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HomeMy WebLinkAboutItem 02 Community Development Block Grants (CDBG) FY2018 AGENDA ITEM SUMMARY Meeting Date: 6/12/2017 Meeting Type: Work Session Staff Contact/Dept.: Erin Fifield / DPW Staff Phone No: 541-726-2302 Estimated Time: 20 minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Promote and Enhance our Hometown Feel while Focusing on Livability and Environmental Quality ITEM TITLE: COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG) FY2018 ACTION REQUESTED: Discuss and provide direction on: DRAFT Springfield 2017-18 CDBG One Year Action Plan Proposed amendments to the Springfield CDBG Prior Year Action Plans Developing an affordable housing project ISSUE STATEMENT: Each spring, City Council must approve funding allocations for use of CDBG funds for the next fiscal year in a document called the One Year Action Plan (OYAP). Any proposed substantial amendments to prior year action plans must follow the same approval process. Council will have the opportunity to formally approve the 2017/18 CDBG One Year Action Plan, and the proposed substantial amendments to prior year CDBG action plans, during the Council Regular Session on June 19, 2017. ATTACHMENTS: ATT1: Council Briefing Memorandum ATT2: DRAFT CDBG FY2017/18 OYAP – CDAC recommendation ATT3: DRAFT CDBG substantial amendments to prior year action plans DISCUSSION/ FINANCIAL IMPACT: The Community Development Advisory Committee (CDAC) held a public hearing on March 16, 2017 and has made recommendations to Council for the DRAFT Springfield 2017/18 CDBG One Year Action Plan, and proposed substantial amendments to prior year action plans. Both prioritize the strategy to increase the supply of affordable housing. Final approval for both the Action Plan and substantial amendments is planned for the June 19th Regular Session. The timing of federal budget allocations indicates the City will most likely not have final budget numbers for the 2017/18 CDBG program by June 19th’s Council regular session, yet Council will need to approve an Action Plan at that time. Staff will provide options for Council’s consideration. Additionally, staff seeks input on Council’s priorities for developing an affordable housing project that would create new units. M E M O R A N D U M City of Springfield Date: 6/12/2017 To: Gino Grimaldi COUNCIL From: Anette Spickard Sandy Belson Erin Fifield BRIEFING Subject: COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG) FY2018 MEMORANDUM ISSUE: Each spring, City Council must approve funding allocations for use of CDBG funds for the next fiscal year in a document called the One Year Action Plan. Any proposed substantial amendments to prior year action plans must follow the same approval process. Council will have the opportunity to formally approve the 2017/18 CDBG One Year Action Plan, and the proposed substantial amendments to prior year CDBG action plans, during the Council Regular Session on June 19, 2017. COUNCIL GOALS/ MANDATE: Promote and Enhance our Hometown Feel While Focusing on Livability and Environmental Quality BACKGROUND: This memo outlines the following topics for discussion:  FY2017-18 CDBG One Year Action Plan – The CDAC has recommended an allocation to City Council, prioritizing the strategy to increase the supply of affordable housing. However, HUD has yet to announce final new entitlement allocations. Staff will present the proposed use of funds, and proposed adjustments, for when the final allocation is known. Council is set to approve the One Year Action Plan during the June 19th Regular Session meeting.  Substantial amendments to prior year action plans – The CDAC has recommended proposed substantial amendments to prior year action plans, each proposing unused funds from prior year projects be put toward the strategy to increase the supply of affordable housing.  HUD-funded affordable housing project – As part of the strategy to increase the supply of affordable housing, staff is seeking direction from City Council on priorities for a future affordable housing project. Such priorities will help staff research available land, and work with partners to determine the feasibility of projects given the type and location of sites and funding options. Ultimately, any decision on sites for purchase or development will come before City Council. FY2017-18 CDBG One Year Action Plan Each spring, the City Council approves funding allocations for use of CDBG funds for the next fiscal year. As discussed during the January 23rd, 2017 work session on CDBG funding for FY2018, and in line with the development of the affordable housing strategy, Council has stated their interest in prioritizing CDBG funds toward increasing the supply of affordable housing. Subsequent to that work session, City staff published for comment a draft One Year Action Plan of Attachment 1 