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CR 03-017 Supporting Changes to HCHRA . . . . \ CITY Or: ~ February 4, 2003 HOPKINS Council Report 2003-017 Resolution 2003-008 Supporting Changes to MS 383B.77 Hennepin County Housing and Redevelopment Authority (HCHRA). Proposed Action Staff recommends adoption of the following motion: Move to approve Resolution 2003-008 SupportinQ ChanQes to MS 3838.77 Hennepin County Housina and Redevelopment Authority (HCHRA). Overview The Hennepin County Housing and Redevelopment Authority (HCHRA) was established by Minnesota Statutes 383B.77 and holds all of the powers of a housing and redevelopment authority as prescribed by MS 469.001 through 469.047 (the HRA Act). Thus the HCHRA has essentially the same powers as a city HRA, including the authority to levy a special tax not to exceed 0.0144% of the taxable market value of all property within its area of operation. The current enabling legislation limits the authority of the HCHRA by stating that it "shall not exercise its powers" in a municipality where a city HRA had been created prior to June 1971 r unless the city HRA requests the HCHRA to do so. Hopkins is one of only four cities that had an HRA in place prior to 1971. Thus, for the HCHRA to be able to levy for taxes in Hopkins, Hopkins must annually request that the HCHRA do so. Additionally, if Hopkins were to request the HCHRA to levy the special tax in the City under the existing legislation, the Hopkins HRA levy capacity would be reduced or eliminated. The current legislative requirements imposed on the HCHRA treat municipalities differently by limiting potential HCHRA levy in some cities but not in others. County attorneys have concluded that the HCHRA cannot legally levy for taxes in some cities without applying the same levy to the four cities with pre-1971 HRA's. This stipulation effectively prevents the HCHRA from levying the special tax anywhere in the County. Hennepin County is proposing changes to the existing legislation that would allow the HCHRA to levy for taxes in all cities in the county, regardless of when the cities created their respective HRA's. The City of Hopkins has been asked by the County to support these changes. Primary Issues to Consider . What are the primary changes being proposed? . How will the proposed changes affect Hopkins taxpayers? . How will the proposed changes affect the Hopkins HRA? . What activities does the HCHRA currently undertake in Hennepin County? SupportinQ Documentation . Resolution 2003-008 Supporting Changes to MS 383B.77 Hennepin County Housing and Redevelopment Authority (HRA) .~~~ Steve ahmer Assistant to the City Manager Financial Impact: $ BUdgeted: Y/N Source: Related Documents (CIP, ERP, etc.): Notes: Proposed HCHRA Legislation Changes Council Report 2003-017 Page 2 . Analysis of Primary Issues · What are the primary changes being proposed? The proposed changes would delete the followinq section of the current MS 383B.77: "The county authority shall not exercise its powers in a municipality where a housing and redevelopment authority was created under MS 1969, chapter 462, before June 8, 1971, except as provided in this subdivision" This change would eliminate the need for Hopkins, St. Louis Park, Robbinsdale and Minneapolis to request the HCHRA special levy. Thus the HCHRA could levy the tax without the permission of these Cities. It will also allow all cities within the county to be treated equally with regard to the levy authority of the HCHRA. The HCHRA special levy would be implemented by an annual vote of the County Board of Commissioners and would be subject to the normal requirements governing the establishment of local levies including the Truth in Taxation hearing process. . How will the proposed changes affect Hopkins taxpayers? . The average home in Hopkins (Le., median taxable market value) would be subject to a maximum HCHRA levy of approximately $21 per year ($146,250 X 0.000144), although the County could choose to levy an amount which is less than the 0.0144% maximum. The levy would apply to all taxable property in Hopkins. . How will the proposed changes affect the Hopkins HRA? According to attorneys for Hennepin County, the proposed changes would not reduce the levy authority of the Hopkins HRA due to implementation of the HCHRA special levy; the Hopkins HRA would retain its full capacity to levy. It is possible that language may be added to the proposal which would affirmatively state that the HCHRA levy would have no effect on city HRA levies - this is still under discussion. In addition, the notice and approval