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3.1 HR MIN 07-08-2013 DRAFT WORKSHOP MEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY,JULY 8, 2013 Members Present: Chair Wilson,Commissioners Chuba,Kuester,Motin,and Toth Members Absent: None Staff Present: Director of Economic Development Brian Beeman Assistant Director of Economic Development Clay Wilfahrt 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River Housing and Redevelopment Authority was called to order at 5:30 p.m. by Chair Wilson. 2. Consider Agenda MOVED BY COMMISSIONER KUESTER AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE JULY 8,2013 AGENDA. MOTION CARRIED 5-0. 3. Hear Presentation by CMHP Brian Beeman introduced Jason Krebsbach,Community Development Director for Central Minnesota Housing Partnership. Mr. Krebsbach explained that CMHP was incorporated in 1993 and serves a 16-county region,north to Cass County and south to Wright County. He stated that CMHP has levied$262 million since 1994 to address affordable housing issues. Mr. Krebsbach discussed CMHP's five areas of service: 1) Technical assistance—assessing needs,grant writing,administration of programs 2) Multi-family housing 3) Single Family Housing 4) Homebuyer education and counseling 5) Homeless concerns Mr. Krebsbach noted that since 1994,CMPH has levied$262 million to address affordable housing issues in this region. He discussed details regarding each of the areas of service CMHP provides. Mr. Krebsbach suggested a starting budget of$25,000 for Small Cities Development. 0 4. Hear Presentation by Tri-Cap Brian introduced Dan Roberts,Community Development Director for Tri-Cap (Tri-County Action Program). Mr.Roberts stated that he has worked with Tri-Cap for 11 years. He noted that Tri-Cap is federally designated community action plan serving Benton,Stearns,Sherburne Counties and was incorporated in 1965. Mr.Roberts discussed Tri-Cap's various programs as follows: 1) Energy Programs—Energy assistance programs,including payments to energy supplier, education in energy efficiency and safety,advocate between energy suppliers and human services, crisis help for disconnections or fuel deliveries,and emergency heating system repair or replacement;Reach of for Warmth program and Weatherization Program. 2) Self Sufficiency/Counseling Services—Includes Family Assets for Independence in Minnesota, Family Self-Sufficiency,Food Support Program,Financial Fitness Program,Displaced Homemaker (Wings),Soar(SSI and SSDI outreach,access and recovery,and free tax clinics. 3) Housing Programs—Family Homeless Prevention and Assistance Program(FHPAP),Renting 101,Home Repair Loan Program,and lead testing services. 4) Home Ownership Program—FAIM program (savings program for low-income working adults to save for higher education,home purchase or start a small business),homes for sale,MURL (homes sold at no profit,contract for deed with no interest). 5) Transportation—assistance with public transportation (not available in Sherburne County). Mr.Roberts noted that Tri-Cap weatherizes approximately 150 home per year. They also received funding through the State of MN and utility providers,including Stearns Electric,CenterPoint Energy,Elk River Municipal Utilities,etc. They provide energy audits (income qualified) to determine where energy losses are, finding the best way to reduce energy loss,health/safety issues, furnace and water heater repair/replacement,carbon monoxide detectors,testing of furnaces. He noted that the program requires SIR(Savings in Investment Return). Mr.Roberts discussed the homeownership program,which assists buyers that may not qualify for traditional loans in purchasing homes. He stated they provide lead testing services by two licensed lead risk assessment assessors on staff. Mr.Roberts stated that Tri-Cap is very good at administering programs/projects and they can do all in-house. . Mr.Roberts explained that Tri-Cap doesn't ask for up-front fee for grant applications. He stated they are willing to put together a grant application for no cost,if the HRA will allow them to administer it. He noted that Tri-Cap is a non-profit and fees will be for covering their costs only. He stated they are more interested in meeting their mission. Mr.Roberts stated that Tri-Cap has their own funds from their activities and has built up a reserve. He explained that the administrative fee is generally built into the proposal the city would submit to the (under. Commissioner Toth asked if there is formula for their fee to administer a program. Mr. Roberts explained that generally for Small Cities funding,the administrative fee would be 15 percent. He stated that leverage funds could include Tri-cap weatherization services. Applicants for the Small Cities funding would apply for energy assistance as part of their application,and if an applicant was income-qualified,Tri-cap could contribute weatherization services. He noted that qualifying homes cannot have had weatherization done since 1994. They would also encourage