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PRHSPSC PKT 01-25-1999 (I, , I' ,-i " - , < City of Federal Way CITY COUNCIL PARKS, RECREATION, HUMAN SERVICES & PUBLIC SAFETY COMMITTEE Monday, January 25, 1999 12:00 p.m. City Hall Administration Conference Room REVISED AGENDA 1. CALL TO ORDER 2. - PUBLIC FORUM 3. COMMISSION COMMENTS 4. APPROVAL OF JANUARY 11, 1999 SUMMARY 5. COMMITTEE BUSINESS A. B. CDBG Economic Development Set-Aside Soroptimist Flag Display/Campus Drive Action Infonnation Parker Schroder 6. NEXT MEETING - February 8,1999 - 5:30 p.m. ADJOURNMENT 7. Staff: Jennifer Schroder, Director Sue Floyd, Administrative Assistant 661-4041 Committee Members: Jack Dovey, Chair Jeanne Burbidge Linda Kochmar . ' :'" '¡', >c.ity'<:~f'~~d'~~âl~~ÿ,~:;;~:jr ' );;~~;i;'!i~j:~~l:'<~,';;;:;};::;:i;;~;i~::':;;~<:;~{~Ò~;;;t:;t~:i. City Council Parks. Recreation. Human Services & Public Safety Committee 1999 Calendar (20d & 4th Monday of each month) . .<~"; ;': ':"",5'o.',30'p' ~,In'o' "'0' '," '" "',,:i,I:;':':')':f:!::i*:;>l~,~oO' '", ,,;'~:~"'~;, :.'"',:.:,,;i::-.,;'-:',, ,:"..~!:;..", ,"',' :::'~!r:"'1i~;¥j¡:h'~.;' ,'to, "noQ!l:~;"}",,ti<'.(,~'::,<~:rf4~!i1;" January 11 February 8 January 25 February 22 March 8 March 22 April 26 April 12 May 10 May 24 June 28 June 14 July 12 August 9 July 26 August 23 September 13 October 11 September 27 October 25 November 8 November 22 December 27 December 13 Time: Meetings held on the second Monday of the month are at 5:30 p.m. Meetings held on the fourth Mondays of the month are at 12:00 noon. Place: 2nd Floor Administrative Conference Room, unless otherwise advertised. Agenda Titles/Packet Material: Due to the Administrative Assistant before noon on the Tuesday prior to the meeting. Committee Members: Jack Dovey, Chair Jeanne Burbidge Linda Kochmar City Staff: Jennifer Schroder, Director of PRCS (661-4040) Sue Floyd, Administrative Assistant (661-4041) - City of Federal Way City Council PARKS, RECREATION, HUMAN SERVICES & PUBLIC SAFETY COMMITTEE Monday, January 11, 1999 5:30 p.m. City Hall Administration Conference Room SUMMARY In attendance: Council Committee Chair Jack Dovey; committee members Linda Kochmar and Jeanne Burbidge; Jennifer Schroder, Director of Parks, Recreation and Cultural Services; David Wilbrecht, Deputy Director of Parks, Recreation and Cultural Services; Mary Faber, Recreation and Cultural Services Manager; Pat Richardson, Assistant City Attorney; Ed Swan, Neighborhood Development Specialist; Chief Ron Wood, Public Safety Department; Commander Dan Coulombe, Public Safety Department; Lt. Paul Rubenstein, Public Safety Department; Laura Camden, Police Sérvices Officer; Sue Floyd, Administrative Assistant; Guests Barbara Reid, David Kaplan, Bob Kellogg Committee member Linda Kochmar called the meeting to order at 5:30 p.m. in Chair Dovey's temporary absence. ADDITION TO AGENDA LINDA KOCHMAR MOVED, JEANNE BURBIDGE SECONDED A MOTION TO ADD "RED, WHITE AND BLUES FESTIVAL" TO THE AGENDA. MOTION PASSED. COMMISSION COMMENTS Barbara Reid, Chair, Parks and Recreation Commission, updated the committee on the proposed 1999 work plan that was discussed by the Commission on January 7, 1999. The Commission will continue with the items from the 1998 work plan, which include Celebration Park, Skate Park, Wedge wood Park and the updated Comprehensive Plan. Regarding Celebration Park, Reid noted, items to be completed includ~ the dedication ceremonies, signage, commercial sponsorships, working with the Arts Commission on public art and a usage standards guide. The Commission would like direction on the dedication ceremony funding. As far as funding for the Wedgewood Neighborhood Park completion, it has been recommended as part of the City Manager CIP package to be considered by the City Council. Skate Park has been funded through design only. The Commission, at their January 7 meeting, expressed their concern about the Mayor's suggestion that the Youth Commission raise $50,000 for the park. Reid noted that it was not easy to raise the money for Celebration Park, and it would be virtually impossible for the Youth Commission to raise $50,000, The majority of the Youth Commission are academically oriented and do not have the time to anything above what they are doing now, Other items the Commission would like to add to their work plan are- as follows: 1) Alderbrook Park renovation and maintenance of children's play area; no budget has been established for this project. 2) Update Park Facility Guide by neighborhood or geographic area. 3) French Lake Park Master Plan: The Commission had concerns about future Lakehaven development which could impact the park, 4) School District Bond Issue: published reports indicate that the School District wants to utilize Steel Lake to build a community center. 5) Canoe Club: a decision needs to be made regarding the canoe club practicing and racing on Steel Lake, which is against City ordinance. 6) Neighborhood Park Development. 