HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 10-28-2010APPROVED MINUTES
PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY
October 28, 2010
PRESENT: Vice Chair Paul Caryotakis, Commissioners Steve Ludovissie, David Miller and
Bob Stein
ABSENT: Chairman Jeff Kulaszewicz
STAFF PRESENT: Housing Program Manager Jim Barnes, Support Services Manager Denise
Whalen, Community Development Director Steve Juetten and Office Support Representative
Janice Bergstrom
OTHER: Grace Management Representative Jody Boedigheimer
1. CALL TO ORDER
Vice Chair Caryotakis called the Plymouth Housing and Redevelopment Authority meeting to
order at 7:00 P.M.
Terry Jaffoni, 17530 22"d Avenue N., introduced herself and said she is running for City Council
at Large. Ms. Jaffoni gave her background, and wanted to learn more about the work of the
HRA Board.
2. CONSENT AGENDA
A. Approve HRA Meeting Minutes from September 23, 2010
B. Plymouth Towne Square. Accept Monthly Housing Report (September, 2010)
C. Vicksburg Crossing. Accept Monthly Housing Report (September, 20 10)
D. Change November meeting date to the third Thursday (November 18, 20 10)
MOTION by Commissioner Ludovissie, seconded by Commissioner Miller. Vote. 4 Ayes.
MOTION approved unanimously.
3. NEW BUSINESS
A. Vicksburg Crossing. Marketing Report
Vice Chair Caryotakis introduced Grace Management Representative Jody Bodigheimer.
Grace Management Representative Boedigheimer said there will be six move -ins this weekend.
She said they have deposits on every apartment resulting in a valid waiting list. Grace
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 2
Management Representative Bodigheimer said they anticipate entering the new year with a full
building. It has been a good fall with a typical turnout for the open house, lots of tours, and
interest. Grace Management Representative Bodigheimer said we have moved past the "gawker
stage" and now interested people are coming in looking at 3-6 months out. She said the 92-95%
occupancy zone is the goal for 2011. Grace Management Representative Bodigheimer stated the
open houses seem to be most successful as opposed to the costlier big events. She said they have
scaled back on some event planning dollars to maximum what we are doing and how we do it.
Commissioner Stein referenced the Senior Housing Research Report which indicates how bad
independent living occupancy is, but the Twin Cities is rated number one and growing;
Commissioner Stein questioned why.
Grace Management Representative Bodigheimer said she did not know the answer, but noted
that Minneapolis is generally strong in a lot of markets and overall economically has not been hit
as hard as other cities. She added that proposed new development is an indicator Minneapolis
will stay strong.
Commissioner Ludovissie congratulated Grace Management for getting this turned around, and
said it is good to hear that Plymouth Towne Square will be at 100% occupancy.
B. Plymouth Towne Square. Amend the 2010 Operating Budget
Vice Chair Caryotakis introduced Housing Manager Barnes who gave an overview of the staff
report.
Vice Chair Caryotakis asked how frequently the reserve has been adjusted in the past, and if
there is concern about the adequacies of the reserves.
Housing Manager Barnes said there is not a concern withholding the contribution of $20,000 -
25,000 into the reserve account for the remainder of the year. Housing Manager Barnes said
that in 2011 there will be a replacement reserve analysis updating Plymouth Towne Square and
one created for Vicksburg Crossing to ensure we are in line with today's economy and budgeting
properly for these reserves.
MOTION by Commissioner Ludovissie, seconded by Commissioner Stein, to approve the
Plymouth Towne Square 2010 operating budget amendment. Vote. 4 Ayes. MOTION
approved.
