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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 ~ BY ";~~4,~BY SECOND ~/},~ TO: ~ ~'/~/01' /P._ZO 0.2-01. 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~-