2018 Affordable Housing Trust Fund Spending Plan - Planning Board Endorsement: April 24, 2018 Council Approval
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2018 Planning Board Endorsement: April 24, 2018 Council Approval: BOROUGH OF HILLSDALE 2018 Affordable Housing Trust Fund Spending Plan
1) INTRODUCTION
The Borough of Hillsdale, Bergen County is in the processing of preparing a new Housing Element and Fair Share Plan in accordance
with the Municipal Land Use Law (N.J.S.A. 40:55D-1 et seq.), the Fair Housing Act (N.J.S.A. 52:27D-301) and the Settlement Agreement
executed on October 10, 2017. A development fee ordinance creating a dedicated revenue source for affordable housing was
approved by the Council on Affordable Housing (COAH) on December 10, 2007, which was subsequently adopted by the Borough
on March 4, 2008. An amended development fee ordinance was approved by COAH on March 19, 2009 and adopted by the
Borough on May 5, 2009. 1 The ordinance establishes the Borough of Hillsdale’s affordable housing trust fund for which this spending
plan is prepared.
2) REVENUES FOR CERTIFICATION PERIOD
As of December 31, 2017, the Borough of Hillsdale has collected $209,859.87 and expended $67,653.81, resulting in a balance of
$142,206.06. All development fees, payments in lieu of constructing affordable units on site, funds from the sale of units with
extinguished controls, and interest generated by the fees are deposited in a separate interest-bearing affordable housing trust fund in
Oritani Bank for the purposes of affordable housing. These funds shall be spent in accordance with N.J.A.C. 5:97-8.7-8.9, as described
in the sections that follow.
To calculate a projection of revenue anticipated during the period of third round substantive certification, the Borough of Hillsdale
considered the following:
(a) Development fees:
1. Residential and non-residential projects which have had development fees imposed upon them at the time of preliminary
or final development approvals;
2. All projects currently before the planning and zoning boards for development approvals that may apply for building
permits and certificates of occupancy; and
3. Future development that is likely to occur based on historical rates of development.
(b) Payment in lieu (PIL):
Actual and committed payments in lieu (PIL) of construction from developers as follows:
Page 1 of 10 Golden Orchard Associates (also known as Caliber Builders) received an approval to construct 31 homes
initially in 2008 and received amended approval in 2016 on Block 506, Lot 1. The approval required a payment-
in-lieu of $34,117 per unit. The resolution requires 50% of the payment when a building permit is issued and the
remaining 50% prior to the issuance of a Certificate of Occupancy. The development is currently under
construction. Two 50% payments have been received to date. The remaining payments translate to
$1,023,510.
(c) Other funding sources:
Funds from other sources, including, but not limited to, the sale of units with extinguished controls, repayment of affordable
housing program loans, rental income and proceeds from the sale of affordable units.
No funds are anticipated at this time.
(d) Projected interest:
Interest on the projected revenue in the municipal affordable housing trust fund at the current average interest rate.
The Borough of Hillsdale projects a total of $1,240,720.35 in revenue to be collected between January 1, 2018 and December 31,
2025. This projected amount, when added to the Borough of Hillsdale’s trust fund balance as of December 31, 2017, results in an
anticipated total revenue of $1,382,926.41 available to fund and administer its affordable housing plan. All interest earned on the
account shall be used only for the purposes of affordable housing. See the table on the following page.
Page 2 of 10Projected Revenues – Affordable Housing Trust Fund
Source of Funds 2018 2019 2020 2021 2022 2023 2024 2025 Total
(a) Development fees:
Approv ed Dev elopment $35,250 $0 $0 $0 $0 $0 $21,150 $28,200 $84,600
Dev elopment Pending
$0
Approv al
Projected Dev elopment:
$7,050 $21,150 $14,100 $0 $14,100 $21,150 $14,100 $21,150 $112,800
Residential
Projected Dev elopment:
$5,000 $5,000 $10,000
Non-Residential
(b) Payments in Lieu of
$0
Construction
Golden Orchard Assoc. $102,351 $307,053 $307,053 $307,053 $1,023,510
(c) Other Funds $0
(d) Interest $1,153 $2,616 $2,560 $2,487 $112 $169 $281 $433 $9,810
Total $145,804 $330,819 $323,713 $314,540 $14,212 $21,319 $35,531 $54,783 $1,240,720.35
* For purposes of projecting rev enues, we hav e utilized historic residential Certification of Occupancy data and projected forward.
Projections assume the estimated v alue of a new home is $470,000. The v alue is then multiplied by 1.5%.
