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5.4 Resolution 22-8036 Moderate Income Housing GrantCITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: 3 5 Community & Development BY. ITEM Services FINAL APP VAL: NO: 3.1 4 Pae I 9 BY: Director. Lauren Driscoll BY: ITEM: Resolution 22-8036 A resolution accepting and approving a grant agreement with the Kansas Housing Resources Corporation (KHRC) for the 2021 Kansas Moderate Income Housing (MIH) grant program and authorizing the Mayor to execute the grant agreement and associated implementation and administrative documents. BACKGROUND: The City of Salina in partnership with South View Estates LLC applied for a MIH Grant on September 27, 2021 pursuant to Resolution No. 21-7986 as adopted by the City Commission on September 13, 2021. The City has been awarded $400,000 by KHRC for Phase I of the South View Estates (also known as the Ryan Addition plat) Residential Housing Project. The City was informed on Friday, December 17, 2021 of the MIH award and told to anticipate a forthcoming Grant Agreement and Administration Requirements. The City received the Grant Agreement on January 31, 2022, conducted a mandatory Pre -Construction Meeting virtually on February 2, 2021 and received the remaining Administration Requirements on Februarty 7, 2022. In order to move forward with the grant award staff has prepared for the City Commissions' review and action Resolution No. 22-8036. This resolution accepts and approves the grant agreement with the Kansas Housing Resources Corporation (KHRC) for the 2021 Kansas Moderate Income Housing (MIH) grant program and authorizes the Mayor to execute the grant agreement and associated implementation and administrative documents. Program Details The State of Kansas' Moderate Income Housing (MIH) program serves the needs of moderate -income households that typically don't qualify for federal housing assistance. MIH grants are awarded to cities and counties with populations fewer than 60,000 people. The shortages of safe, affordable housing has the greatest impact on Kansas's rural communities. In smaller communities across the state, the lack of housing is creating challenges in attracting and retaining residents. While employment opportunities are plentiful in many communities, housing options are not. The MIH program is designed to address these challenges. Salina meets the minimum requirements to apply and most certainly reflects the need for housing the program is meant to address. For maximum statewide impact, KHRC limits funding awards to no more than $400,000 per awardee. Funding for the program comes from the State Housing Trust Fund. Prior to this application, Salina has never applied for an MIH grant, it was considered in 2016 but the application was never submitted because the project did not move forward. Awarded funds will be used for the construction 36 units of owner occupied housing. MIH grant require a minimum of 24 homes out of the 36 proposed be completed and sold in compliance with all MIH rules and restrictions between 60 and 150 percent of HUD's FY2021 income ranges) as stated in Kansas CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: 3 Community & Development BY: ITEM Services FINAL APPROVAL: NO: 3.1 Page 2 BY: BY: House Bill No., K.S.A. 2017 Supp. 74-8959, including accessibility requirements of K.S.A 58-1401 et seq. GRANT AGREEMENT: The grant agreement is between the Kansas Housing Resources Corporation (KHRC) and the City of Salina. The grant agreement defines the roles and responsibilities associated with the acceptance and management of the grant. This includes necessary documentation, timelines and dates, reporting requirements, and financial assurances and procedures. The Grant Agreement is attached. Completion of the grant agreement for KHRC requires, South View Estates to participate in the pre - construction meeting and submit a Site Review Attestation including a preliminary environmental assessment. On a monthly basis South View Estates is responsible for providing a monthly progress update including photos of the previous 30 day progress and a plan for the next 30 days of progress. GRANT ADMINISTRATION: After the grant agreement with the Kansas Housing Resources Corporation (KHRC) is signed and accepted, staff along with KHRC can begin to administer the grant. Grand Administration will happen in several steps: 1. Grant Funds & Disbursement • KHRC will allocate $400,000 for eligible activates to be paid to South View Estates LLC through reimbursement. • The City will assist the state in administering these funds to South View Estates LLC as required. 