Page 1 of 6 MEMORANDUM 6/8/2017 Page 2 FY2018 CDBG funds reflective of this priority, and held a public hearing at the March 16, 2017 Community Development Advisory Committee (CDAC) meeting. One written comment was received, identifying the need for housing in Springfield for women who have experienced chronic homelessness. At the public hearing, one person testified in support of local non-profits’ needs for capital funds. The CDAC held a discussion, and voted to recommend to City Council the summary of Springfield CDBG funded sources and uses as provided below. FY 2017/18 CDBG Funding Allocation – CDAC recommendation Sources of Funding FY 2017/18 CDBG Entitlement Grant (estimated) $ 480,000 ------------------ Total sources $ 480,000 -------------------------------------------------------------------------------------------------------------------- Uses of Funding Increase the supply of affordable housing Land acquisition, site improvements, clearance, etc. $ 207,000 Rehabilitate Existing Housing Stock Home Repair Program for Low-income Homeowners $ 55,000 Provide Down Payment Assistance for Home Ownership Down payment assistance for Low-Income Homebuyers $ 50,000 Support a Human Services Delivery System Non-profit services through the Human Services $ 72,000 Commission (HSC) Administration and Planning $ 96,000 -------------------- Total uses $ 480,000 Actual CDBG allocation is currently unknown – Congress passed a continuing resolution authoring FY2018 CDBG funds; however, the budget was not signed until May 5 of this year. Currently, the US. Department of Housing and Urban Development (HUD) is waiting to receive its appropriation before calculating each jurisdiction’s allocation. We anticipate receiving our final allocation mid-July, similar in amount to last year’s allocation. Despite the delay, we are still required to submit our One Year Action Plan to HUD by mid-August. This schedule leaves insufficient time for staff to bring a finalized One Year Action Plan to Council for approval before it is due to HUD. Therefore, staff propose adjusting the above FY2018 allocation amounts as follows when HUD announces the City’s actual CDBG allocation:  Rehabilitate existing housing stock – maintain allocation at $55,000  Provide down payment assistance for home ownership – maintain allocation at $50,000  Support a Human Services Delivery System – maintain allocation at 15% of new entitlement funds Attachment 1 Page 2 of 6 MEMORANDUM 6/8/2017 Page 3  Administration and Planning – maintain allocation at 20% of new entitlement funds  Increase the supply of affordable housing – adjust allocation based on the balance of funds remaining Question: Do you support this formula for allocating funding for FY2018? Do you see any changes to make to the Draft One Year Action Plan (see ATT 2) before it comes to you for approval on June 19? Substantial Amendments to Prior Year Action Plans At times, the City allocates funds to agencies for projects which ultimately are not able to be completed at that time, and/or do not fully use the funds requested. These funds from prior year activities were included as part of the work session with Council on January 23rd and the discussion with the CDAC. Council reiterated their support for allocating CDBG funds toward increasing the supply of affordable housing, which is where the funds for each of these activities is proposed to be allocated. The CDAC recommends to Council substantial amendments to prior year allocations of Community Development Block Grant (CDBG) funds as follows: # Prior Year Action Plan Amount Amended Prior Year Allocated Activity Proposed Amendment 1. FY 2012/13 $12,000 ARC of Lane County - Public facility and improvement to create jobs for low-moderate income persons. Reallocate program funds toward acquisition to address housing for low- moderate income persons. 2. FY 2013/14 $81,580 HACSA – Site acquisition for Glenwood Place to create housing units for Low- Moderate Income Persons Amend activity to not be project specific, but to apply to any acquisition activity to address housing for low- moderate income persons. 3. FY 2014/15 $37,815.84 NEDCO – Microenterprise assistance for Low-Moderate Income Persons Reallocate remaining program funds toward acquisition to address housing for low-moderate income persons. Per the Eugene-Springfield Consolidated Plan, any changes to the recipient or nature of funds need to occur with a substantial amendment:  ARC – ARC had been awarded funds but, due to staff changes at the agency, was not able to start or implement their proposed activity. No funds were expended on the project.  