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CR 93-39 Community Development Grant Program -~-~-~---- ( 'i "I Y 0 \ , I OA..._ - '. v '" ~ ~ -. -s. ~ March 8, 1993 o P K I ~ Council Report #93-39 1993 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM - PUBLIC HEARING AND RESOLUTION ProDosed Action staff recommends approval of the following motion upon completion of public hearing: Adopt resolution number 93-21 a~provinqthe proposed program for Year XVX Urban Hennepin County Community Development Block Grant Funds and authorizinq its submittal. With approval of this motion, the CDBG application will be submitted to Hennepin County .for their review and approval. Overview As a participating City in the Urban Hennepin County CDBG program, Hopkins is eligible to receive $145,187 in CDBG rii:i funds for Program Year XVX. The funds will be received on July 1, 1993 and must be expended by December 31, 1994. Staff is recommending that the City propose to fund the housing rehabilitation program, the Greater Minneapolis Day Care Association and public housing modernization with the 1993 CDBG funds. 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. primary Issues to Consider o What is the intended use of CDBG funds? o What activities are being recommended for funding? o What other activities are eligible for 'funding? supportinq Information o Resolution 93-21 o Statement of Objectives - CDBG program " I i i , ~ . 1993 CDBG Program Report #93-39 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 national objectives of the CDBG program are: o developing viable urban communities by providing decent housing, a suitable living environment and expanded economic opportunities principal1.Y for low and moderate income persons o aiding in the prevention or elimination of slums and blight o meeting other community development needs having a particular urgency. Additionally, Hennepin County imposes the following guidelines: . o 15% maximum for pUblic service activities o maximum of three locally administered activities o minimum allocation of $7,500 per activity. o What activities are being recommended for funding? staff has recommended that 1993 CDBG funds be allocated as follows: o $ 100,187 - Housing Rehabilitation o $ 15,000 - Greater Minneapolis Day Care Assoc. o $ 30,000 - Public Housing Modernization - Dow Towers Housinq Rehabilitation The need for a continued housing rehabilitation program has been identified in the comprehensive plan and the housing analysis due to the age of the City's housing stock and the percentage of low to moderate income households. Although financing for the Residential Rehabilitation Program is available through the City's revolving loan fund, if alternative funds are not used to supplement the program, the revolving loan fund would soon be depleted. The City of Hopkins made a total of seven loans and/or . grants with 1991 CDBG funds. An additional seven loans and/or grants have been or will be made with 1992 CDBG funds. Staff feels that it is important to continue funding , .. - 1993 CDBG Program Report #93-39 Page 3 the rehab program at similar or slightly increased levels as previous years. Greater Minneapolis Day Care Association (GMDCA) Currently, there are 37 Hopkins' families on the Greater Minneapolis Day Care Association (GMDCA) waiting list. GMDCA was able to serve eight families with 1991 CDBG funds, and is currently serving four families with 1992 CDBG funds. Although GMDCA originally requested $20,000 for the 1993 program year and was allocated $10,000 through the 1993 City budget, staff is recommending an allocation of $15,000. This figure is based on a number of factors including the increase in CDBG funds allocated for 1993, and a desire to maintain the current level of service. staff is not recommending the full requ~st.of $20,000 due to ongoing concerns regarding GMDCA's ability to spend CDBG dollars in a timely manner. ~ Public HO\lsing Modernization ~ This activity is being recommended for funding for several reasons. First, it is an eligible activity which directly benefits low income residents. Furthermore, it will allow the HRA to. maintain a reasonable reserve level within it's operating fund for emergency situations. Current obligations, inCluding the purchase of the land for the parking lot construction south of Dow Towers, and recent emergency utility repair costs at the 20th Avenue Townhomes have drastically .reduced the reserve balance. Staff is proposing that $15,000 in CDBG funds be used for the construction of the parking lot south of Dow Towers. Additionally $15,000 is proposed to be used for interior improvements to common areas within Dow Towers. As part of this project it is anticipated that the hallways of two floors would be upgraded with the same treatment as the recently completed lobby/first floor hall area. o What other activities are e1iqible for 'fundinq? In preparing staff's recommendation for use df 1993CDBG funds a number of eligible activities were considered. The following is a list of other activities which are eligible and have been considered by City staff but not being t recommended at this time for the reasons deta1iled. Administration: Traditionally, CDBG funds have been reserved :for program , , . 