[0:00] e [0:45] [Music] [2:10] good evening I'd like to call the Tuesday November 26 2024 Housing and Redevelopment Authority meeting to order [2:17] the first item on the agenda is the approval of the agenda is there any additions or corrections to this evening's [2:22] agenda hearing none we'd be looking for a motion to approve the Tuesday November 26 2024 agenda so moved yeah motion by [2:30] commissioner mua second and a second by commissioner Carter to approve this evening's agenda [2:36] is there any discussion hearing none all in favor please signify by saying I I [2:42] opposed motion passes 4 to zero moving on to item 3.1 it's the approval of the [2:48] November 12th 2024 H board meeting minutes is there any questions additions [2:54] corrections to the November 12th minutes hearing and seeing none we'd be [3:00] looking for a motion to approve the November 12th 2024 H board meeting minutes so move second we have a motion [3:07] by commissioner um Mueller and a second by commissioner mua to approve the November 12th 2024 H board meeting [3:14] minutes any discussion hearing none all those in favor please signify by saying I I [3:20] opposed motion passes for zero we're skipping down to new business item [3:26] 5.1 the adoption of utility allowance schedule for Bloomington H rent assistance programs may we have the [3:33] staff report please yes good evening chair and Commissioners uh the item [3:38] before you tonight is related to the housing Choice Voucher Program more specifically um and just a little [3:44] background about utility allowances they're calculated um their calculation is important as we our excuse me oh my [3:52] goodness is an important component of the gross rent calculation used in the housing Choice Voucher Program um and [3:59] the allowance are based on an average consumption of an energy conservative [4:05] household um Bloomington H utilizes the util utility allowance adopted by the [4:11] Metropolitan Council just because we are in the same market area rather than duplicating that work the reason this is [4:18] before you tonight is there is a 10% change from pre the previous year and so [4:23] that is why it requires your approval um before it can be adopted just want to [4:30] call out a couple of the major changes that would impact tenants in our program natural gas has dropped significantly [4:37] across the board and conversely electricity costs are increasing but by [4:42] a smaller margin so overall a total utility allowance we anticipating for [4:47] most households is actually going to go down which means their gross rent calculation would go down which actually [4:53] especially for households that are moving in the next year could mean that more housing options are available to [4:59] them specific specifically I think the greatest impact would be for households that are looking for single family [5:05] rentals because they tend to have the higher utility allowance cost so um this is actually G to potentially have a a [5:13] good impact for some of the households on our program so again the request from staff tonight is to approve the attached [5:19] utility allowance schedule and it would be effective January 1st of [5:25] 2025 thank you are there any questions commissioner thank you um so you said this is tied to [5:32] the met the Met Council numbers did they recently updated them assuming and they do that do they do that every single [5:38] year yes thank you chair commissioner mua um they re-evaluate the numbers on [5:43] an annual basis um and they also are adopting this updated utility allowance [5:49] schedule to be effective for January 1st of 2025 so we are following their same um [5:56] process any other questions seeing no other questions we' be looking [6:02] for a motion to approve the attached utility allowance schedule for use in the housing Choice voucher and other [6:07] rent assistance programs effective January 1st 2025 so moved we have a motion by [6:14] commissioner Mueller second in a second by commissioner um mua to approve the [6:19] attached utility allowance schedule uh is there any discussion hearing none all those in [6:25] favor please signify by saying I I opposed motion passes [6:31] 40 moving on to item 5.2 property maintenance service agreement may we [6:36] have the staff report on that please yes thank you chair um so this item is kind [6:41] of a continuation of a conversation that we have been having with the board regarding um a restructuring of how [6:51] we oh excuse me one second [7:01] um of how we structure our our approach to our property management um of the [7:07] prop the 42 properties we own and operate uh single family rental [7:12] properties within the city um the Final Phase of this restructuring that's taken place over the last year is to execute [7:18] an agreement for with a property maintenance company and the goals with this agreement are to have a provider [7:24] who can provide that first L layer of service to tenants especially for emergency situations they would go into [7:31] the properties assess the situation and complete any necessary immediate repairs [7:37] additionally under this contract would be some non-emergency work orders [7:42] including those submitted by tenants um and preventative maintenance tasks earlier this year staff completed [7:49] an informal bidding process for these services and selected renew homes Inc um renew homes demonstrated capacity