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Home My WebLink About2004-03-02; City Council; 17523; Allocation of Home Investment Partnership FundsCITY OF CARLSBAD - AGENDA BILL I AB# 17,523 TITLE: MTG. 2/24/04 I ALLOCATION OF HOME INVESTMENT PARTNERSHIP FUNDS DEPT. H/RED DEPT.HD. @* CITY ATTY. @ CITY MGR. a RECOMMENDED ACTION: Adopt Resolution No. 2004-064 approving a commitment of HOME Investment Partnership (HOME) Program funds to specific housing projects as directed by the City Council and authorizing the City Manager, with City Attorney concurrence, to execute all contracts for implementation of projects related to allocation of the HOME funds. ITEM EXPLANATION: BACKGROUND In 1990, the National Affordable Housing Act (NAHA) was enacted into Public Law 101 -625, which created the HOME Program to provide federal grants for expanding affordable housing opportunities for lower income households. The County of San Diego and a group of eligible cities within the County have formed the San Diego County HOME Consortium, which allows Consortium members to receive HOME funds each year from the U.S. Department of Housing and Urban Development (HUD). HOME Program regulations require that funds be committed to specific projects within twenty-four months of execution of each annual funding agreement. HUD may withhold future HOME funding if the Consortium does not commit adequate funds pursuant to the regulations. The County of San Diego recently notified the City of Carlsbad that it has $387,000 in uncommitted HOME funds that must be committed to a specific affordable housing project or program. The City Council previously approved the allocation of these funds to the Housing Reserve Fund with the intent of identifying a specific project at a future date. County staff has requested that member cities of the Consortium commit available funds to specific projects by the end of February 2004 to prevent a potential loss of future HOME funds for the entire Consortium. In response to this request from the County, City staff has presented a recommendation within this report for the Council to consider for commitment of the subject HOME funds. In addition to the HOME funds noted above, the City has a new allocation of HOME funds for 2004-2005 in the amount of $306,000 which needs to be committed to a specific project. The application process for this funding was initiated in November, 2003. Unfortunately, no applications were received for this funding from private, non-profit organizations. Therefore, the City will need to identify a specific project in order to properly utilize this funding as well. The recommendations below set forth a plan for commitment of this funding to a specific project. Staff Recommendations 1. Solutions Family Center North County Solutions for Change is a nonprofit organization that operates a 50 bed transitional housing center called the Solutions Family Center. The Center serves homeless families with children from the North County area and is currently located in a leased facility on East Vista Way in the City of Vista. Comprehensive support services are also provided including food, clothing, and case management. Families are assisted with employment development, health, and education needs. Families in the program pay 30% of their income for rent, save a minimum of 30% of their income for future housing costs, and an emphasis is placed on obtaining full-time employment. The interim facility has provided shelter to 23 Carlsbad families with 56 children during the last three years. This represents approximately 15% of the total number of people assisted by the Center. I Page 2 of Agenda Bill # 17.523 The organization is currently constructing a permanent, 122 bed, 32 unit Solutions Family Center on West California Street in Vista. Private donors, the State of California, County of San Diego, and all North County cities are providing funding assistance for the new Center. The City of Carlsbad has previously provided $150,000 in HOME funds to construct the permanent Center, and $5,000 in Community Development Block Grant (CDBG) funds to assist in operating the interim 50 bed facility. Although North County Solutions for Change has been very aggressive in its efforts to raise all of the funding required for this facility, staff recently became aware of the fact that this project still requires approximately $476,800 in funding to complete construction of the facility. A portion or all of the subject HOME funds may be committed to assist this project to complete construction of needed facilities and ensure the future success of this project. Staff is recommending that $387,000 in HOME funds be committed at this time to assist with the ongoing construction of this facility. With this commitment of HOME funds, the City will contribute a total of $537,000 in construction funds to this transitional housing facility for homeless families. The project will meet a critical need for homeless families and the funds can be expended in an expedited manner which is desirable to the Consortium. 