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I2. Resolution 6166, PRO Housing GrantKALisPEii, Development Services Department 201 1st Avenue East Kalispell, MT 59901 Phone: (406) 758-7940 Fax: (406) 758-7739 www.kalispell.com/plannine REPORT TO: Doug Russell, City Manager FROM: Jarod Nygren, Development Services Director SUBJECT: Resolution of support for the city submission of the PRO Housing Grant Application to the U.S. Department of Housing and Urban Development MEETING DATE: October 16, 2023 BACKGROUND: Development Services staff intends to submit a U.S. Department of Housing and Urban Development Pathways to Removing Obstacles to Housing (PRO Housing) grant. The grant application is due Monday October 30, 2023, by midnight. If awarded the grant application will provide the city with staffing and consultant services needed to carry out SB 382. RECOMMENDATION: It is recommended that Council adopt Resolution 6166, recommending the City of Kalispell submit the U.S. Department of Housing and Urban Development Pathways to Removing Obstacles to Housing (PRO Housing) grant application. FISCAL EFFECTS: The City of Kalispell is requesting a grant award in the amount of $1,363,666.00. Grant award funding is broken down as follows: • Housing Study — $200,000.00 • Water Facility Plan — $400,000.00 • Wastewater Facility Plan — $400,000.00 • Growth Policy, Zoning, and Subdivision Updates — $3635666.00 Costs associated with the housing, water, and wastewater studies are based off recent projects procured by cities of similar size in the State of Montana and account for recent inflation. The Growth Policy, Zoning, and Subdivision Update cost is for a city Senior Planner Full Time Equivalent (FTE) for three years ($121,222.00 benefited wage rate x 3years). ALTERNATIVES: Deny the request. ATTACHMENTS: Resolution 6166 DRAFT PRO Housing grant application c: Aimee Brunckhorst, Kalispell City Clerk RESOLUTION NO. 6166 A RESOLUTION IN SUPPORT OF AN APPLICATION BY THE CITY OF KALISPELL TO THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT "PATHWAYS TO REMOVING OBSTACLES TO HOUSING (PRO HOUSING)" GRANT TO FUND STAFFING AND CONSULTANT SERVICES NEEDED TO IMPLEMENT SENATE BILL 382, APPROVED BY THE 2023 MONTANA LEGISLATURE. WHEREAS, the City of Kalispell proposes to submit a U.S. Department of Housing and Urban Development "Pathways to Removing Obstacles to Housing (PRO Housing)" grant in order to provide the city with staffing and consultant services needed to carry out SB 382; and WHEREAS, the City of Kalispell is requesting a grant award in the amount of $1,363,666.00, approximately broken down as a Housing Study at $200,000.00, a Water Facility Plan at $400,000.00, a Wastewater Facility Plan at $400,000.00, and the Growth Policy, Zoning, and Subdivision Updates at $363,666.00; and WHEREAS, the costs associated with the housing, water, and wastewater studies are based off recent projects procured by cities of similar size in the State of Montana and account for recent inflation; and WHEREAS, since the project satisfies a requirement from the 2023 Montana Legislature, the grant application should have the support of the City of Kalispell. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION 1. The Kalispell City Council approves and fully supports the application of the City of Kalispell for a U.S. Department of Housing and Urban Development "Pathways to Removing Obstacles to Housing (PRO Housing)" grant in order to provide the city with staffing and consultant services needed to carry out SB 382. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 16TH DAY OF OCTOBER, 2023. ATTEST: Aimee Brunckhorst, CMC City Clerk Mark Johnson Mayor City of Kalispell Pathways to Removing Obstacles to Housing (PRO Housing) FR-6700-N-98 DRAFT Application 10/11/2023 Table of Contents Exhibit A: Executive Summary..............................................................2 Exhibit B: Threshold Requirements and Other Submission Requirements ............ 8 ExhibitC: Need................................................................................9 Exhibit D: Soundness of Approach........................................................30 Exhibit E: Capacity..........................................................................50 ExhibitF: Leverage..........................................................................51 Exhibit G: Long Term Effects..............................................................52 Appendix: Forms and Certifications...................................................TBD Attachment A: Summary of Comments...............................................TBD r 1 Exhibit A: Executive Summary Kalispell is the regional trade center and the county seat of Flathead County, in the northwest corner of Montana. Kalispell is just a 45- minute drive south of Glacier National Park and a 20-minute drive north of Flathead Lake, the largest fresh -water lake west of the Mississippi. Since the railroad first put Kalispell on the map on New Year's Day of 18921 this town has been the center for housing, healthcare, education, commerce, government, and retail development in this remote valley along the Rocky Mountain Front. Current Census data indicates 28,450 people live within the 12.8 square mile city limits and another ±10,000 people live in a ring around Kalispell within its growth boundary. For perspective, Flathead County is home to 111,814 people living in a geographic area larger than the state of Connecticut. Prior to the Covid-19 pandemic, Kalispell was experiencing consistent population growth which placed it in the top three fastest growing Cal9my ALBERTA Letlibudge - Glacier A04orai Park Kalispell Spokane Flathead County MONTANA Bozeman f Hikers gather at Hidden Lake Overlook in Glacier National Park. Hunter D'Antuono — Flathead Beacon micropolitan areas in the United States from 2017 through 2019. A z micropolitan statistical area (MSA) is generally an urbanized area (city) with a population of at least 10,000 but less than 50,000 having a high degree of social and economic integration as measured through commuting ties within at least one county. Population growth was wildly amplified by the forces of the pandemic when many individuals and families sought an escape from stifling lockdowns required in urban settings, found new freedom in the opportunity to work from home with no reduction in wages and compensation, and discovered their home buying power exponentially stronger in this rural community. 4,500 4,000 3,500 m 3,000 2,500 u 0 2,000 1,500 Q 1,000 500 J J o L L L L L _500 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net Migration Natural Change —Population j Source: U.S. Census — Population and Housing Unit Estimates (PEP) J Post Covid, visitation increased in the valley with Glacier National Park recording the second highest visitation rate on record (behind 2017) with 3.1 million visitors in 20211 and over 3001000 believed to have been turned away: Glacier National Park was full. Indeed, many locals will say Kalispell is full. The 2020-2021 US Census named Kalispell the 3 FASTEST growing micropolitan area in the country. So, it's no wonder this historically bucolic, farming and logging community is feeling growing pains. Those growing pains are felt in terms of the effective 0 housing vacancy rates and median home price increases up 231% over the last ten years, with 59% of that median home increase occurring over last two years since the pandemic. This acceleration has created a need for a re -think of planning policies and procedures to be better prepared for the housing demands before us. Median Sale Price of Single Family Homes $0501000 $5501000 $4501000 $3501000 $2501000 $1501000 12131415161718 19 20 2122 Kalispell is a community bearing all the markings of "rural gentrification." That is, "the in -migration of more affluent urban and suburban populations into rural areas, drawn there by the charm of rural communities, the scenic beauty of rural spaces, and the lower cost of living." M Kalispell and the Flathead Valley have "survived the shift away from extractive industries... by following this model, turning to tourists, many of whom became residents." Ryanne Pilgeram (author: "The Gentrification of the Rural West," published February 4, 2022, by In These Times excerpted from the book "Pushed Out: Contested Development and Rural Gentrification in the U.S. West") highlights the surreal phenomenon occurring in communities like ours: But for many communities in the Rocky Mountains, the relationship between population and jobs is fraught. This transition does not necessarily mean the kinds of stable career opportunities that extractive industries created in the recent past. An influx of people, drawn by the scenic beauty, may well create jobs in their new communities, but most often these are low -paying service -sector jobs, while at the some time, the cost of living, particularly in housing, often rapidly increases. So while new populations — whether temporary or permanent — increase the overall population, good -paying, stable jobs might still leave these towns. L I And Kalispell, like "Dover [Idaho] is the story of the rural West, where survival for working-class people once meant logging or agriculture and now means building homes or waiting tables and being grateful that you have a house to build or table to wait on because it means your community is still there." 