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HomeMy WebLinkAbout03-27-2008 Housing & Community Development CommissionAGENDA HOUSING AND COMMUNITY DEVELOPMENT COMMISSION EMMA HARVAT HALL, CITY HALL 410 E. WASHINGTON STREET, IOWA CITY TH U RS DAY, MARCH 27, 2008 6:30 P.M 1. Call Meeting to Order 2. Approval of the February 12 (two meetings), February 20, and March 13, 2008 Minutes 3. Public Comment of Items Not on the Agenda 4. Staff/Commission Comment 5. Discussion Regarding FY09 Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) Requests • Discuss FY09 CDBGIHOME Applications • Develop FY09 CDBG\HOME Budget Recommendation to Council 6. Adjournment PLEASE NOTE: MEETING BEGINS AT 6:30 PM IN EMMA HARVAT HALL, CITY HALL �� -� CITY OF IOWA CITY �t MEMORANDUM TO: Housing and Community Development Commission FROM: Tracy Hightshoe, Associate Planner DATE: March 20, 2008 RE: HCDC Meeting, March 27, 2008 Enclosed are the revised allocations for your review. There were no changes to the ranking worksheets. At the March 27 meeting, HCDC will allocate the funds available to FY09 CDBG/HOME applicants and then forward this recommendation to the City Council for consideration. Unfortunately, there will be at least a $100,000 reduction in the amount available to fund due to less than anticipated program income over the past years. Staff will be working with the City's accounting department to finalize numbers and will email the exact amount available before the March 27t" meeting. The March 27 meeting begins at 6:30 pm at Emma Harvat Hall, City Hall. If you are unable to attend, please call me at 356.5244 or contact me by email at tracy-hightshoe@iowa-city.org. DRAFT MINUTES HOUSING AND COMMUNITY DEVELOPMENT COMMISSION WEDNESDAY, FEBRUARY 12, 2008 — 11:00 AM PLANNING DEPARTMENT CONFERENCE ROOM, CITY HALL MEMBERS PRESENT: Andy Douglas, Marcy DeFrance, Charles Drum, Holly Hart, Rebecca McMurray, Michael Shaw MEMBERS ABSENT: Jerry Anthony, Steve Crane, Brian Richman STAFF PRESENT: Tracy Hightshoe, Steve Long RECOMMENDATION TO COUNCIL (become effective only after separate Council action): None Call to order: Michael Shaw called the meeting to order at 11:45 a.m. Site Visits to FY09 CDBG/HOME Proposed Project Sites • Extend the Dream Foundation (2203 F. Street) -Tom Waltz provided a tour of the ecommerce center and the m icroente rp rises at 2203 F. Street. He discussed the proposed improvements. • Iowa City Free Medical Clinic (2440 Towncrest Drive) —Sandy Pickup provided a brief tour and discussed the proposed improvements. • Arc of Southeast Iowa (2620 Muscatine Ave.) —Bill Reagan provided a tour of the facility and discussed the lighting and alarm system needs. • Dolphin International (Former Lakeside Apartments, 2401 Hwy 6E) —Arvind Thakore provided a tour of one of the units, community center and the playground area. • Twain Elementary (1355 Deforest Ave.) —Sharon Locke provided a tour of Twain's playground and discussed the proposed playground equipment. Adjournment: MOTION: Hart moved to adjourn the meeting. DeFrance seconded the motion. The motion carried on a vote of 6-0. The meeting was adjourned at 1:05 p.m. MINUTES DRAFT HOUSING AND COMMUNITY DEVELOPMENT COMMISSION FEBRUARY 12, 2008 —6:30 P.M. PLANNING DEPARTMENT CONFRENCE ROOM, CITY HALL Members Present: Jerry Anthony, Steve Crane, Marcy DeFrance, Andy Douglas, Charles Drum, Holly Hart, Rebecca McMurray, Brian Richman, Michael Shaw Members Absent: None Staff Present: Tracy Hightshoe, Steve Long Others Present: Steve Rackis, Josh Heyer, John Brenner CALL TO ORDER: Anthony called the meeting to order at 6:3 5 p.m. APPROVAL OF MINUTES: Hart made a motion to approve the December 20, 2007 minutes. DeFrance seconded the motion. The motion was approved 7:0 (Drum and McMurray arrived late and were unavailable to vote). PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA: There was none. DISCUSSION OF FY08 PROJECTS THAT HAVE NOT PERFORMED PER THE UNSUCCESSFUL OR DELAYED PROJECTS POLICY: Hightshoe reviewed two projects with the Commission that fell under the Unsuccessful or Delayed Projects Policy. The first was The Housing Fellowship (THF), which was awarded $347,000 for an affordable rental housing project in FY08. As part of the application, THE indicated they were going to apply for low-income housing tax credits (LIHTC) to make the project viable. Hightshoe said that in November 2007 they were unable to apply because they didn't have site control, a LIHTC requirement. She said during 2007 they attempted to purchase various properties, such as a lot on the north side of town, 8 lots off Foster Road, but none of the purchase agreements were accepted. Hightshoe added that THE does have two accepted purchase offers in Village Green, and THF's Director .stated that they are confidant they will get enough lots to apply in the next funding round; however THE needs HCDC to recommend approval to reuse the funds for the existing project. Hightshoe said staff has no issue with THE retaining their previously granted funds for one more year, however due to HOME regulations if the application is not successful in November 2008 the funds would need to be recaptured and reallocated to a project that can proceed and be completed in less than three years. Housing and Community Development Commission February 12, 2008 Page 2 Commission members asked why purchase offers were not accepted near the Peninsula Neighborhood. Long stated THE was left with the impression that area residents were not interested in having affordable housing in the neighborhood. Anthony asked if the Fellowship met the asking price of the property in question. Hightshoe stated she didn't know what the exact purchase offer stated, except there must be contingencies for financing and environmental review requirements. Shaw asked how many properties the Fellowship planned to develop. Hightshoe stated based upon their application eight to 10. Members discussed if finding six to eight more vacant lots in a year might be difficult. Hightshoe further explained that the two lots in the Village Green area, off of Scott Blvd., are zoned RS5, and will be built as single-family homes. Discussion turned to the slow -down in the local real estate market, and the increasing likelihood that developers would be interested in working with the Fellowship. Motion: A motion was made by Richman to recommend The Housing Fellowship reuse the funds for the existing project as identified in their FY08 Housing Application. Drum seconded the motion. The motion was approved 9:0. Hightshoe then reviewed the FY08 Neighborhood Centers of Johnson County (NCJC) project. She said each sub -recipient must enter an agreement for CDBG funds within 90 days of the new fiscal year (July 1). Hightshoe said the delay has not been with the Neighborhood Centers of Johnson County, but rather with the City and HUD's legal process. She explained, saying based on the City's policy, a mortgage or lien must be placed on a property to ensure that during the compliance period the City's interests are secured. NCJC has a 99-year lease with Mark IV Investors for the property. Pheasant Ridge is a HUD project based housing project with 248 assisted units. Based on the land lease, NCJC must get Mark IV and HUD's consent to place a leasehold mortgage on the property. Due to the various legal parties involved a financing rider to the leasehold mortgage must be approved by HUD, Mark IV, Midland Security (Mark IV's lender) and the City. Hightshoe said she thinks the problem will be resolved soon so that the project can proceed this upcoming construction season. The City considered attaching a lien to the Broadway Center but due to the number of liens on the Broadway Center for previous CDBG applications, there is not enough security. The original lien to build the Pheasant Ridge Center was placed on the Broadway Center as well. PRESENTATION AND DISCUSSION OF THE AFFORDABLE HOUSING MARKET ANALYSIS COMPLETED BY MULLIN & LONERGAN ASSOCIATES, INC.: Long presented the Affordable Housing Market Analysis to Commission members. He said the City hired Mullin & Lonergan of Pittsburg, to complete the study, which began May 1, 2007, and was completed a few weeks ago. The study cost $43,000. Long said Mullin & Lonergan examined census, HUD information and reviewed population projects as provided by Claritas. The consultants also interviewed private nonprofit developers, as well as representatives of the University, Coralville, North Liberty, Tiffin and University Heights to determine the affordable housing demand, barriers to it, and Housing and Community Development Commission February 12, 2008 Page 3 suggestions to deal with those issues. He noted the student population was factored out of the study. Long said the major points of the study were: 1. Household growth is outpacing population in Johnson County. In addition to increases in population, households are becoming smaller. Long said what that should mean to Commission members is that every household needs a dwelling, and the area needs more housing. 2. From 2000 to 2006, 8,700 new units were created in Johnson County. He said there were almost $500 million in residential sales, and 26,000 sales transactions, which shows the area is a very active market. 3. There are 15,000 people who commute into Johnson County from outlying areas each day. 4. The number of cost -burden households, or households paying more than 30 percent of their income for housing, is on the rise. 5. The real median income in Johnson County has declined four percent since 2000, while at the same time the sales value of homes has increased 11 percent. The average median sale price for a house in Johnson County was $153,150. He added that there were only 3 89 homes that sold for less than $100,000 in 2006 (including condos, but excluding mobile homes). 6. The rental market is very tight in Johnson County. In a one -mile radius around the Pentacrest area, the vacancy rate is only 1.66 percent, while a healthy vacancy rate is around five percent. Four bedroom units are at a zero percent vacancy metro -wide. By comparison, North Liberty rentals were at 5.5 percent in 2007 and 7 percent in 2006. 7. About half of all HUD subsidized project -based units in the area, such as Capitol House, Pheasant Ridge, and Ecumenical Towers, will be up for renewal in the next two and a half years. Long said this is an opportunity for the Housing Authority or the City to work with the State to try to maintain those units. 