CR 98-24 1998 Community Development Block Grant ProgramFebruary 12, 1998
Proposed Action
Overview
Council Report 1198 - 024
1998 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM
Staff recommends approval of the following motion: Following the public hearing, adopt resolution
number 98 -007 approving the proposed program for the 1998 Urban Hennepin County Community
Development Block Grant (CDBG) Program and authorizing its submittal to Hennepin County.
With this motion, the CDBG application will be submitted to Hennepin County for their review and
approval.
As a participating city in the Urban Hennepin County CDBG program, Hopkins is eligible to receive
$148,989 in CDBG funds for the 1998 program year, The funds will be received on July 1, 1998 and
must be expended by December 31, 1999.
Staff is recommending that the City propose to fund the following activities with 1998 CDBG funds:
o housing rehabilitation program
o Community Action for Suburban Hennepin
As a requirement of the CDBG funding process, the City must hold a public hearing on the proposed
use of funds prior to approving the attached resolution. The City's proposal must be submitted to the
County by March 13, 1998.
Primary Issues to Consider
o What is the intended use of CDBG funds?
o What activities are being recommended for funding?
o Where any other requests for funds received?
o Where any other activities considered?
Supportina Information
o Resolution 98 -007
o CDBG Eligible Activities
o Request for funds - C. H
Kerst n Elverum
Hou ing Coordinator
1998 CDBG program
Council Report 98 -024
page 2
Analysis of Issues
o What is the intended use of CDBG funds?
CDBG funds may be used to support a wide range of housing and community development activities.
The intent of the program is to fund "bricks and mortar" projects versus social service programs
Activities must meet at least one of the following objectives of the CDBG program:
o Benefiting low and moderate income persons
o Prevention or elimination of slums and blight
o Meeting a particularly urgent community development need
Additionally, Hennepin County imposes the following guidelines:
o 20% maximum for public service activities
o maximum of three locally administered activities
o minimum allocation of $7,500 per locally administered activity
o activity should be ranked as a high priority in the Hennepin County Consolidated Plan
o What activities are being recommended for funding?
Staff is recommending that the 1998 CDBG funds be allocated as follows:
o $143,989 - Housing Rehabilitation
o $ 5,000 - Community Action for Suburban Hennepin (CASH) HOMELine Program
Housing Rehabilitation
The need for a continued housing rehabilitation program has been identified in the Strategic Plan,
Comprehensive Plan and the Housing Analysis Report. Although financing for the housing
rehabilitation program is available through the City's revolving loan fund, if alternative funds such as
CDBG are not used to supplement the program, the revolving loan fund will soon be depleted.
It is estimated that fifteen households will receive housing rehabilitation loans or grants using 1998
CDBG funds. The program is administered jointly between the City and Hennepin County. This
activity has been funded through the CDBG program since 1974. The 1997 CDBG allocation to this
activity was $122,010.
Community Action for Suburban Hennepin (CASH)
CASH submitted a request for $5,000 in CDBG funds for support of HOMELine, a housing services
program of CASH. HOMELine offers the following housing programs primarily for low and moderate
income homeowners and renters:
1998 CDBG program
Council Report 98 -024
page 3
o Pre - Purchase Home Buyer Education and Counseling
o Home Maintenance - Repair and Rehab Programs
o Foreclosure Prevention Counseling
o Tenant "hotline" to assist tenants with rental problems
o Tenant organizing assistance, legal advocacy and renter education at area high schools
Staff feels that the housing programs offered by HOME Line complement the housing programs of the
City of Hopkins and that their request for $5,000 is reasonable. CASH has also cooperated with the
City in a special mortgage program for the Westbrooke neighborhood, providing homebuyer
counseling. The City first funded this activity with CDBG fluids in 1995. The 1997 CDBG allocation
was $4,500.
o Where any other requests for funds received?
