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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.