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HRA 06/01/2006 - 29601^ CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMIVIISSION JUNE 1, 2006 CALL TO ORDER• Chairperson Commers called the Housing and Redevelopment Authority meeting to order at 7:37 p.m. ROLL CALL: Members Present: Larry Commers Virginia Schnabel Pat Gabel John Meyer Members Absent: William Holm Others Present: Mike Jeziorski, City Accountant Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director � William Burns, HRA Executive Director APPROVAL OF MINUTES: Housing & Redevelopment Authority — February 2, 2006 MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, to approve the minutes as presented. UPON A UNANIMOUS VOICE VOITE, CHAIRPERSON COMIVV�I�RS DECLARED THE MOTION CARRIED. CONSENT AGENDA• • Consider Claims & Expenses MOTION by Commissioner Meyer, seconded by Commissioner Schnabel, to approve the consent agenda. UPON A UNANIMOUS VOICE VOITE, CHAIItPERSON CONIlVIERS DECLARED THE MOTION CARRIED. ACTION: ^ MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, to add a"Resolution Authorizing Reimbursement to the City of Fridley Gateway West Public Improvement Project" as an action item for approval. UPON A UNANIMOUS VOICE VOTE, CHAII2PERSON COMN�RS DECLARED THE MOTION CARRIED. • Approval of Resolution and Declaring Structure at 6000 East River Road to be Substandard Paul Bolin, HRA Assistant Executive Director, stated the reason for the resolution is for inclusion in any possible tax increment district, the structure must be blighted. There is a statutory definition for substandard properties that needs to be met. The engineering firm of LHB was hired to perform the blight analysis on behalf of the City. They did find the structure to be substandard and that is based on criminal statutory defmitions. In this particular case what they found was a number of structural and code deficiencies. Anything from windows being inappropriately sized, not having proper door widths, and the electrical systems were all substandard. All of that is really because of the age of the home and the upkeep. Staff does recommend the resolution included in the pamphlet be approved. A similar resolurion will go to the City Council on June 12. Once they pass their resolution as well, then demolition can proceed on the site. This would allow the property to be included in any future TIF districts if we do a project down in that neighborhood or someone else were to do a project in that neighborhood and create a TIF district. n MOTION by Commissioner Meyer, seconded by Commissioner Schnabel, approving Resolution No. and Declaxing Structure at 6000 East River Road to be Substandard. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMIV�RS DECLARED THE MOTION CARRIED. • Annua.l Election of Chair and Vice Chair for One-Year Terms Commissioner Schnabel nominated Chairperson Commers as continuing chair of the HRA, seconded by Commissioner Gabel. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMN�RS DECLARED THE MOTION CARRIED. Commissioner Meyer nominated Commissioner Schnabel as vice chair. Commissioner Schnabel replied she appreciated the nomination but had to decline because of the fact she will be leaving the City of Fridley in the next few months. She expected the July meeting to be her last meeting. Commissioner Meyer nominated Commissioner Gabel as vice chair, seconded by Commissioner Schnabel. � UPON A UNANIMOUS VOICE VOTE, CHAIItPERSON COMN�RS DECLARED THE MOTION CARRIED. 2 /"� • Approval of Changes to Gateway West Development Agreement Mr. Bolin stated as mentioned in the memo that went out in their packet last week, there were some unforeseen title issues. Some things had to do with MnDOT right-of-way orders not being properly recorded 25 years ago. There were other issues just based on the years that the properties themselves were platted. There was a mixture of different types of torrens and abstract properties which caused some problems at the recorders office as well. As they are aware over the past few months they have worked closely with the City Attorney to get a number of those items cleared up. They were able to clear up all of the issues on the northern property and file that as the Gateway West First Addition plat which was recorded last Wednesda,y. Regarding the second addition which would be all those properties on the southern block, those issues should be cleared up by the end of this month. Again they will bring that second addition back before the Council and then get that filed at the County as well. All these delays have created the need for some minor changes to the Development Agreement. One of the copies in their packet he believed was the eighth version of the Development Agreement that Gay Cerney has put together on our behalf. The changes that are in this Agreement are very minor changes, and all they do is reflect the changes that are necessary because of the time delays. This allows the developer to purchase lots from us on the northern block. With the original language they are requiring they divide the three lots across from Burger King to start with, with the developer's speculative homes. It will probably be another month or so before they can sell those properties to him. He does have four homeowners ready to start building on the northern block. Rather r—� than hold him up and his clients who want to build, staff thought they could change the Development Agreement to allow that to happen. A couple of the other changes in the Development Agreement really deal with the starting and the end date for acquisition by the builder and then also it pushes back that end da.te for all of the construction to take place. It really does not move it back