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HomeMy WebLinkAboutItem 09 Fiscal Year 2007-2008 One-Year Action Plan of the Eugene-Springfield Consolidated Plan for Housing and Community Development (City of Springfield Section) AGENDA ITEM SUMMARY Meeting Date: May 7,2007 Meeting Type: Public Hearing Department: DeVeIOpmf1~services Staff Contact: Kevin Ko [t S P R I N G FIE L D Staff Phone No: 726-2302 C I T Y C 0 U N C I L Estimated Time: 15 minutes ITEM TITLE: FISCAL YEAR 2007-2008 ONE-YEAR ACTION PLAN OF THE EUGENE-SPRINGFIELD CONSOLIDATED PLAN FOR HOUSING AND COMMUNITY DEVELOPMENT (CITY OF SPRINGFIELD SECTION) ACTION REQUESTED: 1. Conduct a Public Hearing to receive testimony regarding the City of Springfield section of the FY2007-2008 One-Year Action Plan (includes testimony on Wynant's Project) 2. Approve/not approve CDBG funding for Wynant's Family Nutrition. 3. Approve/not approve the Springfield section of the FY2007-2008 One-Year Action Plan. ISSUE STATEMENT: In May of 2005, the Cities of Eugene and Springfield submitted to HUD a five-year Consolidated Plan for Housing and Community Development, effective July 1, 2005 and expiring June 30, 2010. One-Year Action Plans must be submitted to HUD prior to the beginning of each fiscal year as amendments to the five-year Consolidated Plan, and are designed to indicate how communities intend to fulfill the priorities established in the Consolidated Plan. At a meeting on April 16, 2007, Council directed staff to provide more information regarding a CDBG proposal for Wynant's Family Nutrition. This packet contains the requested information and a staff recommendation for funding. ATTACHMENT: 1. FY2007-2008 One-Year Action Plan (City of Springfield section) 2. Wynant's Family Nutrition, memo dated 5/2/2007 with project information 3. Draft Criteria for Funding CDBG Projects, memo dated 5/1/07 DISCUSSION/ FINANCIAL IMPACT: The City of Springfield receives Community Development Block Grant (CDBG) funds as an entitlement community and HOME Investment Partnerships Program (HOME) funds as a participant in a HOME consortium agreement with the City of Eugene. CDBG funds are awarded to communities who carry out community development activities directed towards neighborhood revitalization, economic development, and the provision of improved community facilities and services. HOME funding is a housing block grant program allocated to communities to be used for housing rehabilitation, new construction, acquisition and tenant based rental assistance activities. A public hearing was held on April 16, 2007 to hear testimony on seven applications for CDBG or HOME funding. Council approved funding for six of the seven projects. A funding decision on the Wynant's family Nutrition project was postponed until May 7, 2007. Council directed staff to present additional information about the Wynant's project, and possible funding strategies for this project. The Council also directed staff to present possible criteria for considering future funding applications by private for-profit businesses. Staff will be presenting the requested information at this public hearing, and will make a funding recommendation for the Wynant's project. Also presented for future consideration is a memorandum discussing possible criteria for awarding CDBG funds to private for-profit businesses. The FY2007-2008 One Year Action Plan includes the CDBG and HOME funding allocations for projects and activities and must be approved by both the City of Springfield and City of Eugene prior to submission to HUD. The City of Springfield section of the document (less final fund allocations) was available for a thirty-day review and comment period ending May 7,2007. As of April 30th, no written comments have been received. Oral testimony may be provided at a public hearing before the Council on May 7,2007. The City of Eugene section of the Plan is being adopted separately by the Eugene City Council. The combined Eugene- Springfield One-Year Action Plan is due to HUD on May 15, 2007. City of Springfield One-Year Action Plan for FY07/08 Summary of the One-Year Action Plan Process Reauirement The Consolidated Plan is a requirement of the 1990 National Affordable Housing Act and the Community Development Plan. The Consolidated Plan is required of entitlement communities that receive funds under U.S. Department of Housing and Urban Development (HUD) housing and service programs related to the needs of low- and moderate-income persons, including the Community Development Block Grant (CDBG) program, the HOME Investment Partnerships Program (HOME), the Emergency Shelter Grant (ESG), and Housing Opportunities for Persons with AIDS (HOPWA). The One-Year Action Plan for CDBG and HOME is to be submitted annually as updates and implementation strategies of the Consolidated Plan. ESG and HOPWA programs, which are not entitlement programs, are not included in this document. Timeline The One-Year Action Plan must be submitted to HUD 45 days prior to the beginning of the entitlement fiscal year. A citizen participation plan element of the Consolidated Plan requires that interested parties have a 30-day opportunity to review and comment on the funding proposals and that at least one public hearing be held. Information received from the public hearing and during the comment period is to be attached to the document in summary form when submitted to HUD. This One-Year Action Plan combines information and strategies for the City of Eugene and the City of Springfield, under HUD rules that require consortiums of cities to create consolidated documents for the purpose of CDBG and HOME funding. The content of the One-Year Action Plan is mandated by rules and regulations formulated by HUD. The submission of this One-Year Action Plan is the second annual action plan to the Eugene-Springfield Consolidated Plan 2005. City of Sprinafield Process The Springfield Community Development Advisory Committee (CDAC) held a public hearing on March 22, 2007 to review seven CDBG and HOME proposals. There were 19 citizens in attendance. The CDAC heard testimony from 13 people who spoke in support of the proposed projects. After hearing testimony, the CDAC deliberated for approximately one hour before formalizing a recommendation for funding. Recommendations for funding were forwarded to the Springfield City Council. The Springfield City Council met on April 16, 2007 and held a public hearing on the CDBG and HOME funding recommendations for FY07/08. 16 citizens attended the public hearing and thirteen testified in support of the CDAC's recommendations. The Council considered testimony and discussed the individual projects and community goals. The Council removed the funding request for the Wynant's Family Nutrition project and voted 6-0 to approve the recommended funding allocations for the remaining two CDBG projects and four HOME projects. The Council also voted 6-0 to approve a one-year extension of the CDBG set-aside for downtown redevelopment. The Council asked CDBG/HOME Staff to provide additional information on the Wynant project at the May 7th meeting and indicated a decision on funding would be made at that time. Attachment 1, page 1 WebsitelWhere to Obtain Copies of the Plan The Eugene-Springfield Consolidated Plan 2005 and the current One-Year Action Plan are available on the Internet at: http://www.ci.springfield.or.us/dsd/housing/housing.forms.htm Copies of the Eugene-Springfield Consolidated Plan 2005 and the current One-Year Action Plan are also available at the following locations: City of Eugene Planning and Development Dept. 99 W. 10th Ave. Eugene, OR 97401 City of Springfield Development Services Dept. 225 5th St. Springfield, OR 97477 Attachment 1, page 2 City of Springfield One-Year Action Plan for FY07/08 Community Development Block Grant Program Description 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's fiscal year 2007/2008 (FY07/08) CDBG allocation is $628,101. The Community Development Advisory Committee (CDAC) was established by the City of Springfield to make recommendations concerning program policy and project selection to the City Council. Springfield allocates CDBG funds annually through a competitive Request for Proposals (RFP) process. One of the funding criteria for project selection is the efficient use of the CDBG dollars. This is demonstrated in a proposal by the amount of additional resources leveraged by the CDBG commitment. Although this funding criteria is weighed against other funding criteria, it has been a significant factor in bringing much needed resources into the community. The CDAC also determined that projects nearing completion should receive additional consideration for funding, as these projects have the potential of providing immediate benefit to the community. It is anticipated that the FY07/08 CDBG allocation will leverage other resources that will include but are not limited to the following: Springfield General Fund, other Federal resources, State funds, Lane County Road Tax funds, local assessments for public improvements, private donations, in-kind contributions, and contributions provided by the applicant agency. Activities Benefitina Low- and Moderate-Income Persons Generally, Springfield's CDBG-funded programs and projects are provided to 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 target population or projects must have a service area that is primarily low-income. Funded programs and projects undergo periodic staff monitoring to ensure compliance with CDBG regulations. Activities for the Prevention or Elimination of Slum and Bliahted 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. Beginning in the fall of 2003, the City of Springfield began an inventory of structures in the downtown corridor to determine if the area would meet the CDBG qualifications as a Blighted Area. A total of 116 structures were inventoried and a visual inspection was made of the exterior of each structure. 68 structures were determined to have conditions of decay and deterioration. At a public hearing on December 1, 2003, the City Council approved amendments to the 2000 Eugene-Springfield Consolidated Plan to designate a Springfield Downtown Redevelopment Area, in compliance with CDBG regulations. The Downtown Redevelopment Area has boundaries of Mill Street (west boundary), South A Street (south boundary), 10th Street (east boundary) and B Street (north boundary), excluding the residential areas on the south side of B Street between 8th and 10th Streets, and on the north side of A Street between 9th and 10th Streets. The amendments to the Consolidated Plan also included provisions for reserving a portion of the City's annual CDBG allocation for projects that Attachment 1, page 3 specifically address the problems of blight in the Downtown Redevelopment Area. The amendments were sent to HUD for review and approval. The City received approval of the amendments from HUD on February 12, 2004. At a public hearing conducted on April 16, 2007, the City Council approved FY07 -08 CDBG funding for two projects, none of which qualifiesfor funding~n<:ier the Area Slums and Blight national objective. The City Council decided to ?W[~fLa~I)Y the funding of a third CDBG application at the May th, 2007 Public Hearing. An allocation table and summaries of each approved project can be found at the end of this section. Funding for grant administration and planning, public services and housing programs was also approved by the Council. Anti-Povertv and Homeless Housina Continuum of Care Service System The City of Springfield works with its partners in local government, the City of Eugene and Lane County, in a collaborative effort to address anti-poverty and homeless issues. The intergovernmental Human Services Commission (HSC), composed of elected officials and appointed members from these jurisdictions, allocates funding to address these issues. The HSC is developing a work program that encompasses the following areas: 1. Crisis Access & Stabilization Service System. 