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HomeMy WebLinkAboutApprovedMinutes_Revised_SKHHP_ExecutiveBoard_March_21_2025 SKHHP Executive Meeting March 21, 2025 MINUTES I. CALL TO ORDER Nancy Backus called the meeting to order at 1:07 PM. ROLL CALL/ESTABLISHMENT OF QUORUM Executive Board members present: Nancy Backus, City of Auburn; Merina Hanson, City of Kent (alternate); Liz Stead, City of Burien; Kristina Soltys, City of Covington; Katherine Caffrey, City of Des Moines (alternate); Victoria Schroff, City of Maple Valley; Eric Zimmerman, City of Normandy Park; Carmen Rivera, City of Renton; James Lovell, City of SeaTac; Thomas McLeod, City of Tukwila; Sunaree Marshall, King County. Others present: Claire Goodwin, SKHHP Executive Manager; Dorsol Plants, SKHHP Program Coordinator; Maria Arns, SKHHP Advisory Board; James Alberson, City of Renton alternate; McCaela Daffern, King County; Dafne Hernandez, City of Covington; Laurel Humphrey, City of Tukwila; Angie Mathias, City of Renton; Layelah Wilson, City of Federal Way; Anyah Zupancic, City of Burien; Evan Maxim, City of SeaTac. II. PUBLIC COMMENT No public comment was received. III. APPROVAL OF FEBRUARY 21, 2025 MINUTES Kristina Soltys moved to approve the February 21, 2025 minutes as presented, seconded by Eric Zimmerman. Motion passed (8-0) IV. AGENDA MODIFICATIONS No modifications to the agenda were made. Sunaree Marshall joined at 1:11 PM Carmen Riveria joined at 1:15 PM V. BOARD BUSINESS a. ICEBREAKER Executive Board members split into groups of two or three and discussed their dream headline for SKHHP five years from now. The headline Claire Goodwin developed was, “South King County most affordable and desirable place to live in King County.” Eric Zimmerman and Kristina Soltys developed the headline, "Grand opening for SKHHP! $100 million in public/private funds opens doors to 1,000 families in need." Nancy Backus, Merina Hanson, and Victoria Schroff developed the headline, "SKHHP proud to share that funding will occur in all member cities this year." The headline Thomas McLeod, James Lovell, and Sunaree Marshall developed was, “SKHHP produces record housing again.” The headline Carmen Rivera developed was "South King County and SKHHP solve homelessness." b. 2024 ACCRUED INTEREST AND FUTURE POLICY Claire Goodwin explained that from 2019 to 2023, contributions to SKHHP in the operating and capital fund accrued $153,529 in interest. Most of the interest SKHHP accrued was on contributions to the Housing Capital Fund. Spending interest earnings requires the approval of each SKHHP member council with allocated accrued interest based on their contributions. In 2024, this was done through the annual work plan and budget adoption process, and the Executive Board recommended that those funds be applied to the 2025 operating fund balance. SKHHP member councils approved that use. The interest accrued in 2024 on all SKHHP funds totaled $540,377, and the Board has not discussed a reserve policy or other ongoing policy for using interest earnings. In the draft 2026 budget included in your agenda packet, a reserve line item equal to the total accrued interest in 2024 was added at the bottom. That was intended as a placeholder for this conversation and not a policy recommendation, given that Board direction was needed prior to making that determination. Based on your Council's approval, the draft budget's beginning and ending operating fund balance includes the interest from 2019-23. Since Kent's contributions account for a large portion of the accrued interest and Dana Ralph isn't present today, Claire Goodwin will ask her to weigh in on this at the April meeting. Claire Goodwin has prepared five options for the Executive Board to consider. Option 1: Adopt a policy that maintains 30% of expenditures in reserve and apply the remaining to a Board priority. A Board priority could be anything. It could be applied towards a rapid acquisition fund for developers to purchase naturally occurring affordable housing (NOAH) and ensure long-term affordability. It could be added to the Housing Capital Fund or the operating fund balance. In the 2026 budget, 30% of expenditures would total approximately $145,000. A reserve fund could be used in future years to mitigate increases in member dues if a recession hits hard, or any other unanticipated expenditure need that the Board approves. Under this option, the $145,000 would show up in reserve in the 2026 operating budget. Member Councils would authorize using 30% of their accrued interest from 2024 as an unrestricted fund balance in reserve, allowing the Board to use it when needed. In future years, councils will approve whatever amount is required to meet the threshold of 30% of total expenditures. The 30% figure is what the Regional Coalition for Housing (ARCH) uses as a goal to maintain in reserve. South