C. Plymouth Towne Square. Review and Approve the 2011 Operating Budget
Vice Chair Caryotakis introduced Housing Manager Barnes who gave an overview of the staff
report. He said staff is recommending a change in the way rents are calculated. Housing
Manager Barnes said in January the HRA Board did hear comments from residents of Plymouth
Towne Square regarding how rents are calculated. He explained that there is a group of
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 3
individuals who do not receive an increase unless their income changes. Staff has reviewed
options to make the rents more equitable for all residents of Plymouth Towne Square. He said
the proposal is to establish a base rent for each existing household of Plymouth Towne Square
from what they are currently paying in monthly rent. If there is an increase, everybody would
receive an equal increase based on their established base rent. For new tenants, they are
proposing the percentage of monthly income be changed from 35% to 37%, which would
become their base rent. Housing Manager Barnes said if residents have an increase or decrease
of 20% in income we would review their rent and re-establish a base rent for them. The
proposed changes would be effective January 1, 2011 which would become the renewal date for
tenants.
Vice Chair Caryotakis said if a resident has a decrease in income they would let you know, and
asked if there would be a periodic review of income to determine increases in income.
Housing Manager Barnes said there will be annual reviews on anniversary dates, and it is stated
in the lease to notify us of any income change.
Vice Chair Caryotakis said he presumed the minimum rent will stay in place, if income drops
below the minimum rents.
Housing Manager Barnes said staff is proposing minimum rents stay in place.
Executive Director Juetten added that new residents would have the 37% of income base
established. If the income were below the minimum, they would still be required to pay the
same (new) minimum.
Commissioner Ludovissie asked how the lease administration operates.
Housing Manager Barnes said the lease is structured on a month-to-month lease.
Commissioner Miller asked if staff looked at a decrease in rent prior to January if a resident had
a decrease in income, for example from a seasonal job. He asked if the increase and/or decrease
would be effective the following month.
Housing Manager Barnes explained that if income swings more than 20% either way that the
resident should notify staff and rent would be recalculated for the following month. He added
that increases established by the HRA Board as part of the budgetary process would be effective
January 1.
Commissioner Stein asked if income is determined on an annual basis through tax returns, W -2's
or W -4's.
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 4
Housing Manager Barnes cited various income sources such as Social Security, award letters,
checking account statements, investment income statements, W-2 or pay stubs. He said
additional verification may come from a third party verification.
Commissioner Stein said a resident with a decrease in income will notify staff right away, but
due to human nature he said he can't see someone coming in to say they have an extra $500 or
1,000 from a seasonal job and owe more money for rent. Commissioner Stein said he can't
believe everyone would be totally honest and bring in statements from their investment banker
every year. Commissioner Stein suggested using an income tax return which would be based on
documentation, and less on the honor system. He said this would be a more equitable system to
have firm income verification at least once a year.
Housing Manager Barnes said they do collect tax returns, and added that information does flow
in this 100 -unit building. He said it is the nature of individuals who live there to look out for one
another. He said it is not fool proof in any of our programs, and added that if there is a violation
a resident risks having their lease terminated.
Commissioner Ludovissie asked if there are similar guidelines to the Section 8 program, such as
allowing adjustments for medical expenses.
Housing Manager Barnes answered affirmatively. He concluded his review of the staff report.
Commissioner Ludovissie said the proposal sounds like a good solution to dealing with the rent
issue.
Vice Chair Caryotakis introduced Virginia Klevorn, 4755 Kingsview Lane N. who said she was
speaking on behalf of a group of residents who pay the minimum rent. Ms. Klevorn said she met
with staff in January with concerns that the rent is a hardship and burden for many. Ms. Klevorn
said she had statistics for 17 of 20 units, and is speaking for these residents because they have
limited language skills and are elderly. She said the minimum rent established for 2010 took
them to 44% - 53% of their income, which left the citizens living on less than $5- $10 per day for
their disposable income. She said if they own a car, the $45 for garage rent would use four days
of their disposable income. Ms. Klevorn stated these residents have very little per month to live
on. Ms. Klevorn said when moving in they understood they would be paying a minimum rent of
300 or 35% of their income, whichever was greater. This rent was constant from 1994 to 2006,
and Ms. Klevorn reviewed the increases for two-bedroom units which began in 2007, ranging
from $400 - $490. Ms. Klevorn said this is a substantial increase for people who have no Social
Security supplemental increase nor Minnesota State Assistance increase for two years. Ms.
