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5.1. DRAFT HRA MINUTES (2 SETS) 02-04-2019 Regular Meeting of the Elk River Housing and Redevelopment Authority Held at the Elk River City Hall Monday, January 7, 2019 Members Present: Chair Larry Toth, Commissioners Denny Chuba, Michelle Eder, Louise Kuester, and Nate Ovall Members Absent: None Staff Present: Economic Development Director Amanda Othoudt, Economic Development Specialist Colleen Eddy, and Sr. Administrative Assistant/Recording Secretary Jennifer Green 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 Toth. 2. Pledge of Allegiance The Pledge of Allegiance was recited. 3. Consider 01/07/2019 Agenda Motion by Commissioner Ovall and seconded by Commissioner Chuba to approve the January 7, 2019, HRA agenda. Motion carried 5-0. 4. Consent Agenda Moved by Commissioner Chuba and seconded by Commissioner Ovall to approve the January 7, 2019, consent agenda as follows: 4.1 December 3, 2018, regular meeting minutes. 4.2 Check Register. 4.3 Attendance Policy. 4.4 Annual Review of Bylaws. Motion carried 5-0. Housing and Redevelopment Minutes Page 2 January 7, 2019 ----------------------------- 5. Open Forum No one appeared for Open Forum. 6. Public Hearings There were no public hearings. 7.1 HRA Housing Rehabilitation Loan Program Ms. Othoudt presented the staff report. She introduced Jim Hasnik, Director of Lending Services from the Center for Energy and Environment (CEE), who presented the rehabilitation loan program details to the HRA with a PowerPoint presentation about their loan program offerings, some offerings which are already available to Elk River residents. He indicated the loan documents included in the packet were drafts that could be crafted to the HRA’s policy and vision for this rehabilitation program. Chair Toth asked if CEE has their own programs they fund or do they only administer to cities. Mr. Hasnik stated a little over half of their loans are using their own funding for energy and home improvement programs as well as solar and commercial programs. The remaining loan programs are funded by city dollars and each city has unique programs based upon their criteria. He explained the handouts and updates to the loan format sheets, noting Elk River’s would be crafted for our needs. Chair Toth asked what the cost savings would be for switching from CMHP to CEE. Ms. Othoudt stated they reviewed the cost savings at the December meeting and the HRA agreed it would benefit the HRA to proceed with CEE due to the significant cost savings and administration of the loan program. Chair Toth asked how long it would take to implement the CEE loan program. Mr. Hasnik indicated it would take approximately one month to implement the program which included writing the contract and setting up the computer programs and loan documents. Chair Toth asked if there were any pending loans awaiting approval by CMHP. Ms. Othoudt stated there was one loan that the HRA would be reviewing for approval that evening. She stated that loan would be approved through CMHP. She said there were no other pending loans and any new loans would be run through CEE after approval of the paperwork. Housing and Redevelopment Minutes Page 3 January 7, 2019 ----------------------------- Commissioner Eder asked the process of adopting the CEE forms. She indicated she like CEE’s standard application form. She asked the process if a loan request would not meet the HRA’s standards and how that would be communicated to city staff. Mr. Hasnik indicated the loan application included in the packet was their standard application form, which was used for any loan request and allows CEE flexibility to use the information to determine the best program funding for the applicant. He stated the HRA can establish the underwriting guidelines and depending on those can become as involved as they want to be. He stated they will always reach out to the city to see if questions can be answered or exceptions could be reviewed if a loan doesn’t quite meet exact standards. He stated they pull one credit report from Trans Union. Commissioner Ovall noted the revolving loan program underwriting decision sheet did reference an item that CEE will contact the HRA for any questionable situations regarding underwriting. Commissioner Chuba asked questions regarding the fee structure and who was responsible for covering certain fees. Mr. Hasnik explained the one-time fee program set-up fee of $1500 would be paid by the HRA. He said the $550 fee per loan closed fee is invoiced monthly to the city and could either be paid by the HRA or passed onto the applicant. A 1% loan origination fee is paid by the borrower. He said when projects require an inspection, the city can verify a permit was pulled and inspection passes. If a permit isn’t required, Mr. Hasnik stated CEE can provide an inspection for a fee or suggested building or city staff provide an inspection. Commissioner Ovall asked questions about the loan documents in the packet. Ms. Othoudt suggested a special meeting of the HRA to work through the details of the loan documents and fee requirements. Following the presentation, it was the consensuses of the HRA to have CEE administer the HRA Rehab Loan Program to provide an improved loan program aligned with the commission’s desire to increase the underwriting standards and target a larger population of residents through the program. A special meeting will be scheduled to review and approve loan documents. 7.2 HRA Rehabilitation Loan Program Update Ms. Eddy presented the staff report. 