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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 07-17-2003MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY July 17, 2003 PRESENT: Commissioners Susan Henderson, Steve Ludovissie, Tim Bildsoe ABSENT: Commissioners Leon Michlitsch, Jenny Hibbard STAFF PRESENT: Executive Director Anne Hurlburt, Housing Program Manager Jim Barnes, Support Services Manager Denise Hutt, HRA Specialist Tracy Jones, Office Support Representative Barb Peterson OTHERS PRESENT: Grace Management Representative Jody Boedigheimer, Dominium Development Representatives David Dye and Ryan Dunn 1. CALL TO ORDER Chair Henderson called the Plymouth Housing and Redevelopment Authority meeting to order July 17, 2003 at 7:00 p.m. Chair Henderson welcomed Dominium Development and Acquisition Representatives David Dye and Ryan Dunn. 2. APPROVAL OF MINUTES MOTION by Commissioner Ludovissie, seconded by Commissioner Bildsoe, approving the June 19, 2003 minutes. Vote. 3 Ayes. Motion approved unanimously. 3. CONSENT AGENDA A. Plymouth Towne Square — Accept monthly housing reports. MOTION by Commissioner Bildsoe, seconded by Commissioner Ludovissie, approving the Consent Agenda items. Commissioner Bildsoe inquired about the unit turnover line item which is $9,327.00 over the budgeted amount of $1,715.00. Grace Management Representative Boedigheimer stated that because of moving tenants from two bedroom to one bedroom units, the turnover cost is higher than the budgeted amount. Chair Henderson asked what the total amount would be per apartment turnover? Ms. Boedigheimer said it is approximately $3,500.00. Discussion occurred regarding how these costs will be accounted for in the next budget. Vote. 3 Ayes. Motion approved unanimously. Plymouth Housing and Redevelopment Authority July 17, 2003 Page 2 4. NEW BUSINESS A. Dominium Development — Willow Woods townhome rehabilitation HRA Specialist Jones presented an overview of the Willow Woods rehabilitation project. She explained that Willow Woods townhomes consists of 36 -three bedroom and 4 -four bedroom units, which receive project -based Section 8 assistance. The original 20 -year contract has expired and is currently being renewed on an annual basis. HRA Specialist Jones explained that Willow Woods is in need of significant rehabilitation but lacks the funds to do so. Dominium Development & Acquisition, LLC (Dominium) has until the end of 2003 to secure the funds to acquire and rehabilitate the townhome complex and preserve it in the Section 8 program for an additional 20 years. If they are not successful, the limited partner has the right to purchase Willow Woods and convert it to a market rate property. HRA Specialist Jones said that Dominium already has $573,000.00 in HOME funds from Hennepin County committed to this project. They still have a gap of $570,000.00 and they are requesting $50,000.00 from the Plymouth HRA. Dominium also is requesting a letter from the Plymouth HRA supporting the developer's plan to submit a tax credit application to MHFA, perform significant rehabilitation, and extend the term of the HAP contract for an additional 20 years. She said the final item Dominium is requesting would be for a resolution from the City Council, if the Affordable Housing Incentive Fund (AHIF) application is successful. HRA Specialist Jones said there are several reasons to consider this application. First, it is consistent with both the HRA's Strategic Plan and the City's Comprehensive Plan. Secondly, it maintains the existing project based units. A third reason is the complex consists of three and four bedroom units which currently have a high demand and finally it would be less costly to rehabilitate Willow Woods than to build 40 new affordable housing units. Chair Henderson asked when the complex was built. Housing Manager Barnes said it was constructed in 1980. Commissioner Ludovissie asked for a brief summary of the construction make-up that is planned for the complex. Dominium Representative David Dye explained what type of materials will be used for the rehab. He said they are going to make it much more attractive with new siding and windows. He said that parking has been a problem and they plan to add 13 more spaces. Central air would be added rather than the window units being used at this time. The interiors would also be updated. He stated that Interfaith Outreach and Community Partners (IOCP) has requested a Community Room as they serve a large number of clients living at the complex. Chair Henderson asked if it would be a separate building. He replied that it would be attached to one of the other buildings. Commissioner Ludovissie asked if the amount of money they're seeking will be enough and was concerned about additional replacements such as the furnaces. Mr. Dye stated the heating systems have been updated recently. Chair Henderson asked if there is a playground. Mr. Dye said there was but HUD made them take it out because it was not large enough. Chair Henderson asked what the residents would do during construction. Mr. Dye said the units that become vacant will be rehabbed first and then they will be left empty and used for temporary Plymouth Housing and Redevelopment Authority July 17, 2003 Page 3 housing. The contractor said one apartment would take approximately three weeks to rehabilitate. MOTION by Commissioner Bildsoe, seconded by Commissioner Ludovissie, approving Resolution 2003-11 allocating $50,000.00 toward the Willow Woods townhome project; authorizing staff to submit a letter of support; approving Resolution 2003-12 designating the project as a community revitalization area; and