Klevorn said the residents are asking that 2% for everyone does not include the fact that their
rents remained constant and the minimum rent is the only one that went up last year. The
poorest in the building are the only ones who received a rent increase in 2010. Ms. Klevorn said
in January the residents asked that you reduce their rent and then share the $10,000 burden with
everyone in the building, not just them. Ms. Klevorn said the residents are asking that their rent
revert back to the 2006 amount and apply the 2% increase to everyone. She said the hardship is
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 5
overwhelming for some families at 53% and some people have to choose whether to eat or
whether to pay the rent. Ms. Klevorn said the residents understand the rent needs to be raised,
and that new residents should be informed.
Commissioner Miller asked why the residents requested to go back to 2006 rent as opposed to
2009.
Ms. Klevorn said the 2006 rent would take them to the 35% threshold.
Commissioner Miller said the residents have been paying the increased rent and never came
before the Board. He said he would have a little more understanding if they had questioned it or
asked for help.
Ms. Klevorn explained that this is a population not fluent in English even though they are highly
educated and intelligent economists, engineers, and college professors. Their cultural upbringing
is not one that comes before city authorities and questions. The American culture and theirs are
not the same, so coming before the Board is not something they would have thought about. It is
now that the rent is so unbearable and so burdensome for many of them, that even though some
who can deal with it at today's rate, are feeling the need to speak out for those who cannot.
Vice Chair Caryotakis asked how the current minimum rent compares to reasonable market rents
on a two-bedroom unit within our community.
Executive Director Juetten stated that the HUD established fair market rents for existing housing
in Minneapolis and St. Paul for a one -bedroom is $761/month and a two-bedroom is
924/month. The Metropolitan Council's Livable Communities Act established three criteria for
2010. The one/two bedroom at 30% of area median income is $473/$567; at 50% of median
income the one/two bedroom is $787/$945; at 60% of median income the one/two bedroom is
946/$1,134.
Ms. Klevorn asked if these are 2010 numbers for the fair market rents.
Executive Director Juetten said he was using 2011 numbers for HUD but 2010 for Livable
Communities Act.
Ms. Klevorn said she referenced this report in January and was told it was not applicable.
Commissioner Ludovissie offered some background and explained Plymouth Towne Square is a
city -sponsored development and does not receive outside financing. Therefore, the residents of
the building are the primary source of income. Commissioner Ludovissie said shortfalls can fall
on the taxpayers of the city, and these are critical issues for the success of the development and
for everyone who lives at Plymouth Towne Square. Commissioner Ludovissie said this
development was built to satisfy the needs of as many people as effectively as we could, but it
still has to sustain itself and meet its expenses. Discussing $400 rents even for a small part of the
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 6
population puts an economic stress on others who live there. He said at some point decisions
have to be made on both sides, and the HRA Board has made a proposal to deal with this as
equitably as possible, and the residents may have to decide whether this is the right place for
them to live.
Ms. Klevorn asked Commissioner Ludovissie to suggest another building in Plymouth where
these residents could live.
Commissioner Ludovissie said we are trying to do the best we can on a city basis and can't
provide housing for all the needs that may exist.
Ms. Klevorn asked Housing Manager Barnes if Plymouth Towne Square had a net income of
121,000 for the Year 2010.
Housing Manager Barnes said the profit/loss through September, 2010 indicates a shortfall of
30,904.
Vice Chair Caryotakis added that we have to pay back the debt service.
Ms. Klevorn said the building has reserves of $1.4 million.
Housing Manager Barnes clarified that HRA's overall reserves have a balance of $1.4 million.
Ms. Klevorn asked if money was lost in the previous year also. She said her recollection is that
money was not lost in the previous year.
Housing Manager Barnes said he was not sure. Commissioner Stein said money can be taken
from the reserves to balance the budget and that would explain the difference.
Commissioner Stein asked out of the 20 people Ms. Klevorn surveyed, how many live in two-
bedroom units and how many of these people are present. He asked if any of them have
considered moving to a one -bedroom to reduce their overall rent or asked to be put on a list for a
one -bedroom unit.
Ms. Klevorn clarified she does not represent them, and Mr. Katsnelson who is present has a two-
bedroom unit. She asked if any one -bedroom units are available.
