An Appropriation in the amount of $150,000 from Free Cash to the Affordable Housing Trust (#8270).

Transcript (~52 min @ 1:43:38)

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▶ 1:43:22 Mark Garipay: Second, We have a motion to move the bottom line of 2 91. Emergency Management made by Council Stewart, seconded by, uh, vice GM on discussion. All in favor? Aye. Opposed? That bottom line. Moved. Next step, we have appropriation request for 2025. ID 1, 2 7, 3 7 and appropriation in the amount of $150,000 from free cash to the Affordable Housing trust number 8 2 7 0.

▶ 1:44:00 Speaker 4: Do You wanna get started? Sure. Hello, I'm Lori Massa, the planning director, um, for the city. So, um, I'm here with the mayor to request $150,000, um, to be allocated of free cash to the Affordable Housing Trust fund. The fund was established in 2020, um, and the board got going in earnest, um, thanks to the mayor in January of, of, um, this year. And we received the help of the Massachusetts Housing Partnership Technical Assistance Grant. Um, to get going, um, with this board, there are five members, um, on the board of trustees and the planning department staffs the board. We, uh, established draft mission, uh, draft mission and goals, um, and we're working on an action plan and application materials, um, for the trust. We'll have community engagement in the fall before finalizing the plan. Um, as the trustees plan for possibilities of, um, their work, having more funding is critical to making an impact in the community. Um, Melrose doesn't have the Community Preservation Act, which is a surcharge on the tax levy against, um, real property. And so this is a form of funding that, um, most affordable housing trusts in the Commonwealth use as their source of funding. Um, so our trust doesn't have that. Um, so the funds that we do have are from, um, payment in lieu of, um, affordable housing or payments for fractional units, um, of affordable housing that are required in our zoning ordinance. And there was a $75,000 allocation, um, to the fund for, uh, free cash in 2021. So the total right now is, um, approximately $600,000. Um, so trust funds are an important tool for addressing our local needs for affordable housing. And, um, our board members are eager to finalize action plan, um, and get to work putting the funds to good use.

▶ 1:46:02 Mark Garipay: Council of RO then Council Hamilton. Sorry, council

▶ 1:46:05 Speaker 4: Jamal. Um, I'm not familiar. So what would, what would the trust fund, what would you use those, that money for? Like, can you gimme an actual example? Sure. So, um, the, they, the, um, the trust fund draft goals right now are in three categories. Um, so funding development and educational and outreach. So within the development, um, goal, there are two strategies where the bulk of the, the money would be used. Um, so one is explore programs that would support, um, home ownership or housing access for low and moderate income households. So that could include things like, um, loans for down payment assistance, uh, for qualified applicants or, um, loans for rehab of units. Um, and then the, another strategy is develop processing criteria for allocating trust, um, funds. So this would be, um, giving out, um, grants or loans for developing, uh, affordable housing or rehabbing, um, to create deed restricted affordable units. Um, so an applicant, um, that, you know, is, um, working right now in this would, would benefit from funds would be like the affordable housing trust, the affordable housing, um, corporation, they, you know, purchase, um, units in the community and, and hold them as affordable units. So, uh, um, you know, nonprofit like that. Um, or, you know, there, there are other potential applicants for the funds. Um, so the, um, you know, the trust is working, um, on the action plan and kind of, um, finalizing what they're doing, but knowing that we don't have kind of a steady stream of income, um, you know, creates a situation where we're, you know, one of the, the strategies around is around funding and being creative with finding other sources of funding, but there really isn't, you know, a lot with, um, well a lot coming in. So when there's an opportunity to, to add to the funds, um, we should take it. 'cause it's obviously a critical issue, um, here and, and regionally, So just, just to clarify this, so the, the funds go directly into a residence, uh, helps them to, uh, pay for housing, Right? So the, the majority of the development kind of goal would be around creating deed restricted affordable units. So it's units that would stay affordable in perpetuity. Um, so, but there were, there is potential that the, this trust could be, um, funding programs through loans or grants where, you know, somebody that's qualified their income qualified, um, to be able to, you know, afford a down payment for a, a house or, um, you know, there's work that needs to be done in a unit and they just don't have that extra money, um, to put towards, um, rehab. Then there's, there's potential that these funds could be used for those, that kind of work. Okay. And, and is there a dumber that you'd have to, uh, get to, to be able to actually, you know, grant people money to for living There? There isn't a, a magic number. I mean, it's, the fund's gonna work with what they have, but at the same time, you know, things are very expensive. So, um, having some impact of, you know, if it was like a down payment, um, assistance, you think about how much it costs for, you know, a unit and how much, how much money you need for, um, down payment and assistance. So this, this group is, if they don't have a lot of money, they're gonna be infected with education and advocacy and things like that. But in terms of the actual funding of affordable housing, it's gonna be very limited. Thank You.

▶ 1:49:57 Speaker 1: Council Hamilton. Thank You. Thank you

▶ 1:49:59 Ward Hamilton: for being here. And affordable housing is something I've been involved in, in this community for over 10 years, and I recognize its importance and I thank you for what you're doing. I, I see the value in that work. Earlier today, um, in response to my request, you indicated that, um, the trust fund has taken in about $614,000 to date. Have you dispersed or spent any of those funds yet?

▶ 1:50:27 Speaker 2: No. Okay. And

▶ 1:50:30 Ward Hamilton: before we appropriate another $150,000, um, do you have a plan in place for how you're going to disperse funds and how that will work?