7) Communications Plan: quarterly insert in recreation brochure, park guidelines, awareness program. The Commission will vote on their work plan in February, PUBLIC FORUM Bob Kellogg reported that Dr. Maynard Campbell has expressed a desire to look into a fund raising project for skate park, Mr. Campbell belongs to two Federal Way Kiwanis clubs and they appear interested in obtaining the naming rights to skate park (i,e" Kiwanis Skate Park), Ms. Schroder responded that Kiwanis should submit a proposal to the City for Council Committee review, David Kaplan noted that when researching the dollar figure for the naming of skate park, look into the cost of naming of the theatre, portions of Celebration Park, etc, Mr. Kaplan discussed the City's web page for Celebration Park, and felt it was outdated, He suggested deleting the outdated information and revising the format. Parks, Recreation, Human Services & Public Safety Council Committee January 11, 1999 Summary Page Two Ms. Schroder responded that the department is responsible for updating and changing the information; staff will follow- up on his request. APPROVAL OF NOVEMBER 23. 1998 SUMMARY JEANNE BURBIDGE MOVED, LINDA KOCHMAR SECONDED A MOTION TO APPROVE THE DECEMBER 14,1998 SUMMARY AS WRITTEN. MOTION PASSED. BUSINESS ITEMS APPROVAL OF LOCAL LAW ENFORCEMENT BLOCK GRANT The Department of Public Safety was awarded a Local Law Enforcement Block Grant in the amount of $110,973, in addition to the City's match of $12,331, for a total grant amount of $123,304 for one police services officer and a vehicle for the SeaTac Mall. LINDA KOCHMAR MOVED, JEANNE BURBIDGE SECONDED A MOTION TO ACCEPT THE 1998 LOCAL LAW ENFORCEMENT BLOCK GRANT FOR $110,973 WITH THE CITY'S MATCH OF $12,331 FOR A TOTAL GRANT AMOUNT OF $123,403 TO BE AWARDED TO THE DEPARTMENT OF PUBLIC SAFETY TO FUND ONE POLICE OFFICER AND ONE VEmCLE. MOTION PASSED. CELEBRA nON PARK STATUS Mr. Wilbrecht reported that Celebration Park is substantially complete. The contractor has notified the City that they are done, and staff is currently working on the punch list items. After a discussion with the City Manager, it was agreed to leave the park closed to the public until the end of February, when it will be evaluated. If it is not ready, it may be closed until April. Mr. Wilbrecht will give a budget status report at the March 8 meeting. Ms. Kochmar would like to have the same report presented to the Finance/Economic Development and Regional Affairs Council Committee. After discussion, the Council Committee agreed to hold the park dedication sometime in May. Mr. Dovey noted thatthe Little League teams would like to put on a parade and play opening games on dedication day. SKATE PARK Mr. Wilbrecht reported that the consultant is in the process of the design phase and should be complete by the end of this month, including preliminary costs. This information will be presented to Council prior to the CIP review. SORopnMIST FLAG DISPLAY/CAMPUS DRIVE Soroptirnist International has asked the City to assist with the maintenance of the Flag City USA display on Campus Drive. Staff noted that the City has received this same request for the last three to five years. The flags are located on the City's right-of-way. One idea is to have Soroptirnist dedicate the flags to the City and then it would be the City's responsibility to maintain them, or staff could contact King County, as the flags do benefit the King Cpunty Aquatics Center. Soroptirnist does not have the funds to continue to maintain and/or replace the flags on a yearly basis. Staff will contact the Public Works Department to confirm the poles are within the right-of-way, and with Rose Ehl of Soroptimist regarding the history of the flags (who installed them, who has ownership, etc.) prior to the next committee meeting, 1999 RED, WHITE AND BLUES FESTIVAL Staff reported that the 1999 Red, White and Blues Festival is being planned for Celebration Park instead of Saghalie Park. Staff is working with the Fire Department to obtain their approval of the plan. NEXT MEETING January 25,1999,12:00 noon ADJOURNMENT The meeting adjourned at 6: 10 p,ll1. - Item SA CITY OF FEDERAL WAY CITY COUNCIL PARKS, RECREATION, HUMAN SERVICES, AND PUBLIC SAFETY COMMITTEE Date: January 15, 1999 Camron Parker, CDBG Coordinator C[) Economic Development Strategies USingt~ Community Development Block Grant From: Subject: BACKGROUND During the October 12, 1998 Parks, Recreation, Human Services, & Public Safety (PRHSPS) Committee meeting, Human Services staff presented the eligible uses of the Community Development Block Grant (CDBG). At that meeting, the Committee requested further infonnation on eligible economic development activities under the CDBG program, and on the implications of setting aside a portion of the annual grant for such purposes. This memo outlines the process for and implications of a CDBG set-aside for eligible economic development projects. Attached to this memo are the Council adopted Housing and Community Development Plan Four- Year Strategies. (Attachment 1). These strategies