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7.2 HRSR 10-05-2015 htik REQUEST FOR ACTION River TO ITEM NUMBER Housing and Redevelopment Authority 7.2 AGENDA SECTION MEETING DATE PREPARED BY General Business October 5,2015 Colleen Eddy,ED Specialist ITEM DESCRIPTION REVIEWED By Small Cities Development Program preliminary application Amanda Othoudt, EDD authorization REVIEWED BY Cal Portner, City Administrator ACTION REQUESTED Authorize,by motion, the following items related to the Small Cities Development Program (SCDP) • CMHP to make a pre-application for the grant in the amount of$508,500 • HRA to pledge $100,000 toward the program BACKGROUND/DISCUSSION Last year,the city completed a pre-application for a$635,000 SCDP grant,to facilitate forgivable loans for rehabilitation of owner-occupied homes in the older part of the community. This grant program was to be administered by Central Minnesota Housing Partnership (CMHP) and the HRA's financial contribution was to be $100,000. This program is different from the HRA rehabilitation loan program currently underway,also administered by CMHP. The grant funds a program that offers low interest and forgivable loans to owner occupied residential dwellings,and commercial properties. Potential grant Max Owner SCDP Notes parameters loan contribution funds Low/moderate Deferred loan w/7-year term, loan is income homeowners 20,000 10% 90% forgiven 1/7th per year 50%of SCDP funds are fully forgivable after 10 years. 50%of SCDP funds is 1% Commercial 30,000 30% 70% installment loan w/15-year term The city did not receive that grant. Based on the information gained from the previous request, staff seeks authorization to reapply for 2016. Some of the comments received from last year's application are being addressed,including the suggestion to add commercial properties, and to reduce the study area. The suggested study area generally includes the downtown development on both sides of US Highway 10 and the railroad. Staff suggests an HRA contribution of$100,000. This is intended to demonstrate the city's importance in redevelopment and reinvestment, and supports the costlier commercial projects. In general, commercial projects are more visible, and often supply added interest in the program. 11 . 1111 11' NATURE Staff suggests that the final agreement includes a provision that five of the commercial projects come from the north side and five from the south side (CMHP suggests 5 total commercial projects)at least initially, to better distribute the benefit,and to compensate for the north side perhaps not being as organized as the south.This could be used to facilitate the assistance based on income desired by the HRA in last year's application. With authorization, CMHP will begin the grant writing process to meet the pre-application deadline of November 12, 2015. If the pre-application is approved,then the next step would be to complete a full application in early 2016. CMHP requires $600.00 for preparation and submission of the preliminary proposal. CMHP will be present to explain the grant process, typical structure, and guidelines of the grant. Financial Impact $50,000 from budgeted funds $50,000 from cash reserves that were budgeted in the previous year 2014-15 for the SCDP $600 for the application Attachments • Target area • Agreement dated October 5, 2015 • August 3,2015 HRA Budget memo LIONS ARK.ivikv�C 7 :71 f:1i�iOfi / -. �, •' •w� t �" c i �/ a' •UUUt � „. ,�, City of v ` PARK/LroNSt 3cFNTER�. j 4 - ..1, • l River , aw ' OUIVEVCZ i Legend T _� �� TlG 1-1,73 � City Limits Q �� s, Q; ~�'G Urban Service Area -4 Parcels(8-20-2014) v t �t, Park Areas i -41, w , ; ,Y $ rpA+ o q j STH. `S/ u` f 4 e i ! I I1 a . r ror c r l'J 0 "s7 grit; 0. I 6 JE ti., . _ ��P � Mirsiss*,Pi c . # .�k -- """ a r. .. ` �♦ •-. `,\ SCDP focus area .. . .„kir, .. A t., . A Disclaimer. This drawing is neither a legally recorded map nor a rvey and is not intended to be used as one.This drawing is a compilation of records,information,and data 0 544 Feet located in various city,county,and state offices,and other sources affecting the area shown,and is to be used ©Bolton&Menk,Inc-Web GIS 10/30/2014 2:43 PM foe`nonnihi ce purpo nuronfy fThe Ci P nfron River not nsihle frtr as har- nntainrd f CONTRACT FOR GRANT WRITING SERVICES FOR PRELIMINARY PROPOSAL TO DEPARTMENT OF EMPLOYMENT& ECONOMIC DEVELOPMENT SMALL CITIES DEVELOPMENT PROGRAM THIS CONTRACT for Small Cities Development Program Grant Writing Services is entered into on by and between the City of Elk River,a municipal corporation under the laws of the State of Minnesota, hereinafter referred to as "Applicant", and Central Minnesota Housing Partnership, Inc., a non-profit corporation under the laws of the State of Minnesota, hereinafter referred to as"CMHP". WHEREAS,The Applicant has requested that CMHP prepare and submit a Preliminary Proposal to the Minnesota Department of Employment and Economic Development Small Cities Development Program for owner-occupied and commercial rehabilitation activities. WITNESSED: In consideration of the mutual covenants and agreements containing herein, the Applicant and CMHP agrees as follows: CMHP Responsibilities: 1. CMHP will work with the applicant to create initial program parameters pertaining to proposed rehabilitation activities,target areas and funding parameters. 