8. It is projected the metro area will produce 2,711 affordable units while the projected demand is 6,671 units. Area non -profits are projected to produce 31 units a year. Long said the study identified some of the barriers for developers, which include absence of vacant land zoned for multi -family housing, the "not -in -my -back -yard syndrome," high cost of land, the scarcity of new single-family housing under $200,000, student demand keeping rental prices for the whole area high, a 35 percent decrease in federal funding in the past six years for affordable housing, and a lack of affordable housing developers. Recommendations for these problems include putting a positive face on affordable housing, increasing the supply of land zoned by right for multi -family housing to avoid the need for special exceptions and neighborhood resistance, treating affordable housing developers as a special class by perhaps waiving fees or fast -tracking affordable housing to save time and money, and creating partnerships with developers and the University. Housing and Community Development Commission February 12, 2008 Page 4 Long said there are many examples nation-wide of universities partnering with developers to create affordable housing for university employees. Another suggestion is inclusionary housing, or requiring a certain percentage of units in any proposed development to be affordable for owners or renters. More suggestions included preserving at risk affordable properties, such as Capitol House and Pheasant Ridge, expanding the capacity of local non -profits, and development of a county -wide administrative policy that is supportive of affordable housing and treats it as an asset to the community Long said the City Council is supportive and would like to get moving on the study's recommendations, and he encouraged Commission members to seize the opportunity and push to change policies in the next few months. Members discussed the findings of the study. Anthony said, that in his experience, people reject the idea of affordable housing because they perceive it as largely being used by students, and that the "evidence" for affordable housing is anecdotal and the numbers are outdated. Anthony praised the study, saying it addressed those criticisms. Another member asked if given the strong focus on affordable housing, if now would be the time for the Commission to analyze their commitment to affordable housing in the way they approach applications and if there are certain places they want to put more money. Hightshoe reminded Commission members that they still need to balance non -housing community needs when they are allocating funding. The City completed a housing study, however if we hired a consultant to perform a review of non -housing community development needs we would still need to balance how much we fund for housing as opposed to non -housing needs in the community. REVIEW OF THE FY09 ALLOCATION PROCESS AND PROFORMA BASICS Hightshoe handed out an allocation timeline for review. She reminded members the next meeting is on February 20th, 2008. 27 Applicants will be present to answer HCDC questions. She said the meeting will be quite long, running from 6 p.m. to about 10 p.m., and food and breaks will be provided. Hightshoe said that at the meeting applicants will be given 5-10 minutes to answer Commission members' questions. She said Commission members would receive a one -page staff report of each application that will include any items of concern by staff. Housing applicants will be given 10 minutes to answer Commission questions. Hightshoe said at the meeting staff would give Commission members ranking sheets so members can begin ranking each application based upon the set criteria. The ranking sheets will be due February 29th. Hightshoe said each member's ranking forms would be placed onto a spreadsheet so Commission members can see how everyone has rated and funded projects. She added that a summary of FY06-FY08 allocations would be provided in the next packet that reviews the City's actual allocations compared to the CITY STEPS goals. Housing and Community Development Commission February 12, 2008 Page 5 At the March 13 meeting, the members will review how they scored/funded projects and will review with other members any major discrepancies between how others may have ranked or funded a project. This meeting is also an opportunity to ask applicants any questions they may still have regarding a project. The applicants are encouraged to attend, but it is not a requirement. On March 27, 2008, HCDC meets again, and members will formulate their recommendations. Once the whole process is complete, the final recommendation is sent to Council. Staff completes the HUD required Annual Action Plan based on the recommendations and initiates a 30-day public comment period. On May 6, 2008, the City Council will vote on the recommendations. The Council may accept the full recommendation or make changes. Typically one or two HCDC members attend the Council meeting in case there are any questions and they also provide information about the process HCDC went through to formulate the recommendation. Hightshoe stated there had been questions previously about when a conflict of interest issue is present. If any member has a concern, she asked members to inform her of the situation and they would determine if a conflict is present. In the past, if a HCDC member was a Board member or in management (director, vice president, etc.) and that organization applied for funds it was considered a conflict of interest. If members volunteer occasionally for an organization that applies for funding, that has not typically been a problem, however if you have concerns or there are other issues please let staff know. Examples of other situations may include things like if you're an attorney and a major client of yours applies for CDBG/HOME funding, please contact staff to discuss. Hightshoe stated that if you feel there is a potential conflict, please discuss with staff before the allocation meetings. She also reminded members that, according to State lobbing laws, council appointed commission members are not allowed to accept more than $2.99 as a gift (including food) from an applicant. She stated applicants may contact them to discuss their application. HCDC members may discuss the application, however can't accept anything from the applicant. Hightshoe reviewed the rental housing proforma. All rental -housing applicants must complete this form. The form identifies expenses and revenues and allows staff to compare rental projects. The proforma will also show if the project can cover debt service and the return on investment. Staff will look through rents and expenses to determine if the project is viable and the expenses are reasonable. If staff has any concerns it will be noted on the staff reports. Staff looks at a project and tries to determine an appropriate level of subsidy. The City does not want to over subsidize a project; however wants to make sure the project is viable over the entire period of affordability. The second page of the proforma deals with tax implications. If a business is a non-profit, the second page does not apply as they do not pay taxes. Hightshoe noted that the Bank -Ability guide in the last packet also provided some guidance on how to estimate expenses for maintenance, reserves, etc. Housing and Community Development Commission February 12, 2008 Page 6 MONITORING REPORTS: Crisis Center and Community Mental Health: Drum reported that the Crisis Center had replaced their doors, and the Community Mental Health Center had spent some money on asphalt to address a paving issue in the parking lot. Iowa City Free Medical Clinic: Richman reported the Clinic has put the prescription assistance program to use, and they will have their funds spent by the end of the fiscal year. Iowa City Housing Authority: Drum and Rackis reported the Housing Authority has spent all of the FY06 funds, and the FY07 funds will be spent by June or July of 2008. He said they are spending about $25,000 a month serving 61 families with TBRA. Rackis said the Housing Authority is currently serving a total of 1,297 families with a baseline of 1,214 vouchers. Rackis reported that approximately 80 percent of all people the Housing Authority serves had a Johnson County address at the time of application, with the majority of other clients coming from other areas in Iowa. He said the remaining percentage tends to be people from Illinois, and only a few from other states. ADJOURNMENT: Crane made a motion to adjourn. Drum seconded the motion. Approved 9-0. The meeting adjourned at 8:30 p.m. MINUTES DRAFT HOUSING AND COMMUNITY DEVELOPMENT COMMISSION FEBRUARY 20, 2008-6:00 PM EMMA J. HARVAT HALL —CITY HALL Members Present: Jerry Anthony, Steve Crane, Marcy DeFrance, Andy Douglas, Holly Hart Rebecca McMurray, Michael Shaw Members Absent: Brian Richman, Charles Drum Staff Present: Steve Long, Linda Severson Others Present: Dennis Craven, Maryann Dennis, Al Axeen, Salome Raheim, Tracy Falcomata, Arvind Thakore, Bharat Kolhar Steve Rackis, Gillian Fox, Suellen Novotny, Laura Dowd, Crissy Canganelli, P. Kelley, M. Strechen, Tom Walz, Bill Reagan, Sandy Pickup, Ron Berg, Heidi Cuda, Sharon Locke, Brian Loring, Kristie Doser, Charles Eastham, Bob Burns, Deb Briggs, Bill Warner CALL TO ORDER: Anthony called the meeting to. order at 6:10 p.m. RECOMMENDATIONS TO COUNCIL (become effective only after separate Council action): None PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA: Anthony remarked on the recent affordable housing market study and how valuable he thought the information was. DISCUSSION REGARDING APPLICATIONS FOR FY09 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME) FUNDING QUESTION AND ANSWER SESSION: Southgate Development Services (SDS) Craven said SDS was asking for $200,000 for down -payment assistance in connection with a planned renovation of the Broadway Condominium Complex. He said the request of $200,000 was to renovate one of the three buildings, and they would return to request more money to renovate the other buildings as demand and time allow. The project intends to rehabilitate the Broadway Condominiums and create homeownership opportunities through down -payment assistance to low -moderate income households. Housing and Community Development Commission February 20, 2008 Page 2 Craven said he had been in contact with lead paint testing