Agendas and Minutes

City Council (View All)

Study Session

Wednesday, September 03, 2003

Wednesday, September 3, 2003 at 12:00 p.m.
Council Chambers, 1175 East Main Street

Mayor DeBoer called the meeting to order at 12:03 p.m.


City Council: Amarotico, Hartzell and Jackson were present; Amarotico, Morrison and Hearn were absent.
Staff: John McLaughlin, Community Development Director and Ann Seltzer, Communication Manager.

I. Housing Program Priorities and Possible Unspent CDBG Fund Reallocation.

Housing Commission Chairperson Andy Dungan introduced fellow Housing Commissioners.

Dungan presented the outline of their presentation:
· Process (in general)
· Housing Priorities
· Process between Council, Housing Commission and Staff regarding Big Box, UGB, and CDBG.

He shared a quote from the Wall Street Journal "A lesson from the blackout, free markets often need rules." He went to read that the first sentence in the article read "The blackout of 2003 offers a simple but powerful lesson, a great way to organize economic activity, but they need adult supervision." He felt that this is an important perspective.

He felt that there is a real opportunity at this time for affordable housing but that it would take a multi task approach in order to have any real impact. A unified front is important. He commented that there is a legal, moral and ethical aspect on the issue for the need of affordable housing. Need to exercise our ability to do adult supervision.

Dungan shared a letter addressed to the Mayor and council regarding pending Land Use Actions. In the letter he stated that it had been brought to the Housing Commissions attention at its August 27, 2003 meeting that certain land use matters are currently being considered by the Council that are of great importance to the commission. In particular, the commission has interest in modifications being made tot he City's Design Review Guidelines relative to building size limits and potential expansion of the Urban Growth Boundary. The commission feels that both of these items present excellent opportunities to consider and encourage the development of needed housing and, therefore, believes it is appropriate that the Commission has a voice in the discussions taking place.

Housing Coordinator Gary Collord reported that for the past couple of months staff and members of the Housing Commission have been busy evaluating and prioritizing the various strategies of the adopted Housing Action plan. They took into consideration what they felt would be the most effective given the existing resource limitations and development experience.

He briefly explained that the Housing Action Plan outlined six broad strategies including providing funding for affordable housing. The plan focused largely on creating a real estate transfer tax which would be the primary mechanism for financing the proposed trust fund, reduce development and operating costs, to continue to waive the SDC charges as well as looking at reducing other fees, adopt land use regulations to promote affordable housing, preserve existing and create new affordable housing, work with local non-profit providers, develop organizational capacity for affordable housing, set up an annual monitoring process and build understanding and support for affordable housing.

He explained that staff and the Housing Commission agreed that there are two over arching actions that have to happen in order for Ashland to have a successful housing program. These two actions include providing adequate sites with appropriate zoning and development standards that would make it economically feasible for affordable housing to be developed. And, to create a stable and ongoing sources of funding that would be available when needed to support the development of affordable housing.

He stated that these two actions need to work in conjunction and that it is not enough to have just have a stable source of funding that could be used to off set the city's inadequate buildable land inventory and other development constraints. Need to create an environment that anyone could develop affordable housing without tremendous public subsidies.

He stated that the Housing Commission's priorities and strategies are as followed:
1) Located zone land for high-density multi family rental housing.
2) Take immediate action to establish an urban renewal project area, raise local property taxes/divert revenue.
3) Prohibit further single family or "for sale" housing in R2 & R3 zones, need to create more incentives.
4) Inventory all vacant and underused city owned land and where appropriate market it's available for affordable. housing development or sell these sites to use elsewhere for affordable housing development.
5) Encourage and provide incentives for the development of affordable multi family housing over the larger surface parking lots throughout Ashland.
6) Launch an educational campaign to generate awareness of Ashland's problems and needs.

Collord stated that there is a current opportunity to reallocate CDBG funds to assemble a significant site for affordable housing development.

Assistant Planner-CDBG Administration, Brandon Goldman noted a memo that had been distributed to the council regarding the recent history CDBG program. He stated that it was important to begin any discussion by looking at what is the intent of CDBG, which is to direct the federal funds to assist low and moderate-income persons.

He noted that the City in March 2002 modified its Consolidated Plan to explicitly direct these CDBG funds to affordable housing projects. Awards have been made in prior years for affordable housing projects in Ashland.

The projects included a $120,000 grant award to the Ashland Community Land Trust (ACLT) for the acquisition of property to develop four units, $168,00 granted to the Rogue Valley Community Development Corporation (RCCDC) for the acquisition of property at the Lower Pines site. He noted that the negotiations with RVCDC were ended without the property being acquired. Also in 2003, RVCDC received $193,000 toward the acquisition and site identified at the corner of Faith and Siskiyou Boulevard for the development of 10-11 apartment units.