▶ 1:50:43 Speaker 4: So that, that's what the board is actively working on. Um, right now it's just, you know, it's, even though $600,000 sounds like a lot, it's, if you think of, you know, how much money you'd be granting an applicant, it, it doesn't go very far. So, um, kind of knowing, planning for what kinds of work that the, the trust would be doing, it would be helpful to have that money.

▶ 1:51:07 Ward Hamilton: Yeah, I appreciate your comment that the communities that have such trusts also have the Community Preservation Act, and I understand that affordable housing is one of the four allowable uses and, um, we can all dream that we'll have CPA here in Melrose someday, maybe.

▶ 1:51:29 Ward Hamilton: Um, but at this time, and it's nothing to do with the work that your office does in or the importance of affordable housing, but to sort of, um, build on comments that I made earlier this evening on an unrelated matter, I'm very concerned about optics on spending, and I believe that we need an override to pass in this community, and I'm committed to that, and I will not waver from that position. But since taking such a strong position maybe a week ago, um, I now have a heightened focus on items that come before us. And I absolutely recognize the value in this, and I do not wish to diminish that in any way. But right now, I feel, um, that it, it might be inappropriate given that you have over $600,000 if, um, your folks on your board were to develop that plan further and come back, uh, I would be willing to entertain that. But right now, unfortunately I can't support this. But thank you.

▶ 1:52:43 Speaker 1: Anything else? Oh, I'm sorry. Council Jamal, you, I'm sorry. I radiate. It's okay. Sorry.

▶ 1:52:48 Maya Jamaleddine: Thank you. Um, do you, I know this is relatively new. The trust fund is relatively very new and, you know, probably we are still not seeing a lot of, uh, fruitful results yet, but I do believe that down the road this is a great resource for our community. Do you have any, um, data of what we were able to accomplish until this moment in terms of supporting like direct support?

▶ 1:53:20 Speaker 4: Do you want me? Sure.

▶ 1:53:20 Jen Grigoraitis: So I mean, I think to provide a bigger context, um, so

▶ 1:53:25 Speaker 7: that obviously as some of you know,

▶ 1:53:26 Jen Grigoraitis: 'cause you were here, this, there wasn't an ability to spend this money until the trust was created by this council in 2021, and then there was never anyone appointed to it until this year, thanks to all of you. So the, there was no ability to do any of this and to spend the money. Um, and the $600,000 is what's been accumulated in, you know, totality over the course of there being payments and loose. Since most developments in Melrose are relatively small, you're seeing, you know, 50,000 here, 20,000 there, that gets deposited.

▶ 1:53:55 Speaker 7: Um, since the board was fully staffed,

▶ 1:53:56 Jen Grigoraitis: they have met monthly, if not actually more often than that. Um, and are working to develop the str strategic plan, um, to Councilor Hamilton question about, you know, what is, how are they gonna disperse the money? There's already an interested party looking to engage

▶ 1:54:12 Speaker 7: with the trust for support. However, the trust felt that it made sense

▶ 1:54:14 Jen Grigoraitis: to actually develop a plan and a process before they started cutting checks. Um, so that's been the work with, um, the MA with mass housing to kind of come up with the goals and objectives and a, a process so that there can be a formal application process to consider that application. So I think there's a little bit of building the plane while we're flying it.

▶ 1:54:35 Speaker 4: Um, but also, um,

▶ 1:54:38 Jen Grigoraitis: it's something I think like Councillor Hamilton I'm very passionate about. I think as we talk about affordability in this community, I know we talk about taxes that only applies to people

▶ 1:54:47 Speaker 4: who already own a home here.

▶ 1:54:48 Jen Grigoraitis: Um, this is about trying to remove some of those barriers

▶ 1:54:51 Speaker 7: to entry to be a homeowner in Melrose,

▶ 1:54:53 Jen Grigoraitis: which we know is becoming harder and harder to do. Um, and also Secretary Augustus at a recent meeting of Metro mayors, um, acknowledged that, and he's the Secretary of Housing and livable communities for the state, that housing development costs have gone up 30% since 2021. So also a recognition that with each year, um, you know, as we continue to, the money has sat, it, its, its value is less because of those costs going up. So, um, obviously our cycle of free cash is such that we have this window of time now in order to, um, you know, possibly move this money if that's the will of the council. But I do think the trust is working very aggressively, partly knowing that there's an applicant looking to access funding, but to kind of come up with a plan and a procedure that they feel like they can stand up for future use.

▶ 1:55:39 Maya Jamaleddine: Yeah, and I, I have no doubt I'm, I truly like a hundred percent agree with you. Uh, and that makes total sense. Um, my question is, you know, how did we, uh, identify 150, um, like what this specific number,

▶ 1:55:57 Jen Grigoraitis: This, candidly, this was a request of the trust to consider free cash. It's obviously only been done one time before.

▶ 1:56:04 Speaker 7: This is the last free cash order that is before this body.

▶ 1:56:07 Jen Grigoraitis: We've tried to, you know, disperse free cash and

▶ 1:56:10 Speaker 7: or an order of urgency.

▶ 1:56:11 Jen Grigoraitis: I'll phrase it that way. So I think as you know, you started off with almost a million dollars to close the budget gap on the fire department, and then we've sort of tried to go both as we address immediate needs and then to also think about the midterm and the long term. Because, and I, you all have had a very challenging seven weeks. I know you're at the end here. Um, we're in a really challenging budget moment. Hopefully that changes. It may not, um, for future years,

▶ 1:56:34 Speaker 4: but I, we also have to be thinking on multiple tracks about immediate, midterm and long term. So we tried to take that approach with the free cash that we had available. Yeah. And if we are going to talk about, uh, results and outcome, when are we able to measure those, um,

▶ 1:56:50 Maya Jamaleddine: uh, you know, like impact?

