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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 02-21-2002MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY February 21, 2002 PRESENT: Chair Susan Henderson, Commissioners Steve Ludovissie, Tim Bildsoe, and Leon Michlitsch ABSENT: Commissioner Sandy Hewitt STAFF PRESENT: Executive Director Anne Hurlburt, Housing Manager Jim Barnes, HRA Specialist Melissa Carnicelli and Office Support Representative Barb Peterson OTHERS PRESENT: Jodi Boedigheimer, Grace Management, Michael Vraa, HOME Line, Patrick Rowan, PRISM Express, Dave Murphy, Family Hope, Larry Nelson, YMCA 1. CALL TO ORDER A meeting of the Plymouth Housing and Redevelopment Authority was called to order by Chair Henderson on February 21, 2002, at 7:04 p.m. 2. APPROVAL OF MINUTES MOTION by Commissioner Bildsoe, seconded by Commissioner Michlitsch, to recommend approval of the December 20, 2001 minutes. Vote. 4 Ayes. Motion approved unanimously. 3. CONSENT AGENDA Motion was made by Commissioner Michlitsch, seconded by Commissioner Bildsoe, approving the Consent Agenda to include the following items: A. Plymouth Towne Square Monthly Reports B. Request Leverage Funds for Harvest Hills Development/MHFA Application C. IOCP MHFA Application. Provide letter of support for application involving one of the County Road 101 project homes. D. Approve the Section 8 Management Assessment Program (SEMAP) Certification Submission. Vote. 4 Ayes. Motion adopted unanimously. Plymouth Housing and Redevelopment Authority February 21, 2001 Page 2 4A. City of Plymouth. Public hearing on allocation of funds for the 2002 Community Development Block Grant Program. HRA Specialist Carnicelli explained the process of the public hearing. She stated that the HRA conducts the public hearing but the City of Plymouth approves the CDBG Action Plan and final funding. Staff recommended little to no change to the funding levels in the First Time Homebuyer and Housing Rehabilitation loan programs with a decrease in the funding for administration because there will be sufficient unused funds from 2001 to cover administrative costs. Staff recommended increasing the funding for Affordable Housing Development to $107,850. These funds would be available year round on a pipeline basis. HRA Specialist Carnicelli explained the public services” activities, and she stated that the HRA staff designed a new application and instruction form that clarified the evaluation criteria to both the applicant and the staff. The application was sent to 13 agencies. Applications were received from seven organizations, all of which are currently receiving CDBG funding. Unfortunately, there is not enough money to fund all of them. The applications were ranked by the criteria listed on the form. HRA Specialist Carnicelli stated that the Greater Minneapolis Day Care is not represented tonight due to illness, but expressed their gratitude to the HRA and City for their continued support. Chair Henderson opened the Public Hearing. Chair Henderson introduced Michael Vraa, who represented HOME-Line. Mr. Vraa stated that HOME Line talks with thousands of tenants every year regarding their rights. They also go to high schools and present seminars about becoming successful renters. He said they were funded last year and appreciate the continued funding. Chair Henderson asked if the program is citywide. Mr. Vraa stated that it is statewide. Chair Henderson introduced Larry Nelson, representing YMCA. Mr. Nelson said they are here tonight to request $7500 in support for the Point Northwest program. He explained that they have also started a transitional living program for youth ages 16-20, which provides scattered site housing in the area. He thanked the Board for their support. Chair Henderson introduced Paul Murphy, who represents Family Hope. He stated that they are the only group not on the list to receive funding. He requested altering the funding to include their application. Their request was for $8000. He said they have worked with Plymouth since the early 80’s and their office is on Fernbrook Avenue North in Plymouth. They provide services for at-risk teens, including transportation to and from the program. He provided examples of the types of situations they handle such as suicide, compulsive lying, eating disorders, etc. He said they do not collect any data when first meeting with teens because of confidentiality reasons. They do require data from the parents after the teen has been attending a few sessions. Between Nov. 1, 2001 and Feb 6, 2002 the program served 22 teens from Plymouth. From twenty households they have received 12 data forms back. Of those 12, 8 are income eligible. Mr. Murphy apologized for not filling out the line on the application form requiring biographies of the staff and stated that they have four full time staff members. They try to keep teens from ending up in juvenile homes, as that is very costly. He suggested putting the 15% we are holding back into their program. Commissioner Bildsoe stated that he was disappointed to see that Family Hope was not funded and recommended that the HRA do so at this time. Commissioner Ludovissie asked about the concerns staff