include proposed new language that accommodates a funding set-aside for eligible economic development purposes. Also attached is infonnation on economic development activities that are eligible under the federal CDBG program regulations (Attachment 2). The PRPSHS Committee's recommendation on this action item will be forwarded to City Council for consideration at the Council's regular meeting of February 2, 1999. .' BLOCK GRANT ELIGIBILITY AND REQUIREMENTS The purpose of the Community Development Block Grant is to help develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low-and moderate-income individuals. All CDBG projects must fall within the parameters of this mission statement. Working toward this mission, the City has the option to fund the CDBG eligible projects of local non-profit organizations or, under limited circumstances, for-profit corporations. Assistance can be given in both grant and loan form. In the past, the City of Federal Way has focused r-- _')i-I PRPSHS -- CDBG Ec Dev Page 2 of 5 predominantly on grant assistance to projects implemented either by the City itself or by non- profit organizations. All CDBG projects must (I) meet local funding strategies, (2) meet county-wide funding objectives, (3) be an eligible activity as set forth in the federal CDBG program regulations, and (4) meet one of three national objectives. During implementation, the project must submit quarterly perfonnance measures and comply with any and all federal regulations that may apply to the project (these may include mandatory wage rates, hiring practices, environmental review, etc.). With few exceptions, CDBG projects that include assistance to for-profit businesses have an additional set of standards to meet. For-profit businesses are required to prove that the level of public benefit derived from the activity is proportionate to the amount of CDBG assistance being provid.ed. There are two alternatives for for-profit entities to prove public benefit (most all projects use the first alternative, as the second is difficult to assess and monitor). . 1. Job creation or retention: one full-time equivalent, pennanent job must be created or retained per $35,000 in CDBG funds. If the job is to be retained, substantive evidence must be made that the job would be lost without CDBG assistance. 2. Provision of goods and services to low- and moderate-income individuals: at least one low- or moderate-income individual must be receive new goods or services per $350 in CDBG funds. For example, if a for profit entity received a $35,000 CDBG loan, that business would have to document that their goods or services directly benefit at least 100 low- and moderate-residents within the business' service area. It is important to note that the job creation regulations do not mandate wage rates for new or retained jobs. It is commonly viewed that a new or retained low-wage job has little public benefit as the wage earner will remain a low- and moderate-income individual (therefore remaining eligible for human service programs). To address this, many public agencies require that new jobs be offered at a "family wage." In general, this means that new jobs must average at least $8.00 an hour and include benefits. A SET-AsIDE FOR ECONOMIC DEVELOPMENT A suggestion has been made to set aside a portion of the City's block grant each year for economic development purposes. This section discusses the process for establishing a set-aside and the implications of a set-aside. The implications are divided between general effects to the CDBG program and potential outcomes in the community. - 1/15/99 I:\ßG PROJS\ECDE V\EC DEV2, DOC 5A .cJ- PRPSHS -- CDBG Ec Dev Page 3 of 5 Process for Establishment Every year, the City hosts a competitive application process where local non-profit organizations or City departments can apply for CDBG funding. Recommendations for funding are made by the Human Services Commission based upon the Council adopted Four-Year Strategies. The City Council then uses the same strategies to guide funding decisions. A set-aside for eligible economic development projects could be established by amending the second strategy as follows (proposed text is underlined): Strategy Two: Prioritize and fund projects that strengthen the City's infrastructure and stimulate economic development. Approximately <$100,000 or 15% (choosing one» of the annual CDBG allocation will be targeted toward projects categorized under this strategy. (proposed text also included in Attachment One) Should the Council choose to establish a set-aside, it may be implemented as follows. When the City releases its application for CDBG funding in the year 2000, special mention would be given to the existence of a set-aside. This will allow local non-profit organizations or City departments to prepare an application targeting the set-aside funds. When all CDBG applications are received, they will be individually evaluated. After evaluation, special consideration may given to applications eligible for the