▶ 1:56:54 Speaker 4: So we will do that as, you know, as the trust, um, does their work and can wraps up the, their action plan and, um, you know, the, the trust meets monthly. And so we, you know, are, um, going to certainly kind of share the news of, of the work of the trust, um, and we can, you know, But we don't have any timeline yet. It's the, They're working very aggressively at the moment. So Yeah. But I Have no doubt it's, Um, you know, and we have a potential, uh, applicant.

▶ 1:57:30 Maya Jamaleddine: So, um, it's, um, yeah, there, they're, I don't have an answer for exactly, you know Yeah. With what the timeline would Be, but, and I'm sorry, I I didn't mean to put you on the spot. I, you know, as much as, um, I'm, I'm a hundred percent in support and I will definitely support this, uh, order, um, me being passionate about this specific initiative, I would love to be always informed and know, you know, those measurements, how, what are the successes that we, uh, were able to achieve and how us as uh, members can we support also. Um, so, but thank you so much for the work that you guys are doing. This is amazing. Okay. Thank you

▶ 1:58:15 Speaker 1: President Vera. Sorry. Thank

▶ 1:58:17 Speaker 4: You, Mr. Chair. Um, the mayor kind of already answered some of my questions, but just the point of clarification as I was, as I joined the mayor when she was on the council in accepting, um, the order to establish the affordable housing trust, my recollection is that this is kind almost like a, you know, it's a fund we're building into because there is no steady stream of income. The source of income for this fund in part comes through free cash. When you build up a considerable amount, it sounds like the affordable trust trustees are coming up with a way to disperse it that way that it will be dispersed, will be dispersed to individuals who need assistance, home buying assistance or whatever it is. But it, it is a, it is a resident support fund, um, not for projects and design or whatnot. It's, it's not how do we build more affordable housing. It is how, how we can, uh, grant out that money to individuals. Is that cor that's the line of thinking that the, the trustees are going on, correct. The yes There, if the fund had more money, there is, you know, in other communities, if there's projects that's, you know, um, a hundred percent affordable and, you know, those kinds of projects often use like, you know, 10 different sources of funding to make it work. And so in those cases, sometimes a, a local affordable housing, um, trust will, you know, close the gap of a certain amount of money to, um, have those kinds of projects, um, happen. So right now in Melrose, we, um, we don't have a developer that's, you know, actively working, um, to be able to, you know, think that that's gonna happen anytime soon. But it could, and you know, that it is a potential, um, you know, uh, mechanism to, to use some of the funds, but it's not that the inclusionary housing will just go away. Those units are required through our zoning. And that's gonna continue, um, as it is. So it's not funding for profit developers. It would, you know, potentially, um, if there's a nonprofit all, you know, affordable, um, housing development that comes along, um, funding could be allocated for that. Okay. So non nonprofits and or residents who are in need of, so this is sort of a direct support fund. So in terms of trying to, um, you know,

▶ 2:00:40 Leila Migliorelli: measure outcomes and or think about the impact on the community, this is one of those, um, opportunities in which the residents get to feel the direct impact because they are, you know, in essence at some point, once this is, uh, you know, has more funding and a plan to disperse it and, um, the ability to apply for these funds to help support them. And this ask here is to continue to grow that fund. So I'm supportive of it as I was of supportive of the trust creation as I think it's important to, uh, directly provide assistance to residents in Melrose who are looking to, um, you know, to increase affordability.

▶ 2:01:17 Speaker 1: So thank you. Thank you. Council Williams. Yeah, thank you.

▶ 2:01:24 Ryan Williams: Um, so I, I started my career fundraising for affordable housing, um, projects, the big pro, the big projects that you're talking about, and also the services that go into them. Um, and so I am excited to see movement into the, into the trust fund. Um, I wanted to, to, uh, through the chair, just a point of clarification. This is kind of a personal, um, um, statement, I suppose, but the, there is a funding source for these kinds of trusts, and it's the Community Preservation Act. And I wish we had at Melrose, and I would love to work on that campaign. I've said that many, many times over the years. Um, but we always seem to have these huge competing financial needs that are in front of us to the point where we can't, um, go to people and ask them for what is a really limited small amount of money that goes onto the property tax bill, where seniors and people with, uh, low and moderate incomes are exempt, and then the state kicks in 30% of the funds. It's like the best amount of money raising we can do in this city, and we just can't find the political will and the air in the room to do it. Um, so that being said, you know, I, I think it's a fantastic policy directive to put money aside for direct, um, payments to people in need. It's, it's demonstrated that this helps people, that it, it ends up saving more money than it costs for cities to give straight cash payments to people in need. Um, some of the questions that I have around this are what utilization we're getting out of this at the moment, whether this is the right moment for us to be putting $150,000 of free cash into this. So, so first off, um, the, the fact that we don't have an actual plan in place yet is difficult for me. Um, I do trust the members of the, of the housing trust. I trust them. I trust the administration to do the right thing. Um, but what I heard was that we have one applicant and we certainly don't have one applicant for $640,000. Right? We have one applicant for something else. Can you disclose, are you comfortable disclosing the scale of that application request? Is it a person who's looking for a down payment assistance? Is it a person who's looking for rental assistance?

