Washtenaw Gets More Housing Funds

More than $400,000 in unanticipated federal funding – including a $250,000 “green” grant for Avalon Housing‘s Near North in Ann Arbor – allowed board members of the Washtenaw Urban County to boost funding for several low-income housing and community development projects at their April 27 meeting.

In addition to the grant for Near North – a proposed 39-unit affordable housing development on Main Street just north of downtown – the Urban County also received nearly $180,000 more than anticipated in federal funding through the Community Development Block Grant program for the coming fiscal year.

The board voted to divvy up those additional funds to projects in the Urban County’s three largest jurisdictions – Ann Arbor, Ypsilanti and Ypsilanti Township. They also approved setting aside nearly $27,000 for as-yet-unspecified human services support, in light of possible cuts in city of Ann Arbor funding to local nonprofits.

The focus on allocations at Tuesday’s meeting prompted this comment from Ypsilanti mayor Paul Schreiber: “It’s a pleasure to sit on a board that has money to spend!”

Revising the Urban County Annual Plan

The Urban County is a consortium of Washtenaw County, Ann Arbor, Ypsilanti and 9 townships, responsible for allocating federal funding for low-income housing and other community development projects. The funds are managed by staff of the joint county/city of Ann Arbor office of community development. [For background on the Urban County, see Chronicle coverage: "Urban County Allocates Housing Funds"]

Damon Thompson, OCD’s operations manager, began Tuesday’s meeting by noting that May 3 would be the final public hearing for the Urban County’s annual plan. The hearing will be held during the Ann Arbor city council meeting.

Leah Gunn, a Washtenaw County commissioner who chairs the Urban County board, reported that the county board had held a public hearing on the annual plan at its April 21 meeting. No one spoke at the hearing, she said. When asked by a fellow board member whether that was a surprise, Gunn replied, “No, it’s not.”

Thompson said that the deadline for public comments on the plan is May 10. The plan – for the fiscal year beginning July 1, 2010 – must be submitted to the U.S. Dept. of Housing and Urban Development (HUD), in order to secure federal funding. [.pdf of annual plan draft]

At its March 23 meeting, the Urban County board had approved proposed projects included in the plan and funded by the federal HOME Investment Partnerships and the Community Development Block Grant (CDBG) programs. At the time, they weren’t yet sure how much CDBG funding they would receive, and based the plan on an anticipated $2.22 million.

On Tuesday, staff informed the board that the actual CDBG funding for fiscal 2010 is $2.4 million. [The HOME funding allocation remained as expected, at $1.665 million.]

Much of the meeting was spent sorting through exactly how the extra CDBG dollars would be allocated. Board members found the staff report confusing, and Leah Gunn asked whether they could table it until next month, when staff would have a chance to clarify the proposed changes. Thompson said that wasn’t possible – he needed to submit the allocations as part of the annual plan for HUD, which was due before the board’s next meeting. So they thrashed through the numbers – and concluded that it was the presentation that was confusing, not a mistake in calculations. Apologizing, OCD director Mary Jo Callan at one point declared, “I’m on the verge of a stroke.”

Ultimately, the allocation changes were approved unanimously, and included:

• $26,978 for human services, with specific projects to be determined. Callan noted that the proposed city of Ann Arbor budget calls for a $260,000 cut to human services funding – it’s up to city council to determine the final amount, she said, but there will almost surely be cuts of some kind. The $26,978 won’t cover the cuts, she added, but it will help.
• An additional $20,000 to Ypsilanti Township for road improvement projects, bringing the total for that line item to $205,000.
• An additional $25,000 to Pittsfield Township for sidewalk repair, for a total of $125,000.
• $20,000 to the city of Ypsilanti, for projects to be determined.
• An additional $51,906 to Ann Arbor for public facilities projects, for a total of $101,905.
• Administrative costs account for 20% of the total amount awarded, or $480,019 – an increase of $35,971.

[.pdf file of final CDBG allocation for FY10]

During the discussion, Paul Schreiber reminded his fellow board members that they are a policy-making body, and that staff are responsible for managing the funds. If staff needs to make changes, he said, the board can vote to amend the plan at a later date.