3) ADMINISTRATIVE MECHANISM TO COLLECT AND DISTRIBUTE FUNDS
The following procedural sequence for the collection and distribution of development fee revenues shall be followed by the Borough
of Hillsdale:
(a) Collection of development fee revenues:
Collection of development fee revenues shall be consistent with the Borough of Hillsdale’s development fee ordinance for
both residential and non-residential developments in accordance with COAH’s rules and P.L.2008, c.46, sections 8 (C. 52:27D-
329.2) and 32-38 (C. 40:55D-8.1 through 8.7) and with the executed Settlement Agreement.
Page 3 of 10(b) Distribution of development fee revenues:
The Administration forwards a resolution to the governing body recommending the expenditure of development fee revenues
as set forth in this spending plan. The governing body reviews the request for consistency with the spending plan and adopts
the recommendation by resolution. The release of the funds requires the adoption of the governing body resolution in
accordance with the Court-approved spending plan. Once a request is approved by resolution, the Chief Financial Officer
releases the requested revenue from the trust fund for the specific use approved in the governing body’s resolution.
4) DESCRIPTION OF ANTICIPATED USE OF AFFORDABLE HOUSING FUNDS
(a) Rehabilitation and new construction programs and projects
Rehabilitation program: A minimum of $80,000 and a maximum of up to $173,600. The Borough of Hillsdale will
dedicate a minimum of $80,000 and a maximum of up to $173,600 towards the rehabilitation of eight homes.
New construction project(s): Up to $745,000. The Borough will dedicate up to $745,000 for alternative living
arrangements as well as hard/soft costs for the Habitat for Humanity House as described in Section (b) and (c) below.
(b) Municipally-Sponsored & 100% Affordable (N.J.A.C 5:97-6.7)
The Borough will dedicate up to $75,000 (depending on development fees collected) to assist habitat for Humanity
with hard and soft costs related to developing one single-family home within the Borough.
(c) Alternative Living Arrangement (N.J.A.C. 5:93-5.8)
The Borough will dedicate up to $670,000 (depending on development fees collected) to assist a group home provider
looking to locate within Hillsdale. 2 If the opportunity arises, the Borough is amenable to assisting with the development
of a veterans facility that would be available to veterans and their families. 3 The Borough would structure the program
to offer $10,000 to $20,000 per creditable bedroom and to offer $20,000 to $35,000 per creditable unit. This money
would allow a group home provider to make the necessary structural changes to accommodate residents in an
existing residence. In the case of a veteran’s facility it would assist with the financing for construction of the
apartments. This is not a mechanism within the HEFSP, but the Borough would like to capitalize upon the opportunity to
generate affordable housing due to its limited remaining vacant and developable land.
Page 4 of 10(d) Capital Repairs (N.J.A.C. 5:97-8.9)
The Borough will dedicate up to $60,000 (depending on development fees collected) to be utilized for capital repairs,
such as but not limited to systems, structural and appliance repair or replacement for for-sale units because there is
typically not enough equity in the unit for the homeowner to undertake such expensive projects. Additionally, this
proactive program will maintain for-sale affordable units in good condition.
(e) Affordability Assistance (N.J.A.C. 5:93-8.16)
Municipalities are required to spend a minimum of 30% of development fee revenue to render existing affordable units more
affordable and one-third of that amount must be dedicated to very low-income households (i.e. households earning less than
30% of the regional median income). The actual affordability assistance minimums are calculated on an ongoing basis in the
CTM system based on actual revenues. 4
According to the chart below, the Borough of Hillsdale is required to dedicate $105,583.57 from the affordable housing trust
fund to render units more affordable, including $35,194.52 to render units more affordable to households earning 30% or less of
median income by region, as follows:
Rental Assistance – Hillsdale will set aside a minimum of $16,000 for rental assistance. 5 Rental assistance will be
provided on a first-come, first-served basis to income-eligible renters with good credit standing who qualify for an
affordable unit. Said assistance shall be in the form of a grant.
Water Heater Replacement - Hillsdale will set aside a minimum of $10,000 to replace water heaters in existing units that
are more than eight years old. 6 New water heaters are more energy efficient and will reduce the affordable
households’ utility expenses. Assistance will be provided on a first-come, first-served basis to existing income-eligible
affordable households with good credit standing. Said assistance shall be in the form of a grant.
o The Borough will target the existing very-low income developments (New Concepts and Spectrum) to ensure
compliance with the requirement to spend one-third of the affordability assistance on very-low income units.