5 Kalispell cannot put its head in the snow and ignore the challenges before us, which are larger than could have been predicted prior to the pandemic. Post -pandemic growth has pushed Kalispell's already increasing growth to another level. Thus, Kalispell needs to come up with an in-house, long-range, comprehensive strategy for overcoming its growing pains. The City of Kalispell proposes to produce measurable outcomes toward improving housing supply and affordability within the spheres it can affect. If funded, Kalispell will achieve this by hiring a new, full-time senior planner position to implement the following activities over the three-year grant period: • Update City growth policy to prepare for and speed up residential development, • Procure housing study to identify and quantify housing needs and projections, • Update zoning regulations to increase residential development opportunities, • Update subdivision regulations to improve residential development options, and • Procure water and wastewater facility plans to prepare for projected residential growth. This PRO Housing grant provides an opportunity for Kalispell to make policy and regulatory changes that will have a lasting impact on housing within the City, as doing things as we have in the past is not resulting in desired outcomes. R "The world we have created today as a result of our thinking thus for has problems which cannot be solved by thinking the way we thought when we created them." - Albert Einstein, scientist (1879-1955) 7 Exhibit B: Threshold Requirements and Other Submission Requirements Threshold Requirements 1. Resolution of Civil Rights Matters: The City does not have unresolved civil rights matters. 2. Timely Submission of Applications: This application shall be submitted before the deadline on 10/30/2023. 3. Eligible Applicant: The City of Kalispell is an eligible applicant as a city government, as listed under section IIIA.02 of the Notice of Funding Opportunity. 4. Number of Applications: The City of Kalispell is submitting only one grant application. Additional Eligibility and Requirements • The City of Kalispell will comply with all the eligibility requirements for applicants and recipients of HUD Financial Assistance Programs. • Code of Conduct: The City of Kalispell will submit the latest version of its code of conduct to HUD. • Physical Accessibility: All meetings that are held in person will be held in facilities that are physically accessible to persons with disabilities. Meetings will also be available through video conferencing for remote access. • Environmental Reviews: The City of Kalispell will comply with applicable environmental requirements related to this grant. • 424-CBW Budget Form: The 424-CBW budget form is included in this application. • Certification Regarding Lobbying: This certification is included in the application. • Disclosure of Lobbying Activities (SF-LLL): This form is included in the application. Exhibit C: NEED Describe efforts to identify, address, mitigate or remove barriers to affordable housing production and preservation to date (12 pts) The City of Kalispell has a longstanding effort to remove barriers to affordable housing, going back multiple decades. Most importantly, the City has prepared for growth through its growth policy and subsequent zoning and subdivision updates over the last ten plus years. These updates have facilitated the acceptance and construction of multiple housing types with units numbering in the thousands, i.e. creating E supply. Although estimates vary, nationally the shortage of housing supply is approximately 6 million housing units. The lack of home building has created a shortfall of housing that limits economic growth, drives up inflation, and increases housing costs for families that has reached crisis level for millions of Americans. It is nationally accepted, and according to the Housing Supply Action Plan by the Biden-Harris Administration, President Joe Biden believes, "the best thing the nation can do to ease the burden of housing costs is to boost the supply of housing." The national housing shortage story is no different in Kalispell, Montana. A February 2023 housing study completed by the University of Montana, Bureau of Business and Economic Research (BBER) indicates that the Flathead Valley currently has a housing shortage of roughly 3,000 units. In addition, the study indicates that an additional 151000 units will need to be constructed in Flathead Valley over the next decade in order to keep up with demand. Estimated Surplus/Shortage of Housing Units, Flathead County, 2011-2022 Housing Units 4,000 3,000 2,OD0 1,0D0 , ■ .2,000 -3,000 -4,000 -3,161 2011 2012 2013 2014 2015 2016 2017 2019 2019 2020 2021 2022 Snurro: RSERAnalysis Accordingly, although a small rural city in Northwest Montana with a total housing stock of approximately 10,500 units (US Census 2020), the 10 City of Kalispell has led the way in Flathead County in terms of producing supply of housing. From 2018-2022, the City of Kalispell approved 4,817 housing units (summarized in chart below), which in a five-year timeframe, provided 46% of the housing supply that had previously been constructed in the City over the previous 126 years. Unfortunately, due to supply chain issues and limited labor at this time, which are out of the City government's control, these units will take years to come to market. 2018-2022 City Council Approved Housing Developments Detached Single 905 units (including lots as small as 3500-4000 Family Homes square feet) Townhouses 678 units (including sublots as small as 1263 square feet and 14 feet wide, with up to 17 attached units) Multi -family 3,159 units, plus 83.7 acres of mixed use, including multifamily Other (shelters, 75 units group homes) These approvals are guided by the Kalispell Growth Policy Plan -It 2035 (https://www.kalispell.com/DocumentCenter/View/465/Kalispell- Growth-Policy-Plan-It-2035-PDF?bidld=). Specifically, Chapter 4A on Housing, which encourages a variety of residential development that provides housing for all sectors and income levels in terms of cost, type, 11 design, and location. Additionally, the Growth Policy states the need to develop and implement an affordable housing strategy to effectively provide for the needs of low- and moderate -income residents within the community. The City has used tools such as its adopted Growth Policy, zone changes, zoning text amendments, Planned Unit Development (PUD's), eligible CDBG grants, and Conditional Use Permits. These actions are usually done via Ordinance or Resolution by the City Council. To date Kalispell has: delivered diverse housing options, including reduced lot sizes, increased heights, accessory dwelling units, reduced parking requirements, increased densities, developments providing a mix of housing types and sizes, homeless shelters (including low barrier), transitional housing, senior housing, and 169 income -restricted affordable housing units within the same timeframe. Historically, the City has been active with the construction of approximately 983 income -restricted housing units in addition to the 169 mentioned above for a total of 1,152 units income - restricted units, despite not being an entitlement City. 12 Kalispell also has an active Northwest Montana Community Land Trust (NWMTCLT) founded in partnership with the City. The CLT, which includes 52 A Model for Truly Affordable Housing With a new executive director, Northwest Montana Community Land Trust seeks partners to help expand its inventory of homes, typically priced for sale between $100,000 and $200,000 properties, is the largest of its 6Y MYERS REECE kind in the state. The purpose L< AUGUST 4. 2021 of the CLT is to provide permanently affordable homeownership opportunities for low- and moderate -income families. The City received funding for the program as part of the Neighborhood Stabilization Program (NSP) I and III under the Housing and Economic Recovery Act in 2009 thru 2011. City policy issues and decisions of the past have been very favorable to the homeless/shelter community by being flexible with zoning and conditional use permits to make it easier for stakeholders to maneuver within the city. Whereas, neighboring communities don't provide for these services, Kalispell is the HUB for needed valley wide social services. Sparrows Nest, Ray of Hope, Warming Shelter, Peggy's House, Youth/Group Homes, Samaritan House, etc. have all benefited from the City's proactive stance in recognizing the community need. This was further demonstrated during the creation of the Emergency Shelter with a temporary zoning amendment during Covid and subsequently a low barrier shelter as a recommendation of the Mayor's Homeless Task Force, where demand for additional unsheltered housing was identified. The shelter protects people from the elements and connects them to needed resources. Although there is a necessary public process, history has shown that the public process was not used as a barrier for entry and this is exhibited in past approvals for these uses providing needed services for the most underserved in our community. 