Staff and the Community Development Board recommend the City Council approve an additional $155,000 in CDBG funding allocation to NeighborWorks Montana to complete infrastructure improvements within the C & C manufactured home community on South Billings Boulevard. The City Council approved allocating about $385,000 to this project in May 2020 as part of the City's FY2021 CDBG Budget (See attached City Council Agenda and Memo from the May 11, 2020 Meeting).
 

Issue: NeighborWorks Montana has requested additional funding to carry out infrastructure improvements for the C & C Community project. The cost of building materials is at a historic high as the coronavirus pandemic has caused building material availability limitations, disruptions in distribution, and increased demand. The project’s Request for Bids process resulted in one submission and the bid exceeded engineering estimates by nearly $140,000 without contingency considerations. If additional funding is not awarded, important safety improvements (fire hydrant, drainage, and asphalt improvements) would be eliminated from the project scope.
NeighborWorks Montana has invested over $2.4 million in the project. Last fiscal year, the City of Billings allocated $385,000 in Community Development Block Grant (CDBG) funding for the infrastructure improvements. An additional allocation of $155,000 would bring the total CDBG award to $540,000; eighteen percent of the total project costs to date.   

Location: The property is located at 307 South Billings Boulevard and is within the Billings city limits in the Southwest Corridor area. It is served by municipal water and sanitary sewer systems, has minimal on-site storm drainage system, private utilities, and irrigation water from the adjacent Suburban Ditch along the west side of the property.

Improvements Needed: A complete Property Condition Assessment and Report was completed by Sanderson Stewart. Due to the 70+ years of use, degradation of the property has occurred to the infrastructure features. The project will consist of replacement of all asphalt paving, storm drainage improvements, and installation of two fire hydrants. There are signs indicative of subsurface pavement failures, which would require additional excavation of gravel/subgrade below the pavement surface.

Organizational Strengths: NeighborWorks Montana staff has significant experience in affordable housing development, specifically in Resident Owned Communities, to bring forth successful projects. NeighborWorks Montana has assisted eleven resident owned communities form in Montana with 425 homes, attracting over $12.3 million in acquisition financing and $7 million in infrastructure investment. Staff has extensive knowledge, experience, and formal education to ensure the long-term viability of the project.

Consistency with Adopted Plans: The project is consistent with the City’s five-year Consolidated Plan. Housing cost burden, affordable housing availability, and homeownership opportunities for minorities are the three most significant issues identified through the City’s Housing Needs Assessment, Housing Market Analysis, and the Analysis of Impediments to Fair Housing Choice www.BillingsMT.gov/CDreports
 

• C & C Community provides very affordable housing for 60 low-income families.
• Surrounding property owners would benefit from a neighboring community that is safer with enhanced curb appeal.

City Council may:

• Approve funding for the proposed project, with or without conditions. An increased funding allocation to support this infrastructure project would assist the City in meeting affordable housing needs while ensuring compliance for timeliness deadlines through FY 20-21.
• Not approve funding for the project. NeighborWorks Montana would need to limit the scope of this project, impacting quality and safety for sixty resident families. The project addresses areas including storm water management, fire hydrants, street pavement conditions and other basic infrastructure that is in very poor condition in this residential development.

An adverse financial outcome to the City is not anticipated and the commitment of these funds will help the City to meet CDBG federal timeliness requirements. The City has sufficient funding to carry out ongoing home repair, home buyer, poverty-impact, and foreclosure programs through the program year-end in June 2021.

Staff and the Community Development Board recommend the City Council approve an additional $155,000 CDBG funding allocation to NeighborWorks Montana to complete resident owned C & C Community infrastructure improvements.