2. CMHP will conduct windshield surveys to determine target areas and to determine the condition of properties within target areas. 3. CMHP will perform research to collect demographic data required in the Preliminary Proposal. 4. CMHP will provide outreach to generate interest in the program and document the need for the proposed rehabilitation activities. 5. CMHP will incorporate all information and data into the designated Preliminary Proposal format and provide to Applicant for final review. 6. CMHP will prepare and submit Preliminary Proposal to the Minnesota Department of Employment and Economic Development Small Cities Development Program by the proposal deadline of Thursday, November 12`x', 2015. Applicant Responsibilities: 1. Applicant will submit to CMHP a payment of$600.00 for the preparation and submission of the Preliminary Proposal to the Minnesota Department of Employment and Economic Development Small Cities Development Program upon execution of this contract. 2. Applicant will provide to CMHP any data or information to assist with the preparation of the Preliminary Proposal. 3. Applicant will review the Preliminary Proposal and provide signature of approval before CMHP's submission to the Minnesota Department of Employment and Economic Development Small Cities Development Program City of Elk River,Applicant Authorized Official Signature Printed Name& Title Date Central Minnesota Housing Partnership, Inc. Authorized Official Signature Deanna Hemmesch, Executive Director Printed Name& Title Date hi .,._ Request for Action River To Item Number Housing and Redevelopment Authority xx Agenda Section Meeting Date Prepared by General Business August 3,2015 Amanda Othoudt, EDD Item Description Reviewed by 2016 HRA Budget and Resolution Establishing Cal Portner, City Administrator HRA Levy Reviewed by Action Requested Review and approve the 2016 HRA Budget and attached Resolution establishing the HRA Tax Levy for collection in year 2016. Following the HRA's action, the City Council must approve and certify the HRA levy to Sherburne County by September 15,2015. Background/Discussion The Economic Development Division consists of two separate budgets including: • Economic Development Authority • Housing&Redevelopment Authority Revenues The budget proposes a balanced budget of the operating levy at 0.01512%. The State caps an HRA operating levy at 0.0185%. Revenues generated from the HRA tax levy for the 2016 budget are estimated based on an estimated market value of$1,986,191,600 as provided by the Sherburne County Assessor. This will generate revenue of$300,250 plus an additional$4,500 in interest income. Expenditures The proposed 2016 budget was developed with the goals and action steps outlined in the 2017-2020 HRA/EDA Strategic Plan, the Mississippi Connections Downtown Plan, City Vision&Goals, and the branding implementation plan. Major initiatives from these documents include: • Rehabilitating at least 12 properties by utilizing the new HRA Housing Rehabilitation Loan Program • Applying to the Small Cities Development Program (SCDP) Grant utilizing$50,000 in grant leverage funds to rehabilitate other target areas of the city which will be developed through coordination of the HRA and Central Minnesota Housing Partnership (CMHP) • Updating the 2012 Market Housing Study • Develop a Blighted Properties Commercial and Residential program • Overhaul the EDA website to include an HRA component 1 1 / ERE 1 1 1 NATURE Major Changes Direction from the budget workshop included the following changes: At the July 6, 2015 HRA budget workshop,it was decided to increase the levy from the previous rate (.01440%) to a balanced rate of(.1512%) to reduce drawing down on the reserves for the 2016 budget and allow funding new revolving loan programs out of reserves. Direction from the commission included leaving the$50,000 for the Small Cities Development Program (SCDP) in the 2016 budget as a placeholder in the event that the SCDP grant is not received in 2015. Additionally,the commission discussed the overhaul of the cities EDA website to include a HRA component.This new component will allow residents and developers to keep updated on upcoming housing programs,new policies and development projects. Any non-spend funds remaining at the end of the year stay in the HRA fund for future housing and redevelopment purposes/projects. If a non-budget item comes up in 2016 we can use the fund balance and make a budget amendment. As of July 30, 2015, the HRA has a fund balance available for Housing and Redevelopment purposes of approximately$1 million. Financial Impact The expenditure budget is $304,750. Attachments • Resolution Establishing the HRA Levy for Collection in Year 2016 • 2016 HRA Goals and Performance Measures (internal document used for budgeting process) • Proposed 2016 Budget Detail Spreadsheet • July 6, 2015 HRA Budget Workshop Packet N:\Departments\Community Development\Economic Development\HRA\Administrative\Agenda\2015\10-5-2015\7.2 at August 3 2015 HRA 2016 Budget Memo.docx