Sound Housing Affordability Partners (SSHA3P) and Alliance for Housing Affordability (AHA) do not have reserve policies. Option 2: Use towards a rapid acquisition fund for South King County. SKHHP hears frequently about the need for funds to purchase properties for sale quickly. There is currently no dedicated source of funds available for rapid acquisition in South King County. We've discussed it before but haven't had the funds to make it happen. Under this option, we would add staff capacity to establish a rapid acquisition application, vetting, and approval process. The fund may not have enough until several years of contributions are made to be substantive, but it addresses an identified need in the developer community. Nancy Backus asked if the options were included in the agenda packet. Claire Goodwin responded that these were initial ideas for discussion and not included in the agenda packet. Option 3: Apply towards the Housing Capital Fund. SKHHP would add it to each funding jurisdiction's approval amount during the Housing Capital Fund concurrence process. We could seek approval during the annual work plan and budget process for members who don't contribute to the Housing Capital Fund. Option 4: Apply to the operating fund balance. Option 4 would show an incredibly high fund balance of around $900,000 that SKHHP could continue to spend down as our revenues haven't quite caught up with our expenditures. It may open the question to Member Councils about why they should pay any member dues if the fund balance is so high, but it would provide an additional cushion on the operating side. Option 5: Any combination of the options discussed. Kristina Soltys asked if there were opportunities that SKHHP has missed by not having a rapid acquisition fund like Option 2. Claire Goodwin responded that an example is that the City of Burien has a notification of sale policy for NOAH properties. Non-profits are interested in purchasing these properties to secure affordability but lack the funds. Kristina Soltys asked if the rapid acquisition fund would only purchase properties or if land acquisition would be included. Claire Goodwin responded that it would, but the same requirements for the Housing Capital Fund projects would be used for projects related to the acquisition fund. Claire Goodwin stated that for jurisdictions without notification of sale policy, there is an informal process by which potential sellers inform the jurisdiction, which tries to find non-profit buyers. James Lovell added that a rapid acquisition fund is generally not used to purchase land because you're trying to get housing online quickly. Even if you purchase land, it will still be years before housing is available for residents. Eric Zimmerman asked if the interest earnings on funds awaiting distribution were the only way to earn funding while the money waited to be distributed. Nancy Backus responded that only the interest earnings could likely be used, and the funds were required to be liquid. Sunaree Marshall asked if Option 6 could use the funds to fill funding gaps in projects SKHHP has already funded through the Housing Capital Fund. Liz Stead asked about how ARCH or others have used its reserve fund. Claire Goodwin responded that ARCH has never touched its reserve due to an unspent fund balance that carries over into its budget. She anticipates that SKHHP would also not need to touch the reserve fund, but it could be used to reduce an increase in future member dues. Sunaree Marshall added that ARCH had a situation where they had to conduct a forensic analysis of their compliance related to a funded homeownership project. This could be an example of an unforeseen circumstance that SKHHP could use the reserve fund to cover. Victoria Schroff asked if the Board could determine whether a portion of the reserve could be split between a restricted and unrestricted fund. Claire Goodwin responded that the Board could design the reserve fund policy as it saw fit. Victoria Schroff asked if each jurisdiction would have a separate policy related to the interest earnings on their individual funds. Claire Goodwin responded that even though interest accrued on each jurisdiction's individual earnings, it would be logistically easier to manage if the policy applied to all the interest earnings. James Lovell stated that he felt strongly about Option 3. If not Option 3 directly, it should be Option 1. The Board would prioritize the remaining funds for the Housing Capital Fund. This approach would reduce some of the questions the Member Councils may ask. Nancy Backus asked if the intent was to vote on options at the next Executive Board meeting. Claire Goodwin responded that she would like to put together more detail, but the intent would be to adopt it in May, along with the 2026 work plan and budget. Nancy Backus asked if the Board members