HomeMy WebLinkAbout08-19-2010 Housing & Community Development Commission
AGENDA
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
LOBBY CONFERENCE ROOM, CITY HALL
THURSDAY, AUGUST 19, 2010
6:30 P.M.
1 . Call Meeting to Order
2. Approval of the June 30, 2010 Minutes
3. Public Comment of Items Not on the Agenda
4. Staff/Commission Comment
5. Review and Discuss the Allocation Process for Anticipated and Recently
Received CDBG Program Income
6. Select HCDC Member to Represent the Commission during the City
Manager Hiring Process
7. Discuss Revised CDBG & HOME Program Investment Policies for Public
Facility Projects - Recommendation to Council
8. Adjournment
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CITY OF IOWA CITY
MEMORANDUM
TO:
FROM:
DATE:
RE:
Housing and Community Development Commission
Community Development Staff
August 16, 2010
August Meeting Packet
The following is a short description of the August agenda items. The Community
Development Celebration is the same day as the HCDC meeting. We encourage you to attend
the celebration that starts at 4:30 PM at First Mennonite Church - Home Ties Addition (invite
enclosed). The awards ceremony is at 5:00 and is typically about a half hour. The HCDC
meeting will begin at 6:30 PM in City Hall, Lobby Conference Room.
Review and Discuss the Allocation Process for Anticipated and Recently Received
CDBG Program Income.
In June the City sold the Sheridan property that was formerly owned by Hannah's Blessing.
This non-profit was awarded CDBG funds to acquire the facility to operate as a child care
center. The non-profit dissolved and chose to deed the property to the City as opposed to
foreclosure. The proceeds of the sale, approximately $100,000, are considered program
income and must be reallocated to a CDBG eligible project.
Aniston Village, LP, a Low Income Housing Tax Credit Project, in Iowa City was awarded
$2.9 million in Iowa CDBG Disaster Recovery Housing Funds through the Iowa Department
of Economic Development to finance the construction of 22 homes for affordable rental
housing. When Aniston Village LP secures permanent financing, the construction loan of
$2.9 million will be repaid to the City and receipted as program income to be used in the
City's regular CDBG entitlement program. Repayment is expected no later than May of
2011. On August 17 the City Council will decide if $1.9 million of these funds will be
allocated to the west side levee project that will protect approximately 160 mobile homes
and over 20 businesses, mostly in the 1 OO-year floodplain. This area is considered a low-
to-moderate income census area.
The Commission will discuss the process and timeline to reallocate CDBG program income
funds and make a recommendation to Council.
Select HCDC Member to Represent the Commission during the City Manager Hiring
Process
The City Council would like to involve the chairs of all City Boards and Commissions in the
search for a new City Manager by allowing them to participate in the process. A Meet and
Greet event will be scheduled on September 27,28 or 29.
It is the intention of Council to have the same Commission person involved in all the interviews
that week. The August meeting is the last meeting for Brian, our outgoing Chair. HCDC will
be electing their new Chair on September 16. HCDC will need to designate a commission
member that is able to commit to the interview process prior to the beginning of the process.
Because of the number of Boards and Commissions the City will make an attempt to divide
and schedule in smaller groups.
Discuss Revised CDBG & HOME Program Investment Policies for Public Facility
Projects - Recommendation to Council.
Staff is proposing an amendment to the existing policy for public facility projects that caps the
compliance period at 20 years, regardless of the amount of funds allocated to the project. The
amendment is enclosed for your review. Staff will discuss the details at the meeting.
If you have any questions about the agenda, or are unable to attend the meeting, please
contact Tracy Hightshoe at 356-5244 or by email at tracy-hiqhtshoe@iowa-citY.orq.
MINUTES
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
JUNE 30, 2010 - 6:30 PM
EMMA HARVAT HALL, CITY HALL
PRELIMINARY
MEMBERS PRESENT:
Andrew Chappell, Andy Douglas, Jarrod Gatlin, Holly Jane Hart,
Michael McKay, Rebecca McMurray, Brian Richman
MEMBERS ABSENT:
Charlie Drum, Rachel Zimmermann Smith
STAFF PRESENT:
Tracy Hightshoe, Steve Long, Linda Severson, Kristin Watson
OTHERS PRESENT:
Charlie Eastham
RECOMMENDATIONS TO THE CITY COUNCIL:
CALL TO ORDER:
The meeting was called to order by Chairperson Brian Richman at 6:30 p.m.
APPROVAL OF THE APRIL 15, 2010 MEETING MINUTES:
Chappell motioned to approve the minutes.
McKay seconded.
The motion carried 5-0 (Douglas and McMurray not present at time of vote; Drum and
Zimmermann Smith absent).
PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA:
None.
