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01/07/2021 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION January 7, 2021 Chairperson Holm called the Housing and Redevelopment Authority Meeting to order at 7:00 p.m. MEMBERS PRESENT: William Holm Kyle Mulrooney Elizabeth Showalter Rachel Schwankl Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Wally Wysopal, City Manager Jim Casserly, Development Consultant ACTION ITEMS 1. Approval of Expenditures MOTION by Commissioner Showalter to approve the expenses as submitted. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Approval of December 3, 2020 Meeting Minutes MOTION by Commissioner Showalter to approve the December 3, 2020, minutes as submitted. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Approval of Resolution Designating Official Depositories. Paul Bolin, HRA Assistant Executive Director, stated that we are required to do this annually. Wells Fargo has been the official bank for the City and HRA for a number of years. They are responsible and easy to work with and flexible with investment management. Staff recommends approval of the resolution designating Wells Fargo as the official depository for the Authority. Housing and Redevelopment Authority Meeting of January 7, 2021 2 MOTION by Commissioner Showalter to approve the Resolution designating official depositories. Seconded by Commissioner Mulrooney. Commissioner Backlund commented that in three places it mentions that it will be signed by two individuals and should be three. Mr. Bolin said staff would make that correction. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. Approval of Resolution Designating Official Newspaper. Paul Bolin, HRA Assistant Executive Director, said that the City and HRA designate an official Newspaper. The Blaine/Spring Lake Park/Columbia Heights/Fridley Life (formerly the Fridley Focus) and the Minneapolis Star Tribune have been the official newspapers for a number of years. Both are available locally and meet the requirements found in MN Statutes. There have been issues with the Blaine/Spring Lake Park/Columbia Heights/Fridley Life publishing some items in a timely manner, so staff is recommending the designate only the Star Tribune as the official newspaper. MOTION by Commissioner Showalter to approve the resolution designating official newspaper. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. Commissioner Backlund asked if it would be appropriate to have notice in the Life paper that our newspaper of record is the Star Tribune so those who may be looking in the Life would know to look in the Star Tribune. Chair Holm thought something could be written up in the Fridley quarterly newsletter. Mr. Bolin replied that staff will work with Dan Tienter, City Finance Director. Whatever they do for the City we will ask them to include the HRA as well. 5. Approval of Changes & Additions to Housing Programs. Mr. Bolin stated that the intent of the program is to provide more incentive for Fridley’s multifamily property owners to make substantial exterior and interior improvements to their rental units. Exterior improvements would include façade upgrades, parking improvements, signage, lighting and other improvements necessary to comply with applicable codes. Interior improvements would include structural, ADA upgrades, fire prevention, utility upgrades, flooring Housing and Redevelopment Authority Meeting of January 7, 2021 3 fixtures, relocating walls, plumbing, painting and HVAC. Assistance provided y HRA would be a loan carrying 2% interest and 20-year term, up to $50,000 and HRA to pay closing costs (CEE Fees). The advantage of HRA loan product at 2% is that funds have no income limit, encourages reinvestment across the entire community, and provides additional affordable for correcting code issues. MHFA loans are currently ranging from 2%-3.75% depending on the term of the loan with an income limit of $154,600. CEE will match resident with best loan for their situation. The interest rate on Manufactured Home Loan will also be lowered to 2%. Currently the only down payment assistance available to Fridley residents is through the Minnesota Housing Finance Agency (MHFA). Down payment loans through the MHFA require that you obtain your first mortgage through them to be eligible for their interest bearing down payment loans. The intent of this new program being proposed is to provide an additional incentive for first time home buyers to move to Fridley. While no interest will be earned on the loan and no regular payments made, the Authority will eventually recover its funds to revolve back into the community. Loan Terms / Eligibility  Loan amounts up to $5,000  0% annual percentage rate (APR)  Income limit of 110% of Area Median Income (AMI) based on household size  The loan is deferred until the property is sold, refinanced, transferred or is no longer owner- occupied  Financing is secured by a mortgage on the property  Closing costs apply  Borrower must be considered a first-time homebuyer as defined by someone who hasn’t owned a home within the last 3 years.  Prior to closing the homebuyer(s) MUST attend a Home Stretch workshop or other valid homebuyers course offered through an approved counseling agency by the US Department of Housing and Urban Development (HUD).  