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HomeMy WebLinkAbout12-18-2008 Housing & Community Development CommissionAGENDA HOUSING AND COMMUNITY DEVELOPMENT COMMISSION LOBBY CONFERENCE ROOM, CITY HALL THURSDAY, DECEMBER 18, 2008 6:30 P.M. 1. Call Meeting to Order 2. Approval of the November 20, 2008 Minutes 3. Public Comment of Items Not on the Agenda 4. Staff/Commission Comment 5. Public Hearing & Approval of the FY08 Consolidated Annual Performance & Evaluation Report (CAPER) 6. Old Business • Discussion of a HCDC Sponsored Event Focused on Affordable Housing • Review and Discuss Amendment to CITY STEPS as it Relates to Changes in Project Financing 7. Monitoring Reports • Hawkeye Area Community Action Program — Housing (Douglas) • Iowa City Housing Authority — Downpayment Assistance & Tenant Based Rent Assistance (McMurray) • Compeer Program — Operations (Hart) • Extend the Dream Foundation — Operations (Douglas) • Neighborhood Centers of Johnson County — Facility Rehab. (Crane) • Shelter House — FY04 Land Acquisition (Hart) 8. Adjournment r ,z,Iz, -4k CITY OF IOWA CITY MEMORANDUM Date: December 10, 2008 To: Housing and Community Development Commission From: Community Development Staff Re: HCDC Meeting on December 18, 2008 The following is a short description of the December agenda items. If you have any questions about the agenda or if you are unable to attend the meeting, please contact Tracy Hightshoe at 356-5244 or by email at tracy-hightshoe@iowa-city.org. Public Hearing & Approval of the FY08 Consolidated Annual Performance Evaluation Report (CAPER) The CAPER is a HUD required document that the City must typically submit to HUD within 90 days of the end of the plan year. Due to the extreme flooding events in eastern Iowa, HUD gave the City an extension to file the CAPER. The CAPER must be submitted to HUD by December 31, 2008. The report describes the federally funded activities undertaken by the City and its partners, and the accomplishments for the federal fiscal year 2007 (City FY08). A draft of the CAPER is included in your packet for your review and comment. At this meeting, we will be asking HCDC to approve the document for submission to HUD. Discussion of a HCDC Sponsored Event Focused on Affordable Housing This agenda item was suggested by a HCDC member. At the meeting we will discuss what type of event could be held to bring community awareness to the issues surrounding affordable housing. Review and Discuss Amendment to CITY STEPS as it Relates to Changes in Project Financing At last month's meeting, it was suggested that staff present language to amend CITY STEPS to address changes in project financing requested by subrecipeints after Council approval. Please see the attached draft. Upon review, HCDC may move to approve (with any recommended changes) and send the recommendation to Council or choose not to pursue the amendment. If HCDC recommends the change to Council, Council will consider the amendment at their upcoming January meeting. If approved, the language will be added to CITY STEPS. Monitoring Reports • Hawkeye Area Community Action Program — Housing (Douglas) Contact Al Axeen, 337.5765 x5007 • Iowa City Housing Authority — Downpayment Assistance & Tenant Based Rent Assistance (McMurray) Contact Steve Rackis, 887.6065 • Compeer Program — Operations (Hart) Contact Michelle Struchen, 338.7884 x245 • Extend the Dream Foundation — Operations (Douglas) Contact Tom Walz, 530.8765 • Neighborhood Centers of Johnson County — Facility Rehab. (Crane) Contact Brian Loring, 358.0438 • Shelter House — FY04 Land Acquisition (Hart) Contact Crissy Canganelli, 338.5416 x102 MINUTES PRELIMINARY HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 — 6:30 PM LOBBY CONFERENCE ROOM, CITY HALL Members Present: Marcy DeFrance, Holly Jane Hart, Michael McKay, Rebecca McMurray, Brian Richman, Michael Shaw Members Absent: Steve Crane, Andy Douglas, Charlie Drum Staff Present: Tracy Hightshoe, Steve Long Others Present: Deb Briggs, Steve Rackis RECOMMENDATIONS TO COUNCIL (become effective only after separate Council action): None. CALL TO ORDER: The meeting was called to order at 6:30 p.m. APPROVAL OF THE OCTOBER 7, 2008 MINUTES: McMurray motioned to approve the minutes with a name correction noted by Hightshoe; McKay seconded. The motion carried 6-0 (Douglas, Crane and Drum absent). PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA: None. STAFF/COMMISSION COMMENT: Hightshoe noted that at the October 7th meeting, the Commission reviewed a request by The Housing Fellowship to amend the financing terms of their project. The October 71h recommendation to the City Council was for a 20-year loan deferral, 0% interest, with a balloon payment at the end of 20 years. On October 14th, the Iowa Finance Authority (IFA) changed the qualified allocation plan, which significantly raised the cost -cap for low-income housing tax -credit applications. The Housing Fellowship revised their application based on the changes allowed by IFA. The new project cost for The Housing Fellowship's project increased by 