| 7/30/2009 | COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEE | A motion was made by Bruer, seconded by Bidar-Sielaff, to Discuss and Finalize. The motion FAILED by the following vote: | Fail
(1:6) |
| Notes: Dane County Housing Authority (DCHA)
Clingan noted that the Committee had heard testimony from DCHA and subsequent discussion about their RFP at the last CDBG Committee meeting. He said that DCHA has returned with a re-vamp to their plan, and staff has recommended going forth with funding their RFP.
Constans said that per Assistant City Attorney Anne Zellhoefer, the RFP as issued left us some latitude with the product we choose. Constans noted that a compromise was reached where DCHA would create a .75 part-time position rather than 1 FTE, and 50% of the position’s time would be spent on foreclosure prevention task force objectives and 50% of the position’s time would be spent on workshops described in their proposal. DCHA said the likelihood of serving 300 households is difficult, so the goal was reduced to 150 households to be served by this contract.
Bruer moved adoption/Rummel seconded.
Unanimous approval.
Housing Rehab
Constans said that she had received news from Washington that Davis-Bacon Act (DBA) provisions do not apply for CDBG-R housing rehab projects with seven or fewer units. Constans said that this means Operation Fresh Start (OFS) could then hire their own workers and the City would not need to hire force account employees. She said staff recommends a substitute resolution to provide $269,184 to OFS and remove the funds originally designated for force account employees from the City.
Bartlett moved approval/Bidar-Sielaff seconded.
Unanimous approval.
Bruer asked about the construction trades again. Constans said that Jade Banks of HUD-Washington indicated that Congress agreed that housing rehab of seven or fewer units would be exempt from Davis-Bacon provisons, for the CDBG program. This exemption applies only to HUD and not to the Department of Energy or other departments. Congress, in authorizing the CDBG Program in 1974, had explicitly exempted housing rehab of seven or fewer units from fair labor standards or Davis-Bacon coverage.
Bruer asked if there was any sense of HUD’s concern for trades.
Constans said that Lorraine Cooper of Chicago had evinced concern that trades might be concerned, and Constans said that Connie Ferris Bailey from OFS wanted to be very clear that trades have not given her any indication that they’ve had trouble with OFS’s program.
Bruer said that the issue of DBA and the trades is concerning to him as a political question.
Constans noted that OFS would be applying for certification as a pre-apprenticeship program by the Department of Labor.
Bruer asked whether or not staff had started a dialogue with the trades regarding funding for the sake of transparency. Clingan said he had a general conversation with Cavanaugh. Bruer said that Mr. Cavanaugh didn’t represent the building trades.
Rummel asked what the differences were among apprenticeships and living and prevailing wages. Rhodes-Conway said that prevailing wage is surveyed county by county, trade by trade and that it reflects the standard of what people are being paid. She said it is problematic in areas where there’s not a lot of work or not a lot of unions. She also said that apprentices make less than journeymen.
Mary Watrud of Construction Training, Inc. noted that apprentice rates vary by trade and the average wage is $16 per hour and goes up over the course of the apprenticeship. Apprentices must be registered in a state authorized program.
Bruer said that, for the record, he is showing sensitivity to DBA and labor unions.
Watrud explained the differences between different labor unions.
Bruer discussed Carmen Porco’s complaint, and Clingan said that Porco’s concern is in his reading of the RFP in that the agency has to have worked on past City projects. The RFP does not state this but does require any awardees to work on City-assisted housing units.
Economic Development Higher Ground
Myrtle Wilhite, from Higher Ground Urban Farm, handed out letters of support relative to a proven model that has worked in other cities, in which three permanent jobs will be created in the city of Madison.
Wilhite pointed out that her organization did not incorporate as a non-profit due to Troy Farms, and if the Committee felt more comfortable with it, her organization could incorporate as non-profit; the Higher Ground Urban Farms Board would be in agreement with becoming a non-profit. Bartlett stated that he had no objections with it being a for-profit organization.
