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HRAM 11/03/2016 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION NOVEMBER 3, 2016 Chairperson Pro Tem Gabel called the Housing and Redevelopment Authority Meeting to order at 7:00 p.m. MEMBERS PRESENT: Pat Gabel Stephen Eggert Gordon Backlund MEMEBERS ABSENT: Larry Commers William Holm OTHERS PRESENT: Wally Wysopal, City Manager Paul Bolin, HRA Assistant Executive Director Shelly Peterson, Finance Director Jim Casserly, Development Consultant Action Items: 1.Approval of Expenditures MOTION by Commissioner Backlund to approve the expenditures. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 2.Approval of September 1, 2016 Meeting Minutes MOTION by Commissioner Backlund to approve the minutes as presented. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 3.Approval of October 6, 2016 Meeting Minutes MOTION by Commissioner Backlund to approve the minutes as presented. Seconded by Commissioner Eggert. Chairperson Pro Tem Gabel requested the following changes: th hey they Page 3, 7 paragraph, “Mr. Hyde stated …” thth won one Page 4, 4 paragraph, 4 sentence, “Here they have for people” Housing and Redevelopment Authority Meeting of November 3, 2016 2 th may Page 5, 9 paragraph, “Commissioner Gabel stated according to the MPCA they still liability even if they have agreed to some they may still have have extensive liability …? rdrd what Page 7, 3 paragraph, 3 sentence, “..talking about the single-level homes such as those in Blaine.” UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED AND THE MINUTES APPROVED AS AMENDED 4.Approval of 2017 HRA Regular Meeting Dates MOTION by Commissioner Eggert to approve the 2017 HRA Regular Meeting Dates. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 5.Approval of Preliminary 2017 HRA Budget Shelly Peterson , Finance Director, stated that the Draft Budget is divided into 2 categories. The General Fund – administrative and overhead costs and Housing Loan Fund Program – housing related programs and services. The Capital Outlay Funds were removed from budget as TIF funds have little flexibility and annual cash projections better anticipate balances. Ms. Peterson presented the following: Proposed Revenue Budget 2015 Actual 2016 Budget 2016 Revised 2017 Proposed Taxes 357,968 397,022 397,000 408,400 Interest on Investments 46,021 20,000 20,000 20,000 Lot lease for Fairview 10,400 9,600 9,600 9,600 Medtronic Land Re-pymt 123,983 124,000 124,000 124,000 Inter-fund Loan Interest 164,500 206,800 Admin Fees 90,417 62,100 100,000 120,000 Development Grants 999,973 1,500,000 1,500,000 2,000,000 1,270,794 1,715,700 1,918,100 2,480,400 2017 General Revenue Highlights include: • Property tax levy increase of 2.87% or $11,400 • 2016 Revised budget and 2017 Proposed budget include interest received from the Gateway NE & BAE TIF inter-fund loans • The 2017 Proposed budget includes $2 million in pass-through Grants from DEED and Met Council related to the BAE project Housing and Redevelopment Authority Meeting of November 3, 2016 3 General Proposed Budget 2015 Actual 2016 Budget 2016 Revised 2017 Proposed Salaries & Benefits 152,289 155,200 142,200 156,900 Supplies 200 2,500 2,500 200 Professional Services 861,606 315,000 315,000 321,300 Developer Assistance 999,973 1,500,000 1,500,000 2,000,000 Debt Service 52,653 54,300 54,300 56,400 Other 82,027 21,700 21,700 2,500 2,148,748 2,048,700 2,035,700 2,537,300 Net Income (loss) (519,986) 64,022 279,400 351,500 Expenditure Highlights include: • A 2% cost of living adjustment for 2017 • A 10% increase in professional services (primarily due to anticipated legal expenses) • The 2017 Proposed budget includes $2 million in pass-through Grants from DEED and Met Council related to the BAE project Housing Loan Program Proposed Budget 2015 Actual 2016 Budget 2016 Revised 2017 Proposed Interest on investments 18,606 18,000 18,000 18,000 Interest on loans 37,748 50,000 33,300 33,300 Miscellaneous revenues 21,631 12,000 20,000 21,400 Total Revenues 77,985 80,000 71,300 72,700 Supplies 155 0 0 200 Professional Services 23,097 60,500 67,500 71,000 Total Expenditures 23,252 60,500 67,500 71,200 Net Income (loss) 54,734 19,500 3,800 1,500 Highlights include: • Anticipated revenue for 2017 reflect a reduction in anticipated mortgage revenue • Expenditure budget includes additional expenses related to the Home Show. • Staff is also projecting similar expenditures in 2017 for Home Energy Squad Visits and Remodeling Advisor Visits Ms. Peterson said that staff recommends approval of the preliminary budget. Your questions and suggestions will be incorporated into a final budget to be presented December 1. Housing and Redevelopment Authority Meeting of November 3, 2016 4 Commissioner Eggert was concerned about taking money out of the loan programs for other things but it is building up again. Ms. Peterson replied that the Authority does have nice reserves in the housing loan program and reserves in the receivables. Chairperson Pro Tem Gabel would like to see the different amounts in the TIF districts. Ms. Peterson replied that those are best looked at through the reports Mr. Casserly works with Greg Johnson to put together for cash flow planning. Commissioner Eggert asked for explanation of the last page that summarizes everything. Ms. Peterson replied that it shows where the anticipated fund balance will be for all the funds. We are anticipating $10m in fund balance from cash or any receivables owed to the HRA. $6.293m total fund balance ending 2017. Jim Casserly , Development Consultant, added that the amounts of the cash balances can be used for other programs. There are some cash balances that are restricted where the cash in those districts can be used like only for specific activities. Unrestricted cash balances are about $6.5m. Ms. Peterson added that is primarily in the housing loan program and the general fund. Chairperson Pro Tem Gabel was looking for money for the Columbia Arena project because we will need money for that. Mr. Casserly replied yes, the policy is that you make advances to projects through internal