7.3 Marketing Update Ms. Eddy presented the staff report. Housing and Redevelopment Minutes Page 4 January 7, 2019 ----------------------------- 7.4 Annual Review of Bylaws Ms. Othoudt presented the staff report. There were no amendments made to the Bylaws. The HRA recessed the meeting at 6:05 p.m. and reconvened into work session at 6:11 p.m. 8.2 Downtown Redevelopment Project Ms. Othoudt presented the staff report. She provided Chair Toth with the opportunity to revisit the downtown redevelopment project based upon his request. Chair Toth asked if a TIF district can be established to provide improvement funds to business owners on Jackson if no redevelopment is established with the school district building. Ms. Othoudt stated a project is needed to establish a district, and since there was no project established, no revenues could be generated for any improvements. She stated there seemed to be misconceptions in the public that the city would be tearing buildings down and she stated that never was the intention of establishing the TIF district. Chair Toth asked the commission if they felt this should be put out for public interest in the school district building, and if there is none received, no TIF district would be established. Commissioner Chuba asked for clarification from the council that they were not interested in proceeding with this project. Ms. Othoudt stated that was a correct statement. Commissioner Chuba asked if they had reasons. Ms. Othoudt stated there was no project proposed for the area and therefore no reason for them to support proceeding. Chair Toth stated he was in a quandary to determine how the HRA could get a project started in that area, asking if the HRA has to have someone come in to present or does the city request proposals. Ms. Othoudt stated there has to be consensus from both the HRA and the council before proceeding with requesting a project be presented to the city. Commissioner Chuba stated it was a chicken and the egg situation. Chair Toth stated they were at an impasse. He stated he would like the HRA to ask for proposals and after receiving them, bring them to the council for their approval as final decision makers. He asked some of the council members in the audience what their thoughts would be. Housing and Redevelopment Minutes Page 5 January 7, 2019 ----------------------------- It was determined that the council could not comment because it was not a joint meeting. Chair Toth requested a joint meeting. He stated he keeps getting asked about it and would like to provide a final answer. He stated it’s bothering him that the HRA isn’t doing anything. Commissioner Chuba stated the HRA invested money into the evaluation of the buildings. Commissioner Ovall stated he didn’t feel the money paid for the building evaluation was wasted because they know the project meets the criteria if an option were ever to present itself. He didn’t feel they were any worse off than what they’ve done to date. He stated it wasn’t clear to him if there is even an issue at hand. He asked if redevelopment of downtown was necessary. He stated that basic question wasn’t answered and will probably get a mixed answer. He felt most people were happy with the way downtown was currently operating and it would seem there would be resistance to any changes to proceeding with downtown rehabilitation. He stated this discussion was spurred from the school district building going on the market and it was appropriate for staff to paint an alternative vision to say, here’s another opportunity, do we take that? He stated he has not heard a solid consensus in continuing to re-envision downtown or allow downtown evolve the way it is. It was the consensus of the commission to allow the redevelopment project to end. 8.1 Main and Gates Update Ms. Othoudt presented the staff report. She provided a handout from LHB which proposed the Main and Gates Redevelopment TIF analysis costs. The commission discussed the status of the purchase attempts for the remaining properties. They discussed the Highway 169 redesign and questions regarding the effect on this area. It was the consensus of the HRA to continue attempts to purchase the 3 remaining rd properties on 3 Street. 9. Adjournment Chair Toth adjourned the meeting at 6:29 p.m. Minutes prepared by Jennifer Green. _____________________ Tina Allard, City Clerk _____________________ Larry Toth, Chair Housing & Redevelopment Authority Regular Meeting of the Elk River Housing and Redevelopment Authority Held at the Elk River City Hall Monday, January 14, 2019 Members Present: Chair Larry Toth, Commissioners Denny Chuba, Michelle Eder (4:22 p.m.), Louise Kuester, and Nate Ovall Members Absent: None Staff Present: Economic Development Director Amanda Othoudt, Economic Development Specialist Colleen Eddy, and Sr. Administrative Assistant/Recording Secretary Jennifer Green 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 4:00 p.m. by Chair Toth. 2. HRA Housing Rehabilitation Loan Program Ms. Othoudt presented the staff report. The HRA reviewed the draft documents and revised them to fit the program guidelines and policy. The HRA discussed in detail the length of time the Center for Energy and Environment (CEE) would administer the loan program. Ms. Othoudt stated after meeting with CEE staff the Friday prior, she felt very comfortable with them to have a loan program term longer than 1 year. It was the consensus of the HRA to lock into a 3-year term with CEE if they can commit to the same fees for those 3 years as well as having a termination clause in the contract. The HRA discussed the loan repayment interest rate. It was originally presented at 3% and the HRA considered raising the rate to 4% to recoup costs to regenerate the pool of loan funds. It was the consensus of the HRA to set the loan rate at 4%. The HRA discussed the credit requirements for applicants. It was the consensus of the HRA to require the borrower to be 24 months since a bankruptcy, have no more than two 30-day late payments on an applicant’s credit report in the past year, and a 620 minimum credit score. The HRA decided to remove from sweat equity the rental of tools and equipment and add that the borrower will be responsible for the cost of the site visit. Housing and Redevelopment Minutes Page 2 January 14, 2019 ----------------------------- The title company and closings were discussed. Ms. Othoudt indicated she is willing to close the loans for no additional costs. The HRA agreed to use a local title company, such as Sherburne County Abstract. Ms. Othoudt would have a discussion with CEE regarding the loan servicing agreement on page 3, the servicing delinquency, and when CEE would contact the borrower to tell them they were 30 days late. Ms. Othoudt stated she would ask CEE what their cost would be for absorbing and servicing the 14 loans currently under CMHP. The consensus of the HRA was to allow CEE to service the current CMHP loans with the cost of servicing to be determined by CEE. The HRA discussed and agreed that a photo release should be obtained from the borrower to use before and after rehabilitation pictures in marketing purposes with an option for them to opt out. Ms. Othoudt stated she would have these final versions of loan documents on the next agenda for review and approval. 3. Adjournment Chair Toth adjourned the meeting at 5:58 p.m. Minutes prepared by Jennifer Green. _____________________ Tina Allard, City Clerk _____________________ Larry Toth, Chair Housing & Redevelopment Authority