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12-19-83 agenda,,.~ HOUSING AND REDEVELOPMENT AUTHORITY ee ,A +~i'~ Office of Executive Director ~~1` HRA Letter No. 42 Agenda December 19, 1983 Housing and Redevelopment Authority .Commissioners City of Richf field Dear Commissioners: Subject: Contract Amendments, Section 8 Program The Richfield HRA administers the existing Section 8 Rent Assis'~`~'~~~~~="~~~ _ ~~2i~'FCdi~nc2u~ `"I'h~ .M t P ~. ~a o`I ~. t an,, Council '"HRA has agreements with 20' cities to provide staff admin.-'y istrative services for the Section 8 program. As a result, 1,726 households receive Section 8 rental assistance in existing units scattered throughout the metropolitan area. Services are being performed by the Richfield HRA based on an agreement that became effective June 4, 1980, and continues to De~em_ber 26, 1983. By that agreement, is reim- u~ rsea"`$'T'tT"~J~P"'p rticipating unit per month, and receives approxi- mately $2,400 each month to cover expenses incurred for Richfield's units. Reimbursement requests are routinely submitted to-the Metropolitan Council HRA. `Contract amendments have been drafted wliic~I extend the. t of the existing agreement":and increase. he ~e"imbursement the f field. HRA receive s°' ft~r'~incurr~ ,~ ,mss `e er orequ~es~s ,~ ~~IZ~'°`C'il~°'t3n"C~.LLI:: i-Y-G.-~-Ll-CV"i:Vl ._.~. V' G lfG'V 4L -1:.G- '.L:11G'~~-'Ciltl Glll.iCl; The actual expenses are covered by funds that the Metropolitan Council HRA secures from the Department of Housing and Urban Devel- opment (HUD) through an "annual contribution contract." Since HUD will increase their commitment term and the contribution amount to the Metropolitan Council, the term and contribution will also be increased to the HRA. The,_proposed amendments increase the re-_` mbursement to $1;2--per': unz_ .r __ ..___:___'~~~n3" __the - 19'8,0 cont~~c to April 15r 1987: A copy of the amendment is attached. One im- portant element to the contract amendment is that modifications are retroactively effective to January 1, 1983. This is important for the Richfield program since costs have risen above levels an- ticipated in 1980. The $1a per unit reimbursement is no longer adequate to cover incurred expenses.' The 1983 budget estimated expenses based on the $12 per unit per month in anticipation of the retroactive increase. The total reimbursement was projected. at $28,800. HRA Letter No. 42 -2- Lt is recommended that the ~ ~ ,the attached resolution auth~~~~~°~~~ir~=~.~rr~~~~~,~,~e_ ~~c'~e~~,~~'l~c`'~~~m~~icled"°cont~`~~`c~t sp ct 11 mitted, ~9 ~J ,/~ A John G. Car fight :' Executive Director JGC/ej a FIRST Ar1ENDMENT WHEREAS, the Metropolitan Council (.hereinafter referred to as "Council") and the Housing and Redevelopment Authority of the City of Richfield (.hereinafter referred to as "City") entered into a contract dated June 4, 1980, for re- imburse~ent of certain administrative costs to administer the Section 8 Housing Assistance Payments Program and . WHEREAS, the Council and City desire to amend such contract, NOtJ, THEREFORE., the Contract is hereby amended in the following particulars: 1. Section 4.A is amended to read as follows: A. Maximum Payment. The Council agrees to pay the actual costs in- • curred by the City in furnishing the services specified herein which are reimbursable to the Council by HUD, provided that the total Council payment to the City shall not exceed: (1) One hundred twelve dollars per month for cities with ten or less housing units per month under contract to receive assistance payments from the Council during the per.~.od for which reimbursement is provided, or (2) Twleve dollars per unit per month for the City when ten or more housing units are under contract to receive assistance payments from the Council., during the period for which reimbursement is provided payable monthly or quarterly. (3) Council Reimbursement on Yearly Average. The Council shall reimburse the City the difference (if any) between the actual cost and the monthly reimbursable average of housing units x $12.00 at the end of each calendar year during the term of this agreement. 2. Section 5. is amended to read as follows: 5. Term of Agreement. The services to be purchased and furnished under this agreement shall commence on January 1, ].980, and shall continue through April 15, 1987. This Amendment shall be effective January 1, 1983._ Except as amended hereby, the provisions of the above-referenced contract shall remain in force and effect without change. HRA RESOLUTION NO. CONTRACT AMENDMENTS, SECTION 8 PROGRAM WHEREAS, the Metropolitan Council HRA and the Housing and Redevelopment Authority in and for the City of Richfield entered in a contract dated June 4, 1980 for reimbursement of certain administrative costs to administer the Section 8 Rent Assistance Program; and WHEREAS, both agencies desire to amend such. contract; and WHEREAS, the proposed amendment.;iricreases the permitted re- imbursement for expenses,. makes the increased reimbursement retroactive to January 1, 1983, and extends the term of the con- tract to April 15, 1987. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelop- ment Authority in and for the City of Richfield, Minnesota that the Executive Director may execute the amended contract. Passed by the Housing and Redevelopment Authority in and for the City of Richfield this 19th day of December, 1983. Thomas E. Harms,- Chairman ATTEST: Joan Helmberger, Secretary -T` ! / r` HOUSING AND REDEVELOPMENT AUTHORITY ~.~"~ Office of Executive. Director HRA Letter No. 41 Agenda December 19, 1983 Housing and Redevelopment Authority Commissioners City of Richf field Dear Commissioners: Subject: Report on Status of Negotiations 6401-6435 ~_ Lyndale Avenue L/H/N Area Opdahl Property In October, 1983, the HR _~ - he:.,~ta+f to initiate ne o,.` s~ ~ ~=~P~ _ ~. - .~... g , tiat~cSh~ -'~i~e ~'i~bi~e'T'~~ r `ase of 6.401-35 Lyridale Avenue:.=~' The property was being probated following the death of Mr. 0. W. Opdahl, its owner. Probate Court appointed a trustee, Mr. Adrian Warren, to sell the property for the heirs of the estate. The property is between 64th and 65th and has approximately a .strip type shopping and south ends of the parking in the rear. located on the east side of Lyndale Avenue Streets. The site is irregular in shape, 52,633 square feet of land, which encompasses center. Parking is restricted to the north parcel, with some additional, but limited, This parcel is occupied by two principal buildings. They con- sist of a converted corner service. station separated from the larger jone story masonry building. The bu ilding has an area of approxi- mately 23, 981 square feet, does not have a basement, and was con- structed in about 1952. There are 12 rentable spaces, nine of which are currently occupied. Based on the appraisal reports,:..staff has negotiated a ten- ~~~ tati'~-purchase p~~ ~` '~ ° s`~~`~~e ~rust'~ee` and; ,,t~~o~e ~i:~~=~~=~`~'~ '~` - :;''~1~"~'~r~~~e pre--rt' s~"m~~8" `to,.the Probate ~ Caurt~~~ar =app$s~-~cont~.-rr~ent .. ixpon- a -f avor-, able finding:. by.~~h~aa~an~.ng~.~om~isn-~ It' would also be approp'~i- ate to-amend the L/H/N acquisition map. Funds for this: purchase of pro. ert are. available from L/H~'~~eap,ital "~mpYO~em~~~. ~ ~~'~"~ ag~ai- - =8~ - 'e'~. ~ ~I~b`~~~ if reno"vation~:-. i ~~~~-~ - - - - ~~~n sbrn~e~`~e~ Y - c~=i~'f`~ cams,, At the present: time, the ~,~i/~N xP,lan, adopted in T975, .indicate ~that~`Effie'"~`ap~i''~t~~i~,e„~fo'~ ~~~ll~are~a 'woi~~cl'A~b~'~`°~m~i'~1~t°i=family res-i- HRA Letter No. 41 dental. However,£ t tween 6 4th and 5 5~'i mu 1 •~i~~~`r1`~~~~"`cx~s ~'n g" s riow accuped~~~3~~''=t~h~e~ years::, s ~ of f ~; -2- ~I ~ u~.~~w~~ ~.f x tY~~ ~e _ c~.r cu m~.t ar ~ ~,~; ,~ ~~- t Y the ~L/H/N -Land Use Plan and identf rather than multi-°f amity use . - =r the entire area b -- ~-~ ~s~ ~ :~.-~ t a ~ x t'o-~-cnmp7: ~~i "'~e~ T~~rida~~- 'Garden r~~atet~'wto -the-:.....area n cia 1e. ;v~,~, ~„l.~c~ s `° ~~~~ ~... e owner, of the prop=`" j~``~c~`~"~3 ~` t ~ to" ~e'~ a -a `fi'r"~~Iittf~e5r'c 1 J ^~ If the HRA believes that negotiations for the purchase of the Opdahl property are mcsving in the proper direction, it would be appropriate for the HRA to take: the following ac ions ~ ~ 4, .. ~1>. Authorize the .staff to submit the proposed land use and acquisition map amendments to the planning commission for their opinion; i 2. Request the planning commission to make a finding re- ~y garding the proposed purchase and disposition of the ~ S~ property; ~p°~~ 3,. Request the city council to meet concurrently with they HRA at a special meeting on February 6, 1984 at 7:00 p.m. for purposes of conducting a public hearing on the proposed plan modifications. If the modifications are approved, at that same meeting the HRA would be requested to authorize the purchase of the property. g~ es. i {~ ,~ j0 It is recommended..th~at the HRA~~ oton requesting the ~p~~nions of the ~lanningµ co~~~'~~~ ~ any =~re~'t~e city. council; ~o m~~t ~bncu~rr~n y or pu_ ~ s~a"hlc ~eaxng regard-ng- th~.~ "i-'~°.~.i ..u3 _ , _ r ..~xx+ .t .~.4~ar7t •3~-~-. .. ka~r - - .-~.~ce~9Zd.~ ~ - ~- - - ., on r•eAruary e, .ryr~4,.- e p t ~1/ John G. Executi JGC/ej a ~~~ a tted, Di igh 3 d~+~ar ~~ ~o~hs~sal Modification No. 5 The Lyndale-Hub-Nicollet Commercial Improvement Progam "Amendments to the Lyndale-Hub-Nicollet Commercial Improvement Program," approved March 12, 1979 by the Housing and Redevelopment Authority, and, the City Council. on March. 26, 1979 i hereby modified as follows: The Land Use map, page 31, is hereby modified for the property lying be- tween 64th and 65th Streets adjacent to the east side of Lyndale Avenue from multi-family to commercial as indicated on the attached map. 12-19-83 c - (\~ ~ ~~ ~~. EMfR50NT'AVC ,' - ~~ ~~ .