2002-2003 Annual Report

2002-2003 Annual Report

Vision: To be the recognized leader in helping the nation’s counties build viable communities through neighborhood revitalization, job creation, and the expansion of affordable housing opportunities.

Mission: To provide leadership in helping America’s counties implement an effective response to their affordable housing, community and economic developmentneeds through education, technical assistance, and advocacy.

Officers

President

Jeff Bertrand

Borough of Sayreville, NJ

Vice-President

Terry Gonzalez

Los Angeles County, CA

Secretary/Treasurer

Tony Crapp

Miami-Dade County, FL

NACo Board Representative

Randy Patterson

Lancaster County, PA

Immediate Past President

Peter C. Munroe

Clark County, WA

Past President

Linda Peterson

King County, WA

Board of Directors

Gary Bachman

Pima County, AZ

Maggie Conway

Shelby County, TN

Brian Cramer

Tarrant County, TX

Norma Drummond

Westchester County, NY

Barbara Hayden

St. Louis County, MN

Frank Newton

Cobb County, GA

Douglas Payne

San Bernardino County, CA

Ken Pick

Berks County, PA

Melvin Richardson

Fulton County, GA

Joseph Rutch

Bergen County, NJ

NACCED Staff

NACCED is managed by Smith, Bucklin & Associates, a nationally known association management firm.

Executive Director

John C. Murphy

Community and Economic Development Director

Carmel McGuire

Administrative Coordinator

Tracy McCrimmon

Staff Accountant

Bill Gaskill

Conference Coordinator

John Rubsamen

Marketing Manager

Lynne Harris

Graphic Designer

Rose Thai

President’s Message

As we assemble for the NACCED 28th Annual County Community and Economic Development Conference and Training in Tarrant County, Texas, it is my pleasure to submit to you our 2002-2003 Annual Report.

It is with great pride and extreme thanks to the other members of the executive committee, the board of directors, committee chairs and members, and staff that I present to you the various activities and initiatives that have enabled NACCED to achieve unprecedented advancement of its mission.

The highlights are as follows:

• NACCED representatives testified before Congress on a variety of issues impacting affordable housing and community and economic development. As a result, funding for core programs was maintained for CDBG and increased for HOME in the FY 2003 appropriations act and modest increases look promising for FY 2004.
• NACCED staff continued its exceptional work with the U.S. Department of Housing and Urban Development (HUD) on issues of importance to counties. NACCED set up and coordinated quarterly meetings with HUD Assistant Secretary for Community Planning and Development, Roy Bernardi, and his senior staff on a range of issues affecting the CDBG, HOME and homeless assistance programs. Other meetings with HUD staff were held as issues and events dictated. NACCED members also came together in a number of ad hoc task forces to advise HUD on such issues as improvements to the Integrated Disbursement Information System, streamlining the consolidated planning process and content, the proposed rule on faith-based organizations, transition to the use of the 2000 Census data, and the CDBG formula study. HUD increasingly relies on NACCED as the voice of counties and pays attention to our expertise and insights.
• NACCED held an economic development primer, “What Elected Officials Need to Know about Economic Development,” at the NACo Legislative Conference. The session, which attracted 75 elected officials and practitioners, was designed to respond to the desire of members of the Community and Economic Development Steering Committee who thirst for practical information on how to improve local economies.
• NACCED conducted three regional peer match technical assistance sessions under our HUD-funded HOME Technical Assistance contract. The topics ranged from HOME program management to creating and working with Community Housing Development Organizations. In addition, NACCED staff linked several counties with a technical assistance need in implementing the Community Development Block Grant program.
• NACCED’s Board implemented the Strategic Plan for 2002-2005 and, using that as a backdrop, our standing committees developed and implemented the 2003 Work Plan. Improvements centered on more focused objectives, tasks, responsibilities, target dates and expected outcomes.
• NACCED’s Board and staff held a strategic planning session in conjunction with the NACo Annual Conference in Milwaukee. The morning was devoted to a team building session whereby the Executive Committee, Board of Directors and staff participated in a Habitat for Humanity Build, which was cosponsored by Habitat International and its local chapter, Freddie Mac, HUD and NACo. I was privileged to speak during the program following the build in which the new homeowner’s contribution of “sweat equity” in building the home was acknowledged. We also used this opportunity to express support for the Administration’s proposed American Dream Downpayment Initiative. The afternoon was given over to a detailed discussion of the results of a recent membership survey regarding the quality of member services and a review of the strategic plan.

