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01-16-90 agendaHOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 4 January 16, 1990 Issue Statement: Expansion of the scattered site New Home Program. Background: The New Home Program funds the redevelopment of substandard and under-utilized residential property with new single family homes. In 1983, a city survey indicated 99 garage homes existed. Several cottage houses also exist. Cottage houses are undersized lower value homes more centrally located on a lot. Utilizing primarily CDBG funds since 1978, the New Home Program has provided 45 new houses. Most of these were constructed on lots previously occupied by a substandard house. However, many substandard houses remain. CDBG fund availability typically allow only one or two properties to be acquired annually. Redevelopment, usually in cooperation with South Hennepin Vo- Tech, also typically produces one or two homes annually. Staff has formulated a concept which would accompllish two purposes; significantly increase the number of new single family homes, and, at the same time remove substandard conditions more quickly. Several concept features are consistent with New Home activities to date: - Substandard properties would be purchased by the HRA on a voluntary basis. The substandard properties would have a $35,000 to $50,000 value at time of acquisition. The vacant lot after clearance would have a $25,000 to $30,000 value. A write down of $5,000 to $25,000 from the cost of purchase would be provided. Three to four bedroom family housing would be developed. The occupants of the substandard homes are usually elderly. The families who purchase the new housing are usually first time home buyers, with four members and approximately $30,000 in annual income. The new concept is different in several areas; the value of the housing, the market served, the funding source, and the number of units produced. To outline: - The HRA would sell the acquired properties to experienced private contractors at the vacant land price. (The cost of the write down would be an HRA expense as it is now). - The HRA would pay for this expenditure in two ways; 1. On the short term, up to $1 million would be borrowed from either internal City or external sources. The amount of money borrowed would be determined by the number of substandard properties owners desire to sell. 2. The borrowed funds would be paid back by the tax increment generated from the redevelopment of each individual single family property. The annual increment is estimated at $1,200 per property. With up to $1 million available approximately 38 properties could be purchased. The funds would be returned in 18 to 22 years. To generate the $1,200 increment, homes would have to be valued at $110,000 to $130,000. Moderate to median income households with incomes from $35,000 to $45,000 would participate. Specific income limitations are not planned at this time. - The housing would serve a family market different than the current New Home Program. Current owners looking for a larger home for their families who prefer Richfield would likely be the greatest buyers. At least two redevelopment districts would be established. These districts would include most of the garage and cottage homes. Including many of these properties would help assure a flow of properties with owners interested in voluntary sales. (At this time the number of interested sellers is not known). Only those parcels which were redeveloped would be certified for tax increment. The attached map identifies general areas in which parcels would be secured. The redevelopment and tax increment plans will more clearly define the operating area. Authorization to proceed is being sought at this time because of the commitment of staff resources needed to formulate the program. Program development would proceed according to the attached general activity schedule. Numerous actions by the HRA and Council will be necessary to implement the concept. Recommendation: Adopt a motion which includes the following: 1. The HRA approves the concept and authorizes staff to proceed with its development. 2. Staff is directed to present the concept to the City Council for their consideration and approval. Basis of Recommendation: 1. A significant reduction in the number of substandard homes could be made. • 2. New housing opportunities for families could be provided. 3. This concept is a continuation on a larger scale of the successful New Home Program. (Vo-Tech projects would continue to serve lower moderate income purchasers). 4. The short term financing of approximately $1 million could provide up to 38 new homes during the implementation phase of the program. 5. Staff resources are available the cost of which would be an HRA expenditure. It is estimated that 8 to 12 homes could be purchased a year with existing staff. At this time, the number which would be made available by their owners is not known. 6. Developers have indicated a preliminary interest in the concept. 7. Legal counsel has determined the concept to be possible within existing law. 8. Short and long term financial resources are available, the actual amount and term has to be determined as a result of further financial analysis. • Alternative Recommendation: Do not proceed at this time. Discussion/Decision Mode: An outline of development and implementation activities, set within a general time frame, is provided. The concept would be referred to the City Council for consideration at the January 22 Council meeting. Respe f y submitted, osser James V Execu ir ector • NEW HOME PROGRAM SCATTERED SITE CONCEPT (NHP - SSC) ACTIVITY SCHEDULE TIME FRAME DEVELOPMENT 1) Authorization of Concept January, 1990 2) Preparation of redevelopment and tax February, 1990 to increment plans, reviews, approvals May, 1990 and authorizations. 