▶ 2:03:26 Speaker 4: So it's the Melrose Affordable Housing Corporation. And, um, you know, I don't remember the, the request amount. Okay. Um, off the top of my Head, I don't know the exact amount,

▶ 2:03:39 Jen Grigoraitis: but it would be bringing multiple units that are currently not affordable into being deed restricted affordable units.

▶ 2:03:45 Ryan Williams: Would they be purchasing the units with the funds to make them deed restricted? 'cause that's, I mean,

▶ 2:03:50 Jen Grigoraitis: I believe so, but we haven't formally

▶ 2:03:52 Speaker 7: received their application yet.

▶ 2:03:53 Speaker 4: Understood. We told them we wanted to have a processed

▶ 2:03:56 Ryan Williams: In place. Yeah. Understood. Yeah. I, I think this is moving in the, in the right direction. Yep. I think this is really exciting. Um, it would be a huge leap of faith for me to say yes to $150,000 in free cash without having any of that mm-hmm. In front of me right now. And I would sort of, I would be like more, more willing to hold this for 45 days and see if we can get more clarity versus saying no to it. Um, and I'm not a hundred percent sure the logistics of what that does with the year

▶ 2:04:27 Speaker 7: Through the chair. Free cash has to be allocated by June 30th,

▶ 2:04:29 Speaker 4: otherwise it will roll back into, um, to be recertified as free cash again for FY 27. Yeah.

▶ 2:04:38 Ryan Williams: Next year. Okay. Which means that potentially, you know, if we don't have flexibility, how much free cash do we have left after this? If this goes through,

▶ 2:04:47 Speaker 7: I have to look at Carrie, I think it's 416,000,

▶ 2:04:51 Jen Grigoraitis: About 400,000 than dollars. One of the recommendations from the division of local services has been to not spend free cash to zero to Yeah, of course. To roll some over. So that's been sort of, our target was about 500,000 to roll over of the amount we were allocated we had this year.

▶ 2:05:08 Ryan Williams: Okay. So this is where I am right now. Um, it's hard for me, it's hard for me to vote yes on this. And it's, it's painful to say that because it's something that I really, really deeply support and want to see in the community. So I'm not saying no, I'm sort of undecided. I want to hear more comments from counselors and hear where other people are at. Um, and I, and I would strongly encourage the trust to come before us with a more detailed plan, um, including what the outcomes of the spending would be, what the application from the corporation looks like, how many units, what the costs will be allocated to. Because when we are talking about fiscal responsibility, um, it, it sounds, it will sound, it will sound to skeptical residents. It will sound difficult to say, we don't really know what they're spending it on, but we sure hope that it goes to a good cause and that it goes to, you know, deed restricted, affordable housing. And I want to know that that's the case and have more confidence saying it.

▶ 2:06:04 Speaker 1: That's it. Thank you. Thank you, Council ver thank You chair.

▶ 2:06:06 Kimberly Vandiver: Uh, thank you for presenting this to us. Um, I, I'm, I'm really happy to see this. I'm glad that this is getting underway. Um, I, I wanted to clarify that. So it sounds like there are a few different ways that the money could be used. The current potential applicant is talking about making deed restricted affordable housing. I just wanted to clarify, because I've heard it a few times people talking about dispersing funds in a way that sounds like maybe it's just giving away the money. But I believe what you've said is that this, the typical way that this would be dispersed is a loan that would then come back into the fund once the person had used it for their down payment and been able essentially to participate in the housing process. Right.

▶ 2:06:51 Speaker 4: So Right. There are different mechanisms that, you know, the, the trust can use. Um, they can grant a loan for, um, you know, an extended period of time and it be forgiven in the end or, um, structure it, so it needs to be paid back. Um, and same if it for these residential programs, um, it could be, you know, a, a loan or a grant. Um, so, but the, the board is mindful of needing to, um, you know, be able to sustain this money. So helping, you know, people now and in the future is on their minds when, you know, but it's, it's tough when the funds are so limited and there isn't a steady source of income. Um, so the board was hoping that, you know, this board with free cash would kind of prioritize this, this need in the community and, um, at least have a, an ability to, to, um, to ask, um, for, for money for the trust.

▶ 2:07:53 Kimberly Vandiver: Thank you. And, and I, I think to, you know, things that you all to, to state, um, for the record, I mean, I think this is so important because, you know, to the, to the discussion, the kind of the elephant of the room about what, what will people say here and, you know, see us doing, um, people talk about affordability in Melrose, and, um, you know, this, this is targeted at the people for whom Melrose is not affordable, right. The people who can't put together enough for a down payment or who can't live in the community that they otherwise do live in or work in, unless they have this affordable housing that to be developed, right. This, this is in, this is the work of

▶ 2:08:38 Kimberly Vandiver: helping out the people who can't afford the rest of it. Right. And, and I just, you know, I, I don't have a prepared statement that articulates it really well, but I think I, I think this directly addresses the segment that isn't able to otherwise afford Melrose. And so I, I would love to see this pass and I hope it does. Thank you.

▶ 2:08:59 Speaker 1: Council Stewart. Thank you, Mr. Chair.

▶ 2:09:06 Robb Stewart: Um, when I was listening to Constable Williams, Mr. Chair, um, he touched upon a lot of my thoughts. Um, but first, let me let start with just a couple questions, if you don't mind.

▶ 2:09:20 Robb Stewart: Um, how many, what, in recent years, what affordable housing has been, uh, built or created in?

