ROARING FORK HOUSING AUTHORITY INITIATIVE DECISION BRIEF #2 TO: Steering Committee Members and Staff Roaring Fork Housing Authority Initiative FROM: Kathy McCormick, McCormick and Associates, Inc. - 303-499-1915 Colin Laird, Healthy Mountain Communities – 963-5502 DATE: August 3, 2002 RE: Roaring Fork Housing Authority preliminary work plan, staffing options, and budget implications PURPOSE This memo outlines a preliminary three-year work plan for a Regional Housing Authority. Information on staffing options and associated budget implications are also included. The options outlined in this memo reflect the general direction and decisions made by the Steering Committee at their July 11, 2002 (summarized below). The information in this memo is intended to foster further discussion on work plan, staffing, and budget as part of the development of an IGA to create a regional housing authority. The memo also includes questions that will guide the discussion at the August 7th steering committee meeting. (Decisions made at the August 7th meeting will then guide the project team's efforts on the financing decision brief.) BACKGROUND Highlights of the discussion and agreements of the July 11 meeting included: Benefits of a Regional Housing Authority * Consistent application of affordable housing standards and definitions for developers as well as prospective renters or homebuyers across jurisdictions. The regional authority could add value by simplifying all processes related to housing funding/financing, development processes, occupancy, enforcement, etc; and * Facilitation of partnerships between different housing providers, including non-profit and private sector developers. A regional housing authority has the potential to leverage the skills and resources of the existing housing providers to better meet the needs of area residents. This role will be enhanced if the efforts to create a permanent funding source are successful. Concerns of a Regional Housing Authority include * Local organizations may compete for limited resources with a regional entity. * The public (i.e., the electorate) will not support another layer of housing bureaucracy. To be successful in any initiative that involves a tax, roles among different housing entities, developers and local governments will need to be clearly defined and the purpose of the regional housing authority seen as complementary to local housing initiatives, otherwise voters may not support any funding proposals. Boundaries The boundary for a regional housing authority would be the same as the RE-1 school district. This area includes portions of Garfield and Eagle Counties and is recognizable by local residents. There are small portions of Pitkin County that are included in the RE-1 school district; however, it is expected that the regional housing authority would not work in those areas because of the programs offered in Aspen/Pitkin County. Governance A board made up with elected officials from each of the five jurisdictions located within the boundary has been proposed. Additionally, each of the jurisdictions will appoint a citizen representative of its choice that will function as an alternate. Decisions would require a quorum of elected officials. (An additional suggestion was to have the citizen representative's act as an operations committee of the housing authority. They would advise staff on day-to-day administrative issues, such as personnel matters, information needs of the community and how to handle concerns about program administration. This approach would engage the citizen group in the activities of the authority and allow the board to focus on policy and strategic development issues.) Staffing Hiring a full-time staff member as soon as possible would enhance the future success of a regional housing authority. This person would: * Coordinate the internal functions of the organization with the board; * Assist staff of the area towns and counties on housing related policies and programs, and coordinate new and existing housing efforts among existing housing organizations within the valley; * Monitor housing needs by maintaining information on local market conditions; * The staff would also facilitate the rent and/or sale of affordable housing. (Ideally, in the early years of the regional housing authority operations, the Garfield County Housing Authority would continue to provide these services); * Market regional housing authority efforts; and, * Prepare for a regional ballot question with the board in support of affordable housing. PROGRAM OPERATIONS Background Clearly, proposed staffing plans would vary depending upon the role and responsibilities of the Authority. The amount of staff needed for any of the roles described above would also be dependent upon the level of affordable housing production in the area. Currently, Garfield County Housing Authority is administering the affordable housing program for Garfield County. To date, eight units have been produced and the work associated with income qualification has been easily absorbed among the existing staff. The Executive Director also provides guidance on affordable housing approaches to the County and participates in some discussions with the Planning and Zoning staff and local developers. Again, the level of activity has been modest and these tasks have been relatively easy to absorb into the organization. The Garfield County Housing Authority will also administer the Community Housing Program that was recently adopted by Glenwood Springs. At this time, only one development has been discussed where the inclusionary zoning requirements might apply. McCormick and Associates. Inc. has been working in the metro area with different communities who have recently implemented inclusionary zoning programs or are in the process of doing so. These communities include Longmont, Lafayette, Boulder and Broomfield. Douglas County is also in the process of implementing a regional housing authority. Each community is approaching administration differently, depending on the purposes of their respective programs and the responsibilities imposed on the communities. These examples offer some context for a work and staffing plan for a regional housing authority in the Roaring Fork Valley. Highlights of the programs include: * The City of Boulder has an inclusionary zoning program. In addition, it also allocates close to $2 million annually for affordable housing produced outside of the inclusionary zoning program that is targeted for lower income households. The City plays a significant role in marketing of units, negotiating with developers and working with their sales staff, identifying potential buyers, establishing sales prices, recording deeds, addressing legal issues and working with buyers to overcome obstacles in obtaining financing. The staff is also involved