Urban County Finalizes Funding Model

Washtenaw Urban County executive committee meeting (Nov. 16, 2010): The final piece of a coordinated funding model that’s been in the works for more than a year fell into place on Tuesday, when the Washtenaw Urban County’s executive committee voted unanimously to join the effort.

Two people – Steve Dobson, past chair of the local United Way board, and community activist Lily Au – spoke to the group during public commentary, taking opposite sides of the issue. But there was little discussion among committee members before the vote. Mary Jo Callan, head of the county/city of Ann Arbor office of community development, briefly recapped a detailed presentation she’d given in September, outlining how Ann Arbor, Washtenaw County and the Urban County would join with the Ann Arbor Area Community Foundation and Washtenaw United Way to coordinate their funding to local nonprofits.

The coordinated funding, managed by Callan’s staff, will give priority to programs and services addressing six key areas: housing/homelessness, aging, school-aged youth, children from birth to six, “safety net” health and food/hunger relief. In total, the five funding entities provide about $5 million annually for local human services nonprofits. The Urban County – a consortium of 11 local governments – contributes roughly $350,000 of that amount.

The committee also voted on three items related to affordable housing efforts: 1) implementing “green” construction standards for builders funded with federal HUD dollars, 2) approving a draft budget and annual request for proposals (RFP) for developers of affordable houses funded through the Urban County, and 3) making changes to the budget tracking for the Urban County’s homebuyer program. All votes were unanimous.

Coordinated Funding for Human Services

The Urban County executive committee had been briefed by Callan at their September meeting, when members had also raised some questions and concerns about the proposal. They had been expected to vote on the issue at their meeting in October, but it was cancelled due to severe weather advisories that day. The governing bodies of the four other entities involved in the coordinated funding model have already voted to join the effort.

Coordinated Funding: Public Commentary

Prior to the start of Tuesday’s meeting, Lily Au distributed several handouts, including a financial statement from the local United Way’s annual report, as well as past news articles and blog posts about problems with the United Way in other states and on the national level. During public commentary, Au began by saying that she is a Christian and it’s her religious responsibility to work for the poor. She said she doesn’t like the coordinated model – among her criticisms is a concern that it concentrates power in the hands of the office of community development. She cited a rumor that when this model is put in place, the county will silently withdraw its funding for human services. If that happens, they’ll just end up spending more money on the jail, she said. She noted that the county has given assurances that there will be no co-mingling of private and public monies, and she’s grateful for that. Au concluded by saying that the ACLU and the Interfaith Council for Peace & Justice are following the issue closely.

Steve Dobson told the committee that he was speaking on behalf of the local United Way – he is past chair of that nonprofit. “Needless to say, I see an entirely different picture” than the one portrayed by Au. A task force on this project began meeting more than a year ago, he said, trying to find a way to accomplish their shared objectives with resources that were stretched. After months of analysis, the board of the United Way and the other entities all unanimously endorsed the approach. He said the approach provides for improved accountability, reduced costs, improved efficiencies for nonprofits, and a greater impact of financial resources that all the entities collectively invest in the social safety net. Dobson noted that the United Way is committed to reaching out to areas of the county outside of Ann Arbor and Ypsilanti. He said he hoped the Urban County would also unanimously approve the funding model. “It will be a huge step forward in the difficult times that lie ahead.”

Coordinated Funding: Committee Discussion

Mary Jo Callan gave a brief overview of the coordinated model, noting that it aims to coordinate funding priorities, nonprofit applications and interventions, and proposal reviews. She reminded committee members that each funding entity would retain authority over the way it ultimately allocates the funds that it provides to nonprofits.

For the Urban County, the executive committee would vote on how funds from the federal Community Development Block Grant (CDBG) program would be distributed. [The Urban County is a consortium of Washtenaw County, Ann Arbor, Ypsilanti and nine 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 (OCD). For additional background on the Urban County, see Chronicle coverage: "Urban County Allocates Housing Funds"]

Callan reviewed the six areas that have been identified as community priorities, with funding to be allocated proportionally, based on a five-year historic funding trend: housing/homelessness (37%), “safety net” health (37%), children from birth to six (13%), aging (6%), school-aged youth (6%), and food/hunger relief (1%).