▶ 2:09:30 Speaker 4: So it's the, the units that are, um, required for every project that has eight or more, uh, residential units, 15% of those units have to be de restricted, affordable housing. And then if you have, um, the five, six, or seven units you can, uh, pay into the, the trust, um, payment in lieu, you can provide the unit or, or pay, um, into this trust. So, uh, I don't have the number, um, off the top of my head, but, um, you know, we, um, we've been chipping away, but it's, uh, it's really dependent on, you know, the applicants and, um, so there's not kind of a consistent increase in our affordable housing stock.

▶ 2:10:18 Robb Stewart: Okay. Just like 1, 3, 10, 30, a hundred, 300, it's

▶ 2:10:23 Speaker 4: Like three a year, something like that. Okay.

▶ 2:10:26 Robb Stewart: So it's fairly, fairly small. Small, yes. Okay.

▶ 2:10:30 Speaker 4: And we have, we've had some, um, the 40 B comprehensive permits, which have, um, 25% of the units. So those do have, have more, um, mm-hmm. You know, once you permit a project, it doesn't always get built or it doesn't always get built right away. So there's kind of a, um, a lag from permitting until actually seeing the units, um, that, you know, residents can occupy.

▶ 2:10:55 Speaker 7: Right, right. Thanks. So, yeah, I think it's a good thing that, um,

▶ 2:11:02 Robb Stewart: you are raising this money, uh, to help people, uh, that would otherwise not be able to, uh, afford. And I think that's, that's the right motion. Uh, the concern that I have is that it, um, as it was alluded to, it's we're fairly immature in this process and, uh, it, the value of money, uh, especially for these kinds of, uh, projects, if it's gonna be any kind of development projects, you said, you know, you're basically, uh, you're discounting 30% a year, uh, or 30% over the last three years. Right? Uh, so you're discounting, I don't know, like eight, 9% a year. Right. If, if, um, you do the numbers, um,

▶ 2:11:49 Robb Stewart: I feel as though if we're going to be putting money into this and we're gonna have a discount rate where we really don't get to decide for the next six to 12 months, I'd rather have that money being used for something else of benefit for the city. And then when you come to free cash and you recertify next year, that money's still there.

▶ 2:12:14 Robb Stewart: So, I don't know, I'm, I'm a little torn as well, um, because I, you know, I see the benefit, but I'm just concerned that, uh, you don't have, don't really have plan, you don't have metrics. Uh, it, it, it's really, you just, you're trying to build up money for ideas, but they're not well formed. So convince me otherwise that it's further along, please, I won't try to convince you. I think I'll flip the narrative, which is, I think the challenge

▶ 2:12:42 Jen Grigoraitis: for the trust is developing ideas without an understanding of how much money, the scale of what we're talking about, and without any consistent regular appropriation into

▶ 2:12:52 Jen Grigoraitis: that trust is, I think is a challenge. And so for the, for the board to decide, you know, do we wanna do first time home buyer assistance? You obviously wanna look at maximize the money to help as many people as possible. And so if we know we only have 600,000 and that's what it's taken us 10 years to build up, then obviously we wanna think about how do you spend down that money in a way that it's not all gone in one quick moment. So I think it's a little bit of a both and to know what's a avail, like the scope of what we're gonna do is partly gonna be determined by what is available to do it with. Um, so, and I recognize they think they've been working really hard, and I think you all fully approved them in like January, February. They started working with math housing in March. The hope is to have a fully developed strategic plan, um, which will include community engagement in the fall. Um, it's just that this is the moment in time where funding what is really our only source of municipal funding is available. Um, so I recognize the imperfectness of that and, um, you know, we'll certainly think about it again, but it's also to decide how we can do this without knowing how much we have to do things with, I think is a little bit of a, a conundrum.

▶ 2:14:04 Robb Stewart: Sure. And and was this communicated to them earlier, or is this, um, in terms of that budget, a budget would be available to them through free cash? Or was this more of discovery based on recent, uh, activities and planning? So one of the recommendations of MAs housing was

▶ 2:14:23 Jen Grigoraitis: to talk about what are, how is funding coming into the trust? And again, as a community that doesn't have CPA, that is, you know, I think that is the primary driver in most places for funding affordable housing. So we talked about what are the avenues that are available. One that was mentioned that other communities, I dunno how many have used, is free cash. So I said that I was willing to put forward a request

▶ 2:14:47 Speaker 4: to this body on behalf of the trust.

▶ 2:14:48 Robb Stewart: Okay. Great. And flipping over to the account balance, you said that, um, the recommendation was to be at 500,000 or just non-zero For dl? Sorry, for free, free cash. Yes. Um, no, the recommendation,

▶ 2:15:05 Robb Stewart: It was just not To be at zero. Not to be at zero, Not to be at zero, which we went to zero last. Okay. So not five. Okay. So it wasn't $500,000, you just said it. We tried to be around 500,000. We

▶ 2:15:14 Speaker 4: Kept it at around, I mean, it's just under, um, we were targeting 500,000. Um, okay. And so that wouldn't have even been 10% of free cash. Um,

▶ 2:15:25 Robb Stewart: Right. And so this will bring it down to four 16 is what you said. Right.

▶ 2:15:29 Speaker 4: So currently the balance with this order before you is 4 16, 6 68, if, depending on how this order goes, if it's not approved 150,

▶ 2:15:39 Speaker 7: So three six would be added. So Okay, so 2 68, 5 66.

▶ 2:15:41 Speaker 4: Yeah. And then, yeah.

▶ 2:15:43 Speaker 7: Yeah. Okay. Um, okay.

