HomeMy WebLinkAbout1997 04-28 EDAP Regular Session Public Copy
• EDA AGENDA
CITY OF BROOKLYN CENTER
April 28, 1997
7 p.m.
L Call to Order
2. Roll Call
3. Approval of Agenda
-The following items are considered to be routine by the Economic Development Authority
and will be enacted by one motion. There will be no separate discussion of these items
unless a Commissioner so requests, in which event the item will be removed from the
consent agenda and considered at the end of Commission Consideration Items.
a. Approval of Minutes
- Commissioners not present at meetings will be recorded as abstaining from the vote
on the minutes.
1. March 24, 1997 - Regular Session
• 4. Commission Consideration Items
a. Resolution Accepting Bid and Awarding a Contract, Improvement Project No. 1997-
12, Contract 19974, 53rd Avenue Development and Linkage Project, Residential
Demolition Phase I .
- Requested Commission Action:
- Motion to adopt resolution.
b. Resolution Modifying Tax Increment Financing Plan for Tax Increment Financing
District No. 03
- Requested Commission Action:
- Motion to adopt resolution.
C. Resolution Approving Modifications No. I and No. 2 to the Tax Increment Financing
Plan for Tax Increment Financing District No. 3, and Requesting the Approval of the
City Council
- Requested Commission Action:
- Motion to adopt resolution.
d. EDA Home Rehabilitation Loan Program
- Requested Commission Action:
- Discussion of EDA home rehabilitation loan program.
5. Adjournment
City of Brooklyn Center
A great place to start. A great place to stay.
MEMORANDUM
TO: Mayor Kragness, Councilmembers ody, Hilstrom, Lasman, and Peppe
FROM: Michael J. McCauley, City Manager
DATE: April 28, 1997
SUBJECT: Agenda Item No. 9f Heritage Center Open House
I will be asking to remove Item No. 9f from the April 28, 1997, Council agenda. With the
withdrawal of an application to participate by one of the participating organizations, all of the
applicants to participate in the Open House meet the criteria previously presented to the City
Council. Since the time period for outside organizations to apply has now passed, there would
be no need to discuss the participation criteria.
•
•
6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430 -2199 • City Hall & TDD Number (612) 569 -3300
Recreation and Community Center Phone & TDD Number (612) 569 -3400 • FAX (612) 569 -3494
An Affirmative ActionlEqual Opportunities Employer
DRAF7
MINUTES OF THE PROCEEDINGS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER
• IN THE COUNTY OF HENNEPIN AND THE
STATE OF MINNESOTA
REGULAR SESSION
MARCH 24, 1997
CITY HALL
CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order by President Myrna Kragness at 7:50 p.m.
ROLL CALL
President Myrna Kragness, Commission members Kathleen Carmody, Debra Hilstrom, Kay
Lasman, and Robert Peppe. Also present: Executive Director Michael J. McCauley, Public
Services Director Diane Spector, City Attorney Charlie LeFevere, and Council Secretary
Le.Ann Larson.
APPROVAL OF AGENDA AND CONSENT AGENDA
•
A motion by Commission member Carmody and seconded by Commission member Peppe to
approve the agenda and consent agenda as printed passed unanimously.
APPROVAL OF MINUTES
A motion by Commission member Carmody and seconded by Commission member Peppe to
approve the minutes of the February 10, 1997 -- Regular Session and February 24, 1997 --
Regular Session as printed passed unanimously.
COMMISSION CONSIDERATION ITEMS
RESOLUTION ESTABLISHING IMPROVEMENT PROJECT NO. 1997 -12, CONTRACT
1997 -I, RESIDENTIAL DEMOLITION. APPROVING PLANS AND SPECIFICATIONS
AND AUTHORIZING ADVERTISEMENT FOR BIDS
City Manager McCauley explained that this resolution provides for the advertisement for bids
for the demolition of five properties in the 53rd Avenue Development and Linkage Project area
as these properties have no apparent value as homes to sell to house movers. y
• 3124/97 -1-
DRAFT
RESOLUTION NO 97 -11 •
Member Hilstrom introduced the following resolution and moved its adoption:
RESOLUTION ESTABLISHING IMPROVEMENT PROJECT NO. 1997 -12, CONTRACT
1997 -I, RESIDENTIAL DEMOLITION, APPROVING PLANS AND SPECIFICATIONS
AND AUTHORIZING ADVERTISEMENT FOR BIDS
The motion for the adoption of the foregoing resolution was duly seconded by member
Carmody and passed unanimously.
ADJOURNMENT
A motion by Commission member Hilstrom and seconded by Commission member Carmody
to adjourn the meeting at 7:52 p.m. passed unanimously.
Y
President
Recorded and transcribed bv:
LeAnn Larson •
3/24/97
•
y�
MEMORANDUM
•
DATE: April 24, 1997
TO: Michael McCauley, City Manager
FROM: Scott Brink, City Engineer)f
SUBJECT: Resolution Accepting Bid and Awarding a Contract, Improvement Project No.
1997 -12, Contract 1997 -I, 53rd Avenue Development and Linkage Project,
Residential Demolition Phase I
Summary Explanation
Bids for Contract 1997 -I were received on April 17, 1997. This contract consists of the
demolition of five residential structures to provide for the initial stages of the 53rd Avenue
Development and Linkage Project. The bidding results are tabulated as follows:
Bidder Bid Amount
Kevitt Excavating, Inc. $19,763
Thomas Contracting $21,333
• Shauna Corp. $21,500
JME $22,845
DKH Excavating, Inc. $22,900
Veit Construction Co. $23,069
Carl Bolander & Sons Co. $24,000
F.W. Gartner & Co. $26,342
Herbst & Sons Construction Co. $32,500
ATS Contract Hauling $34,250
Leadens Excavating $37,500
Belair Builders Inc. $39,317.42
All bids were tabulated and the amounts submitted were added correctly. Of the twelve bids received,
the lowest bid of $19,763 was submitted by Kevitt Excavating, Inc.
Kevitt Excavating, Inc. has experience in performing the work required of this contract. Accordingly,
staff recommends acceptance of the low bid and award of the contract to Kevitt Excavating, Inca of
Crystal, Minnesota.
Recommended EDA Action
Approve the attached resolution accepting the low bid and awarding a contract to Kevitt
Excavating, Inc.
•
•
Member introduced the following resolution and moved its
adoption:
EDA RESOLUTION NO. _
RESOLUTION ACCEPTING BID AND AWARDING CONTRACT, IMPROVEMENT
PROJECT NO. 1997 -12, 02, CONTRACT 1997 -I, 53RD AVENUE DEVELOPMENT AND
LINKAGE PROJECT, RESIDENTIAL DEMOLITION PHASE I
WHEREAS, pursuant to an advertisement for bids for Improvement Project No. 1997-
12, bids were received, opened, and tabulated by the City Clerk and Engineer, on the 17th day of
April, 1997. Said bids were as follows:
Bidder Bid Amount
Kevitt Excavating, Inc. $19,763
Thomas Contracting $21,333
Shauna Corp. $21,500
JME $22,845
DKH Excavating, Inc. $22,900
Veit Construction Co. $23,069
Carl Bolander & Sons Co. $24,000
• F.W. Gartner & Co. $26,342
Herbst &Sons Construction Co. $32,500
ATS Contract Hauling $34,250
Leadens Excavating $37,500
Belair Builders Inc. $39,317.42
WHEREAS, it appears that Kevitt Excavating, Inc. of Crystal, Minnesota, is the lowest
responsible bidder.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of
the City of Brooklyn Center, Minnesota that:
1. The President and Executive Director are hereby authorized and directed to
enter into a contract with Kevitt Excavating, Inc. of Crystal, Minnesota in the
name of the City of Brooklyn Center, for Improvement Project No. 1997 -12
according to the plans and specifications therefor approved by the EDA and on
file in the office of the City Engineer.
2. The City Clerk is hereby authorized and directed to return forthwith to all
bidders the deposits made with their bids, except that the deposit of the
successful bidder and the next lowest bidder shall be retained until a contract is
signed.
• 3. All costs associated with this project shall be financed by the EDA Special
Operating Fund.