STAFF/COMMISSION COMMENT:
Long said that the City had purchased four more properties through the flood buyout program,
bringing the number of homes acquired by the City to approximately 50. Richman asked what
would happen to the properties acquired by the City. Long said the properties would become
open space. Long said that out of 137 flooded homes, there were only 39 left that had not been
bought out. Long said the long-term goal would be to acquire all of the homes in areas such as
Normandy Drive and dedicate the properties to open space.
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Long said that the lottery drawing had been held for the Single Family New Homes Program; a
program funded by flood recovery dollars to replace housing stock eradicated by the floods. He
said that 40 homes have already been built; the lottery was for the additional 37 homes that are
in the process of being built. Long said that staff anticipates that 28 of the homes will be done
this autumn. Hart asked where the homes were located. Long said that the homes are
scattered all throughout the community.
Fair Housing Presentation bv the Iowa City Human Rights Department:
Kristin Watson noted that she had spoken to the Commission before, and asked if they wished
to hear her standard presentation on the history of human rights issues and housing, or if they
preferred to be updated on the specific changes to the federal Americans with Disabilities Act
(ADA) that have recently been passed. The Commission indicated a desire to hear the ADA
updates. Watson noted that she had a handout that would give Commissioners the information
typically contained in her overview presentation.
Watson said that there are no real "rules" yet for the changes to the ADA, as the public
comment period on the legislation had just ended in November 2009. She said that it could take
the federal government another year or so to get the rules out.
The ADA was enacted in 1990. She said that the law was almost immediately reined in by the
courts, which made decisions limiting the scope of the law, thereby limiting its effectiveness.
Watson said that in 2008 the legislature attempted to correct what it saw as unfair
interpretations of courts that were not in keeping with the original intent of the law. As a result,
the legislature passed this updated legislation.
Watson said one of the key questions to be argued in the courts was what actually constituted a
"disability." Watson said it had become increasingly difficult for people to prove that they were
actually disabled. She said the basic definition said that "a disability is a physical or mental
impairment that substantially limits one or more major life activities." She said that while this
might sound like a reasonable definition, there was extensive argument in the courts about what
this actually meant, often resulting in huge obstacles to plaintiffs who felt that they had been
discriminated against due to their disability and were seeking redress through the courts.
Watson said that the amendments to the ADA were intended to lower the threshold for
"disability" and to direct the courts to construe the language in favor of broad coverage.
Another point of argument in the original definition was what constituted "a major life activity."
Congress specified a list of activities and major bodily functions in order to be clear what is
considered a "major life activity." Watson said that often there were arguments in the courts
over whether a person was disabled enough to be considered "disabled." In the case of
diabetes, Watson noted, one person might be seriously debilitated by the disease and another
might be less so: same disease, but only one would be considered disabled under the old
reading. Under the new rules, they would both be considered disabled.
Watson said that another point that had been argued in the courts was "mitigating measures."
She said that the courts put people in a terrible position by saying that if there was an assistive
device, technology or medication that made the condition less disabling, then that person might
not be considered disabled. Congress said in the new rules that mitigating measures cannot be
counted "against" someone in determining whether or not they are disabled. She said the idea
was that even if, for example, a person's diabetes can be controlled by medication, it still affects
that person's life and can disable them.
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Watson said that in the past, courts had disallowed conditions that were "episodic" or in
"remission" from qualifying as a disability. Watson said that under the new rules, if a person has
a condition that is not presently active but would be disabling if it were active, that person
remains disabled even during periods of remission. She said conditions such as diabetes,
asthma, depression, cancer, epilepsy and bi-polar disorder often were argued over in the courts.
Hightshoe asked if these definitions of disability covered all federal programs, or if it was just to
get on disability or for employment discrimination. Watson said the list she was quoting is from
the Equal Employment Opportunity Commission (EEOC), so its context is employment. The
ADA itself, she said, covers both. Further, she said, the Fair Housing Act covers disability as a
protected status, so the definitions all cross over. McKay asked if the EEOC list meant that a
given disability would be treated the same way under the Fair Housing Act. Watson said she
would not say that across the board, but that the EEOC is a good guide. She said that the Fair
Housing Act has the same definition of disability as the ADA, so it would make sense if the
analysis also crossed over.
Richman said that the Commission's primary role is in developing new affordable housing
and/or rehabilitating existing affordable housing. He asked how the changes to the ADA are
likely to impact any of that. Watson said there are two prongs of fair housing issues: zoning
issues and landlord/tenant type issues. Watson said that there are often ADA issues that arise
in terms of accessibility and building standards. Watson said that section 504 of the
Rehabilitation Act is probably quite pertinent to the Commission's work because it impacts all
federally funded programs. Watson said that frequently when lawsuits happen they are "kitchen
sink" type things, with as many laws cited as possible because one of the grounds might stick
and the others might get thrown out. Watson said that examples of problems the Commission
could run into would be much more subtle than housing discrimination historically, which dealt
with blatantly discriminatory covenants and zoning codes. She said it once was quite common
for subdivisions and developments to have covenants stating that the homes could not be sold
to anyone other than white Christians. Long noted that in the abstract for one of the homes
purchased by the City in the buy-out there was a clause stating that the home could not be sold
to a non-white person. Watson said such covenants were not outlawed until 1948.