▶ 2:15:50 Robb Stewart: Well, I have a decision to make, Um, just as an aside, I, you know, everyone talks about CPA, um, and I do appreciate the value for an individual town, but what I find about the irony of CPA is that the towns that least need it, uh, gets the most benefit from it. And I think it's inequitable. Um, I've talked to, um, uh, Senator Lewis about it. I think it's, uh, something that needs to be result at the state issue at the state level. Um, and which is why I don't support it. 'cause um, I have an ethical issue with CPA and I don't think it's, uh, correctly allocating money for people that can get the most benefit from

▶ 2:16:32 Speaker 7: it. Thank you, Mr. Chair.

▶ 2:16:33 Speaker 1: Thank you. Council ro?

▶ 2:16:35 Cal Finocchiaro: Yes. Thank you. Uh, chair Carpe, I just wanna say thank you, um, for the chair, the thoughtful conversation we're having about this. Um, and I do think it's a really important, um, this trust is really important for our community. Um, and I just wanted to come back to some comments that have been made about, um, appropriating money. And we're not really sure, you know, what's gonna be done with it. I, we have done that several times, um, around this horseshoe, whatever you want me to call it. Um, you know, we've appropriated money for a design or for a, a van for Council on Aging, and that has not, no bids have been made. So we, we have appropriated money when we haven't really had a full amount, you know, full knowledge about what, where it's going and what's, what's going on that. Um, so I just wanna make that comment. But also, um, can you just clarify the, the money that's there that is from previous appropriations from the council? So

▶ 2:17:30 Jen Grigoraitis: It's, there was, there's been one appropriation from council of 75,000, 2020,

▶ 2:17:37 Speaker 4: Um, I believe it was 2021.

▶ 2:17:39 Jen Grigoraitis: 2021. And then the remainder of that has been the payments in lieu, um, that have been made by developers. So particularly if you build fewer than eight units, your choice is either to put part of a unit, unit into to be affordable, which is obviously very logistically challenging. Um, so then there's usually a payment made by the developer. And because the city didn't have the code in place to have the trust established, that money just sort of sat in an account that couldn't be used for anything else, but also couldn't be used for this until this body went through the process of setting that up.

▶ 2:18:11 Cal Finocchiaro: Okay. Thank you. I mean, like a few councils here, I'm kinda struggling with this because obviously we're at the end of this with the appropriations, and clearly we need the money, um, in our budget. But, um, I appreciate like the conversation that we're having here.

▶ 2:18:27 Speaker 3: And so, anyways, thanks

▶ 2:18:29 Speaker 1: Councilor Chedi, Uh, thank you chair, and thank you.

▶ 2:18:31 Manjula Karamcheti: I am also really appreciating this conversation, and I too am very supportive of affordable housing and this trust, and I feel like you've, we've all named the conundrum. Mm-hmm. It's just very hard to approve something when we're not sure what's gonna happen with the funds. Um, so I think what I would love, and I I think you've maybe hinted at it, but I would love, like, if we didn't approve this, what would be the impact?

▶ 2:19:07 Jen Grigoraitis: The money would not go into the trust.

▶ 2:19:10 Manjula Karamcheti: And so, did I understand you correctly in that the, the, the team coming with the strategic plan would have to perhaps shift how they allocated the money and how they did it because the, that this particular money wasn't there?

▶ 2:19:29 Speaker 7: Correct. I mean, I think there would be, again,

▶ 2:19:31 Jen Grigoraitis: I think they would, we would scale the plan toward the funding that's available, and knowing how long it took for that 600,000 to build up. And I also wanna say I $150,000 I like is not going to, fundamentally, it's not gonna build multiple units of new housing. Like we recom. We thought that this was sort of a reasonable amount to, you know, as part and when you look at the totality of where we've appropriated free cash across the needs of the community. Um, so I think it would be kind of shifting the plan. I also, I'm on the board, so I'll offer this on their behalf. I think regardless of how this goes here, I I think they would be happy to come before you all with an update on their plan and what, you know, their process for that. Um, I do know that like many of our other boards and commissions, the actual decision about how this money will get dispersed will be made by that board, um, as appointed by you all within the confines of state and local law. So I don't know that they'll ever be coming back to say, we wanna take this $50,000 and do X because the money is either coming in directly to the trust or has already been appropriated by you all. Got it. Thank you. That's just helpful in terms of impact and understanding where either decision would leave us.

▶ 2:20:39 Speaker 7: They're very excited and they're very passionate.

▶ 2:20:40 Speaker 4: They do meet on Monday nights,

▶ 2:20:42 Speaker 7: but I think they can around that.

▶ 2:20:44 Speaker 1: Um, councilor Armo,

▶ 2:20:46 Devin Romanul: Uh, thank you very much. Uh, I really appreciate the, the conversation around the table here. I'm, um, like Councillor Williams, I, I do a lot of housing work in my day job and work with a lot of land banks and affordable housing trust funds and housing departments, and recognize that we are in a national regional statewide crisis and, and housing and affordability, um, both in construction and, and how much it costs. And, and I sympathize. I am really torn that, um, you know, uh, going before community and talking about how much we're spending in this moment and where it sits in our community conversation about finances. And I, I was really on the am really on the fence, but I think where I come down is, I'm, I'm thinking about the folks in in our city who talk about the fear of raising taxes and, uh, the affordability, what it takes to come here and stay here. Um, and I think if we can make it just a little bit easier for some folks who want to be here, who wanna be, uh, a member of our community, I, I think this is a piece of the puzzle. It's a step in the right direction. I get that 150 is not gonna break the bank, um, or not gonna, you know, meaningfully move the needle on the regional housing issue. Um, but I, I thought about, you know, what, if there's a, a teacher or a cop or a firefighter in our city who maybe is taking less pay to be here, um, maybe, uh, you know, the other, or surrounding, um, school districts or police departments or fire departments who might pay, you know, 10, 15 K more and they're looking to stay here or buy here, um, that this could be a really meaningful tool in our tool belt to attract or retain public sector employees where we are. Our hands are tied in other areas, and I, I, I just can't stop thinking about that person. And I think that's where I come down. Um, and I, I think it maybe starts a conversation about the Community Preservation Act and, um, you know, the state legislative fixes aside. And, and I, I don't necessarily disagree. I I, Yeah.

