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HRA 01/07/2010 - 29806CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION JANUARY 7, 2010 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:30 p.m. ROLL CALL: MEMBERS PRESENT: William Holm Pat Gabel Larry Commers Stephen Eggert John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Richard Pribyl, Finance Director William Burns, City Manager Chairperson Commers welcomed new member Commissioner Eggert to the Housing and Redevelopment Authority. ACTION ITEMS: 1. Approval of Expenditures MOTION by Commissioner Gabel to approve the expenditures as presented. Seconded by Commissioner Holm. Commissioner Holm noted that there are five housing improvement loans which is a good sign. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of December 3, 2009, Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Approval of Preliminary 2010 Budget MOTION by Commissioner Gabel to remove the Preliminary 2010 Budget from the table. Seconded by Commissioner Meyer. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE ITEM REMOVED FROM THE TABLE Paul Bolin, HRA Assistant Executive Director, provided highlights of the HRA 2009 financial activity and an overview of the proposed 2010 budget. The packet included Cash Balances as of 11/30/09, General Fund, Housing Fund and TIF Districts 2009 Activity through 11/30/09, the Final 2009 Budget and the Proposed 2010 Budget. Mr. Bolin said that the HRA Budget is divided into three categories; a General Fund (Administrative and Operating Expenses), a Special Revenue Fund (Housing Loan Program) and a Capital Outlay Funds (Tax Increment Districts, Redevelopment Proj ects and Housing Replacement Program). Mr. Bolin reviewed the 2009 Activity Highlights which included the decertification of the Center City Tax Increment District, the property acquisitions in Gateway Northeast, the demolition of Gateway Northeast properties and the legal work necessary for Northstar. Mr. Bolin said that revenues are projected at a total of $2.SM for 2010, which is an $881,777 decrease from 2009. This is primarily driven by Center City (TIF #1) becoming inactive at the end of 2009. The total expenses are projected at $5.4 M for 2010, which is a$726,000 increase from 2009. This increase is caused by the redemption of the 2004B bonds in the amount of $1,175,000. Mr. Bolin said that the total proj ected capital outlay expenditures for 2010 Funds include: General Fund $800,000 Housing Loan Programs $120,000 Lake Pointe (TIF #6) $667,800 57th (TIF #16) $24,465 T� #i9 �T� #i9� $119,600 Mr. Bolin said that the total debt service payments in 2010 involve the redemption of the 2004B bonds and the return to the County of all excess cash balances at that time from TIF District #1. The projected scheduled debt payment is $580,062 and the projected payoff of 2004B 2/1/10 is $1,175,000. Commissioner Gabel asked about the Miscellaneous Revenue and what kind of interest rate is being earned and what the investment is in. Rick Pribyl, Finance Director, said that the City is restricted in what can be invested in based on State Statute. Interest rates are around 1-1 1/2%. Chairperson Commers asked about the cash balances and if the monies the city is using for bond redemptions will be a reduction from the cash balance. Mr. Pribyl answered yes, once the bonds have been turned back the balance will be $7.SM. Chairperson Commers asked what the amount is that will be returned to the county. Mr. Pribyl said he would not have an exact number until February. Chairperson Commers asked about the allocation between HRA and the City with respect to the staff time etc. and if it has changed for 2010. Mr. Pribyl answered no, the rate remained the same. Chairperson Commers asked what the Capital Outlay of $800,000 was for. Mr. Bolin said that was to purchase additional properties in the Gateway Northeast Area. Commissioner Gabel said she had heard the City Council talk about going to the Capitol to attempt to get legislation in terms of scattered site housing tax increment districts. Mr. Bolin said that is correct, on Monday night there was talk with the legislative delegation. Scott Hickok mentioned plans to be down there again this year for special legislation to go out and purchase foreclosed homes to set up scattered home tax increment districts. Chairperson Commers asked how much revenue would be returned to the city after the bonds are called. Mr. Pribyl said between $400-450,000. William Burns, City Manager, asked where the demonstration project would be budgeted in 2010. Mr. Bolin said it would be out of the Housing Fund as there are excess funds in that program. Commissioner Gabel questioned the mowing charges. Mr. Bolin said that the charges will go down a little in 2010 because staff was mowing the Northstar parking lot areas. He agreed that the HRA does have a lot of property to mow. MOTION by Commissioner Gabel to approve the Preliminary 2010 Budget. Seconded by Commissioner Meyer. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEMS: 1. Home Improvement Demonstration Program Paul Bolin, HRA Assistant Executive Director, said that last month HRA authorized staff to move forward with finding a home. Staff continues to look for a structurally sound rambler that is vacant, in a visible location, and priced correctly. Some problems that arose are finding homes that don't have pending offers, many homes are currently being rented or otherwise inhabited and not many available homes are in visible locations. Staff remains optimistic that the right home will be found soon. Chairperson Commers asked how many homes were on the foreclosure report. William Burns, City Manager, thought there were about 120-130 houses per year in foreclosure. The County said one of the biggest problems is the $8,000 first time buyer incentive and people are paying more than what the home is worth, which is competing with the Housing Revitalization Programs. Mr. Bolin said that a lot of the homes staff has tried to look at have a number of offers pending so it takes months to get answers back on these offers. Chairperson Commers asked if there were any updates with the litigation regarding East Bethel. Mr. Bolin said that they are still waiting for the day in court and that there is not any update since November. Chairperson Commers asked if they County HRA made any contributions to Fridley. Dr. Burns said that County used federal money to purchase a house in Fridley under the Neighborhood Revitalization Program. Mr. Bolin said that Anoka County also looked at another property earlier this week The County is running two programs. In one of the programs homes are purchased and demolished and the lot will eventually be sold. The other program is a housing rehab program where homes are purchased, brought to minimum code level and put back on the market. Commissioner Eggert said that he has been involved in buying foreclosed homes and recalled even after the purchase agreement it took the bank several months to close. He thought timelines for this proj ect, to bring to market in May, were aggressive. He asked staff to share the schedule and drop dead dates for the proj ect. Mr. Bolin said that staff hoped to have the property under control in February, find a re-modeler for the proj ect, get the remodeling underway, look for broker realtor to staff open houses and sell the property. Staff is ready to aggressively act on this project and would like to have this complete sometime in May. Commissioner Eggert asked if brokers advise it is feasible to close that quickly on these types of homes. Mr. Bolin said that staff purposely stays away from homes with several offers and HRA pays cash which makes the transaction go faster. 2. Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director, said that the remodeling advisor visits are picking up again. In 2006 there were 33 visits, 26 in 2007, 16 in 2008 and in 2009 there were a total of 18. Total HRA Loans were 22 in 2006, 17 in 2007, and 18 in 2008 and 2009. Mr. Bolin said that the changes HRA made this past year in the program definitely made a difference to increase the number of loans. Staff has been looking to see what can be done to assist people that have fallen behind. HRA will likely never recover two of the six loans. The homes were foreclosed on but the files were kept alive incase something comes in the future on those homes. Of the last four, three of the people went through forbearance agreements and we are getting closer to contacting the last homeowner. Commissioner Gabel asked what kind of agreements are being made. Mr. Bolin said that all the circumstances are different but staff is mostly working with the terms. The debt is not forgiven but the terms may be extended or extra payments allowed to get caught up etc. Commissioner Gabel asked if the interest rates were compatible. Mr. Bolin said that Fridley's rates are 1'/4% below other rates, around 5%, which is competitive with banks and credit unions for home equity homes. Commissioner Meyer asked what types of remodeling proj ects were happening; it looked like replacement of windows and doors was popular. He asked what types were being installed. Mr. Bolin said that homeowners were looking for the tax credit on certain types of windows. The types of improvements that are being seen are necessity items and those that improve home efficiency. NONAGENDA UPDATE: Northstar Rail Chairperson Commers asked if the ridership in the rail has increased with the recent cold weather. Paul Bolin, HRA Assistant Executive Director, said ridership did go down a bit but after the holidays. The Police Chief has