28%. THE submitted the revised application to IFA on October 315t. Hightshoe said that on November 12th, she received project cost information from The Housing Fellowship to complete the HOME agreement. In the revised budget there were some significant increases over what was submitted to HCDC. Some items that had significant changes include construction costs (increased by approximately $724,000), an increase in the developer fee of $282,000, an additional $107,000 consulting fee, and a provision that The Housing Fellowship will HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 2 of 12 now lease the land to the for -profit entity that serves as its limited partner for $13,000 per year. Hightshoe noted that at the time of the HCDC meeting, the plan was for The Housing Fellowship to lease the land for $1 per year. Hightshoe said that if she had been looking at the new budget at the time of the previous meeting she may have made a different recommendation, based on The Housing Fellowship's ability to repay the loan during the first 20 years. Hightshoe said that staff met with the City's legal department and consulted CITY STEPS. Currently, CITY STEPS does not specifically mention financing terms under substantial change or a change that would require additional action such as HCDC or Council review. As there was no changes in the beneficiaries, number of units, project location, or the amount of allocation, under CITY STEPS it most likely is not considered "substantial." Hightshoe said that because of this, she recommends reviewing and revising CITY STEPS so that financing terms are considered and additional action required based on the type of change. Richman summarized that when the Commission had recommended amending the terms of the allocation so that no payment would be required of The Housing Fellowship until year 20, the primary reason given was that there would not be adequate cash flow for project approval if such a payment was required. Richman said that there now seems to be adequate cash flow to make a payment; however, the Commission does not now have grounds to reconsider the matter because of the way CITY STEPS is written. Hightshoe said that while staff and legal has reviewed this change and determined it not to be substantial according to CITY STEPS, she recommends amending the document so that a change in the financing or terms would be considered "substantial," and would therefore have to come back for Commission review. Richman asked if he was correct in understanding that the City Attorney's office did not believe the Commission had the grounds to review this matter. Hightshoe said that the question to legal and staff was if the change was considered substantial based on our Consolidated Plan (CITY STEPS). The decision was that it was not substantial, thus the project proceeds without further review if the original beneficiaries, allocation amount, project location, and number and type of units remain the same. Shaw asked if it was correct that staff would have made a different recommendation if they had been aware of the changes. Hightshoe said this was correct. Long pointed out that on a positive note the City is still gaining 22 units of affordable housing and the City has been provided with an opportunity to change its policy. Richman suggested thinking about this issue more broadly, and to consider developing some sort of paradigm for dealing with the complexities of low-income housing tax credits. He suggested the possibility of making the relevant HCDC decisions closer to the time when projects have been given approval by the relevant parties. Richman said that the Commission may have had more information with which to make a better decision if they had been able to wait a couple of weeks longer. McMurray asked if The Housing Fellowship was surprised by the changes. Hightshoe said that the IFA changes occurred on October 14`', allowing for much higher cost caps per unit. DeFrance asked when The Housing Fellowship added the $13,000 per year lease fee. Staff replied before October 31 when the application was submitted. Upon conversations with THF, they believe the changes are not substantial and told HCDC that numbers continually change and that such changes were allowed under IFA. Long noted that this was an unusual year for IFA, saying that a bill had been signed allowing for eight times the normal number of tax -credits. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 3 of 12 McKay asked if there was a simple way to explain how an increase in cost -cap translates into an increase in cash flow. Long said the rule change basically allowed The Housing Fellowship to ask for more money per unit; which allows much more money to come into the project. Shaw said that to be fair to The Housing Fellowship, it should be noted that the way in which The Housing Fellowship had interpreted things actually was the reality of the situation. Staff agreed that everything was completely legal and allowed by IFA. Shaw said that The Housing Fellowship was only doing what businesses do, which is to take advantage of the processes available to them. Long said it was simply a matter of it turning out that the project could have paid the City back in installments prior to year 20. Long said that on one hand an opportunity to reinvest that money into the community may have been lost, but on the other hand, it is helping to sustain a community non-profit; there are pluses and minuses in each case. Richman requested that staff do some research on how other cities tend to deal with tax -credit projects and issues such as this. Hightshoe stated she will survey the Iowa entitlement communities and share that information with HCDC. Richman requested staff to proceed with wording on amending CITY STEPS to consider financial terms and when further (Council and HCDC) action is required and present it at the next meeting. Flood Update: Long gave a brief update on the flood. He said that damage estimates show that approximately 270 homes were damaged in the flood; the homes were valued at $52 million, and the damage to them was estimated to be $26 million. Long said there were about 130 applications to the Jump Start Programs; approximately $600,000 of the $680,000 in funds have been committed to 14 households; which leaves a lot of households still in need of assistance. The City received about $2 million in federal CDBG money for assistance, and the City is working with the Iowa Department of Economic Development (IDED), along with Cedar Falls and Waterloo who share similar concerns, to iron out some of the details of their program that are not favorable to Iowa City. Long said basically the money is sitting there but IDED requirements are not allowing the City to spend it. Long said that IDED rules are requiring homeowners to come up with any gap in funding on the front end, prior to beginning rehabilitation project. Long said staff is asking the State to model the current program after the first program, in which the City is allowed to get the basic systems of the home running prior to the onset of winter —plumbing, heating, windows, etc. Long said part of the issue is that they are really trying to craft policy to fit the whole state, when places like Iowa City have much higher home values and the limit of $60,000 does not go as far toward rehabilitation. Long said that the City is working with the Department of Housing and Urban Development (HUD) and the Governor's Office to try to get IDED to change some of its definitions and recommendations. Long said that there are a lot of misconceptions out there about the people who were flooded in Iowa City; many believe they were all wealthy. Long said it is a very difficult situation to see how many people are struggling and facing dire financial situations that they would never have anticipated. Long said there is also a misperception that the Federal Emergency Management Agency (FEMA) has taken care of a lot of these people. Long said that out of 130 applications the City received, 52 applicants had received less than $10,000 from FEMA, 45 applicants had received less than $4,000. Long said there is a lot of damage, a lot of people who are still in need, and winter is upon us. DeFrance asked for an update on the buy-out. Long said there are 57 homes on the buy-out list; a follow-up letter verifying who is still interested in the program went out November 20th. The HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 4 of 12 application for the buy-out will be submitted in January. Long reminded Commissioners that the buy-out must be completely voluntary. DeFrance asked how many people in the area are rebuilding. Long replied that it was primarily people who have insurance, those mainly on the perimeter of the area, nearest the river. Long said that out of the 57 homes he believed there were 14 building permits taken out. He said he believed the primary reason was to get heat in the homes so that the foundation is not damaged, in the event that the buy-out does not succeed. Long said that staff has been told numerous times that there is enough money to buy out everyone who is eligible. Hightshoe said that she was told by a FEMA representative that in buy-out situations up to 50% of the people ultimately drop out of the buy-out due to the extended time period and/or desire to rebuild their home and remain in that community. McMurray asked if the money then can be used to help someone else, and Long replied that it then goes to another community. Long said there is a likelihood that if a levy is built the people remaining on the other side of the levy will not be protected by the City. Long said staff is also working with the Community Foundation, who raised over $50,000 toward rental and mortgage assistance, one of the biggest needs. Long said 16 additional households were then able to receive 3 months of mortgage/rental assistance, and that the Community Foundation said they would continue to try to help in the future. NEW BUSINESS: Review and Discuss the Iowa City HousinE Authority's Request to Amend the Down -payment Assistance ProEram Long said that