Furnace Replacement - Hillsdale will set aside a minimum of $50,000 to replace furnaces in existing units that are more
than 15 years old. 7 New furnaces are more energy efficient and will reduce the affordable households’ utility
expenses. Assistance will be provided on a first-come, first-served basis to existing income-eligible affordable
households with good credit standing. Said assistance shall be in the form of a grant.
o The Borough will target the existing very-low income developments (New Concepts and Spectrum) to ensure
compliance with the requirement to spend one-third of the affordability assistance on very-low income units.
Page 5 of 10 Air Conditioner Replacement - Hillsdale will set aside a minimum of $50,000 to replace air conditioners in existing units
that are more than 15 years old. 8 New air conditioners are more energy efficient and will reduce the affordable
households’ utility expenses. Assistance will be provided on a first-come, first-served basis to existing income-eligible
affordable households with good credit standing.
o The Borough will target the existing very-low income developments (New Concepts and Spectrum) to ensure
compliance with the requirement to spend one-third of the affordability assistance on very-low income units.
Green building strategies - Hillsdale will set aside a minimum of $50,000 to fund one or more solar panel installations on
100% affordable developments. 9 There are six existing 100% affordable facilities. Solar panels would reduce the
building’s utility expenses and make it more affordable for residents living within the structure. Assistance will be
provided on a first-come, first-serve basis to the existing 100% affordable facilities.
o The Borough will target the existing very-low income developments (New Concepts and Spectrum) to ensure
compliance with the requirement to spend one-third of the affordability assistance on very-low income units.
AFFORDABILITY ASSISTANCE CALCULATION
Actual dev elopment fees through 12/31/2017 $ 141,933.20
Actual interest earned through 12/31/2017 + $ 2,801.67
Dev elopment fees projected 2018-2025 + $ 197,400.00
Interest projected 2018-2025 + $ 9,810.35
Less housing activ ity expenditures through
- $ -
12/31/2017
Total = $ 351,945.22
Calculate 30 percent x .30 = $ 105,583.57
Less Affordability assistance expenditures through
- $ -
12/31/2017
Projected Minimum Affordability Assistance
= $ 105,583.57
Requirement 1/1/2018 through 12/31/2025
Projected Minimum Very Low-Income Affordability
Assistance Requirement 1/1/2018 through ÷3 = $ 35,194.52
12/31/2025
Page 6 of 10(f) Administrative Expenses (N.J.A.C. 5:93-8.16)
Municipalities are permitted to use affordable housing trust fund revenue for related administrative costs up to a 20% limitation
pending funding availability after programmatic and affordability assistance expenditures. The actual administrative expense
maximum is calculated on an ongoing basis in the CTM system based on actual revenues. 10
ADMINISTRATIVE EXPENSE CALCULATION
Actual dev fees and interest thru 12/31/2017 $ 144,734.87
Projected dev fees and interest 2018 thru 2025 + $ 1,240,720.35
Payments-in-lieu of construction and other deposits
+ $ 65,125.00
thru 12/31/2017
Less RCA expenditures thru 12/31/2017 - $ -
Total = $ 1,450,580.22
Calculate 20 percent x .20 = $ 290,116.04
Less admin expenditures thru 12/31/2017 - $ 67,653.81
Projected Maximum available for administrative
= $ 222,462.23
expenses 1/1/2018 thru 12/31/2025
The Borough of Hillsdale projects that $222,462.23 will be available from the affordable housing trust fund to be used for
administrative purposes. Projected administrative expenditures, subject to the 20% cap, are as follows:
Borough Attorney, Engineer and Planner fees related to obtaining substantive certification as well as consulting fees
related to the administration and implementation of the Borough’s affordable housing program(s).
Salaries and benefits for municipal employees for administration and implementation of the housing plan and
program(s).
Municipal Housing Liaison and Administrative Agent training and on-going continuing education.
Completion of the annual trust fund and affordable housing activity monitoring as detailed in the Settlement
Agreement.
Page 7 of 10 Completion of the very-low income monitoring every three years as detailed in the Settlement Agreement.
Completion of the mid-point realistic opportunity review due on July 1, 2020 as detailed in the Settlement Agreement.
5) EXPENDITURE SCHEDULE
The Borough of Hillsdale intends to use affordable housing trust fund revenues for the creation and/or rehabilitation of housing units. It
should be noted that the amount spent in a given year for any line item may actually span multiple years in reality. The chart below
provides an estimated timeline for expenditure and does not restrict the Borough from spending the money sooner or later in the Third
Round period.