would be able to take the options to their Member Councils in April so that they could receive feedback before the May Executive Board meeting. Kristina Soltys suggested reducing the options before returning them to the Member Councils. She suggested that the Board reach a consensus on two options and discuss them further with the Member Councils. Merina Hanson noted that Dana Ralph was leaning toward the reserve policy option but was unsure which Dana Ralph would prefer. Liz Stead said she supported Option 1, with the Housing Capital Fund as the board priority. Before returning it to her Member Council, she would want more information on the Board priority and the details of a reserve fund. Thomas McLeod said that he is supportive of Option 1 or Option 3. Carmen Rivera agreed with Kristina Soltys and would like to narrow the options down to Option 1 and Option 3 before bringing it back to her Member Council. Nancy Backus stated she liked Option 1 and Option 3. Victoria Schroff was interested in hearing more of Dana Ralph's perspective. Merina Hanson added that the reserve policy seemed interesting because of some potential future challenges South King County city budgets experience. Nancy Backus added that federal funding is uncertain, and there have been years of lean budgeting. Having a reserve fund to help cover the membership fees may be beneficial. Kristina Soltys added that budget issues would likely simultaneously impact all the SKHHP cities, so preparing for those future challenges might make sense. Nancy Backus added that the Board could always change the policy. If the reserve fund has a sufficient balance, the Board could redirect future interest earnings to one of the other options discussed today. Claire Goodwin asked if the Board would want to reopen the interest earnings discussion yearly or have a more consistent policy that could be reviewed as needed. The Board agreed they would want a consistent policy with the option to revisit it as needed. Claire Goodwin stated she would prepare documents showing each jurisdiction’s interest accrued, which would help the discussions. Nancy Backus added that it is essential to remember that the total interest earnings are a combination of all the SKHHP members. Eric Zimmerman added that Normandy Park did not need a council review, and he supported Option 1 or Option 3. Claire Goodwin confirmed with the Board that it was most supportive of Option 1 combined with Option 3. c. 2026 SKHHP WORK PLAN AND FIVE-YEAR PLAN DEVELOPMENT WORKSHOP Claire Goodwin reviewed the workshop agenda and goals, which are to work collaboratively to get feedback and direction on the 2026 work plan and the five-year plan. Claire Goodwin always begins this process by referring to the Interlocal Agreement (ILA) and the SKHHP mission statement, “South King County jurisdictions working together and sharing resources to create a coordinated, comprehensive, and equitable approach to increasing housing stability, reducing homelessness, and producing and preserving quality affordable housing in South King County.” Claire Goodwin hopes to spend time at the June Executive Board meeting reviewing the mission statement and developing core values for SKHHP. Claire Goodwin reviewed several of the “whereas” from the SKHHP ILA. • “common goal to ensure the availability of housing that meets the needs of all income levels in SKC” • “parties wish to provide a sound base of housing policies and programs in SKC and to complement the efforts of existing public and private organizations to address housing needs in SKC” • “parties wish to act cooperatively to formulate affordable housing policies and strategies that address housing stability, to foster efforts to preserve and provide affordable housing by combining public funding with private sector resources, to support the implementation of the goals of the GMA, related countywide planning policies and other local policies and programs relating to affordable housing” • “parties have determined that the most efficient and expeditious way for the parties to address affordable housing needs in SKC is through cooperative action and pooling public and private resources” • "not to duplicate efforts of non-profit corporations and other entities already providing affordable housing related services" • "a cooperative work plan with a primary focus on the production and preservation of affordable housing is needed because the lack of access to affordable housing is one of the key contributors to homelessness" • “workplan activities will be consistent with the purpose described in this agreement” The ILA states SKHHP’s purpose as, "All parties to this agreement have a responsibility for local and regional planning for the provision of housing affordable to residents that work and/or live in SKC. The parties agree to act cooperatively to formulate