specialists, and once he knows if the project is funded the will proceed with testing. He also said they have done Davis Bacon (federal labor provisions) in the past, and they are in a position to comply with the regulations. In addressing a comment about their application not specifying a grant or a loan, Craven said he was leaving it up to the City. Crane asked if the project would still be viable if the funds weren't awarded. Craven replied "maybe," and explained they would still explore it, but the price point for the condos would be $5,000410,000 higher per unit. Anthony asked if they would be able to do a longer period of affordability than five to ten years. Craven said they would be open to suggestions from the Commission, but their objective is to get more stability in the neighborhood. He added they are exploring the possibility of covenants that would require a renovated unit stay owner -occupied for five to ten years. Anthony inquired about the cost estimates for rehabbing the building and how lead paint abatement issues may impact the price. Craven said they are hoping, because of the age of buildings, that lead -based paint won't be an issue, but if it is, the cost of the units may change. The Housing Fellowship CHDO Operating Dennis explained the first of their three applications was for CHDO operating funds, which would provide operational support for the Housing Fellowship. She explained the organization is the only one in Johnson County that provides permanent affordable rental housing, the only one that provides assistance for first-time homeownership in the form of a community land trust, and they have a partnership with US Bank to help very low-income households secure loans for rental deposits. Dennis responded to staff notes, saying the Housing Fellowship does have a plan to become financially stable in subsequent years by securing developer's fees for new projects, establishing well -funded maintenance reserves, and continuing good property management practices. She said if the funds are not awarded, the Fellowship would secure a line of credit for operations that would be repaid with future developer's fees. Anthony asked how long the Housing Fellowship had been in existence, and how many times they had requested operating funds. Dennis said the Fellowship had been in existence since 1990, and has asked for operating funds twice. Crane asked what last year's funds were used for, and she replied that they were partially used for hiring a full-time financial manager. Housing and Community Development Commission February 20, 2008 Page 3 The Housing Fellowship —Pre -Development Loan Dennis said the second application, for $15,000, is for the pre -development costs in preparation for a low-income tax credit application. She said some of the costs of the pre - development include architectural fees, environmental assessments, engineering, etc... She addressed staff s concerns on if the Fellowship would be able to secure land for the development, and she said they had signed purchase agreements for 18 single-family detached lots with expected acquisition in September 2008. Long told the Commission that this was the first time they have submitted a pre -development application, and the recent Market Analysis encourages such loans. Eastham noted that tax credits are the largest single source of funding for affordable rental housing in the country. The Housing Fellowship Rental Dennis said the application was for funds to acquire property. She said the allocation would be combined with their FY08 allocation. She noted the highest priority of the Affordable Housing Analysis was for the creation of more affordable rentals. She said the Fellowship has a long and successful history in the community, and they currently own and manage 133 rental units in Iowa City and Coralville. Dennis said if funding were not awarded, the project would probably not continue. In addressing staff questions, Dennis said expenses that are included in their miscellaneous operating expenses are: utilities, lawn care and snow removal during the brief time the homes are not occupied. McMurray asked if the project could go forward with partial funding. Dennis said the result would probably be fewer units, but fewer units do not mean less work in putting a viable project and application forward. Eastham added that fewer units would mean the Fellowship, and the City, would have failed in meeting the recommendations of the Affordable Housing Study. He cited the study, saying the community needs to produce 25-30 units a year over the next 30 years to meet the need for affordable housing. Commission members asked about the Fellowship's decision to use scattered sites for the development. Eastham noted several newer developments on the south side of town, and the affordability of those lots as compared to elsewhere. Housing and Community Development Commission February 20, 2008 Page 4 HACAP Transitional Housing Axeen said that while HACAP serves six counties, this program is only in Iowa City. He explained the organization works with people who are homeless, but with some assistance through various services those individuals are able to enter transitional housing. He said HACAP works with many victims of domestic violence. Axeen said the program is funded with some federal help, including block grants, but overall, their finances are lean. He addressed staff concerns about lead -based paint, saying they regularly test the properties they get, and added HACAP has crews available in Cedar Rapids that do mitigation and testing. Long explained a non-compliance issue in HACAP's FY06 HOME award, saying the program didn't spend all the original money because there wasn't enough to buy a fourth unit and HACAP has not made payment based on the agreement. He said staff was working with HACAP to consider their request for revised payment terms. Anthony asked about the specific proposal, and Axeen said through this proposal they are planning to buy three units, but the property has not yet been identified. Shaw asked why HACAP was targeting census tracts five and 13. Axeen said those were the areas where they could find reasonably priced condo units. Long asked where supportive services come from, and Axeen said they are from CSBG. Anthony asked about the project's budget, noting expenses have exceeded revenue in the first three years. Axeen said the issue was a result of property taxes. Axeen told Commission members that families in need could stay in the transitional housing for a maximum of two years, unless there is a compelling reason for a short extension, such as an injury or completion of an educational program. He said the biggest goals of the program -are for families to save money, get clear of their debts and fines, and give them the skills to survive. Isis Investments LLC Rental Raheim addressed staff s questions to the Commission. She noted that in order for the affordable housing market to be met, according the Affordable Housing Study, a significant contribution by the City would be needed. She said her project is designed to be a cost effective and sustainable model for the private sector, and as a result, loan deferment and subsidy are needed to keep costs down. She said a loan deferment would allow the loan to be repaid after sufficient capital had been obtained. She said the subsidy is needed to cover some of the initial costs of home purchasing. Housing and Community Development Commission February 20, 2008 Page 5 In addressing other staff questions, Raheim said expenses included in Isis's miscellaneous expenses include: legal fees, advertising, cleaning, supplies, maintenance, utilities, and costs during vacancies. She noted that households would not need Section 8 Vouchers to rent the units, nor is the proj ect's viability dependent upon renters having the vouchers. Raheim told the Commission she had no doubt Isis could find appropriately priced properties to purchase in the areas encouraged by the City Council. She noted that on Feb. 20 there were 5 homes that met the qualifications of price range and were in the encouraged census areas. She said she only expects there to be more homes on the market as the weather improves. Shaw asked about Raheim's other projects. She said Isis and Isis members currently have three other properties. Anthony asked about the expected costs of renovation. She said Isis was comfortable with the $4,000 price point they have indicated on their application. She also agreed with Anthony that Isis would consider increasing the term of affordability. Chauncey Swan LLC Homeownership Burns, manager of the Chauncey Swan partnership, spoke to the Commission about their application regarding site acquisition for the proposed Chauncey Swan apartments. He said the downtown site is the location of the old Greyhound Bus Station. Burns said the site, currently owned by the City, is ideal for an affordable housing apartment building because it is across the street from a recreation center, close to the library, a grocery store, the Community Mental Health Center and bus routes. Burns said the property was a diamond in the rough and under-utilized. He said the purpose of the application was to accomplish three key elements: an environmental review of the property, site planning, and to negotiate a lease with the City. Burns spoke about how one of the key stumbling blocks for affordable housing in Iowa City is finding an appropriate site that is available. He said they see a lease as ideal because the City would retain long-term ownership of the property. He said the proposition had not yet been discussed with the City Council, but he sees HCDC as the appropriate place to bring the issue to the City. Shaw asked if there would need to be zoning changes for the proposal to go forward. Burns said the property is currently zoned adequately for what the application proposes, but he wants the project to be reviewed by Planning and Zoning. Long said the building could be much larger than proposed. Burns said his firm chose 40 units because of parking restraints. Long also said staff initially thought a large part of the property was in a flood plain, however, it turned out only a small corner was in a flood plain area. He said the use of federal funds to build in a flood plain is prohibited. Crane asked if the former service station's fuel tank was still underground. Burns said they don't yet know, but that would be investigated if and when the project