1993 COBG Program Report #93-39 Page 4 implementation rather than for administration due to the limited amount of funds received. Additionally, the salaries for the staff that administers the housing rehabilitation programs are paid out of the housing rehabilitation revolving loan fund and not with the City'S General Fund or COBG monies. This is done due to the amount of recordkeeping necessary when using COBG funds for administration. Because both funds (revolving loan account and COBG funds) are used for the same purpose, housing rehab, there is no benefit in using COBG funds for administration. Housing: COBG funds can be used for a wide variety of housing activities which meet the needs of low and moderate income persons. The city's rehab program is an excellent example of an eligible housing activity. other housing activities considered include rental rehabilitation, . first-time homebuyer assistance, and scattered-site acquisition program. ~ ~ staff has discussed with Hennepin county the possibility of using COBG funds for financing the rehabilitation of rental property. Although it would be an eligible activity, the relatively small amount of funds available would severely limit the number of projects that could be assisted. Therefore the impact of this activity would be minimal and the amount of funds available would not be sufficient to satiSfy the. demand. Alternative rental rehab financing is continued to be sought. , ' Additio~ally, staff has discussed the possibility of designating the funds be used for assist~nce to low income first time home buyers. However, currently the City offers similar assistance through the MHFA Homeownership Assistance Fund. - Staff has also considered developing a scattered-site acquisition program, however, the costs have been prohibitive. If COBG allocations increase significantly in future years, staff may recommend pursuing .this option. At the present time, staff feels COBG funds can more effectively utilized through the rehabilitation program. Neighborhood Revitalization: ~~ The objective of this activity is to maintain and preserve viable neighborhoods and neighborhood commercial service centers through concentrated community development '- activities. The amount of funds available do not allow the --------- " . . 1993 CDBG Program Report #93-39 Page 5 city to conduct a comprehensive neighborhood revitalization program. Public Facilities: The objective of this activity is to improve existing and assist in development of new pUblic facilities which primarily benefit low to moderate income persons. The only eligible project which has been identified is public housing modernization. Economic Development: The objective of this activity is to provide financial assistance to for-profit or non-profit business operations which will provide or retain permanent employment opportunities for low and moderate income.persons, at a ratio of at least one full-time job created or retained for each $10,000 of program funds used. staff feels that the limited CDBG funds are better .spent on other activities given the eligibility guidelines and . reporting requirements for this activity. Public Services: The objective of this activity is to provide funding for pUblic services which represent a new service or expanded level of service. The proposed Greater Minneapolis Day Care Association assistance is a public service activity. The city is limited to 15% of its allocation for public service activities and each 'activity must receive a minimum of $7,500. There are other social service programs which in the past have requested CDBGfunds, such as Vail Place and Senior Community Services. Last year, Vail Place requested $6,000 and Senior community Services requested approximately $14,000 for operation of their HOME program. Neither organization was fund~d through the 1992 CDBG program. Both Vail Place and Senior Community Services were included in the 1993 City budget but did not submit specific requests for 1993 CDBG funds. While requests were not received, it is assumed that these organizations could spend additional funds through the CDBG program. However, staff is not recommending funding either of these organizations through the 1993CDBG program. - Architectural Barriers: The removal of architectural barriers for the handicapped is an eligible expense under the City's housing rehabilitation program. There have been no pUblic buildings in the City of " . ~. 1993 COBG Program Report #93.;..39 Page 6 Hopkins which have been identified to require handicap accessibility improvements. Alternatives The Council has the following alternatives regarding this issue: o Hold public hearing; approve the 1993 COBG Program as proposed by staff. o Hold public hearing; Amend the proposedCOBG activities and budget. o Hold public hearing; continue discussion until next Council meeting. . .. .,. - -~-- . . RESOLUTION NO. 93-21 RESOLUTION APPROVING PROJECTED USE OF FUNDS FOR 1993 ( YEAR XIX) OF THE URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM 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 March 16, 1993 to ,obtain the views of citizens on local and Urban Hennepin County housing and community development needs and the City'S proposed use of $145,187.00 from the Year XIX Urban Hennepin County community Development Block Grant. BE IT RESOLVED that the City Council of the City of . Hopkins approves the following project for funding from the Year XIX Urban Hennepin County Community Development Block Grant program related and applicable program income and authorizes submittal of the proposal to Hennepin County for review and inclusion in the Year XIX Urban Hennepin County Community Development Block Grant Program Statement of Objectives and Projected Use of Funds. Project Budget Housing Rehabilitation $100,187 Greater Minneapolis Day Care Assoc. $ 15,000 Public Housing Modernization $ 30,,000 Adopted this 16th day of March, 1993. By: 'Mayor Attest: City Clerk , - , I . STATEMENT OF OBJECTIVES 1993 (YEAR XIX) URBAN HENNEPIN COUNTY CDBG