HRA Packet 10-07-2024
Housing and Redevelopment
Authority
Regular Meeting
&
Work Session
Agenda
Monday, October 7, 2024
5:30 PM
Elk River City Hall
▪ Regular meeting in Council Chambers
▪ Work Session meeting in Upper Town Conference Room immediately following regular meeting
1. CALL MEETING TO ORDER
2. PLEDGE OF ALLEGIANCE
3. CONSIDER AGENDA
4. CONSENT AGENDA
Considered to be routine and noncontroversial and will be approved by one motion. There will be no separate discussion of
these items unless there is a request to remove the item from the consent agenda to the regular agenda.
4.1 Draft Special HRA Minutes - August 20, 2024
4.2 Draft HRA Minutes - September 3, 2024
4.3 Check Register
4.4 Balance Sheet
4.5 Revenue/Expenditure Reports
5. OPEN FORUM
An opportunity to provide comments and feedback regarding items not on the agenda. Information provided in Open Forum
will not be discussed at this meeting; rather, the information will be referred to staff and/or scheduled for discussion at a
future meeting.
6. GENERAL BUSINESS
Items in which the information is presented by city staff or consultants, then deliberation and action occur. General Business
items are not opportunities to receive or provide public input. However, the presiding officer may, at its sole discretion,
solicit public feedback.
6.1 Housing Rehabilitation Loan Program Update
6.2 General Updates
7. MOTION TO ADJOURN REGULAR MEETING
8. WORK SESSION
Work Sessions are less formal meetings to encourage dialog. Official action or votes are not typically taken. At the
conclusion of a discussion, a simple consensus provides staff direction for execution of the item. This portion of the agenda
is audio recorded but not video recorded or broadcast. Work Sessions are open to the public; however, visitors who wish
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The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
to provide input must be invited by the presiding officer, assume a seat at the discussion table and provide their full name
and address for the official record.
8.1 Statewide Affordable Housing Aid
9. MOTION TO ADJOURN
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Meeting of the Housing and
Redevelopment Authority
Held at the Elk River City Hall
Tuesday, August 20, 2024
Members Present: Councilmember Jennifer Wagner, Commissioner Dennis Chuba, Commissioner
Nate Ovall, Commissioner Lynn Caswell
Members Absent:
Staff Present: Economic Development Director Brent O'Neil, Economic Development
Specialist Joshua Mollan, and Recording Secretary Jennifer Green
1.CALL MEETING TO ORDER
1.1 Special HRA Meeting Notice
Pursuant to due call and notice thereof, the meeting was called to order at 2:30 p.m.
2.PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was recited.
3.AMEND MAIN AND GATES PROPERTY PURCHASE AGREEMENT
3.1 Consider Amendment Four to Main and Gates Purchase Agreement
Mr. O'Neil presented the staff report. Mr. Touchette arrived at 2:32 p.m.
The HRA reviewed each request to amend the purchase agreement as outlined in the staff report.
Regarding the Onsanger property at 425 3rd St. NW, which has not been acquired as part of this
project, Mr. O'Neil explained the encumbrance of the water pipe which staff believes runs underneath
the adjacent corner parcel from Gates. Mr. Touchette has asked the city to warranty that pipe if at a
future time, he develops the parcel, that he is not responsible for the cost of the pipe.
Secondly, Mr. Touchette is requesting that if there were any utilities (water and sewer) left in the
ground during the demolition phase that he not be responsible for them. Mr. O'Neil explained the
difficulty in confirming these types of details with records. He states that they strongly believe they have
been disconnected and removed, but there was a small chance they have not, and Mr. Touchette is
requesting this is also warrantied. Mr. O'Neil stated both issues could cost the HRA upwards of
$25,000.
Commissioner Caswell asked whether there was water service available along 3rd Street. Mr. O'Neil
confirmed there was.
Thirdly, the 90-day cure period, which is tied to the statutory reversion clause and the language DRAFTPage 3 of 43
Housing and Redevelopment Authority Minutes
August 20, 2024
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outlined in the draft amendment included in the staff report, is supported by the city attorney. Lastly,
the buyer is requesting the buyer's right to extend due diligence through the building permit application
and approval process.
Mr. O'Neil added that initially a Development Agreement was considered to be a requirement for this
project but has since concluded that it won't be necessary. This requirement can be removed from the
agreement or a statement of affirmation can be agreed to that either both parties decline it or feel this
provision has been met.
Mr. O'Neil noted the quote that Mr. Touchette obtained for restoration of non-compacted soils should
be discussed.
Ron Touchette, Rock Solid Companies, stated it was his understanding, based upon documents
obtained from the city and his own soil samples, that where the four basements were excavated was
where the fill was needed. He stated he felt when the basements were removed, it was cheaper to fill in
with construction debris and leave the sites uncompacted.
Chair Chuba asked if in the original agreement with Veit, who was the contractor who removed these
buildings, was it noted how the sites would be left.
Mr. O'Neil stated in a follow-up with Veit, the scope of work did not call for compacting the soils.
Chair Chuba stated a project called for underground parking it wouldn't be an issue, but with the
proposed slab on grade, it is problematic.
Mr. Touchette explained the building was proposed to be on the corner but was moved due to project
timelines and other circumstances.
Commissioner Beaudry asked Mr. Touchette if these concerns could have been brought up sooner.
Mr. Touchette stated he didn't have the soil report. He had requested all the reports and documents,
but they weren't all available and felt it was because of a change in staff.