much, it is about six months, and it does not affect our tax increment financing in any way. To protect us, to protect the City, attorney Cerney also made some minor changes in regards to the timing of the City utility installations. As they recall they are redoing that portion of the street because they have to extend a water line and sewer line on the southern block, and we are putting in new services on the northern block as well. In the original Agreement they thought they were going to be able to get our utilities in prior to the developer building, and that has not been the case. So it kind of happened simultaneously and attorney Cerney has just built it into the Development Agreement to allow that to happen. Staff is recommending they approve it with the changes that the HRA attorney has suggested and made to the Agreement. Chairperson Commers stated he found that the principle changes were there in Article XIV on page 12 and that is what Mr. Bolin is talking about, the public improvements and then Section 4.2A with the dates and the timing. Otherwise he thinks most of everything else is consistent with what they looked at before. Mr. Bolin stated, yes, the only other changes are really just moving some of those dates from April 15 to July 1. /� �, Commissioner Schnabel asked regarding the Letter of Credit, under Section 3.2 on page 9. She wondered because the northernmost lots are going to be developed first and this language dealt with she believed the three lots on the southern parcel, is that going to be affected in any way — the dollar amount of the Letter of Credit or the language at all? Mr. Bolin replied, no, the Letter of Credit was really for the total purchase price. Commissioner Schnabel replied, okay, less payment for the first three home lots. Mr. Bolin replied, correct. The developer is still required to purchase three lots from us to start. He did not think that language itself would need any changes but he can certainly run it by attomey Cerney and Mr. Casserly tomorrow. There is still the same language in about the three lots, it will just be in a different location. If they recalled, instead of assigning different values to each lot, they just took the total and divided it by 16. That should not affect anything. Chairperson Commers asked he was paying us the same for all the lots, there was no variance, was there. Mr. Bolin replied, correct, it was $43,560. Commissioner Meyer asked whether the developer has submitted construction plans to us yet? ,--., Mr. Bolin replied he thought he would have two of them into us either late this week, which � would be tomorrow, or by the middle of next week. Commissioner Meyer stated he would be glad to take a look at them. MOTION by Commissioner Gabel, seconded by Commissioner Schnabel, approving changes to Gateway West Development Agreement. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. • Approval of Resolution Authorizing Reimbursement to the City of Fridley Gateway West Public Improvement Project Mr. Bolin stated they will recall as they have gone through the Gateway West Project over the past four years, developing preliminary budgets and preliminary plans and created the Tax Increment District, the HRA has discussed paying for those public improvements that are necessary for extending the utilities and doing the street work that has to be done to cover up whatever new utilities have gone in. Also, to construct a decorative fence that would be similar to what is across the street at Gateway East and on some of the intersections of the west quadrant. Looking at some of the different budgets that have been put together for this project, there was appro�mately $500,000 budgeted for all of those public improvements. Most recently �,., in the Tax Increment District No. 18 plan. The purpose of this Resolution really just allows the � ` City of Fridley to run the projects for us. Both the fencing and the street utility project. To run � ,� those as a regular city project and then have the HRA reimburse them for those costs. They will end up paying the contractors to do the work. They have gotten just an engineer's estimate on the street and utility work, and they came in somewhere in the neighborhood of $270,000. There is a bid opening he believed next week on the street project, and they will have some real costs for that and a bid opening for the fence project will be coming up in the next week as well. They will have real numbers and actual costs at that time. This resolution is really just to give the City some assurances that the HRA will in fact pay for the project when the work is completed. Chairperson Commers commented it is just a question they will reimburse the City for the actual costs associated with this and has nothing necessarily to do with the $500,000. It should be added in there, upon receipt of the actual costs. Also, the HRA asked that they keep a running track of the expenses on this project so that they can compare our estimated budgeted costs vs. actual costs. So if he would assume if they have these bid openings coming up that next month Mr. Bolin could update that tracking for them as far as the expenses are concerned. Mr. Bolin stated to Chairperson Commers that the HRA could address his concern about the actual costs in the final "Therefore, be it resolved" .They could add the following language: "That the Authority agrees to reimburse the City of Fridley for the actual costs necessary for the completion of the public improvements in the Gateway West project area." Chairperson Commers added: "...upon certification by the City of the actual costs." ,� MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, approving of Resolution No. Authorizing Reimbursement to the City of Fridley Gateway West Public Improvement Project with the following change: Now, therefore, be it resolved that the Authority agrees to reimburse the City of Fridley for the actual costs necessary for the completion of the public improvements in the Gateway West project area upon certification by the City of the actual costs. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMIVV�RS DECLARED THE MOTION CARRIED. • Approval of Cost Share Agreement with City for Demographic Data Scott Hickok, Community Development Director, stated this is a request they have relative to the Comprehensive Plan amendment they are now embarking upon and right now it looks like certa.inly the Housing chapter we have had a closer look, the Land Use chapter, Transportation, and Parks may have opportunity to make some amendments to. It is really important for us to know who we are, where we are located, and how this information that they are asking the HRA to share the cost of, differs from just census information is that census information is as they know every ten years. Even by the time they get the census information back, it is a bit dated. When they last embarked upon our Comprehensive Plan amendment, they had a final amendment done in the year 2001. In the interim the new census data. had come in, but the r�.,.\ census da.ta itself is not even as broken down and as useful as they would like to see it. Excensus is a company that has really built their reputation on taking the data in part from the census and ,� not just stopping there, but going to the Department of Commerce and getting information, going to the school districts and getting information; even going to the Department of Motor Vehicles and getting information about who we are, where we go to work, for example, what our population breakdown or makeup is, what our population pyramid looks like. Why this is so important is that you know that we have talked about redevelopment and certa.in types of redevelopment, yet senior housing be it age restrictive or single-family housing if we have had those opportunities and redevelopment of the Gateway West that Mr. Bolin was talking about. All those have implications on schools, on where you might want to move into your next house, and we as a community plan those types of things, it is really important for us to know who we axe planning for. This would give us an opportunity, and what it breaks down to, is $1.05 per household and that total cost is just over $11,000. The City is asking the HRA to share because they really feel this information is useful to both the City and the HRA, for instance because of the actual property agreements and all those types of things with information like this. Staff would like to publish and reproduce the information for the HRA as well as the City, and they need to have the HRA sign on then as a third party to this agreement. They would like to request the HRA to pay half of the cost which would be $5,894.50. He thinks they will be very impressed with the information and find it very valuable as they analyze future projects. Chairperson Commers asked will the HRA then be a subscriber to this information so that they can use it directly if they wanted to? Mr. Hickok replied, yes. They would be subscribers. � Chairperson Commers stated because this only provides for the City. Mr. Aickok replied, right. By being a third-party signatory, staff is asking for (1) the HRA's contribution of course and (2) the HRA and the City would shaxe the data equally as a subscriber, Chairperson Commers asked but they would not have an objection to them using it publicly then because it is a license agreement that prohibits other people from using it? Mr. Hickok replied, right. They ta.lked very specifically about the relationship between the City and the HRA and their representative, John Carpenter, indicated he is most comfortable with, and this was structured in a way that HRA's or EDA's to sign as a third party and then share the data equally. Commissioner Gabel stated if she understands it correctly they can reproduce it for their own use but they would not be passing it out to other people, and if other entities such as the school board wanted to piggyback on then there would be a reduction in cost to us. Mr. Hickok replied, right. Right now they are not asking the school district to contribute. They could have done that. It would have taken a real coordination with the four school districts and frankly they need the da.ta to get moving on our end of this. If in the next year's planning process they decided they would like to update that data, they would likely go to the school ,..� district and ask if they were interested also. Then they could sign on as parties as well. Right now it would be the HRA and the City who would share the data.. It can be used and reproduced � ,--1, in documents for the HRA but no one from the public can come on as a subscriber for example. The documents of course are public that we make from this agreement, but the public's ability to get in and query the site is not going to be there. Chairperson Commers asked, for example, where there are 390 people, aged 55 and above living in Fridley, if they wanted to use that information for some purpose with a developer or whatever, they could share that with them. Mr. Hickok replied, yes, that is ours to use and a good example of how they would use it. Commissioner Meyer stated he thought this was a great idea to keep tabs of our demographic data and over the years they have had other firms come in and do, maybe not the same thing exactly and maybe not as comprehensive or maybe more, but have they looked back at some of the results from other