to [7:56] provide the necessary 24-hour on call services that were desired their bid also stood out um for their approach to [8:03] the services including building relationships with tenants and serving as a partner alongside staff to assess [8:09] potential risks and future maintenance maintenance needs at properties in a way that we didn't necessarily see from [8:16] other providers that provided quotes um they are also certified in lead safe work practices mold remediation and [8:23] Inspire which all of which are Super relevant for our properties duude of their age and the programs that we run [8:29] through the homes the proposed agreement of $888,000 would cover on call and [8:35] emergency services and some non-emergency work orders on a monthly basis and we see this as the minimum [8:42] most immediate level of Maintenance needs for our properties as we've discussed previously staff is in the [8:48] process of developing both a preventative maintenance and capital Improvement plan for our properties and [8:54] we anticipate this work will better Define additional maintenance needs beyond the emergency on call services [9:00] that would be covered under this agreement and so at this time staff is proposing a six-month agreement with the [9:07] option to extend for an additional six months and this six-month structure [9:12] would give us the opportunity to expand or renegotiate Services once we have those plans in place in [9:19] 2025 um so staff is requesting approval to enter into a Services agreement with renew homes Inc for property maintenance [9:26] services for H owned rental property for six months for not to exceed amount of [9:34] 88,000 are there any questions commissioner mua thank you [9:40] chair um I would like to understand like what the plan is to evaluate the services of the um the the services uh [9:48] company um once we get through the initial six months and then uh if we do choose to extend the the additional 6 [9:55] months um what ultimately means that they were successful um how do we categorize that and then is this an [10:02] ongoing thing if they are effective in what they're doing thank you chair commissioner mua [10:08] so just to reiterate to make sure I understand the question is how are we evaluating success um under this [10:15] agreement and what would be the thresholds we would use to determine if we were going to extend um I think [10:21] there's a couple of factors that we are considering within this I think most [10:27] critically is ability to respond in a timely manner to the 24-hour [10:32] emergencies um I think that is a gap in service that we've had historically that we want to make sure is covered under [10:37] this contract so that would be something that would be a top priority um I think [10:43] another contributing factor honestly would be cost and making sure that the the costs within this contract are um a [10:55] competitive uh price understanding the age of our homes and the the degree of [11:00] need in some of in some of the homes so those are kind of the two costs I think we would consider once we're at six [11:06] months whether or not we would move forward with another six months and then one follow up on the the [11:12] cost piece what is the process to approve Emergency Services is there going to be a dollar amount is there going to be you know someone that they [11:18] have to call from the city to get approval for something um how are we setting that up yeah thank you chair [11:24] commissioner mua the way we've currently structured it is they would be the first [11:29] kind of responders to those emergent uh immediate needs and under the contract [11:35] it's um a flat rate that essentially were're paying to for them to provide that service they would address any [11:41] immediate concern so say in example there was a leak they would turn off the [11:47] water identify where that leak is happening and essentially give us an assessment of what what like what the [11:53] final repair need to be um within the contract we do have some structure of [12:00] they would come back then once that immediate problem at a later date to solve the final repair and we have a [12:06] dollar amount within the contract for providing those Services over $1,000 so [12:12] anything that would cost over $1,000 is then when we would go out and and receive um multiple bids to complete [12:19] that larger scale repairs um outside of the [12:24] contract sorry there's lots of questions this triggering so over $4,000 we would [12:30] have to go out to get bids um is there concern about delivery with service right so like say we're in the middle of [12:36] winter your water heater breaks and it's over $1,000 and we have to go out and bid to get better pricing which is what [12:43] we need to do but that leaves the resident without hot water for extra time is there concern of [12:51] delivery of service if um if that's kind of a limitation that we're going to have thanks chair commissioner mua for the [12:58] question um under our requirements under state law there are some specific [13:03] emergent situations that we have to resolve within 24 hours also under Inspire those are there's circumstances [13:09] that we would need to resolve within 24 hours water heater is a great example of one that we would need to resolve and I [13:15] think for those we would we would use a more expedited process um to to bring [13:22] water hot