4. HRSR 08-26-2013 '.>1* .
Ari
EIk REQUEST FOR ACTION
River
TO ITEM NUMBER
Housing and Redevelopment Authority 4.
AGENDA SECTION MEETING DATE PREPARED BY
August 26, 2013 Brian Beeman, Director of Economic
Development
ITEM DESCRIPTION REVIEWED By
Discuss Small Cities Development Program grant structure and Jeremy Barnhart,Deputy Director,
guidelines. Community Operations and
Development Director
REVIEWED BY
ACTION REQUESTED
Information presented for discussion only.
BACKGROUND/DISCUSSION
At the HRA's August 5,2013 meeting, the Housing and Redevelopment Authority approved the hiring of
Central Minnesota Housing Partnership (CMHP) to apply for and administer the Small Cities
Development Program (SCDP) grant.The SCDP will provide the financial resources and structure to
rehabilitate housing in Elk River. In applying for the SCDP for 2014, CMHP intends to begin the grant
writing process in August to meet the pre-application deadline of November 14, 2013. As part of that
pre-application, the structure of the program should be identified.
CMHP will be present to explain the grant process, typical structure, and guidelines of the grant and an
explanation of what has been and what has not been successful in the other communities that they have
worked with. Many of the requirements are mandated by the state;however, CMHP has indicated that
some of the grant guidelines can be altered.
Previously, the HRA has stated their goals for the program should:
• Be similar to Coon Rapids'housing rehabilitation program.
• Be tiered whereby the homeowners would pay a percentage or amount of the rehabilitation
project before the remaining amount of their project is awarded.
• Include three tiers based upon income levels or a set percentage of the project.
At the August 5, 2013 meeting, the HRA had several questions about how the SCDP should and could be
structured. The responses to those questions are attached.
Timing/next steps. With agreement on the terms, structure,and guidelines of the SCDP grant, and
payment of the application fee, CMHP will start the pre-application process and regularly report back to
the HRA throughout the grant writing process. If the City is successful in the pre-application, CMHP will
write the full application for the SCDP program which,is due February 27, 2014.The City of Elk River
will be notified if the funding for the grant has been awarded to the City in June 2014.
r1MERE1 1 'I
NATURE
Attachments
• Preliminary Questions and Answers Sheet from CMHP
Hello Brian:
Deanna filled me in on your phone conversation;first off I'd like to say that we are excited to be working
with the city of Elk River! Deanna provided me with a list of questions you had. I have answered them
below as best I can right now.There are many questions that address things that are negotiable and can
be discussed in further detail as we structure the SCDP and other potential rehab programs.
1. The fee for CMHP was$350. When does that get paid?A)This is the preliminary Proposal
preparation &submission fee. It will be due before CMHP performs windshield surveys.
2. How much leverage funds should they set aside in the 2014 budget for the SCDP application?A)
This is a number that must be decided by the HRA. It will depend on the number of projects we
apply for and what the HRA wants to designate the funds for. Is it to cover owner match
requirements,will it only be available for specific rehab items, how much per project, etc.
3. Can they set up the project to be flexible like Coon Rapids did?A)The project can be flexible
within the guidelines of SCDP (eligibility requirements, income limits,target area,other
program/construction requirements). Coon Rapids has four different rehab programs, all with
different requirements and eligibility. For example, some do not have income limits. If the HRA
wanted to provide a program like this it would have to be separate and not part of SCDP.
4. They want something that is flexible for contractors,architects and developers.A) Don't know
exactly how to answer this questions. First off, with SCDP we never work with architects or
developers.General contractors must be licensed and insured in the state of Minnesota, and
must not be on the Federal Debarment list.They must also be a certified lead paint supervisor in
order to bid on projects with lead paint hazards. We would need to discuss in more detail to
determine if city/HRA is looking for additional rehab programs other than SCDP.
5. What is the schedule for applying for funding?A) Preliminary proposals are due November 14th,
2013. DEED sends letters in December to applicants ranking their proposals as follows: not
competitive, marginally competitive or fully competitive. Based on ranking,full applications are
due February 27, 2014. Funding awards are announced in June.
6. How is the funding structured?A) SCDP funding for homeowners is structured as a 0%, deferred
forgivable loan.Typical loan term is 7 years. Loan balance is forgiven 1/7tH per year.
7. What would be the city/HRA's participation in the program?A)Typical city participation is
CMHP staff working with the city administrator to conduct draws to DEED for payments.
Additional participation may include help with marketing, etc. Overall participation is minimal as
CMHP handles all aspects of program administration.
8. Are there public hearings and when will those be?A)The Preliminary Proposal does not require
a public hearing.The full application requires a city resolution and a public hearing.These would
not take place until it was decided to move forward with a full application.They typically take
place in January or early February.
9. When will you do a windshield survey and when can the HRA see the results?A)The windshield
survey will be completed after a discussion with the city/HRA to determine what areas of the
city should be targeted.This will probably be done sometime in September and CMHP can share
results as soon as they are compiled.
10. What area will you be targeting?A)This is negotiable with the city/HRA.We would like to hear
some initial areas of interest from the city/HRA for the windshield surveys. We have already
discussed some areas so we would survey those.After the windshield survey is completed,the
targeted area(s) can become more focused based on results. Note: target areas can be revised
from preliminary proposal to full application with documented reason(s).
11. They would like a tiered a and within the approach they want the owners to have some
money vested in the project. A) Owners match can be done in a variety of ways.We can discuss
in more detail to determine how this should be structured. Note: low& moderate income
households have minimal disposable income/savings.While owner investment is important,we
want to make sure we are still serving the households that need it most,and the homes that
need rehab the most.
I will be on vacation next week, returning on August 19th If you would like us to attend the HRA meeting
on the 26th please let me know.Seth Kauffman is our Program Manager for SCDP so he will be involved
in meetings and discussions as well.
Again, we look forward to work with you.
Thank you,
Jason badi
Community Development Director
Central Minnesota Housing Partnership, Inc.
37 28th Ave. North Suite#102
St. Cloud, MN 56303
Phone: (320) 258-0672 (new direct number)
Fax: (320) 259-9590
iayon@cmohp.net
www.cmhp.net