collection agencies we have hired in the past? It seems to him they paid something like $15,000 to a firm to analyze the demographics. Do they keep in mind other collections that have been made in the past years so they either build or do not duplicate on things? Mr. Aickok replied, yes, absolutely. M�eld Group is who they have used in the past, and they were specifically requested and commissioned to do a housing study and to take a look at populations, specifically relative to housing. This is a bit different. This really takes a different angle/perspective on demographics and they may recall when they did the joint study with �\ Columbia Heights and Fridley relative to the Medtronic development and future development that might occur, they used a group called Demographics Technologies. That is an earlier company but now has been Excensus. So he can tell them that throughout the years in the industry, they have a number of different tools they use than anyone else. As a matter of fact those tools are becoming so important in the analytical world that the Census Bureau itself is working with Excensus to use some of the modeling information that Excensus has developed. So they are getting in a bit ahead of the curve, and the Census Bureau is very intrigued by this. One of the things they do different is they do not just take census blocks which are larger block neighborhood statistics but they take what they call "I-Blocks" which is every three households so they are specific to the makeup of that household down to the three-house indicator size; and that is really important to us because basically then no one is forgotten in these households. In a census block there might be somebody who has not responded and it may be that the Census Bureau has just moved on past that block. In the I-Block model they take every three households and do not move on until they have a specific makeup of every three households. So it is still generic enough that it does not say that at your address here is what is happening but it will say in and of a block of three homes in your general area, here is what your general makeup is. Chairperson Commers asked if this was only for one yeax? It is not an ongoing subscription if they do not want to do it? Mr. Hickok replied, it is not. If they find it is something they would like to do, they have an opportunity then in upcoming years — it is cheaper; $1.05 initially which is more expensive than �., subsequent years and so it is something they may want to do. Ideally, from a staff perspective, he thinks they would like to keep a nuining grasp on what is happening with our population and 7 �� what shifts and changes axe being made as houses are being sold and redevelopments are happening. That is a decision they will make in the future. Tonight they are not asking them for that. Commissioner Gabel asked him if he knew how they collect the data? Mr. Hickok replied, yes. As he mentioned census is just a starting point for them. They gather information from different state agencies as well. The Department of Transportation, Motor Vehicle Licensing, school districts — they do cooperate with them because there is a lot to be gained back by the school districts, too. Right now the Department of Economical Development is also a source they use for information. Because they are not only telling us age of population but they are really dissecting where do people work, incomes, things like that they cannot just simply get from the census but they want to be far more specific and get State information that helps them with that. It is a mu� of resources and that is what makes the information better. It is not just a single resource they are using in analyzing but it is all different sources and then they blend information together, call out the real from the false facts, and use that then for their analytical tools. Commissioner Gabel stated they get down to the I-block but they are not gathering or not going to be releasing information that conta.ins names matched with anything, it is just the data they are interested in. '"'� Mr. Hickok replied, absolutely right. It is a good point and they might even be concemed about a three-house mapping process where they are talking specifically about three houses shaded on a map. It is in the analytical end. It is not even mapped to say that these three houses have this makeup but they know from the I-block materials what the makeup of that area is and then on a more broad sense, you might see shaded area in the city and you might see a larger shaded area for anonymity. But they have been much more specific than the census folks so when they shade an area they really are certain that those households and faces have all been counted and that they know specifically what is happening in that district much more than the census folks would. Commissioner Meyer commented it sounds like an awful lot of work for relatively low dollars. He asked is this pretty much all computer analyzed from various lists, is that the idea, because certainly you are not going to be knocking on doors. Mr. Hickok stated this group has had an incredible amount of experience. Actually its founder is one of the early gurus of GIS, a person who is well suited for taking any and all sources of data and melding them together in layers and coming up with the information that he needs and he has built his company on that. One of the successes this group has had is working with the I-35E group and that was a number of cities working together to talk about development along the I- 35E corridor, and what was important to them was not the city boundaries as much as the makeup along that corridor and this group was able to take that