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HomeMy WebLinkAbout07-21-2025 Housing & Community Development Commission HOUSING & COMMUNITY DEVELOPMENT COMMISSION (HCDC) July 21, 2025 Regular Meeting — 6:30 PM Emma J. Harvat Hall 410 E Washington Street (City Hall) AGENDA: 1. Call to Order 2. Welcome New Members The Commission will welcome two new members, Thomas Rocklin and Sarah Murray. This item provides an opportunity for new and existing commissioners to introduce themselves. 3. Consideration of Meeting Minutes: June 16, 2025 4. Public Comment of Items not on the Agenda Commentators shall address the Commission for no more than five minutes. Commissioners shall not engage in discussion with the public concerning said items. 5. Officer Nominations The Commission nominates and elects a Chair and Vice Chair each July in accordance with the by-laws. The Commission will nominate and vote for the two positions. 6. Discuss Changing the Regular Meeting Time Commissioner Vogel requests that the Commission discuss and consider a vote to move the regular meeting time of the Housing and Community Development Commission from 6:30pm to an earlier time. 7. Open Meetings Law Update Staff will give an overview of changes to Chapter 21 of the Iowa Code, including new training requirements and increased penalties for violations of open meetings law. 8. Overview of Upcoming FY26 Community Development Block Grant (CDBG) Competitive Funding Round and Next Steps for FY26 Non-Legacy Funding Staff will provide an overview of the requirements and process for the upcoming CDBG round and explain next steps for the FY26 Non-Legacy cycle. 9. Staff & Commission Updates This item includes an opportunity for brief updates from staff and Commissioners. Commissioners shall not engage in discussion on updates. 10. Adjournment If you will need disability-related accommodations to participate in this program or event, please contact Brianna Thul at bthul(@iowa-city.orq or 319-356-5240. Early requests are strongly encouraged to allow sufficient time to meet your access needs. Next Meeting: August 18, 2025 � r CITY OF IOWA CITY 410 East Washington Street Iowa City. Iowa 5 2240-1 826 (319) 356-5000 (319) 356-5009 FAX www.icgov.org Housing and Community Development Commission Meeting Packet Contents July 21, 2025 Agenda Item #3 a) June 16, 2025 Draft HCDC Meeting Minutes Agenda Item #8 a) FY26 Applicant Guide - Competitive CDBG Funding Round b) FY26 Non-Legacy Aid to Agencies Applicant Guide Agenda Item #9 a) Press Release— City Council Extends Fare Free Transit Program Agenda Item #3 MINUTES DRAFT HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JUNE 16, 2025—6:30 PM FORMAL MEETING E M M A J. HARVAT HALL, CITY HALL MEMBERS PRESENT: Horacio Borgen, Maryann Dennis, Amos Kiche, George Kivarkis (via zoom), Karol Krotz, Kyle Vogel MEMBERS ABSENT: None STAFF PRESENT: Brianna Thul OTHERS PRESENT: None RECOMMENDATIONS TO CITY COUNCIL: Dennis moved to recommend approval of the substantial amendment to City Steps 2030 which includes the FY26 Annual Action Plan to City Council. Krotz seconded the motion and a vote was taken and the motion passed 6-0. Dennis moved to recommend approval of the substantial amendment to the Citizen Participation Plan to City Council. Kiche seconded the motion, a vote was taken and it passed 6-0. CALL MEETING TO ORDER: Vogel called the meeting to order at 6:30 PM. CONSIDERATION OF MEETING MINUTES: MAY 19, 2025: Krotz moved to approve the minutes of May 19, 2025. Kiche seconded the motion. A vote was taken and the minutes were approved 5-0 (Borgen not present for vote). PUBLIC COMMENT FOR TOPICS NOT ON THE AGENDA: None. REVIEW AND CONSIDER RECOMMENDATION TO CITY COUNCIL ON APPROVAL OF THE SUBSTANTIAL AMENDMENT TO CITY STEPS 2030 WHICH INCLUDES THE FY26 ANNUAL ACTION PLAN: Thul explained the five-year City Steps 2030 plan sets the goals and strategies for what Iowa City is going to do in this period. The Annual Action Plan says what specific activities they're going to undertake that year to work towards the goals. City Steps 2030 was approved in January. The first year of the planning period is a little unique in that the Annual Action Plan is technically a part of the City's five-year plan. In years two through five, the Commission will see the Action Plan come to them as a separate document. She explained that because the year one Action Plan is part of City Steps, this is technically called an amendment. The Annual Action Plan shows the programming of the HUD funds into the specific activities that will be done in FY26. The amendment includes updates to the document to be consistent with final award amounts, it incorporates the Annual Action Plan as mentioned, and it ensures consistency with a lot of rapidly changing regulations. As an example, Thul noted one thing that has changed is HUD has Housing and Community Development Commission June 16, 2025 Page 2 of 5 eliminated the Affirmatively Furthering Fair Housing requirement to do an Analysis of Impediments study. There were portions of that study that were incorporated into City Steps and that's no longer a requirement. Therefore, staff deleted some of that language just to be consistent with some of the new regulations. Thul stated the structure of these planning documents are very prescribed by HUD and typically the Commission is most interested in the specific projects that the City is going to undertake that are listed in a summary located in the appendix. She continued that dollars programmed in this plan will fund the different City programs such as homeowner rehab, a new pilot rental rehab program, the City's down payment assistance program, and tenant based rental assistance. It will also support local nonprofit agencies through the CDBG portion that goes to Aid to Agencies and through Community Housing Development Organizations, which are special nonprofits that can undertake housing activities. The City is required to set a percentage of the HOME funds aside for CHDO activities. The City will also do a competitive funding round. Thul noted that the Commission will see that funding round coming soon. Thul stated there are no public comments to date on this amendment and staff is requesting HCDC recommend approval of this amendment to City Council. City Council will hold a public meeting on July 8 where they will accept public comments and consider approval of the amendment. If the amendment is approved, staff would submit the document to HUD. Dennis asked how much funding is going to be available for the competitive round. Thul replied that for competitive rental acquisition there will be about$214,000 and then for public facility projects there will be $150,000. Thul reminded Commissioners that they have parsed down the types of activities that will be funded through the competitive round. Krotz asked if they are targeting that$214,000 for one project. Thul responded that the target beneficiaries do say one rental unit and one public facilities for the funds. However, let's say the Commission gets two public facility project applications and they want to recommend funding to both at half of the available amount each, they certainly do that. It's okay to exceed the goals set, but they try to set reasonable goals. Vogel asked what the definition of affordable housing under the affordable housing section is. Thul replied that project requirements vary type of activity and the funding. If it's a HOME activity, like the