13 Warming Shelter a key step in addressing homelessness November 8, 2020 12:00 AM On Monday, the Kalispell City Council unanimously green -lighted a zoning text amendment and conditional -use permit that will allow the Flathead Warming Shelter to move forward with establishing a permanent location off North Meridian Road. The City of Kalispell has been proactive in providing varying residential housing types besides just single-family zoning. Within the growth policy area, the City has 6,976 acres of land where residential use is allowed. Of that area, 80.3% allows for multiple units on the property (41.9% allows a duplex or an accessory dwelling unit; 38.3% also allows multi -family). 100% of zones with residential uses allow for some form of housing in addition to traditional detached single-family, with the possibility of guest houses, townhouses, accessory dwelling units, duplexes, or multi -family available depending upon the zone. The City has also focused on infill and redevelopment of blighted areas within its downtown core, adopting both downtown and core area plans, which have garnered national attention by getting the Phoenix Award for Brownfield Excellence and ICMA Community Sustainability Award. On December 17, 20121 Kalispell City Council adopted the Core Area Plan as an amendment to the City of Kalispell Growth Policy 2020 by Resolution No. 5601A. The Core Area Plan addresses needs and priorities affecting redevelopment of the Core Area. Relevant Core Area Plan statements are referenced below: Chapter 3 — Vision and Goals in Action, Goal 7, Housing Strategy — An array of housing options in the Core Area (multi family, apartment buildings, townhouse and row housing, loft and studio apartments, senior housing, second floor residential, smaller scale 14 multi family apartments, etc.) to provide housing for a variety of age and income levels. Chapter 3 — Vision and Goals in Action, Goal 7, Housing Reinvestment Strategy — A housing stock that is safe, affordable and an asset to the neighborhood. On December 4120171 Kalispell City Council adopted The Downtown Plan as an amendment to the City of Kalispell Growth Policy Plan -It 2035 by Resolution No. 5846. Additionally, the City Council adopted the West Side Urban Renewal -Core Area plan by Ordinance 1717 (Original Ordinance 1259) and the Downtown Urban Renewal Plan by Ordinance 1816. The Downtown Urban Renewal Plan identifies the need for "safe housing in the downtown area and the importance of incentivizing development of varied housing types and price points as keys to revitalization of the area." The City of Kalispell utilizes a Tax Increment Finance District (TIFD) within both urban renewal plan boundaries as part of the overall strategy to meet its needs of promoting economic development, improving area employment opportunities, improving area housing opportunities, and expanding the community's tax base. These plans have facilitated not only new employment, green space and recreational opportunities, but hundreds of units of new residential construction on previously industrial brownfield and infill sites. Public infrastructure is a finite resource and very expensive, so being able to make the resources go further in already developed areas makes for more affordable housing. 15 ilo development gets green light from .alispell Planning Board Land use approval time is a major factor hindering the supply of housing. Regulatory processes for development and associated timeframes often exacerbated by Not in My Back Yard (NIMBY) sentiment have made it unfeasible for many housing developers to get needed housing to market. Whereas many other local governments and communities have created roadblocks to building homes, the City of Kalispell has a long-standing stance of not "moving the goal posts" on potential development mid -stream during the discretionary review process. Discretionary review is exactly what it sounds like: city governments, planning boards, architectural review boards, etc., have the discretion to approve or deny proposed housing projects despite whether those projects comply with local policies and rules. Whereas neighboring communities in the Flathead Valley have denied multiple needed housing projects, the City of Kalispell has bucked this trend by providing a reliable and equitable application review process. From application to City Council approval, conditional use permits for multi -family projects and subdivision plats take 60 days while more complicated residential developments take up to 110 days. The review time allows for public input and transparency, however, is not overly burdensome on the needed supply of housing. In the timeframe between 2018 and 2022 no housing projects were denied by the City Council. 16 Approvals have been based on projects designed with guidance from long-range planning work previously adopted by the City, such as the Growth Policy and establishment of design criteria. If the City sees something problematic, it's not scared to change the rules if need be. However, changing the rules and holding a development hostage during the discretionary permit stage creates an environment where housing developers will be leery, which will limit their investment and ultimately housing supply. The `Poster Child' for Development Approval Kalispell city planners have been mapping out the municipality's growth for pears, setting the council up to approve 5,000 units since 2018 - despite opposition - as the state tries to address the housing shortage 8Y MAGGIE DRESSER NOVEMBER 2, 2022 In addition to land use approval time, the Council reduced sewer and water impact fees by 50% to incentivize residential development, as those fees are a barrier of entry. Following the reduction of impact fees in 20201 the City saw a 96% increase in multi -family development which is much higher than the national average for the same timeframe. The policy change made the City of Kalispell the number one City in the State of Montana for multi -family construction starts, which is the most affordable type of housing and provides for additional housing at lower price tiers (further explained below). Demonstration of Acute Demand (13 pts) 17 According to a Kalispell housing market study done by Property Dynamics, "all existing income restricted projects in Kalispell are 100 occupied, with all including wait lists. That includes the three competitive family tax credit projects, as well as the two existing senior LIHTC communities. The wait lists at the family projects are at 40 & 100+ names (the third project wouldn't reveal the number of names on its list), with the senior projects reporting 14 and 25 names. In addition to those wait lists, managers of existing competitive projects noted that they receive a good number of inquiries on a daily basis from persons who are looking for a unit, most that are in immediate need and choose not to be put on a list. Additionally, the local housing authority (Community Action Partnership of NW MT or CAP) has 164 names on its wait list for its housing choice vouchers in Flathead County. In looking at other areas of the Kalispell rental market, it is clear that there is also a strong need for both low-income family housing and market rate units in this regional hub of the Flathead Valley. The vacancy rate for twelve market rate projects surveyed in July 2021 was also at 0 % with no vacancies found. That compared to a 0.0 % rate in January 2021, a 0.6 % rate in July 2020 and 0.0 % in July 2017. With the very low vacancy rates in the City, rents in the area have increased substantially over the past several years. From August 2017 to July 2021, rents on average have increased by 55 - 65 % or about 14 - 16 % per year on average (note that these M. increases are from projects originally surveyed in 2017 compared to 2021). These rental increases are making it very difficult for families (and seniors) to find good quality, affordable rental units in Kalispell. In fact, according to the Census 2015 - 2019 American Community Survey, 44.4 % of renter households pay more than 30 % of their income to rent (rent over- burdened), with just over 34.1 % paying 35 % or more and 19.4 paying 50 % or more." It is clear in looking at all of the information in the Property Dynamics study, that there is a very strong need in the Kalispell area for additional affordable rental units, not just the rehabilitation of existing projects in the city. The population in the City, County, and primary market area have all seen very strong growth over at least the past 10 - 11 years, with all projections indicating continued growth into the near future. All existing income restricted projects in Kalispell (both family and senior) are 100 % occupied with all including wait lists. As mentioned previously, there