There were no other requests for funds as of the date of this report. The Greater Minneapolis Day Care
Association, an organization the City has allocated CDBG funds to for the past several years, did not
request funds this year due to a significant balance of 1997 CDBG funds and no waiting list at present.
o Where any other activities considered?
A recommendation of the housing analysis is to undertake a acquisition/demolition project in an effort
to clear a blighted property and make available land for new construction. This activity would be an
eligible CDBG activity if the determination was made that the property is not suitable for rehabilitation.
The estimated cost of undertaking such a project is $50,000.
Staff has also been approached by Habitat for Humanity. They would be interested in doing a project in
Hopkins, either new construction or substantial rehabilitation, but would require that the property be
given to Habitat for Humanity at no cost. The purchase of a property for a Habitat project would also
be an eligible CDBG activity, but the estimated cost for this project would be $75,000.
It is staffs opinion that because these types of projects are extremely expensive the site should be
identified first so that a determination can be made that the cost is worth the benefit. If in the future a
property is identified as a good candidate for acquisition and the City Council desires to acquire it, the
City has the ability to reallocate the CDBG funds during the program year.
Alternatives
The City Council has the following alternatives regarding this issue:
o Hold public hearing; approve 1998 CDBG program as proposed by staff.
o Hold public hearing; amend the proposed CDBG activities and/or budget.
o Hold public hearing; delay action to the March 3, 1998 City Council meeting.
RESOLUTION APPROVING PROJECTED USE OF FUNDS FOR 1998
URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
AND AUTHORIZING SIGNATURE OF SUBRECIPIENT AGREEMENT WITH HENNEPIN
COUNTY AND ANY THIRD PARTY AGREEMENTS
WHEREAS, the City of Hopkins, 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 Hopkins has developed a proposal for the use of Urban Hennepin County
CDBG funds made available to it, and held a public hearing on February 17, 1998 to obtain the views of
citizens on local and Urban Hennepin County housing and community development needs and the City's
proposed use of $148,989 from the 1998 Urban Hennepin County Community Development Block
Grant
BE IT RESOLVED, that the City Council of Hopkins approves the following projects 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 1998 Urban Hennepin County
Community Development Block Grant Program.
BE IT FURTHER RESOLVED, that the City Council hereby authorizes and directs the Mayor and its
City Manager to execute the Subrecipient Agreement and any required Third Party Agreement on behalf
of the City to implement the 1998 CDBG Program
Adopted this 17th day of February, 1998.
Attest:
Housing Rehabilitation $143,989
Community Action of Suburban Hennepin $ 5,000
Terry Obermaier, City Clerk.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION NO. 98 -007
Project Budget
By
Charles D. Redepenning, Mayor
Federal statutes and regulations determine what activities are eligible under the CDBG Program. Generally,
three steps are involved in determining if CDBG funds may be used to assist a proposed activity.
1. Determine if the proposed activity meets one of the following national objectives of the program:
Benefiting low and moderate (L/M) income persons,
Prevention or elimination of slums or blight; or
Meeting a particularly urgent community development need.
2. Determine if the activity is included within the listing of eligible activities in the CDBG regulations,
as modified by statutory amendments. A general list of eligible activity categories follows:
3 Determine if the proposed activity falls within a category of explicitly ineligible activities listed
below:
NOTE: The current CDBG Program regulations are contained in 24 CFR Part 570, published September 6,
1988 as amended. Contact your CDBG representative if you would like a copy.
U: \Cdbg1998\fortn eligible activity.doc
CDBG ELIGIBLE ACTIVITIES
Acquisition of Real Property
Disposition of Real Property
Public Facilities and Improvements
Privately Owned Utilities
Clearance of Buildings and Improvements
Relocation
Public Services
Interim Assistance - Urgent Need
Removal of Architectural Barriers
Housing Rehabilitation
Homeownership Assistance
Code Enforcement
Historic Preservation
Commercial or Industrial Rehabilitation
Economic Development Activities
Special Activities by Subrecipients
Planning and Capacity Building
Buildings for the General Conduct of Government
General Government Expenses
Political Activities
Purchase of Equipment (generally)
Furnishings and Personal Property (generally)
Operating and Maintenance Expenses
New Housing Construction
Income Payments
Community Act
Community Education
Community Services
Emergency Assistance
Homeless Family Support
Homelessness Prevention
Volunteer Services
Energy Assistance
HOME
Tenant Hotline
Tenant Organizing
Home Buyer Education
Homeowner Counseling
Home Rehab Counseling
33 -10th Avenue S.