moves forward. Shaw asked about the logistics of moving the electric substation on the property, and Burns said he thought it was Housing and Community Development Commission February 20, 2008 Page 6 possible, but expensive. Shaw asked about the potential future tenants, and Burns said they would have to meet the requirements of the low-income tax credit. He said they see the potential project as family housing, rather than restricting it to the elderly. He said all the units would be assessable to people with disabilities. Burns said restrictions would prohibit rental to students, except under certain circumstances. Douglas mentioned the Bicycle Library, which is currently operating out of one of the buildings on the site. Burns said it would be potential for the non-profit to stay in the lower level of the apartment building if that's something the City would like to negotiate. Dolphin International LLC Homeownership Thakore responded to staff questions about their budget, explaining the money they are requesting is not for the remodeling project, but rather for mortgage assistance for the residents who are going to live there. He also addressed concerns about lead mitigation, saying they have an environmental team that takes care of all such problems before the project goes forward. In response to staff s questions, he said they are not going to provide mortgages for potential homeowners, but he said he has spoken to most banks in town about FHA loans. Thakore indicated the project would go on with partial funding, but it would limit homeowners who could receive down payment assistance. Long asked if Thakore could describe some of the proposed improvements. Kolhar noted there was much work to be done with improving insulation, addressing City violations including stairways, exposed electrical cabling, and sprinkler systems. He said the aesthetics also needed to be addressed to make the building look warmer and more inviting. Kolhar said the project is being designed in a number of phases, but eventually all the units will be made into condos. Douglas asked about the net loss of 43 total units by the end of the rehabilitation, and Thakore said no one who wants a condo would be displaced because there is sufficient vacancy in the buildings. McMurray asked if they would consider a longer period of affordability, and Thakore said they were open to anything that helped the residents. Anthony asked if the average of $25,000 per unit for remodeling was a bit low, and Thakore and Kolhar said because they do so many large projects they are able to keep the costs of materials down. Iowa City Housing Authority Affordable Housing Briggs pointed out that while CITY STEPS focuses on rentals, the recent Affordable Housing Survey shows the need of affordable owner units and rentals will be close to the same level in the near future. She felt the CITY STEMS priority of the program would be upgraded once the results of the most recent survey were integrated into the evaluation framework. Housing and Community Development Commission February 20, 2008 Page 7 Briggs addressed staff s question about why they are asking for an exception to the City's policy on the period of affordability, and she said the amount of the loan ICHA is proposing is less than HOME's requirements for those regulations —a five-year period if the amount being awarded is $15,000 or less. She explained the down -payment assistance program is looking at giving a forgivable loan over five years with an amount not to exceed $10,000 (or 10 percent of the purchase price). She said if the loan isn't forgivable, and the property is 100 percent financed, the terms for the applicant aren't as favorable, and the payments aren't as affordable. Briggs told Commission members that when people talk about homeownership, it's not just about what it will take to get a family into a home, but also what it takes to keep the ownership sustained. She said research shows that when homeownership ratios are 97 to 100 percent, as opposed to 90 percent, the default rate increases seven -fold. Briggs sited a study of vital occupations in the City and what kinds of homes those people could afford without assistance. She said an office manager could only afford an $82,000 home; an elementary school teacher could afford a $62,000 home. She noted that local rents are at levels that just, don't allow people to save for down payments. Briggs responded to staff s concerns about lead -based paint, saying the $500 fee for inspection would be deducted out the applicant's forgivable loan if their home were built prior to 1978. Briggs said if the program were fully funded they would be able to serve 3 5 families, and she didn't know if it would go forward on partial funding. She cited the administrative burden of the application process as an issue. Briggs said if an approved buyer finds an appropriate property, the City would place a lien on the property. After five years, ICHA would go to the City Council and have the lien released. If the owner sold the property prior to five years, the City would be paid back for the loan at closing, and the lien then would be released. She said owners would have to file an agreement that would require owner occupancy, and it would not be possible for the owner to convert the property into a rental or do a quick flip for profit on the home. Long noted that every summer the City does a check on the residents of properties involved in City programs, and if the owner has rented the space out the City demands immediate repayment of whatever assistance the property owner received. Iowa City Housing Authority TBRA Rackis distributed a written response to staff questions, and asked the Commission for questions. Crane asked how long it would take to cycle through all 841 families on the housing voucher waiting list. To give perspective, Rackis said they are housing approximately 100 families over the HUD baseline with the use of TBRA funds. With the use of the Housing Choice Voucher Program and the TBRA funds they are currently housing 1,300 families. Right now the waiting list has 1,400 families that meet the residency Housing and Community Development Commission February 20, 2008 Page 8 requirements. He said they are currently processing applications of residents that were submitted in March and April 2007. He said the wait for elderly, disabled, or families with children applying from outside of the community is about five years. Rackis said if the ICHA receives partial funding they would have to limit the length of rental subsidy to qualified applicants to one year rather than two. Rackis added the TBRA vouchers are only good in Johnson County, unless HCDC or the City Council made the decision to limit the voucher use to only the city limits. In response to staff s question about the number of accessible rental units, Rackis said 1,950 were available. Shaw suggested some of Rackis's handouts to Commission member's be returned because he didn't feel the names of all the program recipients needed to become part of the HCDC public record. Other members agreed, and returned the handouts. Anthony asked about residency requirements for the program. Rackis said they were using the Housing Choice Residency Plan, as approved by the City Council. Dolphin International LLC Playground Thakore said the existing playground equipment in the area was installed in 1978-79, and is in poor shape. Kolhar said they might be enclosing about 10,000 square feet with a fence, put in a sidewalk to connect the housing development and the road to make the entire area easily accessible. Thakore later said they might not install the fence unless the City requests it. Kolhar said the reason the fence is considered is to block children from the pond on the property. Long explained that one of the stipulations of the application is that while they may have fencing, the gates wouldn't be locked, thus making the space publicly available. Crane asked for a quote on the price of the proposed playground equipment. Thakore distributed three price quotes. McMurray asked about the accessibility of the equipment for children with disabilities. Thakore said the proposed designs follow the ADA guidelines. LIFE Skills Transportation Fox addressed Staff s questions about LIFE Skill's average daily attendance, saying its 5-6 individuals, but she expects that number to increase to a minimum of 8 people per session. She also said they recalculated their east and west routes within city limits (eliminating the mileage to transfer individuals outside of city limits), and that lowered their grant request from $4,336 to $3,848.25. She said the result of partial funding would be LIFE Skills transporting individuals only until grant funding ran out. Anthony asked how the program had been funded in the past. Fox said they started with a United Way grant to build out the facility; they have also used service dollars from the state Housing and Community Development Commission February 20, 2008 Page 9 as well as county MHD money. She said they are beginning to see Medicaid funding through home -based rehabilitation. VNA Operations Novotny told Commission members the grant the VNA is seeking is to provide nursing assistance to people with mental illness in their homes. Novotny said the VNA would match the proposed $5,000 grant with state money. She responded to staff questions about how the VNA differs from other local mental health services. She said the VNA differs from other nursing providers in that it goes to patients' homes, sets up their medication, and does health assessments. Novotny told Commission members it was not encouraging on either a county or state level that the VNA would be able to generate enough revenue to support its own mental health services. She said the VNA is in the position of constantly seeking grants. Shaw asked about Medicaid funding for the program, and Novotny explained had seen some reimbursement for patients in the MERIT program; however, Medicaid only paid $55 for a home visit while the VNA's cost for the service was $102. She said they were loosing about $29,000 a year from those patients, and: they were unable to match that loss with state or local grants. As a result, she said they were forced to give up MERIT as a fee source. Local Foods Connection Operations Dowd told Commission members the Local Foods Connection (LFC) purchases produce and meat products from small, local farms and donates the goods to