~, i~ LTNWDDD~ i J ~ ~ \ DUPoNT C j l l r '\' " ~~ '~ / ~ lip ,r ~ // ice( ,r , ~ / ~ eofrA: Avc O ~ 9~ j~~__ / [I I r ~ `h ~ ~ e[rArrt Avc -L \~' I i I I j m ~~ // I I~! ~ I I I j ' ; 'li //~ ~' i j ~~~~ ~.~, - J~ I I I ~ A ' / I AlD[ICN AV[. ~ f ~ ~y. /~ I I i I ~- O T m \~ ~ 'p z '~ ;III ~ ~ _ ~~\ ;'~ '~ ~I I I .czc ~~ i ,~ ~ A ~! I I ' % • I y~:o' ~ I I I -~~~--+, '~ ~ I I III I \~ -i ~ I I l i ~ ~ I i a ~ I ~ i I ww i I 1' w I MAIIM[T' AYC I I I I i i l i I I i I I I r-~ I .!I I wi i Ir~i^.,~~I I `_'t I I' J l i I r~ j I ~ ~ I I I I i i' i'! ' Iwl i i I w ~- ~ I' ' '~ l i l l l l I i~ ~ i' I~ i~ =~ ~ I I i~-~ I I i i i i 1=1 I! ~ a[ANe ' wt I I I I'. i S ' ~ ~= I I i i I I I , i ll~ 1 1 I ,~;~ I I! I ~ 1 I I ~ III ~~ II,_ I~ ~ I --/ rl[A3AMT AY[. I 3 j~ `-1 1 III ~ ~ ; I I I i I I ~! I A 1 I--i ! I I I~ ~ ~I I~ ~ ~ I I 1' ~; I I' I i I I I ui ~~ ~-J J__L_L~ I I i I I C I i' i _ ,i__.- ~NwuNr Avc O 1 I ~~ I i i I I i I I I I l i j g I I 0 1 ~ I ~~ I ~ 1 I I ~~ 1 i i ' S W[NTWORTN AYf. ~ --, ~ j i j r_.~"~! , III I I I j I j n ~ - i I '. , ~ I I I .I . Z a i ~ I i ~--~--=-- i i i I i~?j 1..1 M I [fA15D[LL AVL j ~~1 ' I, j I N F+ , I I. C rr a II I -1 I I I ~ 1 to m~o ~ 1 .. ~ I ; 1 ~ ~ ' ~ I I I' ~ m ~, , _~ _.~.~. 2 nleoLL[T a[. ; \ 2 Q , I I I, w, I i j I II I I°; I ww I ~ I - I :: ~ 1 •~[~ `~ ~-- ( i ST[Y[N[ ~ AVC I ,~ ~ ~_'_r-, I I I ', j I __~ i i i i ~ I I i ~I I I I I ~ ;~ `-' , s na Av[. I °' ~ . ~I LYN©ALE /HLlB/ N1C©LLET ~ ~ o ~ Ct7MME~tC~AL 1MPROV~1VtE3~'~' ~ II PROGf~A~Vt RICHFIELD, MN Modification No. 6 The Lyndale-Hub-Nicollet Commercial Improvement Program "Amendments to the Lyndale,=Hub-Nicollet Commercial Improvement Program," approved.. March 12, 1979 by the Housing and Redevelopment Authority, and, the City Council on March 26, 1979 is hereby modified as follows: The Property Acquisition map, page 34 is hereby modified fora portion of the prop- erty lying between 64th .and 65th Streets adjacent to the east side of Lyndale Avenue generally known as 6401 - 35 Lyndale Avenue and as indicated on the attached map. 12-19-83 t-35 -T , _ ~1I ~ -T'TT rit. 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EME1150N AYL ~ ~' ~ ;~ ~\, . _ . 1~_,. y ~~~~ _. ~ ij ;, ! __ ~ i. ~ eotr,x ,Y[. ~ ~ =_ I ` I l I ~ I''` ~ ~ ~. i ,_ [[run ,tY[. ~ T 11. i 1 ~~ .I ~~ ..~~..,~,T '~ to i i ~~ ~ '~ I ~~ l ~ ~2i WYIO •YL r.~i I j I I i wwr .Y[. ~i :, ~, ~~ . . i ' i rus[[[r •YC ' ' ITS ,; II lii~i wntrwo[n~ •Yc S ~I L.YIVDAL~ /HUB/ NICO1_LET CL7lViMERCtAi.. 1MPRt'~VEMEIVT PRL'~GRAM A!C!-iFiELD, MN I~ ' 'I I I r L~ HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director KQpF ~~ HRA Letter No. 40 Agenda December 19, 1983 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject:. Metropolitan Council Administration of Access- ory Apartment Program The Minnesota ..~~usi~g F,iz~an~~gr~Cy ,.,(MHFA} has developed a ' demonstration ~,b~l,Q.w~:~ar;ke,~-~ Wiest rate loan program ~c1~es,ig~,e~ t0~~~" hel sin le f anvil ho~eo ~~ _ an~ ~~ ,~e~ssory~( ap~artme t .~~t4 _~hezr, ~~,~~ ~ ~. v ,.~, hoi`n~', "or ~``"ring any~x~st~ ~ :~: un t info comp~~.ance with >r .~' ~'~,k. ~t3ti'"~ 3='r~W~~ w•rr Via;, rfE..~ Io~a'~``'ht~'us~~ig and%or ~tiild~.ng co es_: An accessory apartment is an independent living unit, with self-contained kitchen, bathroom and living facilities, that is developed within a house .initially con- structed as a single family dwelling. ;Loan funds can be avai able;: to Richfield property Qwi1~rs Burin, 194 i~~~"t$e ~HRA is willirng ~t a~`~'~i~i~s"~"~~h`~~4 t~<-~r. ~~~ or Perms ~ ~e`~~~ti~~~i~t~~~~kl~}~I~f ~~r~~~~`~Y~fo Thin letter discusses the program- aid its administration-and recommends that the Richfield HRA designate the Metropolitan Council HRA as the program administrator. to increase the sta e's p: 1 of moderate cost r-ental uni~; d 4~. ~'I-L',LtiR'+['1`. Ylilli+^^a~1~./~'~. - ~~irig~ ~ousing costs, an,~ -to develop~~:mo~e .,c~osut-"e.~~~.~~? r~~tves for housing ~uni±~ production than relying sofely an new construction pro~~on.j~: In 1982., the MHFA conducted an extensive analysis of market and economic feasibility of accessory apartments in Minnesota. The conclusions of the study, based on research, interviews, statis- tical data and future projections, substantiated program develop- ment. In general the main conclusions are: -there is an increasing market of potential renters for accessory units; -many single family homes are underutilized; -elderly can benefit from the companionship and home main- tenance assistance opportunity an additional unit provides; -rental income reduces housing costs for the occupant prop- erty owner; -the development of accessory apartments, both legal and illegal, already occurs. HRA Letter No. 40 -2- December 19, 1983 The program guidelines, are .:att.ach,~ed for reference. In summary,' he. `~r'~X`ti~z~lr~ttt-", . mid ° '~ ";, ~~ r income level se- ~er ~ ~ ""'~i~'~~z~ o e ` h c e .on the accessory ~.