2. Short-Term Basic Needs Services. 3. Transitional Housing Services. 4. Permanent Supportive Housing Services. The Continuum of Care approach provides for multi-point access to services and linkages among settings and services providers. Not all at-risk or homeless families and individuals will need access to all four components. The HSC will receive an allocation of $94,215 in CDBG funds from the City of Springfield, which is equivalent to 15% of the City's FY07/08 allocation. . To further incorporate the Continuum of Care philosophy into its delivery of services, Springfield's Housing Programs has expanded the array of services being provided to very low and low-income persons. The five programs being administered by the housing programs staff address homeless prevention and housing assistance, repair to dwellings owned by low and very low-income households and homeownership through the SHOP. These programs are described more fully in the following narratives (the SHOP narrative will be found in the HOME program section). The City of Springfield also partnered with the City of Eugene, Lane County and local non-profit service providers to create Project Homeless Connect. Springfield provided staff and funding and was represented on the steering committee of this highly successful pilot project. The event was attended by over 1,000 homeless in our community. This project will continue on an annual or semi-annual basis. City of Sprinafield COBG Funded Housina Proarams · The City of Springfield successfully implemented the CHORE program in FY99/00, and continues to provide this assistance to Springfield residents. This program is designed to provide assistance to very low-income, primarily elderly homeowners in Springfield to provide basic lawn care services and exterior home maintenance. The City plans to continue the CHORE program and is using approximately $5,000 of CDBG program income, if available, (not to exceed the 15% cap for public services) to provide services to homeowners who are unable to perform these services on their own. The program allows up to $250 annually to an eligible household for these activities. Attachment 1, page 4 . The City of Springfield will continue to provide assistance to qualified low-income homeowners through its Emergency Minor Home Repair Program and the Springfield Home Improvement Program (SHIP). These programs are funded from CDBG program income generated through SHIP loan repayments (when available) and an allocation from the new CDBG grant. The City will allocate $160,000 from its new CDBG grant for this purpose. . Emergency assistance to very low-income renters is available through Springfield's Emergency Rental Assistance Program (ERAP). This program provides single episode assistance to qualified renters. Strict household and property eligibility requirements help to protect this program against abuse or misuse. Funds are very limited and are available on a first-come, first-served basis. Coordination Coordination efforts between public assisted housing providers and private and government health, and mental health and service agencies is an extremely important activity. It is important, particularly now, when a number of housing providers are including within their programs, service components for the residents of their housing projects. Staff also works closely with other resource providers; coordinating efforts with the Springfield Utility Board for energy assistance and weatherization, the Lane County Senior and Disabled Services, and the United Way. The Housing Policy Board (HPB) is an intergovernmental body formed by representatives from Eugene, Springfield, Lane County, and the Housing and Community Service Agency (HACSA) to develop countywide housing priorities. The HPB's mission is "...to increase the availability of decent, affordable housing for low- and very low-income families and individuals in Lane County." The HPB meets on a monthly basis. The meetings are regularly attended by HAC SA, the HSC, Eugene and Springfield staff, non-profit providers, and developers. The agenda topics and information shared at the meetings allows for a formal method of communication to occur on a regular basis. The housing and service groups have established coordination and integration of the total housing delivery system (capital needs and service needs). Fair HousinaPlan (CDBG and HOME Proarams) The City of Springfield crafted a Fair Housing Plan in 1998 as part of its FY98/99 One- Year Action Plan. The Fair Housing Plan was revised and updated in 2005 for inclusion in the Eugene-Springfield Consolidated Plan 2005. A summary of strategies to address impediments to fair housing opportunities, responsible agencies and a timetable of activities is included as part of Springfield's Fair Housing Plan. The following are some of the strategies and programs that the City of Springfield is using to affirmatively further fair housing: Identify areas of the Sprinafield Development Code that may unintentionally restrict. inhibit or otherwise impede the development of affordable housina - A primary goal of the federal Fair Housing Act and its amendments is to provide housing choice for everyone. Everyone should be able to live where they choose, if they can find housing in the area of their preference that they can afford. This strategy seeks to address impediments to housing choice and affordability that may be contained in the Development Code. Staff from the Planning Division is reviewing the Development Code for consistency and clarity, and is making plan revisions where conflicting language exists. A clear and consistent code will Attachment 1, page 5 assist developers in creating and submitting complete and accurate plans and documents for review, with the goals being less time and money spent by architects and engineers on revisions and re-submittals and shorter review/approval times by City staff. This will result in lower project costs and lower prices to homebuyers and renters. Staff is also reviewing sections of the Development Code that, because of requirements or restrictions, may inadvertently limit the range and diversity of housing developed in Springfield. . Residential Lands - The City of Springfield has initiated a Residential Lands Study with the purpose of analyzing the city's future housing needs and land supply to meet those needs. The study evaluates the projected housing needs of various age and income populations for a 20-year planning horizon. The need will be expressed in housing types and price points as well as in acres needed to build new housing. The study will guide the city's planning policies as they address Statewide Planning Goal 10-Housing. Goal 10 requires cities to adopt policies that encourage the availability of adequate numbers of "needed housing units" at price ranges and rent levels which are commensurate with the financial capabilities of Oregon households and allow for flexibility of housing location, type and density. . Needed housing includes housing types determined to meet the need shown for housing at particular price ranges and rent levels. These housing types include but are not limited to attached and detached single family housing, multi-family and manufactured homes. Needed housing also includes government-assisted housing. By keeping abreast of housing needs, the City of Springfield can better ensure the availability of housing opportunities for all of its citizens. · Fair Housina Hotline - Our contract for a fair housing consultant and operator of a 24-hour fair housing hotline is a key component in Springfield's ongoing commitment to affirmatively further fair housing. The fair housing consultant provides is a valuable resource to people who feel that their rights to housing in Springfield have been violated. The consultant is also a valuable resource for property managers and landlords whether or not they are the focus of fair housing complaints. The fair housing consultant is able to educate and train them in the current state of fair housing law, answer questions they may have regarding their enforcement and eviction practices, and mediate tenant landlord disputes. By providing timely and accurate information to tenants, landlords, and property managers, the consultant is able to assist in the resolution of many housing related complaints, before they escalate. The City of Springfield's AI states under "Rental Practices" that the lack of fair housing training being provided to rental managers and landlords may contribute to the higher incidents of complaints in the rental market (relative to the ownership market). Our contract with the fair housing consultant addresses this impediment, and supports Springfield's certification to affirmatively further fair housing. The City of Springfield is contracting with the Fair Housing Council of Oregon to provide these services for FY07-08. · Emeraencv Rental Assistance - In response to requests and queries from area housing providers, the City of Springfield designed and implemented the Emergency Rental Assistance Program (ERAP) in 2003. The providers identified a need for one-time assistance to help households who are facing eviction for non-payment of rent, due to extraordinary or catastrophic circumstances. The program will pay 60% of the past-due rent (up to $400). Strict programmatic requirements help to ensure that assistance is provided where the need is greatest, and where the probability of long-term benefit is evident. By curing evictions and helping people remain in their homes, this activity supports the City of Springfield's certification to affirmatively further fair housing. Attachment 1, page 6 . Sprinafield Homeownership Proaram - The City of Springfield continues to administer the very successful Springfield Homeownership Program (SHOP). The SHOP provides downpayment assistance for low-and very low-income households. SHOP brochures and posters have been printed in both English and Spanish language versions. The cities of Eugene and Springfield combine efforts to provide ongoing lender and realtor training. In addition Springfield staff avail themselves regularly to agencies and organizations to provide SHOP training to their employees, associates and clients. In FY95/96 the SHOP assistance was increased to $4,000 with a requirement that the buyer contribute $1,500 of their own funds towards