low-income local families. She said they are beginning their 1 oth year of operation. In response to staff questions, Dowd said the LFC purchases CSA (community supported agriculture) shares, which are a promise of a box full of fresh food for about 20 weeks. The size of the CSA share purchased for a family depends upon the size of family. Per week, the sizes vary from a quarter of a bushel for an individual, a half a bushel for a family of two to three, three-quarters of a bushel for a family of four to seven, or one bushel or more for a large agency, such as the STAR program of the Shelter House. Dowd said nutrition education has been or will be provided by local medical students, an individual working in public health, and registered dieticians. In terms of the organization's long-term financial sustainability, Dowd said in 2007 they began an endowment fund with the Community Foundation of Johnson County to establish a base for providing long-term financial stability. She said the fund began with $5,000. She explained the majority of LFC's funds are spent in the late winter and early spring for CSA shares, and during the rest of the year they invest remaining funds at the University of Iowa Community Credit Union. Dowd said if the project is only partially funded the executive director will continue to donate her time, but she may be forced to take on a part-time job, which would take her away from Housing and Community Development Commission February 20, 2008 Page 10 her responsibilities at LFC. She said once a fairly -compensated executive director position is established, the organization will look into hiring additional employees. Shaw asked about the number of volunteers involved in LFC, and Dowd estimated that 30-40 people volunteer over the course of a year, not including approximately 250 University students fulfilling requirements for their Introduction to Environmental Science course. Shelter House —Operations (STAR program) Canganelli said the application for $7,500 was to work towards the cash match for the Shelter House STAR program. She said the Shelter House has been successful in past years in raising the cash match amount. She said this year the Shelter House is in an especially good position because the Shelter House has been awarded a gift for endowing the STAR program, and through the endowment they will be able to generate about $3 5,000. She added a significant amount of the cash match is from private fundraising. Canganelli said everyone who comes through the doors of the Shelter House is a beneficiary of the program because the funding is used to fund all activities that occur at Shelter House throughout the day. Without the STAR program, the Shelter House would close its doors from 8 a.m. to 5 p.m. She said they are more than 200 percent over HUD's expectations for the number of long-term clients served. As far as long-term plans to generate funding, Canganelli said the Shelter House would continue to provide information to the community, continue to demonstrate their positive impact on the health and safety for the community, and seek local support. Compeer Operations Kelley explained that Compeer is run almost totally through volunteer work. She said they have no regular source of funding and receive all of their money through fundraising. In response to staff questions, Kelley said each volunteer must commit to at least one year, while most have stayed for over four years. Kelley said the turnover in directors seemed to be a result of people being hired away or moving away. Extend the Dream Foundation Operations Walz told Commission members EDF supports ten small businesses that are owned and operated by people with disabilities. He said the organization also provides support for a rent - to -own home where three handicapped people live, and EDF has raised money for the past six years for a major documentary that is now being shown in film festivals. Walz said the Foundation is essentially an all -volunteer staff except for some accounting help. He said the grant request is to help pay for a consultant and some staff time to keep the system running, which would address staff s concerns about keeping the program in compliance with HUD requirements. Housing and Community Development Commission February 20, 2008 Page 11 Crane asked what EDF had planned for long-term sustainability of their bookkeeping system. Walz said he would continue to raise funds in addition to the regular, stable contributors. He also said they have established an endowment fund to help with funding of the operation in the future. Arc of Southeast Iowa Operations (''Supported Employment) Reagan said the Arc has been headquartered in, and serving, Iowa City for 51 years. He noted the grant request was to facilitate employment services for six individuals with special needs. He said each person would receive 125 hours of employment coaching. He added the six would not qualify for any of the other usual funding streams or support. In response to staff s question about other sources of funding, Reagan said money was coming from private donations. Douglas asked what the result of partial funding would be, and Reagan said they would still proceed, but adjust the number of coaching hours, or try to solicit additional donations to support the project. Free Medical Clinic Operations (Pharmacy Assistance Program) Pickup addressed staff s questions, and told Commission members it is always a struggle to find funding. She said the pharmacy program might eventually get some state funding, but the outlook was uncertain. She said the implications of partial funding might be decreased pharmacy hours for the pharmacy technician. Shaw asked if other clinics in town affect the FMC services. Pickup said she didn't feel they affected the FMC client population because of economic reasons she said if the clients have to pay for care they most likely will not receive it. MECCA/ICARE-Operations/Transportations Cuda told Commission members the request was for ICARE and the offering of a support group and transportation for Iowa City residents living with HIV/AIDS. She explained their clients benefit from access to transportation because often they don't get around very well for various reasons, such as mental illness. She corrected an error on the application, noting they have 13 clients that are Iowa City residents, and they hope to open up the services to everyone living in Iowa City with HIV/AIDS, not just ICARE clients. MECCA Facility Rehabilitation Berg told Commission members the request is for funding to rehabilitate their public facility. Repairs include painting, bathroom renovation, and updating to the playground area. Berg noted if the request were not fully funded they would choose the project with the highest Housing and Community Development Commission February 20, 2008 Page 12 priority. He added the bids they have received for the remodeling include the Davis -Bacon wages. Anthony asked which projects would be the priority, and Berg said the bathroom remodeling, with the playground being the second priority. Extend the Dream Foundation Facility Rehabilitation Walz said in 2006 the EDF received a CDBG grant to help them buy a building at 2203 F Street. The building now houses three of the EDF shops, as well as an e-commerce program. Walz said the building has had issues with the upper roof leaking and the gutters being in disrepair. He indicated they've had three bids for the cost of repairs, and they would like to proceed with those repairs in order to protect EDF investment in the property. Anthony asked about EDF compliance with the City Housing inspection, and Walz said the only thing they have left to do is install covers over the florescent lights. Anthony also asked if the facility repairs would be covered by insurance, and Walz replied that they are not because they are just the result of age and normal wear. Shaw asked if the issue with the lighting might affect the possibility of receiving a CDBG grant. Walz said he could talk with the inspectors about their plans to convert the fluorescent lights to energy efficient lighting thus eliminating the need for the expensive covers. Arc of Southeast Iowa Facility Rehabilitation Reagan explained the Arc has people coming and going throughout the building all day and into the evening. He said the back door, which, because of the parking lot, functions as the main door, is in need of lighting for safety purposes. He said much of the Arc's staff is young and female, and some of the staff and many of the clients use wheelchairs. Reagan said they have not yet had a problem because of the lack of safe lighting, but he feels it is important to be proactive. He said they would also install an alarm system on all the doors. He said if they received partial funding they would still proceed with the improvement and fund it through alternative methods. Crane asked which project was more important, and Reagan said the lighting. Free Medical Clinic Building Acquisition Warner said the FMC moved to its new location about two years ago, and they have found both the location, and the building, to have worked well. He said the FMC Board has determined the FMC should purchase the building, and the current owner has indicated an interest in selling. He said the FMC carries a minimum six-month operating reserve, so it would be possible for them to initially contribute more towards the purchase price. He said the lower level of the building is currently being rented out to several parties for storage, and the FMC would plan Housing and Community Development Commission February 20, 2008 Page 13 to continue renting the space out until the time came when they needed the space for expansion of their services. Warner said the requested amount of $300,000 represents the difference between the current anticipated purchase price and the amount that can be supported by a loan where the monthly payments are equivalent to the FMC's monthly lease payments. He said they do not currently have a letter of commitment from a bank for the funding, but they do have verbal confirmation from Hills Bank. Warner said the current rent is $1650. He said initially there would not be a monthly cost savings because of the loan, but the FMC would begin immediate fundraising to retire the debt as quickly as possible. Crane asked about the main source of funding for the FMC, and Pickup said a third of the funds come from Johnson County, another third from the