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HomeMy WebLinkAbout02/02/2015 Work SessionCity of Springfield Work Session Meeting MINUTES OF THE WORK SESSION MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY FEBRUARY 2, 2015 The City of Springfield Council met in a work session in the Jesse Maine Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday February 2, 2015 at 6:00 p.m., with Mayor Lundberg presiding. ATTENDANCE Present were Mayor Lundberg and Councilors Wylie, Moore, Ralston, Woodrow and Pishioneri. Also present were City Manager Gino Grimaldi, Assistant City Manager Jeff Towery, City Attorney Mary Bridget Smith, City Recorder Amy Sowa and members of the staff. Councilor VanGordon was absent (excused). 1. Community Development Block Grant (CDBG) Priorities. Tom Boyatt, Community Development Manager presented the staff report on this item Mr. Boyatt introduced staff members Neil Obringer and Molly Markarian who were also involved in this program. For many years the City has been able to use a percentage of its CDBG funding to support worthy projects as applied for by public and non-profit agencies based on review and recommendation by the Community Development Advisory Committee (CDAC). Since 2010/11, CDBG dollars have declined by approximately 30% and funding for eligible agency projects has dropped from $279,965 to $137,494 per year. Due to increasing complexity of HUD rules for HOME funds, the City is no longer able to finance the Springfield Homeownership Program (SHOP) with HOME funds. If Council desires to maintain SHOP at recent levels in the next fiscal year, the City could use CDBG funds to pay for this program. However, funding SHOP with CDBG absorbs almost all of the limited dollars available in the 2015/16 CDBG budget and the City will not be able to issue an RFP nor award CDBG funding to qualifying projects this year as has been past practice. In the alternative, to continue awarding CDBG funds to qualifying projects the City Council could consider not funding the SHOP program for the next year. To pursue this course of action the City will need to find approximately $30,000 in non -HUD funds to cover that portion of personnel cost that would not be reimbursed by the HOME funds nor the CDBG funds. Attachment 2 of the agenda packet provides copies of the previous One Year Action Plan funding allocation sheets for the CDBG program between 2010/11 and 2014/15. It also includes an estimate of funding and the proposed action plan breakdown for 2015/16. Staff will return to Council in April for final adoption of the Action Plan as well as the City's Five Year Consolidated Plan. Providing direction now regarding the SHOP program will assist staff in preparing these documents for submission to HUD and will clarify expectations for the CDAC process. City of Springfield Council Work Session Minutes February 2, 2015 Page 2 Staff believe that this coming cycle may be a good year to include the SHOP program in CDBG and hold off on soliciting and awarding project funding to agency partners for one year. The new housing and community services program manager will come on board this spring, and it is felt that a deliberate multi -month process to review the entire CDBG program with Council and the CDAC is warranted. The CDAC is scheduled to meet on February 19 and staff wanted to get Council's input prior to that meeting. The city has averaged about $100,000 annually in the HOME funding program. Due to the staffing levels and inexperience of staff with this program, staff recommended continuing the HOME Program and taking one year off of the CDBG funds. Councilor Wylie asked if there were current programs in the middle of their projects that might be hurt by eliminating the CDBG allocations this year. Mr. Boyatt said they could look into that and find out. In the past, the award amounts have been four discreet projects which are on the books. It can sometimes take years to complete those projects and the reporting requirements can go on for decades. Councilor Wylie said CDBG funds are often critical for projects that need additional funding. Mr. Grimaldi referred to page 1 of Attachment 2 which showed the 2014-2015 allocations. Councilor Ralston said this is difficult because all of the CDBG allocations have been important. If they believe they need to improve the housing situation in Springfield, they need to save the HOME program this year and see what happens next year. In the long run it fits the goals of Springfield. Councilor Moore asked how many families are able to be helped with the HOME program. Mr. Boyatt said an average of twenty-seven a year since 1992, for a total of about 560 families, have received down payment assistance. It often makes a difference between getting a loan or not, or getting a loan people can afford. Councilor Moore asked about the success ratio. Mr. Boyatt said the success rate was very high. The recent recession put a strain on things, and some people moved away. Councilor Moore asked about the first