ASH awarded $100,000 to the HR to support affordable housing in this community. The HA created a program with the award to provide rehabilitation grants to naturally occurring affordable housing properties or Noah specifically to be used on improvements to units occupied by longtime tenants. One grant in the amount of $45,000 was awarded in 2020, but the remaining funds have gone unspent.

Staff is recommending that the funds be transferred to the Economic Development Authority to be used in its apartment remodeling program. While staff can continue to try and market improvements to occupied units, combining the funds with the apartment remodeling program will allow greater flexibility and ability to get the funds spent.

In 2027, we are proposing a 0% increase to the levy. And I'm going to get into the reasons for that recommendation as we move through the rest of the presentation.

our fund balances are in a healthy position. And in an economy where everything seems to be more expensive, this is an opportunity we fail to hold the line for the taxpayers. Um, this cannot be forever. You can't you can't maintain your program forever without increasing the levy, but it is an option that both the finance department and I believe that you could reasonably exercise this year.

I also think that I'm glad we changed the policy. I remember back before 2019 when we always tried to max out the levy and I don't think you should just max it out just to be maxing it out. I think it's more appropriate to do what we're doing now and levy what we need because the need the money as well. So, I think that was a good um policy change and I understand that at some time down the road we're going to have to levy more, but I think it's good to do the 0% levy this time around.

We propose increasing the min minimum project size from five units to 15 units. The city is attempting to encourage small infill projects. These are financially challenging and adding affordability makes them even more challenging. 10 to 20 units are the minimums typically required by our peer cities.

So if we amended this to 10 or 12, we could on an individual basis give some sort of a variance or something. I don't know if that's the right term, but

So you certainly could um I mean you can put this off a month and direct us to do some more work and answer those kinds of questions. That's certainly an option.

The first level would be for the preservation and rehabilitation of naturally occurring affordable housing for housing with larger bedrooms, accessible housing, and housing where current rental subsidy households live. The second level of priority would be housing affordable at 30% of the AMI, housing with supportive services and highly energy efficient projects.

The proposed updates clarify that any request for funds will involve first a review of the impact of any 4D tax classification and that any restrictions that trigger the 4D tax classification will be reviewed in light of the 4D policy and also be subject to city council approval.

Um as we were planning for 2026, we could not have foreseen Operation Metro Surge and the significant disruptions it had on our community, including our business community. So, we pivoted to our work to um develop the small business resiliency program, an emergency program uh to respond to the economic disruptions caused by the ice surge.

The goals of the program were to prevent job loss, avoid an increase in commercial vacancy rates, and address the impacts of the livelihood of our um business owners and community members.

the program provided almost $65,000 in funding to 10 local businesses, including three businesses located in downtown. It helps support or preserve approximately 75 jobs in the community and stabilize 28,000 square feet of commercial space. Um, which were some of the original goals of the program.

Great report. I think this is excellent work. Exactly what we needed to do at the time. So, thank you very much for doing great stuff.

The 2027 proposed budget is 38% higher uh than the 2026 adopted. We are proposing to make a major investment potentially some uh large public art piece or pieces in 2027 um to the downtown area really bringing excitement and momentum to this branding and placemaking initiative.

The proposed levy uh increase that's included in this budget is a 3.5% increase. Um so that's roughly $668,000. Um, the impact of the EDA levy increase for a median value valued home is estimated to be about $1.38 for the year.

One of the first steps that we have been discussing with um our administrative services division is a possible mural on the liquor store at 65th and Nicollet. We feel like that could be um it's a large space. It's a big blank wall. Um the liquor store uh is a building that we own and we have control over. It seems like a pretty easy and splashy first step.