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MINUTES/URBAN DEVELOPMENT COMMITTEE
Wednesday, August 12, 1998 - 12:15 p.m.

Members present: Glassheim, Beyer, Polovitz.

2. Matter of appeals to various programs:
Keith Lund, Urban Development, reported he had two citizen requests:
a) Appeal for acquisition by Agnes Ruud, 317 8th Avenue North
Mr. Lund reported that Ms. Ruud was originally on Phase III list, and split those into acquisition or rehabilitation, that Ms. Ruud had taken out building permit and was sent Phase III rehab letter, where it was explained to her that if she thought the City made an error in offering her rehabilitation rather than acquisition, that she could appeal to their office and would consider her request. He reported she made no contact and her file was closed; her daughter recently contacted him to see what could be done about acquiring her property. He stated they took out a permit to try to repair damage and realized it wasn't repairable. The property had a pre-flood value of $33,700 (land and building total) and they are requesting to be considered for Phase III Acquisition, the City would demolish the property, that they aren't making a recommenda-tion as program is closed, but had the appeal been made on time the City would have bought the property; there was 83% damage; and property met two of the criteria for being purchased: lower valued property under $45,000, and had sustained damage in excess of 75%. It was noted that this is on a 25 ft. lot.

Moved by Polovitz and Beyer that we make an exception and grant request for acquisition of the house at 317 8th Avenue North under Phase III Program. Motion carried.

b) Mr. Lund reported they had received request from Sharon Borgen, 2510 11th Avenue South, to apply for Phase V, however, upon research they would perhaps qualify for Phase III Program and wrote letter of appeal; they were over 50% damaged and within their letter they explained the family situation which may have impacted their ability to make clear decision at the time; that if they would have applied when program open, they would have been run through the program. They are requesting late admittance into the Phase III Rehab Program, which is $15,000, with a lien on the property for 5 years for amount of grant and would be forgiven 20%/year for 5 years. They have done work, and there would be a reimbursement. Moved by Beyer and Polovitz to include this property in the Phase III Rehab Program. Motion carried.

1. Matter of rental rehab.
Terry Hanson, Urban Development, reported that two weeks ago they sent out survey to all rental rehab participants in single family residences of four-plexes or less asking if needed additional funds for rehab projects - sent out letters on 360 properties to 261 landlords and received 83 responses in timely manner and pertained to the situation. He reviewed listing of 83 who replied, that they have received assistance of $1.3 million

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(including insurance, SBA and FEMA and Rental Rehab Loan Program),
of that the Rental Rehab Program has assisted them for $967,000. He stated they show damages total of $1,689,000 for those wet units (112 units), and leaves shortage of about $387,000. He reported they mailed to everyone with 4-plexes or less, and there's need for additional funding or landlords were short from assistance they received, and is at council's discretion whether that assistance should come from CDBG funds, only $218,000 in SBA assistance and most would have been eligible had they applied for it, some may have applied and took City dollars instead.

Mr. Hanson reported that our program was allocated $8.5 million
towards rental rehab projects and of that $1 million was a grant from the State and $7.5 million was supplemental CDBG funding; council action two weeks ago reduced the $7.5 million to $6.9 million (reduced by $600,000) because had that much either returned or denied/voided applications (went with SBA, buyouts, etc); and he stated there's still an uncertainty whether the entire $6.9 million will be expended because may not go through with project, don't need it, etc. He reported that out of the $6.9 million they have expended $5.4 million and this program has been in existence for a year so most of the work should be done; there are a few that have indicated they still have to do work (haven't found qualified contractors, etc.) He reported that staff recommendation if do this, would have to re-write mortgages on these properties and notify whether do individually or through the public information office and newspaper that the program has been extended or re-opened and have application period, where apply and document, and where needed additional funds; this was to show that they could get additional funds, and would not base on responses received, but go into more depth. He stated they would open program to those already existing and participated to date and have been awarded funding. He stated they may have under-estimated the dollars that it takes to rehab a unit and existing applicants maybe need an increase; that they re-opened this program 3 or 4 times in the past to give everybody an opportunity to apply.

Tim Wald, 1434 South 16th Street, stated he had asked for an additional $4,000 because materials were over the $8,000 he received, and no way he can put basement together for $8,000 because had to totally re-gut and start from scratch. He reported that he lives in the upstairs and has 2 bedroom unit downstairs; his total damage was $22,000 (including upstairs because had to do duct work).