the purchase of the home. At that time the average home purchased using the SHOP sold for $64,700. In July of 2005 Housing Programs staff gained approval to increase the SHOP assistance to $6,000. The average sales price for a HOME purchased using the SHOP was $123,000, a 90% increase in price from the homes purchased in 1995. In just six months only eight homes were purchased using the SHOP with an average purchase price of $158,000. Not only has the price range of affordable homes increased nearly 30% but 2/3 fewer SHOP loans were processed in that period of time than in past years. In counseling with the Home Ownership Center of Lane County City staff has confirmed three very important issues facing first time home buyers in our area that have influenced our decision to request an increase in the funding: Springfield staff continues to work to build relationships with lenders and realtors to increase outreach to the Hispanic population. Housing staff participated in an all Spanish speaking homeownership event in November of 2006. In 2006 and the first three months of 2007 21 % of the SHOP loans have been to assist minority households in becoming first time homebuyers. This activity addresses the specific areas of "Sales Practices" and "Lender Practices" in Springfield's AI, and supports the City of Springfield's certification to affirmatively further fair housing. · Lanauaae as an Impediment to Fair Housina - All of the current housing staff for the City of Springfield have participated voluntarily in a Beginning Spanish class offered to City employees. One staff member took two semesters of college level Spanish and is called on to assist with Spanish speaking citizens that visit City Hall. In addition, all of the various housing program brochures have been printed in Spanish, and our Fair Housing Consultant is fluent in Spanish. As mentioned earlier, the City also sponsors the "The ABCs of Homebuying" classes in Spanish. We will continue to develop our outreach capabilities as a means of providing fair housing opportunities. Asan additional resource, the Fair Housing Council of Oregon provides all of their hotline, information, outreach and enforcement services in Spanish and in English. · Housina Outreach- Housing Programs Staff routinely participates in many community outreach events to inform low and moderate-income persons of the opportunities that are available to them through the City's housing programs. Beginning this funding year the City has been fortunate enough to work closely with the Neighborhood Economic Development Corporation (NEDCO) in their role as the Homeownership Center of Lane County. They provide a comprehensive array of services that together help families achieve their goal of homeownership. The services include providing information on first time homebuyer Attachment 1, page 7 programs, providing homeownership education and counseling through the Threshold Homeownership Education and Counseling Program and the ABC's of Homebuying class, working with lenders and real state professionals who have a mission to help first time homebuyers. Through the Regional Housing Center staff has had numerous opportunities to participate in Mortgage Broker/Lender and Realtor training as well as the Oregon Real Estate Symposium. In July of 2006 the City was the host site for the Homeownership Center of Lane County's Hispanic Homeownership and Financial Fair. . 2007 Proiect Homeless Connect for Lane Countv- The City of Springfield was an active supporter and participant in the first Project Homeless Connect for Lane County. Held at the Lane Convention Center, the event drew over 1000 homeless and at-risk persons and provided food, medical, housing and other services. Springfield plans to continue to be involved with this event in the future. A link to the final Report for the 2007 Project Homeless Connect for Lane County can be found on the Housing and Community Development website at: http://www.ci.springfield.or.us/dsd/Housing/housing.home.htm Reduction of Lead-Based Paint Hazard (CDBG and HOME Proarams) . Backaround - The health risks to young children posed by lead-based paint in residential dwellings remains an important issue. Progress in research and technology during the past 25 years has improved the understanding of how children are poisoned and our knowledge of how to better protect them, yet lead-based paint risks to children is still a significant problem nationally. In an effort to address this problem, HUD published its Final Rule to Title X of the 1992 Housing and Community Development Act in September 1999. This rule, referred to as the Lead Safe Housing Regulation, requires certain prescribed actions by HUD grantees to identify, stabilize, or remove lead-based paint hazards in housing receiving HUD assistance. The scope of activities required by HUD is largely dependent upon the type of housing affected and the amount of Federal assistance provided, with rehabilitation activities using in excess of $25,000 of HUD funds requiring the highest level of treatment. Initially, all HUD grantees were required to be in compliance with the rule by September 2000. Because of the insufficient numbers of qualified lead hazard contractors, an extension for compliance was given until April 2001. The rule only affects residential structures built before 1978. Currently, there is no plan for HUD or another section of the Federal government to provide funding to jurisdictions to help pay for the cost of implementing the lead-based paint regulations. · City Administered Housina Rehabilitation Proarams - It is estimated that, in the cities of Eugene and Springfield, approximately 55,000 units of housing were built prior to 1978, and may contain lead-based paint. This represents 70% of all housing units in the metropolitan area. Since the vast majority of the homes assisted through each City's homeowner rehabilitation programs (including emergency minor home repair) are in this age category, it is clear that dealing with the issue of lead-based paint will have a significant impact on these programs. Many facets of each jurisdiction's housing programs will be affected: · Costs associated with lead paint testing and treatment will increase the total costs of many small projects, meaning either an increased budget or a reduction in the number of units assisted. · Temporary relocation of residents while treatment/abatement activities are taking place Attachment 1, page 8 will add to the project cost, and make higher demands on the assigned staff. . Contractors who can provide the services required for paint stabilization and/or abatement will need to be identified. Contractors who currently participate in city housing programs will need to be made aware of the new requirements. . City Administered Homeownership Proarams - The homeownership downpayment assistance programs currently being administered by each City will also be affected by the Lead Safe Housing Regulation, though not to the extent of the rehabilitation programs. Compliance with the new requirements will mean visually identifying deteriorated paint and stabilizing the affected areas using safe work practices. The unit must then be cleared by a certified lead-based paint inspector. It will be incumbent on the seller and listing realtor to take the necessary steps to present a "clean" unit upon initial inspection to avoid costs and delays associated with testing, stabilization, and clearance activities. Sellers and buyers may also choose to forego using down payment assistance, if compliance with the lead- based paint rule is perceived as being to burdensome. · Non-Profit Housina Rehabilitation Proiects - Acquisition and rehabilitation activities of older structures undertaken by area non-profit housing providers receiving HUD funds will also be affected. Since these projects often require HUD subsidies exceeding $25,000 per unit, the cost of treating lead-based paint may add significantly to the overall cost of the project. Additional funds may be required to offset the increase in cost, with the probable result of fewer units being rehabilitated. Key staff of non-profits will need to be trained on the lead-based paint rules, specifically project design, and administration and oversight. Ultimate responsibility for project compliance will fall on the local jurisdiction that provided the HUD funding to the project. Other Activities to be Undertaken Purchase of Distressed. Undervalued or Beneficial Properties - Occasionally, the City of Springfield is made aware of an opportunity to purchase property that is distressed or undervalued, or whose location and features are such that its acquisition by the City may be beneficial to the community. In the past, the City could not use CDBG and/or HOME funds to assist with the acquisition of such properties because that activity was not included in the current Consolidated Plan. When an opportunity presented itself, the City would, a) pass the opportunity to acquire the property on to area non-profit housing providers, b) allow the market to determine the property's disposition, or c) in the case of distressed properties, let the property lapse into foreclosure. With the rapid increase of land values in Springfield, the City may want to consider acquiring such properties with HOME or CDBG funds, and make them available in the future for purchase and/or development of an eligible project that would benefit the Springfield community. Examples of how this provision could be used: · Purchase of residential properties prior to foreclosure to be made available for affordable homeownership housing. · Purchase of vacant land for future use as affordable housing or neighborhood development. · Purchase of distressed downtown properties for redevelopment. · Purchase of properties in Glenwood for redevelopment. Approval by the City Council will be required prior to acquiring any properties. Due to the scarcity of available CDBG and HOME funds, it is anticipated that this provision will be used very sparingly. However, inclusion of this provision in the Five-year Consolidated Plan is necessary Attachment 1, page 9 in order for the City to consider acquisition with CDBG or HOME funds as an option. Downtown Redevelopment Area - With the designation of the Springfield Downtown Redevelopment Area in 2004, the City of Springfield took a major step toward reversing the decades of disinvestment and decay that has plagued the city's central business area. The City Council has committed CDBG funds for three consecutive fiscal years to assist with capital improvement and redevelopment projects in the downtown core. Projects will need to meet the CDBG criteria for area "slum and blight" activities. FY07-08 is the third and final year of the original three-year set-aside. Upon the recommendation of the Community Development Advisory Committee, the Springfield City Council approved an extension the downtown CDBG set-aside through FY08-09. Summary of Other Resources The following is a list of Federal and non- federal public and private funding sources which can reasonably be expected to be available for project development: · Oregon Housing Trust Fund. Administered by