EDA RESOLUTION NO.
•
Date President
ATTEST:
City Clerk
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
and upon vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
•
•
•
Memorandum
To: Michael J. McCauley, City Manager
From: Brad Hoffman, Community Development Director f
Date: April 23, 1997
Subject: Resolution Modifying Tax Increment Financing Plan for Tax Increment Financing
District No. 03
The resolution before the EDA modifying TIF District No. 03's budget (Section G of the plan) is
basically a housekeeping item. Because the total amount budgeted for the estimated project cost
does not change, notification to the school districts and County and State are not required.
The action being taken transfers money allocated to land acquisition costs to site preparation and
demolition and relocation costs. While the EDA has incurred site preparation, demolition and
relocation costs within the district, it was done as part of a land acquisition cost. This resolution
clearly defines site preparation, demolition and relocation as activities to be undertaken within
the TIF district and recognizing it as a distinct and separate activity, as opposed to the "umbrella"
approach of describing the activity as part of land acquisition.
• Examples of such activity include the acquisition of the Brookdale Motel, Premier Mechanical,
and the site improvements to the industrial property located behind the Hilton Hotel. Relocation
and demolition were primary components of the acquisition of the Brookdale Motel and the
Premier Mechanical property. Site work was part of the T.G.I. Friday's development and Jerry
Steffen's property.
•
Commissioner introduced the following resolution and
• moved its adoption:
EDA RESOLUTION NO.
RESOLUTION MODIFYING TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO 03
BE IT RESOLVED by the Board of Commissioners of the Economic Development
Authority in and for the City of Brooklyn Center, Minnesota ( "Authority ") as follows:
Section 1. Recitals
1.01. The City of Brooklyn Center ( "City") approved the creation of Tax
Increment Financing District No. 03 ( "TIF District ") and a Tax Increment Financing Plan ( "TIF
Plan") for that district, by Resolution No. 94 -273 approved December 19, 1994, all in accordance
with Minnesota Statutes, Section 469.174 to 469.176 (the "TIF Act ").
1.02. Under Section 469.175, Subd. 4, of the TIF Act, the Authority is authorized
to modify the TIF Plan without the notice and approval procedures required for approval of the
initial plan if the modification does not involve reduction or enlargement of the geographic area
of the district, increase in the amount of bonded indebtedness to be incurred, including a
• determination to capitalize interest on debt if that determination was not part of the original plan,
or to increase or decrease the amount of interest on the debt to be capitalized, increase in the
portion of the captured tax capacity to be retained by the Authority, increase in total estimated tax
increment expenditures or designation on additional property to be acquired by the Authority.
1.03. The Authority has determined a need to modify the categories of tax
increment expenditures without increasing the total estimated budget or total bonded indebtedness
in the TIF Plan.
Section 2. TIF Plan Modified
2.02. The Estimate of Public Costs set forth in Section G of the TIF Plan is
hereby modified as follows:
Qualified Costs
Land Acquisition
a. Commercial $6,000,000
b. Industrial 7,000,000
Public Improvements
a. Streetscape 4,500,000
b. Public Works /Stormwater 3,500,000
Demolition and Relocation 1,000,000
Site Preparation 1,000,000
EDA RESOLUTION NO.
•
Administrative, Legal, Engineering and Consulting Fees 2,900,000
Housing Development Account 5,000,000
Property Acquisition of Multi - Family Units
Rehabilitation of Multi - Family Units
Acquisition of Blighted Single - Family Housing
Rehabilitation of Blighted Senior Housing
Contingency 1.001000,
Total Estimated Project Costs: $31,900,000
Any funds to be expended for off -site improvements outside the boundaries of
District No. 03 but within the boundaries of Housing Development and Redevelopment Project
No. 1 would be less than 25 percent of total tax increment generated by District No. 03, including
administrative costs, provided that tax increment deposited in the housing development account
may be spent on eligible housing activities located anywhere in the City, as provided in the
Special Act.
H. ESTIMATED AMOUNT OF LOAN /BONDED INDEBTEDNESS
It is anticipated that the City or Authority may issue a revenue bond, general
obligation bond, or other type of obligation in one or more series to finance public costs. The
• original principal amount of all indebtedness is not expected to exceed $29,000,000, with
additional increments to be paid to capitalized and other interest determined at the time of
issuance.
I. SOURCES OF REVENUE
The major source of revenue to be used to finance public costs associated with the
public development projects in Housing Development and Redevelopment Project No. 1 is tax
increment generated as a result of the taxation of the land and improvements in District No. 03.
Tax increment financing refers to a funding technique that utilizes increases in valuation and the
property taxes attributable to new development to finance, or assist in the financing, of public
development costs. Additional sources of revenue may include, but are not limited to, investment
income and land sales. This does not preclude the City, the Authority, or the developer from
using other funds, at its discretion, to pay such costs.
Notwithstanding anything to. the contrary in this Section, amounts listed above may
vary among categories, provided that aggregate expenditures will not exceed the total listed above.
2.03. Authority staff are authorized and directed to attach a copy of this resolution
to the TIF Plan in the Authority's files for the TIF District, and to transmit a copy of the
resolution to the Department of Revenue.
•
EDA RESOLUTION NO.
•
Date President
The motion for the adoption of the foregoing resolution was duly seconded by commissioner
and upon vote being taken thereon, the following voted in
favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
•
I
distno3. res
//e
•
Memorandum
To: Michael J. McCauley, City Manager
n•
From: Brad Hoffman, Community Development Director
Date: April 23, 1997
Subject: Resolution Approving Modifications No. 1 and No. 2 to the Tax Increment
Financing Plan for Tax Increment Financing District No. 03, and Requesting the
Approval of the City Council
Both the EDA and the City Council will be asked to consider modifications to TIF District No. 3.
In brief, the modifications would remove six parcels from the district. The six parcels to be
removed have had significant reductions in value since the inception of the district. These same
six parcels would then be reinstated into the TIF district. The result of the actions would be to
reduce the base value of the district to reflect the current market values of the properties in
question.
At the time the district was established, a base value, or total market value of the property in the
district was also established. The base value represents one of the criteria upon which a TIF cash
• flow is determined. TIF is based upon additional value above the base value. Also, at the time
the district was established, the tax rate at the time became the other criterion determining TIF
cash flow. TIF is determined by the set tax rate times the next tax capacity above the base value.
TIF does not capture increases in tax rate.
The parcels to be removed and reinstated have lost over $20,000,000 in value since the district
was established. That means there would have to be $20,000,000 in new value added to the
district before any TIF monies would be generated. If Brooklyn Center is going to undertake a
redevelopment role in Brookdale or other areas of the city, we need to address this problem.
This TIF district represents the primary and only viable financial tool to address many of the
concerns expressed by the community.
Additionally, a motion was made at the Planning Commission meeting held on April 17, 1997,
that the modifications to Tax Increment District No. 03 conform to the general plan for
development or redevelopment of the City as a whole.
On Monday evening, City staff will be available at the City Council meeting to discuss this
proposal and to answer questions.
•
Commissioner introduced the following resolution and
• moved its adoption:
EDA RESOLUTION NO.
RESOLUTION APPROVING MODIFICATIONS NO. 1 AND NO. 2 TO THE
TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 03 AND REQUESTING THE APPROVAL OF THE CITY
COUNCIL
BE IT RESOLVED by the Board of Commissioners (the `Board") of the Economic
Development Authority in and for the City of Brooklyn Center, Minnesota (the "EDA ") as
follows:
1. Proposed Modification. In order to finance the public redevelopment costs
to be incurred by the EDA and the City of Brooklyn Center (the "City ") in connection with
Housing Development and Redevelopment Project No. 1 (the "Redevelopment Project "), a
housing development and redevelopment project established by the EDA pursuant to Minnesota
Statutes Section 469.001 to 469.047 as amended and Minnesota Statute Sections 469.090 to
s a
469.108, as amended, the EDA has approved Tax Increment Financing Plan for Tax Increment
Financing District No. 03, pursuant to the provisions of Minnesota Statutes, Section 469.175 (the
"Financing Plan "), which establishes Tax Increment Financing District No. 03 (the "District ")
as a tax increment financing district, as defined in Minnesota Statutes Section 469.174, Subd.