water back to the service back to the family thank [13:27] you any any other questions hearing no other questions [13:34] we'd be looking for a motion to to approve resolution 20 24-24 authorizing staff to enter into an [13:41] agreement between renew homes Inc and the Housing and Redevelopment Authority [13:46] in and for the city of blomington so moved we have a motion by commissioner mua second second by commissioner [13:53] Mueller to approve resolution 20242 is there any discussion [13:59] hearing and seeing none all those in favor please signify by saying I I opposed motion passes for zero moving on [14:08] to item 5.3 direct income-based assistant program for the heights may we have the staff [14:13] report thank you chair and Commissioners so this is a follow-up item from um both [14:20] the October 22nd h meeting where you initially considered the uh hiia request [14:26] and Associated financing for the heights that then went to the city council on November 18th uh on that meeting the [14:35] city council uh did open a public hearing and received uh had a hearing for uh interested parties and on staff's [14:43] recommendation deferred final decision on the the full financing package to December 2nd um with indication that [14:51] there would be a vote of support and as part of that deferral um the staff also [14:57] intended to bring back the the program structure for the proposed direct income based assistance program to the H for [15:04] final approval and so that's the item that we're discussing tonight but I do want to make it clear that the funding for this program would be considered and [15:11] potentially would be considered at the December 2nd city council meeting so we're considering a program structure [15:17] ahead of funding so I do want to make that clear um but yes for tonight we'll be discussing the proposed program [15:23] structure for the direct income based assistance program uh and so this program is recommended by staff to close [15:30] the gap between what's considered an affordable housing cost relative to the [15:35] amount of income that a household brings in um so the proposed structure um [15:41] follows um a methodology that we'll go through later there is a a a PDF in your packet that I figured we could just talk [15:48] through live and U get to an understanding on that and so the [15:53] inclusion of this program in the overall financing uh the overall Associated financing of the hia request is intended [16:01] to address the housing cost for those most cost burdened households um so those are the households that uh when [16:07] you factor in the hiia fee on top of all of their other other housing costs that [16:12] that those housing housing costs will exceed 30% of their monthly income and so there was an expectation that because [16:20] of the the high financial burden that is likely to result from the hiia uh requested hiia that some households may [16:27] not be able to cover their housing costs in an affordable way with their um with their monthly income so to talk through [16:35] the the proposed structure um we'll go through the methodology later but I did want to talk through uh how this program [16:40] proposed program would be administered so as you're aware the H administers it's um homeowner uh the home [16:48] improvement loan program homeowner improvement loan program so that's the cdbg and also HRA uh budget funded [16:55] program for homeowners to get impr uh rehab improvements on their home home and so the proposal for the direct [17:01] income based assistance program is that it would be administered uh within that same framework in terms of application [17:07] intake and eligibility consideration and so what that framework is uh it's [17:12] actually the framework established by Hud uh it and it's also used for the Section 8 program and so there's a [17:19] standard uh there's a standard list of income documents asset documents uh that [17:25] are requested um for the applicant to provide and then there's a standardized calculation that's done with those [17:31] documents to determine what a household's income is so we have existing staff capacity to to intake [17:38] those applications uh and then determine eligibility of those households um so [17:43] that's one thing I wanted to call out the proposed um structure for how this funding would reach would um reach the [17:52] applicant the unit owner is that it would reduce um the uh h hiia assessment [18:00] fee that that owner is responsible for U before it goes to assessment so that's [18:05] why there's a bit of a truncated timeline on this we want to understand what the need is and how that funding [18:11] gets allocated before this goes to assessment because once it goes to assessment that will include uh the [18:16] interest which is expensive of course so uh once we determine eligibility that [18:22] funding gets allocated to a household uh they're we are then able to lower what their prepayment fee is and the [18:29] remaining balance is what is assessed and the interest would only be on that remaining balance so through that we're [18:35] able to lower the payments that that that unit owner is responsible for the [18:40] securitization of that um assistance comes through a um a forgivable loan so [18:48] similarly um to our some of our other Assistance programs we record basically [18:54] it's a secondary mortgage on the unit on the home and that has a a