2. Eligible Activities • Infrastructure and construction of 36 townhomes and detached single family units for homeownership; 24 of which must be committed to the MIH project and sold to MIH qualified buyers. • Construction of this development shall begin by July 1, 2022, unless the grantee requests and obtains prior written approval from KHRC. 3. Compliance with Regulations • Grantee shall ensure compliance with all MIH rules and restrictions, as well as other governing laws, including the accessibility requirements of KSA 58-1401 et seq. when applicable, and the 2018 International Energy Conservation Code. 4. Manage Monthly Reporting • A progress report must be submitted monthly to KHRC. • The City will work with South View Estates LLC to ensure the report is completed and submitted to KHRC in a timely manner. None of the requirements identified in the MIH grant agreement or other associated documents supersede or nullify the requirements of the Development Agreement entered into by South View Estates LLC with the City of Salina for the formation of and participation in an RHID district. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: 3 Community & Development BY. ITEM Services FINAL APPROVAL: NO: 3.1 Page 3 BY. Director. Lauren Driscoll ° BY: FISCAL NOTE: The MIH grant requires no matching funds Some staff time will be needed to administer this grant. Staff anticipates 5 to 10 hours a month for the duration of the project. COMMISSION ACTION OR RECOMMENDED ACTION: Staff has identified the following options for the City Commission's consideration: 1.) Approve Resolution No. 22-8036 approving a grant agreement with the Kansas Housing Resources Corporation (KHRC) for a 2021 Kansas Moderate Income Housing (MIH) Program Grant and authorizing the Mayor to execute the grant agreement and associated implementation and administrative documents. 2.) Approve Resolution No. 22-8036 with amendments as the City Commission deems appropriate. 3.) Postpone consideration of Resolution No. 22-8036 to a specified date and time and provide staff direction regarding additional information or amendments the City Commission would like to request for their further consideration. 4.) Decline to approve Resolution No. 22-8036 resulting in the City of Salina not approving a grant agreement with the Kansas Housing Resources Corporation (KHRC) for a 2021 Kansas Moderate Income Housing (MIH) Program Grant and authorizing the Mayor to execute the grant agreement and associated implementation and administrative documents. Staff recommends Option #1. Attachments: 1. Resolution No. 22-8036 (DRAFT) 2. Grant Agreement 3. Grant Award Letter 4. MIH Application Resolution No. 21-7986 CC: 1. South View Estates LLC RESOLUTION NUMBER 22-8036 A RESOLUTION ACCEPTING A GRANT AND APPROVING A GRANT AGREEMENT WITH KANSAS HOUSING RESOURCES CORPORATION (KHRC) FOR THE 2021 KANSAS MODERATE INCOME HOUSING GRANT PROGRAM, AUTHORIZING THE MAYOR TO EXECUTE THE GRANT AGREEMENT, AND AUTHORIZING THE CITY MANAGER TO DIRECT ANY ADMINISTRATIVE ACTIONS AND EXECUTE ANY DOCUMENTS NECESSARY TO IMPLEMENT THE TERMS OF THE AGREEMENT. WHEREAS, on July 12, 2021 the City Commission adopted Resolution No. 21-7970 adopting the Live Salina Plan -2021 Supplement and supporting its implementation; WHEREAS, the Live Salina Plan -2021 Supplement recommends increased housing and adoption of a housing economic incentive policy to encourage new developments and infill housing opportunities; WHEREAS, On July 19, 2021 the City Commission adopted Resolution No. 21-7971 creating a Housing Economic Incentive Policy that included Rural Housing Incentive Districts ("RHID") as an economic incentive tools to encourage residential development; WHEREAS, on May 3, 2021 the City Commission heard a request from South View Estates LLC to form an RHID, waive building permit fees, and assist with submitting a Moderate Income Housing ("MIH") grant application on behalf of the a housing development to be located in the Ryan Addition; WHEREAS, on May 3, 2021 the City Commission took the first step in the RHID process by adopting and sending to Kansas Department of Commerce Resolution No. 21-7955 establishing the need for housing within the City and setting forth the legal description of real property within the Ryan Addition proposed to be designated as a Rural Housing Incentive District within the City, as follows: Lots 1 through 26, Block 2, Lots 1-10, Block 3, Lots 1 through 26, Block 4, and Lots 1 through 13, Block 5, in the Ryan Addition to the City of Salina, Saline County, Kansas (the "Real Property"); WHEREAS, The Kansas Department of Commerce approved the formation of an RHID in Salina, acknowledged receipt of Resolution No. 21-7955, and concurred with the City's findings that a shortage of affordable single family housing exists within the city and that the shortage can be expected to persist; WHEREAS, on July 26, 2021 the City Commission adopted Resolution No. 21-7972 declaring the intent to establish within the City an RHID within the boundaries of the Real Property referred to as the South View Estates Rural Housing Incentive District (the "South View Estates RHID") and establishing the date and time for public hearing; WHEREAS, on October 18, 2021 the City Commission adopted Ordinance No. 21-11090 creating the South View Estates RHID and approving the plan for development of housing and public facilities in the RNID; WHEREAS, also on October 18, 2021 the City Commission adopted Resolution No. 21-7994 which waived the residential building fees associated with the activities of the South View Estates RHID development plan; WHEREAS, the