2. Roosevelt Street Affordable Rental Units On March 11, 2003, the Carlsbad Redevelopment Agency purchased a vacant .58 acre parcel at 2578 Roosevelt Street for $692,058 with a combination of HOME, CDBG, and Redevelopment Agency Low/Mod Housing funds. The property was acquired in an effort to eliminate blight and to provide for the future development of 11 lower income affordable rental units. Staff distributed a Request for Qualifications to firms with experience in developing affordable housing projects, and ultimately selected Wakeland Housing and Development Corporation as most qualified to develop the subject project. Staff is currently working with Wakeland Housing to process the appropriate permits for development purposes. The subject project has been initiated by the Redevelopment Agency to help satisfy inclusionary requirements for the area, as required by California Redevelopment Law. Due to the small size of the project, it will be difficult to attract other funding sources to the project. Therefore, it is very likely that the Agency will need to serve as the sole financing agency for this project. In light of this fact, there have already been several actions taken by the Council to commit funding for this project. In addition to the funding for the property acquisition noted above, the Council previously committed $244,161 in CDBG funds to this project for predevelopment activities such as design, engineering, and permit processing fees, and $716,600 in HOME funds to help finance the project costs related to actual construction. To date, a total of $1,652,819, or $150,256 per unit, has been committed to the project for property acquisition, predevelopment, and construction purposes. Although the final projections are not yet complete and the final deal has not been structured with Wakeland Housing, it is anticipated that additional funding will be required to complete this project. Because we have no other projects to commit the subject HOME funding to and staff anticipates that additional funding will be needed for the Roosevelt Street Apartment project, staff is recommending that the 2004-2005 HOME funds in the amount of $306,000 be committed to the subject rental project at this time. If a determination is made at a later date that the funding is not required to complete the project or not appropriate for some other reason, the Council could take the appropriate action at that time to reallocate the funding to an alternate eligible project. This action, however, would allow for commitment of the funds to a specific project at this time which is required by the HOME regulations. FISCAL IMPACT: There is no fiscal impact to the City’s General Funds as a result of allocating HOME funds to the two projects noted above. There is a potential loss of the HOME funds, however, if the San Diego HOME Consortium is unable to commit adequate funds in a timely manner pursuant to federal regulations. Therefore, to prevent the loss of this funding, staff is recommending the commitment of these HOME funds to the specific projects noted above. 2 Page 3 of Agenda Bill # 17,573 EXHl BITS: 1. Resolution No. 2004-064 approving a commitment of HOME Investment Partnership (HOME) Program funds as directed by the City Council and authorizing the City Manager, with City Attorney concurrence, to execute all contracts for implementation of projects related to allocation of the HOME funds. DEPARTMENT CONTACT: Frank Boensch, (760) 434-281 8, fboen @ci.carlsbad.ca.us 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CITY COUNCIL RESOLUTION NO. 2004-064 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING ALLOCATION OF HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS. WHEREAS, there has been enacted into law Public Law 101-625, the National Affordable Housing Act of 1990 (NAHA), the primary objective of which is to increase the supply of decent affordable housing to low and very low income Americans; and WHEREAS, a Consortium of local governments in San Diego County have formed to obtain HOME Investment Partnership Program (HOME) funds pursuant to NAHA; and WHEREAS, it is the desire of the City of Carlsbad to allocate HOME funds for specific programs to benefit lower income households in the area; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. The above recitations are true and correct. 2. The City Council hereby approves an allocation of $387,000 in HOME funds to development of the North County Solutions for Change Family Center and $306,000 in HOME funds to development of affordable housing at 2578 Roosevelt Street as recommended by staff at a regularly scheduled meeting on March 2, 2004. Ill Ill Ill Ill Ill Ill Ill Ill 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 '11 3. The City Manager, with City Attorney concurrence, is authorized to execute all documents for implementation of projects related to this allocation of HOME hnds. PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad, Zalifornia, on the 2nd day of March , 2004, by the following vote, to wit: AYES:Council Members Lewis, Finnila, Kulchin, Hall and Packard NOES: None ABSTAIN: None ABSENT: None ATTEST: LORRkINE M. WOOD, City Clerk Resolution No. 2004-064 page 2 2