financing, therefore there are the interfund loans. That is why the general fund is what it is because that is where the funds were borrowed from in the first place. Once TIF districts begin to make money the funds go back to the general fund. The general fund will have revenue coming in for several years because of the loans that were given from that fund. We want to finance investments as inexpensively as possible and we will have time to look at ways to do that. Chairperson Pro Tem Gabel said that the Authority is in a decent position to go forward with those things because of the revenue. I like seeing the different districts because sometimes the money can be pooled and sometimes it can be moved. Mr. Casserly replied that as districts reach their end, whatever revenues that can be used for legitimate expenses will be spent or the funds will go back to the general fund. MOTION by Commissioner Eggert to approve the Preliminary 2017 HRA Budget. Seconded by Commissioner Backlund. Housing and Redevelopment Authority Meeting of November 3, 2016 5 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY 6.Locke Park Pointe / City Hall / Columbia Arena Update Paul Bolin , HRA Assistant Executive Director, stated that on September 16, staff released a request for qualifications (RFQ) to begin the process of selecting a developer/partner for private development around the proposed municipal campus. In total, 17 developers requested copies of the RFQ and supporting documents. Eight different developers were represented in a mandatory, pre-submittal meeting on October 5. Mr. Bolin said that in the days leading up to the RFQ submittal deadline, what we heard from a few developers, is that they are/were too busy to get responses to us and that the uncertainty surrounding the construction of City Hall causes some concern. Mr. Bolin said at noon on Wednesday, October 19, we had RFQ responses from one developer, Dominium. While they are class leaders in senior buildings, their vision for the site did not extend beyond them building a 200 unit senior building. They did not bring any partners forward to develop the rest of the site. Mr. Bolin stated that the RFQ response from Dominium did not address the entire site. To proceed with Dominium as a development partner, at this time, would require the Authority to go out and find other developers to construct patio homes and other multi-family units. With the RFQ, we were really looking for a developer or team of developers to take on the development of the entire site. We are recommending that the Authority adopt a motion rejecting the response to the RFQ received. Mr. Bolin said that staff is also recommending waiting until, at least, early January to go out with a new RFQ. This timeframe will work better for the developers that are scrambling to finish projects this fall, but more importantly we will know with much more certainty that City Hall is a go or not. The Council is authorizing the bond sale for construction of City Hall on November 14 and residents will have 30 days to gather enough signatures to put the issue up for special vote. If there is not a successful petition, we can issue the RFQ in January. If the signatures are gathered, and a special election forced, we would delay issuing the FRQ until the issue is decided, likely in March. Staff recommends the Authority approve a motion to reject the October 19 RFQ Response received from Dominium, for the Locke Park Pointe redevelopment. Chairperson Pro Tem Gabel agreed that one developer is not enough and understands how other developers may be cautious about a development that may or may not go forward. Commissioner Backlund asked if staff would debrief with the non-responsive people. Mr. Bolin replied that staff has talked to several of them that showed up for the meeting on th October 5. The reasons they didn’t respond were timing, they are too busy, and the uncertainty if city hall will be built or not. Housing and Redevelopment Authority Meeting of November 3, 2016 6 Commissioner Backlund asked what would give us a better feeling for responsiveness. He doesn’t want to repeat the same process and expect a different result. Wally Wysopal, City Manager, replied that the timing of it was an issue and greater certainty of the city hall portion. Once it is confirmed city hall would be built that would grant more certainty that the rest of the development will be doable. Commissioner Backlund confirmed that until we tie down the certainty of city hall, people won’t respond. Mr. Bolin replied that we don’t plan to go out with an RFQ until that is known. Commissioner Eggert asked what is the site plan for the developer without the city project? It can change tremendously. Chairperson Pro Tem Gabel agreed that once they have something they can count on then it’s worth the effort to put the time and energy into it. That will be avoided once they know the development will be going forward. Right now, that is unknown. Mr. Bolin thought staff would get a better response on bids if they wait until after January; or March if this goes to special election. MOTION by Commissioner Eggert to reject the response from Dominium. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIOUSLY Informational Items: 1.CEE Housing Programs Update Paul Bolin, HRA Assistant Executive Director, reported that there was one loan last month making 17 total for year-to-date. Last year this time we only had 6 loans. The changes that the Authority made to its loan eligibility are paying off. Remodeling Advisor visits had zero last month making 11 year-to-date. Last year at this time only 3 had been completed. Home Energy Squad visits had 4 in October making 54 year-to-date. This program continues to be successful. An insert is going out in the utility bills and the first batch went out Monday. People should start seeing those in their mailbox in the next few days. Adjournment: MOTION by Commissioner Eggert to adjourn. Seconded by Commissioner Backlund. Housing and Redevelopment Authority Meeting of November 3, 2016 7 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:45 P.M.