United Way of Johnson County, and the remainder are made up with grants, donations, and fundraising. Anthony asked about the rental income of the lower level, and if the income could be used to make up the difference if they don't receive full funding. Pickup and Warner were unsure of what the current landlord charges for the storage space. Warner said the FMC Board has approved Cook and Associates to do a formal appraisal of the property, and they expect it to be dome in four weeks. Warner said if the FMC had to dip into their six month reserve to purchase the property, the Board has discussed temporarily using two to three months worth of reserve, which would be about $75,000-$100,000. Twain Elementary, ICCSD Locke distributed price quotes for the play equipment. She also addressed the possibility of the school district entering into an agreement with CDBG to maintain the improvements over a 20-year compliance period, saying the ICCSD would consent to enter an agreement, but would request to maintain the equipment over the playground's normal useful life, or 20 years, if fully funded. She said the warranty on the equipment ranges from 100 years to three years. In response to Staff questions, Locke said the installation of the project is fully volunteer, so she didn't think Davis -Bacon wages would be applicable. Locke said the ICCSD is fully aware of the environmental review regulations and is willing to comply. She also said the ground -cover for the playground would be woodchips because that is something the ICCSD would replenish and maintain over the life of the playground. Long said there was a similar successful project a few years ago with Wood Elementary School. Anthony asked if the playground would be open to the public. Locke said it would, and the equipment would be ADA accessible. Housing and Community Development Commission February 20, 2008 Page 14 Long and Anthony noted the playground would be a perfect candidate for a PIN grant, but Locke said there was no neighborhood association in the area, which is a requirement for a PIN grant. Neighborhood Centers of Johnson County Facility Rehabilitation Loring said NCJC was back to request funding for items that were in last year's application that did not get funding, including replacing the back deck, window replacement, a small retaining wall, a dumpster screen, and parking lot repairs. In response to staff questions, he said they would continue if the grant were only partially funded, noting the windows have first priority, followed by the playground. He said they are also looking for other funding, but have found that these particular projects are not high priorities for many other funding sources. Loring said they have Davis -Bacon cost estimates, and that is how they arrived at their grant request. He indicated the NCJC does have a reserve that is available, and they have used it before for capital projects such as landscaping and door replacement. He said the FY08 funds have not yet been expended because of a negotiation issue with the owners of land on which the NCJC building sits. Long said he expects the lien issue to be resolved shortly. Domestic Violence Intervention Program Doser told Commission members that DVIP has been a busy building, sheltering more than 4,500 women and children since 1993. She said fundraising is already in place, and because they have been working on repairs bit by bit, they have several donated improvements waiting, such as a donated washer and dryer, electrical hand dryer units, and the front door security system monitor. Doser said the quote on the fence includes labor from two volunteers. She said the fence height would increase from six feet to eight feet, and it would be solid to prevent anyone from seeing though it from an angle. If the project were partially funded, Doser said DVIP would have to look at priorities. She said the current priorities include shower rehabilitation, the security monitor for the front door, and the fence. Motion: Shaw made a motion to adjourn the meeting at 10:20 p.m. Crane seconded it. The motion was approved 6:0. MINUTES DRAFT HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 EMMA HARVAT HALL, CITY HALL Members Present: Jerry Anthony, Steve Crane, Marcy DeFrance, Charles Drum, Holly Jane Hart, Rebecca McMurray, Brian Richman, Michael Shaw Members Absent: Andy Douglas Staff Present: Tracy Hightshoe, Steve Long, Linda Severson Others Present: Bill Reagan, Deb Briggs, Steve Rackis, Sharon Locke, Laura Dowd, Sandy Pickup, Ron Berg, Heidi Cuda, Arvind Thakore, Suellen Novotny, Tracy Falcomata, Maryann Dennis, Charlie Eastham, Jody Braverman, Al Axeen RECOMMENDATIONS TO COUNCIL (become effective only after separate Council action): None CALL TO ORDER: Chairperson Anthony called the meeting to order at 6:30 P.M. PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA: None. STAFF/COMMISSION COMMENT: Hightshoe thanked the commission members for the time and effort that they have put forth in reviewing the applications. She noted that everyone has the latest ranking worksheets now that include Michael's scores. The addition of Michael's scores did change some of the allocations and priorities. She noted that she was passing out the updated budget from Dolphin and information submitted by Dolphin regarding their architect's firm and past experience. Hightshoe noted that the purpose of tonight's meeting is to look at how other commission members scored different projects and how they allocated funds for these projects. She noted that if three members allocated a large amount on a particular project, but four members allocated $0, that they might want to discuss the rationale behind the decision amongst the commission members. She noted that if members have questions they need HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 answered this evening, many of the applicants are present and can respond. If an applicant is not present, staff will email their questions and get responses prior to the next meeting. The next meeting is the March 27 meeting where the commission will formulate their formal recommendations that go to Council. Hightshoe stated if any member makes a change to their rankings or allocations to submit this change to staff by next Thursday, the 20. Staff will complete a revised average allocation/ranking sheet and mail with the March 27 packets. Anthony then spoke briefly about the City's housing study, and stated that in upcoming discussions he would like to see some policy changes. Hightshoe noted that under the Housing Fellowship (THF) CHDO project, THE requested $50,000. Due to HOME program rules the allocation can't exceed $30,685. She noted that if the commission wants to fund the difference, they would have to take this out of the CDBG public service budget. Hightshoe then noted that after the recent Q&A session, Life Skills dropped their request down to $3,848. Hightshoe requested that when emailing their recommendations to her, please note by bold or italics which allocation/rank they changed. This saves time so that staff does not have to review each allocation to determine what changed. Anthony asked about a "conflict statement" that Sue Dulek, Legal, had them read last year prior to beginning their discussions. Hightshoe noted conflict of interest issues were discussed at the March 131h meeting. If any member feels that he/she has a conflict of interest they were instructed to contact staff to discuss. Hightshoe noted that McMurray had asked about this, as she is employed by MECCA. After review by our legal department and staff, it was determined not to be an issue in her case. Anthony asked if, hypothetically, if you had a Section 8 voucher would that be a conflict of interest as the Housing Authority applied for tenant based rent assistance. Hightshoe noted that based on a past member it was determined not to be a conflict as the member did not receive tenant based rent assistance as identified in the application. The person would not benefit from the award of funds as proposed in the application. She stated she would confirm with legal. If the determination was different, she will inform the commission. DISCUSSION REGARDING FY09 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIP PROGRAM (HOME) REQUESTS. Review Project Rankings: Anthony asked that they begin with housing projects as they involve more money, and then they can work their way down the list from there. Chancey Swan LP - Richman stated that he is not at all opposed to the project conception for Chancey Swan, but he questioned if City Council should decide on some policy issues first before HCDC makes a funding recommendation. He stated that he had a concern about spending their limited housing dollar on a project before they know what will occur. Long noted that since the land is City owned, nothing can be done without a public process. Hightshoe noted that the City could use other available funds to pay for planning costs such as environmental and pre -site development costs. For almost any 2 HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 type of development, the City would have to invest in these types of costs to determine project viability. This led to a brief discussion by members regarding housing in the downtown area. Long noted that the City did purchase the St. Patrick's Church parish land this past Tuesday, and that they plan to put in a parking ramp with affordable housing on the upper levels. Members continued to discuss housing issues, with Long and Hightshoe responding to questions. Dolphin International LLC was discussed next. Richman noted that he had some concerns and questions regarding this project. Shaw discussed briefly how he arrived at his allocation scores, and why he did not have anything for Dolphin. Hart noted her allocations and stated she removed from those places she felt it would be the least painful. She noted that she would like to hear other's reasonings at how they arrived at their numbers before they start reallocating funds. Anthony noted that a representative from Dolphin was present to answer questions. Thakore then spoke about this project, stating that it was initially figured for the entire project, but the new numbers are for Phase 1 only, the 89 units. Therefore, he stated that private financing went to $4,314,000 for the first phase. He then reviewed some of the other changes. Anthony and other members then asked questions regarding the Dolphin project. Concerns