He reported that there is a substantial amount of carryover and that staff has been looking at ways to most expeditiously, while addressing primary needs, to spend these funds.

Presented potential strategies for potential re-capture of unexpended funds.
· No change, stay with existing awards
· ACLT retains award the remaining carryover to be captured.
· The recapture of all unexpended carryover

Recapture scenarios based on re-programming of past carryover
· Strategy 1 above = no reprogramming - 2004 allocation through new RFP
· Strategy 2 above = $472,796 + 2004 allocation (approximately $677,596 total)
· Strategy 3 above = $592,796 + 2004 allocation (approximately $797,596 total)

a) Request for Proposals
b) City Purchase Property
c) Social Services in conjunction with scenarios a and b above

Hartzell noted that ALCT was not in attendance at the study session and staff confirmed that they had been made aware of the date of this study session. She commented that it would be helpful to get updates from ACLT and RVCDC as to where they are at this time.

Goldman reported on the progress of RVCDC, excavation work has been done and also some site planning work. It is his understanding that they have received bids for the foundation work but that there is concern over conflict of interest in that Medinger was one of the bidders on this project while sitting on the Housing Commission. There is a delay before they can select who is going to do the foundation work. Staff has been in consultation with HUD representatives, and has received word that this decision will be made by HUD legal staff, and as such will not engage until they receive a formal recommendation for an exception to the conflict of interest provisions. Depending on the council's direction on how to proceed will either engage in the exception request where City Attorney would file a request for an exception to the conflict of interest provision, unless the council directs that these funds be recaptured as well. Larry Medinger was present and noted that his company had dropped out of the process. Goldman explained that the conflict of interest precludes use of CDBG funds on the property.

Hartzell felt that there are a limited number of scenarios and suggested additional scenarios.

Mayor stated that the council needs to direct staff to expend the funds and to bring back whatever is needed for the council's approval. He felt that the project that is occurring is the project that is going to be completed and supports any funds that could be legally expended to help with this project. He felt that we are at real risk at losing these CDBG funds. He offered to intervene with HUD politically if necessary.

Hartzell pointed out that she had begun writing a letter to Senator Wyden office, as he is very supporting of trying to legislative relief for this restriction of the 1.5 carryover. Her letter addresses some of the reasons that we would ask for this because are one of the 20 smallest entitlement communities.

Jackson noted her interest in finding ways to expend this funding and concurs that the political route could be followed to getting the language changed, but in the meantime we need to move forward.

Mayor noted that he did not support Hartzell's letter and that he supported the 1.5 carryover. He stated that the city is suppose to spend the money and the city has just not done their job. Because of the 1.5 a year is being allowed to spend the money. He would like to decrease some of the regulations for small communities.

Jackson commented that the Hersey/Patterson project has received the amount of CDBG support that is allowed. Goldman explained that if it brings down the purchase price of the houses further it could be subsidized to a greater extent with CDBG. This would require going back before the Housing Commission and then the city council for a decision as to whether this amount of subsidy was appropriate. He noted that the council would be addressing this at their September 16 council meeting.

Hartzell commented that it would be hard for her to make any decisions without knowing more about the actions. She requested updates from ACLT and RVCDC. She wants to know about the viable alternatives that are available before talking about dumping in one aggregate due to HUD advising against this.

Goldman stated that, in lieu of looking at the viability of a yet to be determined to be defined project and where that aggregated funds would go, look at the viability of the existing projects that are proposed is imperative. And, determining whether there is confidence by the city as to whether these projects would be completed. He noted that there is low confidence that this project is going to go forward and would not qualify for CDBG allocation. The ACLT Hersey/Patterson confidence level shows that there is a strong possibility it would be completed, but taking into consideration the conflict of interest provision.

Mayor stated that the council is in favor of dedicating funds to the Hersey/Patterson project.

Goldman noted an additional project, which is the Siskiyou/Faith site, and is being revised from 10-11 apartment units to 8 affordable town homes. Because this is considered a different use, reallocation would need to be done. The confidence level is currently being considered on this project.

Ron Demele, Executive Director for Rogue Valley Community Development Corporation (RVCDC) gave brief update on the status of their projects. Noted their frustration regarding moving projects forward but feel they have the ability to spend the CDBG monies. He agreed that the city should request all non-profits to share the status of their projects.

Discussion regarding the Croman property included re-zoning to accommodate residential use.

Community Development Director John McLaughlin asked if the council wanted to direct staff to go back for reallocation. Hartzell commented that due to bringing the Housing Commission up to date and getting the plan and staff in place makes our capacity as a community to employ this funding is beginning to increase. She voiced her disappointment that the conflict of interest provision didn't get caught earlier.