~r,.,, ~- -~ ~ ~~ ~ ~ unit; e ,loam ~.n~~e~~~`sf`"ra~.e. is varia'1.e e endin ,." on,__hoine~wner~~ i~o~. ~~3~~e'd~;..}rome~~m'~~., , ~ er-occupie _ ~, ;one ad "~`~~`c~'i ~ ,,, all modifi~~ations must °`~e in ~'; local zoning requirements ` and ~ applicable state - ,.x~a3..~.~,-.a ~~r '~~ r _ Recent Richfield zoning ordinance changes would, by special use :~~` ~e ..~ ~~~c~~°c'~s'~~~'~p~'~i~~ ~'ur~r`~s~`bri"~1`"4`~"cl~:f~ererif`,~a~t'e~~iaJ '~nt~~`~~~'tr€~~'ets~:° However, the city ordinances do not allow accessory units in other areas of the city. This program could only operate in those areas properly zoned. - The scope and. details of the program are similar to the moderate income Rehabilitation Program for rental housing that the Metro- politan, Council HRA already administers for the Richfield HRA ,- this'new~program :,the _Metropo,ltan, Council HRA staff plans to a- f"iiiser app~roxi~a`'~.e'lY' ~'I~rO"0`~°~~.n ~.oan fug .; to those communities that`are interested. Presently', Cottage Grove, Stillwater and Columbia Heights are interested. Richfield staff has indicated that the HRA would also consider participation. .'fhe Metropolitan_`` .':Council HRA 'functions .would- be as :f,ol"lows ~- {. y~1~. Market the program to prospective homeowners. 2r. Provide program applications and information to inter- ~~rr Qsted homeowners. / 3`. .Screen applicants to determine preliminary loan eligibility, amount of loan, applicable interest rate and property eligibility. ~. Package the home improvement loans. ~; 5': Ver-ify .compliance with local zoning ordinances and housing codes. f~ Provide sources of technical assistance and support service relating to contractors, architects, unit design, improve- ,/ ment feasibility, tenant/landlord relationships, etc. / If:; Richf field parta.c~.p~~.~._~ ~t~~d also .have certain;:respons- bil~`~'i:es `for , the° g~r~ ncl-udinx~,~cond c~ ng~a~ca'b~"e ~bu~dinc xez~.~_ ,'"tea"- rL7 cQ~.ny a L1Lt{C 11/ br.C~:~J.Ql-Ur7C culu. LULL\.iilly: L./~.L~U - z The opportunity to receive the services of this program from the Metropolitan Council HRA is important. Even"though Richfield HRA. staff resources have not been provided for these services, funds have not been appropriated, and the commitment of time and energy would be large for the expected low number of loans that Richfield property owners might secure. in this demonstration program, there-are many reasons ta;.partcipatein the program.~'~ By having _acceas to the- program:: _ YY ~n 4, r_; ",y 'ngl;e residents. in under- ;:,. -it c uld assist se for citizens, si .. .~_ _ ..,.~_... _. _,~ ._.... ~ .~w.._~r ~ _~~ _. i .~viao ~uvpuxsrmrxu-:>.: n.,uw~v~.. ~:.vvu.s s~_ HRA Letter No. 40 -2- December 19, 198.3 units are truly affordable). ourteen percent of`our popu 1 at~~x~`~ ~ ~- ed~ ~ 2 ~n~ b~":¢ ver 1 ~~~ ~~~~ ~'ccu~`~ ~~ ours e ~ ' holds ~av ~~~~ ~~~~ a°"'cbnt~~tng~need for' aft ;'~~~ :~ ous in"' ~ a'1~~~"n"~~1i'~ies"y ~;or low and moderate income,: q ~~~~. 5 p~ se~is . -.it appears. to be consistent' with policies within our compre- ,,;~'- hensve p>~a3~ ~'nce the`-housing that results increases density, is more affordable, and adds variety to .the housing stock; ~ tJ~,e,~.~;,t has staff that would assist, in the special use permit proses Y~`(city planner) "and the` inspection/enforcement functions (building inspection division and the normal building permit process). -~ provides~an~oortunity to maintain and/or increase our :- Policy 3~ 1'iau~~.ng pe~`~ori~ance score. ~~ -a precedent in program administration authority is not being made since similar low volume programs have been given to the Metropolitan Council HRA to administer. Thus, ~~~..rexcd,,~~.~t~~~ - ,H A_ "ado t the attached resolution whi`c~fi~`~°a`i~~.1~ ~ _.~s ty1.~, Metro oli,"`~ ~ p~i~r '`'to"~ad~ninster the ~t Y lLT ~~,.~aty„~~~1 „6cY.i 5:p~zy~py+a,~ C '! J FA;~. . dem~tration Accessoryt~~par men t_ Loan '1~~raq~'~iti R~c~hf°eid' ectf ply ' 6~iitted, ohn G. Cart fight Executive Direc r JGC/ ej a cc: Community Development Director ~~a: MHFA Demonstration Accessory Apartment Loan Program The following are general MHFA program. regulations: 1. All loans must be FHA Title I Home Improvement Loans. MHFA will purchase the loans from the Title. I lender secured by the administering agency. 2. The maximum loan amount is $15,000 with a 15-year repayment period the loan is due upon sale of property. 