Suite 150
Hopkins, MN 55343
Business (612)933 -9639
Tenant Hotline 933 -0017
Energy Assist. 930 -3541
Fax 933 -8016
TDD 935 -4011
Investing In People,
Building Community
EWU NOSING
OPPORTUNITY
for Suburban Hennepin
Ms. Kersten Elverum
City of Hopkins
1010 South First Street
Hopkins, MN 55343
Dear Ms. Elverum:
This letter is to request funding in the amount of $5,000 from the city's
Community Development Block Grant program. This funding will be used to
support HOME Line, the housing services of Community Action for Suburban
Hennepin (CASH).
I am enclosing data showing use of these programs by residents of Hopkins. The
vast majority are low and moderate income people. We are not able to give an
income breakdown of the 100 -plus high school students who attended our
presentations at Hopkins High last year, but we have received very favorable
feedback from both students and their teachers about this growing program of
HOME Line.
As you know, we have been doing extensive work with the residents of Hopkins
Village in their efforts to preserve the property as assisted housing. We look
forward to working with the residents and your office as we continue our mutual
efforts to maintain this irreplaceable housing resource.
We appreciate your generosity to us in the past three years and your willingness
to consider our request for continued support. If you have questions or need
additional information, please feel free to contact me at 933 -9639, extension
203 or Charlie Warner, our Housing Programs Director at extension 221.
Sincerely,
Sharon A. Johns:
Executive Director
Enclosure: Information on program benefits to Hopkins residents
January 30, 1998
Community Action for Suburban Hennepin's
HOME Line Renters' "Hotline"
Information on calls during the years 1992 -1997
Over the past six years, a total of 1,364 Hopkins
(unduplicated) renters have contacted HOME Line.
This represents service to approximately 3,410
residents when all family members are counted.
0
168
Hopkins
Number of calls by year
207
232 245 256 256
1992 1993 1994 1995 1996 1997
Hopkins
Callers' Incomes
(1992 -1997)
Low 77.3%
Moderate 19.7%
Higher 3.0%
t••
Through the help of HOME Line, Hopkins tenants
have received $4,222.08 back from improperly
withheld security deposits and $9,705.00 in rent
abatements (refunds for substandard conditions.)
A vast majority (over 95 %) of Hopkins callers to
HOME Line are low and moderate income. These
income categories are those used by the U.S.
Department of HUD:
Low = incomes below 50% of the Metro median
income;
Moderate = incomes between 50 and 80% of the
Metro median;
Higher = incomes above 80% of the Metro median.
Community Renters Education Program
HOME Line's Community Renters Education Program provides education to high school students, (primarily seniors)
presentations to tenants /staff of area agencies, information booths at community events and trainings to
volunteers /staff from agencies and managers /property owners.