McLaughlin stated that staff is looking for direction on two awards that have gone out previously. The $160,000 that is carried over from the Lower Pines and the $190,00 from the Siskyou/Faith project. He noted another project that is coming up and asked the council if they want to direct staff to do another award of that, that may have more difficulty. Or, direct staff to consolidate all these funds and going out for one larger amount that may end up being with a larger successful project. Without this direction, come November 2004 deadline, we have to go through the process of allocating these funds. The question is not, what specific project should be pursued, but what how does council wants staff to handle these funds.

Collord explained that there is a converging of events that makes the idea of pulling the monies and trying to facilitate the development of a significant housing project a good idea. He reiterated that we are at risk of losing our CDBG funds and that the County Housing Authority telling us that they are prepared to finance the development of a large project if they can find acreage in Ashland at a reasonable price. He felt that this might be an opportunity to take advantage of these circumstances.

Brandon clarified that the expenditure funds have to happen before November 2004 without losing potential allocations. The expenditure happens at the point the land is acquired, not when units are developed, if the land acquisition was the award.

McLaughlin stated that staff would take into consideration all current and proposed projects and bring back recommendations and steps for the councils decision on September 16.

Collord stated that the Housing Commission is looking for direction from the council on how they are to come up with a continuous stable source of funding, which could be forming an urban renewal project area, raising property taxes or diverting funds from other sources.

Mayor noted that the Parks Department is currently doing this same thing for trails and open space. He felt that council should be aware that there are two organizations looking for funding sources. He explained that urban renewal districts are set to restore "blighted" areas. He questioned if Ashland has a "blighted" area. He pointed out that the businesses at the south interchange in Medford provide zero dollars to schools or the city. He does not agree with urban renewal and not supportive of an urban renewal district for any purpose other than restoring a "blighted" area.

Hartzell would like to keep an eye on where the Action Plan talks about a funding source. She noted that the real estate tax is being held off at the state level. She stated that we are committed to "a strategy" in the Action Plan and there is a need to find one.

Hearn noted that by the council approving the Parks Trails Master Plan, the council committed to some type of funding mechanism. He stated that there is group currently meeting which are exploring different methods.

It was agreed that there would always be other competing issues when looking for alternative funding sources.

Jackson requested that staff bring back a number of alternatives of what can be done with the assistance of the Finance Director to determine impacts.

McLaughlin stated that if the council agreed with the Mayors view regarding urban renewal we shouldn't be expending funds to this.

It was noted that the Housing Commission would be looking at the priorities and any direction from the council would be helpful. It was clarified that we have a relatively large amount of CDBG funds to purchase land and at the same time, the Action Plan suggests building rental housing. The intent is to try and combine these two into a project.

Dungan voiced some confusion on what the council wants the Housing Commission to do and gave examples of upcoming issues regarding the Big Box Ordinance and the Urban Growth Boundary. Questioned whether the council would like to hear their opinion regarding these issues at the time these are being discussed. It was agreed that council would like to hear the Commission speak as a unified voice and change how the Housing Commission relates to these types of conservation in the future. It was noted that the Housing Commission would be meeting on September 10.

McLaughlin explained that they were considering delaying the discussion regarding the Nowx2 discussion on September 16. In the discussion, it needs to be clear that this is not about UGB amendments, but long-term regional planning. Staff will bring this forward to the council for further discussion and also to include the Housing Commission. Jackson stated that the consideration of the Housing Action Plan needs to be included in the long-term discussions about Nowx2 as well as individual planning actions. McLaughlin reminded council that a balance for affordable housing was recognized during the discussion at the most recent council meeting. And, that affordable housing had not been overlooked, but was well discussed. Staff will be bringing this back to the council for further discussion.

Dungan requested a study session regarding the pros and cons of how UGB expansion and density could be used as a tool to deal with housing issues. Collord noted that it would be difficult to have an intelligent discussion about long-term regional planning without including affordable housing.

Jackson noted that there would be another layer of process if and when the Regional Problem Solving Project comes together. To add future growth areas that weren't identified in the initial process will require a regional process as well as the local to state process. She stated that there will a built in timeframe where communities can propose future additional growth areas.

Mayor noted the increase of work that effects department staff anytime any of these issues are touched. Jackson noted the process, which involved the Big Box ordinance and how affordable housing fit into this.

It was agreed to place the discussion regarding Urban Renewal on hold. Hartzell requested that staff prepare a matrix that shows what the reasonable options are, and what the pros and cons of each are.

Collord will provide to the council educational material regarding Urban Renewal. Staff will provide the requested matrix.

Meeting was adjourned at 1:58 p.m.
Respectfully submitted,
Barbara Christensen, City Recorder

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