down payment assistance program, an applicant can be up to 80% of area median income, but then there are specific underwriting requirements. For example, the monthly housing payment including insurance can only be 30% of the applicant's gross income. If it was a rental project, HUD also restricts the amount of rent that the landlord can charge to the tenant. For HOME funds, HUD sets the maximum rents for the area and then there's a utility allowance. The maximum rent minus the utility allowance is the rent that they can charge to the tenant. A landlord can charge less, but the maximum rent they can charge to the tenant is restricted. Dennis asked about HOME funds for rentals and if there are different income levels based on the number of units. Thul confirmed yes HOME requires that they maintain a unit mix, but for the most part they require income under 60% for rentals. A landlord would need to make sure that the tenant is under 60% of the area median income for a HOME assisted unit. Many times with HOME projects, the limit might be 60% of area median income, but tenants served are well below that limit. Thul explained that the rent and income limits for these programs are set annually by HUD. Dennis moved to recommend approval of the substantial amendment to City Steps 2030 which includes the FY26 Annual Action Plan to City Council. Krotz seconded the motion and a vote was taken and the motion passed 6-0. REVIEW AND CONSIDER RECOMMENDATION TO CITY COUNCIL ON APPROVAL OF THE SUBSTANTIAL AMENDMENT TO THE CITIZEN PARTICIPATION PLAN: 2 Housing and Community Development Commission June 16, 2025 Page 3 of 5 Thul stated the next document is called the Citizen Participation Plan which is a HUD requirement that guides how cities gain input for planning documents. It directs things like when staff brings things to HCDC and how long the public comment period should be. Again, this updates is technically called a substantial amendment to the plan that was last updated in 2020. They try to do a general update every five years with the consolidated planning process. With this amendment they are modernizing the methods of input, they are ensuring consistency with current regulations, adding provisions for disasters and emergencies, increasing the clarity and the input for the approval process for each plan and any associated amendments. Thul acknowledged the process for input is generally the same, but this amendment is breaking out each plan to add clarity. Additionally, it makes clear that staff will attempt input from HCDC but that staff would proceed with the process if a Commission meeting is canceled. If there are deadlines for plans staff needs to be able to proceed with the process to submit on time. Krotz asked if citizens can come to the City Council meeting and present thoughts. Thul stated yes and for example, with the substantial amendment for the last item the Commission just reviewed, the City starts a public comment period where they'll announce it in the Press Citizen and online. Then they do a 30 day public comment period. People can submit comments in writing to staff, they could submit comments to the clerk's office, they can come to this HCDC meeting and make a public comment, and they can come to City Council and make a public comment there, so there's several different ways that someone can have their input incorporated. Staff would accept written input like a mailed letter as well. Kiche asked is there a restriction on the place where a public meeting would be conducted. Thul noted they try to do most of the meetings like this at City Hall, but when they do the public input process for City Steps, that does have additional requirements on where they can hold the public input meetings. At least one of the meetings needs to be in a neighborhood of Iowa City where at least 50% of residents have low to moderate income. For public input initiatives of that scale they also try to hold meetings in different locations and at different times to try to get as much feedback as possible. Kiche asked if there is usually some communication with the community organizations in form of writing to their leaders. Thul replied that yes, during that public input process staff really relies on the nonprofit community. They are super helpful in distributing flyers and getting people to do the surveys. When the City did the public meetings for City Steps 2030, they partnered with agencies like Neighborhood Centers of Johnson County to hold meetings at the Broadway and Pheasant Ridge Centers. Vogel asked what the requirements on a minor versus a substantial amendment is, he understands a minor amendment means there doesn't need to be any public input, but in a substantial amendment situation there would be a requirement for public input. He knows a lot of the minor ones are where CDBG/HOME funds can get applied to something else or a program gets canceled and they don't have to have a whole series of public input for that. So, when something becomes a substantial amendment, what is that process? Is it one or two public meetings and do they have to go through the whole public comment process all over again? Thul stated a substantial amendment takes a little bit more time and it's not something that would happen quickly. The amendment process is less intense than developing the development of the full five-year plan, but it still takes a meeting of the HCDC and then a City Council meeting to get a substantial amendment approved. There is a list of things in the Citizen Participation Plan explaining what is substantial and what is administrative. Thul continued to say that staff retain the ability to bring amendments forward to a public meeting or to HCDC if they feel it's something that needs input even if it is considered administrative. Dennis moved to recommend approval of the substantial amendment to the Citizen Participation Plan to City Council. Kiche seconded the motion, a vote was taken and it passed 6-0. 3 Housing and Community Development Commission June 16, 2025 Page 4 of 5 STAFF & COMMISSION UPDATES: Thul noted that at a previous meeting someone had asked about narrative accomplishments for Aid to Agencies project so Sam Turnbull, the City's Grants Specialist, prepared a memo which was included in the packet. They also included the 2024 Neighborhood and Development Services Annual Report. Thul also noted the Council passed the amendment to the by-laws and that they all have received a copy of the newly revised by-laws. Thul announced that the FY26 Non-Legacy Aid to Agencies application opened today. Applications will be due July 16 at noon. Krotz noted they have a couple of Commissioners whose terms expire at the end of this month and wondered if there were any updates? Thul stated new Commissioner appointments are on the City Council agenda for tomorrow and noted that Dennis has reapplied for the Commission, but Borgen has not. Vogel thanked Borgen for his service and commitment. Kivarkis noted he's been offered a career opportunity in the city of Chicago, and unfortunately his permanent residence in Iowa City will be expiring August 1 and he will be forced to resign from the Commission. He wanted to take a moment to thank the City staff and the entire Commission as it's been an honor working them during his limited time on HCDC, he generally feels that he learned a lot and that they were able to make their process a little more efficient. He is happy with the direction they