The Finance/Economic Development/Regional Affairs Committee (FEDRAC) approved an additional $25,000 to local charity FUSION in order to purchase a single-family, three-bedroom house in the city.

The house can be used as “transitional housing” for homeless families in need. All of the money comes from the federal Community Development Block Grant (CDBG) program and its ancillary Community Economic Revitalization Fund (CERF) program.

FUSION (Friends United to Shelter the Indigent, Oppressed and Needy) has regularly used CDBG funds to purchase condominiums. Last October, the Federal Way City Council agreed to allocate $175,000 of the two programs’ money to FUSION for the latest housing purchase. However, changing conditions in the housing market led to this additional request, said Community Services Manager Jay Bennett.

“As we have come around the clock, and as we were fearful of…investors are starting to move back into the market, and the $175,000 might not be enough,” Bennett said. “Staff recommendation at the time was an additional $25,000.”

FEDRAC committee member and Councilmember Bob Celski wasn’t entirely pleased with this development, expressing his concerns during the July 23 meeting.

“So, I guess the contention is, there are no houses in Federal Way that could be found for $175,000 that didn’t need substantial improvements?” he asked Bennett.

“That was the information when they brought it to commission and to staff,” Bennett replied, noting that FUSION needed this additional funding to be able to respond quickly, without using its own money and reserves. “The city’s funds are for acquisitions only.”

“Would you say it’s expected or hoped for that the city would finance the entire purchase of the property?” Celski asked.

“At this point, we have a committed $175,000. I think it’s hoped for that the $200,000 would be sufficient to acquire the property,” Bennett said.

Bennett also noted that if FUSION were to find the ideal house for $225,000, it would be expected that they would cover the additional $25,000 and any rehabilitation costs.

FEDRAC committee member and Councilmember Susan Honda worried that granting this extra request to FUSION might mean more groups will spring up and ask for more funds.

“What if other groups come and say they need more money? Are we able to give other groups more money if they need more money?” she asked.

Bennett said any additional requests from any other groups would be taken on a case-by-case basis. For FUSION, the non-profit group’s directors had made it clear from the beginning they were going to need the city to fund the property purchase 100 percent.

“And if they can’t get anything at this price? They come back and ask for more?” Honda pressed.

“I don’t know if I think that’d be OK,” Bennett said. “I think I would look at what houses they’ve looked at, at that point in time. But ultimately, the commission would need to weigh in on that, and the council would need to make that decision.”

Celski expressed concerns about allocating these additional funds because CDGB CERF funds can be used toward things like small business loans. Bennett attempted to allay those concerns, saying that even with the additional $25,000 for FUSION being awarded, there will be $257,000 in CDBG funds rolling over into next year.

“I’m struggling with this one. I’m going to be honest. This is a lot of money. There may be needs for these funds for the rest of the year,” Celski said.

FEDRAC chair and Councilmember Dini Duclos indicated she was happy to see this level of discussion going on, regarding the city’s allocation of funds and resources.

“The questions were well deserved, and should be taken into consideration in the future,” she said.

The city council will act on FEDRAC’s recommendation at its Aug. 6 meeting.

About FUSION

FUSION (Friends United to Shelter the Indigent, Oppressed and Needy) operates 16 fully-furnished transitional homes in Federal Way and Northeast Tacoma, and about 80 percent of clients successfully move on to permanent housing. Each family can stay for up to 24 months as they work toward self-sufficiency.

The charity’s summer arts festival, “Razz Ma Tazz and All That Jazz,” runs 3 to 9 p.m. Aug. 7 at Dumas Bay Centre, 3200 SW Dash Point Rd. The annual outdoor event features more than 30 local artists, entertainment, silent and live auctions, and food from local caterers. All profits go toward housing for homeless families in the area. Visit fusionfederalway.org.