3) Cash flow analysis; February, 1990 to models and adjustments may, 1990 4) Program Guidelines February, 1990 to a) voluntary acquisition process May, 1990 b) developer selection criteria c) housing design considerations d) write-down and sale to developers e) fund management f) marketing strategies IMPLEMENTATION • 1) Approval of financing agreements Summer, 1990 with City 2) Developer RFP and identification Summer, 1990 of developer 3) Advertising for properties Summer, 1990; ongoing thereafter 4) Acquisition of property/sale to developer Fall, 1990; ongoing thereafter 5) Construction underway Fall, 1990; ongoing thereafter EVALUATION AND ADJUSTMENTS Ongoing throughout 0 I 0 • .MWM,i: I .1 •. i ?•' ?y? 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'' L7 - r Nr ? ,t 03 03 H r1. M N. M .. Y nCnnn .. Y m x ...... 1 to 1 • .1-Y .? ?• MM ' //\X HOUSING AND REDEVELOPMENT AUTHORITY • HRA Letter No.3 Agenda, January 16, 1990 Issue Statement Election of officers for the Housing and Redevelopment Authority. Background: The bylaws of the Richfield Housing and Redevelopment Authority provide that the HRA hold an annual meeting in January of each year. The bylaws further provide that the Chairman, Vice- Chairman, and Secretary of the HRA be elected at this meeting. Officer for the years 1986-1989 are as follows: 1986 1987 Thomas Harms, Chairman Thomas Harms, Chairman Vern Luettinger, Vice-Chair Vern Luettinger, Vice-Chair Joan Helmberger, Secretary Joan Helmberger, Secretary 1988 1989 Thomas Harms, Chairman Thomas Harms, Chairman Vern Luettinger, Vice-Chair Vern Luettinger, Vice-Chair Joan Helmberger, Secretary 'Joan Helmberger, Secretary Recommendation: • Elect officers for the year 1990. Basis for Recommendation: 1. The bylaws of the HRA require that such an election be held at the annual meeting in January of each year. Alternative Recommendation: Do not hold the election. However, this would be in contradiction to the HRA bylaws. Discussion/Decision Mode: This item has been scheduled for the January 16, 1990, HRA meeting in accordance with the HRA bylaws. RespeYiv?e ly submitted, James rosser Execu Di rector JDP:sae 0 • HOUSING AND REDEVELOPMENT AUTHORITY Council Letter No. 2 Agenda January 16, 1990 Issue Statement: Resolutions designating official depositories for the HRA of Richfield for 1990, including the approval of collateral. Background: In accordance with Minnesota Statutes Section 475.66 and 118.005, the HRA of Richfield must annually establish financial institutions which have pledged the necessary collateral over and above the amount of federal insurance, as public depositories. The First Western Bank is pledging collateral in the amount of $838,133. This collateral pledge means that the HRA's deposits up to this amount are secured with the depository. In addition to this collateral pledge, HRA funds are protected by the Federal Deposit Insurance Corporation in the amount of $100,000, making the total protection afforded by this depository for HRA funds equal to ($439,877.) A resolution naming the First Western Bank as the 1989 official depository for the Richfield Housing and Redevelopment Authority is attached to this letter. A resolution must be provided annually, designating certain savings and loan associations and banks as official depositories for investment of certain HRA funds. With approval of these official depositories, the HRA will be able to invest funds in these institutions, not exceeding the federal insurance of $100,000. Finally, a resolution is also attached which designates certain financial institutions as depositories for the investment of HRA Funds for 1990. These institutions, such as investment brokerage firms offer government securities in the manner require by law. These financial institutions include Marquette Bank Minneapolis, Merrill Lynch, Dain Bosworth, Prudential Bache, Kidder, Peabody, Norwest Investment Services, Piper, Jaffray & Hopwood, State Street Bank & Trust and Kansas National Investments. Recommended Motion: It is recommended that the HRA adopt the attached resolutions designating official depositories, with the understanding that the HRA could not invest in any of the depositories beyond the level of insurance coverage of the pledged collateral. Basis of Recommendation: 1. It is recommended that the HRA adopt the attached resolutions designating official depositories, with the understanding that the HRA could not invest in any of the depositories beyond the level of insurance coverage of the pledged collateral. 2. The HRA has worked with the institutions recommended in the past . and has found to have a good working relationship with these institutions. Alternative Recommendation: OThe HRA could solicit other financial institutions for official depositories, but past relationships with the depositories recommended have proven satisfactory for the HRA. Discussion/Decision Mode: Action of the HRA is desirable at the January 16, 1990, HRA meeting so that the HRA may invest funds in the approved financial institutions for the year 1990 immediately. Respect lly submitted, Jam D. Prosser Exe tive Director JDP/eja 0 ? 