moved in his time on the Commission. Kiche congratulated Kivarkis and said that it has been encouraging to have a young person and a student as a role model on the Commission. Borgen thanked staff and City Council for the opportunity to serve. He hopes that there will continue to be Latino representation on the Commission. He feels that is important for the Latino community in Iowa City. Thul thanked Borgen and Kivarkis for their service to the Commission. She also noted that they hope to see Dennis back in July, but just in case she also wanted to say thank you to Dennis for her service as well. Thul noted sometimes the Commission takes a summer break and asked if Commissioners would like to meet July 21. All decided they would be willing to meet. Vogel would like to have a future agenda item about the start times for HCDC meetings. He asked if a 5:30 meeting start would be difficult for people or would everyone be willing to change? Commissioners agreed. Krotz asked how much advanced notice they need to give to the public that the meeting times are changing. Thul stated they would put it on the next agenda for discussion and a vote. The next meeting would still be at 6:30, but it could change after that if approved. ADJOURNMENT: Dennis moved to adjourn, Krotz seconded the motion and a vote was taken and the motion passed 6-0. 4 Housing and Community Development Commission June 16, 2025 Page 5 of 5 Housing and Community Development Commission Attendance Record 2024-2025 Name Terms Exp. 3/21 4/18 5/16 6113 8/19 9/16 10/21 3/24 4/21 5/19 6/16 -- -- -- -- A A P A A D D Balde, Daouda 6/30/27 A A P P P A A P P A P Borgen, Horacio 6/30/25 (zoom) P Dennis, Maryann 6/30/25 P P P P P P P P P P Kiche,Amos 6/30/25 Kivarkis, George 6/30/27 -- -- P P A P P P (zoo m A A P P A P P A A P P Krotz, Karol 6/30/27 A A P P P P P Patel, Kiran 6/30/26 Pierce, James 6/30/26 A P P P A P A Szecsei, Denise 6/30/25 P P P A P A p Vogel, Kyle 6/30/26 P P A A P P P P P P P Key: P = Present A=Absent * = Resigned --=Vacant D = Discharged 5 Agenda Item #8 FY26 Applicant Guide Competitive CDBG Funding Round PART I. General Information This guide outlines requirements for applicants seeking Community Development Block Grant (CDBG) funds through the City of Iowa City. The CDBG program helps develop viable urban communities by providing decent housing and suitable living environments, and expanding economic opportunities, principally for persons of low and moderate income. The program is funded by the U.S. Department of Housing and Urban Development (HUD). • All applicants are strongly encouraged to attend the FY26 Applicant Workshop. • Top ranking applications will be considered first. • Information submitted is made publicly available for the Housing and Community Development Commission (HCDC) scoring process. Please do not submit sensitive information that cannot be posted for public review. • Applications must be complete for consideration. Late, incomplete, or ineligible applications will not be considered. Application Timeline Applications are due August 4th, 2025 at 12pm. Late, incomplete, or ineligible applications will not be considered. The following is a tentative timeline of the application process. Visit https://www.icgov.org/grants for current information or contact staff at 319-356-5240. Date/Deadline July 7, 2025 Application opens. July 23, 2025 at 2pm FY26 Applicant Workshop. Those unavailable to attend should contact staff (Zoom Meeting) before submitting an application. Register for the meeting at the link below: https://us06web.zoom.us/meeting/register/m01K 6DPQiebP8OXOnNBHA August 4, 2025 Applications due to City of Iowa City by noon (12pm). (due by 12pm) August 25, 2025 Staff funding recommendations submitted to the Housing and Community Development Commission. September 15, 2025 Housing and Community Development Commission meeting. Commissioners will make award recommendations for CDBG funding. Dates may be subject to change. Estimated Federal Funding Available Estimated budgets may be subject to change. The City anticipates about $364,132 of CDBG funding available this funding round for the following purposes: • $150,000 for public facility improvements • $214,132 for rental housing acquisition Application Platform Applications are accepted through Neighborly Software. A guide on how to use the online platform is available at www.icgov.org/grants. Applicants must log into the participant portal and complete the FY26 CDBG Applicant Guide 1 application that corresponds to the proposed project: • Public Facilities Application • Rental Housing Acquisition Application Link to Participant Portal: httl)s://portal.neighborIVsoftware.com/CITYOFIOWACITYIA/Participant Assistance with the Neighborly Software platform can be located through the question mark icon in the lower right corner of the screen. Applicants may also contact staff for assistance. Staff Contact Information Questions can be directed to: • Brianna Thul, Senior Community Development Planner at 319-356-5240 or bthul(aMowa- city.org. • Sam Turnbull, Grants Specialist at 319-356-5237 or sturnbull(@iowa-city.org. FY26 CDBG Applicant Guide 2 PART I. Eligibility Requirements and Application Considerations Applicants should evaluate the following HUD guidelines as well as City policies including those contained in City Steps 2030 when considering the proposals, funding estimates, and time schedules for achieving their project goals. All proposals must benefit low-moderate income individuals. The specific ways that a project must accomplish the program's purpose (also called a National Objective) varies by program. At least 51% of those befitting from the program (persons or households) must have incomes at or below 80% of the area median income (AMI) based on household size (see table below). For programs that benefit individual households, all households must earn less than 80% of the median household income. Applicants must document that its purpose is being met. CDBG allows households to self-certify their income with their signature,though a percentage of beneficiaries must also provide source documentation (such as pay stubs or a Social Security statement) to verify the household's income. The City must approve this percentage based on the program and number of beneficiaries - usually set between two and five percent. This source documentation must be kept in the client's file and is subject to monitoring when City or HUD staff review the client files. Median household income limits for projects in Iowa City are as follows: Effective 6/1/25 for CDBG and HOME Household Size Extremely Low Income Very Low Income Low Income 30%Median Income 50%Median Income 60%Median Income 80%Median Income 1 $24,850 $41,400 $49,680 $66,200 2 $28,400 $47,300 $56,760 $75,650 3 $31,950 $53,200 $63,840 $85,100 4 $35,450 $59,100 $70,920 $94,550 5 $38,300 $63,850 $76,620 $102,150 6 $41,150 $68,600 $82,320 $109,700 7 $44,000 $73,300 $87,960 $117,250 8 $46,800 $78,050 $93,660 $124,850 For example, the purpose may be satisfied by meeting the following criteria: • Public facilities acquired or improved must be designed for use by predominantly low- moderate income persons. • Rental housing that is acquired, as part of a project must be occupied by low-moderate income households. Eligible Activities Eligible activities for this funding round include the following: • Acquiring real property for use as affordable rental housing for low to moderate income