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HomeMy WebLinkAbout2018-07-24 - Minutes -Council Member Adella Gray Ward 1 Position 1 Council Member Sarah Marsh Ward 1 Position 2 Council Member Mark Kinion Ward 2 Position 1 Council Member Matthew Petty Ward 2 Position 2 Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra E. Smith City of Fayetteville Arkansas City Council Special Meeting July 24, 2018 City Council Meeting Minutes July 24, 2018 Page 1 of 34 Council Member Justin Tennant Ward 3 Position 1 Council Member Sarah Bunch Ward 3 Position 2 Council Member John La Tour Ward 4 Position 1 Council Member Kyle Smith Ward 4 Position 2 A special meeting of the Fayetteville City Council was held on July 24, 2018 at 5:30 p.m. in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Mayor Jordan called the meeting to order. PRESENT: Council Members Adella Gray, Sarah Marsh, Mark Kinion, Matthew Petty, Justin Tennant, Sarah Bunch, John La Tour, Kyle Smith, Mayor Lioneld Jordan, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience. Pledge of Allegiance Mayor's Announcements Proclamations and Reem-mitions: None Cit y Council Meeting Presentations Reports, and Discussion Items: None Agenda Additions: None Consent: None Unfinished -Business: Fayetteville Housing Authority's 2018 Annual Plan and Rolling Five -Year Plan: A resolution to express the City Council's recommendations to Mayor Jordan concerning the Fayetteville 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 2 of 34 Housing Authority's 2018 Annual Plan and Rolling Five -Year Plan. At the July 17, 2018 City Council meeting this resolution was added as an agenda addition then tabled to the August 7, 2018 City Council meeting. Mayor Lioneld Jordan called a Special City Council meeting for July 24, 2018 to hear this item. It will be removed from the table on July 24, 2018. Mayor Jordan: Over a year ago we talked about the process that the Fayetteville Housing Authority had undergone and its planning for the maintenance of Willow Heights and possible transition to Morgan Manor apartments. I objected to the process then and continue to receive feedback that there's not been adequate involvement from affected residents and surrounding community members. I watched the Housing Authority July 9, 2018 meeting and witnessed the many people who came to participate, who contacted me later saying they felt that they had been somewhat disrespected. I continued to hear from many area residents and citizens that they do not believe the Morgan Manor Project is in the best interests of those citizens in need of affordable housing. Having said that, I want it clear tonight, I will never as the Mayor of this city jeopardize capital facilities funds to be used to maintain public housing properties. In order to support the details of the plan, I will continue to point out that the public, community, and City Council should be involved in discussing the plan. That is the purpose of tonight's meeting. On Thursday, city officials received the following statement from a representative of the U.S. Department of Housing and Urban Development (HUD) Little Rock field office. "The Fayetteville Housing Authority (FHA) is not considered at risk losing their 2018 Capital Funds. The funds will be released to the Housing Authority after the HUD Field Office reviews the contents of the PHA Plan and receives the attached form (HUD -50077 -SL), Certification by State or Local Office of PHA Consistency with the Consolidated Plan or State Consolidated Plan. Our office has been informed that Mayor Lioneld Jordan has called a Special City Council meeting for Tuesday, July 24, 2018 at 5:30 PM in Room 219 of the City Administration Building, to discuss the Fayetteville Housing Authority's 2018 Annual Plan and Rolling Five -Year Plan. I want to assure the City Council, public, and Fayetteville Housing Authority that I will not put the HUD funding in any jeopardy. We have managed to get an extension until a week from today. We have a week to take input and the Housing Authority Board has a meeting Thursday night. City Attorney Kit Williams read the resolution. Council Member Marsh stated with the growing housing crisis in the region, we need to ensure we are making the best decisions possible and fully utilizing all resources available to address the housing needs of our most vulnerable citizens and that those citizens are included in the decision- making process. She stated citizens have asked for more public oversite of the Fayetteville Housing Authority and want the opportunity to weigh in on the issue. She stated she read through the Five - Year Plan submitted by the Fayetteville Housing Authority Board. She spoke about reading the Five -Year Plans of the Fayetteville First Plan, Mobility Plan, Energy Action Plan, and Livability 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 3 of 34 Improvements Plan. She stated there's good information in these plans, but the Housing Authority plan does not convey information and it's difficult to ascertain what they are doing, who is doing what, and what the actual plan is. She stated as a public government agency that deals with public tax dollars, there's an accessibility issue. She spoke about the complexity in understanding the proposed plan. She believes the voice of the community is being shut out. She spoke about reviewing the Livability Improvement Plan for Willow Heights housing from the University of Arkansas Communities Design Center. She stated it was a plan she could read and understand. She stated as we move forward, we need to set high standards for our Housing Authority and to go further than meeting the basic needs. She stated this is an opportunity for Fayetteville to be innovative and do better for the residents of the public housing projects, as well as the neighboring community. She spoke about affordable housing being in crisis. Her proposed changes to the resolution included: A. Develop and implement a resident stakeholder engagement plan to increase community education and participation in decision making. B. Refine and further define the goals and objectives of the Fayetteville Housing Authority. Those goals should be specific, measurable, achievable, results focused, and time bound. The next three recommendations come from UACDC report of their recommended action steps. C. Develop and implement an action plan to expand partnerships with public agencies and non -profits. Especially in the areas of storm water and flooding. D. Employ scenario planning to envision the full range of long term operational options and the FHA shall hold that discussion with a qualified facilitator in a workshop format. E. The commission of local developers/architect project team to pursue a low-income housing tax credit application for revitalization of Willow Heights. Council Member Tennant stated he's had a lot of contact with people on this and some think it needs to be torn down and people need to be moved into a proper place. He stated he is for those long-term goals if that's what is decided, but he wants to focus on what can be done right now to make things better. He spoke about the Housing Authority doing the best they can with the resources they have. He spoke about taking a tour of the housing and believes there are some things that need to be changed. Council Member Kinion stated they have the opportunity to look at the Annual Plan and Five - Year Plan to look at the aspect of the plans to be most beneficial to handle the critical needs of public housing. He stated in the Annual Plan for next year there's no mention of two of the most critical properties that need attention, which are Willow Heights and Lewis Plaza. He stated they might want to encourage discussion with immediate action because there are critical needs that need to happen. He spoke about citizens feeling like their voices are being heard. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 4 of 34 Council Member Smith spoke about reviewing documents and thanked Deniece Smiley for assisting him on a facility tour. He thanked the Housing Authority Board for the work they do. He stated he wants to focus on the residents of the facilities and the needs of the community. He stated the plan leaves a lot of questions when dealing with a lot of forms. He stated he liked some of Council Member Marsh's suggestions. Council Member La Tour stated he read the plan and found it incomprehensible and redundant. He stated he agreed with Council Member Marsh's evaluation of the plan, but he may not agree with all her plans. He stated he wants people to be taken care of, but at the same time recognizing there are limited resources available. He stated he wants to adopt a plan as a City Council that is the best for the housing residents and Fayetteville. Mayor Jordan: The main thing we are going to do tonight is make sure $281,000 is not held up for some of the most vulnerable citizens we have. We aren't going to hold up the funding. We have an extension for a week from today. I will have something signed this week. Mayor Jordan gave the rules for public comment. Sharon Davison, 904 East Rodgers Drive spoke about the historical area. She spoke about the profits of developers. Ezra Brashears, Oakland stated he has put in his application to live at the Highrise. He stated a partnership is needed because the scope of the problem is tremendous and it is all about money. He believes things can be worked out. He spoke about poverty levels and average incomes of residents. He spoke briefly about HUD and RAD. Peter Tonnessen, Ward 3: I read the plan and there were duplicate pages and I could not understand it. Is this $281,000 federal money? What impact could there be on the taxpaying citizens of Fayetteville based on what happens in these meetings? City Attorney Kit Williams: It's federal money and I pay federal taxes. It's not city taxes. Peter Tonnessen: If a project is built and three years from now it starts leaking, can there be a liability for the citizen taxpayers of Fayetteville? City Attorney Kit Williams: The property is owned by the Housing Authority, not the city. We don't own any of those properties. It has always been their responsibility and they have operated for many decades. They get their federal funding from HUD, rather than from the city or state. Peter Tonnessen: Are there matching funds from the city? City Attorney Kit Williams: Not that I am aware of. Peter Tonnessen: I'm not hostile to anyone who has fallen on tough times. I'm concerned about the impact on people who pay taxes in this city and that their money be spent wisely. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 5 of 34 Alvin Davis, a homeless person stated there are 600 homeless people on a waiting list to get homes. He spoke about lowering standards when someone has been homeless for three years because of their lack of a credit score. He spoke about criminal records. He requested to know if anything was in tonight's forum to help. Mayor Jordan: We have the Community Development Block Grant. Cassie Stanley, 10 South Willow, 30 C stated her ceiling is falling through, had two floods, and been without water for 48 hours. She voiced her concerns about mold, asbestos, and bad water. She wants everyone to quit attacking each other and come up with a plan to help residents now. Council Member Kinion: Ms. Stanley, I hear you saying there are critical needs in the Annual Plan and Five -Year Plan we must pay attention too. As we look at the plans, we don't see that included and it's a concern. I'm sorry about your situation and hope we can handle that immediately for your safety. Nellie Ashley, 10 South Willow, 29 A spoke about infrastructure concerns of the property. She stated she wants affordable housing and a solution. Mayor Jordan: Do you prefer to live where you are or would you be alright living somewhere else? Nellie Ashley: I would like a clean and safe place. I would prefer to stay. Sarah Champion, 10 South Willow 30 B stated where she lives has provided her with a safe place to get to the next level in life. She spoke about the living conditions at Willow Heights. Tina Waters, 10 South Willow 27 C spoke about the living conditions at Willow Heights and wants something new built. Matthew Ramsey, 93 South Duncan stated he was on the Town & Gown Advisory Committee. He stated he sees issues when it comes to affordable housing, overzealous private development, neighborhood relations, and community complaints not being taken seriously until they evolve into public relations crisis. He stated he is speaking up for the exploited families at Willow Heights. He spoke about his concerns with the Fayetteville Housing Authority Board and Executive Director, Deniece Smiley. He stated the Fayetteville Housing Authority disregarded and silenced the public and residents. Dena Owens, 986 Bob Place stated she agrees with Council Member Marsh. She stated the FHA goals are garbage and not transparent. She requested for the dissolution of the FHA Board. Mayor Jordan: I want to remind everybody that we are working on a resolution as to whether you support the Five -Year Plan or not. Stay on topic. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 6 of 34 Robert Stafford, 123 South University Avenue stated he is against implementing the Five -Year Plan as it is. He stated his appreciation for FHA Board Member, Melissa Terry. He stated the Willow Heights and Lewis Plaza housing units are in a deep state of disrepair. Angela Belford, Ward 4 spoke about the feelings of homelessness. She stated related to the Five - Year Plan, there is an opportunity to increase funding through Housing Choice Vouchers and requested City Council to do so. Council Member Kinion: You are asking us to add to our resolution the request to have the Housing Choice Vouchers and homelessness as a priority? Angela Belford: That is correct. Council Member Kinion: You have specific information on how this is implemented? Angela Belford: Correct. We looked at doing it this year and it was determined the Housing Authority didn't have the capacity now to be able to apply for that funding. We approached them with city officials, as well as a private foundation to be able to help with the grant writing process. Having vouchers today will be difficult, but we have to work all the pieces of the puzzle. If you can specifically prioritize people experiencing homelessness as a portion of the vouchers we receive, then yes, we do have some methodology for taking care of that. Council Member Kinion: Thank you for bringing this to our attention to help our community Council Member Petty: You brought forward an opportunity for grant writing? Angela Belford: Yes, an opportunity for assistance in writing the grant. Council Member Petty: What was the result of that offer? Angela Belford: It was determined that the Housing Authority did not currently have staff capacity to be able to manage additional vouchers. Council Member Smith: In your experience with other programs like that, are there additional ways to fund extended capacities so if they have those vouchers they could add a staff person to manage them? Angela Belford: I can't speak specifically to that. On our priority of continuum of care, increasing the capacity moved higher to the top of our list. We have had great success on being able to leverage private funding. Council Member Smith: Your experience has been that the Northwest Arkansas community has a philanthropic attitude willing to step up if a need were known? Angela Belford: Perhaps, based on a Go Fund that funded $15,000 in less than ten days. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 7 of 34 Council Member La Tour: Ms. Belford, thank you for being such an effective advocate for the homeless in our city and for bringing it to our attention. This needs to be added to Council Member Marsh's list and include it in the Five -Year Plan that we adopt. Angela Belford: I believe everybody in this equation is doing the best they can with the information and experience they have. Deniece Smiley, Fayetteville Housing Authority Executive Director stated she's been the Director for four years and has tried to do everything she can to follow the orders of the Housing Authority Board. She spoke about her reputation being attacked. She stated they have a housing choice voucher program for homeless veterans. She stated they have 130 vouchers and realizes that homelessness is a problem. She spoke about the waiting list for housing. She stated the consultant who drew up the Five -Year Plan was in attendance at the meeting and could answer questions. She stated the duplicate paperwork in the plan was for two programs and it has to be that way for certifications for each plan. She stated since March 2017 that Council Member Marsh has been trying to get rid of the Board of Commissioners. She read a letter that City Attorney Kit Williams wrote about removal action of the FHA board. She stated that the FHA are doing their jobs and the City Council is conspiring to remove the Board of Commissioners. Evelyn Rio Stafford, 123 South University spoke about the Fayetteville Housing Authority's Five -Year Plan. She stated it needs to be modified. She spoke about information not being easily accessible to the public. She spoke about her contract concerns with the consultant developers in the Morgan Manor and Willow Heights plan. Jennifer Cole, 1 North School Street thanked citizens for raising funds for air conditioners at Willow Heights. She stated there is a need for every penny to go to the upkeep of the three developments. Bill Reagan, 241 East 13th Street stated when public assets are all in one zip code, there is discrimination. He stated he doesn't understand why the city would want to concentrate poverty and sell off the most valuable asset, which is land. He stated he wants the FHA Director and board to consider all options available because the Five -Year Plan is not good for Fayetteville. Randy Hoeschen, Consultant stated he helped the Housing Authority with the Five -Year Plan because that's the way HUD wants it and it's the template he had to use. He stated it could be enhanced upon. He stated this is an update to the original Five -Year Plan, which was in 2015. He stated he puts together the work items to get the money and it's not his selection, it is based on what the Housing Authority tells him they want to do. He spoke about where the money is allocated. Council Member Smith requested information about the work flow and who prepares what. Randy Hoeschen stated he was a certified planner. He stated he sat down with the Housing Authority staff and met with the board. He stated they discussed the items and he came up with a budget. He stated they had a resident meeting, sent him the comments and those are incorporated in the plan. He spoke about the public hearing and HUD approval process. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteviIle-ar.gov City Council Meeting Minutes July 24, 2018 Page 8 of 34 Council Member Smith: The plan has been described as a wish list and fluid. What sorts of changes tend to get made from year to year? Randy Hoeschen: It is very fluid and flexible. They can move any item in the five years around. Council Member Smith: Since you are,keeping it fluid, you don't know what you are going to get each year, so you keep using the same? Randy Hoeschen: There was about a $90,000 increase from last year, which was huge. Everybody got a lot more money. Next year could be less. Council Member Smith: You are planning from year to year based on crossing your fingers that it at least stays the same and deal with it as it comes. Randy Hoeschen: This process happens every year. Next year they will know the exact amount for 2019. Council Member Smith: That number is based on what? Randy Hoeschen: The number of units and age of units. Council Member Smith: This whole plan seems somewhat predicated on the RAD conversion of Willow Heights and Lewis Plaza. When those are converted, will that change the amount we plan for? Randy Hoeschen: Yes, because of Morgan Manor. They reduced the figure. They would've gotten a lot more money, but there's 52 units that are no longer public housing. The same would apply to Willow and Lewis if they went RAD. Council Member Smith: Why doesn't that show up in the year to year numbers if we know that following the plan the way it is, the RAD conversion happens and those drop off the public housing side? Why are those numbers not reduced in the plan? Randy Hoeschen: Because right now we don't have any idea what those figures would be. There is no way to calculate what the reduction is going to be. There is a whole lot of factors. It's a HUD formula. It's hard to plan because no firm decision has been made on what to do with Willow and Lewis. Council Member Smith: Can you describe the improvements included in the properties? Randy Hoeschen: At Willow Heights, we added sewer line improvements in 2018 and HVAC in the second or third year. We didn't address Lewis specifically. We can always go back and add HVAC to Lewis. We've got general categories such as site improvements that can be done anywhere. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 9 of 34 Council Member Kinion: Having served on the Housing Authority, I know how fluid it is and unpredictable from year to year. I don't see the improvement of Willow Heights in this plan. Randy Hoeschen: Maybe you have an older copy because it is in 2018. City Attorney Kit Williams: Is there a contract to sell Willow Heights? I haven't seen a contract. Randy Hoeschen: There is a contract. I haven't seen it or been involved with that. City Attorney Kit Williams: Would the fact that there is a contract to sell Willow Heights not have some effect on availability of HUD funds to improve a project that is just about to get sold? Randy Hoeschen: Not necessarily. You can't out right sell it to somebody, even though there is a contract. You have to apply to the Special Application Center in Chicago for permission. It takes months to get that approval. Upon approval, you go out for competitive purchase bids. It's going to be a couple of years. City Attorney Kit Williams: There are supposed to be competitive purchase bids? Randy Hoeschen: Yes. City Attorney Kit Williams: Then how could there already be a contract to sell? Randy Hoeschen: I don't know. I haven't been involved. I don't know if it is legal with HUD or not. Don Marr, Chief of Staff: In the plan, it's fluid between moving something from a future year to a current year. How does it handle items that were not listed within the Five -Year Plan period? Randy Hoeschen: You have to do a revision to the plan, which requires another resident consultation and public hearing. It's about another 45 -day process. Don Marr: The fluidness of this plan is only allowed within the items currently listed within the plan? Randy Hoeschen: Yes. Council Member Marsh: In the City of Fayetteville's Consolidated Plan, where it describes the restoration and revitalization needs for public housing units, I don't see any mention of interior improvements to Willow Heights or Lewis Plaza. Why are we paying $40,000 in consultant costs if the only thing in the budget is swapping out ranges and refrigerators at $14,000. Randy Hoeschen: There is the RAD conversion. You have consultants to do studies, salary comparability studies, design of an architect and engineer for the kitchen renovations or sewer line replacements. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 10 of 34 Council Member Marsh: As I go through the plan to 2022, we are spending far more on consultant cost than we are on capital improvements or even the operating cost allocated in the budget. There is a disproportion allocation of funds to consultants as to real improvements that could be benefiting these people. You stated you included public comments in the proposal, but I see that there was no public comment on this Five -Year Plan. Is that correct? Randy Hoeschen: Yes. Nobody showed up for the public hearing. Council Member Smith: The RAD consultant is $24,000 a year. The consultant fees on here range between $30,000 to $60,000. It jumps from a little under 11% in 2020 to over 21% of the budget in 2021. What accounts for the widely varying numbers? Randy Hoeschen: Those are arbitrary figures that could be reduced. This is a rolling five year. Deconcentration from HUD's viewpoint is looking at all three of your public housing developments incomes. If there's a 15% variance up or down, then they consider that to be unacceptable and it has to be addressed. Council Member Smith: Are you saying concentrations of poverty are only calculated within the FHA owned properties? Randy Hoeschen: Yes, from HUD's viewpoint. Council Member Smith: If you are 100% now and you move four properties on to one, you are still at 100% and haven't had that 15% variance? Randy Hoeschen: That is a planning question. HUD wants it spread out evenly. Council Member Smith: As you RAD convert properties and take them off the public housing roll and move them into Section 8, how does that change the calculation by HUD standards? Randy Hoeschen: If Willow went RAD and you had Lewis and Hillcrest only, you would take the average between those two and compare. Council Member Smith: You would no longer have to count the low-income people you've moved off public housing? Randy Hoeschen: Yes. RAD is out of public housing. Council Member Smith: We are looking to get out of the business of concentration of poverty altogether by changing where they are on the paperwork? Randy Hoeschen: I'm not following that question. Council Member Smith: If you take them off the public housing income and put them on the Section 8 vouchers in the same property, you haven't moved people around any, but you've changed your total number of heads you are dividing by. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar gov City Council Meeting Minutes July 24, 2018 Page 11 of 34 Randy Hoeschen: I'm not a RAD person. I understand your concerns about putting people all in one area, but that is beyond what I'm doing with this. Council Member Smith: Maybe that is the HUD standard. I'm going to double check that because it isn't Fayetteville standards. Council Member Kinion: Morgan Manor is no longer counted because it is RAD converted. We could put everyone down there and it doesn't count into the concentration equation. That is working around the meaning of concentration of poverty. Mayor Jordan: If we move everybody that's in poverty down to Morgan Manor, they're no longer counted as poverty? Randy Hoeschen: In HUD's public housing view. Don Marr: Mayor, this is one of the reasons why the Housing Authority plan is evaluated against the city's overall comprehensive plan. Your comprehensive plan talks about having available, attainable, and affordable housing in all quadrants of the city. These are calculations in this application that HUD is going to use for their definition, but the check is, how it matches when the Mayor, city or state official signs off to the overall comprehensive plans of either the state or in this case, the municipality. Council Member La Tour spoke in opposition of using consultants. He spoke about air conditioners being installed in a couple of years as unacceptable. He spoke about the immediacy of need. He stated he likes the idea of RAD and doesn't know why public housing is needed. He spoke about letting private developers build houses and let the government subsidize people who can't afford it. He stated the private owners of apartment houses would have strong economic incentives to keep them in fine working order. Randy Hoeschen stated the items could be moved around in the plan. He stated he was not against RAD. He stated the units are very old and aren't going to last forever. Council Member La Tour: With RAD we don't need a Fayetteville Housing Authority. We take that power and diffuse it to the private market place. Everybody benefits. The people who live in public housing get higher quality housing. Randy Hoeschen: That is a consideration for the Housing Authority and its board. I'm just following their direction. The plan can be changed. If the HVAC needs moved up to 2018, it will be. Mayor Jordan: The plan that was submitted and that I am supposed to sign off on, that money could be moved to do air conditioning at Willow Heights? Randy Hoeschen: Yes. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 12 of 34 Don Marr: As long as it is in the overall Five -Year Plan. It can't be added unless the plan is amended. Council Member La Tour: We have to serve people. If we have people living with no air conditioning or substandard drinking water, we are failing. Don Marr stated if things aren't itemized within the plan, they can't be moved around until amended in the plan. He requested for Yolanda Fields to confirm that the plan printed for Council was the latest plan received from the FHA. Yolanda Fields, Community Resources Director confirmed it was the latest plan with signed documents in it. Don Marr stated a signed document is a requirement by the City Attorney and City Clerk offices for it to be routed through the Legistar process. Yolanda Fields stated correct. She stated that the plan itself did not change. Council Member Smith: In year five, which is 2022, there's HVAC, six units at $33,000 after four years of kitchen renovations throughout Hillcrest. Don Marr: So that amount could be moved to an earlier year for that dollar amount. Randy Hoeschen: Right. A discussion followed how the dollar amount was allocated and the way it can be used at the facilities. They also discussed how air conditioning could be changed to a different year if requested. Council Member Kinion: There has been private funding for air conditioning at Willow Heights. The community stepped up to the plate. If we need to have mold removal and other improvements, does that need to be in the plan as a line item? Randy Hoeschen: It does because fees and cost includes testing for those items. Actual remediation would be a separate line item. Council Member Kinion: We've got to be sure those line items are included somewhere within the next five years to move them from one year to another. Randy Hoeschen: That can be done easily. Mayor Jordan: It needs to get done because we have a deadline next Tuesday. Randy Hoeschen stated it will be taken care of. He confirmed that Willow Heights air conditioning was in the plan. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 13 of 34 Council Member Gray: Is this the plan that the FHA asked you to draw up? Randy Hoeschen Yes. Council Member Gray: Was mold mentioned? Randy Hoeschen: No. There was mention of testing, not remediation of the mold. I can add all that in before the Tuesday deadline. Council Member Gray: What do we do about holes in the ceilings and leaking in the apartments? Randy Hoeschen: That would have to be specifically addressed or taken care of with non -capital improvement money, reserves that that Housing Authority would contribute. You can put money into this operations line, which means putting it from this capital fund program into the Housing Authority bank account. No ties to it at all. You could put up to 20% and that's $50,000 or more that could go for things like that. Don Marr: Is that a part of what Council has in front of them? Randy Hoeschen: There is an operations line item and it's about a $1,000. Council Member Smith: Do you have any idea how big the FHA reserves are? Randy Hoeschen: I do not know. Council Member Smith: To set the record straight, I was looking at the file we got last week. The new one we received today does have Willow Heights air conditioners, 2020, listed at 30 units. Randy Hoeschen: Thank you. Mike Emery, Housing Authority Board Chairman stated the FHA Board was notified several years ago that HUD wants to move the whole nation to RAD. He stated they had been working as a board towards that. He stated more citizen engagement is needed and that all their meetings are advertised in the same manner as City Council meetings are. He stated they have done the best that they could and have had the best intentions possible. He stated ever since the sale was announced, the FHA staff and board members have not been approached with help, but instead they have felt attacked. He spoke about his life experiences of being a beneficiary in his childhood for low income services and understands what the residents go through. Council Member Marsh: A few years ago, you were informed that HUD wants to move to RAD? Mike Emery: Yes. Council Member Marsh: Where did that information come from? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 14 of 34 Mike Emery: It was in one of our meetings. I believe it was one of our consultants who had been in touch with HUD. Council Member Marsh: Can you describe the process of selecting the RAD consultants? Mike Emery: I can't at this moment because it was so long ago. I can try to find that information for you. Council Member Marsh: I would appreciate that information. Can you describe the citizen engagement process in your long-range planning efforts? Mike Emery: Every meeting is advertised in the same manner as City Council meetings are. Every tenant meeting is posted at all the facilities, knocking on doors, and in person. Council Member Marsh: Until this latest incident, what was the average attendance of a FHA meeting? Mike Emery: We average maybe two or three people, depending on the topic. Council Member Marsh: What date, time and where are your meetings usually held? Mike Emery: Last Thursday of every month at 6:00 p.m. in Room 111 at City Hall. Council Member Marsh: When was the public hearing held for the Five -Year Plan? What was the date, time and location for that hearing? Mike Emery: I don't have that date with me right now. Deniece Smiley: It was held on June 28th at 3:30 p.m. It was advertised in the newspaper. We posted all the notices. Council Member Marsh: Where was the meeting held? Deniece Smiley: At the FHA office. Council Member Marsh: Is that at Hillcrest Towers? Deniece Smiley: Yes. Council Member Gray: Mike, you are in touch with various residents, often? Mike Emery: At least one a day, I am speaking with. Council Member Gray: They weren't making you aware of the mold, holes in the ceiling, and the leaking? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 15 of 34 Mike Emery: They were. As protocol goes for tracking work orders and paper trail, I advised them to call the office and report it to maintenance. Some do and some don't. Council Member Gray: When you were looking at the plan and telling the consultant what to put in the plan, how is it you didn't put anything in there about mold and other severe problems? Mike Emery: The plan is fluid. It is my understanding that there is a line item we could use that would cover those sorts of things. Council Member Gray: It wasn't mentioned in the plan and the problems have been there a good while. Mike Emery: These buildings and housing authorities across the country have had these issues for decades. They all should have been addressed earlier on, but they may have had financial problems at that time. Our maintenance crews are doing everything they can to take care of issues. As far as it being in the plan, I was under the assumption it would be covered in the operations line item that we could increase. Council Member Gray: From what I heard in the July meeting, it's hard to understand how I could be thinking about taking care of these citizens and not have it in the plan. Mike Emery: I am trying to do everything I can to best serve the residents. At the July meeting, it was not a stellar performance. There is tension between the board members. It stems all the way back to when the sale of Willow Heights and construction of Morgan Manor was announced. Deniece Smiley: I have a list of consultants cost. One of the things we paid was Snyder Environment for asbestos abatement. We paid $6,500 for two units. We are taking care of issues. They may have not been mentioned in the plan, but a lot of this is paid through the operations account. We are in the process of getting estimates. We are about to lose two more units at Lewis Plaza because of moving foundation. These are the things we are addressing. Council Member Gray: Black mold is terrible. Deniece Smiley: We have not had any calls of black mold. We've heard people say they've had lead poisoning and we have tested those properties. There is no lead according to the test. We are getting ready to have Hillcrest Towers tested again because it is an elderly and disabled site. In the past, Hud never required those units to be tested. We do everything HUD requires us to do. I have contacted the state health department about the water. Due to the water break from last week, we were told we have to postpone taking any water samples until the boil order was done and the line was clear. We take complaints and concerns, seriously. Council Member Gray: Regarding the water break, there had been leaks earlier. Is that correct? Deniece Smiley: Yes. The week before we had fixed a water leak in one of the units. Council Member Gray: I'm talking about in the pipe that broke. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 16 of 34 Deniece Smiley: Not in that pipe, but in the complex. At the time when this pump was repaired, they had to use a jack hammer to remove the sidewalk. Nobody had ever looked at that pipe. When the pipe broke it took two days of work, but we got it taken care of. I have invoices to show all of the repairs I've had to do on water lines. Mike Emery: That particular spot was located 14 feet down and underneath a storm drain. Council Member Gray: There had never been any leaks in that area or on that line? Mike Emery: It's my understanding. Council Member Marsh: $6,500 was spent to have asbestos removed in two units. The board intends to continue making these plans, with the operations budget? Mike Emery: It can be included in the operations budget. Council Member Marsh: In 2019 and 2020 I see $1,000 in the operations budget. In 2021 there is $2,500. In 2022, there is $1,000. The consultant informed us we could put $50,000 in the operations budget. We have a housing project in a crisis situation. How is this acceptable? Deniece Smiley: Our operating budget is separate from our capital funds. The $1,000 you are looking at is allocated from our capital funds. We have additional operating funds and reserves. Those are monies we have to take care of emergencies like this. Council Member Marsh: How much is currently in your reserve fund? Deniece Smiley: About $900,000. Council Member Marsh: You have $900,000 in reserves and you have people without air conditioners? Deniece Smiley: HUD requires us to have at least $600,000 that we can't touch because we have to take care of contingencies. If for some reason HUD is not funded and the government shuts down, we have to have that money available to continue to operate. As far as the air condition situation, most of our residents at Willow Heights have air condition units. They may not be the best and are ones they have purchased. When those buildings were constructed, HUD did not require us to have central air because they did not feel it was a necessity. Through the Housing Authorities Commission, nobody has ever addressed that. Council Member Marsh: You still have $300,000 sitting there while we have units in crisis. Deniece Smiley: HUD told me that I have to save monies to pay for the Hillcrest Towers emergency grant. I have to add monies in addition to what they are going to give us. I emailed HUD last Monday when the water break happened. I told them I can't continue to save this money for the capital emergency grant for Hillcrest Towers when I have water issues. I told HUD I will no longer hold that money for the emergency grant for Hillcrest Towers. If the water line breaks 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 17 of 34 at Hillcrest Towers, I have to come up with money to fix that. The estimate is four million to fix those issues. Council Member Marsh: Have you spoken with the city about a cost share? Deniece Smiley: No. When we applied for impact fees, the city said we didn't qualify for those. We have not asked again. Council Member Marsh: When was that? Deniece Smiley: When we were trying to do the RAD conversion. Council Member Marsh: In 2017, so this condition has been allowed to perpetuate. Deniece Smiley: Because we were refused once, we didn't think you all would be receptive again. Mike Emery: Based on conversations I've had with certain people, it was a valid concern. City Attorney Kit Williams: Were you the Chairman when the sale of Willow Heights went through? Mike Emery: Yes. City Attorney Kit Williams: What kind of sale is this? Is it an option to purchase in the future? Mike Emery: It's a straight sale. We were under the impression from our HUD contact that a formal public bidding process wasn't required. City Attorney Kit Williams: Your consultant said it was required. Mike Emery: At the time, we didn't have that information. City Attorney Kit Williams: Do you feel it's a good business practice to not go out and have competitive bidding when you have a major asset to be sold? Fayetteville is growing and land values are going up. Mike Emery: Based on hindsight and some of the reaction we got, I don't think it would have had made a difference as far as public reaction to the sale. As far as a financial benefit, hindsight is twenty-twenty to get more money out of it. City Attorney Kit Williams: Do you feel like you have a contract right now that you can't get out of? Mike Emery: Yes, until I get more information on it. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 18 of 34 Council Member Smith requested Mr. Williams to describe the difference between a cost share and impact fees. City Attorney Kit Williams: Originally, I thought they would qualify for impact fees. I thought it was low income housing and it was their project. I was wrong on both counts. The building that was going to be built was going to be owned 99.99% by private entities and there was going to be market rate units. Our impact fee ordinance is very clear that it must be low income housing by a non-profit. I had to write them a letter saying we can't waive impact fees under our ordinance. We looked at cost shares when it comes to the large-scale development that went through. They had some major drainage issues, which is apparent, because we had drainage issues in Willow Bend. We've heard about the problems that Morgan Manor has had through the years. They were looking at potentially doing cost shares with the city for that or for the road. Cost shares were examined, but I'm not sure what the final result was. It's not like because they didn't qualify for impact fees, we wouldn't do a cost share. We have done that with private developers if it makes sense for the city. Council Member Smith: After that happened, was there any other attempt made or considered for continuing to pursue impact fee exemptions? Mike Emery: No. City Attorney Kit Williams: They couldn't have because City Council would have had to change the ordinance. It would have flown in the face of what we've done with our impact fees throughout the entire time we have had them. I would've recommended against changing that. Our impact fee advisors didn't even like it that we had that part in. It's supposed to be very restrictive and has always been interpreted that way. Council Member Smith: My impression was that there had been some further email conversation about ways to find loopholes in that. Council Member Marsh requested for Mr. Emery to speak about the decision to sell Willow Heights, how the community was included in the long-range planning decision, how they went about negotiating the best price for the asset, and determining it was no longer needed for corporate purposes. Mike Emery: It was never formally put up for sale. We were approached by an interested buyer and discussed it with him. We didn't immediately jump on an offer. The board at the time, which has changed in significant ways since then, decided to take the time to consider. All of our discussions were in open meetings. Council Member Marsh: What efforts did you make to engage the public and residents in the long-range planning decision to sell and relocate residents? Mike Emery: No more than what we do for any of our other meetings, which is exactly what the City Council does on announcing their meetings. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteviIle-ar.gov City Council Meeting Minutes July 24, 2018 Page 19 of 34 Council Member Marsh: How did you determine that property was no longer needed for corporate purposes? Mike Emery: We approached it as what it would take for us to take all the buildings down and rebuild there. It includes finding housing for the residents that are there, paying for their move, securing housing for the duration of the build, and paying for the move to come back. We determined it was better to sell the property, use funds we got from that in conjunction with tax credits, and to build on land we already own. Council Member Marsh: What efforts did you take to ensure the Housing Authority received the top dollar purchase price for the property? Mike Emery: We did not jump on the first price offer, which was under one million dollars. Council Member Marsh: This was with the same perspective buyer? Mike Emery: Yes. Council Member Marsh: What efforts did you make to solicit alternative bids in other buyers? Mike Emery: We were under the impression that it wasn't a requirement for us. If that's incorrect, I'm going to find out. Council Member Marsh: I'm seeing a lot of, it wasn't required, so we didn't do it and it's not my job. Mike Emery: I have never said it was not my job. Council Member Marsh: Your job is to advocate and provide the best service available for the residents of the FHA. You are not doing these due diligence items that a normal person would do to get maximum value for it. Just because HUD doesn't require it, we still have to do our best with public assets. Mike Emery: I agree that citizens require better than what HUD regulates. Council Member Marsh: Who do you work for? Mike Emery: I'm not paid a dime for anything I do for the Fayetteville Housing Authority. I am a volunteer. Council Member Kinion: You do everything with your agenda just like the City Council does? Mike Emery: As far as announcing meetings. Council Member Kinion: You don't have an agenda session where the agenda is discussed? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 20 of 34 Mike Emery: No. We don't have an agenda session. We put the agenda out as soon as possible. There was a brief discussion about the advertisement of meetings for the FHA. Council Member Bunch: This is a very challenging process. I appreciate that you are a volunteer. I'm a real estate agent. I don't think it is appropriate to have an offer from only one person. The city always gets multiple bids and goes through a process. I am sorry you feel that you've been attacked as a volunteer. Council Member Smith: When the first offer came in, did you get an appraisal to compare it against? Mike Emery: Yes, we had an appraisal. The offer price was under our appraisal and we countered. Council Member Smith: Was it a standard appraisal as would normally be done? Were there any special instructions? Was it a local appraiser? Mike Emery: Yes, it was a local appraiser. There were no special HUD requirements on it. Deniece Smiley: It might be listed on your consultants list. I believe it was one that the city has used as well. Council Member Smith: Did it include the value of the building as well as the land? Deniece Smiley: I don't have the report with me. Mike Emery: The whole board and staff have worked very hard to do what they can. The HUD regulations are a jungle. We are overly cautious about violating some regulation and losing funding. City Attorney Kit Williams: The appraisal you provided was dated August 7, 2017. Had you not already agreed to sell before that? Mike Emery: That was correct. For HUD to approve going forward, an appraisal was required. City Attorney Kit Williams: Was that before you made an agreement? Deniece Smiley: It was after. City Attorney Kit Williams: Do you know the approximate date of the sale? Was it in 2017? Deniece Smiley: Yes. City Attorney Kit Williams: The sale was before the appraisal, but then you got the appraisal afterwards? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 21 of 34 Deniece Smiley: Yes. Council Member Kinion: In the Community Development Block Grant plan, it says the public housing agency was not designated as troubled. This sounds like troubled housing. What is troubled? Yolanda Fields: Troubled in the sense that HUD has not labeled the organization has having challenges with meeting HUD requirements. Council Member Kinion: Who works with HUD to get it classified as a troubled agency? Yolanda Fields: HUD visits and monitors the locations. Council Member Kinion: It is based on scoring? Yolanda Fields: Yes. Council Member Kinion: If there was a need for some improvements, because I know we spend money on single residents to get improvements, would there be an opportunity to spend CDBG money on a multifamily project? Yolanda Fields: Yes. Council Member Kinion: How could we move forward to help with public housing? Yolanda Fields: Once the budget is completed for our internal programs, we can then set aside funding for public services, which has a cap on it. Anything we have that is additional funding beyond that point we can set aside for public facilities. Council Member Kinion: As we move forward on amending this resolution, would it be appropriate that we add to seek a partnership with CDBG to look at mutually beneficial funding? Yolanda Fields: There is an application process for funding. We had our workshop today for next year's funding. Individuals looking to apply for CDBG funding would had to been present at the workshop. The application is due at the end of August and it's funding for 2019. We have not yet received our funding for 2018. Council Member Kinion: We've missed the deadline? Yolanda Fields: Yes. Council Member Kinion: In the future there is the possibility, unless things change? Yolanda Fields: Yes. We have worked with and done several projects with the Housing Authority in the past. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 22 of 34 Council Member Kinion: I know we have in the past, but I don't know why it has discontinued. Yolanda Fields: We have our application process. All are welcome to apply, that are providing services in the City of Fayetteville, for individuals that are low to moderate income. If their service area is at least 51% low to moderate income, they can apply for funding. Council Member Kinion: I've attended meetings at Little Rock and often you would see the relationship between the Housing Authorities and CDBG as being very cooperative. I hope we can encourage that. Yolanda Fields: Absolutely. Council Member Kinion: I know we can because we did when I was on the Housing Authority Board. Yolanda Fields: We have in the past. Don Marr: What's the possibility of having an additional training class for someone who would want to apply if we wanted the FHA to be eligible? Yolanda Fields: Our meeting has not happened. We did our run through today. Our workshop will take place Wednesday, August 1, 2018 at 2:00 p.m. in Room 326. Don Marr: For someone to be able to apply for funds for the future year, they must attend that workshop? Yolanda Fields: Yes. Don Marr: If the FHA would like to attend to access their ability to be an applicant, that is an option. Yolanda Fields: Once those applications are submitted we do an initial review to make sure the documentation meets all the requirements of the application. Those applications that meet the criteria are moved to the prioritization committee. We then start funding until the money runs out. Don Marr: Please give the dollar amounts you allocate from applicants. Yolanda Fields: Last year we had $45,000 for public services and $180,000 for public facilities. Council Member Kinion: Is there a nonprofit organization that is supporting Willow Heights? Yolanda Fields: It's a task force. There was a brief discussion about groups that could attend the workshop. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 23 of 34 Council Member Smith: I hope we will have this plan wrapped up and amended by your Wednesday meeting. As you look at the plan, are there any concerns you have that would kick them out of the running for any CDBG considerations? Yolanda Fields: The challenge I see is funding for Willow Heights. There isn't a clear determination if the property is going to belong to the Housing Authority or going to be sold. We couldn't provide funding not knowing that answer. City Attorney Kit Williams: Their agreed sale at this point to a private entity would be a problem for funding? Yolanda Fields: Absolutely, it would be a problem. Don Marr: It would be a problem in the assessment of the prioritization committee because it could not be a future property. Yolanda Fields: It would not meet our criteria when we are looking at serving low to moderate income population. Council Member Kinion: Willow Heights is just one property. There are other properties. There are opportunities to shift some line items from other properties where we see a need. Yolanda Fields: Correct. We put in playground equipment over at Lewis Plaza, which was $80,000. We did a renovation expansion to Head Start when it was over at Willow Heights and put in playground equipment there too. There is a way to utilize funding for a project so it frees up the Housing Authority funding for other projects. Council Member Smith: All of this has been predicated on Willow Heights and the sale contract. Are there any sale talks ongoing about Lewis Plaza? Deniece Smiley: We've had offers, but we have not accepted any. We just rescinded CHAP for RAD. At this point we are still public housing and have the same requirements under HUD. Council Member Smith: Your CHAP rescinded and you are longer in the process of RAD conversion at all? Deniece Smiley: We are not, but we have the ability. When we wrote the letter for the emergency grant we need to get for Hillcrest Towers for the four million dollars, HUD told us they would not allow us to get the grant if we continued through the RAD process. Council Member Smith: They have a similar problem as our CDBG would? Deniece Smiley: Yes. City Attorney Kit Williams: You could not get the grant if you didn't do what? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteviIle-ar.gov City Council Meeting Minutes July 24, 2018 Page 24 of 34 Deniece Smiley: If we continued through the RAD process, we could not get the emergency grant. We applied a year ago and we still haven't heard if we are going to get it. City Attorney Kit Williams: Your Five -Year Plan shows a possible conversion of Lewis Plaza to Rad, doesn't it? Deniece Smiley: Yes. When we did the application, each one of our units was included in the RAD application. We started with Morgan Manor and we were going to Hillcrest Towers, Willow Heights, and then to Lewis Plaza. The letter says we can reapply at any time for CHAP. City Attorney Kit Williams: If it's a problem to pursue RAD now, why would you need to put it within your Five -Year Plan. In the future, you might put it back in. If it causes problems for CDBG money as well as other money, why are you still pursuing that? Deniece Smiley: I'm not the person to answer that. The board makes those decisions. City Attorney Kit Williams: Why is the board still pursuing a RAD now, which seems to be blocking other grant funds? Mike Emery: A few years ago, we were told that HUD was wanting to move the entire nation towards RAD. City Attorney Kit Williams: Nothing you've heard tonight changes your mind, including the fact you might be losing the opportunity to get grants that could help rehab some of these housing units? Mike Emery: No, I'm not saying that at all. There's been a ton of information and it's going to take some time to process. Council Member Marsh: Why are we trusting the advice of an unidentified consultant from many years ago that we are supposed to be moving to RAD if HUD is refusing grants if we continue down the RAD path? Mike Emery: I'm fairly certain it is our current RAD consultant, but I don't want to say that until I verify that information. Council Member Marsh: The people who are making money off us converting to RAD are telling you to convert to RAD. HUD is withholding funding for much needed improvements because we are converting to RAD. Mike Emery: I want to verify that is the actual case. Deniece Smiley: Leon Moore used to be Chairman of the Housing Authority. He went to a HUD national meeting where HUD presenters talked about the RAD conversion and how they were moving towards going out of public housing. Every time we go to a conference or a training, HUD reiterates that same thing. This is not something the consultant has said. If you don't have the 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 25 of 34 money to repair or build, then residents can receive vouchers to move wherever they want to move. HUD is moving out of public housing. This is a suggestion they made to us to solve this issue. Vouchers were brought up as an option at a meeting. Our residents and a member of the public are against it. We listened and have not pursued that. Our Five -Year Plan was drafted and delivered to the city on June 10, 2018. City Attorney Kit Williams: You are going to have another meeting on Thursday. You have an opportunity to amend the plan a little and make changes. Deniece Smiley: Yes. Don Marr spoke about an appropriation act of 2012 that created the RAD conversion. He stated it is a very popular program used across the country. He stated when it began, Congress had a 60,000 cap on the units that could be RAD converted. He stated it had been modified over the years and is up to 225,000 units. He spoke about it being a successful program because it gave opportunities for private investment with public funds. He stated it's a program, that unless it is reauthorized by September 30, 2020 ends. He stated the movement for everything to go to that would have to be done prior to 2020 for the goal to be met. He stated that the program can be successful, but it does have impact on other funding requirements. Council Member Marsh: My primary concern is how the decision was made and the process. For 2021, a new office is in the budget at $146,000. Deniece Smiley: We need a new office because we are running out of space and we have many files. We don't have any privacy for our hearings and briefings. We discuss a lot of confidential information. We looked at extending the back of our office, but we would have to cut trees down and lose green space. We looked at putting it to the side, then we would be taking residents space. We would like to have some security. People come into the office who are upset when their assistance is terminated or about to be evicted. We welcome you to tour our office. Ms. Smiley briefly discussed what it takes to run public housing properly and successfully. She also spoke about the cost associated to relocate the elderly and disabled from Hillcrest Towers to an apartment for repairs to be completed. Council Member Bunch: How did you come up with an estimate of $146,000 for an office? Deniece Smiley: We relied on Mr. Hoeschen, our consultant. They look at everything to run the office. Council Member Bunch: Did you get bids on it? Deniece Smiley: No, we rely on our consultants. You all hire consultants and rely on their advice as well. Mike Emery: As far as the bid price goes on construction of an office, it would be when we got closer to doing it. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 26 of 34 Council Member La Tour: Is your office air conditioned? Deniece Smiley: Yes. We care for our residents. This is one of the reasons the board made the decision to rebuild at Morgan Manor. They were going to have air conditioning. Mike Emery: One of the reasons we haven't pursued the vouchers is because we have trouble with landlords willing to take the vouchers we already have. Quin Childress, 710 Lake Sequoyah spoke about his experience as a resident at Willow Heights when he lived there as a child. He stated the concerns being addressed with the living conditions have been occurring for 16 years. Balandra, Ward 4 stated the most important voices are the residents. She urged the City Council members to continue asking critical questions. Olivia Trimble, Ward 1 stated residents at Willow Heights, Hilcrest Towers, and Lewis Plaza feel disempowered. She stated residents are afraid to make their concerns known for fear of retaliation. She spoke about the taskforce that was assembled by citizens to tackle pressing issues impacting Willow Heights. She spoke in opposition of the current FHA Board. Ms. Quinlan, Citizen stated there should be higher standards for public housing. She spoke about the Five -Year Plan distribution of money. She stated she can't agree with staff comfort of an office over resident safety. She spoke about environmental testing of the public housing units. Council Member La Tour moved to allow extra time for citizen comment. Council Member Marsh seconded the motion. Upon roll call the motion passed unanimously. Ms. Quinlan, Citizen spoke about the sale of Willow Heights. She stated under HUD code section 970.19 requires fair market value as accessed by an independent appraisal. She stated the independent appraisal is required prior to listing of the property for sale. She stated the contract was negotiated between October and March 31, 2017, which was when the contract was signed. She stated the contract is a three-year contingency on tax credits being received, which means no capital improvements, money from HUD or CDBG funds could be used on the property until March of 2020. Mayor Jordan: The timeline is interesting. Council Member Marsh: The timeline is very interesting for when the appraisal was paid. According to the information the Director forwarded to us, the appraisal for Willow Heights was done in August of 2017. The contract to sell was signed on March 31 st? Ms. Quinlan: I confirm that. In the Fall of 