set aside funds. Should eligible funding requests not reach the set-aside amount, the remaining amount would become available to the general applications. Should funding requests exceed the set aside amount, applications eligible for the set-aside will be ranked and recommended for funding up to the established amount. Eligible applications that are excluded from the initial set-aside recommendation may continue to compete with the general applications. Implications: Effects on the CDBG Program An economic development set-aside will impact the CDBG program in several ways. In general, a set-aside can be beneficial. A set-aside adds a measure of stability to CDBG funded programs. Under a competitive application process, the applicant can be assured that there will be a dedicated source of funds to apply for every year. A set -aside will also guarantee a diverse project assortment in the annual CDBG portfolio. On the other hand, a set-aside will decrease the program's flexibility and will limit the funding discretion of the Council. The block grant program, at just over $650,000 in 1999, currently has a federal cap for grant administration ($73,000), a federal cap for human service programs ($83,500), and a quasi-set-aside for the Housing Repair Program (funded every year, averaging $150,000). Assuming a $100,000 set-aside for economic development, less than $250,000 will remain in discretionary CDBG funds. This also pennits a scenario where the Council may be obligated to approve a project with dedicated funds while turning away potentially more suitable projects that do not qualify for the dedicated funding source. A set-aside will also effect how CDBG addresses local plans and policies. CDBG projects have continuously worked toward achieving the goals within the Comprehensive Plan. Diversifying project types to include economic development will broaden the number of plan goals that the 1/1 5/99 [:\BG PROJS\ECDF V\ECDEV2, DOC c- , :J.' - - PRPSHS -- CDBG Ec Dev Page 4 of 5 CDBG program addresses. Similarly, the set-aside will promote a balanced distribution of projects among the City's three CDBG funding strategies. Implications: Outcomes in the Community The impact of a set-aside will ultimately take shape in the community. Public investment in economic development will help guide private development in Federal Way toward the community's long tenn vision. Targeted improvements to an area's public amenities (such as new or improved parks) and infrastructure (rebuilding streets, sidewalks, and utilities) act as a catalyst for private investment. Public amenity and infrastructure projects can often be large in scale. If the CDBG set-aside is to fund these types of projects, other sources of significant public or private investment will have to be identified for a project to be implemented (this issue is' discussed in Attachment Two). PubliC-investment through the block grant will also help ensure that the economic development needs of low- and moderate-income residents are being met. This may take the fonn of upgraded public infrastructure in a predominantly low- and moderate-income neighborhood, or funding a portion of a new community facility. Also, certain block grant funded projects may require job creation as a measure of public benefit. New jobs, at family wage levels, will help diversify the city's job base and may help move families above low- and moderate-income levels. SUMMARY The mission ofthe Community Development Block Grant (CDBG) is to help develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low-and moderate-income individuals. Eligible economic development projects can assist in achieving this mission. A set-aside for economic development activities can be established by the City Council through an amendment to the adopted Four- Year Strategies. Such an action will work to encourage a diverse project assortment in the annual CDBG portfolio. STAFF RECOMMENDATION For the purposes of encouraging a diversity of CDBG project types and for the purposes of meeting the economic development goals of the Comprehensive Plan, establish a set-aside within the CDBG program to fund eligible economic development projects. The set-aside would be of a targeted a~ount ($100,000) or percentage (15%) of the annual CDBG allocation and be expressed by amending the CDBG Four-Year Strategies (as attached). The set-aside would begin for the year 2000 CDBG application cycle. - 1115/99 I :\BG PROJS\ECDEV\ECDEV2, DOC 5,[ - L( PRPSHS -- CDBG Ec Dev Page 5 of 5 COMMITTEE RECOMMENDATION I. The Committee recommends maintaining the past practice of considering economic development projects within the annual competitive application process and having no specific set aside of CDBG funds for economic development activities. The Committee forwards this recommendation to the full City Council for consideration at the February 2, 1999 meeting. 