McKay asked if any of the ADA changes that just came out would really significantly impact
housing. McKay asked what the affect on access to housing would be for someone that could
now be classified as disabled because of their diabetes. Watson said that it may be an issue of
landlord/renter perception. She said that diabetes may not be a huge impediment to renting, but
it could be to employment. She said that there are lots of disabilities that might be restrictive
from a landlord's point of view. Watson said that her office most commonly hears complaints
about being discriminated against because of a mental disability. Often times, such people will
have been determined not to be disabled enough to live in a group home or institution, but face
discrimination in finding an apartment to rent.
Hightshoe asked what an affordable housing provider would be required to do in a case where
there is an older unit and a potential renter with a mobility-impairment. Watson said that the
provider is obligated to make reasonable accommodations for the disability; she acknowledged
that the term "reasonable" had led to a lot of legal arguments. Watson said that what is
reasonable depends on the means and needs of both the tenant and the landlord. Watson
said that buildings constructed after 1993 are required to be accessible. The questions arise for
buildings constructed prior to 1993, and what is "reasonable" to do in order to make them
accessible. Watson said that the tenant and landlord have to engage in an interactive process,
wherein the tenant asks for an accommodation and the landlord and tenant determine if the
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JUNE 30, 2010
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request is reasonable and feasible. She noted that the landlord does not have to give the
tenant whatever the tenant desires. She also noted that the landlord cannot ask about a
disability prior to an accommodation request. However, once an accommodation request is
made, the tenant can be required to demonstrate why the accommodation is necessary.
Watson said that one area where this comes into play is in service animals. She said that if a
tenant is blind and has a guide dog, the relationship is fairly obvious and straightforward.
Whereas if a tenant says that they have a mental disability and that their cat is a therapy animal
for emotional assistance, the need for the accommodation might not be so readily apparent to a
landlord, and additional information/documentation may be required.
McKay asked to what extent a housing provider funded by HCDC would have to make a house
they were rehabilitating ADA compliant. He asked if the provider would be required to put in
ramps and widen doorways. Watson said that is where the test for reasonable accommodation
comes into play. She said those types of things would have to be reviewed on a case-by-case
basis. Any new construction would have to meet all federal guidelines.
Long noted a section on page four of Watson's handout that outlined what could not be
discriminated against. Long said that was probably something that the Commission could keep
in mind as they were allocating money. Watson said that federal, state and local laws are
different. Watson said that in our legal system a state law cannot do anything opposing federal
law or contravening its purpose, but it can expand upon it and change the details of it. Watson
said that in this case the federal Fair Housing Act covers race, color, national origin, sex,
religion, family status and disability, Iowa's law adds sexual orientation, gender identity,
retaliation and creed, and Iowa City adds public assistance as a source of income, marital
status, presence or absence of dependents, and age.
Watson said that discrimination in housing sometimes manifests in the following ways: refusing
to rent or sell to a person, representing that a unit is not available, showing people homes in
only certain neighborhoods, not giving information on financial status (such as different types of
bank loans available), and discriminatory advertising (specifying the "type" of renter desired).
She said that marketing to a certain population is within the bounds of the law. She gave the
example of The Lodge which caters to students. She said it is fine to cater to students and
market to them; however, The Lodge could not refuse to rent to a family on the basis that they
have children.
Richman asked if there were any other questions from the Commission; there were none.
Long noted that this briefing had been scheduled long before the City had received a letter from
The Housing Fellowship alleging potential violation of the Fair Housing Act by the City for
refusing to approve a specific site for a low-income housing project. Long said that the
Commission would be updated on that matter when the City Attorney's Office had finished
reviewing it.
Watson thanked the Commission for their time.
Discussion of the City of Iowa City Human Services Aaency Fundina:
Long said that a City Council member had recommended that the Aid to Agencies process be
reviewed. Long said that Linda Severson of the Johnson County Council of Governments
(JCCOG) was present to discuss the matter, and was very familiar with that process.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
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Long said that Aid to Agencies basically provides operational funding for 13-15 non-profit
agencies in Iowa City. Long said that money is pooled from the general fund, CDBG, and some
funds from utilities to provide this funding. Long said that at present, two City Council members
sit down with Severson each year and review the applications for funding and make
recommendations to City Council. One City Council member has suggested taking a look at the
possibility of HCDC absorbing that $425,000 and looking at all of the public service agencies
together and then making a recommendation to the City Council. Long said that Severson
would continue to assist with the process, as she is quite knowledgeable on the subject.