Kansas Housing Resources Corporation ("KHRC") manages the MIH grant program to address the shortages of safe, affordable housing and infrastructure in Kansas communities with populations fewer than 60,000 people; WHEREAS, on September 13, 2021 the City Commission adopted Resolution No. 21-7986 authorizing the City to apply for an MIH grant in partnership with South View Estates LLC in the amount of $400,000 for the South View Estates RHID (the "Application"); WHEREAS, the City was notified of an award up to $400,000.00 by letter from KHRC dated December 17, 2021 for the South View Estates RNID, subject to certain conditions set forth in the letter. BE IT RESOLVED by the Governing Body of the City of Salina, Kansas: Section 1. The City accepts the Grant of up to $400,000 ("Funds") for use solely for reimbursement of the actual cost of Eligible Activities as set forth in the Application approved by KHRC. Section 2. The City approves the terms and conditions of the Grant as set forth in the Grant Agreement proposed by KHRC and authorizes the Mayor to execute the Agreement. Section 3. The City Manager or the City Manager's designee is authorized to direct any administrative actions and execute any documents necessary to implement the terms of the Grant Agreement. Section 4. The City Clerk is directed to file and retain the original agreements according to the City of Salina Records Management Policy. Section 5. This resolution shall be in full force and effect from and after its adoption. Adopted by the Board of Commissioners and signed by the Mayor this 21 s` day of March, 2022. Trent W. Davis, M.D., Mayor (SEAL) ATTEST: JoVonna A. Rutherford, City Clerk GRANT AGREEMENT THIS GRANT AGREEMENT ("Agreement") is made by and between the City of Salina, Kansas, ("Grantee"), 300 W. Ash St Room 205, Salina, Kansas 67401 and Kansas Housing Resources Corporation, 611 South Kansas Avenue, Suite 300, Topeka, Kansas 66603 ("KHRC") this 315' day of January, 2022. WHEREAS, KHRC is a non-profit public corporation responsible for administering Federal and State housing programs, as well as the State Housing Trust Fund ("SHTF"); WHEREAS, the Kansas Legislature passed and the Governor signed Senate Substitute for Substitute for HOUSE BILL No. 2231 ("Bill") which provided $2 million to the SHTF administered by KHRC to be used for the purpose of loans or grants to cities or counties for infrastructure or housing development in rural areas; WHEREAS, utilizing the funds provided under the Bill to the SHTF, KHRC issued a Kansas Moderate Income Housing ("MIH") Request for Proposal ("RFP") in July of 2021; WHEREAS, Grantee requested MIH funds for proposed eligible activities through an application dated September 27, 2021 which is hereby incorporated by reference herein ("Application"), and which was relied upon by KHRC in entering into this Agreement; and WHEREAS, KHRC's Loans and Grants Committee at its December 6, 2021 meeting approved a grant totaling $400,000 for Grantee's proposed eligible activities set forth in its Application ("Eligible Activities'). NOW THEREFORE, in consideration of the promises and covenants set forth herein, the parties do mutually agree as follows: Grant Funds. KHRC hereby allocates Grantee up to $400,000 ("Funds") for Eligible Activities. 2. Use of Grant Funds. Grantee shall use the Funds solely on the Eligible Activities, as set forth in the Application approved by KHRC, and Grantee agrees as follows: a. Infrastructure and construction of 36 multi- and single family units for homeownership. b. Construction of this development shall begin by July 1, 2022, unless Grantee requests and obtains prior written approval from KHRC. c. A minimum of 24 MIH homeownership units are committed to this development/project. Page 1 of 4 d. The representations and commitments made in the Application are all hereby incorporated herein and remain a continuing representations and obligations of the Grantee. 3. Leveraae Commitment. In addition to the Funds provided by KHRC, Grantee shall provide leveraged funds towards the costs of the Eligible Activities as set forth in the Application. 4. Disbursement of Grant Funds. Grantee shall use its usual procurement processes for bidding out each portion of the Eligible Activities. As development costs are incurred, Grantee may make request to KHRC for a lump sum or partial payment from the Funds. With any request, Grantee agrees to provide documentation of such costs, as well as evidence that the leverage commitment in the Application is being used in the funded Eligible Activities. Grantee shall provide requests for payment in the form required by KHRC, and Grantee shall include with the request the KHRC required forms and any supporting documentation required by KHRC. Requests shall be made to the attention of Abigail Phillips, who may be reached as follows: Abigail Phillips, HOME -ARP Program Manager E-mail: APhillips@kshousingcorp.org Phone: 785-268-8135 KHRC reserves the right to request additional documentation or information, in its sole discretion, prior to disbursement of Funds, and Grantee agrees to promptly respond to all requests. 