3. Homeowners can qualify for the loan in one of two ways: a) If .annual adjusted income is $24,000 or less, the interest rate is based on amount of income. There is no restriction on the amount of rent: charged for the accessory unit. b} If annual adjusted income is over $24,000, the interest rate is 11~. The homeowner must sign a statement agreeing to rent the accessory unit within the HUD Section 8 Fair Market Rent limits for existing housing. 4. The annual income/interest rate schedule is as follows: $ 0 - 7,000 30 $17,001. - 24,000 10 Za $ 7,001 - 12,000 70 $24,001+ 11% $12,001:- 17,000 9°s The Section 8 Fair Market Rent i,imits for the Metropolitan Area are as follows: efficiency $262 1-bedroom $317 2-bedroom $372 3-bedroom $429 4-bedroom $483 5. The converted single-family home must be owner-occupied; this is required under the federal tax law regulating the use of revenue bond. proceeds. 6. The single-family home .to be converted must be limited to only one accessory unit. The home can contain up to two existing units if the loan is to be used for code compliance improvements. 7. All modifications must be in compliance with all applicable local zoning, housing and building codes and with the State Energy Conservation Standards for Rental Housing. HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE METROPOLITAN COUNCIL TO IMPLEMENT A DEMONSTRATION ACCESSORY APARTMENT LOAT3 PROGRAM WITHIN THE CITY .OF RICHFIELD WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield (Richfield HRA) desires to assist lower-income .families and individuals to retain and. obtain adequate housing in the City at-an affordable level and to accomplish the purpose of providing technical assistance and loans to single-family homeowners for the purpose of accessory apartment development or rehabilitation; 'and, . WHEREAS., the Metropolitan Council h.as been designated a housing and redevelopment authority pursuant to Minn. Stat. 473.193 with the powers and duties of a housing and redevelopment authority under the provisions of the Minnesota Housing and Redevelopment Authority Act, Minn. Stat. 462.411 to 462.711, as amended; and,. WHEREAS, the Richfield HRA and the Metropolitan Council desire to encourage the supplementation, rehabilitation., and legalization of rental property within the City; and, WHEREAS, the Richfield HRA has determined that a program to en- courage the creation and rehabilitation of accessory apartment units is consistent with its housing. goals and furthers. the objective of providing affordable housing opportunity within the City; NOW,. THEREFORE BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the. City of Richfield that. the Metropolitan council be authorized tcz implement the Demonstration Accessory.Apart- ment Loan Program within cne City of Richfield for the purpose of encouraging the creation and rehabilitation of affordable, private accessory rental units within the City. Passed by the Housing and Redevelopment Authority in and for the ~. City of Richfield this 19th day of December, 1983. Thomas E. Harms, C airman ATTEST: Joan Helmberger, Secretary HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 39 Agenda December 19, 1983 Housing and Redeye lopmen t Authority Commissioners City of Richfield Dear Commissioners: Subject: Designation of Auditor for 1983 Financial Records For he last three years , the city, and the HRA have hired the `audt~.~i~ ~`~`aria ~~~~ to`"~`~~r~o"rmv~the '~" ~~pf"d' On. November annual audit 5- - ~ recor s audit of the City's 1 98 3 fin~anc I. ~NKree~gar~;,,a~~1 , o, -have ;also pry osecl .to;~cond~uct,~the~ -$ ,. - 9~~~:and 19~ `~~;`~~ - U ~ ~d ` e l~ _ . ~: r the HRA, a ~c s `lt 198 ~ HR'r°~audit casks were ~2, ,~ , ~s ec _ve y. $ecause=~ ' h 3 ' . p with the th' s d~Y~'~"~~''~~" wor~'king r~ns " likely require use recent•audt r"equirements will r.~ ~ ~~- ,7~, ~~~~f C tYG...d c,.~.a. ~l ..:~zra:~f,~-~x~on,,r.~a.~s ~ ~'. e that~~ H ~~igrrate Cu~mings, Keegan and Co,=: re4 ~ ~ to ~`o~;ty'tie 1 au ~, 'he city manager has advised the city council that. efforts ~.ri '1984 t.o "ar~tabl's ~~-ter-. ~r~~;,~, will` be made early a e ~ ~ _ - ro o s~ awl s~,,,;~~~,~?~a? ter ~~ tter) . l l ou e ~ .. e nci . c ee a ac views wi~.f respor~.d3ng°. -firms'; pectf 11 bmitted, 4. V'- V Y Y,~~ i / John. G. a Wright Executive Di ctor JGC/e j a cc: Administrative Services Director CITY OF RICHFIELD, MINNESOTA Office of City Manager .~ y Council Letter No. 387 November 28 , 1983 Agenda The Honorable Mayor and- Members of. the City Coun:c it City of Richf field Coun ciI Members: Subject.:.: Design ation of Auditor to Conduct Audit of 1983 City Financial Records The ci y has received a proposal from the firm of Cummings,. Keegan and Co: for auditing services for the 1983 financial records. This company has served as Richfield's auditor for the past three. years.