HACSA – HACSA is still committed to creating Glenwood Place. However, given the on- going environmental review waiver process required for use of federal funds, needed infrastructure improvements in Glenwood, and the current unpredictability of state financing, it is still unclear when the project will begin. For overall CDBG program management, it is important for funds to be used in the community in a timely manner. This substantial amendment allows for more flexibility for these funds to be readily put to use, while still allowing the funds to be used for Glenwood Place, should HACSA be ready to proceed in 2017.  NEDCO – Following the 2015 HUD monitoring of the city’s CDBG program, City staff adjusted our cost reimbursement allowance for microenterprise assistance. As such, NEDCO was not able to draw down funds as quickly as originally anticipated. NEDCO drew down funds through December 2016; this amended amount represents the remaining funds not used by NEDCO, which will now be reallocated toward the strategy to increase the supply of affordable housing. Attachment 1 Page 3 of 6 MEMORANDUM 6/8/2017 Page 4 Question: Do you see any changes to make to the substantial amendments (see ATT 3) before it comes to you for approval on June 19? TOTAL CDBG funds for FY2018 With the estimated FY2018 One Year Action Plan above, the substantial amendments proposed, and carryover funds from previous years, City staff estimate total CDBG funds available in FY2018 for the following activities: CDGB estimated funds available (FY 18) Consolidated Plan Strategy Activity Estimated Total Available in FY18 1. Increase the supply of affordable housing Land acquisition, site improvements, etc $338,395 2. Rehabilitate existing housing stock affordable to low-income persons Emergency Home Repair Program (EHR) $230,723 3. Provide down payment assistance for home ownership Springfield Homeownership Program (SHOP) $207,110 5. Support a human services delivery system to address the needs of homeless persons and special needs populations Human Services Commission (HSC) contribution (15% max) $72,000 Grant Administration (20% max) $96,000 TOTAL $944,228 Developing an affordable housing project HUD funds Springfield can access two sources of federal funding to address housing and community development needs in Springfield: HOME and CDBG funds. Home Investment Partnership Program (HOME) funds are targeted for housing that is affordable to low-income households. CDBG funds are more flexible and provide communities with resources to address a wide range of community development needs. HUD funds could help pay for the following:  Land acquisition  Site improvements  Public improvements  New construction  Conversion of current building space to housing units  Acquisition of new manufactured homes While exact dollars for FY2018 for both CDBG and HOME funds are unknown at this time, funds can be paired together to maximize an investment and ensure the success of a project. It is helpful to Attachment 1 Page 4 of 6 MEMORANDUM 6/8/2017 Page 5 consider the potential uses of both CDBG and HOME funds for the purposes of increasing the supply of affordable housing. Council priorities In discussions with Council about the affordable housing strategy, staff understood Council has identified the following priorities, and aim to work toward a development that achieves these priorities:  Create net new housing units – there is a need for housing all along the continuum  Construct permanent dwellings that meet state building codes  Accommodate families with children It is also understood that the City does not see its role as developing or managing housing. Question: Are these priorities accurate? Are there others to add? Project feasibility and development Affordable housing development is inherently difficult because developers are intentionally limiting their revenue by lowering rents/prices to make them affordable to households with limited incomes. It also usually requires multiple funding sources which require coordination and add to the project’s complexity. Each of the Options listed below have their own unique challenges for development. Land availability, developer’s interest and capacity, and financing all play a role in whether a development is feasible. As developers had mentioned in interviews last fall, knowing the site that is available for development is critical to knowing what is possible, and what could be financially feasible. However, other market realities affect development financing, and the uncertainty around state tax credits, private investors, and private fundraising, can make certain projects more feasible than others. Staff’s focus will be on identifying and acquiring property suitable for development of an affordable housing project that meets Council priorities. Potential projects: Given HUD-eligible activities, Council priorities, and community needs, staff have identified the following potential types of development the City could support with HUD funds:  Option 1: Develop Glenwood Place  Option 2: Develop multi-family apartments  Option 3: Develop a cluster