Number of
Projected Expenditure Schedule 2018 -2025
Projects/Programs Units
Projected 2018 2019 2020 2021 2022 2023 2024 2025 Total
Rehabilitation 8 $43,400 $43,400 $43,400 $21,700 $21,700 $173,600
Hard/Soft Costs for Habitat for
1 $75,000 $75,000
Humanity
Capital Repairs TBD $20,000 $20,000 $20,000 $60,000
Alternativ e Liv ing
TBD $135,000 $135,000 $135,000 $135,000 $130,000 $670,000
Arrangements
Affordability Assistance
Rental Assistance 8 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $16,000.00
Hot W ater Replacement 10 $2,000 $2,000 $2,000 $2,000 $2,000 $10,000.00
Furnance Replacement 5 $10,000 $10,000 $10,000 $10,000 $10,000 $50,000.00
Air Conditioner Replacement 5 $10,000 $10,000 $10,000 $10,000 $10,000 $50,000.00
Green Building Strategies $25,000 $25,000 $50,000.00
Rehab Administration $6,600 $6,600 $6,600 $3,300 $3,300
$218,326.41
Administration $3,100 $25,000 $30,000 $30,000 $33,826 $35,000 $35,000
Total $24,000 $177,100 $124,000 $239,000 $214,000 $215,826 $192,000 $187,000 $1,372,926.41
Page 8 of 106) EXCESS OR SHORTFALL OF FUNDS
In the event of any expected or unexpected shortfall where the anticipated revenues are not sufficient to implement the plan, the
Borough of Hillsdale will adopt a resolution of intent to bond. However, it should be noted that the only mechanism in the Housing
Element and Fair Share Plan that requires trust fund monies is the Rehabilitation Program.
In the event more funds than anticipated are collected or projected funds exceed the amount necessary to implement the Fair
Share Plan, the Borough of Hillsdale will reserve funds for affordable housing projects to meet a future affordable housing obligation.
7) BARRIER FREE ESCROW
Collection and distribution of barrier free funds shall be consistent with the Borough of Hillsdale’s Affordable Housing Ordinance, in
accordance with N.J.A.C. 5:97-8.
8) SUMMARY
The Borough of Hillsdale intends to spend affordable housing trust fund revenues pursuant to N.J.A.C. 5:97-8.7 through 8.9 and
consistent with the housing programs outlined in the Housing Plan Element and Fair Share Plan dated __________, 2018.
The Borough of Hillsdale has a balance of $142,206.06 as of December 31, 2017 and anticipates an additional $1,230,720.35 in
revenues through 2025 for a total of $1,372,926.41. To date, the Borough has expended a total of $67,653.81. This Spending Plan
demonstrates the Borough’s commitment to expend $1,230,720.35 through December 31, 2025, including a commitment to expend
with respect to the following:
Commitment to expend up to up to $173,600 towards a rehabilitation program;
Commitment to expend up to $75,000 towards hard/soft costs for Habitat for Humanity;
Commitment to expend up to $60,000 towards capital repairs;
Commitment to expend up to $670,000 towards the creation of new alternative living arrangements;
Commitment to expend a minimum of $176,000 towards affordability assistance; and
Commitment to expend up to $218,326.41 towards administrative costs.
See the table on the following page for the spending plan summary.
Page 9 of 10SPENDING PLAN SUMMARY
Balance as of December 31, 2017 $142,206.06
Projected Revenue 2018-2025
Dev elopment fees + $197,400.00
Payments in lieu of construction + $1,023,510.00
Other funds + $0.00
Interest + $9,810.35
TOTAL REVENUE = $1,372,926.41
Projected Expenditures 2018-2025
Funds used for Rehabilitation - $173,600.00
Funds used for Projects
1. Hard/Soft Costs for Habitat for Humanity - $75,000.00
2. Capital Repairs - $60,000.00
3. Alternativ e Liv ing Arrangements - $670,000.00
Affordability Assistance - $176,000.00
Administration - $218,326.41
Total Projected Expenditures = $1,372,926.41
Remaining Balance = $0.00
R:\Projects\HDB\HDB-006A\Reports\Implementing Documents\180425dag_HDB_ Draft_Spending_Plan.docx
1 Data from Borough CTM website.
2
This amount assumes the trust fund receives $440,000 as illustrated by the chart on page 3. If the Borough collects less than projected, this amount may be reduced, as seen fit by the Council.
3 This would be creditable as a 100% affordable development.
4 This assumes that COAH will give the Borough’s Municipal Housing Liaison access to the CTM system.
5 This “minimum” assumes the trust fund receives $1.2 million as illustrated by the chart on page 3. If the Borough collects less than projected, this “minimum” may be reduced, as seen fit by the
Council.
6
Ibid.
7 Ibid.
8 Ibid.
9
Ibid.
10 This assumes that COAH will give the Borough’s Municipal Housing Liaison access to the CTM system.
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