cover
TO: Mayor Richard C. Irvin
FROM: Rick Guzman, Manager, Neighborhood Redevelopment Division
DATE: January 18, 2018
SUBJECT:
A Resolution Authorizing Annual Action Plan Substantial Amendments (2018 - #1) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and HOME Investment Partnerships Act (HOME) Programs
PURPOSE:
Staff requests authorization of Annual Action Plan Substantial Amendments (2018-#1) to provide funding for four CDBG projects and one HOME Project. Under this Substantial Amendment, the CDBG reallocated funding is recommended as per unallocated funds, unexpended funds, and/or cancelled projects from the following CDBG and HOME Program Years: 2015, 2016 and 2017.
The following Annual Action Plan Amendment CDBG Activities and Reallocation Totals have been recommended by the BGWC under Substantial Amendment 2018-#1:
1. 2017 Fox Valley Habitat for Humanity Home Ownership Project
Funds have been recommended due to mutually agreed upon changes between the City and Habitat to Habitat's 2015 and 2017 scopes of work to best comply with HUD's environmental regulatory requirements.
Reallocation Total: $26,279.73
2. 2017 Section 108 Credit Subsidy and Admin. Fees for Aurora Arts Centre Project
As part of the City's Section 108 application for the Aurora Arts Centre Project, the City front-funded the project's credit subsidy (2.59% of $3M loan request or $77,700) and administrative fees. With approval from HUD, Staff is seeking retroactive CDBG reimbursement for the fees.
Reallocation Total: $100,000
3. 2017 Choose Aurora (Down Payment Assistance)
The City's Choose Aurora program application was submitted for an additional $100,000 under the City's 2018 CDBG funding cycle; however, to maintain the program's funding availability, Staff recommended that the program's 2018 CDBG funding request be reduced by $50,000 and to instead increase the project's existing 2017 project by $50,000 to maintain its funding availability.
Reallocation Total: $100,000
4. 2018 Marie Wilkinson Food Pantry Parking Lot Project
This project was proposed under the City's 2018 CDBG funding cycle but providing re-allocated 2017 funds will allow this project to commence much sooner (as soon as weather permits this Spring) as opposed to waiting for authorization to spend 2018 funds (last year the City did not receive permission to spend 2017 funds until November of 2017). This project is the perfect candidate to receive funding that can be spent right away since it (a) is shovel-ready; (b) will address traffic safety concerns and (c) is weather dependent.
Reallocation Total: $90,700
The funding sources from which the abovenamed CDBG actives have been proposed for reallocation under Substantial Amendment 2018-#1 are outlined in the chart below. In some instances, existing projects may have had increases or decreases to their original amounts while in other instances, entirely new projects may be proposed:
|
Proposed CDBG Amended or New Activity |
Program Year/Funding Source |
Original Funding Allocation |
Comments |
Amount Increased or (Decreases) |
|
2017 Fox Valley Habitat for Humanity Home Ownership Project |
2015 Fox Valley Habitat for Humanity Home Ownership |
$50,000.00 |
Unexpended Funds |
($26,279.73) |
|
|
2017 Fox Valley Habitat for Humanity Building Futures Initiative 2017 |
$50,000.00 |
Amended Project Name/Scope of Work |
$0.00 |
|
|
Reallocation Total (increase to original 2017 allocation) |
$26,279.73 |
|
2017 Section 108 Credit Subsidy and Administrative Fees for Aurora Arts Centre Project |
2015 Quad County African American Chamber of Commerce - Job placement services |
$15,000.00 |
Project Cancelled |
($9,294.17) |
|
|
2016 Invest Aurora Micro-Enterprise Grant Program |
$78,950.00 |
Unexpended funds |
($72,245.13) |
|
|
2017 Entitlement Funds |
$153,101.20 |
Unallocated funds |
($18,460.70) |
|
|
Reallocation Total |
$100,000.00 |
|
2017 Choose Aurora |
2017 Entitlement Funds |
$153,101.20 |
Unallocated funds |
($50,000.00) |
|
|
Reallocation Total (increase to original 2017 allocation of $50,000) |
$50,000.00 |
|
2018 Marie Wilkinson Food Pantry Parking Lot Project |
2016 Joseph Corporation Safety First |
$227,225.00 |
Unexpended Funds |
($87,773.41) |
|
|
2017 Entitlement Funds |
$153,101.20 |
Unallocated |
($2,926.59) |
|
|
Reallocation Total |
$90,700.00 |
The following Annual Action Plan Amendment HOME Activity and Reallocation Total has been recommended by the BGWC under Substantial Amendment 2018-#1:
1. 2018 Coulter Court and Aurora Downtown Revitalization Rental Housing Development
City Council has already approved a development agreement to provide this $600,000 in HOME funding to the Arts Center/Coulter Court project, but HUD required the City to wait to make the formal commitment until after the expiration date of a "period of affordability," which is set to expire on 1/28/18. This formal commitment also allows funds to be disbursed upon City Council approval and pursuant to R16-385. Funds will go to assist with the renovation of 12 of the units at Coulter Court (104 E. Downer Pl.) as part of an approximately $7 million upgrade of that facility.
