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HomeMy WebLinkAbout2026.02.23 CCM WORK02/23/26 -1- MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA WORK SESSION FEBRUARY 23, 2026 CITY HALL – COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council/Economic Development Authority (EDA) met in Work Session called to order by Mayor/President April Graves at 8:02 p.m. ROLL CALL Mayor/President April Graves and Councilmembers/Commissioners Dan Jerzak, Kris Lawrence- Anderson, Teneshia Kragness, and Laurie Ann Moore. Also present were Interim City Manager Daren Nyquist, Interim Community Development Director Jason Aarsvold, City Attorney Siobhan Tolar, and City Clerk Shannon Pettit. ACTIVE DISCUSSION ITEMS DISCUSS POTENTIAL RENTAL ASSISTANCE THROUGH CAPI USING LAHA FUNDS Mr. Nyquist stated that Interim Community Development Director Jason Aarsvold would come back to update and lead them through this conversation, as this is intended to be an open discussion and answer period. He noted that several cities in the Metro area have been using LAHA funds for rental assistance in response to Operation Metro Surge to help those impacted by it. He said Mr. Aarsvold would discuss what LAHA funds can and cannot be used for and what that framework looks like. Mr. Aarsvold said there is an opportunity to use the Local Affordable Housing Account (LAHA) for the purpose that Mr. Nyquist stated. He said LAHA funds are the sales tax that was established Metro-wide and is dedicated to municipalities based on a formula for housing, and Brooklyn Center gets north of $500,000 annually. He said this amount will change and shift depending on how much sales tax is generated. He noted that in January, about half of that money was set aside and dedicated through the CE contract for housing rehab loans. He added that there is $15,000 to $30,000 that is not programmed out and set aside for other purposes that could be used for direct assistance for folks impacted by the Metro Surge operation. Mr. Aarsvold said Brooklyn Park is doing something similar and dedicating a substantial amount to both rental assistance and business assistance, but Brooklyn Center does not have the same level of resources. He said his thought process was that these funds could be a clearing house for resources and make it a one-stop shop for folks and direct them to other places where they might find additional resources. He said the 02/23/26 -2- Council could also supplement with a program that would provide rental assistance to folks, and CAPI is going to be setting up such a program, which would be compliant with what LAHA requires, and they have the money to effectively administer that on behalf of the City. He noted that LAHA funds do not pay administrative costs and have to be used for program-related expenses, so being able to leverage another agency's capacity without additional expenses to distribute those dollars would be the most effective way to do that. He said the question really is if that is something the Council would desire to do. He said those funds would be directed at those who can demonstrate that they have been impacted by the surge, and the Council would have to define what eligibility looks like before anything would happen. He said that his Department would come back to the Council with a full accounting of what the program would mean and ask the Council for approval. The program, once approved, would then be implemented through CAPI. He stated that the intent tonight was to see, from a high-level policy standpoint, if that is something that the Council would desire to do, or preserve the LAHA funds for some other purpose. Mayor/President Graves thanked Mr. Aarsvold for bringing this to the Council to discuss. Councilmember/Commissioner Moore asked to explain what the current balance is of the additional tax that the legislature put on all of Minnesotans, or if it was just a Metro-tax. Mr. Aarsvold said it is a Metro tax, and the money is coming from. Councilmember/Commissioner Moore said it is an additional tax, and there is some magic formula that determines how much money Brooklyn Center gets. She asked what the current balance is after a year of that. Mr. Aarsvold said he does not have the exact numbers in front of him, but roughly $500,000 was allotted to Brooklyn Center, and about $250,000 has been set aside for the CE contract. He said there is a balance there, some of which was dedicated through some of these conversations with the housing developers that he mentioned, and the Opportunity Site. He added that the City gets this money every year, and thinks it would be easy to spare $20,000 to $30,000 and still not compromise efforts on the Opportunity Site. He continued that this money has to be spent within a three-year period or else the City risks not being able to get another allocation, or having it pulled back by the state. Councilmember/Commissioner Moore said this sounds like another administrative nightmare, not unlike the long-term household resident rehab loan program. She said she does not know where the City is with that, but there was a waitlist for that, and the process was cumbersome even though someone else was handling it. She asked if that is still the case for the rehab loan program for residents. Mr. Aarsvold said his understanding was that part of the wait list issue was a lack of funding. He said CE does a pretty good job of actually handling things, so the City is pretty hands- off. In fact, with a Staff of this size, they have to leverage outside assistance. Councilmember/Commissioner Moore said she understands the City needs outside assistance, but are funds going out to residents for loans. Mr. Aarsvold said $250,000 will go out based on past experiences with demand, to fix up homes in the City, but there is the rest of this balance, and the process would be similar for this other program. He explained that money would go to CAPI, and they would be in charge of administering it, and the City would just be transferring those dollars to them. He added that the City has to maintain records that show they appropriately spent the LAHA money, and CAPI would prepare that documentation for the City's records. He said that, as far as the administrative burden for the Staff, he thinks it would be relatively minimal. He said 02/23/26 -3- he does not know what that would look like from the renter side, but he is not concerned about an additional burden from a