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08-19-91 agenda HOUSING AND REDEVELOPMENT AUTHORITY AUGUST 19, 1991 7:00 P.M. COUNCIL CHAMBERS AGENDA CALL TO ORDER APPROVAL OF MINUTES OF (1) SPECIAL HRA MEETING OF JUNE 10, 1991; (2) REGULAR HRA MEETING OF JULY 15, 1991; AND (3) SPECIAL HRA MEETING OF JULY 22, 1991 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF APPROVAL OF PROPOSED PROPERTY TAX LEVY FOR PAYABLE YEAR 1992 FOR CERTIFICATION TO HENNEPIN COUNTY c AUDITOR AND SET DATES FOR PUBLIC BUDGET HEARINGS FOR 1991 ~,es REVISED/1992 PROPOSED BUDGET AND TAX LEVY L}_L~ HRA LETTER NO. 28 3. CONSIDERATION OF LOAN PARTICIPATION PROPOSAL FROM FIRSTAR BANK HRA LETTER N0. 29 4. ..CONSIDERATION OF PROCESS FOR SHIFTING FISCAL DISPARITIES CONTRIBUTION FOR ILN TO ENTIRE CITY HRA LETTER N0. 30 5. CONSIDERATION OF ACCEPTANCE OF CERTIFICATE OF COMMENDATION FROM GOVERNOR ARNE CARLSON HRA LETTER N0. 31 6. EXECUTIVE DIRECTOR REPORT 7. CLAIMS AND PAYROLL ADJOURNMENT HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 31 Agenda August 19, 1991 Issue Statement: Acceptance of a Certificate of Commendation from Governor Arne Carlson. Background: At the April 15, 1991 meeting, the HRA approved the submission of an application to Minnesota Housing Finance Agency (MHFA) for the City Participation First Time Buyer Home Mortgage Program. As reported previously, the City's application was rewarded with a commitment from MHFA of 51,457,189 in mortgage financing. The interest rate is 7.875 percent. Seventeen mortgages will be made available with these funds; 11 are reserved from new construction projects associated. with the Expanded New. Home Program and Vo- Tech projects. Sale prices may not exceed $95,450. Six mortgages are reserved for the sale of existing homes on a first come, first serve basis with sale prices not to exceed 583,000. The originating lender is Metropolitan Financial Mortgage Corporation with a branch facility at Southdale. Recommended Motion: The Executive Director will present the Certificate to the HRA Chair. Basis for Recommendation: MHFA recommended to the Governor that a Certificate of Commendation be issued to Richfield because of linking the City Participation Program with the innovative Expanded New Home Program. Alternative Recommendation: None. Discussion/Decision Mode: Acceptance of the Certificate is appropriate. at the August 19, 1991 HRA meeting SLD:cak Acting Executive Director ~~ . ARNE H. CARLSON i- ', ~ GOVERNOR ~. CERTIFICATE OF COMMENDATION r ~ In recognition of your efforts to help first-time homebuyers -' realize their dream of homeownership; this commendation is presented to: THE CITY OF RICHFIELD as a Minnesota Cities Participation Program Affordable Housing Community. IN VVTTNFSS WI-IEREOF, I have hereunto set my hand and caused the Great Seal of the ` State of Minnesota to be affixed at the State Capitol this twenty-sixth day of June in the year of our Lord one thousand nine hundred and ninety-one, .and of the State the one hun ed and`` ' - ird. ~R . ~~.b. GOVERNOR s. : l HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 30 Agenda August 19, 1991 Issue Statement: Consideration of a process for shifting the fiscal disparities contribution for the ILN to the entire City. Background: At the July 15, 1991. meeting, the HRA voted to request the City Council to include legislation to permit the shifting of the ILN fiscal disparities contribution within their legislative package for 1992. The contribution could then be shifted from the ILN to the entire City. At the present time, the ILN is at a competitive disadvantage because of the high cost of land,-public improvements and the fiscal disparities contribution. Recent state legislation which provides for a financing package with MNDOT and proposed federal legislation which would provide federal funds may reduce the cost. to be charged against new development for upgrading 77th Street. It would also be desirable to reduce costs by removing the fiscal disparities contribution which a new project must support. This could be accomplished by shifting the fiscal disparities contribution to the entire City tax base. When the HRA approved the request to be made to the City Council, staff was directed to prepare a procedural statement which would be followed in implementing the legislation assuming its passage. Attached is the pro-posed process statement. Recommended Motion: Approval of the proposed process for shifting the fiscal disparities contribution from the ILN to the entire City. Basis for Recommendation: 1. The HRA requested staff to prepare and submit a process statement. 2. The statement reflects the way in which development proposals have been processed and incorporates the potential for a fiscal disparities shift. 3. The process would help gain support for the concept and would improve the ILN's competitive position. Alternative Recommendation: 1. Delay action. 2. Reject the proposal. 