PRESENTER: Presenter
Paige McDonald, Assistant Purchasing Manager
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SUBJECT: Title
Approval of an agreement with National Development Council for workforce housing fund design and administration.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: Citywide
BACKGROUND INFORMATION:
The City of New Braunfels solicited a consultant to advise and assist in the creation, capitalization, and administration of a Housing Incentive Fund (HIF). The development of housing affordable to certain segments of the New Braunfels workforce does not naturally occur in the marketplace, and the WHAC recommended the creation of a dedicated funding source. The HIF proposal was developed and recommended by the Workforce Housing Advisory Committee (WHAC) to provide gap funding assistance for the creation or preservation of affordable housing units throughout the City of New Braunfels. The need for a HIF was established after a multi-year education and discussion process that discerned the need for a source of financing to incentivize the private sector to preserve or construct housing affordable to the community’s workforce. The HIF, oftentimes called a Housing Trust Fund (HTF), is intended to be a distinct set of funds that receive ongoing sources of public and private funding to support the preservation and production of affordable housing and increase opportunities for families and individuals to access decent affordable homes.
A key strength of HTFs is their flexibility to be designed to serve the most critical housing needs in a community. Because they are designed and created at the local level, they are not subject to the restrictions of federal subsidy programs and therefore can be designed to address local priorities and needs. Public entities with experience working with housing development partners, administering grants, and managing a competitive application process are typically the agencies charged with administering and overseeing an HTF. Given staff’s limited capacity to create and establish the HTF, a solicitation for its creation was circulated.
The solicitation was posted in January and one proposal was received in February. The evaluation team reviewed the proposal and deemed it responsive.
Staff is recommending the awarding of the contract to the National Development Council (NDC). NDC is a nationally recognized non-profit with more than 50 years’ experience in increasing the flow of capital for investment in affordable housing, job creation and social infrastructure investments. NDC’s Technical Assistance team is comprised of team members with a broad set of public and private sector experience in affordable housing development and finance. NDC’s core expertise is working with client communities in strategic uses of public resources and incentives to leverage private investment in economic and community development efforts. Broadly, NDC will assist the City in the following tasks over the next twelve months:
• Establishment of HTF program structure, policies, governance, and relevant guidelines
• Establishing of evaluation and underwriting criteria for HTF investments
• Creation of relevant application and program materials
• Recommended city and utility policy changes to support investments of HTF
• Identification and solicitation of public and private funding sources to capitalize the HTF
• Creation of a policies and criteria to guide the city in its support of federal and state programs designed to increase the availability of workforce housing
• Assistance with the development of a Request for Proposals and negotiation for eventual award agreements
While the first year of the contract is centered on policy and procedure establishment along with fundraising, staff anticipates a multi-year engagement is likely to provide staff support as solicitations and evaluations become regular occurrences and as compliance and monitoring efforts are needed for previous investments. The agreement term shall span the initial year plus four one-year renewal options for a total anticipated contract retainer amount not-to-exceed $450,000.
NDC will be compensated with a hybrid fee structure that includes 1) an annual retainer in the amount of $90,0000, and 2) a 3% fee (referred to as a finder’s fee) paid for identifying and securing public and private capital sources raised for workforce housing. This finder’s fee is exclusive of any capital provided by the New Braunfels Economic Development Corporation to an eventual HTF.
ISSUE:
Implementation of recommendations by the WHAC and City Council.
FISCAL IMPACT:
Funding for the initial year of the annual retainer is incorporated in the FY 2023 departmental budget. Funding for additional years will be dependent upon budget availability. Funding for the finder’s fee will come from public and private capital sources the company raises.
Recommendation
RECOMMENDATION:
Staff recommends approval of an agreement with National Development Council for workforce housing fund design & administration.