the State of Oregon. Eligible activities include acquisition, construction and rehabilitation, and pre-development costs associated with low- and moderate-income housing development. The full amount of Oregon Trust Funds invested into the project is eligible as HOME match. Attachment 1, page 10 . Oregon Affordable Housing Tax Credit Program. Formerly called the Oregon Lender's Tax Credit Program; administered by the State of Oregon; provides below-market interest rates for low- and moderate-income housing projects. Maximum interest rate reduction is 4% below market, for a maximum term of twenty years. HOME match is calculated by applying the present discounted cash value to the total yield forgone by the lender. . Economic Development Initiative (EDI) Special Projects Grants. The City of Springfield has been successful in the past in securing EDI grants for downtown redevelopment. EDI grants are project-specific awards by HUD to support and stimulate economic development. The Wildish Community Theater was the most recent recipient of an EDI-Special Projects grant from HUD. · Low-Income Housing Tax Credits (L1HTC). This is a federal program that can provide large infusions of capital to affordable housing projects.' Tax credits are awarded to a project over a 10 year period. These tax credits are then sold or "syndicated" to private businesses or organizations at less than face value to offset their tax liability. The Royal Building project is the most recent recipient of an L1HTC award. · Section 108 Loan Program. Springfield continues to review the possibility of applying to HUD for a Section 108 loan to help with the development of CDBG eligible projects, including projects which address issues of blight in the downtown section of the city. Approval to move ahead with an application for Section 108 funding must be by Council action and requires public notification and an opportunity for comment. If approval is received, the City will be eligible to apply for up to five times its annual CDBG allocation. Section 108 funds are treated as CDBG funds, and projects are subject to the same national objectives and eligibility requirements. The City is currently in the process of identifying potential capital projects in downtown and in Glenwood that could benefit from Section 108 funding. · Local Permit and Fee Waivers. The City of Springfield, has in the past, allocated funds for the assumption of building permits, plan check fees, and system development charges for non-profit sponsored low- and moderate-income housing projects. The full amount of this contribution is eligible as HOME match. Due to recent budget constraints, this program is' currently on hold and is expected to resume at a later date. · Volunteer Labor. Area non-profit housing developers have been successful in utilizing volunteer labor in their developments. The Lane Community College Construction Technologies Department has contributed student labor for all phases of housing development. Architects, attorneys, and other professionals have also contributed their services to non-profit housing developments inSpringfield. Volunteer labor is eligible as HOME match and is ~alculated at a flat rate of $10.00 per hour. · State Loan Guarantee Program. Although this is not a "true source" of funds, this program serves to enhance a loan by providing a warranty as security for up to 25% of the loan value. Used as a tool by housing developers, it can allow lenders to increase their loan amount, and/or decrease the interest rate of the loan at little or no additional risk to the lender. Not eligible for HOME match. · Property Tax Exemptions. Exemptions from City property taxes have been allowed for qualified non-profit housing developers on a project-by-project basis to low- and moderate- Attachment 1, page 11 income housing developments. Generally based on the benefits provided to the community and the duration of the low- and moderate-income housing commitment, property tax exemptions are eligible as HOME match. The amount of match credit is calculated as the current discounted cash value of the tax exemption. . Vertical Housing Development Zone Tax Exemption. In October 2004, the City of Springfield received a Vertical Housing Development Zone (VHDZ) designation from the State of Oregon. The VHDZ program allows partial property tax exemption for qualified new housing that is built over street level commercial space. An eligible project can receive 20% of tax exemption per floor of housing up to a total of 80%. This program can provide valuable incentives to develop new housing in Springfield's downtown corridor, which in turn will help support commercial growth and revitalization activities. . Private Contributions. Cash and materials have been contributed in the past by private businesses, corporations, and foundations to assist in the development of low-income housing in Springfield. It is expected that future contributions from private sources will continue to provide needed assistance. Private contributions are eligible as HOME match. A chart of the CDBG activities approved by the Springfield City Council on May 7,2007 can be found on page (page number to be determined). A summary of Springfield's CDBG-funded projects can be found on pages (page numbers to be determined). Activities were approved for funding at a public hearing before the Springfield City Council. Attachment 1, page 12 City of Springfield FY07/08 COBG Funding Allocations Funding Amounts: New Grant Funds Previous Years TOTAL AVAILABLE $628,101 o $628,101 Applicant Project Amount New Prevo Funds Years Relief Nursery Construction of Relief Nursery Facility on $97,400 0 South 42nd street Lane Shelter Construction of wheelchair ramp and $15,000 0 Care/Shankel Safe Haven installation of security/privacy screening Construction of retail facility in the Wynant's Family Nutrition Downtown area resulting in low-mod job $90,000 Center creation City Housing Programs $160,000 0 \ Human Services Commission $94,215 0 Grant Administration $125,620 0 Unallocated funds 45,866 GRAND TOTAL $628,101 Attachment 1, page 13 City of Springfield Summary of FY07/08 COBG Proposals and Approved Funding Amounts 1. Project: Location: Developer: Amount: Total Proj. Cost: Wynant's Family Nutrition 722 South A Street, Springfield Joan HaydnlTamara K. Daily, Owners $ 90,000 $675,000 The owners of Wynant's Family Nutrition are requesting $90,000 for the renovation and expansion of an existing building on property located at 722 South A Street. The property was purchased by the owners in December of 2006. The owners plan to relocate and grow their retail business, which is currently located at 1859 Pioneer Parkway East. The Wynant's Family Nutrition Center will be open for business seven days a week. The business hours will extend to 8:00 or 9:00 in the evening. The business owners expect the business to bring 500 people to the downtown each day. The business plans to expand their stock to include locally grown organic products. Additionally the business will produce 5-10 new jobs in the area including cashiers, clerks, stockers and maintenance staff. The Wynant business has been operating and growing in Springfield since 1981. The project qualifies under the CDBG national objective of creating jobs to benefit low and moderate income persons. 2. Project: Location: Developer: Amount: Total Proj. Cost: Relief Nursery Springfield Expansion' South 42nd Street, Springfield (Tax Map #18020522) Relief Nursery $97,400 $2,532,000 Relief Nursery is requesting $97,400 for Phase I of the four year plan for the construction of the Springfield Relief Nursery. . The project has received funding of $300,000 from the Meyer Memorial Trust, $40,000 from the Great Rotary Duck Race, and the Board of Directors is prepared to launch a Capital Campaign (a similar campaign for the Eugene site resulted in a fully funded project). The property that the Relief Nursery is considering for this project is located at 870 South 42nd Street. The property is currently owned by the City of Springfield, and was originally part of a 1981 land purchase using CDBG funds. Purchase of the property by the Relief Nursery has been approved by the City Council and the Relief Nursery is in the process of negotiating a final sale with the City. Proceeds from the sale will be COBG program income, and has been earmarked by Council action for future downtown activities. The Relief Nursery's mission is to prevent child abuse and neglect, and to work with parents and children to create strong, nurturing families and healthy home environments in which children may thrive. The Relief Nursery has a 30 year history and currently serves more than 1,000 Attachment 1, page 14 children and their families annually. Up to 50% of these families have a documented history of child abuse or neglect; after one year with the Relief Nursery that number drops to 5%. The Relief Nursery partners several agencies throughout the state. Extensive community involvement and collaboration have been two important keys to our continued success with the families involved. For the proposed project the Relief Nursery has engaged in detailed planning discussions with Mayor Leiken, The Springfield City Council, School Superintendent Nancy Golden and Head Start of Lane County. 3. Project: Location: Developer: Amount: Total Proj. Cost: Shankle Safe Haven Facility 1545 South Brooklyn Ave (Glenwood) Lane Shelter Care $15,000 $15,000 Lane Shelter Care is requesting an allocation of $15,000 to assist with the addition of a wheelchair access ramp on the back porch and privacy fencing around the facility. In the past Lane Shelter Care has received a CDBG allocation of $5,024 for the replacement of the HVAC system, $8,891 for replacement of heating units and air systems and $3,539 to expand the residential area of at the Shankle Facility. If the application is successful Lane Shelter Care will be able to provide a safer, more accessible environment for the chronically homeless individuals they serve. Shankle Safe Haven provides shelter and services to special needs homeless adults. The program opened in 1997 and provides up to two years of transitional housing for up to 12 individuals who have been chronically homeless and are diagnosed with a severe, persistent mental illness in its residential wing. In the other half of the building, daily activities, meals, laundry and showers are available for a larger pool of clients (up to 40). A day activity center for residents promotes success at independent living, increased skill level and income, and greater self-determination. Attachment 1, page 15 City of Springfield One-Year Action Plan for FY07/08 HOME Investment Partnerships Program Description HOME Investment Partnerships Program (HOME) funds are received from the U.S. Department of Housing and Urban Development (HUD) and administered by the Eugene-Springfield Consortium for the metropolitan area. The primary purpose of the HOME program is to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for low- and moderate-income families. HOME funds can be used for new construction or rehabilitation of housing projects which will be affordable to low- and