had regarding Family Hope. HRA Specialist Carnicelli stated that Plymouth Housing and Redevelopment Authority February 21, 2001 Page 3 it is the lag time they incur in providing us the reporting information we need to ensure compliance with the CDBG regulations. When we report data at the end of the year we don’t have all their statistics. Mr. Murphy said the problem is the confidentiality of the program. Commissioner Ludovissie asked about the penalties incurred if the money is not all used and HRA Specialist Carnicelli stated Family Hope would need to return the funds. Mr. Murphy stated that his experience is that the program is funded at the back end. HRA Specialist Carnicelli said that Family Hope does submit payments for costs incurred throughout the year. Chair Henderson introduced Patrick Rowan representing PRISM. He thanked the Board for the funding given in the past. Their funds are used primarily for driving people to doctors appointments, etc. Funding drivers is their biggest expenditure. Chair Henderson closed the public hearing. Commissioner Ludovissie inquired about spending the reserve to supplement Family Hope’s request. HRA Specialist Carnicelli said the HRA has never allocated the maximum allowed for public services. When HUD reviews the year end report they are looking to verify that the HRA did not allocate more than 15% of actual CDBG funds spent towards social services. Chair Henderson asked how much is usually unexpended. HRA Specialist Carnicelli stated that it varies quite a bit. HUD does not want the HRA or subreciepiants to carry large balances. Commissioner Bildsoe made a motion to direct staff to review expenditures and fund Family Hope Services. Receiving no second the motion died. Commissioner Ludovissie stated that he relies on staff and if staff feels that because of the timing issue they should not fund them he is fine with their decision. Chair Henderson asked what is different this year with the funding than last year. HRA Specialist Carnicelli said that TRAILS did not receive any funding last year, but they will need additional funds this year. GMDCA had carryover from 2000, but they will not have any carryover at the end of the FY 2001. Commissioner Ludovissie asked if Family Hope Services would accept a smaller amount of funding. Housing Manager Barnes said the Board can look at adding the 15% of program income but there is risk in doing so. Director Hurlburt said that if the Board wishes to see other priorities set rather than the ones recommended in the report, they could change them. Commissioner Bildsoe said he would rather take the money from other organizations. HRA Specialist Carnicelli asked for a recommendation. Commissioner Bildsoe made a motion to take $4000 out of the Affordable Housing Development account. Chair Henderson seconded. Commissioner Ludovissie suggested that we look at Family Hope’s reporting status again in the future. Commissioner Ludovissie expressed his concern that the Board will have to make funding cuts or zero funding recommendations in the future and this should not set a precedent. MOTION by Commissioner Michlitsch, seconded by Commissioner Ludovissie, recommending that the Board adopt the attached resolution, as once amended, to include adding $4000 for Family Hope Services and reducing the Affordable Housing Development activity to $103,850, providing a recommendation to the City Council for allocation of the 2002 CDBG program funding. Vote. 4 Ayes Plymouth Housing and Redevelopment Authority February 21, 2001 Page 4 4B. Plymouth Towne Square. Request for approval and financial assistance for kitchen cabinets. The Resident Board at Plymouth Towne Square requested assistance for three new cabinets in the common kitchen. Housing Manager Barnes explained that the cabinets will be a permanent part of the building and asked if the Board wanted them to be professionally installed. MOTION by Commissioner Bildsoe, seconded by Commissioner Michlitsch recommending that three kitchen cabinets be professionally installed at Plymouth Towne Square, not to exceed 1000.00. Vote. 4 Ayes. Motion approved unanimously. 4C. Plymouth Towne Square Rents, Rent Subsidies, Budget, Occupancy Policy and Waiting List Director Hurlburt said that the staff recommendation was to build on the discussion that was held last July. At that time the Board agreed with staff recommendations to move “full rents” more in line with Section 8 “fair market rents”. The Board also agreed to move toward one level of subsidy for all tenants, and to consider utilities in tenant rent calculations. Director Hurlburt stated that since Grace Management has now taken over the management of Plymouth Towne Square, the data from the July report has been updated and they are ready to make recommendations to the Board on the issues addressed in that report. Director Hurlburt said that she and Housing Manager Barnes spoke with Commissioner Hewitt, who was unable to attend this meeting, and have her comments to share with the Board. Commissioner Bildsoe stated that after reading the report he was unsure what the mission for Plymouth Towne Square is and what are we trying to accomplish. He said that once he has a clearer