applicants to apply for lead testing services. Commissioner Toth asked if the properties can be rental as well as owner-occupied. Mr.Roberts stated that Tri-Cap works with Small Cities on owner occupied/rental and commercial properties. Mr.Roberts explained details of the MFHP Home Repair Program. If a home-owner qualifies,an inspection is done to determine deficiencies,including lead and radon testing,and they can loan up to$27,000 to correct inefficiencies. The applicant signs a 15-year note/mortgage,and as long as they live in home 15 years (stick built homes only),the loan is forgiven at the end of 15 years. This could be a problem if the property owner sells or is no longer living there before the 15-year period,as they would have to pay back the principal with no interest. Mobile homes are different;the term is 10 years. Stipulations include a majority of ownership,the taxes current,and the property is covered by a mortgage. Mobile homes are required to be in a park or on a parcel of land owned by the applicant. Mr. Beeman asked what amount Mr.Roberts would recommend for leverage funds,and the timeline for a funding application. Mr.Roberts stated that regarding the timeline, the pre-application is normally due in the fall(October/November). If DEED likes the proposal,the HRA would be invited back to do a full application,and would be notified in May or June whether or not the project was funded. $400,000- $500,000 is the most that can be applied for,and could be a combination of owner-occupied,rental and commercial.As for leverage funds,he recommend 10—20 percent of project cost in leverage funding dollars. He stated that the more leverage funds the HRA or city has available,the better chance for funding. Discussion followed regarding the initial steps to determine an area in need, for a possible funding application. Commissioner Wilson stated that they would need to send out survey to see if there is a need,and if not,find something else to do. Mr.Roberts stated that Small Cities funding is very competitive. Often a community will not get funded the first time,unless there is a great need. Chair Wilson asked how they would decide who gets funding. Mr.Roberts stated that funds are on a first-come-first-served basis. This is local decision,not Tri-Cap decision. He stated as an example,if 20 homes are in need of rehab in area of 80-100 homes, they would likely get funded. He stated that conditions are attached to the funding and the I-RA would need to create set of guidelines that spells out how to identify which applicants eligible. Mr.Roberts stated that Tri-Cap recommends a homeowner get 2-3 bids. The HRA could have a requirement that the homeowner go with the low bid. If they homeowner objected to the low bid, they could pay the difference themselves. Also,if homeowner would like additional work done,Tri- Cap asks that the contract finish the project work first and come back later to work directly with homeowner. Sometimes contractors ask for partial payment,and Tri-Cap will do that but they will hold back something to ensure that the work is completed. Mr.Roberts stated that some communities may decide to do tier system. In a very low income area, 100% of the work could be covered by the grant;and in a moderate income area,maybe 50%is paid by the grant and the rest is a low or zero interest loan with the homeowner. Options also include having a 10 year repayment period, 10%proration per year,or first 5 years have 100 payback. He explained that there are different ways to do the formula. This is a very valuable consideration when applying for funding. He stated that homeowners do sell their homes. If homeowner receives grant and only live for 6 months and decides to sell,they have profited/benefited from grant funds. Local community will put in deed restriction with payback terms. These funds could be recycled back for other projects. In commercial situations, funding could be structured with 1/3 the applicant's own resources; 1/3 a grant at 1%,interest;and 1/3 would be an outright grant. He stated there are many different variables and considerations. The city officials need to decide what is best fit for community. 5. Discuss and Determine which Housing Agency best fits the City's housing needs based on the HRA's Housing Goals The HRA discussed the following topics regarding CMHP and Trip-Cap's presentations: • Administration costs • Variety of services and programs offered • HRA's desire to focus on residential owner/occupied • Offering"tiered"programs,requiring some owner"buy-in"or investment,at some levels Commissioner Motin stated he would like more information on the Coon Rapids program. A decision on selection a housing agency to assist the HRA will be determined at the next regular HRA meeting. 6. Adjournment There being no other business,Chair Wilson adjourned the meeting. The meeting of the Elk River Housing and Redevelopment Authority adjourned at 8:24 p.m. Tina Allard City Clerk Stewart Wilson Chair,Housing and Redevelopment Authority