moderate-income households, for the acquisition of eligible properties by for-profit and non-profit developers, for tenant-based rental assistance programs, and for first-time homebuyer programs. HOME funds can be provided to the project as a grant or as a loan, and the loan can be set up in various ways; low- or no interest, amortized, deferred or forgiven according to the needs of the project. Springfield's Fiscal Year 2006/2007 (FY06/07) allocation of HOME funds is $438,642 and a special allocation of $8,160 in American Dream Downpayment Incentive (ADDI) funding to enhance the downpayment assistance program. In addition, $200,000 in program income is also available, for a grand total of $646,802. The HOME Agreement is a document entered into by the City of Springfield and the recipient of HOME funds. The Agreement fixes the amount of the allocation, determines the terms of repayment, defines the performance and monitoring parameters of the project, and certifies acceptance and compliance with all applicable Federal, State, and local regulations. Attachments to the HOME Agreement include a statement of work, HOME affordability requirements, recipient's certification of governmental assistance, a Declaration of Restrictive Covenants and the HOME Allocation Agreement, which determines the allocation of proceeds from the sale of a HOME-assisted project, should the sale occur prior to the expiration of the mandatory compliance period. A Community Housing Development Organization (CHDO) is a special designation given to non- profit housing developers that meet certain specific requirements pertaining to the formation and stated purpose of the non-profit. A CHDO must have among its purposes the provision of decent housing that is affordable to low- and moderate-income persons. In addition, a CHDO must have representation of low-income community residents on its governing board and must have a defined geographic service area. The complete definition can be found in 24 CFR ~92.2. A minimum of 15% of the HOME funds must be reserved for use by CHDOs. The Community Development Advisory Committee (CDAC) was established by the City of Springfield to make recommendations concerning program policy and project selection to the City Council. The goals of the committee are: 1. To allocate HOME funds in a manner which will serve to expand and preserve the supply of decent, safe and affordable housing for low- and moderate-income residents of Springfield. 2. To ensure the long term viability of Springfield's Housing Programs through the efficient use, and return of investment of HOME funds. It is the City's preference to award HOME funds as a loan, with interest rates and repayment provisions Attachment 1, page 16 matched closely with the needs of each individual project. Other Resources The following is a list of non-federal public and private funding sources which can reasonably be expected to be available for project development: · Oregon Housing Trust Fund. Administered by the State of Oregon. Eligible activities include acquisition, construction and rehabilitation, and pre-development costs associated with low- and moderate-income housing development. The full amount of Oregon Trust Funds invested into the project is eligible as HOME match. · Oregon Affordable Housing Tax Credit Program. Formerly called the Oregon Lender's Tax Credit Program; administered by the State of Oregon; provides below-market interest rates for low- and moderate-income housing projects. Maximum interest rate reduction is 4% below market, for a maximum term of twenty years. HOME match is calculated by applying the present discounted cash value to the total yield forgone by the lender. · Local Permit and Fee Waivers. The City of Springfield, has in the past, allocated funds for the assumption of building permits, plan check fees, and system development charges for non-profit sponsored low- and moderate-income housing projects. The full amount of this contribution is eligible as HOME match. Due to recent budget constraints, this program is currently on hold and is expected to resume at a later date. · Volunteer Labor. Area non-profit housing developers have been successful in utilizing volunteer labor in their developments. The Lane Community College Construction Technologies Department has contributed student labor for all phases of housing development. Architects, attorneys, and other professionals have also contributed their services to non-profit housing developments in Springfield. Volunteer labor is eligible as HOME match and is calculated at a flat rate of $10.00 per hour. · State Loan Guarantee Program. Although this is not a "true source" of funds, this program serves to enhance a loan by providing a warranty as security for up to 25% of the loan value. Used as a tool by housing developers, it can allow lenders to increase their loan amount, and/or decrease the interest rate of the loan at little or no additional risk to the lender. Not eligible for HOME match. · Property Tax Exemptions. Exemptions from City property taxes have been allowed for qualified non-profit housing developers on a project-by-project basis to low- and moderate- income housing developments. Generally based on the benefits provided to the community and the duration of the low- and moderate-income housing commitment, property tax exemptions are eligible as HOME match. The amount of match credit is calculated as the current discounted cash value of the tax exemption. . · Vertical Housing Development Zone Tax Exemption. In October 2004, the City of Springfield received a Vertical Housing Development Zone (VHDZ) designation from the State of Oregon. The VHDZ program allows partial property tax exemption for qualified new housing that is built over street level commercial space. An eligible project can receive 20% of tax exemption per floor of housing up to a total of 80%. This program can provide valuable incentives to develop new housing in Springfield's downtown corridor, which in turn Attachment 1, page 17 will help support commercial growth and revitalization activities. . . Private Contributions. Cash and materials have been contributed in the past by private businesses, corporations, and foundations to assist in the development of low-income housing in Springfield. It is expected that future contributions from private sources will continue to provide needed assistance. Private contributions are eligible as HOME match. Leveraaina Federal Funds The City of Springfield allocates HOME funds through a competitive Request for Proposal (RFP) process. The current housing and supportive services needs of the city are outlined in the RFP packet. Housing activities are categorized and prioritized by community need and fund allotments are made by category. Also outlined in the packet are the City's criteria for ranking projects. One criterion is efficiency of use of Federal funds, which can be demonstrated by documenting the status and maximizing the amount of other funding sources. Thus, the most competitive projects will have maximized the funds leveraged by Federal dollars. The City has not had to impose any threshold percentages for leveraged or matched funds; the RFP process has been self-regulating in this respect. The City of Springfield tracks HOME matching contributions on a continual basis to ensure compliance with applicable HOME program regulations, which requires a minimum 25% matching contribution. · Low-Income Housing Tax Credits (L1HTC). This is a federal program that can provide large infusions of capital to affordable housing projects. Tax credits are awarded to a project over a 10 year period. These tax credits are then sold or "syndicated" to private businesses or organizations at less than face value to offset their tax liability. The Royal Building project is the most recent recipient of an L1HTC award. The Springfield HOME Agreement contains a Subsidy Layering Certification which identifies all sources of project funding, and if additional Federal funds are being utilized or applied for requires notification to the City be given by the HOME recipient. This allows the City to monitor all current and future sources of funds, and to evaluate the project's need for HOME funds. The City will conduct an additional review of subsidy layering at the time that the HOME agreement is put in to place. The City will only contribute HOME funds to projects in the amount that is necessary to provide affordable housing. Activities to be Undertaken Purchase of Distressed. Undervalued or Beneficial Properties - With the rapid increase of land values in Springfield, the City may want to consider acquiring such properties with HOME or CDBG funds, and make them available in the future for purchase and/or development of an eligible project that would benefit the Springfield community. Inclusion of this provision in the five-year Consolidated Plan is necessary in order for the City to consider acquisition with CDBG or HOME funds as an option. (See "Activities to be Undertaken" in the Springfield CDBG Section for an expanded narrative) A chart of Springfield's HOME activities approved by the Springfield City Council follows on page (page numbers to be determined). Springfield's HOME projects are summarized on pages (page numbers to be determined). Two HOME projects, grant administration, CHDO operating support and housing program allocations were approved for funding at a Public Hearing before the Springfield City Council on April 17, 2006 and are included in this One-Year Action Plan. Attachment 1, page 18 Geoaraphic Distribution A project must be located within the Springfield city limits in order to be eligible for assistance through the City's housing programs. The City has developed a Springfield Community Housing Plan to identify areas of need within the city and to develop assistance programs that target these needs. Need is generally based upon income levels, public safety issues, and physical deterioration. The rationale behind such targeted assistance is to provide decent housing and a suitable living environment principally for low- and moderate-income persons. Such assistance may take the form of any activity described in this Plan. These areas will be limited in size to generally not larger than a census block group. Though assistance will not be limited to the targeted areas, it is anticipated that more comprehensive efforts will be directed at the targeted areas. With the designation of the Downtown Redevelopment Area, the Springfield City Council and . local business leaders have made redevelopment of the core downtown area a priority. Creating a place where people work and live is vital to maintaining a thriving downtown. The City has an opportunity to invest HOME funds in the development of a midrise apartment building in the heart of downtown. The building will provide commercial space on the ground floor and 33 affordable one bedroom rental units on floors 2-5. The project is being developed by St. Vincent de Paul. The HOME and CDBG funds invested in the project will leverage nearly 5 million dollars in other funding. Minoritv Concentrations - Data from the 2000 Census shows that Springfield has three census