are a good number of market rate units that have opened recently or are in planning stages. However, a majority of those new units include rents at market rate, or above 100% AMI in some instances. Therefore, there will be additional growth demand for units affordable to households with income below 100% AMI as the city continues to grow. As rents in the area increase, residents will have a difficult time finding good quality, safe and secure housing. The poverty threshold is based on the number of people, number of related children under 181 and whether the primary householder is over age 65. Family income is then compared to the poverty threshold; if that family's income is below the threshold, the family is classified as 19 being in poverty. Each year the U.S. Census Bureau establishes thresholds to measure the number of people living below a certain income level. The numbers are used to formulate economic policy and distribute social service aid. The poverty threshold in 2021 for a single individual was $13,788 and for a family with 2 adults and 2 children it was $27,499. According to 2021 data from the U.S. Census, 8.2% of the Flathead County population have incomes below poverty levels and 9.3% of children below the age of 18 live in poverty showing a high demand for increased affordable housing for these individuals. Children under age 5 are more likely to be living in poverty than any other group. An ages in roverry 6.Lro 11.Y70 Under age 18 in Poverty Under age 5 in Poverty Ages 65 years and over Median Household Income 9.3% 14.1% 15.7% 17.9% 7.4% 8.8% $66,126 $63,249 Source: U.S. Census Bur au American Community Survey, ttps://data. census. govltable Location quotients (LQ) compare the concentration of an industry in an area compared to national averages. An LQ greater than 1.0 indicates an industry has a greater share of the local area employment than is the case nationwide. Data is collected for business sectors that typically comprise the local economic base. Base industries refer to sectors that contribute a significant percentage of jobs and earnings to a local area as well as bring in outside revenue which helps to grow the regional 20 economy. According to this measure there is a high concentration of jobs in the construction, leisure, and hospitality sectors in the Flathead while there is lower than national average in the information and professional/business sector. The concentration of government jobs is lower than the national average and state average. There is a high concentration of leisure/hospitality jobs due to the proximity to Glacier National Park and other outdoor activities. This sector has among the lowest paying jobs of the basic industries and factors in the need for additional affordable housing on a higher level than other communities of similar size. Except for the health care sector, average wages in Flathead County are lower than national averages. 21 Constr Leisure and Hospitality 1.71 $492 $539 Other Services 1.20 $673 n/a Natural 1.15 $1,078 $1,359 Resources/Mining Education/Health 1.03 $1,245 $1,096 Services Financial Activities 1.02 $1,468 $2,961 Wholesale Trade, 1.02 $916 $1,114 Transportation, Utilities Manufacturing 0.81 $1,248 $1,560 Professional/Businesses 0.60 $1,221 $1,866 Services Information 0.36 $1,336 $3,069 Federal Government 0.80 n/a n/a Local Government 0.80 n/a n/a State Government 0.45 n/a n/a Sourc,e: United States Bureau of Labor Statistics, h ttps: /www.bls.govlcew/ 22 The Council for Community and Economic Research collects data from cities nationwide to calculate a "cost of living index" (COLI) that allows for comparison of the overall price of goods and services between different areas of the United States. The national average is 100. In the first quarter of 2023, the COLI for Flathead County was 108.6 meaning it had an 8.6% higher cost of living than the national average. This compared to a COLI of 103.7 for the State of Montana. Higher cost of living in tandem with a high level of low -paying service jobs mentioned above makes the need for more affordable housing options in Kalispell critical. Northwest Montana Association of Realtors maintains data on the supply of available for sale units. The absorption rate measures the pace of home sales. A rate with fewer than three months' supply is an indicator of a market with an "under supply." A supply rate of three to nine months is considered a normal market. According to data from 20221 there is an undersupply of houses in the affordable range of under $450,000 while there is an over -supply of houses in the higher range of $750,000. This statistic and chart illustrate the need for more housing supply in the affordable range in order to relieve the upward pressure of housing prices. Realities of new construction outside Kalispell city limits lead to higher costs and lower resident quality of: • County minimum lot size of 1 acre vs City of Kalispell minimum 11263 square feet creates higher land costs. • County individual well & septic development costs approx. $50-$100,000 vs. City of Kalispell $5,222 water & wastewater connection. 23 • County residential developments are not required to construct sidewalks or parks vs City of Kalispell requirements to make residential areas walk -able and accessible to green space for residents. Residences located miles from schools, grocery and retail shopping, doctors and jobs create households dependent on vehicles —necessitating further high -cost investments in winter -worthy vehicles, car insurance, gas, etc. The realities listed above make the City of Kalispell the logical location for construction of housing of any type that will be affordable both in outright and on -going costs for income burdened households, such as those priced at $450,000 or less in the chart below. Price Range Sold Active Normal Supply Absorpti Last 30- Listings Market Gap on days Listings Rate (Months) $0 - 1 3 6 -3 3.00 $150,000 $150,001- 2 11 24 -13 2.75 $300,000 $300,001- 24 34 144 -110 1.42 $450,000 24 $450,001- $600,000 19 88 114 -26 4.63 $600,001- $750,000 10 63 60 3 6.30 $750,001+ 26 309 156 153 11.88 Total 84 508 504 4 -- Source: Northwest Montana Association of Realtors, ww.nmar.com/Morket-dato-homelsupp/y-dato PRIORITY GEOGRPAHY The City of Kalispell is located within Flathead County, which is a priority geography for the Housing Affordability Factor (HAF), HAF national threshold, and HAF state threshold. Kalispell is the regional trade center and the county seat of Flathead County, in the northwest corner of Montana and is a true "Gateway" community impacted by tourism associated with Glacier National Park. Being the largest city within Flathead County, Kalispell is the community that has the ability to provide the public infrastructure that is needed for the construction of meaningful numbers of affordable and/or significant supply of housing units, as Flathead County is 5,087 acres in size with a population density of 20.5 people per square mile and 76% of land under public land ownership. The US Forest Service and Glacier National Park alone comprises over 70% of land in the county providing little development opportunity for housing outside city limits. More importantly, Kalispell has a demonstrated history of approving needed housing projects in the Flathead Valley. 25 Key barriers to be addressed to produce and preserve more affordable accessible housing (10 pts) The largest barrier to affordable housing at this point in time is the lack of housing supply and the ability of the city to plan for such housing over the long-term. The city needs a long-term plan that identifies the housing needs. Once housing needs are established, the city needs a long-term plan of how/where the housing units, including affordable units, can be constructed in as seamless a way as possible over the next 25-years. Construction of new housing unit supply will put downward pressure on the rising prices, as well as preserve income restricted affordable units in the city that might otherwise be more profitable to convert to market rate when allowed if the demand for mid -priced housing is not being met. 26 As mentioned previously, there is a national housing shortage of approximately 6 million housing units. It is nationally accepted, and President Joe Biden believes, "the best thing the nation can do to ease the burden of housing costs is to boost the supply of housing." The national housing shortage story is no different in Kalispell, Montana where housing studies indicate the Flathead Valley currently has a housing shortage of roughly 3,000 units. In addition, the study indicates that an additional 151000 units will need to be constructed in Flathead Valley over the next decade in order to keep up with demand. Addressing the shortage of housing is the number one priority for the City of Kalispell. Housing Units 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2023 2024 2025 7n26 2027 7n28 2029 ?n30 2031 2n'.