Commissioner Ovall stated the HRA now knows it's a learning curve.
Commissioner Caswell asked when the report was sent to Mr. Touchette. Mr. O'Neil stated he felt it
was last summer prior to the first amendment during due diligence.
Mr. Touchette stated it wasn't a new issue as it was brought up when discovered.
The HRA discussed the previous soil borings.
Commissioner Wagner stated she could support the warranties in the amount of $25,000. She stated
she came onto the HRA after this project had started. She felt the HRA has been willing to work with
the seller and agreed it was a unique site but also had to look at it from the point of the taxpayers. She
wondered if the seller and HRA could share in the cost of the soil repairs.
Mr. O'Neil asked if the soil repairs quote included all seven basements.
DRAFTPage 4 of 43
Housing and Redevelopment Authority Minutes
August 20, 2024
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Mr. Touchette stated the quote is to correct the problems on the entire site and he can't make it work
economically if they only build one building. He stated they are paying for a shovel-ready site that isn't
shovel-ready.
Commissioner Wagner wondered about the meat market site.
Mr. O'Neil stated initially one proposal for the Main and Gates properties was for a building with
underground parking. He stated when the meat market site was demolished, they discussed the same
thing, thinking there was a very good chance the site would be dug up.
Commissioner Ovall stated he wasn't sure if the HRA was selling this as a shovel-ready site or rather a
'clean canvas.'
Commissioner Caswell asked if any other city staff were involved in this project.
Mr. O'Neil stated staff included the city engineer as well as utilities, Elk River Municipal Utilities, and a
consultant who did the inspections. He stated they were who they were trying to get better records
from the consultant. He stated he sent the soil report to Mr. Touchette in July 2022.
Mr. Touchette discussed the finances of his project and the hope of seeing the benefits of the recent
highway projects.
Mr. O'Neil stated per Mr. Touchette's proposal that the quality and scope of this project will be very
nice for this site, and price per square foot will be above the norm of what would normally be placed
here. He stated he has thought of different scenarios to address these requests.
Commissioner Caswell stated he felt a conversation between the city attorney and the company that
did the inspection.
Mr. O'Neil stated the soil issue was more based upon the scope of the project and how staff addressed
it at the time. He does recall a conversation on the Elk River Meats property about how to fill in the
excavated portion.
Commissioner Caswell asked if all the sites had full basements.
Mr. Touchette stated the 414 address had a half height basement. The rest were full basements.
Commissioner Ovall stated he would have to look back at meeting minutes, but he had a hard time
believing Veit wouldn't have brought up compaction options. But because they didn't know what would
building be proposed, he stated they probably went with a blank slate, free of debris.
Chair Chuba recalled the vision for this corner was substantial and included apartments, which would
have necessitated an excavation, but for whatever reason based upon the economy or the pandemic,
that has changed. If the HRA denies the additional costs to mitigate this, he wasn't sure if Mr. Touchette
would walk away from this project, but felt the six years these properties have been evolving, it would
be nice to get it wrapped up. He wondered if there could be some compromise.
Mr. Touchette proposed the HRA agree to the seller credit of $53,939.00, and he would worry about
the utility connections. He stated he would also deal with the water pipe at 425 3rd Street and accept it DRAFTPage 5 of 43
Housing and Redevelopment Authority Minutes
August 20, 2024
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with the encumbrance.
The HRA discussed where the utilities were shut off from the curb stop, the city felt highly confident
event without evidence, that they were removed from the properties; but they could have been
abandoned under the road. Mr. O'Neil stated that per utility standards, water would be disconnected at
the main and sewer at the property line.
Commissioner Caswell wondered if the HRA would be willing to agree to a sum up to a certain dollar
amount.
Commissioner Wagner asked Mr. Touchette if he'd ever bought a property where he hasn't had to do
some remediation.
Mr. Touchette discussed his experience with a building in Maplewood and the proposed language in the
draft amendment is directly from that project.
Commissioner Wagner stated she would be willing to share in the costs of remediation but not fully at
the expense of the taxpayers. She appreciated what Mr. Touchette was negotiating and didn't feel he
would have any trouble filling the second building when built.
Commissioner Ovall agreed with Commissioner Wagner's comments and while it was an inherent
nature of these projects, he also had sympathy for the current dynamics. He stated he wouldn't blame
Mr. Touchette if the economics didn't work out, but the city needs to consider the constituents with
reasonable accomodation.
Mr. O'Neil provided some suggestions for negotiating a resolution and the HRA discussed the
language.
Commissioner Ovall suggested a $40,000 seller credit in exchange for removing the representations
and warranties from Amendment 4.
Commissioner Wagner agreed with Commissioner Ovall's suggestions, noting it makes sense to do a
credit..
Mr. Touchette suggested a seller credit of $46,000.00.
Commissioner Ovall noted $45,000 would be 10% of the purchase price.
Moved by Commissioner Ovall and seconded by Commissioner Wagner to approve the
following proposed amendments to the purchase agreement for the sale of the Main and
Gates Property:
-A seller credit of $45,000.00 to repair and restore non-compacted soils and buried debris
associated with demolition and fill of former structures on the properties.
-The buyer is aware of the existing water service at 425 3rd St. NW and accepts the
encumbrance.
Motion carried 4-0.