affordable housing policies that address housing stability and to foster efforts to preserve and provide affordable housing by combining public funding with private-sector resources." Claire Goodwin reminded the Board that it had completed a survey related to the work plan back in January. SKHHP staff used that feedback and reviewed a draft work plan with the Staff Work Group. Their feedback was also incorporated. The Executive Board was provided two versions of the work plan to review at today's meeting. After today, the input will be added to the draft, and the Staff Work Group will review it with the intent for the Board to adopt the work plan at the May Executive Board meeting. Member Councils will adopt the work plan after the Board approves it. The work plan's goals remain the same from 2024, and no action items were removed from the draft. Items that were added to the draft: • Establish and implement monitoring and compliance processes to ensure Housing Capital Fund projects maintain affordability for tenants • Indicator to establish the process for monitoring and compliance • Indicator for the number of collaborative work sessions held with public funders Items modified in the draft: • Develop and execute contract documents for projects ready to move forward rather than named projects • Clarified indicator for number of housing units and number of projects • Added clarity that the subregional affordable housing preservation strategies would be in coordination with the long-range planners • Removed ‘technical assistance’ from project to update the Affordable Housing Inventory Dashboard • Reordered policy items so those affiliated with long-range planners are next to each other • Decreased priority on several items under Goals 2 and 3 • Increased priority for collaborative work with public funders to increase alignment Eric Zimmerman noted that he had underestimated the need to engage with legislators on SKHHP and South King County’s work. If he were to complete the survey today, he would rate meeting with legislators as much higher. Claire Goodwin added that three survey respondents said they would remove meetings with legislators from the work plan if they had to choose two items to remove, and two respondents listed it as their top two items in the work plan. Where an item doesn’t have a clear consensus, Claire Goodwin maintains its priority on the work plan draft. Nancy Backus added that something must be said about coming together after completing a survey to discuss the results and see if different perspectives shine new light on different action items or goals. She added that it would be essential to go through and ensure the priority levels match the Board's intent. James Lovell added that he was one of the respondents who stated meeting with legislators was a priority but feels a constant second-guessing related to the work laid out in the ILA and the need to confer with Member Councils before taking a legislative position, which can delay the responsiveness of SKHHP's advocacy. SKHHP would have to make some structural changes to increase the priority of legislative advocacy. Nancy Backus added that the Association of Washington Cities (AWC) has a legislative priority subcommittee that develops the initial priorities, but during the session, there is a weekly meeting of board leaders to be more reactive. She said this might be an option for SKHHP to consider. Eric Zimmerman noted that Normandy Park was joining a working group with appointed members of the city government and House and Senate members to prevent some of the concerns that arose during this year’s session. James Lovell asked if the City of SeaTac and Normandy Park were the only SKHHP cities in one legislative district. It was noted that many SKHHP cities are in multiple legislative districts simultaneously. Claire Goodwin stated that around 30 state legislators are in the SKHHP service area. Carmen Rivera noted that she had challenges adding the SKHHP legislative priority to the City of Renton’s priorities due to some pushback about the city’s priorities being separate from the region. This could suggest challenges in SKHHP getting consensus to advocate to legislators. Kristina Soltys asked why pooling resources with member cities was a priority since it's essential to SKHHP's work. Claire Goodwin stated that it was on the work plan because SKHHP staff is still working with a couple of SKHHP member cities in the ongoing conversation on what funds to contribute to the Housing Capital Fund. There are untapped potential resources that can still be pulled. Kristina Soltys felt that it did not need to be stated, but if it's helpful for SKHHP to have it stated in the work plan to continue this work, it should stay. James Lovell said the work plan is the document that tells SKHHP staff how to spend their time. It can sometimes be