term in this case that [19:01] coincides with the financing for the ha so 20 years and at the end of that 20e period that um that funding Is Forgiven [19:09] it's it's not required that it's repaid if the homeowner decides to sell their [19:15] unit or transfer their unit before that 20-year period they would be expected to repay that assistance back to the city [19:21] back to the HRA and that would um come out of the most likely come out of the [19:27] proceeds of their home sale they would have that option to pay out of the proceeds of their home sale um they [19:32] could also choose to um repay the as part of the wider hiia assistance [19:38] package we've um allowed for early payoff during that 20-year term and so [19:44] early payoff would also um include repayment of the assistance [19:50] so U there the early repayment conditions are outlined in the proposed structure uh the last thing I'll [19:57] highlight before we go to the methodology is that this assistance can go to unit owners who are owner [20:03] occupants and also to unit owners who are renting uh renting their units out but if um the applicant is renting the [20:10] unit out they'll have to agree to um putting in place a restriction that their unit is rented to uh hous rented [20:17] at an affordable rent for households at um 60 that are earning 60% Ami or less [20:23] and that would be for that full uh term of the assistance so that full 20 years um and then same if if they are an owner [20:30] occupant they'll have to Doc we have to document that they're earning 60% Ami or [20:35] less so I think with that if you could pull up the methodology please we can go [20:40] through that and then we can um take on some um discussion so I tried to outline [20:47] what the kind of the flow of consideration is for how we get to a final allocation of funding thank you um [20:54] so it's kind of a flowchart um hopefully that that made sense but we can just go through Slide by slide so uh as I [21:02] mentioned uh eligible households whether that's for uh ownership or for units [21:08] that are eventually being rented that's at that 60% Ami level and so I've put in [21:14] um these are all just estimated numbers random numbers but they're all eligible from a income standpoint so those are [21:20] the potential monthly some potential monthly incomes they actually vary from as low as that 30% Ami level up to the [21:26] 60% just to show a as we'll get to later [21:32] um severity of need so that's where we're getting monthly income the [21:37] calculation for uh housing cost is inclusive of principal and interest on a [21:43] homeowner's mortgage it's inclusive of their tax payments their property taxes [21:48] it's inclusive of insurance for their property and then it's also inclusive of their HOA dues and the proposed hiia fee [21:56] so that's what's rolled up into monthly housing cost and then to get our affordable housing cost it's simply 30% [22:03] of their monthly income so with those numbers we can establish what the housing cost Gap is for each household [22:09] and I just included a household that you for a demonstration wouldn't be eligible so household for um even though they [22:17] would be paying that expensive hiia fee they are actually earning enough income for that to be considered affordable so [22:23] they wouldn't be eligible for this program but the other three households are were they have demonstrated that [22:29] they're eligible and we have established a housing cost Gap so next we'll take [22:35] those housing costs gaps and um we're applying a ratio uh showing for for [22:42] their Gap to their income what is the ratio there and the reason that we're doing that is to establish what the [22:49] severity of their need is uh in the program structure we emphasized that [22:55] this is a direct and needs-based assistance program and so priority will be given to households that have the [23:00] highest demonstrated need so that's why we've included this ratio as part of the calculation so once we have a ratio [23:07] established um I'm just tallying up the ratio to establish the percent of total [23:14] need so that percent of total need is just the each households ratio out of the total [23:19] ratio so once I have that percentage of total need uh I simply applied that to [23:26] for example for this demonstration I just used 125,000 so applying that percentage to [23:32] that total amount to get a direct assistance amount and you can see uh even though I guess I'll go back a [23:38] couple slides the the housing cost gap for household 2 um isn't uh isn't [23:44] extremely isn't much higher than household 3 but you'll see their assistance amount is much higher and the [23:50] reason for that is that relative to their income their housing cost Gap is much higher the the ratio of Gap to [23:57] income is much higher than household three so that's just to demonstrate that we're establishing priority for that [24:02] household which has the highest severity of need and then in terms of the max allowed assistance there are two caps [24:09] one would be that that Gap is covered for the entirety of the 20 years um if [24:15] that if we're able to have enough funding that would be one G uh cap the other cap would be what their total [24:21] prepayment fee is and that total prepayment fee is what's established in the fee resolution that the city council [24:27] will consider UND December 2nd and