9. It has been proposed that the EDA approve Modification No. 1 and Modification No. 2 (the
"Modifications ") to the Financing Plan.
2. Approval of Modifications. The Modifications have been presented to this
Board and are ordered placed on file. in the office of the Executive Director of the EDA, and the
Modifications are hereby approved. The Modifications further serve the original goals and
purposes of the City and EDA in approving the Redevelopment Projects and the Financing Plan.
3. Presentation to City Council. The Modifications hereby approved shall be
presented to the City Council for a public hearing thereon pursuant to Minnesota Statutes, Section
469.029, Subd. 6, and Section 469.175, Subd. 4.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by commissioner
and upon vote being taken thereon, the following voted in
favor thereof:
• and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
7a
To: Mayor Kragness
• Council Member Debra Hilstrom
Council Member Robert Peppe
Council Member Kay Lasman
From: Council Member Kathleen Carmody
Date: March 6, 1997
Re: The EDA Home Rehabilitation Program
I am interested in discussing the use of the Home Rehab Program ( Deferred Loan Program).
The program has been in existence since 1973 and has rehabbed over 200 homes in that time.
The ;rant was for $10,000 until 1993, when it was increased to $15,000 and the loan deferral was
extended from five years to ten years. There was a priority placed on grants to attempt to do
exterior work, if possible, along with the life and safety issues, which are still afforded the
highest priority.
I have been compiling some statistical information on the grants for the last ten years. While
doing this, I realized that we as a council need to decide if the purpose of this program is to
maintain housing values and the housing stock (such as the purpose of the 53rd Ave. Project).
Or is the purpose of the program to keep people in their homes and, therefore, is more of a social
• service program on a par with the assessment stabilization program.
Before we refer this topic to the Housing Commission, I was hoping to discuss this at a work
session or regular session. I believe the Housing Commission needs to know this prior to
making any recommendations. Using the statistics, they would then be able to judge how
effective the program truly is.
The statistics I have compiled are based on the non - subjective areas of the grant recipients. They
include:
• aQe of the homeowner at the time of the Grant.
• in which of the six "neighborhoods" the property is located.
the type of work done with the grant money, i.e. roof, furnace.
• was the house sold prior to the expiration of the grant term.
• in what year was the grant given and the work performed.
• some minor demographical information including gender and marital status.
I will ask Mike to schedule this on an agenda as soon as time is available.
•
Notes on Deferred Loan Statistics
First Column is the list of grants processed by the city since 1988. These are not the numbers
assigned to the cases. The actually grants are in random order.
Second Column is the age of the homeowner. This to make demographic comparisons as to the
number of seniors versus the number of non - senior homeowner grants.
Third Column identifies in which of the six established neighborhoods the projects were done.
The abbreviations are as follows:
SE - Southeast Neighborhood
SW - Southwest Neighborhood
C- Central
WC - West Central
NE - Northeast
NW - Northwest
Fourth Column indicates what type of work was performed using the grant money. The two that
were one of a kind are listed in the column. The remainder are as follows:
a - roof
b - furnace /air conditioning
• c - electrical
d - plumbing
e - windows
f - exterior (includes siding, doors and scrapinJpainting)
Fifth Column shows whether any of the grant was repaid.
Sixth Column is the year the grant money was spent and the work was done.
Seventh Column is more demographical information as to whether the non - senior homeowners
are femaielmale, single or married. It does not differentiate between singles with children and
those - without. I would estimate that 80 to 90 % of the single women had minor children living
with them. The codes for this column are sw - single women or me - married couple. The
re
ainder that are not seniors are single men.
•
Statistics from the Data
• Deferred Loan Program
The statistics used covered the years from 1988 until 1996. During this time the period of time
the loan covered was extended from five years to ten years. Also, the amount of the grant was
increased from $10,000 to $15,000. There was only one grant that was partially repaid.
According to our records, no other grant has been repaid either in part of fully.
The sample size was 75 grant applications during this time. Only 73 of the files could be found.
For statistical purposes, it was assumed that these two would not significantly alter the findings or
that they were not approved. Of the remaining 73, seven were either not approved or were
approved but never begun. So the sample size used for calculations was based on the approved
and completed 66 projects documented here.
28 (42 %) - senior homeowners (62 or older)
38 (58 %) - non - senior homeowners
Non- senior Homeowners
23 (35 %) were single mothers /single women
12 (18 %) were married couples
3 ( 5 %) were single men
• Number of Grants per year (based on the year home improvement occurred)
`88 - 3
`89 - 7
1 90-8
`91 - 6
`92 - 14
`93 - 8
`94 - 4
`95 - 13
`96 - 3
Neighborhood were grant occurred
SE - 33 (50 %)
SW - I ( 1%)
C 8 (12 %)
WC-8 (12 %)
NE - 5 ( 8 %)
N�V - 11 (17 %)
•
Three of the grants used only a portion of the total grant money because they were emergency
grants for two furnaces that quit working in winter and one handicapped ramp. All the remaining
• grants used the entire allowable amount of either $10,000 or $15,000.
Use of Grants
a - roof 20(30%)
b - furnace 35 (53 %)
c - electrical 26( 3 39%)
d - plumbing 43(65%)
e - windows 35 (53 %)
f - exterior 22(33%)
•
•
No. Age Area Improvement Repay Year Demo.
1 63 WC a,b.de 95
• 2 68 SE garage 90
3 34 SE c.d 94 sw
4 39 NW b,c,d 90 sw
5 41 SE b,c.df 95 stiv
6 76 C c,de 93
7 26 SE none sw
8 68 SE a,d.e,f 92
9 82 SE f 92
10 34 SE a.f 93 s%v
11 35 SE a,d.e.f 92
12 84 SE c,de 93
13 62 C CU 94
14 67 NW c.de 90
15 28 SE b,c,e 91 me
16 31 SE de 91 sw
17 65 SE b,c,d 92
18 71 SE b,de 90
19 36 C a,b.d.e 95
20 41 SE b.d e 92
21 41 SE a.c,de 95 me
22 81 SE c,e.f 91
23 69 SE b,d.f 90
24 69 SE b* 95
25 75 SE a,cde 93
26 47 NE b.e.f 95 me
• 27 34' WC b,de 92 me
28 36 WC gyp* 94 sw
29 49 NW b* 91 me
30 39 SE cede 94 stiv
31 30 SE a,b.d 92 me
32 56 SE b.c.e 93 sllv
33 52 SE he 90 me
34 42 SE none
35 32 C a,e,f 95 sw
36 38 NE df 90 stiv
37 30 WC none s<v
38 71. SE a.d 92
39 27 SE a.c.d 95 sw
40 23 NW b,d, partial 88 stiv
41 43 WC b,c,d 92 sw
42 40 SE a.b,d 93 stv
43 85 SW c,d 93
44 47 NW b,c.d 92 sw
45 35 NE a.e.f 95 sw
46 6.1 SE bale 89
47 43 C b.e 91 sw
48 66 NW b.c.d 93
49 69 SE b* 92
50 35 SE a.b.c 95 sw
51 ? WC none
52 65 NW b.c.de 95
53 65
C a.e.f 88
•
54 34 SE bale 88 me
55 � 1 NW none stiv
• 56 38 NW none sw
57 62 NW b.d.e 89
58 39 NW c,d.e 95 sw
J 40 WC a.b.f 92 sw
60 41 C a.b.c.d 96 sw
61 Duplicate
62 45 NW b.c,d.e 96 me
63 46 SE d.e,f 95 sw
64 67 NW c.d 96
65 78 C a.b.f 92
66 34 SE a,b.d 92 me
67 66 NE a.c,e,f 89
68 52 WC b.f 89 sw
69 64 SE e.f 89
70 80 WC e.f 89
71 75 WC d,f 91
72 31 NE c.d.e,f 90 sw
73 30 SE b.c,de 89 me
•
•
HISTORY AND NATIONAL OBJECTIVES OF THE
• COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
Title I of the Housing and Community Development Act of 1974 created the Community
Development Block Grant (CDBG) funding program. The CDBG program replaced eight former
categorical grant and loan programs under which communities competed nationally for funds. These
included urban renewal, neighborhood development grants, open space and urban beautification,
historic preservation grants, public facility loans for water and sewer, and neighborhood facilities
grants and model cities supplemental grants.
