AGENDA #2c
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Public Hearing on Proposed Amendment of the Community Development Program
DATE: November 8, 2004
The purpose of this public hearing is to receive citizen comments on how to allocate approximately $103,000 of Community Development program income and residual funds.
We are scheduled to return to the Council with a final recommendation on December 6, 2004.
On October 11, 2004, the Council adopted a process to amend the Community Development program to allocate Community Development program income and residual funds, and scheduled tonight’s public hearing. Notice of the hearing was sent to our Community Development mailing list and was published twice in the Chapel Hill Herald. The process also includes review of the proposal by the Housing and Community Development Advisory Board on November 23, 2004.
DISCUSSION
The purpose of tonight’s public hearing is to receive citizen comments on how the funds listed above could be spent. A summary of the National Community Development Legislation and a list of eligible Community Development activities are attached (please see Attachment 1). We have also attached a summary of the 2004–2005 Community Development activities adopted by the Council on April 26, 2004 (please see Attachment 2).
Any proposals approved by the Council would be implemented subject to meeting all U.S. Department of Housing and Development regulations. The Town would enter into Performance Agreements with the agencies, and monitor performance according to provisions of the Agreements.
Sources of funds totaling approximately $103,000 for this amendment are:
A. Program Income
The Town has received approximately $94,000 of program income from repayment of Community Development loans previously issued by the Town for a variety of programs including second mortgages to Tandler homeowners, rehabilitation assistance loans to homeowners, and mortgages. These funds are not currently allocated for specific activities. The Town’s Citizen Participation Plan adopted by the Council requires a public hearing to budget these funds.
B. Reallocated Funds
We propose to reallocate approximately $9,700 of residual Community Development funds from the following activities:
Affordable Rentals
The Council allocated $80,000 of 2003-2004 Community Development funds to Affordable Rentals to purchase a unit for permanently affordable rental housing. In January 2004, Affordable Rentals purchased an apartment unit in Ashley Forest (off of Airport Road) for $73,225. The activity is complete; therefore we propose to reallocate the balance of funds ($6,775).
Youth Creating Change
In June 2002, the Council amended the 2001-2002 Community Development program to allocate $2,110 of Community Development Program income to Youth Creating Change to operate a youth training program. Youth Creating Change was not able to meet the regulatory requirements for federal funding. The Town did not receive information from Youth Creating Change to enter into a Performance Agreement for these funds. We recommend reprogramming these funds.
Chapel Hill – Carrboro YMCA
The Council awarded $13,000 of 2003-2004 Community Development funds to the YMCA to continue to operate an after school program for youths living in the South Estes Drive public housing community and the Pine Knolls neighborhood. The program is complete and there is an unused balance of $817. We propose to reprogram these funds.
PRELIMINARY PROPOSAL
For the past several years, the Council has allocated funds to Neighborhood Revitalization activities in the Northside neighborhood. Eligible activities include: second mortgage assistance; property acquisition and/or renovation; code enforcement; demolition; public improvements (i.e. construction of sidewalks, curb and gutter improvements or parks and recreation facilities); or community service activities. At this time, approximately $26,000 is available for funding. Our preliminary recommendation is that the Council budget the funds available to the Neighborhood Revitalization activity to continue revitalization activities mentioned above in the Northside neighborhood. If the Council chooses to budget funds to the Neighborhood Revitalization activity, $129,000 would be available for activities.
NEXT STEPS
After tonight’s hearing, we will consider citizen comments and develop a recommended plan for the Council’s consideration. We recommend that the Council refer the preliminary recommendation and any comments received tonight to the Housing and Community Development Advisory Board for a recommendation at its November 23, 2004 meeting. We will return to the Council on December 6, 2004 for consideration of an amendment. If the Council approves an amendment, we would submit a revised 2004-2005 Annual Update to the Consolidated Plan to the U. S. Department of Housing and Urban Development.