• In an effort to develop future leaders of NACCED, we fine-tuned our approach to board

orientation and development. Roles and responsibilities of officers, board members, board liaisons, committee chairs, vice chairs and committee members were defined in a comprehensive document that was distributed and implemented by all.

• Regular and associate membership in the Association increased by 4 and 3 members,

respectively. This increase marked the single largest expansion of membership since 1999. We also secured renewals from three former members that had previously discontinued their membership.

• NACCED strengthened its strategic alliance with the International Economic Development Council (IEDC) whereby NACCED members may take advantage of IEDC’s educational opportunities at IEDC member rates and vice-versa.
• NACCED will award the second John C. Murphy Scholarship at the 28th NACCED Annual conference to Ms. Laticia Buchman, an intern with the Tarrant County, Texas, Community Development Division. Ms. Buchman is a candidate for a master’s degree in Urban Affairs at the University of Texas at Arlington. The scholarship was established to provide financial aid to an undergraduate or graduate student pursuing a degree that includes course work in affordable housing, or community or economic development, a field that Ms. Buchman intends to enter.

Both NACCED’s staff and our host Tarrant County have worked especially hard to develop an exceptional program for us as we gather here, and I look forward to seeing each of you at this event.

As a 16-year participating member of NACCED, it has been a distinct and fulfilling pleasure to work with and for each of you during the past year. I encourage those in leadership positions within the Association to continue their commitment, and I hope that each individual member takes an active role in NACCED in the future. I also would like to express my appreciation to the incoming President – Terry Gonzalez. I know that with her leadership the Association is in good hands for the future.

Thanks again for the opportunity, partnership, and friendship.

Sincerely,

[Drop in Bertrand signature from Job #021 03 03]

Jeffry L. Bertrand

MEMBER AND PUBLIC SUPPORT

As part of its mission as a nonprofit organization, NACCED provides an array of services to its members, other organizations, and to the public. In addition to the opportunity to affect NACo and national policy through participation on NACCED committees and the Board of Directors (please see Policy Development below), NACCED members benefit from members services such as conferences and workshops, information, statutory and regulatory interpretation and technical assistance.

NACCED also is pleased to provide customized assistance uniquely tailored to county needs. Throughout 2002 and 2003, several hundred technical assistance requests were answered concerning affordable housing, community development, and economic development programs and issues, involving analysis of regulations and/or statutes, and consultation with HUD headquarters staff on programmatic issues.

NACCED’s cooperative agreement with HUD has allowed the association to continue its technical assistance services during 2002-2003 (Please see HOME Technical Assistance Project.). In addition to NACCED’s beginner and intermediate housing finance workshops, members may participate in regional and local HOME peer sessions at no cost to the participant.

POLICY DEVELOPMENT & REGULATORY ACTIVITY

Policy Development and Advocacy

During the 2002-2003 year, NACCED’s Board of Directors, committees and staff played a primary role in helping to formulate and implement the policies of the National Association of Counties (NACo) with respect to federal legislation affecting community development, economic development and affordable housing. Relevant NACCED committees gathered at the legislative and annual conferences to draft resolutions on pending legislation for the NACo Community and Economic Development Steering Committee to consider.