Mr. O'Neil stated with the HRA's motion that staff would work with Mr. Touchette to draft an updated
Amendment 4 document with the agreed upon terms, including the known water utility encumbrance DRAFTPage 6 of 43
Housing and Redevelopment Authority Minutes
August 20, 2024
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on the property and potential remaining other utilities being the responsibility of the buyer, for the
himself, Chair Chuba, and Mr. Touchette to execute.
4. MOTION TO ADJOURN MEETING
Moved by Commissioner Ovall and seconded by Commissioner Caswell to adjourn the
meeting. Motion carried 4-0.
The meeting adjourned at 3:19 p.m.
Minutes prepared by Jennifer Green.
_________________
Denny Chuba, Chair
___________________
Tina Allard, City Clerk
DRAFTPage 7 of 43
Meeting of the Housing and
Redevelopment Authority
Held at the Elk River City Hall
Tuesday, September 3, 2024
Members Present: Councilmember Jennifer Wagner, Commissioner Dennis Chuba, Commissioner
Nate Ovall, Commissioner Lynn Caswell
Members Absent: Commissioner Mel Beaudry
Staff Present: Economic Development Director Brent O'Neil, Economic Development
Specialist Joshua Mollan, and Recording Secretary Jennifer Green
1.CALL MEETING TO ORDER
Pursuant to due call and notice thereof, the meeting was called to order at 5:31 p.m.
2.PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was recited.
3.CONSIDER AGENDA
Moved by Commissioner Wagner and seconded by Commissioner Ovall to approve the
agenda. Motion Carried 4-0.
4.CONSENT AGENDA
Moved by Commissioner Caswell and seconded by Commissioner Wagner to approve the
following consent items as outlined in their respective staff reports. Motion Carried 4-0.
4.1 HRA Draft Minutes - August 5, 2024
4.2 Check Register
4.3 Balance Sheet
4.4 Revenue/Expenditure Reports
5.OPEN FORUM
No one appeared for Open Forum.
6.GENERAL BUSINESS DRAFTPage 8 of 43
Housing and Redevelopment Authority Minutes
September 3, 2024
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6.1 Housing Rehabilitation Loan Program Update
Mr. Mollan presented the staff report. He noted a recent loan request resulted in the property being
outside of the Urban Service District and therefore ineligible for the Rehab Loan Program.
6.2 2025 Budget Adoption and Levy Recommendation
Mr. O'Neil presented the staff report. He noted the work session discussion regarding commission
compensation would need to be approved by the city council, and the council has been made aware of
the request. He noted a future meeting to discuss this with the council, and the enabling resolution
would need to be updated, and suggested the decision be discussed at the HRA annual meeting. He
suggested leaving the request out of the budget and then if a commission compensation plan is
approved at the annual meeting next year, the fund balance could cover any budget cost during 2025.
Moved by Commissioner Caswell and seconded by Commissioner Wagner to approve the
2025 HRA budget and goals as outlined in the staff report, and recommend to the City
Council that $439,950 be included in the Preliminary Levy. Motion Carried 4-0.
6.3 General Updates
Mr. Mollan reported the fall flower baskets had been installed downtown. He noted a hit-and-run on a
light pole, and ERMU had reinstalled the light pole. The basket survived but new flowers were needed,
which Yardworx was working on replacing. Commissioner Wagner noted her positive contact with staff
from Yardworx, and offered them her compliments on this year's flowers and how the city is pleased to
continue working with them for the next few years.
Mr. O'Neil noted the property at 555 Railroad drive may again be up for discussion and will keep the
HRA posted.
Mr. O'Neil stated the downtown steering committee meeting was held with Commissioner Caswell and
Councilmember Wagner in attendance. He indicated a survey is available for people to weigh in on the
downtown vision.
Mr. O'Neil discussed the sale of the Daddy O's site to the owner of The Tipsy Chicken; a downtown
loan program was available but the owner stated during a recent DERBA meeting that the HRA
application process was too onerous, and therefore, he decided not to proceed with the application and
apply for traditional bank financing.
Mr. O'Neil noted the Troy Street property up for condemnation was on the agenda for tonight's City
Council meeting for formal consideration.
Mr. O'Neil noted there will be an update from Sherburne County on the housing study and will discuss
at a future work session how to use the state aid award for housing opportunities that align with the
study results.
Commissioner Ovall asked Mr. O'Neil if the updates tonight were asking for a position from the HRA
members or just updating them.
Mr. O'Neil stated he likes to share and relay information when things happen downtown, especially DRAFTPage 9 of 43
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September 3, 2024
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when strong comments are made regarding something like a city loan program and to DERBA group,
not to just staff. He stated he was looking forward to putting funds to use through that loan program
and staff did not feel the application asked for items outside a normal loan application. Mr. O'Neil stated
with Ehlers on board, the city's financial advisor, they wish to look at all the programs available and see
if there's room to tweak the applications.
Commissioner Ovall encouraged staff to review any of the loan programs and offer their
recommendations.
Commissioner Caswell asked if the applications were available online.
Mr. O'Neil stated they are, and clearly outlines the materials needed to submit. He stated there are 4
different loan programs bundled into one loan packet.
Commissioner Wagner stated when you're using taxpayer dollars, providing documentation is an
expectation.
6.4 Main and Gates Properties Update
Mr. O'Neil presented the staff report. He noted the HRA may have seen the letter to the editor in the
local newspaper from a neighboring property owner and his disagreement about the process used to
receive the variance. Mr. O'Neil wanted to make the board aware the adjacent property owner has
been actively disputing this approval.
