program and that the minimum affordability period for that program is fifteen years, although more points are awarded to projects that commit to longer periods of affordability and most projects that are funded commit to at least thirty years of affordability. Councilmember Bertschy asked about the practice for private lenders. Watts stated that most affordable housing projects in an effort to minimize their loan payments would extend their amortization terms. Bob Browning, Chair of the Affordable Housing Board, spoke regarding the perspective of the Board and the rationale for the two proposed Ordinances. Mayor Azari expressed appreciation for the work of the Affordable Housing Board Betty Maloney, 1309 City Park Avenue, commended the efforts of the Affordable Housing Board and expressed a concern that changing from rebates to a competitive process could be a handicap for nonprofit agencies. Sister Mary Alice Murphy, Director of CARE Housing, spoke regarding the change in the way rebates are offered and urged that the rebate program not be eliminated. She urged language that would state the program as a competitive process for rebates. She spoke regarding housing for students, cooperation with CSU, and County funding. Lou Stitzel, President of TRAC Homes, cautioned that in attempting to produce predictability and stability, creativity and flexibility can be lost. She stated that having just one type of competitive process may cause difficulties. Councilmember Wanner stated that under this program agencies will have money up front rather than rebates and that the process will provide room for flexibility and creativity. Councilmember Wanner made a motion, seconded by Councilmember Kneeland, to adopt Ordinance No. 19, 1999 on First Reading. The vote on the motion was as follows: Yeas: Councilmembers Azari, Bertschy, Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. 71 February 2, 1999 THE MOTION CARRIED. Councilmember Wanner made a motion, seconded by Councilmember Smith, to adopt Ordinance No. 20, 1999 on First Reading. Councilmember Mason emphasized the importance of monitoring the program to make certain that nonprofit agencies are not losing their ability to get funding. Councilmember Wanner stated that it is important to maintain healthy nonprofit agencies in this community. He stated that the intent is to stimulate affordable housing and to give the City what it pays for. He thanked the staff and Affordable Housing Board for their participation in this process and spoke regarding the land banking program. The vote on Councilmember Warmer's motion was as follows: Yeas: Councilmembers Azari, Bertschy, Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. THE MOTION CARRIED. Other Business Councilmember Mason spoke regarding e-mail communications concerning the issue of inclusionary zoning and asked if Council is interested in discussing the issue. Councilmember Wanner stated that he is interested in discussing the issue and supported the Merrill proposal. Adjournment Councilmember Smith made a motion, seconded by Councilmember Mason, to adjourn the meeting to 6:00 p.m. on February 9, 1999. The vote on the motion was as follows: Yeas: Councilmembers Azari, Bertschy, Byrne, Kneeland, Mason, Smith and Wanner. Nays: None. THE MOTION CARRIED. The meeting adjourned at 9:05 p.m. ATTEST: City Clerk 72