of houses for rental or ownership  Option 4: Develop a manufactured home park  Option 5: Convert a building (e.g. church) to new housing units  Option 6: Develop an emergency shelter  Option 7: Develop a yet-to-be-determined new and creative model for affordable housing units Question: Are there any Options you want to prioritize over others? Are there any Options you want to cross off your list? Next steps Over the summer and fall, staff will be looking further into the possible Options listed above to better understand the possible outcomes, as well as the challenges to developing the project. Staff aim to work with affordable housing developers to better understand what types of projects are feasible given the current market for land, financing availability, and need in our community. Attachment 1 Page 5 of 6 MEMORANDUM 6/8/2017 Page 6 RECOMMENDED ACTION: Discuss and provide direction on the DRAFT Springfield FY2016/17 CDBG One Year Action Plan, proposed amendments to prior year CDBG Action Plans, and developing an affordable housing project. Attachment 1 Page 6 of 6 Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program 1 City of Springfield – CDBG Program FY 2017/18 One Year Action Plan This summary describes specific housing and community development actions and activities the City of Springfield proposes to undertake with Community Development Block Grant (CDBG) funds during the program year beginning July 1, 2017 and ending June 30, 2018 (Fiscal Year 2017/18). It is one part of the Eugene-Springfield 2017/18 One-Year Action Plan. Communities that are entitled to receive funds from U.S. Department of Housing and Urban Development (HUD) must complete a Consolidated Plan every five years as well as annual Action Plans. The Consolidated Plan provides an assessment of needs of low- and moderate- income persons and a strategic five-year plan for taking actions to address those needs using Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) funds received by the Cities of Eugene and Springfield. The One-Year Action Pl an describes specific actions to be undertaken in a particular year with federal funds. The content of the One-Year Action Plan is guided by HUD. The Cities of Eugene and Springfield each receive an annual entitlement allocation of CDBG funds directly from HUD. The two Cities also receive HOME funds from HUD through the Eugene-Springfield HOME Consortium. The City of Eugene is the lead agency in the HOME Consortium. A summary of planned uses by the Eugene-Springfield HOME Consortium for the use of HOME funds is available from the City of Eugene, as well as a summary of planned uses of Eugene CDBG funds. The following describes only the planned uses of CDBG funds received by the City of Springfield. Coordination and Collaboration The Cities of Eugene and Springfield collaborate in multiple ways to plan for and implement affordable housing and community development activities. The Cities of Eugene and Springfield jointly prepare the five-year Consolidated Plan and coordinate preparation of the One-Year Action Plans, and Comprehensive Annual Performance and Evaluation Report. There are multiple forms for communication and collaboration between the jurisdictions and other public agencies, affordable housing developers, social service providers, and other interested parties. The Lane County Human Services Commission (HSC) and Poverty & Homelessness Board (PHB) offer ongoing opportunities for collaboration and communication. Attachment 2 Page 1 of 7 Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program 2 Citizen Participation The City of Springfield encourages public participation in identifying specific needs and uses of CDBG funds in fiscal year (FY) 2017/18. The City of Springfield Community Development Advisory Committee (CDAC) is composed of community residents and was established by the City of Springfield to make recommendations concerning program policy and project selection to the City Council. On February 15, 2017, Springfield released its DRAFT CDBG One-Year Action Plan on its website and at City Hall. A 30-day public comment period commenced on February 15 and closed on March 17. Additionally, a public hearing was held by the CDAC on March 16, 2017. One written comment was received, identifying the need for housing in Springfield for women who have experienced chronic homelessness. At the public hearing, one person testified in support of local non-profits’ needs for capital funds. The CDAC held a discussion, and voted to recommend to City Council the summary of Springfield CDBG funded sources and uses as provided as Attachment A. Springfield’s City Council will consider the recommendation of the CDAC and public comments received before approving the One-Year Action Pl an, which is scheduled for June 19, 2017. Affordable Housing Strategy The City is currently developing