PRELIMINARY RECOMMENDATION
Our preliminary recommendation is to budget $103,000 for additional Neighborhood Revitalization activities in the Northside neighborhood.
ATTACHMENTS
1. National Objectives of the Community Development Program (p. 4).
2. Summary of 2004-2005 Community Development Plan Adopted by Council on April 26, 2004 (p. 5).
National Objectives of Community Development Legislation
Congress established the Community Development program in 1974 by consolidating a number of grant programs into one “block grant”. The primary objective is:
“Development of viable urban communities, including decent housing and a suitable living environment and expanding economic opportunity, principally for persons of low and moderate-income.” (Housing and Community Development Act of 1974)
To receive future Community Development Block Grant funds, Chapel Hill must certify that its overall program carries out this primary objective. In addition, each Community Development Block Grant activity must:
1. Benefit low- and moderate-income persons; or
2. Aid in the prevention or elimination of slums and blight; or
3. Treat urgent needs posing an immediate threat to public health and welfare.
Eligible activities for Community Development Block Grant funding
(from Federal Regulations)
Community Development Block Grant funds may be used for the following types of activities (provided national objectives are also met):
· acquisition of property
· disposition of property
· public facilities and improvements
· clearance, demolition and removal of buildings
· some public services (subject to some limits in regulations)
· relocation
· housing rehabilitation, preservation and code enforcement
· economic development activities
· new housing construction (subject to some limits in regulations)
· planning and administrative costs
Alternatives that are generally not eligible include:
· buildings used for the general conduct of government
· general government expense
· political activities
· purchase of equipment and personal property
· operating and maintenance expenses
Summary of 2004-2005 Community Development Block Grant Program
On April 26, 2004 the Council adopted the following activities for use of $711,000 of 2004-2005 Community Development funds.
Public Housing Activities: $206,000
1. Renovation of Airport Gardens: $150,000
The Council budgeted $150,000 to help fund renovation of the Airport Gardens public housing community. Funds will be used along with Public Housing Capital Grant funds and previously allocated Community Development funds to renovate the twenty-six unit community. Of this amount $15,000 will be used to pay a portion of the Assistant Housing Director’s salary for oversight of the renovation project.
Proposed renovation work will include the abatement of lead-based paint and asbestos, replacement of water and sewer lines to OWASA standards, installation of new washer and dryer hook-ups, replacement of wall and base cabinets and countertops to include new range hoods and sinks, replacement of windows and screens, replacement of interior and exterior doors, replacement of furnaces including air conditioning and water heaters, replacement of floor tiles, replacement of bathtub liners and surrounds, bathroom fixtures, plumbing and electrical upgrades, and interior and exterior painting. Funds will also be used for site improvements including replacement of asphalt driveways and parking lots; planting new shrubs, and replacement of storm drainage systems and retaining walls. Due to the extent of building improvements, the relocation of residents will be required and the work will have to be scheduled in phases.
2. Refurbishing Program: $50,000
The Council appropriated $50,000 of Community Development funds to continue the public housing refurbishing program. This program includes repainting and minor repairs of public housing units.
3. Installation and Repair of Playground Equipment: $6,000
The Council also budget $6,000 to repair and replace playground equipment at various public housing sites.
Neighborhood Revitalization: $121,700
The Council budgeted $121,700 of Community Development funds to continue neighborhood revitalization activities in the Northside, Pine Knolls, and public housing neighborhoods. Neighborhood Revitalization activities serve households earning less than 80% of the HUD published area median income. Funds may be used for the following activities: second mortgage assistance; property acquisition and/or renovation; code enforcement; demolition; public improvements such as installation of sidewalks, curb and gutter improvements or parks and recreation facilities; or community service activities. Funds will be used primarily for public improvements in the Northside neighborhood.
The Council authorized the Manager to approve specific projects for use of these funds in accordance with the guidelines mentioned above. The Council also authorized the Manager to approve converting Neighborhood Revitalization funds into grants to Orange Community Housing and Land Trust as opportunities appear to achieve long term affordability of housing projects to be placed in the Land Trust.