Severson said that Aid to Agencies funds 13-14 agencies each year. The application is a joint-
funding application completed by agencies requesting funds from Iowa City, Coralville, Johnson
County and/or United Way. The joint application is so that each of the funding sources can be
sure to have the same information, and to make the application process easier for the non-profit
agencies. Severson said the application is somewhat more in depth than the CDBG/HOME
application and requests information on the requestor's short-term and long-term goals,
demographic information on their clientele, staffing questions, and collaborative efforts.
Severson said each applicant is asked to provide a balance sheet and a budget, with a three-
year view. Information is requested on the organizational structure of the agency, including
information on its Board of Directors, non-monetary sources of support (such as volunteer time),
and other grants/funding sources. Severson said the application spans approximately 15
pages, and the broader, more in-depth nature of the application is because the support being
provided is also broader and is for operational expenses. Severson pointed out that
CDBG/HOME applications tend to be project-specific, whereas Aid to Agencies is intended to
support the agency as a whole or for a specific program within the agency.
Severson said that if HCDC decides to take the Aid to Agencies process on, then it might gain
some insight and knowledge that would help in its own allocation process, as many of the
applying agencies are the same. Severson said that site visits are a part of the application
process.
Richman asked if the list of agencies that are funded is fairly consistent from year to year;
Severson said that it is. Severson said that the program tends to be pretty flexible as to how the
agencies spend the money because so many other funding sources have specific requirements
for how it is spent. She gave the example of the Free Medical Clinic, which uses Aid to Agency
money to pay its utility bills; they are able to get other funding sources for medications and
medical tests, but they need lights and heat to be able to actually see patients. Severson said
she believed that this flexibility is something the agencies really appreciate about this funding.
Chappell asked what the timing of the application process is. Severson said that applications
are due September 1 st and she tries to get them to the City Council by November. She said the
timeline and start date are similar to that of the CDBG/HOME process. Douglas asked if the
idea would be to discuss four categories during the allocation process, rather than three. Long
said that was a possibility, or Aid to Agencies could be considered separately.
Severson said the funding tends to continue from year to year with Aid to Agencies, whereas
with CDBG, the funding tends to be more project based with a specific start and end. Richman
asked what the City Council rationale was for suggesting this responsibility be moved over to
HCDC. Long and Severson did not know the reason for the request.
Hart noted that in the past there was some discussion on the Council's part of removing the
CDBG/HOME allocation process from HCDC altogether. Hart said that her understanding was
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that one of the reasons Aid to Agencies existed was because the agencies relied on it for major
operational expenses, some of which were tied to the need to have guaranteed income for
future years. Long said it was possible, but that there is still no guarantee from year to year.
Hightshoe said that her understanding is that City Council just wants to know if HCDC is
interested in reviewing the process; if HCDC wanted to take it on or to dramatically change the
funding process then they would have to go back to Council to do that.
Chappell asked if the Council member who requested that this be considered is one of the
Council members who currently participates in the review of Aid to Agencies applications. Long
said that he is not sure which Council member made the request, but that his understanding is
that the Council member has reviewed Aid to Agencies applications in the past.
Chappell asked what criteria Severson and the two reviewing Council members used to
evaluate the applications. Severson said that she provides information and finds answers to
questions; the Council members determine dollar amounts. Chappell asked if there was a
ranking system and Severson said there was not.
Chappell said that he does not have a problem doing more work if the Council thinks HCDC
should take this on. He said it was an interesting request; however, he is concerned that the
Commission's name, by-laws and the resolution creating it would all have to be amended to
accommodate that request, unless community development was considered in its broadest
sense. Chappell said that if the Aid to Agencies funding cycle did not run directly parallel to the
HCDC funding cycle that would be more convenient, because adding an entirely separate
funding process on at the busiest time of the year is not ideal. He said that if the applying
agencies are largely the same for both funding sources, it may not be realistic to expect entirely
independent reviews.
Richman said that historically the amount that HCDC has available to allocate for Public
Services is on the order of $10,000. He said that if the Commission takes on Aid to Agencies, it
might make more sense to just roll that $10,000 into Aid to Agencies to avoid going through the
same process twice to allocate operating dollars to agencies.
Hightshoe noted that one of HCDC's bylaws states that one of the Commission's duties is to
review and make recommendations to Council regarding the use of public funds to meet the
needs of low-to-moderate income residents. Chappell asked if all of the applying agencies
would serve low-to-moderate income residents. Severson said the vast majority of them do, but
she would have to look into it to be sure. She said that in the past they have looked more
closely at the services the agency provided than at the income level served.
Severson noted that Aid to Agencies applications are due in September and the CDBG
applications are due in January. Timing-wise, the Commission could look at Aid to Agencies as
more of an autumn activity rather than running parallel to the CDBG/HOME application process.