City Council allocated the funds so that 70% of the funds were reserved for - assistance to persons making below 60% of the median income; 30% of the funds were reserved for those making between 61 and 80% of the median income. The original award was $187,500, about half of which has been spent. Nine recipients have received $10,000 each in down -payment assistance. So far the Iowa City Housing Authority (ICHA) has assisted 4 people below 60%, and 5 below 80%. The requested amendment is to waive the requirement to reserve a portion for those under 60% of the median income. Because the beneficiaries of the program would be changing, this would qualify as a substantial change and therefore must be reviewed by the Commission and City Council. Deb Briggs of the ICHA explained that in the upper income range, less than $10,000 in funding is left; whereas, in the lower range, there is $91,250 remaining. Briggs said that she did not want a waiting list to accumulate when there are so many funds left. Briggs said that ICHA had just submitted an application for state funds and expects more money to come in. Because the ICHA's allocation was merged with the funds given to Southgate, Briggs did consult with Southgate regarding this change and was given their approval. Briggs said Southgate is not ready to move forward on their project, and that part of the reason the funds are allocated in this manner is to try to reserve additional funding that might help support their program. Steven Rackis added that Southgate is aware that ICHA is also requesting state funds. Hightshoe asked if Briggs knew why Southgate was not ready to proceed with their project. Briggs said she did not know but that she imagined some of the issues were the difficulty in getting secondary financing because of the amount of rentals there. Briggs said it is a very big financial commitment, and while she would not speak for them, she does understand some of the challenges they are facing. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 5 of 12 Briggs provided a spreadsheet demonstrating, by profession, who was helped by the funding. She said a wide -range of social service employees, who are greatly needed in this community, were helped by the program. Rackis said that his concern is that he would like to get these funds out into the community and helping people, rather than building up a waiting list while there is still money available. He said that ICHA felt it had a strong application for state funding, and hoped to bring those funds into the mix. Briggs asked if the Commission had any concerns about the change that she could address. Shaw asked what Briggs saw as barriers to those below 60% of the median income in utilizing the program. Briggs said that one major problem is that there are not enough homes in their price range. Reserving the funds when the housing stock is not available is an issue, Briggs said. Briggs said she had tried to do some outreach to hit that lower range client, but that most house prices are just out of reach for them. Briggs said that these clients are not walking into financial institutions and receiving financing based on the ICHA's down -payment assistance funding; in some cases, co- signers or additional private loans/gifts have been required. Long pointed out that credit was more difficult to get presently as well. Long reminded Briggs that ICHA had five years to spend HOME funds, and noted that a change could be made that was limited to a 25% or less change in program beneficiaries or approximately $46,875 (4 or 5 households) without going to City Council. Richman asked what the pace of applications to this program has been for the last few months. Briggs said she is still receiving them, but that she has not done a lot of marketing. She said her focus has been more directed at lenders. Shaw asked for clarification as to whether ICHA was asking for the Commission to remove barriers to lower -income applicants or to shift more funds to the higher -income applicants. Briggs said she was just asking to remove the distinction between the two income classifications. Rackis said that basically the same eligibility requirements that apply to HOME funds would apply to this program. Briggs said the stipulation dividing the funds is a little odd and has not been imposed before. Richman posed the question: How important is it to spend the money quickly versus to spend the money on the lower end of the spectrum? Shaw said it sounded like there is a possibility that the money could be absorbed relatively quickly if it was directed to the upper incomes. Briggs said she did not know, adding that if house prices do not decline it will not matter how much money is available to the lower income range because they simply cannot afford homes at their current prices. Hightshoe summarized three recommendations for the Commission: 1) leave the allocation at its current terms and have the matter go before the City Council, 2) allow a change in beneficiaries up to 25%, an action that can be taken by the Commission without further