tenants. • Construction, rehabilitation, and improvements to public facilities (such as a shelter or neighborhood facility)serving primarily low to moderate income residents.A public facility must be open to the public during normal working hours to be eligible. Ineligible Activities Activities that are ineligible for this funding round include, but are not limited to, the following: • Any project (including those listed as eligible activities) that would cause displacement or trigger the Uniform Relocation Act. FY26 CDBG Applicant Guide 3 • Any project (including those listed as eligible activities) that does not comply with federal regulations, local codes, or other relevant laws. • Any project (including those listed as eligible activities) submitted by a subrecipient with a history of noncompliance for previous projects. • Direct assistance to individuals such as income payments, rent assistance, and mortgage payments. • New construction of affordable housing units (rental or owner-occupied). • Down payment assistance or acquisition of owner-occupied housing. • Tenant Based Rental Assistance. • Public service eligible activities such as operations or salaries. • Rehabilitation or preservation of residential structures (not including shelter). • Buildings for general conduct of government and expenses required to conduct the regular responsibilities of local government, e.g. street maintenance, public buildings for government. • Political, religious and lobbying activities. • New housing construction, except for residential facilities providing shelter for persons with special needs (homeless shelters, convalescent homes, halfway houses, and group homes). • Purchase of construction equipment. Any applications submitted that are deemed to be ineligible for the funding round will not be considered. Applicants will receive notice of ineligibility from the City that identifies the reason for ineligibility.Applicants that do not agree with the determination may appeal to the Neighborhood Services Coordinator within 10 business days of notice. This funding cycle is intended to support public facilities and acquisition of rental housing. The City funds other activities through various programs including, but not limited to, the following: • Public services—supported through the Aid to Agencies Program. • Downpayment assistance — supported through the Downpayment Assistance Program and South District Program. • Rental assistance—supported through the HOME Tenant Based Rental Assistance Program. • Housing rehab — Supported through the Owner-Occupied Rehab Program, General Repair and Improvements Program, South District Program, rental rehab, and CHDO rehab activities. • Affordable housing - The City's local Affordable Housing Fund is administered in part by the Housing Trust Fund of Johnson County (HTFJC). Applicants interested in new construction of housing or rental rehab should apply through the HTFJC. HTFJC offers funding four times a year and is not subject to federal restrictions (unless other federal dollars are invested). Performance Schedule and Payment Reimbursements can be made only after the agreement between the City and the subrecipient has been formalized. • Expenses incurred before July 1, 2025, before an agreement has been entered, and/or prior to completion of an environmental review are not reimbursable and may jeopardize all funds awarded to the project. FY26 CDBG Applicant Guide 4 • Disbursements are typically made upon receipt of 1) invoices for labor, materials and services rendered, and 2) signed lien waivers (as appropriate) covering all amounts to be paid. Projects are subject to the City's Unsuccessful and Delayed Projects Policy. Should a subrecipient fail to meet this threshold, the project may be reviewed by the HCDC to evaluate the timeliness of the project and its ability to proceed. If extenuating circumstances exist, a new timeline for expenditure will be established. If circumstances do not warrant an extension of time, the HCDC may recommend the recapture and reuse of the funds. Budget Considerations In estimating the amount of the proposal or the project budget, applicants should obtain documentation for the costs and consider the following expenses: • Appraisals, legal fees, title opinions and surveying costs for property acquisition projects. • Building permits, engineering or surveying costs, zoning application fees, professional fees, advertising and bidding costs for rehabilitation projects. • Applicants are incentivized to leverage other funds through the scoring criteria. In general, a larger amount of matching funds will be given a higher score during the review process. • Estimates should be realistic. Funds remaining after the proposed work is completed will revert to the CDBG line of credit. • Assistance is typically offered in the form of a loan that is secured by a mortgage on the property for the duration of the compliance period. • Other project costs such as compliance with HUD regulations (audits, labor standards, environmental studies, fair housing, etc.) listed in Part III below should also be included. FY26 CDBG Applicant Guide 5 PART II. Housing Underwriting. Before an applicant may enter an agreement with the City, the applicant must submit updated information such as the project schedule, sources and uses statement, and pro forma to facilitate the underwriting process. All other funding sources must be identified and verification submitted to the City to complete a subsidy layering analysis when multiple public funding sources are utilized. Site Location. One of the City's goals is to encourage the distribution of housing and residential facilities (e.g. permanent housing — rental and homeownership, transitional housing, homeless shelters, and special needs housing) throughout all neighborhoods of Iowa City. To encourage applicants to meet this goal, a greater number of points will be awarded during the scoring process to projects that successfully encourage housing through neighborhoods in Iowa City that traditionally lack affordable options. Pro Forma. Projects that include rental housing are required to complete a pro forma that abides by the City's rules for project underwriting. See Part VI for specific criteria. Applications for rental housing submitted without a pro forma will be considered incomplete and will not be considered. The amount of rent that can be charged to a tenant is restricted based on the limits established by HUD minus any tenant paid utilities. Rental projects must be sustainable for the duration of the compliance period. Rent Limits Effective 6/1/25 for CDBG and HOME Effective SRO Efficiency 1 BDR 2 BDR 3 BDR 4 BDR 5 BDR 6 BDR Low HOME Rent 6/1/2025 $612 $816 $921 $1,105 $1,536 $1,715 $1,891 $2,068 High HOME Rent 6/1/2025 $612 $816 $921 $1,105 $1,548 $1,856 $2,134 $2,413 Fair Market Rent 6/1/2025 $612 $816 $921 $1,105 $1,548 $1,856 $2,134 $2,413 Review your agreement to determine applicable rent limits.All HOME and many CDBG agreements limit rent to the applicable rent limit minus the tenant- paid utility allowance as provided by ICHA or HUD.Example:Tenant pays for electricity only and the utility allowance for electricity is$80.Rent fora one- bedroom HOME-assisted unit cannot exceed$841($921-80)if the HOME agreement restricts rent to the Low HOME rent.lf a HOME-funded project assists five or more units,20%of units must be leased at or below the low HOME rent. The Fair Market Rents(FMR)for units larger