Vice Chair Caryotakis said he knows in the past they have assisted people moving from a two-
bedroom to a one -bedroom.
Commissioner Stein again asked if they have requested to move into a one -bedroom unit as that
would be an important factor if they are stressed economically. He asked how long Mr.
Katsnelson has lived in the building and if he has ever requested a move to one -bedroom unit.
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 7
Ms. Klevorn asked if there are 18 one -bedroom units available. She added that not everyone in
the building has complained about the rent.
Commissioner Stein said they are sitting here complaining and he restated his question if they
have requested to move into a one -bedroom unit.
Mr. Katsnelson stated no.
Ms. Klevorn asked Housing Manager Barnes to remind Commissioner Stein that she has asked
to have this conversation in private in a way to maintain the dignity of those individuals who live
in this building.
Commissioner Stein stated they are here in the audience just asking them questions is not
imputing their dignity. He said you are asking this Board to lower their rent, and effectively
raise the taxes of every household in Plymouth because this building is subsidized. This building
is subsidized at $240,000 per year. This money doesn't come from anybody other than the
taxpayers of Plymouth. That $240,000 represents an average of $208 subsidy on a $500
apartment which is a 40% subsidy directly from the taxpayers of Plymouth. Commissioner Stein
said the HRA Board has a responsibility to not only protect the investments of Plymouth Towne
Square, but also to give the citizens an opportunity to live in a subsidized building and protect
the taxpayers. Commissioner Stein said last January the HRA Board voted to raise the rent.
Commissioner Stein said now you are asking to reverse what we already voted on, and he said he
did not think that it is appropriate.
Ms. Klevorn said in January when she asked about the 2010 rents, she was told the issue would
be re -visited because the budget had already been set.
Commissioner Stein said regardless of that fact, this recommendation is to keep those rents at the
current level and raise them 2%. Commissioner Stein said he has sympathy with the residents.
He said if they pay $45 per month for a parking garage, that means they have a car, and pay
insurance, maintenance and gas. Commissioner Stein said we have a wonderful transit system,
and they could give up their car and save money on maintenance, insurance and garage rent.
Commissioner Stein said there are other ways to do it but you are asking us to subsidize them
even further than the 40% subsidy and put that burden on taxpayers. Commissioner Stein stated
that taxpayer funds and rent are the only ways to subsidize this building.
Ms. Klevorn asked how do you choose one citizen over another.
Commissioner Stein said you are asking us to do that.
Ms. Klevorn said she believes a small burden on a large group of people is little money. A large
burden on a small group of people is big money.
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 8
Commissioner Stein said they are already subsidized to a large extent. He said he knows they all
want to live in the number one city in the country, but some people can't. Plymouth is a very
expensive city to live in compared to other cities, and Commissioner Stein asked if they have
looked at other accommodations that might be more affordable.
Ms. Klevorn asked Commissioner Stein if he is suggesting that people on public assistance
should not live in Plymouth.
Commissioner Stein said we provide Section 8 vouchers, public assistance, and we subsidize this
building. Commissioner Stein concurred with Commissioner Ludovissie that this building may
not be for everyone. It is subsidized to a point that the citizens of Plymouth believe it should be
subsidized. Commissioner Stein said if these people need further subsidy maybe they should
look at other accommodations, move into a one -bedroom or give up other things so they are not
burdened.
Ms. Klevorn said these are your residents - not those people that we wish to cast aside.
Commissioner Stein said this building was built with the understanding it would continue to be
subsidized, and the question is what should that subsidy be. He said Ms. Klevorn is asking that
subsidy be larger than it currently is and the citizens of Plymouth are telling us the subsidy is
sufficient. Commissioner Stein stated that the Board cannot go against the wishes of the people
to help certain people. He said there are choices they can make themselves to help themselves to
lower that burden. If they choose not to do that, that is their decision.
