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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 ,~ 1 ':::~~...a~"" ~~~~~ ~ ~lIln' --~ 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. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JUNE 30, 2010 PAGE 2 of 13 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. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JUNE 30, 2010 PAGE 3 of 13 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 HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JUNE 30, 2010 PAGE 4 of 13 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 JUNE 30, 2010 PAGE 5 of 13 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 HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JUNE 30, 2010 PAGE 6 of 13 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 JUNE 30, 2010 PAGE 7 of 13 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 JUNE 30, 2010 PAGE 8 of 13 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 JUNE 30, 2010 PAGE 9 of 13 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