0'. • HRA RESOLUTION NO. A RESOLUTION DESIGNATING CERTAIN FINANCIAL INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD FUNDS IN 1990 WHEREAS, the Housing and Redevelopment Authority of Richfield has money which is available for investment, and WHEREAS, different financial institutions offer different rates of return on investments, and WHEREAS, the Housing and Redevelopment Authority of Richfield shall purchase U. S. Treasury Bills, U. S. Treasury Notes and other such government securities in the mariner required by law from the institution offering the highest rate to the City providing greater flexibility in the investment program and maximize interest income thereon. NOW, TH REFORE, BE IT RESOLVED by the Housing and Redevelopment Authority of Richfield, Minnesota, as follows: 1. It is hereby found and determined that it is in the best interests of the proper management of Housing and Redevelopment Authority funds that certain financial institutions be designated as add- tional depositories for Housing and Redevelopment Authority funds for 1990. 2. The follawing financial institutions designated as depositories for Housing and Redevelopment Authority funds: Marquette Minneapolis Bank Merrill Lynch, Pierce, Fenner & Smith, Inc. Dain Bosworth, Inc. Prudential - Bache Kidder, Peabody & Company Norwest Investment Services Piper, Jaffray & Hopwood State Street Bank & Trust, Trust for Short-Term U.S. Government Securities Kansas National Investment 3. The Treasurer is hereby authorized to deposit Housing and Redevelop- ment Authority funds in any or all of the depositories herein de- signated. Such deposits may be made and withdrawn from time to time by the Treasurer as his/her best judgment and the interests of the Housing and Redevelopment Authority dictates. 4. The investment of funds and the reporting thereof pursuant to this resolution shall be conducted in accordance with established policies regarding the investment of these funds. 0 Passed by the Housing and Redevelopment Authority of Richfield this 16th day of January, 1990. Tb mas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary 0 HRA RESOLUTION NO. RESOLUTION DESIGNATING THE FIRST WESTERN BANK A DEPOSITORY OF FUNDS OF THE HOUSING AND REDEVELOPMENT AUTHORITY FOR RICHFIELD FOR THE YEAR 1990 AND APPROVING COLLATERAL BE IT RESOLVED by the Housing and Redevelopment Authority of Richfield as follows: That, in accordance with law, the First Western Bank be, and hereby is designated a depository of the funds of the Housing and Redevelopment Authority, and subject to the following terms and conditions: The said depository shall not be required to give bonds or other securities for such deposits provided that the total sum thereof shall not at any time exceed in any depository the stun for which its deposits are insured under the Acts of Congress of the United States relating to insurance of bank deposits; but not in case such deposits in any such depository shall at any time exceed such insured sun, said depository shall immediately furnish bonds or other security for such excess according to law, approved by the Housing and Redevelopment Authority of Richfield. That said depository shall pay on demand all deposits there; and shall pay all time deposits, at or after the end of the period for which the same shall be deposited, on demand. BE IT FURTHER RESOLVED, that there shall be maintained a general account in which shall be deposited all monies. Checks on this account shall be signed by the following officers or their facsimile signatures. Thomas E. Harms, Chairman James D. Prosser, Executive Director BE IT FURTHER RESOLVED, that there shall be a daily interest savings account. All withdrawals from said account will be for transfers to the general checking account. BE IT FURTHER RESOLVED, that the collateral in the amount of $838,133 deposited for safekeeping at the Marquette National Bank of Minneapolis, is hereby approved. Passed by the Housing and Redevelopment Authority of Richfield this 16th day of January, 1990. Thomas E. Harms, Chairperson ATTEST: • Joan Helmberger, Secretary 4. The Executive Director is hereby authorized to deposit Housing and Redevelopment Authority funds in any or all of the depositories herein designated up to the amount of $100,000, or such other amount as may be subsequently permitted by law, such deposits to be in the form of demand accounts for Public Unit Savings Certificates purchased by the Housing and Redevelopment Authority of Richfield, payable to the Housing and Redevelopment Authority of Richfield on the signatures of the Executive Director. Passed by the Housing and Redevelopment Authority of Richfield this 16th day of January, 1990. Thanas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 1 Agenda January 16, 1990 Issue Statement: Designation of Official Newspaper for 1990. Background: The Richfield Sun-Current, published by the Minnesota Suburban Newspapers, has been the City's and HRA's official newspaper for many years. The rates for legal publications are as set forth by Minnesota law. Recommendation: Designate the Richfield Sun-Current as the official newspaper of the Richfield HRA for the year 1990. Basis for Recommendation: 1. The paper has served well as the official newspaper for many years. 2. The paper has expressed a desire to continue to provide this service. 3. The newspaper is in close proximity to City offices if it is necessary to hand deliver legal notices before publication deadlines. 4. The paper is delivered to each residence in the City, thereby providing city-wide coverage of legal notices to residents. Alternative Recommendation: 1. Not make a designation and request the City Clerk's office to check into using another publication, such as the Minneapolis Star & Tribune. Discussion/Decision Mode: This item has been placed on the January 16, 1990 HRA Agenda so that a designation can be made for 1990. Respectf lly submitted, Jame Prosser Exec ive-Director I?