with housing policy and managing complementary programs, such as homebuyer assistance and rehabilitation loan programs. Staff also maintains an extensive database on units and the types of buyers who have purchase affordable units produced through their programs. The City of Boulder produces about 100 units annually and estimates that one full time equivalent (FTE) is devoted to administrative tasks. They estimate the administrative cost to be about $1,000 per affordable unit. These costs are paid through city revenue sources. * The City of Lafayette is in the process of adopting an inclusionary zoning program and hopes to expand its affordable housing efforts into other arenas, such as acquisition and rehabilitation of existing housing in the future. To administer the program compliance aspect of the inclusionary zoning program, Lafayette will issue a request for proposal to provide administrative services. This will include providing information about affordable units, qualifying buyers, establishing sales prices based on pre-determined formulas and recording deed restrictions. Legal issues, reviewing development proposals and negotiating with developers will be done with in-house staff. This approach is similar to the approach proposed by Glenwood Springs. Lafayette estimates that 60 to 110 units could be produced annually. They are budgeting an average cost of $500 per unit. This cost is lower than Boulder's because 20% of the units to be produced under Lafayette's program will not have long term affordability deed restrictions and the administrative requirements for these units will be substantially less. This cost will be added to the sales price of the affordable units; and, * Douglas County is in the process of creating a regional housing authority. One of the primary purposes of this authority is to produce affordable housing. Because of this purpose, they have allowed three years for start-up and plan to hire a person who is skilled in property acquisition and development. At the end of the three-year period, they expect that sufficient revenues generated through development and other cash flow sources will be available to underwrite the operations of the housing authority. The first year budget is projected to be $218,200, which includes approximately $15,000 for capital expenditures. The following two years, the operational budget is projected to be $163,200. Douglas County is contributing $100,000 per year for start up, with Castle Rock, Parker and Lone Tree each contributing $33,333 per year for three years. THREE-YEAR WORK AND STAFFING PLAN Please see web version www.hmccolorado.org/housingauthority.htm for table. Plan Goals This preliminary work and staffing plan is based upon the direction provided by the steering committee to actively pursue a regional housing authority that provides local governments with a full range of services and has a full-time director. Please note that this plan assumes that all contracts for administering local housing programs would be done through the Regional Housing Authority. In turn, the Regional Housing Authority would contract with Garfield County Housing Authority for administrative services and maintain a portion of the contract to provide policy and other program support to the area governments. There are several goals associated with this proposed work and staffing plan. They include: 1. Provide more support for entities that offer housing and housing related services; 2. Build upon the strengths and skills of existing organizations and individuals; 3. Provide local governments with expertise in housing policy, program development, programs and administration; 4. Demonstrate cooperation among the local governments and agencies interested in housing; 5. Sufficiently support the initial operations of the regional housing authority so organization can show value to local communities and citizens; 6. Develop a successful ballot question that will raise funds to further support affordable housing efforts in the area and be able to leverage these funds. (Locally generated funds can be leveraged to provide even more support for local housing efforts. For example, the City of Boulder found that it was able to leverage its local housing fund at a minimum of $7 to $1); and, 7. Establish regional capacity to support and develop programs and approaches that further local housing initiatives. Budget Summary This preliminary budget includes a more detailed account of estimated costs associated with a full-year operating budget in 2003 and 2004 Budget Item 2003 2004 Notes Salaries Director $60,000 $61,800 Housing Specialist $35,000 Benefits $13,800 $22,264 Total Salaries and Benefits $73,800 $119,064 Operating Expenses Legal $5,000 $5,150 Travel $2,500 $2,575 Training $2,500 $2,575 Telephone $2,400 $2,472 Rent $4,800 $4,944 In-kind/Shared Space Supplies $1,000 $1,030 Printing $1,200 $1,236 Advertising $2,500 $2,575 Accounting $1,200 $1,236 Postage $600 $618 Marketing/ Information Fairs $4,000 $4,120 Administrative Overhead $15,000 $15,450 Miscellaneous/ Contracts $35,000 $36,050 Total Estimated Operating $77,700 $80,031 Total Budget Estimate $151,500 $199,095 QUESTIONS FOR AUGUST 7 MEETING: There are several questions the project team would like to cover related to this memo. They include: 1. One assumption, based on our last meeting, is a regional housing authority can further local housing solutions and that this will best be accomplished with adequate funding, resources, and staff. The proposed work and staffing plan indicate a full-time staff person would be employed very soon (possibly by the end of 2002). Are there other approaches to consider that would accomplish the same goal? Are the assumptions about the budget, staffing plan and work program correct? 2. How well do the proposed tasks complement the work of other entities in the area? What modifications need to be considered? 3. Can we assume in-kind office space? 4. The work plan indicates that the regional housing authority will be able to point to some clear accomplishments that would support a ballot initiative in November 2003. Of the accomplishments described in the work plan, which are the most important? How reasonable is it to assume that the Regional Authority will have demonstrated sufficient value so that a ballot initiative would a reasonable chance for success in 2003? What criteria can we use to determine when the Regional Authority should pursue a ballot question? 5. What types of skills and expertise would be ideal for an Executive Director? 6. The plan outlines a sharing of costs among the communities to pay for the expenses of the authority in its first few years of operation. What are some of the factors to consider when discussing approaches to share operational costs? ROARING FORK HOUSING AUTHORITY INITIATIVE HEALTHY MOUNTAIN COMMUNITIES