Mr. O’Neil stated that following the special HRA meeting, he had not received an update of
Amendment Four from Ron Touchette. He stated he understood Mr. Touchette would have a
proposed document to review and execute and this has not happened. Contractually, Amendment Four
was approved, which gives due diligence by September 27, and a closing date prior to October 28. As of
now, executed Amendment Four has not been reviewed since a document has not been submitted to
review.
Chair Chuba felt it quite troubling and was surprised and concerned.
Commissioner Ovall stated he could take it either way; he was surprised but not concerned. He thinks
if there’s time to get it done, we have the time and would be shocked if there was any additional
negotiating.
Mr. O’Neil noted the HRA won’t have another board meeting until due diligence expires.
7. MOTION TO ADJOURN REGULAR MEETING
Moved by Commissioner Ovall and seconded by Commissioner Caswell to adjourn the
meeting. Motion carried 4-0.
The meeting adjourned at 5:54 p.m.
Minutes prepared by Jennifer Green.
DRAFTPage 10 of 43
Housing and Redevelopment Authority Minutes
September 3, 2024
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_________________
Denny Chuba, Chair
___________________
Tina Allard, City Clerk
DRAFTPage 11 of 43
CITY OF ELK RIVER Payment Approval Report - Council Page: 1
Report dates: 10/3/2024-10/3/2024 Oct 03, 2024 02:20PM
Report Criteria:
Detail report.
Invoices with totals above $0.00 included.
Paid and unpaid invoices included.
Description FUND DEPARTMENT Net
Invoice Amount
CITY OF ELK RIVER
REIMB SUPPLIES - MENARDS/J HRA HOUSING & D 2.65
REIMB SALARIES - AUG 24 HRA HOUSING & D 9,595.30
REIMB SALARIES - AUG 24 HRA HOUSING & D 719.65
REIMB SALARIES - AUG 24 HRA HOUSING & D 594.91
REIMB SALARIES - AUG 24 HRA HOUSING & D 139.13
REIMB SALARIES - AUG 24 HRA HOUSING & D 1,594.80
REIMB SALARIES - SEP 24 HRA HOUSING & D 6,396.86
REIMB SALARIES - SEP 24 HRA HOUSING & D 479.76
REIMB SALARIES - SEP 24 HRA HOUSING & D 396.61
REIMB SALARIES - SEP 24 HRA HOUSING & D 92.75
REIMB SALARIES - SEP 24 HRA HOUSING & D 1,594.80
REIMB POSTAGE FOR METER HRA HOUSING & D 10.69
Total CITY OF ELK RIVER: 21,617.91
TYLER CHESEMOVE
AUG 24 LAWN SERVICE HRA HOUSING & D 400.00
SEP 24 LAWN SERVICE HRA HOUSING & D 400.00
Total TYLER CHESEMOVE: 800.00
Grand Totals: 22,417.91
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10-03-2024 02:41 PM CITY OF ELK RIVER PAGE: 1
BALANCE SHEET
AS OF: SEPTEMBER 30TH, 2024
910-HRA
ACCOUNT # ACCOUNT DESCRIPTION BALANCE
_____________________________________________________________________________________________
ASSETS
======
910-1010 Cash - HRA 867,432.63
910-1190 Loans Receivable 206,054.01
910-1193 Forgivable Loan 75,000.00
910-1194 Allow for Forgivable Loan ( 75,000.00)
910-1195 Note Receivable 400,000.00
910-1310 Due From Other Funds 157,254.48
910-1610 Land Held for Redevelopment 382,000.00
2,012,741.12
TOTAL ASSETS 2,012,741.12
==============
LIABILITIES
=========== ______________ ______________
EQUITY
======
910-2400 Fund Balance 1,924,693.80
TOTAL BEGINNING EQUITY 1,924,693.80
TOTAL REVENUE 232,783.34
TOTAL EXPENSES 144,736.02
TOTAL REVENUE OVER/(UNDER) EXPENSES 88,047.32
TOTAL EQUITY & REV. OVER/(UNDER) EXP. 2,012,741.12
TOTAL LIABILITIES, EQUITY & REV.OVER/(UNDER) EXP. 2,012,741.12
==============
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10-03-2024 02:42 PM CITY OF ELK RIVER PAGE: 1
REVENUE & EXPENSE REPORT (UNAUDITED)
AS OF: SEPTEMBER 30TH, 2024
910-HRA
FINANCIAL SUMMARY 75.00% OF YEAR COMP.
CURRENT CURRENT YEAR TO DATE % OF BUDGET
BUDGET PERIOD ACTUAL BUDGET BALANCE
___________________________________________________________________________________________________________________
REVENUE SUMMARY
HRA 445,100.00 701.96 232,783.34 52.30 212,316.66
TOTAL REVENUES 445,100.00 701.96 232,783.34 52.30 212,316.66
============= ============= ============= ======= =============
EXPENDITURE SUMMARY
Economic Development
Housing & Redevelopment 445,100.00 4,480.01 144,736.02 32.52 300,363.98
TOTAL Economic Development 445,100.00 4,480.01 144,736.02 32.52 300,363.98
TOTAL EXPENDITURES 445,100.00 4,480.01 144,736.02 32.52 300,363.98
============= ============= ============= ======= =============
REVENUES OVER/(UNDER) EXPENDITURES 0.00 ( 3,778.05) 88,047.32 ( 88,047.32)
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10-03-2024 02:42 PM CITY OF ELK RIVER PAGE: 2
REVENUE & EXPENSE REPORT (UNAUDITED)
AS OF: SEPTEMBER 30TH, 2024
910-HRA
75.00% OF YEAR COMP.