understanding it would answer the question about how to structure the rents. Chair Henderson asked if there is a Mission Statement for Plymouth Towne Square. Director Hurlburt said there is not a formal statement but that the mission was clearly to provide affordable housing for seniors. That led to preferences for low and very low income tenants. Director Hurlburt said that when the subsidies were first set, some units were rented to people who could not afford the rent at their assigned level of subsidy. Many of their families were willing to pick up the difference above the subsidy level, so the Board allowed residents with very low incomes to move in and only receive a low subsidy as long as they did not pay more than 40% of their income toward rent. Commissioner Ludovissie said that at the time Plymouth Towne Square was built they could have used a subsidized program through the federal government, but the HRA chose to get away from the federal regulations to assist the elderly people living in Plymouth. Commissioner Ludovissie stated that the Board also has an obligation to the taxpayers to keep the rents in line with reality while making them affordable to the seniors. Discussion was held regarding singles living in two bedroom units. Director Hurlburt said when this issue has previously been brought up before the Board, they chose not to require a single person, residing in a two-bedroom unit to move into a one-bedroom unit. Director Hurlburt stated Plymouth Housing and Redevelopment Authority February 21, 2001 Page 5 that the HRA may have been fairly naïve about managing an apartment building, and were favoring the tenants rather than making sound business decisions. The Board also felt if rents were raised, we would have to raise the taxes of residents of Plymouth. She explained that rents do not need to be raised to generate the income we need, but we need to make sure the people living there are paying market rate if they can afford it. Market rate does not determine the amount of subsidy for the project. Director Hurlburt stated that Commissioner Hewitt had indicated that she believed Plymouth Towne Square should remain a subsidized building. If the building is opened to market rate rents, it may be perceived as abandonment of the goal to provide affordable housing. Commissioner Ludovissie said that local control was very important at the time the building was built. He stated that subsidizing the building has always been of extreme importance. The question is how heavily subsidized it needs to be. Director Hurlburt pointed out that the subsidies have not been raised either. Commissioner Bildsoe stated there are some people living at Plymouth Towne Square that should not, because they have substantial assets. Chair Henderson suggested that the HRA should provide housing for seniors that takes into account all of their income. All occupants are under 80% of median income right now. Commissioner Bildsoe said that people with such a large amount of assets should not be living in a subsidized building. Commissioner Ludovissie said he wouldn’t have a problem with 10% of units being at market rate. Director Hurlburt said the ability to use a Plymouth residency preference is extremely limited. Chair Henderson stated that if people can afford market rate rents, they should live in a senior market rate apartment. Director Hurlburt said that there are a lot more options for seniors living in Plymouth at this time than when Plymouth Towne Square was built. Director Hurlburt said that the Board needs to address the question of resident’s assets. She said that usually subsidies are not geared toward people who have large amounts of assets, however, a large percentage of the residents living at Plymouth Towne Square have considerable assets. Director Hurlburt questioned why we would subsidize rents with property taxes so the residents can keep their assets to use toward nursing home costs or leave to their families. Commissioner Ludovissie said he struggled with the 33% versus 40% of household incomes to use for calculating rents. Director Hurlburt said that is why we need to take the assets into account when figuring tenant rents. Commissioner Ludovissie said we need to make moves at this time to better direct the property from a financial standpoint for the future. Housing Manager Barnes said we need to look at the amount of subsidy we want to use and how we are going to treat assets. Director Hurlburt suggested that the Board go through the recommendations made by staff. 