AGENDA #2
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Public Hearing to Amend the 1999 – 2000 Community Development Program
DATE: January 10, 2000
The purpose of this public hearing is to receive citizen comments on how to reallocate an estimated $113,000 of Community Development Program funds.
We are scheduled to return to the Council with a final recommendation on February 14, 2000.
On November 22, 1999, the Council adopted a process to amend the 1999-2000 Community Development program to reallocate Community Development funds and called tonight’s public hearing. Notice of the hearing was sent to our Community Development mailing list and was published in the Chapel Hill Herald on December 26, 1999 and January 9, 2000.
Sources of funds totaling $113,000 for this amendment are:
EmPOWERment Inc.
On April 26, 1999, the Council approved a budget for the 1999 – 2000 Community Development program that included $75,000 for EmPOWERment Inc. to purchase an apartment building on Sykes Street in the Northside neighborhood. EmPOWERment has informed us that negotiations with the property owner have not been successful and that they will not need the funds for this purpose.
GOOD WORK
In 1997 – 98, the Council budgeted $38,000 of Community Development funds to GOOD WORK to create a small business development program in Chapel Hill. GOOD WORK did not maintain sufficient records to document the low- and moderate-income status of program participants, and did not establish eligibility to draw down the allocated funds. Therefore, we recommend that the Council reallocate these funds for other Community Development activities. (Note: We will soon enter into a contract with GOOD WORK for $10,000 for the 1999-2000 fiscal year.)
POTENTIAL ACTIVITIES
A summary of the National Community Development Legislation and a list of eligible Community Development activities are attached (please see Attachment 1). In addition, we have attached a summary of the 1999 – 2000 Community Development activities adopted by the Council on April 26, 1999 (please see Attachment 2).
Summary of Requests Received
To date, we have received the following requests for funds:
Organization Amount
1. EmPOWERment Inc. (Midway Incubator) $66,000
2. Pending Neighborhood Revitalization Requests:
-Chapel Hill Police Dept. $80,000
-Abundant Life Center 125,000
-EmPOWERment Inc. (Homes) 110,000
315,000
3. Community Cuisine 21,000
TOTAL $402,000
Sources of Funds
The following sources of funds are available for use in Community Development projects:
1. Proposed Reallocation Community Development Funds: $113,000
2. Existing Neighborhood Revitalization Budget in
1999-2000 Fiscal Year Community Development Funds:
Original Budget: $50,000
10/11/99Amendment: $82,500
$132,500
TOTAL $245,500
The history of these requests is reviewed in more detail below. The Council could consider these potential projects, as well as any other potential eligible project, for the use of the $113,000.
When the Council budgeted additional Neighborhood Revitalization funds on October 11, 1999, we indicated we would provide a future report on the potential use of these funds for the pending Neighborhood Revitalization requests (Police Dept., Abundant Life Center, or EmPOWERment proposal for acquisition/renovation of homes).
REQUESTS TO DATE
1. Request from EmPOWERment Inc.
On October 26, 1999, the Council received a request from EmPOWERment Inc. for $66,120 to assist with the construction of the proposed Midway Business Center. The Town has previously loaned $150,000 to EmPOWERment Inc. to acquire the property and demolish buildings located on the site. On November 23, 1999 the Council adopted a resolution pledging to find funds to enable the project to move forward with construction (please see Attachment 3).
2. Neighborhood Revitalization Activities Pending.
The Council could choose to budget additional funds for Neighborhood Revitalization activities previously discussed by the Council. On August 23, 1999, the Council held a public hearing to receive citizen comments on how to budget $181,500 of Community Development Program Income. At this hearing, several requests were made for activities that would be eligible under the Community Development Neighborhood Revitalization program. On October 11, 1999, the Council decided to budget $82,500 for the general category of Neighborhood Revitalization activity. At that time, we reported to the Council that we would return to the Council with a specific recommendation for use of these funds for:
a. Request from the Chapel Hill Police Department
On August 23, 1999, the Chapel Hill Police Department requested that the Council consider purchasing a vacant lot and a vacant house in the Northside neighborhood. If the Town purchased the vacant house, renovation work would be required. The current tax values of the properties are $8,073 for the vacant lot and $34,582 for the vacant house. We will contact the owners to determine if they are interested in selling the properties. If they are interested, we will initiate the federal acquisition process and order appraisals of the properties to establish just compensation for the properties. We would also have a cost estimate of renovation work prepared. We will report this information to the Council on February 14, 2000. Currently, we estimate this project could cost in the range of $60,000 - $80,000 for acquisition and renovation.