- The proposed cost of the 1983 audit is $19,000. The cost of the 1982 audit was $17,37.0, and the cost of the 1981 audit was $15,80.0. The 1984 budget in eludes an appropriation of $20,600 for this service. The City Charter, Section 2.08, provides that "the council shall provide for an audit of the city's accounts at least once a year by the state department in charge cf such work or by a cer- tified public. accountant." Ir, 1980, when the council authorized retention of Cummings, Keegan and Co. , an interest was expressed in retaining this firm for several years, to provide continuity in the audit and to permit the auditor to develop a familiarity with. Richf field's financial procedures in order to direct the audit to the city's overall financial. management practices as well as the accounting records.. This relationship has worked out positively. It is recommended that the city similarly solicit proposals from auditing firms during 1984 to again establish a longer-term relationship for this service, whether with Cummings, Keegan and Co., or some other firm. During the first half of 1984, staff will take steps toward the implementation of a longer-term (5-7 years) relationship with an auditing firm, including the follow- ing 1. Prepare a Request for Proposals (RFP) describing the scope of work to be performed; 2. Send RFP's to all regional firms known to be exper- ienced in governmental auditing; 3. Establish criteria to evalu ate proposals from audit- ing firms; Council Letter No . 38 7 -2- November 28 , 198 3 4. Council/staff committee interviews. of selected firms; 5. Recommendation to .the: council for selection of an auditing firm. It is recommended that. the city council take :action on the. proposed contract with Cummings, Keegan. and Co., at the November 28, X983 city council meeting. pectft}~lyi b~mitted, ~. ' f --- i./~i . John G. Caf fight City Manager _..~G~je j a.... r~ J ,AMESJ ~CEaAN C?A ='~P=Y 0 :.ICRiCX C?A ~GGcR S .Vr??Pvr,?4 N CCNALD CUtlMtNGS. C?A 3rT:?~~ • Cum m 1 n ~s, Deegan ~ Co. . Certified Public Accountants 6800 France Ave. So. • Suite 46~ • Minneapolis, l~~fN 33433 Phone (612) 922-3622 October 28, 1983 City of Richfield City Council c/o Ronald Rankin Administrative Services Director - -------- 6700 Portland Avenue South Richfield, MN 55423 Dear Council Members: MEMBERS CF • PRIVATE COMPANIES ?RAC^C£ SECTION CF AMEflICAN INSTITUTE CF CERTIFIED PUBLIC ACCGUNTANTS • MINNESOTA SCCIE?'~ OF CERTIFIED PUBLIC ACCOUNTANTS This letter is to confirm the arrangements for our examination of the financial statements of City of Richfield for the year ending December 31, 1983. We will examine the financial statements of the various funds and accounting groups of The City of Richfield, Minnesota, The City of Richfield Police Relief Association and. The Richfield Housing and Redevelopment Authority, for. the year to end December 31, 1983. Our examination will be in accordance with generally accepted auditing standards and will include such .tests of the accounting records and such other auditing procedures as we consider necessary in the circumstances. While the objective of our examina- tion is the expression of an unqualified opinion on the aforementioned financial. statements, an opinion may have to be qualified or denied as the facts and circumstances dictate. The ordinary examination leading to the expression of an opinion on financial statements is not designed to disclose defalcations and other irregularities, nor can it be relied on for this purpose. However, if such irregularities come to our attention during the examination, we will discuss them with you to determine what course of action to take. Your .accounting department personnel will be available to assist in preparing-certain audit schedules and data, locating various supporting documents in the files and typing confirmations and the final audit report. Fees for these services are at our standard hourly rates and will be billed to you, plus out-of-pocket costs, monthly. These invoices are payable on presentation. A service charge of 1 1/2y per month is made on accounts over thirty days old. 1 Accwntin4 ~Irm: A5.4oCCtec inC City of Richfield Administrative Services Director Page 2 Every effort would be made to keep our fees to the minimum consistent with the service requirements of the engagement. assuming that the. City and the two related entities have accounting records which are complete, balanced, reconciled and .well documented as of December 31, 1983, and that City per- sonnel would be available to assist in preparing certain audit schedules and data, locating various supporting documents in the files and typing confirma- tions and the final audit report, our charges for the. various audit examina- tions for the year ending December 3I, 1983 would not exceed the following maximum fees: City itself and City Police Relief /~ 0/b Association $19,000 ,~,. Ric field Aousirig and Redevelopment ~.'