Salt Lake City Council overrides Mayor Jackie Biskupski’s veto on the city’s housing trust fund but restores some funding for the homeless

(Rick Egan | Tribune file photo) In this April 23, 2019, file photo, Salt Lake City Council members Erin Mendenhall, right, and Chris Wharton, left, along with colleagues listen during a public comment portion of a council meeting.

The Salt Lake City Council voted swiftly Friday to override most of Mayor Jackie Biskupski’s first-ever vetoes, effectively leaving in place the council’s decision to move control of a $2.59 million loan fund for affordable housing to a different arm of city government.

With a 7-0 vote and no discussion, the council upheld its decision to transfer the city’s Housing Loan Trust fund away from the purview of the Housing and Neighborhood Development Division, or HAND, to the city’s Redevelopment Agency, which the City Council believes is more transparent.

But council members conceded to pleas from the Biskupski administration and freed up money for one crucial spending item among nearly $1.9 million for several housing pilot programs it had put on hold. That vote, also unanimous, released $125,000 for New House 20, a program run by The Road Home for the city’s heaviest users of emergency services.

Council members said they had been apprised that The Road Home program risked running out of money for existing clients by Sunday without the infusion.

“That was never the intent of the council,” Council Chairman Charlie Luke said, adding that the council’s ultimate intent in its changes to the budget proposed by the mayor in May had been “to create a more transparent and streamlined process.”

But council members overrode Biskupski line-item vetoes on a handful of other HAND spending items to expand existing homeless pilot programs — including ones for rental assistance, eviction prevention, services for residents with mental illness and for students facing homelessness, and down-payment stipends for teachers, police and other vital workers.

Those budget items, part of the city’s $331 million spending plan for 2019-2020, will remain sidetracked in a holding account, Luke said, pending a study of them in the coming weeks. He said he hoped the council and the mayor could work together in reviewing those programs, many of which the council members have said they support.

Biskupski was attending an annual U.S. Conference of Mayors meeting in Honolulu on Friday and was not immediately available for comment.

The mayor’s spokesman Matthew Rojas said the administration welcomed the council’s compromise on New House 20 funding. The council gave the program $125,000 for ongoing operations and kept another $125,000 — earmarked to expand New House 20 clientele — in a holding account.

But Rojas said Biskupski’s concerns persist over changes to the Housing Trust Fund, which, under HAND’s guidance, has successfully helped finance construction of 992 affordable housing units and preservation of 303 additional dwellings in Salt Lake City over the past three years.

Although the RDA maintains its own robust system of lending to developers, the mayor, who is not seeking a second term, had said shifting the trust fund threatened to slow down the city’s efforts to address an ongoing shortage of affordable housing in Utah’s capital city.

In her veto message, the mayor called the decision “last minute” and said it amounted to a significant shift in city policy “without appropriate public input.”

“The mayor continues to have deep reservations about changes to the successful model we’ve developed for affordable housing in the city,” Rojas said Friday. “We’re not sure how that’s going to work going forward.”

Moves with the city’s Housing Trust Fund have also been closely watched by some of Utah’s developers and low-income and housing advocates. The fund is a crucial tool in the city’s campaign to ease the housing squeeze, used to bridge gaps in financing for developers building affordable dwellings, particularly ones for the city’s poorest residents.

“Our streamlining effort reduces confusion and redundancy in a growing housing program that has been spread over two city agencies,” Luke said in a statement after the vote. “With our changes, no program is slowed down.”

“We all share the goal of increasing the supply of affordable housing,” Luke said.

In an open letter released Friday, Luke and Councilwoman Amy Fowler, who chairs the city’s RDA board, sought to reassure housing advocates that the budget steps would “eliminate duplication and uncertainty in the city’s current building and financing process.”

The letter touted the city’s spending of $34 million on affordable housing in recent years, saying it was among the largest outlays for that purpose in state history.

The city was creating a “one-stop” process for developers, the letter said, helping them to access the city’s full set of affordable housing incentives, including loans and land write-downs, at the same time to save money and time.

Beyond that change, Luke and Fowler said, “most other aspects of the city’s approach to affordable housing will remain the same.”

While on paper the City Council exercises equal degrees of control over budget matters at HAND and the RDA, members of the council also serve as members of the RDA board. Several council members have said they view RDA’s process for lending as more open.

The city department that encompasses HAND, meanwhile, has seen recent departures from its top administrative ranks, including the post of division director over HAND.

In their open letter, Luke and Fowler said putting the fund with the RDA would improve oversight of the money by allowing the public to have input at RDA hearings on each project the city considers for financing. The letter said the City Council would continue to be guided by “clear accounting and transparent decision-making” in its funding of new housing.

“For taxpayers, consumers and the business community, we believe this change in our housing loan process is best in the long run,” Fowler said in a statement.

In budget discussions completed last week, the council said moving the trust fund to the RDA was done on a yearlong trial basis, with potential to split it into two funds, one for housing programing, run by HAND, and another for housing development, operated by the RDA.

Biskupski had warned that because of the council’s move, the trust fund was in jeopardy of being drained once financing for a senior housing project, known as Lincoln Towers, was completed. Council members have said they do not expect any interruption to replenishing the fund, which draws on cash generated by the RDA.

Unrelated to housing, the council opted to let stand another of Biskupski’s vetoes — the first ones she has issued while in office. That dealt with a council decision to change how the city budgets for a handful of memberships in civic groups held by city employees.

Biskupski had contended the City Council’s decision to move the spending item to an account more directly under its control violated the separation of powers between the mayor and the council, a view that Rojas said had been backed up by the city’s lawyers.