Other Changes to Funding Allocations: Near North

At their March 23, 2010 meeting, the Urban County board had approved $500,000 in funding for the Near North affordable housing project, to be built on North Main between Kingsley and Summit. The original amount came from three funding sources: $315,536 from the federal HOME program; $154,464 from Ann Arbor’s sewer funds; and $30,000 from Neighborhood Stabilization Program (NSP) awarded to Ann Arbor.

Then earlier this month, the office of community development learned that a grant it had applied for two years ago on behalf of Avalon’s Near North project had been awarded, Callan said. The $250,000 is a HUD community housing development organization (CHDO) grant aimed at increasing the supply of energy efficient and environmentally-friendly housing.

Near North qualifies because it will be built to LEED standards, Callan said.

The original $500,000 funding level for Near North will remain unchanged, but the new grant allowed the board to shift $250,000 previously earmarked for Near North to other projects. A large chunk was allocated for rehab and refinancing of existing properties owned by Avalon, with other funding going to Community Housing Alternatives and Habitat for Humanity Huron Valley.

The funding sources for Near North are now: $250,000 from HUD’s “green” grant; $96,389 from the federal HOME program, and $153,611 from Ann Arbor’s sewer funds.

In addition to the Near North funding, at its March meeting the Urban County board had also granted Avalon a total of $695,467 in funds for the rehabilitation and refinancing of existing properties owned by the nonprofit . Sources for that were $617,404 from the federal HOME program; and $78,063 from the federal Community Development Block Grant (CDBG) funds.

Avalon had originally requested $814,800 for rehab and refinancing of existing properties. With funds freed up because of the “green” grant, staff of the office of community development recommended that Avalon now be funded to the full amount of its request. At its April 27 meeting, the board agreed – funding from the federal HOME program was raised to $736,737, with the $78,063 from CDBG funds unchanged.

In addition, funding for Community Housing Alternatives was bumped up from $420,000 to $480,000, and Habitat for Humanity Huron Valley’s homebuyer education program, which wasn’t previously funded, is now receiving $22,528.

Board members had few questions regarding the staff recommendations to the funding changes. Mike Moran, supervisor for Ann Arbor Township, asked whether the city of Ann Arbor’s sewer fund contributions were cash or a reduction in connection fees. “Why? Are they increasing yours,” asked Bill McFarlane, Superior Township’s supervisor. Moran laughed: “I don’t know – that’s why I asked.”

After the meeting, Callan clarified for The Chronicle that the sewer funds are specifically from the Walnut Ridge fund, managed by City of Ann Arbor public services unit. In 2000, the city reached an agreement with the developer of the Walnut Ridge residential development in Scio Township – in exchange for hooking up to the city’s sanitary sewer system, the developer agreed to pay $350,000 for use in affordable housing projects. Callan said that Carrot Way – another affordable housing project developed by Avalon Housing – has used some of these funds. When architectural drawings and engineering estimates are completed for Near North, Callan said, the office of community development will send a request to city council to approve the use of the sewer funds for that project.

At Tuesday’s meeting, Moran also asked whether the funded projects required compliance with the Davis Bacon Act, which mandates that public works projects pay prevailing wages. Thompson said that they were compliant. And any projects that received federal stimulus dollars were also required to comply with the “Buy American” clause of the American Recovery and Reinvestment Act, he said. So materials like drywall and cement would need to be purchased from American firms.

Administrative Costs: An Analysis

At the board’s March meeting, Barb Fuller – deputy supervisor of Pittsfield Township – had asked for more details about costs related to administering federal grants received by the Urban County. On Tuesday, Callan gave board members an analysis for administrative costs in the calendar years 2008 and 2009.

Different federal programs have different caps on the amount that can be used for administration, she said. CDBG allows for 20% of a grant to be used for administration, for example, while the HOME program allows for 10%. In 2008, administrative costs of $784,861 accounted for 12.03% of the total $6.357 million in funding managed by the office of community development. Last year, administrative costs totaled $1.007 million, or 14.82% of the $6.796 million in total project funding.

The increase in administrative costs in 2009 was due to ramping up projects funded by the federal Neighborhood Stabilization Act, Callan said. Other major efforts for the year included bringing the city of Ann Arbor into the Urban County – the city previously managed its own CDGB and HOME funds – and developing the model for integrated human services funding between Washtenaw County and city of Ann Arbor. The office also manages the county’s Barrier Busters program, which helps coordinate efforts of human services agencies.

“We’re working hard to manage these funds,” Callan told the board. “We don’t have a lot of fluff.”