3. Modify the proposal. Discussion/Decision Mode: By proceeding, there is adequate time for the City Council to direct staff to include the fiscal disparity shift in the 1992 legislative package. fully submi '~~ Acting"Executive Director SLD:cak PROCESS TO BE FOLLOWED WHEN CONSIDERATION IS BEING GIVEN TO SHIFTING THE ILN FISCAL DISPARITIES CONTRIBUTION. Assumptions A. The state legislature adopts legislation permitting the shifting of the contribution from the project to the entire City upon authorization by the City Council. B. A development concept proposal has been. submitted, and; 1. Meets the goals and objectives of the ILN Redevelopment. Plan and is in compliance with the C-3 zoning district. 2. Data analysis indicates it is financially feasible. The impact of the fiscal disparities contribution on the feasibility would be reported upon including the need to shift the contribution from the ILN to the entire City. C. The financial background of the developer is acceptable. D. The developer has paid the non-refundable development fee. Process When the above assumptions have been met, the following process. would be followed. 1. Subject to direction from the HRA, public information meetings would be scheduled at which the development concept would be presented. The developer would be responsible for presenting the development concept and responding to comments. If there is a need to shift the fiscal disparities contribution to make the development feasible, that information would be included. in their presentation including the financial impact of such a shift. 2. A joint meeting of the HRA and City Council would be scheduled. 3. A staff report would be presented including Items A-D above. The report would include public comments and the developer's response to these comments as well as further analysis of the fiscal disparities issue. 4. The HRA may be requested to approve or reject the concept. An action to approve would include, if appropriate, a request to the City Council to have the fiscal disparities contribution for the project made by the entire City. If the action is to reject the development concept, the HRA would state their reasons for the rejection. 5. At the request of the HRA, the City Council may act on the fiscal disparities request from the HRA at the joint meeting. 6. Staff would implement the actions of the HRA and City Council. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 29 Agenda August 19, 1991 Issue Statement: Consideration of a loan participation proposal from Firstar Bank. Background• Firstar Bank, formerly First Western Bank, has proposed low cost home improvement loan program for Richfield homeowners funded equally by Richfield and the Bank. The program would target homeowners who, because of income or equity requirements, cannot obtain home improvement loans. Maximum income levels for participation would be $49,000 as opposed to the $38,000 MHFA standard. The City would participate at an interest rate of 2~ less than the Bank and the Bank would service the loan. Joint. participation loans are more common in industrial or commercial development attraction loans. However, a similar residential loan program has been submitted to Roseville by Firstar and will likely start this fall. That program is proposed to be capitalized at $500,000. Recommended Motion: Thank Firstar for its proposal but decline financial commitment at this time and direct staff to develop a workable program with the financial institutions to foster the improvement of the City housing stock. Basis of Recommendation: 1. Neither the City nor the HRA has funds which could be made available at this time. 2. Recent amendments by Congress to the Community Reinvestment Act (CRA) are motivating lenders to become more active in supporting communities within their market area. 3. Staff has recently begun exploring appropriate roles for lenders in Richfield. 4. Support for this concept now may preclude Firstar from .participating in a different role as may be developed. Alternative-Recommendation: Accept the proposal and provide funding. Discussion/Decision Mode: Action by the HRA on August 19, 1991 would provide Firstar with a timely response.- R ect ully s mit d, .~/~ evic Acting Executive Director SLD:cak Frstar MetroBank FiRS?-^,~ ~~~ James Prosser City Manager . City of Richfield 6700 Portland Ave., South Richfield, MN 55423 Firstar Richfield Office has identified a need for a low cost. Home Improvement Loan. for a large share of ..current and potential Richfield homeowners. We feel this need can best be met by working in conjunction with the city to deliver this product. One of the main goals of his program is to ensure that the housing stock of Richfield maintains .its desirability by allowing homeowners to make improvements which they could not otherwise make because of income or equity requirements. This program will be available for households with an income of less than- $49,000. This level allows for a greater percentage of the population to qualify than the existing Minnesota Housing Finance Agency program which has a current maximum income level of $38,000. We propose that a fund be established that is capitalized equally by Firstar equally by Firstar Richfield office and the City of Richfield. We will be lending up to 100$ of the value to allow for residence with - lower amounts of equity to