Long pointed out that if that were done then it would still work to estimate $10,000 of Public
Services money is added to the Aid to Agencies funding. Long said that one thing that is nice
about keeping the Public Services amounts small is that it does allow for new, smaller
applicants to come into the funding. He said that $2,500 sometimes makes all the difference for
a start-up. McMurray said that at one point HCDC had discussed the idea of disallowing Public
Services funding for anyone already receiving Aid to Agencies, but that they had never followed
through with the idea. She said that idea was intended to encourage new applicants.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
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Richman asked if anyone had any specific thoughts about advantages or disadvantages to
HCDC taking on this process. Hart said it interests her to know who made the request. She
wondered if it was the case that the funding process had become too politicized or if the
requesting member simply wanted another set of eyes on the process. Chappell said that there
could be a perception that the two individuals making the recommendations to the rest of the
Council play too big a role in the funding process, noting that this was pure speculation. McKay
said that he felt that the Commission was broad enough and big enough that there are many
different approaches to thinking about these issues, and that might be a healthier way of
allocating the money. To him, it would provide a better chance at objectivity. Chappell said it
may also be that the City Council as a whole might feel more comfortable changing or going
against recommendations that come from an outside body rather than two of its own members.
Hightshoe said she could see both advantages and disadvantages. She said that as she sees it
the advantages are: 1) an appearance of greater objectivity, 2) being able to combine the Public
Services money with the Aid to Agency money, and 3) it could address the criticism that Aid to
Agencies funding does not always match the priorities listed in CITY STEPS. Hightshoe said
the greatest disadvantage is that it is more work and an additional 15-16 applications per year
will be much more time consuming. Severson said that staff does not know what kind of City
Council support there is for making this move; they only know that one person made the request
that the idea be examined. She said that she does not have a good sense for whether or not
this will actually go anywhere.
Severson said that funding amounts vary from approximately $5,000 to $60,000 per year for
agencies. She said that last year a new agency had been funded, and a fairly big agency had
their usual funding reduced. She said the Council members stated the reduction was because
the money amounted to a fairly small percentage of the agency's budget and so would not be
overly painful, and had nothing to do with service delivery or administration. Severson said that
for some agencies Aid to Agencies is a significant percentage of their budget. Douglas asked
what the ratio generally was between funds requested and funds rewarded. Severson said that
there is always much more requested than is rewarded, generally about twice the amount.
Severson said that she believed that at one point in time agencies were directed not to request
more than a 3-5% increase in operational funding from Aid to Agencies. Additionally, agencies
have been asked to request only what they need, with the understanding that full funding is
unlikely.
Richman asked if it was correct that the Commission did not really need to make a motion on
this item one way or the other; that the discussion was intended as a way of gathering
information on the matter. Long said that a recommendation on whether or not HCDC wished to
pursue the idea might be helpful. Chappell said that he does not have any problem with doing
the work if the City Council decides they want the Commission to do it; however, he said he had
some problem with the idea of making a recommendation that the Commission wants it or wants
to pursue it because he does not want to give the perception that the Commission is seeking to
expand its area of influence. He said he has no objection to it, and if it comes to pass his
preference would be to front-load the application process to the autumn months to avoid two
parallel allocation processes. McKay said he felt much the same way. Douglas said it seems in
some ways like a natural fit for the Commission and he would not mind taking it on. McMurray
said she would be fine with taking it on, and Hart and Drum indicated that they too were fine
with that.
Richman said his impression of the Commission's feeling on the subject is that if City Council
allocates this responsibility to the Commission, there is a willingness among Commissioners to
do it. Agreement with this statement was indicated. Severson noted that it is her understanding
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
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that she would continue to staff this particular process, and that she felt she and the
Commission could work well together on it.
Discussion of $2.9 Million in Anticipated Proaram Income to be Allocated for a Levee on
the West Side of the Iowa River and Other Proiects:
Long explained that the Aniston Village project, a project of The Housing Fellowship, was
awarded $2.9 million in supplemental disaster CDBG funds in October 2009 for construction
financing of a 22-unit low-income housing ta.x-credit project. Long said this project is moving
along nicely. Long said this construction loan is to be paid back to the City as administrator of
the loan even though the funds were from the State. When the loan is paid off in May 2011, the
City will receive $2.9 million. Long said the Commission needed to start thinking about how it
wished to spend those funds. He said that there is a whole public process to be gone through
before committing any funds, as well as amending the Action Plan, so this is just the beginning
of the discussion.
Long said that the City had hired a consultant after the 2008 floods to do some future planning
for flood mitigation. Long said that the proposed west levee extends essentially from the
railroad tracks just north of Commercial Court all the way down to the new McCollister Bridge.
Long said that the reason this is coming up right now is because there was a round of I-JOBS
funds that were announced this spring which have an application due date of August 2nd. In
order to apply for those funds, Council approval must first be obtained. Staff is recommending
that a portion of the $2.9 million being returned to the City is set aside to construct a levee to
protect Thatcher Mobile Home Court, Baculis Mobile Home Park and Commercial Court. This
levee would protect approximately hundreds of homes and 23 businesses. The City hired an
engineering firm which estimated the project at $4.4 million; the City hopes to pare that down to
$4 million over the next couple of weeks.
