CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: March 11, 2009
SUBJECT/TITLE: Appropriation of Rental Rehab Funds for Growth Management Positions Transfers for Enhanced Code Enforcement
TARGET ISSUE:

STATEMENT OF ISSUE
On January 28, 2009, the Office of Budget and Policy presented the Mid-Year Update on the FY2009 Budget to the members of the City Commission. The City Commission voted 4-0 to approve the reassignment of three positions from the Growth Management Department into the Economic & Community Development Department to perform enhanced Code Enforcement activities.

In the January 28 agenda item, OBP recommended the use of Community Development Block Grant (CDBG) funds to support the three positions being transferred to the Code Enforcement Division. Upon further research and discussion of the issue, another source of funding, less restrictive than CDBG, was identified to support the three positions. The use of unrestricted Rental Rehabilitation dollars from Fund 104 can be used to enhance the Code Enforcement activities throughout the City and will not restrict the physical areas that can be targeted for coverage. Use of the CDBG funds will limit Code Enforcement activities to only approved deteriorated areas identified in the HUD approved Annual Action Plan. Using CDBG will also require a mid-year amendment to the FY2009 Annual Action Plan. This would require notice to the public, a public hearing and approval from the Jacksonville Department of Housing and Urban Development (HUD) Office.

In order to facilitate an expeditious and seamless transfer of the three Growth Management positions to support enhanced Code Enforcement activities, staff is recommending using Rental Rehab funds in Fund 104. These funds will cover these personnel and operating expenses for the remainder of the 2009 fiscal year. This action will allow staff to include the three time-limited Code Enforcement positions in the normal process of developing the HUD 2010/11 Annual Action Plan and will allow CDBG funds to be used to support these positions in the upcoming fiscal year. Utilizing these$125,000 of these funds to fund these positions, and also the funding of a pending $60,000 loan request, will leave an appropriated balance of $215,000 for the purposes of rental rehabilitation.

Recommended Action
Approve Option 1: Appropriate $125,000 from Fund 104 to set up a work order for enhanced Code Enforcement activities for three time-limited Code Enforcement Officer positions through fiscal year 2009.

FISCAL IMPACT
The current balance in Rental Rehabilitation Fund 104 is $209,100 as of 12/31/08. After funding the pending $60,000 Rental Rehabilitation Loan request, there will be a remaining balance of $149,100. An appropriation of $125,000 for enhanced Code Enforcement activities and personnel and operating expenses for three time-limited positions will leave a balance of $24,100 in this fund. In addition to the Account #104 funding, $190,900 Affordable Housing Trust funding was also approved as part of the 2007-2008 Annual Action Plan for Rental Rehabilitation. This leaves a Rental Rehab program balance of $215,000. The Office of Budget and Policy has reviewed and concurs with this agenda item.

Thomas H. Lewis, Economic & Community Development

Anita Favors Thompson, City Manager

For information, please contact: Joyce Martinez, Housing, 891-6526.

 

HISTORY/FACTS & ISSUES
On January 28, 2009, the Office of Budget and Policy presented the Mid-Year Update on the FY2009 Budget to the members of the City Commission. The City Commission voted 4-0 to approve the reassignment of three positions from the Growth Management Department into the Economic & Community Development Department to perform enhanced Code Enforcement activities.

In the January 28 agenda item, OBP recommended the use of CDBG funds to support the three positions being transferred to the Code Enforcement Division. Section 570.202C of the CDBG regulations authorizes as an eligible use “Costs incurred for inspection for code violations and enforcement of codes (e.g., salaries and related expenses of Code Enforcement inspectors and legal proceedings, but not including the cost of correcting the violations) in deteriorating or deteriorated areas when such enforcement together with public or private improvements, rehabilitation, or services to be provided may be expected to arrest the decline of the area.” HUD guidelines require that the City determine which national objectives apply; documentation of the specific boundaries of the areas to be considered eligible for CDBG-funded code inspections, a documented strategy for using Code Enforcement, together with other activities to arrest the decline in each area, and documentation that provides a sufficient description of the conditions in each area to support a determination that the area qualifies as a deteriorating or deteriorated area under the City’s definition of “deterioration”. All of this information must be presented as an amendment to the City’s current HUD Annual Action Plan. That amendment process requires a review by the Community Improvement Advisory Committee, a public notice and comment period, and final adoption at a public hearing. Since all of these actions must take place prior to the use of CDBG funds to support the code enforcement positions, much of the anticipated current year budget savings will not be realized using this strategy.