Margie Teall, the Ann Arbor city councilmember who serves on the Urban County executive committee, moved to approve the funding model. Karen Lovejoy Roe, the clerk for Ypsilanti Township, offered an amendment stipulating that there would be no increase in administrative fees paid to the office of community development. Callan observed that none of the federal funding allocated to human services nonprofits by the Urban County is spent on administration – it’s all used to fund services, she said. And in general, there’s a cap on the amount of administrative overhead that can be used from federal funds, she noted. However, she said if the committee wanted to clarify that as an amendment, they certainly could. Teall accepted it as a friendly amendment.

Outcome: The Urban County executive committee voted unanimously to approve the coordinated funding model for human services, as amended.

2011-12 Affordable Housing

Jennifer L. Hall, housing manager for the office of community development, briefed committee members on several issues related to the Urban County’s affordable housing initiatives. The group took votes on three items: 1) implementing “green” construction standards for builders funded with federal HUD dollars, 2) approving a draft budget and annual request for proposals (RFP) for developers of affordable houses funded through the Urban County, and 3) making changes to the budget tracking for the Urban County’s homebuyer program.

Green Construction Standards

Hall recommended that the Urban County approve adopting the Enterprise Green Community Building Standards for all housing projects funded by the U.S. Department of Housing and Urban Development (HUD). Enterprise, a nonprofit based in Columbia, Maryland, supports affordable housing initiatives – its green building standards are one of only a few accepted by HUD.

Starting with next year’s funding cycle, compliance with the standards would be mandatory for projects that receive HUD funds through the Urban County, Hall said.

Mandy Grewal, an Urban County executive committee member and Pittsfield Township supervisor, asked whether the standards would significantly increase the cost of these projects. Hall responded by saying there will be short-term costs, but that will result in longer-term energy savings. It will increase the cost of each project, she said – that might mean they’ll do one less project per year, but it would be worth it. Adopting the standards would also help them be more competitive for future HUD funding.

In response to queries by Darrell Fecho, manager of Scio Township, Hall said that these standards will not apply to single-family rehab projects at this point, but that they could return to the Urban County committee for a discussion about that in the future.

Affordable Housing RFP

Every year, Hall said, the office of community development (OCD) issues a request for proposals (RFP) for developers like Avalon Housing or Community Housing Alternatives to propose affordable housing projects funded by HUD. However, OCD staff doesn’t yet know how much funding they’ll receive from HUD in the 2011-12 fiscal year, she said, and they might not find out until the spring. Because they need to move ahead in developing an annual plan, OCD staff drafted a budget based on funding received for the current fiscal year. From that, they’ve calculated how much will be available for affordable housing projects solicited via the annual RFP.

The draft budget assumes that the city of Ann Arbor will receive $974,639 in funding through HUD’s HOME Investment Partnerships program – as it did this year. Some of that money is already allocated, including $300,000 to be used to close a financing gap for Avalon Housing’s Near North project. Another $400,000 would be used for a Jackson Road green construction demonstration project, to be managed by the office of community development. That leaves $274,639 available for projects funded through the RFP. In addition to Ann Arbor HOME funding, the rest of the Urban County is expected to receive $691,284 in HOME funds available for the RFP projects.

The budget for HUD’s Community Development Block Grant (CDBG) program includes $175,000 that Ann Arbor is setting aside for housing projects within the city limits – those will also be part of the RFP funds. Hall said that if any other municipality wants to include some of its CDBG allocation as part of this RFP, they should let her know.

Other than funding, Hall mentioned that the main difference between the 2011-12 RFP and the previous year’s RFP is the inclusion of green building standards.

Outcome: The Urban County executive committee voted unanimously to adopt the affordable housing RFP, contingent on HUD funding.

Budget Tracking for Homebuyer Program

Last year, the Urban County approved an increase in the maximum amount that could be allocated to a homebuyer – through its HUD-funded programs – from $47,500 to $60,000, with the condition that the additional $12,500 be used for energy efficiency measures and green construction. OCD staff and its contractors have been tracking the spending of that $12,500 for each project. They’ve encountered some unexpected “weird” issues, Hall said – for example, if energy-related items are donated to groups like Habitat for Humanity, it’s challenging to account for that, since it’s not an expenditure.

With the new mandatory green construction standards, this tracking would need to occur for all projects, Hall said, and would become a burden. So the staff was requesting that the $60,000 maximum be retained and that the energy efficiency measures and green construction standards be met, but that the separate tracking requirement to account for the $12,500 in expenditures be eliminated.

Outcome: The Urban County executive committee voted unanimously to eliminate the $12,500 budget tracking requirement for its homebuyer program.