Long said staff is requesting that $1.9 million of the Aniston Village money be set aside as a
match for the I-JOBS grant. Long said the project seems to have some congressional support.
He said the primary vehicle for the City's flood mitigation has been through the acquisition of
property. Long said that in this case that strategy will not work, as the property owners do not
wish to sell. He noted that a temporary levee built from sandbags was constructed for the area
during the floods and it helped keep the area from being severely damaged. Richman asked if
the mobile home parks were privately owned. Long said they were. Richman asked if they
were owned by the residents of the mobile home parks; Long said the residents pay rent for
their lots. Richman asked if the expectation is that the mobile home parks will continue to
operate as mobile home parks, or if the owners intend to develop the property as something
else; he noted that a permanent levee would certainly make the area more developable and
increase its property value. Long said he did not know what the short-term plans for the
property were; he said the City's Comprehensive Plan for long-range planning does not include
mobile home parks at all. Long said that as of today the current owners do not wish to sell their
properties. Chappell asked if an east levee was going to be built. Long said there was no
funding for it at this time.
Douglas asked what it means when the Comprehensive Plan does not "list" a housing type.
Long said that it certainly could continue to exist but that the Comprehensive Plan was a long-
range planning document for where and what kind of development the City would like to see
occur. Severson noted that many other communities have used CDBG money to do such
improvements. She said it is an eligible expense; Iowa City just tends to use the funds for
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
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agencies that provide community services. Long said that what was attractive to staff about this
project is that it is an area where low-to-moderate income people live that is vulnerable to
flooding.
Chappell asked if there have been other projects discussed that might be of better benefit to the
residents, such as moving their mobile homes to a park that is not flood prone. Long said the
last relocation of a mobile home park cost the city $15 million. Chappell said that had been a
forced relocation which paid all costs, whereas this would be strictly voluntary. He asked if the
City had considered any other way of protecting those residents. Long said the owners of the
mobile home courts will not sell. Chappell said he is not talking about buying the entire
property. He said he meant that if there were individual home owners who want to voluntarily
move their mobile home to a mobile home park less prone to flooding, would there be any way
to assist those residents. Long said he did not know where such money would come from. He
noted that most of the mobile homes cannot be moved anyway. Severson said she wished to
mention that mobile homes really are not very mobile these days due to their size. She said
another challenge is that a lot of mobile home courts will not accept used trailers in their lots.
She said that they pretty much want to sell one of their own units to their residents, and that
there is not much moving of manufactured housing units that actually goes on. Long said that
there also not very many mobile home lots available in the city, though there are some in the
county. Hightshoe said that the City had attempted to move these mobile home parks after the
1993 floods, but the plan fell through.
Richman said that it sounds as though CDBG funds have generally not been used to fund
infrastructure improvements in the past. He said he could understand why such a large pot of
money would be looked at for infrastructure purposes. Richman asked where this particular
levee project fell on the list of infrastructure priorities for the city. Long reminded him that they
had to be projects to assist low-to-moderate income people. Long said the project does appear
in the Capital Improvements Plan (CIP) which has been adopted by City Council; however, it is
an unfunded project in the CIP.
Chappell asked why no money had been set aside in the FY11 budget to meet the 50% match
requirement for the I-JOBS grant. Long said the match requirement was new, and was not in
the first I-JOBS grant. Long said that the engineering has been done, so the project is basically
shovel ready.
Chappell asked if the low-to-moderate income connection to the area was strictly because of the
residences. Hightshoe said that was correct; the businesses are just in a census tract of low-to-
moderate-income residences.
Chappell said it seemed to him that the owners of the mobile home parks are the ones to see
enormous benefits from this levee. Long said the businesses in the area will also benefit.
Chappell said that he meant that the owners receive much greater benefit from the levee than
the low-to-moderate income residents of the mobile home park. Long notes that levees are not
guaranteed, so the protection is also not guaranteed. Long explained that the City owns quite a
bit of land surrounding the Baculis and Thatcher mobile home parks.
Douglas noted that the money is coming from the repayment of a construction loan for
affordable housing and asked if any consideration had been give to pouring the money back in
to the construction of affordable housing. Long said that construction is not allowed with CDBG
money, but affordable housing could be supported with the funding in other ways. Long said the
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
JUNE 30, 2010
PAGE 10 of 13
money has to be used quickly as there is a "timeliness" test for CDSG funds. Hightshoe said
the City has about a year to spend it due to expenditure measures used by HUD.
Chappell noted that the Commission has heard complaints that the land the City Council would
like to have used for low-to-moderate income housing is too expensive to purchase; however,
ways were apparently found to pay $2.9 million for that very thing. Long said the possibility of
land banking lots for future development by housing providers is allowable under CDSG rules.