b. Request from the Abundant Life Center
On August 31, the staff met with Ms. Esther Tate, Director of the Abundant Life Center on West Rosemary Street. The Center provides eighteen single-rooms of transitional housing units for “low-income, high-risk” individuals. The Center also provides centrally located kitchen facilities, a tenant and visitor lobby, and an office for the administrator. Ms. Tate requested $125,000 to renovate the facility located at 603 West Rosemary Street (Please see Attachment 4).
We have identified two potential sources of funds:
1) The U.S. Department of Housing and Urban Development Supportive Housing Program
The Town could apply for funds on behalf of the Abundant Life Center through the U.S. Department of Housing and Urban Development’s Supportive Housing Program. The Department of Housing and Urban Development anticipates issuing a request for proposals in February, and announcing awards around the end of the calendar year. Eligible activities under this program include acquisition and / or renovation of property and new construction. Approximately $100,000 of funds could be available for projects in Orange County that serve special needs populations, including the homeless. We note that if the Council chooses to submit an application for this program, other supportive housing providers in the County could be competing for use of these funds (i.e. Inter-Faith Council, OPC Mental Health have received funds in previous years). We also note that these funds require a dollar for dollar local match. Community Development funds or local funds could be used to satisfy this requirement.
2) The North Carolina Housing Finance Agency Emergency Shelter Rehabilitation Program
The Town could also apply to the North Carolina Housing Finance Agency on behalf of the Center for its Emergency Shelter Rehabilitation Program. The program provides a 0% interest loan up to $100,000 for a maximum of 30 years for the renovation of transitional housing facilities. The program will fund up to 65% of the total rehabilitation costs; 35% must be obtained from another source (Community Development funds, local funds, or funds obtained by the Center could be used for the match requirement. There is an open cycle to apply for these funds.
c. Request from EmPOWERment Inc. for Acquisition/Renovation of Homes
Terry Carver, of EmPOWERment Inc., requested that the Council consider budgeting $110,000 of the funds to the Neighborhood Revitalization activity for property acquisition and renovation expenses (please see Attachment 2). EmPOWERment has identified five properties in the Pine Knolls and Northside neighborhoods that they intend to purchase, renovate and sell to lower and moderate income households. EmPOWERment is to provide a more specific plan for their proposed activities.
3. Community Cuisine Proposal
The Council also received a request on August 23 for the use of funds from Michael Ullman of Community Cuisine asking that the Council fully fund their original request and budget an additional $21,000 for their culinary skills program (please see Attachment 3). On October 11, we recommended that we evaluate the progress of the program in six months; and if progress is satisfactory, consider the use of residual Community Development funds for the program.
The Council could also consider any other eligible use for budgeting these Community Development funds.
NEXT STEPS
After tonight’s hearing, we will consider citizen comments we may receive and develop a recommended plan for the Council’s consideration. We will return to the Council on February 14, 2000 for consideration of the amendment. The Housing and Community Development Advisory Board is scheduled to review the proposal on January 25, 2000. If the Council approves an amendment, we would submit a revised 1999 – 2000 Annual Update to the Consolidated Plan to the U. S. Department of Housing and Urban Development.
