11-13-2000 Council Packet - Laserfiche WebLink

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w • > ki REQUEST FOR COUNCIL ACTION NOV U ^ DATE: Nov^\)\r^f, 2000*^ ITEM NO:II Department Approval: Name RonMoorse Title City Administrator Administrator Reviewed: 'I \ Agenda Section: City Administrator's Report Item Description: Renewal of the City’s Panicipation in the Livable Communities Program Resolution The City has participated in the Livable Communities Program since 1996. Each year, prior to November 15, it is necessary for the City to adopt a resolution renewing its participation in the program. The City’s participation in the Livable Communities Program makes the City eligible for grant funds for housing development, cleanup of polluted sites for business and housing development, and mixed use development. The City recently received a livable communities grant as partial funding for a project to make several townhomes in Navarre aiBfordable to low and moderate income families. As part of the City’s participation in the Liveable Communities Program, it agrees to provide a certain amount of local funding to support or assist the development of affordable or life cycle housing, or to maintain or preserve such housing. This local funding amount is the City’s ALHOA “affordable and life cycle housing opportunities amount’’. The ALHOA amount is based on a calculation of the amount of market value being added to the City’s tax base by the development of high valued homes. The concept is that cities that are building substantial numbers of homes with high values are substantially increasing tax capacity, and a small percent of this tax capacity should be put towards supporting affordable and life cycle housing. The City’s ALHOA amount has been around $20,000 to $25,000 per year. The City has satisfied this requirement through its participation in a group of cities who use a pool of CDBG fund to support and assist affordable and life cycle housing. Because the City is building very high valued homes, the City’s ALHOA amount has increased to $81,742.34 for 2001. The City will not have a problem meeting this requirement in 2001 because the City will be using this amount of grant funds for the Navarre affordable townhouse project in 2001. However, if this amount is the same or significantly larger in 2002, it could be very difficult for the City to participate in the Liveable Conununities Program. There are two potential solutions to this problem. First, the Association of Metropolitan Municipalities is working with the Metropolitan Council and Legislature to change the ALHOA requirement, which could make it less onerous. Secondly, the City is in the earliest stages of considering the use of tax increment financing to assist a senior housing project. The tax increment financing assistance could be sufficient to meet the City’s ALHOA requirement.