- Source: R9ER Projection With that being said, if we don't solve the supply issue, housing prices will continue to rise with middle and low-income earners being affected most. Studies have shown that substantial new supply is needed to bring the rising prices for rents and housing back to sustainable levels. Additionally, studies show that construction of housing across varying price tiers are independent, with newly constructed housing priced at market rate producing supply and price impacts across other price tiers, including low-income: 27 A 2019 paper from the W.E. Upjohn Institute (Mast, 2019) used address changes to track movements within urban markets when new multifamily units were constructed. There was strong evidence of migration to and from low-income housing as a result, with models suggesting adjustments took place within five years. A 2019 working paper from New York University (Li, 2019) examined the impact of new high-rises on nearby residential rents and sales in New York, estimating that for every 10 percent rise in the housing stock, nearby rents fell by 1 percent in the adjacent areas. The Furman Center's 2018 paper on "Supply Skepticism: Housing Supply and Affordability" conducted a survey of research of housing filtering, finding that adding new homes moderates price increases and that filtering of housing sold by other owners accounted for a large fraction in the increased supply of modestly priced housing units (Vicki Been, 2018). Planning related services in the City of Kalispell are funded by the general fund, of which 74% is allocated to police and fire services. Property tax is the primary revenue source within the general fund, as Montana does not have a sales tax. Nor is Kalispell a resort community like neighboring communities that provides for additional revenues. Further, where the state is sitting on record revenues because of property value increases, the city is required by state law to lower mill rates to adjust for property value spikes. Per 15-10-420 (MCA) the city may only impose a mill levy sufficient to generate the amount of property taxes actually assessed in the previous year plus one half of the average rate of inflation the prior three years. Accordingly, despite W. the record growth outlined previously, due to record rates of low inflation followed by a record spike of high inflation over the last year, the city general fund budget has been running a deficit leaving no room for additional staff at this time. Following the next three years, it is perceived that inflation will slow at which point the city could maintain the additional planning staff for further housing related planning matters. However, as summarized in the proposal, there is demand for policy change now and waiting another three years will only put the housing needs of the city further behind. Size of Department Budget in Comparison to the General Fund Total General Government _.. _ _ col Planning t 2 torney 5% curt Public W-ks Hal Another key barrier is that the City of Kalispell has little funding opportunities as a "non -entitlement" area because of its size despite having entitlement city issues. Non -entitlement communities within the state are left to compete for only 30% of the CDBG money allocated to Montana, which makes funding of affordable housing difficult in such communities. This is especially true since the in -migration during and following the Covid Pandemic to the Flathead Valley. The money for non -entitlement communities first goes to the State, which allocates 29 the money to all the smaller communities throughout the state in a highly competitive application process. This process ultimately "sprinkles" the money across the state and certainly can make an impact, but unfortunately does not provide a guaranteed income flow that would be needed to adequately address affordable housing like metropolitan cities are entitled. Thus the city can use the tools at its disposal, which primarily involves its ability to plan for inclusive orderly growth through its public infrastructure. Exhibit D: SOUNDNESS OF APPROACH Project vision (15 pts) Housing is complicated and numerous factors play into housing affordability, whether supply and demand, wages, supply chain issues, etc. Issues the city can control are its own land use policies and regulations that are a barrier to housing creation (exclusionary zoning for example), while at the same time maintaining the health, safety, and general welfare of its citizens. Accordingly, the proposed activities the city feels will be the most prudent to streamline development include: 1. Update Growth Policy: The Kalispell Growth Policy is an official public document created and adopted by the City of Kalispell as a vision for future growth in and around the City. The Growth Policy is not a law or regulation, but rather a community guide for making land use decisions. The term "Growth Policy" is synonymous with "master plan," "comprehensive plan" or "community plan." The Growth Policy is implemented through different methods, including the adoption of zoning and subdivision regulations and the making of public resource investments. When considering zoning, subdivisions, and 30 other development issues; the Growth Policy should be consulted to ensure future development is in substantial compliance with its goals and policies. The plan is intended to reflect the economic, social, and environmental visions of the City of Kalispell, its residents and various stakeholders. A critical component to updating the growth policy will include vast stakeholder and public outreach, which will be done in accordance with an adopted Public Participation Plan, including outreach to the most underserved in the community. Updating the plan will be facilitated through a Senior Planner under the Development Services Department. Although the proposal could include the hiring of a consultant to provide these services, planning of this magnitude and of importance is best done by in-house employees who understand the community and can get the feedback needed by stakeholders to create a true community plan. This also provides for long term knowledge and implementation abilities that otherwise would not be possible. The essential characteristics of the Growth Policy are that it is comprehensive, general, and long range. Comprehensive means that the document applies geographically to the entire community in order to coordinate its overall pattern of growth for the next 25 years. Comprehensive also means that consideration is given to all of the basic functions that make a community work such as housing, the economy, land use, the environment, transportation, public facilities, and public services. 31 General means that the policy is broad in scope, focusing more on overarching principles and philosophy than detailed standards. Accordingly, the format of the document is an outline of issues, goals, policies, and recommendations, rather than legally described locations, engineered solutions, or detailed regulations on specific property, which are delegated to the zoning, subdivision, and general Public Works design standards. In tandem, they provide the roadmap for site specific development approvals administratively rather than through a discretionary review process. 2. Procure Housing Study: The city will procure a professional consultant to complete a housing study. The purpose of the housing study will be to get an understanding of Kalispell's housing dynamics, where wages have not kept up with rising home prices and rents. Additionally, the housing study will identify how much housing is needed by local residents and employees and at what price points over a 25-year time period, which current housing studies do not provide. Data from the housing study will be used to ground the update in an understanding of what is needed in order to plan an effective path forward so the city can adequately plan for supply of housing for all income levels with a strategy rooted in data, research, and community input. 3. Update Zoning Regulations: The purpose of the zoning ordinance is to promote: 1. The health, safety and general welfare of the community. 32 2. To promote the visual and aesthetic objectives of the community. 3. To conserve energy and natural resources. 4. To lessen congestion in the streets and to provide adequate accommodations for transportation of people and goods. 5. To provide adequate light and air. 6. To promote the efficient use of land; to facilitate the provision of transportation, water, sewer, schools, parks, stormwater management, other public requirements and environmental needs. 7. To promote orderly development according to the Kalispell Growth Policy and other adopted city land use and facilities policies. 8. To secure safety from fire, panic, and other dangers. 