Richman said that the City's Comprehensive Plan seems to be indicating that the ultimate goal
is to have commercial or commercial/industrial development in that area.
Long said that the eastern part of the property is in the 1 OO-year floodplain, with a couple of
homes actually in the floodway.
Chappell asked if the City had any short-term plan for redevelopment of those areas. Long said
with that many people living there the City would not have any plans for redevelopment. He
noted that there is a trail planned for the top of the levee, but that it would be paid for by another
funding source.
Richman said that ultimately it is a $4 million project to protect 160 mobile home residences,
which is about $25,000 per unit. Long pointed out that it would also be protecting businesses.
He said that protecting the tax-base is an important part of the project. Chappell said that
ultimately the tax base is what would really be protected by this levee, considering that the
Comprehensive Plan does not even include residential living in that area. Richman noted that
the levee would make the land more valuable. Chappell added that this could in turn make the
rents higher.
Douglas asked if staff was asking for a recommendation on this issue. Long said that a
recommendation has been requested but is not required. Long said that City Council will be
discussing the project as a whole on July 12th.
Chappell asked how confident staff is that the money that is due in May will actually be paid.
Long said they are very confident, as there is an agreement in place.
McKay said he is in favor of supporting the request.
Gatlin said that his position would be not to make a recommendation at all and to let Council
decide how to proceed.
Richman said that without a better idea about the other infrastructure needs in the city and the
long-term plans for the site, it is hard for him to make a recommendation at this point.
McKay moved to support the request that $1.9 million in CDBG funds be set aside for the
levee project on the west side of the river.
Hart seconded.
Richman asked if there was any further discussion.
Chappell said he is not supportive of the project as it has been presented. He said that he
understands why staff is making the request now, but that he does not know enough about what
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
JUNE 30, 2010
PAGE11of13
kinds of requests will come in for this money to know if it is the best idea. Chappell said there is
potential for untold creativity for applicants with this size of pot available to them. He said there
are too many important questions unanswered about the project and he cannot support it at this
point.
A vote was taken and the motion failed 4-1 (Chappell, Gatlin, Douglas and Richman
opposed; McKay in favor; Hart and McMurray abstained).
Long noted that City Council would discuss this issue on July 1 ih.
Subcommittee Report: Community Development Celebration:
Hightshoe said the celebration will be held at First Mennonite Church, which houses the Home
Ties program. Home Ties provides free daycare to homeless children while their
parents/guardians look for housing and lor employment. Hightshoe said that the celebration will
be held Thursday, August 19th, from 4:30-6 p.m., with an awards ceremony at 6:00 p.m.
Hightshoe said the speakers have not yet been confirmed, but the mayor will be present. She
noted that Richman would not be available to make the closing remarks and she wondered if
any HCDC member would be interested in giving 2-3 minutes of closing remarks. McKay
offered to do give the closing remarks.
MONITORING REPORTS:
FY07 & FY08 Habitat for Humanitv - Homeownership (Chappell): Chappell said that all
funds had been expended, with 90% being spent within 6 months of the funds being released.
All of the FY07 homes will be completed by the end of this year and the FY08 homes by next
summer.
IC Housing Rehabilitation (staff): Long said that the housing rehab staff is still handling flood
recovery projects. Generally, they administer federal programs and use local geo-bonds to fund
rehab programs. He said there are six different programs through this office. Long said it was a
very busy year in which over a million dollars in flood recovery and CDBG money was spent.
This office helps out with the UniverCity Program, funded through I-JOBS. Long said the City
will have acquired eight homes through this project as of August 1st.
IC Economic Development (staff): Hightshoe said that at the beginning of the year there was
$120,000 in funds. She said that over the course of the year three applications have been
received. Corridor Drywall was funded at $35,000. She said the purpose of the fund is not to
compete with private lenders. One application was denied due to lack of applicant contribution,
and one was denied because they were eligible for private financing. One business funded in a
prior year, Atlas Home Services, defaulted, and the Attorney's Office will be representing the
City's interests in the resulting bankruptcy and foreclosure proceedings.
Hightshoe said that another $108,000 will be set aside as of July 1S\ giving the program
$193,000 to work with. Staff has been looking at ways to promote economic development
activities in the Towncrest, Riverfront Crossings, and the St. Pat's development area with limited
staff/planning time. On July 12th City Council will be looking at a proposed agreement between
the City and the National Development Council, an agency providing technical and planning
assistance to cities.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
JUNE 30, 2010
PAGE 12 of 13
Richman asked if there were any changes that staff would recommend that would preclude a
default like Atlas' from occurring in the future. Hightshoe said she did not think so. She said
that Atlas had a much larger loan from a local lender and the economic development funding
was more of a gap financing. The bank also reviewed the business through their underwriting
criteria and made a large loan to the business. She said the business was owned and managed
by a married couple. The last update from the business was that the business owners were
living in separate residences and were going through a divorce/separation. It appears that this
precipitated the collapse of the business. Long said that he believes there has only been one
other instance of default in the last ten years.