Ms. Klevorn respectfully pointed out that Mr. Katsnelson is here because of limited English
skills. She said not every resident who is subsidized owns a car, not everyone is doing anything
but living as tight and frugally as possible. Ms. Klevorn said if a person chooses to have a car,
there may be a need for transportation that is not met by our city bus system. Ms. Klevorn said
she has used Dial -A -Ride. She asked Commissioner Stein if he has tried to use it to get to his
church on Sunday.
Commissioner Stein said he doesn't go to church on Sunday.
Ms. Klevorn said it is difficult. She asked to consider the fact that their rent was raised $40
when everyone else's was held constant, and asked that the rent be rolled back to the 2009 rate at
minimum. She said if you are going to change everybody's rent to go back to the year when you
only raised theirs, with a minimum rent of $450.
Vice Chair Caryotakis said the only way to achieve that is to shift the rent burden to the other
tenants.
Ms. Klevorn asked Vice Chair Caryotakis if he owns a home.
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 9
Vice Chair Caryotakis said he owns a home and every year his expenses go up faster than his
income, and at some point he may be forced to downsize.
Commissioner Ludovissie said part of the problem is understanding the dynamics of how this
development operates from the tenants' perspective. He said who is affected and who is
impacted by decisions would be an effective part of an educational process for the people Ms.
Klevorn is speaking for. Commissioner Ludovissie said it is impossible to keep everyone happy,
and the Board has certain financial objectives to achieve and decisions to make.
Commissioner Stein asked Grace Management Representative Bodigheimer how many one -
bedroom units are in the building and if there is a waiting list for these units.
Grace Management Representative Bodigheimer stated there are 61 one -bedroom units and there
is a waiting list for both one- and two-bedroom units. She said there is no internal waiting list.
She said when people were in a two-bedroom and something changed in their lives so there was
only one person, it was required that they move to the next available one -bedroom or pay full
market rent on a two-bedroom.
Commissioner Stein asked if it is possible to create an internal waiting list for those who have a
greater burden than 35% or 37% of their income, and put them on a list for a one -bedroom and
give them priority so they can downsize if they choose.
Vice Chair Caryotakis stated that preference is in existence now if requested.
Grace Management Representative Bodigheimer stated they would not go to the outside if a
resident had requested to downsize to a one -bedroom unit.
Commissioner Stein clarified that none of the people in two-bedroom units affected by the last
rent increase have requested they be moved to a one -bedroom unit.
Ms. Klevorn said that the people who are paying 52% and 53% of their income are currently in
one -bedroom units.
Commissioner Stein said even though this building is heavily subsidized Plymouth Towne
Square may be too expensive for them.
Vice Chair Caryotakis thanked Ms. Klevorn for her time and representing the Plymouth Towne
Square residents.
Ms. Klevorn asked if these residents can apply for Section 8 vouchers or be moved to a priority
list for Section 8 vouchers.
Housing Manager Barnes explained that Section 8 is a federal program and the City of Plymouth
administers its own vouchers. He explained the waiting list is closed for approximately two
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 10
years as there are 150 people on that wait list. Housing Manager Barnes said the residents are
welcome to monitor waiting lists for other jurisdictions to see when they open. He added there
were over 3,000 applications the last time Plymouth opened the wait list and drew 300 names for
the waiting list.
Ms. Klevorn asked if they could be put on a shorter wait list because they are a resident of a city
building.
Housing Manager Barnes said there are no preferences for being a resident of a city building.
The rent burden could affect placement on a wait list based on a city's demographics.
Commissioner Ludovissie asked if there could be educational materials or meetings conducted to
assist residents to better understand the building's operation in a simplified form.
Grace Management Representative Boedigheimer said this is brought up at resident meetings.
She said they do discuss some of their "wants", but they do not go over financial statements.
Commissioner Stein said that something similar to the Financial Extra could be used and given
to prospective residents explaining how Plymouth Towne Square is subsidized. He asked if
Interfaith Outreach or other social agencies visit Plymouth Towne Square to discuss their
programs.
Grace Management Representative Boedigheimer said they have not had presentations in the
building. She said they would welcome flyers if the HRA Board thinks it would be beneficial.