Staff perspective. Councilmember/Commissioner Moore said that while she is not opposed to CAPI administering those funds, and Brooklyn Park has $600,000 to administer for rentals and businesses, and while Brooklyn Center does not have those resources, administratively, she does not know how folks are even going to know these funds are available. She said if CAPI distributes this money, are they going to market it to everyone in the City that might have challenges paying their rent. Mr. Aarsvold said his understanding is that details would be forthcoming, but CAPI has a plan in place, and there is money coming from other places that they already have, and they would be able to direct those dollars to Brooklyn Center residents who have been impacted. Councilmember/Commissioner Moore said it is really up to the Council to have a consensus to support this, and how much money will be allotted. Mr. Aarsvold said tonight is about discussing the idea of doing it, and if the answer is yes, then City Staff would bring back details for the Council to review and approve prior to the program being established. Councilmember/Commissioner Kragness said she would be interested in having a list of the programs that the LAHA funds could be used for, and then determining where the greatest need is for the community. She said this is to ensure that Council is not just creating programs, to create more programs, and can go after the greatest needs, and if the greatest need is home rehab, or rentals, or a combination of the two. She said she would like to see what the actual numbers and percentages are. Mr. Aarsvold said he could include that information, and the challenge is that the money is very broad, and it allows cities to create a program of their own making as long as it meets some broad criteria. He said he agrees that the City should not start a program that does not serve the needs of the community, and that is why the funds are so open, so cities can consider how best to use those funds or advance their goals. He said he could provide a list of things that other cities are doing with their funds, but that list will not be exhaustive and may not address the specific needs of Brooklyn Center. Councilmember/Commissioner Kragness said there are a lot of homeowners in Brooklyn Center, and with the upkeep and the maintenance of a home, and the increase of taxes and utility rates taking those funds that would have normally been set aside by residents to do upgrades or maintenance on their homes, the rehab loans would be very beneficial. She said she would be very curious to find out what the greatest need is for the City. Councilmember/Commissioner Jerzak asked if there has been a survey on what the needs might be, and it might be too early to find out from the landlords, which the City has access to, to see what the effects have been from Metro Surge, and how many defaults have happened. He said he is not in favor of creating programs just to create programs or to duplicate efforts that may or may not come out of the state. He said previously, during COVID-19, when evictions were filed, there were people on speed dial to help out. He said he would agree 100 percent if this body decided to do it, he would not be opposed if Mr. Aarsvold could demonstrate the need, and that it would not be a burden to the City Staff administratively, then the Council could determine that CAPI should administrate this program because the need is there. He said he tends to go back for more 02/23/26 -4- permanent monies with the housing rehab, but he would have to see more data. He added that $30,000 does not go very far, and it would have to be determined how long that money would be available, and if there are several other programs that might address these issues. He said he does not think the City can depend on anything out of the legislature, as bifurcated as it is this year, and the legislature is just now starting to talk about these issues. Councilmember/Commissioner Lawrence-Anderson said she would be more inclined to support the home rehab loans, with the ages of the homes in the City being built around 1958; she herself needs new gutters and new windows. She said she is curious why CAPI would administer this program. Mr. Aarsvold said it is partly a matter of convenience; they have money to pay for those things and the ability to do that, and he is not aware of other agencies in the community that are doing that locally, and they are familiar with the community. He stated that it would not have to be CAPI, but it seems like, to date, that would be the most efficient way to do a program like this. Mayor/President Graves said she hears what some of the Councilmember/Commissioners are saying about need, and she knows that there is still a need for that home rehab program and she does not anticipate that is going away, but from what she has heard from community and organizations like CAPI who are more tapped in, in many ways than City Staff and Councilmember/Commissioners are to what the needs specifically are for the immigrant communities are, but she is favor of it. She said she knows $30,000 is a drop in the bucket, and she does not remember exactly what the amount is that goes to the home rehabilitation program per person, but she is guessing that $30,000 would only do maybe two rehabs. She said it only makes sense to do what they can with their ability as a City, and she wished they could do more. She stated that there might be other programs that are being lifted up, for instance, the Minneapolis Foundation has done some work as well, but the need is large and there. She added that she hopes the state will provide some support to businesses and residents that have been impacted, and that is part of what she has been advocating for at the Capitol, but the government moves slowly and sometimes not at all. She said that as a Council, they should do what they can, and she realizes the rest of the Council wants more information. She stated she wants it to be known that she is 100 percent in favor of sending that money to CAPI and ensuring that they are helping in any way that they can. She said she hopes that the Staff have what they need, and know what to bring back for review to the Council. ADJOURNMENT Mayor/President Graves moved, and Councilmember/Commissioner Kragness seconded the adjournment of the City Council/Economic Development Authority Work Session at 8:17 p.m. Motion passed unanimously.