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HRA Meeting Minutes Page 2 <br /> August 26,2013 <br /> doors, deteriorating steps lack of railings and poor or no lighting. He explained that based on • <br /> past projects,if a home shows exterior issues, there are likely interior issues as well, such as need <br /> to remove heating oil furnaces,upgrades to 200 amp service,or replaced plumbing. <br /> 2) Impact of Funding <br /> Mr. Krebsbach stated that while there is no actual requirement,DEED is looking to fund <br /> projects that have the most impact. The HRA's goal should be to find neighborhood that needs <br /> most work and having the greatest percentage of homes in need of rehab. <br /> 3) Cost effectiveness <br /> Mr. Krebsbach explained that DEED sets Small Cities Development Program Grant Structure at <br /> a maximum at$25,000 per project. CMHP uses a$20,000 max. Mr.Krebsbach stated that <br /> CMHP statistics reflect an average project cost of$18,000- $19,000. He stated that interest rates <br /> and terms are negotiable. He noted that CMPH has always used zero percent interest,deferred <br /> with 7 year term. 1/7 of the loan gets forgiven each year,and if the owner still lives in the home <br /> at end of 7 years,the loan is forgiven. He explained that the HRA could do a split,such as <br /> portion of the loan zero percent forgivable,and a portion of the loan at percent with a monthly <br /> payment. He noted that income limits would be much higher in Elk River,since Sherburne <br /> County is included as a metro county. Discussion followed regarding possible options for <br /> payback if a homeowner moved out before the end of the established term. <br /> Mr.Krebsbach explained that the Coon Rapids program is different,in that remodeling could be <br /> as simple as a kitchen or bathroom and that this type of remodeling would not be eligible with <br /> the Small Cities program. He suggested that the HRA could have an additional program for <br /> these types of improvements. <br /> Commissioner Kuester asked what the cap size is to be defined as a small city. Mr. Kresbach • <br /> stated the maximum population is 50,000. <br /> Commissioner Chuba asked what happens if homes identified are functionally obsolete. Mr. <br /> Krebsbach stated that the policies and procedures book addresses homes that are financially <br /> dilapidated. He explained that when application comes in,an inspection is done to determine <br /> whether or not it is a financially viable project. Commissioner Chuba asked what options are <br /> there have if a structure is so bad it does not qualify. Mr.Krebsbach stated that some different <br /> type of funding mechanism would be required if a home needs to be demolished. <br /> Mr.Beeman asked how much Mr. Krebsbach would recommend budgeting for leverage funding. <br /> Mr. Krebsbach recommended the HRA set aside$50,000 in leverage funds. The HRA discussed <br /> this amount,as well as the option of budgeting funds for other types of projects. <br /> 3. Discuss 2014 HRA Budget Goals&Preliminary Budget <br /> Brian Beeman reviewed the 2014 HRA budget details. <br /> The following changes were made to the budget: <br /> • Eliminate Historic Context Study- $20,000 <br /> • Eliminate Market Study- $20,000 <br /> • Reduce grant leverage funds for SCDP from$200,000 to$50,000 <br /> • Eliminate funding for public art- $10,000 • <br /> • Remaining funds at end of year to be used for future housing and redevelopment projects <br />