an affordable housing strategy to address the low supply of housing and to foster housing choice and affordability in the short and long term. Springfield is focused on developing a strategy that will make the most impact on addressing Springfield’s affordable housing needs. In previous years, Springfield has allocated some CDBG funds annually through a competitive Request for Proposals (RFP) process and relied on applications received to determine which strategies in the Consolidated Plan will be addressed. This year, given the affordable housing needs identified, City Council is prioritizing the strategy of increasing the supply of affordable housing, and is proposing an allocation toward that strategy. There may be the option for a competitive RFP regarding how that strategy will be implemented, but that process has yet to be developed. Activities Benefiting Low- and Moderate-Income Persons Generally, Springfield's CDBG-funded programs and projects are provided to benefit low- income residents living within the city limits of Springfield. Individuals participating in a CDBG- funded program are required to meet HUD Income Guidelines. In order to meet the CDBG National Objective of Benefit to Low and Moderate-Income Persons, CDBG-funded projects must either serve a specific low-income area, or provide tangible benefit to low- and moderate-income clientele (services, economic opportunities, housing). Funded programs and projects undergo periodic staff monitoring to ensure compliance with CDBG regulations. All of the allocations proposed in Springfield’s One Year Action Plan for FY 2017/18 would benefit low- and moderate-income persons. Attachment 2 Page 2 of 7 Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program 3 Activities for the Prevention or Elimination of Slum and Blighted Conditions Another national objective of the CDBG program is the prevention or elimination of slums and blighted conditions in neighborhoods and communities, either by designating a specific area or by addressing conditions on a spot basis. In 2014, Springfield re-designated a Springfield Downtown Redevelopment Area, in compliance with CDBG regulations. The Downtown Redevelopment Area is pictured below. Springfield’s proposed One Year Action Plan for FY 2017/18 does not include an allocation toward the elimination of Slum and Blight. Attachment 2 Page 3 of 7 Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program 4 Strategies to Address Priority Needs The City of Springfield receives an annual allocation of Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD). The City of Springfield estimates its FY 2017/18 CDBG allocation to be $480,000. (Springfield's FY 2016/17 CDBG allocation was $488,028.) At this time, HUD has not yet released the CDBG allocation for FY 2017/18. FY2018 CDBG One Year Action Plan DRAFT – Attachment A shows the estimated sources of funding for FY2018. When HUD announces the actual City’s CDBG allocation for FY2018, the City will adjust this allocation for funding uses as follows: Rehabilitate existing housing stock – allocate at $55,000 Provide down payment assistance for home ownership – allocate at $50,000 Support a Human Services Delivery System – allocate at 15% of new entitlement funds Administration and Planning – allocate at 20% of new entitlement funds Increase the supply of affordable housing – Adjust allocation based on the new entitlement allocation for FY2018, and the above calculations. The adopted Eugene-Springfield 2015 Consolidated Plan emphasizes goals and strategies to meet priorities needs of low-income renters, low-income homeowners, people experiencing homelessness, and non-homeless special needs populations. Additional needs include increased employment opportunities for low income persons as well as low-income neighborhoods and areas that meet HUD’s definition of slums and blight. The priority strategies described below are intended to address one or more priority needs. Attachment B includes the adopted table of strategies to address the priority needs along with specific metrics to track progress over the five year period. The following narrative describes proposed allocations of Springfield CDBG funds for FY 2017/2018 as it relates to each strategy identified in the Eugene-Springfield 2015 Consolidated Plan. Certain strategies in Springfield are met through the Eugene-Springfield HOME allocations, and are indicated below . More details can be found regarding the allocation of HOME funds in the Eugene 2017/18 DRAFT One-Year Action Plan. Affordable Housing Affordable housing goals are intended to address HUD program objectives to provide decent, safe, and affordable housing and address critical housing needs of low-income people in our community. A total of four affordable housing goals are included in the adopted Eugene-Springfield 2015 Consolidated Plan. Attachment 