essential to include implicit items to ensure a greater understanding of the work that goes into the explicit work. Claire Goodwin concurred that the work plan is how SKHHP staff spend their time, and a staff capacity analysis was included in the agenda packet. Claire Goodwin explained that the priority level reflects the item in relation to the other items in the work plan. SKHHP staff will prioritize higher priority items over medium and lower priority items. On the staff capacity analysis, items two, three, and four are all related to the Housing Capital Fund and are anticipated to take up 54% of the Executive Manager's time. This analysis is helpful as the work plan and five-year plan are developed to understand where SKHHP staff time and resources are allocated. Adding items to the work plan would require removing or scaling back items already on the work plan. Kristina Soltys noted that she did not like having meetings with legislators listed at the bottom of the priority list, fourteen out of fifteen. Eric Zimmerman stated that the rationale for HB 1380 was a belief that cities weren't doing enough on their own on housing and homelessness issues. Part of meeting with legislators is helping to raise awareness of the great work that SKHHP, ARCH, and others are doing. There isn't a need to address every policy issue or concern, but to build a relationship with the legislator to build trust and reduce the belief that the legislature needs to work on behalf of cities. Nancy Backus asked the Board if it would make sense for SKHHP to hold a legislative forum inviting the over thirty state legislators representing South King County to explain SKHHP’s work and philosophy. Eric Zimmerman said it was a great idea, and he intends to work with his Council to invest more in SKHHP and feature it as part of the city's work to end homelessness. Kristina Soltys added that she would be available to center SKHHP's work in front of the legislature any time. James Lovell agreed but said the Board would have to reprioritize the list to adjust for an increased focus on scheduling a legislative forum. Claire Goodwin responded that the Executive Manager's capacity is 91% for the higher priority items, and she would not reduce that. The Executive Manager could reduce her time interacting with the Advisory Board or attend fewer regional meetings to make time to support a legislative forum. Eric Zimmerman asked if it would be helpful for the Board to help reach out and invite legislators to the event. Carmen Rivera added that it was a great idea and asked if the Board could take on some of the work, like meeting with legislators to help balance staff capacity. Claire Goodwin said that expanding the Board's role would be great, and work would need to be done to ensure a shared message among the Board members. Nancy Backus noted that most Board members have a relationship with their legislators. With a united message, Board members could reach out with a familiar name to invite the legislators to a SKHHP event. Eric Zimmerman liked that idea. Liz Stead supported the idea of working together to invite legislators to a forum and then carry the message to individual meetings but is less supportive of SKHHP staff time becoming dedicated to being a lobby organization. Victoria Schroff agreed and noted that it was like the Southeast Area Legislative Transportation Coalition, whose members meet individually with their legislators and then hold one larger meeting as part of an action day. Unified letters are also sent out, which everyone signs on to. Maria Arns suggested that the Advisory Board could support the Executive Board in holding a legislative forum. Sunaree Marshall just wanted to be very clear about the scope of this work. She was less supportive of becoming a lobby organization and taking legislative positions but supported spending time uplifting the work that SKHHP has been doing. Claire Goodwin stated that she would take feedback on the legislative forum idea and begin doing research on the effort to accomplish it. Nancy Backus noted that the 2025 work plan may need to be amended so that the forum is held before the 2026 legislative session. Claire Goodwin suggested just holding the legislative forum instead of amending the work plan, which would avoid the need to bring it before all the member councils. Nancy Backus agreed. Claire Goodwin confirmed that the Board would want a legislative forum in 2026 in addition to one this year. Claire Goodwin noted that the time remaining in the meeting was short, so the discussion in April would focus on the items the Board wanted to add to the 2026 work plan. Regarding the 2025 budget, member dues are increasing by 15% through 2026. The Board adopted this policy in July 2021 to move toward a more balanced budget. The Member Councils were briefed on this in 2023 and 2024. SKHHP