recommending that the City Council approve a resolution, if the AHIF application is successful. Vote. 3 Ayes. Motion approved unanimously. B. 2004 HRA Budgets Housing Manager Barnes stated that staff has been evaluating the budget to forecast what they will spend for the rest of 2003 and what the budget will look like for the 2004 programs. He said the full Plymouth Towne Square budget is not included with this report, however, the tax levy support for Plymouth Towne Square is included. He explained that the City Council will begin reviewing the budget in August and explained the timing of that process. Discussion took place regarding the levy. Chair Henderson inquired if the HRA Levy is frozen. Director Hurlburt said the HRA is well under its levy limit and that it is a separate levy approved by the City Council and not subject to the same restrictions as the City's Levy. Housing Manager Barnes explained that there are three budgets included within the HRA budget. The HRA budget includes the CDBG budget, Section 8 budget and the HRA General Fund. The CDBG budget is mainly federal dollars with a small amount of tax dollars to support overhead. The section 8 budget is 100% federally funded and the HRA General fund is primarily funded from tax dollars. Housing Manager Barnes explained that the CDBG budget is not expecting as much carryover from past years so the amount actually went down. He said the amount for this budget has not changed much over the past ten years. Director Hurlburt explained the property tax support for the budget which shows an increase. She said this is used to pay for some of the City allocations which every department is charged for its share of usage. The City does not charge the HRA general overhead for the services they provide. However, they might begin doing so in the future. She said there may be a plan developed to do so before we hold the next CDBG hearings. Commissioner Ludovissie asked if they are able to identify those costs which the HRA incurs. She said measures could be taken to do so but it is complicated by Federal regulations. Support Services Manager Hutt explained the proposed change to the Section 8 budget which is the proposal that the Housing Technician take over Housing Quality Standards (HQS) inspections which are currently being performed by the Housing Inspector. She said by 2004 all HQS inspections will be handled by the housing staff. The budget also reflects a $500.00 increase in Employee Training and $250.00 in Conferences and Seminars due to another housing staff employee who will be attending area conferences and completing HQS certification. Plymouth Housing and Redevelopment Authority July 17, 2003 Page 4 Support Services Manager Hutt said they are proposing to promote both housing staff positions. She said the total estimated cost of the promotions would be approximately $7,553.00, but would be virtually offset by the elimination of the $7,000.00 line item for housing inspections. She said they are also proposing to add an $800.00 line for a mobile phone for the Housing Technician. Commissioner Ludovissie asked if there is an advantage of having the inspections done by the housing staff and asked if the program funds are adequate to cover this. Support Services Manager Hutt replied that the administrative fees for the large number of port -in vouchers covers this amount. She also said there is a benefit of the housing staff doing the inspections because it gets them in closer contact with the clients and promotes a better relationship with the apartment managers. Housing Manager Barnes stated they are proposing one significant new expenditure for the HRA General Fund which would account for most of the change in the tax levy, which would go from 552,120.00 in 2003 to $657,349.00 in 2004. The tax levy would increase of $105,229.00 or about 19%, including the tax levy supporting CDBG. He said we are not near the levy limit which was $932,800.00 in 2003. Housing Manager Barnes said a $10,000.00 increase in the Housing Loans line item is being requested because the HRA has not increased this line item to keep pace with inflation. Staff is also proposing to raise the Housing Loans line item by an additional $75,000.00 in response to the HRA's 2003 Strategic Plan and the increase in demand for rehabilitation of existing homes in the community. Housing Manager Barnes said staff is in the process of contracting with a non- profit organization to administer various programs from the Minnesota Housing Finance Agency MHFA). The increase could also be used to write-down the interest rate of the MHFA programs to assist additional households. He explained how the fix -up fund program works and stated it makes the monthly payment manageable for many households. Housing Manager Barnes said the funds could be evaluated midway through 2004, if the needs of the HRA change. Housing Manager Barnes stated that staff is proposing a one-time transfer of $165,000.00 from retained earnings for the acquisition of a piece of property at Northwest Blvd. and Schmidt Lake Road from the City. Commissioner Ludovissie asked if the City needs to sell the property. Housing Manager Barnes said the City does not need to sell the land but the developers who are interested in buying a piece of property next to this piece would also like to purchase that piece. Housing Manager Barnes said staff received a verbal market value of the land which is 893,000.00. Housing Manager Barnes said if the HRA is able to negotiate a better price from the City, any unused portion would go back into the HRA reserves. Discussion took place about the reserve funds. Commissioner Ludovissie asked