basically it's their portion of the project cost so that's I included the [24:34] household to just to show that in their case they were capped by the cost of the project and so that's where their um [24:42] their assistance ended so that's the methodology happy to talk through it and then uh discuss any components of the [24:49] program as proposed thank you are there any questions [24:59] commissioner Carter uh thank you so I'm just trying to wrap my head around how it all works and so um so like on this [25:05] slide for the eligible households household one it says direct assistance is 20,000 um around [25:12] $20,000 so did so does that like we're [25:18] not like how do they get re like how do they get the money from the city to then [25:24] pay for their portion of the assessment do that make sense chair and Commissioners thank you for that [25:30] question yes that absolutely makes sense so the way that the money benefits the [25:35] owner is that we reduce what they'll uh be required to pay from that prepayment [25:41] fee and that's that fee that's established in the resolution that the city council will consider in the second [25:47] and it's their the their portion of the project cost uh the reason that that's a benefit besides it being paid on their [25:53] behalf is it doesn't end up going to assessment so they're saving on interest um and the so that with this structure [26:01] that we've proposed of paying it paying down the assessment uh the assessment fee or excuse me the prepayment fee the [26:08] money never uh appears in the hands of the owner it doesn't uh it doesn't exit [26:14] the city essentially but it is repaying um the the in fund loan for the h that [26:20] that's essentially the structure got it um and [26:26] then is it this is one time time right so we would not be requiring them to [26:33] provide um proof of eligibility in an ongoing way um even though it's the over [26:38] the course of 20 years like it's kind of a one-time thing and then if their [26:43] income goes up significantly next year I mean that's that is what it is right um okay [26:50] so I just wanted to make sure I was understanding um how that how it kind of worked chairing commission if I may the [26:58] that I agreee with what you just said and that does mirror how it's handled for our other um assistance programs the [27:05] rehab program there it's that onetime assistance there aren't uh checks going on into the future uh it would be for [27:12] the for if there are unit owners that are renting their units and and apply and receive this funding those units [27:18] would be rolled into our compliance program so there would be that annual uh touch point to see that the rents are [27:24] being set at that affordable level and that the households that are being rented to are were within the um income [27:31] threshold okay great I understand then I'm pretty sure I understand um are [27:39] there other so we're we are approving tonight the kind of the framework is [27:45] that what you called it the framework okay um are there other ways to do this [27:50] that staff considered um but you decided that this approach was the best approach [27:57] chair and commissioner is there were some other considerations of how the funding would be directed to the [28:04] homeowner so just to talk through some of those it would be uh potentially just a lump sum assistance going directly to [28:10] the owner then they would be responsible for deploying that funding our expectation is they'd be using for housing costs but the concern was [28:16] there's no oversight in that scenario so that was why this proposal was put forward the other proposal would be um I [28:23] think you kind of alluded to it would be checking uh like multiple payments over the the lifetime of the assistance so [28:30] there was different terms thought about um potentially providing assistance annually for a certain period that [28:37] creates a a lot of administrative burden so this is um the other benefit of this [28:43] method is because the financial intervention is before the assessment it creates that interest savings and in [28:50] that second scenario that I just outlined because that payment occurs after the assessment there's no savings there so there was some discussion of [28:57] other structures and staff felt that this was the optimal structure okay thank you that's super helpful um and I [29:04] I agree with staff's recommendation I think this is a good solution and I think because especially because we have [29:09] the laa funding that is for a purpose like this um we're not having to dip [29:15] into other pots of money and um yeah so I think it sounds good thank [29:24] you other questions I have a question [29:30] M turn Commissioners oh oh I have a question please um and maybe we've discussed this already but what if let's [29:37] say in a year someone's income goes down and they would now be eligible is there a process or procedure [29:46] option for that chairing Commissioners this funding as proposed is a one-time [29:51] funding and the application deadline is intended to be before it goes to [29:57] assessment and that funding would be deployed okay and so the the structure as proposed wouldn't it wouldn't cover [30:03] the scenario that you've outlined chairing Commissioners I did [30:10] want to uh Kim reminded me to bring up that um because staff haven't been uh we [30:15] haven't begun collecting