Commissioner Ludovissie said Plymouth Towne Square is a very modified form of a subsidized
building. He said it is important for folks to understand in terms of rents and how it works. He
said it sounds like at least 20% of the tenant population has concerns. Commissioner Ludovissie
said we could consider supplying information in relation to the upcoming rent adjustment
January 1 as it may help people better understand why rents are being adjusted.
Commissioner Stein said he concurred with Commissioner Ludovissie, and said that information
on Vicksburg Crossing and similar buildings nearby would be helpful. He said information on
services available would be helpful, especially with Interfaith Outreach having headquarters in
Plymouth now.
Housing Manager Barnes said if the proposed change in rental policy is adopted, meetings would
be held to provide information to residents.
Vice Chair Caryotakis suggested describing the difference between public housing and
Vicksburg Crossing to give a better idea of alternative housing.
MOTION by Commissioner Ludovissie, seconded by Commissioner Stein, to approve the 2011
operating budget for Plymouth Towne Square. Vote. 4 Ayes. MOTION approved.
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 11
D. Vicksburg Crossing. Review and Approve 2011 Budget.
Housing Manager Barnes gave an overview of the staff report.
Commissioner Miller asked why 1.5% is being used as opposed to 2% to keep both buildings
similar.
Housing Manager Barnes clarified these are separate entities with separate budgets. He said
Vicksburg Crossing is a totally different building from Plymouth Towne Square, and rents
charged for low and moderate income units are much higher and more sensitive to the market.
Housing Manager Barnes said that building has struggled financially and they need to balance
the ability to generate revenue while maintaining occupancy in the building.
MOTION by Commissioner Stein to approve the budget based on the 95% occupancy with a
24,000 subsidy. He said at this time we are over 100% and would like to give a year to build up
more reserves. Commissioner Stein said he appreciates that the subsidy was reduced by $76,000
and thanked Grace Management for keeping a lid on the expenditures.
Motion seconded by Commissioner Miller. Vote. 4 Ayes. Motion approved.
Commissioner Ludovissie concurred with Commissioner Stein that Grace Management has done
a good job on both budgets on keeping costs down with the revenues issues.
E. HRA Budgets. Review and Approve the 2011 HRA Budgets.
Housing Manager Barnes gave an overview of the staff report. Support Service Manager
Whalen gave an overview of the Section 8 portion of the staff report.
Commissioner Stein asked how the Federal government determines the amount of dollars the
city receives.
Support Service Manager Whalen said the City of Plymouth started with 25 vouchers and
applied in increments to the current number. She said you seldom see an application to apply for
more vouchers unless they are tied to things like family unification or mainstream vouchers
handicapped disabled individuals). She said funding has changed over years with many
different models. Support Service Manager Whalen said with the 210 vouchers and 15
mainstream vouchers, the money spent was the money you would receive. She said now it is
based not on the number of vouchers, but based on a pool of money they think you should be
able to operate your program with.
Commissioner Stein asked about the status of the Sands Company proposal.
Approved
Plymouth Housing and Redevelopment Authority
October 28, 2010
Page 12
Housing Manager Barnes said they were recommended for funding but he has not heard from
Minnesota Housing Finance Agency. He said he did review their board report and it appeared
that most of their funding request was recommended. Housing Manager Barnes said Sands
Company will either need to adjust their budget or seek additional funding to cover a $300,000
shortage.
Commissioner Stein asked how many work force units or Section 8 units would be in the
proposed building.
Housing Manager Barnes responded there will be 67 units, of which seven units would be
Section 8.
Commissioner Stein referenced the HRA budget, and asked if the senior housing rent assistance
remains at $340,000.
Housing Manager Barnes referenced the Vicksburg Crossing budget, and said both options
provided were somewhat aggressive. He said at this point we are recommending we do not
change the number in the General Fund for 2011, because we are not sure if we would need to
come back for a budget amendment.
Commissioner Stein asked if the $76,000 will be held in an HRA reserve fund.
Housing Manager Barnes answered affirmatively.
4. ADJOURNMENT
MOTION by Vice Chair Caryotakis to adjourn the meeting at 8:30 p.m.