time homeowner loan. Ms. Markarian said when a homeowner sells the house, the funds go back to the city to be used for another home loan. The loan is at 0% interest. Councilor Ralston felt Springfield would be shut out once the consortium takes effect, and we need to use the funds we have while we can. Councilor Pishioneri said our HOME/SHOP program is very important to the community. The CDBG funds are also important and have funded several worthwhile projects, but many of those organizations are spread out over the county. The HOME funds are more about taking care of our community. There are enough projects on the CDBG list that he could take off in order to provide SHOP funding. City of Springfield Council Work Session Minutes February 2, 2015 Page 3 Councilor Woodrow agreed the SHOP program is important and an opportunity for people to get started with stability and home ownership, and our success rate is phenomenal. The recommended action includes allocations for both senior services and emergency home repair, which assist with other issues and problems in our community. She is comfortable with the action recommended. She asked if they knew where we would be in one year. Mr. Boyatt said the rules aren't changing. The key difference is that we would have a program manager on board in the Spring, and a number of months to work with the CDAC, past fund recipients, the Council and HUD to look at the opportunities for bringing some form of CDBG request for proposals (RFP) process back into the mix. Councilor Woodrow said it would allow more time to sort it out. Councilor Pishioneri asked if CDBG funds were switching to the conglomerate that Eugene would administer. Mr. Boyatt said the consortium partnership of Springfield and Eugene had a less than favorable audit from HUD with some technical concerns about the process. That issue resulted from Eugene acting as lead agency and Springfield doing the paperwork, so both parties were responsible. In 2013, the HOME investment partnership rules changed about how the funds could be used. Those funds continue to decline and the focus is now on `last dollar' for housing projects. With the new consortium, Eugene would be administering, and the Mayors from Springfield and Eugene would be the final decision makers on the recommendations for HOME funds. Staff are in the process of developing an intergovernmental agreement (IGA) with Eugene which will include certain principles regarding equitable distribution in the metro area. This is a new, expanded role for staff, and the effort will be in working with housing developers to get their projects eligible to leverage funds. Councilor Pishioneri asked if Eugene would be responsible for putting out the RFP since they would be the administrators. Mr. Boyatt said they would for HOME funds, but Springfield would continue to put out the RFP's for CDBG funded projects. Councilor Moore said the Housing Policy Board is looking at the Consolidated Plan from the last five years. She will make that available to the rest of the Council. The Glenwood housing project from the Lane County Housing And Community Services Agency (HACSA) is in the mix. There will be an opportunity for a large amount of funding for a project. Mayor Lundberg asked who was on the committee for the Consolidated Plan Ms. Markarian said the committee included Councilor Moore, three members of the CDAC, two Housing Policy Board members, a Eugene City Councilor and one or two representatives from the Eugene Development Advisory Committee. Mayor Lundberg said traditionally Springfield's part of the Consolidated Plan has put home ownership higher, and Eugene has put rental housing projects higher. She said the new HOME fund formula favored rentals so we would not be able to pursue home ownership with these funds. Ms. Markarian said there isn't a ranking by number of the priorities. The draft priorities in the Consolidated Plan include acquiring and developing and rehabilitating owner occupied residents. City of Springfield Council Work Session Minutes February 2, 2015 Page 4 Mr. Boyatt said the HOME Investment Partnership funds are aimed at subsidizing affordable rentals Mayor Lundberg said she and Mayor Piercy would be sorting through the requests with the providers that would be developing in both Eugene and Springfield. They would present whichever project they wanted to move forward. Mr. Boyatt said staff could work with those providers. Mayor Lundberg said many of those projects would end up in Eugene and that was her concern. In Springfield, they want to keep our SHOP program alive. She is not comfortable giving it all to the SHOP program. Over the years, Springfield has done valuable things with CDBG funds such as the Emerald Arts Center, the Wildish Theater and the Royal Building. She would hate to see those things go away. Because the rules aren't changing, they will be back next year making these same types of decisions. She noted the administrative costs which were at the maximum allowed and is a large