CURRENT CURRENT YEAR TO DATE % OF BUDGET
REVENUES BUDGET PERIOD ACTUAL BUDGET BALANCE
___________________________________________________________________________________________________________________
HRA
===
Taxes
910-3-0000-3111 Property Taxes 440,100.00 0.00 226,137.69 51.38 213,962.31
TOTAL Taxes 440,100.00 0.00 226,137.69 51.38 213,962.31
Intergovernmental Rev _____________ _____________ _____________ _______ _____________
Charges for Services _____________ _____________ _____________ _______ _____________
Other Revenue
910-3-0000-3621 Interest Income 5,000.00 701.96 6,645.65 132.91 ( 1,645.65)
TOTAL Other Revenue 5,000.00 701.96 6,645.65 132.91 ( 1,645.65)
Other Financing Sources _____________ _____________ _____________ _______ _____________
Transfers In _____________ _____________ _____________ _______ _____________
_____________________________________________________________________________
TOTAL HRA 445,100.00 701.96 232,783.34 52.30 212,316.66
___________________________________________________________________________________________________________________
TOTAL REVENUE 445,100.00 701.96 232,783.34 52.30 212,316.66
============= ============= ============= ======= =============
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10-03-2024 02:42 PM CITY OF ELK RIVER PAGE: 3
REVENUE & EXPENSE REPORT (UNAUDITED)
AS OF: SEPTEMBER 30TH, 2024
910-HRA
Economic Development 75.00% OF YEAR COMP.
Housing & Redevelopment
CURRENT CURRENT YEAR TO DATE % OF BUDGET
DEPARTMENTAL EXPENDITURES BUDGET PERIOD ACTUAL BUDGET BALANCE
___________________________________________________________________________________________________________________
Personal Services
910-4-6100-4101 Regular Pay 82,600.00 0.00 44,188.27 53.50 38,411.73
910-4-6100-4104 PERA 6,200.00 0.00 3,314.11 53.45 2,885.89
910-4-6100-4105 FICA 5,100.00 0.00 2,750.39 53.93 2,349.61
910-4-6100-4107 Medicare 1,200.00 0.00 643.23 53.60 556.77
910-4-6100-4108 Insurance 16,200.00 0.00 11,163.60 68.91 5,036.40
910-4-6100-4109 Workers Comp 350.00 0.00 339.75 97.07 10.25
TOTAL Personal Services 111,650.00 0.00 62,399.35 55.89 49,250.65
Supplies
910-4-6100-4219 Operating Supplies 500.00 0.00 0.00 0.00 500.00
TOTAL Supplies 500.00 0.00 0.00 0.00 500.00
Services & Charges
910-4-6100-4304 Legal Fees 8,000.00 130.00 947.00 11.84 7,053.00
910-4-6100-4319 Professional Services 32,000.00 0.00 800.00 2.50 31,200.00
910-4-6100-4322 Postage 50.00 0.00 0.00 0.00 50.00
910-4-6100-4331 Travel, Conferences & Schools 200.00 0.00 0.00 0.00 200.00
910-4-6100-4349 Advertising/Marketing 9,200.00 549.41 7,525.91 81.80 1,674.09
910-4-6100-4359 Publishing 350.00 0.00 77.40 22.11 272.60
910-4-6100-4401 Bldg Repair/Maint Services 4,000.00 400.00 1,200.00 30.00 2,800.00
910-4-6100-4404 Software Services 9,100.00 0.00 4,713.36 51.80 4,386.64
910-4-6100-4409 Contractual Services 27,750.00 3,400.60 29,573.00 106.57 ( 1,823.00)
910-4-6100-4433 Dues & Subscriptions 800.00 0.00 0.00 0.00 800.00
910-4-6100-4440 Miscellaneous 200,000.00 0.00 0.00 0.00 200,000.00
TOTAL Services & Charges 291,450.00 4,480.01 44,836.67 15.38 246,613.33
Capital Outlay _____________ _____________ _____________ _______ _____________
Debt Service _____________ _____________ _____________ _______ _____________
Transfers Out
910-4-6100-4721 Transfer-General Fund 37,500.00 0.00 37,500.00 100.00 0.00
910-4-6100-4735 Transfer-EDA 4,000.00 0.00 0.00 0.00 4,000.00
TOTAL Transfers Out 41,500.00 0.00 37,500.00 90.36 4,000.00
___________________________________________________________________________________________________________________
TOTAL Housing & Redevelopment 445,100.00 4,480.01 144,736.02 32.52 300,363.98
___________________________________________________________________________________________________________________
TOTAL Economic Development 445,100.00 4,480.01 144,736.02 32.52 300,363.98
___________________________________________________________________________________________________________________
TOTAL EXPENDITURES 445,100.00 4,480.01 144,736.02 32.52 300,363.98
============= ============= ============= ======= =============
REVENUES OVER/(UNDER) EXPENDITURES 0.00 ( 3,778.05) 88,047.32 ( 88,047.32)
Page 16 of 43
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
Housing and Redevelopment Authority
Item Number
6.1
Meeting Date
October 7, 2024
Prepared By
Joshua Mollan, Economic Development Specialist
Item Description
Housing Rehabilitation Loan Program Update
Reviewed by
Brent O'Neil
Cal Portner
Action Requested
Receive updates on the Housing Rehabilitation Loan Program
Background/Discussion
CEE reports that all accounts are current, the HRA's portfolio is performing as expected with no
delinquencies or late payments, and $97,710 remains available for new loan disbursements in 2024.
