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03-14-1988 HR MIN • HOUSING AND REDEVELOPMENT AUTHORITY MINUTES HELD AT THE ELK RIVER CITY HALL CONFERENCE ROOM MARCH 14, 1988 MEMBERS PRESENT: Estelle Gunkel, Dick Hinkle, Hank Duitsman, Duane Kropenske MEMBERS ABSENT: Larry Toth OTHERS PRESENT: Lori Johnson, Finance Director; Patrick Klaers, City Administrator The meeting was called to order at 7:00 p.m. on March 14, 1988, at the Elk River City Hall Conference Room by Chair, Estelle Gunkel. 1. Agenda Chair Gunkel requested that consideration of annual HRA business items and approval of the minutes from the last HRA meeting be added to the agenda under other business. It was the consensus of the HRA to accept the agenda as amended. 2. Discussion on Subsidized Apartment Units • One purpose of this HRA meeting was to review a proposal from Gary Santware regarding the development of subsidized apartment units. Chair Gunkel updated the HRA on the subsidized apartment unit proposal as it was previously reviewed by the City Council during its 3/7/88 meeting. It was noted that at this 3/7/88 City Council meeting, a motion was approved by the Council which stated no objection to the proposal. A general discussion was held amoung HRA members regarding the location of apartments within the City, zoning changes that may be part of the Growth Management Plan which would allow for additional apartments within the City, and the need for apartments so that a wide range of housing opportunities exists within the community. It was the general consensus of the HRA that some type of subsidized housing, either single family homes or apartments, are necessary in Elk River, and that it is an obligation of the City to ensure such housing opportunities exist. Gary Santwire distributed a 2/19/88 letter from Mr. David Reitter, which reviewed the proposal to construct a 24 unit family apartment project in Elk River. This project would be located off of Auburn Avenue on property that is currently zoned multi-family. The letter from Mr. Reitter is attached to these minutes as background information. Page 2 HRA Minutes March 14, 1988 Mr. Santwire indicated that the program for subsidized apartments is a 515 low and moderate income housing program that is administrated by the Farmers Home Administration. The subsidy being discussed is in terms of lower interest rates on the the project and not a direct rental subsidy. However, it was noted that if very high vacancy rates exist over a long period of time, that the federal government could intervene and provide a direct rental assistance in the future. Mr. Santwire indicated that the total cost of the project is approximately $774,000.00, which is somewhat higher than the normal cost per apartment unit for apartment complexes that have been constructed in Elk River the past few years. The HRA concurred that these type of low and moderate income housing units are needed in the community but expressed its desire that such units not be congregated all in one apartment complex, but be dispersed throughout the community. The HRA indicated that low and moderate subsidized housing is more appropriate as a percentage of an apartment complex (i.e. 4 units of a 12 unit complex) . Commissioner Kropuenske indicated that he would have to abstain from any vote on this issue as the First National Bank, which is his employer, is involved in the proposed project. COMMISSIONER HINKLE MOVED THAT THE HRA PROVIDE MR. SANTWIRE A LETTER • STATING THAT THE HRA IS NOT OPPOSED TO THE PROJECT AS DISCUSSED AND OUTLINED IN THE 2/19/88 LETTER FROM MR. REITTER. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 3-0. Commissioner Kropuenske abstained. 