1. Adopt new “full rents” for PTS consistent with Section 8 FMRs (Option 2.) Director Hurlburt said rents are below the market level, especially for the two bedroom units. She said that in July we talked about using the Section 8 fair market rents, which is still a modest rent for Plymouth. She also indicated that Section 8 does not recognize differences in size of apartments but goes by number of bedrooms. Staff prepared two options. Director Hurlburt said the closer we get to the market rate the better. If tenants don’t cooperate with income verification they would need to pay full market rent. Chair Henderson asked if we could make a distinction Plymouth Housing and Redevelopment Authority February 21, 2001 Page 6 between the bedroom sizes for Section 8. Director Hurlburt said we can, however, all one bedroom units would have to be below the FMR of $782. Commissioner Ludovissie asked if it would affect our occupancy criteria. Director Hurlburt said it wouldn’t. Housing Manager Barnes said that even if we chose to use project based Section 8 subsidies, which means the voucher would stay with the building, it would be treated the same. As HUD adjusts their FMR’s so would Plymouth Towne Square on a regular basis. Commissioner Bildsoe was in favor of Option 2. Housing Manager Barnes stated that Commissioner Hewitt was also in favor of Section 8 Fair Market Rents. The Board decided to select option 2, which would adjust Section 8 FMR’s, currently $782 for one bedrooms and $1,001 for two bedrooms after utility allowances. 2. Adopt new minimum rents of $200 for one-bedroom apartments and $300 for two bedroom apartments (Option 2.) Minimum rent means the absolute lowest rent the tenant could pay. Director Hurlburt recommends not distinguishing between apartment sizes but going by number of bedrooms. Under Option 1 all tenants would pay $150 for a one bedroom and $250 for a two bedroom. Option 2 would raise the amounts to $200 and $300 respectively. Director Hurlburt said the minimums affect the cost to subsidize Plymouth Towne Square and it affects the rents of the people paying the lowest amounts. Only one current tenant would have to pay the full $50 increase. She also said that the increase in the two bedroom units could be offset by people moving into a one-bedroom unit. Chair Henderson asked how that is determined. If the income calculation shows the tenant could only pay $150, they would have to pay $200 if the minimum is raised. These tenants would be good candidates for Section 8. Chair Henderson asked what a Section 8 tenant would pay. Director Hurlburt said it would be 30% of income including utilities, and assets would only be counted at 2%, with a minimum payment of $35. Director Hurlburt said that staff recommended Option 2 and that was also the consensus of the Board. 3. Adopt 33% as the “affordability standard” for calculating rent for all tenants. Director Hurlburt said the usual affordability standard is that people should pay 30% of their income for housing costs. The HRA varied from that when they set up Plymouth Towne Square. 30% is the Federal standard, and 40% is the top end that we can probably go in keeping with industry standards. At 33%, once utilities are calculated, even the very low income people would come out about even. A number of residents get decreases at 33%. Only two would end up paying over 40% of their income. Some are singles in two bedroom units that could move to a one bedroom. Staff recommended 33% in keeping with the philosophy of providing affordable housing. Housing Manager Barnes said it becomes an issue with the very lowest income levels. Commissioner Ludovissie said he is concerned with the concentration of very low income tenants in the building. He feels that a senior could adapt to a 40% increase easier than a family could, but he would not want to go over 40%. Director Hurlburt said at 33% the HRA will subsidize more tenants at a deeper level. She said if we could get even 10 tenants on Section 8 over a period of time, we would make up the difference in subsidy. Housing Manager Barnes explained the proposed use of unallocated reserves and the tax levy to subsidize PTS. Chair Henderson asked if these are capital improvement reserves. Housing Manager Barnes said this is excess money over a period of time that has accrued. Chair Henderson asked where the revenues came from. Director Hurlburt said they made money in the earlier years when operating expenses were lower. Plymouth Housing and Redevelopment Authority February 21, 2001 Page 7 Commissioner Bildsoe asked about the relationship of rent decreases and assets. Commissioner Michlitsch said he feels 33% would be good but we should start taking the assets into account. Commissioner Ludovissie would like 35% and also look at the assets. The other commissioners were in favor of that. Chair Henderson asked if by the next meeting staff could look at the rents based on what decision is made for the asset allocation. Director Hurlburt said that could be done but cautioned there were many discrepancies that came to light when Grace Management took over. Commissioner Bildsoe inquired as to when the records on each person will be checked. Director Hurlburt said they are proposing to review rents for all of the residents at one time rather than waiting for their annual recertification time. The Board came to the consensus that we should adopt a policy of using 35% of income as the affordability standard. 