9. To regulate and restrict the height, number of stories, and size of buildings and other structures, the percentage of lot that may be occupied, the size of yards and other open spaces, and the location and use of buildings, structures and land for trade, industry, residences and/or other purposes. Through the update process, staff will be evaluating how existing regulations are impeding housing development, whether through unduly regulatory barriers, segregation, or discretionary processes that limit the ultimate construction of housing projects, especially where barriers exist for housing for low-income residents. Goals will include using an updated growth policy to identify zoning updates and policy changes that would allow for increased housing development, including within existing neighborhoods, and for site specific development approvals administratively rather than through discretionary review process. Updating of the zoning ordinance will be facilitated through a Senior Planner under the 33 Development Services Department. Like the growth policy, although the proposal could include the contracting of a consultant to provide these services, planning of this magnitude and of importance is best done by in-house employees who understand the community best. 4. Update Subdivision Regulations: The purpose of the subdivision regulations is to promote the public health, safety, and general welfare and to provide for: 1. The orderly development of the jurisdictional area. 2. The coordination of roads within subdivided land with other roads, both existing and planned. 3. The dedication of land for roadways and for public utility easements. 4. The improvement of roads. 5. The provision of open spaces for travel, light, air and recreation. 6. The provision of proper physical and legal access, including obtaining necessary easements. 7. The provision of adequate transportation, water, drainage, and sanitary facilities. 8. The avoidance or minimization of congestion. 9. The avoidance of subdivision which would involve unnecessary environmental degradation. 10. The avoidance of danger or injury by reason of natural 34 hazard or the lack of water, drainage, access, transportation or other public services. 11. The avoidance of excessive expenditure of public funds for the supply of public improvements and services. 12. The manner and form of making and filing of any plat for subdivided lands. 13. The administration of these Regulations by defining the powers and duties of approving authorities including procedures for the review and approval of all plats of subdivisions covered by these provisions. Similarly, to the growth policy and zoning update processes, staff will be evaluating how existing subdivision regulations are impeding housing development, whether through unduly regulatory barriers, or discretionary processes that limit the ultimate construction of housing developments. Goals will include using an updated growth policy to identify subdivision updates in tandem with recommended zoning updates that lead to policy changes that would allow for increased housing development and for site specific development approvals administratively rather than through the discretionary review process. Updating of the subdivision regulations be facilitated through a Senior Planner under the Development Services Department. Like the growth policy and zoning, although the proposal could include the contracting of a consultant to provide these services, planning of this magnitude and of importance is best done be in-house employees who understand this community best because they are part of this community. 35 5. Procure Water and Wastewater Facility Plans: The city will procure a qualified professional consulting engineer to complete updates of the Water and Wastewater Collection Facility Plans. Water and Wastewater Collection Facility Plans provide a goal for infrastructure improvements of the existing utility systems, including where there are capacity limitations and/or deficiencies, and new improvements needed to meet future housing development needs. Planning will encompass an extensive growth area along with aggressive population projections over the next 25 plus years. As new development demands are forecasted and existing aging infrastructure falters, facility plan updates are needed to ensure the planning, projects, and management of the utility systems meet sustainability goals to service the community of Kalispell and its growth forecasts. The Planning service area will focus on infill and how the aging infrastructure can handle increased densities, as well as the larger urban growth boundary and the water and wastewater infrastructure needed to service those areas. Public infrastructure is a finite resource and very expensive, so being able to make the resources go further makes for more affordable housing. Without knowing the capacity of the water and wastewater systems, the City cannot adequately provide for housing development. Additionally, the city needs professional services for the planning, design, and construction of future water improvements that may be needed to meet future growth demands. The planning, design, and construction of the water system improvements will require utilization of the updated modeling; analysis for the optimum location and operation; possible easements and land acquisition; 36 property, topographic, and utility surveys; submittals to governmental agencies; etc. meeting public agency standards; and the engineering oversight during construction. Rate studies require a large effort, and consequently a large expense, which must be covered by the rates collected for the utility. All rate payers participate in these costs. Since the funding is budgeted from Maintenance and Operations line items in the utility funds, the rate studies use monies that could otherwise be utilized for replacement of century old infrastructure still serving many low- and moderate -income neighborhoods. Common Tasks for each Facility Plan Update will include: 1. Review and update the general information for the planning and service areas. 2. Identify potential expansion areas based on projected patterns of community growth and development, including increased densities and infill areas. 3. Collect and review data available within the City's Public Works and Planning Department. 4. Participate in City Council work sessions and public informational meetings. 5. Prepare draft and final facility plan reports for a designated planning period to be incorporated into the City growth policy. Water Facility Plan Update: 1. Analyze the last ten years of metered water consumption and production output data and update the water use characterization. 37 2. Analyze the overall condition of the water system. 3. Analyze and identify overall system deficiencies in supply, storage, distribution or other areas related to present and future demands. 4. Analyze current water rights and develop recommendations for expansion or adjustment. 5. Update the City's models as needed and prepare model simulations for existing and future conditions. Deliver all electronic modeling files to the city. 6. Utilize the updated water model to: a. Perform fire flow analyses and identify pipe segments in the existing distribution system failing to meet minimum flow standards. Recommend strategic system improvements to achieve minimum fire flow standards for multi -family housing developments. b. Analyze existing and future demand storage and distribution operations and capacities. Recommend strategic system improvements to achieve optimal operations of the water system to service existing and future water demands for housing. c. Identify projects necessary to ensure full compliance with public laws and regulations. d. Recommend planning values for average day per capita water use, max day water use and peaking factors. 7. Identify lead lines and plan for removal of such lines. 8. Update the capital improvement program (CIP) based on storage and distribution analysis, infrastructure condition, criticality, and priority. The CIP will prioritize and estimate costs for strategic water main replacement and repairs, new water main construction, and capital improvement projects to improve water system sustainability in priority housing areas; meet new growth demands and reduce risks to the current water system's level of service. The CIP will incorporate and W. schedule improvement recommendations into an overall tabulated CIP recommendation. Wastewater Collection Facility Plan Update: 1. Analyze the overall condition of the wastewater collection system and the current flows. 2. Review existing lift stations and recommend needed improvements. 3. Update the City's model as needed and prepare model simulations for existing and future conditions. Deliver all electronic modeling files to the City. 4. Utilize the updated wastewater collection model to: a. Analyze and identify overall system deficiencies in relation to present and future demands for housing. Identify current capacity, utilization, bottlenecks, deficiencies and reserves for trunk lines and lift stations. b. Analyze and identify new conveyance and lift station capital improvements within the planning area. c. Recommend strategic system improvements to achieve optimal operations of the wastewater collection system to service existing and future sewer demands. d. Identify projects necessary to ensure full compliance with public laws and regulations. e. Recommend design values for average day per capita use and peaking factors. 