Legislative Activity

FY 2003 Appropriations

The 107th Congress was unable to pass a final version of FY 2003 HUD appropriations bill, a job that was left for the 108th Congress. After the 108th congressional elections, Republicans regained control of the Senate. Even a “lame duck” session failed to produce the omnibus measure needed to wrap the remaining 11 separate appropriations bills into one, including HUD’s. While the original Senate and House versions of the spending measure had increases in formula funds for CDBG and HOME, H.J. Res. 2 the final version of the FY 2003 bill approved in February 2003, contained a .65 percent across-the-board cut, wiping out some of the increases NACCED and NACo supported. The .65 percent cut was used to provide additional education funding. Even after the cut, HOME got a $111 million increase in formula grants from the previous year to $1.85 billion in FY 2003, and $70 million was appropriated for the Bush Administration’s American Dream Downpayment Assistance Initiative. CDBG, which would have received a modest $26.9 million increase in formula funding, was awarded $4.339 billion, $1.46 million less than the prior year’s level. In addition, a total of $259.3 million was approved for 885 economic development initiative grants.

FY 2004 Appropriations

President Bush presented his FY 2004 budget request to Congress in early February 2003, even before the final numbers for FY 2003 were set. The proposed HUD budget of $31.1 billion was basically a stand still, with most programs level-funded, a few increased and a number zeroed out. The formula portion of the CDBG program was proposed at $4.4 billion, the same level as FY 2002 and roughly the FY 2003 amount as well. HOME proposed an increase in the FY 2004 budget to $2.18 billion, including a $110 million increase in formula grants, plus $200 million for the Administration’s American Dream Downpayment Assistance Initiative.

Homeless housing programs also would increase to $1.325 billion, including a $50 million Samaritan Initiative to provide new housing options and services to the chronic homeless living on the streets. The Samaritan Initiative is part of a broader effort among HUD, the Department of Veterans Affairs and the Department of Health and Human Services, under the coordination of the Interagency Council on Homelessness, to address the Administration’s goal of ending chronic homelessness in ten years. Also included was $194 million to renew expiring Shelter Plus Care rent subsidy contracts, a NACCED priority. The budget document indicated that HUD will propose legislation to consolidate the Shelter Plus Care, Supportive Housing and Section-8 Moderate Rehabilitation Single-Room Occupancy programs into a single, flexible program. The budget did not say whether this would be a formula-driven block grant program, as NACCED and NACo have supported.

The budget document noted, “The CDBG formula is significantly impacted by the census and other factors. The department is pursuing proposals that would better reflect current data, fiscal need, levels of poverty, and effective use of funds.” A formula study is now under way at HUD.

The budget zeroed out funding in FY 2004 for the Section 108-loan guarantee program on the basis that Congress would appropriate funds for FY 2003 that could be used in FY 2004. It also zeroed out the $25 million in brownfields redevelopment funds, saying that the function is being transferred to the Environmental Protection Agency. Additionally, it contained no funding for the rural housing and economic development program and the Empowerment Zones/Enterprise Communities program, essentially saying that CDBG and HOME funds can be used for these purposes.

The Bush Administration’s FY 2004 budget also called for block-granting the Section-8 rent subsidy program to the states through a new program called “Housing Assistance for Needy Families.” The budget document said “…Converting the current [voucher] program to a block grant approach is necessary to improve the delivery of rental and homeownership subsidies for low-income families and eliminate the significant utilization and recapture problems that plague the current tenant-based program.” States would have FY 2004 as a transition year to ramp up their programs.

Prince William County, Virginia, Board of Supervisors Chairman Sean Connaughton testified April 9 on behalf of NACCED, NACo and several other national associations and urged the Subcommittee to increase formula funding for CDBG to $5 billion and HOME to $2.25 billion. “These programs work; they make a real difference in people’s lives; and it is our sincere hope that they will be funded at levels that reflect the very real community development and affordable housing needs that exist across our country,” he said.

Mr. Connaughton took aim at the Administration’s proposal to block-grant the Section-8 rent subsidy program and turn program administration over to the states. “We are strongly opposed to this proposal. The Section-8 voucher program is a highly cost-effective, market-driven program. Section-8 is not only a successful means of providing decent, safe and affordable housing in its own right, but it is also an important lynchpin in supporting a wide variety of other housing programs such as homeless grants, HOPE VI and homeownership.” Noting that the State of Virginia had recently returned Section-8 administration to his County, Mr. Connaughton said the move has improved customer relations, expedited payments to landlords and enabled the program to respond to the local assessment of priorities in support of those in need.