block groups that have moderate concentrations of minority/ethnic households. Census tract 21.01, block group 2 is located north of 1-105, south of Hayden Bridge Road, east of Pioneer Parkway and west of 5th Street. Census tract 32.02, block group 2 is located to the west of Pioneer Parkway and east of Kelly Butte and is more commonly referred to as the Meadow Park neighborhood. Census tract 33, block group 6 is located north of Centennial Road, south of 1- 105, east of Pioneer Parkway and west of 10th Street. All three block groups have 15% or higher minority households and 10% or higher Latino/Hispanic households. Please note that some of the households may have self reported in both categories. All three of these block groups have a high number of modestly priced apartment units and a majority of low- and moderate-income households. Homeless and Special Needs Activities The City of Springfield plans to continue to provide support for homeless and special needs activities through the utilization of the HOME program funding. Current and past HOME projects that serve this diverse target population are: · Housing units for transitional and very low-income individuals. · Transitional housing for homeless families. · Group homes for developmentally disabled persons. · Security deposit assistance for homeless families exiting shelter. · Service enriched rental housing for special needs individuals. · Emergency rental assistance for very low-income households. · Dedicated housing for low-income seniors Attachment 1, page 19 The Consortium provides CHDO operating assistance for local non-profit agencies, two of which serve homeless populations in Springfield through counseling, case management, and other services. Other Actions In addition to the homeless and special needs activities described above, the City of Springfield plans to allocate HOME funds to support the following activities in the coming year: . Acquisition and Rehabilitation of existing housing stock for low-income homeownership. . Rehabilitation of existing housing stock to be used for very low-income rental housing for persons with disabilities. . Downpayment assistance for low-income first-time homebuyers. . New construction of rental housing. In addition, a local non-profit agency also provides homeownership counseling and education to low and moderate-income families in Springfield. Specific HOME Proaram Reauirements The City of Springfield currently provides assistance to homebuyers through two programs. Each program has its own resale and recapture provisions. · Sprinafield Homeownership Proaram (SHOP) - This program provides downpayment assistance to low- and moderate-income first-time homebuyers. The HOME funds are provided to the qualified buyer as a no interest deferred loan which is recorded as a lien against the HOME-assisted property. The lien is repaid in full to the City upon the subsequent resale of the property. There is no expiration date for the lien. Successful completion of a homeowners hip preparation course conducted by a participating lender or an equivalent program conducted by a participating CHDO is a prerequisite to qualifying for this program. All low- and moderate-income persons who have resided in Springfield for one year or longer are eligible for the SHOP program. In addition to the assistance provided to first time homebuyers purchasing market rate homes the Consortium has elected to provide assistance to homebuyers purchasing homes in housing developments and/or subdivisions constructed or rehabbed specifically to provide housing for low-income homebuyers a subsidy of double what the current SHOP allocation is. All other terms and conditions of the SHOP will remain the same. · Lease/Ownership Proaram - This homeownership program is operated by local non-profit agencies. The agency assists low-income families by preparing them for homeownership through a series of classes. In addition, a portion of their rent each month is set-aside to assist with the eventual purchase of the home. The HOME investment that is subject to recapture in this program is the amount of HOME assistance that enabled the homebuyer to purchase the dwelling unit. This recaptured amount is repaid to either the HOME Consortium Trust fund or the CHDO which developed the housing and is to be used for housing activities benefiting low-income households in Springfield. Recapture provisions mayor may not include language to allow the participating jurisdiction to share in the built up equity in the project. Terms and conditions of the recapture provisions are described in the HOME Agreeme~t for each project. Attachment 1, page 20 Euaene-Sprinafield Consortium Homeownership Period of Affordabilitv-HOME Recapture Provision The required HOME period of affordability for homeownership projects is based on the amount of HOME funds per unit: under $15,000 - five years, $15,000 to $40,000 - ten years, and over $40,000 - fifteen years. In order to ensure affordability,either resale or recapture requirements must be imposed. The HOME Consortium, consisting of the Cities of Eugene and Springfield, has selected the recapture option for all homeownership projects and programs, as described in 24CFR S92.254(a)(5)(ii). The amount subject to recapture is based on the HOME assistance that enabled the homebuyer to buy the dwelling. This amount is referred to as the "homebuyer subsidy" and includes down payment assistance. It doesn't include the amount of HOME assistance between the cost of producing the unit and its fair market value. This is referred to as the "development subsidy". HOME recapture provisions ensure that if; (a) the housing does not continue to be the principal residence of the family for the period of affordability, then all or a portion of the HOME assistance be shall be recaptured. When the HOME assistance includes the homebuyer subsidy, the Cities have chosen to recapture the full amount of the HOME subsidy whenever the initial owner sells the house. HOME affordability requirements will end upon recapture of the HOME subsidy. The recaptured funds will be deposited into the consortium HOME account and will provide assistance to future HOME projects. If the HOME assistance is only used for the development subsidy and therefore not subject to recapture, the resale option described in 24CFR S92.254(a)(5)(i) must be used. For many new construction projects, a substantial amount of HOME funds are granted on a single unit. A "silent second" loan will be recorded against the property representing these HOME funds. This will allow the mortgage amount to be affordable to a family or individual. This amount would be repaid into the local HOME account at the time of sale by the initial homeowner. This recapture scenario assumes appreciation in the real estate market. If the full amount is not available, either due to market conditions or foreclosure, the cities will recapture the net proceeds available from the sale. SprinQfield HOME Allocation AQreement In addition to the provisions described above, the City of Springfield includes in its HOME Agreement with for-profit developers an Allocation Agreement that describes the sharing of equity in a project proportional to each party's investment. This Allocation Agreement comes into effect only if the for-profit developer sells or otherwise transfers title to the property prior to the expiration of the HOME compliance period. All proceeds allocated to the City by this Agreement will be deposited into the HOME Trust Account, to be used for future HOME-eligible housing projects. The primary purpose of the Allocation Agreement is to protect the integrity of the HOME program by guarding against the taking of excess profits or windfall from the sale of a HOME-assisted project by a for-profit developer. Attachment 1, page 21 Monitoring Regulations state that the One~Year Action Plan must describe the standards and procedures that the jurisdiction will use to monitor activities carried out in furtherance of the Plan and to ensure that long-term compliance with requirements of the programs involved. . HOME Proiect Monitoring - Client income certification sheets are submitted annually by developers of HOME-funded projects and are placed in the project file. On-site monitorings of income documentation are completed. Housing Quality Standards inspections of HOME- assisted units are conducted on a one-, two-, and three-year cycle based on the number of HOME units. The inspector summarizes the findings and any follow-up work required. These inspection forms are filed in the project files. . Consortium Monitoring - The cities of Eugene and Springfield recently entered into a Memorandum of Understanding which states the program responsibilities of the Consortium. Springfield participates in an annual monitoring conducted by the City of Eugene as lead agency. · City Single Audit - The Federal HOME program is reviewed by the City's external auditors annually. · Proiect Management - A project manager is assigned to each project. The project manager reviews projects for compliance throughout the implementation of the project. Project contracts include a scope of work, timeline, and budget as well as regulatory requirements - use of minority business enterprises, environmental requirements, mitigation efforts, record keeping, etc. Attachment 1, page 22 FY 2007-08 HOME Funding Allocations Funding Amounts: New Grant Funds Program Income ADDI Funding TOTAL AVAILABLE $435,512 $280,000 $ 8,160 $723,672 Applicant Project Amount New Funds Program ADDI Income Construction of new homeownership unit on site \ with existing house which will be rehabilitated and made available to low- NEDCO income homebuvers 60,000 0 0 Two Affordable Homeownership Units- NEDCO Activities may include, land acquisition, house moving expenses and rehabilitation of units donated by Peacehealth $100,000 0 S1. Vincent de HUD-202 Project Senior 50,000 280,000 Paul Housing at the 3rd and S Street Site Habitat for Construction of three units 60,000 Humanity in the 1 O-unit Meyer Subdivision on 49th and A streets Grant Administration $43,552 0 0 City Housing Programs $100,000 0 $8,160 CHDO OperatinQ $21,776 0 0 Unallocated Funding $184 Subtotal $435,512 $280,000 $8,160 GRAND TOTAL $723,672 Attachment 1, page 23 City of Springfield Summary of FY07/08 HOME Proposals and Approved Funding Amounts 1. Project: location: Developer: Amount: Total Proj. Cost: One House Rehab and New Construction of One Unit 505 34th Street, Springfield Neighborhood Economic Development Corporation (NEDCO) $60,000 $393,850 The Neighborhood Economic Development Corporation (NEDCO)is requesting $60,000 to assist with the construction of one home for the purpose of providing affordable home ownership to first time homebuyers. The site on 34th street has an existing home which will be rehabilitated. The new home will be a 2 bedroom 1.5 bath house built on the property that is in the sub-dividing process. At the time of the application NEDCO has received tentative partition approval and have submitted for their final plat. They will be installing infrastructure and driveway this spring as part of the rehabilitation of the front existing home and expect to begin construction of the new home in the summer. A completion date is set for Spring of 2008. NEDCO has constructed and/or rehabilitated 12 homes in Springfield in the past six years. The five units on the Phoenix Place Subdivision will be completed in May of this year. All of these homes are and will be occupied by low-income first time homebuyers. They are currently working on the scattered site project in which they will purchase and rehabilitate four homes in Springfield. 