~' a ,,.. ~~thorZty $3,000 `~ ~/~ O If at any time during the .engagement, any extraordinary matters requiring an extension of our services come to our attention, we will consult with you before proceeding. If the preceding correctly expresses your understanding, please sign the enclosed copy where indicated and return it to us. We are looking forward.to serving you again and working with the City staff. Sincerely, CUMriINGS, KEEGAN & CO. i ~ -. ~~ ~ Partner The above is in accordance with our understanding. 8y Title CITY OF RICHFIELD, MINNESOTA Office of City Manager and Office of HRA Executive Director Council Letter 395 HRA Letter N 38 November 28, Agenda The Honorable Mayor Housing and Redevelopment and Authority Commissioners Members of the City Council City of Richf field City of Richfield Dear Council Members and HRA Commissioners: Subject: Public Hearing on Housing Plan and Program, Multi-Family Program As part of their Market Plaza concept for development of the "Godfather"Block" in the L/H/N, Derrick Land Company is proposing the construction of 150 rental apartment units. To help assure the feasibility of this project, it is proposed that housing revenue bonds be utilized. A housing program is a strategy for achieving needs and goals as identified in the housing plan. The letter- summarizing the hous- ing plan contains a list of seven possible programs which could meet the stated needs. (Council Letter No. 380, pages 4-6, November 28, 1983) . Statement number six in that letter indicates that there is a n eed for multi-unit rental housing within redevelopment projects. The attached multi-f amily housing program proposes to meet that need. -The multi-family program indicates the unit mix, size and pro= ject rent. (Attached - Multi-Family Housing Revenue Bond Program) It also states that 20°s (or 30% of the small one-bedroom units) will have rents affordable to families and individuals (elderly and non- elderly) with incomes which would qualify them for participation in the Federal Section 8 Rental Assistance Program. It is important to note that ten ants need not be participating in the Section 8 pro- gram, but that 20% of the units would be affordable to persons with incomes which fall within~.the program limits. At the present time, the Section 8 program income limits are $17,700 for one person and $20,200 for two persons. Incomes may be less than the amount stated, but cannot exceed them. Fifty-five percent or 83 of the units will be available to ten ants with incomes of approximately $34,960 to $36,960. The re- maining 37 units will be rented without regard to income limitations. This program will help assure the availability of housing to moderate income families or individuals. At this time, the availability of the affordable units for moderate income tenants is required by fed- eral law and regulations for approximately .ten years after 50% of Council Letter No. 395 HRA Letter No. 38 November 28, 1983 -2- the units have been occupied. The bond issue for this project would approximate six million dollars. However, unlike .the single family program proposed for the Portland Avenue area and Lincoln Hills, multi-family rental projects are not funded on a competitive basis from the bonding authority pool of $27.5 million. A municipality may issue tax exempt multi-family housing bonds provided it has an approved housing ,plan and an approved multi-f amily rental program based. on the plan. The plan and program must be approved locally, reviewed by the Metropolitan Council and approved by MHFA. It would be appropriate to approve the multi-family program .now. It can be combined with the housing plan and single family pro- gram and processed. by the Metropolitan. Council and MHFA simultaneously. Secondly, Congress adjourned November 18, without rescinding the law which "sunset" housing revenue bonds. Thus, after- .December 31 , ,1 983, there will be na--legal basis for the issuance of these bonds. However, the concensus is that early in 1984 Congress will en act .legislation which again provides tax exempt financing for housing. It is likely, however, that restrictions will be imposed. To protect access to this financing for Market Plaza, it is the opinion of the city's bond counsel that. the City Council and the HRA should act on this program element now so that there is a record of the city's intent which may, in turn, grandfather city actions that Congress may attempt. to re- strict in 1984. It is recommended that the City Council and HRA approve the attached program by a motion directing the city clerk to amend "Resolution Approving a Housing Plan and Program Under Minnesota Statutes, Chapter 462C" for the plan and single family program, to also include the multi-family renta~„1program. s bmit~ted , Xtohn G. ~C Wright ~ City Man ger d HRA Executive Dir to JGC/ej a MULTI FAMILY HOUSING REVENUE BOND PROGRAM The City