Reallocation Total: $600,000.
The funding sources from which the abovenamed HOME activity have been proposed for reallocation under Substantial Amendment 2018-#1 will come from unallocated funds from the City's 2015 and 2016 HOME Direct Project Activity funds and are outlined in the chart below:
|
Proposed HOME Activity |
HOME Program Year Funding Source |
Funding Allocation |
Expenditure |
Current Balance |
Amount Increased or (Decreases) |
|
2018 Coulter Court and Aurora Downtown Revitalization Rental Housing Development Project |
2015 Entitlement/Direct Project/ Unallocated |
$371,185.50 |
$107,695.26 |
$263,490.24 |
($263,490.24) |
|
|
2016 Entitlement/Direct Project/Unallocated |
$375,103.50 |
$0.00 |
$375,103.50 |
($336,509.76) |
|
|
Reallocation Total |
$600,000.00 |
The Block Grant Working Committee BGWC recommended the above named projects for funding as they support the City's 2015 - 2019 CDBG Consolidated Plan Community Development Goals and Objectives related to home ownership, economic development, public facility improvements, and the development of affordable rental housing. The BGWC will hold a public hearing to obtain public input on their recommendation on Monday, January 22, 2018 at 5:00 PM in the City Hall Council Chambers. (Public Notice, Exhibit A is attached.) The public comment period for the proposed substantial amendments will conclude on February 13, 2018.
BACKGROUND:
The City of Aurora receives annual CDBG and HOME entitlement allocations from HUD in the amounts of approximately $1.3 million and $500,000, respectively. By federal law, the City must allocate CDBG and HOME funds to eligible projects in order to ensure the funds are spent in a timely and efficient manner. The CDBG and HOME Funding that is not expended during the grant period is reallocated to other program(s) or project(s) in order to make use of the federal funding investment in the community. The funds are to be used to eliminate slum and blight; provide decent, safe, and sanitary housing; and provide services and projects to low-to-moderate income persons (defined as earning at-or below- 80% of the Area Median Income, or $63,200 for a family of four in 2017). Under this Substantial Amendment, the CDBG reallocated funding is recommended as per unallocated funds resulting from unanticipated increases to the City's CDBG entitlement grant and/or recaptured funds that were unexpended from prior year projects.
The proposed reallocation of HOME funds is recommended as per unallocated funds from HOME Program Years: 2015 and 2016. The reallocation brings to completion the public participation process to the final commitment of HUD funds under the City's Development Agreement with "The Aurora Revitalization Owner” formed through the City’s development partner, The Community Builders (TCB). On December 13, 2016, the City Council passed Resolution R16-385 (Exhibit B attached), which approved a Development Agreement with the same entity, “The Aurora Revitalization Owner,” to provide an equivalent amount ($600,000.00) of federally provided HOME funds subject. Subsequent to this approval, the City was formally instructed by HUD that it could not commit HOME funds until after the Coulter Court's period of affordability expired on January 28, 2018. As a result and due to the Developer's closing requirements for all of its remaining financing for the properties at 2-20 S. Stolp; 5 E. Galena Blvd. and 32 S. Broadway/104 E. Downer Place needing to take place no later than December 31, 2017 required demonstration that all other funding sources-including the $600,000 that would eventually come from HOME funds had been committed. Since HUD has instructed the City to wait until after Jan. 28, 2018 to commit the HOME funds, the City Council passed Resolution R17-366 (Exhibit C attached) which provided a separate agreement evidencing the City’s funding Commitment of $600,000 in November 2017.