2 Page 4 of 7 Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program 5 Increase the Supply of Affordable Housing Housing Development – The City of Springfield recognizes that the housing supply is low, particularly affordable housing for low-income residents, and aims to add a net increase of units to the housing supply. Through land/property acquisition, potentially paired with site development and/or HOME funds, the City of Springfield proposes to allocate $207,000 of estimated new entitlement funds toward supporting new housing development. Additional funds allocated through the FY 2017/18 HOME Allocation will help to address this strategy. (see FY 2017/18 HOME Allocation) CHDO Operating Support – (see FY 2017/18 HOME Allocation) Rehabilitate Existing Housing Stock Springfield Emergency Home Repair - The City of Springfield will continue to provide assistance to qualified low-income homeowners through its Emergency Minor Home Repair Program. These programs are funded from allocation from the new CDBG entitlement grant. Springfield proposes to allocate $55,000 in CDBG funds for this purpose. Provide Down Payment Assistance for Home Ownership Springfield Home Ownership Program - The City of Springfield continues to administer the very successful Springfield Homeownership Program (SHOP). The SHOP provides down-payment assistance for low-and very low -income households. Springfield proposes to allocate $50,000 in CDBG funds for this purpose. Remove Barriers to Affordable and Supportive Housing There are currently no funds allocated to this strategy. Springfield continues to seek opportunities to affirmatively further fair housing and inform others about the Fair Housing Council of Oregon’s Fair Housing Hotline. Community Development Community development goals are intended to satisfy HUD program objectives by providing human services; creating jobs; improving access to public facilities; and furthering neighborhood revitalization, planning, and community-building activities. A total of three community development goals were included in the adopted Eugene-Springfield 2015 Consolidated Plan. Support a Human Services Delivery System Attachment 2 Page 5 of 7 Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program 6 Non-profit services through the Human Services Commission (HSC) – The City of Springfield collaborates with Lane County to fund human service providers. The Human Services Commission (HSC) is the intergovernmental board that guides the use of funds and oversees the activities of agencies receiving funds. Agencies to be funded will be determined through a competitive Request for Proposals (RFP) administered by the HSC. Springfield proposes to allocate 15% of New Entitlement funds, estimated to be $72,000, to the HSC. Promote Economic Development There are currently no FY 2017/18 funds allocated to this strategy. Make Strategic Investments to Improve Neighborhoods There are currently no FY 2017/18 funds allocated to this strategy. Attachment 2 Page 6 of 7 Attachment A Eugene-Springfield FY 2017/18 One Year Action Plan City of Springfield CDBG program City of Springfield FY 2017/18 CDBG Funding Allocation Summary - DRAFT Sources of Funding FY 2017/18 CDBG Entitlement Grant (estimated) $ 480,000 Total sources $ 480,000 Uses of Funding Increase the supply of affordable housing Acquisition, site improvements, clearance, etc. $ 207,000 Rehabilitate Existing Housing Stock Home Repair Program for Low-income Homeowners $ 55,000 Provide Down Payment Assistance for Home Ownership Down payment assistance for Low-Income Homebuyers $ 50,000 Support a Human Services Delivery System Non-profit services through the Human Services $ 72,000 Commission (HSC) Administration and Planning $ 96,000 Total uses $ 480,000 Attachment 2 Page 7 of 7 City of Springfield Proposed Substantial Amendments to Prior Year One Year Action Plans for Community Development Block Grant (CDBG) Funds Spring 2017 The City of Springfield is proposing substantial amendments to prior year allocations of Community Development Block Grant (CDBG) funds as follows: # Prior Year Action Plan Amount Amended Prior Year Allocated Activity Proposed Amendment 1. FY 2012/13 $12,000 ARC of Lane County - Public facility and improvement to create jobs for low-moderate income persons. Reallocate program funds toward acquisition to address housing for low- moderate income persons. 2. FY 2013/14 $81,580 HACSA – Site acquisition for Glenwood Place to create housing units for Low-Moderate Income Persons Amend activity to not be project specific, but to apply to any acquisition activity to address housing for low-moderate income persons. 3. FY 2014/15 $37,815.84 NEDCO – Microenterprise assistance for Low-Moderate Income Persons Reallocate remaining program funds toward acquisition to address housing for low-moderate income persons. Attachment 3 Page 1 of 1