2. The Committee recommends to the full City Council an amendment to the CDBG Four-Year Strategies which adds a funding criterion to the second strategy. The additional criterion to set aside approximately $100.000 OR u% (choosing one) of the Community Development Block Grant each year for CDBG eligible economic development activities within the City. The set-aside is to be included in the year 2000 CDBG funding cycle. The Committee forwards this recommendation to the full City Council for consideration at the February 2, 1999 meeting. 3. The Committee forwards to the full City Council a recommendation of its choice for consideration at the February 2, 1999 meeting. ApPROVAL OF COMMITTEE REPORT: Committee Chair Committee Member Committee Member 1/15/99 I :\BG PRO1S\ECDEV\EC D EV2, DOC T," J -- 1/ ~_/. ; ATIACHMENTI ¡g~nERRL ~~ Fn/ COMMUNITY DEVELOPMENT BLOCK GRANT HOUSING AND COMMUNITY DEVELOPMENT PLAN FOUR-YEAR STRATEGIES, 1996-1999 The Housing and Community Development Plan evolved from the 1993 Community Development Block Grant (CDBG) Local Program Policies. The four-year strategies within the' Plan were developed in 1994 and updated in 1995. These strategies provide guidelines for the allocation of CDBG funds and are consistent with the City's Comprehensive Plan developed under the Growth Management Act and the Human Services Comprehensive Plan. GOAL STATEMENT Service needs for City residents far outweigh the availability of resources. As a relatively newly incorporated jurisdiction with a large and diverse population, the City is faced with the challenge of providing services that address needs in the areas of affordable and special needs housing, human services and community development. The City will use CDBG funds to develop a viable community in which quality of life is enhanced by providing decent housing and a suitable living environment and expanding economic opportunities for low- and moderate-income persons. OBJECTIVES " ~ To fund projects which address local needs and strategies ~ To ensure that the basic human services needs oflow- and moderate-income persons are addressed ~ To adequately address the City's housing needs to accommodate projected growth in low- and moderate-income households, as well as senior and special needs populations ~ To preserve the existing housing stock > To stimulate economic development and strengthen the City's infrastructure .S-i -- /-f F our- Year Strategies Page 2 of 5 A IT ACHMENT I NEEDS The City of Federal Way has identified housing and non-housing community development needs through public involvement activities, studies, needs assessments, and planning processes. I. Public and Community Facilities Improvements - Senior and Community Centers, Child Care Centers, Parks and Recreation Facilities, and Health and Social Services Facilities which predominantly serve low- and moderate-income persons and address severe health and safety problems. 2. Housing - Affordable housing for low- and moderate-income people, seniors, special needs populations, transitional housing and emergency shelters, and preservation of existing housing stock. 3. Accessibility - Modifications to community facilities and existing structures to remove barriers and improve safety conditions especially for elderly and disabled persons. 4. Infrastructure Improvement - Neighborhood revitalization projects such as Surface Water Improvements, Street, Sidewalk and Pedestrian Crossing Improvements, Transportation Improvements, and Street Lighting. 5. Public Services - Projects which meet the following City Council human services goals: ~ support basic human needs through funding of emergency services; ~ support a strong service delivery system that increases public safety; ~ provides support that supplements federal, state, and county programs designed to increase self-sufficiency and independence; and ~ support service models that improve community-based collaboration and build strong neighborhoods. 6. Planning and Administration - CDBG Program staffing and administration, planning for affordable housing resource development and potential annexation areas. -- 1115/99 l:\BGGENRAL\ßGSTRA TSDOC ,) ~(, ,-/ F our- Year Strategies Page 3 of 5 AlTACHMENT I STRATEGIES The City of Federal Way adopts the following three strategies to guide funding decisions for the annual Community Development Block Grant allocation. Strategy #1 Develop a range of housing opportunities aimed at increasing the supply of affordable housing to accommodate the projected growth in low- and moderate-income households. Create housing opportunities for seniors, youth, special needs groups and impact the availability of transitional housing and emergency shelters. ~ - Activity 1 Preservation of housing stock in existing neighborhoods has been cited as an important community value in Federal Way, one which played a large role in the community's decision to incorporate. The City will maintain a Housing Rehabilitation Loan and Grant Program to maintain health and safety standards in the homes of low- and moderate- income households and persons with disabilities. ~ Activity 2 According to established service