Following further discussion of the issue and with additional research, another source of funds was identified to support the three transferred positions, allowing appropriate time for the employees to acquire Code Enforcement training and to begin the process for achieving the necessary certification as Code Enforcement Officers. The use of Rental Rehabilitation dollars from Fund 104 can be used to enhance the Code Enforcement activities throughout the City and will not restrict the physical areas that can be targeted for coverage. Use of the CDBG funds will limit Code Enforcement activities to only approved deteriorated areas identified in an amended Annual Action Plan in FY2009 requiring several layers of approval and review from the CIAC, the City Commission, Federal Government and a public hearing.

The Rental Rehabilitation budget in Fund 104 is the residual balance of funds from a federal housing program that was discontinued in 1991. These funds can be used at the City’s discretion. These funds have been primarily used for loans to rehabilitate affordable housing. As part of the 2007-2008 Annual Action Plan the City allocated $190,900 from the Affordable Housing Trust Funds to the Rental Rehabilitation Program for a total budget of $400,000. There is a pending loan approval recommendation that would allocate $60,000 for a rental rehabilitation project. The recommended action, coupled with the $60,000 loan recommendation, will leave a balance of $215,000 which, given the historical demand for the program, should be sufficient to address anticipated loan requests.

In order to facilitate a seamless transfer of the three Growth Management positions to support enhanced Code Enforcement activities, staff is recommending the appropriation of the Rental Rehab Funds to cover personnel expense for the remainder of the 2009 fiscal year. This action will allow staff to complete and submit the 2010 Annual Action Plan, which will include the three time-limited Code Enforcement positions that will be funded with CDBG funds for fiscal year 2010.

CHARITABLE CONTRIBUTIONS
N/A

OPTIONS

Option 1: Appropriate $125,000 from Fund 104 to set up a work order for enhanced Code Enforcement activities and personnel & operating expenses for three time-limited Code Enforcement Officer positions through fiscal year 2009.

Pro:
• This action will facilitate a seamless process to quickly transfer the three Growth Management positions into an enhanced Code Enforcement program and will not require an amendment to the currently approved 2008/09 HUD Annual Action Plan.
• Will allow staff the time to develop the specific documents required by HUD to justify the enhanced Code Enforcement activities and positions for 2010 Annual Action Plan without requiring a mid-year amendment and or delay in the position transfers.
• Will allow transferred staff sufficient time to get training and required certification as Code Enforcement Officers.
• Will allow enhanced Code Enforcement activities to occur throughout the entire City for the remainder of fiscal year 2009, and their activity would not be restricted to specified deteriorated areas as required by CDBG guidelines.

Con:
• This will reduce rental rehabilitation funding by $125,000, leaving an uncommitted balance of $215,000 in the Rental Rehabilitation Program.

Option 2: Do not approve the appropriation of funds from the Rental Rehabilitation Fund, direct staff to amend the current Annual Action plan following HUD guidelines, and schedule a public hearing for March 25.

Pro:
• $125,000 from the Rental Rehabilitation Fund would still be available for rental rehab projects.

Con:
• Implementation of the position transfers cannot occur as quickly as needed or before all HUD regulations are met and approved.
• Enhanced Code Enforcement activities will be limited to specifically identified deteriorated areas as defined in the amended annual action plan.

ATTACHMENTS/REFERENCES
None.