Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
7.2. HRSR 03-24-2003
Item # 7 . 2 . • Elk River MEMORANDUM TO: Housing & Redevelopment Authority FROM: Catherine Mehelich, Director of Economic Development 0,7 Heidi Hall, Economic Development Assistant 1-41— Michele McPherson, Director of Planning i DATE: March 24, 2003 SUBJECT: Housing Work Plan Recommendation Attachments • Structure &Powers of HRAs, 2000 Handbook for MN Cities,League of MN Cities • 2003 Housing Work Plan Schedule • Background Last November, the HRA requested that staff schedule a presentation by the MN Housing Finance Agency (MHFA). Staff was able to schedule the presentation to be held during the April HRA meeting. The presentation will focus on the different types of financing tools available for housing projects within the City of Elk River. Issue To build on the MHFA presentation, staff has developed a housing work plan to gather information and examples of housing programs and partnership possibilities. Concurrently, Planning staff will be preparing a detailed housing analysis of Elk River's housing stock utilizing GIS data and windshield surveys. The housing work plan corresponds with the completion of the Comprehensive Plan and the Planning Department's housing stock inventory/analysis. Both documents will be used to determine the housing needs of Elk River. The work plan will culminate with staff recommendations for Elk River housing programs based on Elk River's needs. Recommendation Staff recommends that the HRA consider approving the housing plan work schedule. • • CHAPTER 17 Minn. .t.§ 116J.994,subd.3. Once the criteria are established,the grantor and the recipi- ust enter into subsidy agreements that meet the statutory require•• ts. The agreement must include an obligation to repay part -. all of the subsidy if the recipient does not meet its obligations. Minn.Stat.§116J.993,sub. • Types of assistance meeting the definitio- . a business subsidy include ants, contributions of real or perso.• property or infrastructure;the p '.cipal amount of a loan at rate .elow those commercially available to the r- .ient; any reduction o ferral of any tax or any fee; any guarantee of any pa. 'sent under an .an, lease or other obligation; or any preferential use of govern -nt fac' ies given to a business. Minn.Stat.§ 116J.993,subd 3. There are severa '.-.tions this definition, including a business subsidy of less than$25 '/0, and s• idies for redevelopment,pollution control and land clea ..,housing,indu '.1 revenue bonds and other similar programs. Minn.Stat.§116J.994,subds 7 Rec.• -nts must provide grantors w 'nformation on their progress toward and 8. t• goals outlined in the agreement. Gra , s must submit the annual innesota Business Assistance Form(MBA' s the Dept. of Tourism and Economic Development(DTED)for each busines bsidy agreement. Local government agencies in cities with a population • ,5000 or more must submit an MBAF regardless of whether they have aw• •-d business subsidies. Local government agencies in cities with a population . 2,500 or less are exempt from filing the MBAF if they have not awarded a su: '. in the past five years. II. Structures A. Housing and redevelopment authorities The predominant method of delivering and administering housing and redevelopment programs in Minnesota is through a legal public agency, accountable to city government.A city may establish this public agency, which is often the housing and redevelopment authority(HRA). There are over 230 HRAs in Minnesota. 1. Elements of an HRA Minn.Stat.§§469.001 to An HRA is a public corporation with power to undertake certain types of 469'047' housing and redevelopment or renewal activities. While state legislation "creates"a housing and redevelopment authority in each city, it is up to the city council to formally establish an HRA before it can do business and use Minn.Stat.§469.003. its powers. Once a council legally establishes an HRA,it may undertake certain types of planning and community development activities on its own with council approval. 17-2 HANDBOOK FOR MINNESOTA CITIES • CHAPTER 17 Minn.Stat.§469.003,subd. 1. To create a housing and redevelopment authority, the city council must,by resolution,make the following findings required by law: • Substandard, slum,or blighted areas that cannot be redeveloped without governmental assistance; or, • • A shortage of affordable,decent, safe, and sanitary dwelling accommodations available to low-income individuals and families. Minn.Stat.§469.003,subds.2 The council must pass this resolution after a public hearing. A copy of this and 4. resolution must go to the commissioner of DTED. 2. Area of operation Minn.Stat.§469.004,subds.1, The area of operation of a city HRA is the corporate limits of the city. 2. County and multi-county HRAs operate in areas that include all the political subdivisions within the county or counties, except they may not undertake any project within the boundaries of a city that has not adopted a resolution authorizing the county or multi-county HRA to exercise powers within that city. Minn.Stat.§469.004,subd.5. Establishment of a county or multi-county HRA precludes the formation of city HRAs,unless the county or multi-county HRA and the commissioner of IIIDTED agree to let the city form one. 3. Membership Minn.Stat.§469.003,subd.6. An HRA consists of five commissioners who are residents of the city.The mayor appoints and the council approves the members who serve five-year, staggered terms. City councilmembers often serve on the HRA. The entire membership of an HRA may consist of councilmembers. 24 C.F.R..964.415 Federal regulations require that at least one member on a Public Housing Agency Board,which may be the HRA, an EDA or other public housing authority. This rule applies to any public housing agency that holds a public housing annual contributions contract with HUD or that administers Section 8 tenant-based rental assistance.The rule does not apply to state-financed public housing projects or Section 8 project-based assistance.A"small PHA exception"also exists. Minn.Stat.§469.003,subd.7. The city clerk must file a certificate of appointment for each commissioner to a city HRA and send a certified copy to the commissioner of DTED. Minn.Stat.§469.011, State law allows the HRA to adopt bylaws. subd.2. • HANDBOOK FOR MINNESOTA CITIES 17-3 • CHAPTER 17 Minn.Stat.§469.011,subd.4. Commissioners may accept compensation of up to$75 for each meeting they attend. Commissioners who are elected officials may receive daily payment for a particular day only if they do not receive any other daily payment for public service on that day. Commissioners who are public employees may not receive daily payment,but may not suffer loss in compensation or benefits as a result of their service. 4. Powers Minn.Stat.§469.012,subd. 1. An HRA is primarily responsible for the planning and implementation of redevelopment and/or low-rent housing assistance programs within its area of operation.An HRA has all the powers necessary to carry out the state HRA Act,but does not have the power to levy and collect taxes or special assessments except with respect to certain redevelopment projects including,but not limited to,the following powers: • To sue and be sued; • To employ staff and an executive director; • To undertake projects within its area of operation and to provide for the construction,reconstruction,improvement, extension, alteration, or repair of any project or part of a project; • To sell,buy, own,and lease property by any means necessary,including the power of eminent domain; • To cooperate with and use state and federal financial assistance programs; • To develop rehabilitation and code enforcement techniques; • To issue bonds for any of its corporate purposes backed by the pledge of revenues, grants,or other contributions; • To implement renewal or redevelopment programs using tax increment financing; • To own,hold, improve, lease, sell,or dispose of real or personal property; • To designate substandard, slum, or deteriorating areas needing redevelopment, and unsafe,unsanitary, and overcrowded housing; • To make necessary expenditures to carry out the purposes of the HRA law; and, • To develop and administer an interest reduction program to assist the financing of the construction,rehabilitation, or purchase of low or moderate-income housing. • 17-4 HANDBOOK FOR MINNESOTA CITIES • CHAPTER 17 Minn.Stat.§469.012,subd.4. While HRAs have the legal authority to"do whatever is necessary and convenient"to implement redevelopment,they are subject to the ordinances and laws of the city. The city council must approve HRA plans before the Minn.Stat.§469.028. housing and redevelopment authority may begin implementation. 5. Contracting Minn.Stat.§469.015. All HRA construction work and purchases of equipment, supplies or materials that involve expenditure of$35,000 or more if the HRA is located in a city of under 2,500,and$50,000 for all other HRAs located in cities, must be competitively bid.There are limited exceptions for emergencies and certain projects. 6. Financing Minn.Stat.§§469.033 and Operating funds, capital improvements, and debt retirement expenses for 469.034. HRA projects may be financed by any one, or combination of,the following methods: • Federal grants; • Revenue bonds the HRA or local governing body sell; • • General obligation bonds the local governing body sells; • Tax increments from redevelopment projects; • A limited mill levy for redevelopment projects and planning activities; • A limited mill levy for informational and relocation services. 7. Certifications to state The following documents relating to the establishment and activities of local HRAs must go to the commissioner of the DTED: Minn.Stat.§469.003, • Resolution of need; subds.4,6. Minn.Stat.§469.003,subd.7. • Certificates of appointment or reappointment of HRA commissioners; • Project reports; • Applications for federal assistance; • Contracts with federal agencies; • Redevelopment plans; and, • Low rent public housing project and management plans. Minn.Stat.§469.013. In addition, annual financial reports must go to the state auditor. • HANDBOOK FOR MINNESOTA CITIES 17-5 110 CHAPTER 17 8. Federal certification In order for a local HRA to use federal Dept. of Housing and Urban Development(HUD)assistance programs, it must submit a transcript of organizational documents to the HUD area office. 9. Pros and cons of the HRA While HRAs have demonstrated competence and professional expertise in many areas,any special purpose agency like an HRA will have some pros and cons. a. Pros Fiscal self-sufficiency.Due to the nature of the programs an HRA addresses,it can fund projects usually outside the general government budget with minimal,direct impact on the city budget.The enabling legislation also allows for a one-third mill levy and the use of revenue bonds. Greater efficiency.Because of the specialized functions of an HRA,it can organize its operations in a certain area better than general government, • focusing resources on the delivery of a specific program rather than on a wide-range of conventional services. Flexibility.An HRA can act swiftly to meet a problem and has the flexibility to be more innovative than a city council in developing new approaches. Furthermore,it has the ability to coordinate public and private resources to solve problems. b. Cons Operating too independently.Because it is somewhat free of political pressure, an HRA can administer programs with only a minimal amount of accountability for its actions. Fragmentation of the local government function.An HRA can run the risk of operating at cross-purposes or in contradiction to city policies,which can result in conflict with and duplication of efforts. Responsiveness to public opinion.HRA operations,insulated from the electoral process, can risk being insufficiently responsive to public opinion or community thinking. II/ 17-6 HANDBOOK FOR MINNESOTA CITIES CD '-? � q0 CE-' 0 '� 0 t-F I `-- ' 5.Cr fD f1 o o ad ::,-d � � x n � ~' I cfg c 6, Z n t1J 6) Z & o r P R ,Y ¢ � ' ao ~. OHO 5. CD m Z � rt P o n fD o n o m K v) o P tii n tii n o o a o a a:P • C- D d co a. ° 0 o, • ° Cl)) c N 0 cro o 0 0 0 �' 0 bt r O n CA P W �-°• �' I Y C o n v' 0 0 .n C y c in P re o �. v) 6 A '- O 012 E n fD C CfQ • o Z Cl) C/) W N i-' C/) n 4' r r SI) SID xHn n z tu i-d Q. E H P r tz X C P 0 P C CP o n 0 co ot Co •-c rt -..„,, p © -, o 7D N N N N NJ N.) N N N N N f9 rreCp. rr4- gRrE. 4• cn c4 CD '—.T n CD CD co co 2 Cl) p Cl) p f) P P P P f9I o o O p `.S c 0