centered on the fact that this project is quite large and they agreed that they feel they need more information. The discussion continued, with members sharing their concern about loans being available for lower -income households. Commission asked staff to follow up with the applicant regarding who the principals are, what are their roles and their prior experience (scope and size). Also received a written request to supply the contact information of the construction lenders from the identified projects. Briggs, Iowa City Housing Authority (ICHA), then stated that one thing she would like to let the commission know is that the ICHA only has about 20 vouchers at Lakeside currently. She noted that when they are talking about the numbers that would actually use a self-sufficiency program or voucher to purchase, there are only about 20 at Lakeside. She stated that this does not mean that other voucher holders could not chose this location. HACAP Transitional Housing. Crane began by stating his concerns. He stated that one concern is that HACAP did not pay back the last funding. Hightshoe explained the HACAP program, stating that they did not utilize all of the funds as they did not have enough to purchase a fourth unit. HACAP returned the funds that would have gone for the fourth unit, which changed the structure of their payment plan. HACAP has requested an amendment to change the loan to a conditional occupancy loan with no repayment. Staff advised HACAP that they will consider the request after HACAP submits expenses/revenues regarding the three specific units under the FY06 agreement. It was noted that Al from HACAP was present if members had questions. He briefly explained how the funding for their program works and that they only receive 30% of the household's income for rent. Many of the families are homeless before they enter their units. Hightshoe further explained the budget for this project. She stated it is difficult to determine if a repayment can be made as HACAP in the last few years has purchased newer condo units that have condo association dues. This is a large expense in their 3 HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 proforma. Depending on what the condo association dues pay for, other expenses may be reduced and the project may be able to repay a portion of the loan. ICHA — Homeownership. McMurray spoke to this, and stated that the 5-year affordability was the main issue for her. She feels that this is a very short time period. Briggs spoke to this, stating that there is a similar program that addresses the next five years, giving a ten-year period to this program. She did add that they are not against extending this program out, but that the five years is the optimal time for this program. Crane stated that he believes this is a good method to get people into housing. Richman was in agreement about the 5 years. He stated he has to balance the project benefits as a tax payer. Hightshoe noted that under the recapture provision, if the home sold before the 5 years, 100% must be repaid to our program. If after five years, no payment is received. Isis Investments. Member stated that he felt this was generally a good project, but that five units seemed like a lot for this developer. Anthony stated he was concerned about the fact that this is rental housing that could be sold, and if sold, the subsidy would be around $47,000 per unit. Hightshoe noted that the tenant can purchase the unit under the HOME program. If the tenant purchased the unit the affordability provision converts from a rental project to a homeowner project. The City would have some discretion in determining the affordability period under homeownership whether to match the original affordability period or start a new period once the tenant owns the property. Anthony stated that they should encourage this type of program as they need more affordable housing developers. Southgate Development — Homeownership. Crane noted that he was one of those who gave this project a higher allocation. He stated that the fact they have already been converted to condos and that Southgate has had previous success with this type of project were strong points to him. Hart stated that she believes this is a great project, as well; however, she favored projects that she felt had more need. Shaw then spoke to his concerns, addressing the Southgate representative. He asked if there is a process or plan for working with families that have been displaced by shifting into condos or homeownership, or for some type of transition. Braverman stated they will work first with current tenants to see if they are interested in buying a unit. If the tenant (tenant of Southgate who owns the condo) is not interested they will assist the tenant in renting another unit they own at the same rent they are paying at Broadway. All tenants that wish to move will be assisted similar to the project completed at Cedarwood (south of Broadway Condominiums). The Housing Fellowship (THF) — CHDO Operating. McMurray and Shaw stated that they would be willing to make some shifts to fund this project for operating expenses. Richman asked about this project, questioning what the strategic plan calls for in the next five to ten years. Maryann Dennis responded to questions explaining the requirements they must follow in the rental assistance programs. Dennis stated they are making changes to increase their profitability by receiving developer and management fees as was not done frequently in the past. They also view CHDO operating expenses as 11 HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 another source of funds to improve CHDO viability as HUD encourages CHDO to utilize these funds. Long spoke to this and stated at the last HOME training HUD staff was encouraging that CHDOs utilize these funds. Long and Hightshoe answered CHDO questions. The Housing Fellowship — Pre -Development Loan & Rental Project. DeFrance spoke to her allocation, stating that she has no problem giving the $15,000 on this project. McMurray agreed, stating that she could also reallocate for this. Shaw then asked about priorities for the Housing Fellowship, and which of the three resources is most important for them. Dennis responded, stating that the pre -development is necessary to prepare the applications, however they need the funds to acquire the land. McMurray asked what the cost for the land is, and Hightshoe noted that there have been some updates since the original application. She noted that THE would be making a LIHTC application for 22 homes in November 2008. THE has signed purchase offers on 16 lots in Mount Prospect (approved by City Council), 4 on Westbury and 2 on Chamberlain Drive. Shaw asked for further clarification on the Fellowship's priorities, to which Dennis responded. She noted that they have to be able to buy, the land before they can go any further. Anthony suggested they address public services next, before they take a short break. Arc of Southeast Iowa. No discussion or questions. Compeer — Operations. No discussion or questions. Extend the Dream Foundation — Operations — Member stated that he likes this project, and that they always have manageable requests. Anthony stated that this request would further expand their financial capacity. Free Medical Clinic — Operations — Crane stated that he feels this is another good project that is well managed. McMurray asked for clarification on the pharmacy portion of this project, and Hightshoe stated that the medications are entirely free. The case manager completes the applications to each drug company to obtain free prescription for low-income patients with chronic illness. Life Skills Inc. — Transportation — Member noted that this is a new applicant, and that for him, it came down to other projects having a higher need for funds. Local Foods Connection — Operations — Shaw stated that he has a question on this, noting that he wanted to maximize the amount they can give to this program. Dowd explained that this request is to cover the Executive Director position's salary. She stated that they hope to slowly grow this salary and position over time, and that any allocation would be helpful. MECCA — Activities/Transportation — McMurray stated that she believes this is an important allocation, and that there are a lot of benefits with what MECCA does in their programs. Member stated that he funded the Public Facilities' project for MECCA at a higher level than the Public Services' request. Shelter House — Operations. No discussion or questions. Anthony stated that they would then take a five-minute break before addressing public facilities. (BREAK) Twain Elementary — Playground Equipment — Anthony stated that they need to address this allocation first. Crane noted that he believes this is a good project for this area, and notes that they have already raised a large portion for this project on their own. McMurray stated that she believes the neighborhood benefits, as well as the school, in a 61 HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 project like this. Anthony stated that he believes either the City or the School District should address playground needs. This led to a brief discussion of the various schools that do need assistance in obtaining this equipment. Hightshoe noted that it is school district policy that district funds are not used to acquire play structures at any of their elementary schools and that it is up to the parent teacher organization at each school to fundraise for the equipment. The school district does not take into account the income status of the neighborhood or attendance area. She stated if enough interest that HCDC could submit a recommendation or request to review this policy to the district. Arc of Southeast Iowa — Alarm System. McMurray asked staff for clarification on this type of request, and Hightshoe responded. Shaw spoke to his low score on this allocation, stating that he believes it serves the community less and the staff more. Reagan spoke to this, stating that it will benefit families and children more than it will staff. He noted that there are, for example, families and children that use the facility for programs in the evenings and on weekends quite often that have mental and physical challenges, and that any funding will help them in their safety endeavors. Anthony briefly discussed the design issues with the Arc's building on Muscatine Avenue, stating that he believes this issue should have been addressed