3. Budget Expenditures Chair Gunkel indicated that a second purpose for this HRA meeting was to consider various budget expenditures as adopted by the HRA in August, 1987, prior to the levying of funds for HRA activities. A) Main Street Project Chair Gunkel indicated that she had received a 2/19/88 letter from Betty Kolar who is the co-chair of the downtown committee that is working on the beautification improvements associated with the Main Street improvement project. The letter requested a contribution from the HRA in the amount of $10,000.00 to help finance the redevelopment of the downtown area. Part of the redevelopment project includes new street lighting that are of a more decorative nature. The Staff indicated it has reviewed this request with the City Attorney, and that the response from the City Attorney was that HRA funding for such an activity was an eligible and legal expenditure. Chair Gunkel discussed the 1988 HRA budget and the fact that $10,000.00 • was placed into reserves for such a possible expenditure when the budget was approved. Page 3 HRA Minutes March 14, 1988 WOMMINRONER HINKLE MOVED TO PAY TO THE CITY $10,000.00 TO SUPPORT THE LIGHTING REDEVELOPMENT PORTION OF THE MAIN STREET IMPROVEMENT PROJECT WITHIN THE CENTRAL BUSINESS DISTRICT. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 4-0. B-C)Growth Management and Economic Development Chair Gunkel indicated that funds had been set aside to help finance the Growth Management Plan which deals extensively with housing development in the community and an Economic Development Marketing Plan which to date has not begun, but is anticipated to deal with all types of development and redevelopment activities. The budget as approved in 1987, called for $5,000.00 to be spent on growth management and $15,000.00 to be spent on economic development. City Administrator, Pat Klaers, indicated that expenses for the Growth Management Plan have exceeded expectations and that it may be more appropriate for the HRA to spend $10,000.00 in the growth management area and $10,000.00 on the Economic Development Marketing Plan versus the amounts discussed when the budget was adopted in August, 1987. COMMISSIONER KROPUENSKE MOVED TO PAY TO THE CITY $10,000.00 FOR THE • GROWTH MANAGEMENT PLAN AND $10,000.00 FOR THE ECONOMIC DEVELOPMENT MARKETING PLAN AS SOON AS FUNDS ARE AVAILABLE IN 1988. COMMISSIONER HINKLE SECONDED THE MOTION. THE MOTION CARRIED 4-0. 4. Other Business A) Consideration of 8/31/87 HRA Minutes MOTION BY COMMISSIONER DUITSMAN TO APPROVE THE AUGUST 31, 1987 MINUTES AS SUBMITTED. COMMISSIONER HINKLE SECONDED THE MOTION. THE MOTION CARRIED 4-0. B) Annual Business Items Chair Gunkel indicated that as this was the first business meeting of the year tor the HRA, it would be appropriate to consider the designation of officers, official newspaper, and official depositary. No change was desired by the HRA in the officers, newspaper, and depositary. COMMISSIONER DUITSMAN MOVED TO HAVE THE 1988 HRA OFFICERS (GUNKEL, CHAIR; HINKLE, VICE-CHAIR; KROPUENSKE, SECRETARY), THE 1988 HRA OFFICIAL NEWSPAPER (ELK RIVER STAR NEWS) , AND THE 1988 HRA OFFICIAL DEPOSITARY (BANK OF ELK RIVER) REMAIN THE SAME AS IN 1987. COMMISSIONER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 4-0. Page 4 HRA Minutes • March 14, 1988 The City Administrator provided the HRA with an update of HRA activities from 1980 when the authority was established to present day. It was indicated that the HRA was initially very active because of redevelopment proposals within the downtown area. The HRA held 22 meetings within the first two years of its establishment. However, the HRA has not been active for the last five years as only 9 meetings have been held and no meetings were held in 1984. The Administrator also indicated that somehow over the past five years the revolving terms of the HRA commissioners has not followed the cycle originally established. It was intended that once a year a member of the five member HRA was to be up for reappointment and that the terms for all commissioners be for five years. The Administrator indicated that if the HRA is to remain active in future years, that steps should be taken to correct this situation. The Administrator also indicated that the City has established an Economic Development Authority and that in 1989 or shortly thereafter the HRA may be phased out and the duties of the HRA assumed by the Economic Development Authority (EDA) . II No action was requested by the City Administrator or taken by the HRA at this time regarding the terms of the commissioners or the future role of the HRa in relationship to the newly created EDA. COMMISSIONER HINKLE MOVED TO ADJOURN THE HRA MEETING. COMMISSIONER DUITSMAN SECONDED THE MOTION. THE MOTION CARRIED 4-0. The March 14, 1988, HRA meeting was adjourned at 8:00 p.m. Pc,. .e.) -7(-_-,/f, ,_, Patrick Klaers City Administrator • 1 1