2017 the Morgan Manor expansion was coming before the Planning Commission and I was sitting on the board. I requested the HUD approval forms to sell the property. There's a form number that has to be approved. HUD statutes require that HUD has to make approval prior to any action being undertaken to dispose of property. I requested the 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 27 of 34 form and was told that HUD was unaware of the sale, although we had been under contract to sell for six months. Council Member Marsh: The contract for sale was signed five months before the independent appraisal was contracted? Ms. Quinlan: That is correct. Council Member Marsh: The proper notification to HUD was not given prior to any action being made to sell the property? Ms. Quinlan stated that was correct. She spoke about a letter being received from HUD in Little Rock confirming they had received no notification of the sale of the property. Council Member Kinion: Does this in anyway invalidate the contract? City Attorney Kit Williams: I think you could make an argument that it was a contract entered in violation of HUD regulations. I am not the attorney for the Housing Authority. They have their own attorney and they have to assert that type of defense against a contract. Council Member Kinion: Can the public assert that defense? City Attorney Kit Williams: I do not think you have standing for that. There could be some ways to attack it in the future. The proper place would be for the Housing Authority to recognize that when they thought they entered into the contract, they didn't have the legal right to do it. Therefore, their attempt to enter into the contract would be void as against public policy. Melissa Terry, Housing Authority Board stated she requested a written legal opinion from FHA attorney, Jim Crouch. She stated in a letter, Mr. Crouch wrote, "Thus in theory to back out of the contract now would not be a breach of the contract." She stated he is talking about the HUD condition of release and that a contract was made on the property prior to HUD releasing the property, which is a bit out of order. She stated it's his legal opinion that it may be this condition cannot be met and therefore the contract cannot be performed and is not enforceable. City Attorney Kit Williams stated you have legal standing regardless and have his opinion that in fact it is a void contract. Melissa Terry spoke about the troubles inside the board of the organization. She stated there has been a lot of talk about performative compliance and community engagement. She stated the space between those two things is where transparency and public process lives. She stated she abstained from voting for the Five -Year Plan because she found it be troublesome. Council Member La Tour: Ms. Terry, we appreciate you serving on the FHA Board. Don't be discouraged. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 28 of 34 Mayor Jordan: At the Housing Authority meeting, you mentioned something about getting an estimate for $80,000 for the units to buy them. That doesn't count installation. Is that correct? Melissa Terry: Yes, air conditioners at Willow Heights. The community initiative fund is for window units that are energy star rated. Those who do already have air conditioning, it's not the quality we ourselves would expect. To do a proper energy efficient mini split installation, it is $80,000. Mayor Jordan: There was discussion on cash assets. Melissa Terry: If we have $600,000 in operating funds and we also have $900,000 in reserves, where do we see that reflected? Even if we are required to hold $600,000 of that in rainy day funds, there's $300,000 and other money in the operating budget. It would be nice to see it spelled out clearly to be able to work according to plan. These numbers are not in harmony with the narrative that is inside the Five -Year Plan. Mayor Jordan: $165,000 was discussed that night. Melissa Terry: $165,000 is what our Executive Director said she is required to hold for the emergency grant. Kyra McCown, FHA Staff Member: $440,000 went to kitchens at Willow Heights, Lewis Plaza and Morgan Manor. We put in new countertops, cabinets, and sinks. We did not upgrade at Hillcrest Towers. We repair holes in the ceiling. Maintenance uses ozone machines when somebody says they have black mold. Molly Carmen, Ward 1 stated you don't have to see a conspiracy to see that the Five -Year Plan needs changed. Blake Sanders, Ward 1 stated there is no room for pride in public service. Janet Gradge, Wedington Drive stated she has friends that live in public house and submitted a letter to Mayor Jordan and City Council for them to read. Council Member Petty spoke about the appointment process of the FHA board. He stated he couldn't care less about intentions, he cares about results. He spoke about touring the Fort Smith Housing Authority and other organizations in the state. He stated they all have been building housing and taking better care of their residents than Fayetteville has. He stated HUD is not good at what they do and it is because congress doesn't support them. He stated the FHA are incredibly underfunded. He is inclined to be generous to the staff because of what they deal with and their priority of taking care of the people in the units they are already managing. He believes the current and past FHA Board have been content to follow the advice they've been given without questioning it or seeking second opinions. He stated he is stunned at how the Willow Heights contract was put together and it has to be voided. He stated more oversight will be done in the future. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 29 of 34 Council Member Smith stated intentions and competency are how we yield results. He stated he appreciates the volunteer servants, but what has been occurring for the past year is willfully negligent. He stated it's obvious to him that only one option was ever on the table and it's the option where the consultant stands to profit from. He spoke about Fayetteville building public housing in four separate locations. He spoke about deconcentrating of poverty. He wants the FHA to clarify their measure on concentration of poverty and include concrete steps for achieving it. He stated the entire Five -Year Plan seems to hinge on the demolition of Willow Heights. He stated the updated budget represents the first nod to keeping it habitable and sanitary, but is concerned the budget isn't sufficient. He stated City Council should recommend the references to RAD conversion are removed from the plan until they have worked out the emergency funding issues. Council Member Kinion stated he has a lot of care for the FHA and was a board member for many years. He spoke about the history of Hillcrest Towers, the exterior of the structure, and the renovation of the building. He stated he was on the Housing Authority Board when the RAD conversion was established. He stated it was established for high density, inner city, multifamily dwellings that were high crime, had a lot of inefficiencies that couldn't be handled by the local community and it was a successful program. He stated there was a cap and a strict evaluation throughout the years because consultants abused the programs. He spoke about his concerns when dealing with consultants. He stated a budget is a vision statement of how to move forward and establishes priorities. He thanked the community for the participation. Council Member Petty stated there is danger in reacting a bit too strongly with actions. He stated if the RAD conversion was off the table for the Housing Authority, it would be a mistake. He stated the Rad conversion has a lot of merit because the cost to deliver a unit under a public -sector regime are very high compared to the cost to construct and deliver a unit under most private -sector regimes. He stated it has to do with how bureaucratic the HUD requirements are and what it takes to meet those requirements compared to the standard building code requirements. He stated if anybody had ever come to him in his 10 years on the Council and told him they needed CDBG money for Willow Heights, Lewis Plaza, Hillcrest Towers or Morgan Manor, he would've been talking to the Mayor, Don Marr, and Yolanda Fields about doing that. He stated there's a problem with not being creative in funding partnerships. He stated the money is there, but people need to come to them to work it out. Council Member Smith stated RAD can be a good program, but it can also be abused. He stated he's skeptical of a system that creates private profit by selling a profit that people can't afford at a loss. He stated they can amend the Five -Year Plan, but believes they would be better off with a hard reset to reevaluate the situation. Council Member La Tour stated he's not familiar with the ends and outs of the RAD program as promulgated by HUD, but the theory behind it, he likes. He doesn't like concentrated power in public boards due to mistakes being made, whether intentional, accidental or negligent. He stated if mistakes get made in a private market, the owners of the business get penalized. He spoke in support of housing and school vouchers to create marketplace competition. He stated it could help diffuse poverty in the city and create freedom of choice. He stated the Five -Year Plan needs amended. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 30 of 34 Council Member Bunch stated she would be in support of an amended Five -Year Plan. She stated it would give a good foundation to start from. She doesn't want to exclude RAD from the plan. City Attorney Kit Williams: The RAD program is not the Section 8 vouchers. The Section 8 vouchers are what Council Member La Tour was speaking about, where any landlord will accept them. Don Marr: We all grew up in a very different privileged environment. Our ability to encourage landlords in our community to take vouchers to allow that freedom is what you all can do as we have dialogue with our builders and owners in the community. The challenge we have is that these vouchers have cap limits. We are returning vouchers because we don't have landlords willing to take them: We have a lot of programs in place to help residents. They sometimes can't get through the screening backgrounds. City Attorney Kit Williams: The RAD program is building or rehabilitating public housing and turning it into a voucher building, but it's not Section 8 voucher. The problem with maintaining the RAD conversion in this plan, when it includes demolition of Lewis Plaza and Willow Heights, means the money you might get from HUD for grants to rehabilitate these facilities is very unlikely. They don't want to rehabilitate a facility you are about to destroy. You might leave enough of the RAD in for rehabilitation. We need to present stuff that is simple and straight forward. I recommend getting out of the contract. I would eliminate the RAD conversion that requires demolition. Even if you allow RAD conversion or something else that could disqualify them for grants, then take it all out this year. The Housing Authority should work with and apply for funds from the CDBG fund. Those are three things they can look at to make positive steps and change the direction of deterioration we have been seeing in the public housing projects. Sarah, everything you said is fine, but they're not really that much part of the plan. That's how they should act, but we need to give them concrete things to look at and make decisions in two nights. I write the resolution ahead of time rather than trying to write it at a meeting because it's difficult to get everybody's thoughts together. Don Marr: I recommend you adding that the budget priorities should be focused on core items to improve living conditions and prioritize in the earlier years of the Five -Year Plan. City Attorney Kit Williams: Budget priorities for necessary health, safety and maintenance of existing facilities? Don Marr: Yes. Council Member Bunch stated she liked the possible revitalization that RAD allows. She stated she doesn't like the aspect of tearing things down. Council Member Smith: We had two deaths recently out at the homeless camps and both had vouchers. They couldn't use them because they couldn't find someone that would accept the vouchers. We need to make sure the Housing Authority maintains the autonomy to prioritize homelessness. The waiting list is long. If you have somebody on a waiting list that's being sheltered and you have the option to put somebody whose sleeping under the stars, it would be 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 31 of 34 appropriate to prioritize that first. If we can prevent demolition, that clears the cloud of improvement monies. City Attorney Kit Williams: None of us up here are experts. If you are keeping the option open for the RAD program, not for demolition, but for rehabilitation, would the grants still be allowed under HUD to apply for? Randy Hoeschen: I believe they would if you are not acting on it and don't have a CHAP on one of the developments. If the Housing Authority applies for RAD and gets a CHAP or they decide not too, they would clarify that in a letter to HUD. They won't give them money if it's not in public housing. If it is RAD, it's not public housing. Council Member Smith: There are RAD conversion programs they could do while retaining the property themselves? They could do their own RAD conversion, not through public housing, but through other avenues? Randy Hoeschen: When they convert to RAD, they have to improve the properties based on a physical condition assessment. Whether that is through money they already have or through a loan. Council Member Smith: A lot of what we have had problems with is the fancy financing deals. Maybe there are ways to simplify that and make it a little more transparent. Randy Hoeschen: Yes, you can do that. You can say you might consider RAD. This is done every year, so if you'd rather just get it out of this year's plan, we can take it out totally. City Attorney Kit Williams: That is the only way to get the other grants? Randy Hoeschen: Right. If it is going to interfere with CDBG funding, you might take it out. Council Member Smith: We are not adopting their plan for them. We are making recommendations to the Mayor and he makes the final decision. City Council will be paying attention to the outcome. Council Member Marsh stated her appreciation for citizen support. She stated there's been a lot of good recommendations for the Mayor. She spoke about more citizen and stakeholder engagement being needed. She stated they need to be observing proper public process so decisions are made in a transparent and easy to understand manner. She stated she wants to see a board committed to innovative problem solving and building partnerships in the community. She spoke about incentives to builders to accept a certain percentage of rental assistance vouchers. She spoke about rental statistics. She stated there is a growing housing crisis in the community. Council Member Kinion: The RAD situation in this budget is related to the demolition of property and I don't want that to be an incentive. When looking at the improvement plan by the Community Design Center, they point out in Willow Heights the reasons why we would not want to destroy the property. They believe it is more affordable to redevelop than to destroy it. It's more likely to get low income housing tax credit financing to redevelop the property. At least for a year, 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 32 of 34 I'd like to see RAD taken off the table so we can look at alternative resources of funding and get the properties in a livable condition. Council Member La Tour: The Housing Authority should not be holding meetings at 3:30 p.m. We hold our City Council meetings at 5:30 p.m. when people are off work and have access to the meetings. City Attorney Kit Williams: I have listened to everyone. Council Member Marsh's comments about how to operate are very good, but that isn't part of the Five -Year Plan. I have gotten it down to four items. Prioritize homeless to obtain housing vouchers and including staff capacity if needed. To handle the additional vouchers claimed by the Housing Authority, but this only works if the housing vouchers will be used by landlords. Reduce consultant fees, prioritize budget for necessary health and safety repairs, maintenance for existing facilities and the invalid land sale contract for Willow Heights. Lastly, the RAD conversion plan for fiscal year 2018, especially about the demolition of Willow Heights and Lewis Plaza. A brief discussion followed about City Attorney Kit Williams recommendations. Council Member Marsh: They are good action items that Kit stated. I encourage us to adopt the recommendations identified in the U of A Community Design Centers Plan. To develop and implement an action plan to expand partnerships with public agencies and nonprofits, especially in the areas of storm water, flooding, and CDBG funding. Scenario planning to envision the full range of long term operational options. The FHA shall hold the discussion with a qualified facilitator in a workshop format. Commission a local developer or architect project team to pursue a low-income housing tax credit application for revitalization of Willow Heights. City Attorney Kit Williams requested for Council Member Marsh to send him a copy of the U of A plan she described. He stated the fifth item could say, to adopt the recommendations of the University of Arkansas Community Design Center for Willow Heights. Council Member La Tour encouraged the FHA to apply for the CDBG funding. City Attorney Kit Williams stated he would add the recommendation that the Housing Authority should work with and apply for CDBG funding. Don Marr: Staff advice to the Mayor is that it's critical he consider his signature and not lose any of the funding from HUD for this capital program. The board hopefully will adopt these items because they are the only entity that has the power to do so. If they don't, our advice is he still sign the certification document to receive the funding and then a recommendation that the Council would address the board. We do not recommend any loss of funding. Mayor Jordan: Council, we have $281,000 on the line. Council Member La Tour: Do we have the authority to replace the board? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar gov City Council Meeting Minutes July 24, 2018 Page 33 of 34 City Attorney Kit Williams: The City Council by majority vote, if they determine the statutory requirements of misconduct, neglect or inefficiency have been met after a 10 -day notice and an opportunity for a hearing, does have the opportunity to replace a commission member. Council Member La Tour: A disagreement about policy doesn't do it? City Attorney Kit Williams No. The Supreme Court says you have to have substantial evidence before they could be removed. A brief discussion followed having a cooperative relationship with the board. Mayor Jordan stated he agrees with a lot of the comments that have been made. He stated he's currently working on an affordable regional housing plan. He stated he does not support RAD. He doesn't believe Lewis Plaza and Willow Heights need to be torn down and relocate people in a place they've never been before. He believes it concentrates poverty. He spoke about the Willow Heights contract that was not approved in the right sequence of events. He stated there are plenty of vouchers to go around, but there are not enough landlords taking them. He stated he doesn't agree with the Five -Year Plan. He spoke about the risk of losing $281,000. He stated losing that kind of money does not do anybody any good and he won't jeopardize it. He encouraged the Housing Authority to take care of the people who need air conditioning. He stated he realizes they have $281,000 to do the maintenance on three major properties and it will have to be dealt with in the future. He stated change is occurring and it will be made better. He stated he would decide after the FHA Board meeting. Council Member Smith moved to approve the resolution as recommended. Council Member Marsh seconded the motion. Upon roll call the resolution passed unanimously. Resolution 157-18 as recorded in the office of the City Clerk New Business: None Announcements: Don Marr, Chief of Staff: The City of Fayetteville will be beginning our 2040 plan update of our city's master plan. Attainable housing is one of the goals. Information is on the website. City Council Agenda Session Presentations: None Cit -N., Council Tour: None 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes July 24, 2018 Page 34 of 34 Ad'ournme t: 10:10 p.m. r r L' el Jor n, Ma or Sondra E. Smith, City Clerk Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov