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HomeMy WebLinkAboutEDA MIN 09-06-11ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE SPECIAL MEETING OF SEPTEMBER 6, 2011 IN CONFERENCE ROOM 1 The meeting was called to order at 6:30 pm by President-Gary Peterson. Members Present: Bruce Nawrocki, Gary Peterson, Bobby Williams, Gerry Herringer, Marlaine Szurek. and Donna Schmitt. Members Absent: Tammera Diehm Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson. 2. PLEDGE OF ALLEGIANCE- RECITED CONSENT AGENDA Approve the Minutes of August 1, 2011 for the Special Meeting. Approve the Financial Report and Payment of Bills for July 2011 per Resolution 2011-12 Questions from members: Nawrocki asked if the proposed expenditures for phones for the 2012 budget figures discussed at the last meeting had been looked into. Clark said he did have a discussion with the Finance Director regarding that line item and changes were made to the amounts and how they are labeled. Motion by Schmitt, seconded by Herringer, to waive the Reading of Resolution 2011-12, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Herringer, to approve the minutes and to adopt Resolution 2011-12, approving the Financial Report and payment of bills for July 2011. All ayes. MOTION PASSED. EDA RESOLUTION 2011-12 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JULY 2011 AND PAYMENT OF BILLS FOR THE MONTH OF JULY 2011. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of July 2011 has been reviewed by the EDA Commission; and EDA COMMISSION MINUTES PAGE 2 September 6, 2011 WHEREAS, the EDA has examined the financial statement and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS, financials statements are held by the City’s Finance Department in a method outlined by the State of Minnesota’s Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 6th day of September, 2011. MOTION BY: Schmitt SECONDED BY: Herringer AYES: All ayes BUSINESS ITEMS 4. REVIEW OF SCATTERED SITE HOUSING TIF PLAN Clark explained that action taken by the EDA on April 28, 2009 started the process of acquiring blighted properties, most of which were in foreclosure or short sales status. The goal of the EDA was to purchase these properties and then recapitalize the originating TIF District (C8) from both sales proceeds and tax increment (to be created through a Scattered Site Housing District). These funds would be used for additional housing program needs. At this meeting the EDA is reviewing the draft TIF Plan which is a requirement in order to create the Scattered Site TIF District. The EDA will formally act on the Plan at their October meeting, with a public hearing to be held by the City Council on October 10, 2011. This TIF Plan is not an agreement on how to sell the properties or at what price. There are some assumptions within the Plan but these serve as a general guideline for various computations. Staff will present information in November and have a discussion on disposition policies at that time. EDA Commission Minutes Page 3 September 6, 2011 Questions by members regarding the proposed TIF Plan: Nawrocki asked if the district would only include 23 parcels. He was told that was true. Nawrocki noted that the City owns 17 parcels, not 16. He said the City should look at the possibility of selling the properties, with restrictions, so they could be built on now. Clark stated that is a policy decision that will be discussed in November. Nawrocki went on to state the taxes generated to pay for City, County, and School District services will be tied up in this TIF District and that the citizens will have to pay extra to make up the reduction in tax dollars generated for this District. Clark said that is an issue the Board has to decide. Do they want to set up a fund for housing and redevelopment to meet future needs. If so, this is a tool to use to provide the funding needed to do that. If they decide not to establish this District, Clark stated, the General Fund will not have the funds available to allow for dollars that could be used for housing improvement programs. Schmitt stated she understands what Nawrocki is saying, but pointed out that these properties are not generating tax dollars now, so in fact, residents are paying taxes to cover services already. She said that eventually houses will be built on the properties and it will bring new residents and consumers into our community. Fehst pointed out that even if the TIF District is established, once the properties are sold and built on some tax dollars will go to the City, County and School District. The taxes generated for the City, County, and School District would be a frozen amount based on the value of the lot with the additional amount going into the TIF District for the approved period of time. Schmitt asked if TIF Districts have ever been paid off early? Fehst replied that he doesn’t believe any have ever been paid off early, but all the Districts have been successful. Clark told members that housing redevelopment and programs encouraging improvements to existing housing are a vital city service just like Police and Fire. The City must stay on top of blight to keep neighborhoods healthy and to prevent a drain on other city departments and services. Nawrocki stated that cities must make choices and only provide services that are absolutely necessary, not those that are nice or “desired”. Herringer asked if the District would be locked in at 23 parcels, or if parcels could be added to this District if we purchase more in the future. Stacey Kvilvang from Ehlers & Assoc. responded that in order to expand the District later, it would require an amendment and a Public Hearing. Peterson asked if we can still buy houses. Clark told him yes, the new purchases just wouldn’t be part of this TIF District. We can still buy, demolish and sell properties as decided by the Council. Nawrocki again stated he thinks the properties should just be sold as is, and not establish this District. He thinks developers should build on these sites so the full tax revenue goes directly to the City, County, and School District as soon as possible. He doesn’t think the City needs to worry about redevelopment of the housing stock in the City at this time. No action was required at this time. EDA Commission Minutes Page 4 September 6, 2011 5. ALLOCATION OF FUNDS FOR CITY’S SINGLE FAMILY DEFERRED LOAN PROGRAM-RESOLUTION 2011-13 Cartney explained that for the past four years the EDA has administered two home improvement programs: Rehab Incentive Program and Single Family Deferred Loan Program (SFDL), and every year a reallocation of funds is done by resolution to keep the programs running. In February of this year staff requested that funds be allocated to the Rehab Incentive program and not the SFDL program. The SFDL program still had $24,000 remaining from the previous year. The Rehab program was funded with $50,000 this year and the SFDL was to use the remaining funds from last year. Since the beginning of 2011 the City took over administering the programs and staff has approved five SFDL applications in a total amount of $21,587.00 therefore the 2010 funds are running out. If the EDA would like to continue this program an allocation of funds is necessary. Typically the EDA allocates $35,000 to this program from the Capital Improvement Development Fund (420). Single-Family Home Deferred Loan Program (SFHD) The purpose of the Single-Family Home Deferred Loan Program (SFHD) is to provide low-interest loans to homeowners of lower income to complete structural improvements that would help maintain the quality of their homes and the City’s housing stock. Assistance is targeted at homeowners who need to perform home maintenance, but who may not be able to pay a monthly debt service of a conventional loan. The SFHD would provide half of the total project costs, or up to $7,500, in a deferred loan to homeowners making 80% of the median area income or less ($67,200). To qualify for the program, the homeowner must provide matching funds for the remaining project costs. Home equity loans or an MHFA loan qualify as matching funds. Exterior home improvements related to health and safety, code violations or energy efficiency, such as windows, siding and roofs would be eligible. Repayment of the loan, plus simple interest of two percent, will be required upon sale of the house or transfer of title. The homeowner can use the proceeds from the sale of the house to pay the loan. Repaid loans will be returned to the funds available to finance future loans. A lien applied to the property ensures that the loan will be repaid. Staff recommends the EDA fund the SFDL program. Questions from members: Nawrocki stated he thinks the administration of these two programs should go back to GMHC. He doesn’t think there is any advantage to having the City administer this, versus GMHC. Clark told members that since we took over there has been a lot of positive feedback from residents who started with GMHC and finished the process with us. He said they prefer to be able to take care of this locally rather than chasing down to Minneapolis. They are happy that they get prompt responses to their questions and like dealing with staff here better. EDA Commission Minutes Page 5 September 6, 2011 Schmitt asked how many years we have allocated funds for these programs. Cartney said about $50,000 has been allocated each year for the past four years. Last year we had $24,000 remaining in the Single Family Deferred Loan Program fund so the allocation for 2011 was not done earlier. One of the members asked if any money had come back into the program yet due to someone selling their home. The answer to that is no. Motion by Szurek, seconded by Schmitt, to waive the reading of Resolution 2011-13 there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki to remove the third Whereas section as follows: “WHEREAS, in 2011 the City’s Community Development Department, in order to provide better service for the residence of the community, has taken over the duties of providing information and implementing these programs, and” The motion died for lack of a second. Peterson wondered why Nawrocki is so against the Community Development Department and the purpose it serves. Nawrocki wanted the record to show it is premature to allocate these funds since the 2012 budget hasn’t been approved yet. Schmitt asked if the fund allocation was coming from the 2011 or 2012 budget. Clark said it isn’t coming out of the budget. The funds are re-allocated from the 420 fund which is set up for this purpose, and these transfers are only asked for when needed. Motion by Szurek, seconded by Schmitt, to adopt Resolution 2011-13, a Resolution approving funding for the Single Family Deferred Loan Program (SFDL) in the amount of $35,000 from Fund 420. Roll Call: Herringer, Szurek, Schmitt, Williams, and Peterson – aye Nawrocki-nay. MOTION PASSED. EDA RESOLUTION NO. 2011-13 A RESOLUTION APPROVING FUNDING FOR THE SINGLE FAMILY DEFERRED LOAN PROGRAM ($35,000) WHEREAS, since 2002 the Greater Metropolitan Housing Corporation (GMHC) has provided housing consulting services for the City of Columbia Heights, and WHEREAS, over time the majority of their service time has centered on the City’s Rehabilitation Incentive Program and the City’s Deferred Loan Program process, and EDA COMMISSION MINUTES Page 6 September 6, 2011 WHEREAS, in 2011 the City’s Community Development Department, in order to provide better service for the residence of the community, has taken over the duties of providing information and implementing these programs, and WHEREAS, this resolution seeks to authorize and provide additional funds for the continuation of the City’s Deferred Loan Program, to be administered by the City, NOW THEREFORE BE IT RESOLVED THEREFORE, BE IT RESOLVED, that the EDA allocates $35,000 for the Single Family Deferred Loan (SFDL) Program from Fund 420 – Capital Improvement Development Fund. Passed this 6th Day of September _________________________ President, Gary Peterson ___________________________ Walter Fehst, Executive Director 6. ROOT PROPERTY INVESTIGATION GRANT Clark explained that on July 18, 2011 the City of Columbia Heights received official notification from Anoka County that the Root Property, 3930 University Ave. (map enclosed) was taken into a State Trust as a tax forfeiture parcel. Based on State law, the County becomes the manager of the property and eventually handles the disposition of the parcel. It is obvious that this is an unusual property due to the potential levels of site contamination issues, and it is doubtful that the property could be sold at auction and put back into productivity. Therefore, staff is making a series of recommendations to the EDA to assist in the long term process of cleaning this property and to establish this as a redevelopment site (identified as a redevelopment “Area of Opportunity” within the City’s Comprehensive Plan, August 2010-page 20, Figure 2-3). This site has been problematic for the City for a number of years. This includes a series of abatements of the property for general clean-up, removal of mercury containers in October of 2007 and demolition and contaminated ash removal from a fire in 2010. It should be noted that the tax forfeiture process eliminates the existing abatement assessments against the property, but once the property is sold to the private market the City can reassess. The last action to note was that the City sponsored a Department of Employment and Economic Development (DEED) grant for the property owners in 2009, but those owners failed to act on the grant due to their inability to provide the required matching equity. All of this history leaves the City in a position to be the agent of change, since Anoka County is merely a property manager of the site and have no driving reason to remedy the issues at hand. EDA Commission Minutes Page 7 September 6, 2011 However, Anoka County is willing to cooperate in the City’s goal to clean the site, and therefore, will allow access to the site. Based on this staff is recommending the following: The EDA (City) should apply for an investigation clean-up grant from DEED similar to the one secured in 2009. Although the City does not own the property, DEED will allow us to apply directly based on consent of the County. In turn, staff has had discussions with the County who stated that they would allow, based on their approval process, consent to the grant and allow access to the property for investigation. Completion of these actions will position the City to apply for the next series of grants which are for the actual brownfield clean-up funds. The initial investigation grant has a 25% equity participation match so if the EDA desires to proceed, a motion to obligate these funds will be necessary. In addition to this grant, it is assumed that the City/EDA will continue on with a general clean-up grant which could be significant in cost. Based on this, staff is recommending that $50,000 in Anoka County Levy money be appropriated to a Root property fund. This appropriation would have to be acted on by the Council and actual expenditure blocks would have to be acted on by the EDA, so this is not a blanket request for expenditure authorization up to the $50,000. The second part of this grant is to secure an environmental consultant that will both assist in the grant application and to do the actual work, if the grant is funded. The quotes that were received are as follows: Pro Source- range of $32,790 to $42,620 American Engineering Testing-$24,225 Bay West-$31,623.50 Since these bids were received late Thursday a recommendation is being made at this meeting by staff so that the Community Development Department could confer with the City Engineer. The bids were reviewed individually and collectively, and both parties agreed to recommend Bay West as the Contractor to enter into an agreement with. If the grant is successful staff will work with the County and DEED to move to the next step in the process which will be grants for actual clean-up. Staff recommends that the EDA apply for an investigation grant, appropriate $50,000 for a Root property clean-up fund through the Anoka County Levy funds (and authorizing an actual expenditure of $10,000 for the investigation phase) and enter into an agreement with Anoka County allowing the grant to commence, and entering into a service agreement with an environmental firm for the initial work. Staff is recommending the City choose Bay West even though they are not the low bidder. Clark told members the Bay West proposal included more tests than the other companies that will most likely be required at a later date. They will be doing double the number of probes, deeper probes, they will do a ground water analysis, concrete sampling, and test the site for buried matter. This company is familiar with the site as they did the ash cleanup and mercury testing already. Clark said they had the most complete bid which may help get the grant application approved. EDA Commission Minutes Page 8 September 6, 2011 Clark also relayed Diehm’s position on this matter to the Board since she could not be in attendance tonight. Diehm feels the City needs to be the driving force in the effort to clean this site since no one else will do so. The property is no good to anyone in the state it is in and could possibly sit there for years as is. It will not be attractive to any developer due to unknown contamination and the costs involved to make that determination as well as to clean the site. Questions from Members: Szurek asked if the authorization of the $10,000 was just to get a report on the amount and type of contamination. Clark told her yes, and the grant would also pay for some of the analysis and possibly lead to the clean-up of the site. Herringer asked if we go through this whole process, who would own the property? Clark stated that once the site is clean the City and County would have to talk about obtaining ownership of the site. All this depends on whether we can get the grants approved to proceed with this effort. Currently the State owns the property. It is unknown at this time how much additional expense it would be to get title to the property. Nawrocki asked what the difference was between Bay West and ProSource. Clark stated that ProSource was about $10,000 higher and did not include testing of the concrete, ground water, or deep probes. Nawrocki asked about the forfeiture process and questioned why the State has title to the property. Clark explained that the State owns in as a Trustee and that the County manages and makes decisions on the site while in tax forfeiture status. Nawrocki suggested making the State clean it up since they own it. Clark said they don’t normally do that and since they are not trying to develop the site, they have no interest in expending any funds on it. And the County will maintain it and mow grass, but they will not expend funds to clean it up either. Fehst said if the City takes the lead, they will support our efforts, but neither the State, nor County will actually participate in the process. Clark said the City needs to authorize the expenditure of $10,000 to get information on the extent of the contamination so informed decisions can be made. We are using the bid figures to apply to the State for clean-up grants, and the $10,000 is to cover the City’s portion. The grant will cover up to 75% of the cost. Clark explained the recommended motion called for $50,000 to be appropriated from the Anoka County Levy Funds in case we decide to move forward with the clean-up, but only $10,000 of that amount is being authorized for expenditure at this time. This is just to obligate the Levy funds to cover any additional expenses. Nawrocki felt that only the $10,000 amount should be approved. Some of the other members agreed so there was a discussion regarding the motion. EDA Commission Minutes Page 9 September 6, 2011 Motion by Nawrocki, seconded by Williams, to direct staff to initiate and complete the following: Take all actions necessary to create a $10,000 appropriation fund designated for the Root Property at 3930 University-funds to be secured through the City’s Anoka County HRA Levy program. Authorize the staff, based on review by the City and/or EDA Attorney, to enter into an Agreement with Anoka County that will allow the City to apply for an investigation grant, through DEED, by November 1, 2011. Authorize up to $10,000 of actual dollar expenditure as part of the 25% equity contribution required for the grant. Accept a bid for environmental work from Bay West based on successful funding of the grant for an amount up to $31,623.50. All ayes. MOTION PASSED. A Resolution will go to the City Council. The meeting was then adjourned to an executive session to discuss the possible purchase of 4641-4647 Tyler Street NE. The meeting and Executive Session were adjourned at 8:05 pm. Respectfully submitted, Shelley Hanson Secretary