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CR2002-011 CDBG Funds Reallocation --- -- CITY Orc , ~ HOPKINS . January 9,2002 Council Report 2002-11 REALLOCATION OF URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS Proposed Action Staff recommends adoption of the following motion: Followinq the public hearinq, move to approve Resolution 2002-01 Reallocatinq Urban Hennepin County CDBG funds and authorizinq the execution of third party aqreements. With this motion the resolution will be forwarded to Hennepin County for their approval. Overview As a participating city in the Urban Hennepin County CDBG program, each year the City receives an allocation of approximately $150,000. The funds must be used for specific activities which primarily benefit low and moderate income residents. Historically, the primary activity funded with CDBG is the housing rehabilitation loan and grant program. Other activities included public housing improvements and limited funding of social service programs. Due to a significant increase in housing rehabilitation loan repayments the City has been able to recapture approximately $70,000 in program income over the last year alone. Because these funds must be expended prior to new CDBG dollars, the City has . accumulated a balance in the housing rehabilitation budget which can not be spent by the May 1, 2002 deadline imposed by the Department of Housing and Urban Development (HUD). In order to prevent loosing COBG funds in the future, staff is recommending that $99,000 in housing rehabilitation funds be reallocated to public housing improvements for Dow Towers. Primary Issues to Consider . What are the proposed public housing improvements? . Will there be sufficient funds remaining for the housing rehabilitation program? . What other activities were considered? SupportinQ Information . Resolution 2002-01 , /,/'1 .' ;rY' ,// 1 -.., . ; I, - / . . / ,'" ,1 I '-- ,'// ,. ,"c .:. ,.' ,_ .' J ,I. /' to l.j / ( / ,_ i i Kerst~iElverum / HOUS7'9 Coordintltor . Financial Impact: $~None Budgeted: Y/N _ Source: Related Documents (CIP, ERP, etc.): Notes: Council Report 2002-11 Page 2 . Analvsis of Issues . What are the proposed public housing improvements? Staff is recommending that the majority of the funds be used to install individual thermostats in each of the 76 units at Dow Towers. Currently, the residents only have the option of having heat on or off. To control the heat in their unit, residents typically open the window. Installing the thermostats will provide a more comfortable living environment for the residents and a significant cost savings for the HRA through decreased heating bills. The thermostats are estimated to cost $70,000. The remaining funds will be used to offset shortfalls in a public housing improvement project directed at making the units eligible for the crime free multi-housing program. . Will there be sufficient funds remaining for the housing rehabilitation program? There should be sufficient funds for all rehabilitation applications in progress. However, staff will be recommending that the majority of the 2002 CDBG funds be allocated to . housing rehabiltation to ensure continued availability of the program. . What other activities were considered? Due to the limitations on the uses of the funds and the short time-line we have to expend the funds, the public housing improvements were the only viable option identified. Alternatives The City Council has the following alternatives regarding this item: . Approve the reallocation of funds as recommended. . Approve a reallocation of funds for another eligible activity. . Elect not to reallocate funds. With this option the County may face penalties which would be passed on in the form of a reduction in future allocations. . .. . CITY OF HOPKINS . HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2002-01 RESOLUTION TO REALLOCATE URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS AND AUTHORIZE EXECUTION OF ANY THIRD PARTY AGREEMENTS WHEREAS, the city of Hopkins, through execution of a Joint Cooperation Agreement with Hennepin County, is a subrecipient community in the Urban Hennepin County Community Development Block Grant Program; and WHEREAS, pursuant to the Subrecipient Agreement between the city of Hopkins and Hennepin County, the city agrees to assume certain responsibilities for the utilization of Community Development Block Grant funds; and WHEREAS, the city of Hopkins would now like to reallocate Community Development Block Grant funds previously allocated to the city pursuant to the Subrecipient Agreement. . BE IT RESOLVED, that the City Council of city of Hopkins, Minnesota approves the reallocation of Community Development Block Grant funds by reallocating $99,000 from the housing rehabilitation project and allocating $99,000 to the public housing improvement existing project BE IT FURTHER RESOLVED, that the City Council hereby authorizes and directs the Mayor and its City Manager to execute any required Third Party Agreement on behalf of the City. ADOPTED this 15th day of January, 2002 By Eugene J. Maxwell, Mayor Attest: . Terry Obermaier, City Clerk.