Staff published an ad for the program in the Fall Home Improvement Section of the September 14 issue of the
Star News.
We have also received notice from CEE regarding their desire to continue working with the city in 2025. The
present fee of $5,000 would remain intact. The contract extension will be brought forward in November or
December.
Financial Impact
N/A
Mission/Policy/Goal
Improve housing stock by offering incentives or programs to repair or maintain residential properties.
Attachments
1. CEE Monthly Loan Servicing Report
2. CEE Monthly Loan Activity Summary
3. Home Improvement Ad
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CEE Monthly Loan Activity Summary
10/7/24
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The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
Housing and Redevelopment Authority
Item Number
6.2
Meeting Date
October 7, 2024
Prepared By
Brent O'Neil, Economic Development Director
Item Description
General Updates
Reviewed by
Cal Portner
Action Requested
Item presented for information and discussion purposes.
Background/Discussion
This item is an opportunity to discuss relevant topics and other non-action items of the board.
Financial Impact
N/A
Mission/Policy/Goal
The goal of the HRA is to promote certain housing and redevelopment projects.
Attachments
None
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The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
Housing and Redevelopment Authority
Item Number
8.1
Meeting Date
October 7, 2024
Prepared By
Brent O'Neil, Economic Development Director
Item Description
Statewide Affordable Housing Aid
Reviewed by
Cal Portner
Action Requested
Item presented for information and discussion purposes.
Background/Discussion
In 2023, the state legislature adopted a new program to support housing throughout the state by providing
funding to local communities. Elk River received an allocation of $95,000 in 2023 and will receive a similar
allocation in 2024. Thereafter, the annual allocation is projected at $42,000. Additionally, Sherburne County
has received funds and there may be opportunities to partner with the county on joint efforts in Elk River.
The City Council has designated the HRA to be responsible for developing programs to utilize these funds,
which must be spent within four years of receipt or be subject to recapture. Program guidelines are attached.
Staff would like to discuss some ideas with the board and receive feedback ahead of drafting a program for
consideration.
Financial Impact
N/A
Mission/Policy/Goal
Help citizen quality of life
Attachments
1. State FAQ Sheet
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Local and Statewide Affordable Housing Aid Frequently
Asked Questions
In 2023, the Minnesota Legislature authorized aid payments to counties, cities and Tribal Nations and
in 2024 the legislature adopted changes to the aid programs. The goal is to fund affordable housing
projects and help organizations provide affordable and supportive housing.
Local Affordable Housing Aid (LAHA) is aid to metropolitan local governments of seven counties and 63
cities. LAHA is funded through a new dedicated sales tax in the seven-county metropolitan area. As
sales taxes will vary, the amount of LAHA distributed will also vary.
Statewide Affordable Housing Aid (SAHA) is funded by state funds appropriated to the Department of
Revenue. All Minnesota counties, Tribal Nations and 37 cities will be eligible to receive this aid.
Aid payments are made directly to local governments. In the metro, aid is funded by the sales tax for
housing. Statewide, aid is funded by state appropriations.
Throughout the document, “housing aid” is used when the response applies to both LAHA and SAHA.
The information provided in this document does not constitute legal advice and is sub ject to change. If
there are questions regarding how program requirements or criteria apply in specific circumstances,
please consult with your own legal counsel.
Overview and Requirements
Why is there a difference between SAHA and LAHA?
The primary differences between LAHA and SAHA are the way they are funded, when funding will be
disbursed and to whom.
Both aid projects have the same eligible uses and requirements except for market rate housing. This is
only available in certain non-metropolitan areas using SAHA.
What are the eligible uses of housing aid programs?
Qualifying projects for aids payable in 2023 are:
June 14, 2024
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•Emergency rental assistance for households earning less than 80% of area median income
(AMI) as determined by the U.S. Department of Housing and Urban Development (HUD)
•Financial support to nonprofit affordable housing providers in their mission to provide safe,
dignified, affordable and supportive housing
•Development of market rate residential rental properties outside of the metro area if certain
conditions are met
•Projects designed for the purpose of construction, acquisition, rehabilitation, demolition or
removal of existing structures, construction financing, permanent financing, interest rate
reduction, refinancing and gap financing of affordable housing
For aids payable in 2024, qualifying projects are those listed above plus:
•Financing the operations and management of financially distressed residential properties
•Funding of supportive services including staffing for supportive housing, which includes
financial support to nonprofit services providers and capitalized reserves
•Costs of operating emergency shelter facilities, including services
For more information, read the complete list of LAHA qualifying projects and SAHA qualifying projects.
What is gap financing?
Gap financing is the difference between the property costs (including acquisition, demolition,
rehabilitation and construction) and
•The market value of the property upon sale
OR
•The amount the target household can afford for housing (based on industry standards and
practices)
What are the affordability requirements of LAHA and SAHA?