part of the money. Some of those funds could be program dollars. She doesn't want to eliminate CDBG funds this year. Councilor Ralston said he had no problem splitting the funds and giving $100,000 for SHOP and the rest for CDBG. This is a tough place to be and it makes sense to keep both in the process. Eugene is already lined up for these types of projects with land banking. Unless we come up with a strategy to get on equal footing with Eugene, we will be out of luck. He noted that the study to expand the urban growth boundary (UGB) does not allow adding residential, so that's not an option. Mayor Lundberg agreed land banking was something Springfield needs to consider. She also noted that the funds will be awarded on the last piece of funding, not the first. Mr. Boyatt said Eugene did use some of their CDBG funds towards land banking in the past Councilor Moore asked about staffs conversation with HUD. Ms. Markarian said land banking is a term that HUD no longer likes to use. They have also tightened up their rules so Eugene had to give funds back that they held on to for too long. You can acquire real property using CDBG funds, but there is a shorter time frame for holding on to those funds, and a plan has to be in place to develop housing on that land during that time. Although Eugene had been very successful with it, it is very risky. Mayor Lundberg said she would prefer to split the funds. This needs to be tracked. The changes made by HUD have devastating effects at the local level. The old system was working quite well and provided a lot of funding. She will be in Washington DC next week and will express her concerns to the HUD representatives. They need to have some discussions about new strategies for what Springfield wants to do as we move forward. Councilor Wylie asked the Mayor to talk with others in DC about the HUD and CDBG funds. Mayor Lundberg said she would check to see what the rationale is for this change. Mr. Boyatt said the HUD representatives told staff they had done a great job, and these new rules were not written for Eugene and Springfield, but for those communities that hadn't done things in an appropriate manner. City of Springfield Council Work Session Minutes February 2, 2015 Page 5 Councilor Pishioneri there are a lot of plans for construction of single family homes. If those plans come to fruition, there may be a lot of single family residents in mobile homes that need a place to live. He asked if there was a plan to address mobile home park displacements and if that could be part of the UGB expansion discussion. Mr. Grimaldi said staff will check to see if it affects the residential land needs. Staff is working on a plan for mobile home parks as land develops. Part of that planning could include land banking and working with non -profits to put together a project to coincide with development. Timing is critical. Staff is working with the state on regional solutions. Mayor asked Council about their preference for the funds. Councilor Ralston supported $100,000 to SHOP, and $37,000 for the request for proposals. Councilor Pishioneri said he wants to keep the SHOP program. Councilor Wylie asked if that would allow for funds for human services and home repair. Yes. Mr. Boyatt said staff would analyze how staff costs would be recovered. The $100,000 would go into loans, but to maintain staffing they may need to use some of those funds. Both programs are federal and very complex to manage, and must flow through the City. In order for that to work, staff had to caretake the funds and the reporting. Each grant has its own process, reporting, follow-up, paperwork, contracts, etc. Current staff is 2 '/2 FTE. Mayor Lundberg said she would like to take a closer look at the cost for administration. Mr. Grimaldi said they could look at staffing, or look at using General Fund dollars to pay for staffing and leave the rest for the program. Mayor Lundberg said it is a legitimate conversation. People get large grants, but much of it goes to administration. Perhaps they could look at lowering the number of grants to lower the cost of administration. Mr. Grimaldi asked if the Mayor had a goal in mind. Mayor Lundberg said if we could come up with another $50,000 towards the SHOP program, it would help maintain SHOP and CDBG. When the new program manager comes on board, perhaps they could look at what they could do to address that cost. Mr. Grimaldi said if they wait for the new program manager to come on board and do some analysis, it could possibly be another year before they could make the change. Mayor Lundberg said that was fine. She just wanted them to start looking at it with the new program manager and the new rules. Council agreed to $100,000 for the HOME program, $37,000 for the request for proposals, and a look to the future. City of Springfield Council Work Session Minutes February 2, 2015 Page 6 ADJOURNMENT The meeting was adjourned at 6:45 p.m. Minutes Recorder — Amy Sowa Christine L. Lundberg Mayor Attest: Amy Sow City Recorder