5. Evaluate past and current City efforts to reduce infiltration and inflows and recommend additional actions. 6. Update the capital improvement program (CIP) based on the wastewater collection system analysis, infrastructure condition, and criticality. The CIP will prioritize and estimate 39 costs for strategic wastewater conveyance and lift station replacement, upsizing, repairs, new conveyance and lift station construction, and capital improvement projects to improve the wastewater collection system sustainability, in order to meet new growth demands and reduce risks to the current level of service. The CIP will incorporate and schedule improvement recommendations into an overall tabulated CIP recommendation. Updating the aforementioned documents with the goal of restructuring current planning practices and policies where housing developments would be approved administratively versus through discretionary review processes will be transformational. This will allow for streamlined administrative review of site -specific development applications to streamline development and bring about more housing more quickly. Updating the documents provides the broadest and most comprehensive level of collecting data, identifying, and analyzing existing conditions and future opportunities and constraints, acknowledging, and addressing impacts of housing development in the city and providing for broad public participation of housing for all fIFiTiI•TiiT &I Once the documents are adopted by the Council, updated documents will provide for administrative approval of housing developments that are in substantial compliance of said documents. This process will frontload the planning process, while expediting the site -specific process where projects tend to get denied through the discretionary processes and NIMBY sentiment. Although many of the items listed above are common, the idea of using the documents with a plan of approving housing developments administratively is transformational in the realm of local and national land use policy. The proposal before you includes updates to the primary documents the city utilizes to allow for and regulate growth in the growth policy, zoning regulations, subdivision regulations, and water and wastewater plans. Additionally, the city plans to procure a detailed housing study that identifies the number, type, and price points the city needs to plan for over a long planning period. If the city does not plan for future housing supply for all income levels and make housing construction as seamless as possible, then the construction will be stymied, and housing rents and prices will continue to rise with the most vulnerable low-income earners being disproportionally affected. Geographic scope (5 pts) The scope of the project includes the five activities highlighted earlier. Geographically the scope includes the City of Kalispell "Kalispell Growth Policy Future Land Use Map", which illustrates three distinct planning areas covered by the Kalispell Growth Policy. • The first is the Kalispell City limits, covering approximately 12.8 square miles. This is the only area the city can implement the Growth Policy and enforce its separately adopted rules and regulations. • The second is the annexation boundary and includes land beyond the city limits where city services area generally available or could be reasonably extended if the property were to be annexed into the city. The future land use designations in this area provide guidance for the city when it considers initial zoning for properties 41 proposed for annexation. By providing a growth area boundary, the city can encourage the extension of city water and sewer service, as well as other city services, which enables more growth to come into the City of Kalispell with higher density. By allowing higher density development within the city's growth policy area, it could reasonably be expected that more farmland could be conserved because the availability of residential and commercial lots within the Kalispell Growth Policy boundary, limiting sprawl/leapfrog development. • The third is the Growth Policy Planning Area, which generally extends out three miles from the city limits. This is the area anticipated to be served by City of Kalispell transportation, water and/or sewer over the next 25 to 50 years. It has been used in this document to provide a vision for the future. IV 42 - 1. reQ��1 11 Identify key stakeholders and how they are engaged in project (5 pts) Key stakeholders in the project include the Kalispell City Planning Board and Kalispell City Council. The Kalispell City Planning Board was created in accordance with 76-2-307(MCA), consisting of seven voluntary members. It is the duty of the Planning Board to hold public hearings and make recommendations to the City Council on all matters concerning or relating to the creation of zoning districts, the boundaries thereof, the appropriate regulations to be enforced, amendments of zoning regulations, conditional use permits, and any other matter within the scope of zoning and subdivision power. The Kalispell City Council is composed of eight city councilors and Mayor. The city is divided into four wards with two councilors elected from each and the Mayor at large. Each member serves a four-year term of office with the terms staggered. The greatest responsibility of the City Council lies in its legislative activities, which include: 44 • Adopting the budget. • Appropriating money to fund the city's programs and services. • Enacting ordinances. • Establishing policy and levels of service. • Setting service fees. MEMBERS: Ordinance NO 1869 2020 Census book population within Cdy of KaBspell 24,833 Total 24,83314 = 6,208 - 2.6%Deviati- High - 6,363 2.6%D-iaton Low = 6,063 6,277 Ward 1 - - 6.170 Ward 2 6,208 Ward 3 6,178 Ward • Mark Johnson, Mayor LL1. • Sandy Carlson, Ward 1 • Kari Gabriel, Ward 1 • Chad Graham, Ward 2 • Sam Nunnally, Ward 2 • Ryan Hunter, Ward 3 • Jessica Dahlman, Ward 3 • Sid Daoud, Ward 4 • Jed Fisher, Ward 4 i ISPELL o z haeoz 2022 Wards City of Kalispell, MT Dec 15th. 2021 The Mayor presides at all City Council meetings and is a voting member of the council. In preparation for the grant the City of Kalispell held a public hearing at the Kalispell City Planning Board and Kalispell City Council. The hearing included legal notices and city notifications to stakeholders within the community soliciting feedback in preparation for grant application. The grant application was made available to the public for more than the required15-day minimum. The city provided for the application at the local library and water department where it 45 was printed in ADA accessible form and provided a system for collecting community input. A summary of the comments is attached hereto as Attachment A per the requirements of the grant application. Moving forward, as part of the Growth Policy update, the city will create and adopt a Public Participation Plan that will describe how community members and stakeholders will be engaged. It is intended raise awareness, providing a roadmap for the public to outline a clear and accessible public process, ensure input is sought and considered by a broad range of participants including the most underserved in our community, which could include but not limited to; renters, youth, service workers, business owners, property owners, NWMT Land Trust, hospital, unsheltered population, civic organizations, transit, parks, police, fire, schools, seniors, etc. During the public process staff would like to create an online public engagement platform which will serve as a resource for information and allow for participation through survey tools, messaging, mapping, etc. Describe how proposal aligns with requirements to affirmatively further fair housing (5 pts) The goal of planning is to protect the health, safety, and general welfare of all its residents. Using the Kalispell Growth Policy Future Land Use Map, the city can plan for diverse housing communities. The Growth Policy is not a law or regulation, but rather a community guide for making land use decisions that affect zoning and subdivision policy. It is, at its most fundamental level, a blueprint for the physical development of the community, providing goals for creating more housing of all income levels. Amending the map to include more density with varying housing types and sizes, as well as providing for all modes of transportation, as transportation costs are a large factor of affordable living for many citizens. Past research has shown that neighborhoods with diverse W. housing types (i.e., a mix of single-family homes, duplexes, small and large multifamily buildings, and so on) can also promote racial and income diversity and provide greater stability in the face of a housing market downturn. Regulatory processes for development and associated timeframes often exacerbated by Not in My Back Yard (NIMBY) sentiment have made it unfeasible for many housing developers to get needed affordable housing to market in the Flathead Valley. Updating the growth policy, zoning regulations, and