▶ 2:22:51 Devin Romanul: I I think that's, uh, I think that's where I come down. And I, I, I wanted to ask, I, since I should be using this time to ask a question rather than bloviate, but I, I, I wanted to ask, are there communities that are utilizing the Community Preservation Act in your estimation to the fullest that are sort of similar size that have a, uh, more well thought out housing policy in, in this regard? Or, or is there a, a direction we could be, we could be headed? So,

▶ 2:23:16 Speaker 4: Uh, we work a lot with Malden because we're on the, um, the home consortium and they're the lead city. So, um, they've recently got their trust up and running and, um, so we've, you know, we work very closely with them and, um, bounce ideas off of each other. And they've, um, you know, they've, um, been, um, gotten, you know, affordable units, um, funded. And, um, so, you know, that's one example. Um, and, um, I also just, I, I don't think I made clear some of the, um, points about these units. The, the money that would go into, uh, a deed restricted affordable unit. Um, those units would be affordable in perpetuity. Um, and there's regulations about, um, incomes for, you know, people that would be eligible for those units. So there's this plan that we need to, um, you know, solidify, but at the same time, there are a lot of regulations, um, that, that are in place that, you know, we're, we're following. So it's not just kind of like giving, um, this group a large amount of money and they can kind of like willy nilly kind of like choose what they wanna do with it. So, um, I don't think I gave enough kind of context around that piece of it. Um, and so there are, you know, communities that are using the, the money for that purpose and, um, you know, some of these projects could be using the federal home funds, um, to help support the creation of affordable housing. Um, and so this is just a piece of, um, the ability to, to put together projects, um, and programs because they do need a whole bunch of support, um, from different, um, areas in order to, to function.

▶ 2:25:10 Speaker 7: Just to piggyback on Lori, um,

▶ 2:25:11 Jen Grigoraitis: 'cause she mentioned the federal government, I, again, $150,000 is not gonna solve the housing crisis. I recognize that, but we're also very concerned about the potential changes in federal funding to hud, which is the Melrose Housing Authority, um, is our largest public, um, source of affordable housing. And there, right now, the current proposal before Congress is to significantly reduce the budget, um, at the federal level. So this is, again, as we think about what are the tools we have in our toolbox sometimes to respond to things that are totally out of our control, I do think that's something that the, um, trust is looking at very closely about will we have fewer units available in Melrose in the future because of the, um, if the federal government pulls back from funding affordable housing?

▶ 2:25:55 Devin Romanul: Yeah, no, I, I appreciate both of those, um, comments. And yeah, I think, I think I come down on, if there are people who are pumping their fist wanted to be here, uh, especially if they're public servant in some way, I, I wanna help 'em.

▶ 2:26:08 Speaker 1: So that's where I'm at, president Mig Lee Earley. Thank

▶ 2:26:10 Speaker 4: you, Mr. Chair. Um, just to Councilor, car Shay's point of what would happen if this money doesn't go in, uh, I just wanna ask, since Ms. Golden has is at the table now, um, can you explain what happens really with free cash that doesn't get appropriated? Because I, I think some of the conversation around the table is almost like, well, it goes back in and it's gonna be available Exactly, you know, next year. So, you know, it's fine. We'll make a decision later when we have more time. My understanding over the last six years of serving on the councils, that's not exactly how that works. So would you re-explain that for us and people at home? Sure. So, um, at the end of the year, historically, we have appropriated all free cash. So our starting fund balance is zero this year. We're not appropriating that 416,000, so our starting balance would be four 16, but then all of the revenues that are collected in the general fund, and then all of the expenditures close out to fund balance. And so you could have a year where revenues exceed expenses or vice versa. Um, but that becomes the beginning fund balance. And then, um, DLS comes in and they look at your receivables. Um, they look at any funds that are in deficit. So if you have a grant, and we haven't received, um, those funds, um, police detail is an account, it's an agency account where, um, police details are paid, but we're prepaying the officer. And so those receivables have to be collected. Um, so I have found like every five years, DLS or not, DLS, uh, DOR will, um, hold, hold that against us. Um, they don't do it every year, but they look at deficit funds and they decide how, um, what funds they're going to, uh, ding us for as far as free cash. And so, I mean, my predecessor, Patrick LaRusso will always say free cash can be negative. Communities do get a negative free cash certified.