The primary objective of the CDBG program from the federal perspective was to develop "viable
urban communities by providing decent housing and suitable living environment and expanding
economic opportunities, principally for persons of low and moderate income."
In addition, all CDBG projects and activities must meet one of three national objectives. They must
either:
► Principally benefit low and moderate income persons;
► Aid in the prevention or elimination of slums or blight; or
► Meet other urgent community needs.
• It should be noted that "urgent community needs" have been defined very narrowly and primarily
g tY rY Y P Y
address natural disasters. CDBG funds have been used only once in the entire history of the program
in Hennepin County for "urgent community needs ". The use of funds for this need occurred after
a tornado struck the city of Dayton.
In the early years of the CDBG program there was a debate over whether all three of the program
objectives were equal or whether low- and moderate - income benefit was the principal objective. In
1983, Congress effectively settled the issue by stipulating that at least 51% of a grantee's program
funds must be used for low- and moderate - income benefit activities. That percentage has since been
raised to 70 %. The 70% requirement must be met at the County level.
Eligible community development activities are spelled out in the following excerpts from federal
P b rP
CDBG regulations:
► Acquisition of real property for public purpose and disposition of property through sale,
lease, donation, or otherwise of the real property acquired with CDBG funds or retention
of property for public purposes, including reasonable costs of temporarily managing such
property or property acquired under urban renewal.
► Acquisition construction, reconstruction, rehabilitation or installation of public facilities
• and improvements. Examples of public facilities include facilities for use in providing
shelter for persons having special needs, shelters for the homeless, convalescent homes,
hospitals, nursing homes, battered spouse shelters, halfway houses for runaway children,
drug offenders or parolees, group homes for mentally retarded persons, and temporary
• History and National Objectives of the
Community Development Block Grant Program
Page 2
housing for disaster victims.
► Clearance activities, including demolition and removal of buildings and improvements,
including movement of structures to other sites.
► Public services which are directed toward improving the community's public services
and facilities, including but not limited to those concerned with employment, crime
prevention, child care, health care, drug abuse, education, fair housing counseling, energy
conservation, welfare or recreational needs. To be eligible for CDBG assistance, a public
service must be either a new service or a quantifiable increase in the level of an existing
service above that which has been provided by or on behalf of the unit of general local
government. The amount of CDBG funds used for public services shall not exceed 15%
of each grant.
► Interim assistance. The following activities may be undertaken on an interim basis in
areas exhibiting objectively determinable signs of physical deterioration where the
recipient has determined that immediate action is necessary to arrest the deterioration and
that permanent improvements will be carried out as soon as practicable:
• a. The repairing of streets, sidewalks, parks, playgrounds, publicly owned utilities,
and public buildings; and
b. The execution of special garbage, trash, and debris removal, including
neighborhood cleanup campaigns, but not the regular curbside collection of
garbage or trash in an area.
► Payment of the non - federal share required in connection with a federal grant and aid
program undertaken as part of CDBG activities.
► Urban renewal completion. Payment of the cost of completing an urban renewal project
funded under Title I of the Housing Act of 1949, as amended.
► Relocation. Relocation payments and other assistance for permanently and temporarily
relocated individuals, families, businesses, nonprofit organizations, and farm operations.
► Removal of architectural barriers. Special projects directed to the removal of material
and architectural barriers which restrict the mobility and accessibility of elderly or
handicapped persons to publicly - owned/privately -owned buildings, facilities, and
improvements.
• ►
Privately-owned utilities. CDBG funds may be used to acquire, construct, reconstruct,
rehabilitate or install utilities, including the placing underground of new or existing
distribution facilities and lines.
' s
History and National Objectives of the
• Community Development Block Grant Program
Page 3
► Construction of housing. CDBG funds may be used for the construction of housing
assisted under Section 17 of the U.S. Housing Act of 1937.
Note: In general, CDBG funds cannot be used to construct housing. However, this
section refers to public housing where CDBG funds are used in conjunction with HUD
funds to build public housing.
► Economic development. CDBG funds may be used to facilitate economic development
by:
a. Providing credit, including, but not limited to, grants, loans, loan guarantees and
other forms of financial support for the establishment, stabilization and expansion
of micro - enterprises.
b. Providing technical assistance, advice, and business support services to owners
of micro - enterprises and persons developing micro- enterprises.
• c. Providing general support, including, but not limited to, peer support programs,
counseling, child care, transportation, and other similar services to owners of
micro - enterprises and persons developing micro - enterprises.
► Rehabilitation and preservation activities. CDBG funds may be used to finance
rehabilitation of:
a. Privately -owned buildings and improvements for residential purposes.
b. Low - income public housing and other publicly -owned residential buildings and
improvements.
c. Publicly- or privately -owned commercial or industrial buildings, except that the
P
rehabilitation of such buildings owned by a private for -profit business is limited
to improvements to the exterior of the building and the correction of code
violations.
d. Manufactured housing when such housing constitutes part of the community's
permanent housing stock.
► Rehabilitation of property under this provision provides repair directed toward an
• accumulation of deferred maintenance, replacement of principal fixtures and
components of existing structures, installation of security devices, including smoke
detectors and dead bolt locks, and renovation through alterations, additions to or
enhancement of existing structures, improvements to increase the efficient use of
History and National Objectives of the
• Community Development Block Grant Program
Page 4
energy in structures through such means as installation of storm windows and doors,
siding, wall and attic insulation, and conversion, modification or replacement of
heating and cooling equipment, including the use of solar energy equipment,
improvements to increase the efficient use of water through such means as water -
saving faucets and shower heads and repair of water leaks.
► CDBG funds may be used for rehabilitation services such as rehabilitation
counseling, energy auditing, preparation of work specifications, loan processing,
inspections, and other services related to assisting owners, tenants, contractors and
other entities participating or seeking to participate in rehabilitation activities.
► CDBG funds may be used for inspections and abatement of lead -based paint.
► Code enforcement. Code enforcement in deteriorating or deteriorated areas where
such enforcement, together with public improvements, rehabilitation, and services
to be provided may be expected to arrest the decline of the area.
• ► Historic preservation. CDBG funds may be used for the rehabilitation, preservation
or restoration of historic properties, whether publicly or privately owned.
► Special economic development activities. CDBG funds may be used for special
economic activities where the recipient has insured that the appropriate level of
public benefit will be derived pursuant to those guidelines before obligating funds
under this authority. Activities include the acquisition, construction, reconstruction,
rehabilitation or installation of commercial or industrial buildings, structures, and
other real property equipment and improvements, including railroad spurs or similar
extensions.
► Special activities by community -based development organizations (CBDOs). The
recipient may provide CDBG funds as grants or loans to any CBDO qualified under
this section to carry out a neighborhood revitalization, community economic
development, or energy conservation project. Neighborhood revitalization projects
include activities of sufficient size and scope to have an impact on the decline of a
geographic location within the jurisdiction of the recipient.
Community economic development projects include activities that increase economic
opportunity principally for persons of low and moderate income, or that stimulate or
retain businesses or permanent jobs.
• Energy conservation projects which include activities that address energy
conservation, principally for the benefit of the residents of the J
recipient's jurisdiction.
History and National Objectives of the
• Community Development Block Grant Program
Page 5
► Eligible planning, urban environmental design and policy planning- management-
capacity building activities. Planning activities which consist of all costs of data
gathering, studies, analysis, and preparation of plans and the identification of actions
that will implement such plans, including, but not limited to:
a. Comprehensive plans
b. Community development plans
c. Functional plans in areas such as:
1. Housing, including the development of a consolidated plan
2. Land use and urban environmental design
3. Economic development
4. Open space and recreation
5. Energy use and conservation
6. Flood plain and wetlands management
• 7. Transportation
8. Utilities
9. Historic preservation
d. Other plans and studies such as:
1. Small area and neighborhood plans
2. Capital improvements programs
3. Individual project plans (excluding engineering and design costs related
to a specific activity which are eligible as part of the cost of such activity)
4. The reasonable cost of general environmental/urban environmental
design and historic preservation studies
5. Strategies and action programs to implement plans, including the
development of ordinances and regulations
6. Analysis of impediments to fair housing choice
► Program administration costs. CDBG funds may be used for the payment of reasonable
administrative costs and carrying out charges related to the planning and execution of
community development activities assisted in whole or in part with CDBG funds.