Council approval, or 3) remove the income restriction as requested by ICHA and have the matter go before the Council. Briggs noted that if no change is made, the matter will not have to go before Council again. Rackis noted that if the second option is chosen, ICHA will likely come back before the Commission with the same request in January because the available funds will have been utilized. Richman said that his inclination was not to completely second-guess the Council by removing the income restriction as he did not know whether their motivation in implementing the restriction was project -based or to target that population. Richman said he could certainly support moving some of that $91,000 to the higher income limit, but maybe not all of it. Briggs noted that if ICHA's funds HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 6 of 12 had been kept separate from Southgate's there would not have been any mandated split of the funds. Long said that the project itself could not be targeted as there would be the potential to have to pay for relocation costs to existing tenants. Hightshoe noted that CITY STEPS at the time had targeted the 61-80% of median income population as a lower priority for home ownership than the under 60% population. Briggs explained that when Southgate proposed merging their project with the ICHA funding, the City Council could not target a specific project, but could target a low-income population. Rackis said that at the time, Southgate anticipated selling their units at around $100,000; now, of course, their project is on hold for the time being. Richman stated that he believed it was more important to help some people below 60% of the median income than it was to get the money spent quickly. He said he would like to see some of the money stay at the 60% and below. Briggs noted that the funds would not actually be "moved" from one population to the other, they would simply be made available to anyone under 80% of the median income. She said the majority of the people that she works with are under the 60% income, but simply cannot afford local home prices, or are working on credit issues. She said she nonetheless lets them know the funding is available. McKay asked Rackis if he was correct in his understanding that these funds could be increased in the near future. Briggs explained that the application in question was for $200,000 in state funds which would have the same 80% income cap, but could be utilized throughout Johnson County. Briggs said she believed it was likely that ICHA would get these funds, and that the funds would often be coupled with the USDA loan programs available to county residents. McKay said he was trying to get an idea of the total amount of funds that would be available to low- income residents in the area. Briggs said ICHA still had $98,000 of the HOME funds, and hoped to inject another $200,000 from the state, for a possible total of $298,000. McKay said that removing the barrier set by the Council would not then necessarily affect the lower income families. Briggs and Rackis said that while they cannot guarantee they will receive the state funds, they believe they have an extremely strong application. They will not hear if they are awarded the funds until March. Richman suggested moving about $25,000 of the funds out of the under-60% income group for now, which would presumably carry the program into March when more would be known about the state funding. Shaw said that he is leaning toward transferring a partial amount in order to both satisfy the ICHA's request and respect the wishes of the Council. Richman said his sense of the issue is partially influenced by earlier discussions, although he admitted they were not directly related. He said that the information before the Commission is imperfect, and it may make sense to make a small change now as opposed to making a big change and then regretting it. Briggs noted that opening the funds up does not eliminate the possibility of someone below the 60% median income using the funds. Briggs said she does not believe that it will be the case that all of the upper income applicants will use the funds, leaving none for the lower -income applicants; she bases this on the fact that the funds have to -date been used pretty evenly between the two groups. Rackis said that the only thing to consider is the specter of a waiting list and the impact a waiting list might have on the financing terms of those wishing to be helped. Rackis said he believed City Council knows that HCDC works hard and uses solid rationale when making recommendations, and that he did not believe the Council would view changes to the terms as undermining in any way. Shaw said that prior to removing all barriers he would want to check with City Council on their rationale in dividing the funds to begin HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 7 of 12 with. Shaw said it makes sense to reserve the option to move more funds later, after further consideration and more information is available. DeFrance said that in awarding