PROGRAM Community Development Block Grant funds may be used to support a wide range of housing and community development activities. The Statement of Objectives provides a framework for use by Urban Hennepin County participants in develop- ing local community development programs. Urban Hennepin County objectives are supportive of the nationalCOBG objectives and are intended to illustrate their application to the satisfaction of .theshort-term and long-term housing and community development needs of Urban Hennepin County. In addition, each activity carried out with CDBGfunds must, of course, be eligible under program regulations (24 CFR 570) as well as fundable pursuant to a national program objective. The national objectives of the COBG program are: developing viable urban cpmmunities by providing decent housing, a suitable living environment and expanded economic opportunities principally for low and moderate income persons; aiding in the prevention or elimination of slums or blight; and meeting other community developmeritneeds having a particular urgency. The Urban Hennepin County COBG objectives are presented by major program subheadings. They are highlighted under the subheading. ADMINISTRATION " - The COBG program requires that Urban Hennepin County maximize the benefit of - available. funds consistent with the needs of low and moderate income persons ~ and participant communities. In like manner it isa program responsibility to maximize program benefit and effectively administer program funds. - Contain program administrative costs through the use.of program manage- ment contracts for joint activities funded by several jurisdictions. - No more than three activities should be undertaken by any participating community. Each activity should be budgeted with at least $7,500 in CDBG funds. In cases where the planning allocation is less than $7,500 only one activity should be programmed. When funds are committed jointly with other participants to carry out a single activity these limits need not apply. - Facilitate cooperation among participants in the development and imple- mentation of multi-community CDBG activities to address common concerns and needs. - Support program activities which will generate program income to maintain a level of program funding. - Maintain a process for citizen participation in the development, imple- mentation and evaluation of the Urban Hennepin County COBG program. - Implement Urban Hennepin County COBG assisted activites in compliance ~ with the Urban Hennepin County Antidisplacement and Relocation Plan and the Uniform Relocation Assistance and Real Property Acquisition Policies Act. .- . "~~ " . HOUSING Through the Comprehensive Housing Affordability Strategy (CHAS) of the Hennepin Housing Consortium, Urban Hennepin County has set out strategies and priorities for the use of available public and private resources to meet the housing needs of. low and moderate income. persons, particularly those with special needs. The Urban Hennepin County CDBG program is one of these resources and consistent with the CHAS is intended for use in achieving the following objectives: . - Encourage multi-community cooperation in housing development and rehab- ilitation programs. - Support the development of new ownerjrenterhousing affordable to low and moderate income households. - Support the rehabilitation of existing rental units and single-family dwellings. - Support the development of transitional housing facilities for persons who are homeless or at risk of becoming homeless. NEIGHBORHOOD REVITALIZATION As an intergovernmental effort, Urban Hennepin County includes a broad range . of communities and neighborhoods, some of which, due to the age of their structures, are in need of assistance for infrastructure rehabilitationj installation. .- Maintain and preserve viable. neighborhoods and neighborhood commercial service centers through concentrated community development activities. PUBLIC FACILITIES AND IMPROVEMENTS The provision and improvement of public facilities represents a significant cost to the community and the individual user (particularly those of low .and moderate income). - Improve existing and assist in the development of new public facilities which principally benefit low and moderate income persons. , Included in .this objective are those publicandjor nonprofit facilities' designed for providing shelter and other essential services for persons with special I ' needs. ! . ECONOMIC DEVELOPMENT Within the context of the Community Development Block Grant Program economic development must relate to the creation or retention of long-term employment opportunities for low and moderate income individuals. - Provide financial. assistance to for-profit or non-profit business . operations which will provide or retain permanent employment oppor~ tunities for low arid'moderate income persons, at a ratio of at least one . full-time job created or retained' for each $10,000 of program .funds used. . ,ie, .. . PUBLIC SERVICES The CDBG program asserts that the expansion and improvement of the quantity and quality of public services available to low and moderate income persons is essential for the development of viable communities. - Provide funding for public services which represent a new service or expanded level of service consistent with CDBG regulations. REMOVAL OF ARCHITECTURAL BARRIERS The Urban Hennepin County CDBG program is committed to the removal of archi- tectural barriers which prohibit, limit or discourage individuals with disabilities from accessing services, facilities and accommodations provided for public use. . . 2/2/93 STATMTOF.OBJ