than six bedrooms are calculated by adding 15 percent to the four bedroom FMR,for each extra bedroom.FMRs for single-room occupancy units are.75 times the zero bedroom(efficiency)FMR. NOTE:The payment standard for Section 8 tenants may be higher than the rent limits shown here.Regardless of the payment standard,rent cannot exceed the rent limit identified in your agreement minus the tenant paid utliity allowance if included. FY26 CDBG Applicant Guide 6 PART III. Compliance with Federal Regulatory Requirements All agreements will include applicable federal requirements. These include procurement standards for labor, materials, supplies and services not only related to the project but also to the applicant's operation. • No choice limiting actions may be made prior to receiving environmental clearance from the City to move forward with a project. These include but are not limited to include signing contracts, acquisition, demolition, disposition, rehabilitation, repair, new construction, site preparation, and leasing or any other activities that commit to future activities. A choice limiting action jeopardizes all federal funds awarded to a project. • Procurement standards and subcontracting requirements are set forth in 2 Code of Federal Regulations (CFR) Part 200. Purchases and contracting must comply with these standards. • Affirmative efforts shall be made to utilize small and minority-owned businesses or sources of supplies and services. Conflict of Interest rules will also apply. In general, if a contractor helped prepare bid estimated for the application for CDBG funds, the contractor is ineligible for bidding on the project if awarded. • Construction contracts in excess of $2,000 shall comply with the Fair Labor Standards Acts. Specifically, 1) the Davis-Bacon Act which requires contractors to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor, 2) Copeland Anti-Kick Back Act which prohibits employers from inducing employees to give up any part of the compensation to which they are otherwise entitled, and 3) the Contract Work Hours and Safety Standards Act which requires contractors to compute wages on the basis of a standard work week of 40 hours. Work in excess of the standard workweek shall be permissible if the worker is compensated at a rate of 1'/z times the basic rate of pay for all hours worked in excess of 40 hours in the workweek. No worker shall be required to work in unsanitary, dangerous or hazardous surroundings. • Contracts over$10,000 shall contain requirements relating to Equal Employment Opportunity. • Provisions for termination shall also be included in all contracts. • Records should be kept for all procurements. Construction projects for more than $250,000 must utilize the competitive sealed bids (formal advertisement) method of procurement. Procurement by small purchase procedures shall be utilized for projects $250,000 or less. Contracts under $10,000 may use the micro purchase method of procurement. Price or rate quotations shall be obtained from an adequate number of qualified sources under this method. • Contracts in excess of $25,000 shall contain provisions and conditions that allow for administrative, contractual or legal remedies in instances in which contractors violate or breach contract terms. • Contracts in excess of$250,000 shall meet bonding requirements. Minimum bond requirements include: bid guarantee equal to 5% of bid price, performance bond for 100% of contract price and payment bond for 100% of contract price • Projects must comply with any applicable federal requirements including, but not limited to Executive Orders, non-discrimination, equal employment, affirmative marketing, fair housing, lead based paint, Section 3, and/or Build America, Buy America. FY26 CDBG Applicant Guide 7 PART IV. Financial Management, Reporting, and Monitoring Standards for financial management and record keeping are provided in 2 CFR 200. • Each recipient shall have a financial management system that provides effective control over and accountability for all funds, property, and other assets, must identify the source and application of funds for federally assisted activities, and permit the accurate, complete, and timely disclosure of financial results in accordance with the reporting requirements of the City and HUD. • A separate ledger for the CDBG account is strongly recommended. • All project-related expenditures must be supported by third party documentation (invoices, contracts, and purchase orders). Lien waivers are required from all contractors and subcontractors. • Reductions in project costs or increases in the commitment of other funding, if any, shall be brought to the immediate attention of staff. The impacts of these changes must be discussed with staff and appropriate reductions in CDBG funds may be made on a case-by-case basis. • Organizations that expect more than $1,000,000 in federal assistance from all sources are required to have an audit covering the financial activities of the organization as well as the project disbursements as set forth in 2 CFR 200. • City staff will monitor all aspects of the project.Any project changes must be approved by the City. Periodically, staff will review project progress, financial management, construction contracts, time records related to the project, as well as client statistics as identified in the City's monitoring policies. Staff will attempt to give reasonable notice prior to the site visit. • The City of Iowa City requires quarterly reports for public facility projects and has a standardized reporting form. For rental projects,the applicant must complete project close-out forms and submit to the City upon project completion. The period of affordability does not begin until the City has been notified and the data entered into HUD's database. The compliance period will vary depending upon the regulatory requirements and the information contained within the application. • During the compliance period, Neighborhood Services staff will request records relating to the stated purpose of the project to see if goals have been carried out, to review the low and moderate income benefit requirements as established by HUD, and to monitor the financial status of the organization. • For CDBG projects, all records relating to the project should be kept at least four years after the submission of the Consolidated Annual Performance and Evaluation Report (CAPER) in which the activity is reported as complete. The CDBG Agreement should be retained until the end of the compliance period. FY26 CDBG Applicant Guide 8 PART V. Loan Terms and Compliance Housing The interest rate for rental housing activities will be zero percent (0%) for non-profit owned projects and prime rate (determined at the time the agreement is executed by the City) and minus two points for for- profit owned projects with an amortization period up to thirty (30) years or the period of affordability, whichever is less. The City may grant a different interest rate and/or a different repayment option based on the nature of the project including, but not limited to, the revenue generated, the ability to repay a loan, the type of housing provided, the beneficiaries, the amount of other funding leveraged and the location of the site. Public Facilities Public Facility projects as defined in 24 CFR 570.201(c) may be completed by the City and/or subrecipients. Non-governmental subrecipients will receive a conditional occupancy loan, which the