4. Implement the new rent and subsidy structure immediately for new tenants, and over a three-month period beginning August 1, 2002 for existing tenants. Director Hurlburt stated that staff is suggesting recertification for a third of the tenants at a time and doing it by lottery, or by floor. Commissioner Ludovissie said he does not agree with using a lottery and thinks it needs to be implemented across the board at once. Commissioner Bildsoe had a concern that the residents who are first will convey the information to other tenants and it may not fit their situation. Housing Manager Barnes suggested addressing the residents in person to tell them what is going to happen, and then take two months or so to do the recertifications and implement the changes for all residents on the same date. Commissioner Ludovissie said we need to give the tenants enough lead-time to prepare financially or to move. He suggested that we try for September 1, 2002 with everyone having the same effective date. The Board agreed with this recommendation. 5. Give staff direction on the preferred approach to treatment of tenant assets in rent calculations. Adopt, at a minimum, a standard of 3% of assets to be treated as income to limit financial impacts on PTS and residents. Consider raising the standard to 5%. Director Hurlburt recommended changing the policy to count at least 3% of assets as income. Right now we are following the Section 8 guidelines and they are at 2%. Commissioner Bildsoe said he thinks it should be at least 5%. Chair Henderson said it should be more than that. Housing Manager Barnes said the rationale for using a lower percentage is that you don’t know what the person is going to need their assets for in the future. Jodi Boedigheimer said we don’t require review of tax returns at this time, but suggested we should. Commissioner Bildsoe said real estate should be included as assets. Housing Manager Barnes suggested implementing the increase gradually, such as 5% this year and 7% next year. The Board decided that tax returns should be used as verifications and if they are not willing to share that information they have the option to pay market rent or move. They also decided to implement a 5% standard and review it annually. 6. Direct staff to draft a policy requiring singles occupying two bedroom units to move into one-bedroom units, as they become available. Director Hurlburt asked how the Board felt about helping people move, or such things as paying to have their phones hooked up or utility charges. She suggested using a lottery for the people who are there now to determine the order they move. Chair Henderson suggested letting people sign up. Commissioner Ludovissie asked if the Board would want to put a cap on the amount of Plymouth Housing and Redevelopment Authority February 21, 2001 Page 8 financial assistance we would provide. Director Hurlburt also emphasized the fact that people need to know they can have a roommate and stay in the two bedroom, as long as they meet the age guideline. Commissioner Bildsoe said we need to have two people in two bedrooms to meet the affordable housing goal. The Board agreed that we should provide assistance in helping residents move. 7. Review the waiting list preferences and give staff direction on any changes desired. Consider a preference for tenants with incomes supporting full market rents. Director Hurlburt said it will be a long time before we have a problem with one bedroom vacancies if singles in two bedrooms are required to move. She said we may not need to open the waiting list immediately to fill the current two bedroom vacancy if the rent structure is changed. Before opening the waiting list for two bedrooms, we need to make sure the preferences are clear. Commissioner Ludovissie suggested tabling this item until a future date when the rent structure is finalized. 8. Direct staff to prepare a plan to open the waiting list for 2-person households only. The Board decided not to open the waiting list at this time but to defer this discussion until a future meeting. 9. Use PTS unallocated reserves to balance the 2002 budget and phase in the new rent subsidy policies. Director Hurlburt said the budget will need to be recalculated based on the decisions the HRA made tonight. She recommended that changes in expenses come out of reserves and would not propose a tax increase soon. Commissioner Ludovissie said the building is aging and expenses will increase. Housing Manager Barnes said we need to be cautious with the reserves and will recalculate the figures and present them at the March board meeting. Director Hurlburt stated that this concludes discussion of the nine items on this staff report. She said that staff will be revising the Admission and Occupancy Handbook for Plymouth Towne Square and presenting the revisions at the March board meeting. Plymouth Housing and Redevelopment Authority February 21, 2001 Page 9 4D. Plymouth Towne Square 2002 Revised Budget Director Hurlburt stated the recommended transfer from reserves to subsidize rents was based on the 33% scenario using 3% of assets. Director Hurlburt suggested waiting until the next meeting to discuss this after the recalculations are done. This item was tabled until March. 4E. Proposed Housing Forum Housing Manager Barnes said March 19, 2002 is the date for the Housing Forum. Invitations were mailed to over 300 stakeholders. OTHER BUSINESS ANNUAL ELECTION OF OFFICERS MOTION by Commissioner Michlitsch, seconded by Commissioner Ludovissie, that we retain the same officers for the coming year. Vote. 4 Ayes. Meeting adjourned at 9:45. HRA/Minutes/2/21/02