EDA 01/28/02 CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
January 28, 2002
President W. Peter Enck
Commissioner Sharon Cassen
Commissioner Don Collier
Commissioner Mary Gwin-Lenth
Commissioner Pat LaVine Norby
2.
3.
4.
Call to Order
Roll Call
Approval of Regular Meeting Minutes of November 26, 2001
Resolution Approving Amendment to Section 8 Housing Assistance Payments Program
Contract No. C-99-66 for Administrative Services Between the Metropolitan Council and
the City of New Hope and Authorizing President and Executive Director to Execute
Agreement
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes
Regular Meeting
November 26, 2001
City Hall
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
IMP. PROJECT 707
Item 4
New Hope EDA
Page 1
President Enck called the meeting of the Economic Development Authority to order
at 7:53 p.m.
Present:
W. Peter Enck, President
Sharon Cassen, Commissioner
Don Collier, Commissioner
Mary Gwin-Lenth, Commissioner
Absent: Pat LaVine Norby, Commissioner
Motion was made by Commissioner Cassen, seconded by Commissioner Gwin-
Lenth, to approve the Regular Meeting Minutes of August 27, 2001. All present
voted in favor. Motion carried.
President Enck introduced for discussion Item 4, Discussion Regarding
Redevelopment/Rehabilitation Project at 7610 Bass Lake Road (Improvement
Project No. 707).
Mr. Kirk McDonald, Director of Community Development, provided background of
the proposal for the redevelopment/rehabilitation of the 11-unit apartment complex
at 7610 Bass Lake Road in conjunction with Project for Pride in Living (PPL), the
Northwest Community Revitalization Corporation (NCRC) and several other
funding agencies. The project was last discussed at the September 17 Council work
session. At the work session, the majority of the Council voted to approve the
rehabilitation project contingent on decreasing the City's contribution to $218,000
with the addition of a fourth MHOP unit and obtaining Livable Community Task
Force input on the project. Also, the Council elected to contribute $5,000 for
playground equipment on the site. PPL ensured the Council that an additional
$5,000 could be raised to match the City's contribution for playground equipment.
$78,000 of the City's contribution would be from CDBG funds, the remaining
$145,000 would be a no interest loan to the project with EDA funds with payment
deferred for 30 years. At the end of the 30 years, the City could collect payment on
the $145,000 or opt to continue to defer payment as long as the property continued
as affordable housing, thus insuring affordability in perpetuity. He noted this was
the mechanism used on the Bass Lake Court Townhome project.
Mr. McDonald explained that on October 2, the rehabilitation proposal was
presented to the Livable Comrnunities Task Force. The overwhelming input and
direction from the Task Force was to proceed with the project.
Now that the amounts and sources of city financing have been determined and input
has been received from the Livable Communities Task Force, staff requests to
discuss other remaining issues and the next project steps with the EDA.
Potential Eminent Domain: PPL and NCRC have recently informed the
City that one of the owners of 7610 Bass Lake Road is now unwilling to
sell the property. Due to the importance of the project, positive community
input and secured financing panners, staff is requesting that the Council
consider condemnation procedures on the property. George Gamett,
November 26, 2001
Executive Director of the NCRC has submitted a letter regarding this
condemnation request, which states that the City's financial commitment to
the project would not increase due to condemnation. Also, Mr. Garnett's
letter states that relocation costs are currently adequately funded in the
project budget and would not be impacted by condemnation. Also, the City
Attorney has provided correspondence indicating that there is legal basis to
show blight and public purpose for this action.
If the EDA is willing to consider condemnation of this property, staff will
prepare a resolution in support of condemnation and bring the resolution
back to the EDA at a future meeting for consideration.
Development Agreement: If the EDA is supportive of condemnation, staff
will begin to prepare a development agreement and other necessary
agreements for this project.
Mr. Kirk McDonald introduced George Gamett (Northwest Community
Revitalization Corporation) and Chris Wilson (Project for Pride in Living, Inc.).
Mr. Gamett commented that over the past two years they have worked to assemble
financing and obtain comrmtments from the owners. He explained that despite
verbal commitments from the owners, they were unable to complete an acceptable
purchase agreement. He stated multiple owners and a possible financial position
change attributed to the difficulty in coordinating execution of a purchase
agreement.
Mr. Gamen requested the Council's support in the use of the City's powers of
eminent domain to facilitate the project.
President Enck expressed concern about additional costs involved with eminent
domain proceedings.
Mr. Garnett acknowledged the City's limited financial resources. He assured the
EDA that it would not have to bear any condemnation costs, and the development
agreement would define financial responsibilities of all parties.
Mr. Chris Wilson noted the City's commitment to the project would be maintained
through the development agreement.
Commissioner Collier inquired regarding relocation costs.
Mr. Garnett responded that eminent domain will not change the relocation
requirements. He stated relocation costs are tied to financing and are included in the
current project budget. He noted the eminent domain process will provide greater
control for the relocation process.
Mr. Steve Sondralk City Attorney, stated the legal basis for taking the property will
be based on whether there is public purpose for the action. He stated a development
agreement and appraisal are necessary. He reported that a resolution could be
prepared and presented to the EDA at a future meeting to authorize the
condemnation action.
MOTION
Item 4
Motion was made by comrmssioner Cassen, seconded by Commissioner Gwin-
Lenth, directing staff to prepare a resolution authorizing condemnation and
acquisition of appraisal. All present voted in favor. Motion carried.
SECTION 8
CONTRACT
Item 5
President Enck introduced for discussion Item 5, Motion Approving Minor Revision
to Section 8 Administrative Services Contract Between the Metropolitan Council
and City of New Hope.
New Hope EDA
Page 2
November 26, 2001
MOTION
Item 5
ADJOURNMENT
Mr. Kirk McDonald, Director of Community Development, explained that when the
number of client contracts was at a lower level in the mid-1990s, the New Hope
Section 8 Representative took on the additional workload of administering contracts
for other neighboring cities to bring in additional revenue for the New Hope
program. Client contracts are now at a very high level and staff is requesting a
minor revision in the Administrative Services Contract for New Hope to stop
performing administrative services for the 41 contracts in Edina and shift the
workload back to Metro HRA staff. This revision will help to alleviate the workload
of the Section 8 Representative and shift a small portion of the revenue back to
Metro HRA, but will still provide adequate financial resources to support the New
Hope Section 8 Program. Metro HRA requires a 90-day notification requirement for
contract changes and a formal contract amendment would be prepared for EDA
consideration in the future if this motion is approved. He stated the change would be
effective March 1, 2002.
The EDA commended Marlene Isaacson, Housing Representative, for her
outstanding performance.
Motion was made by Commissioner Collier, seconded by Commissioner Gwin-
Lenth, to approve the revision in the contract. All present voted in favor. Motion
carried.
Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner
Collier, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 8:21 p.m.
ectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 3
November 26, 2001
EDA
REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development ~ "~ 1-28-02 EDA
Item No.
By: Kirk McDonald B 4
/
RESOLUTION APPROVING AMENDM~ENT TO SECTION 8 HOUSING ASSISTANCE PAYMENTS
PROGRAM CONTRACT NO. C-99-66 FOR ADMINISTRATIVE SERVICES BETWEEN THE
METROPOLITAN COUNCIL AND THE CITY OF NEW HOPE AND AUTHORIZING PRESIDENT AND
EXECUTIVE DIRECTOR TO EXECUTE AGREEMENT
REQUESTED ACTION
Staff recommends that the EDA approve the enclosed Resolution Approving Amendment to Section 8 Housing
Assistance Payments Program Contract No. C-99-66 for Administrative Services Between the Metropolitan
Council and the City of New Hope and Authorizing President and Executive Director to Execute Agreement. At
the November 26, 2001, EDA meeting, staff discussed minor changes to the contract to reduce the number of
out-of-city client contracts that were administered and the EDA approved a motion authorizing staff to give the
Metropolitan Council a 90-day notice. This contract amendment formalizes the change to the contract
~reviously approved by the EDA.
POLICY/PAST PRACTICE
In the past, the EDA has approved modifications to the Metro HRA Section 8 Administrative Services Contract
depending on the workload and number of client cases being serviced.
BACKGROUND
At the November 26, 2001, EDA meeting, staff requested that the EDA approve a motion approving a minor
revision to the Section 8 Administrative Services Contract between the Metropolitan Council and the City of
New Hope. Staff indicated that when the number of client contracts was at a lower level in the mid 1990s, the
New Hope Section 8 Representative took on the additional workload of administering contracts for other
neighboring cities to bring in additional revenue for the New Hope program. Client contracts are now at a very
high level and staff is requesting a minor revision in the Administrative Services Contract for New Hope to stop
~erforming administrative services for the 41 contracts in Edina and shift the workload back to Metro HRA
staff. Staff indicated this revision will help to alleviate the workload of the Section 8 Representative and shift a
MOTION ~
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hrfa\
Request for Action Page 2 1-28-02
small portion of the revenue back to Metro HRA, but will still provide adequate financial resources to
support the New Hope Section 8 Program. In November, staff indicated that Metro HRA requires a 90-day
notification requirement for contract changes and that a formal contract amendment would be prepared for
EDA consideration in the future if the motion were approved. The EDA did approve the reduction, staff gave
Metro HRA the required 90-day notice, and Metro HRA has sent the attached contract amendment to the
City for execution to formalize this change. In the past, amendments or revisions to the Section 8
Administrative Services Contract with the Metropolitan Council have been formally considered and
approved by the EDA.
The City of New Hope has contracted with the Metropolitan Council for the past 20+ years to administer the
Section 8 Housing Assistance Payments Program on a local level. The City employs a full-time Section 8
Housing Representative to administer the program and reimbursements from the Met Council/HUD cover
all costs of the program and position. The contract is revised periodically when the reimbursement rate
changes or when services and/or clients are added or deleted. In the past, New Hope has generally
administered between 250-300 client contracts and the Metro HRA feels that this is the general range
for the maximum number of clients per Section 8 Representative.
1996 Contract Amendment
In 1994 and 1995, the number of Section 8 contracts administered for New Hope residents had
decreased to approximately 240 contracts, due in part to newly adopted portability requirements. The
City receives less revenue to cover the costs of the program/position with a reduced number of contracts
and it has always been the position of the City that the program would be self-supportive or that the cost to
administer the program would be covered by revenues received from Metro HRA.
In 1994, when contract discussions were taking place, city staff indicated to Metro HRA representatives that
the City would have an interest in taking on additional contracts from neighboring cities to increase program
revenue. It was determined that additional outside contracts from neighboring cities would involve only
administrative services, with Section 8 clients coming to the New Hope City Hall for income verifications,
etc. The City would provide no inspection services for clients residing outside of New Hope, as that was
determined to be Metro HRA's responsibility. The Metro HRA indicated that it would take the City's interest
in assuming the administrative work for additional contracts into consideration.
In December 1995, due to several staff position vacancies at the Metro HRA in St. Paul, Metro HRA
contacted the City to see if the City was still interested in assuming administrative responsibility for
additional contracts. City staff responded in the affirmative and at the January 22, 1996, New Hope EDA
meeting, the EDA approved an amendment to the Metro HRA contract stating that the City of New
Hope would administer the Section 8 contracts from the following cities:
City Number of Contracts
Edina 20 contracts
Golden Valley 16 contracts
Maple Grove 1_.~5 contracts
TOTAL 51 contracts
The additional revenue to the New Hope program with these additional contracts was approximately
$12,000 per year and helped to ensure that the program was self-supporting.
1997 Contract Amendment
In the spring of 1997, the City of Osseo lost the individual that administered the 23 Section 8 contracts for
that city. Metro HRA contacted New Hope to inquire if the City was interested assuming additional contracts
under the same terms and conditions as the 1996 contract amendment. The City responded that it could
Request for Action
Page 3 1-28-02
take on the additional contracts at that time and on May 27, 1997, the EDA approved an amendment to
the contract adding the services for the additional clients.
Current Status of Contracts -2001
Due to a recent marketing campaign by Metro HRA on the Section 8 Program, the program is now at 100%
utilization. The New Hope Section 8 Representative is now administering approximately 420 contracts, as
follows:
City Number of Contracts
Golden Valley 21 contracts
Edina 41 contracts
Maple Grove 67 contracts
Osseo 21 contracts
Subtotal 150 contracts
New Hope 270 contracts
TOTAL 420 contracts
The Metro HRA is in the process of re-assigning caseloads among its staff and is aware of the heavy
workload in New Hope. There have been preliminary discussions at the staff level between the City
and Metro HRA regarding shifting the 41 Edina contracts back to Metro HRA and Metro HRA is
agreeable to taking back the contracts. In staff's opinion, it would make the most sense to eliminate
the contracts from the City that is most geographically distant from New Hope. The return of the
Edina contracts to Metro HRA will decrease revenues for the program, however, revenues will still exceed
expenses. The current New Hope 2002 HRA budget lists expenses in the amount of $102,609 and
revenues of $123,845. With the shift of 41 contracts back to Metro HRA, revenues will decrease by
approximately $11,000, but will still exceed $112,500.
Due to the increased utilization of the Section 8 Program on a metro-wide basis and the impact on the
workload of the New Hope Section 8 Representative, staff requests that the EDA give favorable
consideration to this request and approve a reduction in the administration of outside contracts. Pursuant to
the motion passed by the EDA in November, staff did give the Metro HRA a 90-day notice on the 41 Edina
contracts, and staff recommends approval of the resolution.
FUNDING
The impact of this contract revision is explained above and would be minimal, as revenues would still
exceed expenses in 2002 and future years.
ATTACHMENTS
· Resolution
· Amendment to Contract No. C-99-66
· Correspondence from Metro HRA
CITY OF NEW HOPE
EDA RESOLUTION NO. 2002-
RESOLUTION APPROVING AMENDMENT TO SECTION 8 HOUSING ASSISTANCE
PAYMENTS PROGRAM CONTRACT NO. C-99-66 FOR ADMINISTRATIVE SERVICES
BETWEEN THE METROPOLITAN COUNCIL AND THE CITY OF NEW HOPE
AND AUTHORIZING PRESIDENT AND EXECUTIVE DIRECTOR TO
EXECUTE AGREEMENT
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
Minnesota Statutes Section 473.195, subdivision I (1994 and Supp. 1995)
authorizes the Metropolitan Council to plan and administer a federal Section 8
housing assistance payments program within the seven-county metropolitan
area and to exercise the functions, rights, duties, privileges, immunities and
limitations as are provided for municipal housing and redevelopment authorizes:
and
the Metropolitan Council and the City of New Hope entered into Contract No. C-
94-56 on September 1, 1994, under which the City agreed to perform specified
Section 8 program administrative services within certain jurisdictions located in
the metropolitan area; and
subsequent to the approval of the initial contract, the City agreed to provide
Section 8 program administrative services for the cities of Golden Valley, Edina,
Maple Grove and Osseo through contract amendments and those amendments
were incorporated into Contract No. C-99-66, which was approved by the EDA
on January 10, 2000; and
the City of New Hope now desires to amend the contract and delete the services
for the City of Edina and that change has been incorporated into the attached
Amendment to Contract No. C-99-66.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of
New Hope, Hennepin County, Minnesota, that the Amendment to the Section 8
Housing Assistance Payments Program Contract No. C-99-66 for Administrative
Services between the Metropolitan Council and the City of New Hope EDA is
hereby approved and the President and Executive Director are authorized to
execute said Amendment.
Adopted by the Economic Development Authority of the City of New Hope this 28th day of
January, 2002.
President
Executive Director
Contract No. C-99-66
AMENDMENT TO
SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM
CONTRACT FOR ADMINISTRATIVE SERVICES
THIS AGREEMENT is made and entered into by and between the Metropolitan Council
("Council") and the City of New Hope ("Contractor").
WHEREAS, on January 24, 2000 the Council and the Contractor entered into a contract
identified as Council Contract No. C-99-66 under which the Contractor agreed to perform within
the City of New Hope and other metropolitan-area jurisdictions certain Section 8 program
administrative services in conjunction with the operation of the Council's Section 8 homing
assistance program; and
WHEREAS, by letter dated November 27, 2001 the Contractor informed the Council that the
Contractor wishes to decrease the number of jurisdictions within which the Contractor will
perform Section 8 administrative program services under Contract No. C-99-66; and
WHEREAS, pursuant to Paragraph 6.03 of Contract No. C-99-66 the Council and the
Contractor mutually agree to amend Contract No. C-99-66 to redefine the jurisdictions within
which the Contractor will perform Section 8 administrative program services.
NOW THEREFORE, in consideration of the mutual promises and covenants contained in this
agreement, the Council and the Contractor agree as follows:
Exhibit A, is amended by deleting the City of Edina firom the list of jurisdictions within
which the Contractor will perform Section 8 administrative program services. Effective
March 1, 2002, the Contractor will perform Section 8 administrative program services only
within the cities of New Hope, Golden Valley, Maple Grove and Osseo. Effective March 1,
2002, Exhibit A of Contract No. C-99-66 is replaced in its entirety by Amended Exhibit A,
which is attached to this agreement and made a part of Contract No. C-99-66.
Except for this amendment, the provisions of Contract No. C-99-66 shall remain in force and
effect without change.
IN WITNESS WHEREOF, the Council and the Contractor have caused this agreement to be
executed by their duly authorized representatives. This amendment is effective on the date of
final execution by the Council.
Approved as to form:
METROPOLITAN COUNCIL
Associate General Counsel
By:
Regional Administrator
Date:
Page 1 of 3 Pages
CITY OF NEW HOPE
By:
Its:
Date:
By:
Its:
Date:
C99C~A
Page 2 of 3 Pages
AMENDED EXHIBIT A
CITY OF NEW HOPE
The Contractor shall perform the Section 8 program contract services within the City of New Hope,
Minnesota and within the following jurisdictions located in Hennepin County, Minnesota:
Golden Valley
Maple Grove
Osseo
The Council will perform Section 8 inspection and reinspection services for dwelling units located
within the cities of Golden Valley, Maple Grove and Osseo.
Page 3 of 3 Pages
Metropolitan Council
Building commu, nities ihat work
Metro HRA
Housing and Redevelopment Authority
January 14,2002
Kirk McDonald
Director of Community Development
City of New Hope
4401 Xylon Av. N.
New Hope, MN 55428
Re: Amendment to Section. 8 Housing Assistance Payments Program
, Contract for Adminisbative Services No. C-99-66
Dear Mr. McDonald:
Metro HRA has received your letter dated November 27, 2001, in which you
provide us with the required 90-day notice that you wish to discontinue providing
Section 8 administrative services for the City of Edina. Metro HRA is prepared to
resume administration for this city effective March 1, 2002. I have been working
personally with Marlene Isaacson to facilitate the details of this change in
administration. Enclosed are two copies of an Amendment to the Section 8
Housing Assistance Payments Program Contract for Administrative Services No.
C-99-66 reflecting this change in administration.
Please sign both copies of this Amendment and return them in the enclosed
postage-paid, self-addressed envelope.
Sincerely,
Kathy Kline
Program Operations Supervisor
Metro HRA
Enclosures
Cc:
Marlene Isaacson, Metro HRA community representative
Mary Ahern, Metro HRA Manager
vcw'w, met rocou ncil.org
.Metro [nfo Line 602-1888
230 Eas! Fifth Street * S~ Paul. Minnesota 55101-1626 * (651) 602-1428 * Fax 602-1313 * TrY 291-Cr:~O4
Ar~ Equal Or)por~l~nir//Errlploo~-