subdivision regulations with the goal of restructuring current planning practices and policies where housing developments would be approved administratively versus through discretionary review processes will be transformational. Budget and timeline proposals (5 pts) 47 The City of Kalispell is requesting a grant award in the amount of $1,363,666.00. Given the minimum funding amount of 1,000,000.00, reduction of the overall funding request and/or associated deliverable would not be feasible. Grant award funding is broken down as follows: Milestone Cost Start Completion Housing Study $200,000. Procurement Spring 2025 00 Spring 2024 Water Facility $400,000. Procurement Completion Spring Plan 00 Fall 2024 2026 Wastewater $400,000. Procurement Completion Spring Facility Plan 00 Fall 2024 2026 Growth Policy, $363,666. Begin Spring Completion Spring Zoning, and 00 2024 2027 Subdivision Update Costs associated with the housing, water, and wastewater studies are based off of recent projects procured by cities of similar size in the State of Montana and account for recent inflation. The Growth Policy, Zoning, and Subdivision Update cost is for a Senior Planner Full Time Equivalent (FTE) for three years ($121,222.00 benefited wage rate x 3yea rs). W. In order to implement the proposal, the city will hire a Senior Planner, as the City of Kalispell has limited resources and cannot undertake such an effort without additional staffing given current workloads and budgetary constraints. Funding such position for these tasks is not an ordinary responsibility of the city, as the task at hand provides for the ability to make transformational housing policy changes given current needs within the community. Although there are state programs that can assist the city in such ventures, state funding for the objectives outlined herein is inadequate given the challenges the city faces. Additionally, the city feels in-house staff will be able to deliver a plan much more akin to the community needs rather than applying for state aid which tends to be a top -down approach. It is the goal of the City of Kalispell to implement the projects as soon as funding can be secured for this project. City Development Services, with a dedicated FTE to a Senior Planner through this grant, will provide grant management and fiscal administration in accordance with all federal requirements in cooperation with the Finance Department. In addition, the City of Kalispell has legal support from the City Attorney office regarding any proposed contract agreements and any other legal guidance as needed. The City of Kalispell adheres to all federal requirements relating to Davis Bacon and the Civil Rights Act through its personnel and procurement policies. Through previous federally funded projects (USDOT TIGER grant 2015 and USDOT BUILD 2018), the city has taken proactive steps to engage all community members in public planning, support non -vehicular modes of travel through trail development and retain local jobs to support social equity and reduce barriers to opportunity for those in underserved portions of the community. I • Exhibit E: CAPACITY (10 pts) Describe organizational capacity of applicant and partners. Provide staffing plan (1Opts) The proposal includes three years of funding a NEW full time equivalent (FTE) Senior Planner position within the Development Services Department to carry out the designated tasks with the goal of using the position to continue to carry out implementation of proposed activities. The city could procure services to provide such planning services through the grant but doesn't feel that is the best use of limited resources. Staff, rather than a consultant, in a community of Kalispell's size will be able to engage the community at a much more intimate level which is a critical component to the Public Participation Plan. Most importantly, city staff will be able to engage those community members that are most underserved in a way that a consultant would not in the planning process and evaluate how City policies are helping them long term. The City of Kalispell is a Class I city with a staff of 220. The City has been awarded and successfully implemented and administered hundreds of millions of dollars in grant funds from local, state and federal resources including USEPA Brownfields (Assessment 2009 & 2016, Area -Wide Planning 2010, Revolving Loan Fund 2011), US DOT (TIGER, 2015, BUILD 20181 MPDG Rural 2022), DOJ, Homeland Security, HUD, Commerce and so on. The City of Kalispell has never received an adverse audit finding nor been required to comply with special "high risk" terms/conditions under agency regulations pursuant to OMB Circular A- 102.The City follows all OMB Circular A-133, federal, and state requirements. While still considered a small city, Kalispell has sufficient staff depth and expertise to effectively manage and administer 50 programs, while meeting all financial requirements for all committed projects. Kalispell's Development Services Director, Jarod Nygren, has been administering and implementing its Planning, Building and Community Development offices, staff and projects since 2020. Mr. Nygren holds a Master of Public Administration degree and is a Certified Planner. The cross -training of staff strengthens the Kalispell program ensuring its long-term success with Mr. Nygren collaborating on programmatic, fiscal, and legal aspects of projects across City Departments. CITIZENS OF KALISPELL MUNICI PAL JUDGE Arson h5awam CITY COUNCIL MAYOR .Y4k.LWsan WARD I WARD 11 WARD III WARD IV non r�+tea s:,m m.rraly xscYa cvni+u, xo FVs Sancy GaeTu- CfacGxarr frya�.y�nrc' S.3 �ac.r CRY CLERK Ae BI ffhGfsf CITY MANAGER Jnug Russell FINANCE I Afl— GXX. LAN RESOURCES j -BLIC WORKS I INFURhIIATIUN Llffl a h9cW I TW W TW f TECHNULUGY Exhibit F: LEVERAGE (10 pts) PLANNING, PARKS A EIU ILDING 8. RECRELTIUN COMMUNITY DEVELOPMENT Chad Fmeher .44.'CQ l+�� �k'I PUBLIC SAFETY PUBLIC SAFETY LEUAL F9RE POLICE kFhflnB Pledfe OsnieJ Pee!ee .Yxdan V[v+eu Describe leverage either funding or non financial committed (10 pts) 51 The City of Kalispell (applicant) has committed $136,600 (Match of 10%) from City water and wastewater fund. No staff/personnel time is proposed toward match, as staff time is built into the funding request, rather than getting credit for staff time needed in order to carry out requests. A copy of the City of Kalispell FY23-24 adopted Final Budget representing the firmly committed leveraging of this funding, as follows: • $68,300 — Water Fund Line Item #356 Consultants • $20,000 — Sewer Fund Line Item #356 Consultants • $48,300 — Wastewater Treatment Fund Line Item #356 Consultants Exhibit G: LONG-TERM EFFECT (10 pts) Describe the permanent, long-term effects of proposal. (10 pts) The basis of the grant request is that changes will be made to city policies that will have a long-term effect. Rather than a single project specific, one-off proposal, the grant request before you provides a roadmap to housing for the next 25 plus years. The proposal starts with an amendment to the growth policy, which fundamentally is comprehensive, general, and long-range. Comprehensive means that the document applies geographically to the entire community in order to coordinate its overall pattern of growth for the next 25 years. Comprehensive also means that consideration is given to all of the basic functions that make a community work such as housing, the economy, 52 land use, the environment, transportation, public facilities, and public services for residents of all ages, abilities and income levels. The current housing policies fail to address the primary driver of the community's housing problems — outdated policies and procedures that no longer reflect the type and pressure of housing development our residents face. As an example, when the city considers a zoning or subdivision permit, we are required to assess if those permits meet certain criteria. Sounds simple enough. But the kicker is that the criteria is different for every permit. So, every time a developer or builder seeks a permit, the local administrators must do that analysis from scratch with no regard to previous assessments. Our current planning system is a duplicative, labor intensive, bureaucratic process on top of a process that slows down building and stifles new development. As a real solution, this proposal modernizes city policies and procedures. Specifically, the new planning framework gives local leaders tangible tools to be responsive. It moves public participation and analysis up to the community -wide planning stages, eliminating duplicity so that the permitting and subdivision process is more efficient. It will also allow the city to quantify our housing needs and adopt zoning and subdivision reforms that coincide with adequate water and wastewater planning. With this proposal, the City of Kalispell, developers, and community members will all know what is expected of them because they have been part of the decision -making process. Most importantly, the proposal will make it faster, cheaper, and easier to build more housing in Kalispell. 53