information from all of that spectrum of cities and population types and mixes up along the corridor and make sense out of it. It is a fairly credible group and one of the things he thinks keeps the costs affordable is their modeling. Their computer modeling that is unique to them but now it is mastered and can be reproduce to other cities at a relatively low cost. : � Dr. Burns asked if this was budgeted in both the City and HRA budgets? Mr. Hickok replied it is budgeted on the city side and it is not specifically identified as a line item in the HRA's budget and that is why it is being asked for here. It is similar to what we did on the Medtronic or joint Columbia Heights/ Fridley efforts. The budget for the HRA is not as specific as to call us out but it is on the city side. Dr. Burns asked if there was room in the HRA budget to encompass this? Mr. Hickok replied, yes. MOTION by Commissioner Gabel, seconded by Commissioner Meyer approving the Cost Share Agreement with City for Demographic Data UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON CONaVVIEERS DECLARED THE MOTION CARRIED. • Consider Membership to MN solutions for 2007 Legislative Session Mr. Bolin stated Minnesota Solutions actually is a consortium of cities from across the state, both from the metro area and from greater Minnesota as well. The purpose of the group is to ^ focus on different redevelopment issues that come up at the Legislature. This is a group who keeps an eye on TIF legislation for us, is always fighting for redevelopment funding to make more available for the various cities, and they have also had some success with getting more money for soil contamination for brownfield sites. The HRA has been a member of this group he believed for at least the last four years and maybe even longer. The director of the group, the group's only employee, is "Bonnie Balach." She does an excellent job tracking legislative issues on the behalf of the cities that belong to the group. During the legislative session she is down at the Capitol almost 24 hours a day on our behalf. Any time an issue arises that one of our local legislators is involved with, she is very good at getting a notice out to us right away. She keeps track of all the different committee meetings and calls if there is something she feels we should be making a trip to the Capitol for. She is one of the few people out there who advocates on behalf of some of the older inner ring suburbs like Fridley. We do have redevelopment needs that are often much different than out-state Minnesota and the suburbs a little further out. During this past session, she did spend quite a bit of time working on a state redevelopment fund, and for a number of years that money has been going just to out-state Minnesota. She worked real hard this year, trying to bring some of that money back to the metro area but unfortunately she did not have any success. Her work has enabled City staff to keep up with a number of those changes that happen during the middle of the legislative session. They do recommend that the HRA participate in Minnesota Solutions for 2007. Our cost will be $1,500. Mr. Bolin stated on a related note, now that the legislative session has just wrapped up, he knows Dr. Burns is working on an article for the City's newsletter, and HRA attorney, Jim �,..� Casserly, plans on being at the July meeting with kind of an update and wrap-up of the session for them as well. � ''�'� Chairperson Commers asked if Ms. Balach did anything in terms of advocating on the eminent domain bill? Mr. Hickok replied, yes, she did. She almost daily provided updates on the language/changes that were being proposed in the House and the Senate and, as Mr. Bolin mentioned, very instrumental with meeting specifically with our local legislators and talking about the impacts to our local government based on the changes that were being made and worked very close with us as a matter. They almost had daily discussions or e-mails back and forth about, okay, if it is worded this way, what would the impacts be to our community. Mr. Meyer asked why is it hard to find legislators who would carry some water for us on some of these things? Mr. Bolin replied it is an election year. William Burns, City Manager, replied the state legislature has never trusted cities on tax increment fmancing and they have repeatedly whittled away at it to limit our ability to use it. Mr. Bolin stated it also has to do with the types of bills that were introduced this year. They will recall in the past the Handgun Bill was one they had problems with because of the way they attached it, an inappropriate bill, and there was some backlash form that last year. With so much /..� of the focus being on the bonding bill, there just were not the usual number of bills that were out there you could attach other bills or ideas onto. MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, approving Membership in Minnesota Solutions for 2007 Legislative Session. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMN�RS DECLARED THE MOTION CARRIED. • Approval of Proposal to Demolish 6000 East River Road Mr. Bolin stated earlier tonight they passed a resolution that would allow the home to come down and still include it in a tax increment district if one is ever created. What he has before them right now is asking approval to award the demolition contract to Veit. Veit is proposing to do all the work for $14,266. This is very comparable to what we paid last fall to have them do the work on our Gateway West project. The $14,226 includes in this property getting rid of all the hazardous materials, i.e. the asbestos, which they have to do before they start taking the rest of the house apart. There is an existing well in the basement of the home that needs to be capped. Veit is able to do that. There is an existing septic system that is failed on the site that they need to properly remove and dispose of. Then they are going to demolish the home and garage, remove all of those items, and number of things left inside the home. They will properly dispose of all these items for us. Veit has a very good history with the HRA and with the City � itself. They are very reputa.ble. We know when they take asbestos from a site, it ends up where it is supposed to. They know when they take the demolition debris away, it goes where it is 10 �--� supposed to and that 25 years from now the City is not going to get a bill from the MPCA because some less than reputable outfit has demolished one of our homes and hauled everything out by Stillwater somewhere and dumped it. We do like to work with Veit, and the price is very compaxable compared to the per-home price on the Gateway West project. Staff would recommend the HRA approve and accept the proposal, and he can get a hold of Veit tomorrow and get a date set for the demolition of that property. Chairperson Commers asked if it was cheaper for our own demolition group brings it to the ground first? Mr. Bolin replied, no, not really. He has talked to the Fire Department a little bit about it. They will most likely do some non-destructive training on the site if there is some time once Veit gets the hazardous materials out. The biggest problem with them burning it to the ground is the hole has to sit open for ten days before Veit can haul anything away. With the residential buildings next to the site and the school (although it will be out of session) they really do not want that liability. Mr. Meyer asked Mr. Bolin if he knew for sure whether the demo includes removing the foundations for the house, the garage, and the slab on grade? Mr. Bolin replied, yes, it involves removing all the concrete. Everything. It also includes filling of the hole and topsoil and seeding as well. ^ MOTION by Commissioner Schnabel, seconded by Commissioner Meyer, approving the awarding of the demolition contract to Veit for 6000 East River Road. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMN�RS DECLARED THE MOTION CARRIED. INFORMATIONAL ITEMS• • Gateway NE Follow-Up Mr. Bolin stated just to give a summary, when they had the joint meeting with City Council at the beginning of April, they did get permission to work with Dan Wilson and Jim Casserly to try and put some more realistic acquisition numbers on those properties. What they found out is the properties would be very expensive to acquire, approximately $2.1 to about $2.4 million. Not really enough usable land area to recover costs. Even if they looked at relocating the frontage road, he still does not know if that would give them enough area to recover their costs. In their analysis that was done, even once the land would be sold off to the developer and figuring the tax increment revenue, it would only provide about $375,000 between both of those sources. So that still leaves about a$2 million shortfall. One idea would be to include the property in a much larger project, specifically with the Northstar Rail site and to that end they have recommended this to the Council as well, that at some point probably later this summer, the HRA have a joint meeting with the Council to further discuss the potential of acquiring these sites and possibly combining it with the rail sta.tion site as well. 11 � Chairperson Commers asked what is the status of the rail sta.tion site? Is it because of the cost and expenses they are thinking of eliminating the Fridley station? Dr. Burns stated he recently had the meeting on that subject with the County and with their attorney, along with the attorney representing the negotiations with the Burlington Northern, Mr. Graham. The station is still in the plan; however, the third rail that was part of the plan has been eliminated. The third rail is through Fridley from the yard up to Coon Creek. Plus the number of trips has been considerably reduced by the number of allowable commuter trips and non- commuter trips. So the project is still there, has been funded by the State, and the station is still in the project but it is identified not necessarily as a first stage part of the project. He has not heard any definition as to what stage it is in currently, and it worries him a little bit that it is not defined as in the early part of the project. He does know that the Authority and the County view this as the most expensive of the station sites and they are looking at ways to reduce that cost. Chairperson Commers asked what does that mean to eliminate the third line? Dr. Burns stated they are facing federally mandated costs and benefit ratios they have to meet. In order to meet those ratio requirements, they are reducing those costs by taking out the third rail and Burlington Northern wants the number of commuter trips reduced. Chairperson Commers asked because then they can only travel on their line? �� Dr. Burns stated you could only travel on the existing rail lines as opposed to building another rail. Because you are potentially interfering with their traffic, you are doing less trips. That is his understanding and this is all gathered just from one meeting. Commissioner Gabel asked doesn't that drive down the whole cost-benefit ratio? Dr. Burns stated it would seem it might have the reverse effect but that that has been the outcome regardless of how you get there. From what he hears these commuter rail projects have had a history of being built and then they are very popular and the demand for more trips builds up and, of course, once the thing is in place becomes a lot more expensive to build the other line later on. That is apparently the cost we face for getting anything built at all. Mr. Iiickok stated what it means is six round trips. It goes from 18 daily trips to 12 daily trips without the third line. Mr. Meyer asked if this whole venture is a moneymaker for Burlington Northern or is it a brea.k- even? Do they get handsomely compensated for their railway? Mr. Hickok replied there certainly is a cost associated with it. It is using lines that exist, it is wear and tear, it is infrastructure and all of that has a price tag and is figured in with negotiations with Burlington Northern. Northstar had an excellent negotiator on it and in his view we got the ^ best deal that could be negotiated and optimistically then looked towards Northstax happening as a result. 