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2. 1997 Urban Hennepin county community Development Block Grant Program Planning Allocation of $50,729 for Housing/Home Ownership C ITYOF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 MEMORANDUM TO: Don Ashworth, City Manager FROM: Kate Aanenson, AICP, Planning Director OF DATE: February 19, 1997 SUBJ: 1996 -1997 Community Development Block Grant Funding Request BACKGROUND The 1997 -98 allocation for CDBG funding is $50,729. The last two years, the city designated the CDBG funding towards senior congregate dining. This year's allocation will be used for a home buyer's assistance program. The program will be targeted for home buyers that are in the 50 percent median income for the metropolitan area. The median income amount for 1996 was $27,300. The maximum housing price would be $95,000. The assistance program would work by placing an advertisement in the local paper announcing this program. Applicants would be screened for eligibility and the grant would be used to make up the difference in the affordability of a unit. For example, someone with a median income of $27,300 could probably only afford a mortgage of $80,000, and therefore the block grant would be used to make up the difference of the purchase price. With $50,729 available, only 2 -5 loans could be issued. The block grant money acts as an interest free loan. The loan will appear on the title of the property as a lien. When a home is sold, the money would be returned and used to assist another home buyer. Staff will be working with local banks to provide this assistance and the processing of these loans. ANALYSIS As you are aware, CDBG dollars have national objectives that each activity must meet including: • benefit low and moderate income persons • aid in the prevention of slum or blight • meet community development needs having a particular urgency Don Ashworth February 20, 1997 Page 2 Hennepin County has given the following priorities that should be used as a guide for the use of CDBG funds. These priorities include: Housing Rental and Supportive Housing: planning, site acquisition, related infrastructure for development of new units and rehabilitation of existing units for low- income households (less than 50 percent of median income). Home Ownership: planning, site acquisition, related infrastructures, down payment assistance for low- income, first -time home buyers, and rehabilitation of existing units occupied by low- income households. Community Development Neighborhood redevelopment/revitalization, senior centers, removal of architectural barriers /ADA compliance, lead -based paint abatement and planning activities to address community revitalization needs. Public Services Services to senior citizens, disabled persons and youth, child care assistance and transportation services. The Senior Center remodeling will meet the Community Development and Public Services priorities of the county. In addition, the allocation will benefit low and moderate income persons. RECOMMENDATION Attached is a resolution for the Council's consideration that allocates the $50,729 for home buyer assistance program. Attachment: Resolution \ \cfs I \vol2 \plan \ka\cdbg.97.doc CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA DATE: RESOLUTION NO: MOTION BY: SECONDED BY: RESOLUTION APPROVING PROJECTED USE OF FUNDS FOR 1997 URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM WHEREAS, the City of Chanhassen, through execution of a Joint Cooperation Agreement with Hennepin County, is cooperating in the Urban Hennepin County Community Development Block Grant Program; and WHEREAS, the City of Chanhassen has developed a proposal for the use of Urban Hennepin County CDBG funds made available to it, and held a public hearing on February 24, 1997, to obtain the views of the citizens and local and Urban Hennepin County housing and community development needs and the City's proposed use of $50,729 from the 1997 Urban Hennepin County Community Development Block Grant. BE IT RESOLVED, that the City Council of the City of Chanhassen approves the following project for funding from the Urban Hennepin County Community Development Block Grant program and authorizes submittal of the proposal to Hennepin County for review and inclusion in the 1997 Urban Hennepin County Community Development Block Grant Program Statement of Objectives and Projected Use of Funds. Protect Budget Home Buyer Assistance $50,729 BE IT FURTHER RESOLVED, that the City Council hereby authorizes and directs the Mayor and City Manager to execute the Subrecipient Agreement and any required Third Party Agreement on behalf of the City. Passed and adopted by the Chanhassen City Council this day of 1997. ATTEST: Don Ashworth, City Clerk/Manager Nancy K. Mancino, Mayor YES NO ABSENT FEB 'b 10: 11Hi9 I NNLYLY UV l.Vl' • + = 0220 Resolution No. 96 -2 -150 The following resolution was offered