City lays down financial structure for rental rehab projects ahead
In its quest for affordable housing, Hastings is putting policies in place to make way for the city’s 118 E. Court St. project.
On Dec. 23, the city council moved to accept — if it’s approved by the Michigan Economic Development Corp. — funding not to exceed $400,000 for the project to rehabilitate and develop downtown commercial space for residential apartments.
The council had adopted a resolution for the application at its June 24 meeting.
To comply with state requirements, the council adopted a policy last week that will allow the city to receive funds for Community Block Development Grant Rental Rehab projects.
“We don’t know if it’s going to be awarded yet,” City Manager Jerry Czarnecki said. “But, if they do, the city is going to be the fiduciary. That’s how it works.”
The council’s action not only establishes a financial structure for the Court Street project, it puts policies in place for future rental rehab projects in the city, Czarnecki said.
“As part of the process for this project, the City must adopt a Section 3 Policy that states that the City of Hastings will provide opportunities to low- and very low-income persons residing in the local unit and will ensure that Section 3 is followed when required by a grant,” he advised council members.
The MEDC also allows local governments to acquire the assistance of a certified grant administrator through an approved request for proposal (RFP) process. Three responded.
Out of a possible 210 points, the three were scored as follows: Marilyn Smith of Smith Housing Consulting, 196; Revitalize LLC, 145; and Emily Pantera, 97.5.
At its meeting last week, the city chose Smith Housing Consulting in Hastings for the Court Street project.
According to Community Development Director Dan King, “Not only did Marilyn score the high point total of all the respondents, she has also administered several other successful rental rehab projects for the city in the past.
“Funding for the grant administrator is included in the grant expenses and reimbursed from CDBG funds. The city will also be reimbursed for front administration expenses of up to $6,250 from the grant and the owner’s equity contribution to the project.”
The Court Street property is owned by Marv Helder.
The Section 3 Policy, as adopted by the council, dictates that the city of Hastings “shall provide opportunities to low- and very low-income persons residing in their local unit of government … Accordingly, the City of Hastings shall implement policies and procedures necessary to implement this policy covering all procurement contracts where labor and/or professional service are provided. … and contractors who install materials and equipment.”
Section 3 is a provision of the Housing and Urban Development Act which recognizes that HUD funds are typically one of the largest sources of federal funds expended in communities, in the form of grants, loans, entitlement allocations and other forms of financial assistance.
The policy is intended to ensure that, when employment or contracting opportunities are generated because a covered project necessitates the employment of additional persons or the awarding of contracts for work, those opportunities must be posted in the community where residents will see them and preference must be given to low- and very low-income persons or business concerns in the community where the project is located.
To meet the goals to provide training, employment and contracting opportunities, contractors must choose employees according to the following priority: Residents of the development where the work is to be performed are the first priority; residents of the neighborhood where the work is being performed are second priority; other residents of the neighborhood who are participants in HUD-Youthbuild or other federal, state or local job programs being carried out in the city of Hastings or Barry County are third priority; and other residents in the project neighborhood who meet the definition of Section 3 residents are fourth priority.
According to the city’s policy as adopted, all contractors must seek low- or very low-income persons residing in the city of Hastings or Barry County for 30 percent of all new hires. When applicable, the contractor must show evidence of seeking project residents for 15 percent of the new hires.
However, with regard to employment or contracting, nothing in the policy “shall be construed to require the employment or contracting of a Section 3 resident or contractor who does not meet the qualifications of the position to be filled or who cannot perform the contracts,” it states.
The policy also dictates handling of competitive bids and compliance with training, hiring and contracting requirements.
Every contractor on these rental rehabilitation projects will have to sign an agreement with the city that includes a reference to the Section 3 Policy statement.
The council’s approval of the policy allows the city to receive funds not only for the Court Street project, but other future projects as well, Czarnecki said.
In other business:
• New Year’s celebration events are set. Mayor Dave Tossava will begin the countdown for the midnight sound and light display at the 11th annual Ball Drop downtown.
• On Dec. 17, the police department gave away 20 turkey dinners to families; on Dec. 19, the police department gave away at least $500 in gasoline to help people during the holidays.
• The police department handled 526 complaints in November, including 13 traffic accidents, two involving injury and 11 involving property damage; issued 37 tickets, including 11 for moving violations; and made a total of 43 arrests.
• City employee Eric Ingram will be retiring in January; a Jan. 10 open house/lunch is planned in his honor from noon to 2 at the Department of Public Works bus garage.
• In January, the city will begin its budgeting process. The council will be provided with a proposal of common operation procedures and goals from last year’s goals and objectives documents. This will be the focus of a goal-setting workshop on Jan. 27.