Terrie Anderson from the Community Ground Work at Troy Gardens spoke in support of Higher Ground Urban Farm’s proposal. Anderson does not believe that Higher Ground would be in competition with Troy Gardens and believes it is a great way to get more food on people’s tables.
As the Northside Timebank Coordinator, Anderson is very excited about the time people will serve in service to their community to bank credit to purchase food.
Schumacher noted that he wanted to make his concerns known that private corporations have less oversight. Schumacher said that if we are going to leverage the money to the maximum, one piece is that it must create jobs. Schumacher recommended that the Committee keep everything as is, with 50% a grant and 50% a loan, if the corporation keeps three people hired as FTEs for two years. If they do not keep three FTEs, then the 50% grant would become a loan.
Schumacher said he would be very supportive of agricultural programs, otherwise.
Sanders asked Schumacher why he came to the Committee with this request when it could have been handled at the Council level.
Bruer gave his concerns from the Common Council viewpoint that there is a bias toward business, which is being done in committee rather that at the council level.
Constans said that all funds for this project would be provided as loans with 50% as a contingent loan that reverts to a grant at the end of a two-year period. She said that part one of what Schumacher handed out to the Committee is contained in the standard contract language, and CDBG would track the job creation.
Schumacher handed out other language that he was requesting be substituted in the resolution that says that the conditional loan shall become due and payable beginning January 1, 2015, in quarterly installments, with zero percent interest.
Wilhite requested that the funds remain a grant instead.
Rummel asked for clarification on the original RFP.
Wilhite said the loan repayment would be contingent upon the success of the business.
Bartlett noted that the Committee had never had experience working with a for-profit and hoped it would be a strong partnership.
Clear said that both non-profits and for-profits have different advantages. Clear was concerned that this is a start-up and is concerned with the City getting into the angel capital business, for lack of a better term.
Clingan noted that we do business start-ups with Wisconsin Women’s Business Initiatives Corporation (WWBIC) and Madison Development Corporation (MDC).
Clear explained that this was similar to a TIF application.
Rhodes-Conway said that she thought it was a great proposal with great potential using this model and is worth the City’s investment since it is exactly the kind of thing the stimulus is meant to support. She said that perhaps an appropriate motion would be to move acceptance of the proposal and direct staff in the contract process to include the first part of Schumacher’s statement with language that half of the funding would be contingent on three FTE’s for one year. She also suggested making this a condition on all proposals.
Whitesel thought this would deter people from taking a chance, as it would create a very severe standard. The Committee and Alders discussed whether or not this would be a good idea.
Bartlett referenced discussion at the last meeting regarding changes to an RFP and how some Committee members were reluctant to consider changing a proposal once it has been accepted.
Bruer moved reconsideration/Bidar-Sielaff seconded.
Rummel said, however, that we’ve already had a process and made a decision and pointed out that it would be very problematic to change a business model.
Rhodes-Conway said that we can learn from the CDBG office since the process has been already engaged.
Clingan pointed out that start-up loans do happen with CDBG money already, but they work due to the diligence of organizations like MDC and WWBIC.
Bidar-Sielaff noted the existing standard contract language sets up a higher standard for job creation.
Rood said that if a business funded by WWBIC fails to meet their job creation requirement, they have to repay $1,000 for each FTE.
Schumacher said the primary concept is to create jobs.
Markofski said that he was ready to vote to maintain the original recommendation. He noted that this proposal was vetted by staff and that the Committee has already spoken. Markofski also said he was appreciative and understood the concerns, but we’ve already made the decision once.
Wilhite noted that the SBA loans were uncollateralized, and the requirements that are being asked for this loan are almost ridiculous.
Bruer noted that the Common Council members should always feel they can come back to the Committee with concerns and questions and thanked the Committee for its consideration.
Bidar-Sielaff appreciated the alders looking at this carefully and that this brought forth clarification of standard contract language.
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