providers, suburban homelessness is increasing. There is a limited supply of transitional and emergency shelter facilities in South King County to meet this overwhelming need. The City will continue to support local and regional shelter and transitional housing service providers. The City will encourage and support more homelessness prevention services, including youth shelter services. ~ Activity 3 The City will explore a variety of methods to increase the supply of affordable housing for low- and moderate-income families. The City will: . Consider participating in a South King County regional entity to addres~ housing needs. . Assess the value of pooling technical resources between jurisdictions to assist in the development and implementation of housing policies and programs. . Look at the benefits of collaborative efforts to coordinate local government money and resources in a way that will attract greater private and not-far-profit investment into affordable housing. . Consider funding homeownership programs such as downpayment assistance, sweat equity, homebuyer education, community land trust or those that reduce development costs or reduce mortgages. .- II 15/99 I:\BGGENRAL\BGSTRA TS,DOC ,,0- ¡ .J F our- Year Strategies Page 4 of 5 A IT ACHMENT 1 Strategy #2 Prioritize and fund projects that strengthen the City's infrastructure and stimulate economic development. Approximately <$100.000 or 15% (choosing one» of the annual CDBG allocation will be targeted toward projects categorized under this strategy. ~ Activity I The City will seek opportunities for public funding of capital facilities, services and infrastructure by working with the Human Services Commission, and soliciting input from the Management Team. ~ Activity 2 The City will consider funding public and community facilities improvement projects which address safety and accessibility issues particularly for the well-being of youth, elderly, and disabled persons. ~ Activity 3 The City will consider funding projects which encourage community development activities such as job creation, downtown and neighborhood revitalization, and those activities consistent with the City's Comprehensive Plan and Human Services Comprehensive Plan. ~ Activity 4 The City will consider funding capital transportation improvement projects which connect low- and moderate-income housing areas with vital services in the City. Strategy #3 Address human services needs which focus upon self-support systems that empowe!". families and communities to make contributions to their own well-being and enhance the quality of their lives. Provide technical assistance, planning and administrative services to increase perfonnance levels of CDBG program participants. ~ Activity 1 The City recognizes that problems faced by children and their families are complex in nature and can result in dysfunction and tragedy ifnot addressed holistically. Solutions to complex problems often require a variety of interactive approaches designed to create environments which provide people with the tools to help themselves. The City will fund projects and agencies with a holistic approach to service delivery and demonstrate the ability to leverage funds and network with other service providers. -. 1/ 15/99 I:\BGG ENRAL\BGSTRA TS,DOC 5/f _C¡ F our- Year Strategies Page 5 of 5 A TT ACHMENT I ~ Activity 2 The social environment for youth is often volatile and filled with life-threatening circumstances. Collective efforts between local community organizations, the School District, and the City, may provide effective solutions that positively impact the young people in Federal Way. The City will consider funding projects which provide "at-risk" youth with more recreational and educational alternatives. The City will fund projects and public service agencies which assist families with children in the areas of employment and youth services. ~ Activity 3 The City will participate in regional and local planning activities with King County, the South King County Community Network Board, and other funders and jurisdictions to coordinate funding approaches, policies and service delivery which facilitate a continuum of care for people. ~ Activity 4 Planning and administration funds will be used to administer the City's CDBG program and whep additional planning funds are available, special planning projects will be considered. I II 5/99 1:\BGGENRAL\BGSTRA TS,DOC c: "-~! - I I ATIACHMENT 2 ¡jIOf ~ 4 ED ERAL. ~~AY COMMUNITY DEVELOPMENT BLOCK GRANT ApPROACHES TO ECONOMIC DEVELOPMENT The Community Development Block Grant (CDBG) is bound by a categorized list of eligible activities. These activities are issued in federal CDBG regulations. Recipients of the grant have the ability to choose and fund any project that (1) can be classified as an eligible activity and (2) meets one of three national objectives. Using the federal regulations of the CDBG program and the City's Comprehensive Plan as a base, three economic development approaches arise. These approaches fall within