5. Compliance with Regulations. Grantee shall ensure compliance with all MIH rules and restrictions, as stated in the Bill and the RFP, as well as other governing laws, including the accessibility requirements of KSA 58-1401 et seq. when applicable, and the 2018 International Energy Conservation Code. Prior to making any modifications to the Eligible Activities as set forth in the Application, Grantee shall obtain written approval from KHRC. If Grantee is using the Funds for single family housing development or assistance, Grantee shall also enact and monitor a recapture provision as explained in the RFP. 6. Proaram Income. Grantee agrees to use any income derived from or generated by the Eligible Activities, regardless of when the income is received, solely for housing purposes in accordance with the RFP. 7. Reporting. Beginning with the first business day of the month following the award being made to Grantee and continuing each month thereafter, Grantee shall submit in writing monthly status reports to KHRC until all Eligible Activities are completed and all Funds have been expended. Grantee agrees that each status report should detail the use of Funds to date, along with a self-assessment comparing that use with the Grantee's proposed use from its Application to KHRC. Page 2 of 4 The status report should include an evaluation of the Eligible Activities to date as well as the status of construction and the nature and reasons for any changes in the Eligible Activities. A monthly status report should be filed even if there has been no progress or activity from the previous month. Within 60 days following completion of the Eligible Activities and expenditure of all Funds, Grantee shall submit a final accounting to KHRC using KHRC forms. Said accounting shall include details such as the use of any income generated from the Eligible Activities. Should KHRC have any questions regarding a status report or should there be any deficiency in a status report, Grantee agrees to provide any additional information requested by KHRC, or to correct its report as needed, within seven (7) days of any request from KHRC. 8. Compliance Monitoring. When Funds are used in the development of rental housing, either directly or indirectly, Grantee shall ensure that tenants are initially qualified with gross incomes within the established MIH ranges as outlined in the RFP. Grantee agrees to follow a consistent method and procedure to certify tenants and verify that incomes are within the MIH ranges as set forth in the RFP and shall provide KHRC with documentation of the procedures followed upon KHRC's request. Tenants need not be recertified once they are initially qualified. This process will be used for the first five years following completion of the development whenever a new tenant enters the property. At the end of the fifth year, there shall be no further qualification procedures. When Funds are used for home ownership opportunities, either directly or indirectly, Grantee agrees to follow a consistent method and procedure to certify tenants and verify that incomes are within the MIH ranges as set forth in the RFP and shall provide KHRC with documentation of the procedures followed upon KHRC's request. There will be no certification required for subsequent purchasers of the subject real estate when the first purchaser was qualified under the MIH guidelines. However, the Grantee shall, when transferring the subject real estate to the initial purchaser, record a deed restriction on the subject real estate limiting the profit that can be achieved whenever such home is sold within a five year period of its initial occupancy. The Grantee agrees that the restriction shall require a declining refund of any profit payable to the Grantee in increments of ten percent annually. At the end of the fifth year of occupancy, the deed restriction shall be lifted and there shall be no restriction on the profit achieved by the sale of the home. 9. Noncompliance by Grantee. Noncompliance with the RFP, this Agreement, or any other reasonable requirements of KHRC, shall result in penalties to the Grantee in KHRC's discretion, including but not limited to recapture of funds, loss of eligibility for future funds and/or termination of this Agreement. 10. Rescission/Unavailability of Funds. Grantee understands that the RFP and Grantee's award is funded in whole or in part by State of Kansas funds Page 3 of 4 provided through the Bill. In the event the State funds supporting this Agreement become unavailable, are reduced, or rescinded, KHRC may terminate or amend this Agreement without penalty and will not be obligated to pay the Grantee from any other sources, including KHRC, SHTF, or State of Kansas monies. 11. Miscellaneous. The descriptive headings of this Agreement are for convenience only and shall not be deemed to affect the meaning of any provision. This Agreement may be modified only by the mutual written agreement of the parties. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement shall not be affected and each provision of this Agreement shall be enforced to the fullest extent permitted by law. The failure of KHRC to exercise any of its rights or responsibilities under the Bill or this Agreement shall not constitute a waiver of the right to exercise the same or any other option at any subsequent time in respect to the same or any other event. This Agreement constitutes the entire agreement of the parties and supersedes all other prior written or oral contracts between the parties with respect to the subject matter hereof. Grantee shall not transfer or assign all or any of its rights, obligations or benefits under this Agreement without the prior written approval of KHRC, which approval may be withheld in KHRC's sole and absolute discretion. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized official or officers on the date first indicated. GRANTEE: 0 Date: KANSAS HOUSING RESOURCES CORPORATION By: RYAN VINCENT, EXECUTIVE DIRECTOR Date: Page 4 of 4 KANSAS HOUSING P,,.U,CFS ,.R,.,AT,,. December 17, 2021 Ms. Lauren Driscoll City of Salina 300 W. Ash St. Room 205 Salina, KS 67401 Re: Kansas Moderate Income Housing Application Dear Ms. Driscoll, As administrator of the Kansas Moderate Income Housing (MIH) Program, Kansas Housing Resources Corporation (KHRC) would like to offer your City $400,000 for the development you proposed. This award is conditioned on and subject to the following: 1. Providing the following information: a. A pre -construction energy audit of at least one unit. b. A copy of an environmental report. A Phase I environmental report if required by the lender or others, otherwise the enclosed form can be used; 2. Commitment to a pre -construction conference with KHRC staff and the applicant, developer and contractor; 3. Execution of and compliance with a grant agreement; and 4. Compliance with all rules and requirements of the MIH Program, as more fully identified in its enabling legislation and the 2o21 Kansas Moderate Income Housing Program Request for Proposal. KHRC reserves the right to require additional conditions as deemed necessary. If you have any questions you would like to discuss please contact me or Haley Hishmeh, the Housing Development Coordinate at HHishmeh@kshousingcorp.org. Our office looks forward to working with your community to address moderate income housing needs in Kansas. Sincerely, Alissa Ice Director of Housing Development 785-217-2036 Alce@a kshousingcorp.0rg 765-217-2001 1 KSHOUSINGCORP.ORG 1 611 S. KANSAS AVENUE, SUITE 3001 TOPEKA, KANSAS 66603 RESOLUTION NUMBER 21-7986 A RESOLUTION AUTHORIZING THE PREPARATION AND SUBMITTAL OF AN APPLICATION TO THE KANSAS HOUSING RESOURCES CORPORATION (KHRC) FOR THE 2021 KANSAS MODERATE INCOME HOUSING GRANT PROGRAM. 6 W WHEREAS, the Kansas Moderate Income Housing (MIH) Program authorizes any city R incorporated in accordance with the laws of the State of Kansas (the "State") with a population of less than 60,000 to apply for loans or grants to cities for infrastructure or housing development in a areas that do not qualify for federal housing assistance; and 8 WHEREAS, the City has an estimated population of less than 60,000 and, therefore, constitutes an eligible city as said term is defined by the MIH program; and WHEREAS, this MIH application is being prepared in partnership with South View Estates, LLC; and WHEREAS, South View Estates LLC is currently working with the City to create a Rural Housing Incentive District (RNID) over the Ryan Addition subdivision; and WHEREAS, the Ryan Addition RHID will contain 106 units of single family owner - occupied homes and townhomes for moderate income families; and WHEREAS, the governing body of the City of Salina, Kansas (the "City") adopts this resolution making certain findings as the basis for the City's application for and participation in the MIH program; SO NOW THEREFORE, BE IT RESOLVED by the Governing Body of the City of Salina, Kansas: SECTION 1. The governing body hereby finds and determines that there is a shortage of quality housing of various price ranges in the City despite the best efforts of public and private housing developers. SECTION 2. The governing body hereby finds and determines that the shortage of quality housing can be expected to persist and that additional financial incentives are necessary in order to encourage the private sector to construct or renovate housing in the City. SECTION 3. The governing body hereby finds and determines that the shortage of quality housing is a substantial deterrent to future economic growth and development in the City. SECTION 4. The governing body hereby finds and determines that the future economic well-being of the City depends on the governing body providing additional incentives for the construction of quality housing in the City. II SECTION 5. The Governing Body hereby authorizes the preparation and submittal of an application for the 2021 Moderate Income Housing Program to the Kansas Housing Resources Corporation. SECTION 6. That this resolution shall be in full force and effect from and after its adoption. Adopted by the Board of Commissioners and signed by the Mayor this 130' day of September, 2021. ti w Mellissa Rose Hodg , Mayor 5 (SEAL) ATTEST: i 11 City