by Commissioner Johnson, seconded by Commissioner Tambornino: WHEREAS, members of the Hennepin County Board have received staff reports and recommendatiene regarding county housing policy and have discussed housing needs and potential county housing roles with municipal officials, BE IT THEBSFORE RESOLVED, that the Hennepin county Board supports the following housing policies and program directions: 1. Hennepin County's housing policies and activities should be consistent with the following goals and assumptions: a. Rousing is primarily a municipal responsibility. b. County involvement in housing should complement, not supplant, existing municipal responsibilities and resources. ,.. Coasiatent with the county board's vision and mission, county housing activities should achieve one or more of the following goals: - Reduce county service costs or improve service results - Reduce reliance on county services and promote self- reliance - Stabilize neighborhoods and strengthen the tax base. d. No additional federal, state or county funds are expected to become available in the foreseeable future to support housing activities. --'7e. Future county and municipal access to state and federal funds for housing, community development and transportation purposes are likely to be linked to affordable housing performance. 2. Hennepin County's current supportive role for housing be continued, in cooperation with municipalities, in promoting neighborhood and tax bane stabilization and furthering affordable housing. 3. Hennepin County will utilize and seek to maximize existing resources to assist communities in achieving locally established goals under the Livable Communities Act, including the preservation of existing housing unite. 4. County staff are authorized to prepare proposals for strengthening the county's coordinating role and establishing countywide programs to address housing and tax base concerns identified by communities subject to county funding constraints and county Board approval, as required. BE IT FURTHER RESOLVED, that staff are authorized to present to suburban communities proposed revisions in the method of allocating county CMG funds. The goal of such revisions should be to promote adminiatrative efficiencies and assist communities in addressing housing and community development needs. The following provisions for the 1997 -99 Joint Cooperation Agreement should be included among the proposed revisions: 1. Communities qualifying as entitlements (having populations of at least 50,000) will receive annual funding allocations equal to the HUD formula entitlement or the Hennepin County formula allocation, which ever is greater. FEB 2 01956 FEB 23 '96 10 :12RM HENNEPIN CO COIMISSI P.2 //yyy� 02 Paso 2 ROSo. /RBA No. 95 -2 -150 2. Non - entitlement communities with county formula allocations of $50,000 or more will receive planning allocations. 3. Non- entitlement communities with formula allocations of leas than $50,000 will have their funds Consolidated in a pool for award on a competitive basis. Representatives of these communities will participate in a review committee to make funding recommendations to the County Board. Only the communities whose funding has been pooled will be eligible to compete for these funds. The question was on the adoption of the resolution, and there were Six YEAS and NO NAYS as fal1owa: COUNTY OF HENNEPIN BOARD OF cOUNTY COMMISSIONERS YSA _HAY =MR Mike Opat X Sandra Hilary ABSENT Mark Andrew X Randy Johnson X Nary Tambornino _ � Penny Steele Peter McLaughlin, Chair RESOLUTION ADOPTED. c e k the C a nt. Hoard FEB 20 1996 City Council Meeting - January 27, 1997 Councilman Mason: Yeah, I'm pretty sure that's the way it works but yeah. Yeah, it'd be good to get his input as well. Councilman Berquist: Well then my presentation is complete. I'm a little bit surprised at Don's numbers. Don Ashworth: I think that they're high. Councilman Berquist: I think they are too. Don Ashworth: ...probably divide them by 4. Or a fourth of that. Mayor Mancino: Let's have those ready for the work session. Okay, good. ADMINISTRATIVE PRESENTATIONS: SENIOR CENTER CONGREGATE DINING, PLANNING DIRECTOR. Kate Aanenson: 1 wanted to bring this to your attention because we're getting close to go out to bid. We have prepared, had them draw up the kitchen itself. As you recall, Hennepin County has changed the regulations for what we can use our Community Development Block Grant. We were able to put the $100,000.00 towards congregate dining in the future. Any money that we allocate now has to go towards effectuating affordable housing so we've gotten confirmation that we're in the $50,000.00 ana''J plus bracket. You may not recall, if we're under 50 we're in this pool that other communities could apply for so we are kind of our own entitlement where we can apply that money. So we felt this was our best opportunity to take this money and use it towards