City shall secure through a lien, mortgage, or other comparable security against the assisted real property, to only be repaid upon transfer of title, rental of the property, or termination of services or occupancy as outlined in the applicable CDBG Agreement. If the subrecipient fully satisfies the terms outlined in the applicable CDBG Agreement, the security instrument will be released by the City following the successful completion of the compliance period that begins on the date as listed within the applicable CDBG Agreement. If the real property is leased, the lease shall be for a period that matches or exceeds the compliance term of the earned grant. The number of years in the compliance period of a conditional occupancy loan will be calculated by dividing the total amount of CDBG assistance allocated to a subrecipient in any one City fiscal year for a public facility project by $10,000, rounded down. The minimum compliance period is five years (60 months). The maximum compliance period shall be no more than twenty (20) years. For example, $75,000 in CDBG assistance equals a compliance term of 7 years or 84 months. FY26 CDBG Applicant Guide 9 PART VI. Pro Forma Instructions for Rental Housing Projects A pro forma is required for rental acquisition projects at the time of application. The purpose of the pro forma is to demonstrate that the project is financially and to help staff and HCDC make informed recommendations. This form will provide the necessary information in a format that is uniform among all rental housing applicants. The following are instructions for completing the pro forma and some basic information for reference. The pro forma template allows for up to 20 years of information; however, it only needs to be filled out through the project's compliance period. Underwriting is required prior to signing an agreement and an updated pro forma will be required if applicable to ensure information is current for staff review. Please note, cells shown in grey in the pro forma template indicate fields that should be filled out by the applicant. The corresponding fields are marked in gray below in the instructions. The remaining fields will auto-calculate based on inputs if you are using Excel. Revenue escalates at 2% while operating expenses escalate at 3%. If you have any questions about the form or need technical assistance, please call staff at 319-356- 5240. Staff can also help you determine the compliance period for the project. Line Description Instructions Is the total amount of rent generated from the housing units, based on proposed rent levels and expected utility allowance deductions for tenant-paid Line 1 Gross Rental utilities (proposed rents may be less than fair market rent, but cannot exceed Income the rent limits established by HUD. Current rent limits are available online at www.ic v.org/limits. Line 2 Other Income Include laundry income, application or pet fees, and interest income. Line 3 Tenant Include other payments such as parking or storage space. Contributions Line 4 Gross Income Is the sum of Lines 1 through 3. Line 5 Vacancy Loss Line 1 multiplied by 5% (may be increased up to 10% depending on past performance in managing units). Line 6 Effective Gross Line 4 minus Line 5. Income Line 7 Insurance Estimated insurance expense from an agent or similar property. Maintenance & Repairs and replacements are typically 1% of the property's value, though Line 8 Structural Repairs varies depending on building age, condition, size, and use. FY26 CDBG Applicant Guide 10 Line 9 Management May not exceed 10% of Annual Gross Rent, typically 5% to 7%. Fees Line 10 Misc. Operating Legal, accounting, advertising, owner-paid utilities, etc. Expenses Sum of Lines 7-10 shall be no less than $2,750/unit; SRO properties in single family homes shall be considered 0.3 units each. Line 11 Property Tax Estimate available from City Assessor or Johnson County records. Line 12 Reserves Operating reserve no less than $350/unit. Line 13 Total Operating Sum of Lines 7 through 12. Expenses Line 14 Net Operating Line 6 minus Line 13. Income Line 15 Debt Service for List mortgage payments for principal and interest only.Mortgage Debt Service for Total payments for all subordinate mortgages. List mortgage payments for Line 16 Subordinate principal and interest only. Mortgage(s) Line 17 Total Debt Sum of Lines 15 and 16. Service Line 18 Cash Flow Line 14 minus Line 17. Line 18b Equity Investment Amount of funds being invested in the project by the applicant. Line 19 Cash on Cash Line 18 divided by equity investment as shown on the application. ROI Ratio of estimated net operating income to debt service. Line 14 divided by Debt Coverage line 17. After year 3, DCR shall be no less than 1.15 or over 2.00 during the Line 20 Ratio (DCR) affordability period. Encourage 1.20-1.50. If the DSCR exceeds 2.00, the applicant must submit an explanation which staff will take into consideration when reviewing the application. FY26 CDBG Applicant Guide 11 PART VII. FY26 Scoring Criteria BudgetSuggested 1. 00 • . Points 1 Has the applicant provided an itemized project budget detailed enough to determine that the proposed expenditures have been researched, documented and are deemed reasonable? a. Based on Sources and Uses of Funds, budget appears 20 accurate, comprehensive, and detailed. Costs are clearly documented and appear reasonable and justified. b. Based on Sources and Uses of Funds, budget appears mostly 15 Section C (Source accurate, comprehensive, and detailed. Costs are mostly of Funds) documented and appear reasonable and justified. Section D (Use of c. Based on Sources and Uses of Funds, budget appears 10 Funds) reasonable, but not clear, comprehensive, or detailed. The budget is substantively mathematically correct(i.e. minor errors noted), and/or does not appear complete. d. Based on Sources and Uses of Funds, budget appears 0 questionable and/or unreasonable. The budget is substantively mathematically incorrect. 2 Did the agency submit evidence of financial commitment (Example: loan commitment letter from a bank)for sources listed in the project budget? a. Evidence of financial commitment provided for all applicable 20 Section C (Source sources listed in the project budget. of Funds) b. Evidence of financial commitment provided for most sources 15 Section G listed in the project budget. (Required c. Evidence of financial commitment provided for some of the 10 Documents) sources listed in the project budget. d. Other sources of financing not committed or no documentation 0 submitted. 3 What percentage of funds has the agency leveraged for the Section C Source project? a. 76-99 percent 20 of Funds) b. 51-75 percent 15 Section G c. 26-50 percent 10 (Required d. 25 percent or less 5 Documents) 4 Does the project leverage community partnerships and/or volunteer resources? a. The project proposal demonstrates numerous community 20 partnerships and/or volunteer resources and they are described in detail. b. The project proposal demonstrates some community 15 Question C.3 partnerships and/or volunteer resources. c. The project proposal demonstrates few community partnerships 10 and/or volunteer resources. d. Proposal does not demonstrate community partnerships and/or 0 volunteer resources. 