ATTACHMENTS
1. National Objectives of the Community Development Program (p. 6)
2. 1999 – 2000 Community Development Plan Adopted by Council on April 26, 1999 (p. 7)
3. November 23, 1999 Council Memorandum and EmPOWERment, Inc. Request of October 26, 1999 (p. 9)
4. Request from the Abundant Life Center (p. 14)
5. Request from EmPOWERment Inc. (p. 22)
6. Request from Community Cuisine (p. 23)
ATTACHMENT 1
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 which 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
1999 – 2000 Community Development Block Grant Program
Adopted April 26, 1999
Amended October 11, 1999
Rehabilitation of Public Housing: $230,000
The Council budgeted $150,000 of Community Development funds for the rehabilitation of the Craig / Gomains public housing community. This amount includes $135,000 for renovation expenses and $15,000 for a portion of the Assistant Director of Housing’s salary. Renovation of thirty of the forty units will be completed this summer. Together with Comprehensive Grant funds, the 1999 – 2000 Community Development funds would be used to renovate the remaining ten units. Renovation work will include the abatement of lead-based paint and asbestos, replacement of windows and screens, replacement of interior and exterior doors, replacement of furnaces, replacement of floor tiles, replacement of bathtub liners and surrounds, bathroom fixtures, plumbing and electrical upgrades, and interior and exterior painting.
On March 22, 1999, the Council authorized encumbering $135,000 of these funds prior to July 1,1999. This authorization allowed the contractor currently renovating the first thirty units to purchase supplies for the remaining ten units. The funds will not be spent until after the fiscal year begins in July. Federal Community Development regulations allow us to encumber the funds before the fiscal year begins. As required, we notified the Department of Housing and Urban Development of our intent to encumber the funds.
An additional $80,000 of Community Development funds were budgeted to continue the public housing refurbishing program.
The Council allocated $75,000 of Community Development funds to EmPOWERment Inc. to pay a portion of the cost of acquiring an apartment building in the Northside neighborhood. EmPOWERment Inc. intends to renovate the building and rent the apartments at or below Section 8 market rents to lower income households and individuals. We will seek Council authorization of a specific proposal and funding plan for the project.
The Council budgeted $70,000 to the Orange Community Housing Corporation to fund a portion of site development costs for the Scarlett Drive Homeownership program. The organization will develop fourteen townhomes for first time homebuyers earning less than 80% of the area median income by household size. The property will be developed as a land trust. Orange Community Housing Corporation will apply for funding for this project from a variety of sources including the HOME Program, Orange County Affordable Housing Bond funds, and funds from the Federal Home Loan Bank.
Neighborhood Revitalization: $132,500
The Council originally budgeted $50,000 of Community Development funds to continue neighborhood revitalization activities in the Pine Knolls and Northside neighborhoods. Eligible activities must serve households earning less than 70% of the HUD published area median income. Funds could be used for second mortgages, property acquisition or renovation, public improvements, or community service activities.
On October 11, 1999, the Council amended the budget and added $82,500 in funds for this activity. At that time, we reported we would return to the Council with a specific recommendation for use of these funds for a request from the Police Department to acquire property, a request for renovation from the Abundant Life Center, and a request from EmPOWERment for funding for the acquisition and renovation of homes.
Community Services: $51,000
Funds were budgeted to the Chapel Hill - Carrboro YMCA to continue operation of the After School Day Programs held at the Pine Knolls and South Estes Drive Community Centers ($20,000). Funds will be used to assist with operating expenses for the program.
The Council budgeted $15,000 to the Orange County Literacy Council to expand its computer literacy program to all interested public housing residents. The funds will be used to purchase computer equipment and educational software and administrative support for on-site instruction.
The Council also budgeted $16,000 to Community Cuisine for their culinary skills program. The program provides training sessions throughout the year and assists with job placement. Funds will be used for salaries for operating the program and will be earmarked for low-income Chapel Hill residents served by the program.
Economic Development $20,000
The Council budgeted $20,000 for the construction of a parking lot on the corner of West Rosemary Street and Sunset Drive, in conjunction with the Town of Carrboro. The Council has previously budgeted $15,000 for this project, therefore, a total of $35,000 will be available. Funds will be used for construction of the basic parking lot, in accordance with an engineering estimate provided to the Council on April 12, 1999.
Program Administration: $70,000
The remaining $70,000 was budgeted for administration of the Community Development program. Funds would be used for the Community Development Coordinator’s salary, a portion of the Long Range Planning Coordinator’s salary, and overhead costs.