▶ 2:28:11 Speaker 7: Um, but that's,

▶ 2:28:13 Leila Migliorelli: that's essentially like a high level overview. Thank you. I think that's, that helps explain, like, my philosophy with free cash is that we have an opportunity, um, and we can't allocate free cash, but the mayor can come to us with proposals and we can accept them by not accepting them. Doesn't really necessarily put money in the bank for us for another day, just based on what you said. So it's a risk, it's a risk to not have that money there next year. So, um, again, like unless there was some, you know, ridiculous expenditure, which I don't think an affordable funding and affordable housing trust is, that's kind of how my position goes along, um, with the, the wonderful Bloviation by Counselor Romanul about what could happen and who we could help support. Um, I think that's, you know, my like fiscal mentality is, you know, why not support the opportunity that's in front of us, um, because we, we have actual choice in this, um, with this money. So thank you.

▶ 2:29:06 Mark Garipay: Thank you council, uh, council Vandiver, and then Councilor Williams.

▶ 2:29:11 Kimberly Vandiver: Thank you Chair Ro. Um, along that line of questioning, uh, so the free cash, this money, this particular money, if, if not allocated is in the free cash bucket, if still, if it is allocated, goes to the trust, um, I wanted to ask the CFO whether, um, that money when it's sitting in either of those accounts, since we are in the business at the moment of looking at every single dollar, if it earns interest differently in either of those accounts?

▶ 2:29:42 Speaker 4: Yes. So, uh, the Affordable Housing Trust is invested with Bartholomew. They manage, um, all of our, um, funds like stabilization, uh, capital, um, all of those larger funds. They manage that under the context of mass general law and what's allowable. And then, um, all of our general, uh, cash, our treasurer collector is always trying to make sure we're earning interest on everything. So everything's always being, um, invested in making sure that we have liquidity to pay what we have, uh, due.

▶ 2:30:20 Kimberly Vandiver: Okay. So regardless, it may be invested differently, but it would, it would not be sitting exactly somewhere. It would, it would be in a fund that's managed and, um, attempting to get interest if it can. Yes. Okay, great.

▶ 2:30:36 Kimberly Vandiver: And, um, yeah, I, I, I mean, I also appreciated through the chair councilor remodels discussion. I know people talk about, um, when you're making a decision about something, you need to be convinced both your heart and your mind and, you know, he spoke to the kind of the heart side of things. Um, I think from a numbers perspective, um, you know, this very roughly speaking would be 0.1% of our budget. I think, if I'm doing my math correctly in the moment, which I, I believe, correct me if I'm not this, for the average homer, this would be 10 bucks basically on their yearly bill, is what we're talking about. Um, if that helps anybody on the numbers side. Thank

▶ 2:31:13 Speaker 1: You, council Williams.

▶ 2:31:15 Speaker 5: Yeah, thank you. Um,

▶ 2:31:18 Ryan Williams: So I really appreciate everybody's conversation here. I particularly appreciated President Migli a's refresher thanks to, um, CFO about the risks of not approving free cash. This is the same argument I made when I was arguing against cutting the tree budget, because sometimes you may cuts and things don't come back, right? So I appreciate that. Um, sometimes you have an opportunity to do something and you might not have that opportunity in the future. Um, I, I think the, I think the challenge that some of us are facing is that, like, unlike other boards and commissions, we're giving a lot of money to a new thing that hasn't really demonstrate, ha hasn't shown us what they're gonna do yet. So it's a leap of faith. Um, I am particular to leaps of faith. I kind of appreciate them because I think sometimes you have to give people a little leeway, um, to see what they can do. So I'm gonna support this order tonight. Um, I have been burned in the past by having faith in things and then turning out that they weren't so good. But there's a lot of good, smart people around the table, um, doing this work. So, um, I would really like to see in the near future the plan here, because there's so much diversity in affordable housing. You know, are we talking about paths to home ownership? Are we talking about people with rent burdens, right? Because renters, you know, in, in Melrose, um, can be kind of a blind spot for people on the council. Uh, none of you know, none of us are renters. Um, so I just, I, I, I, it's exciting work. I wanna know more about it. I think the CPA is the only way that we can make meaningful progress on this, but, uh, presented the opportunity. I will support giving the trust some cash to see what they can do.

▶ 2:33:14 Speaker 5: Thank you.

▶ 2:33:15 Speaker 1: Councilor Firo. I'm okay. Thanks. What's that? All set? Uh, anyone else?

▶ 2:33:24 Maya Jamaleddine: Council Aldi, I would make a motion to recommend.

▶ 2:33:29 Mark Garipay: Second, we have a motion to recommend by Council Aldi, seconded by councilor, I mean, president Elli. If I could just, um, listen into everyone's conversation. I'm struggling like everyone else. Um, with with not having a plan, I'm more of a risk taker, um, and kind of a, a saver. And, um, I'm kind of leaning towards, um, not supporting this. Um, not because I'm not for affordable housing. I think, um, we have a few months to see what the plan, what the plan is gonna be, um, when they come back in the fall. I understand we do have some money in there that we can do some things with, but, um, I think historically, um, my position over the last six years on the council has been kind of a saver. And, and, and let's see, see where, uh, see where we end up. So, um, so with that being said on discussion, um, Madam Clerk, can you please call the role?

▶ 2:34:33 Speaker 5: Yes. Councilor Jamal Ledine? Yes. Counselor Occhio? No. Counselor Hamilton?

▶ 2:34:42 Speaker 5: No. Counselor. Kara Chetty? Yes. Counselor Romanul? Yes. Counselor Stewart? No. Counselor Vandiver? Yes. Counselor Williams? Yes. President Elli? Yes. Chair Garipay? No.

▶ 2:35:05 Speaker 1: That will be recommended to the full council.

▶ 2:35:14 Mark Garipay: Uh, what am I doing here? Next up, sorry. That's okay. Uh, we're done with, uh, number two.