in the redesign of the building for Arc. Reagan addressed this issue, explaining how the upper entrance has the automatic door that enables the wheelchairs, etc., to enter the building. He also explained what they were faced with once the previous business moved out. Dolphin International — Playground Equipment — Member spoke to this project, stating that he was not in favor of it as he felt it did not help the whole neighborhood and the schools, plus they do not have any funds raised towards this project. McMurray stated that she felt it would be helpful to the neighborhood, and she therefore did allocate funds for this. Anthony stated that he did recommend funding as he feels this is such an "eye sore" for the area and could use something. Due to the time and lack of representation for some of the remaining projects, it was suggested that the Commission move on to those projects that have someone currently present at the meeting. IC Free Medical Clinic — Building Acquisition. Shaw stated that if they gave Free Med what they requested, there would not be any monies left for other projects. Members discussed this briefly, asking what the minimum amount of allocation would be. Pickup spoke to this, stating that before the meeting on the 271h they will have more information regarding an amount. MECCA — Facility Rehabilitation. McMurray addressed this project, stating that she knows that the building project is a priority, but that she was trying to get the playground area funded, as well. Shaw stated that he gave this project a lower point total, stating that he questions community involvement, compared to other projects. Shaw asked some further questions regarding the MECCA facility project, and Berg spoke to each of these. This led to a brief discussion of how facilities like MECCA operate, and what other funding regulations they must follow. Domestic Violence Intervention Program — Rehab — Drum spoke to this, stating that this was the one project that he found easiest to support, due to the safety issues involved with the fence. Others agreed, stating that the funding was for a good project. Hightshoe noted that they have had some problems with DVIP not notifying them of construction, thus being out of compliance with Davis Bacon requirements. She on HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 13, 2008 briefly explained what this entails, and responded to member's questions. Members agreed that a "failure to notify" comment needs to be made on their allocation. Members asked staff some general questions regarding programs such as DVIP and Shelter House. This led to a discussion about having conditional agreements attached to these allocations. Members discussed previous applications where CDBG funds acquired or were used to construct a building; however have several issues in subsequent years due to improper design or building inadequacies. Discussed if HCDC should allocate more in funds initially to ensure a better design/better materials to prevent subsequent allocations. Discussed the building acquisition for Free Medical Clinic and if all systems were in good condition. Members wanted to know if a building inspection had been done. Members discussed if the appraisal was enough. Crane and DeFrance stated that the appraisal basically tells you what the market will pay for the building and the general condition. It is not as specific as a commercial building inspection. Staff will contact FMC to discuss. Extend the Dream Foundation — Facility Rehabilitation. DeFrance stated that she did not fund this project. She stated that she has some real concerns about putting a "bandaid" on a real problem. She took into consideration the Davis Bacon Wage Act, and stated that in looking at the bids, she saw some huge discrepancies. She further explained that she believes this is a good project; however, she believes they are putting a lot of money into this building. Shaw then spoke to the fact that some of these buildings are constantly getting repaired, and it seems as if the problem is never truly addressed. DeFrance further addressed her concerns on projects such as this, responding to members' questions and concerns. It was noted that this building is currently out of code. Hightshoe and Long responded to some questions regarding this. Hightshoe noted that staff would require that the building pass the building permit issued (original CDBG/HOME allocation) before the City would enter another agreement for this building. Members requested that EDF determine what remains to meet the building code and how much these improvements will cost. Neighborhood Centers of JC — Facility Rehabilitation. Members addressed this allocation, stating that windows are the main issue. Crane noted that the last couple of years they have requested allocations for various projects, and they are gradually getting their rehab accomplished. Members then asked general questions of what to expect at the next meeting. Staff responded, explaining what the final allocation process entails. Hightshoe noted that it is important for all members to be at the next meeting, and she encouraged them to get their revisions to her as soon as possible. ADJOURNMENT: Meeting adjourned at 9:40 PM. 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E E oL tT of 10 N W _ ,►3 a1 aEi ° a v w �p W y C p y t 0 o c U' m m ~ c t- O � C1 y .0 C C> W GJ u, L" E O ►� U y l j N 41 w 7 y Q O O M 7 a a d T T x , c a c 2 = c O � o C r d N U m M 2 w u 4u c o Q U o ,e C s E LL u m Z o o U Lu v 3 E a v (� m a o #'c w e U 2 .. ., to 1- 1- F- Q 0 0 LU .. F Z H U Q U W- -:L J 2 w 5 The commission had various questions for staff follow-up following the March 131n meeting. Please see the following responses. 1) Chancey Swan LP - Question: If the project doesn't proceed or if another entity proceeds with the project what happens with the HOME/CDBG allocation? If the project doesn't proceed or a different applicant is awarded the project, the funds become uncommitted funds. Please see the attached policy for uncommitted funds. Basically HCDC has a lot of options, however if existing and/or unfunded projects will only be considered, all applicants must be notified of the fund availability and asked to provide a written request. If new projects are being considered, HCDC must publish notice of funding availability and proceed with a formal application process. For only $18,000 in funds, staff would not encourage a mid -year application process. 2) The Housing Fellowship (THF) — THE has made a request to Council for additional funds and funds to be used for infrastructure and improvements. Their FY09 application was for land acquisition only. THE can make a separate request to Council for more funds than what HCDC recommends and can also make the request for funds to be used for utility installation. HCDC must only review the application that was submitted. Substantial changes in scope or funding from the submitted application must be taken directly to Council. The request to Council asked Council to consider other ways to finance the project in addition to CDBG/HOME funds such as general obligation bonds or a loan from reserves. 3) Free Medical Clinic — Question: Has the building had an inspection? Are all building systems in good condition? FMC will proceed with a building inspection and try to have this done before the 27tn 4) Extend the Dream Foundation — What issues remain from the original building permit (when acquired with CDBG/HOME funds)? Tom will contact Housing and Inspection Services to request a follow up inspection. Based on the items still remaining, Tom will get price quotes to determine what and how much in funds is needed to meet the city's building code. He hopes to have this done before the 27tn. Staff will not be able to enter another agreement for this site until the pending violations are resolved. 5) Dolphin International LLC. — Question: Who are the principals, what are their roles and their prior experience (size and scope). Staff also requested contact information about their construction lenders on the projects identified. Steve emailed Dolphin's response earlier. Please let me know if you have not received the information. cdbg-uncommittedf unds.doc (35 ... I received revised allocations from Steve, Michael and Charlie. If anyone else submitted one, please let me know. I hope to send out the packets on Friday. Thanks, Tracy "1908400 12/04 POLICY FOR ALLOCATION OF UNCOMMITTED CDBG AND HOME FUNDS (Funds that become available to the program after initial allocation either through windfall income, project cancellation or additional funds provided by HUD.) The Housing and Community Development Commission (HCDC) will determine if: 1. Existing projects that did not receive full funding will be considered. 2. Projects that had submitted applications but did not receive any CDBG or HOME funding will be considered. 3. New proposals will be considered. 4. Funds will go to the Contingency Fund. If existing and/or unfunded projects are the only projects that will be considered, the applicants will be notified of the availability of funds and asked to provide a written request for funds and how they will be utilized to fund their original request. If new projects are being considered, HCDC must publish notice of funding availability and proceed with a formal application process. If funds are allocated to the Contingency Fund, no formal process is necessary other than the City Council approval. In all cases the public must be given the opportunity for comment on the proposed use of funds, either at a HCDC meeting or a Council meeting. (See Contingency Fund Use Policy for use of these funds) CONTINGENCY FUND USE POLICY The Contingency Fund can be utilized for the following purposes: a. Cost overruns of existing CDBG and HOME projects. Cost overruns of greater than $50,000 or 25% of initial project budget must be approved for eligibility by HCDC. b. Funding for new projects that are considered an emergency or urgent need. Applications for new projects for the use of Contingency Funds must be provided to the HCDC at its regularly scheduled monthly meeting. HCDC will evaluate the application for compliance with emergency or urgent need, eligibility for CDBG and HOME funds and availability of Contingency Funds. Projects recommended to be funded under Contingency Funds must then be formally approved by the City Council after the public has had opportunity to comment. Ppdcdbg/cdbg-uncommittedfunds.doc