Bloomington City Council — Transcript
Tuesday, November 12, 2024
Story
Bloomington HRA approves $10M budget with levy increase
Subordination of HRA Loans for Affordable Housing Preservation
Discussion on Missing Middle Housing Initiatives
Votes (3)
Approval of Final Special Benefit Levy Pursuant to Minnesota Statute Section 469.033 Subdivision Six for 2025 HRA Budget
Dissent: None
Moved by Unknown [18:22] · Seconded by Bellinger [18:46]
The staff report detailed the HRA's mission, funding sources (levy, federal grants like HCV and CDBG), and budget allocation across operations, housing stability, homeownership pathways, housing creation, and preservation. A significant portion (70%) of the budget comes from federal funding. The proposed 2025 levy increase of $300,000 aims to cover costs for HUD INSPIRE program changes, the Bloomington Affordable Homeownership Program, loan tracking software, increased legal assistance, and the maintenance of four new staff positions. Commissioner Carter inquired about the funding sources for the new positions and potential impacts of election results on HUD funding, receiving assurances that major funding cuts were not historically observed but administrative changes are monitored.
Approval of Final Budget for 2025 for the Housing and Redevelopment Authority in and for the City of Bloomington
Dissent: None
Moved by Wooten [19:05] · Seconded by Doubling [19:12]
Following the approval of the special benefit levy, the Board proceeded to a separate vote for the overall 2025 budget for the HRA. No further discussion was noted, indicating a consensus built during the previous staff report and Q&A.
Motion Approving Resolution 2024 Approving Subordination and Authorizing Related Actions to Subordinate HRA Loans with Aon for Cedar Gate, Cedar Glen and Metropolitan Towers
Dissent: None
Moved by Moody's [25:02] · Seconded by C [25:02]
Aon, a non-profit affordable housing developer, requested HRA approval to subordinate existing $12,500 loans on three properties to facilitate refinancing their primary mortgages. These HRA loans, dating from 2017, came with restrictive covenants ensuring affordability until 2047. Staff clarified that resubmitting the subordination agreement would maintain these covenants, preventing the properties from potentially reverting to market rate should Aon repay the HRA loan and sell to a market-rate entity. Commissioners sought assurance that the action would indeed preserve affordability and not just enable refinancing without long-term benefit.
Notable Quotes (7)
So I'd like to highlight the mission which is to create a stable, inclusive community through safe and dignified housing choices.
You can see from this breakdown that about 70% of the HRA budget is actually through allocated Federal funding.
And would likely be anticipating asking for a higher levy increase in future years and that's the fund various things capital planning for one thing the management the HRA owned properties also staffing to support strategic work and implement our programing and then also we want to build a reserve or have funding available support some of these larger strategic projects and investments to support across the city.
So big one there is the Bloomington Affordable Homeownership Program which is you all know, a very significant grant from Minnesota Housing and is a big focus of HRA work over the next few years.
So we are keeping an eye I mean and any changes are administration these Federal programs. So we are of course keeping an eye on announcements as always just to be aware of any of any upcoming changes and that's helpful to note that the last time there weren't significant reductions in the dollar amount so it's more of the administrative changes.
If we choose to resubmit it will ensure that those restrictive covenants that I mentioned will not be terminated. And having those covenants in place give us security that the affordability terms that we negotiated will persist until after the end of our long term which would be 2047 or if the if and chooses to voluntarily the mortgage then that covenant would terminate.
But you said IAN is mission based to preserve affordable housing. I don't foresee that necessarily resulting in the affordability being lost but what it could result in is if they were to make a sale of those properties to like a market market rate rent or property manager then we wouldn't have that security in place.
Ordinances & Resolutions (4)
Legal basis for the final special benefit levy.
Resolution approving the subordination of HRA loans for Aon properties.
City's long-range plan, potentially to incorporate medium-density housing areas.
Building code that applies to housing developments with more than two units, increasing construction costs.