Frederick Mayor and Board of Aldermen Workshop: Rental Licensing Fund Implementation Plans - August 14, 2024
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Frederick Mayor and Board of Aldermen Workshop: Rental Licensing Fund Implementation Plans - August 14, 2024
The Mayor and Board of Aldermen held a workshop on August 14, 2024, to discuss the implementation plans for funds generated by the city’s residential rental licensure and affordable housing conservation ordinance. The workshop focused on draft regulations, applications, and eligibility criteria for three funds: the Tenant Protection Fund (30% of net revenue), the Rental Assistance Fund (20%), and the Affordable Housing Conservation Fund (50%). Staff from the Department of Housing and Human Services presented the materials, and board members debated the intended use of each fund, the appropriate percentages, and the potential for using the conservation fund for rental assistance. Public comment was received from Habitat for Humanity of Frederick County. No votes were taken on the fund plans; staff will revise documents based on board feedback and bring forward a future proposal.
Consent Calendar
- Approval of Minutes (July 31, 2024): Approved 3-0 (Mayor and Alderwoman Nash absent).
- Release of Sureties and Acceptance of Improvements: Seven bond/surety releases approved under one motion. Items included bonds from Wormald Development Company, River X LLC, Tauraso Food Group, and Aldi Inc. for various infrastructure projects. Approved 3-0.
- Grants: Four grants approved en bloc after discussion: (1) Governor’s Office of Crime Control and Prevention MCIN Grant with interlocal agreements with Frederick County, Brunswick, and Thurmont; (2) FY 2025 Internet Crimes Against Children grant; (3) National League of Cities Advancing Economic Mobility Rapid Grant ($20,000); (4) Maryland Community Health Resources Commission Grant for chronic disease management ($200,000). Staff noted that the two HHS grants would later require a budget amendment. Motion passed 3-0.
Workshop Discussion: HHS Implementation Plans for Rental Licensing Ordinance Funds
- Background: The rental licensing ordinance (passed August 2022) generates revenue from registration fees. After operating costs, estimated net revenue for FY24 is $555,319 and for FY25 is $561,417. Funds are split into three special funds.
- Tenant Protection Fund (30% of net revenue): Proposed use for relocation costs (moving, application fees, storage, utility connections) for tenants displaced due to enforcement of the ordinance. Eligibility criteria sparked debate. Board members questioned whether rent differentials (gap between old and new rent) should be covered; staff indicated rent gap would be handled under the Rental Assistance Fund. Language about “facing displacement as a direct result of the ordinance” was criticized as requiring tenants to make a legal judgment. Staff agreed to revise wording to be more resident-friendly and to rely on internal verification with DPW.
- Rental Assistance Fund (20% of net revenue): Proposed for rental assistance to tenants displaced due to the ordinance. Board questioned whether this fund should serve only those displaced by the ordinance or a broader group of renters in need. Alderman O’Connor stated his understanding that the fund was intended for general rental assistance, while Alderman Russell believed it should be limited to ordinance-related displacement. Staff will revisit the ordinance language and the meeting record to clarify intent. Duration of assistance (e.g., 1 month vs. 6-18 months) and partnership with non-profits (Beyond Shelter, Advocates for Homeless Families) were discussed.
- Affordable Housing Conservation Fund (50% of net revenue): Proposed uses include preservation/creation of affordable housing (new construction, rehabilitation, rental assistance). Board discussed whether rental assistance fits under this fund. Alderman O’Connor argued it should not be used for rental assistance, as the fund’s purpose is to preserve and create affordable housing stock, not subsidize rent. Alderman Russell was open to a one-time use for rental assistance if supported by the original ordinance intent. Staff suggested using MPDU funds instead, but noted legal constraints. Alderwoman Kazemchak requested clarity from the board: whether to pursue a one-time exception from the conservation fund or bring a separate proposal using MPDU funds. No consensus reached; staff will check the ordinance record and bring back options.
- Applications and Review Forms: Staff presented draft applications for all three funds, including eligibility criteria, supporting documentation, and a review sheet. Board members suggested improvements: make online fillable forms, simplify language for tenants, avoid requiring tenants to make legal determinations, and clarify how applications will be queued if funds are exhausted. Staff will refine documents.
Public Comments & Testimony
- Eric Anderson (Executive Director, Habitat for Humanity of Frederick County) : Advocated for using a portion of the Affordable Housing Conservation Fund to support home repairs for low-income homeowners (seniors, veterans, people with disabilities). Stated that their program aligns with at least four of the seven allocation factors in the ordinance. Noted that ARPA funding is expiring; the program expanded 344% (from 9 to 39 repairs) after receiving $250,000 in county ARPA funds. Asked for partnership with the city to sustain the program. No direct response from the board.
Key Outcomes
- Staff will review the ordinance record (August 2022 meeting) to confirm the correct percentage split (30/20 vs. 20/30) and the intended scope of each fund.
- Staff will revise draft regulations, applications, and review forms to simplify language, remove requirements for tenants to make legal determinations, and add rent differential as a covered expense under the Tenant Protection Fund if appropriate.
- Staff will bring back a proposal regarding use of MPDU funds for rental assistance, with legal analysis to ensure compliance with existing ordinances.
- The board expressed interest in a broader ordinance revision (e.g., adjusting inspection frequency or fund percentages) in the near future, but no timeline was set.
- No formal votes were taken on the fund implementation plans; they will return for a future meeting after staff revisions.
Meeting Transcript
Good afternoon, everyone, and welcome to the Wednesday, August 14th. Mayor and Board Workshop, and we'll begin with the Pledge of Allegiance. Pledge of allegiance. One nation. Indivisible, liberty and justice. So just logistically, the mayor and Alder Woman Nash are in Ocean City for the Maryland Association of Counties Conference. We have minutes to approve for July 31st, 2024. So move. Second. Move by Alderman Shackleford, second by Alderwoman Kazemchak. All those in favor? That's 30. We have business meeting items today. We have all items included under the business meeting are considered to be routinely by the mayor and board. Uh being heard at workshop pursuant to the rules of procedure of the board of aldermen. They'll be approved by one motion without separate discussion of each item, unless any person present requests an item or items to be removed from the agenda. Any item removed from the agenda will be considered separately. The first category release of sureties and acceptance of improvements. Move for approval. Second. Move move for approval by Alderman Shackelford, second by Alder Woman Kazanchek. All those in favor. That's three zero. And we have grants. So being that we have a meeting tomorrow evening, we're only talking about a one-day difference. I'd like to just put these to tomorrow's meeting. Do you care to make a motion? I'll get to the question. Are you talking about all the grants? Unless I mean if somebody has an answer. Okay. It's already exactly provided. That's what I was looking for. Okay. So we're good just to move forward. I I move for approval for um one, two, three, and four and grants. Well, second, I think we have I don't know if we have to. Okay, so I have a motion by Alderman Kazanchek, a second by Alderman Shackelford, and perhaps we have some staff comments. Would you like to come up, Ms. Waters, and clarify anything? I don't think that's how this works. Well, it's how it works today. I can wait or comment now, and I do have a clarifying comment for the two HHS grants. Sure. Um, Ashley Water is AJ Jess for the record. So the two HHS grants will require a budget amendment. However, we have um additional items for that budget amendment. And so because we knew we weren't gonna have enough folks here tonight, we're prepping one piece. So we'll approve the grant tonight, and then subsequently the special ordinance. Um but nothing will happen with the grant until that second piece is done.
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