the federal regulations while meeting numerous Comprehensive Plan goals and policies. After each approach is described, sections will discuss potential implementation steps and will identify additional public funding sources to support the approaches. ECONOMIC DEVELOPMENT ApPROACHES As stated in the City's Comprehensive Plan, "the vision for economic development in Federal Way is a focused economic development strategy intended to build a diverse economy and to achieve a better jobs and housing balance. The strategy encourages or speeds up the trends and transfonnations that are already occurring in this community." The Community Development Block Grant (CDBG) can assist in achieving this vision through the means of a coordinated approach. Three potential approaches are outlined below. Approach One: Downtown Development The Community Development Block Grant has the capacity to further a majority of the Center City goals within the Comprehensive Plan. This capacity can be tapped through spe.cific CDBG eligible activities. A downtown development approach may focus on one or more òf the following activities. ~ Public improvement activities in eligible areas This is the category under which the 1999 International District project is placed. CDBG will fund sidewalk and accessibility improvement within the district. This is an eligible activity because the district is within an area where 51 % or more of the residents have low- to moderate-incomes, and because the sidewalks are a direct benefit to citizens who can walk to the area (the local residents). Many of the other improvements planned for the International District are not CDBG eligible because they benefit the city as a whole rather than a specific low- and moderate-income neighborhood. Likewise, other public improvements can be undertaken in the area with block grant funding as long as the majority of the project's benefits are realized by the adjacent low- and moderate-income residential neighborhood. . .;; --! - I{ Economic Development Approaches Page 2 of 4 A IT ACHMENT 2 ~ Activities which suPport affordable housing development The Comprehensive Plan's ultimate vision for Downtown Federal Way is a high density, mixed use, transit friendly urban center. The impending Regional Transit Authority (RTA) transit center siting is one step toward achieving the transit friendly part of the vision. The block grant can playa significant role in achieving the mixed use part of the vision through activities that support new housing construction. Specifically, CDBG can fund acquisition and preparation of sites for affordable housing development or mixed use commercial development that includes an affordable housing element. ~ Direct assistance to for-profit corporations CDBG can assist for-profit entities developing in the downtown area, iftheyagree to prove public benefit through creation of jobs for low- and moderate-income residents. The opportunities for this type of assistance would be limited in the downtown area due to the types of jobs that would likely be created. The majority of job growth in the downtown will in the office and retail sectors. Office development may not be able to provide enough jobs suitable for low- and moderate-income individuals to meet the public benefit requirements. Retail development will provide jobs suitable for low- and moderate-income residents, however they may not be able to offer wage and benefit levels that move new employees beyond low- and moderate-income status. Approach Two: Small Business Development Through special allowances in the block grant program, there are two activities by which small businesses can be assisted with CDBO without the burden of proving public benefit through job creation. In both cases, assistance must be given to either a business owner that is a low- or moderate-income individual, or to a business with a service area completely within a low- and moderate-income neighborhood. ~ Facade improvement program The block grant can fund design and construction costs associated with improvements to the facade of a commercial structure or improvements that correct code violations. This activity could dovetail with the Downtown Development approach if the commercial stl~uctures being improved were in the downtown area. A facade program would be administered by either the City or by a non-profit organization. Applicant intake, eligibility, monitoring, and loan servicing (if assistance is given in loan fonn) would be perfonned by the City, a non-profit, or combination of both. Construction or design work would be contracted to a local architecture or construction finn. ~ Microenterprise assistance A microenterprise is a business having five or fewer employees, one or more of whom owns the business. Small loans or grants (typically less than $5,000) are given to microenterprise business owners to fund start -up or expansion costs. In most microenterprise programs, the loan or grant is packaged with some type of technical assistance in the form of