Mr. Hanson reported this Program doesn't require a match of funds, is a 0% loan with payments delayed for 5 years and runs over 5 years.

Tim Lamb stated this is a last resort for many of them, applied for loans through local banks, applied for SBA loans and that he had

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been cancelled on SBA loans for various reasons, that FEMA funds were not available and landlords are not considered a business so business loans not available to them either under Business Loan Program that was available for flood relief, and just trying to take care of the bills that were incurred because of this flood, would encourage the committee to favorably consider opening this program again for 82 properties that responded to this survey and this is fairly good measure of what is needed, less than half million dollars which is in the budget.

Mr. Hanson stated they should have a cut off date, that in April they sent out request for status of the projects funded, and that's when came back and reduced the Program total by $600,000. It was noted that in April they increased number of applicants by about 30 properties. Mr. Hanson stated that he was comfortable in saying there would be about $300,000 in funds allocated to this project that wouldn't be used. Mr. Siewert stated they would have to give people an opportunity to find contractors or opportunity to get the work done, give 3 months. He stated they received letters where misinformed of program guidelines, that all the units were eligible and not only those flooded. It was noted that's not a program change but an exception based upon misinformation.

Beyer stated she was wrestling with reopening program, that there are people who really need it. Mr. Siewert stated this is a reimbursement program, that money expended, don't reimburse personal work. There was some discussion re. duplication of benefits, incl. private insurance; Mr. Hanson stated that SBA and/or FEMA may get that but don't release information to City. Mr. Hanson stated they have asked for that information from the applicant, and no way to verify. Beyer stated that there's lot of people in town that lost substantial amount of things in basement and fall under no program, and these people given some dollars to rehab as much as could, compared to other private individuals who don't get anything.

Glassheim stated that they probably wouldn't have any program if compare to everyone else, but have program to rehab and put $8.5 million into helping those people, and his suggestion is to put a deadline and with what funds available from the $6.9 million could be used for this and that a max. amount of $2-3,000 per property additional be placed and that people be limited to no more than 3 properties for expanded program.

Francis Wald, 1104 South 11th Street, stated this is rental unit, didn't qualify for SBA because he already has too big a payment and can't afford another one, that he just got done making a big loan to fix his house up and then were evacuated, can't get bank loan because just made a loan for him; and got into this program - has 5-bedroom unit and received $10,000 which he used for materials but needs help to finish. He stated that the upstairs is rented,

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(before only received $500 but will be able to get $700), that income not enough to hire someone to pay for this. Committee stated that everyone took a hit, lost income or had to borrow more.
Mr. Hanson stated that Glassheim's suggestion didn't have adminis-trative problems with it, but maybe wouldn't resolve some of the problems that the landlords might have.

Moved by Polovitz and Glassheim that all requests for reimburse-ments must be submitted on or before Friday, October 9; and that an application process be opened to existing approved applicants with four-units or less in one structure which sustained physical damage, with an application deadline of September 18.

Mr. Lamb stated he would like to comment on the timeframe, that most of them had bills and they're supposed to have been paid and taking out of what would put aside for maintenance for these properties to pay off these old bills, and would encourage com-mittee to consider opening up this program for three properties and capping it at $3,000 within the next thirty days for those appli-cants that applied here (84 applicants); Glassheim stated they would have to open to everybody so people treated fairly, and would have to send something out to everybody. Glassheim stated that they don't feel would fair very well asking for new money, council would never pass, and may not pass this, but is best can do, staying within what's already appropriated.

Mr. Hanson stated they could shorten time period to 60 days because program around for 14 months.

There were some questions whether volunteer help could assist in these; Keith Lund stated their mission has been to assist owner occupied units. Mr. Hanson stated they could ask that.

Upon call for the question, the motion carried, Beyer voted no.

3. Mr. Hanson reported that an individual who was misinformed by their office and could have applied for more units included in the dwelling at the time but only applied for unit that got wet, and he does have three upstairs units that he didn't apply for and could have received funding for those units; that he won't dispute that individual misinformed, and asked committee if they would consider reconsideration of his application and allow them to receive application for the full number of units. Moved by Polovitz and Beyer to authorize consideration of application for the full number of units. Motion carried.

Meeting adjourned at 1:15 p.m.
Alice Fontaine, City Clerk

Dated: 8/12/98