High School Presentations
Number of students (Number of presentations)
Name of School 1993 1994 1995 1996 1997
Academy Of Holy Angels 0 0 0 0 85 (3)
Bloomington Jefferson 73 (3) 0 0 22 (1) 28 (1)
Bloomington Kennedy 90 (3) 0 30 (1) 24 (2) 55 (3)
Brooklyn Center 46 (2) 38 (2) 44 (2) 0 67 (3)
Champlin Park 40 (2) 0 82 (4) 219 (8) 246 (8)
Coon Rapids 0 0 52 (2) 178 (6) 210 (7)
Crystal 0 0 0 17 (1) 23 (1)
Eden Prairie 46 (2) 48 (2) 76 (2) 86 (3) 83 (4)
Edina 38 (2) 0 0 0 0
Excelsior 0 0 0 10 (1) 5 (1)
Hopkins 156 (6) 26 (ii 82 (3) 110(7) 111 (5)
Mahtomedi 0 0 30 (1) 0 0
Minnetonka 0 47 (2) 0 99 (8) 20 (1)
Orono 0 0 0 0 30 (1)
Osseo 0 64 (2) 0 10 (1) 0
Osseo -Park Center 35 (3) 0 60 (2) 0 0
Richfield 60 (2) 47 (2) 58 (2) 60 (2) 141 (5)
Robbinsdale- Armstrong 62 (2) 0 25 (1) 27 (2) 0
Robbinsdale- Cooper 56 (2) 59 (2) 56 (2) 55 (3) 46 (2)
Rockford 0 0 0 8 (1) 0
St. Anthony 0 0 15 (1) 18 (1) 0
St. Louis Park 0 12 (1) 15 (1) 86 (4) 55 (2)
Wayzata 24 (1) 38 (2) 0 0 60 (2)
Westonka 0 0 0 Q IQ
TOTAL 726 (30) 379 (17) 625 (24) 1,029 (51) 1,315 (51)
The high school
presentation
covers the
rights and
responsibilities
of renters. The
presentation
can be tailored
to fit any class
size, any class
needs, and all
class schedules.
`Presentations
Association for Rental
Management of Brooklyn
Center
Bloomington Managers and
Owners Coalition
Business and Professional
Women League of St. Louis
Park
Center for Asians,
Minneapolis
Community Resource Center,
Brooklyn Park
Creekside Community
Center, Bloomington
Crisis Connection,
Minneapolis
Crystal Managers Coalition
Edina Community Center
Hennepin County Home
School, Bloomington,
Crystal, Excelsior,
Minnetonka
Minnesota Multihousing
Annual Convention
New Hope, Robbinsdale,
Crystal Managers Coalition
Perspectives Transitional
Housing, St. Louis Park
Richfield Apartment
Managers' Association,
Richfield
Senior Linkage,
Robbinsdale
Thorson Family Resource
Room, Crystal
Womens Resource Network,
Minneapolis
Other Educational Activities
Community Events
Crystal Frolics
Mall of America,
WCCO Booth
Bandana Square,
St. Paul
Richfield Cattail Days
St. Louis Park
Knollwood Mall
"Community Bazaar"
St. Louis Park
Party in the Park
American Indian Housing
Corporation,
Minneapolis
Bill Kelly House,
Minneapolis
Bristol Place,
Minneapolis
Community Action
Council, Apple Valley
Community Case
Corporation,
Minneapolis
Eden Women's Program,
Minneapolis
Hemline Coalition, St.
Paul
Heartland Community
Action, Wilmer
Hope Allianz,
Minneapolis
Itasca County Tenant
Assistance Program,
Grand Rapids
Kooch- Itasca Action
Council, Inc., Grand
Rapids
Maryland Park Tenants
Association, St. Paul
Metropolitan Center for
Independent Living,
Minnetonka
Minnesota Multihousing
Minnesota Fair Housing
Center, Minneapolis
NW Community Support
Program, Crystal
Overcoming Poverty
Together, Mankato
Person to Person,
Minneapolis
Perspectives
Transitional Housing, St.