5 Has the applicant demonstrated that they have the resources Section C (Source and fiscal capacity to successfully complete the proposed of Funds) project? Section D (Use of a. The applicant has clearly demonstrated that they have the 20 Funds) resources and fiscal capacity to successfully complete the Section G proposed project. (Required b. The applicant has mostly demonstrated that they have the 15 Documents) resources and fiscal capacity to successfully complete the Section F (Agency proposed project. Capacity) FY26 CDBG Applicant Guide 12 c. The applicant has somewhat demonstrated that they have the 10 resources and fiscal capacity to successfully complete the proposed project. d. The applicant does not have the resources or fiscal capacity to 0 complete the proposed project or it is unclear based on the proposal. Total Section I Points Suggested 11. Feasibility and Community Impact (Max 00 • . Points 6 What primary percent of median income persons are targeted? a. 0-30 percent 20 b. 31-50 percent 15 Question EA c. 51-60 percent 10 d. 61-80% 5 7 Will the project assist any special populations including those that typically have barriers to accessing services (Example: people experiencing homelessness or people with Public Facilities: disabilities)? Question E.2 and a. The proposal clearly demonstrates that the project assists one or 20 E.7 morespecial populations. b. The proposal somewhat demonstrates that the project assists 15 Rental Acquisition: one or morespecial populations. E.2 and E.10 c. The proposal mentions that the project may assist one or more 10 special populations, but it is not certain. d. The project does not assist a special population or it is unclear if 0 a s ecial population is assisted. 8 Does the project encourage housing through all neighborhoods? a. The project clearly demonstrates that it will support the goal of 20 encouraging housing and residential facilities through all neighborhoods in Iowa City. The project expands access to neighborhoods that traditionally lack affordable options and the Public Facilities: NA applicant provides useful data to support their conclusion. (select d) b. The project somewhat demonstrates that it will support the goal 15 of encouraging housing and residential facilities through all Rental Acquisition: neighborhoods in Iowa City. The project somewhat expands Questions E.3, EA, access to neighborhoods that traditionally lack affordable options and E.5 and the applicant provides some data to support their conclusion. c. The project provides housing in neighborhoods that have a 10 concentration of affordable housing opportunities. d. Not applicable, proposal does not include a housing activity 20 (Example: public facility improvements). 9 Does the project schedule adequately demonstrate the project will be completed within the required timeperiod? a. The project timeline is realistic and the project will proceed 20 immediately when funds are available. Public Facilities: b. The project timeline is mostly realistic and/or the project will 15 Question E.3 proceed soon after funds are available. Rental Acquisition: c. The project timeline is somewhat realistic and will proceed within 10 Question E.6 a reasonable time period. d. The project timeline is unclear or the project is not ready to 0 proceed or the project is likely to cause CDBG timeliness concerns. 10 Will the project promote long-term, efficient use of funding Public Facilities: (covering the compliance period at a minimum)? Question EA FY26 CDBG Applicant Guide 13 a. The proposal clearly demonstrates the long-term, efficient use of 20 funding which meets or exceeds the required compliance period. Rental Acquisition: The project appears to be sustainable. Question E.7 and b. The proposal mostly demonstrates the long-term, efficient use of 15 Pro Forma funding which meets or exceeds the required compliance period. The project mostly appears to be sustainable. c. The proposal somewhat demonstrates long-term, efficient use of 10 funding that covers the required compliance period. The project somwhat seems sustainable. d. The proposal does not demonstrate long-term, efficient use of 0 funding and/or does not cover the required compliance period. The project is unsustainable or is unclear. Total Section II Points ApplicantSuggested Ill. Capacity and - . Points Reference Has the applicant successfully completed federally funded 11 projects through the City of Iowa City of equal or larger scale in the last five years without compliance issues? Points a. Yes, the agency has completed federally funded projects through the City of equal or larger scale in the last five years without compliance issues. 20 Section F (Agency b. The agency has completed federally funded projects through the Capacity) City of a smaller scale in the last five years without compliance Section G issues. 10 (Required Uploads) c. The agency has completed federally funded projects through the City of equal or larger scale resulting in compliance issues in the last 5 years. 0 d. The agency has not completed a federally funded project through the City of any scale. 0 12 Has the agency demonstrated experience with relevant project specific federal requirements that may apply to the proposed project such as Build America, Buy America, Davis Bacon or Section 3? a. Yes, adequate experience demonstrated or the project is not 20 Section F (Agency anticipated to havespecial requirements. Capacity) b.Adequate experience is mostly demonstrated with relevant 15 Section G project specific requirements. (Required Uploads) c. Experience is somewhat demonstrated with relevant project 10 specific requirements. d. No experience or inadequate demonstration of experience with 0 project specific requirements. 13 Has the agency effectively described demand for project and explained the relevant factors to help verify need for the proposedproject? a. Yes, the agency has clearly described the demand and 20 explained the relevant factors to help verify need for the proposed project. b. Yes, the agency has mostly described the demand and 15 Question F.6 explained the relevant factors to help verify need for the proposed project. c. The agency has somewhat described the demand and explained 10 the relevant factors to help verify need for the proposed project. d. The agency has not described demand and/or failed to 0 demonstrate the need or it is unclear based on the proposal/lacks evidence. FY26 CDBG Applicant Guide 14 14 Does the agency have sufficient staff resources, technical expertise, and experience to carry out the project based on the informationprovided? Score between 0 to 20 with 20 being the highest level of 0-20 sufficiency, expertise, and experience. Section F (Agency Capacity) Section G (Required Uploads) 15 Does the project promote racial equity and inclusivity for marginalized populations? a. The proposal clearly documents that the project will promote 20 racial equity and inclusivity for marginalized populations. Public Facilities - b. The proposal mostly documents that the project will promote 15 Question E.7 racial equity and inclusivity for marginalized populations. Rental Acquisition - c. The project somewhat promotes racial equity and inclusivity for 10 Question E.10 marginalized populations. d. The project does not promote racial equity and inclusivity for 0 marginalized populations or it is unclear based on the proposal. 