The entire project itself has received City Council approval since its MOU was approved in June 2016 (which provided the City's forward commitment of CDBG/HOME/Section 108 funds totaling a combined amount of $4.3M). The HOME funds will be used towards rehabilitation costs for twelve Coulter Courts residential units located at 32 S. Broadway. The entire residential component of the Aurora Arts Centre project will result in 76 affordable rental units total, with 38 located at the Coulter Courts property and the other 38 additional (to be created) located at 2-20 S. Stolp Avenue property.
DISCUSSION:
The City of Aurora receives an annual HOME entitlement allocation. The funding must be allocated as follows: 15% Community Housing Development Organization activities, 10% administration, with the remainder committed to direct project activities. To date, the City has not committed the remainder of its 2015 and its 2016 HOME Direct Project Activity funds to any projects. The HOME request for the Coulter Courts and Aurora Downtown Revitalization Rental Housing Development Project totals $600,000 and relates to the Development Agreement between the City and The Aurora Revitalization Owner LLC . The proposed HOME funds will be used towards the project's rehabilitation and development costs. Given the prior approvals for the HOME funds, the request to commit the HOME funds under Substantial Amendment 2018-#1 although seemingly ministerial in nature, requires an amendment to the City’s Annual Action Plan for federal funding and a full public comment process under the City’s public participation plan.
Funding for the CDBG and HOME projects will be available in the 2018 City Budget, through budget amendments to the CDBG program account 221-1330-801-XX-XX series and HOME program account 213-1330-801-XX-XX series.
Pending the Planning & Development Committee's approval and Committee of the Whole's approval, should the respective committee approvals result in moving this item forward for the February 13, 2018 City Council's review, staff respectfully requests that this item remain under "unfinished business" on the City Council's agenda in order to accommodate the substantial amendment's 30-day public comment period.
IMPACT STATEMENT:
This action will have a positive impact on the City's community development efforts.
RECOMMENDATIONS:
Staff recommends approval of a Resolution authorizing Annual Action Plan Substantial Amendment (2018-#1) to reflect funding allocations for the HOME Investment Partnership Act programs and to authorize the City's Mayor, the Neighborhood Redevelopment Manager, or their designees to execute any contracts as well as any other documents associated with this Substantial Amendment, including but not limited to HUD's program administration requirements.
cc: Alderman Saville, Chairman
Alderman Donnell
Alderman Irvin
Alderman Hart-Burns, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing Annual Action Plan Substantial Amendments (2018 - #1) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and HOME Investment Partnerships Act (HOME) Programs
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, WHEREAS, the City of Aurora has a Consolidated Plan and Annual Action Plan which have been adopted by the City Council and which have defined priorities for CDBG funding; and
WHEREAS, the City of Aurora’s Block Grant Working Committee recommended
adoption of the Annual Action Plan Substantial Amendment (2018-#1) to reflect CDBG and HOME funding re/allocations at its January 3, 2018 meeting; and
WHEREAS, funding will be available in the 2018 City Budget CDBG program account (221-1330-801-43-series) 2018 City Budget HOME program account (213-1330-801-XX-XX series) as per Exhibit A
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, finds as facts all of the preamble recitals of this Resolution and hereby that the City Council of the City of Aurora, Illinois, finds as facts all of the preamble recitals of this Resolution and hereby approves a Resolution Authorizing Annual Action Plan Substantial Amendments (2018 - #1) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and HOME Investment Partnerships Act (HOME) Program and authorizes the City's Mayor, the Neighborhood Redevelopment Manager, or their designees to execute any contracts as well as any other documents associated with this Substantial Amendment, including but not limited to HUD's program administration requirements.