congregate dining because any time in the future we wouldn't have that large of a pool money. In putting the bid package together, we're excited about the designer that we had in laying out the space and using the existing seating area that's in there now. It's going to cause some complications. The good news is that the senior center is just continuing to grow in it's use and demand, which is exciting. With the housing that's fully rented out. So in putting this together we were hoping that we would actually come under the $100,000.00 and we may be able to finish off some additional space down there to tie into the congregate dining. As it turns out, the demand for the heating and ventilating, because we do have to have air conditioning down there, and that air conditioning is actually going to carry a larger area. It's really added a large expense to it so it really pretty much took the $100,000.00 and some. That's just their estimate. Obviously you'll have to approve the bid package. I've spoken to the City Manager and we're hoping that that number will come closer and that there will be an opportunity for the City to bridge that gap in order to make this accomplished because this again is our only opportunity to apply this money so we will come back to you with the bid package. I want to give you an opportunity to see the space laid out. There are some members of the Senior Commission here if you had any questions. If any one of you wanted to kind of walk through the space as it's laid out and how that whole system works, I'd be happy to do that with you but I just wanted to let you know, this is for your information and we'll be bringing back the, well we'll need to award the bids so we can see that. Mayor Mancino: Okay. Any questions for Kate at this point from Council members? Councilman Mason: Just a real quick comment. I know it's not always possible but it's nice to see this stuff ahead of time. To be able to digest it and have some time to think about what's happening before we get the shock. No, thanks. Thank you. 30 City Council Meeting - January 27, 1997 Mayor Mancino: Councilman Berquist. Councilman Berquist: Where'd the mechanical numbers come from? Kate Aanenson: ...was the, I paid them to do the design so they're the ones that came up, and they did the City Hall design so we incorporated it into that. Councilman Berquist: Who was it? Kate Aanenson: Kasamme and Associates. It's the same one that did the design, or the bid package for City Hall. Councilman Berquist: 100 grand was the budget right? Kate Aanenson: Correct. Councilman Berquist: We're about 190. Kate Aanenson: No. Mayor Mancino: 117. Kate Aanenson: 117. Councilman Berquist: That's just for the kitchen. Didn't that 100 include the dining and the rest rooms as well? Kate Aanenson: No, that was just additional. We wanted to finish off. Originally, I didn't realize that the heating and ventilating would be so much so I asked them to see what we could finish off additional space because there's so much demand on the senior center. That seating area right now. If we could provide some other seating area or some other rooms that the seniors could be using that weren't used in the congregate dining. So that was just for your information. If we want to finish off additional space, what it would cost. Councilman Berquist: Where have you got, I'm looking at. Kate Aanenson: First column. Councilman Berquist: Yeah, I know that but I'm looking at the numbers and I'm seeing a different, appliances, including the exhaust hoods. Is that all in, all in the equipment? Kate Aanenson: That's just your equipment bid. Councilman Berquist: Okay, but the exhaust bids and what not are in equipment. Kate Aanenson: That's all equipment. Councilman Berquist: I think the mechanical number is real steep. 31 Z / / C ITYOF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 February 3, 1997 Mr. Paul J. Murphy Vice President for Development Family Hope Services 3315 Fernbrook Lane Plymouth, MN 55447 Dear Mr. Murphy: The Community Development Block Grant funds the City of Chanhassen receives is from Hennepin County. The Hennepin County Board passed a resolution dated February 20, 1996 regarding the use of block grant dollars. The outcome of the resolution is that suburban communities receiving less than S50,000 allocation have the opportunity to pool monies from other communities. In addition, block grant requests shall be used only for assisting housing and community development needs. Because your request for S 15,000 for transportation and outreach programs doesn't meet the county's new criteria, your request cannot be submitted. If you have additional questions regarding the use of block grant dollars, I would suggest you contact Barb Hayden at Hennepin county Office of Planning Development. Sincerely, Kathryn R. Aanenson, AICP Planning Director c: City Council 1 \cfi I ol2`.plar i<a'.murphy.Itr.doc