2. Project: Location: Developer: Amount: Total Proj. Cost: land Acquisition/House Move and/or Rehabilitation of two homes donated by Peace Health homes are currently located on Deadmond Ferry and Baldy View roads new location to be determined Neighborhood Economic Development Corporation (NEDCO) $100,000 $393,850 The Neighborhood Economic Development Corporation (NEDCO) is requesting $100,000 to assist with the land acquisition, house move and/or rehabilitation of two homes donated by Peace Health for the purpose of providing affordable home ownership to first time homebuyers. NEDCO it currently looking for sites to locate the two homes. The Peace Health homes must be moved before fall of 2007. 3. Project: location: Developer: Amount: Total Proj. Cost: HUD 202 Project - Senior Housing 2.28 Acre Site at 3rd and S Streets. St. Vincent de Paul Society of Lane County Inc. (SVDP) $330,000 $6,204,821 S1. Vincent de Paul Society of Lane County Inc. (SVDP) has requested $330,000 to assist with the construction of the Aster Apartments a 54 units of housing for very low-income seniors. The City of Springfield provided $330,000 in CDBG funding in 2003 for the acquisition of the land. The HUD 202 funding was secured by SVDP in November of 2006. SVDP is committed to begin construction . . in September of 2007. The allocation of HOME funds is crucial at this point to make the project Attachment 1, page 24 move forward. The HUD 202 award is substantial but it does not cover all of the development costs. The HOME funds will fill the anticipated funding gap for the project. The project will enable residents to maintain and/or achieve independent living in three primary ways: 1) The site is located near several bus lines and is in very close proximity to grocery stores, restaurants, drug stores, banks and hospitals, 2) the residents will have elevator access throughout the building, all units will be designed to be visitable and some units will be fully ADA accessible and senior friendly enhanced lighting and door levers (as opposed to knobs) will be installed throughout the building throughout the facility, and 3) SVDP will partner with other service providers to offer educational and recreational opportunities for English and non-English speaking senior. 4. Project: Location: Developer: Amount: Total Prom. Cost: Meyer Park Phase I North A Street (west of 49th), Springfield Habitat for Humanity $60,000 $534,310 Habitat for Humanity is requesting $60,000 to assist with three units in the ten unit Meyer Park subdivision located on North A Street just west of 49th street in Springfield. Habitat has already completed several major components of Phase I including development of the street connection and sidewalks to North A Street and service connections to all ten lots has been installed. In addition, the construction required a bioswale for surface water/storm water collection which has also been completed. The houses will be two story 2 to 4 bedroom units (depending upon family size). Habitat for Humanity serves and work in partnership with low-income individuals and families with incomes from 30-60% of the area median. The families are selected based on need, willingness to partner and ability to pay. Habitat currently has three qualified families waiting for the Meyer Park homes. Two of the three families have already completed the required 200 hours of sweat equity necessary before their house can be started. The third family is nearing the 200 hour mark and will be complete when the third house in Phase I is set to begin construction. Habitat partners with churches and organizations to develop sponsorships for each home. They currently have a sponsorship agreement with First Congregational Church for the construction of one of the Phase I homes. Attachment 1, page 25 Table 3A: City of Springfield FY07-08 Activities Specific Objective In Specific Annual Objectives Source of Funds Performance Indicators Year Expected Number NEDCO- 34 Street # of LMI units created Ownership Housing for homeownership Development, to provide affordable homeownership 0 ortunities DH-2.32S NEDCO- Ownership HOME . # of LMI units created 2007 2 units Housing Development, for homeownership to provide affordable homeownership op ortunities DH-2.33S SVDP- HOD 202 Senior HOME . # of LMI units created 2007 54 units Housing, 3rd and S for seniors Street, to provide affordable permanent housing for LMI senior households DH-2.34S Habitat for Humanity, HOME . # of LMI units created 2007 10 units Meyer Park Phase 1, to for homeownership (3 HOME provide affordable assisted homeownership units) opportunities. DH-2.lS Springfield Home HOME . # oflow-income 2005 40 units Ownership Program ADD! households assisted (SHOP), to provide 2006 40 units affordable homeownership 2007 25 units opportunities 2008 2009 DH-3.1S Owner-occupied CDBG . # of households 2005 110 rehabilitation programs, HOME receiving emergency households to preserve housing stock assistance 2006 110 . EHR . # of rehab. loans households . SHIP . # of CHORE repairs 2007 110 . CHORE households 2008 2009 Attachment 1, page 26 Table 3A: City of Springfield FY07-08 Activities DH-3.2S Rental Assistance CDBG . # of families assisted 2005 30. Program, to prevent households homelessness 2006 30 households 2007 30 households 2008 2009 SL-1.3lS Shankle SafeHaven CDBG . # of LMI persons 2007 40 persons accessibility. receiving homeless improvements, to expand and support services homeless service opportunities to LMI persons SL-l.32S Relief Nursery, CDBG . # of LMI persons 2007 630 persons development of receiving childcare Springfield facility, to and parenting services expand services to LMI Human Services # persons receiving Commission, to provide shelter services to LIM persons . # persons receiving 2006 . Food For LC food . Relief Nursery . # persons receiving 2007 . Looking Glass counseling . Catholic Community . # persons receiving Services other services 2008 . SVDP Night Shelter 2009 SL-3.2S Lock Out Crime Project, CDBG . # LMI households 2005 200 to provide home security receIvmg emergency households measures to LMI home security 2006 400 households measures households 2007 0 households 2008 2009 EO-1.3lS Wynant's Family CDBG . # ofLMljobs created 2007 5.0 FTE Nutrition Center, renovate facility for LMI job creation Attachment 1, page 27 Table 3A: City of Springfield FY07-08 Activities EO-US Lane MicroBusiness, to CDBG provide micro-business assistance to LMI persons . # LMI persons receiving MB assistance 2005 25 persons 2006 15 persons 2007 Not funded 2008 2009 Attachment 1, page 28 MEMORANDUM CITY OF SPRINGFIELD Date: May 2, 2007 To: Gino Grimaldi, City Manager From: Bill Grile, Development Services Director Jodi Peterson, Management Analyst II & --v..h Kevin Ko, Housing Programs Specialist ~ Additional Information Requested for Consideration of the Wynant's Family Nutrition Center Request for CDBG Funding CC: Subject: Background . At the April 16th City Council Meeting the Council held a Public Hearing and considered the recommendations for funding Community Development Block Grant (CDBG) and HOME Investment Partnership programs brought forth by the Community Development Advisory Committee. The Council asked for more information regarding the application for funding made by Wynant's Family Nutrition Center before making a final decision on the proposed project. Specifically, the Council asked for more information on project costs, total project funding and options for securing and funding the CDBG allocation. COBG staff met with City Attorney Joe Leahy and Finance Director Bob Duey to discuss the application. With the applicant's permission, staff also contacted the commercial lender and LCOG, both who are proposing business loans for the project. Analysis The Wynant family provided additional project cost and funding information. A preliminary review and analysis of the information by staff looks positive. The total project cost is estimated at $683,000. They purchased the site and have invested over $62,000 of their own funds in the project to date. The CDBG request of $90,000 is 13% of the total project cost. The recipients purchased the site in December 2006 for $340,000. The County RLlD records currently lists the real market value at $371,307. A conservative estimate of owner's equity in the site is just under $80,000. Listed below are project sources and uses: Project Funding Sources Project Funding Uses Property Acquisition Loan 299,250 Building Acquisition 340,000 Construction loan SVB 106,679 Construction of building shell 197,000 SBA-504 Loan 124,475 Construction of interior 40,000 Owner Cash Investment 62,596 Parking 10Udriveway/landscape 16,000 CDBG Fundino 90,000 Permits/engineer/SDC 20,000 Refrigeration/freezer units 70,000 TOTAL $683,000 TOTAL $683,000 The Wynants have been in business since 1981. The current owner and daughter of the Wynants has owned the business since 1994. Staff requested and received the 2006 year-end income statement and balance sheet for the business. Staff's analysis of these documents indicates a viable business operating with positive cash flow. The owners say that the purchase and relocation of the business downtown will increase their sales and their client base without significantly increasing the business overhead. This is supported by the lenders' willingness to loan funds to purchase and develop the site on South A Street. The owners have applied for a Small Business Administration Loan through LCOG. If approved, the SBA loan will replace the purchase loan for the downtown property and provide the final gap financing for the project. Steve Dignam of LCOG submitted the following information: I am working with the owners of Wynant's to help them take advantage of a loan through the US Small Business Administration. These SBA loans are designed to help stimulate economic development and job creation. This project would appear to generate a sufficient number of jobs to meet initial qualifications. In addition, the SBA makes every effort to assist women- owned businesses such as this one. We do not yet hcWe a loan approval as we are still waiting Attachment 2, page 1 for several critical details regarding project costs and sources of equity funding. It is my understanding that Wynant's has applied to the City of Springfield for grant financing for a portion of this project. We consider the Wynant's project to be an important economic and community development project and feel that it has an excellent chance for loan approval. A grant from the City of Springfield would be leveraged at least 500% by federal SBA dollars plus financing from a private sector bank. Please let me know if I can be of any further