make the improvements now. Interest will be at fixed rate of 1$ over prime at the time of closing--currently 9.5~, which is approximately 1/2~ below the current market rates. The city would participate at an interest rate 2~ below the bank rate to cover servicing costs.. Firstar Richfield Office has a system in place to deliver this loan and service the loan after its origination. The underwriting standards will be the same as for all of our consumer credits with exception of the equity requirement. It is important to maintain good underwriting standards to minimize any potential delinquency problems. The main parameters of the program are summarized below: Interest Rate Maximum Loan Amortization Loan to Value Ratio Debit Ratio Credit Bureau Eligible Improvements Real. Estate Mortgage Requirements 1~ over prime fixed (9.5) $10,000 1 year per thousand 100 40~ of gross Clean MHFA~Standards Over $2,500 '~ ~. _.. ~;"n Street BJ ~;;' . 'Mini i.;SO~J 55425 Jim, it is my understanding Steve Quam may have .spoken o you already. I look. forward to hearing your comments on this proposed program. Sincerely, ~/f~ ~~` ` ~~ Mark Nankivel Vice President HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 28 Agenda August 19, 1991 Issue Statement: Approval of proposed property tax levy for payable year 1992 for certification to the Hennepin County Auditor and set dates for public budget hearings for the 1991 Revised/1992 Proposed budget and tax levy. Background: As required by the Truth in Taxation legislation (M.S. 275.065) each "taxing authority" must certify its proposed property tax levy for payable year 1992 to the County Auditor on or before September 1, 1991. "Taxing authority" includes all counties, all school districts, all cities regardless of population, all towns and all special taxing districts. No local units of government are exempted from this requirement. In addition, each "taxing authority must certify to their County Auditor the dates that have been selected for their Truth in Taxation hearing and for the continuation of this hearing by September 1, 1991. The dates for these hearings must not conflict with the hearing dates of the County or of the school district in which the "taxing authority" is located. These scheduled hearings must be held between November 15 and December 20, 1991. On or before December 30, 1991 the final adopted levy must be certified to the County Auditor. Notice of the budget hearing will be published and posted in accordance with both the State Statute and the City Charter. The notice must also include an alternative date for a second budget session if it is necessary. Thus, two dates must be selected this evening. Recommended Motion: 1. Adopt the attached resolution approving the proposed 1992 Housing and Redevelopment Authority General Fund and Relocation Information Fund tax levies.. 2. Set a public budget hearing for 7:00 p.m. on November 18, 1991 with a continuation date of 7:00 p.m. on November 21, 1991, if it is necessary. Basis for Recommendation: 1. The Minnesota Truth in Taxation law requires a budget hearing for each "taxing authority" prescribed by M.S. 275.065. 2. The recommended dates are available according to the Hennepin County Auditor. 3. The budget and accompanying proposed levy are ready for consideration. 4. There is adequate time to meet publication requirements. Alternative Recommendation: 1. The Housing and Redevelopment Authority could select other dates for the hearing, provided they are available and publication requirements can be satisfied. Discussion/Decision Mode: Action by the HRA on August the proposed 1992 tax levy required by law. 19 would make it possible to certify and set date for budget hearings as R pec fully submi ted, v ich Acting Executive Director SLD:ds HRA RESOLUTION N0. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION APPROVING PROPOSED 1992 HOUSING AND REDEVELOPMENT AUTHORITY BUDGET AND CERTIFYING THE PROPOSED. TAX LEVY BE IT RESOLVED by the Housing Redevelopment Authority of the City of Richfield as follows: Section 1. The proposed budget for the Housing and Redevelopment Authority General Fund of Richfield for the year 1992 in the amount of $292,010 is hereby ratified. Section 2. The estimated gross revenue of the Housing and Redevelopment Authority General Fund of Richfield from all- sources, including general ad valorem tax levies as hereinafter set forth for the year 1992, and as the same are more fully detailed in the Executive Director's official copy of the proposed budget for the year-1992, in the amount of $292,010 are hereby approved. Section 3. There is hereby levied upon all taxable property in the City of Richfield a direct maximum amount allowable by law a proposed ad valorem tax in 1991, payable in 1992 for the following purposes: Housing and Redevelopment Authority $213,224 Relocation Information Services and $ 21,287 Assistance Section 4. A certified copy~of this resolution shall be transmitted to the County Auditor. Passed by the Housing and Redevelopment Authority of the City of Richfield, Minnesota this 19th day of August, 1991. Thomas E. Harms Chair ATTEST: Joan Helmberger Secretary