is authorized to issue Housing Revenue Bonds for riulti-family Rental Housing. In issuing the revenue bonds, the City wi1Z carry out the housing policies and the LNH redevelopment plan. To issue the bonds, the City finds that such action fu1fi11s part of the Housing Plan. The City Council and HRA are presently considering development of the block surrounded by 66th Street, 65th Street, Lyndale Avenue and Graham Avenue. This proposal conforms. to the City Housing Policies and the Metropolitan Council Housing Guide Chapter. MULTI-FAMILY The Program The HRA intends to develop a parcel of land within the Lyndale HUB Nicollet Redevelopment Project Area with liulti-family Rental housing. This site, located at 66th and Lyndale Ave. South, is programmed for the 150 units of multi-family rental housing units. The housing units wi1Z probably have the following rents: 24i 1 bedroom 660 sq. ft. $396.00/mo. 30i 1 bedroom 720 sq. ft. 455.00/mo. 30i 1 bedroom/ den 850 sq. ft. 495.00/mo. - 160 2 bedroom 950 sq. ft. 541.00/mo. * A11 rents in 1983 dollars At least 20% of the units wi11 be for moderate income families. Assumed Bond Issue The City wi11 provide the means for Housing Revenue Bond for this rental development as follows: Bond Proceeds: Cost of Issuance, discount The Bonds wi11 be unsecured with Federal Housi.~g Administration 221d4 and MBIA. The bonds are insured to 93~ of value. Maximum Income Limit The Project will constitute a multi-family housing development within the meaning of Subdivision 2, Section 46X.05, Minnesota Statutes. 20~ of the units in the Project are to be held for occupancy by families or individuals with adjusted gross income not in excess of 80~ of the median family income as esti- mated by the United States Department of Housing and Urban Development (HUD) for the Minneapolis/St. Pa u1 area. The-units which wi11 be so held for wrz- -_,_._ occupancy wi11 be 30 one-bedroom units. Each of these units is expected to rent somewhat below market rates. In addition, 55i of the units in the project wi11 be occupied by families and persons whose adjusted gross incomes do not exceed 66 times the rent of the unit, such rent to be no more than 120 of the fair market rent for new construction as determined by HUD for that type. of unit; in the case of the project, the .maxi mum adjusted gross income of a family or tenant in the units so restricted would be approxi- mately $34,960 in the sma11 two-bedroom unit or $36,960 in a large two-bedroom unit. The remainder of the units in the project (25%) mau be rented without income limitation in order to encourage economic integration. Federal law governing the exemptions from Federal income taxation of interest on obligations issued by the City to finance the Project (Section 103 (b)(4)(A) of the Internal Revenue Code of 1954, as amended) requires that at least ZOo of the units in the project be occupied for the term described therein by indi vi duals of Iow or moderate income (gross income not exceeding SOi of the median household income for the area). Periodic reports wiZ1 be submitted to the City in order that the City may monitor this program. The City will incur no additional costs in connection with such monitoring. Eligible Participants The rents of 20i of the housing units are structured to allow rental by moderate income persons. Persons eligible for the:-e housing units are described above. Targeting The Housing Revenue Bonds wi11 be used for mortgage financing of a 150-unit housing development in the LP7H Redevelopment Project area. Developer Participation The HR.~ is responsible for developing this tract of land. the FIRA has selected a developer and is negotiating a redevelopment agreement for this parcel of land. Besides the 150 unit rental devel'o Men t, the p~ project includes 70,000 sq. ft. of retail and 130 market rate condominium dwelling units. The developer will be contracting bond underwriters, legal counsel, and buyers of the bonds. All underwriting wi11 be in accord with state and federal laws and regulations. Cost to-HRA and City The HRA is purchasing the Land parcel and selling it to the developer. The estimated cost to the HRA is $4,447,000 including Land acquisition, relocation,. szte improvements, soil correction, administration and general obli gation tax increment financing costs. The City has participated in substantial publi c improvements withinthe redevelopment area including the streets and pedestrian areas adjacent to thesite.. Bond Proceeds The Bond Proceeds wi11 be used for permanent financing on the 150 unit rental apartments. The developer wi11 provide 27% equity ($2,187,000) for the $7,999,000 project. Bond proceeds will. be used for the mortgage ($5,920,000). The debt service margin wi1Z be 1.1:1 and wi11 be paid back in 20 years. Bond discount and issue cost wi11 be 2~-3~.