budget expenditures are increasing by 3% over 2025. Budget categories have been aligned to better match the administrative agency's accounting system. There are additional budget items that Claire Goodwin will seek feedback on at the April Executive Board meeting. There is $18,000 not included in the draft budget, which would be used to update the Affordable Housing Inventory Dashboard every two years to ensure the NOAH predictive layer and other features remain current. Claire Goodwin explained that SKHHP does not have a long-term vision outside of the yearly work plans. The Executive Board has presented some big ideas alongside some of the remaining elements to accomplish in the ILA, and implementing them requires a more extended look at SKHHP's future. The reasons for developing a five-year plan include establishing the vision for the next five years, fostering consensus and clarity, allowing time to adjust accordingly, allocating staffing resources and budget, and providing opportunities for discussion on achieving new goals. The intent is to continue the conversation at each of the in-person meetings in 2025 in June and September. The first step in the process is to inventory all the ideas suggested by Board members, the ILA, or past work plans to determine which items should be a focus for SKHHP in the next five years. A handout was provided to the Board consisting of the sixteen ideas, their source, the resources to complete the action, and the impact the idea might have. The ideas have been categorized into four quadrants to develop a priority matrix: lower-effort, higher-return; higher-effort, higher- return; lower-effort, lower-return; and higher-effort, lower-return. Claire Goodwin noted there wasn't time to complete the whole exercise but hoped the Board would be willing to identify their top five ideas today to start the discussion. This would lead to a voting process to determine the Board's interests. Liz Stead asked if an item already in the ILA should be prioritized the same as the new ideas and proposed that as a strategy for the Board to consider. Claire Goodwin responded that it was up to the Board, as the ILA has ambitious goals for SKHHP that may ultimately require more staffing to implement. Thomas McLeod asked if he could email his top five. Claire Goodwin responded that would be great. Claire Goodwin added that the next step of the exercise is to take the five items selected and attempt to determine where they would fall in the work plan draft as priorities. This helps to consider the capacity or resource needs necessary to implement the idea. Nancy Backus confirmed that the Board would send Claire Goodwin its top five ideas by March 28, 2025. VI.UPDATES/ANNOUNCEMENTS Nancy Backus shared that Dorsol Plants, in his role outside of SKHHP as the Co-Chair of the Continuum of Care Board, gave an outstanding presentation to the KCRHA Governing Board. Claire Goodwin shared that SKHHP has officially closed on its first and second projects since the February meeting. Victorian Place II in Des Moines closed earlier this month, and Burien Miller Creek closed last week. SKHHP has also transmitted its first draw to the Multiservice Center. The contracting and documents required to close are lengthy and arduous and require great patience and perseverance, especially for more complicated projects like Burien Miller Creek. The next project SKHHP staff anticipate closing on will be Burien Family Housing, with a goal of early May. Nancy Backus asked if SKHHP has been invited to any groundbreaking or opening events related to the projects awarded funding. Claire Goodwin responded that invitations would be coming for future projects. The Board was invited to the Burien Miller Creek groundbreaking in August 2024, but only the Program Coordinator was available to attend. Dorsol Plants has updated the Legislative Update slides for you as of this morning. SKHHP staff will send out an electronic version after the meeting. The final numbers for the annual report came in, and Claire Goodwin will update the draft report she shared at the last Executive Board meeting and send it out by the April meeting. Based on the survey completed in February, the June Executive Board meeting will be moved to June 13. SKHHP will launch a webpage on our website that shows the location of all our Housing Capital Fund awarded projects on a map once SKHHP staff completes the Council approval presentations. Claire Goodwin will be on vacation from April 4 to 15. Because of this, she will send April's agenda packet on April 3. For urgent matters related to SKHHP, please contact Dorsol Plants. Next week, SKHHP staff will present at the City of Renton, Federal Way, and Des Moines to seek concurrence on the Housing Capital Fund projects. VII. ADJOURN Nancy Backus adjourned the meeting at 3:00 PM. Program Coordinator-SKHHP