On July 25, the House passed H.R. 2861, the FY 2004 HUD appropriations bill. It provides a nearly $200 million increase in CDBG formula grants to $4.5 billion and a $25 million increase in HOME formula grants, plus $125 million for the downpayment initiative. It took no action on the Administration’s Section-8 block grant proposal, saying that was an issue for the authorizing committees. The Senate will consider its version of the bill in September. In anticipation of that, NACCED and NACo helped secure the signatures of 30 senators on a letter to HUD Appropriations Subcommittee Chairman Christopher Bond (R-MO) and ranking democrat Barbara Mikulski (MD) urging them to fund CDBG formula grants at $5 billion and HOME at $2.25 billion.

Administration’s Tax-Free Dividend Proposal

In January, President Bush proposed a 10-year, $726 billion economic stimulus package, with a proposal to eliminate the double taxation of corporate dividends passed through to individuals. Because of the structure of the proposal, it had the unintended impact of harming the Low-Income Housing Tax Credit and tax-exempt bonds. Armed with a study by the accounting firm Ernst & Young detailing the impact, NACo and NACCED joined a coalition of other national organizations in a strong grassroots lobbying effort seeking to modify the proposal as it made its way through the legislative process. According to the study, if enacted, the proposal would result in the loss of 40,000 units annually or 35 percent of the 115,000 currently produced. It also would add 25 to 50 basis points in additional borrowing costs to issuers of tax-exempt housing bonds. The proposal would cause a serious loss of critical housing units at a time of growing need for households with worst-case housing needs (i.e. paying more than 50 percent of their income for rent and/or living in substandard housing). A five-month effort from January to May culminated in Congress passing, and the President signing, H.R. 2, a 10-year, $350 billion tax-cut bill that rejected the Administration’s tax-free dividend framework and substituted it with a tax rate of 15 percent. With the tax credit and tax-exempt housing bonds protected, a hard-fought victory was declared!

Mortgage Revenue Bonds

Early in the 108th Congress, legislation was again introduced to make two key refinements in the tax-exempt Mortgage Revenue Bond program. The first would repeal the so-called “10-year rule,” which requires that mortgage prepayments received 10 years after the date of a Mortgage Revenue Bond’s issuance be used to retire the bonds, rather than making new loans to qualified first-time homebuyers. The other refinement provides an additional method for determining the maximum purchase price for a qualified home under the program by basing it on a multiple of the area median income. NACo reaffirmed a resolution at the 2003 Annual Conference in support of legislation to make these changes. H.R. 284 and its companion S. 595 had by the end of July 2003, 283 and 52 House and Senate cosponsors, respectively. NACCED then initiated efforts to find a suitable vehicle to attach to this legislation.

Housing Authorization Legislation

The House Financial Services Committee and its Housing Subcommittee had a busy spring approving H.R. 1276, the Bush Administration’s “American Dream Downpayment Assistance Act.” The bill authorizes $200 million for each of FY 2004 and 2005 in grants to local and state participating jurisdictions under the HOME program. It may be used only for assisting first-time homebuyers toward the purchase of single-family housing. Funds would be distributed to participating jurisdictions under a HUD-developed formula that considers a participating jurisdiction’s need for and prior commitment to assisting homebuyers, measured by its use of HOME, CDBG, mortgage revenue bonds and prior year’s funding from state or local funds. The Committee amended the bill to loosen the targeting for these new funds, but not for the underlying HOME program. Participating jurisdictions could assist first-time homebuyers who are municipal employees with incomes up to 115 percent of median, rather than being limited to HOME’s 80 percent of median income. In HUD-determined high cost areas, the income limit could increase to 150 percent of median income.