been riding in from Big Lake every day and reported there has not been any crime in the lots or in the tunnel. Chairperson Commers asked if there was any way to measure ridership in and out of Fridley. Mr. Bolin said that the only way to measure would be to do a manual count. Dr. Burns has had conversations with Medtronic and Onan and Medtronic is interested in a shuttle. William Burns, City Manager, said that Medtronic has a strong interest on it but did not get a very good return on the survey. Medtronic will have a meeting with Metro Transit to discuss the prospect of a shuttle. Metro Transit did revise their bus schedules to make accommodations for people taking the shuttle. Gatewav Northeast Paul Bolin, HRA Assistant Executive Director, said that the demolitions have occurred and the contractor will wait until spring to complete the proj ect. The contractor wanted to complete more this winter but now there is too much snow. City engineering staff has been very helpful, inspecting the sewer and water lines etc. and also helped with the specs to go out for bids. Chairperson Commers asked about the expected timing for the proj ect and if the proj ect was in line for completion this spring. Mr. Bolin said that they wanted everything done by the beginning of December but with the snow, they now have until 5/15 to get the work done. Commissioner Eggert asked about the large pile of black dirt on site. Mr. Bolin said that is part of the top soil that will go down on the site. This is an interesting process and there is never a wasted trip for the trucks. The process may be taking longer than we had hoped but there are no recyclable pieces making it to the landfill. Fridlev Medical Clinic Paul Bolin, HRA Assistant Executive Director, said that the construction is ready to go. Chairperson Commers asked where we are on the Columbia Arena resolution that is currently active. Mr. Bolin said that item was tabled and Attorney Casserly stated that no action is required at this time. Fence Paul Bolin, HRA Assistant Executive Director, said that another accident happened with the fence; a person was at a red light and was rear ended. The car insurance company will pay to fix the fence. Cub Foods Paul Bolin, HRA Assistant Executive Director, said that Triland and Cub were in last week going through applications and site plans. This item will go to the Planning Commission the last week of January. Commissioner Eggert said that he has some experience in working with the phasing of projects, and in phasing you have to be concerned with what condition you are leaving the land and when the work will be done. He was concerned if buildings are not built with the remodel what the outbuildings would look like in the interim. Mr. Bolin said that they are trying to reuse most of the east wall of the current Cub Foods building and the entire south wall. A new liquor store would be built on the east side, once that is moved they would start building Cub Foods in the existing Gander Mountain. With all this in consideration, they are still showing the west half of the building as it exists. So there are concerns about the phasing that the Planning Department will have to work with Cub Foods on. Dr. Burns asked if these issues would be addressed at the public hearing scheduled for February gtn Mr. Bolin answered yes, unless the petitioner withdraws their request. Fridlev Messa�e Center Paul Bolin, HRA Assistant Executive Director, said that this has been installed next door and the City is the keeper of the computer that can change the messages. This is a nice addition to the city. Gatewav Northeast Paul Bolin, HRA Assistant Executive Director, said that yesterday Mr. Kim, owner of Tae Kwan Do, contacted Dan Wilson to see if HRA is still interested in purchasing his property. Almost a year ago staff was instructed not to spend any more time on this property as staff had made two offers to Mr. Kim in the past with no reply back Staff has told Mr. Wilson to respond to Mr. Kim on our behalf and explain that the HRA has asked staff not to spend any more time on this. If Mr. Kim is serious to discuss selling his property, he should draft letter to HRA with his willingness to work with HRA and bring forward some numbers for discussion sake. Chairperson Commers asked staff to check with the sources in Blaine to see where Mr. Kim is on the purchase of the Blaine building. Commissioner Gabel said that she still felt very strongly for staff not to spend any more time on this. If Mr. Kim has something to say he can put it in writing; the land is not worth what it was two to three years ago. Commissioner Eggert agreed that property values have dropped because there is no demand. ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:45 P.M. Respectfully Submitted, Krista Monsrud, Recording Secretary