Specific income requirements are provided for:
•Emergency Rental Assistance
o Less than 80% of AMI
•Homeownership
o At or below 115% of the greater of state or area median income
o Priority for those at or below 80%
•Rental Housing
o At or below 80% of the greater of state or area median income
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o Priority for those at or below 50%
State and area median incomes are determined by HUD.
While there are no income requirements or income qualification for projects support ing nonprofits,
organizations should be providing affordable or supportive h ousing.
Some non-metropolitan communities may be eligible to spend aid on market rate developments.
There are no income requirements for market rate housing under this category.
Are there other requirements if using these funds?
Yes. If LAHA or SAHA is used for new construction of a building with more than four units, the building
must be constructed, converted or otherwise adapted to include accessibility features, such as
sensory-accessible (see subd. 4). Documentation will be required for reporting and compliance.
State Agency Roles and Reporting Requirements
What roles do the Department of Revenue and Minnesota Housing play in distributing and
tracking local housing aid?
The Department of Revenue calculates and distributes the amount of aid available to each
government. Revenue also accepts applications from eligible Tribal Nations.
Minnesota Housing’s statutory role relates to reporting and compliance. First reports are due by
December 1, 2025. While not required by the legislation, Minnesota Housing is hiring staff to support
housing aid programs with technical assistance and coordination.
Does a city, county or Tribe need to apply to receive the funds?
For cities and counties there is no application process. Revenue will distribute aid according to
statutory requirements.
Tribal Nations must apply to receive funds annually. Tribes should work with Revenue to meet this
annual requirement.
Does a city, county or Tribe need to seek preapproval before spending the funds?
No. Approval is not needed before spending funds. However, funds must be used on qualifying projects
and expenditures should be documented to avoid repayment or recapture.
Will Minnesota Housing be developing a program guide for housing aid?
No. Housing aid is not a grant or loan program and is not subject to a program guide.
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Minnesota Housing will support housing aid programs through guidance and staff support.
What are the reporting requirements for the funds?
Beginning in 2025, housing aid recipients must submit a report to Minnesota Housing every year by
December 1.
The report must include documentation of:
•Certification that the aid recipient will use the aid funds to supplement and not supplant its
existing locally-funded housing expenditures
•Qualifying projects completed or planned with the funds
•Location of unspent funds
•Inability to spend on a qualifying project prior to the deadline (if funds deposited into a local
housing trust fund)
•Accessibility requirements (for project of four or more units)
•Relevant resolution and certifications for market rate developments in non-metropolitan
communities
•Relevant documentation of locally-funded housing expenditures in prior years, including public
notice requirements
Additional guidance on the report’s format will be provided in the future.
Do metropolitan counties need to submit a report for LAHA and one for SAHA?
Minnesota Housing is determining if the reports must remain separate. However, if they do, the report
format will be the same or substantially similar for LAHA and SAHA.
What happens if a city, county or Tribal Nation does not submit a report or does not spend
the funds?
Reports are due by December 1 every year. The first report is due on December 1, 2025.
If the aid recipient fails to submit a report, does not spend funds during the required timeframe, or
spends funds on an ineligible project, they must repay the funds. Revenue may also suspend payments
to these entities.
Detailed information can be found in 477A.35, Subd 6 and 477A.36, Subd. 6.
What happens to the aid funds if they are returned or recaptured?
If returned, aid funds would be deposited with one or more of Minnesota Housing’s programs. This
includes Family Homeless Prevention and Assistance Program (FHPAP), the Economic Development
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and Housing Challenge Program (Challenge), and the Workforce and Affordable Homeownership
Development Program as specified in law.
Will Minnesota Housing be monitoring the use of housing aid prior to the reporting deadline
for cities and counties?
Minnesota Housing will not require reporting prior to December 1, 2025, when the first report is due
from cities and counties.
However, Minnesota Housing will be checking in with local governments to offer support and track
spending progress.
Definitions and Clarifications
What is a Tier I and a Tier II city?
The terms Tier I and Tier II are used to determine cities that will receive aid.
A Tier I city is a statutory or home rule charter city that is a city of the first, second or third class. For
LAHA, it must be in a metropolitan county. For SAHA, it must not be in a metropolitan county. Read the
full definition of cities and classes.
A Tier II city is a statutory or home rule charter city that is a city of the fourth class and not located in a
metropolitan county (see subd. 4).
The bill requires aid be spent on a qualified project. What is the definition of spent? If a
project is started but not completed, are the funds considered to be spent?
The definition of spent was clarified in 2024 session law. Funds must be committed to a qualifying
project by December 31 in the third year following the year the aid was received (for aid received in
2024, this would be December 31, 2027) and expended by December 31 the fourth year after the aid
was received.
Is SAHA funding from appropriations ongoing?
The following table reflects amounts appropriated to SAHA through the fiscal year ending in 2027. The
appropriations are set at a base level with one-time increases in the first two years.
SAHA Appropriations Fiscal Year Ending
6/30/24
FYE
6/30/2025
FYE
6/30/2026
FYE 2027 and each
year after
To the 87 counties in
Minnesota
$ 13,050,000 $ 13,050,000 $ 5,550,000 $ 5,550,000
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SAHA Appropriations Fiscal Year Ending
6/30/24
FYE
6/30/2025
FYE
6/30/2026
FYE 2027 and each
year after
To the 37 cities in
Greater Minnesota
$ 4,500,000 $ 4,500,000 $ 2,000,000 $ 2,000,000
To the 7 eligible Tribal
Nations
$ 2,700,000 $ 2,700,000 $ 1,200,000 $ 1,200,000
To Minnesota Housing
for the Tier II Cities
Grants program
$ 2,250,000 $ 2,250,000 $ 1,250,000 $ 1,250,000
TOTAL $ 22,500,000 $ 22,500,000 $ 10,000,000 $ 10,000,000
How were the funding allocations determined?