where we are with Plymouth Towne Square reserves. Director Hurlburt replied that is separate from the HRA reserves and we are currently having Plymouth Towne Square evaluated by an outside firm to determine if we have sufficient reserves. Commissioner Ludovissie felt that a primary item is to have enough reserves for Plymouth Towne Square. Housing Manager Barnes said that as soon as the Center for Energy and Environment does their analysis, staff will have a better idea where they are at and can adjust amounts for future years. Plymouth Housing and Redevelopment Authority July 17, 2003 Page 5 Director Hurlburt said the only item regarding Plymouth Towne Square is the Senior Housing Rent Assistance which is being reduced by $40,000.00 as a result of a lower debt payment because of the bond refinancing that occurred in 2003. She said if reserves are found to be excessive during the year the subsidy could be lowered by December when the final levy is approved. Commissioner Ludovissie asked if it was necessary for the HRA to purchase the land or could non -profits be used to fund this purchase. Director Hurlburt said it is helpful to control the property. The amount of $165,000.00 was chosen for the budget because that is what the City paid for the property. Discussion continued on the purchase of the property. The expectation will be that the HRA will put the deal together. Commissioner Ludovissie felt this purchase was still premature and was not in favor of the $165,000.00. Housing Manager Barnes explained how the funding would work and said we will partner with a housing developer. Commissioner Ludovissie felt that because we have the right to raise the levy does not mean it has to be done. Chair Henderson said we should talk about the reasons why we are raising the levy and what the money would be used for. Commissioner Bildsoe said it is a result of the Strategic Plan. Director Hurlburt said it is impossible to come up with an exact amount that is needed. She said last year there was a proposal to maximize out the levy, but it was decided not to raise the amount until we did the Strategic Plan and figured out exactly what the funds would be used for. Commissioner Bildsoe asked if we can still take money this year to begin new programs. Director Hurlburt replied that anything additional we would spend in 2003 would come out of reserves. Discussion continued regarding how much to raise the levy. Commissioner Ludovissie asked if the Council can override our levy decision. Director Hurlburt said the City Council can change it if they want but they are looking for a recommendation from the HRA. Commissioner Ludovissie does not want to raise the levy without a plan to use it. Housing Manager Barnes indicated there are specific uses for the money. Commissioner Bildsoe explained the City is growing and getting older and the levy has not grown to support it. Chair Henderson asked what the amount would be if we get an increase in City allocated funds. Director Hurlburt replied that it would be thousands but did not know an exact amount, but it would not be proposed until 2005. Director Hurlburt said she is just making the Board aware that this change may take place. Commissioner Ludovissie felt that would not be an unreasonable request from the City. Housing Manager Barnes provided some input from Commissioner Hibbard and said she was comfortable with the proposed budget. Commissioner Ludovissie explained his thoughts on the levy and feels that the levy should be raised 5 or 6 % rather than 19%. Chair Henderson suggested taking the money for new programs out of the reserves. Director Hurlburt said we could, but we need those kinds of sources available for programs that come up such as the Dominium proposal tonight. Director Hurlburt said the HRA will still need to approve the spending of any money which is generated by raising Plymouth Housing and Redevelopment Authority July 17, 2003 Page 6 the levy. Commissioner Bildsoe felt that spending the extra money would be of value to the community. MOTION by Chair Henderson, seconded by Commissioner Bildsoe, recommending that the City Council adopt the 2004 HRA preliminary budget as proposed by staff. Vote. 2 Ayes. MOTION approved on a 2-1 vote. (Commissioner Ludovissie voted nay.) C. HRA's Subordination Policy Housing Manager Barnes gave a brief overview of the staff report, but did say that this particular case will probably not take place. He said that staff would like to have some direction from the Board regarding what to do when unusual situations such as this arise. HRA Specialist Jones explained that clients want a larger cash -out because of credit card debt. Housing Manager Barnes said staff is asking the Board if they should show any flexibility at all under certain circumstances. He said we need to decide if by granting a waiver of the 20% policy are we bettering the financial position of the homeowner. Commissioner Bildsoe didn't feel we are helping them out in the long run Commissioner Ludovissie asked what staff is asking the HRA to do. Director Hurlburt said we have taken a pretty hard line on following the policy and gave an example of what staff is requesting using another situation. Housing Manager Barnes said we will not go above the 95% loan to value level. Housing Manager Barnes asked if the Board would be open to a special meeting in certain cases. Director Hurlburt suggested rewriting the policy somewhat. Housing Manager Barnes said the policy might need to be a little broader. 5. ADJOURNMENT MOTION by Commissioner Bildsoe, seconded by Commissioner Ludovissie, to adjourn the meeting. Meeting adjourned at 8:45 p.m. HRA/Minutes/071703