Aid to Aaencies - United Action for Youth (Doualas): Douglas said he had a call into the
director but had not yet connected with him. Hightshoe said UA Y spends out its allocation every
month. The money was spent for counseling, at-risk youth, and teen moms.
Long thanked McKay for speaking at the dedication of the Wetherby Splash pad as a
representative of HCDC. Long said that has been a wildly popular CDBG funded project.
ADJOURNMENT:
McKay motioned to adjourn.
Hart seconded.
The motion carried 7-0 (Drum and Zimmermann Smith absent).
The meeting was adjourned at 8:07 p.m.
12/04
POLICY FOR ALLOCATION OF UNCOMMITTED CDBG AND HOME FUNDS
(Funds that become available to the program after initial allocation either through
windfall income, project cancellation or additional funds provided by HUD.)
The Housing and Community Development Commission (HCDC) will determine if:
1. Existing projects that did not receive full funding will be considered.
2. Projects that had submitted applications but did not receive any CDBG or HOME funding
will be considered.
3. New proposals will be considered.
4. Funds will go to the Contingency Fund.
If existing and/or unfunded projects are the only projects that will be considered, the
applicants will be notified of the availability of funds and asked to provide a written request
for funds and how they will be utilized to fund their original request.
If new projects are being considered, HCDC must publish notice of funding availability and
proceed with a formal application process.
If funds are allocated to the Contingency Fund, no formal process is necessary other than
the City Council approval.
In m! cases the public must be given the opportunity for comment on the proposed use
of funds, either at a HCDC meeting or a Council meeting.
(See Contingency Fund Use Policy for use of these fundS)
CONTINGENCY FUND USE POLICY
The Contingency Fund can be utilized for the following purposes:
a. Cost overruns of existing CDBG and HOME projects. Cost overruns of greater than
$50,000 or 25% of initial project budget must be approved for eligibility by HCDC.
b. Funding for new projects that are considered an emergency or urgent need.
Applications for new projects for the use of Contingency Funds must be provided to the HCDC
at its regularly scheduled monthly meeting. HCDC will evaluate the application for compliance
with emergency or urgent need, eligibility for CDBG and HOME funds and availability of
Contingency Funds. Projects recommended to be funded under Contingency Funds must then
be formally approved by the City Council after the public has had opportunity to comment.
Ppdcd bg/cdbg-u ncom m ittedfu nd s. doc
DRAFT
EXHIBIT A
CDBG AND HOME PROGRAM INVESTMENT POLICIES
Economic Development
Economic development projects making application to the CDBG Economic Development Fund
will be reviewed by the Council Economic Development Committee. The Council Economic
Development Committee will make a recommendation to the City Council for each project
proposed for funding. Said recommendation shall include the amount of CDBG assistance to be
allocated and the terms of investment.
Typically, for-profit business projects will receive low-interest loans; whereas, non-profits may be
recommended for forgivable loans or grants. Decisions regarding investment terms for economic
development projects will be made based on the nature of the project including, but not limited to,
the risk, potential for growth, the number of and quality of jobs created for low-moderate income
persons, the ability to repay a loan and the amount of other funding leveraged.
Housing
Rental Housing. Except as noted below, 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
CDBG\HOME agreement is executed by the City) 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.
Tenant Based Rental Assistance (TBRA). All HOME funds provided for TBRA will be in the form
of a grant.
Exceptions. 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
The City of Iowa City, as the recipient of Community Development Block Grant (CDBG) funds,
utilizes these funds for "public facilities" projects as defined in 24 CFR 570.201 (c) that are
completed by the City and\or subrecipents. The following policy applies to CDBG assistance
provided to non-governmental subrecipients ("governmental" includes only jurisdictions with
taxing authority as provided for in Iowa Code).
DRAFT
Projects that receive an allocation by the City of Iowa City will receive an earned grant, as defined
herein, which will be secured by a mortgage or other comparable security instrument. The
compliance term of the earned grant will be determined by the formula also provided herein. At
the end of the applicable compliance term the lien or other security instrument will be released by
the City. If the real property is leased, the lease shall be for a period that matches or exceeds the
compliance term of the earned grant.
. Earned Grant: A lien against the real property being assisted, or other comparable
security, which is repaid only upon transfer of title, rental of the property, or termination of
services or occupancy as outlined in the applicable COBG Agreement. If the subrecipient
fully satisfies the terms outlined in the applicable COBG Agreement the mortgage against
the property, or other security instrument, will be released by the City following the
completion of the compliance period that begins on the date of execution of the mortgage
or security instrument.
Public Service
Public Service projects as defined in 24 CFR 570.201 (e) shall receive CDSG assistance in the
form of a grant with a term of not less than one year.
Wpd/ppdcdbg/proinvestpolicies08/10