data on the household's income the there isn't a [30:20] stronger estimation for what the need actually will be from uh unit owners at the Heights and and how many households [30:27] will be eligible so the proposed amount that the council will consider on the second is for 250,000 there's no [30:33] assurance that that is enough to finance the need the other scenario that could [30:38] be the case is that um there are some households that have a a very high demonstrated need and um with this ratio [30:48] approach that um benefits those with the most severe need it may be that those households um aren't have they're not [30:55] able to have that full need met so just want to be clear that because we haven't been able to collect that data yet we're [31:02] we don't have that full Assurance of if that if the 250 is enough commissioner carer uh thank you [31:09] and kind of on the opposite end of that if you um let's just say there's three households and this is like a real [31:15] scenario here um we could spend we don't have to you're not necessarily going to [31:21] use all the 250,000 because there are these Max allowed assistance amounts per [31:27] household yep okay thank you I have a question if the need is [31:34] there let's say and we come to find out that you know the 250 isn't enough could there be the option to [31:41] approach for a request for more funding um based on like future [31:48] discussions I mean I understand that that timeline is very short so I do respect that I'm just curious kind of [31:54] where that timeline sits and what happens if there are those extreme needs um could staff kind of I mean chair and [32:03] commissioner yeah so there are some major cut off points in terms of um [32:10] action that the the city must take I think the main one is um on February [32:16] 10th there would be a resol that that's our targeted date for resolution of bond sale and so that's that million dooll [32:24] Bond that's part of the associated financing that meeting would also include the consideration of the Tiff [32:29] District establishing a tiff District so those dates to me feel like very hard cut offs um currently as proposed this [32:36] this um direct assistance program we would start collecting applications on [32:41] December 3rd assuming that the city council approves funding and there would be a deadline of the first week of [32:49] January to receive those applications uh if staff were able to work very quickly [32:54] to understand what the eligibility is what that full need is I would I would [33:00] hopefully think we could bring back a request for additional funding within that small window [33:07] yeah thank you are there any other [33:12] questions uh hearing no other questions at this point we'd be looking for a [33:18] motion to adopt resolution number 20 [33:23] 24-26 which is resolution approving a direct income-based assistance program and directing H staff [33:29] to administer the [33:35] program so moved we have a motion by commissioner Carter second and a second by [33:40] commissioner Mueller to adopt resolution number 202 24-26 is there any [33:46] discussion hearing no discussion all those in favor please signify by saying I I opposed motion passes 4 to Z moving [33:56] on to item six which is discussion items hi thanks chair uh I just have a [34:01] couple items I wanted to raise to this group I acknowledge that we're not a full board tonight so everything I [34:08] mentioned tonight I think we would we'll plan to follow up with an email with more information so everyone is on the same page um one thing I did want to [34:15] bring up that um we are exploring is introducing consent items to HRA board [34:21] agendas um so this is allowed under our bylaws um but it is a new uh it would be [34:28] a new structure that the board historically hasn't been using um but consent agenda items allow for a quick [34:34] approval of standing annual items like the utility allowances for example um [34:39] covered under one vote and the board would obviously have the ability to pull anything from the consent agenda if they [34:45] wanted to have a more in-depth discussion um so this might come up in [34:51] December board um meetings that are coming up so I just wanted to bring that to your attention again um if we do move [34:58] forward with that path we would send an email with more information about what that structure would look like for those board [35:04] meetings um and then if there's no questions about that I can jump to my okay um the other thing I just wanted to [35:11] remind all of you about is we do have a special meeting of the H board scheduled [35:16] for December 10th and that's a concurrent meeting with both the port authority and the city council again [35:22] there'll be more information over email about how that um structure is going to work I just wanted to use this time to [35:29] remind you of that meeting any questions or discussion on [35:34] any of those perfect I really like the consent agenda items thank you um so [35:41] with that we'd be looking for a motion to adjourn the Tuesday November 26 2024 [35:46] housing Redevelopment Authority meeting so moved we have a motion by commissioner mua second and a second by commissioner Mueller to adjourn the [35:53] meeting is there any discussion hearing none all those in favor please signify by saying I I opposed motion passes 4 Z [36:01] we are adjourned [Music]