Louis Park
Pillsbury House,
Minneapolis
Trainings
Pillsbury Neighborhood
Services/Waite House,
Minneapolis
Property - owners,
Bloomington, Minneapolis
and Minnetonka
Property Managers,
Bloomington,
Brooklyn Center, Edina,
Minneapolis, Plymouth,
St. Louis Park, and
St. Paul
Richfield HRA, Richfield
Salvation Army, Project
Breakthrough, Minneapolis
Scott /Carver /Dakota
Community Action,
Shakopee
Simpson Housing,
Minneapolis
Sojourner Women's
Shelter, Hopkins
South Eastern MN Housing
Network, Rochester
South West Minnesota
Housing Partnership,
Slayton
Southern Minnesota
Regional Legal Services,
St. Paul
St. Anne's Shelter,
Minneapolis
St. Paul Public Housing
St. Paul Tenants Union
St. Stephen's Shelter,
Minneapolis
Thorson Family Resource
Room, Crystal
Vail Place, Hopkins
Vail Place, Minneapolis
YWCA of St. Paul
HOME Line's Center for Homeownership
CDBG Report for the City of Hopkins
February 2, 1998
HOME Line now provides a complete spectrum of services to home buyers and
homeowners in suburban Hennepin County. The housing industry refers to this
as "full cycle homeownership services ". The services include:
• Pre - Purchase Home Buyer Education & Counseling. (Started August, 1994)
• Home Maintenance, Repair and Rehab Programs. (Started October, 1996)
• Foreclosure Prevention Counseling. (Started August, 1992)
• Reverse Mortgage Counseling for Seniors. (Started July, 1997)
Approximately 89% of the homeowners and home buyers served by
HOME Line's Center for Homeownership were low to moderate
households.
27%
11%
Household Incomes
62%
• Low - Below 50% of Median Income
▪ Moderate - 50% to 80% of Median Income
o Upper - Over 80% of Median Income
Pre - Purchase Home Buyer Education and Counseling
HOME Line's Center for Homeownership has provided pre - purchase home buyer
education and counseling for 50 Hopkins households.
Our three -part Home Stretch home buyers' workshops are offered monthly. The
workshops provide information on each step of the home buying process. The
curriculum meets or exceeds FHA, MHFA, Fannie Mae and Freddie Mac
guidelines.
We also offer individual home buyer counseling to assist potential
home buyers in developing an action plan to overcome barriers to
Year
Hopkins Households Served
1993
5
1994
14
1995
8
1996
17
1997
10
Total
54
Page Two
HOME Line's Center for Homeownership
Hopkins
homeownership. The most common barriers are lack of down payment and
closing costs, credit problems, and insufficient income. 78.6% of the
households that purchased homes received below market rate mortgages.
Home Maintenance, Repair and Rehab
HOME Line's Home Rehab Program assists suburban Hennepin County
homeowners who have home maintenance, repair or rehab needs. Our staff can
provide technical assistance in identifying needed repairs, writing specifications,
finding qualified contractors, evaluating bids, and working with contractors until
job completion. We also provide information on numerous loan and grant
programs that will finance the cost of home repairs and rehab.
Another component of the program is a series of workshops for homeowners.
These workshops include topics such as Weatherization, Dream House or
Money Pit? - How To Know The Difference, small plumbing repairs and basic
home repairs.
Community Action for Suburban Hennepin often works with lenders to design
special mortgage programs. The most recent pilot program is designed to the
include the cost of home improvement in the total mortgage amount. It can be
used for either a home purchase or refinance. The mortgage program features
flexible underwriting guidelines, down payment assistance, and "gap financing ".
Hopkins is one of the thirteen cities in suburban Hennepin County that have
been included in this pilot program.
Foreclosure Prevention Program
The chart below shows the number of Hopkins homeowners requesting
foreclosure prevention assistance.
Page Three
HOME Line's Center for Homeownership
Hopkins
The main reason for default was unemployment or a reduction in
income.
Main Reasons for Default
Unemployment or Reduction in Income
• Health or Health Care Costs
o Divorce /Separation
® Money Mismanagement
• Unexpected Expense
® Not Affordable
• Other
Foreclosure was averted in approximately 78% of the cases.
34 Hopkins homes have been saved.
A total of $15,366.30 in financial assistance was
obtained for Hopkins homeowners.
Results of 49 Closed Files
• 34 Homes Saved
• 4 Homes Sold
O 7 Foreclosures
CO 4 Unknown