the money to begin with no restrictions were put upon it by HCDC, and that the purpose of the award was to promote home ownership. DeFrance said she would like to see more lower -income people be able to afford a house, but that she did not think that was going to happen until more affordable units come on-line. Briggs said that one of the biggest restrictions on the money is that it has to be used in Iowa City. She said that this is one of the most limiting factors for those under 60% of the median income. If ICHA receives the state funds, Briggs said, the money could be used anywhere in Johnson County, which will really open the market for the lowest income groups. McKay asked what the down -side would be in removing the barrier. Shaw said the potential is there for those under 60% median income to be able to afford homes, and that removing the barrier may use the funds up before those folks have the opportunity to make a purchase. Shaw motioned to shift $40,000 into the 61-80% of median income category. McMurray seconded. Briggs asked if this would then have to go before City Council. Long replied that it would not as it was less than 25% of the original $187,500 award. After some discussion, it was decided to amend the motion to reflect the change in beneficiaries that would result. Shaw amended his motion. Shaw motioned to move $40,000 or the equivalent of four households to the 61-80% of median income category. McMurray seconded. A vote was taken and the motion carried 5-1; McKay voting against the motion. McMurray had to leave at 7:45 p.m., and reminded Commissioners to discuss the issue of "double- dipping" by agencies into both the Aid to Agencies funds and the public service funds. Update on the Iowa City Housing Authority's Grant Application to the State for Down - payment Assistance Funds Briggs said that the update had essentially been included in the previous discussions. She noted that a state -funded program, if awarded, would be run largely the same as the current one. Update on the Iowa City Housing Authority 5-Year Annual Plan Rackis stated that HUD requires housing authorities to submit a 5-Year Annual Plan that reflects the goals, objectives, needs and concerns that are identified in CITY STEPS. CITY STEPS and the 5- Year Annual Plan are on the same review cycle. At the time of the last submissions, joint public hearings were held by ICHA and Community Development. Rackis noted that CITY STEPS is a bit ahead of ICHA: ICHA submits in April 2010, and Community Development submits in December 2009. Rackis said his intention was simply to call attention to the upcoming process and state his desire to partner with the Commission and Community Development in completing the process and HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 8 of 12 the public hearings. Rackis distributed copies of the ICHA Annual Plan, and expressed his hope that HCDC would be a large part in the development of ICHA's 5-Year Annual Plan. Long said that a consultant will be hired to do Community Development's 5-year plan, and said the consultant will be working with the Commission quite a bit over the next year. Rackis noted a somewhat detailed explanation of the ICHA budgeting process on page 20 of the Annual Plan. Rackis noted that the booklet could be very useful in helping to dispel common myths about those using affordable housing. He gave an example in which he is frequently asked the number of households in ICHA programs who are on welfare. He said that of 1,300 families using Section 8 rental assistance and public housing, only 4% reported FIP/TANF ("welfare") as their sole source of income. He said the vast majority of the clients served by ICHA programs are elderly and/or disabled, or working families. Discuss and Review FY10 CDBG/HOME Funding Process Timeline Staff distributed timelines for the funding process for fiscal year 2010, and briefly ran through the items on the timeline. Hightshoe asked people to consult their calendars for known conflicts with meeting times. Hightshoe noted that there are also occasional (two days) site -visits over the noon hour that a few Commission members are asked to attend if possible. Review and ADDrove FY10 CDBG/HOME ADDlication Materials The application materials were mailed out with the November meeting packets for review. Hightshoe noted that staff is anticipating less program income than last year and the same amount of entitlement funds (although Congress has not yet indicated anything on entitlement funding). Hightshoe said Community Development only has about $1,475,000 to allocate this year, which puts a huge strain on public services. Hightshoe said there will only be about $10,000 to allocate to public services. Hightshoe said that previous years have had a $1,000 minimum for public service funds. Hightshoe said that a number of the smaller allocations are simply not capable of meeting all of the federal requirements, and as a result, HCDC may want to consider instituting a $5,000 minimum, as many other cities do. It will also have to be decided if first