16 Does the project incorporate sustainability initiatives (Example: Energy Star appliances or solar)? a. The project proposal strongly incorporates sustainability 20 initiatives where possible that support the City's climate related goals and actions outlined in the Climate Action Plan. Public Facilities - b. The project proposal mostly incorporates sustainability initiatives 15 Question E.6 where possible that support the City's climate related goals and Rental Acquisition - actions outlined in the Climate Action Plan. Questions E.9 c. The project proposal somewhat incorporates sustainability 10 initiatives that support the City's climate related goals and actions outlined in the Climate Action Plan. d. The project proposal does not include sustainability initiatives or 0 it is unclear based on the proposal. 17 Overall quality of submission. Score between 0 to 20 with 20 being the highest quality of 0-20 All submission. Total Section III Points PointsSuggested IV. Bonus Points 18 Letter/s of support for the project submitted from community 2 or anizations. Section G 19 Is the applicant a certified Community Housing Development Question A.5; Staff Organization CHDO in good standing? 2 Information 20 Is the applicant a nonprofit housing developer in good standing? Question A.5; Staff 2 Information Total Bonus Points FY26 CDBG Applicant Guide 15 Agenda Item #8 FY26 Non-Legacy Aid to Agencies Applicant Guide Overview Aid to Agencies provides flexible operational funding for nonprofits serving Iowa City residents with low to moderate income. The City of Iowa City expects to have approximately $30,000 available for FY26 for the Non-Legacy funding round. Eligibility Information • This application is for 501 c3 non-profit organizations in good standing that have not been awarded City of Iowa City Legacy Aid to Agencies funding. • Low-to-moderate income limits are established by the U.S. Department of Housing and Urban Development for Iowa City. Current limits are available at www.icgov.org/limits. • To be considered for funding, proposals must address one of the following community- identified priorities. There will be additional prioritization for agencies serving populations with high barriers to accessing services including with not limited to, immigrants and refugees, elderly populations, persons with disabilities, and survivors of domestic violence. o Homeless and Shelter Services o Food Insecurity o Healthcare (includes mental & behavioral health) o Childcare and Youth Services o Housing Stability Services o Transportation • Each agency is eligible to apply for up to $15,000. If awarded, the minimum grant amount is $5,000. • Per Resolution 23-320, eligibility to apply is not a guarantee of funding and Non-Legacy Aid to Agencies should not be expected to be an ongoing or permanent funding source. Tentative Timeline for FY26 Non-Legacy Aid to Agencies Applications are due Wednesday, July 16, 2025 at 12pm. Applications received after this deadline will not be considered for funding. No exceptions will be made for late submissions. Date/Deadline Description June 16, 2025 FY26 Non-Legacy Aid to Agencies applications are available. July 16, 2025 FY26 Non-Legacy Aid to Agencies Applications due to City of Iowa City (due by 12pm) by noon (12pm). August 1, 2025 Staff funding recommendations submitted to the Housing and Community Development Commission. August 18, 2025 Housing and Community Development Commission meeting. Commissioners will make award recommendations to City Council for Non-Legacy Aid to Agencies funding. September 2, 2025 City Council review and approval of final awards. Dates may be subject to change. Additional Notes • Agreements for Non-Legacy Aid to Agencies funding typically run July 1 to June 30. The Non-Legacy Aid to Agencies process was delayed for FY26 and the first payment for agencies awarded is anticipated to be made in the fall. • Reporting requirements include: o Submission of recipient's most recent annual report (describing general agency activities) by September 31, 2025. o Submission of biannual progress reports due no later than January 31, 2026 and June 30, 2026. • Audit requirements: o If recipient has undergone a full audit provide a copy of the most recent audit by September 31, 2025. o If recipient has not undergone a full audit provide a copy of the most recent tax form (990) by September 31, 2025. o Provide a year end profit and loss statement approved by the recipient's Board of Directors by September 31, 2025. • Please be advised that changes to the City's public services allocation process are expected in upcoming fiscal years as specified in City Steps 2030. The plan is available online at www.icgov.org/2030. Questions Questions can be directed to staff: • Sam Turnbull, Grants Specialist - surnbull@iowa-city.org or 319-356-5237 • Brianna Thul, Senior Community Development Planner- bthul@iowa-city.org or 319- 356-5240 Agenda Item #9 Brianna Thul From: City of Iowa City: Do Not Reply <CityoflowaCity@public.govdelivery.com> Sent: Monday,July 7, 2025 9:31 AM To: Brianna Thul Subject: City Council extends Fare Free Transit Program SHARE Having trouble viewing this email? View it as a Web page. City of 10WACITY FOR IMMEDIATE RELEASE Date: 07/07/2025 Contact: Darian Nagle-Lamm, Transportation Director Phone: 319-356-5156 City Council extends Fare Free Transit Program As Iowa City Transit's two-year fare free pilot program nears its conclusion, the City Council has voted to extend the program citing its positive impacts on ridership, sustainability, and economic development goals. Launched in August 2023, the fare free program was designed to remove barriers to public transit, boost ridership, and reduce carbon emissions, which are key goals of the City's Climate Action Plan. Transit ridership is expected to rise by an impressive 68% by the end of the pilot this coming August, which is an annual increase of approximately 710,000 trips. This growth demonstrates the community's strong support for the program. While national transit ridership has rebounded to 85% of pre-pandemic levels, Iowa City Transit's ridership is projected to reach 118% of pre- pandemic levels by the end of this fiscal year. Iowa City Transit riders reaped the benefits of a program designed to make lives easier and commutes more affordable with $3 million in fare savings put back into their pockets. The surge in ridership also delivered substantial environmental benefits for the larger community. Transportation emissions in Iowa City decreased for the first time in five years following the adoption of Fare Free service, with nearly 1.8 million fewer vehicle miles driven within city limits between 2024 and 2023. Increased transit ridership contributed substantially to that reduction, which not only cuts down on carbon emissions from driving but also makes streets safer for biking and walking by reducing the number of cars on the road. With support from the City Council and City staff, the Fare Free program will continue through fiscal year 2026, which runs from July 1, 2025, through June 30, 2026. To ensure the program's financial sustainability, funding will be reviewed annually as part of the City's budget process. Learn more 1 For more information about the fare-free program, visit icgov.org/farefree. For bus schedules, visit icgov.org/busschedules, or download the Transit app for real-time updates. I ! �� �� A •�i � Questions? -�•�_ Contact Us CITY OF 10%VA CITY uPAsco uTv OF utcRAtua STAY CONNECTED: Edo ® 50 0 SUBSCRIBER SERVICES: Manage Preferences I Unsubscribe I Help This email was sent to bthul@iowa-city.org using GovDelivery Communications Cloud on behalf of:City of Q Iowa City•410 E Washington Street- Iowa City,IA 52240 90VDELIVERY 2