entrepreneurial or basic accounting education, computer training, etc. Such a program would . I II 5/99 I:\BGPROJS\ECDEV\EDSTRA TS,DOC .5~ ~ . / Jì , ! Economic Development Approaches Page 3 of 4 A IT ACHMENT 2 be administered by the City, a non-profit, an institution of higher learning (most likely a community college), or a combination of the former. If assistance is given to a small business, the loan or grant contracts will stipulate that a majority of low- and moderate-income residents must benefit from the activity receiving public funding for the life of that funding. For example, a loan is given to a locally owned, non-franchise mini- mart within a low- and moderate-income neighborhood to improve their facade and correct code violations. After two years the business is changed to a golf pro shop. The service area of the business now expands to include a majority of moderate- and high-income neighborhoods. At this point, the full amount of the CDBG loan becomes due and payable. Approach Three: Business Park Development: Light Industry Many of the economic development activities eligible under the block grant are geared directly toward industrial development. This is due to the fact that jobs created in the manufacturing industry are likely to offer higher-level wages ("family wages"), which will reduce a family's dependence upon other human services. A program to encourage light industrial development within business parks will diversify the city's job base (manufacturing accounts for 3.8% of the jobs in Federal Way) while providing higher paying jobs for low- and moderate-income residents. CDBG can fund acquisition, construction, rehabilitation, or reconstruction of industrial projects if the improvements are carried out by the city or by a non-profit agency. Assistance to for-profit entities undertaking light industrial development can be given in the form of loans, loan guarantees, interest write-downs, grants, or technical assistance. In all cases, public benefit must be proven (job creation or retention). ADDITIONAL FUNDING SOURCES The City can increase its impact on economic development by coordinating block grant funding with other private and public funding sources. Additional public funding sources exist at every level of government. The Department of Housing and Urban Development, the S~all Business Administration, and the Economic Development Administration are all potential sources for additional public investment. At the state level, the Department of Community, Trade, and Economic Development, the Housing Finance Commission, and the Public Works Trust Fund, may also be viable funding sources for economic development activities. All the funding sources mentioned above will require the City to compete for funds. New local funding sources, such as a Local Improvement District (LID) or a Business Improvement District (BID) will not require competition and will be most effective in gaining participation of local property and business owners. LIDs and BIDs are both special self-assessments made by property or business owners within a specified boundary to fund specified projects. LIDs are designed to fund for public works projects. BIDs are designed fund business improvement programs (such as banners, festivals, cleaning and safety programs) and parking structures. The block grant can be used to supplement funds collected through both types of special self- II 15/99 I:\BGPROJS\ECDEV\EDSTRA TS,DOC Economic Development Approaches Page 4 of 4 A IT ACHMENT 2 assessment. For LIDs alone, CDBG could be used to pay the assessment oflow- and moderate- income property and business owners. IMPLEMENTATION Any of the economic development approaches within this memo will be new programs for the implementing agency (either the City or a local non-profit organization). The one exception to this being public infrastructure improvement projects. The various approaches described have differing levels of organizational complexity and will require different types of partnerships to implement an approach. The chart below describes how each approach may be implemented. ApPROACH POTENTIAL IMPLEMENTATION DOWNTÖWN DEVELOPMENT Public improvement activities Identify CDBG eligible projects in Comp Plan or CIPs -- complete with annual set-aside (partner CDBG wI LID or BID) Affordable housing development Release a Request for Proposals -- separately or through annual competitive application process Assistance to for-profits Identify entity to market, intake, negotiate, loan service, and monitor (King Cty Ec Dev Dept, EDC, Chamber of Comm) SMALL BUSINESS DEVELOPMENT Facade improvement program or Identify entity to market, intake, negotiate, loan service, and Microenterprise assistance monitor (City or Chamber ofComm wI bank or credit union) BUSINESS PARK DEVELOPMENT: LIGHT INDUSTRY Assistance to for-profits Identify entity to market, intake, negotiate, loan service, and monitor (King Cty Ec Dev Dept, EDC, Chamber of Comm) -. 1115/99 I:\BGPROJS\ECDEV\EDSTRA TS,DOC .- /, I <~/