12 � �� • Monthly Housing Report Mr. Bolin stated in the month of May, on behalf of the HRA, the Center for Energy and Environment sent out five new applications for our loan program. They closed on one new loan through the loan fund. They closed on one of our home energy fund loans as well. This brings us for the year only a total of three loans. He thinks part of that has to do with the fact that our interest rate on our loan now is at 6 percent because we are tied to the Sta.te MFHA loan rates. He knows people go out and shop with the banks and credit unions and they are going to find that 6 percent is still a pretty good deal but he does not think people axe used to hearing "6" yet. They are still used to hearing 4 and 5 percent interest loans. That has not been the case since December, and he does not see that changing any time soon. They are in the process of putting out, or it may have already gone out, a direct mailing to Fridley residents promoting the loan program and some of the other services they have. On the loan origination report itself, this month a loan was given out for $7,400 and the year so far they have only loaned out $45,000. As has been the case for the past few years, the types of units that were improved with the loans were all single-family homes. The types of improvements that happened were bathroom remodels, general plumbing, heating and electrical systems, room addition and some other miscellaneous interior projects. The first year some siding, fascia, roofing, windows, and doors. It really is the nuts and bolt things that need to happen to maintain a home in good shape. In that way our program is successful. Looking at the performance report, this year we had budgeted to do 50 loans to date. We are at 3 so we are very far behind in that goal which really surprises � him. He does talk to a number of people, in addition to the loan packets the CEE sends out, he probably sends out on average two a da,y to people. When he mentions 6 percent, all of a sudden people do not see quite as interested. However, perhaps once some of those people do their homework they will realize it is a good deal and we will get some more applications in. They did have one deferred loan akeady this year for $10,000. Chair Commerce asked if our program allows them to buy the rate down a little bit more? Mr. Bolin replied you certa.inly could. He believed it is just through a resolution that three or four years ago it was tied to the 1V�IFA loan fund. We tried to say 1.25 percent below that rate. So that has caused our fluctuations. It would certainly be within their discretion and powers to lower the interest rate if they would like to do that. Chair Commerce stated maybe he could at least look into it. Mr. Bolin replied, yes, he will check, too, with the Center for Energy and Environment and also with Community Reinvestment Fund who actually services our loans and see, if changing our rate to maybe 4 or 5 percent, that would have an impact on our contracts with them. Dr. Burns stated he would imagine that the 6 percent is at least 2 points lower than the best home equity rates. He knows a person who is paying prime plus a'/z and is paying about 8. ^ Chair Commerce stated maybe they should just wait and see what happens. 13 � ^ Mr. Bolin replied, yes, and they can certainly keep an eye on that over the next few months and maybe they would want to look at a rate change. But between now and their July meeting they will talk to some of those organizations they partner with and see if it would affect their agreements at all with them. Regarding our remodeling advisor visits, they had set a goal of doing 25 visits a year. This year they changed that goal to 50 and actually through the month of May have had 21 remodeling advisor visits. That service is being used much more than it has in the last few years. Regarding Operation Insulation lately people are not thinking about insulating their homes but for the yeax to date, we have only had one call which surprises him especially with the way that natural gas prices were last winter. Again, he thinks they have seen the requests spike in November. They will keep working on trying to get the word out there to more people to try and promote the program. Commissioner Meyer commented that maybe one reason for the lower number of projects for the loan program is people are generally satisfied with their homes, and perhaps considering the homes are really quite modern and contemporary compared to other communities and people are satisfied with how their homes are and there is nothing going wrong with them. ADJOURNMENT: ^ MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, to adjoum the meeting. UPON A UNANIMOUS VOICE VOITE, CHAIRPERSON COMI��RS DECLARED THE MEETING ADJOURNED AT 8:52 P.M. Respectfully submitted by, ���� �-��. l%'���- � - Denise M. Johnson Recording Secretary � 14