It should be noted that any or all of the activities in the preceding list of eligible activities
• must meet one or more of the national objectives to be funded.
HENNEPIN COUNTY PRIORITIES FOR CDBG EXPENDITURES
•
As part of the planning process for the Community Development Block Grant (CDBG) program,
Hennepin County is required to develop a plan for expenditure of funds which includes CDBG, the
federal HOME program, Emergency Shelter Grant (ESG) program, and the Comprehensive Housing
Affordability Strategy (CHAS). The plan is intended to guide communities in the preparation of a
comprehensive vision of housing and community development.
COUNTYWIDE HOUSING AND COMMUNITY DEVELOPMENT PRIORITIES
Below is a summary of the Consolidated Plan's countywide priorities.
HOUSING
Rental and Supportive Housing: Planning, site acquisition, related infrastructure for development
of new units and rehabilitation of existing units for low - income households (less than 50% of median
income).
Homeownership:Planning, site acquisition, related infrastructures, down payment assistance for low
income first -time homebuyers and rehabilitation of existing units occupied by low- income
households.
• COMMUNITY DEVELOPMENT
Neighborhood redevelopment/revitalization, senior centers, removal of architectural barriers /ADA
compliance, lead -based paint abatement and planning activities to address housing and community .
revitalization needs.
PUBLIC SERVICES
Services to senior citizens, disabled persons and youth, child care assistance and transportation
services.
In discussing the County's priorities with Hennepin County staff responsible for administering the
CDBG program at the Urban Hennepin County level, the following information and observations
were received:
► Rehabilitation of single- family homes and acquisition of blighted properties and
redevelopment of the lots continues as a priority at the County. Scattered site acquisition
and single - family rehabilitation activities are increasing, particularly in the inner ring
suburban areas.
► The general planning projects and handicap accessibility projects are decreasing. Many
of the outlying communities in Hennepin County have used CDBG funds to make their
parks and other public facilities accessible. Most of these projects are now complete.
• Also, the County noted a shift away from general planning -type projects. The County
Hennepin County Priorities for
• CDBG Expenditures
Page 2
is encouraging this shift away from general planning activities.
► In the outlying communities where new affordable housing is being developed, CDBG
is used as a "piece" of the development project.
► One of the needs indicated by Hennepin County staff is the need for multi - family
rehabilitation funds. The County is intending to start a pilot program for multi- family
housing rehab using federal HOME funds.
► County staff indicated HUD's current priority at the national level is to promote
economic development with CDBG funds. At the national level, HUD is using a
program called "Section 108" which allows CDBG funds to be used as a pledge to repay
bonds sold to promote economic development. Additionally, loan proceeds from
businesses benefitted by the Section 108 program are also used to pay back the bonds
sold to create the pool of money for the loans. To date, no 108 projects have been
done in the state of Minnesota.
• ► County staff indicated that at the national level there is the potential for Congress to
consolidate CDBG with the federal HOME program and essentially funnel the money
to the states.
► One of the options the County is looking at is the possibility of expanding their ability
to address rehabilitation needs by tapping into existing programs. For example, the
County is looking at the possibility of becoming involved with the Minnesota Housing
Finance Agency's Fix Up Fund. The Fix Up Fund is a long - standing MHFA program
which provides up to $15,000 as a loan to homeowners to do a wide variety of
rehabilitation projects on their homes. Homeowners with incomes as high as $43,000
can qualify for these loans and the interest rates float between two and eight percent (2-
8%), depending on income. These loans are intended for homeowners that can afford to
repay a loan and target a different population than is targeted with CDBG funds.
However, the reason the County is looking at becoming more involved in the Fix Up
Fund program is to provide a wider range of rehabilitation services to Hennepin County
residents.
•
SUMMARY AND COMPARISON OF CITY OF BROOKLYN CENTER AND TOTAL
URBAN HENNEPIN COUNTY CDBG EXPENDITURES (1975 -1995)
!: Activity �lty olf Brooklyn Center Percentage`; Total Uxbn Hennepin Pereett�ge
Total E cp�nd tares Ctiunty ExpQndnures
X1975 )19..
(1975. l 995)
I
Housing Rehabilitation $2,025,230 49.9 $20,733,607 30.2
Planning /Administration $197,697 3.7 $10,341,244 15.1
Public Services $38,306 .4 $5,160,577 7.5
Public Facilities $88,267 1.5 $9,249,566 13.5
Neighborhood Revitalization $1,566,660 38.6 $11,154,351 16.3
Handicap Access $199,429 6.0 $4,359,413 6.4
Assisted Housing 0 0 $7,552,862 11.0
Totals $4 115 589 $68' 551 62Q
t
;:.:;:;
f Idep isledalbublitzlformslcdbgexpe .tab
ISSUES FOR DISCUSSION OF FUTURE OF CDBG PROGRAM
• IN BROOKLYN CENTER
One of the major issues raised by the EDA when it placed a moratorium on the single - family
rehabilitation program was whether or not the rehabilitation of single - family properties is a wise use
of CDBG funds in terms of the improvement to individual homes and the improvement of the City's
neighborhoods. The following list of issues, statements and questions is intended to provide a
starting point to discuss and evaluate the current activities and future direction of the CDBG program
in Brooklyn Center.
► There are no statistical studies that have demonstrated an active rehabilitation program
improves individual home values or has an influence on neighborhood housing values.
p
g
g
Anecdotal information is sometimes used to describe the value of rehabilitation programs,
but staff is not aware of any objective studies that have been done. Hennepin County is just
starting to look at their CDBG programs and, specifically, the single - family rehabilitation
program, from a cost/benefit standpoint. The County has no data, but is definitely interested
in pursuing the question of whether single- family rehabilitation has any positive spinoffs for
a city other than repairing the individual homes rehabilitated.
► Hennepin County is re- evaluating its role in terms of housing and neighborhood
redevelopment with regard to CDBG and housing and redevelopment in general. The
• County Board has passed a resolution supporting several housing policies, one of which is
"Hennepin County's current supportive role for housing be continued, in cooperation with
municipalities, in promoting neighborhood and tax base stabilization and furthering
affordable housing." A copy of the complete resolution passed by the County Board is
attached to this memorandum.
► County staff is currently evaluating and pursuing options to provide expanded housing
support services to municipalities by tapping into housing resources that do not rely on
increased county or city expenditures. An example is the Minnesota Housing Finance
Agency (MHFA) Fix Up Fund. County staff is currently looking at how to provide better
access to this existing program for Hennepin County residents. The Fix Up Fund is a loan
program that provides up to $15,000 to do a wide variety of remodeling and rehabilitation
for single - family homes. The loans are for persons who can afford to pay back the loan at
an interest rate anywhere from two percent to eight percent, depending on income.
MHFA Fix Up funds could be used in conjunction with CDBG by using CDBG funds to
"write down" or reduce the interest rates on the Fix Up Fund loans. However, the program
is primarily designed for families with more ability to pay back loans than many of the
current CDBG rehabilitation clients.
• One of the options for changing the City's approach to the use of CDBG funds is to target
specific neighborhoods and provide a focus and concentration to neighborhood improvement
• Issues for Discussion of Future of CDBG Program
in Brooklyn Center
Page 2
and redevelopment. A focused effort could include a wide variety of projects, including
rehabilitation loans, code enforcement efforts, neighborhood cleanups, marketing of
purchase /rehabilitation or refinance /rehabilitation loans, acquisition of deteriorated
properties, and a concentrated focus on land use and zoning issues which may be problems
in the neighborhood.