Revenue determined allocations based on distribution formulas.
For counties and cities, these formulas consider cost -burdened households and total population. For
Tribal Nations, funds are distributed to Tribes that apply by the deadline.
Will Tier II cities receive a disbursement of SAHA?
Tier II cities will not receive a direct disbursement of SAHA.
However, the Legislature appropriated $4.5 million for Tier II cities . Funds will be available as grants in
the competitive process for a range of rental, homeownership and housing stability activities with a
minimum award size of $25,000.
Minnesota Housing will be preparing a program guide, a list of eligible Tier II cities and a request for
proposals (RFP) in 2024.
Qualifying Projects and Expenses
What portion of the housing aid funds can be used for staffing costs and administrative
costs?
Administrative costs and staffing costs are not listed as an eligible project . Therefore, the funds are not
able to be used for these costs.
If funds are used for Emergency Rental Assistance (ERA), what portion can be used for
navigation, services and administration related to ERA provision and programs?
Navigation and services related to providing ERA are eligible aid expenses. However, there is no
allowance for administrative costs using housing aids. .
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If aid funds are used for demolition or removal of existing structures, does affordable
housing need to be constructed on the site?
Yes. The expense must be tied to affordable housing for eligible households. Demolition or clearing of
land alone, including for speculative or future development of eligible housing, is not an eligible
project.
Can funds be used for planning activities (soft costs) for new construction and preservation
affordable housing projects?
Soft costs are only eligible as part of a qualifying project. General or speculative planning activities
unrelated to a qualifying project are not an allowed use of funds.
Can funds be used for downpayment assistance for homebuyers?
Qualifying projects include homeownership projects for income-eligible households.
Downpayment assistance may be provided as permanent financing or gap financing, depending on
program requirements established by the aid recipient.
Can the housing aid funds immediately be deposited into a Local Housing Trust Fund?
Funds can be held in a local housing trust fund while recipients determine if a project qualifies.
Funds must be spent on a qualifying project by the deadline in statute . Funds remaining in a local
housing trust fund past the deadline will only be considered “spent” on a qualifying project if the aid
recipient demonstrates that it could not spend funds by the deadline due to factors outside their
control.
Can funds be transferred to a county or regional Housing and Redevelopment Authority
(HRA) if they are spent on qualifying projects?
Yes. Funds can be transferred to a county or regional HRA if they are spent on qualifying projects.
The original aid recipient is still responsible for all requirements related to the funds, including
reporting.
Can funds be used for developing new infrastructure, such as utilities and roads, or
upgrading existing infrastructure if the infrastructure serves affordable housing?
Potentially. The infrastructure would need to be part of a qualifying project. All requirements related
to project type, income affordability and other accessible requirements would also need to be met.
Speculative site and infrastructure development would not be eligible.
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Infrastructure development or improvement for sites that include development uses not allowed
under this aid program would not be eligible.
What are some examples of expenditures ineligible for housing aid?
Housing aid should be used for projects that create and preserve affordable housing or stabilize the
housing of low-income people. This does not include:
•Conducting a housing or zoning study
•Costs to create a Housing Improvement Area
•Staff and services related to general housing quality and licensure, such as code enforcement
•Staff and administrative costs for operation of an HRA or county or city housing department
•Commercial, industrial or public space development projects
•Projects located outside of Minnesota
Housing aid received by Greater Minnesota counties, cities and Tribes in 2023 cannot be used for
emergency shelter. However, for aid received in 2024 and after, shelter is an eligible project type.
If funds are used to support a nonprofit organization, do they need to be tracked to
qualifying projects?
Housing aid can be used to provide financial support to a nonprofit affordable housing provider in their
mission to provide safe, dignified, affordable and supportive housing.
If aid is used in this manner, providing support to the eligible nonprofit is the qualifying project. The aid
recipient should document that the funds were used to support the organization’s mission.
Can a county or city use other state or federal funding as part of a development fin ancing
package that includes housing aid funds?
Yes. State and federal funding can be used as a part of the project’s development financing package.
If the funds are held in a Local Housing Trust Fund, can they be used as a match in Minnesota
Housing’s Local Housing Trust Funds Matching Grants program?
No. Housing aid cannot be used as matching funds in the Local Housing Trust Fund Grants program.
Only new public revenue, defined as local income committed to the Local Housing Trust Fund on or
after June 29, 2021, can be used as matching funds.
Can a county use its funds within cities that have also received hous ing aid?
Yes. Counties can spend the funds on qualifying projects anywhere in the county, including cities that
directly receive aid. Regional collaboration is encouraged to maximize the aid’s impact.
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A county receiving aid should consult with the cities where projects are planned (see subd. 7).
Can aid funds be used to reimburse prior expenditures on eligible projects?
No. An aid recipient may not use aid money to reimburse itself for prior expenditures.
Will the aid funds trigger other state funding requirements, such as prevailing wage?
For questions on labor and wage requirements, contact the Department of Labor and Industry.
For questions on the use of sales tax proceeds, contact the Department of Revenue.
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