Comprehensive Rehabilitation Program: $100,000
The Council allocated $100,000 for a comprehensive rehabilitation program to renovate owner-occupied housing in the Northside neighborhood. Funds would be used to provide deferred loans to owners earning less than 80% of the area median income. We contract with Orange County to oversee the rehabilitation work, and Town staff is responsible for the administrative portion of the program (i.e. qualifying households).
Orange Community Housing and Land Trust: $100,000
The Council allocated $100,000 to Orange Community Housing and Land Trust to reduce the prices of ten townhomes in the Vineyard Square Development. Funds will be provided as a grant to the Land Trust. Funds would be used to reduce the sales price of three-bedroom townhomes from $115,000 to $105,000. Townhomes will be sold to first time homebuyers, earning less than 80% of the area median income. In addition, once subsidized, the homes could not be sold to households earning more than 80% of the median income.
Community Services: $81,700
The Council allocated funds for four community service activities that meet the Community Development regulations:
1. $40,000 to the Chapel Hill Police Department to fund the following youth programs:
· $31,900 to continue the Youth Work Program for youths ages 14-17 living in the Pine Knolls, Northside and public housing communities. During the summer, approximately thirty youths will work twenty hours per week in various Town Departments and local non-profit organizations. During the school year, ten of these children would continue to work approximately ten hours per week. Youths will also be required to participate in workshops focusing on financial education, career development, and improving interview skills.
· $2,600 for educational programs for youths living in the Northside, Pine Knolls, or public housing communities including an academic awards program a mentoring and leadership program for young men, a support program for parents of young children to help them to begin teaching their children to read, and trips to college campuses. Programs will be coordinated with the Town’s Police, Housing and Parks and Recreation Departments, and would provide structured activities and emphasize components that will improve academic skills, prevent drug abuse and drug-related crime, leadership development, and career planning.
· $5,500 for the Career Explorers Program. This program is designed for high school aged youth who reside in Northside, Pine Knolls, or public housing neighborhoods. Six youths will be placed in work sites in the business community. Youths will work thirty-six hours per week and spend an additional four hours sharing work experiences, learning financial skills, and participating in career exploration experiences. Funds will be used to supplement funds paid by the local businesses.
2. $15,000 to the Orange County Family Resource Centers to continue to operate an after school enrichment program at the South Estes Family Resource Center located in the South Estes Drive public housing community.
3. $13,700 to North Carolina Cooperative Extension to operate a ten week program for thirty overweight youths and their families focusing on nutrition, physical activity, and psycho-social skills to promote a healthier lifestyle. The program will be held at the Chapel Hill – Carrboro YMCA. Recruitment for the program will target residents of public housing, as well as other lower income areas of Chapel Hill and Carrboro. Funds will be used to provide scholarships to Chapel Hill residents.
4. $13,000 to the Chapel Hill–Carrboro YMCA to continue operation of after school programs for children living in the Pine Knolls neighborhood and the South Estes Drive public housing community. Funds will be used to provide scholarships to eligible children.
Program Administration: $101,600
The Council allocated $101,600 for administration of the Community Development program and related housing programs. Currently, the Community Development staff administers Community Development Program, the Revolving Acquisition Fund, and the Housing Loan Trust Fund, works with other Town departments and non-profit organizations that receive Community Development funding from the Town to implement activities, coordinates activities with the HOME Program Consortium, monitors compliance with Performance Agreements and federal regulations, administers housing loans and grants provided by the Town over time, and coordinates with the U.S. Department of Housing and Urban Development to achieve compliance with federal regulations.
We will continue to use funds for the Community Development Coordinator’s salary and benefits, a portion of the Long Range Planning Coordinator’s salary, a part-time Community Development Program Monitor, and a part-time financial position. These costs total approximately $95,100. The balance of funds, approximately $6,500, will be used for overhead costs.