► Another option is to put the CDBG rehabilitation funds into scattered site acquisitions, or
even target the acquisitions to a specific area.
► Other options for rehabilitation could be pursued, including the possibility of the NIHFA Fix
Up Fund, purchase /rehabilitation mortgages, and soliciting lenders to assist in targeting
rehabilitation loan funds for specific neighborhoods.
► If the EDA continues the EDA rehabilitation program substantially in its present form, there
are also a number of administrative issues which should be addressed. They are:
a. The proposed County changes in the rehabilitation program described previously are
• scheduled to begin in 1996. One of the issues relative to these changes is should all
people on the current waiting list for the City's program have to comply with the new
regulations or should they be grandfathered in on the old regulations? Currently, there
are between 50 -60 households on the waiting list.
b. Should any specific areas of the City be excluded from the rehab program? For example,
there are currently several individuals on the waiting list who live on Brooklyn
Boulevard. The question is whether or not homes that are nonconforming uses should
be rehabilitated under the CDBG program.
c. Should the EDA revisit the issue of the value of homes to be rehabilitated? In other
words, should homes at a certain value be evaluated in a different manner for
rehabilitation projects?
d. With regard to administration of the CDBG rehab program, currently the Hennepin
County staff does the income verification portion of the project with City staff doing the
inspection and project management. The County has indicated they could do the entire
project from start to finish for a 12% fee of the total amount of the rehabilitation project.
The fee would be paid with CDBG funds.
e. Another issue to better control and manage the waiting list would be to open up the
• waiting list for a specified period each year and accept applications only during that
period.
CURRENT ELIGIBILITY REQUIREMENTS FOR CITY OF BROOKLYN CENTER'S
CDBG DEFERRED LOAN PROGRAM
Income cannot exceed the following limits to qualify for a deferred loan under Brooklyn Center's
program:
Household Siiefhto. of.Persons Income Limit*
1 $22,900
2 $26,200
3 $29,500
4 $32,750
5 $35,350
6 $38,000
7 $40,600
8 $43,900
*Sixty percent (60 %) of area median income.
The Department of Housing and Urban Development uses the Section 8 income limits for
• calculating income limits for CDBG program eligibility. These income limits are based on HUD
estimates of 1996 median household income. The U.S. median family income has increased to
$41,600. The Minneapolis /St. Paul MSA median income has increased from $51,000 to
$54,600. The U. S. median family income is used as a "cap" in calculating income for
households at 80% of median income.
The maximum income individuals or families can earn and still qualify for CDBG programs is
80% of median income adjusted for household size. The 80% maximum incomes for various
household sizes are shown below.
116useh6.1 ..SizefNo of:persons Income L ;nuts*
1 $29,100
2 $33,300
3 $37,450
4 $41,600
5 $44,950
6 $48,250
7 $51,600
• 8 $54,900
*Eighty percent (80 %) of area median income.
fi I depts l eda l bubl itz lforms l cdbg. tab
SUMMARY OF CITY OF BROOKLYN CENTER USE OF CDBG FUNDS
• 1975 TROUGH 1995
For the first four years of the CDBG program, the City of Brooklyn Center elected not to participate.
The City's participation in the CDBG program began in 1979.
In the early years of the CDBG program, unspent federal funds could be carried forward to future
years. This "rollover" of funds to future years makes it difficult to summarize CDBG expenditures
on an annual basis for those years of the program. A summary of the major components of each of
the activities described in the preceding table follows:
1. Housing Rehabilitation. Rehabilitation of single- family owner- occupied homes was
the major activity carried out with CDBG funds from the start of Brooklyn Center's
participation in the program.
A small amount of the housing rehabilitation funding, approximately $180,000, was
used for solar demonstration projects on single - family homes in the early- 1980s. The
remainder of the housing rehabilitation funds were used for general rehabilitation items.
2. Planning /Administration. This activity provided funds for City staff time spent on the
administration of CDBG programs, including the housing rehabilitation program.
• Also included in this activity development s i rty are funds for the lopm nt and preparation of plans,
including a handicap access plan, the City's share of the multi -city business retention
study and the Brooklyn Boulevard redevelopment plan.
3. Public Services. This item reflects the CDBG funding of the Household Outside
Maintenance for the Elderly (H.O.M.E.) program.
4. Public Facilities. This item includes a one -time expenditure of funds for the
remodeling and rehabilitation of a portion of the old Brooklyn Park City Hall for a Head
Start facility and in the amount of $30,000. The remainder of the funds appear to have
been used for park improvements in the early years of the program when use of CDBG
funds was less restrictive.
5. Neighborhood Revitalization. This activity includes costs related to the acquisition and
demolition of blighted single- family properties. Five single - family and 16 multi- family
units have been acquired and demolished with CDBG funds.
This activity also includes approximately $980,000 used towards acquisition of the
Earle Brown Farm site.
• 6. Handicap Access. This item reflects expenditures made over several years to make
public buildings and parks accessible to handicapped individuals.
PROPOSED REVISIONS TO CDBG SINGLE - FAMILY
• REHABILITATION PROGRAM FROM HENNEPIN COUNTY
All CDBG dollars flow through Hennepin County to the 45 cities that are part of the Urban
Hennepin County. Forty of these 45 cities fund single - family housing rehabilitation programs. The
County regulates the administration of these programs through procedural guidelines developed by
Hennepin County. The procedural guides set forth conditions including applicant eligibility,
administrative requirements, standards for repair, and application procedures, etc.
Municipalities may vary their own rehabilitation programs from the procedural guides and many do
have different eligible income and eligible improvement criteria. Hennepin County administers the
rehabilitation programs for many cities and administers portions of the program for others. For
Brooklyn Center, the County administers the application and income eligibility portion of the single -
family rehabilitation program.
The County is proposing to create more consistency for the rehabilitation program throughout the
County. The primary reason for this program change is to reduce administrative inconsistencies
between programs, but another perhaps more important reason is that federal funds are not likely to
increase and may decrease in the future. As a result, one of the primary changes proposed by the
County is to design a program to recapture the CDBG dollars used for rehabilitation. A summary
of the revisions proposed by the County follows:
• 1. The lien period for the zero percent deferred loans (maximum $15,000) will be extended
from 15 years to 30 years. Currently, Brooklyn Center's program provides a ten year
lien with the loan amount decreasing each year for a period of ten years at which time the
loan is completely forgiven.
2. For families with incomes greater than 50% of area median income ($25,500 for a family
of four) the loans will bear three percent simple interest for ten years and have a 30 year
lien.
The implementation of these changes is scheduled for 1996.
• f.• Ideptsledalbublitzlformslcdbgprop .rev
REVIEW OF BROOKLYN CENTER
• COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
Introduction
The Community Development Block Grant (CDBG) program is one of the oldest federal grant
programs still in existence today. It is one of the key federal funding programs cities continue to
support at the federal level.
Given the current needs in Brooklyn Center, is the CDBG program still a viable and useful
program and what are the benefits and options available to the City of Brooklyn Center for the
use of CDBG funds?
I. Federal Community Development Block Grant objectives and requirements
A. Federal objectives as established in the Housing and Community Development Act of
1974:
1. Develop and maintain viable urban communities by providing decent housing, a
suitable living environment and expanded economic opportunities, principally for
low and moderate income persons.
2. Aid in the prevention or elimination of slums and blight.
3. Meet other community development needs having a particular urgency affecting
public health and safety.
B. A major requirement of the program is that funds expended principally benefit low and
• moderate income persons (i.e., those in households whose incomes are less than 80% of
the area median).
II. County priorities and requirements
A. County -wide housing and community development priorities
1. Housing: Rental and supportive housing: Planning, site acquisition, related
infrastructure for development of new units and rehabilitation of existing units for
low income ° income).
households (less than 50% of median om ).
2. Home ownership: Planning, site acquisition, related infrastructures, down payment
assistance for low income, first -time home buyers, and rehabilitation of existing
units occupied by low income households.
3. Community development: Neighborhood redevelopment/revitalization, senior
centers, removal of architectural barriers /ADA compliance, lead -based paint
abatement and planning activities to address housing and community revitalization
needs.