assistance. Stephen J. Dignam Lane Council Of Governments The Wynants indicate that the project will be completed with or without the COBG funding. However, if the project receives the COBG funding they will be able to create more jobs thus, will be able to stay open until 8:00 or 9:00 PM as planned, complete the project by September of 2007, and make beautification improvements to the landscape and exterior. The Wynants have indicated that without the COBG funds project completion will be delayed several months, and it is unlikely that the above mentioned project plans will take place. This project qualifies under the COBG National Objective of Low and Moderate Income Benefit - job creation. The regulations require that businesses create one full time equivalent job for every $35,000 in COBG funding received, the regulations further state that the jobs created must be jobs that could be held by low and moderate income individuals and that 51 % of the jobs will be held by or made available to low and moderate income individuals. In addition, this project provides business expansion in the downtown core, revitalization of a vacant building, up to 500 new customers visiting the downtown each day, and provides opportunities for those that live and work downtown to shop there. The COBG contract between the City and the recipient contains a variety of safeguards to protect the City's investment. Recipient performance is defined in the contract and more specifically in the statement of work. The City can set the duration of public benefit (compliance period), enforce conformity with all state and local codes, and require standards of maintenance of the premises and design. If the recipient fails to comply with or terminates the contract the City may recapture all or a portion of the funds allocated. In addition, the City can attach Restrictive Covenants limiting the future use of the property (for example. - future use of the property is designated commercial excluding businesses that cater to adult entertainment). The COBG funds are generally grants. Performance is ensured through very specific language in the agreement. In the case of the Wynant's project the contract would contain the following restrictions (Wynant's would be the AGENCY): For properties with more than $25.000 CDBG assistance for acquisition or improvements: If the property in which the CDBG funds are invested is sold, transferred, or otherwise disposed of for any reason by AGENCY within ten (10) years from the date of PROJECT completion, AGENCY shall reimburse CITY the amount of the current fair market value of the property, less any portion of the value attributable to expenditures of non-CDBG funds for acquisition of, and improvements to, the property. This provision may be waived at the sole discretion of CITY if the proposed change of ownership continues to provide the Public Benefit described in Paragraph 2, and meets a CDBG National Objective, and if the proposed change of ownership is approved by the Springfield Community Development Advisory Committee and Springfield City Council. (24 CFR ~570.505(b)) The City may also condition its acceptance and execution of the COBG agreement on one or more pre- contract requirements. For instance, the City may require verified funding commitments from all sources, or a satisfactory staff review of the applicant's business plan before loan documents are executed. The City has used this strategy in the past as another way to safeguard its COBG and HOME funds, and it is a common lending industry practice. Long-term community benefit of the COBG funds is the primary criteria used by HUO when evaluating project funding by each participating jurisdiction. This project qualifies for two of the three COBG National Objectives (Low-Mod Benefit and Elimination of Slum and Blight). At the end of the compliance period the Community benefit will have been demonstrated. In addition, the recipient is taking a risk that the vision of growth and vitality that Attachment 2, page 2 Springfield has for downtown revitalization will continue. Staff favors greater consideration being given to those partners willing to take an early risk on the downtown versus those that come after. Option 1 If the Council wishes to move forward with support for the Wynant's project immediately, it could do so by granting conditional approval of the specific project subject to the City Manager's review of the business plan and related financial documents. Such review is not yet completed. Option 2 If the Council wishes to defer action on the Wynant's project, it could do so by designating the funds for downtown job creation activity, to be considered at a public process along with other applications that may be submitted in response to a future Request for Proposals. Types of Fund Award and Repayment At the point the Council wishes to move forward with the award of funds, these funds could be awarded as grants or loans. Either could be structured in a number of ways including a no interest or low interest loan, or partial loan/grant combinations. Repayment of the loan can also be structured in different ways. The loan terms and repayment requirements of the CDBG funds should reflect the potential short and long-term community benefit of the project. With this in mind, staff has prepared five options for Council consideration: A. Outright Grant to the project. B. A deferred payment loan due and payable at the time of sale, change of use, transfer of title. A successful model used with the City's Substantial Home Rehabilitation Loan. The Loan can be secured with a mortgage and note, does not inhibit the ability of the project recipient to obtain other financing, is easily enforceable and allows for recapture of the full amount of funding. C. A deferred payment loan forgiven after the established period of compliance. This is another successful model used for many of the City's affordable housing loans. This option is similar to option one but relieves the recipient of the CDBG obligation when the established period of public benefit has been satisfied. D. A deferred payment loan forgiven incrementally for each year of compliance up to an established percentage with a balloon payment or incremental payments for the remaining balance thereafter. This option, along with options one and two, recognizes that although businesses benefit from the CDBG funds they also contribute to the community and provide public benefit, in some cases at a cost to the business in complying with federal regulations not otherwise required to operate their business. E. Combination of loan grant and interest rates as deemed reasonable by the Council. As mentioned earlier, the use of CDBG funds comes with federally mandated requirements and restrictions. The City may impose additional terms, covenants, restrictions and performance requirements to further protect its resources. All of these terms, restrictions and requirements usually impose additional costs to the project, either during development or during the compliance period, and may result in diminishing the true value of the CDBG funds. Recommendation Staff recommends conditional approval of the Wynant's project as described in Option 1, and "Cn above, which would include a lien on the property and a restrictive covenant prohibiting the use of the property for adult entertainment on site as described above. [Staff recognizes that a policy framework is needed to help guide these decisions in the future, and will be bringing this item to Council for discussion at a future work session.] Attachment 2, page 3 MEMORANDUM Date: May 1, 2007 CITY OF SPRINGFIELD To: Gino Grimaldi, City Manager From: Bill Grile, Development Services Directo~ Jodi Peterson, management Analyst II U \j Draft Criteria for Funding CDBG Projects in the Downtown Revitalization Area and/or Funding For-Profit Applicants Subject: ISSUE: At the April 16th City Council Meeting the Council held a Public Hearing and considered the recommendations for funding Community Development Block Grant (CDBG) and HOME Investment Partnership programs brought forth by the Community Development Advisory Committee. The meeting included discussion about setting criteria for allocating funds to downtown redevelopment projects and for-profit applicants requesting funding. Staff was directed to begin working on possible criteria for Council review. . BACKGROUND: At the April 9th Council Work Session staff presented information and ideas about downtown revitalization. The Council instructed staff to proceed with the process for an Urban Renewal District and the development of other plans for downtown. Since that meeting, staff received a CDBG application for funding a for-profit business downtown. The Council had concerns about not having criteria for funding projects. DISCUSSION: In considering the Council's desire for a set of criteria to use in evaluating certain funding requests for CDBG grants, staff crafted the following draft criteria for review and discussion at some future time: Formula for FundinQ. Developers willing to make an early commitment to downtown redevelopment essentially accept a greater risk than those coming later with development proposals, but the earlier ones set the stage for future development that will follow. Recognizing this, it seems reasonable to embrace a sliding-scale formula approach that rewards earlier development proposals with greater public subsidy than those that begin later. The following is just an example: Up to 25% of total Project Cost in years 1-3 of the Downtown Redevelopment, 20% in years 4-5, 15% in years 6-7 and so on. Proiect Viability. Viability at its core means "capacity to survive." The central question is this: "Can this project survive and thrive?" This may be determined by evaluating such things as (1) the number of years the business has operated, (2) how many years the business has operated, (3) its history of success, (4) financial soundness, etc. Public Benefit. Indicators of public benefit would includes such things as: (1) infrastructure improvements, (2) increased visits and/or activity downtown, (3) the extent to which the business would compliment the downtown plan, (4) whether the business would enhance community pride and improve quality of life, (5) the extent to which there is demonstrated participation from cooperating community partners, (6) support the City Council's goals, etc. Shovel Readv. Can the project begin within the funding year? Indicators might be: (1) site control, (2) whether project development plans are complete, (3) whether other funding is committed for the project, (4) whether a project timeline is established and realistic, etc. Does the Proiect meet more than one CDBG National Obiective? The three CDBG National Objectives are Low and Moderate Income Benefit, Elimination of Slum and Blight (non-LMI Benefit) and Urgent Need. If the proposed project meets more than one national objective it may provide flexibility in allocating the limited downtown set aside funds. Staff will continue to work on possible criteria and will return to the Council in a Work Session in a few months to seek further feedback about this matter. Attachment 3