Consideration and Approval of Contract:  Consideration and Approval of Professional Services Contract for Flagstaff Police Department Employer Assisted Housing Program (FPD-EAH) (Approve contract with Housing Solutions of Northern Arizona, Inc. to Administer Employer Assisted Housing Program for Police Department Employees).

1) Approve the award of the Professional Services Contract to Housing Solutions of Northern Arizona, Inc.; and
2) Authorize the Interim City Manager to execute the necessary documents.

City Council authorized the use of $90,000 in general funds in the 2014-2015 Budget for the purposes of an Employer Assisted Housing Program for personnel of the Police Department. The goal of the FPD-EAH Program is to add a housing based incentive (matching funds of up to $7,000) to assist with recruitment and retention of police officers and dispatcher personnel for the Flagstaff Police Department.  Housing Solutions of Northern Arizona, Inc. has been selected as the most qualified respondent through a Request for Statement of Qualifications process to administer this program.

City Council authorized the use of $90,000 in general funds in the FY 2015 Budget for the purposes of an Employer Assisted Housing Program for personnel of the Police Department.   Funding is available in the FY 2016 budget in account 021-05-106-0361-4-4290 as the funding was carried forward.
 
The budget for this Program includes both the program and administration. It is estimated at least 11 households will benefit from the FPD-EAH Program. Administrative fees to Housing Solutions of Northern Arizona, Inc. (HSNA) are $1,000 per matching loan, to be paid at the point of closing.

While Council has not acted on the award of this specific contract previously, City Council did authorize the use of $90,000 in general funds in the 2014-2015 Budget for this purpose.

1) Approve the contract award as recommended and authorize the Interim City Manager to execute the necessary documents.
2) Do not approve the contract for the Flagstaff Police Department Employer Assisted Housing Program and publish a Request for Statement of Qualification allowing other entities to submit proposals.
2) Hire staff to operate the program in-house with an increased administrative cost.
3) Do not implement the program.

The City of Flagstaff is experiencing high turnover with dispatch personnel and sworn police officers. The intent of the FPD-EAH program is to provide an employee benefit to eligible employees, helping them to open the door to homeownership and act as an employee retention and attraction tool.

Many officers with smaller households make too much money to qualify for existing down payment and closing cost programs limited, due to funding sources, to low/moderate income households. The Police Department, Human Resources and the Housing Section worked together to design the a program to provide matching funds of up to $7,000 toward the down payment on a home for sworn officers and dispatch personnel.

Staff issued a Request for Statement of Qualifications (RSOQ) for Professional Services, and was advertised on February 22, and March 8, 2015. One statement was received and opened on March 30, 2015. An evaluation committee comprised of 5 members, including one not employed with the City, determined Housing Solutions of Northern Arizona to be most qualified.   

HSNA will provide all services necessary to design and market the program, conduct outreach, ensure equal opportunity, process applications, ensure eligibility and select homebuyers.

Dispatch personnel or sworn law enforcement officers of the Flagstaff Police Department are eligible for assistance (“Eligible Buyers”) when meeting the following criteria:

• Be employed by the City of Flagstaff as for a minimum of 12 months. In addition, sworn officers must have successfully completed the Police Academy and no longer be on probation
• Not have owned a home within the Flagstaff Metropolitan Planning Organization (FMPO) boundary within the last three years
• Complete homebuyer education and one-on-one housing counseling
• Occupy the home assisted with EAH funds as their principal place of residence
• Home to be purchased must be within a prescribed area. The prescribed area is defined consistent with the residency requirement already in place for Police Department employees
• Home purchase price may not exceed 125% of the FHA 203(b) mortgage insurance limit for Coconino County (Adjusted annually, currently $452,812)
• Housing-to-income ratio cannot exceed 35% of gross monthly income and total debt-to-income ratio cannot exceed 45% of gross monthly income
• Mortgage obtained by the buyer must be a 30-year, fixed rate with competitive interest rate.
• The home must be livable, passing lender guidelines for occupancy and purchase.

The maximum assistance provided through the PD-EAH Program to employees of the Flagstaff Police Department is as follows:

• Maximum amount of financial assistance is $7,000.00 per employee.
• Total amount of financial assistance provided will be based on employee contribution. The program will match employee contribution to the home purchase on a 1-to-1 basis with up to $7,000.00 of employee funds matched with up to $7,000.00 of EAH funds. The EAH program will also match gifts from immediate family members.
• PD-EAH financial assistance will be forgiven over a 7-year period. Financial assistance will be immediately repaid by the employee if any of the following occur: (1) employment with City of Flagstaff terminates for any reason; (2) home is no longer owner-occupied; (3) employee refinances home to access home equity – refinance with no cash out is permitted and EAH assistance will subordinate; (4) information provided to Housing Solutions or City of Flagstaff at time of assistance is determined to be fraudulent.

HSNA is ready to proceed with program implementation and will begin upon an issuance of a Notice to Proceed from the City of Flagstaff, pending Council approval of the contract.

City Council authorized the use of $90,000 in general funds in the FY 2015 budget for the purposes of an Employer Assisted Housing Program for personnel of the Police Department. Funding was carried forward to the FY 2016 budget. The initial budget for this Program is $90,000 including both the program and administration. Administration fees to Housing Solutions of Northern Arizona are $1,000 per contract closed. 

The funding for this program is a result of the repayment of loans made through the Community Homebuyer Assistance Program (CHAP).  Funded with General Funds, the CHAP program began in 2009 and worked increases homeownership in Flagstaff through the provision of down payment and closing cost loans to middle income (up to 125% AMI) first time homebuyers. Funding for the CHAP program was discontinued in the 2008/2009 budget year due to budget cuts, however, existing loans continue to be paid off.  
 

The administration of the FPD-EAH program will provide homebuyer education, counseling and financial assistance in order to increase homeownership opportunities to eligible sworn police officers and dispatch personnel. Additionally, the program will serve as a recruitment and retention tool for the City of Flagstaff's Police Department.

Consult: A Request for Statements of Qualification was issued on February 19, 2015 and the proposals were due to the City’s Purchasing Office by 3:00 pm on March 30, 2015. At that time, a representative from Purchasing opened the sealed bids and recorded that Housing Solutions of Northern Arizona was the sole respondent. An evaluation team comprised of three internal employees of the City of Flagstaff, a representative from the Flagstaff Police Department and a representative from the mortgage and lending industry.

1) Do not approve the contract for the FPE-EAH and publish a Request for Statement of Qualification allowing other entities to submit proposals to operate Program.
2) Hire staff to operate the program in-house with an increased administrative cost.
3) Eliminate the program.