4. Public services: Services to senior citizens, disabled persons and youth, child care
assistance and transportation services.
B. County administrative requirements
1. Single - family rehabilitation program: The County is developing new procedural
guidelines for this program and several administrative changes will be implemented
in 1996 under the CDBG funded single - family rehabilitation programs. The most
• significant changes are:
• a. The lien period for the zero percent deferred loans (maximum $15,000) will
be extended from 15 years to 30 years.
b. For families with incomes with incomes greater than 50% of area median
income ($25,500 for a family of four), the loans will bear three percent simple
interest for ten years and have a 30 year lien. Currently, Brooklyn Center's
program offers a ten year lien with the loan being completely forgiven if the
homeowner stays in the home for the ten year period.
Y Y P
2. Low /moderate income benefit: County-wide, 70% of the CDBG funds must be
utilized for activities benefitting low and very low income residents.
3. Funding public services: Communities may use up to 20% of their CDBG planning
allocation to fund public services. If the county exceeds the 20% cap, communities
budgeting over 15% of their allocation may have to make reductions in their public
services funding.
4. Affordable housing for low and very low income households continues to be a
significant need in suburban Hennepin County, according to the County.
Affordable housing, appropriate to the needs of different types of households, has
been identified as a high priority for the use of HUD resources in the County's
consolidated plan. Activities are encouraged that will develop or improve housing
for low income households, persons who are homeless or at risk of becoming
homeless, persons with disabilities, families with children and the elderly.
5. Affirmatively further fair housing: As recipients of HUD funds, Hennepin County
and each subrecipient community has agreed to affirmatively further fair housing.
• HUD has initiated measures encouraging recipients to become more proactive in
addressing conditions that create impediments to fair housing choice. As p otential
r � r
condition to receiving future funds, HUD expects recipients to undertake specific
activities that will serve to further fair housing choice.
III. CDBG program history
A. County -wide history and usage since 1975
B. City usage since 1975
IV. Specific programs and activities
A. Single- family rehabilitation (deferred loan program).
1. Number of homes done since 1975 and total dollar amount.
2. Review of last three years of deferred loan program.
a. Average value of homes
b. Client profile, including income, household size and age.
C. Major types of improvements done to single - family properties.
B. Scattered site program (slum and blight removal).
1. Number of homes and units acquired and removed and location of units.
2. Cost of acquisitions.
C. Household Outside Maintenance for the Elderly (H.O.M.E.) program:
• 1. Number of households served.
2. Total cost.
-2-
D. Planning activities
• E. Other projects.
V. Options for CDBG funds
A. Rehabilitation
1. Eliminate program completely
2. Turn over program to County administration except for inspections.
3. Use CDBG funds to write down interest rate for MHFA loan programs such as Fix
Up Fund.
B. Scattered site program
1. Continue as is, buying homes as they become available.
2. Target specific size and value homes or areas.
C. Use of CDBG funds for infrastructure improvements such as curb and gutter.
D. Develop CDBG neighborhood revitalization strategy.
•
•
SUMMARY OF CDBG LOAN RECIPIENTS AND PROPERTIES ON
20 CDBG PROJECTS COMPLETED BETWEEN 1992 AND 1994
•
oR s
7 1 person households
5 2 person households
4 3 person households
3 4 person households
1 6 person household
:«:'<:><:><<`•<:>:»<:::«:<:::::>>«:?: : >:<: >:::::::: >::MARKET<'�U�dEH �4iE� ................ ...............................
RANGE OF VALUE NUMBER OF H OMrEs
$45,000 - $50,000 1
$50,001 - $55,000 4
$55,001- $60,000 1
• $60,001 - $65,000 5
$65,001 - $70,000 5
$70,001 - $75,000 3
$75,001 - $80,000 1
AGE RANNGE NUMBER OF HomE
Under 30 1
30-35 1
36 -40 9
41-45 3
46-50 2
51 -55 0
56 -60 2
• Over 60 1
Over 70 1
Summary of CDBG Loan Recipients and Properties
on 20 CDBG Projects Completed Between 1992 -1994
• Page 2
YEARS NUMBER OF OWNERS
Under 5 4
5 -10 4
11 -15 2
16 -20 1
20 -25 1
26 -30 0
31 -35 4
36 -40 3
Over 40 1
• ............
AGE RANGE NUMBER OF OWNERS
Under 30 2
31 -3 5 3
36 -40 4
41-45 1
46-50 0
51-55 0
56-60 1
61 -65 2
66-70 2
Over 70 5
•
Summary of CDBG Loan Recipients and Properties
• on 20 CDBG Projects Completed Between 1992 -1994
Page 3
fEI5t2Ct7rP�f : E :
INCOME RANGE NUMBER OF OWNERS
Under $10,000 4
$10,001 - $15,000 4
$15,001 - $20,000 5
$20,001 - $25,000 3
$25,001 - $30,000 4
•
•
SUMMARY OF REPAIR ITEMS COMPLETED ON 26 CDBG DEFERRED LOAN PROJECTS
Type of Repair No. of Projects
• Handrail 16
Interior /exterior stairs 13
Foundation 4
Crawl space 2
Basement floor 2
Post and beam 6
Accessibility improvements 1
Electrical 24
Electrical mast 3
Mechanical 24
Plumbing 26
Ceilings 12
Walls 14
Finish floors 18
• Exterior doors 21
Exterior storm doors 14
Interior doors 8
Exterior storm and screen windows 9
House windows 22
Insulation 16
Ventilation 21
Exterior siding 18
Exterior painting 8
Gutters and down spouts 15
Roofing 15
Chimney 3
Kitchen and bathroom cabinets 5
Smoke detectors 18
Grading 6
• Exterior concrete work 8
Miscellaneous 16
SUMMARY OF HENNEPIN COUNTY SINGLE FAMILY
REHABILITATION LOAN PROGRAMS
• COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
(CDBG) DEFERRED LOAN PROGRAM
EI%gibi > Total Loan =. _Repayment
Eligible. Applicants Eligible Properties p
Im rovements: Balance Allowed Provisions
Annual household Own and occupy the Health ,
and safety, Maximum loan 30 Yearlrerr, ze
income cannot property to be energy efficiency, amount is $15,000. interestand3% {
exceed.Section 8 improved. Must be habitabilitvaInd;,iF An additional $5,000 loans with na
Income Limits current on property necessary, is available for paymentdue unless
tax payments. Must accessibility. accessible the house is sold
have sufficient equity improvements. transferred Dino _
in the property to longecoccupied: by
cover liens and applicant: r
mortgages secured
on property.
"Section 8 Income Limits (effective December 27, 1996): 1 person - $30,450; 2 person - $34,800; 3 person - $39,150;
4 person - $43,500; 5 person - $47,000; 6 person - $50,450; 7 person - $53,950; 8 person - $57,400.
MHFA DEFERRED LOANS
TYPE ELIGIBLE APPLICANTS ELIGIBLE CONDITIONS ON LENGTH OF
- PROPERTIES IMPROVEMENTS REPAYMENT
MHFA Deferred . Annual adjusted gross Owner -0ccupied Permanent repairs, Ten unless .
• Loan income of $10,000 or less homes, mcfuding additions, alterations, property�ss - ld,
mobile homes taxed as or renovations. Work ownership is-1 t _
reat orpersonal meets applicable transferred;' or _ .
property: Cannot have codes borrower longer __
had a MHFA Deferred resides to property.:
Loan withmg prev►ous b
years=:-
MHFA ' `Annual adjusted gross Propertymustbe Only permanent Five =years unless .
.
Accessibrhty income of $18,000 in 11 principal residence of modifications to meet property isaold,
Loan county metro area, handicappedor high priority mobility, ownership is ,
$15,000 in Greater disabled. person homemaking and self transferred;: or
rty
Minnesota area. Pro p a cannot receive- care needs of borrower is,ncr
.
Handicapped member another_accessibility .-,. handicapped member. Iongerresidesm
will reside there for two loan within 5 years:. _ property. .
year minimum. Includes- mobile homes
taxed as real estate -or_
personal property.