priority is to be given to those who do not receive Aid to Agency Funding. Hightshoe stated HCDC should consider a few items that were issues from last year. Hightshoe noted that last year there were prolific materials coming in after the application deadline, which created difficulty for staff in ensuring Commissioners had the necessary materials. Hightshoe recommended instituting a policy to address materials that are submitted after the due date. Hightshoe suggested Commissioners consider whether or not they wish to add a disclaimer indicating that the terms requested by the applicant may not be the terms recommended by the Commission. Richman said that Andy Douglas had asked him to bring up the issue of whether the Commission should be more focused on rental housing than owner -occupied housing, especially given the current housing market. Long suggested putting a statement in the application materials stating that rentals will be given preference. Hightshoe noted that in CITY STEPS rentals are a higher priority than home ownership. Shaw agreed that not knowing what the financial/housing markets will be like, it might be wise to do more allocating on the rental side of things. Hart said looking toward affordable rentals is a good thing, but she has some concerns about how that would be allocated and where it would be allocated. She said that in general she likes the idea of a preference toward the rental HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 9 of 12 market in the near future, but she would not want it to be completely wide open and would definitely like to see a lot more discussion. Richman asked what the advantage would be in putting something regarding rental preferences in the application packet. Long said it would inform people who are applying and developers that the City was trying to focus more on rental housing this year. Richman asked if there was a policy or political advantage to doing that because he did not believe the projects coming in at this point would be changed by that. Long said he believed there could be. Hightshoe suggested inserting a statement that alerts applicants that projects will be evaluated based on the recent Housing Market Analysis showing a large demand for affordable rental housing. DeFrance asked how much of the $1,475,000 will be allocated to Aid to Agencies. Hightshoe said that Aid to Agencies receives $105,000 every year. Hightshoe summarized the three discussion points as: 1) Enforcing a firm application/materials deadline. 2) A disclaimer on the application stating that the terms will be determined by HCDC and City Council and not necessarily as requested by the applicant. 3) Raising the minimum award amount for public services. The Commission discussed whether those receiving Aid to Agencies should be able to receive public service funds as well, and if so, if first priority should be given to those not receiving Aid to Agencies. Richman said he does not wish to make that decision blindly, and would want more information first. Shaw noted that larger agencies have the capacity to make up the funding in other areas, whereas smaller ones may not. Long said there used to be an informal policy that an agency could come to CDBG for three years, and then after that, the agency was on its own. Over the years, that policy has disappeared. Hightshoe said that it was an option to implement no policy, and then when considering allocations to also consider what the agencies receives through Aid to Agencies. Shaw asked if it would be perceived as "blind -siding" agencies not to let them know on the front -side that they may not be eligible for public service money in addition to Aid to Agency money. McKay said he felt it all goes back to the bigger question of how the pool of money is being shared right now, and how it can best be weighed when it comes to the tougher decisions. Shaw asked if the list could be received sooner, and staff said it would not be available sooner. Hightshoe said she could put last year's list in the December packet. Richman asked if a $2,500 minimum for public service could be instituted. Hightshoe said that would still allow for 4 projects (minimum), or possibly two $5,000 awards depending on who was applying this year and actual allocations. There was a consensus to limit public services awards to $2,500 or higher. Regarding the deadline issue, it was decided to more strictly enforce the application deadline. Hightshoe reminded members that any information received by an applicant (if contacted by an applicant outside of HCDC meetings) must be shared with all Commission members. If anything is received, send to staff and staff will distribute. It was agreed to add a disclaimer informing applicants that the terms requested may not be the terms awarded. It was agreed that a brief sentence giving preference to rental projects but still allowing for flexibility would be added to the application materials. Hightshoe briefly ran through a number of wording changes to the application that had been made from the previous year. All HCDC members were in agreement of the proposed changes, as discussed, to the application and the changes to the application guide. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 10 of 12 Discussion of a HCDC Sponsored Event Focused on Affordable Housing Long said there may be some funding available for this. Hightshoe said this could be done in conjunction with the CITY STEPS process. It was generally agreed to pursue the idea. OLD BUSINESS: Annual Review of the 2008-2010 Consolidated Plan (a.k.a. CITY STEPS) — Discussion and Consideration of Proposed Amendments Staff distributed a summary of comments gathered from past recipients and the public concerning CITY STEPS. Hightshoe said that what she has noticed when seeking public input is that employment training, transportation, affordable rental housing and daycare are many times repeated amongst several clientele groups. Hightshoe said typically these four priorities are the ones to come out of every meeting. These four issues are considered high priorities in CITY STEPS. Long said that if anything stands out as far as public comment over the last year it is the desire to see change. Shaw asked if "scattered site" housing was a topic of public comment this year and Hightshoe said that it was not. Richman asked if CITY STEPS needed to be modified to reflect the Housing Affordability Study, and Long said that it did. McKay asked if anyone had ever been hired to help out staff. Long replied that the City hired two people to assist with the buy-out application and the Jumpstart funds. MONITORING REPORTS: • HawkeYe Area Community Action Program — Housing (Douglas) Douglas absent, no report. • Arc of Southeast Iowa — Operations & Facility Rehab. (Crane) Crane provided a report to Hightshoe who said that Bill Regan of the Arc stated that the security lights have been installed and are a great improvement. Regan thanked the Commission for the funding. Isis Investments LLC — Rental Housing (Shaw) Shaw spoke with Salome Raheim, who is currently residing in Connecticut, but is still interested in applying for the next round of funding. Raheim said that two units are occupied with families on Section 8 assistance. Yolanda Spears is serving as "property manager plus" on the project while Raheim is in Connecticut. Spears is providing additional services above and beyond that of a traditional property manager and is using her skills as an M.S.W. in social work and a family resource center coordinator to assist families. Hightshoe said that from staff's perspective it has been a great project. They located two units immediately and leased both units by September. FY08 Goodwill Industries — Facility Rehabilitation (Shaw) Shaw was unable to speak directly with the contact at Goodwill Industries and so had nothing to report. ADJOURNMENT: HOUSING AND COMMUNITY DEVELOPMENT COMMISSION NOVEMBER 20, 2008 LOBBY CONFERENCE ROOM, CITY HALL Page 1 I of 12 McKay motioned to adjourn. DeFrance seconded. The motion carried 6-0 and the meeting was adjourned at 8:44 p.m. Proposed CITY STEPS Amendment: Citizen Participation Plan Page 10. D. To substantially change the purpose, scope, location or beneficiaries of an activity. A "substantial change" includes: Change in Purpose - if an activity changes with respect to the objectives as originally described in the Consolidated Plan; Change in Scope - if the scale and/or nature of the activity changes to the extent that there is a significant increase or decrease in funds budgeted for the activity. The change in scope threshold is as follows: 1. For activities with an original allocation of $50,000 or more, an amendment to the applicable Annual Action Plan is required if the change in scope exceeds $50,000 or 25% of the original budget allocation. 2. For activities with an original allocation of less than $50,000, an amendment to the applicable Annual Action Plan may be approved administratively by the City Manager if the change of the scope exceeds 25% of the original allocation. The Community Development Coordinator may approve other minor changes in scope (less than 25% of the original allocation.) Change in Location - - if the originally approved project is neighborhood specific or in an urban revitalization area (e.g. housing rehabilitation or elimination of slum and blight) and the project location is changed to an area outside of its census tract; and Change in Beneficiaries - if the percentage of Low to Moderate Income persons or number of units being assisted decreases by 25% or more. E. Project Financial Terms. While not considered a substantial change, changes in financial terms (term, interest rate, or amortization schedule) that delay when repayment of the funds will return to the City or significantly reduce the amount repaid to the City for all prior City Council approved loans, must return to the Housing and Community Development Commission for review and approval. The Community Development Coordinator may approve payment deferrals up to, but not exceeding six months. 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