1 to 4-unit, owner occupied buildings  Single family, townhomes, duplexes, condominiums, and properties held in a trust are eligible The intent of the Residential Paint Rebate Program is to eliminate blight, preserve and improve appearance of neighborhoods by providing rebates of up to $500 for cost of materials and supplies for exterior painting of eligible homes, by low- and moderate-income families. Maximum rebate of $500 for single family homes, up to $350 per unit (not to exceed $1,400) for rental properties. Eligible Applicants:  Homeowners: Owner occupant, holding title to the property. Household Income may not exceed 110% of Area Median Income (AMI)  Owners of Rental Property: Up to 4-unit buildings, owner must Life in building and income does not exceed 110% AMI Housing and Redevelopment Authority Meeting of January 7, 2021 4 The intent of the Front Door Grant Program is to incentivize homeowners to increase the “curb appeal” of their home (and the City) by making improvements on the street side of their home. Grants are provided to pay for a portion of the improvements. Project tasks are considered either Basic or Beautification and the Grant amount varies based on type of work being completed. Grant amount ranges from $1,000 up to $5,000. Eligibility:  Owner Occupied, Homesteaded, single family / townhome / duplex / condominium  Current on property taxes  Property valued at less than $400,000  Project must be visible from street in front of home  Work may not begin until project approval by City and HRA  Have not received prior Front Door Grants, in the current year  Projects must include at least one item from the Beautification Project list The intent of the Fridley Foundations Grant is to provide financial incentives for homeowners undertaking large remodeling projects valued at $35,000 or more. Financial incentives include a grant up to $5,000. Program is intended to play off the Authority’s previous Fridley Foundations Remodeling Demonstration Program. Requirements / Eligibility:  Must be homesteaded, owner-occupied homes at least 20 years old  No income limits for participants in this program  Consultation with an architect or designer to discuss and help plan your remodeling ideas. As conditions allow, (likely in 2022) the Authority can sponsor open houses to showcase improvements made by this program and inspire others to reinvest in their Fridley homes. The Authority does have adequate resources to reliably provide a five-year program of approximately $1M per year for these proposed changes and program additions. The resolution will be emailed separately, early next week. Staff recommends approval of the resolution adopting the changes and additions to the City’s Housing Programs. Chair Holm said that the advantage of the front door program is that it is a grant rather than a loan, and not very large amounts. Mr. Bolin replied that it is more like a rebate, the homeowner invests first. Commissioner Schwankl asked if the senior zero percent deferred is part of the overall housing programs and if that program should be increased because it is very successful and runs out of funding every year. Mr. Bolin replied that funding would be kept at $250,000 for now. Chair Holm asked if there was a waiting list for that program. Mr. Bolin replied that in 2020 they ran out of funds by September and there are 2-3 seniors waiting for new funding to arrive. Housing and Redevelopment Authority Meeting of January 7, 2021 5 Commissioner Showalter thought midway through next year the programs should be evaluated to see if any limits should be increased, like the senior loan programs. Mr. Bolin replied that with the senior loans, we don’t know when they will be paid back and to date, we have not been paid back on any of the senior loans that have been offered. Commissioner Schwankl said that it makes sense why the senior program is so successful as sometimes changes need to be made in order for them to stay in their homes. Mr. Bolin said that smaller loans could be made if needed. The types of improvements seniors are making are typically expensive upgrades. Chair Holm noted that the main issues with the senior loans is that they are deferred, and we don’t know when we would be paid back so creates a cash flow issue. Mr. Bolin agreed and added that these loans are impossible to account for and plan on when we would be getting that money paid back. Commissioner Showalter asked if the borrowers for the senior loans are eligible for the project grant program option. Jim Casserly, Development Consultant, didn’t see anything prohibiting that option. MOTION by Commissioner Showalter to approve the Resolution to approve the Changes & Additions to Housing Programs. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. Approval of Amendment to Loan Origination Agreement – CEE Mr. Bolin stated that the HRA has contracted with CEE since 1996. Program administration includes marketing, processing applications, determining eligibility and customizing loans to individual needs. CEE provides residents technical assistance on remodeling, energy conservation, and indoor air quality. CEE-HRA partnership allows residents to access other loan dollars (MHFA and Met Council). Changes to existing contract would be the administrative fee of $2,500 annually and the term extended through 12/31/2023. Staff and residents have been pleased with CEE and staff recommends that HRA approve the contract extension and changes through 12/31/2023. MOTION by Commissioner Schwankl to approve the Amendment to Loan Origination Agreement – CEE. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. Housing and Redevelopment Authority Meeting of January 7, 2021 6 7. Approval of Agreement to Continue Home Energy Squad Visits - CEE Mr. Bolin stated that the CEE has partnered with the City since 2014 to provide home Energy Squad that helps residents make homes more energy efficient. The Authority has split visit costs with residents. Starting in 2021, CEE is offering two visit options to Fridley residents. The standard visit including blower door tests and infrared review of insulation will remain at $50. The new “Energy Saver” visit, (does not include blower door test or infrared technology) will be an option for $35. Staff recommends extending the Home Energy Squad partnership with CEE through December 31, 2023. MOTION by Commissioner Schwankl to Approve the Agreement to Continue Home Energy Squad Visits – CEE. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATIONAL ITEMS 1. Housing Program Update Mr. Bolin reported there was one senior loan that closed in December making a total of 25 loans year to date. No remodel advisor visits making 10 year to date, down from 17 in 2019. Here were 45 Home Energy Squad visits for 2020, down from 59 in 2019. ADJOURNMENT MOTION by Commissioner Backlund to adjourn. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:07 PM. Respectfully submitted, Krista Peterson Recording Secretary