MHFA:... Annual adjusted gross Owner-occupied..... Only items necessary Ten years unless
Emergency Loan income of $10,000 or homes Must have to correct the property.is,sold.,
less. emergency situation emergency. ownership_:is
regarding failed transferred;: ar
mechanical systems -or borrowerno longer
structure. resides:irr property_
MHFA.HOME.. Annual adjusted gross Owner -0ccupied Permanent repairs, Ten years unless
• Deferred Loan income of $10,000 or homes, including additions, alterations, propertyissold,
less. mobile homes taxed as or renovations. Rehab ownershipis
real estate or - corrects a deficiency. transferred; or
property. Cannot.ttave Work meets borrower_no longer
had a MHFA Deferred applicable codes. resides in property.
Loan within previous 5 After rehab, property
years. meets HQS.
MHFA REVOLVING REHABILITATION LOAN
• Eligible: Total MHFA Loan Repayment:
...Eligible Applicants Eligible Properties :Improvements. Balance Allowed Provisions
Annual adjusted. Mobile homes if Permanent repairs, $10,000 for each Monthly a payments of
gross income.of` owned as real additions, alterations,. revolving loan. Total at:least;$20.00.
-
$18,000.: property. Owner- orrenovations MHFA revolving Three percent(3 %o)
occupied. Cannot Rehab: corrects..: loans cannot exceed interestfora
have had a MHFA deficiency. work $15,000. maximum'period of
Revolving Loan meets applicable 15 yearsto repay:
within previous 2 codes.
years on this
property.
I
MHFA FIX -UP FUND AND ENERGY LOAN PROGRAMS
MHFA Fiz -Up Fund _
Home Improvement Loan Program MHFA Energy Loan Program
Funding Maximum loan amount is $15,000 Maximum loan amount is $5,000
Applicant Own and occupy the property to be Own and occupy the property to be
improved improved
Income Eligibility Annual household income cannot exceed No income limit
$44,000
• Assets No asset limit No asset limit
Eligible Repairs Health and safety, energy, same value Only those improvements increasing the
added improvements energy efficiency of a home
Term of the loan Term up to 15 years, annual interest rate Term up to five years, 8% annual
either 2 %, 4 %, 6% and 8% depending upon interest.
income
Other Program Good credit history. Current on property tax Good credit history. Current on property
Requirements payments. Able to meet debt to income and tax payments. Able to meet debt to
loan to value requirements. income and loan to value requirements.
•
FIX -UP FUND
HOME ENERGY LOANS AG (L:Z : P Z
8% for all loans
INTEREST RATE 2% to 8% based on income
8% for all loans .
MHFA Credit Application for a Fix -up Fund
CREDIT APPLICATION MI IFA Credit Application for Home Improvement Loan; blue (of m. (For Number 320)
Accessibility Loan; green form (MHFA Form
Loan; while lorm, 4 pages (Form Number 310)
Not required, used at lenders discretion. Required for all contractors (Form Number 310
Required for all contractors (Farm Number 310 Contractor Warranty)
CONTRACTOR WARRANT Contractor Warranty) (Same loan number is used)
MHFA Home Energy Loan Note; legal MHFA Fix -up Accessibility loan Note; same
legal description disclosure requirements
ed
NOTE MHFA Home Improvement Loan Note; legal description is necessary only on secured apply; g I Note form is while with green ink
description is necessary on both unsecured loans; note form Is white with blue Ink Y'
and secured loans; note form is white with
black ink
1 dwelling unit only 1 to 4 dwelling units
ELIGIBLE PROPERTY l0 4 dwelling units residence, only
Not to exceed 15% of the residence Not to exceed 49% of the Accessibility Improvements to the residential
EXCLUSIVE BUSINESS USE OF THE
Not to exceed 15% of the residence portion of the Property are eligible
PROPERTY
provements to the ntified
Only permanent Accessibility Improvements,
m Permanent improvements that Improve the Y P re of
ELIGIBLE IMPROVEMENTS energy efficiency of the property, as ide Sat Section 111 elig i b i lit y x
, a pply, design orCirapler 3,
Permanent general i
property per Procedural Manual in procedural Manual
consultation services performed prior to the
date of the Credit Application may be financed
with an Accessibility Loan
lies,
Procedural Manual and page 3 of Credit •Items related to new construction, such as howev mpro is im ay be made to the
P
INELIGIBLE IMPROVEMENTS windows and doors for a room addition Items on this list, it such an improvement
Application ° Fireplaces makes the Property more accessible to the
° Siding, roofing disabled Resident family member
• Non - energy items
NONE
$46,000 Gross Income
NONE
HOUSEHOLD INCOME LIMIT
Gross income from all sources relied upon for Gr
2 months following te antici in t he
data of the Credit
DISCLOSURE Gross income from all sources of all residonls repayment of the loan
of the household Application, from all Residents relied upon for
repayment of the Loan
ADJUSTED INCOME CALCULATION Income Is adjusted for household size
Income is not adjusted for household size Income is not adjusted for household size
Veril in accordance with lenders normal Only those Residents whose income is relied
INCOME VERIFICATION Must submit carillon verification sr in accordance methods; do not have to submit with loan
upon for Loan repayment
with MHFA methods described in Procedural
Manual
FIX -UP FUND HOME ENERGY LOANS ACCESSIBILITY LOANS
PRINCIPAL LOAN AMOUNT AND LOAN Not to exceed $15,000, plus other limitations $1,000 minimum to $5,000 maximum; Not to exceed $25,000, including the original
LIMITS described In Procedural Manual and maximum Includes previously principal amount of any Accessibility Loan
worksheet on Page 5 of your Loan received Home Energy Loans for the previously received by the Borrower for the
Processing Clarifications same borrower on the same property same Property
LOAN TERM (MATURITY) 6 months to 15 years 6 months to 5 years Minimum of 6 months to a maximum of 20 years
MINIMUM MONTHLY PAYMENT $20.00 $30.00 $20.00
SECURITY Required on loans over $2,500.00, plus other Not roquired•- utilized only when normal prudent Required on loans over $2,500.00, plus other
limitations in Procedural Manual practices indicate it is advisable limitations in Procedural Manual
SIGNATURE ON NOTE All residents with income age 18 or over Only those residents whose income Is relied Only those Residents whose income is being
upon for loan repayment relied upon for Loan repayment
ADDITIONAL CHARGES WHICH MAY BE - Mortgage registration tax and recording fees - Mortgage registration lax and recording fees - Mortgage registration lax and recording lees
COLLECTED FROM CONSUMER - $15.00 credit report fee, - Cannot collect credit report fee - $15.00 credit report fee
LOAN RESERVATION PROCESS Per Procedural Manual. Use Seller Security Per Procedural Manual, Use Seiler Security Per Procedural Manual. Use Seller Security
Code or 4 -digit lender number Code or 4 -digit lender number Code or 4 -digit lender number
TYPICAL LOAN PACKAGE CONTAINS 1. Commitment letter /Note Submission 1. Commitment letter /Note Submission t . Commitment letter /Note Submission
Voucher Voucher Voucher
2. Note 2. Note 2. Note
3. Application 3. Application 3. Application
4. Income Verification 4. Complete credit review; a credit history on 4. Income Verification
5. Complete credit report. Including credit first mortgage is not required 5. Complete credit report, including credit
history on mortgage or contract for deed history on mortgage or contract for deed
6. Rescission Notice, Mortgage, Assignment 6. Written statement from licensed physician
of Mortgage. or county case manager
7. Plans and specifications or detailed
description of Accessibility with a bid or
estimate
8. Rescission Notice, Mortgage, Assignment
of Mortgage
PROCESSING FEE $350 per loan $175 per loan $350 per loan
PRIOR APPROVAL REQUIRED NO NO Yes; package must include:
1. A written statement from a licensed
physician or county case manager as
,. described on page 6 of this chapter
2. Completed MI FA Credit Application for a
I lome Improvement Accessibility Loan
3. 1loquirod credit references and income
verifications
4. Plans and spocilications or a detailed
description of the Accessibility
Improvements, along with a bid or estimate
for said improvements
7 5 Warranty signed by contractors
paid for tabor