process which ensures that the HCHRA carries out projects only when agreed upon by the City, would remain in effect. The statute states that: "If a housing or redevelopment project is undertaken in Hennepin County pursuant to this section, the governing body of the city must approve the project before it is undertaken." This language does not refer to the act of levying of taxes, which would be allowed without approval by cities with pre-1971 HRA's, but rather to specific HCHRA activities within the City. Examples of such activities are listed below. . What activities does the HCHRA currently undertake in partnership with municipalities in Hennepin County? . (as detailed by Hennepin County) · Administration of federal HUD programs for rental housing, homeownership and homelessness; · Administration of state MHFA programs for housing rehabilitation and first-time homeowners; . . . Proposed HCHRA Legislation Changes Council Report 2003.0] 7 Page 3 · Provision of county assistance through the Affordable Housing Incentive Fund to increase affordable rental and ownership housing opportunities; · Tax-exempt financing for housing, including senior housing and community facilities; · Transportation corridor planning and investments including a focus on Transit- Oriented Development; · Creation of community infrastructure and amenities through Hennepin Community Works to increase housing and job opportunities and enhance the tax base; and · Assistance with brownfield cleanup, economic development technical assistance and small business finance. Council Options ReQardinQ the Resolution The Council may: 1. vote to pass the resolution; 2. vote to pass the resolution with any recommended changes or conditions; 3. vote not to pass the resolution; or 4. continue the discussion and direct staff to gather more information. Staff Recommendation Staff recommends approving Resolution 2003-008 Supporting Changes to MS 3838.77 Hennepin County Housing and Redevelopment Authority (HCHRA). . CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2003-008 RESOLUTION SUPPORTING CHANGES TO MS 383B.77 HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY (HCHRA). WHEREAS, the Hennepin County Housing and Redevelopment Authority (HCHRA) was created pursuant to special law MS 383B.77 (Laws 1987, c. 177, Sec. 1) with all the powers granted by the statewide "HRA Act" including the power to levy a special tax not to exceed 0.0144% of taxable market value; and WHEREAS, MS 383B.77 requires the HCHRA to notify communities annually of its programs, and further requires that HCHRA must receive approval by resolution of the governing body of a City before it can undertake any project; and WHEREAS, the MS 383B.77 also requires that cities with a housing and redevelopment authority (HRA) in existence prior to June 8, 1971 must request annually that the HCHRA levy the special tax in their city, in which case the County levy reduces any local levy for HRA Act purposes; and . WHEREAS, this requirement affects only 4 of 28 municipal HRA's in Hennepin County, and therefore treats municipalities unequally by limiting the potential levy for HRA Act pu rposes in some cities but not in others; and WHEREAS, the Hennepin County Board of Commissioners has approved seeking a legislative change to MS 383B.77 to clarify the HCHRA's levy authority by deleting this requirement affecting only pre-1971 municipal HRA's, and allowing the pre-1971 HRAs to continue their levy; and WHl:REAS, it is the position of the County that this legislative in itiative be pu rsued only in the event that the goal of clarifying the HCHRA's levy authority is achieved, and that any other amendments which would have a negative effect on either the HCHRA or municipal HRA's would be strenuously opposed including withdrawal of the proposed legislation. . NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hopkins goes on record in support of the proposed changes to MS 3838.77 insofar as the HCHRA's levy authority will in no way reduce, restrict or otherwise infringe on the levy authority and capacity of the Hopkins HRA, and insofar as the City of Hopkins retains the authority to reject proposed HCHRA activities within the City in the event that the interests of the County and the City of Hopkins are in confl ict. BE IT FURTHER RESOLVED, that the City of Hopkins requests that staff be kept appraised by Hennepin County of the status of legislative deliberations on th is matter. Adopted by the City Council of the City of Hopkins, Minnesota, this ,2002. ATTEST: day of Eugene J. Maxwell, Mayor Terry Obermaier, City Clerk . . .